My finance view

Finance ministers from the 17 euro countries agreed Friday to pay Greece its next batch of bailout loans, avoiding a potentially disastrous default, and moved closer to reducing the country’s massive debt burden.

But Greece’s debts are only one piece of Europe’s economic puzzle. The ministers meeting in Brussels were also struggling with two more complicated _ and arguably more important _ issues: boosting the firepower of the eurozone’s euro440 billion ($607 billion) bailout fund to keep the crisis from spreading and forcing weak banks to increase their capital buffers as a defense against market turmoil.

A European Union official said ministers had made progress on strengthening the banks, and that a plan should be ready for a summit of EU leaders Sunday. He spoke on condition of anonymity to discuss confidential negotiations.

However, more work remained to be done on Greece and the bailout fund, the European Financial Stability Facility. Decisions on those two fronts were not expected until a second summit on Wednesday.

Greek Finance Minister Evangelos Venizelos welcomed the news that Athens would get the next euro8 billion ($11 billion) installment, calling it a “positive step.” A day earlier, Greek lawmakers had approved new, deeply contentious austerity measures to get the money.

The loans, which still need the approval of the International Monetary Fund, should be delivered during the first half of November. The money will keep Greece afloat for a little longer, but most economists agree that the country also needs a substantial cut to its debt load.

The findings of a report from Greece’s international debt inspectors piled more pressure on European finance chiefs to find a solution for the country, whose troubles kicked off the crisis almost two years ago.

According to the report, Athens won’t be able to raise money on financial markets until 2021 unless it is allowed to write off more of its debt load. If that doesn’t happen, the country would need hundreds of billions of euros in new bailout loans.

A person familiar with the report said a tentative deal reached with banks in July to give Greece easier terms on its bonds would still leave it with a huge debt load of 152 percent of economic output in 2020. The person spoke on condition of anonymity because the report is confidential.

Germany is pushing for a revision of the July deal to have Greece’s private creditors take bigger losses of 50 percent to 60 percent and reduce its debt to some 120 percent of GDP by 2020.

The EU official said ministers had moved closer to Germany’s position on steeper cuts to Greece’s debt, but some financially weaker countries were still worried that could destabilize their markets and push their borrowing rates higher. “I wouldn’t say there’s a consensus but something close to that,” he said.

The eurozone needs to find a way to ensure that larger countries like Spain and Italy don’t get engulfed in the debt crisis, as they would be too expensive to bail out.

Increasing the firepower of the bailout fund, the European Financial Stability Facility, is meant to offer that protection, but Germany and France still disagree over how to do that.

Ministers failed to make much progress on that front Friday night and broke up the meeting shortly after starting discussions on the EFSF.

A German official, speaking on condition of anonymity, said that a combination of two options had crystallized as the most likely solution to giving the fund more leverage.

The first would involve the bailout fund acting as an insurer for bond issues from wobbly countries like Italy. That would essentially compensate investors against a first round of potential losses and keep governments’ borrowing costs in check.

In addition, the International Monetary Fund _ which has already provided about a third of the bailout cash for Greece, Ireland and Portugal _ would supply other stragglers with precautionary credit lines to make sure they have ready access to cheap money.

Last weekend, at a meeting in Paris, the finance chiefs from the Group of 20 leading economies opened the door for a larger role by the IMF, but only if the eurozone first does its part.

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OTTAWA — Statistics Canada says the country’s annual inflation rate edged up a notch to 3.2 per cent last month as the cost of most consumer goods the agency tracks cost more from a year ago.

On a month-to-month basis, consumer prices rose two-tenths of a cent between August and September.

The increases were moderate, but if there was an alarming signal in the report it was that the Bank of Canada’s core inflation index shot up three-tenths to 2.2 per cent.

That’s the largest annual gain since December 2008, and puts core inflation above the central bank’s two per cent target for the first time since February 2010.

The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago.

But the agency says other items also cost more, including shelter, the cost of transportation, car insurance, recreation and education, alcohol and tobacco, health and personal care and clothing and shoes.

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Young Innovations Inc. raised profits in the third quarter despite sales that were little changed.The Earth City-based developer and maker of dental equipment reported a net income of $4.1 million, or 51 cents a share, compared to $3 Internet Payday loans.9 million, or 49 cents, a year ago. Sales edged down 0.9 percent to $26.2 million.

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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.

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Stocks rose in early trading Thursday on strong retail sales news and encouraging reports about corporate profits. The Dow Jones industrial average was headed for its best week over the last five.

Retail sales increased 1.1 percent in September, the biggest gain in seven months and twice what economists projected. Retail sales are a key barometer of consumer spending, the biggest contributor to economic activity.

Google Inc. surged more than 6 percent after reporting that its online advertising and search dominance helped third-quarter profits rise 26 percent.

The Dow Jones industrial average rose 101 points, or 0.9 percent, to 11,579 at 10:02 a.m. Eastern time. The Standard & Poor’s 500 index rose 13, or 1.1 percent, to 1,218. The Nasdaq composite index rose 32, or 1.2 percent, to 2,653.

The Dow is up 4.2 percent for the week, putting it on track for its best week since the week ending Sept. 16.

Apple Inc.’s new iPhone goes on sale today. Record-setting early orders for the iPhone 4S showed why the company has thrived despite the weak economy. Apple shares rose more than 2 percent before the market opened.

European markets extended an eight-day rally despite an overnight downgrade of Spain by Standard & Poor’s and warnings from Fitch about big banks. Food and soap company Unilever PLC announced a major acquisition, and Swiss agrochemicals firm Syngenta reported strong third-quarter sales.

Retail sales are the government’s first look at consumer spending each month. Consumers account for 70 percent of economic activity. If they cut back, a recession is more likely. When they spend more, economic growth is more likely.

Google reported late Thursday that its third-quarter revenue was one-third higher than last year. It was Google’s fourth consecutive quarter of year-over-year revenue growth. Google is doing well because of the reach of its search engine and the effectiveness of its ads.

The government also said Thursday that businesses added to their stockpiles for the 20th consecutive month while sales rose for a third straight month. The increase suggests businesses remained confident enough to keep stocking their shelves.

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Discount chain 99 Cents Only Stores Inc. said Tuesday that it has agreed to be acquired for about $1.6 billion by private equity firm Ares Management LLC and the Canada Pension Plan Investment Board, the latest big investors to bet on the increasingly popular dollar store industry.

The $22 per share cash offer is 7.4 percent higher than the retailer’s shares finished at on Monday. But it is a 32 percent premium over the company’s closing price on March 10, the day before 99 Cents Only disclosed that it had received an acquisition offer from a different private equity firm.

Dollar store operators like 99 Cents Only have thrived in the weak economy. Shoppers have turned to the discounters for deals on necessities like food and cleaning supplies, and for bargains on toys and other household goods one hour payday loan.

99 Cents Only, based in Commerce, Calif., operates 289 stores in the Western U.S.

99 Cents must have its deal approved by its shareholders. The retailer’s board is recommending approval. And members of the Schiffer-Gold family, which founded the company, said in a statement that they support the deal. They will hold a significant minority stake after the deal is complete.

The deal is expected to close in the first quarter of next year.

Shares of the company rose 90 cents, or 4.4 percent, to close at $21.39 Tuesday.

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BlackBerry users experienced technical glitches with their smartphones for a second day after an unexplained problem cut off Internet and messaging services Europe, the Middle East and Africa.

The new round of troubles on Tuesday involved the BlackBerry

With NATO warplanes circling overhead, revolutionary fighters battled block by block Saturday as snipers rained fire from rooftops in fierce street fighting in Moammar Gadhafi’s hometown _ the most important remaining bastion of support for the fugitive leader.

The battle for Sirte is crucial because Libya’s new leaders have promised to declare liberation after it is captured even though fighting continues elsewhere and Gadhafi remains on the run. That will allow them to move forward with setting a timeline for elections and establishing normalcy in the oil-rich North African nation.

Revolutionary forces launched a major attack on Friday, pushing into the Mediterranean coastal city from the west, east and south after a three week siege from the outskirts in which they said they were giving civilians time to flee.

Gadhafi forces also remain entrenched in the central city of Bani Walid, but the transitional leaders say they will declare liberation without it because Sirte’s fall will give them control over all seaports and harbors.

British Defense Secretary Liam Fox pledged to keep up NATO airstrikes even after Sirte’s fall, saying the international military action would continue as long as the remnants of the regime pose a risk to the people of Libya.

“We have a message for those who are still fighting for Gadhafi that the game is over, you have been rejected by the people of Libya,” he told reporters Saturday in Tripoli.

Anti-Gadhafi forces met strong resistance as they pushed to within less than half a mile (kilometer) from loyalist fighters dug in around Sirte’s Ouagadougou convention center and Green Square in fierce street fighting in the heart of the city.

Libya’s de facto leader, Mustafa Abdul-Jalil, the head of the governing National Transitional Council, said the battle has been “ferocious,” with 15 revolutionary fighters killed and 180 wounded on Friday low interest rate personal loans.

“Our fighters today are still dealing with the snipers positioned on the high buildings and we sustained heavy casualties,” he said at a joint news conference in Tripoli with Fox and Italian Defense Secretary Ignazio La Russa.

Suleiman Ali, commander for revolutionary forces, said loyalist forces have been driven away from Ibn Sina Hospital where hundreds of civilians have sought refuge from the fighting.

A military spokesman in Tripoli, Abdel-Rahman Busin, said he expected the city to be declared free in the next 24 hours.

“They’ve pretty much taken the city and it’s just a few pockets of resistance,” he said, adding snipers were still posing a major threat.

NATO warplanes flew overhead but no strikes were immediately reported.

Abdul-Jalil called on the international community to help Libyans treat the wounded, saying they could deduct the cost from Libyan assets that were frozen under Gadhafi’s regime.

Sirte, 250 miles (400 kilometers) southeast of Tripoli, is key to the physical unity of the nation of some 6 million people, since it lies roughly in the center of the coastal plain where most Libyans live, blocking the easiest routes between east and west.

The international community has rallied around Libya’s efforts to move forward with forming a new government, with transitional leaders promising elections within eight months after liberation is declared.

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Forecasters say Ophelia has weakened from a hurricane to a tropical storm as it races toward the Avalon Peninsula of Newfoundland, Canada.

The National Hurricane Center in Miami said early Monday that Ophelia was lowered from a Category 1 storm, as its top sustained winds weakened to about 70 mph (110 kph). The storm was moving northeast at 43 mph (69 kph).

Ophelia was centered about 55 miles (85 kilometers) west-southwest of Cape Race, Newfoundland, and a tropical storm watch was in effect for Newfoundland’s Avalon Peninsula. The center says Ophelia is expected to continue to weaken, but still pack powerful winds.

Meanwhile, Tropical Storm Philippe was moving over the central Atlantic and is not expected to affect land.

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As Japan welcomes the first Boeing 787, the soon-to-be world’s largest carrier is patiently and anxiously waiting for its order.

Jeff Smisek, head of the parent company for United and Continental airlines, on Thursday said he was last told by Boeing that the first of the 50 aircraft ordered by the company will be delivered to have in service in the second half of 2012.

“We ordered that aircraft in December 2004. So I’ve been a very patient person,” said Smisek, the president and CEO of United Continental Holdings Inc.

The first Boeing 787 Dreamliner took off from Everett, Wash., on Tuesday morning and landed Wednesday in Tokyo, where All Nippon Airways is preparing the long-delayed aircraft for its inaugural commercial flight.

Chicago-based Boeing missed the initial May 2008 delivery target and had repeatedly delayed its introduction because of problems in development.

Despite the delays, Smisek called the wide-body jetliner “a spectacular and game-changing aircraft.”

The new jet is the first commercial airliner built using carbon fiber _ a strong, lightweight, high-tech plastic _ rather than the typical aluminum skin. It is quieter and uses about 20 percent less fuel than a comparably sized aluminum aircraft.

“That’s staggering,” Smisek said about the fuel savings. “If you substitute them for an existing aircraft, your profits will improve like that. It will also permit us to fly routes we couldn’t otherwise profitably fly. So it’s really a homerun.”

The 787s have an extended range and its cabin have bigger windows and larger overhead compartments. For improved passenger comfort, the humidity can be controlled and the air pressure during flights will be equivalent to an altitude of 6,000 feet instead of the conventional 8,000 feet.

“Customers will love flying in them,” he said. “So it’s good for us and great for the customer.”

United Continental will be the first North American carrier to receive the 787s. The only route the company has announced for the 787 is non-stop service between Houston and Auckland, New Zealand _ a route that the carrier had hoped to begin in November.

Smisek said 787s will mostly replace existing aircraft instead of adding capacity because, “I don’t see us growing our mainline fleet in any significant way under these current conditions.”

Airlines have ordered more than 800 of the planes that will compete with the Airbus A350. United Continental has ordered 25 of the Airbus aircraft.

Smisek is in Honolulu this week meeting with company employees. He spoke with reporters after delivering a keynote speech at the 2011 Hawaii Business Magazine Top 250 luncheon, recognizing the state’s leading companies.

The company, which brings in about 4 million visitors to Hawaii every year, continues to merge United and Continental airlines into what will be the world’s largest carrier. He said the company has reduced its net debt by $1.4 billion.

“I think we’re at the cusp of having an airline business in the United States that actually makes money (and) makes it consistently, sustainably, sufficiently.”

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