Financial life in a big town

Forecasters say Jova has become a hurricane out in the Pacific Ocean.

The U.S. National Hurricane Center in Miami said Saturday evening that Jova had maximum sustained winds near 75 mph (121 kph) but was still far from land. It was moving east-northeast at 3 mph (5 kph) and was about 440 miles (708 kilometers) west-southwest of Manzanillo, Mexico.

No coastal watches or warnings had been issued, but current forecast models show Jova it could make landfall over Mexico by Tuesday or Wednesday.

Meanwhile, Irwin has weakened to a tropical storm in the eastern Pacific, about 930 miles (1497 kilometers) southwest of the southern tip of Baja, Calif personal loans for people with bad credit. It was expected to start moving toward land in the coming days. Irwin had maximum sustained winds of about 70 mph (113 kph).

In the Atlantic, Tropical Storm Philippe continued to weaken far from land.

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The European Central Bank left interest rates unchanged on Thursday, holding off on a step many think the eurozone’s chief monetary authority will eventually take by year-end to support a weakening economy.

Markets waited for bank head Jean-Claude Trichet’s last news conference to see whether the ECB would announce new measures to support shaky banks under pressure from the Greek debt crisis.

The bank’s 23-member governing council left the refinancing rate at 1.5 percent, ignoring calls to loosen its policies to fight mounting signs of a slowdown in the eurozone economy.

The bank’s caution contrasted with the Bank of England’s decision to buy another euro75 billion ($116 billion) in securities from banks, a step which expands the supply of money in the economy and can promote economic activity.

That makes the Bank of England the first major central bank to move to counterract the slide in global growth that has intensified since this summer.

Most think the ECB waited this month because the latest inflation figures were higher than expected and it typically likes to signal rate moves at least a month ahead of time. It hadn’t done so ahead of Thursday’s meeting. Rate cuts tend to boost inflation.

Trichet will turn the job over to Bank of Italy head Mario Draghi at the end of the month. But the European debt and banking crisis means his last days in office are not offering any chance for a leisurely goodbye.

Markets are now waiting to see if Trichet will announce at the news conference additional measures to steady Europe’s banks. Possible steps include opening the central bank’s credit window and offering unlimited loans to banks for six or 12 months or both. Normally the longest lending period is three months. The bank loaned euro49.75 billion ($66 billion) to 114 banks in August as an anti-crisis measure.

Eurozone leaders fear the effects on their banking system from Greece’s debt crisis. A default on Greek bonds could inflict losses on the banks that hold Greek bonds. Those default fears are keeping banks from lending to each other for fear they won’t get paid back, leaving some European banks dependent on ECB credit to keep running.

Experts and investors are increasingly resigned to the view that Greece will eventually default on its debts. The country faces bankruptcy if it does not get its next euro8 billion installment of money under a 2010 bailout; the European Commission, International Monetary Fund and ECB say a decision won’t come until the end of the month.

European Union finance ministers have asked the bloc’s banking supervisor to draw up a report on banks’ capital levels, a European official said Thursday, amid fears that the worsening debt crisis could trigger another credit crunch.

Banks’ ability to survive steeper losses on Greek debt will be one of the scenarios assessed in that report, the official said.

German Chancellor Angela Merkel said Wednesday she was in favor of a coordinated recapitalization of European banks if that was deemed necessary.

European officials have already agreed to give their euro440 billion bailout fund the power to bail out troubled banks. But the changes agreed in July are still awaiting votes in some national legislatures, and the spread of the crisis has led many economists to conclude the fund is too small to effectively reassure markets.

That delay leaves the ECB reluctantly holding the line against the crisis. It has bought Italian and Spanish government bonds, keeping those countries borrowing costs from rising because of market contagion from Greece. Greece, Ireland and Portugal all had to turn to the eurozone countries for bailouts because rising interest rates and fears of default left them unable to affordably refinance their debt burdens. Those countries are small enough to bail out, but Italy, the No. 3 eurozone economy, is too large for that.

The ECB has said it expects the eurozone bailout fund, the European Financial Stability Facility, to take over the bond purchases as soon as it can.

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CLAYTON

U.S. stocks alternated between gains and losses Friday after European finance ministers pushed back a decision about how to solve the region’s debt crisis.

Blackberry maker Research in Motion Ltd. lost one-fifth of its value after reporting sharply lower revenue and income. The company is facing stiff competition from Apple Inc.’s iPhone and phones that use Google Inc.’s Android software.

At 11:17 a.m. Eastern time, the Dow Jones industrial average rose 5 points to 11,439. It had been up as many as 99 points earlier.

The Standard & Poor’s 500 index lost 1, or 0.1 percent, to 1,208. The Nasdaq composite index rose 2, or 0.1 percent, to 2,609.

Traders are waiting for news from a gathering of European finance ministers. The group is meeting in Poland to discuss a debt crisis that threatens to engulf several countries. They are joined by Treasury Secretary Timothy Geithner, who helped craft the response to the 2008 financial crisis.

The group will not decide until next month whether Greece has qualified for its next round of bailout money, its leader said early Friday. Geithner had urged his counterparts to provide a decisive solution to the crisis.

European Central Bank President Jean-Claude Trichet is expected to speak after European markets close, around midday in New York.

Analysts said some stock-sellers were pocketing profits after a week that lifted shares nearly 5 percent. Antony Conroy, head trader for BNY ConvergEx Group, said traders’ sentiment is mixed, with some buying undervalued stocks and others selling on long-term concerns about Europe.

“Even though we’ve had a good couple of days, people still believe there’s a good chance that the credit crisis in Europe is going to cause something like a 2008 event,” he said.

Stocks rose every day this week, their first four-day winning streak since August. The rally lifted the Dow and the S&P by about 5 percent. The Dow is still down 1 percent for the month, the S&P 0.3 percent.

Research in Motion said after the market closed Thursday that it lost ground against competitors in the three months ended Aug. 27. The company sold far fewer tablets and phones, struggling in a category dominated by the iPhone and iPad.

The troubled company has lost more than half of its market value this year. RIM said July that it would lay off 2,000 workers, about 10 percent of its work force.

Stocks have not risen for five days in a row since the week ending July 1, before nervousness about the sluggish economy and Europe sent shares falling.

Markets surged on Thursday after five central banks said they would offer unlimited dollar loans to the European banks. Some banks have been unable to borrow to pay for their daily operations. They can’t get loans from other banks because no one knows how much bad debt they hold.

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Japan’s government has unveiled a $100 billion loans program to ease the strains of a strong yen and encourage companies to turn adversity into opportunity.

The one-year facility announced Wednesday by the finance ministry aims to prompt Japanese companies to shift their yen holdings into foreign currencies and spur overseas mergers and acquisitions.

A strong yen erodes the value of exporters’ profits abroad but it also makes potential acquisitions outside of Japan less expensive.

Through the program, the government will send foreign currency reserves to the Japan Bank for International Cooperation. The state-operated bank would then extend loans to commercial banks so they can help companies with overseas investments and secure natural resources.

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Tropical Storm Harvey has made landfall over Belize and is expected to move into northern Guatemala later in the day.

The U.S. National Hurricane Center in Miami said Saturday that Harvey was centered about 35 miles (56 kilometers) south of Belize City, moving west at about 13 mph (21 kph). Maximum sustained winds were 60 mph (97 kph).

Harvey is expected to start weakening now that it’s moving over land. The storm is expected to bring as much as 6 inches of rain to parts of Honduras, Guatemala, Belize and Mexico’s Yucatan Peninsula. Forecasters say flash floods and mudslides are possible.

Tropical storm warnings were still in effect for the northern coast of Honduras from Punta Sal westward, as well as coastal Belize and Guatemala.

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The Toronto stock market headed sharply higher following a bruising series of losses as traders look to an afternoon announcement by the U.S. Federal Reserve for direction.

The S&P/TSX composite index gained 120.57 points to 11,791.53.

The Canadian dollar was down 0.2 of a cent to 100.72 cents US after earlier moving below parity, going as low as 99.95 cents US.

The Fed is holding its regularly scheduled meeting on interest rates and while the central bank won’t be moving on rates, investors will be looking for any hint about plans for any further stimulus measures to soften the blow of a slowing economy.

The main Toronto index has fallen almost 14 per cent just since July 22, reflecting a lack of confidence that political leaders and central bankers can manage Europe’s debt crisis and mounting expectations of the U.S. going back into recession.

A downgrade of U.S. government debt by Standard and Poor

The economy worsened in about half the country earlier this summer because of weak home sales and signs of a slowdown in manufacturing.

A Federal Reserve survey said Wednesday that seven of the Fed’s 12 bank regions reported slower growth in June and early July compared with the spring. That’s a worse showing than in the previous survey.

Of the remaining five districts, four reported modest growth. A fifth, the Minneapolis district, said its economy was disrupted by bad weather and the shutdown of Minnesota’s state government.

The job market remained weak in most districts, the report said. Employers added few jobs in June, the government said earlier this month.

Droughts and severe flooding badly hampered seven districts with large agricultural sectors, the report said.

Manufacturing output rose overall. But many districts reported only “steady or slowing” growth, the Fed’s report said. Only two districts reported rising manufacturing activity. Companies in three districts _ Philadelphia, Richmond and Atlanta _ reported slower growth.

The overall weak picture of the national economy echoes recent data on hiring and manufacturing. Economists expect growth for the April-June quarter, which will be reported Friday, to fall below 2 percent, the second straight quarter of anemic expansion.

The report, known as the “Beige Book,” is based on anecdotal information gathered by officials at the 12 Fed regional banks. It is released eight times a year and provides an on-the-ground snapshot of the economy. Wednesday’s report covered the roughly seven weeks between May 27 and July 15.

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Minnesota may soon have an end to its government shutdown, but re-starting the machinery of the state will probably take a few days.

Democratic Gov. Mark Dayton and Republican legislative leaders fell short Sunday of their goal of being ready for a special session Monday to finalize a deal struck late last week. They issued a joint statement saying the work “continues to move in a positive direction” but wasn’t over.

Dayton spokeswoman Katharine Tinucci said they didn’t expect to make any more news later in the night.

“Considerable progress has been made,” said the statement, issued Sunday night. “A special session will be called as soon as our work is completed, and all bills have been reviewed and agreed upon.”

If rank-and-file lawmakers sign off on the deal, it will end a shutdown that’s the longest in recent U.S. history.

But for residents whose lives have been disrupted, the relief won’t be immediate.

“It’s not like we can just flip a switch,” said Doug Neuville, a spokesman for the state Department of Public Safety, which has halted renewal of driver’s licenses and vehicle tabs during the shutdown. The computer systems used to issue renewals take time to bring back online, and the services won’t be immediately available, he said.

Same goes for closed rest stops and state parks. State budget office spokesman Jonathan Pollard said those must be cleaned and thoroughly checked before people can use them again. Road construction projects idled by the shutdown are likely to require safety checks before work can resume.

Licensing hang-ups for beer distributors could take several days to unsnarl as well, as returning state workers deal with backlogs that built up during the shutdown.

“It depends on the level to which the services were down,” Pollard said. “If you have an agency that’s mostly been up and functioning, it may be easier than if you have an agency that’s been completely shut down.”

The Dayton administration will likely consider the shutdown officially over once the governor signs new budget bills into law, Pollard said.

It’s not clear yet when that might happen. The governor and Republican leaders agreed late Thursday to the framework of an agreement to end the shutdown, and they spent the weekend trying to fill in the details. Once a session starts, Republican leaders need to get the spending bills through the House and Senate and to Dayton’s desk, which means getting rank-and-file Republicans to sign on to a deal that some will have a hard time with.

One big question after the last shutdown was whether state workers would be able to claim back pay for lost time.

But Michael Kuchta, spokesman for AFSCME Council 5, said a memorandum of understanding between unions and the Dayton administration before the shutdown granted laid-off workers the right to apply for unemployment with the understanding that they couldn’t claim lost pay when recalled.

The state could still face lawsuits, however, from businesses and citizens who decide they were harmed by the shutdown.

Tom Hanson, who was former Gov. Tim Pawlenty’s lead budget negotiator during the 2005 shutdown, said he hoped contingency plans drawn up then would serve the state well now.

“They are better prepared today, in 2011, than we were in 2005,” Hanson said. “There are detailed plans for starting up government after a shutdown.”

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Online search leader Google Inc. is taking yet another stab at social networking, as it tries to go up against Facebook in this wildly popular and lucrative segment of the Internet. This time the project is called Google+ and it aims to make online sharing more like real life.

Other social networking tools make selective sharing within small groups difficult. They don’t allow for the nuances people are used to in offline communication because they call so many acquaintances “friends,” said Vic Gundotra, senior vice president of engineering at Google.

Many Facebook users, for instance, find it difficult to limit their status updates to small groups of people so their co-workers aren’t exposed to party photos or their parents aren’t privy to flirtatious posts on their “wall.” Though Facebook has tried to address this with a much-hyped “Groups” feature, it’s not clear how many people use it.

Google, which dominates Internet search with a firm hold on two-thirds of the U.S. market, has been experimenting with different social tools since late 2009. “Buzz” was one major mishap. The product was a social network attached to Google’s popular Gmail service, and it wound up exposing email contacts that users did not want to share. Google eventually agreed to submit to independent audits of its privacy controls every other year for the next two decades as part of a Federal Trade Commission settlement payday loans.

Google shut down another attempt at online sharing, Google Wave, last August after unveiling it with much fanfare in 2009.

More than a year in the works, the project Google unveiled Tuesday lets users share things with smaller groups of people through a feature called “Circles.” This means only college buddies, say, or your favorite co-workers can see the photos, links our updates that you post.

Altimeter Group analyst Charlene Li has high hopes for the friend grouping feature. She said her biggest pet peeve with Facebook is its existing friend management tools. She noted that millions of people already use Google to share things with others via email, and Google+ looks like a natural extension of this type of sharing, making it more functional and organized.

“I think Facebook is going to have to up its game,” she said.

Google+ is undergoing what the company calls a “field trial,” so it’s accessible by invitation only and not yet available to the public. The company declined to say when it’ll be more widely available.

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