Big Wall Street firms aren’t the only ones getting hammered by the widening credit crisis. McLean-based Capital One Financial Corp. took a hit yesterday, as the fallout from sub prime mortgages continues to spread.

The company’s stock sunk to a new 52-week low — $38.35 — following reports that full-year earnings for the credit card giant will not meet projections. Capital One expects earnings of $3.97 per share for 2007, rather than $5. The problem, it said, was higher loan losses and costs for legal reserves.

Expect to hear a lot more of the D-word, as in delinquent. In its company statement, Capital One said it plans to set aside $1.9 billion for bad loans in the fourth quarter, including $1.3 billion in uncollectible loan losses. In 2008, it expects charge-offs of $5.9 billion.

The company’s stock opened this morning at $40.42. By mid-day, it stood at $42.86, slightly below yesterday’s close of $42.92 which represented a drop of 43 cents from the previous day. The company’s 52-week high is $83.84, a figure that hasn’t been seen in months. 

Capital One also noted “continued deterioration” in about $700 million worth of home equity lines of credit originated by Greenpoint Mortgage. Capital One acquired Greenpoint in 2006 as part of a deal to buy New-York based North Fork Bancorp Inc. and closed the mortgage unit in August.

If numbers tell the tale, there’s no question more consumers are struggling to pay bills. One can help but worry: where’s all this going to end? 

Before last year’s General Assembly session, it was clear transportation would be the session’s hot-button issue.

This year that title may go to illegal immigration, but a close second could be fixing — or completely unraveling — the $1.1 billion transportation package lawmakers passed last year.

First: abusive driver fees. Gov. Tim Kaine, most Democrats and many Republicans support repealing the unpopular steep fees lawmakers passed last year for serious driving offenses.

This year, legislators have introduced a host of bills that repeal the fees, including some that would refund citizens who already paid the fees.

Then there’s Republican Del. David Albo of Fairfax, sponsor of the bill that created the fees, who wants to salvage them by making them applicable to out-of-state drivers as well.

How will lawmakers make up the $65 million those fees were supposed to bring in each year? Some Senate Democrats have already introduced raising the gas tax — a plan that can be presumed dead when it reaches the House of Delegates.

The new Democratic Senate majority said yesterday that one of its priorities will be increasing money for the transportation maintenance fund.

That fund is critical to the state’s transportation network — although far less sexy than any appeal for new transportation projects.

The fund currently has a $290 million shortfall. By law, transportation money must first go to maintaining current roads before money is used to build new ones. That means the maintenance shortfall robs the state’s construction project money.

The Democrats have not reached agreement on how to raise more transportation money, but the House of Delegates certainly has no appetite for new tax increases.

Then there’s the danger to the transportation authorities created in Northern Virginia and Hampton Roads. These were designed to raise money in the state’s most traffic-clogged regions.

Some lawmakers have introduced bills that would tweak what taxes and fees the authorities can use in the region. Kaine is saying he would support changes, as long as it didn’t reduce the potential amount of revenue that could be raised.

But the future of these fees may be in peril. The Virginia Supreme Court heard arguments Tuesday on the constitutionality of the authorities. Last year’s transportation package could quickly fall apart if the authorities were ripped of their taxing power, leaving the state’s economic engines in gridlock.

Transportation remains the No. 1 issue for Virginia businesses. Last year, the state provided a big boost to the aging network. Let’s hope 2008 isn’t the year it all falls apart.

The sun was just creeping over the horizon Thursday when a group of executives got down to business on the 21st floor of a Richmond office building.
The Executive Exchange, a business networking group, meets for breakfast every week at the Bull & Bear Club atop the James Center complex. At 7 a.m., the windows surrounding the dining room offered a dazzling view of rapids of the James River below. But the dozen men seated around the table were focused on referrals, not the view.
At 7:15 a.m. sharp, they passed their business cards and began a series of one-minute speeches describing their businesses. The group included representatives from an insurance agency, an advertising firm, a commercial real estate company, a financial consulting group and a CPA firm.
Later, one member of the group, the insurance agent, gave a longer talk about risk management and described the target customer he is seeking. The other members around the table took notes.
In networking groups like this, the members serve as eyes and ears for each other. They watch for opportunities where the needs of someone they know match the services of a club member. Sometimes they work together to offer a package of services to a single client.
In a time of instant, global communication, groups like the Executive Exchange demonstrate the continued value of face-to face encounters and the power of the personal touch. The Richmond group, in fact, bans the use of cell phones during meetings. The president was fined Thursday when his went off by accident.

Countries can’t lead in a global economy without highly trained workers. That’s why states are hustling to get more students signed on for courses in science, engineering, technology and mathematics. In Virginia, six new academies — in the cities of Suffolk and Newport News and Arlington and Halifax, Russell and Stafford counties — will provide this instruction at the high-school and post-secondary levels. They are being developed through a partnership among public schools, colleges and universities, employers, businesses and the state.

Partnership is the key word here. States can’t do it alone. Many face budget shortfalls caused by drops in tax revenue as a result of the housing slump. Funding for what will be known in Virginia as the Governor’s Career and Technical Academies comes from a $500,000 grant from the National Governors Association Center for Best Practices. It receives support from the Bill & Melinda Gates Foundation and Intel Corp. 

Virginia was one of six states to get a grant. The money will be matched with support from federal Workforce Investment Act funds. Meanwhile, in high-tech California, Gov. Arnold Schwarzenegger wants to attract 20,000 new engineers over the next decade by taking a similar approach. He supports the use of $1 million in federal workforce funds to develop apprentice programs between community colleges and private industry.

Virginia Business will report on Virginia’s workforce development program in its March issue. For stories on the country’s growing shortage of engineers and what Virginia is doing about it, go here.

On your mark, get set, go! The 2008 General Assembly opened today with a new majority in the Senate. For the first time in more than a decade, the Democrats are in control. What that means for business will unfold over the next 60-day session. But the Dems need to do some handholding with the Republican-dominated House if they want to move forward on issues.

Those significant to the business community include everything from a budget shortfall of $618 million to bills that would affect transportation, illegal immigration and health insurance reform. 

In terms of composition, the official count for this year’s House of Delegates is 53 Republicans, 44 Democrats and two independents. One unfilled seat will be decided in an election next month. The Democrats have a narrow lead in the Senate, with 21 seats compared to 19 Republican seats. Then there’s Democratic Gov. Timothy M. Kaine, intent on making his mark midway through his term.

We hope you will visit our new General Assembly blog regularly. And if you want to weigh in on an issue with a legislator, the Capitol is offering a toll free constituent viewpoint hotline at 1-800-889-0229.

Starting tomorrow, the line will be answered by operators from Jan. 9 thorough March 7, from 8:30 a.m. to 5 p.m. They will record the caller’s message and forward the information to the appropriate legislator. While operators can’t transfer calls, they can provide constituents with legislators’ phone number. Who says customer service is dead?