I Report U Decide Not "We Report You Decide"

Obama Approval Above 50% in 10 States and D.C. in 2011

2012-02-06T12:50:00.000-08:00

January 31, 2012

Obama Approval Above 50% in 10 States and D.C. in 2011

District of Columbia, Hawaii most approving; Utah, Idaho, least

by Jeffrey M. Jones

PRINCETON, NJ -- In 10 states plus the District of Columbia, a majority of residents approved of the job Barack Obama was doing as president last year, according to aggregated data from 2011. His greatest support came from District of Columbia, Maryland, and Hawaii residents, while Utah and Idaho residents gave him his lowest levels of support -- below 30%.

SOURCE: http://www.gallup.com/poll/152372/Obama-Approval-Above-States-2011.aspx

Mississippi Most Conservative State, D.C. Most Liberal

2012-02-06T12:43:00.000-08:00

February 3, 2012

Mississippi Most Conservative State, D.C. Most Liberal

State patterns in ideology largely stable compared with previous years

by Frank Newport

PRINCETON, NJ -- Mississippi remains the most conservative state in the union, and, along with Utah, Wyoming, and Alabama, is one of four states with 50% or more of its population identifying as conservative. At the other end of the ideological spectrum, 40% District of Columbia residents and 30% of Massachusetts residents identify as liberal; all other states have a liberal population of 26% or less.

SOURCE: http://www.gallup.com/poll/152459/Mississippi-Conservative-State-Liberal.aspx

Arizona pension systems a soaring burden

2012-02-06T11:06:00.000-08:00

Arizona pension systems a soaring burden

Craig Harris The Arizona Republic

Even as local governments and the state are slashing budgets, Arizonans are propping up public-pension systems that allow civil servants to retire in their 50s, receive annuities that can exceed $100,000 a year, and collect pensions while staying on the same job, The Arizona Republic has found.

Over the past decade, government agencies have been forced to pour billions of dollars into the state's six pension systems to keep pace with continual benefit enhancements. The added cost of these enhancements has been largely borne by taxpayers as pension investments eroded amid stock-market declines.

Even some of the pension funds' managers agree that these enhancements over the past decade have grown so expensive they are unsustainable without sharp increases in public funding and cuts to critical public services.

Legislators and other policy makers, meanwhile, have done little to overhaul the systems. In fact, pension reform is rarely, if ever, mentioned by Gov. Jan Brewer or the Legislature as they grapple with ways to bridge a two-year budget deficit estimated at $2.25 billion. A key lawmaker said that needs to change.

"It's a ticking time bomb," Arizona House Speaker Kirk Adams said of the state's pension systems. "A lot of people for too long have tried to ignore it and set it aside. The Legislature needs to seriously look at what the options are."

The tab for local governments and the state to run these systems grew 448 percent over the past 10 years to $1.39 billion annually, according to a Republic analysis of the benefits paid to more than 111,000 retired public employees. In many cases, taxpayer contributions to the pension funds far exceed workers' contributions. In fact, most employees earn all their contributions back within three to four years of retiring.

Today, more money is spent on Arizona's public-pension systems than on the individual state budgets for higher education, corrections, economic security or health insurance for the poor.

Even as governments cut budgets, public-pension costs will keep growing. The state Constitution forbids the government from decreasing a payout for any retiree now in the system. And a coming wave of Baby Boomer employees will soon retire, further increasing the costs.

Byron Schlomach, an economist who studies pensions for the Phoenix-based Goldwater Institute, said there is little political will to change public-employee retirements because they affect about 363,000 state and local public employees who wield clout and because lawmakers benefit from the best of the publicly funded systems.

"Some of the resistance is coming from people who you would think were conservatives, but they may have retired from another pension system," Schlomach said. "They like the systems the way they are. They have their benefit, and they are resistant to change."

Well paid

For this series, The Republic filed 67 public-records requests. They were sent to the state's four public-pension systems, the Phoenix and Tucson municipal pension systems and all 57 public-school districts in Maricopa County. The newspaper, through the Arizona Public Records Law, obtained the amount of pensions paid to retirees in the six systems and the salaries of hundreds of retirees who still hold government jobs, with most being educators.

The Republic's analysis shows a system that pays some retirees well, including:

Elected officials. Among those who retired in the past decade, dozens now are paid more in annual retirement benefits than they were paid while in office.

Public-safety officers. An incentive program to keep officers working longer allows them to stop contributing to their pension funds five years early, keep working, then receive large lump-sum payouts - an average of $247,422 for police officers and $314,338 for firefighters. Those officers also then draw regular annual pensions.

City officials. The Phoenix retirement system allows employees to boost their public pay as they near retirement age, triggering increases in the annual amount of their pensions.

Educators. Employees in many school districts find ways to retire and then return to government jobs while also drawing a pension. Some in the public-education system have created a cottage industry to make so-called "double-dipping" easier. More than 900 teachers and administrators in Maricopa County school districts legally collect state pension checks while being paid to keep working for the schools. Some teachers make more than $100,000 a year in combined pension and salary, while administrators' combined pay and pension can exceed $200,000 annually.

Criminals: Six elected officials and a former county manager now receive state pensions despite being convicted of crimes involving misconduct while in office.

The bottom line: While most private employers have scaled back retirement programs and put more or all of the financial responsibility for their funding onto employees, Arizona civil-servant retirement systems have not made major changes.

Calls for reform

California, New Jersey and Illinois are among many states now struggling with the costs of public-pension systems. Reform movements in some states have cut benefits and raised the age at which workers can start drawing pensions.

Internationally, there have been moves by financially strapped governments across Europe to raise the retirement age. In Greece, generous early-retirement practices led to a debt crisis that prompted unpopular changes earlier this year. Last month, amid mounting protests that hampered France's economy, the French parliament bumped the retirement age from 60 to 62 to preserve its pension system.

Arizona anti-tax groups and business leaders are calling for changes to ease Arizona's ever-growing pension costs.

Kevin McCarthy, president of the Arizona Tax Research Association and a recent board appointee to the Arizona State Retirement System, said ongoing enhancements to the retirement systems are unsustainable.

"I don't know how some of this stuff is rationalized," McCarthy said.

Lawmakers have taken small steps to bring costs under control.

Several modifications begin July 1, 2011, for ASRS, the state's largest system. Newly hired employees who are part of ASRS will be required to work a few years longer before they can draw a retirement check. Also changed was the formula by which retiring employees' average ending salary is calculated, slightly lowering pensions.

However, the state won't see a savings from the changes until those new hires begin to retire years from now.

Even those modest proposals took four years for the Legislature to finally pass.

Though the $23.1 billion ASRS trust is currently underfunded and payments exceed contributions, ASRS Director Paul Matson said the trust is in no danger of becoming insolvent because its size is expected to grow and its investment values will recover.

How pensions work

The largest of Arizona's six public-pension systems is ASRS, which covers 708 employers of state, county and municipal workers, public-school teachers and those working for Arizona's three state universities. Created in 1953, it has 92,216 retirees and 220,323 actively contributing members.

Three other systems cover elected officials, corrections employees and police and firefighters. Tucson and Phoenix run their own systems.

Public employees contribute a portion of their pay toward their pensions. Their employers also make contributions equal to or greater than the employees' amount.

All provide defined-benefit plans, meaning the retiree's benefits are guaranteed no matter how much he or she has paid into the system while working.

Under such a plan, each trust pays a pension whose annual amount is determined through a formula taking into account the employee's highest average wage at the end of a career, years of service and a benefit "multiplier."

For example, an ASRS retiree's benefit is calculated by multiplying the years of service by his or her average salary over the last three years of employment. That figure is then multiplied by the multiplier, a percentage set by state law and tiered by years of service.

So, an employee who has worked 20 years and had an average annual salary over the last three years of $40,000 would have a multiplier of 2.15 percent. That would result in a lifetime annual pension of $17,200.

The biggest public pensions are given to those who work longer and make more money at the end of their careers. There are 392 government retirees in Arizona who receive annual pensions in excess of $100,000, and the average pension for all six systems is $23,221, according to records the paper compiled.

In the ASRS system, the average retirement age is 60, and the typical retiree works 19.26 years. The average annual lifetime ASRS pension is $19,788.

In the private sector, a 401(k) would have to accumulate $273,752 to $283,327 over a 20-year period to get the same $19,788 annual pension at retirement, according to Michael Juilfs and Jim Dew, certified financial planners who operate separate Scottsdale firms.

For the private employee, the money would last 19 to 20 years, assuming modest interest-rate gains during retirement. The calculations, however, are based upon retiring at 65 - common in the private sector but five years later than a typical ASRS retiree.

"Public employees have a better deal than they realize, and they are not that low-paid," Juilfs said.

Insufficient funds

Because of the recession and years of low investment returns, Arizona's public-pension funds are now considered underfunded.

Ideally, a trust is 100 percent funded, meaning the current value of the assets in the trust is equal to the pension cost calculated for all current and future retirees. Pensions funded at 80 percent or higher are considered healthy by industry standards.

As investment values slide, extra money has to come from somewhere.

Each trust has different contribution rates for employees and employers.

In five of the six systems, the employer has a higher contribution rate than the employee. Only ASRS has matching contribution rates.

That ASRS rate in 2000 was low because the 1990s stock-market boom provided an investment surplus for its trust. Back then, the combined contribution rate, the total from employees and employers, was 4.34 percent. Today, it is 19.2 percent, with each side contributing half, or 9.6 percent. Matson projects the combined contribution rate, which includes a small amount going to retiree health-insurance cost, will steadily increase to 22.96 percent by 2018, then decline as the trust's financial health improves.

Even with far higher contribution rates, the ASRS trust's assets cover only 75 percent of its liabilities.

Matson chiefly blamed stock-market crashes in 2001 and 2008 for the ASRS trust's underfunding, and he said earnings in three other years did not meet projections of 8 percent growth.

Most of Arizona's other public-pension funds are in worse shape. The Public Safety Personnel Retirement System has the worst funding ratio, at about 66 percent.

During the past 30 years, many private businesses have dumped similar defined-benefit pension plans for defined-contribution plans such as 401(k)s. Employers make set contributions to employees' individual retirement accounts but are not responsible for guaranteeing their retirement income or earnings growth.

In 1980, 84 percent of private-sector employees had defined-benefit plans, according to the U.S. Bureau of Labor Statistics. By March 2009, the most recent records available show, that number dropped to 21 percent.

Recent federal records show 84 percent of state and local government workers still have defined-benefit plans.

"Pension benefits have been cut so much that it appears firemen and teachers have a golden parachute when they really don't," said Elizabeth Ashack, a Bureau of Labor Statistics economist. "For them, it's just the way it used to be."

The Arizona National Federation of Independent Business said none of its 7,500 members offers a defined-benefit plan.

"It's becoming extinct in the private sector, especially for small businesses," said Farrell Quinlan, the federation's Arizona director.

Matson, the ASRS director, defends defined-benefit plans, saying retirees with pensions are less likely to be dependent on government services when they retire. He added that defined-benefit plans provide better long-term security for retirees and they typically are better managed than defined-contribution plans.

Big payouts

The system is providing many employees a comfortable retirement. Meanwhile, taxpayer costs are rising, with the system paying out more than it is taking in. In fiscal 2009, for example, ASRS contributions from employers and employees totaled $1.6 billion. Its benefit payouts: $2 billion, further depleting the trust.

Public-sector retirees' pensions benefits are guaranteed for as long as they live, and surviving spouses collect some benefits even after the retiree dies.

The largest annual pension in ASRS goes to Carol Peck, who retired as superintendent of the Phoenix-area Alhambra Elementary School District in July 2002 with 35 years of service. According to ASRS records, she had an ending salary of $275,022.

Now chief executive of the Rodel Charitable Foundation of Arizona, she receives a $226,422 annual pension.

Peck, who received numerous professional accolades, including national superintendent of the year, said in an e-mail response that her salary was above average compared with other superintendents but was "determined to be commensurate with my performance." She also wrote that teacher and staff salaries, as well as student performance, were above average at Alhambra. Peck declined further comment.

Traditionally, public-employee pension systems were recognized as a way to overcome inequities between lower public-sector salaries and higher pay in the private sector. However, that inequity is no longer the case in Arizona, according to the U.S. Bureau of Labor Statistics.

The average state-employee salary in 2009 was $46,841, and the average municipal-employee salary was $42,668. In the private industry, the average pay was $42,090.

Public costs

As governments juggle their budgets to keep their employees' pensions intact, they have simultaneously found themselves cutting public services because of shrinking revenue and a lingering economic downturn.

At the local level, cities have cut library hours, closed recreation facilities, curtailed public-transit spending and furloughed or laid off employees.

The state has cut health care for needy families, shuttered some state parks and motor-vehicle registration branches, trimmed law-enforcement and prison budgets, and laid off hundreds of workers.

Arizona still faces a combined budget deficit estimated at $2.25 billion this year and next. Gov. Brewer has said public education, health and welfare programs all are likely to see significant reductions in 2011.

As state officials slashed budgets in recent years, they repeatedly argued that they had to cut public services because huge portions of their budgets were off-limits. Spending approved by voters or otherwise guaranteed cannot be cut.

A large portion of that off-limits spending goes to pensions. But cutting that spending is difficult because pension costs are layered throughout dozens of government-agency budgets rather than being lumped together as a single expenditure.

Solutions

Along with a weak economy, Arizona lawmakers shoulder some of the blame for the pension imbalance. In 2001, they permanently increased the largest system's multiplier, which increased retiree payouts. Three years earlier, they successfully asked voters to approve a constitutional amendment that does not allow public-employee pension benefits to be diminished.

Since then, they have done little to soften the financial impact on taxpayers.

Adams, the House speaker, said that while lawmakers can tweak the pension systems, they likely will need to ask voters to change the state Constitution.

"If we are going to have any fundamental reform, the voters will have to get involved," Adams said. "They need to remove the roadblock so the Legislature can do something different like have a defined-contribution plan."

The governor said Arizona's pension systems are in better shape than other states', but "that doesn't mean we don't need to go in there and look at this and get the discussion on the table and fix it."

The Arizona Chamber of Commerce has openly encouraged lawmakers to consider new public retirement plans that combine a defined benefit and a defined contribution.

Suzanne Taylor, senior vice president of public policy for the chamber, said the current system is "not a sustainable path" for taxpayers.

Retirement system board member McCarthy, a limited-government activist, said lawmakers must act quickly when the session begins in January.

"We are not talking about small parts of state and local governments," he said. "We are talking about extraordinary costs, and people are finding out these things are choking state and local budgets. The person taking it is the taxpayer."

Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478.

SOURCE: http://www.azcentral.com/news/articles/arizona-pension-funds.html#ixzz1ld7F1RMf

2012-02-02T10:21:00.000-08:00

U.S. Senators' Stock Picks Outperform the Pros'

OCTOBER 26, 2004

By JANE J. KIM | Staff Reporter of THE WALL STREET JOURNAL

Politicians may have done a poor job improving the government's bottom line, but they seem to be doing quite well with their own.

A study suggests that U.S. senators possess stock-picking skills that even the most seasoned money manager would envy. During the boom years of the 1990s, senators' stock picks beat the market by 12 percentage points a year on average, according to the study. Corporate insiders, meanwhile, beat the market by about six percentage points a year, while U.S. households underperformed the market by 1.4 percentage points a year on average, according to separate studies. The final details of the study will be published in the December issue of the Journal of Financial and Quantitative Analysis.

The study's authors, relying on financial-disclosure forms from 1993 to 1998, looked at about 6,000 common-stock transactions of about a third of the senators each year. The researchers then mimicked the senators' transactions, buying the stocks the senators bought and selling the shares they sold. Over a six-year period, that "superportfolio" essentially beat the market by about one percentage point a month, or 12 percentage points a year.

Looking at the timing of cumulative returns, the senators also appeared to know exactly when to buy or sell their holdings. Senators would buy stocks just before the shares suddenly would outperform the market by more than 25%. Conversely, senators would sell stocks that had been beating the market by about 25% for the past year just when the shares would fall back in line with the market's performance.

The researchers say senators' uncanny ability to know when to buy or sell their shares seems to stem from having access to information that other investors wouldn't have. "I don't think you need much of an imagination to realize that they're in the know," says Alan Ziobrowski, a business professor at Georgia State University in Atlanta and one of the four authors of the study.

Senators, for example, are likely to know which tax legislation is apt to pass and which companies might benefit. Or a senator who sits on a certain committee might find out that a particular company soon will be awarded a government contract or that a certain drug might get regulatory approval, says Prof. Ziobrowski.

The Code of Ethics for Government Service states that government employees cannot use any confidential information acquired in the performance of governmental duties as a means for making profit. The U.S. Senate Ethics Manual lays out other rules barring any actions that would create a conflict of interest. But the manual also notes that if a senator happens to personally benefit from legislation that has a broad, general impact on his or her state or the nation, that gain is assumed to be "incidentally related." By law, senators are required to disclose their common-stock transactions and other personal financial interests by May 15 of each year. Those public documents can be found online atwww.opensecrets.org, a Web site run by the Center for Responsive Politics, a nonprofit research group in Washington.

Not all of the senators actively are buying and selling stock. Just over a third of the senators bought or sold individual stocks in any one year in the study, and the vast majority of stock transactions were less than $15,000. But a small group of senators appeared to be quite active in the stock market. In fact, a handful of senators -- Clairborne Pell (D., R.I.), John Warner (R., Va.), John Danforth (R., Mo.) and Barbara Boxer (D., Calif.) -- accounted for nearly half of the stock trades analyzed. (Only Sens. Boxer and Warner are still in the Senate. A spokeswoman for Sen. Boxer says her assets are now in a blind trust, and a spokesman for Sen. Warner declined to comment.) To eliminate the possibility that the heavy trades of a few senators may have skewed the results, the authors also looked at each senator's trades as individual transactions and found that both big traders and small ones shared similar outsized returns.

Since congressional disclosure forms use broad ranges to report investment income and losses, the amount of money earned or lost by a senator from stocks could not be determined, the study noted.

Write to Jane J. Kim atjane.kim@dowjones.com

SOURCE: http://online.wsj.com/article/SB109874916042455390.html

Biggest Holders of US Government Debt

2012-01-31T13:05:00.000-08:00

Biggest Holders of US Government Debt

Switzerland		113.9B
Taiwan		149.6B
Caribbean Banking Centers		185.3B
Brazil		206.4B
Oil Exporters		232.0B
Insurance Companies		250.1B
Depository Institutions		284.5B
The United Kingdom		429.4B
State and Local Governments		484.4B
Mutual Funds		653.5B
Pension Funds		852.2B
Japan		1.038T
Other Investors / Savings Bond		1.107T
China		1.132T
Federal Reserve and Intragovernmental Holdings		6.328T

SOURCE: cnbc.com (Jan 31, 2012)

2012-01-11T15:43:00.001-08:00

Private-Equity Payday: Carlyle Founders Get $402 Million

By GREGORY ZUCKERMAN And RYAN DEZEMBER

Amid a swirl of controversy about the private-equity business, industry powerhouse Carlyle Group revealed that its three founders together earned more than $400 million last year.

News of the payday comes as Republican presidential candidate Mitt Romney has been bombarded with criticism for the work of his former firm, private-equity giant Bain Capital, including from fellow Republican Newt Gingrich. Mr. Romney's campaign has indicated it is prepared to defend his work as a part of free-market capitalism. Bain has said the company's focus is on working with management teams "to build great companies and improve their operations."

At Carlyle, the earnings for David Rubenstein, William Conway and Daniel D'Aniello amounted to salary of $275,000, a bonus of $3.5 million, and a $134 million share of the firm's investment profits apiece, according to a document filed with the Securities and Exchange Commission late Tuesday.

The filing is ahead of Carlyle's anticipated initial public offering later this year, likely in the second quarter, according to someone close to the matter. A representative for the firm declined to comment.

Washington D.C.-based Carlyle, like other buyout firms, claims 20% of the profits of the firm's investments. The $402 million the three executives shared—in addition to their salaries and bonuses—represented more than half of the 20% fees that Carlyle claimed on the firm's investment gains in 2011.

The three also saw hefty returns on their personal investments in the firm's funds, separate from their take of the profits. Carlyle reported distributions to Messrs. D'Aniello, Conway, and Rubenstein of $77.6 million, $70.9 million and $56.8 million, respectively. The filing doesn't specify what portion of those distributions consisted of their original investments.

The founders continue to plow money back into their funds. Last year, Mr. Conway, a co-chief executive, invested $164 million, Mr. D'Aniello, Carlyle's chairman, put in $98 million, and Mr. Rubenstein, the other co-CEO, invested $97 million, the filing says. They have made outstanding commitments to invest an additional $490.7 million to the funds, the filing says.

Within Carlyle, the compensation didn't cause many ripples. Some executives were unaware of pay details of the three founders, one person at the firm said, adding that the three top partners were generally assumed to have been making more than half of the firm's profits.

"It's certainly a sizable payday and yet in this sector, it's not unusual," said David Wise, senior principal at management consulting firm Hay Group. "People go into private equity because at the end of the rainbow, they can have a payout like this."

When Blackstone Group LP was preparing its own public offering in 2007, it reported that in 2006 its top five executives shared in $771.5 million in cash distributions, their full compensation at the time. Chairman and Chief Executive Officer Stephen Schwarzman was paid $398.3 million, senior chairman Peter Peterson's share was $212.9 million and Hamilton James, Blackstone's president and chief operating officer, collected $97.3 million, according to a securities filing.

The Carlyle payday resulted from an especially active and successful period last year. The buyout firm has reported economic net income, the industry's preferred measure of earnings, of $579 million through the first nine months of last year, the most recent data available from the company. It handed back $15 billion to its investors during those nine months, representing profits from the firm's buyout deals as well as original money invested by clients. That was a record for any nine-month period for Carlyle and almost double the previous best period.

The firm, founded in 1987, originally forged close ties within political circles, hiring former senior politicians such as former Defense Secretary Frank Carlucci, who served as chairman of Carlyle from 1992 to 2003. Former President George H.W. Bush and former Secretary of State James A. Baker III also served as advisers. Early on, some of Carlyle's deals were in the defense industry.

But in recent years Carlyle has cut ties with former politicians, emerging as a more-global buyout player than some of its peers, with early deals in China. Carlyle has launched many more, smaller buyout funds than rivals, sometimes with a narrow focus, and executives receive more of their compensation from the profits they specifically generate, rather than the overall firm's gains.

Though the Carlyle pay may cause a backlash, some clients said they had little to criticize after a year of big gains from the sale of interests in companies including China Pacific Insurance Group Co., Kinder Morgan Inc. and Dunkin' Brands Group Inc. "They obviously had a very good year and are incentivized to create gains for investors and are entitled to 20% of those gains," says an executive with an investment in Carlyle funds. "Investors had to have made a lot of money" for the trio to make more than $400 million last year.

Write to Gregory Zuckerman at gregory.zuckerman@wsj.com

SOURCE: http://online.wsj.com/article/SB10001424052970204124204577154553703228504.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Is Gold Rally Finally Over? What History Tells Investors

2011-09-26T15:31:00.000-07:00

Published: Monday, 26 Sep 2011 | 12:25 PM ET

Gold's toppling from record highs, culminating in Monday's huge price plunge, has investors asking whether a decade-long bull run is over. History would suggest that while gold has taken a beating, it is far from down and out.

Monday's tumble to around $1,535 an ounce dragged prices 20 percent below the record $1,920 reached this month. But since its rise from just over $250 in early 2001, gold [XAU= 1623.89 -2.96 (-0.18%) ] has bounced back from bigger drops, having fallen 25 percent between May and June 2006, and 27 percent in October 2008.

The 2008 episode saw gold treated like any other high risk asset when the collapse of Lehman Brothers sparked heavy selling across financial markets in a widely-documented "dash for cash"—after which it bounced back hard to record highs.

"Gold and other real assets are not immune from global sell-offs, and this is a textbook example we are seeing now," said Bayram Dincer, an analyst at LGT Capital Management.

"If you want to draw an analogy, look at 2008, when the Lehman fall saw gold collapsing around $250. The markets are in this 2008, global post-Lehman sell-off mode."

In the short term, the sharply higher volatility in gold typified by Monday's trade will have battered its already tarnished reputation as a haven. Prices could have further to correct, given their hefty run-up of recent months.

But expectations that, longer term, other asset classes could prove still more of a risk, coupled with the low interest rate environment, are likely to push prices higher when selling peters out.

While gold may be seen as less of a haven than in the days before $50 daily price moves became a regular feature of the market, it is hardly alone in seeing heightened volatility.

"Clearly any move like this is going to make people at least question the assumptions they had that any euro zone stress might be positive for gold," said David Jollie, an analyst at Mitsui Precious Metals. "General financial market volatility is a threat to any asset."

Riskier assets

The euro, stock markets and raw materials such as oil and copper have all posted losses this month as investors sold these nominally riskier assets in response to growing concerns over the euro zone debtcrisis.

Gold seemed to have reached a tipping point as worsening financial market conditions forced some investors to realise fat profits in the metal to cover losses elsewhere, and on a rush to the greater liquidity of the dollar and Treasurys.

"For now, investors are only finding comfort in the relative safety of cash," said UBS analyst Edel Tully.

These kinds of fears usually benefit gold, so its switch in role from haven to source of funds shows not only how much stress the financial markets are under, but also how overstretched the metal had become.

Signs that gold was ripe for a correction were rife after its sharp rally to record highs in early September—which saw it surge by 28 percent in just over two months—was followed by a period of intense volatility.

"The rise in volatility taking place in the gold price was clearly an indication that gold was no longer a low-risk asset," said Natixis analyst Nic Brown.

"We are unwinding much of recent move over last two to three months. It's too early to say whether it's the big burst. It could be, but it's equally possible that it could be what allows the market to push over further highs over the next few months."

Long-term investors hold on

Holdings of gold-backed exchange-traded funds have remained relatively steady during recent sell-offs, suggesting they have been reasonably resilient to short-term moves.

Analysts say recent sharp price moves are a likely result of repositioning by large institutional investors like hedge funds. But these are not the only, or even the main, buyers of gold.

Small-scale retail investors, particularly Asian buyers looking for a store of wealth and a hedge against inflation, have also been key bullion buyers, and are likely to remain so.

In the short term, investors are likely to be wary of "catching a falling knife," and buying into the market before the correction has fully run its course. But they may be swift to do so as prices stabilize, analysts predicted.

While gold's retracement was sharp, spot prices are still up 7 percent this quarter, and nearly 14 percent on the year, despite the failure of a number of key risk factors, like fears of a U.S. default or fresh monetary easing, to materialize.

"In Q4 2008... the gold price fell by 25 percent over a fairly short period," said VM Group analyst Carl Firman. "But it does tend to recover at significantly higher levels."

"I think what you will see could be a gold recovery very similar to the one you saw in Q1 2009, when the gold price recovered long before other assets hit bottom," Firman said.

"We are still looking at a high inflationary environment, we are looking at negative real interest rates, there are all sorts of uncertainties out there," he said. "That has got to benefit gold, at some point."

SOURCE: http://www.cnbc.com/id/44671131

A Gold Rush Wanes as Hedge Funds Sell

2011-09-23T11:13:00.000-07:00

By: Julie Creswell,
The New York Times

Is the smart money fleeing gold?

For the better part of the last two years, some of the world’s biggest hedge funds have been piling into gold, betting the precious metal would provide an effective hedge against inflation or be a safer place to park cash as equity markets around the world stumbled.

But to the surprise of many investors, when equity markets across the globe tumbled once again on Thursday, gold moved sharply lower as well.

Gold futures for September delivery fell $66.30, or 3.7 percent, to $1,739.20 an ounce in New York. It was quite a turnabout for the metal, which has been soaring in recent months amid the turbulent stock markets.

Hedge funds, which have been ratcheting down their positions in gold futures since early August, were quickly named as the culprits in the latest sell-off.

Some traders said that hedge funds were beginning to unwind, or close out, what has been a very popular and profitable trade for the last 18 months as they bet the dollar would fall and that gold would rise. In the last month alone, the euro has fallen nearly 4 percent against the dollar amid worries about the European debt crisis.

The sell-off in gold was part of a broader move in the markets that had investors shifting away from perceived riskier assets, like commodities, and into the dollar in reaction to the Federal Reserve’s announcement on Wednesday of its new stimulus program.

In addition, the Fed, said that there were “significant downside risks” to the United States economy, which sent several commodities, including crude oil and copper, tumbling on Thursday on fears of a global slowdown in demand.

Other market participants said hedge funds were selling their positions in gold to raise cash to meet increased capital demands for their borrowings from Wall Street banks as the assets they have put up as collateral, like other commodities or stocks, have declined sharply in value.

“On the one hand you have a lot of strength in the U.S. dollar, historically gold and the dollar do trade inversely,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “The hedge funds are long gold and they need to raise cash and it looks like they are definitely selling some gold.”

Others say some hedge funds may be selling to meet redemption requests from investors who have been spooked by the recent market volatility and fear a repeat of the problems of late 2008.

“A lot of investors are waking up to the realization that something is off. We’ve seen Goldman Sachs close its flagship fund, legendary hedge funds are down sharply, and I suspect we’re going to see significant withdrawals from some hedge funds this year,” said Michael A. Gayed, the chief investment strategist of the investment advisory firm Pension Partners.

“The tendency for individual hedge funds or anybody is to sell winners before they sell losers. What’s been one of the few winners this year? It’s been gold,” Mr. Gayed added.

Still, some are not yet ready to call the end of the gold rush. Even with the pullback, gold remains one of the most profitable investments this year with a gain of 22 percent.

Some strategists have even predicted that gold will reach a record of above $2,300, which it hit during the early 1980s when adjusted for inflation and translated into current dollars. Likewise, the world’s largest exchange-traded gold fund, the SPDR Gold Shares [GLD 161.22 -7.83 (-4.63%) ], fell 2.6 percent on Thursday, but remains up 22 percent for the year.

Gold, whether through futures contracts or via exchange-traded funds, has been a popular investment among some of the world’s largest hedge funds. One of the best known “gold bugs” is John A. Paulson, whose firm, Paulson & Company, is the biggest shareholder in the SPDR Gold Shares ETF. But many other hedge funds have embraced the metal as well.

After peaking in early August, hedge funds have been reducing their exposure in the gold futures market, according to Mary Ann Bartels, the head of United States technical analysis for Bank of America Merrill Lynch.

“A lot of speculators were very long in July,” Ms. Bartels said. “But they’ve been taking it down ever since.”

SOURCE: http://www.cnbc.com/id/44638898

Soros: US Is Already in Double-Dip Recession

2011-09-22T15:18:00.000-07:00

Published: Thursday, 22 Sep 2011 | 1:51 AM ET

By: Reporting by Maria Bartiromo, Writing by Antonya Allen, CNBC.com

Billionaire investor George Soros said he believed the United States was already experiencing the pain of a double dip recession and that Republican opposition to Obama's fiscal stimulus plans was to blame for sluggish growth.

Asked by CNBC if he believed the US risks falling into a double-dip recession , Soror said: "I think we are in it already."

"We have a slowdown and basically a conflict about whether the rich ought to pay taxes to create jobs or not and there was a deal in the making which would have balanced the budget over the long term, but would have allowed short-term fiscal stimulus, which would have been the right policy," Soros said in an interview late Wednesday.

"That was rejected, it fell apart… so it will come to the electorate next year to decide what they want," he added.

Euro zone policymakers have repeatedly followed the wrong policy shifts, creating a situation in Europe "more dangerous" to the global financial system than the collapse of Lehman Brothers in 2008, Soros said.

"It is a more dangerous situation [than Lehman Bros] and I think that the authorities, when push comes to shove, will do whatever it takes to hold the system together, because the alternative is just too terrible to contemplate," he added.

A number of smaller euro zone nations could default andleave the single currency area, Soros said, but he warned if it happened on an ad hoc basis, there would be considerable risk to the global economy.

"I think that you could have two or three of the small countries default or leave the euro provided it is prepared and done in an orderly way," Soros said.

"If it were to happen unprepared it could actually disrupt the global financial system, but that's why it's important to allow for it to happen and then those countries have a genuine choice it doesn't mean they are being pushed out."

Soros said he believed the so-called 'Troika' of the EU, ECB and IMF would release the next tranche of aid to heavily indebted Greece, but he stressed the creation of a European bailout fund would determine whether Greece received another bailout in December.

Obama's jobs speech transcript

2011-09-08T17:05:00.000-07:00


Obama's jobs speech transcript September 8, 2011 07:42 PM EDT
THE WHITE HOUSE Office of the Press Secretary September 8, 2011 Remarks of President Barack Obama in an Address to a Joint Session of Congress Mr. Speaker, Mr. Vice President, Members of Congress, and fellow Americans: Tonight we meet at an urgent time for our country. We continue to face an economic crisis that has left millions of our neighbors jobless, and a political crisis that has made things worse. This past week, reporters have been asking “What will this speech mean for the President? What will it mean for Congress? How will it affect their polls, and the next election?” But the millions of Americans who are watching right now: they don’t care about politics. They have real life concerns. Many have spent months looking for work. Others are doing their best just to scrape by – giving up nights out with the family to save on gas or make the mortgage; postponing retirement to send a kid to college. These men and women grew up with faith in an America where hard work and responsibility paid off. They believed in a country where everyone gets a fair shake and does their fair share – where if you stepped up, did your job, and were loyal to your company, that loyalty would be rewarded with a decent salary and good benefits; maybe a raise once in awhile. If you did the right thing, you could make it in America. But for decades now, Americans have watched that compact erode. They have seen the deck too often stacked against them. And they know that Washington hasn’t always put their interests first. The people of this country work hard to meet their responsibilities. The question tonight is whether we’ll meet ours. The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy; whether we can restore some of the fairness and security that has defined this nation since our beginning. Those of us here tonight can’t solve all of our nation’s woes. Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers. But we can help. We can make a difference. There are steps we can take right now to improve people’s lives. I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act. There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans – including many who sit here tonight. And everything in this bill will be paid for. Everything. The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services. You should pass this jobs plan right away. Everyone here knows that small businesses are where most new jobs begin. And you know that while corporate profits have come roaring back, smaller companies haven’t. So for everyone who speaks so passionately about making life easier for “job creators,” this plan is for you. Pass this jobs bill, and starting tomorrow, small businesses will get a tax cut if they hire new workers or raise workers’ wages. Pass this jobs bill, and all small business owners will also see their payroll taxes cut in half next year. If you have 50 employees making an average salary, that’s an $80,000 tax cut. And all businesses will be able to continue writing off the investments they make in 2012. It’s not just Democrats who have supported this kind of proposal. Fifty House Republicans have proposed the same payroll tax cut that’s in this plan. You should pass it right away. Pass this jobs bill, and we can put people to work rebuilding America. Everyone here knows that we have badly decaying roads and bridges all over this country. Our highways are clogged with traffic. Our skies are the most congested in the world. This is inexcusable. Building a world-class transportation system is part of what made us an economic superpower. And now we’re going to sit back and watch China build newer airports and faster railroads? At a time when millions of unemployed construction workers could build them right here in America? There are private construction companies all across America just waiting to get to work. There’s a bridge that needs repair between Ohio and Kentucky that’s on one of the busiest trucking routes in North America. A public transit project in Houston that will help clear up one of the worst areas of traffic in the country. And there are schools throughout this country that desperately need renovating. How can we expect our kids to do their best in places that are literally falling apart? This is America. Every child deserves a great school – and we can give it to them, if we act now. The American Jobs Act will repair and modernize at least 35,000 schools. It will put people to work right now fixing roofs and windows; installing science labs and high-speed internet in classrooms all across this country. It will rehabilitate homes and businesses in communities hit hardest by foreclosures. It will jumpstart thousands of transportation projects across the country. And to make sure the money is properly spent and for good purposes, we’re building on reforms we’ve already put in place. No more earmarks. No more boondoggles. No more bridges to nowhere. We’re cutting the red tape that prevents some of these projects from getting started as quickly as possible. And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy. This idea came from a bill written by a Texas Republican and a Massachusetts Democrat. The idea for a big boost in construction is supported by America’s largest business organization and America’s largest labor organization. It’s the kind of proposal that’s been supported in the past by Democrats and Republicans alike. You should pass it right away. Pass this jobs bill, and thousands of teachers in every state will go back to work. These are the men and women charged with preparing our children for a world where the competition has never been tougher. But while they’re adding teachers in places like South Korea, we’re laying them off in droves. It’s unfair to our kids. It undermines their future and ours. And it has to stop. Pass this jobs bill, and put our teachers back in the classroom where they belong. Pass this jobs bill, and companies will get extra tax credits if they hire America’s veterans. We ask these men and women to leave their careers, leave their families, and risk their lives to fight for our country. The last thing they should have to do is fight for a job when they come home. Pass this bill, and hundreds of thousands of disadvantaged young people will have the hope and dignity of a summer job next year. And their parents, low-income Americans who desperately want to work, will have more ladders out of poverty. Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job. We have to do more to help the long-term unemployed in their search for work. This jobs plan builds on a program in Georgia that several Republican leaders have highlighted, where people who collect unemployment insurance participate in temporary work as a way to build their skills while they look for a permanent job. The plan also extends unemployment insurance for another year. If the millions of unemployed Americans stopped getting this insurance, and stopped using that money for basic necessities, it would be a devastating blow to this economy. Democrats and Republicans in this Chamber have supported unemployment insurance plenty of times in the past. At this time of prolonged hardship, you should pass it again – right away. Pass this jobs bill, and the typical working family will get a fifteen hundred dollar tax cut next year. Fifteen hundred dollars that would have been taken out of your paycheck will go right into your pocket. This expands on the tax cut that Democrats and Republicans already passed for this year. If we allow that tax cut to expire – if we refuse to act – middle-class families will get hit with a tax increase at the worst possible time. We cannot let that happen. I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live. Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away. This is the American Jobs Act. It will lead to new jobs for construction workers, teachers, veterans, first responders, young people and the long-term unemployed. It will provide tax credits to companies that hire new workers, tax relief for small business owners, and tax cuts for the middle-class. And here’s the other thing I want the American people to know: the American Jobs Act will not add to the deficit. It will be paid for. And here’s how: The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I’m asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan – a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run. This approach is basically the one I’ve been advocating for months. In addition to the trillion dollars of spending cuts I’ve already signed into law, it’s a balanced plan that would reduce the deficit by making additional spending cuts; by making modest adjustments to health care programs like Medicare and Medicaid; and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share. What’s more, the spending cuts wouldn’t happen so abruptly that they’d be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right away. Now, I realize there are some in my party who don’t think we should make any changes at all to Medicare and Medicaid, and I understand their concerns. But here’s the truth. Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program. And if we don’t gradually reform the system while protecting current beneficiaries, it won’t be there when future retirees need it. We have to reform Medicare to strengthen it. I’m also well aware that there are many Republicans who don’t believe we should raise taxes on those who are most fortunate and can best afford it. But here is what every American knows. While most people in this country struggle to make ends meet, a few of the most affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets. Right now, Warren Buffet pays a lower tax rate than his secretary – an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake, and everybody pays their fair share. And I believe the vast majority of wealthy Americans and CEOs are willing to do just that, if it helps the economy grow and gets our fiscal house in order. I’ll also offer ideas to reform a corporate tax code that stands as a monument to special interest influence in Washington. By eliminating pages of loopholes and deductions, we can lower one of the highest corporate tax rates in the world. Our tax code shouldn’t give an advantage to companies that can afford the best-connected lobbyists. It should give an advantage to companies that invest and create jobs here in America. So we can reduce this deficit, pay down our debt, and pay for this jobs plan in the process. But in order to do this, we have to decide what our priorities are. We have to ask ourselves, “What’s the best way to grow the economy and create jobs?” Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both. This isn’t political grandstanding. This isn’t class warfare. This is simple math. These are real choices that we have to make. And I’m pretty sure I know what most Americans would choose. It’s not even close. And it’s time for us to do what’s right for our future. The American Jobs Act answers the urgent need to create jobs right away. But we can’t stop there. As I’ve argued since I ran for this office, we have to look beyond the immediate crisis and start building an economy that lasts into the future – an economy that creates good, middle-class jobs that pay well and offer security. We now live in a world where technology has made it possible for companies to take their business anywhere. If we want them to start here and stay here and hire here, we have to be able to out-build, out-educate, and out-innovate every other country on Earth. This task, of making America more competitive for the long haul, is a job for all of us. For government and for private companies. For states and for local communities – and for every American citizen. All of us will have to up our game. All of us will have to change the way we do business. My administration can and will take some steps to improve our competitiveness on our own. For example, if you’re a small business owner who has a contract with the federal government, we’re going to make sure you get paid a lot faster than you do now. We’re also planning to cut away the red tape that prevents too many rapidly-growing start-up companies from raising capital and going public. And to help responsible homeowners, we’re going to work with Federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4% — a step that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices. Other steps will require Congressional action. Today you passed reform that will speed up the outdated patent process, so that entrepreneurs can turn a new idea into a new business as quickly as possible. That’s the kind of action we need. Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia, and South Korea – while also helping the workers whose jobs have been affected by global competition. If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers. I want to see more products sold around the world stamped with three proud words: “Made in America.” And on all of our efforts to strengthen competitiveness, we need to look for ways to work side-by-side with America’s businesses. That’s why I’ve brought together a Jobs Council of leaders from different industries who are developing a wide range of new ideas to help companies grow and create jobs. Already, we’ve mobilized business leaders to train 10,000 American engineers a year, by providing company internships and training. Other businesses are covering tuition for workers who learn new skills at community colleges. And we’re going to make sure the next generation of manufacturing takes root not in China or Europe, but right here, in the United States of America. If we provide the right incentives and support – and if we make sure our trading partners play by the rules – we can be the ones to build everything from fuel-efficient cars to advanced biofuels to semiconductors that are sold all over the world. That’s how America can be number one again. That’s how America will be number one again. Now, I realize that some of you have a different theory on how to grow the economy. Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations. Well, I agree that we can’t afford wasteful spending, and I will continue to work with Congress to get rid of it. And I agree that there are some rules and regulations that put an unnecessary burden on businesses at a time when they can least afford it. That’s why I ordered a review of all government regulations. So far, we’ve identified over 500 reforms, which will save billions of dollars over the next few years. We should have no more regulation than the health, safety, and security of the American people require. Every rule should meet that common sense test. But what we can’t do – what I won’t do – is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top. And I believe that’s a race we can win. In fact, this larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everyone’s money, let everyone write their own rules, and tell everyone they’re on their own – that’s not who we are. That’s not the story of America. Yes, we are rugged individualists. Yes, we are strong and self-reliant. And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and envy of the world. But there has always been another thread running throughout our history – a belief that we are all connected; and that there are some things we can only do together, as a nation. We all remember Abraham Lincoln as the leader who saved our Union. But in the middle of a Civil War, he was also a leader who looked to the future – a Republican president who mobilized government to build the transcontinental railroad; launch the National Academy of Sciences; and set up the first land grant colleges. And leaders of both parties have followed the example he set. Ask yourselves – where would we be right now if the people who sat here before us decided not to build our highways and our bridges; our dams and our airports? What would this country be like if we had chosen not to spend money on public high schools, or research universities, or community colleges? Millions of returning heroes, including my grandfather, had the opportunity to go to school because of the GI Bill. Where would we be if they hadn’t had that chance? How many jobs would it have cost us if past Congresses decided not to support the basic research that led to the Internet and the computer chip? What kind of country would this be if this Chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do? How many Americans would have suffered as a result? No single individual built America on their own. We built it together. We have been, and always will be, one nation, under God, indivisible, with liberty and justice for all; a nation with responsibilities to ourselves and with responsibilities to one another. Members of Congress, it is time for us to meet our responsibilities. Every proposal I’ve laid out tonight is the kind that’s been supported by Democrats and Republicans in the past. Every proposal I’ve laid out tonight will be paid for. And every proposal is designed to meet the urgent needs of our people and our communities. I know there’s been a lot of skepticism about whether the politics of the moment will allow us to pass this jobs plan – or any jobs plan. Already, we’re seeing the same old press releases and tweets flying back and forth. Already, the media has proclaimed that it’s impossible to bridge our differences. And maybe some of you have decided that those differences are so great that we can only resolve them at the ballot box. But know this: the next election is fourteen months away. And the people who sent us here – the people who hired us to work for them – they don’t have the luxury of waiting fourteen months. Some of them are living week to week; paycheck to paycheck; even day to day. They need help, and they need it now. I don’t pretend that this plan will solve all our problems. It shouldn’t be, nor will it be, the last plan of action we propose. What’s guided us from the start of this crisis hasn’t been the search for a silver bullet. It’s been a commitment to stay at it – to be persistent – to keep trying every new idea that works, and listen to every good proposal, no matter which party comes up with it. Regardless of the arguments we’ve had in the past, regardless of the arguments we’ll have in the future, this plan is the right thing to do right now. You should pass it. And I intend to take that message to every corner of this country. I also ask every American who agrees to lift your voice and tell the people who are gathered here tonight that you want action now. Tell Washington that doing nothing is not an option. Remind us that if we act as one nation, and one people, we have it within our power to meet this challenge. President Kennedy once said, “Our problems are man-made – therefore they can be solved by man. And man can be as big as he wants.” These are difficult years for our country. But we are Americans. We are tougher than the times that we live in, and we are bigger than our politics have been. So let’s meet the moment. Let’s get to work, and show the world once again why the United States of America remains the greatest nation on Earth. Thank you, God bless you, and may God bless the United States of America. SOURCE: http://dyn.politico.com/printstory.cfm?uuid=4B560AE8-0819-5D2E-D6E227091DB7DE5E ###
© 2011 POLITICO LLC

Obama's $300 Billion for Jobs: Where All the Money Goes

2011-09-07T15:21:00.000-07:00

Published: Wednesday, 7 Sep 2011 | 4:00 PM ET

U.S. President Barack Obama, whose popularity has fallen to new lows amid fears the American economy could be headed for another recession, will unveil a jobs package in a speech to Congress on Thursday.

The plan is expected to total more than $300 billion, according to U.S. media reports.

Economic woes have clouded Obama's 2012 re-election prospects and he faces pressure from Democratic allies to offer a bold plan for reducing the 9.1 percent unemployment rate.

In the speech, which will take place at 7 p.m. EDT, Obama will unveil a mix of measures, some of which could clear the Senate as well as the Republican-controlled House, and others that might face greater resistance.

Here are elements likely to be part of the speech:

Extensions of payroll tax cuts

Extending a payroll tax cut for workers first enacted last December is the centerpiece of Obama's plan. Continuing the tax cut by another year would cost about $112 billion, according to the non-partisan Congressional Budget Office.

Congressional Republicans are lukewarm on the idea, with some saying the White House should focus on measures such as broad tax reform that would have a more lasting impact.

Macroeconomic Advisers, an economic consulting firm, estimates that extending the payroll tax holiday, emergency unemployment benefits and business expensing provisions through 2012 would boost employment by about 600,000 next year.

Infrastructure spending

Obama has said public-works projects, such as the repair of highways and school buildings, would be one way of putting unemployed construction workers back on the job while upgrading the country's infrastructure.

Republicans contend large-scale spending initiatives have not helped the economy and point as evidence to the economy's weakness despite the $800 billion stimulus package Obama and his fellow Democrats enacted in 2009.

But infrastructure spending is popular with voters and Republicans have indicated they might be willing to support some initiatives.

The CBO has said big construction projects often require years of planning and preparation. Many road, bridge and sewer projects financed by the 2009 stimulus got bogged down in red tape and took a year or more to start construction.

In comments often cited by Republicans, Obama said in a New York Times Magazine interview last October that infrastructure spending can take time to trickle through the economy because "there's no such thing as shovel-ready projects."

Aid to states to prevent teacher layoffs

Obama is likely to propose federal help to states to prevent layoffs of teachers and first responders.

Declines in government payrolls have put a damper on the job market in recent months, so economists say such aid could contribute to near-term improvement in the jobs picture.

Tax breaks for businesses

Obama is likely to propose extending the payroll tax cut to employers as a means of boosting hiring.

Another approach might be to reserve that tax cut for businesses that hire unemployed workers. Congress passed a similar measure last year that cost about $13 billion.

Critics say such tax breaks might have a limited effect on hiring because it might mostly reward firms already planning to add workers. But the incentive could accelerate some hiring decisions.

Extending unemployment aid

Congress has extended jobless aid several times to help people unemployed for more than six months. The extensions are due to lapse at the end of this year and Obama will call for their renewal, which would cost about $57 billion.

Economists say unemployment aid can stimulate the economy because those receiving it are likely to spend it quickly.

Training for the long-term unemployed

Obama is expected to unveil a training program targeted toward those who have been unemployed six months or more.

Modeled after a program in Georgia, called George Work$, it would provide on-the-job training for the unemployed at no cost to companies. The government would help with costs such as transportation but proponents say it could save money in the budget if the workers are eventually hired and no longer need federal unemployment benefits.

House of Representatives Republican leaders have expressed interest in it.

But before it translates into new jobs, the training program would have to be set up and participants would need to work through it, meaning its impact would not be immediate. Sixty percent of the participants in Georgia Work$, which started in 2003, have found jobs, although reportedly the program has not dented the state's unemployment rate.

Help for struggling homeowners

The administration has been working for weeks on a mortgage relief program to meet the needs of troubled borrowers.

Obama's speech could include a nod to efforts to strengthen the housing market by allowing more homeowners to refinance at the current low interest rates, according to sources familiar with the matter.

The refinancing initiative under consideration would broaden eligibility for refinancing for homeowners whose mortgages are backed by Fannie Mae, Freddie Mac and the Federal Housing Administration.

Republicans would likely oppose plans for broader refinancings that involve taxpayer subsidies, either directly from the government or through Fannie Mae and Freddie Mac but the administration might be able to take executive action on some aspects of the plan.

Changes involving the mortgage giants would require approval by their regulator. The direct jobs impact from homeowner help is expected to be less significant than the potential improvement in consumer sentiment.

Any extra spending from reduced mortgage costs could lead to increased hiring, though that could take months and may not happen at all if households choose to save instead.

SOURCE: http://www.cnbc.com/id/44429067

Eric Cantor: Congress will find the money for earthquake aid

2011-08-26T13:47:00.000-07:00

August 24, 2011 3:59 PM By Lucy Madison, Tolleah Price

House Majority Leader Eric Cantor assured his constituents on Wednesday that Congress "will find the monies" to assist earthquake victims in Mineral, Virginia - but the Republican lawmaker noted that "those monies will be offset with appropriate savings or cost-cutting elsewhere."

Cantor and Virginia Governor Bob McDonnell, speaking together in a news conference, had previously toured Mineral to assess the amount of damage the city sustained in the wake of Tuesday's 5.8 magnitude earthquake. Mineral, which was at the epicenter of the quake, falls in Virginia's 7th district, which Cantor represents.

Cantor was in Israel when he heard news of the quake, but said he "quickly decided that I had to get home to ensure I could do anything I could."

When asked if the district would be receiving federal assistance from the government, McDonnell noted that the state had yet to do a thorough analysis determining "our own capacity through state and local resources and private and benevolent resources to be able to handle it," and had not yet determined whether it was "prudent" to request federal aid.

But, Cantor added, "the federal government does have a role in situations like this. When there's a disaster there's an appropriate federal role and we will find the monies. But we've had discussions about these things before and those monies will be offset with appropriate savings or cost-cutting elsewhere in order to meet the priority of the federal government's role in a situation like this."

Mineral residents experienced at least four aftershocks in the wake of Tuesday's earthquake, and more were expected to follow.

McDonnell described the damage to the district as "significant," but said it was a "blessing" there had been no reported deaths.

"The damage is more widespread and significant than the preliminary reports that we had gotten yesterday," McDonnell said. "The great blessing out of this seems to be that with an event of this proportion on the East Coast that there were virtually no significant injuries."

"This is obviously a time where the people of Virginia and hopefully beyond will need to rally together," he added. "The local government, the state government, the federal government, the churches the synagogues, the benevolent organizations to all find ways to be able to help these citizens in need."

Democratic Rep. Ed Markey of Massachusetts, the top Democrat in the House Natural Resources Committee and a senior member of the Energy and Commerce Committee, called for stronger nuclear safety standards in the wake of the quake, writing in a letter to the Nuclear Regulatory Commission that "the Virginia earthquake is now our local 911 call to stop delaying the implementation of stricter safety standards."

The Wall Street Journal reports that Central Virginia's North Anna power station issued an "alert" status Wednesday after losing power in the earthquake's aftermath.

Cantor said in Wednesday's press briefing that he and McDonnell were headed to the plant later that day.

"Obviously that's the first thing that crossed my mind when I heard the news," Cantor said, "Oh my goodness, what about the nuclear power plant? So I'm glad to hear and read the reports that what should have happened, happened."

He added: "As for the road forward, I'm here to work along with the governor and along with all the residents of the seventh district and the commonwealth to do what we do best in times of disaster: we pull together. We are a can-do people and we will get through this."

SOURCE: http://www.cbsnews.com/8301-503544_162-20096790-503544.html

Buffett's one-day win on Bank of America: $357 million

2011-08-26T13:39:00.000-07:00

by Maureen Farrell August 26, 2011: 12:41 PM ET

NEW YORK (CNNMoney) -- Warren Buffett earned $357 million in paper profits on Thursday simply on warrants related to his $5 billion equity infusion into Bank of America. Not bad for a day's work.

In exchange for the Buffett brand name and $5 billion, the Charlotte, N.C. financial institution granted Warren Buffett the option to buy up to 700 million of its shares any time in the next 10 years for $7.14. Yesterday those warrants would've reaped the Omaha investor a nine-figure profit.

Such paper profits could be ephemeral should Bank of America (BAC, Fortune 500)'s stock drop dramatically and stay there.

For now, with the bank's stock trading at $7.67 by midmorning Friday, investors are betting that yet again Buffett correctly spotted a long-term safe haven for his and his investors' fortunes.

During the financial crisis, Buffett famously refused to loan money to Lehman Brothers, yet gave Goldman Sachs (GS, Fortune 500) a similar stamp of approval with a $5 billion investment during the financial crisis.

His bets were right: Lehman folded, and the Goldman Sachs investment reportedly generated a $3.7 billion profit for Berkshire Hathaway (BRKA, Fortune 500).

"The question is whether Bank of America gave too many of those warrants away to get Warren Buffett to put the $5 billion preferred investment in the company. In the end that will be the question," says Marty Mosby, a managing director at Guggenheim Securities. The warrants give Buffett the right to purchase up to 6.5% of the company's equity.

As part of the Buffett investment, Bank of America will also pay the famed investor $300 million -- a 6% annual dividend or $821,000 a day -- for a decade, on his $5 billion in preferred shares.

Buffett's dealmaking skills came into play in crafting the warrants on Bank of America, not the dividend, investors say.

Compared to 10-year Treasuries, which currently yield 2.2% annually, investors say this dividend is commensurate with the riskiness of the stock and financial sector. By contrast, Goldman Sachs offered Buffett a 10% dividend on his 2008 investment.

When the investment was announced Thursday, investors were quickly giddy on the news, sending shares up as high as 26% by midmorning. Exuberance subsided, but the stock still closed up 9.4% at $7.65.

SOURCE: http://money.cnn.com/2011/08/26/markets/warren_buffett_bofa_profit/index.htm?iid=Popular

A Major Opportunity for Oil Bulls

2011-08-24T13:15:00.000-07:00

By LIAM DENNING

Sometimes, it's better to own the guy who makes stuff rather than the stuff itself. That's the case with oil right now.

Oil bulls bidding Brent crude back up on every rumor of a revival in Col. Moammar Gadhafi's fortunes are missing the bigger picture. U.S. economic data on everything from manufacturing to home sales remain weak—and gasoline demand is following suit. China is battling inflation and Europe is mired in its ongoing fiscal crisis.

Yet Brent crude, at about $110 a barrel, remains 15% above where it began the year. Moreover, Wall Street is forecasting an average price for 2011 of about $106 for the year, according to FactSet Research Systems. Given prices year to date, that implies Brent needs to average just under $95 for the rest of the year, 14% below today's level.

Brent prices clearly don't discount a recession. If they did, they would be closer to, or below, the marginal cost of supply, which Sanford C. Bernstein pegs at $80 to $90 per barrel. Perhaps they reflect hopes of another round of quantitative easing from the Federal Reserve. But a resort to QE3 would signify that the underlying economy—you know, the place where oil actually gets burned—is very weak.

Given the risks of a correction in oil prices, better value can be found in the stocks of major oil producers. They have fallen even more sharply in the recent selloff, with Exxon Mobil off about 10% since the end of June compared with Brent's fall of less than 4%. Remarkably, Exxon, Italy's Eni and France's Total are actually valued lower now than they were at the end of 2008, when the world really did look like it was ending. Since then, Brent has more than doubled.

The stocks of Europe's major oil companies are priced for a long-term Brent price of $75, according to Citi. That provides a cushion against further declines in the commodities markets. In addition, they offer investors high cash payouts in the form of dividend yields and share buybacks that commodities can't compete with. On average, Exxon, Chevron, ConocoPhillips, Royal Dutch Shell, BP, Eni and Total yield 5.5% on dividends and 9.3% including buybacks, according to Credit Suisse.

What's more, given strong balance sheets in general—Exxon now scores higher than Uncle Sam, at least in the eyes of Standard & Poor's—it would take a prolonged recession with Brent stuck at $70 or below for a year to endanger payouts, reckons brokerage Raymond James.

The cheapest stocks are Eni and Total, in part because of their Italian and French provenance, where sovereign-debt worries reign. Shell, meanwhile, is just exiting from a multiyear period of spending that will fuel output growth of about 3% per year to 2014, according to Credit Suisse. Yet its stock commands less than seven times 2012 earnings and yields 5.3%. That looks safer than relying on further explosions in the desert.

SOURCE: http://online.wsj.com/article/SB10001424053111904787404576528300279054730.html?mod=WSJ_hpp_MIDDLE_Video_Top

'Made in China' makes money for the U.S.A.

2011-08-22T15:33:00.000-07:00

August 12, 2011: 5:00 AM ET By Sheridan Prasso, contributor

If you don't want your dollars going toward Chinese-made products, don't sweat it -- most of the cash you spend on them goes to U.S. companies and workers.

FORTUNE -- Worried about buying a $70 pair of sneakers that say "Made in China" this back-to-school season because you'd rather spend your dollars on "Made in U.S.A." products instead? Worry not, according to a new study.

More than half the amount you spend on products made in China actually stays here -- going to American companies, workers, marketers, retailers, and transport providers. The amount is least 55 cents per each $1 spent, says a report from the Federal Reserve Bank of San Francisco. So for that $70 pair of sneakers, $38.50 of it boosts bottom lines here in the U.S.

And despite what you may conclude from shopping at Wal-Mart (WMT) or other large stores -- or hearing big, scary figures about the trade deficit with China -- imports from China make up just a very small portion of our total economy: just 2.5% of gross domestic product in 2010. Overall, products from around the world accounted for only 16% of our GDP last year. "The vast majority of goods and services sold in the United States is produced here," according to FRBSF report authors Galina Hale and Bart Hobijn. The exceptions are furniture and household items, electronic goods, and clothing and shoes. A third of U.S. consumer purchases for clothing and shoes in 2010 carried a "Made in China" label. For furniture, it was one fifth.

But it's services that make up the overwhelming majority of the U.S. economy, according to the data, and no services at all came from China -- just manufactured products. 88.5% of U.S. consumer spending is for products and services originating here, the report says. "This is largely because services, which make up about two-thirds of spending, are produced locally," according to Hale and Hobjin.

The authors also point out that a large number of component parts -- like semiconductor chips and designs used in the iPhone -- originate in the U.S. They point to a 2009 Asian Development Bank Institute study reporting that it cost about $179 to produce an iPhone in China. The phone is then sold here for about $500. Thus, $179 of the U.S. retail cost consisted of Chinese imported content. But only $6.50 actually went to cover assembly costs in China. The other $172.50 was for parts produced in other countries, including $10.75 for parts made in the U.S.

The reason for the new FRBSF report is the red flag raised by China's growing inflation. The latest numbers from Beijing show a 6.5% annual rise across the country in July, up from 6.4% in June and breaking a three-year record. But with such low levels of Chinese content in products like iPhones, the report's authors conclude that recent increases in labor costs and inflation in China are not likely to translate into broad inflationary pressures in the U.S. "This suggests that Chinese inflation will have little direct effect on U.S. consumer prices," Hale and Hobjin say. Given the state of the U.S. economy these days, consumers can take that data and breathe a small sigh of relief.

SOURCE: http://finance.fortune.cnn.com/2011/08/12/made-in-china-makes-money-for-the-u-s-a/

Treasures in the Trash: 8 Stocks That Were Oversold

2011-08-19T17:13:00.000-07:00

Published: Friday, 19 Aug 2011 | 2:32 PM ET

By: Lee Brodie

Investors get your shopping lists ready; the The Fast Money pros think it's about time to hit the buy button.

And yes, they're aware of the market swings - they know August has been the most violent month for stocks since the collapse of Lehman in 2008.

But the gang says some stocks have just gotten too cheap to pass up, even amid all the market the madness.What are they buying, right now? How are the pros positioning? Following you'll find the Fast Money treasures in the trash. That is, 8 stocks that appear oversold.

Instant Insights with the Fast Money traders

Pete Najarian sees opportunity in Starbucks [SBUX 35.10 0.349 (+1%)] and pulled the trigger at $34. Fast Money’s Pit Boss likes the same store sales growth as well as margins. And even with rivals lowering coffee prices, he thinks Starbucks remains attractive.

Najarian also likes the SLV [SLV 41.68 2.02 (+5.09%)]. He thinks the ETF that tracks silver found a base right around $37, which is a key technical level. “Ever since then it’s bounced and moved to the upside,” he says. Also Najarian likes the options action. “The SLV August 43 calls – a lot of activity.” Najarian thinks these influences all signal upside.

Trader Patty Edwards suggests a retailer. “I like Nordstrom [JWN 37.45 -0.85 (-2.22%)],” she tells us and she added to her position on the pullback. "It's down 15% just since the 15th of this month, that's too much." Edwards thinks the management team at the department store is reason enough for a long position. And if you’re worried about the high-end, she says don’t be. “If they thought the high-end was cracking they would have warned.”

Edwards also suggests a long position at Walter Energy [WLT 74.15 -1.05 (-1.4%)]. “It’s 45% off the highs – the world has not slowed down that much,” she says.

Trader Steve Cortes reaveals that he added to his position in Walmart [WMT 52.30 0.51 (+0.98%) ] during the sell-off. Fast Money’s El Capitan likes the recent price action, “it’s holding above $50,” he says. “And it’s a North America story – the company is relatively insulated from troubles in Europe,” he says. Cortes also thinks declining prices at the pump will give Walmart shoppers a little more cash to spend for back-to-school.

And Cortes also has another idea, “if you’re looking for a tech trade look at Intel [INTC 19.19 -0.58 (-2.93%)]. Unlike most tech names it provides a fantastic dividend yield.”

The concept of yield is something trader Dan Dicker also likes. “They’re boring but I’m moving into MLPs,” he says. The names he suggests include Enterprise [EPD 39.45 -1.28 (-3.14%)], and Kinder Morgan [KMP 66.25 -1.01 (-1.5%)].

SOURCE: http://www.cnbc.com/id/44204231

Yoshikami: Computers Are Killing Us Investors

2011-08-19T14:06:00.000-07:00

Published: Friday, 19 Aug 2011 | 10:29 AM ET

Michael Yoshikami
CEO, Founder & Chairman YCMNET’s Investment Committee

It's a roller coaster ride. Markets up and down with no rationale that easily explains the fluctuation. Yes, the US is in a stumbling recovery and Europe is a major problem. But the sheer magnitude of the volatility has left many investors shaking their head and seeking to abandon investing in any market related assets.

So what's causing this volatility? It's very simple really; technology. Information and the ability to react at the blink of an eye has changed the game. And for individual shorter term investors, it's now an unfair playing field.

In the good old days when paper reports and discussions drove market performance, there was time to digest and ponder investment decisions. That is no longer the case; technology has changed the game. Just look at trading in companies like HP [HPQ 23.60 -5.91 (-20.03%)] and Citigroup [C 26.77 -1.21 (-4.32%)]. These companies have fluctuated up and down based on fundamentals but volumes suggest that computerized trading is driving the beta on these stocks.

The internet has created a more level playing field but has resulted in the ability to react instantaneously.

And not only individual investors are prone to rapid movements based on released data; institutional investors are as well.

With the advent of supercomputers, there are banks of hard drives whirring away in the background attempting to capture a price anomaly on a second by second basis. Literally thousands of trades can occur in a one second time frame and, when you have many institutions and computerized investors employing a similar technique, the whipsaw in the market can be staggering.

One might think that trading fluctuation is merely a reflection of fundamentals; that is simply not true. Yes, fundamental data points and news stories do significantly drive markets, but the intensity of the movement is multiplied exponentially by fast acting computer programming. So what might have been a 75 point drop in an equity index can easily turn into a 300 point drop if thousands of computers simultaneously hit the panic button based on a short-term technical indicator. That's what we see happening today.

Many investors sold in 2008 when the economy was in dire straits and computer trading exacerbated the situation. "I simply cannot take the volatility" many exclaimed and that is completely understandable. Of course, what they did not recognize was that the volatility was directly related to computerized trading. Just as quickly, when sentiment shifted, the other direction computer programming took over and we saw a historic rally upward which many investors missed. So, in an era when volatility is at high level, one has to make a determination about time horizon and how much short-term anguish can be endured when the computers kick into overdrive9

Banks of computers or driving investors out of the market and it's simply not right. I have been a proponent of the perspective that the playing field must be leveled and individual investors without millions of dollars to pour into computerized trading, should be given the same opportunity for success as big institutions. But while I believe this is important, I doubt significant action will be taken.

I'll let you draw your own conclusions on why that might be the case.

In the meantime, time horizon assessment is what's key. If one is a short-term investor trying to compete with technology far superior to anything mere mortals can afford, one should really rethink the investment strategy employed. The reality is it's a new world for investing and understanding the landscape is critical because the environment has changed permanently.

SOURCE: http://www.cnbc.com/id/44203122

PIMCO: Treasury market reflects likelihood of recession

2011-08-19T11:53:00.000-07:00

On Friday August 19, 2011, 1:57 pm

NEW YORK (Reuters) - Bill Gross, manager of the world's largest bond fund, said on Friday the rally in Treasury yields to 60-year lows reflect a high probability of recession in the United States.

Gross, the co-chief investment officer at Pacific Investment Management Co., which oversees $1.2 trillion, also told Reuters Insider television it is apparent that policy options are limited.

"It is increasingly apparent to us that policy options are limited and that economic growth is slowing down," said Gross said. "There's no doubt that growth from the standpoint of employment or unemployment and growth from the standpoint of corporate profits is definitely a risk -- whether or not we see a positive 1 percent real GDP number I think is besides the point."

Gross said low Treasury yields are flashing recessionary conditions.

"They certainly reflect, in terms of their yields, not only a potential for a recession but the almost high probability of recession and the result of lowering inflation."

For more from the Interview, please click on http://insider.thomsonreuters.com/

(Reporting by Daniel Burns, Burton Frierson and Jennifer Ablan; Editing by Neil Stempleman)

SOURCE: http://finance.yahoo.com/news/PIMCOs-Gross-Policy-options-rb-3846000443.html?x=0&sec=topStories&pos=4&asset=&ccode=&sec=topStories&pos=4&asset=&ccode=

Gold, Oil & the Dollar: Correlation Breakdown Is Concerning Says Yamada

2011-08-17T13:57:00.000-07:00

Over her multi-decade legendary career, technical analyst Louise Yamada has seen all kinds of markets and probably analyzed more than a million charts. For Macke to refer to her as a "national treasure" speaks volumes about the quality and value of her work. It is also precisely why I take notice when I hear Louise call anything "amazing."

"What's amazing is everybody talks about the correlation between dollar direction and commodities, but the dollar has done absolutely nothing, flat for months, yet gold went up and oil went down, so there was no correlation," says Yamada. This means "the dollar is starting to lose that correlation perhaps because the perception of the dollar as the reserve currency is starting to drift away."

As much as that supports Yamada's belief that the dollar is in structural decline, the weak dollar/weak oil phenomenon could also be an indictment of a weak economy. For further proof of that she points to interest rates which "had seen higher lows in 2010 and 2011 and now those lows are being breached."

For Yamada this suggests we could be looking at a more serious global slowdown than we think. "What's more disconcerting to me now is...evidence at the long end, where interest rates were starting to pick up, is now dissolving and that I think is problematic in the sense that it's telling us that there is more fear and concern out there."

Geez Louise, you're bumming me out. But if she is right, expect crude oil to "stay in a low trading range of $67 to $90" and gold to make its way towards $2000 an ounce.

"Gold is in a structural bull market. It has maintained its 2009 uptrend on every pull back that has taken place and now you've had a rather accelerated advance to $1800," says Yamada.

Perhaps to assuage Macke -who confessed to buying back into gold after selling it in a move only he could describe as having all "the discipline and restraint of Charlie Sheen at the Adult Video Awards"- Yamada says since 2009 we have seen a series of 20% gains followed by consolidation and "would use any weakness to continue to add to positions." She "absolutely loves gold!"

Add it all up and this Friend of Breakout says it encourages her to stay on the sidelines. "It suggests there's confusion, there's not a definitive trend, and if there's not a trend you shouldn't be playing."

Are you in or out of commodities? Let us know in the comment section below or via email: breakoutcrew@yahoo.com

SOURCE: http://finance.yahoo.com/blogs/breakout/gold-oil-dollar-correlation-breakdown-concerning-says-yamada-133101970.html%20?sec=topStories&pos=9&asset=&ccode=

Paddypower odds BO 4/6, RP 7/2, MR 5/1

2011-08-16T15:54:00.000-07:00

College: Expensive, but a smart choice

2011-08-16T15:49:00.000-07:00

It's expensive and no job is guaranteed at the end, but research shows that college could easily be the best investment you ever make.

By Michael Greenstone and Adam Looney

August 15, 2011

The roughly 3 million Americans who graduated from high school last spring have had to grapple with a big decision: whether to continue with their educations this fall. In today's economic climate, a growing number of families are questioning the value of higher education. Will an investment in college pay off? Or will it simply be a high-cost ticket to the ranks of the unemployed?

We've just completed a study that draws on a variety of data to help answer those questions, and our research suggests that college is not only worth it; it's probably going to be the best investment a person makes in a lifetime. Even though the cost of tuition, room, board and lost wages is substantial, and even though the job market remains tough even for college graduates, the evidence is unequivocal: Those with college degrees, on average, earn far more than those without them.

First, we looked at what we call the Class of the Great Recession — those young adults who graduated from college during the last three years. The results surprised us. We've all seen the headlines about how difficult it is for new graduates to find work in these tough economic times. But almost 90% of these young college graduates were employed in 2010, compared with only 64% of their peers who did not attend college but went straight on to look for work. Even more astounding, the college graduates are making, on average, almost double the annual earnings of those with only a high school diploma. And this advantage is likely to stick with them over a lifetime of work. For example, at age 50 a college graduate earns about $46,500 more per year than the average person with only a high school diploma.

A second way we assessed the value of higher education was to compare the rate of return for the investment in a college degree against other possible investment vehicles. By any measure, a college degree is a big investment that requires a lot of upfront time and money. When you add up the costs of tuition, books and fees, as well as the loss of earnings from going to school rather than working, the average cost of a four-year degree is about $102,000. Of course, this is an average; some schools cost far more, while others cost less.

Let's assume that you're a high school graduate and you have $102,000 to invest in your future. Is college your best bet? Or would you be better off putting the money into an alternative investment, like stocks or bonds, and earning the salary of a typical high school graduate over your lifetime?

By any financial measure, the investment in a college degree is the winning choice, with a rate of return of a whopping 15.2% a year on the $102,000 investment for those who earn the average salary for college graduates. This is more than double the average rate of return in the stock market during the last 60 years (6.8%), and more than five times the return to investments in corporate bonds (2.9%), gold (2.3%) long-term government bonds (2.2%) or housing (0.4%).

This high rate of return translates into large differences in earnings. Over a lifetime, the average college graduate earns roughly $570,000 more than the average person with only a high school diploma. In addition, statistics show that college graduates on average live longer lives than high school graduates and tend to have higher job satisfaction.

Some high school students may be reluctant to choose the college path because they believe their experiences will be different and these benefits won't apply to them. But economic research concludes that many more students would gain from college than currently opt to attend.

We live in difficult economic times filled with challenging financial trade-offs. There is no guarantee with regard to any investment, but the evidence on education is clear: The more education you obtain, the better off your job prospects and future earnings.

Michael Greenstone directs the Hamilton Project at the Brookings Institution and is a professor of environmental economics at the Massachusetts Institute of Technology. Adam Looney is policy director of the Hamilton Project and a senior fellow at the Brookings Institution. More on their research can be found at brookings.edu.

SOURCE: http://www.latimes.com/news/opinion/commentary/la-oe-looney-greenstone-is-college-wo20110815,0,2201593.story

20 Largest Point Gains in Dow's History

2011-08-11T15:22:00.000-07:00

Published August 11, 2011 FOXBusiness

It's officially an historic week for the Dow: for the first time ever the index has seen four straight sessions with moves of more than 400 points. On Thursday, it was a rally. In fact, it was the 11th-largest gain in the history of the Dow.

Rank	Trade Date	Close	Net Change	Percentage Change
1	10-13-2008	9387.61	936.42	11.08%
2	10-28-2008	9065.12	889.35	10.88%
3	11-13-2008	8835.25	552.60	6.67%
4	03-16-2000	10630.61	499.19	4.93%
5	03-23-2009	7775.86	497.48	6.84%
6	11-21-2008	8046.42	494.14	6.54%
7	07-24-2002	8191.29	488.95	6.35%
8	09-30-2008	10850.66	485.21	4.68%
9	07-29-2002	8711.88	447.48	5.41%
10	08-09-2011	11239.77	429.92	3.98%
11	08-11-2011	11143.31	423.37	3.95%
12	03-18-2008	12392.66	420.40	3.51%
13	03-11-2008	12156.81	416.66	3.55%
14	10-20-2008	9265.43	413.21	4.67%
15	09-18-2008	11019.69	410.03	3.86%
16	04-05-2001	9918.05	402.63	4.23%
17	10-16-2008	8979.26	401.35	4.68%
18	04-18-2001	10615.83	399.10	3.91%
19	11-24-2008	8443.39	396.96	4.93%
20	04-01-2008	12654.36	391.47	3.19%

SOUREC: http://www.foxbusiness.com/markets/2011/08/11/20-largest-point-gains-in-dows-history/

Historic Returns Following a Market Selloff

2011-08-10T16:12:00.000-07:00

Published: Tuesday, 9 Aug 2011 | 9:56 AM ET

By: Robert Hum, Giovanny Moreano

Monday’s 6.66 percent drop for the S&P 500 [.SPX 1120.76 -51.77 (-4.42%) was the index’s biggest drop since December 1, 2008. In fact, not a single stock in the 500-stock index managed a gain by the end of the day.

The plunge was just the 16th time since 1950 that the S&P 500 has dropped more than 6 percent in a single day. But what has happened after such a big one-day drop? There might be some hope for investors after such a large selloff – at least in the immediate near-term:

During its 15 prior occasions, the S&P has averaged a gain of 2.8 percent and has fallen just twice on the day after its big single-day drop of 6 percent or more
The S&P is up 80 percent of the time and has averaged a gain of 5.4 percent a week after such a drop
However, one-month after a single-day drop of at least 6 percent, gains are much more muted – the S&P has managed a gain just two-thirds of the time, posting a smaller average gain of 2.4 percent

>> Click Here to See the Biggest Market Drops in History

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SOURCE: http://www.cnbc.com/id/44073392

Was S&P downgrade an act of revenge?

2011-08-09T15:30:00.000-07:00

You might think Standard & Poor’s has something against the U.S. government, the way the ratings firm treated the nation's credit rating on Friday.

In fact, it does.

It's hard to view the monumental ratings downgrade in context without understanding the long-running feud between the government and ratings agencies. In April, Sen. Carl Levin, D-Mich., issued a scathing 650-page report contending that malfeasance at ratings bureaus like Standard & Poor’s was as much to blame for the housing bubble as any bank, and included a series of smoking gun e-mails that suggested that the firms knew they were profiting from unethical behavior. A little-known section of the Dodd-Frank financial reform bill also hits the rating agencies with new limits destined to undercut their lucrative business; the Securities and Exchange Commission is discussing right now just how to implement the new rules. The public comment period on new rules ended Monday.

Is the timing a coincidence? Or could the ratings downgrade from Standard & Poor’s be viewed as a shot back at a government that's been taking plenty of shots at the ratings industry lately?

To be sure, no one needs Standard & Poor’s to say the U.S. government's coffers are in sorry shape. But this feud over the lucrative and arcane business of granting credit ratings shouldn’t be ignored.

For years, federal agencies and Congress have made attempts to reform the credit ratings business, which on its face is a bit absurd -- part accountancy, part cheerleader, part judge and jury of the financial system. As things stand, firms that want to borrow money from the bond market seek out a seal of approval from companies like S&P, Moody's and Fitch, and pay handsomely for it. The firms say they isolate fee collection from ratings judgment, but the business model is the very definition of a conflict of interest -- and the firms' actions during the height of the housing bubble call into question their ability to keep the ratings business free of profit-driven influence.

"It's like one of the parties in court paying the judge's salary," Levin said recently.

This crazy system hasn’t always been in place. People who really needed accurate ratings – investors – once paid ratings agencies for them, a so-called subscriber model. The 1929 market crash showed the ratings weren’t worth the paper they were printed on, however, and ratings agencies went searching for a different model. By the 1970s, they’d settled on a more stable business model, called “issuer-pays.” The market might go up and down, as does the quality of the ratings advice, but there is an endless stream of firms who want to borrow money and want new bonds rated.

The challenges of such a model are obvious, however, and were laid bare by the housing bubble.

Levin's report includes testimony from an endless stream of former employees who say they felt pressure to grant top ratings to new bond issues, lest they lose deals to competitors. In fact, the housing bubble was very, very good for the ratings agencies -- Standard & Poor’s fees from mortgage-related bond issues quadrupled from $64 million to $265 million between 2002 and 2006, the report found.

Internal e-mails from the various firms show that warning bells were repeatedly ignored. A 2006 email from an S&P employee cited in the report said the rating agencies "have all developed a kind of Stockholm syndrome," held captive by banks. Another e-mail cites an employee openly fretting about the agencies facing their "Nixon moment," when the housing bubble finally burst.

The problem hardly began with the overheated housing market, however.

"The absence of timely downgrades in these cases was a product of an industry that was beset by conflicts of interest and a lack of competition. Ultimately, this compromised the integrity of the market and investors paid the price," a prominent U.S. senator stated nearly a last decade ago. That senator was prominent Republican Richard Shelby of Alabama, now one of the most skeptical voices in Congress about the current round of financial reform. Shelby uttered those words after ratings agencies were cited as one of the causes of the Enron debacle in 2001 -- and as Republican President George Bush signed into law the Credit Rating Agency Reform Act in 2006. It was designed to prevent another Enron -- or at least to prevent ratings agencies from causing one.

At the time, lawmakers blamed the virtual duopoly that Moody's and S&P held on the ratings market, and the law made it easier for competitors to join the industry.

That didn't work. Instead, newcomers simply accelerated the "race to the bottom," and made a nefarious strategy called "ratings shopping" even easier. If a bank wanted to issue a mortgage-backed security, it could shop it to various agencies and pick whichever firm offered the highest rating. The temptation for competitive forces to overwhelm good accounting was enormous.

When the day of reckoning came for the housing bubble, the ratings agencies pulled the Band-Aid off the wound with one quick, brutal yank. In July 2007, S&P downgraded 1,100 mortgage related securities, an unprecedented volume. The massive downgrades were immediately preceded by equally massive new issues, however. In the first week of the same month, S&P issued 1,500 new positive residential mortgage-backed securities ratings, and Moody's did much the same, raising the obvious possibility that the right hand didn't know what the left hand was doing -- or worse.

"(It) raises serious questions about whether S&P and Moody’s quickly pushed these ratings through to avoid losing revenues before the mass downgrades began," the Levin report said.

In response to the report back in April, S&P rejected the assertion that the ratings agency helped cause the bubble burst.

"We regret that, like many others, we did not foresee the speed and extent of the housing downturn, which was the steepest decline since the Great Depression," spokeswoman Catherine Mathis told Bloomberg at the time.

S&P spokesman David Wargin flat-out denied to msnbc.com that the current regulation process had anything to do with the firm's assessment of the U.S. government's debt-worthy-ness.

"There's absolutely no connection between Dodd Frank regulation and any analytical decision we have made," he said.

It might be hard to win over critics who say the ratings agencies have a history of allowing outside factors to influence ratings decisions, however.

The Dodd-Frank financial reform bill includes a series of measures that once again attempt to curtail the conflict of interest that is pervasive in the ratings world, which would almost certainly cut severely into the easy money the ratings agencies enjoy. For the first time, the SEC can actually decertify a ratings agency for allowing profit motives to influence ratings, a fatal stroke that would cut it off from participating in government-related investments. It also strips the agencies of their long-treasured legal immunity from making mistakes: Before Dodd-Frank, it was essentially impossible for investors to sue over blatant ratings errors, like that ones that were common during the housing bubble. Now, ratings firms can be found liable if an investor proves they were reckless or knew the ratings were inaccurate.

But regulating the credit agencies has proven to be a near-impossible task. Not only are they intertwined in almost every corner of the market, they are intertwined with government agencies, too. Most state pension funds, for example, require that their managers only invest in funds with high ratings, which acts as a de facto endorsement of the agencies' work.

And the agencies have such a strong role in the markets that they can bully regulators into backing off.

In July 2010, with the increased liability provision of Dodd-Frank set to kick in, ratings agencies scored a victory by telling bond issuers they could no longer include the ratings on marketing materials. Because SEC rules require credit ratings to appear, the ratings agencies effectively created a Catch-22, threatening to shut down the entire asset-backed bond market. Regulators, faced with that potential calamity, backed off, and said issuers could temporarily issue bonds without the ratings. In December, the SEC made the change permanent, "effectively exempting companies from part of the U.S. Dodd-Frank Financial Rreform Act," according to a Bloomberg News report at the time.

So did S&P issue a downgrade to send a "back off" message to the U.S. government?

There's no evidence of it, and even ratings agency critic Barbara Roper said she was skeptical of such a quid-pro-quo conspiracy.

“They have used bullying tactics in other areas … but I don’t see how they’ve strengthened their hand by angering the very administration officials who are making those (regulatory) decisions about them,” said Roper, director of investor protection for the Consumer Federation of America. “They have no friends in Congress.”

On the other hand, it's undeniable that there's a macro-level conflict of interest at work when the very industry Congress is trying to reform unleashes its biggest arrow right at the heart of the financial system.

“It's clearly a problem that (the ratings agencies) have this much influence on the markets, including the power to undermine faith in the government trying to regulate them,” she said.

And whatever the motivation this time, Standard & Poor’s has clearly demonstrated its ability to move markets – and maintains more bullets in its chamber. Another downgrade, which the agency said was possible, would take U.S. debt out of the critical “top 2” tiers of ratings, which would prevent a host of pension funds and money market mutual funds from holding U.S. Treasuries.

“It’s not like they don’t still have a gun to the administration’s head,” Roper said. “They could be saying, ‘How’d you like that? Want to see it again?’ “

Follow Bob Sullivan on Facebook or Twitter.

SOURCE: http://redtape.msnbc.msn.com/_news/2011/08/09/7321296-was-sp-downgrade-an-act-of-revenge

Odds to win the 2012 Super Bowl

2011-08-03T12:26:00.000-07:00

Team	Open	5/1/11	6/1/11	7/1/11	8/1/11
Arizona Cardinals	100/1	75/1	75/1	75/1	65/1
Atlanta Falcons	9/1	16/1	16/1	15/1	14/1
Baltimore Ravens	10/1	14/1	14/1	15/1	16/1
Buffalo Bills	125/1	100/1	100/1	100/1	150/1
Carolina Panthers	125/1	125/1	100/1	100/1	150/1
Chicago Bears	15/1	25/1	28/1	30/1	28/1
Cincinnati Bengals	100/1	60/1	60/1	75/1	100/1
Cleveland Browns	100/1	65/1	65/1	75/1	100/1
Dallas Cowboys	10/1	16/1	16/1	16/1	16/1
Denver Broncos	125/1	60/1	60/1	65/1	80/1
Detroit Lions	60/1	35/1	35/1	35/1	30/1
Green Bay Packers	7/1	7/1	7/1	7/1	7/1
Houston Texans	30/1	35/1	35/1	30/1	25/1
Indianapolis Colts	9/1	14/1	16/1	18/1	16/1
JAX Jaguars	40/1	65/1	65/1	75/1	75/1
KC Chiefs	25/1	35/1	35/1	35/1	40/1
Miami Dolphins	40/1	50/1	50/1	50/1	50/1
Minnesota Vikings	60/1	35/1	35/1	25/1	30/1
New England Patriots	7/1	7/1	7/1	7/1	13/2
New Orleans Saints	9/1	14/1	16/1	16/1	16/1
New York Giants	15/1	18/1	18/1	18/1	22/1
New York Jets	8/1	14/1	14/1	14/1	12/1
Oakland Raiders	75/1	40/1	40/1	50/1	55/1
Philadelphia Eagles	12/1	16/1	16/1	15/1	9/1
Pittsburgh Steelers	8/1	11/1	11/1	12/1	14/1
SD Chargers	9/1	12/1	12/1	11/1	11/1
SF 49ers	40/1	40/1	40/1	35/1	45/1
Seattle Seahawks	60/1	80/1	80/1	75/1	80/1
STL Rams	50/1	40/1	40/1	45/1	40/1
TB Bucs	50/1	30/1	30/1	30/1	30/1
Tennessee Titans	60/1	50/1	50/1	55/1	70/1
Washington Redskins	40/1	50/1	501	55/1	100/1

SOURCE: http://www.betvega.com/super-bowl-odds/

2011-08-01T12:18:00.000-07:00

Are the CBO's U.S. Debt Burden Projections Overly Optimistic?

January 16, 2011

The Congressional Budget Office is estimating that annual interest payments on federal debt will more than double over the next decade to $778 billion.

Put another way, the U.S. will soon be paying federal debt interest (much of it to Asian and Middle East creditors) equal to the U.S.'s annual defense budget.

What assumptions lay behind the CBO's estimates? From the WSJ:

In 2010, it (the U.S. federal government) paid an average of about 0.1% interest on 3-month Treasury bills, and 3% on ten-year notes. Total net payments amounted to $197 billion, or 1.4% of annual economic output. That’s a bit more than what the government spent on unemployment insurance.
Low interest rates, however, won’t last forever — assuming the U.S. economy doesn’t succumb to long-term, Japanese-style stagnation. The CBO estimates that interest rates on 3-month bills and 10-year notes will reach 5.0% and 5.9%, respectively, by 2020. That, together with a rapidly rising debt load, would cause annual net interest payments to more than double by 2020 — to $778 billion, or a record 3.4% of GDP.

As bad as that sounds, I believe the CBO could be painting an overly optimistic scenario.

Whether the U.S. will actually be able to borrow long-term at a (historically) relatively low 5-6% interest rate in a decade's time is pure speculation by the CBO.

I'd also like to better understand why the CBO is projecting that U.S. interest rates across the yield curve will dramatically flatten? Right now the U.S. pays an interest rate of roughly 0.15% on 3-month borrowings, while the 10-year note is yielding 3.32%, making the spread between current short-term and longer-term borrowing rates a little over a 3%. That's a pretty significant (2%+) difference to the pretty flat 0.9% short-term/long-term spread the CBO is projecting for 2020.

If the U.S. continues its current debt trajectory is it reasonable to assume that it will be able to borrow long-term at a mere couple percentage points higher than today's levels?

Professor Barry Eichengreen is predicting that emerging financial powerhouses, such as China, will be able to offer a reserve currency alternative to the U.S. dollar by 2020. The U.S. is undoubtedly realizing lower interest rates right now due to the European sovereign debt crisis, and the lack of any real alternatives to the U.S. dollar as the world's primary reserve currency and the unparalleled liquidity of the U.S. treasuries market. What will happen when (not if) the situation changes?

Interest rates can certainly rise faster and/or higher than the CBO is projecting. A recalculation by the bond market of the U.S.'s credit worthiness can occur suddenly, as we saw last year with Greece. Professor Niall Ferguson for one is predicting that a U.S. fiscal crisis, similar to the one experienced by Greece last year, will occur within 2-4 years.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

SOURCE: http://seekingalpha.com/article/246821-are-the-cbo-s-u-s-debt-burden-projections-overly-optimistic

2011-07-27T13:52:00.000-07:00

Funds at Warren Buffett's Berkshire Hathaway were valued at $53.6 billion as of March 31, 2011.

During the quarter Warren Buffett had 26 total positions. Here are the holdings as of March 31.

SOURCE: http://stockpickr.com/pro/portfolio/warren-buffett//

Symbol / Co	Last Price	Change	Analysis
KO The Coca-Cola Co	$68.69	-0.50 (-0.72%)	24.75% of portfolio. 8.72% held. 200 million shares. Position unchanged.
WFC Wells Fargo & Co	$28.58	-0.39 (-1.35%)	20.27% of portfolio. 6.5% held. 342.62 million shares. Position unchanged.
AXP American Express Co	$50.48	-1.09 (-2.11%)	12.79% of portfolio. 12.61% held. 151.61 million shares. Position unchanged.
PG Procter & Gamble ...	$62.20	-0.89 (-1.41%)	8.82% of portfolio. 2.74% held. 76.77 million shares. Position unchanged.
KFT Kraft Foods Inc	$34.53	-0.38 (-1.09%)	6.16% of portfolio. 6.02% held. 105.21 million shares. Position unchanged.
JNJ Johnson & Johnson	$65.23	-0.69 (-1.05%)	4.71% of portfolio. 1.56% held. 42.62 million shares. Position unchanged.
COP ConocoPhillips	$73.13	-0.48 (-0.65%)	4.34% of portfolio. 2.04% held. 29.1 million shares. Position changed by -8,000 shares.
WSC Wesco Financial C...	$384.50	-0.41 (-0.11%)	4.14% of portfolio. 80.1% held 5.7 million shares. Position unchanged.
WMT Wal-Mart Stores Inc.	$53.25	-0.34 (-0.63%)	3.79% of portfolio. 1.12% held. 39.04 million shares. Position unchanged.
USB U.S. Bancorp	$26.22	-0.52 (-1.94%)	3.4% of portfolio. 3.59% held. 69.04 million shares. Position unchanged.
MCO Moody's Corporation	$35.45	-1.97 (-5.26%)	1.79% of portfolio. 12.39% held. 28.42 million shares. Position unchanged.
WPO Washington Post C...	$419.82	-6.98 (-1.64%)	1.4% of portfolio. 25.12% held. 1.73 million shares. Position unchanged.
MTB M&T Bank Corp	$87.14	-1.11 (-1.26%)	0.89% of portfolio. 4.46% held. 5.36 million shares. Position unchanged.
COST Costco Wholesale ...	$78.39	-2.16 (-2.68%)	0.6% of portfolio. 1% held. 4.33 million shares. Position unchanged.
USG USG Corp	$11.49	-0.58 (-4.81%)	0.53% of portfolio. 16.6% held. 17.07 million shares. Position unchanged.
TMK Torchmark Corpora...	$40.19	-0.96 (-2.33%)	0.35% of portfolio. 3.64% held. 2.82 million shares. Position unchanged.
GE General Electric Co	$18.11	-0.45 (-2.42%)	0.29% of portfolio. 0.07% held. 7.78 million shares. Position unchanged.
SNY Sanofi	$38.22	-1.52 (-3.82%)	0.27% of portfolio. 0.16% held. 4.06 million shares. Position unchanged.
UPS United Parcel Ser...	$70.21	-1.38 (-1.93%)	0.2% of portfolio. 0.2% held. 1.43 million shares. Position unchanged.
GSK GlaxoSmithKline PLC	$44.30	-0.59 (-1.31%)	0.11% of portfolio. 0.06% held. 1.51 million shares. Position unchanged.
MA MasterCard Incorp...	$303.09	-9.67 (-3.09%)	0.1% of portfolio. 0.18% held. 216,000 shares. Position new.
BK Bank of New York ...	$25.10	-0.61 (-2.37%)	0.1% of portfolio. -1.4% held. 1.79 million shares. Position unchanged.
XOM Exxon Mobil Corpo...	$83.31	-1.06 (-1.26%)	0.07% of portfolio. 0.01% held. 421,800 shares. Position unchanged.
IR Ingersoll-Rand PLC	$37.62	-1.98 (-5.00%)	0.06% of portfolio. 0.19% held. 636,600 shares. Position unchanged.
GCI Gannett Co Inc	$13.11	-0.50 (-3.67%)	0.05% of portfolio. 0.73% held. 1.74 million shares. Position unchanged.
CDCO Comdisco Holding ...	$6.50	1.30 (25.00%)	0.03% of portfolio. 38.18% held. 1.54 million shares. Position unchanged.

2011-07-27T13:22:00.000-07:00

Gold Short ETFs a Solid Contrarian Debt Ceiling Bet

By Kevin Baker

NEW YORK (TheStreet Ratings) -- With the spot price of gold topping $1,600 an ounce, the two main exchange-traded funds tracking gold are riding high.

The iShares Gold Trust (IAU _) and SPDR Gold Shares (GLD _) have each gained more than 22% in the last year. Global concern that the United States of America might abandon its position of full faith and credit by defaulting on its debt and spending obligations has reached a fevered pitch.

Excessive brinksmanship has set up a potential contrarian trade opportunity to bet against gold. If the level heads on Wall Street demand Congress find a middle of the road compromise, a correction in the inflated price of gold could happen in the first week of August.

Shorting gold futures opens speculators to the leveraged risk of unlimited losses. A moderately less risky way to attempt to gain from a sudden pullback in the price of gold is to buy exchange-traded funds leveraged to the inverse price of gold or gold miners. As long as you are not trading on margin,your losses can be capped at 100% of your investment.

Key short gold ETFs to consider are PowerShares DB Gold Short ETN (DGZ _), PowerShares DB Gold Double Sht ETN (DZZ _), ProShares UltraShort Gold (GLL _), and Direxion Daily Gold Miners Bear 2X (DUST _).

None of these ETFs are appropriate for long-term holdings. So, whether Congress and the President are forced to kick the can down the road making the trade lose money, they strike a grand compromise with the trade working out, or any other scenario, exiting the short position in early August may be wise.

With any trading vehicle it is important understand the unique risks involved. As you can lose money, be sure to read the prospectus of each security before investing.

-- Reported by Kevin Baker in Jupiter, Fla.

For additional Investment Research check out our Ratings Research Center.

SOURCE: http://www.thestreet.com/story/11192632/1/gold-short-etfs-a-solid-contrarian-debt-ceiling-bet.html?cm_ven=RSSFeed

2011-07-25T13:50:00.000-07:00

Quick Debt-Ceiling Fix Impeded By Congress' Tricky Rules

by David Welna

There are now two competing proposals to raise the debt ceiling by the Treasury Department's August 2 deadline.

The one put forward by House Speaker John Boehner requires another raising of the debt ceiling before next year's elections. The other, coming from Senate Majority Leader Harry Reid, would increase the debt limit sufficiently so that it would not have to be done again until 2013.

But the deadline is eight days away now, and there's real concern there may not be enough time for either proposal — or a compromise version of the two — to get enacted by Congress.

One reason for that concern is the amount of time it takes to turn a proposal for raising the debt ceiling into actual legislation. Beyond the time needed to draft a bill (perhaps a day if it's a rush job,) there's also the requirement that it be "scored" by the Congressional Budget Office to verify its impact on the federal budget.

That scoring often takes two weeks, but it could be speeded up in an emergency situation like the one Congress now faces.

Moving a bill through the House is fairly simple. Presumably House Speaker John Boehner would waive the GOP's rule that legislation be available for members to study 72 hours before they vote on it. Once the bill is on the House floor, it generally can be finished in a day in a chamber where the majority holds most of the cards.

The Senate is entirely a different matter. In that 100-member body, it takes at least a 60-vote supermajority to limit debate and move to a vote.

So the GOP minority can stop anything with just 41 votes. And, because the chamber operates by unanimous consent, one senator alone can prevent the Senate from moving forward.

If a senator objects, which is highly likely in this case, it can trigger 30 hours of debate before a preliminary vote is taken to allow the Senate to actually proceed to the bill. If that vote is successful, there is then a 30-hour waiting period before the bill itself can finally be taken up.

That 60-hour debate-and-waiting period process? It can be triggered again if any senator objects to ending debate for a final vote. That's 120 hours of debate just to get to that vote.

How would this all play out in the coming days? Boehner and his House Republicans are likely to bring their two-stage lifting of the debt limit to the House floor, possibly by Wednesday. That means the Senate might be able to take it up as soon as Wednesday evening, if Majority Leader Reid should deign to give that bill the Senate's consideration (which is far from certain.)

If any senator objects to taking up the House bill, the 120 hours of required debate could kick in. And if the Senate stayed in session around the clock and if 60 senators or more voted to move past the procedural hurdles, the bill could be ready for a final vote next Monday, in time for President Obama to sign it into law Tuesday, Aug. 2.

All that assumes that the Senate does not amend the House bill, in which case it would have to be sent back to the House for final approval.

But that scenario isn't likely to happen. Much more probable is that Reid introduces his own debt-ceiling raiser in the Senate, possibly as soon as Tuesday, July 26.

It's virtually certain GOP senators would raise procedural obstacles, making it necessary for the Senate to stay on the bill at least until Sunday. And that's assuming the 51 Democrats and two Independents who caucus with them would be joined by at least 7 Republicans to reach the 60 vote threshold needed to move forward.

The bill would then be sent to the House, where it could be voted on possibly Monday, Aug. 1.

The problem with these two scenarios is that there may not be enough votes in both chambers to enact either one of them. In that case, some compromise that could get sufficient bipartisan support would have to be cobbled together in a hurry-up conference committee.

At that point, the rules of the Senate would still enable any senator to object to expedited consideration of such a compromise. That might mean it would take the rest of next week to deal with any new bill that might emerge if the two plans out there now don't get passed.

All of which is to say, there's really no time to spare for lawmakers aiming to avoid an August 3 default.

SOURCE: http://www.npr.org/blogs/itsallpolitics/2011/07/25/138679387/any-debt-ceiling-fix-clouded-by-congress-tricky-rules-for-passing-laws

2011-07-22T10:29:00.000-07:00

Criminal immigrant deportations way up

by Suzanne Gambo - Jul. 22, 2011 07:09 AM
Associated Press

WASHINGTON - Huge increases in deportations of people after they were arrested for breaking traffic or immigration laws or driving drunk helped the Obama administration set a record last year for the number of criminal immigrants forced to leave the country, documents show.

The U.S. deported nearly 393,000 people in the fiscal year that ended Sept. 30, half of whom were considered criminals. Of those, 27,635 had been arrested for drunken driving, more than double the 10,851 deported after drunken driving arrests in 2008, the last full year of the Bush administration, according to Immigration and Customs Enforcement data provided to The Associated Press.

An additional 13,028 were deported last year after being arrested on less serious traffic law violations, nearly three times the 4,527 traffic offenders deported two years earlier, according to the data.

The spike in the numbers of people deported for traffic offenses as well as a 78 percent increase in people deported for immigration-related offenses renewed skepticism about the administration's claims that it is focusing on the most dangerous criminals.

President Barack Obama regularly says his administration is enforcing immigration laws more wisely than his predecessor by focusing on arresting the "worst of the worst." He promised in his 2008 presidential campaign to focus immigration enforcement on dangerous criminals. As recently as May 10, Obama said in a speech in El Paso, Texas, that his administration was focused on violent offenders and not families or "folks who are looking to scrape together an income."

Most of the immigrants deported last year had committed drug-related crimes. They totaled 45,003, compared with 36,053 in 2008. Drug-related crime - described as the manufacture, distribution, possession or sale of drugs - has been the No. 1 crime among immigration for years. Drunken driving was third in the number of offenses last year.

An illegal immigrant from Bolivia, Carlos Montano, is awaiting trial in Virginia on charges of involuntary manslaughter in a drunken driving incident that killed Benedictine nun Denise Mosier and injured two other nuns. The case fueled national debate over deportations of criminal immigrants because Montano had two previous drunken driving arrests, in 2007 and 2008. He was not held by ICE or deported after the arrests. An ICE report concluded that new federal immigration policies would have prevented Montano's release.

But the rise in traffic offenders in the deportation statistics and in some other categories worries immigration advocates, particularly because traffic stops are largely made by police, sheriff's deputies and state highway patrol officers. Local law enforcement has become more involved in immigration enforcement because of new programs that encourage it.

Officers "are using their new authority to remove as many unauthorized people from their jurisdictions as they can, and that frequently means going after traffic violators instead of serious criminals," said Muzaffar Chishti, director of the Migration Policy Institute's office at New York University Law School. The institute is a Washington-based think tank on migration.

Homeland Security Secretary Janet Napolitano noted that most people in the United States are arrested for misdemeanor offenses. But she told the AP that the percentage of felons deported will change over time.

"The more serious offenders are still in prison," she said in an interview Thursday. "We're not going to see them reflected in the numbers until we can begin to remove them."

The issue is one Obama is trying to carefully navigate in his bid for a second term as he relies on the record deportations numbers to bolster his tough-on-enforcement stance while trying to convince immigrant and Latino voters he deserves more time to get a comprehensive immigration bill through Congress.

Marshall Fitz, immigration policy director at the liberal Center for American Progress think tank, said some of the people being counted as criminals have committed traffic violations that would usually draw a traffic ticket. But when the driver can't produce a valid license, the officer pursues questions about immigration status.

Illegal immigrants caught in traffic stops often are pressured into signing an agreement to leave the United States and to pay a fine or somehow acknowledge responsibility for the traffic offense and thereby end up in the statistics as criminals even though they never went to court, Fitz said.

Kumar Kibble, Immigration and Customs Enforcement deputy of immigration, said in some cases people picked up on traffic offenses are found to have committed other crimes. But ICE attempts to categorize each deported immigrant in its statistics based on the worst crime in the person's record. ICE says the statistics involve only people who have been convicted of a crime.

Darrel Stephens, executive director of Major Cities Chiefs Association, an organization of sheriffs and police chiefs, said the data show ICE is deporting criminals. He noted that even though traffic offenses have more than doubled, they are just 7 percent of the total criminal deportations. Meanwhile, dangerous drugs and drunken driving deportations comprised 23 percent and 14 percent of the criminal deportations, respectively.

The drunken driving deportations are particularly important, he said. Fatal drunken driving accidents involving illegal immigrants often cause outrage in communities where they occur.

"That's a crime that people look at in a very serious way right now," Stephens said.

There are an estimated 11 million people in the country illegally, 7 million to 8 million of whom are believed to be adults.

Kibble said the numbers show his agency's system of giving priority for deportation to people who pose a public threat is working. Last year, 36,178 criminals were deported as a result of the Secure Communities program, now in place in more than 1,400 jurisdictions, up from 14 in 2008. It's expected to be in more than 3,000 jurisdictions nationally by 2013.

Secure Communities is the Homeland Security Department's system of identifying immigrants for deportation through fingerprints taken by local officers when booking people on criminal charges. The local law enforcement agencies routinely send the prints to the FBI for criminal background checks. The FBI shares the fingerprints with Homeland Security to look for potentially deportable immigrants, who can be in the country illegally or legally.

"The numbers are going in the right direction," Kibble said.

SOURCE: http://www.azcentral.com/news/articles/2011/07/22/20110722immigration-criminal-deportations-increase-ON.html

2011-07-18T17:23:00.000-07:00

The Global Financial Crisis: What Caused it, Where it is heading?*

Ravi Batra

© November 15, 2008

Professor, Department of Economics

Southern Methodist University, Dallas, Texas 75275, USA

Two thousand eight was year extraordinaire. It started off in a rather nonchalant way, but ended with a bang. Its myriad and breathtaking events caught the world off guard, but please allow me to say, arrogant as it sounds, that they did not surprise me, including the epoch-making victory of Barack Obama in the US presidential election. I had anticipated them all in two books more than two years ago. The first, Greenspan’s Fraud, was written in 2005, and the second, The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos, was finished before October 2006. In fact, the title of the second work itself reveals that I had anticipated an Obama-like revolution in the United States.

It now appears vain to remind the people of my forecasts, but see what I had to endure after I made them. Both books had served to reinforce my reputation as a crack pot, who sought public attention with bogus claims and phony prophecies that occasionally came true. Greenspan’s Fraud was especially galling to my fellow economists, even some of my colleagues. Alan Greenspan was still the chairman of the Federal Reserve in the United States, and had been so for the past 18 years. Some people regard the Fed chairman, with his all-encompassing ability to influence interest rates globally, as the most powerful man in the world.

This is perhaps an exaggeration, but Greenspan, who had actually been in the limelight for over three decades, was more than just a Fed chairman. Investors around the world came to worship him in the 1990s, as share markets broke record after record in many nations. Best-selling author Bob Woodward, who achieved celebrity writing about the Watergate scandal, declared Greenspan as the Maestro in 2000 in a book with the same title. Others were equally euphoric about him. Some called him a rare genius, the best economist ever; even Queen Elizabeth chipped in and knighted him in 2002 as Sir Alan Greenspan. Here I was, a mere professor at Southern Methodist University, who had the temerity not just to criticize him but call his policies self-serving and fraudulent. My book’s title shocked the people, who in turn mocked me without reading my facts and arguments. But sometimes one has to bear insults to bring out the truth.

Where did I learn my economics? The question makes me nostalgic and takes me back into the 1960s, when I was a masters’ student at the Delhi School of Economics. There I studied under luminary professors such as K. N. Raj, Jagdish Bhagwati, Amartya Sen, and India’s current prime minister, Manmohan Singh. They were great teachers and taught me the fundamentals of modern economics.

However, there was one other teacher, whose theories were remarkably different and unknown. He was not even at the Delhi School. I met him in Lucknow, at the time a rather small town in India. He was Shri Prabhat Ranjan Sarkar, a wonderful man of vast knowledge in many different areas. He had written books on history, economics and philosophy among others. Two points stood out in his theories. First, the foundation of prosperity is people’s purchasing power; second, rising inequality eventually destroys any economy.

I left India for the United States in 1966 to do a Ph. D., but Sarkar’s ideas stayed with me and followed me wherever I went. I studied classical economics, Keynesian thought, and numerous other schools, but none focused on what Sarkar had stressed. Finally, I decided to write about his ideas and introduce them to the world, because few paid attention to the gems he had offered. I wrote a number of books based on his theories, starting in 1978, but here I want to emphasize how his ideas enabled me to see through the vacuity and deception of Greenspan’s policies.

The Wage-Productivity Gap

Greenspan focused on company profits and labor productivity as the main engines of economic growth and prosperity. He believed that high profits generate high employment and high wages lead to joblessness. I will now show how this view is myopic and the sole cause of most of the economic travails afflicting the world.

Let me start with a universally acceptable statement. A healthy economy requires that there is a balance between supply and demand. Here supply means the production of goods and services offered to entire society, and demand means society’s demand for such things. Thus, economic balance requires that

Supply = Demand

Without this balance, there is either high unemployment or high inflation. The main source of supply is labor productivity, whereas the main source of demand is the real wage, or people’s purchasing power in Sarkar’s nomenclature. When productivity rises, production or supply goes up and when the real wage increases, consumer spending, and hence investment spending, go up. Because of this investment and new technology, productivity grows over time, which means supply rises over the years. Therefore, demand must also grow proportionately to maintain the economic balance, implying that the real wage must rise in proportion to productivity. However, Greenspan loved to see the rise in productivity but hated the rise in the real wage. He even wanted to abolish the minimum wage, and always argued against its rise, although relentless price increases in the United States had all but demolished its purchasing power. In this respect, the maestro had a lot of company, including the support of President George W. Bush and economic establishment. As a result, the U.S. minimum wage, which peaked at $10 per hour in 1969 in terms of 2008 prices, is now less than $7. Incidentally, the unemployment rate in 1969 was just 3.5 percent, among the lowest in US history.

If the real wage fails to grow as fast as productivity, then over time, a wage-productivity gap develops and

Supply > Demand

Then how do you maintain the indispensable economic balance? This is where the special genius of Greenspan, along with that of conventional economics, came into play. This is where liberal and conservative economists alike, some of them Nobel Laureates, preached their gospel and in the process failed the world.

There is another way through which demand can be raised—new debt. It is an artificial way, and cannot be used forever, but it can postpone the problem for a long time, while the potential economic imbalance builds and cumulates. From 1981 on, U.S. budget deficits, with Greenspan and company advising President Reagan, grew apace. Economists called it fiscal policy, but in reality it was a debt-creating policy. This is how the supply-demand balance was maintained in the presence of the rising wage gap. Thus, for a while, economic balance occurs when

Productivity growth = growth of the real wage plus debt

and

new debt = supply – demand

The Profit and Stock-Market Bubbles

Once productivity outpaces the real wage and debt fills the supply-demand gap, company profits skyrocket, because the entire fruit of rising productivity goes to capital income. However, these are debt-supported profits, because without this debt goods will be unsold and profits will fail to materialize. With rocketing profits come rocketing share prices, so everybody becomes happy and begins to dance. This is how Greenspan won the world’s adulation, and no one looked at the magical role played by debt.

Once federal debt began to sore in the United States from 1981 on, it took barely a year, before the Dow Jones Index (the Dow in short) began to rise. The Dow ended the year around 800, but climbed above 2,000 by mid-1987. It had taken the ballyhooed index about 100 hundred years to go past 1,000, but the next 1,000 came in merely two years. A grateful Reagan appointed Greenspan as the Fed chairman in August 1987, but two months later the maestro had to face the music of his own handiwork. The debt-built stock market bubble, founded by that debt-built profit bubble, crashed in the month of October. Greenspan had no idea of how the rising wage gap generates the supply-demand gap. Instead of focusing on wages, he turned to the other way of creating debt. He flooded the world with money and trimmed the interest rate to lure consumers into borrowing. New debt was now created with the help of fiscal policy as well as what economists like to call monetary policy. However, such euphemisms only mask the truth, which is that these policies solve the problem only by generating new debt.

With increasing use of computers and the Internet, productivity began to rise faster than before, while government policies restrained wage growth. So the wage gap continued to rise and actually accelerated. Not surprisingly, new debt played an even larger role during the 1990s. The government did not borrow as much as before, but the public did more than its share. The mushrooming U.S. trade deficit also made a contribution in this regard, because the rest of the world bought American government bonds with its trade surplus that resulted in its dollar hoard. Consequently, American interest rates remained low for a long time and lulled Greenspan and the fawning world into believing that his policies were actually responsible for the surface prosperity.

So the debt-and-stock-market party that had been derailed by the 1987 crash returned with a gusto. This time the world got drunk on the dot.com boom that took share markets to stratosphere, with the Dow crossing 10,000 in 1999. Still no one realized the crucial role played by new debt in the ever growing mania. For a variety of reasons, the US federal government enjoyed a budget surplus in 1999. Since the wage gap continued to rise, I became convinced that the budget surplus would soon generate a supply-demand gap and hence a crash in profits and share prices. That is when I wrote my book, The Crash of the Millennium, predicting that share markets would collapse in 2000 and beyond. This is exactly what happened, because in an environment of the growing wage gap, the moment debt stops growing, supply exceeds demand, over production results, profits tumble and share prices sink. The stock-market crash of 2000-2001 was the worst since the great crash of 1929.

The Housing Bubble

Somehow Greenspan loves bubbles. As the stock market plummeted in 2000, he panicked and slashed interest rates to depths that had not been seen since the depression of the 1930s. He knew consumer demand was inadequate but did not attribute it to the stagnant real wage. He would rather have the public spend money through borrowing than through higher salaries. Greenspan also encouraged people to use their home equity to secure loans and asked banks to lower their lending standards. The banks dutifully followed as they and their CEOs began to make bushels of money. Add to this his deregulation spree that freed banks to trade in the stock market, and bubbles started to emerge in home prices and credit markets. Soon the new bubbles bested even the dot.com balloon of the 1990s. Greenspan still had not realized that since debt cannot grow exponentially all bubbles burst in the end, and when they do the consequences are very painful.

I have just given you a capsule of Greenspan’s follies and policies; there is much more that cannot be presented in a brief article. But the main point is that the maestro succeeded in hiding the true consequences of his actions and tailored his advice to the ideology of whoever became the American president. In the process Greenspan contradicted his earlier policies, mainly to secure his reappointment as the Fed chairman by the incoming president. Today people realize that Greenspan is mostly to blame for the global crisis. In fact, the cable television channel CNN recently included him among the top 10 culprits responsible for the spreading fiasco, but the same CNN had once idolized the maestro.

Greenspan retired in January 2006 and was replaced by Ben Bernanke, who is no different from the former chairman. Mr. Bernanke is also unaware of the role played by sufficiently high wages in restoring economic balance. So he has rehashed Greenspan’s policies at even faster place, although it must be added in his defense that the current mess is not entirely of his making.

Where Are We Headed?

In The New Golden Age, I predicted that economic chaos would begin in 2007 with a housing meltdown in the United States, followed by a banking crisis and share price declines in 2008 and 2009. I now foresee that this crisis would last at least till 2010, and possibly longer. This is because conventional economists still do not understand the nasty economic effects of the wage-productivity gap, which has grown enormously all over the world. If the doctor does not diagnose the sickness properly, the patient has to suffer for a long time. That is why I am afraid the global financial debacle will turn into a steep recession and be the worst since the Great Depression, even worse than the painful slump of 1980-1982 that afflicted the whole world. I have offered a number of economic reforms deriving from the theory of the wage gap in my two books explored above, and it is possible to come out of the recession within a year, but alas conventional economists would not let us escape the looming disaster so quickly.

Yet all is not lost. There is an effulgent silver lining lurking behind the pal of dark clouds. Sarkar’s historical cycles that I have repeatedly used in my forecasts also show that eventually the world will see a wonderfully prosperous era enshrined in the new golden age. This, I feel, could happen by the end of the next decade.

*Prepared for St. Stephen’s College, Delhi.

SOURCE: http://02ae523.netsolhost.com/globalfinancialcrisis.htm

2011-07-18T11:49:00.000-07:00

Friday, April 22, 2011

Death-row lawyer: Nebraska bought lethal-injection drug from rogue broker

Kayem Pharma Mumbai office entrance
Source: Reprieve More here

The Nebraska Supreme Court late Thursday rejected a complex appeal by death-row inmate Carey Dean Moore and ordered him to be executed on June 14.

In doing so, the court rejected arguments by Moore's lawyers challenging the legality of Nebraska's purchase from an Indian company of 1 of 3 drugs used in the state's lethal-injection protocol and questioning whether the state even bought the right drug.

Jerry Soucie, a lawyer with the Nebraska Commission on Public Advocacy, had asked the court to order a lower court to hear the issue of the state's purchase.

"The subject matter of the proceeding pending herein is not one which the Nebraska Supreme Court may ‘remand' to a district court," Chief Justice Michael Heavican wrote.

Soucie declined immediate comment.

Meanwhile, court documents filed earlier Thursday said the state might have bought the lethal injection drug from a rogue pharmacy broker who just wanted to make quick money.

The state paid $2,056 to Kayem Pharmaceutical Pvt. Ltd. for 500 grams of sodium thiopental. The drug has been in short supply since last year and the only U.S. manufacturer, Hospira Inc., is ending production because of death-penalty opposition overseas.

But in an email this week to Soucie, the CEO of Kayem said the state bought the drug from a pharmacy broker who deceived the company -- even going as far as registering it to do business in Nevada without its knowledge.

CEO Navneet Verma said an Indian citizen named Chris Harris approached his company last year about being a pharmacy broker for Kayem.

Harris later allegedly told Verma he and another man, Tony Atwater of Steuben, Maine, already had registered the company as a corporation in Nevada under the name Kayem Pharmaceutical LLC.

"This sudden and abrupt formation of a company by this duo has given rise to suspicion about ... deceit by the hands of this duo," Verma said. "... The intention of this duo was clear to us as they wanted to make quick money ... getting themselves in the unethical practices ... detrimental to Kayem Pharmaceutical."

Verma said the sale of the drug was between Harris and Steve Urosevich, chief operating officer for the Nebraska Department of Correctional Services.

He said Kayem simply supplied the drug to Harris. Verma also said the company since has cut ties with Harris.

"The inescapable conclusion is that Chris Harris and Kayem are rogue foreign pharmaceutical brokers/distributors and that the importation of a controlled substance by DCS was in violation of the applicable federal statutes," Soucie wrote in court filings.

Soucie says the address listed by Harris with the Nevada Secretary of State's office is that of a mail forwarding service called "Mostly Mail," which advertises mail boxes for rent.

Harris did not immediately respond to an email request seeking comment.

Atwater said Verma approved of their registering Kayem in Nevada, but the 2 had a subsequent falling out over money and parted ways.

Kayem completed a federal "Certificate of Origin" dated Dec. 8, 2010, that said the drug shipped to the Nebraska Department of Correctional Services was "Thiopentone ... thiosol sodium" manufactured by Neon Laboratories Ltd. of Mumbai, India.

The state's lethal injection protocol calls for using "sodium thiopental." It appears, Soucie said, that the state might have bought a generic version.

"The state's own attachment to the motion for an execution date does NOT allow for the use of ‘thiopentone' or ‘thiosol sodium' as the first of the drugs in the lethal execution cocktail," Soucie said in a motion to the high court asking for a hearing.

He said federal law requires that before a new drug is used in the United States, the manufacturer must file an application with the Food and Drug Administration outlining the drug's safety, composition and manufacturing process, among other things.

To market a generic drug in the United States, a manufacturer must file an application showing the FDA has approved its active ingredients.

Verma said his company is not so licensed. Nor, he said, is Kayem or Neon Laboratories registered with the Drug Enforcement Administration and authorized to deliver controlled substances to the United States.

Soucie said the DEA registration held by the Corrections Department does not authorize it to directly import drugs from a foreign supplier.

The DEA recently seized Georgia's entire supply of sodium thiopental, which defense attorneys say came from a questionable British supplier. The DEA said there were questions about how it was imported.

FDA spokeswoman Shelly Burgess has said the agency could not comment on the Nebraska case. The DEA referred inquiries to the U.S. Department of Justice, which also has declined comment.

Nebraska corrections officials deferred comment to state Attorney General Jon Bruning's office. Said Bruning: "The court order speaks for itself."

In court papers, the attorney general's office said Soucie should not be allowed to ask for a hearing since the high court had been asked to set an execution date for Moore.

In his filing, Soucie wrote, "without evidence of compliance with these federal regulatory requirements, there is no basis upon which to presume the efficacy of these specific drugs obtained from Kayem and that they do not present a ‘substantial' or ‘objectively intolerable risk of harm' during a judicial execution."

According to documents reviewed by the Journal Star, the corrections department paid Phil Patterson Inc., an import company based in Omaha, to facilitate shipment of the drug from India.

Kayem issued the certificate of origin for the drug and the shipment was under the supervision of customs officials in India and the United States, said Megan Cooley, who oversaw the importation for Phil Patterson Inc.

Once the shipment arrived in the United States, it was tested by Medtox Laboratories in St. Paul, Minn., to verify that it was sodium thiopental, according to the documents.

Soucie also questions the legitimacy of Kayem to make a lethal injection drug.

He said Kayem's main facility in India is in a ground-floor apartment in Mumbai.

"There are 2 small rooms, one serving as an office and the other as a storage room," Soucie said. "There is no air conditioning or climate control at this building.

"Kayem Pharmaceuticals does not appear to be involved in the direct formulation of any medications with the exception of Indian herbal remedies to alleviate symptoms of arthritis, upper respiratory infections, constipation, hemorrhoids and inadequate male sexual performance," Soucie said. "Kayem's primary business activity appears to be the production of tablets, capsules, ointments and injectable products as a subcontractor for other generic drug companies located in India."

A federal lawsuit has been filed in Arizona challenging the use of the drugs from overseas suppliers, saying they may be substandard and could lead to problems during executions.

As for the drug Nebraska got, Atwater said it is the real thing.

"It's all legal," he said.

The Nebraska Legislature approved lethal injection as the state's method of execution in May 2009.

Moore, 53, has been on death row since 1980. He was sentenced to die for killing Omaha cab drivers Maynard D. Helgeland and Reuel Eugene Van Ness during botched robberies in 1979.

The state has not executed an inmate since Robert Williams died in the electric chair in 1997.

Related article: "Nebraska lawyers request federal seizure of illegally imported execution drugs", Reprieve, April 13, 2011

Source: Lincoln Journal Star, April 22, 2011

Fed Scorecard: Five Ways QE2 Worked—And Where It Failed

2011-06-30T16:45:00.000-07:00

Published: Thursday, 30 Jun 2011 | 2:43 PM ET
By: Jeff Cox
CNBC.com Staff Writer

Quantitative easing—which ends Thursday—effectively reached some of its goals and badly missed at others, but the unprecedented government intervention program’s final legacy is far from being written.

Fed Chairman Ben Bernanke launched the program with hopes that it would create a “wealth effect”—a rise in asset prices that would help convince Americans that the financial crisis had passed and better days were ahead.

No doubt there has been a considerable rise in a variety of assets, and if you’re lucky enough to own them you probably did quite well in the eight months since the central bank launched the second wave of easing, known as QE2 in market lingo.

But if you were one of those stuck in the mud of the housing market downturn and jobs slump, you didn’t do nearly as well.

A look, then, at five areas where QE2 worked—and five were it failed.

WHERE IT WORKED

1) The Stock Market Soared. Yes, there’s that. Major indices last summer had fallen 17 percent from their April 2010 cycle highs and it looked like there was little relief in sight. But after Bernanke’s Jackson Hole speech in late August and subsequent official QE2 launch on Nov. 12, it was a different story. The Nasdaq jumped 29 percent, the S&P 500 [.SPX 1320.64 13.23 (+1.01%)] rose 25 percent and the Dow industrials surged 23 percent. So if you are part of the 20 percent of the people who own most of the stocks, you saw a wealth effect indeed.
2) Commodities Climbed. Certain commodities, like oil [LCOCV1 111.80 --- UNCH], copper and, for a while, silver [XAG= 34.71 0.06 (+0.17%)] , saw moves that could only be described as parabolic. The connection to QE2 was undeniable: All that money-printing debased the dollar, in which commodities are valued. So cheap dollars equate to strong commodities, simple as that. The CRB index rose 11 percent while the dollar fell 10 percent during QE2. That’s a pretty straight line.
3) A Boost for Exports: See previous item: Cheap dollars make for cheap exports, and commodity-driven stocks led the market rally. Energy rose 45 percent while materials surged 31 percent. Multinationals prospered and set the stage for a move to big-cap stocks in 2011 and beyond.
4) Prevented Japan: More specifically, QE2 put a halt to fears that the US was heading towards Japanese-style deflation. By pumping enough liquidity into the markets, and doing so sooner rather than later (i.e. Japan to its 1990s recession) Bernanke was determined to avoid a “lost decade.” Of course, this approach had its consequences, which we’ll discuss shortly.
5) Created ‘Wealth Effect’ for the Wealthy: In summary, if you had the resources to run the short-dollar/long commodities/long stocks trade, and had the dexterity to get in and out at the right times, you had one whale of a wealth effect.

WHERE IT FAILED

1) Housing is Broken. In a CNBC Interview Thursday, Tobias Levkovich, chief market strategist at Citigroup [C 41.64 0.14 (+0.34%)], insisted that "QE2 was never designed to drive the housing market." Wrong. In an op-ed piece in the Washington Post just before the QE2 launch, Bernanke was clear about his goals: “Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance.” But the housing market is now in worse shape than the Great Depression, and even the rosiest projections are for a flattening and finding some bottom in pricing. So all that rate-cutting, dollar-cheapening and market manipulation still hasn’t cured real estate.
2) The Jobs Market is Broken, Too. Yeah, and there’s that. QE2 liquidity was supposed to “spur spending,” “lead to higher incomes” and create a “virtuous cycle” that would “support economic expansion,” according to the Bernanke WaPo piece. Um, no, no, no and no. Companies have hoarded cash, income has lost traction to inflation, and GDP is 1.9 percent while unemployment is stuck at 9.1 percent—lower than when QE2 started but actually trending higher.
3) Inflation May Not Be “Transitory.” Bernanke repeatedly has called food and energy price pressures from inflation “transitory” and likely to reverse. He has been somewhat right on the energy call, but food prices are moving consistently and in some cases dramatically higher, while other areas of the economy are catching up as well. Inflation is trending at 3.6 percent now, and that doesn’t include what is expected to be a coming surge in rents, which make up 40 percent of the Consumer Price Index. Inflation as QE2’s enduring legacy is Bernanke’s biggest nightmare.
4) Dollar Destruction: See commodity price and inflation entries above. The dollar index, which measures the greenback against a basket of foreign currencies, has moved in an almost perfectly inverse fashion with commodity prices, which in turn are driving inflation. Here’s where it gets really scary: The Fed has almost no wiggle room to raise interest rates considering how much debt is weighing down the government’s balance sheet. But if inflation keeps building, so will pressures to raise rates and support the dollar [.DXY 74.50 0.19 (+0.26%)]. In that case, Bernanke will find himself in a brutal no-win situation.
5) Interest Rates Are Actually Higher: A real wild card whose significance also is yet to be known. Rates are still low—unnaturally low, some might say. The $600 billion worth of Treasury buying plus another $80 billion or so in Permanent Open Market Operations drove prices lower and rates higher. The yield on the 10-year Treasury note actually has risen from the 2.76 percent level when QE2 started and the 2.66 percent at the time of Bernanke’s Jackson Hole speech. If the stock market rally keeps going and investors continue to ditch Treasurys, interest rates could spike and create even more problems for the debt-laden government.
SOURCE: http://www.cnbc.com/id/43595674

US Is in Even Worse Shape Financially Than Greece: Gross

2011-06-13T22:51:00.000-07:00

Published: Monday, 13 Jun 2011 10:33 AM ET By: Jeff Cox CNBC.com Staff Writer

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco's Bill Gross told CNBC Monday.

Much of the public focus is on the nation's public debt, which is $14.3 trillion. But that doesn't include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won't find a solution overnight.

"To think that we can reduce that within the space of a year or two is not a realistic assumption," Gross said in a live interview. "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."

Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation's debt ceiling, according to a report in the Financial Times.

The move reflects increasing concern from the financial community over whether the US is capable of a political solution to its burgeoning debt and deficit problems.

"We've always wondered who will buy Treasurys" after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month, Gross said. "It's certainly not Pimco and it's probably not the bond funds of the world."

Pimco, based in Newport Beach, Calif., manages more than $1.2 trillion in assets and runs the largest bond fund in the world.

Gross confirmed a report Friday that Pimco has marginally increased its Treasurys allotment—from 4 percent to 5 percent—but still has little interest in US debt and its low yields that are in place despite an ugly national balance sheet.

"Why wouldn't an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at 1 or 2 or 3 percent higher?" he said. "It simply doesn't make any sense."

Should the debt problem in Greece explode into a full-blown crisis—an International Monetary Fund bailout has prevented a full-scale meltdown so far—Gross predicted that German debt, not that of the US, would be the safe-haven of choice for global investors.

SOURCE: http://www.cnbc.com/

2011-06-09T14:51:00.000-07:00

Cost of Illegal Immigrants

April 6, 2009

Q: Do illegal immigrants cost $338.3 billion dollars a year? More than the Iraq war?

A: A chain e-mail that makes this claim is loaded with errors and misleading assertions. Published studies vary widely but put the cost to government at a small fraction of that total.

FULL QUESTION

I wonder if much of this is true? Is this on your radar screen?

FULL ANSWER

This chain e-mail has been forwarded to us by readers many times over the past year. The most recent version adds a new angle, claiming that the amount of money taxpayers spend on illegal immigrants would be enough to "stimulate the economy." But no matter the spin, the e-mail is rife with errors.

It also contains several red flags that should tip off readers that this is more bogus than believable. For one thing, the figures given don’t add up to a "whopping $338.3 billion dollars a year" spent on illegal immigrants in the U.S., as the e-mail claims.

The e-mail lists 14 claims about illegal immigrants, all of which were included in a longer list penned by anti-immigration activist Frosty Wooldridge and published on the conservative Web site NewswithViews.com on Jan. 22, 2007. Another NewswithViews columnist, Lynn Stuter, included Wooldridge’s list, with some updated links, in an article posted on April 15, 2008.

The source cited for at least nine of the items is either the conservative Center for Immigration Studies (CIS) or the Federation for American Immigration Reform (FAIR), both of which call for more restrictive immigration laws. CIS spokesman Bryan Griffith told us that he had never seen the e-mail but that he suspected something was out there because of occasional surges in traffic that forced him to rewrite Web pages. When told about the e-mail’s contents and conclusion of a $338.3 billion yearly cost, he responded that CIS "never said anything of the like and is not going to comment on a chain e-mail that is in no way scientific."

The e-mail also continually blurs the important distinction between legal and illegal immigrants – a sign of sloppy and untrustworthy work.

Summary

Because we’re gluttons for punishment, we’ve gone through each claim in turn and report on each in detail farther down. But here are a few highlights (or lowlights) of what we found:

The e-mail includes a link to a CIS report that contradicts some of the e-mail’s own claims. The report found that illegal immigrant welfare use "tends to be very low." It also estimates the total federal net cost of households headed by illegal immigrants at under $10.4 billion, a small fraction of what this message claims.

One "paper" that is cited is a non-peer-reviewed, non-scientific study that essentially fabricates a number for illegal immigrant criminals.

Five of the links lead to transcripts of Lou Dobbs’ cable television show, which fulminates regularly against illegal immigration and is hardly a neutral source. Furthermore, in all instances, the e-mail then takes the original Dobbs reporting out of context.

So, how much do illegal immigrants cost federal, state and local governments in the U.S.? Estimates vary widely, and no consensus exists. The Urban Institute put the net national cost at $1.9 billion in 1992; a Rice University professor, whose work the Urban Institute criticized, said it was $19.3 billion in 1993. More recently, a 2007 report by the nonpartisan Congressional Budget Office examined 29 reports on state and local costs published over 15 years in an attempt to answer this question. CBO concluded that most of the estimates determined that illegal immigrants impose a net cost to state and local governments but "that impact is most likely modest." CBO said "no agreement exists as to the size of, or even the best way of measuring, that cost on a national level."

The Details

For those who want more, we take on each of the e-mail’s claims in order:

1. "$11 Billion to $22 billion is spent on welfare to illegal aliens each year."

This item is completely false. The link given to "verify" the claim actually leads to an issue brief by the conservative Federation for American Immigration Reform. But the FAIR brief says nothing of the sort. It says: "Each year, state governments spend an estimated $11 billion to $22 billion to provide welfare to immigrants." That’s welfare payments in 2001 to all immigrants – both legal and illegal – plus households including U.S. citizens if they are headed by a person who was born outside the United States.

The site says the FAIR report was last updated in October 2002, but a footnote credits this statistic to a March 2003 report from the Center for Immigration Studies. CIS began as an off-shoot of FAIR. But the CIS report doesn’t actually say anything about $11 billion or $22 billion. And it explains that its references to "immigrant households" include persons here legally and persons born outside the U.S.

CIS report: Like the Census Bureau, and other academic work that has examined this question, this report looks at welfare use by immigrant and native households. Households are defined as immigrant or native based on the nativity of the household head. As already indicated, this report uses the terms immigrant and foreign-born synonymously.

CIS estimated that welfare payments to illegal immigrant households averaged $1,040 per household in 2001, mainly Medicaid "on behalf of their U.S.-born children." But the report did not attempt to come up with a total for all such households.

2. "$2.2 Billion dollars a year is spent on food assistance programs such as food stamps, WIC, and free school lunches for illegal aliens."

3. "$2.5 Billion dollars a year is spent on Medicaid for illegal aliens."

These figures supposedly come from a 2004 report by CIS that estimated the costs to the federal government of households headed by illegal immigrants in 2002. But the CIS report actually put the costs of food stamp, WIC and free school lunch programs to "illegal alien households" at $1.9 billion, not the $2.2 billion claimed in the e-mail. The $2.5 billion figure for Medicaid to such households is quoted accurately, but again, much of this was in benefits for U.S.-born children, who are citizens.

Most interesting is that the CIS report includes a total net cost estimate to the federal government for illegal immigrants of just under $10.4 billion for the year, after accounting for the taxes these immigrants paid. That doesn’t include any potential costs to state or local governments, but it’s a far cry from this e-mail’s cost claim of $338.3 billion.

CIS report: Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.

Even CIS’ figures have been questioned by other researchers. The Urban Institute reviewed a related 2003 CIS paper and concluded that its "methods overstate the percentage of the population receiving Medicaid and the share of immigrants on Medicaid, resulting in misleading conclusions about welfare use among immigrants."

Even so, the CIS report actually rebuts claims repeated by this chain e-mail:

CIS: Our findings show that many of the preconceived notions about the fiscal impact of illegal households turn out to be inaccurate. In terms of welfare use, receipt of cash assistance programs tends to be very low, while Medicaid use, though significant, is still less than for other households. Only use of food assistance programs is significantly higher than that of the rest of the population. Also, contrary to the perceptions that illegal aliens don’t pay payroll taxes, we estimate that more than half of illegals work “on the books.”

4. "$12 Billion dollars a year is spent on primary and secondary school education for children here illegally and they cannot speak a word of English!"

5."$17 Billion dollars a year is spent for education for the American-born children of illegal aliens, known as anchor babies."

Both links given to "verify" these claims lead to an April 1, 2006, episode of "Lou Dobbs Tonight" on CNN. During the show, correspondent Christine Romans cited both of these stats and attributed them to FAIR. A FAIR research paper from 2005 does include these cost projections, but a closer look shows that the underlying assumptions are inflated or unsupported.

The FAIR report starts with the presumption that there are "1.5 million school-aged illegal immigrants residing in the United States." That figure is attributed to an Urban Institutepresentation that doesn’t actually say that. Instead, the Urban Institute said: "We estimate that there are about 1.4 million undocumented children under 18 with about 1.1 million of school age (5 -19)."

The FAIR report also assumes there are 2 million "U.S.-born siblings" of illegal immigrant families. However, the Urban Institute makes no estimates of U.S.-born siblings and FAIR gives no citation for its figure. And in any case, again, those U.S.-born children of illegal immigrants are themselves U.S. citizens and not "illegal aliens."

6. "$3 Million Dollars a DAY is spent to incarcerate illegal aliens."

7. "30% percent of all Federal Prison inmates are illegal aliens."

Both of these claims can be traced back to that same April 1, 2006, episode of "Lou Dobbs Tonight" on CNN, in the same segment, with the same correspondent, Christine Romans. But the e-mail misrepresents what Romans said. She gave figures for people who are "not U.S. citizens," a category that would include legal residents as well as "illegal aliens."

Romans said that "according to the Federal Bureau of Prisons, 30 percent of federal prisoners are not U.S. citizens," adding that "most are thought to be illegal aliens." Actually, the Federal Bureau of Prisons does not keep figures on illegal immigrants. What solid numbers we can find point to a much smaller figure. A Department of Justice report from 2003 found that only 1.6 percent of the state and federal prison populations was under Immigration and Customs Enforcement jurisdiction, and thus known to be illegal immigrants. Half of these prisoners were detained only because they were here illegally, not for other crimes.

The Bureau of Prisons does track prisoners by offense when information is available. By that metric, 10.7 percent of prisoners in federal jails were incarcerated for immigration offenses in 2009. In 2006, when Romans gave her report, the figure was 10.2 percent.

The "$3 million dollar a day" figure is based on the false assumption that 30 percent of all inmates are illegal immigrants, and thus is greatly inflated.

8. "$90 Billion Dollars a year is spent on illegal aliens for Welfare & social services by the American taxpayers."

The link to "verify" this claim is dead. However, we found a transcript of a Lou Dobbs episode on Oct. 29, 2006, in which Robert Rector of the conservative Heritage Foundation made the following statement:

Robert Rector, Oct. 29, 2006: Well, assuming that we have about 11 million immigrants in the U.S., the net cost or the total cost of services and benefits provided to them, education, welfare, general social services would be about $90 billion a year, and they would pay very little in taxes. It’s important to remember that at least half of illegal immigrants are high school dropouts.

We checked with Rector, who said he was referring to both legal and illegal low-skill immigrant households (those headed by someone who doesn’t have a high school diploma). His research also looked at many forms of government spending per household, including money spent on parks and transportation.

9. "$200 Billion Dollars a year in suppressed American wages are caused by the illegal aliens."

Again, this is from that same April 1, 2006, Lou Dobbs episode. On the show, Dobbs said that "estimates by the most authoritative and recent study put the suppressed wages at $200 billion a year, as a result of immigration, both legal and illegal." The e-mail continues its practice of ignoring any distinction between legal and illegal immigration.

We couldn’t find any study that supported Dobb’s figure.

10. "The illegal aliens in the United States have a crime rate that’s two and a half times that of white non-illegal aliens. In particular, their children, are going to make a huge additional crime problem in the US"

This is false. The "verify" link leads to yet another transcript of Lou Dobbs speaking with Robert Rector of the Heritage Foundation. This one is dated June 12, 2006, and Rector says, "Hispanics in the United States have a crime rate that’s two and a half times that of white non-Hispanics."

Rector said Hispanics, not illegal immigrants, as the e-mail alleges. Considering there are 45.4 million Hispanics in the country, and an estimated 11.9 million illegal immigrants, the distinction is notable. Rector’s statistic for all Hispanics is correct, according to a 2003 report from the Justice Department.

11. " During the year of 2005 there were 4 to 10 MILLION illegal aliens that crossed our Southern Border also, as many as 19,500 illegal aliens from Terrorist Countries. Millions of pounds of drugs, cocaine, meth, heroin and marijuana, crossed into the U. S from the Southern border. "

The link goes to a 2006 report written by the Republican staff of the House Subcommittee on Investigations of the Committee on Homeland Security. To start, the "19,500" number of "illegal aliens from Terrorist Countries" is nowhere to be found in this report. In fact, the report estimates the number of illegal immigrants coming over the southern border from countries known to harbor terrorists to be in the "hundreds." We’ve seen a similar scare tactic used previously in adsadvocating for a border fence.

And the 4 million to 10 million statistic is extrapolated using some imprecise reasoning. The committee report figures that since "Border Patrol apprehended approximately 1.2 million illegal aliens" in 2005 and since "Federal law enforcement estimates that 10 percent to 30 percent of illegal aliens are actually apprehended," that "therefore, in 2005, as many as 10 to 4 million [sic] illegal aliens crossed into the United States." That simplistic math produces a figure starkly different from more widely accepted estimates. The Pew Hispanic Center estimated that in 2005 there were 11.1 million illegal immigrants total, living in the United States. The center also estimated that about 500,000 illegal immigrants a year came to the U.S. from 2005 to 2008.

12. "The National Policy Institute, ‘estimated that the total cost of mass deportation would be between $206 and $230 billion or an average cost of between $41 and $46 billion annually over a five year period.’ "

No, it didn’t. The National Policy Institute, a group that says it promotes the rights of "white Americans," ironically was citing figures from the liberal Center for American Progress in a reportthat argued against mass deportation of undocumented workers. CAP said such deportation would cost more per year than the entire Department of Homeland Security budget, illustrating "the false allure of deportation as a response to our broken immigration system."

13. "In 2006 illegal aliens sent home $45 BILLION in remittances back to their countries of origin."

This is another bogus figure. The email’s link leads to the original Frosty Wooldridge article, which in turn cites as its source for this figure a link to a Contra-Costa Times article, which is no longer working. Nevertheless, we were able to find a news release from the Inter-American Development Bank stating Latin American immigrants sent $45 billion in remittances in 2006. But that figure applies to all immigrants, including legal residents.

14. "The Dark Side of Illegal Immigration: Nearly One Million Sex Crimes Committed by Illegal Immigrants In The United States."

Once again, the "verify" link is dead. But a little Internet research found the article cited. An independently published, non-peer-reviewed study did estimate that nearly a million sex crimes have been committed by illegal immigrants over a seven-year period, but it employs some highly creative math and interesting assumptions to get there. The "study" is actually a pretty good case study in bad research.

The author assumes that 2 percent of illegal immigrants are sex offenders after "examining ICE reports and public records," but does not say how that figure was calculated. A bibliography cites miscellaneous Immigration and Customs Enforcement press releases and media accounts of instances of apprehending illegal immigrants who were sex offenders (seemingly manufacturing a "rate" based on anecdotal evidence). The author then makes no distinction between male and female illegal immigrants when estimating the number that are "sex offenders."

As we’ve said before, anonymous chain e-mails making dramatic claims are quite likely to be false. And that goes even for those that may seem to cite legitimate sources. This one is yet another good candidate for the "delete" key.

– Justin Bank

Sources

Steven A. Camarota, “Back Where We Started: An Examination of Trends in Immigrant Welfare Use Since Welfare Reform,” Center for Immigration Studies, March 2003.

Camarota, Steven A., "The High Cost of Cheap Labor: Illegal Immigration and the Federal Budget," Center for Immigration Studies, August 2004.

Immigration and Welfare," Federation for American Immigration Reform, Oct 2002.

A Line in the Sand: Confronting the Threat at the Southwest Border," prepared by the Majority Staff of House Committee on Homeland Security, Subcommittee on Investigations, Nov 2006.

Goyle, Rajeev, "Deporting the Undocumented: A Cost Assessment," Center for American Progress. 26 July 2005.

Sending Money Home: Leveraging the Development Impact of Remittances," Inter-American Development Bank. 18 Oct 2006.

Schurman-Kauflin, Dr. Deborah, "The Dark Side of Illegal Immigration: Nearly One Million Sex Crimes Committed by Illegal Immigrants in the United States," Violent Crimes Institute, 2006.

Martin, Jack, "Breaking the Piggy Bank: How Illegal Immigration is Sending Schools Into the Red," Federation for American Immigration Reform. June 2005.

Fix, Michael and Passel, Jeffrey, "U.S. Immigration—Trends and Implications for Schools," Immigration Studies Program, The Urban Institute, 2003.

"Estimates of the Unauthorized Immigrant Population Residing in the United States: 1990-2000," Office of Policy Planning, U.S. Immigration and Naturalization Service, January 2003.

"Table 169, Current Expenditure Per Pupil in Fall Enrollment in Public Elementary and Secondary Schools, by State: 1969-70 to 1999-00," Digest of Education Statistics 2002, National Center for Education Statistics, U.S. Department of Education.

SOURCE: http://www.factcheck.org/2009/04/cost-of-illegal-immigrants/

POSTED BY JUSTIN BANK ON MONDAY, APRIL 6, 2009 AT 1:40 PM

FILED UNDER ASK FACTCHECK · TAGGED WITH ILLEGAL IMMIGRANTS, IRAQ

2011-01-28T15:15:00.000-08:00

Whatever You Do, Don't Buy an Airline Ticket On …

By SCOTT MCCARTNEY

Shoppers looking for the cheapest airfare can learn something from stand-up comedians: It's all about timing.

Ticket prices are highest on weekends, on average, according to online travel agencies, fare trackers and airline pricing executives.

When's the best time to buy? Travel experts have long said Tuesday is when sales are most often in place, which is true. An analysis of domestic fares shows that Wednesday also has good—and occasionally better—ticket prices.

Though prices fluctuate frequently and the ups and downs of airline prices can frustrate and anger consumers, airline pricing actually does follow a cycle during the week. Many sales, in which some seats are discounted by 15% to 25% typically, are launched Monday night. That was true again this week when AirTran Airways launched a sale to all its destinations. Competitors typically match the lower prices Tuesday morning. By Thursday or Friday, many sales have already expired.

Two weeks ago, a Chicago-Atlanta round-trip ticket for April travel dates cost $209 on Tuesday and Wednesday on American and Delta, but then $301 for the next four days. When Tuesday rolled around last week, the fare dropped to $219 at both airlines for the April 8-15 itinerary. By Friday it was up to $307 at both American and Delta. Come Tuesday this week, the fare was down to $229.

"Like bread, fares get sort of stale toward the end of the week," said Bob Harrell, a fare consultant who has tracked airline pricing for years.

For this analysis, Mr. Harrell studied all fares filed by airlines over the past 90 days and found Monday was the busiest day for fare changes, followed by Thursday.

When airlines want to push through a fare increase, marking up their basic prices across the board usually by $5 or $10, they often do that on Thursday night, then watch to see if competitors match and if the higher rates stick over the weekend. If competitors balk, prices can be rolled back by Monday morning.

n addition, airlines don't manage their inventory as actively on weekends, so if cheap seats sell on some flights, prices automatically jump higher. Fare analysts may decide later to offer more seats at cheaper prices, but not until they come back to work on Monday, according to airline pricing executives.

So a ticket can be $199 certain days and $499 other days even months ahead of a flight. "There's a lot of method behind the madness, a lot of rationality behind the moves for airlines," said Ike Anand, Expedia's director of airline strategy. "But for consumers, it does seem crazy."

Rick Seaney, chief executive of FareCompare.com, studied three years worth of airline prices and concluded that 3 p.m. Eastern time Tuesday was the best time to buy. "That's when the maximum number of cheapest seats are in the marketplace," he said.

A daily check of fares in 10 different markets for the past two weeks showed that the average of the lowest prices offered in those markets was often mid-week, while weekends were higher priced. In the days studied, there were no "mistake fares" at ridiculously low prices that could skew results.

On Tuesday, Jan. 11, the average of the cheapest price in the 10 markets sampled on Kayak.com was $324, but the following Saturday it was $332. By Tuesday, Jan. 18, prices for the same dates in the same markets averaged $320, but the average hit $339 the following Saturday and $347 on Sunday.

To be sure, prices in many markets don't follow the pattern and can bounce wildly. But many do seem to chart a weekly cycle.

Last Sunday, for example, the lowest fare offered on Kayak.com, which searches airline websites, was $418 for a Miami-New York, round-trip leaving April 8 and returning April 15. On Tuesday, the same trip on the same dates was offered at only $323. A round-trip between Phoenix and Raleigh-Durham, N.C., was $429 on Sunday and $390 on Tuesday.

Airlines say weekends are their slowest bookings days, and ticket-sellers say they are the most expensive. Orbitz.com said its average ticket sold on Saturday was $791 last year, based on all domestic and international air tickets it sold. That was 7% higher than Friday's average price.

Expedia, Travelocity and Orbitz, the three big online ticket-sellers, all say their busiest day for bookings is Tuesday and the slowest day is Saturday. Expedia says Saturdays have about half the volume of Tuesdays.

Airline pricing took on its weekly cadence many years ago, when sales were announced in daily newspaper ads and most travelers bought tickets when travel agencies were open for business Monday-Friday. On Monday, pricing executives looked at inventory and booking trends and decided whether to offer a sale, putting together big newspaper ads for Tuesday editions. Airlines wanted sales out early in the week to generate buzz while customers could buy from travel agencies. Sales launched on Friday may not get noticed.

These days, the Internet makes ticket-buying available any time, and announcements of sales can be zapped to potential buyers electronically. Nonetheless, the pattern still remains in place.

But the dynamic may change. Some airlines say that social-media outlets, such as Twitter and Facebook, are beginning to disrupt the cycle. Some airlines are sending sales out directly to customers at all hours, making pricing far less predictable each day. Or carriers may tweet an hour-long sale. As a result, airlines can match competitors more nimbly, sneak sales under the radar of competitors and send deeply discounted offers anytime to customers who sign up for fare alerts.

So far, social-media sales still account for a small number of seats actually sold, but give it time.

"The tools we have make it a lot more dynamic," said Brad Hawkins, a spokesman for Southwest Airlines.

Write to Scott McCartney at middleseat@wsj.com

More Shopping Strategies

Other factors that affect ticket prices:

* The day you depart can more heavily influence the fare than the day you buy. If your plans are flexible, travel on a Tuesday, Wednesday or Saturday and you typically find prices far below Monday, Friday or Sunday flights. Sale discounts are bigger on offpeak days than peak days as well. Higher demand for peak days leads to higher prices.
* Computers track booking patterns and can add seats to the cheapest fare level if sales are slow, or yank seats out of the cheapest price level if business is picking up for the airline. That can happen automatically, sometimes while you are shopping around. One minute a good price is offered, and before you buy, it's gone, infuriating customers.
* How far in advance you buy still impacts pricing. While few domestic fares require purchase 21 days before departure, the cheapest tickets often still require 14-day advance purchase. To get tickets before the cheapest seats sell out, buy a month or two in advance.
* Travelers, especially business travelers, still buy airline tickets most frequently 9-to-5 Monday through Friday. And airlines offer their best prices when people are more actively shopping.

–Scott McCartney

SOURCE: http://online.wsj.com/article/SB10001424052748704062604576105953506930800.html?mod=WSJ_hp_mostpop_read

2011-01-18T13:50:00.000-08:00

China: The new landlord of the U.S.

By Paul R. La Monica, assistant managing editorJanuary 18, 2011: 2:35 PM ET

NEW YORK (CNNMoney) -- If you owed somebody a lot of money, let's say for the sake of argument nearly $900 billion, you probably wouldn't want to make this creditor angry, right?

Tell that to President Obama, Treasury Secretary Tim Geithner and several members of Congress.

China is the largest foreign holder of U.S. debt. Despite this fact, many politicians are talking tough (perhaps tougher than they should be) about China's artificially low currency and how that affects trade relations between the two world powers.

With China President Hu Jintao now visiting the United States and set to meet Obama at the White House Wednesday, it seems likely that the topic of the undervalued yuan will come up.

Hopefully though, Obama will be more diplomatic than those who are calling for the U.S. to crack down even more on China for its currency manipulation. Let's face it. China is kind of like our landlord. Or, if you prefer a more menacing term, our loan shark. We should tread carefully.

The Treasury Department reported Tuesday that China owned $895.6 billion in U.S. bonds as of November. That's down from $906.8 billion a month earlier and is the first decline in China's holdings since June.

This is noteworthy because China has been vocal about its disapproval of the Federal Reserve's bond buying program, a policy known as quantitative easing. The Fed unveiled plans to buy $600 billion in long-term Treasuries in November. This is the second such program, hence the nickname QE2.

China is understandably alarmed since the Fed's bond buying should lead to a weaker dollar and higher interest rates, thus reducing the value of China's Treasury stake. It would not be a stretch to make the argument that QE2 is in of itself, a blatant act of currency manipulation.

Guy LeBas, chief fixed income strategist with Janney Montgomery Scott in Philadelphia, said that the decline in China's Treasury holdings is significant and that it could be the beginning of a long-term trend. China, seeking to diversify its central bank's debt holdings, may increasingly shift to euro-zone bonds, LeBas said.

Why China matters

With that in mind, LeBas said he thinks some of the political rhetoric regarding currency and trade does need to be toned down.

"China has been artificially suppressing the yuan for a while. But the U.S. government should be cognizant that China holds a lot of cards," he said.

Kenneth Naehu, managing director and head of fixed income with Bel Air Investment Advisors in Los Angeles, said though that the bigger concern is not that China may start selling. It's that China's demand for Treasuries will wane.

"This is not a mass exodus but there is no doubt that China selling Treasuries should be a concern," Naehu said. "If the U.S. is going to keep issuing so many new Treasuries, who will the buyers be? If China isn't buying, that could put huge upward pressure on interest rates."

Still, others argue that while China does have some leverage over the U.S., it's uncertain if the Chinese really would want to do anything drastic with its bond holdings.

Selling a sizeable chunk, after all, is the equivalent of shooting itself in the foot since it could cause rates to go even higher. (Bond prices and yields move in opposite directions.)

"China knows it probably shouldn't do stuff to implode the Treasury market," said Fred Fraenkel, vice chairman of Beacon Trust, an investment firm in Morristown, N.J. "Even if it's upset about QE2, China is not going to create a run on bonds."

There's also the issue of just how much U.S. debt China really owns. The official number reported by the Treasury is just a hair under $900 billion.

But the actual amount could be higher, said Nancy Vanden Houten, an analyst with Stone & McCarthy Research Associates in Princeton, N.J.

That's because it is widely believed that China has used dealers in the United Kingdom to scoop up Treasuries. Those purchases would then show up on the holdings for the U.K., not China.

And while the amount of China's debt holdings are roughly the same now as at the start of 2010, the U.K.'s holdings has surged from $208 billion in January to $511 billion in November.

So as strange as it may seem, the fact that the U.S. is so heavily in hock to China may actually give America a bit of an edge in further economic negotiations.

"There's an old adage," LeBas said. "If the bank lends you a thousand dollars, the bank owns you. But if the bank lends you a million dollars, you own the bank."

SOURCE: http://money.cnn.com/2011/01/18/news/international/thebuzz/index.htm

2011-01-13T10:50:00.000-08:00

Question: Why is there so little talk of terrorism?

Apparently when a mentally unstable white male is accused, terrorism is not the first thing that comes to mind.

When Clay Duke, a white male, threatened Florida school board members with a gun and shot at them before shooting himself, in December 2010, he was mentally imbalanced.

When Michael Enright, a white male, was arrested for slashing the throat of a Muslim NYC cab driver in August of 2010, his friends said he had a drinking problem

When Byron Williams, a white male, was arrested after opening fire on police officers and admitted he was on his way to kill people at offices of a liberal foundation and a civil liberties organization, in July 2010, he was an unemployed right wing felon with a drinking problem.

When Joe Stack, a white male, flew his private plane into a federal building in Austin, Texas, in February 2010, he was angry with the IRS.

When a white male is accused of mass murder, terrorism is not much talked of rather it becomes a terrible tragedy but not one where race or ethnicity or religion need be examined.

Now, if the accused had been Muslim, does anyone doubt whether this would have been considered an act of terrorism? US Muslims could have expected increased surveillance and harassment at home and the places where they work and worship. They could have expected a Congressional inquiry into the radicalization of their people. Oh, Representative Peter King (R-NY) has already started that one!

Bill Quigley is a human rights lawyer and professor at Loyola University New Orleans College of Law. He is also a member of the legal collective of School of Americas

SOURCE: http://www.alternet.org/news/149465/why_was_jared_loughner_allowed_to_buy_an_assault_weapon_and_why_isn%27t_he_being_called_a_terrorist/

2011-01-12T23:56:00.000-08:00

Obama Addresses Nation, Invokes Expectations Of 9-Year-Old Victim ..

Glenn Beck said that President Obama's speech at the memorial for the victims of the Arizona shooting was "the best speech he has ever given."

Speaking on his radio show Thursday, Beck had one caveat: Obama should have made his speech earlier.

"Last night, the president said what he should have said on Saturday," Beck said. "A leader says that on Day 1. But it is truly better late than never. This is probably the best speech he has ever given, and with all sincerity, thank you Mr. President, for becoming the president of the United States of America last night."

BBC - Obama honours victims in Arizona
FOX News - Obama to Nation: 'We Can Be Better'
NPR - Obama's Message In Grief: Talk In A Way That Heals
cbsnews.com - Obama Calls for Civility in Wake of Tragedy
washingtonpost.com - Obama: Let us heal together
kfyi.com - Obama Says Polarized Nation Needs Healing
washingtontimes.com - Obama: May good come of Arizona tragedy. Solemn service caps mourning

“It was moving, but it was more than moving,” Peggy Noonan, who was a speechwriter for Republican President Ronald Reagan, said of the speech Obama delivered last night.

Thank you. (Applause.)

Thank you very much. Please, please be seated. (Applause.)

To the families of those we've lost; to all who called them friends; to the students of this university, the public servants who are gathered here, the people of Tucson and the people of Arizona: I have come here tonight as an American who, like all Americans, kneels to pray with you today and will stand by you tomorrow. (Applause.)

There is nothing I can say that will fill the sudden hole torn in your hearts. But know this: The hopes of a nation are here tonight. We mourn with you for the fallen. We join you in your grief. And we add our faith to yours that Representative Gabrielle Giffords and the other living victims of this tragedy will pull through. (Applause.)

Scripture tells us: There is a river whose streams make glad the city of God, the holy place where the Most High dwells. God is within her, she will not fall; God will help her at break of day. On Saturday morning, Gabby, her staff and many of her constituents gathered outside a supermarket to exercise their right to peaceful assembly and free speech. (Applause.)

They were fulfilling a central tenet of the democracy envisioned by our founders -- representatives of the people answering questions to their constituents, so as to carry their concerns back to our nation's capital. Gabby called it "Congress on Your Corner" -- just an updated version of government of and by and for the people. (Applause.)

And that quintessentially American scene, that was the scene that was shattered by a gunman's bullets. And the six people who lost their lives on Saturday -- they, too, represented what is best in us, what is best in America. (Applause.)

Judge John Roll served our legal system for nearly 40 years. (Applause.)

A graduate of this university and a graduate of this law school -- (applause) --

Roll was recommended for the federal bench by John McCain 20 years ago -- (applause) --

appointed by President George H.W. Bush and rose to become Arizona's chief federal judge. (Applause.)

His colleagues described him as the hardest-working judge within the Ninth Circuit. He was on his way back from attending Mass, as he did every day, when he decided to stop by and say hi to his representative. John is survived by his loving wife, Maureen, his three sons and his five beautiful grandchildren. (Applause.)

George and Dorothy Morris -- "Dot" to her friends -- were high school sweethearts who got married and had two daughters. They did everything together -- traveling the open road in their RV, enjoying what their friends called a 50-year honeymoon. Saturday morning, they went by the Safeway to hear what their congresswoman had to say. When gunfire rang out, George, a former Marine, instinctively tried to shield his wife. (Applause.)

Both were shot. Dot passed away. A New Jersey native, Phyllis Schneck retired to Tucson to beat the snow. But in the summer, she would return East, where her world revolved around her three children, her seven grandchildren and 2-year-old great-granddaughter. A gifted quilter, she'd often work under a favorite tree, or sometimes she'd sew aprons with the logos of the Jets and the Giants -- (laughter) --

to give out at the church where she volunteered. A Republican, she took a liking to Gabby, and wanted to get to know her better. (Applause.)

Dorwan and Mavy Stoddard grew up in Tucson together -- about 70 years ago. They moved apart and started their own respective families. But after both were widowed they found their way back here, to, as one of Mavy's daughters put it, "be boyfriend and girlfriend again." (Laughter.)

When they weren't out on the road in their motor home, you could find them just up the road, helping folks in need at the Mountain Avenue Church of Christ. A retired construction worker, Dorwan spent his spare time fixing up the church along with his dog, Tux. His final act of selflessness was to dive on top of his wife, sacrificing his life for hers. (Applause.)

Everything -- everything -- Gabe Zimmerman did, he did with passion. (Applause.)

But his true passion was helping people. As Gabby's outreach director, he made the cares of thousands of her constituents his own, seeing to it that seniors got the Medicare benefits that they had earned, that veterans got the medals and the care that they deserved, that government was working for ordinary folks. He died doing what he loved -- talking with people and seeing how he could help. And Gabe is survived by his parents, Ross and Emily, his brother, Ben, and his fiancée, Kelly, who he planned to marry next year. (Applause.)

And then there is nine-year-old Christina Taylor Green. Christina was an A student; she was a dancer; she was a gymnast; she was a swimmer. She decided that she wanted to be the first woman to play in the Major Leagues, and as the only girl on her Little League team, no one put it past her. (Applause.)

She showed an appreciation for life uncommon for a girl her age. She'd remind her mother, "We are so blessed. We have the best life." And she'd pay those blessings back by participating in a charity that helped children who were less fortunate. Our hearts are broken by their sudden passing. Our hearts are broken -- and yet, our hearts also have reason for fullness. Our hearts are full of hope and thanks for the 13 Americans who survived the shooting, including the congresswoman many of them went to see on Saturday. I have just come from the University Medical Center, just a mile from here, where our friend Gabby courageously fights to recover even as we speak. And I want to tell you -- her husband Mark is here and he allows me to share this with you -- right after we went to visit, a few minutes after we left her room and some of her colleagues in Congress were in the room, Gabby opened her eyes for the first time. (Applause.) Gabby opened her eyes for the first time. (Applause.)

Gabby opened her eyes. Gabby opened her eyes, so I can tell you she knows we are here. She knows we love her. And she knows that we are rooting for her through what is undoubtedly going to be a difficult journey. We are there for her. (Applause.) Our hearts are full of thanks for that good news, and our hearts are full of gratitude for those who saved others. We are grateful to Daniel Hernandez -- (applause)

-- a volunteer in Gabby's office. (Applause.)

And, Daniel, I'm sorry, you may deny it, but we've decided you are a hero because -- (applause)

-- you ran through the chaos to minister to your boss, and tended to her wounds and helped keep her alive. (Applause.)

We are grateful to the men who tackled the gunman as he stopped to reload. (Applause.) Right over there. (Applause.)

We are grateful for petite Patricia Maisch, who wrestled away the killer's ammunition, and undoubtedly saved some lives. (Applause.)

And we are grateful for the doctors and nurses and first responders who worked wonders to heal those who'd been hurt. We are grateful to them. (Applause.)

These men and women remind us that heroism is found not only on the fields of battle. They remind us that heroism does not require special training or physical strength. Heroism is here, in the hearts of so many of our fellow citizens, all around us, just waiting to be summoned -- as it was on Saturday morning. Their actions, their selflessness poses a challenge to each of us. It raises a question of what, beyond prayers and expressions of concern, is required of us going forward. How can we honor the fallen? How can we be true to their memory? You see, when a tragedy like this strikes, it is part of our nature to demand explanations -- to try and pose some order on the chaos and make sense out of that which seems senseless. Already we've seen a national conversation commence, not only about the motivations behind these killings, but about everything from the merits of gun safety laws to the adequacy of our mental health system. And much of this process, of debating what might be done to prevent such tragedies in the future, is an essential ingredient in our exercise of self-government. But at a time when our discourse has become so sharply polarized -- at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who happen to think differently than we do -- it's important for us to pause for a moment and make sure that we're talking with each other in a way that heals, not in a way that wounds. (Applause.)

Scripture tells us that there is evil in the world, and that terrible things happen for reasons that defy human understanding. In the words of Job, "When I looked for light, then came darkness." Bad things happen, and we have to guard against simple explanations in the aftermath. For the truth is none of us can know exactly what triggered this vicious attack. None of us can know with any certainty what might have stopped these shots from being fired, or what thoughts lurked in the inner recesses of a violent man's mind. Yes, we have to examine all the facts behind this tragedy. We cannot and will not be passive in the face of such violence. We should be willing to challenge old assumptions in order to lessen the prospects of such violence in the future. (Applause.)

But what we cannot do is use this tragedy as one more occasion to turn on each other. (Applause.)

That we cannot do. (Applause.)

That we cannot do. As we discuss these issues, let each of us do so with a good dose of humility. Rather than pointing fingers or assigning blame, let's use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy and remind ourselves of all the ways that our hopes and dreams are bound together. (Applause.)

After all, that's what most of us do when we lose somebody in our family -- especially if the loss is unexpected. We're shaken out of our routines. We're forced to look inward. We reflect on the past: Did we spend enough time with an aging parent, we wonder. Did we express our gratitude for all the sacrifices that they made for us? Did we tell a spouse just how desperately we loved them, not just once in a while but every single day? So sudden loss causes us to look backward -- but it also forces us to look forward; to reflect on the present and the future, on the manner in which we live our lives and nurture our relationships with those who are still with us. (Applause.)

We may ask ourselves if we've shown enough kindness and generosity and compassion to the people in our lives. Perhaps we question whether we're doing right by our children, or our community, whether our priorities are in order. We recognize our own mortality, and we are reminded that in the fleeting time we have on this Earth, what matters is not wealth, or status, or power, or fame -- but rather, how well we have loved -- (applause)--

and what small part we have played in making the lives of other people better. (Applause.)

And that process -- that process of reflection, of making sure we align our values with our actions -- that, I believe, is what a tragedy like this requires. For those who were harmed, those who were killed -- they are part of our family, an American family 300 million strong. (Applause.)

We may not have known them personally, but surely we see ourselves in them. In George and Dot, in Dorwan and Mavy, we sense the abiding love we have for our own husbands, our own wives, our own life partners. Phyllis -- she's our mom or our grandma; Gabe our brother or son. (Applause.) In Judge Roll, we recognize not only a man who prized his family and doing his job well, but also a man who embodied America's fidelity to the law. (Applause.)

And in Gabby -- in Gabby, we see a reflection of our public-spiritedness; that desire to participate in that sometimes frustrating, sometimes contentious, but always necessary and never-ending process to form a more perfect union. (Applause.)

And in Christina -- in Christina we see all of our children. So curious, so trusting, so energetic, so full of magic. So deserving of our love. And so deserving of our good example. If this tragedy prompts reflection and debate -- as it should -- let's make sure it's worthy of those we have lost. (Applause.)

Let's make sure it's not on the usual plane of politics and point-scoring and pettiness that drifts away in the next news cycle. The loss of these wonderful people should make every one of us strive to be better. To be better in our private lives, to be better friends and neighbors and coworkers and parents. And if, as has been discussed in recent days, their death helps usher in more civility in our public discourse, let us remember it is not because a simple lack of civility caused this tragedy -- it did not -- but rather because only a more civil and honest public discourse can help us face up to the challenges of our nation in a way that would make them proud. (Applause.)

We should be civil because we want to live up to the example of public servants like John Roll and Gabby Giffords, who knew first and foremost that we are all Americans, and that we can question each other's ideas without questioning each other's love of country and that our task, working together, is to constantly widen the circle of our concern so that we bequeath the American Dream to future generations. (Applause.)

They believed -- they believed, and I believe that we can be better. Those who died here, those who saved life here -- they help me believe. We may not be able to stop all evil in the world, but I know that how we treat one another, that's entirely up to us. (Applause.) And I believe that for all our imperfections, we are full of decency and goodness, and that the forces that divide us are not as strong as those that unite us. (Applause.)

That's what I believe, in part because that's what a child like Christina Taylor Green believed. (Applause.)

Imagine -- imagine for a moment, here was a young girl who was just becoming aware of our democracy; just beginning to understand the obligations of citizenship; just starting to glimpse the fact that some day she, too, might play a part in shaping her nation's future. She had been elected to her student council. She saw public service as something exciting and hopeful. She was off to meet her congresswoman, someone she was sure was good and important and might be a role model. She saw all this through the eyes of a child, undimmed by the cynicism or vitriol that we adults all too often just take for granted. I want to live up to her expectations. (Applause.) I want our democracy to be as good as Christina imagined it. I want America to be as good as she imagined it. (Applause.)

All of us -- we should do everything we can to make sure this country lives up to our children's expectations. (Applause.)

As has already been mentioned, Christina was given to us on September 11th, 2001, one of 50 babies born that day to be pictured in a book called "Faces of Hope." On either side of her photo in that book were simple wishes for a child's life. "I hope you help those in need," read one. "I hope you know all the words to the National Anthem and sing it with your hand over your heart." (Applause.)

"I hope you jump in rain puddles." If there are rain puddles in Heaven, Christina is jumping in them today. (Applause.)

And here on this Earth -- here on this Earth, we place our hands over our hearts, and we commit ourselves as Americans to forging a country that is forever worthy of her gentle, happy spirit. May God bless and keep those we've lost in restful and eternal peace. May He love and watch over the survivors. And may He bless the United States of America. (Applause.)

2011-01-11T15:35:00.000-08:00

Your BlackBerry or Your Wife

When the Whole Family Is Staring at Screens, Time to Try a Tech Detox

10 Signs Your Devices Are Hurting Your Relationships:

1. You can't get through a meal without emailing, texting or talking on the phone.

2. You look at more than one screen at a time, checking email while watching television, for example.

3. You regularly email or text, other than for something urgent, while your partner or another family member is with you.

4. You sleep with your phone near you, and you check your email or texts while in bed.

5. You log onto your computer while in bed.

6. You have had an argument with a loved one about your use of technology.

7. You text or email while driving.

8. You no longer go outside for fun.

9. You never turn off your phone.

10. When you spend time with your family—a meal, a drive, hanging out—each person is looking at a different screen.

What We're Doing Online

Online activities that Americans engaged in during November 2010, ranked according to the total number of minutes spent and the percentage of online time. Nielsen Co. calculated the ranking based on a panel of 200,000 people age 2 and older, some randomly selected and some recruited online.

Rank	Category	Total Minutes (in billions)	Share of Time
1	Social Networks/Blogs	63.5	23.8%
2	Online Games	26.1	9.8
3	Email	19.9	7.5
4	Portals	10.9	4.1
5	Videos/Movies*	10.7	4.0

Source: Nielsen Co.

* Refers to time spent on video-specific and movie-related websites only. Doesn't include video streamed on other types of sites (i.e. sports or news sites).

When you're out to dinner, does your BlackBerry occupy a seat at the table? Does your spouse ever check email before saying "good morning" to the kids? Does your son sleep with his laptop?

It may be time for a technology cleanse.

Like an extreme diet that cuts out all processed foods for a short period of time with the promise of lasting good health, a technology cleanse means you unplug for a short time with longer-term benefits for your relationships.

But be warned: As with any other diet, it isn't easy.

Diane Broadnax, a 50-year-old clinical trial researcher from Mount Airy, Md., recently became fed up with the way her family dispersed to separate computers each evening. Anika, 4, would watch "Dora the Explorer" on a laptop in the kitchen, while Jasmine, 12, would play with her virtual pets online. Ms. Broadnax's husband, Lonnie Broadnax, 50, went to his home office to watch a sci-fi DVD, and she would make dinner—while checking her email. Many nights, each person would eat in front of his or her respective screen. "Days were going by and we weren't talking," Ms. Broadnax says.

So one evening last November, she gave her family some news. For one week, they would forgo all computerized entertainment—personal email, texting, Facebook, DVDs and online videos (they don't have a regular TV). Computers and devices would be used only for work and homework. Horrified, her 12-year-old said it was no different than being grounded.

Ms. Broadnax persevered: The next night she made her family's favorite dinner (chicken and rice) and set the table with candles. But when everyone sat down to eat, the conversation was stilted. The girls gave one-word answers to their parents' questions. Even the adults felt ill at ease.

"I didn't know what to say, so some stuff came out really awkward," Jasmine recalls. "We all thought, 'We are sitting at the table like we're supposed to, but now what do we do?' " Mr. Broadnax, a Web designer, says. The meal was so uncomfortable that the family skipped the molten chocolate cake Ms. Broadnax made for dessert. Afterward, Mr. Broadnax read a book. Jasmine went to her room. Anika played with toys in the kitchen while her mom cleaned up and made a few work phone calls.

For all our constant connectivity, our electronic devices often keep us apart. Texting causes misunderstandings. Facebook makes us jealous. Television makes us too lazy or tired or distracted for sex. (Don't believe me? A few years ago, an Italian study showed that couples who have a TV in the bedroom have sex half as often as those who do not.)

Some therapists prescribe tech cleanses for clients. Sharon Gilchrest O'Neill, a Mount Kisco, N.Y., marriage and family therapist, says technology is a distraction from family—and hard to resist because it's portable and provides instant gratification. It's also an easy escape if we're having trouble in a relationship. "Technology should be on the list of the top reasons why people divorce, along with money, sex and parenting," she says. She has seen couples who communicate almost entirely through text, email and phone messages. "There has to be some time in the week when you are all together and you shut off the technology," she says.

Last year, a group of Jewish artists and media professionals created the Sabbath Manifesto, a list of 10 principles to be followed one day a week in order to unwind. High on the list: "Avoid Technology." The group has declared a National Day of Unplugging, from sundown on Friday, March 4, until sundown on Saturday, March 5. Even the Dunphys, on hit TV sitcom "Modern Family," tried to go a week tech-free.

In "The Winter of Our Disconnect," a book coming out later this month, author Susan Maushart describes the technology fast she undertook with her three teenagers. Ms. Maushart says she was so attached to her iPhone that she slept with it under her pillow and started buying it "little outfits and jewelry." Her then-15-year-old son was addicted to videogames, and her 14- and 18-year-old daughters were consumed by social media.

"It got to the point where we would inhabit the same room, but we weren't connecting," says Ms. Maushart, 52, of Mattituck, N.Y.

For six months while living in Australia in 2009, she and her children unplugged everything with a screen. For entertainment, they went to the movies, ate family meals, played board games and read the newspaper on Saturday mornings. Her son rediscovered his saxophone. Her daughters began cooking and wrote a novel together.

To ensure her kids' participation, Ms. Maushart promised each a portion of her book proceeds. Her 14-year-old tired of the technology freeze and moved in with her father for six weeks (she eventually moved back). The trial was worth it. "We appreciate each other more," says Ms. Maushart.

Interested in a tech cleanse? Here are some tips from people who have learned from experience.

Give your family advance warning. They need time to prepare mentally.

Clarify your goal: Be careful not to swap technology use for some other isolating activity.

Wean yourself off gadgets gradually. Maybe a week—or even just one day—is too long to go unconnected at first.

Start when your kids are young. Rob and Lauren Webster tried a tech fast last year after realizing how often they plopped their kids, ages 1 and 2, in front of cartoons to keep them quiet. "I really don't want to screw up my kids," says Mr. Webster, 39, director of video production at a church in Leawood, Kan. When they unplugged and took the children to the park, "we found ourselves constantly engaged with our kids and with each other," he says.

Be clear on the rules. Will calls and emails for work be allowed? What about going online for homework? What are the consequences for cheating?

Let technology help you disconnect. Use Facebook, Twitter or email to tell friends and family that you will be offline. Have emails sent to your inbox in batches.

Make the bedroom a media-free zone.

When the cleanse is done, learn to avoid the time-suck of letting one Internet search lead to another and another. You can waste hours.

Allow only one screen at a time. Give the TV, for example, your full attention, rather than also looking at your computer and iPhone.

The Broadnax family extended their tech cleanse for five days. Then one evening, Ms. Broadnax came home from work and found her husband and two daughters playing a trivia game, moving pieces around a game board and reading questions off the computer screen. All three were laughing. "Here was an almost perfect solution," says Ms. Broadnax. "It was family interaction with technology. The screen was there, but it wasn't the focal point."

SOURCE: http://online.wsj.com/article/SB10001424052748703779704576073801833991620.html

2011-01-11T10:29:00.000-08:00

Poll: Charged speech not to blame for Arizona attacks

By: CNN Ticker Producer Alexander Mooney

(CNN) -Amid discussion an increasingly charged political atmosphere may have motivated the shootings in Arizona, a new national poll suggests a majority of Americans believe the heated rhetoric of late played no role in the tragedy that critically injured a congresswoman and left six dead.

According to a new CBS poll, 57 percent of Americans say political vitriol did not contribute to the attacks allegedly committed by 22 year-old Jared Loughner; 32 percent felt it did.

Broken down by party, 69 percent of Republicans said heated political dialogue played no role, while 19 percent said it did. Democrats were more mixed on the issue: 49 percent said there was no link while 42 percent believed there was. Fifty-six percent of independents meanwhile said there was no connection while 33 percent said there was.

The poll surveyed 673 adults by telephone and carries a sampling error of 4 percent.

SOURCE: http://politicalticker.blogs.cnn.com/2011/01/11/poll-charged-speech-not-to-blame-for-arizona-attacks/

2011-01-10T22:42:00.000-08:00

Limbaugh says Dems playing politics with Giffords shooting

CNN Ticker Producer Alexander Mooney

Washington (CNN) - Conservative talk radio host Rush Limbaugh offered a vigorous defense of himself and Sarah Palin Monday in response to claims from some media commentators and those on the left that some of their charged statements and colorful language may have inspired the Arizona shootings.

"[The media] is unnecessarily stirring up the country in ways that don't merit," Limbaugh said on his radio program Monday. "It's fatuous and silly to even verify and justify these accusations by defending them. The premise is insane, it's silly, it's beneath these people. Or is it? It is who they are."

Limbaugh's comments come in response to accusations that the charged political atmosphere of 2010 – of which Limbaugh, Palin, and others played a central role – may have incited the use of violence among troubled individuals like Jared Lee Loughner, the suspect that is accused of opening fire outside a Tucson supermarket, where Rep. Gabrielle Giffords was meeting with constituents Saturday.

"We are we constantly admonished not to rush to conclusions. Now…reporters are bending over backwards to link this shooting to me, to Sarah Palin, to an entire industry - talk radio," Limbaugh said. "Only in these instances is something said in the media said to influence public behavior. Go out and try to tell these same people that one of their top grossing movies has influenced has influenced abject perversion or radical behavior and they will attack you left and right.

"All of this has been pure politics, disguised as compassion and concern for a congresswoman," Limbaugh added.

SOURCE: http://politicalticker.blogs.cnn.com/2011/01/10/limbaugh-says-dems-playing-politics-with-giffords-shooting/

2011-01-01T22:01:00.000-08:00

Almost Everything Is A Crime In America Now: 14 Of The Most Ridiculous Things That Americans Are Being Arrested For.

by JosephE, on Wed Dec 29, 2010 2:06pm PST

Doesn’t it seem like almost everything is becoming a crime in America now? Americans are being arrested and charged with crimes for doing things like leaving dog poop on the ground, opening up Christmas presents early, not recycling properly, farting in class and having brown lawns. But is it healthy for our society for the police to be involved in such silly things? Every single day the United States inches closer to becoming a totalitarian society.

While there are some that would welcome this shift, the truth is that throughout history the societies that have experienced the greatest economic prosperity have all had at least a certain level of freedom. Business thrives when people feel free to live and work. When a government tightens the grip too much many people just start shutting down. Just look at places like North Korea. Even though the rest of the world is sending them huge amounts of food starvation is still quite common in that totalitarian regime.

That is why it is so disturbing that it seems like almost everything has become a crime in America now. As we continue to criminalize relatively normal behavior our slide toward becoming a totalitarian state will only accelerate.

We are throwing anyone and everyone in prison these days. It is getting absolutely ridiculous. Today, the United States leads the world in the number of prisoners and in the percentage of the population in prison. The United States has 5% of the world’s population, but approximately 25% of the world’s incarcerated population.

According to the U.S. Bureau of Justice Statistics, as of the end of 2009 a total of 7,225,800 people were either on probation, in prison or on parole in America.

That is a sign of a very, very sick society. Either we have a massive crime problem or the “control grid” that our leaders have erected for us is wildly out of control.

Or both.

But how in the world are we supposed to have a healthy economy if our entire nation is being turned into one gigantic prison?

Sadly, it is not just hardcore criminals that are being rounded up and abused by authorities these days. The following are 14 of the most ridiculous things that Americans are being arrested for….

#1 A Michigan man has been charged with a felony and could face up to 5 years in prison for reading his wife’s email.

#2 A 49-year-old Queens woman had bruises all over her body after she was handcuffed, arrested and brutally beaten by NYPD officers. So what was her offense? The officers thought that her little dog had left some poop that she didn’t clean up.

#3 A 56-year-old woman who was once a rape victim refused to let airport security officials feel her breasts so she was thrown to the floor, put in handcuffs and arrested.

#4 In Milwaukee, one man was recently fined $500 for swearing on a public bus.

#5 Several years ago a 12-year-old boy in South Carolina was actually arrested by police for opening up a Christmas present early against his family’s wishes.

#6 In some areas of the country, it is now a crime to not recycle properly. For example, the city of Cleveland has announced plans to sort through trash cans to ensure that people are actually recycling according to city guidelines.

#7 A 12-year-old girl from Queens was arrested earlier this year and taken out of her school in handcuffs for writing “Lex was here. 2/1/10″ and “I love my friends Abby and Faith” on her desk.

#8 Back in 2008, a 13-year-old boy in Florida was actually arrested by police for farting in class.

#9 The feds recently raided an Amish farmer at 5 AM in the morning because they claimed that he was was engaged in the interstate sale of raw milk in violation of federal law.

#10 A few years ago a 10-year-old girl was arrested and charged with a felony for bringing a small steak knife to school. It turns out that all she wanted to do was to cut up her lunch so that she could eat it.

#11 On June 18th, two Christians decided that they would peacefully pass out copies of the gospel of John on a public sidewalk outside a public Islamic festival in Dearborn, Michigan and within three minutes 8 policemen surrounded them and placed them under arrest.

#12 A U.S. District Court judge slapped a 5oo dollar fine on Massachusetts fisherman Robert J. Eldridge for untangling a giant whale from his nets and setting it free. So what was his crime? Well, according to the court, Eldridge was supposed to call state authorities and wait for them do it.

#13 Once upon a time, a food fight in the cafeteria may have gotten you a detention. Now it may get you locked up. About a year ago, 25 students between the ages of 11 and 15 at a school in Chicago were taken into custody by police for being involved in a huge food fight in the school cafeteria.

#14 A few years ago a 70 year old grandmother was actually put in handcuffs and hauled off to jail for having a brown lawn.

Why in the world would anyone approve of the police arresting ordinary Americans for such things?

It seems like ever since 9/11 the whole country has gotten “security fever”.

Suddenly we need to “get tough” on everyone.

Yes, crime is making a comeback, but once upon a time the police in this country were able to handle crime quite well and be courteous and helpful to ordinary citizens at the same time.

But today it seems like nearly every single encounter with police ends up being negative.

It does not have to be that way.

The rest of the world sees what is going on in this country and many of them are deciding that they simply do not want to spend their tourist dollars here anymore. That is not a good thing for our economy.

As the government continues to get even bigger and exerts even more control over our lives, many of our own people are getting sick of it and are moving abroad.

America used to be the land of the free and the home of the brave.

That is no longer true.

Now we get thrown to the floor, handcuffed, beaten and arrested for things that we did not even know were crimes.

If America continues to move in this direction it is going to ruin our economy, our reputation in the world and our national spirit.

Unfortunately, history has shown us that once a free nation starts to lose that freedom it is hard to reverse that slide. Perhaps we will be different. Perhaps the American people will stand up and demand that we restore the principles of liberty and freedom that this country was founded on.

Do you think that will happen?

SOURCE:

http://shine.yahoo.com/channel/none/almost-everything-is-a-crime-in-america-now-14-of-the-most-ridiculous-things-that-americans-are-being-arrested-for-2433914/

2010-12-17T11:16:00.000-08:00

Tax cut deal: How it affects you

By Jeanne Sahadi, senior writerDecember 17, 2010: 1:16 PM ET

NEW YORK (CNNMoney.com) -- Now that Congress has passed the Tax Hike Prevention Act of 2010, it will be sent to President Obama for his signature. And taxpayers will have some certainty about their tax situation, if only for the next 24 months.

The bill contains a bevy of tax breaks -- new and extended -- and emergency help for the jobless. Its cost over 10 years is estimated at $858 billion.

Here's a rundown of some of the biggest ticket items that will affect individuals. (Except where noted, all provisions are for 2011 and 2012).

Extended income tax rates: $207.5 billion The six federal income tax rates will remain at the same levels they are today: 10%, 15%, 25%, 28%, 33% and 35%. In addition, itemized deductions will continue to be allowed in full for high-income taxpayers.

AMT fix: $137 billion More than 20 million tax filers will be protected from having to pay the so-called "wealth tax," otherwise known as the Alternative Minimum Tax.

For tax year 2010, the bill will raise the amount of income that is exempt from the reach of the AMT to $47,450 for individuals and to $72,450 for couples filing jointly. In 2011, those exemption amounts will increase to $48,450 and $74,450 respectively.

In addition, the bill will allow taxpayers to apply nonrefundable credits (which reduce one's tax bill dollar for dollar) to their tax liability -- whether under the AMT or the regular tax code.

Social Security tax break: $112 billion Workers will get a 2 percentage-point break on their payroll tax for one year. Instead of paying 6.2% on wages up to $106,800, they will only have to pay 4.2% in 2011.

What Social Security break means for your paycheck

This tax break replaces the Making Work Pay credit, which expires this year.

Unlike Making Work Pay, which was limited to workers making less than $75,000 ($150,000 for couples), the payroll tax holiday will be available to everyone who pays into Social Security.

Expanded child tax credit: $90 billion The bill will retain the $1,000 child tax credit (up from $500 before the Bush tax cuts). It also will retain the reduced-earnings threshold, which allows more people to claim the credit as refundable.

A refundable tax credit is one paid to a tax filer even if the value of the credit exceeds his tax liability. So if a filer doesn't owe any federal income tax but qualifies for the credit, it is paid to him in the form of a refund.

Smaller estate tax: $68 billion Barring any changes, the estate tax in 2011 and 2012 will be reinstated at an exemption level of $1 million and a top rate of 55%. But under the bill, the exemption level will be raised to $5 million and the top rate lowered to 35%.

The legislation will also reinstate the so-called "step up in basis" for beneficiaries of those who die in 2010, 2011 or 2012. A stepped-up basis means that when someone sells an inherited asset, his capital gains tax bill will be based on the asset's price the day he inherited it, rather than when the decedent originally bought it.

Practically speaking that means the beneficiaries of those who died in 2010 will be allowed to choose which estate tax rules to follow -- those of 2011 or those of 2010. Under 2010 rules, there is no estate tax but also no step-up rules; there is only an option to exempt $1.3 million worth of capital gains from tax.

Help for the jobless: $57 billion The unemployed will get a 13-month extension of the deadline to file for additional unemployment benefits -- which go as high as 99 weeks in states hit hardest by job loss.

Extended investment tax rates: $53 billion Everybody will get to keep their low investment tax rates for the next two years. For most people, that means their qualified capital gains and dividends will continue to be taxed at 15%.

Low-income tax filers (those in the 10% and 15% brackets), however, will continue to enjoy a 0% tax rate on their capital gains or dividends.

Marriage penalty relief: $27 billion Marriage will still be hard (sorry), but not because less-than-wealthy two-earner couples will owe more to the IRS than they did when they were single.

The bill continues to ensure that the standard deduction for couples is exactly twice that for single filers. It also maintains an expanded 15% tax bracket so that the amount of income in that bracket for joint filers is exactly double that for single filers.

Expanded college credit: $18 billion Paying for college tuition in 2011 and 2012 will be made a bit easier with the retention of the American Opportunity tax credit, which is an expansion of the HOPE tax credit.

The Opportunity credit is worth up to $2,500 (up to 100% of the first $2,000 spent and up to 25% of the next $2,500), and it may be claimed for four years' worth of college. Eligibility to take the credit is limited to those with modified adjusted gross income below $90,000 ($180,000 for couples filing jointly).

Individual tax break extensions: Costs vary The legislation will extend a number of tax breaks that have been introduced in the past few years such as the option to deduct on one's federal return state and local sales tax instead of state and local income tax -- at a cost of $6 billion. Also, it will extend a deduction for qualified tuition and other education-related expenses at a cost of $1.2 billion.

Less pricey extensions include a break for teachers to deduct up to $250 in classroom expenses (just under $400 million).

SOURCE: http://money.cnn.com/2010/12/15/news/economy/tax_deal_what_is_in_bill/index.htm?hpt=T1

I Report U Decide Not "We Report You Decide"

Obama Approval Above 50% in 10 States and D.C. in 2011

Obama Approval Above 50% in 10 States and D.C. in 2011

District of Columbia, Hawaii most approving; Utah, Idaho, least

Mississippi Most Conservative State, D.C. Most Liberal

Mississippi Most Conservative State, D.C. Most Liberal

State patterns in ideology largely stable compared with previous years

Arizona pension systems a soaring burden

Arizona pension systems a soaring burden

Craig Harris The Arizona Republic

Well paid

Calls for reform

How pensions work

Insufficient funds

Big payouts

Public costs

Solutions

Biggest Holders of US Government Debt

Private-Equity Payday: Carlyle Founders Get $402 Million

By GREGORY ZUCKERMAN And RYAN DEZEMBER

Is Gold Rally Finally Over? What History Tells Investors

A Gold Rush Wanes as Hedge Funds Sell

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Obama's jobs speech transcript

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Eric Cantor: Congress will find the money for earthquake aid

Buffett's one-day win on Bank of America: $357 million

A Major Opportunity for Oil Bulls

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'Made in China' makes money for the U.S.A.

Treasures in the Trash: 8 Stocks That Were Oversold

Yoshikami: Computers Are Killing Us Investors

PIMCO: Treasury market reflects likelihood of recession

Gold, Oil & the Dollar: Correlation Breakdown Is Concerning Says Yamada

Paddypower odds BO 4/6, RP 7/2, MR 5/1

College: Expensive, but a smart choice

It's expensive and no job is guaranteed at the end, but research shows that college could easily be the best investment you ever make.

20 Largest Point Gains in Dow's History

Historic Returns Following a Market Selloff

Was S&P downgrade an act of revenge?

Odds to win the 2012 Super Bowl

Team

Open

5/1/11

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7/1/11

8/1/11

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Are the CBO's U.S. Debt Burden Projections Overly Optimistic?

Gold Short ETFs a Solid Contrarian Debt Ceiling Bet

Quick Debt-Ceiling Fix Impeded By Congress' Tricky Rules

Criminal immigrant deportations way up

Friday, April 22, 2011

Death-row lawyer: Nebraska bought lethal-injection drug from rogue broker

Fed Scorecard: Five Ways QE2 Worked—And Where It Failed

US Is in Even Worse Shape Financially Than Greece: Gross

Cost of Illegal Immigrants

Sources

Whatever You Do, Don't Buy an Airline Ticket On …

By SCOTT MCCARTNEY

China: The new landlord of the U.S.

Your BlackBerry or Your Wife

When the Whole Family Is Staring at Screens, Time to Try a Tech Detox

What We're Doing Online

Tax cut deal: How it affects you