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The Federal Reserve is worried about indecision in Congress.

At its last meeting in April, the central bank’s top officials discussed how coming tax increases and spending cuts could weigh on the recovery, and debated whether the Fed should provide additional stimulus to spur consumer spending.

"Participants expected that the government sector would be a drag on economic growth over coming quarters. They generally saw the U.S. fiscal situation also as a risk to the economic outlook; if agreement is not reached on a plan for the federal budget, a sharp fiscal tightening could occur at the start of 2013," the minutes from the meeting said.

The central bank is not alone in its fear of a coming "fiscal cliff" in 2013. The Bush tax cuts, payroll tax cut and extended unemployment benefits are all set to end, at the same time that the government slashes more spending.

While the Fed also acknowledged improvement in the economy early in the year, several members expressed concern that it could be due to waning temporary factors such as warmer winter weather.

As the Fed prepares to wind down its latest round of stimulus, known as Operation Twist, some have called for the central bank to do more to fuel growth.

Fiscal cliff: What you need to know

While those calls have yet to be answered, the minutes showed that the Fed is not ready to close the door on that option.

"Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough," the minutes said.

Operation Twist was designed to bring down long-term interest rates and encourage spending by shifting $400 billion from short-term to long-term bonds faxless cash advances. Launched last September, the program is set to end in June.

Since 2008, the Fed has taken numerous steps to bolster the economy, including keeping its key interest rate near zero in an effort to give businesses and consumers cheaper access to credit.

In addition, the Fed has also enacted two rounds of asset purchases known as quantitative easing, also designed to bring down interest rates. But nearly four years later, the economy is still struggling to return to robust growth, leading many to call for more action from the Fed.

The minutes also showed that Fed members discussed the job market in great detail.

"Labor market conditions improved in recent months," the minutes said. "So far this year, payroll employment had expanded at a faster pace than last year and the unemployment rate had declined further, although it remained elevated."

At the last meeting, the Fed improved its forecast for the unemployment rate this year, but continued to believe the economy would be weak enough to warrant historically low interest rates until "at least through late 2014."

The unemployment rate was at 8.1% as of April, and the Fed expects it to fall to between 7.8% and 8% by the end of the year.

Separately, the Fed released a new schedule of two-day meetings for its policy-making committee. Previously, the meetings were set to last either one or two days. 

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How can a bank lose $2 billion in six weeks?

That’s just one of the mysteries surrounding the news that JPMorgan Chase, widely thought one of the safest U.S. banks, is gushing red ink from bad trading bets. As details slowly emerged Friday, the shares of the nation’s largest bank fell hard, as did those of several rivals.

The story behind the loss is complex, and rich in irony. How it’s viewed could influence regulators implement a major financial overhaul law called Dodd-Frank. How hard regulators crack down on bank could have a big impact on the stability of the financial system.

Here are answers to some questions about the loss:

Q: How exactly did the bank lose so much so fast?

A: First, start with the irony. JPMorgan says the losses came from a trading portfolio designed to offset losses in the bank’s lending business. Instead of offsetting losses, these so-called “hedges” added to them.

JPMorgan extends money to companies through loans and by buying bonds. The bank was worried that it might not get all its money back, so it bought protection. Though it didn’t detail how it did this, banks typically buy credit default swaps, essentially insurance contracts that pay out when companies stiff their lenders.

It gets more complex. In the often dizzying, Alice-in-Wonderland world of banking, these hedges are themselves sometimes hedged, and that’s exactly what JPMorgan did. The bank apparently thought it had bought too much protection, so it hedged its hedge.

It’s that second hedge, basically a bet that companies would pay back their loans, that led to the losses.

Q: How does the “London Whale” figure into the story?

A: News reports before the bank announced its loss said that a trader at the bank dubbed the “London Whale” had invested heavily in an index of credit-default swaps, and that the bets were producing losses. But in a conference call Thursday, Jamie Dimon, the CEO of JPMorgan, said the news reports about London trades were only “somewhat related” to the losses. He provided no other details.

Q: Why are other bank stocks falling on the news?

A: It’s not just the size of the bet that’s scaring investors, but its complexity. The fact is, not even experts know how precisely big banks make money, and occasionally lose it. Their wagers are largely hidden. The opaqueness, which investors normally shrug off, is spooking them now.

Investors are uneasy also because JPMorgan has a reputation of managing risks better than almost anyone in the business. Investors seem to be asking: If this bank can lose $2 billion in six weeks, maybe others can, too?

Finally, there’s the regulatory threat. The loss comes amid heated debate in Washington over just how tightly to regulate banks. “The timing of the JPMorgan announcement couldn’t be worse,” said Whitney Tilson, head of hedge fund T2 Partners, speaking at an industry gathering in Las Vegas.

Investors fear that bank profits could be pinched by the so-called Volcker Rule restricting trading that banks do with their own money, as opposed to clients’ funds. Dimon has been an outspoken critic of the rule, and an impactful one given his skill at navigating his bank in recent years. JPMorgan was the only bank to remain profitable during the 2008 financial crisis.

Now that Dimon has been pushed off his pedestal, investors are worried that regulators will be tougher in enforcing the new rule.

Q: Isn’t the trading that led to the loss banned already?

A: No. The rule doesn’t take effect until July, and even then regulators are suggesting banks will have another two years to comply.

In any case, it’s not clear that the trade in question were subject to the rule. In the conference call Thursday, Dimon said the trades that backfired were hedges, not bets for profit, so they wouldn’t have fallen under the rule.

But some experts have doubts.

Nancy Bush, a banking analyst at NAB Research, says it’s not always clear what is hedging and what is gambling. The size of JPMorgan’s loss makes her suspicious.

“So they made money on hedges and then they hedged some more,” she said. “At some point it goes from being a hedge to being a money maker. They crossed the line here somewhere and it’s going to cost them.”

Sen. Carl Levin from Michigan, the chair of a subcommittee that investigated the crisis, put it more bluntly. “This is not a hedge,” he said. He called the loss a “stark warning” about the danger of “risky bets” at banks.

Q: How much will the trading loss hurt JPMorgan?

A: Likely not much at all, putting aside the impact of tougher regulation. JPMorgan is a big money maker. The $2 billion loss, which is before accounting for taxes, compares with $19 billion in net income last year and $16 billion the year before that.

What’s more, Dimon said that $2 billion loss will be offset by $1 billion trading bets that have already paid off. Dimon said there are $7 billion more paper gains from trades that he can tap in case losses grow.

Q: Are more losses possible?

A: Dimon said he is trying to unwind the bad bets in a “responsible” manner to minimize losses, but prices can move against him. That would mean more losses. Dimon has said the $2 billion could become $3 billion depending on how markets react.

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Macy’s is reporting a 38 percent increase in its first-quarter profit as the department store chain continues to reap benefits from its move to tailor its fashions to local markets.

The results beat analysts’ expectations but the company failed to boost its guidance for the year.

Macy’s Inc. shares fell 4 percent in early premarket trading.

The retailer said Wednesday that its net income rose to $181 million, or 43 cents per share, for the three-month period ended April 28. That’s up from $131 million, or 30 cents per share, a year ago.

Revenue rose 4.3 percent to $6.14 billion.

Analysts surveyed by FactSet had expected 40 cents per share on revenue of $6.14 billion.

Revenue at stores opened at least a year climbed up 4.4 percent for the quarter.

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Hundreds of Japanese are marching and waving “No nukes” banners to celebrate the last of this nation’s 50 nuclear reactors switching off.

The crowd at a Tokyo park Saturday said they were not concerned about government warnings of power shortages.

One of three reactors at Tomari nuclear plant in the northern island of Hokkaido is going offline for routine maintenance checks.

After last year’s March 11 quake and tsunami set off meltdowns at Fukushima Dai-ichi plant, no reactor stopped for checkups has gone back up personal business card. Japan requires new tests on withstanding quakes and tsunamis, and it needs local residents’ approval to restart reactors.

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CALGARY

For most of its 63 years, Cutco Cutlery has sold its knives and kitchen tools through a network of sales representatives doing in-home visits where they demonstrate, among other things, how the company’s shears can cut through a penny.

But earlier this month, the largest kitchen cutlery manufacturer in North America took a step toward a gradual paradigm shift for the company: It opened a retail store in a shopping strip in Creve Coeur. It is the New York-based company’s fourth physical store — and could be followed by dozens more nationwide.

“It could be 50 — it could be 150,” said Tim McCreadie, a Cutco executive spearheading the store expansion. “We just don’t know at this point. We’re still in the learning stage. We’re new to retail.”

Company officials say they chose the St. Louis region for one of the first stores because it’s the company’s fifth most productive sales unit and has an estimated 130,000 customers in the area who have bought Cutco knives over the years.

The local office, by the way, also has some of the company’s top salespeople, including one man who holds the all-time record of more than $3 million in sales.

So why after so many years doing business the same way has Cutco finally decided to branch out into retail stores?

Well, most of the company’s sales force is made up of college students who sell the products during their summer breaks, McCreadie said. When those students graduate, customers can lose touch with the company.

“We have over 15 million Cutco customers in the U.S.,” he said recently while giving a tour of the store at 11641 Olive Boulevard. “So we had all of these Cutco customers that wanted their products serviced and even wanted to buy more products, but didn’t have a gateway to be able to do that.”

Still, the company has been testing the retail waters slowly, careful to make sure the stores don’t cannibalize sales of its representatives. But so far, McCreadie said, so good.

Sales have been up. And about 95 percent of people who visit the stores are already Cutco customers, he said. They either come in to get their knives sharpened or replaced as part of the company’s “forever” guarantee or stop by to find out about new products.

An added benefit is that the stores are a good way to build more excitement about the brand among sales representatives, some of whom may not be familiar with the company when they first start, he said.

Next on the horizon for Cutco is online sales. Other companies with similar business models such as Avon and Pampered Chef have made the leap. There’s no timetable for Cutco to do so, but McCreadie said the company is gearing up for the transition while also trying to ensure that the company doesn’t lose its reputation for great service.

W. Scott Downey, a Purdue University professor who has incorporated Cutco’s model into his sales classes for years, said the company has stayed true to its mission of making a direct connection with its customers payday loans in one hour. So it has been slow to go online where that personal touch can be lost, he said.

But he added that online is a natural progression for Cutco. After all, customers have been able to buy products over the phone through Cutco for some time now.

“They’ve been very careful, which I think is a tribute to them,” Downey said. “They’re a pretty conservative company. That personal connection is really important to them.”

Amy Robinson, spokeswoman for the trade group Direct Selling Association, said a number of direct selling companies have some sort of online component. But online sales haven’t replaced those companies’ reliance on sales representatives, she said.

“When the Internet was first becoming popular, a lot of people said, ‘Gosh, who needs direct sellers now?’” she said. “But that’s a wholly different sales model. The sales force is the backbone of these companies.”

And a lot of these products do better by demonstration — such as the Tupperware’s famous burping technique — which doesn’t resonate the same way when someone just sees it on a shelf, she said.

Over the years, Cutco and its sales division, Vector Marketing, have occasionally come under fire from college students who have complained about everything from recruiting tactics on college campuses to the $150 deposit sales reps had to put down to get a starter kit to use for demonstrations. (Cutco sets sell for between $399 and $1,999 with individual knives starting at $50.)

But a couple years ago, Cutco did away with the deposit fee. McCreadie said the company did so to remove a possible barrier of entry for college students.

As a result, the company has also stepped up its screening process to make sure recruits are serious about selling the products since they’re now giving the kits on loan for free, said Justin Donald, a Cutco division manager.

With jobs hard to come by these days, Donald said he is getting more inquiries than ever. The local office has between 30 and 50 active sales reps throughout the year. But that sales force swells to more than 100 during the summer when college students join the ranks, Donald said.

Of course, selling is not everyone, which some students quickly find out. That’s one of the reasons Purdue’s Downey has students sell Cutco products as part of his class to show them what it’s really like to work in sales.

“In many ways, it’s an emotional business,” he said. “It’s difficult for customers to tell you no, so we want students to have that experience.”

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Germany’s finance minister says he’s confident a German-backed pact enforcing more fiscal discipline among European governments will be ratified despite new political uncertainty.

Wolfgang Schaeuble said that the treaty “will be ratified in all countries, I have no doubt about that.”

French Socialist Francois Hollande, who led in the first round of president elections Sunday, has called for renegotiating the pact.

Meanwhile, the Netherlands faces early elections after its minority government collapsed over a failure to agree on austerity measures needed to bring the country’s deficit within EU-stipulated limits.

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

BERLIN (AP) _ Germany mounted a spirited defense of its pro-austerity stance on Tuesday, with both Chancellor Angela Merkel and her foreign minister calling for a continued drive for fiscal discipline across Europe in spite of the latest bout of political uncertainty.

Investors took fright of the 17 countries that use the euro Monday on concerns that the so-called fiscal compact of strict austerity and deficit controls agreed by European leaders earlier this year was beginning to unravel.

French Socialist Francois Hollande edged ahead with a narrow lead in Sunday’s first round of presidential elections with a pledge to renegotiate the pact to give greater emphasis to growth over austerity. Meanwhile, the Netherlands faces early elections after its minority government collapsed over a failure to agree on austerity measures.

On top of this, Spain _ which is currently going through a harsh program of cuts and tax increases _ announced it was entering a recession and a survey of purchasing managers across Europe pointed to a contraction in the region’s economy.

Merkel didn’t specifically mention the fiscal pact in a speech in Berlin but noted that, in its early years, West Germany ran up barely any debt. She said that “today, we have to get back to that situation.”

“One can talk about how we do it … but to act as though it were an imposition to get by with what we are earning, (to say) we will carry on carting around the rucksack with debt _ no one will accept it from us, in any European country,” Merkel said.

“I want to say clearly, it is not the case that we say saving solves every problem but, if you at home talk about how you want to shape your life tolerably, then one of the first conditions is that you somehow get by with what you earn,” she said.

Germany’s budget deficit is well under the limit of 3 percent of gross domestic product that eurozone countries are supposed to observe, but its total debt amounts to 81.2 percent of GDP _ well above the official 60 percent limit.

Germany and France, under incumbent President Nicolas Sarkozy, have piloted rescue efforts for other eurozone countries as the region has been swept up in a succession of debt crises over the past two years. Berlin has insisted on an often-criticized emphasis on budget discipline and cuts.

Merkel pushed hard for other European countries to agree to the fiscal compact, designed to limit government overspending, and 25 national leaders signed it earlier this year.

Foreign Minister Guido Westerwelle said Tuesday that “we agreed on the pact after long negotiations. It is necessary.”

“What we have agreed on in Europe to overcome the debt crisis is agreed and it holds. It will not be made dependent on election results,” he said. “Governments act for their countries and not for themselves.”

It isn’t yet clear when the German Parliament will vote on the pact, which needs a two-thirds majority in Parliament.

That means it needs the support of the main center-left opposition Social Democratic Party, which wants the government to agree to introduce a financial transaction tax _ though leaders have stopped short of saying that is a condition.

Merkel’s government aims to get the fiscal pact passed before the summer. Social Democrat leader Sigmar Gabriel has argued that a vote could take place later.

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Ever known a woman who drives a forklift?

Neither has Melinda Barbaglia. She has yet to meet one, even though she and her sister sell, service and stock replacement parts for forklift trucks.

“They didn’t teach Forklift 101 at Webster University,” said Barbaglia, who holds a graduate degree in marketing from the school.

A recent Post-Dispatch story that detailed how other cities are outpacing St. Louis in the growth of businesses owned by women struck a chord, for obvious reasons, with Barbaglia. She agrees that female entrepreneurs have been held back by a shortage of support from state and local governmental interests. And she can also make an argument that, to a lesser degree, a male-dominated business community is slow to lose its grip.

At the same time, Barbaglia, her sister Teresa Pippen and mother, Linda, can make a pretty strong case for the ability of a business owned and operated by women to flourish in a good ol’ boy network.

Of the two sisters, Melinda was the one without a single intention of joining C&B Lift Truck Service — the company their father, Charlie, started from scratch 36 years ago.

Degree in hand, Melinda was about to launch a career in pharmaceutical sales when her father suggested he could use an extra hand at C&B.

She reported to work soon after and has been there ever since.

Charlie Barbaglia ran C&B up till the day he and the family celebrated his 60th birthday in 2005.

“He must have thought it was a retirement party, because he never came back to work,” laughs Linda Barbaglia.

“So, I said, ‘I guess we’re on our own, girls.’”

Fortunately, Melinda and Teresa were already immersed in the business.

Melinda, the “take charge” extrovert, applied her education by working the sales and marketing end.

To compensate for the absence of Forklift 101 in the Webster course catalog, Melinda indoctrinated herself in the nuances of pneumatic tires, monotrol transmissions and liquid petroleum to the point that she’s qualified to serve as an instructor in the mandatory safety courses OSHA demands of forklift operators.

Teresa, an introvert with a communications degree from Maryville University, was more than happy to handle bookkeeping and the office side of the business.

C&B’s seven other employees (including service manager Charlie Pippen, the service manager) are all men.

The Barbaglias admit that running a business in what remains a man’s world is not always easy.

For starters, not to stereotype, neither sister plays golf.

As for the other topic that breaks the ice among men — such as sports — the lifelong St. Louisans by necessity can be semi-conversant should the conversation turn to the fortunes of the Cardinals, Blues or Rams. But don’t expect them to tell you how many Detroit Tigers Bob Gibson struck out in the 1968 World Series. The vast majority of the company’s male clients “take their jobs very seriously,” Melinda said.

“They just want their forklift fixed,” Teresa added.

But some of them can be flirtatious, Melinda said.

A lot of years remain before the sisters retire. Melinda is 42 and Teresa is 36.

Still, looking ahead as she cradled Melinda’s 3-month-old daughter Abigail, Linda Barbaglia is fairly sure the second generation of Barbaglias to run C&B Fork Lift Truck Service will be the last.

Linda says the business that has sustained her family for 36 years is fast moving toward the day that favors neither male nor female — when robots take the wheel.

QUOTE OF THE WEEK

“I was offered an unpaid internship at a law firm but turned it down. If you can’t pay me $10 an hour, you don’t deserve to be in business. The job market makes me feel like stabbing myself in the face. - Adrienne Delibert, unemployed college graduate

Source: The New York Times

BY THE NUMBERS

37 percent of U.S. companies vet job candidates through social networking sites.

15 percent of U.S. employers prohibit the practice.

Source: CareerBuilder

FINAL WORD

“… While my Facebook page is private, my friends do include plenty of people I’ve worked with or for, or might hope to work with or for in the future. I also take it as given that any potential future employer or reference would use all the available tools to check me out – including finding out who we know in common via social networks.

And I think the effects can be subtle: Future employer X calls colleague Y to ask about me; colleague Y checks Facebook to get the latest….and instead of a link to a story I’m proud of, or even a video I find funny, he finds a photo of me and my baby boy making snuggly faces.

Whether he’s consciously wondering when, if ever, I’m going back to work or how dedicated I’ll be when I get there, I’ll never know. But I’d rather not wonder.” - Janet Paskin on a possible pitfall of TMI.

Source: The Wall Street Journal

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Asian stock markets rebounded Wednesday after a slew of solid earnings boosted the outlook for U.S. companies and a successful Spanish bond auction eased worries over Europe’s debt crisis.

Japan’s Nikkei 225 index jumped 1.7 percent to 9,622.39. South Korea’s Kospi added 0.9 percent to 2,003.03 and Australia’s S&P/ASX 200 rose 1.2 percent to 4,339.40.

Hong Kong’s Hang Seng gained 0.9 percent to 20,750.55. Benchmarks in Singapore, Taiwan and Indonesia also rose.

On Tuesday, European stocks had their best day in four months after Spain attracted strong investor interest at an auction of two-year debt.

The government sold more than (EURO)3.2 billion ($4.2 billion) in short-term debt, more than had been expected, and the yield on Spain’s 10-year government bond fell, a sign of improving confidence in the country’s finances.

“This saw investors less pessimistic about Europe and lifted risk assets all round,” said Stan Shamu, analyst with IG Markets in Melbourne.

In the U.S., first-quarter results gave markets a lift. Coca-Cola’s profit was better than Wall Street analysts had forecast. Goldman Sachs and Johnson & Johnson also posted strong results.

The Dow Jones industrial average rose 1 bad credit payday advance.5 percent to 13,115.54, its best day in a month. The S&P 500 closed up 1.6 percent to 1,390.78. The Nasdaq composite index soared 1.8 percent to 3,042.82, its biggest point rise in three weeks.

Positive news also came from the International Monetary Fund, which raised its outlook for the global economy because of faster U.S. growth and a coordinated effort in Europe to address its debt crisis.

The global lending organization said Tuesday the U.S. economy should expand 2.1 percent this year. Europe will likely shrink 0.3 percent and the world economy should grow 3.5 percent. All three estimates are slightly better than the IMF’s January forecasts.

Benchmark oil for May delivery was up 3 cents to $104.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.27 to settle at $104.20 in New York on Tuesday.

In currency trading, the euro fell to $1.3111 from $1.3139 late Tuesday in New York. The dollar rose to 81.37 yen from 80.80 yen.

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