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Japan posted a current-account surplus in January as exports climbed for a second month, an indication overseas demand is sustaining the nation’s recovery.

The gap was 899.8 billion yen ($9.9 billion) compared with a deficit a year earlier, the Ministry of Finance said in Tokyo today. The median estimate of 26 economists surveyed by Bloomberg News was for a 783.9 billion yen surplus.

The report highlights the role overseas shipments have continued to play in propping up the world’s second-largest economy. Further export gains in coming months will prompt businesses to boost spending on plant and equipment, helping support the rebound, according to economist Akiyoshi Takumori.

“This confirms that the economy is recovering, led by solid overseas demand,” said Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “Although the level is still low, the recovery will fuel production and make companies more comfortable with increasing investment.”

Today’s data adds to signs of sustained expansion in the first quarter. Factory production rose at the fastest pace since May and the unemployment rate fell to a 10-month low in January. The Finance Ministry said last week capital spending also fell 18.5 percent in the three months ended Dec. 31. While that was the 11th straight decline, it was also the smallest drop in a year.

The current-account gap increased by 1.032 trillion yen from a year earlier, the second highest jump since comparable data were made available in 1986, the government said. Exports rose 40.6 percent in January from a year earlier, also the biggest advance since 1986, and imports advanced 7.1 percent.

China Shipments

Shipments to China rose at the fastest pace since 1985 in January, while exports to the U.S. advanced for the first time in more than two years, customs-cleared trade data showed last month. Today’s figures don’t include regional breakdowns.

The export rebound has been driven in part by favorable year-on-year comparisons. Shipments had plunged last year in the wake of a global credit crunch caused by the collapse of Lehman Brothers Holdings Inc. Japan posted its first current-account deficit in 13 years in January 2009 as a result.

Overseas shipments of Nissan Motor Co. cars rose 29.6 percent in January, while Mitsubishi Motor Corp. shipped more than double the amount of vehicles compared with the same month a year ago, according to the Japan Automobile Manufacturers Association.

Economy Expanded

The Cabinet Office will say the economy expanded at a revised 4 percent annualized pace last quarter, according to the median estimate of 27 economists surveyed by Bloomberg News. Preliminary figures showed 4.6 percent growth. The report is due on March 11 at 8:50 a.m. in Tokyo.

“Right now the economy is being pulled by exports and inventory adjustments,” Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo, said before the report was released. “Once we enter the second quarter, manufacturers’ capital spending will be a new contributor to the economy’s growth.”

A separate report today showed bank lending fell for a third consecutive month in February, sliding 1.6 percent from a year earlier, as companies cut spending.

On a seasonally adjusted basis, the current-account surplus widened to 1.71 trillion yen in January. Exports rose 8.8 percent from December, and imports climbed 2.3 percent.

The income surplus, the difference between money earned abroad and payments made to foreign investors in Japan, narrowed 8.1 percent to 911 billion yen in January from a year earlier, the ministry said.

The current account tracks the flow of goods, services and investment income between Japan and its trading partners. It includes trade not shown in the customs-cleared balance.

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Lee Sachs, a counselor to Treasury Secretary Timothy F. Geithner, plans to step down this year as the banking crisis wanes and the Obama administration winds down its emergency programs.

As an adviser on domestic finance, Sachs helped conduct stress tests on the biggest banks and reshape the $700 billion bailout. He also helped manage trillions of dollars in additional government borrowing and advised Geithner on the market implications of issues from the Greek budget crisis to housing finance.

Sachs says he’s leaving now that markets have stabilized and Geithner has had time to set up a permanent team. “I came back down here to help the president and secretary to design and execute their response to the financial crisis,” he said in an interview. “The financial system is in a much stronger position today than it was a year ago.”

His departure comes as the crisis-response team he established becomes a permanent part of the Treasury Department. A former senior managing director at Bear Stearns Cos., the New York-based investment bank bought by JPMorgan Chase & Co. in 2008, Sachs will be one of the most senior of Geithner’s advisers to step down.

“I am likely going to head back to the private sector at some point in the next couple of months,” said Sachs, 46. He says he’ll take some time off before deciding on his next move, to recover from “running 100 miles-an-hour around the clock to stabilize the financial system” alongside regulators and White House officials.

Sperling May Follow

Another Geithner counselor, Gene Sperling, may also be leaving the Treasury soon. Sperling is under consideration for the post of deputy director of the Office of Management and Budget, according to a person familiar with the matter.

Geithner, 48, yesterday credited Sachs with showing “great judgment and skill in helping the president navigate the greatest financial crisis since the Great Depression.”

One of Sachs’ legacies will be the Office of Capital Markets and Housing Finance, successor to an informal crisis- response team he helped establish in the Treasury’s domestic finance division. Led by Matthew Kabaker, a former executive at Blackstone Group LP, the unit fulfilled one of Geithner’s goals at the start of the new administration.

“In transition, we recognized that the Treasury Department did not have a staff capability to deal with capital markets and finance-related issues,” Sachs said. “We need this team.”

Fannie, Freddie

The Treasury is moving into a long-term planning phase after 18 months of primarily managing the aftermath of the financial crisis. Priorities this year include pressing for an overhaul of financial regulation and starting to design plans for the future structures of mortgage finance companies Fannie Mae and Freddie Mac to bring to Congress in 2011.

Since taking office, the Obama administration has tried to change the $700 billion Troubled Asset Relief Program from a bank rescue into a financial-stability plan. TARP, enacted in October 2008, expires in October.

Geithner’s department last year set up the Public-Private Investment Program with the goal of removing as much as $1 trillion in troubled assets from bank balance sheets. The program has moved forward on a much smaller scale, committing as much as $30 billion in government money for participating funds.

The Treasury also held several additional rounds of capital injections for small banks. Those programs drew few applicants, as banks feared customers and investors would shun firms that accepted money from the TARP.

Clinton Years

Other regulators say Sachs’ strength has been his ability to understand the government’s role in the crisis, which allowed him to start work immediately after the 2008 presidential election. He was already known on Wall Street and in Washington from his early career, which spanned 13 years at Bear Stearns followed by a tour in the Clinton administration under former secretaries Robert Rubin and Lawrence Summers.

“When he called me in November, right away we were communicating, I knew I could trust him, I knew I was working with somebody who knew what they were talking about,” Federal Reserve Vice Chairman Donald Kohn said in an interview. “He’s really knowledgeable about financial markets and financial institutions. He’s seen that world from both sides.”

Kohn, who will step down in June after a 40-year central bank career, described Sachs as “even-tempered,” with a sense of “quiet authority creditreport.” He says they worked closely together when Sachs served in the Clinton administration and spoke daily, sometimes more often, during the height of the financial crisis.

“I have found him an important ally for the Federal Reserve,” Kohn said. “He was very sensitive to the issue of Federal Reserve independence.”

Capital Injections

One example of Sachs’ influence came when regulators were debating how big banks should repay capital injections they received in 2008 at the height of the crisis. Sachs advised regulators on how quickly banks could be expected to raise private capital, as well as how markets might react.

Sachs forged ties to his current boss during the Clinton administration, when Geithner worked in the Treasury’s international affairs division. With Sachs in domestic finance, the two worked on debt crises in Russia and Asia, while also competing on the tennis court and in triathlons.

Geithner is faster. “I think he called me from home as I was crossing the finish line,” Sachs said of one shared racing experience.

Wall Street Resume

Critics said Sachs’ financial-market experience isn’t an automatic advantage. His ties to Rubin, who hired Sachs in 1998, could be seen as a liability after the country’s biggest banks required bailouts, said William Black, a law professor at the University of Missouri-Kansas City.

“‘Market experience’ from individuals that screwed up the markets is an interesting concept,” said Black, who served as a federal bank regulator during the savings-and-loan crisis of the late 1980s and early 1990s.

The post-crisis stigma attached to Wall Street resumes accompanied Sachs to the Obama administration: Since joining the team in late 2008, he was never nominated for a Treasury position that required Senate confirmation.

Instead, Sachs was one several counselors serving Geithner in the first months of the administration, when the Treasury Department had no Senate-confirmed senior officials other than the secretary. Congress has since confirmed Deputy Secretary Neal Wolin and a number of assistant secretaries, without approving the administration’s picks to lead the Treasury’s international affairs and domestic finance divisions.

Nominations Weighed

As a result, nominees Jeffrey Goldstein and Lael Brainard have been serving alongside Sachs, Jake Siewert and Gene Sperling as counselors, while the Senate weighs their nominations. Goldstein, a former private equity executive, has been tapped as the undersecretary of domestic finance. Brainard, who served as Clinton’s deputy director of the White House National Economic Council, has been nominated as the undersecretary for international affairs.

The lack of Senate-confirmed Treasury officials came as the White House fended off criticism from lawmakers including Senator Maria Cantwell, a Democrat from Washington state who has repeatedly faulted Obama administration proposals as being too soft on the financial industry without doing enough to close regulatory loopholes.

In the Clinton administration, market experience was viewed as an asset and not a handicap. Gary Gensler, chairman of the Commodity Futures Trading Commission and Clinton-era Treasury official, said he remembers being “delighted that somebody of Lee Sachs’ caliber and values was willing to join the team.”

Mariner Investment

After Clinton left office, Sachs was a partner at New York- based Mariner Investment Group, which owned a stake in at least one company that specialized in collateralized debt obligations — a type of investment that fueled the crisis.

Before joining President Barack Obama’s transition team after the 2008 election, Sachs earned more than $3 million in salary and partnership income at Mariner in 2008, according to his financial-disclosure forms.

In the 1980s and 1990s, Sachs rose to head of global capital markets and the board of directors at Bear Stearns after graduating from Ohio’s Denison College. Sachs is married to Whitney Sachs, a former attorney, and they have two 14-year-old daughters.

“You can work for the secretary of the Treasury of the United States,” said Michael Berman, president of the Duberstein Group, a Sachs family friend who helped him link up with Rubin’s Treasury. “But when it comes right down to it, the twins are in charge.”

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Cyanotech Corp. of Kona made $605,000 on revenues of $3.9 million for the three months ended Dec. 31, 2009.

That compared with a $514,000 profit on revenues of $3.5 million in the same period in the previous fiscal year.

The Big Island biotech company (Nasdaq: CYAN), which develops and sells microalgae products, attributed the gains to the launch of new products during the quarter, including a multivitamin ay day loans.

“Despite economic challenges, our focus on business fundamentals remains robust,” President and CEO Andrew Jacobson said in a prepared statement.

Shares of Cyanotech were at $3.19 on Thursday, down 12 percent for the day.

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Renovation work that could turn a century-old former Buffalo hotel into a market-rate apartment building is expected to start this spring.

The $1.8 million project, which is being shepherded by Kissling Interests, will see the conversion of the former Lake Hotel at 201 Huron St. renovated into eight apartments. The project cleared one of its final hurdles Monday morning when the Erie County Industrial Development Agency's directors unanimously approved a tax-abatement package. The hotel conversion qualifies under the IDA's adaptive re-use policy and could save Kissling $80,600 in sales and mortgage-recording taxes.

"This is a great example of an adaptive re-use project," said Buffalo Common Council President David Franczyk, an ECIDA director. "It's a building with a lot of character."

Constructed in 1896, the three-story, 11,000-square-foot building has alternated as an apartment building and a hotel. As a hotel, it was known as the Darrow Hotel, the Delmar Hotel and the Lake Hotel.

Located deep in Buffalo's West Side, the project is the latest in a series of new developments to take hold in one of the poorest sections of the city. Recently, Ellicott Development Co. opened a Family Dollar store further up Niagara Street.

Kissling paid $40,000 for the building, when it acquired it one year ago.

"Personally, I'm glad to see some interest there," Franczyk said. "Give Kissling credit for taking a chance on the neighborhood."

The renovation is being designed by Carmina Wood & Morris Architects.

The first tenants are expected to move in later this year or by early 2011.

The project is one of several historic and adaptive re-use efforts underway locally by Kissling Interests. The former National Casket Co. building on Virginia Street is in the process of being renovated into 10 live-work loft-style residences. Kissling is also restoring a century-old former Remington Rand warehouse in North Tonawanda into a mixed-use building, anchored by loft-style apartments.

Besides the Kissing Interests abatement package, the IDA directors also:

• Approved an abatement package for OMFS Properties LLC to build an oral and maxillofacial surgery center on Young Street in Tonawanda that will focus on providing service to low-income families and children.

The 3,200-square-foot center, to be run by Northtowns Oral and Maxillofacial Surgery in conjunction with the University at Buffalo's School of Dental Medicine, carries a $2.3 million price tag.

The center will create 10 jobs and is expected to see 800 patients annually, with one-quarter coming from outside the region.

OMFS Properties will receive $726,250 in a tax-abatement package.

• The agency will receive a $100,000 state grant that is being allocated to Buffalo Southern Railroad for repairs to a county-owned rail line in Hamburg that services trains bringing in equipment, exhibits and animals for the annual Erie County Fair.

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St. John’s Mercy Foundation recently appointed George Roman chairman of its board of directors. Roman is vice president of government operations and regional executive for Boeing’s St. Louis-based defense unit.

He takes the place of former foundation board Chairman Tom Gunn.

Roman is also a member of the board for hospital parent St. John’s Mercy Health Care.

St. John’s Mercy Foundation is a non-profit that supports St. John’s Mercy Medical Center, the second-largest hospital in St. Louis and a member of St. John’s Mercy Health Care and the Sisters of Mercy Health System. Denny DeNarvaez is chief executive of St. John’s.

St. John’s Mercy Health Care also operates St. John’s Mercy Hospital in Washington, Mo., St. John’s Mercy Medical Group, St. John’s Mercy Health Services and St. John’s Mercy Affiliated Physicians.

Chicago-based Boeing Co.’s (NYSE: BA) defense unit, Boeing Defense, Space & Security, is the second-largest employer in St. Louis with $32.4 billion in revenue in 2008 and 16,000 local workers.

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Home remodelers are getting less bang for their bucks. For the fourth straight year, renovation jobs have added less to resale values relative to their costs, according to an annual Remodeling Cost vs. Value Report released this week by the National Association of Realtors.

The average remodeling job cost $50,908 in 2009 and added $32,497 to the value of the home, a ratio of 63.8%. That was down from a cost-to-value ratio of 67.3% in 2008, when the average was $49,866 and the added value was $33,568.

One common renovation, a mid-priced bath remodel, for example, runs an average of $16,142 and adds only $11,454 to the resale value of a house — recouping just 71% of its cost. In 2008, the same job cost less — $15,899 — and typically added $11,857 to the home’s value, recouping 74.6%.

The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.

"Once again, this year’s report highlights the importance of a home’s first impression," said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

Ron Phipps, a real estate broker in Rhode Island, said how the house looks from the outside is more important than ever.

"If you’re driving down the street and the house doesn’t have great appeal, it doesn’t matter how nice it is inside," he said.

But here’s the kicker: Clients are savvier than ever in their shopping. Even though the costs of home improvements are less likely to be returned on resale than they have been in prior years, sellers may still have to bite the bullet and do the remodeling if they want their house to sell at all, he said.

"It’s kind of intriguing," said Phipps. "Buyers are using the unimproved houses to negotiate lower prices, but they wind up buying the remodeled homes."

So, if there are two similar houses in the area, buyers will use the listing price of the one that has not gone through a metamorphosis to get the seller of the renovated house to slash their price. Buyers want to pay for the caterpillar but get the butterfly.

Seller must play along if they want to make deals. "You get to sell the house more quickly if you do the renovations," Phipps said.

Biggest pay-offs

The major job that returns most in resale value is an upscale replacement of siding using fiber-cement. The job costs an average of $13,287 but increases home value by $11,112, or 83.6%. A vinyl siding replacement returns 79.9% of costs.

Adding a basement bedroom is also fairly cost effective, averaging $49,346 but adding $40,992 in value, an 83.1% return.

"Increasing livable square footage with a new deck or an attic bedroom is usually more valuable than just remodeling existing space," Phipps said.

The return on investment for some jobs varies greatly by region.

In New England, where winter are long and cold, vinyl window replacements reap a better return than they do in the warm South Atlantic region, where poorly insulated windows don’t mean as much expensive heat leaking away.

So, although replacement windows cost more in New England — an average of $11,155 — they add $9,152 to home values there, recouping 82.3% of their cost. In the South Atlantic states, they cost $9,705 but add just $7,417 to home values, 76.4% of their cost.

On the other hand, buyers in the South Atlantic seem to reward sellers for adding living space more than they do in New England. Maybe thrifty Yankees hate having to heat those extra rooms.

Finishing a basement returns 84.4% of its $55,357 cost in the South Atlantic and only 64% of the $65,715 New Englanders spend for the job.

Among the remodeling jobs faring the worst in return on investment were large, upscale kitchen remodels. They cost an average of $111,794 in 2009 and added $70,641 in recoupable value, just 63.2%.

That was down a whopping 7.5 percentage points from their 70.7% return on investment in 2008 . At the height of the housing boom, in 2005, upscale kitchen renovations returned more than 80% of their costs.

"A lot of the things that, historically, had huge value, don’t have as much today," said Phipps. "If you want to redo a kitchen, it may no longer make as much sense to use upscale appliances — Viking ranges, Sub-Zero refrigerator. Buyers may not pay any more than they would for a home with GE appliances instead."

Of course, most remodeling jobs are done to please homeowners. Any increase in home value is a bonus, not an end in itself. But for anyone thinking of selling in the near term, keeping an eye on the bottom line is always a good idea. 

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WASHINGTON–The U.S. economy flashed a warning sign of inflation Tuesday, but the recovery is so fragile that experts say a scenario of runaway prices and higher interest rates is a long way off, if it happens at all.

Overall wholesale prices jumped 1.8 per cent in November, the department of labour said, more than double the gain expected. Core inflation, which excludes energy and food, rose 0.5 per cent, the sharpest increase in more than a year.

The U.S. government will release its look at consumer prices on Wednesday instant payday loan. Economists predict a more moderate gain of 0.4 per cent, with core consumer prices expected to rise 0.1 per cent.

U.S. auto sales, meanwhile, will rise 20 per cent in 2010 as the industry starts recovering from its worst year in almost three decades, according to a forecast Tuesday from the Michigan-based Center for Automotive Research.

From the Star’s wire services

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Accenture PLC said on Sunday that it will end its sponsorship of Tiger Woods, the second major sponsor to withdraw from the golf star amid headlines about domestic turmoil.

Gillette was the first to announce plans to stop using Woods in its promotions during his announced hiatus from golf folowing a car accident and reports of extramarital affairs.

Redwood City-based Electronic Arts Inc.(NASDAQ:ERTS), meanwhile, has stood by the star whose face and name are on its computer golf game. Also standing with the embattled golfer is AT&T Inc. (NYSE:T) and Nike Inc. (NYSE:NKE).

"After careful consideration and analysis, the company has determined that he is no longer the right representative for its advertising," Accenture (NYSE:ACN) said Sunday.

The consulting company, which has an office in San Jose, had placed Woods as the centerpiece of its advertising. The company said it will immediately transition to a new campaign that had been scheduled to launch next year.

Gillette issued this statement on Saturday: "As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs."

AT&T said in a statement, "We support Tiger's decision and our thoughts will be with him and his family Low fee payday loans. We are presently evaluating our ongoing relationship with him."

EA also issued a statement last week, saying, ""We respect that this is a very difficult, and private, situation for Tiger and his family. At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged."

An online Business Pulse survey being conducted this week by the Silicon Valley/San Jose Business Journal shows most believe Woods brand still has some value, although diminished (44 percent). Another 24 percent said they will never bank on his name again while about 29 percent believe the Woods brand is untouched or will bounce back.

Woods golfed for two years for Stanford University before turning pro and was inducted into the school's hall of fame at the annual big game with rival University of California just days before his the accident that triggered his recent problems. He was surprised by the boos of Cal fans, whose team went on to upset Stanford, 34-28.

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Delinquencies among small and medium-sized U.S. business borrowers fell in October for a third straight month, according to PayNet Inc, which provides risk-management tools to the commercial lending industry.

The improved snapshot of accounts in moderate and severe delinquency is consistent with indications that business conditions bottomed out earlier in the year.

“The financial health of these millions of companies is stabilizing and the ability to repay loans on time is improving,” said Bill Phelan, president and founder of Skokie, Illinois-based PayNet.

Accounts in moderate delinquency, or behind by 30 days or more, fell to 4.07 percent in November from 4.25 percent in October, according to PayNet.

That marked the greatest improvement in the measure since June 2004. Delinquencies were running at the lowest rate since December 2008.

Accounts 90 days or more behind in payment, or in severe delinquency, fell to 1.43 percent from 1.45 percent, a third straight monthly improvement.

Still, accounts behind 180 days or more, or in default, rose to 0.87 percent in October from 0.84 percent in September, yet another new high for the current business cycle.

PayNet’s Small Business Lending Index, which measures the overall volume of financing, fell 18 percent year-over-year in October.

In recent months the level of decline has started to flatten out, but Phelan said many companies don’t see a pressing need for new business investment.

“Demand from the consumer doesn’t exist like it’s done in the past,” he said. “Business owners are not yet comfortable in expanding their companies.”

PayNet collects real-time loan information, such as originations and delinquencies, from more than 225 leading U.S. capital equipment lenders.

The company’s proprietary database encompasses more than 16 million current and historic contracts, worth $700 billion.

More than half the money invested in plants, equipment and software in the United States in any given year is financed with loans, leases and lines of credit.

(Editing by Leslie Adler)

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A man who claims to be the "Godfather of Spam" has been sentenced to 51 months in prison by a federal judge in Detroit for his lead role in an e-mail stock scam scheme, according to court documents.

Alan Ralsky, 64, also faces five years probation and will have to forfeit $250,000 that was seized by the government in 2007.

U.S. District Judge Marianne Battani also sentenced three others Monday for their involvement in the scheme, including Ralsky’s son-in-law Scott Bradley, 48, who received 40 months in prison and five years probation.

Ralsky and Bradley were charged for conspiring to commit wire and mail fraud and violating the CAN-SPAM Act, which criminalizes large, commercial e-mail messages sent using an unauthorized computer or with the intent to hide the e-mail’s original source, according to the office of the U.S. Attorney for the Eastern District of Michigan. They were also charged with committing wire fraud and engaging in money laundering.

Ralsky and Bradley, both of West Bloomfield, Mich., pleaded guilty to the charges in June.

Ralsky’s history as a prolific spammer dates back to 1997. Before the Bush administration passed a law to crack down on e-mail marketers in 2003, Ralsky reportedly sent 70 million messages a day from fake names.

In the operation that began in January 2004, the team sent billions of illegal e-mail advertisements to inflate the price of Chinese penny stocks and then reaped the profit, according to the prosecutor’s office. They raked in nearly $3 million during the summer of 2005.

The prosecution said Ralsky worked with How Wai John Hui, a resident of Hong Kong and Canada, to run the operation. Hui was also sentenced to 51 months in prison and 3 years of probation, and he agreed to forfeit $500,000 easy payday loans.

Hui was the CEO of China World Trade and served as the lead dealmaker representing companies whose stocks were being promoted in the spam e-mails. Hui plead guilty in December 2008.

John Bown, 45, of Fresno, Calif., was sentenced to 32 months in prison for his role in the scheme. He will face 3 years of probation and will forfeit $120,000.

"With today’s sentence of the self-proclaimed ‘Godfather of Spam,’ Alan Ralsky, and three others who played central roles in a complicated stock span pump- and-dump scheme, the court has made it clear that advancing fraud through the abuse of the Internet will lead to several years in prison," said U.S. Attorney Terrence Berg, in a statement Monday.

Though the government originally recommended that Ralsky receive up to 87 months in prison, it lowered the sentence recommendation range in November to between 35 and 43 months because of Ralsky’s cooperation.

Ralsky’s lawyer, Steven Fishman, said he believed the sentence was "excessive."

"It was the most disappointing event that I have ever experienced in 36 years as a lawyer," Fishman said. "The sentence was higher than even what the government recommended, and I never imagined that in a million years. Everyone in the court house was stunned."

The FBI conducted a 3-year investigation and indicted the 11 involved individuals in December 2007.

Five others, who also pleaded guilty, were to be given their sentence Tuesday. Cases for two other individuals that were indicted were still pending. 

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