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A decade-old medical technology startup called Disc Dynamics Inc. has closed its doors and is selling off its assets, according to reports.

The Eden Prairie-based company was developing a treatment for lower back pain, but never got its product approved by the U.S. Food and Drug Administration.

Former CEO Steven Healy left the firm last July to be CEO of Maple Grove-based Lumen Biomedical. Healy, the former president of St. Jude Medical Inc.’s Cardiac Surgery division, had been CEO since 2002.

Disc Dynamics’ Chief Financial Officer Keith Eastman couldn’t be reached for comment.

Three employees remain from the peak of 32 workers, including Eastman, who is managing the sale of the company’s assets, according to a report in the Minneapolis Star Tribune.

Disc Dynamics’ technology was designed to treat lower back problems by injecting a fluid into the spine through a catheter. The fluid then expands and gels inside the back to create an artificial nucleus for the disc.

The company raised about $65 million in venture capital over the years from a variety of investors including Eden Prairie-based Split Rock Partners and Fridley-based Medtronic Inc.

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The amount of money that Canadians are stashing away for retirement has been declining for a decade, and the trend is likely to continue through 2020 as the baby boomers move into their golden years, according to a study by the Royal Bank of Canada.

Contributions to registered retirement savings plans, or RRSPs, grew steadily from the late 1960s to the late 1990s.

Since 1997, there has been a "decidedly downward trend" in the RRSP savings rate, the report says.

"This downward trend in itself doesn’t mean there’s a problem," if the level of savings is still adequate for Canadians’ retirement, RBC assistant chief economist Paul Ferley said in an interview.

"The big question is determining how much savings is needed to properly fund the population as they move into their retirement years. At the moment the academic community is working through that analysis. There doesn’t seem to be a consensus on that."

A falloff in savings would have a negative impact on the overall economy because it would result in fewer funds available for business investment.

Government officials said in December they will study and consult the public on a short-list of proposals for how to boost retirement savings.

The list includes everything from a continued reliance on voluntary savings plans and higher contributions to the Canada Pension Plan to supplementary pension plans and tax reform.

A report is expected by May.

Financial planning experts, academics and labour groups have been calling for pension reform, particularly as the massive baby boom population, those born in the two decades following World War II, moves into the retirement years.

Stock market volatility and turmoil in the economy over the past two years have exposed weaknesses in the current system. Fewer than one in four Canadians now holds a private company pension plan.

The decline in RRSP contributions can largely be pinned on changing demographics, according to the RBC paper.

Different age groups tend to save differently for retirement, the study noted, with those in their mid-30s and 40s traditionally saving the most and those ages 34 and under and ages 55 and older saving less.

"Because household RRSP contributions have historically tended to fall after age 55, it is possible that we could actually see a decline in total real RRSP contributions over the next decade," the study said.

The run-up in RRSP contributions as a share of income through the 1980s and early 1990s appears to have been mainly due to the boomers entering their peak saving years, along with rising income growth and comparatively strong real stock market gains, the study found.

Periodic changes in government policy, such as increases to contribution limits and scrapping limits on carry-forward room, also spurred savings.

Retirement savings declines have been driven by falling stock markets and economic slowdown, as well as demographic changes.

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Oil prices rose above $79 a barrel Monday for the first time in four weeks as an extended cold snap triggered an end-of-year rally in energy futures.

Benchmark crude for February delivery added 72 cents to settle at $78.77 a barrel in light, holiday trading on the New York Mercantile Exchange. Prices rose as high as $79.12 earlier in the day, the highest since Nov. 18.

Futures contracts for oil, natural gas and heating oil have all become more expensive this month as snowstorms blanketed parts of the country and a sharp drop in supplies of crude and other fuels surprised traders.

More frigid temperatures are expected, with up to 4 inches of snow forecast for New England, and up to 7 inches of snow along the eastern shores of the Lower Great Lakes.

Spot prices are starting to perk up as a result.

According to the latest data from the Energy Information Administration, natural gas prices jumped earlier in December to the highest levels since January, and heating oil prices climbed during the middle of this month.

Still, the winter chill hasn’t boosted energy demand above last year’s levels. The U.S. is consuming less petroleum than it did at the same time last year, when oil and gas prices were cheaper and the economy was in recession.

American refiners have cut back on oil imports, which has helped reduce supplies and increase prices. But analyst Andrew Lipow said that oil prices also are rising as China and India expand their petroleum imports.

"That oil is finding a buyer somewhere," Lipow said.

At the pump, retail gas prices rose by less then a penny overnight to a new national average of $2.603 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Gas prices have edged up for three consecutive days, albeit slowly, for the first time since the beginning of the month. A gallon of regular unleaded is 2.4 cents cheaper than last month.

In other Nymex trading in January contracts, heating oil climbed 3.79 cents to settle at $2.0735 a gallon while gasoline added 2.88 cents to settle at $2.0184 a gallon. Natural gas increased by 34.7 cents to settle at $5.99 per 1,000 cubic feet.

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South Korean banks may become more willing to finance acquisitions next year as the economy rebounds, said Morgan Stanley Executive Director Peter Chang.

Lenders may “begin to become more open over the next year on providing acquisition financing for deals,” Chang, 32, who oversees Morgan Stanley’s mergers and acquisitions advisory in South Korea, said in an interview in Seoul yesterday. “Improvements in the availability of financing will also help drive the overall level of M&A activity.”

South Korea’s benchmark stock index has jumped 47 percent this year as Asia’s fourth-largest economy leads a regional rebound from the deepest recession since the Great Depression. The economic recovery will fuel overseas takeovers by South Korean companies, Chang said.

“Korea’s economy has held up very well relative to other countries during the financial crisis,” he said. “We think that will create more opportunities for outbound M&A.”

South Korea’s growth will outpace all except China and India among the world’s 15 largest economies over the next two years, according to the International Monetary Fund. The average capital-adequacy ratio at the country’s 18 banks rose to 14.07 percent at the end of September, the highest since at least 2003, the Financial Supervisory Services said Nov. 25.

The ratio, which measures banks’ capital reserves against assets at risk, had fallen to as low as 10.86 percent a year earlier, forcing the government to set up a 20 trillion won ($17 billion) fund to replenish their capital.

Daewoo, Hynix

Morgan Stanley was the top adviser in mergers involving Korean companies this year, according to data compiled by Bloomberg. The New York-based company advised Doosan Heavy Industries & Construction Co. on its 451.6 million euro ($644 million) acquisition of Skoda Power AS of the Czech Republic, the South Korean company’s largest overseas takeover.

Not all companies expected to be up for sale next year will find buyers, Chang said. Korea Development Bank plans to select advisers this month for the sale of Daewoo Shipbuilding & Marine Engineering Co., the world’s second-biggest shipbuilder. Hynix Semiconductor Inc. creditors are accepting letters of intent from potential bidders until Jan. 29.

South Korea’s Financial Services Commission said Dec. 16 the government will focus on selling control of Daewoo Shipbuilding, Hynix, Daewoo International Corp. and Daewoo Electronics Corp. next year.

“It remains to be seen if these deals can all be completed over the coming year,” Chang said. “Particularly for larger assets, there are typically only a limited number of parties who are logical, viable acquirers.”

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Passenger traffic continues to decline at Mineta San Jose International Airport, but the decreases are growing smaller.

In November, traffic was down 4.2 percent compared to November 2008, according to the weekly report from Debra Figone, San Jose city manager. During the summer months, monthly passenger decline percentages were consistently in the low double digits.

"The smaller decline reflects the retention of passengers on SJC's other flights and resulting higher load factors despite fewer flights, and it could be an indicator that business and leisure travel are in the early stages of recovery," Figone said in her report.

The airport, owned and operated by the city, has suffered passenger declines and a growing number of canceled flights for more than two years, as have many airports nationwide. Dating back to September 2007, Mineta San Jose has seen its daily flight volume drop from 190 to about 150. Passenger volume dropped from 10.7 million in 2007 to 9.7 million in 2008.

There has been some good news in recent weeks. On Dec. 15, JetBlue Airways announced it will restore daily nonstop service between San Jose and Boston, starting May 13. Connecting two of the nation¹s high-tech capitals, the San Jose-to-Boston

JetBlue flight will be another version of the so-called "nerd bird" flights, which is what frequent fliers call the twice-daily Alaska Airlines flights that connect Silicon Valley and Austin, Texas. Alaska resumed those flights in late summer, after American Airlines dropped its San Jose-to-Austin service earlier this year low interest personal loan.

The new JetBlue flight beginning in May will depart San Jose at 9 p.m. daily, arriving in Boston at 5:30 a.m. local time. The Boston-to-San Jose flight will depart Boston at 4:25 p.m. local time, arriving in San Jose at 8:02 p.m. JetBlue had nonstop San Jose-Boston flights beginning in 2004, but began routing the connection through New York in 2008.

Last month, Horizon Air/Alaska Airlines announced it will launch twice-daily direct service from Spokane, Wash. to Sacramento and San Jose starting March 26. One daily flight from Spokane will operate nonstop to Sacramento and continue on to San Jose, while a second flight will operate nonstop to San Jose and continue on to Sacramento. The new service also includes a second daily roundtrip between San Jose and Sacramento, facilitating same-day business trips in each direction between Silicon Valley and the state capitol.

Horizon Air started a seasonal daily flight connecting San Jose and the Mammoth Mountain Ski Area this week, running through March, to accommodate skiers heading to the huge eastern Sierra Nevada resort.

David Vossbrink, the airport's communications manager, has told the Business Journal that airport officials hope the facility's major renovation and expansion will be instrumental in helping attract new flights and carriers. The $1.3 billion Terminal Area Improvement Program, scheduled for completion in June, is highlighted by the 380,000-square-foot, $342 million Terminal B Concourse, parts of which have already opened.

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Chancellor of the Exchequer Alistair Darling is considering a levy on bankers’ bonuses and this week may reverse a tax cut for Britain’s richest households in efforts to win over voters before next year’s election.

Darling yesterday refused to rule out a tax on excessive bonus payments, although he pledged to hold back from measures that would harm Britain’s banks. He said that lowering the inheritance tax for the richest people is no longer a priority for the Pre-Budget Report on Dec. 9.

“We are not going to be held to ransom by people who believe you can pay extremely large bonuses regardless of what’s going on,” Darling told BBC television yesterday. “You have to be fair. You have to be reasonable. But you have got to keep an eye on what the long term effects are.”

Darling and Prime Minister Gordon Brown are seeking to persuade voters that David Cameron’s Conservative Party, which is sticking to a similar inheritance tax plan, is siding with the rich at a time when the country is recovering from the worst economic crisis since World War II. That strategy has helped Brown’s Labour Party erode Cameron’s lead in opinion polls.

Darling said he has not yet seen bonus plans from government-controlled Royal Bank of Scotland Group Plc and that he has the power to veto any proposals he considers excessive. Darling has also said that he is opposed to punitive measures that would damage a bank’s capital position, making it less likely that he will introduce an industry-wide windfall tax.

“It’s not a black and white world,” Darling said.

‘Super-Tax’

The government may impose a one-year windfall tax on British banks that would raise several hundred million pounds, the BBC reported, without attribution. Options may include a “super-tax” on big bonus earners, a larger employers’ national insurance charge or a direct tax on investment banks, the BBC said.

George Osborne, the Conservative lawmaker who shadows Darling in Parliament, told the same program that he “wouldn’t rule out” a charge on excessive individual bonuses if his party defeats Labour in the election, which has to take place before June.

An ICM Research poll for the Sunday Telegraph showed that the Conservatives are on course to obtain a majority of between 20 and 25 seats in the 646-seat House of Commons. A ComRes Ltd. survey Dec. 1 showed that the U.K. may be heading for a so- called hung Parliament, with Cameron leading Brown by 10 percentage points, down 3 points from October.

Darling stepped up the attack yesterday, saying Osborne’s plea to voters to endure tougher times isn’t consistent with tax cuts for the rich.

Privileged Upbringing

A YouGov Plc poll in yesterday’s Sunday Times showed that more than half of the 2,000 people interviewed viewed the Conservatives as the party of the rich. Cameron said Brown had been “spiteful’ in his efforts to tell voters of his privileged upbringing and elite schooling.

“I really can’t believe it would be the first priority of any government, at this time, to give a tax cut to the top 2 percent of estates in this country,” Darling said yesterday.

Darling said in 2007 that he would raise the inheritance tax threshold to 350,000 pounds ($578,000) from 325,000 pounds for single people and to 700,000 pounds from 650,000 pounds for couples, starting April 2010. Cameron’s Conservatives want to abolish the tax for single people with estates below 1 million pounds and for couples with estates below 2 million pounds.

“If the Labour Party wants to say don’t aspire to get on in life, then so be it,” Osborne said. “It’s part of their lurch to the left.”

Cutting Waste

Darling said this week’s budget statement will spell out some detail on how he plans to implement his pledge to reduce the deficit by as much as half over four years. In April, the budget suggested the chancellor would have to find as much as 60 billion pounds to achieve this.

Darling has already announced tax increases that will account for about one-quarter of that amount, and has earmarked about 9 billion pounds by cutting waste in government departments, leaving him the challenge of finding a further 40 billion pounds by reducing government spending.

Darling told the BBC yesterday that he will scrap a 12.4 billion-pound computer program for the National Health Service that is being developed mainly by iSoft Plc. Similar reductions, rather than staff cuts in schools and hospitals, would indicate “the direction of travel” in this week’s report, he said.

“The NHS had quite an expensive IT system and I don’t think we need to go ahead with it now,” he said.

Brown later today will say that the government will slash other non-essential government programs as it seeks to reduce the deficit.

Fragile Economy

The government will “prioritize the necessities and postpone the things we can do without,” and it “will go further than we have ever gone before in streamlining central government,” Brown will say in a speech today.

Brown said on Dec. 4 in his weekly podcast that a plan to move more government services online would save about 400 million pounds a year.

Darling’s view is that the economy is too fragile to take more steps to repair the 175 billion-pound deficit this year, a Treasury official said this week. Darling will challenge the Labour government’s opponents to spell out their plans on what they plan to reduce, the official said.

The pound snapped two weeks of declines against the euro last week as industry reports showed that U.K. services and manufacturing industries expanded in November, indicating that the recovery is taking hold.

Winning Support

Darling’s approach, contrasting with Conservative Party calls to make deeper and faster cuts, won the support of two groups in London yesterday. The National Institute of Economic and Social Research, a London-based research group that counts the Treasury and the Bank of England as clients, said Darling should keep stimulating the economy during the next few months before reducing the deficit.

The British Chambers of Commerce said the government should refrain from cutting the fiscal deficit too quickly as the nation’s economic recovery faces “major risks,”

Darling will lower his forecast for the U.K. economy this year, saying the financial crisis has inflicted far deeper pain than he predicted in April, a government official said Nov. 27. Gross domestic product will fall 4.75 percent in 2009, compared with the 3.5 percent drop forecast seven months ago, the official said. Darling said yesterday that growth in 2010 will be “moderate.”

Treasury officials said last week that Darling will scale back his estimate for the cost of bailing out Britain’s banks to no more than 10 billion pounds, from 50 billion pounds.

The reduction in the sum set aside in the government’s accounts to pay for losses will shave about 40 billion pounds off the Treasury’s debt, now about 792 billion pounds, the officials said.

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FedEx Corp shares, which have more than doubled since a low in March, may climb further given the delivery company’s growing exposure to overseas markets such as China, Barron’s reported on Sunday.

FedEx shares benefited from cost cutting over the last 18 months and, as the economic recovery revives the company’s transportation business, the shares could get a boost of more than 20 percent to trade as high as $100, the newspaper reported.

The company is well-positioned to make the most of the economic recovery, and its considerable operating leverage means that when its revenue starts to rise, costs won’t rise as quickly, according to the newspaper.

FedEx, which reported a profit of $3.67 a share for its most recent fiscal year, could earn $7 to $9 a share as markets recover, Barron’s said, citing Rob Pickels, a senior analyst at Manning & Napier.

FedEx shares closed at $81.97 on Friday on the New York Stock Exchange.

(Reporting by Elinor Comlay; Editing by Leslie Adler)

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Thomson Reuters Corp’s quarterly revenue fell but profit beat Wall Street estimates, helped by foreign currency rates and cost cuts, and the company affirmed its 2009 outlook.

The news and financial data publisher reported on Thursday that revenue in its markets division, which serves the financial industry, fell 4 percent to $1.86 billion in the third quarter.

Revenue from ongoing businesses, excluding the impact of foreign exchange rates, fell 2 percent to $3.21 billion. That compared to the average analyst forecast of $3.23 billion.

“Financial firms are watching costs and being very careful on spending money, so a lot of discretionary expenses regarding services are being cut back,” said Benchmark Co analyst Edward Atorino.

The company, formed last year by the merger of Thomson Corp and Reuters Group Plc, said underlying operating profit rose 3 percent to $711 million, from $690 million a year earlier.

Adjusted earnings per share fell to 43 cents from 47 cents, due to higher integration spending, but this beat the average analyst forecast of 40 cents per share, according to Thomson Reuters I/B/E/S.

“While the weak year-to-date net sales experienced in recent quarters are now flowing through into revenues, we expect this dip to be shallow and limited to the next few quarters,” Chief Executive Thomas Glocer said in a statement.

He also said, “Our Tax and Accounting and Healthcare and Science businesses continued to perform very strongly, and sales of subscription products in our Markets and Legal units improved in Q3 over what we expect were their bottom in Q2 advanced payday loan.”

Thomson Reuters affirmed its previous guidance, saying it expects revenue to grow in 2009 and underlying operating profit margin and free cash flow to be comparable to 2008.

The company expected the impact of weaker subscription sales in its markets and legal businesses in 2009 to continue to drag on revenue in the first half of 2010. But it said growth in other units, a focus on costs and benefits of the merger are expected to reduce the impact on operating profit.

PROFIT MARGIN UP

Thomson Reuters expects at least $1 billion in annual savings by the end of the year.

Underlying operating profit margin rose to 22.1 percent in the third quarter from 20.7 percent a year earlier.

In the professional division, which includes products for lawyers, accountants and healthcare professionals, revenue rose 2 percent before currency adjustments to $1.36 billion. Higher sales in tax and accounting, and healthcare and sciences offset a 1 percent decline in legal business revenue.

In the markets division, revenue from the media unit fell 10 percent before currency adjustments, amid consolidation among traditional media outlets such as newspapers. 

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Qatar is selling a 1.3 billion pound ($2.1 billion) stake in British bank Barclays, stoking talk it will use a big profit to make a move on UK food retailer J.Sainsbury.

Qatar owns 26 percent of Sainsbury and the retailer’s shares jumped by a fifth last Thursday on talk the sovereign wealth fund was planning a renewed offer for it, after a previous bid attempt failed in 2007.

Qatar Holding is set to make a 600 million pound ($985 million) profit on its Barclays stake, making it the second big Middle-Eastern investor to make a big profit from a stake in the bank this year, after Abu Dhabi made $2.5 billion on the sale of an 11 percent stake in June.

Qatar will remain Barclays’ biggest shareholder with a stake of about 7 percent. It is selling 379.2 million shares, which will come from the exercise of warrants for the same amount of shares at a price of 197.775 pence.

Barclays will receive 750 million pounds from the warrants.

The warrants were part of a controversial 5.8 billion pound fundraising by the bank last November, when the bank avoided selling the state a stake by raising money privately.

Roger Jenkins, a top Barclays banker who orchestrated that fundraising, left the bank in August and his new investment firm is working with Qatar, according to an industry source. A spokesman for the firm, which specializes in the Middle East, declined to comment.

The Barclays shares are being sold by Credit Suisse via an accelerated bookbuild.

By 0800 GMT Barclays shares were down 4.6 percent at 364.5 pence. Sainsbury shares were up 3.2 percent at 340.8p, valuing the retailer at 6.3 billion pounds.

Sainsbury declined to comment.

The Qatar Investment Authority was mulling an offer at 420p per Sainsbury share, traders said last week, well below its 2007 proposal of 600p a share.

QIA was founded by the State of Qatar in 2005 to strengthen its economy by diversifying into new asset classes. Subsidiary Qatar Holding is its main vehicle for strategic and direct investments by the state.

($1=.6088 Pound)

(Editing by Hans Peters)

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While optimism among small U.S. businesses perked up slightly in September, owners saw little to celebrate as they planned to cut inventories and trim their workforce, a survey released on Tuesday showed.

The National Federation of Independent Business said its small business index for last month rose 0.2 point to 88.8 and was 7.8 points higher than the survey’s second-lowest reading reached in March.

“The good news is the index didn’t decline,” said William Dunkelberg, chief economist for the group. “The bad news is that improvements were far less than what we hoped for.

“The job generating machine is still in reverse,” said Dunkelberg. “Sales are not picking up, so survival requires continuous attention to costs, and labor costs loom large.”

More firms plan more inventory reductions than plan to invest, and more owners plan to trim their workforce than plan to increase employment, NFIB said.

Credit markets are expected to remain difficult for those wanting to borrow, but with inventory investment and capital spending plans near historic lows, it is clear that loan demand — not the supply of credit — is weak, the trade group said no fax pay day loans.

There is not a lot of optimism about the economy, which is one reason why hiring and spending plans remain depressed, Dunkelberg said.

Only 7 percent think the current period is a good time to expand, the group said.

“Although third-quarter real GDP growth will likely be over 3 percent, the surge hasn’t shown up on Main Street as yet,” Dunkelberg said.

Of the small business owners polled, 32 percent said their biggest problem was a dearth of customers.

(Reporting by Nancy Waitz; Editing by Kenneth Barry)

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