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European companies: govt debt hurts business
BRUSSELS – Soaring government debt endangers Europe's business climate because it could hold back economic growth and crowd out financing for companies, European employers said Monday.
BusinessEurope, which represents 20 million European companies, called on EU governments to make "urgent and forceful changes" to public spending, the labor market, taxation and research to get public debt under control and allow economic expansion.
"The severe increase in public debt and structural fiscal deficits now represent a major stumbling block to the recovery," said the group's president, Juergen Thumann.
The group said major budget cuts are needed to make public spending sustainable — but governments should refrain from reducing expenditure on areas that are key for future growth, such as infrastructure and education.
They said governments should call on independent experts to pinpoint how they could shave 10 percent off their spending.
Failure to reduce debt means that nations will spend heavily on simply paying the interest on that debt instead of investing in the economy guaranteed approval cash advance loans.
Many European nations are planning to borrow heavily from bond markets this year to fund their budgets as tax revenues remain low and they pay out more to stimulate growth and extra welfare and unemployment benefits.
BusinessEurope said governments' high debt creates problems for companies because it is "crowding out companies' access to finance and investment plans." Market worries over a possible government default in the 16 nations that use the euro is also "eroding confidence in the European single currency."
Companies are already finding it hard to get loans as easily as before the financial crisis because banks have become more reluctant to lend.
Chinas Wen says external pressure on yuan not helpful
BEIJING (Reuters) – Chinese Premier Wen Jiabao said on Sunday that external calls for yuan appreciation were unhelpful, vowing that Beijing would stick to its own course for currency reform while also warning of global economic risks.
Blending his trademark folksy tone with assertiveness born of leading the world's fastest-growing economy, Wen made clear that China would decide for itself whether and when to let the yuan rise again after re-pegging it to the dollar since mid-2008.
"We oppose the practice of mutual recriminations. External pressure is not helpful for yuan exchange rate reform," he told a news conference to mark the end of China's annual parliament meeting.
"China will stick to implementing a managed market-based and floating exchange rate regime. We will keep the yuan basically stable at a reasonable level."
China's ruling Communist Party has sought to use the Party-run parliament to promote plans to raise welfare spending for farmers and other poorer citizens, even as the government tightens its belt after a burst of feverish spending last year.
But the parliament meeting has coincided with the release of data suggesting China faces inflationary pressures that could require more intensive policy tightening, and also by insistent international calls for Beijing to let the yuan appreciate.
China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a 4 trillion yuan ($585 billion) infrastructure stimulus programme in late 2008.
Its economy grew 8.7 percent last year as a result, by far the fastest pace of any major country. But price increases have followed in the wake of that burst of spending and easy credit.
Consumer price inflation rose to 2 airconditioners.7 percent in the year to February from 1.5 percent in the year to January, spurting to a 16-month high, according to data released last week. The government wants to limit inflation for the whole year to 3 percent.
China has frozen the yuan's exchange rate at around 6.83 per dollar since mid-2008 to cushion its exporters from the financial crisis, drawing complaints from the United States and others that Beijing is providing an unfair subsidy to its firms.
"First, I think the Chinese yuan is not undervalued," Wen told reporters in the Great Hall of the People, where the legislature meets.
"Since the outbreak of the global financial crisis, our efforts to keep a stable yuan made an important contribution to global recovery."
Many U.S. lawmakers complain China's currency is undervalued by as much as 40 percent, and President Barack Obama said on Thursday it was important for China to move to a "more market-oriented" exchange range.
More domestically driven growth, led by consumers more confident about their healthcare, incomes and welfare, is needed to keep the world's third-biggest economy growing at a solid pace, Wen told the parliament session on its opening day on March 5.
Wen unveiled rises of 8.8 percent on social spending and 12.8 percent on rural outlays, more than the rise of 7.5 percent in the military budget, to narrow the wealth gap economists blame for dampening domestic consumption.
(Additional reporting by Chris Buckley and Langi Chiang; Editing by Ken Wills & Kazunori Takada)
Official: Obama wants Yellen as Fed vice chair
WASHINGTON – President Barack Obama wants to nominate Janet Yellen, the president of the Federal Reserve Bank of San Francisco, to take over as vice chairman of the Federal Reserve, an administration official said Friday.
Yellen, who was a top economic adviser to President Bill Clinton, is considered a dove on monetary policy, meaning she is more worried about high unemployment than rising inflation. She would become the second highest ranking Fed official.
Obama is also considering filling two other vacancies on the Federal Reserve board with Sarah Raskin, the Maryland Commissioner of Financial Regulation, and Massachusetts Institute of Technology economist Peter Diamond, the official said, speaking on condition of anonymity because the president had yet to make the announcement.
Fed Vice Chairman Donald Kohn's decision to step down at the end of June opened a third seat on the seven-member board, giving Obama a chance to put a bigger imprint on the central bank. His selections would have to be confirmed by the Senate.
The leaders of the Federal Reserve are especially important when the economy is rocky. The Fed can influence economic growth, employment and inflation through its power to set interest rates no fax payday loan. It also is the country's lender of last resort when banks can't get their money elsewhere — a tool that the Fed exercised fully at the height of the financial crisis. It also supervises thousands of banks, ranging from large bank holding companies to small state-chartered institutions.
The Fed vacancies have stirred debate over the future direction of interest-rate policy. Given the fragile state of the economic recovery and the high jobless rate, Obama may come under pressure to choose people more inclined to keep interest rates low to spur growth and fight unemployment than to raise them to control inflation.
Yellen has a long history with the Federal Reserve system and has been president of the San Francisco Fed since 2004. Before that, she was a member of the Fed's Board of Governors from 1994 to 1997.
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Associated Press writer Jeannine Aversa contributed to this report.
Official: Obama wants Yellen as Fed vice chair
Hot News:GDP to slow in Q1, Fed rates on hold to Q3: poll
NEW YORK (Reuters) – After a growth spurt at the end of 2009, the U.S. economy will slow in the months ahead, keeping the Federal Reserve from raising borrowing costs until the final three months of the year, a Reuters poll showed.
The survey of over 70 economists suggests U.S. gross domestic product will grow at a 2.6 percent annualized rate between January and March, less than half the pace of the fourth quarter of 2009, when it expanded at a 5.9 percent rate.
For all of 2009, the world's biggest economy contracted by 2.4 percent, but the poll predicts it will grow by 2.9 percent in 2010 on an annual basis.
With steady but subdued growth, economists expected the core consumer price index, which strips out volatile food and energy costs, to grow 1.4 percent in the first quarter of the year and to average 1.3 percent over the course of 2010 before edging up to 1.6 percent in 2011.
That suggests the Federal Reserve won't need to raise its benchmark federal funds rate, its main monetary policy tool, until the final three months of the year, a quarter later than predicted in last month's poll.
The Fed funds rate is currently set in a range of zero to 0.25 percent, and the median forecast from respondents see a rise to 0 no fax pay day loan.75 percent between October and December.
"Low inflation is the key to the outlook," said Ethan Harris, head of North America economics at Bank of America Securities-Merrill Lynch. "It allows the Fed to focus exclusively on growth and keep both feet planted firmly on the accelerator."
The Fed has started to unwind some of the emergency measures it adopted during the worst days of the financial crisis. Last month, it raised the discount rate at which banks can access emergency loans.
But officials have said that broader borrowing costs would remain low for an extended period.
After hitting 0.75 percent by year end, economists expect rates to rise relatively slowly, reaching 1.5 percent by mid-2011.
Headline inflation, including food and energy costs, is likely to rise at a 2.5 percent rate in the first quarter and a 2.1 percent rate for the whole of 2010, the survey showed.
(Polling by Bangalore Polling Unit; Editing by Ruth Pitchford)
GDP to slow in Q1, Fed rates on hold to Q3: poll
Hot News:Partisanship comes in waves at US turning points
WASHINGTON – The current partisan divide is as stark and nasty as any in recent history and on almost every issue — from health care to energy independence to reviving the economy — there's little or no effort to find common ground.
But fierce political battle is also a tradition ingrained in American history. If today's hostile environment is particularly intense, it's downright genteel compared to many battles of the past.
The Civil War, when anti- and pro-slavery forces split the nation, is the most extreme example. But there's also the beginning of the 20th century, when the country was becoming more urban and trust-busting Teddy Roosevelt was redefining the role of government.
The current economic troubles have collided with President Barack Obama's efforts to change government amid waves of public anger and protest movements like the tea party.
The angry mood was so discouraging for Indiana Sen. Evan Bayh that the Democrat recently said "I do not love Congress" as he announced he would not run for re-election.
His sentiments have been heard before.
Party politics, President George Washington said in his farewell address in 1796, "agitates the community with ill-founded jealousies and false alarms." It "kindles the animosity of one part against another (and) foments occasionally riot and insurrection."
After two centuries, the nation continues to ignore its founding father's message.
"We've had partisanship ever since we've had federal government," Senate historian Donald Ritchie said. "Bipartisanship is really the exception to the rule."
Partisanship got off to a raucous start in the presidential election of 1800 when the incumbent, John Adams, a Federalist, faced his vice president, Thomas Jefferson, a Democrat-Republican. Adams' supporters portrayed Jefferson as a libertine who would bring French Revolution-style anarchy to the country. Adams was branded a monarchist and characterized as toothless and senile.
The election's repercussions were deadly. Jefferson beat Adams, but under the electoral system at the time the House had to decide between Jefferson and his running mate Aaron Burr, who received the same number of electoral votes. Federalist Alexander Hamilton helped sway the vote to Jefferson, a source of personal animosity that led to a duel in 1804 where Burr shot and killed Hamilton.
But it wasn't until the 1830s — when populist Democrats led by Andrew Jackson took control of the government — that party politics as we know it today really began to take shape, says Sarah Binder, a political science professor at George Washington University. Jackson's opponents referred to him as "jackass," often credited as the source of the donkey as the Democratic Party's symbol.
Binder said waves of partisanship tend to coincide with major changes to the nation as a whole low fee payday loans.
The most dramatic example came in the middle of the 19th century. In 1856, Republican abolitionist Sen. Charles Sumner, in a Senate speech, accused a Democratic colleague, Andrew Butler of South Carolina, of taking an ugly mistress, "the harlot, slavery." Rep. Preston Brooks of South Carolina, Butler's relative, entered the Senate chamber and beat Sumner with a cane, nearly killing him.
The redefinition that developed under Teddy Roosevelt became even more pronounced during the Depression, when Franklin Roosevelt's Democrats and the Republicans debated big government and fought over the creation of Social Security.
The golden age of bipartisanship, to the extent it existed, came in the 1940s through the 1960s, when politicians united behind World War II and the Cold War and neither party had a clearcut ideology. Democrats had their Northern liberals and Southern conservatives, while the GOP was divided between Goldwater Republicans and Rockefeller Republicans.
That all began to change with the civil rights movement and the Republican takeover of the South. After that, said Ritchie, "the Democrats became the liberal party and Republicans the conservatives. There just aren't that many people in the middle who can be persuaded to break rank."
The Congressional Quarterly, which tracks voting trends, says that in 2009 both House and Senate Democrats voted with their party 91 percent of the time on votes where the two parties were at odds. That was at or near record levels of unity for both. House and Senate Republicans were nearly as unified.
That's a sharp contrast to 1968, when only 51 percent of Senate Democrats backed their party on so-called party unity votes, or 1970, when only 56 percent of Senate Republicans fell in line with their party position.
"Clearly you see the country moving into rival camps much more readily and that filters through to the Congress in a hurry," said Sen. Ron Wyden, D-Ore., who has served in the House and Senate for nearly three decades and is known for working well with Republicans.
In the 1980s, he said, there were sharp philosophical differences but it was still possible for President Ronald Reagan and his main antagonist in Congress, House Speaker Tip O'Neill, to work together on Social Security reform.
Voters are disgusted that the two sides increasingly are unable to work together, Wyden said. But he acknowledged it's not going to change until more voters convey that to their representatives in Congress.
According to Wyden:
"It's a lot easier for people to say, 'Look I'm going to go with my partisan friends and try to avoid the shrapnel.'"
Partisanship comes in waves at US turning points
Hot News:Abercrombie & Fitch Same-store Sales Rise 5%
CHICAGO -- Teen apparel retailer Abercrombie & Fitch said Thursday that February sales at stores open at least a year increased by 5%. Analysts had expected the company's same-store sales to decline by 6.9%. Total sales for the four weeks ended Feb payday loans. 27 rose 16% to $198.1 million.
Wholesale clubs grow as supermarkets slide
PORTLAND, Ore. — A steady stream of shoppers looking for deals on necessities has helped wholesale club operators Costco Wholesale Corp. and BJ's Wholesale Club Inc. deliver profit gains while many of their grocery competitors struggle.
Costco and its smaller competitor, BJ's, both reported Wednesday that traffic, profit and sales trends improved at their stores during the quarter.
It's a marked difference from many of its grocery competitors like Kroger Co., Walmart Stores Inc. and others, where food sales that once buoyed business are starting to sink profits thanks to the continued drag of the weak economy and increased price competition.
Costco reported that its second-quarter profit rose 25 percent as strong overseas sales growth and higher gasoline prices lifted its revenue. BJ's Wholesale Club Inc. said its fiscal fourth-quarter profit climbed 5 percent, also due in part to higher gasoline prices effect.
Wholesale clubs have been one of the stronger performers during the economic downturn as they used their size and low-cost format to deliver deals that appealed to cost-concious consumers. And with their promise of all-around savings for members, they have been insulated from the advertising costs and day-to-day price battles of traditional grocers that can cut into profit.
Wal-Mart Stores Inc., for example, is the world's largest grocer but it also operates Sam's Club — the other competitor in the wholesale club industry. When the company reported its earnings in February it said its sales at stores open at least a year fell 1.6 percent overall, due in part to weak grocery sales, but rose 0.7 percent at Sam's Club.
Profits at many large national supermarket chains are slipping as stores battle for every purchase, such as Safeway — which said on Wednesday that its 2010 results could miss expectations after a tough year instant payday loan.
Costco and BJ's both said they saw an increase in traffic and their membership figures grew for the quarter. And sales at stores open at least a year, considered a key indicator of a retailer's performance as it strips away the impact of new stores, improved.
Costco said its sales at established stores grew 9 percent, with a significant benefit from the impact of a weaker dollar and higher gasoline prices. At BJ's, sales at stores open at least a year grew 4.6 percent, with a 2.3 percent benefit from gasoline sales.
But shoppers are still shying away from nonessentials as they grapple with high unemployment, a weak housing market and uncertain futures.
"In terms of discretionary (items), it is creeping along, but I don't see any major turnaround," Laura Sen, president and CEO of BJ's, told investors Wednseday.
Looking forward, analysts are expecting Costco — the largest of the wholesale club operators — to deliver the long-term growth given both its stability and international reach.
Standard & Poor's Equity Research analyst Joseph Agnese said he expects Costco traffic trends to remain strong and see sales benefiting from food prices, which had fallen for some time, rising in the second half of the year.
And while he reiterated a "buy" rating on BJ's shares, saying new club growth and technology investments will help drive long-term market share growth, he cautioned the short-term impacts of those investments could cut into its earnings.
Shares of Costco fell 58 cents to $60.80 in late afternoon trading Wednesday and BJ's fell $1.86, more than 5 percent, to $34.61.
Once a leader in school diversity, NC retrenches
RALEIGH, N.C. – When North Carolina's Wake County decided to do away with race-based busing to desegregate schools, local officials came up with a novel solution to maintain balance.
The new method of assigning students by their socio-economic background rather than race helped to keep campuses integrated. Adopted in 2000, it quickly became a blueprint for other school systems.
That policy, however, has never sat well with many suburban parents — often white and middle class — who argue that the student assignment plan sends their kids too far from home. And a new school board, swept into office by those vocal parents, took the first step toward scrapping the plan Tuesday night.
The board that governs schools in Raleigh voted 5-to-4 to stop busing students to schools outside their neighborhoods. The change requires final approval at a meeting later this month.
Dozens of parents and students lined up to speak as discussion began late in the afternoon. Curtis Gatewood, a black man, urged the board not to dump the diversity plan and decried "white racists." His comments were interrupted by jeers.
"If you want to go to hell, don't expect to take our children with you," he said to the board as authorities approached to calm him down.
The issue has revived the term "segregation" and the brought the weight of history into recent school board meetings. Some parents and students around the state capital have implored the newly elected leaders to back away from their plan to drastically alter the diversity policy.
"Please preserve the New South. Don't take us back to the Old South," parent Robert Siegel told the school board.
Reversing the diversity rules would follow a cascade of similar shifts around the South, and particularly in North Carolina, which once was a model of desegregation. Now the state is increasingly starting to mirror an era many thought had past: On one side of the state, in the coastal town of Wilmington, an elementary school of several hundred students has just one who is black. On the other, in the banking hub of Charlotte, a primary school of similar size has just one student who is white.
In the military town of Goldsboro, starkly divided schools have led civil rights leaders to accuse local school officials of creating "an apartheid district."
Ron Margiotta, the new board chairman in Wake County, vowed that the change there was in the interest of students because it would allow parents more options and refocus families on the schools in their neighborhood. He bristled at any suggestion that the move had something to do with race.
"It's something that offends me," Margiotta said in an interview before the vote. "Nobody's going to go back to Jim Crow days."
The diversity policy in Wake County became a popular model in 2007, when the Supreme Court limited the use of race in how districts assign students. Its current policy sends students to schools to achieve socioeconomic diversity, which also improved racial diversity by frequently sending lower income black children from the city's center to predominantly white schools in the suburbs no faxing pay day loans. Some schools also created magnet programs to attract students from other neighborhoods with advanced courses in foreign language, science and other topics.
Margiotta said the busing program has not helped minority students and has distracted from focusing on stronger education policy.
"What we're doing isn't working," Margiotta said.
But Ebere Collins, a black mother of two students in the district, said her son travels one hour by bus to get from his home in Raleigh to a middle school in the suburb of Wake Forest. While the trip is long, she feels it helps her son mingle with people outside of the neighborhood and ensures that all students have access to the same resources.
"Mix them up, let them experience each other," she said. "By scattering them around, they will enjoy the benefits other people are enjoying."
Gary Orfield, a UCLA professor who studies busing and civil rights, said the entire South has been resegregating for the past 20 years — which he deemed "a gigantic historic tragedy." He praised Wake County's current policy and warned that a renewed focus on neighborhood school assignment will be most damaging to children who come from poor or uneducated families because those students benefit most from integration.
"What it does when you go to 'neighborhood' schools is it means that you put the kids who are most affected by school opportunity in the schools with the weakest opportunity," Orfield said. "That's a tragedy."
If the diversity policy is pulled back, Orfield said, Raleigh can expect to see some of the same impoverished, troubled schools as Detroit, Philadelphia, New York and Chicago.
In Charlotte, the site of a groundbreaking Supreme Court case that led to three decades of busing to ensure racial balance, schools have spent much of the past several years resegregating after getting federal court approval to allow parents more choice of where to send their kids.
At Beverly Woods Elementary, just north of the Quail Hollow Country Club that hosts a namesake PGA Tour event, 79 percent of the students are white. A few miles up the road, at Montclaire Elementary, only 4 percent of the students — just 19 out of 450 — are white.
There are no plans in Charlotte to revisit busing. Pamela Grundy, a parent in Charlotte who has decried the divisions within the school district, said leaders in Raleigh should take notice.
"The lesson of Charlotte is that desegregation will go away so quickly. Once you lose it, you can't get it back," she said.
Electric Cars Moving From Prototype to Showroom
FRANKFURT — Gherardo Corsini, director of electric vehicle implementation at General Motors’ Opel/Vauxhall unit, made his way Sunday to Geneva from Germany more quietly than most. He was at the wheel of a prototype of the Opel Ampera.
“Getting lots of curious looks at the rest area,” one of Mr. Corsini’s passengers, Dietmar Thate, manager of social media for Opel, tweeted after the car made a short stop Sunday.
The hybrid car, which will be put on display this week at the Geneva International Auto Show, is designed to run on batteries for about 60 kilometers, or 35 miles, before a gasoline-powered generator kicks in for longer trips.
Opel has displayed the Ampera at previous auto shows. But this time, the message — underscored by Mr. Corsini’s 560-kilometer road trip — is that the darn thing actually works.
One of the big themes of the Geneva show, which opens to the media Tuesday and to the public Thursday and runs through March 14, is that electric-powered vehicles are moving inexorably from prototypes to actual production — whether the auto-buying public is ready or not.
“The time is past when companies only displayed studies,” said Ferdinand Dudenhöffer, director of the Center for Automotive Research at the University of Duisburg-Essen in Duisburg, Germany. “Now the industry is moving toward hard facts.”
But the shift toward electric vehicles also represents a huge leap of faith for the automakers, especially as they emerge from a devastating industry downturn. To be able to produce electric cars in a few years, they must invest billions now without knowing how large the market will be.
In addition, there is no consensus on what kind of technology will prevail. The possibilities include pure battery power, some combination of batteries and internal combustion engines and more exotic solutions like hydrogen fuel cells.
“Right now, car companies don’t quite know what technology to bet on,” said Peter Wells, co-director of the Center for Automotive Industry Research at Cardiff University in Wales business cards design. “It’s probably not safe to bet on just one.”
Pushed by governments eager to do something about global warming and fearful of missing a technology shift, companies are moving ahead anyway.
Opel, which already has its hands full trying to regain market share in Europe from Volkswagen and Ford, is scheduled to start commercial production of the Ampera — a cousin of the Chevrolet Volt — near the end of next year in Rüsselsheim, Germany. BMW said last week that it would produce an electric vehicle made partly with lightweight carbon fiber at its existing plant in Leipzig, with market introduction no later than 2015.
Toyota, even as it struggles to repair a reputation battered by unintended acceleration in some models, is scheduled to show the latest prototype of its plug-in Prius hybrid in Geneva. The car will be able to travel 25 kilometers solely on battery power and is expected to hit the market in 2011.
A few all-electric cars are already on the market or nearly so in limited numbers. And some industry experts believe that such vehicles present an opportunity for carmakers to create a new market among well-heeled, environmentally conscious buyers.
“Interesting customer segments are waiting desperately in some cases for these products,” said Gregor Matthies, a partner at the consultant Bain & Co. in Munich.
In November, Daimler began producing small numbers of battery-powered versions of its two-seat Smart car in Hambach, France. The company has said it plans to produce 20,000 a year, beginning in 2012.
Mitsubishi’s MiEV, already in Japanese showrooms, is scheduled to be available in Europe later this year. Nissan plans to introduce its Leaf in the United States, Europe and Japan in December.
Even sports car makers, bastions of internal combustion, are moving tentatively toward electric power.
1 2 Next Page »Reports: Prudential PLC may buy AIG unit
NEW YORK – Prudential PLC, Britain's largest life insurer, is exploring a bid for the Asian life-insurance arm of American International Group Inc., according to media reports Saturday.
The Wall Street Journal, citing people familiar with the matter it did not name, reported a deal could come in a week. Prudential would pay with a mixture of cash and stock, but the terms are still being negotiated, it reported. Talks of a deal were first reported by Sky News.
The Journal reported on its Web site that the deal could be worth about $30 billion.
AIG has said it plans to sell the unit, American International Assurance Co., or spin it off into a separate company through an initial public offering, part of an effort to pay off the debt it owes to the U.S. government.
Messages left with AIG and Prudential seeking comment Saturday were not immediately returned.
AIG said Friday it lost $8 best humidifiers.87 billion in the fourth quarter as its general insurance business remained weak. It also warned it may need additional support from the government. However, AIG has included such warnings in past filings with the Securities and Exchange Commission.
AIG was bailed out in September 2008 by the government as the financial crisis spiraled out of control. The insurer has received aid packages with a total value of $182.5 billion from the government. In return for that financial support, the government received an 80 percent stake in AIG.
AIG reported $6.2 billion in expenses from repaying government loans in the fourth quarter.
Prudential PLC is not connected to Prudential Financial Inc., based in Newark, N.J.
Republicans slam Obama loan help effort
WASHINGTON – Republicans are taking aim at the Obama administration's struggling mortgage assistance program. They argue the effort is making the economic crisis worse and say many homeowners would be better off as renters.
In a report Thursday, Reps. Darrell Issa, R-Calif. and Jim Jordan, R-Ohio., called the program a misuse of taxpayer money.
Though $75 billion has been set aside for the program, so far only $15 million has been spent.
They also said it distorts the housing market by keeping people in their homes who would be better off going through foreclosure.
Homeowners who enroll in the program but then drop out "would have been better off if they had defaulted earlier and spent the payments on more affordable housing options," the two lawmakers wrote.
Obama administration officials, however, reject that argument. They say the program gives a second chance to homeowners who were given shoddy loans during the housing boom. And they defend their track record, even though only 116,000 homeowners have completed the process out of the 1 million enrolled since the program's launch last March.
The program "is providing critical assistance to borrowers experiencing a range of financial hardships and who would otherwise be facing the loss of their homes," said Phyllis Caldwell, chief of the Treasury Department's homeownership preservation office in testimony prepared for a House hearing portable air conditioners.
The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. To complete the process, homeowners need to make three payments and provide proof of their income, plus a letter documenting their financial hardship.
But experts warn that hundreds of thousands of borrowers will not complete the process because they are found to be ineligible during an initial trial phase. Housing counselors complain that many homeowners remain stuck in limbo without final word on their applications
Treasury officials acknowledge that the treatment of borrowers under the program has been a problem. They have been working on new consumer protections such as giving those rejected from the program 30 days to appeal the decision and barring lenders from lenders continuing with foreclosures while homeowners were being evaluated for help.
Allied Capital posts narrower 4th-quarter loss
WASHINGTON – Allied Capital Corp., which provides financing for buyouts, acquisitions and other business transactions, on Wednesday posted a fourth-quarter loss that was a fraction of its loss a year ago, helped mostly by lower depreciation levels.
For the final three months of 2009, Allied Capital lost $4.1 million, or 2 cents per share, compared with a loss of $578.8 million, or $3.24 per share, in the 2008 fourth quarter.
Income from interest and dividends dropped 33 percent to $61 million from $91.3 million the year earlier. Income from fees and other sources dropped 43 percent to $5.5 million from $9.6 million in the 2008 period.
The company recorded $4.4 million in net unrealized depreciation during the period, versus $605.1 million in the year-earlier quarter. It posted a net change in unrealized appreciation of $203.8 million, versus a net change in unrealized depreciation of $436.3 million a year earlier.
After expenses, net investment income, or what Wall Street refers to as "core income," was $231,000, or break-even per share, down from $33 million, or 18 cents per share, the prior year no fax payday loans.
Analysts polled by Thomson Reuters, on average, expected net investment income of 5 cents per share.
Allied Capital said it reduced new investment activity as a part of its effort to conserve capital and reduce outstanding debt. At Dec. 31, the company had total debt outstanding of $1.5 billion, down from $1.9 billion a year earlier. During the quarter, the company sold or had repayments on portfolio investments that generated cash proceeds of $418.8 million.
Allied reached a deal in October to sell itself to finance company Ares Capital Corp. in an all-stock deal then worth $648 million. Allied stockholders will vote on the buyout March 26. If approved, the deal is expected to close by the end of March.
Allied Capital shares gained 15 cents, or 3.7 percent, to $4.20 in afternoon trading. The stock has ranged from 60 cents to $4.55 in the past 52 weeks.
Obama’s Health Bill Plan Largely Follows Senate Version
WASHINGTON — President Obama began what may be his final push to win enactment of a health care overhaul, laying out a legislative blueprint on Monday that seeks to unify House and Senate Democrats but makes no big new concessions to Republicans.
Skip to next paragraph Enlarge This Image Luke Sharrett for The New York TimesPresident Obama spoke at a bipartisan gathering of the nation’s governors at the White House on Monday.
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Go to the Prescriptions Blog » Times Topics: Health Care Reform Multimedia Interactive Document Reader: The President’s Proposal Interactive Graphic Comparing the House and the Senate Health Care Proposals mm.DI = true; mm.LI = false; mm.AH = "Back Story With Sheryl Gay Stolberg"; mm.AS = "20100223_HEALTH_AUDIO"; mm.AD = "339"; mm.AU = "http://graphics8.nytimes.com/podcasts/2010/02/22/23backstory-stolberg.mp3"; mm.IU = ""; writePlayer(); Related In California, Exhibit A in Debate on Insurance (February 16, 2010) Up Next! On Live TV! A Battle Over ... Health Care? (February 21, 2010) With the Senate Set to Vote on Jobs Bill, Governors Say They Still Need Assistance (February 22, 2010) Frederick Breedon/Associated PressGov. Phil Bredesen of Tennessee says governors should be part of the health discussion.
Mr. Obama’s plan, which the White House said would cost $950 billion over a decade, sticks largely to the version passed by the Senate in December but addresses some of the main concerns of House leaders who are demanding more help for the middle class.
Mr. Obama’s proposal — the first time the president has provided a detailed road map for what he wants a health overhaul to look like — is the opening act to a week of high drama that will culminate on Thursday, when the president convenes Democrats and Republicans at an all-day televised health care “summit” at Blair House. The White House is hoping the session can jump start the stalled health bill.
“We view this as the opening bid for the health meeting,” Dan Pfeiffer, Mr. Obama’s communications director, told reporters Monday morning, adding, “We took our best shot at bridging the differences.”
But among Republicans leaders, the initial reaction was negative. Representative John A. Boehner of Ohio, the House minority leader, said that Mr. Obama had “crippled the credibility” of Thursday’s meeting by proposing “the same massive government takeover of health care.”
Even Democrats took a wait-and-see attitude; House leaders did not immediately embrace the plan but instead scheduled a caucus meeting for Monday. And the Congressional math is daunting for the administration. Mr. Obama has lost the 60-vote supermajority that allowed him to win passage of a bill in the Senate, which means he would either have to attract Republican support or push the bill through with a simple majority using the complex parliamentary maneuver known as reconciliation — a route that the White House pointedly did not rule out on Monday.
In the House, he needs 217 votes (the number is ordinarily 218, but two seats are vacant) — a number that could be difficult to muster, especially because Mr online payday loans. Obama’s bill does not include the tighter restrictions on payments for abortions favored by abortion opponents among House Democrats.
The bill is intended to achieve Mr. Obama’s broad goals of expanding coverage to the uninsured while driving down health premiums and imposing what the White House calls “common sense rules of the road” for insurers, including ending the unpopular practice of discriminating against people with pre-existing conditions. It would offer more money to help cash-strapped states pay for Medicaid over a four-year period, and, in a nod to concerns among the elderly, end the unpopular “donut hole” in the Medicare prescription drug program.
The measure is posted on the White House Web site.
The White House projects that the bill would extend coverage to 31 million people who are currently uninsured, at a cost over 10 years of $950 billion — more than the $871 billion the Senate would have spent, but less than the $1.05 trillion for the version passed by the House. The administration estimates that its plan would reduce the federal deficit by $100 billion over the next 10 years — and about $1 trillion over the second decade — by cutting spending and reining in waste and fraud.
But the measure has not yet been evaluated by the non-partisan Congressional Budget Office. The director of the budget office, Douglas W. Elmendorf, said on Monday that the White House had not yet provided enough detail for his team to make a full analysis.
The nonpartisan budget office is the official scorekeeper in Congress, providing lawmakers with the figures that are used to determine the cost of legislation and its effect on the federal budget.
Mindful that the budget office is viewed as having the last word, the White House said that it would be open to amending the proposal if a full analysis showed the cost to be substantially different from the administration’s estimates.
In many respects, Mr. Obama’s measure looks much like the version the Senate passed on Christmas Eve — and indeed, senior White House officials acknowledged on a morning conference call that they had used the Senate bill as a template. But there are several critical differences that appear designed to appeal to House Democrats, who have voiced deep concerns about the Senate measure and its effects on the middle class.
To begin with, Mr. Obama would eliminate a controversial special deal for Nebraska — widely derided by Republicans as the “cornhusker kickback” — that called for the federal government to pay the full cost of a Medicaid expansion for that state. Instead, the White House would help all states absorb the cost of the Medicaid expansion from 2014, when it begins, until 2017.
And while the president adopts the Senate’s proposed excise tax on high-cost, employer sponsored insurance plans, Mr. Obama makes some crucial adjustments based on an agreement reached in January with organized labor leaders, while also trying to avoid the appearance of special treatment for unions. Most crucially, the president would delay imposing the tax until 2018 for all policies, not just for health benefits provided through collectively-bargained union contracts.
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A Blessing and a Burden
Gerald M. Boyd’s memoir, “My Times in Black and White: Race and Power at The New York Times,” opens with the author waking from a dream. Heart racing, he reflects on a life — a remarkable Horatio Alger-like rise from “stifling poverty” to a senior post among the newspaper’s “succession of greats,” ending with a swift fall — whose meaning eludes him. This book, published posthumously, is an attempt to come to terms with that life, and particularly with the role race played in it.
Skip to next paragraph Enlarge This Image Nicole Bengiveno/The New York TimesGerald M. Boyd in 2002.
MY TIMES IN BLACK AND WHITE
Race and Power at The New York Times
By Gerald M. Boyd
Illustrated. 402 pp. Lawrence Hill Books. $26.95
Boyd, born in St. Louis in 1950, was 3 when his mother died. His alcoholic father abandoned the family when he was 11, and an extraordinary grandmother raised Boyd and his brother. Journalism was his salvation. At the age of 7, Boyd was hawking The St. Louis Post-Dispatch on Sundays. Years later, the paper awarded him a full scholarship to the University of Missouri, and hired him upon graduation. Boyd thrived at The Post-Dispatch, first as a local reporter and then as a Washington correspondent. Along the way, he helped found the Greater St. Louis Association of Black Journalists and was a Nieman fellow at Harvard.
Boyd was hired by The Times in 1983. “Second only to my family, The Times defined me; I was addicted to the paper and all it represented, cloaking myself in its power and prestige,” he writes.
From the beginning of the relationship, race was a factor. After accepting the job, Boyd was welcomed by a top editor: “I really enjoyed your clips — they’re so well written. Did you write them yourself, or did someone write them for you?” On his third day he was asked whether he was “ready” for an assignment. “I wondered how many new white reporters heard their first assignment preceded by that question,” he says.
Much of the book is devoted to the racial slights Boyd suffered during his 20 years at the paper. White subordinates bridled at taking orders from him; white superiors alternately patronized and betrayed him. “The Times was a place where blacks felt they had to convince their white peers that they were good enough to be there,” he writes. He felt he could speak openly about the subject with his white colleagues only rarely — for example, while editing a series on race in America that would win a Pulitzer Prize: “I wanted them to understand why blacks think about race so often no fax payday loans. Whether they are discriminated against or ignored or feared, they know the reaction is probably triggered by race.”
Like many smart, ambitious African-Americans in the post-Brown v. Board of Education era, Boyd was often the “first” black person to hold various jobs and receive certain honors. At The Post-Dispatch, he was the first to be elected “journalist of the year.” At The Times, he was the first black White House correspondent and the first black managing editor, the paper’s second-highest editorial position. Well-meaning senior editors told Boyd he was the “Jackie Robinson” figure who would help break the color line in journalism. “What a dumb thing to tell him,” the former Times reporter Bernard Weinraub writes in one of the short passages that friends, relatives and colleagues contributed to the book. “It kind of unhinged Gerald.”
Boyd, sadly, seems to have derived little pleasure from his remarkable achievements. “One of my proudest moments as an editor echoed with the emptiness of my life as a man,” he writes about his section of the paper winning a Pulitzer. He confesses that true happiness didn’t come until he had a son with his third wife, Robin D. Stone, who shepherded this book into print. In 2006, Boyd was told he had cancer; he died later that year, at 56.
Unfortunately, Boyd’s reputation will forever be paired with that of Jayson Blair, the former Times reporter whose fabrications incited the events that led to the departure of Boyd and Howell Raines, the paper’s executive editor, in 2003. Boyd argues that the accusation that he gave Blair special treatment — something each man denied — rested on little more than the fact that both were black. “As soon as controversy arises concerning an African-American reporter,” he told a meeting of the National Association of Black Journalists two months after he left The Times, “the senior African-American is automatically viewed as suspect.”
Robert S. Boynton is the director of the literary reportage concentration at the Arthur L. Carter Journalism Institute at New York University.
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