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Aug 30, 2010

CNBC : Maria Bartiromo's Investor Brief:The Most Important Catalyst : This Week On The Street. August 30th., 2010

This Week On The Street

  • The unemployment rate will be released on Friday. It held at 9.5 percent last month. Keep an eye on how many jobs the private sector added in August. ADP releases its own employment report on Wednesday.
  • The Conference Board issues the latest Consumer Confidence Index on Tuesday. The last reading was the lowest in five months.
  • Housing will again be in the news. The S&P Case-Shiller Home Price Index comes out Tuesday and Pending Home Sales on Thursday.


MarketWatch: Personal Finance Daily: The push for a mortgage rate that starts with '3'. August 30th., 2010


Personal Finance Daily
AUGUST 30, 2010

Monday's Personal Finance stories

By MarketWatch

Don't miss these top stories:
Can you afford the monthly payment on a 15-year mortgage loan on your house? A growing number of homeowners say they can, and they're refinancing into 15-year mortgages at a rapid pace.

The benefit is you get a significantly lower interest rate and it accrues over a shorter time period. The drawback? You're locked into higher monthly costs. Still, if your current interest rate on a 30-year mortgage is high enough, the difference in monthly payment may not be much, given that 15-year rates average less than 4% now.

Read Amy Hoak's Home Economics column for more on what you need to consider before buying into a 15-year loan term. Also, read about large U.S. companies' plans for salary hikes next year (they'll be higher than this year -- maybe), and read about small-business owners' growing worries about the future.

A 15-year term sure is enticing, as is a loan with a rate that starts with the number "3." But it's not in my family's personal-finance cards at the moment, so we'll stick with our plan of making one extra loan payment a year.

-- Andrea Coombes , Personal Finance editor

A 15-year mortgage isn't for everyone

A growing number of homeowners are choosing to pay down their mortgages at a faster rate -- even if it means a substantial jump in their monthly payments.
See Amy Hoak's Home Economics on a 15-year mortgage isn't for everyone.


Salaries and wages are rising, but not by much

After two years of holding back on salary raises, U.S. employers say they plan bigger increases of workers' wages in 2011 -- but those plans could change if the economy continues to falter.
See story on salaries and wages are rising, but not by much.


Small-business hiring slows; owners' outlook worsens

Small businesses in the U.S. saw net employment gains in August, but their hiring pace slowed from earlier this year, and small-business owners' outlook for the economy worsened significantly from July to August, according to two surveys released Monday.
See story on small-business hiring slows; owners' outlook worsens.


Commentary: Painfully slow comeback for consumers

American consumers may say they are depressed about the economy, but they haven't stopped spending entirely. For all the gnashing of teeth about a double-dip recession, July's data on individual incomes and spending don't show a collapse in the consumer sector, as many have feared.
See MarketWatch First Take on painfully slow comeback for consumers.

Savings rate inches lower in July, U.S. data show

The savings rate for U.S. households fell in July to the lowest level in three months as spending outpaced income, the Commerce Department estimated Monday.
See story on savings rate inches lower in July, U.S. data show.

The new consumer bureau: a to-do list

There is a new regulator in town. Will it make a real difference? The newly established Consumer Financial Protection Bureau has a wide-ranging mandate and broad powers for investigating and regulating things like checking accounts, credit cards, and education and home loans.
See story on the new consumer bureau: a to-do list.


How to game Social Security

Hey, retirees: Looking for a way to bring in more money? Give back all the Social Security checks you have received so far. But you had better do it fast, since this loophole could soon close.
See story on how to game Social Security.


When gas mileage counts, these 10 cars deliver

It has been far too long since the last comprehensive look at cars that offer good gas mileage and looks for those concerned about bypassing the local gas station.
See story on when gas mileage counts, these 10 cars deliver.


Target-date fund proposals miss the mark

The Securities and Exchange Commission gave the public about two months to comment on proposed rules designed to give people a better understanding of target-date funds.
See story on target-date fund proposals miss the mark.

These small tech stocks are ripe for takeovers

Hewlett-Packard is offering almost $2 billion to buy a small data-management provider and could pony up even more; Intel is paying close to $8 billion for a leading security software maker.
See story on these small tech stocks are ripe for takeovers.

Merger-arbitrage ETF banks on M&A pickup

An exchange-traded fund that specializes in merger-arbitrage has received a lukewarm reception in the market, but a burst of deal activity may invite some investors to take a closer look.
See story on merger-arbitrage ETF banks on M&A pickup.

Hedge-fund managers get more bearish on equities

Hedge-fund managers have become more bearish on equities because they're concerned about slowing economic growth, according to results of a recent survey released Monday by TrimTabs Investment Research and BarclayHedge.
See story on hedge-fund managers get more bearish on equities.

Where to find shelter if deflation takes hold

Amid growing worries about deflation, or a sustained period of falling prices, some analysts recommend that investors buy bonds, which can do better in that kind of dangerous environment.
See story on where to find shelter if deflation takes hold.


Jackson Hole dispute: Does economy need more medicine?

The U.S. economy is looking sick and the doctors are bickering about what, if anything, to do.
See story on Jackson Hole dispute: Does economy need more medicine?

NYT : Afternoon Business NEWS | Update: New York Rebounds From Slump, but Unevenly. August 30th., 2010


Genzyme Rejects $18.5 Billion Offer by Sanofi

The biotechnology company said the offer of $69 a share, disclosed on Sunday, undervalued the company.

BlackBerry Gets a 2-Month Reprieve in India

The government said it would study and test a proposal by the BlackBerry maker for two months as it tries to settle a dispute over corporate e-mail.

Investors on Wall Street Find Little Reason to Buy

Traders cautiously began a week that will culminate Friday with Washington's report on the August job market.

Intel to Buy Infineon Wireless Unit for $1.4 Billion

Intel's announcement on Monday came less than two weeks after saying that it would acquire McAfee.

China to Job-Seeking C.E.O.'s: Come Work for China

China's government ran an enormous help-wanted advertisement on Monday seeking professional managers for some of its biggest state-controlled companies.

CNBC EVENING BRIEF:Major Hedge Funds Cutting Bank of America for Citigroup.August 30th., 2010


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RTTNews: Evening Market Wrap: Persisting Economic Uncertainty Sinks Stocks To Open Week - U.S. Commentary . August 30th., 2010

Evening Market Wrap Mon Aug 30 17:01 2010 


Aug 30, 2010 Persisting Economic Uncertainty Sinks Stocks To Open Week - U.S. Commentary Stocks suffered a drubbing to open the week on Monday, as continued uncertainty regarding the direction of the economy ahead of this week's August employment report prompted risk aversion. The major averages offset a majority of Friday's rally, pulling back down towards last week's more than one-month closing lows. Full Article

Economic News

Aug 30, 2010 Personal Spending Shows Moderate Increase In July Personal spending increased by a little more than expected in the month of July, according to a report released by the Commerce Department on Monday, with the report also showing a modest increase in personal income that came in line with economist estimates. Full Article
Aug 30, 2010 Economists Mixed On Monetary Policy Preferences While a majority of economists agree with the Federal Reserve's current stance on monetary policy, a survey conducted by the National Association for Business Economics showed that economists are more divided over what monetary posture they prefer over the next 12 months. Full Article

Corporate News

Aug 30, 2010 HP Board Approves Additional $10 Bln For Stock BuybackHewlett-Packard Co.(HPQ) said Monday that its board of directors has approved the authorization of an additional $10 billion for share repurchases. The company plans to buy back at least $3 billion worth of its shares in the fiscal fourth quarter at current price levels. Following the announcement, the company's shares are up almost 3%, near $39 per share, in the pre-market trading. Full Article


Aug 30, 2010 Genzyme Snubs Sanofi-Aventis' Acquisition OfferBiopharmaceutical firm Genzyme Corp. (GENZ) Monday confirmed the receipt of an unsolicited, non-binding proposal from French drug giant Sanofi-Aventis SA (SNY) to acquire all the outstanding shares of Genzyme for $69 per share in cash. The company stated that its board of directors met last night and unanimously affirmed its previous rejection of Sanofi's proposal. Full Article
Aug 30, 2010 Intel To Buy Infineon's Wireless Solutions Unit For $1.4 Bln CashChip makers Intel Corp. (INTC) and Germany-based Infineon Technologies AG (IFNNF.PK, IFX) have entered into a definitive agreement to transfer Infineon's Wireless Solutions business to Intel for about $1.4 billion in cash. The deal is expected to close in the first quarter of 2011. Full Article
Aug 30, 2010 3M Agrees To Acquire Cogent For About $943 Mln Cash Diversified technology company 3M Co. (MMM) agreed Monday to acquire Cogent, Inc. (COGT) for $10.50 per share in a deal worth $943 million. The transaction, which will expand 3M's ability to provide biometric security solutions, is expected to close in the fourth quarter. Full Article

Political News

Aug 30, 2010 Poll Shows Most Think Palin Would Not Be An Effective President While former Alaska Governor Sarah Palin has proven to be somewhat effective in helping certain candidates to victory in recent primary elections, the results of a 60 Minutes/Vanity Fair Poll released Monday show that most Americans do not think she would be an effective president. Full Article
Aug 30, 2010 Obama Calls On Senate GOP To Drop "Blockade" Of Small Business BillPresident Barack Obama Monday renewed his calls for swift Senate action on a bill aimed at boosting the prospects for small businesses around the country. The bill, which would create a $30 billion fund to help banks increase lending to small businesses as well as provide $12 billion in tax breaks, has been stalled in the Senate by Republicans. "This bill has been languishing in the Senate for months, held up by a partisan minority that won't even allow it to go to a vote," he said. Full Article

FINANCIAL & FOREX INFO : REUTERS :Daily Investors Update. August 30th., 2010

                            FINANCIAL & FOREX INFO


Stocks end lower on economic worries
Genzyme rejects Sanofi offer as long battle looms
Obama, advisers discussed more steps on economy
Consumer spending gain strongest in 4 months
BlackBerry maker wins reprieve on India shutdown
BHP denies any plans to divest Potash Corp assets
HP expands stock buyback program by $10 billion
Fed's Kohn to become academic after leaving post
Intel buys Infineon unit and expands wireless offer
Folksy Warren is symbol in debate over Wall Street

FOX BUSINESS. bREAKING BUSINESS NEWS: Dow Slides 141 Points. August 30th 2010.


Trader 052410 276
Monday Malaise for MarketsThe Dow shed 141 points as jitters ahead of this week's flood of economic data overshadowed another flurry of M&A action.

Obama: We're Working on It

President Obama said he and his economic advisers are mulling tax cuts and other measures in an effort generate job growth. | WATCH

Mayo: Citi Can't Be Trusted

Securities analyst Mike Mayo ramped up his bitter battle with Citigroup's management.

Why Values Matter in the New Economy

In uncertain times, you must rely on your values as your most reliable compass.
Market Snapshot
Index Last Change %Change  
DJIA 10,009.73 -141.22 1.39% Hilighted
Nasdaq 2,119.97 -33.66 1.56%  
S&P 500 1,048.92 -15.67 1.47%  
FOX 50 760.21 -9.60 1.25%  
DIJA Chart

The Washington Post : Afternoon Edition Highlights: Most Read Articles. August 30th., 2010

Most Viewed Articles on

1) After Washington rally, Glenn Beck assails Obama's religion

Conservative commentator Glenn Beck voiced sharper criticism of President Obama's religious beliefs on Sunday than he and other speakers offered from the podium of the rally Beck organized at the Lincoln Memorial a day earlier.

2) 'Mad Men' wins the Emmy for best drama 'Glee' takes home two awards

AMC's Madison Avenue saga takes television drama award for the third year in a row, while ABC's "Modern Family" wins best comedy series.

3) Can Obama play offense?

Obama has left himself weak defenses against a tide of economic melancholy.

4) Many interns paying a price for unpaid experience

Each year, thousands of college students descend on Washington for unpaid internships. It can be a nerve-racking process: sending out r?sum?s, trying to make contacts, interviewing again and again. Increasingly, many of them are finding an alternative: paying thousands of dollars to a placement company for a guaranteed spot.

5) Environmental groups face their future in climate-change debate

On Thursday, some of the country's most respected environmental groups - in the midst of their biggest political fight in two decades - sent a group of activists to Milwaukee with a message.

6) Why the recovery lags

Consumers are the crux of the matter.

7) Behind in polls, Fenty urges more scrutiny of Gray

Mayor Adrian M. Fenty (D) said Sunday he's "the underdog" in his reelection campaign against D.C. Council Chairman Vincent C. Gray but that he can still win the Sept. 14 Democratic primary.

8) A daunting children's divide

Various figures denote vexing social problems. They include 10,000 (the number of new baby boomers eligible for Social Security and Medicare every day), 10.2 percent (what the unemployment rate would be if 1.2 million discouraged workers had not recently stopped looking for jobs), $9.9 trillion (the...

9) Washington Redskins going the distance in final preseason game

With a new head coach, general manager and quarterback, the players atop the Redskins' depth chart have come a long way since last season.

10) Indiana's Ellsworth, onetime Democratic star, now a symbol of party's struggles

INDIANAPOLIS - When Brad Ellsworth won his U.S. House seat in Indiana four years ago, he was hailed by Democrats as the future of their party: a telegenic former sheriff with moderate instincts and an ability to appeal to a diverse electorate.

MarketWatch Special Financial Services: Canadian Stocks Rise on Mining Financials


Canadian Markets: Canadian markets rise on mining, financials

By Wallace Witkowski MarketWatch

The mining and financial sectors show strength as the loonie slips against the U.S. dollar. 

FOX BUSINESS : Breaking Business News: City Can't be Trusted. August 30th., 2010


Citi Logo Stop Light
Mayo: Citi Can't Be Trusted Securities analyst Mike Mayo ramped up his increasingly bitter battle with the management of Citigroup


Watch: LIVE

LIVE  Wall Street rallied on the Fed chief's comments, but were there substantial holes in his policy speech?

M&A Action Fails to Lift Markets

Stocks lost ground, giving back a chunk of Friday's triple-digit gains, as Wall Street struggled to rally.

Oil Dips Below $75 a Barrel

After a three-day rally, oil prices fell on increased hurricane activity and economic worries.

Brace for it: The Taxes Are Coming

As things stand today, all U.S. taxpayers are facing a bigger federal tax bill next year. | WATCH

RTTNews : Morning Market Briefing: Futures Pointing To Modestly Lower Open For Stocks - U.S. Commentary . August 30th., 2010

Morning Market Briefing Mon Aug 30 09:01 2010 


Aug 30, 2010 Futures Pointing To Modestly Lower Open For Stocks - U.S. Commentary Stocks are on pace for a modestly lower open on Monday, as traders remain cautious about continued headwinds to the economic recovery while digesting a more sizable than expected pickup in consumer spending. More action on the merger and acquisitions front has also garnered market attention in the early going. Full Article

Economic News

Aug 30, 2010 Personal Spending Rises Slightly More Than Expected In July Personal spending increased by a little more than expected in the month of July, according to a report released by the Commerce Department on Monday, with the report also showing a modest increase in personal income that came in line with economist estimates. Full Article
Aug 30, 2010 U.K. House Prices Continue To Fall House prices in England and Wales dropped at the fastest pace in 16 months in August, figures showed on Monday. The fall was due to supply continuing to outstrip demand. Full Article
Aug 30, 2010 Bank Of Japan Eases Policy Further; Expands Lending Program The Bank of Japan announced an expansion to its low-interest lending program after an extraordinary policy board meeting on Monday, as it bids to stem the rise in the yen. At the same time, the bank also maintained its key interest rate at near-zero. Full Article
Aug 30, 2010 Singapore Unveils Extra Measures To Cool Property Market The Singapore government on Monday tightened property lending to maintain a stable and sustainable property market so that prices move in line with economic fundamentals. Full Article
Aug 30, 2010 Policy Support May Assuage Economic GriefNegative news flow continues to trickle in from all quarters, lending credence to claims by doomsday prophets that a double-dip is in the offing. Full Article
Aug 30, 2010 Eurozone Economic Confidence Strengthens Further In August Eurozone economic confidence continued to strengthen in August with the corresponding index rising to a level last seen in early 2008. Full Article

Corporate News

Aug 30, 2010 3M to buy Cogent for $943 mlnMonday, 3M Co. (MMM) agreed to buy Cogent Inc. (COGT) for about $943 million, or $10.50 a share. The price represents about 18% above Friday's closing price. 3M estimates the purchase to be dilutive to its earnings in the first 12 months of completion of the transaction. Full Article
Aug 30, 2010 Intel to buy Infineon's wireless unit for $1.4 bln cashMonday, Intel Corp. (INTC) and Infineon Technologies AG (IFX) agreed to transfer Infineon's Wireless Solutions business to Intel for about $1.4 billion in cash. The companies expect the deal to close in the first quarter of 2011. Full Article
Aug 30, 2010 POSCO to buy 68% Daewoo stake for US$2.8 bln - reportsMonday, POSCO (PKX) agreed to buy a 68% stake in Daewoo International Corp. for about US$2.83 billion to expand its sales network and gain raw materials, said media reports. POSCO said it intends to expand operations in countries including India and Indonesia. Full Article
Aug 30, 2010 Genzyme rejects Sanofi-Aventis $18.5 bln all-cash bidMonday, Genzyme Corp.'s (GENZ) board affirmed its previous rejection of unsolicited proposal by Sanofi-Aventis (SNY), which offered to by Genzyme for $18.5 billion in cash. Genzyme stated that the non-binding offer provided no new information and no improvement in price. Sunday, Sanofi-Aventis had offered to buy Genzyme at $69 per share. Full Article
Aug 30, 2010 HP wins US air force supply contract valued about $800 mlnMonday, Hewlett-Packard Co. (HPQ) said the U.S. Air Force has selected it for a five-year purchase contract worth up to $800 million. Under the terms of the new Client Computing/Servers Blanket Purchase Agreement, HP will provide the USAF with a wide array of computers, including workstations, mobile workstations, thin clients and performance displays. Separately, the company announced that its board of directors approved the authorization of an additional $10 billion for share repurchases. Full Article
Aug 30, 2010 Schwab to buy Windward Investment Management in $150 mln stock, cash dealMonday, The Charles Schwab Corp. (SCHW) said it agreed to acquire Windward Investment Management, Inc. for $150 million in stock and cash. The company expects the deal deal to close during the fourth quarter. Full Article

REUTERS : Business Today : Stock futures flat after M&A flurry as investors cautious. August 30th., 2010



MarketWatch: Special Financial Services : Financial News : European stocks rise as deal bonanza continues. August 30th., 2010

European stocks rise as deal bonanza continues  
By Aude Lagorce MarketWatch

European shares rose on Monday, as investors digested the latest deal news, including Sanofi-Aventis’ publicly disclosed bid for Genzyme Corp., as well as additional easing measures from the Bank of Japan. 

FOX BUSINESS : Breaking Business News: Personal Spending, Income Rise. August 30th., 2010


Russian Trader 276
Searching for Direction Futures treaded water as Wall Street had a muted reaction to a pair of M&A deals and traders play wait-and-see ahead of new data on consumer spending.


NABE: Fed Policy on Right Course

Most economists said they approved of the Federal Reserve's current course on monetary policy.

Intel to Buy Infineon's Mobile Unit

Intel is buying the German chip maker for $1.4 billion to boost its presence in the smartphone market.

Genzyme Rejects Sanofi-Aventis' Bid

Genzyme said the $18.5 billion takeover offer dramatically undervalues the company.

BP Internal Probe Faults Own Engineers

The oil giant's internal probe of the Gulf of Mexico oil spill has placed some of the blame on its engineers.

3M Buying Cogent for $943M

3M will pay $10.50 a share for the biometric identification firm valuing it at $943 million.

The Wasington Post : Wonkbook : Volcker's tax plan; Europe fights U.S. on FinReg; 10 years till recovery?. August 30th., 2010

 Monday August 30, 2010
Wonkbook: Volcker's tax plan; Europe fights U.S. on FinReg; 10 years till recovery? Did you know lawmakers have made more than 15,000 tweaks to the tax code since the 1986 reform? That, and more, in the report Paul Volcker's presidential advisory committee just released on tax simplification. Did you know advanced economies usually take about 10 years to recover from financial crises? That, and more, in Carmen and Vincent Reinhart's depressing new paper. Plus: Europe and the United States are fighting over capital requirements, which sounds dull but is arguably more important than anything in the FinReg bill. And what's going on with DC's schools?
It's Monday and I'm back from vacation. Welcome to Wonkbook.
Top Stories

Paul Volcker's Economic Recovery Advisory Board has released its suggestions for simplifying the tax code, reports Lori Montgomery: "In an exhaustive 18-month review, the President's Economic Recovery Advisory Board found that the complexity of the nation's tax laws has increased dramatically in recent years. Lawmakers have changed the code more than 15,000 times since the last major overhaul in 1986. Meanwhile, instruction booklets for the standard Form 1040 have swelled from 14 pages to 44 pages last year. The board also found that the profusion of credits, deductions, phaseouts and conflicting eligibility requirements frays the sanity of ordinary taxpayers just as surely as it complicates the calculations of wealthy families and business owners. Tax provisions affecting families and children were among the most frequently cited sources of confusion."
Read the full report (pdf):
It typically takes advanced economies almost 10 years to recover from financial crises, write Carmen and VIncent Reinhart. "Their paper "examines the behavior of real GDP (levels and growth rates), unemployment, inflation, bank credit, and real estate prices in a twenty one-year window surrounding...the 1929 stock market crash, the 1973 oil shock, the 2007 U.S. subprime collapse and fifteen severe post-World War II financial crises." Climate change activists are entering soul-searching mode after seeing cap and trade defeated despite the Democratic Congress and president, reports David Fahrenthold: "Environmentalists say their problem was timing; once the economy perks up, their logic goes, prospects will improve..But some activists from smaller groups say the problem is within environmentalism itself. To them, the Senate defeat showed that green groups don't have enough of Washington's two currencies of power: money and angry voters. To them, it's significant that no senator seems in danger of being voted out of office this November for denying the environmentalists the climate bill they wanted."
STORY THAT SHOULD -- BUT WON'T -- DRIVE THE DAY: Europe and the United States are fighting over the amount of safety capital the Basel III accord will demand that banks have to hold, reports Damian Paletta: "Regulators will have to agree on the precise level of capital needed to buffer against risk. Basel officials have suggested this should be 5%, or $5 in capital for every $100 in assets like loans and investments. They also want to add a 2.5% buffer on top of that, which banks would be able to dip below during tough times....The negotiations seem headed for a deal, people involved in the process say, where banks are required to hold a capital level of 7% or 8% after factoring in the buffer. Reaching that level could be more problematic for European banks, which tend to hold less capital than their U.S. counterparts."
Under Michelle Rhee, DC's public schools are diversifying, reports Jonetta Rose Barras. How does that make you feel? How should that make you feel? "Between 2007 and 2010, white enrollment in DCPS increased from 6 percent to 9 percent and Hispanic enrollment increased from 11 percent to 13 percent. During that same period, African-American enrollment dropped from 80 percent to 76 percent, according to the Office of the State Superintendent of Education. A lot of people might be uncomfortable with the experiment and its results. But the statistically complicated, politically toxic, and morally vexing question is: should they be?"
Indie pop interlude: MGMT play "Song for Dan Treacy" on Letterman.
Still to come: Why Washington is annoyed at Berlin, the HUD Secretary throws cold water on a renewal of the new homebuyer's tax credit; conservative intellectuals begin to organize against a value-added tax;; New Orleans politicians demand more federal help; and cannibalism is hot right now.
Economy/ FinReg

Noticing a lot of articles with a Germany vs. the United States bent? Noam Scheiber gives the background: "For years, the Germans could be relied upon to play a stabilizing role in Europe, subsuming their national self-interest to lofty visions of continental solidarity. But, over the last decade, as German leadership has passed from the postwar generation of Konrad Adenauer and Helmut Kohl to a younger generation less compelled by the war’s memory and unbothered by the Soviet menace, the Germans have ceased to view Europe’s safekeeping as their historical responsibility. 'It’s no longer Europe at any price,' says Ulrike Guérot, a fellow at the European Council on Foreign Relations in Berlin. 'It has a price now, and they want to see the price tag.'" Daniel Gross doesn't see a bubble in US bonds:
HUD Secretary Donovan does not want to revive the housing tax credit just yet, reports Brent Kendall: "Donovan, speaking Sunday on CNN’s 'State of the Union,' said the administration had expected a drop in the July housing numbers because of the recent expiration of the tax credit, 'but they were clearly worse than we expected.'..Donovan said the administration would be rolling out two tools in the coming weeks to help homeowners: a Federal Housing Administration refinancing effort to help borrowers who are underwater, and an emergency loan program for unemployed borrowers."
A new study suggest asset-buying by central banks speeds recovery:
Gretchen Morgensen previews the FinReg rules-making process for the CFTC and SEC: "Because the most potentially nuclear forms of derivatives are privately arranged and loosely monitored, two clear goals of the legislation are greater price transparency and the opening of transactions to more market participants. But not everyone wants these aims to be met. And early signs indicate that the big firms currently in control of the derivatives market view the rules-writing process as an opportunity to maintain the status quo in one of their most lucrative lines of business -- or win back what they feel they lost amid the legislative wrangling earlier this year."
State tax revenue rose last quarter:
TOMORROW'S ARGUMENTS TODAY: Douglas Holtz-Eakin and Cameron Smith preview the conservative rejection of a Value-Added Tax: "There is a well-established correlation between having a VAT -- or having a larger VAT -- and having a larger government. In 'Leviathan Unbound: The VAT?' we used sophisticated statistical techniques and data from the Organization for Economic Co-operation and Development to discern whether this means that countries that have installed a VAT did so to smooth the path to a larger public sector. Or whether the VAT fueled a growth in government that people did not anticipate or want. The result: Adopting a VAT caused a growth in government."
The White House is easing export controls for military tech to boost manufacturing:
Clive Crook calls on the Fed to take action: "As the monetary economist Scott Sumner has pointed out, Milton Friedman - name me a less reconstructed monetarist - talked of 'the fallacy of identifying tight money with high interest rates and easy money with low interest rates'. When long-term nominal interest rates are very low, and inflation expectations are therefore also very low, money is tight in the sense that matters. When money is loose, inflation expectations rise, and so do long-term interest rates. Unreconstructed monetarists ought therefore to agree with Mr Magnus’s main point: under current circumstances, better to print money and be damned."
Laura Tyson argues for a second stimulus:
Great achievements in sports interlude: The 2010 blind soccer world championship.

Chief oil regulator Michael Bromwich is under fire for new restrictions on drilling, report Stephen Power and Naureen Malik: "The bureau has issued only three new permits to start wells in shallow water since the April 20 explosion of the Deepwater Horizon rig, according to the agency's website. The agency issued three to six permits a week prior to the accident, industry officials say. Louisiana's lieutenant governor, Scott Angelle, who has participated in talks with Mr. Bromwich's agency, said the government was effectively shutting down shallow-water drilling."
The legal tactics of oil companies involved in the BP spill started to emerge last week:
Major oil companies plan on resuming deepwater drilling as soon as the moratorium is lifted, reports Clifford Krauss: "Chevron, the second-largest American oil company after Exxon Mobil, is one of the largest deepwater explorers in the Gulf of Mexico, and also has major deepwater projects in Europe, Asia and West Africa. The six-month drilling moratorium instituted by the Obama administration following the April 20 explosion of the Deepwater Horizon has suspended work on five Chevron deepwater wells. 'Our plans are, the day that the moratorium is lifted, to go right back to the prospects we were drilling at the time work was suspended, as well as the other prospects that are in our queue,' he said."
Hot spells in the Pacific line up with climate change predictions:
Europe's cap and trade system is running into problems with offsets, writes James Kanter: "Manufacturing a gas commonly used for cooling and air-conditioning turns out to produce another unwanted gas that can contribute inordinately to the warming of the planet..As climate regulation spreads, destroying the gas, known as HFC-23, has become a lucrative business, and over the past five years, financiers and industrial companies have begun turning those streams of waste into hefty returns..Critics have warned for years that this form of offsetting would encourage profiteering, with little or no value in efforts to curb climate change."
Behnam Taebi explains the benefits of a new breed of nuclear reactor:
Adorable animals getting exercise interlude: Two corgis on a treadmill.
Domestic Policy

New Orleans mayor Mitch Landrieu and Senator Mary Landrieu are demanding more federal spending on Katrina reconstruction, reports Norm Gomlack: "Obama was not expected to announce any new initiatives during this visit. The secretaries of Education and Homeland Security on Saturday announced $1.8 billion to rebuild schools in New Orleans. Sen. Mary Landrieu, the mayor’s sister, complained that the federal government has a long history of failing to invest in the region while taking in billions in oil and gas tax revenues."
ICE is paring back unnecessary deportations, reports Julia Preston: "The courts have reported at least 17,000 cases that could be eliminated from their docket if ICE dismissed deportations of immigrants, like those married to United States citizens, who were very likely to win legal status, the memo says."
James Suroweicki bemoans the death of customer service: "The real problem may be that companies have a roving eye: they’re always more interested in the customers they don’t have. So they pour money into sales and marketing to lure new customers while giving their existing ones short shrift, in an effort to minimize costs and maximize revenue. The consultant Lior Arussy calls this the 'efficient relationship paradox': it’s only once you’ve actually become a customer that companies put efficiency ahead of attention, with the result that a company’s current customers are often the ones who experience its worst service."
Leslie Jacobs praises New Orleans' school overhaul:
Norman Ornstein proposes changes to the filibuster: "For starters, the Senate could replace the majority’s responsibility to end debate with the minority’s responsibility to keep it going. It would work like this: for the first four weeks of debate, the Senate would operate under the old rules, in which the majority has to find enough senators to vote for cloture. Once that time has elapsed, the debate would automatically end unless the minority could assemble 40 senators to continue it. An even better step would be to return to the old 'Mr. Smith Goes to Washington' allowing a motion requiring 40 votes to continue debate every three hours while the chamber is in continuous session."
Soylent green interlude: When did cannibalism get so trendy?
Closing credits: Wonkbook is compiled with the help of Dylan Matthews and Mike Shepard.