All about business

Investors will return Monday for the final few trading days of the year, and with all three major indexes on track to suffer their worst declines in decades, it’s easy to understand why the market is eager to close the books on 2008.

The Dow Jones industrial average has tumbled 36% and is on track to suffer its worst annual decline since 1931.

The S&P 500 is off a whopping 40.5% this year, and is headed for its worst performance since the large-cap index was created in 1957. As it stands, this year’s decline is already much worse than the previous record decline of 29.7% in 1974.

The Nasdaq is down 42.5% versus last year. While the tech-heavy index is on the path to its worst annual performance in its 37 year history, the Nasdaq has seen much darker days. In the 12 months that ended March 2001, it fell nearly 60% as the dot.com bubble burst.

"This has been a year of superlatives," said Hugh Johnson, chairman of Johnson Illington Advisors, an Albany, N.Y.-based firm with nearly $700 million in assets under management. "[2008] has been dark and dismal, but if I had to sum it up in one word, it would be: historic."

Underlying these historic declines has been the worst economic shock since the Great Depression, and a full-blown recession that is now entering its second year.

What started as a "downturn" in the housing market, grew into a "mortgage-meltdown," which wreaked havoc on the "global financial system" and ultimately spawned a "credit crisis."

Of course, the popping of a massive energy bubble didn’t help matters.

As the problems on Wall Street spilled over to Main Street, the two became locked in a "negative feedback loop," said Johnson.

In other words, concerns about the health of the economy put pressure on the stock market, which further undermined the economy, driving stocks down further and putting more strain on the economy.

While these things played out, the nation lost nearly 2 million jobs.

In response to these historic events, governments around the world have taken unprecedented steps, including drastically lowering interest rates and making direct investments in some of the largest financial institutions payday cash advance.

Given the extraordinary challenges facing the world economy, what can investors expect going into 2009?

"The current consensus is that the economy will recover in the second half of 2009," Johnson said. "But the consensus tends to be wrong."

Based on historical patterns, however, an economic recovery could come suddenly and dramatically, Johnson said.

"Turning points can be very sharp and completely unexpected," he said. "Very few will see it coming."

As for next week, trading is expected to be choppy, with the market closed Thursday and many market participants on vacation. But investors will have a few economic reports to digest.

On Tuesday, the Conference Board will release its December index of consumer confidence, which is expected to rise to a reading of 45.2 from 44.9 in November. That would still be at the low end of the index on a historic basis, which reached an all-time low of 38.3 in October.

The Labor Department will report on weekly jobless claims Wednesday, after a 26-year high of 586,000 initial filings in the week ended Dec. 20.

Investors will get a fresh reading on the manufacturing sector Friday when the Institute for Supply Management releases its December survey of purchasing managers. The ISM index is expected to fall to a reading of 35.4 from a 26-year low of 36.2 in November, according to consensus estimates compiled by Briefing.com.

In corporate news, two of the nation’s top automakers, General Motors and Chrysler LLC., will take possession on Monday of the first part of the $13.4 billion in emergency loans from the government.

According to the terms of the Deal, Chrysler and GM will each recieve $4 billion on December 29. Then on January 16, 2009 GM will recieve the second payment - $5.4 billion. Finally, GM will get a third installment of $4 billion on February 17, 2009.

Trading could be volatile next week due to low volume and selling related to year-end tax loss strategies.

– CNNMoney.com’s David Goldman contributed to this report.  

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Stocks fell Tuesday in a sparsely traded session as the market limps toward the end of a brutal year.

The market had drifted lower for most of the day, but losses accelerated in late afternoon trade.

The Dow Jones industrial average (INDU) ended down 100 points, or 1.2%, for the day. The Standard & Poor’s 500 (SPX) index slid nearly 1% and the Nasdaq composite (COMP) ended 0.7% lower.

Stocks tumbled Monday after Toyota (TM) warned it will suffer an operating loss next year and Credit Suisse downgraded General Motors. Concerns about fourth-quarter corporate results and falling oil prices also weighed on the market.

Automakers remained under pressure as investors looked past the Bush administration’s $13.4 billion loan package for GM and Chrysler to focus on the grim long-term outlook for the sector. GM (GM, Fortune 500) fell nearly 14% and Ford Motor (F, Fortune 500) tumbled 16%.

Oil prices fell below $39 a barrel while the price of gold also settled lower. Prices for U.S. Treasury bonds fell as the government auctioned off another $28 billion in debt.

"Investors are looking to protect their positions into the end of the year," said Ryan Larson, senior equity trader at Voyageur Asset Management in Chicago. "Nobody’s willing to take new positions."

Trading is expected to be volatile for the remainder of the week, with many market participants out for the holiday. Markets will close early on Wednesday and will remain shuttered on Thursday for the Christmas holiday.

"On light volume days you just want to see the market trade flat," said Larson. "Down a quarter-percent is considered a win."

The glum tone of Tuesday’s session was set early by a raft of economic reports on housing, consumer sentiment and gross domestic product.

"We’ve compacted a lot of economic data into one day," said Art Hogan, chief market analyst with Jefferies & Co. in New York. But the market has already "priced in" much of the bad news, he added.

"Today’s data is either expected to be sloppy or is backward-looking," Hogan said.

Market breadth was negative. Declining shares outpaced advancers roughly two-to-one as about 37 million shares changed hands on the New York Stock Exchange.

Housing: The National Association of Realtors said sales of existing homes fell 8.6% in November to a seasonally adjusted annual rate of 4.49 million units from a downwardly revised 4.91 million units in October. November sales are down more than 10% versus last year and were weaker than the 4.93 million units economists forecasted.

The Realtors also said that the median existing home sold for $181,300 in November, down 13.2% from a year ago when the median was $208,800.

Separately, the Census Bureau said sales of new homes fell 2.9% in November to a seasonally adjusted annual rate of 407,000 from a downwardly revised total of 419,000 in October. That tally was worse than the seasonally adjusted 420,000 that economists forecasted.

While the data "surprised us on the down side," the ailing housing market "is certainly something where we’ve factored in a lot of bad news already," Hogan said payday loans.

Many economists say a recovery in the housing market is a crucial step towards restoring the economy’s health and limiting the current recession.

Consumers: The University of Michigan unexpectedly revised its consumer sentiment index higher to a reading of 60.1 from the 59.1 it announced on Dec. 12. Economists surveyed by Briefing.com had forecast a downward revision to 58.6.

"The most significant change recorded in the December survey was the record plunge in inflation expectations," said Richard Curtin, the director of the University of Michigan Surveys of Consumers in a statement.

Still, Curtin warned that rising unemployment and the weak economy remain major concerns for consumers.

Investors are concerned about the outlook for consumer spending, which makes up the bulk of the nation’s overall economic activity, as American households continue to curtail spending.

GDP: The Commerce Department said before the market opened that gross domestic product, the broadest measure of the nation’s economy, shrank at a 0.5% annual rate in the third quarter. It was the third and final revision for third-quarter GDP, and the decline was in line with economists’ expectations.

AmEx: The credit card company-turned-commercial bank said it has received preliminary approval for a $3.9 billion government bailout investment.

The capital injection will come from the Treasury Department’s $700 billion Troubled Asset Relief Program, which in part provides capital to banks. If approved, American Express (AXP, Fortune 500) would be the ninth-biggest capital investment of the more-than 100 investments Treasury has made in banks so far.

Shares of the company fell 2.5% despite the news.

Bonds: The benchmark 10-year note rose 3/32 to 114 1/32, and its yield rose to 2.16% from 2.14% on Monday. Treasury prices and yields move in opposite direction. The 10-year yield dipped below 3% in November for the first time since the note was first issued in 1962.

Lending rates were mixed. The 3-month Libor rate held steady at 1.47%, according to Bloomberg. The overnight Libor edged up to 0.12% from 0.11% Monday. Libor is a key bank lending rate.

Other markets: In global trading, Asia markets ended lower with the Hang Seng in Hong Kong falling nearly 3%. Japan’s Nikkei was closed. Major indexes in Europe were mixed.

The dollar fell versus the euro and the yen.

U.S. light crude oil for February delivery slid 93 cents to settle at $38.98 a barrel in New York.

COMEX gold for February delivery was fell $9.10 to settle at $838.10 an ounce.

Gasoline prices fell overnight to a national average of $1.659 from $1.663 a gallon, according to a survey of credit-card swipes released Monday by motorist group AAA.  

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Shares in Ireland’s three main banks soared on Monday after the government agreed to inject 5.5 billion euros ($7.7 billion) into the trio, taking one under its control, in a move that should boost lending to firms and homeowners.

Anglo Irish Bank () shares rose nearly 17 percent on the plan, which will give the government 75 percent control of the lender and eased fears it could collapse.

Bank of Ireland () shares rallied by over a third and Allied Irish Banks () jumped by more than a fifth. They will get a capital boost in return for giving the state 25 percent of voting rights on major issues.

“While the market will want to see some significant equity issuance in the New Year, this is a good start,” said analyst Scott Rankin of Davy Research in a note.

“On top of the 5.5 billion euros, the government says that it ‘has a substantial pool of additional capital available to underwrite and otherwise support the issuance of core tier 1 capital’. This should help put a floor under the banks and get us into the New Year.”

The government announced late on Sunday it would make an initial investment of 1.5 billion euros in Anglo Irish Bank, giving it control and a fixed annual dividend of 10 percent. Dublin said it would make further capital available if required.

The government will also invest 2 billion euros each in market leaders Bank of Ireland and Allied Irish through preference shares.

Investors have been waiting for months for a bailout plan to match schemes in other countries and pressure intensified last week after Anglo Irish revealed its chairman had kept shareholders in the dark about 87 million euros worth of loans he had received from the lender.

“The government’s commitment to make further capital available ensures that the bank will continue to be a sound and viable institution,” Anglo Irish Chairman Donal O’Connor said in a statement health insurance. Bank of Ireland said the injection would strengthen its capital base and give it the flexibility to raise more cash, and was positive for it and the Irish bank sector.

“It brings certainty at a time of great volatility and aids our ability to continue to support our customers and provide a meaningful return to our stockholders in the medium term,” Brian Goggin, BoI chief executive, said on a conference call.

Goggin said the raising of an extra 1 billion euros could come from issuance of new shares and/or preference shares, but only if it can be done on acceptable terms for existing investors.

The plan will lift BoI’s core tier 1 capital ratio to 8 percent from 6.3 percent at the end of September, in line with European peers after recent cashcalls. The ratio would rise to near 9 percent if it raised the extra 1 billion euros, it said.

Allied Irish Banks (AIB) also said it was aiming to raise an additional 1 billion euros from shareholders.

“We do feel this has a good chance of stabilizing the banks — whilst the quantum is smaller than we had hoped for, the implicit guarantee that the Irish government will do what it takes should help the banks in the near term,” said Alex Potter, analyst at Collins Stewart.

By 1009 GMT Anglo Irish Bank’s () shares were up 16.4 percent in London at 31 euro cents. Bank of Ireland () was up 36 percent at 90 cents and AIB () was up 20.5 percent at 1.99 euros. 

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The next bubble is here…but this is one many people want to see popped.

Investors are snapping up Treasurys as they seek a safe haven from the market turmoil whipsawing the world. So afraid of anything risky, investors are even willing to give up interest payments to make sure their principal is safe.

Four-week Treasurys offer no yield, while the rates on some longer-term U.S. securities are at their lowest level in decades.

Treasurys are viewed as one of the world’s safest investments because they are backed by the U.S. government. Investors, from foreign governments to gray-haired ladies, are stocking up so they can sleep better at night.

This flight to safety has pushed Treasurys to their highest prices and best returns in years. Bond prices move in the opposite direction from yields.

The three-month Treasury bill has returned 1.42% over the past 90 days and 4.01% over the past year, assuming interest is reinvested, as of Dec. 18.

The 10-year Treasury note has returned 11.29% over the past 90 days and 20.4% over the past year, while the 30-year bond has returned 23% over the past three months and 34% over the past year - their best returns since the 1982 recession.

Bubbles usually inspire frenzy and fear. Be it the 17th century tulip bubble, the dot-com bubble of the 1990s or, most recently, the real estate bubble, these manias don’t end well. The current so-called Treasury bubble, however, is different.

Most bubbles form because investors feel there’s lots of money to be made. As new people pile in to a particular asset, the price soars, further fueling the frenzy. When the craze finally ends, the price usually plummets.

Treasurys, however, have soared in popularity recently because people are afraid of other markets. Few investors feel they can make money in Treasurys. They are mainly just trying not to lose money.

"We’re seeing more that there is a lot of fear," said Sheryl King, senior U.S. economist at Merrill Lynch, who added that investors are flocking to Treasurys because the market is the most liquid in the world.

When the Treasury bubble does pop, it will likely be a sign that the economy is turning around and that credit is more available again, experts said no fax pay day loan. People will sell off their Treasury holdings because they think that stocks and corporate bonds will offer better returns.

Ward McCarthy, managing director of Stone & McCarthy Research Associates, thinks a potential sell-off in Treasurys would not "be indicative of trouble in Treasurys, but more an indication of better investment opportunities in other markets."

"We all hope that happens," he said.

Meanwhile, there are benefits to record low interest rates for Treasurys. It means that the U.S. government can borrow money at very low cost, which it will need to do next year since it is likely to spend heavily on infrastructure as part of a new economic stimulus package.

The popping of the Treasury bubble will not be pain free, however.

While investors are favoring shorter-term securities, some searching for more yield are piling into Treasurys with longer maturities. The yield on the benchmark 10-year note hit an all-time low of 2.07% Thursday.

But investors could lose money even on super-safe Treasurys. A swift increase in yields would send prices plummeting. For every 1 percentage point increase in yield on a 10-year note, investors would see a corresponding 7 percentage point drop in value, said Eric Jacobson, senior bond fund analyst at Morningstar.

It could happen. A year ago, the yield on a 10-year note was more than twice what it is now and 18 months ago, it was 5.26%

This would leave investors in a tough bind - either hold onto a note with yields that could be far lower than the market rates at the time or sell it at a steep loss.

Also, if rates rise next year, President-elect Barack Obama could find it more difficult to fund his stimulus package, which some say could reach $1 trillion.

"The interest tab on that borrowing could grow," said Jane D’Arista, director of programs at the Financial Markets Center. "It might limit the price tag of what Obama could do." 

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General Mills Inc., halfway through its fiscal year, reported a 3.1% quarterly profit decline on Wednesday but raised its expectations for the year because of strong worldwide demand for its products.

The Golden Valley, Minn.-based cereal maker’s earnings per share fell 3.1% to $378.2 million, or $1.09 per share, from $390.5 million, or $1.14 cents per share, last year.

Shares were flat, closing at $61.23.

Results included a 49-cent net reduction related to the value of commodity positions and a 22-cent gain from the sale of Pop Secret. Without the current charge, earnings per share would have totaled $1.36, up from $1.11 this period the previous year.

Analysts polled by Thomson Financial, which typically excludes one-time items from its estimates, had forecast $1.23 per share.

Net sales at General Mills (GIS, Fortune 500) rose 8% to $4.01 billion, roughly matching the Thomson Financial consensus of analysts’ estimates.

Erin Ashley Smith, a securities analyst at Argus Research Co., said the company’s consumers know and trust the company’s brands as affordable and healthy options.

"Consumers will choose a yogurt brand they trust if it’s only slightly more expensive than a private label," Smith said. "Brands that don’t have the recognition of Yoplait, for example, have a tough time competing."

General Mills raised earnings targets for fiscal 2009. The company now expects earnings of $3.83 to $3.87 per share, up from $3.81 to $3.85. Analysts expect $3.89 a share.

In a conference call, CEO Ken Powell said the company is on track for "solid year of growth."

General Mills has benefited as the recession has forced more consumers to eat in instead of going to restaurants, he said.

"This trend is a good one for General Mills overall, because at-home food is our biggest business," Powell said faxless pay day loans.

The Pillsbury brand enjoys a 68% market share, and Totino’s pizza products account for one-third of division sales, Powell added.

For the first half of fiscal 2009, General Mills saw sales gains in every division and segment in the business, with more than half growing at double-digit rates, Powell said.

Price increases "are part of our story here," Powell said. "But it showed our products are staples for many consumers, ranking either No. 1 or No. 2 in major retail categories."

Powell said the company planned to introduce new flavors of cereal brands like Cheerios and Shredded Wheat, as well as varieties of Progresso soup designed to appeal to Hispanic consumers. "Innovation is the key to driving sales and earnings growth," he said.

General Mills is a rare bright spot in the S&P 500 - outperforming it by 40% over the last year - and the food manufacturing industry as a whole. In September, General Mills reported that revenue rose 14% in its first fiscal quarter.

The company is performing much better than its rivals. Shares of Kraft Foods (KFT, Fortune 500) and cereal rival Kellogg (K, Fortune 500) are both down almost 20%. ConAgra Foods (CAG, Fortune 500), which makes Chef Boyardee and Hebrew National brands, has plummeted almost 40%.

Smith said she expected the company to continue doing well through the fiscal year. But the stock price is "challenging," she said.

"One bad event might be looked at as more of a negative than it should," Smith said. "If they don’t outperform in one quarter, it could punish the stock." 

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When the nation’s construction industry suffers, architects are among the first to notice. So, it’s no surprise that things have begun to slow down at local firms.

"You see the architects as the canary in the mine shaft," said Dan Jay, principal at the St. Louis architecture firm Christner Inc. "We’re the first to feel the pinch."

Jay’s firm is among several in St. Louis that have been forced to lay off workers because of a lack of work. Across St. Louis’ 175 firms, about 200 architects and support service workers have been laid off since October, according to an estimate by Michelle Swatek, executive director of the American Institute of Architects’ St. Louis office.

Nationally, the level of billings and inquiries for architectural work dropped to historic lows in October, according to the most recent monthly survey of firms performed by the American Institute of Architecture.

Many architecture companies are small, so tough times can be particularly hard on the profession, said Kermit Baker, chief economist for AIA. Like most small businesses, these firms often don’t have massive cash reserves and, on average, have only five to seven months of work lined up.

"It’s a struggle to keep current customers paying on time and keep your staff billable," Baker said. "The general sense is most firms have excess staffing now and are waiting for new project work to come in."

This isn’t the first time the profession has experienced trouble, so companies prepare for the lean times. For example, in 2000, when commercial construction began a four-year slide, Pat Whitaker made changes at her firm, Arcturis.

At the time, most of the company’s revenue came from corporate clients. So Arcturis tried to add clients from the public sector — higher education and data centers, Whitaker said. It also stretched into planning, civil engineering and graphic design. As a result, Arcturis more than quadrupled revenue from $4.2 million in 2002 to $19 million in 2008 and increased from 50 to 140 workers, she said.

Many architecture firms similarly have diversified, Whitaker noted. At Arcturis, such moves have helped it remain relatively stable in tough times, even though it recently laid off 15 people. But in hopes of bringing some workers back when conditions improve, the firm provided severance pay and outplacement services to laid-off workers.

"We saw (layoffs) coming, but there’s not much you can do," Whitaker said.

easy fast payday loans.stltoday.com/stltoday/images/bullet.gif” width=”5″ height=”5″ alt=”bullet” border=”0″/> Key U.S. rate, bank loans show rescue not working

 Stocks stumble amid manufacturing woes

Architect Dan Kirchner saw it coming two weeks ago when he was laid off from another local company. Kirchner, 46, spend 15 years at a company that focused on redesigning retail buildings.

"The retailers aren’t doing so well and most business expansions are based on sales," said Kirchner, who lives in House Springs. "If the sales aren’t there, they’re not going to expand."

It was the second time Kirchner has been laid off, so when he got the news, he was disappointed but not surprised.

Not all firms are experiencing difficulties, though. Since October, Clayton-based Bond Wolfe Architects has increased its employment by two to 18 and it will be hiring one more person in coming months, said Susan Pruchnicki, principal. But the hirings don’t mean Pruchnicki is ignoring what’s going on. She said she’s simply responding to the demand.

"I’m waiting for the other shoe to drop," Pruchnicki said. "But right now, we have work to do. We are busy. It’s a service-based industry."

Bond Wolfe is staying busy by focusing on projects such as firehouses or schools. Others try projects outside the region.

That tactic can provide temporary relief. But out-of-town companies usually do the same kind of thing.

Perhaps all that can be done, Pruchnicki said, is for architects to be patient.

"We are an economy-driven industry," she said "We require people to build stuff to keep busy … I think if people stay calm and look at the big picture, it’s natural that these things happen."

That may be true, but the fluctuations have left some architects, such as Dan Kirchner, deeply concerned. He hopes demand for environmental building standards will create more jobs soon. But after a six-month layoff early in his career, he won’t wait much longer. "If nothing comes up in six months, I’ll switch to another career," he said.

cboyce@post-dispatch.com | 314-340-8345

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The U.S. dollar was mixed Friday, after tumbling to a 13-year low versus the yen, as the U.S. government scrambled to salvage a bailout deal for the nation’s ailing automakers.

Japan’s yen dragged the dollar to ¥89.42 in early trading, breaking through the psychologically important ¥90 level for the first time since 1995. But the dollar regained ground later in the day to trade at ¥91.13, down from ¥91.61 late Thursday.

Meanwhile, the British pound retreated against the dollar, while the euro held its ground after a big rally in the previous session.

The 15-nation euro was trading at $1.3367 from $1.3353. The pound slid to $1.4944 from $1.5024.

The dollar’s narrow range comes as investors responded to the collapse Thursday night of a proposed $14 billion government loan package for General Motors (GM, Fortune 500) and Chrysler.

"The failure of the rescue package for the automakers was another disappointing outcome," said Gareth Sylvester, currency strategist at foreign exchange brokerage HiFX. "It creates uncertainty and that’s what’s driving the market right now."

General Motors and Chrysler have both said they will run out of the cash needed to stay in business next year if they do not receive the government loans they have requested. Investors worry that a bankruptcy in the auto industry will exacerbate already rising unemployment and further undermine the economy.

But the market was bolstered by signs that the Treasury Department may authorize some of the $700 billion bailout passed in October to help aid the automakers.

Shifting pattern: On Thursday, the euro jumped 4 cents against the dollar to a high of $1 advance payday loans.34, breaking out of the range it had been in since October.

At the same time, stock prices tumbled, prompting some analysts to speculate that the correlation between the dollar and world equity markets was weakening.

The greenback often rallies when stock prices fall as investors pull out of more risky assets and take shelter in dollars. Conversely, the dollar often falls when stocks rise, indicating that investors’ appetite for risk has increased.

"The correlation between the currency and equity markets has been weakening recently," said Steve Malyon, currency strategist at Scotia Capital in Toronto, in a research report.

However, Malyon notes that the declines in the stock market in December have been less severe than in previous months.

"This has made it more difficult to determine whether the dollar retains the safe-haven allure that was so evident in October and November," Malyon added.

Stocks seesawed Friday as investors responded to the uncertainty surrounding the automaker bailout. The Dow Jones industrial average ended up 65 points.

Sylvester thinks the dollar will remain linked with the stock market. But he added that the swings are likely to be less dramatic as market volatility subsides.

"Will we see dollar rally as strongly as we’ve seen in the past few months, probably not," he said. But the "prolonged bottoming out process [happening in the stock market] will keep the dollar buoyed." 

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American Express Co. is taking advantage of new government liquidity programs by raising billions of dollars in fresh capital, according to a regulatory filing submitted Tuesday.

American Express (AXP, Fortune 500) said it issued $5.5 billion in new debt as part of a guarantee program run by the Federal Deposit Insurance Corp., according to a filing with the Securities and Exchange Commission. The financial services firm, which is primarily focused on credit card lending, also had raised about $4.6 billion in capital as of Dec. 5, through the launch of a retail certificate of deposit program through its banking subsidiaries.

The financial firm could also borrow money from the Federal Reserve using credit card receivables as collateral, according to the filing. In October, American Express received approval to borrow from the Federal Reserve Bank of San Francisco.

Last month, American Express received approval to convert to a bank holding company amid the ongoing credit crisis. The move allows American Express to tap into more government lending programs aimed at spurring more lending between financial firms and to consumers. The status change also allows American Express to create a large deposit base to help fund its operations.

Deposits can provide financial firms a large, stable base for funding operations when many other avenues for raising capital, such as the securitization market, are nearly at a standstill affordable car insurance. Multiple financial firms have become bank holding companies, such as Goldman Sachs Group Inc. (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500), to allow them to build strong deposit bases and allow for wider access to government programs that were traditionally reserved for commercial banks.

Under the FDIC guarantee program, American Express said it would be able to offer up to $13.3 billion of unsecured debt that would have the backing of the FDIC. The $5.5 billion already issued matures in 2010 and 2011.

Through the program, a financial institution can issue debt to raise capital, and the debt will have the backing of the federal government - considered the most creditworthy borrower around. The benefit to investors is that the bonds earn a higher yield than government debt.

Other financial institutions including Goldman Sachs and Citigroup Inc (C, Fortune 500). have signed up for the FDIC guarantee program as well.

American Express said that it will use some of the new capital from the debt offering and certificates of deposit to pay off $3.6 billion of long-term debt obligations maturing during the quarter ending Dec. 31.

Shares of American Express fell 25 cents to $24.19 in morning trading. 

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Joe the Plumber must be pleased: President-elect Barack Obama has recently hinted he’ll delay his plan to raise taxes on individuals earning more than $250,000 a year. But what will this reprieve really mean for small business owners - should they prepare for an eventual tax hike?

That depends, say tax experts, on how your business is incorporated, and how much money it makes.

Technically, Obama’s plan is less a tax hike than the rollback of a tax cut. Between 2001 and 2003, President George W. Bush cut the top income-tax rate from 39.6% to 35%. After initially suggesting he’d restore the 39.6% top rate starting next year, Obama has more recently indicated he may wait till after 2010, when the Bush tax cuts will expire unless Congress votes to extend them.

The higher rate would affect only taxpayers in the top two brackets, which would be adjusted to include only those earning over $250,000 a year ($200,000 for single filers). For small business owners, the effects of these changes depend on how your business is organized.

Most small businesses are structured as either sole proprietorships, limited liability corporations (LLCs) or partnerships (LLPs), or under subchapter S of the IRS code (S-corps). These operate as so-called "pass-through" entities, because they don’t pay taxes themselves: Their income or losses are declared on the tax returns of their owners.

If you’re the sole owner of a business operating as an LLC, then under Obama’s plan, you’d see your income taxes rise if your household’s total income for 2009, including that of the business, exceeded $250,000.

Tax experts stress, though, that "income" here is net, not gross. If your business has sales of more than $250,000, you won’t be hit with a higher tax bill unless you’re taking home more than $250,000 in profits that you report as income on your personal taxes.

"What you pass through is your net profit - the receipts less all the expenses, labor costs, and so forth," says Eric Toder of the Tax Policy Center, a joint project of the centrist Brookings Institution and the liberal Urban Institute. A business with enough expenses to keep its profits low, then, would not see an increased tax bill.

Because of this, even the owners of many larger businesses could see their taxes remain steady under the Obama tax plan or even fall. The Tax Policy Center has estimated that of tax filers for whom more than 50% of their income comes from small-business sources, about 335,000, or 2.7%, would see their taxes rise. Toder says the center hasn’t calculated how many small business owners would benefit from various tax credits Obama has proposed.

In total, the center forecast that Obama’s proposed increases for the top two tax brackets would increase revenue by $43 billion in 2009 and $45 billion in 2010.

There are other tax changes in the works that could affect business owners’ bottom lines fast pay day loan. Social Security may face shortfalls in coming years as the Baby Boom generation hits retirement age. During his campaign, Obama floated the idea of poking holes in the income cap on taxes that support Social Security. Currently, portions of both payroll (FICA) and self-employment taxes (SECA) are capped. The 2008 cap is $102,000 a year; you don’t pay into Social Security for any income above that level.

Another potential tax-law change, meanwhile, is brewing in Congress, where Rep. Charles Rangel, chair of the powerful House Ways and Means Committee, last month told Bloomberg Television he’d move to slice the corporate income tax rate from 35% to 28%. This would have no effect on "pass through" corporations, but would present a dramatic tax savings for corporations organized under subchapter C (C-corps), which must pay corporate taxes. Obama might support such a plan: During the campaign, his economic policy director said that Obama would like to cut the corporate tax rate.

To pay for that cut, Rangel has also suggested raising the top income-tax rate to as high as 43.6%, up from 35% today, though this seems unlikely to gain the support of the Obama administration, let alone Congressional Republicans.

For business owners hit by any new taxes, meanwhile, there are limited options, say accounting experts.

"There isn’t anything they can do that will help a lot," says Kip Dellinger, a CPA and senior tax partner with Kallman and Co. in West Los Angeles. "There may be a big push among the self-employed to try to put more money into retirement plans" - using assumptions about retiring at the earliest age possible, and pessimistic projections on returns, to allow higher contributions that will enable you reduce your taxable income to below the new top bracket.

Another option would be to shift declared income to a tax year where the old, lower rates still apply, or to a year with higher offsetting expenses, to avoid the higher rate. "It’s not difficult to accelerate income for tax purposes," notes Dellinger. The IRS’s attitude, he says, is: "If you want to report and pay tax on it, we’ll be glad to take the money."

On the other hand, given that most small business owners won’t have to worry about showing more than $250,000 in profit - especially in today’s consumer climate - Toder suggests that small business owners would be better off watching debates over health insurance reform than changes to the tax code.

"That will probably have a more profound effect on small businesses than the tax rate increases," he says. 

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Car rental company Avis Budget Group Inc. said Thursday that it has cut more than 2,200 jobs and taken other steps to meet its goal of reducing annual costs by $150 million to $200 million by the middle of 2009.

Avis shares advanced 6 cents, or 8.7%, to 75 cents in after-hours trading when the status of the program was announced, after dropping 12 cents, or 15%, to 69 cents during the regular session. The stock has traded between 38 cents and $18 during the past 52 weeks.

"We’re pleased with our progress to date, which when combined with the steps taken in the third quarter, will allow us to enter the new year with more than $150 million of incremental cost-reduction flowing through our income statement," said Avis Budget Group Chairman and Chief Executive Ronald L. Nelson in a statement.

"Nevertheless," he added, "it is our intention to continue our relentless focus on cost containment even if and when economic conditions improve, so that we can achieve our ultimate goal of restoring our margins to previous levels online pay day loan."

In the past weeks, Avis said it has frozen management salaries, downsized its planned fleet and cut more than 2,200 jobs across its business. Avis said it offered buyouts before turning to involuntary staff reductions.

The company will also close its claims-processing facility in Orlando, Fla., as well as its customer contact center in Wichita Falls, Texas.

Avis (CAR, Fortune 500) recently announced an increase in rates for most car rentals of $3 per day and $20 per week, which took effect Monday. The company has also closed some underperforming off-airport locations.

In its statement, Avis urged the federal government to take steps to bolster liquidity in vehicle financing markets. Nelson said government action would help minimize the potential need for further job cuts. 

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