Financial thoughts

Employment will improve more this year than economists previously estimated, helping the world

Dallas Federal Reserve Bank President Richard Fisher said on Thursday U.S. economic conditions were improving and repeated his view that further easing from the U.S. central bank was not needed.

“The tone is a lot better. It’s not brilliant; we don’t have enough new hiring taking place, (but we’re) definitely moving in the right direction,” Fisher told CNBC television.

“Given the improvement in the data that we’ve seen, things are getting better, not worse. I don’t see any need personally for QE3 here,” he said, referring to the possibility of a third round of central bond buying, or quantitative easing.

The Fed has held overnight interest rates near zero since December 2008 and has bought $2.3 trillion in government and mortgage-related bonds.

After the central bank’s last policy meeting on January 24-25, Chairman Ben Bernanke said policymakers were still debating whether further bond purchases might be warranted.

At that meeting the Fed also said it expected to keep rates “exceptionally low” at least through late 2014, a statement that Fisher cautioned against viewing as an iron-clad promise.

“The intention, as I view it, of the committee is to make sure that we adjust to the real economy, and as new data comes in, more anecdotal evidence on top of that is confirming what the data says, then we will adjust. The question is when,” he said,

“I happen to be a little more optimistic about economic movement here” than some others on the Fed’s policy-setting panel, said Fisher, who is not currently a voter on the committee.

The Dallas Fed chief said he had told his colleagues at the January meeting that the central bank’s post-meeting statement might be unduly dour, given what he was hearing from corporate executives around the nation.

“At the last meeting … I warned that I thought the statement was talking down the economy,” he said.

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The Bank of Japan added to monetary easing after exports tumbled and the economy contracted by more than forecast in the fourth quarter.

Governor Masaaki Shirakawa

Protesters and police fought running battles in central Athens Sunday, as Greek lawmakers debated legislation that would introduce severe austerity measures to stave off bankruptcy.

The clashes broke out around 6 p.m. local time (1600 GMT) as tens of thousands of people, responding to calls from unions to protest the measures, streamed into Syntagma Square facing Parliament.

Peaceful protesters fled to adjacent streets as a group of around 100 anarchists threw bottles, rocks, pieces of marble and firebombs at police, who responded with tear gas and stun grenades.

Police say an officer was injured by a flare shot at him from a gun. He was taken to hospital.

Among those affected by the tear gas were well-known composer Mikis Theodorakis, 86, and veteran leftist politician Manolis Glezos, 89. The two have been actively campaigning against Greece accepting a euro130 billion ($171.46 billion) bailout from the European Union and the International Monetary Fund that would help Greece avoid bankruptcy as early as next month, when a euro14.5 billion bond matures.

The legislation will also approve a bond-swapping deal with private creditors that will allow Greece to shave off at least euro100 billion ($131 billion) of its euro360 billion debt.

An ambulance picked up two injured people from the square. At least two more injuries have been reported, including a photographer who was hit by both a firebomb and a flare.

By 7 p.m. local time, clashes had spread beyond the square to other streets. A Starbucks near the Athens University main building was on fire.

The debate started shortly after 3:30 p.m. local time (1330 GMT), and will take about ten hours, finishing around midnight. At the start of the meeting, opponents of the legislation adopted a tactic of frequent and loud interruptions and objections but had calmed down by mid-evening.

Tens of thousands of protesters gathered in the square outside Parliament as the debate began, with more arriving constantly.

Communist-affiliated unions held a separate meeting at the same time and started marching to Parliament before halting their march as the clashes broke out.

Police fear if the communists and anarchists meet, further violence would erupt and are trying to keep the two apart. Authorities have deployed some 6,000 policemen in the city center.

Pro-Communist unionists had earlier driven through Athens’ neighborhoods, calling for people to participate in the demonstration. Protesters are expected to remain outside the building throughout the vote.

The two parties backing the coalition government have 236 deputies in the 300-member Parliament, but at least 13 conservative and seven Socialist lawmakers have declared they will vote against the legislation, defying their leaders’ threats of sanctions. Early Sunday, a conservative lawmaker resigned, repeating the actions of three Socialists earlier this week.

Debt-stricken Greece does not have the money to cover a euro14.5 billion ($19.12 billion) bond repayment on March 20, and must reach a vital debt-relief deal with private bond investors before then. Greece’s woes have threatened its future in the 17-country zone that uses the euro currency.

The Europeans are waiting to see Greece finally act on their commitments.

German Finance Minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper Sunday that Greece “cannot be a bottomless pit.”

“That’s why the Greeks must finally put a bottom in,” he added. “Then we can put something in too.”

Highlighting previous promises he said weren’t kept, Schaeuble said “that is why Greece’s promises aren’t enough for us any more,” according to the report.

Asked whether Greece has a long-term future in the eurozone, Germany’s vice chancellor told ARD television “that is now in the hands of the Greeks alone.”

Philipp Roesler said in the interview which was broadcast Sunday that what matters is not just Greece making pledges _ “we want … the Greek parliament also to approve laws and, as far as possible, take the first steps to implement what has been agreed,” .

“Only when that happens, only then can there be new aid _ and Greece urgently needs that,” said Roesler, who is also Germany’s economy minister.

Roesler acknowledged that Greece faces “difficult decisions” but stressed that Germany wants it to be able to get out of trouble.

“It is not enough just to give financial aid _ they must tackle the second cause of the crisis, the lack of economic competitiveness,” he said. “For that, they need … massive structural reforms. Otherwise Greece will not get out of the crisis.”

Germany is ready to help, Roesler said, but “we only can and want to help if there is something in return from the Greek side.”

Introducing the legislation Sunday _ amid much interruption _ Socialist lawmaker Sofia Yiannaka said Parliament is called to approve painful measures with its back to the wall, adding that the intense pressure from Greece’s EU partners to pass the measures was the result of delays in implementing already agreed reforms.

“The delays have our imprint. We should not blame foreigners for them,” she said.

“We have finally found out that you have to pay back what you have borrowed … We used to say ‘poor state, but rich citizens’ because we tolerated tax evasion for populist reasons. Is this the country we want?” Yiannaka added.

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Fewer Americans applied for unemployment benefits last week, indicating the U.S. labor market continues to gradually improve.

Jobless claims dropped by 12,000 to a seasonally adjusted 367,000 in the week ended Jan. 28, the Labor Department said Thursday. That’s near a four-year low.

Economists surveyed by MarketWatch had estimated claims would drop to 370,000. Claims from two weeks ago were revised up by 2,000 to 379,000.

The four-week average of claims fell by a smaller 2,000, to 375,750. The monthly average smooths out seasonal quirks and provides a more accurate assessment of labor market trends, economists say.

The monthly average has shown little change in the past six weeks, but it also remains near a four-year low and stands at a level that usually suggests a healing labor market. Since claims reflect how many people lose their jobs, the recent decline likely indicates a slowdown in layoffs.

“The decline in the claims numbers does point to an improving labor market that will ultimately show up in more jobs,” said Joel Naroff of Naroff Economic Advisors.

Even if most companies aren’t laying off workers, however, that doesn’t mean they are eager to boost payrolls. The current pace of job creation — about 150,000 jobs a month — is far too slow to put millions of unemployed Americans back to work free credit score.

The past week’s claims data are likely to draw more than the usual scrutiny, coming on the eve of U.S. data on nonfarm payrolls and joblessness for January. The economy likely added 125,000 jobs in January and the unemployment rate probably stayed even with December’s 8.5 percent, according to a MarketWatch survey.

Economists say the U.S. would have to add about 250,000 jobs a month for several years to bring unemployment back under 6 percent. The jobless rate ranged between 3.8 percent and 6.2 percent in the seven years before the 2007-2009 recession.

Most economists expect the level of jobless claims to settle in the 375,000 range in the next several months.

Also Thursday, the Labor Department said continuing claims decreased by 130,000 to a seasonally adjusted 3.44 million in the week ended Jan. 21. Continuing claims are reported with a one-week lag.

About 7.67 million people received some kind of state or federal benefit in the week ended Jan. 14, virtually unchanged from the prior week.

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European leaders maintained pressure on Greece to accept terms demanded by international lenders during a weekend of talks to avert a financial collapse.

Interim Greek Prime Minister Lucas Papademos struck a tentative deal with party leaders to boost economic competitiveness and extend spending cuts after euro-area finance chiefs told them an increase in the 130 billion-euro ($170 billion) aid package wasn

Private nonresidential construction may pick up this year, as demand grows for new U.S. projects.

The Architecture Billings Index held at 52 last month, a sign of expansion, according to the American Institute of Architects. The commercial and industrial component — a proxy for private building activity — climbed to 54.1 in December, the highest in 10 months, the Washington-based association said Jan. 18.

The monthly survey of U.S.-based architecture firms is a leading indicator of nonresidential construction, said Kermit Baker, chief economist for the association.

An official at the main airport serving Yemen’s capital says that protesting troops have closed the runways with armored vehicles, demanding that the commander of the country’s air force be replaced.

The garrison at Sanaa airport’s attached military air base is demanding the removal of Maj. Gen. Mohammed Saleh, the brother of outgoing President Ali Abdullah Saleh, the official says.

He says the Sunday protest has caused two flights to be diverted to the airport at the southern city of Yemen.

Another official at the airport in the southern city of Taiz says troops there have been staging a similar protest demanding the ouster of their commander since Saturday. Both officials spoke anonymously in accordance with regulations.

Yemen has experienced an 11-month uprising against Saleh’s rule.

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International Monetary Fund Managing Director Christine Lagarde joined world financial and trade organization chiefs in warning policy makers gathering in Davos, Switzerland next week against fiscal cuts that jeopardize growth.

Lee Enterprises Tuesday reported a profit of $14.624 million, or 32 cents per share, for the quarter that ended Dec. 25.  That compares to $18.980 million, or 42 cents per share, in the same quarter of 2010.

The newspaper company, owner of the St. Louis Post-Dispatch, said the year-over-year comparison would be positive if not for refinancing costs and other unusual items.  Excluding such matters, profits would equal 38 cents per share for the recent quarter, compared to 32 cents a year earlier.  

The company filed for bankruptcy last month, submitting a reorganization plan pre-approved by the vast majority of its creditors.  Chief Financial Officer Carl Schmidt said the court will be asked to set Jan. 30 as the date to make the plan effective and conclude the bankruptcy. 

Operating revenue was down 3.9 percent in the December quarter compared to a year earlier payday loans online. Operating expenses were down 5 percent, excluding unusual items, and the work force was down by 7 percent.

As in earlier periods, the company showed sharp gains in digital advertising while print ads, which make up the bulk of its advertising, continued to decline. Combined print and digital advertising was down 6.1 percent. 

CEO Mary Junck said she expects slowly improving revenue trends in 2012.  “Our refinancing agreements, along with our continued strong cash flow, will provide a solid financial footing as we continue reshaping Lee for future growth,” said Junck.

Lee, based in Davenport, Iowa, owns 48 daily newspapers, holds an interest in four others, and owns 300 specialty publications in 23 states.

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