Business and Finance

The frightful images of a sinking Italian cruise ship have scared off some cruise passengers, at least temporarily, during the industry’s peak booking season.

Travel agents — who book more than two-thirds of cruise passengers worldwide — have been nervously watching bookings since the Costa Concordia, which is owned by Carnival Corp, ran aground on Jan. 13.

On Monday, they got a new reason to be nervous: bookings fell significantly for Miami-based Carnival Corp. following the Costa accident. Attention is now focused on Royal Caribbean Cruises Ltd., which reports earnings Thursday. An increase there could show that passengers are fleeing Carnival over safety fears. A decrease could indicate an overall distrust of all cruise lines.

Nearly 11 million Americans took a cruise last year, generating an estimated $14.5 billion in revenue for the industry, according to PhoCusWright, a travel research firm. Like the rest of the travel industry, cruise lines are still recovering from the recession. Several new megaships started sailing just as passengers struggling with finances decided to stay home. But 2012 was supposed to be a year of moderate growth.

Carnival won’t say exactly how much bookings have dropped, but it disclosed Monday that in the 12 days following the Concordia capsizing, there was a percent decline “in the midteens compared to the prior year.” Reservations hit a low on Jan. 16, the company said in its annual report filed with the SEC.

Carnival operates 101 ships under several brands including Costa, Carnival, Cunard, Holland America, Princess and Seabourn. It said reservations with the Costa line are “down significantly” but difficult to interpret because many Costa customers were rebooked on other ships because of the loss of the Concordia ship.

Unlike plane tickets or hotel rooms, which are mostly booked directly through the Internet, most cruises are sold by travel agents. That scattered sales approach makes it harder to gauge the impact of an accident like the Concordia.

“Who knows how many people … (were) on the fence and decided not to book?” said Michael Driscoll, editor of Cruise Week.

Barclay’s Capital noted that on Thursday, the Carnival line began offering promotional onboard credits of up to $200 for things like drinks and spa treatments.

“Despite this ad, which in normal circumstances would have stimulated strong call volume, calls remain down 10 (percent),” Barclay’s analyst Felicia R. Hendrix wrote in a note to investors.

A major unnamed online travel agent has also seen cruise call volume fall 30 percent, Hendrix said.

Hendrix also noted that cancellations in the U.S. are up 10 to 15 percent. That’s because savvy travelers are backing out of trips now in anticipation of getting the same cruise later for less.

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European financial chiefs are trying to soothe global CEOs and political leaders, insisting they have a handle on the eurozone’s troubles.

Germany’s Finance Minister Wolfgang Schaeuble says he’s “quite optimistic” about a Greek debt restructuring deal, despite recent strains in the complex talks. He says he doesn’t expect Greece to default.

He stressed that recent developments in markets have been “positive” for Italy and Spain.

France’s Finance Minister Francois Baroin welcomed actions by the European Central Bank that he says have helped “reduce tensions in the European banking system payday loans.”

Both spoke Friday at the World Economic Forum in the Swiss ski resort of Davos, where many business and political VIPs fear that Europe’s debt crisis will drag the global economy into a new recession.

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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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Wall Street opened higher Wednesday following reports that the International Monetary Fund could get more cash to help countries struggling to manage their debt.

The Dow Jones industrial average is up 43 points at 12,483 after the first half-hour of trading. That’s an increase of 0.4 percent. Bank of America Corp. and JPMorgan Chase & Co. are the Dow’s leading stocks. BofA rose 2.6 percent, JPMorgan 2 percent.

Goldman Sachs Group Inc. jumped 3.5 percent after the investment bank reported earnings that trumped analysts’ expectations. Profit still sank 58 percent in the last three months of 2011, a result of sinking interest rates and volatile financial markets.

Other financial stocks were sharply lower. State Street Corp. dropped 6.5 percent.

Christine Lagarde, the IMF’s managing director, said Tuesday that the fund was looking at ways to increase the amount it can lend to countries, partly to deal with Europe’s debt crisis.

The S&P 500 index is up 5 points to 1,298. The Nasdaq is up 16 points, or 0.6 percent, to 2,744.

Yahoo Inc. rose 2 no credit check payday loans.5 percent on news that co-founder Jerry Yang is leaving the struggling Internet company. The departure clears the way for newly hired CEO Scott Thompson to take more radical action to shake up the company.

The Federal Reserve said manufacturing rose 0.9 percent in December, the biggest increase since December 2010. Output surged as companies bought more machines and materials.

Among other stocks making large moves Wednesday:

_ Amphenol Corp. soared 10 percent, the largest gain in the S&P 500. The manufacturer of fiber optic cables reported earnings that beat analysts’ expectations.

_ Linear Technology Corp. jumped 8.3 percent. The Milpitas, Calif.-based circuit maker said it expects revenue to rise between 4 and 8 percent in its third quarter following strong order increases in December and January. It also raised its dividend by a penny to 25 cents per share.

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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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Less than 12 hours after German Chancellor Angela Merkel emerged from an all-night crisis summit on Oct. 27, Joerg Asmussen appeared in front of lawmakers in Berlin to sell the deal he helped broker in Brussels.

General Motors Co. is on track to retake the title of world’s top-selling automaker, riding strong sales in the U.S. and China to beat Volkswagen and Toyota.

GM, which lost the crown to Toyota in 2008 after holding it for more than seven decades, won’t release global sales numbers until later this month, but it’s on pace to finish 2011 at around 9 million cars and trucks, at least 800,000 more than its German and Japanese rivals.

Volkswagen AG on Monday said it sold a record 8.156 million vehicles last year, a 14 percent rise over 2010. The company expects a tough 2012, though. Toyota, whose production suffered from the tsunami and Fukushima nuclear disaster, had earlier reported sales of 7.9 million vehicles in 2011.

GM, meanwhile, sold almost 7 million vehicles worldwide in the first three quarters and is expected to reach around 9 million for 2011.

GM has more appealing cars and trucks than in the past when Toyota took the crown away, says Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting company in Troy, Michigan.

Other manufacturers have passed Toyota partly because its car production was paralyzed by Japan’s earthquake and nuclear disaster last year. But rivals also developed stylish vehicles that are drawing more customers.

“They’re not pushing their designs as much as others in terms of new looks and feel,” Schuster says of Toyota. “The market has changed.”

Volkswagen met its aggressive sales goals in the U.S. and throughout the world, and its products also have made it a strong global competitor, Schuster says.

In the U.S., VW sales rose 26 percent last year to top 324,000 vehicles, boosted by a new Jetta compact sedan and the Passat midsize sedan. That surpassed its goal of 300,000.

Schuster expects a tighter race for the global sales crown next year with Toyota recovering from Japan’s disasters and the Nissan-Renault venture challenging the leaders.

Volkswagen, whose brands include Audi, Skoda and Seat, has a goal of producing 10 million vehicles per year and passing Toyota and GM to become the world’s biggest automaker by 2018.

Volkswagen’s top sales and marketing executive, Christian Klingler, says that “all the company’s brands have shown increases in difficult conditions on volatile markets” and called the 2011 figures “an outstanding result.”

But he added that the coming year will be demanding. “In 2012 the risks are increasing above all on European markets.”

The 17 countries that use the euro are struggling with a financial crisis over too much government debt. Fears that a country may default and damage the banking system have weighed on the wider economy and many think the eurozone economy may have shrunk in the last three months of 2011.

But the 2011 figures underlined a strong year for German automakers, who have profited from strong sales and profits in emerging markets, especially China. Volkswagen, Daimler AG’s Mercedes-Benz, BMW, and Porsche all recorded record vehicle sales for the year.

Luxury carmaker BMW AG said Monday that it sold a record 1.67 million vehicles under its BMW, Mini and Rolls-Royce brands thanks to a 14.2 percent increase over 2010.

The BMW brand, the company’s mainstay, sold 12.8 percent more cars and SUVs _ a total of 1.38 million. Rolls-Royce increased unit sales by 30.5 percent with 3,538 cars sold worldwide, breaking a sales record from 1978.

Porsche on Monday reported a 22 percent sales increase to 118,867 vehicles.

Daimler AG on Jan. 5 reported record sales of 1.362 million for its Mercedes-Benz, smart and Maybach brands.

Some analysts have said that VW is the world’s biggest because GM’s figures include vehicles made by its Wuling joint venture in China. Many don’t count Wuling because GM doesn’t have controlling interest in the company, but GM includes it in global sales figures.

Including Wuling, GM will overtake Toyota and Volkswagen, says Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting company in Troy, Michigan.

____

AP Auto Writer Bree Fowler in Detroit contributed to this report.

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One in eight people earning at least $1 million annually was audited by the Internal Revenue Service last year, making them far likelier to be examined than those making below $200,000, according to IRS data released Thursday.

Just 1 in 100 individuals earning less than $200,000 had their income tax returns examined, the IRS said.

The 12 percent of millionaire earners audited in 2011 was appreciably higher than the 8 percent who were audited in 2010. IRS officials said the high ratio was part of an effort to demonstrate that tax laws are applied fairly.

“That has been something we’ve concentrated on to assure that there’s equity in the system, to assure that those at the lower end of the spectrum know that those at the higher end of the spectrum are subject to the same rules and enforcement as everyone else,” Steven Miller, deputy IRS commissioner for services and enforcement, said in an interview.

In recent weeks, President Barack Obama and congressional Democrats have sought to boost taxes on the wealthy as a way to pay for jobs programs, a theme they are expected to continue in this presidential and congressional election year. IRS spokeswoman Michelle Eldridge said the growing portion of millionaire earners’ returns audited is not related to politics.

“The IRS is an agency of civil servants, and we base our audit decisions on tax issues _ nothing else. We don’t play politics here,” she said.

Between 2004 and 2009, the percentage of millionaire earners audited ranged between 5 percent and 7 percent.

The data was divided into only three categories of income: below $200,000, $200,000 and up, and $1 million and higher.

About 1 in 25 people earning $200,000 and more was audited in 2011.

The IRS also audited a greater proportion of large corporations than smaller ones, the data shows.

Last year, 1 percent of corporations with assets under $10 million were audited. Among corporations with assets of $250 million and up, 28 percent were audited.

The IRS said its enforcement efforts to collect all taxes owed _ which include audits, court cases and other activities _ netted $55 billion last year. That is nearly $3 billion less than the previous year, which Miller attributed to a falloff in estate taxes and corporations writing off their losses.

All together, the IRS audited nearly 1.6 million of the 141 million individual income tax returns that were filed. In 2010 _ the most recent year available _ more than 8 in 10 individuals audited ended up paying additional taxes.

The agency collected a total of $2.3 trillion in revenue last year from individuals and businesses, including the $55 billion from its enforcement efforts.

The IRS figures also showed that:

_In 2011, the agency garnisheed wages or seized money from bank accounts 3.7 million times, put liens on property 1 million times and seized 776 pieces of property.

_77 percent of individual returns were filed electronically last year, up from 69 percent in 2010.

_70 percent of callers to IRS taxpayer information telephone lines got through, slightly less than the 74 percent who reached someone in 2010. Miller attributed that to budget cuts to the agency.

_The information IRS officials dispensed over the phone to taxpayers was accurate 93 percent of the time, the same as the previous year.

_The IRS website, http://www.irs.gov, was visited 319 million times in 2011, a slight increase.

The data was presented by federal fiscal years, which begin on the previous Oct. 1.

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Companies with 401(k) plans and their employees may have to wait a little longer to find out what they are paying for their plans.

The Labor Department may push back the April 1 deadline that 401(k) plan providers were given to comply with new rules about fee disclosures, according to several people who had spoken to officials at the department.

One reason for the delay is that the release of the final rule, on how providers will be required to disclose their fees to employers, has been delayed for months, and isn’t expected to be published until the end of January. The rule will apply to all service providers, including recordkeepers, financial advisers and fund companies that work with 401(k) plans.

The Labor Department has a “high degree of confidence” that it can issue the rule by the end of January, according to a person familiar with the matter, adding that the department was sympathetic to the industry’s concerns about the short deadline for complying with the rule and wanted to avoid “a chaotic adjustment period.”

For 401(k) plan sponsors and participants, the delay means waiting three more months to find out what they are paying for their plans. The point of the disclosures is so that employers and ultimately employees know exactly what it is they are paying for when they sign up for their 401(k) plans.

Critics argue that it isn’t transparent what fees employers and plan participants are paying because much of it is buried in prospectuses and similar documents. As it stands, companies that offer 401(k) plans as retirement savings vehicles for employees are supposed to have access to fee information by April 1. Participants would get fee disclosures by June 1.

But for 401(k) plan providers, a delay of a few months would provide time to clarify exactly what they need to do to comply with the regulation, officials at industry lobbying groups said.

“We are very happy to work with the Department of Labor on expanded fee disclosure, but we need to know what it is we are complying with,” said Lisa Bleier, managing director of the Securities Industry and Financial Markets Association, which represents hundreds of broker-dealers, banks and asset managers.

SIFMA wrote a letter to the Department of Labor on December 2 requesting a 12-to-18-month extension on the deadline from when the rule is finalized.

The Labor Department came out with the current version of the rule in July 2010 and gave providers 12 months to comply. After industry opposition, the agency extended the deadline to April 2012. With the final version of the rule still awaiting release, plan providers say they won’t have enough time to comply.

“The DOL needs to give us some breathing room,” said David Tittsworth, executive director of the Investment Adviser Association, a Washington, D.C.-based trade group. “Every day that goes by that you don’t have the new rule, it becomes more compelling to extend that time frame.”

Of particular concern for providers is whether the final rule will require them to provide a summary disclosure of all fees associated with the plan, on top of the actual fee disclosures. If so, providers also want guidance on the format that disclosure needs to take, said Craig Hoffman, general counsel for the Association of Pension Professionals and Actuaries.

“We are not opposed to the idea…, but we need sufficient time to implement it,” he said. ASPPA, in conjunction with the Council of Independent 401(k) Recordkeepers wrote a letter to the Department of Labor on December 19 asking for at least 12 months after the rule is finalized to comply with it.

” I would not be surprised if they came forward with an extension,” Hoffman said.

A Labor Department spokesman declined to comment.

A delay would also give plan providers more time before they face pressure to cut fees in the face of heightened competition as costs are put in the spotlight.

But sources familiar with the discussions at the Labor Department said providers should not expect a long delay on the deadline to comply with fee disclosures.

“The (department) is definitely flexible, but they do want it to happen this year,” said one person who had spoken to Labor Department officials.

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