World financial news

French bank Credit Agricole SA reported a euro3.07 billion ($4.06 billion) net loss in the fourth quarter on Thursday, as an intensifying European debt crisis drove down the value of its Greek bonds and shaved billions off the bank’s bottom line.

Credit Agricole _ hit by the Greek debt crisis largely through its ownership of Greek bank Emporiki _ said fourth-quarter net profit plunged nearly tenfold from a loss of euro328 million in the last quarter of 2010. It also posted a net loss for 2011 of euro1.47 billion.

Investors dumped the bank’s stock on the news, driving the share price down nearly 4 percent in early afternoon trading Thursday.

As part of an effort to drastically reduce Greece’s unsustainable debt burden and avoid a chaotic default on the country’s bonds in March, private bondholders are being asked to take substantial losses on their Greek bonds. They hope that if Greece’s finances can be righted, they can draw a line under Europe’s debt crisis, which has threatened to drag down bigger economies like Italy.

In anticipation of the losses on Greek debt, European banks have been writing down the value of those bonds. BNP Paribas and Societe Generale _ French banks that also have substantial Greek holdings _ saw their fourth-quarter profits plummet as they discounted their Greek bonds by 75 percent, roughly in line with what European leaders are asking of private institutions.

Credit Agricole has now taken similar measures. The bank said the overall net loss from Greece _ including losses at Emporiki and the writing down of Greek debt _ was euro2.38 billion for 2011.

Credit Agricole said it was also reducing the amount of money it lends to Emporiki.

However the bank’s problems go beyond Greece. Credit Agriocle said a wide-range of factors had dragged down its bottom line, including “the slowdown in the European economies, the downgrades in European sovereign debt ratings, a particularly difficult situation in Greece and tensions in the financial markets.”

Banks across Europe are also facing European Banking Authority requirements that they keep more funds in case of further market turmoil and are struggling to get the overnight loans they use to fund day-to-day operations on fears that one of them could collapse.

While the European Central Bank has stepped in to offer unlimited funding to banks, Credit Agricole said it was reducing its exposure to U.S. dollar denominated debt which is becoming increasingly expensive for some European banks as U.S. banks pull back on loans.

Despite the large losses, Jean-Paul Chifflet, chief executive of the bank, still called the results satisfactory, underscoring that the bank was now better positioned to operate in the tough economic times, noting in particular it had trimmed its investment banking division, where net income plunged 27 percent in 2011. Net income at its French retail banks, by contrast, was up more than 5 percent.

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India

Prime Minister Mario Monti

U.K. manufacturing (PMITMUK) shrank less than economists forecast in December as demand increased in Germany and China.

A gauge of factory output based on a survey by Markit Economics and the Chartered Institute of Purchasing and Supply rose to 49.6 from a revised 47.7 in November, the groups said in an e-mailed statement today. The median forecast of 19 economists in a Bloomberg News survey was for a drop to 47.3 from an initially reported 47.6 in November. A level below 50 indicates contraction.

The sovereign debt turmoil in Europe, the U.K.

Imagine this: You open your eyes, and find yourself standing in front of a tall, lean fellow. He has a long white beard, and wears a long white robe.

Big Pearly Gates loom up behind him. It’s St. Peter, and he looks ticked off.

He’s sitting at a desk with a big book open to a page with your name on it. It’s time for your final performance appraisal.

Pete is a sourpuss. “Well,” he says, fingering a page. “I see you cheated on your eighth-grade English test. And that was a very nasty thing you did to Mary Murphy’s pigtail.”

“Uh, I was just a kid and …”

“Ahem! That’s enough out of you,” gruffs Pete. “Now moving on to your adulthood. I see you were in church all of twice last year. Couldn’t drag your sorry carcass out of bed, huh? And you were chintzy on the United Way contribution.”

You’re sweating. It’s getting warm.

“Now, let us review your investment portfolio,” says old Pete. “What’s this? Altria? Isn’t that a tobacco stock? And here’s a whiskey stock. And Playboy Enterprises! Great balls of fire!”

St. Peter raises his eyebrows and pins you with a stare.

“Well, just how much money did you make from sin?” asks the saint.

At this point, you’re doing a little dance. The ground under your toes is getting very, very hot.

OK, wake up now.

A dream like that might get you thinking about socially responsible investing. There are about 250 mutual funds that promise to ally you with the angels. They screen out companies engaged in vices, war, pollution and workplace meanness while investing in companies that are green, peaceful, socially sensitive and sweet to employees. If you need some quick salve for your guilty conscience, there you go.

The nice thing is that you can feel all smug and socially superior without losing investment return. There have been lots of studies on socially sensitive fund performance, and they’ve generally concluded that social screens have little effect on investment return over the long haul, says David Kathman, analyst for Morningstar, the investment analysis firm.

Over shorter periods, the screens can both help and hurt. For instance, take the Amana Income fund. It invests according to Islamic principles, which means avoiding banks that charge interest. That helped the fund a lot in 2008, when the banking system nearly collapsed. It hurt in 2009 and 2010 when banks bounced back somewhat.

The Domini Social Equity fund screens for environmental behavior and good treatment of workers overnight pay day loans. During the 1990s, that moved its investments away from dirty industries toward technology companies where workers brought dogs to work and played foosball in the office.

That helped Domini shine in the late 1990s, while the tech bubble was inflating, and pulled down returns when the bubble popped.

“It tends to even out,” says Kathman.

That gets us to another thing about such funds. They vary in what they consider responsible. Some lean toward religious principles, others favor the environment. Some ban alcohol stocks. Others will tipple away. Defense stocks? Nuclear power? OK with one fund, not another.

You can find a handy guide to such funds, with performance returns and social screens, at ussif.org/resources/mfpc.

It’s harder to determine whether social investing does anything to change society. In theory, the movement would switch capital away from disfavored companies and toward favored ones. As the shunned companies’ stock price falls, management would change its behavior. Rewarded companies would get even nicer.

But are there enough bleeding hearts to swing a stock price? The U.S. Social Investment Forum, the movement’s trade group, claims heavy clout: $3.07 trillion out of $25.2 trillion in the U.S. investment marketplace is run in a socially conscious way, the group says.

Of course, its definition is pretty broad. It includes mutual funds that are perfectly happy to own a sin stock or a polluter, as long as they can hector management through shareholder proposals and the like. Investors qualify if they deposit money in banks with good community lending records.

With so many different social agendas, influence gets diluted. In fact, there’s some academic evidence that socially shunned stocks do a little better than others. Socially blessed stocks do a little better, too.

Perhaps the answer lies in observing St. Louis. The movement has been around for a couple of decades now, and you can still buy a pack of Camels. Boeing keeps churning out fighter jets. Ameren keeps burning coal, and we’re still a town that loves beer.

Socially conscious investing may get you points with St. Peter. But the CEOs of the world don’t seem to care much.

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+%3Cp%3E+Consumer+prices+were+flat+in+November+as+Americans+paid+less+for+cars+and+gasoline%2C+a+further+sign+of+a+cooldown+in+inflation+that+could+give+the+Federal+Reserve+more+room+to+help+a+still+weak+economy.%3C%2Fp%3E+%3Cp%3EThe+Labor+Department+said+on+Friday+the+Consumer+Price+Index+was+unchanged+last+month.+Economists+had+expected+an+increase+of+0.1+percent.%3C%2Fp%3E+%3Cp%3EPrices+spiked+earlier+in+the+year%2C+but+the+report+showed+the+trend+has+shifted.+Over+the+past+12+months%2C+prices+have+risen+3.4+percent.+That+marked+a+second+monthly+decline+from+a+three-year+high+in+September.%3C%2Fp%3E+%3Cp%3EThe+report+%22leaves+the+Fed+ample+cover+for+any+additional+monetary+policy+accommodation+they+may+see+warranted+in+the+New+Year%2C%22+said+Ian+Lyngen%2C+a+bond+strategist+at+CRT+Capital+Group+in+Stamford%2C+Connecticut.%3C%2Fp%3E+%3Cp%3EStill%2C+some+of+the+data+could+give+pause+to+policymakers+at+the+central+bank.%3C%2Fp%3E+%3Cp%3EOutside+food+and+energy%2C+prices+climbed+a+faster-than-expected+0.2+percent.+These+so-called+core+prices+rose+2.2+percent+in+the+12+months+through+November%2C+up+from+2.1+percent+in+October.%3C%2Fp%3E+%3Cp%3E%22Core+inflation+…+is+a+bit+more+persistent+than+what+some+people+had+expected%2C%22+said+Jeremy+Lawson%2C+an+economist+at+BNP+Paribas+in+New+York.%3C%2Fp%3E+%3Cp%3EEconomists+polled+by+Reuters+this+week+saw+inflation+slowing+to+2.6+percent+during+the+first+quarter+of+next+year%2C+which+could+help+convince+the+Fed+to+do+more+to+bring+down+the+country%27s+8.6+percent+unemployment+rate.%3C%2Fp%3E+%3Cp%3EPrices+for+U.S.+government+debt+rose+slightly+on+Friday+as+investors+saw+the+data+opening+the+door+a+bit+wider+to+Fed+stimulus.+U.S.+stocks+rose+and+the+dollar+fell+against+the+euro+as+investors+remained+on+edge+over+the+euro+zone%27s+debt+crisis.%3C%2Fp%3E+%3Cp%3EThe+U.S.+recovery+has+picked+up+momentum+over+the+past+few+months%2C+but+the+Fed+on+Tuesday+warned+about+turmoil+in+financial+markets+abroad+and+it+kept+the+option+of+further+monetary+action+on+the+table+%3Ca+href%3D%22http%3A%2F%2Fcash-advance-nofax.com%22%3Ecash+advance+to+savings+account%3C%2Fa%3E%3C%21–+.+–%3E.%3C%2Fp%3E+%3Cp%3EFED+EASE+STILL+IN+PLAY%3C%2Fp%3E+%3Cp%3EIn+an+appearance+before+Congress+on+Friday%2C+New+York+Federal+Reserve+Bank+President+William+Dudley+warned+that+a+worsening+of+Europe%27s+sovereign+debt+crisis+could+hit+U.S.+banks%2C+potentially+tightening+credit+for+households+and+businesses.%3C%2Fp%3E+%3Cp%3E%22Europe%27s+problems+are+a+serious+risk+for+the+U.S.+economic+outlook%2C%22+he+said.%3C%2Fp%3E+%3Cp%3EIn+recent+months%2C+cooling+gasoline+prices+have+left+more+money+for+consumers+to+spend+on+other+things%2C+helping+the+economy+gain+some+steam.+In+November+alone%2C+gasoline+prices+fell+2.4+percent.%3C%2Fp%3E+%3Cp%3EThe+effects+of+Japan%27s+earthquake+disaster+in+March%2C+which+disrupted+global+supply+chains+and+pushed+auto+prices+higher+earlier+in+the+year%2C+are+also+subsiding.+Prices+for+new+vehicles+fell+0.3+percent+in+November.%3C%2Fp%3E+%3Cp%3EPrices+for+food+rose+0.1+percent.+Within+the+core+index%2C+prices+for+apparel+jumped+0.6+percent+%2C+but+the+increase+in+the+department%27s+main+gauge+of+homeownership+costs+cooled+to+0.1+percent+from+0.2+percent+in+October.%3C%2Fp%3E+%3Cp%3EMany+economists+have+said+the+Fed+might+try+to+give+the+economy+a+bit+of+help+at+a+meeting+on+January+24-25+by+laying+out+forecasts+for+interest+rates+that+could+underscore+its+willingness+to+keep+borrowing+costs+ultra-low+for+a+prolonged+period.%3C%2Fp%3E+%3Cp%3EThe+U.S.+central+bank+has+held+overnight+interest+rates+near+zero+since+December+2008+and+has+bought+%242.3+trillion+in+government+and+mortgage-related+bonds+in+a+further+attempt+to+stimulate+a+robust+recovery.%3C%2Fp%3E+%3Cp%3EFed+watchers+also+think+the+U.S.+central+bank+could+step+up+bond+buying+later+in+2012.+A+Reuters+poll+on+Tuesday+found+most+Wall+Street+economists+think+the+central+bank+will+undertake+a+new+program+of+buying+mortgage-backed+securities.%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.reuters.com%2Fassets%2Fprint%3Faid%3DUSTRE7BE12S20111216%27+rel%3D%27nofollow%27%3ERead+more%3C%2Fa%3E%3C%2Fp%3E+

Egypt’s military sought to isolate pro-democracy activists protesting against their rule, depicting them as conspirators and vandals, as troops and protesters clashed for a third straight day, pelting each other with stones near parliament in the heart of the capital.

At least 10 protesters have been killed and 441 others wounded in the three days of violence, according to the Health Ministry. Activists say most of the 10 fatalities died of gunshot wounds.

The fighting, sparked when troops sought to break up a sit-in outside the Cabinet headquarters, has seen a particularly heavy hand by the military. Military police have been shown in video footage dragging women by the hair, even stripping the shirt off one veiled woman, and ferociously beating, kicking and stomping on protesters cowering on the ground.

Still, the protesters’ numbers have remained smaller than earlier rallies _ suggesting even anger over the disturbing images was not drawing the broader Egyptian public into a confrontation with the military, which activists behind the overthrow of Hosni Mubarak’s autocratic regime 10 months ago accuse of mismanaging the transition period and committing human rights abuses.

In a statement posted on its Facebook page, the ruling military council on Sunday called the clashes part of a “conspiracy” against Egypt. It said its forces had the right to defend the “property of the great people of Egypt.”

Seeking to depict the protesters as hooligans _ and apparently to counter the widely published images of protesters being beaten _ it also posted on the page footage of young men throwing rocks at a basement window of the parliament building and of at least one man trying to set the place ablaze.

The ruling generals have taken advantage of the growing frustration of many Egyptians over worsening economic hardships and tenuous security, blaming demonstrations, strikes and sit-ins for their predicament. The tactic, coupled with the military’s efforts to stain the reputation of the youth groups behind Mubarak’s ouster, appears to have worked.

The military has been using the state media and loyal private TV stations to project an image of itself as the protector of the nation and filling its public statements with patriotism and grave warnings of a dire future if political turmoil persisted.

Protest leaders increasingly complain that they feel isolated in a society that has grown more concerned with making ends meet than political rights. Many Egyptians see the ongoing, multistage parliamentary elections as a path to stability and an end to military rule.

“The military council uses every opportunity to show itself as the land’s strongest institution,” said Mohammed Abbas, an activist who defected from the Muslim Brotherhood, Egypt’s largest and best organized political group, to side with youth groups more active in protests. “We are making it easier for the generals by our divisions and isolation.”

In Sunday’s clash, protesters and troops battled on two main streets off of central Tahrir Square, trading volleys of stones and firebombs around barriers that the military set up to block the avenues.

One of the streets is site of a research center set up during the three-year occupation of Egypt by France in the late 18th century. The building was almost completely gutted by a fire which broke out during the height of the clashes on Saturday, when troops on its roof and on other nearby rooftops hurled rocks down on protesters below.

Protesters, who blame the fire on the troops, have been trying to salvage valuable books and documents from the center, whose two-story building is now in danger of collapsing after its roof caved in.

The deepening hostility between the ruling military council and the protest leaders is in sharp contrast to the days of the popular uprising against Mubarak in January and February when army troops ordered out on the streets to take over from the hated police were given a warm welcome by hundreds of thousands of protesters in Cairo and elsewhere. The military at the time said it wouldn’t fire on protesters.

When the military stepped into power after Mubarak’s Feb. 11 resignation, it was largely embraced by the public.

Sunday’s renewed violence was also taking place as unofficial results from a second round of voting in parliamentary elections showed Islamist parties, led by the Muslim Brotherhood, continuing their dominance at the polls. Liberal and left leaning parties, many of which sympathetic to the revolutionaries, have been trounced at the ballots.

The third and final round of voting is slated for next month in nine of Egypt’s 27 provinces.

The Islamists have been staying clear of the recent violence, fearing that they could jeopardize their electoral gains by taking part in the protests. Their stance has prompted many activists to accuse them of political opportunism.

The clashes began early Friday when one of several hundred peaceful protesters staging a sit-in outside the Cabinet offices near parliament was detained and beaten by troops. The protesters began their sit-in three weeks ago to demand that the nation’s ruling military immediately step down and hand over power to a civilian administration.

Activists have been trying to drum up public sympathy for their cause by flooding social network sites with photos and video from the troops’ brutal assaults he past two days.

“Liars,” proclaimed a red headline on the front page of the independent Al-Tahrir newspaper, referring to repeated denials by the military council and military-appointed Prime Minister Kamal el-Ganzouri that no force or live ammunition were used against the protesters. With the headline, the paper ran a photo of the woman protester who was half-stripped by attacking soldiers. Other widely circulating footage shows an army officer running toward protesters while firing a pistol at them, though it is not clear from the footage whether he was using live ammunition.

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An economic planning conference of China’s top leaders is expected to endorse fine-tuning of policies to support growth while seeking to keep inflation in check.

The powerful Politburo of the ruling Communist Party met last week and announced plans to keep a “prudent” monetary policy that would curb price hikes while adopting “pro-active” spending to promote growth. That has set the tone for the meeting in Beijing that begins Monday.

China has made headway in slowing price hikes but weak demand for exports from the European Union and U.S. has raised worries the economy may slow too quickly, worsening labor unrest just as the party prepares for a succession to a new generation of leaders next year.

Since leaders are stressing continuity, no major shifts in policy are expected from the closed door economic work conference, which reportedly will end on Wednesday.

Export growth has fallen steadily since hitting a peak of nearly 36 percent in March, and data released over the weekend showed exports slowed further in November, as did imports, with the overall trade surplus plunging 35 percent.

Adding to those concerns is a cooling of the property sector _ a mainstay of growth but also politically sensitive due to prices having surged beyond what most ordinary families can afford.

China’s economic growth abated to 9.1 percent in the July-September quarter from 9.5 percent in the first half of the year, but many economists are forecasting it will fall below 9 percent in 2012 payday loan.

“We believe the risks are skewed to the downside,” Standard Chartered Bank said in a report released Monday. It said that for China to maintain a growth rate of 8.1 percent next year, it would need to keep relatively high rates of capital investment that may prove difficult giving funding shortages for banks, property developers, local governments and many small businesses.

The report also noted China’s struggle to “rebalance” its economy toward greater reliance on domestic consumer demand, rather than exports and investment in construction.

“Despite talk of ‘rebalancing,’ progress has been limited in recent years,” the report said. The share of investment in the overall economy exceeded 50 percent last year, up from 43 percent in 2008.

Instead of the massive stimulus spending ordered in late 2008 to counter the global crisis, analysts say authorities are more likely to rely on tax cuts and administrative measures to help encourage more consumer spending.

But while Beijing strives to encourage more domestic demand and reduce its reliance on construction investment and exports to drive growth, it is also vowing to focus more on boosting its trade with emerging economies that are more dynamic than those in the U.S. and crisis stricken Europe.

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House Republican leaders previewed legislation to extend Social Security payroll tax cuts and long-term unemployment benefits at a meeting of the rank and file Thursday, aiming for a vote next week.

One official who attended the closed-door meeting said lawmakers responded particularly favorably to a provision that would assure construction of an oil pipeline from Canada to Texas, despite a veto threat from President Barack Obama.

The measure has been in the drafting stage for more than a week as House Speaker John Boehner and other leaders try to coax lawmakers to support a payroll tax cut extension that critics say has not contributed to job creation.

Boehner said Thursday he believed he had enough support to start pushing a payroll tax cut through the House next week.

In addition to extending the Social Security payroll tax cut and benefits for the long-term unemployed, the measure has been broadened to avert a threatened 27 percent cut in payments to doctors who treat Medicare patients. All three items carry a Dec. 31 deadline for action.

The House measure varies on several points from legislation that Obama and congressional Democrats want, but the president seemed eager on Wednesday to draw a line at items he described as extraneous.

His veto threat was specifically linked to any requirement for the construction of the Keystone XL oil pipeline, a project that he recently put on hold until after the 2012 election.

“Efforts to tie a whole bunch of other issues to what’s something that they should be doing anyway will be rejected by me,” he said.

Obama did not say which other items he had in mind.

Republicans said they welcomed a fight over the pipeline, which they have described as shovel-ready and promising 20,000 new jobs at a time of high unemployment.

“We are working on a bill to stop a tax hike, protect Social Security, reform unemploym

ent insurance and create jobs,” said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio. “If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have.”

Obama would lower the 6.2 percent payroll tax that workers normally pay to 3.1 percent next year, part of his effort to breathe life into the country’s ailing job market. He also wants to trim the payroll taxes that employers pay to give them an incentive to hire people.

The House bill would drop next year’s payroll tax to 4.2 percent, the same as this year’s level, with no tax breaks for companies. It would be financed by extending the current pay freeze on federal workers through 2015 and a host of smaller savings, including charging higher Medicare premiums to higher-earning seniors.

A 2 percentage point reduction in the payroll tax means a tax cut of $1,000 to an earner making $50,000 a year.

A similar battle is brewing in the Democratic-run Senate, where leaders plan a symbolic vote as early as Thursday that is designed for political purposes.

That Democratic-written bill would lower next year’s payroll tax to 3.1 percent. It is financed chiefly by a 1.9 percent surtax on income over $1 million, a proposal that is almost universally opposed by Republicans, who say it would discourage business owners from hiring.

GOP senators are expected to easily kill the measure, but Democrats hope the roll call will produce fodder for campaign ads against Republicans.

Asked Wednesday by reporters whether he might eventually accept spending cuts to pay for the bill, Reid showed some flexibility.

“We’re ruling nothing out, OK?” Reid said, other than budget cuts to federal agencies, which have already been sliced twice this year.

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Managed-care company Cigna says it will pay about $3.8 billion to buy fellow health insurer HealthSpring in a deal that boosts Cigna’s Medicare Advantage business.

The Bloomfield, Conn., company will pay $55 per share in cash for HealthSpring, which is based in Nashville, Tenn. Cigna says that price represents a 37 percent premium over the stock’s Friday closing price of $40.16.

Cigna says the boards of directors for both companies have approved the deal. It is expected to close in the first half of 2012 guaranteed online personal loans.

Medicare Advantage plans are privately run versions of the government’s Medicare program. They are subsidized by the government and offer basic Medicare coverage topped with extras or premiums lower than standard Medicare rates.

HealthSpring has about 340,000 Medicare Advantage customers in 11 states.

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