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Richard Jerram of Macquarie Group Ltd. will become the company’s head of Asian economics and leave his position as top Japan analyst, a move that reflects China’s rise and a shift toward regional rather than country- based coverage.

The Tokyo-based economist will start publishing reports on the region on Feb. 8, Jerram said by phone today. The company hasn’t named anyone to replace him as Japan economist, he said.

“We’re not differentiating between Japan and the rest of the region,” said the 46-year-old Englishman. “The ties at the company level, the sector level and the economic level are increasingly making these distinctions artificial.”

Jerram, known for criticizing the Bank of Japan’s deflation-fighting credentials, came to the country in 1987 during the economic bubble that saw the Nikkei 225 Stock Average peak at almost four time’s today’s level. In the two decades that followed the 1990 crash, the economy fell into four recessions and grew at an average pace of 1.5 percent.

“The thing which becomes tiresome after a while is the reluctance to address problems that have fairly orthodox solutions,” the economist said. “Why would you have a policy framework that pretty much guarantees the occurrence of deflation?”

Price Declines

Even as the economy struggled to escape a cycle of declining prices that drove wages down more than 10 percent in the past decade, the Bank of Japan said price stability was anything between “about between zero and 2 percent.” That language invited the perception the bank tolerated zero growth in prices, Jerram has said.

The central bank in December revised its “understanding of stable prices,” saying stability was anything “in the positive range at or below 2 percent.” The shift came after Deputy Prime Minister Naoto Kan voiced concern the recovery was under threat from deflation.

Kan has continued his pleas for the Bank of Japan to fight price declines since he added the finance portfolio to his responsibilities in January. Bank of Japan Governor Masaaki Shirakawa this week responded by saying there’s no “magic” solution for defeating deflation.

“The government’s given them a bit of a push, but not getting much back,” Jerram said of the bank’s move. “They’re still saying a lot of stuff in terms of ‘there’s nothing more we can do.’”

London School of Economics

After a stint in England, where he got a doctorate from the London School of Economics, Jerram returned to Japan, where he worked for eight years as chief economist at ING Securities before the business was bought in 2004 by Macquarie, Australia’s biggest investment bank.

Macquarie agreed yesterday to buy the equity trading and research operations of Sal. Oppenheim Jr. & Cie. KGaA to expand its business in Europe. The Sydney-based bank is also adding to its Asia research staff, particularly in China and India, Jerram said.

“Asia has been far ahead on the global recovery cycle and its going to face some interesting challenges,” Jerram said. “Quite a lot of these countries, in contrast to previous times when they lagged behind the policy cycle in the U.S., are going to have to lead this time.”

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A federal judge has appointed a receiver, Atec Inc., to run the Golf Discount store chain, Mid-Rivers Golf Links and other properties associated with entrepreneur and former golf pro Ned Story.

Centrue Bank claims the companies defaulted on $20 million in loans, which came due early this month.

In asking for a receiver, the bank said the borrowers lack the money to keep the business operating until golfing picks up with warmer weather. The bank said it is "legitimately fearful that its collateral has been, is and will continue to be consumed, used or dissipated," according to documents filed with the U.S. district court in St. Louis. Judge Terry Adelman is hearing the case.

In court papers, the bank said it would fund the receiver, which should allow the businesses to continue operating. Golf Discount stores were open for business this week.

The default is another blow to Centrue. The bank lost $22 million in the first nine months of this year and 8 percent of its loans were behind in payments as of September, more than twice the level at similar banks.

The Federal Reserve last month banned the bank from paying dividends to shareholders and told it to clean up bad loans and improve its lending practices cash advance. The bank has $1.3 billion in assets.

Golf Discount, based in St. Peters, has 18 stores in seven states, including stores in Mehlville, Chesterfield, Ballwin and St. Peters. The bank said its loans are also secured by property at Old Hickory Golf Club and Mid-Rivers Golf Links, both in St. Peters, and golf properties near Kansas City and in Kansas, Arizona and Tennessee.

Story and officials of the golfing companies did not return phone calls.

It’s been a rough go for golf clubs in general, says Scott Hovis, executive director of the Missouri Golf Association. An association survey showed that golf club memberships fell 10 to 15 percent in 2008 in the state. Figures for last year are not yet available, but Hovis feels the business has "flattened," with little growth or shrinkage.

"Golf courses throughout America are struggling," he said, as the economy forces customers to cut back on luxuries. Still, club failures in Missouri have been few, said Hovis.

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German consumer prices posted their highest annual gain in eight months in December after energy costs increased.

The inflation rate, calculated using a harmonized European Union method, rose to 0.8 percent from 0.3 percent in November, the Federal Statistics Office in Wiesbaden said today. That’s the highest level since April. Economists predicted prices would increase an annual 0.7 percent, according to the median of 19 forecasts in a Bloomberg News survey. From the previous month, prices rose 0.9 percent.

Crude oil prices have almost doubled in the past year, undermining confidence just as the economy recovers from the worst recession in more than six decades. While German economic growth accelerated in the third quarter, rising unemployment may prompt consumers to keep a rein on spending. The Bundesbank said this month that inflation will remain benign and predicted that unemployment will increase to 10.1 percent in 2011 from 8.1 percent today.

“Energy prices are still driving the inflation rate,” said Laurent Bilke, a former European Central Bank economist now at Nomura International Plc in London. “Underlying inflation, however, is still weak and is likely to remain so well into 2010.”

Germany’s economy emerged from the recession in the second quarter and growth accelerated to 0.7 percent in the third. Chancellor Angela Merkel’s government is spending 85 billion euros ($123 billion) to stimulate activity and the ECB has cut its benchmark rate to a record-low 1 percent as inflation risks remain contained.

‘Safely Below’

“Our interest-rate decisions are to be seen in connection with our price-stability goal, and in this context I do not see major threats for price stability in the near future,” ECB Governing Council member Ewald Nowotny said in an interview with Bloomberg News on Dec. 14. “Inflation rates will be on the positive side but it will be safely below the inflation target of the ECB.”

In the 16-nation euro area, consumer prices rose an annual 0.5 percent in November after declining 0.1 percent in the previous month. The ECB aims to keep inflation just below 2 percent. Data for December will be published on Jan. 5.

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WASHINGTON–The U.S. economy flashed a warning sign of inflation Tuesday, but the recovery is so fragile that experts say a scenario of runaway prices and higher interest rates is a long way off, if it happens at all.

Overall wholesale prices jumped 1.8 per cent in November, the department of labour said, more than double the gain expected. Core inflation, which excludes energy and food, rose 0.5 per cent, the sharpest increase in more than a year.

The U.S. government will release its look at consumer prices on Wednesday instant payday loan. Economists predict a more moderate gain of 0.4 per cent, with core consumer prices expected to rise 0.1 per cent.

U.S. auto sales, meanwhile, will rise 20 per cent in 2010 as the industry starts recovering from its worst year in almost three decades, according to a forecast Tuesday from the Michigan-based Center for Automotive Research.

From the Star’s wire services

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Arizona Public Service Co. has spent $8.5 million in the past four years on a program to help lower the cost of energy saving compact fluorescent lightbulbs.

Since 2005, the company has provided a discount of about $1 per bulb to retailers to help keep the cost low. Under the program, there have been more than 8.8 million lights sold through participating retailers.

The program is funded by fees charged to customers and approved by the Arizona Corporation Commission paperless payday loans.

APS officials estimate its customers will save about $350 million over the lifetime of the bulbs, which can last five years or more.

To further encourage people to switch their lighting habits, APS has rolled out an online calculator that can estimate the savings at homes that switch to CFLs.

For info: www.aps.com/MyCFL

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The economy expanded or improved “modestly” across the U.S. from October to mid-November as consumer spending rose in a majority of Federal Reserve districts, the central bank said.

Eight regions “indicated some pickup in activity or improvement in conditions,” while the other four said conditions were little changed or mixed, the Fed said today in its Beige Book business survey, published two weeks before officials meet to set monetary policy. The labor and commercial real estate markets remained “weak,” the report said.

Policy makers last month repeated their pledge to keep interest rates low for an “extended period” to bring down unemployment that’s forecast to remain above 10 percent even as the economy emerges from recession. A government report Dec. 4 is likely to show that companies reduced payrolls for a 23rd straight month, according to a Bloomberg survey of economists.

“Economic conditions have generally improved modestly since the last report,” the Fed said. “Financial institutions generally reported steady to weaker loan demand, continued tight credit standards, and steady or deteriorating loan quality.”

Today’s Beige Book reflects information collected through Nov. 20 and summarized by staffers at the New York Fed. The four districts that didn’t report an improved economy were Atlanta, Cleveland, Philadelphia and Richmond.

Fed Chairman Ben S. Bernanke testifies tomorrow before the Senate Banking Committee in a confirmation hearing for a second term that would begin Feb. 1. The Fed’s policy-setting Open Market Committee next meets Dec. 15-16 in Washington.

Stocks Rise

Stocks erased losses following the release of the Beige Book. The Standard & Poor’s 500 Index added less than 0.1 percent to 1,109.24 at 4:05 p.m. in New York. The index has jumped more than 63 percent from its 2009 low on March 9 on prospects for a recovery from recession.

“This report is a little more upbeat than the previous one,” said former Fed Governor Lyle Gramley, who is now a senior economic adviser with New York-based Soleil Securities Corp. “Most districts are seeing the economy pick up just a little.”

The world’s largest economy grew at a 2.8 percent annual pace in the third quarter, the first expansion after four quarters of contraction and the fastest rate in two years.

Consumer spending, excluding autos, rose in seven districts, was “steady or mixed” in four and declined in one, St. Louis, the Fed said. Vehicle sales increased in six districts. Some regional banks said retailers had “recently become more optimistic about the holiday-season outlook.”

Consumer Spending

A report last month showed that consumer spending, which accounts for about 70 percent of the economy, rebounded in October more than anticipated by economists. Incomes climbed 0.2 percent, also exceeding expectations.

Richmond Fed President Jeffrey Lacker said today that the U.S. economy “has hit bottom” and a recovery is “solidly under way,” with housing and consumer purchases of autos no longer a drag on growth.

While the labor market “remained weak since the last report, with further layoffs, sluggish hiring and high levels of unemployment in most districts,” the report said three districts had a slower pace of job cuts. In the Boston district, some businesses said they were starting to hire and reverse pay cuts or freezes.

The economy has lost 7.3 million jobs since the recession began in December 2007. The unemployment rate may exceed 10 percent through the first half of 2010, a Bloomberg survey showed.

Commercial Real Estate

Commercial real estate remained a problem area for the economy, with markets and construction “depicted as very weak and, in many cases, deteriorating,” the Fed said.

The commercial mortgage default rate on loans held by U.S. banks more than doubled to 3.4 percent in the third quarter from a year earlier as vacancies rose and rents declined, according to a report by Real Estate Econometrics LLC.

Bernanke said in a Nov. 16 speech that “fallout” for banks from commercial real estate could slow the country’s economic recovery.

While most regions reported increased home sales, new construction was “generally characterized as weak.” Three districts showed “some pickup” in home building, two reported declines and three said it was “flat or stabilizing.” The lower end of the market has been doing better than the higher end, the Fed said.

Home Sales

The number of contracts to buy U.S. previously owned homes unexpectedly rose in October, a report yesterday showed, as consumers rushed to take advantage of a tax credit that was due to expire. President Barack Obama on Nov. 6 extended the $8,000 tax credit for first-time buyers until April 30 from Nov. 30, and expanded it to include some current owners.

Sales of new homes increased 6.2 percent in October to a 430,000 annual rate, the fastest since September 2008.

In manufacturing, conditions were “on balance, steady to moderately improving across most of the country,” the Fed said. A report yesterday showed manufacturing in the U.S. expanded in November for a fourth consecutive month.

Fed regions “generally reported little or no upward wage pressures,” with most showing “stable selling prices.” Some districts “noted upward pressure in commodity prices,” the report said.

The Federal Open Market Committee repeated in its Nov. 4 statement that “with substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the committee expects that inflation will remain subdued for some time.”

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Air Canada has become the first Canadian airline to offer in-flight Internet access to at least some of its passengers.

The airline launched a 10-week trial period Friday, during which select flights on the Montreal-Los Angeles and Toronto-Los Angeles routes will offer Web surfing.

Access will cost $9.95 (U.S.) for a laptop and $7.95 for smartphones and PDAs.

The service, known as Gogo, will initially be available only when flying over the territorial U.S.

At the end of the 10-week trial on Jan. 29, the airline will consider expanding the service to other routes.

A spokesperson for Air Canada said a full launch of the service will depend on the outcome of the trial, regulatory approval and developing the necessary ground infrastructure in Canada to provide a domestic network.

Initially, the system will be available on Aircell, a U.S.-only high-speed mobile network for aviation. Air Canada said it hopes to assist in the development of a Canadian air-to-ground network in the near future.

The airline’s chief domestic competitor, WestJet, said it has no immediate plans to offer wireless on its flights but said it will continue to evaluate the concept.

In-flight Internet access through the Gogo network is already available on some U.S. airlines, including Virgin America, Delta, AirTran and American Airlines.

With files from Reuters

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India’s central bank must tighten its monetary policy “fairly soon” to stem inflation, the Organization for Economic Cooperation and Development said.

“Given the magnitude of easing and the speed at which inflation has bounced back, monetary policy will need to be tightened fairly soon,” the Paris-based OECD said about India in a report released yesterday.

Expectations of higher interest rates have sent Indian bond prices down by 5.9 percent in 2009, the worst performance among 10 Asian local-currency debt markets tracked by HSBC Holdings Plc. The central bank took the first steps to raise borrowing costs last month by ordering lenders to set aside a bigger proportion of their deposits in government bonds.

India’s consumer price index for industrial workers may average 5.4 percent in the 12 months starting April 1, more than double the rate in the current year, the OECD said. During the same period, India’s economic growth may accelerate to 7.3 percent from 6.1 percent, it estimates.

Central bank Governor Duvvuri Subbarao has injected 5.85 trillion rupees ($126 billion) of cash into the economy since September 2008 to protect India from the worst financial crisis since the 1930s.

In the last monetary policy announcement on Oct. 27, Subbarao raised the statutory liquidity ratio to 25 percent from 24 percent and kept the benchmark policy rates unchanged . He maintained the central bank’s economic growth forecast for the year ending March 31 at 6 percent “with an upward bias.”

Inflation Pressures

“Given that activity is expected to strengthen relatively quickly and that the recovery is likely to have begun with only a modest level of slack in the economy, delayed fiscal consolidation will also contribute to higher inflationary pressures,” the OECD said.

India also loosened the fiscal policy to stimulate the economy amid the global recession, cutting excise and customs tax rates, raising government salaries and stepping up spending on roads and power.

As a result, India’s national budget deficit, including federal and state government finances, may reach 10.1 percent of gross domestic product in the year ending March 31 from 4.2 percent of GDP two years ago, the OECD said.

The OECD said it projects only a “modest narrowing” in the budget shortfall because much of the increase in expenditure in the past year, such as the rise in salaries of government workers, is permanent in nature.

The deficit is forecast by the OECD to narrow to 9 percent of GDP in the next financial year starting April 1.

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The U.S. economic recovery still faces many hurdles, including a persistently weak labor market and strained household budgets, Janet Yellen, President of the Federal Reserve Bank of San Francisco, said on Tuesday.

Yellen said in a speech to a local organization she was not worried about inflation, arguing instead that the possibility of a problematic drop in consumer prices remains the greater risk.

“The strength and durability of the expansion is in question,” Yellen said. “Some of the rebound is due to temporary government programs and a swing in inventory investment that will not provide an ongoing source of growth.”

Still, she credited the very same government efforts, in conjunction with unprecedented monetary stimulus from central banks worldwide, for reviving growth in the third quarter.

The U.S. economy expanded 3.5 percent during that period, following the worst recession in generations. Whether the private sector can pick up the slack once the government boost is gone remains to be seen, Yellen said.

“The danger is that demand may grow at too anemic a pace to support vigorous expansion,” said Yellen.

Addressing the nation’s battered housing market, Yellen said signs of stabilization were an important positive easy payday loans. But she cautioned that the high unemployment rate, currently at a 26-year high of 10.2 percent, raised the threat of a renewed wave of foreclosures that could again pressure home prices.

The outlook for commercial real estate is “worrisome,” Yellen said.

Given the recession’s toll, U.S. consumers are still strapped for cash, and stagnant incomes are not helping.

“High unemployment, weak job growth, and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery,” said Yellen.

Another possible impediment to a vibrant recovery is the banking sector, which is still facing a mountain of bad loans, Yellen argued.

“It may take quite a while for financial institutions to heal to the point that normal credit flows are restored. The credit crunch hasn’t entirely gone away,” she said.

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama and James Dalgleish)

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Charles Schwab Corp expects to waive about $100 million in money market fees in the current quarter, up 28 percent from the previous quarter, the largest U.S. discount brokerage said on Thursday.

Management, speaking at a quarterly update for investors, added that the first 100 basis-point rise in interest rates could eliminate fee waivers altogether.

With near-zero interest rates continuing to hamper the online brokerage, it said Thursday it would incrementally move billions of dollars — but no more than $10 billion — from clients’ money market funds into its bank unit in 2010.

Schwab had $178.7 billion in client money market funds at the end of September.

Low interest rates, brought on by the recession, have forced the company to waive the fees it charges clients in managed funds. Schwab, by far the biggest online broker, also runs a fast-growing bank and offers investment advice.

The $100 million in fourth quarter waivers would be up from $78 million in the third quarter, and $36 million in the first half of the year payday loans online. It is also higher than the company’s previous forecast, which suggested $86 million in waivers remained this year.

Schwab shares were little changed after the new forecast. They were up 1.8 percent at $17.25 on the Nasdaq.

Chief Financial Officer Joe Martinetto said the company was preserving capital and flexibility amid market uncertainty, but “we’re now thinking that maybe the worst of that has past us.

“There is a substantial number that still sits out in money funds that we would see migrating toward the bank,” Martinetto said, adding later that $10 billion was the absolute most that could transfer next year.

San Francisco-based Schwab, which broadcasted its investor update online, posted a 34 percent profit drop in the third quarter, meeting Wall Street expectations.

(Reporting by Jonathan Spicer; Editing by Tim Dobbyn)

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