Treasuries pared losses as German and French finance ministers meet before a summit of regional leaders to discuss ways to contain the European debt crisis, stoking demand for government debt.
U.S. 10-year yields rose earlier on speculation record-low yields may limit demand as the government auctions $99 billion of coupon-bearing debt this week starting tomorrow. The U.S. will start this week
The European Commission has called on EU nations to stick to their promised budget cuts despite voter discontent in France and Greece, but promised new efforts to boost growth to alleviate economic hardship.
EU President Herman Van Rompuy also called for an impromptu informal summit of the 27 EU government leaders on May 23 to discuss economic growth and to prepare for a summit in June focused on job-boosting measures.
In elections on Sunday, voters in France and Greece gave strong support to parties who want to roll back or slow down the spending cuts and tax increases that have defined Europe’s response to its debt crisis.
After a battle lasting almost two years, BlackBerry maker Research In Motion has knuckled under to the Indian government, giving security forces in that country access to private instant messages.
Experts say the change, first reported in the newsmagazine India Today, could lead to similar access for other spy agencies and government bodies around the world
Japan is setting stricter, clearer safety guidelines for nuclear power plants to ease public concern about restarting reactors idled after the disasters a year ago.
Facing a national power crunch, the government is anxious to restart two reactors in Fukui, western Japan, before the last operating reactor of the 54 in the country goes offline in May.
But the government has faced strong public opposition due to the meltdowns at the Fukushima Dai-ichi power plant, and local leaders are reluctant to give their approval.
Authorities say the new safety guidelines are more extensive than past “stress tests,” which were essentially computer simulations meant to test how reactors would cope in the event of major earthquakes, tsunamis or other emergencies. Many questioned the objectivity of the tests and whether they guaranteed the plants’ safety, even though two reactors passed the tests.
If utilities can show they meet the new guidelines, authorities hope the public will be convinced that the reactors are safe to restart, including the two in Ohi, Fukui prefecture.
The new guidelines, based on 30 recommendations adopted last month by the Nuclear and Industrial Safety Agency, require nuclear power plants to install filtered vents that could reduce radiation leaks in case of an accident, as well a device to prevent hydrogen explosions, among other steps. No deadline is cited by which these steps must be taken.
Chief Cabinet Secretary Osamu Fujimura said the government can order utilities to restart reactors regardless of local opposition, because obtaining residents’ consent is not legally required.
The plan will be officially announced later Friday after Prime Minister Yoshihiko Noda and three Cabinet ministers in charge of nuclear crisis management finalize the measures pay day advance.
All but one of Japan’s 54 reactors have been shut down for inspections, required every 13 months. None have been restarted since the March 11, 2011, tsunami set off meltdowns in three reactors at the Fukushima Dai-ichi plant.
The reactor on the northern island of Hokkaido goes off line in early May. If none of the reactors are restarted, Japan could face power shortages this summer. Before the crisis, Japan depended on nuclear power for one-third of its electricity.
To make up for the shortfall, Japan has expanded production at conventional gas- and oil-fired plants.
But officials in cities and towns near Fukui are requesting explanations for the rush.
“Why rush? It’s too soon to decide. I think they should gain understanding from the public first,” said Yukiko Kada, governor of Shiga prefecture bordering Fukui.
Toru Hashimoto, the outspoken mayor of Osaka _ a top shareholder of Kansai Electric Power Co. that runs the Ohi plant in Fukui _ criticized the government for compiling the new guideline in two days.
Economy and Trade Minister Yukio Edano said earlier Friday that many of the safety measures have been already taken and the new guidelines aim to set even higher standards.
Fukui, home to 13 reactors clustered in four complexes along the Sea of Japan coast, is called Japan’s nuclear alley.
Stocks are opening lower after the Federal Reserve signaled that it may be less willing to provide more stimulus to the U.S. economy.
The Dow Jones industrial average fell 121 points to 13,079 shortly after the opening of trading Wednesday.
The Standard & Poor’s 500 index fell 12 points to 1,401. The Nasdaq composite slipped 32 points to 3081.
Minutes from the Fed’s last meeting, released late Tuesday, started a sell-off that began in the U instant payday loan.S. and extended overseas.
Encouraged by job growth, the Fed’s policy makers seem more willing to allow the economy to move forward on its own. The U.S. and overseas governments have worked actively to prop up economies damaged by the global downturn.
Alean Elston just cannot find a job.
The 26-year-old from New Jersey has tried nearly everything. She has mailed resumes, asked friends and family for leads and dropped in on retail outlets in hopes of finding work.
Applying for job after job with no luck is nothing new for the 2009 business administration graduate. And as a consequence, she lives at home with her parents. Fact is, she cannot afford a place of her own.
Elston is far from alone.
Younger workers were disproportionately affected by the recession. As a group, they had a very tough time finding work, and many highly educated graduates were forced to take menial jobs or retreat to the safety of academia.
The lack of good jobs means that young people are stuck at home — a common occurrence during tough times. While not ideal, families face no easy alternatives.
"The fact is, most young people are not so fortunate that their parents can purchase them a condominium or house just for fun," said Anthony Sanders, a senior scholar at the Mercatus Center.
In econospeak, the process of a young person finding accommodations of their own is called "household formation" — and that stalled big-time during the recession.
The trend toward staying home for longer means the economy is denied dollars that, under different circumstances, young people would have been eager to spend.
There is no student loan ‘crisis’
Beyond rent or mortgage payments, new living arrangements often require investments in furniture, flatware, appliances, plants for the yard and insurance policies. Even new car sales can be affected.
And reduced household formation can contribute to a lack of demand in the housing market. That trend was especially troublesome during the last recession, as foreclosures spiked and already high inventory levels jumped off the charts.
"We ended up with far too many [housing] units and the bubble popped with a violence that shook the entire economy," Warren Buffett wrote in his 2011 letter to Berkshire Hathaway () shareholders.
The excess inventory meant a sharp reduction in homebuilding and jobs in the construction industry.
The number of new housing starts fell from a peak annual rate of more than 2 million in some months of 2006 to a recession low of only 478,000 starts in April 2009.
Even after the recession was declared officially over, companies weren’t hiring young people. Young people weren’t moving out and soaking up excess housing inventory. And new homes weren’t being built, acting as a significant albatross around the economy’s neck.
This negative feedback loop has proven quite difficult to break.
But now, Buffett and others believe the trend might be reversing.
"The devastating supply/demand equation is now reversed," Buffett wrote to Berkshire investors in February. "Every day we are creating more households than housing units."
"People may postpone hitching up during uncertain times, but eventually hormones take over," he said. "Living with the in-laws can quickly lose its allure."
The numbers back Buffett’s hypothesis. Household formations rebounded last year, and are now closer to historical averages. And new home starts picked up steam in the final months of 2011 — momentum that has carried over into this year.
Buffett’s musings on hormones aside, there is another explanation for the uptick in household formation: More jobs.
Over the past two years, the employment population ratio, which measures the proportion of population that works, has improved more rapidly for young people than other demographic groups.
That ratio has increased almost 2 percentage points for individuals aged 20 - 24, while older workers have seen their numbers improve by only half a point.
Add that to a string of solid monthly jobs reports, and things are looking up.
White House: Jobs recovery isn’t ’statistical fluke’
Sanders agrees with Buffett in principle, but cautions against popping the champagne just yet. "The job market is still so bad," Sanders said. "Especially for college and high school grads who are not in high demand areas."
"We are seeing more and more recruiters showing up to campuses," Sanders said. "But the recruiters are coming with very specific ideas of who they want to hire."
Greg Kaplan, an economist at the University of Pennsylvania, said that there is no guarantee that more young people will move out on their own as the economy and job market improve.
"It’s possible that we look like Italy now, where housing costs are just so high that people are going to live with their parents for a longer period of time," Kaplan said.
Elston, for one, can’t wait to move out — if only that job would arrive. She said she applies for at least two positions a day, and has been working odd jobs to help her parents pay the bills.
"It just feels like an endless cycle," she said. "It seems like I’m the perfect candidate for some of these jobs, so why not me? Why not?"
A new document from Greece’s international creditors spells out what further austerity measures they expect Athens to implement to receive fresh cash and avoid default.
The draft document obtained by the Associated Press Tuesday says, among other conditions, that the Greek government must cut spending on pharmaceutical products by another euro1 billion ($1.32 billion) and step up its privatization efforts to create more revenues.
Greece’s international creditors _ the International Monetary Fund, the European Central Bank and the European Union _ also are demanding that the country slash its defense budget by another euro300 million payday loans lenders.
The document comes ahead of a crucial meeting of the 17-nation eurozone’s finance ministers in Brussels Wednesday.
CPI Corp. has named a new interim president and chief executive officer as it moves its stock to the over-the-counter market.
James J. Abel, 65, a director of the company since 2004, is the new leader of the St. Louis-based company, which operates portrait studios inside Sears and Walmart stores.
The company’s previous chief executive, Renato Cataldo, is “leaving the company to pursue other opportunities,” according to a news release. He had been chief executive since 2006.
“We appreciate Jim’s willingness to step into this interim role to help address our financial and operational challenges,” David M. Meyer, the company’s executive chairman, said in a statement. “He is a highly accomplished executive whose broad business background and analytical strengths will be invaluable to CPI at this critical juncture cash advance no faxing.”
Last week, the company announced it would begin trading its stock on the over-the-counter market after the New York Stock Exchange said it would suspend trading of its stock because the company’s average market capitalization fell below the exchange’s threshold.
CPI first received a notice from the New York Stock Exchange that it was out of compliance with its listing standards in October.
Its stock began trading on the over-the-counter market today under the symbol “CPIC.”
In December, CPI reported a net loss of $7.3 million, or $1.03 a share, and an 11 percent drop in net sales in the third quarter.
Greek debt talks are said to be progressing but officials have yet to announce a deal to scale back the nation’s overwhelming debt load.
Negotiations between the government and experts representing the private banks and investors that hold Greek debt — the Institute of International Finance — have been ongoing since last Wednesday.
But the outcome still remains uncertain ahead of a key two-day meeting of eurozone finance officials that starts Monday.
The lead negotiators from the IIF, Charles Dallara and Jean Lemierre, left Athens Saturday to attend "long-standing personal appointments" in Paris, according to a statement.
In a statement, Dallara stressed that progress has been made over the last few days and that the "elements" of a deal "are coming into place."
"Now is the time to act decisively and seize the opportunity to finalize this historic deal and contribute to the economic stability of Greece, the euro area and the world economy," said Dallara.
The IIF also said Dallara and Lemierre are available to Greek officials by phone "should this be necessary."
The lure to leave the euro may prove irresistible
At issue is an agreement to reduce Greece’s debt load by writing down the value of Greek bonds owned by the private sector by 50%.
In addition to the writedown, the deal is expected to include a debt exchange, in which investors would swap Greek bonds for new 30-year securities with an interest rate, or coupon, of about 4%.
The exchange could result in "real" losses of up to 70% for the private sector.
But it could also ease the burden on the Greek government as it struggles under a massive €350 billion pile of debt and a deepening recession.
The talks have been hindered by disagreements over the terms of the debt exchange and signs the participation rate may fall short of expectations.
The stipulation that investors voluntarily accept the writedowns has also been a stumbling block.
A non-voluntary writedown could trigger credit default swaps, a form of insurance that investors use as protection against a default.
Eurozone officials have insisted that the agreement be voluntary, arguing that credit default swaps could spread chaos in the financial system. But investors who have purchased credit protection might have an interest in holding out for a default.
The private sector owns over €200 billion worth of Greek debt, so the 50% writedown would translate to €100 billion.
That would help shrink Greek government debt to 120% of gross domestic product by 2020, according to eurozone officials. Currently, Greece’s debts are equal to about 160% of GDP.
Both sides are under pressure to reach agreement before Monday’s meeting of euro area finance ministers, known as the Eurogroup.
The restructuring of Greece’s private sector debt is a key condition for the nation to receive additional bailout funds from the European Union and International Monetary Fund.
Greece is facing a €14.5 billion bond payment in March that it may not make without another injection of emergency financing.
Europe: Still a huge pain in the neck for investors
Officials from the EU, IMF and European Central Bank arrived in Athens last week to begin reviewing the government’s finances.
The troika, as three institutions are known, is beginning the process of negotiating a second bailout for Greece, valued at €130 billion.
Greece has struggled in the past to implement the austerity measures and structural reforms that are a condition of its existing bailout loans.
Prime Minister Lucas Papademos, a former ECB vice president, was appointed last year to impose more budget cuts and revive Greece’s moribund economy.
The big concern is that Greece could default in a disorderly way, a development that could force the nation out of the euro currency union.
That would likely cause the Greek banking system to collapse and plunge the nation’s economy deeper into recession. It could also drive up borrowing costs for other vulnerable euro area economies, such as Italy and Spain.
The spread of a debt contagion in the eurozone is seen by most economists as the single biggest threat facing the global economy.
The leaders of Germany and Italy sought to present a united front Wednesday in the fight to resolve the eurozone debt crisis and revive the ailing European economy.
German Chancellor Angela Merkel praised the efforts of Italian Prime Minister Mario Monti to cut government spending and make his nation’s economy more competitive.
"We have followed with great respect how quickly the measures are being implemented," said Merkel. "The work of the Italian government is being honored."
Monti said Italians support a "very hard series of measures," adding that Europe "doesn’t have to fear any more that Italy is a possible source of contagion."
Italy has been a big worry for global investors in recent months. The nation’s economy has been stagnant for a decade and its borrowing costs have ballooned, raising concerns about the government’s solvency.
Monti acknowledged that high interest rates could have been justified when market participants were uncertain about Italy’s economic policies. "But not anymore," he said, adding, "especially after representatives of those same markets have said they appreciated the efforts [Italy] made."
That assertion will be put to the test this week when the Italian government will offer €8.5 billion in bills Thursday and up to €4.75 billion in bonds Friday.
On Wednesday, yields on 10-year Italian bonds eased, but still held above the key 7% threshold.
Europe’s debt crisis: An end in sight? Not so fast
The meeting in Berlin between Merkel and Monti was the latest in a series of talks this week among top European Union leaders as they piece together a solution to the long-running government debt and banking problems in the eurozone.
Merkel met with International Monetary Fund director Christine Lagarde late Tuesday and French President Nicolas Sarkozy Monday. Lagarde will meet with Sarkozy later Wednesday in Paris.
Merkel and Sarkozy will travel to Rome for more talks with Monti on Jan 20. Then, the top leaders of all 27 members of the EU will gather in Brussels on Jan. 30 for their first summit of the year.
On Wednesday, Merkel and Monti discussed the situation in Greece, where Prime Minister Lucas Papademos is under pressure to push through reforms needed to secure additional bailout funds.
Merkel said the first step in resolving the debt crisis is to "create the preconditions" for a second bailout for Greece fast payday loan.
EU leaders agreed in October to provide a second €130 billion rescue package for Greece and announced a deal with private sector investors to voluntarily write down the value of Greek government bonds by 50% as part of a debt exchange.
But negotiations with the private sector have stalled and there is still disagreement among some policymakers over whether requiring Greece to enact more austerity as a condition of a second bailout will help or hurt the nation’s fragile economy.
"The talks with banks are being pushed so that the question of Greece can be solved rationally, so that we can then focus on structural reforms in the euro zone as a whole," said Merkel.
Europe: Still a huge pain in the neck for investors
Still, European leaders are optimistic that a proposed fiscal compact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, will be signed by the end of the month.
"There is work to be done but there is a good chance that we can expect significant progress or a political conclusion already on Jan. 30," said Merkel.
The terms of the pact include, among other things, a balanced budget requirement with an "automatic correction mechanism," and a provision to make national budget policies subject to EU authority "ex ante," or before the fact.
The political leaders of the 17 eurozone nations, which share the embattled single euro currency, agreed in principle to abide by the pact following a summit on Dec. 9. But the agreement is still subject to parliamentary approval in some member states.
Merkel also suggested that Germany, the eurozone’s largest economy, could commit more capital to the European Stability Mechanism, which is expected to come into effect this year.
But Merkel was careful to say that Germany would contribute more capital to the fund only if necessary and other eurozone governments do the same.
The ESM would enhance or replace the eurozone’s current bailout fund, known as the European Financial Stability Facility. European leaders have said they will decide in March on a proposal to put more capital into the €500 billion ESM.
– CNN’s Diana Magnay contributed reporting from Berlin.
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