Financial life in a big town

Whether people celebrate or criticize Occupy Wall Street, the movement has reinvigorated calls for local buying just in time for the manic holiday shopping season.

Buying local and American-made became a battle cry for some in the movement that blames big business greed for shuttering American operations and shipping those jobs overseas.

“Some people talk about buying local and not supporting large chain stores, but really I think we want to encourage people to think consciously about where they shop,” said Zach Chasnoff, 33, of south St. Louis.

Chasnoff has wielded a bullhorn at a few Occupy St. Louis rallies, though he said he couldn’t speak as a representative of a movement. He said he’d been waiting for an opportunity to ignite this particular discussion.

Chasnoff owns a house painting business that fluctuates from two to seven employees during his busy season. When the bottom fell out of the economy in 2008, he was virtually unemployed for about seven months and didn’t know if he’d keep his house, he said. Meanwhile, bank bailouts and news of continued executive bonuses infuriated him. He blames greed for companies’ transferring jobs overseas and cheap foreign goods for undercutting American-made items.

Many economists challenge that logic, saying that free trade ultimately benefits the U payday loans.S.

“It feels almost anti-patriotic to buy goods made elsewhere right now. You are perpetuating the loss of manufacturing jobs,” Chasnoff said, echoing long-standing protests by some against, for instance, buying foreign cars.

Buying local, on the other hand, puts consumers, not corporations, in control, he said.

Would it work?

Steve Farazzi, a professor of economics at Washington University, said that the wage disparity concerns at the root of the Occupy Wall Street movement wouldn’t be solved by shopping at boutiques and farmers markets.

“I’d have a hard time telling people that their holiday shopping patterns will have an important impact on income distribution,” Farazzi said.

If globalization has killed American jobs and driven down wages, then the tool to combat the trend would be higher wages in emerging markets such as China, not necessarily closing operations there. China’s extremely cheap labor is the problem for American workers, not the fact that Chinese workers have jobs formerly held by Americans, Farazzi explained.

Rising global wages would level the playing field for American workers, he said, and it would increase the demand for all goods if we have more people who can afford to buy. But Farazzi acknowledged that a push to boost wages for Chinese workers

Peabody Energy Corp. on Wednesday announced that it has increased its stake in Australia’s Macarthur Coal Ltd. beyond 90 percent — the threshold beyond which it can force remaining shareholders to sell their interests.

The announcement means St. Louis-based Peabody now has full control over the mining company, ending an 18-month quest. It also means Peabody will pay out an extra $100 million, bringing the total value of the acquisition to almost $5 billion.

Peabody last month promised to sweeten the offer slightly, to $16.40 a share from $16.14, to help increase its stake beyond 90 percent, giving it fuller control of the company.

Acquiring 100-percent of Macarthur “brings clear strategic and financial benefits,” Gregory H. Boyce, Peabody’s chief executive, said in a statement. He said the company “looks forward to completing operational improvements, accelerating the realization of synergies and advancing Macarthur’s growth pipeline.”

Queensland-based Macarthur controls 270 million tons of coal reserves and operates mines that produced about 4 million metric tons last year in the face of severe flooding that restricted output.

The additional sales volume is small for Peabody, which sold almost 250 million tons of coal worldwide last year. But Macarthur is the world’s largest exporter of pulverized injection coal — a commodity that’s in high demand from steelmakers. The bulk of Peabody’s sales volume is lower-priced coal that’s burned for electricity generation.

The acquisition also continues Peabody’s rapid expansion in Australia, a coal-rich country nearer to energy hungry China.

Peabody failed in an effort to gain a controlling stake in Macarthur last spring, offering as much as $3.8 billion. In July, the company made another bid with a minority partner, steelmaker ArcelorMittal, which was already a 16-percent shareholder.

Luxembourg-based ArcelorMittal dropped out and agreed to sell its interest to Peabody after China’s Citic Resources, Macarthur’s largest shareholder, agreed to accept the cash takeover offer, giving the suitors a majority stake.

Peabody recently sold $3.1 billion of notes to help finance the acquisition.

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OTTAWA

Markets around the world gave the thumbs-up to a new bailout package to solve the European debt crisis Thursday, but there are still plenty of questions about just what it all means, where the money

Stocks in Europe recouped some recent losses on Wednesday on hopes that European policymakers were thrashing out a plan to shore up the banking sector, which has been savaged of late over fears of a Greek debt default.

In an interview with the Financial Times newspaper, European Commissioner Olli Rehn hinted at a possible bank recapitalization plan. The comments started a stock market rally when they first emerged, late Tuesday on Wall Street. With an hour to go, sentiment turned around massively _ from being nearly 2 percent lower, the Standard & Poor’s 500 index ended up over 2 percent higher.

The upbeat finish on Wall Street failed to give Asian stocks much of a fillip but European markets rose in early trading, despite a three-notch downgrade of Italy’s sovereign debt to A2 by the Moody’s credit rating agency and another day of widespread strikes in Greece, the epicenter of Europe’s debt woes.

“Traders on both sides of the Atlantic seem set to look for the positives here at least in the short term and with stocks once again trading down at discount levels, there may well be a temptation to start cherry picking some bargains,” said Cameron Peacock, market analyst at IG Markets.

Germany’s DAX was 2 percent higher at 5,320 while the CAC-40 in France rose 2.3 percent to 2,916. The FTSE 100 index of leading British shares was 1.9 percent higher at 5,039.

The euro was also shored up by reports of a recapitalization plan, trading 0.1 percent higher at $1.3325.

However, investors will be careful not to get too carried away. After all, sentiment has fluctuated wildly between despair and hope over the 21 months or so that Europe has been mired in its debt crisis.

“Whilst it is encouraging that EU leaders are addressing the perceived weakness of the financial system, it would not be unusual for the initial positive reaction to be followed by concern on delay and lack of agreement amongst member states,” said Adam Cole, an analyst at RBC Capital Markets business card.

Franco-Belgian bank Dexia will be in the spotlight once again Wednesday amid mounting expectations that it will be broken up somehow, possibly this week.

Dexia is at the forefront of investor concerns over its exposure to potentially bad debt from Europe’s most indebted countries. With the markets bracing for a Greek debt default soon, investors are concerned about what bonds Europe’s banks are holding, and banks themselves have become reluctant to lend to one another.

At one point Tuesday the bank’s share price plunged nearly 40 percent, prompting France and Belgium to launch crisis-management initiatives designed to prevent a complete rout. It finished over 20 percent lower on Tuesday.

Hopes that some sort of salvage operation will be mounted in the coming days has helped the stock rebound around 3 percent in early trading Wednesday.

In Asia, the mood was less benign, with Japan’s Nikkei index closing 0.9 percent lower at 8,382.98 and Korea’s Kospi index ending 2.3 percent down at 1,666.52.

Stock markets in Hong Kong and mainland China were closed for a holiday.

The more buoyant tone in European stock markets helped oil prices rebound too. Benchmark oil for November delivery rose $2.53 to $78.20 a barrel on the New York Mercantile Exchange.

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Lemay

Officials say a strong earthquake has hit near Japan’s eastern coast, but there is no danger of a tsunami.

Japan’s Meteorological Agency says the quake struck Monday evening and registered a preliminary magnitude of 6.0. It was centered off the coast of Ibaraki, about 140 miles (220 kilometers) east of Tokyo, at a depth of 20 miles (30 kilometers).

The agency says there is no danger of a tsunami. No injuries or damage have been reported.

Some 20,000 people died or were left missing across Japan’s northeastern coast after a massive earthquake and tsunami on March 11. The disaster damaged a nuclear power plant, forcing another 100,000 people to leave their homes because of a radiation threat.

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Italy’s government has approved euro45 million ($64.12 million) in cuts over the next two years to balance the budget by 2013 to meet demands of European Central Bank.

The Cabinet approved the measures Friday evening despite fierce resistentence from local government officials who denouced the emergency austerity measures as socially unjust.

Premer Silvio Berlusconi told a news conference that the the measures respond to requests from the ECB, which demanded a balanced budget a year earlier than anticipated as well as structural reforms to promote growth.

The Cabinet approved euro20 billion in cuts for 2012 and euro25 billion for 2013.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

ROME (AP) _ Italy’s government has approved euro45 million ($64 low fee payday advance.12 million) in cuts over the next two years to balance the budget by 2013 to meet demands of European Central Bank.

The Cabinet approved the measures Friday evening despite fierce resistentence from local government officials who denouced the emergency austerity measures as socially unjust.

Premer Silvio Berlusconi told a news conference that the the measures respond to requests from the ECB, which demanded a balanced budget a year earlier than anticipated as well as structural reforms to promote growth.

The Cabinet approved euro20 billion in cuts for 2012 and euro25 billion for 2013.

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A unit of Warren Buffett’s Berkshire Hathaway Inc. has bid $3.25 billion for insurer Transatlantic Holdings.

Berkshire’s National Indemnity Co. is offering $52 per share in cash for Transatlantic. That tops the price the company would get in its agreement to be bought by Allied World Assurance Co.

In a letter released by Transatlantic on Sunday, National Indemnity said its offer isn’t subject to due diligence or financing conditions. The company said it expects a formal response from Transatlantic no later than the close of business Monday.

If the offer is accepted, National Indemnity would want a $75 million break-up fee if the transaction did not close by the end of the year.

Transatlantic’s board said it would carefully weigh the latest offer by National Indemnity and asked shareholders to wait until it has a chance to judge it before taking action. But the company also said that it reaffirmed its recommendation of the deal with Allied World Assurance, which is based in Switzerland.

Under that deal, Transatlantic and Allied World would combine in what the companies are calling a merger of equals. Shareholders of Transatlantic would receive 0.88 of an Allied World share for each share they hold of Transatlantic.

The companies say the deal, which calls for Transatlantic shareholders to receive a 58 percent stake in the combined company and for Transatlantic to name 6 of the 11 board members, will put them on better competitive footing because of the combined company’s larger size.

Allied World CEO Scott Carmliani would head the combined company and Transatlantic CEO Robert Orlich would retire.

Last month, Transatlantic rejected a hostile takeover bid from fellow insurer Validus Holdings Ltd. The board also adopted a one-year stockholder rights plan, commonly called a “poison pill,” a move used to avoid hostile takeovers.

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Less than two weeks away from an unprecedented government default, President Barack Obama sought Friday to pressure House Republicans to come around to a deal that he insisted must include new taxes as well as unpalatable spending cuts.

At the same time, even with no clear end in sight to negotiations that have dragged on for weeks, the president asserted that the U.S. has never defaulted on its debt and won’t do so now.

“The United States of America doesn’t run out without paying the tab. We pay our bills. We meet our obligations,” Obama said at a town hall meeting at the University of Maryland, College Park.

Asserting that the American people as well as many in Congress are on board with his approach of mixing higher taxes for some with steep spending cuts, the president said, “The only people we have left to convince are some folks in the House of Representatives and we’re going to keep working on that.”

House conservatives have resisted higher tax revenues and some Democrats have come to fear Obama would give ground and agree to a deal with spending alone. Obama made clear that taxes needed to be in the mix.

“If we only did it with cuts, if we did not get any revenue to help close this gap between how much money’s coming in and how much money’s going out, then a lot of ordinary people would be hurt and the country as a whole would be hurt and that doesn’t make any sense. It’s not fair,” Obama said.

“This isn’t about punishing wealth, it’s about asking people who’ve benefited the most over the last decade to share in the sacrifice,” the president said.

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