Business and Finance

Europe failed to get the leaders of the world’s wealthiest economies to help out with its debt troubles, but everyone left a G-20 summit Friday relieved that at least they forced the Greek prime minister not to hold the world hostage with a bailout vote.

It took a public berating of Greek Prime Minister George Papandreou, and Greece’s politics are in upheaval as a result, but the shaky bailout plan appears back on track for now.

Investors had been hoping the Group of 20 nations would lend the struggling eurozone a helping hand _ but the G-20 leaders said Europe needs to help itself first. They said the International Monetary Fund could be beefed up to help more, but not for at least three more months.

The debt crisis that rocked the 17-nation currency union for the past two years has reached a new high and now threatens to push the world economy into a second recession.

Despite the political firepower at the summit _ which included the leaders of Europe, China, Russia, Brazil, India and the United States, among others _ meeting was overshadowed by political turmoil in Greece and worries about Italy, which accepted IMF supervision of its reform efforts.

The IMF move was an highly unusual intervention into the affairs of one of the world’s leading economies.

Europe’s own rescue efforts, cobbled together at several crisis meetings last week, left open many important questions, making cash-rich countries like China, Russia or Brazil reluctant to commit more than just words.

“It’s important that the IMF sees its resources reinforced,” Jose Manuel Barroso, the president of the European Commission, told reporters. However, any decisions on how to reinforce the IMF were left until February.

The lack of detail disappointed markets, with stocks, bonds and the euro falling. Italy’s borrowing rates, in particular, hit worrying new highs.

With their own finances already stretched from bailing out Greece, Ireland and Portugal _ and traditional allies like the United States wrestling with their own problems _ eurozone countries were looking to the IMF to use its financial reserves and rescue experience to help prevent the debt crisis from spreading to its larger economies, such as Italy and Spain.

The most likely way the eurozone could still get additional financing is through a special account under the auspices of the IMF, into which individual countries could make payments. Those investments in turn could then be used to boost the currency union’s own bailout fund, the euro440 billion ($606 billion) European Financial Stability Facility.

But German Chancellor Angela Merkel and IMF chief Christine Lagarde both said that at the two-day meeting not a single country made a firm commitment that it would participate payday loans with no fax.

The broader increase of the IMF’s resources, which also remained vague, is designed to help countries around the world, not just the eurozone.

Barroso said several countries had indicated they would provide bilateral loans to the IMF _ which would give it more funds without collecting money from reluctant members like the U.S.

The G-20 final statement also said the IMF should somehow issue more special drawing rights, or SDRs, the fund’s own reserve currency that can be exchanged for cash with central banks around the world. SDRs can just be created and do not require new commitments from IMF member states.

Finance ministers will now have to work out the details of these measures. French President Nicolas Sarkozy said the G-20 would next deal with the topic in February.

The lack of progress on the debt crisis troubled some countries that would be hard hit by another recession in the eurozone.

“Every day that the eurozone crisis continues, every day it isn’t resolved, is a day that has a chilling effect on the rest of the world economy,” said British Prime Minister David Cameron. “We are ready to do our part to help stabilize the world economy. … But you can’t ask the IMF or other countries to substitute for the action that needs to be taken within the eurozone itself.”

The G-20 announcements show how dramatically the powers have shifted within the IMF.

Until two years ago, the IMF _ dominated by the traditional powers in Europe and the U.S. _ mostly applied its painful financial adjustment programs to poor and emerging economies in Asia, Latin America and Africa.

Now, it’s growing powers like China, Brazil and South Africa that have to decide whether helping Europe is a worthy investment.

In an effort to do just that, Italy, the eurozone’s third largest economy with a debt load of 120 percent of gross domestic product, asked the IMF for help monitoring promised budgetary and structural reforms on a quarterly basis.

The country’s borrowing rates have risen sharply this week _ and jumped further on Friday _ on fears that Prime Minister Silvio Berlusconi does not have the political strength to implement the reforms.

Lagarde said the IMF hopes to start checking whether Italian measures promised to the eurozone are actually implemented by the end of November, to target “a lack of credibility.”

Source

Canada

The European Union’s plan to force international airlines to buy permits for their carbon dioxide emissions is in line with international law, Europe’s highest court said in a preliminary opinion Thursday.

Several U.S. and Canada-based airlines and airlines associations had sued the EU for its plan to include them in the emissions trading scheme as of next year. Under that plan, all airlines would have to have emissions permits for flights to and from EU airports. So far only large factories and power plants are part of the scheme.

Among several complaints, the airlines had argued that the EU did not have the jurisdiction to require permits for emissions produced during the entire flight, or even stretches that cross the air space of non-EU countries.

But the ECJ’s Advocate General Juliane Kokott disagreed with their arguments Thursday.

“The inclusion of international aviation in the EU emissions trading scheme is compatible with the provisions and principles of international law invoked,” she said in her opinion to the court. The advocate general’s opinion is not binding for the court but is followed in most cases.

The emissions trading scheme is the EU’s main tool in its fight against climate change. The EU has argued that it planned to include all airlines into its scheme since most other major states and regions do not have a similar system. Forcing only European airlines to buy permits would have put them at a competitive disadvantage compared to their foreign competitors and undermined the effectiveness of the scheme.

“I am glad to see that the Advocate General’s opinion concludes that (the) EU Directive is fully compatible with international law,” the EU’s Commissioner for Climate Action Connie Hedegaard said. “The EU reaffirms its wish to engage constructively with third countries during the implementation of this legislation.”

Source

Venezuelan President Hugo Chavez tossed a softball overhand with gusto Thursday, said his latest medical checks have been stellar and ridiculed rumors that his health might have taken a turn for the worse.

Chavez said he is bouncing back vigorously from chemotherapy and gaining weight more than three months after he had surgery to remove a cancerous tumor from his pelvic region. He declined to say what type of cancer he was diagnosed with.

“You want me to tell you more? What for?” Chavez said when asked about the cancer at a news conference. “Go to the hospital and ask any person who has cancer: … ‘What is it that you have? And what type is it?’ Isn’t there something morbid in that?”

“I had a tumor. Now, what do you want me to tell you? That I take the tumor and explain to you here what type of tumor it was and the causes?” Chavez said. “I’m not going to gratify you. A malignant tumor. What more do you all want? … I had it here, they extracted it.”

Chavez motioned to the area where he said the tumor was removed, indicating a vertical incision on his abdomen crossing his waist line. The president said he saw images of the tumor, which was about the size of a baseball, and he held up a baseball as he described the operation.

He reiterated that all of his medical checks have shown no sign of any resurgence of the cancer.

“My latest tests, all of them, have shown very positive results,” he said.

“Here I am. I’m not in my best shape,” Chavez acknowledged, saying that is to be expected after chemotherapy. But he also said he has been lifting weights and is recovering smoothly.

“I’m my own response. And the life I lead from now on, with the grace of God, will be the response, the new Chavez,” said the president, who is running for re-election in 2012.

Chavez dismissed a report in a U.S. newspaper, El Nuevo Herald of Miami, that cited anonymous sources saying he had been hospitalized and that his condition might be deteriorating. He read aloud portions of the report to journalists outside the doors of the presidential palace.

“They’ve got me on dialysis,” Chavez said with a laugh, denying it.

Chavez had been largely out of sight since returning from Cuba last week after a fourth round of chemotherapy that he has said would be his last.

He said in a telephone call broadcast on television earlier Thursday that he is taking steroids and other medicines as he recovers from the chemotherapy.

He said he is working at “half throttle” while the effects of the treatment pass.

“I’m going to completely get out of this soon,” Chavez said.

The 57-year-old leader said his body has coped well with chemotherapy and assured Venezuelans he will keep them informed.

“I would be the first … to communicate any difficulty in the process. None beyond the normal has come up,” Chavez said.

Chavez has provided regular updates on his condition since he announced in a prerecorded video aired June 30 that he had undergone surgery for cancer. He said later that the surgery to remove the tumor was performed June 20.

The president’s critics have complained that he has kept secret some key details about his illness.

Chavez said he has provided ample information. He reiterated that his tumor had been “encapsulated” when it was removed and it hadn’t affected his colon or organs.

“I had cancer, in a ball that was removed,” Chavez said, holding up the baseball.

Later, he pitched a softball to his foreign minister outside the palace, smiling and throwing his weight behind each toss.

Source

Supporters of President Hugo Chavez shaved their heads in solidarity with their leader’s struggle against cancer on Sunday as hundreds prayed and sang at a televised event.

Barbers shaved off the hair of several men and at least one woman while the crowd swayed to a religious song. Chavez, bald from chemotherapy, smiled, clapped with the music and waved to the crowd.

Those attending included a group of six from the Dominican Republic who shaved their heads outside the Venezuelan Embassy in their country on Friday. Chavez greeted the Dominicans with hugs and stood arm-in-arm with them.

Pro-Chavez lawmaker Robert Serra said in a message on Twitter that “Venezuelan young people and priests cut their hair… in solidarity.”

Young men with close-cropped hair stood in the crowd as shouts of “Hallelujah!” and “Amen!” rose at the end of a song.

Leidy Jimenez, one of the Dominicans, told state television that their decision to shave their heads was “a gesture of love and of strength for the president.”

Chavez blew a kiss to the crowd, and listened as a priest, a minister and others spoke. “Long live Hugo Chavez!,” one Dominican man told the crowd.

Chavez praised the Christian group from the Dominican Republic in a newspaper column Saturday, saying “may God bless you.” The Dominicans arrived in Venezuela on Saturday night to meet with the president.

Chavez also said in his column that tests show his body has been responding well to chemotherapy. He said he was preparing for a “possible” new round of chemotherapy and that all of his hair had fallen out as a result of the treatment.

Chavez returned from his latest round of chemotherapy in Cuba on Aug. 14.

He underwent surgery in Cuba in June that removed a cancerous tumor from his pelvic region. He has not specified where the tumor was located. He has said the chemotherapy aims to ensure no malignant cells reappear.

Source

Stocks in the United States ended higher on Friday as the markets found their bearings, ending one of the most tumultuous weeks on Wall Street in years.

There was little sign of the volatility seen in the previous four days, and stocks wavered within a relatively tight range. But the indexes failed to fully recover from the week’s wild swings.

“We didn’t fall off a cliff,” said Bruce McCain, chief investment strategist of Key Private Bank. “We are in a market that is trying to bottom, after a gut-wrenching slide, and going into a weekend where people can take a look at it.”

The Standard & Poor’s 500-stock index was up 6.17 points, or 0.53 percent, at 1,178.81. It was 1.7 percent lower for the week. The Dow Jones industrial average was up 125.71 points, or 1.13 percent at 11,269.02 and the Nasdaq rose 0.61 percent to 2.507.98.

American stock markets were wildly volatile in the previous four trading sessions, with alternating days of collapsing and then sharply rising prices. There was a 4.4 percent decline on Wednesday and a 4.6 percent climb on Thursday. The mood has swung between speculation about worries over the economy and a renewed financial crisis, and confidence that banks are healthy and corporate profits strong.

“It seems like we have a continuing trend of lighter volume, with successively lower volume in the rise and the fall, which is typical of the market bottoming out,” said McCain.

Analysts and traders said the turmoil was driven by intensifying worries over European sovereign debt; the congressional impasse over the debt ceiling; and revisions to economic data, particularly with respect to gross domestic product, that raised concerns over another recession.

The Standard & Poor’s downgrade of the nation’s credit rating last week also weighed on the markets. But many said the selling was driven by emotion, and that the S&P move had been discounted or paled in comparison to other factors, especially the economy and developments in Europe.

Traders suggested a modest drop in claims for unemployment insurance in the United States and reassurances from French officials that their country’s banks were safe may have helped stocks on Thursday. And on Friday, when trading volume was 4.8 billion shares, investors sifted through new data on the economy, including insights into consumer behavior, a crucial element in trying to gauge the pace of the recovery.

The Commerce Department said retail sales rose 0.5 percent in July. Without the volatile automobile and gas components, sales increased 0.3 percent. The figures included several revisions, but they suggested there was some spending momentum in the second quarter and the beginning of the current quarter, at least.

But another piece of data that is indicative of where the market could swing was a survey by the University of Michigan that showed consumer sentiment dipped in August, registering 54.9 points on its index, which was lower than during the crisis of November 2008.

“Clearly, recent financial market turmoil has weighed heavily on sentiment, which was already under pressure from a dysfunctional political arena and the longer-term issue of an ailing labor market,” said Joshua Shapiro, the chief United States economist for MFR, in a research note.

At times, the VIX or “fear index,” a measure of volatility in the market, declined to its lowest point this week. The VIX was 36.87.

United States benchmark 10-year Treasury yields were lower, to 2.24 percent from 2.34 percent on Thursday.

“Going forward, the recent news in the stock market is not a good thing for consumer confidence and spending,” said Chris Christopher Jr., the senior principal economist for IHS Global Insight. “The swings in the equity markets are making consumers very nervous.”

But Christopher and other economists have noted that the recent declines in oil prices will offer some relief to Americans.

Industrial stocks led the way on the S&P 500, up almost 2 percent, with General Electric up more than 1 percent. Financial stocks pulled back by late afternoon, showing slight losses, but Bank of America was about 1 percent higher.

The gain in stocks came well after investors had digested the latest economic data. Timothy Hoyle, director of research for Haverford Investments, said that the markets took a step down in early trading when the consumer sentiment report was released, but that the figure was not unexpected considering recent bad economic data and some of the developments in financial markets.

Speaking about the market on Friday, he said: “Everyone is suffering from volatility fatigue.”

“We are stuck in a trading range until we have a credible backstop in Europe,” he said. “The market is extremely cheap but there is a lack of confidence in forward earnings estimates.”

American stocks picked up the pace from Europe, where markets got a lift from the imposition of temporary bans on negative bets against financial stocks in four countries. By the close of trading, the Euro Stoxx 50 index of euro zone blue chips was up more than 4 percent, and the FTSE 100 index in London was up 3.04 percent. The CAC 40 index in Paris was also up 4.02 percent, and the DAX in Frankfurt was up 3.45 percent. Asian stocks had a lackluster trading day.

Source

Racing to avoid a government default, President Barack Obama and Republican congressional leaders reached urgently for a compromise Sunday to permit vital borrowing by the Treasury in exchange for more than $2 trillion in long-term spending cuts. Senate Republican Leader Mitch McConnell said the two sides were “really, really close” to a deal after months of partisan fighting.

A few hours later, Senate Majority Leader Harry Reid issued a statement saying he had signed off on a pending agreement, subject to approval by the Democratic rank and file.

But that was met by conspicuous silence from the White House, McConnell and House Speaker John Boehner’s office, two days before a deadline to raise the federal debt limit and enable the government to keep paying its bills.

Privately, officials said a final sticking point concerned possible cuts in the nation’s defense budget in the next two years. Republicans wanted less. Democrats pressed for more in an attempt to shield domestic accounts from greater reductions.

As contemplated in talks that McConnell and Vice President Joe Biden were negotiating, the federal debt limit would rise in two stages by at least $2.2 trillion, enough to tide the Treasury over until after the 2012 elections.

Big cuts in government spending would be phased in over a decade. Thousands of programs _ the Park Service, Labor Department and housing among them _ could be trimmed to levels last seen years ago.

No Social Security or Medicare benefits would be cut, but the programs could be scoured for other savings. Taxes would be unlikely to rise.

Any agreement would have to be passed by the Democratic-controlled Senate and Republican-controlled House before going to the White House for Obama’s signature. With precious little time remaining, both houses were on standby throughout the day, and Speaker John Boehner was in his office.

Without legislation in place by Tuesday, the Treasury will not be able to pay all its bills, raising the threat of a default that administration officials say could inflict catastrophic damage on the economy.

If approved, though, a compromise would presumably preserve America’s sterling credit rating, reassure investors in financial markets across the globe and possibly reverse the losses that spread across Wall Street in recent days as the threat of a default grew.

Senate Majority Leader Harry Reid, D-Nev., said he was “hopeful and confident” a deal would come together. But in a possible hint of dissatisfaction, he pointedly made no mention of congressional Democrats when he said negotiations were between McConnell and the White House and unnamed others.

Officials familiar with the negotiations said that McConnell had been in frequent contact with Vice President Joe Biden, who has played an influential role across months of negotiations.

The talks were proceeding toward a two-step system for raising the debt limit and cutting spending.

The first step would take place immediately, raising the debt limit by nearly $1 trillion and cutting spending by a slightly larger amount over a decade.

That would be followed by creation of a new congressional committee that would have until the end of November to recommend $1.8 trillion or more in deficit cuts, targeting benefit programs such as Medicare, Medicaid and Social Security, or overhauling the tax code. Those deficit cuts would allow a second increase in the debt limit, which would be needed by early next year.

If the committee failed to reach its $1.8 trillion target, or Congress failed to approve its recommendations by the end of 2011, lawmakers would then have to vote on a proposed constitutional balanced-budget amendment.

If that failed to pass, automatic spending cuts totaling $1 online payday loan lenders.2 trillion would automatically take effect, and the debt limit would rise by an identical amount.

Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.

Officials describing those steps spoke on condition of anonymity, citing both the sensitivity of the talks and the potential that details could change.

The emerging deal could mark a classic compromise, a triumph of divided government that would let both Obama and Republicans claim they had achieved their objectives.

As the president demanded, the deal would allow the debt limit to rise by enough to tide the Treasury over until after the 2012 elections.

But barring a change, it appeared Obama’s proposal to extend the current payroll tax holiday beyond the end of 2011 would not be included, nor his call for extended unemployment benefits for victims of the recession.

Republicans would win spending cuts of slightly more than the increase in the debt limit, as they have demanded. Additionally, tax increases would be off-limits unless recommended by the bipartisan committee that is expected to include six Republicans and six Democrats. The conservative campaign to force Congress to approve a balanced-budget amendment to the Constitution would be jettisoned.

Congressional Democrats have long insisted that Medicare and Social Security benefits not be cut, a victory for them in the proposal under discussion. Yet they would have to absorb even deeper cuts in hundreds of federal programs than were included in Reid’s bill, which many Democrats supported in a symbolic vote on the House floor on Saturday.

As details began to emerge, one liberal organization, Progressive Change Campaign Committee, issued a statement that was harshly critical.

“Seeing a Democratic president take taxing the rich off the table and instead push a deal that will lead to Social Security, Medicare and Medicaid benefit cuts is like entering a bizarre parallel universe _ one with horrific consequences for middle-class families,” it said.

While politically powerful business groups like the Chamber of Commerce are expected to support the deal, tea party organizations and others have looked disapprovingly on legislation that doesn’t require approval of a balanced-budget amendment.

If they keep to that position, it could present Boehner a challenge in lining up enough votes to support a compromise, just as Obama may have to stand down rebels within his own party.

The day began with optimistic statements in televised interviews by McConnell and White House officials, then quickly reverted to a reminder of the fierce partisanship of the past several weeks.

Soon after the Senate convened, Republicans blocked legislation Reid had advanced several days ago as part of an outbreak of brinkmanship with Boehner and the Republicans. The vote was 50-49, or 10 short of the 60 votes needed to advance the bill.

The vote was of no consequence in the fate of the separate efforts to avoid default.

Those talks were unfolding along lines determined by McConnell and Biden, and it was unclear how much more time would be needed.

On the Senate floor, Reid told lawmakers they could leave the Capitol while awaiting developments. “I would not suggest a ball game, though, maybe closer,” he said.

A little over a mile away, on a hot, sunny Sunday, the Washington Nationals were playing host to the New York Mets.

Source

Wells Fargo & Co. is paying $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates.

The Federal Reserve says the fine is the largest it has ever imposed in a consumer-enforcement case.

Wells Fargo neither admitted nor denied wrongdoing as part of the settlement. The bank agreed to compensate borrowers who were steered into higher-priced loans or whose income was exaggerated.

The Fed alleges Wells Fargo inflated borrowers’ incomes on loan documents to qualify for mortgages they otherwise couldn’t afford from 2004 until 2008. The central banks says Wells Fargo sales personnel also pushed borrowers toward higher-interest, subprime loans, even though they were eligible for lower-interest mortgages.

Source

Troubled car maker Saab Automobile AB has received a euro13 million ($18.4 million) car order from a Chinese company that could help pay this month’s salaries, its owner Swedish Automobile AB said Monday.

The company, previously known as Spyker Cars, claimed the deal with an unnamed Chinese company would provide the ailing car brand with enough funds to also pay back parts of its debt to suppliers.

Last week, Saab said it had run out of cash to pay its 3,700 workers, raising doubts over how long the brand could survive.

Saab spokesman Eric Geers on Monday said the company hopes a prepayment from the Chinese company for the cars will allow it to pay the salaries, which were due last Friday, this week.

Swedish Automobile, which bought Saab from General Motors Co. last year, said it continues to hold talks with several parties to raise more cash for the brand. Among other things, it is in talks to sell and lease back Saab’s real estate.

Shares in the company rose by 22.8 percent to euro1.20 ($1.70) on the Amsterdam Stock Exchange.

The company’s message Monday wasn’t enough to calm concerns among unions and suppliers about the future of Saab.

Hakan Skott, chairman of metalworkers union IF Metall, said his organization is still working toward filing a payment request to Saab this week, demanding the company to “react” within seven days.

And the Swedish Enforcement Authority said it received a payment claim Monday of nearly 45 million Swedish kronor ($6.9 million) against Saab from the supplier International Automotive Components.

The authority’s spokesman, Fredric Orloff, said it is the biggest claim so far against Saab, out of a total of 68 filings.

Separately, Geers said two union members and Saab’s General Counsel Kristina Geers have resigned from the board of Saab Automobile, leaving Swedish Automobile CEO Victor Muller as the only board member.

“We very much regret the current cash shortage which is causing undeserved hardship to all and we are working relentlessly to resolve the current situation,” Muller said.

Muller said Russian businessman Vladimir Antonov is still interested in investing in Saab, but he has so far failed to receive the necessary approval from the European Investment Bank.

“Antonov can provide much needed financing and/or capital to Swedish Automobile/Saab Automobile at this critical time,” Muller said. “We are pushing hard to obtain this vital clearance as soon as practically possible.”

EIB spokesman Par Isaksson declined to comment on the bank’s review of Antonov, saying only that it examines all proposals to change the lending agreement thoroughly.

Antonov has previously said he is prepared to invest between $50 million-$150 million in Saab. He was forced out of Spyker as part of its deal with GM amid reports of money laundering. He has denied those allegations and has never been charged.

Source

JEFFERSON CITY