Business and Finance

Japan’s central bank said Tuesday it expects the economy to shrink slightly during the fiscal year ending in March instead of expanding as it forecast earlier because of the overseas slowdown.

The Bank of Japan kept its key interest rate the same at close to zero percent but downgraded its growth forecast for the year ending March 2012 to a 0.4 percent contraction from the 0.3 percent expansion it gave in October.

The bank stuck to its projection for a moderate recovery starting the first half of the next fiscal year.

But it lowered its projection for fiscal 2012 to 2.0 percent growth from 2.2 percent growth No teletrack payday loans. It was more upbeat about fiscal 2013, raising that to a 1.6 percent expansion from 1.5 percent.

The bank said the massive debt problems in Europe as well as uncertainty about the U.S. economy are risks for Japan’s outlook.

The strong yen, which erodes the value of exports from the world’s third largest economy, also dragged down growth, keeping economic activity “more or less flat,” it said.

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Robin Ebersohl knew she had a loud muffler. She couldn’t afford to get it fixed. When she saw a police car, she thought she’d chance it and drive by.

It was a mistake bigger than she could have imagined.

She thought she might get a ticket. Instead, she got three days in jail and her father lost $500 in bail money.

Ebersohl, of Livingston in Madison County, wasn’t accused of a crime. She was arrested on a court order issued at the behest of a creditor trying to collect less than $1,000 she owned in medical bills.

Ebersohl, 51, was trapped in the 21st century version of debtor’s prison.

“It was awful. You get deloused. They do this in front of the guard. It was very embarrassing. It was very degrading,” she said. “I’d never been arrested before, never been in any kind of trouble.”

The term “debtors prison” summons up images of Dickensian England and Colonial America. As a formal matter, most states did away with debtors prisons in the early 1800s, along with the whipping post.

But lots of people still go to jail over unpaid debts in America - including Missouri and Illinois. Here’s how it happens:

A creditor goes to court and gets a judgment for an unpaid debt. The debtor is then summoned to court to be questioned by the creditor, who wants to know about assets that could be seized. It’s called a “pay or appear” hearing in Illinois.

If the debtor doesn’t show up, the creditor asks the judge for an arrest order. In Illinois, that’s called a “body attachment.”

Creditors and their lawyers say it’s necessary tool to make sure that debtors obey the courts.

“If we can’t enforce our contracts, and use the law to do that, what will we become?” asked William Asa, a creditors attorney in Metro East.

Consumer advocates say its used unfairly to squeeze money out of jailed defendants and coerce others with the threat of imprisonment.

Police generally don’t go hunting for debtors. But if they’re stopped for a traffic violation or some other reason, the warrant shows up on computer records and off to jail the debtor goes.

Creditors like body attachments because they make money on them, as Ebersohl can testify. She sat in jail until her father’s pension check arrived, and he paid her $500 bail.

Then the court released the bail to her creditor, the Credit Bureau of Macoupin County. Her father was out the money.

“It’s considered the property of the defendant,” says Brent Cain, who represented the Credit Bureau. After all, the Credit Bureau had a judgement against Ebersohl and thus could take her property.

That’s common practice, says Beverly Yang, attorney at Land of Lincoln Legal Assistance, which provides free legal representation for the poor.

“This process is THE method of collection,” she said.

Arrests of debtors are common today in Southern Illinois, according to Yang. She said Madison County courts issued 65 such arrest orders from April to December of last year. Ebersohl’s arrest was in October 2007 on an order issued in Macoupin County.

Missouri courts are issuing arrest orders for debtors, too, said Rob Swearingen, attorney for Legal Services of Eastern Missouri. So-called “capias” warrents are issued “over and over again” in St business cards. Louis city, he said, although he said he is just beginning to study the issue and doesn’t know how common it is in the state.

The idea of jailing debtors is drawing criticism in Illinois. The state Department of Financial and Professional Regulation is holding hearings on the practice around the state, including one last Monday in Alton.

The department, which regulates lenders, revoked the license of a Easy Money Express, a Carbondale loan company in 2010 for obtaining arrest orders for debtors. The lender got its license back after agreeing to stop the practice.

Yang complains that defendants often don’t know they’ve been summoned to court until they are thrown in jail. Notices of “appear or pay” hearing come by regular mail, she said If the debtor has moved, or didn’t see the letter, they don’t know to appear.

That’s what Ebersohl says happened to her.

Ebersohl was truck driver in 2002, when she came down with cancer. She conquered that, but the ordeal aggravated her diabetes, and she could no longer drive a truck.

She lost her health insurance, along with her job, but her medical bills kept piling up. Eventually, she qualified for disability benefits.

Her creditors sued, got a judgment against her, and began summoning her to “pay or appear” hearings every few months. That’s also a common practice, says Yang, who considers it harassment.

Ebersohl says she went to court every time she got a notice. But says she was never knew about the hearing that caused her arrest. “If I’d got the notice, I would have went,” she said.

Sharon, who identified herself as manager at the Credit Bureau of Macoupin County, declined comment on Ebersohl’s particular case. But she said the agency takes a slow, phased approach to collections.

Before filing suit, the collection agency spends three months trying through letters and phone calls to persuade a debtor to pay, always politely, she said.

“Sometimes people get pretty violent. I’ve been threatened a few times, even today,” said Sharon, who declined to give her last name. “We try to be really nice.”

The agency files suit only if the debtor is making no effort to pay or stay in contact.

“A warrant is issued only when they are in contempt of court - when they refuse to show up or follow the judge’s order,” she said.

Rather than by mail, all their legal papers are delivered by off-duty policemen, she said.

Swearingen says his debtor clients in Missouri often never learn they’ve been sued until after they’re facing a wage garnishment. Missouri law doesn’t allow legal papers to be served by mail in most cases. But it does allow service to someone at the same address. Especially if the defendant has moved, he may never see the papers.

Yang is pressing for changes in Illinois forbidding serving papers by mail, or by summoning people to “pay or appear” hearings over and over again. In some counties, debtors must appear every month, she says. One hearing should be enough.

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Federal regulators are blocking Duke Energy’s planned acquisition of Progress Energy to form the country’s largest electric company, ruling the companies haven’t done enough to protect competition in their North Carolina and South Carolina home markets.

The Federal Energy Regulatory Commission had scheduled a Thursday hearing on changes to the merger plans in Washington, but regulators surprised the utilities late Wednesday by rejecting the companies’ solution to protect competition.

The FERC action is likely to delay the merger’s year-end target for completion and could require changes that the companies find unattractive.

A Duke spokesman said the company was reviewing the order. He wouldn’t comment about how it affects Duke’s commitment to the deal.

Jefferies & Co. analyst Paul Fremont said the companies’ next move will be to take a serious look at their power plants and decide which can be sold. Any proposed sale must be reviewed by state regulators, who would need guarantees that it wouldn’t affect pre-negotiated power rates for utility customers.

The order will delay the deal by about three months, at least, he said. The companies also may walk away from the deal at this point, deciding that the government was demanding too many sacrifices. “It’s too early to say at this point” what will happen, Fremont said.

The federal agency in September questioned the deal’s impact on customers in North and South Carolina. Regulators suggested that the companies consider a number of measures that would diminish their influence, such as selling power plants, building new transmission lines or giving up control of their transmission system to a regional operator. The companies responded last month with a plan to sell excess electricity at a fixed price to wholesale buyers in their Carolinas territories.

Regulators now say the proposal by Charlotte-based Duke and Raleigh-based Progress doesn’t go far enough.

The “mitigation proposal does not remedy the proposed transaction’s adverse effects on competition,” the FERC ruling said.

Duke first announced it planned to buy Progress in January for $13.7 billion. If approved, the combined company will serve 7.1 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky.

Duke shares rose 12 cents to $20.97 in premarket trading Thursday while Progress shares added 6 cents to $54.49.

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Leaders from across Latin America and the Caribbean pledged closer ties to safeguard their economies from the world financial crisis as they formed a new bloc on Saturday including every nation in the hemisphere except the U.S. and Canada.

Several presidents stressed during the two-day summit that they hope to ride out turbulent times by boosting local industries and increasing trade within the region.

“It seems it’s a terminal, structural crisis of capitalism,” Bolivian President Evo Morales said in a speech Saturday. “I feel we’re meeting at a good moment to debate … the great unity of the countries of America, without the United States.”

Venezuelan President Hugo Chavez and some of his closest allies called the new regional bloc a tool for opposing U.S. influence. But other leaders focused more on economic concerns and on working together to confront issues such as drug trafficking and the effects of climate change.

Brazilian President Dilma Rousseff said that if the nations are to keep thriving they will need to look more to their neighbors.

“The economic, financial crisis should be at the center of our concerns,” Rousseff said Friday night. She said Latin America should “realize that to guarantee its current cycle of development despite the international economic turbulence, it means that every politician must be aware that each one needs the others.”

The region has so far weathered the economic woes better than the U.S. or Europe, achieving economic growth of more than 5 percent last year.

Colombian President Juan Manuel Santos said the region has immense potential “in this world that’s going through great uncertainty, where there’s a hurricane that’s hitting the so-called industrialized economies hard.” He said Colombia’s current trade with Brazil, for instance, is minimal and could grow significantly.

Chavez read aloud a letter from Chinese President Hu Jintao congratulating the leaders on forming a new 33-nation regional bloc, the Community of Latin American and Caribbean States. Hu pledged to deepen cooperation with the new group.

The U.S. remains the top trading partner of many countries in the region, with exceptions including Brazil and Chile, where China has become the biggest trading partner. China has also made diplomatic inroads, including by granting about $38 billion in loans to Venezuela in exchange for increasing shipments of oil.

Chilean President Sebastian Pinera touted the region’s opportunities for growth, while Argentine President Cristina Fernandez said building trade among the countries should be a priority.

Bolivia’s Morales took a different focus, strongly criticizing the International Monetary Fund and saying “they’ve just pillaged us and led us to poverty.”

Morales also appealed for strong steps at this month’s climate change conference in South Africa, saying it’s critical that developed nations renew pledges to cut greenhouse gas emissions under the 1997 Kyoto Protocol.

“If they kill the protocol, they kill the planet,” Morales said.

Trinidad and Tobago’s prime minister, Kamla Persad-Bissessar, also expressed concerns about changing weather patterns and said nations should work together to better plan for disasters.

Several leaders called for closer cooperation to fight criminals and drug trafficking.

“Our region is seriously threatened by organized crime,” Guatemalan President Alvaro Colom said.

Colombia’s Santos said the new bloc could help in re-examining whether current counter-drug efforts are the right approach.

Caribbean leaders including Haitian President Michel Martelly thanked Chavez for selling their nations oil on preferential terms, including long-term, low interest loans.

“The people of Haiti love you with all their hearts,” Martelly told Chavez during his speech, saying “south-south cooperation” is key to the future of his impoverished country.

Chavez assured leaders he will survive cancer, reiterating that he underwent recent tests in Cuba after finishing chemotherapy and they found no “malignant cells in any part of my body, thanks to God.”

Trinidad’s prime minister gave Chavez a vial of what she described as holy water, and Chavez thanked her, saying “soon we will have a summit of those of us who’ve beaten cancer.”

Venezuela’s government celebrated the gathering at a Caracas military base with bursts of fireworks that could be heard from the session. Other events included an orchestral performance led by Venezuelan conductor Gustavo Dudamel and a post-summit concert headlined by Puerto Rican hip-hop duo Calle 13.

The leaders planned to formally launch the new bloc known by its Spanish initials CELAC on Saturday by approving the group’s procedural rules as well as a clause dealing with democratic norms and a declaration of shared principles.

Both Chavez and Ecuadorean President Rafael Correa said they hope the bloc eventually overshadows the importance of the Washington-based Organization of American States. Unlike the OAS, the new group will have Cuba as a full member and exclude the U.S. and Canada.

“We need a new inter-American system and, more specifically, a new system to guarantee human rights,” Correa said Friday, referring to the Washington-based Inter-American Commission on Human Rights, which has received complaints from Ecuadorean newspapers and television channels that accuse his government of trying to silence critics.

“All these attacks and threats are made in the name of freedom of expression,” Correa added, accusing powerful media outlets of manipulating public opinion.

Several other presidents said they see CELAC as an important forum to resolve conflicts and build closer ties, but not as an alternative to existing bodies such as the OAS.

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Chicago was shaped in part by commodities exchanges where contracts representing corn, wheat and hogs have changed hands for more than a century.

But two prominent exchanges are threatening to leave the state if Illinois doesn’t change the way it taxes their trading.

State lawmakers are expected to convene Tuesday and to discuss a deal that would appease the CME Group Inc. and CBOE Holdings Inc., while meeting demands made by another Illinois mainstay, Sears.

Those who back the tax breaks say they’ll help keep jobs in a state whose unemployment rate hangs just above 10 percent payday advance lender.

Opponents say the state simply can’t afford to make such deals and question whether the companies would make good on their threats or whether they’re simply exploiting the state’s weak bargaining position.

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Industry analysts and anxious travelers expressed fears Tuesday for the survival of Britain’s venerable tour operator Thomas Cook, after the company, which took more than 22 million people on holidays in the latest year, revealed its financial problems had worsened.

Shares in Europe’s second-largest tour operator lost three-fourths of their already depressed value after the company said it was seeking new agreements with its main creditors, barely a month after announcing it had negotiated new funding arrangements to carry it through the slow winter months.

The company insisted flights would leave as usual and that it was taking new bookings, but Britons who have bought holidays through the firm were worried.

Jamila Juma-Ware, 27, who has booked a holiday at Spain’s Tenerife island in the next three weeks for herself and her mother, said she was “praying it’s going to be all right … but I’m not confident.”

Several small British travel firms have gone under since the global economic crisis hit in 2008, but Thomas Cook is an industry giant and a fixture of Britain’s main streets.

“There are a lot of small independent travel agents around here, but I said I’d rather just book it through someone like Thomas Cook because they’re big and there’s more of a guarantee they won’t go bust,” Juma-Ware said. “And then this week this happens.”

Thomas Cook is, like many airlines and tour operators, suffering from weak consumer demand as Europe’s financial crisis has people worried about their jobs.

Unrest in Egypt and in Tunisia _ normally the top winter destination for French travelers _ flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.

Analysts said the financial troubles could scare away customers, darkening the company’s prospects.

“Legitimate questions will be asked as to whether Thomas Cook can survive long-term,” said James Hollins, analyst at Evolution Securities. He added that he believes the company could pull through on the strength of businesses outside Britain, but “a more flexible financial structure and massive turnaround are required.”

Thomas Cook Group PLC shares were down almost 75 percent at 10.41 pence in afternoon trading in London. On July 1, shares had closed at 134.5 pence.

Thomas Cook was due to report annual earnings for 2010-11 on Thursday, but it has put that off indefinitely “as a result of deterioration of trading in some areas of the business, and of its cash and liquidity position since its year end.”

Sam Weihagen, Thomas Cook’s interim chief executive, insisted it was business as usual: “Flights are leaving on schedule, shops are open and we’re taking bookings.”

Weihagen said people who book package holidays will be protected by the Air Travel Organizers’ Licensing insurance program which is funded by contributions from travel companies. However, those who book only flights are advised to buy their own travel insurance.

The group has previously announced plans to reduce its fleet of 41 aircraft to 35, and it hopes to raise 200 million pounds ($312 million) by selling assets, including its stake in Britain’s part-privatized air traffic control service.

Wyn Ellis, analyst at Numis Securities, said Thomas Cook’s announcement could frighten new customers and alarm suppliers. The company, he said, “faces a difficult near-term future which could lead to significant loss of market share.”

The news of the company’s problems upset some prospective travelers near its shop in the St. James neighborhood of London on Tuesday.

Tony Wright, 64, said he’s had “nothing but good experiences” with the brand and would not hesitate to use Thomas Cook again. “We were devastated to hear the news this morning and we hope it’s not as bad as it sounds,” he said.

Others were disappointed the airfares had not dropped.

On Tuesday, Simon Ash visited the branch hopeful that the combination of the company’s financial woes and a lack of tourist interest in Egypt because of rioting there could help him find a cheap ticket to Cairo _ but he could not find one. “The prices they’re giving me are not as good as the ones I’m finding on the Internet,” he said.

Thomas Cook takes its name from the cabinetmaker Thomas Cook, who had a flash of inspiration while walking to a temperance meeting in 1841 to use the railways to help promote abstinence from alcohol. Cook’s first venture was to charter a train which carried about 500 passengers in open coaches on a 12-mile round trip.

“Thus was struck the keynote of my excursions, and the social idea grew up on me,” Cook later recorded.

He organized more trips for temperance societies and Sunday schools. He took his business a step further in 1845 by arranging a trip to Liverpool, which included a 60-page booklet in the price of the ticket.

The International Exhibition in Paris in 1855 inspired Cook to organize a trip to the continent. Ten years later, he was organizing railway tours in North America.

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Scratch the Timbits the next time you order that double-double. How about a nice slab of lasagna instead?

Tim Hortons announced Monday it

Expect to see more ads flowing through Twitter’s stream of tweets in the coming weeks, but don’t expect to read anything soon about an IPO from the online messaging service.

Twitter CEO Dick Costolo delivered that message in a Thursday meeting with a group of reporters at the company’s San Francisco headquarters.

After bringing in more management talent and upgrading its service so it can handle big spikes in messaging, Twitter is ready to get more serious about building a successful business. But Costolo said that goal shouldn’t be interpreted as a sign that 5-year-old Twitter is poised to pursue an initial public offering of stock _ a move that would require the company to reveal how much money it’s making for the first time.

Twitter doesn’t need the money because it just raised $400 million from venture capitalists and other investors. With such a large financial cushion, Costolo indicated Twitter is unlikely to pursue an IPO next year.

“We now have what can only be referred to as a truckload of money in the bank,” Costolo said. “We did that because we want to be in control of our destiny and grow the company the way we want to.”

The best way to do that, Costolo said, is to show more ads to Twitter’s worldwide audience of 100 million active users. About half of those users log into Twitter each day, a sign that the service is becoming addictive.

Twitter is becoming such rich source of information and entertainment, Costolo said, that roughly 40 million active users log into the service without ever posting a tweet make quick cash. This group of so-called “lurkers” just log in to read what’s going among the people they are following or to search for something. Even with so many users staying silent, Twitter says it processes about 230 million tweets per day, more than doubling its volume since the beginning of the year.

With so many people immersing themselves on Twitter, the company thinks the timing is right for more advertisements.

Twitter began showing ads last year, but limited them to promotions from companies that users had chosen to track. Now Twitters users will gradually start seeing ads from companies they aren’t following. In an effort to avoid alienating its audience, Twitter will strive to show ads likely to appeal to each user’s interests. The company thinks it can do this by analyzing whom users follow. For instance, a person who follows 30 different professional athletes might be more likely to see ads about sports equipment or apparel.

All ads, known as “promoted tweets,” must comply with Twitter’s online messaging service’s 140-character limit.

Twitter is expected to generate about $150 million in ad revenue this year, up from $45 million last year, according to the research firm eMarketer Inc.

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A strong earnings report from CIBC (TSX: CM) helped push the Toronto stock market higher Wednesday while investors largely shrugged off data showing the Canadian economy hit the brakes in the second quarter.

The S&P/TSX composite index gained 83.18 points to 12,717.89 while the TSX Venture Exchange added 7.63 points to 1,810.39.

New York indexes also advanced as investors took in a snapshot of August job creation with the Dow Jones industrial average ahead 43.36 points to 11,603.31.

The Nasdaq composite index shed early gains and was down 2.81 points to 2,573.3 while the S&P 500 index climbed 5.4 points to 1,218.32.

Statistics Canada reported that gross domestic product declined by 0.1 per cent, which followed a 0.9 per cent increase in the January-March period.

The agency said the drop in GDP was largely a result of a 2.1 per cent drop in exports. Real GDP in the second quarter declined 0.4 per cent on an annualized basis after expanding 3.6 per cent in the first quarter.

The Canadian dollar rose 0.03 of a cent to 102.26 cents US as the data also showed that June GDP rose at a better than expected 0.2 per cent, versus the 0.1 per cent gain that economists expected.