Canada is looking at alternatives for exporting its oil since U.S. President Barack Obama announced he was blocking a pipeline from Alberta to Texas.
A pipeline executive said Thursday that the company was weighing whether to build a segment of the line _ from Oklahoma to Texas _ that wouldn’t require U.S. State Department approval. And government officials said Canada would push harder for a pipeline to the Pacific Coast, where oil could be shipped to China.
At the same time, Canadian officials said, they are hopeful the 1,700-mile (2,740-kilometer) Keystone XL pipeline will be built.
Alberta Premier Alison Redford, the leader of the Canadian province that has the world’s third-largest reserves of oil, said that while Canada is disappointed at Obama’s decision, the government believes Obama has made it clear the U.S. would consider a new Keystone XL pipeline application with a new routing.
Obama called Prime Minister Stephen Harper to explain that the decision on Wednesday was not on the merits of the pipeline but rather on the “arbitrary nature” of a Feb. 21 deadline set by Republican legislators as part of a tax measure he signed, Harper’s office said.
“The fact that the president has said that the decision was not based on the merits we take as a signal that there is an opportunity to make a decision that is in the national interest that allows the project to go ahead,” Redford told The Associated Press in a telephone interview.
Calgary-based TransCanada Corp., which proposed the pipeline, said Thursday it was considering building the pipeline in segments, with the first connecting an existing pipeline in Oklahoma to refineries in Texas.
The Obama administration had suggested development of an Oklahoma-to-Texas line to alleviate an oil glut at a Cushing, Oklahoma, storage hub.
“If our shippers are interested in building that portion of the pipeline (first), we would look at that,” TransCanada President and CEO Russ Girling told The Associated Press in an interview.
Obama’s rejection of Keystone XL “clearly gives flexibility to do that,” Girling said. He emphasized that the company had made no decisions.
U.S. officials have said that building the pipeline in sections could speed up the process since the U.S. State Department would not be involved if the pipeline does not cross the U.S.-Canada border.
Girling’s remarks were in contrast to a statement TransCanada issued on Wednesday declaring it would reapply for a presidential permit to build the full pipeline. Girling said the company still expects to reapply, but “will take our time for how to refile it.”
He said a new route that avoids environmentally sensitive areas of Nebraska should be made public in a matter of weeks
In Washington, the proposed $7 billion pipeline has become a political hot potato.
Republicans _ who earlier put the president in the awkward position of having to make a decision on it before Feb. 21 _ now hope to force Obama to deal with it yet again before next November’s presidential election. He wants to put it off beyond that.
Republicans are looking to drive a wedge between Obama and two key Democratic constituencies. Some labor unions support the pipeline as a job creator, while environmentalists fear it could lead to an oil spill disaster.
The Alberta-to-Texas pipeline proposed by TransCanada would carry 800,000 barrels of oil a day from Alberta across six U.S. states to the Texas Gulf Coast, which has numerous refineries.
Natural Resource Minister Joe Oliver said it’s clear the process is not yet over and said Canada is hopeful the pipeline will be accepted on its merits.
Redford said Obama’s decision adds urgency to Enbridge’s proposed pipeline to the Pacific Coast of British Columbia that would allow Canadian oil to be shipped to Asia for the first time.
The project is undergoing a regulatory review in Canada.
“Asian markets are a very viable alternative. I say alternative, I probably shouldn’t. It’s not an either or situation. There’s an opportunity here for us to grow our markets in both directions and we’d like to be able to do that,” Redford said.
Canadian officials see the pipeline to the Pacific coast as critical as Canada seeks to diversify its energy customer base beyond the United States, which Canada relies on for 97 percent of its energy exports.
Alberta has more than 170 billion barrels of oil reserves. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025. Only Saudi Arabia and Venezuela have more reserves.
Sinopec, a Chinese state-controlled oil company, has a stake in Enbridge’s proposed $5.5 billion Northern Gateway Pipeline. Chinese state-owned companies also have invested more than $16 billion in the oil sands in the last two years.
Tens of billions more are expected to be invested in Canada’s oil sands if the Pacific pipeline is built.
There is fierce environmental and aboriginal opposition to the Pacific pipeline, but Harper’s government has called it a nation-building project that is crucial to the country’s goal of becoming an energy super power.
The European Central Bank
LONDON/PARIS (Reuters) - A European summit deal to strengthen budget discipline in the euro zone failed to restore financial market confidence on Monday, forcing the European Central Bank to step in again gingerly.
The euro fell, stocks slid and borrowing costs for Italy and Spain rose as investors weighed the outcome of last week’s summit that split the European Union, with Britain blocking treaty change and forcing euro zone countries to negotiate a fiscal accord outside the Union.
Friday’s initial market rally petered out in less than 24 trading hours due to legal uncertainty surrounding the new pact and the absence of an unlimited financial backstop for the single currency.
French President Nicolas Sarkozy said the legal basis of a new accord to enforce debt and deficit rules in the 17-nation euro area with quasi-automatic sanctions and intrusive powers to reject national budgets would be worked out before Christmas.
“In the next fortnight, we will put together the legal content of our agreement. The aim is to have a treaty by March,” Sarkozy told newspaper Le Monde in an interview.
“You have to understand this is the birth of a different Europe — the Europe of the euro zone, in which the watchwords will be the convergence of economies, budget rules and fiscal policy. A Europe where we are going to work together on reforms enabling all our countries to be more competitive without renouncing our social model,” he said.
Traders said the ECB intervened to buy short-term Italian debt after yields on Italian and Spanish debt spiked. But ECB sources told Reuters last week that purchases would remain limited with a maximum ceiling of 20 billion euros a week.
There is no prospect of a “big bazooka” to shock the markets.
Despite the central bank dabbling, Italian 5-year bond yields shot up above 7 percent, widely seen as a danger level while 10-year yields spiked above 6.8 percent and Spanish 10-year yields topped 6 percent.
Investors’ appetite for short-term paper drove Italian one-year borrowing costs down just below 6 percent at an auction but yields remain uncomfortably high.
“Let’s not raise expectations too high, there will be more summits,” credit ratings agency Standard & Poor’s chief European economist Jean-Michel Six said.
“Time is running out and action is needed on both sides of the equation, on the fiscal and monetary side,” he told a business conference in Tel Aviv.
S&P has put 14 euro zone governments on watch for a possible rating downgrade in the coming weeks, arguing that the deepening debt crisis and looming recession will increase their potential liabilities and reduce their ability to cope with them.
If some of the euro zone’s ‘AAA’-rated members are downgraded, it would call into question the solidity of the euro zone’s rescue fund, which would likely suffer a similar fate fast cash loans.
“There is probably yet another shock required before everyone in Europe reads from the same page, for instance a major German bank experiencing difficulties in the market,” Six said. “Then there would be a recognition that everyone is on the same boat and even German institutions can be affected by this contagion.”
Interbank lending rates in the euro zone fell to their lowest level since May after the ECB threw cash-starved banks a lifeline last week by offering unlimited three-year liquidity to counter a credit crunch.
Political aftershocks from Friday’s historic rift between Britain and the rest of the 27-nation bloc continued to shake Europe on Monday with Prime Minister David Cameron facing tension in his coalition and doubts in the business community.
Cameron was assured of a hero’s welcome from Eurosceptics in his Conservative party in parliament but faced a backlash from his Liberal Democrat coalition allies when he explains a veto that has cast Britain adrift from its continental partners.
LibDem Deputy Prime Minister Nick Clegg said on Sunday he was “bitterly disappointed” with an outcome that would diminish Britain’s global influence and was bad for jobs and business.
In business, the chief executive of the world’s largest advertising group, Martin Sorrell of London-based WPP, told Reuters that Britain’s interests would be better serviced “inside the EU tent” than on the sidelines.
In Brussels, officials were groping for a strong legal basis for the planned fiscal compact, with Britain arguing that the euro zone cannot use the EU treaty institutions — the European Commission and the European Court of Justice.
European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters most of the practical measures to strengthen budget enforcement could be implemented immediately under a set of rules known as the “six-pack” agreed in October.
Euro zone finance ministers may hold an extra meeting before the end of the year to try to nail down details of the agreement before their winter break, diplomats said.
The euro area faces the next potential crunch point in mid-January when Italy, which has a debt mountain of 1.9 billion euros or 120 percent of its annual output, has to start issuing tends of billions of euros in bonds towards a 2012 total of 340 billion euros needed to roll over maturing debt.
Michael Leister, rate strategist with German bank WestLB in Duesseldorf, said the summit outcome had done little to restore confidence in the absence of stronger central bank action.
“The question is will this help to stabilise sentiment? I don’t believe so, given that those comments from
Diplomats frazzled by sleeplessness debated into the early hours of Sunday at a U.N. conference over a complex and far-reaching program meant to set a new course for the global fight against climate change for the coming decades.
South Africa’s foreign minister and chairman of the 194-party conference, Maite Nkoana-Mashabane, told delegates that failure to agree after 13 days of work would be an unsustainable setback for international efforts to control greenhouse gases.
“This multilateral system remains fragile and will not survive another shock,” she told a full meeting of the conference, which had been delayed more than 24 hours while ministers and senior negotiators labored over words and nuances.
The proposed Durban Platform offered answers to problems that have bedeviled global warming negotiations for years about sharing the responsibility for controlling carbon emissions and helping the world’s poorest and most climate-vulnerable nations cope with changing forces of nature.
The package must be approved by consensus, and no vote will be called. Determined opposition from even a small group of countries would unravel the deal put together after hundreds of hours of contentious negotiations.
Speakers from many developed countries said the package of documents more than 100 pages thick did not go far enough to help poor nations and did not require industrial countries to make more immediate and serious cuts in their carbon emissions. But most said they would accept it for lack of a better option.
But not Venezuela. “We all know this is a very bad agreement, that it will require more work next year and it cannot be adopted,” chief delegate Claudia Solerno said.
After weeks of being accused of obstructionism and delay, U.S. climate envoy Todd Stern voiced surprisingly strong support for the deal.
“This is a very significant package. None of us likes everything in it. Believe me, there is plenty the United States is not thrilled about,” Stern said. But the package captured important advances that would be undone if it is rejected.
Saturday afternoon, as negotiations dragged on with no sign of breakthrough, some ministers and top negotiators left Durban with no assurance of an agreement.
European Commissioner Connie Hedegaard, drawn and fatigued after two nights with minimal sleep, warned that failure in Durban would jeopardize new momentum in acting against global warming.
Introducing the package late Saturday, Nkoana-Mashabane said its four documents, which were being printed as she spoke, were an imperfect compromise, but they reflected years of negotiations on the most central political responses to global warming.
The package would give new life to the 1997 Kyoto Protocol, whose carbon emissions targets expire next year and apply only to industrial countries.
A separate document obliges major developing nations like China and India, excluded under Kyoto, to accept legally binding emissions targets in the future, by 2020 at the latest.
Together, the two documents overhaul a system designed 20 years ago that divide the world into a handful of wealthy countries facing legal obligations to reduce emissions, and the rest of the world which could undertake voluntary efforts to control carbon.
The European Union, the primary bloc falling under the Kyoto Protocol’s reduction commitments, said an extension of its targets was conditional on major developing countries also accepting limits with the same legal accountability. The 20th century division of the globe into two unequal parts was invalid in today’s world, the EU said.
The package also would set up the structure and governing bodies of a Green Climate Fund, which will receive and distribute billions of dollars promised annually to poor countries to help them adapt to changing climate conditions and to move toward low-carbon economic growth.
But the document made no specific mention of how those funds would be mobilized. Wealthy countries have pledged $100 billion a year by 2020 to poor countries, scaling up from $10 billion today.
The remaining document of more than 50 pages lays out rules for monitoring and verifying emissions reductions, protecting forests, transferring clean technologies to developing countries and scores of technical issues.
In the final hours, talks focused on unresolved differences on a clause encouraging countries to pledge greater reductions of greenhouse gases and to close what is known as the “ambition gap.” More than 80 countries have made either legally binding or voluntary pledges to control carbon emissions. But taken together, they will not go far enough to avert a potentially catastrophic rise in average temperatures this century, according to scientific modeling and projections.
Hedegaard said a lack of ambition could derail progress made on a host of other issues.
Countries had made concessions that they had resisted for years, and it would be “irresponsible” to lose that momentum now, she said.
Strong language on curbing emissions is of prime importance to small islands endangered by rising ocean levels and by many poor countries who live in extreme conditions that will be worsened by global warming.
Throughout the talks, the U.S., China and India remained stubbornly opposed to the EU’s plan to negotiate a successor to the Kyoto accord by 2020 that also would put them under legal obligations. The talks would conclude by 2015, allowing five years for it to be ratified by national legislatures. The plan insists the new agreement equally oblige all countries _ not just the few industrial powers _ to abide by emission targets.
Hours were devoted to arcane but diplomatically important questions of whether the objective of the talks was a legal “framework,” an “outcome,” or an “instrument.”
The expiring of Kyoto’s targets have hung over the U.N. process for years, and was the most contentious issue dividing rich and poor nations.
Developing countries were adamant that the Kyoto commitments continue since it is the only agreement that compels any nation to reduce emissions. Industrial countries say the document is deeply flawed because it makes no demands on heavily polluting developing countries. It was for that reason that the U.S. never ratified it.
Agreement by developing countries to accept binding targets essentially redraws the map. “That’s a very big deal,” said Samantha Smith, of WWF International. “That reflects a major macroeconomic and geopolitical change” in climate negotiations.
OTTAWA
Peabody Energy Corp. said Wednesday that it has increased its stake in Australia’s Macarthur Coal Ltd. beyond 90 percent — the point that it can require other stockholders to tender their shares.
The St. Louis-based coal producer is also raising its offer for Macarthur as previously agreed to do if its stake in the mining company exceeded the 90-percent threshold, bringing the total value of the deal to almost $5 billion.
Peabody will now pay 16.25 Australian dollars for each Macarthur share, a slight bump from its previous offer of 16 Australian dollars bad credit payday advance.
Gregory H. Boyce, Peabody’s chief executive, said acquiring 100-percent of Macarthur “brings clear strategic and financial benefits.”
Peabody “looks forward to completing operational improvements, accelerating the realization of synergies and advancing Macarthur’s growth pipeline,” Boyce said.
By day, Wade Brosz teaches American history at an A-rated Florida middle school. By night, he is a personal trainer at 24 Hour Fitness.
Brosz took the three-night a week job at the gym after his teaching salary was frozen, summer school was reduced drastically, and the state bonus for board certified teachers was cut. He figures that he and his wife, also a teacher, are making about $20,000 less teaching than expected to, combined.
“The second job was to get back what was lost through cuts,” said Brosz, a nationally board certified teacher. “It was tougher and tougher to make ends meet. I started personal training because it’s flexible hours.”
Second jobs are not a new phenomenon for teachers, who have historically been paid less than other professionals. In 1981, about 11 percent of teachers were moonlighting; the number has risen to about one in five today. They are bartenders, waitresses, tutors, school bus drivers and even lawnmowers.
Now, with the severe cuts many school districts have made, teachers like Brosz, who hadn’t considered juggling a second job before, are searching the want ads. The number of public school teachers who reported holding a second job outside school increased slightly from 2003-04 to 2007-08. While there is no national data for more recent years, reports from individual states and districts indicate the number may have climbed further since the start of the recession.
In Texas, for example, the percentage of teachers who moonlight has increased from 22 percent in 1980 to 41 percent in 2010.
“It’s the economy, primarily,” said Sam Sullivan, a professor at Sam Houston State University, which conducts the survey.
Rita Haecker, president of the Texas State Teachers Association, said cuts in education have forced many teachers to take furlough days. It’s an extra strain because, unlike in the past, many teachers are now the primary breadwinner, either because they are a single parent or their spouse is unemployed, Haecker said.
“It affects their morale in the classroom,” she said. “The last thing we want is our teachers worried about how they are going to pay their bills.”
The average salary for a public school teacher nationwide in the 2009-10 school year was $55,350, a figure that has remained relatively flat, after being adjusted for inflation, over the last two decades. Starting teacher salaries can be significantly lower; compared to college graduates in other professions, they earn more than $10,000 less when beginning their careers.
“I think people have felt the need to supplement their teaching salaries in order to have a middle class lifestyle,” said Lawrence Mishel, president of the Economic Policy Institute, which published a study this year concluding the average weekly pay of teachers in 2010 was about 12 percent below that of workers with similar education and experience.
The Organization for Economic Cooperation and Development, which collects data on student performance across the globe, advised the United States earlier this year to work at elevating the teaching profession in order to improve student performance. The recommendations included measures like raising the bar for who is selected to become a teacher, providing better training and better pay. In many nations where students outperform the U.S. in reading, math and science, including Japan and South Korea, teachers earn more than they do in the United States.
“International comparisons show that in the countries with the highest performance, teachers are typically paid better relative to others, education credentials are valued more, and a higher share of educational spending is devoted to instructional services than is the case in the United States,” the OECD report concluded.
While moonlighting isn’t unique to teachers, they do tend to have second or third jobs at a higher rate than other professionals. One researcher estimates their moonlighting rates may be four times higher than those of other full-time, college educated salaried workers.
Eleanor Blair Hilty, an education professor at Western Carolina University, said most teachers make around $5,000 through outside work. Yet when asked if they would quit if given a raise in the equivalent amount, most said no. Her conclusion: teachers are getting something more from their second job other than an extra paycheck.
“A lot of it has to do with what I think is wrong with the teaching profession,” Hilty said, noting that teachers have little autonomy and control over what and how they teach. “They found their moonlighting jobs to be satisfying.”
Policies on moonlighting vary by district; some have no written guidelines, while others merely advise teachers to ensure any outside work doesn’t interfere with their duties at school.
In North Carolina, a survey conducted in 2007 found 72 percent of teachers moonlight, whether it’s an after-school job or summer employment.
“There’s a culture of silence,” Hilty said. “Everybody knows that moonlighting goes on and they know it’s part of what teachers do but nobody likes to talk about it very much.”
Michelle Hartman, a language arts and science teacher at a Plantation, Fla., elementary school, is balancing two other jobs, one as an organist with the local Presbyterian church, playing at church services, weddings and funerals, and another doing janitorial work twice a week at her father’s accounting firm.
The single mother has a master’s degree in educational leadership and has been a teacher 15 years. But she says she cannot afford to leave any of her extra jobs, which she said brings in about $6,000 year, in addition to her $46,000 teaching salary.
“I’m tired some days,” Hartman said. “But no matter what, it doesn’t matter because I know I need to be there for the students.”
Yet working an extra job inevitably does take a toll. On top of their work in the classroom, teachers have to grade papers and plan lessons _ work they often do at home. One study on teachers who moonlight in Texas cited the case of a teacher who ended up grading papers at the restaurant where she worked. The same study found that all the teachers interviewed reported that moonlighting had a negative effect on their health. In the Texas survey, a majority said moonlighting was detrimental to their work in the classroom.
“Yes, they go 100 percent, but they’re still tired,” said Dave Henderson, a retired professor who worked on the study for many years.
Albert Ochoa, a middle school art and publications teacher in Austin, Texas, works at least five hours a night at UPS as a shipper, a job he’s had since graduating from college in 1977. Even though he is now toward the higher end of the teacher salary schedule, he said he cannot afford to quit either job.
He said he’d have to earn another $2,000 a month in order to support his wife, who is on medical disability, and son, and not work a second job. “I’ve had opportunities to go work full time at UPS and do other things,” Ochoa said. “But I enjoy what I do. I like teaching.”
NYSE Euronext on Thursday said the summer’s unusually heavy trading helped lift third-quarter profit by 56 percent.
The owner of the New York Stock Exchange and other operations reported net income of $200 million, or 76 cents per share, for the three months ended Sept. 30. That compared with net income of $128 million, or 49 cents per share, in the year-ago quarter.
Adjusted for costs related to the planned combination with German exchange operator Deutsche Boerse, a one-time tax benefit in Europe, and other items, profit came to 71 cents per share.
Revenue rose 20 percent to $1.26 billion, from $1.05 billion last year.
Analysts, on average, were expecting profit of 69 cents per share on revenue of $701.8 million, according to data provided by FactSet.
The strong results come as the exchange awaits a decision by European regulators on the $10 billion all-stock deal to create the world’s largest exchange operator that was announced in February.
The two companies reportedly have until Nov. 17 to address objections from the European Union’s competition watchdog that center on the potential for the combined company to potentially dominate the trading of derivatives, a very lucrative business for exchanges. Derivatives are complicated financial products that allow investors to bet on developments in things like commodity prices or interest rates.
CEO Duncan L. Niederauer said in a statement accompanying the results that the companies recently took part in a hearing before the EU regulators. “At the hearing, both companies were able to crystallize the compelling nature of our merger, which will bring significant benefits to customers, regulators and intermediaries.”
A decision on the deal is expected by late December. The two exchanges have stated the goal of completing the deal by the end of the year.
In conjunction with the deal, both companies last week announced plans to coordinate stock repurchases. NYSE Euronext it will buy back up to $100 million of its stock shares, while Deutsche Boerse AG said it would repurchase shares valued at around 100 million euros ($141.2 million). The two programs will take place simultaneously to preserve the ownership percentages of 40 percent and 60 percent to be held by former NYSE Euronext and Deutsche Boerse shareholders, respectively, in the combined company.
During the third quarter, trading volume on NYSE Euronext exchanges in both the U.S. and Europe surged amid the worst quarter for the markets since 2008. The European debt crisis, the U.S. debt ceiling debate and fears of another recession fueled the volatility.
The higher volume pushed up revenue from derivatives trading by 20 percent to $226 million. Average daily volume of global derivatives rose 33 percent to 9.3 million contracts.
Revenue from cash trading and listings gained 18 percent to $353 million. Average daily volume in Europe surged 40 percent to 1.9 million transactions. Average volume in the U.S. rose 9 percent to 2.6 billion shares traded.
During the most quarter, the New York Stock Exchange led 11 initial public offerings in the U.S., raising $3.2 billion.
The company’s revenue from information and technology services increased 11 percent to $125 million during the quarter.
Cost-cutting measures also helping NYSE Euronext’s results during the quarter.
Excluding merger-related costs, operating expenses slipped to $416 million, from $419 million last year. Excluding the impact of acquisitions, new initiatives and a $10 million negative impact attributable to foreign currency fluctuations, fixed operating expenses dropped 5 percent, the company said.
NYSE said it expects to meet its full-year guidance for operating expense of less than $1.65 billion, excluding merger expenses and exit costs. Factoring in certain portfolio changes and the impact of currency fluctuations, full-year 2011 expenses are expected to be about $1.68 billion.
In afternoon trading, NYSE Euronext shares gained 95 cents, or 3.7 percent, to $26.48. The stock is down 12 percent for the year.
Let’s wait and see.
That’s likely to be the message from the Federal Reserve on Wednesday, when its two-day policy meeting ends. Few expect any bold new steps to be announced.
Fed policymakers likely want to gauge the impact of action they’ve taken recently to keep interest rates low. The Fed has breathing room because the economy and stock markets have strengthened enough to allay fears of another recession.
After their September meeting, the policymakers said they would shuffle the Fed’s investment portfolio to try to further reduce long-term interest rates. And in their previous meeting in August, they had said they plan to keep short-term rates near zero until at least mid-2013 unless the economy improved.
“They know they are running out of tools, so they don’t want to employ another one unless they have to,” said David Wyss, former chief economist at Standard & Poor’s.
At its last meeting, the Fed left open the possibility of taking additional action to try to help the economy. One option is to further explain the steps it has already taken and their purposes. Another would be to launch a third program of bond purchases.
But the Fed remains deeply divided over what, if any, action to take, which is another reason economists don’t expect any major announcements this week.
The actions taken in August and September were adopted on 7-3 votes, the most dissents in nearly 20 years.
Three regional bank presidents _ Richard Fisher of Dallas, Charles Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis _ all voted no. They have expressed concerns that the Fed’s policies could lead to high inflation later.
On the other hand, four policymakers are worried that the Fed might not be doing enough. Vice Chair Janet Yellen, Governor Daniel Tarullo, Chicago Fed President Charles Evans and New York Fed President William Dudley have said the economy is at risk and might need more support.
“I have never seen the Fed more deeply divided than it is at this moment,” said David Jones, head of DMJ Advisors and the author of books on the Fed.
At its meeting in September, the Fed stopped short of expanding its portfolio of investments. Instead, it opted to shuffle $400 billion of its investments to try to lower long-term rates.
But two officials pushed for bolder action, according to minutes of the meeting. The members discussed more bond-buying. Some said it should remain an option.
A brighter outlook for the economy has given the Fed more room to wait. The economy grew at an annual rate of 2.5 percent in the July-September period _ the best quarterly performance in a year.
That’s strong enough to show that the economy isn’t about to slide into recession. Still, growth would have to be nearly twice as high _ consistently _ to make a major dent in the unemployment rate, which has been stuck at 9.1 percent for three straight months.
Stocks have rallied of late. Even after a drop of nearly 2.5 percent Monday, the Standard & Poor’s 500 stock index in October notched its best one-month showing since December 1991.
European leaders have also announced a debt agreement that could help prevent a financial catastrophe on the continent. Still, even if it does, many analysts don’t think Europe can avoid another recession.
Many economists think the Fed will hold off on new action until its December meeting or early next year. The next step could be further clarity on its interest-rate policy.
Evans has proposed that the Fed set benchmarks for raising rates. For example, it could agree not to raise short-term rates until unemployment fell below 7 percent or the outlook for inflation exceeded 3 percent. The unemployment rate has hovered around 9 percent for more than two years, and the Fed’s inflation outlook is under 2 percent.
Yellen, who heads a Fed panel that is examining ways to improve the central bank’s communications, says the idea should be examined. But she cautioned that such benchmarks could confuse investors.
She has suggested that the Fed could add further guidance when it provides its economic forecasts four times a year. The forecast offers estimates for growth, unemployment and inflation. It does not forecast interest rates.
Mark Zandi, chief economist at Moody’s Analytics, said that adding a Fed forecast on the federal funds rate, its main policy lever, would reassure investors about when it might move interest rates.
“They have given investors more clarity about the timing of future rates, but including an actual forecast of when rates might change would help bring rates down further,” Zandi said.
Stressful economic periods lead to stressful family finances, which in turn can lead to bankruptcy filings.
Bankruptcy is not a panacea to lift up all your financial troubles and put a smile on your face, as late-night television commercials would have you believe. But in case it turns out to be the only answer, you should have a full understanding of available choices and potential repercussions.
Personal bankruptcies in the U.S. declined 8 percent in the first half of this year compared with the year-earlier period, according to the American Bankruptcy Institute. Chapter 7 bankruptcies fell 9 percent, while Chapter 13 filings were down 3 percent. Sounds good, but it may not be.
“The decline in personal bankruptcies isn’t an indication that the economy is vastly improving, but rather an indication that people can’t afford to file,” said Doug Erickson, vice president in strategic programs for the nonprofit CredAbility (www.CredAbility personal business card.org) counseling service in Atlanta. “It isn’t cheap to file for bankruptcy, with a Chapter 7 bankruptcy costing you anywhere from $1,000 to $2,500 (in court and attorney fees), and payment is due up front.”
Chapter 7 is the more prevalent personal bankruptcy, providing liquidation of a debtor’s property and distribution by the bankruptcy trustee of proceeds to creditors. There is no repayment plan.
Chapter 13 bankruptcy, also known as the “wage earner’s plan,” allows people with regular incomes to develop a plan to repay all or part of their debts.
“If you don’t have a source of income, you will not qualify to file Chapter 13,” explained Erickson. “If you are unemployed but can make mortgage and car payments, you can file Chapter 7.”
While you can keep your house in Chapter 7, unsecured debt such as credit card debt will be discharged, he explained. However, debt acquired within 90 days of filing can’t be discharged
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