* Afghanistan can “absorb” one combat brigade per quarter * Buildup could stretch into 2011 By Adam Entous WASHINGTON, Nov 24 (Reuters) – The Pentagon envisages carrying out President Barack Obama’s anticipated troop buildup in Afghanistan gradually at a pace of about one brigade per quarter, U.S. officials said on Tuesday. The first large-scale brigade under the expected buildup, accompanied by support units, could arrive before spring, when fighting typically picks up. A top priority for Pentagon war planners is reinforcing troops in southern Afghanistan around Kandahar, a key Taliban stronghold. But officials, speaking on condition of anonymity, said Afghanistan’s crumbling infrastructure would make it difficult for the Pentagon to field and equip more than a single brigade every three months, or approximately four a year. That means a large buildup of forces in Afghanistan could stretch well into 2011, depending on how many additional troops Obama decides to send and what types of units get deployment orders, officials briefed on the deliberations said. Pentagon Press Secretary Geoff Morrell declined to comment on specific troop levels but said of any prospective buildup: “This will not be done overnight… This is going to take some time to deploy additional forces to Afghanistan, if that is the route we take.” Brigades range in size but generally include 3,500 to 4,000 troops. They can swell to over 5,000 troops if other support units are attached to them. Marine brigades can be larger. Key members of Obama’s national security cabinet, including Defense Secretary Robert Gates, favor a gradual U.S. increase of 30,000-plus troops, officials said. The deployment of thousands of additional U.S. trainers could boost that number to 35,000 or more, but estimates vary widely. Other White House advisers have been pushing behind the scenes to keep the number closer to the 20,000-range with a focus on training Afghan security forces, officials said. Pentagon officials said new units could begin arriving within a few months but logistics on the ground would make it difficult to send large brigades in quick succession. The antiquated infrastructure there is more of a hurdle to deploying forces than it was in Iraq where a U.S. troop buildup helped reduce violence. “The country lacks staging bases, air fields, roads. It’s just harder to get people and things going,” one U.S. military official said. The official said the Pentagon’s “thumbnail” estimate was that U.S. and NATO forces in Afghanistan can “absorb” about one additional brigade, plus so-called “enablers,” per quarter, but that the speed of the deployments could vary depending on factors like the types of units involved. Enablers include transport support, mine detection and clearance units and medical staff. The U.S. military has been stretched thin by wars in Iraq and Afghanistan, but the Pentagon has told the White House that enough forces are available to begin the Afghan buildup, playing down any link to a planned U.S. drawdown in Iraq.  Continued… See original here: US Afghan buildup may involve brigade per quarter (at Reuters)

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(For more on Afghanistan, click on [nAFPAK]) * Holds final meeting with top advisers * Obama has information he needs to decide on troops -aide By Steve Holland WASHINGTON, Nov 24 (Reuters) – President Barack Obama held a final strategy session with top aides on whether to send more U.S. troops to Afghanistan and plans to announce his decision within days, the White House said. The session in the Situation Room on Monday with officials including Vice President Joe Biden, Secretary of State Hillary Clinton and Defense Secretary Robert Gates marked the ninth such meeting. Obama is nearing a decision on whether to add as many as 40,000 troops to an eight-year-old war that began after the Sept. 11 attacks and has begun to try the patience of Americans. “After completing a rigorous final meeting, President Obama has the information he wants and needs to make his decision and he will announce that decision within days,” White House spokesman Robert Gibbs said in an email. Obama’s announcement is widely expected to come before a NATO meeting on Dec. 7 in Europe in which alliance members could agree to send thousands of additional trainers. There are about 110,000 foreign troops, including 68,000 U.S. soldiers, in Afghanistan fighting Taliban insurgents. Obama has been reviewing war strategy in Afghanistan for the past two months after Army General Stanley McChrystal, the top U.S. commander there, said in a report that conditions were deteriorating and 40,000 additional troops were needed as the minimum to quell the insurgency. AMERICANS DIVIDED Obama’s top national security advisers, including Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, are believed to have rallied around options that would send 30,000 to 40,000 more troops and trainers. Obama faces conflicting pressures on Afghanistan. Americans are divided about whether to send more troops. Republicans in Congress insist more troops are needed to prevent a Taliban resurgence, while his fellow Democrats in general would like to see the United States find a way out of Afghanistan. Two veteran Democratic lawmakers have called for imposing a “war tax” to pay for a troop increase. The two are David Obey, chairman of the House of Representatives Appropriations Committee, and Carl Levin, chairman of the Senate Armed Services Committee.  Continued… Continued here: Obama to announce Afghanistan decision within days (at Reuters)

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(For more on Afghanistan, click on [ID:nAFPAK]) * Ninth such meeting gets under way * Some Democrats want war tax (Updates with meeting start, announcement likely next week) By Steve Holland WASHINGTON, Nov 23 (Reuters) – President Barack Obama began a meeting on Monday night with top advisers on Afghanistan as he closes in on a decision about whether to send thousands more U.S. troops to confront a growing insurgency. The war council with Vice President Joe Biden, Secretary of State Hillary Clinton, Defense Secretary Robert Gates and other officials got under way at 8:13 p.m. (0113 GMT on Tuesday) in the White House Situation Room. It is the ninth such meeting as Obama nears a decision on whether to add as many as 40,000 troops to an eight-year-old war that began after the Sept. 11 attacks and that has begun to try the patience of Americans. U.S. officials and Western diplomats said they expected Obama’s announcement next week, before a NATO meeting on Dec. 7 in Europe in which alliance members could agree to send thousands of additional trainers. The White House has given no firm date for the news, but “the first possible time would be sometime next week,” presidential spokesman Robert Gibbs said. There are about 110,000 foreign troops, including 68,000 U.S. soldiers, in Afghanistan fighting Taliban insurgents. The president has been reviewing war strategy in Afghanistan for the past two months after Army General Stanley McChrystal, the top U.S. commander there, said in a report that conditions were deteriorating and 40,000 additional troops were needed as the minimum to quell the insurgency. AMERICANS DIVIDED Obama’s top national security advisers, including Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, are believed to have rallied around options that would send 30,000 to 40,000 more troops and trainers. Obama faces conflicting pressures on Afghanistan. Americans are divided about whether to send more troops. Republicans in Congress insist more troops are needed to prevent a Taliban resurgence, while his own Democrats in general would like to see the United States find a way out of Afghanistan. Two veteran Democratic lawmakers have called for imposing a “war tax” to pay for a troop increase. The two were David Obey, chairman of the House of Representatives Appropriations Committee, and Carl Levin, chairman of the Senate Armed Services Committee. A congressional aide said that under the idea, families earning under $150,000 a year would be taxed at 1 percent of their tax rates. The tax would be higher for those in the $150,000-to-$250,000 range and those making $250,000 or more.  Continued… Read the original: Obama meets with advisers on Afghanistan (at Reuters)

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»   VIEW ALL POSTS Nov 24 2009   12:28AM GMT Posted by: Marcia Savage The Zeus Trojan continues to find new ways to trick users.  Recent spam campaigns trying to spread the malware have pretended to be messages from the FDIC, the IRS, and more recently , the Electronic Payments Association that oversees the Automated Clearing House (ACH) network (NACHA). On Monday, Zeus was turning up in a new spam surge, this time pretending to be messages from the U.S. Social Security Administration. The fraudulent emails try to trick recipients with warnings that their Social Security statement may contain errors. A Symantec researcher wrote in a blog post that the subject of the mail will be something like “review annual Social Security statement“ and the body of the message warns of a potential identity theft risk and asks recipients to review an annual statement by clicking on a link. The link opens to a fake Social Security Administration website with a box for the user to input a Social Security number.  If a number is provided, the page tells the user that their statement can be downloaded by clicking on a button; clicking on the button downloads a variant of the Zeus, or Zbot malware, according to Symantec. Zeus has been wreaking havoc in recent months by stealing online banking credentials, mainly of small and midsize businesses, which have been victimized by a surge in fraudulent ACH transactions. UK police last week announced the arrests of two people in connection with the malware, but didn’t provide details on the suspects’ involvement. Read more: New Zeus spam poses as Social Security statements

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By Alan Zibel, The Associated Press WASHINGTON – First-time buyers taking advantage of a special U.S. tax credit gave sales of existing homes their biggest surge in a decade, raising hopes for a turnaround in the housing market and pleasing Wall Street. While rising foreclosures and disappearing jobs still threaten the comeback, there are now bidding wars for houses in some cities, and home sales are nearly 36 per cent above their low point in January. Analysts said the gains in October mainly reflected the tax credit of up to US$8,000 for new homeowners, which was due to expire this month before Congress extended it until spring – and expanded it to more buyers. The sales figures Monday from the National Association of Realtors provided the juice for a rally on Wall Street. The Dow Jones industrial average, also lifted by a weak U.S. dollar, rose more than 130 points. Analysts said the extension of the homebuyer tax credit should help sustain the housing market next year. Yet the overall economy will probably benefit only slightly from higher home sales. That’s because there are still too many factors weighing down the recovery. Foreclosures are rising. Job creation is slow. People remain reluctant to spend. And construction of new homes – as opposed to sales of existing ones – plunged in October. The biggest contribution the housing industry makes to economic growth is from home building. Commissions and fees generated from home sales also help, but far less than construction. “I wouldn’t want to bet the house on housing, really, in terms of the strength of the U.S. economy going forward,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.” The Realtors group said resales rose 10.1 per cent to a seasonally adjusted annual rate of 6.1 million in October, from 5.5 million in September. It was the biggest monthly increase in a decade and far better than what economists expected, according to Thomson Reuters. At the current sales pace, there’s a modest seven-month supply of previously occupied homes on the market. Sales are still running 16 per cent below their peak in 2005, but real estate agents say the pace has definitely picked up. “People who are looking, they are serious,” said Harrison Tulloss, an agent with ZipRealty Inc. in the Raleigh-Durham area of North Carolina. “They’re not riding around with me if they need to go shopping or buy a turkey.” Joey Wilson and her husband made unsuccessful offers on 20 Las Vegas homes starting in midsummer before they closed on a four-bedroom, $136,000 home this month. “It’s insane,” said Wilson, who relocated from Kentucky. “I’ve never seen a market like this before.” The housing market is being driven by reduced prices and federal programs to lower mortgage rates and bring more buyers into the market. The median sales price was $173,100 in October, down seven per cent from a year earlier and 25 per cent below the peak. Many experts predict prices will hit a new low next spring, perhaps falling five to 10 per cent further as more foreclosures spill into the market. The government has tried to counter that trend by offering the tax credit and keeping mortgage rates low. Without the a deadline looming for the tax credit, home sales are likely to fall over the winter as buyers hibernate for a few months. Analysts say the new deadline – buyers have to sign a purchase agreement by April 30 – means sales will surge next spring, before dropping back again later in 2010. What happens after that is anyone’s guess. “When we do kick those crutches out from under the housing market, will it be able to stand on its own?” said Mark Fleming, chief economist with First American CoreLogic. “It’s really hard to tell.” The government has also helped the housing market by acting to lower mortgage rates. The Federal Reserve, for example, has pumped $1.25 trillion into mortgage-backed securities to try to lower mortgage rates and loosen credit. That program is scheduled to end by March. If rates go up without the government help, homes would be less affordable, which could dampen demand. A disquieting report last week from the Mortgage Bankers Association said more fixed-rate home loans made to people with good credit were sinking into foreclosure as layoffs go on. A record-high 14 per cent of homeowners with a mortgage were either behind on payments or in foreclosure at the end of September. In areas where foreclosures have hit hard, housing remains depressed, despite low prices, low mortgage rates and the tax credit. Yet for homebuyers with cash and access to credit, falling prices and low mortgage rates have proved irresistible. The Realtors’ report on October home sales reflects offers made before buyers knew the credit would be extended. In Raleigh, N.C., first-time buyer Louise Brunson snapped up a three-bedroom town house for $235,000. She and her husband had planned to buy a year and a half ago but decided to wait until prices fell further. The tax credit was a big plus, too. “We suspected that it might be extended,” said Brunson, a paralegal. “But we did want to go ahead and get it done to be on the safe side.” – Associated Press writers Alex Veiga, Adrian Sainz and David Twiddy contributed to this report. Follow this link: U.S. home sales surge in October as buyers rush to take advantage of tax credit

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(Adds more Gibbs comment, background) WASHINGTON, Nov 23 (Reuters) – The White House said on Monday it was reviewing options to spur economic activity and job creation, but stressed any action would be taken in the context of the fiscal challenges facing the country. “We’re going to work with members of Congress to try to come up with sensible and reasonable measures that might spur economic growth. I know those conversations continue,” White House press spokesman Robert Gibbs told a daily news briefing. “Before we can create jobs we have to have economic growth that is on the positive side of the ledger,” Gibbs said, noting that the economy only began growing again in the third quarter, after suffering the worst recession in 70 years. President Barack Obama’s public approval rating has been hurt by soaring U.S. unemployment which, at 10.2 percent, now stands at a generation-high and could yet get worse. Obama will host a jobs forum on Dec. 3 to brainstorm what else can be done to boost employment, but said last week that he was wary of adding to the country’s record deficit from fear this may trigger a double-dip recession. (Reporting by Alister Bull ; Editing by Vicki Allen ) ((+1-202-354-5820, email: alister.bull@thomsonreuters.com)) © Thomson Reuters 2009 All rights reserved Link: UPDATE – W.House: reviewing ’sensible’ options to spur jobs (at Reuters)

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A comparison of the health care bills before Congress: The Senate Democratic bill (Patient Protection and Affordable Care Act): WHO’S COVERED: About 94 percent of legal residents under age 65 — compared with 83 percent now. Government subsidies to help buy coverage start in 2014. Illegal immigrants would not receive assistance. COST: Coverage provisions cost $848 billion over 10 years. HOW IT’S PAID FOR: Fees on insurance companies, drugmakers, medical device manufacturers. Medicare payroll tax increased to 1.95 percent on income over $200,000 a year for individuals; $250,000 for couples. New 5 percent tax on elective cosmetic surgery. Cuts to Medicare and Medicaid. Excise tax on insurance companies, keyed to premiums paid on health care plans costing more than $8,500 annually for individuals and $23,000 for families. Fees on employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage. REQUIREMENTS FOR INDIVIDUALS: Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. Those who are obligated to buy coverage and refuse to do so would pay a fine starting at $95 in 2014 and rising to $750. REQUIREMENTS FOR EMPLOYERS: Not required to offer coverage, but medium and large companies would pay a fee if the government ends up subsidizing employees’ coverage. SUBSIDIES: Tax credits for individuals and families likely making up to 400 percent of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers. BENEFITS PACKAGE: All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage: The least generous would pay an estimated 60 percent of health care costs per year; the most generous would cover an estimated 90 percent. INSURANCE INDUSTRY RESTRICTIONS: Starting in 2014: no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age and family size. Starting upon enactment of legislation: children up to age 26 can stay on parents insurance; no lifetime limits on coverage. GOVERNMENT-RUN PLAN: A new federal insurance plan would be offered to compete against private carriers. The government would negotiate — not dictate — payment rates for medical providers. Unlike the House bill, states could opt out of the plan. It’s not clear the proposal commands enough votes to survive, and it could be replaced by a standby system pushed by moderates that would not go into effect until it was clear individual states were experiencing a lack of competition among private companies. HOW YOU CHOOSE YOUR HEALTH INSURANCE: Self-employed people, uninsured individuals and small businesses could pick a plan offered through new state-based purchasing pools. Employees would be generally encouraged to keep their work-provided coverage. DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson’s and other deadly diseases. Drug companies contribute $80 billion over 10 years with the majority of the money used to limit the prescription coverage gap in Medicare. CHANGES TO MEDICAID: Income eligibility levels likely to be standardized to 133 percent of poverty, which is $29,327 a year for a family of four, for all parents, children and pregnant women. Federal government would pick up the full cost of the expansion during the first three years. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid. LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes. ANTITRUST: Amendment expected to be offered on the Senate floor to strip the health insurance industry of its antitrust exemption. The House bill (Affordable Health Care for America Act): WHO’S COVERED: About 96 percent of legal residents under age 65 — compared with 83 percent now. Government subsidies to help buy coverage start in 2013. About one-third of the remaining 18 million people under age 65 left uninsured would be illegal immigrants. COST: The Congressional Budget Office says the bill’s cost of expanding insurance coverage over 10 years is $1.055 trillion. The net cost is $894 billion, factoring in penalties on individuals and employers who don’t comply with new requirements. That’s under President Barack Obama’s $900 billion goal. However, those figures leave out a variety of new costs in the bill, including increased prescription drug coverage for seniors under Medicare, so the measure may be around $1.2 trillion. HOW IT’S PAID FOR: $460 billion over the next decade from new income taxes on single people making more than $500,000 a year and couples making more than $1 million. The original House bill taxed individuals making $280,000 a year and couples making more than $350,000, but the threshold was increased in response to lawmakers’ concerns that the taxes would hit too many people and small businesses. There are also more than $400 billion in cuts to Medicare and Medicaid; a new $20 billion fee on medical device makers; $13 billion from limiting contributions to flexible spending accounts; sizable penalties paid by individuals and employers who don’t obtain coverage; and a mix of other corporate taxes and fees. REQUIREMENTS FOR INDIVIDUALS: Individuals must have insurance, enforced through a tax penalty of 2.5 percent of income. People can apply for hardship waivers if coverage is unaffordable. REQUIREMENTS FOR EMPLOYERS: Employers must provide insurance to their employees or pay a penalty of 8 percent of payroll. Companies with payrolls under $500,000 annually are exempt — a change from the original $250,000 level to accommodate concerns of moderate Democrats — and the penalty is phased in for companies with payrolls between $500,000 and $750,000. Small businesses — those with 10 or fewer workers — get tax credits to help them provide coverage. SUBSIDIES: Individuals and families with annual income up to 400 percent of poverty level, or $88,000 for a family of four, would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013. HOW YOU CHOOSE YOUR HEALTH INSURANCE: Beginning in 2013 through a new Health Insurance Exchange open to individuals and, initially, small employers. It could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules. BENEFITS PACKAGE: A committee would recommend a so-called essential benefits package including preventive services. Out-of pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange. INSURANCE INDUSTRY RESTRICTIONS: Starting in 2013, no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age. GOVERNMENT-RUN PLAN: A new public plan available through the insurance exchanges would be set up and run by the secretary of Health and Human Services. Democrats originally designed the plan to pay Medicare rates plus 5 percent to doctors. But the final version — preferred by moderate lawmakers — would let the HHS secretary negotiate rates with providers. CHANGES TO MEDICAID: The federal-state insurance program for the poor would be expanded to cover all individuals under age 65 with incomes up to 150 percent of the federal poverty level, which is $33,075 per year for a family of four. The federal government would pick up the full cost of the expansion in 2013 and 2014; thereafter the federal government would pay 91 percent and states would pay 9 percent. DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson’s and other deadly diseases. Phases out the gap in Medicare prescription drug coverage by 2019. Requires the HHS secretary to negotiate drug prices on behalf of Medicare beneficiaries. LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes. ANTITRUST: Would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price-fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative. Visit link: Comparison of Democratic health care bills (AP)

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WASHINGTON (AP) — Democratic senators pressed ahead Saturday toward a crucial first vote on President Barack Obama’s health care overhaul, a test of party unity in the face of solid Republican opposition. AP – Senate Majority Whip Richard Durbin of Ill., accompanied by, Sen. Jack Reed, D-R.I., left, and Sen. Robert Menendez, … “There’s much we need to do to make sure we have a health care system that works for all people, not just a few,” said Sen. Michael Bennet, D-Colo., during debate in a rare weekend session. Democratic leaders are optimistic of success, but they need every Democrat and both independents to vote “yes,” and two moderates remained uncommitted ahead of the roll call, which is expected around 8 p.m. EST. The vote will determine whether debate can go forward on Majority Leader Harry Reid’s 2,074-page bill to dramatically remake the U.S. health care system over the next decade. Most everyone would be required to purchase insurance under Reid’s legislation, and billions in new taxes would be levied on insurers and high-income Americans to help extend coverage to 30 million uninsured. Insurance companies would no longer be allowed to deny coverage to people with medical conditions or drop coverage when someone gets sick. Sen. Judd Gregg, R-N.H., accused Democrats of playing the “ultimate shell game” with the cost of the bill, put at $848 billion over 10 years for coverage only by the Congressional Budget Office. Gregg said Democrats delayed most of the spending in the bill by four or five years. “The number is so dishonestly arrived at,” he said. The two Democratic holdouts are Sens. Blanche Lincoln of Arkansas and Mary Landrieu of Louisiana. A third centrist, Ben Nelson of Nebraska, announced Friday that he’d be supporting his party on the test vote, while cautioning that it didn’t mean he’d be with them on the final vote. “It is not for or against the new Senate health care bill,” Nelson said. “It is only to begin debate and an opportunity to make improvements. If you don’t like a bill, why block your own opportunity to amend it?” If that same reasoning holds with Lincoln and Landrieu, Reid, D-Nev., will have the 60 votes he needs to prevail in the 100-seat Senate. The 40 Republicans are unanimously opposed. Landrieu has made comments suggesting she’ll support the move to debate, but Lincoln, who faces a difficult re-election next year, carefully avoided taking any public position Friday. Republicans used their weekly radio and Internet address to slam the legislation, calling it a government takeover of health care that would increase taxes and raise medical costs. “This 2,000-page bill will drive up the cost of health care insurance and medical care, not down,” Sen. Mike Crapo, R-Idaho, said in the address. “This is not true health care reform, and it is not what the American people want. This bill will result in higher premiums and higher health care costs for Americans — period.” The White House issued a statement late Friday praising the Senate measure. The action in the Senate comes two weeks after the House approved a health overhaul bill of its own on a 220-215 vote. After the vote Saturday night, senators will leave for a Thanksgiving recess. Upon their return, assuming Democrats prevail on the vote, they will launch into weeks or more of unpredictable debate on the health care bill, with numerous amendments expected from both sides of the aisle and more 60-vote hurdles along the way. Senate leaders hope to pass their bill by the end of the year. If that happens, January would bring work to reconcile the House and Senate versions before a final package could land on Obama’s desk. The bills have many similarities, including the new requirements on insurers and the creation of new purchasing marketplaces called exchanges where self-employed individuals and small businesses could go to shop for and compare coverage plans. One option in the exchanges would be a new government-offered plan, something that’s opposed by private insurers and business groups. Differences include requirements for employers. The House bill would require medium and large businesses to cover their employees, while the Senate bill would not require them to offer coverage but would make them pay a fee if the government ends up subsidizing employees’ coverage. Another difference is in how they’re paid for. The Senate bill includes a tax on high-value insurance policies that’s not part of the House bill, while the House would levy a new income tax on upper-income Americans that’s not in the Senate measure. The Senate measure also raises the Medicare payroll tax on income above $200,000 annually for individuals and $250,000 for couples. Both bills rely on more than $400 billion in cuts to Medicare. GOP address: http://www.youtube.com/user/gopweeklyaddress Read the original post: Health care bill faces a crucial Senate vote (AP)

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WASHINGTON (AP) — A crucial first Senate vote on President Barack Obama’s health care overhaul in a rare Saturday night session looms as a test of Democratic unity and the president’s prestige. AP – Senate Majority Whip Richard Durbin of Ill., right, followed by Sen. Jack Reed, D-R.I., leave a health care … Democratic leaders are optimistic of success, but they need every Democrat and both independents to vote “yes,” and two moderates remained uncommitted ahead of the roll call, which is expected around 8 p.m. The vote will determine whether debate can go forward on Majority Leader Harry Reid’s 2,074-page bill to dramatically remake the U.S. health care system over the next decade. Most everyone would be required to purchase insurance under Reid’s legislation, and billions in new taxes would be levied on insurers and high-income Americans to help extend coverage to 30 million uninsured. Insurance companies would no longer be allowed to deny coverage to people with medical conditions or drop coverage when someone gets sick. The two holdouts are Sens. Blanche Lincoln of Arkansas and Mary Landrieu of Louisiana. A third centrist, Ben Nelson of Nebraska, announced Friday that he’d be supporting his party on the test vote, while cautioning that it didn’t mean he’d be with them on the final vote. “It is not for or against the new Senate health care bill,” Nelson said. “It is only to begin debate and an opportunity to make improvements. If you don’t like a bill, why block your own opportunity to amend it?” If that same reasoning holds with Lincoln and Landrieu, Reid, D-Nev., will have the 60 votes he needs to prevail in the 100-seat Senate. The 40 Republicans are unanimously opposed. Landrieu has made comments suggesting she’ll support the move to debate, but Lincoln, who faces a difficult re-election next year, carefully avoided taking any public position Friday. Republicans used their weekly radio and Internet address to slam the legislation, calling it a government takeover of health care that would increase taxes and raise medical costs. “This 2,000-page bill will drive up the cost of health care insurance and medical care, not down,” Sen. Mike Crapo, R-Idaho, said in the address. “This is not true health care reform, and it is not what the American people want. This bill will result in higher premiums and higher health care costs for Americans — period.” Democrats said their legislation could make historic and necessary improvements in the country’s social safety net. “Prices of health care are marching relentlessly upwards, and so too many people don’t have coverage,” said Sen. Byron Dorgan, D-N.D. “The purpose of all of this is to try to get a handle on it somehow.” The White House issued a statement late Friday praising the Senate measure. “This bill provides the necessary health reforms that the administration seeks — affordable, quality care within reach for the tens of millions of Americans who do not have it today, and stability and security for the hundreds of millions who do,” the statement said. The action in the Senate comes two weeks after the House approved a health overhaul bill of its own on a 220-215 vote. After the vote Saturday night, senators will leave for a Thanksgiving recess. Upon their return, assuming Democrats prevail on the vote, they will launch into weeks or more of unpredictable debate on the health care bill, with numerous amendments expected from both sides of the aisle and more 60-vote hurdles along the way. Senate leaders hope to pass their bill by the end of the year. If that happens, January would bring work to reconcile the House and Senate versions before a final package could land on Obama’s desk. The bills have many similarities, including the new requirements on insurers and the creation of new purchasing marketplaces called exchanges where self-employed individuals and small businesses could go to shop for and compare coverage plans. One option in the exchanges would be a new government-offered plan, something that’s opposed by private insurers and business groups. Differences include requirements for employers. The House bill would require medium and large businesses to cover their employees, while the Senate bill would not require them to offer coverage but would make them pay a fee if the government ends up subsidizing employees’ coverage. Another difference is in how they’re paid for. The Senate bill includes a tax on high-value insurance policies that’s not part of the House bill, while the House would levy a new income tax on upper-income Americans that’s not in the Senate measure. The Senate measure also raises the Medicare payroll tax on income above $200,000 annually for individuals and $250,000 for couples. Both bills rely on more than $400 billion in cuts to Medicare. The Senate bill was written by Reid in private negotiations with White House officials, combining elements of two committee-passed bills and making additional changes with an eye to getting the necessary 60 votes. Along the way, Reid sweetened the pot for individual senators, adding federal funds for Louisiana and agreeing to support an amendment written by Sen. Ron Wyden, D-Ore., that would expand eligibility for the purchasing exchanges. GOP address: http://www.youtube.com/user/gopweeklyaddress See the article here: 1st Senate vote looms on health legislation (AP)

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WASHINGTON, Nov 21 (Reuters) – President Barack Obama on Saturday urged Americans to show patience over the economy and argued that his just-concluded Asia trip was critical for U.S. exports, countering criticism he had returned empty-handed. With unemployment at a generation high of 10.2 percent and once-lofty popularity ratings down, Obama said a December White House forum will leave no stone unturned in the hunt for jobs. “Even though it will take time, I can promise you this: we are moving in the right direction; that the steps we are taking are helping,” Obama said in his weekly address, amid signs that the public is getting impatient for results. A Gallup poll on Friday showed Obama’s job approval rating had dropped to 49 percent, the first time he has fallen below 50 percent in this survey, as Americans express dissatisfaction with his handling of the economy and other issues. Obama’s remarks on the economy were his first in public since returning to Washington after an 8-day Asian tour where critics said he had failed to win significant concessions on trade or currency manipulation from partners like China. But Obama said that progress had been made with Russia and China in sending a unified message to Iran and North Korea about giving up nuclear weapons “or face the consequences,” while also maintaining pressure to stimulate growth. “Above all, I spoke with leaders in every nation I visited about what we can do to sustain this economic recovery and bring back jobs and prosperity for our people,” he said. U.S. growth jumped in the third quarter, ending the longest economic slump the country has suffered in 70 years, but this has not yet translated into a faster pace of hiring. Obama’s Dec. 3 jobs forum will gather leaders from business and labor to review how to boost credit to small business, encourage firms to hire and boost green jobs and other ideas. But the White House has already said it will not be about a second stimulus package, potentially limiting how much of a dent the initiative will be able to make in the 15.7 million Americans who were drawing unemployment aid in October. Obama signaled that any measures hammered out during the jobs conference would have to be fiscally responsible. “It is important that we do not make any ill-considered decisions — even with the best of intentions — particularly at a time when our resources are so limited. “But it is just as important that we are open to any demonstrably good idea to supplement the steps we’ve already taken to put America back to work. That’s what I hope to achieve in this forum,” he said. (Additional reporting by Steve Holland in Washington) (Reporting by Alister Bull ; Editing by Sandra Maler ) See the original post here: Obama asks Americans for patience on economy (at Reuters)

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WASHINGTON (AP) — Republicans are seizing on this week’s recommendations for fewer Pap smears and mammograms to fuel concern about government-rationed medical care — and to try to chip away support by women for President Barack Obama’s proposed health care overhaul. AP – Senate Minority Leader Sen. Mitch McConnell of Ky., center, gestures during a health care reform news conference on … “This is how rationing starts,” declared Jon Kyl of Arizona, the party’s second-in-command in the Senate, during a news conference. “This is what we’re going to expect in the future.” Said Sen. Lisa Murkowski of Alaska: “Those recommendations will be used by the insurance companies as they make a determination as to what they’re going to cover.” Democrats said the recommendations had nothing to do with the big health care bill. And besides, they said, the recommendations, especially one that women start mammograms at 50 rather than 40, were deeply flawed. “It’s entirely possible that this panel got it wrong, and I think they did,” said Illinois Sen. Dick Durbin, the vote-counting Democratic whip. Fears that the government is going to run health care have not come up during negotiations for Saturday’s crucial procedural vote, Durbin added. But the recommendations have given Republicans something new to talk about in making their case that the 2,074-page bill amounts to government-rationed health care. The timing of the release of both sets of guidelines this week, though apparently coincidental, couldn’t have been worse for majority Democrats. The bill faces its first survival test Saturday, when it must win 60 votes to advance to the next step. In recent days, Democratic leaders have struggled to placate three holdouts from their caucus but appeared Friday night to be winning them over. One Democrat wasn’t taking chances on whether the recommendations had jeopardized access to affordable mammograms. Sen. Barbara Mikulski, D-Md., said she would introduce an amendment that would limit the costs of the breast cancer tests for women 40 and older. “Otherwise, insurance companies may use this new recommendation as yet another reason to deny women coverage for mammograms,” Mikulski said. That was unlikely, the White House said. “Under health insurance reform, recommendations like these cannot be used to dictate coverage,” said presidential spokesman Reid Cherlin. The guidelines themselves stress that they’re general recommendations for routine screening, not a replacement for the one-on-one health advice that women with various risk factors for breast or cervical cancer get from their doctors in choosing how often to get a Pap or mammogram. “So, what does this mean if you are a woman in your 40s? You should talk to your doctor and make an informed decision about whether a mammography is right for you based on your family history, general health and personal values,” said Dr. Diana Petitti, vice chair of the task force that made the mammogram recommendations. Still, the new guidelines generated enough confusion and raised enough questions to force proponents of the health care overhaul on the defensive. Health and Human Services Secretary Kathleen Sebelius has said the mammogram recommendation “does not determine what services are covered by the federal government.” Senate Finance Committee Chairman Max Baucus said the Senate health care bill he authored “doesn’t do one single thing to change current law related to the way coverage decisions are made.” “Those decisions will be based only on science and thorough review, just as they are today,” said Baucus, D-Mont. “Research comparing the effectiveness of different treatments for different patients cannot be used for rationing care.” “We’re not rationing anything,” said Rep. Lynn Woolsey, D-Calif. “It’s a decision between a woman and her doctors.” The specter of the government making deeply personal medical decisions for millions of Americans — in this case, women — has been propelled in part by the Republican drive to stymie the Democratic bill. The legislation would require most people to buy health insurance, and the House version would create a government plan that would compete with those offered by private insurers. This week’s recommendations from two different groups called for less-frequent cancer tests for women. On Monday, a government-appointed but independent panel of doctors and scientists said women generally should begin routine mammograms in their 50s, rather than their 40s. Then on Friday, the American College of Obstetricians and Gynecologists said that most women in their 20s can have a Pap test every two years — instead of annually — to catch slow-growing cervical cancer. Neither the task force, which provides advice to government officials who may or may not act on it, nor the ACOG set federal policy. The ACOG’s recommendations are aimed at its own members. The Democratic bill would set up an independent institute to conduct studies. It would not authorize the health secretary to deny coverage solely based on the institute’s research. There are other safeguards. All states except Utah make insurers cover mammograms, and 20 states require coverage that starts at age 40, according to 2007 data compiled by the Washington-based National Women’s Law Center. Associated Press writers Stephanie Nano in New York and Lauran Neergaard in Washington contributed to this report. See original here: GOP: Health test recommendations could affect care (AP)

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WASHINGTON (AP) — Suitably opaque, Section 2006 takes up only a few dozen lines in a sweeping health care bill that runs to 2,074 pages and mentions neither Sen. Mary Landrieu nor her state of Louisiana. AP – Sen. Mary Landrieu, D-La., walks in the Capitol before heading into a Democratic caucus on health care reform … But the section’s purpose is indisputable: to deliver $100 million or more in federal funds to the state. And in the process clear the way for one of three moderate Democratic fence-sitters — Ben Nelson of Nebraska and Blanche Lincoln of Arkansas are the others — to help propel the legislation past its initial hurdle in a crucial Saturday vote. Nelson, Landrieu and Lincoln emerged several days ago as the last public holdouts among 58 Democrats and two independents whose votes Majority Leader Harry Reid and the White House must have to overcome the Republicans’ attempt to strangle the bill before serious debate can begin. Each has moved carefully with an eye on home-state voters. And inside the Senate, each has taken advantage of the political leverage newly available. Alone among the three, Nelson issued a statement Friday ending any lingering public suspense about his intentions. “The Senate should start trying to fix a health care system that costs too much and delivers too little for Nebraskans,” he said, adding his decision should not be seen as an indication of how he will vote on the legislation itself. Nelson had been publicly signaling his intentions for more than a week, and his words presumably came as no surprise to Reid or the White House, which issued a statement Friday saying the bill “provides the necessary health reforms that the administration seeks.” This sort of political minuet can be delicate, as shown when the Senate’s second-ranking Democrat, Dick Durbin of Illinois, said earlier on Friday that Lincoln had already confided to Reid how she planned to vote. Republicans, eager to scuttle the bill — and defeat Lincoln in 2010 — instantly accused the two-term senator of telling Democratic party leaders before informing her own constituents in Arkansas. “No other senator speaks for Senator Lincoln. She is still reviewing the bill,” declared the senator’s spokeswoman, Leah Vest DiPietro, adding her boss had not yet made up her mind. For his part, Durbin sought to quickly close the loop with a statement saying he had been unclear and misinterpreted. As for Nelson, several officials, speaking on condition of anonymity, said he had insisted Reid omit from the bill any change in the insurance industry’s protection from federal antitrust law. The House version of the legislation would expose the industry to scrutiny by both the Justice Department’s antitrust lawyers and the Federal Trade Commission. Reid, who spoke out strongly in favor of the change in antitrust treatment earlier in the fall, left it out of the bill he drafted over several weeks and unveiled on Wednesday. Lincoln has been the most close-mouthed about her intention. As a committee chairman, she is the most powerful of the group. As the only one of the three seeking re-election next year, she is also the most politically vulnerable. In public, she has asked that the bill be available for 72 hours before the vote occurs. In private, her demands have been more substantive, according to officials who did not describe them. She is virtually certain to be criticized no matter what her vote. After the House cleared its version of the legislation this month, a conservative group began airing commercials criticizing Rep. Vic Snyder, D-Ark., for voting in its favor. At the same time, MoveOn.org, a liberal organization, slammed another one of the state’s lawmakers, Rep. Mike Ross, for opposing it. A hint: At home, Lincoln has suggested her vote will be influenced by former President Bill Clinton, who was Arkansas governor for 12 years before winning the White House. Clinton recently met privately with Senate Democrats, telling them that passing an imperfect bill was better than nothing. “We don’t ever go to Washington with the idea that we’re going to create a work of art,” Lincoln said afterward. “It’s got to be a work in progress.” She and the other moderates face pressure from business groups opposed to the legislation. In a statement Friday the Business Roundtable, which represents big company CEOs, said the Senate bill “will not effect the needed changes to measurably improve the American health care system.” Democrats and the White House had seized on a report by the same group last week concluding that some of the provisions under consideration by Congress had the potential to tame runaway medical inflation. Of the three centrists, Landrieu has been the clearest about her intentions, and her interests ranged beyond health insurance to the oysters for which Louisiana is famous. When the Food and Drug Administration proposed banning sales of raw oysters from the Gulf of Mexico during warm weather months, Landrieu and others objected. A week ago, the agency thought better of the idea and shelved the plan in favor of further study. “I’m really thankful that they listened,” said Landrieu, who had met with FDA Commissioner Margaret Hamburg to discuss the issue. Over recent weeks, Landrieu has issued a string of statements outlining the areas she wanted addressed for the benefit of her constituents — issues that could be dealt with only after health legislation made it to the Senate floor. After meeting with Reid almost a month ago, she mentioned the “unique challenges Louisiana is facing in terms of Medicaid.” In a Senate speech and statement, she noted that Louisiana has the highest breast cancer death rate in the country and the lowest female life expectancy of any state. And she said, “Unless something is done, annual health care costs for small firms over the next 10 years are expected to more than double to reach $339 billion in 2018.” Landrieu can point to provisions in the legislation that are designed to attack all three problems. They include Section 2006. Reading it is of little assistance. “Special adjustment to FMAP Determination for Certain States recovering from a Major Disaster” is the title, and about two pages of similarly indecipherable legalese follows. According to the Congressional Budget Office, it will send an additional $100 million to Louisiana to help it cover costs for Medicaid, the federal-state health care program for the poor. Should Landrieu decide to side with Republicans this weekend, she would also be voting to deny her state those funds. Associated Press writer Andrew DeMillo in Little Rock, Ark., contributed to this story. Originally posted here: Moderate Dems pivotal in Saturday health care vote (AP)

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DIMOCK, Pa. (AP) — Pat Farnelli says there’s something in the water at her house. The last time she drank it, she says she vomited four times. It’s made her children sick, too. AP – Patricia Farnielli holds a sample of water during a news conference in Dimock, Pa. on Friday, Nov. 20, … {”s” : “cog”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} Like her neighbors in this rural community 15 miles south of the New York border, Farnelli signed a lease with a major natural gas driller to explore a potentially lucrative formation beneath her land. Now Farnelli and others are plaintiffs in a lawsuit that alleges Houston-based Cabot Oil & Gas Corp. polluted their wells with methane gas and other contaminants, destroying the value of their homes and threatening their health. A Cabot spokesman said the lawsuit, filed late Thursday in federal court in Scranton, was without merit. At a news conference Friday to announce the suit, residents described an ordeal that began shortly after Cabot started drilling near their homes. The water that came out of their faucets suddenly became cloudy and discolored, and it smelled and tasted foul. Then, on New Year’s Day, a resident’s water well exploded, prompting a state investigation that found Cabot had allowed combustible gas to escape into the region’s groundwater supplies. “They were never told that this was even a possibility,” said Alan Fuchsberg, an attorney for the plaintiffs. More than a dozen families have filed suit, asking for an environmental cleanup, medical monitoring and money damages in excess of $75,000 each. The state Department of Environmental Protection has determined that 13 wells were polluted, signing a consent decree with Cabot earlier this month in which the company agreed to pay a $120,000 fine, take steps to improve its drilling operations and restore or replace the affected water supplies. Pennsylvania regulators, citing three chemical spills at a single well site in Dimock, in September halted Cabot’s use of a drilling technique that uses liquids to fracture rock and release natural gas. Cabot was permitted to resume hydraulic fracturing or “fracking” several weeks later after DEP said the company took steps to prevent a recurrence. The spills are cited in the residents’ lawsuit. Cabot spokesman Ken Komoroski said Friday that the company has not admitted to polluting residents’ wells. He said Cabot believes the high levels of methane gas that have been detected in the wells might be naturally occurring. He said a company investigation continues. “On one hand, if Cabot caused the methane contamination, certainly it’s understandable why everyone is upset and Cabot will address that situation,” he said. “But I wonder how they’ll feel if at some point it’s proven that Cabot didn’t cause it, that all this anger and frustration has been based on a false premise. And we just don’t know yet.” Cabot is among a slew of exploration companies that are drilling in the Marcellus shale, a layer of rock deep underground that experts say holds vast stores of largely untapped natural gas. The company began approaching homeowners in Dimock in 2006, promising fat royalty checks and a hassle-free, environmentally friendly operation, plaintiffs said. Instead, residents have been exposed to “combustible gases, hazardous chemicals, (and) threats of explosions and fires,” the suit said. Some residents also said the company pressured them into signing leases, telling them that all of their neighbors had already signed and that the company would be removing the gas from underneath their properties anyway. Cabot has drilled at least 62 gas wells within a 9-square-mile tract of land in Dimock, according to the suit. Lawyers say the company has plans for at least 60 more. Craig Sautner, 56, signed a lease with Cabot shortly after buying his house in the spring of 2008 for $150,000. He said his well has since been contaminated by methane gas and unknown pollutants that discolored his water and made it smell like a “fishy pond.” He now gets his water from a large portable tank in the garage. “You’re paying a mortgage on a house that’s completely worthless. I work every day, busting my hump just to pay the mortgage and I can’t even sell my house,” said Sautner, a father of two. Link: Pa. residents sue gas driller over polluted wells (AP)

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WASHINGTON (AP) — With no margin for rebellion, Senate Democrats pushed toward a crucial weekend test vote on their sweeping health care bill Friday, and wavering moderates appeared to be falling in line on President Barack Obama’s signature issue. AP – Senate Majority Whip Richard Durbin of Ill., center, accompanied by Sen. Jack Reed, D-R.I., left, and Sen. Robert … One of three uncommitted centrists, Sen. Ben Nelson of Nebraska, announced he’d vote with his party’s leaders on Saturday’s must-pass procedural measure allowing debate to go forward. Nelson said in a statement that it didn’t mean he’d back the final bill, but that Nebraskans wanted changes to the health care system. “The Senate owes them a full and open debate,” he said. The nearly $1 trillion, 10-year Senate bill would extend coverage to millions of uninsured Americans, bar insurance company practices like denying coverage to people with medical conditions, and require nearly all individuals to purchase insurance. Sixty votes are required to clear Saturday’s vote, meaning that all 58 Senate Democrats and the two independents that generally vote with them will need to hold together. Republicans are united in opposition. “We are not assuming a thing. We are working hard to bring all Democrats together for the 60 votes necessary to proceed to this historic debate,” said Dick Durbin of Illinois, the No. 2 Senate Democrat. “I’m hoping that we can muster our ranks.” Nelson has been one of just three question marks in recent days, along with fellow moderate Democratic Sens. Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas. Landrieu has made comments suggesting she’d allow debate to begin so the spotlight was on Lincoln, who’s facing a difficult re-election next year. Durbin initially said Friday that Lincoln had informed Majority Leader Harry Reid, D-Nev., how she plans to vote. Durbin later issued a statement backtracking, contending that his remarks were “incorrectly interpreted.” A spokeswoman for Lincoln, Leah Vest DiPietro, said no other senator speaks for Lincoln. “She is reviewing the bill before determining how she will vote Saturday,” DiPietro said. Republicans sought to increase the discomfort for the moderate Democrats. Sen. Jon Kyl, R-Ariz., noted at a news conference that national polls show at best a split on the health care bill. “We hope our more moderate colleagues on the Democratic side would respect the wishes of their constituents, rather than do the bidding of Harry Reid,” Kyl said. Ahead of the vote, Republicans and Democrats spent Friday trading barbs on the Senate floor over the 2,074-page bill. Republicans displayed the Senate bill and the 1,990-page House bill — stacked on top of each other to form a tall pile — to criticize the legislation as an unwarranted government intrusion. Democrats defended their plan and blasted Republicans for not producing a bill of their own. “These insurance changes will increase costs for millions of Americans,” said Sen. Mike Enzi, R-Wyo. “The voices of August are still out there, and they know this bill is just more of the same.” Dismissing Republican criticism, Durbin said, “The Republican health care reform bill is zero pages long because it has zero ideas.” The House earlier this month passed its own health overhaul bill on a 220-215 vote. After Saturday’s vote, senators will leave Washington for a weeklong Thanksgiving recess, and return for a lengthy and unpredictable debate on the measure, with dozens of amendments expected from both sides. Both the House and Senate bills would set up new purchasing marketplaces called exchanges where self-employed or uninsured individuals and small businesses could shop for insurance, including the choice of a new government insurance plan. Both pieces of legislation would rely on more than $400 billion in cuts to Medicare over 10 years to pay for them. The Senate would tax high-cost insurance plans, drug companies and elective cosmetic surgery and raise the Medicare payroll tax on income over $200,000 per year for individuals and $250,000 for couples. The House approach would raise income taxes on the highest-earning individuals and households. Associated Press writers Ricardo Alonso-Zaldivar in Washington and Andrew DeMillo in Little Rock, Ark., contributed to this report. See the article here: Senate Dems moving ahead on crucial health vote (AP)

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WASHINGTON (AP) — The Democratic-controlled House voted Thursday to add more than $200 billion to the deficit to prevent steep Medicare payment cuts to doctors, a move Republicans denounced as a political payoff. The measure, approved on a near party-line vote of 243 to 183, is a top priority for the American Medical Association. The GOP contended that Democrats supported the bill to thank the doctors group for backing President Barack Obama’s health care overhaul. “This is nothing more than a repayment to the American Medical Association for endorsing the larger health care bill that was on the floor several weeks ago,” said Rep. Joe Barton, R-Texas. “This is not a question of payoff to anybody,” retorted Majority Leader Steny Hoyer, D-Md. “It’s the right thing to do.” Characterizing the measure as “an important step forward,” the president lauded the legislators “for taking action to protect the care and physician choice that Medicare beneficiaries and TRICARE (military) patients have earned” in a statement issued by the White House late Thursday. Doctors are facing a 21 percent reduction in Medicare reimbursement rates in January unless Congress acts first, the result of a flawed funding-formula that lawmakers have had to step in nearly annually to block in recent years. The bill passed Thursday attempts a permanent fix by restructuring the payments to factor in how much doctors spend on various services, among other changes. Past votes on the issue have been largely bipartisan, but this year the doctor payment issue has become a proxy for the larger health overhaul debate. Only one Republican voted “yes” Thursday, Rep. Michael Burgess of Texas, an obstetrician. Eleven Democrats voted “no.” Despite intense lobbying by the AMA, the doctor payment legislation failed in the Senate last month in an embarrassing defeat, with moderate Democrats concerned about the deficit joining Republicans to bring it down. That leaves its future uncertain even though the rate cuts loom in less than two months. AMA president Dr. James Rohack called on the Senate to act, saying the legislation is “an essential element of comprehensive health reform.” Rohack also dismissed GOP arguments that Democrats were paying off the AMA. “This is about patients — not partisan politics — and we are disappointed in those who are trying to make it a partisan issue,” he said in a statement. AARP also supports the physician payment measure, fearing seniors could lose their doctors if the cuts take effect. The Obama administration has sought a permanent solution to avoid the uncertainty of one-year payment patches, and House Democrats obliged by including it in their 10-year health overhaul bill. But before passing the overhaul bill earlier this month they took out the doctor payment measure, in part to keep the cost of the overall bill low enough to meet Obama’s target price tag. Democratic Rep. Pete Stark of California acknowledged as much during Thursday’s debate. “The reason it was separated, I would have to admit, was purely political,” Stark said. “We had to abide by the president’s request that we not exceed certain costs.” Although House Democrats have vowed not to pass legislation that’s not paid for, the doctor payment bill is one of several items they’ve exempted from that rule, and the Congressional Budget Office says it would increase the deficit by $210 billion over 10 years. Republicans devoted much of Thursday’s debate to complaining about that, but Democrats said it was Republicans’ fault for setting up the problematic payment formula in the first place. As a salve to Democratic fiscal hawks upset that the bill adds so much to the deficit, party leaders added a so-called pay-as-you-go provision aimed at making sure future tax cuts or increases in benefit programs are “paid for” with spending cuts or tax increases elsewhere. Unlike existing pay-go rules, which have been routinely waived, the pay-go measure would be set in law and be enforced with across-the-board spending cuts to several federal benefit programs, including Medicare and farm subsidies. House Speaker Nancy Pelosi, D-Calif., insists the new pay-go law be in effect as a condition of using deficit dollars to pass the Medicare payment fix and a variety of expiring tax cuts. The Senate hasn’t acted on another pay-go bill passed this summer. Associated Press writer Andrew Taylor contributed to this report. Read the r est here: House moves to protect doctors from Medicare cuts (AP)

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WASHINGTON (AP) — Taking aim at Wall Street and the U.S. central bank, an important House committee voted Thursday to assess fees on large financial firms to pay for the failure of their peers and to require a sweeping congressional audit of the secretive Federal Reserve. AP – Treasury Secretary Timothy Geithner testifies on Capitol Hill in Washington, Thursday, Nov. 19, 2009, before the Joint Economic … The votes were the final brush strokes to the House Financial Services Committee’s response to last year’s banking meltdown. In a surprise, however, Democratic committee Chairman Barney Frank delayed final action on a long-awaited regulatory overhaul bill until after next Thursday’s Thanksgiving national holiday. Frank said members of the Congressional Black Caucus requested the delay because they were “troubled by a lack of response to the economic situation.” Lawmakers have been pressing the Obama administration to take further steps to help the unemployed and create more jobs. “This is a critical issue for my constituents,” said committee Democrat Maxine Waters, a member of the black caucus. The votes on fees and on the Fed audit came despite objections from the Obama administration. They illustrated the strong sentiment in Congress to curb the central bank’s power and assure voters that taxpayers will not lose money in future Wall Street failures. If Frank can win final passage in his committee in two weeks, the House could vote on the full overhaul next month. The Senate Banking Committee began its own rewrite of the rules that govern Wall Street on Thursday, but the committee’s top Republican panned the bill proposed by its chairman, Democrat Christopher Dodd. From the sidelines, Treasury Secretary Timothy Geithner prodded Congress to move quickly on the measures. In seeking to have large firms pay upfront fees to dismantle failing nonbank financial institutions, the House committee rejected warnings from the Obama administration and objections from big Wall Street companies. The money would be paid into a $150 billion “dissolution fund” by firms with assets of more than $50 billion. Hedge funds with assets of more than $10 billion also would have to pay. The Federal Deposit Insurance Corp. would use the fund to unravel and break up collapsing nonbank financial firms. The FDIC, formed to protect individuals’ deposits in banks, also could borrow an extra $50 billion, provided Congress approved. Treasury Secretary Timothy Geithner and Wall Street prefer that the fee be assessed after a failed firm has been dismantled. Such a step, however, could require upfront payment by taxpayers. “This amendment will end taxpayer financed bailouts, eliminate `too big to fail’ (firms) and will create a system going forward where we force the big-bank, Wall Street fat cats to pay any mess they make,” said Democratic Rep. Luis Gutierrez. On auditing the Fed, the committee adopted a plan by Republican Rep. Ron Paul that had the support of a bipartisan roster of more than 300 members of Congress. It would give the Government Accountability Office the authority to audit the entirety of the Fed’s balance sheet, credit facilities and all securities purchase programs. Critics, led by Frank and Democratic Rep. Melvin Watt, argued that Paul’s proposal was too intrusive and could indirectly lead to higher interest rates. They proposed a more limited audit. “If we open all of the discussions, the deliberations, the transactional gives and takes, what we will do is scare off capital because other governments will not deal with our Fed,” Watt said. Paul, who ran a long-shot campaign for president last year, argued Watt’s more limited proposal would exclude much of the Fed’s work from scrutiny. “There is no reason in the world why this country and our people can’t know eventually about what’s going on in the Federal Reserve,” Paul said. In the Senate, Republican Sen. Richard Shelby, top Republican on the Senate’s banking panel, sharply criticized Dodd’s proposed legislation. “It significantly expands the federal government’s ability to bail out not only banks, but any large, politically connected company,” Shelby said. Dodd could still pass the bill with Democratic votes in his committee but would find it far more difficult to get the needed votes in the full Senate without some Republican backing. Dodd argued that a year after the near collapse of the financial system, it was now time to correct the government’s oversight. “As we sit here today, with gaping holes in our regulatory structure, we cannot tell our constituents that we’re ready to prevent another shock,” he said. Read the original post: US Panel sets fees for big firms, aims to slow Fed (AP)

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WASHINGTON (AFP) – US lawmakers criticized US President Barack Obama’s administration Thursday for not pressuring China enough over its rigid currency as they set the stage for slapping import duties on Chinese goods. As Obama returned home without any pledge from China to make its yuan flexible, Republican and Democratic lawmakers sent a letter to the Commerce Department calling for an investigation into “China?s currency manipulation.” It is “a potential first step in a process that could lead to significant, US-imposed tariffs on imports from China,” said Democratic Senator Charles Schumer, who jointly wrote the letter with Republican Senator Lindsey Graham. The Obama administration, like the Bush administration before it, has refused to brand China a currency manipulator under a law requiring it to determine whether any foreign economy manipulates its currency against the US dollar. The bipartisan move Thursday asking for the probe was “an alternative path to formally rebuke China,” Schumer said. “If the agency determines that China?s currency practices amount to a form of subsidy that is actionable under international trade agreements, the Chinese could be subject to stiff penalties,” he said. Lawmakers and several industry groups claim that Beijing was artificially weakening the yuan value to boost its export competitiveness, a factor they blamed on the record 268 billion dollar trade deficit with China last year. US Treasury Secretary Timothy Geithner faced tough questioning on the yuan issue from lawmakers Thursday during a hearing of the congressional joint economic committee, one of the rare legislative panels with both House of Representatives and Senate members. “I just think it’s time to get the stick out and say, ‘Okay, we have to do something about this. This is going the wrong direction,’” Republican Senator Sam Brownback said. Also Thursday, the US-China Economic and Security Review Commission, a congressional advisory panel, called on lawmakers to consider legislation “that has the effect of offsetting the impact on the US economy of China?s currency manipulation.” Geithner assured lawmakers he was confident China would allow its currency to be more flexible, citing a commitment Beijing had made to allow the yuan to fluctuate. “China, as I’ve said many times, has committed to move,” he said. “They understand they need to do it. I think they want to do it. And I’m actually quite confident they will do it.” Geithner acknowledged that China and several other Asian nations had intervened in the foreign exchange market, apparently to contain the rise of their currencies. “The scale of intervention declined dramatically in the peak of the crisis. It started to increase again in China and countries around the world,” he said, citing the latest financial crisis which peaked around the end of 2008. Obama, on his maiden China visit, tactfully voiced US worries that China’s yuan currency was being kept artificially low to boost Chinese exports. “I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time,” Obama said as Chinese leader Hu Jintao looked on. “I emphasized in our discussions, as have others in the region, that doing so based on economic fundamentals would make an essential contribution to the global (economic) rebalancing effort,” Obama said. Hu made no fresh offer of action. International Monetary Fund chief Dominique Strauss-Kahn had said Beijing should let the yuan rise “sooner rather than later,” saying it would benefit both China and the global economy. “The renminbi (yuan) is undervalued. It’s not only in the interests of the global economy but also in the interests of China to have a revaluation,” Strauss-Kahn said in a trip to Beijing also this week. The yuan’s exchange rate with the dollar has been virtually at a fixed rate to the mostly weak US dollar since July 2008, three years after Beijing decided to abandon the Chinese currency’s decade-old peg to the greenback. Between 2005 and the summer of 2008, the yuan appreciated by about 21 percent, at which point Beijing set its value at around 6.8 to the dollar, said the US-China commission in its report. “The RMB (yuan) remains undervalued,” it said, adding that the extent of the undervaluation was hard to estimate because it has never been freely traded. Link: US lawmakers threaten China sanctions over currency

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ATLANTA (AP) — For the second time in a little more than a year, a glitch at one of the two centers that handle flight plans for the nation’s air travel system set off delays and cancellations for passengers around the country. AP – Caleb Raehl, 3, of Manassas, Va., waits in line with his parents Matthew Raehl, left, and Rebecca Raehl, … {”s” : “aai,amr,cal,dal,hrs,jblu,lcc,luv,uaua”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} The snarl Thursday — traced to something as simple as a single circuit board — prompted calls for more money and manpower at the Federal Aviation Administration, which has struggled without success for years to overhaul the air traffic system. The circuit board, at an FAA center in Salt Lake City, is part of a multibillion-dollar nationwide communications network that the agency has spent years installing as part of plans to modernize air traffic control. A government watchdog said last year that the network was over budget and plagued by outages. On a single day in 2007 alone, the failure of parts of the network was responsible for 566 flight delays. Aviation experts are unsure whether any system that relies on the interconnectedness of computers can prevent glitches from causing havoc unless there are sufficient backup systems to handle the thousands of flight plans filed each day in the U.S. “A good communications system should have enough redundancy that a failure shouldn’t hurt it that badly,” said Michael Ball, a University of Maryland professor who specializes in aviation operations research. Hundreds of flights were canceled or delayed from Atlanta to Houston to Phoenix after the problem began about 5 a.m. The glitch was fixed about four hours later, but scattered delays were reported throughout the day. Planes in the air were never in danger. While the delays were not as bad as those caused by a major winter storm, passengers — already frustrated by add-on fees for checking bags and the other hassles of everyday air travel — were miffed. “I am sitting here at the airport for an additional three hours when I could have been sleeping in,” said Angelo Adams of Atlanta, waiting for a flight to Philadelphia. Sisters Sharon Walker and Sheila James were taking their elderly mother, Rosa Washington, to see their other sister in St. Louis. Their 9:30 a.m. flight from Atlanta was delayed until 4 p.m. “We were going to be there for a four-day weekend, but now it’s getting cut short,” James said. “It’s just not a good day.” Lawmakers in Washington pounced. Sen. Charles Schumer, D-N.Y., said the country’s aviation system is “in shambles” and the FAA needs more resources to prevent similar problems in the future. “If we don’t deliver the resources, manpower and technology (to) the FAA it needs to upgrade the system, these technical glitches that cause cascading delays and chaos across the country are going to become a very regular occurrence,” he said in a statement. Sen. Byron Dorgan, D-N.D., chairman of the Senate’s aviation panel, said he plans to grill FAA Administrator Randy Babbitt about the issue at a Dec. 10 hearing. Rep. Jerry Costello, D-Ill., chairman of the House aviation panel, said he has asked the transportation inspector general to investigate and report to Congress within 60 days. Airlines, reeling from the economic slowdown, were tallying their losses from the delays and cancellations. Several refused to estimate the cost. The Air Transport Association, an airline trade group, also could not give an estimate. It was just a year and three months ago that the FAA had to deal with a similar headache. In August 2008, a software malfunction delayed hundreds of flights around the country. In that episode, the Northeast was hit hardest by the delays, caused by a glitch at the Hampton, Ga., facility that processes flight plans for the eastern U.S. FAA officials and an official for the union that represents the agency’s technicians said Thursday’s failure prevented air traffic control computers in different regions of the country from sending each other information about flights going back and forth. The two large computer centers — in Salt Lake City and Hampton, an Atlanta suburb — were both affected, as were 21 regional radar centers around the country. The problem began with the failure of a single small circuit board inside a router. Air traffic controllers were forced to type in complicated flight plans themselves because they could not be transferred automatically from computers in one region of the country to computers in another, slowing down the whole system. The equipment that failed was part of a telecommunication network owned and operated by FAA contractor Harris Corp. of Melbourne, Fla. The FAA is investigating the cause of the failure and why a backup didn’t immediately resolve the problem, FAA spokeswoman Laura Brown said. Harris said in a statement that it is working with FAA to resolve the issue. Lowy reported from Washington; Associated Press Writers Marcus Franklin in New York, David Koenig in Dallas, Joshua Freed in Minneapolis, Johnny Clark and Dionne Walker in Atlanta, Laurie Kellman in Washington and Matt Barakat in Chantilly, Va., contributed to this report. The rest is here: Glitch snarls air traffic in latest woes for FAA (AP)

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Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunters. Just because prices are low doesn’t mean you should make snap decisions or buy something that isn’t right. Here are 7 tips for making sure you don’t get taken for a ride. 1. Don’t get caught up in a feeding frenzy “Everybody and their grandmas are trying to buy foreclosures,” said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn’t mean you should lose your head. Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity. Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains. Don’t get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price. 2. Contact lenders directly Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market. In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale — buying a home for less than what the current owner owes on the mortgage — she should talk directly to the property’s asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders. 3. Get pre-approved from the lender you want to buy from If you’re trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it’s similar to others. Plus, you’re not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source. 4. Consider fix-ups Most REOs, the industry term for bank owned properties, are sold as is. “The conventional wisdom is that banks will do nothing to the houses before the sale,” said Kelman. That can be problematic today because so many foreclosed homes are in less-than-mint conditions . Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leaving In 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder — one who doesn’t ask the bank to pay for repairs. So be willing to consider a home that needs some work — but budget accordingly. 5. Hire a real estate attorney Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles. The solution is to hire a real estate attorney — even in states where home sales are usually completed without one. Considering you’re making a six-figure investment, the legal fees are cheap insurance against the risks. 6. Wait to make an offer Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in. “Talk to the agent selling the property,” said Kelman. “The agent may tip his hand. Call up and ask, ‘Should I make an offer? What should I come in at?’” The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders. 7. Tour properties with contractors With so many REOs in seriously deficient shape, it’s essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them. A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance. View original post here: 7 tips for buying foreclosures (CNNMoney.com)

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WASHINGTON (AP) — Setting up a historic year-end health care debate, Senate Majority Leader Harry Reid unveiled long-awaited legislation Wednesday night to extend coverage to all but 6 percent of eligible Americans and bar private industry from denying insurance because of pre-existing medical conditions. AP – Senate Majority Leader Sen. Harry Reid, D-Nev., speaks to the media about the Democratic health care bill on … The Democrat’s $849 billion measure is designed to remake the nation’s health care system, relying on cuts in future Medicare spending to cover costs — as well as on higher payroll taxes for the well-to-do and a new levy on patients undergoing elective cosmetic surgery. Aides said the mammoth, 2,074-page bill would reduce deficits by $127 billion over a decade and by as much as $650 billion in the 10 years that follow, citing as-yet-unreleased estimates by the Congressional Budget Office. “Tonight begins the last leg of this journey,” said Nevada Sen. Reid, less than two weeks after the House approved its version of a sweeping remake of the health care system– and nearly 10 months after President Barack Obama’s Inauguration Day summons to action. Obama welcomed Reid’s action, saying, “Today, thanks to the Senate’s hard work, we’re closer than ever to enacting solutions to these problems. I look forward to working with the Senate and House to get a finished bill to my desk as soon as possible.” There was no mention of Obama’s longtime goal of signing legislation by year’s end. Republicans vowed a protracted struggle to block the legislation and deny the president a victory that would cap a tumultuous first year in office. “This bill has been behind closed doors for weeks,” said Sen. Mitch McConnell of Kentucky, the Republican leader. “Now, it’s America’s turn, and this will not be a short debate. Higher premiums, tax increases and Medicare cuts to pay for more government. The American people know that is not reform.” An early showdown on the Senate floor is expected by week’s end. Reid’s Senate measure would require most Americans to carry health insurance and would provide hundreds of billions of dollars in subsidies to help those at lower incomes afford it. Medium and large companies would not be required to offer coverage, but they would be forced to pay fees if the government ended up subsidizing their employees’ insurance. Beginning in 2014, the bill would set up new insurance marketplaces — called exchanges — primarily for those who now have a hard time getting or keeping coverage. Consumers would have the choice of purchasing government sold insurance, an attempt to hold down prices charged by private insurers. After weeks of secretive drafting, Reid outlined the legislation to rank-and-file Democratic senators at a closed-door meeting. “Everyone was positive,” said Sen. Amy Klobuchar, D-Minn. That didn’t mean there weren’t problems — far from it. At his news conference, Reid pointedly refrained from saying he had the 60 votes necessary to propel the bill over its first hurdle. Reid met privately earlier in the day with Sens. Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, moderate Democrats who have expressed concerns about the measure. Nelson later issued a statement strongly suggesting he would vote with fellow Democrats on an initial showdown expected within days. Aides have said privately that Reid decided to retain an existing antitrust exemption for the insurance industry as a way of satisfying the Nebraskan’s concerns. Landrieu said, “I’m not going to be for anything that doesn’t drive down costs over time.” Lincoln, the only one of the three who faces re-election next year, told reporters, “We’ll wait and see.” With the support of two independents, Democrats have 60 seats, the precise number needed to choke off any delaying tactics by the 40 Republicans who appear united in opposition to the bill in its current form. In general, Reid proposed an outline that is similar to the House-passed bill, but there were important differences. He called for an increase of a half percentage point in the Medicare payroll tax for individuals with income over $200,000 a year, $250,000 for couples. He also included a tax on high-value insurance policies, meant to curb the appetite for expensive care. The House bill contains neither of those two provisions, relying on an income tax surcharge on the wealthy to finance an expansion of coverage. Reid’s measure also calls for hundreds of billions of dollars in cuts in future Medicare spending, an attempt to satisfy Obama’s call to curtail the growth of health care spending that is fiercely opposed by Republicans. On another controversial issue, Sen. John Kerry, D-Mass., told reporters Reid had decided to require the side-by-side sale of insurance policies that cover abortion services and do not, an attempt to satisfy both sides. That is far less restrictive than a House-passed provision that left liberal Democrats angry. Ahead lie weeks — if not more — of unpredictable maneuvering on the Senate floor, where Reid and his allies will seek to incorporate changes sought by Democrats and repel attempts by Republicans to defeat the legislation and inflict a significant political defeat on the president. Reid released his legislation more than a week after the House approved its version of the health care bill on a near party-line vote of 220-215. According to estimates from the Congressional Budget Office, that House bill, with a price tag of about $1.2 trillion, would result in coverage for tens of millions of uninsured, and provide 96 percent of the eligible population with insurance. Two Senate committees approved different versions earlier in the year, and while Reid has said he would produce a blend of the two proposals, in fact he had a virtual free hand to come up with a plan that could command the 60 votes needed to pass. Anticipating a major struggle, the White House deputized Interior Secretary Ken Salazar and former Senate Majority Leader Tom Daschle to join Vice President Joe Biden in trying to clear the way for the bill’s approval over the next several weeks. Salazar, a former Colorado senator, is viewed as a bridge to moderate Democrats who are far outnumbered by liberals inside the Democratic caucus. Daschle was Obama’s first choice for secretary of health and human services, a position from which he was to try and oversee the administration’s drive to enact health care legislation. He withdrew his nomination when it was disclosed he had not paid more than $120,000 in federal taxes over several years. Associated Press writers Ricardo Alonso-Zaldivar and Erica Werner contributed to this report. Read more: Reid sets markers for historic health care debate (AP)

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WASHINGTON (AP) — Setting up a historic year-end debate, Senate Democratic leader Harry Reid unveiled his long-awaited version of legislation to reshape the nation’s health care system Wednesday night, a measure designed to extend coverage to 94 percent of eligible Americans and bar private industry from denying insurance because of pre-existing medical conditions. AP – Senate Majority Leader Sen. Harry Reid, D-Nev., speaks to the media about the Democratic health care bill on … “Tonight begins the last leg of this journey,” said the Nevada Democrat, less than two weeks after the House approved its version — and nearly 10 months after President Barack Obama’s Inauguration Day summons to action. Reid’s Senate measure would require most Americans to carry health insurance and would provide hundreds of billions of dollars in subsidies to help those at lower incomes afford it. It also would mandate that large companies to provide coverage to their workers. At its core, it would set up new insurance marketplaces — called exchanges — primarily for those who now have a hard time getting or keeping coverage. Consumers would have the choice of purchasing government sold insurance, an attempt to hold down prices charged by private insurers. Initial maneuvering on the Senate floor was expected later in the week on the measure, bitterly opposed by Republicans eager to deny Obama a victory on his top domestic priority. After weeks of secretive drafting, Reid outlined the legislation to rank-and-file Democratic senators at a closed-door meeting. “Everyone was positive,” said Sen. Amy Klobuchar, D-Minn. That didn’t mean there weren’t problems — far from it. At his news conference, Reid pointedly refrained from saying he had the 60 votes necessary to propel the bill over its first hurdle. Reid met privately earlier in the day with Sens. Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas, moderate Democrats who have expressed concerns about the measure. With the support of two independents, Democrats have 60 seats, the precise number needed to choke off any delaying tactics by the 40 Republicans who appear united in opposition to the bill in its current form. “This bill has been behind closed doors for weeks,” said Sen. Mitch McConnell of Kentucky, the Republican leader. “Now, it’s America’s turn, and this will not be a short debate. Higher premiums, tax increases and Medicare cuts to pay for more government. The American people know that is not reform.” In general, Reid proposed an outline that is similar to the House-passed bill, but there were important differences. He called for an increase of a half percentage point in the Medicare payroll tax for individuals with income over $200,000 a year, $250,000 for couples. He also included a tax on high-value insurance policies, a measure designed to curb the appetite for expensive care. The House bill contains neither of those two provisions, relying on an income tax surcharge on the wealthy to finance the bill. Reid’s measure also calls for hundreds of billions of dollars in cuts in future Medicare spending, an attempt to satisfy Obama’s call to curtail the growth of health care spending that is fiercely opposed by Republicans. Follow this link: $849 billion health bill sets up historic debate (AP)

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By Liz Pulliam Weston You can’t afford the payments on your home. Your efforts to get your mortgage modified are going nowhere. You may even have tried to sell the home for less than what you owe, but the short sale fell through. Now you face some grim options. You can let the home slide into foreclosure, or you can try to prevent or at least delay the foreclosure with a bankruptcy filing. Here’s what you need to know to make the right decision: Foreclosure takes a while. The amount of time between your first missed payment and the sheriff arriving to throw you out varies considerably by state, lender and even market conditions, but foreclosure doesn’t happen overnight. Although a lender can start foreclosure proceedings after a single missed payment, most wait until three or more monthly payments have been skipped. How long the process takes after that varies widely; some Southern states give lenders the power to oust borrowers from their homes in a matter of weeks, while in other areas foreclosures are now dragging on for 12 months or more, said attorney Stephen Elias, the author of “ The Foreclosure Survival Guide ” (also available for free on self-help legal publisher Nolo’s Web site ). In general, foreclosures move faster in states that don’t require lenders to go to court to get the process started (”nonjudicial” foreclosures) than in states that do (”judicial” foreclosures). To see which applies in your state, visit Nolo’s “ How foreclosure works ” page. Bankruptcy slows but often doesn’t halt the foreclosure process. As soon as you file for bankruptcy, creditors must stop collection efforts. Your mortgage lender can ask that the so-called automatic stay be lifted so it can proceed with foreclosure, but the amount of time you typically have before the foreclosure process recommences varies by the type of bankruptcy you file: A Chapter 13 repayment plan requires you to pay back at least some of your debts over five years. A Chapter 7 liquidation erases most of your consumer debt in a few months. “With a Chapter 7, you usually get two months” of breathing room from the foreclosure process, Elias said. “With Chapter 13, it’s usually six months.” That is, unless you can demonstrate you’re able to pay back what you owe. In that case: Chapter 13 can help you catch up. If your financial setback was temporary and you now have the money to make your mortgage payments and get caught up on the payments you missed, a Chapter 13 bankruptcy can save your home. A Chapter 13 also can help you get rid of second and third mortgages, including home equity loans and lines of credit, if you no longer have the equity to secure those loans. Unfortunately, few people are in a position to get caught up on their mortgages, Elias warns. Many who fall behind do so because their payments are too big or their income has dropped. They still can’t afford their primary home loan payments, let alone pay back the arrears they owe, even if the extra payments are stretched out over five years. Another problem with Chapter 13: It’s expensive. Attorneys typically charge $3,000 and up to handle a repayment plan bankruptcy, which is about twice the going rate for the simpler Chapter 7 filing. Weigh the costs and what filing buys you. Even if you can’t save your home, you may want to consider Chapter 13 just to buy yourself more time, if you can afford to do so. The longer foreclosure takes, the more time you have to stay in your home and save money. The cash you would have been applying to your mortgage can go to a savings account to help you make a security deposit on a rental, Elias said. Video: Foreclosure filings surge Elias strongly believes people should stay in their homes as long as they possibly can to strengthen their finances for life in a post-foreclosure world, when credit will be tough to get. “I get really depressed when I heard people have left their house” before they have to, Elias said. You may not feel comfortable staying in a house you can’t pay for, of course. But if your goal is to buy more time, you can do the math to see if the extra months bankruptcy offers would allow you to save enough to make it worth the cost. Chapter 7 may help — or it may not. A Chapter 7 liquidation won’t help you keep your home, since this type of bankruptcy erases unsecured debt, not the kind of debt that’s secured by a house. But it could allow you to erase consumer debt, such as credit card and medical bills, in addition to slowing the foreclosure process for a couple of months. Continued: When Chapter 7 is not a good idea   1  |  2  |  next > See the rest here: Foreclosure or bankruptcy: What to do?

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WASHINGTON (AP) — A group of House Democrats are stepping up demands for greater transparency from the Federal Reserve after reports that the Fed mishandled the bailout of insurance giant American International Group Inc. The group, led by Rep. Elijah Cummings, D-Md., wants a congressional review of the Federal Reserve system. They want to allow congressional audits of the Fed as part of financial rules being debated by the House Financial Services and Senate Banking committees, according to a letter Wednesday to the committees’ chairmen. “Real financial regulatory reform cannot occur without an examination into the structure” of the Federal Reserve system, the letter says. Details on which banks benefited from AIG’s bailout never would have become known without demands from Congress, and a recent report shows flaws in the Fed’s structure as a regulator, the lawmakers write. The letter follows sharp criticism Monday of the Federal Reserve Bank of New York and Federal Reserve in a report from Neil Barofsky, the special inspector general for the $700 billion financial bailout fund. Barofsky said the Fed may have paid billions more than necessary to banks including Goldman Sachs Group Inc. and Merrill Lynch, now part of Bank of America Corp., to cancel AIG’s contracts with them. Treasury Secretary Timothy Geithner, then president of the New York Fed, signed off on decisions that weakened the government’s bargaining position and made it difficult to pay the banks less than face value for securities AIG had insured, the report says. The government has committed up to $180 billion to rescue AIG. Few expect all the money to be recovered. The Treasury Department now owns nearly 80 percent of the New York-based company and is trying to wind down its operations. Treasury and Fed officials argue that taking a tougher line with AIG’s business partners would have rattled financial markets already in crisis. They say AIG’s failure shows the need for new financial rules proposed by the Obama administration that would make it easier to wind down large failing financial companies. In the lawmakers’ letter, they question the Fed’s effectiveness as a regulator and say there is an “inherent conflict” in the way regional bank presidents are selected. The presidents of the 12 regional Fed banks are elected by boards that include representatives of banks that the Fed regulates. Many in Congress have long demanded more transparency from the Fed. Those calls have intensified since the financial crisis erupted last fall. Fed officials have resisted calls for a review of the central bank’s governance. They contend that the Fed already is accountable except in the narrow area of monetary policy, where they say public scrutiny would threaten its independence. Read more from the original source: Lawmakers seek Fed audit after critical AIG report (AP)

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LONDON (AFP) – British Prime Minister Gordon Brown unveiled a crackdown on the banking industry Wednesday as part of a voter-friendly agenda designed to boost his party’s chances at elections barely six months away. In a traditional Queen’s Speech detailing its final legislative plans before ballots due by June, the government also put boosting growth and jobs as its top priority as Britain emerges from the global slowdown. Brown’s Labour party, which has been in power since 1997, looks set to suffer a heavy defeat to the main opposition Conservatives in the election. However, the prime minister insisted the new measures — which included a guarantee on personal care for the elderly, laws on carbon capture and storage and a ban on cluster bombs — were not simply electioneering. “When we propose these measures we are speaking up, not in the party interest but in the national interest,” Brown told the House of Commons. “We are responding to new national needs — social care, climate change, economic restructuring, high levels of education — standing up for Britain.” Queen Elizabeth II outlined the government’s programme in her annual Queen’s Speech to parliament, in a ceremony full of pomp and tradition. “My government’s overriding priority is to ensure sustained growth to deliver a fair and prosperous economy for families and businesses, as the British economy recovers from the global economic downturn,” she said. The plans included a new law to entrench Brown’s pledge to halve the budget deficit in four years, while another proposed bill would empower the financial watchdog to intervene in bankers’ contracts. The Financial Services Authority (FSA) would be able to tear up pay deals if they are considered to promote risky behaviour, which was widely blamed for exacerbating the global financial crisis. Full details of the plans are not expected until finance minister Alistair Darling unveils his pre-Budget report on December 9. But business leaders have already expressed concern, with John Cridland of the CBI lobby group warning the government “must be very careful not to damage the competitiveness of the UK’s financial sector at this critical time”. Miles Templeman, head of the Institute of Directors, added: “It’s somewhat worrying that the government feels it needs the power of legislation to meet its own fiscal plans. We need more self-discipline and less legislation.” The government has only a few months to push through the 15 bills announced Wednesday before the next election, and Conservative leader David Cameron dismissed it as “just a Labour press release on palace parchment”. “They’ve run out of money, they’ve run out of time, they’ve run out of ideas and we’ve just seen from the prime minister that they’ve run out of courage as well,” he said. The Queen’s Speech is a state occasion defined by traditions dating back more than 350 years. The monarch travels in a royal carriage and with a cavalry escort from Buckingham Palace to parliament, where she dons ceremonial robes and a glittering crown before taking to the throne in the House of Lords. An official known as Black Rod is then sent to summon elected lawmakers from the House of Commons to the Lords chamber to hear the queen, as no monarch has been allowed in the Commons since the English civil war. The door is initially slammed in his face — another reminder of the independence of the Commons — before lawmakers follow him back to gather with the peers in their ermine robes to hear the speech. More: British PM unveils final plans before election

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America used to mistreat her land and water like this. This sort of thing, by the way, is how you manage to produce things with a wage of $1 or $2/day and undercut first-world producers. When we have “free trade” with China, this is what we are supporting.  This is what we’re serving up on their people.  This is what our government and corporations all say is ok – so long as it is hidden from us, and happens “over there.” Make all the excuses you want America, this is what you’re supporting every time you buy anything made in China or containing Chinese componets. Go walk around your house and pick up 10 random items.  Look for the “made in” tag on the back or bottom.  What’s it say?  Now consider this – it is virtually impossible today to buy a piece of consumer electronics, a toy, an automobile or even a toaster without some part of it coming from China. YOU are why this is happening. These are not old photos, or someone’s Photoshop experiment. They’re real, they’re current, and they are what our hedonism, demand for $20 DVD players and “cheaper and faster” from everyone has resulted in, all so our “corporations” can report “record profits.” Those “great earnings” the last two quarters were in fact generated by firing Americans and shifting yet more production over to China, where they poison their air, water and ground with wild abandon, all so we can have a “strong” stock market and our banksters can loot us some more. This is just one example…. head to the original article to read and see the rest. You lost your job so she can bathe in industrial waste, and you are not only consenting to all of it, you’re actively supporting it. Any questions? Read the original: Pollution in China – A Must Read

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WASHINGTON (AP) — A solid majority of Americans recognize the need to help the environment, although there are some things — like buying a hybrid car or taking mass transit — that people often talk about, but don’t necessarily act on. That’s shown in a survey of more than 1,000 adults that sought to gauge attitudes about the environment. The telephone poll, conducted for The Associated Press and NBC Universal, found that 60 percent of those surveyed felt either a “great deal” or “a lot” of personal responsibility to protect the environment, while 37 percent rarely, if ever, even thought about the impact of their actions on the Earth’s health. Nearly 8 of 10 people who were concerned about environmental protection said they believe their actions are helping to protect the environment, according to the poll released Tuesday. It found that people have largely accepted recycling bottles and cans — about 7 in 10 people said they’re likely to do it — and are inclined to find ways to cut electricity or heating costs, also to benefit the environment. A little more than 6 of 10 said buying energy-efficient appliances, using recycled paper products and car pooling also help a lot. A little more than half said it would make a lot of difference to turn down the thermostat, reuse water bottles and take your own reusable bag when grocery shopping. While many of the respondents said these actions would help the environment “a great deal,” or at least “a lot,” when asked about some specific actions, the gap widened between what they believe to be important and what they have any intention of doing. In some cases, the inability to turn their green priorities into action reflected geography or economics. Take the matter of car pooling or using mass transit. More than 6 in 10 people said they thought it would help the environment. Yet only 3 in 10 said they were very likely to do it, and 4 in 10 said they were not at all likely to car pool or take mass transit. A third of those surveyed lived in rural areas where mass transit was generally not readily available and where car pooling would be less likely. Yet, only 44 percent of urbanites and 32 percent of people living in the suburbs also said they were very likely to use mass transit or car pool. Janice Meehl, 54, a fourth-grade teacher in the town of North East, Pa., and one of the participants in the survey, said she fervently recycles bottles and cans, keeps the thermostat down and years ago added insulation to her all-electric home, cutting her energy bill in half. It saves money but also “it’s doing the right thing for the environment. They go hand in hand,” she said. While she commutes 70 miles round-trip to work each day, she says mass transit or car pooling “is not an option. If it were, would I use it? Probably.” Like Meehl, 7 in 10 people surveyed said they thought adding energy-saving insulation in their homes would be a good idea for the environment. But only half said they were very likely to do it and 1 in 5 respondents would be highly unlikely to add insulation. In some cases, respondents said the structure of their house prevents more insulation from being added easily. About 45 percent of those surveyed embraced the idea of gas-electric hybrid cars, but only 1 in 5 would be very likely to buy such a vehicle, and half said they were “not at all likely” to buy one. “They’re too expensive right now,” said Vaughan Oliver, 65, of Mount Vernon, Ky. “You would have to have one for years and years and years to make it feasible to pay for itself.” Oliver, interviewed as he drove his Jeep Cherokee down Interstate 65 south of Lexington, said he might consider a hybrid “in another 10 years,” when he says he’ll be more secure that one would not cause him a problem. Today, gas-electric hybrids can carry a $4,000 to $7,000 or more price premium over similar gasoline-powered vehicles. The poll also found: –72 percent were very likely to recycle cans and bottles. –63 percent were very likely to turn down thermostats. –62 percent were very likely to buy energy-efficient appliances. –59 percent were very likely to use cold water for clothes washing. –59 percent were very likely to buy recycled paper products. More than half said it would help the environment if people brought their own shopping bags to stores, and 46 percent said they were very likely to do so, while 25 percent ruled it out. NBC Universal’s sponsorship of the poll was related to their “Green Is Universal” week of programming about environmental issues. The poll was conducted Nov. 5-9 by GfK Roper Public Affairs and Media. It involved landline and cell phone interviews with 1,006 adults nationwide and has a margin of sampling error of plus or minus 3.1 percentage points. AP Polling Director Trevor Tompson and Associated Press writer Dina Cappiello contributed to this report. The poll: http://www.ap-gfkpoll.com and http://www.greenisuniversal.com Read this articl e: AP Poll: Sometimes it isn’t easy being green (AP)

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WASHINGTON (AP) — The former top attorney of Bank of America Corp. will testify to Congress Tuesday that he wasn’t involved in crafting the bank’s agreement to let Merrill Lynch pay billions of dollars in bonuses to its employees, before being abruptly fired last December on the CEO’s orders. AP – FILE – In this Jan. 25, 2009 file photo, a Bank of America branch office is shown in … {”s” : “bac,dmh”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} Timothy Mayopoulos, who was general counsel at the second-largest U.S. bank until December 2008, also says he played no role in deciding whether to disclose the bonuses to Bank of America shareholders. Mayopoulos is scheduled to testify before Congress for the first time on Tuesday as a House oversight panel examines the $45 billion federal bailout of Charlotte, N.C.-based Bank of America and its shotgun acquisition of Merrill last year at the height of the financial crisis. “To my recollection, I had no role in this issue,” Mayopoulos says of the bonuses in written testimony prepared for the hearing. “That was done by others.” The House Oversight and Government Reform Committee has been investigating the government’s role in pushing the hastily arranged takeover of Merrill, the tumultuous events surrounding the deal and the payment of the bonuses to Merrill employees. Mayopoulos provides new details of his firing on Dec. 10, 2008, saying he was told by a colleague that CEO Ken Lewis had made the decision “quickly and recently.” The colleague, who was the bank’s chief risk officer, told him “that I was to leave the premises immediately,” Mayopoulos recalls in his testimony. A human resources rep gave him his severance papers and took his corporate ID, company credit card, BlackBerry and office keys, he says. “I got in my car and drove home. I was stunned,” Mayopoulos says. “I had never been fired from any job, and I had never heard of the general counsel of a major company being summarily dismissed for no apparent reason and with no explanation.” The Merrill deal, forged the same September weekend that Lehman Brothers collapsed, was first questioned after Bank of America disclosed that the investment bank would post 2008 losses of $27.6 billion — far more than expected. Bank of America, which had already received $25 billion in U.S. bailout aid, then asked for and received an additional $20 billion from the government to help offset those losses. Mayopoulos says in his testimony he advised Bank of America executives that the bank couldn’t make a case that Merrill’s huge losses provided legal grounds for it to back out of the merger deal. “I concluded that there was no basis to conclude that a material adverse change had occurred with regard to Merrill Lynch” that would justify calling off the merger, he says. But Lewis came under even fiercer attack after Merrill, with the knowledge of BofA executives, gave $3.6 billion in bonuses to its employees even as the government was doling out more rescue money. The bonuses, which would normally have been paid in January, were paid out instead in December ahead of the deal’s Jan. 1 completion. The bonus flap ultimately cost former Merrill Lynch CEO John Thain his job at Bank of America, and the continuing fallout led Lewis to decide to step down at the end of this year. One of the key issues is what legal advice Bank of America received regarding disclosing the amount of the bonuses — which could have totaled up to $5.8 billion — to shareholders before their vote on the companies’ merger. The Securities and Exchange Commission sued Bank of America in August, alleging that it failed to tell shareholders that it had authorized Merrill to pay that amount in 2008 even though the investment bank had suffered the stunning loss. The terms of the bank’s takeover of Merrill, including the bonus payments, were laid out in documents prepared by outside attorneys for the two companies. Bank of America was represented in the negotiations by the law firm Wachtell, Lipton, Rosen & Katz. Merrill’s counsel was Shearman & Sterling. The attorneys were mainly responsible for drafting Bank of America’s disclosure filings to the SEC. Also scheduled to testify at Tuesday’s hearing is Brian Moynihan, who took over as Bank of America general counsel after Mayopoulos’ departure and is president of consumer and small-business banking, and board members Charles “Chad” Gifford and Thomas May. Moynihan is considered by analysts to be a leading candidate to replace Lewis. “… Throughout the deliberations around our acquisition of Merrill Lynch, Bank of America acted in good faith and consulted with one of the premier law firms in the United States to work through a very difficult issue,” Moynihan says in his prepared testimony. He also maintains that despite the merger having been affected by the distress of the financial crisis, it turned out to be a success that has benefited Bank of America customers and U.S. taxpayers. The House panel’s scrutiny follows months of legal wrangling over the deal. In September, New York Attorney General Andrew Cuomo subpoenaed five members of Bank of America’s board as part of an investigation into the Merrill takeover. Seven directors have resigned from the board since shareholders replaced Lewis as chairman in April. Bank of America had settled the SEC’s separate case over disclosures of the Merrill bonuses in September, but a federal judge said the $33 million settlement accord was unfair and needlessly penalized the bank’s shareholders. The judge has ordered the case to go to trial on Feb. 1. Read this articl e: Ex-BofA exec says had no role in Merrill bonuses (AP)

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By Kevin Drawbaugh Reuters – Four thousand U.S. dollars are counted out by a banker counting currency at a bank in Westminster, Colorado … {”s” : “aig,bac,c,gs,jpm”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} WASHINGTON (Reuters) – Some of the world’s largest financial firms on Monday urged a top U.S. lawmaker not to pursue big bank break-up legislation, an idea attracting interest in Congress and causing alarm on Wall Street. The Financial Services Forum, a lobbying group for CEOs of firms including Goldman Sachs (NYSE: GS – News ) and JPMorgan Chase (NYSE: JPM – News ), said empowering regulators to break up “too-big-to-fail” banks “could lead to long-term damage to the U.S. economy.” The forum made its comments in a letter to U.S. House of Representatives Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, that was obtained by Reuters a day before Frank’s panel resumes work on financial reform legislation. Seeking to shift Capitol Hill’s debate on what to do about firms that may endanger global economic stability, the forum said size alone does not make firms risky. Rather, it said, over-concentration in specific markets raises levels of risk. In addition, the forum said, large firms can make bigger loans, offer customers more products and services and achieve greater geographic reach. “To be sure, ‘too big to fail’ must be eliminated. But the problem is not that some institutions are too large. It’s that there is currently no legal authority to unwind, in an orderly way, a failing financial conglomerate,” it said. Arguments about concentration risk, global competitiveness and firms’ sheer size will dominate debate in the days ahead as Congress tries to craft what is shaping up to be the most contentious piece of the government’s regulatory response to last year’s financial crisis, the worst in generations. The Obama administration and Congressional Democrats want a new way to handle failing firms. The goal is to prevent another debacle like last year’s, when Lehman Brothers collapsed, triggering a credit crisis, and taxpayers bailed out AIG (NYSE: AIG – News ), Citigroup (NYSE: C – News ) and Bank of America (NYSE: BAC – News ), among others. Frank’s committee will debate a bill beginning on Tuesday that would give the government far-reaching new powers to regulate and restructure large financial firms whose failure could undermine the broader financial system and the economy. The Senate Banking Committee has tentatively scheduled a working session for Thursday on similar legislation, introduced last week by committee Chairman Christopher Dodd. Both committees’ debates are expected to continue for some time. No final House floor vote is likely before December, and analysts don’t expect final Senate action until early 2010. At the Wall Street Journal CEO Council conference, White House Chief of Staff Rahm Emanuel said he is planning to meet members of Frank’s committee late Monday to discuss regulatory reform. He said that he expects Frank’s committee to vote on the bill this week and the full House of Representatives could start debate in the next two weeks. As soon as this week, Democratic Representative Paul Kanjorski, chairman of the House capital markets subcommittee, is expected to offer an amendment that would try to prevent firms from getting “too big to fail” in the first place. Senator Bernie Sanders, a Vermont independent, has introduced a similar bill to give government authorities the power to identify and break up firms that are too big to fail. Small- and mid-sized banks, which have demonstrated considerable political clout through the financial reform debate, will support such legislation, which would cut their largest rivals down to size, lobbyists said. In the European Union, regulators are considering measures to force banks across Europe to sell assets and sometimes even break up to compensate for massive state aid they have received. “Although we think that breaking up the larger banks would be positive for the U.S. economy as it would enhance competition … we acknowledge that any action on breaking up large banks is likely a couple years out,” said Paul Miller, policy analyst at investment firm FBR Capital Markets. (Additional reporting by John Poirier) Originally posted here: Banks sense danger, warn Congress on breakup power (Reuters)

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Mid-to-High End Mortgage & Housing Market – A Slower Moving Train Wreck One market segment that will not catch fire from anything being done is the mid-to-high end (MTH). This is where the next crisis is building right now. Only significant house price depreciation and low rates spur sales in this market segment. Many are counting in large part on the MTH homeowner carrying the housing market, consumer spending, and the broader economy straight into a full-blown economic recovery . That is a lofty premise if they are talking about the same MTH borrower with whom I worked so closely as a West Coast mortgage banker during the bubble years; who are my neighbors, friends, and family, as an MTH CA resident; and whose loan performance I track daily across all originators and servicers through our proprietary data . Contrary to a growing recent popular opinion that the MTH homeowner is feeling great, it remains my strong opinion that the negative wealth-effect across the MTH homeowners remains powerful, increasing especially over the past few months as end-of-season price dumping and increased short sale activity continued to push prices lower. The reason why the MTH has not tumbled in the same fashion as the lower price bands is simply because this group of Jumbo Prime, Pay Option and Interest Only borrowers: a) have much more leverage-in-finance with loans such as the Pay Option ARM making up a large percentage of the total b) have loans were structured with interest only or neg-am teasers that typically last a minimum of 5-years vs 2-years on a Subprime loan c) typically have more options available to them such as cashing in retirement to keep kicking the can d) generally have more stable employment e) have a better chance of qualifying for a mortgage mod. Bottom Line – the MTH is a slower moving train wreck, which in the macro may be worse than the way Subprime imploded. Subprime borrowers who got wiped out a couple of years after getting their 2/28 are way down the de-levering road — renting a property and living within their means, which is when spending can begin again if they chose. At the end of the day, defaults and foreclosures across the MTH will be in the double digits with a respectable number in front, but stretched out over a longer period of time pressuring this housing and borrower segment for the duration. The Mid-to-high end collapse will keep its borrowers financially strung out for years , as conscientious home owners sell other assets or cash in retirement to keep making payments while others opt for a pro-bank mortgage mod in which most of their disposable income each month goes to repay their massively underwater monument to stupidity . Some that simply bought at the wrong time with larger down payments, perhaps most of their savings — and who have seen all of their equity evaporate — will opt to earn their way out of it, which is a long process during which spending is restrained. Still, many will choose the route of default and foreclosure because with negative-equity so extreme in the MTH, they are renters anyway, unable to refi, sell or re-buy, and foreclosure is the fastest road to household balance sheet recovery. Price Dumping & Short Sales Destroy Values Just Like Foreclosures Make no doubt about it…peak-to-trough the MTH has been devastated in the past year. Millions who purchased, refied, or took out HELOCs on the way up, at the top, or moving back down the other side are in such a serious negative-equity state there is no traditional way out. The hot period for MTH Real Estate was 2003-2007. During this time 75%-80% of all houses either: a) changed hands b) were refinanced (including cash-out, which increasing the loan balance c) were built and purchased for the first time d) or leveraged further through the addition of a second or third mortgage. Yes, the potential at-risk population is the vast majority of MTH owners. Later in the 2009 season we finally saw more MTH houses turn-over but at sharp discounts or on short sale. Unlike the low end of the market the increased activity was not spurred by a surge in buyer demand, rather due to end-of-season seller panic and increased short sale activity. That being said, there is pent-up demand for this sector at the right price . The problem is that the right price on one sale destroys the net-worth of scores more . This type of increased activity in the earlier innings of the MTH collapse is not a positive market factor because it sets comps and locks-in values for everybody. Bottom Line – price dumping and short sales destroy neighborhoods just like foreclosures. In fact, they are a leading indicator to house price deflation, defaults and foreclosures. Remember, for every person who gets a ‘great deal’, scores more are thrown into a negative-equity or greater negative equity position exponentially increasing their likelihood of loan default . This sector is a negative-equity time-bomb across all loan types, even 30-year fixed. A $1 Million House is now the House of a Millionaire A $1 million house is now the home of a millionaire …someone who can put down $270k and show proof of over $200k per year income for the past few years. Oh, and a 740 credit score is paramount. Unlike the bubble years when a $1 million house could be purchased by a moderate income household — one working as a checker at Safeway and one a mailman (both great jobs with a combined gross income of over $100k) — now the buyers must be rich. There are far more MTH houses on the MLS — and coming at the market in the foreclosure pipeline — than there are rich buyers who a) do not already own b) who are liquid enough to be able to buy a new house and rent their present house c) or that are in the enviable equity position to be able to sell, pay a Realtor and put a large down payment on their new house. Follow this link: THE SLOW MOVING TRAIN WRECK IN MID-TO-HIGH END HOUSING

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WASHINGTON (AP) — In his visit to Beijing this week, President Barack Obama is expected to tread lightly when pressing China to let its currency rise against the dollar. AP – Graphic shows the monthly U.S. trade deficit with China over the past three years … Doing so would benefit the U.S. economy by making American-made goods cheaper in China, but Obama is reluctant to upset Beijing. China is the No. 1 lender to the U.S. at a time when the latest annual budget deficit hit a record $1.42 trillion. That makes for a lot of Treasurys to be sold. China has expressed concerns that the falling dollar threatens the value of its existing U.S. holdings. The United States also needs China’s help in dealing with foreign policy threats. Those include curbing the nuclear ambitions of North Korea and Iran. There’s another reason for a gentler U.S. stance: Analysts believe China already signaled last week that it was preparing to let its currency rise against the dollar. That shift could eventually aid U.S. manufacturers. It might also feed a U.S. economic rebound. But China is also applying some pressure on the U.S. about its currency. On Sunday, China’s top bank regulator said the weak dollar and low interest rates were distorting global asset prices and posing an “insurmountable risk to the recovery of the world economy,” according to a transcript of a speech he made at a financial forum in Beijing. The regulator, Liu Mingkang, said the declining dollar and low interest rates were encouraging a “massive” U.S. dollar carry trade — the practice of borrowing money at low rates in one currency to invest in assets in another currency that offer a higher return. Analysts say China will likely wait months before tweaking the yuan-dollar exchange rate, which now stands at about 6.8 yuan to the dollar. Beijing doesn’t want to appear to be bowing to U.S. pressure. Even then, it will take time for the U.S. to benefit. Mark Zandi, chief economist at Moody’s Economy.com, says he expects the Chinese to begin allowing the yuan to rise against the dollar by next spring, at a rate of about 5 percent a year. At that pace, it would take until around 2015 for the two currencies to be in balance — a process Zandi said could help narrow the U.S. trade gap with China, which last year hit $268 billion. U.S. manufacturers won’t likely be satisfied. They want the administration to push Beijing to raise the yuan’s value further and faster. Their exports have been hurt by China’s move last year to peg the yuan to the dollar. They contend the yuan is undervalued by up to 40 percent. From 2005 to 2008, the Chinese had allowed the yuan to rise about 20 percent against the dollar. It started pegging its currency to the dollar in mid-2008, once the global recession began hurting China’s exports. Normally, a low dollar would make U.S. goods cheaper for hundreds of millions of Chinese consumers. But since the Chinese have kept the yuan tightly linked to the dollar, U.S. exporters haven’t been able to capitalize. “Obama will raise the currency issue (during his visit), but he is in no position to push the Chinese simply because he lacks any levers to make the Chinese do something they do not want to do,” said Eswar Prasad, an economist at Cornell University and senior fellow at the Brookings Institution. China’s central bank made its subtle yet surprising shift in the wording of its exchange-rate policy on Thursday. In the arcane language that governs the $3-trillion-a-day currency markets, many analysts read the shift as a signal that Beijing was getting ready to let the yuan resume rising against the dollar. The dollar has been sliding in value against many major currencies. U.S. exports to Europe have benefited, because the dollar has fallen about 18 percent against the euro since early March. And since the Chinese have linked their currency to the dollar, the dollar’s fall has benefited them, too. It’s made Chinese products cheaper in Europe and elsewhere where currencies have risen against the dollar. If Beijing let the yuan rise, those Chinese goods would become more expensive. For now, a weak yuan isn’t all bad for the U.S. It’s meant a break for American consumers and retailers, such as Wal-Mart, that buy goods imported from China. But many countries have complained about the weaker dollar and China’s close link to it. Some, such as Thailand, South Korea and Russia, have sought to stem the dollar’s rise against their currencies by buying dollars. American manufacturing groups blame the low yuan for contributing to the loss of 5.6 million manufacturing jobs in the past decade. During that time, America’s trade gap with China has soared. “The rising trade deficit is an ominous sign for an economic recovery anytime soon,” Scott Paul of the Alliance for American Manufacturing said after the government reported Friday that the deficit with China jumped sharply in September. The issue has riled some on Capitol Hill at a time when the U.S. unemployment rate has hit a 26-year high of 10.2 percent and lawmakers are under pressure to help create jobs. Legislation in the House and Senate would allow for tariffs on Chinese goods if Beijing’s currency policies don’t change. Treasury Secretary Timothy Geithner, at the Asia-Pacific Economic Cooperation finance meetings in Singapore last week, repeated his mantra that “it’s very important to the United States that we have a strong dollar.” The administration has done nothing to halt the dollar’s slide. Some have seen that as a signal that the U.S. feels a weak dollar relative to major currencies, other than the yuan, helps U.S. exports. But with the United States reliant on foreigners to finance nearly $8 trillion in publicly held debt, it can’t openly back a weaker dollar. Doing so would cause investors to dump dollars. The dollar would sink, U.S. interest rates would likely surge and the fledgling U.S. economic recovery could risk collapse. Many economists contend that even if China let its currency rise sharply against the dollar, Beijing would still enjoy trade advantages. Those include its low-wage work force and barriers it’s erected to limit imports of U.S. and other foreign-made goods. Other factors contribute to the trade gap. China is a high-saving country. It relies on exports to power growth. By contrast, U.S. consumers have driven global growth for decades with high spending and low savings. “Achieving global balance sounds great in theory, but there are a lot of skeptics out there who wonder what the enforcement mechanism will be,” said Nicholas Lardy, an economist at the Peterson Institute for International Economics in Washington. Original post: Obama unlikely to push China hard on currency (AP)

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WASHINGTON (AP) — Overall spending on health care would rise as a result of legislation approved a week ago by the House, and billions of dollars in projected savings contained in the measure will be difficult to maintain, according to a report by a top official at the agency that oversees Medicare. AP – FILE – In this July 10, 2009 file photo, U.S. Rep. Mark Kirk, R-Ill., left, announces his candidacy … The legislation would expand insurance coverage to an estimated 32 million people who now lack it, according to the report, creating a demand for services that “could be difficult to meet initially … and could lead to price-increases, cost-shifting and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” The analysis was issued by Richard Foster, the chief actuary at the Centers for Medicare and Medicaid, which is part of the Health and Human Services Department. The study was conducted at the request of House Republicans, who quickly tried to turn it against the Obama administration. Rep. John Boehner of Ohio, the House GOP leader, issued a statement saying the study “confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’ It’s now beyond dispute that their bill will raise costs.” But Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said the report “shows that our health reform bill will extend the life of the Medicare trust fund by five years, significantly longer than any proposal in recent years.” The same report “estimates that our bill will cover 10 percent more of the population with less than a 1.3 percent increase in national health expenditures that illustrates a bending of the cost curve,” he added. Obama and congressional Democrats have said one of their goals with the legislation is to slow the growth of health care costs nationally. With one exception, Republicans voted against the legislation when it cleared the House, and the GOP now is girding for a fight in the Senate, where debate on health care is expected to begin within days. In the party’s weekly radio and Internet address, Rep. Mark Kirk of Illinois accused House Democrats of missing opportunities to improve the legislation when they rejected Republican proposals to limit lawsuits and give states more flexibility to enact innovative changes. Kirk, who is running for the Senate in next year’s elections, said health care costs could be lowered by “reining in lawsuits” and allowing consumers to buy coverage from across state lines. The report issued by Foster estimated that as a result of the legislation total health expenditures would be an estimated $289 billion higher in the coming decade than would otherwise be the case, slightly less than 1 percent. Separately, the report cast doubt on the claims of House Democrats that the bill is fully paid for. It said because of reductions in planned Medicare payments, acute care hospitals, skilled nursing facilities and home health care agencies “could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for some beneficiaries).” Any attempt to remedy that problem “would likely result in significantly smaller actual savings” than estimated, the report said. Congressional budget experts say the House-passed bill would cost $1.2 trillion over 10 years and expand coverage to an additional 36 million people. The Republican plan Kirk touted is estimated to push down premiums for privately insured people but would reduce the number of uninsured by just 3 million, according to an analysis by the Congressional Budget Office. The legislation that passed would raise $460 billion over the next decade from a surcharge on incomes over $500,000 for individuals and $1 million for couples. There are also more than $400 billion in cuts to Medicare and Medicaid and a new $20 billion fee on medical device makers. The GOP bill had no new taxes, and unlike the House-passed measure, would permit insurance companies to continue denying coverage on the basis of pre-existing medical conditions. GOP address: http://www.youtube.com/RepublicanConference View original post here: Study suggests costs rise under health care bill (AP)

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WASHINGTON (AP) — Overall spending on health care would rise as a result of legislation approved a week ago by the House, and billions of dollars in projected savings contained in the measure will be difficult to maintain, according to a report by a top official at the agency that oversees Medicare. AP – FILE – In this July 10, 2009 file photo, U.S. Rep. Mark Kirk, R-Ill., left, announces his candidacy … The legislation would expand insurance coverage to an estimated 32 million people who now lack it, according to the report, creating a demand for services that “could be difficult to meet initially … and could lead to price-increases, cost-shifting and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.” The analysis was issued by Richard Foster, the chief actuary at the Centers for Medicare and Medicaid, which is part of the Health and Human Services Department. The study was conducted at the request of House Republicans, who quickly tried to turn it against the Obama administration. Rep. John Boehner of Ohio, the House GOP leader, issued a statement saying the study “confirms that this bill violates President Obama’s promise to ‘bend the cost curve.’ It’s now beyond dispute that their bill will raise costs.” But Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said the report “shows that our health reform bill will extend the life of the Medicare trust fund by five years, significantly longer than any proposal in recent years.” The same report “estimates that our bill will cover 10 percent more of the population with less than a 1.3 percent increase in national health expenditures that illustrates a bending of the cost curve,” he added. Obama and congressional Democrats have said one of their goals with the legislation is to slow the growth of health care costs nationally. With one exception, Republicans voted against the legislation when it cleared the House, and the GOP now is girding for a fight in the Senate, where debate on health care is expected to begin within days. In the party’s weekly radio and Internet address, Rep. Mark Kirk of Illinois accused House Democrats of missing opportunities to improve the legislation when they rejected Republican proposals to limit lawsuits and give states more flexibility to enact innovative changes. Kirk, who is running for the Senate in next year’s elections, said health care costs could be lowered by “reining in lawsuits” and allowing consumers to buy coverage from across state lines. The report issued by Foster estimated that as a result of the legislation total health expenditures would be an estimated $289 billion higher in the coming decade than would otherwise be the case, slightly less than 1 percent. Separately, the report cast doubt on the claims of House Democrats that the bill is fully paid for. It said because of reductions in planned Medicare payments, acute care hospitals, skilled nursing facilities and home health care agencies “could find it difficult to remain profitable and might end their participation in the program (possibly jeopardizing access to care for some beneficiaries).” Any attempt to remedy that problem “would likely result in significantly smaller actual savings” than estimated, the report said. Congressional budget experts say the House-passed bill would cost $1.2 trillion over 10 years and expand coverage to an additional 36 million people. The Republican plan Kirk touted is estimated push down premiums for privately insured people but would reduce the number of uninsured by just 3 million, according to an analysis by the Congressional Budget Office. The legislation that passed would raise $460 billion over the next decade from a surcharge on incomes over $500,000 for individuals and $1 million for couples. There are also more than $400 billion in cuts to Medicare and Medicaid and a new $20 billion fee on medical device makers. The GOP bill had no new taxes, and unlike the House-passed measure, would permit insurance companies to continue denying coverage on the basis of pre-existing medical conditions. GOP address: http://www.youtube.com/RepublicanConference More: New study says costs rise under health bill (AP)

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We here at TPC aren’t the only ones concerned about the parallels with Japan.  There appears to be an increasingly loud drumbeat over the shocking similarities between Japan in the 90’s and the U.S.   This morning, Hong Kong’s leader Donald Tsang had some rather alarming comments: “I’m scared and leaders should look out.  America is doing exactly what Japan did last time.” As opposed to dealing with our issues here at home, Tsang believes the Fed has created a dollar carry trade that is simply reflating bubbles all over the world: “We have a U.S. dollar carry trade at the moment.  Where is the money going — it’s where the problem’s going to be: Asia.  You can see asset prices going up, not only in Korea, in Taiwan, in Singapore and in Hong Kong, going up to levels that are incompatible or inconsistent with the economic fundamentals.” As we’ve previously mentioned, the parallels between the current deleveraging cycle here in the U.S. and Japan’s deleveraging cycle of the 90’s, are numerous.   Credit Writedowns recently posted this excellent video from Fox Business which succinctly touches on many of these similarities.   I highly recommend readers take a look (attached below). One of the most interesting takeaways from the video is the current tax situation in the U.S.   In Japan, the credit crisis was prolonged mainly because Japan attempted to bail their way out of their sinking ship.  Rather than deal with the problems directly (IT’S THE DEBT STUPID!) they attempted to circumvent the problem by creating an environment where the government spent hordes of money to prop up failing institutions.  Here in the U.S., we have not only bailed out failing institutions to the tune of several trillion dollars, but we have also continued to promote fiscal irresponsibility via government programs such as cash for clunkers and the first time homebuyers tax credit.  Making matters worse, we have a Federal Reserve and Treasury which have agreed to double team the ailing dollar as they print money to no end and effectively punish the prudent while rewarding the speculators (the same bastards that helped create this mess to begin with).  Our tax issues have not yet reared their ugly head, but trust me, they are coming. What we haven’t quite dealt with is how the government is going to overcome their massive revenue shortfalls and ever expanding debt.  As Jim Jubak recently described , they are going to come back to the consumer for another blow to the knees.  No, the bailouts weren’t enough.  Destroying the dollars in your pockets isn’t enough.  Because of their fiscal irresponsibility they are going to raise your taxes in 2010.  And don’t be fooled.  The income tax may not spike, but they will get you in every other way they can.  Sales tax, real estate taxes, etc etc.   You are paying for their mistakes.  Whether you were prudent or not. Richard Koo is convinced that we can spend our way out of this mess .  I am not so sure.  There’s only one way to deal with a debt problem.  Attack it head on and force those that made bad decisions to restructure and get their house in order or pay down that debt.  Injecting a bloated system with more debt does nothing but kick the can down the road (no matter what the stock market does in the near-term).   The video is attached: Read more from the original source: YOU SHOULD BE VERY CONCERNED ABOUT THE PARALLELS WITH JAPAN

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William Pesek opines: Barack Obama sure has lots to discuss on his maiden voyage to Asia as U.S. president. Yet all this is just conversation compared with the real issue on Asia’s mind: a wobbly dollar that’s putting the region’s money at risk. Think of this trip as a visit to America’s banker, and an unpleasant one. Asia wants assurances that the U.S. can repay its fast-mounting debt and prevent a dollar crash. The reality dawning on Asia is that Obama can’t offer them such a pledge — not with U.S. borrowing so out of control. Unfortunately this sort of misdiagnosis is common – that The US is borrowing in an “out of control” fashion on its own initiative. Nope. America could not dream of borrowing $2 trillion a year in new commitment, and meeting the debt service on $14 trillion (current + next year’s deficit), if interest rates were at 10%. This simple fact puts the lie to any claim that we have an “independent central bank.”  We have no such thing, and as a consequence all the whining and crying about “Audit The Fed” bills is not just misplaced – it is an outright misdirection and scam. The Fed has never truly been independent, save once – under Paul Volcker.  Never before or since has The Fed acted without due regard – on its knees if you will – before Congress and The Administration. Volcker did it because despite the heat he knew he would take (and he did) it was necessary.  This is where the much-vaunted “independence” claim has arisen from. But that was one man, not a structure. It was one person with conviction and willpower, not the pantywaists that now infest The Fed. I have often opined that the issue is not now and never has been a gold standard or lack thereof.  Hard money monetary systems have been subject to the same “boom and bust” nonsense that we have experienced since the 1970s, and in fact, they were just as common and often more damaging.  1873, for example.  Or Tulip Mania.  South Seas bubble?  Asian Tiger? The problem is always the same – what I call “The Wimpy Syndrome” .  Left to their own devices, politicians, when confronted by a desire to spend money they don’t have, will always resort to eating the hamburger today and trying to pay next Tuesday. The theory behind an “independent” central bank is that it is supposed to be immune to The Wimpy Syndrome , in that it can control borrowing costs through liquidity actions. That’s a mighty big knob they got…. No, not the monetary policy one.  The other one – attached to Dodd, Frank, Obama, Ways and Means, Pelosi (well ok, not Pelosi) and Reid. Since Volcker’s time at The Fed the executive and legislative branches have willingly turned a blind eye to the scam machine known as “Wall Street.”  Oh sure, Wall Street has legitimate functions – capital formation is important, as is floating bond sales.  No problems there.  The issue comes about when the 50 basis points is no longer enough and greed starts to press people to look for 55, then 60, then 100 – and the only way to do it is to lie, cheat and steal.  The campaign coffers fill up and the byzantine world of Federal Law and Regulation come out to protect the cheaters, even if only by obfuscation. Likewise when the politicians want to spend more money.  Normally you’d have to tax more to spend more, but that’s not politically acceptable.  So we float some more bonds, claim everything is ok, and off we go spending money we don’t have. “ Deficits don’t matter ” becomes the mantra, and despite the fact that many Democrats bemoaned Dick Cheney mouthing those words, President Obama and Pelosi’s House have done nothing to change that viewpoint.  Instead they have accelerated the unsupportable spending – full throttle. What is supposed to happen to scammers is that when they get caught they go to pound-you-in-the-butt Federal Prison (not the “Club Fed” golf outing style) and the companies they run lose their corporate charter, as (effectively) did Arthur Andersen.  What is supposed to happen to the government when it tries to spend more than it makes is that the “Bond Market Vigilantes” show up.  That is, to fund ever-rising debt the bond market will ordinary demand more and more coupon (interest), thereby serving as a brake on unsustainable government spending trends. This presumes The Fed doesn’t interfere in the latter, and the crooks don’t manage to find the means (legal or not) to get The Federal Government to ignore their scams. That’s a very nice fantasy you see there Mr. Magoo. So let’s cut the crap.  If the Asians don’t like us borrowing so much money stop lending it to us.   Cut the crap with the circle-jerk mentality that mercantilist political schemes are in some way compatible with honest and fair dealing.  They’re not, any more than the vendors in Shanghai hawking software .et.al. are all selling “fully licensed and legal copies.” This nonsense about the dollar ever having been ”safe” is a bad joke.  Certainly the corrupt politicians in China, Japan and elsewhere are well-aware of the principle of seigniorage – that is, the “value” of money less the cost of printing it.  Why would they believe our political machine wouldn’t exploit the very tool they have used themselves?  Such hubris. At the same time if The Fed and its members are “concerned” about the destruction of the only thing they have to sell (dollar-based credit) then pull the system liquidity down until rates move higher.  A lot higher.  Keep doing it until the crap stops – until Congress either stops spending or the auctions fail and they’re forced to cut it out and the carry trade is made unprofitable and thus is unwound. The issue is not now and never was about the economy.  When I ran MCSNet I could have grown the company 10x faster by using leverage – that is, debt – than operating on a cash basis.  I refused, because while I might have wound up with 10 times as much money, I might have also wound up with a big smoking hole in the ground where my firm once was.  Debt is not necessary, other than self-liquidating trade credit, in the operation of a firm, and indefinite geometric growth is not possible in any space of finite resource – like this rock of finite size we all live on. That doesn’t mean there aren’t responsible uses of debt.  There are.  But playing Wimpy writ large to the tune of $12 trillion dollars isn’t one of them, nor is operating a financial institution at 20, 30 or 40:1 leverage (that is, with just over $2 in capital for every $100 in “assets”.)  The latter only makes sense if you have reason to believe that if you blow it (remember, as little as a 3% loss in such a situation wipes you out!) the taxpayers will step in and “save” you. That’s exactly what they both expected and got for the most part, right? Economic contraction isn’t necessarily bad, nor is deflation.  Both can be, but both squeeze out the bad actors – the scam artists and those who simply promised the impossible – and make them pay through bankrupting them.  That’s exactly what is supposed to happen on a somewhat-regular basis, and in fact it is necessary to have a sustainable economy – the scammers and imprudent need to be flushed on a regular basis or they crowd out all the legitimate business people (after all, you can always make more money stealing!) until only the scammers are left! Until either Asia or Bernanke grow a pair, shut their jawboning, lying yaps about “concerns” and act we will see no meaningful change – or reform.  That is, you, the average American, will continue to be asset-stripped, you will see your real standard of living decline, and ultimately, you will be tossed into the street and onto the public dole, until that too collapses under its own weight. Welcome to reality. Read more: President Obama’s Asian Problem

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Online criminals have used the Automated Clearing House (ACH) system to facilitate the theft of more than $100 million from small and medium businesses, the FBI warned this week. The attacks typically use social engineering via e-mail messages to install malicious software on the computers of managers responsible for a business’s financial transactions. The Trojan horse then transfers money from the firm’s account, when the manager signs onto the business’s bank account. The FBI has had reports of firms losing hundreds of thousands to millions of dollars, according to an advisory posted on the FBI’s Internet Crime Complaint Center (IC3). “In most cases, the victims’ accounts are held at local community banks and credit unions, some of which use third-party service providers to process ACH transactions,” the FBI stated. “The bank account holders are often small- to medium-sized businesses across the United States, in addition to court systems, school districts, and other public institutions.” Data indicates that criminals are quickly ramping up their operations. Last month, the FBI estimated that more than $40 million has recently been stolen from firms, according to the Washington Post . In one example, a Silicon Valley construction firm had $447,000 siphoned from its account in 27 separate transactions in a matter of minutes. Other recent research has shown that small and medium businesses are likely to have cut or frozen spending this year. The criminals transfer money, usually in increments of less than $10,000 so as to remain unreported, to the accounts of “money mules,” people who willingly or unwittingly agree to transfer money for a cut of the proceeds. The money typically is transferred by the accomplices to accounts in Eastern Europe, the FBI said. There are signs that the online thieves are taking more aggressive steps to stop victims from reclaiming their cash, the alert stated. “In one case, the subjects (criminals) used a distributed denial-of-service attack against a compromised ACH third-party provider to prevent the provider and the bank from recalling the fraudulent ACH transfers before the money mules could cash them out,” the alert stated. If you have tips or insights on this topic, please contact SecurityFocus . Posted by: Robert Lemos Continued here: Brief: Gov’t warns firms about online robberies

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Michael C. Thomsett is author of over 70 books in the areas of real estate, stock market investment, and business management. His latest book is The Options Trading Body of Knowledge: The Definitive Source for Information About the Options Industry. Thomsett’s other best-selling books have sold over one million copies in total. These are Getting Started in Options, The Mathematics of Investing, and Getting Started in Real Estate Investing (John Wiley & Sons), Builders Guide to Accounting (Craftsman), How to Buy a House, Condo or Co-Op (Consumer Reports Books), and Little Black Book of Business Meetings (Amacom). Thomsett’s website is MichaelThomsett.com. He lives in Nashville, Tennessee and writes fulltime. in Part 1, Michael Thomsett explains the background of the options market and why options provide tremendous flexibility for all types of traders, even the highly conservative. To read Part 1, click here . A Creative Strategy: The “Double-Whammy” Short Put Selling puts is much less risky than selling uncovered calls. In theory, a stock’s price could rise indefinitely, making short calls a problem. However, with a short put, you reduce risks in two ways. First, a stock’s price can only fall to zero, limiting the worst-case outcome. Second, on a practical level the true floor for a stock’s price is its tangible book value per share. (Price can fall below this level, but it is unusual.) Selling puts creates a “double-whammy” strategy and helps you to manage your portfolio. The first part of this strategy is generation of cash. When you sell, you receive money. This not only adds cash to your account, but also discounts the exercise risk. For example, if the strike price is $20 and you get 3 ($300) for selling a put, you have reduced the potential risk level to $17 per share. To avoid losing money on the position, you can close the put or roll it forward. Or you can simply allow the in-the-money put to get exercised, so that you acquire 100 shares above market value. (As long as the stock’s current market value lies between the strike and the discounted value, you don’t lose money. In the previous example, the discounted basis would be $17 per share, so if the current value is at $17 or more, you do not lose money due to exercise.) The forward roll âEuro” buying to close the original short put and selling another expiring later âEuro” is an effective way to avoid exercise. If the stock’s value has fallen since the time you opened the short put, you can also roll forward and down to a lower strike. This not only avoids exercise; it reduces the basis if and when the short put is exercised. Selling puts does contain risk, although it is limited. This strategy should be used only when (1) you consider the price (strike price minus put premium you receive) to be a good price for the stock; (2) you would be happy to acquire shares, meaning you have qualified the company and its fundamentals as a stock you would be happy to own; and (3) you fully understand the risks in the strategy and consider the put’s premium justified by the fundamental attributes of the company. (The dollar value of premium also affects the decision. For example, if you can sell a put for only $18, is that enough to justify the decision?) If and when exercise does occur, you can immediately enter into more strategies. These include selling another put to increase your holdings; writing a covered call against the long stock; or entering an advanced strategy like a short straddle. (As long as you own 100 shares of stock and write in-the-money calls and puts, the short straddle consists of a covered call and an uncovered put. This generates maximum cash (discounting basis) for fairly low market risk. So the strategy doesn’t stop at exercise or expiration; it is only the first step in what can easily become a profitable and effective portfolio management system. When you analyze specific strategies to maximize leverage while holding risks in check, avoid another mistake: Don’t get caught up in the dollar value as much as in the actual yield, compared on an annualized basis. Getting a higher premium is not always the best way to go. For example, a premium of $300 for a stock with a $20 strike is a 15% return. But if you have to wait 24 months until expiration, the annualized return is really 7.5% (to annualize, divide the rate of return by the holding period, and then multiply by 12 months: 15%/24 x 12). In this case, you get a better return selling a three-month put for $100 (yield is 100/2000 = 5.0%), but annualized it is 20.0% (5.0%/3 x 12 = 20.0%). So the $100 premium is actually a better rate of return than the longer-term $300 premium. The comparison of returns on an annualized basis helps avoid common mistakes that even seasoned options traders make. This is especially important when studying advanced strategies like the “double-whammy” put or the short spread. It is all too easy to lose sight of the desired end goal, when the immediate prospect of rich premiums can cloud your judgment. The best way to make smart comparisons is to annualize before you analyze. Conclusion: In the past, before the days of the Internet and online discount brokers, options were not practical for a majority of traders. Today, this has all changed. Transaction fees are lower than ever before and you do not need to place orders through a stockbroker or even a floor specialist. Today, every trader can place trader directly and, usually, see orders filled almost instantly. Devising good portfolio management strategies relies on three key attributes. First, risk levels have to be acceptable. Second, the strategy should meet your investment and trading goals (including being willing to acquire shares of stock in the future). Third, anyone entering a strategy should understand the risks and the full range of possible outcomes. Options truly are the product for the age, allowing everyone easy access, affordable fees, and a range of strategies you can fit to your own risk level. The flexibility of options allows you to tailor a strategic program to suit your needs and to serve as a good fit for your personal level of risk tolerance. The same cannot be said for any other product. For more trading strategies, go to TradingMarkets.com/reports. Follow this link: Managing Your Portfolio With Options, Part 2 (TradingMarkets.com)

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Sensitive gov’t docs leaked over peer-to-peer Published: 2009-10-30 The Congressional Committee on Standards of Official Conduct confirmed on Thursday that sensitive files from the group’s deliberations had been leaked to the public via a peer-to-peer file sharing network. Some 30 members of the House of Representatives and staff members are currently being investigated by the bi-partisan group of representatives, according to a confidential report prepared by the committee in July and leaked inadvertently by a staff member. The 22-page report summarizes the investigations of the ethics committee, according to an article in the Washington Post . “Our initial review suggests that this unlawful access to confidential information involved the use of peer-to-peer file sharing software on the personal computer of a junior staffer, who is no longer employed by the Committee, while working from home,” the committee said in a statement issued on Thursday. “The potential exposure is limited to several specific documents.” The security slip is the latest by members of Congress. Despite holding multiple hearings on the failings of federal agencies to secure their systems, multiple members of Congress have had their own systems compromised and data stolen . In 2006, a staff member of a Republican lawmaker attempted to hire hackers to change a college grade, but fell prey to practical jokers at Attrition.org. In another incident in 2004, two Republican staffers accessed thousands of confidential Democratic memos and leaked them to colleagues. In the latest incident, the committee warned colleagues to take care with confidential documents. “Although peer-to-peer technology may offer benefits to the users of such networks — whether consumers, businesses or government — they should also be aware of (the) risks that may be associates with their use,” the committee said in its statement. If you have tips or insights on this topic, please contact SecurityFocus . Posted by: Robert Lemos Visit link: Brief: Sensitive gov’t docs leaked over peer-to-peer

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What do you do if you’re on the wrong side of a slowing market? Selling in a slump is part mental adjustment, part common sense. Here are some critical pieces of advice for selling your home in this market: Price it right. Most real estate agents agree that pricing your home correctly is one of the best strategies in a competitive market. But this is also one of the toughest hurdles for sellers who remember asking prices from several years ago. Because things have been changing in this market from month to month, it can be hard to get a handle on what kind of pricing the market will allow. This means you must rely heavily on the expertise of your real estate agent and a property appraiser. Remember: That was then, this is now. Simply forget that your neighbor sold his fixer-upper back in 2004 in three hours for $20,000 above the asking price. The new “normal” is likely to involve making concessions to your buyer, such as price adjustments, home repairs, or help with closing costs. Get picky. Invite a brutally honest friend to walk through your home and point out potential turnoffs for buyers. A fresh set of eyes may catch things (the spot on the wall where your three-year-old squashed PlayDoh, for example) that a proud homeowner no longer sees. Remove the clutter. Excess stuff is visually distracting, and it creates a bad first impression. Rent a storage unit to house non-essentials while your home is on the market. For just a few hundred dollars, you’ll have given your house a mini-makeover that buyers will appreciate. Create neutral territory. While you don’t have to paint everything white, it does help to tone down unusual color choices and to remove personal items from view (bye-bye, Elvis memorabilia!). You want potential buyers to be able to envision themselves in your home, not critique your taste. Sweat the small stuff. Repaint, replace fixtures, clean, plant flowers — in short, do whatever you can do to make your home put its best foot forward to a potential buyer. With a glut of inventory, buyers can afford to be choosy. Think on your feet. Sellers need to stay alert in this kind of market. Another house comes on the market in your neighborhood? Ask your agent to visit it and see how the price and condition compare with yours. Get a lowball offer? Before you turn it down, get the latest comps for your area to see if prices have shifted. Getting traffic in your house but no offers? Make sure your agent is calling other real estate agents for their feedback. Staying on top of your home-selling process is the key to securing a good offer. While the sellers of today must be made of sterner stuff than in years past, there’s no reason to panic. People are still buying, just not with the same wild-eyed intensity of yesteryear. Follow these tips to optimize your position all the way to the closing table. For more on managing your real estate Foolishly: When Is the Right Time to Sell? Spruce Up Your Home to Sell Get It Done: Pick the Right Listing Agent

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Another day, another 7,000 people run out of unemployment benefits. One month after the House passed a bill extending unemployment benefits, the issue is still being debated in the Senate. Democratic leaders in the Senate introduced a bill two weeks ago to lengthen benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% would receive an additional six weeks. Senate Republicans want to add several amendments, including one that would pay for the extra benefits with stimulus funds rather than by extending a federal unemployment tax. While leaders in both parties are trying to negotiate a compromise, Senate Democrats Wednesday took a step to bring the bill to the floor as early as the end of next week. If it passes, the Senate legislation must then be reconciled with the House version, which extends benefits by 13 weeks in high-unemployment states. Meanwhile, the bickering has cost people like Crystal Jordan of Dolton, Ill., their benefits. The single mother of three ran out in late September. She is one of the 1.3 million people set to lose their benefits before year’s end if Congress doesn’t act, according to the National Employment Law Project, an advocacy group. In October alone, more than 200,000 people will fall off the rolls. Lawmakers twice lengthened the time people can receive checks to as much as 79 weeks, depending on the state. Jordan lost her administrative support job in the spring of 2008. She had never been unemployed before and hasn’t been able to find work since, despite sending out 10 resumes a day. Jordan is also finishing her bachelor’s degree in business management. She hopes that will give her the edge she needs to find a job in 2010. The $1,000 check she received every two weeks allowed her to pay the rent and feed her family. Now, she doesn’t know how she’ll cover next month’s bills. “I am fearful we will all end up on the street because I can’t find a job and have no income,” Jordan said. “Everyone’s household is extremely tight at the moment so I cannot lean on friends or family for any support.” More Americans than ever before are in Jordan’s situation. More than one in three people who are unemployed have been out of work for at least six months, according to the law project. The unemployment rate hit a 26-year high of 9.8% in September . “We’re talking about people who’ve been unemployed for well over a year,” said Judy Conti, federal advocacy coordinator at the law project. “If they had savings, it’s gone. This is their last lifeline.” Gregg Rock, a business strategy consultant, drained his savings after joining the ranks of the unemployed in summer 2008. He was forced to move back to his mother’s home in Huntington, N.Y., for the first time in more than 20 years. With so many people looking for work, Rock feels his best chance is land a new job is through networking. But it costs him $18 just to trek into Manhattan, not to mention $4 for a cup of coffee at Starbucks, where he often meets people who he hopes will lead him to a job. Rock’s benefits ran out last week. Now, he says, he’ll be forced to drive a cab at night or take a bartending job just to earn enough to keep job hunting. “Unemployment is what allows you to afford to be out there networking,” Rock said.

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“For the homebuyer who’s up for the challenge, it can mean getting a property at less than market value,” says Aaron Lewis, broker/owner of The Lewis Team at Prudential California Realty in Turlock, Calif. He offers this example: “If the home is listed at $170,000 and needs $10,000 worth of repairs, take a look at comparable properties in the area. If the house would be worth $200,000 with the repairs done, then you’re getting a $200,000 property for $180,000 and that’s a great deal.” In addition, to move properties more quickly, says F.F. “Chappy” Adams, president of Illustrated Properties, in Palm Beach Gardens, Fla., “lenders are often making significant repairs, replacing major items or offering repair assistance.” That alone may make the home, once repaired, a good investment down the road.

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