In the mood for a money talk? Yeah, we know. It&&9;s hardly on the top of anyone&&9;s list. But the task does fall somewhere between teaching the kids the birds &&9;n&&9; bees and remembering to give the dog its heartworm pill.

"Not now, honey. I&&9;ve got a headache" is just one of the excuses people use to avoid this prickly topic. So, how do you raise the issue, especially with a partner who would rather avoid it, without ruining your weekend?

As couples told us in Couples & Cash: How To Handle Money With Your Honey, it&&9;s all about kissing and making up. Just kidding. But a successful money talk must be linked with rewards. One great way to lure a reluctant partner into a dreaded money talk is to relate the topic to something he or she cares about.

Consider how Robert (a "saver") inspired his wife Elizabeth (a "dreamer") to think about budgeting. Elizabeth explains:

I&&9;ve been itching to plan our next megavacation. Robert resisted my enthusiasm, saying that, as new parents, we should focus on more serious things. To get me excited about budgeting (blah!) and saving receipts (ick!), he conceded that we just might be able to save toward another European trip, albeit a few years off cash till payday advance. Voila! I am all about budgeting right now.

Think about the goodies that excite you and your loved one. Chances are, some will require a bit of cash to come to fruition.

When you do start talking, consider setting a few ground rules, such as:

Agree to try -- managing your household finances is a two (or more)-person job.Accept equal responsibility for changing your lives.Don&&9;t play the blame game. No fair bringing up past financial indiscretions. Make this conversation all about setting yourselves up for a sweet future.Be honest and realistic about your financial situation.Take a break if your conversation becomes heated and unproductive.

We promise that the conversations will flow more easily once you start. As far as the details of managing money matters for two, don&&9;t stress: We&&9;ve got you covered in our free guide to managing money with your mate. The only thing you need to do now is make a date with your honey.

More reading for twosomes:

5 Ways to Divorce-Proof Your FinancesShould You Have Separate Accounts?60-Second Guide to Cashing In on Coupledom

Get in the Mood to Talk Money

MIDDLETOWN, Conn. – Fire marshals on Monday were preparing to start their investigation into a massive explosion that rocked an under-construction power plant where gas lines were being tested, killing at least five people.

A dozen or more others were hurt in Sunday's blast, which was so powerful it alarmed residents who heard the boom and felt tremors in their homes miles away from the Kleen Energy Systems plant in Middletown, about 20 miles south of Hartford.

The explosion left huge pieces of metal that once encased the plant peeling off its sides. A large swath of the structure was blackened and surrounded by debris, but the building, its roof and its two smokestacks were still standing at the site, which is near Wesleyan University on a wooded and hilly 137-acre parcel of land overlooking the Connecticut River.

Search and rescue crews were combing through the debris from the damaged plant overnight but believed no one was missing amid the rubble, Deputy Fire Marshal Al Santostefano said. The investigation into what caused the explosion was to begin Monday morning, he said.

The U.S. Chemical Safety Board, a federal agency that investigates industrial chemical accidents, was mobilizing a team of workers from Colorado and hoped to have them on the scene by midday Monday, spokesman Daniel Horowitz said.

The nearly completed 620-megawatt plant is being built to produce energy primarily using natural gas, which accounts for about a fifth of the nation's electricity. Workers for the construction company, O&G Industries, were purging the gas line, clearing it of air, when the explosion occurred around 11:15 a.m. Sunday, Santostefano said.

About 50 to 60 people were in the area at the time, he said.

One of those killed was Raymond Dobratz, a 58-year-old plumber from Old Saybrook, said his son Erik Dobratz, who called the elder man "a great dad."

Lynn Hawley, of Hartland, Conn., said her 36-year-old son, Brian Hawley, is a pipefitter at the plant and broke his leg. She said he called her from his cell phone to say he was being rushed to a hospital.

"He really couldn't say what happened to him," she said. "He was in a lot of pain, and they got him into surgery as quickly as possible."

Hospital officials didn't immediately release the conditions of the other injured people, whose wounds ranged from minor to very serious.

The thundering blast shook houses for miles business cards design.

"I felt the house shake," Middletown resident Steve Clark said. "I thought a tree fell on the house."

Mayor Sebastian Giuliano said he heard it as he was leaving church.

"It felt almost like a sonic boom," he said.

Kleen Energy Systems LLC began construction on the plant in February 2008. It had signed a capacity deal with Connecticut Light and Power for the electricity produced by the plant, which was scheduled to be completed by mid-2010.

The company is run by former City Councilman William Corvo. A message left at Corvo's home was not returned Sunday. Calls to Gordon Holk, general manager of Power Plant Management Services, which has a contract to manage the plant, also weren't returned.

Energy Investors Funds, a private equity fund that indirectly owns a majority share in the power plant, said it was cooperating with authorities investigating the explosion. In a written statement, the company offered sympathy and concern and said it would release more information on the explosion as it becomes available.

Safety board investigators have done extensive work on the issue of gas line purging since an explosion last year at a Slim Jim factory in North Carolina killed four people. They've identified other explosions caused by workers who were unsafely venting gas lines inside buildings.

The board voted recently to recommend that national and international code writers strengthen their guidelines to require outdoor venting of gas lines or an approved safety plan to do it indoors.

Gov. M. Jodi Rell visited the scene Sunday and announced late in the day that the state had imposed a temporary no-fly zone for a three-mile radius around the site to ensure that the safety of the search and rescue workers would not be jeopardized. The restrictions were put in place until Monday evening.

The state's Emergency Operations Center in Hartford also was activated, and the Department of Public Health was called to provide tents for shelter and medical triage.

___

Contributing to this report were Associated Press writers Eric Tucker in Middletown; Stephanie Reitz in Glastonbury, Conn.; Mark Williams in Columbus, Ohio; Mike Baker in Raleigh, N.C.; and Anne D'Innocenzio in New York.

Marshals seek deadly Conn. gas plant blast's cause

The U.S. economy lost 20,000 jobs in January, the Labor Department said Friday, defying expectations for a slim gain. But the jobless rate unexpectedly fell to 9.7% from 10% in December.

Wall Street expected nonfarm payrolls to rise by 15,000 with unemployment holding at 10%.

Stocks opened up, sold off, then staged a big rally late to end higher. The Dow rose 0.1%, the S&P 500 0.3% and the Nasdaq 0.7%.

Job losses in the recession have been much worse than previously calculated, new benchmark revisions showed. The U.S. has lost 8.4 million jobs since the start of the slump. The old estimate was 7.2 million.

Private-sector employment has tumbled all the way to its lowest level since November 1998.

The jobless rate is based on the separate household employment survey. That showed a huge gain of 541,000 jobs last month, the best in nearly five years.

Household employment tends to be more volatile than payrolls, but it often turns higher first.

"The pace of job losses has slowed pretty substantially and new hiring is just beginning to pick up," said Scott Brown, chief economist at Raymond James.

But, he added, "it&&9;s still consistent with this idea that the recovery is going to be pretty gradual."

The economy grew at a 5.7% annual rate in Q4, the biggest gain in six years, the Commerce Department said on Jan. 31. But the bulk of that was due to firms paring inventories at a slower pace.

Economists expect much slower growth in the coming quarters with tepid hiring struggling to absorb the return of workers that had given up check cash advance.

A broader unemployment gauge that includes discouraged workers and part-time workers who can&&9;t find full-time jobs stood at 16.5% in January, though that was down from 17.3% in December.

The average duration of unemployment is now 30.2 weeks, up from 29.1 weeks in December.

"People are sort of coming to the realization that this won&&9;t be a typical recovery. It&&9;s going to be a long, slow slog," said Mike Schenk, vice president of economics and statistics at the Credit Union National Association and Affiliates.

Within the payrolls report, services-related jobs rose by 40,000, fueled by retailers. Manufacturing employment rose by 11,000, the first gain in three years. But construction firms shed 75,000 workers amid heavy storms.

There were hopeful signs for the future. Temporary jobs shot up 52,000 and the average workweek ticked higher. Firms tend to add temps and work existing staff longer before hiring permanent staff.

"It will be increasingly clear that the jobs market is improving, and we&&9;re slowly working our way out of this mess," Schenk said.

President Obama and Democrats recognize Friday&&9;s upbeat unemployment news probably won&&9;t last. So they&&9;re working on a new stimulus to spur jobs. But the public is skeptical after last year&&9;s $787 billion package failed to prevent unemployment&&9;s sharp rise.

Surprising Jobs Data Show Jobless Down But So Are Payrolls

LONDON (MarketWatch) -- European shares were lower for the third straight day on Friday, as sovereign-debt worries lingered, although shares pared losses after the release of U.S. jobs data.

After suffering the worst one-day fall in three months on Thursday and falling as low as 236.98 early in the session, the pan-European Dow Jones Stoxx 600 index was down 1.1% to 240.10 in the afternoon.

Although Greece's ASE Composite index continued to show sharp losses, trading down 3.5% at 1,882.75, Portugal's PSI 20 index was down just 0.6% at 7,398.62 while Spain's Ibex 35 index declined 0.7% to 10,173.80 in the afternoon.

Markets have different levels of trust in the governments of these countries, one strategist pointed out. "What you have now is a complete mistrust of what the Greek authorities are saying and that is entirely justified. That's not the case in Portugal," said Philip Shaw at Investec Securities.

Global Dow

Members of the Group of Seven industrialized countries are meeting in Canada near the Arctic Circle, and Greece and China will be on the agenda. Read G7 preview.

Companies retaking ground in Portugal and Spain included banks Banco Comercial Portugues , up 0.4%, and Banco Santander , up 1.2%.

That move followed data out Friday that showed the U.S. unemployment rate fell in January to 9.7% from 10% in December, a better result than the unchanged reading economists had been expecting. There was a 20,000 contraction in nonfarm payrolls in January, which compared to expectations for a 25,000 gain.

"[U.S. jobs data] have been received well by the market. Coupled with a fall in the rate of unemployment, many are wondering if the recent drop has been overdone," said Manoj Ladwa at ETX Capital fast cash now.

Major European regional markets were also off early lows. The German DAX index declined 1% to 5,481.90, the U.K. FTSE 100 index traded 1.1% lower at 5,081.37 and the French CAC-40 index moved down 2.3% to 3,605.82.

U.S. stocks were little changed in early trading.

Shaw said that fiscal worries continue to be the main concern of the market and the main driver of risk assets. "Accordingly we're in a down phase today," he said.

"Whether [the debt worries] are a genuine fear or a reason to take some chips off the table isn't clear," he added. "We've come a long way from March," he added.

Of corporate updates, British natural-gas exploration and production firm BG Group lost 3.4% after its fourth-quarter net attributable profit declined to 465 million pounds, from 756 million pounds last year, hit by a 127 million post-tax charge related to disposals, re-measurements and impairments. Read more on BG Group.

U.K. interdealer broker Icap slumped 17.1% after it cut its earnings forecast, overshadowing a slight rise in third-quarter revenue.

A slower market means that new businesses are taking longer than previously expected to achieve profitability, the firm said. Read Icap story.

Rival Tullett Prebon dropped 8%.

Still, Volvo shares were up 2.9%. The truck maker reported a net loss for the fifth quarter in a row as sales dropped 23%, but the Swedish firm said it could see signs of recovery in demand from historically low levels in several markets, particularly in China and India. Read Volvo story.

Deutsche Telekom shares were up 1.1%. The German parent of T-Mobile USA Inc. reportedly might spin off its American wireless-phone unit, a move that would lessen its exposure to an increasingly competitive U.S. market.

Europe Markets: Europe pares debt-related losses after U.S. data

LONDON – Telecommunications company Vodafone Group PLC on Thursday reported that revenue rose more than 10 percent in the third quarter, supported by strong gains in its Asia-Pacific and Middle East operations.

For the three months ending Dec. 31, Vodafone said service revenue fell by 1.2 percent on a comparable basis, stripping out acquisitions, disposals and currency shifts. Still, the figure was an improvement on the 3 percent drop in the previous quarter, the company said.

Service revenue, which accounts for 93 percent of the company's total, includes revenue from voice, messaging, data and fixed-line services.

Vodafone did not report earnings in the trading update.

Revenue in the company's third quarter was 11.5 billion pounds ($18.3 billion), compared to 10.5 billion pounds a year earlier.

Revenue rose 10.4 percent in Asia-Pacific and the Middle East on a comparable basis, while European revenue fell 3.2 percent and Africa-Central Europe was down 0.5 percent.

The company upgraded full-year guidance for free cash flow — operating cash flow minus capital expenditure — by 500 million pounds to a range between 6 fast payday loan.5 billion pounds and 7 billion pounds.

Vodafone shares were up 4.9 percent at 141 pence on the London Stock Exchange.

"In all, the company is making very steady progress, which has not been reflected in the share price of late over the last three months the shares have added just 0.2 percent versus a wider FTSE-100 gain of 3 percent," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

"Expectations for Vodafone Q3 were low and we would expect the (small) improvement in underlying trading, plus raised free cash flow guidance to be well received especially after the recent share price declines," said Mark James, analyst at Evolution Securities.

___

On the Net: http://www.vodafone.com/start/investor_relations.html

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Vodafone Q3 revenue up 10 pct

Shares rose modestly Tuesday as investors are continued to claw back some of January&S217;s losses.

A report on the housing market in December showed that number of people preparing to buy a home rose slightly in December, a sign that home sales could be stabilizing. The National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements rose 1 percent from November to December to a reading of 96.6.

And the shipping heavyweight UPS and the candy maker Hershey joined the companies reporting upbeat earnings.

In early trading, the Dow Jones industrial average was 61.29 points, or 0.60 percent higher, while the Standard &&8; Poor&S217;s 500-stock index was 7.70 points, or 0.71 percent higher. The technology heavy Nasdaq was up 11.23 points, or 0.5 percent.

Stocks are trying to rally for a second day after a stretch of a week and a half during which major indexes tumbled over concerns about tightening regulations on the banking sector and the sustainability of a recovery.

Oil prices topped $75 a barrel as investors took heart from economic data suggesting American demand for crude could improve.

And in earnings Tuesday, the homebuilder D.R. Horton posted its first profit since 2007. Much of its $192 million profit during the October-December period came from a tax gain, but its revenue rose because of a 36 percent jump in home sales. Orders increased 45 percent. In addition, Hershey&S217;s earnings climbed 54 percent, and UPS&S217;s fourth-quarter profit tripled because of a strong holiday shopping season and international business.

In Europe, the DAX in Frankfurt was up 51.12 points, or 0.90 percent, while the CAC-40 in Paris rose 42.51 points, or 1.1 percent.

The FTSE 100 index in London underperformed its peers, rising 24.61 points, or 0.47 percent, in part because shares in heavyweight oil company BP fell over 4 percent after it reported lower-than-anticipated fourth quarter earnings.

Despite Monday&S217;s rally, investors remain wary ahead of a raft of economic and corporate news this week, which culminates on Friday with the unemployment report for January. Three consecutive increases in weekly jobless claims data have soured the mood ahead of the report, which often sets the stock market tone for a week or two.

&S220;Sentiment remains fragile &<51; underlined by the Reserve Bank of Australia&S217;s decision to leave its rates on hold today,&S221; Ben Potter, a research analyst at IG Markets, said.

In a surprise decision, the Australian central bank kept its key interest rate unchanged at 3 paperless payday loans.75 percent &<51; it was widely expected to lift borrowing costs by a quarter percentage point for the fourth time in a row.

The bank, which was the first major central bank to start raising interest rates in the current cycle, said the impact of the previous three increases was &S220;limited,&S221; so keeping rates on hold was appropriate &S220;for the time being.&S221;

&S220;This pause in rates suggests that the bank still has some concerns about the robustness of the recovery in Australia,&S221; said Michael Hewson, an analyst at CMC Markets.

The themes identified by the Australian central bank are central to why many of the world&S217;s major stock markets have fallen 5 to 10 percent over the last couple of weeks &<51; investors have gotten increasingly worried that equity valuations after a 10-month bull run are not justified by the economic fundamentals.

On Thursday, investors will focus on both the European Central Bank and the Bank of England to see if they start fretting about the same sort of issues that are apparently causing worries at the Reserve Bank of Australia.

Particularly interesting will be what the European Central Bank president, Jean-Claude Trichet, says on Thursday about the debt problems in Greece, which have weighed heavily on the euro. Mr. Trichet&S217;s news conference will come a day after the European Commission is expected to give its cautious backing &<51; subject to some more spending reductions &<51; to the new Greek government&S217;s plan to bring its public finances under control.

Expectations of the commission&S217;s tentative support have helped Greek bond yields drop over the last couple of days from &<51; a sign that investors are getting less twitchy about holding onto Greek debt.

Earlier, a number of Asian markets reversed their early gains to finish lower.

Up nearly 2 percent at one point, Shanghai&S217;s index shed 0.2 percent amid speculation of more government initiatives to clamp down on bank lending. Markets in South Korea, Taiwan and Singapore also lost ground.

Among Asia&S217;s best performing markets, Japan&S217;s Nikkei 225 stock average jumped 166.07, or 1.6 percent, to 10,371.09. Hong Kong&S217;s market closed up 0.1 percent in volatile trade.

Reuters

Wall Street Tries to Find a Direction

DETROIT (Reuters) – Toyota Motor Corp on Monday announced a fix for about 2.4 million of its eight most popular models involved in a safety recall and sales and production suspension.

A precision-cut steel reinforcement bar will be installed at Toyota U.S. dealerships later this week. The smooth rollout of the fix could lead to a resumption of sales of models including its biggest seller Camry by the third week of February, sources said on Friday.

Sales of the models were suspended January 26, and production of the same models at U.S. and Canadian plants stopped today. The production suspension will last at least this week, Toyota has said payday loans guaranteed no fax.

Toyota said it had tested the remedy for the recalled vehicles.

"Nothing is more important to us than the safety and reliability of the vehicles our customers drive," said Jim Lentz, president and CEO of Toyota Motor Sales U.S.A.

"We deeply regret the concern that our recalls have caused for our customers, and we are doing everything we can -- as fast as we can -- to make things right."

(Reporting by Bernie Woodall; Editing by Lisa Von Ahn.)

Toyota announces fix in pedal recall

DAVOS, Switzerland (Reuters) – Leading bankers seeking to quell a political backlash over their role in the financial crisis agreed with regulators on Saturday that new banking rules should be globally consistent.

A closed-door meeting of dozens of financial sector heavyweights on the sidelines of the World Economic Forum made some progress on bank capital and liquidity requirements, and legal structures, participants said.

But the bankers and regulators skirted the issue of a global insurance levy to make sure that banks -- not taxpayers -- pay for future mistakes, and no firm agreements were reached.

Larry Summers, top economic adviser to U.S. President Barack Obama, who is under fire from Wall Street over his plans to curb big banks, said the "vigorous, constructive discussion" had raised the level of understanding.

Financial Stability Board chief Mario Draghi said global regulators were working on proposals for a central agency to manage bank failures, and mulling ideas for capital surcharges or contingent capital for institutions deemed too big to fail.

"We want to have an authority or an agency which has the power, the funds, the budget and the competence to manage failure in an orderly way," he told Reuters Insider television.

But other participants were sceptical of any cross-border body that would impinge on national sovereignty.

U.S. Congressman Barney Frank, piloting tough legislation to regulate Wall Street, said after the talks: "No one got up and said don&&9;t regulate us. They would be wasting their time if they did. They all understand regulation is coming."

In a panel discussion on the world economy, Summers and International Monetary Fund chief Dominique Strauss-Kahn said growth was returning faster than expected but a better balance was needed between exporting and importing nations.

Summers also highlighted the high toll in unemployment, saying: "What we are seeing in the U.S. is a statistical recovery and a human recession."

China&&9;s deputy central bank head, Zhu Min, told delegates the emerging economic powerhouse was working to achieve more balanced growth and boost private consumption this year, but the switch from exports to domestic demand would take time.

Trade ministers from major economies, meeting on the sidelines of the annual Davos conference, voiced gloom about prospects of a global trade liberalisation deal this year and many blamed the United States for foot-dragging. Washington sent only a deputy ambassador to the informal talks.

NO-DEAL ON LEVY

British finance minister Alistair Darling told Reuters after the talks with bankers: "Firstly we are agreed that whatever we do, it needs to be universal online payday advance.

"What has changed is there is an acceptance on the part of banks that they need to make changes and they need to make changes quickly because that is what people expect."

Darling said a wind-down levy to cover the cost of bank failures was "one of a number of ideas" discussed, but there was no agreement.

Draghi said the idea of a global insurance levy was not discussed but others said it was among ideas kicked around.

Brian Moynihan, chief executive of Bank of America, described the talks as "robust". Reporters glimpsed white boards with action points headed "Capital Requirements", "International Regulatory Cooperation" and "Risk Assessment" in the room.

The IMF&&9;s Strauss-Kahn called for a speeding up of new rules on capital requirements for banks.

"The question of coordinating this financial sector reform is top priority. We&&9;re not going exactly in the right direction," Strauss-Kahn said in an oblique reference to Obama&&9;s proposals to bar commercial banks from proprietary trading and ties with hedge funds and private equity funds.

European Central Bank President Jean-Claude Trichet also warned of the danger of divergent responses, saying: "If we do not have a global set of coordinated rules and regulations, it&&9;s a recipe for catastrophe."

Summers and Zhu skirmished politely about global economic imbalances.

"Not everyone can have export-led growth," the White House adviser said. "Countries (that) traditionally have export-led growth desire to continue that growth; countries that have been substantial borrowers want to reduce that borrowing. There&&9;s a mismatch, It&&9;s serious... it&&9;s an adding up problem."

Zhu said China&&9;s purely export-led growth model was not sustainable but could not be changed overnight.

"We want to increase consumption but it will take some time," he said. "We need global coordination on structural change...for us to increase consumption and for others to increase consumption or to increase savings."

(additional reporting by Lisa Jucca, Dominic Evans, Ben Hirschler, Gleb Bryanski and Gerard Wynn, writing by Paul Taylor, Editing by Hans Peters)

DAVOS - Banks, regulators agree need for global response

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Texas Leads U.S. in High-Growth Cities

SAN DIEGO – Mortgage default notices for California homeowners fell 24 percent during the fourth quarter, suggesting the worst might be over for foreclosures in entry-level markets while problems spread to pricier neighborhoods, a research firm said Wednesday.

There were 84,568 default notices filed from October through December, down from 111,689 during the previous three-month period but up 12 percent from 75,230 during the same period of 2008, MDA DataQuick reported.

The latest tally is down 38 percent from the peak of 135,431 in the first quarter of 2009 and marks the third straight quarterly decline. MDA DataQuick cautioned that the peak number was inflated by new notification requirements that delayed some foreclosures in 2008.

However, default notices are climbing in mid- and high-end neighborhoods, as homeowners who were able to make payments longer than those in entry-level markets feel the results of the recession and job losses, said MDA DataQuick president John Walsh.

The state's most affordable markets accounted for 35 percent of all defaults in the latest quarter, down from 52 percent of all defaults a year ago. Those markets account for about one of every four homes.

In upscale Orange County, for example, default notices increased 24 percent from a year earlier. Defaults also rose sharply in Santa Barbara, Santa Cruz and other markets on the coast.

On the flip side, default notices fell 13 percent in Merced County, which was hammered early in the foreclosure crisis. The hard-hit Inland Empire, east of Los Angeles, showed declines or only slight increases.

Notices of default are the first step in the formal foreclosure process.

The number of homes actually lost to foreclosure totaled 51,060 in the most recent quarter, up 2 percent from 50,013 during the previous three months and up 11 percent from 46,183 during the same period of 2008.

The latest number is down 36 percent from an all-time high of 79,511 in the third quarter of 2008.

The results show that Californians are still working through a period of easy credit from several years ago, San Diego-based MDA DataQuick said.

Loans defaulting in the fourth quarter had a median origination in July 2006, same as the third quarter. The median origination was June 2006 in the same period of 2008, meaning the market has worked through only one month of bad loans last year.

"Mid-2006 was clearly the worst of the 'loans gone wild' period, and it's taking a long time to work through them," Walsh said.

Gary Painter, director of University of Southern California's Lusk Center for Real Estate, said the numbers underscore how homeowners in high-end neighborhoods were able to stave off foreclosure longer than others.

"The people at the bottom end of the market are going to walk away first," he said new car loan rates. "I think the worst in the starter home market is over but it is still historically high. It's just not as bad as it was, but we have turned that corner."

It is too early to say foreclosures across the market peaked or that the housing market overall has rebounded, Painter said.

"We're not going to see — for the next year certainly — any huge spikes in prices," he said.

MDA DataQuick analyst Andrew LePage agreed that it's too early to say foreclosures overall have turned the corner. Late payments on home loans — a step prior to filing a default notice — have risen over the last year, suggesting there may be lots of foreclosures to come.

Still, a return to the "dark days of 2008" is unlikely in entry-level markets like the Inland Empire and Merced County in central California.

"We're not through yet but a huge percentage (of subprime loans have) already been flushed through the system," he said. "It's still pretty bad by historical standards."

The drop in defaults comes as banks come under pressure in Washington to ease the terms of troubled home loans.

Banks lowered mortgage payments for 172,288 California borrowers through December under the Obama administration Making Home Affordable program launched in March, but only 7.8 percent of those modifications were permanent, according to government data.

The absence of permanent modifications fuels questions about how long defaults will continue to fall, LePage said.

"There's still a lot of uncertainty about how the distress will play out the next year or two," he said.

Still, the decline in defaults indicates that banks are turning more to short sales and loan renegotiations, Walsh said. A short sale is when the seller owes more than the house is worth, and the lender is willing to take the loss to exit the investment.

"A lot of the mortgage loans that are in distress are being kept out of the foreclosure process," said Celia Chen, senior director of Moody's Economy.com.

Countrywide had more defaulted loans than any other lender with 5,588, followed by Wells Fargo at 3,482, Washington Mutual at 3,460 and Bank of America with 1,760. Last quarter's default rate on loans that originated in the second half of 2006 ranged from 1.5 percent for Bank of America to 13.1 percent for World Savings.

Foreclosures continued to decline as a percentage of home sales in California. Foreclosures accounted for 40.7 percent of existing homes sold in the fourth quarter, down from 42.7 percent in the third quarter and 54.4 percent during the same period of 2008.

California default notices fall 24 percent in 4Q

DUBAI (AFP) – The International Monetary Fund said Tuesday it was downgrading its economic growth forecast for the United Arab Emirates due to the "drag" of the Dubai real estate sector.

Overall gross domestic product in 2010 would be "about flat, between Zero percent and one percent," Masood Ahmed, the IMF&&9;s director of the Middle East and Central Asia, told reporters in Dubai.

He added the debt problem of state-firm Dubai World, which is negotiating the restructuring of some 22 billion dollars in debt, would "have some effect on the UAE economy for this year and also for next year."

"We expect a continued contraction in Dubai, and a positive growth in Abu Dhabi," the oil-rich leading UAE partner, he added.

"As far as Dubai is concerned, the delay in recovery... will result in the year as a whole in a small contraction. This will be compensated by Abu Dhabi&&9;s growth," he said.

Ahmed said non-oil economic growth in the UAE will be near flat "due to a continued drag from real estate in Dubai," which saw property prices drop by half since the global financial crisis hit the once-booming emirate in autumn 2008.

He said last year&&9;s GDP of the UAE contracted by 0.7 percent, after the fund had projected it to shrink by 0.2 percent.

The IMF was forecasting the UAE economy to grow by 2.4 percent in 2010, according to the fund&&9;s World Economic Outlook in October.

In November, Dubai sent jitters throughout global markets when it said it wanted to request a freeze on debt repayments by its largest conglomerate, Dubai World quick pay day loan.

The group paid up Islamic bonds worth 4.1 billion dollars which were due on December 14, narrowly escaping a default, thanks to a last-minute five-billion-dollar lifeline from Abu Dhabi.

Ahmed praised the Dubai government&&9;s "cooperative" approach to the restructuring of Dubai World&&9;s debt, but pointed out the process would take some time.

"We are very encouraged by the commitment of the authorities to continue with the restructuring in a cooperative way. This is very important," he said, underscoring the restructuring also extended to the operations of the troubled subsidiaries themselves.

"That&&9;s why we believe it will take time," he said.

Ahmed added, however, that Dubai would benefit from a pick-up in demand for services from the region and emerging markets, in light of an anticipated global recovery.

Dubai has built a modern infrastructure in recent years that is unmatched in the region. It has also established itself as the regional hub for tourism and financial services.

But the debt-financed boom has resulted in a huge debt burden whose exact figure remains disputed.

Dubai&&9;s debt was reportedly in autumn around 80 billion dollars, mostly owed by state corporates. But EFG-Hermes regional investment bank said last week Dubai&&9;s total debt could be as much as 170 billion dollars.

Dubai property 'drag' prompts IMF to downgrade UAE growth

BEIJING – Even if its stand against censorship leads it to close its search engine in China, Google Inc. still hopes to maintain other key operations in the world's most populous Internet market.

Google is negotiating to keep its research center in China, an advertising sales team that generates most of the company's revenue in the country and a fledgling mobile phone business as the company navigates the delicate negotiations with the government.

Both sides are torn by conflicting objectives.

Google says it's no longer willing to acquiesce to the Chinese government's demands for censored search results, yet it still wants access to the country's engineering talent and steadily growing online advertising and mobile phone markets.

Chinese leaders are determined to control the flow of information, but realize they need rich and innovative companies such as Google to achieve their goal of establishing the country as a technology leader. Even some Chinese media that rarely deviate from the party line have warned that Google's departure could slow technology development and hurt China's economy.

Analysts are split on how the current impasse will be resolved, with some resigned to Google having to pull completely out of China for the foreseeable future while others envision a face-saving compromise that preserves a toehold in the country for the company.

Robert Broadfoot, managing director of Political and Economic Risk Consultancy in Hong Kong, is among the camp that expects Communist leaders to bend their rules to keep Google in the country.

"They're hardly going to close the door on the innovator. They are very interested in what (Google is) innovating, because they may want it for themselves," said Broadfoot, who has advised companies on China since the 1970s.

Google said Jan. 12 it might close its China-based search engine, Google.cn, because it no longer intends to censor the results as it has for the past four years. And, the company, warned, the decision could lead the company to pull out of the country completely.

The threat stemmed from computer hacking attacks on Google's computer code and efforts to break into the e-mail accounts of human rights activists. Google said the intrusions originated from within China, but stopped short of linking them directly to the country's government.

Google Chief Executive Eric Schmidt told analysts last week that the company planned to make changes in China in "a reasonably short time" while raising hope for a compromise.

"We made a strong decision that we wish to remain in China," Schmidt said. "We like the business opportunities there. We'd like to do that on somewhat different terms than we have."

The dispute with China prompted Google to postpone the planned release last week of its latest mobile phones for the country, a market with more than 700 million accounts. But the company says it still hopes to sell the phones in China.

Even if Google.cn is shut down, Google wants to keep its Beijing development center and sales offices in Beijing, Shanghai and Guangzhou, according to a person familiar with its thinking. But that won't happen if management believes its decision to stop censoring search results will jeopardize employees in China, according to this person, who asked not to be identified because of the sensitivity of the negotiations.

Google will not say how many employees it has in China, but industry analysts estimate its work force at 700 cash advance no fax. The company, based in Mountain View, Calif., employs about 20,000 people worldwide.

The Chinese sales force is important to Google because most of the company's revenue in China comes from online ads sold on Google's U.S. Web site, Google.com. The company also runs an ad network that places marketing messages on other China-based Web sites besides its own.

Analysts say keeping Chinese advertisers happy would be more difficult if Google closes its sales office in the country and tries to connect with the customers from abroad. Alienated advertisers would be more likely to defect to alternatives still based in China, such as Baidu Inc. and Alibaba Group, which is part owned by Yahoo Inc.

Google trails Baidu with about 35 percent of China's search market to its local rival's 60 percent.

If Google does close Google.cn, it could go back to trying to reach Chinese Internet users with the Chinese-language portion of Google.com. That was Google's strategy before 2006, when it opened its censored search engine to better reach the Chinese population. Google opted for a China-based search engine because the Chinese government used its Internet filters to restrict access to the U.S. site.

Beijing encourages Internet use for education and business but tries to block material it deems subversive or pornographic and was filtering access to Google's U.S. site.

In a sign of hardening Chinese attitudes, the Ministry of Industry and Information Technology on Monday denied government involvement in Internet attacks and defended its online surveillance as lawful. The Communist Party newspaper People's Daily accused the U.S. government of controlling the Internet at home while urging other countries to build an "Internet freedom utopia," which it called "only an illusion of freedom."

There's still a chance that Chinese leaders may be more conciliatory behind closed doors. Google has been more circumspect publicly since confronting China in a blunt posting on the company's Web site.

In recent years, companies have learned better how to deal with Beijing and to channel complaints about market barriers and regulations through trade groups. That helps to conceal their identity and shield them from retaliation.

Last year, manufacturers that opposed Beijing's order to include its "Green Dam" Web-filtering software with personal computers worked through trade groups and refused to talk about it publicly. The government withdrew its order in June in a rare last-minute reversal, though schools are required to use the filter.

Wal-Mart Stores Inc., which resists efforts to form labor unions in its stores elsewhere, faced an organizing campaign by China's state-sanctioned labor group in 2006. The company ultimately agreed to cooperate in forming unions at its dozens of China outlets.

The Google dispute could heighten disputes within the Communist Party over how to balance security and economic development, Broadfoot said. He said the search giant's future in China might be decided by the outcome of that struggle.

"Those two factions have to conduct a very difficult dance that they really don't want the outsiders to watch," he said. "The most important lesson out of this is it helps us understand the kind of economic player China wants to be."

___

Michael Liedtke reported from San Francisco.

Google negotiating ways to keep presence in China

NEW YORK (MarketWatch) -- Among the companies whose shares are expected to see active trading Monday are Apple Inc., Google Inc., Texas Instruments and Amgen.

Apple Inc. is projected to report first-quarter earnings of $2.10 a share, according to a consensus survey by FactSet Research. The company also could unveil a new tablet computer at the time. See story.

Separately, Apple has spoken to Hachette Book Group, Hearst Corp. and McGraw-Hill Cos. and about using their content for its tablet computer, according to a weekend report from Bloomberg that cited people familiar with the development.

Search-engine behemoth Google Inc. also could make a big move. After Friday's closing bell, Google said co-founders Larry Page and Sergey Brin will each sell about 5 million shares under pre-arranged stock trading plans. See story.

The sale of the shares is likely to be spread over an extended period of time to minimize market impact. Page and Brin hold about 57.7 million of Class B common shares, which represents around 18% of Google's capital stock.

Texas Instruments is expected to post earnings of 49 cents a share in the fourth quarter.

Amgen is forecast to post earnings of $1.14 a share in the fourth quarter.

With Ben Bernanke facing a rocky reconfirmation, the markets are getting jittery about the outlook for monetary policy. Tony Crescenzi, Pimco's bond-fund manager, assesses next steps for investors in an interview with MarketWatch's Laura Mandaro.

VMware Inc. is likely to post fourth-quarter earnings of 26 cents a share.

Analysts estimate Zions Bancorp to report a fourth-quarter loss of $1.70 a share.

AK Steel Holding Corp. is expected to post earnings of 20 cents a share in the fourth quarter.

Albemarle Corp. is forecast to report fourth-quarter earnings of 57 cents a share.

Crane is likely to post fourth-quarter earnings of 52 cents a share.

Eaton is projected to report fourth-quarter earnings of $1.23 a share 24 hour payday loan.

Halliburton Co. is expected to post earnings of 27 cents a share in the fourth quarter.

Motorola Inc. said it has filed a complaint with the U.S. International Trade Commission accusing Research In Motion Ltd. of infringing on five of its patents. Motorola said that the patents cover "early-stage innovations developed by Motorola in key technology areas, such as Wi-Fi access, application management, user interface and power management."

The wireless device maker is asking the ITC to begin an investigation and issue an exclusion order barring the sale of certain RIM devices from the market. Canada-based RIM is the maker of the popular BlackBerry smartphone, while Motorola sells the rival Droid device.

Rambus Inc. said that the administrative law judge of the U.S. International Trade Commission has ruled that three of five Rambus Inc.'s patents are valid in connection with the chip design company's dispute with Nvidia Corp. and other companies.

Rambus had asked the ITC to bar Nvidia from importing or selling products that allegedly infringe on some of the company's patents. The ITC judge found two patents invalid. An Nvidia spokesman said the company is "disappointed" about the ruling on the three patents, and plans to pursue the issue before the full commission for a final decision. More details on ITC's ruling in favor of Rambus

Valero Energy Corp. said late Friday it's in "advanced negotiations" to sell its terminal operation and discontinued operations in Delaware City, Del. to PBF Investments, LLC. Valero halted operations at the refinery in November. The San Antonio, Texas-based company said the parties are continuing their discussions, with no specific timetable currently in place. PBF Investments is the investment vehicle of Petroplus Holdings AG , the largest independent refiner and wholesaler of petroleum products in Europe.

Stocks to Watch: Apple, Google, Texas Instruments in focus

ELYRIA, Ohio – President Barack Obama is telling voters in Ohio, wracked by high unemployment, that investments in clean-energy technologies will help boost the nation's economy.

Obama planned Friday's visit to test an aggressive populist push on jobs, a top concern for voters. The White House is shifting its message to emphasize the economy heading into fall elections expected to be difficult for Democrats.

Before Obama landed in Cleveland Friday, Ohio reported that its unemployment rate climbed even higher in December, to 10.9 percent from 10.6 percent the month before.

In northeast Ohio, where steel mills have given way to rust, Obama toured EMC Precision Manufacturing, based in Elyria, and visited with some of the 44 employees still on the factory floor. A year ago, the family-owned maker of custom-made machine products had 77 employees.

"These are the way of the future," Obama told the workers as they demonstrated what they do. "Extraordinary."

En route, his motorcade whizzed by scores of building either for lease or sale, a reminder of the economic hard times everywhere.

A town hall session also was on Obama's public schedule at Lorain County Community College, near Cleveland. He was last in the county before the state's March 2008 presidential primary, when he delivered a speech on the economy at a drywall factory that closed two months later.

Obama was expected to note such challenges as he spends a day in the state that delivered him a victory in his 2008 campaign but is shaping up to be a tough haul heading into elections for an open Senate seat and the governor's office as well as the House delegation guaranteed pay day loans.

Officials are tinkering with a revamped Obama message in the face of a potentially disastrous political shift that, on Tuesday, elected Massachusetts Republican state Sen. Scott Brown to the U.S. Senate in a seat long occupied by the late Sen. Edward M. Kennedy.

Obama looked to Ohio to reset his record with a campaign-style day, complete with a tour of a wind turbine plant and visits with local leaders. He also sought to harness the energy of the campaign trail that he mastered during his two-year campaign for the presidency.

At the White House on Thursday, he stridently challenged Wall Street and urged Congress to limit banks' size and practices.

"If these folks want a fight, it's a fight I'm ready to have," Obama said.

His reaction to a Supreme Court decision rolling back limits on campaign donations by big business was stern. He charged that the decision would allow wealthy special interests to "drown out the voices of everyday Americans" and promised a "forceful response."

It wasn't the way Obama wanted to mark this week's first anniversary of his presidency. Nonetheless, a chastened but determined White House team, populated with campaign-seasoned aides accustomed to stark setbacks, began to grapple with the implications and chart a path forward after the Brown victory.

Obama takes latest jobs message to hard-hit Ohio

MUMBAI/NEW DELHI (Reuters) – Oil & Natural Gas Corp (ONGC) posted its second straight rise in quarterly profit on higher oil prices, but uncertainty surrounding subsidy payments may keep investors shy of the state-run explorer.

The group is required to partially subsidise the sale of fuel to state retailers, which sell petrol and diesel at government-set prices below the market rate, affecting its earnings.

Higher oil prices in the December quarter than a year earlier lifted ONGC&&9;s net proceeds after subsidy payouts, helping the company&&9;s net profit rise 23 percent.

But ONGC operates under a complex government subsidy rule which means it would have to bear a bigger burden if oil prices rise further as the global economy recovers, hurting results in future quarters.

"It does not make sense to venture out into the stock until there is more clarity on the government policy regarding subsidies," said Deepak Pareek, an oil and gas analyst at Angel Broking.

Net proceeds after subsidy payouts soared 70 percent to &&6;57.69 a barrel in its fiscal third quarter ended December from &&6;33.99 a year earlier.

ONGC said its subsidy cost in the quarter was 35 billion rupees (&&6;761 million), compared with 49 billion a year earlier.

It reported a net profit of 30.5 billion rupees for October-December, up from 24.8 billion a year earlier and compared with an average forecast of 47.6 billion in a Reuters poll.

INCREASED BURDEN

A lack of clarity about the government&&9;s subsidy rules means analysts estimates for ONGC are often disparate equifax free credit report.

"When oil prices stay at about &&6;65 a barrel, ONGC tends to benefit, but anything more than that means the subsidy burden will get much higher," Pareek said.

Oil fluctuated below &&6;78 a barrel on Thursday.

Ahead of the results, shares in ONGC, India&&9;s second-most valuable company with a market worth of &&6;56 billion, fell 2 percent to 1,140 rupees in a Mumbai market that shed 2.4 percent.

The shares had risen 0.5 percent during the December quarter, underperforming a 2 percent rise in the main index.

ONGC will invest 21.6 billion rupees in a field off India&&9;s west coast, its chairman said. "The peak envisaged oil production from the D1 field is expected to be about 36,000 barrels per day during 2010-13," R.S. Sharma said.

Yet the company is likely to fall short of its 2009/10 oil output target of 25.76 million tonnes by 1 million tonnes, he said. "Production is declining faster than estimated ... Production is definitely under a lot of pressure."

Crude oil production fell 3 percent in the December quarter to 6.7 million tonnes, while natural gas output rose marginally to 6.45 billion cubic metres.

The company decided to abandon 37 wells in the third quarter and took a related charge of 24.8 billion rupees, Sharma said.

(Editing by Valerie Lee and David Holmes)

(&&6;1=46 rupees)

ONGC Q3 net up, but subsidy worries linger