Finance topics

European stock markets and the euro gave up some earlier gains Wednesday after the European Central Bank revealed that it lent slightly more than anticipated in its super-cheap three-year loan offering to banks.

The ECB said it made euro529.5 billion ($712.4 billion) in low-interest loans to banks in the second round of its long-term credit infusion, which has been widely credited with easing the eurozone debt crisis.

The uptake of the long-term refinancing operation, or LTRO, was modestly higher than the euro489 billion ($657.9 billion) handed out to 523 banks at a first offering on Dec. 21, and was slightly higher than market expectations. The offer of credit for three years was taken up by 800 banks, again more than anticipated.

After the details of the offering, the euro and stocks dropped slightly as investors worried that the higher take-up may be a sign of continued stress in Europe’s banking system.

“While this will ease the crisis in the short term, an LTRO of this size is disturbing in what it reveals about the depth of banking problems in the EU,” said Sony Kapoor, managing director of economic think-tank Re-Define.

The euro was trading 0.2 percent lower at $1.3440, having traded flat before the results were announced.

In stock markets, Europe’s main indexes fell too but remained up on the day. Germany’s DAX was up 0.5 percent at 6,294 while the CAC-40 in France was 0.4 percent higher at 3,468. The FTSE 100 index of leading British shares was 0.1 percent higher at 5,933.

Most of the world’s leading indexes are back at levels they were trading at before last summer’s massive sell-off. Stronger-than-anticipated U.S. consumer confidence figures on Tuesday also helped push the Dow to close at 13,005.12 on Tuesday. The last time the benchmark closed above 13,000 was in May 2008, four months before the fall of the Lehman Brothers investment bank and the worst of the financial crisis.

The ECB’s first round of three-year loans last December is often cited as one of the reasons why markets been so buoyant this year as they eased concerns of an imminent credit crunch in Europe.

Banks used some of the money from the first round of loans to buy government bonds. That lowered borrowing costs for hard-pressed governments struggling to maintain large amounts of debt, and eased fears of a market meltdown from Europe’s troubles with too much government debt.

“The ECB will certainly be hoping that the even stronger take up of its second unlimited three-year refinancing operation will help to ease credit conditions significantly,” said Howard Archer, chief European economist at IHS Global Insight.

Wall Street was poised to open slightly higher later _ both Dow futures and the broader S&P 500 futures were 0.1 percent higher.

Earlier in Asia, Japan’s Nikkei 225 index edged up slightly to close at 9,723.24 after the government released a report that showed factory production rising for a second straight month in January.

Hong Kong’s Hang Seng gained 0.5 percent to 21,680.08 and South Korea’s Kospi gained 1.3 percent to 2,030.25.

But on mainland China, the benchmark Shanghai Composite Index lost 1 percent to 2,428.49 while the Shenzhen Composite Index fell 1.3 percent to 956.99.

Mainland Chinese shares fell after Shanghai announced that _ contrary to recent reports _ it would not ease restrictions on

Investors are also anticipating the Federal Reserve’s so-called Beige Book report on economic activity, due later Wednesday. The report is expected to reflect a slowly improving U.S. economy.

Oil prices ticked higher alongside equities _ benchmark oil for April delivery was up 49 cents at $107.40 a barrel in electronic trading on the New York Mercantile Exchange.

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Germany was left to dig deeper to combat the euro-area debt crisis after the Group of 20 nations told Europe to come up with more financial firepower before they consider lending outside support.

The decision by G-20 officials to rebuff European calls for assistance in their crisis-fighting effort pending an increase in its own financial backstop puts the onus on Germany, already the biggest national contributor to bailouts, to overcome its resistance to doing more.

With a parliamentary vote on a second Greek aid package looming in Berlin today, Chancellor Angela Merkel

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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Tensions with Iran are adding at least 30 cents to a gallon of gasoline in the United States, and experts say gas prices have only just begun to rise.

Gasoline prices have surged over 10% in the last two months, largely tracking the runup in oil prices, which have increased by a similar amount and are now at a 9-month high.

Several factors have caused oil prices to rise, including the sense that the economy is improving and supply disruptions in a handful of minor oil producing nations.

But the biggest factor by far, say analysts, is fear that tensions with Iran will lead to an all-out war that causes a disruption in oil supplies.

"The market right now is fairly well supplied," said John Kingston, director of oil, at the analytics firm Platts. "You’ve just got a significant fear factor that things could get worse."

Kingston noted that OPEC is actually producing more oil right now than is needed to keep pace with global demand. As such, stockpiles are rising.

Gas spending and prices by state

And thanks to the recession and better fuel efficiency, gasoline demand in the United States, the world’s largest consumer, is actually the lowest it’s been in a decade, according to the Energy Information Administration.

Yet gas and oil prices continue to climb.

The fear is that Iran’s 2.2 million barrels a day in exports could be cut off. Iranian oil is already being sanctioned, but so far most is still finding its way to market, just at lower prices.

Worse, there’s fear the 17 million barrels a day that flow through the Strait of Hormuz, one fifth of the world’s total production, could be disrupted by an Israeli attack.

That’s a big reason why gasoline prices in the United States averaged $3.37 in January, the highest for any January ever, according to AAA.

"It’s a market that’s caught fire," said Ben Brockwell, an analyst at the Oil Price Information Service, which collects data for AAA. "And it doesn’t look like there’s any circuit breakers to stop it."

Indeed, Brockwell noted that while retail prices are up 36 cents a gallon in the last two months, futures prices have risen even higher — 82 cents over the same time period.

Unless the situation with Iran cools off and future prices decline, consumers will likely see that 35-cent-a-gallon difference in the form of a similarly paired price hike at the pump in a matter of weeks.

Iran’s ‘distressed’ oil to keep flowing - at deep discount

"I definitely think the market is psyching itself up for a new record," he said, referring to the previous average high price for gasoline, which was $4.11 a gallon set in the summer of 2008. "Probably before memorial day."

That possibility has got a lot of people freaked out. Everyone from the Obama administrations to the American Petroleum Institute has been trying to talk down prices in the last few days.

Many economists say gasoline prices sustained above $4 a gallon could stunt the growth of the fragile worldwide economy — a fact which diplomats shuttling to Israel must be well aware.

It’s thought the Israelis are considering an attack on Iran as a means to disrupt its nuclear program, which Iran says is for peaceful purposes but many suspect is intended to produce a bomb.

But if Israel can’t be persuaded to hold off an attack, $4 gas will look cheap.

"If Israel does hit Iran, all bets are off," said Mike Fitzpatrick, editor-in-chief of Kilduff Report’s Energy Overview. "$150 [oil] is the first marker we’ll hit."

Oil at $150 a barrel could translate into over $5 a gallon at the pump. 

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The European Central Bank

Scientists for the Food and Drug Administration say that an Amgen drug slowed the spread of cancer to the bone in men with hard-to-treat prostate cancer, though the drug did not extend life and carried significant side effects.

The Food and Drug Administration will ask a panel of outside experts on Wednesday whether the benefits of Amgen’s Xgeva outweigh its risks, which included bone disease in about 5 percent of patients taking the drug. The agency posted its review of the drug online Monday morning ahead of the meeting.

Xgeva is already approved for preventing fractures in cancerous bones, and for osteoporosis, in a different formulation called Prolia.

Now Amgen has asked the FDA to approve the injectable drug as a preventive measure for men with recurring prostate cancer that is at high risk of spreading to the bone. Men must have also attempted and failed treatment with hormone therapy.

A 1,432-patient study conducted by Amgen showed the drug slowed the spread of cancer to the bone by about 4.2 months when compared to patients who received placebo. While that delay was statistically significant, the FDA’s reviewers questioned whether it is “an adequate measure of clinical benefit” for patients with prostate cancer.

FDA’s review notes that the drug did not increase overall survival, with patients in the drug and placebo groups living about the same amount of time.

Additionally, five percent of patients taking Xgeva experienced the side effect of osteonecrosis of the jaw, in which the bone dies because of poor blood supply.

While the FDA staff does not openly recommend against the new use for the drug, they do quote from an editorial in the Lancet which said the company’s findings on Xgeva “`do not support its broad use as a preventive agent for bone metastases in prostate cancer.’”

ISI analyst Mark Schoenebaum said the FDA’s negative review was consistent with analyst expectations.

“As was generally expected by us and much of the Street, the FDA is critical of the data, questioning the clinical meaningfulness of the primary endpoint,” Schoenebaum wrote in an email.

Amgen shares slipped 78 cents, or 1.1 percent, to $68.50 per share.

Doctors use a variety of treatments and interventions to treat prostate cancer, depending on the speed of the cancer’s growth and the patient’s age, among other factors. Patients with fast-growing prostate tumors often receive hormone therapy to stop production of testosterone, which fuels cancer growth.

All of the men in Amgen’s study had tumors that did not respond well to hormone therapy, but had not yet spread beyond the prostate. While there are multiple drugs for both early and late-stage prostate cancer, Amgen argues “there is a gap in the treatment plan for those patients” enrolled in its study.

Xgeva and Prolia, the osteoporosis formulation, had combined sales of $554 million in 2011, their first full year on the market. Amgen is based in Thousand Oaks, Calif.

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Singapore

Vancouver displaced Sydney as the least-affordable housing market after Hong Kong among large English-speaking cities, as home prices rose faster than incomes, a study of 325 metropolitan areas worldwide showed.

Vancouver

Manufacturing in the New York region expanded in January at the fastest pace in nine months, reflecting improving orders, sales and employment.

The Federal Reserve Bank of New York

Debt-crippled Greece’s budget deficit is expected to hit 9.6 percent of economic output in 2011, about half a percentage point above target, the development minister said Wednesday.

Michalis Chryssochoidis said that an increase in the use of European Union structural development funds had contributed to lowering government overspending from 10.6 percent of gross domestic product in 2010.

“The good news is that absorption of European Union funds has exceeded all expectations,” Chryssochoidis said at an economic forum where the government hopes to attract investment from the United Arab Emirates.

But Greece, which is relying on billions in rescue loans from its European partners and the International Monetary Fund to keep afloat, had pledged to cut the 2011 deficit to 9 percent of GDP.

Greece ran up high budget deficits for years, building a suffocating debt load set to exceed 160 percent of GDP in 2011. In exchange for a vital euro110 billion ($140 billion) international bailout in May 2010, the country implemented a harsh austerity program, slashing pensions and salaries while repeatedly hiking taxes and raising retirement ages.

The country’s interim coalition government is rushing to pass a new batch of reforms and cutbacks, to secure a second, euro130 billion bailout package approved in October but not yet finalized instant personal loans guaranteed.

Fitch Ratings warned on Wednesday that Greece’s financial troubles could still worsen the eurozone crisis if it can’t work out a debt reduction deal with creditors, part of the second bailout package.

Fitch’s head of sovereign ratings David Riley said Greece “still has lots of potential to plunge Europe into crisis” and that “time is running out.”

Greece is in talks with private investors about a voluntary 50 percent reduction in their Greek bond holdings.

It needs to agree the deal before it can get another installment in its rescue loans, which it will need to repay euro14 billion in bonds that come due in March.

Riley said one complicating factor in the private creditors’ deal was the European Central Bank’s refusal to write down its estimated euro45 billion in Greek bonds. That means private bondholders have to be asked to take on more losses to reach a given reduction in Greece’s debt load.

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