“The reason is a result of increasing costs, including rising fuel prices and a substantial increase in the cost of newsprint,” said Seattle Times Co. spokeswoman Corey Digiacinto. The Times publishes both newspapers as part of the papers’ Joint Operating Agreement.

The price of the Sunday Seattle Times (the P-I doesn’t print on Sunday) will remain at $1.50, she said.

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“A government that can't approve the budget according to a timetable it set for itself is effectively declaring itself unable to act on any important matter,'' Olmert told ministers, according to a summary of his remarks posted on his office's Web site.

Olmert spoke as the Cabinet began deliberations on the 236- billion-shekel ($66 billion) 2009 spending package. He is due to step down as prime minister after the ruling Kadima Party chooses a new leader next month. If his successor fails to reconstitute the coalition, Israel will hold early elections.

The prime minister urged ministers in his four-party coalition to avoid “factional'' considerations and back the Finance Ministry's draft budget. The draft budget seeks about 7 billion shekels in cuts in order to meet targets for lower spending and the deficit.

The debate is the first of two the Cabinet will hold, with today's discussions focusing on amendments to the law needed to implement next year's budget. The budget calls for spending growth after inflation of 1.7 percent and a deficit ceiling of 1 percent of gross domestic product.

Israeli Law

After the Cabinet approves the budget, it goes to the Knesset, the country's parliament, which must give its consent by the end of the year. Under Israeli law, the 2008 budget will remain in force if parliament fails to approve a new spending plan.

Finance Minister Ronnie Bar-On gave the Cabinet two options for achieving the cuts. This could be accomplished mainly through reductions on defense spending, the option he favors, or by focusing spending cuts on social welfare.

Bar-On urged ministers who are seeking more spending to counter the effect of the slowdown to back the Finance Ministry plan, saying it amounted to a “counter-cyclical'' budget because spending was rising even as tax revenue was falling.

“I am determined to do everything in my ability to convince you to approve the budget in the coming week before we go into what is expected to be a political freeze,'' he told ministers in a transcript of remarks released by e-mail from the Finance Ministry.

Economic Growth

The budget comes up for approval at a time when Israeli economic growth is slowing and inflation is rising.

While the government ran a budget surplus of 1.86 billion shekels in the first seven months of this year, tax revenue has been falling because of slowing economic growth. Gross domestic product will expand 4.2 percent, the slowest since 2003, and will ease to 3.5 percent in 2009, the ministry said June 10.

Consumer prices rose an annual 4.8 percent in July, the Central Bureau of Statistics reported two days ago. That exceeded the median forecast of economists polled by Bloomberg by half a point.

The global economic slowdown and inflation may have “unexpected consequences'' on the Israeli economy, Olmert said today. He said Israel's GDP growth will be buoyed by “balanced'' fiscal policy and monetary-policy “discipline'' on the part of the Bank of Israel.

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U.S. investors turned bullish on the greenback after incorrectly forecasting a decline last month, according to respondents in the monthly Bloomberg Professional Global Confidence Index, which questioned 2,969 users from Los Angeles to Paris to Tokyo. Participants became bearish on the franc and yen while growing more pessimistic about the British pound.

“It's not that people are more optimistic about the U.S. economy,'' said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York and a survey participant. “The rest of the world is catching up with the U.S.''

European Central Bank President Jean-Claude Trichet said Aug. 7 that the region's economy will be “particularly weak'' through the third quarter. The Federal Reserve said Aug. 5 that a shrinking labor market and banking strains will hinder U.S. growth. Japan's government said Aug. 6 the economy is “deteriorating,'' acknowledging for the first time that the country's longest postwar expansion has probably ended.

The index of expectations on the dollar for U.S. users rose to 57.48 for August from 45.44 in July. A reading above 50 indicates participants expect the currency to appreciate.

Dollar Index

The U.S. Dollar Index, which tracks the currency against six trading partners, yesterday touched 76.616, the highest level since Feb. 12. The index has advanced 3.9 percent since July 31. Last week's 3.3 percent gain was the biggest since January 2005.

“We continue to remain bullish on the dollar,'' said Matthew Strauss, a senior currency strategist at RBC Capital Markets Inc. in Toronto, and a survey participant. “There are still significant hurdles ahead for the U.S. economy. But we see increasing deterioration for the rest of the world.''

He expects the euro will weaken to $1.38 by the end of the year from $1.49 yesterday and the record high of $1.6038 on July 15. Against the yen, the dollar ended yesterday at 109.54, up 14 percent from the low this year of 95.76 yen on March 17.

Gains may prove temporary, based on trading patterns and the U.S. current account deficit, according to strategists from Charlotte, North Carolina-based Bank of America Corp. to Morgan Stanley in New York.

Relative Strength

The 14-day relative strength index measuring the pace of the euro's decline fell to 20.05 on Aug. 11, the lowest level since the currency's debut in 1999. A reading below 30 suggests a currency's drop is extreme and a reversal may be imminent.

The current account deficit, the broadest measure of trade, was $176.4 billion in the first quarter, compared with the average shortfall of $100 billon since 1993, the Commerce Department's most recent data show.

In Switzerland, the outlook for the franc tumbled to 42.50 from 59.37. The index for the yen declined to 49.19 from 55.08, while U.K. users increased bets against the pound, with the index falling to 37.73 from 42.41.

The dollar is getting a boost from speculation that lower commodities prices will boost consumer spending. The UBS Bloomberg Constant Maturity Commodity Index fell 18 percent to 1,406.104 yesterday from a record 1,714.362 on July 2. It rose 50 percent in the prior 12 months.

Fed Forecast

Users in the U.S. forecast the Fed will increase its target interest rate for overnight loans between banks from 2 percent. The index measuring the outlook for the federal funds rate was 57.33 for August, compared with 57.35 in July. Their views on the economy became less bearish, with the index climbing to 16.74 from 8.77.

Higher short-term deposit rates can make a country's fixed- income holdings more attractive for international investors, bolstering demand for the currency. The dollar depreciated 12 percent against the euro between Sept. 18 and April 30 as the Fed cut the fed funds rate to 2 percent from 5.25 percent and the ECB kept its equivalent unchanged at 4 percent.

Users became less certain 10-year Treasury yields will rise as the sentiment index fell to 65.26 from 66.72 in July. The yield on the benchmark 10-year note declined 9 basis points, or 0.09 percentage point, yesterday to 3.91 percent in New York, according to BGCantor Market Data.

Yields increased from this year's low of 3.28 percent on March 17 on speculation the combination of Fed rate cuts and rising commodity prices would spark inflation.

In Germany, the index measuring bund yields dropped to 53.85 from 60.83. Users in Japan cut their outlook for higher yields, as the index declined to 50.41 from 56.64.

U.K. users turned bullish on gilts, with the index falling to 48.93 from 53.83. Property values fell the most in at least a quarter of a century in July, HBOS Plc reported on Aug. 7.

Participants in Switzerland became less certain the Swiss National Bank will raise its benchmark rate from 2.75 percent. The index that measures expectations for short-term borrowing costs fell to 55.42 in August from 65.11.

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For the quarter ended June 30, the vehicle emissions testing and safety inspections company lost $174,000, or 3 cents a share, compared to a profit of $102,000, or 3 cents a share, a year earlier.

The company said it lost $225,000 in early operating expenses at new locations in St. Louis, Dallas and Houston, the company said. The company reported a record revenue of $2.6 million, up 5.7 percent from $2.5 million in the same period last year. Revenue from same-stores sales, however, decreased $98,000 or 4 percent.

Same-store sales are a key measure of retail health that highlight the comparative performance of stores open at least one year.

"As expected, our investment in new stores in Houston, Dallas and St. Louis added additional revenue and operating expenses which contributed to the loss in the quarter and six months," said Richard Parlontieri, president and chief executive, in a statement.

"We may continue to operate at a loss and our cash on hand may decrease as a result of the early operating losses at the new stores until they achieve the test volume necessary to break even. We are working extremely hard with our new store projects and look to improve on our results going forward."

Atlanta-based Speedemissions Inc. is a vehicle emissions testing and safety inspections company with St. Louis, Atlanta, Dallas and Houston and Salt Lake City markets.

kvolkmann@bizjournals.com

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“We have no plans to insert money into either of those two institutions,'' Paulson said in an interview with NBC's “Meet the Press'' broadcast yesterday from Beijing. He added that their results were “not a surprise'' and that the housing slump will last beyond this year.

Paulson last month brokered a plan to bolster the two government-sponsored enterprises that includes giving Treasury the right to buy their shares. Fannie and Freddie, which account for almost half of the $12 trillion mortgage market, reported losses three times wider than estimated, prompting some investors to predict that Paulson will be forced to act.

“Given that Fannie Mae and Freddie Mac are solely involved in housing, that's their sole business, and given the magnitude of the housing correction we've had, it's not a surprise to me to see those losses,'' Paulson said.

Paulson, the former chairman of Goldman Sachs Group Inc., said he won't serve as Treasury secretary under the next president, regardless of who is elected in November.

“I'm going to run right up until the end,'' said Paulson, 62, who joined the Bush administration in July 2006, succeeding John Snow. “I will do everything I can to make for a smooth transition, to work closely with my successor here in Treasury.''

Biggest Threat

Paulson said Freddie and Fannie's financial problems underscored his view that the housing crisis remains the biggest threat to the U.S. economy. The worst housing slump since the Depression won't end quickly, he said.

“We have got some serious issues that we're dealing with in our economy,'' he said. “I believe it's going to take us well beyond the end of the year to work through all the housing problems.''

Home prices in 20 U.S. metropolitan areas fell in May by 15.8 percent from a year earlier, the most on record, the S&P/Case-Shiller home-price index showed on July 29. Foreclosure filings in the second quarter jumped 121 percent from a year earlier, RealtyTrac Inc., said last month.

`Humbling' Experience

Acknowledging that the housing and credit crises have been “humbling,'' Paulson said it was important to reassure investors around the world that the U.S. is addressing its problems.

“The period of turmoil that we're going through in our capital markets today is different from some of the periods we've had in the past, in that the root cause took place right in the United States of America,'' he said. At the same time, “long-term economic fundamentals of the United States compare very favorably'' he said.

Paulson downplayed the need for a second economic stimulus package, saying the $168 billion plan enacted in February had helped boost consumption and growth in the second quarter of the year and would continue to do so. House Speaker Nancy Pelosi, a Democrat from California, has called for a second package of about $50 billion.

“Let's see how this program works in the third quarter,'' Paulson said.

His comments came after the prospect of rising inflation and slower growth led Federal Reserve Board Chairman Ben S. Bernanke and his colleagues to keep the benchmark rate at 2 percent last week.

Impact of Rebates

Gross domestic product shrank in the fourth quarter of 2007, and grew at just an average 1.4 percent annual rate in the first six months of this year, aided by some $78 billion in tax rebates sent to Americans between late April and June.

Shares in Fannie and Freddie have plummeted more than 80 percent this year on concern they don't have sufficient capital to withstand record foreclosures on the $5.2 trillion of mortgages they own or guarantee.

Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., last week said the Treasury will probably be forced to buy as much as $30 billion of preferred shares in the two.

Freddie is having trouble raising $5.5 billion in capital it announced in May, and Chief Executive Officer Richard Syron said he is waiting for a more “propitious time'' to raise the money. Fannie has raised $14.4 billion in fresh reserves since late last year; Freddie has raised $6 billion.

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In November, voters passed an amendment to the state constitution that allows inmate work programs. Supporters of the amendment said the program gives inmates the work skills they need to stay out of prison and some income to pay off their debts.

Businesses will partner with Correctional Industries to hire prisoners to make goods at sites inside prisons. The businesses, according to the state, are not allowed to “unfairly compete with any similar-type businesses located and operating within the state.”

The Correctional Industries board of directors will review if the prison businesses are having any impact on existing state businesses.

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The New York-based broadcaster, which has said it will keep XM Satellite’s D.C. broadcast operations, had fiscal second quarter loss of $83.9 million, or 6 cents per share, compared to a net loss of $134.1 million, or 9 cents per share in the same quarter a year earlier.

Second quarter revenue rose 25 percent to $283 million.

Sirius said it added 280,000 new subscribers during the quarter, with the strongest growth coming from consumers signing up after buying cars or trucks with Sirius radios as an option. Sirius ended the quarter with 8.9 million subscribers. That, combined with XM Satellite’s larger subscriber base, gives Sirius XM a total subscriber count of 18.6 million.

XM Satellite also cut its losses last quarter, reporting a net loss of $119 million, with $318 million in quarterly sales.

Sirius (NASDAQ: SIRI) convinced its shareholders merging with rival XM Satellite would save both companies money. Wednesday, the broadcaster repeated its expectation of $400 million in savings next year and substantially more after 2009.

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Blackstone, a U.S. private equity firm that is also a major shareholder in the world's second largest themed attractions operator, is a suitor to buy Busch Entertainment once the purchase of St. Louis brewing giant Anheuser-Busch is completed by InBev of Belgium, The Telegraph reported Aug. 2.

Belgian brewer InBev has not specifically addressed its plan for the parks once it completes the $52 billion deal, but has said it would finance the deal with $45 billion in debt, including a $7 billion bridge financing from the sale of noncore assets from both companies. Observers generally agree that InBev considers A-B's theme parks as part of those noncore assets Analysts estimate the value of Busch Entertainment is between $2.5 billion to $4.5 billion.

"I don't know anything about [those reports], and even if I did it's not something we could comment about," said Fred Jacobs, spokesman for Busch Entertainment Corp. "We're continuing to operate as we always have."

Blackstone owns a 50 percent stake in Universal Orlando. The firm also is a major shareholder in the U.K.-based Merlin Entertainments Group, whose attractions include the London Eye, eight Madame Tussauds wax museums, Alton Towers and LegoLand.

Merlin Entertainments also operates 26 Sea Life parks, which like SeaWorld, combines displays of ocean life with entertainment. Sea Life is the No. 2 visitor attraction in Europe.

Merlin Entertainments' attractions drew 32.5 million visitors in 2007, second only to Walt Disney Co.'s theme park division.

Blackstone co-owns Merlin Entertainments with Dubai International Capital.

The Telegraph, which did not cite sources for its story, reported that should Blackstone succeed in acquiring Busch Entertainment, the Busch parks could be merged with either the Merlin Entertainments or Universal operations.

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The Oakland company, which makes heart pumps, said it has issued 300 million shares of common stock for an aggregate purchase price of $30 million, of which Venrock Partners invested $11 million, Special Situations Fund invested $9 million and New Leaf Ventures invested $10 million.

Abiomed Inc., Venrock SSF and New Leaf will also have the right to designate one person for election to World Heart's board of directors.

Shareholders will meet in a special meeting, also required by the deal, to vote on approval of a reverse split of World Heart's common stock in order to bring the company back into compliance with the $1 minimum bid price requirement for listing on the Nasdaq Capital Market.

World Heart (NASDAQ: WHRT) will pay a $750,000 cash commission and issue warrants to purchase 2.5 million common shares to its advisers in the deal, Pacific Growth Equities LLC and Stifel, Nicolaus and Co.

World Heart's shares traded for 12 cents per share at the close of trading Friday.

mfitzhugh@bizjournals.com | 925-598-1425

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We ask, "Are you giving as much to charity this year," and 26 percent said more, 23 percent said less, 40 percent said the same amount, 5 percent said they had stopped giving anything and 2 percent said they did not know.

Some of your comments:

• "Same percentage of my income as last year, but that's more total $$."
• "Increasing the amount because it is required. Otherwise I would donate less."
• "Maybe not as much to charity, but lots more to political campaigns."
• "There is not as much money to go around. Costs are higher and we have kids in college."
• "Nonprofits need it more than ever and I will be giving more."
• "Most charities will need more; those of us who are lucky enough to have a job and their health should give more."
• "No cash, unemployed, but I will still clean the garage and visit Goodwill."
• "No. 1 charity has to be me and I don't foresee any crumbs falling from the table this year."

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