Finance and Economic

Pressure continues to mount on President Obama to select Elizabeth Warren as the nation’s first consumer financial protection regulator.

Warren, 61, has become something of a cause célèbre as the administration’s top pick to run the new agency charged with protecting consumers from abusive mortgage and credit card practices.

There’s even a Hollywood-produced Elizabeth Warren rap video circulating online called "Got a New Sheriff," featuring a rapping cowboy singing the Harvard professor’s praises.

Last week, 43 House Democrats sent a letter to President Obama, asking him to nominate Warren and requesting a meeting at the White House to discuss Warren’s appointment.

"You have an opportunity to appoint to head this body a true visionary — not the usual Washington careerist. You have an opportunity to appoint to this body the single best-qualified choice," said the letter, signed by Rep. Barney Frank, D-Mass., and Rep. Carolyn Maloney, D-N.Y., among others.

Last week, Warren sat down with the head of a large and influential banking lobbying group, the Financial Services Roundtable. The group declined to comment on the meeting.

Warren, who has repeatedly declined interview requests on this topic, has also been meeting with various key administration players, including a meeting with senior White House advisers on Aug. 12th.

The public groundswell for Warren puts the White House in a tough spot. It’s not clear when President Obama will make his decision, but an announcement is isn’t expected this week.

"The administration is hesitating because they’re faced with the traditional problem that Obama has faced," said Julian Zelizer, a professor of history and public affairs at Princeton University.

If the White House passes Warren over, Zelizer says, they disappoint liberals whose support has been key throughout the administration business card templates. If Warren gets the nod, the White House must deal with "political difficulties on Capitol Hill where centrists have quite a lot of power and Republicans are becoming quite obstinate," Zelizer said.

Warren teaches contract and bankruptcy law as a Harvard University professor and she’s also written a number of personal finance books. More publicly, she chairs a congressional oversight panel that has garnered attention for its critical reviews of government spending to bail out Wall Street banks under the Troubled Asset Relief Program.

Treasury is in the planning stages of creating the consumer financial protection bureau, which will be housed inside the Federal Reserve, thanks to the new law cracking down on Wall Street banks.

Warren is not the only candidate under consideration to run the bureau. But she is the most polarizing. Senate banking chief, Seen. Chris Dodd, D-Conan., has warned her nomination would cause a protracted and lengthy battle in the Senate, adding he isn’t sure she could secure a Senate confirmation.

Banking groups and conservatives paint her as too liberal for a regulator job. They say an aggressive regulator would undermine bank safety by crafting rules that force banks to make risky loans. They’ve also accused her of lacking the chops to be a regulator.

Supporters say the consumer regulator job was written for her. Warren came up with the idea for the consumer financial protection agency and has spent her career championing consumers duped by "tricks and traps" of the financial industry, she often says.

Other candidates rumored to be in contention for the job are Michael Barr, Assistant Treasury Secretary for Financial Institutions, as well as Deputy Assistant Attorney General Gene Kimmelman. 

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Ann Moore, the chief executive of Time Inc. — the world’s largest magazine publisher — is stepping down from the company to be replaced by Jack Griffin, a group president of Meredith Corp., according to published reports.

The New York Times, Wall Street Journal and New York Post all reported the CEO shakeup Wednesday evening, citing unnamed executives at the companies.

A Time Warner (TWX, Fortune 500) subsidiary, Time Inc. publishes about 115 magazines worldwide including Time and Sports Illustrated and accounts for almost a quarter of total advertising revenues of U.S. consumer magazines. Measured by circulation, it’s the world’s largest magazine company, followed by Meredith, which is based in Des Moines, Iowa.

A Time Warner spokesman could not be immediately reached for comment. CNNMoney is a joint venture of CNN and Time Inc.

A 32-year veteran of Time Inc., Moore was appointed CEO in 2002. She has presided during a time when magazines suffered an unprecedented decline in advertising revenue due to competition from online media and the recession.

In recent years, Time Inc. has made major staff cuts and shed some of its magazine titles.

Griffin ran Meredith’s magazine brands — including Better Homes and Gardens, Parents and Family Circle — as well as its Internet and digital properties.

Meredith announced his departure from the company on Monday, saying he had left "to pursue another opportunity."

Griffin would inherit Moore’s role just as Time Inc. reported a 50% surge in its quarterly operating profit Wednesday.

That surge was primarily due to substantial cost-cutting measures, including a restructuring of the company’s pension expenses.

Time Inc.’s quarterly revenue remained virtually unchanged. Advertising sales were up 4%, but other revenue failed to grow primarily due to flat subscription growth and an ongoing impact from the sale of Southern Living at Home last fall, the company said.

Nearly all of Moore’s career has played out at Time Inc., where she worked her way up the corporate ladder. She started as an analyst shortly after earning her Harvard M.B.A. in 1978 and later became publisher and then president of People. 

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The amount of foreclosures initiated by lenders in Massachusetts in June has dipped from June of last year according to a new report from The Warren Group.

June marks the second straight month that petitions to foreclose have gone down year over year, per the Warren Group. State lenders filed 2,220 petitions for foreclose — the first step in the foreclosure process — a 21.7 percent drop from 2,835 last June.

June’s foreclosure petitions were up 5.2 percent from the 2,110 filed in May.

A total of 13,338 foreclosure petitions have been filed so far this year statewide, down 3.4 percent from 13,813 during the same period last year.

“The foreclosure picture in Massachusetts hasn’t really improved that much. The level of foreclosure starts for the first half of the year is only slightly lower than a year ago. We have been averaging just over 2,200 foreclosure petitions a month this year compared to about 2,300 a month last year,” Warren Group CEO Timothy M. Warren said in a statement.

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The Hawaii Department of Business, Economic Development and Tourism has nearly $3 million of available grants for business and nonprofits to install electronic vehicle charging equipment.

DBEDT anticipates awarding between two and seven grants throughout the state ranging anywhere from $30,000 to $2 million each.

The money is coming from federal stimulus funds that are allocated for Hawaii’s energy program.

In 2008, the Lingle administration committed to reducing dependence on oil in the islands to 30 percent by 2030 and electric vehicles is one means of realizing that goal payday advance online.

The application deadline is July 26 and the funds must be expended by March 30 of next year. Announcement of the selected recipients is scheduled for Aug. 31.

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Wise readers don’t want to overpay when investing in mutual funds. Here’s a typical question on the subject: "You wrote about paying attention to mutual fund expenses but never said what are acceptable expenses or how much is too high. Can you elaborate?"

Fund expenses include many things, such as commissions or "loads" when you buy a fund and/or redemption fees or "back-end loads" when you sell it, as well as ongoing operating expenses, including a management fee to the people who manage the fund’s portfolio.

Funds sold by brokers typically charge commissions when you buy and/or redemption fees if you sell before a certain time. Commissions for large purchases tend to be lower in percentage terms. Or, in lieu of a commission to buy, you may pay higher ongoing "service" or "distribution" fees on top of the management fees and other operating costs.

Different "share classes" of broker-sold funds reflect these different cost structures. The one that’s best for you will probably depend on how much money you invest and for how long.

I make my own investment decisions and buy only direct-marketed "no-load" funds that do not charge any commissions or loads. If you need professional advice, consider a fee-only adviser who is free to recommend any fund, including no-load funds. If you use an adviser who can recommend only from a list of load funds approved by his firm, I suggest you favor those with low ongoing operating expenses.

That way, at least your costs are low once you pay the initial load. For example, the class A shares from the American Funds Growth Fund of America, a fund with a strong long-term record, impose an upfront sales charge or load as high as 5.75 percent. But annual expenses are just 0.76 percent, about one-half the industry average for stock funds.

Ultimately, a fund’s annual operating expenses — the so-called fund’s expense ratio — may have a much greater impact on your wallet than the initial load.

Not all funds charge loads, but all funds ding you for operating expenses that subtract, dollar for dollar, from your returns.

Therefore, I will not buy a fund with an expense ratio so high that it makes it very difficult to achieve the returns I could more easily obtain with another fund.

For index funds that simply track a broad market benchmark, I want annual expenses no higher than 0.20 percent. With actively managed stock funds, I generally avoid those with an expense ratio of more than 1 percent, and for actively managed bond funds, of more than 0.50 percent.

That doesn’t mean I will never buy a fund with higher expenses, but there has to be an overriding factor, such as a consistent investment approach with a record of solid returns in good times and bad despite the higher costs.

Even then, I’ll try to find a cheaper alternative.

I have used — and can recommend — a fund analyzer tool at the website of the Financial Industry Regulatory Authority (www.finra.org/fundanalyzer) that lets you screen for mutual funds and exchange-traded funds based on factors such as investment objective, expense ratio and ratings by the fund analysis firm Morningstar.

You can compare as many as three funds side by side and see how their expense ratios stack up against the industry average of similar funds.

Other newly added features include one-click access to a fund’s prospectus and other disclosure documents, and a report in portable document format that you can print or save.

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Sonnenschein Nath & Rosenthal LLP, a law firm based in Chicago, will combine with London-based Denton Wilde Sapte LLP if partners vote to approve.

The combined firm will be known as SNR Denton and will have more than 1,400 lawyers in 18 countries. The heads of each firm will serve as co-chief executive officers, according to the joint statement.

If approved, it will be the second major combination of a U.S. and U.K. firm in the past year. On May 1, Washington-based Hogan & Hartson and London-based Lovells LLP joined to create Hogan Lovells, a 2,500-lawyer firm with about 40 offices, according to its website.

"Looking back in history, it is relatively rare to see transcontinental mergers," said Kent Zimmermann, a consultant with Zeughauser Group. "It’s been telling that there have been two recently. Globalization is the number one thing affecting the economy, and the number one thing affecting law firms."

Sonnenschein Nath & Rosenthal has had a St. Louis area office since 1990. It opened with one lawyer but now has nearly 50 lawyers on staff, said Jennifer A. Marler, the local office’s managing partner.

The firm’s partnership with Denton would have no immediate effect on the St. Louis office, she said.

Marler said she was pleased that the agreement would give the firm an international base of lawyers from whom to seek advice and counsel, and could help create future growth options for the firm as a whole.

Denton handles work for clients in energy, transport and infrastructure, financial institutions, real estate and retail and technology, media and telecommunications sectors, according to the firm’s website. It has offices in the Middle East, Europe and southeast Asia.

Robert Kelly of the Post-Dispatch contributed to this report.

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Small business owners who provide green products or services or who want to make their operations greener can attend a free workshop in Albuquerque on March 30 to learn about financing, government incentives and best practices.

Green For All, a national organization dedicated to building a green economy, is organizing the workshop to provide small businesspeople with tools, resources and networking information to grow green enterprises. The University of Phoenix is sponsoring the all-day event.

Panels and seminars will cover lessons learned by people who run green businesses, government support and tax incentives, commercial and Small Business Administration loans, alternative sources of capital, and opportunities to partner with the national laboratories no fax cash advance. Speakers include government officials, green business owners, lenders and others.

The event runs from 8:30 a.m. to 4 p.m. at the University of Phoenix campus at 5700 Pasadena Ave. NE on Tuesday.

Only individuals who own or operate an existing small business are invited to attend. All participants must complete and return a short application and receive confirmation that they have been selected to attend or they will not be admitted to the event.

To apply for participation, or for more information, send e-mail to cap@greenforall.org.

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Colleges are bracing for another year of high demand for financial aid — and that means students need to get their applications in as quickly as possible.

Federal student loans remain plentiful, but other types of aid from states and colleges are more limited. By missing one of the many deadlines, students could receive fewer sought-after grants and scholarships that don’t have to be repaid, and end up having to apply for loans that do.

Blame the continued weak economy for the stiff competition for aid. Unemployment remains high. Families that have burned through cash reserves now are applying for aid for the first time, aid officials say.

In addition, a bumper crop of high school seniors and more people returning to school for advanced degrees will add to the aid demand, says Patricia Nash Christel, a spokeswoman for student loan giant Sallie Mae.

The first step to getting aid is filling out the Free Application for Federal Student Aid at fafsa.ed.gov. It not only will determine your federal aid, but states and colleges also use the FAFSA to award their money.

The earliest you can submit a FAFSA is Jan. 1. States and schools set their own deadlines for when the FAFSA must be submitted.

Schools often set priority deadlines so applications submitted by that date will be the first batch looked at. Deadlines can differ widely, so check your school’s website.

Parents often want to file their tax returns before filling out the FAFSA. Although having an up-to-date tax return makes filling out the application easier, it’s better to get the application in by the deadline using last year’s tax return and then correcting the information later.

Besides the FAFSA, many schools are creating their own aid forms or requiring families to submit additional documents to make sure the aid is going to students in need.

What if you blow all the deadlines? You can still qualify for federal Stafford student loans by submitting the FAFSA any time during the academic year.

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Iceland’s government will meet opposition lawmakers today, seeking consensus over a U.K. and Dutch proposal to amend the terms of a loan covering foreign depositor claims that led to a souring of international relations and stalled payments of the island’s bailout.

“I can’t comment on the specifics of the offer we received, although I can say that it’s worth consideration,” said Foreign Minister Ossur Skarphedinsson in a phone interview yesterday. Prime Minister Johanna Sigurdardottir told broadcaster RUV on Feb. 20 the new offer significantly reduced the burden on Iceland.

One option is a floating interest rate instead of the 5.5 percent rate set when the $5.3 billion loan agreement was made in October and an interest-rate holiday may also be considered, according to government officials on Feb 19. They declined to be identified because the proposals have not been made public.

The new rate will make it cheaper for Iceland to repay a loan granted to cover deposits at failed Landsbanki Islands hf’s Icesave Internet bank. Iceland has been trying to restore relations with the British and the Dutch after President Olafur R. Grimsson blocked a bill intended to compensate the two countries. That rejection means the legislation will be put to a March 6 referendum, which most polls show Icelanders will reject.

It’s unlikely the government will try to introduce any new proposal to the parliament, unless it enjoys a wide political consensus, Skarphedinsson said yesterday.

“A proposal that has the backing of a strong majority in parliament is unlikely to be opposed by Iceland’s president,” he said.

‘Hang On’

After last night’s meeting, Sigurdardottir said she would “hang on to the hope of reaching an agreement, until something else is revealed.”

Standard & Poor’s has said it may follow Fitch Ratings decision, made when the bill was suspended, to cut Iceland’s credit grade to junk. Sigurdardottir previously signaled her government wanted to renegotiate the bill before it’s put to a vote.

The suspension of the Icesave bill, named after the high- yielding Internet accounts offered by failed Landsbanki, has put in question the continuation of Iceland’s $4.6 billion International Monetary Fund-led loan.

While the IMF has said continued disbursement of its $2.1 billion portion of the emergency loan isn’t linked to Icesave, the fund can’t provide installments without financing from contributing nations. Nordic countries that are providing $2.5 billion have indicated they want Icesave resolved before they resume payment.

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Stocks erased big losses by the close Friday, with technology shares leading the advance, following a three-session rout that had taken the market to its lowest point since last fall.

The Dow Jones industrial average (INDU) added 10 points, or 0.1%, ending at 10.012. The Dow had fallen as low as 9,835 earlier.

The S&P 500 index (SPX) rose 3 points, or 0.3%, and the Nasdaq composite (COMP) gained 16 points or 0.7%. All three major indexes had touched three-month lows before recovering.

Stocks fell sharply in the afternoon as worries about a growing debt crisis in Europe exacerbated uncertainty about the U.S. economic outlook. But the market changed direction as the dollar trimmed bigger gains and some of the selling pressure gave way.

"There may be some late-day buying coming in because the market has sold off pretty dramatically over the last few days," said Haag Sherman, managing director at Salient Partners.

Worries about the Euro zone caused investors to dump riskier assets and plow money into the U.S. dollar and government debt. The greenback rose to a more than 6-month high versus the euro and also gained against the yen. The dollar’s strength then dragged on commodity prices, oil and gold stocks and companies and sectors that have been benefiting from a weaker dollar.

"A lot of the selling that we’re seeing is technical, and it’s all being driven by the dollar," said Jamie Cox, managing partner at Harris Financial Group.

He said that because there’s a flight to quality into the dollar, assets that have been benefiting from a weak dollar are getting hit. However, he said that the trend was temporary and that once the panic washed out, buyers would move back into riskier assets.

Debt crisis: Stocks plunged Thursday on worries that rising debt problems in Greece, Portugal and Spain could throw a wrench into any economic recovery in Europe, which would then influence the United States.

The news that the opposition parties defeated the Portuguese government’s austerity plan provided another reminder, if any were needed, that European countries will find it extremely difficult to get a grip on their public finances.

Global markets continued to slide Friday, with Asian and European markets ending lower.

The global jitters overshadowed a U.S. government report that showed moderating job losses despite an improved unemployment rate.

"The employment report was a mixed bag overall, but the market is more focused on what is happening globally," said David Rosenberg, chief economist at Gluskin Sheff & Associates.

He said that with heightened concerns over nations’ debt, risk premiums go up and the outlook for the economy and stock market gets cloudier.

Rosenberg said U.S. investors are focused on whether there will be a default or bailout in Greece, and how this will affect the euro and the dollar. "All of this is going to impact U.S. markets," he said.

On the move: The strong dollar again dragged on commodity prices, and energy and metal stocks fell through most of the session. But in the last hour turnaround, oil and gold stocks cut losses or turned higher.

Strength in big tech stocks such as Cisco Systems (CSCO, Fortune 500), Intel (INTC, Fortune 500), IBM (IBM, Fortune 500) and Microsoft (MSFT, Fortune 500) helped temper broader losses and eventually led a comeback.

In other news, Goldman Sachs (GS, Fortune 500) has surprised many on Wall Street by announcing that it is paying CEO Lloyd Blankfein $9 million in company-restricted stock as his bonus. Blankfein was expected to receive a heftier payment.

Earlier, JPMorgan (JPM, Fortune 500) said CEO Jamie Dimon was given a $16 million bonus last year, in restricted stock and options.

Market breadth turned mixed after being negative through most of the session. On the New York Stock Exchange, losers topped winners by nine to seven on volume of around 1.56 billion shares. On the Nasdaq, advancers beat decliners seven to six on volume of 2.84 billion shares.

Rally hits a roadblock: The S&P 500 surged 23% in 2009, and 65% after hitting a 12-year low on March 9 of last year. That momentum propelled stocks into the first half of January. But by the second half of the month, the tone had turned more sour and investors had begun to step back.

Between rally highs hit on Jan. 19 and Friday’s lows, the S&P 500 lost 9.2%, getting close to the technical definition of a correction - a loss of 10%.

Jobs: Employers cut 20,000 jobs from their payrolls last month, according to a Labor Department report released before the start of trading. Employers had been expected to add about 15,000 jobs, according to a consensus of economists surveyed by Briefing.com.

Employers cut a bigger-than-initially reported 150,000 jobs from their payrolls in December.

The January report had some positive signs, including an increase in the work week and an increase in temp agency employment — both of which are seen as leading indicators.

But the report also showed that the impact of the recession on the labor market was far worse than initially reported — making the recovery process all the more arduous.

The unemployment rate, generated by a separate survey, fell to 9.7% from 10% in December. Economists expected it to hold steady at 10%.

Toyota: The troubled company’s chief executive apologized Friday for the recall of 8 million cars. However, he did not announce a new recall of the popular Prius Hybrid, despite reports of brake problems.

Earlier, the company said it is also examining the brake systems of the Lexus hybrid vehicles since they used the same system as the 2010 Prius.

Toyota (TM) shares gained 3.5%.

Commodities: COMEX gold for April delivery fell $10.20 to settle at $1,052.80 an ounce, after slumping $49 Thursday.

U.S. light crude oil for March delivery fell $1.95 to settle at $71.19 a barrel on the New York Mercantile Exchange.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.54% from 3.61% late Thursday. Treasury prices and yields move in opposite directions. 

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