Japan Debt Outlook Cut to 'Negative' by S&P on Reconstruction. Japan’s sovereign-rating outlook was cut to “negative” by Standard & Poor’s as the nation’s reconstruction needs following last month’s earthquake will likely add to what’s already the world’s biggest debt load. The outlook on Japan’s local-currency debt rating, at AA-, the fourth-highest grade, was lowered from “stable,” S&P said in a statement today. The company had reduced the rating by one step in January in the first cut since 2002. Moody’s Investors Service said last month the disaster may bring forward the “tipping point” for the country’s bond market. Today’s decision adds to pressure on Prime Minister Naoto Kan, who has yet to detail how the rebuilding will be paid for and how he plans to rein in longer-term fiscal deficits. As public spending increases, revenue will likely decline because of the economic hit from the disaster, with a report today showing retail sales tumbled the most in 13 years last month. “Japan has repeatedly suffered under poor leadership, but this disaster has made that point even clearer,” said Noriaki Matsuoka, an economist at Daiwa Asset Management Co. in Tokyo. “The government needs to decide how it’s going to fund its next reconstruction package.”
China's Slumping Small-Caps Haven't Hit Bottom on Earnings, GF Fund Says. Chinese small-company stocks will extend the steepest two-day drop in three months as more companies miss profit estimates amid government tightening, said GF Fund Management Co., China’s sixth-biggest asset manager. The CSI Smallcap 500 Index (SH000905) slumped 1.7 percent to 4,970.57 yesterday, capping a two-day, 3.8 percent retreat that’s the most since Jan. 18. The CSI 300 Index of larger companies slid 2.1 percent during the same two-day period. The ChiNext index of start-up companies dropped to the lowest since October. Earnings per-share at the 320 companies that have released first-quarter earnings in the 500-member small-cap index trailed analysts’ estimates by 14 percent, according to data compiled by Bloomberg. “Earnings expectations for small caps were too high and many of them failed to meet expectations,” said Chen Shide, a Guangzhou-based manager of small-cap stocks at GF Fund, which oversees about $15.9 billion. “Small caps definitely haven’t reached a bottom yet. Investors are now beginning to pay for ramping up share prices over the past two years.”
LivingSocial Buyers Richer, Smarter Than Groupon's, Study Says. People who buy online coupons from LivingSocial are richer, younger and smarter than customers of market leader Groupon Inc., according to a study by Nielsen Co. LivingSocial users are 49 percent more likely than the average American online to make at least $150,000 a year, compared with 30 percent for Groupon, according to the survey released today. They are also more likely to be younger than 35 and to have college or graduate degrees.
Regeneron(REGN), Sanofi Therapy Extends Lives of Colorectal Cancer Patients. Regeneron Pharmaceuticals Inc. (REGN) and Sanofi-Aventis SA (SAN) said an experimental drug used in combination with chemotherapy extended the lives of patients with advanced colorectal cancer in a study. Shares rose as much as 12 percent in extended trading.
Australian Consumer Prices Advance 1.6%, Most Since 2006. Australian consumer prices gained the most in five years in the first quarter as natural disasters boosted food costs and Middle East tensions drove fuel bills higher. The consumer price index rose 1.6 percent from the previous three months, the biggest jump since 2006, the Bureau of Statistics said in Sydney today. That was more than the 1.2 percent median estimate in a Bloomberg News survey of 26 economists. Prices were 3.3 percent higher than a year earlier.
Threatened Florida Everglades Need U.S. EPA to Police Cleanup, Judge Rules. The U.S. Environmental Protection Agency should step in to protect the Florida Everglades because state authorities haven’t done enough, a federal judge in Miami ruled. The state of Florida and the South Florida Water Management District “have not been true stewards of protecting the Everglades in recent years,” U.S. District Judge Alan S. Gold wrote in today’s ruling. “It is now, and has been for a while, time to take concrete and substantial progress toward preserving the Everglades before this national treasure is permanently destroyed to the extent of irreparable destruction,” Gold said. The Miccosukee Tribe of Indians of Florida, whose members are the only residents of the Everglades, sued the U.S. and the EPA in June 2004. The tribe is seeking to force the government to review and disapprove an amended version of the Everglades Forever Act, a law passed by the Florida Legislature in 1994 to resolve litigation over a plan to clean up the wetlands, according to Gold’s ruling.
Fed's 'Extended Period' Pledge May End in 2011, Economists Say. Federal Reserve officials will probably prepare to pull back from record stimulus by dropping a pledge this year to hold the main interest rate near zero for an “extended period,” according to a Bloomberg News survey. Thirty-three of 44 economists surveyed said the central bank will remove the two-word phrase from its post-meeting statement in 2011, with 18 betting it will move by September. The Fed may wait until 2012 to announce sales of mortgage or Treasury securities it bought to reduce borrowing costs, with 26 respondents expecting a plan next year, according to the survey, conducted from April 20 to April 25.
Wall Street Journal:
Karzai Told to Dump U.S. Pakistan Urges Afghanistan to Ally With Islamabad, Beijing. Pakistan is lobbying Afghanistan's president against building a long-term strategic partnership with the U.S., urging him instead to look to Pakistan—and its Chinese ally—for help in striking a peace deal with the Taliban and rebuilding the economy, Afghan officials say. The pitch was made at an April 16 meeting in Kabul by Pakistani Prime Minister Yousuf Raza Gilani, who bluntly told Afghan President Hamid Karzai that the Americans had failed them both, according to Afghans familiar with the meeting.
Silver Rush Spreads to Stock Market. The mania for silver has spread to the stock market as day traders pile into the buying. Trading got so heated during the past two days that shares traded in the iShares Silver Trust, the biggest exchange-traded fund tracking the price of silver, topped that of the SPDR S&P 500 ETF, usually one of the most actively traded securities in the world. Day traders "are going crazy," says Joseph Saluzzi, co-head of trading at brokerage firm Themis Trading. "It's typical of the bubbly speculation that's been going on in silver."
Libyan Rebels Jolted by Counterattack. Col. Moammar Gadhafi's forces launched a surprise ground and artillery attack Tuesday against this city's port, threatening Misrata's sole lifeline to the world just two days after rebels drove the last government forces out of the city.
Silicon Valley Office Market Booms. Technology firms, from tiny start-ups to giants like Google Inc., are again racing to expand, sparking a turnaround in the Silicon Valley office market that seemed far off just a few months ago. The amount of occupied office space in the area is on pace to increase by three million square feet this year, which would be the biggest one-year jump since 1999, according to Jones Lang LaSalle Inc. Rents for the best space in the most highly desired market, downtown Palo Alto, are up 25% from a year ago, while the vacancy rate has fallen to about 7%, the brokerage firm says.
Barclays(BCS) to Sell Some U.S. Properties, Loans. In one of the largest commercial real-estate offerings by a bank in recent months, Barclays Capital is looking to sell commercial real-estate loans and properties on which it has foreclosed.
US Truck Tonnage Up in March Despite Fuel Prices. The index that tracks tonnage hauled by American trucks rose in March despite rising fuel prices, on the back of the ongoing economic recovery. The American Trucking Associations' advance seasonally adjusted For-Hire Truck Tonnage Index rose 1.7 percent in March, after falling a revised 2.7 percent in February. "While I still think the industry will continue to grow and recover from the weak freight environment we've seen in recent years, the rapid spike in fuel prices will slow that growth," said ATA chief economist Bob Costello in a note. Higher fuel prices might cut into consumer spending, which will hurt the trucking industry as the tonnage of goods transported drops. Year-on-year, tonnage hauled climbed a seasonally adjusted 6.3 percent.
Shippers May Raise Fuel Fees. These should be good times for railroads and trucking companies. After all, an improving economy means that more goods and commodities need to be delivered to the nation’s ports and department stores. But rising fuel prices have taken a toll on their business.
Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 22% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty percent (40%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).
USA Today:
Traditional Incandescent Bulbs on Their Way Out Starting Jan. 1. The United States is on the verge of a lighting revolution that will oust the traditional incandescent in favor of more energy efficient (and less polluting) alternatives. Are you ready? On Jan. 1, nationwide, a new federal law means the 100-watt incandescent will start disappearing from store shelves. Instead, an expanding line of alternative bulbs will be sold bearing new nutrition-like labels on their boxes. The labels will tout a bulb's lumens, a measure of brightness, rather than its wattage, a measure of energy use. They will also estimate its yearly energy cost.
Reuters:
BofA(BAC) to Introduce Credit Card Penalty Rates in June. Bank of America Corp, one of the largest U.S. credit card issuers, plans to start charging penalty interest rates for credit card customers who miss payments. Beginning on June 25, the bank will begin charging a penalty rate of as much as 29.99 percent to customers who make late payments on their credit card balances, a company spokeswoman confirmed on Tuesday. Unlike a wholesale interest rate increase, borrowers would be charged the penalty rate only on new purchases after the rate is changed, and a customer will receive 45 days advance notice of any penalty rate being placed on their account.
Deadlock in Libya Exposes International Rifts. Military deadlock in Libya has exposed growing international rifts, with critics of NATO bombing calling it another case of the West trying to overthrow a regime by stretching the terms of a U.N. resolution. "Is there a lack of such crooked regimes in the world?" Russian Prime Minister Vladimir Putin asked on Tuesday. "Are we going to bomb everywhere and conduct missile strikes?" And a senior African Union official accused Western nations of undermining an AU peace plan that would not require the departure from power of Muammar Gaddafi. British and U.S. officials met on Tuesday to discuss how to step up military pressure on Gaddafi, as the Libyan leader's army fought fierce clashes with rebels in besieged Misrata. More than a month of British and French-led NATO air strikes have failed to dislodge Gaddafi or bring major gains for anti-government rebels who hold much of east Libya.
Sony Playstation Suffers Massive Data Breach. Sony Corp suffered a massive breach in its video game online network that led to the theft of names, addresses and possibly credit card data belonging to 77 million user accounts in what is one of the largest-ever Internet security break-ins.
Amazon(AMZN), Spending Aggressively, Expects Rosy Revenue. Amazon.com gave a confident revenue forecast that suggested its aggressive expansion into new businesses is paying off, soothing concerns about its slimmed-down profit margin. Shares were down 1.2 percent after Amazon reported a 32.8 percent decline in first-quarter profits. But that was a far cry from the big sell-off when the company last reported quarterly results and shares lost 9 percent.
Broadcom(BRCM) Revenue Forecast Disappoints, Shares Fall. Chipmaker Broadcom Corp forecast current-quarter revenue below Wall Street estimates, pushing its shares down 8 percent as some investors worried the shortfall might last beyond the quarter. Blaming weak demand on key cellphone customers, Broadcom forecast a second-quarter revenue range with a midpoint of $1.8 billion, compared with average Wall Street expectations of $1.9 billion, according to Thomson Reuters I/B/E/S. The warning is likely the result of a bleak outlook from Nokia Corp and some weakness at Samsung Electronics, according to analysts.
Panera(PNRA) Raises 2011 Earnings Forecast. Panera Bread Co (PNRA.O) raised its full-year earnings forecast above Wall Street's target after its first-quarter profit topped expectations, sending its shares up 1.7 percent.
Financial Times:
The U.S. government may review its system of expediting visas for Chinese officials and their families after China's government canceled several bilateral academic and cultural programs, citing a U.S. official.
Financial Times Deutschland:
Germany exiting nuclear power would not result in a burden to the environment as additional carbon dioxide emissions from coal-fired plants would be offset elsewhere, citing comments by Jochen Flasbarth, president of the country's Federal Environment Agency.
NHK:
Tokyo Electric Power Co. said the spent-fuel cooling pool of the No. 4 reactor at its Fukushima Dai-Ichi nuclear plant may be leaking water. Tepco thinks an explosion last month may have caused the leak and will investigate further.
China News Service:
China is studying rules to control developers' profits to keep home prices at a reasonable level, citing Xu Kunlin, head of the National Development and Reform Commission's pricing supervision department.
Economic Observer:
China's top economic planning agency has arranged to meet with several large domestic coal producers this morning at which the government will ask the companies to "appropriately" control price increases, citing a person familiar with the situation.
China Securities Journal:
China may increase tightening of the property market, citing people from the real estate industry. The nation may require down payments of 50% for first-home purchases if property prices continue to rise, citing a loan official at a domestic bank. China's land ministry will also issue policies to control the price of land. The banking regulator may also tighten regulation of loans trust companies extend to developers.
China should reduce dollar holdings in its foreign-exchange reserves as dollar assets have falling yields and rising risks, the China Securities Journal said in a front-page editorial.
Evening Recommendations Citigroup:
Upgraded (IACI) to Buy, target raised to $42.
Upgraded (LO) to Buy, target raised to $122.
Reiterated Buy on (HSY), boosted target to $64.
Reiterated Buy on (AMG), target $128.
BMO Capital Markets:
Rated (MSTR) Outperform, target $180.
Night Trading
Asian equity indices are +.25% to +1.0% on average.
Asia Ex-Japan Investment Grade CDS Index 104.50 unch.
Durable Goods Orders for March are estimated to rise +2.3% versus a -.9% decline in February.
Durables Ex Transports for March are estimated to rise +2.0% versus a -.6% decline in February.
Cap Goods Orders Nondef Ex Air for March are estimated to rise +3.8% versus a -1.3% decline in February.
10:30 am EST
Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,700,000 barrels versus a -2,322,000 barrel decline the prior week. Distillate inventories are expected to rise by +250,000 barrels versus a -2,504,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,000,000 barrels versus a -1,583,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.88% versus a +1.1% gain the prior week.
12:30 pm EST
The FOMC is expected to leave the benchmark fed funds rate at .25%.
2:15 pm EST
Bernanke speaks at Fed Press Conference.
Upcoming Splits
None of note
Other Potential Market Movers
The weekly MBA mortgage applications report and the 5-Year Treasury Notes Auction could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted 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 92.59 -.90%
European Financial Sector CDS Index 91.25 +1.76%
Western Europe Sovereign Debt CDS Index 192.62 +1.69%
Emerging Market CDS Index 203.57 -.29%
2-Year Swap Spread 18.0 unch.
TED Spread 22.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .05% unch.
Yield Curve 269.0 -3 bps
China Import Iron Ore Spot $178.90/Metric Tonne unch.
Citi US Economic Surprise Index 12.10 +1.9 points
10-Year TIPS Spread 2.57% -2 bps
Overseas Futures:
Nikkei Futures: Indicating +102 open in Japan
DAX Futures: Indicating +33 open in Germany
Portfolio:
Higher: On gains in my Medical, Biotech, Retail and Tech sector longs
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 surges to a new multi-year high, despite US/European debt fears, emerging markets inflation worries and Mideast unrest. On the positive side, Airline, Road & Rail, HMO, Hospital, Paper, Tobacco and Biotech shares are especially strong, rising more than +1.75%. Small-caps and cyclicals are outperforming. The Transports are also hitting a multi-year high. Copper is rising +.38%. The 10-Year Yield is falling -6 bps to 3.31%. The US Muni CDS Index is falling -2.44% to 137.86 bps. Weekly retail sales jumped +5.0%, which is the largest percentage increase since the week of May 2, 2006. On the negative side, Restaurant, Construction, Computer and Coal shares are lower on the day. Lumber is falling another -2.38%. The US price for a gallon of gas is rising .01/gallon today to $3.87/gallon. It is up .75/gallon in 70 days. The Greece sovereign cds is climbing +5.72% to 1,435.67 bps, the Ireland sovereign cds is rising +3.35% to 662.63 bps and the Portugal sovereign cds is rising +2.41% to 675.50 bps. The Greece, Ireland and Portugal sovereign cds are now all at new record highs.The US dollar continues to trade very poorly. The Shanghai Composite fell another -.88% last night, breaking below its 50-day moving average. The China 7-Day Repo Rate jumped +56 bps to 4.43% last night, which is the highest level since February 23rd. I suspect volatility will increase tomorrow, but stock action will be rather muted in response to the Fed's comments. Bonds may weaken after recent gains. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less tech sector pessimism, earnings optimism, buyout speculation, falling long-term rates and technical buying.
Consumer Confidence in U.S. Rose More Than Forecast in April. Confidence among U.S. consumers increased more than forecast in April, signaling the improving labor market is helping Americans weather rising fuel costs. The Conference Board’s confidence index rose to 65.4 from a revised 63.8 reading in March, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called projected an advance to 64.5. The group’s measure of present conditions increased to 39.6, the highest since November 2008, from 37.5 a month earlier. The gauge of expectations for the next six months rose to 82.6 from 81.3. The share of consumers who said jobs are currently plentiful rose to 5.2 percent from 4.6 percent. Those who said jobs are hard to get decreased to 41.8 percent, the fewest since January 2009, from 44.4 percent. The percent of respondents expecting more jobs to become available in the next six months decreased to 17.5 from 19.6 the previous month. The share expecting incomes to rise over the next six months improved to 16.7 percent from 15.2 percent. The share of Americans planning to buy a house over the next six months increased to 5.5 percent, matching the record high reached in January 1978. Data go back to 1964. Intentions to purchase automobiles and appliances also improved.
3M Boosts Forecast as Renewable Energy Helps Top Estimates. 3M Co. (MMM) boosted its full-year earnings forecast after first-quarter profit surpassed analysts’ estimates. Profit this year will be $6.27 to $6.47, excluding pension- related expenses, compared with a February forecast of $6.17 to $6.42 a share, the St. Paul, Minnesota-based maker of Scotch tape said today in a statement. Sales increased about 20 percent at the industrial and transportation division, whose products include films for solar panels and windows, and at the electronics and communications unit, which makes films for smartphones. 3M said the earthquake and tsunami in Japan will curb 2011 profit by 10 cents to 13 cents a share, and favorable currency translation will help offset that. “The year has started off better than we would have expected,” Stephen Tusa, a JPMorgan Chase & Co. analyst in New York, wrote today in a note.
IBM Boosts Dividend, Authorizes $8 Billion for Stock Repurchases. International Business Machines Corp. (IBM), the biggest computer-services provider, increased its quarterly dividend 15 percent and set aside more money for share buybacks, sending the stock to a record. The quarterly payout will rise by 10 cents for the second straight year, to 75 cents a share, IBM said today in a statement. IBM added $8 billion to the stock-repurchase plan, bringing the total authorized by the board to $12.7 billion.
UPS's(UPS) Next-Day Delivery Gains Show Improvement in 'Core Economy'.United Parcel Service Inc. (UPS)’s next- day package shipments rose in the first quarter as business customers refilled stockpiles to meet higher demand from the recovering economy, Chief Financial Officer Kurt Kuehn said. Boxes shipped using the UPS’s Next Day Air service climbed in the “mid-single digits” as companies sought to restock goods faster after adapting to leaner inventory during the recession, Kuehn said in a telephone interview. The gains reflect “some of the increased velocity in the core economy with manufacturing and finished goods,” Kuehn said.
Greek Deficit Tops Forecasts as Euro-Area Debt Reaches Record. Greece’s budget deficit exceeded goverment estimates and the euro area’s overall debt reached a record, narrowing Europe’s options for putting an end to the fiscal crisis. Greece’s shortfall was 10.5 percent of gross domestic product in 2010, higher than a 9.4 percent estimate made by the Greek government in February, official European Union figures showed today. Greek bond yields surged, rekindling speculation that a debt write-off or extension of the country’s repayment timelines will be the only way out of the fiscal trap. "I don’t think that Greece will succeed in this consolidation strategy without any restructuring in the future, or perhaps also in the near future,” Lars Feld, a member of the German government’s council of economic advisers, told Bloomberg Television’s Nicole Itano in Frankfurt. “Greece should restructure sooner than later.” Two-year Greek yields rose as much as 64 basis points to 23.65 percent, before slipping back to 23.41 percent as of 11:13 a.m. in London. Ten-year yields reached 15.26 percent. Portugal’s two-year note yields touched 11.62 percent, before easing to 11.53 percent. All of the yields reached records. The cost of insuring debt sold by Greece and Portugal rose to records, according to traders of credit-default swaps. Contracts on Greece jumped 13 basis points from April 21 to 1,345 basis points, signaling a 66 percent chance of default within five years, according to CMA. Portuguese swaps climbed six basis points to 666. Debt rose in all 16 countries using the euro last year to 85.1 percent of GDP from 79.3 percent in 2009, today’s Eurostat report showed. Aggregate euro-area debt moved closer to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart say can weigh on long-term growth prospects. Greece’s debt ballooned to 142.8 percent of GDP, the highest in the euro’s 12-year history, the EU figures showed. Ireland’s debt surged the most, by 30.6 percentage points to 96.2 percent of GDP.
Food Costs Seen Reaching a Record High This Year as Inflation Accelerates. Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China. The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates. “The stockpiles are being severely depleted,” said Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.”
U.S. Government Efforts to Remove Drug CEO Jolts Firms. A government attempt to oust a longtime drug-company chief executive over his company's marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world. The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration. If the government implements its ban, Forest would have to dump Mr. Solomon, now 83 years old, in order to protect its corporate revenue.
Lee Warns of Further Inflation for U.S. Former Singapore Prime Minister Lee Kuan Yew said a stronger local currency could help ease inflation in the fast-growing Asian city-state, even as he warned of a continued weak U.S. dollar—and potentially more inflation—in the U.S.
Nations Pursue U.N. Censure of Syria. Syrians resumed protests Tuesday, less than a day after military tanks and troops killed at least 25 people in the southern city of Deraa, as activists appeared to defy the fear that has sustained the Assad regime for decades. World leaders stepped up condemnation of the escalating violence used by the government of President Bashar al-Assad, who is facing the largest threat to his rule as protests across Syria move into their sixth week.
Strong Demand Revs Up Ford(F) Profit. Ford Motor Co., showing little impact from rising U.S gasoline prices or the Japan earthquake, said its first-quarter profit rose 22%, fueled by higher vehicle sales and pricing, especially in North America, its most important region.
Despite Rally, ETFs That Bet Against Stocks Gain Popularity. Exchange-traded funds that bet against further gains, in fact, have been hugely popular with investors, making the group the fastest-growing fund class in the $1.1 trillion ETF industry. The so-called "inverse" ETFs, which can sometimes pay double or triple the opposite move of the benchmarks they track, have seen a 16 percent growth in assets this year, against 4 percent for the industry as a whole.
Apple's(AAPL) Parts Grab. Apple CEO Steve Jobs is cracking his $66 billion piggybank to ensure he has enough parts to meet demand for his popular gadgets. The world's No. 1 tech company has committed $11 billion of its enormous cash pile to protect the supply chains for Macs, iPhones, iPads and other gadgets, according to a regulatory filing yesterday. That represents about a 40 percent increase over the previous quarter allocated to locking up its global supply chain of high-tech components for its devices. The aggressive move puts Apple in a position of even greater strength compared to rivals as they all struggle for limited electronics resources.
Expect Apple(AAPL) to Charge for Music Cloud. Music industry insiders told me that Apple has indicated it could offer the service free of charge initially but that company will eventually require a fee. Google is also expected to charge for a similar service.
New Yorkers Lead Pack in Government Benefits. New Yorkers get more government aid per person from social programs than residents of any other state, a USA TODAY analysis finds. The state's Medicaid program is the most expensive in the nation, driving the average cost of all government benefits in New York to $9,442 per person. New York ranks 28th in Social Security payments per person and 9th in Medicare benefits. But the spending on Medicaid, the health program for the poor, is far above that in any other state. Only Washington, D.C., spends more.
Americans Depend More on Federal Aid Than Ever. Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old. A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929. The wage decline has continued this year. Wages slipped to another historic low of 50.5% of personal income in February. From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems. Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits. "What's frightening is the Baby Boomers haven't really started to retire," says University of Michigan economist Donald Grimes of the 77 million people born from 1946 through 1964 whose oldest wave turns 65 this year. "That's when the cost of Medicare will start to explode."
GOP's Gamble on the Budget Pays Off, So Far. A new USA TODAY/Gallup Poll finds that House Republicans, who took a political risk in passing a controversial budget blueprint last week, have survived so far with some key advantages intact as Congress moves toward the debate on raising the debt ceiling, passing the 2012 budget and enacting a long-term deficit plan. Americans are evenly divided between the deficit plan proposed by President Obama and the one drafted by House Budget Chairman Paul Ryan, and those surveyed put more trust in Republicans than Democrats to handle the federal budget and the economy. Pessimistic about the economy and the nation’s course, they overwhelmingly blame too much spending for soaring federal deficits and want to rely more on spending cuts than tax hikes to get it under control.
IMF Managing Director Dominique Strauss-Kahn, ECB President Jean-Claude Trichet and European Commission for Economic and Monetary Affairs Olli Rehn may visit Greece next month.
Mehr News Agency:
Bahrain's charges of spying against an Iranian diplomat are "baseless" and Iran's government may retaliate, said Ramin Mehmanparast, a Foreign Ministry spokesman.
