My finance view

European Central Bank president Mario Draghi says there’s “no external savior” for heavily indebted governments in the eurozone debt crisis and gave no sign the bank is ready to step in and support their finances.

Draghi said governments must take the tough steps to balance budgets and reform economies to promote growth.

“I will never tire of saying that the first response should be from government,” Draghi said Thursday at a speech in Berlin. “There is no external savior for a country that doesn’t want to save itself.”

As a “firewall” to calm markets in the meantime, Draghi said, the EU has its newly strengthened bailout fund.

Some economists have urged the ECB to support governments with bigger purchases of government bonds. So far the bank has made some purchases but kept them limited and said the program is temporary, stressing that governments must not rely on such help from the ECB.

Draghi said that the purchases were “neither eternal nor infinite.”

In his speech, Draghi focussed instead on the European Financial Stability Facility, the current EU bailout fund, as the “firewall” against the crisis. He urged EU officials to quickly implement decisions to strengthen it to assure markets governments will pay their debts on time.

Governments have agreed on ways to increase the fund’s lending power and are seeking outside investors such as countries in emerging markets to contribute to its lending power, so far without much progress.

Economists say the EFSF is too small to bail out Italy, the most recent focus of the debt crisis that has seen Greece, Ireland and Portugal seek bailouts from other eurozone governments and the International Monetary Fund.

Source

Employers likely added more jobs in November, encouraged by signs of modest economic growth. But the gains aren’t expected to be enough to lower the unemployment rate.

Economists forecast that employers added a net 125,000 jobs last month, an improvement from October’s gain of 80,000. The unemployment rate is expected to stay at 9 percent for the second straight month.

Some economists have revised their estimates even higher _ to roughly 150,000 _ after a spate of positive economic reports. And payroll provider ADP said Wednesday that private companies added 206,000 jobs last month.

Still, analysts say that while the economy is growing at a steady pace, it’s not accelerating enough to prompt employers to hire more aggressively.

And Europe’s financial crisis threatens to slow U.S. growth next year. A recession in Europe could reduce U.S. exports, hurt global financial markets and dampen business confidence.

Paul Ashworth, an economist at Capital Economics, estimates that the economy will expand 2.5 percent in the last three months of this year. But he expects growth to slow to 1.5 percent in 2012, partly because of the crisis in Europe.

“Things are getting a bit better, but perhaps only temporarily,” Ashworth said.

Weak job growth means companies don’t have to raise pay to keep their employees. Fewer jobs and lower pay leaves consumers with less money to spend. That’s holding back economic growth.

In the past three months, the economy has added an average of 114,000 net jobs per month. That’s barely enough to keep up with population growth. In the first four months of this year, the economy generated an average of 179,000 jobs per month.

For now, most recent economic reports have been positive.

Factories are expanding. The Institute for Supply Management, a trade group of purchasing managers, said Thursday that its manufacturing index rose to 52.7 in November, up from 50.8 in October. Any reading above 50 indicates expansion.

The ISM’s report also found that new orders and production both rose to seven-month highs. That’s a good sign for future output. Even export orders increased, despite the turmoil overseas.

Retailers reported a strong start to holiday sales over the Thanksgiving weekend, consumer confidence surged in November to the highest level since July, and Americans’ pay rose in October by the most in seven months.

Car sales also rose sharply in November, normally a lackluster month for the auto industry. Chrysler, Ford, Nissan and Hyundai all reported double-digit gains on Thursday, compared to a year ago.

Another report Thursday showed that U.S. builders spent more in October on new homes, offices and shopping centers. Construction spending rose for a third straight month, the Commerce Department said. Despite the gains, overall construction spending remained depressed.

Those reports have caused many economists to forecast a pickup in growth in the final three months of the year, to about a 3 percent annual rate. That would be an improvement from growth of 2 percent in the July-September period.

Source

Unemployment rates fell in three-quarters of U.S. states last month, a sign that many parts of the country are experiencing modest job gains.

The Labor Department says unemployment rates fell in 36 states in October and rose in only 5. Rates were unchanged in 9 states. That’s the best showing since April, when rates fell in 39 states.

Nationally, the unemployment rate ticked down to 9 percent in October, from 9.1 percent the previous month. Employers added a modest 80,000 net jobs last month and the previous two months were revised to show much stronger gains payday advance lender.

Still, at least 125,000 jobs a month are needed to keep up with population growth, and at least double that amount to rapidly reduce the unemployment rate.

Source

Metropolitan Urological Specialists PC, a leading St. Louis area medical practice, appears to be digging itself out of a $1.3 million tax problem.

Public records filed this year indicate that the Chesterfield-based medical practice and its property affiliate — Metropolitan Urological Properties LLC — has owed at least that much in delinquent federal, state and local taxes, interest and fees.

Metropolitan, which operates a sexual health clinic and offers surgery and radiation treatments, has about a dozen physicians. The medical firm has an imaging center, a laboratory, and doctors’ offices at various locations in Crestwood, Creve Coeur, Florissant, and Chesterfield including offices on the campuses of Mercy Hospital St. Louis and St. Luke’s Hospital.

Metropolitan’s new interim chief executive, Bob Lawson, and several doctors did not respond to requests to comment. The firm referred questions to its attorney, Mayer Klein. The medical firm has substantially paid down its tax liabilities in recent months, Klien said. He would not specify Metropolitan’s remaining balance of delinquent withholding taxes, he said, because the company is privately held.

“Metro is strong and very successful and a very solid company,” Klein said. ”I’m aware of our financial condition and we do not have any tax concerns.”

On Sept. 16 of this year, the Internal Revenue Service filed an $855,291 tax lien on “all property and rights to this property” belonging to the medical practice, federal records show.

The IRS filed the tax lien after Metropolitan fell behind on its federal taxes - namely, the employer’s quarterly payments of funds it must withhold from its employee’s paychecks for Social Security and Medicare. “We have made a demand for payment of this liability, but it remains unpaid,” the federal tax lien states.

Earlier this year, the Missouri Department of Revenue placed three tax liens on the firm totaling $154,103 involving overdue withholding taxes, state records show. The smallest of those state tax liens, totaling about $405, has been released.

Metropolitan’s delay in meeting its federal and state tax obligations echoes its difficulties paying its property taxes. The Post-Dispatch reported last week that the medical firm’s property affiliate - Metropolitan Urological Properties LLC - owes state and local tax authorities $338,224 in delinquent taxes, interest and penalties from 2009 and 2010 on two of its properties, which include medical office buildings at 10296 Big Bend Boulevard in Crestwood and at 215 Dunn Road in Florissant, according to St. Louis County Department of Revenue.

According to Missouri Department of Revenue records, Metropolitan’s problems paying its wittholding taxes began in early 2009.

In 2010, Missouri state tax authorities placed a $8,854 tax lien on Metropolitan, but the medical firm paid those delinquent withholding taxes and that lien was released in February of this year.

The medical firm’s former chief executive, Dunard Morris, left the firm last month for unexplained reasons. He did not return calls Thursday for comment.

Source

TORONTO

With new Toronto condo units averaging just 749 square feet, baby boomers are finding the word downsizing is taking on new meaning

Baby boomers Jack and Leona Anderson made their first big step towards retirement last summer when they flew to Toronto from their home in Regina looking for a condo.

It wasn’t the sticker price that sent the teachers into a mild panic. It was the size of the units.

“I just kept thinking, if I’m going to move into a space this small, it’s going to be at an old folks’ home,” says Jack Anderson, 61.

The Andersons toured soaring glass and steel towers equipped with basketball courts, sprawling exercise rooms, granite countertops galore.

But they couldn’t see a place where they could actually live their new life, until their agent took them on a trip back in time to The Bentley, an almost 30-year-old condo building just steps from the St. Lawrence Market.

In the end, the couple opted to overlook the dated lobby, oak-trimmed kitchen cupboards and two bathrooms in need of updating.

It was the 1,200 square feet of living space that wowed them, along with the building’s wood-burning fireplaces and rooftop garden. They paid $339,000 for the one-bedroom plus den corner unit.

“Our house is 3,000 square feet with two fireplaces. We spend a lot of time outdoors. That (rooftop garden) is a viable substitute. We will be able to go up there in the morning and have our coffee and read the paper,” says Anderson.

With condos getting smaller by the day, especially in the downtown core where new units average just 749 square feet, baby boomers are finding the word downsizing is taking on new meaning.

“There is definitely a disconnect between what the demographics are telling us versus what’s actually getting built,” says Farrell Macdonald, a Coldwell Banker realtor.

“If there is a vulnerability in Toronto’s housing market these days it’s on the condo side — not just because of the sheer numbers we’re building, but because of the size and quality.”

Canadian condo developer Tridel Group says 25 per cent of its buyers are empty nesters and while it does build some larger units, its biggest market by far is first-time buyers for whom affordability is more important than size payday loans online.

“This (demographic) bulge is roaring towards us now and we’ve got people who are demanding alternatives but the market isn’t really responding,” says Macdonald. “We’re building lots of small, cheap and cheerful units but we’re not thinking long term.”

Macdonald hears complaints regularly from boomers who want to trade in family homes for simpler lives close to theatres and restaurants but refuse to be “plunked in a shoebox” better suited to single, young professionals.

That frustration is fuelling a renaissance among older condos, long considered less desirable because they lack flash and modern amenities and tend to have higher maintenance fees, says realtor Colleen Gray.

In the past year, Gray has seen even younger buyers starting to peek at the past.

Much of the renewed interest has been in decades-old buildings along Toronto’s waterfront, near the St. Lawrence Market and in midtown where units are selling for as little as $320 to $350 a square foot. That’s almost half the $600 to $700 per square foot of new units.

The tradeoff is higher maintenance fees. In The Bentley they average 67 cents per square foot (the Andersons pay $700 a month, which includes utilities), compared to about 50 cents in newer buildings, many of which don’t include utilities.

The biggest risk in older buildings is getting hit with costs for a new roof or heating unit that can overwhelm the maintenance fund.

But that day will come for newer units, too, given that fees don’t tend to reflect real costs, says Macdonald.

The Andersons are renting out their unit right now and plan to virtually gut their condo when they get ready to move to Toronto.

They know it will never have the look or feel of a brand-new building, but at the least it will have sparkling new bathrooms and a kitchen with the de rigueur stainless steel and granite, says Anderson.

“There are always going to be people who will want a property like this in downtown Toronto, just because of its square footage. I think in that way it was a very clever investment.

“Someday it’s going to sell itself.” Also read: Why downtown living is more attractive

Source

WellPoint says its third-quarter earnings fell more than 7 percent even as medical enrollment and revenue grew.

The largest publicly traded health insurer based on enrollment reported net income of $683.2 million, $1.90 per share, in the three months that ended Sept. 30. That’s down from $739.1 million, or $1.74 per share, a year earlier.

Total operating revenue rose almost 6 percent to $15.2 billion.

Analysts polled by FactSet forecast earnings of $1 guaranteed payday loans.68 per share on $15.22 billion in revenue.

WellPoint says enrollment climbed more than 2 percent to 34.4 million members.

The Indianapolis company operates Blue Cross Blue Shield plans in 14 states, including California, New York and Ohio.

Source

Wells Fargo & Co., the largest U.S. home lender, led decliners among bank stocks after reporting that third-quarter revenue declined and margins narrowed.

Investors focused on a 6 percent decline in revenue from a year earlier to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans, according to a statement by the San Francisco-based bank.

“Given this low-rate environment, I think investors are very focused on direction of bank margins, and Wells was a little bit weaker than expected on the net interest margin,” David George, a bank analyst at Robert W. Baird & Co. in St. Louis, said in an interview on Bloomberg Televisions In the Loop.

Chief Executive Officer John Stumpf, 58, is focusing on costs as the 9.1 percent U.S. jobless rate and slow economy keep borrowers on the sidelines. Stumpf wants to reduce expenses about $1.5 billion a quarter by the end of next year. Rivals including Bank of America Corp. are cutting employees, and Wells Fargo said it planned to streamline some staff functions.

The bank fell 8.4 percent to $24.42 at 4:15 p.m. in New York trading. It was the biggest drop since August, and Wells Fargo led decliners in the Standard & Poors 500 Financials index and the KBW Bank Index.

Profit for the three months ended Sept. 30 rose 22 percent to a record $4.06 billion, or 72 cents a diluted share, from $3.34 billion, or 60 cents, in the same period a year earlier. Pretax, pre-provision income, used by analysts to filter out the impact of some one-time gains and losses, was little changed at $7.95 billion from $7.91 billion in the preceding three-month period.

“The economic recovery has been more sluggish and uneven than anyone anticipated,” Stumpf said in the statement. “We can’t change the economic environment, yet we have worked hard to control the variables we can.”

The company set aside $1.8 billion to cover loan losses, with net loan write-offs of $2.6 billion, for a pretax reserve release of $800 million.

Source

To find symbolism in the Greek financial crisis, just go to the source. The national image on the two-euro coin in Greece depicts an ancient myth about the abduction of Europa, a Phoenician princess, by Zeus, the king of the gods in the form of a bull.

The saga known as the “Rape of Europa,” whose protagonist rides the bull’s back in an image reproduced by artists over the centuries, mirrors the turbulent journey of Greece and the rest of Europe, hitched together in an agonizing spiral that seems to go on and on and on.

The crude parallel ends there, however _ Zeus turned into a human, had his way with Europa, and she bore him children. The last chapter in modern Greece, meanwhile, is still blank. Will there be a debt default, with its ominous implications for the global economy? How long will Greeks endure the erosion of what was a good life?

The future is a void, and anger and helplessness dig deep in the Greek psyche. Joblessness is climbing and essential services such as health care and policing are losing resources.

The crisis may pale beside the bloody conflict or poverty in Libya or Afghanistan, but the hardship is as much psychological as economic. It is the shock of undercut expectations, the loss of benefits and prospects once taken for granted as part of the European contract.

The mood now resembles the plot of “Groundhog Day,” a 1993 movie about a man who wakes up to the same day over and over again.

“We don’t see how we can escape from this problem,” said Kostas Theofanides, engineering manager for British Petroleum in Greece. He spoke Thursday evening at a resort hotel on the Athenian coast, where Greek and German business executives, nametags on their suits, mingled during a forum that hummed with talk of investing in a country on the edge.

Greeks, whose previous governments were accused of hiding the extent of the country’s ballooning budget deficit, now talk with withering honesty about their problems. Even at investment forums. Theofanides said his compatriots are angry, unsafe and depressed, and wonder how long they have to put up their daily stew of taxes, austerity, unemployment and general uncertainty.

He ticked off the possibilities: Two years? Three years? Ten years, 25 years? Who knows.

But there is plenty of blame to go around, and nobody is exempt _ from free-spending Greeks, to the politicians they elected, to Germany and the international lenders with their dire prescriptions of cuts and then more cuts.

With a sly smile, Dimitrios Gardikiotis, director at an information technology company, suggested Germany had been plotting Greece’s downfall for the past 20 years, luring its junior economic partner into dissolute ways so that it could barge in and buy assets on the cheap.

‘”I’m preparing your economic death. Then I will buy you and your wife and your children,’” said Gardikiotis, imagining what he thought might be a German viewpoint. He said it in such a disarming manner that it was hard to tell what he really thought.

“Greeks actually point their fingers at others, not at themselves,” Gardikiotis said. “Of course, there are certain mistakes, and everybody has to recognize their responsibility.”

History is to blame as well, in some Greek quarters.

Its students point to centuries of Ottoman rule that ended in independence in 1829, giving other European nations a headstart in building democracy. Then bouts of civil strife stunted progress. The king and the prime minister sparred during the National Schism in the early 20th century, the Western-backed government fought the communists in the late 1940s, and a military junta ruled between 1967 and 1974.

For a few resentful Greeks, there are always the Nazis, who occupied Greece during World War II payday loans for bad credit. On Thursday, several people in uniforms, including a man doing his best to impersonate Adolf Hitler, turned up with a Nazi flag and other insignia outside the German Embassy.

“The Germans owe us millions in war reparations, let them pay what they owe us,” said 75-year-old Demetris Kollatos, a fixture on the protest circuit who vaguely recalled the German occupation of Athens during his childhood. “In their greed to get everything, they’ll lose everything.”

Mostly, there is grim confusion and numbing fatigue. Greece is struggling to meet the terms of a euro110 billion ($146 billion) international bailout from other eurozone countries and the International Monetary Fund, but there is growing doubt about whether it can dodge a default. The country is in a third year of recession, with another on the way.

The government is tightening up on tax evaders, but some edicts, including those about what receipts taxpayers need to save in order to avoid penalties, have changed several times. A columnist in the English-language Athens News, who draws on historical figures for his alias, Alcibiades Ouranos, predicted a looming deluge of bureaucracy:

“Thing A should be dealt like that, but we acknowledge that B, C and D are unfairly hurt by that legislation, so we declare that B should do that, C should do something else and D should do that, but only if they do not fall into category E, have F blahblahblah. So bring us statements from agency G, H and I who monitor such things, to establish that you are indeed a B and not an A.”

Some Greeks think they are venturing onto new psychological terrain after nearly two years in which the concept of crisis, which should be exceptional by definition, is as banal as the protests and strikes that convulse Athens from time to time.

Despoina Ergenidou is director of the Numismatic Museum, a monument to the coins and currency of ancient Greece that is housed in the mansion where Heinrich Schliemann, the German archaeologist who excavated Troy, lived in the late 19th century.

“It’s not just the economy. It’s ethical values,” she said in an interview in her office, flanked by a garden in downtown Athens. “They are losing what they believe. I don’t mean religion. We were working for something better, we believed in things, people, good ideas. We were working for those ideas. It’s not like that anymore.”

In ancient times, Ergenidou said, there were no banks, so people hoarded coins in hiding places, in pots or pouches, behind walls and under floors. Many families survived war and other hardships through their domestic economies, a garden to grow vegetables or some farm animals.

Those were truly hard times. They were also glorious times, when hundreds of cities and kings minted coins in different denominations and metals. There were tetradrachms and staters and obols, gold and silver and brass, and coins with images of turtles, foals and owls.

It is tempting to find relevance in the words of ancient Greek philosophers to Greece’s modern predicament, in which avarice played a star role. Aristotle recognized the value of money as a tool for the interchange of goods, beyond barter, but warned of its artifice and the imbalances generated by seeking cash without restraint.

“It appears necessary that there should be a limit to all riches, yet in actual fact we observe that the opposite takes place; for all men engaged in wealth-getting try to increase their money to an unlimited amount,” he wrote.

Source

The departing chief economist of the European Central Bank is saying that heavy levels of government debt are threatening the existence of the euro currency.

Juergen Stark’s statements in a paper with three other economists on the ECB’s website are unusual because they come from a high-ranking central banker.

The paper also dismisses new measures to strengthen EU controls over national government spending as insufficient.

It says Europe needs far tougher measures, such as appointing administrators to oversee finances in countries that need bailouts, as Greece, Ireland and Portugal have.

Stark is resigning almost three years before the end of his term amid talk that he is unhappy with the bank’s crisis measure of propping up weak governments by buying their bonds.

Source