Finance news. My opinion.

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.

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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.

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For Express Scripts, Medco Health Solutions will be a very big pill to swallow. Could it bring on a little indigestion?

With $70 billion in revenue last year,  Medco far outsells Express Scripts Inc.’s $46 billion. Medco employs 23,200 people versus 13,100 at Express Scripts.

Yet the smaller pharmacy benefit management company is buying the big one, in a deal that closed on Monday.

Observers are betting that Express Scripts will be able to successfully digest Medco, although they expect burps and hiccups.

“These are two top companies doing the same thing,” says Judson Clark, an analyst at Edward Jones investments in Des Peres. Both handle pharmacy benefits for employer health plans.

“There will be a couple of headaches, sure. But it’s not like the airlines coming together and merging reservation systems and everyone ending up stranded in Tallahassee,” Clark said.

Express Scripts has a track record. This is the third time it has doubled its size or more through acquisitions since 1998.

“If anybody can pull this off, it’s Express Scripts,” said Ed Lawrence, a finance professor at the University of Missouri-St. Louis, who co-authored a company-financed study of Express Scripts’ economic impact on St. Louis.

Still, mergers produce anxiety — among employees worried about at least $1 billion in cost-cutting, among senior executives who must figure out how to integrate the separate businesses, and among customers who worry whether merger glitches could affect their prescriptions.

The company says it’s working to avoid the latter.

“Service and stability are our job one,” said Express Scripts spokesman Brian Henry.

Although both dispense drugs, the firms have different strengths.

Medco has a reputation as the better company at the nitty-gritty of getting drugs to patients. Express Scripts is best at “understanding what motivates patient behavior,” says Clark.

For instance, Express Scripts is good at getting patients to actually take their drugs, and converting patients to cheaper generic drugs.

Express Scripts will try to take the best of both, which raises the question of which executives will end up running what.

Big mergers set off a game of musical chairs in management, as the company tries to cut costs.

Fear about that “permeates the entire organization,” says Stuart Greenbaum, former dean and professor emeritus at the Washington University business school.

Some firms settle those turf disputes quickly. Others drag them out, cutting executive staff by attrition and internal competition.

All that can have an effect on efficiency.

“You want to get a full day’s work out of people, not have them spending half the day polishing their résumés,” Greenbaum said.

When big companies merge, customers sometimes feel the effect as new leaders change rules and customer-relations staff is shaken up. Competitors often use that opportunity to swipe customers away.

There may be some of that in the Express Scripts deal but probably not much, says analyst Clark. The company’s customers are mainly big employers.

“The process of rebidding is not easy,” says Clark. “It’s not easy for HR to undertake, and they are not eager at the prospect of doing it again just for kicks.”

Putting systems together and closing duplicate operations also can cause headaches.

“The IT side is often a very difficult challenge,” says Greenbaum. “Talk to the airlines, and they’ll tell you that sometimes it blows up in your face and sometimes it goes smoothly.”

Firms often take that slowly, integrating systems over a year or two.

For customers, the question is how much they’ll benefit from the deal.

The merged company may have more clout to demand better prices from drugmakers and the drugstores.

How much patients and employers will share in the savings remains to be seen. Critics say the company’s dominance will allow it to keep much of the savings. The smart management move would be to pass along much of the savings “and be very visible about it,” said Greenbaum. That would head off cries for more regulation later.

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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?"  

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Oil prices rose to near $107 a barrel Wednesday in Asia after a report showed U.S. crude supplies fell unexpectedly, a sign demand may be improving.

Benchmark oil for May delivery was up 52 cents to $106.59 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.49 to settle at $106.07 per barrel in New York on Tuesday after Saudi Arabia said it could pump more oil to cover any shortages.

Brent crude for May delivery was up 12 cents at $124.24 a barrel in London.

The American Petroleum Institute said late Tuesday that crude inventories fell 1.4 million barrels last week, breaking a two-month trend of growing supplies. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 2.1 million barrels.

Inventories of gasoline fell 1.4 million barrels last week while distillates rose 600,000 barrels, the API said.

The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

Saudi Arabia, the world’s largest crude producer, said Tuesday it can quickly boost output by 25 percent if there is a sudden disruption in global supplies instant payday loans. Crude has jumped from $75 in October as traders worry a military conflict over Iran’s nuclear program could cut that country’s crude exports.

The European Union and the U.S. have imposed sanctions that make it tougher for Iran to sell its oil. In response, Iran has threatened to block oil shipments in the Strait of Hormuz, through which a fifth of world’s oil supplies pass.

Kuwait said Tuesday it is increasing crude production and that Iran has assured its neighbors that it won’t block the vital waterway.

“The Saudis have been cranking up output, presumably in an attempt to dampen further price increases,” energy consultant and trader Ritterbusch and Associates said in a report. However, “increased output won’t necessarily reduce the Iranian risk premium.”

In other energy trading, heating oil was up 0.7 cent at $3.26 per gallon and gasoline futures gained 0.5 cent at $3.36 per gallon. Natural gas fell 0.3 cent at $2.33 per 1,000 cubic feet.

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Chinese Premier Wen Jiabao, set to leave office next year after a decade in power, said his nation must adopt political change to support an economic transformation that has produced rapid development at the cost of a widening wealth gap.

Is it possible to solve the nation’s debt woes just by hiking taxes on the rich?

Probably not.

Even if marginal income tax rates were almost 100% for the richest Americans, that still might not yield enough new revenue to keep debt under control.

The findings, reported Thursday by the Tax Policy Center and the Pew Charitable Trusts, underscore the necessity of finding a balanced approach to budgeting in the near future.

The report assumes current tax policy as a starting point, and targets debt at 60% of gross domestic product, widely considered to be a sustainable level.

"Increasing the top two or top three individual income tax rates alone cannot achieve the debt-to-GDP targets under some … scenarios," the report said.

"You just have a very big gap and not that much income up there to fill it," said Eric Toder of the Tax Policy Center.

Of course, politicians aren’t advocating for the top rates to go anywhere near 100%.

Take Obama for instance.

He wants to let the top two tax rates — currently 33% and 35% — revert to their pre-2001 levels of 36% and 39.6%.

Most folks in the top two brackets, however, would still benefit from the continuation of the 10%, 15%, 25% and 28% rates on the portion of their income subject to the lower brackets.

By historical standards, those rates are pretty low. While income tax rates for top earners have been below 40% since 1986, they were as high as 91% in the 1960s.

Republicans want to go the opposite direction, with every remaining 2012 candidate now promising reductions in marginal income rates for most taxpayers.

To balance those tax cuts out, and still lower deficits, Republicans must be prepared to slash huge amounts of spending from the budget, a difficult task when Pentagon spending is still off-limits for many party leaders.

And that’s just not feasible.

The looming debt problem is just too big. Reducing it by spending cuts alone would require draconian changes that could hurt the economy far more than a mix of spending cuts and tax increases.

America’s debt challenge

And that’s what the Pew study illustrates so effectively. An approach to deficit reduction that focuses only on spending cuts, or only on revenue, is likely to produce quite a bit of pain for targeted groups.

With federal spending on track to expand further over the next decade, most budget experts agree that lawmakers must consider an all-of-the-above approach that means tough choices for both parties.

President Obama’s fiscal commission, which never gained the necessary traction with the White House or Congress, acknowledged as much.

"Together, we have reached these unavoidable conclusions: The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington must lead," the report said.

The commission recommended hiking taxes, cutting military spending, getting health care costs under control, increasing the social security retirement age, among other proposals.

The plan went nowhere.

And with lawmakers from both political parties locked in election mode for the rest of the year, there are few indications any real steps toward deficit reduction will be taken until at least the new year.  

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Wendy’s is still recovering from its split with Arby’s.

The Dublin, Ohio-based company on Thursday said it swung to a fourth-quarter profit of $3.9 million, or 1 cent per share, compared with a net loss of $10.8 million, or 3 cents per share, last year, when it was still a single company with the Arby’s roast beef chain.

Revenue rose 6 percent to $538.5 million.

The figures confirmed preliminary results released in January that showed revenue at restaurants open at least a year climbed 4 percent in North America, the highest in nearly eight years bad credit payday advance.

Wendy’s sold Arby’s to a private equity firm last summer to focus on improving its namesake brand.

Wendy’s says higher prices and new menu items helped drive sales and traffic in the quarter.

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Home prices fell in December for a fourth straight month in most major U.S. cities, as modest sales gains in the depressed housing market have yet to lift prices.

The Standard & Poor’s/Case-Shiller home-price index shows prices dropped in December from November in 18 of the 20 cities tracked. The steepest declines were in Atlanta, Chicago and Detroit. Miami and Phoenix were the only cities to show an increase.

The declines partly reflect the typical slowdown that comes in the fall and winter.

Still, prices fell in 19 of the 20 cities in December compared to the same month in 2010. Only Detroit posted a year-over-year increase. Prices in Atlanta, Las Vegas, Seattle and Tampa dropped to their lowest points since the housing crisis began.

Nationwide, prices have fallen 34 percent nationwide since the housing bust, back to 2002 levels. A gauge of quarterly national prices, which covers 70 percent of U.S. homes, fell to its lowest point on records dating back to 1987.

“The pick-up in the economy has simply not been strong enough to keep home prices stabilized,” said David M. Blitzer, chairman of the S&P’s index committee. “If anything, it looks like we might have reentered a period of decline as we begin 2012.”

The Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The December data is the latest available.

Home values remain depressed despite some hopeful signs at the end of last year payday advances.

Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

Homes are the most affordable they’ve been in decades. And mortgage rates have never been cheaper.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.

But home prices tend to lag behind sales, which are still below healthy levels. And a large number of vacant homes are sitting idle on the market, which means prices will likely stay unchanged for several years.

Conditions are improving for those in position to buy a home. Still, many people can’t afford to buy or are unable to qualify for mortgage. Some people in position to buy are holding off, worried that prices could fall even further.

The biggest reason why prices are still falling is foreclosures, which are still high across the country. Foreclosures and short sales _ when a lender accepts less for a home than what is owed on a mortgage _ are selling at an average discount of 20 percent.

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South Korean inflation may accelerate above the government