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G-8 leaders to marshal support for Arab nations; President Barack Obama and the other leaders will seek to marshal their combined economic might behind …


G-8 leaders to marshal support for Arab nations
May 25, 2011, 9:57 a.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

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PARIS (AP) — Arab uprisings are pushing aside deficits and austerity as the biggest worry of the leaders of the Group of Eight industrialized nations this year.

President Barack Obama and the other leaders will seek to marshal their combined economic might behind the grass-roots democracy movements that have swept the Arab world — and driven away tourists and investors.

Egypt and Tunisia, where popular revolts this year overthrew authoritarian regimes, want to show G-8 leaders and international financiers that they are still sound investment destinations — which might be a tall order as the future shape and policies of their governments remains unclear.

The discussions starting Thursday in the chic Normandy resort of Deauville will see the host, French President Nicolas Sarkozy, bring together the heads of wealthy nations for what one of Sarkozy’s top advisers describes as “the founding moment” of a partnership between the G-8 and the Arab countries.

That partnership may be strained, however, by tensions over how to handle Libya’s rebel movement and entrenched leader Moammar Gadhafi. NATO appears to have no exit strategy, and efforts to oust Gadhafi remain elusive.

The leaders of the U.S., Canada, Britain, Germany, France, Japan, Italy and Russia will greet counterparts from Tunisia, Egypt and the head of the Arab League to hash out details of what some are calling a new “Marshall Plan” for these countries, similar to the massive U.S. aid to Europe after World War II that helped the continent rebuild and stave off communism.

The historic parallel is fitting, as Deauville is just a short drive along the English Channel from the D-Day landing beaches where the U.S. and its allies began to roll back the Third Reich in 1944.

A top Sarkozy official drew another historical analogy, saying the aid and investment to be promised to the Arab nations would resemble that which the G-8 offered to Eastern and Central European nations after the collapse of communism in 1989.

Last week President Barack Obama said the U.S. has asked the World Bank and the International Monetary Fund to present a plan at the G-8 summit that sets a path to stabilize and modernize the economies of Tunisia and Egypt.

The U.S. will forgive up to $1 billion in Egyptian debt and guarantee another $1 billion to finance infrastructure and new jobs. Obama said he will ask Congress to finance enterprise funds that will provide money for investment in both countries — a request that comes as Congress seeks to cut spending.

Tunisia, followed by Egypt, kicked off change around the Arab world, as broad-based popular movements took to the streets demanding greater rights and political representation from their authoritarian governments.

But the street demonstrations in Cairo and Tunis that thrilled and inspired the Arab world also drove away the tourists and investors on which these economies are heavily dependent.

“The first thing they will be looking for is direct financial aid,” said Said Hirsh, a Middle East economist with Capital Economics consultancy in London. “Both countries need quite a lot of money considering the hit to their economies and their revenues.”

While U.S. officials say G-8 countries will discuss their role in the process, they say it is too soon to reach a deal on dollar amounts for assistance.

The European Bank for Reconstruction and Development, a London-based institution set up in 1991 to foster transition to market economies in post-communist Europe, could be “repurposed” to focus its expertise on the southern Mediterranean region, a top official in Sarkozy’s office said, speaking on condition of anonymity because of protocol.

The heads of the World Bank and the United Nations will also be present and add their signatures to the partnership declaration. Former IMF chief Dominique Strauss-Kahn, under house arrest in New York following his indictment for sexual assault, will be replaced for the event by the institution’s acting managing director John Lipsky.

Finding a permanent replacement for Strauss-Kahn is likely to take up a good part of the summiteers’ small talk.

Nuclear safety will be another topic, with Japanese Prime Minister Naoto Kan scheduled to provide leaders with an update on the continuing crisis at the Fukushima Dai-ichi nuclear power plant.

The future of the Internet will also figure in the G-8 leaders’ talks. Mark Zuckerberg of Facebook and Eric Schmidt of Google and other Internet executives took part in two days of debates focused broadly on the Internet’s impact on the global economy. Several of the Internet conference’s speakers will then take policy recommendations to Deauville in talks with the G-8 leaders.

Police have established one security cordon around the conference center where the leaders are meeting, and another perimeter encompassing all of Deauville. Local ports, train stations and the airport will be shut from Wednesday to Friday, and a no-fly zone enforced over the town.

The show of force may have discouraged radicals and other protesters from attempting to organize demonstrations close to the summit. Anti-G8 protesters plan symbolic demonstrations in the neighboring towns of Caen and Le Havre, but they do not plan to try to disrupt the event in Deauville itself, according to a statement circulated by radical groups online.

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Associated Press writers Julie Pace in Washington, D.C., Geir Moulson in Berlin, Charmaine Noronha in Toronto, David Stringer in London and Paul Schemm in Rabat, Morocco contributed to this report.

Greg Keller can be reached at http://twitter.com/Greg_Keller

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2 out of 5 Americans believe the economy will get better


Americans more upbeat about economy
May 12, 2011, 10:01 a.m. EDT
Associated Press

Journal By Calvin Lee Ledsome Sr.,

Owner and Founder of: http://www.LedSomeBioMetrics.com

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WASHINGTON (AP) — Americans are growing more optimistic about the U.S. economy, a sentiment that is benefiting President Barack Obama despite public disenchantment with his handling of rising gasoline prices and swollen government budget deficits.

An Associated Press-GfK poll shows that more than 2 out of 5 people believe the U.S. economy will get better, while a third think it will stay the same and nearly a fourth think it will get worse, a rebound from last month’s more pessimistic attitude. And, for the first time since the 100-day mark of his presidency, slightly more than half approve of Obama’s stewardship of the economy.

Both findings represent a boost for Obama, though he still must overcome ill will over government red ink and the price of gas at the pump, now hovering around $4 a gallon.

But the public’s brighter economic outlook also could signal a boost to the current recovery, which relies to a great degree on consumer behavior. A public that is confident about economic performance is more likely to spend more and accelerate the economy’s resurgence.

The poll was conducted May 5-9 in the aftermath of the U.S. commando raid that killed Osama bin Laden, the al-Qaida leader behind the Sept. 11, 2001, terrorist attacks. The spike in public esteem for Obama as a result of that successful clandestine mission may have helped Obama’s standing on issues other than national security.

The poll coincides with renewed attention in Washington to the nation’s growing debt and the federal government’s long-term budget deficits, so any positive signs from the public could help Obama push his policy proposals. A bipartisan team of lawmakers is working with Vice President Joe Biden to identify spending cuts. Meanwhile, lawmakers also are discussing major structural changes to the tax system and to the government’s mammoth benefits programs of Medicare, Medicaid and Social Security.

The results of the AP-GfK poll stood out because other surveys taken after bin Laden’s death, while showing a spike in support for the president, continued to indicate dissatisfaction by a majority for his handling of the economy. Still, like the AP-GfK poll, other surveys also found American attitudes about the state of the nation improving.

Forty-five percent of those polled in the AP-GfK survey said the country was now moving in the right direction, an increase of 10 percentage points from five weeks ago. And attitudes about life in general remained positive, with 4 out of 5 respondents saying they were happy or somewhat happy with their circumstances.

“Once you hit bottom the only one way to go is up,” said John Bair, 23, a photographer and filmmaker from Pittsburgh. “Everybody that I come in contact with seems to be on the upswing. I consider that a pretty good thing.”

But Bair, who describes himself as a moderate to conservative independent, doesn’t believe Obama deserves re-election. He strongly disapproves of the president’s handling of gasoline prices and says Obama should do more to increase domestic production of oil.

“When I’m paying $4 for a gallon of gas, it gets me wondering what’s going on,” he said.

Obama has tried to appear engaged on gas prices even though there is little presidents can do to alter market fluctuations. He has called for new renewable energy policies and for eliminating tax breaks for oil and gas companies, while conceding those steps will not address the current price increases. The efforts have not given the public much to cheer about, however. A total of 61 percent disapprove of Obama’s approach to the rising cost of gasoline.

Indeed, for all the long-term confidence that the economy will recover, the public is hardly upbeat about the current state of things. Only 21 percent describe the economy as good and 73 percent describe it as poor. About 1 in 5 thought the economy got better during the past month; an equal number thought it got worse.

A favorable jobs report last Friday showed that private companies had exceeded expectations by creating 268,000 jobs last month, the third month of at least 200,000 new jobs. And while unemployment has dropped from a high of 10.1 percent nationally in October 2009, it is now 9 percent, the same as in January.

“We haven’t done anything to create the jobs that (Obama) promised —that all of them promised,” said John Grezaffi, 60, a rancher from Pointe Coupee Parish, La.

Grezaffi, taking a short break from working to shore up his land against a rising Mississippi River on Wednesday, said he somewhat supports Obama but does not support his handling of the economy and believes the country is moving in the wrong direction.

Approaching retirement age, he said he wasn’t eager to see his upcoming benefits shortchanged.

“I’m willing to give up a little, but not everything when you see the waste that occurs in so many other areas,” he said.

Deana Floss, 39, a Springfield, Ohio, restaurant cook and owner of a cleaning business, voiced lukewarm approval for Obama even though she doesn’t care for the state of the economy or Obama’s handling of the nation’s budget deficits.

“I don’t think he has done a very bad job with the economy,” she said. “It was already going downhill when he took the reins.”

The Associated Press-GfK Poll was conducted by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,001 adults nationwide and had a margin of sampling error of plus or minus 4.2 percentage points.

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Associated Press Deputy Polling Director Jennifer Agiesta contributed to this report.

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Online:

http://www.ap-gfkpoll.com

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Poll: US economy improving despite global events


Poll: US economy improving despite global events
Posted by Calvin Lee Ledsome Sr.,
Owner and Founder of:  https://economicnewsblog.wordpress.com

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WASHINGTON (AP)Economists say the U.S. economy is gaining strength despite political unrest in North Africa and the Middle East and last month’s devastating earthquake and tsunami in Japan.

A survey from the National Association for Business Economics finds that economists are hopeful that the broader economy is substantially improving, with rising employment reported for the fifth quarter in a row. The survey found that “companies appear to be positioning themselves for a firming economic environment,” said Shawn DuBravac, an economist with the Consumer Electronics Association, who analyzed the findings.

The outlook for employment rose slightly, reaching a 12-year high. No firms reported significant layoffs, with the only reductions coming from already planned cuts.

Sales increased for the third consecutive quarter, profit margins continued to improve and the number of economists whose firms increased spending over the previous quarter held steady. Nearly all of the 72 economists surveyed, about 94 percent, now expect the economy to grow at least 2 percent in 2011.

The quarterly survey includes the views of economists for private companies and trade groups who are NABE members. The data are reported by broad industry groupings. Many results in the survey are expressed through the Net Rising Index, or NRI — the percentage of panelists reporting better outlooks minus the percentage whose outlook is bleaker.

The survey looked at two new questions for its April survey, gauging the financial impact of anti-government unrest in the Arab world and the deadly Japanese earthquake and tsunami.

Nearly 60 percent of those polled said they expected higher costs because of political turmoil in Bahrain, Egypt, Tunisia, Libya and Syria and about 52 percent said they expected economic growth to be weaker in 2011 because of the protests and fighting.

The March 11 earthquake and tsunami, which left nearly 28,000 people dead or missing and sparked a crisis at a nuclear plant, had less of an impact on the economic forecasts. About 31 percent said costs would be higher and 40 percent said it would weaken the broader economic recovery.

In the first quarter of this year, 63 percent of economists said sales rose from the previous quarter — the highest percentage since 1994. The NRI rating for sales rose 11 points from the previous quarter to 54, and the improvement was across all industry sectors: goods, utilities, information and communications, finance, insurance and real estate, and services.

Profit margins rose to an NRI figure of 31 — the highest rating since 1983. The number of economists reporting rising profits has almost doubled over the past year, to 45 percent from 25 percent.

Prices rose, with about one third of those surveyed saying their firms had made increases over the past three months. Two-thirds of the goods-producing industry, which includes farming, mining, construction and manufacturing, reported their firms had raised prices. Similarly, the costs paid for materials rose for the third quarter in a row and wages and salaries jumped to the highest reading since a survey in October 2007.

The survey was conducted between March 16 and 31.

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The world’s major economies are pledging to provide support for the regime changes


Major economies pledge support for regime changes

Posted by Calvin Lee Ledsome Sr.,
Owner and Founder of: http://www.LedSomeBioMetrics.com
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WASHINGTON (AP) — The world’s major economies are pledging to provide support for the regime changes that are occurring in the Middle East and North Africa. An Obama administration official is comparing what is occurring now to the fall of the Berlin Wall more than two decades ago.

The United States and France issued a joint statement after talks on Thursday saying major nations stood ready with international lending institutions to provide economic support for the new governments in Egypt and Tunisia.

U.S. Treasury Undersecretary Lael Brainard wrote in an opinion piece that the transformations that were occurring in the region could be as successful in unlocking economic prosperity as events after the fall of the Berlin Wall in 1989.

U.S. Treasury Secretary Timothy Geithner and French Finance Minister Christine Lagarde said in their statement summarizing the talks that the group would put together a joint action plan with early recommendations coming in May to support “inclusive and sustained growth, transparency and improved governance.”

Brainard wrote in an article for Foreign Policy magazine‘s website that “across the Middle East and North Africa, unprecedented upheavals are creating historic opportunities to expand the circle of democratic societies.”

Brainard cautioned that the reforms and efforts to provide greater economic growth for the region’s young people would take a number of years, with many challenges ahead. “We must be prepared to work through the setbacks and scale up successes,” she wrote.

The discussions on the Middle East occurred at the start of three days of finance talks designed to deal with various challenges facing the global economy, from soaring food and energy prices to continued tensions between the United States and China, the world’s two largest economies, over currencies and trade.

The United States was being represented at the talks by Geithner and Federal Reserve Chairman Ben Bernanke. The discussions Friday were taking place among the Group of 20, which includes traditional economic powers such as the United States and European nations and major developing powers such as Brazil, China and India.

Lagarde was leading the talks because France is this year’s head of the G-20, the group that since the financial crisis in 2008 has become the major steering body for the global economy.

The G-20 talks were scheduled to conclude Friday afternoon with a joint statement of goals and news conferences by Lagarde and other finance officials.

The finance talks will wrap up on Saturday with meetings of the policy-setting panels of the 187-nation International Monetary Fund and the World Bank.

World Bank President Robert Zoellick said Thursday that a major goal for his institution will be to win support from the rich countries for more assistance to poor nations that are facing food crises. A 36 percent surge in food prices over the past year has pushed an additional 44 million people into poverty.

“We have to put food first and protect the poor and vulnerable, who spend most of their money on food,” Zoellick told reporters Thursday.

The G-20 talks will be focused on making more progress on a set of economic indicators that the group can use to gauge whether countries are pursuing the correct policies to prevent the growth of dangerous imbalances in trade and government debt, which contributed to the last financial crisis.

The United States is pushing for the indicators to be set up, hoping they can be used to bring more pressure on China to allow its currency to rise in value against the dollar as a way to narrow the huge trade gap that exists between China and the U.S.

However, Chinese officials do not want the rebalancing process to be used as a way to attack China’s currency policies, and it was unclear whether any progress will be made during the Washington talks.

“There are lots of things to worry about, and we want to make sure we don’t fall back into another crisis as we did not that long ago,” Canadian Finance Minister James Flaherty told reporters.

IMF Managing Director Dominique Strauss-Kahn said that while the global economy began growing again last year after the most severe downturn since World War II, there still were multiple risks to the recovery.

“The recovery is getting stronger but … it is not the recovery we want because it is still imbalanced,” Strauss-Kahn said. “We must be aware of complacency, and we need urgent action.”

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Associated Press writer Harry Dunphy contributed to this report.

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Rising oil prices beginning to hurt US economy


Rising oil prices beginning to hurt US economy
Posted by Calvin Lee Ledsome Sr.,Owner and Founder of: https://economicnewsblog.wordpress.com and http://LedSomeBioMetrics.com

WASHINGTON (AP) — Just when companies have finally stepped up hiring, rising oil prices are threatening to halt the U.S. economy’s gains.

Some economists are scaling back their estimates for growth this year, in part because flat wages have left households struggling to pay higher gasoline prices.

Oil has topped $108 a barrel, the highest price since 2008. Regular unleaded gasoline now goes for an average $3.69 a gallon, according to AAA’s daily fuel gauge survey, up 86 cents from a year ago.

The higher costs have been driven by unrest in Libya and other oil-producing Middle East countries, along with rising energy demand from a strengthening U.S. economy.

Airlines, shipping companies and other U.S. businesses have been squeezed. The rising prices are further straining an economy struggling with high unemployment and a depressed housing market.

“The surge in oil prices since the end of last year is already doing significant damage to the economy,” says Mark Zandi, chief economist at Moody’s Analytics.

Unlike other kinds of consumer spending, gasoline purchases provide less benefit for the U.S. economy. About half the revenue flows to oil exporting countries like Saudi Arabia and Canada, though U.S. oil companies and gasoline retailers also benefit.

For consumers, more expensive energy siphons away money that would otherwise be used for household purchases, from cars and furniture to clothing and vacations.

High energy prices are “putting a drain on consumer budgets,” says James Hamilton at the University of California, San Diego. “To the extent they’re having to spend more on gasoline, they have to make cutbacks elsewhere.”

Two-thirds of Americans say they expect rising gasoline prices to cause hardship for them or their families in the next six months, according to a new Associated Press-GfK Poll. The telephone poll conducted March 24-28 had a sampling error margin of plus or minus 4.2 percentage points.

Seventy-one percent say they’re cutting back on other expenses to make up for higher pump prices. Sixty-four percent say they’re driving less. And 53 percent say they’re changing vacation plans to stay closer to home.

“I try to leave the car parked at home all day Saturday,” says Curt Lindsay, who commutes an hour each way to his job as a computer systems administrator outside Washington, D.C. “I’d rather not spend the money on gasoline.”

Since gasoline prices topped $3 a gallon, Lindsay has also been trying to drive more slowly to conserve fuel.

His co-worker Albert Zaza canceled family trips to New York and Boston after the cost of filling up his Honda CRV surged from $35 to $47. Zaza spends four to five hours in traffic each day and has to fill up every other day.

Rising fuel prices are pinching businesses too.

In Tipton, Iowa, Grasshopper Lawn Care is tacking 5 percent onto customers’ bills to compensate for higher fuel costs. The company has to buy more than 8,000 gallons of gasoline a year. It plans to keep the surcharge until gasoline prices dip back below $3 a gallon, owner Dan Kessler says.

The oil shock and global instability are diluting the benefits of an improving job market. The unemployment rate, though still high, is at a two-year low. And the economy has just produced the strongest two months of hiring since before the recession began.

Bernard Baumohl, chief economist at the Economic Outlook Group, has slashed his estimate for growth this year to 2.8 percent from 3.5 percent. In 20010, the economy grew 2.9 percent.

Consumer spending accounts for about 70 percent of the economy. After adjusting for inflation and for seasonal factors, consumers spent 0.3 percent more in February than in January.

But that’s unlikely to last. Gasoline prices are surging just as inflation-adjusted incomes are falling. More expensive gas is draining much of the cash Americans are receiving from a cut in Social Security taxes this year.

Zandi estimates that higher oil prices shaved 0.5 percentage point from growth in the January-March quarter. He predicts the economy grew 2.6 percent during the quarter.

If oil prices average $100 a barrel for the year, Zandi says, growth will be 0.3 percentage point lower than if prices had stayed at last year’s level — an average of less than $80 a barrel. A few months of $125-a-barrel oil would slash economic growth by a full percentage point, Zandi says. And a few months at $150 a barrel could push the economy back into recession.

Surging oil prices don’t hurt everybody in the United States. Oil companies, for example, stand to gain. In 2008, Exxon Mobil Corp. earned $45 billion — a record for a U.S. company — after oil prices hit a record $150 a barrel.

Oil services companies such as Halliburton Co., Schlumberger Ltd. and Baker Hughes Inc. also benefit as the oil industry rushes to find and produce more oil. And the products of biodiesel and other alternative energy companies become more competitive the higher oil prices go.

In a speech last week, Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, offered hope that higher oil prices won’t persist long enough to do much damage.

“Large increases in food or energy prices tend to be temporary,” Pianalto said. “History shows that they are often followed by sharp declines.”

But Mark Pawlak, a market strategist at Keefe, Bruyette & Woods, says he worries about a repeat of what happened to the economy last year: It built momentum at the start of 2010, only to stall in the face of a European debt crisis and a run-up in oil prices from February to April.

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The price of oil fell after China said it will raise interest rates again!


Oil slides as China raises interest rates

Posted by Calvin Lee Ledsome Sr.
Owner and Founder of: https://economicnewsblog.wordpress.com and http://LedSomeBioMetrics.com

NEW YORK (AP) — The price of oil fell Tuesday after China said it will raise interest rates again to help control inflation.

Benchmark crude gave up 38 cents at $108.09 per barrel in morning trading on the New York Mercantile Exchange.

In London, Brent crude rose 84 cents to $121.50 per barrel on the ICE Futures exchange.

Analysts are still concerned about uprisings in North Africa and the Middle East, which supplies about 27 percent of the world’s oil. But higher interest rates could slow China’s economy and shrink its appetite for oil. China, which trails only the U.S. in oil consumption, should still drive world oil demand this year, though it might not increase consumption as much as previously expected, analysts said. China has hiked interest rates four times since October.

“With higher interest rates, it’s tougher to raise money,” PFGBest analyst Phil Flynn said. “Businesses won’t be able to hire as much. People will buy (fewer) cars and they’ll drive less.”

Analysts also say the arrival of an oil tanker in one of Libya‘s rebel-held ports could mean that oil may start flowing from the country sooner than expected. Before the rebellion, Libya exported about 1.5 million barrels of oil per day — mostly to Europe. Those shipments have all but shut down.

It will probably be several months, even years, before Libya returns to the level of oil shipments it had before the uprising, experts said. Still, the arrival of a tanker was seen as a promising sign. Libya supplied less than 2 percent of world demand, but the losses have forced Saudi Arabia and other OPEC countries to make up for the shortage by boosting production at home. That will put further pressure on world supplies, especially if demand increases as expected later this year.

In other Nymex trading for May contracts, heating oil and gasoline futures both dipped by less than a penny to $3.1700 and $3.1691 per gallon, respectively. Natural gas lost a penny at $4.282 per 1,000 cubic feet.

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