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As 2009 approaches, plummeting oil prices have sent the price of gasoline to the lowest level in nearly five years, according to a daily survey of gas station credit card swipes.

Gas prices fell for the tenth consecutive day Monday, according to motorist group AAA. Regular unleaded fell to an average of $1.619 a gallon, the lowest since gas hit $1.617 a gallon in January 2004.

Prices are down nearly $2.50, or more than 60%, since hitting a record average high of $4.114 a gallon this July. Prices have plummeted along with the price of crude oil, the main ingredient in gas, as the current economic has crisis intensified and threatened demand for petroleum-based fuels.

Oil has shed more than $100 a barrel since July.

"When you have the price for the raw material drop over $100 a barrel, that’s why you see the price of gasoline drop," said AAA spokesman Troy Green.

In the United States, the world’s largest oil consumer, citizens drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year, according to the U.S. Department of Transportation.

And crude demand in China fell 3 payday cash advances.2% in November compared to the prior year due to lower imports and a decline in refinery usage, according to estimates compiled by Reuters.

Gas may continue to sell at record lows heading into 2009 unless economic activity shows some sign of recovery, according to Green.

Usually gas prices rise in the spring as Americans take to the road.

"Will the economy be in such bad shape that we don’t see that typical runup?" posed Green.

State prices: Prices remained above $2 a gallon in only two states Monday: Alaska ($2.518) and Hawaii ($2.332).

Gas was cheapest in Missouri at $1.419 a gallon on average, and sold for less than $1.50 on average in ten states.

Diesel: Meanwhile the price of diesel fuel, which is used in most trucks and commercial vehicles, fell to $2.435 on average Monday.

The AAA figures, compiled by Oil Price Information Services, are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. 

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With the clock ticking toward a Dec. 11 closing deadline, the $52 billion buyout of BCE Inc. appeared to dodge yet another bullet this week after Washington moved to bail out Citigroup Inc., the deal’s biggest financial backer.

Shares of BCE soared nearly 10 per cent, or $3.39, to $37.94 yesterday on the Toronto Stock Exchange after the U.S. government said a day earlier that it would shield Citigroup from hundreds of billions in losses from toxic assets by injecting $20 billion (U.S.) of capital into the bank.

Investors in the Canadian phone giant had become concerned about the deal’s chances last week as the spectre of bankruptcy was raised at Citigroup.

Such an outcome could put in jeopardy the bank’s commitment to funding the $42.75 per share (Canadian) takeover of BCE by the Ontario Teachers’ Pension Plan.

Citibank is estimated to be contributing between $11 billion and $13 billion of the deal’s $32 billion in financing, while Royal Bank of Scotland Group and Deutsche Bank are believed to be on the hook for between $8 billion and $9 billion each. Canada’s Toronto Dominion Bank has pledged $3 billion in loans.

Greg MacDonald, an analyst at National Bank Financial, said in a note to clients yesterday that bank insolvencies now pose the biggest risk to the deal’s completion, but noted that governments around the world have so far shown a willingness to provide bailouts for the financial sector.

"With recent international stability efforts for the global financial system, we believe the probability of deal close is growing," MacDonald said.

Signed at the height of the market in June 2007, the deal to privatize BCE was quickly thrown into doubt after the crisis in the U business card design.S. subprime mortgage market spawned a corporate credit crunch and, ultimately, a market meltdown.

As a result, investors have been concerned for months that the transaction would be scrapped as the banks backing the deal faced steep losses on the loans they pledged to fund the transaction.

More recently, questions arose about the solvency of the institutions themselves.

The U.S. government’s bailout of Citigroup, which last week revealed a plan to cut 52,000 jobs globally, represents Washington’s biggest effort yet to prevent a major bank from failing.

The bailout would give the U.S. government a 7.8 per cent stake in Citigroup and marks the latest effort to contain a widening financial crisis that has already brought down storied Wall Street investment firms, including Bear Stearns and Lehman Brothers Holdings Inc.

The move is designed to protect Citigroup from losses on $306 billion (U.S.) of troubled U.S. home loans, commercial mortgages, subprime bonds and corporate loans when the firms tumbling share price sparked concern that depositors might pull their money and destabilize the company. Citigroup has $2 trillion of assets and operations in more than 100 countries.

The $20 billion of new cash comes on top of a $25 billion infusion the bank received last month under the Troubled Asset Relief Program, passed by U.S. Congress to shore up the financial industry.

Shares of Citigroup surged 57 per cent to close yesterday at $5.95 on the New York Stock Exchange.

With files from the Star’s wire services

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General Motors shook an already embattled auto industry Friday as it reported a huge quarterly loss that was much worse than expected and warned it is in danger of running out of cash in the coming months.

The nation’s largest automaker reported that it lost $4.2 billion, or $7.35 a share, excluding special items. That’s up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share.

But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter.

In addition, the company said that in the first half of next year its "estimated liquidity will fall significantly short" of what it needs to continue operating. It said the only thing that would save it would be a significant improvement in economic and automotive industry conditions, help from the federal government, better access to capital markets or some combination of those options.

The report was by far the most grim assessment by a company that has insisted it is not considering filing for bankruptcy court protection. While the release did not mention the threat of bankruptcy, the outlook appeared to raise the possibility of such a dramatic step.

In response to questions on a conference call after the report, CEO Rick Wagoner said he would not speculate on whether GM would need to file for bankruptcy protections.

"We’re convinced the consequences of bankruptcy would be dire and extend far beyond General Motors," Wagoner said. "We need to find a way to get through this and that’s our focus."

Shares of GM (GM, Fortune 500) fell 9% Friday to $4.36, a nearly 60-year low.

Industry experts said the incredibly weak October U.S. auto sales that GM and the rest of the industry reported Monday, coupled with Friday’s report, mean that bankruptcy for GM is a very real risk.

"I think we should be worried [about a bankruptcy] right now," said Robert Schulz, Standard & Poor’s senior auto credit analyst. "We were worried before and the relative level of worry is now heightened."

S&P cut GM’s credit rating deeper into junk bond status to a rating of CCC+ Friday afternoon, not far above the D rating that indicates default by a company.

Shelly Lombard, senior high yield analyst at Gimme Credit, an independent research firm, estimates that GM will need to get between $10 billion and $15 billion in federal assistance in order to avoid bankruptcy by 2010 and that the chance of bankruptcy without help is probably 80% to 90%.

"They didn’t want to speak the B word. It doesn’t sound like they have a lot of options if the government doesn’t step forward," she said, adding that aid for the auto industry that has already been approved by Congress amounted to "bringing a Band-Aid to a train wreck."

Both Schulz and Lombard also said that not even a federal bailout may be able to save either GM or Ford in the long-term considering the problems facing the industry.

"To the extent that they do receive some assistance, it’s more buying time rather than a fundamental solution," said Schulz.

Still, experts agreed Congress will need to take swift action to make any difference for the embattled industry.

"This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks," said Dave Cole, chairman of Michigan think-tank the Center for Automotive Research. "When your cash is gone, you’re gone."

One possible endgame scenario reported recently involved a corporate tie-up between GM and Chrysler. Wagoner, without mentioning Chrysler by name, said that GM had ended talks about a possible merger with a Detroit rival to concentrate on the cash crisis it now faces.

"While it’s fair to say we conclude this acquisition could have provided significant benefits, we’ve concluded at this particular time that it’s important we put 100% of our efforts on the immediate liquidity challenges," said Wagoner.

Chrysler issued a statement of its own after GM’s report. CEO Robert Nardelli didn’t comment about the merger talks but said Chrysler would keep looking at various options to end its ongoing losses cash advance loans.

"As an independent company, we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid in our return to profitability," he said.

GM announced a series of steps Friday designed to help it improve its cash reserves by $5 billion. Those steps included cutting another 10% of salaried employment costs, on top of the 20% cut in those costs already planned. In addition to expected staffing reductions, those white collar workers will not get their typical incentive pay next year.

The company will also cut capital spending plans by $2.4 billion in 2009, pushing back development plans for some new models. But it warned that even those steps would not be enough unless conditions improve. It did not announce any plans for additional plant closings or hourly staff cuts in its statement, however.

The company is clearly pinning much of its hopes of weathering the current downturn on an industry bailout from Washington.

"The company has engaged in discussions with various U.S. federal government agencies and congressional leaders about the … the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers," according to a company announcement.

Wagoner joined the chief executives of Ford Motor (F, Fortune 500), privately-held Chrysler LLC, as well as the president of the United Auto Workers union Thursday afternoon in meetings with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., to seek support for a wide-ranging bailout package. Both congressional leaders voiced support for additional help for the sector following their meetings.

Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers’ balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals.

The discussions also touched on whether the government would allow the automakers to tap the $700 billion bailout of Wall Street firms and banks that was enacted last month. Treasury has so far rejected auto industry inquiries about accessing that pool of money.

The automakers also renewed their pre-election request to double the $25 billion low-interest loan program approved by Congress to help automakers convert operations to make more fuel-efficient vehicles and meet the demands of car buyers and new federal rules.

But Wagoner said just doubling the money available under that program won’t solve the immediate cash crisis facing the industry. And for the first time, he put a dollar amount on the cash that automakers are looking for from the federal government right now.

"In the meeting yesterday we talked near-term liquidity support for the industry in the range of $25 billion," he said. "No one said yes or no to that number."

The company’s problems have been building for many years. It has not made money on its core North American auto operations since 2004, and since that time it has run up $72 billion in net losses, including this latest period.

The company did see a one-time $1.7 billion gain from a change in accounting for its obligation to pay for health care for retirees and their family. That allowed it to post a net loss of $2.5 billion, or $4.45 a share, an improvement from the net loss of $42.5 billion, or $75.12 a share a year ago when it was hit by huge special charges.

Much of the net losses in recent years have been due to non-cash charges, such as the ones a year ago. But even excluding those kinds of special charges, GM’s core auto operations in North America have lost nearly $18 billion over the course of the last 15 quarters.

GM’s announcement came on the same day that Ford Motor reported a $3 billion loss in the period, excluding special items. Even Japanese rival Toyota Motor (TM), which has a much better cash position coming into this crisis, announced Thursday that its third quarter earnings had plunged nearly 70%, as it slashed its full fiscal-year outlook by 50%. 

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Pharmacy-benefits manager Express Scripts Inc. said today that it received a extortion letter from an unknown person or persons demanding money and threatening to expose millions of the company’s patients’ records.

The letter included information on 75 patients, including their names, birth dates, social security numbers and, in some instances, prescription information, the north St. Louis County-based company said. The letter arrived in early October, Express Scripts said.

The company said it has notified the affected clients and the FBI, which is investigating the letter fast payday loan no faxing. Express Scripts said it also is conducting its own investigation.

The company did not say how much money the extortionist wanted.
Express Scripts’ stock fell about 6 percent to $58.18 in afternoon trading.

atablac@post-dispatch.com | 314-340-8140

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3M Co (MMM.N: Quote, Profile, Research, Stock Buzz) reported a 10 percent rise in quarterly earnings on Tuesday, a pleasant surprise, sending shares as much as 7 percent higher compared with a decline in the broader market.

3M’s broad lineup of businesses — from high-tech industrial products such as chemicals used in aircraft maintenance to basic consumer goods like Post-It notes — make it a bellwether of the U.S. economy. With U.S. demand slowing, 3M has been relying on foreign markets for growth.

“They’re definitely benefiting from the fact that they make things that everybody needs,” said Sterne Agee analyst Nick Heymann, noting that international markets generated 62 percent of the company’s sales.

The company, which makes products ranging from Scotch tape to optical films for liquid crystal displays, posted third-quarter net income of $991 million, or $1.41 per share, compared with $960 million, or $1.32 per share, a year earlier.

Factoring out special items, the St payday advance lender. Paul, Minnesota-based company posted earnings of $1.42 per share, which compares with analysts’ estimates of $1.38 per share, according to Reuters Estimates.

Revenue rose 6.2 percent to $6.56 billion, a bit short of analysts’ estimates of $6.67 billion.

The company lowered its outlook slightly, predicting 2008 earnings in the range of $5.40 per share to $5.48 per share, an 8 percent to 10 percent increase, instead of the minimum 10 percent increase it had previously predicted. Analysts see 2008 EPS of $5.45, according to Reuters Estimates.

But even the reduction translated into a positive against reduced expectations, as the outlook was “far from the disaster many have come to expect,” wrote J.P. Morgan analyst C. Stephen Tusa Jr, who rates 3M shares “overweight.” 

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Only five U.S. companies filed initial public offerings in the third quarter, an 87 percent drop from the third quarter of 2007, according to Hoovers Inc.

The five companies that went public on U.S. exchanges last quarter raised $917 million. That is down considerably from the 38 companies that went public a year ago, raising $11.2 billion.

“The IPO market is as bad as we’ve seen since 2003, and the ongoing troubles of the U.S. financial sector aren’t making conditions any friendlier for IPO aspirants and their underwriters,” said Tim Walker, Hoover’s industry expert.

The sobering third-quarter figures come on the heels of a 77 percent year-over-year drop in second-quarter filings and a 73 percent drop in first-quarter filings.

Among the companies that filed in the third quarter, Energy Recovery Inc. (NASDAQ: ERII) of San Leandro, Calif. had the best first day of trading, with shares gaining 16 percent. Rackspace Hosting Inc. (NYSE: RAX) of San Antonio had the worst first day—its shares dropped 20 percent the day it went public.

“Any company coming to the IPO market wants to feel sure that it can get a favorable hearing from potential investors,” said Walker. “If you’re Google or Visa, your brand ensures you’ll get that hearing. But if you’re anybody else – even a billion-dollar arm of an existing business that wants to spin off – you’re gambling right now that the week of your debut won’t be a market roller-coaster.”

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Prime Minister Gordon Brown will say bold and far-reaching action is needed to tackle the global financial crisis when Britain unveils a multi-billion pound bank rescue package Wednesday.

The package, due to be announced at about 7 a.m. (0600 GMT), will involve what a government source has described as a large-scale injection of capital into major retail banks, some of which have lost half their value this week.

“Extraordinary times call for bold and far-reaching solutions,” Brown will say at a news conference with finance minister Alistair Darling scheduled for 9 a.m. (2:00 a.m. EDT), according to extracts released by his press office.

“This is not a time for conventional thinking or outdated dogma but for fresh and innovative intervention that gets to the heart of the problem.

“These decisions on stability and restructuring are the necessary building blocks to allow banks to return to their basic function of providing cash and investment for families and businesses (payday loans).”

Financial analysts expect the package to involve the government providing up to 50 billion pounds to the banks in exchange for equity stakes in the form of preference shares, which could see taxpayers benefit if the banks recover.

The package follows a meeting Tuesday involving Brown, Darling, Bank of England governor Mervyn King and the head of the Financial Services Authority. There was pressure from bank chief executives to act.

British media have suggested the package could also involve a stand-by facility that would effectively allow banks to tap as much money as they need, but the government source played this down. 

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VANCOUVER–United States regulators gave Canadian Pacific Railway Ltd. the green light yesterday to take control of Dakota, Minnesota & Eastern Railroad Corp., which could eventually bring a third railroad to lucrative Western U.S. coal fields.

The Surface Transportation Board said the $1.5 billion (U.S.) acquisition, announced last year, would not lessen competition in the rail industry and no shippers would lose the option of competitive services because of the takeover.

But the board said it still wants to look at the potential environmental impact of increased coal shipments over the line if Canadian Pacific decides to pursue the closely held DM&E’s plan to extend track into Wyoming’s Powder River Basin faxless payday advance.

Canadian Pacific was also told it had to continue efforts to improve safety on DM&E, and its subsidiary the Iowa, Chicago & Eastern Railroad.

Calgary-headquartered CP, Canada’s second-largest railway, which already has extensive operations in the U.S., said it had agreed to all of the conditions set by regulators.

The regulators said Canadian Pacific cannot move any coal traffic from the proposed expansion until the board has completed an environmental impact review.

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Bank rescues spread in Europe on Tuesday and President George W. Bush gave assurances that a $700 billion bailout plan for the financial sector was not dead, giving markets around the world a boost.

The House of Representatives rejected the bailout plan on Monday, sending stocks to their biggest percentage decline in 20 years.

Bush, Treasury Secretary Henry Paulson and congressional leaders pledged to continue negotiations, but the earliest that Congress could start work would be Wednesday.

“There’s an overarching belief that at some point this week, whether it’s Wednesday or Thursday, we’ll get something passed by the House,” said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

Without the bailout plan, which would allow the Treasury to buy toxic mortgage-related assets from banks, credit markets around the world could remain frozen, which could lead to a recession.

“I assure our citizens and citizens around the world that this is not the end of the legislative process,” Bush said before the stock market opened.

The White House said Bush had “constructive” talks with presidential candidates Sen cash advance. John McCain, a Republican, and Sen. Barack Obama, a Democrat, on Tuesday. Both candidates have urged their fellow members of Congress to pass the bailout package, which has overshadowed their campaign for the November 4 election.

Ireland unveiled a blanket guarantee for savings held by its banks, covering up to 400 billion euros ($575 billion) in liabilities, sending Irish bank stocks roaring up against a weaker sector trend. 

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What’s better than a credit card that gives points for free flights?

How about a credit card that gives cash rebates?

You can book your own flights during seat sales, often a better deal than using the card.

There’s nothing worse than waiting years to collect points for a airline ticket, only to find you still have to pay hefty taxes and surcharges. If you have points piling up, you may be happier with cash rebates paid once a year that you can use to buy anything you like.

There are more cashback credit cards on the Canadian market than ever before. Let’s start with no-fee or low-fee cards.

The CIBC Dividend Card has three tiers of rebates. You get 0.25 per cent on net annual purchases up to $1,500, 0.5 per cent up to $3,000 and 1 per cent over $3,000.

Scotiabank’s Moneyback Visa card has the same three tiers of rebates. It has an $8 annual fee, but gives you an 18.59 per cent interest rate (lower than CIBC’s 19.5 per cent).

The TD Rebate Visa suits low spenders. It has just two tiers: 0.5 per cent on purchases under $3,000 a year and 1 per cent above that (up to $25,000 a year).

RBC’s no-fee Rewards Visa Gold and Rewards Visa Classic cards give you financial rewards. You can pay down an RBC mortgage, loan or line of credit, or contribute to a registered retirement savings plan or education savings plan.

Financial rewards are popular, accounting for 18 per cent of total gift certificate redemptions, says RBC spokeswoman Jackie Braden. People like to pay themselves first and get related tax benefits or grants.

BMO has a no-fee cashback reward option on its Mosaik MasterCard, giving 0.5 per cent on purchases and 1.5 per cent at Shell gas stations. (With the premium cashback option at $49 a year, you get 1 per cent on purchases and 2 per cent at Shell.)

Monty Loree, a blogger who writes about credit at www.canadian-money-advisor.ca, helped me find other cashback cards that looked enticing.

Citizen’s Bank lets you earn points for its financial products faxless payday loans. It donates 10 cents to non-profit initiatives worldwide each time you use the card.

At a cost of $45 a year, Citizen’s My Visa Rewards Plus card has a low interest rate of 11.25 per cent.

Capital One’s Cash Back Platinum Plus MasterCard, aimed at big spenders, gives you 1 per cent on purchases up to $10,000, 1.5 per cent up to $20,000 and 2 per cent on $20,000 or more.

It has a $59 annual fee and a variable interest rate of prime plus 15.05 per cent (equal to 19.8 per cent right now).

MBNA’s Premier Rewards Platinum Plus MasterCard gives you a 1 per cent rebate on all purchases with no limits. The annual fee is $29.

Finally, American Express has a Costco cash rebate card with three tiers: 0.25 per cent on the first $2,000, 0.5 per cent on the next $3,000 and 1.5 per cent on any amount over $5,000.

The maximum rebate is $500 a year, which requires $37,000 in spending.

While the Amex card is free, you have to pay for a Costco membership every year ($50). It’s the only credit card accepted by Costco stores. You can juice up your rebate by an extra 0.5 per cent when you carry a balance on the card.

Next week, we’ll look at the best deals in travel and merchandise rewards.

Ellen Roseman’s column appears Wednesday, Saturday and Sunday. You can reach her by writing Business c/o Toronto Star, 1 Yonge St., Toronto M5E 1E6; by phone at 416-945-8687; by fax at 416-865-3630; or at eroseman@thestar.ca by email.

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