Business and Finance

Elizabeth Warren doesn’t look or sound scary. She’s a 61-year-old Harvard Law School professor from Oklahoma who has written personal finance books, some with her daughter.

But conservatives and some bankers are trying to kill any chance that Warren - a consistent critic of the financial sector before it was cool to be one - will run the consumer financial protection agency that’s part of the Wall Street reform measure just signed into law by President Obama.

Naysayers, such as Senate Minority Leader Mitch McConnell, R-Ky., say they just don’t trust her - although he doesn’t say why.

"I think there’s a lot of controversy around Elizabeth Warren’s services," McConnell said Tuesday in a media briefing. "It is an extraordinarily powerful position with an incredibly large budget and authority that is constrained by almost nothing. And, therefore, the person that does serve in that capacity is going to have to be trusted by everyone."

Warren, who chairs a congressionally appointed watchdog panel over the federal bailout, is not the only candidate for the job. But she is the one everyone is watching.

Her ideas for a regulator for financial products became the template for the new agency, which is tasked with regulating mortgages and credit cards, as well as making new rules for much of the financial industry and enforcing them at the largest banks.

Before the financial crisis, she was already the authority on mounting credit card debt. And her books about the financial decline of the middle class have been must-reads in the consumer advocacy community for years.

Warren’s nomination would send a strong signal that the White House is willing to stand behind an aggressive regulator who will emphasize consumer needs over bank needs. White House spokesman Robert Gibbs called her "very confirmable" on Monday.

Warren declined to be interviewed, through a spokesman.

While several banking lobbying groups declined to talk about Warren for publication, several academics point to her prolific record warning against banking industry "tricks and traps" to explain why she shouldn’t get the gig.

"Her first presumption is not that the markets work fine, but that the markets don’t work and we need to intervene," said former Republican Senate Banking staffer Mark Calabria of the Cato Institute, a libertarian think tank. "She argues that borrowers are tricked and mislead, and the credit system is predatory."

Conservatives also say they know she will be an aggressive advocate, and that tougher rules under her reign could come at the expense of credit availability and jobs.

"Cracking down on Wall Street means that some people won’t get a loan. There are jobs that won’t be created. Cars that won’t be sold," said Phillip Swagel, a visiting professor at Georgetown University, who was an assistant Treasury secretary during the George W. Bush administration. "Is she able to switch from advocacy to the thinking of the big picture of society?"

But consumer advocates and even some powerful lawmakers say a healthy distrust of the banking sector is what America needs right now after the last few decades, when regulators placed too much trust on banks.

"She’s a tenured Harvard law professor and she has an understanding of how out of balance the responsibilities and obligations are right now between lenders and borrowers," said Tamara Draut, vice president of policy and programs for Demos, left-leaning think tank in New York.

Watchdog panel acrimony

Another fear among those at federal agencies is that Warren would use the consumer regulator job as a bully pulpit to push ideas that go farther than what makes administration officials comfortable.

Warren runs the Congressional Oversight Panel, a congressionally appointed watchdog group of five who are charged with oversight of the 2008 financial crisis bailout.

When Treasury Secretary Timothy Geithner testified before the oversight panel last spring, Warren’s first question was why Treasury wasn’t asking for the same kind of management shake-ups at big banks as they were in the auto industry.

"Do you think the banks are better managed than the auto companies?" she asked.

Generally, most lawmakers like Warren’s tough questions and have praised her work - including Republicans such as Sen. Chuck Grassley, R-Iowa, and Sen. Olympia Snowe, R-Maine, who last year filed a failed amendment to attempt to get the panel subpoena power.

But on a few occasions her enthusiasm has irked fellow panel members, notably those who don’t share her views. Of the five original panel members, only the three appointed by Democrats have stayed put. Three Republicans have stepped down.

And a top complaint penned by those who resigned is that the panel sometimes steps beyond its primary role as a watchdog, especially when it offered "controversial" policy alternatives they believe stretch the panel’s defined mission.

"Good oversight may not always attract the same headlines as controversial policy proposals, but it is valuable; more important, this is the task assigned to the panel," wrote one of those who left, former Sen. John E. Sununu, last August. "The Panel is not, however, a policy-making body."

Rep. Jeb Hensarling, R-Texas, wrote in December that the main reason he was resigning was because the panel "too often focuses upon making policy recommendations to Congress in place of critical and badly needed oversight."

Sununu declined to be interviewed, and Hensarling didn’t return calls in time for publication.

In response, Congressional Oversight Panel spokesman Peter Jackson said that six of the committee’s last seven reports have been approved unanimously. He added that the panel is required, by law, to make policy recommendations.

The two Republicans currently serving on the oversight panel said in a statement that they’ve liked working with Warren. They found her "quite willing to modify her views if presented with well-reasoned cogent arguments," wrote J. Mark McWatters, a tax attorney, and Kenneth Troske, a University of Kentucky economics professor. 

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The U.S. Supreme Court on Monday lifted a 2007 ban on Monsanto Co.’s Roundup Ready alfalfa that was supposed to protect conventional and organic growers from having their crops tainted by cross-pollination.

The court’s 7-1 vote reversed a lower court ruling and makes it possible for the U.S. Department of Agriculture to approve planting of genetically engineered alfalfa seeds on an interim basis until a final decision is made next spring.

Perhaps more importantly, Monday’s ruling may have broader implications for the approval of other biotech crops, including Monsanto’s Roundup Ready sugar beets, which are the subject of another court battle.

"This Supreme Court ruling is important for every American farmer, not just alfalfa growers," David F. Snively, Monsanto senior vice president and general counsel, said in a statement.

"All growers can rely on the expertise of USDA, and trust that future challenges to biotech approvals must now be based on scientific facts, not speculation."

The Center for Food Safety, a Washington-based group opposed to genetically modified crops, said the victory was a hollow one for Monsanto and other backers of genetically engineered crops because the USDA must still complete an environmental impact statement before it can deregulate Roundup Ready alfalfa.

Biotech crop developers favor a more streamlined regulatory process to get products to market without having to wait the several years it takes to complete a more thorough environmental analysis.

"The bottom line for us is that planting is still illegal, as it was," George Kimbrell, a senior staff attorney for the Center for Food Safety, said in an interview. "The Department of Agriculture can take further action that will allow planting, but the court held that it would require an (environmental impact statement), and our right to challenge it has been preserved."

Based on Monday’s ruling, the USDA is now free to allow farmers to plant genetically modified alfalfa seeds with restrictions designed to limit cross-pollination and contamination of conventional alfalfa crops.

The USDA said it was moving forward with plans to complete the regulatory review of Roundup Ready alfalfa in time for the planting season next spring. The agency issued a 1,476-page draft environmental impact statement in December that reported no significant effect from the seeds on the environment or human health.

The alfalfa case represents the Supreme Court’s foray into the debate over genetically engineered crops, which have been available since Monsanto began selling Roundup Ready soybeans in 1996.

Like those first biotech soybeans, Monsanto’s alfalfa is genetically modified to withstand applications of glyphosate, the active ingredient in Roundup weed killer.

While Roundup-resistant crops make it easier for growers to combat weeds because they can spray entire fields without damaging the primary crop, organic and conventional alfalfa growers fear contamination by pollen from the genetically modified plants that can be carried between fields by bees.

Two conventional alfalfa growers and several environmental groups, including the Center for Food Safety, filed a lawsuit in 2006 that challenged the USDA’s decision a year earlier to deregulate biotech alfalfa.

In 2007, a federal district court ordered that USDA’s Animal Plant Health Inspection Service erred by deregulating Roundup Ready alfalfa without preparing an environmental impact study. The court banned distribution of the genetically modified alfalfa but allowed farmers who had already purchased seeds to plant. The 9th U.S. Circuit Court of Appeals upheld the ruling.

Monday’s majority opinion, written by Justice Samuel Alito, said the district court "abused its discretion" by imposing the sweeping ban on biotech alfalfa, and should have allowed the USDA to partially deregulate the crop while the environmental study was ongoing.

Justice John Paul Stevens was the lone dissenter. Justice Stephen Breyer didn’t take part in the decision. His brother is the district court judge who ordered the 2007 ban.

Before the ban took effect, Roundup Ready alfalfa was planted on about 220,000 acres — less than 1 percent of the 23 million acres of alfalfa grown nationwide.

Alfalfa is the fourth-most widely grown U.S. crop behind corn, soybeans and wheat, according to the USDA. It is mainly used for livestock feed, and much of what is grown is exported.

Creve Coeur-based Monsanto, the world’s largest seed company, developed Roundup Ready alfalfa but licenses the technology to Forage Genetics, an alfalfa breeder.

The biotech alfalfa case has been closely watched by the agriculture industry, biotechnology groups and environmentalists because of the potential ripple effect of any decision affecting genetically modified crops. In a brief filed in the Monsanto case, for instance, rice growers contended that contamination of long-grain rice had already cost their industry $1 billion.

Meanwhile, the next legal skirmish over genetically modified crops shifts back to the West Coast next month.

That’s when a federal district court will consider the next steps after ruling last year that the USDA erred by approving Monsanto’s Roundup Ready sugar beets without an environmental impact statement.

In that case, U.S. District Judge Jeffrey White decided not to implement a nationwide injunction similar to the ban on alfalfa. But he didn’t rule out ordering a permanent ban later this year.

—–

Georgina Gustin of the Post-Dispatch contributed to this report.

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Be realistic when you ask borrow money using online payday loans. Do not borrow more than you can afford to pay back, even if they offer you more money.

The government’s unprecedented $700 billion economic bailout will actually cost taxpayers just 16% of that total, according to a Congressional Budget Office report released Wednesday.

The Treasury’s losses on the Troubled Asset Relief Program (TARP) will total $109 billion over the program’s lifetime, CBO latest estimates show. That’s up $10 billion from the agency’s last projection, released in January.

CBO, which is charged with reviewing congressional budgets, has released a series of TARP cost calculations in the 17 months since the bailout began, each time updating its numbers with the latest data. At one point CBO expected the cost to be as high as $356 billion, but faster-than-expected bank repayments and other cost adjustments have drastically reduced the expected price tag.

TARP’s two big moneysuckers are AIG and the auto industry.

AIG got TARP money in two forms: the government bought $40 billion in preferred stock and created a $30 billion line of credit for the company. CBO previously estimated the AIG bailout would cost the government $9 billion, but AIG hasn’t paid the Treasury the quarterly dividends it owes. AIG’s weak financial position prompted CBO to increase its loss projection to $36 billion — more than half of the AIG bailout cost.

Other major losses — a total of $34 billion — will come from TARP assistance to the automotive industry, CBO said. The government committed $85 billion to bailing out the automakers.

On the flip slide, the highly unpopular capital infusion for banks will actually net the government $7 billion, CBO expects — even including a $2 billion loss from CIT Group (CIT, Fortune 500), which declared bankruptcy, and Pacific Coast National Bancorp, which was taken over by the Federal Deposit Insurance Corporation.

CBO isn’t the only agency attempting to tally up TARP’s cost instant payday loan. The latest estimates from the Office of Management and Budget, released in early February, predict TARP will cost $18 billion more than CBO’s estimates. The numbers from the two agencies differ because of different assumptions about the cost of some items and a varied timeframe for some of the data they evaluated.

Foreclosure help forecast

As for President Obama’s mortgage modification program, the CBO estimates that the Treasury Department will use no more than $20 billion of TARP funds, less than half of the $50 billion originally allocated. That’s because the CBO expects many fewer people will participate in the program than the government originally expected, a view held by many housing industry observers.

When Obama announced the program in February 2009, he said up to 4 million people could save their homes through the loan modification program, which lowers eligible borrowers’ monthly payments to no more than 31% of their pre-tax income. But more recently, officials have backtracked and said up to 4 million people could qualify for trial modifications, during which loan servicers assess their borrowers’ eligibility and ability to pay.

Through February, around 170,000 distressed homeowners have received long-term modifications under the program.

Another $1.5 billion in TARP funds will be used to provide grants to state housing agencies in California, Arizona, Nevada, Florida and Michigan. These agencies are tasked with coming up with programs to assist the unemployed, the underwater who owe more than their homes are worth, and the second-lien holders.

CNNMoney.com senior writer Tami Luhby contributed to this report.  

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Longtime East Bay commercial real estate broker Ed Del Beccaro has jumped ship from Colliers International to Grubb & Ellis in Walnut Creek — an office he opened in 1982.

Del Beccaro will take the lead of Grubb & Ellis’ Walnut Creek office, which has 12 brokers. He expects to more than double the broker base by the end of the year.

“I build organizations and that’s what I like to do,” Del Beccaro said. “The goal is is to create a real, local culture that is broker-centric within a national company.”

He started his real estate career in 1977 at Grubb & Ellis in Oakland, where he worked for five years before starting the firm’s operation in Walnut Creek. He left the brokerage to become a developer from 1983 to 1992 and then returned to Grubb & Ellis to revamp its offices in Walnut Creek and Oakland following a major recession. In 1999, he joined Colliers Parrish, the local division of Colliers International, and launched its Walnut Creek office.

Del Beccaro has been involved in some major East Bay deals of late including Legacy Partners’ $174.25 million purchase Ygnacio Center in Walnut Creek in 2008 and Children’s Hospital & Research Center Oakland’s space to open a clinic in Walnut Creek.

“Colliers was very good to me and I very much enjoyed working at Colliers, but in deep recessions, there’s consolidation and things change at companies,” Del Beccaro said.

Market downturns often push many commercial brokerages to go out of business, merge with other firms or reorganize, he said. Another Bay Area brokerage, BT Commercial recently dropped NAI and affiliated with Cassidy Turley guaranteed high risk personal loans.

In his new role with Grubb & Ellis, Del Beccaro plans to add a medical services and multi-family housing groups and boost the retail, office, industrial and investments groups.

“I’ll be looking for good quality brokers to give them the right platform to work from,” he said.

Jack Van Berkel, president of real estate services for Grubb & Ellis, said the firm has positioned itself to take advantage of the turmoil in the industry to expand it’s business. Grubb & Ellis has 130 offices nationwide and is looking to grow significantly in the Bay Area, where it has about 75 brokers.

“Ed is a great hire for us,” he said. “He’s very representative of the type of leadershp we’re looking for. He’s very knowledgeable and aggressive and very respected in the Bay Area.”

Last year, Grubb & Ellis hired Mark Geisreiter to lead its San Francisco office and Dick Scott to head up the San Jose office.

“Ed is not only a very talented individual with an incredible track record,” he said. “He has spent a large portion of his career growing Grubb & Ellis in the East Bay and is the most qualified person to ensure the company’s continued growth.”

Del Beccaro earned a bachelor’s degree from Stanford University and is a member of the International Council of Shopping Centers as well as the Tri-Valley Council.

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Affymetrix Inc. on Monday named Timothy Barabe executive vice president and chief financial officer.

Santa Clara-based Affymetrix (NASDAQ:AFFX) said Barabe will lead the company’s financial functions as well as the treasury, investor relations and information technology departments.

Since 2006, Barabe has held the same role at Human Genome Sciences, and before that he was CFO at Regent Medical Ltd.

For more than 20 years, he held senior executive roles in finance, general management, and strategic planning at Novartis AG.

Barabe replaces John Batty, who worked for three years at Affymetrix.

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Confidence in the world economy dropped in February on concern worsening government finances in some European nations will derail the global recovery, according to a Bloomberg survey of users on six continents.

The Bloomberg Professional Global Confidence Index dropped to 54.9 from 66.6 in January, when the reading was at the highest level since the series began two years ago. The index exceeded 50 for a seventh month, which means there were more optimists than pessimists. The survey was conducted last week, before Germany and other European Union nations signaled they may help support Greece’s government finances.

Greece, Spain and Portugal are among European nations struggling to control widening budget deficits, prompting investors to dump the countries’ assets and question the sustainability of the recovery in the global economy. More than $4.5 trillion has been wiped from stocks worldwide since Jan. 14, while credit-default swaps have risen as investors seek protection against deteriorating European government finances.

“The situation in Greece and other European economies shows us that the global deleveraging process is not over and governments cannot continue the pace of stimulus they’ve been undertaking,” said Venkatraman Anantha-Nageswaran, global chief investment officer at Julius Baer & Co., which manages about $142 billion in assets. “We see global confidence fluctuating from month to month as growth disappoints.”

Group of Seven

The survey of 2,486 Bloomberg users was done between Feb. 1 and Feb. 5. Since the previous survey, China unexpectedly raised reserve requirement ratios for lenders, the Group of Seven finance ministers pledged to continue economic stimulus measures and a report showed the U.S. economy expanded at the fastest pace in six years last quarter.

“People aren’t concerned about the exit strategies from countries, they’re concerned about the total debt level,” said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York who participated in this month’s survey. “The global economy is a little bit more unsteady than it was a month ago.”

The fallout from the budget crisis in Greece has led investors to become the most bullish on the U.S. dollar since November 2008. The dollar confidence index rose to 55.7 from 53.1 in January. Most survey respondents in Europe turned more pessimistic on the outlook for the euro, expecting it to weaken against its U.S. counterpart over the next six months.

‘Downside Risk’

“If people start worrying about a big developed economy as they did Greece, that could start to affect the global growth outlook,” said Nick Kounis, chief European economist at Fortis Bank Nederland NV in Amsterdam, and a regular survey participant ay day loans. “Credit concerns have remained well-contained for the big countries. That suggests so far the global economic outlook is not seriously affected by this, although there are big problems about public finances and it remains a downside risk.”

The confidence gauge for Western Europe fell to 49.8 from 55.5 last month, dropping below 50 for the first time since November. Greek Finance Minister George Papaconstantinou has struggled to convince investors that the government can push its deficit below the European Union’s ceiling of 3 percent of gross domestic product.

Germany is considering assistance for Greece after the country’s deficit threatened the stability of financial markets, two lawmakers from Chancellor Angela Merkel’s governing coalition said Feb. 9. The European Union is scheduled to hold a summit in Brussels today.

Greek Tragedy

“The officials need to give a clear indication that it’s not just about fire-fighting Greece but also putting forward a wider European bailout mechanism that is applicable to other countries that get into trouble,” said Fortis’s Kounis. “That could stem the confidence crisis and boost credibility.”

A measure of U.S. participants’ confidence in the economy fell to 41.3 this month from 54.4 in January. More Americans unexpectedly filed first-time claims for unemployment insurance even as the jobless rate dropped in January, while Federal Reserve policy makers are attempting to gauge whether the economy is strong enough for them to withdraw unprecedented stimulus.

“It’s a jobless recovery,” said Jonathan Basile, an economist at Credit Suisse Group AG in New York and a regular survey participant. “The U.S. economy is still going to expand, it’s just not going to expand as quickly as the fourth quarter. We’re a long way from acceptable levels of unemployment” of about 5 percent that the Fed is comfortable with, he said.

Asia’s index fell to 70.8 in February from 79.8, while the confidence gauge for Japan dropped to 40.6 from 44.1. Japan’s government must heed the warning on soaring debt loads stemming from the turmoil in Greece and concerns about the credit quality of some European countries shouldn’t be regarded as “a burning house on the other side of the river,” Bank of Japan board member Seiji Nakamura said Feb. 4.

Most Bloomberg users were less optimistic on the outlook for their equity markets in the next six months, with respondents in the U.S., the U.K. and Spain turning bearish. Survey participants in the U.S. and Europe remained confident short-term interest rates will rise in the next six months, the survey showed.

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Manufacturing expanded in January at the fastest pace since August 2004, indicating production gains that are spearheading the U.S. recovery may soon encourage companies to hire.

The Institute for Supply Management’s factory index rose to 58.4, exceeding the highest estimate in a Bloomberg News survey of economists, from December’s 54.9, figures from the Tempe, Arizona-based group showed. Readings greater than 50 signal expansion. A measure of factory employment rose to the highest level in almost four years.

“Manufacturing is growing, it’s going to continue to expand,” said Hugh Johnson, who manages more than $1.6 billion as chairman of Albany, New York-based Johnson Illington. His forecast of 58 was the highest in the Bloomberg survey. “Whether or not this continues to unfold will depend very heavily on final demand.”

Stocks rose after the report showed increased production may be laying the groundwork for the spending gains necessary for the expansion to be sustained. The strength in U.S. manufacturing is being accompanied by factory expansion from China to Europe, separate data also showed.

Another report today showed personal spending rose 0.2 percent in December, the third straight gain, according to the Commerce Department in Washington.

Incomes climbed 0.4 percent, exceeding expectations and propelled in part by government payments, the report said. Wages and salaries rose 0.1 percent after a 0.4 percent gain in November, showing job growth is needed to help drive consumer spending in coming months.

Employment Forecast

Employers last month may have added jobs for the second time in the last two years, according to the median estimate of economists surveyed by Bloomberg News. The Labor Department will report the figures on Feb. 5.

President Barack Obama’s $3.8 trillion fiscal 2011 budget, released today, puts an emphasis on job creation with $100 billion in additional stimulus spending, along with higher taxes for the wealthy in an attempt to narrow the deficit.

The factory index exceeded economists’ median forecast of 55.5, according to 67 projections in a Bloomberg survey. Estimates ranged from 53.5 to 58. Manufacturing accounts for about 12 percent of the economy.

The Standard & Poor’s 500 Index gained 0.9 percent to 1,082.96 at 12:12 p.m. in New York. The yield on the 10-year Treasury note rose basis points to 3.65 percent, according to BGCantor Market Data. A basis point is 0.01 percentage point.

European Manufacturing

The pace of global manufacturing is picking up in response to faster economic growth.

A manufacturing gauge for China climbed to a record in January as exports jumped, according to figures from HSBC Holdings Plc and Markit Economics. Growth in the 16-nation euro region’s manufacturing industry accelerated more than estimated in January, according to a separate report from London-based Markit Economics.

The U.S. ISM’s production index rose to 66.2 from 59.7 and the new orders index increased to 65.9, the highest since December 2004, from 64.8.

Manufacturers such as General Electric Co. are beginning to hire and factories are stepping up production after a record reduction in inventories in 2009. The employment index rose to 53.3 in January, the highest since April 2006, from 50.2 a month earlier.

“Manufacturers are now willing to hire,” Norbert Ore, chairman of the ISM survey, said in a conference call from Atlanta. “The more I look at the data, the more this looks like a typical recovery, that is, that we see very strong growth in the front end of it.”

Unfilled Orders

The report also showed more manufacturers reported increased exports and more said they were paying higher prices for raw materials. It took longer for customers to receive their goods, a sign of stronger demand, while orders waiting to be filled also increased. Inventories were being drawn down at a slower pace.

Factories benefited from increased orders after companies pared inventories last year by a record $125 billion.

Corporate spending on new equipment is also beginning to pick up. Texas Instruments Inc., the second-largest U.S. chipmaker, said it will spend almost $1 billion this year to expand three factories and open a fourth to fill orders.

Federal Reserve officials, who left the benchmark lending rate unchanged in a range between zero and 0.25 percent on Jan. 27, noted in their policy statement that “business spending on equipment and software appears to be picking up.”

GE Hiring

GE, whose power-plant equipment generates one-third of the world’s electricity, is hiring workers in energy, health care and rail transportation. It’s bidding to supply new passenger locomotives for Amtrak and in November announced a joint venture in China that would make high-speed rail locomotives that may add 200 U.S. jobs.

“We will create jobs in the United States that could not have been created any other way,” John Rice, chief executive officer of GE Technology Infrastructure, said of the rail programs in a Jan. 28 Bloomberg Television interview.

Construction spending declined in December more than anticipated, capping the worst year on record for the industry, separate Commerce Department figures showed. Outlays dropped 1.2 percent last month as homebuilding and commercial construction dropped.

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Struggling to pay your FHA mortgage? Now you no longer have to be late with your payments to get help.

On Friday, the Federal Housing Administration announced that it will assist borrowers before they become delinquent. All you need do is prove your problems were caused by a reduction of income from a job loss, fewer paid hours, slashed wages or a decline in self-employed business earnings.

You may also qualify because of a change in household circumstances, such as a death or disability.

"The FHA has always required lenders to establish early contact with delinquent borrowers to discuss the reason for missing a payment and to evaluate reinstatement options," FHA Commissioner David Stevens said in a prepared statement. "Now servicers will have additional options for those borrowers who seek help before they go delinquent, which increases the likelihood that the borrower will be able to retain their home no fax payday loan."

The workouts available include forbearance, in which lenders agree to postpone or reduce payments for a specified period. This does not actually forgive the payments, they are just added to balance later in the mortgage term.

In more severe cases, borrowers may qualify for permanent payment reductions. This may be done by increasing the length of the loan, reducing the interest rate or even forgiving principal — or a combination of any of the three. 

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Early reports from stores on the holiday shopping season looked good. But it turns out retail sales actually fell in December, leaving economists scratching their heads about the state of the recovery.

Sales dropped 0.3 percent from November, mostly because people spent less on cars and appliances, the government said Thursday. For the year, sales fell 6.2 percent. Economists said the monthly decline could just be a blip and suggested looking at the past two months together, which would show spending rising modestly. But with unemployment high and credit tight, the report shows the recovery remains tentative.

"I wasn’t expecting this. It’s a bit of a puzzle," said Scott Hoyt, senior director of consumer economics at Moody’s Economy.com. "Consumer spending is growing very weakly, but the key thing is that it’s growing."

Retail sales have now fallen two years in a row. The decline in 2008 was much smaller, 0.5 percent. They are the only two years sales have fallen since the government started keeping records in 1992 bad credit unsecured personal loans.

For December, there was a 0.8 percent decline in auto sales, even as automakers report higher sales. That could be because fewer luxury cars were sold and automakers offered more incentives, said Jeff Schuster, executive director of automotive forecasting for J.D. Power.

The next few months still look scary for retailers. Stores are finding shoppers have little reason to buy now that the holidays have passed. January sales are off to a weaker-than-expected start, according to the International Council of Shopping Centers.

People "don’t see the best in front of them," said Eric Bender, retail analyst at Brean Murray, Carret & Co. "There is a tremendous amount of uncertainty."

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NEW YORK – General Motors Co. said Friday it will shut down Saab after talks to sell the brand to a Dutch carmaker collapsed, marking the third time this year that a deal by GM to sell an unwanted brand has fallen through.

GM said it had a small window of time to complete the deal and issues arose during the sale talks with Spyker Cars that could not be resolved. GM Vice President John Smith said representatives from GM, Spyker and the Swedish government were still in discussions Friday morning when talks fell apart. Smith declined to elaborate on the reasons.

"We've been trying to restart, if you will, an investment process without a great deal of time," Smith, who is in charge of GM's corporate planning and alliances, said during a conference call with reporters. "Like everybody, we would have preferred a different outcome, and we all worked very hard for that different outcome and we've come up short.''

Saab employs about 3,400 people worldwide, most of whom work at its main plant in Trollhatten, Sweden. It also has a parts distribution center and a design center in separate locations in Sweden and an engine plant in Finland.

The brand has 1,100 dealers, whom GM said will continue to honor warranties as the brand winds down.

"It's devastating. It was a very unique brand," said Ray Ciccolo, owner of two Saab dealerships in the Boston area, one of which has been in business since 1957.

The announcement marks the death of brand with a small yet loyal following. To enthusiasts, the Swedish company became appreciated for quirks like placing the ignition lock between the front seats rather than on the steering column. It was the first to offer heated seating in 1971.

GM bought a 50 percent stake and management control of Saab for $600 million after Saab split from Swedish truck maker Scania in 1989. It bought full ownership in 2000 for $125 million. But even after the GM takeover, Saab remained closely associated with Sweden and its history of making safe, reliable cars.

GM never made money on the acquisition and industry analysts complained that under GM, Saab lost its uniqueness in the crowded luxury segment.

GM first sought a buyer for Saab in January as part of its restructuring, which included plans to cut the number of its brands to four from eight. It was previously in talks to sell Saab to a consortium led by the Swedish sports car maker Koenigsegg Group AB, but it turned to Spyker after Koenigsegg withdrew from the talks in November.

GM's Smith said it is possible other buyers could emerge, adding that the brand still has vehicles in development "that might be attractive to some folks." But no such buyers have stepped forward and the liquidation of the brand will begin in early January.

"I can't rule it out, but I guess the clock starts now … on those kinds of expressions of interest," Smith said. He declined to say how much it might cost to wind down the brand.

On Monday, China's Beijing Automotive Industry Holdings – originally part of the Koenigsegg consortium – announced it had agreed to buy some powertrain technology from Saab personal loans for bad credit. It gave no details of costs or timing of that purchase.

On Friday, Beijing Autos said it wants to explore further cooperation with GM's Saab Automobile such as "new energy vehicles." However, Smith said the company has not shown any interest in buying the rest of the brand.

The Swedish government called the decision "surprising and regretful.''

"It's GM who took this decision, on their own grounds, and they have to answer to that by themselves," Enterprise Minister Maud Olofsson said at a news conference in Trollhattan.

Representatives of the Swedish industrial workers' union, IF Metall, declined to comment on GM's announcement. Hakan Johansson, a Saab worker at the Trollhattan plant, told broadcaster Swedish Radio he was devastated by the news.

"It's not a good Christmas gift," he said.

GM's failure to sell Saab is the third deal to sell an unwanted brand that has fallen through this year.

In September, auto dealership chain owner Roger Penske scrapped plans to buy Saturn after an agreement to get cars from France's Renault fell through. GM is now phasing out Saturn.

GM's board last month ended a deal to sell the European Opel brand to a group led by Canadian auto parts maker Magna International Inc., fearing that Opel was too heavily integrated into GM's global operations and that GM technology would fall into the hands of competitors.

GM will keep and restructure Opel, which unlike Saab, is considered critical to its international vehicle development.

One success has been GM's effort to sell Hummer. The brand is going to Chinese heavy equipment maker Sichuan Tengzhong Heavy Industrial Machinery Corp.

Niche brands like Saab have been especially hard hit by the drop in auto sales as the few customers in the market are looking for more mainstream models, said Rebecca Lindland, auto industry analyst for the consulting firm IHS Global Insight.

Those difficulties make it hard for GM to sell some of its smaller brands as it restructures. GM failed to find a buyer for Saturn earlier this year and backed off plans to sell Opel to a consortium of buyers.

"This is a bad time to sell your house and it is a bad time to sell car companies," Lindland said. "This market is incredibly challenging right now because these are capital intensive purchases.''

Sales of Saab cars reached an all-time high in 2006, when GM sold 133,000 cars globally. Sales slipped to 125,000 in 2007 and fell to 93,000 in 2008.

In the U.S., Saab sold 7,812 cars through November this year, down 61 percent from the same period last year. Most of those sales came from two models, the 9-7X SUV and the 9-3 sports sedan.

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