Actual finance blog

The St. Louis region is set to have its newest public company debut.

Post Holdings Inc., the branded cereal business unit of Ralcorp Holdings, will be spun off as a separate publicly traded company after markets close Friday. The spinoff was announced last July.

After the close of trading Friday, Post will replace Comstock Resources Inc. in the S&P MidCap 400 index.

Post’s brands include Honey Bunches of Oats, Grape Nuts, Raisin Bran and Pebbles cereals. Post Holdings is based at 2503 South Hanley Road in Brentwood.

Once the separation is completed, Post will trade Monday on the New York Stock Exchange under the “POST” ticker symbol. Bill Stiritz, chairman of Ralcorp, has been named Post’s new chairman and CEO. J. Patrick Mulcahy, Ralcorp’s vice chairman, will serve as chairman of the board at Ralcorp after the spinoff finalizes business card.

In filings with the U.S. Securities and Exchange Commission, Post signaled it will make changes to its marketing and pricing to grow sales and regain market share. Post’s market share in ready-to-eat cereals dropped from 14 percent in 2008 to 12 percent last year, according to a research note issued this week by Alexia Howard, an analyst at Sanford C. Bernstein & Co.

St. Louis-based Ralcorp Ralcorp Holdings acquired the Post cereals business from Kraft Foods in 2008 for $2.6 billion. Ralcorp is spinning off Post to concentrate on its private-label cereals, pasta and other baked goods. After the spinoff, Ralcorp will retain up to a 20 percent ownership stake in Post.

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If Mitt Romney is elected president, he will have to make some tough choices about what to do with his personal fortune.

In order to avoid conflicts of interest and satisfy ethics watchdogs, soon-to-be presidents often sell assets or relinquish control of their investments to a trustee.

Romney, who has spent the better part of a month answering questions about his massive investment portfolio, would be one of the wealthiest presidents in history.

The former Massachusetts governor has a few options.

He could put his investments in a government-approved blind trust, convert some or all of his assets to cash, or possibly take advantage of an obscure tax break for executive branch officials.

Blind trust: Romney is no stranger to the concept of blind trusts.

After becoming governor of Massachusetts, Romney created a trust managed by Boston lawyer Bradford Malt. That’s where most of his assets, estimated to be between $85 and $264 million, are today.

But between federally required disclosure forms and the tax returns released by his campaign, the contents of Romney’s trust are easily accessible and have been widely scrutinized by the media.

It’s now far from blind.

As president, Romney would likely have to dissolve his current trust and create a new one. And this one, approved by the Office of Government Ethics, would require a truly independent trustee.

"Federal ethics guidelines for blind trusts are extremely strict," said Robert Kelner, a partner at Covington & Burling who has advised candidates and appointees on ethics. "Typically they are much stricter than what you find at the state level."

Rich, Gingrich and crazy rich

If Romney establishes a new trust, his communication with the trustee would be extremely limited, and he would not be informed of changes to his portfolio.

"He might learn the overall performance of his portfolio," Kelner said. "But he would not know anything about its particular holdings."

It’s a popular tactic.

Bill Clinton, both Bushes and Ronald Reagan put their money into a blind trust.

President George W. Bush told CNN at the end of his second term that he had "no earthly idea" what had become of his assets.

"I met the trustees eight years ago and I haven’t talked to them since," Bush said.

Unlike his immediate predecessors, Barack Obama does not have a government-approved blind trust.

Most of his assets are invested in U.S. Treasury bonds and bills, mutual funds and education savings plans for his children — hardly the kind of assets that present conflicts of interest.

Establishing blind trusts is not just popular with presidents. Other wealthy executive branch appointees have followed suit — sometimes with a little unease. Hank Paulson, who left the top job at Goldman Sachs to become Treasury Secretary, was one of them.

"Have you heard the joke, how do you make a small fortune?" Paulson quipped in 2009. "Give a large fortune to someone in a blind trust."

For Romney, who made his money by making savvy investments, relinquishing control might be particularly difficult.

"You’re turning your assets over to someone who is essentially a stranger," said Kenneth Gross, a partner at Skadden Arps Slate Meagher & Flom. "I think some people would not be entirely happy with that situation."

The Romney campaign would not elaborate on the candidate’s plans for his wealth, but said in a statement that his "assets will be arranged in a manner that comports with all rules" should he become president.

Move to cash: Perhaps the simplest option would be for Romney to liquidate his holdings.

The Clintons converted their assets to cash in June 2007 as Hillary’s campaign for president entered its final stretch, according to the New York Times.

The family’s holdings had been in a blind trust, but — like Romney — those assets were disclosed in campaign filings required by the Federal Election Commission.

Instead of creating a new blind trust, the Clintons chose to liquidate.

Romney made $42.7 million in 2 years

There is a substantial downside to taking this route. The Clinton’s likely owed huge sums of money in capital gains.

A fire sale of Romney’s assets would likely create a similar tax burden.

It’s also possible Romney could choose to divest — or sell — a targeted group of assets that are likely to cause conflicts.

But that would be difficult considering the breadth of decisions the president makes, and the vast diversification of Romney’s holdings.

"Practically everything the president does could affect individual companies," Kelner said. "Romney might find that difficult to do."

A tax benefit? Members of the executive branch who have to sell specific assets to avoid conflicts of interest are sometimes granted what is called a "certificate of divestiture" by the Office of Government Ethics.

Obtaining the certificate allows appointees to divest while deferring the payment of capital gains, provided they invest the proceeds in an approved asset like a diversified mutual fund or government bond.

The provision is designed to incentivize wealthy individuals to accept posts in the executive branch without forcing them to take a tax hit.

A president has never applied for the tax break, but law experts consulted by CNNMoney said it is conceivable the Office of Government Ethics would grant one to a president with a portfolio like Romney’s.

"It would be unprecedented," Gross said. "But I don’t know why a president wouldn’t be entitled to the same deferral of tax if he felt there was a conflict."

The tax benefit for Romney would be huge.

"Oh my god," said Robert Willens, a tax expert and professor at Columbia Business School. "He’d be right in the sweet spot. This would save him millions or tens of millions." 

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Battered by the strong yen and supply disruptions from Thailand’s floods, Honda said Tuesday that its net earnings in the October-December quarter tumbled 41 percent to 47.6 billion yen ($625 million) and projected a sharply lower full-year profit.

The Japanese automobile and motorcycle maker forecast it would earn 215 billion yen for the fiscal year through March, down nearly 60 percent from the 534 billion yen it earned the previous fiscal year.

Honda had scrapped its earnings forecast in October, when it reported its previous quarterly results, because the flooding in Thailand _ a key Asian production hub for Honda and many Japanese companies _ made the outlook too uncertain.

Honda stopped making cars at its automobile assembly plant in Ayutthaya, north of Bangkok, in October after it was damaged in the worst floods to hit Thailand in 50 years. The company said in a statement that it was making progress on draining the plant of flood water and cleaning up equipment, and that production was expected to resume by the end of March.

The flooding also disrupted the output at many Honda suppliers in Thailand, forcing it to reduce production as far away as the U.S. and Canada. Honda said production in neighboring Asian countries interrupted by the problems in Thailand was expected to return to normal by April.

All told, the problems related to flooding in Thailand have cost the company 260,000 vehicles in lost production worldwide, according to Tomohiro Okada, a company spokesman.

Quarterly sales slid 8 percent during the fiscal third quarter to 1.942 trillion yen.

The strong yen, which erodes Japanese exporters’ foreign earned income when repatriated, also ate into the company’s income. Declines due to unfavorable exchange rates accounted for 33.6 billion yen, or nearly half, of the 73.1 billion yen drop in net income before taxes reported the same quarter a year ago, Okada said.

A bright spot for the company was its motorcycle business, amid strong demand in emerging markets. Motorcycle sales rose 6.3 percent during the quarter to nearly 3.1 million units.

(This version CORRECTS Corrects impact from currencies in paragraph 8, adds lost production of vehicles from Thai flooding in paragraph 6, adds details about growth in motorcycle business)

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French President Nicolas Sarkozy on Monday shrugged off his country’s loss of its prized AAA debt rating, saying the downgrade by rating agency Standard & Poor’s would change nothing.

The comments, his first since S&P lowered its score on France and eight European other countries on Friday, followed a successful auction by France of euro8.6 billion ($10.9 billion) in short-term debt Monday. The yields, the interest rates charged by investors on the debt, fell _ a sign investors still see the country as a good bet.

France won a further small reprieve Monday, when the Moody’s agency confirmed that it would keep its top rating. However, the S&P decision could seriously impair Sarkozy’s bid for re-election this spring.

Sarkozy told reporters he was unconcerned with the opinions of ratings agencies.

“We have to react to this (the downgrade) with calm, by taking a step back,” he said at a news conference with the new Spanish Prime Minister Mariano Rajoy. “At the core, my conviction is that it changes nothing.”

Sarkozy won support from Rajoy for a new European tax on financial transactions being pushed by France and Germany. Rajoy’s center-right government took power last month, and had not previously stated its position on the tax.

The French president said the ratings agencies’ decisions would not affect his policies, though he did acknowledge that France has work to do, saying that its deficits and spending were too high and that its growth was too slow.

He also noted that two of the three major agencies still rate France at triple-A, the highest rating. Fitch confirmed the rating last week. The S&P move was especially brutal for France, one of the world’s biggest economies and a financier of bailouts for smaller, poorer eurozone countries.

There are more government auctions in Europe this week, including longer-term offerings from France on Thursday, so the European debt crisis will never be too far from investors’ minds.

The news conference began combatively when Sarkozy refused to answer a question about whether France’s downgrade would affect its ability to lead Europe out of the crisis and if it had any connection with the meeting between the French, Italian and German leaders scheduled for next week being postponed.

Sarkozy and German Chancellor Angela Merkel have taken the lead in proposing solutions to the crisis and major decisions are often hashed out at their meetings ahead of European summits.

“You don’t have the latest information,” Sarkozy blithely told the reporter, apparently referring to Moody’s decision on Monday. The reporter rephrased the question two more times, but Sarkozy again refused to answer totally free credit score.

Later on, in response to other questions, he confirmed that the three-way summit would take place in February and spoke about the S&P downgrade.

Earlier, Sarkozy met with Spanish King Juan Carlos, who said he’s confident France and Spain would help Europe find a way out of the crisis.

The king said the two nations were “struggling together for the advance of a unified and prosperous Europe in solidarity that confronts the crisis with strength.”

Rajoy’s Socialist predecessor also supported the financial tax championed by Sarkozy, but was ousted from office by Spaniards angry about the country’s hurting economy and high unemployment.

The European Commission has estimated that the tax could raise as much as euro57 billion ($72.2 billion) a year, funds that could be used to help reduce the substantial budget deficits crippling European economies.

For the tax to be successful, however, it needs to be adopted by as many countries as possible. Sarkozy has said it might be enough to enact it among the 17-nation euro countries. Italian Prime Minister Mario Monti prefers applying it across the full 27-nation European Union, but that would be more difficult because of U.K. opposition.

Part of the reason for the tax would be to raise funds at a time when governments are struggling with high debts.

Moody’s cited France’s economic strength as a reason for affirming its top rating but said bleak growth prospects in France and the region present “risks to the French government’s fiscal consolidation plans.”

“France, like other eurozone sovereigns, may face a number of challenges in the coming months. The need to provide additional support to other European sovereigns or to its own banking system cannot be excluded,” Moody’s warned.

Moody’s said Monday it “will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU.”

Sarkozy’s challengers for the presidency have seized on the S&P downgrade as evidence that his policies are wrong-headed and ineffective.

It will be a bruising election battle for Sarkozy, a dynamic leader who has a strong international profile but is widely disliked at home. Leftists say he has coddled the rich, while many of those who supported him in his 2007 campaign say he hasn’t fulfilled his promises.

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If Republican primary voters are inclined to reward candidates who have big, bold, game-changing plans for the tax code, Mitt Romney might be in trouble.

Compared to the ideas pushed by other White House hopefuls this cycle — particularly Newt Gingrich — Romney’s plan is just not that aggressive.

Of course, Romney’s plan is still firmly rooted in mainstream Republican thought, and that means big tax cuts and a corresponding reduction in federal revenue.

If the Bush tax cuts remain in place — something Romney favors — the federal government would bring in $180 billion less in 2015 under Romney’s plan, according to an analysis conducted by the Tax Policy Center, a group of tax experts who have already examined the plans of Gingrich and Rick Perry.

The rich would see the most benefit, with individuals in the top 1% receiving a tax cut of more than $80,000, while the average person would get a little more than $1,000 break.

"In many ways, Romney’s tax plank is a fairly mainstream Republican offering," Howard Gleckman of TPC said in a blog post. The plan, he said, contains "no major tax reform."

Romney would leave marginal tax rates on income at their current levels, while eliminating taxes on interest, dividends and capital gains for taxpayers who make less than $200,000.

The Romney plan also calls for the elimination of the estate tax, and a reduction in the tax rate paid by corporations from 35% to 25%.

Other candidates have gone further.

"It’s timid, at least by standards of Republican primary plans," said Daniel Mitchell, a senior fellow at the Cato Institute. "From the perspective of the average primary voter, he is probably just trimming around the edges."

Romney has not proposed a flat tax like Gingrich or Perry, and the front-runner has also shied away from the retail sales tax that was the centerpiece of Herman Cain’s now famous 9-9-9 plan personal loan for poor credit.

The Tax Foundation, a think tank that generally advocates for lower tax rates, has said that Romney’s plan for the individual code "really takes no step toward fundamental reform."

In fact, Romney is the lone Republican candidate who has not proposed modifying current tax brackets or substantially reducing income tax rates. Instead, he has articulated only a vague promise to pursue a future plan with "lower, flatter rates on a broader base."

Even President Obama’s fiscal commission, which won plaudits from both sides of the aisle, planned to lower individual rates across the board while eliminating special deductions and loopholes. Under that plan, the top rate paid by individuals would have dropped from 35% to 23%.

On corporate taxes, Romney favors higher rates than his competitors. Romney’s 25% proposed rate carries a less aggressive reduction than that of Gingrich (12.5%), Perry (20%), Rick Santorum (17.5%) or Ron Paul (15%).

America’s Choice 2012

Andrea Saul, a spokeswoman for the campaign, said Romney’s economic policies are a "blueprint for governing that includes dramatic spending cuts to reduce the deficit and pro-growth tax policies."

Grover Norquist, head of the anti-tax advocacy group Americans for Tax Reform, said late last year that Romney’s plan was "fine" but noted that he was falling behind his rivals.

"I think Romney put his plan in very early, Norquist said on Meet the Press, and he "needs to update it to catch up with where the debate’s going,"

But after capturing the Iowa caucuses, Romney might not need to change or explain his tax policies in more detail.

"If you’re the front-runner, then there are a lot of incentives to just run out the clock," Mitchell said. 

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British police and journalists agree that their cozy ties allowed illegal phone hacking to go on too long, an independent investigator said Wednesday.

Elizabeth Filkin, a former Parliamentary standards chief, said a culture of confidential briefings, poor guidance from senior staff too ready to accept reporters’ hospitality and a bias toward some tabloids must be overhauled by London police.

Police officers should be wary of journalists who offer alcoholic drinks, make flirty advances or tempt potential sources into “late-night carousing,” Filkin warned.

“Alcohol is fraught issue … drinking loosens tongues, so common sense is needed,” her guidelines state, warning that “some journalists do not practice abstinence.”

Witnesses from both sides had told her inquiry the issue lay behind the failure of early police investigations to uncover the true extent of media malpractice.

An initial police investigation led to the jailing of a reporter from the now-defunct News of The World tabloid and a private investigator in 2007, but failed to unearth the widespread interception of cell phone voice mail messages of celebrities, sporting stars, legislators and even crime victims.

Since then, London police have identified 5,795 potential phone hacking victims and launched three new inquiries into alleged criminality by the press.

Filkin’s inquiry said relationships between the police, particularly senior officers, and the press had “compromised the capacity of both the police and the media to scrutinize the activities of the other.”

However Filkin, who was appointed by London’s Metropolitan Police to review their relationship with the press, said it would be down to a new police inquiry, not her, to say how badly that had hampered inquiries into phone hacking.

“I don’t know whether it inhibited that inquiry,” Filkin said paydayloans. “What I heard from a large number of people, both journalists and people who work at the Met, was that they feared it had.”

“That was the greatest concern for me from what I heard,” she said, presenting her proposed new guidelines to officers on how to handle the press.

Since the extent of tabloid phone hacking was exposed last summer, more than a dozen News of the World journalists, including former editor Andy Coulson, have been arrested.

The scandal also forced the resignations of London’s top police officer, the Metropolitan Police commissioner Paul Stephenson, and assistant commissioner John Yates.

Stephenson quit in July over his links to Neil Wallis, a former News of the World executive turned PR consultant. Yates resigned amid criticism of his handling of initial investigation.

“There will be no more secret conversations, there will be no more improper contacts,” said Stephenson’s successor as London’s top police officer, Bernard Hogan-Howe.

Hogan-Howe pledged to take up Filkin’s recommendations in full, including a proposal that officers should in the future record every contact they have with reporters for potential inspection.

Filkin did not discuss in detail allegations that Britain’s press paid London police for information, but said claims from senior officers that only a few people were involved conflicted with accounts she had received from journalists.

Eight people, including a serving police officer and a reporter working for The Sun tabloid, have been arrested as part of an inquiry into the alleged bribes, though no one has been charged.

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+%3Cp%3EDeserted+by+many+of+his+fellow+Republicans%2C+U.S.+House+Speaker+John+Boehner+surrendered+to+attacks+from+President+Barack+Obama+and+congressional+Democrats+and+agreed+to+a+two-month+extension+of+a+payroll+tax+cut+that+he+derided+hours+earlier.+%3C%2Fp%3E+%3Cp%3EThe+decision+kicks+the+fight+over+extending+the+tax+cut+for+160+million+U.S.+workers+into+early+next+year+without+resolving+deep+divides+over+how+to+cover+the+cost+through+2012.+%3C%2Fp%3E+%3Cp%3EDemocrats+are+focused+on+imposing+a+new+tax+on+income+exceeding+%241+million+while+Republicans+want+to+cut+the+federal+work+force+and+freeze+pay+for+government+workers.+Republicans+also+want+to+attach+policies+to+a+payroll+tax+cut+extension+–+opposed+by+Democrats+–+such+as+a+rewrite+of+the+unemployment+system+or+weaker+rules+for+industrial+emissions.+%3C%2Fp%3E+%3Cp%3EThe+deal+that+Boehner+and+Senate+Majority+Leader+Harry+Reid%2C+a+Nevada+Democrat%2C+agreed+to+yesterday+includes+language+that+calls+on+Obama+to+accelerate+approval+of+the+Keystone+XL+Canadian+oil+pipeline.+Both+chambers+plan+to+pass+the+tax+cut+deal+today+by+unanimous+consent%2C+which+means+most+lawmakers+won%92t+have+to+return+to+Washington+over+the+holiday+recess.+%3C%2Fp%3E+%3Cp%3EBoehner+could+be+in+a+weaker+position+entering+the+2012+negotiations+after+presiding+over+the+tumult+of+recent+days%2C+in+which+Senate+Republicans+opposed+Boehner%92s+stance+and+some+House+Republicans+had+begun+to+defect+as+well.+The+talks+next+year+will+unfold+in+the+months+ahead+of+a+presidential+election%2C+making+Boehner%92s+task+more+difficult.+%3C%2Fp%3E+No+Time+for+Celebration++%3Cp%3E%93I+don%92t+think+it%92s+a+time+for+celebration%2C%94+the+Ohio+Republican+told+reporters+yesterday.+%93Our+economy+is+struggling.+We%92ve+got+a+lot+of+work+ahead+of+us+in+the+coming+year.%94+%3C%2Fp%3E+%3Cp%3EAfter+days+of+relentless+attacks+from+Democrats+and+negative+headlines+in+the+press%2C+some+Republicans+were+pleased+to+see+Boehner+cut+his+losses.+%3C%2Fp%3E+%3Cp%3E%93The+great+danger+would+have+been+if+we+continued%2C%94+said+Representative+Tom+Cole+of+Oklahoma.+%93We+made+our+points.+We%92ve+gotten+some+modifications.%94+%3C%2Fp%3E+%3Cp%3EThe+pressure+for+Boehner+to+cut+a+deal+was+building+for+days.+Republican+Senators+Olympia+Snowe+of+Maine%2C+Scott+Brown+of+Massachusetts%2C+John+McCain+of+Arizona+and+Bob+Corker+of+Tennessee%2C+criticized+Boehner%92s+move+to+reject+the+bipartisan+two-month+extension+after+it+passed+the+Senate+on+Dec.+17%2C+just+two+weeks+before+the+tax+cut+was+set+to+expire.+%3C%2Fp%3E+Isolation+in+Opposition++%3Cp%3EBoehner+became+more+isolated+in+his+opposition+to+the+Senate-passed+bipartisan+bill+after+the+top+Republican+in+the+Senate%2C+Mitch+McConnell+of+Kentucky%2C+issued+a+statement+before+lunchtime+yesterday+urging+the+House+to+pass+the+short-term+measure.+%3C%2Fp%3E+%3Cp%3EMcConnell+said+the+House+should+pass+a+bill+that+averts+%93any+disruption+in+the+payroll+tax+holiday+or+other+expiring+provisions+and+allows+Congress+to+work+on+a+solution+for+the+longer+extensions.%94+%3C%2Fp%3E+%3Cp%3EThat+statement+%93sealed+the+deal%94+in+ending+the+standoff%2C+said+Brian+Gardner%2C+the+senior+vice+president+for+Washington+research+at+KBW+Inc.+%3C%2Fp%3E+%3Cp%3EBoehner+held+a+conference+call+with+Republicans+yesterday.+On+a+similar+conference+call+following+the+Dec.+17+Senate+passage+of+the+two-month+extension%2C+rank-and-file+Republicans+pressed+Boehner+to+oppose+the+measure.+They+did+so+on+Dec.+20+as+the+House+rejected+the+Senate+bill+229-193.+%3C%2Fp%3E+Different+Tone++%3Cp%3EHouse+Republicans+who+participated+in+yesterday%92s+call+said+the+tone+was+much+different+than+after+the+Senate+vote.+%3C%2Fp%3E+%3Cp%3E%93It+wasn%92t+truly+a+conference+call%2C%94+Representative+Jack+Kingston%2C+a+Georgia+Republican%2C+said.+%93It+wasn%92t+a+solicitation+of+opinion.%94+%3C%2Fp%3E+%3Cp%3EThough+most+House+Republicans+still+want+a+yearlong+deal%2C+Kingston+said+that+it+was+time+for+the+party+to+move+forward.+%3C%2Fp%3E+%3Cp%3E%93This+takes+the+whole+thing+off+the+front+page+and+that%92s+a+good+thing%2C%94+he+said.+%3C%2Fp%3E+%3Cp%3ESome+House+Republicans+said+yesterday+they+don%92t+think+Boehner%92s+agreement+to+pass+the+two-month+extension+puts+him+in+immediate+danger+of+losing+the+support+of+the+Republican+majority+he+leads.+%3C%2Fp%3E+%3Cp%3ERepresentative+Sean+Duffy%2C+a+freshman+Republican+from+Wisconsin%2C+said+Boehner+was+trying+to+reflect+the+views+of+his+colleagues.+Duffy+said+he+is+pleased+that+a+tax+increase+will+be+avoided+in+January+and+doesn%92t+think+the+saga+would+hurt+Republicans+in+the+2012+election.+%3C%2Fp%3E+%3Cp%3E%93I+think+the+American+public+will+look+at+the+economy+and+job+growth+and+the+lack+thereof%2C%94+Duffy+said.+%93I+don%92t+think+this+is+an+indicator+of+what+will+happen+next+year.+%3C%2Fp%3E+Provisions+Extended++%3Cp%3EWithout+congressional+action%2C+the+payroll+tax+for+employees+would+rise+in+January+to+6.2+percent+from+the+current+4.2+percent.+The+tax+funds+Social+Security.+The+deal+also+averts+an+end+to+emergency+unemployment+benefits+set+to+expire+on+Dec.+31+and+assures+doctors+their+Medicare+reimbursement+rates+won%92t+be+reduced+starting+in+January.+%3C%2Fp%3E+%3Cp%3EMichael+Feroli%2C+%3Ca+topic_url%3D%22http%3A%2F%2Ftopics.bloomberg.com%2Fjpmorgan-chase-%26amp%3B-co%2F%22+href%3D%22http%3A%2F%2Fwww.bloomberg.com%2Fapps%2Fquote%3Fticker%3DJPM%3AUS%22+density%3D%22sparse%22+title%3D%22Get+Quote%22+ticker%3D%22JPM%3AUS%22+class%3D%22web_ticker%22%3EJPMorgan+Chase+%26amp%3B+Co.+%28JPM%29%92s+New+York-based+chief+U.S.+economist%2C+said+economic+growth+would+be+reduced+by+0.5+percentage+points+in+the+first+quarter+and+1.5+percentage+points+in+the+second+quarter+of+2012+if+the+payroll+tax+cut+and+expanded+unemployment+benefits+weren%92t+continued.+If+they+are+extended+for+the+year%2C+he+expects+growth+of+2.5+percent+in+the+first+half+of+the+year%2C+he+said+in+a+Dec.+16+note+to+clients.+%3C%2Fp%3E+%3Cp%3EHouse+Ways+and+Means+Committee+Chairman+Dave+Camp%2C+a+Michigan+Republican%2C+will+introduce+the+legislation+in+the+House+today+that+will+implement+the+agreement.+%3C%2Fp%3E+Unanimous+Consent++%3Cp%3EThe+measure+will+be+brought+up+in+the+House+under+unanimous+consent+to+avoid+requiring+lawmakers+to+return+and+could+be+cleared+in+the+Senate+later+in+the+day+using+the+same+process.+%3C%2Fp%3E+%3Cp%3EThe+legislation+includes+one+difference+from+the+version+passed+by+the+Senate.+A+yearlong+payroll+tax+cut+extension+would+apply+to+the+first+%24110%2C100+in+wages.+To+prevent+someone+from+shifting+all+their+income+into+the+first+two+months+of+the+year%2C+the+Senate+bill+limited+the+tax+break+to+the+first+%2418%2C350+a+worker+earns.+%3C%2Fp%3E+%3Cp%3ERepublicans+changed+the+bill+to+apply+the+tax+cut+to+the+full+%24110%2C100+in+wages%2C+according+to+information+provided+by+Camp%92s+office.+That+makes+it+easier+for+payroll+processors+to+continue+the+tax+cut+if+it+is+extended+beyond+February.+%3C%2Fp%3E+%3Cp%3EWorkers+who+earn+more+than+%2418%2C350+during+the+first+two+months+of+the+year+will+pay+an+additional+2+percentage+point+tax+when+they+file+their+returns+in+2013.+%3C%2Fp%3E+%3Cp%3EThe+bill+is+HR+3630.+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2011-12-22%2Fhouse-s-boehner-senate-s-reid-said-to-agree-on-u-s-payroll-tax-cut-plan.html%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+

Canadian Gold and iron producer Eldorado Gold Corp. said Sunday it will buy European Goldfields Ltd. in a deal worth about $2.4 billion, increasing its ability to produce gold.

The Vancouver, British Columbia, company said its offer values each European Goldfields share at 13.08 Canadian dollars ($12.59), based on Eldorado’s closing stock price on the Toronto Stock Exchange Friday.

That comes to 2.5 billion Canadian dollars. It’s a 10 percent premium to European Goldfields’ closing price on the Toronto Stock Exchange Friday.

Eldorado said the deal will create a company with a market capitalization of about 11 billion Canadian dollars ($10.59 billion) and help diversify production. It expects to increase annual production to reach more than 1.5 million ounces of gold by 2015. In October, the company said it expected to produce 650,000 ounces of gold this year.

Eldorado operates in China, Turkey, Brazil and Greece. It has six active mines and other projects in development.

European Goldfields, which is based in Whitehorse, Yukon, operates a mine in Greece and is developing projects in both Greece and Romania pay day loans. It said it has gold reserves of 10 million ounces within the European Union. It is also a partner of Aktor SA, the largest construction company in Greece.

“Integration of European Goldfields’ business with our own will provide Eldorado with the dominant gold mining business in the Aegean Region,” said Eldorado CEO Paul Wright in a statement Sunday. He added that European Goldfields’ partnership with Aktor will help the combined company safely develop operations in Greece.

Under the deal proposed Sunday, European Goldfields stockholders will receive 0.85 Eldorado share and a fraction of a Canadian cent for each European Goldfields share.

The acquisition requires approval from a majority of Eldorado shareholders and two-thirds of European Goldfields shareholders. Shareholders from both companies will meet in February to vote on the deal.

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Lowe’s is planning to stick by its decision to yank its ads from a reality TV show about American Muslims despite the growing opposition the home improvement chain is facing over the move.

California Sen. Ted Lieu put a statement out on Sunday that he is considering calling for a boycott of Lowe’s Cos., sparking criticism of the chain from both inside and outside of the Muslim community.

On social media web site Twitter, actor Kal Penn is began directing people to a petition on signon.org in support of the TLC cable network show, “All-American Muslim.” By Monday afternoon, there were about 9,200 signatures.

On Monday, U.S. Representative Keith Ellison of Minnesota, who is Muslim, released a statement condemning Lowe’s for choosing “to uphold the beliefs of a fringe hate group and not the creed of The First Amendment.”

And Democratic state Rep. Rashida Tlaib of Detroit, the first Muslim elected to the Michigan Legislature, voiced her concerns directly with the company. She wrote a letter to Lowe’s CEO Robert Niblock.

“I told them I was extremely disappointed that you give credibility to these hate groups,” Tlaib said. “People of Muslim faith are being attacked. It’s disappointing, disheartening.”

Meanwhile, Lowe’s, based in Mooresville, N.C., said it stands by its Sunday statement that it pulled the ads after the show became a “lightning rod for people to voice complaints from a variety of perspectives - political, social and otherwise.” The company also said that “dozens” of other advertisers pulled their advertising from the show.

“All-American Muslim” premiered last month and chronicles the lives of five families who live in and near Dearborn, Mich., a Detroit suburb with a large Muslim and Arab-American population. TLC spokeswoman Laurie Goldberg said “All-American Muslim,” which airs on Mondays on TLC and ends its first season on Jan. 8, has garnered a little over a million viewers per week.

“We stand behind the show All American Muslim and we’re happy the show has strong advertising support,” she said.

Lowe’s stopped running commercials during “All-American Muslim” after a conservative group known as the Florida Family Association e-mailed companies to ask them to stop advertising on the show. The group said the program is “propaganda that riskily hides the Islamic agenda’s clear and present danger to American liberties and traditional values.”

Florida Family Association, based in Tampa, Fla., said that more than 60 advertisers that it e-mailed, from Amazon to McDonalds, have also stopped advertising on the show. But so far, Lowe’s is the only major company to confirm that it pulled ads from the show.

Amazon and McDonald’s and other advertisers did not immediately return calls seeking comment.

Meanwhile, Atlanta-based Home Depot, which was cited by Florida Family Association as a company that stopped advertising, said Monday it never intended to run any ads during the show. But spokesman Stephen Holmes said one commercial ran “inadvertently and without our knowledge.”

The controversy highlights the fine line companies must walk when they select shows to advertise on.

Branding expert Laura Ries said Lowe’s made two mistakes. The first was advertising during a show that could be construed as controversial. The second was pulling advertising too quickly.

“For a big national brand like Lowe’s, they’ve always got to be incredibly careful when advertising during any show that could be deemed controversial,” she said. “Will it seriously damage the brand in the long term? Probably not. But it is a serious punch in the stomach.”

Overall, analysts said the furor is unlikely to damage Lowe’s brand in the long term.

“For a company that generates $50 billion in annual revenue, I don’t view this as something that will have a meaningful impact,” said Morningstar analyst Peter Wahlstrom. “I’m hopeful this blows over and I’m certain management is as well.”

Still, some worry Lowe’s ad flap could do damage to Muslims living in the Metro Detroit area.

Florida pastor Terry Jones held an anti-Islam rally earlier this year outside Dearborn City Hall after being barred from protesting outside a Muslim mosque in the city. A burning of the Quran in March at Jones’ church in Florida led to a series of violent protests in Afghanistan that killed more than a dozen people.

“Metro Detroit and Dearborn have been the focal point of a number of anti-Muslim movements,” said Dawud Walid, executive director of Council on American-Islamic Relations’ Michigan chapter. “There are organized forces in our society that want to marginalize American Muslims to the point where they don’t want to see any portrayals of Muslims that regular Americans can connect to.”

—

Corey Williams in Detroit, Rachel Zoll in New York and Mitch Stacy in Tampa, Fla., contributed to this report.

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Greek lawmakers have approved next year’s austerity budget, extending tough spending cuts that have sparked a series of often violent protests.

The 2012 budget passed early Wednesday foresees a fourth year of recession, but also projects a modest primary surplus _ a surplus excluding interest payments on debt _ for the first time in years.

Debt-crippled Greece’s financial woes have roiled the euro, with Europe’s single currency facing its largest crisis since it went into circulation in 2002.

The country has been relying for financial survival on billions of euros (dollars) in rescue loans from other eurozone countries and the International Monetary Fund since May 2010. In return, Greece cut pensions and salaries while repeatedly hiking taxes to reduce its bloated budget deficits.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

ATHENS, Greece (AP) _ Greece’s lawmakers were set Tuesday to pass next year’s austerity budget, extending tough spending cuts measures that have already left Greeks struggling as the country tries to slash its debts and pull itself out of a severe recession.

With three parties, including the country’s majority socialists and their rival conservatives, involved in Greece’s new coalition government, the budget is expected to pass with an overwhelming majority in a midnight vote.

The end of the budget debate coincided with the third anniversary of a fatal police shooting of a teenager in central Athens, and as lawmakers spoke clashes broke out in front of Parliament between hundreds of anarchists and riot police during a commemorative march.

Masked youths hurled stones, bottles and firebombs at police, who responded with volleys of tear gas and stun grenades on Tuesday night. Earlier in the day, violence also broke out on the fringes of a separate march by about 2,000 students who clashed with riot police outside Parliament.

Speaking inside the building during the debate, conservative party leader Antonis Samaras said his objections to many of the austerity measures already passed remained, but that he was backing the budget as the priority now was to reduce the debt.

“We are voting today for the budget, firstly because we we are giving immediate priority to to ensuring the viability of Greek debt and to maintain the the targets of fiscal adjustment,” he said.

Samaras was a vocal critic of the austerity measures over the past two years, insisting that increased taxation in particular was the wrong method and that taxes should be cut in order to stimulate the economy.

The conservative leader said the crisis had also shown up problems within the eurozone.

“It has been proved that repeated efforts until now to stabilize the euro have failed,” he said. “And that the euro crisis is not only due to Greece’s bad fiscal situation, but also to the eurozone’s inability to deal with its problems.”

The 2012 budget foresees a fourth year of recession, although it also projects a primary surplus _ a surplus excluding interest payments on debt _ of 1.1 percent of gross domestic product.

Greece’s debt troubles have roiled the euro, with Europe’s single currency facing its largest crisis since it went into circulation in 2002. The Standard & Poor’s ratings agency placed 15 of the 17 eurozone countries on notice for possible downgrades. The only two it left out were Cyprus, whose bonds have near-junk status, and Greece, whose low ratings suggest it is likely to default on its debts soon anyway.

On Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy urged changes to the EU treaty that would centralize decision-making on spending and borrowing for the eurozone. Tighter political and economic coordination among euro countries is seen as a precursor to further financial aid from the European Central Bank, the International Monetary Fund, or some combination.

Greece has been relying for financial survival on billions of euros (dollars) in rescue loans from other eurozone countries and the International Monetary Fund since May 2010. In return for the first bailout, the country imposed a series of harsh austerity measures, including salary and pension cuts and repeated rounds of tax hikes that have left the country mired in a deep recession.

Despite the measures, the government found itself persistently missing the fiscal targets set out in its first bailout. A second rescue package worth euro130 billion ($175 billion) was put together in October, and includes plans for private creditors to write off 50 percent of their Greek bonds, potentially cutting the country’s debt by euro100 billion. Negotiations on the details of the deal are expected to extend into the new year.

A sudden announcement last month by then prime minister George Papandreou that he would put the hard-fought deal to a referendum triggered a political crisis that forced him to step down and a coalition government be formed. A former central banker, Lucas Papademos, has been appointed to lead the interim government until early elections, tentatively set for February.

The crisis has taken its toll on the popularity of Greece’s main political parties, though Papandreou’s Socialists have taken the severest hit. Just two years after a landslide election victory with 44 percent of the vote, they are polled at enjoying just 15.3 percent support and trail the conservatives who have 21.5 percent, according to a GPO survey for Mega television.

The poll of 1,400 adults was conducted between Nov. 30 and Dec. 5. No margin of error was given.

According to the poll, the vast majority of Greeks _ 80.7 percent _ believe the country’s financial situation will deteriorate further in 2012, while 79.3 percent believe Greece’s rescue deal with the EU and IMF failed to resolve the debt crisis.

____

Derek Gatopoulos and Demetris Nellas in Athens contributed.

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