A caller who read Orleans Homebuilders Inc.'s debt default warning last week called here and asked if it was still safe to put a deposit on Orleans-built homes, recalling how buyers at an unrelated company, TH Properties, were left stranded by its bankruptcy earlier this year.

I asked Orleans general counsel Lawrence Dugan. He told me, “The buyers’ deposits are in escrow. They’re not with the builders’ accounts. They’re in separate escrow accounts in Pennsylvania, New York and New Jersey," where Orleans has developments. Which is how it's supposed to be. But, caveat emptor.

Orleans said Nov. 5 that it didn't make recent payments totalling $674,000 on $105 milllion in debt, that it doesn't know "when, and if," it will make those payments, and that it's negotiating for an extension of its $375 million credit facility from lenders led by Wachovia Bank. Also, the American Stock Exchange has said it may de-list the stock unless the company files its annual 10-K financial report for the year ending June 30.

 The day before, Orleans said it repaid president Jeffrey P. Orleans $1.1 million last year that he had overpaid for "the personal use of the company's plane." The company says it got rid of its aircraft in May.

Gov. Rendell, D-Pa., talked about the economy, healthcare, Obama and the war in Afghanistan to journalist David Gregory and Gov. Hayley Barbour, R-Miss., on NBCs Meet the Press, Sunday. Excerpts (responses all Rendell except as noted):

Should there be a second stimulus? ...I don't think we need a second stimulus.  I would like to see our transportation infrastructure spending, which is the best job producer... start in January or February of this year.

(Only) 7,000 new jobs in Pennsylvania because of the stimulus, is that enough? ... And plenty of retained jobs that we would have lost.  We have $2.6 billion of federal money in our budget.  Without that money, teachers, policeman, municipal workers, county workers, all would have lost their jobs.

Is the President 'over the hump'... on healthcare reform?  ...This country needs health care reform.  Everybody agrees on that... I think there'll be a compromise on public option.... We're gonna get basic health care, 'cause we need it.  There are people all over this country, who have health care, who are afraid they're gonna lose it.

(Won't) the middle class (resent this reform)? ...Most people in the middle class do have health care.  And the mandate's not gonna affect them.  Small businesses are exempted from any of the mandates... We could pass a health care bill that 80 percent (would support). But it wouldn't increase access for Americans.  It wouldn't solve some of the basic problems of health security.  That has to be done in this country.  And it has to be done now... I'd like to see more cost controls in the bill...

Gov. Barbour: "The American people want Congress focused on jobs.  Instead they see Congress focused on a health care reform bill that's gonna drive up taxes for small businesses, the biggest employers in the country.  National Federation of Independent Businesses... says it'll cost 1.6 million jobs?  No wonder people are mad that (Congress is) out here passing a health care reform bill like this.  When what the public want is job creation."
       
It does say something about the mood in the country, Gov. (Rendell) ...No question there's an anti-incumbent mood in the country.  I'm happy I wasn't running this year. ....  That's natural.  When things are bad, incumbents are held responsible for them... But I am sure of one thing.  A year in politics is light-years.  Light-years.
   
What are the differences between (past Republican) leadership on the economy, and what you're seeing out of President Obama so far?  ...One of the mistakes made first by the Bush Administration and (later) by us is that we should have required those banks to lend out a certain percent of the TARP money that went into them.  (Instead) it was given to them.  And that's the reason we don't have enough credit...
              
The war in Afghanistan... is a major leadership test for the President...  Our troops are tired and worn out.  Pennsylvania National Guard, most of our Guardsman have been to either Iraq (or) Afghanistan.  Over 85,000.  And many of them have gone three or four times.  And they're wasted.  And where are we gonna find these troops?  That what I want somebody to tell me.

»  More Rendell on PA economy, Obamacare, war

Credit card lender Advanta Corp. of Spring House on Sunday filed a voluntary petition for reorganization under Chapter 11 of the US bankruptcy code. The case was filed a federal bankruptcy court in Wilmington, DE: 09-13931, before Judge Kevin Carey.

Advanta said in this statement it has "close to $100 million in cash" on hand, which "over time will not be enough" to pay all it owes, which includes "$138 million of senior retail investment notes outstanding." Bankruptcy "will, among other things, maximize recoveries of the senior retail note holders." Which doesn't mean they'll get all they're owed.

Banks don't go bankrupt - they get taken over by the Federal Deposit Insurance Corp. Advanta's bank unit, Advanta Bank Corp, with $2.7 billion in old loans from 360,000, isn't part of the bankruptcy filing. Instead, it faces a possible FDIC takeover: The company failed to get final FDIC approval for two reorganization plans earlier this year, doesn't have enough capital to meet federal guidelines, and "may be turned over to an FDIC receivership." 

Advanta formerly employed over 1,000 at sites in Pennsylvania, Delaware, New Jersey, California and other states, but shrank to under 200 earlier this year as loan losses mounted and it stopped making new loans. More than 100 U.S. banks have failed so far this year.

For more information, Advanta has set up a toll-free number: 1-800-223-7074 and Web site: www.advantareorg.com.

Advanta President Bill Rosoff tells what went wrong in a court filing here; Advanta lists its debtors, including lender trustee Bank of New York Mellon Corp., plus local and national vendors (including a jet service) of which the largest are owed hundreds of thousands, in its bankruptcy petition here. 

»  More Advanta bankrupt; FDIC may take bank

"Congress’ overhaul of U.S. financial regulations should include ordering banks to hold more capital, ensuring executives’ compensation is aligned with long-term profitability and banning firms that take deposits from also engaging in equities and fixed-income trading," former Citibank ceo John Reed tells Bloomberg reporter Bob Ivry here.

Reed created Citigroup in 1998 when he merged the bank with Travelers Corp., whose ceo, Sandy Weill, outmaneuvered Reed for control of the combined company, got Congress and President Clinton to repeal the Glass-Steagall act and bless Citi's union of subprime home loans and investment banking, followed by losses that forced a multi-billion-dollar taxpayer bailout.

"I'm sorry" about the merger, said Reed. "I would compartmentalize the industry for the same reason you compartmentalize ships,” he added. “If you have a leak, the leak doesn’t spread and sink the whole vessel." Consumer banking, he concluded, should be "separate from trading bonds and equity.” Like under Glass-Steagall.

U.S. unemployment rose to 10.2% in October, up 0.4%, as 190,000 more people lost their jobs (vs. hires.)

"Having the unemployment rate in double digits is a stark reminder of how much work remains to be done," says Obama adviser Christina Romer here. Well, yeah...

Bloomberg says it's the biggest proportion of jobless since the Reagan recession of the early 1980s here.

The government's Troubled Asset Relief Program (TARP) risked $4.5 TRILLION in taxpayer money in the last months of the Bush administration.

Good: "The programs' income will likely exceed their direct expenditures," and "played a major role in calming financial markets," reports the Congressional Oversight Panel, headed by Harvard Prof. Elizabeth Warren and watchdogged by US Rep Jeb Hensarling, R-Texas, today. Statement here.

Bad: Besides exposing the nation to what could have been ruinous losses, the programs "created significant moral hazard that distorts the marketplace," the panel added. Bankers now think they'll be rescued if things get out of control!

Full report here. Partial summary on Page 6:

»  More US risked $4 trillion, and won, but sent bad signals: panel

Pierre Brondeau was cheated of the top job at Rohm & Haas Co. when Dow Chemical bought and began dismantling the Philadelphia specialty chemical maker this year. But the ex-Rohm president and chief operating officer was named CEO today at another global Philadelphia materials maker, FMC Corp. Announcement here.

Shares of CVS Caremark fell 20 percent today after the Rhode Island-based national pharmacy manager said it had lost clients faster than it won new ones in the past year. Among its losses: $2 billion in yearly business from the State of New Jersey, and $500 million from Ohio.

Labor union activists from the Service Employees International Union, which organizes pharmacy and warehouse workers, and the Change to Win union coalition, which includes SEIU, have targeted some of CVS's biggest customers, telling officials in New Jersey andother states the company has been enriching itself at public expense by working closely with state consultants and drugmakers. The company denies the accusations.

Philadelphia, among other communities, opted to stay with CVS Caremark this year despite a union effort to turn City Council against the company.

Bloomberg story about CVS's woes here.

Hess LNG says it's planning a scaled-back verison of the liquified natural gas terminal that BP tried and failed to build at Crown Landing in Logan Township, Gloucester County, creating hundreds of temporary construction jobs but scaring environmentalists in Delaware, which controls access to the site.

"It's a very long-term" plan, said Gordon Shearer, president of Hess LNG, owned by New York-based gasoline distributor Hess Corp. and fuel broker Poten & Partners. "We'll be two to three years in permitting and reassessments, three to four years in construction, and run it for 30 years."

The plan to spend hundreds of millions of dollars on a breakwater, pier, tanks, pumps and pipelines has support from New Jersey politicians eager for what Shearer said were "several hundred construction jobs over three years," and about 30 fulltime and 30 contract jobs longterm. But it's been opposed by state officials and environmentalists in Delaware, where state law limits development in its coastal waters, which extend to the New Jersey shore.

Shearer told me Hess may "scale back" BP's initial plan, which called for up to three ships unloading chilled condensed gas every week.

»  More Hess will try to build South Jersey gas terminal: Update