Monday Business Edition
Following the economic story is a trifle confusing because there are at least 2 threads to it. One of those threads is the failure of our financial institutions and their systematic culture of fraud.
But another thread is the failure of academic economists and Washington policy makers to correctly diagnose and take action on our National economic problems.
Let me start by saying that what we are seeing in the United States macro economy is a textbook example of the complete and utter failure of Monetary Policy from Milton Friedman to Alan Greenspan. What ails us is overcapacity and a lack of aggregate demand. Businesses are making everything that anyone will pay for and could easily make much, much more at little marginal cost.
They are sitting on piles of cash which they are currently using to buy sort term treasuries at 0% interest (a safe way of parking it not investing it), stock repurchases, mergers and acquisitions, expanding overseas operations, and other non productive pursuits; non productive in this case meaning- Not Increasing U.S. Aggregate Demand.
Now the textbook response to a situation like this is for the Government to step in as a purchaser of last resort- Dig Holes. Fill them up. At least you’re putting money in people’s pockets and because of the Multiplier Effect Aggregate Demand will rise and your National economy will pick up. Tested and proven.
Indeed, this is exactly the argument David Broder uses for advocating War with Iran!
Umm… aggressive warfare for economic gain is pretty specifically a war crime Dave.
But it does validate the idea of Government fiscal policy as a tool for jump starting the economy.
Instead of that we are pursuing a policy of pushing on a string. The object of Bernake’s $600 Billion repurchase is to create negative interest rates in the hopes that losing money by keeping it parked in T-Bills will spur investment.
A thin hope at best and as Krugman points out, by foregoing the chance to create increased expectations of inflation in general we are reducing that incentive.
Doing It Again
By PAUL KRUGMAN, The New York Times
Published: November 7, 2010
Eight years ago Ben Bernanke, already a governor at the Federal Reserve although not yet chairman, spoke at a conference honoring Milton Friedman. He closed his talk by addressing Friedman’s famous claim that the Fed was responsible for the Great Depression, because it failed to do what was necessary to save the economy.
“You’re right,” said Mr. Bernanke, “we did it. We’re very sorry. But thanks to you, we won’t do it again.”
…
For the big concern about quantitative easing isn’t that it will do too much; it is that it will accomplish too little. Reasonable estimates suggest that the Fed’s new policy is unlikely to reduce interest rates enough to make more than a modest dent in unemployment. The only way the Fed might accomplish more is by changing expectations – specifically, by leading people to believe that we will have somewhat above-normal inflation over the next few years, which would reduce the incentive to sit on cash.
The idea that higher inflation might help isn’t outlandish; it has been raised by many economists, some regional Fed presidents and the International Monetary Fund. But in the same remarks in which he defended his new policy, Mr. Bernanke – clearly trying to appease the inflationistas – vowed not to change the Fed’s price target: “I have rejected any notion that we are going to try to raise inflation to a super-normal level in order to have effects on the economy.”
And there goes the best hope that the Fed’s plan might actually work.
Think of it this way: Mr. Bernanke is getting the Obama treatment, and making the Obama response. He’s facing intense, knee-jerk opposition to his efforts to rescue the economy. In an effort to mute that criticism, he’s scaling back his plans in such a way as to guarantee that they’ll fail.
Business News below-
1 World Bank chief calls for gold to anchor forex
AFP
1 hr 22 mins ago
SINGAPORE (AFP) – World Bank president Robert Zoellick has called on bickering G20 nations to bring gold back into the global monetary system as an anchor to guide currency movements.
Ahead of a Group of 20 summit this week in Seoul, Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy.
He said the world needed a new regime to succeed the “Bretton Woods II” system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971. |
Fuck. It’s going to take me a whole other fucking diary to explain how incredibly fucking stupid an idea this is.
2 Japan’s Skymark to buy up to six Airbus A380s
by Karyn Poupee, AFP
2 hrs 18 mins ago
TOKYO (AFP) – Japan’s low-fare Skymark Airlines said Monday it would buy four Airbus A380 superjumbos, with an option to buy two more, as it plans to launch international routes in a deal worth 2.8 billion dollars.
The deal gives the European firm a foothold in a market where US rival Boeing has long had a near-monopoly and is welcome news as it comes under pressure after Qantas grounded its A380 fleet following an engine blow-out last week.
“Skymark Airlines signed a basic agreement with Airbus on the introduction of Airbus A380,” Skymark Airlines said in a statement, announcing its order for the world’s largest passenger aircraft. |
3 Qantas extends A380 groundings over oil leaks
by Talek Harris, AFP
Mon Nov 8, 3:58 am ET
SYDNEY (AFP) – Qantas extended the grounding of its Airbus A380 superjumbos for at least three more days on Monday after finding oil leaks in some engines, heightening safety fears after two mid-air blow-outs last week.
However Singapore Airlines said Monday its inspections of its 11 A380 superjumbos had found no problems with their Rolls-Royce Trent 900 engines, as it continues flying the planes.
In Sydney, Qantas chief executive Alan Joyce said rigorous testing had uncovered the anomalies on the Rolls-Royce engines on three separate aircraft, pushing back the return to action of the long-haul planes by 72 hours. |
4 iPhone triggers videogame gold rush
by Fabrice Hoss, AFP
Sun Nov 7, 3:09 pm ET
MONTREAL (AFP) – The commercial tsunami unleashed by the iPhone has served as a launch pad for the videogame industry in Montreal, which hopes to seize on the success of Apple’s smartphone.
Hundreds of participants in the two-day Montreal International Game Summit that opens Monday in Quebec’s big city will be looking for ways to better milk the gaming market cow, in the face of Apple’s golden example.
In barely a year and a half, the iPhone has seized 20 percent of the portable gaming market and five percent of the global videogame market, estimated at some 50 billion dollars a year. |
5 Get rich quick trumps market reform: analysts
by Luc Olinga, AFP
Sun Nov 7, 1:32 am ET
PARIS (AFP) – The Group of 20 countries, meeting next week, were supposed to have stamped out the financial market abuses at the heart of the global crisis but little seems to have changed since their last summit, analysts say
Hopes for reform after the market chicanery that brought down a series of ‘too-big-to-fail’ banks and sparked the worst slump since the 1930s have faded with the return of the ‘get rich quick’ mentality, according to analysts.
“The bad old habits have come back much faster than was expected,” said Denis Marcadet of Vendome Associes in Paris. |
6 Coal India issue could boost future state sales
by Salil Panchal, AFP
Sun Nov 7, 1:11 am ET
MUMBAI (AFP) – The success of India’s 3.4-billion-dollar sale of shares in state-run Coal India has raised hopes of big returns for the government from a cascade of looming partial privatisations, analysts say.
The sale of a 10 percent stake in Coal India was oversubscribed 15 times and shares soared 40 percent on their opening day of trade last week as foreign and domestic investors scrambled to invest in the world’s biggest coal miner.
It was India’s biggest stock sale ever and “will see a positive rub-off on future disinvestments”, Sanjay Sharma, head of equities with Deutsche Bank, told AFP. |
7 China offers to support Portugal but no debt pledge
by Levi Fernandes, AFP
Sun Nov 7, 2:50 pm ET
LISBON (AFP) – Chinese President Hu Jintao wrapped up a visit to Portugal Sunday with pledges to support its battered economy, but did not commit to purchasing Portuguese debt, though it had been widely anticipated.
Hu and Portuguese Prime Minister Jose Socrates inked a series of trade deals after holding talks, but there was no announcement that Beijing would buy up Portuguese debt, as it did last month for Greece.
“We are ready to support through concrete measures Portugal’s efforts to reduce the impact of the international crisis,” Hu said during a joint news conference. |
8 China’s Hu calls for Portuguese cooperation on reform agenda
by Anne Le Coz, AFP
Sat Nov 6, 5:04 pm ET
LISBON (AFP) – China wants to strengthen cooperation with Portugal on international issues such as reform of the United Nations, President Hu Jintao said Saturday.
“Thus we will be able to consolidate our consultations on global themes and common international interest, such as the resumption of world economic growth, the reform of the United Nations and climate change,” Hu added.
The Chinese leader was speaking at a joint press conference with Portugal’s President Anibal Cavaco Silva, on the first day of a two-day visit to this economically fragile country. |
9 Obama savors 10 billion dollar India trade bonanza
by Stephen Collinson, AFP
Sat Nov 6, 2:06 pm ET
MUMBAI (AFP) – President Barack Obama Saturday unveiled 10 billion dollars in trade deals with India, seeking a US jobs dividend from a fast-rising economy he hailed as one of humanity’s most stunning achievements.
Weaving a fulsome parable of India’s emergence and potential in a speech to US and Indian business executives, Obama also announced a reform of US export regimes and rejected caricatures of India as a nation of “call centers.”
His speech was clearly aimed not only at India, but at voters in the United States who punished Obama’s Democratic Party in mid-term elections on Tuesday, in a cry of anguish over the job-starved recovery. |
10 China’s Hu seals France ties ahead of G20
by Roland Lloyd Parry, AFP
Sat Nov 6, 1:02 pm ET
NICE, France (AFP) – China’s President Hu Jintao wrapped up a lavish state visit to France on Saturday after throwing his weight behind its upcoming G20 presidency and plans for global financial reform.
Hu took off from the southern resort of Nice, bound for Lisbon according to the French presidency, which claimed a diplomatic success in winning China’s backing for when it heads the Group of 20 economic powers from November 13.
Officials gave no details of Hu’s schedule in Lisbon but analysts said that trip was likely part of China’s drive to buy up cheap government debt in countries like Portugal which have been hit hard by the financial crisis. |
11 Zimbabwe gem smuggling fuels cross border dealer hub
by Justine Gerardy, AFP
Sun Nov 7, 7:16 pm ET
MANICA, Mozambique (AFP) – Waving his index finger into the balmy heat, the taxi driver barely pauses while driving through the hub of international diamond dealers who have set up near Zimbabwe’s border.
“Here Lebanese. Americans stay here. Ten Guineas stay in that house. Here Pakistan. Here Nigeria,” Raymond Reba, 24, offers every few metres, with one man raising a hopeful finger to signal he is open for business.
“There is a buyer. Here another buyer. There again, another buyer.” |
12 APEC looks to safeguard growth, ease currency tension
by David Watkins, AFP
Sat Nov 6, 8:57 am ET
KYOTO, Japan (AFP) – Asia Pacific finance ministers on Saturday pledged to work towards safeguarding growth and to avoid weakening each other’s currencies, as the US sought to ease tensions over recent economic proposals.
Finance chiefs from the 21-nation Asia Pacific Economic Cooperation group including the United States, China and Japan, met in Kyoto and adopted wording from an October G20 meeting to steer away from the “competitive devaluation of currencies”.
Fault lines had emerged during the two-day G20 meeting over a US proposal that countries assign a quantifiable limit for their current account surpluses or deficits to help rebalance the global economy and ease trade tensions. |
13 G20 finds common ground opposing U.S.
By Emily Kaiser, Reuters
Sun Nov 7, 3:02 pm ET
WASHINGTON (Reuters) – The Group of 20 is beginning to look more like the G19 plus 1 as emerging and rich countries alike accuse the United States of breaking a vow of unity.
This week’s G20 summit will require every bit of President Barack Obama’s diplomacy skills after the Federal Reserve embarked on a new $600 billion bond-buying spree, sparking criticism from four continents that the U.S. central bank was ignoring the global repercussions.
Officials from Germany, Brazil, China and South Africa were among those expressing concern that the Fed’s money printing could weaken the dollar, drive up commodity prices and send uncontrollable waves of investor cash into emerging markets. |
14 Obama fires back after China slates Fed’s QE2
By Patricia Zengerle and Krittivas Mukherjee, Reuters
Mon Nov 8, 5:00 am ET
NEW DELHI (Reuters) – President Barack Obama defended the Federal Reserve’s policy of printing dollars on Monday during a trip to India, after Chinese officials stepped up criticism ahead of this week’s Group of 20 meeting.
The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent “currency wars” from spreading to become a rush to protectionism that could imperil the global recovery.
It has been overshadowed by disagreements over the U.S. Federal Reserve’s quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilizing flow of money into emerging economies. |
15 Shell puts Woodside in play with $3 billion stake sale
By Michael Smith and Tom Bergin, Reuters
2 hrs 27 mins ago
SYDNEY/LONDON (Reuters) – Royal Dutch Shell said it planned to sell almost a third of its 34 percent stake in Woodside Petroleum for $3.3 billion, prompting predictions Australia’s largest oil and gas firm could become a bid target.
The Anglo-Dutch oil major said in a statement on Monday it would retain a 24.27 percent stake in Woodside for at least a year, except in the case of a takeover bid for Woodside, or that Shell decided to sell a large chunk to a strategic buyer.
A source familiar with the matter said the 10 percent stake being sold on Monday was being marketed to institutions in Australia and internationally. |
16 Qantas extends A380 grounding as it probes oil leaks
By Michael Smith and Balazs Koranyi, Reuters
48 mins ago
LONDON/SYDNEY (Reuters) – Australia’s Qantas Airways has grounded its A380 fleet for at least three more days as it investigates oil leaks that might have caused the engine explosion on a Sydney-bound flight last week.
The incident has rattled the global aviation industry, which is recovering from heavy losses during the global economic downturn, and has been damaging for Rolls-Royce, which makes the Trent 900 engine that broke apart on the flight, which made an emergency landing in Singapore.
Rolls shares were down 1.6 percent at 581.5 pence at 1008 GMT in London, extending last week’s 9.7 percent drop, while Qantas shares in Sydney closed 2.1 percent lower at A$2.80. |
17 World Bank chief surprises with gold standard idea
Reuters
1 hr 37 mins ago
LONDON (Reuters) – Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank president Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G20 summit.
Writing in the Financial Times, Zoellick called for a “Bretton Woods II” system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.
The former U.S. trade representative, who served in several Republican administrations, said such a move “is likely to need to involve the dollar, the euro, the yen, the pound and (a yuan) that moves toward internationalization and then an open capital account. |
18 Stocks seek direction post-Fed and elections
By Chuck Mikolajczak, Reuters
Sun Nov 7, 11:30 am ET
NEW YORK (Reuters) – Wall Street navigated through three major landmines last week — the elections, the U.S. Federal Reserve meeting and jobs report — with barely a scratch. Now what?
With earnings season winding down and a light economic calendar this week, the market will be left to its own devices to sort out its direction.
A rise of more than 16 percent in the S&P 500 (.SPX) since the start of September had many investors expecting a pullback after the trio of big events. But it appears to have emboldened them instead. |
19 APEC ponders free trade area as frictions loom
By Yoko Nishikawa and Linda Sieg, Reuters
Sun Nov 7, 6:04 am ET
YOKOHAMA (Reuters) – Asia-Pacific economies, including China and the United States, were laying the groundwork on Sunday for a vast free trade area, but frictions over currencies and geopolitical rivalries threatened to undermine regional harmony.
China and the United States turned down the heat in an acrimonious dispute over currencies and trade imbalances at a meeting of finance ministers from the 21-member Asia-Pacific Economic Cooperation (APEC) forum.
Meeting in Japan’s ancient capital of Kyoto on Saturday, the finance chiefs declared members will move toward more market-determined exchange rate systems reflecting underlying economic fundamentals, and refrain from competitive devaluation of currencies. |
20 China offers to help Portugal but silent on debt
By Shrikesh Laxmidas and Kevin Yao Shrikesh, Reuters
Sun Nov 7, 11:46 am ET
LISBON (Reuters) – China will back Portugal’s efforts to deal with fallout from the world financial crisis, President Hu Jintao said on Sunday, but he stopped short of promising to buy Portuguese bonds as the debt-ridden country had hoped.
“We are willing to take concrete measures to help Portugal cope with the global financial crisis,” he said after meeting Prime Minister Jose Socrates, without elaborating.
The meeting was the last stop of Hu’s four-day to France and Portugal before returning to Beijing later on Sunday. |
21 Buffett derivative bet pushes Berkshire to loss
By Ben Berkowitz, Reuters
Fri Nov 5, 7:06 pm ET
NEW YORK (Reuters) – Warren Buffett’s Berkshire Hathaway got the wrong end of a bet on future stock market prices in the third quarter, hurting profits and masking the substantial strength in his recently acquired railroad.
The billionaire investor’s Burlington Northern Santa Fe railroad had heavy demand in the quarter to transport a range of commercial and agricultural products, reflecting the growing strength in the manufacturing sector.
Buffett called his purchase of the railroad “an all-in wager on the economic future of the United States,” and its contribution to results lent credence to his strategy. |
22 Bernanke answers Fed’s global critics
By Pedro Nicolaci da Costa, Reuters
Fri Nov 5, 6:28 pm ET
JACKSONVILLE, Florida (Reuters) – Federal Reserve Chairman Ben Bernanke on Friday defended the U.S. central bank’s bond-buying against beggar-thy-neighbor criticism, saying the return to a strong U.S. economy was critical for global stability.
He suggested doing so would bolster a dollar whose weakness has sparked cries of foul from Bogota to Beijing.
The Fed’s decision to buy $600 billion of government debt has drawn scathing comments from nations which contend it is generating global instability by strengthen their currencies against the dollar, inflating asset bubbles and fueling inflation in their economies. |
23 U.S. eyes new rules for market after "flash crash"
By Christopher Doering and Rachelle Younglai, Reuters
Fri Nov 5, 3:46 pm ET
WASHINGTON (Reuters) – U.S. securities regulators are close to approving a plan to ensure markets remain liquid even in times of crisis, the chairman of the Securities and Exchange Commission said on Friday.
At a meeting to discuss the May “flash crash” that sent the Dow Jones industrial average into a brief 700-point freefall, SEC chief Mary Schapiro and other regulators were zeroing in on new rules to prevent another uncontrollable market plunge.
The brief market crash rattled investors already unhinged by the financial crisis. |
24 AIG loses more than $2 billion after asset sales
By Ben Berkowitz, Reuters
Fri Nov 5, 3:45 pm ET
NEW YORK (Reuters) – AIG (AIG.N) posted slight gains in its main insurance businesses in the third quarter, but the bailed-out company lost more than $2 billion from asset sales linked to its restructuring.
The results underscore the difficulties American International Group Inc faces as it tries to raise money to repay the $100 billion it still owes the U.S. government. AIG is trying to generate more income from its main insurance businesses but is regularly losing money on asset sales.
“It’s a company that’s made progress but still has more work to do,” said Cathy Seifert, an insurance equity analyst at Standard & Poor’s. |
25 Qantas CEO: Oil leaks in 3 engines of its A380s
By KRISTEN GELINEAU, Associated Press
2 hrs 1 min ago
SYDNEY – Tests have uncovered oil leaks in three Rolls-Royce engines on Qantas’ grounded Airbus A380s, the airline’s CEO said Monday, as engineers tried to zero in on the cause of an engine failure on board one of the carrier’s superjumbo jets last week.
Australia’s national carrier grounded its six double-decker A380s, the world’s newest and largest airliner, after an engine burst minutes into a flight from Singapore to Sydney last week, scattering debris over Indonesia’s Batam island. The plane made a safe emergency landing in Singapore.
Engineers conducted eight hours of extensive checks on each engine over the weekend. |
26 Vt. nuke plant closes after radioactive water leak
By DAVE GRAM, Associated Press
2 hrs 3 mins ago
MONTPELIER, Vt. – Technicians at the Vermont Yankee nuclear plant will begin work Monday morning to fix a pipe that leaked radioactive water and forced the plant to shut down.
The nuclear reactor was taken out of service at 7 p.m. Sunday. Plant spokesman Larry Smith estimated it would take 13 hours to cool down enough for workers to enter the area and make repairs.
Smith said the leak of about 60 drops a minute was spotted earlier Sunday during routine surveillance. It was coming from a 2-foot-wide pipe that was part of the circulation system involving the reactor, he said. The water was being collected by a sump pump and cycled back through the system, he said. |
27 China suffers diesel shortage, disrupting industry
By JOE McDONALD, AP Business Writer
1 hr 26 mins ago
BEIJING – Aggravated Chinese truck drivers parked for hours to buy rationed diesel Monday as shortages blamed on a government conservation campaign and possible hoarding by state oil companies disrupted industry and trade.
Supplies ran low after thousands of factories bought diesel generators to cope with power cuts imposed by authorities to meet energy-saving goals. That boosted already strong fuel demand amid rapid economic growth and complaints that major suppliers are withholding diesel to pressure Beijing to raise government-set retail prices.
In the southwestern city of Chongqing, truck driver Peng Yun was just back from what should have been a three-day trip to neighboring Yunnan province. He said it stretched to five days after he had to stop six times for a partial tank of fuel. |
28 UK’s Cameron visits China seeking trade, influence
By DAVID STRINGER, Associated Press
2 hrs 35 mins ago
LONDON – British Prime Minister David Cameron was leading his country’s largest ever delegation to China on Monday, hoping to win trade and woo a powerful potential ally as London seeks to cultivate ties beyond Washington and Europe.
Cameron, accompanied by four Cabinet ministers and about 50 business leaders, will arrive Tuesday for two days of talks in Beijing – his second major trip to court an emerging economy following a high-profile visit to India in July.
Britain’s new government has made trade with developing economies its key foreign policy priority, hoping to spur the country’s sluggish growth by boosting exports. |
29 Greek PM vows to press ahead with austerity
By ELENA BECATOROS, Associated Press
Mon Nov 8, 2:42 am ET
ATHENS, Greece – Greece’s prime minister vowed to press ahead with painful austerity measures to pull the debt-strapped country out of a severe financial crisis, dropping a threat to call snap elections after his party retained a slim lead in local government polls.
“We know that change is not easy. But it was for this change that the Greek people brought us to power a year ago. And today it again confirmed that it wants this change,” George Papandreou said in a live televised speech late Sunday night.
With nearly all returns counted Monday, Papandreou’s Socialists led a key race for regional governor in greater Athens Sunday but lost significant ground elsewhere to the main opposition conservative party, while turn-out plunged. A runoff vote will be held next Sunday. |
30 APEC debates becoming body that can forge FTA
By MARI YAMAGUCHI, Associated Press
Mon Nov 8, 1:25 am ET
YOKOHAMA, Japan – Pacific Rim economies are debating whether to change the informal Asia-Pacific Economic Cooperation forum so that it can negotiate a sprawling free trade zone, Japanese officials said Monday.
The potentially major change for the 21-member APEC, formed in 1989 as non-binding forum to promote regional trade and investment, would open the possibility of a Pacific-wide trade pact encompassing 44 percent of global trade and more than half of the world’s gross domestic product.
The idea faces resistance from some member economies that want to strike free trade deals independently, although overall delegates are demonstrating an openness to it, said the Japanese officials, who requested anonymity because of government rules. Indonesia and the Philippines have said they are cool toward the concept – known as the Free Trade Area of the Asia-Pacific – preferring to think of it as a much longer-term goal. |
31 Lawyers say proving egg-related lawsuits difficult
By MICHAEL J. CRUMB, Associated Press
Mon Nov 8, 3:14 am ET
DES MOINES, Iowa – Thousands of people likely were sickened by salmonella-contaminated eggs from two Iowa companies last summer, but lawyers said far fewer have the proof needed for a successful lawsuit and most cases filed will be settled out of court.
So far, attorneys in Seattle, Houston, Chicago and Minneapolis have filed at least 10 cases related to recalls by Wright County Egg and Hillandale Farms of Iowa. The companies recalled 550 million eggs in August after a salmonella outbreak was traced to their farms.
The Centers for Disease Control and Prevention linked at least 1,600 illness to the eggs, and CDC spokeswoman Lola Russell said for every case reported there may be up to 30 more. |
32 Broadband usage growing even as gaps persist
By JOELLE TESSLER, AP Technology Writer
2 hrs 16 mins ago
WASHINGTON – The U.S. still faces a significant gap in residential broadband use that breaks down along incomes, education levels and other socio-economic factors, even as subscriptions among American households overall grew sevenfold between 2001 and 2009.
What’s more, even when controlling for key socio-economic characteristics, the U.S. continues to confront a racial gap in residential broadband use, with non-Hispanic white Americans and Asian-Americans more likely to go online using a high-speed connection than African-Americans and Hispanics.
Those are some of the key conclusions of a new analysis of Census data being released Monday by the Commerce Department. It found that the percentage of households that connect to the Internet using broadband grew to 63.5 percent in 2009 from 9.2 percent in 2001, reflecting increases across nearly all demographics. |
33 Economy recovering, but recession’s shadow is long
By RACHEL BECK and ANNE D’INNOCENZIO, AP Business Writers
Sat Nov 6, 11:29 pm ET
NEW YORK – Layaway, once the province of the poor, has gone mainstream. At the Mall of America in Minnesota, shoppers dart in for just one or two things. In New York, socialites do the unthinkable: They wear the same ball gown twice.
During the Great Recession, people made drastic changes in how they spent their money. They stopped treating credit cards as cash. They learned to save and learned to wait.
Now the recession is over, at least technically, and the economy is growing again, at least a little. But many changes in spending habits that most Americans first saw as temporary have taken hold, perhaps for good, some economists say. |
34 Web browser pioneer backs new way to surf Internet
By MICHAEL LIEDTKE, AP Technology Writer
Sun Nov 7, 4:35 pm ET
SAN FRANCISCO – The Web has changed a lot since Marc Andreessen revolutionized the Internet with the introduction of his Netscape browser in the mid-1990s. That’s why he’s betting people are ready to try a different Web-surfing technique on a new browser called RockMelt.
The browser, available for the first time Monday, is built on the premise that most online activity today revolves around socializing on Facebook, searching on Google, tweeting on Twitter and monitoring a handful of favorite websites. It tries to minimize the need to roam from one website to the next by corralling all vital information and favorite services in panes and drop-down windows.
“This is a chance for us to build a browser all over again,” Andreessen said. “These are all things we would have done (at Netscape) if we had known how people were going to use the Web.” |
35 Small banks failing as larger firms regain health
By MARCY GORDON and DANIEL WAGNER, AP Business Writers
Sun Nov 7, 3:06 pm ET
WASHINGTON – U.S. banks are failing at the fastest rate in two decades.
No, the financial crisis hasn’t returned. Wall Street doesn’t need another bailout.
But in communities around the country, 143 banks have collapsed so far this year – more than all of last year. This time, the failed banks are smaller, on average, than in 2008 and 2009. The damage to the industry has thus been milder this time. Still, the wave of closings points to the persistent struggles of many communities and states. |
36 Homeowners say loan mods led them to foreclosure
By JACOB ADELMAN, Associated Press
Sun Nov 7, 3:08 pm ET
LOS ANGELES – Grocery store owners William and Esperanza Casco were making enough money to stay current on their mortgage, but when JPMorgan Chase & Co. offered a plan that reduced their payments, they figured they could use the extra cash and signed up.
The Cascos say they never missed a subsequent payment, so they were horrified when the bank decided the smaller payments weren’t enough and foreclosed on their modest Long Beach home.
Their story is echoed across the country by people who claim – some in lawsuits – that banks didn’t live up to their end of the deal when they agreed to trial mortgage modifications. |
37 Russian reporter in coma after beating in Moscow
By LYNN BERRY, Associated Press
Sat Nov 6, 1:18 pm ET
MOSCOW – Two unknown men waited for Russian journalist Oleg Kashin to come home and then bludgeoned him on his head, arms and legs. Yet his editor said it was Kashin’s mangled hands – with part of one pinky broken off – that showed his attackers wanted to make sure he never wrote again.
Kashin, a 30-year-old reporter for the respected Kommersant newspaper, was hospitalized in a drug-induced coma after the attack early Saturday outside his Moscow apartment.
He is the latest in a line of journalists and activists to be assaulted in Russia. In most cases, the perpetrators are never found, but the Kremlin appeared determined to show that this time things will be different. |
38 ‘Staff of life’ wavers under weight of humanity
By CHARLES J. HANLEY, AP Special Correspondent
Sun Nov 7, 12:02 am ET
LOS VALLES DE TLAXCALA, Mexico – In these volcanic valleys of central Mexico, on the Canadian prairie, across India’s northern plain, they sow and they reap the golden grain that has fed us since the distant dawn of farming. But along with the wheat these days comes a harvest of worry.
Yields aren’t keeping up with a world growing hungrier. Crops are stunted in a world grown warmer. A devastating fungus, a wheat “rust,” is spreading out of Africa, a grave threat to the food plant that covers more of the planet’s surface than any other.
In Chicago, London and other money centers, the wheat market is so roiled by bad news and speculators that rising prices may put bread out of reach for millions more of the world’s poor. |
39 Obama: US elections force ‘midcourse corrections’
By BEN FELLER, AP White House Correspondent
Sun Nov 7, 2:12 pm ET
NEW DELHI – Hampered by heavy election losses at home, President Barack Obama promised from India on Sunday to make “midcourse corrections” to reinvigorate his embattled domestic agenda in the face of a testier American public and more combative Congress.
On a day of friendly outreach, Obama also was confronted about his support for Pakistan, New Delhi’s nuclear neighbor and rival. He defended the alliance while acknowledging that Pakistan-based extremists are “a cancer” with the potential to “engulf the country.”
His comments took on added significance because he spoke in Mumbai, where memories are fresh from attacks in 2008 by Pakistani assailants that killed 166 in the city. Obama urged the two nations to talk peace; he didn’t commit the U.S. as middle man. |
40 Textbook rentals no cure for rising college costs
By CRISTIAN SALAZAR, Associated Press
Sat Nov 6, 1:08 pm ET
NEW YORK – Textbook rental programs at many of the nation’s colleges – touted as money-savers for students – are limited by the number of available titles, publishers who release frequent new editions and professors who believe their right to choose course materials is essential to academic freedom.
About half the nation’s major college and university bookstores offered textbook rentals this fall, according to the National Association of College Stores, hoping to cut the $600-$900 students spend buying books each year. That’s roughly a fivefold increase from around 300 stores a year ago.
But schools and publishing experts say the programs are expensive to start up and difficult to operate. In addition, there are complaints that rental prices are still too high, even though they can be as much as half the cost of a new book. |
41 The rise of the surgical shopper
By ANNE D’INNOCENZIO and RACHEL BECK, AP Business Writers
Sun Nov 7, 9:42 pm ET
BLOOMINGTON, Minn. – Think of the Mall of America as the Colosseum of American consumerism: It has more than 500 shops, 50 eateries and its own theme park, complete with an indoor roller-coaster.
And now it, too, seems a symbol of a bygone era.
Some 40 million people still visit each year. But many are like Michelle Hoppe of New London, Minn. She drove two hours to spend just $100 at three stores – Bath & Body Works, Victoria’s Secret and a toy store. |
42 Technology a blessing, a curse for remote island
By MARTHA IRVINE, AP National Writer
Sun Nov 7, 3:21 pm ET
BEAVER ISLAND, Mich. – Muggs Bass doesn’t own a computer. She’s pretty much dead set against e-mail. Anyone who calls her home on Michigan’s remote Beaver Island should be prepared for a busy signal, if she’s on her land-line phone. She has no cell.
“When you don’t have it, you don’t miss it. That’s what I say,” says the spunky 70-year-old grandmother, who’s as comfortable telling jokes at the local pub as she is attending Mass each morning.
Technology isn’t really her thing. So, it’s a small miracle when Bass drives, once a month, to her island’s rural health center to sit down in front of a wide-screen television. There, she and a handful of other islanders connect by video conference with a similar group in Charlevoix, Mich., a two-hour ferry ride to the south and east. |
43 Asia resists US push to target trade surpluses
By TOMOKO A. HOSAKA, Associated Press
Fri Nov 5, 10:46 pm ET
KYOTO, Japan – U.S. Treasury Secretary Timothy Geithner, meeting with counterparts from around the world Saturday, faces a tough task selling his formula for mending fissures in the global economy as nations seek ways to avoid another downturn.
The two-day gathering of finance ministers from the 21-member Asia-Pacific Economic Cooperation, or APEC, follows a Group of 20 meeting last month in South Korea, where finance heads and central bankers vowed to avoid using their currencies as trade weapons.
They also promised to establish a way to measure the reduction of destabilizing trade gaps, seen through figures such as surpluses and deficits in the current account – a broad indicator of a country’s trade and investment. |
44 Fannie Mae asks for $2.5 billion in new US aid
By MARCY GORDON, AP Business Writer
Fri Nov 5, 10:43 pm ET
WASHINGTON – Government-controlled mortgage buyer Fannie Mae is asking for $2.5 billion in additional federal aid after posting a narrower loss in the third quarter.
Fannie Mae said Friday it lost $3.46 billion, or 61 cents a share, in the July-September quarter. That takes into account $2.1 billion in dividend payments to the Treasury Department. It compares with a loss of $19.8 billion, or $3.47 a share, in the third quarter of 2009.
The government rescued Washington-based Fannie Mae and sibling company Freddie Mac about two years ago and it estimates that will cost taxpayers up to $259 billion. That’s nearly twice the $133.4 billion Fannie and Freddie are in line to receive from taxpayers so far and would make it the most expensive bailout of the financial crisis. |
45 Berkshire’s 3Q net income falls on derivatives
By JOSH FUNK, AP Business Writer
Fri Nov 5, 8:36 pm ET
OMAHA, Neb. – Warren Buffett’s company posted an 8 percent drop in third-quarter net income Friday due to paper losses on its derivatives portfolio, but BNSF railroad and several of Berkshire Hathaway’s other operating companies performed well.
Burlington Northern Santa Fe railroad added $706 million to Berkshire’s bottom line in its second full quarter under Buffett’s umbrella, as it again saw increases in industrial, agricultural and consumer product shipping. Earnings from Berkshire’s manufacturing, service and retail unit, which includes such companies as Fruit of the Loom clothing and Benjamin Moore paint, nearly doubled to $645 million. Berkshire’s insurance businesses, which include auto insurer Geico and reinsurance giant General Re, reported a decline in both underwriting and investment income, however.
The Omaha, Neb.-based company said it earned nearly $3 billion, or $1,814 per Class A share, during the quarter ending Sept. 30. That’s down from $3.24 billion, or $2,087 per share, last year. Revenue grew 21 percent in the third quarter to $36.3 billion from last year’s $29.9 billion. |
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