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Jul 22, 2011

The Economist | Selected New Articles: the euro-zone crisis summit by Charlemagneb / Babbage Describes the search for the web's fittest person / Democracy in America wants a firm time at which default will occur .... and More

Charlemagne reports from the euro-zone crisis summit

Babbage describes the search for the web's fittest person

Democracy in America wants a firm time at which default will occur

Banyan says Kazakh police should ease up on striking oil workers

Prospero homage to Lucian Freud

Daily chart: The famine forecast

Videographic: Flooding on the Mississippi

Online debate: This house does believe that the internet is making journalism better, not worse

Reuters - Daily Investor Update: Earnings, hope for debt deal brighten Wall Street

Earnings, hope for debt deal brighten Wall Street
NEW YORK (Reuters) - Investors poured into tech shares on Friday as promising chipmaker earnings and optimism that a solution was on the horizon for the U.S. debt stalemate triggered a move into growth-oriented shares. | Full Article

Thomson Reuters shakes up Markets division
July 22, 2011 02:44 PM ET
NEW YORK (Reuters) - Thomson Reuters Corp said five more senior executives are leaving its Markets division in addition to its head Devin Wenig. | Full Article
ECB's Trichet confident Greek crisis a one-off
July 22, 2011 02:05 PM ET
BERLIN (Reuters) - Greece's sovereign debt crisis will prove unique in the euro zone and will not spread to other countries, European Central Bank President Jean-Claude Trichet said in a newspaper interview on Friday. | Full Article
GE tops Wall Street estimates on overseas demand
July 22, 2011 11:09 AM ET
BOSTON (Reuters) - General Electric Co notched a better-than-expected 21.6 percent rise in earnings, helped by strong demand for jet engines as well as equipment used in oil and natural gas production. | Full Article
Analysis: Automakers wary as economy stuck in slow gear
July 22, 2011 04:13 PM ET
DETROIT (Reuters) - Each month, a dozen executives of General Motors Co gather on the 39th floor of their Detroit headquarters to survey the auto industry, the U.S. economy and how they will meet demand from customers. | Full Article

Reuters - Technology Report: Analysis: Aging PC giants see writing on the wall

Customers at an apparent Apple Store in the Chinese city of Kunming berated staff and demanded refunds after the shop was revealed to be an elaborate fake, sparking a media and Internet frenzy. Staff were also angry at the unwanted attention after more than 1,000 media outlets picked up the story and pictures of the store from the BirdAbroad blog. Apple declined to comment on the fake store or others like it dotted around China.

Apple was in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying.

Verizon Wireless signed up 1.3 million fewer iPhone customers than AT&T and Verizon Wireless customers spent less per month than expected in the second quarter, disappointing Wall Street. While Verizon Wireless added three times more net subscribers in the quarter than AT&T, it only activated 2.3 million Apple iPhones compared with 3.6 million activations at AT&T.

Facebook won a dismissal of a second lawsuit by the Olympic rowing twins Cameron and Tyler Winklevoss, who have sought to increase their $65 million settlement with the social media company and its founder Mark Zuckerberg.

RIM said it has bought Swedish video editing company JayCut and hinted the operation will work on features for its PlayBook tablet computer. JayCut joins Stockholm-based design company The Astonishing Tribe, which was bought by the Canadian smartphone and tablet maker in December to improve user interface.

Analysis: Aging PC giants see writing on the wall
July 22, 2011 02:30 PM ET
SAN FRANCISCO (Reuters) - Silicon Valley's old guard is waking up to the fact that the era of consumer PC may be in its twilight, accelerating the need to invest and adapt to rapidly changing tastes. | Full Article
With space shuttle era over, U.S. robot set for Mars
July 22, 2011 04:25 PM ET
CAPE CANAVERAL, Florida (Reuters) - NASA moved to a new chapter in space exploration on Friday, a day after the end of its shuttle program, by announcing details of plans to determine if Mars has or ever had the ingredients for life. | Full Article
Insight: Fake Apple store cuts to core of China risk to brands
July 22, 2011 08:51 AM ET
SHANGHAI (Reuters) - A fake Apple store in China, made famous by a blog that said even the staff working there didn't realize it was a bogus outlet, is probably the most audacious example to date of the risks Western companies face in the booming Chinese market. | Full Article
Amazon's next billion-dollar business eyed
July 22, 2011 11:02 AM ET
SAN FRANCISCO (Reuters) - Inc's cloud computing unit may be its next billion-dollar business and analysts will be watching for clues on how fast this secretive unit is growing when the Internet retailer reports results next week. | Full Article
Spanish piracy law draws U.S. investments: minister
July 22, 2011 10:22 AM ET
MADRID (Reuters) - Major U.S. and Spanish companies are preparing to invest in online music and movie services in Spain once a controversial new law to fight piracy takes effect next month, the country's culture minister said. | Full Article

NYT: Afternoon Business News: Economist Q.&A. on Europe's Debt Accord

Economix Blog

Economist Q.&A. on Europe's Debt Accord

Simon Johnson, Carmen M. Reinhart and Laura D'Andrea Tyson answer questions on the move to help Greece and save the euro.

G.E. Profit Exceeds Forecast

The second-quarter results from General Electric are seen as evidence of an improving outlook overall for major industrial companies.

IPhone Bolsters Verizon Results

Net income and revenue surpassed analysts' expectations in the second quarter, helped by new iPhone 4 subscriptions.

Court Rules Against S.E.C. on Proxy Materials

The ruling was the third time in six years that a court threw out a new S.E.C. rule because the agency failed to adequately assess its economic effects.

Dow Retreats on U.S. Debt Uncertainty

Shares were mixed after Thursday's big lift from the European debt deal.

Money Show Investors Daily Alert: 6 Big Dividends to Boost Your Portfolio

Investors Daily Alert
Read the top stories and watch the latest videos on for today, July 22...
Richard Young has invested in many, many gold plays over 40-plus years, but he only likes one enough to recommend it. And don't forget's Tom Aspray, who explains why you might want to wait a few days before jumping into the metals. Also, Oliver Pursche shares his favorite income stocks in today's The Daily Guru, and Josh Peters picks through more of 2011's merger explosion to find two hot plays. All this and much more are available now...

NEW! THE DAILY GURUCandid Daily Interviews with Top Market Experts
6 Big Dividends to Boost Your Portfolio, Oliver Pursche

Jim Jubak on
Boring Stocks Need Love, Too
Risks Rise as Debt Crises Drag On
Large-Cap Rally Isn't Healthy

Today's Top Pros' Top Picks
M&A Activity Points to 2 Top Stocks, Josh Peters
The One Gold Investment to Make Now, Richard Young

Today's Gurus' Views & Strategies
Exiting a Winning Trade in Energy, Igor Greenwald
2 Key Concepts for All Investors, Patrick McKeough

Today's Charts in Play
GLD and SLV: When and Where to Buy, Tom Aspray Exclusive Interviews
Give Me Another ‘Lost Decade’, John Buckingham

Global Investing Ideas
The Cornerstone of Chinese Growth, Yiannis Mostrous

Today's Featured Videos
Get Your Portfolio Ready for 2012 and Beyond, Richard Band
Buy and Hold vs. Market Timing, Mark Hulbert

Marketwatch | Personal Finance Daily: Killing off tax breaks isn't easy


Personal Finance Daily
JULY 22, 2011

Killing off tax breaks isn't easy

By MarketWatch

Don't miss these top stories:

Lawmakers are eager to cut costs, and that may well mean your favorite tax break gets the knife. Read our story today to find out which tax breaks might die in Congress at the hands of the budget-cutters, and read Weekend Investor for five investments that can protect you in a weak market.

Plus, this Sunday, same-sex couples can get married in New York, which is now the sixth state to allow gay marriage (six states, plus the District of Columbia). Read our story on how that's likely to put some money in the pockets of party planners — and financial planners — in New York. And read Jennifer Openshaw's column on ways to trim your wedding costs.

Do you think Congress will cut the mortgage-interest tax deduction? One proposal is to limit it to first homes worth $500,000 or less, which is maybe not such a bad idea. But it's not going to go over well in California or New York or any high-priced market. Plus, making that change would make houses on the market now more expensive. That's a hit the housing market does not need.

Andrea Coombes , Personal Finance editor


Will Congress kill your favorite tax deductions?

Some people call them "tax loopholes," while others prefer "tax breaks." In Congress, they are often called "tax expenditures." Whichever term of art you prefer, hundreds of tax deductions, credits and exclusions that taxpayers rely on every year are at risk of being cut.
Read more: Will Congress kill your favorite tax deductions?


Fake Apple store in China fools everyone

It's not just shoppers who were unaware the retail location wasn't the genuine article. Even employees thought they were working for Apple itself.
Watch slide show: Fake Apple store in China fools everyone.


Gay marriage could be economic boon for New York

With New York becoming the sixth state to allow gay marriage, businesses ranging from wedding planners to financial advisers likely will benefit economically from the increase in same-sex marriages.
Read more: Gay marriage could be economic boon for New York.

5 ways to save thousands on wedding costs

The average wedding runs almost $28,000, but you can shave thousands of dollars off that amount by heeding these five tips, writes Jennifer Openshaw.
Read more: 5 ways to save thousands on wedding costs.


Mortgage on rental property comes with big penalty

You've heard about mortgage prepayment penalties, but commercial-property buyers need to watch for "yield maintenance" fees that can add up to thousands of dollars in costs if you pay your mortgage earlier than expected.
Read more: Mortgage on rental property comes with a big penalty.


Senate rejects House debt-ceiling bill

Senators voted down a House-passed bill on Friday that would raise the debt ceiling and require a balanced budget amendment, as Senate Majority Leader Harry Reid said talks between the White House and congressional Republicans were continuing.
Read more: Senate rejects House debt-ceiling bill.

Appeals court rejects SEC shareholder power rule

A U.S. appeals court vacated, or rejected, a Securities and Exchange Commission rule that would have given shareholders significantly more power over corporate boards.
Read more: Appeals court rejects SEC shareholder power rule.

Bad cops in a bad economy

Sign of the times? The L.A. Sheriff's Office notices that cops who go bad are turning to financial crimes from the usual petty stuff, Al Lewis reports.
Read more: Bad cops in a bad economy.


Insurance stocks may get hit by Europe crisis

Debt crises in Europe and the United States could hit insurance companies' balance sheets. If your holding insurer stocks in your portfolio, here's what you need to know.
Read more: Insurance stocks may get hit by Europe crisis.

5 investments to gird against a weak market

Stocks tend to follow each other now more than ever, exposing investors to big, sweeping hits. Here are some ETF, metals, bond and stock ideas that can truly diversify your portfolio.
Read more: 5 investments to gird against a weak market.

World's smallest stock exchanges can only go up

The world's smallest exchanges don't have many companies to trade just yet, but they may be the only markets where it's safe to say that things can only go up.
Read more: World's smallest stosck exchange can only go up.

5 questions dogging News Corp. investors

The media giant may have put the worst behind it with this week's testimony by the Murdochs, but investors still have questions, writes Jon Friedman.
Read more: 5 questions dogging News Corp. investors.

Reuters Deals Today


For a self-described nerdy accountant who shuns attention, Express Scripts chief George Paz just thrust himself into the limelight, reports Lewis Krauskopf. The company's planned buy of Medco Health Solutions met with swift opposition from consumer advocates and drug stores, signaling the beginning of what could be an ugly fight for antitrust approval.

Len Blavatnik's Access Industries, Sony Music Entertainment and Vivendi SA's Universal Music Group are among the music companies and private equity firms interested in buying EMI Group, people familiar with the situation said.

Apple is in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying.

"A wave of multibillion-dollar deals by major oil companies has swept the North American shale oil-and-gas sector during the last few years. The rising tide is expected to continue to surge," reports the WSJ.

Bank of Communications' efforts to buy Shanghai Securities Co would, if successful, underline Beijing's desire to build full-service financial giants and could trigger a wave of similar acquisitions by rival lenders.

Dealtalk: Spain's Bankia float defies odds in market storm
LONDON/MADRID (Reuters) - Bankia knew it had to address the Greek issue head on as it tried to convince investors to buy billions of euros worth of shares in the midst of Europe's sovereign debt storm. | Full Article

Apple joins Hulu bid talks: report
July 22, 2011 08:18 AM ET
LOS ANGELES (Reuters) - Apple Inc is in early talks to join the bidding for Hulu, the online video site that Walt Disney Co, News Corp and its other owners have put up for sale, Bloomberg cited two unidentified sources as saying. | Full Article
Express Scripts takes $14 billion bridge loan
July 22, 2011 11:10 AM ET
NEW YORK (Reuters) - Express Scripts is syndicating a $14 billion bridge loan that will help finance its $29.1 billion acquisition of rival Medco Health Solutions , banking sources said on Friday. | Full Article
News Corp sells Russian, Romanian outdoor ads business
July 22, 2011 08:35 AM ET
MOSCOW, July 22 (Reuters) - Embattled global media group News Corp said on Friday it has sold its 79 percent stake in News Outdoor Russia and News Outdoor Romania to a group of investors led by Russian investment bank VTB Capital. | Full Article
Takefuji rehabilitation plan approved by court
July 22, 2011 04:59 AM ET
TOKYO (Reuters) - A court approved a rehabilitation plan on Friday for failed Japanese consumer lender Takefuji, according to documents posted on Takefuji's web site. | Full Article

Kitco London Fix Market Report

London Fix Fri Jul 22 00:00:00 EDT 2011
Metals Gold Silver Platinum Palladium
USD 1588.00 1602.00 39.67 1785.00
805.00 807.00
UK 974.83 984.33 24.32 1095.10
493.85 495.70
EURO 1103.01 1118.09 27.54 1239.15
558.85 562.00

Money Show Traders Daily Alert: GLD and SLV: When and Where to Buy

Traders Daily Alert
Tips for Traders
8 Rules for Making Money Trading, Ryan Mallory

Options Idea
A Covered Call for You Athletic Types, Dan Passarelli

Charts in Play
GLD and SLV: When and Where to Buy, Tom Aspray

Currency Corner
7 Reasons Why Currencies Make Sense, Robert Christy

Trading Idea of the Day
Try This Corn/Wheat Spread Trade, Andy Waldock

Daily Market Studies
Trading Outlook for Today: July 22, Daniel Gramza Exclusive Interviews
Know Your Option “Greeks”, Dan Passarelli

Today's Featured Videos
Attacking the Trends by Anticipating the Trends, Greg Michalowski
3 Pro Habits Rookie Traders Can Copy, Travis McKenzie

Mexico Shares Slip 11:25 a.m.EDT: MarketWatch | International Stock Market Nrews

By Myra P. Saefong, MarketWatch 

SAN FRANCISCO (MarketWatch) — Mexican shares fell Friday, poised to log their sixth losing session in seven, with declines led by Cemex after the building materials provider reported disappointing second-quarter financial results. 

Following the results, Cemex shares hit a 52-week low of 8.47 pesos and was last at 8.50 pesos, down 6.9%. 

Inching toward a debt deal President Obama and House Speaker John Boehner are ironing out details of a debt-reduction plan that would cut $3 trillion and raise $1 trillion in revenue. 

On Friday, Cemex, the largest cement provider in the U.S., posted a net loss of $294 million for the second quarter versus a loss of $306 million for the same quarter a year ago.
Operating cash flow measured by earnings before interest, taxes, depreciation and amortization, or Ebitda, was at $615 million, down 7% compared with the same quarter a year ago.
Cemex was expected to report $690 million in Ebitda, according to a median estimate of seven analysts polled by Dow Jones Newswires.
Quarterly performance in Northern Europe, the South, Central American and Caribbean region and Mexico helped “mitigate the challenging conditions of the construction sector in the United States,” Fernando González, executive vice president of finance and administration, said in a press release.
Net sales rose 9% to $4.1 billion. Operations in the U.S. reported net sales of $619 million for the quarter, down 9% from the same time a year ago.
Tracking Mexico’s broader stock market action Friday, Mexico’s IPC MX:IPC -0.12% fell by 0.2% to 35,481.31 with home builders also among the decliners. 

Shares of Urbi Desarrollos Urbanos MX:URBI -0.70%  fell 1.5% and Consorcio ARA MX:ARA -0.71%  traded 1.4% lower.
In other Latin American markets, Argentina’s Merval AR:MERV -0.33%  fell 0.3% to 3,358.21 while Chile’s IPSA CL:IPSA +0.84%  traded at 4,651.56, up 0.7%.
Brazil’s Bovespa BR:BVSP +0.38%  tacked on 0.2% to 60,379.07. The index climbed Thursday after the nation’s central bank delivered an expected interest-rate hike while signaling that it’s close to pausing its rate-tightening campaign. Read about Thursday’s action in Latin American markets.
Brazil’s currency USDBRL -.00%  traded at 1.5518 reals per U.S. dollar, down from 1.554 reals on Thursday.
In Sao Paulo, shares of heavyweight Petrobras BR:PETR4 +0.30%   PBR +0.72%  tacked on 0.3% and miner Vale BR:VALE5 +0.33%   VALE +0.09%  added 0.2%.
Myra Saefong is a MarketWatch reporter based in San Francisco.

New anger about a mostly old deal: The Washington Post | Ezra Klein's Wonkbook

What set off yesterday's debt-deal panic among congressional Democrats wasn't so much information about a new deal as a better understanding of the old deal. What Boehner and Obama appear to be discussing is the $4 trillion deal they were discussing a few weeks ago. In that deal, $1.5 trillion in immediate cuts would be followed by processes for making a further $1.5 trillion in deeper cuts -- many of them to entitlement programs -- and reforming the tax code to raise a trillion more dollars than it does now. The plan would also include some sort of enforcement mechanism that would make sure the future spending cuts and tax increases manifested. Congressional Democrats spent much of yesterday complaining that this plan doesn't really have revenues while the White House spent much of yesterday swearing that it did. On this, congressional Democrats are mostly right. The revenue in this plan is approximately equal to the revenue from letting the Bush tax cuts on the rich expire -- which is something Democrats could do with zero Republican votes in 2012, when the Bush tax cuts are set to expire automatically. In other words, Democrats are demanding, as part of this deal, that Republicans agree to let them do...something they could do even if Republicans refused to agree to it.
The best way to understand the revenue in this plan, in fact, is that it's a concession to Republicans, not Democrats. It effectively takes the 2012 expiration of the Bush tax cuts and all of the leverage that gives Democrats off the table, but doesn't ask for more revenue in return. Rather, there's about 25 percent as much revenue in this plan as there is in simply doing nothing and letting the Bush tax cuts expire, and half as much revenue in this plan as in the Simpson-Bowles/Gang of Six plans recommended, and this plan also gives up Democrats ability to go for more revenue in 2012 when the Bush tax cuts expire. See this graph/post for a clearer comparison.
But that's not new to this deal. That was true in the original $4 trillion offer Obama made to Boehner. If you want to read more on the thinking that led to the White House offering Boehner such a sweet deal in the first place, head here. What does appear to be new over the last 24 hours are some very odd reports about a trigger that would, among other things, unwind the individual mandate if the two parties didn't make their scheduled cuts/tax increases over the next few years. That sounds more like Boehner's spitballing than an actual part of the deal to me, but I've been wrong before.
Five in the morning

1) Obama and Boehner are near a deal on the debt ceiling, report Lori Montgomery and Paul Kane: "President Obama and House Speaker John A. Boehner rushed Thursday to strike agreement on a far-reaching plan to reduce the national debt but faced a revolt from Democrats furious that the accord appeared to include no immediate provision to raise taxes...Talks focused on sharp cuts in agency spending and politically painful changes to cherished health and retirement programs aimed at saving roughly $3 trillion over the next decade. More savings would be generated through an overhaul of the tax code that would lower personal and corporate income tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest...The tax rewrite would be postponed until next year."
2) Congressional Democrats look ready to bolt, reports Paul Kane: "Just as Senate Democrats were sitting down Thursday to a scheduled meeting with White House budget director Jacob J. Lew, rumors of a new debt-limit deal between President Obama and House Speaker John A. Boehner (R-Ohio) flashed across their BlackBerrys. One after another, Sens. John F. Kerry (Mass.), Barbara A. Mikulski (Md.), Maria Cantwell (Wash.) and others demanded that Lew explain what the president was doing. The Democrats were winning, the senators said. The American people were with them on tax increases for the rich and the notion of 'shared sacrifice.' Why give up now? Why cut a deal without guarantees of new tax revenue?...With more concerns than details, Democrats lashed out, saying that deep cuts to federal agency budgets and entitlements were too steep a price to pay."
3) Ratings agencies warned House Republicans to not allow a default, reports Marin Cogan: House Republicans were cautioned Thursday in a closed door meeting with credit rating agency officials that a 'death spiral' in the bond market was one of the possible outcomes in the event of default. One official warned of a worst-case scenario in which a default on the nation’s credit could result in a rapid drop in bond values, sparking chaos in the markets -- a dramatic warning as Washington worked on a possible deal on deficit reduction and an increase in the debt limit. Members who attended the meeting later countered that the tone of the discussion was not nearly as apocalyptic as the phrase initially made it sound. According to sources inside the room, the 'death spiral' term was also used in reference to the collapse of Lehmann Brothers in September 2008 as a historical example."
4) States are reassessing their finances in case the debt ceiling isn't raised, reports Michael Cooper: "The federal debt ceiling debate is already complicating life for state and local governments. Maryland is postponing a bond sale that had been scheduled for Friday, after the state was warned that its credit rating would probably be lowered in the event of a federal downgrade. California, which typically issues short-term bonds at this time of year, is working to arrange bank loans instead, citing the market uncertainty. And state officials across the nation are trying to figure out what will happen to the federal payments they rely on for everything from Medicaid to unemployment to highway construction if a deal is not reached to raise the debt ceiling by the Aug. 2 deadline."
5) Europe has agreed on a rescue package for Greece, reports Howard Schneider: "European leaders moved Friday to stanch the region’s lingering financial crisis, agreeing to $145 billion in new loans to Greece and measures to prop up weak banks and other national governments. A separate initiative allows private bondholders to help but raises the prospect that Greece will be considered in default on some of its debt. The measures approved in Brussels mark a major financial consolidation of the 17 nations that use the euro -- effectively pledging the creditworthiness of stronger countries such as Germany and France, and the resources of their taxpayers, to prop up failing banks or ailing governments throughout the euro zone...The program guarantees Greek banks access to cash and offers the [European Central Bank] billions in guarantees and extra capital so that it will continue its lending."
'90s rock interlude: Pavement plays "Trigger Cut" live in Frankfurt in 1994.
Got tips, additions, or comments? E-mail me.
Still to come: The House voted to replace the head of the Consumer Financial Protection Bureau with a commission; a majority of the House is pushing back at Medicare payment cuts; a House panel voted to block a labor regulator's complaint against Boeing; Obama has threatened to veto the House Interior and EPA funding bill; and a dog who loves rock climbing.

Congress is already hurting the recovery, writes Annie Lowrey: "Congress doesn't have to do much (literally and figuratively) to make economic conditions worse. If, upon hearing the news from Washington, consumers feel more pessimistic and decide to save rather than spend, that hurts the recovery. If bond investors decide to hang on to cash rather than buying corporate debt until this all blows over, that hurts the recovery. If contractors hold off on hiring workers until they are certain they are going to get their check from Washington, it hurts the recovery. And there is evidence that all of those things are starting to happen."
The House voted to eliminate the position of Consumer Financial Protection Bureau director the day the bureau opened, reports Ylan Mui: "The new Consumer Financial Protection Bureau officially opened for business Thursday during rancorous political debate over the structure of the agency and who should lead it. The House approved a bill Thursday that would strengthen the veto power of the Financial Stability Oversight Council over the bureau’s decisions. It would also install a five-member commission rather than a single director to head the agency and delay transfer of powers to the new agency. The bill passed 241 to 173, largely supported by Republicans who have voiced concerns about the scope of the watchdog bureau...The proposal stands little chance of survival in the Democrat-controlled Senate."
The administration is considering renting out foreclosed upon properties, reports Nick Timiraos: "The Obama administration is examining ways to pull foreclosed properties off the market and rent them to help stabilize the housing market, according to people familiar with the matter. While the plans may not advance beyond the concept phase, they are under serious consideration by senior administration officials because rents are rising even as home prices in many hard-hit markets continue to fall due to high foreclosure levels. Trimming the glut of unsold foreclosed homes on the market is 'worth looking at,' said Federal Reserve Chairman Ben Bernanke in testimony to Congress last week...Renting out homes could cover the costs of holding the properties until they can be resold once markets stabilize."
There's plenty of spending to cut, but it's done through the tax code, writes Ezra Klein: "We’ve got one government program that hands people money to buy houses that, in most cases, they would buy anyway. They get even more money if they buy a more expensive house. Over the next five years, that program alone will cost almost $500 billion...The government pays employers $700 billion to offer health insurance to their employees, which no economist would say is a good idea...Midway through my excavation, however, when I was really just getting warmed up, I realized I had made a mistake. I wasn’t looking at the federal budget -- I was looking at the U.S. tax code. So cutting all those costly programs wouldn’t count as cutting spending to Republicans in Washington. It would count as raising taxes."
Cuts being negotiated in Europe and DC are sure to hurt the economy, writes Paul Krugman: "Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse...For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed. Did I mention that the European Central Bank -- although not, thankfully, the Federal Reserve -- seems determined to make things even worse by raising interest rates?"
A half trillion dollar debt limit deal is our best bet, writes Charles Krauthammer: "The Half-Trillion raises the debt ceiling by that amount in return for an equal amount of spending cuts. At the current obscene rate of deficit spending -- about $100 billion a month -- it yields about five months’ respite before the debt ceiling is reached again. In my view, the Half-Trillion is best: It is clean, straightforward, yields real cuts, averts the current crisis and provides until year-end to negotiate a bigger deal...Obama had threatened to veto any short-term debt-ceiling hike. Which has become Obama’s most vulnerable point. Is the catastrophe of default preferable to a deal that gives us, say, five months to negotiate something more significant -- because it doesn’t get Obama through Election Day?"
Adorable animals in treatment interlude: A tortoise gets a wheel to replace his leg.
Health Care

A majority of the House is pushing for Medicare to reverse a hospital payment cut, reports Sam Baker: "A bipartisan majority of House lawmakers is pressing Medicare to reverse a proposed cut to hospital payments. The Medicare agency recently proposed a 3.5 percent cut in payments to hospitals as well as a 2.9 percent adjustment to offset payments that it said are the result of changes in how come claims are filed...'If the proposed rule is enacted, the net impact for hospitals would be an average decrease in inpatient payments,' the lawmakers said in a letter to Medicare Administrator Don Berwick. 'This is a decrease that hospitals can ill afford.' The letter says hospitals could lose more than $6 billion from the proposal. It was signed by 95 Republicans and 124 Democrats. A similar letter in the Senate garnered 45 signatures."
A Senate bill that would speed generic drug approval is moving forward, reports Julian Pecquet: "The Senate Judiciary Committee on Thursday cleared a bill that would severely curtail pharmaceutical industry deals to delay the entry of low-cost generic drugs on the market. The bipartisan bill seeks to put an end to the practice of brand-name drugmakers settling patent challenges from generic manufacturers by paying them to delay their products. The Federal Trade Commission has said that ending the so-called 'pay for delay' deals would save American consumers at least $3.5 billion a year in cheaper medications, but the industry disputes that. The Generic Pharmaceutical Association said in a statement Thursday that patent settlements have never prevented competition beyond a patent's expiration."
Domestic Policy

The House is fighting the National Labor Relations Board's complaint against Boeing, reports Melanie Trottman: "Republicans on the House workforce committee passed a bill Thursday that would bar the government from dictating where companies can do business - taking direct aim at the National Labor Relations Board’s complaint that Boeing Co. illegally shifted work from union plants in Washington state to a new nonunion facility in South Carolina. The Protecting Jobs from Government Interference Act is aimed at stopping the NLRB from moving ahead with its complaint, which, if successful, would make Boeing move the production line for the 787 Dreamliner jet to Washington state. The company has said its decision to place the 787 assembly line in South Carolina wasn’t intended to punish union workers in Washington state for past strikes, as the NLRB alleged."
A balanced budget amendment would send the budget process to the courts, writes Walter Dellinger: "Court is where the whole budget process would likely wind up. Unlike older versions of the amendment, which left enforcement a mystery, the current proposals clearly contemplate judicial involvement and even provide that members of Congress can bring lawsuits to enforce the limits. What a nightmare. Allowing federal judges to make fundamental decisions about spending whenever outlays threatened to exceed receipts would be an extraordinary expansion of judicial authority. Absolutely nothing in the training or experience of judges remotely equips them to decide whether weapons systems or Social Security should be cut, and by how much."
We need to make more wireless spectrum available, writes Douglas Holtz-Eakin: "The benefits of additional wireless capacity are widespread. The FCC estimates that releasing an additional 275 MHz of spectrum by 2014 will save carriers in excess of $120 billion in capital costs. According to former Director of the National Economic Council Lawrence Summers 'total surplus from expanding wireless [is] estimated to be $40 to $50 billion every year.' The High Tech Spectrum Association estimates that additional investments in 4G wireless technologies will create 205,000 jobs in the next five years...When local television and radio stations are sitting on spectrum that would be worth hundreds of times more if it were repurposed for wireless broadband, everyone loses. Making additional wireless spectrum available is the ultimate public policy magic trick: economic growth out of thin air."
Adorable animals without harnesses interlude: A Jack Russell terrier who loves to rock climb.

Obama has threatened to veto the House Interior/EPA funding bill, reports Dan Berman: "President Barack Obama on Thursday afternoon threatened to veto the House Interior-EPA appropriations bill. In a five-page Statement of Administration Policy, the White House blasted various policy riders as well as the overall funding level for the EPA, which it says would leave the agency 'unable to implement its core mission of protecting human health and the environment.' The laundry list of policy riders the White House opposes includes language preventing the EPA from regulating greenhouse gas emissions from stationary sources, blocking Interior from stopping uranium mining claims near the Grand Canyon and stopping new regulations on mountaintop removal mining."
Automakers are amping up their lobbying against new gas mileage rules, report Darren Samuelsohn and Dave Levinthal: "The two major U.S. automakers rescued by the Obama administration have spent millions of dollars on lobbying and campaign donations this year as the White House weighs tough new fuel economy limits...GM over the last six months has spent $5.52 million. Chrysler, now controlled by Fiat SpA, has spent $2.37 million. During the same period in 2010, GM spent about $4 million, while Chrysler’s lobbying bill totaled about $1 million. Foreign-based auto companies with a stake in the fuel economy standards have also been active in Washington, with Toyota spending $2.33 million on lobbying this year and Honda reporting $1.1 million."
The US is instituting new electrical grid rules, reports Matthew Wald: "Federal regulators laid down principles on Thursday for planning and paying for new power lines, part of a long-term policy effort to help the nation’s electricity grid grow enough to meet the demands of renewable energy and a competitive electricity market. The rule, which has been in the works for several years, is intended to push the organizations that manage the grid into cooperating with one another, so that developers can build power lines across several states and multiple electrical jurisdictions. Such cross-jurisdictional transmission lines are becoming more important as states seek to reach their goals of integrating large amounts of wind and solar power, generally available in remote deserts and mountaintops, into the energy mix...Generators of power, including renewable energy advocates, generally praised the rule."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

CBS NEWS | Daily News Summary: Businesses use more automation, fewer workers.

CBS - Daily News Summary
July 22, 2011 | DAILY NEWS SUMMARY
Sweltering combination of heat, humidity from Kan. to Mass. results in melting forecasts along East Coast
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Heat wave smothers US with triple-digit temps
Report: U.S. readying News Corp. subpoenas WSJ says Justice Dept. will seek evidence of alleged 9/11 victim hacking; FBI reportedly studying Jude Law claim

NFL owners okay deal, but lockout lingers Players decide not to vote right away on decade-long agreement approved by owners, complain it's "being shoved down our throats"

Senate to dispense with long-shot GOP debt plan As Aug. 2 debt deadline looms, lawmakers must deal with doomed House plan then quickly refocus on bipartisan talks

Kate Middleton dress exhibit already big hit More than 127,000 tickets sold at about $29 each; Also on display are Kate's shoes, earrings and couple's cake

Businesses use more automation, fewer workers Company spending on employees has only grown by four percent, compared to the 25 percent increase spent on new technology

Report: U.S. readying News Corp. subpoenas WSJ says Justice Dept. will seek evidence of alleged 9/11 victim hacking; FBI reportedly studying Jude Law claim

Senate to dispense with long-shot GOP debt plan As Aug. 2 debt deadline looms, lawmakers must deal with doomed House plan then quickly refocus on bipartisan talks

Dem source: Obama working on $3T debt deal A congressional aide confirms that President Obama could agree to a debt deal that only includes a promise of tax reform