Starbucks unveiled the high-priced and high-taste Clover brewing systems at several Seattle stores Tuesday and says more will follow, as part of a recent deal that set the coffee community abuzz. The Clover is a complex brewing system that was once the domain of independent coffee makers and hard-core coffee fans. But Starbucks Corp. announced in April that it was acquiring Clover, made by The Coffee Equipment Co., in a deal with undisclosed terms. The deal frustrated some independent coffee store owners because Starbucks said it would no longer sell the $11,000 device to others, thereby cornering the market on one of the ultimate brewing systems for aficionados.
Numbers grow for troubled banks
The number of troubled U.S. banks leaped to the highest level in about five years and bank profits plunged by 86 percent in the second quarter, as bad news in the housing and credit markets continued. Federal Deposit Insurance Corp. data released Tuesday show 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003.
Interest rates likely to rise
Even as they grappled with inflation worries, most Federal Reserve officials at their August meeting didn’t believe the Fed’s key interest rate was too low given the difficult credit conditions straining consumers and businesses alike. Documents, released Tuesday, provided insight into the Fed’s thinking at the Aug. 5 meeting, when central bank policymakers decided to hold its key rate steady at 2 percent for the second straight meeting. But looking ahead, the next direction for rates is probably up, according to the documents.
Southwest Airlines to cut 196 flights
Southwest Airlines Co., which had resisted the kinds of capacity cuts being made by other carriers, will eliminate nearly 200 flights early next year as it struggles with high fuel costs and a weak economy. The move raised doubts about the company’s publicly stated goal of growing modestly in 2009 despite the airline industry’s troubles. Now, Southwest will cut 196 flights while adding only six new ones in its schedule that takes effect Jan. 11. That is nearly 6 percent of the airline’s daily schedule.
Correction
Profits at Lynnwood-based Prime Pacific Bank dropped during the second quarter because of the costs of a new branch in Mill Creek and because it set aside money for the possibility of bad real estate loans. The company has not suffered significant losses from such loans. Prime Pacific reported net income of $535,000 during the quarter compared to $720,000 a year ago. Shareholder equity increased from $11.8 million to $13 million, a 10.2 percent increase. The bank’s assets increased to $177.5 million during the quarter, a 22.8 percent increase from the same period a year ago. A brief story on Tuesday misstated the reason for the declining profits and the amounts of income and shareholder equity.
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