Flat-rate pension plan hits many

14 January 2013 Last updated at 12:04 ET

Pensions Minister Steve Webb: “People will retire with a single, simple, decent state pension”

Plans for a “simple” flat-rate state pension have been unveiled, but many of those entering the workforce now will be worse off than under current rules.

The government’s White Paper shows that there are short-term gainers but longer-term losers from the policy.

Instead of a basic pension of £107 a week plus various mean-tested top-ups, recipients will get £144 in today’s money from 2017 at the earliest.

The government said this was fairer for the self-employed and many mothers.

Figures in the White Paper, published on Monday afternoon, suggested that at least half of all people reaching state pension age before 2050 were likely to have a better outcome under the new system than they would if the current system were to continue. Of these, the majority would be better off by at least £2 per week.

However, by 2060, more than half would be worse off than if the current system continued, because they could not build up a state second pension.

After April 2017, people will also have to work longer, making 35 years’ worth of National Insurance (NI) contributions, rather than the current 30, to qualify for the full pension.

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Pension facts

• Currently 11.5 million people claim the state pension


• 2.8 million women receive a state pension of less than £80 a week. Only 474,000 men do so


• 3.2 million individuals receive pension credit to supplement their retirement income

Source: DWP

Anyone who has not paid NI for at least 10 years will not qualify for the new state pension at all.

‘Complicated’

The current full state pension is £107.45 a week, but can be topped up to £142.70 with the means-tested pension credit, and a state second pension which is based on National Insurance contributions.

Anyone who qualifies for the state pension before April 2017 will continue to receive their entitlement under the current system.

For new pensioners from April 2017, the second state pension and pension credit will be abolished. The replacement – the universal flat-rate payment in England, Wales and Scotland – will be the biggest overhaul of the pension system for decades.

Pensions Minister Steve Webb said that the single payment would make it clearer for people to see how much extra they needed to save, in private or workplace pension schemes, for a comfortable retirement.

He told MPs that 10 million people were not saving enough for their pension.

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Winners and losers

Winners include:

The self-employed, who currently do not build up a state second pension

Those who have spent time out of the workforce, such as mothers and carers of those with disabilities, will benefit in the short-term

Losers include:

Those entering the workforce now are likely to receive less than they would have done had the current system remained in place

Those who have fewer than 10 years of National Insurance contributions, who will get no state pension under the new rules

“The current state pension system is too complicated and leaves millions of people needing means-tested top-ups,” he said.

“Our simple, single-tier pension will provide a decent, solid foundation for new pensioners in an otherwise less certain world, ensuring it pays to save.”

But Labour said that the government had “dithered and delayed” over proposing reforms.

“We support sensible pensions reform but this government has consistently acted with secrecy and incompetence and we will study these plans very closely to ensure ministers are completely straight with the millions of hardworking people who will lose out under these plans,” said Gregg McClymont, the shadow pensions minister.

Overhaul

The change involves merging the state second pension with the basic state pension, to create one flat-rate payment.

The self-employed will benefit, as they tend to get a lower state pension. Women who have taken time out of the workplace to bring up children are also set to benefit.

“[These are] people who don’t make enough contributions throughout their working life to, in particular, the state second pension, which includes people with intermittent work patterns, periods of low earnings and the self-employed,” said Chris Curry, from the charity the Pensions Policy Institute.

Work and Pensions Secretary Iain Duncan Smith said: “This reform is good news for women who for too long have been effectively punished by the current system.

“The single tier will mean that more women can get a full state pension in their own right, and stop this shameful situation where they are let down by the system when it comes to retirement because they have taken time out to care for their family.”

Under the new system, anyone who works, has been claiming benefits for being unemployed, has been looking after children aged 12 or under, or caring for sick or disabled adults for 35 years will receive a fixed pension of £144 a week when they reach state pension age.

The amount will be lower if their if they have fewer “qualifying years” of this kind.

However, it will be updated each year – as the state pension is now – in line with earnings, prices, or 2.5%, whichever is higher.

Under established plans, the state pension age is rising to 66 for both men and women by 2020, with further plans for this to increase to 67 between 2026 and 2028.

Mr Webb told MPs that he wanted to see a review of the state pension age every five years, starting in the next Parliament.

He also said that all current workers’ accrued pension rights will be recognised, so the new system will have to involve some future pensioners being paid a top-up to the new, merged, flat-rate payment.

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The Comeback Cities of the Housing Recovery

The nationwide housing market is now in full recovery mode after suffering greatly during and following the market meltdown, and it’s believed that 2013 will be a big year for many markets. However, some cities did better than others.

Las Vegas and Seattle had the two biggest year-over-year improvements in home asking prices between 2011 and 2012, according to data from the real estate tracking firm Trulia. Las Vegas saw prices climb 16.3 percent in 2012 after falling a total of 11.2 percent over the course of 2011, marking a total jump of 27.5 percent. Meanwhile, Seattle’s total appreciation was 24 percent behind a 10.2 percent appreciation in 2012 after a 13.8 percent decline the year before.

[Related Article: Why You Can't Get a Home Loan]

“What a difference a year makes,” said Jed Kolko, Trulia’s chief economist. “In 2012, prices rose in 82 of the 100 largest metros, compared with just 12 metros seeing price increases in 2011. The 2012 price turnaround was strongest in the West and Southwest, where steady job growth and vanishing inventories lifted home prices by more than 10 percent in many markets.”

Rounding out the nation’s top three largest appreciations was Phoenix, which saw a 21.8 percent overall improvement, where prices have risen in both of the last two years (26 percent in 2012 and 4.2 percent in 2011), the report said. Oakland and San Jose, Calif., where the year-over-year differences came in at 21 and 20.8 percent, respectively. Oakland saw prices rise 12.7 percent last year after an 8.4 percent decline in 2011, while San Jose’s spiked 16.1 percent following a 4.7 percent drop the year prior.

[Related Article: Will 2013 Be the Year You Can Finally Get a Mortgage?]

Kolko also noted that all these improvements bode well for property values nationwide headed into 2013, the report said. He added that because prices particularly accelerated in the third and fourth quarters of the year after a slow start, it’s reasonable to assume that rising prices will encourage more new constructions, and entice more existing homeowners to put their properties on the market once again.

However, some experts have also said that there may be some amount of slowdown in acceleration over the coming year, simply because the improvement in the last six months or so have been so impressive that they likely cannot be repeated.

More from Credit.com

This article originally appeared on Credit.com.

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S&P, Nasdaq dip as Apple weighs

NEW YORK (Reuters) - Wall Street slipped on Monday, weighed down by shares of Apple in the face of demand concerns, while investors faced a busy week for earnings in what is expected to be a lackluster quarter.

Apple lost 2.8 percent to $505.84 as the biggest drag on both the S&P 500 and Nasdaq 100 <.ndx> indexes after reports that the tech company has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand. The stock earlier hit a session low of $498.51, the first dip below $500 since February 16.

"There is this speculation building 'Is this the end of Apple?'" said Carol Pepper, chief executive of Pepper International in New York.

But Pepper said Apple also "doesn't have to grow at the rate it was to do extremely well. It's still going to be one of the marquee companies of the U.S. and the world."

Apple suppliers also lost ground, with Cirrus Logic off 6.8 percent to $29.43 and Qualcomm down 1.2 percent to $64.13. The S&P tech sector <.gspt> gave up 0.9 percent as the worst perfumer of the 10 major S&P sectors.

The pace of earnings season picks up this week with 38 S&P 500 companies set to report, including Goldman Sachs , Bank of America , Intel and General Electric .

Overall earnings are expected to grow by just 1.9 percent in this reporting period, according to Thomson Reuters data.

President Barack Obama is expected to hold a news conference, which will cover looming budget and debt ceiling due dates on Monday, White House officials said.

"We could have some more noise because they are trying to get people to focus on their issues, but I don't think they are going" to allow the government to default, said Pepper.

Separately, Federal Reserve Chairman Ben Bernanke will be speaking on monetary policy, recovery from the global financial crisis and long-term challenges facing the American economy at 4 p.m. (2100 GMT).

The Dow Jones industrial average <.dji> added 6.79 points, or 0.05 percent, to 13,495.22. The Standard & Poor's 500 Index <.spx> shed 3.37 points, or 0.23 percent, to 1,468.68. The Nasdaq Composite Index <.ixic> lost 14.16 points, or 0.45 percent, to 3,111.48.

Appliance and electronics retailer Hhgregg Inc slumped 9.6 percent to $7.13 after the electronics and appliance retailer cut its same-store sales forecast for the full year.

Transocean Ltd has disclosed that billionaire activist investor Carl Icahn has acquired a 1.56 percent stake in the offshore rig contractor and is looking to increase that holding. Its shares rose 2.5 percent to $55.43.

The Dow, which does not list Apple as one of its components, fared better than the other two indexes as Hewlett-Packard rose 3.8 percent to $16.78 after JPMorgan upgraded its rating on the stock and raised its price target to $21 from $15.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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Title games feature Ravens-Pats, 49ers-Falcons

One game is a rematch. The other might feel like one — at least to one of the teams.

For the second straight year in the AFC, the New England Patriots will host the Baltimore Ravens with a trip to the Super Bowl on the line.

In the NFC, it will be San Francisco traveling to Atlanta, with the Falcons defense trying to stop a versatile, running quarterback for the second straight week.

"Russell Wilson and Colin Kaepernick are mobile quarterbacks who throw the ball at extremely accurate levels," Falcons safety Thomas DeCoud said. "We can use this game as a cheat sheet to prepare for next week."

On Sunday, the Falcons barely got past Wilson and the Seattle Seahawks, who overcame a 20-point deficit to take a one-point lead, but gave it up after Matt Ryan drove Atlanta into field goal range and Matt Bryant made a 49-yard kick with 8 seconds left.

Atlanta is the only team not making a repeat appearance in the NFL's final four. Last year, it was the Giants playing, and beating, the 49ers for the NFC title.

On Saturday, Kaepernick passed for 263 yards and rushed for 181 — a playoff record for a quarterback — to defeat Green Bay 45-31.

"We're one step closer to where we want to be," said Kaepernick. San Francisco hasn't been to the Super Bowl since 1995, when Steve Young led the 49ers to their fifth Lombardi Trophy.

Though the Niners must travel cross country for the game, they opened as 3-point favorites in a meeting of teams that played twice a year until 2003, when Atlanta was moved from the NFC West to the NFC South. Their only previous playoff meeting was a 20-18 win for the Falcons in the 1998 divisional playoffs. Atlanta won at Minnesota the next week to make its only Super Bowl.

San Francisco's 20-17 overtime loss last year to the Giants was part of a tense day of football that began with New England's 23-20 victory over the Ravens in the AFC title game.

In that game, Billy Cundiff missed a 32-yard field goal that would have tied the game with 11 seconds left.

This season, Justin Tucker beat out Cundiff for the kicker's job. Tucker hit a 47-yarder against Denver on Saturday to lift the Ravens to a 38-35 win in double overtime, extending Ray Lewis' career for at least one more week and putting the 17-year veteran one win away from his second Super Bowl.

"We fought hard to get back to this point and we're definitely proud of being here," Ravens quarterback Joe Flacco said. "We feel like it's going to take a lot for somebody to come and kick us off that field come the AFC championship game."

Lewis and the Ravens will have to stop the NFL's most potent offense. The Patriots put up 457 yards in a 41-28 victory over Houston, which left them one win away from their sixth Super Bowl in the 2000s.

"I think the two best teams are in the final," Patriots quarterback Tom Brady said. "Baltimore certainly deserve to be here and so do we."

The Patriots were made early 9½-point favorites against the Ravens.

These teams met in the regular season and that game was also decided by a kick — Tucker's 27-yard field goal that sneaked through the right upright for a 31-30 victory. Or did it?

While the Ravens were celebrating, Pats coach Bill Belichick ran to midfield and grabbed a replacement official's arm as he tried to exit the field. The NFL fined Belichick $50,000 for the gesture.

New England is the even-money favorite in Vegas to win the Super Bowl. San Francisco is next at 2-1, followed by Atlanta (5-1) and Baltimore (8-1).

Among the possible Super Bowl story lines:

—The Harbaugh Bowl. Jim Harbaugh coaches the 49ers and John Harbaugh coaches the Ravens.

—A rematch of San Francisco's 41-34 win at New England on Dec. 16 — one of the most entertaining games of the regular season.

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Is China easing up on local media?

A protester calls for greater media freedom outside the headquarters of Nanfang Media Group in Guangzhou on Jan. 9.

STORY HIGHLIGHTS

• Young: Handling of Southern Weekly row demonstrated tolerant side of new leadership


• Traditional, newer media can serve as tools for achieving goals in China's modernization


• The fight against corruption in China is at the top of the list for incoming leader, Xi Jinping


• Young: Media has also emerged as an important tool for combating other social problems

Editor's note: Doug Young teaches financial journalism at Fudan University in Shanghai and is the author of The Party Line: How the Media Dictates Public Opinion in Modern China published by John Wiley & Sons. He also writes daily on his blog, Young's China Business Blog, commenting on the latest developments in China's fast-moving corporate scene.

Shanghai, China (CNN) -- China's traditional iron-handed approach to the media has taken a surprise turn of tolerance with Beijing's soft handling of a recent dispute with local reporters, in what could well become a more open attitude toward the media under the incoming administration of presumed new President Xi Jinping.

The new openness is being driven in large part by pragmatism, as the government realizes that both traditional and newer media can serve as powerful tools for achieving many of its goals in the country's modernization.

The recent conflict between reporters at the progressive Southern Weekly and local propaganda officials over a censorship incident left many guessing how the government would respond to the first clash of its kind in China for more than 20 years. The result was a surprisingly mild approach, including mediation by a high-level government official and a vague promise for less censorship in the future.

Read: Censorship protest a test for China

The unusually tolerant tack could well reflect a new attitude by Xi and other incoming leaders set to take control of China for the next decade, all of whom have come to realize the media can serve many important functions beyond its traditional role as a propaganda machine.

At the top of Xi's list is the fight against corruption, a problem he has mentioned frequently since taking the helm of the Communist Party last year. The party has tried to tackle the problem for years using its own internal investigations, but progress was slow until recently due to protection many officials received through their own sprawling networks of internal relationships, known locally as guanxi.

Read: Corruption as China's top priority

All that began to change in the last two years with the rapid rise of social media, most notably the Twitter-like microblogs known as Weibo that are now a pervasive part of the Chinese Internet landscape and count hundreds of millions of ordinary Chinese among their users. Those social media have become an important weapon for exposing corruption, allowing thousands of ordinary citizens to pool their resources and build cases against officials they suspect of using their influence for personal gain.

This increasingly sophisticated machine was on prominent display last year in a case involving Yang Dacai, a local official in northwestern Shaanxi province who infuriated the online community by smiling at the site of a horrific accident scene. Netizens quickly turned their outrage into an online investigation, and uncovered photos of him wearing several luxury watches he could hardly afford on his government salary. As a result, the government ultimately opened an investigation into the matter and Yang was sacked from his posts.

In addition to its role in battling corruption, the media has also emerged as an important tool for combating and addressing many of the other social problems that China is facing in its rapid modernization. Barely a week goes by without a report on the latest national food safety scandal or case of illegal pollution in both traditional and social media, with such reports often followed by government investigations.

Beijing leaders have also discovered that the media can also be an important vehicle for improving communication between the government and general public -- something that was a low priority in previous eras when officials only cared about pleasing their higher-up party bosses.

Following a Beijing directive in late 2011, most local government agencies and other organizations have all established microblog accounts, which they use to keep the public informed about their latest activities and seek feedback on upcoming plans. Such input has become a valuable way to temper traditional public mistrust toward the government, which historically didn't make much effort to include the public in any of its internal discussions.

Lastly, the government has also discovered that media, especially social media, can be an effective tool in gauging public opinion on everything from broader national topics like inflation down to very local issues like land redevelopment. Such feedback was difficult to get in the past due to interference by local officials, who tried to filter out or downplay anything with negative overtones and play things up to their own advantage. As a result, central government officials often received incomplete pictures of what was happening in their own country.

With all of these valuable roles to play, the media has become an increasingly important part of Beijing's strategy in executing many of its top priorities.

The government also realizes that a certain degree of openness is critical to letting the media perform many of those roles, which may explain its relatively tolerant approach in the recent Southern Weekly conflict. Such tolerance is likely to continue under Xi's administration, helping to shift more power towards a field of increasingly emboldened reporters at both traditional and new media and away from their traditional propaganda masters.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Doug Young.

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Justin Timberlake releases ‘Suit & Tie,’ first single in 5 years

LOS ANGELES (Reuters) – Pop star Justin Timberlake unveiled on Sunday his first single in more than five years, “Suit & Tie,” featuring rapper Jay Z and producer Timbaland and said a new album would be released later in 2013.

Timberlake, 31 and newly married to actress Jessica Biel, had teased his fans last week with a cryptic tweet saying “I think I am ready” and linking to a video showing him walk into a studio.

Timberlake, a six-time Grammy winner and former member of boy band N’Sync, took a break from music after his 2006 album “Futuresex/Lovesounds” and worked as an actor in movies such as “The Social Network.”

He said in an open letter on his website that the new album is titled “The 20/20 Experience” but gave no further details.

(Reporting by Piya Sinha-Roy; Editing by Jon Boyle)

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Is WTO about to abandon dream of global free trade?

GENEVA (Reuters) – As it seeks a new chief to lead it out of a negotiating death-spiral, the World Trade Organization looks doomed to be fatally undermined by new global carve-ups that will leave many of the world’s poorest sidelined.

At its creation 18 years ago, as the “third pillar” of the post-World War Two economic system alongside the World Bank and the International Monetary Fund, tariffs fell by a third and world markets, from farm produce to finance, were opened up.

A boom in commerce ensued, gathering pace when China became a member in 2001. But then, at a meeting in Doha that year, the WTO launched an ambitious attempt to push for further liberalization that would help developing countries most of all.

The talks dragged on for 10 years, failing to resolve a split between the developed and developing worlds, mostly over agriculture. WTO Director-General Pascal Lamy, who vowed in 2005 to make them his “first, second and third priority”, finally declared an “impasse” in 2011.

The WTO’s first head, Peter Sutherland, wrote in an op-ed published on December 31 that it was “a unique failure in the history of multilateral trade negotiations“.

The stalemate triggered a scramble to arrange preferential trade terms outside the WTO – regional deals such as the U.S.-led Trans-Pacific Partnership and bilateral agreements such as the one the European Union is pursuing with the United States.

“If either ever comes to pass, which I doubt, a huge share of world trade would be conducted within a discriminatory framework,” wrote Sutherland.

Such deals were already common before the “impasse”, but afterwards they became the main focus for many countries seeking a route back to economic growth. British Prime Minister David Cameron has made an EU-U.S. deal one of three priorities for the UK’s presidency of the G8 group of nations, which began this month.

“The big question is this: does the WTO retain its centrality in the trading system? It’s down to the next WTO head,” said Simon Evenett, professor of international trade at St Gallen University in Switzerland.

Jagdish Bhagwati, professor of economics at Columbia University in New York, compared the WTO system to a three-legged stool, resting on negotiations, rule-making and dispute settlement. With one leg broken, the others start to wobble.

“You can’t do away with bilaterals and regionals, but as long as the first leg is not broken, the second and third won’t be,” he said. “The director-general has to come in and say that these things are here to stay, but how do I reconcile all this with the purposes of the WTO system which I am guardian of?”

NOT OUR FINEST HOUR

Nine candidates vying to succeed Lamy will make their pitch to the WTO’s membership at the end of this month. Many in the audience have spent a decade toiling over Doha, so none of the hopefuls is likely to trash it or claim to have an easy fix.

Instead, Evenett said, they will distance themselves obliquely, with lines like: “It was not our finest hour” or “There’s still some way to go”, while suggesting they could be part of a creative process to try and figure out how to move on.

“This is not business as usual,” said Richard Baldwin, professor of international economics at the Graduate Institute of Geneva.

“By analogy, the WTO needs a Bernanke or Draghi – a policy leader who can think out of the box and understand how the world has changed and how the policy must change with it – not a Greenspan or Trichet, who were simply implementing the old rules in a faithful, dogmatic style,” he added.

But the chances of a revolution are slim.

“The way I see it now,” said Baldwin, “the U.S. and China are happy to let the WTO languish – China has nothing to complain about that could be fixed by any conceivable version of Doha, and the U.S. sees no substantial gains from finishing Doha on the current terms.”

Both he and Evenett said there was a chance that the WTO would pick a “placeholder” director-general.

“If they want a quiet time, you might not want a particularly ambitious WTO head. Someone who just treads water might be acceptable,” said Evenett.

That would allow the surge of regional deals to continue unchecked. They would entrench and lubricate corporate supply chains, a bonus to big business, but would do nothing to assuage developing countries wanting a fairer deal on agriculture or better access to rich markets for their exports and services.

Bhagwati said the TPP was untransparent and influenced by lobbyists, ensuring that it was full of side conditions, such as stipulations on labor and intellectual property, which made it impossible for developing countries to sign up to.

“The lobbyists have to be sidelined,” he said.

If the TPP and the “mega-bilaterals” succeed, Baldwin said, global trade will be back to the pre-WTO days, dominated by the “Quad” – the United States, EU, Canada and Japan, with negotiations run by and mostly for the Quad members.

“This will threaten China, India and Brazil (and others) with exclusion, and at that point, we’ll see the current stalemate destroyed. There will be room for discussions to bring the TPP-like disciplines to the multilateral level.”

But the WTO cannot wait for the regional deals to develop to the point they can be harmonized into one whole. Even if that eventually happened – and Baldwin thinks it will require a new body, a WTO 2.0 – Sutherland believes that regional deals are already doing lasting damage to the credibility of the WTO.

“Now we are really in danger,” said Bhagwati. “Let’s hope it works out because this is our last chance to save the WTO.”

(Reporting by Tom Miles; Editing by Will Waterman)

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Vatican denies flaws that led to credit card block

By Philip Pullella

VATICAN CITY (Reuters) – The Vatican insisted on Sunday that it had taken adequate measures to combat money laundering and so could not understand why the Bank of Italy had blocked the use of credit and debit cards inside Vatican City.

The central bank stopped Deutsche Bank Italy from providing electronic payment services for the Vatican on January 1 because the Holy See was seen as lacking anti-money-laundering controls and oversight, a move that left thousands of tourists visiting the Vatican museums and gift shops in the lurch, forcing them to use cash.

“I am truly surprised,” Rene Bruelhart, the head of the Vatican’s Financial Information Authority (FIA), told the Corriere della Sera newspaper in an interview Vatican Radio posted on its website.

Bruelhart, 40, said the Holy See had implemented EU-required controls and did not understand the action.

“The reality is that, considering the particular nature of the Vatican City State, adequate measures have been adopted for vigilance, prevention, and fighting money laundering and financing terrorism,” he said.

The Bank of Italy said Deutsche Bank (DBK.DE) had installed machines for payment with credit and debit cards in the Vatican – a tiny city-state surrounded by Rome – without Italian permission after an agreement with another bank expired.

The sale of postage stamps, memorabilia and admission tickets to the Vatican Museums, home to art treasures including Michelangelo’s Sistine Chapel frescoes, are a significant source of income for the Holy See, along with donations and investments.

In 2011, 5 million museum visitors brought in 91.3 million euros ($ 122 million), according to the city state’s annual financial report, in which it posted its worst budget deficit in more than a decade.

MIXED GRADES

Bruelhart, a Swiss national from Fribourg, was for eight years the director of Liechtenstein’s Financial Intelligence Unit (FIU), the department that gathers and analyses information used by police to combat money laundering, organized crime and the financing of terrorism.

He began working for the Vatican in September, two months after the publication of a landmark report by Moneyval, a department of the Council of Europe, on the Vatican’s efforts at financial transparency.

Moneyval gave the Vatican an overall pass grade on transparency-related criteria but fail grades in seven key areas.

The report identified serious failings in the Vatican’s bank, officially known as the Institute for Works of Religion (IOR), which has been enmeshed in several scandals over the years.

“Moneyval affirmed that the Holy See has a system of preventing and fighting money laundering and the financing of terrorism, equivalent to and recognized at the international level,” said Bruelhart.

But a Bank of Italy statement said that while Moneyval recognized that the Vatican had made progress in financial transparency, “the presence of an effective anti-money-laundering regime had still not been proved”.

The Moneyval report was particularly pointed in its criticism of the management of the IOR and strongly recommended that it be independently supervised and that “fit and proper criteria” should be applied to senior management at the IOR.

The IOR is being investigated by Italian magistrates looking into money laundering. The bank has denied all wrongdoing.

The Vatican has struggled to shake off a reputation for opaque finances that dates back to 1982, when Roberto Calvi, an Italian known as “God’s banker” because of his links to the Vatican, was found hanged under London’s Blackfriars Bridge.

The IOR was entangled in the collapse of Calvi’s Banco Ambrosiano, with its lurid allegations about money-laundering, freemasons, and mafia links.

The IOR then held a stake in the Ambrosiano, at the time Italy’s largest private bank, and investigators alleged that it was partly responsible for the bank’s fraudulent bankruptcy.

($ 1 = 0.7493 euros)

(Reporting by Philip Pullella; Editing by Will Waterman)

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Wall Street Week Ahead: Attention turns to financial earnings

NEW YORK (Reuters) - After over a month of watching Capitol Hill and Pennsylvania Avenue, Wall Street can get back to what it knows best: Wall Street.

The first full week of earnings season is dominated by the financial sector - big investment banks and commercial banks - just as retail investors, free from the "fiscal cliff" worries, have started to get back into the markets.

Equities have risen in the new year, rallying after the initial resolution of the fiscal cliff in Washington on January 2. The S&P 500 on Friday closed its second straight week of gains, leaving it just fractionally off a five-year closing high hit on Thursday.

An array of financial companies - including Goldman Sachs and JPMorgan Chase - will report on Wednesday. Bank of America and Citigroup will join on Thursday.

"The banks have a read on the economy, on the health of consumers, on the health of demand," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

"What we're looking for is demand. Demand from small business owners, from consumers."

EARNINGS AND ECONOMIC EXPECTATIONS

Investors were greeted with a slightly better-than-anticipated first week of earnings, but expectations were low and just a few companies reported results.

Fourth quarter earnings and revenues for S&P 500 companies are both expected to have grown by 1.9 percent in the past quarter, according to Thomson Reuters I/B/E/S.

Few large corporations have reported, with Wells Fargo the first bank out of the gate on Friday, posting a record profit. The bank, however, made fewer mortgage loans than in the third quarter and its shares were down 0.8 percent for the day.

The KBW bank index <.bkx>, a gauge of U.S. bank stocks, is up about 30 percent from a low hit in June, rising in six of the last eight months, including January.

Investors will continue to watch earnings on Friday, as General Electric will round out the week after Intel's report on Thursday.

HOUSING, INDUSTRIAL DATA ON TAP

Next week will also feature the release of a wide range of economic data.

Tuesday will see the release of retail sales numbers and the Empire State manufacturing index, followed by CPI data on Wednesday.

Investors and analysts will also focus on the housing starts numbers and the Philadelphia Federal Reserve factory activity index on Thursday. The Thomson Reuters/University of Michigan consumer sentiment numbers are due on Friday.

Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said he expected to see housing numbers continue to climb.

"They won't be that surprising if they're good, they'll be rather eye-catching if they're not good," he said. "The underlying drive of the markets, I think, is economic data. That's been the catalyst."

POLITICAL ANXIETY

Worries about the protracted fiscal cliff negotiations drove the markets in the weeks before the ultimate January 2 resolution, but fear of the debt ceiling fight has yet to command investors' attention to the same extent.

The agreement was likely part of the reason for a rebound in flows to stocks. U.S.-based stock mutual funds gained $7.53 billion after the cliff resolution in the week ending January 9, the most in a week since May 2001, according to Thomson Reuters' Lipper.

Markets are unlikely to move on debt ceiling news unless prominent lawmakers signal that they are taking a surprising position in the debate.

The deal in Washington to avert the cliff set up another debt battle, which will play out in coming months alongside spending debates. But this alarm has been sounded before.

"The market will turn the corner on it when the debate heats up," Prudential Financial's Krosby said.

The CBOE Volatility index <.vix> a gauge of traders' anxiety, is off more than 25 percent so far this month and it recently hit its lowest since June 2007, before the recession began.

"The market doesn't react to the same news twice. It will have to be more brutal than the fiscal cliff," Krosby said. "The market has been conditioned that, at the end, they come up with an agreement."

(Reporting by Gabriel Debenedetti; editing by Rodrigo Campos)

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Ravens shock Broncos; 49ers rout Packers

The 49ers and Ravens are getting another shot at making the Super Bowl.

Losers in tight conference championship games a year ago, they are returning to the final step before the big game in the Big Easy after wins Saturday.

Baltimore took the long, frigid route, rallying at Denver for a 38-35 victory in an AFC divisional playoff. The Ravens will go to either New England, where they lost 23-20 in the conference championship match last January, or Houston. The Patriots and Texans face off Sunday in Foxborough, Mass.

San Francisco took the NFC game at night 45-31 over Green Bay behind the running and passing of quarterback Colin Kaepernick. That gave both coaching Harbaughs victories Saturday: Jim with the 49ers, John with the Ravens.

San Francisco fell in overtime to the New York Giants for the NFC title last year. The Niners will either visit Atlanta or host Seattle in next weekend's championship matchup.

The wild-card Seahawks are at the Falcons in Sunday's early game.

Second-year QB Kaepernick made Jim Harbaugh's decision to stick with him over incumbent Alex Smith during the season look brilliant. He set a playoff mark for the position by rushing for 183 yards, including a 56-yard TD, and threw for 263 yards. Kaepernick hit Michael Crabtree for two scores and Frank Gore rushed for 119 yards.

The AFC West champion Niners (12-4-1) gained 579 yards.

"It feels like we're in the same place," Crabtree said. "Winning that game last year, we're in the same place. It's just what we do the next game. It's all about the next game."

The NFC North-winning Packers (12-6) beat Minnesota in the wild-card round last weekend, but their defense was overmatched at San Francisco.

Aaron Rodgers finished 26 for 39 for 257 with two TDs and an interception.

Ravens 38, Broncos 35, 2 OT

Rookie Justin Tucker's 47-yard field goal 1:42 into the second overtime of the longest playoff game in 26 years advanced the Ravens and kept star linebacker Ray Lewis' career going at least another week.

Earlier this season, the AFC North champ Ravens (12-6) beat the Patriots 31-30 in Baltimore. They lost 43-13 at Houston.

Joe Flacco's 70-yard heave to Jacoby Jones with 31 seconds remaining forced the overtime. Flacco is the only quarterback to win playoff games in each of his first five seasons, and he heads to his third AFC championship match. He also lost to Pittsburgh in the 2008 title game.

"We fought hard to get back to this point and we're definitely proud of being here." Flacco said. "We feel like it's going to take a lot for somebody to come and kick us off that field come the AFC championship game."

Lewis announced before they beat Indianapolis in the wild-card round that this was the last of his 17 pro seasons. It's still going.

"When you look back at it and let the emotions calm down, it will probably be one of the greatest victories in Ravens history," Lewis said. "It's partly because of the way everything was stacked against us coming in."

Peyton Manning lost in his first postseason appearance with the AFC West-winning Broncos (13-4), who had won their last 11 games to earn home-field advantage in the playoffs. They wasted it by giving up long plays, negating a record-setting performance by kick returner Trindon Holliday.

Holliday ran back the second-half kickoff 104 yards for a TD. He went 90 yards with a first-quarter punt return to become the first player to score on one of each in a playoff game.

"He's one of the greatest quarterbacks of all time and for us to come in here and confuse him the way we did, and make the plays we did?" Lewis said. "We gave up two big special teams touchdowns, but the bottom line is, but we kept fighting."

Seahawks (12-5) at Falcons (13-3)

Oddly, there might be more doubts floating around the home team with the spiffy record than the visitors.

While Seattle has won six in a row, erased its reputation as a road flop with three straight away victories — including last week at Washington — and has the league's stingiest defense.

It's NFC South champ Atlanta, 0-3 in the postseason under coach Mike Smith and with Matt Ryan at quarterback, that probably faces more pressure.

"We've been disappointed a few times," said center Todd McClure, a Falcon for 13 years. "I think we've got guys in this locker room who are hungry and ready to get over that hump."

One of them is Tony Gonzalez, the career leader in nearly all receiving categories among tight ends. In 16 pro seasons, Gonzalez never has won a playoff game. And he's said this very likely is his final year in the NFL.

"I'm not going to lie to you," he said. "I really, really, really want to win this game."

To get it, Gonzalez, Ryan and star receivers Julio Jones and Roddy White must contend with the league's most physical defense, a unit that completely shut down the Redskins for three quarters in the 24-14 wild-card win.

"I expect our guys to try to play like they always play," Seattle coach Pete Carroll said. "They don't need to change anything because we're not doing anything different, we're going to try and hang with them, and we'll find out what happens."

Texans (13-4) at Patriots (12-4)

Houston's reward for its wild-card win over Cincinnati is a return to trip to Foxborough, where the Texans' late-season spiral began. Houston was in position for home-field advantage in the AFC before being routed 42-14 by the Patriots, then losing twice more in the final three games.

This is only the fourth postseason game in the Texans' 11-season NFL history. The Patriots began winning Super Bowls with Tom Brady before the Texans were born.

AFC South champion Houston must bring the fierce pass rush it often has shown with end J.J. Watt, who led the NFL with 20 1-2 sacks.

"Biggest goal of them all, Super Bowl, and this is a big step for us," Watt said, "and we're really excited about the challenge."

That challenge comes against the NFL's most prolific offense. The Texans and Patriots allowed the same number of points, 331, but AFC East winner New England led the NFL in scoring with 557 points, 34.8 per game.

Brady would surpass Joe Montana for most postseason victories by a quarterback by beating Houston. Brady is 16-6, although he began 10-0.

He isn't looking for a repeat of the Dec. 10 romp.

"Giving us an opportunity to have this game at home, I think that's the important thing about last game," Brady said. "Other than that, this is going to be a whole different game full of our own execution, our ability to try to beat a very good football team that's played well all year."

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