Financial thoughts

SAN FRANCISCO–Google Inc. is jettisoning nearly 200 workers in its largest round of layoffs yet, demonstrating that even highly profitable companies are feeling the recession's pinch.

The job cuts announced Thursday affected less than 1 per cent of the 20,200 workers employed by the Internet's search leader.

That's modest compared with the massive shake-ups in the newspaper, retailing, automobile and financial services industries during the past year.

Google's housecleaning nevertheless is a sobering sign of the hard times around the globe.

Coming off a year in which earned $4.2 billion (U.S.) on revenue of $22 billion, Google still is trimming its expenses in attempt to protect its profit margins and prevent its slumping stock price from falling even further.

Google's fortunes are tied to ad spending that's dwindling as both marketers and consumers squirrel away more cash. Although Google's revenue has continued to rise during 15-month-old recession, some analysts say they believe the Mountain View-based company may finally be suffering its first quarter-to-quarter decline since it went public in 2004.

It's a guessing game because Google steadfastly refuses to offer financial guidance first cash advance. But Google's recent actions have left little doubt that management is bracing for a possible downturn.

Once renowned for its free-spending ways, Google already has curtailed some employee perquisites, dumped outside contractors and closed services that aren't paying off. Pulling the plug on a radio advertising division in February eliminated as many as 40 jobs.

Management also has clamped down on hiring after adding more than 17,000 workers in Google's first 41/2 years as public company. That decision prompted Google to dump 100 employee recruiters in January.

The latest layoffs are concentrated in the division that sells Google's advertising.

In a blog posting, Google said it had hired too many employees doing the same jobs during its rapid expansion.

"Making changes of this kind is never easy – and we recognize that the recession makes the timing even more difficult for the Googlers concerned," wrote Omid Kordestani, the company's senior vice president of global sales and business development.

Google shares gained $9.22, or 2.7 percent, Thursday to close at $353.29.

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China is scolding the world before the Group of 20 meeting next week, telling the largest countries to spend more on stimulus and fix their financial supervision.

Central bank Governor Zhou Xiaochuan yesterday lambasted governments that failed to emulate China’s “decisive” action to spur economic growth. Earlier this week he suggested creating a new international reserve currency to rival the dollar.

Evidence that China’s 4 trillion yuan ($585 billion) stimulus package is taking effect is emboldening the nation’s leaders to dictate their vision for a new world economic and financial order. Premier Wen Jiabao said this month he was worried about the value of China’s $740 billion in U.S. Treasury holdings and asked for a guarantee of their safety.

“China can stand up and say, ‘Our policies have worked, we have stabilized our economy first,’” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “China is positioning itself to have a much more significant role and influence at this G-20 meeting than it has at any other international forum in the past.”

Leaders of the 20 largest industrial and developing nations meet in London on April 2 to look for ways to alleviate the global financial crisis and strengthen international regulation. The World Bank this month said the global economy will probably shrink for the first time since World War II.

China Recovery?

China’s leaders, including Zhou and President Hu Jintao, will be able to justify their policy prescriptions by pointing to signs of recovery in their economy, which last year surpassed Germany’s to become the world’s third-largest by output.

Urban fixed-asset investment jumped 26.5 percent in the first two months from a year earlier, new bank lending quadrupled in February and vehicle sales rose 25 percent the same month. The 30 percent gain in the Shanghai Composite Index this year makes it the best-performing among 89 benchmark measures tracked worldwide by Bloomberg.

The government “has taken prompt, decisive and effective policy measures, demonstrating its superior system advantage when it comes to making vital policy decisions,” Zhou wrote in an article published on the central bank’s Web site yesterday.

“China’s taking the offensive,” said Jun Ma, chief China economist at Deutsche Bank AG in Hong Kong. “China needs to play a much more prominent role in the run-up to the G-20 because it is a critical moment to participate in the new design and architecture of the global financial system.”

20 Million Jobless

China’s 6.8 percent expansion in the fourth quarter from the same period a year earlier lagged behind its 9 percent growth for all of 2008 and 13 percent for 2007. Exports have dropped at a record pace, forcing thousands of factories to close and leaving about 20 million migrant workers jobless.

That hasn’t stopped a steady stream of instructions to the rest of the world in recent days paydayloans. Governments need to step up economic stimulus to restore market confidence and fend off trade protectionism, Finance Minister Xie Xuren said in a statement yesterday.

Wang Qishan, China’s vice premier, called on the G-20 to set a timetable to modify voting at institutions like the International Monetary Fund to give developing countries more say in global financial affairs, in an article published in the Times today in London.

The U.S. is injecting $787 billion into its economy while European stimulus totals 400 billion euros ($542 billion), almost all from individual nations rather than the European Union.

U.S. Complacency

China’s central bank yesterday blamed the financial crisis on “complacency” and a conviction in the U.S. and developed economies that markets always correct themselves.

“Market forces, if unchecked, will lead to asset bubbles and ultimately a disastrous market clearing in the form of a financial crisis like the current one,” the research arm of the People’s Bank of China said in a separate article published on its Web site yesterday.

A “lack of coordination among regulatory agencies and communications between regulators and central bankers and finance ministers in some advanced countries” hampered efforts for a financial rescue, the research arm said.

China’s lecturing comes after decades when leaders focused on their own economy and let the U.S. and its allies set the international norms on financial regulation, said Charles Freeman, a former top trade negotiator who covered China at the U.S. Trade Representative’s office in Washington.

Navel-Gaze

“They’ve jockeyed for position, they’ve thought a lot about these things and they are making themselves be heard while the Europeans and the Japanese kind of navel-gaze and sideline themselves,” he said.

Some of Zhou’s recommendations jibe with those of U.S. Treasury Secretary Timothy Geithner, who called for a so-called systemic risk regulator to oversee big financial institutions and federal authority to seize them if they run into trouble.

Zhou said yesterday that governments should consider giving mandates to finance ministries and central banks to use extraordinary means “in order to allow them to act boldly and expeditiously without having to go through a lengthy or even painful approval process.”

In another article this week, also published on the central bank’s Web site, Zhou urged the International Monetary Fund to expand the use of so-called Special Drawing Rights and move toward a “super-sovereign reserve currency.”

“Zhou is clearly trying to establish himself and China as taking a lead position in shaping the global response to the crisis,” said Mark Williams, a London-based economist at Capital Economics Ltd. “A more engaged China is something the world should welcome.”

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The Obama administration is preparing an overhaul of U.S. banking rules that would force financial companies to keep more cash on hand in case their trading bets go wrong.

Treasury Secretary Timothy Geithner told lawmakers yesterday that changes will include “strong oversight, including appropriate constraints on risk-taking.” Federal Reserve Chairman Ben S. Bernanke said the case of American International Group Inc. showed the “intense problem” of trading with insufficient capital to guard against losses.

“You’ll see less risk assumed, and that might lead to lower profits on average,” said Robert Parry, who was president of the Federal Reserve Bank of San Francisco from 1986 to 2004. “There’s no doubt that the administration and regulators are going” to get banks to treat risk differently.

The comments foreshadowed what may become the biggest revamp to U.S. banking rules since the 1930s. To prevent the nation from losing its share of the global financial industry, the administration will also need to ensure that regulators abroad take similar measures, Geithner said.

“Without that, there is a risk that capital will move, business will shift from the United States, and we’ll end up with a weaker system overall,” the Treasury chief said at a House Financial Services Committee hearing yesterday.

G-20 Summit

Geithner will offer more details on the administration’s plans at the same House panel tomorrow. President Barack Obama will present the outline to his counterparts in the Group of 20 developed and emerging nations at an April 2 summit in London.

The Treasury chief also called yesterday for new authority to seize and wind down failing financial companies in the aftermath of the AIG rescue, which has ballooned to $182.5 billion from an initial $85 billion in September. Obama said in a news conference late yesterday that he expects there will be “strong support” for the proposal.

The powers would allow the Treasury secretary to establish a conservatorship or receivership for a failing firm, including control over the company’s operations and the ability to impose partial losses on its creditors.

While the Federal Deposit Insurance Corp. has the ability to take over failing deposit-taking firms and wind down their assets, no such authority exists for financial firms that aren’t classified as banks, such as AIG or a hedge fund with extensive links throughout the banking system.

‘Urgent Need’

“AIG highlights the urgent need for new resolution procedures for systemically important non-bank financial firms,” Bernanke said.

Barney Frank, the chairman of the House panel, said he supported the call for legislation to put non-banks “out of their misery.” The authority will “allow us to avoid all or nothing” — referring to the bailout for AIG and the decision by regulators in September to allow Lehman Brothers Holdings Inc. to file for bankruptcy, worsening the financial crisis.

Frank called for any systemic-risk regulator to have “the capacity to intervene with any kind of activity, including hedge funds payday advance.” That echoes the campaign of European leaders who want the G-20 to toughen oversight of the $1.4 trillion industry.

French Prime Minister Francois Fillon said yesterday in Washington that authorities “must distinguish the most risky activities of hedge funds so hedge funds are not a way for conventional financial institutions to escape regulation.”

Plan ‘Will Work’

Geithner separately pledged to lawmakers that his plan to shore up the financial system “will work,” provided it has sufficient resources. Without committing to request more money for the $700 billion rescue fund, he said “we’ll need to work with Congress to make sure we can do this on a scale that’s going to make it work.”

The Treasury plan uses $75 billion to $100 billion to help finance a $500 billion initiative to help private investors buy the distressed loans and securities on banks’ balance sheets.

The strategy would also allow hedge, pension and mutual funds to sell mortgage-backed securities to investors financed by the Treasury and Fed. All market participants will be eligible to participate, an administration official said yesterday.

During the hearing, Representative Edward Royce, a California Republican, warned against government support undermining incentives and creating an unfair playing field.

“At the end of the day, we undermine market discipline because we telegraphed the message to the market that the government is behind these institutions,” Royce said.

‘Critically Important’

Geithner said regulators and lawmakers need to “bring these markets into an oversight framework that better provides better protection for the financial system.”

It is “critically important” that companies investing in products such as credit default swaps “hold enough capital or reserves or cushions against the risk those instruments present.”

Bernanke said “there was a particularly intense problem at AIG because they were essentially using these swaps to sell insurance against which they neither had capital nor did they have hedging, and so when — when the insured event occurred, there were enormous losses.”

AIG was overseen by the Office of Thrift Supervision, whose expertise is in smaller banks that accept deposits from consumers and make home mortgages. “It was obviously a poor match for them to be looking at the activities” of AIG’s financial-products unit, Bernanke said.

Both he and Geithner favored a consolidated regulator that can look at financial risk across the system.

The two reiterated their opposition to bonus payments for the AIG financial-products division, with Bernanke saying he had initially sought a lawsuit to halt them.

“Regulators must apply standards, not just to protect the soundness of individual institutions, but to protect the stability of the system as a whole,” the Treasury chief said.

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Unlike Bernie Madoff’s clients, mutual fund investors can see where their money goes and who’s running the show. Funds are regulated so you can’t be easily taken, like Madoff’s Ponzi scheme victims.

But if you’re like most investors, you don’t bother to check out disclosures that can tell a lot about whether your fund company truly has your interests at heart — like whether managers feel your pain by personally investing in their fund, or whether the fund’s board is truly independent or just a rubber stamp.

Annual reports mailed out this time of year typically end up in the trash. And how many of us go beyond the marketing materials to click on the dense fund disclosures posted online?

After the beating nearly all funds have taken, it’s an especially good time to try to determine whether your fund company is really on your side.

The money-management fees that are fund companies’ life blood are shrinking along with their assets under management. That leaves companies facing tough choices that get to the core of fund stewardship — like raising fund management fees, or cutting the things that matter most to investors.

"Does a company cut the number of jobs in their phone center, so when you as a shareholder call, instead of being on hold for 5 minutes, it’s 15 minutes?" said Adam Bold, chief investment officer of The Mutual Fund Store, an investment management company based in Overland Park, Kan. "Or do they cut the number of analysts working for a fund manager down from seven or eight to five? Now, the analysts have to cover more industries, and industries they’ve never covered before."

While cost-cutting may help repair the company’s bottom line, it can also erode fund performance — and your returns.

So how do you find out if fund manager is truly looking out for you? Here are some tips:

•CHECK YOUR MAIL: Review annual fund reports. If your fund’s blowup in the current slump was markedly worse than the beating its rivals took, does the fund fess up to it and explain what happened, or does it gloss things over? And do the managers discuss how they’ll avoid repeating mistakes?

•REVIEW DISCLOSURES: Documents called Additional Statements of Information that accompany fund prospectuses can look mind-numbing. But here you can find out how much a fund manager has personally invested in the fund no fax payday loans. Managers who invest heavily in their own funds — commonly known as "eating their own cooking" — are generally considered to be more aligned with investors’ interests.

•CONSIDER FEES: Funds are required to disclose how much they charge. While a higher fee can be merited if the fund is managed in a way that can generate a better return, that’s not always the case. Generally, the lower the fee the fund company charges, the better stewards they are.

•LOOK AT THE RECORD: Check SEC and fund company disclosures, and read media accounts to see whether the company has gotten in trouble with regulators. And does it seem to be more oriented toward attracting clients, or in managing your money for the long haul?

For instance, a company that closes a large and popular fund to new investors often serves investors’ long-term interests at the expense of the company’s sales prospects. If the company fails to show it can play by the rules and protect shareholders, go elsewhere.

•FIND OUT WHO’S IN CHARGE: If the fund’s board is stacked with company insiders — especially the chairman — they may be less likely to act in your interests than independent members. Also, look for boards whose members invest in the funds they oversee.

•PRESS YOUR ADVISER: If you’re relying on an investment adviser to choose a fund, ask the adviser how well he or she has scrutinized the fund’s stewardship. Take the stewardship advice with a grain of salt if the adviser is receiving a commission from the company.

Stewardship issues are especially crucial now, with fund companies under pressure to make up for shrinking revenue, said Laura Lutton, editor of Morningstar’s stewardship grades.

Some will respond with fee increases, Lutton said, "So we may see some stewardship grades going down as fees go up."

Some also will cut expenses, including staff. And the companies that are more investor-focused, she says, "are a lot less likely to do harm to shareholders."
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Private-equity firm Apollo Management is in talks to take a substantial ownership stake in Charter Communications Inc. as part of the cable company’s bankruptcy reorganization, according to people familiar with the talks.

Apollo controls a large chunk of Charter debt, which it will swap for equity as part of the company’s restructuring. Last month Charter said that it would seek Chapter 11 bankruptcy protection by April 1 and reorganize.

Paul Allen, a co-founder of Microsoft Corp. who has controlled Charter, will retain voting control of the company, according to securities filings. Apollo will have minority voting rights and a noncontrol position, according to people familiar with the talks.

Town and Country-based Charter, the nation’s fourth-largest cable-TV company, has said its planned Chapter 11 filing was intended to trim about $8 billion from its $21 billion in debt online cash advance. The company grew rapidly through a series of acquisitions, and then went public in 1999. The purchases saddled it with billions of dollars of debt.

Charter, which has 16,500 employees and reported $6.5 billion in revenue last year, doesn’t expect to cut jobs as part of its reorganization.

A spokesman for Apollo declined to comment. A Charter spokesperson didn’t immediately return requests for comment.
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The board of Satyam Computer Services Ltd began a meeting on Friday as the deadline neared for suitors to submit their expressions of interest in acquiring a majority stake in the fraud-hit Indian outsourcer.

Potential bidders must submit a detailed expression of interest and have available at least 15 billion rupees ($300 million) by 5 p.m. (1130 GMT/7:30 a.m. EDT).

A Satyam spokeswoman declined to comment on the agenda of the board meeting, but analysts said the board was likely to review the details of potential buyers.

Indian engineering firm Larsen & Toubro, IT services firm Tech Mahindra, diversified Spice Group and U.S. outsourcer iGate Corp all said they had registered as potential bidders.

Spice Group Chairman B.K. Modi told Reuters the company would submit its expression of interest by Friday afternoon, and a Larsen spokesman said the company was also expected to do so later in the day cash advance.

Officials at iGate and Tech Mahindra could not be immediately reached.

New York-listed Satyam has been struggling since founder and Chairman Ramalinga Raju shocked investors in January, saying profits had been overstated for years and assets falsified in what has become India’s biggest corporate scandal.

The new government-appointed board is keen to bring in an investor to restore confidence among its roughly 50,000-strong staff and more than 600 customers, which include General Electric and Qantas Airways.

Satyam said last week Indian and foreign firms, including private equity companies, had registered to bid for a 51 percent stake but gave no details of names or number.

($1 = 50.2 rupees)

(Reporting by Sumeet Chatterjee; Editing by Ranjit Gangadharan)

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Stock markets shook off triple-digit losses to close higher today after the U.S. Federal Reserve surprised investors in announcing it will start buying U.S. Treasury bonds to help unclog credit markets.

The move – which economists call "quantitative easing" – is aimed at effectively reducing market interest rates since the Fed's key rate, the federal funds rate, has been ratcheted down as low as it can go.

Toronto's S&P/TSX composite index closed 69.5 points higher to 8,629.1, up for a seventh session in a row and rising 15 per cent during that time.

New York's Dow Jones industrial average was up 90.88 points to 7,486.58, leaving the blue-chip index up 14 per cent since March 9.

The central bank will buy up to US$300 billion in long-term Treasury securities over the next six months.

Many kinds of debt – from mortgages to corporate bonds – are linked to Treasury rates. Fed purchases would boost Treasury prices and drive down their interest rates, hopefully lowering rates on other kinds of debt.

The central bank also will buy more mortgage-backed securities and debt guaranteed by Fannie Mae and Freddie Mac in a move to help that market.

"They are certainly, assertively doing everything they can to intervene," said David Darst, chief investment strategist of Morgan Stanley's Global Wealth Management Group in New York.

The Toronto rally has been especially beneficial for the financial sector, which has soared 29.4 per cent over the last seven sessions. The rally was originally sparked by news that American banks Citigroup and Bank of America were profitable in the first two months of this year.

However, analysts pointed out that worsening economic fundamentals do not bode well for stock markets.

"We revised down our Canadian economic forecasts – part of that was a revision down in the first-quarter (growth) number from minus 6.5 per cent to minus 9.1 per cent, which is a number none of us have seen before," said David Wolf, head of Canadian economics and Strategy at Merrill Lynch Canada.

"But it is what it is, and the data is quite loudly screeching that this is going to be a historic contraction in the economy, so the fundamentals haven't improved."

The TSX Venture Exchange was ahead 12.59 points to 865.71.

The Canadian dollar also turned positive, up 1.43 cents to 80.24 cents US as the American currency weakened following the Fed announcement. It surged as high as 80.45 cents US.

The market had also found support from a Wall Street Journal report that International Business Machines Corp payday loan. is in preliminary talks to buy Sun Microsystems Inc. for at least US$6.5 billion in cash.

IBM and Sun both make computer systems for corporate customers, and the newspaper said a purchase of Sun would help IBM in the finance and telecommunications markets. Sun stock soared $3.92 or 79 per cent to US$8.89 while IBM slipped 96 cents to $91.95.

The Nasdaq composite index jumped 29.11 points to 1,491.22 while the S&P 500 index rose 16.23 points to 794.35.

Performance was mixed in the TSX financial sector even as it up 1.2 per cent with TD Bank (TSX: TD) down 47 cents to $43.06 while Manulife Financial (TSX: MFC) rose $1.09 to $14.89 and Scotiabank (TSX: BNS) rose 57 cents to $32.27.

The energy sector was two per cent lower as the April crude contract on the New York Mercantile Exchange backed off $1.02 to US$48.14 a barrel. EnCana Corp. (TSX: ECA) stepped back 92 cents to $50.58 while Suncor Inc. (TSX: SU) moved down $2.05 to $31.20.

Libya's National Oil Company says it will buy Canada's Verenex Energy Inc., (TSX: VNX), matching a US$394-million dollar bid by a subsidiary of the China National Petroleum Corp, although the Calgary company says it hasn't been able to confirm the report.

Verenex has operations in Libya's Area-47, a region estimated to hold roughly 2.15 billion barrels in crude oil reserves. Its shares dropped 92 cents to C$8.40.

The gold sector was up eight per cent even as the April bullion contract on the New York Mercantile Exchange moved down $27.70 to US$889.10. Barrick Gold Corp. (TSX: ABX) was ahead $3.24 to $39.85 and Goldcorp Inc. (TSX: G) climbed $3.33 to $39.60.

Allied Nevada Gold Corp. (TSX: ANV), which is working to get the Hycroft project into commercial production, says its annual net loss increased last year to US$79.6 million, up from $11.3 million in 2007. The company reported no revenues for last year or the prior year and its shares rose 84 cents at $6.09.

Shares in Timminco Ltd. (TSX: TIM) slipped nine cents to $2.26 after it said Tuesday it will temporarily cut jobs and reduced production of silicon due to difficult market conditions and reduced demand.

In Canadian economic news, wholesale sales declined 4.2 per cent to $41.1 billion in January. Statistics Canada said the drop was due largely to lower activity in the automotive products sector.

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Henry Saavedra, executive director of the Tampa Sports Authority, resigned under fire Monday.

Saavedra had been with the TSA for 24 years, the last 12 as executive director.

He resigned rather than try to fight the board’s action when it became apparent that two of the executive committee members, chairman Vincent Marchetti and treasurer Andrew Scaglione, were leading the charge to have him ousted. Instead, Saavedra will receive a severance package worth $171,871, which includes six months salary, all deferred compensation plus his accrued sick and vacation days.

The board voted 6-5 to accept his resignation.

Saavedra first learned of the board’s intention last Thursday at breakfast with Marchetti, who outlined his objections to Saavedra’s job performance. Later in an executive committee meeting attended by only Marchetti and Scaglione, an agenda item was added that proposed firing Saavedra. Jim Norman was unable to attend that meeting.

Saavedra then hired David Linesch of the Linesch Firm P.A. in Palm Harbor, an employment lawyer, to represent him. They drafted a response to Marchetti’s charges, some that went back a few years, even before Marchetti was board chairman free credit score online.

But in the end, Saavedra decided to take the severance and resign. Even if he had fought the board’s actions and won, there still would have dissention on the board with Marchetti and Scaglione, Linesch said.

Other board members expressed dismay at Marchetti and Scaglione’s actions.

“I’ve been on the board for six years and I was blindsided by this,” said Kalyn Brandewie, board chair before Marchetti. “There is a faction on this board that wants to make this their personal fiefdom.”

“I’m very disappointed at the board’s actions,” said Tampa city councilwoman Mary Alvarez. “I could see you wanted to get Henry and now you have.”

“This action is disgusting. You can see how underhanded this was presented,” said board member Frank DeBose.

Mickey Farrell was named interim executive director. The board decided to hire a search firm to help with finding a permanent replacement.

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I’m always amazed by the size of the tax refund most Americans get year after year. The average refund was $2,429 last year, up from $2,324 in 2007, according to the Internal Revenue Service.

I’ll lay heavy odds that this year’s refunds will be bigger, thanks to higher contribution limits for IRAs, deductions for non-itemizers for real estate taxes and disaster losses, and tax credits for certain home buyers (see pages 30-32, 34-35 and 61 of the IRS instruction booklet for Form 1040).

Bigger refunds, however, mean millions of Americans struggling in this lengthy recession unnecessarily overpaid taxes all year. Many have had — and probably still have — $200-plus a month needlessly withheld from their paychecks, potentially pushing them into credit card debt if not mortgage default.

The irony is that many of these taxpayers, suddenly impatient for their money, will pay hefty fees for short-term refund-anticipation loans.
A new report by the National Consumer Law Center and Consumer Federation of America found that about 8.7 million taxpayers paid more than $900 million in fees for such loans in 2007. Another 11.2 million taxpayers received a "refund anticipation check" in 2007 at a cost of about $336 million.

Then, if history is any guide, many taxpayers will use at least part of their refund to pay down debt they might have avoided if not for the tax overpayments throughout the year.

To be sure, many people who are entitled to refunds and sign up for refund-anticipation loans are low-income earners who qualify for the earned income credit. Even after zero withholding, they may get a tax refund (technically a refundable credit).

But it makes no sense for other taxpayers to scrape by all year and perhaps go into debt only to get their money back at the end — and without interest to boot.

Solution? File a new W-4 form with your employer so less money is withheld (check IRS Publication 919, available at www payday loans in one hour.irs.gov). Or, if you make quarterly estimated tax payments, pay less each quarter. The goal of smart tax planning is to anticipate your annual tax liability and get to April 15 without owing or being owed a lot.

That should be your goal also with the "Making Work Pay" credit Congress approved for 2009 and 2010.

You earn the credit at the rate of 6.2 percent of your work income, with the total credit capped at $400 a year for singles and $800 for joint filers.

Therefore, singles must earn $6,452 and couples $12,904 before they can get the full credit.

But if you have too much income, you lose out. The credit is reduced at the rate of 2 percent of modified adjusted gross income above $75,000 for singles and $150,000 for couples. (Thus, singles with incomes of $95,000 and couples with incomes of $190,000 get no credit.)

For those who qualify, this credit amounts to a rebate of the 6.2 employee Social Security payroll tax for old age, survivor and disability insurance until the credit reaches the maximum amount. Most workers will start seeing the credit reflected on their take-home pay shortly after April 1 as employers start using new IRS tables calling for lower withholding.

But if you have multiple jobs or anticipate too high an income this year to qualify for the credit, you may have too little money withheld. Again, the solution is to file a new W-4 form appropriate to your situation, and/or adjust your quarterly estimated tax payments.

AskHumberto@aol.com

2009, TRIBUNE MEDIA SERVICES INC.

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The Independent Community Bankers of America released a survey of its members that show the majority of them have seen an increase in deposits as a result of getting new customers, while only 17 percent had seen customers draw down deposit accounts.

The ICBA in February surveyed 743 community banks to see the impacts of the financial crisis on community banks. The survey was conducted by Aite Group LLC.

“While the financial crisis has affected banks of all sizes and in all regions, community banks continue to lend and are typically faring much better than the larger banks because they didn’t participate in the high-risk activities that led to problems we are experiencing,” said Camden Fine, president of the ICBA. “This survey clearly shows that the vast majority of community banks are well-positioned to survive the economic downturn and, perhaps, even reclaim some of the customers from larger banks payday advance.”

The survey found that 55 percent of banks increased deposits as a result of new customer acquisition.

Community banks are getting new customers at a faster rate than in the past, the survey found, with 57 percent or respondents getting an increase in new retail customers during second half of 2008 compared to the first half of the year. The survey found 47 percent of independent banks saw an increase in new business customers.

And the survey found that community banks are making new loans, with 40 percent or respondents experiencing an increase in loan origination compared to the year earlier.

The ICBA is the represents 5,000 community banks of all sizes through the country.

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