Finance Blog number 1

O’FALLON, ILL. 

Students clashed with police across Italy in protests against budget cuts, while transport strikes idled buses and trains Thursday, as Italian Premier Mario Monti prepared to unveil his anti-crisis strategy ahead of a confidence vote in his day-old government.

Police in riot gear scuffled with students in Milan, where they planned to march to Bocconi University, which forms Italy’s business elite. Monti, an economist and former European Union competition comissioner, is Bocconi’s president.

Monti formed his government Wednesday, shunning politicians and turning to fellow professors, bankers and other business figures to fill key cabinet posts. His administration is tasked with restoring confidence in the country’s financial future and avoiding a worsening in the eurozone’s debt crisis.

But his choice of unelected experts to lead the government and the prospect of tough reforms have fueled unrest among some Italians.

“The government of the banks,” read one placard held by a youth marching in the protest in Milan.

In Palermo, Sicily, demonstrators hurled eggs and smoke bombs at a bank, and protesters threw rocks at police who battled back with pepper sprays, the Italian news agency ANSA said. One protester was injured in the head in Palermo, where police charged demonstrators who were trying to occupy another bank, it said.

In Rome, hundreds of students gathered outside Sapienza University, while others assembled near the main train station. They planned to march to the Senate, where Monti was scheduled to speak ahead of an evening confidence vote on the new government.

Monti’s cabinet took the place of the center-right government led for 3 1/2 years by media mogul Silvio Berlusconi, stepped down last week, the victim of markets punishing Italy for its escalating public debt and stubbornly stagnant economy.

As Berlusconi’s squabbling coalition argued for months over how to attack the crisis, Italian unions and industrialists pressed for measures to encourage job creation and revive the economy.

Parliament gave final approval Saturday to a package that will reform pensions, slash state spending and open up the economy guaranteed cash advance. Hours later, Berlusconi resigned, paving the way for Italy’s president to ask Monti, a former European Union competition commissioner, to form a government that could tackle the crisis.

But many Italians are expecting to swallow harsher medicine, including a possible return of home property taxes which Berlusconi abolished, a special tax on wealth, and a faster increase in the retirement age.

Antonio Romano, who was distributing leaflets to protesters, said the government’s strategy was to “make the workers and retired people pay for the crisis, not those who provoked the crisis, I mean big business, bankers.”

“Income for all, debt for none,” read the spray-painted letters on a white sheet affixed to a fence in Palermo. University and high school students, as well as young people unable to find full-time jobs joined the protest.

In Rome, marcher Titti Mazzacane said she was skeptical about the new government. While Monti chose “decent and competent people,” the government … “is a little bit too free-market liberal. I am a bit scared,” said the 53-year-old elementary school teacher.

A transit strike of several hours idled the subway system and many buses in Rome. A similar walkout in Milan to press for better work contracts was also called.

State railways said a 24-hour nationwide train strike, which was called by one small union affected only 5 percent of the train rains. Train workers have been pushing for better work rules.

Alitalia warned that a four-hour strike, from noon to 4 p.m. (1100 GMT-1500 GMT) in the air travel sector could cause flight delays, and said it was reducing the number of flights as a precaution during the four-hour window. It noted that the walkout mainly involved air traffic controllers and airport workers and not Alitalia personnel.

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ST. LOUIS

Moneyville is on your side. We help you save money at a time when living costs are rising, interest rates are falling and stress levels are going through the roof.

Readers love our intense focus on personal finance issues and tips on taming everyday costs. They often send stories about how much they saved following our advice.

Rick Romain, for example, saw my Moneyville blog post about getting a basic wireless phone without signing a contract from companies such as SpeakOut Wireless and Petro-Canada Mobility.

“You said buyers should wait for specials. Well, I waited and got a discount on a Nokia flip phone (reduced to $40), with voicemail, texting and camera. If not for you, I wouldn’t have known about this option for those who use a cellphone rarely and for emergencies.”

I always get great feedback from readers when I talk about fighting back against corporate arrogance or indifference. My blog posts about reducing your data roaming charges when you travel drew a huge response.

I also sent a steady stream of traffic to Canada’s two credit bureaus, Equifax and Transunion, when trying to help readers fix errors on their credit reports that led to their being denied a loan.

Rochelle Shalmoni moved back to Canada after 14 years abroad. When her wireless phone service was cut off because of suspected fraud, she had to contact the credit bureaus to straighten things out.

“I spent two days talking to customer service reps and no one could help,” she said.

A few days later, she sent thanks for connecting her to the right people at Equifax and Transunion to get her phones working again.

My fellow bloggers — Marc Saltzman, Krystal Yee, Sheryl Smolkin and the two Moms on Money (Madhavi Acharya-Tom Yew and Peggy Mackenzie) — get an equally strong response to their work.

In his Bucks ’n’ Bytes blog, Saltzman fuses technology with personal finance and turns geek speak into street speak.

In a popular post, he highlighted seven tech bargains found at a dollar store, such as a scientific calculator for $2. Then, he found seven more bargains, such as his wife’s $1 book light, still going after more than two years.

He told readers how to dry out a wet cellphone. (Don’t use a hair dryer.) And in a controversial blog post, he told us about free software that lets you archive YouTube videos to watch offline.

In her 20-Something & Change blog, Krystal Yee focuses on finance issues for young people — such as the right time to buy a home.

“There’s a lot of pressure for my people my age to get into the housing market, even if they aren’t ready,” Yee says.

“There’s a perception that once you become a homeowner, you’re somehow on the right path to financial independence, and that’s simply not true.”

She wrote about the four lies we tell ourselves when thinking of buying a home we can’t afford. (My favourite: It’s better to buy than rent and pay somebody else’s mortgage.)

Yee bought her first home this year and detailed every expense she faced in the first three months, adding up to $10,000. Luckily, she was prepared and had no surprises.

Sheryl Smolkin writes about employment issues in her Eye on Benefits blog, using her legal knowledge and research skills to give meaty advice.

Can the boss cancel your vacation? Can you sue an employer who cuts your pay? And how do you get a fair settlement if you’re fired?

One of Smolkin’s attention-getting blog posts was about a court awarding $25,000 in severance to an employee fired for cause (persistent lateness and making defective aircraft parts).

In their Moms on Money blog, Acharya-Tom Yew and Mackenzie talk about stretching money in busy households with young children and teens.

Beat The Fees, a Moneyville series about customers being nickel-and-dimed on miscellaneous extra charges, “struck a nerve with readers,” says Acharya-Tom Yew.

She helped an older couple recoup some of the fees paid to their bank, though they’d been eligible for seniors’ discounts for years.

Mackenzie gave 10 simple ways to live frugally, followed by 10 more tips from readers. When you take lunch to work, do you put the baggies into the washing machine before reusing them?

Her post about paying $1,900 for three “free” airline tickets with Air Miles was a hit. Many people agreed the fees to transfer points from her in-laws were too high.

You can miss out on big savings — and entertaining writing — if you don’t read the Moneyville blogs. So, get started.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.

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The world’s car makers sought to look past economic worries in Europe and the United States at the Frankfurt auto show on Tuesday, with many betting on cleaner, smaller, high-mileage vehicles aimed at evolving consumer tastes.

The industry, which suffered through the recession caused by the 2007-2009 financial crisis, has been riding the global recovery but now is looking at shakier prospects amid Europe’s debt crisis and worries about the U.S. economy.

Some executives want a firmer response from Europe on its government debt woes. Fiat and Chrysler CEO Sergio Marchionne urged German Chancellor Angela Merkel, who opens the show to the public Thursday, to step up efforts to solve the crisis.

“I think she needs to be part of a permanent solution to this problem,” Marchione told The Associated Press on the sidelines of a Fiat presentation, referring to the leader of the European Union’s economic engine. “She needs to force a fundamental change in the system.”

Fears of possible government debt defaults, starting from bailed-out Greece, are threatening to engulf Fiat’s key market of Italy and are sapping consumer confidence: auto sales there are forecast at around 1.8 million this year, the lowest level since 1983.

Still, this year’s 64th International Motor Show is more cheerful than its 2009 predecessor, which took place during the recession. Organizers say 1,007 exhibitors have signed up _ up from 781 last time, and German car makers including BMW, Daimler, Volkswagen and Porsche have put up strong recent profits _ thanks in part to rising sales in fast-growing emerging markets.

The confidence of the home carmakers showed in a lavish display of Daimler’s Mercedes-Benz and Smart lines, with CEO Dieter Zetsche speaking in front of a giant screen flashing high-resolution video graphics and accompanied by a thunderous sound system. Zetsche said that no matter the “turbulence on the Frankfurt stock exhange” in recent days, “all lights are green” at the company.

VW luxury brand Audi is splashing out for its own test track that winds in and out of the exhibit building.

“People are talking too much about crisis,” said Rupert Stadler, Audi’s chief executive who predicts, for example, double-digit growth for its U.S. sales this year pay day advance. “It’s always possible to complain.”

Journalists and industry executives were getting a sneak peak on Tuesday and Wednesday of the show at Frankfurt Messe exhibition center. It runs from its open to the public Thursday through Sept. 25.

Lighter material, electric-powered engines and tiny, fuel efficient cars styled for city driving are among innovations on display: iconic luxury brand Rolls-Royce presented its electric experimental car, the 102EX, while sports car standout Aston-Martin rolled out its pint-sized Cygnet “commuter” car.

Fiat has a new, slightly longer version of its Panda small car, a mainstay that has sold 6 million since 1980, while Toyota has a new take on its familiar Prius, offering a plug-in hybrid version and a Prius+ seven-seater. Daimler AG’s Smart brand has an electric version of its tiny two-seater.

Ford Motor Co. is unveiling the Evos, a concept car that won’t make it into production but which shows design elements that will appear on Ford’s regular models soon. Those could include the car’s slender, LED headlights.

VW has its new subcompact up, which is only 3.54 meters long and has a new fuel-efficient three-cylinder engine. BMW’s small electric i3 saves weight with high-tech carbon reinforced plastic, or CRP.

“The use of CRP has allowed us to solve the contradiction that electric vehicles _ BEVs _ will have to be distinctly heavier because of the weight of the battery,” said BMW’s development chief, Klaus Draeger, “because CRP is a lightweight yet strong and rigid material.”

As usual, the show isn’t all about small and frugal. At the Porsche stand, journalists and other onlookers pawed the new version of the classic 911 Carrera sports car. The gleaming dark blue display model was quickly covered with fingerprints from people climbing in and out or leaning on it to have their snapshot taken.

A new 911 is priced in Germany at euro88,037 _ including tax _ for the Carrera, euro102,436 for the Carrera S with the bigger engine. U.S. prices start at $82,100 and $96,400.

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Online:

http://www.iaa.de/en/visitors/

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European Central Bank head Jean-Claude Trichet warned there are increasing risks for the eurozone’s waning economic recovery and less chance of inflation _ clear signals the bank is done raising interest rates for some time.

At a news conference, Trichet offered new, gloomier economic projections after the bank’s 23-member governing council left the benchmark refinancing rate unchanged at 1.5 percent.

Pressure had risen on the bank to freeze its rate hike campaign after a turbulent summer in which worries grew that the 17-nation currency bloc’s debt crisis was hurting consumers and businesses and global growth was stalling.

Trichet said the eurozone economy was expected “to grow moderately” but that that assessment was “subject to particularly high uncertainty and intensified downside risk.”

Meanwhile, the risk of excessive inflation, which he had previously described as leaning to the upside, was now “broadly balance” with an equal chance of inflation below forecasts.

Trichet turned aside questions about whether rates are on hold, saying “we are never pre-committed, and we stand ready to do whatever is necessary.”

But economists say the lower inflation estimate and reduced growth expectations are signs that the bank will not raise rates soon. It controversially raised rates a quarter point in April and July, based on earlier expectations for more inflation and stronger growth.

Shadows over Europe’s recovery have gathered quickly since the bank last made a rate decision on Aug. 4. Indicators of business and consumer optimism have sagged and second quarter growth came in at a bare 0.2 percent. The continent’s debt crisis has led to dizzying ups and down on stock and bond markets, which is now weighing on consumption and production.

The uncertainty over growth also pushed Britain’s Bank of England to leave rates unchanged on Thursday, at a record low of 0.5 percent, although in Britain’s case inflation remains stubbornly high at 4.4 percent.

Eurozone officials are trying to contain a crisis triggered by market concerns that governments cannot handle their high debt loads. Fears of default have raised borrowing rates for financially troubled countries, to the point where Greece, Ireland and Portugal have need bailouts from other eurozone countries and the International Monetary Fund.

With prospects for the economy worsening, some experts even think the bank may have to cut rates if Europe’s debt crisis takes a turn for the worse. Economists at the Royal Bank of Scotland see a 40 percent chance that the bank will have to slash rates by a half percent by the end of this year.

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Asia-Pacific markets rebounded in early trading Wednesday, as traders looked past some bleak U.S. jobs data and Europe’s debt crisis to scoop up bargains following a steep selloff of equities.

Japan’s Nikkei 225 index, which on Tuesday fell to its lowest level since April 2009, rose 1.4 percent to 8,714.59. A slightly lower yen helped Japan’s powerhouse export sector recover from the beating it took earlier this week.

Mazda Motor Corp. jumped 3.4 percent, and Sony Corp. gained 2.8 percent. Toyota Motor Corp. rose 2.3 percent.

Markets received further good news when the Australian government said the economy expanded 1.2 percent in the quarter through June, rebounding from a 0.9 percent contraction in the previous three months. Australia’s S&P ASX 200 index gained 1.9 percent at 4,153. New Zealand’s NZX 50 was 0.7 percent higher at 3,294.42.

South Korea’s Kospi clawed back the prior day’s losses to rise 2.4 percent at 1,809.35, with blue chip high-tech stocks among those leading the way. Hynix Semiconductor, the world’s second-largest memory chip maker, soared 7.4 percent. LG Electronics Inc., which ranks No. 2 globally in flat screen televisions, was 5.8 percent higher.

Softening gold prices, which recently have hit all-time highs, caused gold-related shares to decline. Newcrest Mining Ltd., Australia’s top gold miner, lost 1 percent.

A wave of negative sentiment slammed global stock markets last Friday, when a government report said the U instant payday loan.S. economy failed to add any new jobs in August. It was the worst reading on jobs since September 2010.

But signs of growth in the U.S. service sector helped tame concerns about another U.S. recession. The Institute for Supply Management said Tuesday that the service sector grew more than analysts had expected in August.

Growth in that part of the economy, which employs nearly 90 percent of America’s work force, fell the three previous months.

The Dow Jones industrial average fell 0.9 percent to 11,139.30. The Standard and Poor’s 500 index dropped 0.7 percent to 1,165.24. The Nasdaq composite fell 0.2 percent to 2,473.83.

Separately on Tuesday, the Swiss franc dropped sharply after the country’s central bank pegged it against the euro in an attempt to rein in the export-sapping appreciation of the currency.

The franc has been hugely in demand in recent weeks due to its widely perceived status as a safe haven during times of market volatility.

The dollar strengthened to 77.38 yen from 77.67 yen in late trading Tuesday in New York. The euro rose to $1.4027 from $1.3991. It was the first time the euro has fallen below $1.40 since July 13.

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Drugmaker Bristol-Myers Squibb Co. said Thursday that its second-quarter profit fell nearly 3 percent due to higher taxes and increased costs for production, marketing and administration. Those were partly offset by a 14 percent jump in sales.

The company, which sells blockbuster blood thinner Plavix, still beat Wall Street expectations, and it increased its earnings-per-share forecast for 2011 by 8 to 10 cents.

New York-based Bristol-Myers said net income was $902 million, or 52 cents per share, down from $927 million, or 53 cents a share, a year earlier. Excluding a total of $69 million in one-time restructuring and licensing charges, it would have made 56 cents per share.

Analysts surveyed by FactSet were expecting, on average, 55 cents per share and revenue of $5.05 billion.

Revenue totaled $5.43 billion, up from $4.77 billion in 2010’s second quarter, on strong increases for most drugs and encouraging initial sales for a new cancer medicine.

“This performance demonstrates the success of our biopharma strategy in delivering short-term results and in positioning the company for the future,” Chief Executive Lamberto Andreotti said in a statement.

The company raised its full-year profit forecast to $2.08 to $2.18 per share, or $2.20 to $2.30 per share excluding one-time items. In January, it gave a forecast of $2 to $2.10 per share, or $2.10 to $2.20 excluding one-time items.

Bristol also confirmed its forecast of $1.95 per share, excluding one-time items, for 2013. That’s the first full year after generic competition starts slashing Plavix revenue.

Andreotti noted the company has had three new products approved in three months: just-launched Yervoy for advanced skin cancer, Nulojix for preventing rejection of transplanted kidneys and Eliquis, an anticlotting drug approved in Europe for preventing dangerous blood clots after knee or hip replacement surgery. Bristol and partner Pfizer Inc. plan to apply for U.S. approval of Eliquis later this year.

Top seller Plavix, which faces generic competition next May, had sales jump by 15 percent to $1.87 billion, and bipolar disorder treatment Abilify rose 12 percent to $706 million. Rheumatoid arthritis drug Orencia, Baraclude for hepatitis B and Sprycel for leukemia were all up by more than 25 percent, for a total of $713 million. Yervoy brought in $95 million.

But blood pressure drugs Avapro and Avalide, hurt by supply problems that have been mostly resolved, saw sales drop 18 percent to $251 million.

The company’s tax rate jumped to 27 percent, from 20.4 percent a year ago, boosting income taxes to $483 million.

For the first six months, Bristol-Myers reported net income of $1.89 billion, or $1.10 per share. That was up 13 percent from $1.67 billion, or 96 cents per share, in the first half of 2010. Revenue was up 9 percent, to $10.45 billion from $9.58 billion.

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When I went to college (which wasn’t THAT long ago), it was slim pickings when it came to dorm furnishings, especially trying to locate those elusive twin extra-long sheets.

Not so anymore. From bean bag chairs to funky lamps, many big box stores are now full of merchandise at this time of year aimed at the college-going crowd as retailers have realized that this is a huge untapped market. Or at least it was.

Now one more store to add to some St. Louisans’ college shopping list will be Pottery Barn’s new tween and teen store that will open on Saturday next to Plaza Frontenac. The adjoining 1,300 square-foot PBteen and 6,100 square-foot Pottery Barn Kids stores will be housed in the building formerly occupied by the standalone Williams-Sonoma home store in the parking lot. (Williams-Sonoma is the part of the same company as Pottery Barn.)

PBteen, which sells bedding, lighting, and other home furnishing accessories, has been around as an online store since 2003 — and just went international with its online sales earlier this year. But it only has a handful of bricks-and-mortar stores around the country. The Plaza Frontenac store will be the company’s fourth store in addition to ones in New York, Atlanta, and Chicago. So why did St. Louis get the honor?

“With all of the colleges in the St. Louis area, we think it will be a great place to showcase our PBdorm brand,” Janey Hayes, president of Pottery Barn Kids and PBteen said in an email.

And, of course, it had an existing piece of real estate to fill.

So will PBteen be opening other stores across the country? It looks like St. Louis is it for now. Hayes said the company has no other confirmed plans for expansion.

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TORONTO