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Oct 25, 2010

MarketWatch: Personal Finance Daily.- Home sales, appraisals and that tax deduction.

MarketWatch
Personal Finance Daily
OCTOBER 25, 2010

Monday's Personal Finance stories

By MarketWatch



Don't miss these top stories:
On the same day that the National Association of Realtors announced that existing-home sales rose 10% in September, a news report posited that a bipartisan commission charged with finding ways to reduce the federal deficit will propose limiting the mortgage-interest tax deduction, so beloved by homeowners nationwide.

The idea has been proposed before — remember President George W. Bush's tax simplification committee? — but it's even less likely to get through Congress this time around, if the deficit commission does indeed propose it, given the tenuous state of the housing market. Talk about a way to stifle home-buyer demand.

Read more about the unlikelihood of Congress touching that particular tax cut, as well as details on the good-news signs in the real-estate market. Plus, read Amy Hoak's Home Economics column on how federal regulators are cracking down on inaccurate home appraisals.

On the non-real-estate front, read how older Americans report that some costs are rising — even though their Social Security benefits are not.

Andrea Coombes , Personal Finance editor

RETIREMENT

Costs rise, even if Social Security doesn't

Thanks to low average inflation nationwide, retired Americans' Social Security checks in 2011 won't include a cost-of-living increase for the second year in a row. But even though the inflation rate has been low for about two years, older people report that they're paying more for a variety of items.
Read more on costs rise, even if Social Security doesn't.


CONSUMERS

USDA: Food inflation to accelerate into 2011

Food inflation will "accelerate" during the final months of 2010 and into the first six months of 2011, especially for meat, cereal and dairy products, the U.S. Agriculture Department said Monday.
Read more on food inflation to accelerate into 2011.


REAL ESTATE

Tougher appraisal standards coming soon

Appraisers and appraisal management companies are facing new requirements aimed at ensuring home valuations are accurate and fair — and they could be in for tougher penalties if they don't follow the rules.
Read more on tougher appraisal standards coming soon.


Existing-home sales climb 10% in September

Sales of existing homes climbed 10% in September, with a drop in prices helping transactions increase for a second straight month, according to a report released Monday.
Read more on existing-home sales climb 10% in September.

Watchdog: Loan-modification plan failing

A watchdog on Monday said the government's home-loan modification program is failing, which risks sparking more public anger and mistrust.
Read more on loan-modification plan failing.

Bair backs ‘safe harbor' plan on foreclosures

Federal Deposit Insurance Corp. Chairman Sheila Bair on Monday outlined ideas to tackle the so-called "robo-signing" crisis, saying that lenders, investors and borrowers could reach a broad pact on which foreclosures should be able to go forward.
Read more on Bair backing ‘safe harbor' plan on foreclosures.


Commentary: For housing, stability still far off

U.S. home sales have perked up in the past two months after plunging to a record-low in July, the real-estate agents reported Monday.
Read more on for housing, stability still far off.


Commentary: Take away the mortgage deduction at your own risk

It doesn't make much sense to allow homeowners to deduct their mortgage-interest payments on their federal income-tax returns. But then how many dozens of other tax breaks can you say the same thing about?
Read more on take away the mortgage deduction at your own risk.


Mortgage-interest tax break may face ax

The hugely popular mortgage-interest tax deduction could be targeted by a bipartisan commission charged with finding ways to chop the deficit, according to a report published Monday.
Read more on mortgage-interest tax break may face ax.


INVESTING

Stock funds yield surprisingly strong dividends

One of the mutual-fund world's dirty little secrets has been that "growth-and-income" and "equity-income" funds provided shareholders with virtually no income.
Read more on stock funds yield surprisingly strong dividends.


Gold-miner ETF fails to break 2008 peak

An exchange-traded fund that invests in gold-miner stocks has tripled in price since bottoming two years ago, but the ETF suffered a sudden correction last week as an attempt to break through its 2008 apex failed.
Read more on gold-miner ETF fails to break 2008 peak.

How to spot some age-old revenue-cooking tricks

Talk about a caffeine jolt. When securities regulators questioned whether Green Mountain Coffee Roasters had improperly booked sales, investors unceremoniously dumped the stock down the drain.
Read more on how to spot some age-old revenue-cooking tricks.
Two formerly bearish indicators now more positive

A "head and shoulders" top? Just such a bearish prospect was quite the rage this summer among many bearish advisers. All that was needed for this technical indicator to trigger an actual sell signal was for the market to fall below the "neckline" that connected the right and left shoulders — and the market came dangerously close to doing so.
Read more on two formerly bearish indicators now more positive.


ECONOMY & POLITICS

Gridlock would wash in with GOP ‘wave'

Republican agenda, meet Washington gridlock. On the verge of recapturing the House of Representatives on Nov. 2 but with the Senate still looking out of reach, President Barack Obama's opponents and their smaller-government ideas are facing a scenario of probable political inertia even as they ride a wave of voter discontent and anger at Washington incumbents.
Read more on gridlock would wash in with GOP ‘wave'.

New cyber law could stifle telecom growth

An Obama administration proposal to increase law enforcement's ability to listen in on electronic communications could have far-reaching implications for the future of the Internet and cellular-phone service.
Read more on new cyber law could stifle telecom growth.

Open economies better for jobs in long run: World Bank

Open economies provide more jobs and allow for a better recovery than closed ones in the long run, according to new research presented at the World Bank Monday.
Read more on open economies better for jobs in long run: World Bank.

CNBC Evening Brief : Investors Snap Up 5-Year TIPS, Expecting Inflation to Rebound.





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NYT Afternoon Business News Update.- Treasury Sells Bonds With a Negative Yield





BUSINESS:

New Rules to Cut Emissions for Trucks

By JOHN M. BRODER
New medium- and heavy-duty trucks will have to cut fuel consumption and emissions by 10 to 20 percent under the standards proposed by administration.
Itineraries

Hotels Seek Rules for Online Reviews

By SUSAN STELLIN
As TripAdvisor's influence grows, hotels are increasingly concerned about damage from inflammatory claims in reviews.

Treasury Sells Bonds With a Negative Yield

By CHRISTINE HAUSER
Inflation-protected securities sold at negative yields for the first time ever as traders anticipate that the Fed will start a new round of asset purchases.

U.S. Home Sales Rose in September

By THE ASSOCIATED PRESS
Sales of existing homes grew 10 percent last month to an annual rate of 4.53 million but were still down 19 percent from the same month a year ago.
Media Decoder Blog

Newspaper Circulation Falls Broadly but at Slower Pace

By JEREMY W. PETERS
Newspaper publishers reported lower overall circulations for the period of April through September.

F & F I N : Reuters - Daily Investor Update.- Wall St ends up on weak dollar, Fed hopes.



FROM: REUTERS - DAILY INVESTOR UPDATE


Wall St ends up on weak dollar, Fed hopes
Existing home sales rise but Fed easing still seen
Ford sees U.S. sales in October as best in 2010
DuPont profit seen lower; investors eye potential
BankUnited to file for IPO this week: sources
SEC questioned Warren Buffett's Berkshire on loss accounting
Foreclosure mess may hurt housing market, FDIC says
Sprint's Tab is cheaper but requires a contract
Regulators reviewing foreclosure practices: Bernanke
CFTC takes aim at "runaway robotic trades": Chilton

The Wasington Post: Today's Most Read Articles



 Most Viewed Articles on washingtonpost.com

1) Gauging the scope of the tea party movement in America

In an unruly, unpredictable and chaotic election year, no group has asserted its presence and demanded to be heard more forcefully than the tea party. The grass-roots movement that was spawned with a rant has gone on to upend the existing political order, reshaping the debate in Washington, defea...

2) Just who does Jon Stewart think he is?

These days, he can claim to be many things: political satirist, pseudo-anchorman, media critic, author, successful businessman, philanthropist, Emmy Award magnet. On Monday he arrives in Washington in a new, self-anointed role: as our national voice of reason, moderation and rationality -- a unit...

3) Election Day could bring historic split: Democrats lose House, keep Senate

The question around Washington today is not whether Nov. 2 will be a difficult day for the Democrats who control Congress, but rather how bad it will be.

4) Are you part of the New Elite?

The tea party appears to be of one mind on at least one thing: America has been taken over by a New Elite.

5) RI Dem: Obama can 'shove it' for not endorsing him

PROVIDENCE, R.I. -- The Democratic candidate for Rhode Island governor, widely seen as more conservative than the independent seeking to lead the heavily Democratic state, said Monday that President Barack Obama can "shove it" after learning Obama would not endorse him.

6) Faster Forward: Sony finally ejects the Walkman

This weekend's weirdest tech news: Sony will stop selling its Walkman portable tape player in Japan, the land of that once-iconic device's birth. That's "weirdest" not in the sense of "I can't believe Sony won't make those things anymore," but in terms of "I can't believe Sony still sells those things."

7) Think this economy is bad? Wait for 2012.

We're barely two years past the banking crisis, still weathering the mortgage crisis and nervously watching Europe struggle with its sovereign debt crisis. Yet every economic seer has a favorite prediction about what part of the economy the next crisis will come from: Municipal bonds? Hedge funds?...

8) Haynesworth excels vs. Bears after nearly a season and a half of struggles

Yes, it took being a part of the NFL's Gaffe of the Year, a 60-minute, mistake-laden slop featuring eight total fumbles and six interceptions. But Albert Haynesworth finally arrived as the awesome playmaker he promised Washington in February 2009.

9) Last house on sinking Chesapeake Bay island collapses

On Holland Island, Md. The story was strange enough to be a child's fable: In an isolated section of the Chesapeake Bay, there was a two-story Victorian house that seemed to emerge directly from the water. And, scurrying around it, there was a retiree, trying to keep the house from falling in. Fi...

10) Realco guns tied to 2,500 crimes in D.C. and Maryland

Outside a baby shower in Landover three years ago, Erik Kenneth Dixon snapped. As he argued with his sister and her boyfriend in a parking lot, the 25-year-old man whipped out a .45-caliber Glock and shot her in the leg. Then he chased down her boyfriend, firing between cars and at the running ma...

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




U. S. MARKETS AT CLOSE SNAPSHOT


DJIA*11164.50  31.49 0.28
Nasdaq*2490.85  11.46 0.46
S&P 500*1185.67    2.54      0.21
DJ Total Stock Market*12428.30  36.84 0.30
Russell 2000     707.89    4.46 0.63

F & F I N : Existing-Home Sales Rose 10% in September.

Mineweb : Top Stories.- Wafi-Golpu, Freeport and nickel

Mineweb logo

FEATURED PODCAST                                                     

Wafi-Golpu, Freeport and nickel

A look at the importance of the expansion in the ounces at Wafi-Golpu, Freeport's strong numbers and why nickel prices are doing so well
 

TOP STORIES | Monday , 25 Oct 2010                                                     

Copper miner Equinox to buy Citadel Resource for A$1.25bn

With the goal of becoming a leading independent copper producer with assets in Zambia and Saudi Arabia, Australian companies Equinox Minerals and Citadel Resources have announced a friendly merger.    Monday , 25 Oct 2010

Exeter looking to add further value to its gold ounces in the ground

Junior gold explorer, Exeter Resource, sees little need to expand its gold/copper/silver resource at Caspiche in Chile and is concentrating on making its ounces in the ground ‘more valuable'.    Monday , 25 Oct 2010

Gold and the G20 - what next?

A warning that if long term broad capital controls are taken up by G20 members this could be disastrous for the global economy but positive for gold and other precious metals.    Monday , 25 Oct 2010

Newcrest and Harmony's gold strike of the century

The Harmony-Newcrest JV at Wafi-Golpu in Papua New Guinea is now targeting 30m ounces of gold while the copper target has been raised from 4m to 8m tonnes    Friday , 22 Oct 2010

Fairly magic results from Silver Lake prospect near Kalgoorlie

Silver Lake Resources has produced high grade gold intercepts north and south of previous drilling at its Magic Prospect 50kms south east of Kalgoorlie    Monday , 25 Oct 2010

South Australia's mining tax rebellion

South Australia joins Western Australia in the loud chorus against Canberra's planned mining tax    Monday , 25 Oct 2010

Copper capitulation by the DRC

Freeport-McMoRan accepts a slew of changes for the Tenke Fungurume contract but, on close inspection, the changes look more like a face-saving exercise for the DRC than a hard won deal    Friday , 22 Oct 2010

Blackrock favours iron ore, copper

Evy Hambro cited strong underlying Chinese commodity consumption, undented by steps to curb growth as reason why the group likes the metals    Monday , 25 Oct 2010

Canada's pro-business stance tested by BHP's Potash bid

The Canadian government will have its pro-business reputation on the line when it decides whether or not to allow BHP's bid for Potash Corp and is likely to win enemies either way    Monday , 25 Oct 2010

Why people are worried about China's rare earth dominance

A look at the reasons behind global jitters about China's dominance in the rare earth space as concerns continue to mount that the country has been choking off shipments of the metals    Monday , 25 Oct 2010

Ivanhoe attempting return to high-yield bond market

The success of the issuance is important for the company's expansion plans but, the four-notch difference between the ratings from the three biggest agencies has raised questions about how the deal will be prices    Monday , 25 Oct 2010

Rio Tinto says Ivanhoe tension won't hold back Oyu Tolgoi

Tom Albanese, Rio CEO, says he still hopes to see first production from the mine in 2013 and reiterated that both Rio Tinto and Ivanhoe were committed to the rapid development of the project despite their disagreements    Monday , 25 Oct 2010

Pundits have copper in short supply from next year

Industry experts on copper, not normally prone to hyperbole, are looking for serious production shortfalls from next year.    Sunday , 24 Oct 2010

Australian gold miner turns its hand to rare earths

A Western Australian company that graduated into gold mining this year now has its sights on the growing rare earths mining business.    Friday , 22 Oct 2010

Coal India buys Wenco's Fleet Management System

In what the company describes as its biggest ever deal, Wenco International Mining Systems is to supply its Fleet management system to four Coal India mines.    Sunday , 24 Oct 2010

Weekend Top Story: The value saga of Oyu Tolgoi

Questions abound as capital raising machinations raise the risks associated with getting the most out of the Oyu Tolgoi project Thursday , 21 Oct 2010
         

Bond Report: Treasurys rise before TIPS sale, housing data.

MarketWatch
SPECIAL FINANCIAL SERVICES
 
Bond Report: Treasurys rise before TIPS sale, housing data
 
By Deborah Levine MarketWatch


Treasury prices rise on Monday, pushing yields down, on speculation the Federal Reserve will buy even more debt that previously predicted See full story

RTTNews: Morning Market Briefing.-Stocks Headed For Solid Open After G20 Pledge - U.S. Commentary .

Morning Market Briefing Mon Oct 25 09:01 2010

Commentary

Oct 25, 2010 Stocks Headed For Solid Open After G20 Pledge - U.S. Commentary Stock futures are pointing to a solid open Monday morning after the G20 revealed policy that in effect would weaken the U.S. dollar. The major index futures are all in positive territory, with the Dow futures up by 40 points. Full Article

Economic News

Oct 25, 2010 Japan Logs JPY797.0 Bln Trade SurplusJapan had a merchandise trade surplus of 797.008 billion yen in September, the Ministry of Finance said on Monday, up 54.0 percent on year from 517.63 billion yen in September 2009. Full Article
Oct 25, 2010 U.K. Mortgage Activity Remains Subdued: BBA Mortgage lending by British banks continued to slow in September, figures showed Monday, with the number of loans approved by main high street banks falling to an 18-month low. Full Article
Oct 25, 2010 Additional Fed Action- More Of Sentimental Impact?Offering some relief to the markets, some economic numbers released in the previous week came in better than expected. Full Article
Oct 25, 2010 RBA Calls For More Exchange Rate FlexibilityReserve Bank of Australia Governor Glenn Stevens on Monday said more flexibility of exchange rates in key emerging countries in Asia would create a more balanced global economy, but warned that flexible currencies alone won't spur global growth. Full Article
Oct 25, 2010 Eurozone Industrial Orders Surge New industrial orders received by euro area manufacturers rose in August and at almost twice the expected pace, official figures showed on Monday. The sharp rise lifts hopes that the eurozone's manufacturing-led recovery could continue through to the end of the year. Full Article

Earnings News

Oct 25, 2010 RadioShack Q3 profit rises 23% helped by smartphone salesMonday, RadioShack Corp. (RSH) said its third-quarter profit rose 23% from last year, helped by sustained growth in wireless products, and strong performance by U.S company-operated stores. Comparable store sales grew 6.2% year-over-year. Full Article
Oct 25, 2010 Lorillard Q3 profit rises 17%, beats StreetMonday, Lorillard, Inc. (LO) reported a 16.6% rise in profit for the third quarter, helped by stock repurchases, higher prices, and an increase in shipments, as the company expanded its market share. Both earnings and revenue, which grew 12.6% from last year, came in above the Street view. Full Article
Oct 25, 2010 Invesco Q3 profit surges 47%Monday, Invesco Ltd. (IVZ) reported a 47% jump in profit for the third quarter, reflecting a 35% growth in operating revenue that however, came in below the Street view. The results of the latest quarter were boosted by Invesco's acquisition of Morgan Stanley's (MS) retail asset management business. Full Article
Oct 25, 2010 NV Energy Q3 profit flat with last year, beats StreetMonday, NV Energy, Inc. (NVE) reported a third-quarter profit that was flat with last year, despite a 7% decline in revenue, reflecting lower fuel and power costs. Earnings per share came in above the Street view, but revenue fell short of estimates. Full Article

Corporate News

Oct 25, 2010 Arena's weight-loss drug fails to get FDA approvalSaturday, Arena Pharmaceuticals, Inc. (ARNA) got a jolt as the U.S Food and Drug Administration denied approval to its weight-loss drug Lorcaserin. Last month, an FDA advisory panel did not recommend the drug's approval, citing potential safety issues. Full Article
Oct 25, 2010 BP to sell stake in four of Gulf of Mexico assets for $650 mlnMonday, BP Plc (BP) said it agreed to divest its stakes in four deepwater oil and gas fields in the US Gulf of Mexico to Marubeni Oil and Gas for $650 million. The British oil giant has been selling assets of lately to meet its financial obligations resulting from the Gulf of Mexico spill. The firm expects the deal to close in early 2011. Full Article

Broker Ratings Changes

Oct 25, 2010 FBR Capital Markets Downgrades The Home Depot, Inc (HD) To Market Perform From Outperform With $32 Price Target
Oct 25, 2010 FBR Capital Markets Lowers Microsoft Corp (MSFT) To Market Perform From Outperform With $27 Down From $32 Price Target

Todays WS Events

Oct 25, 2010 Lorillard Q3 10 Earnings Conference Call At 10:00 AM ET Lorillard, Inc. (LO) CEO Murray Kessler, will host a conference call at 10:00 AM ET, October 25, 2010, to discuss its Q3 10 earnings results. To access the live webcast, log on at www.lorillard.com To hear the live call, dial (888) 239-6824 (US) or (706) 902-3787 (International) with passcode 15224371. A replay of the call can be heard by dialing (800) 642-1687 (US) or (706) 645-9291 (International) with passcode 15224371.
Oct 25, 2010 Amgen Q3 10 Earnings Conference Call At 5:00 PM ET Amgen Inc. (AMGN) will host a conference call at 5:00 PM ET, October 25, 2010, to discuss its Q3 10 earnings result. To access the live webcast, log on at http://investors.amgen.com/phoenix.zhtml?c=61656&p=irol-EventDetails&EventId=3417745
Oct 25, 2010 Plum Creek Timber Q3 10 Earnings Conference Call At 5:00 PM ET Plum Creek Timber Company, Inc. (PCL) will host a conference call at 5:00 PM ET, to discuss Q3 10 earnings results on October 25, 2010. To access the live webcast, log on at www.plumcreek.com To hear the live call, dial 1-800-572-9852 or 1-706-645-9676. A replay of the call can be heard by dialing 1-800-642-1687 or 1-706-645-9291 (International) with passcode 84401833.
Oct 25, 2010 Texas Instruments Q3 10 Earnings Conference Call At 5:30 PM ET Texas Instruments Inc. (TXN) will host a conference call at 5:30 PM ET, to discuss Q3 10 earnings results, on October 25, 2010. To access the live webcast, log on at www.ti.com/ir

F & F I N : Before The Bell .- Stocks Futures rise as dollar falls after G20




FROM : REUTERS - BEFORE THE BELL

  Stock futures rise as dollar falls after G20
Cities hold key to healthier GDP
Bank of America finds foreclosure mistakes: report
Singapore Exchange to buy ASX for $8.3 billion
BP CEO slams media, rivals for boosting spill fears
RadioShack profit, sales top estimates
SEC plans to streamline complaint process: report
G20 inks pact to avert trade war
BP sells Gulf of Mexico fields to pay for oil spill
JPMorgan to launch copper ETP: SEC filing

WSJ: India News Update



Go to Page  India Real Time
Piramal Healthcare Shareholders Get A Raw Deal
Piramal Healthcare Ltd. shareholders are a disappointed lot. They have been waiting to be rewarded by the pharmaceutical company ever since it announced the sale of its local generic-drugs business to U.S.-based Abbott Laboratories for a hefty $3.7 billion in May.

India’s Microlenders Still Struggling
Some of India's microlenders are still being blocked from doing business in the state of Andhra Pradesh.

‘Holy Kitchens’ Films Ponder Religious Side of Food
For New York chef Vikas Khanna, a meal is about much more than just eating the food that's prepared, which is why he's backing a series of films that look at religion and food.

India Journal: Gandhi and Ambani, Indian Neighbors
Obama needs to visit a Mumbai neighborhood which shows all India has to offer, says Prashant Agrawal.

India Digest:Obama Coming, Officials Struggle to Narrow Distance
Here is a roundup of news from Indian newspapers, news wires and Web sites on Monday, October 25, 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 firms favoring GOP; fiscal commission hits tax deductions; Christina Romer warns against deficit reduction



 Monday, October 25, 2010
 
Wonkbook: TARP firms favoring GOP; fiscal commission hits tax deductions; Christina Romer warns against deficit reduction On Sunday, I rewatched an old episode of the West Wing. "Enemies Foreign and Domestic," it was called, and one of the subplots involved a computer-chip manufacturer who'd just discovered a serious defect. The company was doing the right thing and recalling the product, but that left it, and its 90,000 workers, in jeopardy. Leo wants a bailout. President Bartlett doesn't. And though, for awhile, the arguments gets made in economic terms, eventually Bartlett rounds on Leo. "They were huge contributors!" He yells. "Huge!"
The company gets some government help, but it comes at a cost. You can never donate to me, or any other candidate, again, Bartlett tells the CEO. "You can vote, but that's it."
The Obama White House is probably wishing it had added a similar clause to TARP. Not only are the bailed-out companies giving significant amounts of money -- more than $1.4 million, at last count -- but they're giving most of it to Republicans. That leaves Democrats in an unhappy position: The voters blame them for the bailout (most Americans don't know TARP was conceived and signed by the Bush administration), and the bailed-out companies are funding the other guys. They've managed to end up on the wrong side of both the people and the powerful. What would Bartlett have done?
It's Monday. Welcome to Wonkbook.
Top Stories

Bailed out companies are giving considerable sums to midterm campaigns -- and mostly to Republicans, reports T.W. Farnham: "Senate Minority Leader Mitch McConnell (Ky.) was a fierce critic of the federal bailout of General Motors and Chrysler last year, saying he could not 'ask the American taxpayer to subsidize failure.' But GM doesn't seem to hold a grudge. The political action committee formed by the company, which is now largely owned by taxpayers, cut McConnell a $5,000 campaign check in September, a small piece of the $190,000 it donated to campaigns in the past month... Among companies with PACs, the 23 that received $1 billion or more in federal money through the Troubled Assets Relief Program gave a total of $1.4 million to candidates in September, up from $466,000 the month before. Most of those donations are going to Republican candidates."
The deficit commission will likely focus on tax deductions, reports Damian Paletta: "Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table just weeks before the deficit commission issues recommendations on policies to pare back with the aim of balancing the budget by 2015...At stake, in addition to the mortgage-interest deductions, are child tax credits and the ability of employees to pay their portion of their health-insurance tab with pretax dollars. Commission officials are expected to look at preserving these breaks but at a lower level, according to people familiar with the matter. The officials are also looking at potential cuts to defense spending and a freeze on domestic discretionary spending."
Obama is being too hard on pomegranate juice? http://bit.ly/dqISko
Now is not the time for deficit cuts, writes Christina Romer: "The best thing would be for Congress to pass a plan now that will reduce deficits when the economy is back to normal. France’s recent plan to gradually raise its retirement age to 62 from 60 is a classic example of such 'backloaded' reduction. President Obama’s proposal to eliminate the Bush tax cuts on high incomes is another: it would raise revenue by only $30 billion in 2011, but by more than $600 billion over the next decade. History shows that well-designed backloaded plans are credible. For example, changes to Social Security eligibility and taxes have been passed years, if not decades, before they took effect."
Got tips, additions, or comments? E-mail me.
The G-20 -- China included -- has agreed to try and even out currency imbalances, reports Howard Schneider: "The statement from the finance leaders of the Group of 20 nations was a carefully worded bargain across a range of issues. It put China on the record as seeking to bring down its massive trade surplus and let its exchange rate fluctuate more. It also hinted that any move by the U.S. Federal Reserve to further ease monetary policy would be measured so as not to disrupt currency values or capital flows in emerging market nations... The plan envisions a greater role for the International Monetary Fund in overseeing whether exchange rates and trade balances are moving as intended."
'90s power pop interlude: Matthew Sweet and John Hiatt play "Girlfriend".
Still to come: The top Republican on the House Financial Services Committee is chiding financial lobbyists for donating to Democrats; Business Week walks you through the foreclosure crisis; Britain imposes a carbon tax; some states moving towards unicameral legislatures; state health exchanges could vary wildly; and Sears caters to a new, undead clientele.
Economy/FinReg

The top Republican on the House Financial Services committee is attacking financial lobbyists for being too soft on financial regulation -- and donating too much to Democrats: "When Republican Rep. Spencer Bachus of Alabama stepped in front of 100 financial services lobbyists at the Capitol Hill Club last month, he asked for an equal chunk of their campaign cash — and made clear he was watching closely. It is hard to believe, he told the crowd, that some in their industry were still giving more to Democrats than Republicans after, he said, Democrats hammered them with over-reaching Wall Street reform legislation, people familiar with the presentation said."
Alice Rivlin's deficit group, however, is likely to go further: http://bit.ly/9fdO5J
Confused by the foreclosure crisis? Business Week's cover story is the most comprehensive overview I've seen: "Wall Street's unspoken strategy has been to kick mortgage losses down the road until an economic recovery reinflates the housing market. The faulty-foreclosure crisis has forced the issue back into the present tense, triggering a fight over who will bear the brunt of those losses. The combatants—all of whom are trying to minimize their share of the damage—include homeowners, lenders and mortgage brokers, loan servicers and the underwriters of mortgage-backed securities, the buyers of those securities, title insurers, rating firms, and the federally controlled mortgage buyers Fannie Mae (FNM) and Freddie Mac (FRD). J.P. Morgan predicts that bondholders will absorb most of the estimated $1.1 trillion loss—but may succeed in foisting about $55 billion on banks."
Thrifty homeowners are seeing generous refinancing packages: http://nyti.ms/c7URpv
Rick Wagoner did more to save GM than Steve Rattner, writes Malcolm Gladwell: "What Wagoner meant in his testimony before the Senate, in other words, was something like this: “At G.M., we are finally producing world-class cars. We have brought our costs, quality, and productivity into line with those of our competitors. We have finally disposed of the crippling burden of our legacy retiree costs. We have expanded into the world’s fastest-growing markets more effectively than any other company in the United States. But the effort required to bring about that transformation has left our balance sheet thin—and, at the very moment that we need a couple of years of normal economic activity to refill our coffers, auto sales have fallen off a cliff. Do you mind giving us a hand until things get back to normal?” This is not arrogance. It happens to be something very close to the truth. "
Obama's caution has discredited fiscal stimulus with voters, writes Paul Krugman: "What we do know is that the inadequacy of the stimulus has been a political catastrophe. Yes, things are better than they would have been without the American Recovery and Reinvestment Act: the unemployment rate would probably be close to 12 percent right now if the administration hadn’t passed its plan. But voters respond to facts, not counterfactuals, and the perception is that the administration’s policies have failed. The tragedy here is that if voters do turn on Democrats, they will in effect be voting to make things even worse."
We should privatize the mortgage market, writes Dwight Jaffee: http://bit.ly/dqIAKc
We need a fiscal policy to match the Fed's monetary easing, writes Alan Blinder: "The two main thoughts that are probably going through Mr. Bernanke's head today are, first, 'I sure wish I could get some help from fiscal policy,' and second, 'I probably can't, so I'd better do whatever I can.' He's right on both counts. In a more rational world, it wouldn't be this way. Fiscal policy, which packs the power, would be doing the heavy lifting--by combining tax cuts and spending today with credible deficit reduction for the future. Monetary policy would take the back seat by keeping interest rates low. But we don't live in a rational world. And as Donald Rumsfeld might have said, you go to war against recession with the army you have. Right now, that's the Federal Reserve. The fiscal army is AWOL."
Adorable animals acting like children interlude: Two cats play patty-cake.
Domestic Policy

How states set up health exchanges will have a major effect on coverage, reports Robert Pear: "Massachusetts and Utah provide a glimpse of the future, and they offer radically different models for other states. The battle over health care is shifting to the states, and the design of insurance exchanges will be one of the most pressing issues for state legislators when they convene early next year...The Utah Health Exchange organizes the market, allowing consumers to compare a wide variety of health plans sold by any insurers that want to participate. In the Massachusetts exchange, known as the Connector, the state serves as an active purchaser, soliciting bids from insurance companies and negotiating prices and benefits in an effort to secure the best value for state residents."
Health insurers have switched their campaign donations from Democrats to Republicans: http://wapo.st/9w4OGU
Some employers are adjusting health plans as health care reform takes effect, reports Ricardo Alonso-Zaldivar: "Two provisions in the new law are leading companies to look at their plans in a different light. One is a hefty tax on high-cost health insurance aimed at the most generous coverage. Although the 'Cadillac tax' doesn't hit until 2018, companies may have to disclose their exposure to investors well before that. Karen Forte, a Boeing spokeswoman, said concerns about the tax were partly behind a 50 percent increase in insurance deductibles the company just announced...Bigger questions loom over the new insurance markets that will be set up under the law."
Health care reform has failed to fix American health care's provider-pricing problem -- and thus its cost problem, writes Alec MacGillis: "Health-care providers in the United States have tremendous power to set prices. There is no government 'single payer' on the other side of the table, and consolidation by hospitals and doctors has left insurers and employers in weak negotiating positions. 'We spend fewer per capita days in the hospital compared with other advanced countries, we see the doctor less frequently, and we swallow fewer pills,' said Jon Kingsdale, who oversaw the implementation of Massachusetts's 2006 health-care law. 'We just pay a lot more for each of those units than other countries.' The 2010 law does little to address this. Its many cost-control provisions are geared toward reducing the amount of care we consume, not the price we pay."
A few states are considering moving to unicameral legislatures, reports Keith Johnson: "In Maine, members of the state's House of Representatives passed a bill last year that would shrink the legislature to one chamber from two. A Pennsylvania legislator introduced a bill this year to do the same. The speaker of the House in Kentucky also floated the idea. Over the past year, officials in half a dozen other states have discussed attacking the size of government by cutting the size of the legislature. The current election campaigns across the country have further fired the debate...At the height of the Depression, Nebraska decided to save money by getting rid of its second legislative chamber. It worked."
Secret campaign spending is incompatible with democracy, writes E.J. Dionne: http://wapo.st/bR0rC8
James Fallows worries that the Juan WIlliams imbroglio will harm NPR: "I have known and frequently worked a variety of people at National Public Radio, and I do want to say something about them. The worst aspect of the Williams-NPR imbroglio is that it has allowed Fox and its political allies to position NPR as something it is not, and in the process to jeopardize a part of American journalism we can't afford to lose...[NPR] has reporters at state houses and in war zones. At last count, it has something like 17 foreign bureaus and 16 domestic. In much of the country, especially away from the coasts, it's a major source of local information and news. It claims that its total audience is some 27 million people a week; with all allowances for counting differences, it reaches a lot more people than Fox does."
Niche marketing interlude: Sears' store for zombies.
Energy

The British government has quietly enacted a carbon tax: "The government today quietly imposed a £1B-per-year (US$1.58B) carbon tax on around 4,000 of the largest businesses and public sector bodies in the UK as part of its spending review. The move was not announced as part of chancellor George Osborne's (pictured at left) speech to parliament. Instead, it was left to a statement by the Department of Energy and Climate Change in which it detailed its spending review settlement and confirmed the Carbon Reduction Commitment (CRC) would be reformed so that the Treasury keeps revenue raised through the carbon pricing scheme." New EPA regulations will force efficiency improvements for trucks, reports Ken Thomas: "The plan is expected to seek about a 20 percent reduction in greenhouse gas emissions and fuel consumption from longhaul trucks, according to people familiar with the plan. They spoke on condition of anonymity because they did not want to speak publicly before the official announcement, expected Monday. Overall, the proposal is expected to seek reductions of 10 percent to 20 percent in fuel consumption and emissions based on the vehicle's size. Large tractor-trailers tend to be driven up to 150,000 miles a year, making them ripe for improved miles per gallon."
Research funding and a carbon price are both effective emissions-reduction tools, writes David Leonhardt: "The debate between these two camps -- pro-research and pro-carbon price -- can often sound hostile. But there is actually a lot of agreement. Finding more money for clean-energy research is a crucial part of dealing with climate change. So is raising the cost of emitting carbon. My guess is that the policy that seems more like a free lunch -- research funds -- will need to come first and the harder stuff will, unfortunately, have to wait."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.