TOKYO -- Japanese stocks traded near the previous day's levels Tuesday morning in Tokyo, weighed down by weakness on Wall Street, but shares Sumitomo Mitsui Financial Group Inc. [s:smfnf] climbed 2.4% after it posted a hefty rise in its net income for the April-December period. The Nikkei 225 fell 0.1% to 9,942.25 while the Topix lost less than 0.1% to 882.54. Among the larger decliners, JVC Kenwood Holdings Inc payday loans. dropped 8.3% and has been on a downturn since it announced in January that it would postpone the release of third-quarter results. Elsewhere, South Korea's Kospi added 0.3% while Australia's S&P/ASX 200 was 0.7% lower.

Japan Indexes Nearly Flat After Three-session Drop

ZURICH (Reuters) – Switzerland must consider the automatic exchange of tax information with European Union governments if Swiss banks are to have unlimited access to EU markets, the country&&9;s finance minister said in an interview published on Sunday.

"If we want such a (financial services) agreement, we have to be prepared to take on European rules -- and Europe has the automatic exchange of information," Hans-Rudolf Merz was quoted saying in an interview with newspaper NZZ am Sonntag.

"At some point we have to hold this discussion," he said.

Germany has said it is prepared to pay an informant for data on clients of Swiss banks who may have been using secret accounts to evade German taxes, opening up wounds in Switzerland&&9;s bank secrecy laws and delivering a fresh blow to the country&&9;s massive private banking industry No teletrak payday loan.

Switzerland relaxed its bank secrecy rules under international pressure in 2009, but agreements for the automatic exchange of tax information with foreign authorities would likely be the fatal blow to the cherished laws.

"We want to abolish bank secrecy in the European Union. That has implications for Switzerland," said Merz&&9;s German counterpart Wolfgang Schaeuble in a separate interview in the same paper.

"I don&&9;t believe that Switzerland can keep itself out of the European development in the long run," Schaeuble was quoted saying.

(Writing by Jason Rhodes; Editing by David Holmes)

Swiss minister urges debate on tax data: report

Still rattled by fears that large deficits in Europe could hobble the global recovery, Wall Street indexes were down more than 1 percent on Friday afternoon, even as the American labor market showed signs of improving.

A global downturn in stocks &<51; the major European and Asian indexes dropped at least 2 percent &<51; brought volatility back to Wall Street, a day after shares suffered their worst losses in nearly a year.

Investors were concerned that mounting debt in several European countries &<51; Greece, Portugal and Spain, in particular &<51; could choke global growth. They seemed unmoved by a government report showing that unemployment was easing in the United States. In January, the unemployment rate declined to 9.7 percent, from 10 percent in December, and job losses totaled 20,000.

By afternoon, the Dow Jones industrial average had fallen 1.53 percent, or 152.89 points. The wider Standard &&8; Poor&S217;s 500-stock index declined 1.58 percent, or 16.84 points, and the technology-dominated Nasdaq fell slightly more than 1 percent, or 21.42 points. As investors rushed for the safety of the dollar in the afternoon, the decline in stocks intensified.

The catalyst of Friday&S217;s downward momentum was Europe, where the FTSE-100 in London shed 1.53 percent and the CAC-40 in Paris declined 3.4 percent. The AEX index in Amsterdam fell 2.5 percent, and the benchmark PSI general index in Lisbon was down 1.5 percent. Major indexes in Asia declined at least 2 percent.

The main worry remained the ability of several European countries &<51; including Greece, Ireland, Italy, Portugal and Spain &<51; to rein in their rising deficits, which have surged in the wake of national stimulus programs and years of poor fiscal management.

&S220;The fear is what happens if the recovery in Europe rolls over into a double-dip recession,&S221; said Hank B. Smith, chief investment officer for Haverford Investments. &S220;It creates uncertainty as we wait to see how this relatively young experiment, the European Union, deals with this crisis.&S221;

Joseph V. Battipaglia, a market strategist for Stifel Nicolaus, said the instability in Europe had caused investors to worry whether the bill for global stimulus spending had gotten too large.

&S220;Other nations &<51; the U.K. and United States included &<51; will be called into question,&S221; Mr. Battipaglia said. &S220;The concern is whether they have too much debt and if they can sustain the level of spending to stimulate the economy.&S221;

It has been an extraordinarily unstable period for the United States stock market. Just last month, traders seemed to be counting down the days to the Dow&S217;s triumphant surge past the 11,000 threshold. On Friday, however, the Dow slipped below 10,000, reflecting the sudden sense of unease that has permeated global markets no fax payday loans.

Even before shock of Thursday&S217;s debt worries, when the Dow lost 268 points, United States stock indexes had shown signs of foundering. A steep sell-off in late January, prompted by concerns over a clampdown on banks and a slowdown in Chinese lending, spurred talk of a significant decline. Since Jan. 19, the Dow has fallen nearly 7 percent.

Economists said the fiscal and budgetary demands of euro-zone membership are limiting the options for Greece, and possibly other euro area countries, in emerging from economic troubles. They can not devalue their currencies to regain competitiveness, or cut interest rates, for example.

That has led investors to sell the bonds of those countries in recent weeks. Yields on the benchmark 10-year bonds of Greece, Ireland, Portugal and Spain moved higher Friday, while those of Germany and France eased, suggesting funds were still flowing from the peripheral members of the euro zone into the core countries.

&S220;All the problems that the boom had hidden are coming to the fore,&S221; said George Magnus, senior economic adviser at UBS in London. &S220;The rising tide of economic growth lift all boats. With hard times, the problems come into view.&S221;

Unable to embark on the kind of fiscal and monetary stimulus seen in the United States and Britain, the most likely near-term solution for Greece appears to be a bailout by its better-off neighbors. &S220;It&S217;s the only way to settle markets on a durable basis,&S221; Mr. Magnus said.

&S220;The market wants to accelerate an issue that the authorities were hoping that time would heal,&S221; Deutsche Bank analysts said in a research note Friday. It added that the European authorities &S220;will be forced to show more of their hands over the coming weeks or months,&S221; suggesting financial support or guarantees from other euro countries was becoming more likely.

Worries about a domino effect were compounded by a vote Friday in the Portuguese parliament, suggesting that the minority government there will have a tough time imposing efforts to trim the deficit. Workers in Greece have begun protesting the spending cuts.

Amid the jitters, the euro sagged against the dollar Friday &<51; a trend likely to be quietly welcomed by European politicians like President Nicolas Sarkozy of France who have been calling for a weaker currency to help exports.

Investor nervousness drove up the value of the Swiss franc, traditionally seen as a safe haven, against the euro to a 15-month high. That prompted a reported intervention by the Swiss National Bank.

Bettina Wassener contributed reporting from Hong Kong.

Stocks Tumble Again on Deficits in Europe

LONDON – The European Central Bank kept its main interest rate unchanged at the record low of 1 percent for the ninth month running Thursday and gave its cautious backing to the Greek government's attempt to get a grip on its borrowing.

Bank President Jean-Claude Trichet said it was "absolutely crucial" that the Greek government stick to its plan to get the budget deficit down from a staggering 12.7 percent of the country's gross domestic product in 2009 to below 3 percent in 2012.

"We expect and we are confident that the Greek government will take all the decisions that will permit them to reach that goal," Trichet said.

Greece's budget troubles have shaken the entire European Union and sent the euro currency lower. Countries that use the euro are supposed to keep their budget deficits within limits to support the currency.

Trichet said additional cutbacks announced Tuesday by Greek Prime Minister George Papandreou were "steps in the right direction. " In a live televised address, Papandreou announced a freeze on public sector wages, reforms of the pension system, increases in fuel duties and renewed efforts to rein in rampant tax evasion.

Trichet also said it was the responsibility of every member government to get their borrowing levels under control as escalating debt levels are adding a burden onto monetary policy.

The Greek debt woes have led to speculation that EU members might have to fund a bailout, although Greek and EU officials say that won't be needed.

The clear worry for Trichet and his fellow rate-setters is that problems on the periphery of the eurozone and the financial burden of a bailout from the core countries like Germany and France could derail the recovery from recession.

"While the European Central Bank is right to refuse to make any commitments towards those countries which struggle to bring public finances under control, the impact of the crisis may yet force them to leave interest rates lower for longer," said Jorg Radeke, economist at the Centre for Economic and Business Research.

Trichet said that recovery continues at a "moderate" pace but that it would be "uneven" and that the outlook was subject to "uncertainties."

"The euro area has been benefiting from a turn in the inventory cycle and a recovery in exports, as well as from the significant macroeconomic stimulus under way and the measures adopted to restore the functioning of the financial system" said Trichet free credit scores.

On Wednesday, the European Commission gave its backing to the Greek government's plan to slash the budget — though it said risks remained — and confirmed that it would be sending monitors to assess Greek efforts.

Trichet confirmed that many of the bank's extraordinary measures that have been introduced over the last couple of years to keep credit flowing around the eurozone economy will be unwound over the coming months and that a statement outlining how the liquidity will be absorbed was likely at next month's rate-setting meeting.

"The governing council will, in early March, take decisions on the continued implementation of the gradual phasing-out of the extraordinary liquidity measures that are not needed to the same extent as in the past," he said.

"In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary," he added.

Last December, the European Central Bank began its phasing out of liquidity measures by announcing the ending of a 12-month refinancing operation.

At the moment, Trichet said inflationary pressures in the eurozone remain "subdued" and that inflation expectations were "firmly anchored" around the Bank's target of "close to, but below 2 percent."

Earlier, the Bank of England kept its main interest rate unchanged at the record low of 0.5 percent and said it would not ask the government for the authority to pump more newly created money into the barely recovering British economy.

The British central bank's rate-setting Monetary Policy Committee voted to keep its asset purchase program unchanged at 200 billion pounds ($317 billion) but that it will continue to monitor the scale of the program and could ask the government to make further purchases.

"While we think today's pause marks the end of the program, the risk of a double-dip in economic activity means that we can't fully write off the chance of further stimulus just yet," said George Buckley, chief UK economist at Deutsche Bank.

ECB gives cautious backing to Greek deficit plan

GENEVA – Drug maker Roche Holding AG on Wednesday reported a 22 percent drop in full-year net profit to 8.51 billion Swiss francs ($8.06 billion), citing costs linked to the takeover of California-based Genentech.

Discounting one-off expenses, net profit attributable to Roche shareholders would have fallen 9 percent to 9.8 billion francs, it said.

The results fell just short of analyst expectations. Shares in Roche, which reports earnings figures only for the half year and full year, opened 2.2 percent lower at 176.60 on the Zurich exchange.

"In a turbulent external environment Roche performed extraordinarily well," Chief Executive Severin Schwan said in a statement.

Roche lagged behind Novartis AG, which posted a full-year net profit of $10.27 billion last month, but once again edged out its cross-town rival on sales, which rose 8 percent to 49.05 billion francs compared with $44.27 billion at Novartis.

Core earnings per Roche share were up 10 percent to 12.19 francs. The Basel-based company plans to raise its dividend per share by 20 percent to 6 francs.

Schwan said the integration of Genentech, which cost Roche some 2.4 billion francs in restructuring expenses last year, was "a major step." Roche completed its $46.8 billion takeover in March after overcoming strong opposition from a skeptical Genentech board. The move helped boost Roche's income from cancer drugs Avastin and Rituxan, which were both developed by the South San Francisco biotech firm online payday loans.

Roche expects mid-single digit growth in the coming year and Schwan said the company has 10 new products in late-stage development.

Sales of its best-selling antiviral drug Tamiflu, which soared last year due to the swine flu pandemic, are predicted to fall to 1.2 billion francs from 3.2 billion francs in 2009, Roche said. Tamiflu has proven effective in treating swine flu cases.

Roche, which relies heavily on its palette of anticancer drugs, is seeking new uses for Avastin, Rituxan and Herceptin, its top three selling products last year with combined sales of over 17.5 billion francs.

For Avastin, which is already prescribed to combat advanced colorectal, breast, lung and kidney cancer, Roche is seeking regulatory approval for use against Gastric, ovarian and prostate cancer.

Overall analysts appeared satisfied by the results, despite lower than expected sales due to Roche's decision to reduce locally stored stocks.

Zuercher Kantonalbank noted that Roche plans to use the integration of Genentech to reduce costs by about 1 billion francs by next year. Analysts also highlighted Roche's goal of wiping out its debt by 2015. The drug maker borrowed almost 24 billion francs last year to finance the Genentech takeover.

Roche 2009 profit down 22 pct on Genentech costs

SAN FRANCISCO - Technology stocks kicked off February on a positive note, as semiconductor shares led early gainers following an industry report of a big jump in sales in December 2009. The Nasdaq Composite Index rose 11 points, or 0.6%, to 2,159 no fax payday loans. The Morgan Stanley High Tech 35 Index was up 1.1%, while the Philadelphia Semiconductor Index added 1.7%.

Tech Stocks Rise Led By Semis

WASHINGTON – President Barack Obama is shifting his administration's emphasis to battling unemployment, the scourge that is hurting households nationwide and threatening to inflict heavy losses on Democrats in November's elections.

In the process, he and his allies in Congress intend to force Republicans, through a series of upcoming votes, to choose between Wall Street's high fliers and Main Street's middle-class workers. With Democrats struggling to deliver on big promises such as overhauling health care, they hope their increasingly populist tone _coupled with Republican resistance to Democrats' budget-cutting proposals_ will prevent wavering voters from drifting to the GOP.

The White House has pushed a job-creation agenda for months. But it wasn't supposed to reign as the top priority until Democrats achieved their much-touted health care revisions.

That trouble-plagued campaign still drags on, however, leaving Obama little choice but to make it clear that creating jobs is his chief concern.

The shift in focus is not necessarily a death knell for the health care push. House and Senate Democratic leaders are trying to persuade colleagues to pass the contentious package despite fierce GOP opposition and polls that show substantial public dislike.

For now, at least, the legislative leaders seem content for Obama to remain fairly quiet while they work behind closed doors. If they can move the health care package close to the finish line in the next few weeks, they may call on him to buttonhole enough lawmakers for a final push.

That gives Obama leeway to focus heavily on trying to whittle down the nation's 10 percent unemployment rate. In Wednesday's State of the Union address, he declared, "Jobs must be our No. 1 focus in 2010." On Friday he rolled out details of a $33 billion, one-year tax incentive plan to encourage more hiring.

White House senior adviser David Axelrod said in an interview that the administration also hopes Congress will approve a new stimulus bill in the next couple of weeks. The other most immediate priorities, he said, are votes on a bailout fee on big banks and a financial reform package, including a new consumer finance agency.

Congressional Republicans have opposed these and other proposals, saying Obama wants to slap stifling regulations on the nation's still-struggling financial sector.

Some Democrats view the GOP stance as a policy and political miscalculation.

White House officials and Democratic lawmakers described a strategy to put Republicans on the spot by scheduling regular votes on jobs, financial regulation and other matters that fall in line with the Democrats' populist message.

The strategy is meant to put Republicans in a box. They can vote with Democrats on items such as imposing a fee on big banks that received public bailout money business cards. Or they can oppose such measures and risk being painted as protectors of big banks and stock traders rather than working-class Americans.

Many congressional Republicans, riding high after their stunning victory in the Jan. 19 Massachusetts Senate race, think the Democrats' strategy won't work. They appear almost united in their willingness to oppose Democrats on numerous measures that arguably might appeal to the public, calling them irresponsible, unworkable or overly intrusive.

Senate Republicans recently helped kill a proposed bipartisan commission meant to reduce the deficit, even though some originally had embraced it.

They also unanimously opposed an increase in the allowable level of federal borrowing. The measure, which Democrats passed on a party-line vote, includes requirements that the government pay up front for many new programs rather than finance them through borrowing. Republicans say the pay-as-you-go plan encourages higher taxes.

Many House Republicans, meanwhile, criticized Obama's call Friday for a $5,000 tax credit for each new worker hired this year, capped at $500,000 per employer. They said previous efforts proved ineffective.

Axelrod said the White House and the Democratic-controlled Congress will keep pushing such proposals and keep highlighting Republicans' opposition.

"It's hard to understand why they would not be for it," he said. "They're going to have to decide."

Obama himself hinted at the strategy in a recent interview with Time magazine.

"It'll be interesting to see how some, who have tried to exploit legitimate anger at the big banks this year by trying to put it on us, are going to position themselves — whether in fact they're going to want to protect all these financial institutions from the regulations that will prevent the kind of disaster that we've seen over the past couple of years," Obama said.

"They're going to have to vote yea or nay, aren't they?" the reporter said.

"Right," said the president.

Both parties have made some nods at bipartisanship in recent days. But chances for meaningful accords before the November elections seem remote.

Obama and House Republicans engaged in a freewheeling exchange Friday in Baltimore, but the most energetic portions involved each side sharply defending its positions and pointedly criticizing the others'.

House GOP leader John Boehner of Ohio thanked Obama for coming. A short time later he issued a lengthy, point-by-point rebuttal of the president's comments, under the headline, "President Obama repeats discredited talking points during dialogue with House GOP."

Obama taking populist tone in fight over jobs

BALTIMORE – In a face-to-face encounter, President Barack Obama chastised Republican lawmakers Friday for opposing him on health care, economic stimulus and other major issues.

Republicans pushed back on taxes and spending, and accused Obama of not taking their ideas seriously.

Obama, attending the House Republicans' retreat in Baltimore, began with conciliatory remarks but soon became more pointed. He said a GOP-driven "politics of no" was blocking action on bills that could help Americans obtain jobs and health care.

In a sometimes-barbed exchange, he said some in the audience have attended ribbon-cutting ceremonies for projects funded by the stimulus package they voted against. Obama also questioned why Republicans have overwhelmingly opposed his tax-cut policies, which he said have benefited 95 percent of American families.

"The notion that this was a radical package is just not true," Obama said. "I am not an ideologue."

GOP lawmakers pressed the president to pledge to support a line-item veto for spending bills and across-the-board tax cuts. Obama demurred, saying billionaires don't need new tax cuts.

In his opening remarks, Obama criticized a Washington culture driven by opinion polls and nonstop political campaigns.

"I don't think the American people want us to focus on our job security, they want us to focus on their job security," he said best payday advance.

The president acknowledged that Republicans have joined Democrats in some efforts, such as sending more U.S. troops to Afghanistan. But he said he was disappointed and perplexed by virtually unanimous GOP opposition to other programs, such as the $787 billion economic stimulus bill enacted a year ago.

He also noted overwhelming Republican opposition to his proposed overhaul of the nation's health care, which now is in legislative peril. Obama said he would gladly look at better ideas, but he urged Republicans to acknowledge the difficulties that many Americans face in obtaining good health care.

Obama said it makes ideological sense for Democrats and Republicans to work together on some issues such as charging fees to banks that benefited from a federal bailout, temporarily freezing some government spending, keeping jobs from being exported and paying for new government programs when they are created.

Republicans have sharply criticized Obama's approach to most of these issues.

Face to face, Obama urges GOP to work with Dems

HELSINKI – The world's top mobile phone maker, Nokia Corp., says net profit grew 65 percent in the fourth quarter to euro948 million despite falling sales.

The profit was up from euro576 million in the last quarter of 2008.

Net sales in the last three months of 2009 dropped 5.3 percent to euro12.0 billion, down from euro12 no fax payday loans.7 billion in the same period a year earlier.

Nokia CEO Olli-Pekka Kaalsvuo says Nokia grew its market share in smartphones, driven by the launch of new models.

Nokia posts euro948 million net profit in Q4

SAN FRANCISCO &<51; Oracle, having spent the last nine months fighting rivals and regulators in order to own Sun Microsystems, has pushed itself into the middle of the scrum of technology heavyweights all jostling for the same corporate customers.

Oracle's chief, Lawrence J. Ellison, left, hopes Scott G. McNealy, Sun's chairman, will stay.

The $7.4 billion deal, which gives Oracle a vast hardware business for the first time, pits it against Hewlett-Packard, I.B.M., Dell and Cisco Systems, all of which have made a flurry of acquisitions and alliances. Many of these moves broadened the companies&S217; products and services from their traditional specialties, like databases, computers or networking equipment. Each company wants to be able to claim to prospective customers that it, and it alone, has more of the parts to be an end-to-end service provider.

&S220;The cost isn&S217;t in buying the pieces,&S221; Lawrence J. Ellison, the chief executive of Oracle, said in a phone interview on Tuesday. &S220;The cost is in the labor of assembling them and making them work.&S221;

On Wednesday, Oracle will hold an event at its Silicon Valley headquarters where executives from the company will talk in detail about the plans for Sun Microsystems.

Mr. Ellison said that in the next few months, Oracle planned to lay off fewer than 2,000 people, while hiring more than 2,000 people in engineering, sales and other roles. He did not rule out that additional layoffs might occur later.

Mr. Ellison added that he expected Sun&S217;s chief executive, Jonathan I. Schwartz, to resign and that he hoped that Scott G. McNealy, Sun&S217;s co-founder and chairman, would stay on at Oracle, although his title and duties were not clear.

&S220;We need to have more conversations about his role,&S221; Mr. Ellison said.

Oracle&S217;s purchase of Sun, which European regulators approved last week after months of scrutiny, stands out as the most game-changing corporate technology play made during the economic downturn, according to industry analysts.

&S220;It&S217;s the most significant deal of the decade,&S221; said Dan Olds, an analyst with Gabriel Consulting. &S220;Oracle has a shot here to change the rules of the industry and usher in a new era.&S221;

As analysts like Mr. Olds point out, the era is new only in relative terms.

The corporate computing market began decades ago with I.B.M. selling customers systems that included most of the hardware and software they would need in a single package. As time went on, a host of minicomputer makers rose to prominence with a similar strategy, in which they would build all of the crucial pieces of a large system, including its chips, main software and networking technology payday loans.

The older model of selling corporate systems was then disrupted by the rise of powerful, more standardized computers based on readily available chips from Intel and an innovative software market. Customers could suddenly choose the technology they preferred from a variety of suppliers and assemble those products in their own data centers.

Prices of hardware and software declined under this competitive pressure.

Oracle, for one, wants to revert to the more traditional model.

The company plans to offer customers databases, business software, servers, storage systems and networking equipment from one place. In addition, Oracle will do the hard engineering work to make sure all this technology works well together, Mr. Ellison said.

&S220;It is odd that the computer industry ships all these separate parts and expects customers to assemble them,&S221; Mr. Ellison said. &S220;You will now be buying this complete system, and don&S217;t have to hire I.B.M. or someone else to assemble it for you.&S221;

While Oracle has long battled I.B.M. in the database market, its push into computer hardware places the company in direct competition with longtime partners like H.P. and Dell.

Last year, Cisco Systems branched out from its roots as the world&S217;s largest networking company and began selling computer servers &<51; a move that pitted it against H.P., Dell and I.B.M. Cisco also formed a sales partnership with EMC and its software subsidiary VMware that further fanned competition. Traditionally, Cisco had teamed with H.P., Dell and I.B.M. in large data center deals.

H.P. has countered Cisco by investing more in its existing networking products and acquiring the networking company 3Com for $2.7 billion last November. In addition, H.P. bought the services giant Electronic Data Systems in 2008 for $13.9 billion in a bid to bolster the company&S217;s ability to sell more equipment and services to customers often served by I.B.M.

This month, H.P. and Microsoft revealed an alliance as well in which the companies plan to create tighter links between their respective products. Analysts have viewed this move as a stab at Oracle, which competes against Microsoft in the database market.

&S220;It&S217;s sort of funny because the companies themselves are getting more integrated,&S221; said Gordon Haff, a technology analyst with Illuminata. &S220;And now they&S217;re trying put together as many products as they can for customers to buy.&S221;

With Sun, Oracle Aims At Giants

Treasury Secretary Timothy Geithner warned that the financial markets would view a Senate rejection of Ben Bernanke&&9;s renomination as "very troubling" but said he&&9;s sure the embattled Federal Reserve chairman will prevail.

"We&&9;re very confident that the chairman will be reconfirmed by the Senate, and we think it&&9;s very important he be reconfirmed by the Senate," Geithner said Friday in an interview at the Treasury for POLITICO&&9;s new video series, "Inside Obama&&9;s Washington," debuting Monday.

"He&&9;s done a remarkable job of helping steer this economy out of the great recession. And I think he&&9;ll play a very important role in helping in the success of our efforts to try to make sure we are bringing this economy back to durable growth."

Asked about possible market reaction to a defeat, Geithner said: "I think the markets would view that as a very troubling thing to the economy as a whole. But, as I said, I don&&9;t think they should be uncertain. I think they should be confident because we are very confident he will be reconfirmed."

Bernanke is having such a rough time, Geithner suggested, because the country is "in a moment where people are incredibly angry and frustrated by the damage this crisis caused."

"You see that across the country," Geithner said. "That&&9;s perfectly understandable, and everybody involved in this effort is bearing a lot of the brunt of that frustration and anger."

The Bernanke nomination is the latest headache for the nation&&9;s 75th Treasury secretary, who&&9;s kept his dry sense of humor while juggling some of the Obama administration&&9;s highest-stakes crises - winding down financial bailouts and trying to get banks lending again, instilling confidence despite data that are mixed at best and serving as a public face (and sometimes punching bag) for an economic team often accused of being too close to Wall Street.

He sees his biggest challenge as getting the right incentives in place to help spur private-sector job creation through tax, export and research-and-development policies. And he continues to shepherd the financial reregulation that was a centerpiece of President Barack Obama&&9;s first-year agenda. The House has passed a version, and the Senate will continue working on it this winter.

Geithner, 48, came up as a staff guy, working in three administrations for five Treasury secretaries. And he was president and CEO of the Federal Reserve Bank of New York during the financial meltdown of 2008. So this is the second time that he&&9;s been one of a handful of officials charged with staving off a depression.

Despite the sudden pressure from Bernanke&&9;s renomination, Geithner chatted calmly in the Treasury&&9;s Diplomatic Reception Room. He joked that he&&9;d like to do a segment explaining the economy on ESPN&&9;s "SportsCenter" (he can&&9;t tell the anchors apart) and was looking forward to a birthday dinner with his wife, Carole, at Rasika, a hip Indian restaurant in Penn Quarter.

The question hanging over the pleasantries: Is there any way that Bernanke could lose?

"I don&&9;t believe so," Geithner replied. "We are very confident that this will happen, and he will have the support he needs to continue in this important role."

On Saturday, Obama made what a White House aide called "a few check-in calls to senators and members of leadership to make sure Bernanke was on track, and he was assured he was."

The White House was rushing to shore up Bernanke as the stock market was dropping, after Obama&&9;s announcement that he wanted further restrictions on the activities of the biggest banks. Geithner rejected the banks&&9; contention that the proposed rules could mean thinner markets and less money available for lending.

"That&&9;s the argument you&&9;re always going to hear when you try to change things," he said. "But I do not believe that there is a credible risk of that in the reforms we are pursuing."

One of the most surprising - and persistent - critics of the administration&&9;s economic team has been Arianna Huffington, founder of The Huffington Post, who has taken a boisterously populist tack that includes a Move Your Money campaign to get depositors to move their money from big banks to neighborhood banks .

Geithner didn&&9;t endorse her idea. But he did say that customers of financial institutions "should be very demanding in the kind of service they expect, the kind of products they get, the disclosure banks offer to basic fairness and dealings."

"I&&9;m very supportive of customers of banks, other investors of banks, creditors of banks holding them to very high standards - that&&9;s something that&&9;s very appropriate," Geithner said. "I&&9;m not concerned about her campaign, and I agree with the basic principle ... that we&&9;ve been through a period where I think people are right to expect more of their financial institutions."

Huffington had an off-the-record dinner with Geithner shortly after Thanksgiving and gave him some advice he clearly has not taken. Dodging a question about their conversation, the secretary said that his approach of "trying to fix [the system] quickly and cleanly" should have appeal for both ends of the political spectrum.

"If you&&9;re on the right, you should be relatively pleased with our strategy, because we were able to pull the government out of the financial system much more quickly than people thought," he said. "We have a much, much smaller footprint today than when I came into office. And if you&&9;re from the left, you should be able to look at the strategy and say, by solving this today at much lower cost, we have more resources available to do things that many people think are important for the government to do better."

Other key points by Geithner:

— On whether he remains confident a clear recovery will be under way by this spring: "Very confident. The economy is healing. It&&9;s growing. It&&9;s more broad-based. You see the classic signs of greater confidence among consumers and businesses now. They see stronger orders. So I think we&&9;ve been successful in breaking the momentum of the worst recession in generations. But this crisis caused a lot of wreckage.There&&9;s still a lot of damage out there. Unemployment is still very, very high, and we have a lot of work to do to make sure that we&&9;re restoring confidence, getting people back to work, making businesses comfortable to make the kind of decisions that are necessary to grow the economy. ... I think most business economists, most businesses, would say now that you&&9;ll probably start to see positive job growth sometime in the spring."

— On when people are going to start to feel better about the economy: "The turn really came in the second quarter of last year - really in the spring and early summer. That&&9;s when the economy started to bottom. That&&9;s when the financial markets started to show the classic signs of confidence and hope. And there&&9;s been a steady, gradual improvement since then. ... I just want to emphasize that this crisis caused an enormous amount of damage not just to people&&9;s lives and to businesses but to their confidence in how this country is being run. And we need to restore that, rebuild that. That&&9;s going to take a lot of effort over time."

— On his philosophy for the job: "The most important thing - and the really only source of credibility and confidence - is to be honest with people about the challenges we face, to try to be open about how we think it&&9;s best to solve them and then to act."

— On his own job security: "I&&9;m going to do this as long as the president wants me to help contribute to fixing this mess, and I&&9;m very proud of what he&&9;s been able to accomplish in this first year under enormously difficult conditions."

Read More Stories from POLITICOFive key health reform questionsThe first reality show era senatorTop W.H. aides downplay Mass. lossClinton adviser fires &&9;don&&9;t ask&&9; shotW.H. brass split on stimulus stats

Geithner warns of Bernanke fallout

People on Wall Street are in a state of shock today. It shows in the stock market, which is down 5 percent in three days.

The last time the market went down that fast, it was hitting bottom in March. But this feels very different from that.

Until now, it appeared that the big banks, having been rescued, could go on more or less as always. The argument that really hurting the banks would cause too much damage to the economy had been persuasive at the top levels of the Obama administration.

Congress &<51; especially freshman Democrats from Republican-leaning districts who did not want to appear to be antibusiness &<51; seemed willing to back the banks on the kinds of details of regulatory reform that few voters understand.

The administration&S217;s regulatory proposals, by no means hostile to the banks but including some real changes, were being quietly amended to take out a lot of the teeth. Paul A. Volcker, who wanted to scale back bank trading activities, was the odd man out among President Obama&S217;s advisers.

Then came Massachusetts, and the interpretation that the Democratic Senate candidate was defeated in large part because of populist anger.

The first shock for Wall Street was the president&S217;s sudden conversion to Volckerism. But that seemed to be spent by Friday morning. At 11 a.m., the Dow Jones industrial average was virtually unchanged from Thursday.

Then came reports that Ben S. Bernanke&S217;s renomination as chairman of the Federal Reserve Board might be in trouble. That is something that nobody on Wall Street had thought possible. Stocks plunged again.

Who would we get if Mr. Bernanke were forced to step aside? Who would the Senate confirm? What promises might it extract from a new chairman, and would those promises severely restrict the independence of the Fed? Nobody knows.

This is going to be a very interesting weekend. Back in 1987, a stock market shock on Friday turned into a crash on Monday in part because the Sunday morning talk shows heard an administration official picking fights with Europe. For whomever goes on the shows this weekend, it will be difficult to sound the right notes to pacify the public anger without totally scaring investors, both in the United States and abroad payday loans guaranteed no fax.

Until now, the consensus conventional wisdom went something like this: The banks deserve worse than they are getting, but the rest of us would suffer too much if they got it. So we bailed them out, and did not force bank shareholders to lose everything, or bank creditors to take large losses.

That wisdom may still be correct. But it may not matter. If people are angry enough, they may want to damage the bankers and then figure out what to do to get over the problems that causes.

Could this have been avoided? Yes it could. If.

&<82;If the Fed had shown a lot more contrition for its errors of monetary policy and regulation.

&<82;If the banks had shown similar contrition, and accepted the idea that people who &<51; as a group &<51; almost sank the financial system did not deserve to return quickly to mega bonuses.

&<82;If Goldman Sachs, in particular, did not insist that it never needed a bailout and was never in danger of collapse.

&<82;If the Obama administration had chosen to exclude people with ties to the past errors.

Since that March bottom in stocks, the Standard &&8; Poor&S217;s 500-stock index is up 61 percent, even after the sell-off this week. Junk bonds, as shown by the Merrill Lynch High Yield index, have done even better. And the leading index of financial stocks is still more than twice as high as it was in March.

Those soaring prices came as people concluded that fears of Great Depression II were overdone, and that the economy would recover.

The events of this week have called into question many of the assumptions that lay behind that conclusion &<51; assumptions about regulatory policies and monetary policy, as well as the assumptions about who would be leading Obama administration policy.

The events have not proven any of the assumptions wrong, but it may be worth remembering that the stock market rose before any economic improvement was visible. It may also decline before there is proof that the new populist fervor will cause serious damage.

Floyd Norris comments on finance and economics in his blog at nytimes.com/norris.

High & Low Finance: A Weekend to Deal With Ifs, Ands and Buts

LONDON -- European shares declined for the second time in three sessions on Tuesday, with autos and banks under notable pressure. Shares of British lender Barclays declined 1.7% while German carmaker Daimler lost 1.3%. On the plus side, Cadbury shares jumped 3.2% to 833p a share after Kraft Foods said that it's finalizing terms of an agreed offer for the British chocolate maker. The U.K. FTSE 100 index declined 0.3% to 5,475.91, the German DAX index lost 0.4% to 5,893.98 and the French CAC-40 index fell 0.3% to 3,964.16.

European Shares Decline In Early Trading

IT sounds like good work if you can get it, and thousands of people in corporate America do. On average, they attend 8 to 12 meetings annually. Although they are supposed to have fiduciary obligations, they often appear simply to warm their assigned seats, and to raise their hands when their leader calls for a vote. For that, they can receive as much as $640,000 a year.

Go to your Portfolio &<87;

Who are these people? Company directors, who are typically handpicked from other companies, banks, academia and, in some cases, social directories.

But underworked, overpaid corporate boards are doing serious harm to the shareholders of public companies and the economy as a whole, according to &S220;Money for Nothing: How the Failure of Corporate Boards Is Ruining American Business and Costing Us Trillions&S221; (Free Press, $27), by John Gillespie and David Zweig.

In the wake of the global economic debacle, the name of the game for authors of business books is assigning blame. Many recent books have pointed accusatory fingers at the problems of specific firms like Bear Stearns, Lehman Brothers and Fannie Mae, and of certain executives.

But &S220;Money for Nothing&S221; casts a much wider net, blaming the financial crisis on a systemic collapse of corporate democracy caused by the failure of many if not most corporate boards to simply do their jobs. &S220;The boards were supposed to monitor risks, provide judgment and supervise managers on behalf of shareholders,&S221; Mr. Gillespie and Mr. Zweig write. &S220;Boards, at the very least, should have acted in the classic sense like a governor on an engine that measures and regulates the machine&S217;s speed and, if necessary, turns it down to keep it from blowing up.&S221;

Mr. Gillespie, a former investment banker, worked for Lehman Brothers and Bear Stearns, which collapsed in 2008, and Morgan Stanley, which took a beating that year. Mr. Zweig, a co-founder of Salon.com, worked at Dow Jones and Time Inc., whose parent company&S217;s former chief, Gerald M. Levin, recently acknowledged that the merger he engineered with AOL was the worst deal of the decade.

The authors write in a nonpedantic, readable style, and they don&S217;t mince words. They declare that boards &S220;are prone to give away the shareholders&S217; store&S221; when approving compensation and perks for corporate management.

They devote an entire chapter, &S220;The Myth of Shareholders&S217; Rights,&S221; to showing the heavily lopsided power of corporate managements in board elections and proxy votes. And they explain why so many companies incorporate in Delaware, where state laws exempt corporate executives &<51; and directors &<51; from financial liability for their actions.

The authors provide examples that will already be familiar to many readers. But they also offer a valuable new perspective by focusing on the tragicomic miscues of the people who were ostensibly meant to &S220;govern&S221; out-of-control managements.

At Lehman, for example, the board failed to put a brake on an expanding portfolio of commercial real estate and risky securities. Between 2000 and 2007, while the risk committee met just twice a year, the full board approved salary, stock, options and bonuses for the C.E.O., Richard Fuld, totaling $484 million. In a September 2008 conference call, Mr. Fuld followed his announcement that the firm had lost $3.9 billion in the third quarter by declaring, &S220;I must say the board&S217;s been wonderfully supportive.&S221;

Four days later, Lehman filed for bankruptcy, costing shareholders $45 billion.

The authors note that Rick Wagoner, the former General Motors chairman, declared in 2008 that: &S220;I get good support from the board. We say, &S216;Here&S217;s what we&S217;re going to do and here&S217;s the time frame,&S217; and they say, &S216;Let us know how it comes out.&S217;&<60;&S221; (Memo to the board: your shareholders lost $52 billion in equity during Mr. Wagoner&S217;s watch.)

Mr. Gillespie and Mr. Zweig do not believe that the solution to board laxity lies solely in more regulations. They complain that boards tend to be focused more on avoiding legal problems than on &S220;formulating of company strategy, identifying risks, and evaluating executive performance.&S221;

THE authors conclude with a list of more than two dozen recommendations for comprehensive reform. These include creating a new class of &S220;public directors&S221; appointed to corporations by a special nonprofit organization, reform of voting procedures currently subject to manipulation by management and, simply but perhaps most important, a law prohibiting people from simultaneously holding the positions of chief executive and board chairman.

&S220;No one can reasonably expect a person to oversee himself or herself,&S221; the authors say. &S220;The C.E.O. works for the board, not the other way around; the continuation of combined roles inhibits the board in exercising its responsibilities because it creates an insurmountable imbalance of power,&S221; they write.

But no amount or manner of structural change can ensure that directors will step up and take responsibility for their fiduciary duties to shareholders, the authors assert. Boards overwhelmed by the power and glory of corporate chieftains tend to commit sins of omission, like not asking probing questions and not challenging management presentations of &S220;fact,&S221; rather than sins of commission like active participation in securities fraud.

Mr. Gillespie and Mr. Zweig drive this point home with a bit of black humor as they recount their jailhouse interview with L. Dennis Kozlowski, the former Tyco chairman and chief executive who was convicted of grand larceny and securities fraud. Asked to articulate the highest praise he could muster for his former board, Mr. Kozlowski replied, &S220;They didn&S217;t slow me down.&S221; Talk about money for nothing.

Off the Shelf: Taking Away Directors’ Rubber Stamps

WASHINGTON – The government will face a complex and delicate task when it moves to unwind the federal financial bailout that officially ends in October, and the rescue will leave a deep impact the economy long afterward, a report from a government watchdog panel says.

The $700 billion taxpayer bailout will leave a legacy in financial markets, which may now be convinced the government will rescue financial institutions considered too big to fail, according to a new report by the Congressional Oversight Panel.

That expectation gives big banks and other institutions an advantage in raising capital that smaller ones don't enjoy and encourages a "moral hazard" for the big banks to take risks again, the report released Thursday says.

It says that as a result of the so-called Troubled Asset Relief Program, or TARP, the Treasury Department now holds hundreds of billions of dollars of assets — about $258 billion as of Dec. 31 — that it must eventually sell. That will require a delicate balance between maximizing the return to taxpayers and maintaining financial stability.

"There are ... unavoidable political considerations that will affect these decisions, and that political context in the current environment can shift quickly and unpredictably," the report says.

There is also the question of how the banks, other financial firms and automakers that received bailout aid intend to make the taxpayers whole, according to the panel.

"In fact, TARP will live on for years," panel chairwoman Elizabeth Warren said in a call with reporters Wednesday, noting that Treasury will still have authority to dispense some funds and will be managing the hundreds of billions in assets. "Treasury must learn from the mistakes it made over the past year," she said.

In response to the report, Treasury spokeswoman Meg Reilly said the department "has demonstrated a cautious, transparent and disciplined approach in winding down the emergency programs, which is already yielding positive returns for taxpayers and the health of the economy."

Treasury estimates that TARP programs aimed at stabilizing the banking system will earn a profit thanks to dividends, interest, early repayments and the sale of the government's stakes in the institutions receiving aid, Reilly said in a statement.

"Taxpayers have already received over $16 billion in profits from all TARP programs and that profit could be considerably higher as Treasury sells additional (stakes) in the weeks ahead," she added.

The panel, one of three oversight mechanisms Congress mandated for the bailout that it enacted at the height of the financial crisis in October 2008, makes periodic assessments of how the government is managing the rescue program.

Banks once threatened by the undertow of a Wall Street collapse are now posting profits and proposing generous bonuses for their executives.

Treasury Secretary Timothy Geithner announced last month that the politically unpopular bailout program, originally slated to expire at the end of last year, would be extended until Oct. 3. The Obama administration says the fund is still needed to prevent further turmoil in the banking system.

The extension set up a struggle between Democrats who favor using some of the leftover TARP money to help generate jobs, and Republicans who say it should be used to shrink soaring budget deficits.

The administration projects that the losses to the government from the bailout will be around $116 billion — compared with an estimate of $340 billion in August. Most of the losses are expected to come from the rescue of General Motors and the bailout of insurance conglomerate American International Group Inc.

"Our stewardship has shown measurable progress," the Treasury spokeswoman's statement said.

President Barack Obama plans to announce Thursday a new fee on the country's biggest financial firms to recoup as much as $120 billion in TARP funds.

The panel's report noted that Treasury has put forward three principles to guide its decisions of when to sell the assets: maintaining the stability of the financial system, preserving the integrity of individual financial institutions, and maximizing return for taxpayers.

"These principles may sometimes be at odds with one another," it said. The most profitable time to sell an asset may not be the moment that best maintains financial stability or buttresses an institution.

Besides Warren, the panel also includes Rep. Jeb Hensarling, R-Texas; Paul Atkins, a former member of the Securities and Exchange Commission; Richard Neiman, superintendent of banks at the New York State Banking Department; and Damon Silvers, associate counsel of the AFL-CIO.

Panel: Unwinding bailout program to be tricky