WASHINGTON (Reuters) – While voters cast ballots on Tuesday in an election expected to shift Congress to the right, the Federal Reserve convenes what could be its most pivotal meeting since the height of the financial crisis.

The central bank was designed to be above political influence. But its policy decisions are not completely immune to the political environment.

A more conservative Congress would reduce the already slim chance that more fiscal support will come, putting the burden squarely on the Fed&&9;s shoulders to shore up a limp economy.

Douglas Holtz-Eakin, an economist who advised John McCain during his unsuccessful 2008 presidential campaign, said normally the Fed keeps quiet around elections to avoid any semblance of political involvement.

This time, the central bank sent a clear signal that it intended to take action, and investors are convinced the move will come this week in the form of relaunching asset purchases. This week&&9;s policy-setting meeting lasts two days, so the Fed&&9;s announcement will come on Wednesday, just after the election.

"It looks to me a bit desperate," Holtz-Eakin said, adding that he was not convinced another round of money printing would do much to stimulate the economy.

"I would have liked to see them hold on to their ammunition in case we really need it."

President Barack Obama&&9;s Democratic party is expected to lose its majority in the House of Representatives, while the Democrat-controlled Senate may move closer to a 50-50 split.

Republicans have made opposition to last year&&9;s &&6;814 billion stimulus package a central plank of their election campaign, tapping into voter dissatisfaction with the slow pace of recovery and weak job market.

The White House, recognizing there is probably not enough political backing, has said little about additional stimulus. However, two former Obama administration officials -- ex-Budget Director Peter Orszag and former Economic Adviser Christina Romer -- have pressed hard for more help.

"The necessary shifts in fiscal policy are extremely unlikely to happen," Orszag wrote in the New York Times last week no fax pay day loan. "So we&&9;re left relying on monetary policy ... which may create more problems than it solves."

Orszag warned that the Fed&&9;s easy money makes government borrowing unusually cheap, leaving Congress less inclined to tackle medium-term deficit cuts that he thinks are essential to a sustainable recovery.

OH YEAH, THE JOBS REPORT

This week brings a veritable feast for central bank watchers. In addition to the Fed, the European Central Bank and Bank of England hold their meetings on Thursday, and the Bank of Japan brought forward its next policy review to Thursday and Friday, heightening speculation that it may ramp up its own asset-buying program after the Fed&&9;s announcement.

No policy changes are expected from the ECB or the BoE, particularly after last week&&9;s surprisingly strong reading on Britain&&9;s third-quarter economic growth.

In a sign of just how action-packed the coming week is, Friday&&9;s U.S. employment report -- normally the undisputed data heavyweight -- has received relatively little attention.

Economists polled by Reuters are expecting a lackluster gain of 60,000 jobs, about one-quarter of the number analysts see as necessary to start dragging down unemployment.

Obama said on Friday that Democrats and Republicans shared a responsibility to promote job growth after the elections and urged Congress to approve business tax breaks he has proposed as a way to boost hiring.

Once the Fed&&9;s announcement is released, jobs will no doubt shift back into the investor spotlight.

Michael Hartnett, chief global equity strategist at Bank of America-Merrill Lynch, said payrolls are the "big game-changer" for markets, not only on Friday but through the next year.

"If (corporate) profits decline before job growth picks up, then look for bonds to outperform equities," he said in a note to clients. "If payrolls pick up before profit growth slows, then look for equities to outperform bonds."

(Editing by Dan Grebler)

Politics of the Fed's easy money

NEW YORK (Reuters) – U.S. stock index futures eased on Friday as equities continued to take their cue from moves in the dollar, while the first reading on third-quarter economic growth was due later in the morning.

Stocks have traded sideways through the week with investors wary of taking significant bets ahead of next week&&9;s elections and a likely announcement of more stimulus from the U.S. Federal Reserve.

The gross domestic product report will add to the debate over the size and timing of expected further quantitative easing from the Fed.

The report is forecast to show GDP expanded at a 2 percent annual rate, compared with 1.7 percent in the second quarter, according to a Reuters survey of economists.

The greenback steadied heading into the data, which is due at 8:30 a.m. EDT (1230 GMT). The dollar index (.DXY) added 0.3 percent. The dollar and stocks have developed an inverse relationship of late, though that has weakened somewhat this week.

On the earnings front, investors will take in results from some big names, including Chevron Corp (CVX.N).

Microsoft Corp (MSFT same day payday loans.O) reported profit that beat expectations late Thursday on higher sales of its flagship software. Its shares were up 3.6 percent at &&6;27.23 before the opening bell.

S&P 500 futures slipped 5.1 points and were below 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 fell 30

points, and Nasdaq 100 futures gave up 4.75 points.

Stocks ended little changed on Thursday as investors took a cautious track. The S&P 500 is up 0.1 percent for the week so far. Since the beginning of September, the S&P 500 is up almost 13 percent.

Also on the data front, the final reading of the October consumer sentiment index is due at 9:55 a.m. EDT (1355 GMT). Economists expect a reading of 68.0, compared with 67.9 in the preliminary October report.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)

Stock futures ease with GDP on tap

HONG KONG (MarketWatch) — China’s Cabinet said Wednesday it will take additional action to curb property prices and do what it can to foster stability in commodity prices.

The State Council’s statement came in the wake of a meeting chaired by Premier Wen Jiabao, and shows a renewed determination to rein in property prices. However, the language was consistent with the Cabinet’s earlier-expressed views on the housing market and conforms to China’s policy approach emphasizing the use of administrative measures to cool prices.

Environment ministers gather in Nagoya to discuss how to curb biodiversity loss. Video courtesy of Reuters.

The State Council also said local governments should renew efforts to restrain housing prices, adding that combined efforts would result in “firm curbs on rapid property-price increases in some cities,” according to the state-controlled China Daily.

Property prices climbed 0.5% in September from August, the first such month-on-month increase since May.

Consumer inflation rose 3.6% in September from a year earlier, above the government’s full-year target of a 3% rise, though the result was driven less by real-estate than by rising crop prices following a series of natural disasters this year.

Beijing also expressed concern over rising food prices, adding that the government is keen to ensure rural commodity prices remain stable.

The statement made reference to vegetables and food products as “life essentials” and pledged to crack down on hoarding and price collusion involving these products pay day advance.

“It was not growth but inflation and property prices that dominated Chinese leaders’ latest discussions. Stronger action is thus expected to anchor inflationary expectations,” HSBC analysts said in a note Thursday, referring to the State Council meeting.

HSBC said China will likely hike lending and deposit rates once more this year in a quarter-point move.

Still, the State Council acknowledged China “faces a very complex international environment and increasing external challenges, which makes macro-tuning more demanding,” according to the China Daily.

The People’s Bank of China echoed those concerns, saying more quantitative easing by major world economies will drive additional gains in prices for staple goods.

The PBOC noted “gradual normalization” of credit and money growth will help stabilize inflationary expectations.

China’s own broad money supply, as measured by M2, grew 19% in September from a year earlier, above its 16.3% average annual rise in the eight-year period to 2008, according to PBOC figures.

The central bank cautioned cooling growth in the second half in Europe, the U.S., Japan and other developed nations is likely to impact negatively on China’s export growth.

Emerging Markets Report: China plans more steps against inflation

ZURICH (AFP) – Swiss bank UBS on Tuesday posted a third quarter net profit of 1.66 billion Swiss francs, exceeding analysts&&9; forecasts as it restored client cashflow for the first time since the financial crisis.

The net profit attributable to shareholders, equivalent to 1.71 billion dollars or 1.22 billion euros, compared with a 564 million franc loss during the same period last year.

Net new money reached 1.2 billion Swiss francs in the third quarter of 2010, marking a turnaround from a trend of withdrawals by fearful clients.

Nonetheless, UBS said in a statement that its investment banking business suffered from reduced flows in equities while wealth management revenues also decreased.

"The third quarter was unusual in that there were very low levels of client activity as well as a strengthening of the Swiss franc against most major currencies," said chief executive Oswald Gruebel payday loans guaranteed no fax.

"However, we are optimistic that an uptick in the fourth quarter will benefit all of our business divisions. We remain confident about our future and believe that we are on track to achieve our medium-term goals," he added".

The bank, which was one of the hardest hit in the financial crisis, is counting on its profits to shore up its capital foundations and meet tougher international banking regulations over the coming decade.

Analysts had forecast third quarter net profit of around 1.1 billion francs.

UBS also beat analysts&&9; expectations during the previous quarter with net profit of 2.0 billion Swiss francs.

Swiss bank UBS swings into third quarter profit

Representatives of the world’s largest economies, meeting in South Korea, reached tentative agreement early Saturday on the need to rein in trade imbalances, as part of an American-brokered compromise on calming exchange-rate tensions that have threatened to disrupt the uneven global recovery.

The Obama administration on Friday urged the other economic powers that make up the Group of 20 to agree to curb persistent surpluses and deficits that could contribute to the next financial crisis.

The proposal, which included a numerical limit, was backed by South Korea and quickly drew support from Britain, Canada and Australia. But it met with resistance from Germany and ambivalence from Japan, both major export countries. China, whose currency battle with the United States has threatened to derail the process of global economic cooperation, did not formally weigh in.

So after a marathon negotiating session that stretched into the predawn hours Saturday, the G-20 representatives agreed on the goal of “reducing excessive imbalances” — without a specified limit — and called on the International Monetary Fund to examine the causes of “persistently large imbalances.” The draft statement, to be ratified later Saturday, will also call on countries to “refrain from competitive devaluation” of their currencies, officials said.

The lengthy and often chaotic negotiations illustrated the growing difficulty of securing cooperation among the G-20, whose leaders, including President Obama, will gather next month in Seoul, South Korea. But the agreement could be a critical moment in preventing the outbreak of a currency war, as Brazil, a G-20 member that skipped the weekend meetings, has warned.

Treasury Secretary Timothy F. Geithner offered the administration’s proposal on Friday at the start of a two-day meeting of G-20 finance ministers and central bankers in Gyeongju, South Korea. American officials called for the biggest industrialized economies to get their current-account balance — whether a surplus or a deficit — below 4 percent of gross domestic product by 2015. That goal, five years away, would be in line with China’s own forecasts.

The current-account balance is a nation’s net trade in goods and services, plus net earnings (like interest and dividends) and net transfer payments (like foreign aid and worker remittances). The United States, Canada and Britain have current-account deficits, while China, Germany and Japan have surpluses.

Four countries have current-account surpluses exceeding 4 percent: Saudi Arabia (6.7 percent), Germany (6.1 percent), China (4.7 percent) and Russia (4.7 percent.) But under the American proposal, countries like Russia and Saudi Arabia that are “structurally large exporters of raw materials” would be exempt from the 4 percent limit, so the pressure would have fallen on China and Germany.

Two G-20 countries have current-account deficits larger than 4 percent: Turkey (5.2 percent) and South Africa (4.3 percent). The United States is next, at 3.2 percent.

The proposal in essence tried to add some teeth to the broad but vague mantra of “strong, sustainable and balanced growth,” to which the G-20 countries agreed in September 2009 in their meeting in Pittsburgh.

Deficit countries should increase national savings, Mr. Geithner wrote in a letter outlining the proposal, by stabilizing their public indebtedness over the medium term and raising exports, while surplus countries “should undertake structural, fiscal and exchange-rate policies” to increase domestic demand. “Since our current-account balances depend on our own policy choices as well as on the policies pursued by other G-20 countries, these commitments require a cooperative effort,” he wrote.

The German economy minister, Rainer Brüderle, told reporters that the proposal could be viewed as a reversion to “planned economy thinking.”

The Japanese finance minister, Yoshihiko Noda, did not rule out Mr cash advance now. Geithner’s idea, but he did not embrace it either. “It might be a problem if we set the rigid numerical target,” he told reporters, “but it would be O.K. to see it as a reference number.”

Even if the countries had agreed to the 4 percent target, it would not have been compulsory. The G-20 operates through shared interests and peer pressure, and its agreements do not have the force of law.

Instead, the tentative agreement buttresses calls by the United States for the I.M.F. to play a more assertive role in evaluating whether the G-20 countries are fulfilling their commitments. The fund is responsible for monitoring countries’ fiscal and monetary policies and for discouraging them from manipulating exchange rates. Though it cannot compel its members to act, its economic findings carry great weight.

The Obama administration’s proposal added some momentum to a meeting for which many officials and experts had low expectations.

Britain’s chancellor of the Exchequer, George Osborne, who earlier this week laid out drastic budget cuts in his country, expressed interest in and support for the Geithner proposal, a spokesman said.

The Australian treasurer, Wayne Swan, called the proposal “a constructive one.” And James M. Flaherty, Canada’s finance minister, seemed to warm to the idea, saying, “We agree because it fits with the strong, sustainable, balanced growth that we need to accomplish.”

“No one wants to be confrontational here,” he said. “No one wants to walk away from here without an agreement on an action plan.”

Mr. Flaherty, who led a separate meeting of the Group of 7 powers on Friday afternoon in Gyeongju, also said he had met with his Chinese counterpart, Xie Xuren, to discuss the currency.

“I think there’s a willingness to open the door to more flexibility over time,” Mr. Flaherty said. “I think there’s a recognition that this currency issue has to be addressed.”

In his letter, Mr. Geithner also said the G-20 countries should refrain from “exchange-rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency.”

He also suggested that the I.M.F. semiannually assess “G-20 countries’ progress toward the agreed objectives on external sustainability and the consistency of countries’ exchange rate, capital account, structural and fiscal policies toward meeting these objectives.”

Desmond Lachman, a former I.M.F. official now at the American Enterprise Institute in Washington, praised Mr. Geithner’s message. “It’s a constructive and imaginative proposal and it broadens the discussion away from an exclusive focus on currency to the wider set of policies needed to bring balance about,” he said. “But if you don’t have the Germans and the Chinese, this isn’t going to go very far.”

He added: “They want the U.S. to reduce its deficits, but they don’t want to reduce their surpluses.”

As host, South Korea was eager for the talks to go well. The South Korean president, Lee Myung-bak, joked that the ministers and central bankers had an extra incentive to cooperate. “If you do not reach an agreement, when you come to leave, we may not operate buses, trains or planes,” he said.

This article has been revised to reflect the following correction:

Correction: October 22, 2010

An earlier version of a headline with this article misstated the extent of a tentative agreement reached at a Group of 20 meeting. The group of nations did not reach an agreement on reducing trade imbalances -- only on the need to do so.

Nations Agree on Need to Shrink Trade Imbalances

Stocks on Wall Street were flat in late trading Thursday after a mixed performance during the day as investors digested upbeat corporate earnings and new statistics on the economy.

Just before the close, the three indexes gained ground, reversing declines in early afternoon trading that analysts had attributed partly to profit-taking, or because of a rise in the dollar.

Bank of America shares fell more than 3 percent, dragging down the Dow Jones industrial average, which was 27.7 points, or 0.25 percent, up a half hour before the closing.

Citigroup shares were down by more than 1 percent.

The financial sector in general has been struggling to overcome the continuing foreclosure crisis. Earlier in the week state attorneys general announced an investigation into foreclosure processes in their states.

“The prospects of mortgage issues from a foreclosure perspective and more fundamentally the potential for bad loan repurchases — that certainly weighed on the bigger names here,” said Jason Arnold, an analyst with RBC Capital Markets Corp.

The Nasdaq composite index declined 3.11 points, or 0.1 percent. The broader Standards & Poor’s 500-stock index was up 0.2 points, or 0.02 percent.

Fresh from a strong performance on Wednesday that saw a rise of about 1 percent or more for the three major indexes, the stock markets surged Thursday soon after the opening. Within the first hours of trading the Dow at one point touched a high of more than 100 points, and the broader market had increased by almost 1 percent.

The performance suggested that the market had recovered from the one-day jolt it experienced on Tuesday after the surprise announcement by China’s central bank that it would raise interest rates for the first time in nearly three years. On Thursday new economic data from China indicated that growth had slowed in the third quarter, although it remained robust.

New earnings reports have also helped fuel increases since Tuesday, and reports Thursday from Caterpillar, AT&T and other bellwether companies matched expectations or came in better than forecasts, helping to lift indexes.

Caterpillar said that its sales and revenues increased to $11 billion in the third quarter, and that it expected continued growth in 2011. It revised its sales and revenue outlook for all of 2010 was up 28 percent, to between $41 to $42 billion.

Caterpillar is always closely watched because of the international nature of its business and because it often provides an outlook for economic performance over a subsequent period, said Dan Greenhaus, the chief economic strategist for Miller Tabak & Company bad credit payday advance.

In its earnings presentation, the company acknowledged that the recovery in the United States was weak and said developing economies were leading the company’s growth. The observation was largely in line with some other companies’ forecasts that have attributed their growth to international markets.

In a statement, Caterpillar said: “2010 is shaping up to be one of the most significant year over year increases in sales and revenues in our history.”

Yet Caterpillar shares declined about 1.5 percent

The reason for this could be that the appearance of the sales and revenue figures released this quarter was enhanced by weaker results in previous years, and because the company issued a cautious outlook for the growth of global retail sales to dealers in 2011.

“That is why the stock has retreated from where it was earlier in the session,” said Rob F. McCarthy, an analyst with Robert W. Baird Co.

Another reason could be that the company’s commentary on growth in its engine business seemed slightly more cautious than expected, said Robert Wertheimer, an analyst with Morgan Stanley.

AT&T, the largest phone company in the United States, met analysts’ estimates in its third-quarter earnings, which showed revenue rose 2.8 percent, to $31.6 billion. The share price was up 0.2 percent in the afternoon.

Weekly jobless claims fell more than expected, and the Conference Board’s index of economic indicators showed a positive trend, although it confirmed that the economy was sluggish.

The claims presented a mixed picture of the crucial sector of the economy as it struggles to recover. There were 452,000 new claims in the week that ended Oct. 9, which was lower than expected, although there were upward revisions to such claims the previous week, the Labor Department said.

Mr. Greenhaus said it was a welcome drop but that “meaningful job creation remains elusive.”

The Conference Board Leading Economic Index, an index of 10 indicators that are intended to predict overall economic activity, showed a rise of 0.3 percentin September to 110.4 points, up from a rise of 0.1 percent in August.

“More than a year after the recession officially ended, the economy is slow and has no forward momentum,” said Ken Goldstein, economist at the Conference Board. The index “suggests little change in economic conditions through the holidays or the early months of 2011.”

Wall Street Is Flat in Late Trading

NEW YORK (Reuters) – A group of investors holding &&6;16.5 billion of mortgage bonds took a step toward a possible suit against a Bank of America Corp (BAC.N) unit for failing to correctly handle loans that were packaged into bonds.

The investors said that some mortgages should never have been included in the bonds in the first place, and that the Bank of America unit, Countrywide Home Loan Servicing, should force the original lender to buy them back.

The salvo is the latest effort from investors to push losses from mortgage securities back onto banks that made the original loans. Investors say the loans did not meet the standards that bondholders were promised when they bought the securities.

Countrywide Home Loan Servicing, now part of Bank of America, works on behalf of mortgage bond holders to collect payments on mortgages and work out bad loans.

The bondholders have issued a "notice of nonperformance," which gives Countrywide 60 days to fix the problems. If it does not, the investors can declare "an event of default," -- a technical violation of the terms of the bond, said Kathy Patrick, a partner at Gibbs & Bruns LLP representing the investors cheap payday advance.

After an event of default, investors can sue.

On a conference call with investors, Bank of America CFO Charles Noski said the bank has received the letter and is reviewing the allegations.

It is not clear how successful efforts will be for mortgage bonds that were not guaranteed by Fannie Mae or Freddie Mac, analysts at JPMorgan said late last week.

Investors seeking redress have to establish a number of facts, including that they were hurt by the failure of the loans to meet the proper underwriting standards. That may be difficult, the JPMorgan analysts said.

This group of investors also said Countrywide failed to keep accurate loan records, a widespread problem in the industry that prevents investors from knowing how well loans are really performing.

Patrick said they hold more than 25 percent of the voting rights of some &&6;47 billion of mortgage-backed securities, the minimum sign-on required for a notice of nonperformance.

(Editing by Jackie Frank)

Mortgage investors put pressure on Bank of America

MOSCOW — Microsoft is vastly expanding its efforts to prevent governments from using software piracy inquiries as a pretext to suppress dissent. It plans to provide free software licenses to more than 500,000 advocacy groups, independent media outlets and other nonprofit organizations in 12 countries with tightly controlled governments, including Russia and China.

With the new program in place, authorities in these countries would have no legal basis for accusing these groups of installing pirated Microsoft software.

Microsoft began overhauling its antipiracy policy after The New York Times reported last month that private lawyers retained by the company had often supported law enforcement officials in Russia in crackdowns on outspoken advocacy groups and opposition newspapers.

At first, Microsoft responded to the article by apologizing and saying it would focus on protecting these organizations in Russia from such inquiries.

But it is extending the program to other countries: eight former Soviet republics — Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — as well as China, Malaysia and Vietnam. Microsoft executives said they would consider adding more.

“We clearly have a very strong interest in ensuring that any antipiracy activities are being done for the purpose of reducing illegal piracy, and not for other purposes,” said Nancy J. Anderson, a deputy general counsel and vice president at Microsoft. “Under the terms of our new nongovernmental organization software license, we will definitely not have any claims and not pursue any claims against nongovernmental organizations.”

Software piracy inquiries against advocacy groups and media outlets in other former Soviet republics are less common than in Russia, but they have occurred. This year, the police in Kyrgyzstan raided an independent television station, and its employees said a lawyer retained by Microsoft had played a role.

In China, experts said they were not aware of many cases. They pointed out that if the security services wanted to hound or close advocacy groups, they had many other ways of doing so.

But China has been a minefield for American technology companies, including Microsoft, Yahoo and Google, which have grappled with the country’s Internet censorship, and it appears that Microsoft is hoping to avoid new controversies there.

Microsoft’s offer “will surely promote the health of nongovernmental organizations in China,” said Lu Fei, director of a clearinghouse for these groups.

Software piracy is widespread in the 12 countries covered by the new program, and Microsoft has long urged their governments to curb the practice. But in Russia, the company discovered that the authorities used the intellectual property laws against dissenters no fax payday advances.

The security services in Russia have confiscated computers from dozens of advocacy organizations in recent years under the guise of antipiracy inquiries. Some of these groups did have illegal software, and the authorities have said they are carrying out legitimate efforts to curtail software piracy. But they almost never investigate organizations allied with the government.

Microsoft had long rejected requests from human-rights groups that it refrain from taking part in such cases, saying it was merely complying with Russian law.

But now, the organizations would be automatically granted the software licenses without even having to apply for them, meaning that any programs that they possessed would effectively be legalized. That essentially bars the company’s lawyers from assisting the police in piracy inquiries against the groups.

Ms. Anderson of Microsoft said the company was trying to quickly prepare the automatic licenses for the 12 countries, a process that includes translating them, ensuring that they comply with local laws and disseminating them to the authorities.

Microsoft already provides actual copies of software free to some nonprofit groups. It said that in its last fiscal year, it gave out half a billion dollars worth of programs in more than 100 countries. But it has also found that this policy is not well known in some countries.

In Russia, nonprofit groups said they had already noticed a striking change in Microsoft’s attitude toward these piracy cases. In one notorious inquiry, plainclothes police officers raided a group in Siberia, Baikal Environmental Wave, and seized its computers in January.

Baikal Wave’s leaders said they had used only licensed software, but they were unable to gain any help from Microsoft.

The case was a focus of the article last month in The Times. After it was published, Microsoft gave Baikal Wave free updated versions of software for all its computers and asked the police to drop the inquiry.

The police have not yet formally done so, but Baikal Wave said it was pleased with Microsoft’s reaction and the new program of automatic software licenses.

“The security services will now know that they will not be able to harass nonprofit and human rights organizations and take their computers,” said Galina Kulebyakina, a co-chairwoman of Baikal Wave. “It is outrageous what they did, and now that will no longer happen to others.”

Jing Zhang contributed research from Beijing.

Microsoft Expands Effort to Protect Nonprofits

ROME (AFP) – Italian Prime Minister Silvio Berlusconi laughed off a new investigation against him and his son for tax evasion linked to his Mediaset media empire, Italian newspapers reported on Saturday.

"It makes me laugh except that my son has been dragged into it," Berlusconi, 74, who is recovering in his luxury villa in Sardinia after an operation on his left hand, was quoted by La Repubblica daily as saying.

Il Giornale, which belongs to the Berlusconi family, quoted the prime minister as saying that the inquiry was "entirely predictable."

"I&&9;m used to it," Berlusconi was quoted as saying payday lenders.

Berlusconi and his son have been summoned for questioning on October 26 on allegations related to Mediaset&&9;s tax declarations for 2003 and 2004 as part of a wider inquiry against the company, judicial sources said on Friday.

Mediaset has already firmly rejected the accusations as "absurdity."

Mediaset was founded by Berlusconi in the 1970s and is now run by his family. It includes Italy&&9;s three main private national television channels.

Berlusconi laughs off tax fraud inquiry

The nation&&9;s leaders are always working with conflict. They are either in a conflict, entering a conflict, or coming out of a conflict.

Most recently, the crisis involves the shoddy paperwork in the foreclosure process. That lack of detail violated the rights of those being evicted. But who is the real loser?

It is the evictee? It probably would be if they were improperly foreclosed upon. But of the homes being taken over by banks, most mortgage holders haven&&9;t made payments in more than 18 months.

[See Is Your Portfolio Ready for a Double-Dip Recession?]

Is it the new purchaser? It could be. The new buyer likely put money down and is simply waiting for the paperwork to be settled so he or she can move in or rent the property. What happens to those funds and/or where will he live?

What about the banks? They are still servicing the mortgage instruments that are backing the bad loans and now they can&&9;t even get the collateral that was pledged against the loan to begin with. Furthermore, if they do have a buyer, they are a stone&&9;s throw away from getting that real estate off the books. Banks don&&9;t want to hold real estate.

How about the mortgage servicers? Technically, it was their job to file the paperwork properly, and if they did not, should they have to do it again? Redoing the paperwork costs money through payroll and time.

How about the regulators? They&&9;ll have to work evenings and weekends to solve this issue as soon as possible. Of course they&&9;re getting the blame for not providing the oversight.

What about our government, state or federal? They will have to work extended hours to find out who is to blame. They will also have to come up with new regulations to keep their voters safe from future issues.

Finally, what about homeowners/tax payers? They&&9;ve been doing a good job of paying their mortgage on time, but with every foreclosure in their neighborhood, the value of their home continues to drop and with this moratorium, that will continue overnight pay day loans.

Homeowners and taxpayers will ultimately pay the price of higher fees and taxes. There will be a cost from the evictee being left on the street. There will be a cost because the new buyer will file suit against the bank for not honoring their contracts. There will be a cost for consumers as banks charge higher fees to cover the bad debt on their books. There will be a cost for mortgage servicers who must still make profits amid recreating paperwork. There will be a regulatory cost as new rules making the mortgage markets move slowly. There will be the cost of higher taxes the state and federal government will charge for witch hunts, for new processes, and for bailing out those involved with this conflict. As a matter of fact, the real cost could eventually include another government bailout.

The next time you are completing a document, make sure you read over everything and dot all the i&&9;s and cross all the t&&9;s before you sign it. It will ultimately help everyone.

Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, A Registered Investment Advisor in Fairfax, Va. Campbell is also the author of Fire Your Broker, a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.

Who Loses in a Foreclosure Moratorium?

PARIS – Workers tried to shut down France on Tuesday with strikes affecting airports, public transportation, schools and the postal service in a showdown with President Nicolas Sarkozy over his government's attempt to raise the retirement age by two years to save money.

Refinery workers also walked off the job, leading one union to warn of looming gasoline shortages.

The battle over the contested retirement reform has gone on for months, but this week could prove decisive. With the Senate expected to pass the pension reform bill by the end of the week, some unions have upped the ante by declaring open-ended strikes, meaning the walkouts that begin on Tuesday could last for days or even weeks. Past walkouts lasted only one day.

Train drivers launched an open-ended strike Monday night, and the work stoppages widened to other sectors on Tuesday. High school students also were joining the fray, with walkouts expected at hundreds of schools Tuesday.

More than 200 street protests were planned throughout the country. Last month, similar demonstrations brought 1 million people onto the streets, according to police estimates, though union organizers insisted turnout was three times as high.

The left-leaning Liberation newspaper ran a headline reading "What if the strike lasted?," while the conservative Le Figaro ran a story about how strikes at French oil refineries could lead to shortages by the week's end on its front page.

Around 30 percent of flights were canceled at France's busiest airport, Paris' Charles de Gaulle, while cancellations at the capital's second airport, Orly, reached 50 percent, according to aviation authorities. Most of the affected flights were short-haul domestic flights or inter-European flights, said Eric Heraud, spokesman for France's DGAC civil aviation authority.

Even getting to the airport was a challenge Tuesday. As 1 p.m. (1100 GMT), no trains were running on the suburban RER B-line that links central Paris to both airports, according to Paris' RATP public transport authority.

Workers at all six of oil giant Total SA's French refineries were striking, and two of them had begun preparations for total shutdowns, said company spokesman Michael Crochet-Vourey.

A third Total refinery had already begun shutdown procedures on Sunday because an unrelated 2-week-long strike by port workers had blocked shipments of crude oil for processing, Crochet-Vourey said. He declined to estimate how long it would take before the strikes translated into gas shortages at the pump.

However, the CGT union said in a statement Tuesday that gasoline shortages were possible "in the very near future."

Participation in Tuesday's strikes varied by sector.

Around a fifth of elementary and high school teachers were striking — fewer than the number that took part in the last strike, on Sept. 23, the Education Ministry said.

The national railway said participation in the strike had risen to 40 percent Tuesday from 37 percent in the last round of strikes, while at the postal service the strike's impact was similar to last month, with about 17 percent of employees walking out, according to post office management. One post office union put participation at twice that level.

A union-led demonstration filled Marseille's Old Port with red flares and smoke online pay day loans.

"I think the government needs to listen to the message of the people in the streets and the workers from all the companies in our country," said metal worker Didier Musato, 53, from the CFDT union.

With service on suburban trains and the Paris Metro and bus lines slashed by about half, commuters rolled into work on bikes, rollerblades and skateboards. The French capital's free bike racks were empty as many took advantage of the brisk, sunny morning to cycle to work.

Because strikes are frequent in France, commuters have become experts at dealing with transit issues and travelers at Europe's largest train station, Paris' Gare du Nord, appeared to be taking the latest walkout in stride.

"I understand the strikers, I tolerate it," said Fuad Fazlic, 38, a tailor at French luxury label Chanel, as he rolled his ten-speed bicycle out of the Gare du Nord on his way to work. Fazlic said the strike hadn't disturbed his morning commute by train from Senlis, a town north of the capital, and with his bike to get around Paris, he wasn't worried about slowdowns on the capital's buses and subways.

Fazlic said he'd learned his lesson after massive strikes in 1995 brought much of France to a standstill for about two months. "I have been biking to work ever since," Fazlic said.

Emmanuel Difom, 40, said he'd had no trouble catching a train from the Charles de Gaulle airport to central Paris. But Difom, an accountant who'd flown in Tuesday morning from Cameroon, said he was "very worried" about making the next leg of his journey, by train to Strasbourg.

President Sarkozy's conservative allies insist there is no choice but to buckle down and accept the reform. Faced with huge budget deficits and sluggish growth, France must get its finances in better order, the insist. Even with the two-year change France would still have among the lowest retirement ages in the developed world.

Unions fear the erosion of the cherished workplace benefit, and say the cost-cutting ax is coming down too hard on workers.

Sarkozy's government is all but staking its chances for victory in presidential and legislative elections in 2012 on the pension reform, which the president has called the last major goal of his term. France's European Union partners are keeping watch, as they face their own budget cutbacks and debt woes.

The new nationwide strikes was the fifth since May, including two last month that coincided with protest marches that drew at least 1 million people into the streets.

The lower house of parliament, the National Assembly, approved the reform last month. The Senate has approved the article on raising the retirement age from 60 to 62, but is still debating the overall reform. The bill also raises the age of eligibility for a full pension from 65 to 67.

Sarkozy, in a small concession Thursday, offered to allow women born before 1956 and who had more than three children to receive full pensions at 65.

That apparently did little to stem the strike plans.

___

Associated Press writers Jean-Marie Godard and Jamey Keaten and APTN producer Sylvain Plazy in Paris contributed to this report.

France: Strikes over pension reform begin

WHEN he played the oil tycoon J. R. Ewing Jr., in “Dallas,” the long-running, ’80s-era nighttime soap opera, Larry Hagman didn’t get mad at his adversaries. He got even.

Last week, Mr. Hagman, 79, got even once again. This time it was against his broker.

A securities arbitration panel awarded Mr. Hagman and his wife Maj, 82, a big victory against Citigroup, which had overseen some of the couple’s investment accounts. The three arbitrators who heard the case ordered Citigroup to pay the Hagmans $1.1 million in compensatory damages — slightly less than the $1.345 million they had requested — as well as $439,000 in legal fees.

But the kicker was the punitive damages award in the case, which accused Citigroup’s brokerage unit, Smith Barney, of fraud, breach of fiduciary duty and failure to supervise the broker overseeing the Hagmans’ funds. The panel ordered Citigroup to pay $10 million to charities chosen by Mr. Hagman.

The award was the largest given to an individual this year, according to the Financial Industry Regulatory Authority, which oversaw the arbitration. The Hagman award was also the only one in which a panel ordered that punitive damages go to charity, Finra said.

Finra has been recording arbitration awards for 21 years, and Mr. Hagman snared the ninth-largest amount ever awarded. A spokesman for Citigroup said that “we are disappointed and disagree with the panel’s finding and we are reviewing our options.”

That suggests that Citigroup — which said in its own defense that it wasn’t responsible for the losses — might seek to overturn the award. But arbitrations are rarely reversed. Moreover, it’s hard to imagine an award destined for charitable organizations being overturned.

So here’s what happened to the Hagmans: In 2005, they moved their account from a registered investment adviser to Lisa Ann Detanna, a broker at what is now Morgan Stanley Smith Barney. (When the couple first invested with Smith Barney, Citigroup still owned it; Citigroup sold a controlling stake in the brokerage to Morgan Stanley in 2009.)

According to documents produced in the Hagmans’ case, Ms. Detanna quickly began upending the couple’s portfolio, taking it from a conservative blend of 25 percent stocks and 75 percent fixed income and cash to the opposite: 75 percent stocks and the rest cash and bonds.

Never mind that when the Hagmans first sat down with Ms. Detanna, they told her they needed income-producing investments that would preserve their principal, according to the documents.

Ms. Detanna also sold Mr. Hagman a $4 million life insurance policy that required onerous annual premium payments of $168,000.

PHILIP M. AIDIKOFF, a lawyer at Aidikoff, Uhl & Bakhtian in Los Angeles, represented the Hagmans in the case.

“Like most retail customers, Mr. Hagman trusted Morgan Stanley Smith Barney to do what they said they would do,” he said. “He told the broker that he and his wife were conservative and did not need to take any significant risk with the assets they were transferring. This knowledge of the conservative risk tolerance was confirmed over and over to my clients.”

When the market fell, Mr. Hagman’s lawyer argued, the account’s losses were far larger than they would have been had Ms. Detanna maintained the conservative portfolio. And the life insurance policy, which Mr. Hagman did not need and was therefore unsuitable according to his lawyer, generated losses of almost $437,000 when sold. The losses included an exit fee of $168,610, which Citigroup extracted when Mr. Hagman sold the policy.

Mr. Hagman, who recently returned from Europe, where he made personal appearances for “Dallas” fans, said he was surprised by the award but felt it was justified. “I hire people to take care of these things for me,” he said in an interview. “I felt a little bit taken advantage of.”

Documents produced in the case by Morgan Stanley Smith Barney confirmed that the firm had been advised repeatedly of the conservative nature of the Hagmans’ investment preferences no fax cash advances. The firm also produced materials indicating that a portfolio mix dominated by equities, as the Hagmans’ portfolio was, does not qualify as conservative.

Nevertheless, Ms. Detanna piled the couple into stocks.

Much back and forth in the case focused on whether Don T. Davis, her manager in a Beverly Hills office, failed to supervise her properly. A broker who generates significant commissions for her firm, Ms. Detanna was named in June by Barron’s as one of the top 100 Women Financial Advisers in America.

A spokeswoman for the firm said that neither Mr. Davis nor Ms. Detanna would comment for this article and noted that the problems occurred when Citigroup controlled Smith Barney.

“The investment activity that was the subject of this arbitration occurred before Morgan Stanley Smith Barney came into existence,” she said.

A look at Ms. Detanna’s full regulatory record, however, shows nine customer complaints in addition to Mr. Hagman’s between 2000 and 2010. Of these 10 complaints, four resulted in awards or settlements, four were dismissed, one was withdrawn and one is pending. Regardless of their disposition, the sheer number of complaints should have raised flags for Ms. Detanna’s manager if he had followed his firm’s compliance rules, Mr. Aidikoff told the arbitrators.

Mr. Davis’s branch office manager compliance handbook, dated June 2006, states that a broker may require special supervision “if he/she has received three or more complaints and/or arbitrations in a rolling 12-month period or two complaints/arbitrations in a rolling six-month period.”

But in testimony during the arbitration, Mr. Davis conceded that he had never placed Ms. Detanna under increased supervision, even though her record indicated four complaints within a 12-month period in 2002 and 2003.

Notices to member firms published by Finra over the years also warned that managers should increase their oversight of brokers who are subjects of numerous complaints. And the number of complaints on Ms. Detanna’s record makes her a rarity in an industry where a tiny fraction of brokers receive even five. Mr. Aidikoff said he had never seen a compliance history as riddled with complaints as that of Ms. Detanna.

Such complaints are recorded in a C.R.D., or central registration depository. The arbitration panel overseeing the Hagman matter rejected Citigroup’s request that the decision in the actor’s case be removed from Ms. Detanna’s regulatory record.

Of course, there’s an obvious reason that some branch managers prefer not to admonish their big producers: They receive a portion of the hefty commissions that star brokers generate. Mr. Davis, the manager charged with overseeing Ms. Detanna, had such an arrangement, Mr. Aidikoff said.

Mr. Hagman said he was not sure which charities he’d designate as recipients of the $10 million award. Because his wife has Alzheimer’s, he said he would earmark some money to those working on a cure. “It’s an opportunity to do some good,” he said.

Mr. Aidikoff said he thought the unusual award reflected the panel’s view that the firm “refused to accept that broker supervision is really at the heart of the retail stock market.

“The message the panel is sending is, ‘You guys have to take your supervisory obligations seriously,’ ” he added. “And the only way to remind them of how important this is, is to hit them over with a punitive damage award.”

Or, as Mr. Hagman used to say in character on “Dallas”: “The world is littered with the bodies of people that tried to stick it to ole J. R. Ewing!”

Fair Game: It’s Not Nice to Mess With J.R.

Filed at 1:15 a.m. ET

SHANGHAI (AP) — Brazilian aircraft maker Embraer said Friday it is still discussing plans for its aircraft factory in northern China, denying reports it will close the plant.

Brazil's Estado news agency, citing Embraer's vice president of commercial aviation, Paulo Cesar de Souza e Silva, said the company planned to shut down the factory because China, in light of its own ambitions in aircraft manufacturing, viewed the Brazilian company as competitors.

"Embraer clarifies that, at the present time, no decision has been made in this respect, and that the company is negotiating with the government of China and the Chinese partner for the purpose of continuing the operations," said the statement, issued by the company, also known as Empresa Brasileira de Aeronautica SA.

Embraer makes 50-seat ERJ-145s at the factory in Harbin, Harbin Embraer Aircraft Industry Co., Ltd., a joint venture with Harbin Aircraft Industry Group that opened in 2003 no teletrack payday loan.

The Chinese government committed in 2002 to buy planes from Embraer in return for a promise by the Brazilian company to build a plant in China.

Embraer jet sales have stalled in recent years as European and U.S. airlines have cut purchases due to the financial crisis and rising fuel costs. The Harbin factory was set up to serve as a foothold for the Asian market, and especially fast-growing China.

But China is pushing ahead with plans to develop and market its own regional and large jets in a challenge to established aircraft makers.

Meanwhile, China has scaled back purchases of the ERJ-145s, and given the lack of demand, the company reportedly hopes to make larger jets at the facility.

Embraer Says Still Mulling China Factory Status

Filed at 10:04 a.m. ET on October 06, 2010

LONDON (AP) — European stock markets gave up some of their gains Wednesday after a subdued opening on Wall Street following disappointing U.S. jobs data.

Expectations that the U.S. Federal Reserve is preparing to unveil more monetary stimulus continued to hit the dollar hard, as it sank to a fresh eight-month low against the euro and a new 15-year low against the yen.

In Europe, the FTSE 100 index of leading British shares was up 42.17 points, or 0.8 percent, at 5,677.93 while Germany's DAX rose 43.17 points, or 0.7 percent, at 6,259. The CAC-40 in France was up 34.33 points, or 0.9 percent, at 3,766.26.

In the U.S., the Dow Jones industrial average was up 9.16 points, or 0.1 percent, at 10,953.88 soon after the open while the broader Standard & Poor's 500 index was less than a point to 1,160.80.

U.S. stocks had been heading for a brighter opening, following big gains on Tuesday amid mounting expectations that the Federal Reserve will introduce more monetary stimulus measures next month.

However, the monthly survey from private payrolls firm ADP stoked concerns that this coming Friday's nonfarm payrolls report for September may be worse than expected. ADP found that U.S. employers shed 39,000 jobs during September, in contrast to market expectations for a 20,000 or so increase.

"This does not augur well for nonfarm payrolls," said David Buik, markets analyst at BGC Partners.

In most months, the payrolls data often set the market tone for a week or two after their release. This time, they may be even more important than usual — most economists think that the Fed is ready to announce further measures at the beginning of next month as the figures are not expected to show the U.S. economy creating a significant amount of jobs.

Expectations of further action by the Fed underpinned Tuesday's big stock market gains around the world.

The catalyst to the rally was the Bank of Japan's surprise decision Tuesday to cut its key interest rate to a range of zero to 0.1 percent. More importantly in the context of the world economy, the bank said it was paving the way for a 5 trillion yen ($60 billion) fund to buy government bonds and other assets to prop up the faltering Japanese economy guaranteed high risk personal loans.

"What they have done has served to reinforce the belief that the Federal Reserve will soon start up the printing presses and resume asset purchases of some form or other in the next few weeks," said Michael Hewson, market analyst at CMC Markets.

All this is having a dramatic impact on the dollar.

By mid afternoon London time, the euro was up 0.3 percent on the day at $1.3873, just shy of its earlier eight-month high of $1.3884. Meanwhile, it was 0.3 percent lower at 82.92 yen, just above its earlier 15-year low of 82.77 yen.

The markets are on the lookout for another intervention by the Bank of Japan. Last month, it bought dollars when it had fallen to 82.87 yen in an attempt to stem the export-sapping appreciation of the Japanese currency.

Besides economic indicators, the quarterly earnings reporting season begins Thursday — aluminum company Alcoa Inc. is the first major company to report — a number of the world's major central banks are meeting. On Thursday, both the European Central Bank and the Bank of England meet.

In Asia, Japan's benchmark Nikkei 225 stock average closed up 1.8 percent, or 172.67 points, at 9,691.43 after surging 1.5 percent the previous day.

South Korea's Kospi rose 1.3 percent to 1,903.95. Australia's S&P/ASX 200 was up 1.7 percent at 4,686.8 and Hong Kong's Hang Seng jumped 1 percent to 22,880.41.

Markets in Malaysia, New Zealand, Singapore, Bombay and Taiwan also advanced. Financial markets in mainland China are closed through Oct. 7 for the National Day holidays.

Benchmark oil for November delivery was down 2 cents to $82.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.35 to settle at $82.82 on Tuesday.

____

Associated Press Writer Pamela Sampson in Bangkok contributed to this report.

Stocks Ease on Soft US Jobs Data as Dollar Slides

NEW YORK (Reuters) – The Dow and S&P 500 were little changed on Monday as concerns about bank profits, spurred by new Swiss capital rules, were offset by upbeat housing data, while Microsoft fell after a ratings downgrade, weighing on the Nasdaq.

Pending home sales rose more than expected in August, indicating the housing market was regaining some stability, and August factory orders fell slightly more than forecast.

Swiss regulators will require global banks UBS AG (UBS.N)(UBSN.VX) and Credit Suisse (CS.N)(CSGN.VX) to hold far more capital than their international rivals to prevent a crisis that could cripple the country. The new rules could crimp competitiveness in investment banking.

Concerns about Europe&&9;s banking system have been a headwind for U.S. stocks in recent months, even as some improving domestic data eased concerns over a possible double-dip recession. The S&P 500 recently finished its best quarter in a year, though the index has struggled to break out of the 1,130-1,150 range.

"These austerity measures are necessary, but don&&9;t have a stimulating effect on the market," said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania. "It could mean that equity returns will be muted, though not necessarily down, for quite a while instant credit report."

The Dow Jones industrial average (.DJI) was up 2.80 points, or 0.03 percent, at 10,832.48. The Standard & Poor&&9;s 500 Index (.SPX) was down 1.78 points, or 0.16 percent, at 1,144.46. The Nasdaq Composite Index (.IXIC) was down 8.74 points, or 0.37 percent, at 2,362.01.

Microsoft Corp (MSFT.O) was the top percentage loser on the Dow, falling 2.1 percent to &&6;23.87 after Goldman Sachs downgraded the stock to "neutral," citing competition from tablet computers.

Actel Corp (ACTL.O) surged 31 percent to &&6;20.92 after chipmaker Microsemi Corp (MSCC.O) said it would buy its smaller rival.

GTSI Corp (GTSI.O) tumbled 41 percent to &&6;4.30 after Eyak Technology withdrew a buyout offer.

This week marks the unofficial start of the third-quarter earnings season, with Alcoa Inc (AA.N) due to report on Thursday. Micron Technology Inc (MU.O), PepsiCo Inc (PEP.N) and Monsanto Co (MON.N) are all set to report this week.

(Editing by Jeffrey Benkoe)

S&P flat after data; Microsoft weighs on Nasdaq