Finance topics

ST. LOUIS • City water workers have long worried that their bosses were looking to sell one of the city’s richest assets – its water – and their jobs along with it.

To that end, the city has hired water engineers Black & Veatch, for $245,100, according to the contract. The company will not, however, do the work itself, or at least not under this contract. Instead, it has been hired to help the city find another company to do the work.

But the contract outlines what Black & Veatch have to provide the city, and the first descriptions of the work to come are due – about now.

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Amy Hake and Jon Hambach are in love.  They just don’t have a marriage license.

They do live together. They have a joint bank account, a jointly-owned car and they’re buying a house together in Warrenton.

“We love each other deeply. Marriage will come eventually,” says Jon, 24.

Why not tie the knot now? “We wouldn’t have any money left,” laughs Amy, 23. “Weddings are terribly expensive.”

Lots of people live together before marriage. So, let’s take a look at some of the money and legal issues that entails.

Come January, Amy will go back to college to finish her degree, which means money will be tighter and Jon will have to carry more of the financial load on his salary as a systems installer for CenturyLink. He’s cool with that.

Money is a major cause of arguments among couples. For husbands, financial disagreements are the strongest predictor of divorce, according to research by Jeffrey Dew of Utah State University. For wives, both financial and sexual disputes predict divorce, but financial arguments were a much better predictor.

Because of such complications, live-ins should keep their finances separate, Bridget Brennan, a “marriage educator” at St. Louis Healthy Families.  They should agree in advance how they’ll cover joint bills.

Often, the conflict stems from different ways that people view money; some see it as a means to security, and sock it away. To others, it’s a means to fun.

“If she shops at Plaza Frontenac and you go to J.C. Penney’s, you’d better be aware of that,” says Brennan. “The spender will resent the saver. It turns into a control issue and nagging.”

Counselors suggest couples talk frankly about money before moving in together. Watch your potential mate’s behavior, says Brennan. Can you live with their money habits?

Jon and Amy have known each other since grammar school. They had the money talk and decided they were on the same beam.

“We both grew up, not poor, but without a lot of excess money,” says Amy. “We believe in saving, and having a rainy day fund, but we want to enjoy things too.”

That’s why they’re buying a house. They have a dog and want a second one. That would be a no-no in their current rental.

They got a good deal, says their real estate agent, Steve Magnum of Coldwell Banker Gundaker. They’re paying $95,000 for a ranch-style house that sold for $141,000 new about five years ago.

Jon and Amy seem headed for bliss. But it’s worth looking at what happens when unmarried people break up after living together.

Divorce law doesn’t apply, of course. There’s no community property. (Illinois’ does provide divorce for people legally joined in civil unions. Missouri doesn’t allow civil unions no fax pay day loans.)

There’s no such thing as “palimony” under Missouri and Illinois law. One partner will have no claim on the other’s income, says Joe Cordell, senior parter at the Cordell and Cordell law firm, which specializes in divorce.

Neither state recognizes a “common law marriage” among long-term live-ins.

Instead, the law treats ex-lovers like partners breaking up a business. What counts is what’s on paper. If a house is in one partner’s name, it doesn’t matter if the other helped pay the mortgage for all those years. Oral agreements aren’t enforceable in real estate.

If property is jointly owned, and the partners can’t agree, the court will probably order the property sold and the proceeds split between them, says Cordell.

Partners can regulate those things through separate contracts, sometimes called cohabitation agreements. But things can get complicated here. For instance, the courts won’t uphold a personal services contract for “love and affection,” says Cordell.

If you want such a contract, better see a lawyer.

If the couple has a child, a separate set of laws applies to custody and support, as in divorce.

Of course, these aren’t just issues for the young, as Jim Wilson and Kelly Lutz can testify. He’s 76, the retired president of a big moving company. She’s 48, a medical assistant.

Wilson, a widower, asked Lutz to marry him and she said yes. They moved in together in Sunset Hills. But they’re not sure they’ll ever tie the knot.

“I have two daughters older than her. She’s got three children,” says Wilson. “My daughters love her and we have not had an argument in three and a half years.”

Lutz sold her house in Chesterfield, and put the money toward her retirement. He sold his condo and bought a bigger one with room for Lutz’ high school age daughter and college-age son.

Mixing families brings legal complications. Wilson says he has “quite a bit of money.” If he should marry, and then die, who inherits what?

“That’s my biggest fear,” says Lutz. “We’ve all blended together so well, I don’t want anybody to feel threatened.”

Wills and a prenuptial agreement might settle those issues, of course. Marriage educator Brennan thinks prenups are a very good idea.

“A prenup doesn’t mean you don’t love each other. It means your caring for people from your first relationship,” she says.

But for now, the couple likes things the way they are. “We are very, very happy,” says Lutz.

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The European Central Bank

Lincredible! Linsanity! Divine Lintervention!

Whatever pun you choose to describe it, the Jeremy Lin phenomenon is shaping up to be a big win for many retailers.

Lin, an unheralded Asian-American player from Harvard, has turned in a string of sensational performances since coming off the bench in a game earlier this month, leading the New York Knickerbockers to a surprising winning streak.

"The demand has just been unlike anything we’ve seen," said Rich Lampmann, a spokesman for Modell’s Sporting Goods, a chain based in New York City. Modell’s has sold roughly 10,000 Lin jerseys and t-shirts in the past week, and has over 160,000 more hitting shelves within the next few days.

"It’s really been sort of a catch-up game," Lampmann said. "We were literally pulling product off the presses to get it into the city."

Lin’s jersey has been the top seller for the NBA’s online store since his breakout game on Feb. 4, NBA spokeswoman Amanda Thorn said. She declined to provide exact sales figures, but said nine of the top ten sellers in the store this week are Knicks jerseys, and that Lin merchandise has been shipped to 23 different countries.

A Lin replica jersey retails sells on NBAStore.com for $59.99. Some possible counterfeits, meanwhile, seem to have already made it online — Lin jerseys were available on eBay (, Fortune 500) Friday for $29.99.

Given the Harvard grad’s recent emergence, many retailers are still scrambling to catch up with the demand for Lin apparel. Monty Marks, a senior buyer at the New England-based Olympia Sports, said Thursday that the chain was just receiving its first shipments of Lin gear after a number of inquiries from customers.

"We do expect it to be pretty good," Marks said. "The build-up has been crazy."

Matt Powell, an analyst with sporting goods industry tracker SportsOneSource, said there was still "very little product" associated with Lin in most stores nationwide.

"It’s just barely getting started," he said.

Given Lin’s Taiwanese heritage, his marketing potential in the Far East is tantalizing as well. The NBA said this week that Lin had become the number-one search on Baidu, China’s Google equivalent.

For now, Lin has a Nike (, Fortune 500) endorsement deal that he signed when he turned pro back in 2010. Brian Strong, a spokesman for Nike, noted that Lin had done a two-city promotional tour for the brand in Taiwan last summer, but was tight-lipped about future marketing plans.

"He seems to be inspiring people through his play, and we’ll continue to look at ways to celebrate that," Strong said. 

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Reliance Bancshares cut its losses in the fourth quarter by 51 percent as nonperforming loans and provisions for loan losses both declined.

Reliance Bancshares’ reported a loss of $16.4 million in the fourth quarter that ended Dec. 31, compared with a loss of $33.7 million a year ago.

The bank was able to reduce its troubled assets and cut overhead expenses as it seeks to return to profitability, said president and CEO Allan Ivie in a statement. For all of 2011, Reliance Bancshares lost $34 million, compared with $48.5 million in 2010.

Frontenac-based Reliance Bancshares is the holding company for Reliance Bank, which has 20 local branches.

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United Parcel Service, the world’s largest package delivery company, said Friday it is still in talks to acquire TNT Express even after the Dutch package delivery company rejected a $6.43 billion bid.

UPS said there is no guarantee that they will reach middle ground and make a deal. If UPS were to successfully buy TNT, it would significantly expand its business in Europe. The deal would be UPS’ biggest ever.

The bid works out to euro9, or about $11.84, per share. That’s based on TNT’s 534.2 million outstanding shares. TNT’s American depositary shares soared 56 percent to $12.57. UPS shares closed unchanged at $76.76.

TNT, Europe’s second-largest express delivery company, said Friday that its supervisory and executive boards carefully considered the proposal from UPS Inc., which is based in Atlanta. Both companies confirmed they are still talking about other possible outcomes.

UPS has made a couple of smaller acquisitions to bolster its operations in Europe over the last several months. In December, it said it will buy Pieffe Group, an Italian company that specializes in shipping and storing pharmaceutical products. Last week it announced the purchase of a small Belgian e-commerce company, Kiala.

TNT, which is based in Amsterdam, has been seen as a takeover target of either UPS or smaller rival FedEx Corp. for some time. Deutsche Bank analyst Justin Yagerman said in a note to clients Friday that he doesn’t expect FedEx will go after TNT, preferring instead to continue its plan of acquiring smaller companies in Europe. A FedEx spokesman said the company doesn’t comment on corporate development matters.

Last month, TNT detailed plans to split its express and mail businesses and said its CEO will step down after that separation is complete. That’s expected sometime next year.

The company’s express operations are growing, but its mail business is struggling with lower volume and disputes over layoffs. In November, it reported third-quarter net profit fell by more than half to 5 million euros, reflecting weak margins in its European businesses and losses at its operations in high-growth emerging markets.

Shareholders are set to vote on the separation in May.

TNT was split from Dutch mail company PostNL NV in May of last year.

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In a story Jan. 4 about The Boeing Co.’s announcement that it is closing its plant in Wichita, Kan., The Associated Press reported erroneously that the closure will cost 2,160 workers their jobs. An unspecified number of those workers will be allowed to transfer to the company’s plants in other states cheap pay day loans.

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The lone holdout juror who prevented a Utah company from getting as much as $1.2 billion from one-time rival Microsoft Corp. for alleged antitrust violations says he’s at peace with his decision.

Corbyn Alvey, a 21-year-old security guard from Magna, told KSL-TV ( http://bit.ly/ubPwcB) that he didn’t think there was enough evidence presented during the two-month trial in U.S. District Court in Salt Lake City to support the claims of Provo-based Novell Inc.

Novell sued Microsoft in 2004, claiming the software giant duped it into developing the once-popular WordPerfect writing program for Windows 95 only to pull the plug so Microsoft could gain market share with its own product. Novell says it was later forced to sell WordPerfect for a $1.2 billion loss.

“I walk away feeling honestly myself, and I can’t speak for the other jurors, that I made the right decision even if it resulted in a hung jury,” Alvey said Saturday. “There were so many inferences that needed to be drawn that I felt that it was unfair to Microsoft to go out on a limb and say, `yes.’”

Alvey described the three days of jury deliberations as stressful. The 11 other jurors sided with Novell.

“Obviously, I wanted to convince them to agree with me and they wanted to convince me to agree with them,” he told KSL.

Bill Gates testified last month that he had no idea his decision to drop a tool for outside developers would sidetrack Novell payday loan lenders. Gates said he was acting to protect Windows 95 and future versions from crashing.

Novell argued that Gates ordered Microsoft engineers to reject WordPerfect as a Windows 95 word processing application because he feared it was too good.

Alvey said the jury agreed on the technical aspects of the case but disagreed on what Novell could have accomplished “but for” Gates’ decision.

“There was a lot of speculation in this `but for’ world,” he said.

As for Gates’ testimony, Alvey said, “The man was a little sarcastic at times. If anything, it provided a little break from the monotonous questions and answers … I think from his testimony, what I heard, and what I saw in the emails, Bill Gates was a man who took every threat extremely seriously.”

Jury foreman Carl Banks said he tried hard to get a verdict.

“It was a tough case. It was long and it was hard and it was grueling,” he said. “We gave it our best shot.”

Novell attorneys have said they would seek to retry the case with a new jury. Microsoft said it would file a motion asking the judge to dismiss Novell’s complaint for good and avoid a second trial.

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A Yemeni military official says al-Qaida-linked militants have attacked a military barracks in an embattled southern town, leaving two soldiers and 11 militants dead.

The official said Saturday that another 36 soldiers were injured in the base in Zinjibar, the capital of Abyan province.

He says that the fighting began Friday night and continued into the morning. He spoke on condition of anonymity because he was not authorized to speak to the media payday loans.

Militants and the army have fought for control of Zinjibar since May. A 10-month-old uprising against authoritarian President Ali Abdullah Saleh has caused a breakdown of authority throughout the country.

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Just as the U.S. economy is making progress despite Europe’s turmoil, here come two new threats.

Deep spending cuts are set to kick in if a congressional panel can’t agree by Thanksgiving on how to shrink the budget deficit. And Congress may let emergency unemployment aid and a Social Security tax cut expire at year’s end. Either outcome could slow growth and spook markets.

Analysts are concerned. Yet most aren’t panicking.

Many say the economy and markets can withstand the blows. That’s because Congress or the Federal Reserve could take other steps next year to blunt the automatic cuts and lift the economy. And investors expect so little from the congressional panel that they’re unlikely to overreact if no deal is reached.

“There’s no doomsday scenario in reducing government spending,” said David Kelly of JP Morgan Funds.

The 12-member bipartisan panel, or supercommittee, was created in August to defuse a political standoff over raising the federal borrowing limit. It’s supposed to find at least $1.2 trillion in deficit cuts by Nov. 23. If it fails, federal spending would automatically be cut by that amount over nine years, starting in 2013.

The law triggers cuts in programs prized by both parties: social services such as Medicare for Democrats, defense spending for Republicans.

The panel appears to be deadlocked.

Economists say a stalemate makes it harder for Congress to extend the Social Security tax cut and unemployment benefits. On the other hand, if the supercommittee does forge a deal, it might include an extension of those benefits. Or it could at least clear the way for an extension later.

The Social Security tax cut gave most Americans an extra $1,000 to $2,000 this year. Unemployment benefits provide about $300 a week. Most of that money quickly and directly boosts consumer spending, which drives the economy.

By contrast, an expiration of those benefits could cut growth by about three-quarters of a percentage point, economists say. Throw in other cuts, like those passed in the August debt deal, and all told, federal budget policies could subtract 1.7 percentage points from growth in 2012, according to JPMorgan Chase and Moody’s Analytics.

Given the tepid economy, such a hit could be damaging.

“It would be very difficult for an economy that’s doing well to digest, let alone one that’s barely growing at potential,” said Ryan Sweet, an economist at Moody’s. “That could unwind a lot of the improvement we’ve seen so far.”

The economy grew at an annual rate of 2.5 percent in the July-September quarter. Some analysts fear it could fall below 2 percent next year, especially if the emergency unemployment benefits and Social Security tax cuts aren’t renewed.

The U.S. economy faces other threats, too _ from persistently high unemployment to Europe’s spreading debt crisis, which could hasten a recession.

If the automatic spending cuts take effect, the defense budget could be cut by nearly $500 billion over nine years. Some contractors are nervous.

Wes Bush, CEO of Northrop Grumman, has told analysts that the company is bracing for spending cuts.

“It’s certainly going to be a more challenging environment” next year, he said.

Another wild card: Some investors fear that the supercommittee’s failure would spark fresh downgrades of U.S. debt. Standard & Poor’s downgraded the government’s long-term debt in August. That contributed to a stock market plunge. It’s possible that a deadlocked supercommittee would lead the two other major rating agencies _ Fitch and Moody’s _ to follow suit.

Yet S&P’s downgrade did little to tarnish U.S. debt. Treasury prices rose, and yields fell. Bond investors still saw Treasurys as a super-safe investment. Federal borrowing costs actually declined.

“S&P showed that when a rating agency downgrades the best-known security in the world, it has little impact,” Kelly said. The market for U.S. Treasurys is so broad, accessible and transparent that ratings downgrades don’t pose much threat, he noted.

Kelly said Wall Street is unlikely to panic given that expectations for the supercommittee “are so low as to be subterranean.”

Even so, some traders appear to be positioning for a shock. So-called “defensive” sectors of the stock market, like healthcare companies and utilities, which tend to retain their value in a weak economy, have been outpacing the S&P 500 index as a whole.

In the past month, the economy has shown surprising strength. Reports this week showed that manufacturers are producing more goods and consumers are spending more. The number of people seeking unemployment benefits for the first time is at a seven-month low.

Still, more than once since the recession officially ended more than two years ago, the economy has displayed vigor only to stumble again. High gas and food prices and Japan’s earthquake sharply slowed growth in the first half of the year. Congress’ debt-ceiling fight sent consumer confidence to recession levels.

Sweet thinks there’s a good chance Congress will end up extending the Social Security tax cut. Partly on that assumption, Moody’s foresees 2.6 percent growth next year. For this year, analysts generally estimate less than 2 percent growth.

Lawmakers could make other policy changes next year to energize the economy. The tax cuts enacted during the Bush administration, and extended in 2010, are set to expire after 2012. Republicans will push to renew them.

Some of the automatic cuts set to kick in in 2013 could be delayed or altered. That’s particularly true if the White House or either chamber of Congress changes sides in 2012.

And some economists say the automatic spending cuts could actually boost confidence a bit: They would reassure the world that the U.S. government can make progress in shrinking its deficit.

Even so, the supercommittee seems likely to fall short of its goal to help reduce the federal debt load.

And there’s more pressure to come.

Priya Misra, an analyst at Bank of America Merrill Lynch, estimates that Congress will need to find $2 trillion more in cuts by August 2013 to prevent another credit downgrade.

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