Financial life in a big town

A Senate committee has approved President Barack Obama’s two nominations to fill vacancies on the Federal Reserve’s board. But prospects for a quick confirmation in the full Senate are uncertain.

The Senate Banking Committee approved by voice vote the nominations of Jeremy Stein, a Harvard economics professor, and Jerome Powell, an investment banker who served in the George H.W. Bush administration.

Obama nominated Stein, a Democrat, and Powell, a Republican, in hopes that pairing nominees from both parties could overcome Republican objections paperless payday loans. The Fed board hasn’t operated with a full seven members since 2006.

But one Republican senator, David Vitter, a critic of the Fed’s policies, has expressed opposition. That won’t necessarily block the nominees’ confirmation. But it means the Senate won’t vote before its two-week break starts this weekend.

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It’s a testament to perseverance that Ricky Arnaz Crawford reached his late 20s before the voices in his head forced him out of steady employment.

Now he’s landed in a bureaucratic snafu on its way to the Missouri Supreme Court.

The Missouri Division of Employment Security is pursuing Crawford for $3,000 – the amount of it says Crawford was overpaid while collecting unemployment in 2009-10.

Crawford, a diagnosed schizophrenic, received the jobless benefits prior to a determination by another agency, the federal Social Security Administration, that he is “not mentally capable of full-time competitive employment.”

The finding enables Crawford to collect government payments for the disabled.

His attorneys contend the state erred in calculating the alleged overpayment.

“He didn’t get any more than he was entitled to, because it was Social Security that reduced the benefit by the amount of his unemployment,” says John Ammann, the director of the St. Louis University Legal Clinic.

Further, they argue, Crawford shouldn’t be on the hook even if he were overpaid – it was the government’s mistake, not his.

“Everybody understands that Arnaz Crawford is totally innocent of any wrongdoing, and that is the legal argument that we are making,” said Martin Perron, his pro bono St. Louis attorney.

Neither the Division of Employment Security nor the Social Security Administration would answer detailed questions about Crawford’s case. The high court is expected to entertain oral arguments this fall.

Crawford’s life has been defined by two constants – family and schizophrenia. His fraternal twin Laressa Crawford, diagnosed at the age of 12, has never been able to work.

Unwilling to accept a similar fate, Ricky Crawford forged ahead, despite the at-times debilitating delusions.

The Dardenne Prairie resident landed his first job at 15 and continued to draw a paycheck, working nearly non-stop at fast food restaurants, cleaning services and retail outlets. Then in early 2009, while stocking shelves at a Lake Saint Louis Wal-Mart, a manager summoned him to an office.

“I was hearing a voice, and I was yelling at myself,” Crawford says. “A customer heard me, and I was fired.”

A spokeswoman for Wal-Mart Stores Inc. was unable to confirm the details of Crawford’s employment. 

The dismissal prompted Crawford to check himself in for a brief and voluntary stay in a mental hospital. Citing a diagnosis of schizophrenia, major depressive disorder and borderline intellectual functioning, a physician subsequently recommended that Crawford apply for disability – a request initially denied by the Social Security Administration.

Crawford appealed the ruling and applied for state unemployment benefits in July 2009 as he waited for the Social Security Administration to reconsider its decision.

Eight months later, the Social Security Administration decided in his favor.

The ruling meant Crawford was eligible for disability payments from March 2, 2010 forward, as well as retroactive compensation for the time that elapsed – a little over a year – as Social Security considered the appeal.

Court documents indicate Social Security Administration and Division of Employment Security officials calculated the amount the federal government needed to deduct from the retroactive disability payments to balance the jobless benefits Crawford accrued as he waited out the appeal process.

Social Security Administration spokeswoman Dorothy Clark said consultations between officials of the federal agency and representatives of state unemployment systems are common in resolving potential overpayments from disability and jobless claims.

But less than a month after Crawford became eligible for disability, the Division of Employment Security – as part of a larger crackdown on over-payments to the unemployed – demanded that Crawford repay $3,000.

It remains unclear whether the agencies made mistakes in calculating Crawford’s benefits. But even if they did, Crawford shouldn’t be on the hook, his lawyers argue.

“The two systems interacted. They did what they were supposed to do,” Ammann said. “You can’t go back now and change it.”

Crawford’s lawyers are challenging a portion of the statute governing unemployment law that allows the state to seek restitution “using any methods under the law,” Perron said.

“It doesn’t give them the right to demand payment when a person is totally innocent of wrongdoing,” he said.

A representative of a leading advocacy organization said Crawford is far from the first mentally disabled individual caught up in disputes with state and federal entitlement bureaucracies.

“For better or worse, this is a dual system based on two factors in conflict with one another,” said Andrew Sperling, director of federal affairs for the National Alliance on Mental Illness. “One is designed with the presumption that you are able-bodied, able to work, and therefore eligible to collect unemployment insurance. The other assumes you are disabled and presumably unable to work.”

In Crawford’s case, that conflict wound its way past several administrative law judges and labor referees before it landed on the steps of the Supreme Court earlier this year.

Ammann hopes the Supreme Court decision in the Crawford case will provide the Division of Employment Security with better direction on issues arising from over-payments and the benefits awarded to displaced workers who, as it happens, are also disabled.

Perron enlisted Ammann and the the SLU law clinic to assist him last month during the preparation of briefs the court will take into consideration as the matter moves toward a formal hearing.

For his part, Crawford wants the problem with the state to go away. And he wants to work again. As required by unemployment insurance rules, Crawford continued to apply for jobs while collecting unemployment and waiting for his appeal to be heard. He accepted a couple of offers from fast food restaurants, only to have putative employers ask him to leave when the voices returned during training and orientation.

And while the symptoms of schizophrenia remain, Crawford has battled back with a regimen of medications. His progress has increased resolve to re-enter the workforce.

His mother, also named Laressa, has no doubt he will again persevere.

“He’s a determined kid, he always has been,” said Laressa Crawford. “I envy him, because he has his goals and he goes after them.”

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Oil prices are climbing near $108 per barrel as optimism grows about a strengthening global economy.

A private survey of the U.S. homebuilding industry on Monday found that companies are increasingly hopeful that home sales will rise in coming months. International Monetary Fund Managing Director Christine Lagarde also said over the weekend that the global economy has “stepped back from the brink.”

The rise in oil also follows last week’s rally on Wall Street.

Benchmark U.S. crude added 56 cents to $107.62 per barrel in New York while Brent crude fell by 17 cents to $125.63 per barrel in London.

Meanwhile, retail gasoline increased more than a penny over the weekend to $3.842 per gallon.

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China reported its biggest monthly trade deficit in at least a decade in February as imports rebounded after a Lunar New Year holiday slowdown, but a broader measure showed global and Chinese demand both weakening.

Exports grew 18.4 percent over a year earlier to $114.5 billion, up from a 0.5 percent contraction in January, when factories were idled for a two-week holiday break, customs data showed Saturday. Imports jumped 39.6 percent to $145.9 billion, reviving after the previous month’s 15 percent decline.

China’s global trade deficit was $31.5 billion _ the biggest since at least the 1990s and a rare exception to a recent string of multibillion-dollar surpluses.

The deficit reflected China’s relatively strong growth amid Europe’s debt crisis and U.S. economic troubles. The economy expanded by 8.9 percent in the final quarter of 2011 and the government’s growth target this year is 7.5 percent.

But a broader measure, combining February’s strong showing with the January slump, showed growth in both imports and exports decelerating markedly.

January-February export growth slowed to 6.9 percent over the same two-month period last year, barely half of December’s 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December’s 11.8 percent.

Analysts look at the combined period to offset the impact of the Lunar New Year, which comes at different times in January or February each year, distorting trade figures as producers rush to fill orders before closing for two weeks or more.

Chinese demand for oil, iron ore, other commodities and industrial components has cooled as export-driven factories see orders fall and Beijing tries to steer its overheated expansion to a sustainable level.

China often records a trade deficit for one month early in the year as factories restock after the holiday, but rarely as large as February’s. Last year, the only monthly deficit was $7.3 billion in February, while surpluses hit a high of $31.5 billion in July.

January’s trade declines were the sharpest since the 2008 global crisis.

China is one of the biggest importers and the top export market for many of its Asian neighbors and commodity suppliers as far away as Australia and Africa, which means cooling demand could have global repercussions.

The International Monetary Fund is forecasting 8.2 percent growth this year but has warned that could fall by as much as half if Europe, China’s biggest export market, suffers a severe decline in activity due to its debt woes.

Exports to the 27-nation European Union contracted by 1.1 percent in February from a year earlier to $19.4 billion, the General Administration of Customs of China reported. China’s trade surplus with Europe contracted by 79 percent to $1.6 billion.

Despite the surge in imports, China’s politically sensitive trade surplus with the United States rose by 1 percent to $8.1 billion.

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China set a 2012 target for inflation that

Gas prices are spiking. But this time, Detroit is ready.

When prices soared in 2008, the city’s three U.S. automakers were caught flat-footed. They didn’t have competitive small cars and relied on trucks and SUVs for profits. When gas prices peaked at $4.12 in July of that year, sales from the Big Three plummeted more than 20 percent. That same month, sales of the fuel-sipping Toyota Corolla jumped 16 percent.

Fast forward to February 2012. Overall U.S. auto sales rose 16 percent to 1.1 million last month, largely on the strength of Detroit’s small cars. The annual sales pace hit 15.1 million, the best rate in four years.

This time, the Detroit Three saw a 13-percent sales increase. The difference: They have spent billions since 2008 to roll out new models such as the Dodge Dart and Chevrolet Cruze.

The timing is fortunate. Buyers are shifting to small cars again. Twenty-three percent of new-car sales were small cars in February, up from 17.9 percent in December, according to auto information site Edmunds.com.

So far, the shift isn’t as dramatic as it was in 2008, when small-car sales leaped to 27 percent of the market in May as gas suddenly spiked to near $4 per gallon. But prices have never been as high for this time of year. The price of a gallon of gas is up 46 cents this year to an average of $3.74. Analysts say gas could hit $4.25 by late April.

It bodes well for Detroit, which has a newfound confidence that it can weather the pain at the pump.

“We are very well positioned as a company to thrive in a world of escalating gasoline prices,” Bill Ford, chairman of Ford Motor Co, told The Associated Press in a recent interview.

Sales of the Focus small car, which Ford rolled out last year, more than doubled to 23,350, making it the best February for the Focus in 12 years. The new Focus gets up to 40 mpg on the highway, seven miles per gallon better than the 2008 model. The company’s sales were up 14 percent in February compared to the same month last year.

The story is the same at General Motors Co. In July 2008, Honda Motor Co. sold 12,266 Fit subcompacts, besting the Chevrolet Aveo by nearly 5,000 cars. But GM recently replaced the unappealing, underpowered Aveo with the sportier Sonic, which gets up to 40 mpg on the highway and has luxurious options like heated side mirrors. The company sold 8,000 Sonics in February, outselling the Honda Fit and Toyota Yaris combined.

Don Johnson, GM’s U.S. sales chief, said that three years ago, just 16 percent of the cars and trucks GM sold got over 30 mpg on the highway. Now, it’s close to 40 percent.

“We believe that this puts us in a very strong competitive position,” Johnson said Thursday. GM’s sales rose 1 percent in February.

Even Chrysler Group, whose lineup is weighted toward SUVs and big cars, will become a bigger player in the small car market this spring, when the new Dodge Dart goes on sale. In the meantime, its Fiat 500 subcompact had its best month ever in February, helping Chrysler’s sales climb 40 percent.

Carl Galeana, who owns a Fiat dealership north of Detroit, said sales were flat in the first part of the month but picked up the last two weeks as gas prices jumped. Shoppers were constantly asking about the fuel economy of the 500, which can get up to 38 mpg on the highway, Galeana said.

“All of the sudden, boom! We’re starting to sell Fiats,” Galeana said.

Japanese carmakers are also benefitting. In 2008, they saw sales slide because they couldn’t make their most efficient cars, like the Toyota Prius hybrid, quickly enough to satisfy demands. But this February, Toyota’s sales rose, led by a 52-percent jump in the Prius hybrid. Honda’s sales were also up, thanks to a 36-percent increase for the small Civic.

Bigger vehicles from both U.S. and Japanese automakers are also less vulnerable to gas spikes, since they get better gas mileage than they did in 2008. Ford’s new Explorer SUV, which came out last year, sits lower and is more aerodynamic to save fuel. It gets up to 28 mpg on the highway; its 2008 predecessor didn’t even get 20. Honda’s new CR-V gets up to 31 mpg compared to 27 for the 2008 model.

But many buyers are still choosing to downsize. Dennis Beshear of Monument, Colo., recently bought a new Focus for his 100-mile round-trip commute to Denver. The advertising salesman now gets around 35 miles per gallon, up from just 21 mpg in the 2006 Nissan Murano crossover SUV he used to drive. He fills up the Focus every third day, compared with every day and a half with the Murano.

Gas prices were his main motive for buying.

“I had a feeling they were going to go up. They were just too good to be true,” he said.

For automakers, there’s tough competition ahead for small cars. They’re trying to make them more profitable by loading them up with pricey features such as leather seats and navigation systems. As a result, prices are rising. Vehicles sold for an average of $30,605 last month, up almost 7 percent from a year earlier, mostly due to more luxurious small cars, according to the TrueCar.com automotive website.

Companies that don’t move fast enough in the small-car market will be hurt.

The Honda Civic, Chevrolet Cruze and Ford Focus all gained market share in the compact car segment last month, with some of the sales coming at the expense of Toyota’s aging Corolla, said Jeff Schuster, senior vice president of forecasting for the LMC Automotive consulting firm. That’s a very different story than 2008, when the Corolla was the runaway best-seller in the segment.

The shift to smaller cars is becoming a regular pattern. Buyers also leaned toward smaller cars at the beginning of last year, when gas prices jumped 80 cents between February and May before moderating in the summer. Last March, when gas prices reached $3.74 per gallon, 23 percent of buyers purchased small cars. But they went back into bigger cars once gas prices eased.

Edmunds chief economist Lacey Plache said rising gas prices won’t make car buyers hold off on purchases altogether. That’s because they’re more confident about the jobs market and because cars on U.S. roads are getting so old that they have to be replaced. She says people will simply put more emphasis on fuel economy and cut back on the miles they drive.

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Chinese Internet giant Alibaba, which has been in the headlines lately for its tussles with stakeholder Yahoo, wants to take its publicly traded Web portal private.

Alibaba Group said Tuesday that it made an offer to Alibaba.com’s board of directors.

Alibaba Group owns about 73.5% of e-commerce leader Alibaba.com, which is the company’s only publicly traded subsidiary. Under the terms of the deal, Alibaba Group would buy the other 26.5% of the company for 13.50 Hong Kong dollars ($1.74 U.S.) per share in cash.

That’s a 55.3% premium above Alibaba.com’s average closing price over the last 10 days — but it’s the exact same price the company fetched in its initial public offering in November 2007.

Taking the web portal private "will allow our company to make long-term decisions that are in the best interest of our customers and that are also free from the pressures that come from having a publicly listed company," Alibaba Group CEO Jack Ma said in a prepared statement.

Alibaba has been in the news frequently over the past year for its contentious relationship with Yahoo (, Fortune 500).

Yahoo owns about a 40% stake in Alibaba, which is considered one of its most valuable assets. But Ma and former Yahoo CEO Carol Bartz had a public dispute over ownership of Alipay, an online payment unit similar to eBay (, Fortune 500)-owned PayPal.

The companies reached an agreement in July 2011, but tensions continued. Ma said at a conference in late September that Alibaba would be "interested" in buying all of Yahoo — a purchase that would essentially allow Ma to buy back control of that 40% Alibaba stake.

According to media reports, Yahoo had been in advanced talks with Alibaba and Japan-based Softbank to discuss selling its stakes in Alibaba and Yahoo Japan. But those talks reportedly collapsed earlier this month. 

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Egypt’s finance minister says Cairo expects to sign a loan agreement with the International Monetary Fund for $3.2 billion next month.

The state-run al-Ahram daily of Sunday quoted Mumtaz al-Said as saying that sum would be disbursed in three stages: the first upon the deal’s signing, and the second and third three and six months later, respectively.

Egypt formally requested the loan in January, after rejecting an offer made last year. The IMF could not immediately be reached for comment.

Egypt’s economy has been badly battered by more than a year of unrest since an 18-day uprising pushed President Hosni Mubarak from power on Feb. 11, 2011.

The report said Egypt is also negotiating a second loan for $1 billion with the World Bank.

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Iran will soon unveil “big new” nuclear achievements, President Mahmoud Ahmadinejad said Saturday while reiterating Tehran’s readiness to revive talks with the West over the country’s controversial nuclear program.

Ahmadinejad spoke at a rally in Tehran as tens of thousands of Iranians marked the 33rd anniversary of the Islamic Revolution that toppled the pro-Western monarchy and brought Islamic clerics to power.

Ahmadinejad did not elaborate on the upcoming announcement but insisted Iran would never give up its uranium enrichment, a process that makes material for reactors as well as weapons.

The West suspects Iran’s nuclear program is aimed at producing atomic weapons, a charge Tehran denies, insisting it’s geared for peaceful purposes only, such as energy production.

Four rounds of U.N. sanctions and recent tough financial penalties by the U.S. and the European Union have failed to get Iran to halt aspects of its atomic work that could provide a possible pathway to weapons production.

“Within the next few days the world will witness the inauguration of several big new achievements in the nuclear field,” Ahmadinejad told the crowd in Tehran’s famous Azadi, or Freedom, square.

Iran has said it is forced to manufacture nuclear fuel rods, which provide fuel for reactors, on its own since international sanctions ban it from buying them on foreign markets. In January, Iran said it had produced its first such fuel rod.

Apart from progress on the rods, the upcoming announcement could pertain to Iran’s underground enrichment facility at Fordo or upgraded centrifuges, which are expected to be installed at the facility in the central town of Natanz. Iran has also said it would inaugurate the Russian-built nuclear power plant in the southern port of Bushehr in 2012.

Iran’s unchecked pursuit of the nuclear program scuttled negotiations a year ago but Iranian officials last month proposed a return to the talks with the five permanent U.N. Security Council members plus Germany.

“Iran is ready for talks within the framework of equality and justice,” Ahmadinejad repeated on said Saturday but warned that Tehran “will never enter talks if enemies behave arrogantly.”

In the past, Iran has angered Western officials by appearing to buy time through opening talks and weighing proposals even while pressing ahead with the nuclear program.

Washington recently levied new penalties aimed at limiting Iran’s ability to sell oil, which accounts for 80 percent of its foreign revenue, while the European Union adopted its own toughest measures yet on Iran, including an oil embargo and freeze of the country’s central bank assets.

Israel is worried Iran could be on the brink of an atomic bomb and many Israeli officials believe sanctions only give Tehran time to move its nuclear program underground, out of reach of Israeli military strikes. The U.S. and its allies argue that Israel should hold off on any military strike on Iranian nuclear facilities to allow more time for sanctions to work.

Before Ahmadinejad spoke Saturday, visiting Hamas prime minister from Gaza, Ismail Haniyeh, also addressed the crowd, congratulating Iranians on the 1979 anniversary and vowing that his militant Palestinian group would never recognize Iran’s and Hamas’ archenemy, Israel.

Also at the Tehran rally, Iran displayed a real-size model of the U.S. drone RQ-170 Sentinel, captured by Iran in December near the border with Afghanistan. Iran has touted the drone’s capture as one of its successes against the West.

The state TV called the drone is a “symbol of power” of the Iranian armed forces “against the global arrogance” of the U.S.

The report broadcast footage of other rallies around Iran, saying millions participated in the anniversary celebrations, many under heavy snowfall.

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Hong Kong will spend nearly HK$80 billion ($10.3 billion) to bolster growth as the government forecasts the weakest expansion since 2009 on a