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Frustration is turning to anger in the ranks of hourly workers at General Motors Co.’s Lockport plant, formerly Delphi Thermal Systems.

The cause is GM’s attempt to gain contract concessions from the United Auto Workers union and its members.

“Definitely there is frustration on the floor. And some are angry, yes. We took a pretty good pay hit a couple years ago,” said Gordie Fletcher, president of UAW Local 686 Unit No. 1 at Lockport.

According to Fletcher, GM wants members to forego a 3.75 percent cost-of-living raise that was scheduled to go into effect in January but which has not been paid.

Also drawing workers’ ire are bonuses that the union says salaried workers have received.

“We don’t think that’s fair. They’re rewarding one group and taking away from another. There should be shared sacrifice,” Fletcher said.

Increasing the frustration is the absence of any new work being assigned to Lockport.

“We want work brought into the plant and aren’t seeing it. Nothing is being said other than that we could have the opportunity to bid on new work – nothing, though, about when or anything else,” Fletcher said.

“That adds to our immense sense of frustration,” he added.

Simmering situation

Anger reportedly is simmering in the ranks of the UAW at the four former Delphi Corp free credit report online. plants that, like Lockport, reverted to GM in 2009 as part of Delphi’s restructuring out of bankruptcy protection.

Much of the opposition comes from workers at plants in Lockport and Rochester, and Saginaw and Grand Rapids, Mich., where UAW members say they are being pushed to renegotiate a contract that included concessions they signed only last year.

“We haven’t seen anything in writing yet, but we know they’re coming for us again,” a GM worker from Grand Rapids recently told a Detroit-based freelance reporter. “We also know they want a ‘no strike’ clause.”

Negotiations (on the concessions) are continuing at each of the plants “a couple times a week and sometimes daily – but there has been very little headway. Actually, I’d classify it as no headway,” Fletcher said.

Unlike previous years, when plants were covered by an industrywide contract negotiated with the Detroit automakers, each former Delphi plant now is responsible for its own labor agreement. The current contract expires in 2011.

A GM spokesman said discussions between GM and the UAW are ongoing and further details are unavailable.

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Australia may resume leading the world in raising borrowing costs, increasing the benchmark interest rate for the fourth time in five meetings, economists say. Traders aren’t so sure.

Governor Glenn Stevens will boost the Reserve Bank of Australia’s overnight cash rate target to 4 percent from 3.75 percent, according to 14 of 19 economists surveyed by Bloomberg. Futures traders estimate a 54 percent chance of an increase when the decision is announced at 2:30 p.m. tomorrow in Sydney.

Australia’s economy probably grew the most in 1 1/2 years in the fourth quarter, a separate analyst’s survey ahead of a report on March 3 shows, boosted by A$22 billion ($20 billion) in spending by Prime Minister Kevin Rudd on roads and schools. Concerns about sovereign debt in Europe and financial markets turmoil may prompt Stevens to wait another month, some economists say.

“Tomorrow’s decision is close to a coin toss,” said Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney and the only analyst surveyed by Bloomberg who correctly predicted Stevens’ first rate increase in October. “Rates need to go up, but if they don’t it’s because there’s uncertainty about how the consumer will hold up, sovereign debt, and weak data out of the U.S.”

Group of 20

Boosting the benchmark rate tomorrow would make Stevens the first central banker from a Group of 20 economy to raise borrowing costs this year. He was the first in the world to increase rates three times last quarter, when he raised the key rate in three quarter-point steps to 3.75 percent from a half- century low of 3 percent.

By contrast, the U.S. Federal Reserve Chairman Ben S. Bernanke said last week the world’s largest economy is in a “nascent” recovery that still requires low interest rates. The Fed has kept its benchmark rate close to zero since late 2008. The European Central Bank’s rate is at a record low of 1 percent.

A rebound in Australian consumer confidence, higher business optimism, surging house prices, a drop in unemployment, and signs of an investment boom in resources projects such as Chevron Corp.’s Gorgon natural gas field off Western Australia are forecast by the central bank to fuel an acceleration in Australia’s economy, one of few to skirt last year’s recession.

Australian manufacturing expanded last month at the fastest pace in more than two years, a report showed today. The performance of manufacturing index increased 2.8 points from January to 53.8, Australian Industry Group and PricewaterhouseCoopers said.

‘Gentle Retreat’

Gross domestic product probably rose 0.9 percent in the fourth quarter from the previous three months, when it gained 0.2 percent, according to the median estimate of 18 economists surveyed by Bloomberg News. The economy probably expanded 2.4 percent from a year earlier, they said. The figures will be released at 11:30 a.m. on March 3.

“With the shrinking unemployment rate and the likely rebound in December-quarter GDP, we are convinced that another gentle retreat from the accelerator is required,” said Annette Beacher, an economist at TD Securities Ltd. in Singapore.

A report published last week showed business investment jumped in the fourth quarter at almost three times the pace predicted by analysts as companies raised their forecasts for investment plans to the highest level in five years.

Chinese Demand

BHP Billiton Ltd., the world’s largest mining company, said last month it will increase capital spending on iron-ore mines and oil fields by 63 percent next year to $20.8 billion from $12.8 billion this year.

Rising Chinese demand for Australian iron ore and coal is stoking a record boom in mining investment that may last more than a decade, central bank Deputy Governor Ric Battellino said on Feb guaranteed online payday loans. 23. Investment in new mines, ports and infrastructure may reach 6 percent of GDP, more than double the amount spent during the last resources boom in the late 1970s, he said.

Chevron, Exxon Mobile Corp. and Royal Dutch Shell Plc have this year begun construction on the A$43 billion Gorgon natural- gas venture, the nation’s single-biggest investment project that is forecast to generate as many as 10,000 jobs.

The economy has less scope than previously expected for “robust” growth that doesn’t stoke inflation, Governor Stevens told a parliamentary committee in Canberra on Feb. 19. “Monetary policy must therefore be careful not to overstay a very expansionary setting.”

House Prices

While inflation in Australia cooled in 2009 amidst the global recession, the central bank has pointed to accelerating house prices as a key reason for boosting borrowing costs last quarter.

House prices jumped 11.8 percent in the year through January, according to a Feb. 26 report by real-estate monitoring company RP Data-Rismark, whose figures are used by the central bank in its quarterly monetary policy statement.

Retail sales rose 0.5 percent in January after falling in December for the first time in five months and building approvals gained for a third straight month, according to Bloomberg surveys of analysts ahead of reports to be released tomorrow.

“Australia’s economy is in much better shape than was anticipated when rates were cut to a generation low a year ago,” said Rory Robertson, an economist at Macquarie Group Ltd. in Sydney. “I’ll be very surprised if the Reserve Bank doesn’t decide to continue its ‘normalization’ process” tomorrow.

“After all, it has already paused for nearly 90 days having hiked three times in just 60 days,” he said.

Not Convinced

Still, not all investors are convinced that Stevens and his board will boost borrowing costs in tomorrow’s announcement.

Traders are betting there is a 54 percent chance of a quarter-percentage-point rate increase, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 8:55 a.m.

Reports published late last week have stoked speculation that the global recovery will be hampered by weak growth among the world’s biggest economies.

Confidence among households and companies in the 16-nation euro economy fell and bank loans to the private sector declined for a fifth month, plus Standard & Poor’s said Feb. 25 that it may soon downgrade Greece again as the country grapples with the region’s largest budget shortfall.

The number of Americans filing first-time claims for unemployment insurance unexpectedly rose last week, the Labor Department said in Washington.

That contrasts with Australia where reports published last month showed business confidence rebounded and employers added 194,600 jobs in the five months through January, the biggest increase in more than three years that has cut the unemployment rate to an 11-month low of 5.3 percent.

“If anyone is going to boom, surely it’s Australia,” Gerry Harvey, chairman of Australia’s largest electronics retailer Harvey Norman Holdings Ltd., said in a Feb. 26 interview. “We never really went into a recession at all. Our unemployment rate was projected to reach 7, 8, 9, or 10 percent, but it never even got to 6 percent.”

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European confidence in the economic outlook unexpectedly worsened in February after the euro region’s recovery almost stalled in the fourth quarter.

An index of executive and consumer sentiment in the 16 nations using the euro slipped to 95.9 from a revised 96 in January, the European Commission in Brussels said today. The economic recovery may fail to gather strength for most of 2010, the commission said in a separate report.

European domestic demand remains weak and it’s not yet clear to what extent the euro region will benefit from a global recovery, the commission said. As governments seek to bolster the recovery, they also are trying to stem investor concern about widening budget deficits in Greece and other nations, which is pushing up bond yields.

“There are still some dark clouds in the air,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said today at a press conference in Brussels. “Clearly, turning the European economy back on a strong and sustainable path is now our overriding objective.”

The February drop in the confidence index was the first in 11 months. Economists had projected an increase to 96.4 from a previously reported January reading of 95.7, according to the median of 25 forecasts in a Bloomberg News survey.

The euro declined against the dollar and was at $1.3489 as of 1:12 p.m. in London, down 0.4 percent. The yield on the German 10-year bond fell 2 basis points to 3.11 percent.

Cautious Outlook

The German economy, Europe’s largest, may fail to grow in the three months through March before expanding 0.3 percent in the following two quarters, the commission forecast. France may grow 0.4 percent in the first quarter and stall in the second. The U.K., which isn’t part of the euro area, is seen expanding 0.2 percent in both quarters.

The commission sees the euro-area economy expanding 0.7 percent this year after a 4 percent contraction in 2009, unchanged from its previous forecast in November. In the fourth quarter, the economy expanded just 0.1 percent.

Carrefour SA doesn’t “see any change in the European environment for the next six months at least,” Chief Executive Officer Lars Olofsson said on Feb. 19, after Europe’s largest retailer reported a 70 percent drop in full-year profit.

Separate data today showed that loans to households and companies in Europe declined in January from a year earlier after the economic expansion curbed demand for credit. German unemployment increased for a second month in February.

Deficit Woes

Concern about Greece’s ability to finance its deficit and debt has roiled financial markets since the government revealed it had a budget gap of 12 guaranteed approval cash loans.7 percent of GDP last year. That’s more than four times the limit allowed for countries using the euro and the highest in the 27-nation EU.

Standard & Poor’s said late yesterday that it may lower its BBB+ rating on Greece by the end of March and Moody’s Investors Service said today that it may reduce its A2 grade in a few months.

The commission said its deficit forecasts remain “broadly unchanged” from its November assessment, when it projected the region’s average budget gap would widen to 6.9 percent of GDP in 2010. All euro-area nations will breach EU deficit limits this year and next, the commission forecast.

It also said there’s a possibility that the impact of sliding sovereign bonds could be “broader, weighing further on the recovery” by pushing up financing costs.

Euro-Area Inflation

Euro-area inflation may accelerate to 0.8 percent in the current quarter and 1.3 percent in the second quarter, according to the commission. For the full year, the commission sees inflation averaging 1.1 percent, compared with 0.3 percent in 2009. In the confidence report, a gauge of consumers’ price expectations over the next 12 months rose to the highest since March 2009.

The European Central Bank, which aims to keep inflation just below 2 percent, earlier this month kept borrowing costs at a record low of 1 percent. The Frankfurt-based central bank will decide next month on a further “gradual” phasing-out of emergency measures introduced to fight the economic crisis, ECB council member George Provopoulos said.

“It’s premature to talk about a self-sustaining, jobs- creating recovery,” said Martin Van Vliet, an economist at ING Group in Amsterdam. The confidence data “highlight the need for the ECB to tread carefully in unwinding unconventional stimulus and to keep interest rates firmly on hold for the time being.”

Companies across Europe are already seeking ways to expand in faster-growing economies to help boost sales. Paris-based Pernod Ricard SA, the world’s second-largest liquor maker, said on Feb. 18 that sales from China will shortly overtake those in Spain, and emerging markets such as Russia are “starting to turn around.”

“The question is how robust the global cycle will prove to be and how much EU economies will benefit from it,” the commission said. “A rather cautious export outlook is therefore warranted.”

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Toyota president Akio Toyoda accepted on Thursday a formal invitation to testify at a hearing to be held next Wednesday.

The House Oversight Committee sent the invitation Thursday morning. Toyoda had initially said he would not appear before the committee but would instead send North America chief Yoshimi Inaba.

But late Thursday, Toyoda released a short statement: "I have received Congressman Towns’ invitation to testify before the House Committee on Oversight and Government Reform on February 24 and I accept. I look forward to speaking directly with Congress and the American people."

The invitation sent by Committee Chairman Edolphus Towns, D-N.Y., reads: "There appears to be growing public confusion regarding which vehicles may be affected and how people should respond. In short, the public is unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it."

After Toyoda announced his acceptance, Towns released his own statement, with Ranking Member Darrell Issa, R-Calif,: "We are pleased Mr. Toyoda accepted the invitation to testify before the Committee. We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers."

Earlier Thursday, the committee issued a subpoena for "all documents relating to Toyota motor vehicle safety and Toyota’s handling of alleged motor vehicle defects and related litigation" that are held by Toyota’s former U.S. counsel Dimitrios Biller.

Biller has claimed that he possesses documents that proved Toyota hid key findings of safety defects. Even before Thursday’s news, Toyota had filed an injunction to prevent Biller from making those documents public, but a Committee aide said the Committee’s subpoena overrides the state-level injunction.

"Mr. Biller is a former Toyota attorney who left the company in 2007," Toyota spokeswoman Cindy Knight said in an e-mailed statement. "He would have no knowledge about Toyota matters since that time and is not a reliable source of information."

Toyota will continue to fight Biller’s allegations, Knight said.

Mr. Toyoda has been criticized for being slow to speak up regarding the issues. The carmaker has recently faced a string of massive recalls and, only yesterday, became the subject of a second ongoing National Highway Traffic Safety Administration investigation into potential safety problems with its cars.

Also, late Thursday, the NHTSA announced it had officially opened an investigation into possible steering problems with Toyota’s Corolla compact cars.

The investigation involves reports that Corolla cars can wander or drift at highway speeds. Seven people have been injured in incidents that may have been related to the problem, according to a NHTSA report.

Toyota plans to cooperate fully in the investigation, a Toyota spokesman said.

Gene Grabowski, head of the crisis communication practice for Washington-based Levick Strategic Communications, said Toyoda "needs to be very well-prepared."

Grabowski’s firm has worked with more than a dozen witnesses called to testify on Capitol Hill, he said, and the most important thing they all must remember is to remain humble. A witness must remember that the members of Congress need to be seen helping their constituents and the best thing for a witness to do is to play his part.

"Your job in a hearing is to assist the members of Congress," he said, "and sometimes that means taking some lumps."

If Mr. Toyoda is smart, Grabowski said, he’ll come to Washington a few days early to meet privately with the Congressional members he’ll be testifying for.

"If you go in cold and they don’t know you," Grabowski said, "they’re far more likely to attack you." 

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Goldman Sachs has filed a lawsuit against seven former Atlanta-based executives in its wealth management division for soliciting employees and former clients after their departure for rival Credit Suisse.

The suit, filed Feb. 17 in U.S. District Court in Atlanta, alleges that Credit Suisse facilitated the executives’ departure promising payouts worth of millions of dollars.

The suit seeks to block the defendants from contacting their former Goldman clients and colleagues.

The five vice presidents and two associates are accused of “pirating” Goldman’s clients and trying to coax employees to defect to Credit Suisse in violation of non-solicitation clauses, the suit alleges. The suit was first reported by Reuters.

Named in the suit were: David Greene, Craig Savage, Andrew Thompson, Sharran Srivatsaa, John Pitt, Stephanie Dennard and Kim Tyson.

Atlanta’s wealth management firms have been embroiled in the industry-wide shakeup of personnel and clients, with established players and newcomers fighting over top talent.

The lawsuit states that the seven investment executives “abruptly” left Goldman on Feb. 5, after Credit Suisse offered the team “tens of millions of dollars to leave.”

The group “immediately began soliciting Goldman Sachs’ clients and employees in violation of non-solicitation clauses” that Greene, Savage, Thompson, Srivatsaa and Pitt had previously accepted. The suit alleges that Dennard and Tyson did an end around the non-solicitation clauses by approaching former colleagues and clients on their superiors’ behalf to convince them to move over to Credit Suisse, and also improperly used confidential Goldman information.

The suit states that Greene and Savage met with the head of Goldman’s Atlanta office late Feb. 5 and announced their intent to leave, and later Greene said in a phone call that he had been promised $11 million to join Credit Suisse.

The suit also alleges that the defendants told clients about a shakeup and claimed that it had destabilized the Atlanta office.

Another Goldman executive claimed in the suit he received an unsolicited offer to leave for Credit Suisse in exchange for $10 million.

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Call it the Case of the Missing Commission.

The bipartisan panel that President Obama has promised would tackle the nation’s long-term debt problems is nowhere in sight yet.

The delay in getting the commission up and running is due in great part to partisan jockeying from both sides of the aisle and continued uncertainty about whether current Republican lawmakers will agree to take part.

There’s no guarantee that when it does materialize it will have the respect of many in Congress, which would have the final word on the commission’s recommendations.

And the call for the commission has taken on greater urgency in light of the recent global volatility caused by the sovereign debt crisis in Greece, which threatens all of Europe.

"You need a fiscal commission. You need it now," Simon Johnson, senior fellow at the Peterson Institute for International Economics, told lawmakers this week.

The commission will be asked to figure out ways to get annual deficits down to 3% of gross domestic product by 2015 and thereafter put the country on a more sustainable fiscal track.

The panel’s timeline will be tight. The commission is supposed to issue its report soon after the mid-term elections in November so Congress can vote on them before the year is out.

So every day that goes by without a commission is valuable time wasted considering the complicated issues it is expected to address — everything from taxes and health care to all spending in the federal budget, including Medicare and Social Security.

What’s the rush?

The commission isn’t expected to make recommendations that — if passed — would go into effect right away. In fact, even many deficit hawks say that now is not the time for fiscal austerity. The time for that would be when the U.S. economy is on firmer footing.

But the swift establishment of the commission would help signal to international markets that the United States is working to get its deficits under control, said Johnson, a former chief economist for the International Monetary Fund.

"I think we should take events of the past few weeks in Europe as a wake-up call," Johnson said.

In the past two months, borrowing costs have soared for Greece, where the annual deficit has risen to 12% of the economy. That has forced the country to choose between defaulting on its debt or trying to convince investors of its creditworthiness by imposing stringent austerity measures such as budget cuts, tax hikes and pay freezes business cards.

Of course, there’s a lot that distinguishes the position of the United States from Greece. But the recent events show just how quickly the markets can turn on sovereign borrowers.

What’s the risk?

If the United States takes its time coming up with a deficit reduction plan, all bets are off.

"If you don’t have [a fiscal commission] … the financial markets are going to push you on the lack of medium-term credible fiscal framework," Johnson said.

And if the push for greater fiscal austerity comes during the second half of 2010, when economic growth is expected to slow, that would harm the U.S. economy.

"Raising taxes and cutting spending — you don’t want to do that in the second half of the year. If the markets force you to, that’s a disaster," Johnson said.

Carmen Reinhart, director of the Center for International Economics at the University of Maryland, has studied the patterns that high-debt countries follow after severe financial crises like the kind that almost felled the U.S. economy in 2008 and 2009.

Like Johnson, Reinhart doesn’t believe this year is the time for implementing austerity measures. But it is the year to come up with a plan of action to reduce the country’s debt over time.

"Market discipline can come without warning. Countries that haven’t laid the groundwork for adjustment come to regret it. This time is not different," Reinhart told lawmakers.

There is nothing magic or even necessary about a fiscal commission. But the fact is Congress is showing no signs of taking on sacred cows and addressing the fiscal problem head-on.

Still, having a commission and having it be successful are two very different things.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan group of leading budget experts, has warned against anyone pinning all their hopes for fiscal restraint on a commission.

"In a politically charged environment, a commission is a great idea. However, the administration must have a ‘Plan B’ in case the commission does not succeed." 

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Rural/Metro Medical Services is launching a new service designed to help the homebound and seniors in case of emergency.

Many people will remember the television commercials in which an elderly woman pushes a button on a wearable monitor for help after falling. Rural/Metro’s HomeHelpLine service offers a similar service with a major difference: Calls come in to trained emergency medical dispatchers who respond using Rural/Metro’s network of local hospitals and ambulance services.

“When you call a LifeLine or other national providers, calls come through security companies or you’re really dealing with a call center that could be anywhere in the country,” says Jay Smith, public affairs manager. “Our dispatchers are medically trained EMTs and emergency dispatch. We’re local and we’re trained.”

Launched in mid-December, the service has signed up 60 customers so far with a goal of 500 by the end of Rural/Metro’s fiscal year in July. The service is currently available in Erie and Niagara counties, but plans call for extending service into all eight Western New York counties.

The company is targeting seniors and homebound individuals, as well as the children of such people who worry they can’t check in on their loved ones as often as they’d like. Smith says the company is relying on brand recognition and Rural/Metro’s reputation in the region to close the deal.

Additionally, the company is targeting individuals recovering from surgery; those with chronic conditions; and anyone who lives alone or spends several hours at home alone on a regular basis.

The service is available for $24.99 per month. That’s lower than some national services, enabled in part by Rural/Metro’s existing equipment and infrastructure that results in less overhead, Smith says.

Based in Scottsdale, Ariz., Rural/Metro Corp. (RURL) is a national provider of emergency services in 22 states.

Locally, the company has more than 550 employees, including 450 EMTs and paramedics, and a fleet of 90 emergency vehicles that responds to more than 100,000 calls every year.

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Mexico’s benchmark local bonds are poised for the biggest annual rally in four years after underperforming regional debt in 2009 as the economy recovers and the peso gains, Stone Harbor Investment Partners said.

The yield on Mexico’s 10 percent peso bond due in December 2024 may plunge about 40 basis points, or 0.40 percentage point, in 2010, to 7.80 percent, said Pablo Cisilino, who manages $11.5 billion in emerging-market assets at Stone Harbor in New York. That would be the biggest one-year drop since 2006.

Mexican domestic debt returned 7.7 percent last year, less than the 10 percent return posted by Latin American local bonds on average, according to JPMorgan Chase & Co.’s ELMI+ index. The region’s second-largest economy will grow 2.95 percent in 2010 after contracting 7 percent last year, the most since 1932, the median forecast of 19 economists in a Bloomberg survey shows.

“People were too pessimistic on the growth outlook for Mexico and very pessimistic about the peso,” Cisilino said. “Things are changing. They’re starting to come around.”

Daily volume in Mexican bonds traded in the secondary interbank market doubled to an average of 9.4 billion pesos in January’s first 14 days from the same period a year earlier, Citigroup Inc. said in a Jan. 19 report.

The peso is up 1.6 percent this year, the second-best performance against the dollar among 16 major currencies, behind South Korea’s Won, on prospects increased demand from the U.S., Mexico’s biggest export market, will help spur the recovery.

‘Strong Recovery’

The currency rose 0.6 percent to 12.8991 per U.S. dollar at 11:02 a.m. New York time. The yield on the 10 percent peso bond due in December 2024 fell four basis points, or 0.04 percentage point, to 8.18 percent, according to Banco Santander SA.

Miguel Messmacher, the chief economist at Mexico’s Finance Ministry, said in an interview Jan. 22 that there is a “very high” probability the country’s economy will grow more than 3 percent this year.

“Exports are showing a very strong recovery,” Messmacher said. “There are no doubts about the stability of external accounts in Mexico.”

Cisilino predicts the yield on Mexico’s 8.5 percent peso bonds maturing in 2018 may drop 50 basis points this year. The yield on the 2024 bonds slid 16 basis points in the past three months to 8.22 percent on Jan. 22, according to Banco Santander SA. The $135 million Stone Harbor Emerging Market Debt Fund that Cisilino helps manage returned 43 percent last year and is up 0.9 percent in 2010, according to data compiled by Bloomberg.

Borrowing Costs

Peso bonds may also rise because inflation is unlikely to pick up enough in the next six months for central bank Governor Agustin Carstens to raise borrowing costs, according to Alejandro Hernandez, who oversees 13.5 billion pesos ($1 billion) in fixed-income assets at Grupo Financiero Interacciones SA in Mexico City no fax payday loans.

“There could be a rally in the first half of the year” if the bank keeps its inflation forecast and the peso remains strong, Hernandez said.

Citigroup’s Mexico City-based Banamex unit, Banco Santander SA and Bank of Nova Scotia are among six banks that pushed back their forecast for interest-rate increases after Carstens, 51, said this month a stronger peso will curb inflation.

Mexican inflation has absorbed price increases “well,” Carstens said at a conference in Mexico City on Jan. 8. He said the increases are coming from the government raising taxes and state-controlled prices.

“The direct impact on prices is limited, and will be transitory and fade after a year,” Carstens said.

Rate Forecasts

Banamex revised its call for a rate rise to September from May while Santander, Spain-based Banco Santander pushed back its forecast to October from February. Toronto-based Scotiabank shifted its call to April from February. The median estimate of 21 economists in a Jan. 12 Banamex survey is for borrowing costs to start rising in July, four months later than they predicted last month.

Inflation may quicken more than the central bank forecasts, said Ricardo Aguilar, an economist at Invex Casa de Bolsa SA in Mexico City.

“I think they’ll raise forecasts,” said Aguilar, who predicts an inflation rate of 5.44 percent this year and says the bank may increase forecasts in July. “There are other goods and services that could suffer a greater impact than what the market and the bank predict.”

The central bank will probably keep its inflation forecasts unchanged in its quarterly report on Jan. 27, said Luis Flores, an economist at Ixe Grupo Financiero SA in Mexico City. Policy makers said last month the annual inflation rate may climb as high as 4.75 percent in the first three months of 2010, rising to 5 percent in the April-to-July period and 5.25 percent in the second half.

Inflation

The annual inflation rate was 4.17 percent in the first half of January.

“The idea is gaining ground little by little that the bank won’t move rates,” Flores said. “We’ll see more interest in the debt market.”

Mexico’s benchmark Bolsa stock index fell 4.4 percent to 30,830.91 last week. Cemex SAB, the largest cement maker in the Americas, declined 8.1 percent to 13.73 pesos last week. Gruma SAB, Mexico’s largest maker of corn flour for tortillas, retreated 4 percent to 27.4 pesos from 28.55.

The Mexican currency dropped 2.1 percent to 12.9744 pesos per dollar last week.

Yields on Mexico’s benchmark peso bond due 2024 rose seven basis points, or 0.07 percentage point, to 8.22 percent, according to Banco Santander SA.

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European finance chiefs said Greece may have to step up its efforts to tackle a national fiscal crisis that threatens to spread to other countries across the region.

“The Greek government is aware of the magnitude of the problems facing the country,” Luxembourg’s Jean-Claude Juncker told reporters in Brussels late yesterday after leading a meeting of euro-area finance ministers that discussed Greece’s budget plan. “The measures are a step in the right direction. We’ll have to see whether they’re enough.”

Greece last week presented its plan to push down a budget deficit that is still more than four times the European Union limit of 3 percent of gross domestic product. European Central Bank President Jean-Claude Trichet on Jan. 14 turned up the pressure on Greece, saying no nation can expect any “special treatment” after rating downgrades sparked a rout in Greece’s bonds in December and fueled concerns about default.

The Greek government’s latest proposals call for about 10 billion euros ($14.4 billion) of spending cuts and revenue increases this year to bring the budget shortfall from 12.7 percent of output to 8.7 percent by year end.

“The Greek plan leans heavily on the income side,” Dutch Finance Minister Wouter Bos said after yesterday’s meeting. “It leans heavily on one-time measures,” he said, adding that the program “needs to be more substantial.”

More-Reliable Statistics

The government in Athens presented a “very ambitious” budget-cutting program, Greek Finance Minister George Papaconstantinou told reporters yesterday. Greek officials also pledged to provide more-reliable statistics after the EU said earlier this month that the country’s data contained “severe irregularities.”

While the Greek government still has “difficult work to do,” German Finance Minister Wolfgang Schaeuble said the “serious reforms made to their statistics will help detect and avoid more problems like this in the future.” Bos said a “strong exercise” is required to make Greek data “reliable again.”

Juncker, who serves as Luxembourg’s premier and treasury minister, won a new term as head of the so-called eurogroup at yesterday’s meeting. He was unanimously appointed to a fresh term of two and half years under the Lisbon Treaty, which came into force in December.

The finance chiefs delayed until next month a decision on who will succeed Lucas Papademos as vice president of the European Central Bank, Juncker said. Luxembourg central bank chief Yves Mersch, his Portuguese counterpart Vitor Constancio and ECB Banking Supervision Committee Chairman Peter Praet are the three candidates being considered for the post.

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Tiger Woods’ much-publicized marital problems have started to cost him money. But they’re probably going to hurt the pro golf tour, and its various sponsors and broadcasters, even more.

At the very least, Woods could lose significant earnings from the tour. In 2009, he was the sport’s top money winner with purses totaling $10.5 million.

Sports marketing consultant Marc Ganis said that Woods’ estimated $1 billion in lifetime earnings on and off the course mean his finances are completely secure, even if he has to pay a large divorce settlement. He said the bigger hit could be for the rest of his sport.

"The golf industry needs Woods far more today than he needs the golf industry," said Ganis.

The PGA Tour issued its own statement Friday saying it supported Woods’ decision to take a leave. "We look forward to Tiger’s return to the PGA Tour when he determines the time is right for him," the statement said.

Ty Votaw, executive vice president of the PGA Tour, said the tour couldn’t speculate on the economic impact of Woods’ absence because the length of his leave isn’t known yet.

He said final financial figures from the 2009 season are not yet available, but that they will show a decrease from the record $124 million the tour donated to charities in 2008, a close approximation of the tour’s profit. He attributed the decline to the recession.

David Carter, executive director of the Sports Business Institute at the University of Southern California, said losing Woods comes at a bad time for the PGA, given the bite the recession has put on sponsorships.

"The PGA is just now fully appreciating what the financial fallout may be," he said. "Its fallout may last for years."

Viewership for golf tournaments is likely to plunge as long as he stays off the tour. A study by rating firm Nielsen a year ago, when Woods was returning from a six-month injury rehabilitation, found that ratings for tournaments he missed in 2008 after playing them in 2007 were down an average of 47%.

Even the major tournaments are likely to take a hit in their television audience if he misses them. Nielsen found that viewership for the final day of the Masters fell 20% in the years that Woods did not win the most watched tournament.

Neal Pilson, a sports broadcasting consultant who used to run CBS Sports, said the market for ads on this year’s tournaments was soft even before Woods’ problems burst into view. "Now everyone is in a wait-and- see mode," he said.

Most of the tournaments have multi-year contract deals, but networks might need to offer additional ad time to advertisers if the ratings plunge as much as feared, said Pilson. But he said the market won’t collapse altogether, given the fact that the average golf viewer is more affluent than the fans of many other sports.

"We did sell golf before Tiger showed up. But just as there was a Michael Jordan bubble when he was winning championships with the Bulls, there has been a Tiger bubble in golf ratings," he said.

But Ganis said even after Woods returns networks might be less willing to sign new deals for the second-tier tournaments due to losses they might suffer during his absence.

But television deals are only part of the revenue stream for the PGA. It also depends heavily on sponsorship dollars cash till payday. He said Woods’ problems give sponsors one more reason to question the money they’ll spend on golf tournaments.

"They have to try to calibrate what their spending will be in the sport at a time when marketing budgets are very hard to justify," said Carter.

While some tournaments have gone out of business in the last two years, they have generally been replaced by new tournaments, including one which Woods himself hosts along with AT&T (T, Fortune 500), one of his sponsors.

Woods’ sponsors pull back

But the tour isn’t the only one that could lose sponsors. The bad publicity about his admitted infidelity could also cost Woods some of his own sponsorship deals down the road.

The first golf shoe to drop came Sunday when business consultant Accenture, which had previously made Woods the focus of its marketing campaign, announced it would no longer use him because "the company has determined that he is no longer the right representative for its advertising."

But Accenture did not respond to questions about whether it would have to continue to pay Woods under terms of his contract. Experts in the field say that while sponsors are likely to keep their Tiger Woods commercials off the air while he takes his leave from the game, most will continue to pay him the millions owed under those contracts.

The loss of sponsorship money in the future is inevitable given the damage done to the Woods image in the last couple of weeks.

"He probably won’t have to take less from the sponsors he keeps," said Ganis. "He’s made a lot of money for those guys. But he’ll probably have fewer sponsors in the future as these deals come up for renewal."

He said he thinks the deals with AT&T (T, Fortune 500), PepsiCo’s (PEP, Fortune 500) Gatorade brand and Procter & Gamble’s (PG, Fortune 500) Gillette are the deals most at risk. AT&T issued a statement over the weekend that it is "presently evaluating our ongoing relationship with him."

But Ganis said Woods is certain to keep at least a couple of his top sponsorship deals — including his biggest at Nike (NKE, Fortune 500), reported to be worth $40 million.

"There was no Nike Golf before Tiger. Nike’s not going anywhere," he said. "Neither is (video game maker) Electronic Arts."

Nike issued a statement saying that Woods and his family has "Nike’s full support," and that it looks forward to his return to playing. Nike Golf suffered a $77 million, or 11%, revenue decline in the fiscal year ended May 31, which it attributed to the recession cutting into discretionary spending, even as the company’s overall revenue rose 3%.

EA (ERTS) also issued a statement supporting Woods Friday, stating "At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged."

Gillette’s statement over the weekend did not speak of its long-term plans for its deal with Woods, saying only "As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs."

Gatorade did not respond to requests for comments Monday. 

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