Russia refrained from cutting interest rates after a surprise reduction in December, signaling for the first time since August that borrowing costs may remain unchanged in the
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Seeking cooperation in a polarized climate, President Barack Obama on Tuesday urged Congress to act quickly on bipartisan measures that would extend tax breaks for small businesses and help startup companies raise money. He said he would sign the legislation “right away.”
Obama plans to include in his 2013 budget proposal later this month a series of business measures that have been percolating in Congress or that already have passed the Republican-controlled House to give entrepreneurs incentives to expand their businesses or start new ones.
Obama made his remarks during a Cabinet meeting at the White House. He noted that for the first time, the head of the Small Business Administration, Karen Mills, was participating as a full member of the Cabinet.
“It is a symbol of how important it is for us to spur entrepreneurship, to help startups, to move aggressively so that we can assure more companies that create the most jobs in our economy are getting a leg up from various programs that we have in our government,” Obama said.
The White House legislative agenda for small businesses includes permanently eliminating taxes on capital gains from investments in small businesses and a one-year extension on the ability of all businesses to immediately deduct all of the costs of equipment and software purchases.
The Obama administration also is seeking a new 10 percent tax credit for small businesses that add jobs or increase wages in 2012.
In addition, the president’s proposals would make it easier for new startup companies to raise money and to go public, embracing a series of measures that already have passed the House or that have bipartisan support in the Senate. Obama also is proposing expanding a government small business investment program from $3 billion to $4 billion.
“The president has made small businesses and particularly startups a key aspect of his economic growth agenda because he understands how much the newest and fastest-growing small businesses drive job growth in our economy,” said Gene Sperling, director of the White House National Economic Council.
Obama said the Homeland Security Department also is seeking ways to change the visa process to attract foreign-born entrepreneurs and high-skilled immigrants to invest in the United States or start new businesses. The State Department also plans a change in regulations to provide longer visas for workers whose employers transfer them from overseas to the United States guaranteed high risk personal loans.
The measures are modest by comparison to Obama’s 2009 economic stimulus or to last year’s jobs bill. But they borrow from past Obama initiatives and from bipartisan legislation that has passed or been proposed in Congress.
Obama’s package includes proposals offered in the Senate by Democrat Chris Coons of Delaware and Republican Marco Rubio of Florida, and another plan by Republican Jerry Moran of Kansas and Democrat Mark Warner of Virginia.
White House officials would not disclose the total cost of the president’s package, but Sperling said it would be more than covered by proposals to reduce tax expenditures and by closed loopholes the administration will call for in its 2013 budget.
With the presidential election set to become the main political preoccupation of 2012, the White House initiative is designed to take advantage of cooperative attempts by Republicans and Democrats to find modest remedies to spur the economy. Most of those efforts have been overshadowed by congressional bickering, the Republican presidential primary and Obama’s growing attention to his re-election.
The proposals come a year after the administration launched a consolidated effort to spur new startup businesses with a high-profile White House event featuring scores of entrepreneurs, some of whom offered testimonials to the job creation possibilities that new businesses can bring to the economy.
Besides the tax breaks, a central element of the Obama package is to assist new entrepreneurs by making it easier for them to raise money, reducing taxes on their startup expenses and removing securities barriers for new companies that have gone public.
“Our small business agenda has a specific focus on removing the barriers that have for too long blocked startups and entrepreneurs from getting the financing they need to accelerate their growth and hiring,” Sperling said.
One of the Obama provisions would increase the amount of money that can be raised through small public offerings that don’t require companies to undergo an extensive Securities and Exchange Commission registration process. The limit for such “mini public offerings” would increase from $5 million a year to $50 million.
The House passed similar legislation last year.
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Greece’s prime minister resumed talks late Thursday with top bank negotiators to try and overcome obstacles to a major debt-relief deal needed to avoid bankruptcy.
Premier Lucas Papademos met with Charles Dallara, managing director of the Institute of International Finance, a banking lobby, and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas.
Private bondholders are being asked to forgive half their Greek debt, and in return accept cash payments and new bonds with longer maturities. The deal is required for a second international bailout with a looming euro14.5 billion bond repayment on March 20 that carries a serious threat of bankruptcy for Greece.
Top eurozone officials are pressing private bondholders to accept the new bonds at a lower interest rate.
A senior Greek government official said, despite delays in concluding the negotiations, Greece was still aiming to submit its formal offer for the bond-swap deal to banks and other private creditors by Feb. 13. The official asked not to be named because the talks are ongoing.
Dallara resumed the talks in Athens for a third successive week.
Eurozone countries have taken a tough stance with the IIF because they would have to provide additional help to Greece if the bond-swap deal falls short of expectations.
“To ensure debt sustainability for Greece, it is essential that a new program be supported by a combination of private sector involvement and official sector support,” William Murray, an IMF spokesman, said late Wednesday.
Murray said the IMF has not asked the European Central Bank, which holds more than euro40 billion ($52 billion) in Greek government bonds, to play any specific role in relieving Greece’s debt pile.
The ECB, as a public sector holder of Greek debt, is protected from any writedown.
“The Fund has no view on the relative contribution of private sector involvement and official sector support in achieving” the target of cutting Greece’s debt-to-GDP ratio to 120 percent, Murray said.
Greece is currently surviving on a euro110-billion loan package from eurozone countries and the International Monetary Fund, and has been promised an additional euro130 billion in rescue aid if the bond-swap deal goes through.
EU-IMF debt inspectors are currently in Athens for talks with the Papademos government, to set conditions for the second package that are expected to produce more austerity measures in the recession-hit country.
Hardship facing many Greeks has spurred a huge drop in support for the country’s Socialist party, which won the last general election in 2009 with nearly 44 percent of the vote, and formed a coalition government with rival conservatives two months ago.
A nationwide opinion poll published Thursday found support for the Socialists has dropped to 12 percent, just behind three opposition left-wing parties.
The VPRC survey for the Epikaira news magazine gave the conservatives 30.5 percent support. Sample data was not immediately available.
General elections are expected in late April.
Anheuser-Busch President David Peacock, who has led the brewery’s U.S. operations since 2008, has resigned from the company.
Employees were notified today of Peacock’s resignation, which is effective today. He’s leaving to spend more time with his family and pursue other business interests, according to the company.
Peacock will continue to serve in an advisory role, according to an email sent by Luiz Edmond, who is assuming leadership of the brewery’s U payday loans.S. operations based in St. Louis.
Peacock was formerly vice president of marketing at the brewery.
Raymond James Financial is nearing a $930 million cash deal to buy Morgan Keegan, a Memphis-based brokerage owned by Regions Financial, Bloomberg News is reporting.
The Bloomberg report, citing a source close to the deal, said St. Petersburg-based Raymond James may announce the deal as early as this afternoon. The deal would include a $250 million from Morgan Keegan to Regions prior to the sale, bringing the total price to about $1.2 billion.
If the deal finalizes, it will make Raymond James among the largest underwriters of municipal bonds and boost its roster of financial advisers from 5,100 to about 6,300.
St business cards. Louis-based Stifel Nicolaus has pursued efforts to buy Morgan Keegan since Birmingham-based Regions put the unit up for sale in June. Bloomberg reported that Stifel’s most recent bid, made on Jan. 8, was $875 million in cash and stock. Stifel has 2,000 financial advisers and has grown its geographic footprint and adviser ranks through acquisitions in recent years.
Check back on stltoday.com for updates to this story.
The U.S. is starting the year on a positive note, a sign that investors may be too gloomy.
Payrolls rose 200,000 in December, double the gain in November. A weekly measure of consumer confidence ended 2011 at a five-month high. And manufacturers reported their business in December grew at the fastest pace in six months. The combination indicates the world
Wallets may soon be going the way of typewriters, pay phones and videocassette recorders.
Oh, they’ll still be a great place to carry photos, receipts and odd slips of paper, but technology forecasters say we’ll soon be reaching for cellphones when it’s time to pay or be paid.
It’s a dream that Kevin Stock is ready to live.
For nearly a year, Stock, of St. Louis, has been carrying around a small white plastic device he can attach to his phone at a moment’s notice, creating his very own credit card terminal. All he needs is someone willing to play along.
“I’ve looked for opportunities, for sure,” Stock said. “But I haven’t been too successful.”
So far, the only taker has been his roommate. Once a month they tally up their bills, and Stock collects what he is owed through a swipe of his roommate’s credit card.
And while Stock has been able to travel no further down the mobile payment path, industry experts say it’s only a matter of time — most say it’s several years out — before we witness a radical shift in the way we exchange cash.
“I don’t think it’s going to go away overnight or in the next year. But mobile payments is where it’s headed,” said Trevor Dryer, head of product management, mobile payments and point-of-sale for financial software maker Intuit.
Already, the financial sector is crawling with companies hoping to carve out a piece of a market that sees billions upon billions of dollars changing hands every year in the form of cash.
Much of that exchanging is done by choice, with some people simply preferring to deal in cash or checks. But there’s also the fact that small businesses often find it too expensive to maintain a merchant account — required to accept credit card payments.
Getting around that was the inspiration behind the Square device carried by Stock.
Square, whose founders include St. Louis native and Twitter inventor Jack Dorsey, offers credit card processing services to pretty much anyone with the right smartphone — most iPhones and Android-based phones.
The service is easy to use. An application links your phone and bank account, while the small card reader (the company gives them away) plugs into the earplug jack. From there, you just need someone willing to hand you a credit card and sign the screen with their finger. A day or so later, the money shows up in your bank about, minus a 2.75 percent fee.
The 2-year-old firm has shipped more than 800,000 card readers — 2,500 to St. Louis — and is now processing $2 billion in payments annually. But while that sounds like a lot of money, keep in mind that the nation rings up some $2 trillion annually in credit card charges.
Square is proving popular with a wide range of users, including musicians, massage therapists, restaurants and craft fair vendors.
“Right now, there are 26 million small businesses (in the nation) that only accept cash. It’s a huge market,” said spokeswoman Lindsay Wiese.
Until September, that market included St. Louis Osuwa Taiko, a traditional Japanese drum group that now uses Square a couple of times a month to sell CDs, T-shirts and other souvenirs after shows.
So far, it’s tough to say how much of a boost they’re getting from the device. But Junsei Ito, the group’s treasurer, said they made 20 credit card sales during a three-day Japanese festival over Labor Day Weekend.
“It seems like people buy more,” Ito said. “They don’t tend to carry a lot of cash these days. And they don’t carry checks, either.”
Similar to Square is Intuit’s GoPayment system, which also uses a card reader to send money either to a bank account or a prepaid credit card. Intuit’s mobile division is processing some $5 billion a year in credit card charges, said Dryer, the company’s mobile payments chief.
And while it started as a way to offer contractors, plumbers and electricians an easy way to take credit cards, the company loves to point out that Girl Scouts use the devices while hawking their cookies door to door.
“They are probably using their parents’ phones,” Dryer said. “But it’s a testament to how simple this product is that 9-year-old girls are using it.”
Other systems have looked for ways to remove the physical credit card from the equation. Among them are those using what’s known as near field communication, or NFC. Basically, it lets two devices exchange money when they come into contact with each other.
The technology is at the heart of MasterCard’s PayPass system, in which users tap their credit cards against a PayPass terminal to complete a purchase. In recent years, MasterCard has teamed with Google and several phone and financial services firms to create Google Wallet. Phones equipped with the technology can be used much like credit cards — they make payments simply by tapping them against an NFC terminal.
Several phone developers have included NFC in their devices, with BlackBerry and Nokia making plans to do so. Google’s Android-based devices have it, though the payment service suffered a blow recently when Verizon Wireless blocked its use in the new Galaxy Nexus phone. Verizon is part of a consortium called ISIS that is developing its own payment system.
While MasterCard sees potential in the technology — and the speed with which these trends can catch on — the company isn’t ready to sing the death of plastic. There are, after all, some advantages in having that physical card, said James Anderson, group head of mobile for MasterCard.
Among them, he said: “The batteries don’t go flat.”
One young startup in Des Moines, Iowa, however, is trying to create a new payment system in which credit cards never enter the picture.
Dwolla relies on bank accounts and actually prohibits the use of credit cards. Dwolla’s cost structure is simple: You pay 25 cents for any transaction, regardless of size.
Eliminating credit cards from the system removes the need to collect the types of fees — generally in the 3 percent range — charged on every credit card transaction, said Ben Milne, the company’s founder. Without the credit card fees, he said there’s no reason to base charges on the size of the transaction.
“The cost to move $1 million is the cost to move a dollar,” Milne said.
Not that they come close to moving that much money at any one time. The company’s average transaction is around $450, with a maximum of $10,000 for businesses and $5,000 for consumers. Still, Dwolla is on pace to handle more than $350 million worth of transactions over the next year.
And with some $20 trillion spent every year in cash transactions, Milne sees a lot of room for growth: “It’s likely the biggest market in the world.”
Still, for the Squares, Dwollas, Google Wallets, clearXchanges and GoPayments of the world to achieve widespread acceptance, some things need to happen. Among other things, experts say, there are too many participants. And they expect a wave of acquisitions and failures to thin the herd.
And many of the systems, at least in their present incarnations, are simply too cumbersome, they say.
Andy Schmidt, research director for Commercial Banking & Payments for TowerGroup, believes we’ll eventually get to the point where payments are all based on the simple exchange of phone numbers and email addresses.
As Stock from south St. Louis has seen, people are often reluctant to go through the hassle of pulling out their credit cards for minor exchanges.
“It’s not so much that you might capture my credit card information,” Schmidt said. “It’s that it’s quicker to give you cash. That’s what you are fighting.”
There also are concerns about the potential for identity theft and credit card fraud as credit card information is stored and transmitted through cellphones.
Michelle Jun, a senior attorney for Consumers Union, said consumers should make sure they are protected against fraud.
In general, the best protections are provided by those based on credit cards and, to a lesser degree, debit cards.
Both offer caps on liability in the event of fraud or identity theft. More vulnerable are those that rely on prepaid cards or that link directly to a cellphone account.
“Unfortunately, all of the different protections aren’t the same,” Jun said. “Make sure you know what you are getting into before you start charging away.”
Reflecting on a challenging year, President Barack Obama says he’s hoping for more economic progress following action by Congress to prevent tax increases at the start of 2012.
“It was good to see members of Congress do the right thing for millions of working Americans,” said Obama, using his weekly radio and Internet address Saturday to deliver a New Year’s message.
He said the public made itself heard on a Social Security payroll tax cut and that was one big reason that lawmakers agreed to extend it for two more months.
The American people, Obama said, “had the courage to believe your voices could make a difference.”
The president said he expects Congress to finish the job when lawmakers return to Washington in January and extend the tax cut through the end of the year.
Reflecting on 2011, Obama said it was a time of great challenge and progress, including the end of the war in Iraq, the death of Osama bin Laden and signs of an economic recovery.
“There’s no doubt that 2012 will bring even more change,” Obama said. “And as we head into the new year, I’m hopeful that we have what it takes to face that change and come out even stronger _ to grow our economy, create more jobs and strengthen the middle class.”
On the eve of an election year, Obama said the months ahead will help determine “what kind of country we want to be and what kind of world we want our children and grandchildren to grow up in.”
Sen. Johnny Isakson, delivering the GOP address, outlined his party’s commitments to the American people for 2012.
The Georgia lawmaker said his party’s No. 1 goal is to make it easier for small businesses to create jobs.
“We’ll accomplish this by focusing on three things: fundamental tax reform, regulatory reform and energy security,” he said.
Isakson said that while some people may think Congress will be too consumed with the 2012 elections to accomplish anything significant, the public deserves better.
“Americans cannot wait until after the November election,” he said. “They need us to do our job and do it right now to create an economic climate that makes it easier to put people back to work.”
Turkey and Azerbaijan will sign a memorandum of understanding tomorrow, establishing a consortium that will build a pipeline to ship natural gas from the BP Plc- operated Shah Deniz field to Europe via Anatolia.
State Oil Co. of Azerbaijan, or Socar, Turkey