Finance & Business World

Europe won modest respite from its debt crisis Wednesday as Germany and Portugal borrowed with relative ease ahead of a hazard-filled few weeks for the 17 nations that use the euro.

But Greece’s new prime minister warned that his debt-crippled country has only three months to come up with new reforms so his country can stay in the eurozone and avoid a potential default _ a reminder of how the crisis can flare up at any time. And the news that a major Italian bank had to offer an unexpectedly large discount to raise new capital showed just how wary investors are of Europe’s shaky banks.

So far this year, markets have pushed concerns about Europe to one side, especially as countries have managed to raise the money they need.

Germany, the biggest contributor in Europe’s bailouts, managed to sell euro4.06 billion ($5.3 billion) in its benchmark ten-year bonds Wednesday at an average yield of 1.93 percent, down on the previous 1.98 percent it had to pay. And Portugal, which was bailed out last April, paid a markedly lower interest rate to borrow euro1 billion ($1.3 billion) in three-month treasury bills.

But Italian bank UniCredit saw its share price tumble over 10 percent on the news it was selling new shares at a large 69 percent discount to Tuesday’s closing price. UniCredit is trying to raise euro7.5 billion ($9.8 billion) to meet new European requirements for banks to thicken their financial cushions against possible losses.

Banks are an integral part of the debt crisis because they hold government bonds. A default or steep fall in the value of government bonds could inflict heavy losses on banks and choke off credit to the European economy. That’s why the regulatory authorities want Europe’s banks to raise their buffers by euro115 billion ($150 billion) over the next few months.

The German and Portuguese auctions come ahead of severe tests for eurozone leaders as they try to navigate their way out of a crisis over too much debt in some countries.

Eurozone governments are struggling to convince financial markets that indebted governments will not default and should be able to borrow at affordable rates to repay debts as they come due. Greece, Ireland and Portugal have needed bailouts, while much larger Italy and Spain have seen their borrowing costs rise ominously.

Italy, the recent focus of the crisis, must borrow to cover euro53 billion ($69 billion) in expiring debt in the first quarter alone in debt auctions beginning Jan. 13. That will test whether the government of new Prime Minister Mario Monti is making progress in regaining market confidence through budget cuts and efforts to improve weak economic growth.

Further trouble could come from a slowing eurozone economy that may already have shrunk in the fourth quarter.

Additionally, Greece must also win approval of a second, euro130 billion ($169 billion) bailout, without which it can’t pay its debts, and strike a deal with creditors for a 50 percent reduction in their holdings of Greek debt to try to put the country back on its feet.

Greek Prime Minister Lucas Papademos warned union leaders and business groups Wednesday that decisions made in the next few weeks, ahead of a new visit by international debt inspectors, will determine whether Greece remains in the 17-nation eurozone or reverts to its pre-2002 currency, the drachma.

Portugal looks like it’s in better shape at the moment. The rate it had to pay at its auction fell to an eight-month low of 4.346 percent. Although Portugal cannot tap long-term bond markets at a reasonable price, it has sought to maintain a market presence by issuing shorter-term debt.

Analysts said the improvement may represent a sign that Portugal is regaining the markets’ confidence as it carries out spending cuts and revenue increases in return for its euro78 billion ($102 billion) bailout.

“There’s been an improvement in the risk perception of Portuguese debt, which has driven rates down” said Filipe Silva, debt manager at Portuguese financial group Banco Carregosa. “Now we just need to see whether it holds.”

Germany’s auction was better than one in November which raised fears that Europe’s debt crisis was spiraling out of control when the government sold only 65 percent of debt on offer.

Still, there was some concern over the amount of German bunds investors actually wanted Wednesday. Bids for euro5.14 billion ($6.7 billion) worth of bonds exceeded the full amount on offer of euro5 billion ($6.5 billion), but only barely, counting euro943 million ($1.23 billion) the government kept back for secondary market operations.

“Yes, it was covered, so that’s a relief,” said Marc Ostwald, a markets strategist at Monument Securities. “On the other hand, the coverage was poor.”

Germany can borrow cheaply because its economy is the strongest in the eurozone but concerns about the costs of bailing out fellow eurozone nations have raised questions about Germany’s finances as well.

Wednesday’s auction results follow a recent trend. On Tuesday, the Netherlands saw its borrowing rates fell to near zero percent in a pair of short-term auctions, in a sign that investors are searching out what they consider to be Europe’s safer assets.

Italy also sold large chunks of debt last week and analysts say the run of smooth auctions may be largely due to a massive euro489 billion ($636 billion) infusion of cheap, 3-year credit to eurozone banks by the European Central Bank.

Some of that cheap money may be being used by some banks to buy higher-yielding short-term debt. Italy’s longer-term borrowing rate in the markets remain at dangerously elevated levels near 7 percent, a point that prompted Greece, Ireland and Portugal to seek bailouts.

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The Obama administration will ask Congress to increase federal borrowing authority by $1.2 trillion as the nation approaches the debt limit set by law, according to a Treasury Department official.

The White House will send the request to Congress on Dec. 30, the day the debt is projected to rise to within $100 billion of the $15.194 trillion limit, the Treasury official told reporters today on condition of anonymity.

Congress will be notified under the terms of a deal to raise the limit worked out on Aug. 2 after months of wrangling between the administration and Republican lawmakers. Three days later, Standard & Poor

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Comedian and commentator Rick Mercer’s distinct take on Canadian politics and social issues can be caught on the Rick Mercer Report every Tuesday at 8 p.m. on CBC. In our series on the financial habits of notable Canadians Mercer told the Toronto Star’s Emily Mathieu about his $19,500 row house, why trying to make a living in show business is a gamble and why entertainers, thanks to the nature of their industry, tend not to retire.

How did your childhood influence your attitude toward money?

My parents were pathological about living within their means and there simply wasn’t a lot of money. So as a family there were no trips to Florida but lots of camping trips, the driveway wasn’t paved (still isn’t) but there was money for music lessons, the house is small and had one bathroom for a family of six but it was paid for.

For people who had relatively little money my parents didn’t actually stress about money because they avoided debt. They certainly made a lot of sacrifices. As kids we knew that they would help out with post secondary education, for example, but the entire time I was growing up I doubt my father ever paid more than a thousand dollars for a truck, and he would paint them with a brush. I can’t actually think of anything that my father needed that he bought new.

Even now if I mention to Dad that I went to Canadian Tire and bought a lawn mower I know what he is thinking “Hmm, bought a new lawn mower, fool and his money”.

What was the best financial advice they passed on?

My father said never loan money to friends or at least never loan money and expect it back. If you are in a position to help a friend that’s great and you are in fact obligated to, but don’t expect it back. He was adamant that allowing a friendship to be damaged because of bad feelings around money is inexcusable.

What was your first big purchase?

My first house. I was 19 years old, I paid $19,500 for a very skinny row house, attached on both sides, attached to 20 other houses and a Chinese take out. The house was essentially condemned; it came with a huge binder of work orders from the city of St. John’s.

I was the cliché of a starving actor and actually couldn’t afford to live in an apartment. Owning the house allowed me to live on my own and concentrate on working in comedy. My cousin and a few friends rented rooms for $75 bucks a month. I financed it with $4,000 down which was money that my parents had planned to give me for university. I had payments of $300 dollars a month on a $15,000 dollar bank loan. The down payment from my parents was a hand up that changed my life.

How do you prefer to pay, cash, card or debit?

I have no preference no fax payday loans. But I’m careful to pay off my cards monthly. Which I understand is a luxury.

Do you bank online?

Very little.

What has been your savviest investment?

Canadian Banks. Boring old Canadian Banks back in the early 90s.

Have you learned any financial lessons the hard way?

Yes I have and the tip I would give for anyone who is playing around in the market is to avoid people with hot tips.

What advice would you give to people about to enter the entertainment industry?

It depends on what area. There are lots of very good stable jobs in the entertainment industry. It’s an exciting industry. That said if a young person says they want to be a professional actor or musician I generally say don’t. A person doesn’t become an actor, a musician or a dancer because other people encouraged them, they do it because they have to, it is in their blood and they can’t imagine doing anything else.

If you can imagine doing something else you should probably concentrate on that. Being an artist or a performer is a very difficult life, there is no job security. In show business you can’t make a living but you can make a killing, it is a big gamble.

Was there a moment in your career where you felt you had achieved financial security?

Yes and no I don’t care to elaborate.

Do you worry about retirement?

I don’t worry about retirement but I do worry about not working. One of the great things about being an actor or a writer is you never have to stop working. I look forward to playing a crotchety old man.

But all actors worry about not working. When I bump into Gordon Pinsent he will talk about work, where the next job is, etc. He’s worked more than almost any actor alive, he could have retired comfortably decades ago but he is an actor and that’s what actors do, they worry about their next job.

Can money buy happiness?

It certainly doesn’t hurt. Anyone who says otherwise is lying. Money can mean not having to worry about paying the bills and there is no doubt about it for the vast majority of people that is the number one cause of stress in their life. But it all comes back to living within your means.

I’m sure there are people with massive salaries and five million dollar cottages in Muskoka they visit for two weeks a year stressing about bills at the end of the month. So one thing we do know is money can’t buy smarts.

Are money and success the same thing?

Absolutely not.

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India’s Cabinet decided Thursday to allow more direct foreign investment in the nation’s huge retail industry, a move that could strengthen the country’s food supply chain and open India to giant global retailers such as Wal-Mart.

The Cabinet approved 51 percent foreign direct investment in multibrand retail and increased the FDI cap in single-brand retail to 100 percent despite resistance from both allies and opposition parties.

India currently allows 51 percent foreign investment in single-brand retailers and 100 percent for wholesale operations.

Top retailers like Wal-Mart, Carrefour, Tesco and IKEA have long lobbied to free the policy further. Foreign multibrand retailers have Indian partners in wholesale operations now but have no retail presence in the country of 1.2 billion people.

The spokesman for the ruling Congress party, Abhishek Manu Singhvi called the decision “centrist and reasonable.” He was speaking to NDTV news channel.

The main opposition, the rightwing Bharatiya Janata Party, decried the move.

“The government has clearly bowed to international pressure,” Chandan Mitra, a spokesman told the same TV channel.

Wal-Mart, British-based Tesco PLC and French-based retailer Carrefour welcomed the decision.

“We believe that allowing 51 percent FDI in multi-brand retail is a first important step,” Raj Jain, president of Walmart India, said in an e-mailed statement. “However, we will need to study the conditions and the finer details of the new policy and the impact that it will have on our ability to do business in India,” the statement added.

“Allowing foreign direct investment in retail would be good news for Indian consumers and businesses, and we await further details on any conditions,” Tesco said in its statement.

Tesco currently has a franchise arrangement with Tata Group’s Star Bazaar hypermarket chain, supplying merchandies to outlets in India.

Carrefour opened a New Delhi store last year and would not say what explansion plans might lie ahead.

“This legal evolution should contribute to modernize the Indian food supply chain and to fight against food inflation for the benefit of Indian customers,” its statement said. It added the decision would help India’s farmers and the nation’s general economic development.

Ashish Sanyal, managing director of AMP Retail Services Pvt. Ltd, said, “It’s a good decision that will benefit everyone.” He is a consultant who helps retailers enter India.

More details on the Cabinet decision were not immediately available.

India’s $400 billion retail market is the nation’s second-largest employer, after agriculture, according to consulting firm Deloitte.

Advocates see the move as a way to strengthen India’s almost absent food supply chain _ which is so beset by spoilage, poor infrastructure, hoarding and middlemen that the government estimates some 30 percent of produce rots in a nation with soaring food costs and tens of millions who go to bed hungry each night.

If companies like Wal-Mart and Tesco are allowed to open shops of their own, they may invest billions in improving farming techniques and getting produce into stores more efficiently, bringing down food inflation _ which has averaged 10.5 percent over the last year _ and possibly improving rural incomes.

The Ministry of Commerce says it will cost 76.9 billion rupees ($1.7 billion) to build the additional 35 million metric tons of food storage India needs.

In a July paper, it suggested that loosening restrictions on foreign investment in India’s retail sector could be the best way to get more storage space built.

Yet the country has struggled to find consensus because of concerns about what it would mean millions of small shopkeepers as well as the poor.

Sanyal said small businesses had nothing to fear.

“At the end of the day this is like the high tide. All boats will rise. We will learn from the big retailers.”

Political deadlock on long-promised reforms like this has helped cool foreign investor interest in India. Policymakers are under acute pressure to find ways to attract foreign currency to help strengthen the rupee, which hit an all-time low against the dollar this week.

Traders say the central bank has been buying rupees in recent days but those measures are unlikely to reverse the currency’s plunge absent more far-sighted policy reform.

In July, this year a government committee studying multi-brand retail had cleared the idea and suggested $100 million as minimum investment for foreign companies.

The discussions on opening up India’s retail sector have been going on for 10 years.

“There is a limit to how much time we can spend on a decision,” Singhvi said.

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Walmart has already posted maps online showing where low-priced laptops and Xbox 360 consoles will be placed throughout its stores on Black Friday.

Old Navy is handing out a limited number of free digital cameras to customers who spend at least $40. And Best Buy is playing the movie “Harry Potter and the Deathly Hallows: Part 2″ on a big screen and offering free kettle corn and energy drinks to folks waiting in line outside of its Fairview Heights store.

And yes, many stores and shopping malls are opening earlier than ever

London officials attached eviction notices to protest tents outside St. Paul’s Cathedral on Wednesday, asking the demonstrators to remove them within a day or face legal action.

The notices posted by the City of London Corporation said the protest camp was “an unlawful obstruction” of a sidewalk, and asked protesters to take down “all tents and other structures” by 6 p.m. (1800 GMT, 1 p.m. EST) Thursday.

The cathedral and the corporation had suspended legal action to remove the camp two weeks ago, and offered the protesters a deal to allow them to stay until the new year if they then agreed to leave. But the corporation said Tuesday that talks had failed and it was resuming legal action.

If the tents are not removed, the corporation says it will go to court seeking an eviction notice _ a process that could take weeks.

More than 200 tents have been pitched outside the iconic church since Oct. 15 in a protest against capitalist excess inspired by New York’s Occupy Wall Street, and the protesters said they would resist attempts to move them.

“We will contest it,” spokeswoman Naomi Colvin said. “We will be speaking to our legal team and we will be fighting it.”

The governing Chapter of St. Paul’s Cathedral said in a statement that it recognized “the local authority’s statutory right to proceed with the action it has today,” but would continue to meet with protesters in a bid to find a peaceful solution.

Police in the U.S. have been moving in to clear away similar protests, breaking up camps in Portland, Oregon, on Sunday, Oakland, California, on Monday and on Tuesday in New York, where about 200 people were arrested.

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Kevin O

In a sharp challenge to the GOP, President Barack Obama proposed paying for his costly new jobs plan Monday with tax hikes that Republicans have already rejected, and he accused them of political motives if they still refuse to go along.

“The only thing that’s stopping it is politics,” Obama declared.

The president’s proposal drew criticism from House Speaker John Boehner, who’d previously responded in cautious but somewhat receptive tones to the $447 billion jobs plan made up of tax cuts and new spending that Obama first proposed in an address to Congress last Thursday.

“It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit,” Boehner spokesman Brendan Buck said.

The biggest piece of the payment plan would raise about $400 billion by eliminating certain deductions, including on charitable contributions, that can be claimed by wealthy taxpayers. Obama has proposed that in the past _ to help pay for his health care overhaul, for example _ and it’s been shot down by Republican lawmakers along with some Democrats.

Yet by daring Republicans anew to reject tax hikes on the rich Obama could gain a talking point as the 2012 presidential campaign moves forward, if not a legislative victory.

At a Rose Garden event Monday, Obama brandished his jobs bill in the air and surrounded himself with police officers, firefighters, teachers, construction workers and others he said would be helped by it. Adopting a newly combative tone that’s been welcomed by dispirited Democrats, Obama said he was sending the bill to Capitol Hill and demanded immediate action.

“This is the bill that Congress needs to pass. No games. No politics. No delays,” Obama said.

“Instead of just talking about America’s job creators, let’s actually do something for America’s job creators.”

Obama told of reading a quotation in a newspaper article from a Republican congressional aide who questioned why Republicans should work with Obama since the result might just be to help the president politically. “That was very explicit,” Obama said.

Buck, the Boehner spokesman, said the anonymous quote cited by the president didn’t reflect the view of Republican leadership.

And even as Obama was accusing Republicans of playing politics, he and his Democratic allies were marshaling an aggressive political response of their own.

Obama was traveling to Boehner’s home state of Ohio Tuesday to promote his jobs plan, and following that with a trip Wednesday to North Carolina, a traditionally Republican state he won in 2008.

He was getting back-up from the Democratic National Committee, which announced a television ad campaign starting Monday to promote Obama’s jobs plans in key swing and early-voting states and to call on voters to pressure their lawmakers for support. The ads urge viewers to “Read it. Fight for it. … Pass the President’s Jobs Plan.”

The back-and-forth was taking on elements of a political campaign, with high stakes for both sides as Obama heads into his re-election fight with the economy stalled, unemployment stuck at 9.1 percent and polls showing deep public unhappiness with his leadership on the economy.

His jobs package would combine tax cuts for workers and employers by reducing the Social Security payroll tax, with spending elements including more money to hire teachers, rebuild schools and pay unemployment benefits. There are also tax credits to encourage businesses to hire veterans and the long-term unemployed.

The payment method the White House announced Monday would consist of:

_$405 billion from limiting the itemized deductions for charitable contributions and other deductions that can be taken by individuals making over $200,000 a year and families making over $250,000;

_$41 billion from closing loopholes for oil and gas companies;

_$18 billion from requiring fund managers to pay higher taxes on certain income;

_$3 billion from changing the tax treatment of corporate jets.

White House Budget Director Jacob Lew said that Obama will also include those tax proposals in a broader debt-cutting package he plans to submit next week to a congressional “supercommittee” charged with finding $1.2 trillion in savings later this year. He said that the supercommittee would have the option of accepting the payment mechanisms for the jobs bill proposed by Obama, or proposing new ones.

Republicans have indicated they’re receptive to supporting Obama’s proposed payroll tax cut and finding a way to extend unemployment benefits, though many have rejected Obama’s planned new spending. Obama’s new proposal Monday to pay for it all by raising taxes without any proposals to cut spending is unlikely to win him any new GOP support for any element of his plan.

“I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators that we’re actually counting on to reduce unemployment,” said House Majority Leader Eric Cantor, R-Va.

The new DNC ads are airing in: Denver; Tampa and Orlando, Fla.; Des Moines, Iowa; Las Vegas; Manchester, N.H.; Raleigh and Charlotte, N.C.; Columbus and Cleveland, Ohio and Norfolk, Richmond and Roanoke, Va.; as well as Washington, D.C.

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Associated Press writers Julie Pace and Darlene Superville contributed to this report.

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Steve Jobs is one of the greatest entrepreneurs of the past century, founding or co-founding Apple, which revolutionized personal computing (iMac, iPad), consumer electronics (iPod, iTunes) and telephony (iPhone); Pixar, which did the same for animated motion pictures; and several other firms.

Jobs

Missouri’s tough laws discourage Ralcorp takeover, report says

Unless Ralcorp Holdings’ shows some willingness to come to the table to negotiate a sale, ConAgra Foods won’t increase its $94 a share offer because of Missouri’s stringent laws on hostile takeovers, Reuters reported Tuesday, citing sources close to the matter.

Omaha, Neb payday loans in 1 hour.-based ConAgra has made several attempts to buy the St. Louis-based company this year only to be rebuffed by Ralcorp’s board of directors. Ralcorp’s stock closed Tuesday at $81.83 a share, signaling that shareholders also don’t have much faith a sale will proceed. (Lisa Brown)

U.S. plans to nix hundreds of rules