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Aug 2, 2010

BBC BUSINESS NEWS: The UK's biggest bank, HSBC, says its profits doubled in the first half of the year to $11.1bn (£7bn). July 2nd., 2010

3 August 2010 Last updated at 01:26 GMT

HSBC sees profits double to $11bnA worker is silhouetted against an illuminated sign in a branch of HSBC in the City of London

The UK's biggest bank, HSBC, says its profits doubled in the first half of the year to $11.1bn (£7bn).

FGC BOLSA - FGC FINANCIAL MARKETS : MarketWatch - Industry - Financial Services.-China´s top banks ease their lending in July / China Central Bank Wants Convertible Yuan. August 2nd., 2010


Caixin Online: China's top banks ease their lending in July
By Wen Xiu Caixin Online

China's four biggest banks lend a total of $35.9 billion in July, easing back from levels earlier this year. See full story

Caixin Online: China's central bank still wants convertible yuan

By Hu Shuli Caixin Online

A deputy governor for China's central bank says a convertible yuan remains the ultimate goal for the nation, though he doesn't offer a timetable, according to an interview in Caixin Online. See full story

ABC News : Australia Business News.- Geely completes Volvo takeover

Geely completes Volvo takeover
Chinese car maker Geely Holdings says it has formally completed a deal to buy Sweden's Volvo Cars from US auto giant Ford.

Wall Street hits 10-week closing high
Stocks in the United States reached their highest closing level in 10 weeks, overnight, with a fall in the US dollar boosting energy and raw materials shares.

Committee rejects West Hobart bottle shop
A Hobart City Council Committee has rejected a controversial plan for a bottle shop at a West Hobart service station site.

More Australian Stories > 

MarketWatch : Personal Finance Daily.- Retirement savings? Place your bets. August 2nd., 2010.

Personal Finance Daily
AUGUST 02, 2010

Monday's Personal Finance stories

By MarketWatch

Don't miss these top stories:
How lucky are you? The answer to that question may go a long way in determining how well your investments perform, and how well prepared you are for retirement when that day arrives.

As MarketWatch's Sam Mamudi writes, the year in which you happen to start investing for retirement has a lot to do with how much money you earn -- or lose -- over the next 30 or 40 years. Read Sam's story for more on just how much of a difference a year or two can make in your retirement outlook.

Yet the fact that we have no control over the vagaries of the financial markets isn't an excuse to give up. You know the mantra: Save early, often and a lot, and choose low-cost, diversified investments.

Of course, after the most recent crash, when it was hard to find an asset that did well, we all became acutely aware of just how much a gamble it is to invest in the market. For some, that meant quitting stocks entirely. For me, until I get a lot closer to retirement, I'm still gambling.

-- Andrea Coombes , Personal Finance editor

The one missing ingredient: luck

Investors saving for retirement can find mutual funds that invest in almost any kind of asset, but they can't buy the one thing that will have the biggest impact on their nest egg: luck.
See Mutual Understanding on the one missing investing ingredient: luck.


Stores lure back-to-school shoppers with new tools, tricks

As retailers head into the critical back-to-school season, the industry's second-biggest selling period, they're using new tools and deals to spur consumers to buy. They also hope exclusive products such as Madonna's Material Girl line at Macy's Inc. (M) and trends such as skinny jeans, so-called jeggings and iPads will spur demand.
See story on stores shift gears to lure back-to-school shoppers.

Back-to-school shopping: It's all on your phone

When students and their parents hit the shopping malls for their back-to-school needs this year, they should be armed with their lists -- and their mobile phones.
See story on back-to-school shopping - it's all on your phone.


Mortgage shopping is getting safer

In some parts of the country, it doesn't take much to become a mortgage-loan officer -- not a license, not much training. That's changing.
See Amy Hoak's Home Economics on mortgage shopping is getting safer.


Time to quit your old 401(k)?

Financial planner Rick Brooks increasingly finds himself tangling with what he and his colleagues call "yapping dogs." Not the canine variety, but the 401(k) type -- those pesky retirement accounts many people leave behind in their ex-employers' 401(k) plans when they change jobs.
See story on is it time to quit your old 401(k)?

A cheaper choice in 401(k) plans

An increasing number of 401(k) plans offer investment options that look a lot like typical mutual funds. But they're actually a whole different animal, and investors would be smart to know the difference.
See story on a cheaper choice in 401(k) plans.


Three stocks that stand the test of time

If you listen to the pundits, almost everything you hear these days is talk of market uncertainty -- and that's clearly supported by a look at the shorter-term charts and checks of the leading volatility indexes.
See story on three stocks that stand the test of time.

Commentary: Marketing charges will keep haunting fund investors

Mutual-fund fees are like zombies: They're mighty tough to kill.
See story on marketing charges will keep haunting fund investors.

Special Report: Trading Strategies

Investors are weary, but August is no time to get complacent. As earnings results offer clues about the economy, our experts will help you get through the summer with your profits intact.
See Special Report: Trading Strategies.

Commentary: Proactive Fund Investor newsletter celebrates 5-year win

The first five years of the Proactive Fund Investor have yielded some key lessons about succeeding in today's unpredictable markets.
See Proactive Fund Investor newsletter celebrates five-year win.

Commentary: Battered bull sees Dow 14,000 next year

A jagged July ends positive, and two battered bulls feel vindicated.
See story on battered bull sees Dow 14,000 next year.


The 2011 Ford Explorer

Going to the unveiling of a new vehicle is always fun, but less so in this world of spy photos instantly available on the Net.
See story on the 2011 Ford Explorer.

The 2011 Mercedes Benz E550 Cabriolet

Mother Nature did not care one whit about the fancy engineering in this car or the special devices that keep one's hair from being tossed about when the roof is down.
See story on the 2011 Mercedes Benz E550 Cabriolet.

How not to buy a car

Buying your first car? Be sure to arm yourself with research before trotting off to the dealership.

See story on how not to buy a car.


Is Kerry an unwitting icon for Bush tax cuts?

Sen. John Kerry is once again at the forefront of a national debate on whether to raise taxes on the rich -- but not in the way he intended.
See story on is Kerry unwitting icon for Bush tax cuts.

States should build bigger buffers, Bernanke says

Federal Reserve Chairman Ben Bernanke on Monday called for states to build up larger rainy-day funds, as he said consumer spending is set to sustain the economic recovery.
See story on states should build bigger buffers, Bernanke says.

Geithner: Bank reform can't move at a glacial pace

Bank and securities regulators need to move quickly to write rules based on sweeping bank-reform legislation approved in the wake of the financial crisis, Treasury Secretary Timothy Geithner said in remarks to be delivered Monday.
See story on bank reform can't move at a glacial pace.

Only slow job growth seen in July

Only a small portion of the 14.6 million unemployed Americans likely found jobs in July, economists say, as businesses continue to be cautious about hiring in the face of forecasts of anemic growth for the rest of the year -- and as much high-tech production has moved overseas.
See story on only slow job growth expected in July.


Becoming the boss can cost plenty

In late 2007, Taylor Senatore and Jennifer Frank withdrew most of their personal savings (a combined $250,000) to launch California Wine Merchants in New York. The duo, who teamed up after discovering by chance that they shared the same entrepreneurial goal, figured that amount would cover all of their startup costs and even leave change to spare.
Publish Post
See story on becoming the boss can cost plenty.

CNBC : Evening Brief: Morgan Stanley To Spin Off FrontPoint Partners. August 2nd., 2010


»click here to see the latest top stories from


Stop Trading! Listen to Cramer
Mad Money host Jim Cramer shares his thoughts on the markets.
» Watch Video

$1.4T Worth of Advice
Vanguard Group led the fund industry with net cash inflow of
$44 billion year-to-date,
with Bill McNabb, Vanguard Group CEO.
» Watch Video  

Show Me Your Alpha
Best ideas to beat the market, with Abby Joseph Cohen, Goldman Sachs.
» Watch Video 

 Extend Bush Tax Cuts?
Making the case for extending the Bush tax cuts for the wealthy, with Arthur Laffer,
Laffer Associates and Roger Altman, Evercore Capital Partners.
» Watch Video


Maria Baritomo's Investor Brief. August 2nd., 2010


Progress on Jobs?

The slow pace of the recovery has kept a lid on job growth, which impacts consumer spending — the primary engine of economic growth. This Friday will be a big day as we’ll learn the latest unemployment rate for July. Here’s what to look for.

Maria's Investor Brief: August 2, 2010

WSJ DEALS ALERT: Kinross Gold to Acquire Red Back. August 2nd., 2010

Deals Alert
from The Wall Street Journal

Kinross Gold has agreed to acquire the 91% of Red Back Mining it doesn't already own, valuing the company at $7.1 billion.

The deal comes as commodity prices remain strong. Kinross will add two "well-established" mines and give the combined company 10 operating mines and four projects in development.

To read full  article , click HERE

NYT : Afternoon Business Update.- Toughest job in Hungary. August 2nd., 2010


Toughest Job in Hungary?

Andras Simor, the governor of the Hungarian Central Bank, must deal with being blamed for the stagnant economy even as his salary has been slashed.


Upbeat Economic Reports Help Lift Shares

Stocks added to their already big gains on strong reports on the manufacturing and construction industries.

South Africa Tries to Climb the Industrial Ladder

A new breed of successful entrepreneurs are optimistic that they can change perceptions of the country as an unstable business environment - with a helping hand from the government.

Chinese Carmaker Completes Purchase of Volvo

 Zhejiang Geely Holding Group also named a chief to run Volvo, the last of a group of premium brands that Ford has sold.
Media Decoder Blog


Newsweek Deal Is Nearly Complete

The deal to sell Newsweek magazine to Sidney Harman could be finalized as early as today.

RTTNews: Evening Market Wrap.- Stocks Rally On Better Than Forecast ISM Number, Earnings - U.S. Commentary

Evening Market Wrap Mon Aug 2 17:01 2010 


Aug 2, 2010 Stocks Rally On Better Than Forecast ISM Number, Earnings - U.S. Commentary Stocks shot higher to open August trading on Monday, as news of continued expansion in the U.S. manufacturing sector albeit at a slower pace helped to drive buying interest along with a solid batch of earnings. The Dow and the S&P 500 finished at their best closing levels in two and a half months while the Nasdaq remained in a recent range. Full Article

Economic News

Aug 2, 2010 Bernanke: Full Recovery Still Far Off As Risks Persist Federal Reserve Chairman Ben Bernanke said Monday that though conditions have become less supportive of economic growth in recent months, the U.S. economy should still expand at a moderate pace. The U.S. still has a "considerable" way to go before a full recovery is achieved, Bernanke told a meeting of the Southern Legislative Conference in Charleston, South Carolina. Full Article
Aug 2, 2010 ISM Manufacturing Index Indicates Continued Growth In July Manufacturing activity in the month of July expanded at a slower pace than in the previous month, the Institute for Supply Management revealed in a report on Monday, although the index of activity in the sector fell by less than economists had expected. Full Article
Aug 2, 2010 Construction Spending Edges Up By 0.1% In June With an increase in spending on public construction more than offsetting a decrease in spending on private construction, the Commerce Department released a report on Monday showing an unexpected increase in total construction spending in the month of June. Full Article

Earnings News

Aug 2, 2010 NRG Energy Q2 Profit Falls - Update Electric utility NRG Energy, Inc. (NRG) reported Monday a sharp decline in second-quarter profit, reflecting lower operating revenues, reduced derivative gain, along with the absence of a sale gain last year. Further, the Fortune 500 company lifted its adjusted EBITDA view for the fiscal 2010. Full Article
Aug 2, 2010 Humana's Q2 Better Than Expected , Lifts FY'10 EPS Outlook - Update Monday, Humana Inc. (HUM), a health and supplemental benefits company, reported better-than-expected second-quarter profit , helped by 10% revenue growth as average membership for the company's Medicare Advantage plans increased and pricing discipline across all its lines of business continued. Full Article

Corporate News

Aug 2, 2010 AT&T, Verizon Planning Payment System To Rival Credit Cards: Report AT&T, Inc. (T) and Verizon Communications, Inc. (VZ) are in talks with major network carriers to provide contactless mobile payments system to its customers as a substitute to debit and credit cards, Bloomberg reported The move could threaten the very existence of payment transaction companies like MasterCard, Inc. (MA) and Visa, Inc. (V). Full Article


Aug 2, 2010 Crude Jumps Above $81 As Dollar Tumbles Crude prices surged above $80 a barrel on Monday, hitting their highest level since May as the dollar plunged and stocks soared on Wall Street. Convinced that the Federal Reserve is about to embark on a program of quantitative easing to prop up the slumping economy, traders sold off the dollar in favor of other assets, including commodities. Full Article

Forex Top Story

Aug 2, 2010 Dollar Pounded Versus European Majors As Economic Woes Mount The bottom fell out on the dollar Monday after Federal Reserve Chairman Ben Bernanke suggested the economy is a long way from a full recovery, fueling speculation the central bank will ramp up quantitative easing. The dollar was already taking a beating against the sterling and loonie before Bernanke's remarks to a southern leadership conference in South Carolina, then plunged versus the euro as Wall Street digested his dovish words. Full Article

Political News

Aug 2, 2010 McCain Places Hold On Nomination Of Clapper As Intelligence Chief While retired Gen. James Clapper had seemed on track for swift confirmation as the next Director of National Intelligence after the Senate Intelligence Committee unanimously voted to send his nomination to the full Senate, Sen. John McCain, R-Ariz., has put a hold on the nomination. Full Article
Aug 2, 2010 Obama Looks Ahead To End Of U.S. Combat Mission In IraqPresident Barack Obama Monday outlined his strategy for drawing down the American presence in Iraq. Speaking at the conference of the Disabled Veterans of America, Obama said that the veterans of the nation's wars in Iraq and Afghanistan have written their own chapter in American history and have earned their own place among the greatest of generations. Full Article

FOX BUSINESS . Breaking News.- Stocks Sizzle Into August. August 2nd., 2010

05 2010 Traders 06 276
Stocks Sizzle Into AugustThe Dow kicked off the month with a bang in the wake of strong financial earnings out of Europe.

New Jersey's Plan of Attack

Is the World Broke? A look at whether the Garden State is making the right economic moves.

Geithner Dodges Tax Cut Questions

EXCLUSIVE In a brief interview with FBN's Charlie Gasparino, the Treasury Secretary refused questions about the expiration of the Bush tax cuts.

SEC to Public: 'Trust Us'

The SEC is taking steps to not abuse its new-found powers of not having to comply with FOIA requests.

Great Player, Not-So-Hot Coach

Just because you like what you do doesn’t mean you will like teaching others how to do it.

FOX BUSINESS : Breaking News .- Dow Jumps on Data. August 2nd., 2010

Stock Trader [276]
Dow Jumps on DataThe bulls wasted little time in establishing themselves in August as the Dow soared nearly 200 points on economic data.


China Slows to Cruising Speed

Is the World Broke? Manufacturing in China shrank in July for the first time since March 2009.

Manufacturing Sector Expands in July

The manufacturing sector grew for the twelfth straight month at a better-than-expected rate.

Goldman Still on Defense

The bank said it believed its trades with AIG during the financial crisis were accurate.

HSBC Profit Tops Forecasts

The bank's half-year profit more than doubled from a year ago to easily beat analysts' expectations.

SEC to Public: 'Trust Us'

The SEC is taking steps to not abuse its new-found powers of not having to comply with FOIA requests.

Real Clear Pollitics : August 2nd., 2010

Real Clear Politics Monday

Government is Defining Prosperity Down - Paul Krugman, New York Times
Why Obama's Policies are Bad for Business - John Chettle, Weekly Standard
We Can't Afford the Bush Tax Cuts - Fareed Zakaria, Newsweek
The Soak-the-Rich Catch-22 - Arthur Laffer, Wall Street Journal
Why Both Sides Want an Economic Fight - John Harwood, New York Times
ObamaCare Looks Worse Upon Further Review - Kevin Hassett, Bloomberg
How Big Govt Saved the Auto Industry - E.J. Dionne, Washington Post
Voters Want to Put Big Government on a Diet - Michael Barone, Examiner
Democrats Confront Changed Map in 2010 - Rick Klein, ABC News
Ethics Battles a Threat to Dems - Herzenshorn & Hulse, New York Times
Just How Broken is the Senate? - George Packer, The New Yorker
Rep. Ryan Boldly Pushes Budget Reform - Perry Bacon Jr., Washington Post
Hateful Ground Zero Hypocrisy - Peter Beinart, The Daily Beast
Obama's Immigration Power Play - James Antle, The American Spectator
Obama Should Put Hillary on Ticket for 2012 - Doug Wilder, Politico
On the GOP Precampaign Trail - Ross Douthat, New York Times
Journalism's Crossfire Culture - Howard Kurtz, Washington Post
Election 2010: The Tancredo Effect In Colorado


The Death of Cap and Tax - Wall Street Journal
The Truth About Global Warming - Washington Post
Hamas's Violent Message - Jerusalem Post
Tax Increases Are No Way to Start Fighting Debt - Chicago Tribune

RTTNews: Daily Market Analysis.- Manufacturing Data Eyed Even As Earnings Enthuse . August 2nd., 2010

Daily Market Analysis Mon Aug 2 09:11 2010 

Aug 2, 2010 Manufacturing Data Eyed Even As Earnings Enthuse - RTTNews Daily Market Analysis The major U.S. index futures are pointing to a higher opening on Monday in a sign that August may be off to a flying start. Earnings, which supported the markets to a larger extent in July, continue to be upbeat. Financial firms HSBC Holdings and BNP Paribas reported forecast beating-results, catalyzing a strong upward move in the European markets. Earlier in the day, the Asian markets also closed higher. Full Article

RTTNews : Morning Market Briefing.- Earnings Boost Stock Futures In Pre-Market Trading - U.S. Commentary. August 2nd., 2010

Morning Market Briefing Mon Aug 2 09:01 2010 


Aug 2, 2010 Earnings Boost Stock Futures In Pre-Market Trading - U.S. Commentary Stocks futures are point to a higher opening Monday morning amid some optimism based on earnings from HSBC Holdings (HBC), while the markets are also awaiting data on national manufacturing activity and construction spending. The major index futures are all in positive territory, with the Dow futures up by 102 points. Full Article

Economic News

Aug 2, 2010 Eurozone Manufacturing Growth Picks Up In July Eurozone manufacturing activity showed strong momentum in July, led by a growth spurt in Germany, suggesting robust economic expansion at the beginning of the third quarter, a closely watched survey showed Monday. Full Article
Aug 2, 2010 Chinese Manufacturing Activity Contracts For First Time In 16 MonthsChinese manufacturing activity deteriorated for the first time in 16 months in July, fresh data suggested on Monday, with the contraction in activity blamed on lacklustre demand in both the domestic and external sectors. Full Article
Aug 2, 2010 U.K. Manufacturing Growth Remains Robust In July An indicator of health in the British manufacturing sector decreased to a 5-month low in July but remained well above the survey average, indicating continuing recovery in the manufacturing sector. Elsewhere, an industry body warned that the manufacturing recovery could be derailed by the government's austerity measures. Full Article
Aug 2, 2010 Cautious Consumers Set Pace For Soft GrowthWeak consumer spending is seen as the main reason for the wobbly nature of the current recovery. Full Article

Earnings News

Aug 2, 2010 NRG Energy Q2 profit halves, yet beats estimateMonday, NRG Energy, Inc. (NRG) said its second-quarter profit halved from last year, hurt by a 4.6% decrease in revenue and the absence of a huge gain on sale of equity investment that benefited year-ago results. Earnings per share came in above the Street view, while revenue surpassed expectations. A 7% rise in cost of operations also hit results of the latest quarter. Full Article
Aug 2, 2010 Henry Schein Q2 profit up 15%, beats Street; Lifts low end of FY10 EPS viewMonday, Henry Schein Inc. (HSIC) said its second-quarter profit rose 14.6%, as revenue rose 15.1% from last year, reflecting a healthy growth in North American dental and animal health businesses. Earnings came in above the Street view, as did revenue. Further, for fiscal 2010, the company raised the low end of its earnings guidance range. Full Article
Aug 2, 2010 Loews Corp. Q2 profit rises 7.6%, beats StreetMonday, Loews Corp. (L) reported a 7.6% rise in profit for the second quarter, despite a 1.4% dip in total revenue, hurt mainly by lower net investment income at CNA Financial Corp. due to reduced limited partnership income. Earnings came in above the Street view, while revenue, excluding investment gains and losses, fell short of estimates. Full Article
Aug 2, 2010 Humana Q2 profit up nearly 21%, beats estimate; lifts FY10 EPS viewMonday, Humana Inc. (HUM) reported about a 21% rise in profit for the second quarter, as total premium and administrative services fees grew 10% from last year. Both earnings and revenue, which improved 9.5%, came in above the Street view. Looking ahead to the full year, Humana lifted its earnings outlook to come in line with the current estimate of analysts. Full Article
Aug 2, 2010 Oshkosh swings to profit in Q2Monday, Oshkosh Corp. (OSK) said it returned to profit in the third quarter, as revenue doubled from last year. Both earnings and revenue came in above the Street view. The results were essentially boosted by higher sales of its Mine Resistant Ambush Protected - All Terrain Vehicles. Full Article
Aug 2, 2010 Valeant Pharma Q2 profit flat with last year, adj EPS rises beats Street; lifts FY10 EPS viewMonday, Valeant Pharmaceuticals International (VRX) reported profit for the second quarter that was more or less flat with last year. Adjusted income from continuing operations, however, rose 32% and came above the Street view, as did revenue, which grew 33% from the past year. Further, the company boosted its full year guidance to a range above the current estimate of analysts. Full Article

Corporate News

Aug 2, 2010 NTT DoCoMo to buy out PacketVideo for $111.6 mlnSunday, NTT Docomo,Inc. (DCM) said it agreed to pay Nextwave Wireless Inc. (WAVE.PK) $111.6 million to acquire the remaining shares of the American wireless software company PacketVideo Corp. that it doesn’t already own. PacketVideo will become a wholly owned unit of Docomo and operate independently under the leadership of founder and Chief Executive James Brailean. Last year, the company had bought about 35% stake in PacketVideo for $45.5 million. Full Article

Todays WS Events

Aug 2, 2010 Humana Q2 10 Earnings Conference Call At 9:00 AM ET Humana Inc (HUM) will host a conference call at 9:00 AM ET Aug 2, 2010, to discuss its Q2 10 earnings performance. To participate in the call via live webcast, log on at To listen to the call, dial 888-625-7430. The replay can be heard by dialing 800-642-1687 with ID #49460747.
Aug 2, 2010 Loews Q2 10 Earnings Conference Call At 11:00 AM ET Loews Corp. (L) CEO, James S. Tisch, will host a conference call at 11:00 AM ET, August 2, 2010, to discuss its Q2 10 earnings results. To access the live webcast, log on at To hear the live call, dial 877-692-2592 (US) or 973-582-2757 (International) with passcode 84555160. A replay of the call can be heard by dialing 800-642-1687 (US) or 706-645-9291 (International) with passcode 84555160.
Aug 2, 2010 Allergan Q2 10 Earnings Conference Call At 11:00 AM ET Allergan Inc. (AGN) will host a conference call at 11:00 AM ET Aug 2, 2010, to discuss its Q2 10 financial results. To access the live webcast, log on at For replay of the call, dial 1-800-456-0420 (US) or 1-402-998-0114 (International).
Aug 2, 2010 Verisign Q2 10 Earnings Conference Call At 5:00 PM ET Verisign Inc. (VRSN) will host a conference call at 5:00 PM ET Aug 2, 2010, to discuss its Q2 10 financial results. To access the live audio webcast, log on at The call can also be accessed by dialing (888) 676-VRSN (US) or (913) 312-1524 (International). For replay of the call, dial (888) 203-1112 or (719) 457-0820 with passcode 5120314.

Telegraph: Finance .- Alan Greenspan Warns of double-dip recession in U.S.

Alan Greenspan warns of double-dip recession in US

Former Federal Reserve chairman says country is "in a pause in a recovery" and believes that another crisis "is possible if home prices go down".

The Washington Post : Wonkbook: WH pushes for state aid; middle-class stagnates, BP endgame?. August 2nd., 2010

The Washington Post

Wonkbook: WH pushes for state aid; middle-class stagnates, BP endgame?
The White House is pushing for the Senate to pass $26.1 billion in state and local aid before it goes on recess for August. This is something of a last-chance: The package has been whittled down substantially after Ben Nelson and the Senate Republicans blocked previous stimulus attempts, and it's now largely offset. Controversially, it even includes about $7 billion in cuts to the food stamp (or, as it's now called, the SNAP) program. In some ways, the normal language we use for this -- "the Senate is trying to pass x and y" -- is misleading. Most all Democrats -- which is to say, a majority of the chamber -- supports the bill, while most Republicans are going to oppose it. The question is where Ben Nelson and three or four Republicans come down.
But, all the temporary programs in the world won't change the bigger picture: The recession has hammered the middle class and reduced the country's income mobility. We may get through the recession and downturn here only to find we're left with an economy with some very sticky problems. Luckily, it's not all doom and gloom today: BP is trying to kill the leak once and for all; and if that doesn't cheer you up, how about some rum in your French toast?
Welcome to Wonkbook.
Top Stories
The Senate will vote tonight on a White House-backed plan for aiding states, reports David Rogers: "Cash-strapped governors are promised $16.1 billion to pay Medicaid bills next year and ease their budget situation; another $10 billion in education assistance would go to school boards to help with teacher hiring--a top priority for Education Secy. Arne Duncan... Reid offset the full cost through a combination of foreign tax credit provisions and $17.1 billion in savings chiefly from cuts to food stamps and prior appropriations. The Medicaid assistance, which extends a program begun under the Recovery Act, is designed now to phase out in the first six months of 2011--something recommended by Sen. Susan Collins (R-Maine.)"
More and more states are considering their own versions of the Arizona immigration bill:
The recession is exacerbating income immobility and wage stagnation among the American middle-class, reports Edward Luce: "Alexis de Tocqueville, the great French chronicler of early America, was once misquoted as having said: 'America is the best country in the world to be poor.' That is no longer the case. Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy - even Britain on some measures. To invert the classic Horatio Alger stories, in today's America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe."
David Stockman, who served as Ronald Reagan's OMB director, argues the GOP's tax-cutting fervor has cost them their once-sound economic theory:
BP could try a "kill shot" meant to plug the oil leak for good as early as tonight, reports Joel Achenbach: "The positive turn of events has led to a change in the endgame. The static kill has emerged as a potential fix that could take the pressure off the relief-well job. With hurricane season about to hit its busiest stretch, officials have feared that a tropical storm could force the rig drilling the relief well to disengage and sail away temporarily, delaying the termination of Macondo."
Recipe interlude: Ever feel like your French toast is missing a sufficient quantity of rum?
Still to come: A new crop of academics is radically rethinking how we look at financial crises; the House okays an oil spill reaction bill; HHS is facing state concerns on health care reform implementation; and Kanye West gets on Twitter.
Economy/ FinReg
Damian Paletta profiles Michael Barr, the non-Elizabeth Warren contender for head of consumer financial protection: "Mr. Barr has called for rules that would force banks to offer 'plain vanilla' financial products to consumers. He has pushed for the creation of a public trust to provide 'financial education and assistance to troubled borrowers,' funded by the penalty fees banks charge to their customers. He has said regulators should take into account the psychology of borrowers when setting rules. In short, he has called for dramatic changes to how banks interact with consumers, often in a way that would make it harder for companies to lean on consumer financial products for profits."
Obama's export growth goals face numerous hurdles:
Econophysicists are proposing a radically different method of determining the causes of economic crises, reports Eric Dash: "'If you analyze them, this earthquake law is obeyed perfectly,' notes H. Eugene Stanley, a Boston University physics professor who published a pioneering study of financial markets in the scientific journal Nature. 'A big shock causes smaller aftershocks, and then ones smaller and even smaller.' Indeed, financial crises come in clusters. The currency crisis in Thailand during the late 1990s was followed by similar problems in Indonesia and South Korea. After Lehman Brothers faltered, Washington Mutual, the Wachovia Corporation and scores of smaller banks toppled over like dominoes." Chris Dodd asked FDIC head Sheila Bair about her interest in the consumer financial protection post:
States are increasing retirement ages for government workers, report Jeannette Neumann, Michael Corkery, and Marcus Walker: "Lawmakers in at least 10 states have voted this year to require many new government employees to work longer before retiring with a full pension, or have increased penalties for early retirement. A similar proposal is pending in California. Mississippi, already among the states requiring more years of service for a pension, is weighing the additional step of increasing its retirement age."
William Gale takes on five myths about the Bush tax cuts:
Job retraining isn't working as planned, writes James Ledbetter: "Our training is really lousy. This seems like an obvious culprit, except that all the way down the line, the incentives appear intact. Governments and business leaders want unemployment to go down; community colleges want federal grants to provide workplace training; companies want skilled employees; and unemployed workers want jobs that pay well. So the problem shouldn't be an inability to teach skills."
Overbuilding has made landlords seek out government-subsidized renters:
Clive Crook urges Obama to break his promise to not raise middle-class taxes: "So broken is the US tax system - especially the federal income tax - that raising more revenue without increasing rates of tax is technically, though not politically, easy. The income tax base has been whittled away since the last big reform in 1986. Rates are not low by international standards, and their structure is already quite progressive; yet because they are applied to a slender base, the US income tax raises barely 8 per cent of gross domestic product. A broader base with lower, flatter rates could easily raise more revenue."
Fareed Zakaria wants the Bush tax cuts to expire in full:
Robert Shiller makes the case for a direct jobs program: "From the standpoint of economic theory, government expenditures in such areas often provide benefits that are not being produced by the market economy. Take New York subway stations, for example. Cleaning and painting them in a period of severe austerity can easily be neglected. Yet the long-term benefit to businesses from an appealing mass transit system is enormous. (This is an example of an 'externality,' which the market economy, left to its own devices, will neglect.)"
Celebrity stream of consciousness interlude: Kanye West gets a Twitter feed.
An oil spill response bill has passed the House but is stalling in the Senate, reports Matthew Daly: "The House bill includes a provision sponsored by Rep. Charlie Melancon, D-La., that would modify a six-month moratorium on deepwater drilling, so that some drilling permits could be approved on a rig-by-rig basis if the Interior Department determines a rig meets new safety requirements. The drilling moratorium imposed by Interior Secretary Ken Salazar would remain in effect, and Salazar would retain power over whether to approve a permit."
Wind turbine operators are solving complaints from neighbors by simply paying them:
Louisiana residents are concerned BP is pulling back from the gulf too soon, reports Angel Gonzalez: "More than 32,000 people and 4,400 vessels are part of the response effort all over the Gulf Coast, including thousands of commercial fishermen hired by BP to collect oil and lay boom. Some have already begun to be phased out, according to shrimper Acy Cooper, who said Sunday that his team has been reduced from 21 boats to about nine. 'This is too soon to be cutting back because there's too much oil out there,' he said."
BP used dangerous dispersants despite explicit orders from the White House not to:
Trevor Houser argues high oil prices can combat climate change: "The fact that high oil prices survived the crisis excises the ghosts of the 1980s, and gives entrepreneurs and investors confidence to support cleaner vehicles and develop alternative fuels. Nearly all of the world's largest vehicle manufacturers now plan plug-in hybrid or fully electric vehicles within two years, with General Motors rolling out the Chevy Volt last week. At $20 per barrel, powering the Volt with electricity costs more than filling a comparable car with gasoline. But at $80, Volt drivers save enough on fuel to offset the vehicle's high prices."
Josh Freed and Matt Bennett draw lessons for energy reform from the health care reform fight:
BP should be held fully liable for all economic damages emanating from the spill, writes Paul Rubin: "Drivers and pedestrians can't bargain in advance over standards of care, or prices and damages, so arguments for reducing damages are less powerful and tort reform is less appropriate. (There are arguments for no-fault insurance, but these are based on reducing transactions costs.) The Gulf spill is exactly this second class of accident--one with no pre-accident relationship. Hotel and restaurant owners and fishermen had no contractual relationship with BP before the oil spill, so arguments generally made by tort reformers have little weight in this case."
Kitsch painting interlude: Celestial Soul Portraits.
Domestic Policy
HHS secretary Kathleen Sebelius is working with state governments as they struggle to set up health care exchanges, reports Janet Adamy: "State officials say they are struggling to meet the law's deadline for getting the exchanges running by 2014. Strapped budgets have left states without the staff to handle basics such as writing grants to apply for implementation funding, officials say...Another contentious issue is Medicaid funding. Budget-challenged states want more flexibility to pare back spending on the federal-state program for the poor, but the law effectively prevents them from doing that."
Missouri will vote tomorrow on whether to nullify health care reform:
The Obama administration is seeking to ease immigration for military families, reports Julia Preston: "According to the memo, one of those changes has been quietly put into practice since May. The new policy allows illegal immigrants who are spouses, parents and children of American citizens serving in the military to complete the process of becoming legal residents without having to leave the United States -- a procedure that is known in immigration law terms as granting parole. The memo says agency officials approved the new parole approach 'to preserve family unity and address Department of Defense concerns regarding soldier safety and readiness for duty.'"
Jon Kyl has joined Lindsey Graham in opposing birthright citizenship::
Power is concentrating in boards and the executive because Congress wants it to, writes Matthew Dickinson: "The idea that members of Congress would prefer to incur the political costs involved in balancing the budget or cutting Medicare themselves rather than farming these decisions out to an independent commission is, in my view, dubious...Indeed, rather than a power grab, the creation of independent commissions or boards to tackle tough issues is a time-honored method by both Congress and presidents to avoid having to tackle those issues themselves."
Roberto Suro argues the Arizona immigration bill ignores economic factors: "Immigration policy needs to be about a lot of things, including national identity and security, but right now it needs to be about getting the economy's pulse up and improving our global economic competitiveness. These challenges are macro. The Arizona law offers micro solutions. It argues that immigration can be a law enforcement matter and pushes the decision-making down to the state and local level."
Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.
-Ezra Klein