Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 02.02.2010
U.S., China lock horns BEIJING -- China and the United States were locked yesterday in an escalating row over U.S. arms sales to Taiwan, with Washington rebuffing Chinese protests and insisting the deal promotes stability in the Taiwan Strait. The Pentagon Friday sparked the latest challenge to China-U.S. relations under President Barack Obama when it approved the US$6.4 billion sale of Patriot missiles, Black Hawk helicopters, mine-hunting ships and other weaponry. China responded furiously with a raft of reprisals, saying it would suspend military and security contacts with Washington and impose sanctions on U.S. firms involved in the deal. Beijing warned of “severe harm” to relations.
Iran caught up in China - US spat By Kaveh L Afrasiabi - Asia Times Just days after United States Secretary of State Hillary Clinton used the occasion of a speech in Paris to lecture China on its national security interests and warned Beijing of "economic insecurity and diplomatic isolation" if it did not sign onto new sanctions against Iran, China hit back. On Saturday, Beijing escalated its rhetoric against US arms sales to Taiwan, which it views as part of its territory, by suspending all military exchanges with the US, summoning the American ambassador to Beijing and using Clinton's own language about "long-term implications".
Beijing furious at arms sales to Taiwan US' $6.4b deal with Taiwan puts at risk cooperation with Washington In its toughest response in three decades to US arms sales to Taiwan, Beijing announced over the weekend that it would curtail military exchanges with Washington, and sanction US companies involved, and warned of severe harm to bilateral ties. Though overall relations between the two world powers are unlikely to collapse over the single issue, Chinese experts said, their cooperation on key international matters such as those related to Iran, Afghanistan and the Democratic People's Republic of Korea (DPRK) could be severely impacted.
China media decries U.S.' 'arrogance' on Taiwan BEIJING -- China's state media accused Washington Monday of “arrogance” and “double standards” in going ahead with arms sales to Taiwan, saying Beijing's threat to penalize U.S. companies over the deal was very real. The Pentagon sparked the latest challenge to China-U.S. ties under President Barack Obama when it approved the US$6.4 billion sale to Taiwan of Patriot missiles, Black Hawk helicopters, mine-hunting ships and other weaponry. China responded furiously, saying it would suspend military and security contacts with Washington and impose sanctions on U.S. companies involved in the deal.
Sanctions target US firms For the first time Beijing vowed to censure private companies involved in the arms sales to Taiwan by the United States, a measure seen as concrete by experts and demanded by Chinese netizens for a long time. China said it would impose unspecified sanctions on the companies involved and reduce international cooperation with the US unless it canceled the new arms package. The foreign ministry didn't list the companies involved in its draft statement over the weekend. But Sikorsky, Lockheed-Martin, Raytheon and Boeing, are four companies involved in the latest $6.4 billion sale. All four have so far declined to comment to the press.
Obama losing control of Iran policy By Ali Gharib - Asia Times WASHINGTON - In a surprisingly swift move last Thursday night that could have wide-ranging implications, the United States Senate passed a bill containing broad unilateral sanctions to punish foreign companies that export gasoline to Iran or help expand its domestic refinery capabilities. The voice vote came at the eleventh hour before the chamber recessed so legislators could go home to campaign. The bill cannot come before the president to be signed into law until a conference procedure combines it with a similar house bill, the Iran Refined Petroleum Sanctions Act, passed in October.
Fiscal Stimulus in a Real Depression By Bill Bonner - Daily Reckoning America’s president proposes a tax credit to businesses that take on new employees. We never met a tax cut we didn’t like. This one is no exception. It lowers the cost of labor, making it easier to hire and pay people. So far, so good. But is Mr. Obama proposing to cut government spending also? Not really. He’s pretending that the feds can have their cake and eat it too…that they can forgo the income given up by the tax credit…and yet, still spend it.
Gold steady; eyes U.S. jobs data By Miho Yoshikawa TOKYO (Reuters) - Gold prices held steady near $1,105 an ounce on Tuesday as investors refrained from betting heavily in either direction ahead of a key U.S. jobs report due later this week. Bullion jumped more than 2 percent the previous day after data showed the U.S. manufacturing sector grew in January at a faster rate than expected, suggesting an improving outlook for the economy and inflationary pressures ahead.
Gold Bounces Back As Us Dollar Cools Slightly Against Euro Gold prices improved after slipping below $1,080, after the US Dollar continued its rally, getting support from Friday’s updates on the Q4 US GDP, which rose 5.7% to beat market expectations, and the Chicago PMI (Purchasing Managers Index), which increased to 61.5 from 58.7 in December, signalling higher industrial activity in the Midwest. The greenback eased 0.4% against the euro today, cooling off after the surge and propping up gold, which is seen as an alternative investment to the US currency. The yellow metal’s appeal as an inflation hedge increased last week after the Federal Reserve decided to leave the interest rates at near zero.
Gold may rise for first time in week as dollar spurs demand LONDON -- Gold, little changed in London Monday, may rise for the first time in a week as a pause in the dollar's rally spurs demand for the metal as an alternative investment . The dollar lost as much as 0.4 percent against the euro after earlier gaining to a six-month high. Gold, which typically moves inversely to the greenback, fell 1.1 percent last week, a third consecutive decline, as the dollar climbed 2 percent. “The U.S. currency is the key at the moment,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said Monday in a report. Still, “clear evidence of renewed and persistent physical buying” is needed for prices to rally, he said.
China is Still King of the Gold Hill By Rocky Vega - Daily Reckoning China produced over 300 tons gold in 2009, a new world record in output. Already, for the past three years, China has been the world’s largest producer ahead of South Africa, and now the massive nation is also on the verge of becoming the world’s leading gold consumer. According to Reuters: “China’s gold output jumped 11.34 percent to a record of 313.98 tonnes in 2009, the China Gold Association said on Thursday, securing the country’s position as the world’s largest producer of the yellow metal.
Precious Metals Next Rolling Bubble by Captain Hook, Financial Sense A point I wanted to make clear with respect to our discussion the other day is hyperinflation must be justified in the minds of the doers, having the political will of the people behind them. This is why we will need another round of financial crisis for public consumption, and we know from comments made earlier in the week the set-up is for a possible black swan event in summer, with stocks topping out no later than spring. What’s more, and as you will see below, it should be noted that a top in stocks could come sooner this time, possibly by options expiry this Friday if a blow-off continues, finally snapping the desire of speculators to continue accumulating bearish bets on stock averages in the form of puts.
Gold/Euro - Cup & Handle (continuation pattern) by Gary Tanashian, Financial Sense Aside from what I consider to be bullish fundamentals for gold in all major currencies, even as gold takes a much needed breather in USD, it looks technically compelling in Uncle Buck's chief competition in the toilet paper sweepstakes, the euro. The chart shows a textbook Cup & Handle, complete with the right side high of late November, '09 having exceeded the February, '09 high. I always like to see the right side (most recent) higher then the left (previous high) as this implies momentum and allows for a higher measured target, which in this case would be around 10 if and when the handle breaks consolidation to the upside. I say if because we do not try to predict, but rather show the probabilities. The probabilities, both fundamentally and technically say 'GOLD GOING WELL HIGHER IN EURO'.
Beware Counterfeiters By: Kevin Bambrough & David Franklin Long time readers know that we have written about gold many times over the last ten years, starting with an October 2001 article entitled “All that Glitters is Gold”. We first invested in the precious metal based on the belief that central bank sales were filling a fundamental supply deficit that existed in the gold market. We also wrote that if you believed in gold as a financial instrument you might envision a gold price appreciation of 45% to US$400 per ounce, or even higher, as investors sought to protect their wealth in the ‘bear market’ that followed the 2000 stock meltdown. What a difference nine years have made. In 2010, Central Banks are now close to becoming net buyers of gold while mine output continues to decline. With major indices returning nothing to investors over the last ten years it has been a lost decade for stocks but an excellent decade for gold.
Palladium: The Bullish Case Now Looks Even Stronger Russia's Norilsk Nickel Mine is the world's largest nickel mine, with its by-product, palladium, accounting for 45% of the world’s production. Recent termination of Russian government palladium stockpile sales, due to depletion of the stockpile, is just one of the reasons why palladium has extremely bullish supply/demand fundamentals, and why palladium performed the best among all four precious metals in 2009. Reduction of palladium production from the Norilsk Mine could further restrain the supply, and may prompt major industry users to panic hoard as they did in 2000/2001.
Treasuries Drop as Lawmakers May Dilute ‘Volcker Rule’ on Banks By Wes Goodman -- Feb. 2 (Bloomberg) -- Treasuries fell for a second day on speculation U.S. lawmakers will dilute President Barack Obama’s “Volcker Rule” plan to restrict U.S. financial institutions, easing concern the proposal would crimp the economy. The back-to-back decline comes as Paul Volcker, the former Federal Reserve chairman who has been advocating curbs on the size and trading activities of banks, prepared to testify before a Senate committee on the plan today. Obama’s proposal may be either significantly modified or dropped, DealReporter news service said, citing unidentified lawmakers and staffers.
Big Banks' Risky Trading Should be Curbed: Volcker By: Reuters White House adviser Paul Volcker will urge Congress to curb the risks taken by large banks to help prevent them from being treated as "too big to fail," according to testimony obtained by Reuters on Monday. Detailing a recent proposal known as "the Volcker rule," the former Federal Reserve Chairman will tell lawmakers that commercial banks' proprietary and speculative activities should not be protected by the government. He will also urge international consensus on "appropriate" actions to restrict commercial banks' activities.
US Deflation No Longer a Risk: Fed's Bullard By: Reuters The United States has escaped the danger of a Japanese-style deflationary trap, but it is not yet time to start tightening policy, St. Louis Federal Reserve Bank President James Bullard told the Financial Times. Bullard said in an interview published on Monday that his preoccupation throughout 2009 had been deflation, but the risk had "passed". At a Fed meeting last week, Thomas Hoenig, president of the Kansas City Fed and a rate hawk, argued financial conditions no longer warranted keeping rates exceptionally low for a prolonged period.
Decent Money by Warren Bevan Let’s ponder for a minute. What is money? Looking at an older 1986 copy of The World Book Encyclopedia tells me that money is three things. A medium of exchange. A medium of account. And what I’d like to briefly focus on, a store of wealth. Let’s take a look in our wallets now. Likely there are a few bills, but just as likely there is only a debit, and credit card. We’ll dismiss the credit card since it’s debt, which is NOT money no matter what your told. Looking at your bills you don’t have to think too far back to recall what that $20 could buy then, and now. A pack of cheap gum that only has flavour for five minutes is almost two dollars for crying out loud. So it seems quite simple, without getting into the confusion of the M’s, which are various forms of accounting for money printing, to surmise that the paper dollars do not hold wealth.
The Fed as Giant Counterfeiter Mises Daily: by Robert P. Murphy San Jose State economics professor Jeffrey Rogers Hummel tells all his students that the easiest way to understand the Federal Reserve is to think of it as a giant, legalized counterfeiter. I had always known that the Fed and other central banks were like counterfeiters, but I still thought that the actual mechanics of open-market operations and so forth actually provided some important distinctions.
Bernanke, debt limit, budget deficit, dollar
Repo market to escape planned US bank levy By Michael Mackenzie and Krishna Guha - FT The Obama administration plans to exclude a crucial part of the financial system from a proposed levy on banks’ administration, officials disclosed on Monday. Under the proposed financial crisis responsibility fee, banks would pay a fee of 15 basis points on all liabilities above $50bn (€36bn, £31bn) that are not already subject to an insurance premium paid to the Federal Deposit Insurance Corporation. That placed the $3,800bn US repurchase, or “repo”, market, in which securities are used as collateral for short-term loans, squarely in line for paying the fee.
Banks Gear Up for a Battle U.S. Takes Aim at Proprietary Trading, But Just What is It?; 'the Volcker Rule' By KATE KELLY - WSJ -- The showdown over the future of proprietary trading by U.S. banks is about to begin. One likely fight: defining exactly what proprietary trading is. Wall Street has been hungry for details ever since President Barack Obama proposed curbs last month that would limit the ways banks with insured deposits bet with their own capital. Some answers will emerge Tuesday at a Senate Banking Committee hearing where former Federal Reserve Chairman Paul Volcker is set to testify.
On the Origin of Big Bank Failures By Joel Bowman - Daily Reckoning . . . . One hundred and forty banks bit the dust in 2009…as did the FDIC itself, before it stuck its elongated, purpose-built snout back in to the government funding trough. In total, the assets of these collapsed institutions amounted to some $170 billion. The largest failures by assets were, in order: Colonial Bank ($25 billion), Guarantee Bank ($13 billion), BankUnited ($12.8 billion), AmTrust Bank ($12 billion) and United Commercial Bank ($11.2 billion). That’s pretty impressive. But c’mon! This is a depression. We can do better than that…
Swiss warn UBS bank could collapse Switzerland's justice minister warned in an interview on Sunday that top bank UBS could collapse if sensitive talks with the United States over a high-profile tax fraud investigation fall through. "The actions of UBS in the United States are very problematic. Not just because they are punishable but also because they threaten all of the bank's activities," Eveline Widmer-Schlumpf told Le Matin Dimanche newspaper. "The Swiss economy and the job market would suffer on a major scale if UBS fails as a result of its licence being revoked in the United States," she said.
Obama Proposes $3.8 Trillion Budget Focused on Jobs By Roger Runningen and Brian Faler Feb. 1 (Bloomberg) -- President Barack Obama’s $3.8 trillion fiscal 2011 budget puts an emphasis on job creation with $100 billion in additional stimulus spending, along with higher taxes for the wealthy in an attempt to narrow the deficit. The spending blueprint forecasts this year’s budget shortfall will hit a record $1.6 trillion, following a $1.4 trillion deficit in 2009. The 2011 deficit is predicted to be $1.3 trillion, with deficits remaining above $700 billion for the rest of the decade, according to the projections.
Obama's deficit soars amid job spending By Alister Bull and Jeff Mason WASHINGTON (Reuters) - U.S. President Barack Obama pledged on Monday to halve a record 2010 budget deficit by the end of his first term in office, but made tackling double-digit unemployment his immediate priority with a spending plan that risked public ire and a rough battle in Congress. Criticized by Republicans for raising taxes on wealthy Americans, Obama is under pressure to convince investors and vital creditors like China that he has a credible plan to control the U.S. deficit and debt over time.
Art Cashin: Markets Could Have Multi-Day Rally By: JeeYeon Park - CNBC News Associate Markets started the new month higher, but how long can the trend continue? Art Cashin, director of floor operations at UBS Financial Services, shared his insights. “We’re going to get a little bit of a reflex rally,” Cashin told CNBC. “We survived the weekend—Greece didn’t implode…It is a new month so pension funds and others preload a little money in and get started early in the month, so that will give the bulls a little bit of a bounce," he said. Cashin said the rally could last several days, as the markets were heavily oversold in the last few trading sessions. But it may not have strong underpinnings.
Obama Gives NASA More Money, Cuts Manned Trip to Moon By Alexis Madrigal - Wired The Obama administration has officially decided to end the Constellation mission back to the moon, although the replacement plan faces a tough route through Congress. The new plan, which had been rumored for months, was announced today with the release of the Obama administration’s NASA budget request, which despite the axing of the moon plan delivers a $6 billion funding increase over the next five years. “NASA’s Constellation program — based largely on existing technologies — was begun to realize a vision of returning astronauts back to the Moon by 2020. However, the program was over budget, behind schedule, and lacking in innovation due to a failure to invest in critical new technologies,” the budget summary concluded. “Using a broad range of criteria, an independent review panel determined that even if fully funded, NASA’s program to repeat many of the achievements of the Apollo era, 50 years later, was the least attractive approach to space exploration as compared to potential alternatives.”
Obama unveils $3.8T federal budget blueprint By Lori Montgomery and William Branigin - Washington Post -- The $3.8 trillion budget blueprint President Obama sent to Congress Monday calls for billions of dollars in new spending to combat persistently high unemployment and bolster a battered middle class. But it also would slash funding for hundreds of programs and raise taxes on banks and the wealthy to help rein in soaring budget deficits. "We will continue . . . to do what it takes to create jobs," Obama said Monday. To put people back to work, Obama proposes to spend about $100 billion immediately on a jobs bill that would include tax cuts for small businesses, social-safety-net programs, and aid to state and local governments. To reduce deficits, he would impose new fees on some of the nation's largest banks and permit a range of tax cuts to expire for families earning more than $250,000 a year, in addition to freezing non-security spending for three years.
In $3.8 Trillion Budget, Obama Pivots to Trim Future Deficits By JACKIE CALMES and JEFF ZELENY - NY Times President Obama sent Congress on Monday a proposed budget of $3.8 trillion for the fiscal year 2011, saying that his plan would produce a decade-long reduction in the deficit from $1.6 trillion this year, a shortfall swollen by $100 billion in additional tax cuts and public works spending that he is seeking right away. “We simply cannot continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax money of the American people can be treated like Monopoly money,” Mr. Obama said at the White House.
Obama Seeks $1.9 Trillion Tax Rise on Rich, Business By Ryan J. Donmoyer Feb. 1 (Bloomberg) -- The Obama administration wants to increase taxes on Americans earning more than $200,000 by almost $970 billion over the next decade and take in an additional $400 billion from businesses even as it retooled a proposed crackdown on international tax-avoidance techniques. The budget released today would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers who make more than $250,000 as part of a broad $1.9 trillion tax increase proposal. It proposes to eliminate preferences for oil and gas companies, life-insurance products, executives of investment partnerships and U.S.-based companies that operate overseas.
Obama’s Nightmare Team by Peter Navarro, Ph.D. - Financial Sense Stock market trend: Market in Correction The U.S. markets are in a major correction. If you see any bubblehead portfolio manager on TV telling you this is a great buying opportunity, know that this man/woman is merely a gambler rather than an intelligent speculator. For the foreseeable future, the market is a roulette wheel. Until the dust clears – that is, until market participants figure out the direction of the economy -- this is a good time to be in cash (and non-cyclicals like biotech).
Wells Fargo Shuns Carry-Trade By Dakin Campbell Braces for Risk of Higher Rates Feb. 1 (Bloomberg) -- Wells Fargo & Co., unlike its three biggest competitors, is so convinced interest rates will rise that it sacrificed as much as $1 billion last year cutting back on fixed-income investments. The nation’s fourth-largest bank, whose biggest shareholder is Warren Buffett’s Berkshire Hathaway Inc., reduced investments in mostly fixed-income securities by $34 billion in 2009’s second half, company filings show. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. boosted their holdings by an average of $35.5 billion.
Demand of corporate loans in US falls By Francesco Guerrera and James Politi - FT US banks made it easier for big companies to borrow money for the first time since the crisis, but loan demand fell as corporate America remained worried about the economy, the Federal Reserve said on Monday in its quarterly loan-officers survey. The Fed report underlined banks’ growing desire to lend to companies at a time when politicians are calling on financial institutions to aid the economic recovery by extending credit to companies and consumers.
The economy grew, but were the numbers real? by Anthony Cherniawski - Financial Sense The economy in the U.S. expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines and companies increased investment in equipment and software. The 5.7 percent increase in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance since the third quarter of 2003, figures from the Commerce Department showed today in Washington. Efforts to rebuild depleted inventories contributed 3.4 percentage points to GDP, the most in two decades. The problem with this calculation is that government spending is included in the calculations and government employees are counted twice! This skews the numbers, especially in a quarter that saw government intervention in the markets and an expansion of government jobs (at the expense of private employers).
Be Careful What Your Bumper Sticker Says By David Kravets - Wired "No More Blood For Oil.” Bumper stickers with that phrase were synonymous with opposition to the Iraq War, during the George W. Bush administration. Simply hosting that message on one’s bumper was cause enough to remove two attendees at Bush’s 2005 speech at the Wings Over the Rockies Museum in Colorado. The White House had a policy of excluding those who did not agree with the president from his public appearances. It’s a policy a federal appeals court is upholding in a decision a dissenting judge decried as “simply astounding.”
Obama Might Not Run in 2012 By John LeBoutillier Although it is way, way too early to even begin to think of 2012, it is possible that President Obama will not choose to run again in 2012. In fact, there is a 30% chance of this. Why? Because he already has planted the seed of possibility that he will simply walk away and not risk a humiliating defeat. Three times in recent interviews he has raised the possibility of “not running again” or, as he told Diane Sawyer this week, being a “good one-term President.” Why would a new President already float the idea that he might just chuck it all? Is it because he is scared of losing in 2012?
Is the Great Recession Over? Depends Who You Ask By PETER COHAN - Daily Finance America's most quoted economist, Mark Zandi, chief economist at Moody's Analytics, has a hot new quote: "The Great Recession is over." Zandi made the pronouncement on CBS News over the weekend. Although some analysts will agree, the economists at the National Bureau of Economic Research (NBER) might offer a different assessment. The NBER defines the beginnings and ends of recessions, and when it called the beginning of the current recession -- which began in December 2007, a date that was finally determined in December of 2008 -- it said that employment was the most important factor in defining the timing of the current slowdown: "The committee determined that the decline in economic activity in 2008 met the standard for a recession . . . . The 1.2 million drop in payroll employment so far this year was the biggest factor in determining the start of the contraction. . ."
For Fannie and Freddie, the Future Looks Cloudy By CHARLES DUHIGG - NY Times The Great Bailout is mostly over for the banks. But for those troubled behemoths of the nation’s housing bust, Fannie Mae and Freddie Mac, the lifeline from Washington just keeps getting longer. Fifteen months after Fannie and Freddie were effectively nationalized, neither the Obama administration nor Congressional leaders see a quick solution to one of the thorniest problems in American finance: how to fix the twin mortgage giants without choking the flow of credit to homeowners and dealing a blow to a still-fragile housing market.
Fed Says Fewer Banks Tightened Standards for Lending By Michael McKee and Joshua Zumbrun Feb. 1 (Bloomberg) -- Fewer banks tightened standards for loans to consumers and companies last quarter, a Federal Reserve report showed, as the economy grew at the fastest pace in six years. Banks continued to tighten the terms of loans they did make, and demand for both business and household loans weakened further over the past three months, the Fed said today in its quarterly survey of senior loan officers. “Commercial banks generally ceased tightening standards on many loan types in the fourth quarter of last year but have yet to unwind the considerable tightening that has occurred over the past two years,” the report said.
For Big Pharma, Is Breaking the Law the Price of Doing Business? By MELLY ALAZRAKI - Daily Finance -- The Food and Drug Administration says it has nearly doubled the number of warnings to drugmakers for questionable promotion since President Obama took office. The agency sent 41 enforcement letters 2009, up from 21 in 2008, Thomas Abrams, head of the FDA's Division of Drug Marketing, Advertising, and Communication (DDMAC), tells Reuters. In January alone, the FDA sent nine letters. But even as the FDA tries to regulate direct-to-consumer advertising of prescription drugs -- a practice mostly unique to the U.S. -- promising action against violators, the issue of misleading marketing from advertising to reps promoting off-label uses remains rampant.
USDA Budget Would Rise 2.3% on Food-Stamp Spending By Alan Bjerga Feb. 1 (Bloomberg) -- U.S. Department of Agriculture spending would rise 2.3 percent to $132.3 billion in fiscal 2011 as the number of people receiving aid to buy groceries, the USDA’s biggest expense, reaches records, the government said. The Supplemental Nutrition Assistance Program, formerly called food stamps, will cost $75.3 billion in the year starting Oct. 1, up 3.9 percent from this year, accounting for most of the overall increase, according to the budget President Barack Obama sent to Congress today. Agricultural subsidies would fall 11 percent as the administration tries to limit payments to wealthy farmers.
The Secessionist Campaign for the Republic of Vermont by Christopher Ketcham The President on Wednesday may have reassured Americans that the state of the Union is "strong," but, just the week before, a group of Vermont secessionists declared their intention to seek political power in a quest to get their state to quit the Union altogether. On Jan. 15, in the state capital of Montpelier, nine candidates for statewide office gathered in a tiny room at the Capitol Plaza Hotel, to announce they wanted a divorce from the United States of America. "For the first time in over 150 years, secession and political independence from the U.S. will be front and center in a statewide New England political campaign," said Thomas Naylor, 73, one of the leaders of the campaign.
America's Biggest Rip-offs Text messages - 6,500% markup Are you infuriated every time you open your cell phone bill? Livid when you buy a snack at the movies? These are nine of the rawest deals around. Text messages are short, quick and cheap to transmit. So why are they adding so much to your wireless bill? The messages are such a tiny piece of data that they cost carriers only about one-third of a cent to deliver, according to computer scientist Srinivasan Keshav, who testified before U.S. senators on the issue last summer. But on a pay-per-text plan, the 160-character messages typically cost 20 cents outgoing and 10 cents incoming. That's a markup of as much as 6,500%. OMG!
EBay Users Angry Over Fee Change By SAM GUSTIN - Daily Finance Irate eBay users are slamming the giant auctioneer's recent fee change, saying it will drive up costs for many of the site's sellers. Last week, eBay declared that sellers will be able to list up to 100 items every month for free -- as long as those items have a starting bid of 99 cents or lower. But many sellers claim that the change will result ultimately in higher fees to the company as eBay tries to wring more profit out of each sale. EBay will now take 9% of the final sale price, but no more than $50. Previously, the company had taken 8.75% of the sale price up to $20, and then 3.75% beyond that. As a result, while eBay is accurate in saying that "upfront" costs for sellers are going down, eBay is taking more on the back end, and many users aren't happy about it.
How Stimulus saved 54 jobs Stimulus cash at work From fighting forest fires to laying carpet in day care centers, here's what 5 small businesses that got stimulus-funded contracts are doing with taxpayers' dollars.
Rich-poor gap wider than in 1970 LONDON (Reuters) - The gap between Britain's richest and poorest is wider than it was 40 years ago, a report commissioned by the government said on Wednesday. The National Equality Panel study, authored by academic experts, found that by retirement age the differences in wealth can be "colossal". The panel found "systematic differences" in equality outcomes remained between social groups, and said many people would find the "sheer scale of inequalities" shocking.
If China Sneezes, Wall Street Will Catch A Cold BY JON D. MARKMAN, Money Morning Investors who needed proof of China's increased importance in the post-financial-crisis world only have to look at the nervousness of recent weeks to get a glimpse of the future. When U.S. stocks fell sharply late Friday, they capped off a harrowing 10-day span that has seen the broad U.S. market benchmarks drop by nearly 7%. Emerging markets are down 9%. Not surprisingly, investor fear has sent volatility rocketing 40% - the largest two-week increase since the global financial crisis went nuclear back in October 2008.
GM's plan to sell Hummer to Chinese company delayed By Jeff Karoub, AP Business Writer DETROIT — General Motors' plan to sell the hulking, once-hot Hummer line to a Chinese heavy equipment maker has been delayed by a month, officials said Monday. General Motors and Sichuan Tengzhong Heavy Industrial Machinery said they are extending the deadline to complete the transaction until Feb. 28 pending final approval by the Chinese government. The previous deadline was Jan. 31 for a definitive agreement to sell the line once synonymous with America's love for big off-road vehicles.
Obama boosts budget for State By Nicholas Kralev - Washington Times Money for programs in Iraq, Afghanistan and Pakistan President Obama on Monday proposed a $5 billion increase in the State Department's 2011 budget, most of which is intended for programs in Afghanistan, Pakistan and Iraq — the only three countries to also benefit from an additional $4.5 billion this year. Global health and development aid overseas will go up significantly in the fiscal year beginning in October, while the biggest decreases will affect the fight against HIV/AIDS and migration and refugee assistance.
Taiwan has guns, beef — and politics By Sol Sanders - Washington Times President Obama's Chinese New Year's gift, an arms purchase offer even with a $6.4 billion price tag, couldn't be more welcome to Taiwanese President Ma Ying-jeou. Last March his Kuomintang swept back into office with anti-corruption slogans, promising better relations with the Gigantest Panda across the Taiwan Strait. That peaceful transition reconfirmed for 23 million Taiwanese the first representative government in Chinese civilization's vaunted 5,000-year history. But now the Mandarin-accented, Hong Kong-born, sleek politician's polls are drooping. Suffering from the world recession, constituents now want to know what Mr. Ma has done for them lately. Welcome to democracy.
The Fateful Geological Prize Called Haiti by F. William Engdahl - Financial Sense A former US President becomes UN Special Envoy to earthquake-stricken Haiti. A born-again neo-conservative US business wheeler-dealer preacher claims Haitians are condemned for making a literal ‘pact with the Devil.’ Venezuelan, Nicaraguan, Bolivian, French and Swiss rescue organizations accuse the US military of refusing landing rights to planes bearing necessary medicines and urgently needed potable water to the millions of Haitians stricken, injured and homeless.
Company Bond Sales Fall 7% on Greece, Spreads: Credit Markets By Caroline Hyde, Sonja Cheung and Sapna Maheshwari -- Feb. 1 (Bloomberg) -- Bond sales by nonfinancial companies fell 7 percent in January as the cost to borrow rose from a two- year low on growing concern that governments struggling to pay their debts will derail the economic recovery. Markets have become “pretty nervous again,” Deutsche Bank AG Chief Executive Officer Josef Ackermann said during a panel at the World Economic Forum in Davos, Switzerland, on Jan. 30. He cited sovereign risk and commercial real estate as areas of concern for investors.
War spending surges in President Obama's budget By DAVID ROGERS - Politico President Barack Obama’s new budget, to be released Monday, forecasts two consecutive years of near $160 billion in war funding, far more than he hoped when elected and only modestly less than the last years of the Bush Administration. In 2011 alone, the revised numbers are triple what the president included in his spending plan a year ago. And the strain shows itself in new deficit projections, already hobbled by lagging revenues due to the weak economy.
Is the Great Recession Over? Depends Who You Ask By PETER COHAN - Daily Finance America's most quoted economist, Mark Zandi, chief economist at Moody's Analytics, has a hot new quote: "The Great Recession is over." Zandi made the pronouncement on CBS News over the weekend. Although some analysts will agree, the economists at the National Bureau of Economic Research (NBER) might offer a different assessment. The NBER defines the beginnings and ends of recessions, and when it called the beginning of the current recession -- which began in December 2007, a date that was finally determined in December of 2008 -- it said that employment was the most important factor in defining the timing of the current slowdown: "The committee determined that the decline in economic activity in 2008 met the standard for a recession . . . . The 1.2 million drop in payroll employment so far this year was the biggest factor in determining the start of the contraction. . ."
Excellent 5-part series - discussion on Progressives . . . in BOTH parties, and where we're going.
Glenn Beck- January 29, 2010 - "Egghead Hour" (Part 1/5) Beck and guests examine the Progessivism from the 1900s to present Progressive Liberals, Conservative Socialists, and Progressive goals of Obama
Glenn Beck- January 29, 2010 - "Egghead Hour" (Part 2/5)
Glenn Beck- January 29, 2010 - "Egghead Hour" (Part 3/5)
Glenn Beck- January 29, 2010 - "Egghead Hour" (Part 4/5)
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