Money world

St. Louis area casinos turned in generally flat results in March, the slack time between winter and the start of the spring tourism season.

The area’s six gambling halls took in $103.2 million last month, up 3 percent from the $99.8 million take in March 2011. Last month’s results marked the second full year of operation of Pinnacle Entertainment’s River City casino, which shows steady double-digit monthly revenue gains.

Figures out Tuesday from regulators in Missouri and Illinois showed that three St. Louis-area casinos posted revenue gains in March while three experienced generally small declines.

Ameristar, in St. Charles, and Harrah’s, in Maryland Heights, frequently trade places as the area’s largest casinos by revenue. It was Harrah’s turn in March, when it edged Ameristar $25.2 million to $24.8 million in monthly revenue. Argosy Alton continued to struggle the most, with revenue down 9.3 percent over March 2011 figures.

April’s results could provide a clearer look at what has become a mature St. Louis casino market. In April 2011, revenue growth continued after the expansion-driven bump River City provided. The unusually mild weather this month and the start of baseball season, which is bringing more tourists — and gamblers — could show further evidence that St. Louis is a slowly growing but steady billion-dollar casino market.

 

Scuffling along

Casino            March change           Revenue (in mill.)

Harrah’s             8.1 percent                   $25.2

River City         12.7 percent                   $19.3

Lumière Place   -2.7 percent                  $15.4

Ameristar         -0.1 percent                  $24.8

Casino Queen   2.8 percent                  $12.1

Argosy Alton    -9.3 percent                    $6.4

Market total      3.3 percent                $103.2

Sources: Missouri Gaming Commission, Illinois Gaming Board

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The end appears near for LightSquared, one of the wireless industry’s grandest and riskiest gambles.

It’s odd to think of a company backed by $5 billion as a startup, but that’s what LightSquared is. It wanted to become the country’s fifth nationwide wireless carrier by going toe-to-toe with giants like Verizon and AT&T — an ambitious vision it had a real shot at pulling off.

Now, after a series of potentially fatal regulatory setbacks, it’s mulling bankruptcy. Philip Falcone, head of LightSquared’s majority owner Harbinger Capital Partners, told Reuters the company is "seriously considering" the option.

In a subsequent email to CNN, Falcone said: "I’ve said it is and always has been one of our options."

Chapter 11 wouldn’t necessarily spell the end, but it would move the goal posts much farther away. That’s a disaster for a company already backed up in its own end zone.

The unraveling began in February, when government regulators said they would bar the company from launching its network. LightSquared failed to convince the Federal Communications Commission and the National Telecommunications and Information Administration that its network would not interfere with GPS signals.

CEO Sanjiv Ahuja stepped down two weeks later. In March, LightSquared’s biggest partner, Sprint Nextel (, Fortune 500), ended its $9 billion agreement with the company.

In a time when many big companies prefer sitting on their cash to making major capital investments, LightSquared swung for the fences. Building a nationwide wireless network from scratch is bogglingly expensive, but LightSquared is backed by a nearly $3 billion investment from Harbinger and more than $2 billion from other investors.

What made those investors believe their billions could pay off was that LightSquared is sitting on a truckload of valuable wireless spectrum.

LightSquared hoped to enter the wireless market as a wholesale provider of 4G service. That means it would provide the infrastructure and the network, but it would rely on its business partners to sell the service. Carriers aren’t exactly known to be good retailers, so the thinking was, "Why not let the experts handle that?"

The idea took off: The company signed 40 partners from a wide array of businesses, including retailers like Best Buy (, Fortune 500), device manufacturers like AirTouch and other carriers like Sprint and Leap Wireless ().

By partnering with LightSquared, Best Buy could have sold devices with Best Buy branded wireless service, Sprint could get much-needed capacity, and device makers could package service with their smartphones. Imagine one day being able to buy an iPhone with Apple’s (, Fortune 500) own wireless service.

LightSquared planned to severely undercut its competition. By selling only efficient 4G service — and not operating legacy 2G and 3G networks that are costly to maintain — LightSquared said it could offer its service starting at just $7 per gigabyte.

Verizon and AT&T offer data rates of around $15 per gigabyte. But smartphone customers are required to buy voice and data packages, which start at $75 for 450 minutes and 2 GB. Since few actually come close to reaching their limits, the average U flexcheck cash advance.S. smartphone customer pays about $56 for every gigabyte they use, LightSquared claims.

"You can triple or even quadruple our rate, and it’s still a dramatic savings over what consumer pays today," former CEO Ahuja told CNNMoney in late 2011. "We think the average price of wireless service should drop by 50% once we launch. The American consumer is simply paying too much."

LightSquared was attempting to fill a niche that no one else is playing in.

Verizon (, Fortune 500) and AT&T (, Fortune 500) are reluctant to sell their services wholesale, because spectrum is so scarce — and even if they did, they wouldn’t be able to match LightSquared’s proposed prices.

There’s also Clearwire (), but Clearwire’s model is primarily to sell supplementary coverage in high-density areas to existing carriers. Other potential entrants, like cable giant Comcast (, Fortune 500), kicked the market’s tires and fled. The investment costs are simply too steep, Comcast executives have said.

Of course, when things sound too good to be true, they usually are.

LightSquared’s spectrum was originally licensed only for satellite services, not the much stronger terrestrial transmissions LightSquared wants to put there. Its entire business hinges on getting a waiver for its spectrum use.

That initially seemed likely. The Federal Communications Commission granted a temporary waiver, and powerful Washington backers supported LightSquared’s vision.

But concerns about signal interference with GPS devices plagued LightSquared, and in the end, regulators decided that it was too risky. They revoked the waiver.

Falcone says he remains determined to fight the good fight. But if LightSquared doesn’t get regulatory green lights by the end of the year, the company will run out of money and will be forced to sell off its assets, according to Jonathan Chaplin, analyst at Credit Suisse.

That’s because LightSquared has relatively fixed costs — with or without customers.

The company predicts its network and infrastructure will cost $30 billion to operate and maintain over the course of the next five years. It will cost LightSquared $30 billion to operate a network with zero customers and $30 billion to run a network with 25 million customers.

With customers, Chaplin thinks the venture could have been profitable just a few years after launching. But Chaplin now thinks that other potential customers will follow Sprint’s lead and dissolve their deals.

"The great shame about LightSquared is that it could have stirred up the industry, and it could have benefited consumers tremendously," Chaplin said. "But with no spectrum, there’s just the fixed cost of running a network."

Hence the bankruptcy chatter. That’s the risk of giant gambles: Sometimes you roll snake eyes.

But if LightSquared collapses, it will take with it the wireless industry’s best shot at launching an entire wave of new rivals to the strengthening AT&T/Verizon duopoly.

-CNN’s Felicia Taylor contributed to this story 

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The sweet deal at Crestwood Court, with dirt-cheap rents and all the space you could want, may have come to an end.

But now many of the mall’s little birdies are spreading their wings. A number of the mom-and-pop shops who used the mall’s three-year-long ArtSpace experiment as a business incubator have started moving into other spaces around town.

Bryan Laughlin Jr., who runs The Option B Designery, just signed a lease to move into a building about a mile south of the St. Louis Galleria on Brentwood Boulevard. He ended up finding a generous landlord there, too.

“It’s kind of a blessing in disguise, because we’re in a situation where we’re not paying much more for a prime spot in Brentwood as opposed to paying less for a bigger space in basically a ghost town,” he said.

But he’s not complaining about his year in Crestwood Court.

While the mall didn’t get a lot of traffic, it did give he and his brother a chance to bring in more sales and run a showroom for their business, which previously operated solely online. They sell antiques, art and fashion from the Victorian Era to Yves Saint Laurent and also restore furniture with their father.

“Since we ran it ourselves, we made quite a bit of money last year to help set us up for the future of our business,” he added.

Jennifer Klayman and her mother, Lois, are also happy with their new digs on the Delmar Loop. The duo moved Re-Designz, an eclectic vintage and retro goods store, to a storefront next to the Tivoli last month.

Like many ArtSpace tenants, they had to move out of Crestwood Court by the end of February to make way for still somewhat mysterious redevelopment plans for the mall.

“Crestwood was a good foundation to get our product known and our name known – to get some recognition – so when we moved we did have a following,” she said.

The rent is higher on the Loop – and the space is about half the size – but Klayman says she gets a lot more foot traffic coming by. And, she added, the smaller quarters has forced her to edit down the selection.

“That’s good, because it makes me pick and choose pieces more carefully,” she said.

Denise Krekeler has actually upgraded to a bigger space after leaving the mall paydayloan. She and her husband moved their store, Yeti Gaming, into a 4,000-square foot space last week. They wanted to stay in the area, near their customer base, so they just moved down the street from the mall to 361 Watson Plaza.

They had quickly outgrown the 1,200-square foot space they had in the mall. Kids often spilled out into the mall’s corridors as they played in the store’s Pokemon and Yu-Gi-Oh! tournaments.

So she was ready to move on around the same time the mall announced that tenants had to move out. Still, she was sad to say goodbye to the community that had formed in her corner of the mall with a nearby science fiction lounge and an anime store.

“We all became friends,” she said. “So that was kind of hard to leave. But it was a wonderful experience for a small business owner who wanted to try something who probably wouldn’t get a chance to do that in a regular strip mall.”

BIGGER BOXES

So last week I wrote about how big box stores are becoming smaller boxes. Then, of course, Menard Inc. had to come along and prove me wrong – or at least, give us an exception to the rule.

As you might have read this week, the Wisconsin-based home improvement retailer was chosen by the Richmond Heights city council to develop a two-story, 246,346 square foot store just east of Hanley Road. That doesn’t sound like a small – or even smaller – box at all.

The retailer has been bucking the trend and doubling the size of some of its stores. And the new ones it is building are obviously quite big.

Jeff Abbott, a Menards spokesman, didn’t respond to a question about the company’s strategy to build bigger stores. And he didn’t go into detail about the retailer’s attempts to open its first stores here.

In addition to the Richmond Heights location, the company is also seeking a zoning change to put in a store on Manchester Road in west St. Louis County.

“We’re working through approvals but have nothing official to report at this time,” Abbott wrote in an email.

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Global stocks were buoyant Tuesday while the euro struck a near one-month high against the dollar after Federal Reserve chief Ben Bernanke indicated that U.S. monetary policy will remain loose for some time to come to spur the economy.

On Monday, Bernanke said the U.S. job market was still weak despite recent signs of improvement. Investors interpreted his comments as a clear suggestion that the Fed will continue to prop up the economy by keeping short-term interest rates near zero. Some even speculated it could mean the Fed would be willing to buy up more bonds.

The Fed has so far embarked on two rounds of bond-buying, most recently in late 2010, known as quantitative easing. The idea is to drive down long-term interest rates and encourage investors to buy stocks. The second round ignited a 28 percent Wall Street rally over eight months.

The mere thought that a third round of bond-buying, dubbed QE3 by industry insiders, might be possible triggered a turnaround in markets, which last week had been shaken by signs of economic slowdown in China and Europe.

“Once again we are through the looking glass, in a world where stocks rise on hopes that U.S. economic data will weaken, since this then raises the probability that the Fed will launch QE3,” said Ben Critchley, a sales trader at IG Index.

“We remain stuck in a world where markets seem unable to cope without the possibility of monetary stimulus, underscoring the fact that the global economy still has some way to go before it is successfully weaned off active central bank intervention,” he said.

In Europe, the FTSE 100 index of leading British shares was up 0.3 percent to 5,392 while Germany’s DAX rose 0.7 percent to 7,130. The CAC-40 in France was 0.6 percent higher at 3,524.

Wall Street was also poised for a solid opening after Monday’s stellar gains, which saw the Standard & Poor’s 500 index close at 1,416.51, its best finish since May 2008 _ both Dow futures and the S&P futures indicated a 0.2 percent advance at the open.

In the currency markets, the euro continued to find support as investors became more comfortable with riskier trades. Conversely, Bernanke’s hint that rates will remain low hurt the dollar _ lower rates tend to weigh on a currency by reducing the returns investors get from holding it.

The euro was up 0.2 percent at $1.3374, its highest level for nearly a month.

Bernanke’s comments also helped support prices for commodities since they are traded in dollars _ when the U.S. currency drops, commodities become more attractive to investors holding other currencies, such as the euro.

The benchmark New York oil price was up 18 cents at $107.21 a barrel, near nine-month highs.

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Americans have pumped less gas every week for the past year.

During those 52 weeks, gasoline consumption dropped by 4.2 billion gallons, or 3 percent, according to MasterCard SpendingPulse. The decline is the longest since a 51-week period during the recession.

The main reason: higher gas prices. The national average for a gallon of gas is $3.88, the highest ever for this time of year, and experts say it could be $4.25 by late April. As a result, Americans are taking fewer trips to restaurants and shopping malls. When they take a vacation, they’re staying closer to home.

But the decline in gas consumption is also a sign that efforts to push car makers to produce vehicles with better gas mileage are paying off. The average new car now gets nearly 24 miles to the gallon, compared with about 20 mpg just four years ago, according to the University of Michigan Transportation Research Institute.

“I’d expect to see lower gasoline consumption for several years to come,” Rice University energy expert Ken Medlock says.

Americans have cut back on fill-ups for extended periods before. In 2008, gas spiked from $3.04 to $4.11 per gallon in seven months. It wasn’t until January 2009, when the national average for gas had dropped to $1.86 that consumption increased. Drivers bought more gasoline for 23 weeks in a row.

“The spike in 2008 was a real shock to the system,” Medlock says. “There’s still a residual impact on people’s driving behavior.”

There were other stretches of reduced gas use, notably two into the 1970’s and one in the early 1980’s. But in those cases, Americans eventually went back to driving big cars and trucks that guzzled gas.

This time may be different. Medlock thinks economic growth will be too modest and gas prices will stay too high for Americans to start driving more anytime soon. Economists expect the U.S. economy to grow 2.5 percent in 2012. The government estimates that gas will average a record $3.79 per gallon for the year.

John Gamel, who oversees MasterCard SpendingPulse’s weekly consumption report, points to rising sales of fuel-efficient vehicles.

“People have gotten used to elevated prices and they’ve made their long-term purchases,” Gamel says. “They’re going to be using less fuel.”

Consumers now care more if a car gets good gas mileage than if it’s reliable, stylish or comes with a great deal, according to a survey of more than 24,000 new-vehicle owners taken last summer and fall by J.D. Power and Associates. That wasn’t the case in the nine previous years that J.D. Power conducted the survey.

Automakers have listened to consumers, and responded to stricter government fuel economy requirements. They’ve improved engines and transmissions so cars burn less fuel. They’ve also made cars more aerodynamic, boosting mileage by cutting wind drag. The government is gradually increasing gas mileage requirements so that by 2025, cars and trucks will have to average 54.5 mpg.

Between February 2011 and February 2012, the combined city-highway mileage of a new vehicle sold in the U.S rose to 23.7 mpg from 22.7. Better gas mileage has a huge impact on the overall economy. At $3.86 per gallon, U.S. drivers would save $35.8 billion per year with a 1 mpg improvement for the entire fleet of cars, trucks and buses, according to Michael Sivak, a research professor with the University of Michigan Transportation Research Institute.

Consumers would appreciate the help. The rise in gas prices has been so steep that they’re still spending more on gas than a year ago despite using less.

Gasoline prices rose by 24 percent in the last 52 weeks, according to auto club AAA, Wright Express and Oil Price Information Service. MasterCard, which collects purchase receipts from more than 100,000 service stations around the country, said spending on gas rose by 20 percent during the period.

In 2011, Americans spent 8.4 percent of their household income on gasoline, or about $4,155, compared with 6.7 percent in 2010, according to experts at OPIS.

W.M. Lewis, a general contractor in Anchorage, Alaska, says he is spending as much as $150 a week on gas. He’s consolidating his errands, but still limiting his driving because fuel keeps getting more expensive.

“It’s changing everybody’s plans,” he says. “You have less money to spend.”

Behind all this is the high price of oil. Brent crude, which is used to price most of the oil used to make gasoline at many U.S. coastal refineries, has jumped by 16 percent this year to more than $124 per barrel. Benchmark U.S. crude has risen 9 percent this year to more than $107 per barrel.

Increased gas use by the growing number of drivers in China and other developing nations more than makes up for the drop in the U.S. That contributes to an increase in global demand for oil, which in turn pushes the price higher. Fear of a disruption to oil supplies from the Middle East also is keeping oil prices at lofty levels.

____

Krisher reported from Detroit. Associated Press Writer Rachel D’Oro in Anchorage contributed to this report.

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Federal trade officials today announced a decision to impose modest tariffs on solar panels from China after concluding that the government there unfairly subsidized manufacturers.

But the duties, ranging from 2.9 percent to 4.73 percent, are less than some analysts and industry officials had anticipated, raising questions as to how much U.S. manufacturers will benefit.

Tuesday’s decision stems from a complaint by the Oregon-based subsidiary of Germany’s SolarWorld AG and six other manufacturers accusing Chinese rivals of dumping crystalline silicon solar cells and panels in the United States at artificially low prices and receiving billions of dollars in Chinese government subsidies.

The resulting investigation is among several pending trade cases that have escalated tensions between the economic superpowers in recent months. It has also fractured the U.S. solar industry during a period of record growth.

SolarWorld sought tariffs to offset the flood of low-cost Chinese solar panels that now make up about half of the U.S. market, up from 8 percent in 2008.

Sales of Chinese-made solar panels in the U.S. has quadrupled over the past two years to $3.1 billion in 2011, according to the Commerce Department.

Meanwhile, prices in the United States fell by 50 percent, leading at least a dozen American manufacturers to close plants, lay off workers or go bankrupt, SolarWorld said.

But solar developers and installers have benefited the rapid decline that contributed to a record 1,855 megawatts of solar-power generating capacity going on line last year, according to GTM Research.

Solar developers including California-based SunEdison — a unit of O’Fallon, Mo.-based MEMC Electronic Materials Inc. — say tariffs on Chinese imports would raise prices for consumers and be a net job killer.

The majority of the U.S. solar industry’s 100,000 jobs are installers, distributors and electricians who work for small firms “downstream” of the manufacturing process, and those jobs would be in jeopardy if solar prices rise, they say.

Jigar Shah, president of the coalition, whose members include MEMC, called Tuesday’s decision is “relatively positive” and said it wouldn’t “significantly raise solar prices in the United States.”

“This decision clearly demonstrates that the Commerce Department did not find the Chinese government engaged in massive subsidization,” Shah said.

But SolarWorld and other manufacturers who brought the case said it affirms what they alleged — that Chinese manufacturers benefited from unfair government assistance.

The coalition of solar manufacturers that filed the complaint said the duties announced Tuesday are consistent with the government’s findings in other countervailing duties cases involving China.

Gordon Brinser, president of SolarWorld Industries America Inc., said Tuesday’s decision is “the first step in a process that will roll out over the next several months.”

The companies that filed the complaint didn’t ask for a specific level of countervailing duties. But they did seek anti-dumping duties of 100 percent or more. And that part of the case is yet to be decided.

The Commerce Department is continuing its look into allegations that China sold panels in U.S. at below-market prices. A separate set of anti-dumping tariffs could be imposed based on the results. A preliminary decision is expected on May 17.

“If we address unfair trade practices in the U.S. solar market, we can get back to our business of expanding American manufacturing and jobs in the renewable energy sector,” Carlo Santoro, an executive at New Jersey-based MX Solar USA, said in a statement. “We look forward to getting back to the fair and legal competition that serves everyone best.”

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The U.S. economy is growing again but faces tough challenges that call for action to create jobs and foster expansion, U.S. Treasury Secretary Timothy Geithner said on Thursday.

Geithner, speaking to the Economic Club of New York, singled out rising oil prices as a stumbling block for the economy because they force consumers to pay more for gasoline at the pump.

He said the economy was now more productive than it was before the 2007-2009 financial crisis but cautioned that confidence remains fragile.

“That is why it is so important that policy makers continue to work to get the economy growing faster in the short term and not shift prematurely to fiscal restraint,” he said.

“We can’t cut our way to growth. Severe austerity now would be very damaging,” he added.

He cited a number of factors that together mean Americans are facing “a dangerous and uncertain world,” including escalating energy costs.

“There is no quick and easy fix to this problem, but it reinforces the need for more progress to develop additional sources of energy of all forms,” Geithner said.

Earlier on Thursday, Reuters reported that Britain was ready to cooperate with the United States on a release of strategic oil stocks, likely within months.

Geithner noted that at the end of 2012, the country faces a simultaneous expiry of tax cuts and big across-the-board spending cuts that together would amount to about five percent of the country’s gross domestic product.

The prospect of such a blow to national output should be a strong incentive for lawmakers to reach some compromises on taxes and spending, he suggested.

Geithner said the Obama administration is aiming for a package of measures that includes some tax increases for wealthy Americans, though that is opposed by Republicans.

“If you do not raise revenues through tax reform, then you have to find another 1 percent of GDP or roughly 1.5 trillion dollars over 10 years in additional savings from defense, Social Security, Medicare, education or low income programs,” he said.

During a question period later, Geithner said the country now faces “stark choices” about the best course for boosting growth and getting deficits down.

He suggested there was “no alternative” to raising some taxes along with reducing spending and said reductions in some benefit programs were “manageable” if they were made over time.

People are going to be reluctant to see their benefits cut unless they think that those benefit cuts are not going to sustain tax rates we can’t afford,” he said.

“They go together. There’s no alternative. It’s going to have to happen and it’s better for us if it happened sooner and with design in it than happen too late without the opportunity for people to adjust,” Geithner added.

He noted that research shows that recoveries that follow financial crises tended to be “more tentative and uneven” and said it likely will take years to fully repair damage caused by the last one.

In response to questions, Geithner said that actions by the European Central Bank to keep markets liquid as well as actions by new governments in Italy and Spain had “substantially calmed the really acute financial tensions of the past 18 months” and reduced downside risks to the global economy.

“For that to be sustained, we’re going to need to keep a close eye on oil and Iran and gas prices plus we’ve got to make sure Europe keeps moving to sustain its progress,” he added.

If Europe builds a stronger financial firewall, Geithner said it would be appropriate for the International Monetary Fund to raise more resources and play a larger role in helping Europe. “If Europe moves on that front, I think you’ll see the IMF try to reinforce that,” he said.

Geithner said the United States must also prepare for a future in which emerging-market countries like Mexico, China and Brazil are getting better at competing and are putting pressure on American jobs.

One way to do that is by reforming a corporate tax system that Geithner described as “a complex and unfair mess of subsidies…with a very high statutory rate” of tax that varies across industries. It needs to be reformed to encourage U.S. businesses to keep production at home, he suggested.

Geithner has previously indicated that he is staying in the Obama administration through this year’s elections but, even if President Barack Obama is reelected, would not be back in a second term.

He said the country can’t let up on the effort to reduce deficits and said Americans should beware of promises that tax cuts can pay for themselves.

“No responsible politician can offer the nation fiscal sustainability through trillions in unpaid-for tax cuts,” Geithner added.

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The resilience of the largest U.S. financial firms when tested against a recession more severe than the last one shows regulators have succeeded in pushing banks to build fortress-like balance sheets.

The Fed yesterday said 15 of 19 banks would be able to maintain capital levels above a regulatory minimum in an

As more details emerge about the massive $26 billion foreclosure settlement between the five biggest mortgage lenders and the states’ attorneys general, a growing number of borrowers are realizing that the deal will do little, if anything, to help them out.

Proponents of the settlement deal tout that roughly 1 million homeowners who owe more on their homes than their homes are worth are expected to have their mortgage balances lowered through principal reductions and another 750,000 would be able to refinance into loans with lower interest rates.

Foreclosure Fiasco

Rage grows over mortgage deal BofA to slash mortgage balances by $100,000 or more ‘How we’re losing our multi-million dollar home’ Foreclosures made up one in four home sales Uncle Sam wants you to rent out its foreclosed homes

Quiz: What the rich really pay in taxes

However, that’s only a fraction of the 11 million homeowners who are currently underwater on their homes, according to CoreLogic. And it’s also a mere sliver of the 3.5 million people who lost their homes to foreclosure over the past four years.

"The impact [of this settlement] will be small," said Mark Zandi, chief economist for Moody’s Analytics. "It’s not a home run; it’s a single."

Principal reductions will also only apply to certain borrowers who have mortgages still held by the five major lenders: Bank of America (, Fortune 500), CitiBank (, Fortune 500), Wells Fargo (, Fortune 500), J.P. Morgan Chase (, Fortune 500) and Ally Financial.

Borrowers who have a mortgage held by Fannie Mae (, Fortune 500) or Freddie Mac () — roughly half the market — are out of luck. Loans insured by the Federal Housing Administration are also ineligible.

Please buy our $2 million dream home

"If it’s offered to one group, it should be offered for all," said Stacy Ovendale from Seattle, who says her home has lost nearly 50% of its value. "When my mortgage was written up, I had to take whatever program was available to me at the time, which happened to be FHA. … It’s so frustrating because my loan is with Bank of America but since it’s FHA, my mortgage is current and I have chosen to be responsible, there is nothing they can offer me in the way of principal reduction."

Edward DeMarco, the director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, said he won’t allow the agencies to reduce borrowers’ loan balances because it is unfair to taxpayers and works no better than other foreclosure prevention methods, such as lowering interest rates, extending loan terms or delaying payments.

To Cat Gouldman, who lives in the D.C. area, it’s a raw deal. Like her mortgage, most loans are not retained by the original lenders. They’re sold to Fannie or Freddie best payday advance. Borrowers aren’t given a choice when their loans are sold.

Britney Spears’ home for sale — half off!

In fact, the mortgage Gouldman and her husband took out changed hands several times. First, it was sold to Wells Fargo, then to IndyMac and then it was taken over by Fannie. Her home has lost about half of its value, she said, and she’s upset that she won’t be able to get the same principal relief that other borrowers will receive.

"This is not the right message for the federal government to send out," she said. "Do homeowners walk into banks asking if their loan is backed by Fannie Mae? I don’t think so."

"I think it’s a travesty," said Derek Buckingham of Everett, Wash., who has a Freddie loan. "The government appears to still have no accountability for the problems they helped incentivize the banks to create."

Some borrowers may qualify for much larger reductions than others, as well.

Bank of America, for example, said it will slash mortgage balances by an average of $100,000 or more for roughly 200,000 homeowners. The goal, according to BofA, is to reduce the amount owed on the home to 100% match the current market value. Meanwhile, the other four major mortgage lenders, CitiBank, Wells Fargo, JPMorgan Chase and Ally Financial, are expected to reduce qualified borrowers’ principal to between 115% and 125% of the value of their homes — an amount that the Department of Housing and Urban Development said should average about $20,000.

For the homeowners who bought responsibly and made their payments faithfully, the real inequity comes in the fact that their tax dollars are paying for government-funded programs to prevent foreclosures while irresponsible borrowers accrue the benefits like the ones offered in the settlement.

8 multimillion-dollar foreclosures

"So, these people who are underwater get a break from the banks, and other hard working folks like us get screwed?" wrote Karthik Subramanian, of Aurora, Ill., in an email.

"What I think is unfair, is that people who didn’t overleverage their homes, who paid their mortgages on time, who didn’t borrow more than they could afford, even if the bank said they could afford more, the people who had good common sense and have done the right thing, are left with all of this business loaded on their backs," wrote Jamie Smith of Sonoita, Ariz.

That said, every homeowner could benefit from such bailouts if they help to turn around the ailing housing market, where home price declines and slow sales continue to threaten the fragile economic recovery. The settlement, however, may not help enough borrowers to do even that, said Moody’s Zandi. 

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Attacks against al-Qaida’s favorite targets in Iraq killed 14 people Monday as insurgents struck security forces, a government office and jewelry stores, demonstrating a continued threat from armed groups as the country prepares to host a meeting of the Arab world’s top leaders.

Security officials expect al-Qaida to ramp up violence over the next few weeks as Baghdad prepares to host the annual Arab League summit at the end of the month.

There was no immediate claim of responsibility for Monday’s strikes, and numerous armed groups in Iraq have mixed attacks on political targets with money-making criminal operations. But al-Qaida in Iraq for years has been believed to fund itself in part with cash and gold stolen from jewelry stores.

Militants struck first in a pre-dawn raid Monday in the city of Tarmiyah, 30 miles (50 kilometers) north of Baghdad, where police said gunmen in at least two cars attacked the local mayor’s office. Three policemen were killed, police and health officials said. The mayor was not in his office at the time.

A half hour later and a few miles (kilometers) away, gunmen targeted a police patrol in a drive-by shooting. Two policemen were killed, officials said, and it was not known if the gunmen were the same group who attacked the mayor’s office.

A few hours later, two carloads of robbers armed with grenades and guns killed nine people and wounded 14 in a coordinated strike on an eastern Baghdad gold market, officials said. The militants simultaneously attacked jewelry stores and a nearby checkpoint.

Baghdad officials said two policemen, two soldiers and two goldsmiths were among the dead at the small market in the Shiite neighborhood of Ur.

“At first we heard shootings from the other side of the market, near the police checkpoint,” said eyewitness Maitham Moussa, 30, who owns of a dairy shop about 50 yards (meters) from the jewelry stores payday advance low fees. “Then we heard shootings very close to us. When the women started to yell, they started to open fire into the air and set off sound bombs.”

He said people fled the area and huddled together in a nearby alley to escape the siege. “I saw a woman was lying on the ground with a toddler,” Moussa said. “There was blood near the woman, but I’m not sure if she was injured or if was the baby’s blood.”

A police officer said the gunmen stole gold and cash after the late-morning heist, which the insurgents pulled off despite a gunfight with nearby security forces. Iraqi Army Gen. Hassan al-Baydhani of Baghdad’s military command said one of the gunmen was arrested but the rest escaped.

A doctor in a nearby Baghdad hospital confirmed the police casualty figures. They all spoke on condition of anonymity as they were not authorized to release information. Al-Baydhani put the number of dead at six. Conflicting casualty totals are common in the immediate aftermath of attacks in Iraq.

Although violence has dropped significantly since the sectarian fighting that brought Iraq to the edge of civil war just five years ago, deadly attacks still happen almost every day.

U.S. officials as recently as September said jewelry robberies were a main source of funding for al-Qaida in Iraq as it grapples with dwindling financial support. The Sunni militant movement also frequently targets officials of the Shiite-led government in a campaign to undermine confidence in its authority.

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