Nearly a year after the federal rescue of the nation&S217;s biggest banks, taxpayers have begun seeing profits from the hundreds of billions of dollars in aid that many critics thought might never be seen again.

The profits, collected from eight of the biggest banks that have fully repaid their obligations to the government, come to about $4 billion, or the equivalent of about 15 percent annually, according to calculations compiled for The New York Times.

These early returns are by no means a full accounting of the huge financial rescue undertaken by the federal government last year to stabilize teetering banks and other companies.

The government still faces potentially huge long-term losses from its bailouts of the insurance giant American International Group, the mortgage finance companies Fannie Mae and Freddie Mac, and the automakers General Motors and Chrysler. The Treasury Department could also take a hit from its guarantees on billions of dollars of toxic mortgages.

But the mere hint of bailout profits for the nearly year-old Troubled Asset Relief Program has been received as a welcome surprise. It has also spurred hopes that the government could soon get out of the banking business.

&S220;The taxpayers want their money back and they want the government out of our banking system,&S221; Representative Jeb Hensarling, a Texas Republican and a member of the Congressional Oversight Panel examining the relief program, said in an interview.

Profits were hardly high on the list of government priorities last October, when a financial panic was in full swing and the Treasury Department started spending roughly $240 billion to buy preferred shares from hundreds of banks that were facing huge potential losses from troubled mortgages. Bank stocks began teetering after Lehman Brothers collapsed and the government rescued A.I.G., and fear gripped the financial industry around the world.

American taxpayers were told they would eventually make a modest return from these investments, including a 5 percent quarterly dividend on the banks&S217; preferred shares and warrants to buy stock in the banks at a set price over 10 years.

But critics at the time warned that taxpayers might not see any profits, and that it could take years for the banks to repay the loans.

As Congress debated the bailout bill last September that would authorize the Treasury Department to spend up to $700 billion to stem the financial crisis, Representative Mac Thornberry, Republican of Texas, said: &S220;Seven hundred billion dollars of taxpayer money should not be used as a hopeful experiment.&S221;

So far, that experiment is more than paying off. The government has taken profits of about $1.4 billion on its investment in Goldman Sachs, $1.3 billion on Morgan Stanley and $414 million on American Express. The five other banks that repaid the government &<51; Northern Trust, Bank of New York Mellon, State Street, U.S. Bancorp and BB&&8;T &<51; each brought in $100 million to $334 million in profit.

The figure does not include the roughly $35 million the government has earned from 14 smaller banks that have paid back their loans. The government bought shares in these and many other financial companies last fall, when sinking confidence among investors pushed down many bank stocks to just a few dollars a share. As the banks strengthened and became profitable, the government authorized them to pay back the preferred stock, which had been paying quarterly dividends since October.

But the real profit came as banks were permitted to buy back the so-called warrants, whose low fixed price provided a windfall for the government as the shares of the companies soared car loan interest rates.

Despite the early proceeds from the bailout program, a debate remains over whether the government could have done even better with its bank investments.

If private investors had taken a stake in the banks last October on par with the government&S217;s, they would have had profits three times as large &<51; about $12 billion, or 44 percent if tallied on an annual basis, according to Linus Wilson, a finance professor at the University of Louisiana at Lafayette, who analyzed the data for The Times.

Why the discrepancy? Finance experts say the government overpaid for the bank assets it bought, because its chief priority was to stabilize the teetering financial system, not to maximize profit.

&S220;Had these banks tried to raise money any other way, they probably would have had to pay quite a bit more than the government received,&S221; said Espen Robak, head of Pluris Valuation Advisors, which analyzes the value of large financial institutions.

A Congressional oversight panel concluded in February that the Treasury paid an average of 34 percent more than the estimated fair value of the assets it received.

Of course, many finance experts suggest that the comparison is academic at best, because there is no way to know what might have become of the banks or the financial system as a whole had the government not acted.

&S220;Taxpayers should heave a sigh of relief that the investment in the banks protected them from even more catastrophic losses from more bank failures,&S221; said Aswath Damodaran, a finance professor at the Stern School of Business at New York University.

A more direct comparison of profits can be made with the investment performance of other governments that poured money into ailing banks last fall.

The Swiss government, for example, said last week that it had pulled in a handsome profit for taxpayers on a $5.6 billion bailout it gave to UBS, the troubled Swiss bank, at the height of the financial crisis in October. The government netted $1 billion on its investment, a gain equal to a 32 percent annual return.

&S220;They are substantially in the money,&S221; Guy de Blonay, a fund manager at Henderson New Star in London, said after the announcement.

American taxpayers could still collect additional profits on their investments in two other big banks that have repaid their preferred stock but not their warrants: JPMorgan Chase and Capital One. They are expected to yield over $3.1 billion in gains for the Treasury in the next month or so, although the full tally will depend on how much they will pay to buy back their warrants.

And the government is owed about $6.2 billion in interest payments from banks that have not yet repaid their federal money.

But all the profits taxpayers have won could still be wiped out by two deeply troubled institutions. Both Citigroup and Bank of America are still holding mortgages and other loans that were once worth billions of dollars but whose revised values are uncertain. If they prove &S220;toxic&S221; because they cannot attract buyers, they could leave large holes in the banks&S217; balance sheets.

Neither bank is ready to repay its bailout money anytime soon, even though the banks&S217; stock prices have surged in the last month, leaving the government sitting on paper profits of about $18 billion between them.

Eric Dash contributed reporting.

As Big Banks Repay Bailout Money, U.S. Sees a Profit

Kristen Nagy, an 18-year-old from Sparta, N.J., sends and receives 500 text messages a day. But she never uses Twitter, even though it publishes similar snippets of conversations and observations.

&S220;I just think it&S217;s weird and I don&S217;t feel like everyone needs to know what I&S217;m doing every second of my life,&S221; she said.

Her reluctance to use Twitter, a feeling shared by others in her age group, has not doomed the microblogging service. Just 11 percent of its users are aged 12 to 17, according to comScore. Instead, Twitter&S217;s unparalleled explosion in popularity has been driven by a decidedly older group. That success has shattered a widely held belief that young people lead the way to popularizing innovations.

&S220;The traditional early-adopter model would say that teenagers or college students are really important to adoption,&S221; said Andrew Lipsman, director of industry analysis at comScore. Teenagers, after all, drove the early growth of the social networks Facebook, MySpace and Friendster.

Twitter, however, has proved that &S220;a site can take off in a different demographic than you expect and become very popular,&S221; he said. &S220;Twitter is defying the traditional model.&S221;

In fact, though teenagers fueled the early growth of social networks, today they account for 14 percent of MySpace&S217;s users and only 9 percent of Facebook&S217;s. As the Web grows up, so do its users, and for many analysts, Twitter&S217;s success represents a new model for Internet success. The notion that children are essential to a new technology&S217;s success has proved to be largely a myth.

Adults have driven the growth of many perennially popular Web services. YouTube attracted young adults and then senior citizens before teenagers piled on. Blogger&S217;s early user base was adults and LinkedIn has built a successful social network with professionals as its target.

The same goes for gadgets. Though video games were originally marketed for children, Nintendo Wiis quickly found their way into nursing homes. Kindle from Amazon caught on first with adults and many gadgets, like iPhones and GPS devices, are largely adult-only.

Similarly, Twitter did not attract the young trendsetters at the outset. Its growth has instead come from adults who might not have used other social sites before Twitter, said Jeremiah Owyang, an industry analyst studying social media. &S220;Adults are just catching up to what teens have been doing for years,&S221; he said.

Many young people, who have used Facebook since they began using the Internet and for whom text messaging is their primary method of communication, say they simply do not have a need for Twitter.

Almost everyone under 35 uses social networks, but the growth of these networks over the last year has come from older adults, according to a report from Forrester Research issued Tuesday. Use of social networking by people aged 35 to 54 grew 60 percent in the last year.

Another reason that teenagers do not use Twitter may be that their lives tend to revolve around their friends. Though Twitter&S217;s founders originally conceived of the site as a way to stay in touch with acquaintances, it turns out that it is better for broadcasting ideas or questions and answers to the outside world or for marketing a product. It is also useful for marketing the person doing the tweeting, a need few teenagers are attuned to.

&S220;Many people use it for professional purposes &<51; keeping connected with industry contacts and following news,&S221; said Evan Williams, Twitter&S217;s co-founder and chief executive. &S220;Because it&S217;s a one-to-many network and most of the content is public, it works for this better than a social network that&S217;s optimized for friend communication.&S221;

Wendy Grazier, a mother in Arkansas, said her two teenaged daughters thought Twitter was &S220;lame,&S221; yet they asked her to follow teenage pop stars like Miley Cyrus and Taylor Swift on Twitter so she could report back on what the celebrities wrote. Why won&S217;t they deign to do it themselves? &S220;It seems more, like, professional, and not something that a teenager would do,&S221; said 16-year-old Miranda Grazier. &S220;I think I might join when I&S217;m older.&S221;

The public nature of Twitter is particularly sensitive for the under-18 set, whether because they want to hide what they are doing from their parents or, more often, because their parents restrict their interaction with strangers on the Web.

Georgia Marentis, a 14-year-old in Great Falls, Va., uses Facebook instead of Twitter because she can choose who sees her updates. &S220;My parents wouldn&S217;t want me to have everything going on in my life displayed for the entire world,&S221; she said. (Of course, because of the public nature of social networks and the ease of creating a fake identity on the Web, even sites with more privacy settings have proved dangerous for young people in some cases.)

Many young people use the Web not to keep up with the issues of the day but to form and express their identities, said Andrea Forte, who studied how high school students use social media for her dissertation. (She will be an assistant professor at Drexel University in the spring.)

&S220;Your identity on Twitter is more your ability to take an interesting conversational turn, throw an interesting bit of conversation out there. Your identity isn&S217;t so much identified by the music you listen to and the quizzes you take,&S221; as it is on Facebook, she said. She called Twitter &S220;a comparatively adult kind of interaction.&S221;

For Twitter&S217;s future, young people&S217;s ambivalence could be a good thing. Teenagers may be more comfortable using new technologies, but they are also notoriously fickle. Although they drove the growth of Friendster and MySpace, they then moved on from those sites to Facebook.

Perhaps Twitter&S217;s experience will encourage Web start-ups to take a more realistic view of who uses the Web and go after a broader audience, Ms. Forte said. &S220;Older populations are a smart thing to be thinking about, as opposed to eternally going after the 15- through 19-year-olds,&S221; she said.

Who’s Driving Twitter’s Popularity? Not Teens

Hot News: Democratic fund-raiser charged in Citigroup fraud

NEW YORK (Reuters) – Stocks climbed on Tuesday, briefly hitting 2009 highs after strong housing and consumer confidence data, while Ben Bernanke&&9;s renomination as Fed chairman ended uncertainty about the central bank&&9;s leadership as the economy recovers.

Consumer confidence increased more than expected in August, the Conference Board said, while the S&P/Case-Shiller home price index rose in June for a second straight month.

A rebound in home prices and increased consumer spending are considered crucial in order for the U.S. economy to bounce back from its worst recession in decades.

Home builders&&9; shares ranked among the top performers, with Lennar Corp (LEN.N) up 5.4 percent at &&6;15.36 and KB Home (KBH.N) up 5.2 percent at &&6;18.41. The Dow Jones US Home Construction index (.DJUSHB) rose 4.5 percent.

"It suggests that there still more consumers and investors yet to turn or who are maybe increasingly turning positive and that is helping to boost the markets," said Jeff Kleintop, chief market strategist at LPL Financial in Boston.

The consumer confidence data helped drive retail stocks higher. Solid earnings from women&&9;s clothing retailer Chico&&9;s FAS Inc (CHS.N), up 7.8 percent at &&6;12.82, and close-out retailer Big-Lots Inc (BIG.N), up 7.8 percent at &&6;25.91, also bolstered that sector.

The S&P Retail Index (.RLX) gained 2 percent.

The Dow Jones industrial average (.DJI) gained 51.17 points, or 0.54 percent, to 9,560.45. The Standard & Poor&&9;s 500 Index (.SPX) rose 5.15 points, or 0.50 percent, to 1,030.72. The Nasdaq Composite Index (.IXIC) added 9.41 points, or 0.47 percent, to 2,027.39.

U.S. President Barack Obama&&9;s renomination of Ben Bernanke to a second term as Federal Reserve chairman reassured investors, providing continuity when the economy is showing signs of recovering from the recession.

"The alternatives were not good and the choice of Bernanke is very deserved," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

"To some, it was expected. But there is still a sense of relief that it actually happened."

In other economic news, official forecasts said the U.S. national debt will nearly double over the next 10 years. The market&&9;s reaction was muted.

The broad S&P 500 index briefly hit a 10-month intraday high, and remains on track for its sixth straight monthly gain.

(Editing by Jan Paschal)

Wall Street gains on housing, consumers and Bernanke

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HOUSTON, Aug. 24 (Xinhua) -- A U.S. federal appeals court ruled on Monday that indicted U.S. billionaire Allen Stanford must remain jailed until his fraud trial.

The 5th U.S. Circuit Court of Appeals in New Orleans on Monday upheld a lower-court ruling that revoked the Texan financier's bond on the grounds that he is a flight risk and should remain in custody until his trial, which could be a year away.

Stanford was initially granted bail by a magistrate judge, but U.S. District Judge David Hittner revoked the bond after prosecutors argued that the 59-year-old Texas financier is a serious flight risk.

Stanford's attorneys had argued that Stanford was not a flight risk, and appealed for his release on bail so he can assist in defending investment fraud charges that may lead to a life sentence for him.

Stanford and four executives of his now defunct Stanford Financial Group are accused of orchestrating a massive Ponzi scheme and swindling investors of as much as 7 billion U.S. dollars.

Stanford has been in federal custody since his arrest on June 18. He will return to court Thursday for a public hearing to determine who will represent him legally, according to local media reports. Texas billionaire Allen Stanford appears before federal Magistrate Judge M. Hannah Lauck in U.S. District Court in Richmond, Virginia in this June 19, 2009 courtroom sketch. Lauck ordered Stanford, a flamboyant 59-year-old financier, be transferred to Houston for a hearing on whether he should be granted bail on fraud and obstruction charges stemming from a $7 billion pyramid scheme to bilk investors. Stanford could face up to 250 years in prison if convicted on all of the charges brought by a grand jury in Texas.(Xinhua/Reuters Photo)
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U.S. financier Allen Stanford to be jailed until fraud trial

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BERLIN (Reuters) – Germany is ready for further talks with General Motors on the sale of European carmaker Opel and wants to avoid confrontation with the U.S. firm on the matter, a government spokesman said on Monday.

"It is important not to resort to confrontation," government spokesman Ulrich Wilhelm said at a regular government news conference, adding the government aimed to invite a member of the GM board to Germany to discuss Opel this week.

On Friday, GM failed to recommend either of two bidders for Opel -- Canadian supplier Magna (MGa.TO), Germany&&9;s preferred buyer, or rival bidder RHJ International (RJHI.BR).

(Reporting by Paul Carrel and Noah Barkin)

Germany to invite GM this week on Opel

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BERLIN &S212; The proposed U.S. legal settlement giving Google the right to sell digital copies of millions of books is dividing publishers and authors in Europe, which has struggled to develop viable alternatives to Google&S217;s ambitious book digitization project.

Some big European publishers, like Oxford University Press, and Bertelsmann and Holtzbrinck, which own Random House and Macmillan respectively, support the agreement, which remains subject to approval by a U.S. judge. They see the pact as greatly expanding the visibility of their archives for online purchase. But opposition to the deal, which would allow U.S. consumers to buy online access to millions of books by European authors whose works were scanned at U.S. libraries, is mounting.

There is widespread opposition among French publishers, and the government of Germany, along with national collection societies in Germany, Austria, Switzerland and Spain, plan to argue against it and encourage writers to pull out of the agreement.

The court has set a Sept. 4 deadline for submissions on the settlement and said it planned to make a final decision on Oct. 7. Given the support of major publishers, last-minute objections from Europe were unlikely to stop the settlement from going forward, a copyright specialist said.

&S220;I would imagine the court is going to say that because you have a significant amount of big players around the world who have opted into this, then it is worth proceeding with,&S221; said Akash Sachdeva, an intellectual property lawyer at the law firm Allen & Overy in London.

Google, which has been digitizing books since 2004, says the proposed U.S. settlement will benefit publishers, authors and consumers, making a vast reservoir of work available for easy access. Around the world, 25,000 publishers, libraries and individuals are working with Google to digitize their archives and catalogs, including Oxford University&S217;s prestigious Bodleian Library and the Bavarian State Library.

&S220;We believe that we are helping the industry tremendously by creating a way for authors and publishers to be found,&S221; said Santiago de la Mora, the head for printing partnerships in London for Google. &S220;Search is critical. If you are not found, the rest cannot follow.&S221;

Mr. de la Mora also said that authors could always remove their works from Google&S217;s U.S. scanning registry.

Even the French National Library, which was very public in its opposition to the project, said last week that it was talking to Google about a deal to help digitize its archives.

But Alain Kouck, the chief executive of Editis, the second-largest book publisher in France, after Hachette, and a subsidiary of the Spanish publishing group Planeta, said many French publishers objected to the U.S. settlement.

Google also faces a lawsuit in France, where it was sued in 2006 by La Martini&>32;re, a publisher, which contends that its book scanning project infringes on copyrights. The French Publishers Association has joined that suit, which is set to come to trial Sept. 24.

The European Commission is holding a staff-level meeting on the proposed U.S. settlement on Sept. 7 but has not gotten directly involved in the case. The commission has supported homegrown digitization projects, including the Europeana online book and cultural database.

In Britain, where many publishing houses have close ties to the United States, publishers have avoided open confrontation with Google.

Benjamin King, head of policy and research at the Publishers Association in Britain, said he was unaware of any members&S217; planning to file a formal complaint in the U.S. settlement. But British publishers have objections and are working with Google on issues like how to determine whether a book is out of print, which comes up when books are still widely available in Europe but no longer in the United States, Mr. King said.

Some are also concerned about a lack of European representation on the Book Rights Registry, a panel that is supposed to collect and distribute revenue from Google&S217;s U.S. book sales to authors and publishers.

In Germany, Austria, Switzerland and Spain, opposition to the U.S. settlement is more vocal. The German government plans to submit a friend-of-the-court brief in the U.S. case, said Katharina Jahntz, a spokeswoman for the German Justice Ministry. The brief will probably claim that such an arrangement would be illegal if it were proposed in Europe.

Copyright agencies in Germany, Austria, Switzerland and Spain, which represent publishers and authors and generate revenue by levying fees on their book sales, see Google&S217;s online sales platform as a direct threat that could eventually give a U.S. company a closer relationship with their members than they have.

Four agencies, VG Wort of Germany, Literar Mechana of Austria, Pro Litteris of Switzerland and Cedro of Spain, are asking members to remove their books from Google&S217;s online registry, should the U.S. settlement be approved. The agencies are asking members to give them permission to collectively represent them with Google.

So far, none of the agencies have released figures showing how many authors and publishers want to remove their works. But Sandra Csillag, the managing director of Literar Mechana, said the response to her group&S217;s mass mailing in Austria had been very positive.

&S220;The acceptance rate of what we are doing appears to be very high among our members, which is frankly what we expected,&S221; she said.

In Germany, about 2,700 people, including the authors G&>52;nter Grass and Daniel Kehlmann, have signed a petition asking the government to try to stop the U.S. agreement. The petition was started in March by Roland Reuss, the author of a seven-volume analysis of Franz Kafka, the Czech writer. Google scanned the Reuss series, which is on file at the New York Public Library, into its U.S. books database.

A representative of S.Fischer Verlag, an academic publisher owned by Holtzbrinck, which supports the U.S. agreement, signed Reuss&S217;s petition. Roughly a third of the names on Reuss&S217;s list are from executives at small and midsize academic publishers who fear being unable to negotiate their works into Google&S217;s registry on their own terms.

A senior executive at one of the largest German publishing houses, whose company is participating in the U.S. agreement, said the decision to support the pact with Google was strategic.

&S220;We weren&S217;t going to be able to stop Google in the U.S.,&S221; said the executive, who did not want to be identified because of the sensitivity of the subject. &S220;We could have legally challenged this, but that would have cost lots of money and probably not brought anything. Then, two, three years down the road, we would have gotten a worse deal from Google.&S221;

Even if it goes forward, the deal has fueled talk of possible alternatives in Europe. Mr. Kouck, at Editis, said he was talking to other publishers about developing a unified French digital sales platform. &S220;It will be difficult, because we are all competitors, but publishers need to seize this opportunity,&S221; he said.

Europe Divided on Google Book Deal

Hot News: GM decision on Opel buyer urgently needed: Merkel

President Barack Obama has spoken with his Brazilian counterpart, Luiz Inacio Lula da Silva, about "issues of mutual interest and concern in the Americas."  Brazil's leader expressed concern about a plan to give the U.S. military greater access to seven bases in Colombia.In a statement, the White House said the two leaders spoke Friday morning.Pres. Barack Obama (front R) shares a word with Brazil's Pres. Luiz Inacio Lula Da Silva at the G8 summit, L'Aquila, Italy, 09 Jul 2009It said President Obama reaffirmed his commitment to long-standing U.S. relationships in the region, and his desire to work with Brazil and others in the hemisphere to help advance democracy, security and prosperity for the people of the Americas.  The United States recently reached a provisional agreement with Colombia, giving U.S. forces access to Colombian bases to tackle regional drug-trafficking and terrorism.  South American nations such as Bolivia, Ecuador and Venezuela have criticized the plan, with Venezuelan President Hugo Chavez saying the U.S. forces could threaten his country.The statement said Mr. Obama looks forward to seeing President da Silva next month at the Pittsburgh G-20 Summit, and continuing to strengthen the U.S. partnership with Brazil.

Some information for this report was provided by AP.

US, Brazilian Presidents Discuss Issues of Concern in Americas

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DETROIT &<51; James E. Press, the last holdover among top executives from Chrysler&S217;s prebankruptcy days, is expected to leave within three months, according to a person with knowledge of his plans.

Mr. Press spent 37 years rising through the ranks at Toyota to become its highest-ranking American executive before Chrysler lured him away in 2007 to help oversee marketing. He was initially one of two vice chairmen and presidents, sharing the job with Thomas W. LaSorda, who retired in the spring.

Mr. Press&S217;s departure comes as little surprise in Detroit, unlike his decision to leave Toyota, a company that has since become the world&S217;s largest automaker.

After Chrysler&S217;s bankruptcy, its new chief executive, Sergio Marchionne, who holds the same role at its Italian partner, Fiat, said he would retain Mr. Press as a special adviser to &S220;assist the new company in transition,&S221; prompting speculation that Mr. Press might retire soon.

His two-year tenure at Chrysler has been one of its toughest periods in history. Some specialists say they believe the company may still fail even after receiving billions of dollars from the federal government to avoid liquidation.

Chrysler executives declined to comment Friday on Mr. Press&S217;s future with the company.

During Chrysler&S217;s 42-day stint in bankruptcy this spring, Mr. Press, 62, oversaw the closure of 789 dealers, a quarter of its network. Rejected dealers and some lawmakers in Washington vilified Mr. Press and other Chrysler executives, but he steadfastly defended the action as necessary though painful, at one point testifying that it was &S220;the most difficult business action I have personally ever had to take.&S221; (He previously had described his resignation from Toyota as &S220;the most difficult decision I have made.&S221;)

Carl Galeana, who owns Chrysler dealerships in Florida, Michigan and South Carolina, said that while Mr. Press never lived up to the expectations that came with his celebrated arrival from Toyota, it was through no fault of his own.

&S220;He came in at a time when there wasn&S217;t a lot of upside,&S221; Mr. Galeana said. &S220;All of a sudden everything came crashing down, and from that point on it was all survival mode.&S221;

Another Top-Level Departure at Chrysler

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NEW YORK (Reuters) – Stock index futures rose on Friday as investors looked to a speech from Federal Reserve Chairman Ben Bernanke and new data on the sale of existing homes for a fresh insight into the economy.

Bernanke is scheduled to speak to a gathering in Jackson Hole, Wyoming, on the lessons learned from the financial crisis and efforts to aid the economic recovery.

U.S. sales of existing homes likely rose to their highest level in 10 months in July, according to a Reuters poll, as buyers rushed to take advantage of a tax credit for first-time homeowners.

Both Bernanke&&9;s speech and the housing data are due at 10 a.m.

S&P 500 futures rose 5.00 points, and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 33 points, and Nasdaq 100 futures were up 5.25 points.

The picture in overseas equity markets, which had disturbed U.S. investors this week, lent support on Friday as the Shanghai Composite Index (.SSEC) gained 1.7 percent, and European stocks (.FTEU3) rose 1.2 percent in morning trade.

But Japan&&9;s Nikkei (.225) fell due to the strong yen and weakness in automakers on news that the United States will end its car rebate program soon. (.T).

The popular U.S. government "cash-for-clunkers" program, offering rebates of up to &&6;4,500 to car buyers trading in older, fuel-thirsty vehicles, will end on Monday, the Transportation Department said late on Thursday.

In earnings news, Gap Inc (GPS.N) posted a slightly stronger than expected quarterly profit late on Thursday as more full-priced sales, inventory controls and cost cuts helped offset declining revenue at all the clothing retailer chains.

In a potential lucrative joint truck venture, Caterpillar Inc (CAT.N) and Navistar International Corp (NAV.N) are in talks with China&&9;s Anhui Jianghuai Automobile Co (600418.SS) to gain a foothold in the country&&9;s &&6;22 billion heavy truck market, a source familiar with the matter said on Friday.

U.S. shares gained ground for a third session in a row on Thursday with financial stocks pacing the gains after U.S. manufacturing data and a rebound in recently-hammered Chinese stocks reassured investors.

(Reporting by Edward Krudy; Editing by Theodore d&&9;Afflisio)

Futures rise ahead of Bernanke, housing data

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The Justice Department indicted a Swiss private banking executive and a Swiss lawyer on Thursday, accusing them of selling tax evasion services to wealthy clients. The move opens a new front in Washington&S217;s challenge to Switzerland&S217;s tradition of bank secrecy.

The indictment, filed in United States District Court in Fort Lauderdale, Fla., charged Hansruedi Schumacher, a director at NZB Neue Z&>52;rcher Bank of Zurich, and Matthias Rickenbach, a Swiss lawyer, with one count each of conspiring to defraud the United states.

It came a day after the giant Swiss bank UBS said that it had agreed to disclose 4,450 American client names and account details, and it indicates that the American authorities are starting to pursue smaller players that may have helped Americans hide their money.

Mr. Schumacher is a former top private banker for UBS who left around 2002 to establish and oversee NZB&S217;s private banking operations. He worked at NZB until at least last month, the charges said. Mr. Rickenbach is a partner of the Rickenbach &&8; Partner law firm, with offices in Zurich and Geneva.

A Justice Department statement said that the two men &S220;helped their clients obtain offshore credit cards and created sham loan documents.&S221; It added that they &S220;falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients&S217; repatriation of offshore funds as inheritances from foreign citizens.&S221;

The statement said that &S220;the defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States&S221; and were therefore &S220;less likely to be pressured by the American authorities to disclose the identities of their United States clients.&S221;

NZB is the unnamed &S220;Swiss bank&S221; mentioned in charges filed last month against an American client of the Swiss banking giant UBS, Jeffrey Chernick, claiming tax evasion on $8 million in assets. The indictments are a sign that American authorities are widening their attack on Swiss banking secrecy. Switzerland is the world&S217;s largest repository of hidden wealth, estimated to hold nearly one-third of the $7 trillion in assets believed to be held offshore.

The indictment also charged the two men with helping a second American, John McCarthy, a UBS client, to evade taxes, in part through offshore entities in Hong Kong linked to his UBS account.

Around 2007, the complaint says, Mr. Rickenbach&S217;s father hand-carried $5,000 to New York to deliver to an unidentified client.

NZB was established in 2000 by former senior executives from Bank Julius Baer, a prominent Swiss private bank. Over 2007 and 2008, Sarasin Group, another Swiss private bank, acquired a 40 percent stake in NZB, while NZB employees own the rest.

Thursday&S217;s indictment said that Mr. Schumacher &<51; who was referred to but not identified by name in the Chernick papers &<51; was a former manager of UBS&S217;s cross-border private banking division, the unit under scrutiny for having facilitated tax evasion by Americans.

Mr. Schumacher left UBS around 2002 to join NZB and help clients of UBS and other firms to evade taxes, according to the charges against him.

The new indictment said that Mr. Schumacher and Mr. Rickenbach paid $45,000 to a &S220;high-ranking Swiss government official&S221; in 2008 to learn whether Mr. Chernick was on a list of 285 names to be disclosed to American authorities in February as part of a broad settlement with UBS. Mr. Chernick reimbursed the $45,000 fee. The payment was referred to in the Chernick filing.

Mr. Schumacher, according to the Chernick filing, told Mr. Chernick that because the smaller bank had not entered into a special program with the Internal Revenue Service, it would be subject to less scrutiny by United States tax officials than UBS.

NZB&S217;s executives include senior names in the private banking industry. Martin Eberhard, the chief executive, was previously a senior executive at Julius Baer in charge of Swiss brokerage operations; Marco Bacchetta, the head of institutional sales, was previously in charge of the brokerage team at Pictet &&8; Cie Bank in Zurich, another well-known private bank.

Frank Gut, the chief financial officer, previously oversaw the Swiss Brokerage operations at Bank Julius Baer in Zurich. NZB&S217;s Web sitedescribes the bank as &S220;a financial institution which focuses on the brokerage business with institutional investors from Switzerland and abroad, and on asset management and investment advisory services for private clients.&S221;

The Justice Department established a special prosecutors&S217; team in 2007 that is focused on Swiss banks that help American clients evade taxes, according to a person briefed on the matter. During the UBS settlement, Douglas Shulman, the commissioner of the Internal Revenue Service, disclosed that the agency was looking at the activities of other banks and intermediaries in Switzerland.

U.S. Indicts Swiss Banker and Lawyer on Tax Charges

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NEW ALBANY, Ohio – Tween Brands Inc., a clothing retailer for girls age 7 to 14, said Wednesday it lost $2.8 million in the second quarter as revenue slipped during the recession, especially at stores open at least one year.

The New Albany, Ohio-based company lost 11 cents per share in the quarter that ended Aug. 1. That contrasts with a bigger loss of $6.7 million, or 27 cents per share, last year.

Excluding store impairment charges of $3.5 million, or 4 cents per share, and merger expenses of $1.9 million, or a penny per share, the company would have reported a loss of 16 cents per share in the most recent period.

The company was able to narrow its loss because of tight inventory, increased promotions, and lower expenses.

Analysts polled by Thomson Reuters had expected a larger loss of 37 cents per share and revenue of $198.9 million. The estimates typically exclude one-time items.

Revenue declined 8 percent to $205.1 million from $223.1 million.

Same-store sales, or sales at stores that have been open at least a year, fell 12 percent. The company said the drop was due to the economy and a tough comparison over the same quarter in 2008, when sales were boosted by Webkinz's strong performance.

Tween Brands said its proposed merger with Dress Barn Inc. remains on track and is expected to close in the fourth quarter.

Tween Brands posts smaller 2Q loss

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The Swiss banking giant UBS on Wednesday reached a final deal with the Justice Department and the Internal Revenue Service in which it will ultimately disclose names and account details for more than 4,450 wealthy Americans suspected of tax evasion.

Details of the settlement were unveiled Wednesday by the I.R.S. commissioner, Douglas Shulman.

The agreement, he said, also allows the Swiss government to work with other Swiss financial institutions to disclose the identities of other Americans who have hidden money offshore.

UBS will notify the clients whose names are to be disclosed in coming weeks, Mr. Shulman said. Clients still have time to come in before a voluntary disclosure program ends on Sept. 23 to potentially avoid prosecution and steeper penalties and fines, he said.

Scores of Americans have come forward in recent months to disclose their secret accounts to the I.R.S. in hopes of avoiding steep penalties, fines and prosecution should their names become known otherwise. That group of people, along with the &S220;thousands&S221; of names Mr. Shulman said that UBS will disclose, brings the total of UBS-related names to be disclosed to the I.R.S. to &S220;more than 10,000,&S221; he said. The accounts at one point held over $18 billion, he said.

&S220;These are the accounts we most wanted,&S221; Mr. Shulman said. But he said the United States government retained the right to resume its legal efforts to force banks to turn over names.

The settlement marks a turning point in a closely watched battle between UBS, the world&S217;s largest private bank, and federal prosecutors and tax investigators who suspect it of selling tax evasion services to tens of thousands of wealthy Americans.

The landmark settlement peels back layers of Swiss banking secrecy, and is expected to provide a road map for the authorities as they try to crack down on tax evasion by Americans who, through private banks and other Swiss-based financial intermediaries, use offshore accounts that go undeclared to the I.R.S.

The agreement &S220;will result in us receiving what we wanted all along,&S221; Mr. Shulman said. He said the I.R.S. would receive &S220;a unprecedented amount of information on taxpayers&S221; who evade taxes by hiding money offshore through UBS.

&S220;There is no mere keyhole into the world of bank secrecy,&S221; he said, but the deal represents &S220;a major step forward in piercing the veil of bank secrecy.&S221;

The settlement brings to a close a civil case filed by the Justice Department, on behalf of the I.R.S., in February against UBS that sought to force the bank to turn over the names and account details of 52,000 American clients. UBS fiercely resisted that effort, arguing that it violated Swiss financial secrecy laws and lobbying senior Washington officials. &S220;We were never interested in pursuing 52.000 accounts,&S221; Mr. Shulman said, adding that the figure was provided by UBS.

That month, UBS paid $780 million to settlement criminal charges that it helped American clients evade taxes on nearly $20 billion stashed in offshore accounts. UBS turned over approximately 250 client names as part of the February deal, and will turn over more in coming months. Some 150 Americans are under criminal investigation for tax evasion as part of the investigation.

Under Agreement, UBS to Give Up 4,000 Names

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Russia's President Dmitri Medvedev recently offered a gloomy assessment of Russia's economy and said the country can no longer afford to continue doing business as usual. Some Russian observers, however, are skeptical the country will take the steps necessary to sustain economic growth.  

Russian President Dmitri Medvedev looks on during a meeting in Russia's Black Sea resort of Sochi, 12 Aug 2009 President Medvedev says Russia's economy has been hit particularly hard by the global downturn because it remains overly dependent on the exporting natural resources.He recently painted a bleak picture of the economy's current state and future prospects.Mr. Medvedev says the economy needs "forward movement" but is instead "going around in circles." This has been demonstrated most graphically, he says, by the global economic crisis, which has sent Russia into a downward spiral steeper than in other countries.He says relying on commodity exports is a "dead end," and says the Russian economy has no future unless it is changed structurally.When the global economic crisis hit, demand for Russian oil, gas, timber and other resources dropped, as did prices. Mr. Medvedev made the comments last week at meeting of senior political party leaders in the resort city of Sochi. Recent data bear out that assessment of an economy that once was among the world's fast growing. Russia's state statistical agency says the economy contracted by almost 11 percent in the second quarter of this year compared with a year earlier, its biggest annual drop on record.Russia has one of the highest rates of inflation and lowest levels of industrial output among the countries of the former Soviet Union. Its economic performance trails that of such developing countries as Brazil, India and China.Russia's reserve fund, consisting of surplus revenue from oil exports, fell to about $88 billion in July after reaching a high of $137 billion in March. The fund is expected to sink to around $50 billion by the end of the year, despite the recent rise in world oil prices. Indeed, the Finance Ministry warns that the reserve fund will be "practically exhausted" by the end of 2010.But restructuring may not come soon.Economist Mikhail Delyagin says he doubts that Mr. Medvedev, who has been president for more than a year, has had a sudden revelation about the economy's shortcomings.Delyagin says the president's comments were probably connected to jockeying for power with Mr. Medvedev's predecessor, Vladimir Putin, who is now prime minister and has responsibility for the economy.Politics aside, economists say there are no quick fixes for the economy's structural problems. Natalia Orlova, chief economist at Alfa Bank, Russia's biggest privately owned lender, says there are relatively few examples in history of major energy exporters successfully diversifying their economies.Orlova says diversifying Russia's economy will take many years and require a change in strategy.Economists say other profound changes are needed if Russia is to achieve long-term economic growth.Oleg Zamulin, a professor at Moscow's New Economic School, says that while Russia has done much in the past decade to create a private financial and trade infrastructure, little has been done to create what he calls public goods.These public goods, says Zamulin, include the rule of law and a judicial system that protects large private investment. He says Russia's political system is not conducive to the development of effective law enforcement and judicial systems. So it is unlikely, he says, the country will see the kind of investment it needs to return to economic growth.Zamulin predicts that over the next few years, the economy will stagnate - it will no longer be in a tailspin but will be unable to deliver the kind of rapid growth it achieved earlier this decade.   

Russian President, Economists Offer Gloomy Forecasts

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(Reuters) – Eyeing a fresh wave of public offerings, Lazard Ltd (LAZ.N) has hired former Goldman Sachs Group Inc (GS.N) equity-markets banker Tom Tuft, the Wall Street Journal said on Tuesday.

Tuft, who will join Lazard in November, was involved with several high-profile initial public offerings in 1990s, including that of Estee Lauder (EL.N), according to the paper.

"Our view is that generally over the next five to six years, there will be a re-equalization of the American capital structure," Tuft told the paper. "So if you are in our role of giving advice, giving the best advice is very important."

Lazard, which does not handle actual underwriting, will name Tuft as the chairman of its global capital markets advisory group, the paper said.

The paper said Tuft&&9;s Goldman exit was announced internally last week.

Lazard and Goldman could not be immediately reached for comment outside regular U.S. business hours.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Valerie Lee)

Lazard hires ex-Goldman banker Tuft: report

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WASHINGTON (Reuters) – U.S. homebuilder sentiment in August rose to its highest level in over a year, a private survey showed on Monday, adding to mounting evidence that the housing market and economic recession were leveling out.

The National Association of Home Builders/Wells Fargo Housing Market Index edged up to 18 from 17 in July, in line with market expectations.

It was the highest level since June 2008 and marked the second consecutive monthly gain in the gauge, which measures builder confidence in the market for newly built, single family homes.

The NAHB attributed the rise to the government&&9;s tax credit incentive for first-time buyers, but warned the small gains in the housing market could be wiped-out if that incentive was not extended when it expires in November.

"There is definitely a sense of hope among builders that the worst of the downturn is over and that a turning point is near at hand," said NAHB Chief Economist David Crowe.

"Meaningful action by Congress could ensure that this upward momentum continues and that housing can help push the economy back onto solid ground."

Recent data ranging from housing starts to sales have suggested a bottoming in the three-year slump. Housing is at the center of the worst U.S. recession since the Great Depression of the 1930s.

Restoring stability to the housing market is crucial to reviving the economy. The 20-month-old recession is showing signs of winding down.

The NAHB survey also showed two out of three subindexes of the Housing Market Index rising in August.

The current sales conditions gauge was unchanged at 16, while the sales expectations measure for the next six months climbed four points to 30 in August. The traffic of prospective buyers index rose three points to 16 in August. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. August home-builder sentiment highest in year

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