Finance & Business World

Thousands of Romanians, including teenage students who cut class, marched through their capital on Thursday to demand the resignation of their government for imposing harsh austerity measures in order to receive international loans for the nation’s battered economy.

It was one of the largest protests in recent times in Bucharest and came after a week of sometimes violent anti-government demonstrations.

As the march reached University Square, protesters blocked traffic and shouted what has become a trademark slogan aimed at President Traian Basescu: “Get out, you miserable dog.”

The square _ a focal point of recent protests _ is historically significant for Romanians because it was a centerpiece of the 1989 anti-communist revolution that led to Romania’s birth of democracy.

On Thursday, some protesters pretended to hang Basescu and his close political ally, Tourism and Regional Development Minister Elena Udrea, by stringing their dummies to gallows set up in the square.

“Resign!” and “Down with Basescu!” other protesters screamed.

Some 14-year-old students at a school located along the route of the march abandoned class to join the demonstration. “To prison with you!” the students yelled at their president.

Police said 7,000 attended the rally, while organizers claimed the crowd was far larger.

In 2009, Romania took a two-year euro20 billion ($27.5 billion) loan from the International Monetary Fund, the European Union and the World Bank as its economy shrank by 7.1 percent. It imposed harsh austerity measures under the agreement, reducing public wages by 25 percent and increasing taxes. Anger has mounted over the wage cuts, slashed benefits, higher taxes and widespread corruption.

On Thursday, Basescu made his first public appearance since the protests began a week ago in an address to ambassadors in Bucharest. He spoke about Iran, the Middle East, domestic reforms and the “Arab Spring,” but did not touch on the demonstrations or the anger over the state of Romania’s economy.

During the Bucharest rally, one protester who only identified himself as Tudor, a 43-year-old locksmith said: “We want decent salaries and pensions. We want change _ from the top to the bottom.”

Another protester, a 55-year-old nurse named Lorelei said, “We wouldn’t have needed to have austerity measures if our governments hadn’t stolen so much and bled us dry.” She said she has attended all this week’s anti-government rallies.

Three opposition parties organized Thursday’s march, with protesters arriving in the capital from all over the country. Opposition leaders and Romanian personalities addressed the crowd before the march.

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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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Jon Corzine’s three days of testimony on MF Global’s collapse offered little to satisfy lawmakers or clients who lost millions when the securities firm failed. Yet legal experts say Corzine helped himself by choosing words with care and articulating an explanation that’s hard to disprove.

Corzine, a Democratic former senator and governor of New Jersey, told three congressional panels that he never intended to “misuse” client money or order anyone else to do so. He said no reasonable person who worked with him could have concluded otherwise.

He also rebuffed an assertion that he knew about customer money that might have been transferred to a European affiliate just before MF Global collapsed. It could be hard to build a persuasive case that he did know, experts say.

“It’s remarkable how he really has narrowly walked that line _ to be able to communicate effectively while preserving his defenses,” said Jacob Frenkel, a former enforcement attorney with the Securities and Exchange Commission, one of the regulators investigating MF Global. “He could have hurt himself by testifying. That has not happened.”

About $1.2 billion was found to be missing from client accounts when MF Global failed on Oct. 31, becoming the eighth-largest bankruptcy in U.S. history. Much of the missing money belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from the fluctuating prices of commodities such as corn and wheat.

Brokers such as MF Global generally are required to keep customer money in separate accounts to protect it in case the company fails. MF Global apparently failed to do so. Congress, regulators and criminal investigators are looking into the case.

Those investigations, still in their early stages, will likely yield clearer answers about how client money came to be misused. For now, it remains a mystery.

“I think it was unrealistic for Congress to expect substantive answers to these questions, because no one is that naive,” Frenkel said. “That’s why these investigations are ongoing _ to figure out what happened to the money and who is responsible.”

Some of the lawmakers who questioned Corzine appeared to agree.

“If you did anything wrong, the criminal investigators will find that; I won’t,” said Massachusetts Rep. Michael Capuano, the top Democrat on the panel Corzine faced Thursday.

Corzine was careful to testify that he never “intended” for client money to be misused. That’s because intent is a key requirement of criminal prosecution, Frenkel said.

“If someone intended to violate (rules requiring the separation of client accounts), then the conduct is criminal,” he said. “If it was unintentional, we are only in the zone of civil enforcement, if that.”

If Corzine or others at MF Global are found guilty of civil violations, they might have to pay financial penalties.

One regulator raised the possibility Thursday that crimes were committed. As a primary dealer, MF Global made trades with the Federal Reserve Bank of New York. As the firm’s finances worsened in its final weeks, the New York Fed required MF Global to put aside more money to cover the Fed’s losses in case the firm failed.

New York Fed General Counsel Thomas Baxter testified that MF Global gave “express representation in writing” that the money it put up was not from client accounts.

“If that representation turns out to be false, a federal criminal offense has been committed,” Baxter said.

Michael Greenberger, a professor at the University of Maryland School of Law and a former regulator, said the hearings resolved none of the questions surrounding MF Global’s failure.

“Regulators’ enforcement divisions and the Justice Department will work together because if the money is missing, somebody did something wrong,” Greenberger said.

And given the damage done by MF Global’s failure, there’s little Corzine can do to revive his public image, said Michael Robinson, a former SEC official who now works in crisis communications.

“Unless Jon Corzine can look under the mattress in his house and find $1.2 billion to give back to customers, his reputation is beyond repair,” Robinson said.

He noted that Corzine spent a career branding himself as an effective manager. Corzine rose from the trading floor of Goldman Sachs to become the investment bank’s co-chairman. He then ran successfully for the U.S. senate and one term as governor of New Jersey. Corzine joined MF Global shortly after losing his bid for a second term.

Now, to protect himself legally, Corzine must avoid being precise about what occurred at the firm he led until last month. That’s why many legal experts had expected Corzine to invoke his Fifth Amendment right against self-incrimination. He never did.

Much of Corzine’s testimony Thursday involved an allegation that he knew about customer money that may have been transferred to a European affiliate just before MF Global collapsed.

“I did not instruct anyone to lend customer funds to MF Global or any of its affiliates,” Corzine told a House panel. He also said he didn’t know about “the use of customer funds on any loan or transfer.”

It was his first public appearance since Terrence Duffy, CME Group Inc.’s executive chairman, alleged Tuesday that he might have known about the $175 million transfer. MF Global traded on exchanges managed by CME Group.

According to Duffy, an MF Global employee told a CME auditor that “Mr. Corzine was aware” of the earlier transfer. Duffy said he referred the matter to the Justice Department and the Commodity Futures Trading Commission.

The transaction Duffy described wasn’t necessarily illegal. Brokers such as MF Global are allowed to borrow from customer accounts temporarily in some circumstances _ to reduce their own risk, for example.

But such cases are a narrow exception. A firm couldn’t use customer money to pay trading partners if its speculative trades lost value. Even in cases where borrowing clients’ money was legal, the firm would have to replace it with a safe, cash-like investment such as a U.S. Treasury security.

Corzine also was questioned about whether he used his relationships with regulators to gain advantages for MF Global.

Corzine has been a major fundraiser for Democrats. He was co-chairman of Goldman Sachs Group Inc. In that role, he worked with two other Goldman executives at the time: Gary Gensler, now chairman of the CFTC, and William Dudley, now president of the Federal Reserve Bank of New York.

Gensler has recused himself from the investigation because of his long history with Corzine. Along with other Wall Street executives, Corzine lobbied Gensler and his staff last summer against a possible CFTC rule that would limited how their firms can invest clients’ money. Afterward, the CFTC delayed adopting the rule until earlier this month.

Early this year, the Federal Reserve allowed MF Global to join an elite group of 22 dealers that help the government sell Treasury securities. The Fed did not assess MF Global to see if it was taking on too much risk. Instead, Fed officials relied on oversight by the CFTC, the SEC and others.

The role of primary dealer conferred on MF Global a seal of financial strength. It gave the firm a competitive edge and likely lowered the interest it was charged to borrow, experts said.

Asked whether he received privileged treatment from the regulators because of his connections, Corzine said, “We didn’t ask for special treatment” from the Fed.

And he said, “I do not believe we were given special treatment” from the CFTC regarding the rule to limit firms’ investments of customer funds.

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Billionaire investor Carl Icahn has withdrawn his slate of directors for consumer products company Clorox’s board, ending a proxy fight.

In a filing with the Securities and Exchange Commission, Icahn said he continues to think the best way to maximize shareholder value is through a sale of the company. He also said that he has concluded that most shareholders don’t support the idea.

Icahn, known for shaking up struggling companies, has proposed to either sell the company or buy it himself, which Clorox has dismissed as not credible. In August, Icahn said he wanted to install himself and 10 other directors on the company’s board. Clorox makes salad dressing, beauty and cleaning products and other consumer products.

Clorox shares fell $2.60, or 3.8 percent, to $66.80 in aftermarket trading.

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As a health official evaluating a $5.5 million state Medicaid contract, Christine Larsen in January signed off on the hiring of SynCare, a fledgling Indianapolis-based company.

Six months later, Larsen ended up on the company’s payroll, helping to preside over a debacle of a contract that lasted just three months amid outrage from patients, health providers and SynCare’s own employees.

In the wake of the company’s termination, politicians and other critics have questioned the wisdom of the Missouri health department officials who designed and approved the deal, wondering how SynCare got hired in the first place. Larsen surely played a key role, but she wasn’t the company’s only well-connected backer.

Corporate filings reveal that Clayton-based Centene Corp.

I continue to receive complaints from readers about problems that they discover after closing their home purchase. Most complain about sellers who fail to disclose defects or home inspectors who fail to find them. The system is far from perfect. However, there are steps that buyers can take before and during a home inspection to protect their interests.

Check all electrical outlets to make sure that they work.

Open windows, even in the winter, to make sure they are not stuck or painted shut.

Look under any area rug or bed and behind any picture to check for cracked tiles, stained carpets or walls. Lift anything on the kitchen counters to look for defects.

Do any of the appliances show any rust? How old are they? If they are discontinued models, you will likely have to replace them if they break down because of the difficulty of finding replacement parts.

Start the dishwasher at the beginning of any home inspection. By the end, it should have gone through its entire cycle, without leaking.

Put a thermometer inside the oven and turn it on to 350 degrees. After 10 minutes, check the temperature. Test stove burners.

Put a cup of water in the microwave for 45 seconds. Does it heat up?

Flush every toilet and see whether it stops running after it is filled.

Check sinks, tubs and showers in the house. Is there proper water flow from each faucet and does everything drain properly?

You may want to consider turning all the faucets on at the same time and then flushing a toilet upstairs to see whether the water pressure slows or stops in any sink. This could indicate a problem with the system.

In older homes, consider a separate sewage inspection. Stan Collini, the President of Roto-Rooter Plumbing and Drain Service in the GTA, tells me that for $295, you can do a video camera of a property’s sewer system to see if there are any problems that would not be visible on a typical home inspection.

Check under the water heater for leaks or stains on the floor.

Ask how old the air conditioning unit is and when was it last serviced Is there sufficient hot or cold air reaching all of the rooms in the house?

Does the owner have a plan with their gas company to inspect the furnace once a year? When was the last inspection conducted?

If the house has an addition, ask whether any upgrade was done to the heating or cooling systems to account for the additional living area.

Look for water stains in the ceiling which could indicate leaking from the roof or other problems with the plumbing system.

When your inspector is on the roof, ask them to check for broken or cracked shingles. If it is a flat roof, look for the low spots where water can collect for any evidence of a problem. Check the eaves to see if there is any rot or decay. If any concerns are noted, consider bringing in a roofing contractor for an additional opinion, especially if the home is 15-20 years old and it is still the original roof.

You may also want to consider a separate inspection for mould or termites, as these may not be visible on a home inspection but can result in significant costs to repair later. Check if this is a known problem in the area.

Always ask the seller and the seller’s agent if they know about any hidden defects that are not visible. They must answer truthfully if you ask them.

Consider looking into after-sale warranty protection. Many of these products on the market will generally cover problems with a home electrical, plumbing, heating and cooling system, as well as the major appliances. But like any warranty, ask about deductibles and what is excluded from coverage.

By being properly prepared and asking the right questions both before and during any home inspection, you will be better protected against costly surprises after closing.

Also read:

Which GTA homes Chinese investors are buying

17 things to know about closing your house deal

Mark Weisleder is a lawyer, author and speaker to the real estate industry. Email mark at mark@markweisleder.com

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On Tuesday, Missouri lawmakers will start debating $360 million in proposed tax breaks to help turn St. Louis’ underused airport into a bustling international cargo hub.

Yet, as currently written, that bill could commit Missouri to spending $300 million of that to build factories and giant freezers

Last Saturday, I talked about helping readers resolve smaller complaints. Now I’ll highlight some big-ticket resolutions achieved for those in need of assistance.

Carrier air conditioning system: Vinay Aggarwal’s new unit started leaking in the second year. Carrier Canada agreed to cover the part under warranty, but wouldn’t cover labour and refrigerant replacement.

“I had no choice and went ahead with the work. The total bill was $900,” says Aggarwal, who has three children under 6 years old.

This summer, the system leaked again. Carrier said it would cover the part under warranty for a second time, but not the labour and refrigerant.

Colin Jennings, the company’s vice-president of residential sales, reacted quickly when I contacted him. He paid $1,800 to cover both repairs.

“We apologize for the inconvenience and hope that problem is behind you,” he told Aggarwal.

Ford truck purchase: Laszlo Gorgenyi bought a cargo van, a 2011 Ford Transit Connect, at a Mississauga dealer for $28,000. He had it fitted with ladder racks and shelves for his new heating contractor business.

Then, he heard Ford Motor Co. of Canada had a $1,000 incentive for commercial vehicles to pay for such work.

He called the dealer several times and struck out. Ford’s head office said he was eligible for the incentive, but had to work through the dealer.

“It’s costing me $3,500 to up-fit my truck and the $1,000 would be helpful,” he said.

Gorgenyi picked up his cheque two days after contacting me. While he got an apology from Ford’s head office, he’s still waiting to hear why the dealer didn’t help out.

Medication Services Inc: Deborah Carson paid $2,000 for help getting a Canada Pension Plan disability pension. The company’s contract promised to give back half the fee if her case was resolved without a hearing.

Last April, her CPP disability pension was approved without a hearing. But by late August, Carson hadn’t been able to get reimbursed.

Medication consultant Michael Sacco responded within hours, saying he had been away and had other issues to address. He was sending the refund right away.

“I am sorry for the delay and oversight,” he told me. “Please convey my apologies to Deborah.”

CitiFinancial: Rosa Denault financed a retail purchase with Citi and paid all the monthly instalments on time, except for the 12th and last one.

“They are charging me $683.33 interest for paying three days late in error,” she said. “The interest is being calculated on the full balance as if I had not made any prior payments.”

Told she owed $911 in interest at first, Denault had persuaded Citi to cut it by 25 per cent. She hoped she could do better.

After I contacted Citi spokesman Troy Underhill, the late payment charge was cancelled altogether.

Canadian Tire Financial Services: Wolfgang Foullong is retired. He doesn’t need insurance to protect him if he loses his job or can’t work.

After the postal strike in June, he started checking his bills more carefully and found he’d been paying for insurance on his Canadian Tire Gas Advantage card since April 2009. (He stopped working in 2007.)

“I was never informed and I wouldn’t have agreed. I had already declined a similar charge on my Canadian Tire Options card,” he said.

After contacting me and the card issuer, he received a refund of almost $300 to cover all his insurance fees.

Under a new federal law, credit card issuers can only add insurance if you say yes. No longer can they bill you for it and wait for you to opt out.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.

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U.S. Bank, the bank with the largest market share of deposits in the St. Louis area, is putting out the help wanted sign.

The Minneapolis-based bank plans to hire at least 300 additional employees by the end of the year, which will put its local workforce over the 4,000 mark.

The new jobs are a bright spot for an otherwise dismal employment picture and comes as some other banks, such as Bank of America, have announced they’re cutting jobs.

“U.S. Bank was one of the more conservative banks through the past five to seven years, and they’re taking advantage of their balance sheet to grow while other banks, particularly some regional banks in St. Louis, struggle to meet capital requirements,” said Dan Winter, senior vice president at Confluence Investment management in Webster Groves.

U.S. Bank is adding office space to accommodate the new hires. Construction crews spent the summer increasing U.S. Bancorp Community Development Corp.’s office space by adding another floor to its two existing floors of leased space in the Fashion Square building at 1307 Washington Avenue. That will bring its office space to 60,000 square feet, a big jump from the 5,000 square feet it leased a decade ago in a building across the street when it had fewer than a dozen employees.

The subsidiary, which pieces complex layers of tax credit financing to fund construction nationwide, has 153 employees downtown and will add 45 this year, said Zack Boyers, U.S. Bancorp CDC’s chairman and CEO. That’s in addition to the 30 percent growth in its local workforce in 2010.

The business unit has about 50 employees based outside the St. Louis area and was formed in 2001 with the merger of Firstar Community Development Corp. and US Affordable Housing CDC.

The syndication of tax credits, a business unit it launched in 2008, is driving the need for more staff. In syndication deals, U.S. Bancorp CDC serves as the originator and manager for federal and state tax credits that it sells to investors. Last year, for example, U.S. Bancorp CDC assisted search engine giant Google in investing in an $86 million low-income housing tax credit fund for affordable rental housing in five states.

“Over the past couple of years, it’s become a more fully operational platform and a real engine of growth,” Boyers said.

U.S. Bancorp CDC also is seeing increased demand for federal investment tax credits in renewable energy for developments using solar and wind power. Having an emphasis on renewable energy has helped in the hiring process, Boyers said.

“We’re seeing a lot of high-quality talent attracted to the kind of work that we’re doing.”

In addition to the CDC employees it will add downtown this year, U.S. Bank plans to expand credit administration and mortgage servicing operations in the region by adding 170 employees to its downtown regional office complex at the U.S. Bank Plaza office tower at Seventh Street and Washington this year, said bank spokeswoman Lisa Clark.

Low interest rates are leading to a flood of home refinancings for the mortgage servicing division, Clark said.

Analysts say U.S. Bank has been successful growing its loan business while other banks, which are saddled with higher ratios of nonperforming loans, are pulling back on lending.

“One of the things that has struck us relative to its peers is that U.S. Bank has had positive loan growth for the past three consecutive quarters,” said Ken Crawford, portfolio manager with Argent Capital Management in Clayton. “Loan growth from any bank is relatively scarce.”

U.S. Bank had 3,750 employees in the St. Louis area as of June 30. With the new hires, its total workforce will exceed 4,000