EQUIFAX SECURITY BREACH WILL HAPPEN AGAIN (COMPANIES SHARING INFO & SCREENING CREDIT FOR JOBS)

#EQUIFAX

EQUIFAX SECURITY BREACH WILL HAPPEN AGAIN AND AGAIN (COMPANIES SCREENING CREDIT FOR JOBS):

AS LONG AS COMPANIES SHARE CUSTOMER INFO AND USE CREDIT TO HIRE PEOPLE (EVEN FAST FOOD JOBS) SUCH SECURITY BREACHES WILL CONTINUE.

CONGRESS DOESN'T CARE BECAUSE MANY CONGRESS MEMBERS OWN STOCK SHARES IN EQUIFAX.


Sources: LA Times, MSN



***** Here are all the ways the Equifax data breach is worse than you can imagine


Another day, another massive data breach. Except this one involves Equifax, one of the credit-monitoring companies you might expect to be ultrasensitive to the importance of safeguarding your personal information from hackers.

Instead, the company revealed on Thursday, the personal data of 143 million U.S. consumers in its care — nearly half the country — was potentially compromised.

The data now at large includes names, Social Security numbers, birthdates, addresses and driver’s license numbers, all of which can be used fraudulently to validate the identity of someone trying to open a bank or credit account in another person’s name.

In some cases, Equifax says, the security questions and answers used on some websites to verify users’ identity may also have been exposed. Having that information in hand would allow hackers to change their targets’ passwords and other account settings.

"The fact that the breached entity (Equifax) is offering to sign consumers up for its own identity protection services strikes me as pretty rich." Quote by Security Expert Brian Krebs

This isn’t the largest data breach ever — that crown belongs to Yahoo, which allowed account information for 500 million people to be hacked. But it has several elements that make it much worse than the usual. The breadth of the hacked information is one.

Another is the signal it sends that firms like Equifax are much more concerned about collecting personal information than protecting it.

Here are three others:

— Equifax waited six weeks to disclose the breach. The firm says it discovered the breach, which it reports began in mid-May, on July 29.

That’s six weeks that consumers could have been victimized without their knowledge and therefore left without the ability to take countermeasures. Equifax hasn’t explained the delay.

— Three Equifax executives sold shares after the discovery of the breach and before its public disclosure, according to Bloomberg. They collected $1.8 million from the sales, which weren’t part of any prearranged option-execise programs. The sales were made on Aug. 1 and 2, the third and fourth days after the breach was discovered.

An Equifax spokeswoman says the executives were unaware of the breach at the time of their sales, but that’s hardly comforting: One was John Gamble, the firm’s chief financial officer. If the firm’s No. 2 executive wasn’t immediately informed about a catastrophic security breach, why not?

In any case, the executives’ timing was exquisite.

Gamble sold 6,500 shares for $145.60, or about $946,400. As of midday Friday, following the firm’s disclosure, the shares are trading at a bit over $123, down about 13% on the day.

— Equifax already is trying to take advantage of the victims of its own breach. The firm set up a website allowing individuals to check if their information was potentially compromised, but it requires users to plug in their last name and last six digits of their Social Security numbers.

That raises the question of why anyone would trust Equifax with even a partial Social Security number at this stage.

The site also invites users to sign up for Equifax’s “TrustedID Premier” credit monitoring service. As a recompense to the victims, the firm is offering this service free for a year.

But be warned: Not only is that woefully inadequate, since hackers can exploit stolen personal data for many years, but it gives Equifax a lucrative database of possible customers to be sold continuing subscriptions for the service after the year is expired — at a price currently set at $19.95 a month. In fact, enrollment in the service typically requires customers to provide Equifax with a credit card number, which the firm uses to automatically bill them after the free trial is over.

“The fact that the breached entity (Equifax) is offering to sign consumers up for its own identity protection services strikes me as pretty rich,” security expert Brian Krebs observed on his website.

Even worse, the TrustedID terms of service state that enrollees give up their right to sue Equifax and prevents them from filing or joining a class action in the case of any dispute — they’ll have to go to arbitration as individuals, which almost always places consumers at a disadvantage.

It isn’t clear how those restrictions apply to preexisting data breaches, but judges have held in other cases that arbitration clauses may have retroactive effect. People should be very, very cautious about signing up with Equifax’s service.

The most important lesson in the Equifax breach is an old one: Consumers whose information is held by Equifax are not its customers or clients — they’re the product, and their personal information merely raw material to be exploited by the firm for its own profit.

Equifax and its two major competitors in the credit-monitoring game, Experian and TransUnion, make their money by compiling detailed files on individuals and selling them to credit card firms, banks and marketers. In short, they don’t care about you, except so far as you’re an entry in their databases.

Equifax Chief Executive Rick Smith tried hard to demonstrate that he does care, with little success. In a video on the firm’s website, he called the breach “a disappointing event for our company,” sounding a bit like Mr. Spock after he’s told that a catastrophic attack on the Enterprise is underway.

Smith further stated, “We pride ourselves on being a leader in managing and protecting data.” But the evidence contradicts that claim. Just last May, Krebs reported that thieves were able to access W-2 tax data of employees at client companies of Equifax’s payroll service subsidiary TALX, thanks to lax security. That breach lasted almost a year, starting in April 2016.

The firm has suffered a string of other breaches, too.

The credit bureaus have “shown themselves to be terrible stewards of very sensitive data, and are long overdue for more oversight from regulators and lawmakers,” Krebs wrote.

But lawmakers at the state and federal level have been inexcusably lax about regulating these data firms and any others holding sensitive consumer information.

Only eight states — Connecticut, Florida, Maine, New Mexico, Ohio, Rhode Island, Tennessee and Vermont — impose a firm deadline on how quickly companies must inform consumers of a breach, usually 30 to 90 days after its discovery. (California requires “timely” notification, whatever that means, except for medical information, which carries a 15-day notification deadline.)

In Europe, starting next May, the deadline will be 72 hours after a breach is discovered. That seems adequate.

In the meantime, what can consumers do? Krebs and other security experts recommend going beyond signing up for account monitoring services, and placing a security freeze on your credit lines. This can be done through Equifax and the other agencies, though there may be a fee.

The freeze prevents anyone from opening a new credit or loan account in your name.

That includes you, however, which means you have to lift the freeze when you wish to open a new account yourself, and reimpose it (possibly incurring another fee) afterward. That’s an inconvenience, but a worthwhile one to protect your credit, the experts say.

The real action needs to take place in Congress. If there were harsh federal penalties for the kind of sloppiness that seems to be demonstrated by Equifax — life-threatening penalties for the companies — it would be a good bet that they’d get their act together. After every major breach, lawmakers talk about taking action, but seldom go further than holding a hearing or two.
If that happens this time, it won’t be long until the next monster breach.

Federal Reserve Keeps Interest Rates At All Time Low Until 2014

Fed unlikely to raise rates until at least 2014

The Federal Reserve said Wednesday that it is unlikely to raise interest rates before late 2014, extending a period of record-low rates by more than a year.

The Fed says it is keeping rates low to help lift a weak but modestly growing economy.

The new timeframe hints at details in the Fed's quarterly economic forecast, which will be released later. That will show in what year policy

members expect the first increase in the Fed's benchmark interest rate. The Fed has kept its key interest rate at a record low near zero for three years.

In a statement released after its two-day meeting, the Fed said the economy is growing moderately, despite some slowing in global growth. It held off on any other new steps to boost the economy.

The statement was approved on a 9-1 vote. Jeffrey Lacker, president of the Richmond regional Fed bank, dissented, saying he objected to the new time period.

The extended timeframe is a shift from the Fed's previous plan to keep the rate low at least until mid-2013. The change is intended to reassure consumers and investors that they will be able to borrow cheaply well into the future. And some economists said it could lead to further Fed action to try to invigorate the economy.

The forecast on interest rates will be released along with the Fed's updated projections for economic growth, unemployment and inflation. Fed Chairman Ben Bernanke will discuss the forecasts and Fed policy at a news conference later Wednesday.

Beyond the adjusted outlook for interest rates, the January statement tracked closely to the Fed's previous comments about economic conditions.

The central bank used the same language in describing Europe's debt problems and the impact on the world economy.

The economy is looking a little better, according to recent private and government data. Companies are hiring more, the stock market is rising, factories are busy and more people are buying cars. Even the home market is showing slight gains after three dismal years

Still, the threat of a recession in Europe is likely to drag on the global economy. And another year of weak wage gains in the United States could force consumers to pull back on spending, which would slow growth.

The Fed has taken previous steps to strengthen the economy, including purchases of $2 trillion in government bonds and mortgage-backed securities to try to cut long-term rates and ease borrowing costs.

The idea behind the Fed's two rounds of bond buying was to drive down rates to embolden consumers and businesses to borrow and spend more. Lower yields on bonds also encourage investors to shift money into stocks, which can boost wealth and spur more spending.

Some Fed officials have resisted further bond buying for fear it would raise the risk of high inflation later. And many doubt it would help much since Treasury yields are already near historic lows. But Bernanke and other members have left the door open to further action if they think the economy needs it.



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Sources: Associated Press, Bloomberg News, CNN, Google Maps

Obama's July 2011 Jobs Report: 117,000! GOP's Fake Debt Crisis Failed!

U.S. Posts Stronger Job Gains Amid Fear

As the United States economy continued to wobble, employers added 117,000 jobs in July, staving off a panic that had threatened to engulf the financial markets.

Though the government’s monthly snapshot of the labor market brought a sigh of relief to traders on Friday, the net new jobs created was not enough to provide much comfort to those who have been waiting for the recovery to kick into high gear. The unemployment rate slipped a notch to 9.1 percent, but that was mainly because some people had simply given up looking for work.

The net new jobs created in July exceeded the dismal number reported in June, but the total was barely sufficient to accommodate normal population growth, exceeded the 18,000 net new jobs originally reported in June. The Labor Department also revised its estimate of American job growth in June to 46,000.

Stock markets, pummeled on Thursday on increasing pessimism over the American economy, drew about even in early trading, retreating from a 1 percent bounce higher at the opening.

The latest jobs numbers came in a week when Congress finally agreed to a deal to raise the country’s debt ceiling and cut government spending. Deep divisions remain between the two political parties on how to cut spending further at a time when many economists worry that the economy can ill afford it.

“It gives us some temporary relief,” said Nigel Gault, chief United States economist at IHS Global Insight. “But all we can say is it’s a bit better than the two previous months. I suspect, though, that relief will probably not last too long as people refocus on what they think will happen in the future.”

Indeed, other signs that the recovery has slowed to a crawl are mounting. The Commerce Department reported earlier this week that consumer spending, which accounts for up to 70 percent of economic activity, actually declined in June for the first time in nearly two years. A closely watched survey of manufacturers showed that employment in July grew at a slower rate than in June and that new orders of factory goods actually fell. Housing prices are still extremely weak.

With extended unemployment benefits scheduled to expire at the end of this year, there are still 13.9 million people out of work, 6.2 million of whom have been searching for jobs for six months or longer. Another 8.4 million are working part-time because they couldn’t find a full-time job, and 1.1 million have become so discouraged that they have stopped looking for work altogether. Including such people, the broader measure of unemployment was 16.1 percent.

In a sobering note, only 58.1 percent of the population is working, lower than at any point in 28 years.

With consumer confidence on a knife’s edge and orders slipping, employers have been reluctant to add workers. “We just don’t see where there is much incentive for companies to ramp up hiring at a time when there’s so much uncertainty gripping the country,” said Bernard Baumohl, chief global economist with the Economic Outlook Group.

Mr. Baumohl, who said the risk of a fall back into recession had certainly increased, said the most likely prospect was that the economy would continue in a “muddle through” phase. “I don’t think we’re going to see anything major happen in the labor markets until well into the fall,” he said.

Sources: CNN, NY Times, PBS, Youtube

GOP Rejects "Gang Of Six" Deal! Guarantees Obama's Re-Election! Decision 2012

Visit msnbc.com for breaking news, world news, and news about the economy

Refusing To Compromise Or Agree On ANY Form Of Deal To Increase The Debt Ceiling Limit (A Usually Routine Procedure) Under The Remainder Of Pres. Obama's First Term, Including The One Comprised By "Gang Of Six" Members Is Proof Positive House GOP Leaders On Capitol Hill Especially The Tea Party Clique, Are INTENTIONALLY Trying To Shut Down Our Nation's Federal Government Solely For 2012 Political Gain.

I Repeat!

House GOP Leaders On Capitol Hill, Especially The Tea Party Clique (Led By Michelle Bachmann) Is INTENTIONALLY Trying To Shut Down Our Nation's Federal Government NOT To Reduce The Deficit They Allowed Former Pres. George W. Bush To Run Up With His Tax Cuts For Extremely Wealthy Citizens, 3 Wars, Medicare Advantage For Wealthy Seniors & Awarding His Political Donors With FAT Government Contracts.

No!

Instead House GOP Leaders Are INTENTIONALLY Refusing To Increase In The History Of Our Nation Solely For 2012 Political Gain.

i.e., Get Rid Of Barack Obama; Our Nation's FIRST Black Legally Elected President!

How Can They Sleep At Night?

I Guess People With Cold Hearts Are Nocturnal & In Need Of Very Little Rest.

Cold Hearts?

Now I Understand How House GOP Leaders & Tea Party Members Are Able To So Easily Ignore The Constituents Who Elected Them Into Office.

For Shame!

Can You Say "Obama Is Definitely Guaranteed A 2nd Term & I'm Certain Pelosi WILL Be Re-Hired As House Speaker Too?"

Good-Bye Boehner, Good-Bye Cantor, Good-Bye Bachmann, Good-Bye Tea Party Members.

PEOPLE GET OUT THE VOTE IN 2012!!!

CHOOSE OBAMA & REHIRE PELOSI IN 2012!!






Push for Broad Budget Deal Intensifies Among Leaders


President Obama and Congressional leaders, spurred by a positive response to a new Senate deficit-cutting plan, sought on Wednesday to resurrect a broad budget agreement as House members condemned a fall-back proposal taking shape in the Senate.

Officials in both parties said discussions had accelerated about a compromise tied to a debt limit increase that would cut spending, reshape entitlement programs like Medicare and call for a future tax overhaul — a package that would slice trillions of dollars from projected deficits over the next decade. The talks picked up after a bipartisan group of senators unveiled their deficit plan on Tuesday, with House Republicans signaling that they might now be open to a deal that would raise more money for deficit reduction by closing tax loopholes and eliminating deductions while also reducing tax rates.

Mr. Obama summoned Republican and Democratic leaders to separate White House sessions. And the White House spokesman, Jay Carney, said Mr. Obama would drop his opposition to signing a short-term increase in the federal debt ceiling, but only for an extension of days and only if the two sides were in agreement on the contours of a deal that raised the ceiling through 2012 and made long-term reductions in federal debt. “There is still time to do something significant if all parties are willing to compromise, because the parameters of what that might look like are well known, especially to the participants in the negotiations the president oversaw last week,” Mr. Carney said.

The search for a solution intensified as House Republicans made clear that they were in no mood to accept a proposal being developed by Senator Mitch McConnell of Kentucky, the Republican leader, who has advocated a procedural maneuver to allow a debt increase to clear Congress without Republican votes.

The four top House leaders — Speaker John A. Boehner of Ohio; Representative Eric Cantor of Virginia, the No. 2 House Republican; Representative Nancy Pelosi of California, the Democratic leader; and Representative Steny H. Hoyer of Maryland, the No. 2 Democrat — met privately Wednesday and, according to officials, reviewed problems with the McConnell plan. Putting it in place would require some House Republicans to back the idea, but the concept has met with mounting resistance in the House even as a last-ditch effort.

“If there is a state or condition worse than death, that’s where it would be,” Representative Trey Gowdy, Republican of South Carolina, said about the McConnell proposal. “I can’t think of one, so we will just go with death for now.”

Senate leaders were still planning to go forward with consideration of the McConnell fallback after considering the “cap, cut and balance” plan that cleared the House on Tuesday but has no chance of passing the Senate, where Democratic leaders assailed it on Wednesday.

“The Republican scheme to cap, cut and kill Medicare is dead on arrival in the Senate,” said Senator Charles E. Schumer of New York, the No. 3 Democrat in the Senate. “Their plan, which passed the House last night on a virtual party-line vote, would wreak havoc on our country’s seniors, the middle class, military preparedness and our standing in the world.”

To improve the prospects for the McConnell plan in the Senate, the leadership was drawing up a list of spending cuts that would be attached to it as well as other deficit-cutting proposals to sweeten the pot.

Though negotiations over a more comprehensive deal had faltered, Mr. Obama and Mr. Boehner have continued to talk, including at a private White House meeting Sunday that was also attended by Mr. Cantor. Both Mr. Boehner and Mr. Cantor also said positive things about the deficit plan crafted by the so-called Gang of Six, which includes three Senate Republican and three Senate Democrats.

Lawmakers said that the proposal would not necessarily provide the definitive solution to the debt impasse but that the welcoming response from both parties showed there was a potential consensus over long-term approaches to reducing the debt and the deficit.

If the president is to proceed with a major agreement, one of his chief hurdles could be winning some support from leaders in the Senate, where neither Mr. Reid nor Mr. McConnell has embraced the Gang of Six plan and the two had teamed up to enact Mr. McConnell’s approach.

Despite widespread talk of a breakthrough after the Gang of Six re-emerged on Tuesday, administration officials privately are increasingly fretful that Congress’s schedule leaves no room for error before the government hits its borrowing limit on Aug. 2, when an error — in terms of unsuccessful votes — is a real possibility given House Republicans’ unwillingness to compromise with the White House.

The situation is reviving memories in both parties of two previous times that House Republicans rebelled against their leadership’s compromises, provoking such negative market reactions that the Republicans quickly retreated — in late September 2008, when the House initially rejected President George W. Bush’s proposed bailout of the financial system, and in October 1990, when House Republicans opposed a deficit-reduction compromise that President George Bush had negotiated with Congress’s Democratic leaders.

“This time is unfortunately more consequential,” said a senior administration official.

On Aug. 3, should the government hit its debt ceiling, the expectation is that the bond-rating agency Standard & Poor’s, and perhaps others, would carry out a warning to downgrade the United States credit rating. That likely would raise the Treasury’s borrowing costs on Aug. 4, when it has scheduled an auction to raise money for $90 billion in principal and interest due to creditors. And the higher interest rates for the government would ripple to loans for businesses and consumers.

The outline of legislation that could pass both the Democratic-controlled Senate and the Republican-controlled House is emerging but still highly uncertain, and complicated significantly by the short amount of time left. What is certain, say people in both parties, is that the action will go down to the wire with no guarantee of legislative success.

“The idea of an 11th-hour bill whose passage is not assured make me very nervous, and I don’t think the markets understand how nervous they should be,” said one official involved in the negotiations.

Behind the scenes, representatives of JPMorgan Chase, led by its president and chief executive, Jamie Dimon, have been particularly active in pressing for a resolution. Jay Powell, a former official in the administration of the elder George Bush, was brought into the House Republican caucus by party leaders to brief the rank and file on the ramifications.


Sources: CNN, MSNBC, NY Times, PBS News, Politico, Russia Today, Youtube

GOP's Next 2012 Anti-Obama Tool: Gas Prices & Gouging

Since Our Nation's Unemployment Numbers Have Been Reduced, Donald Trump's "Birther" Claims Have Fizzled & Paul Ryan's Budget Backfired, What's The GOP's Next 2012 Anti-Obama Tool?

Scaring American Voters With Rising Gas Prices By Allowing Gas Price Gouging & Speculation To Occur!

President Obama Was Right About His Administration Investigating & Stopping Such Corrupt Behavior Just For Short Term Political Gain.

I Hope Attorney Holder Eric Holder Finds & Prosecutes The Culprits Responsible Soon!




High Gas Prices cut into driving habits — and Obama’s approval rating


Soaring gasoline prices are biting into household incomes and nibbling at Americans’ fuel consumption and support for President Obama, according to a Washington Post-ABC News poll.

About six in 10 respondents said they had cut back on driving because of rising fuel prices, and seven in 10 said that high pump prices are causing financial hardship.

Obama, like previous presidents in times of high oil prices, is taking a hit. Only 39 percent of those who call gas prices a “serious financial hardship” approve of the way he is doing his job, and 33 percent of them say he’s doing a good job on the economy.

The Energy Information Administration said Monday that gas prices climbed last week to $3.88 a gallon, up 81 cents since the start of the year. It is the highest that pump prices have been since August 2008, before the financial meltdown.

Evidence of motorists’ hardships are littering the roads. The Automobile Association of America says the number of motorists running out of gas has been surging. John Townsend, a AAA spokesman, said that cash-strapped members “are pushing the envelope” and that emergency gasoline deliveries to stranded members jumped nationwide, including up 40 percent in the District.

That sort of hardship could slow the Obama reelection campaign. The Post-ABC poll results show that 60 percent of independents who say they’ve been hit hard by surging gas prices also say they definitely won’t support Obama in his bid for reelection.

In a theoretical match-up with former Massachusetts governor Mitt Romney, the top GOP performer in the Post-ABC poll, Romney wins by a 24-point margin among the independents who have taken a severe financial hit because of gas prices, and the president is up 7 percentage point among others.

At a fundraiser in Southern California last week, where pump prices are the highest in the country, Obama acknowledged the political peril of high gas prices. He said, “My poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people.”

He tried to show that he feels motorists’ pain. “I admit, Secret Service doesn’t let me fill up the pump anymore,” he said. “But it hasn’t been that long since I did.”

The poll also shows the stubborn nature of gasoline consumption, and the difficulty of weaning the country off its dependence on imported oil. About a quarter of all Americans say they would not alter their driving habits until prices, which are about $1 a gallon higher than a year ago, climb another $1.10 or to more than $5.

Even though gasoline prices are just a quarter of a dollar short of their all-time record of $4.11 for a gallon of regular set in July 2008, the Energy Information Administration forecast this month that gasoline consumption would average about 9.3 million barrels a day over the peak summer driving season, a 0.5 percent increase over last summer.

“Population growth and a recovering economy contribute to gasoline consumption growth,” EIA said, adding that high gas prices and better fuel efficiency standards would dampen demand. Consumption of diesel fuel is expected to climb 2.3 percent because of higher industrial output and trade.

“I think the evidence is strong that people are not very price responsive and that there are no magic thresholds where the effect changes suddenly,” said Severin Borenstein, a professor at the University of California Berkeley business school and director of the California Energy Institute.

In 2008 when prices last spiked, motorists carpooled, households drove the more efficient of their cars when a choice was possible and many people opted for public transportation. But the impact was slight.

Borenstein says the drop in consumption was 3 to 4 percentage points. “That’s a pretty small demand response when the price of gasoline nearly doubles,” he said. Moreover, he said, “this was happening in context of a giant recession, so there were income effects as well.”

Christopher Knittel, a professor of applied economics at the Massachusetts Institute of Technology, said that “consumers are less responsive today than in the past, especially when compared to the 1970s.” With the growth of families with two income earners and other social changes, motorists are less likely to regard their day-to-day driving as discretionary.

But, Knittel said, “if prices continue to be high, they start to change what cars they buy and manufacturers start to change the cars they offer. So it really depends on the time frame.”

Knittel said that the increase in gasoline prices is partly a result of the recovering economy. “One of the reasons gas prices are high is that we are coming out of the recession,” he said. “So it’s sort of bitter sweet. The economy is getting strong, but it’s hurting our pocketbook.”

That could circle around and undercut the recovery. Peter Morici, a professor at the University of Maryland’s business school, estimates that the spike in gas prices since September translates into a 5 percent cut in discretionary income and that Americans “will be eating fewer restaurant meals, wearing fewer new clothes, curtailing summer vacation plans, and postponing furniture purchases and home improvements.”

In the Post-ABC poll, 12 percent of people who consider gas prices a financial hardship said they had slashed spending elsewhere.

The telephone poll was conducted April 14 to 17 among a random national sample of 1,001 adults. The margin of sampling error is 3.5 percentage points.


Sources: AP, Washington Post, Youtube

Standard & Poor's Screams Over Obama; Silent During Bush's Reign

Yesterday Standard & Poor's Screamed Bloody Murder About America's Increasing Debt. The World Famous Credit Rating Agency Has Threatened To Lower Our Nation's Credit Rating From "Stable" To "Negative".

Ok So Why Weren't They Doing That When President Bush Was Still In Office, Running Up Trillion Dollar Debts From 2 Wars?

Inquiring Minds Would Like To Know.

Whether Those 2 Wars Were Necessary Or Not Isn't The Issue.

Debt Is Debt!!

Yes, Politics Is A Dirty Game.




Can S&P scare Congress into shrinking the deficit?

Standard & Poor's, one of the country's most influential credit-rating agencies, "fired a warning shot on Monday" about the growing U.S. debt load. S&P downgraded its credit outlook for the U.S. from "stable" to "negative," meaning it believes there is a one-in-three chance it will lower the government's sterling "AAA" rating within two years. The agency pointed to the political gridlock in Washington, and questioned whether President Obama and Republicans would agree on a plan to lower the deficit and reduce the national debt before the 2012 elections. Will S&P's downgrade get Obama and the Republicans on the same page?

This should spur Washington to act: Hopefully, this warning will act "as a catalyst" for politicians to agree on a "credible" package of reforms, says Mohammed El-Erian, CEO of bond giant PIMCO, in the Financial Times. Failure to do so would weaken the dollar and could drive up borrowing costs, "thereby undermining investment, employment and growth." The "time has come" for the U.S. "to take better control of its fiscal destiny — for the sake of American society and for the well being of the global economy."
"El-Erian: A warning for the US, and for the global economy"

If only our political system wasn't broken: S&P basically said that it has no confidence in our political leaders "because they're pretty much all spineless cowards," says Hamilton Nolan at Gawker. And the Treasury's response — that S&P "underestimates the ability of America's leaders to come together" — is http://www.blogger.com/img/blank.gifreally "laughable" considering the partisan bickering that has gripped Washington for years. But, hey, "at least the problem is contained in a single sector: the economy."
"The American economy is collapsing some more today"

Who cares what S&P says? The agency "has a horrible track record for judging credit worthiness," says Dean Baker at the Center for Economic and Policy Research. It gave companies like Lehman Brothers, Bear Stearns, and Enron "top ratings" until they collapsed — and also gave good ratings to mortgage-backed securities that turned out to be junk. "Investors are aware that S&P's judgement does not mean very much."
"If a negative S&P outlook for the U.S. explains a drop in stock prices..."



S.&P. Lowers Outlook for U.S., Sending Stocks Down

The United States has long had a sterling credit report from ratings agencies because of the global preference for the dollar. But the latest deficit gridlock in Washington may have taken some of the luster off the reputation of the world’s largest economy and its currency.

On Monday, the ratings firm Standard & Poor’s lowered its outlook on the United States rating to negative. Although the agency did not actually lower its highest AAA rating on the country’s debt, it was the first time since the S.& P. started assigning outlooks in 1989 that the country was given an outlook that was something other than stable.

While it had not been completely unexpected, the S.& P. decision shifted the nation’s deficit debate out of the political arena — at least for the day — and thrust it on Wall Street. The action spooked investors, sending the three main stock indexes down more than 1 percent.

Treasury yields, or the interest rate that the country pays on its debt, spiked immediately after the announcement. Since the United States owes more than $9 trillion in outstanding debt to the public, even a one-tenth of a percent increase could potentially add billions to the deficit over time.

A lower credit rating for the government could also end up hurting consumers in the pocketbook since Treasury yields also affect rates on consumer loans, particularly mortgages.

“If the U.S. gets downgraded, the cost of issuing new debt will definitely increase,” said Guy LeBas, the chief fixed-income strategist for Janney Montgomery Scott. “It is a question of how much.”

Mr. LaBas’s firm estimated in a study this year that there could be a 6 to 6.5 percent decline in American stocks over three months as a result of any downgrade. Russell T. Price, a senior economist with Ameriprise Financial, said that any downgrade could also hurt perceptions of the dollar and perhaps trade.

“Even a small increase in the interest rate being charged on that debt could add significantly to the U.S. deficit problem,” he said.

On Monday, the markets turned sharply lower in reaction to the news. The Dow Jones industrial average closed down 140.24 points, or 1.14 percent lower, at 12,201.59. It was the Dow’s biggest decline since March 16.

The broader S.& P. 500-stock index declined 14.54 points, or 1.1 percent, to 1,305.14. The technology-heavy Nasdaq lost 29.27 points, or 1.06 percent, at 2,735.38.

Stocks also fell across the Asia-Pacific region early Tuesday, with the Nikkei 225 index in Japan down 1.5 percent by midmorning. Singapore’s main index fell 0.6 percent and in Australia, the S.& P./ASX 200 index fell 1.3 percent.

In its decision, the Standard & Poor’s ratings unit issued a strong warning to government leaders to agree on how to address the medium- and long-term budget challenges by 2013.

“More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” said Nikola G. Swann, a credit analyst at Standard & Poor’s. The firm said that there was a one in three chance that it could lower its long-term rating on the United States in two years.

The statement initially made investors in Treasury bonds nervous, sending the yield on the benchmark 10-year Treasury bond as high as 3.45 percent. By the end of the day, the yield fell to 3.37 percent, down from 3.41 percent on Friday. The price of the 10-year bond rose 9/32, to 102 2/32.

Previously, on Jan. 14, the S.& P. and another major credit ratings agency, Moody’s Investors Service, warned that the United States might tarnish its triple-A credit rating if its national debt kept growing. At that time, the Obama administration was warning that the government could reach its legal borrowing limit within a few months and urged Congress to raise the debt ceiling to avoid a default.

Administration officials played down the S.& P.’s assessment on Monday while reiterating Washington’s determination to reach a compromise on the deficit.

Treasury officials “believe S.& P.’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” an assistant secretary for financial markets, Mary J. Miller, said in a statement.

Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers, said in an interview with Bloomberg TV that President Obama in a recent speech had said that there would be actions taken to promote fiscal responsibility.

He said that S.& P.’s “political judgment” should not be given “too much weight.”

Both President Obama and Republican lawmakers have suggested plans to cut the federal deficit by at least $4 trillion over the next 10 to 12 years, but by different methods. And Mr. Obama plans to take his message on the road this week, traveling to the West Coast to promote his proposal, which combines spending cuts and revenue increases.

The Republican blueprint championed by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, includes cutting nonmilitary spending, and a politically charged proposal to fundamentally reconfigure Medicare.

“We face the most predictable economic crisis in our history — a crisis driven by the explosive growth of government spending and debt,” said Mr. Ryan in a statement.

Congressional Republicans quickly seized on the Standard & Poor’s analysis as an argument for advancing the newly adopted House budget that would cut an estimated $5.8 trillion over a decade. They sought to increase the pressure on Democrats against increasing the federal debt limit without some significant new limits on federal spending.

“Serious reforms are needed to ensure America’s fiscal health, and today S.& P. sent a wake-up call to those in Washington asking Congress to blindly increase the debt limit,” said Representative Eric Cantor, Republican of Virginia and House majority leader.

As Republicans claimed the report bolstered their case against increasing the debt limit without new spending limits, Representative Nancy Pelosi of California, leader of the Democrats, said she read the findings as an indication that the two parties must move carefully and cooperatively to show a united front in trying to tackle the nation’s fiscal woes.

“Both Democrats and Republicans must participate in the process initiated by President Obama last week to demonstrate our commitment to reducing our deficit through shared responsibility,” she said.

With many lawmakers back home beginning a two-week recess, the S.& P. warning could weigh on some voters as Republicans try to sell their new plan.

Standard & Poor’s did not take sides on any of the political proposals, saying that they were a good starting point. But it cautioned that “we see the path to agreement as challenging because the gap between the parties remains wide.”

Analysts said that there were not many immediate implications to the S.& P.’s action. But over time, other ratings agencies could reconsider their recommendations on the United States’ sovereign debt.

The S.& P. statement could spur the administration and lawmakers to find a way to reduce the nearly $1.5 trillion budget deficit and give the fiscal austerity debate a greater sense of urgency, said Capital Economics economists in a research note.


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Sources: CEPR, Fox News, NY Times, The Week, Youtube, Google Maps

Corporate Tax Breaks: Allows Rich To Dodge Paying IRS (Corporate Welfare)

Visit msnbc.com for breaking news, world news, and news about the economy

Are U.S. companies drowning in taxes or artful dodgers?


Whether U.S. companies are drowning in high taxes or artful exploiters of loopholes is at the center of a debate over reforming corporate taxes.

Corporate America and Republicans often point to the United States as having among the highest tax rates in the world at about 35 percent, saying it makes the country less competitive and drives jobs overseas.

The Obama administration has acknowledged the need to overhaul the complex and confusing corporate tax code and agreed the top statutory rate is too high.

But administration officials say the 35 percent figure overstates U.S. companies' disadvantage once deductions and other breaks bring their "effective" tax rate much lower.

"Our tax system has not kept pace with the rest of the world," John Engler, the former Republican governor who heads up the Business Roundtable, a group of chief executives from the biggest U.S. companies.

The group of heavyweights like Verizon Communications and American Express Co. released a comparison of effective tax rates on Thursday that it said showed companies still pay more than their global peers.

The Business Roundtable-funded study, by corporate accountants PricewaterhouseCoopers, found an average effective tax rate of 27.7 percent among about 500 U.S.-headquartered companies.

That compared with a non-U.S. average effective tax rate of 19.5 percent across on a large selection of countries, from Nigeria to Japan to Qatar, according to the study.

But a lot depends on what countries you are comparing the United States against, and how you crunch the data.

Critics said the study's methods skew the reported U.S. tax rates paid upward.

"The report is hogwash," said Robert McIntyre, director of Citizens for Tax Justice, a consumer group whose own analysis finds companies pay on average rates in the upper teens, after after deductions and loopholes.

Lots of countries have lower effective rates than the United States, including Sweden with a 22 percent rate and smaller countries such as Hungary with a 14 percent rate, according to the study that covered the 2006-2009 period.

Some of the smaller countries only had reports from a handful of companies, while others had hundreds, which can distort the results.

Looking at the Group of Seven industrialized countries, the U.S. rate is on par, according to the study.

For example, Japan has about a 38.8 percent rate, Germany has a 27.9 percent rate and the United Kingdom has a 23.6 percent rate.

McIntyre and a former Treasury official said the study included both current taxes and taxes on income that is deferred, which may never be subject to U.S. tax.

"That makes the U.S. rate look higher than it actually is," McIntyre said.

The Roundtable study computed average effective tax rates paid by dividing total income taxes by pretax income.

The inclusion of deferred taxes also excludes the impact of timing advantages enjoyed by U.S. companies, according to Martin Sullivan, an economist and former U.S. Treasury Department official.

The United States has more liberal depreciation rules than many peers, letting companies more quickly write down the loss in value of equipment and other assets more quickly, .

"The study shows the unsurprising result that compared to multinational companies in other large countries — like Japan, China, Germany, France, United Kingdom — the U.S. book effective rate is marginally higher," Sullivan said. "Taking into account depreciation advantages could significantly change the relative rankings, i.e., the U.S. would almost certainly move down the list."


Sources: CNBC, MSNBC, Wikipedia

Wall Street Reacts To North Korea's Attacks: Dow Drops 142 Pts

Dow Falls 142 Points On Korean Worries


U.S. stocks were pummeled today, with the Dow Jones industrials ($INDU) briefly falling below 11,000, in the wake of North Korea's apparent shelling of a South Korean island.

The American slump followed the reaction of markets around the world to the Korean news. Three more worries weighed on stocks: whether Europe could contain the Irish debt crisis, a weak report on existing-home sales and a cut in the Federal Reserve's economic outlook.

The dollar, gold and silver all rallied as some investors sought safe havens for their cash.

The Dow closed down 142 points, or 1.3%, to 11,036, after dropping as many as 186 points early in the session. The Standard & Poor's 500 Index ($INX) fell 17 points, or 1.4%, to 1,181, and the Nasdaq Composite Index ($COMPX) was off 37 points, or 1.5%, to 2,495.

Gold settled up $19.90 to $1,377.60 an ounce in New York. Silver settled up 11.1 cents to $27.572 an ounce. Copper, however, settled down 4.9 cents to $3.7025 a pound.

The U.S. Dollar Index, which measures the greenback against a basket of currencies, was up 1.3% to 79.81. The dollar rose against the euro, British pound and the Japanese yen. The biggest gain was 1.7% against the euro.

Crude oil was down 49 cents to $81.25. Crude had fallen to as low as $80.28. early in the day.

The dollar's gain also pushed interest rates lower, with the 10-year Treasury yield falling to 2.762% from 2.813% on Monday.

Futures trading suggests a slightly higher open on Wednesday. The day includes reports on initial jobless claims and personal income and spending. Deere (DE) and Tiffany (TIF) will report quarterly results.

Jury: SAP owes Oracle $1.3 billion

After hours, a federal jury in Oakland, Calif., ruled that German software maker SAP (SAP) should pay $1.3 billion to rival Oracle (ORCL) for copyright infringement. Oracle shares jumped 1.3% to $27.54 after hours after dropping 3.1% to $27.19 in regular trading.

SAP had admitted liability for the actions of a now-shuttered SAP subsidiary called TomorrowNow.

TomorrowNow, which provided software maintenance and support to Oracle customers, illegally downloaded Oracle software and documents, infringing on 120 copyrights. SAP had argued its liability was $40 million. Oracle wanted $288 million to $3 billion. SAP, whose shares fell 1.4% after hours to $48.02 in New York, may appeal.


Sources: MSN Money, MSNBC

Dow Hits 11,000 First Time Since May 2010! What's Next?

Dow 11,000: What To Do Now??


The Dow Jones Industrial Average just traded above 11,000 for the first time since May 3.

What is about these round numbers?

They tantalize us, even though we know 10,000 or 11,000 is just a number, it’s a milestone that means something. In this case, Dow 11,000 signifies a long and painful slog from March 2009, when the Dow touched 666, yet far from the all-time high of 14,164, reached almost exactly three years ago, on October 9, 2007.

The first time the Dow breached the 10,000 mark was May 3,1999. For those of you keeping score, it might seem like we’ve gone nowhere over the past decade, but if you diligently rebalanced your diversified portfolio throughout the years, you should be OK.

When the Dow crossed for the first time after the financial crisis, it was almost exactly a year ago, on October 15, 2009. Here’s a segment that I did with Katie Couric and Anthony Mason on the CBS Evening News, where we talked about both the symbolic nature of the number and how to think about it going forward.

Experts will guffaw at this and note that our obsession with round numbers is just another example of allowing emotions to guide our investing. I prefer to use the emotional stirring as an excuse to get people to act! After all, the addition of 1,000 Dow points in the last year is a great opportunity to take control of your financial life!

Open your statements
Review where you stand
Take Risk Assessment
Re-balance according to personal goals
Beef-up cash for near-term funding

If you work with a broker or an advisor, you should:

Schedule appointment to review progress
Confirm how much service costs
Review and update your plan
Consider replacing managed funds with index or exchange-traded funds


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Sources: CBS News, CNN, MSN, Google Maps

September 2010 Jobs Report Creates Stock Market Slump

Jobs Report Weighs On Stocks


ADP reports a surprising loss of 39,000 Jobs in September. Verizon will get the iPhone. Commodity stocks rise on a weaker dollar. Investors cheer 2 GE deals. Citrix sinks.

Stocks were struggling to move higher this afternoon after a report suggested private employment fell in September.

Worse, the ADP National Employment Report said today, "there simply is no momentum in employment." The report is viewed as a hint of what Friday's big jobs report will show.

Apple (AAPL) and Verizon Communications (VZ), meanwhile, reversed declines after The Wall Street Journal said a version of the iPhone will be available to Verizon Wireless customers early next year.

At 3:20 p.m. ET, the Dow Jones industrials ($INDU) were up 2 points to 10,947. The Standard & Poor's 500 Index ($INX) had slipped 3 points to 1,157, and the Nasdaq Composite Index ($COMPX) was down 25 points to 2,374 as technology shares weakened.

Among stocks with sizable moves:

Constellation Brands (STZ), up 4.3% to $18.52, second-best among S&P 500 stocks. The world's largest winemaker said it had second-quarter profit of 52 cents a share excluding one-time items, beating the Street estimate of 49 cents.

Diamond Foods (DMND), down 4.7% to $40.47. The nut processor and distributor said 2011 profit may be as low as $2.38 a share. Wall Street has been looking for $2.45.
Costco Wholesale (COST) up 0.6% to $65.07. The gain came despite slower-than-expected September sales. Massey Energy (MEE), up 5.8% to $33.73. The coal producer was rated "buy" in new coverage by Brean Murray & Co.

Wilmington Trust (WL), down 10.4% to $7.82. The Delaware bank founded by the Du Pont family is seeking a capital infusion from private-equity firms, Bloomberg News said.
Gold settled up $7.40 to $1,347.70, a new closing high, as the dollar fell again.

Silver jumped 31 cents to $23.04 an ounce. Crude oil rose 49 cents to $83.31 a barrel despite a larger-than-expected increase in domestic oil supplies.

Interest rates were lower, with the 10-year Treasury yield falling to 2.399% from 2.474% on Monday.

The market was split, with energy, materials and industrial stocks showing strength as commodity prices moved higher.

Freeport-McMoRan Copper & Gold (FCX) was up 2.6% to $93.24 after hitting a 52-week high of $94.36.

Technology and telecom shares were the weak links.

The market's decline comes after stocks soared Monday, with the Dow jumping 193 points and raising hopes that the blue chips could reach 11,000 again for the first time since May.

The economy looks stagnant

U.S. companies shed 39,000 positions in September after adding 10,000 in August, Automatic Data Processing (ADP) said. Economists had expected to see an increase of 18,000, according to Briefing.com. The decline followed seven months of job gains.

The report fueled more speculation that the Federal Reserve will buy more Treasury securities to try to put a floor under the U.S. economy. The dollar was lower in response. Gold, crude oil and other commodities were higher.

While the markets pay attention to the ADP report, it also attracts some skepticism. "Over the last six months, the ADP forecast of private payrolls has undershot the official (Bureau of Labor Statistics) count by an average of 80,000," Nomura economist Zach Pandl wrote this morning. The worst divergence came in April -- 176,000.

He still sees the Labor Department reporting a private-employment gain of 85,000 on Friday.

Meanwhile, planned layoffs rose slightly in September, according to a report by global outplacement consultancy Challenger, Gray & Christmas. During the month, employers announced plans to cut 37,151 jobs, representing a 7% increase from planned reductions in August.

GE cuts a deal, and investors cheer

General Electric (GE) said today it's buying two companies and was spurned in a bid to buy a third.

Investors cheered, pushing the shares up 2.2% to $16.18.

GE said it would acquire privately held Dresser Inc., which makes gas engines used in oil and gas production equipment, for $3 billion.

Its GE Capital finance arm, which had been its weakest point through the recession, had bought $1.6 billion in retail credit assets from Citigroup (C).

But GE also said British oilfield services Wellstream Holdings rejected a $1.2 billion (755 million-pound) takeover approach.


GE has been an active acquirer over most of the past decade, and CEO Jeff Immelt has said the company will focus on deals sized at $1 billion to $3 billion in areas that complement its core industrial and finance franchises.

The company is in the process of selling its NBC Universal media business to No. 1 U.S. cable operator Comcast (CMCSA).

Citrix, Equinix leads techs lower

Shares of Internet-data-center developer Equinix (EQIX) and businss-software developer Citrix Systems (CTXS) were the big weights on tech stocks.

Equinix was down 33% to $70.16 after the company said that third-quarter sales were no more than $330 million, compared with the average analyst estimate of $336.6 million.

Citrix was off 11.3% to $61.89. The sell-off comes after a strong run-up in stock price since early July. The shares had closed at $42.11 on July 2 and recently topped $70 recently after the release of second-quarter earnings at the end of July. Citrix, at the time, reported that it earned 25 cents a share in the quarter.

Citrix was the biggest loser among Nasdaq-100 ($NDX.X) stocks, and only 12 stocks in the index were showing gains. Cisco Systems (CSCO) was the leader, with a 1% gain to $22.21.

The index was down 29 points to $29.04.

Apple (AAPL) was off 1% to $286.38, subtracting 4 points from the Nasdaq-100 by itself. Amazon.com (AMZN) was off 3.5% to $155.29, and Google (GOOG) dropped 1.4% to $530.75.

Semiconductor shares were mostly lower.

Geithner's warning; IMF sees slow U.S. growth

Treasury Secretary Timothy Geithner took aim at China's currency when he warned today that large economies with undervalued exchange rates could create asset bubbles in emerging economies or dismal consumption growth, according to The Wall Street Journal.

The International Monetary Fund said the U.S. economy will grow 2.6% in 2010 and 2.3% in 2011, according to the IMF's World Economic Outlook, which was released Wednesday.

Those forecasts were reduced from July's estimates for growth of 3.3% in 2010 and 2.9% in 2011.


Sources: MSNBC, NY Times, Youtube

Dylan Ratigan Blasts Rep. Debbie Wasserman Over Weak Health Care Bill

Morning Meeting Show Host Dylan Ratigan invited Democratic Rep. Debbie Wasserman Schultz to discuss the topic however they both end up in a heated debate, "You can be your own guest" she eventually told Ratigan.

Visit msnbc.com for breaking news, world news, and news about the economy

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Sources: MSNBC, TPM, Dylan Ratigan's Morning Meeting, The Daily Beast, Google Maps