English Lessons

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/
WASHINGTON (Reuters) - French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job.
The International Monetary Fund's 24-strong board was meeting to go through the formalities of picking a successor to former IMF Managing Director Dominique Strauss-Kahn, who resigned in May to defend himself against charges of sexual assault against a New York hotel maid.
Lagarde, 55, is expected to get the majority of support from IMF member countries guaranteeing her win over Mexico's Central Bank Governor Agustin Carstens and making her the first woman to lead the global institution.
Assuming she gets the official nod, Lagarde will have to immediately deal with an IMF-EU effort to keep debt-stricken Greece afloat and focus on potentially thorny IMF "spillover reports" that analyze the economic and policy actions of the world's major economies.
Brazil said on Tuesday it would back Lagarde, a surprising decision given most countries in Latin America support Carstens.
With support from major emerging powers Brazil, China and Russia already clear, the United States moved to cement Lagarde's victory with an early morning statement.
"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," U.S. Treasury Secretary Timothy Geithner said in a statement.
"EXCEPTIONAL TALENT"
The race has been one of the most hotly contested succession battles in IMF history as emerging market nations expressed displeasure with the 64-year tradition of having a European head the IMF and an American lead its sister institution, the World Bank.
In the end, the lack of backing from major emerging nations sunk Carstens despite his support from Latin America, Canada and Australia.
Geithner nodded to the unhappiness among developing countries at European-U.S. dominance of the two pre-eminent international financial institutions, but noted Lagarde had won broad support. The United States, which holds the most voting power at the IMF, had refused until the final stage of the process to say who it was supporting.
"The only reason the outcome didn't match what (developing nations) wanted was because emerging market countries did not grab the opportunity," said Arvind Subramanian, a senior fellow at the Peterson Institute and the Center for Global Development think tanks in Washington.
"If China, Brazil, India and some others had thrown their weight behind Carstens, the U.S. would have been in a very difficult situation," he added.
SEARCHING FOR CONSENSUS
IMF board directors, who represent the fund's 187 member countries, want to reach a consensus decision that would let them avoid a formal vote. With Washington and major emerging markets backing Lagarde, a formal vote looked unlikely.
In a convention dating back to the creation of the IMF and World Bank after World War Two, Europe has always held the top IMF job, while the World Bank's top post has always gone to an American.
Developing countries had warned against another U.S.-European stitch-up, but some potential candidates from emerging markets decided not to step up because they did not feel they had a fair chance at the job.
Although a long-shot candidate, Carstens vigorously campaigned on his experience as a former IMF official who had first-hand knowledge of developing world economic crises.
Washington holds close to 17 percent of the vote at the IMF, while votes by Europe and other countries that have declared support for Lagarde stack up close to 50 percent.
Countries such as Egypt, Saudi Arabia, Indonesia, South Korea and French-speaking African nations early on declared their support for Lagarde.
Fears of contagion over an escalating debt crisis in Greece have played in Lagarde's favor over the last several weeks because of her political punch across Europe, IMF board officials said.
A few board directors quietly have expressed concern over an unresolved legal investigation into Lagarde's role in a 2008 arbitration payout to a French business. A top French court has put off a decision on the matter until July 8.
One way of dealing with the issue is not to offer Lagarde an IMF contract until the court has made a final decision, a board source suggested.
Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF.
(Additional reporting by Glenn Somerville in Washington and Luciana Lopez in Brasilia)
(Editing by Paul Simao, Jan Paschal and Andrew Hay)

French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job?
A. TRUE
B. FALSE

Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF?
A. TRUE
B. FALSE

DIRECTIONS: Read the following and answer the questions?
http://www.americanenglishconversation.com
http://www.freeenglishconversation.blogspot.com
U.S. consumer confidence slid in May as consumers turned more pessimistic on the outlook for the labor market and inflation worries rose, according to a private sector report released on Tuesday.The Conference Board, an industry group, said its index of consumer attitudes fell to 60.8 from a revised 66.0 in April. The reading was below economists' forecasts for 66.5.

April was originally reported as 65.4. The expectations index tumbled to 75.2 from 83.2, while the present situation index edged down to 39.3 from 40.2.

Consumers' labor market assessment was less favorable. The proportion of those who said jobs were hard to get rose to 43.9 percent from 42.4 percent the month before, although the "jobs plentiful" category also rose to 5.6 percent from 5.1 percent.

Consumers were also more negative on their view of the labor market for the next six months. Those expecting more jobs in the coming months decreased to 15.9 percent from 17.8 percent, and those expecting fewer jobs rose to 20.8 percent from 18.7 percent.

Consumers' expectations for inflation in the coming 12 months rose to 6.6 from 6.3 percent.

Consumers turned more pessimistic on the outlook for the labor market?

A. TRUE

B. FALSE

Consumers were also more negative on their view of the labor market for the next six months?

A. TRUE

B. FALSE

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/
WASHINGTON (Reuters) - French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job.
The International Monetary Fund's 24-strong board was meeting to go through the formalities of picking a successor to former IMF Managing Director Dominique Strauss-Kahn, who resigned in May to defend himself against charges of sexual assault against a New York hotel maid.
Lagarde, 55, is expected to get the majority of support from IMF member countries guaranteeing her win over Mexico's Central Bank Governor Agustin Carstens and making her the first woman to lead the global institution.
Assuming she gets the official nod, Lagarde will have to immediately deal with an IMF-EU effort to keep debt-stricken Greece afloat and focus on potentially thorny IMF "spillover reports" that analyze the economic and policy actions of the world's major economies.
Brazil said on Tuesday it would back Lagarde, a surprising decision given most countries in Latin America support Carstens.
With support from major emerging powers Brazil, China and Russia already clear, the United States moved to cement Lagarde's victory with an early morning statement.
"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," U.S. Treasury Secretary Timothy Geithner said in a statement.
"EXCEPTIONAL TALENT"
The race has been one of the most hotly contested succession battles in IMF history as emerging market nations expressed displeasure with the 64-year tradition of having a European head the IMF and an American lead its sister institution, the World Bank.
In the end, the lack of backing from major emerging nations sunk Carstens despite his support from Latin America, Canada and Australia.
Geithner nodded to the unhappiness among developing countries at European-U.S. dominance of the two pre-eminent international financial institutions, but noted Lagarde had won broad support. The United States, which holds the most voting power at the IMF, had refused until the final stage of the process to say who it was supporting.
"The only reason the outcome didn't match what (developing nations) wanted was because emerging market countries did not grab the opportunity," said Arvind Subramanian, a senior fellow at the Peterson Institute and the Center for Global Development think tanks in Washington.
"If China, Brazil, India and some others had thrown their weight behind Carstens, the U.S. would have been in a very difficult situation," he added.
SEARCHING FOR CONSENSUS
IMF board directors, who represent the fund's 187 member countries, want to reach a consensus decision that would let them avoid a formal vote. With Washington and major emerging markets backing Lagarde, a formal vote looked unlikely.
In a convention dating back to the creation of the IMF and World Bank after World War Two, Europe has always held the top IMF job, while the World Bank's top post has always gone to an American.
Developing countries had warned against another U.S.-European stitch-up, but some potential candidates from emerging markets decided not to step up because they did not feel they had a fair chance at the job.
Although a long-shot candidate, Carstens vigorously campaigned on his experience as a former IMF official who had first-hand knowledge of developing world economic crises.
Washington holds close to 17 percent of the vote at the IMF, while votes by Europe and other countries that have declared support for Lagarde stack up close to 50 percent.
Countries such as Egypt, Saudi Arabia, Indonesia, South Korea and French-speaking African nations early on declared their support for Lagarde.
Fears of contagion over an escalating debt crisis in Greece have played in Lagarde's favor over the last several weeks because of her political punch across Europe, IMF board officials said.
A few board directors quietly have expressed concern over an unresolved legal investigation into Lagarde's role in a 2008 arbitration payout to a French business. A top French court has put off a decision on the matter until July 8.
One way of dealing with the issue is not to offer Lagarde an IMF contract until the court has made a final decision, a board source suggested.
Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF.
(Additional reporting by Glenn Somerville in Washington and Luciana Lopez in Brasilia)
(Editing by Paul Simao, Jan Paschal and Andrew Hay)

French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job?
A. TRUE
B. FALSE

Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF?
A. TRUE
B. FALSE

English Lessons

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/
WASHINGTON (Reuters) - French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job.
The International Monetary Fund's 24-strong board was meeting to go through the formalities of picking a successor to former IMF Managing Director Dominique Strauss-Kahn, who resigned in May to defend himself against charges of sexual assault against a New York hotel maid.
Lagarde, 55, is expected to get the majority of support from IMF member countries guaranteeing her win over Mexico's Central Bank Governor Agustin Carstens and making her the first woman to lead the global institution.
Assuming she gets the official nod, Lagarde will have to immediately deal with an IMF-EU effort to keep debt-stricken Greece afloat and focus on potentially thorny IMF "spillover reports" that analyze the economic and policy actions of the world's major economies.
Brazil said on Tuesday it would back Lagarde, a surprising decision given most countries in Latin America support Carstens.
With support from major emerging powers Brazil, China and Russia already clear, the United States moved to cement Lagarde's victory with an early morning statement.
"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," U.S. Treasury Secretary Timothy Geithner said in a statement.
"EXCEPTIONAL TALENT"
The race has been one of the most hotly contested succession battles in IMF history as emerging market nations expressed displeasure with the 64-year tradition of having a European head the IMF and an American lead its sister institution, the World Bank.
In the end, the lack of backing from major emerging nations sunk Carstens despite his support from Latin America, Canada and Australia.
Geithner nodded to the unhappiness among developing countries at European-U.S. dominance of the two pre-eminent international financial institutions, but noted Lagarde had won broad support. The United States, which holds the most voting power at the IMF, had refused until the final stage of the process to say who it was supporting.
"The only reason the outcome didn't match what (developing nations) wanted was because emerging market countries did not grab the opportunity," said Arvind Subramanian, a senior fellow at the Peterson Institute and the Center for Global Development think tanks in Washington.
"If China, Brazil, India and some others had thrown their weight behind Carstens, the U.S. would have been in a very difficult situation," he added.
SEARCHING FOR CONSENSUS
IMF board directors, who represent the fund's 187 member countries, want to reach a consensus decision that would let them avoid a formal vote. With Washington and major emerging markets backing Lagarde, a formal vote looked unlikely.
In a convention dating back to the creation of the IMF and World Bank after World War Two, Europe has always held the top IMF job, while the World Bank's top post has always gone to an American.
Developing countries had warned against another U.S.-European stitch-up, but some potential candidates from emerging markets decided not to step up because they did not feel they had a fair chance at the job.
Although a long-shot candidate, Carstens vigorously campaigned on his experience as a former IMF official who had first-hand knowledge of developing world economic crises.
Washington holds close to 17 percent of the vote at the IMF, while votes by Europe and other countries that have declared support for Lagarde stack up close to 50 percent.
Countries such as Egypt, Saudi Arabia, Indonesia, South Korea and French-speaking African nations early on declared their support for Lagarde.
Fears of contagion over an escalating debt crisis in Greece have played in Lagarde's favor over the last several weeks because of her political punch across Europe, IMF board officials said.
A few board directors quietly have expressed concern over an unresolved legal investigation into Lagarde's role in a 2008 arbitration payout to a French business. A top French court has put off a decision on the matter until July 8.
One way of dealing with the issue is not to offer Lagarde an IMF contract until the court has made a final decision, a board source suggested.
Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF.
(Additional reporting by Glenn Somerville in Washington and Luciana Lopez in Brasilia)
(Editing by Paul Simao, Jan Paschal and Andrew Hay)

French Finance Minister Christine Lagarde is set to be named the IMF's new chief on Tuesday after the United States and leading emerging markets endorsed her, maintaining Europe's grasp on the top job?
A. TRUE
B. FALSE

Lingering resentment over Europe's hold on the top job will require the new managing director to act quickly to reassure developing nations they have a stake in decision-making at the IMF?
A. TRUE
B. FALSE

English Lessons

DIRECTIONS: Read the following and answer the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://grammar-help.blogspot.com/
http://freeenglishlessons-denise.blogspot.com/
 
Most Asian markets ended in the red after euro zone finance ministers delayed a final decision on extending emergency loans to debt-stricken Greece, dashing hopes for a quick solution to the political impasse. 
The FTSE CNBC Asia 100 Index [.FTFCNBCA  6455.52    -48.37  (-0.74%)], which measures markets across Asia, fell 0.7 percent.
The Nikkei average ended flat, with investor caution before the Federal Open Market Committee meeting this week offsetting gains in power companies, which rose on a government official's comment to restart nuclear reactors.
Shares in power companies Chubu Electric and Kansai Electric  jumped after Trade Minister Banri Kaieda said on Saturday that government inspections showed all nuclear power plants in Japan had adequate safety measures against severe accidents and called on local governments to give the green light to restarting nuclear reactors. 
But, shares of Japanese game developer Sega Sammy tumbled after the firm said information belonging to 1.3 million customers had been stolen from its database, the latest in a rash of global cyber attacks against video game companies. 
The benchmark Nikkei average [.N225  9354.32    2.92  (+0.03%)   ] closed at 9,354.32, while the broader Topix gained 0.2 percent to 806.83.
Seoul shares dipped as foreign investor selling continued for a third straight session, with technology issues and crude oil refiners including Samsung Electronics and S-Oil losing ground.
The Korea Composite Stock Price Index [.KS11  2019.65    -12.28  (-0.6%)   ] ended down 0.6 percent at 2,019.65 points. 
Australian stocks suffered another reversal as morning gains evaporated to send the market to a fresh nine-and-a-half-month low, with doubts about the Australian economy adding to worries about a Greek debt default.
Shares in oil refiner Caltex slumped 6.9 percent after it said refining margins have dropped sharply and its first-half profit would fall by up to 39 percent.     
The benchmark S&P/ASX 200 index [.AXJO  4451.70    -33.20  (-0.74%)   ] dropped 33.2 points or 0.7 percent to 4,451.7, having reached as high as 4,520 in morning trade.
China's main stock index ended down 0.8 percent in thin trade near a nine-month low on dampened by tight liquidity in the interbank market, while banks prepared to meet Monday's deadline for a hike in requirement reserve ratio. 
The liquidity squeeze in China's money market makes brokerages, fund managers and wealthy personal investors unable to obtain sufficient cash for investments in stocks. 
The benchmark Shanghai Composite Index [.SSEC  2621.25    -21.57  (-0.82%)   ] finished down at 2,622.6 points, the lowest level since late September 2010 and extending a 2.3 percent loss over the week last week.
Hong Kong shares gave up earlier gains to end lower as property issues floundered and a sluggish market, which looks poised to hit a nine-month low, weighed.
The benchmark Hang Seng Index [.HSI  Loading...      ()   ] fell 0.4 percent to 21,599.5 with the property sub-index slipping 2.2 percent to its lowest level in a year.
Cheung Kong [0001.HK  109.20    -4.30  (-3.8%)   ] fell 3.8 percent, leading a broad decline in property counters in Hong Kong after a top government official warned of the growing risks of a property bubble in the territory.
In Southeast Asia, Singapore's STI [.FTSTI  3013.60    8.32  (+0.28%)   ] rose 0.3 percent at the finish line, while Malaysia's KLCI [.KLSE  1559.19    -4.24  (-0.27%)   ] ended 0.3 percent lower.

Most Asian markets ended in the red after euro zone finance ministers delayed a final decision on extending emergency loans to debt-stricken Greece, dashing hopes for a quick solution to the political impasse?
A. TRUE
B. FALSE

Did the benchmark Hang Seng Index fell 0.4 percent to 21,599.5 with the property sub-index slipping 2.2 percent to its lowest level in a year?
A. TRUE
B. FALSE 
DIRECTIONS: Read the following and answer the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://grammar-help.blogspot.com/
http://freeenglishlessons-denise.blogspot.com/
NEW YORK (Reuters)  Stocks edged higher on Wednesday after an upbeat outlook from FedEx as investors awaited the Federal Reserve's assessment of the economy and any clues about plans for dealing with recent weakness.
Economic bellwether FedEx Corp (FDX.N) rose 2.4 percent to $91.31, lending support to the market after the shipping group reported strong fourth-quarter profit and forecast robust 2012 earnings.
"The new news there is FedEx made noise about how the cost of doing business is going down as opposed to up. So are we starting to see some slowdown in inflation here?" said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
The Dow Jones Transportation average (.DJT) gained 0.8 percent.
The Dow Jones industrial average (.DJI) gained 4.39 points, or 0.04 percent, to 12,194.40. The Standard & Poor's 500 Index (.SPX) put on 1.74 points, or 0.13 percent, to 1,297.26. The Nasdaq Composite Index (.IXIC) added 2.13 points, or 0.08 percent, to 2,689.39.
The Fed is likely to acknowledge weakness in the economy and reiterate its commitment to keeping interest rates low for an extended period, according to analysts.
Investors will look for clues on new measures to support the economy as the Fed's second quantitative easing program ends this month.
"(Bernanke) could surprise you, but he's certainly not looking at inflation or looking at an overheating economy. He's not looking at an economy that is so dire that he has to fire a bullet he really doesn't want to fire right now. So it's going to be the bullet is in the gun, it's ready to go if I need it, and everyone is expecting that," said Massocca.
Adobe Systems Inc (ADBE.O) slumped 6.4 percent to $29.96 a day after the software maker reported a 54 percent jump in quarterly profit but warned of weakness in European demand.
U.S. stocks advanced for the fourth straight day on Tuesday on expectations the Greek prime minister would survive a confidence vote, a key hurdle to avoiding a debt default, adding momentum to a recent rebound.
The Nasdaq posted its biggest percentage gain since October on Tuesday, while the S&P 500 marked its best day in two months in what traders see as continued short-term buying from deeply oversold levels.
Net short positions by hedge funds on the S&P 500 have recently increased, according to Societe Generale cross-asset research.
A statement from the Federal Open Market Committee is due at 12:30 p.m. EDT, followed by Bernanke's press conference at 2:15 p.m. EDT?
A. TRUE
B.FALSE
The new news there is FedEx made noise about how the cost of doing business is going down as opposed to up. So are we starting to see some slowdown in inflation here?
A. TRUE
B.FALSE
DIRECTIONS: Read the following and answer the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://grammar-help.blogspot.com/
http://freeenglishlessons-denise.blogspot.com/
Shares of major Chinese lenders China Construction Bank and Agricultural Bank of China fell to multi-month lows on Tuesday, hit by potentially souring loans, an economic slowdown and tighter capital requirements. 

AFP | Getty Images
--------------------------------------------------------------------------------

CCB [1288.HK  3.94    -0.05  (-1.25%)   ] was down 2.7 percent to a nine-month low of HK$6.43, while AgBank [3988.HK  3.79    -0.03  (-0.79%)   ] was down 3.8 percent to a four-month low of HK$3.84, versus the benchmark Hang Seng Index's [.HSI  21850.59    251.08  (+1.16%)   ] 0.4 percent rise. 
"The risk of a hard landing for the Chinese economy is increasing," said Alexander Lee, a Hong Kong-based analyst at DBS Vickers. "The Japanese earthquake, a slow U.S. economy, the Eurozone problems and a slowing Chinese economy are all building up on the banking sector." 
CCB is China's largest mortgage lender at a time when the government is taking increasingly heavy-handed measures to cool real estate prices, prompting Standard & Poor's to lower its outlook on the country's property sector to negative. 
AgBank is the biggest lender to rural causes and has the highest non-performing loan ratio and lowest capital adequacy ratio among the big four lenders, raising worries that it may need fresh capital if the government tightens capital requirements.  
Further weighing on the two stocks is the impending expiry of their cornerstone investors' lock-up period, with Bank of America [BAC  10.695    0.095  (+0.9%)   ] able to sell CCB shares from late August. Bloomberg reported on Monday that Bank of America may sell half its stake in the lender to comply with new industry capital rules.
The lock-up period for AgBank will begin expiring in July, which could lead to a large number of its shares flooding the market if cornerstone investors including Singapore's Temasek and the Qatar Investment Authority choose to sell. 
"This is a known risk factor that most investors should know about," said Patrick Pong, an analyst at Mirae Asset Securities. 
"These cornerstone investors may choose to sell down some of their holdings, and that may weigh on the shares in the short term." 
     
Slowdown and Tightening 
The total amount China's banks have lent compared to the country's GDP size has risen to "alarming levels", and off-balance sheet financing could lead to future asset quality problems, Credit Suisse wrote in a research report on Monday. 
Much of the off-balance sheet financing is likely to have gone to local government financing vehicles  companies set up by provincial or city authorities who are forbidden from borrowing directly from banks. 
The country's top banks provided many of the loans as part of a giant economic stimulus programme launched by Beijing in late 2008 to counter the global financial crisis. 
"There are signs of an economic slowdown in China, and we believe that this may not be just a transient problem as the situation is much more complex with structural problems," Credit Suisse analysts Vincent Chan and Peggy Chan wrote in a note on Monday. 
Monetary tightening in China could further pressure the sector, with the central bank raising bank reserve ratios last week for the ninth time since October to curb inflation, which is running at its fastest pace in almost three years. 
The People's Bank of China is also likely to raise its benchmark interest rate at least once more and reserve requirements at least three more times this year, a Reuters poll showed in April.
"There's an increasing number of short-term risks in the horizon, and that's something investors need to look out for," said Lee at DBS Vickers. 

The lock-up period for AgBank will begin expiring in July, which could lead to a large number of its shares flooding the market if cornerstone investors including Singapore's Temasek and the Qatar Investment Authority choose to sell?
A. TRUE
B.FALSE

The People's Bank of China is also likely to raise its benchmark interest rate at least once more and reserve requirements at least three more times this year, a Reuters poll showed in April?
A. TRUE
B.FALSE
DIRECTIONS: Read the following and answer the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://grammar-help.blogspot.com/
http://freeenglishlessons-denise.blogspot.com/
The nations two biggest providers of reverse mortgages are no longer offering the loans, as the economics of the business have come under pressure.

Wells Fargo, the largest provider, said on Thursday that it was leaving the business, following the departure in February of Bank of America [BAC  10.68    0.08  (+0.75%)   ] , the second-largest lender. With the two biggest players gone  together, they accounted for 43 percent of the business, according to Reverse Market Insight  prospective borrowers may find it more difficult to access the mortgages.
Reverse mortgages allow people age 62 and older to tap what may be their biggest asset, their home equity, without having to make any payments. Instead, the bank pays the borrowers, though they continue to be responsible for paying property taxes and homeowners insurance.
But the loans have increasingly become a riskier proposition. Banks are not allowed to assess borrowers ability to keep up with all their payments, and more borrowers do not have the wherewithal to stay current on their homeowners insurance and property taxes, both of which have risen in many parts of the country. At the same time, borrowers have been taking the maximum amount of money available, often using it to pay off any remaining money owed on the home. Yet home prices continue to slide.
We are on new ground here, said Franklin Codel, head of national consumer lending at Wells Fargo [WFC  27.33    0.53  (+1.98%)   ] . With house prices falling, you reach a crossover point where they owe more than the house is worth and it creates risk for us as mortgage servicers and for HUD. He was referring to the Department of Housing and Urban Development, whose Federal Housing Administration arm insures the vast majority of these loans through its Home Equity Conversion Mortgage program.
As a result, banks are seeing a rise in what are known as technical defaults, when homeowners fall behind on their taxes or homeowners insurance, both of which are required to avoid foreclosure. According to Reverse Market Insight, about 4 to 5 percent of active reverse mortgages, or 25,000 to 30,000 borrowers, are in default on at least one of those items.
Bank of America, meanwhile, said that declining home values made fewer people eligible for reverse mortgages. So it decided to redeploy at least half of those working on the mortgages to its loan modification division, which has been criticized for failing to help enough homeowners on the brink of foreclosure.
For Wells Fargo, however, the inability to assess borrowers financial health was the biggest factor for exiting the business. Anyone over the age of 62 with enough home equity can take out a reverse mortgage, regardless of their other income. The amount of money received is determined by the borrowers age, the amount of equity in the home and prevailing interest rates.
We are not allowed, as an originator, to decline anyone, added Mr. Codel of Wells Fargo. We worked closely with HUD to find an alternative solution and we were unable to find one with them, which led to this outcome.
Reverse mortgage borrowers are required to pay premiums for mortgage insurance, which protects the lender if the homes are ultimately sold for less than the mortgage value, since the government is required to pay the difference to the lender. The premium rates were increased last October to account for declining home values (though one sizable upfront mortgage premium was eliminated to make the loans more attractive to certain borrowers).
But lenders are responsible for making tax and insurance payments on behalf of delinquent borrowers until they submit an insurance claim to HUD, at which point the agency would be responsible since it provided the insurance against default.
In January, HUD sent a letter to lenders and reverse mortgage counselors that provided guidance on how to report delinquent loans to the agency, and what steps the lenders could take to get borrowers back on track, like establishing a realistic repayment plan that could be completed in two years or less, or getting a HUD-approved mortgage counselor involved to help come up with a solution. If one cannot be reached, the lenders must begin foreclosure proceedings.
Both Wells Fargo and Bank of America have said they have not foreclosed on any borrowers to date.
The National Reverse Mortgage Lenders Association, the industry group, said it has been working with HUD to come up with procedures that would allow lenders to assess a prospective borrowers income and expenses, or at least require homeowners to set aside money to pay for taxes and insurance. A spokeswoman for HUD said the guidance is still being drafted.
As it stands now, borrowers are required to see a HUD-approved lender before they can apply for a reverse mortgage. As part of that process, consumers are educated on the nuts and bolts of how the loans work and what their responsibilities are, including that they need to be able to continue to pay taxes, insurance and keep the property in good repair.
We dont tell consumers what decision to make, but we do try to give them the tools to make a decision, said Sue Hunt, director of reverse mortgage counseling at CredAbility, a nonprofit consumer credit counseling agency. She added that their sessions last about an hour and 15 minutes, on average. The counselors also look at the consumers budget to see if it is sustainable with the mortgage, as well as what circumstances might arise that could throw the borrower off track.
Outside factors are affecting people who thought five or six years ago that they were in pretty good shape, she added. The world has changed a bit around them.
In days past, the borrower would get the reverse mortgage, and equity would continue to build, experts said, which would provide borrowers with more options  like refinancing  should they fall on hard times. Declining home values have changed that calculus for both bankers and consumers. Borrowers have not been able to pull out as much money. At the same time, the government has also tightened its withdrawal limits.
There were a total of more than 50,000 reverse mortgages, totaling $12.66 billion, made industrywide since last October, according to HUD.
Both Wells Fargo and Bank of America will continue to service their existing reverse mortgages. And the reverse mortgage association has said it will work with its members to ensure that senior citizens who need the loans can get them, though some experts said that less competition could increase certain fees.
There is a certain amount of the business done by Wells and Bank of America that happens because of their bank branches, brand names and large sales forces, said John K. Lunde, president of Reverse Market Insight. We would expect something more than half of their volume to be absorbed by the rest of the industry, with something less than half not happening.
Wells Fargo, which said that reverse mortgages represented 2.2 percent of its retail mortgage business, employs about 1,000 reverse mortgage workers. They are being given a chance to find other positions at the bank. Bank of America said that about half of its 600 workers have been reassigned within the bank. MetLife, the third-largest provider of reverse mortgages, declined to comment on its business.

Wells Fargo, the largest provider, said on Thursday that it was leaving the business, following the departure in February of Bank of America?
A. TRUE
B.FALSE

Wells Fargo, which said that reverse mortgages represented 2.2 percent of its retail mortgage business, employs about 1,000 reverse mortgage workers?
A. TRUE
B.FALSE

English Lessons

DIRECTIONS: Read the following and answer all the questions?
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http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/

You may never have heard of Comphania Energetica de Minas Gerais (NYSE ADR: CIG).

But this Brazil-based electric utilities company could be your key to unlocking profits - and income - at a time when much of the developed world is mired in stagflation.

So let's buy Comphania Energetica de Minas Gerais (**).
It's not a difficult decision when you look at the global market and see that there aren't many trustworthy investments in the United States and Europe.
The non-stop news flow out of Europe has wrecked investor confidence. The market now is pricing in haircuts on European sovereign debt. And this process has driven down yields in Western developed nations, as investors fear government default.
You only have to look at what bond yields are in the United States and Germany, compared to other nations like Ireland or Greece, to see the real fear that exists in the world today. Two-year Greek debt is trading with a 35% yield -- not that long ago it was below 10%.
Still, that doesn't exactly make the dollar a safe-haven.
With so much acrimony over the debt ceiling, the U.S. is threatening a temporary default on its debt payments. The U.S. Federal Reserve meanwhile is keeping interest rates at artificially low levels in an effort to stimulate economic growth. That means the U.S. central bank is essentially punishing people who are retired and need to live off the cash flow from their savings and retirement funds.
Indeed, millions of retired people who rely on such fixed-income investments have been hurt by the actions taken by central banks - not just in the United States, but Japan and Europe, as well.
Of course, that's not to say all investors have been punished.
There are global investors - with an eye toward maintaining their cash flow from investments - that have figured out how to meet their cash flow needs and escape from the real negative rates offered in the developed markets.
Click here to continue reading...
----------------------------------------------------------------------------------------------------
Will $1 trillion be enough?
We're giving away trillion-dollar bills, to show people what runaway inflation can do to a country's currency. This authentic banknote from Zimbabwe will impress your friends - even if it won't buy a pack of gum in that poor, beleaguered country. Along with your trillion-dollar bill, we'll also send you an important free report on how gold and silver can help protect your savings. To receive your free report... and let us make you a Trillionaire... go here.
---------------------------------------------------------------------------------------------------- Microsoft, Intel and Cisco Follow Path Predicted in 'Leaders to Laggards' Series
David Zeiler, Associate Editor, Money Morning
Money Morning subscribers who read our Leaders to Laggards series on the flagging fortunes of Microsoft Corp. (Nasdaq: MSFT), Intel Corp. (Nasdaq: INTC) and Cisco Systems Inc. (Nasdaq: CSCO) weren't surprised by subsequent developments, since we told you exactly what to expect.
The Leaders to Laggards articles described how each company's failure to anticipate changes in their markets undermined their ability to grow revenue. Consequently, their stocks - which many investors rode to massive profits in the 1990s - have languished for the past decade.
Those tribulations have continued since the publication of our series. Microsoft and Cisco have struggled mightily, and as predicted, only Intel has managed to make headway.

Why Intel Is Still a 'Buy'
Intel surprised Wall Street with better-than-expected earnings last week - its standout divisions pointing the way to the future growth that for years had eluded the company.
Profits were up 2%, while revenue jumped 21% year-over-year. And gross margins edged up to 64% from 61% in the previous quarter.
Revenue from data centers, which provide the infrastructure for the cloud-computing trend that is now beginning to dominate mobile devices such as tablets and smartphones, was up 15.2% and accounted for nearly 20% of total sales.
Intel sees data centers as a major source of growth. The company expects sales to rise to $10 billion this year and to $20 billion within five years.
An even bigger surprise was the strength in the chipmaker's PC business, which accounted for 64% of Intel's revenue. Sales of the PC division rose 11% despite sluggish growth of about 2.5% in the overall PC market.
"We knew that there would be strength in the servers, but to see double-digit growth in their PC unit is great," Michael Shinnick, a money managerat Wasatch Advisors Inc.,told Bloomberg News.
Click here to continue reading...


Is This Washington's Worst Job Ever?
America may have finally had it with Washington - and the debt-ceiling debate might be the last straw.
A new USA Today/Gallup Poll found that 40% of Americans surveyed feel the job our elected leaders are doing with the federal budget is the worst they've ever seen in their lifetimes.
Turns out, many of our readers agree.
"It is sad that we can't trust a word being said in D.C. and the solutions being presented are not for the long-term survival of our country, but the politicians' own agenda." - Gary P.
We'd like to know more about what you think is going wrong in Washington. What do you think about the job U.S. President Barack Obama and Congress have done? What advice would you offer them if you had their attention? How worried are you about our future?

Click here to check the full list of questions we'd like you to chime in on. To share your thoughts on how Washington has been doing, send an e-mail to the Money Morning Mailbag at mailbag@moneymappress.com and put "debt-ceiling debate question" as the subject line. .


The $1 Billion Armageddon Trade Placed Against the United States
By Jack Barnes, Contributing Writer, Money Morning
Someone dropped a bomb on the bond market Thursday - a $1 billion Armageddon trade betting the United States will lose its AAA credit rating.
In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world.
The massive trade wasn't placed in bonds themselves; it was placed in the futures market.
The trade was for block trades of 5,370 10-year Treasury futures executed at 124-03 and 3,100 Treasury bond futures executed at 125-01.
The value of the trade was about $850 million dollars. In simple terms, if that was a direct bond buy, no one would be talking about it.
However, with the use of futures, you have to have margin capacity behind the trade. That means with a single push of a button someone was willing to commit more than $1 billion of real capital to this trade with expectations of a 10-to-1 return ratio.

You only do this if you see an edge.

You may never have heard of Comphania Energetica de Minas Gerais (NYSE ADR: CIG).

But this Brazil-based electric utilities company could be your key to unlocking profits - and income - at a time when much of the developed world is mired in stagflation?

A. TRUE
B. FALSE    

English Lessons

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/

English Lessons

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/   
The price of gold could beat the record high of $1,609.51 an ounce it hit earlier this week, a fund manager told CNBC Thursday.
"Gold will go much higher," said Irakli Menabde, founding partner of fund manager M2 Capital Partners.
"It's one of the most attractive investment opportunities out there."
The price of spot gold (Exchange: xau=) has tripled since the current bull market began five years ago.
While the price of gold usually falls during the summer, the past month has been very different.
During the last sizeable spike, in the 1970s, it saw a 24-fold increase from $35 to $850 per ounce, according to Menabde.
"Gold is a reflection of what's going on in fiscal and monetary policies of the developed world and what's going on in terms of the great inflation scare in emerging markets," he said.
Gold, seen as a safe haven in times of economic turmoil, has shot up as fears grow about debt crises on both sides of the Atlantic.
In recent years, its price has also been boosted by the increased buying power of India and China in particular.
As inflation is currently high in India, gold has become a more popular investment. India and China accounted for 58 percent of physical gold demand around the world in the first quarter of this year, according to the World Gold Council.
Another important factor in the rise of the price of gold has been the increase in exchange-traded funds (ETFs) buying physical gold.
Investments in ETFs backed by physical bullion rose to a record 2,156 tonnes on July 15, according to Barclays Capital.
Robbert Van Batenburg Head of Global Research, Louis Capital Markets told CNBC that the ETFs need for physical gold, stored in vaults, could have negative consequences.
"There has been a surge of ETFs to gold," he said. "At some point, this is going to put so much stress on the system and I fear regulatory zeal will be drawn towards these ETFs at some point."
M2 Capital Partners is sponsoring the GATA Gold Rush conference in London in August.
Menabde called for a gold stock market and said: "The gold physical market is more about the defensive nature of gold, but a gold stock market would also deliver dividends and surging share prices."
"We have seen the decoupling between the gold price and gold stocks, and at some point we will see the divergence between gold stocks price and physical price."
Cramer on Wednesday raised his price target on Apple from $400 to $500 a share. Yet at the $500 level, the technology stock will be selling at just 11.5 times his estimates for next fiscal year's earnings, only three quarters of what the average company in the S&P 500 index sells for.

Apple Inc (AAPL) 387.41     0.51  (+0.13%%) NASDAQ

Apple's stock [AAPL  387.41    0.51  (+0.13%)   ] rallied 10 points on Wednesday while the overall market did nothing, yet Cramer said stocks are still the best asset class to own. To make his case, he compared the United States versus the "United States of Apple or more appropriately, iUSA." This comparison shows why stocks should be owned, he said, especially as companies are doing everything right while the country's leaders are doing so many things wrong.

For starters, Cramer noted the U.S. is deeply in debt. If the U.S. wasn't such a large part of the world economy with a currency that has a legacy of being worth something, he thinks the International Monetary Fund would be knocking on the U.S.'s door at this rate of spending.

Apple, on the other hand, has $76 billion in cash and no debt to speak of, Cramer said. Some critics have actually complained that Apple should be putting its cash to work. Cramer thinks it made the right decision to keep its cash, though. After all, he doesn't think there have been any companies worth acquiring. He would, however, like to see Apple pay a dividend. Being as there are only 30 companies in the U.S. with a market capitalization larger than the cash position of Apple, some may argue it already has more than enough money saved for a rainy day, he argued.

So when it comes down to it, would you rather invest in a country that is deep in debt or a company that's prudent enough to say it will sit on its money until it finds a company worth buying? Cramer is going with the latter.

Next, Cramer compared U.S. leaders to Apple's management. For a long time, people thought of Apple as an one-man band, Cramer said. Many people thought Steve Jobs was the brains behind the operation and the one guy calling all of the shots. Since Jobs took a medical leave of absence last year, though, we've learned that Apple is culture full of great minds, who develop innovative products and give the customers what they want, Cramer said. Apple's management seems to encourage innovation and then nurtures it.

Meanwhile, Cramer asked what innovation has Washington fostered?

"Who the heck can even afford to innovate in that horrible atmosphere of rancor and anger where partisanship is the worst it's been since the Civil War," Cramer complained. "Oh, and let's face it, with the United States, the customer is always wrong, or at least the domestic customer, since we give money away left and right to unfriendly foreign regimes that a less diplomatic man than myself might call our enemies."

Cramer then discussed the balance of trade. Many companies and unions are complaining that we need more protection from trade partners overseas, he said. They want the government to help them sell more, but Apple is taking share left and right. It's destroying its competition around the world, he noted. Thanks to ingenuity, execution and brainpower, Apple is doing well in market after market.

Many Americans believe our best days are behind us, Cramer said. Nobody believes Apple's future isn't as bright as its past, though. He thinks Apple's future prospects are strong.

So what's the bottom line? To Cramer, Apple is a great example of why capitalism is worth cheering for. Unfortunately, Apple also puts U.S. leaders to shame because all they can do is bicker.

The price of gold could beat the record high of $1,609.51 an ounce it hit earlier this week, a fund manager told CNBC Thursday?
A. TRUE
B. FALSE    

Many Americans believe our best days are behind us, Cramer said. Nobody believes Apple's future isn't as bright as its past, though. He thinks Apple's future prospects are strong?
A. TRUE

 

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OPEC's proven crude oil reserves rose 12.1 percent in 2010 to 1.19 trillion barrels led by Venezuela, which has surpassed Saudi Arabia as the group's largest reserves holder, OPEC said in its Annual Statistical Bulletin.

AP

The latest figures are unlikely to quell scepticism about reserves estimates from the Organization of the Petroleum Exporting Countries, some of which analysts say may be exaggerated although the producers deny doing so.

OPEC's growth in oil reserves was mainly due to Venezuela, whose holdings climbed to 296.5 billion barrels from 211.2 billion in 2009, the report said. Top OPEC exporter Saudi Arabia's reserves were steady at 264.5 billion barrels.

Iran and Iraq also boosted their reserves last year. In October, Iran increased its reserves to 150 billion barrels within a week of an upward revision by Iraq, ensuring that Tehran continued to rank above Baghdad.

"OPEC has a fantastic history of competitive reserves upgrades," said Bill Farren-Price, analyst at Petroleum Policy Intelligence.

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Reserves are one of the criteria OPEC has used in setting output targets. Iran and Iraq were rivals in the past over OPEC quotas, and OPEC in the next few years is expected to tackle the issue of bringing Iraq back into the quota system. Iraq is exempt at present.

Iraq boosted its reserves to 143 billion barrels last year, up 24 percent, the report said. Iraq has said its reserves increased as work by international oil companies started to yield results.

Venezuela's move to the No. 1 reserves spot bumps Iran and Iraq to third and fourth place respectively. Commenting on the OPEC report, an Iranian official said the country still held its status as OPEC's second-largest producer after Saudi Arabia.

"Iran is still the second crude producer of OPEC and insists on this," an unnamed Oil Ministry official told Iran's state news agency IRNA on Tuesday.

Rising global share

OPEC said a year ago its reserves increased in 2009 because of Venezuela. President Hugo Chavez's government said in January it had had overtaken Saudi Arabia as the world leader.

Venezuela's new deposits were booked in the South American country's Orinoco extra heavy crude belt.

The boost in Venezuela's figures helped OPEC attain a larger share of the global total. OPEC holds 81.3 percent of the world's proven crude reserves, up from 79.6 percent in 2009, the report said.

Saudi Arabia, by far OPEC's largest exporter, holds an advantage in that its oil is mostly light, conventional, easily-pumped crude. The Orinoco oil needs to be upgraded or mixed with a lighter grade to create an exportable blend.

Some countries such as Algeria, Kuwait and the United Arab Emirates had no change in their reserves in 2010 or in any year since 2006, the report said.

This trend has also given rise to doubts about the estimates, as analysts say it is unlikely new additions to reserves will exactly match production.

OPEC's 12 members pump more than a third of the world's oil. Several producers, including Saudi Arabia and Venezuela, have denied suggestions their reserves have been exaggerated.Senate Budget Chairman Kent Conrad said Thursday that it's impossible to enact the "Gang of Six" plan for spending cuts, a tax code overhaul and changes in benefit programs by the Aug. 2 default deadline, so a short-term extension of the debt limit is the most likely solution.

Melina Mara | The Washington Post | Getty Images Kent Conrad

The North Dakota Democrat, part of the so-called "Gang of Six" senators, said doing nothing is not an option.

"We're all going to have to do things we'd prefer in a perfect world not to have to do," he said.

Conrad's comments came after President Obama signaled Wednesday that he could support a short-term increase in the U.S. borrowing limit as long as it is part of a broader deficit reduction deal.

Obama previously promised to veto a short-term extension of the $14.3 trillion debt limit. But White House spokesman Jay Carney said in a written statement the president would consider an exception if congressional leaders look like they're getting close to a deal for a long-term debt limit extension with deficit reduction.

Conrad told MSNBC he believes 40 senators back his group's $3.7 trillion deficit-reduction proposal and a program of tax changes and revisions in the Social Security and Medicare programs.

"Our tax system is completely out of date," Conrad said in a separate interview on CNBC. "It’s anticompetitive, it's antigrowth, it's holding us back, it's hemorrhaging revenue. We can do a lot better than that. It’s going to take time."

In the CNBC interview, Conrad said the plan would cut the deficit by $3.7 trillion in 10 years, of which a $500 billion "downpayment" would come within six months. It would also raise $1 trillion in new revenue, repeal the Alternative Minimum Tax and lower tax rates besides making major changes to entitlements.

He conceded that some proposals are unpopular, but said "we're all going to have to do things we'd prefer in a perfect world not to have to do."

The bipartisan plan would target some of the most cherished tax breaks enjoyed by millions of families—those promoting health insurance, home ownership, charitable giving and retirement savings—in exchange for lowering overall tax rates for everyone.

Many taxpayers would face higher taxes—a total of at least $1.2 trillion over the next decade, and perhaps more.

The plan, released this week, punts on many of the most difficult issues, leaving it to congressional committees to fill in the details later.

But supporters say it provides a framework to simplify the tax code, making it easier for businesses and individuals to comply while eliminating incentives to game the system.

"I think this is an attempt to find a middle ground on taxes that emphasizes keeping rates low and broadening the base as much as possible, and I think that's a very positive aspect of it," said Eugene Steuerle, a former Treasury official who worked on the last tax reform package that passed Congress, in 1986.

The plan, released this week, punts on many of the most difficult issues, leaving it to congressional committees to fill in the details later?

A. TRUE
B. FALSE

But supporters say it provides a framework to simplify the tax code, making it easier for businesses and individuals to comply while eliminating incentives to game the system?

A. TRUE
B. FALSE

B. FALSE     

English Lessons

DIRECTIONS: Read the following and answer all the questions?
http://www.americanenglishconversation.com/
http://www.freeenglishconversation.blogspot.com/
http://www.grammar-help.blogspot.com/  
http://freeenglishlessons-denise.blogspot.com/ 
Huge spending cuts, and maybe some targeted tax hikes.
That's how the deal to raise the debt ceiling is shaping up. Details are thin, as negotiations have been carried out behind closed doors and involve only a few of Washington's heaviest hitters.
This much is known: Lawmakers must raise the nation's $14.3 trillion legal borrowing limit soon. The Treasury Department says that on Aug. 2 it will run out of money to pay the nation's bills in full and on time.
That's only a few weeks away. So what's it gonna take?
The group of lawmakers who participated in negotiations led by Vice President Joe Biden have already identified more than $1 trillion in budget cuts.
Republicans want far more.
But already, $1 trillion in cuts is entering uncharted territory. The cuts would be some of the biggest in history.
"It sounds as if the package is going to be all spending cuts with a few symbolic revenue increases," said Isabel Sawhill, an economist who studies fiscal issues at the Brookings Institution and worked in the Clinton administration.
The $1 trillion in cuts would probably be spread out over the next decade or so, meaning roughly $100 billion less in federal spending each year, although the savings might be larger in later years.
Debt ceiling FAQs: What you need to know
Sawhill said the cuts are likely to be focused on non-security discretionary spending, a small section of the budget that includes funding for food inspectors, the FBI and education grants, among many other programs and services people associate with government.
"The public is going to be a lot more concerned when they see the details and not just the abstraction of less spending," Sawhill said.
That's something Obama clearly has on his mind as well. He made the point in a press conference this week.
"I've said to some of the Republican leaders, you go talk to your constituents, the Republican constituents, and ask them are they willing to compromise their kids' safety so that some corporate jet owner continues to get a tax break," Obama said. "And I'm pretty sure what the answer would be."
On the revenue side, the White House wants to close loopholes that benefit the owners of private jets, and raise taxes on hedge fund managers who pay lower tax rates on so-called "carried interest."
Obama to Congress: Do your job
Additional proposals would change how business inventory is taxed, and eliminate government subsidies for oil and gas companies.
But not if Republicans have anything to say about it. The party's leaders have put up a united front on the issue. Tax hikes will not be considered, they say.
There is a common theme. The proposals spare the middle class and instead focus on corporations and the wealthy. The White House says they focus on "unnecessary" and "unjustifiable" tax breaks.
The revenue increases won't make much of a dent, at least not compared to $1 trillion in spending cuts.
Ending the tax break for owners of private jets, for instance, would only save a few billion dollars, hardly enough to fund the Food and Drug Administration.
"I understand the populist appeal," Sawhill said. "But those numbers are very small."
However, one additional proposal pushed by Democrats could add up to real money.
The White House wants to limit deductions taken by the wealthiest Americans. Depending on the details, that could quickly add up to increased revenue in the hundreds of billions.
Still, those tax increases will only touch a fraction of Americans, while the spending cuts will spread the pain around.
"Americans don't have a firm grasp on what it means to cut a trillion dollars," Sawhill said. "They think it's someone else's trillion dollars."

That's how the deal to raise the debt ceiling is shaping up. Details are thin, as negotiations have been carried out behind closed doors and involve only a few of Washington's heaviest hitters?
A. TRUE
B. FALSE

The White House wants to limit deductions taken by the wealthiest Americans. Depending on the details, that could quickly add up to increased revenue in the hundreds of billions?
A. TRUE
B. FALSE

DIRECTIONS: Read the following and answer all the questions?
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The last remaining member of President Obama's original economic team, Treasury Secretary Tim Geithner is said to be considering leaving his post… on his own accord. Geithner wants to leave the administration after budget talks, according to several reports citing people close to the matter.
Geithner has faced many challenges and became a lighting rod in the last 3-plus years, in dealing with the worst financial and economic crisis since the Great Depression, as the head of Treasury and in his previous role as New York Federal Reserve Bank President.
Critics say Geithner has been too kind to the banks, pointing to his work on the $700 billion TARP program as well as the AIG bailout - which in essence put taxpayer dollars on the line to ensure AIG's counterparties would be made whole. Others say without these moves and his stewardship, the Great Recession would have been far worse.
Mark Zandi, chief economist of Moody's Analytics, applauds Geithner's efforts saying the Treasury Secretary has done an "excellent job." Zandi is especially complimentary of Geithner's work on the bank stress tests which he calls "one of the most successful" measures in helping to end the financial panic in 2009. Less successful, Zandi says, have been Geithner's attempts to resuscitate the housing market.
Regardless of your view Geithner's departure, if it is indeed true, leaves the Obama administration one less economic advisor after the departure of Austan Goolsbee who replaced Christina Romer as the Council of Economic Advisers Chairman. National Economic Council Director Lawrence Summers and Office of Management and Budget Director Peter Orszag left the administration last year.
Who will replace Geithner?
Zandi names several policymakers as potential recplacements, including Fed vice chair Janet Yellen, FDIC chief Sheila Bair and former deputy Treasury Secretary Roger Altman.
But the economist seems to favor JPMorgan Chase CEO Jamie Dimon, saying he'd be a "fabulous" Treasury Secretary. Dimon would be a controversial choice: while a Democrat, Dimon has been highly critical of Obama's push for greater regulation. Meanwhile, consumer advocates and left-leaning Democrats would certainly worry about his Wall Street background.
Satellite TV operator DISH network has outbid several other suitors for the assets of video-rental chain Blockbuster, which were auctioned off in bankruptcy court yesterday.
DISH paid about $321 million for the company, which has about 1,700 store locations.
What will DISH do with Blockbuster?

DISH CEO Charlie Ergen hasn't laid out any specific plans yet, but he will presumably use the chain in at least a few ways.
First, the Blockbuster stores can serve as local sales and service outlets for the DISH service. Second, DISH subscribers might be able to rent Blockbuster's DVDs or stream movies online, allowing DISH to compete directly with Netflix--one of the companies that helped put Blockbuster out of business.
And so what does the deal mean for Netflix?
In the short-term, probably very little. Netflix won its war with Blockbuster a few years ago, and it has since amassed a stunning 20 million subscribers to its US DVD and streaming service. As Netflix CEO Reed Hastings recently spelled out in this interview with me, Netflix is laser-focused on offering its $8-a-month streaming service, rather than competing in pay-per-view or movie sales the way many of its online competitors are doing. This simple value proposition has resonated with customers, and Netflix's subscriber base has boomed in the past two years.
In the longer term, the DISH-Blockbuster combination will add yet another big competitor to a crowded and noisy market, in which satellite companies, cable companies, Apple, Amazon, Facebook, Netflix, Hulu, networks, and studios are all fighting for control of premium video distribution of the future.
Right now, Netflix is by far the most successful of the new entrants, but the industry is changing fast. And the DISH-Blockbuster combination may create another player that everyone needs to pay attention to.
DISH CEO Charlie Ergen hasn't laid out any specific plans yet, but he will presumably use the chain in at least a few ways?
A. TRUE
B. FALSE

Right now, Netflix is by far the most successful of the new entrants, but the industry is changing fast? 
A. TRUE
B. FALSE 

 

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WASHINGTON (AP) -- The Senate has taken up tea party-backed House legislation tying an increase in the government's borrowing authority to a series of conservative demands including a constitutional balanced budget amendment.
Majority Leader Harry Reid, D-Nev., called up the measure to placate Republicans demanding a vote. But he said it "doesn't have one chance in a million of passing the Senate."
Democrats argue that the so-called "cut, cap and balance" measure would impose untenable spending restraints and set spending levels, as a percentage of the overall economy, on par with the mid-1960s -- before the advent of Medicare and automatic Social Security cost-of-living adjustments.
The development Thursday reflected the reality that there's more talk than progress as official Washington wrangles daily over finding a way out of a debt dilemma that has the government sliding inexorably toward a first-ever default on its financial obligations.
President Barack Obama met with House Speaker John Boehner, R-Ohio, at the White House for 90 minutes on Wednesday, but neither side would comment afterward.
Senate Minority Leader Mitch McConnell said Thursday the legislation now before his chamber would be an opportunity for lawmakers to "go on record in support of balancing our books or against it." He urged Democrats to join GOP senators in backing it.
In brief remarks on the Senate floor, the Kentucky Republican assailed Obama for his "reckless spending habits" and wondered about the Democrat's recent attempts to "come across as a fiscal conservative."
Democrats are expected to kill the measure -- which they say would demand debilitating cuts to Medicare -- in a vote on Saturday if not before.
Meanwhile, momentum on a separate bipartisan budget plan by the Senate's "Gang of Six" seemed to ebb as critics warned the measure contains larger tax increases than advertised and it became plain that the measure comes too late and is too controversial to advance quickly -- particularly as a part of a debt limit package that already would be teetering on a knife's edge.
Sen. Kent Conrad, D-N.D., a member of the Gang of Six, said Thursday that some 40 senators of both parties back the plan his group has brought forward. It generally takes 60 votes to pass legislation in the 100-member Senate because the rules permit unlimited debate unless a supermajority votes to limit it.
But Conrad also said he feels there's too little time between now and Aug. 2 to complete a comprehensive package of spending cuts, benefit program changes and an overhaul of the tax code.
Conrad said doing nothing is not an option, saying that "we're all going to have to do things we'd prefer in a perfect world not to have to do."
Absent a breakthrough between Obama and Republicans, there is a hotly contested backup plan by Senate Minority Leader Mitch McConnell, R-Ky., that would give Obama broad new powers to obtain increases in the government's borrowing unless blocked by veto-proof two-thirds margins in both the House and Senate.
Many conservative Republicans are in an uproar over the McConnell plan, and more than 70 House members signed a letter circulated by members of the conservative Republican Study Committee calling on Boehner to come out in public opposition to the McConnell-Reid plan..
In a shift, White House press secretary Jay Carney said Wednesday that Obama would back a short-term deal to prevent a disastrous financial default on Aug. 2 but only if a larger and still elusive deficit-cutting agreement was essentially in place.
Officially, the president continued to push for a big compromise that would cut the nation's budget deficit and extend the government's tapped-out borrowing power above the current $14.3 trillion cap. Obama had threatened to veto any stopgap expansion of the nation's debt limit, at one point last week even challenging House Majority Leader Eric Cantor, R-Va., not to call his bluff about it.
Carney said if a divided Congress and the White House can agree on a significant deal, Obama would accept a "very short-term extension" of the debt limit to let bigger legislation work its way through Congress.
Obama also is open to the McConnell plan, but it seems barely aloft due to fervent tea party opposition in the House. The hope appears to be that such an option will look a lot better to the House in a week or so, given the lack of other ideas.
The Gang of Six plan has come under assault from critics like House Budget Committee Chairman Paul Ryan, R-Wis., who say the plan would increase taxes by $2 trillion over the next 10 years instead of the $1 trillion-plus claimed by proponents like Conrad -- a development likely to stunt momentum among Republicans.
The revenue increase is larger than advertised because the $1.2 trillion in new taxes comes on top of an underlying assumption used by Obama's deficit commission -- and incorporated by the Senate group in its plan -- that the Bush-era income tax brackets for family income exceeding $250,000 would revert to the higher, Clinton administration levels. The deficit panel's assumption was made before Obama buckled in December and signed a full extension of the Bush tax cuts.
The Gang of Six plan also earned poor reviews from liberals like Rep. Jerrold Nadler, D-N.Y., who said it would "balance the budget on the backs of the vulnerable."
And Rep. Howard "Buck" McKeon, R-Calif., who is chairman of the House Armed Services Committee, blasted the plan in a missive to his panel members, saying it would cut the Pentagon much too deeply and would unfairly curb military health and retirement benefits.
The Gang of Six plan promises almost $4 trillion in deficit cuts, including an immediate 10-year, $500 billion down payment that would come as Congress sets caps on the agency budgets it passes each year. It also requires an additional $500 billion in cost curbs on federal health care programs, cuts to federal employee pensions, curbs in the growth of military health care and retirement costs, and modest cuts to farm subsidies.
NEW YORK (Reuters) - The Nasdaq extended gains on Thursday, rising more than 1 percent, helped by upbeat economic data.
The Dow Jones industrial average (DJI:^DJI - News) soared 162.95 points, or 1.30 percent, at 12,734.86. The Standard & Poor's 500 Index (^SPX - News) was up 19.00 points, or 1.43 percent, at 1,344.84. The Nasdaq Composite Index (Nasdaq:^IXIC - News) advanced 33.12 points, or 1.18 percent, at 2,847.35.

The Senate has taken up tea party-backed House legislation tying an increase in the government's borrowing authority to a series of conservative demands including a constitutional balanced budget amendment?
A. TRUE
B. FALSE    

The Gang of Six plan promises almost $4 trillion in deficit cuts, including an immediate 10-year, $500 billion down payment that would come as Congress sets caps on the agency budgets it passes each year?
A. TRUE
B. FALSE