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Wednesday, 27 July 2011

US Home Price rise fails to lift housing gloom






A realtor and bank-owned sign is displayed near a house for sale in Phoenix, Arizona, January 4, 2011. REUTERS/Joshua Lott

WASHINGTON | Tue Jul 26, 2011 8:03pm EDT
 
(Reuters) - Prices for new single family homes rose to a five-month high in June even as sales slipped, but recovery for the broader housing market continues to be frustrated by an oversupply of properties.

The Commerce Department said on Tuesday the median sales price for a new home increased 5.8 percent last month to $235,200. Compared to June of last year, prices rose 7.2 percent.


Indications that home prices were starting to stabilize were also evident in the S&P/Case Shiller survey, whose composite index of prices in 20 metropolitan areas was flat in May after a 0.4 percent gain in April.
Analysts, however, said firming prices would likely be short-lived given the huge supply of homes on the market.


"Sales are the key and the surge turns into a torrent only if the sales firm or much more time passes," said Michael Montgomery, a U.S. economist at IHS Global Insight in Lexington, Massachusetts.


New home sales fell 1 percent to an annual rate of 312,000 units in June. A report last week showed sales of previously-owned homes fell to a seven-month low in June, but average prices rose 0.8 percent to $184,300 from a year ago.


SPRING FLUKE?


"We have been expecting an increase in home prices in the spring as distressed sales become a smaller share of activity amid a seasonal pick-up in voluntary sales," said Michelle Meyer, a senior U.S. economist at Bank of America Merrill Lynch in New York. "This will likely reverse in the winter, dragging down prices again."


A glut of homes for sale as the economy struggles with a 9.2 percent unemployment rate is weighing on the housing market. There were about 3.77 million used homes on the market in June, plus properties in foreclosure.


The housing market is just one trouble spot for an economy that has been trapped in a soft patch since the beginning of the year.


But there is also hope U.S. economic growth will regain momentum in the second half of the year, and other data on Tuesday showed consumers grew more optimistic about the future this month.


The Conference Board's index of consumer attitudes rose to 59.5 from 57.6 in June, beating economists' expectations for a reading of 56.0.


Still, confidence remains at low levels and consumers grew less optimistic about current conditions. 


Confidence could be shattered if the U.S. Congress fails to raise the country's borrowing limit, which could trigger a debt default and downgrade of the United States' coveted triple-A credit rating.

The stalemate in debt talks pushed down Wall Street stocks for a second straight day and drove the dollar downward against a basket of currencies. But prices for U.S. government debt rose as investors still regard Treasuries as one of the lowest-risk investments out there.




COMPANIES WORRIED


U.S. corporations are concerned about the recovery, which has struggled to gain momentum after the 2007-09 recession with the drag of high unemployment and slack demand.


United Parcel Service Inc, the world's largest package delivery company, gave a cautious outlook and cited the stalled debt talks as a threat to confidence.


Ford Motor Co, announcing profits that topped Wall Street expectations, said it now sees U.S. sales for the full year at the bottom end of its previous forecast of 13 million to 13.5 million vehicles.


The government is expected to report on Friday the economy grew at a 1.8 percent annual rate, according to a Reuters survey, after a tepid 1.9 percent pace in the first three months of the year.


A Reuters survey of economists put the prospect of a new recession at one in five, and 38 of the 54 economists polled said they expected the United States would lose its triple-A debt rating from at least one ratings agency.


(Additional reporting by Leah Schnurr in New York, Editing by Neil Stempleman, Gary Crosse)

Related Video



Investigative Journalism and Reporting, Strategies for Its Survival





Preserving investigative journalism

Plain Speaking - By Yap Leng Kuen

THE frenzy to uncover further “journalistic transgressions'' at the Rupert Murdoch news empire is mounting from London to Australia to the United States there are calls to investigate any other unethical moves.

The recent phone hacking scandal in London revealed that over-enthusiastic journalists have either forgotten their limits or become too bold while their supervisors glossed over their news gathering practices.

It is true the media has to look internally at its ethical standards and ask several questions; to what extent it is hurting people rather than helping; how does one balance the duty to produce a story with other human factors at play; what are the boundaries of “responsible journalism''?

In countries where regulators are constantly monitoring the media, journalists tend to play a more cautious game which does, at times, border on self-censorship.

There are constant reminders of the need to report in a “responsible'' manner. Journalists often struggle in the wake of these reminders and public criticism of a “cowed'' press.

A major consolation is that following this cautious attitude, the publication remains ongoing and jobs are still intact.

In the British phone hacking incident, were the regulators caught “napping'' in the sense that certain journalists had been allowed to push stories at all costs, without questions asked?

The Western press prides itself on freedom to information, and throwing in requirements like “ethical practices'' can result in confusion.

If those journalists who had broken important stories had stuck to being “goody two shoes,'' they might not have achieved the level of success in exposing wrongdoings and other kinds of fraud.

This is not to condone illegal tactics by the press but the nature of investigative journalism is such that it needs some amount of freedom for the information to flow in.

In coming down on the media, regulators should therefore be mindful of the role that investigative journalism plays.

They should not get carried away and impose too many restrictions on the media. For one, it will indicate their level of insecurity and desperation.

Owners and supervisors of media companies also have to behave more responsibly. They ought to be conversant with the laws and rules of journalism, check on their writers all the time and not let slip any suspicious looking piece of information.

On hindsight, this would be easier said than done. But these are practices going on in a lot of media organisations.

At the end of the day, we in the media would have to search our conscience on the implications of all our actions as we are answerable to many parties the Almighty, readers, bosses and society at large to name a few.

It is, as the saying goes, mindfulness all the way.



Investigative Reporting: Strategies for Its Survival

New funding mechanisms and newsroom changes are needed if watchdog journalism is to thrive in small and midmarket news organizations.

By Edward Wasserman

The future of investigative reporting is linked inextricably to the general economic crisis affecting U.S. journalism. That should be obvious, and by saying that I’m not suggesting that investigative work doesn’t have unique vulnerabilities: It’s expensive, offers uncertain payback, ties up resources that could be used in more conventionally productive ways, fans staff jealousies, offends powerful constituencies (including touchy readers), invites litigation, and usually comes from the most endangered class in the newsroom, the senior reporters whose ranks are being thinned aggressively through forced retirement.

Still, for all its uniqueness the tottering support for investigative work needs to be understood within the larger collapse of advertising-funded journalism. The marriage between consumer advertising and news, which dates in this country from the advent of the penny press in the 1830’s, is crumbling. The principal reason is less related to circulation declines—daily newspapers, for instance, still dominate their metro markets—than to the exuberant flowering of Internet sites, some devoted to information and entertainment, others simply to sales, that offer advertisers much more efficient ways to find and reach customers than riding alongside news reports into their homes.

Daily newspapers, for all their general interest posturing, had come to rely chiefly on a narrow range of business sectors—automotive, help wanted, home sales, and department stores—and these sectors have either consolidated or are being drawn away by highly effective, narrowly targeted Web sites. (They’re also being pummeled by the current macroeconomic hard times, but those will pass. Those other developments won’t.)

None of this is cheery news for news operations, but the cost to them of hanging onto advertising as they migrate online isn’t cause for cheer, either. Web-borne technologies enable advertisers to know, with unprecedented precision, who is reading what and where else they have been on the Internet. Hence, advertisers are, or soon will be, able to forecast the audience for certain kinds of content and to base their ad placement decisions accordingly. And what advertisers know, news managers will have to learn. That means editors are not far from being able to determine the revenue value of certain kinds of news and calibrate coverage with that in mind. That’s not an appealing prospect in general for those of us who value independence in news decision-making; nor does it bode well for investigative work to be subjected to narrow, profit-and-loss arithmetic.


The Fort Myers News-Press invited readers to help them investigate a story about an expansion of the water, sewer and irrigation system, in a method known as crowdsourcing.

Finding Investigative Resources

So journalism in this country faces a general problem replacing the advertising subsidies on which it has flourished for nearly two centuries. And investigative journalism has a particular canary-in-the-coal-mine problem of being acutely sensitive to thin financial air.

The challenge is to find new mechanisms to provide investigative journalism with the resources it needs, especially in the small and midmarket operations that are being starved of the kind of reporting that has traditionally held local political and business establishments in check.

Before we turn to some of those mechanisms, two points.
  1. These resources aren’t exclusively financial. They include in-kind subsidies, for instance in the form of labor that is donated outright or sold at a fraction of its value to news outlets.
  2. Preserving investigative journalism may not be identical with preserving investigative journalists. The overall concern should be nurturing a communitywide capability to unearth, report and explain so as to hold major institutions accountable, address injustice, and correct wrongs. Full-time professionals will have their place, but they won’t occupy it alone.
Here are some of the more promising dimensions of the emerging regime under which investigative reporting can survive and flourish. Some are more feasible than others; some are already taking shape. Each has its drawbacks, but they have in common an overall direction of marshaling support from a wider array of sources than we’ve seen under the ad-support model.

Mobilize the Public: The 2006 “crowdsourcing” project of The News-Press
in Fort Myers, Florida is frequently cited as an impressive example of a local paper serving as agent provocateur and communitywide reporting manager. The stories concerned excessive impact fees levied on residents in connection with their water utility expansion. Much of the ensuing investigation, which led to a rollback of assessments, was conducted by knowledgeable irregulars who gathered and analyzed evidence of municipal anomalies the paper reported and posted.

There’s no use dwelling on the huge supervisory challenges within a news organization that are raised by such crowdsourcing, nor on the need to make sure that those involved understand basic principles of journalistic professionalism. A larger concern is whether such an approach is self-limiting in ways that aren’t especially desirable.

The Fort Myers case seems to exemplify the kind of work that’s ripest for crowdsourcing: where the main reporting problems are empirical and analytical, not conceptual or political, and where the goals of the amateur newshounds—saving money—are durable. The danger is that assigning priority to projects susceptible to crowdsourcing could mean giving short shrift to highly worthwhile inquiries whose constituencies are less easily mobilized, less mainstream, and less richly skilled. In short, by institutionalizing a commitment to crowdsourcing are news organizations introducing a durable tilt toward reactive, pocketbook projects that appeal to college educated, professional readers?

EDITOR'S NOTE
“Using Expertise From Outside the Newsroom,” by Betty Wells, in the Spring 2008 issue of Nieman Reports, describes other efforts within The News-Press newsroom to build on this model of engaging citizens in investigative efforts. Read the article » 


Moreover, when a newsroom incorporates outsiders into the process, what they have to say has to be listened to, and an appropriate role must be found for them in shaping the coverage they contribute to. What if your amateur sleuths want to expose employers who hire illegal immigrants, or bird-dog suspiciously foreign workers back to their apartments to see who’s renting to them? Do editors allow crowdsourcing to become mobsourcing, or do they roll up the carpet on the empowerment that was promised to these helpers?

That said, those are good problems to have. The potential gains from leveraging in-house investigative and supervisory staff by enlisting communitywide resources on matters that require laborious empirical work are abundant and enormously appealing.

Relax the Full-Time Employee (FTE) Newsroom Model: News operations aren’t sustaining themselves with revenues from their own operations on anything like the scale that communities need to be covered adequately. What follows may sound heretical, but one response is to make greater resources available by encouraging the newsside to incorporate the practice pioneered by op-ed pages, which have long been dominated by outside contributors. They’d do this by creating procedures and mechanisms to promote strong investigative work from nonjournalistic professionals who bring to bear their knowledge within the community at large.

Though similar to crowdsourcing, this takes us in a slightly different direction, toward a more nimble style of newsroom management and a more serious grant of operational autonomy to outsiders. As one source of such outsiders, consider institutions of higher education: One of the paradoxes of the current economic straits of the news business is that while news outlets are suffering, university journalism programs are booming. (Travelers are familiar with a similar paradox: every airport you use is expanding, every airline you fly is near bankruptcy.) Many of the senior journalists who are being chased from their newsroom berths are being welcomed on campuses, which are benefiting from the increasing largesse of wealthy baby boomers who view donations to educate tomorrow’s journalists as highly worthwhile.

Those new academics could continue to produce journalism. A good many lawyers and accountants too have serious investigative training; some can even write. The problem is that news operations—with some exceptions, notably long-form magazines—are neither managerially suited nor culturally disposed to routinely incorporate the work of people who aren’t FTEs.

That incapacity denies them a ready source of subsidy, since the potential contributor’s reporting is essentially paid for by his or her day job. Naturally, that dependence may raise serious conflict of interest problems, much like those that op-ed pages traditionally handle so poorly. It also requires addressing novel quality control issues.

But given that the need now is to perform a thorough inventory of the investigative resources available in a community in order to harness them so as to keep the toughest and most trenchant journalism alive, ignoring the capabilities of knowledgeable, eager and capable professionals of all kinds would be foolish.

RELATED ARTICLE
"Going Online With Watchdog Journalism"
—Paul E. Steiger, ProPublica Editor
 

Endow Chairs: Much has been written about the national nonprofit journalism outfits that either make grants to enable reporters to do major long-term projects or, in the case of ProPublica, use foundation funding to employ top-tier investigative aces and direct them onto stories of national scope. A different approach to using nonprofit money would apply a model familiar to the academic world and be built around endowed investigative positions created on the staffs of small and midmarket news operations, which have been decimated by the declines in classified, home sales, and automotive advertising.

For example, a single national donor, giving only half the $10 million annual stipend that enables ProPublica to employ 20-some investigative reporters in Lower Manhattan, could seed 100 newsrooms with $50,000 apiece to partially fund investigative chairs. (Partial funding would ensure a local buy-in and enable the employer to adjust the reporter’s total compensation to its newsroom pay scale.) In addition to that seed money in the provinces, some modest funding could go into creating a centralized supervisory or advisory capability, perhaps vested in ProPublica or one of the existing investigative shops. The objective would be to supplement the supervision the reporter gets on site from editors who are deeply knowledgeable about local realities with the expertise of seasoned investigative journalists.

What’s important is recognizing that investigative work doesn’t solely mean national stories. Fundamental to the civic role of small and midmarket news organizations has been their work on zoning scams, courthouse favoritism, environmental degradation, political cronyism, and all manner of wrongdoing that may not register on a scale of national significance but that shapes municipal life in powerful ways. The evisceration of local newsrooms risks creating vast free-fire zones for corruption, which no amount of attention to national affairs will restrain.

Tap Into Community Resources: Similarly, nonprofit initiatives need not be exclusively national, either; they could take the form of citywide foundations bankrolled by local donors either to make grants for individual projects or to provide funds for a sustained journalistic operation comprising full- or part-time staff.

That fundraising effort need not be confined to soliciting big contributors. Investigative reporting produces tangible benefits to communities, even if those civic benefits can’t be readily monetized through the private marketplace because they can’t be priced effectively. But that doesn’t mean they aren’t real and valuable. What is chasing a crooked mayor from office “worth?” If asked, one citizen might say that having an independent team of skilled investigators whose mandate is to root out and expose local corruption is worth, perhaps, $100 a year to her; another might put the figure at $50, still another at $1,000. But there is some value that each of us would attach to that benefit. The continuing success of listener-supported public radio suggests that audiences recognize and, under certain circumstances, are willing to pay for similar informational benefits. Some bloggers, too, have also been successful in fundraising of this sort.

The challenge is to create the funding mechanisms and position the appeals to enable community resources to be pooled reliably and effectively. Crowdsourcing should not be confined to research and reporting; the crowd needs to be enlisted as a source of financial support, too, which has already been happening at Minnpost.com, which was launched in November 2007. In a midsummer message, MinnPost CEO and Editor Joel Kramer reported to readers that the online publication has “932 members, people who have decided to support financially the nonprofit journalism that MinnPost.com provides.”

Create Specialized Spinoffs: Intense scrutiny of powerful institutions and important social developments is a difficult undertaking for which some people will indeed pay quite a lot, especially if that audience gets to see the findings while they’re fresh and hot. This inside-baseball model is key to the success of the newsletter business and other premium informational services that continue to flourish in spite of the current wisdom that the subscription model is dead. Might that be a model to enable certain areas of investigative work to continue—sell the reporting as a stand-alone publication to the people who are willing to pay for it?

Many journalists will find it distasteful to propose that a news operation might devote a portion of its resources to reporting that will be denied to readers who don’t specifically subscribe to it. (The objection is ironic in view of the eagerness with which news organizations are dicing their broad-gauged audiences into vertical microslivers of neighborhood, age, profession, hobby and any other social descriptor that seems to hold appeal for advertisers. Such verticality is expressly intended to provide specific audiences with some information and withhold it from others. Perhaps because the information is innocuous, the practice isn’t objectionable.) Still, if this proposal meant that important information would be kept secret, the idea would be ethically problematic.

But that’s not the case. The more typical practice of specialty publications is to keep their subscribers satisfied by ensuring them a first look at important findings; the publications themselves are eager to see their work trumpeted into the public domain, which ratifies their importance and reaffirms their subscribers’ commitment.

Moreover, what’s the choice? If the alternative is that the reporting won’t be conducted at all, submitting to a two-step process—first to subscriber, then to general public—is plainly preferable. Having a pair of investigative sleuths prowling the statehouse and reporting on shadowy legislative maneuverings for 2,000 subscribers who pay $500 a year may not be an ideal response, but it sure beats shutting the capital bureau or assigning a skeletal staff to knee-jerk stenography.

In sum, keeping alive the flame of investigative—or, as others prefer, accountability—journalism has never been easy, and the slow-motion collapse of U.S. journalism’s advertising dependency has made it harder than ever. New sources of support need to be devised, and the community’s reservoirs of skill and energy, as well as money, need to be inventoried and tapped. But this is possible. And the consequence may be a richer and more fully responsive capability for investigation, exposure and reform than was possible under the vanishing old regime.


The New York Times creates newsbooks by reprinting some of the newspaper’s investigative series. The newsbooks are sold through their online store.

Edward Wasserman is Knight Professor of Journalism Ethics at Washington and Lee University. A veteran editor and publisher, he writes a media column for The Miami Herald and Palm Beach Post that is distributed nationally by The McClatchy-Tribune wire.

Tuesday, 26 July 2011

The world is run by Tiger Wives, Tiger Moms





The world is run by Tiger Wives

Wendi Deng is not alone in lashing out when her spouse is under fire.

Wendi Deng Murdoch, Cherie Blair and Melania Trump are formidable in defence of their husbands-The world is run by Tiger Wives
Wendi Deng Murdoch, Cherie Blair and Melania Trump are formidable in defence of their husbands Photo: REX FEATURES/GETTY,By Cristina Odone

The hearings were beginning to pall. What had started as the trial of the media’s biggest mogul was settling into the siesta of the patriarch: Rupert Murdoch seemed to be talking in his sleep, while James Murdoch fanned away the MPs’ annoying questions, lest they disturb Dad.

Viewers longing for drama felt short-changed. None of the lawmakers had laid a glove on the media mogul. And then – splat! – the (slapstick) comedian Jonathan May-Bowles threw a “pie” of shaving foam at Murdoch Senior and unleashed the Tiger Wife.

In an instant, Wendi Deng, Murdoch’s Chinese-American spouse, leapt to her feet and sprang past bystanders to pummel her husband’s assailant. MPs, Murdochs and media types could only gape, electrified as proceedings fast-forwarded from Perry Mason to Crouching Tiger, Hidden Dragon.

By the time Rupert Murdoch’s bodyguard had reached his master, the 42-year-old Wendi had landed a sensational right-hook on her opponent.

She then gained her husband’s side, and gently cleaned his face of foam. Within minutes, Deng was the toast of Twitter: hailed as a “smack-down sister” in her native China, and as a heroine and stunning show-stopper everywhere else.

Those who know Wendi well (and they include Tony Blair, Mark Zuckerman and Bono) won’t have batted an eyelid at her jaw-dropping performance. Rupert Murdoch’s third wife has form.

A volleyball player from southern China doesn’t climb to the top (Murdoch’s personal fortune remains a healthy $340 million) without fierce determination. Other people on Wendi’s ascent have already experienced her fury.

The first victim was Joyce Cherry, a pleasant American who, together with husband Jake, befriended Wendi during their trip to China. Impressed by the teenager’s brilliance and thirst for self-improvement, Joyce and Jake sponsored Wendi’s application for a student visa to America. Alas, 19-year-old Wendi soon bewitched Jake, who left poor old Joyce to marry their young protégée.

Victim number two was Jake himself: his usefulness came to an end a few months later when Wendi, now armed with the right papers, won a place to study business at Yale University.



Days from graduation, Wendi had a job at the Murdoch-owned Star TV, where she quickly caught the Big Boss’s eye. Hence the third corpse in the trail to marry Murdoch: Rupert’s second wife, Anna.

Within 17 days of his divorce, Wendi wed Rupert. If the Wendi house conceals a few skeletons, it also offers glimpses of her protective instincts.

Conscious of the 38-year gap between them, Wendi has placed Rupert on a tough regime of 6am weightlifting, washed down by a fruit and soy protein cocktail. She wags her finger at his workaholic schedule and has hired a personal trainer to put him through his paces (even at the price of her husband turning up on front pages in baseball cap and tracksuit).

None of this marital nurturing distracts Wendi from pursuing her own agenda: she has just released a film, Snow Flower and the Secret Fan, that aims to promote a more positive image of China.

She enjoys a glittering social life, attending film premieres and art gallery openings. And she remains her husband’s chief adviser on his business in China.

Yet Wendi the film producer, like Wendi the business consultant or Wendi the mother of Rupert’s young daughters Chloe and Grace, has failed to fire our imagination. But Wendi Deng, invincible Tiger Wife, has transformed Rupert Murdoch’s image around the globe – from dodderer in the dock to prized partner in his wife’s life.

In a culture that mourns marriage as a moribund institution, one spouse leaping passionately to the other’s defence fills us with admiration. Even the most hardened cynics couldn’t help thinking, as the warrior in a pink blazer bounced into the ring: “Wow, she really believes in this union!”

Wendi Deng’s slap didn’t just scotch rumours that hers was a sham marriage: a purely trophy wife would have winked at the assailant for giving the old man a heart-stopping scare. With a quick right hook, she jumped to the head of the queue of the defenders of matrimony. It is a short but colourful roll-call that stretches from Cherie Blair, to Anne Sinclair (aka Mme Strauss Khan), Melania Trump and Carla Bruni-Sarkozy.

From the moment she moved into No 10, Cherie Blair was under constant attack for her (supposed) greed, stinginess, and self-importance. She let the criticisms bounce off her like spring rain. But let anyone touch her Tony, and Mrs Blair roared. She hissed at the ungrateful electorate that did not deserve a paragon of virtue like her husband; she gnashed her teeth at the sleazy media that insinuated Tony was a disappointment.

Her manner resembled the termagant’s fury rather than the bride’s solicitude, but no one could doubt Cherie’s heartfelt loyalty. It won her few fans: among the cheats and cuckolds of Westminster, the sight of a prime minister’s wife defending her husband was unusual; it also reassured voters that despite new Labour’s destruction of cherished institutions from the House of Lords to foxhunting, marriage would remain intact.

Far more testing has been Anne Sinclair’s lot. When her charismatic husband Dominique Strauss-Kahn was arrested on rape charges in New York, the French TV journalist sprang to his defence: “I do not believe for a single second the accusations levelled against my husband.” She flew to stand by her man and stumped up the $1 million bail to move him from prison to his plush Manhattan apartment.

Such wifely devotion may yet save the former IMF chief’s political career: his wife’s total support, as much as the derailing of the case against him, may prove a great boost to DSK’s credibility as a presidential candidate.

Her counterpart in the French presidential contest, Carla Bruni-Sarkozy, also wants to show the world that she looks out for her husband’s interests. The First Lady of France, pregnant but still displaying every sign of focus and competitiveness, has imposed a culture vulture’s menu on her philistine hubby: he is to watch films by Alfred Hitchcock, as well as Russia’s Andrei Tarkovsky; and read the French classics, from Balzac to Hugo.

Driving this self-improvement, say insiders at the Elysée Palace, is Carla’s ambition: she wants her man to be re-elected, and fears his present lowbrow image won’t do.

Nor should we forget Melania Trump, fearlessly vocal in her millionaire husband’s defence: Donald Trump is “brilliant”, everyone is envious of his success, and America should be so lucky to have him as their Republican Party candidate.

But Mrs T also gives us a revealing insight into their marriage when she confides that she has two children: “I have a big boy, Donald, and a little boy, Barron. I take care of both very well.”

Tiger Wife often needs to play Tiger Mother, it would seem.

The Tiger Wives’ Club is small but perfectly informed: these women know that their husbands need their commitment and support. In her eagerness to make her man shine, the Tiger Wife will disarm any assailant. She knows that her spouse is less than he seems; and that she, in fact, is rather more. She’s plucky; he’s lucky.

Source: The Daily Telegraph

US Debt ceiling plan counts on war games savings






Budget games: Debt ceiling plan counts on war savings

@CNNMoney 
military-spending.gi.top.jpgWith the wars already winding down, should the savings count toward a debt deal?

NEW YORK (CNNMoney) -- Senate Democrats want to cut an eye-popping $1 trillion in war spending over the next 10 years.

The proposal is part of the plan Senate Majority Leader Harry Reid announced Monday to raise the debt ceiling through 2013 and slash $2.7 trillion overall.

But many Republicans aren't likely to buy it.

The argument goes like this: Reid's proposed cuts for spending in Iraq and Afghanistan aren't real because Democrats are working off an inflated number that assumes the wars will continue at full tilt for the next decade.

And since the Obama administration has already started to wind down the wars, the extra money was never going to be spent, and shouldn't count as a cut.

"That's going to be a tough sell in some circles," said Douglas Holtz-Eakin, a former CBO director and president of the conservative American Action Forum. "They're not going to be viewed as real spending cuts."

Indeed, Sen. Jon Kyl, the No. 2 Senate Republican, called it "phony scoring."

No deal on debt ceiling

Claims of budget savings often center around which budget "baseline" lawmakers are using for comparison. And Reid is using the Congressional Budget Office baseline as his starting point.

Because of the rules Congress itself has set, the CBO is required to take current war funding levels in Iraq and Afghanistan and extend them far into the future. Plus inflation.

"The way the CBO baseline is calculated is real simple," said Holtz-Eakin. "You take what is on the books and extrapolate at the rate of inflation."

But that isn't the best reflection of reality. War spending is at elevated levels at the moment. And it should soon decline. A lot.

The Obama administration has already announced plans to bring a large number of troops home. That will save tons of money, and it will happen whether Reid's plan is approved, or not.

In its January fiscal outlook, the CBO itself laid out the difference.



Why you care about a debt downgrade

In 2010, there were an average of 215,000 U.S. troops deployed for war-related activities. If that number were to drop to 100,000 in 2013 and 45,000 in 2015 and beyond, the savings would be significant.

"Under that scenario, total discretionary outlays for the period from 2012 through 2021 would be $1.1 trillion less than the amount in CBO's current baseline," the report said.

Travis Sharp, a fellow at the Center for a New American Security, said it is common for both parties to count savings this way.

"Both Democrats and Republicans tend to count cuts in planned future spending as real cuts," Sharp said. "And both parties tend to use the baseline that casts the best light on their policies."

If Republicans don't buy that the cuts are real -- they will have yet another reason to reject Reid's deal. One of their most steadfast demands has been a debt ceiling hike that is matched dollar for dollar by spending cuts.

Sen. Chuck Schumer said Monday that Republicans have to accept the savings as legitimate. But clearly, he anticipated the objections from the other side of the aisle.

"We know that some Republicans will quibble over these savings, but they have no leg to stand on," Schumer said. "If conducting the wars adds to our debt, it's undeniable that winding down the wars delivers savings."

Schumer's argument rests in part on the fact that Republicans counted the same savings as part of Rep. Paul Ryan's budget that was approved by the House earlier this year.

"They never criticized such accounting then," Schumer said. "It's hard to see how they could do so now." 

Monday, 25 July 2011

Australia and Malaysia sign 'refugee' deal






Human Rights Watch slams agreement to send 800 asylum seekers in Australia to Malaysia in exchange for 4,000 refugees. 
Demonstratrs protest against Malaysia's treatment of refugees and asylum seekers [Reuters]

Australia and Malaysia have signed a deal to send 800 asylum seekers in Australia to Malaysia in exchange for the resettlement of 4,000 refugees.

The 4,000 refugees are to be resettled in Australia over a four year period, with that country bearing the cost of their tranfer and settlement.

Hishammuddin Hussein, Malaysia's interior minister, and Chris Bowen, Australia's immigration minister, formally signed the deal at a Kuala Lumpur hotel on Monday.

The 800 asylum seekers sent to Malaysia will be placed in a "holding centre" for six week before being allowed into the community, Hussein said.

From midnight on Monday, the next 800 asylum seekers arriving in Australia by boat will not be processed there, but will be transferred to Malaysia, Julia Gillard, the Australian prime minister said.

The government said they will receive no preferential treatment in the processing of their claims or arrangements for resettlement.



'Dumping ground'

Ahead of the signing, Brendan O'Connor, Australian's interior minister, said the deal represents "an historic and innovative approach" to undermining the people-smugglers' business model.

"We want to treat people fairly," he told ABC Television, but refused to confirm a report that those shipped to Malaysia would be allowed to work.

However, the deal has drawn criticism because Malaysia is not a signatory to the UN convention on refugees.

"Australia is using Malaysia as a dumping ground for boat people it does not want and in the process walking away from its commitments to follow the 1951 Refugees Convention," Phil Robertson, the deputy director at the Asia division of Human Rights Watch, said.

"Human Rights Watch has publicly called on UNHCR to not endorse this agreement because this is a deal that would allow Australia, a country that has signed the Refugee Convention, to devolve its obligations to another country that has not signed the Refugee Convention.

"This would set the worst type of precedent and we’re concerned it could start a wider erosion of protection for refugees throughout the Asia-Pacific region."

The UNHCR is not a signatory to the agreement, however appreciates that both governments consulted with the agency.

"The UNHCR’s preference has always been an Arrangement which would enable all asylum-seekers arriving by boat into Australian territory to be processed in Australia. This would be consistent with general practice," the agency said in a statement.

"The critical test of this Arrangement will now be in its implementation both in Australia and Malaysia, particularly the protection and vulnerability assessment procedures under which asylum seekers will be assessed in Australia prior to any transfer taking place."

Protests against agreement

In Malaysia, demonstrators gather outside the signing ceremony to protest against the country's treatment of refugees and asylum seekers.

One demonstrator holds up a placard that reads, "Malaysia's immigration laws still don't recognise 'refugees' and 'asylum seekers' - where's the guarantee for protection?"

The Australian government, which has a policy of mandatory detention for asylum seekers until their claim for refugee status is resolved, is facing rising tensions in some of its detention centres over the processing of claims.

The migrants are held for months at Christmas Island detention centre, about 1,500 miles from the Australian mainland, and in other detention facilities.

About 200 people protested against the impending agreement outside Sydney's Villawood immigration detention centre on Sunday.

The immigration department said about 60 inmates were taking part in a peaceful protest at the Scherger detention centre in Queensland, with about 50 of these engaged in voluntary starvation.

 Source:
Al Jazeera and agencies Newscribe : get free news in real time 

Talents on the move





Local accountants attracted by foreign greener pastures

By LIZ LEE lizlee@thestar.com.my 

 KUALA LUMPUR: Despite unwavering interest in accountancy courses at universities and colleges, mid-tier accounting and auditing firms are finding it difficult to hire and retain their accountants.

The problem: the outflow of local talents to foreign “greener pastures”.

Baker Tilly International chief executive officer and president Geoff Barnes told StarBiz that something needs to be done about this, as “a strong audit profession underpins an economy with good corporate governance, a strong capital market and an economic environment that can cross borders.”

Barnes said the accounting profession has always demanded the brightest of people globally and that good firms have always had this “war for talent, because we are all looking for the best people”.

Barnes (left) and Heng stressing on the importance of retaining accounting talents.
 
Local member firm, Baker Tilly Monteiro Heng (BTMH) chief executive partner Heng Ji Keng said many Malaysian accounting graduates see better opportunities in Hong Kong, Shanghai, Shenzhen, Singapore and Australia.

Heng added that many graduates left mainly due to the salary disparity. To counter this, he said firms needed assistance from the Government as “a word from the Government is better than a thousand words from practitioners”.

“We need to slowly bridge the gap between the salary we pay here and that offered in the countries attracting our talents. We need assistance from the regulators to impress upon clients that low fees also affect the quality of an auditing job,” Heng said.

A fresh graduate can earn up to RM100,000 per annum in China, around RM85,000 per annum in Singapore while Australian firms pay about RM160,000 per annum. Locally, they would earn about RM30,000 only.



SJ Grant Thornton (SJGT) managing partner Datuk Narendra Jasani said an estimated 500 accounting graduates out of 1,500 from local universities leave the country every year.

Both firms, BTMH and SJGT, said the Government could further benefit the country's accounting profession by liberalising immigration policies.

Heng said the many foreign students studying here could be a good source of accountants for local firms, provided the Government revises the related immigration restrictions.

“We must acknowledge their potential and train them to become qualified professional accountants,” he said.

Both Heng and Jasani suggested that the Government could look into giving foreign students a work permit of three to four years after their studies.

“To avoid disheartening our Malaysian accountants, a quota could be set for firms to employ no more than 20% foreign accountants,” Jasani further suggested.

Heng pointed out that another turn-off for young accountants to begin their career here is the difficulty in getting a licence to practise.

“The accountants have to go through about a decade of university education and training, topped off with a scrutinising interview that tests them on the technicalities of the industry before the Finance Ministry issues a licence,” Heng said.

Specifically, Malaysian accountants need three years for a university degree, three years of working experience, another three years of post-Malaysian Institute of Accountants membership and an interview to determine whether they would qualify for a licence. The tedious process and no guarantee of getting a licence to practise has become a deterrent to young accountants when embarking on their careers.

“We also have to change work procedures. One aspect is to change the audit methodolgy no more ticking and checking all the time but more thought-processing, overviews and comparative analysis which is more suited to the younger generation,” SGJT's Jasani said.

Grant Thorton International chief executive officer Ed Nusbaum said the rapid economic growth and expansion in the entire Asia-Pacific region has caused the shortage of talent.

“The demand is greater than the number of students graduating from universities and qualified experienced talent within the region. Whether you are talking about Malaysia, China or India, we need to attract people to the accounting profession,” he said, adding that dynamic firms also contributed to attracting young accountants.

“Being part of a growing organisation makes (one's career) interesting and employee retention is better because people see opportunities,” Nusbaum concluded.

Sunday, 24 July 2011

Don’t Get Caught Holding Dollars When The U.S. Default Arrives!






Addison Wiggin

WASHINGTON - APRIL 17:  Federal Reserve Chairm...Image by Getty Images via @daylife Greece can’t solve a problem of too much debt by taking on even more. We will note, however, that by some measures, the United States is even more deeply in hock than Greece.

Greece’s debt-to-GDP ratio is 143%. America’s is officially 97%. But the $14.3 trillion national debt, stacked up against a $14.7 trillion economy, doesn’t tell the whole story. Look at these numbers:

• $14.3 trillion: “official” national debt
• $5 trillion: Amount Uncle Sam is on the hook for Fannie Mae and Freddie Mac
• $62 trillion: Total liabilities and unfunded obligations for Social Security and Medicare

That doesn’t count the black box of bailouts.

We know how much the Federal Reserve doled out in emergency loans: $16.1 trillion between Dec. 1, 2007, and July 21, 2010. We know that because yesterday the Government Accountability Office completed its first-ever audit of the Fed, made possible largely through the persistence of Rep. Ron Paul (R.-Tex.) making that audit, however incomplete, the law.

What we don’t know is how much of that has been paid back.  “We have literally injected about $5.3 trillion,” said Dr. Paul earlier this month during his questioning of Fed chief Ben Bernanke, “and I don’t think we got very much for it. The national debt went up $5.1 trillion.”

Bernanke did not challenge those figures.

“To get our overall fiscal gap under control,” writes Boston University professor Laurence Kotlikoff in Bloomberg, “the U.S. must cut spending or raise tax revenue by $20 trillion over the next decade, far more than either the president wants or the House Republicans seek.”



Yep: The latest number we see bruited in Washington is $3 trillion. Whatever the final number — and there will be a last-minute deal; there always is — it will be substantially less than $20 trillion over 10 years. The can will be kicked as it keeps getting kicked in Greece.

We note here that the total of outstanding credit default swaps on U.S. Treasuries crested $4.8 billion this week. Uncle Sam has now surpassed Greece in this category.

Measured in year-over-year change, America is number one: Net notional CDS outstanding grew 109%. That means there’s double the bets out there on a U.S. default compared with a year ago.

“You may not know this, but the U.S. has actually defaulted a number of times already,” writes Chris Mayer this morning. He cites five instances:

• 1779: The government was unable to redeem the continental currency issued during the Revolutionary War
• 1782: The colonies defaulted on the debt they took out to pay for the war
• 1862: During the Civil War, the Union failed to redeem dollars for gold at terms stated by the debt contracts
• 1934: FDR defaults on the debt issued to finance World War I, refusing to redeem it in gold. The dollar is devalued 40% against gold
• 1979: A bureaucratic snafu results in interest going unpaid on some small bills.

“With the exception of 1979,” Chris says, “which was mostly due to administrative confusion — the U.S. simply ran out of money each time. The end result was the dollar had to be devalued. Meaning it lost significant purchasing power.

“My guess is that the U.S. will default again. It may not technically be called that, but the only way for the U.S. to meet its financial obligations is to print a lot of money.”

What does that mean in practical terms?  In Greece, professor Savas Robolis at Panteion University in Athens reckons that by 2015, the average Greek employee and pensioner’s standard of living will have fallen 40% compared with 2008.

Even now, Americans are turning to their credit cards to pay for groceries and gas. According to First Data Corp., the volume of gasoline purchases put on credit cards jumped 39% over the last 12 months.
You don’t want to be the average American in a default scenario, whenever it arrives. Ray Dalio, the head of Bridgewater Associates, the world’s biggest hedge fund, puts that day in “late 2012 or early 2013.”

The Path to Debt in America by Addison Wiggin originally appeared in the Daily Reckoning.

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