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He predicted the tech-stock collapse. He foresaw the housing bust.

So naturally, everyone wants to know what Robert Shiller thinks of today’s stock prices, now perched at a four-year high. Or about the direction of home prices.

Keep your hopes in check. Shiller is disinclined these days to offer specific predictions about the direction of stocks, home prices or any other asset whose prices can surge or plunge before we can fully grasp what’s going on.

In his 2000 book “Irrational Exuberance,” Shiller warned of a stock-market bubble. Five years later, Shiller detected a bubble in home prices and argued that it posed a grave threat.

Shiller, a Yale economist, is co-creator of the widely followed Standard & Poor’s/Case-Shiller home price index. He has been widely ranked among the most influential economists in the world.

Despite his accurate past warnings, Shiller, 65, is generally skeptical of his profession’s ability to foresee shifts in the economy. Much of his recent work focuses on behavioral economics _ how psychology drives financial decision-making.

He believes home or stock prices flow from the confidence of consumers or investors. Confidence, in turn, reflects the story lines people invent to frame their memories of events _ from stock crashes to housing booms. Ultimately, he says, our financial decisions reflect our emotions and memories more than the state of the economy.

Shiller thinks home prices nationally could fall further. But he isn’t certain.

He doesn’t think the rising stock market has formed a bubble. Shiller doesn’t detect the kind of investor overconfidence that he associates with dangerously high stock prices.

In an interview with The Associated Press, Shiller spoke about the housing market, the stock market, the economy and human behavior. Excerpts appear below, edited for length and clarity.

Q: A lot of housing market experts think home prices have bottomed. You’ve been more bearish.

A. It’s not so much that I’m forecasting falling home prices as that I question whether anyone is able to forecast them right now. They won’t fall forever, but they can fall for a long time. I don’t know where home prices will be in 10 or 20 years.

Q: If prices do fall further, does it follow that many homeowners will feel less wealthy, and they’ll reduce spending and that will slow the economy?

A. Yes, we find that the “wealth effect” is stronger for housing than it is for the stock market. Many stocks are held in retirement portfolios, so people are not as likely to respond to a decline in value there as they would if it were something more immediate. In recent years, the home-equity loan has become very important as a way of sustaining consumption. Now that home prices have fallen, those loans are not so available. It seems pretty obvious that it’s going to affect consumption.

Q: What trends would you need to see for a strengthening of prices and then a sustained rise in home prices?

A: One thing that has been encouraging: The National Association of Home Builders’ housing market index has been shooting up. Builders are seeing signs of increasing demand. But it remains at a low level. So it’s ambiguous evidence. But that might be taken as a sign that the market is improving.

Q: If you were a national housing czar with unilateral authority to do whatever you deemed necessary to help the markets and restore faith, what steps would you take?

A: This crisis was caused substantially by a failure to manage real estate risk properly. And so we should be thinking like financiers about that risk, and how it should be managed. The mortgage institution we have is traditional. There’s no reason why we shouldn’t rethink it completely. The Dodd-Frank Act called for a study of shared appreciation mortgages. Those are mortgages where the risk of loss and gain on the house is shared with the lender. So if home prices go down, it’s not all on the shoulders of the homeowners.

Q: Do you see more rentals and apartments over the next decade? Do you think single-family homeownership will continue on maybe a slow but steady decline?

A: After the Great Stock Market Crash of 1929, people soured on stocks as investments. And I could see that happening with housing. The assumptions people have been making that buying a house is the American dream and that that’s what you have to do _ that kind of assumption is not ringing so true anymore.

Q: Will the foreclosure settlement for about $25 billion between states and the five biggest mortgage lenders strengthen the housing market?

A: The problem is that the decline in the housing market dwarfs this agreement. The total decline of the housing market has been in the trillions, and negative equity in housing, by one estimate, was about $700 billion. So this is too small to be very effective. It all helps, I suppose, but it’s not big.

Q: Do you think there’s a bubble forming in the U.S. stock market or in any other asset?

A: It doesn’t seem to me that we’re in a bubble situation as we were, say, in the 1990s. In the 1990s, there was just a general mood that we’re entering a new millennium, with Internet technology and advanced technology and America soaring. It was a bubble all over the world, really. I don’t know that we’re in that state of confidence now.

Q: Do you think any asset bubbles are forming in China?

A: China had what looks like a bubble, but the government has taken steps against it. This is another reason not to expect bubbles so much. The stock market bubble of the 1990s and the housing bubble of the 2000s were still at a time when central bankers and government authorities believed much more in free-market efficiency than they do now. The authorities are now thinking that it’s their responsibility to choke off bubbles.

Q: If you had to put all your money for the next decade in either stocks or super-safe, inflation-protected securities from the U.S. Treasury (TIPS), what would you do?

A: Stocks. They’re highly priced, and they’re risky, but they’ve had a good historic record. And last time I looked, inflation index bonds have a negative real yield.

Q: Is there any recent good book on consumer psychology or a non-econ subject that you’ve read?

A: Well, I like Danny Kahneman’s new book, “Thinking, Fast and Slow.” This reflects a psychological literature that the human mind is designed to build memories around narratives, especially human interest stories. Our mind stores memories as sequences of events with an ending. The story of the Great Depression is a story that’s in our memories. Another story is the patriotic one of the greatness of our country that may resonate more at some times than at others. And when it does resonate, it encourages people to be spending and investing in an optimistic way.

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Europe’s leaders are traveling to Brussels hoping to chart the continent’s way back to growth.

The two-day summit of EU leaders is for once taking place amid relative calm in financial markets, after the European Central Bank’s latest massive injection of cash into fragile banks.

Investors have also been relieved that Greece looks likely to avoid imminent bankruptcy.

Finance ministers from the eurozone are also in the Belgian capital on Thursday to check on Athens’ progress on reforms and cuts it has to implement before receiving a euro130 billion ($173 billion) bailout.

Heads of state and government, meanwhile, will scrutinize each others efforts to boost growth and limit deficits amid a shrinking economy and high unemployment.

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Nobel-prize winning economist Paul Krugman said Greece is

Shell Lubricants has informed employees it will close its Wood River Blending Plant in Roxana and its St. Louis regional distribution center in O’Fallon, Mo.

Ninety-six people work at the two facilities.

A Shell spokesperson said the blending plant needed extensive upgrades. She said Shell does not own the plant and the company decided not to renew the current lease when it expires. With closure of the blending plant, the distribution center will no longer be optimally located for its functions, she said.

The blending plant employs 83 people and the distribution center employs 13. They produce and distribute bulk and packaged lubricants, including motor oil.

Shell built the huge Wood River Refinery in 1917 and owned and operated it for many years. The distribution center had operated since 2000. The two Shell Lubricants locations are the only Shell-operated businesses remaining in the St. Louis area. The blending plant is leased from ConocoPhillips, which now operates the refinery.

The blending plant is scheduled to close at the end of 2013. The distribution center will close at the end of this year.

Affected employees will be considered for other positions within the company or offered competitive severance packages, the company said in a written statement.

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After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece euro130 billion ($170 billion) in additional bailout loans to save it from a potentially disastrous default next month.

The deal is expected to bring Greece’s debt down to 120.5 percent of gross domestic product by 2020 _ that’s around the maximum that the International Monetary Fund and the eurozone consider sustainable.

The euro surged as the news of a deal broke early Tuesday. The accord should take some pressure off the 17-country currency union that has been battling a serious debt crisis for two years.

Without the deal, Greece was facing a potentially calamitous default next month and possibly being forced from the eurozone. The talks stretched into the early hours of Tuesday as ministers wrangled over how to cut Greece’s debt to a level that it could eventually pay back while not raising their own commitments.

In the end, the country’s private creditors were asked to take substantially more losses on their holdings than previously anticipated, cutting Greece’s debt by an estimated euro107 billion.

“It’s no exaggeration to say that today is a historic day for the Greek economy,” said Greek Premier Lucas Papademos, who rushed to the meeting to lend weight to his country’s pleas for help.

Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said Greece’s private investors _ mostly banks and investment funds _ have been asked to take a face value loss of 53.5 percent on their bonds.

On top of that, Greece’s public creditors _ central banks and the eurozone countries _ also agreed to give Greece a break on its debt.

The eurozone countries will cut the interest that Greece has to pay for its first package of bailout loans to 1.5 percentage points over market rates from between 2 percentage points to 3 percentage points currently, cutting both its debt load and limiting the need for new rescue loans.

At the same time, the European Central Bank and the national central banks in the 17 countries that use the euro will also forego profits on their Greek debt holdings, again reducing the costs for Greece.

EU economic affairs commissioner Olli Rehn says Greece’s new compliance with the terms of a new bailout will be ensured by a separate account containing enough money service its debt for three months.

That close monitoring was demanded by some members of the eurozone who are frustrated that Greece has not always enacted painful reforms and budget cuts on time.

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The Obama administration’s corporate tax reform plan will end “dozens and dozens” of tax breaks, U.S. Treasury Secretary Timothy Geithner said on Tuesday as he defended the White House’s election-year call for higher taxes on the wealthy.

Within days, the administration is set to unveil a blueprint for revamping the corporate tax system aimed at leveling the playing field for all companies, which pay wildly differing levels of taxes, while lowering the top corporate tax rate.

Companies are clamoring for a cut in the top 35 percent corporate tax rate but disagree about how to how eliminate special tax preferences that benefit selected industries.

Geithner spoke before the Senate Finance Committee a day after President Barack Obama unveiled a $3.8 trillion budget-and-tax proposal that called for aggressive government spending to boost the economy and higher taxes on the rich.

“We think they can handle it. We think they can afford it,” Geithner said.

The budget proposal is seen as a campaign document, with few elements expected to win approval this year in a divided U.S. Congress as elections approach in November.

Republicans criticized Obama’s budget, saying it chooses winners and losers and moves away from tax reform.

For example, Obama wants to end a manufacturing tax break for oil and gas companies, but expand it for high-tech companies. “Obviously not everyone is going to be playing by the same set of rules,” Republican Senator Jon Kyl of Arizona said.

Geithner said it was a “fair question.”

He said the Obama plan would “wipe out a very substantial, dozens and dozens of special tax preferences,” in the corporate code, but keep a “very limited” number targeting incentives for “creating and building stuff in the United States.”

Senators from both parties said Obama needs to use the bully pulpit to push major changes to the tax code.

The last time major rewrite of the U.S. tax code came in 1986 under the leadership of Republican President Ronald Reagan.

“The key in 1986 was of course the presidential bully pulpit and that the executive branch every single time out talked about how you had to fit the pieces together,” Democratic Senator Ron Wyden said.

Obama said earlier he was “hopeful” of a deal on extending a 2 percentage point cut in the payroll tax paid by workers, which will expire at the end of the month without a deal between sparring lawmakers.

FISCAL CLIFF

The payroll tax extension is the first among many deadlines approaching in coming months that could hamper the fragile economic recovery.

At the end of the year, individual tax cuts enacted under President George W. Bush are set to expire. In addition, $1.2 trillion in automatic budget cuts across all government programs are set to kick in as part of last summer’s deal to raise the debt ceiling.

“A perfect fiscal storm is waiting at the end of the year,” Senator Max Baucus, Democratic chairman of the Senate Finance Committee said.

Geithner agreed that the combination of the deficit reduction measures and higher taxes would hurt the economy.

But he said the administration is proposing to extend the bulk of the tax cuts so that only the wealthiest would be impacted. “The impact of that tax reform would be very, very modest,” he said.

Geithner rejected Republican suggestions that the administration should make drastic cuts to government spending even though the U.S. deficit has soared to $1.3 trillion and the federal debt has topped $15 trillion.

“That would damage economic growth,” Geithner said.

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Poor you. You slave over your taxes, hating every minute of it, but knowing you’ll get a nice reward at the end when you see how big your refund will be.

Then what happens? No refund. The Internal Revenue Service wants YOU to pay THEM. The nerve.

Worse: You don’t have the money.

There are lots of ways this could happen. Suppose you were laid off and collected unemployment insurance. That’s taxable, and Missouri doesn’t automatically deduct the taxes.

You might have raided your 401(k) plan to pay the rent. The withdrawals are taxable, and there’s a 10 percent penalty if you’re under 59 ½ years old.

“That’s really bad. Not only do you lose your job, but you owe taxes,” says Serita Eldridge, president of the Missouri Society of Enrolled Agents - people approved by the IRS to represent citizens in tax cases.

Or suppose you had some big wins at the slots. Uncle Sam wants his cut.

People who start small businesses sometimes misunderstand the law and get nailed come April. Workers cobbling together a living out of several part-time jobs sometimes discover that too little money was withheld for taxes.

No matter why, you may have to stiff the IRS come April.

So, let’s look at ways to fend off the tax man until you can pay up. We’ll also review ways to beg for mercy if you owe so much that you can’t possibly pay ever. (Good luck with that.)

First, file your tax return even if you can’t pay. The penalty for not filing is much bigger than that for not paying. If you don’t file, the IRS will fine you 5 percent per month, compounded monthly, plus interest at 6 percent per year, also compounded monthly on your unpaid taxes.

If you file but don’t pay, the IRS will want a one-time penalty of 5 percent, plus six percent annual interest compounded monthly.

So, send in whatever money you can spare to keep the cost down.

You can set up an installment plan by filling out an IRS form. Suggest a payment you can afford - defaulting on the IRS is a bad idea.

If you can pay it all off within 120 days, the plan is free. Need longer and you’ll pay a $52 set-up fee if you let the government tap your bank account for the payments, or $105 if you don’t. There’s a lower fee for low-income people.

The IRS does have a heart, albeit a small and stony one. If you’ve been knocked flat by life, you can file for an “Extension of Time for Payment of Tax Due to Undue Hardship.” You’ll have to list your assets and expenses, and explain the personal disaster that befell you. Death often counts. Serious illness might.

If you appear pitiful enough, the IRS may waive penalties, although interest will still run.

If you are extremely and hopelessly pitiful, you can make an “Offer in Compromise.” You offer to pay part of what you owe, if the IRS forgives the rest.

Forgiveness is limited among tax collectors. The IRS rejects three out of four compromise applications.

The program works best for people in dire straits - those too sick to work or needing expensive medical care. The IRS calculates how much it can squeeze out of you over the next few years if you sell what you own and subsist on a spartan budget dictated by the government. If you offer that amount, the IRS may take it.

The IRS doesn’t give a hoot about your other debts. It costs $150 to apply, and the taxpayer must make a partial tax payment with the application.

“If you have to owe money, the IRS is not the person you want to owe money too,” says Mark Luscombe, tax analyst at CCH Inc., the tax analysis and software company.

If your IRS debt is three years old, you might be able to dump it by going bankrupt, says Luscombe.

There’s no reason for panic if you can’t pay on time. “The IRS doesn’t come after you with full force,” says Eldridge. “They’ll tell you exactly what they’re going to do before they do it.”

Above all, the IRS doesn’t like to be ignored. Answer their letters promptly. If you’re attempting to pay, they are much less likely to get nasty and file liens and garnishments.

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Japanese Finance Minister Jun Azumi said his nation

The owner of the Pizza Hut, Taco Bell and KFC chains says its fourth-quarter profit rose 30 percent, thanks to its fast-growing overseas operations and to a strong showing from Pizza Hut in the U.S.

Yum Brands Inc. said Monday that Taco Bell had another sluggish quarter in the U.S. The Mexican-style chain is struggling to regain momentum after publicity from a now-dropped lawsuit that questioned the beef content of its taco and burrito filling.

Yum, based in Louisville, Kentucky, earned $356 million, or 75 cents per share, for the quarter easy payday loans. That’s compared to $274 million, or 56 cents per share, a year earlier. Revenue rose 15 percent to $4.1 billion.

Analysts expected profit of 74 cents per share on revenue of $4.04 billion.

The shares rose after hours.

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Treasury five-year note yields fell to the lowest level ever after Federal Reserve officials unexpectedly said their benchmark interest rate will stay low until at least late 2014.

Yields on the securities set three consecutive records after Fed Chairman Ben S. Bernanke said Jan. 25 that the central bank is considering additional asset purchases to boost growth. U.S. government debt rose for a third day yesterday as a report showed the U.S. economy grew at a slower-than-forecast 2.8% annual pace in the fourth quarter. The Labor Department is expected to report on Feb. 3 that unemployment remained at 8.5 percent this month.