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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 running numbers on the worst job crisis since the Great Depression have become the new national boxscore.

Even those with cursory interest in the economy are aware the national unemployment rate stood near or past 10 percent nationally for most of 2009.

Still others can reel off the current numbers for Missouri (9.6 percent) and Illinois (11 percent) with the authority of a seasoned economist.

Now, for the first time, policy-makers have a tool to regularly measure the depth of that economic pain at the state and regional level — a quarterly snapshot assessing underemployment and other comprehensive unemployment data on a state-by-state basis.

Since 1994, the Bureau of Labor Statistics has packaged the inclusive national jobs data into its monthly unemployment report. But on a state and local level, such statistics were available only once a year.

A bureau official said the new schedule, two years in development, fills a recession-ravaged public’s need for more information about the state of the economy and job market. And the picture isn’t very pretty.

When the bureau adds workers overqualified for their current positions (underemployed), employees involuntarily subjected to reduced hours and individuals no longer looking for a job to the equation, the national barometer for jobs misery soars to 17 percent.

"It’s not so interesting when the economy is humming along," said Tom Krolik, an analyst with the agency’s local area unemployment statistics division.

The new data provide a steady and reliable estimate of just how deeply the recession has cut into two states in which 773,000

(Illinois) and 137,500 (Missouri) displaced workers are currently drawing unemployment:

— More than 400,000 underemployed in Illinois and nearly 200,000 working below grade level in Missouri.

— Upwards of 350,000 now employed part time involuntarily in Illinois and an additional 153,000 struggling in part-time positions in Missouri.

— At least 30,000 "discouraged workers" (people who have stopped looking for jobs) in Illinois and an additional 10,000 in Missouri.

The state numbers are culled from the same surveys and databases the bureau uses to compile its monthly unemployment statistics.

"The thing that is so discouraging is that we’re not seeing much improvement," said Bonny Filandrinos, president of Staffing Solutions in Clayton, which provides temporary workers to health facilities and other area companies.

Filandrinos says she’s still waiting to see a bounce-back in demand for even temporary or part-time labor. "We’re still in trouble," she said.

Six Flags St. Louis got a glimpse of where the economy still stands earlier this month when 916 temporary 2009 employees attended a party to welcome back temporary workers returning for another season.

By the time Six Flags ends its 2010 recruitment drive — a process that begins with a Feb. 6 job fair — human resources director Colleen Welch estimates about half of the park’s employees will be returnees.

On average, she said, Six Flags sees about 40 percent of its workers return the following season.

Unlike days when the park’s employees swelled in the summer with high school and college students, many of the returnees are older, experienced workers driven to seasonal employment by a bum economy.

Bob Graf, 64, managed to carve out a decent living since abandoning the teaching profession 30 years ago for a second career as a freight broker.

As the middleman that small and mid-sized manufacturers retain to negotiate shipping contracts with trucking firms, Graf considers himself somewhat of an "amateur" economist.

When production slowed and orders started to drop in 2007, Graf figured the economy was going down the tubes.

He figured right.

Last year, the recession hit Graf where it hurts.

With his commissions in the tank, Graf took a second job as a seasonal security guard at Six Flags to help make ends meet. Seeing little improvement in the shipping business, he will be back this summer, supplementing the diminished income from his year-round position.

"I still make money, but it’s not what it was," said Graf, of south St. Louis County.

Still, there are signs of improvement that should eventually show up in the Bureau of Labor Statistics’ expanded database.

Jon Lauer, president of Professional Irrigation Systems in Wentzville, is planning to fill four to six positions lost to layoffs last year.

With commercial and residential construction still in decline, Lauer has changed the focus of his 10-year-old company to the servicing of existing irrigation systems as well as installing some at municipal athletic facilities. The workload, he said, is a far cry from the pre-recession days when 50- to 60-hour weeks were common.

For the past year and into the foreseeable future, he stressed, overtime is out of the question.

"We’re still in the hanging-in-there stage," he said.

As is Rob Huddleston, 41, of Florissant, who has been out of work since losing his welding job in August.

After dipping his toe in a market that seeks to pay experienced welders about two-thirds of what he earned last year, Huddleston decided to accept $5,000 in Workforce Investment Act funding to improve his skills in a retraining program.

The tight job market, he said, "does get discouraging sometimes."

But not so much that Huddleston will show up in the bureau’s category of workers who have put the brakes on the job search.

"I don’t look at giving up as an option," he said. "I know people get discouraged, but if you quit there is nowhere to go but further down."

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The Federal Reserve said the U.S. economy continues to show signs of modest improvement but signaled it will stay the course and keep interest rates low to help spur a recovery.

As expected, the central bank left its key interest rate, the federal funds rate, near 0%, the level it has been at since December 2008. That rate is used as a benchmark for a broad range of business and consumer loans.

In a statement released at the end of its two-day meeting, the Fed pointed to improvement in business spending, but said that the "recovery is likely to be moderate for a time."

While that may not sound like a ringing endorsement of economic growth, it was significantly better than what the Fed had been saying in its statements since last April — "Economic activity is likely to remain weak for a time."

Still, the Fed repeated its earlier forecast that conditions are "likely to warrant exceptionally low levels of the federal funds rate for an extended period."

But one member, Kansas City Fed President Thomas Hoenig, voted against the Fed’s latest action. According to the statement, Hoenig thought that economic conditions had changed enough so that the continued expectation of low rates was "no longer warranted." It was the first dissenting vote among Fed policymakers since January 2009.

The Fed said it will stick with plans to let some of its efforts of the past two years expire in the coming months. But it provided no new details of how or when it plans to start pulling back on nearly $2 trillion it has pumped into the economy over the last two years through the purchases of mortgages, long-term Treasurys and the debt of mortgage finance firms Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

Some critics of the Fed have worried that the central bank is behind the curve in withdrawing that stimulus, which could feed inflation down the road. But the Fed repeated its earlier view that it believes inflation "is likely to be subdued for some time."

Bruce McCain, chief investment strategist at Key Private Bank, said Hoenig’s dissent is probably a good thing since it may assure markets that the Fed is not getting too far behind the curve in keeping prices in check.

Keith Hembre, chief economist at First American Funds, said if the Fed policymakers had followed Hoenig’s lead and dropped the language on keeping rates exceptionally low, it would have roiled financial markets not yet ready for the Fed to start raising rates.

"Hoeing is one of the more hawkish guys on inflation," Hembre said. "But I think the view [of other Fed policymakers] on inflation is on the mark."

Hembre added that due to the weakness in the job market, he thinks it will be years before there is a big enough increase in wages that could help drive the prices of goods and services higher.

Along those lines, the central bank did highlight some key economic weaknesses that remain, including tight credit, continued declines in real estate investment and employers still being reluctant to hire new staff.

McCain said that given the uneven signs of improvement in the housing market so far, it was not realistic to expect the Fed to lay out plans to start selling the $1.25 trillion in mortgages it expects to own by the end of March. Some have even argued the Fed should raise that limit in order to buy more mortgages.

"There is concern about what happens with the housing market when there is no longer the support of the Fed making these purchases," McCain said. He believes the Fed has decided its best course on mortgages is to "steer the middle course," and go ahead with the purchases it has committed to and no further.

The Fed’s latest meeting comes two days before the Commerce Department is expected to report the U.S. economy grew at an annual rate of 4.6% in the fourth quarter. That would be its strongest pace in four years.

The meeting also comes as the Senate prepares for a key vote Thursday that could clear the way towards confirming Fed chairman Ben Bernanke for another four-year term as head of the central bank. His term is set to expire Sunday, and there has been growing opposition from both ends of the political spectrum to his reappointment. 

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Brazilian inflation will quicken above policy makers’ target this year, according to economists surveyed by the central bank.

Consumer prices, as measured by the benchmark IPCA index, will rise 4.6 percent this year, up from a week-earlier forecast of 4.5 percent, according to the median forecast in a Jan. 22 central bank survey published today. The bank targets inflation of 4.5 percent plus or minus 2 percentage points.

Traders expect the central bank to raise interest rates to at least 9 percent, up from a record low 8.75 percent, as early as March to keep inflation in check, according to Bloomberg estimates based on interest rate futures contracts. The benchmark lending rate will be pushed up to 11.25 percent by year-end, according to the central bank survey.

“March would be a good month to start raising rates and to send out a clear message — the central bank is watching inflation and is ready to increase rates as needed,” Carlos Eduardo de Freitas, a former central bank director, said in an interview from Rio de Janeiro guaranteed payday loans.

The annual inflation rate is likely to remain between 4 percent and 4.5 percent if policy makers start acting in March, said Freitas, who is a partner at OF Consultoria Economica, an economic research company in Brasilia.

“Should they wait until the last quarter of the year, consumer prices could rise more than 5 percent this year,” he said.

Economists in the bank’s weekly survey forecast that Latin America’s biggest economy will expand 5.3 percent this year, after contracting 0.26 percent in 2009.

The real gained 0.2 percent to 1.8210 per U.S. dollar at 11:18 a.m. New York time from 1.8247 on Jan. 22.

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Editor’s note: This story is part of a special supplement to the Jan. 22 print edition of the Phoenix Business Journal. For more on the print edition: jbertolino@bizjournals.com.

The battle over noise concerns if the new F-35 fighter training mission comes to Luke Air Force Base has placed Glendale and El Mirage in a public relations and political skirmish.

El Mirage worries the F-35 fighter is louder than the F-16 jets that currently fly into and out of Luke. The West Valley suburb wants noise tests done to see how much louder the F-35 might be, and it could sue the U.S. Defense Department over the matter.

“You can ask questions about noise and still support the base. The jet may be noisier, and if it comes, everyone is going to have to deal with it,” said Stacy Pearson, a spokeswoman for El Mirage.

Glendale, where the base is located, has taken the lead in trying to attract the new F-35 fighter to Luke, which is the U.S. Air Force’s main training base for F-16 pilots. The F-35 is replacing the F-16 in the U.S. military arsenal, and Luke is on the short list for F-35 training along with bases in Florida, New Mexico, Idaho and Tucson.

Glendale spokesman Jerry McCoy said community support for Luke could help draw F-35 operations to the base.

“They’re going to base their decisions on what’s best for the national defense. But they also want to be in a community that’s supportive of them,” said McCoy.

Glendale has been garnering political, business and community support for Luke and the F-35. The main concern is that if the Pentagon picks another base for F-35 training, Luke’s mission could end and base could be closed.

The West Valley suburbs are no strangers to conflict. Glendale prevailed in recent court battles with El Mirage regarding decades-old strip annexations. El Mirage officials have hinted that if Glendale turns over some of that land, it could help ease El Mirage’s worries about Luke noise fast cash advance.

Arizona Sen. John McCain has asked the Department of Defense to have an F-35 fly over the region in an effort to determine how much noise will be generated by the new plane if it ends up being based at Luke.

Pearson and McCoy are not strangers, either. Pearson worked as a spokeswoman for the city of Glendale with McCoy before leaving for a post at Rose & Allyn Public Relations. Last year, El Mirage hired Rose & Allyn, headed by Jason Rose, to handle its PR on the F-35 and Luke. Policy Development Group previously handled PR for El Mirage.

Pearson said Glendale’s reaction to El Mirage’s noise concerns is disappointing.

“It’s been juvenile,” she said. “The two cities have not been the friendliest of neighbors. It is time to bury the hatchet and discuss noise.”

In its quest, El Mirage has drawn comparisons to Valparaiso, Fla., which filed a federal lawsuit regarding F-35 noise at Eglin Air Force Base, near Pensacola. Since Eglin held some F-35 test flights, the Florida town has complained about what it believes is an increase in noise compared with the F-16.

McCoy said the noise concerns in Florida may not mirror those at Luke because of the number of and the differences in how flights take off and land at the two bases. Glendale officials point out that El Mirage does not get all of Luke’s flight noise: Some flights follow a path over Goodyear, south of the base, for takeoff and landing. El Mirage is north of Luke.

McCoy said the F-35 issue is not about a rivalry between the two cities.

“We don’t look at it as Glendale-El Mirage,” McCoy said. “This is really a statewide issue.”

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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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The Sedona Film Festival is raffling off a $50,000 solar system to benefit the annual event.

The festival, now in its 16^th year, will sell 3,000 of the tickets at $20 each or six for $100 in order to raise money for the festival. The system is being donated by the Cottonwood-based Arizona Solar Power payday loan.

The idea to raise money is based on the festival’s new endeavors into sustainable media.

For info: www.sedonafilmfestival.com.

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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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Toyota Motor withdrew from Formula One on Wednesday, leaving Japan without a team in motorsport’s premier series.

Company president Akio Toyoda apologized for the team’s failure to record a single race victory since joining F1 in 2002 despite an estimated annual budget of around $300 million.

“This was a difficult but ultimately unavoidable decision,” he told a news conference in Tokyo. “Since last year with the worsening economic climate, we have been struggling with the question of whether to continue in F1.

“We are pulling out of Formula One completely. I offer my deepest apologies to Toyota’s many fans for not being able to achieve the results we had targeted.”

The decision by the world’s largest carmaker to pull out of Formula One comes as the auto industry starts to stabilize following a sales crunch in the wake of the financial crisis.

Cologne-based Toyota’s departure as a team and engine supplier deals another major blow to the sport after Japan’s number two carmaker Honda quit the series last December.

It leaves Japan without a team in F1 and continues the drain of Japanese companies from motorsport, which has seen Subaru and Suzuki withdraw from the world rallying championship.

LEGAL RAMIFICATIONS?

Bike maker Kawasaki also scrapped its MotoGP team in the grip of a severe market downturn.

Japanese tiremaker Bridgestone announced on Monday they would not renew their supply contract with Formula One after the 2010 season.

In July, Toyota’s Fuji International Speedway circuit surrendered hosting rights for the Japanese Grand Prix in 2010 and beyond to reduce costs amid the global economic downturn.

The pull-out of Japanese companies from F1 began with Honda-backed Super Aguri, who left for financial reasons early last year.

Toyota’s exit leaves just three manufacturers in Formula One — Ferrari (FIAT), Mercedes and Renault.

It also opens the door for BMW-Sauber’s new Swiss owners to take their place as the 13th team on the grid.

Toyota signed the concorde agreement earlier this year committing themselves to F1 until at least 2012, so a pullout could also have legal ramifications. 

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