Business and Finance

Stocks appeared set to open higher Tuesday following four straight days of losses. Traders are awaiting remarks by Federal Reserve chairman Ben Bernanke that could indicate whether the Fed will continue its loose-money policies.

In an afternoon speech, Bernanke is expected to discuss the direction its monetary policy will take after the Fed’s $600 billion bond-buying program winds down. The stimulus is due to expire this month, and the Fed has been expected to begin tightening its monetary policy by the end of this year to head off inflation.

But investors have received a barrage of disappointing economic data over the past several weeks, capped Friday by a government report showing employers added far fewer jobs than expected in May. The raft of indicators has suggested that the U.S. economic recovery might be strumbling, and raised the possibility that the Fed will keep interest rates near zero well into next year or even extend its bond-buying program.

Before the opening bell, Dow Jones industrial average futures rose 34 points, or 0.3 percent, to 12,121. Standard & Poor’s 500 index futures rose 5, or 0 payday loan.4 percent, to 1,290. Nasdaq futures rose 5, or 0.2 percent, to 2,279.

Stocks plunged over the last four days as the U.S. economic recovery looked weak and Europe’s debt crisis worsened. The Dow fell 480 points over four days, its biggest four-day loss in over a year, and its longest losing streak since last August. Monday, the S&P 500 closed below 1,300 for the first time since March 23.

Oil prices fell toward $98 a barrel ahead of an OPEC meeting that could result in higher oil production. Rising oil prices have contributed to the recent stock sell-off. Oil has hovered around $100 since March. Later this week, ministers from the 12 countries that comprise the oil cartel OPEC will consider or not to raise oil output levels. Producing more oil would ease the pressure on prices.

On Monday, the Dow fell 61.30 points, or 0.5 percent, to 12,089.96. The S&P 500 dropped 13.99 points, or 1.1 percent, to 1,286.17.The Nasdaq fell 30.22, or 1.1 percent, to 2,702.56.

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Don’t blame speculators for your pain at the pump, says Bill O’Grady. First blame the worldwide thirst for oil. Then blame the Federal Reserve for a cheap-money policy that makes commodities look attractive to investors.

Then blame fear, building quietly around the world, that America may someday stop being the global policeman.

O’Grady spent most of his career as a commodities guy. He followed the price of oil, gold, corn and the like at A.G. Edwards & Son.

He wrote a daily commentary on the energy markets that delved into the politics of the Middle East and drew the admiration of military officers as well as energy traders.

It was an odd place to end up for a fellow who once planned to seek God instead of mammon.

“I’d always considered being a Catholic priest,” O’Grady said. So, out of college, he signed up with the Jesuits, perhaps the most academic and intellectual branch of the priesthood.

The Jesuits have a long apprenticeship program for potential priests, and they sent him to study at for a master’s degree in economics at St. Louis University. Ironically, that helped undo his vocation.

“My first three years in the Jesuits were great. My last two, I was becoming increasingly unhappy,” he said. “I just decided I’d rather be a husband and a father than a Jesuit.”

He also found that Jesuits have a hard time with raw capitalism. “As I studied economics, and I got increasingly comfortable with the freedom that markets provide, I was increasingly at odds with the more leftist view of the world that was common among Catholic religious,” he said.

“They are very uncomfortable with markets. The basis of market economics is self-interest. For Catholics, to build your whole economic system around a human flaw is not what God put us here for,” he added.

O’Grady left before being ordained, and became as a foreign currency analyst at a small brokerage in Clayton, then moved to Mercantile Bank as an international economist, analyzing nations where the bank was lending money.

By the late 1980s, Mercantile and many other banks were losing their shirts on third-world loans, and trying to get rid of them. “We were selling Nicaragua (loans) for a nickel,” he said.

Mercantile wouldn’t need an international economist much longer, so in 1989 he signed up as a commodities analyst at A.G. Edwards, and started studying the energy markets.

That was just before the first Persian Gulf War sent oil prices through the roof. It taught him a lesson: “You can do all the supply and demand analysis you want on the oil market, but if you don’t understand the geopolitics, you’re in trouble,” he said.

So, he studied Arab, Persian and Russian history, and began writing his commentary.

O’Grady spent a couple of years studying the stock markets. After Wachovia Bank bought A.G. Edwards in 2007, he became its chief investment strategist.

He and Mark Keller, Edwards’ head of asset management, left in 2008 to form their own firm, Confluence Investment Management in Webster Groves.

There are three sorts of players in the oil market; oil producers, companies that need the oil, and investors who buy oil contracts hoping to make money on price changes. Our readers are paying almost four bucks a gallon for gas. Is that because of supply and demand, or all those evil speculators driving up the price?

In demand, there are two components. There is consumption, then everything else. Demand also includes expectations of future prices and future supplies.

What we are deeming now as speculation, is really a component of demand that is trying to address expectations of future costs.

Then we’re not at the mercy of folks that don’t really need the oil, but are just playing the game?

We want to blame those guys, saying if they weren’t here the price would be lower. That’s probably not the case.

The Fed has basically been running Fed Funds (a benchmark lending rate) below the rate of inflation since 2000. We’ve had 11 years of pretty easy monetary policy.

So people are saying, “OK, for the next five years I can either own a five-year Treasury earning 1.8 percent, or I can own oil. Oil looks like a better bet.”

In the past decade, when people weren’t comfortable with financial assets, they bought real estate. That didn’t work out so well.

Are we inflating a commodities bubble?

(O’Grady doesn’t think so.) We’re also seeing an historic shift in global growth patterns (with developing nations producing more of the world’s goods). Those countries tend to be much more resource intensive than the developed countries. China takes about three times more energy than we do to create a unit of GDP. If China’s GDP is going to grow to be as large as ours, then that is going to dramatically stretch oil, coal, uranium, natural gas

Fortune Brands says it has reached a deal to sell its Acushnet Co. golf business to a group of Korean investors including athletic company Fila Korea Ltd. for $1.2 billion.

The business includes the Titleist and FootJoy brands.

The deal is a major step in Fortune’s plan to break itself up. It plans to separate its Beam liquor business and its home and security businesses into two companies later this year

The company says Titleist is the top-selling golf ball and a leader in golf clubs, while FootJoy is tops in golf shoes online cash advance.

The group buying the brands is led by Fila Korea and Mirae Asset Private Equity, Korea’s largest private equity firm.

Fortune expects to get $1.1 billion after taxes and expenses when the deal closes this summer.

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The election of a majority Conservative government has generated much speculation about the future of digital policies in Canada. It is hard to project precisely what will happen; given the number of open cabinet positions it is not known whether Industry Minister Tony Clement and Canadian Heritage Minister James Moore will remain in their portfolios or move elsewhere. If they stay the course, the Conservative digital policies are strong in a number of areas.

Concerns over the lack of competitiveness in the Canadian telecom market emerged as a campaign issue and a majority government may pave the way for removing foreign ownership restrictions in the telecom market. The Conservatives have consistently focused on improving the competitive environment, and opening the market is the right place to start to address both Internet access (including consumer frustration over usage-based billing) and wireless services.

Addressing the foreign competition issue will be only a piece of the bigger puzzle, however. The government has yet to set targets for universal broadband access and has been mum about the possibility of a set-aside for new entrants as part of the forthcoming spectrum auction. Answers to those questions may come from the much-anticipated digital economy strategy.

The Conservatives have a chance for some easy digital policy wins. Ending the Election Act rules that resulted in the Twitter ban on election night would receive broad support, as would maintaining their opposition to deeply unpopular proposals such as an iPod tax or new regulation of Internet video providers like Netflix.

On the hot button issue of copyright reform, it appears certain that Canada will pass a bill on the fourth try. The last bill had its flaws

Some day, America’s shrunken job market is going to boom again. When that happens, expect a “tsunami of résumés” hitting HR offices around the country, along with a thunderous pounding of feet as dissatisfied employees head out their employers’ door for good.

So says Dr. Ronald Leopold, vice president of U.S. Business for MetLife.

The insurance firm surveyed 1,400 employees and 1,500 business executives last fall on their work attitudes. The American worker, they found, is ticked off and hoping to bail out.

“This year’s findings reveal a workforce that has grown more dissatisfied and disloyal, to the point where a startling one in three employees hopes to be working elsewhere in the next 12 months,” the study said.

That’s not surprising after three years of recession, layoffs, wage cuts and benefit reductions. Some companies treat employees like light bulbs. Burn them out; throw them away.

“Employees aren’t feeling the love,” says Leopold. Instead, they’re feeling the whip. According to the study, 40 percent of us worked harder last year, while 25 percent felt less secure in their jobs.

“These burnt-out employees are the most likely to say that they hope to be working elsewhere in 2011,” the study said.

For the moment, employers can ignore this. There aren’t many jobs to flee to.

Workers “hold on like little barnacles to the side of the ship when things are bad. As soon as things loosen up, they’ll go,” says Rose Jonas, who bills her Clayton career coaching business as the Job Doctor.

Employers are still concentrating on cutting costs (you and I are costs), and not worrying much about how they’ll retain workers when the boom resumes.

That might be a mistake. “When people leave an organization, the top achievers leave first,” notes David Hults, a Sunset Hills career coach.

Unemployment is coming down

The fate of former strongman Laurent Gbagbo, who turned mortar shells and rockets on his people, will be an indicator of how calls for reconciliation play out in this West African nation blighted by tribal, religious and land rivalries.

Ivory Coast’s new leader _ installed at the cost of thousands of lives _ is calling for reconciliation in the country, but says that cannot come at the price of justice.

President Alassane Ouattara has said impunity for Gbagbo and those who fomented violence is out of the question, a clear challenge to a practice that often reigns in Africa for those who fall from power.

Ouattara wants the 65-year-old Gbagbo to be tried in national and international courts.

At least one other African leader says Gbagbo should be allowed to live peacefully in exile. Another says he should be able to retire to a farm in Ivory Coast.

His supporters say without his release, there cannot be reconciliation.

Gbagbo was arrested April 11 and is now under house arrest in the country’s northern Korhogo town, Ouattara’s stronghold. His wife Simone, who at one point was being investigated by the United Nations for human rights abuses including organizing death squads, is being held separately in the northwest town of Odienne.

The bad blood between Ouattara and Gbagbo goes back decades. Ouattara oversaw Gbagbo’s arrest on charges of inciting violence in 1992, when Ouattara was prime minister and Gbagbo a beleaguered opposition leader. Gbagbo was tried and sentenced to two years in prison but was released after six months.

Gbagbo took power in 2000 in elections boycotted by all other opposition parties, a sore point among Ouattara supporters. An attempted coup in 2002 ballooned into a rebellion that divided the country between a rebel-held north and government-run south. Gbagbo repeatedly delayed promised elections.

Nov. 28 elections were supposed to reunite the nation that once was a symbol of progress and prosperity on the continent.

Though Gbagbo lost, nearly half of the electorate voted for him. Ouattara bagged 54 percent of votes, Gbagbo 46 percent. Refusing to accept his defeat, Gbagbo took a last stand in Abidjan, as former rebel forces swept down from the north in a lightning assault,

Ouattara, very conscious that Gbagbo still enjoys a lot of support in Ivory Coast and not wanting to make a martyr of him, gave orders that he was to be taken alive at all costs.

Senegal warned against impunity last week. Senegal’s Foreign Affairs Minister Madicke Niang told reporters in Ivory Coast: “Being against all forms of impunity, we must find the means, soon, to ensure that such acts never again see the light of day.”

But the nation appears to be selective about who should be punished. For years Senegal has resisted African and other international pressure to try ousted President Hissene Habre, who is accused of thousands of political killings and systematic torture when he ruled Chad, from 1982 to 1990, before fleeing to Senegal.

Botswana’s President Ian Khama said Ivorians should just let Gbagbo retire to a farm, even though he had taken a hard line against the intransigent leader.

Kenyan Prime Minister Raila Odinga, himself the victim of an electoral crisis in which more than 1,000 Kenyans died in a conflict rooted in old tribal and land rivalries, last week suggested that Gbagbo should be allowed to go into exile.

Odinga was widely seen as the victor in December 2007 elections but agreed to form a power-sharing government to halt the bloodshed.

The Kenyan prime minister, who admitted Gbagbo is a friend, acknowledged that he failed in his role as an African Union mediator to convince Gbagbo to step down to save the lives of innocents.

“Mr. Gbagbo had quite a lot of support in the last elections. The situation in the Ivory Coast is fairly complex. You have got this north and south divide, you have got the religious divide and you have also the ethnic divide and all that needs to be resolved,” he said on CNN television network.

“I really don’t want to see a situation where Mr. Gbagbo becomes a hero in trial,” he said.

The death toll caused by Gbagbo’s refusal to step down peacefully will probably never be known. As people began emerging from homes in which they had locked themselves for two weeks and more as the city was besieged, have been seen burning decomposing corpses. Others have collected bodies of family members from overflowing morgues where no records were kept.

Few doubt the man with the most blood on his hands is Gbagbo.

About 30 members of Gbagbo’s Cabinet, party and family are under house arrest and U.N. protection in an unlooted family home in Grand Bassam, the seaside resort near Abidjan that is Simone Gbagbo’s birth place.

The arrested president of Gbagbo’s Ivorian Popular Front party, Pascal Affi N’Guessan, on Saturday sneaked out a news release calling for “the liberation of the president, Laurent Gbagbo, and all the other political prisoners.”

Gbagbo’s rabble-rousing youth minister Charles Ble Goude, who spoke before going into hiding, also warned that “there can be no reconciliation” without Gbagbo.

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German business confidence probably declined for a second month in April after oil prices rose to the highest in 2 1/2 years, damping the global economic outlook and threatening to curb domestic consumer spending.

The Ifo institute’s business climate index, based on a survey of 7,000 executives, will drop to 110.5 from 111.1 in March, according to the median of 38 forecasts in a Bloomberg News survey of economists. The index rose to 111.3 in February, the highest since records for a reunified Germany began in 1991. Ifo releases today’s report at 10 a.m. in Munich.

Oil rose above $112 a barrel this month, the most since September 2008, on political unrest in North Africa and the Middle East. While market researcher GfK AG says rising prices are eroding German consumer confidence, the Bundesbank estimates economic growth accelerated in the first quarter as companies increased spending and hiring to meet export orders from emerging nations such as China.

“It’s the oil price that really hurts,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Other than that, Germany’s economy is booming.”

Ifo’s gauge of the current situation may ease to 115.5 from 115.8, while an index measuring executives’ expectations probably fell to 105.5 from 106.5, the Bloomberg survey shows.

The German government predicts economic growth of 2.6 percent this year after a record 3.6 percent in 2010. Higher oil prices may put a brake on the global recovery and fan inflation as companies pass on higher input costs.

‘Downside Risk’

The threat of further oil-price increases has become a “key downside risk” for global growth, the International Monetary Fund said April 11.

Higher energy costs pushed German inflation to 2.3 percent last month. The European Central Bank, which aims to keep inflation below 2 percent across the 17-nation euro region, this month raised interest rates from a record low. It left the door open for further moves even as a sovereign debt crisis damps growth in peripheral euro-area nations such as Greece, Portugal and Ireland.

“Higher interest rates are not really going to affect German companies,” said Alexander Koch, an economist at UniCredit Group in Munich. “Rates will still be low for Germany and there won’t be any financing difficulties.”

German carmaker Volkswagen AG on April 15 posted record first-quarter sales, powered by deliveries in China, Europe and the U.S. Daimler AG and Bayerische Motoren Werke AG said this month they expect double-digit growth in China this year.

Robert Bosch GmbH, the world’s largest automotive industry supplier, said April 14 that it expects record sales of 50 billion euros ($73 billion) in 2011 and plans to hire 15,000 workers globally.

Germany factory orders and industrial production jumped in February. According to the Bundesbank, Europe’s largest economy may have expanded as much as 1 percent in the first three months of the year and will probably maintain its growth momentum in the current quarter.

“Unless there is a serious drop in the Ifo reading, I wouldn’t see Germany heading for a downturn at all,” said Schmieding.

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Toyota Motor Corp. said Wednesday it will suspend production in Europe for eight days due to parts shortages following last month’s massive earthquake and tsunami in Japan.

The move underscored how the supply crunch in the wake of the March 11 twin disasters is affecting Toyota’s operations beyond Japan. The world’s No. 1 automaker announced last week it would suspend car production in North America in April.

Toyota said it will halt European output at five plants on eight days between April 21 and May 2 _ auto assembly factories in Britain, France and Turkey, and engine plants in Britain and Poland. After the stoppages, the plants will run at limited capacity in May.

The magnitude-9.0 earthquake and ensuing tsunami on March 11 destroyed auto parts factories in northeastern Japan, causing severe shortages for Toyota and other automakers.

Mamoru Kato, an auto analyst from Tokai Tokyo Securities Co. Ltd., said if the supply crunch drags on, Toyota could incur “big losses” in the April-June quarter.

“The company simply cannot manufacture cars due to parts shortages. In North America and Europe, Toyota procures almost all engine parts from Japan. Suspended production in Japan and North America is a big blow to Toyota,” he said.

In Japan, Toyota is currently shutting down output except at three plants, which are running at limited capacity.

Toyota said it suffered a production loss of 260,000 cars in Japan from March 14 to April 8 alone. The disasters also cost production losses of 50,000 cars in Europe and 35,000 cars in North America.

Toyota said it will resume car production at all its plants in Japan at half capacity from April 18 to 27, but production will then stop from April 28 to May 9, a period that includes Golden Week holidays when factories would normally close.

Toyota spokeswoman Shiori Hashimoto said Wednesday it remained unclear when the company would return to full production in Japan. Toyota hasn’t decided production plans for after May 9.

Production in Japan alone accounts for 43 percent of Toyota’s global production last year. In North America, where Toyota produces nearly 20 percent of its total output, the company said it would impose a series of one-day shutdowns at its North American plants from April 15-25.

Amid concern over a prolonged production suspension, Moody’s Investors Service warned last week that it may downgrade its credit rating for Toyota.

The news didn’t rattle shares in Toyota, which were up 0.6 percent to 3,260 yen in early trading on the Nikkei 225.

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Japan’s top government spokesman says Tokyo is willing to accept U.S. help in dealing with the country’s nuclear crisis, and is discussing the matter with Washington.

Top government spokesman Yukio Edano says that “We are coordinating with the U.S. government as to what the U.S. can provide and what people really need.”

He says: “We have repeatedly asked for specific support, and indeed, they are responding to that.”

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

YAMAGATA, Japan (AP) _ Japan’s nuclear safety agency says smoke is rising from a building housing a damaged nuclear reactor at a power plant crippled by last week’s tsunami payday loans guaranteed no fax.

A spokesman for Japan’s nuclear safety agency said the smoke was seen rising from Unit 2 at the Fukushima Dai-ichi plant on Friday morning. The spokesman says the agency does not know the cause, but an explosion occurred in Unit 2 earlier in the week, possibly damaging a chamber next to the reactor core.

Meanwhile, the utility that runs the nuclear plant says workers are laying a cable to restore power to the cooling systems. The military is also preparing to spray more water on the plant by helicopter and fire trucks.

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Rising energy costs will probably provoke concern among Federal Reserve officials this week that consumers and businesses will pull back on spending and slow the U.S. recovery, said economists such as Lou Crandall at Wrightson ICAP LLC.

The more than 9 percent increase in crude oil prices this year may leave consumers with less money to spend on other goods and boost corporate costs, curbing outlays for staff, plants and equipment. To the Fed, the threat of a flagging recovery may appear to be a bigger risk than inflation, Crandall said. Policy makers say achieving self-sustaining growth is vital before they begin to withdraw record monetary stimulus.

“The Fed is going to be worried about a soft patch in the near term,” said Crandall, Wrightson ICAP’s chief economist, who is based in Jersey City, New Jersey. While Fed officials will be prepared to react to inflation, “the high cost of a downside surprise in growth probably trumps everything else.”

The Federal Open Market Committee at the conclusion of a meeting tomorrow will probably affirm its commitment to buy $600 billion in Treasury securities through June, said Roberto Perli, a managing director at International Strategy & Investment Group in Washington. Persistent uncertainty about the staying power of private spending and investment would likely prompt Fed officials to maintain a neutral policy for several months by reinvesting proceeds from maturing bonds rather than letting them run off, said Perli.

Such an approach would keep the central bank’s balance sheet close to its current level. The Fed’s total assets stand at a record $2.58 trillion.

‘Easy Stand’

“Rising oil prices can affect both headline inflation and output growth,” said Perli, formerly an economist at the Fed’s Division of Monetary Affairs. If oil prices stay high, “the Federal Open Market Committee would most likely react by maintaining an easy stand for longer than it would have otherwise unless inflation expectations rise.”

Consumer confidence fell to the lowest level in a month as surging gasoline prices soured Americans’ outlook about their finances and the economy. The Bloomberg Consumer Comfort Index dropped to minus 44.5 in the week to March 6 from the prior week’s minus 39.7.

Consumers this month expected an inflation rate of 4.6 percent over the next 12 months, the highest level since August 2008, compared with 3.4 percent in February, according to a Thomson Reuters/University of Michigan survey.

Still, companies such as Cincinnati-based Kroger Co., the largest U.S. grocery-store chain, may have trouble passing higher costs on to consumers whose income growth is limited.

Food Stamps

“Unemployment is high in most of our markets, and food stamp use continues at its peak,” Kroger’s Chief Executive Officer David Dillon said on a March 3 earnings call. “Rising food prices and fuel prices will affect customer spending behavior.”

The increase in oil prices coincides with other forces inhibiting economic growth, including waning fiscal stimulus and reductions in spending by federal, state and local governments.

Macroeconomic Advisers LLC, the St. Louis forecasting firm, estimates that tighter fiscal policy will subtract nearly 1 percentage point from growth in U Online payday loans.S. gross domestic product in 2012. The economy will expand 3.5 percent from the fourth quarter of 2011 to the fourth quarter of 2012, instead of 4.5 percent, according to the firm’s estimates.

Costlier oil is also prompting downward revisions in the outlook. Economists at New York-based JPMorgan Chase & Co. (JPM) on March 11 cut their first-quarter estimate for annualized growth by a full percentage point, to 2.5 percent, and their second- quarter outlook to 3.5 percent from 4 percent partly because of higher energy costs.

Goldman Sachs Group Inc. (GS) economists say a 20 percent rise in crude oil prices beyond the firm’s forecast of $105 a barrel in the second quarter could shave as much as a 1 percentage point off of the economy’s annual growth rate by late 2011 or early 2012, while raising the rate of core inflation no more than 0.2 percentage points on an annual basis.

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