Obama says consider everything in tackling US debt

President Obama told his commission working on the fiscal budget that everything will be considered in the attempts to decrease the large U.S. budget deficit. The main fear is that the majority holder of American debt belongs to foreign countries and this may threaten the U.S. economy. As the economy recovers, the US government is looking to slowly return to healthier fiscal spending and levels.

More Than a Million in U.S. May Lose Jobless Benefits

Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit. They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million.

It’s a deadline that has rarely been mentioned in recent debates over jobless benefits, in which Republicans have delayed aid because of cost concerns.

Fed: Economy better, rates to stay low

The Federal Reserve stated that it see further signs of improvement in the U.S. economy, but not enough to start raising key interest rate from near 0% anytime soon. The Fed's statement Wednesday once again spoke of a U.S. economy now in recovery, stating that "economic activity has continued to strengthen and that the labor market is beginning to improve." But the central bank made little change in its language used to describe the outlook for its policy, saying it expects that economic conditions will "warrant exceptionally low levels of the federal funds rate for an extended period," as it has at every meeting since June of last year.

The fed funds rate, the central bank's key overnight lending rate, is a benchmark used to set interest rates on a wide variety of consumer and business lending. In December 2008, the Fed cut the rate to near 0% in an effort to spur economic activity, and has left it there ever since. "The Fed feels more comfortable with the recovery, as we all are. But the pace of the recovery is still disappointing," said Silvia. "If housing is at depressed levels and hiring is still weak, what's going to happen if they start to raise rates?"

But other economists are worried that the low rates and the trillions of cash that the Fed has pumped into the economy through various programs will feed inflation and a new asset bubble. Raising rates and pulling cash out of the economy are the tools the central bank typically uses to keep prices in check. Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, said even with the economic weakness, it would be safer for the Fed to start taking the first steps to raise rates, including more hawkish language in its statement.

H-P Gambles on Ailing Palm

This is an interesting article about Hewlett Packard's decision to buy Palm for $1 billion.

Libor for 12-Month Dollars Rises to Highest This Year

This article describes reasons why the London intra bank offered rate has risen to its highest rate this year. Makes one wonder if the federal funds rate might follow that same trend.

On the edge of the abyss

European countries that use the euro are in panic on the fact that Greece is defaulting on its debts. Countries that use euro are going to meet in order to discuss how to lend and help Greece. Greece is trying to ban the short-selling of shares on Greece's stock market, but this is not helping. People still percieve that Greece will default on its debts. Greece is asking for up to €45 billion ($60 billion) in emergency loans from euro-zone governments and the IMF this year. Investors do not seem convinced that euro-zone governments will be able to muster the political will to hammer out an agreement.

Ben Bernanke announces the new 100

This is Ben Bernanke's statement about the release of the new $100 bill on Feb. 10, 2011. It will have lots of new security features like the other newer bills do to keep confidence in our currency and central bank and to keep ahead of counterfeiters.

Companies in U.S. Plan to Increase Employment, Survey Shows

This article talks about how companies believe that the "Great Recession" has come to an end. In response to this belief, companies are going to start hiring again. With an increase in the amount of sales companies are able to increase payroll. Experts forecast that even though companies have the money to increase the amount of employees, employment wont start increasing for another six months. In addition this increase in employment, the economy is expected to grow faster then 3 percent. It seems all signs are pointing to an improvement in the U.S. economy, it will be interesting to see what will happen next.

The ads, many of which blatantly advertise prostitution, are expected to bring $36 million this year, according to a new projection of Craigslist’s in

Craigslist (the web site)increased its revenue by 22% this year, largely from its controversial sex advertisements. That financial success is attracting criticism from law-enforcement officials who say the ads are still being used for illegal ends.

The ads are expected to bring $36 million this year, which is three times the revenue in last year’s projection.

Craigslist has been fighting a winning battle against the Law-enforcement officials who are trying to bring an end to the sex ads. Officials of orgnizations that oppose human trafficking say Craigslist remains the largest online hub for selling women against their will.

China Pledges to Keep ‘Relatively Easy’ Policies Amid Recovery

Chinese officials have pledged to extend their "proactive" fiscal measures and maintain a "relatively easy" monetary policy, suggesting that the global economic recovery remains provisional. China's central bank governor, Zhou Xiaochuan, said in at an IMF meeting that, "We will continue to implement a proactive fiscal policy and a relatively easy monetary policy, and will continuously improve the policy package to respond to the international financial crisis to main good momentum of the economic recovery." While also adding that "the outlook for the global economy faces many uncertainties," suggesting that perhaps there is more to come and that the extent of the effects from the financial meltdown are yet to be felt still. Or could he mean that the ball is in the consumer's court and the uncertainty lies in whether their confidence and spending return to normalcy?

China’s economy expanded 11.9 percent in the first quarter from a year earlier, the biggest gain since the second quarter of 2007, as lower borrowing costs and the government’s $586 billion stimulus package boosted spending on roads and other projects. While exports increased 24 percent in March, slower than economists forecast, bolstering the government’s argument for keeping stimulus measures even as inflation quickens, thus showing skepticism.

According to Zhou, China will continue with “stable and relatively rapid” growth this year, while balancing “inflation expectations." Also, the central government projects gross domestic product growth of about 8 percent and an inflation rate of 3 percent this year.

Google Attackers Gained Access to Computer Code

Attackers who breached Google Inc.'s systems last year gained access to computer code for the software that authenticates users of Google's email, calendar and other online programs, according to a person familiar with the matter.

Google said it believed that the attackers were trying to access the Gmail accounts of Chinese human rights activists. Google said they traced the attacks back to China.

South Africa Redoubles Efforts Against AIDS

South Africa is currently in a huge buildup of testing, treatment and prevention that United Nations officials say is the largest and fastest expansion of AIDs services ever attempted by any nation. South Africa is trying to overcome criticism for the former President Mbeki questioning whether HIV caused AIDs and suggested that anti-retroviral drugs were harmful. Harvard researchers estimated that the government could have prevented the premature deaths of 365,000 people during the last decade if it had provided the drugs to AIDS patients and medicines that help stop pregnant women from infecting their babies.

Current President Jacob Zuma inaugurated a campaign to test 15 million of the country’s 49 million people for H.I.V. by June 2011.

Technical Support: Signs Point to More Stock Gains

The article continuing economic recovery. According to the technical analysts who look at internal signals in the stock market, there are signs of gains in the market. This is important to the economic stabilization.

Existing home sales soar in March

Recently, after along time a heat wave is being seen in the real estate industry. In march the existing homesales has increased to 6.8% may be becuase homebuyers are racing to get the tax credit that expires in april. This might sound like a positive tone in the real estate industry but there is still doubt how people are taking the news as. Are they still scared of investing in the housing industry expecially after what happened in the recession of 2008? Or they are trying to grab the tax credit advantage as many did for the sub prime mortgage?

This is an interesting topic of debate. But the good news is people came out of that shock of 2008 and are showing eagerness in ivesting once more, which surely will move the economy into new direction.

Gasoline prices hold steady

After US went into recession in 2008 the oil price plummeted all of sudden from nearly $150 dollars each barrell to about $60 each barrell. But the steady recovery of the US economy brought along a steady increase in the price of crude oil over the last 6-9 months. This correlation of economy and the oil price has always been a threat to many countries.
Last week when the volcanic ashes caused many airports shut down the oil price dipped and again it recovered in a week to an average of $2.85 a gallon. This positive correlation might indicate that as the US economy recovers over the next few years there will be an oil bubble inflation which might turn into someother economic downturn. At this point of time, what is more important is investment in renewable energy source. Since a lot of money is being invested as a recovery plan, investment in such sectors will secure future also present.

Fed Said to Press Largest Banks to Lower Pay Incentives for Risk

this article is about how the fed is urging banks to not reward their employees for investing in higher risk investments, because of the problems it can cause. I believe that this is the feds way of trying to prevent more problems like the fraud that Goodman Sachs has recently commited.

Democrats Unite on Finance Bill, Pressuring G.O.P.

This article fits nicely with our current topic, the economic crisis of 2008. In response to the crisis, democrats are pushing legislation that would impose tighter regulations on derivatives. Any bank dealing in swaps would not be allowed to borrow from the Federal Reserve’s emergency borrowing window or from federal deposit insurance. Republicans plan to block this legislation n the Senate tomorrow.

Fed Said to Press Largest Banks to Lower Pay Incentives for Risk

This article is about the reaction of the Fed towards banks who compensate executives and employees based on short term, risk taking strategies. The Fed reviewed five large banks and came up with a set of guidelines that based pay on more long term incentives rather than risky investments. The big concern is that these banks' board of directors are not monitoring compensation enough. The Fed proposes a series of tests for pay-related risks for each bank. This year, there are many CEOs who are either foregoing salary, foregoing bonuses, or both. I think this is a great idea to promote trust in the integrity of the banking sector again. Also, the biggest problem here seems to be that the former compensation system promotes greed so much that employees are willing to risk hurting the company for their own gain.

Chrysler posts 1st profit since bankruptcy

Chrysler has posted its first quarterly operating profit since being acquired by an Italian automaker. Chrysler will also said it will remain on target to break even on an operating basis for the full year. The company attributes its operating profit to continued price discipline on all products as well as the successful launch of the all new Ram Heavy Duty pickup.

From the Mall to the Docks, Recovery Signs

This is yet another article enlightening the average American about the subtle signs that indicate we are almost through with the "great recession." According to this article the docks are getting crowded again throughout the states, and many malls are beginning to see more and more customers coming back. These are good signs as it shows consumers are gaining confidence. More manufactures are restocking their goods and consumers are starting to purchase them again.

China Ponders Imposing New Property Taxes

China is thinking about introducing a higher taxes on real estate, which is new to China. It is possible that the new tax will be a U.S.-style property tax- which would mark a significant escalation of its struggle to cool down a booming property market.

The large construction that has been going on throughout China is the main recovery driver for China. Construction also reinforces China's demand for raw materials, which helps support global prices for commodities.

Local economists want to use the taxation to curb property speculation and bring in runaway prices. Chinese authorities have been said to be considering higher transaction taxes that target luxury properties or possibly a tax on property values similar to the style of local governments in the U.S.

The reasoning is that higher taxes will make it less attractive to invest in real estate. Local governments having more revenue from property taxes could reduce their incentive to keep prices high to profit from sales of land-use rights.

Opponents fear new taxes would shatter confidence in the real-estate market, leading to a bust that would damage the entire economy.

United, Continental Merger Talks Snag on Price

United Airlines and Continental Airlines are continuing their talk on merging. Disagreements over which share price to use for the stock-swap deal has developed. People have been saying that if they figure the price for the stock-swap deal, the two airlines will merge. If they cannot figure it out, the talk will dissolve as they did two years ago.

Continental thinks the fairer deal is to use the 30-day share price prior to April 7. United wants to use the price the day before the deal is signed.

Immigration Law Boosts Arizona Governor

Jan Brewer, Governor of Arizona (R), has received criticism and has possibly threatened her political future after she implemented an increase in taxes. Without an increase in revenue, she said Arizona will have to make deeper cuts in education, health care and public safety. Brewer's decision to crack down on illegal immigration may have saved her political future.

Brewer stands to get a boost from her signing of an immigration enforcement bill. The law requires police to question people they suspect of being in the U.S. illegally. It allows police to arrest anyone they reasonably suspect of being in the country illegally. It also makes foreigners to carry documents that prove legal residency.

President Obama said the bill need to be examined for violations of civil rights. Rights groups, faith-based organizations and some law-enforcement officials warned the measure would promote racial profiling and harassment. Law scholars also said it conflicted with federal authority over border issues.

There has been public outrage about violence related to drug and human smuggling ever since the death of a rancher near the U.S.-Mexico border. Polls have shown that Arizona voters are largely in favor of the measure, which makes illegal immigration a state crime.

Israel Lifts Ban on Apple’s iPad, Communications Ministry Says

This was a rather strange article that I found about how Israel has lifted their ban on Apple's Ipad. I wouldn't expect a country that is as technologically advanced as they are to ban such a popular product.

A continued Greek tragedy

A thorough and insightful update from the economist about the unfolding Greek financial crisis. Some interesting points about the possibility of Greece defaulting on its credit, an option that the economist describes as messy and painful.

The way up Helping poor students complete college

College is a crucial rung on the economic ladder. In 2007 graduates earned 77% more per hour than those with only a high-school degree. The share of poor teenagers aspiring to college tripled from 1980 to 2002. Nevertheless, rich, stupid children are more likely to graduate than poor, clever ones. Sadly, the increase in the proportion of Americans who graduate from college has slowed

A Graying Population, a Graying Work Force

In an aging population, the elderly are increasingly being taken care of by the elderly. Professional caregivers — almost all of them women — are one of the fastest-growing segments of the American work force, and also one of the grayest.

For Greece, Restructuring Is No Longer Unthinkable

This is an article from a series of articles covering the ongoing crisis Greece has been in. Experts are now saying that not only can Greece restructure its debt and not default on paper but that they actually will be able to restructure. Total government debt was $365 billion at the end of 2009 which is 115% of GDP. The best way politicians feel Greece can restructure its debt is to allow to repay this debt over a multi-year period.

Oil Contango Soars as Oklahoma Brims With Crude: Energy Markets

The article talks about an oil contango, which is a term used to describe an upward sloping prices for futures. Prices tend to have an upward sloping trend, when there is a high cost of carry, which is the cost of storage of the commodity. According to the article, on April 21 crude for delivery in June costs $1.95 a barrel less than for July. This is the biggest gap since Dec. 15. This gap was mainly caused by high storage costs of oil that were emerged by 5.8% increase of the level of inventory in Oklahoma storage.

G-20 Seeks Credible Plans to Cut Stimulus, Curb Debt Burdens

The article talks about the meeting of G-20 finance chiefs and discussion of the "credible" plan of withdrawing economic stimulus once the recovery strengthens. Chiefs of G-20 Central banks were elaborating exit strategies from macroeconomic and financial support measures to avoid so called "cheap money" that can lead to high inflation and potential overheating. In addition, Japan's parliamentary secretary of finance, Hiroshi Ogushi, raised an issue of preventing sovereign risk from spreading to other nations. This issue was raised due to a recent economic problem Greece faces, and its threat to the European Union as a whole.

Africa's New Oil Riddle

This article talks about how the poor distribution system of oil in Nigeria results in the disruption of its supply. This inefficiency is the reason why Nigeria has not seen much development as a country. Unlike in Norway where the discovery of oil in the North Sea resulted in high standards of living in the country. There have been mixed views about how things will turn out in Uganda and Ghana where oil reserves have recently been discovered. I believe an improvement in the distribution system of oil in Africa can result in an increase in its supply. This might help in keeping the price of oil constant.

Obama renews push for Wall Street reform

In this article, Obama states that the risks taken in in Wall Street and the US Financial Sector has a large effect on the current economic crisis. He says that they has taken "enormous, irresponsible risks" which hurt all sectors of the economy. Obama now is trying to overturn the republicans in Congress to pass a new Wall Street reform law.

The republican leaders in congress are united in not supporting the bill to impose tougher regulations on banks and finance firms and to frame a new consumer financial protection agency. This would only limit the amount of investments people make in wall street. I understand that the recession is not great, but recessions are apart of the economy. It is unfortunately in the economic cycle and is guaranteed to happen again in the future. Not everything can be fixed over night with a bill. It will work itself out; it might just take a while longer.

Bailing out Greece--An extreme necessity

Greece’S prime minister, George Papandreou, faced the television cameras on Friday 23rd April to anounce that his government would draw on emergency aid to tide it over for the rest of the year. Mr Papandreou decribed the rather embarassing request to to other euro zone members and the IMF as “an extreme necessity.” This followed a week in which yields on Greek bonds reached an alarming 8.9%. That in part reflected an announcement by Eurostat, the European statistics agency, that Greece’s budget deficit reached 13.6% of GDP in 2009, even worse than it had previously thought. The agency added that the number might be revised up again, owing to the poor quality of the available data. Moody’s, a credit-rating agency, responded by giving the latest of many downgrades by agencies to Greece’s sovereign bonds.The interest rate for emergency aid from other members of the euro zone will be 3.5 percentage points above the benchmark “risk-free” rates for euro loans. That works out at around 5% for a fixed-rate loan, which is less than markets were asking of Greece before the deal was struck but still steep. Portugal and Ireland, the next-riskiest borrowers in the euro area, pay less than half as much for three-year money. Germany pays a mere 1.3%.
The IMF is expected to make €15 billion available, at interest rates that are likely to be a little kinder to the Greeks. The resulting package of €45 billion should be enough to finance Greece’s budget deficit for the rest of this year as well as repay its maturing debts. Yet Greece is likely to need far more support than this as it struggles to put right its public finances.

How long should we help the unemployed?

This article discusses the debate of extending unemployment benefits. Congress has already extended unemployment benefits to 99 weeks, but this is still not sufficient for hundreds of thousands of people who cannot find a job in this economy. There is no movement in Congress currently to extend more weeks. Some economists and lawmakers say that another extension would further delay these Amercans entry into the workforce. Yet advocates want unemployment benefits to be extended because it keeps people from defaulting on their mortgages and turning to public services.

Homebuilder stocks on fire

It is reported that, after the government reported a surge in new home sales, the shares of major U.S. homebuilders recovered on Friday, and this optimistic trend has even spread to a broader market.

It is said that this optimistic trend is resulted from a recent spate of upbeat corporate performance and Greece’s decision to accept an emergency financial aid package form other European countries and IMF, which rebuilds the confidence of investors. As a result, according to the Census Bureau, the sales of new homes in March reached 26.9% from February sales which were the strongest since last July, and the percentage gain was the biggest month-over-month gain in 47 years. However, on the other hand, despite the current surge in new home sales, many analysts warned that sales could still suffer after a popular homebuyer tax credit expires this month. Therefore, as many experts suggested, over all, the outlook for the housing sector is mixed and, to a certain degree, unpredicted.

An extreme necessity

This article provides a detailed analysis about the situation of Greece. It is said that Greece’s announcement of resorting to the European zone and IMF--- its dependence on emergency aid is only a temporary relief. And the Greek bonds have reached an alarming 8.9% a week before, which in part revealed that the Greece’s budget deficit reached 13.6% of GDP in 2009, even worse than it had predicted. What is worse, according to the previous prediction, an aid of €45 billion from other European countries and IMF will be available to Greece and it would enough to finance Greece’s budget deficit for the rest of this year and repay its maturing debts; however, according to the current situation, it seems that Greece needs far more support than the amount mentioned above.

Furthermore, in this article, it provides the predictions both from optimistic perspective and pessimistic perspective. it also talks about what if Greece will make a default option.

Homebuilder stock prices sky rocket

After the increase in new home sales, many homebuilder stocks took off. Hovnanian Enterprises had an increase of 10% by midday and Pulte Group and Lennar Group both closed with five percent increase. This huge rally came after home sales increased 26.9% in Feb.

BOE Bond-Purchase Plan Risks Inflation Credibility, Besley Says

The Bank of England’s bond-purchase program may jeopardize its inflation-targeting credibility because it blurs the divide between fiscal and monetary policy. The 200 billion-pound ($307 billion) program has made the bank a creditor of the government and allowed the Treasury an element of oversight over its decisions, diminishing its independence. The focus of the plan on gilt purchases also has given the bank a goal of supporting the government bond market.

Multiple policy commitments may undermine the public’s perception that the bank is committed to holding annual gains in consumer prices at 2 percent, the authors said. The bank’s inflation-targeting framework may come under pressure as the economy struggles to emerge from the recession, they said. Inflation targeting depends not so much on that separation being achieved but the public believing that it’s going to be achieved going forward, and that’s where the greatest risk lies.

Tax Credit Helps Lift New-Home Sales

In March, new-home sales jumped as buyers rushed to qualify for a federal tax credit and realtors zeroed in on the tax credit, which is expiring soon, as a means to ramp up interest. New single-family houses sales rose 27% in March to a seasonally adjusted annual rate of 411,000, up from the pace of 324,000 for the previous month of February. As home builders suggest an increase in foot traffic (or confidence) in recent weeks, many speculate it is spurred from buyers hoping to qualify for a federal tax credit.

The federal tax credit is available to people who fulfill two requirements: people who sign a contract to purchase a principal residence by April 30 and to complete the purchase by June 30. The tax credit can be as much as $8,000 for first-time buyers and as much as $6,500 for people who have already owned a home for a least 5 consecutive years during the past 8 years. The credit is available for individual taxpayers with annual incomes of as much as $145,000 or joint filers with incomes as much as $245,000.

The federal tax credit provides emphasis from the government to increase consumer confidence and spending. Still feeling the effects of the recent recession, the American consumer is reluctant to spend on big ticket items such as housing, especially since the collapse of the housing market. With a ridiculous low 30yr mortgage rates available at the moment, the market (businesses) and the government are trying to spur change in the consumer behaviour to spend as the economy, for a better part, has mostly recovered.