“Baucus unveils health care bill - Boston Globe” plus 4 more

Baucus unveils health care bill - Boston Globe
U.S. mortgage demand drops, supply caps improvement - MSN Money
Ziegler Places First Start-Up CCRC Financing in 2009: $86 Million for ... - Market Wire
Consumer prices in U.S. up in August - AZCentral.com
4 Dumb Financial Moves in the Recession - CNBC

Baucus unveils health care bill - Boston Globe

Posted: 16 Sep 2009 08:33 AM PDT

He doesn't have any Republican support, and many Democrats aren't all that thrilled, either. But Senate Finance Chairman Max Baucus stuck to his deadline and this morning formally unveiled his plan to overhaul the nation's health care system.

The bill would cost about $856 billion over the next 10 years, require all individuals to purchase coverage or pay a fine, and ban insurers from charging more or denying coverage to people with health problems. It does not include the public option -- a government plan along the lines of Medicare -- but does call for nonprofit coops to compete with private insurers.

The bill would create a new exchange where consumers could compare and buy insurance plans. Medicaid, the government health care program for the poor, would be expanded.

Baucus would pay for the expansion of care with $507 billion in cuts to government health programs and $349 billion in new taxes and fees, including a new tax on generous insurance plans -- so-called Cadillac coverage -- and new fees on insurance companies and medical device manufacturers.

Click here to see "America's Healthy Future Act of 2009."

The Senate Finance bill is expected to be the vehicle for the proposals sought by the White House and described by President Obama in his speech to Congress last week.

Asked by CNN whether his legislation had the backing of the White House, Baucus replied, "My bill is very very similar to the framework that the president outlined. It's very similar."

Despite months of negotiations, however, Baucus was unable to get the three Republicans in the so-called Gang of Six to sign on. One of them, Senator Charles Grassley of Iowa, bemoaned what he called an "artificial deadline."

"Im disappointed because it looks like were being pushed aside by the Democratic leadership so the Senate can move forward on a bill that, up to this point, does not meet the shared goals for affordable, accessible health coverage that we set forth when this process began. In addition to concerns about costs to taxpayers and affordability for individuals, there are still some serious outstanding issues that have yet to be resolved like preventing taxpayer funding of abortion services and the enforcement against subsidies for illegal aliens," Grassley said in a statement.

"On top of all that, theres no guarantee that a Finance Committee bill, even if it becomes bipartisan, will stay that way after it leaves the committee. An overriding issue for some time has been the fact that members of the Democratic leadership havent made a commitment to back a broad bipartisan bill through the entire process," added Grassley, who negotiated along with Republicans Mike Enzi of Wyoming and Olympia Snowe of Maine.

But in an op-ed published in today's Wall Street Journal, Baucus said he couldn't wait any longer.

"Health care is a complicated and deeply personal issue; it takes time and effort to get reform right. Legislating every piece of this puzzle would be impossible and counterproductive," he wrote. "What we can do is seize this opportunity to put America back on a fiscally sustainable path. The Senate Finance Committee proposal builds on what already works and fixes what threatens to break the bank for future generations."

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U.S. mortgage demand drops, supply caps improvement - MSN Money

Posted: 16 Sep 2009 08:26 AM PDT

By Lynn Adler

NEW YORK (Reuters) - Demand for U.S. home loans fell by more than 8 percent as fixed mortgage rates rose last week in a banking period shortened by the Labor Day holiday, the Mortgage Bankers Association said on Wednesday.

Total applications were nonetheless at one of the highest levels seen since early June, with borrowers still eager to take advantage of the federal first-time home buyer tax credit before the program closes at the end of November.

Borrowing costs stayed relatively low, which continues to foster demand for potential buyers. But there is growing concern about whether housing can sustain its recent momentum once some key government rescue programs end.

As a result, the real estate industry is pressing Congress to extend the tax credit to all buyers and increase the size to $15,000 from $8,000 in a program now set to end on November 30.

Another concern is the end-2009 deadline for Federal Reserve mortgage-related debt purchases of up to $1.45 trillion -- aimed at keeping loan rates down.

"If the first-time home buyer tax credit expires at the end of November and if the Federal Reserve were to significantly scale back their mortgage (bond) purchases early in 2010, the housing market could hit a wall very quickly," said senior Bankrate financial analyst Greg McBride in North Palm Beach, Florida.

"I don't think that the Fed is going to do anything rash," he said. "I think they will slowly back away from the table so as to keep a lid on mortgage rates."

RATES EDGE UP

Average 30-year loan rates rose 0.06 percentage point to 5.08 percent last week. The rate was up from the record low of 4.61 percent set in March, but down from 5.82 percent a year ago, the industry group said.

The seasonally adjusted mortgage applications index fell 8.6 percent in the week ended September 11 to 592.8, driven by a 10.3 percent drop in its purchase applications index and a 7.4 percent slide in refinancing demand.

These figures were adjusted to account for Labor Day.

Housing market upside is limited by a supply of unsold homes inflated by foreclosures, industry executives and economists say,

"We still have a lot of inventory in the marketplace and that is continuing to put pressure on pricing, but pricing has come down to a level that has really opened the marketplace to a lot more buyers," said Tom Kunz, chief executive of Century 21 Real Estate in Parsippany, New Jersey.

"We need to stimulate the move-up marketplace because there's too much inventory out there," for first-time buyers to absorb, he said.

A 26-year high in unemployment and wage cuts have added to the hardships in housing, forcing many new foreclosures that further swell housing inventories.

Job loss and underemployment spread the pain in housing from the subprime sector, where borrowers often only could afford initial payments with exotic and risky adjustable-rate loans, to "prime" borrowers that favor fixed-rate mortgages.

For the first eight months of the year, 69 percent of homeowners who turned to national nonprofit Consumer Credit Counseling Service of Greater Atlanta for foreclosure prevention help had fixed-rate loans. That was up from 53 percent in the same period last year.

"The housing recovery will be constrained by lingering excess supply," Joshua Feinman, chief economist at Deutsche Bank's DB Advisors, said in a report. "The scars from this crisis will likely keep households and financial intermediaries cautious for some time."

(Editing by W Simon)

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Ziegler Places First Start-Up CCRC Financing in 2009: $86 Million for ... - Market Wire

Posted: 16 Sep 2009 08:11 AM PDT

SOURCE: Ziegler

CHICAGO, IL--(Marketwire - September 16, 2009) - The long-frozen senior living capital markets continue to show signs of thawing, with the markets reaching a new landmark in the successful pricing of just over $86 million fixed-rate bonds for 15 Craigside, a new continuing care retirement community to be built in the Nu'uanu suburb of Honolulu, Hawaii. The pricing, brought to market by Ziegler ( PINKSHEETS : ZGCO), a growth-oriented boutique investment banking and investment services firm, marks only the fifth sizable senior living issue in 2009, the first start-up CCRC (Continuing Care Retirement Community) financing in more than 18 months, and the largest fixed-rate financing so far this year.

Craigside Retirement Residence, owner of 15 Craigside, is a Hawaii non-profit whose sole member is The Arcadia Foundation; other affiliates include Arcadia Retirement Residence, Arcadia Elder Services, and Arcadia Home Health Services. Arcadia Retirement Residence has a 40-year history of successful CCRC operations in the Honolulu market and brings that expertise and reputation to the development and operations of 15 Craigside.

15 Craigside will be a 13-story building located on a 1.5-acre site in Nu'uanu, northwest of Waikiki Beach, on the island of Oahu. The community will include 170 independent living apartments (ILUs), 41 nursing beds, 4 unlicensed nursing "boarder beds," and common areas including a pool, wellness, dining, and many other typical CCRC amenities. The ILUs will be licensed to provide assisted living services as needed by Arcadia Home Health Services.

"In the toughest months of an unforgiving financial environment and a frozen bond market, Ziegler was a key factor in keeping our dream and mission for this senior living community alive and within reach," said Emmet White, CEO of Craigside Retirement Residence. "Simply put, in these difficult times, Ziegler's continuous efforts to strive for Hawaiian pono enabled 15 Craigside to 'thaw' a much needed market for this new and most welcome continuing care retirement community in Honolulu."(1) [Pono means: Goodness, morality, rectitude, correct or proper procedure, excellence, well-being, duty and right.]

"The solid and enthusiastic response of the institutional bond market to a non-rated start-up senior living transaction is highly encouraging news for the senior living sector," said Mary Muñoz, managing director for Ziegler. "As clients across the country are re-evaluating growth and redevelopment opportunities, Craigside's success is a great positive indicator of market appetite."

Given the continued challenging Letter of Credit bank market, Ziegler structured both the short-term debt (to be repaid with entrance fees) and the long-term debt with term bonds and Ziegler's ARROS(SM) adjustable-rate bonds. The average yield on the short-term debt is 7.18%, and the average yield on the long-term debt is 9.12%, with a top yield of 9.15% on the 2044 term bond.

About Ziegler:

The Ziegler Companies, Inc. ( PINKSHEETS : ZGCO) is a growth-oriented boutique investment banking and investment services firm with a primary focus in the healthcare, senior living and church and school sectors. Operations encompass capital markets (capital advisory services, bond underwriting, mortgage banking, institutional sales and trading) and wealth management, including asset management and alternative investments.

Nationally, Ziegler's Capital Markets is ranked as one of the leading investment banking firms for non-profit healthcare and senior living providers, as well as religious institutions and schools.

Ziegler Wealth Management (retail brokerage) encompasses investment and consulting services for individuals, families, business owners and institutions nationwide.

Ziegler's alternative investing activities include raising and deploying capital through private investment funds with investment objectives related to the real estate, services and technology sectors of the healthcare and senior living industries.

Ziegler Capital Management, LLC provides separate account management for individuals, corporations, foundations and endowments. Total assets under management are approximately $1.8 billion.

(1) This client's experience may not be representative of the experience of other clients, nor is it indicative of future performance or success.

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Consumer prices in U.S. up in August - AZCentral.com

Posted: 16 Sep 2009 08:26 AM PDT

Bloomberg News

Sept. 16 -- Consumer prices rose 0.4 percent in August, underscoring the Federal Reserves view that inflation will be contained.

The gain in the consumer price index was larger than forecast and followed no change in July, the Labor Department said today in Washington. Excluding food and energy costs, the so-called core index increased 0.1 percent, matching expectations.

Companies such as Kroger Co. are keeping a lid on prices to revive demand as the economy starts to emerge from the worst recession since the 1930s. A lack of inflation will probably give Fed policy makers leeway to keep interest rates near zero in the foreseeable future to secure a recovery.

What we're seeing is a gradual disinflation that reflects the persistent slack in our economy, said Richard DeKaser, chief economist at Woodley Park Research in Washington, who accurately forecast the monthly increase in overall prices. This is providing the Fed with lots of patience in reversing monetary policy.

Treasury 10-year notes rose for the first time in three days after the report. The yield on the 10-year note fell six basis points, or 0.06 percentage point, to 3.40 percent at 9:05 a.m. in New York.

Economists forecast consumer prices would rise 0.3 percent, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.1 percent to a gain of 0.6 percent.

Compared with a year earlier, prices were down 1.5 percent.

For the core index, prices were up 1.4 percent from a year earlier, the smallest gain since February 2004.

Energy Prices

The increase in the cost of living reflected a 4.6 percent increase in energy prices in August. Gasoline climbed 9.1 percent.

Gasoline prices this month are in line with August figures, according to AAA. Regular pump prices averaged $2.58 a gallon in the first 15 days of September, compared with an average of $2.62 in August.

Food prices, which account for about a seventh of the CPI, increased 0.1 percent in August, the smallest gain since January.

Lower food prices are dragging down revenue at some businesses. Kroger, the largest U.S. supermarket chain, yesterday reported second-quarter profit that fell more than analysts estimates as prices for some products, particularly produce and dairy, decreased more than expected.

Most of us have never seen a selling environment like now, Chief Executive Officer David Dillon said on a conference call, adding that prices will continue to decline over the next several quarters. It will be like this a while longer.

Air Fares, Hotels

The increase in the core index reflected gains in used cars, air fares and hotel rates.

Rents, which make up almost 40 percent of the core CPI, were little changed. Owners-equivalent rent, one of the categories used to track rental prices, climbed 0.1 percent following no change in July.

New vehicle prices plunged 1.3 percent, the biggest drop since 1972. The Labor Department said it considered the administrations cash-for-clunkers initiative as a discount off purchase prices, contributing to the drop. The program gave buyers as much as $4,500 for trading in older models for new, more fuel-efficient autos.

Auto Sales

Sales at automobile dealerships and parts stores climbed 11 percent in August, the most since October 2001, according to a Commerce Department report yesterday.

Excluding autos, the core rate would have climbed 0.2 percent, according to a Labor Department spokesman.

The CPI is the broadest of the three monthly price gauges from Labor because it includes goods and services. Labor said last week that prices of goods imported into the U.S. rose 2 percent in August on higher petroleum costs.

Fed policy makers on Aug. 12 committed to keeping the key interest rate between zero and 0.25 percentage point for an extended period to promote economic recovery. They said they expected inflation will remain subdued for some time. The central bankers meet again next week.

Former Fed Chairman Alan Greenspan, speaking yesterday to an investor conference sponsored by Deutsche Bank Securities Inc., said inflation will continue to cool until next year.

We've got worldwide disinflation in train and it will continue for a short while, he said. Our model says that by the early months of next year the rate of inflation will fall below 1 percent on an annual rate before starting to climb.

A report from the Labor Department yesterday showed prices paid to factories, farmers and other producers rose 1.7 percent in August, more than twice as much as forecast, led by gasoline costs.

Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

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4 Dumb Financial Moves in the Recession - CNBC

Posted: 16 Sep 2009 08:26 AM PDT

You can almost hear the collective slaps to the head.

This recession has brought to light dumb money management practices, forcing just about all of us to confront our financial foibles.

Maybe, for instance, you're one of the ones who panicked and sold during the market bottom. Or, you believed housing prices were guaranteed to rise.

The federal government is tapping behavioral economists -- experts on why we humans make the money judgments we do -- to help devise regulations so that people don't take on unaffordable mortgages and to help them understand their actual credit card fees.

But these efforts just scratch the surface. Here are four common mistakes that surfaced during this economic turmoil, and fixes that we can put in place to prevent ourselves from making the same costly error again:

Regret 1: I didn't have emergency reserves.

Outsmart yourself: When we're confident about our security, stashing cash can seem like a waste. We'd prefer to put the dollars into a "better" use, whether it be sprucing up our home or going on vacation.

Last year, when the unemployment rate started soaring, so did the savings rate of suddenly scared Americans.

If you were one of those scrambling to build emergency reserves, you may abandon the practice once your fear subsides -- setting yourself up for another panic at the next sign of trouble.

So prevent yourself from slipping out of the savings habit by establishing an automatic withdrawal from your checking to a liquid savings. Moreover, if you instruct the bank to sweep a certain sum into a short-term CD when your balance reaches a prescribed level, you won't be tempted to raid the emergency stash.

"The idea is to create a mechanism that will force a habit," says Dan Ariely, a Duke University behavioral economist and author of "Predictably Irrational: The Hidden Forces That Shape Our Decisions."

If disaster does strike, there may be a small penalty to cash in a CD, but at least there'll be money to tap, says Ariely. Not all banking institutions may agree to automatically set up a short-term CD, however, so you might have to direct yourself periodically by putting the task on your calendar as a "must do."

Regret 2: I panicked when the market collapsed.

Outsmart yourself: Once a powerful emotion sets in, don't expect to overcome it, says Ariely. So head off the fear before it takes hold, he says.

When the market took a plunge earlier this year, Ariely says he personally took deliberate steps to block the reports of the Dow's dive. "I didn't want to look at my accounts online, so I input the wrong password three times. That locked me out," he says.

Don't listen to the business news, either, if that will rattle your resolve to hold your investments, Ariely adds.

Moreover, before an investment drops precipitously, you may want to set up alerts (many brokerage houses and financial Web sites offer this service) so that you receive an e-mail when a stock price drops to a certain level. Although he doesn't think most individuals know enough about a particular company to wisely invest in stocks, Eric Toya, a financial adviser based in Redondo Beach, Calif., says that these alerts could spur investors to talk with their adviser about keeping a holding that's losing value.

Regret 3: I greedily overinvested in a 'sure' thing.

Outsmart yourself: Studies have shown that the human brain's "wanting" system strongly activates when an asset goes up in value, driving us to buy more, says Paul Zak, director of the Center for Neuroeconomics Studies at Claremont Graduate University.

So even if you've sworn that you'll never again put the bulk of your wealth in a single asset, like a house or a stock fund, what's to stop your brain from getting excited when the next "big" thing rolls around?

Enlist your financial adviser, your partner or a trusted friend to dampen your excitement, says Michael Ervolini, head of the Boston behavioral finance firm, Cabot Research.

While a broker or financial adviser may not actually be able to prevent you from dictating that you'd like to sink your money in one investment type, you can ask him, even put it in writing, to dissuade you.

Cleveland financial planner Kenneth Robinson says his clients sign off on a written asset allocation plan, which helps them stick to the resolve to diversify.

And, says Ervolini, especially if you invest with a partner who has a vested interest in the success of your investment plan, establish a pact that you won't make moves unless you've both talked it over.

Finally, for those who can afford to set aside some "play" money, a separate fund can placate the desire to follow the hot trend without "betting the farm," says Zak.

Regret 4: I didn't read the fine print on my loan.

Outsmart yourself: If you're one of those homeowners with a mortgage that seemed cheap initially but has since proven ridiculously expensive, chances are "you were just following what you thought was acceptable wisdom" when you took the loan, Ariely says.

"Figuring out how to borrow is very complex," he says. Instead of delving through loan documents and plotting out just how much payments can rise, consumers are lured into complacency when they hear platitudes like "you can always refinance" or "if you're moving again in a few years, you don't have to worry."

Make a pact with a partner or friend that you won't take on debt without reading all the fine print, says Ervolini.

More from CNBC and Bankrate.com ....

The federal government aims to make that easier with proposed reforms, like requiring a lender to give a one-page outline of a loan's risky features.

Still, complex loans will likely stick around. Ervolini says, "If you are not willing to read and really understand what a loan is all about, pledge that you'll go with the plain vanilla option."

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