“Man charged in pot case; ties to Tosa students alleged - Milwaukee Journal Sentinel” plus 4 more

It's a fine line Fed policymakers have to walk. They need to leave programs intact long enough to support the recovery but not too long as to unleash inflation later on.

For now though, inflation isn't a problem.

Despite some improvements, factories are still operating well below capacity, one force that should keep a lid on inflation. Other factors keeping prices in check include the weak job market enabling employers to avoid wage increases, and cautious shoppers making companies wary of raising costs.

As the recovery gains traction, however, the Fed will face more pressure to wind down some emergency programs.

At the central bank's meeting in August, policymakers said they would gradually slow the pace of a program to buy $300 billion in Treasury securities and shut it down at the end of October, a month later than previously scheduled. That program is designed to force rates down for mortgages and other consumer debt to get Americans to spend more. Roughly $294 billion has been purchased so far.

But the program's effectiveness has been questioned on Wall Street and on Capitol Hill. Critics have complained that the Fed appears to be printing money to pay for the government's spending binge.

Most economists think the Fed will keep the target range for its bank lending rate at zero to 0.25 percent through the rest of the year. That would keep commercial banks' prime lending rate used to peg rates on home equity loans, certain credit cards and other consumer loans at about 3.25 percent, the lowest in decades.

The goal behind leaving rates at super-low levels is to entice people and businesses to step up spending to aid economic growth.

After suffering a free-fall, the economy is growing at a pace of 3 to 4 percent in the current quarter, many analysts predict.

Factory activity is increasing. Home sales are firming and prices are edging up in some cases. Consumer spending is stabilizing, and car-buying got a lift from the Cash for Clunkers rebate program.

But Bernanke warned that the pace of economic growth in the months ahead probably won't be strong enough to generate many new jobs and prevent the unemployment rate from rising. The rate hit a 26-year high of 9.7 percent in August and is expected to top 10 percent this year.

The house is no longer on fire, but that doesn't mean there aren't a couple of embers burning, said Richard Yamarone, economist at Argus Research. The Fed's job is not done yet.

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Stocks sway ahead of the Fed - CNN Money

Posted: 23 Sep 2009 08:24 AM PDT

NEWYORK(CNNMoney.com) -- Wall Street struggled near midday Wednesday as a stronger dollar pressured oil and gold prices and select stocks, and investors geared up for the latest policy news from the Federal Reserve.

The Dow Jones industrial average (INDU) lost a few points around 2 hours into the session, after ending the previous session at the highest point since Oct. 6, 2008.

The S&P 500 (SPX) index lost 2 points, or 0.2% after ending the previous session at its highest point since Oct. 3.

The Nasdaq composite (COMP) was little changed after ending the previous session at its highest point since last Sept. 26.

Investors are focused on the Federal Reserve, which concludes its two-day policy setting meeting with an announcement on tap for roughly 2:15 p.m. ET. The central bank is widely expected to hold the fed funds rate, a key short-term bank lending rate, at a level near zero.

However, what the bankers say in the much-scrutinized statement about the economic outlook will be key. Last week, Fed chief Ben Bernanke said that the recession is likely over, but the labor market still has a long way to go.

Investors will also be looking to see if they say anything about how they plan to eventually wind down programs that pumped trillions into the economy to cushion the blow of the recession.

One-year highs: The major gauges have repeatedly closed at near 1-year highs over the last two weeks. Despite rampant calls for a September selloff, investors have used any modest pullback as an opportunity to get back into stocks at a slightly lower level. Analysts say fears of having missed the boat on the rally are driving the latest spate of gains.

Since bottoming at a 12-year low March 9, the S&P 500 has gained 58.4% and the Dow has gained 50%, as of Tuesday's close. After hitting a six-year low, the Nasdaq has gained 69.2%.

Stocks have risen during this period on signs that the economy is slowly starting to recover and on extraordinary amounts of fiscal and monetary stimulus.

Airlines: American Airlines and US Airways Group both slipped after announcing plans to raise cash, dragging down the airline sector in the morning.

American said it has priced its offering of 48.5 million shares of common stock, as well as $400 million in five-year notes, with both offerings due to close Monday. The two sales should give American about $770.5 million after fees and expenses. American parent AMR (AMR, Fortune 500) fell 5%.

US Airways Group (LCC, Fortune 500) said it will sell 26.3 million shares of its common stock to Citigroup, the offering's underwriter, with the sale due to close Monday. US Airways fell 10%.

The NYSE Arca Airline (XAL) index lost 2%.

Other company news: General Mills (GIS, Fortune 500) reported higher quarterly earnings that topped forecasts and boosted its full-year outlook, due to strong sales of Cheerios, Trix and its other cereal brands. Shares rose over 4%.

Washington: Treasury Secretary Timothy Geithner told a House committee that U.S. economic growth appears to be picking up, but that reforms must be enacted to fix a broken system. He was testifying at a House Financial Services committee hearing on regulatory reform.

At least one million people could be eligible for an additional 13 weeks of unemployment benefits, following a House of Representatives bill approved Tuesday night. The Senate is expected to take up the issue soon, although it faces some questions about how it should be funded.

World markets: Global markets were mostly higher. In Europe, London's FTSE 100, France's CAC 40 and Germany's DAX all advanced in late trading. In Asia, the Hong Kong Hang Seng fell 0.5%, while Japan's market was closed for a holiday.

Currency and commodities: The dollar gained versus the yen and euro, bouncing after hitting a fresh one-year low against a basket of currencies in the morning.

The strength in the dollar dragged on dollar-traded oil and gold prices.

U.S. light crude oil for October delivery fell 71 cents to $71.05 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $2.90 to $1,012.60 an ounce. Gold closed at a record high of $1,020.20 last week.

Bonds: Treasury prices fell, raising the yield on the benchmark 10-year note to 3.45% from 3.44% late Tuesday. Treasury prices and yields move in opposite directions.

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PHIGroup Appoints New Board Member - Biloxi Sun Herald

Posted: 23 Sep 2009 08:24 AM PDT

LOS ANGELES, FRANKFURT and HANOI, Sept. 23 /PRNewswire/ - PHIGroup, Inc. (OTC Bulletin Board: PHIE, Frankfurt:PR7, www.phiglobal.com), a company engaged in the development of real estate and natural resources, consulting and mergers and acquisitions advisory services, today announced the appointment of Ghanshyam Dass as a new member of the company's Board of Directors.

Ghanshyam brings to PHIGroup over 32 years of experience with domestic and international banking and capital markets, and a keenly developed understanding of the complexities of these markets. He is extremely familiar with the regulatory and business environment in the U.S., the European Union, Southeast Asia, the Middle East, India and other major economic centers. While working for various organizations in different regions, he established close and mutually cooperative relationships with many banks as well as non-banking financial institutions, corporations, regulators and government departments.

PHIGroup Chairman and CEO, Henry Fahman, remarks, "Ghanshyam is an international banking and capital markets expert with a heart for emerging countries. I greatly enjoyed working with Ghanshyam in Asia, and believe that as a new member of our company's board of directors, he will augment our ability to better assist the companies in emerging economies that want to access international capital markets."

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China backs G20 coordination - Yahoo News

Posted: 23 Sep 2009 07:56 AM PDT

BEIJING/BRUSSELS (Reuters) – China offered some support on Wednesday to U.S. plans to build a more balanced global economy, as world leaders seek to agree ways to nurture a tentative recovery and prevent future crises.

The European Union unveiled its blueprint for an overhaul of the way banks and financial markets are policed, with plans for a banking super-watchdog and a pan-European supervisor that it hopes can be replicated on the global stage.

Leaders of the Group of 20 countries meet in the United States on Thursday and Friday, their third gathering since the collapse of investment bank Lehman Brothers a year ago, with their the focus now shifting from combating the worst recession since the 1930s to discussing how to prevent it happening again.

Central to the talks will be a U.S. plan to correct the world's economic imbalances by shrinking surpluses in big exporting countries like China and boosting savings in debt-laden nations including the United States.

U.S. President Barack Obama wants a framework of "mutual assessment" where the International Monetary Fund (IMF) would make policy recommendations on rebalancing to the G20 every six months, according to a paper obtained by Reuters.

"We approve of countries strengthening their macro-economic policy coordination and together pushing forward the sustainable and balanced development of the world economy," China's foreign ministry said.

However, it appeared to be much less sure about concrete coordinated policy action, saying advice from international financial bodies should be for reference only and that countries should decide on economic policies according to their own national conditions.

China's central bank governor Zhou Xiaochuan also said it was wrong to say China's high savings rate and trade surpluses were a cause of the financial crisis.

Analysts believe Obama's plan will meet resistance from China if it poses any risk to its economic growth.

EU BANKING PLANS

The European Union said its proposed banking super-watchdog would have the power to overrule individual countries, such as Britain, which is fighting to keep control over the centerpiece of its economy, the City of London financial center.

"Our aim is to protect European taxpayers from a repeat of the dark days of autumn 2008, when governments had to pour billions of euros into the banks," European Commission President Jose Manuel Barroso said in a statement.

"The European system can also inspire a global one and we will argue for that in Pittsburgh."

The rules, aimed at reforming an industry blamed by many for triggering the economic slump, need the approval of the 27 EU national governments and the European Parliament to take effect.

German Finance Minister Peer Steinbrueck accused London of doing its best to block stricter rules.

"There is clearly a lobby in London that wants to defend its competitive advantage tooth and nail," Steinbrueck said.

DEVELOPING COUNTRIES

Also up for discussion in Pittsburgh will be reforms to the IMF, trade policy, and global warming.

India's prime minister called for a strong warning against protectionism as he set out for the gathering.

Earlier this month, the United States slapped tariffs on Chinese-made tires earlier this month, reviving fears of a tit-for-tat round of protectionist measures that risk strangling trade and plunging the global economy back into recession.

"We would also like to see a strong message to emerge from Pittsburgh against protectionism in all its forms, whether trade in goods, services, investment or financial flows," Manmohan Singh said, adding the global economy was "not out of woods."

Developing nations are becoming increasingly vocal in calling for a greater role at international bodies like the IMF, and both China and Brazil repeated their support for this cause on Wednesday.

While the G20 meeting may signal another step in a long-term global power shift, investors will focus on hint as to how the United States and Europe plans to wind down massive emergency stimulus programs without destabilizing economies again.

"We believe that some level of global coordination is likely in the quarters ahead. This is particularly for central bank exit strategies which may be coordinated so as not to trigger adverse currency movements," Glenn Maguire, Societe Generale's chief Asia economist, said in a note.

"Yet, we remain skeptical on the ability to put into place a more rigid framework that would enforce a new economic world order," Maguire said.

British Prime Minister Gordon Brown said fiscal stimulus measures would remain in place "until we are sure that the economy has recovered.

The G20 will also discuss climate change, where rifts remain between rich and developing nations over how quickly to cut carbon dioxide emissions and who should pay.

A top White House adviser said on Wednesday the United States was still working on a possible deal with G20 partners to phase out subsidies for fossil fuels.

(Additional reporting from Reuters bureaus worldwide; Writing by Mark Potter; Editing by Mike Peacock)