Junk Bonds Make New Run at Par in 'Bubblelicious' Rally: Credit Markets. Junk bonds are closing in on par for the second time this year as fixed-income investors bet recent signs of economic weakness won’t be enough to derail corporate profits and the ability of the neediest borrowers to repay debt. High-yield bonds rose to 98.99 cents on the dollar today after falling as low as 94.47 cents on May 25, according to Bank of America Merrill Lynch index data. In the prior rally, the debt climbed to 99.67 cents on April 30. Prices last rose to par in June 2007, just before credit markets began to seize up as losses on subprime mortgages spread. Investors are pouring money into bond funds at the fastest pace in 15 months as defaults slow and on signs the Federal Reserve won’t raise its target interest rate from a record low. High-yield funds had $2.8 billion of inflows in July, the most since April 2009, and have received $3.6 billion in cash this year, Bank of America Merrill Lynch analysts wrote Aug. 2 in a report. Junk bonds yield 8.492 percent, according to the bank’s U.S. High Yield Master II index.
ACLU Says It Sued Geithner Over Lawyer Licensing for Terrorism Suspects. The American Civil Liberties Union said it sued U.S. Treasury Secretary Timothy Geithner over licensing for lawyers seeking to represent terrorism suspects including those allegedly marked for death by the CIA. The ACLU claims the Treasury Department regulation improperly inhibits the right to legal counsel for U.S. citizens accused of having terrorism ties, some of whom it said the government seeks to kill. “Targeting individuals for execution who are suspected of crimes but have not been convicted,” without due process or disclosed standards, “poses the risk that the government will erroneously target the wrong people,” the group said today in a statement announcing the filing. A copy of the lawsuit, which isn’t available from court records, was provided by the ACLU. The group is joined in the suit by the New York-based Center for Constitutional Rights.
California Democrats Seek Higher Income Tax, Oil Levy. The plan from Democrats in the state Legislature would bring in $1.8 billion by increasing income-tax rates 1 percentage point on all but the wealthiest Californians. It would cut spending by $8 billion and raise $1.5 billion by increasing vehicle-registration fees, $600 million by taxing oil wells and $2 billion by suspending corporate tax breaks.
Kindergarten Attacker Kills at Least Four Children in Shandong, China. A Chinese man stabbed kindergarten children and teachers in the eastern province of Shandong, killing at least four children, citing locals. The attacker, who also injured 12 other children and teachers, broke into the kindergarten in the city of Zibo at about 4:30 p.m. local time. He then turned himself in to police.
Priceline.com(PCLN) Rises After Forecasts Top Estimates. Priceline.com Inc., the second- biggest online travel agency, rose 16 percent in extended trading after its second-quarter earnings and third-quarter forecast topped analysts’ estimates. Excluding some costs, earnings will be at least $4.78 a share, the Norwalk, Connecticut-based company said today in a statement. That compares with the $4.18 predicted on average by analysts surveyed by Bloomberg. “Guidance is well above expectations,” said Imran Khan, an analyst at JPMorgan Chase & Co. in New York. He rates the shares “overweight.” Priceline.com climbed $37.44 to $268.11 in extended trading. The shares, up 5.6 percent this year, had risen $3.29, or 1.5 percent, to $230.67 at 4 p.m. New York time in Nasdaq Stock Market trading.
Wall Street Journal:
Pimco's Worah: Deflation 'Extremely Unlikely'. A senior fund manager at bond-fund giant Pacific Investment Management Co. said Tuesday it is "extremely unlikely" the U.S. could see Japan-like deflation given that the Federal Reserve has the tools to combat a downward spiral in consumer prices.
Foreclosed On - By the U.S. With Bear Stearns Assets, Fed Balances Preserving Investment and Helping Borrowers. James Currell is struggling to prevent his Minnesota home from being foreclosed. But his lender isn't a bank. It is the U.S. government. The Federal Reserve Bank of New York is facing the prospect of foreclosing on a number of properties in the coming months, from homes to commercial buildings, a result of a souring mortgage portfolio it took over when it helped bail out Bear Stearns in 2008.
Trading Slows at Futures Exchanges. The biggest futures-exchange operators saw trading activity decline in July from prior-month levels as a seasonal slowdown in volumes was exacerbated by reduced market volatility. CME Group Inc.(CME) and IntercontinentalExchange Inc.(ICE) on Tuesday reported double-digit dips in average contract volume from June.
Mortgage, Treasury Traders Say 'No Thanks' To More Fed Help. Even if the Federal Reserve were willing to spend $200 billion buying Treasury and mortgage bonds to try to stimulate the economy, as officials have hinted, participants in the markets for those securities say "please stay away." Continued government intervention isn't needed to keep markets healthy, as it was in the depths of the crisis, they say, and they worry that more aid at this point may fail to stimulate growth--and, conversely, spur concerns about a weak economy.
Lehman Makes Its Next Property Gamble. Firm Puts More Cash Into Existing Deals, a Risky Strategy Whose Success Depends on Real-Estate Values Going Higher. Lehman Brothers Holdings Inc., brought down in part by its huge property investments, is doubling down on some of its existing deals in a bet that commercial property markets are near bottom. Since the investment bank's collapse in September 2008, the firm overseeing Lehman's bankruptcy has reinvested more than $1 billion in apartments, office buildings and other commercial property already owned or financed by Lehman. Those properties, located from Austin, Texas, to New York to Washington, faced varying levels of distress. Lehman also has spent nearly $1 billion to pay off partners and creditors and reach other settlements that resulted in the return of real-estate assets to the firm. By piling more cash into these deals, executives at Alvarez & Marsal, the advisory firm overseeing Lehman's bankruptcy proceedings, are hoping to salvage the maximum amount from the $14.4 billion of commercial real estate on the bank's books.
Coming Soon to City, Wi-Fi on the Go. Livery cars are on the verge of becoming roaming wireless-Internet transmitters under a New York venture capitalist's plan to broaden web access.
Tech Gadgets Steal Sales From Appliances, Clothes. Americans are spending more on electronics like iPads and flat-screen televisions and less on durable goods like furniture, washing machines and lawn mowers, according to government data released Tuesday.
Work Shooting Kills Nine. Driver at Connecticut Beer Distributor Faced Dismissal Before Morning Rampage.
ObamaCare and the Constitution - An Update. A federal court denies the government's motion to dismiss the challenge. Last November, a reporter asked House Speaker Nancy Pelosi if it was constitutional for Congress to require Americans to buy health insurance. Ms. Pelosi responded, "Are you serious?" On Monday, U.S. District Judge Henry Hudson got serious. He denied Health and Human Services Secretary Kathleen Sebelius's motion to dismiss a lawsuit brought by the state of Virginia challenging the new health law. His ruling stated that it is far from certain Congress has the authority to compel Americans to buy insurance and penalize those who don't.
Fear Empty Flats in China's Property Bubble. Commentary: Even worse than price bubble of vacant flats. How many flats in China are sitting empty? The media recently floated a story -- denied by power companies -- that 64.5 million urban electricity meters registered zero consumption over a recent, six-month period. That led to a theory that China has enough empty apartments to house 200 million people.
No Oil on the Beach. No Tourists, Either. Tourists have been acting like the beaches of the Florida Panhandle are covered by oil, and for communities like Destin, their absence hurts. About the only thing on Destin's beaches at the end of July was "June grass," harmless green algae that washes up in Gulf waters every year. And a sunbather here and there. Very few sunbathers. Very few people, in fact.
California Pension Fund Knew About High Bell Salaries But Didn't Stop Them, Memo Shows. Officials at California’s state pension fund became aware four years ago of the exorbitant pay raises being given to administrators in the city of Bell and did nothing to stop them, according to an internal memo obtained by The Times. The memo, which pension staff sent to board members today, shows that the California Public Employees’ Retirement System granted an exemption to its rules in 2006 so the Bell city manager could get a 47% pay hike and still receive a full pension on his salary. The pension system learned of the salary hike during the course of an audit and informed Bell officials that the exemption would be needed.
Washington Examiner:
New ID Theft Targets Kids' Social Security Numbers. The latest form of identity theft doesn't depend on stealing your Social Security number. Now thieves are targeting your kid's number long before the little one even has a bank account. Hundreds of online businesses are using computers to find dormant Social Security numbers — usually those assigned to children who don't use them — then selling those numbers under another name to help people establish phony credit and run up huge debts they will never pay off. Authorities say the scheme could pose a new threat to the nation's credit system.
Politico:
Stark's Town Hall Answer Goes Viral. Faced with angry constituents at a recent town hall meeting in his California district, Democratic Rep. Pete Stark gave an answer about federal power that has spread rapidly throughout the conservative blogosphere: "The federal government … can do most anything in this country." A woman sitting in the front row at the July 24 event pressed Stark about his vote in favor of health care reform, the passage of which she called “unconstitutional.” She called into question Stark’s characterization of health care as a “right,” noting that “such a right is actually beyond the power of the federal government to confer.” The woman concluded by asking, “How can legislation such as this be constitutional when it seems to be in direct conflict with the 13th amendment? … And … if this legislation is constitutional, what limitations are there on the federal government’s ability to tell us how to run our private lives?” “I think there are very few constitutional limits that would prevent the federal government from rules that could affect your private life,” Stark replied.
Senate Democrats Punt on Spill Bill. Senate Democrats on Tuesday punted their oil spill response bill to next month, but the extra time doesn’t guarantee the measure will pass — far from it. The delay virtually ensures that strategists from both parties will use the congressional recess to hone their plans, talking points and poison-pill amendments for any floor debate, all with an eye toward the midterm elections.
Reuters:
Missouri Votes to Block US Health Insurance Law. Missouri voters on Tuesday rejected the new U.S. healthcare bill, approving a measure that would forbid the federal government from penalizing people who do not buy health insurance. With 78 percent of precincts reporting, 72.6 percent of voters supported the Health Care Freedom Act, also known as Proposition C, while 27.4 percent rejected it. In approving the measure, Missouri won a victory in a series of planned assaults around the country against the sweeping reform, which was a major part of President Barack Obama's domestic agenda and became law in March. "Proposition C will be a boon to other states that are trying to repeal the individual mandate," said American Legislative Exchange Council task force director Christie Herrera. "Having that grassroots groundswell will give political courage to lawmakers."
Dendreon(DNDN) Says Cancer Vaccine Launch Going Well. Dendreon Corp (DNDN) said on Tuesday that more than 500 prescriptions for its new prostate cancer vaccine Provenge have already been written, and its shares rose nearly 5 percent.
Chosun Ilbo:
North Korea has advanced the placement of long-range SA-5 missiles toward the border with South Korea in the past few months, citing South Korean military officials. The missiles have a range of about 250 kilometers.
Evening Recommendations Citigroup:
Reiterated Buy on (LEA), raised estimates, boosted target to $102.
Reiterated Buy on (PCLN), target $325.
Reiterated Buy on (DOW), target $34.
Night Trading
Asian equity indices are -1.0% to +.25% on average.
Asia Ex-Japan Investment Grade CDS Index 111.0 +2.0 basis points.
Asia Pacific Sovereign CDS Index 108.0 -3.0 basis points.
The ADP Employment Change for July is estimated at 30K versus 13K in June.
10:00 am EST
The ISM Non-Manufacturing Composite for July is estimated to fall to 53.0 versus 53.8 in June.
10:30 am EST
Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,650,000 barrels versus a +7,308,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,000,000 barrels versus a +91,000 barrel increase the prior week. Distillate inventories are expected to rise by +1,000,000 barrels versus a +938,000 barrel increase the prior week. Finally, Refinery Utilization is estimated to fall by -.5% versus a -.9% decline the prior week.
Upcoming Splits
None of note
Other Potential Market Movers
The Challenger Job Cuts report for July, weekly MBA mortgage applications report and the (AXP) Semi-Annual Financial Community Meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and automaker shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day
North American Investment Grade CDS Index 100.23 bps -.55%
European Financial Sector CDS Index 90.66 bps -4.49%
Western Europe Sovereign Debt CDS Index 110.33 bps -1.80%
Emerging Market CDS Index 206.80 bps +.80%
2-Year Swap Spread 16.0 -1 bp
TED Spread 30.0 unch.
Economic Gauges:
3-Month T-Bill Yield .14% unch.
Yield Curve 237.0 -3 bps
China Import Iron Ore Spot $142.80/Metric Tonne +1.13%
Citi US Economic Surprise Index -33.80 +.2 point
10-Year TIPS Spread 1.83% -1 bp
Overseas Futures:
Nikkei Futures: Indicating -49 open in Japan
DAX Futures: Indicating -4 open in Germany
Portfolio:
Slightly Higher: On gains in my Biotech and Medical long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is mildly bearish as the S&P 500 trades just slightly lower, despite more weak economic data, recent stock gains and weakness in Shanghai overnight. On the positive side, HMO, Drug, Computer Service, Networking, Gold and Hospital stocks are especially strong, rising .5%+. The European Investment Grade CDS Index is falling another -3.63% today to 91.83 bps. The European Financial Sector CDS Index is now at the lowest level since April 26th, which is a major positive. The UK sovereign cds is falling -6.6% to 55.75 bps, which is the lowest since Nov. 13th, 2009. Weekly retail sales rose +2.9% this week versus a +2.8% gain the prior week, which is also a positive given recent consumer sentiment readings. On the negative side, Airline, Education and Homebuilding shares are under meaningful pressure, falling 2.0%+. Cyclicals are underperforming, with the Transports falling -1.3%. Lumber is falling -4.0%. The 10-year yield is falling -6 bps, which is a mild negative. I would classify today's mild setback as a consolidation of recent gains. Tomorrow's ADP employment report and jobless claims on Thur. take on added importance ahead of Friday's jobs report. I suspect the major averages make another attempt to push higher before week's end. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, technical buying, mostly positive earnings reports and bargain-hunting.
High-Yield Default Swaps Gauge Falls to 13-Week Low in Europe. The cost of protecting European corporate bonds from default fell, with a gauge of high-yield company debt risk dropping to the lowest level in 13 weeks. The Markit iTraxx Crossover Index of credit-default swaps linked to 50 companies with mostly junk credit ratings declined 6.5 basis points to 451, the lowest since May 4, according to JPMorgan Chase & Co. at 12 p.m. in London. The Markit iTraxx Europe Index of swaps on 125 companies with investment-grade ratings dropped 1.5 basis points to 98, the lowest since May 13, JPMorgan prices show. The cost of protecting bank bonds from default fell to the lowest since April 21, with the Markit iTraxx Financial Index of 25 banks and insurers down 1.75 at 108.5 and the subordinated index 3 lower at 173.5. The cost of insuring against losses on government debt also fell. Contracts on Greece dropped 15 basis points to 711.5, Portugal declined 2 to 219, Spain decreased 1.5 to 179, Italy fell 1 to 130 and Ireland was 6 lower at 203, CMA prices show.
U.S. Economy: Consumer Spending Stagnates, Home Sales Retreat. Consumer spending, pending home sales and factory orders were all weaker than projected in June, showing the U.S. recovery lost momentum heading into the second half of the year as employment stagnates. Household purchases, which account for about 70 percent of the economy, were unchanged from May, according to figures from the Commerce Department issued today in Washington. Contracts to buy existing houses unexpectedly dropped for a second month and factory bookings fell more than twice as much as economists estimated, other reports showed. The savings rate for American households increased to 6.4 percent, the highest level since June 2009, to $725.9 billion. The index of pending home resales dropped to 75.7, the lowest level since data began in 2001, figures from the National Association of Realtors showed.
MasterCard(MA) Profit Rises as Travel Spending Increases. MasterCard Inc., the world’s second- biggest payments network, posted a 31 percent increase in second-quarter profit as consumers used their cards more while traveling beyond their home countries. Net income rose to $458 million, or $3.49 per diluted share, compared with $349.1 million, or $2.67, a year earlier, the Purchase, New York-based company said today in a statement. The average estimate of 31 analysts surveyed by Bloomberg was for earnings per share of $3.34. “I feel optimistic about our future growth prospects,” Banga said today in a conference call with analysts. “The majority of our revenues come from outside of the United States, which as of now is showing faster growth.” Worldwide spending on MasterCard credit and debit cards climbed 7.9 percent to $493 billion, when adjusting for currency fluctuations, driven by 21 percent growth in Latin America, 15 percent in the Asia-Pacific, Middle East and Africa and 13 percent in Europe, MasterCard’s second-biggest market outside the U.S. Total card spending in the U.S. climbed 0.7 percent.
New York Hedge-Fund Manager Tax Likely to Fail, Paterson Says. New York’s Senate is unlikely to enact a plan to raise $50 million a year by taxing hedge fund managers who commute into the state, Governor David Paterson said. The proposal led Governor Jodi Rell of neighboring Connecticut to offer relocation assistance to New York-based fund executives who leave for her state. The New York Post reported that Rell held a dinner for representatives of 15 financial firms in Darien, Connecticut, on Aug. 2. “You have my promise to do all I can to help,” she said in a July 16 letter to the New York Hedge Fund Roundtable, a trade group.
Oil Rises to Three-Month High Above $82 Before U.S. Supply Data. Oil rose to a three-month high in New York as the dollar weakened and analysts forecast that crude inventories declined last week in the U.S. Crude oil for September delivery climbed as much as 76 cents, or 0.9 percent, to $82.10 a barrel, in electronic trading on the New York Mercantile Exchange, the highest level since May 5.
Europe's Abandoned Edifices Spell Trouble for Lafarge, Builders. The delayed revamp of Berlin’s Stadtschloss palace and a wobbly $8 billion bridge project in Sicily are setting off investor alarm bells that Europe’s building industry will bear the brunt of state spending cuts. “We’re expecting construction stocks to remain very much under pressure and sluggish for the next six months,” said Franck Nicolas, head of global asset allocation at Paris-based Natixis Asset Management, which oversees 309 billion euros ($400 billion) of investments. “Budgetary austerity won’t quicken the end of the crisis.”
North Korea Threatens 'Physical Retaliation' Against Naval Drills. North Korea’s military warned it may make a “physical retaliation” against South Korean naval ships carrying out military drills near their disputed border later this week, and told all shipping to avoid the area. South Korea plans to stage anti-submarine exercises for five days starting Aug. 5 to improve the nation’s defenses. The South says a North Korean torpedo sank one of its warships in March, killing 46 sailors. he maneuvers by South Korea “are not simple drills but undisguised military intrusion into the inviolable territorial waters of” the North, state-run Korea Central News Agency said, citing the army. “It is the unshakable will and steadfast resolution of the army and people of the DPRK to return fire for fire,” it said, using the initials of the North’s official name.
Goldman Sachs(GS) Offers More Power to AAA Holders in CMBS Deal. Goldman Sachs Group Inc. is offering to give investors in the highest-rated portions of a bond sale backed by commercial mortgages control in the event the loans go bad as bankers attempt to revive the market. The $788.5 million offering gives holders of the safest portion of the transaction, or about 81 percent of the deal, the power to direct and replace firms hired to handle loans that become troubled, according to marketing documents distributed last week to investors. Typically, that right is held by investors who buy the smaller, riskiest slice. It’s “plowing new ground,” said Patrick Sargent, a partner at Dallas law firm Andrews & Kurth LLP. Goldman Sachs is attempting to address concern that holders of the riskiest pieces of commercial mortgage bonds in the $700 billion market may make decisions that favor their interest over other investors in the transactions when loans sour. “This is a big nod to the AAA buyers,” Lisa Pendergast, a strategist at Jefferies & Co. in Stamford, Connecticut, said in an interview.
Israeli Officer, Lebanese Soldiers Killed on Border. Israeli and Lebanese soldiers exchanged fire in the most serious border incident since a monthlong conflict in 2006, leaving an Israeli battalion commander, two Lebanese soldiers and a local journalist dead. Another Israeli officer was critically wounded in the fighting, Major-General Gadi Eisenkot, head of Israel’s Northern Command, said on Army Radio. In addition to the Lebanese deaths, 15 soldiers and civilians from Lebanon were injured, said a Lebanese Army spokesman, who commented on condition of anonymity due to military regulations.
New Drilling Rules Imperil Some Rig Operators. Higher costs arising from tough new rules for the offshore-oil industry prompted by the Gulf of Mexico oil spill could pose a serious threat to contractors with older fleets of drilling rigs. Legislation designed to prevent a repeat of the Deepwater Horizon accident sets minimum safety standards for well design and requires oil companies to use an enhanced type of blowout preventer, or BOP, the device which failed to control BP PLC's rogue well. But many drilling rigs are too small to accommodate newer and bigger BOPs, and it will cost billions of dollars to upgrade them all.
Commission Clears Way for Ground Zero Mosque. The New York City Landmarks Commission unanimously voted Tuesday to deny landmark designation to the site of the proposed mosque near Ground Zero, paving the way for the controversial community center and worship space to rise two blocks from the site of the Sept. 11, 2001, terrorist attacks.
CNBC:
Hedge Fund Merger to Reunite Star Traders. Two hedge funds that were both started by former star traders at Goldman Sachs are to merge in a deal that marks one of the biggest steps over the past year in the long-anticipated consolidation of the industry. New York-based TPG-Axon, one of the world’s biggest hedge funds, has agreed a deal to merge with UK-based Montrica Investment Management, one of London’s largest hedge funds specialising in trading on events such as takeovers.
MarketWatch:
Microsoft(MSFT) and Ballmer Under Fire. A firestorm is raging through the media and the blogosphere these days over Microsoft Corp. Chief Executive Steve Ballmer and whether or not it's time for him to go.
NY Hedge Funders Wined and Dined by Connecticut Governor. Several New York hedge-fund honchos crossed the border last night for a date with the governor of Connecticut to talk about moving in with her. Representatives of 15 city-based financial firms were lured to a private meeting in Darien with Gov. Jodi Rell to hear her pitch to move their businesses to the Nutmeg State -- and avoid a tax on their industry that's being considered in New York.
Apple(AAPL) Pushes Forward With Streaming Video Plans. The latest evidence that Apple will soon begin streaming video comes from CNET, which reports that the consumer electronics manufacturer is putting its resources behind a cloud-based video service. The report comes as Apple has transitioned many on the team from online music service Lala to work on streaming video instead. Apple acquired Lala in December of last year, but shortly thereafter shut down the streaming music service. Now it seems that Lala’s technology and personnel are being used to build a cloud-based video service, which could replace Apple’s current system for downloading movies and TV shows. The rollout of Apple’s streaming video service could coincide with the introduction of the next version of Apple TV, which is expected to be sold for around $99.
LA Times:
Bell Withholds Public Records. Despite vowing greater transparency in the wake of a salary scandal, the city of Bell is refusing to turn over public records to The Times, community activists and even a sitting councilman. "They continue to keep us in the dark," said Councilman Lorenzo Velez, who has been critical of the high salaries paid to top Bell administrators and other City Council members. "The problem is a continuation of so many years of doing whatever they wanted in City Hall."
Referendum in Missouri: Will the Show-Me State Show Up Obamacare? Missouri voters go to the polls Tuesday for the first-in-the-nation referendum on President Obama's health care plan. It is likely to give Republicans a chance to brag about the unpopularity of Obamacare, but the vote will be largely symbolic. Courts will eventually decide whether Missouri and other states can legally trump federal law and exempt citizens from the mandate to buy insurance. But sending a signal to Washington will be victory enough for the Republicans and Tea Party activists pushing Proposition C.
Rasmussen Reports:
67% Say Disclosure of Afghanistan War Secrets Hurts U.S. National Security. The Obama administration is wrestling with the illegal disclosure on the Internet of thousands of secret documents related to the war in Afghanistan, and 67% of U.S. voters believe the release of this kind of information hurts national security. A new Rasmussen Reports national telephone survey finds that just 19% believe media outlets that release secret government documents relating to the war in Afghanistan are providing a public service.
Politico:
The Lame Duck Looms. As Congress heads home for August, Republicans and conservative activists have a new rallying cry to energize voters: Fear the Lame Duck! With dark warnings, GOP members of Congress and right-wing media figures are suggesting that the Democratic majority could use a post-election session of Congress to jam through tax increases, cap and trade, immigration reform and legislation making it easier for unions to organize workers. The campaign began with a John Fund column in the Wall Street Journal, which was picked up by the heavily trafficked Internet gateway The Drudge Report early last month and gained steam when columnist Charles Krauthammer sounded the alarm not long after. Now the GOP is rallying around the perceived threat of a lame-duck session.
Real Clear Politics:
A Bleak Picture of Government Debt. Rumors of Congressional Democrats privately expressing disapproval of the Obama administration's actions and policies have been given more credence by such things as House Speaker Nancy Pelosi's public criticism of White House spokesman Robert Gibbs. But when two long-time Democratic pollsters, Patrick Caddell and Douglas Schoen, called President Obama "cynical" and "racially divisive," that was a dramatic statement. It was like saying that the emperor has no clothes.
Reuters:
U.S. Authorities Able to Tap Blackberry Messaging. The BlackBerry -- renown for the security of its messaging -- doesn't offer 100 percent protection from eavesdropping. At least not in the United States. U.S. law enforcement officials said they can tap into emails and other conversations made using the device, made by Research in Motion, as long as they have proper court orders.
