2010-Mar-14 - Grapevine Moth Forces Quarantine for Part of Napa Valley

BERKELEY, Calif. — The state’s most lucrative crop, grapes, has yet another insect enemy.

The California Department of Food and Agriculture quarantined 162 square miles in Napa Valley on Tuesday in an effort to stop the spread of the European grapevine moth, the newest threat to grapes and other fruit.

The quarantined zone spans parts of Napa, Sonoma and Solano Counties. Grapes within the zone cannot be transported outside the quarantine boundaries, though the grapes can be processed on site.

Last year the state’s grape harvest was worth $2.74 billion, about a third of which was generated in the valley.

The moth was discovered in a vineyard insect trap in September, the first appearance by the species in the United States, the department said. The larvae feed mainly on grape flowers and young grapes but can also damage some 21 other crops including olives, kiwis and persimmons.

“The wine industry is very important to our region,” said Elizabeth Emmett, a spokeswoman for Napa County. “We are going to try to do everything that we can to eradicate this nonnative pest.”

A native of Italy, the moth has caused crop damage across Europe, as well as in parts of Africa, Asia and the Middle East.

The European grapevine moth is the latest in a spate of invasive insects to hammer California’s wine industry, including the light brown apple moth and the glassy-winged sharpshooter no fax payday loans. Because of its preferred fare, the moth has grape growers particularly worried.

“This pest directly attacks the fruit and the flower, and that is tremendously concerning,” said Bruce Phillips, who farms 70 acres of grapes inside the quarantine zone. “If we are not successful in eradication, this could present serious long-term costs for us.”

State agricultural officials have set up some 2,500 traps across Napa Valley to capture the moths, said Jennifer Putnam, director of Napa Valley Grapegrowers, a nonprofit trade group, which is helping to coordinate the response.

In the next several weeks, dispensers containing the pheromones of female moths will go into the fields to confuse the males and disrupt the insects from mating. Long-term eradication and management plans are still being worked out, Ms. Putnam said.

“The time to get this pest is now,” she said. “This spring is critical.”

Grapevine Moth Forces Quarantine for Part of Napa Valley

2010-Mar-12 - Report: Airbus, engine consortium seek damages

BERLIN – A German newspaper reports that Airbus' military arm and the engine-making consortium for the A400M transporter plane are seeking hundreds of millions of euros from each other in a dispute over delays to the project.

The daily Financial Times Deutschland — citing EADS documents — said Thursday that the Airbus arm wants some euro500 million ($680 million) from EPI Europrop International GmbH. It said EPI wants euro425 million from the Airbus arm.

It says the dispute centers on who is to blame for lengthy delays to the troubled A400M program business card templates.

EPI said it is "a commercially confidential matter between Airbus and EPI." It added in a statement that "operationally it's business as usual."

Airbus Military declined to comment. It said only that Europrop provided a "very good engine."

Report: Airbus, engine consortium seek damages

2010-Mar-10 - Wall Street Starts a Second Day of Wandering

Shares traded within a tight range Tuesday, a year after major market indexes hit 12-year lows.

With little in the way of economic reports or earnings to help drive shares higher, investors are taking a breather after major indexes rose the past few weeks.

Stocks have surged over the last year. The Dow Jones industrial average is up 61.2 percent during that stretch. But traders’ expectations about an economic recovery have also grown. That means it will take more than just an occasional upbeat economic report or earnings release to send stocks up.

In company news on Tuesday, the Kroger Company, the grocery store chain, said its profit fell 27 percent in the fourth quarter, even as sales rose. The company, however, topped expectations. The company reported a profit of $255.4 million, or 39 cents per share, down from $349.2 million or 53 cents, a year ago. Sales rose 7 percent to $18.6 billion. Analysts had expected 34 cents a share on $17.73 billion of revenue.

The fast-food chain Burger King said Tuesday that harsh winter weather had hurt sales in January and February. Sales in locations open at least a year fell 8.2 percent in the United States and Canada for those two months. Over 75 percent of Burger King stores are in the Central and Eastern United States, which were hardest hit by storms.

The European Aeronautic Defense and Space Company, or EADS, reported that spiraling costs on its military transport plane and its A380 superjumbo led to losses in the fourth quarter and the year. Its shares fell 5.3 percent.

And the Eurotunnel Group managed a profit in 2009, but its revenue declined 14 percent.

The lack of market-moving news also allowed investors to step back to assess the pace of the global recovery in the wake of last week’s strong jobs data in the United States and the debt crisis in Greece.

In mid-morning trading, the Dow Jones industrial average was 27.23 points higher, while the broader Standard & Poor’s 500-stock index was flat. The technology heavy Nasdaq was 10.28 points higher.

The FTSE 100 in London was down 11.39 points or 0.20 percent, while the DAX in Frankfurt and the CAC-40 in Paris were flat.

Asian indexes were little changed, with Tokyo closing down but Chinese benchmarks edging up fast cash without a hassle.

The Greek prime minister, George Papandreou, was scheduled to meet President Obama later Tuesday to discuss stricter regulations on hedge funds and currency traders that Athens believes aggravated their crisis.

Pledges of support for Greece from France and Germany over the weekend lacked concrete details, and investors will keep an eye on the country’s financial markets — particularly the rate at which it can raise money on capital markets — for signs that confidence in being restored.

Greece last week raised 5 billion euros ($6.83 billion) in a 10-year bond sale, but the 6.25 percent rate it paid is considered too high. The country would like to borrow at more moderate rates.

To avoid future fiscal crises, France and Germany have floated the idea of creating a European monetary fund that would have the authority to enforce budget cuts and offer funds to countries facing debt trouble. Such a fund, however, would not be of help to Greece now as it would take months to agree.

In Asia, markets were cautious ahead of key reports on the region’s two biggest economies, China and Japan, that are due Wednesday. The strength of Chinese trade data could give investors a better sense of when and how Beijing will wean the country off its economy-boosting measures. A report on Japanese machinery orders, a key gauge of company spending, could provide more insight into the state of global trade and the world’s second-largest economy.

Tokyo’s Nikkei 225 stock average fell 18.27 points, or 0.2 percent, 10,567.65. Hong Kong’s Hang Seng added 0.1 percent to 21,207.55 and South Korea’s main benchmark edged up 0.1 percent to 1,660.83.

Shanghai’s market climbed 0.5 percent, while markets in Australia, Taiwan and Singapore rose as well. India’s market was down.

The dollar rose against other major currencies, while gold fell.

Crude oil fell 83 cents to $81.04 a barrel in New York trading.

Wall Street Starts a Second Day of Wandering

2010-Mar-8 - Oil rises above $82, extending Fridays gains

SINGAPORE – Oil prices rose above $82 a barrel Monday in Asia, extending gains from Friday amid signs the global economy may be improving.

Benchmark crude for April delivery was up 67 cents to $82.17 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.29 to settle at $81.50 on Friday.

Investors were cheered by the Labor Department's February jobs report Friday, which showed the U.S. economy shed a less-than-expected 36,000 jobs last month and the unemployment rate held at 9.7 percent.

The Dow Jones industrial average jumped 1.2 percent Friday, and most major Asian indexes rose Monday in early trading.

Crude investors also took heart from news Friday that China plans to extend a stimulus package in hopes of helping the economy grow 8 percent this year bad credit auto loans.

Oil has soared 18 percent since Feb. 5 as investors become more convinced a growing global economy will boost crude demand.

In other Nymex trading in April contracts, heating oil rose 1.67 cents to $2.1141 a gallon, and gasoline gained 1.49 cents to $2.2859 a gallon. Natural gas was down 6.2 cents at $4.531 per 1,000 cubic feet.

In London, Brent crude was up 74 cents at $80.63 on the ICE futures exchange.

Oil rises above $82, extending Friday's gains

2010-Mar-6 - Higher used-car prices cut loan-security losses

NEW YORK – Higher prices for used vehicles and improved buyer credit are helping mitigate losses on prime auto loan asset-backed securities, Fitch Ratings said Thursday.

Fitch said losses on securities backed by the highest-rated loans ticked upward in January because of seasonal weakness. But losses were still more than 20 percent lower on an annual basis for the third straight month, Fitch said. That trend is expected to continue, although Fitch remains wary of the poor state of the job market.

"Tax refunds and credits will support performance for the remainder of this quarter," Fitch Ratings analyst Benjamin Tano said in a statement infrared space heaters.

Fitch said stronger used-vehicle prices are resulting in higher recovery rates for repossessed vehicles. Used-car prices have been rising as new car sales have fallen and financially stressed buyers are moving into the used-car market.

Fitch's prime 60-day delinquency index rose 8.5 percent over December. Net losses for January on an annualized basis were 1.61 percent. Last year they hit a record high of 2.23 percent.

Higher used-car prices cut loan-security losses

2010-Mar-4 - Retailers report strong gains for February

NEW YORK – Shoppers shrugged off the snow and worries about the economy to buy spring clothing and other items at the nation's malls, resulting in the strongest retail sales gain since November 2007, a month before the recession started.

The upbeat news also helped sooth fears among some economists that weak consumer spending might make the economic recovery short-lived.

A broad array of merchants, from luxury retailer Nordstrom to midbrow Macy's Inc. to discounter Target Corp., reported solid sales increases on Thursday that beat Wall Street analysts' estimates.

The overall 3.7 percent gain in February, according to the International Council of Shopping Centers's index of 31 merchants, came in the face of a decline in consumer confidence, high joblessness and tight credit.

It marked the third consecutive monthly sales increase for retailers, according to the ICSC.

According to a preliminary list from Thomson Reuters, 14 merchants saw their sales beat estimates. Only three missed expectations. The figures for sales at stores open at least a year are an important measure of retailers' health.

"I am surprised by the broader strength" in the figures, said Mike Niemira, chief economist at the ICSC, who had expected a 2 percent increase. "Everyone is participating in this gain. And that's a good sign for the retail sector and for the economy overall."

When the Great Recession began, shoppers had flocked to cheaper stores from their higher-priced rivals, but Thursday's figures offer more evidence that they're trading back up.

Still, while consumers are starting to spend a little more, the figures were boosted partly because sales in February 2009 were so awful.

In February 2009, retailers recorded a drop of 4.3 percent drop, according to the ICSC. That month, consumer confidence hit an all-time low. Moreover, February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers after January. Analysts see combined data for March and April as a more accurate measure of consumer behavior

But Niemira and other analysts saw encouraging signs from February's reports, saying they were particularly surprised that shoppers were willing to buy shorts and other light clothing even as they trudged through the snow.

Niemira said he also expected midpriced clothing chains to enjoy a recovery later in the spring, and not be in toe with luxury chains.

Still, while discounters may be getting fewer new shoppers, many consumers are still fixated on price no teletrack payday loans. Analysts still believe it won't be a smooth path to recovery, for retailers or the broader economy.

"The consumer spending recovery is going to be slow, long and gradual," Ken Perkins, president of RetailMetrics, a research firm.

Consumer confidence dove unexpectedly in February. And unemployment, 9.7 percent in January, is expected to increase to 9.8 percent in February. Economists say snowstorms could have inflated job losses by as much as 100,000. The Labor Department is to report job figures on Friday.

Thursday's figures show that while consumers were willing to buy clothing, their focus was still on necessities.

Target, the nation's second largest-discounter behind Wal-Mart Stores Inc., said February sales in stores open at least one year rose 2.4 percent as more customers came into stores and spent more compared with a year ago.

Analysts had expected a 1 percent increase. However, food and household essentials remained the biggest sellers, with furniture and clothing sales about flat with last year.

Rival Wal-Mart Stores Inc. stopped reporting sales results on a monthly basis last year.

Among department stores, Macy's topped expectations and said its sales at stores open at least a year would have gone higher if shoppers hadn't been disrupted by winter storms. The department store operator reported a 3.7 percent gain, above the 1.4 percent estimate.

CEO Terry J. Lundgren said sales at stores open at least a year would have been up about 5 percent without the snow.

J.C. Penney reported a 1.2 percent gain. Analysts had expected a 1.3 percent drop.

Upscale retailer Nordstrom recorded a 10.3 percent increase in sales.

Victoria's Secret parent Limited Brands, which raised their February sales outlook last week, enjoyed a 10 percent increase. Gap's sales rose 3 percent in February, beating analyst expectations. Sales in stores open at least one year were flat at namesake Gap stores, and were flat internationally. But Banana Republic's 5 percent gain exceeded the 6 percent increase at low-price Old Navy which had typically led the chain's performance.

Abercrombie & Fitch Co., which has struggled with customers defecting to other less-expensive chains, enjoyed a 5 percent sales in February on strength across all divisions; analysts expected a 6.9 percent drop.

Retailers report strong gains for February

2010-Mar-2 - Bond Report: Treasurys weak as worries surrounding Greece ebb

NEW YORK (MarketWatch) -- Long-term Treasury prices fell and yields rose Tuesday amid reports that further budget cuts will be forthcoming from Greece, easing fears about a new debt-driven meltdown and reducing the relative investment appeal of U.S. debt.

Yields on 10-year notes rose 2 basis points to 3.63%.

S&P 500 (1 YEAR)

Yields on 2-year notes were little changed at 0.80%, erasing a prior move higher.

Bond prices move inversely to their yields. A basis point is 0.01%.

"The markets are struggling day-to-day as to the potential success or failure of [Greece's] effort to reduce its deficit and carry out its plan for an 'austerity' program," said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.

"This is why we are seeing a 'bounce' up and down in the flight-to-quality trade, and we likely will continue to until this issue is either settled or some big shoe drops," he added.

Also, the Reserve Bank of Australia raised borrowing costs and the Bank of Canada hinted at willingness to increase interest rates, adding to signals that the global economy is recovering. See more on RBA rate hike.

"The downward pressure was aided by the RBA rate increase and further progress on resolving the Greece situation," said strategists at CRT Capital Group.

Greek bond prices improved, pushing yields down, as Athens is expected to announce more ways to reduce its deficit before bringing a much-needed bond deal to the market, according to Andrew Brenner, head of emerging markets at Guggenheim Securities personal business card. See WSJ.com story on Greece's budget and fiscal position.

There were no U.S. economic reports scheduled for release Tuesday, though automakers' reports of sales for February could provide some grist for the bond market.

Investors will look closely at employment-related reports due this week, starting with ADP's monthly data on private employment on Wednesday.

Market Edge: Flagging stock markets in emerging Asia and Latin America represent the "pause that refreshes," CLSA equity strategist Chris Wood tells Laura Mandaro on the sidelines of the brokerage's San Francisco conference. He recommends overweighting EM equities by five times relative to benchmark indices.

On Friday, the Labor Department is expected to say the economy lost another 90,000 jobs in February, according to the median forecast of economists surveyed by MarketWatch. See more on jobs data.

Still, bond analysts expect weakness in labor markets, as well as housing and tame inflation, to enable to Federal Reserve to hold off on raising its target interest rate for some time. That will keep short-term interest rates low, as they are more closely tied to monetary-policy expectations than longer-dated debt.

As consumption grows modestly, "monetary policy will move away from today's extraordinarily accommodative regime," said John Richards, head of strategy for North America at RBS Securities.

"Our best guess is this occurs in the fourth quarter of 2010, but it may well be postponed to the first quarter of 2011," he said on a conference call.

The Fed next meets to consider U.S. monetary policy on March 16.

Bond Report: Treasurys weak as worries surrounding Greece ebb

2010-Feb-28 - Europe Union Moves Toward a Bailout of Greece

BRUSSELS — In a tense game of brinksmanship, the European Union is moving toward the first bailout in the history of its common currency, which is expected to involve loan guarantees from the German and French governments to encourage their banks to buy Greek debt.

Even as the negotiations continue, the bloc is insisting that Athens impose further, painful austerity measures, in part to overcome political opposition in Germany to providing aid to the spendthrift Greeks.

During a brief visit, due to start Monday, Olli Rehn, the European commissioner for economic and monetary affairs, will press for more spending cuts and tax increases in Greece as a precursor to an emerging package of financial support.

With no structure in place for dealing with a threatened default within the 16-nation euro zone, officials are making up the rules as they go along. That means that politics — as much as economics — is determining the outcome of the worst crisis in the decade-long lifespan of the euro, creating a kind of phony war in which battles are being fought by leaks and behind-the-scenes briefings.

European officials say that the purchase of Greek bonds by state-owned lenders like Germany’s KfW — backed by German government guarantees — is likely to be involved in any solution and has been an option under discussion for three weeks.

Other alternatives, including ones that involve more countries in the euro zone, are also being discussed. France’s state-owned bank Caisse des Dépôts et Consignations, may be involved, one Greek newspaper reported Saturday, while France’s Finance Minister. Christine Lagarde, told Europe 1 radio on Sunday that there are “a certain number of proposals in the euro zone, involving either private partners or public partners or both.”

But Germany’s Chancellor, Angela Merkel, is not ready to sign off on a rescue, officials said, before Greece has pushed through further cuts.

One European official, speaking on condition of anonymity because of the sensitivity of the subject, said that Greek officials appeared to be briefing journalists on the prospect for an big rescue package in the hope of pushing the European Union into a quick solution, or of convincing the markets that help is at hand.

“The Germans will not put a euro on the table until there is a credible austerity package,” the official said.

Simon Tilford, chief economist at the Center for European Reform, said that France and Germany recognize that some form of bailout is inevitable, but that, to enable a bailout to be sold to a skeptical German public, the Greeks first “have to be seen to be suffering.”

Much of the negotiating focuses on the Greek prime minister George Papandreou. On Friday, Mr. Papandreou met with Josef Ackermann, the chairman of Deutsche Bank, in Athens; on March 5 he plans to visit Mrs. Merkel in Berlin. He also is scheduled to meet President Obama in Washington on March 9.

Lurking behind the discussion are a variety of power plays involving Brussels, Paris, Berlin and Athens. Germany is reluctant to sanction any bailout knowing that, as the euro zone’s biggest economy, it will bear the brunt of the cost. But France and Germany also believe that any recourse by Greece to the International Monetary Fund would damage the prestige of the euro, highlighting its inability to sort out internal problems.

Moreover, France’s president, Nicolas Sarkozy is said to be particularly reluctant to see a rescue orchestrated by the monetary fund, which is led by Dominique Strauss-Kahn, a Frenchman and a potential rival in the next presidential elections.

Precisely that threat is being made privately by Greek officials, according to one European diplomat, who spoke on condition of anonymity due to the sensitivity of the issue.

The Greek government can be pushed only so far, said Daniel Gros, director of the Center for European Policy Studies.

Such brinkmanship on both sides was brought about by the lack of clarity from an European Union summit earlier this month when leaders promised “determined and coordinated action” if needed to protect the euro’s stability.

Refusing to specify what this would be, European leaders sought to inject more rigor into Greece’s budget deficit reduction program cash advance.

Having concealed its true economic situation and largely squandered the proceeds of the good economic years, Greece is not seen as a deserving cause in Berlin.

“Germany has, in the last 10 years, been through very painful social reform which mean curtailing rights and social benefits and pushing back the retirement age,” said Thomas Klau of the European Council on Foreign Relations and author of a book on the birth of the euro. “The argument in Germany is ‘why should our workers work to the age of 67 to enable Greeks to retire earlier?’”

But Mrs. Merkel is under equally strong pressure from her European partners to protect the euro from the consequences of a Greek default. “She has to show leadership,” Mr. Klau said, “in taking and pushing through a decision which is unpopular with her electorate and much of her party and is not backed wholeheartedly by her junior coalition party”.

Already the Greeks have agreed to freeze wages, cut bonus, crackdown on tax evasion and raise the official retirement age. But European officials have made it clear that they do not believe these measures go far enough to narrow Greece’s budget deficit. Athens is now weighing an increase of two percentage points in the 19 percent value-added tax, higher fuel prices and the possible abolition of one of two additional months of pay received by public sector workers and by employees of many private firms.

The new austerity package is likely to be announced after Mr. Rehn’s visit to Athens but well in advance of a crucial meeting of European finance minister on March 16.

For weeks now the Greek government, which faces 23 billion in debt repayments in April and May, has been testing investor’s diminishing appetite for its bonds via a 3 to 6 billion euro ($4 billion to $8 billion) 10-year offering that it had hoped to bring off at an interest rate in the 6 percent range. That would be well above the roughly 3 percent rate investors receive on German bonds but not as costly as the 7 percent or so rate that some investors claim is necessary to compensate them for the extra risk of buying Greek bonds.

The offering itself is fairly small. But its significance for Europe and the bedraggled euro is far greater.

“I see this as a game of chicken between the markets and the German finance ministry,” Mr. Gros said.

Greece is pressing for a much detail as possible on rescue contingencies to ensure that it will be get some relief from the attack in the markets for imposing a harsh plan on its restive public.

Greek officials have privately pointed out that, when a country goes to the International Monetary Fund, it gets protection from the markets until its economy has stabilized.

For example, in November 2008 when Hungary went to the monetary fund it received a stand-by loan worth about euros 12.3 billion, then $15.7 billion, of which euros 4.9 billion or $6.3 billion was on tap immediately and the remainder available in five installments subject to quarterly reviews.

Without similar help the Greek austerity drive might prove counterproductive.

“Cutting public spending by this amount,” Mr. Tilford said, “when there is no other source of demand in the economy, when export demand is extremely weak and the country is running a huge current account deficit, is almost certain to push their economy into a slump.”

Without the I.M.F., the only credible source of support to ease the shift in fiscal policy in Greece are the other European governments that rely on the euro as well.

“The Greeks are in a bad position,” Mr. Tilford said, “but their bargaining power is stronger than some governments concede. If the euro zone doesn’t come up with something they will have little option but to go to the I.M.F.”

Stephen Castle reported from Brussels and Landon Thomas Jr. from London.Jack Ewing contributed reporting from Frankfurt.

Europe Union Moves Toward a Bailout of Greece

2010-Feb-26 - Obama rounds out deficit panel with Honeywell chief

WASHINGTON (Reuters) – President Barack Obama filled out his commission to tackle the U.S. deficit on Friday, appointing the head of Honeywell International and a former Federal Reserve vice president to the bipartisan panel.

Obama, who established the National Commission on Fiscal Responsibility and Reform after the Congress failed to create a similar panel, nominated four new members after choosing Republican and Democratic chairmen earlier this month.

The president named Honeywell Chief Executive David Cote, a Republican, and Democrat Alice Rivlin, a former Federal Reserve vice president who was also budget director under former President Bill Clinton.

He also appointed Democrat Andrew Stern, president of the 2.2 million-member Service Employees International Union, and businesswoman Ann Fudge, former chief executive of Young & Rubicam Brands.

"For far too long, Washington has avoided the tough choices necessary to solve our fiscal problems," Obama said in a statement. "I am proud that these distinguished individuals have agreed to work to build a bipartisan consensus to put America on the path toward fiscal reform and responsibility."

Obama named former White House chief of staff Erskine Bowles, a Democrat, and former Senator Alan Simpson, a Republican, earlier this month to the bipartisan commission low fee payday advance.

Friday's announcement rounds out the number of appointees the president has said he will name for the 18-member panel. The other twelve are to be appointed by Democratic and Republican leaders in Congress.

The White House has said no more than four of Obama's choices would be from the same political party.

The Democratic president said the panel would have the latitude to consider any proposals to cut government spending and raise taxes, but analysts said they doubted the panel would have any teeth.

The commission is seen as being unlikely to be able to sway the bitterly divided Congress to take any politically unpopular steps necessary to stem the tide of red ink.

The White House forecast a $1.6 trillion budget deficit this year, or about 10.6 percent of gross domestic product.

Obama has asked the commission to come up with a strategy to balance the budget, excluding interest payments, in five years.

(Editing by Vicki Allen)

Obama rounds out deficit panel with Honeywell chief

2010-Feb-24 - Bernanke sees low rates amid signs of weak rebound

WASHINGTON – New signs emerged Wednesday that the economic rebound is sputtering. Sales of new homes hit a record low last month. And mortgage giant Freddie Mac signaled it will need more federal aid — and might never repay it.

Against that backdrop, the government is trying to prop up the housing and job markets. Federal Reserve Chairman Ben Bernanke reiterated the need to continue record-low interest rates for "an extended period." And the Senate passed a bill to give tax breaks to companies that hire the jobless.

Bernanke told Congress that low rates will help ensure that the recovery will last and help ease the sting of high unemployment. Asked what else Congress could do to stimulate job creation, he hesitated to say.

"I'm sure you know the menu of things that you could do which could create jobs," he said. "Unfortunately there's no — there's no silver bullet here."

Investors seemed buoyed by Bernanke's commitment to low rates, despite the news on home sales and Freddie Mac. The Dow Jones industrial average gained about 91 points, roughly 0.9 percent.

Yet economists cautioned that the government's ability to help is limited.

"Our view is that it will be a long, tough slog for U.S. consumers in particular and for the economy overall," said Sal Guatieri, senior economist at BMO Capital Markets.

Bernanke, in his twice-a-year report to the House Financial Services Committee, said the rebound would endure. But he also sought to restrain hopes. He said the Fed sees moderate growth that will cause only a slow decline in the nearly double-digit jobless rate.

He offered no new clues about when the Fed would eventually raise interest rates. Most economists think it's months away.

Bernanke faces more pressure than usual from lawmakers in an election year. Their constituents are struggling, while bailed-out Wall Street banks are profitable again. Unemployment stands at 9.7 percent, home foreclosures are at record highs and people and businesses are having trouble getting loans.

Underscoring the fragility of the housing market, the government said new-home sales dropped 11 percent last month, to a seasonally adjusted annual pace of 309,000 units. That's the lowest level in the nearly 50 years records have been kept.

Winter storms were partly to blame. But sales have dropped for three straight months despite vast government support. Economists had already been worrying about how the housing market would respond once government aid programs are withdrawn.

One such program has lowered mortgage rates and bolstered the housing market but is slated to end March 31. Under the program, the Fed has committed $1.25 trillion to buying mortgage securities and debt from Freddie Mac and its sister mortgage finance firm Fannie Mae.

Bernanke said that program's end would have only a "modest effect" on raising mortgage rates. He left the door open to extending the program if the housing market or the economy worsened.

Freddie Mac's earnings report was grim news for taxpayers, who have had to rescue the company and Fannie Mae. The company lost nearly $26 billion last year and nearly $80 billion since 2007. A record proportion of its borrowers — 4 percent — face foreclosure. And its chief executive warned of many more foreclosures still to come.

And Freddie Mac said it will likely need more federal aid beyond the $51 billion it's already received and may not be able to repay it.

Fannie and Freddie are vital players in the industry. They buy loans from lenders and sell them to investors. Combined, they own or guarantee about half of all residential mortgages. Had they gone broke in 2008, millions of people would have been unable to get mortgages.

Freddie and Fannie have already soaked up $111 billion from the government, which seized control of them in September 2008 business card. That number is expected to hit $188 billion by the fall of 2011.

"We now have unlimited taxpayer exposure to the bailout of Fannie and Freddie, a bailout nation where the big get bigger, the small get smaller and the taxpayer gets poorer," Rep. Jeb Hensarling, R-Texas, said at a House hearing.

The Obama administration had been expected to announce plans to overhaul Freddie Mac and Fannie Mae this month when it submitted its 2011 budget request. But Treasury Secretary Timothy Geithner said Wednesday that won't happen until next year.

"We want to make sure that we are proposing these changes at a time when we have a little bit more distance from the worst housing crisis in generations," told the House Budget Committee.

Geithner also defended the administration's stimulus plan, saying that before the government can shrink its budget deficit, it must help create jobs and aid the recovery.

Bernanke and Geithner testified as President Barack Obama struggles to manage both high unemployment and rising budget deficits. Under Obama's budget plan, unemployment would still hover near double digits, and this year's deficit would reach $1.56 trillion.

The Fed chairman reiterated a pledge that the Fed will keep its main rate at an all-time low near zero for an "extended period." Low inflation has given the Fed room to keep rates low. Consumer prices excluding food and energy fell in January — the first time such prices have fallen in any month since 1982.

At the same time, Bernanke sought to stress that once the economy is on firmer footing and the Fed needs to reverse course and tighten credit for millions of Americans, he will do so.

Deciding when to boost rates is a high-risk calculation. Acting too soon could derail the recovery. But waiting too long could trigger inflation and feed a speculative bubble in some financial asset. That, too, could threaten the economy, along with Americans' pocketbooks and nest eggs.

Bernanke would only say that "at some point," the Fed will need to move to tighten credit. Whenever it does, consumers and businesses would have to pay more for loans.

Potentially complicating the U.S. rebound is the debt crisis in Greece, which has already sent jitters through Wall Street and could spread to other European Union countries with troubled finances such as Portugal, Spain and Italy. Standard & Poor's warned Wednesday it might further downgrade Greece's credit rating within a month. A downgrade would make it harder and costlier for Greece to borrow.

Pressed by Rep. Ron Paul, R-Texas, on whether the Fed has discussed a bailout of Greece, which is suffering a debt crisis, Bernanke said no.

Another threat comes from the banking industry. The number of U.S. banks considered troubled jumped above 700 last quarter. And loan defaults could escalate the wave of bank failures that totaled 140 last year, the most since 1992.

Also, despite evidence that the thrift industry may be stabilizing, the Office of Thrift Supervision noted Wednesday that 20 thrifts failed last year and that the number is expected to rise this year because of delinquencies and foreclosures.

Lawmakers who questioned Geithner on Wednesday expressed concern about record-high federal budget deficits, which Bernanke and Geithner both said must be reduced over time.

The deficits are the "elephant in the room," said Rep. Spencer Bachus of Alabama, the committee's senior Republican.

___

AP business writers Martin Crutsinger and Alan Zibel contributed to this report.

Bernanke sees low rates amid signs of weak rebound

2010-Feb-22 - Asian stocks fall after losses on Wall Street

HONG KONG – Asian stock markets were mixed Tuesday, with Japan's benchmark off nearly 1 percent, following overnight losses on Wall Street.

After rising strongly the day before, regional markets gave back some of their gains amid few new reports to guide investors. The dollar slipped moderately against the yen and the euro. Oil prices drifted below $80 a barrel.

European and U.S. market declines weighed on investors. Wall Street paused after a four-day rally as cautious outlooks from major consumer companies reminded traders America's economic recovery would be subdued.

Nagging worries about U.S. growth and interest rates, along with uncertainty about China's recent steps to curb extravagant lending, continue to hold investors back, said Belle Liang, head of research at Core Pacific-Yamaichi International in Hong Kong.

"These two things have been bothering investors a lot the last few days," said Liang.

She predicted Asian markets would attract new buying in coming weeks as investors shift their attention to company earnings when Chinese companies begin reporting year-end results.

In the meantime, investors were awaiting testimony from U.S. Federal Reserve Chairman Ben Bernanke on Wednesday and Thursday that could provide more clarity about the bank's plan to unwind its emergency economic support measures and raise consumer borrowing rates bad credit pay day loans. The Fed's surprise decision to hike its emergency lending rates to banks rattled global markets last week.

In Japan, the Nikkei 225 stock average fell 68.96 points, or 0.7 percent, to 10,331.51 Shares of Toyota Motor Corp. lost about 1 percent, in line with the broader market's losses, a day after disclosing it was the target of U.S. criminal and regulatory investigations in connection with its recent safety problems.

Shanghai was Asia's worst performing market, dropping 1.8 percent to 2,950.30. South Korea's index shed 0.2 percent and Australia's index was down 0.4 percent.

Among rising markets, Hong Kong reversed an early retreat to gain 0.4 percent to 20,455.75. Indian and Singaporean shares were up slightly.

In the U.S. Monday, the Dow fell 18.97, or 0.2 percent, to 10,383.38.

The Standard & Poor's 500 index fell 1.16, or 0.1 percent, to 1,108.01, while the Nasdaq composite index fell 1.84, or 0.1 percent, to 2,242.03.

In oil, the benchmark contract was down 37 cents at $79.94 barrel after adding 35 cents overnight.

The dollar fell 91.02 yen 91.15 yen. The euro gained to $1.3603 from $1.3593.

Asian stocks fall after losses on Wall Street

2010-Feb-21 - Facebook appears glitchy Saturday

NEW YORK – Facebook users have been complaining about problems at the social media site.

Users in the U.S. and other countries reported problems lasting at least half an hour on Saturday morning. Some could not log in, and the site was unusually slow for others. Many used Twitter to complain.

Facebook, which has more than 400 million users, has generally avoided such hiccups. Twitter has had bigger problems personal humidifier. Last August, hackers shut down the short messaging service for several hours. Facebook also experienced problems, but it was never shut down completely.

A Facebook representative says the company is looking into the problem.

Facebook appears glitchy Saturday

2010-Feb-20 - GM CEO Whitacre receives $9M in compensation

NEW YORK – General Motors Co. says CEO Ed Whitacre will receive a pay package valued at $9 million this year.

Whitacre, who took over in December as interim CEO and was named to the post permanently in January, will receive a cash salary of $1.7 million, plus stock awards worth up to $7.3 million that can be sold when the automaker goes public again.

Whitacre's pay package exceeds the limits imposed on companies that have received U home kerosene heaters.S. government aid, but the company says an exemption was worked out with government pay czar Kenneth Feinberg.

GM is 60 percent owned by the federal government and has received $52 billion in federal aid.

GM CEO Whitacre receives $9M in compensation

2010-Feb-18 - Haverty Furniture chairman retiring in May

ATLANTA – Furniture retailer Haverty Furniture Cos. said Wednesday Clarence H. Ridley will retire from his post as non-executive chairman and board member in May.

Haverty has served as a director of the company since 1979 and is 66, according to the company's Web site.

The company said its board plans to appoint L payday loans. Phillip Humann, 63, as chairman at the May shareholder meeting.

Shares rose 38 cents, or 3 percent, to $13.13.

Haverty Furniture chairman retiring in May

2010-Feb-16 - Not expanding drilling may cost U.S. $2.4 trillion

WASHINGTON (Reuters) – The U.S. economy will lose $2.4 trillion over the next two decades if the federal government does not allow oil and natural gas drilling in restricted onshore lands and in offshore areas previously closed to energy companies, according to a new study released on Monday.

The report, prepared for the National Association of Regulatory Utility Commissioners, also said U.S. imports of crude oil, petroleum products and natural gas would increase by $1.6 trillion over the period without access to the energy resources.

In particular, the United States is expected to pay the Organization of the Petroleum Exporting Countries (OPEC) $607 billion for an extra 4.1 billion barrels of crude, the report said.

Separate congressional and presidential bans on drilling in most U.S. waters beyond the western and central Gulf of Mexico ended in 2008, and the Interior Department is now considering whether to expand exploration in only a small part of the formerly closed areas.

"It's clear from this report that the status quo on energy production simply won't suffice," said David Parker, president of the American Gas Association payday loans for bad credit. "We encourage lawmakers to heed the results of this study and take a closer look at the energy-rich areas in our country that are currently off limits."

Many environmental groups say the United States should rely less on oil and gas and more on cleaner energy sources like wind and solar.

The study also raised the estimated U.S. oil and gas resources that are available in all areas based on advance drilling technology and easier development of energy supplies trapped in shale rock.

As a result, U.S. resources of crude oil were increased by 43 billion barrels to 229 billion and natural gas was raised by 286 trillion cubic feet to 2,034 trillion cubic feet.

(Reporting by Tom Doggett; Editing by Michael Urquhart)

Not expanding drilling may cost U.S. $2.4 trillion

2010-Feb-14 - EUs Juncker warns against eurozone drift apart: report

BERLIN (Reuters) – Eurogroup Chairman Jean-Claude Juncker warned on Saturday against a further drifting apart of euro zone economies in an interview with a German newspaper.

"We must take care that the divergences do not get wider still. A currency zone cannot exist in the long run if the differences in the current accounts of the economies get too big," he told the Sueddeutsche Zeitung, adding he did not believe the euro zone would fall apart.

The Greek government had to understand it was its job to bring its budget into order but if Athens did everything it could, Europeans would stand by in an act of solidarity.

He declined to say, however, exactly how the EU could help Greece.

"I cannot today name an exact instrument... We have many instruments ready and will use them if necessary," he said.

European leaders sought to help Greece with words of support at a summit on Thursday but offered no specific steps, sending Greek debt yields higher and the euro down against the dollar.

Greece has struggled to convince investors it will get its budget under control and markets are jittery about the prospect of a default. Euro zone finance ministers are expected to discuss the issue again at a meeting on Monday and Tuesday.

Juncker also said he did not believe the EU's Stability and Growth Pact needed to be reformed to respond to a possible state bankruptcy.

"The basis of the Maastricht Treaty is that a state bankruptcy does not come into question. If we had thought a euro zone member could go bankrupt, we would have devised instruments to deal with that. This is not envisaged," Juncker said.

He did not think a clause allowing the euro zone to throw out a member would be a good idea.

"Because throwing (a state out) would have momentous, uncontrollable consequences. We must prevent a state from getting close to bankruptcy."

Financial markets would react very negatively if a country like Greece were to leave the euro zone, added Juncker overnight pay day loans.

"An exit would be the end for Greece. And it would be absolutely negative for the image of the euro zone."

Juncker said there was no appetite to change the criteria for new countries wanting to adopt the euro but euro zone states and the European Central Bank had to make sure criteria were fulfilled for the long term.

However, in a separate newspaper interview, the EU's new Energy Commissioner Guenther Oettinger said the bloc might have to consider changing its rules.

"EU states must start cutting their debt in 2011. If they refuse, the Stability Pact must be changed so EU authorities can better crack down," Oettinger told the Welt am Sonntag.

"The stability of the euro must be guaranteed," He said, adding taxpayers should not pay for exploding state debt.

Juncker declined to say whether he backed Germany's Axel Weber or Italy's Mario Draghi to succeed Jean-Claude Trichet as president of the European Central Bank next year.

Euro zone finance ministers are expected to recommend either Luxembourg's Yves Mersch or Portugal's Vitor Constancio for the number two job at the ECB next week.

Some diplomats think the two top jobs may be shared between northern and southern euro zone states. So if Mersch were to get the number two job, Draghi would be seen as front runner for the presidency, while if Constancio were chosen, it could bolster Weber's chances.

Juncker said Mersch had a proven track record as a central banker.

"If Mr Mersch does not win backing for reasons that lie in the future, one has to ask whether it is a good thing for the euro zone. To oust Mersh so as to have someone else in the chairman's seat does not show much vision," said Juncker.

(Reporting by Madeline Chambers; Editing by Andy Bruce)

EU's Juncker warns against eurozone drift apart: report

2010-Feb-12 - Toyota to expand disclosure amid pressure on CEO

TOKYO – Toyota said Friday it's planning a new level of disclosure about car problems beyond what the automaker is legally required to reveal as it seeks to rebuild consumer trust.

The move comes amid intensifying pressure for the automaker's president Akio Toyoda to testify before Congress about safety lapses at hearings scheduled later this month. Presently, the highest-ranking company executive slated to attend the hearing is Toyota's North American head, Yoshimi Inaba.

Experts say it's vital that Toyoda appear at the Washington hearings to reverse the perception that the company has been slow to recognize and tackle the safety problems that have led it to recall 8.5 million vehicles.

"The final authority needs to be there and explain the situation and say what the company is doing to resolve the problems," said Yoshinobu Yamamoto, professor of international relations at Aoyama University.

If the hearing in Washington goes poorly — if Toyota executives come across as aloof or U.S. politicians come down in a way perceived in Japan as excessively harsh — it could even hurt diplomatic ties between the two nations. Relations are already strained over a dispute about plans to relocate a U.S. Marine base on the southern Japanese island of Okinawa.

"This is Toyota's problem, but if it's mishandled, it could spread to other areas," said Yamamoto.

Japanese media reports say Toyoda will attend the hearings in Washington, but the company declined to confirm that.

Toyoda does plan to visit the U.S. in early March to meet with government officials and Toyota employees — but that would come after the House Oversight Committee hearing set for Feb. 24 and the House Energy and Commerce Committee hearing planned for Feb. 25.

Friday's news that Toyota plans to voluntarily disclose problems that are below recall-level seriousness shows that Toyota is taking some steps to restore its reputation. Details of the plan for more openness would be announced in the future.

"We're trying to be proactive," said spokeswoman Ririko Takeuchi. "Some consumers are worried, so even if the information doesn't rise to the level of a recall, we are taking this step to restore the company's credibility."

"They might be minor (problems), but drivers may need this information," she said, declining to describe what kinds of problems they might include.

Toyota, the world's biggest automaker, is in the midst of recalling about 8 million cars for a gas pedal that can stick in the depressed position and floor mats that can get stuck under the accelerator.

After being nearly invisible the first part the crisis, Toyoda, the president, has apologized several times for the recalls, most recently at a news conference Tuesday after the automaker announced it was recalling 437,000 Prius and other hybrids over brake problems payday loans.

Toyoda also wrote an opinion column in Tuesday's edition of The Washington Post, in which he promised an outside review of company operations, better responses to customer complaints and improved communication with federal officials.

Japanese media have criticized the company over its slowness and lack of clarity in explaining the series of embarrassing recalls. Japanese government officials have also criticized Toyota.

Symptomatic of the public relations disaster for Toyota in the U.S. — its biggest market — the company's woes have become joke fodder for popular TV talk shows such as David Letterman's Late Show on CBS and the Jay Leno Show on NBC.

Some analysts said the company's decision to recall the Prius — its showcase "green" car — signals that it is serious about fixing its image. In the past, the problem — a glitch in the antilock brake that can be easily fixed by reprogramming the computerized braking system — may have been dealt with through a service campaign that notifies owners to get a fix done at their convenience.

"Toyota seems to be taking a stance that it's going to do whatever it takes to restore its image," said Mamoru Kato, an analyst at Tokai-Tokyo Securities.

Earlier this week, Toyota also declined to accept a Japanese government energy efficiency award given to its Prius, saying the honor is not appropriate for a car hit by massive recalls.

Rep. Darrell Issa of California, the top Republican on the Oversight Committee, said Thursday that Toyoda should meet with lawmakers and suggested his committee hold another hearing with Toyoda as a witness. If necessary, Issa said, Congress should compel Toyoda's testimony.

"If we are not receiving the cooperation and transparency this committee and the American people are demanding from Toyota, I would fully support the issuance of a subpoena," Issa said. "We have a duty to determine what Toyota knew, when they knew it and if they met their full obligation of disclosure to U.S. regulators and the American people."

Democratic Rep. Edolphus Towns, who chairs the Oversight Committee, would decide whether to invite Toyoda or hold a second hearing.

The Senate Commerce Committee is expected to hold a Toyota hearing on March 2 but has not yet announced its witness list.

___

Associated Press reporter Ken Thomas in Washington contributed to this report.

Toyota to expand disclosure amid pressure on CEO

2010-Feb-10 - Tractor Supply naming Jamison as lead director

BRENTWOOD, Tenn. – Farm and ranch supply retailer Tractor Supply Co. said Wednesday that Cynthia T. Jamison will become the company's lead director after S.P. Braud's term ends on April 29.

Jamison, 50, has been a member of the company's board since 2002, and leads its audit committee and serves on its compensation committee free credit score.

Braud, 79, has been a director for 17 years.

Tractor Supply naming Jamison as lead director

2010-Feb-9 - Germany working on Greek rescue plan: reports

LONDON (MarketWatch) -- The German government is working on a rescue package for Greece, reports from Berlin said Tuesday, news that sent stocks and the euro rallying.

The Financial Times Deutschland first reported the news on its Web site and the work on a rescue plan was confirmed by Michael Meister, deputy leader of the Christian Democratic Union/Christian Social Union in the Bundestag.

Meanwhile, a Reuters report cited a senior German ruling coalition party source as saying that euro zone countries have decided in principle to aid the debt-stricken nation.

Authorities were considering a range of possible actions, but were most likely to offer "bilateral" help, the report said.

S&P 500 (1 YEAR)

The reports boosted U.S. equities and lifted the euro above the $1.38 level versus the U.S. dollar. See Market Snapshot.

Credit-default swaps on Greece tightened dramatically, according to data from Markit. They dropped 80 points to 340, and are now less than three full percentage points higher than the equivalent debt of Germany payday advance.

In other words, the cost of insuring $10 million Greek government debt against default fell to $340,000 a year from around $420,000.

Fears of a Greek default have roiled financial markets in recent weeks. See Greece topics page for more coverage.

The ECB downplayed the significance of the schedule change, saying Trichet had long planned to attend.

The Greek government is implementing an austerity program designed to bring its budget deficit down from nearly 13% of gross domestic product in 2009 to less than the 3% E.U. limit by 2012.

The European Commission, the executive arm of the E.U., gave the plan a qualified endorsement, vowing to closely monitor Athens' efforts.

The aggressive measures, including public sector pay freezes, have met stiff resistance from public sector unions. Meanwhile, sovereign debt fears have spread across the southern euro zone, including Portugal and Spain.

European Union leaders are set to meet Thursday in a previously scheduled meeting to discuss the economic outlook, but Greece is expected to be at the top of the agenda.

The euro rebounded and financial markets reacted early Tuesday after it was learned that European Central Bank President Jean-Claude Trichet was leaving a meeting in Sydney early to fly back for the E.U. meeting.

Germany working on Greek rescue plan: reports

2010-Feb-8 - European Central Bank in a Squeeze

FRANKFURT — Whether he likes it or not, Jean-Claude Trichet is not just the president of the European Central Bank. Mr. Trichet, 67, is also the de facto president of Europe, at least for the 16 nations that rely on the euro as their common currency.

On paper, the European Union has just established a new president in Brussels, and the central bank’s sole responsibility is to keep inflation in check. Moreover, the bank, based here, has almost no formal policy tools to help an ailing member country like Greece.

But as investor alarm about Greek, Spanish and Portuguese indebtedness increases, the crisis has highlighted the fundamental weakness of the European monetary union. With no strong political arm to ensure that members observe debt limits set by treaty, the responsibility falls to Mr. Trichet to try to resolve the crisis.

In the current situation, said Jörg Krämer, chief economist at Commerzbank in Frankfurt, only the bank’s president “has the authority and the expertise” to manage the situation.

On Saturday, Mr. Trichet told reporters at a meeting in Canada of the Group of 7 finance ministers and central bank presidents that he was confident that Greece would meet tough new belt-tightening goals.

“We expect and we are confident that the Greek government will take all the decisions that will permit it to reach that goal,” Mr. Trichet said, according to Reuters.

Just a couple of days earlier, Mr. Trichet lectured European governments on the need to swiftly pare their budget deficits. “When you share a single currency with others, the counterpart is that you have to have a sound fiscal policy,” he said during a briefing in conjunction with the bank’s monthly policy meeting.

But then, in a gesture that did little initially to calm nervous investors, Mr. Trichet pointed out that the overall deficit level among euro countries, at about 6 percent of gross domestic product, was still well below that of the United States and Japan, which are each set to borrow more than 10 percent of their G.D.P.’s this year.

Mr. Trichet delivers such comments in excellent English with a distinct French accent. Though he can be stern, he sometimes displays a dry sense of humor. Before the G-7 meeting on Saturday, he joked that by gathering in frozen Canadian territory, “we will have just the right environment to be as cool as possible in judging the situation.”

Mr. Trichet sometimes maintains that problems with individual euro nations should be of no greater concern to Europe’s central bank than the fiscal problems of an individual state are to the Federal Reserve in Washington. After being peppered with questions about Greece on Thursday, Mr. Trichet responded: “I doubt that, in a press conference, Ben Bernanke would have a question on Alaska or Massachusetts.”

In fact, Mr. Trichet needs to be more outspoken than Mr. Bernanke because Mr. Trichet operates with many more constraints.

The lack of a strong central government to back up the euro is the most obvious difference bad credit unsecured personal loans. Since last month, the European Council, the body that represents the 27 national governments in the European Union, has had a president for the first time, Herman Van Rompuy. But he has few powers to discipline the 16 euro members.

“The ultimate problem is the nonexistence of a political union,” said Mr. Krämer, the Commerzbank economist. “This is the big, big reason behind all the problems we are talking about.”

The other big difference is that the central bank, unlike the Fed, is prevented from buying government bonds or offering direct support to troubled banks within its sphere. During the recent financial crisis, however, the bank showed it was able to find creative ways of bolstering the European banking system. It vastly expanded the volume of lending to banks, thus helping to avoid a more serious credit crisis.

In the current situation, the bank is aiding Greece by accepting Greek bonds as collateral that banks in Greece can use to borrow money. As long as Greece maintains its current credit ratings, the bonds qualify under central bank rules.

If the crisis worsens, it would fall to European governments to arrange a rescue of Greece or any other ailing country, like Portugal. While wanting to avoid anything that encourages further reckless borrowing and excessive government spending, they have indicated they will do whatever it takes to prevent a sovereign default of a euro member.

But the European Commission, the union’s executive body, lacks the expertise to manage the delicate mixture of carrots and sticks that would be involved in any bailout, economists say. Last year, when growth collapsed in countries in Eastern Europe like Latvia, Hungary and Romania, Brussels essentially outsourced the rescue to the International Monetary Fund.

European leaders do not want to turn to the I.M.F. for help rescuing a member of the euro zone, its core unit.

That probably leaves them with the alternative of advancing aid funds, issuing bonds on behalf of Greece that would be backed by other European countries or guaranteeing Greek bonds.

While the central bank itself cannot supply the money, Mr. Trichet is bound to play a discreet but influential behind-the-scenes role. He has the advantage of being able to speak his mind without worrying about being elected.

That becomes a greater concern as European taxpayers become aware of how much a rescue may cost them.

Many seem resigned to some sort of bailout. Martin Mann, a proprietor of a Frankfurt wine shop, said that he expected the European Union to pay for Greece one way or another.

Asked if that made him angry, Mr. Mann shrugged. “As a taxpayer, I already have to pay the bill for so many messes created by other people,” he said. “I would have to be mad every day.”

European Central Bank in a Squeeze