Just Plain Wrong

Monday Business Edition

As Krugman points out

When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything – yet they now dominate the political scene more thoroughly than ever.

(T)he fact is that the Obama stimulus – which itself was almost 40 percent tax cuts – was far too cautious to turn the economy around. And that’s not 20-20 hindsight: many economists, myself included, warned from the beginning that the plan was grossly inadequate. Put it this way: A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics.

(E)verything the right said about why Obamanomics would fail was wrong. For two years we’ve been warned that government borrowing would send interest rates sky-high; in fact, rates have fluctuated with optimism or pessimism about recovery, but stayed consistently low by historical standards. For two years we’ve been warned that inflation, even hyperinflation, was just around the corner; instead, disinflation has continued, with core inflation – which excludes volatile food and energy prices – now at a half-century low.

And while it is true that Republicans are trying to write certain false narratives

(T)he modern Republican Party is utterly dedicated to the Reaganite slogan that government is always the problem, never the solution. And, therefore, we should have realized that party loyalists, confronted with facts that don’t fit the slogan, would adjust the facts.

It’s not as if the story of the crisis is particularly obscure. First, there was a widely spread housing bubble, not just in the United States, but in Ireland, Spain, and other countries as well. This bubble was inflated by irresponsible lending, made possible both by bank deregulation and the failure to extend regulation to “shadow banks,” which weren’t covered by traditional regulation but nonetheless engaged in banking activities and created bank-type risks.

Then the bubble burst, with hugely disruptive consequences. It turned out that Wall Street had created a web of interconnection nobody understood, so that the failure of Lehman Brothers, a medium-size investment bank, could threaten to take down the whole world financial system.

It’s a straightforward story, but a story that the Republican members of the commission don’t want told. Literally.

Last week, reports Shahien Nasiripour of The Huffington Post, all four Republicans on the commission voted to exclude the following terms from the report: “deregulation,” “shadow banking,” “interconnection,” and, yes, “Wall Street.”

That report is all of nine pages long, with few facts and hardly any numbers. Beyond that, it tells a story that has been widely and repeatedly debunked – without responding at all to the debunkers.

In the world according to the G.O.P. commissioners, it’s all the fault of government do-gooders, who used various levers – especially Fannie Mae and Freddie Mac, the government-sponsored loan-guarantee agencies – to promote loans to low-income borrowers. Wall Street – I mean, the private sector – erred only to the extent that it got suckered into going along with this government-created bubble.

Shahien Nasiripour

During a private commission meeting last week, all four Republicans voted in favor of banning the phrases “Wall Street” and “shadow banking” and the words “interconnection” and “deregulation” from the panel’s final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.

The shadow banking system refers to the part of the financial system in which investors and other nonbanks like hedge funds and investment firms provide credit to borrowers, as opposed to more traditional banks. Interconnection refers to the links that bind financial institutions to one another, like derivatives, borrowings, and investments.

They’re not the only ones.

Neo-Liberal economics, especially of the Trickle Down Voodoo Variety (call a spade a spade Paul) is a complete, abject failure.

Coming from Republicans or Democrats.

It’s hard for me to fathom how these people can claim Economics is even a “Social” Science when their theories so blatantly violate the first law of Scientific Inquiry- Your Results Shall Be Testable AND Duplicatable.

The Stimulus That Isn’t

By Robert Kuttner, The Huffington Post

Posted: December 19, 2010 07:41 PM

It is astonishing how the Beltway echo-chamber, most egregiously the editorial page and news columns of the Washington Post (hard to tell the difference), thinks this deal is good for the Republic. The Post has become a cheerleader for policies that fail to cure the economy and show off Obama as a weakling waiting to be rolled again.

The tax deal, re-branded as a stimulus program, is paltry and ineffective as economic tonic. What hardly anyone seems to have grasped is that the deal basically continues the status quo with almost no stimulus.

If the tax rates on the books in 2010 did not produce a recovery, why should we expect that the very same rates will change the economy in 2011?

Business News below.

From Yahoo News Business

1 Indian PM has ‘nothing to hide’ in telecom scandal

by Penny MacRae, AFP

59 mins ago

NEW DELHI (AFP) – India’s premier Manmohan Singh said on Monday he had “nothing to hide” as he offered to be quizzed by a parliamentary panel over a multi-billion-dollar telecom scandal that has shaken his government.

Singh, who enjoys a reputation for honesty in India’s murky political world, has been battling to protect his image against accusations of failing to act over the government’s cut-price sale of mobile telephone licences in 2008.

“I have nothing to hide from the public at all,” Singh, 78, declared at a Congress party annual strategy meeting, adding he would write to the chairman of parliament’s public accounts committee asking to appear before it.

2 Spain makes progress, but huge reforms vital: OECD


6 mins ago

PARIS (AFP) – Spain has every chance of rising above its economic crisis if it enacts bold reforms, the OECD said on Monday, just as the government a pension overhaul, the latest in steps over two weeks to regain market confidence.

Spain, in the eye of financial markets which are shunning its debt bonds, has done much right in fighting the crisis, but must reform its labour legislation and employment practices, the Organisation for Economic Cooperation and Development said.

The economy, which stalled in the third quarter after edging out of deep recession, is now set for subdued growth but the bursting of its property bubble will leave “lasting” scars and the unemployment rate, now about 20 percent, will remain among the highest in the European Union.

3 Young Spaniards adrift with 40 pct jobless rate

by Elodie Lestrade, AFP

Sun Dec 19, 2:47 am ET

MADRID (AFP) – Young Spaniards are adrift in an unemployment market that leaves a staggering 40 percent of under 25-year-olds searching in vain for a job.

Even well qualified young graduates find they are shut out of the work place year after year.

Spain’s overall unemployment rate, just under 20 percent, is already the highest in the European Union. But for those under 25 the rate is more than 40 percent, catching 860,000 young people.

4 Asians in festive shopping spree as West sulks

by Roberto Coloma, AFP

Sun Dec 19, 10:28 pm ET

SINGAPORE (AFP) – Strong currencies and a travel boom are fuelling a festive shopping spree in Asia’s retail capitals even though consumers remain wary of a new downturn, economists and retailers say.

With US and European consumers stuck in uncertainty, global brands are pinning their hopes on Asia, where the buying binge usually stretches from Christmas to the Lunar New Year which will take place in early February.

Singapore’s fashionable Orchard Road is teeming with foreign shoppers, many of them from Southeast Asian countries whose currencies have appreciated sharply against the US dollar this year.

5 China, Pakistan conclude $35 bln deals

by Khurram Shahzad, AFP

Sat Dec 18, 9:53 am ET

ISLAMABAD (AFP) – China and Pakistan concluded nearly 15 billion dollars’ worth of deals on Saturday, as Chinese Premier Wen Jiabao said Beijing would “never give up” on the troubled nuclear-armed Muslim country.

Business leaders formalised paperwork — adding to the 20 billion dollars’ worth of deals signed Friday — under blanket security at Islamabad’s five-star Marriott Hotel, where a huge suicide truck bomb killed 60 people in 2008.

Boosting trade and investment with poverty-stricken Pakistan have been the main focus of the first visit in five years by a Chinese premier to the country that is on the front line of the US-led war on Al-Qaeda.

6 Irish family man feeling the pinch this Christmas

by Robin Millard, AFP

Sun Dec 19, 12:30 am ET

DUBLIN (AFP) – Deep cuts imposed to prevent Ireland’s endebted economy from sinking are hitting the most vulnerable hardest — and Dublin hospital porter Brian Condra is feeling the pain.

“Christmas will be a lot of trouble,” he said, while thoughts of the New Year are just as bleak.

With three young children and a mortgage to pay, the 39-year-old is fighting to keep his family afloat as Ireland struggles to heal its wounded economy with the bitter medicine of savage cuts and a massive international bailout.

7 Genzyme to push argument for Campath value

By Toni Clarke, Reuters

Mon Dec 20, 1:21 am ET

BOSTON (Reuters) – Genzyme Corp (GENZ.O), which is fighting off a hostile $18.5 billion bid from Sanofi-Aventis SA (SASY.PA), will on Monday take another stab at persuading investors that its experimental multiple sclerosis drug is worth more than Sanofi’s projections.

Genzyme, a U.S.-based biotech company that makes drugs for rare diseases, maintains that Campath, a drug it is testing for multiple sclerosis, could generate peak annual sales of $3.5 billion. It aims to strengthen that argument at an investor meeting in New York on Monday.

France’s Sanofi sees peak annual sales closer to $700 million. The discrepancy is central to Genzyme’s argument that it is worth more than the $69 a share being offered by Sanofi.

8 Sony warns may fall short of LCD TV sales target

By Reiji Murai, Reuters

Mon Dec 20, 3:46 am ET

TOKYO (Reuters) – Sony Corp’s LCD TV sales will likely fall slightly short of a targeted 60 percent rise in unit terms this financial year, a senior executive said, with new 3D TVs unable to resuscitate soft sales in mature markets.

Sony Executive Deputy President Hiroshi Yoshioka said in an interview with Reuters and other media that Sony would struggle to make the TV division profitable this year and that he was not expecting substantial profits from the operations in the next financial year.

Television sales in Japan, which ballooned this year with a government stimulus plan and the digitization of terrestrial broadcasting, are expected to tumble from December, while an uncertain job market is weighing on U.S. shoppers’ appetite for big-ticket items.

9 An inconvenient housing sector

By Pedro Nicolaci da Costa, Reuters

Sun Dec 19, 3:01 pm ET

WASHINGTON (Reuters) – Wall Street banks have been gripped by a certain euphoria in recent weeks, with their economists touting a modest improvement in U.S. data as an omen of more robust growth to come in 2011.

Housing figures next week may inject a dose of sobriety into these forecasts. Anticipation of a strong expansion, coupled with worries about the budget deficit following a new tax deal in Washington, have pushed Treasury bond yields that directly affect mortgage rates sharply higher.

This raises the concern that a still-struggling housing sector, the epicenter of the country’s worst financial crisis in generations, may yet see further deterioration.

10 U.S. closes six banks; 2010 failures now 157

By Glenn Somerville, Reuters

Fri Dec 17, 8:47 pm ET

WASHINGTON (Reuters) – Authorities closed six more banks on Friday, bringing the number of closures so far this year to 157 as the aftermath of the 2007-2009 financial crisis continued to take a toll.

Smaller financial institutions, in particular, continue to feel the impact of the struggling housing market, weak economy and high unemployment. The bulk of this year’s closures have been smaller institutions, each with less than $1 billion in assets. Large banks have recovered more quickly from the financial crisis.

The Federal Deposit Insurance Corp (FDIC) has said it expects bank closures to peak this year after 140 closures in 2009.

11 U.S. faces tough future without Build America Bonds

By Lisa Lambert, Reuters

Fri Dec 17, 5:48 pm ET

WASHINGTON (Reuters) – U.S. state and local governments face a surge in borrowing costs after lawmakers refused to renew the federally subsidized Build America Bonds program used to fund infrastructure projects and create jobs.

Lawmakers had considered the $858 billion deal on the so-called Bush tax cuts the best vehicle for extending BABs, which expire with the stimulus plan at year end. The U.S. House of Representatives killed the possibility of an extension when it approved the deal late Thursday. President Barack Obama signed it into law on Friday.

With the end of BABs, the $2.8 trillion municipal bond market could see depressed prices and greater volatility. The bonds made up more than a quarter of all new municipal debt sold this year and have been largely attributed with restarting stalled municipal credit markets.

12 Mugabe says may bar Western investors over sanctions

By Cris Chinaka, Reuters

Sat Dec 18, 1:48 pm ET

HARARE, Zimbabwe (Reuters) – Zimbabwe’s President Robert Mugabe on Saturday threatened to act against companies from Western countries that have imposed sanctions on his party over suspected election fraud and rights abuses.

The 86-year-old leader repeated threats to nationalize foreign firms, threatening to retaliate against firms such as Rio Tinto (RIO.L) (RIO.AX) and Anglo American (AAL.L) (AGLJ.J), which operate in Zimbabwe.

“We ask them, think again, think now. Is it sanctions or no sanctions. We will be very, very strict to the extent of refusing investment from those countries (that have imposed sanctions),” Mugabe told ZANU-PF supporters at the end of the party’s annual conference.

13 Two states sue Bank of America on mortgage servicing

By Dan Levine, Reuters

Fri Dec 17, 5:32 pm ET

SAN FRANCISCO (Reuters) – The states of Arizona and Nevada sued Bank of America Corp on Friday, accusing the largest U.S. bank of routinely misleading consumers about home loan modifications.

The two lawsuits, filed by each state attorney general in Arizona and Nevada state courts, seek potentially massive fines against the bank and compensation for customers.

Arizona accuses Bank of America of violating a 2009 consent judgment in which it committed to widespread home loan modifications. The bank failed to follow through, leaving borrowers in limbo, according to the suit.

14 SEC expands mortgage probe: sources

By Matthew Goldstein and Rachelle Younglai, Reuters

Fri Dec 17, 5:22 pm ET

NEW YORK/WASHINGTON (Reuters) – Securities regulators have broadened their inquiry into the mortgage industry, asking big banks about the early stages of securitizing home loans, two sources familiar with the probe said.

The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs Group Inc and Wells Fargo & Co, the sources said.

Months ago, the SEC began looking into the banks’ foreclosure practices following allegations that mortgage servicers were using shoddy paperwork to evict delinquent borrowers from their homes.

15 Irish debt downgraded as EU eschews crisis

By Padraic Halpin and Jan Strupczewski, Reuters

Fri Dec 17, 5:23 pm ET

DUBLIN/BRUSSELS (Reuters) – Ratings agency Moody’s gave an emphatic thumbs-down on Friday to Europe’s efforts to resolve a debt crisis, slashing Ireland’s credit rating as EU leaders took no new action to prevent market turmoil spreading.

Moody’s cut Ireland’s rating by a stunning five notches during a European Union summit meant to restore confidence in the euro zone by creating a permanent financial safety net from 2013 and vowing to do whatever it takes to protect the euro.

Moody’s cut Ireland’s rating to Baa1, three notches above junk, with a negative outlook from Aa2 and warned further downgrades could follow if Dublin was unable to stabilize its debt situation, caused by a banking crash after a decade-long property bubble burst.

16 China caps boom year for autos with Guangzhou show

By KELVIN CHAN, AP Business Writer

1 hr 32 mins ago

GUANGZHOU, China – Automakers are forecasting strong China car sales in 2011 despite the end of some government incentives as the country’s second major auto show this year kicks off in the southern city of Guangzhou.

China overtook the United States in 2009 as the world’s biggest car market, with sales surging 45 percent to 13.6 million vehicles. Monthly sales this year have seen double-digit percentage growth and analysts are forecasting sales may climb roughly 30 percent to about 17 million vehicles for the full year.

Such explosive growth may not continue in 2011 because a tax cut on new vehicle purchases is expected to end. But a rebate of 3,000 yuan ($450) on cars with small engines will stay in place, as the government seeks to encourage people to drive more fuel efficient vehicles.

17 Gawker hack underscores flaws with passwords

By JORDAN ROBERTSON, AP Technology Writer

Sun Dec 19, 2:55 pm ET

SAN FRANCISCO – The fallout from a hacking attack on Gawker Media Inc. a week ago underscores a basic security risk of living more of our lives online: Using the same username and password for multiple sites is convenient, but costly.

After the attack on the publisher of such blogs as Gawker, Gizmodo and Jezebel exposed account information on as many as 1.4 million people, several unrelated companies had to freeze their accounts and force users to reset passwords.

Gawker Media itself didn’t have all that much sensitive information about its users. But the usernames and passwords obtained there could open doors to more valuable accounts elsewhere, including e-mail and banking.

18 Benefits: Jobless relieved life raft still afloat

By MEGHAN BARR, Associated Press

Sun Dec 19, 4:01 pm ET

CLEVELAND – Kimberly Smith holds up the piece of paper that is the only thing keeping her from bankruptcy: an application for extended unemployment benefits. She’s not happy that she needs it. And she’s upset that it was nearly taken away.

“I do deserve it,” the 49-year-old says. “I’ve done everything I could to try and get a job. I tried to get back into the retail industry. I made the effort to, at my age, go back to college.”

President Barack Obama extended unemployment benefits for Smith and millions of other Americans when he signed tax-cut legislation Friday. It helps people who have been out of work more than 26 weeks but less than 99 weeks, though the benefits vary greatly from state to state.

19 Chinese endure power shortages as coal runs short


57 mins ago

SHANGHAI – Communities in central and northern China are facing power cuts and rationing as winter coal supplies fall short of surging demand.

Cold weather and transport disruptions typically cause shortages most years, but the problem has been complicated by coal producers’ unhappiness over price controls that are crimping their profits.

China’s State Grid, the government power provider, said in reports seen Monday on its websites that recent winter storms had pushed demand higher while worsening traffic bottlenecks, hindering coal deliveries.

20 SKorea plans levy on foreign currency bank debt

By KELLY OLSEN, AP Business Writer

Sun Dec 19, 3:02 pm ET

SEOUL, South Korea – South Korea plans to impose a levy on non-deposit foreign currency debt held by domestic and foreign banks in a bid to defend itself against capital surges that could threaten the country’s economy, financial authorities said Sunday.

The announcement comes as emerging countries try to control the movement of so-called “hot money” from abroad that they say drives up the value of their currencies and destabilizes their markets. Foreign investors have sought higher returns in fast-growing developing economies amid ultra-low interest rates and other stimulatory monetary policies in advanced countries such as the United States and Japan.

South Korea has already announced limits on investments by domestic and foreign banks in foreign exchange derivatives trading and is moving to bring back a tax on foreign investment in government bonds as ways to shield itself against potential financial instability.

21 Wanted: Buyer for controversial Cape Wind energy

By JAY LINDSAY, Associated Press

Sun Dec 19, 3:48 pm ET

BOSTON – Cape Wind has outlasted a decade of government review, a slew of court brawls and fierce opposition from mariners, fishermen, Indian tribes and Kennedys just to win the right to sell its wind-fueled electricity.

Now, all it needs are customers.

Last month, the nation’s first offshore wind farm nailed down its first buyer when the Massachusetts Department of Public Utility approved a deal that sees Cape Wind selling half its power to National Grid, the state’s largest electric utility.

22 Contractors behaving badly mean headaches for US

By RICHARD LARDNER, Associated Press

Sun Dec 19, 9:39 am ET

WASHINGTON – At two in the morning on Sept. 9, 2005, five DynCorp International security guards assigned to Afghan President Hamid Karzai’s protective detail returned to their compound drunk, with a prostitute in tow. Less than a week later, three of these same guards got drunk again, this time in the VIP lounge of the Kabul airport while awaiting a flight to Thailand.

“They had been intoxicated, loud and obnoxious,” according to an internal company report of the incident, which noted that Afghanistan’s deputy director for elections and a foreign diplomat were also in the lounge. “Complaints were made regarding the situation.” DynCorp fired the three guards.

Such episodes represent the headaches that U.S. contractors can cause in Afghanistan, Iraq and elsewhere. They are indispensable to the State Department’s mission overseas, handling security, transportation, construction, food service and more. But when hired hands behave badly – or break the law – they cast a cloud over the American presence.

23 Bank of America stops handling WikiLeaks payments

By TOM MURPHY, AP Business Writer

Sun Dec 19, 12:54 am ET

Bank of America Corp. has joined several other financial institutions in refusing to handle payments for WikiLeaks, the latest blow to the secret-releasing organization’s efforts to continue operating under pressure from governments and the corporate world.

The Charlotte, N.C.-based bank’s move adds to similar actions by Mastercard Inc. and PayPal Inc. Though previous moves have prompted reprisals by hackers, Bank of America’s site is as well-protected as they come, security experts say.

Its site was problem-free through midafternoon Saturday.

24 Conn. company’s stuffed germ toys catching on

By STEPHANIE REITZ, Associated Press

Sat Dec 18, 1:08 pm ET

STAMFORD, Conn. – Jim Henson’s Muppets made pigs and frogs endearing, and Walt Disney turned a common rodent into a cultural icon.

Now, Drew Oliver thinks it’s time for bacteria, viruses and other maligned microorganisms to share the love.

Instead of standard Christmas gifts, a growing number of people are looking under the tree for giant stuffed cold germs, cuddly E. coli, hugworthy heartworm and other oddities from Oliver’s Stamford-based company, Giant Microbes. Oliver says the toys are true to the microbes they represent except, of course, for their eyes and enhanced colors.

25 Arizona, Nevada sue BofA over loan modifications

By BOB CHRISTIE, Associated Press

Fri Dec 17, 7:17 pm ET

PHOENIX – Attorneys general in Arizona and Nevada filed civil lawsuits Friday against Bank of America Corp., alleging that the lender is misleading and deceiving homeowners who have tried to modify mortgages in two of the nation’s most foreclosure-damaged states.

Bank of America violated Arizona’s consumer fraud law by misleading consumers who tried to reduce their monthly payments to keep their homes, state Attorney General Terry Goddard said. The bank also violated the terms of a 2009 consent agreement requiring its Countrywide mortgage subsidiary to implement a loan modification program, the Arizona lawsuit alleges.

Hundreds of homeowners kept making their mortgage payments because Bank of America repeatedly assured them that their loans were being modified, Goddard said. Instead, many lost their homes anyway.

26 As US debates, China acts – with a building boom

By ELAINE KURTENBACH, Associated Press

Mon Dec 20, 12:01 am ET

HANGZHOU, China – Gravel-laden barges glide past the willow-fringed banks of the Grand Canal, plying a trade route built 2,500 years ago to bring grain from China’s fertile south to its rulers in the north.

Now the 1,800-kilometer (1,125-mile) passage is part of an even grander scheme: a $150 billion plan to bring water from the mighty Yangtze river to the parched north in what is the world’s most expensive infrastructure project.

Increasingly, a group of rising economies – from Brazil to the United Arab Emirates – is building the showcase projects that once were mainly the pride of the U.S., Western Europe and Japan. America’s Hoover Dam made headlines in the 1930s; today, it is China’s $25 billion Three Gorges Dam.

27 Calif. gives business time to meet diesel rules

By JASON DEAREN, Associated Press

Fri Dec 17, 8:24 pm ET

SACRAMENTO, Calif. – Business owners will have more time to comply with California’s tough diesel emissions standards for trucks, school buses and construction equipment under more relaxed rules that air quality officials adopted on Friday.

The Air Resources Board passed the regulations unanimously, saying businesses struggling during a recession need more time to replace or upgrade aging equipment.

Clean air advocates countered that the move only ensured more harmful soot would be emitted into California’s air.

28 Regulators close banks in Ga., Fla., Ark., Minn.

By MARCY GORDON, AP Business Writer

Fri Dec 17, 7:58 pm ET

WASHINGTON – Regulators on Friday shuttered three small banks in Georgia and one each in Florida, Arkansas and Minnesota, raising to 157 the number of U.S. banks brought down this year by the struggling economy and soured loans.

The Federal Deposit Insurance Corp. took over the three Georgia banks: Appalachian Community Bank of McCaysville, with $68.2 million in assets; Chestatee State Bank, based in Dawsonville, with $244.4 million in assets; and Atlanta-based United Americas Bank, with $242.3 million in assets.

The FDIC also seized Bank of Miami, based in Coral Gables, Fla., with $448.2 million in assets; First Southern Bank of Batesville, Ark., with $191.8 million in assets; and Community National Bank of Lino Lakes, Minn., with $31.6 million in assets.

29 Debit card fee cap could mean higher banking costs

By EILEEN AJ CONNELLY, AP Personal Finance Writer

Fri Dec 17, 7:03 pm ET

NEW YORK – A proposed cap on the fees that banks charge for debit card transactions would substantially reduce the cost for businesses. But it’s started a death watch for debit card rewards and renewed predictions that free checking is done for.

At issue is who will ultimately benefit from the savings? The Federal Reserve’s proposal to cap these fees, officially known as interchange fees, at 12 cents per transaction would enable retailers to pass on annual savings of $10 billion to $13 billion to consumers. But banks and card networks maintain that retailers will pocket the savings. This would leave consumers to bear the brunt of the new law through higher costs for banking and reduced rewards programs.

In releasing its proposal Thursday, Fed staff said they found the cost to banks for processing is between 7 cents and 12 cents per transaction. Yet every time a customer swipes a debit card, the average fee is 44 cents.

30 FAA routinely misses airline inspection deadlines

By JOAN LOWY, Associated Press

Fri Dec 17, 6:43 pm ET

WASHINGTON – Government inspections to uncover serious maintenance problems that could cause airline crashes are often delayed for years or focus on less critical problems, according to a government watchdog.

In a report being circulated in Congress, the Department of Transportation’s inspector general identified several weaknesses in a key Federal Aviation Administration airline maintenance oversight program. Unless FAA fixes those weaknesses, the report said, its ability to “effectively oversee” the nation’s aviation system is lessened.

The Associated Press obtained a copy of the report on Friday.

31 Tax law won’t help people who used up jobless aid

By PAUL WISEMAN, AP Economics Writer

Fri Dec 17, 6:39 pm ET

WASHINGTON – Unemployment benefits will be restored for millions of Americans under the tax-cut measure President Barack Obama signed into law Friday. Sylvia Kittrell of Orlando, Fla., isn’t among them.

A social worker unemployed for more than two years, she’s one of hundreds of thousands who will get no help from the new law because they’ve already used up all the benefits available to them.

“I have no money,” Kittrell says. “Everything is gone.”

32 Bank of Montreal buys US bank for $4.1B

By ROB GILLIES, Associated Press

Fri Dec 17, 5:48 pm ET

TORONTO – The Bank of Montreal is buying a Milwaukee-based bank, the latest example of Canadian banks using their muscle to snap up U.S. financial institutions battered by the financial crisis.

Canada’s fourth-largest bank announced Friday that it was acquiring Marshall & Ilsley Corp. for $4.1 billion in stock, doubling its presence in the U.S. from 321 branches to 695.

The news sent shares of M&I surging 18 percent, up $1.06, to $6.85, while U.S.-traded shares of the Bank of Montreal fell $4.40, or 7.1 percent, to $57.26.

33 Las Vegas’ Neon Boneyard highlights glitzy past

By CRISTINA SILVA, Associated Press

Fri Dec 17, 3:53 pm ET

LAS VEGAS – The stack of giant neon letters just beyond the gates of the Neon Boneyard in Las Vegas are unlit. Flecks of turquoise, ruby and jade paint chips dot the gravel field. There are rusted metal beams, twisted tubes, cracked light bulbs and 40-feet-tall skeletons plucked from the rubble of imploded casinos.

Miles from the blinking marquees of the Las Vegas Strip, this is where neon signs go to die.

In a city that hums of impulse and overstimulation, where investors flock to what’s hot and new and visitors empty their wallets at the promise of instant entertainment, the three-acre lot that displays relics from classic Las Vegas buildings offers a rare opportunity for retrospection.

34 EPA issues new PCB dredging rules for GE in NY

By RIK STEVENS, Associated Press

Fri Dec 17, 1:29 pm ET

ALBANY, N.Y. – General Electric must remove more PCB-tainted sediment from the Hudson River and will have to take better samples of the river bottom when it resumes dredging in the spring, the Environmental Protection Agency said Friday.

Environmental groups said the new standards will ultimately mean a cleaner river but criticized the EPA for allowing GE to cap – or, leave covered-over PCBs in the river – up to 11 percent of the total project area, not counting rocky or other hard-to-reach areas. When those trouble spots are included, the new standards mean up to 21 percent of the area could be capped.

“There will still be some level of PCBs under that cap,” said Ned Sullivan of the environmental advocacy group Scenic Hudson. “That’s the major disappointment.”


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