Financial thoughts

Cass Informations Systems reported fourth-quarter net income of $5.5 million, or 53 cents per share, compared with $5.1 milllion, or 48 cents per share, in the corresponding period of 2010.

For the year, Cass–a Bridgeton-based provider of invoice payment and information services–reported record net income of $23 million, or $2.21 per share, compared with $20.3 million, or $1.95 per share, in 2010.

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A online cash advance is a service provided by most credit card and charge card issuers.

The Federal Reserve on Tuesday drew fire from conservatives for its recent policy proposals on the downtrodden housing sector that the critics argued represented an overreach by the central bank.

Two Republican senators lashed out at the Fed’s “white paper” on housing, which suggested other officials should consider giving failed mortgage finance giants Fannie Mae (FNMA.OB: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FMCC.OB: Quote, Profile, Research, Stock Buzz) a bigger role in turning the market around.

The protests mark a rekindling of anti-central bank sentiment that reached fever pitch when the Fed launched its second round of bond buying in late 2010. At that time, conservatives accused the central bank of sowing the seeds for future inflation, though recent trends show price pressures ebbing.

The Fed’s detractors are now reacting to what they see as central bankers chiming in on fiscal policy matters that are not the appropriate realm for monetary authorities.

“I believe that it is important to the interests of the Federal Reserve, including the independence of monetary policy, that the Fed refrain from providing any hint of activism regarding what are clearly fiscal policy choices,” said Orrin Hatch, the top Republican on the Senate Finance Committee.

“I am sure that the Fed would not appreciate a white paper from Congress outlining how to think about and execute monetary policy,” he said.

Sen. Bob Corker, a member of the Banking Committee, directed his criticism at William Dudley, the influential president of the New York Federal Reserve Bank, for his suggestion that principal write-downs be considered for distressed borrowers.

Such criticisms have some resonance among a minority of inflation hawks at the Fed one hour payday loan. Philadelphia Federal Reserve Bank President Charles Plosser and Richmond Fed chief Jeffrey Lacker have both expressed distaste over an earlier effort by the Fed to drive down mortgage costs by buying mortgage-related debt.

At the other end of the spectrum, Dudley and Eric Rosengren of the Boston Fed have said the central bank should consider further purchases of mortgage-backed securities.

An editorial in the Wall Street Journal on Tuesday was even more scathing, accusing the central bank of “rank electioneering” for issuing the housing proposal.

Fed officials have argued that, given their broad mandate to achieve solid economic growth, it would be irresponsible for them to ignore housing, which continues to be a major drag on the economic recovery.

Recent indicators have been mixed, pointing to some strength in construction but also a continued decline in home prices that bodes ill for a sustained housing rebound.

When Ben Bernanke first took over as chairman at the central bank in 2006, he vowed to steer clear of the type of fiscal debates that got his predecessor, Alan Greenspan, into trouble.

Greenspan had widely been criticized for giving intellectual cover to tax cuts during President George Bush’s administration.

In a letter to leading lawmakers that accompanied the “white paper” last Wednesday, Bernanke said the Fed had received questions and requests for input and that the policy proposals were being made in the “interest of a continuing dialogue.”

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Payday loans no faxing fall on the less risky side simply because the money loaned to you is a percentage of your next paycheck.

The stock market is ending a tumultuous year right where it started.

The Standard & Poor’s 500 index closed 2011 a fraction of a point below where it started the year. The S&P closed at 1,257.60, up 5.42 points or 0.4 percent. It ended 2010 at nearly the exact same level, at 1,257.64. Its loss for the year is 0.04 point.

The Dow Jones industrial average lost 69 points, or 0.6 percent, at 12,218. The Dow is up 5.5 percent for the year. The Nasdaq composite index fell 9 points, or 0.3 percent, to 2,605. It lost 1.8 percent for the year.

McDonald’s Corp. was the biggest winner in the Dow this year with a gain of 31 percent. Bank of America Corp. was the worst, down 58 percent.

The conventional wisdom is the more risk, the greater the potential rewards. But the opposite is proving true this year: Investors playing it safe have gained the most.

The most dull and conservative of stocks _ utilities _ gained 15 percent, the largest gain of the ten industry sectors in the S&P 500 index. Other winning groups are consumer staples and health care companies, up 11 percent and 10 percent in 2011 respectively.

In Europe, many of the biggest markets ended down for the year. Britain’s FTSE 100 lost 5.6 percent, Germany’s DAX 14.7 percent.

Trading has been quiet this week with many investors away on vacation. Volume on the New York Stock Exchange has been about half of its daily average pay day loans. Markets will be closed Monday in observance of New Year’s Day.

Better news on the job market and home sales lifted stocks Thursday, pushing the Dow up 135 points. On Friday Ford reported that its sales topped 2 million this year for the first time since 2007. Ford fell 0.1 percent.

Rising and falling stocks were about even on the New York Stock Exchange. Volume was just 2.2 billion shares, about half of the recent daily average.

In other corporate news:

_ Sears Holdings Corp. fell 3 percent to $31.78 after Fitch Ratings downgraded the company’s credit rating to “junk.” Sears has plunged 30 percent this week after disclosing that it would close more than 100 Sears and Kmart stores because of weak holiday sales.

_ Diamond Foods Inc. jumped 2.4 percent to $32.27. Rumors have been circulating that the hedge fund manager David Einhorn has acquired a stake in the food company that makes Emerald Nuts.

_ AMR Corp., the parent company of American Airlines, fell 17 cents to 35 cents. The company filed for bankruptcy protection last month. Late Thursday the company said its stock would be delisted from the New York Stock Exchange next week.

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Valley Beef LLC, a franchisee of five St. Louis area Lion’s Choice restaurants, has filed for bankruptcy.

Clayton-based Valley Beef, led by Thomas Ginos, filed the Chapter 11 bankruptcy petition Thursday in St. Louis federal court and listed between $500,000 and $1 million in liabilities and assets of $50,000 or less. Its largest creditors holding unsecured claims are US Foods, which is owed $117,850, and Pulaski Bank, which has claims totaling $195,205.

Valley Beef’s Lion’s Choice locations in Chesterfield, St. Louis, Fenton, Wentzville and on Mid Rivers Mall Drive in St. Peters have 84 employees. Valley Beef shuttered a Lion’s Choice in downtown St. Louis in 2009.

Ginos became a franchisee of the restaurant chain that specializes in roast beef sandwiches in 2001. He plans to keep the five remaining restaurants open during the bankruptcy reorganization, according to his attorney, Robert Eggmann of Clayton-based law firm Desai Eggmann Mason. Eggmann said his client filed the bankruptcy to restructure debt and expects to emerge from bankruptcy within six months.

Lion’s Choice was founded in Ballwin in 1967 as Brittany Beef and has 15 company-owned restaurants in the St. Louis area that are not included in the bankruptcy. Jim Tobias, president of Lion’s Choice Restaurant Corp., said he did not expect the bankruptcy filing to interrupt operations at the five St. Louis area franchise restaurants. “We don’t expect any change in business,” Tobias said.

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Japan’s response to the nuclear crisis that followed the March 11 tsunami was confused and riddled with problems, including an erroneous assumption an emergency cooling system was working and a delay in disclosing dangerous radiation leaks, a report revealed Monday.

The disturbing picture of harried and bumbling workers and government officials scrambling to respond to the problems at Fukushima Dai-ichi nuclear power plant was depicted in the report detailing a government investigation.

The 507-page interim report, compiled by interviewing more than 400 people, including utility workers and government officials, found authorities had grossly underestimated tsunami risks, assuming the highest wave would be 6 meters (20 feet). The tsunami hit at more than double those levels.

The report criticized the use of the term “soteigai,” meaning “outside our imagination,” which it said implied authorities were shirking responsibility for what had happened. It said by labeling the events as beyond what could have been expected, officials had invited public distrust.

“This accident has taught us an important lesson on how we must be ready for soteigai,” it said.

The report, set to be finished by mid-2012, found workers at Tokyo Electric Power Co., the utility that ran Fukushima Dai-ichi, were untrained to handle emergencies like the power shutdown that struck when the tsunami destroyed backup generators _ setting off the world’s worst nuclear disaster since Chernobyl.

There was no clear manual to follow, and the workers failed to communicate, not only with the government but also among themselves, it said.

Finding alternative ways to bring sorely needed water to the reactors was delayed for hours because of the mishandling of an emergency cooling system, the report said. Workers assumed the system was working, despite several warning signs it had failed and was sending the nuclear core into meltdown.

The report acknowledged that even if the system had kicked in properly, the tsunami damage may have been so great that meltdowns would have happened anyway.

But a better response might have reduced the core damage, radiation leaks and the hydrogen explosions that followed at two reactors and sent plumes of radiation into the air, according to the report.

Sadder still was how the government dallied in relaying information to the public, such as using evasive language to avoid admitting serious meltdowns at the reactors, the report said.

The government also delayed disclosure of radiation data in the area, unnecessarily exposing entire towns to radiation when they could have evacuated, the report found.

The government recommended changes so utilities will respond properly to serious accidents.

It recommended separating the nuclear regulators from the unit that promotes atomic energy, echoing frequent criticism since the disaster.

Japan’s nuclear regulators were in the same ministry that promotes the industry, but they will be moved to the environment ministry next year to ensure more independence.

The report acknowledged people were still living in fear of radiation spewed into the air and water, as well as radiation in the food they eat. Thousands have been forced to evacuate and have suffered monetary damage from radiation contamination, it said.

“The nuclear disaster is far from over,” the report said.

The earthquake and tsunami left 20,000 people dead or missing.

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India’s industrial production slid 5.1 percent in October, the first fall in over two years and one more sign of a reversal of fortunes for Asia’s third largest economy.

The decline from a year earlier was driven by mining and manufacturing, as well as waning consumer demand and lackluster investment, according to government figures released Monday.

Industrial output hasn’t fallen in India since June 2009.

Despite global headwinds, many economists say India’s troubles are largely homegrown, as the effects of 13 consecutive interest rate hikes begin to ripple through the economy. Political paralysis has also made it difficult to kickstart growth and investment in the face of a plunging rupee and two years of near double-digit inflation.

“This slowdown is clearly continuing and it may be intensifying,” HSBC chief economist for India, Leif Eskesen, said from Singapore. “What’s driving it is the lagged effect of monetary tightening and the high level of inflation that are causing uncertainty about the macroeconomic outlook. That hurts incentives to invest and spend.”

He said policy paralysis was also contributing to India’s woes.

With little scope for stimulus spending, India needs to enact difficult but crucial reforms to kickstart the economy and reassure investors, who are jittery from the dark global economic outlook, economists and businesspeople say.

The government’s humiliating U-turn on its decision to allow greater foreign investment in retail, however, suggests that the ruling Congress Party _ fractured by internal divisions and facing a revolt by opposition parties and coalition allies _ no longer has the leverage to push its reformist agenda.

Parliament has yet to address a slew of issues, which could help spur investment and kickstart growth, which slipped to 6.9 percent in the September quarter, the lowest in over two years.

On the table are a land acquisition bill, which advocates say would ease contentious land transfer policies and speed investment, as well as tax reform, new mining regulations and measures to allow greater foreign investment in defense and aviation.

Last October, industrial production grew by over 11 percent.

The fall was much sharper than expected and puts pressure on the central bank to arrest or start reversing a series of interest rate hikes when it meets this week.

A CNBC-TV18 poll of economists had forecast industrial production to contract 1.6 percent.

Mining activity shrank by 7.2 percent in October, constrained by bureaucratic bottlenecks. Manufacturing slid by 6.0 percent.

Consumer goods production dropped 0.8 percent, while capital goods output plunged 25.5 percent _ a sign of waning investment.

Headline inflation has averaged 9.6 percent since January 2010.

India’s benchmark Sensex index is down over 22 percent this calendar year, making it one of the worst performing in the region. The rupee is down about 14 percent this year and recently hit a lifetime low.

The Ministry of Finance last week trimmed its growth projection for the fiscal year through March to around 7.5 percent, down from an earlier forecast of 9 percent.

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Don Buckley lost his job driving a Chicago Transit Authority bus almost two years ago and has been looking for work ever since, even as other municipal bus drivers around the country are being laid off.

At 34, Buckley, his two daughters and his fiancée have moved into the basement of his mother’s house same day payday loans. He has had to delay his marriage, and his entire savings, $27,000, is gone.

“I was the kind of person who put away for a rainy day,” he said recently. “It’s flooding now.”

Buckley is one of tens of thousands of once solidly middle-class African-American government workers

The worst week for the stock market in two months ended with a whimper in thin trading Friday.

The Dow Jones industrial average lost 4.8 percent this week, while the broader Standard & Poor’s 500 index fell 4.7 percent. Both had their worst weeks since Sept. 23.

Major indexes wavered throughout Friday’s session, which was shortened because it’s the day after Thanksgiving. Worries about Europe’s debt crisis flared up again after Italy had to pay 7.8 percent to borrow for two years at a debt auction. It’s another sign that investors are increasingly hesitant to lend to European countries.

The euro slipped to $1.32, losing 2 percent this week against the dollar. The drop puts the euro at its lowest level since Oct. 4.

Higher interest rates on government debt of Italy, Spain and other European countries have rattled stock markets in recent weeks. When borrowing costs climb above the 7 percent threshold, it deepens investor fears about a government’s ability to manage its debts. Greece, Ireland and Portugal had to seek financial lifelines when their interest rates crossed the same mark.

The Dow fell 25.77 points, or 0.2 percent, to close at 11,231.78. Of the Dow’s 30 stocks, Chevron Corp. lost 1.6 percent Friday, the biggest drop. Travelers Cos. Inc. added 1.2 percent, the largest gain.

The S&P 500 lost 3.12 points, or 0.3 percent, to 1,158.67. The Nasdaq composite dropped 18.57, or 0.8 percent, to close at 2,441.51.

Trading volume was 1.6 billion, less than half the daily average.

Markets were battered this week as governments in Europe and the U.S. struggle to tackle their debts. The Dow lost 248 points on Monday as a Congressional committee failed to reach a deal to cut federal budget deficits. It plunged 236 points Wednesday after investors balked at buying German government debt.

Retailers traded mixed on the Friday after Thanksgiving, the traditional start of the holiday shopping season and usually the busiest day of the year for retailers. Amazon.com Inc. dropped 3.5 percent. Wal-Mart Stores Inc. inched up 0.4 percent.

A record number of people were expected to show up at stores this weekend to take advantage of deep discounts. The National Retail Federation estimates that 152 million people will go shopping over the three days starting on Friday. That would be an increase of 10 percent from last year.

AT&T’s stock dipped less than 1 percent. The company said Thursday that it is budgeting to pay $4 billion in break-up fees if its attempted $39 billion takeover of T-Mobile USA from Deutsche Telekom falls apart.

Four stocks fell for every three that rose on the New York Stock Exchange.

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Singapore warned Monday that its economy will likely suffer a sharp slowdown next year as export demand from developed countries wanes.

Gross domestic product growth will probably drop to between 1 percent and 3 percent in 2012 from 5 percent this year, the Trade and Industry Ministry said.

“Singapore’s externally oriented sectors such as electronics and wholesale trade will continue to perform poorly,” the ministry said in a statement. “Although resilient domestic demand in emerging Asia will provide some support to global demand, it will not fully mitigate the effects of an economic slowdown in the advanced economies.”

Singapore, an island of 5.1 million people off the southern tip of the Malay Peninsula, relies on exports, finance and tourism to maintain one of the world’s highest levels of GDP per head.

Because of its high reliance on trade, Singapore is often a bellwether for the rest of Asia.

The economy grew 6.1 percent in the third quarter from a year ago and a seasonally-adjusted annualized 1.9 percent from the previous quarter, the ministry said.

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Spain paid an interest rate of nearly 7 percent to raise euro3.56 billion ($4.8 billion) in an auction of 10-year bonds Thursday, the highest rate since 1997 and a level seen as unsustainable over the long term.

The finance minister insisted, however, that a bailout was out of the question and said Spain’s overall debt load _ about 70 percent of gross domestic product _ is manageable.

“The sustainability of our debt is beyond any doubt,” Elena Salgado told Cadena Ser radio.

She said the 2011 budget had allotted euro27 billion for debt interest payments and “even with all this tension we are going to spend 3 billion less.”

Salgado also said at least 12 of the 17 countries that use the euro are seeing their borrowing costs rise, so Spain is not a special case.

“We are seeing systematic attacks on our sovereign debt” the minister said. “Today it is Spain, yesterday it was Italy, the day before that it could have been Belgium, and tomorrow it could be any other country, even the ones considered central to the euro, such as Austria or France.”

Thursday’s rate of 6.97 percent compared with 5.43 percent in the last such auction Oct. 20.

Demand was relatively weak. The amount of debt sold came in under the euro4 billion maximum target set by the Treasury and the bid to cover ratio was 1 cheap payday advance.54, compared with 1.76 last time.

After the auction, yields on Spanish 10-year bonds shot up. In early afternoon they stood at 6.79 percent on the secondary market. That was 4.93 percentage points above the yield of the equivalent benchmark German bund.

Spain’s chapter of the European debt crisis has engulfed the campaign for Sunday’s general elections.

Opposition conservatives are expected to score a landslide win over the ruling Socialists, saddled with an economy that has 21.5 percent unemployment, posted zero growth in the third quarter and is not expected to improve much next year.

Spain is struggling to recover significant economic growth after enduring nearly two years of recession prompted in part by the collapse of a real estate bubble. It is the periodic focus of fears it will be the next eurozone country to require a bailout, after Greece, Ireland and Portugal.

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