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Oct 21, 2010

F & F I N : Russia earmarks 900 state firms for public sale.




Russia earmarks 900 state firms for public sale

Oil field in Siberia Rosneft is one of the state-owned assets to be used to raise revenues
Russia has announced further details of plans for its biggest privatisation since the 1990s - which could raise up to 1.8 trillion roubles ($60bn; £38bn).To read  full report click: 

Special Financial Services: Stocks to Watch: Stocks in focus Friday: Honeywell, Verizon

MarketWatch
SPECIAL FINANCIAL SERVICES
 
Stocks to Watch: Stocks in focus Friday: Honeywell, Verizon
 
By Sue Chang MarketWatch


A roundup of companies whose shares are expected to see active trading Friday. 

MarketWatch: Personal Finance Daily:-Maybe robo-signers could handle loan modifications.

MarketWatch
Personal Finance Daily
OCTOBER 21, 2010

Thursday's Personal Finance stories

Don't miss these top stories:

By MarketWatch


Consumers, banks clash on foreclosures
A tangled mortgage mess
Rates on 30-year fixed-rate mortgages rise
How to invest in Africa with cutting-edge ETFs
Regulators seek to cap money market fund risk

Is it time for banks to be forced to reduce mortgage-loan balances in cases where struggling homeowners simply can't pay what they owe? At a Federal Reserve Consumer Advisory Council meeting today, where consumer advocates and bankers disagreed over the extent of problems in lenders' foreclosure processes, Dory Rand, president of the Woodstock Institute in Chicago, Ill., said, "We need to get to a point where [principal reduction] will happen more frequently."

According to Rand and others, the way to get to that point is to allow bankruptcy judges to modify mortgages. If that happened, maybe we'd start to see the beginning of the end of foreclosures. Of course, there is still that problem of people being unable to find jobs...

Read Ron Orol's story today for more on Rand's comments and the clash over the foreclosure mess. Even absent the "robo-signing" controversy, consumer advocates say that people are waiting months — and in some cases more than a year — to find out whether their loan modification is permanent.

Maybe banks should move some "robo-signers" over to their loan-modification departments.

Andrea Coombes , Personal Finance editor

REAL ESTATE

Consumers, banks clash on foreclosures

Consumer advocates and bank executives clashed on Thursday over the financial industry's handling and the severity of the so-called "robo-signing" crisis that the government says could derail the housing market.
Read more on consumers, banks clash on foreclosures.


Rates on 30-year fixed-rate mortgages rise

For the first time in five weeks, interest rates on 30-year fixed-rate mortgages rose, according to Freddie Mac's weekly survey of conforming mortgage rates, released on Thursday.
Read more on rates on 30-year fixed-rate mortgages rise.

Commentary: A tangled mortgage mess

Two years after the jumbled days of the financial crisis, it is easy to forget that government and the private sector have had more hook-ups than an episode of "Jersey Shore."
Read more on a tangled mortgage mess.

Commentary: Mortgage problems are housing's problems

The housing mess is much like William Faulkner's past: It is not dead; it's not even past.
Read more on mortgage problems are housing's problems.


Disaster lab destroys house with high winds

A test conducted at the Institute for Business and Home Safety's newly opened disaster lab subjects houses to 96 mph winds — simulating a Category 3 hurricane.
 Watch video on disaster lab destroys house with high winds.


Fannie, Freddie could tap $363 billion: regulator

Seized mortgage giants Fannie Mae and Freddie Mac could tap as much as $363 billion in funds from the government, according to an estimate released Thursday by their regulator.
Read more on Fannie, Freddie could tap $363 billion: regulator.


INVESTING

How to invest in Africa with cutting-edge ETFs

If they remade the movie "Out of Africa" for investors, they might need to rename it "Into Africa."
Read more on how to invest in Africa with cutting-edge ETFs.

Regulators seek to cap money-market fund risk

A group of government regulators is recommending that money market mutual funds be reformed to prevent a repeat of the dangers that shook the industry in 2008.
Read more on regulators seek to cap money market fund risk.


TRAVEL

U.S. airlines to tamp capacity growth in 2011

Airlines say their jetliners are packed from cockpit to rudder as the demand for airfare rises, but don't expect U.S. carriers to add seat capacity anytime soon.
Read more on U.S. airlines to tamp capacity growth in 2011.


ENTERTAINMENT

For Netflix, DVDs aren't dead yet

Given the rapidly increasing popularity of streaming for Netflix Inc., it may look like the long-anticipated end of the DVD era is coming sooner than anyone predicted.
Read more on DVDs aren't dead yet for Netflix.


ECONOMY & POLITICS

Commentary: Election won't bring the changes we need

It's the same old story. Angry at the way the country is going, the public votes for the party that promises change. And then, once the election is over, not much changes.
Read more on election won't bring the changes we need.


Commentary: GOP is better for Wall Street

There's a lot of talk about historical and technical data points right now. Market historians are trumpeting the rare strength of the Dow Jones Industrial Average in September, chart watchers are talking about the dollar "death cross," and gold bugs are plotting a new all-time high for the precious metal.
Read more on GOP is better for Wall Street.


Commentary: Hijacking a political revolution

Has the tea party movement been hijacked and diverted from its original goals? This is the accusation this week not only in a blistering report from the NAACP, but from one of the original organizers of the tea party protests.
Read more on hijacking a political revolution.


Sept. leading economic index rises 0.3%

U.S. economic growth is "slow" and doesn't have momentum, the Conference Board said Thursday as it reported that its leading economic index rose 0.3% in September.
Read more on Sept. leading economic index rises 0.3%.


U.S. weekly jobless claims drop 23,000

The number of people who signed up for state unemployment-insurance benefits fell 23,000 to 452,000 last week, the Labor Department reported Thursday.
Read more on U.S. weekly jobless claims drop 23,000.


CARS

Toyota to recall U.S., Japanese vehicles

Toyota Motor Corp. announced Thursday that it will issue a voluntary safety recall on hundreds of thousands of vehicles sold in the United States and Japan.
Read more on Toyota to recall U.S., Japanese vehicles.

CNBC Evening Brief: Goldman Sachs May Give Buffett Unwanted Phone Call.



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NYT: Breaking News Alert Top Corporations Helping U.S. Chamber of Commerce Influence Campaigns

Breaking News Alert
The New York Times
Thu, October 21, 2010 -- 5:53 PM ET
-----

Top Corporations Helping U.S. Chamber of Commerce Influence Campaigns

Prudential Financial sent in a $2 million donation last year
as the U.S. Chamber of Commerce launched a national
advertising campaign to weaken the historic rewrite of the
nation's financial regulations.

Dow Chemical delivered $1.7 million to the chamber last year
as the group took a leading role in aggressively fighting
proposed new rules to tighten security requirements on
chemical facilities.

And Goldman Sachs, Chevron Texaco, and Aegon, a multinational
insurance company based in the Netherlands, donated more than
$8 million in recent years to a chamber foundation seeking to
limit the ability of trial lawyers to sue businesses.

These large donations -- none of which were publicly
disclosed by the chamber -- offer a glimpse of the chamber's
money-raising efforts, which it has ramped up recently in an
orchestrated campaign to become one of the most well-financed
critics of the Obama administration and an influential player
in this fall's Congressional elections.

Read More:
http://www.nytimes.com/2010/10/22/us/politics/22chamber.html?emc=na

NYT: Afternoon Business News.- Fannie and Freddie May Need Infusion



Oil Sands Effort Turns on a Fight Over a Road

By TOM ZELLER Jr.
To get equipment to Canadian fields, a road through the American Northwest is crucial, but local residents object.

Fannie and Freddie May Need Infusion

By BINYAMIN APPELBAUM
Taxpayers could be on the hook for tens of billions in further support, depending on how the housing market fares, regulators say.
DealBook

Goldman Proprietary Trading Desk to Join K.K.R.

By PETER LATTMAN
The move of the famed trading desk comes as the investment bank winds down the operation to comply with new federal regulations for Wall Street.

China Faces Concern Over Inflation

By DAVID BARBOZA
As growth returns to a normal, sustainable level, soaring food and property prices remain a challenge.

Wall Street Is Flat in Late Trading

By CHRISTINE HAUSER
Analysts said early gains may have given way to profit-taking, or concerns about a rising dollar.

F & F I N : Shares Edge Up, Whipsawed By Dollar, Earnings



FROM: REUTERS - DAILY INVESTOR UPDATE

Shares edge up, whipsawed by dollar, earnings
Amazon profit beats Street view but costs rise
Fannie, Freddie may need $215 billion more in aid
American Express profit rises 71 percent
Will Fed buy Treasuries for an extended period?
U.S. plan hits opposition at G20, FX accord remote
Fed's Bullard could back easing in $100 billion steps
Office Depot, execs settle SEC disclosure charges
Data shows small gains, monetary stimulus seen
Canada province formally rejects BHP's Potash bid

F & F I N : U. S. Markets At Close Snapshot




 U. S . Markets AT Close Snapshot


Major Indexes
 Last Change% Chg
DJIA*11146.57  38.60 0.35
Nasdaq*2459.67  2.28 0.09
S&P 500*1180.26  2.09 0.18
DJ Total Stock Market*12349.95 12.68 0.10
Russell 2000696.67    -5.44-0.77


























NFA : News Facts Actions Fall 2010.

The Washington Post Afternoon Edition. Today's Most Read Articles



Most Viewed Articles on washingtonpost.com

1) NPR fires Juan Williams over anti-Muslim remarks

Veteran journalist Juan Williams was fired from his job as a senior news analyst for National Public Radio late Wednesday because of comments he made about Muslims and terrorism on "The O'Reilly Factor" on Fox News Channel.

2) The Early Lead: Deanna Favre says faith 'will get me through this'

It fell to Deanna Favre to talk about the NFL investigation involving her husband, Minnesota Vikings quarterback Brett Favre.

3) Fannie, Freddie bailout could double, regulator says

The federal bailout for Fannie Mae and Freddie Mac could more than double in size during the next three years, according to projections from the companies' federal regulator.

4) Christine O'Donnell regrets 'I'm not a witch' ad

WILMINGTON, Del. -- Republican Delaware Senate candidate Christine O'Donnell said she regrets airing the campaign ad in which she declared "I'm not a witch."

5) The wrong call

As a wife, I understand Ginni Thomas. As a reporter, I don't.

6) Justice Thomas's wife doesn't shy from spotlight

The decision by the wife of Supreme Court Justice Clarence Thomas to confront the woman who accused him of sexual harassment two decades ago has stirred up old and painful questions that have never fully been put to rest.

7) Candidate Obama

In West Virginia, the president is the man to beat.

8) Larry King gives Jon Stewart a portable toilet for Mall rally

Daytime diva Oprah Winfrey gave Jon Stewart transportation to bring his studio audience from New York to his upcoming Rally to Restore Sanity and/or Fear on the Mall in Washington later this month.

9) Clarence Thomas's wife calls Anita Hill, stirring an old controversy

The decision by the wife of Supreme Court Justice Clarence Thomas to confront the woman who accused him of sexual harassment two decades ago has stirred up old and painful questions that have never fully been put to rest.

10) Celebritology: 'Paranormal Activity 2' reviews start to roll in

"Paranormal Activity 2" has been kept away from the critics. The sequel to last year's horror movie/social media phenomenon wasn't screened in advance, supposedly so Paramount could keep the flicks's surprises a secret for as long as possible.

Fannie, Freddy Could More than Double Regulator says


Breaking News Alert: Federal bailout for Fannie, Freddie could more than double, regulator says
October 21, 2010 10:12:22 AM
----------------------------------------

The federal bailout for Fannie Mae and Freddie Mac could more than
double in size during the next three years, according to projections
from the Federal Housing Finance Agency.

The federally controlled mortgage giants will likely need at
least another $73 billion and perhaps as much $215 billion from
taxpayers in the next three years to meet their financial obligations.


http://link.email.washingtonpost.com/r/DME6KX/LQ9MUK/DI8V86/SZBSXX/BFQ67/ID/h

For more information, visit washingtonpost.com

----------------------------------------



Treasurys Slip ; Stocks, Thursday Movers & Shakers

MarketWatch
SPECIAL FINANCIAL SERVICES)

By Deborah Levine MarketWatch


The benchmark 10-year Treasury note pulls back modestly in the face of jobless-claims data. Bond traders will turn their focus to the Philly Fed index on regional manufacturing and to leading economic indicators, as well as to the Treasury’s schedule of upcoming debt sales. 

By MarketWatch 


Alexion, Children’s Place, eBay, and Netflix are among Thursday’s most active stocks.  

RTTNews: Daily Market Analysis: Earnings May Lend Support Even As Economic Outlook Remains Hazy

Daily Market Analysis Thu Oct 21 09:31 2010

Oct 21, 2010 Earnings May Lend Support Even As Economic Outlook Remains Hazy The major U.S. index futures are pointing to a higher opening on Thursday, with positive earnings offering some support to sentiment. Corporate results continue to be upbeat and so also the forward outlook. The still-strong corporate profit outlook may serve to increase confidence in the sustainability of the economic recovery. That said, we are seeing little improvement in the ailing labor market and consumer spending, which is growing at a below-trend rate. Full Article

RTTNews: Morning Market Briefing.- Stocks May See Moderate Gains As Upbeat Earnings Pour In - U.S. Commentary .

Morning Market Briefing Thu Oct 21 09:01 2010

Commentary

Oct 21, 2010 Stocks May See Moderate Gains As Upbeat Earnings Pour In - U.S. Commentary Stock futures are pointing to moderate gains at the open on Thursday, as the markets are digesting another influx of largely upbeat earnings from a number of major global firms including UPS (UPS) and McDonald's (MCD).The major index futures are all in positive territory, with the Dow futures up by 41 points. Full Article

Economic News

Oct 21, 2010 Initial Jobless Claims Drop Slightly More Than ExpectedNew claims for jobless benefits fell to 452,000 in the week ending October 16, the Department of Labor said Thursday in a report unlikely to persuade the Federal Reserve not to go through with plans for another round of quantitative easing. Full Article
Oct 21, 2010 Eurozone Private Sector Growth Continues To Slow The eurozone's private sector growth continued to decelerate in October led by the service sector, figures showed on Thursday. Growth continued to be dependent upon the bloc's two biggest economies, France and Germany. Full Article
Oct 21, 2010 UK Retail Sales Fall For Second Month UK retail sales fell for a second month in September suggesting that consumers started to restrain their spending amid government's massive fiscal squeeze. Full Article
Oct 21, 2010 China Economic Growth Cools China's economic growth slowed between July and September as the government rolled back stimulus measures and tightened policy, figures showed on Thursday. The government also announced that inflation rose last month, while industrial production was robust. Full Article
Oct 21, 2010 France Business Morale Strengthens In October Business leaders in the French manufacturing sector saw a notable improvement in the economic situation in October. Both general and personal production outlook recovered strongly. Full Article

Earnings News

Oct 21, 2010 Noble Q3 profit plummets 80%Wednesday, Noble Corp. (NE) reported a 80% fall in its third-quarter profit, as the company had to face the government-imposed moratorium on drilling in the Gulf of Mexico region. Operating revenues for the quarter shrank 32.5% to come in below the estimate of analysts. Full Article
Oct 21, 2010 Alcon Q3 profit drops 13% on chargesWednesday, Alcon Inc. (ACL) reported a 13% decline in profit for the third quarter, despite a 9% growth in sales, hurt by one-time charge related to majority ownership change and merger proposal. However, adjusted earnings per share came in above the Street view, as did revenue. Looking ahead, the company lifted its fiscal 2010 earnings guidance. Full Article
Oct 21, 2010 Kinder Morgan Q3 profit declines 11% on higher costsWednesday, Kinder Morgan Energy Partners LP (KMP) reported a 10.7% decline in profit for the third quarter, despite a 24% growth in revenues, hurt by higher operating and interest costs. Adjusted earnings came much below the Street view. Full Article
Oct 21, 2010 Novartis Q3 profit up 10%; backs FY10 organic sales guidanceThursday, Novartis AG (NVS) reported a 10% rise in profit for the third quarter, reflecting a 13% growth in revenue as well as contribution from acquisitions. A weaker dollar also benefited the quarterly results. The firm noted that its newly launched products boosted sales in a big way. Adjusted profit climbed 17% from last year. Looking ahead, the firm maintained its fiscal 2010 organic sales outlook. Full Article
Oct 21, 2010 Credit Suisse Q3 profit falls 74% on weaker tradingThursday, Credit Suisse Group (CS) posted a 74% plunge in its third-quarter profit, mainly reflecting a sharp decline in revenue from its investment banking division. The results of the quarter were hurt by lower trading volumes. Core revenues slid 29.6% year-over-year, as trading revenues dropped 74%. Full Article
Oct 21, 2010 Eli Lilly Q3 profit rises 38% on lower costs, beats Street; lifts FY10 EPS viewThursday, Eli Lilly & Co. (LLY) reported a 38% rise in profit for the third quarter, reflecting higher international revenue as well as lower costs. Adjusted earnings came in above the Street view, although revenue fell short of estimates despite growing 1.7% from last year. Looking ahead, the firm lifted its earnings outlook for the full year to a range above the current estimate of analysts. Full Article
Oct 21, 2010 Air Products & Chemicals Q4 profit up 11%; guides Q4, FY11 EPSThursday, Air Products & Chemicals Inc. (APD) reported a 11% rise in profit for the fourth quarter, as sales grew 10% from last year and came in line with the Street view. The results were hurt by a hefty charge related to its tender offer for the outstanding shares of Airgas, Inc. The firm noted that volumes grew 8% from the year-ago period. Operating margin went up 170 basis points to 17.1%. The company also provided earnings guidance for the first quarter and fiscal year 2011. Full Article
Oct 21, 2010 Danaher Q3 profit zooms 84%, adj. EPS beats StreetThursday, Danaher Corp. (DHR) reported an 84% rise in profit for the third quarter, reflecting a 16% growth in revenue and a one-time gain associated with the formation of the Apex Tool Group joint venture. Adjusted earnings grew 35.6% and come in above the street view, as did revenue. Full Article
Oct 21, 2010 Nokia swings to profit in Q3, to slash 1,800 jobsThursday, Nokia Corp. (NOK) posted a profit for the third quarter, an about face from last year, when it was hit by a hefty impairment. Adjusted operating profit for the quarter dropped 14%, although revenue grew nearly 5%. The firm raised its outlook for the fourth quarter. Nokia also announced that it is planning to layoff 1,800 people as part of a streamlining of its Symbian Smartphone organization. Full Article
Oct 21, 2010 Philip Morris Q3 profit up 1.3%, lifts FY10 EPS viewThursday, Philip Morris International, Inc. (PM) reported a 1.3% rise in profit for the third quarter, helped by a hike in cigarette prices. Net revenue excluding excise taxes, inched up 0.4%. Both earnings and revenue came in below the Street view. Looking ahead, the firm lifted and narrowed its fiscal 2010 earnings outlook to a range above the current estimate of analysts. Full Article
Oct 21, 2010 GlaxoSmithKline Q3 profit declines, raises interim dividendThursday, GlaxoSmithKline plc (GSK) reported over a 3.5% decline in profit for the third quarter, despite a 0.7% growth in revenue, hurt by sales returns. Pre-tax profit for the quarter decreased 5.7%. Excluding pandemic products, group sales were level in the quarter. In addition, the firm declared a third interim dividend that was a pence higher than the previous year. Full Article
Oct 21, 2010 AT&T Q3 profit soars on one-time gains, adj. EPS meets StreetThursday, AT&T, Inc. (T) said its third-quarter profit almost quadrupled from last year, helped by a huge gain from a tax settlement and a sale of its unit. Adjusted earnings came in line with the Street view. Revenues from continuing operations grew 2.8%. Full Article
Oct 21, 2010 Caterpillar Q3 profit up 96%, tops estimateThursday, Caterpillar Inc. (CAT) posted a 96% surge in revenue for the third quarter, reflecting a 53% growth in revenue. Both earnings and revenue came in above the Street view. Looking ahead, the firm also boosted its full-year earnings per share outlook to a range that was above the current estimate of analysts. Full Article
Oct 21, 2010 UPS Q3 profit advances 81%; lifts FY10 EPS viewThursday, United Parcel Service, Inc. (UPS) reported an 80.5% climb in profit for the third quarter, reflecting a 9.3% growth in revenue as well as a 500 basis points improvement in operating margin. Earnings per share came in above the Street view, but revenue fell short of estimates. Looking ahead, UPS lifted its profit outlook for 2010 to a range above the current estimate of analysts. Full Article
Oct 21, 2010 McDonald's Q3 profit rises 10%, beats estimateThursday, McDonald's Corp. (MCD) reported a 10.3% rise in profit for the third quarter, reflecting a 4% growth in revenue. Both earnings and revenue came in above the Street view. The firm noted that global comparable sales climbed 6.0% from last year. Looking ahead, McDonald's expects October comparable sales to improve by 5% to 6%. Full Article

Corporate News

Oct 21, 2010 Accenture says Pierre Nanterme to replace leaving CEO William Green; backs FY11 viewWednesday, Accenture plc (ACN) said it is appointing its head of global financial services arm, Pierre Nanterme, as Chief Executive Officer, effective January 1, 2011. Nanterme succeeds William Green, who will continue to serve as the Chaiman. The company also reiterated its business outlook for fiscal 2011. Full Article

Broker Ratings Changes

Oct 21, 2010 FBR Capital Markets Downgrades Delphi Financial Grp. (DFG) To Market Perform From Outperform With $30 Price Target

Todays WS Events

Oct 21, 2010 American Express Q3 10 Earnings Conference Call At 5:00 PM ET American Express Co. (AXP) will host a conference call at 5:00 PM ET October 21, 2010, to discuss its Q3 10 financial results. To access the live audio webcast, log on at http://ir.americanexpress.com
Oct 21, 2010 Eli Lilly Q3 10 Earnings Conference Call At 9:00 AM ET Eli Lilly And Co. (LLY) will host a conference call at 9:00 AM ET, October 21, 2010, to discuss its Q3 10 earnings results. To access the live webcast, log on at www.lilly.com
Oct 21, 2010 AT&T Q3 10 Earnings Conference Call At 10:00 AM ET AT&T Inc. (T) will host a conference call at 10:00 AM ET, October 21, 2010, to discuss its Q3 10 earnings result. To access the live webcast, log on to www.att.com/investor.relations
Oct 21, 2010 McDonald`s Q3 10 Earnings Conference Call At 11:00 AM ET McDonald`s Corp. (MCD) will host a conference call at 11:00 AM ET October 21, 2010, to discuss its Q3 10 earnings performance. To access the live webcast, log on to www.investor.mcdonalds.com
Oct 21, 2010 CA Q2 11 Earnings Conference Call At 5:00 PM ET CA, Inc. (CA) will host a conference call at 5:00 PM ET October 21, 2010, to discuss its Q2 11 earnings performance. To access the webcast, log on to http://ca.com/invest/ To listen to the call, dial 1-800-776-0402(US) or 1-913-312-1407(International). The replay can be heard by dialing 1-888-203-1112(US) or 1-719-457-0820(International) with passcode 3461265.

F & F I N : Reuters Before the Bell .- Stocks futures rise on weaker dollar, strong earnings




FROM: REUTERS - BEFORE THE BELL

Stock futures rise on weaker dollar, strong earnings
Geithner gambit on imbalance targets falls flat
Caterpillar profit tops Street estimate
Lilly tops forecast on cost cuts, sales fall short
Nokia to cut 1,800 jobs after strong third quarter
Toyota to fix 1.53 million Avalon, other cars worldwide
Goldman may repay Buffett's $5 billion investment: report
UAL, Continental post quarterly profits
Lenders in talks with states on foreclosure probes: report
EBay beats and raises, sees improved holiday

WSJ : India News - India Real Time.- Ahead of Obama Visit, a Crash Course in U.S. Presidents.

Another Crack at the Ombudsman Bill Expected This Month

  India Real Time
Ahead of Obama Visit, a Crash Course in U.S. Presidents
48 Indian college students whispered to each other frantically Wednesday afternoon in a 40 question challenge about U.S. Presidents in a lead-up event to get young people involved in President Barack Obama's upcoming India visit next month.

No Pakistan on President Obama’s India Trip
Mr. Obama will not be visiting Pakistan after his planned visit to India.

India Digest: CVC Zeroes In on Kalmadi Aide, Spending by OC
Here is a roundup of news from Indian newspapers, news wires and Web sites on Thursday, October 21, 2010. The Wall Street Journal has not verified these stories and does not vouch for their accuracy.

On Poll Eve, Patna Witnesses ‘Domino’s’ Effect
Thanks to an improved law and order situation, Patna is in the midst of a restaurant boom (we're counting fast food outlets too), with Domino's Pizza opening up on the eve of state elections.

India This Evening:Obama Will Focus Mainly on Bilateral Economic Ties, Says the U.S.
Here is a roundup of news from Indian newspapers, news wires and Web sites on Wednesday, October 20, 2010. The Wall Street Journal has not verified these stories and does not vouch for their accuracy.

The Washington Post.- Ezra Klein's Wonkbook.- TARP makes $25 billion; Fidelity abandoning shoddy mortgages; Case for QE2 gets stronger, weaker; Orszag on malpractice.


 
 Thursday, October 21, 2010
 
Wonkbook: TARP makes $25 billion; Fidelity abandoning shoddy mortgages; Case for QE2 gets stronger, weaker; Orszag on malpractice The $309 billion the government pumped into the banks and AIG has, so far, earned the government -- and taxpayers -- $25.2 billion. That's an 8.2 percent return over two years -- better than you would've gotten by investing in Treasury bills or money-market funds, though worse than you would've gotten from the stock market over the same period. And it kept the financial market from collapsing. Not bad, right?
That's not how the voters see it. TARP is among the least popular policies in recent memory. It has already lost some politicians -- like Utah's Sen. Bob Bennet -- their jobs, and will doubtless take more in November. Pollsters and politicians will tell you that part of the reason for the stimulus's unpopularity is that many voters confuse it with TARP. And yet, TARP may be the highest-return policy the government has implemented in decades. When you add up the benefits of the financial system not melting down, and then the direct returns to the investment, the bang-for-the-buck has been astounding. But good policy does not always make good politics. Welcome to Wonkbook.
Top Stories

TARP is providing a better payoff for the government than Treasury bills, report Yalman Onaran and Alexis Leondis: "The government has earned $25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, according to data compiled by Bloomberg. That beat U.S. Treasuries, high-yield savings accounts, money-market funds and certificates of deposit. Investing in the stock market or gold would have paid off better...The $25 billion TARP return could fund the SEC for more than 20 years, based on the agency’s proposed 2011 fiscal year budget. It could pay for all farm subsidies in the U.S. for more than two years."
But focus groups suggest voters may not like that, either: http://bit.ly/cNqAsM
This Ben Smith article is still relevant: http://politi.co/ddoybE
Fidelity National Financial will withdraw support from mortgages with shoddy paperwork, report Zachary Goldfarb and Jia Lynn Yang: "If there proves to be any problem with the accuracy of a title because of shoddy paperwork, the lenders would be responsible for losses under Fidelity National's new policy...A major insurer, Old Republic National Title Insurance, said this month that it would not back homes foreclosed on by J.P. Morgan Chase, which halted seizures in some states after paperwork problems surfaced...In Washington, federal officials addressing problems posed by the flawed foreclosure process said Wednesday that they did not think it presented a grave danger to the financial system, though they had not completed their assessment."
The case for a foreclosure moratorium: http://wapo.st/dqelo0
The case against a foreclosure moratorium: http://wapo.st/c93Fgy
The new "Beige Book" report from the Fed predicts slow growth ahead, reports Neil Irwin: "The new survey gave little evidence that the job market is picking up, saying that 'hiring remained limited, with many firms reluctant to add to permanent payrolls given economic softness.' The latest report comes ahead of a Nov. 2-3 meeting of Fed policymakers, at which they are likely to approve new, unconventional efforts to stimulate growth. The findings in the beige book - a weak labor market, modest growth and few signs of inflation - offer support for these new steps, which would include major new purchases of bonds to pump more money into the economy."
Most economists are not hopeful about quantitative easing, writes Annie Lowrey: "From late 2008 through 2009, the Fed created about $1.7 trillion and used the funds to purchase debt in housing-finance firms like Fannie Mae, Treasury bonds, and a whole lot of mortgage-backed securities--tripling the size of its balance sheet to $2.3 trillion. That helped clean some bad assets from the banks' books and reassured spooked markets. But in 2009, the government was trading cash for mortgage-related assets nobody wanted. In 2010, it wants to try to trade cash for an asset that is essentially as safe as cash. If QE2 is to work, it will have to work differently than QE did--and probably won't work as well."
Peter Orszag says health-care reform doesn't go far enough on malpractice: "The traditional way to reform medical malpractice law has been to impose caps on liability — for example, by limiting punitive damages to something like $500,000. A far better strategy would be to provide safe harbor for doctors who follow evidence-based guidelines. Anyone who could demonstrate that he has followed the recommended course for treating a specific illness or condition could not be held liable."
"The health care reform act that Congress passed earlier this year included a modest set of state pilot projects, including one in Oregon that is intended to experiment with this approach. But these pilots are small; the project in Oregon, for example, has only $300,000 in financing. What’s needed is a much more aggressive national effort to protect doctors who follow evidence-based guidelines. That’s the only way that malpractice reform could broadly promote the adoption of best practices." Got tips, additions, or comments? E-mail me.
Math-rock video interlude: Battles' "Atlas".
Still to come: Paul Ryan's roadmap would cut Social Security benefits by more than half for some beneficiaries; the next Congress will likely be highly skeptical of global warming; the White House is still fighting lobbyists over health care; Tennessee governor Phil Bredesen says health-care reform will unravel the employer-based market; and a vending machine that dispenses live crabs.
Economy/FinReg

Some Social Security beneficiaries will see more than half of their benefits cut under Republican Rep. Paul Ryan's plan, reports Lori Montgomery: "The plan, by Rep. Paul Ryan (R-Wis.), would reduce benefits by gradually raising the retirement age and gradually trimming benefits for the top 70 percent of earners. Together, the two provisions would slice initial benefits by about a quarter for middle-income Americans who turn 65 in 2050, according to the analysis. Wealthier retirees would see even deeper cuts, losing about a third of scheduled benefits in 2050 and more than half of scheduled benefits if they turn 65 in 2080."
A small activist group broke open the foreclosure scandal, reports Ariana Eunjung Cha: "In addition to trying to educate the public about the issue, the group had also been quietly passing along stacks of problematic documents to state and federal regulators, lawmakers, judges and law enforcement officials. They pointed out that document processors such as Stephan had admitted in sworn depositions that they had signed off on up to 10,000 foreclosure documents a month, even though they had not reviewed them as legally required. They also shed light on foreclosure cases in which the paperwork appeared to have been backdated, forged or improperly notarized."
Wells Fargo insists it's unaffected by the foreclosure mess: http://wapo.st/cWgRMu
Higher commodity prices are pushing retail prices upward, report John Shipman and Anjali Cordeiro: "Across corporate America, more companies are wrestling with when and how much to raise prices as raw materials costs climb. The increases pose new hurdles to profits as consumers continue to resist increases...Corn is up 44%, milk is up 6.5%, hot rolled coil steel is up 4%, copper up 29%, and oil up 14% from a year ago. At this point it's difficult to quantify how broadly these price increases will affect future earnings. The big unknown is not only how much further commodity prices will rise, but how much of that added cost companies will be able to pass along in the form of higher prices."
Foreclosure defense is now a booming legal specialty: http://bit.ly/9TJWgu
New Basel III regulations will triple bank liquidity requirements, reports Howard Schneider: "The committee, based in Basel, Switzerland, wants governments to roughly triple the amount of capital banks set aside, to an amount equal to 7.5 percent of their deposits and other liabilities. That requirement and other measures proposed by the committee will be reviewed by finance ministers of the G-20 group of nations when they meet in South Korea this week and is expected to be endorsed by G-20 heads of state at a summit next month...U.S. officials plan to integrate the Basel proposals into the financial regulations approved earlier this year by Congress. Other countries are expected to follow suit, Cecchetti said, so that the new capital rules are in place by 2013 across major financial markets."
Seeking mortgage modifications shouldn't subject homeowners to scorn, writes Michelle Singletary: http://wapo.st/cr5yIM
Chinese capitalism interlude: A vending machine that dispenses live crabs.
Energy

Tea party candidates are highly skeptical of global warming science, reports John Broder: "Whatever the party composition of the next Congress, cap and trade is likely dead for the foreseeable future. If dozens of new Republican climate skeptics are swept into Congress, the prospects for assertive federal action to control global warming gases, including regulation by the Environmental Protection Agency, will grow dimmer than they already are...More than half of Tea Party supporters said that global warming would have no serious effect at any time in the future, while only 15 percent of other Americans share that view, the poll found."
GM will pay millions to clean up old plant sites: http://nyti.ms/aRZWoJ
We're on the cusp of a tidal energy boom, reports Elisabeth Rosenthal: "While previous test projects tended to be operated by small, boutique firms, the giants of hydropower, which have decades of experience drawing power from rivers, are now getting into the ocean business. Tides are particularly attractive sources of power because they are predictable, unlike sunshine and wind. Not surprisingly, countries with rough seas like Britain and Portugal are leading the way in exploring ocean power...The European Energy Association estimates that, globally, the oceans could yield more than 100.000 terawatt hours a year if the technology to harness that power can be perfected. That is more than five times the electricity the world uses in a year."
The United Steelworkers are upholding free market principles by challenging China on clean energy, writes Tim Fernholz: http://bit.ly/abGUpA
Biodiversity yields economic benefits, writes Thomas Lovejoy: "A major reason the biology of the planet is largely ignored in human affairs, is that its critical contributions to human wellbeing are not taken into account in the formal economy. The world’s poor, for example, derive 40 to 89 percent of their annual 'income' from nature, both directly through the goods it provides (e.g., food and fiber) and indirectly through its services...On a larger scale, the TEEB project reckons the annual value contributed by global wetlands at $3.4 billion. On land the project calculates the annual loss of natural capital from natural ecosystems like forests at $2 trillion to $4.5 trillion."
Thai street vending interlude: Extreme iced tea making.
Domestic Policy

A war over health care regulations is brewing, writes Jonathan Cohn: "The issue at hand is how insurance companies spend their money. All insurance carriers have what is known as the 'medical-loss ratio.' It refers to the amount of revenue that insurers eventually devote to actual patient care. Wall Street and the industry like that number to be as low as possible, because, among other things, a low MLR leaves more room for profits. Consumer advocates prefer the MLR to be as high as possible, because it rewards social responsibility and, to some extent, efficiency...Representatives for industry groups have been lobbying furiously to weaken the regulations. Potter, in his Huffington Post dispatch, says 'the insurance industry and other special interests are represented here by more than a thousand lobbyists'--compared to less than 30 on the consumer side."
Michelle Rhee may take over New Jersey schools: http://wapo.st/958XdL
The FCC wants to free up broadcast airwaves for mobile device use, reports Cecilia Kang: "Genachowski said he planned to introduce a proposal at the agency's Nov. 30 meeting that would lay the groundwork for broadcasters to voluntarily release airwaves for sale to mobile carriers, which have been struggling to keep up with consumer demand for Internet-capable wireless devices...Genachowski declined to comment on whether the meeting would include a vote on his controversial net-neutrality proposal, which would essentially require Internet service providers to treat all Web traffic equally...The agency has instead been focused on mobile broadband regulations."
Putting healthy foods in vending machines is a difficult engineering problem: http://bit.ly/cGv6Z2
Health care reform gives employers an incentive to drop coverage, writes Phil Bredesen: "Now that we've protected our employees, we'll also have to pay a federal penalty of $2,000 for each employee because we no longer offer health insurance; that's another $86 million. The total state cost is now about $200 million. But if we keep our existing insurance plan, our cost will be $346 million. We can reduce our annual costs by over $146 million using the legislated mechanics of health reform to transfer them to the federal government...The consequence of these generous subsidies will be that America's health reform may well drive many more people than projected out of employer-sponsored insurance and into the heavily subsidized federal system."
Frequent flyer systems could be adapted to promote preventative health care, writes Esther Dyson: http://bit.ly/ca6uMh
Republican anti-health care reform suits will backfire, writes Matt Miller: "Republicans used to understand these economics perfectly. That's why Bob Dole, Howard Baker, John Chaffee and Mitt Romney (among others) have all supported individual mandates. Are all these Republicans constitutional rogues? No one disputes that the federal government has the power to stop insurers from denying coverage based on preexisting conditions. Under the Constitution, the feds thus have the corresponding power to enact reasonable measures to assure that this reform actually works. For seven decades the Supreme Court's reading of the commerce clause has made this permissible."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.