Category Archives: Regulation

Warren Hits Banks, Expands Base to Solidify Senate Power

According to Bloomberg,

Elizabeth Warren, in her first year as a U.S. senator, has captured headlines by pressuring such industry titans as Goldman Sachs Chairman Lloyd C. Blankfein for transparency, including a Dec. 4 call for Wall Street banks to disclose their contributions to policy groups that provide financial analysis to Congress.

With less fanfare, she’s forging alliances with Republican Senate colleagues, expanding her political network in Massachusetts, and tapping her backers to help Democrats running for re-election in other states.

It’s a strategy that sounds a lot like one adopted by another woman who entered the chamber with a national profile that made her a lightning-rod for praise and derision as she was dogged by questions about her presidential aspirations.

“I think she’s followed a path not unlike that of Hillary Clinton, which is learn how to be a senator,” said Ross Baker, a political science professor at Rutgers University in New Brunswick, New Jersey.

“Clearly, she has decided not to be a liberal Ted Cruz, to learn the ropes, particularly in the area that she cares most about, which is financial services,” Baker said, contrasting Warren with the Texas Republican freshman senator whose push to defund the 2010 health-care law helped lead to the partial government shutdown in October.

Future Contests

Warren, 64, is building relationships that could be helpful in future races, nationally or statewide. While she has said she won’t run for president in 2016 and signed a letter encouraging Clinton to do so, she’s also seizing on speculation about her future to advance her causes.

Asked by reporters on Dec. 4 if the presidential speculation hurts or helps her consumer-oriented legislative proposals, she said: “I’m glad to see any possible energy put behind those fights.”

Related: Elizabeth Warren Versus the Think Tanks

After rising to prominence as a critic of the housing and financial industries during the 2008 financial collapse, Warren became the architect for the Obama administration of the Consumer Financial Protection Bureau, created by the 2010 Wall Street Reform and Consumer Protection Act. After she failed to secure the top job at the bureau, Warren won her Senate seat by challenging Republican incumbent Scott Brown in 2012.

At her first appearance as a member of the Senate banking committee in February, she asserted that Wall Street firms had become “too big for trial” and, at a March hearing, she criticized regulators because no one went to jail after HSBC Holding Plc operations in the U.S. admitted to enabling Mexican and Caribbean drug cartels to launder billions of dollars.

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Obamacare Payment System to Insurers: Changed in Setback

According to Bloomberg,

Parts of the Obamacare enrollment system used to pay insurers are being pushed back from January in the latest technology delay for the president’s U.S. health-care overhaul.

The administration is setting up a temporary process to send companies the federal subsidies used to help millions of Americans buy coverage because the online system won’t be ready as planned, said Aaron Albright, a spokesman for the Centers for Medicare & Medicaid Services. Insurers will estimate what they are owed rather than have the government calculate the bill.

U.S. Health-Care (Bloomberg)

U.S. Health-Care (Bloomberg)

The rollout of the Patient Protection and Affordable Care Act has been marred by missed deadlines for small businesses, broken promises to consumers and sticker shock over coverage prices. Healthcare.gov, the main portal for consumers to shop for insurance plans, has been error-prone since its Oct. 1 debut and an administration official said this month that 30 percent to 40 percent of the online marketplace hasn’t been finished. Obama administration officials have said the troubled website will work for the vast majority of users by today.

“This temporary process, which is consistent with how payments have been made to issuers in the Medicare program, will ensure that issuers begin to get premium tax credits and cost-sharing subsidy payments on time, beginning in January,” Albright said yesterday in a telephone interview.

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Health Law’s Birth-Control Rule Gets Supreme Court Review

According to Bloomberg,

The U.S. Supreme Court will take up a challenge to part of President Barack Obama’s health-care law by companies claiming a religious exemption to the requirement that they provide birth-control coverage for employees.

The justices said today they will hear two cases involving family-run businesses whose owners say they view some forms of contraception as immoral.

Prayer at the U.S. Supreme Court (Bloomberg)

Prayer at the U.S. Supreme Court (Bloomberg)

The dispute threatens to carve a hole in the 2010 health-care law already beset by problems on multiple fronts as its major provisions take effect. The clash will be the court’s first look at Obama’s biggest legislative accomplishment, the Patient Protection and Affordable Care Act, since a majority upheld the core of the law in 2012. The court will rule by July.

Both sides urged the justices to resolve the religious-exemption question, which the administration said was of “exceptional importance.” The issue has divided lower courts and sparked dozens of lawsuits by for-profit companies.

“Few issues are more important than the extent to which the government must recognize and accommodate the religious exercise of those it regulates,” argued one of the companies, Hobby Lobby Stores Inc., a craft-store chain whose owners say they run the company in accordance with the Bible.

The second case involves Conestoga Wood Specialties Corp., a woodworking business owned by a Mennonite family.

The court will consider whether companies can assert the same religious-freedom rights as people. A variation of that question drove an ideological wedge through the court three years ago in the Citizens United case, which centered on corporate speech. The court cleared the way for corporations and unions to spend unlimited sums on political campaigns.

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U.S. Stocks Fluctuate Amid Confidence, Housing Reports

According to Bloomberg,

U.S. stocks fluctuated, after the Standard & Poor’s 500 Index fell from a record yesterday, as investors assessed reports showing higher home prices and an unexpected drop in consumer confidence.

Lennar Corp. and PulteGroup Inc. climbed at least 3.5 percent, leading a rally among homebuilders. Tiffany & Co. jumped 7.9 percent after profit topped analysts’ estimates and the jeweler boosted its forecast. Jos. A. Bank Clothiers Inc. surged 9.2 percent after Men’s Wearhouse Inc. offered to buy the apparel company for about $1.54 billion. Take-Two Interactive Software Inc. fell 3.5 percent as the gaming company said it bought back all 12 million shares held by Icahn Group.

The S&P 500 gained 0.1 percent to 1,804.59 at 11:29 a.m. in New York after falling as much as 0.1 percent earlier. The Dow Jones Industrial Average rose 22.99 points, or 0.1 percent, to 16,095.53. Trading in S&P 500 stocks was 18 percent below the 30-day average at this time of the day.

“We’re tending to move in a positive direction,” Kate Warne, a St. Louis-based investment strategist at Edward Jones & Co., said by phone. Her firm oversees $746 billion. “We’re getting data in a sweet spot. It’s positive but not so positive as to raise worries about the Fed moving sooner and yet it continues to show that the economy is gaining some traction.”

The S&P 500 fell 0.1 percent yesterday after closing Nov. 22 for the first time above 1,800 to cap seven straight weeks of gains.

Fed Stimulus

Home Prices See Highest Gains Since February 2006

Three rounds of Federal Reserve bond purchases have helped push the S&P 500 up 166 percent from a bear-market low in 2009. Four out of five investors expect the Fed to delay a decision to begin reducing the stimulus until March 2014 or later, according to a Bloomberg Global Poll on Nov. 19.

Policy makers have been scrutinizing data to determine whether the economy is strong enough to withstand a reduction in their $85 billion a month in bond purchases.

More applications for home construction were issued in October than at any time in the past five years, figures from the Commerce Department showed today. The agency postponed publishing housing-starts data, due today, to Dec. 18 because of a lapse in funding after a 16-day partial government shutdown last month.

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Black Friday warriors share their best attack plans

(Reuters) – When Aimee Brittain’s team hits the stores in a commando-like fashion on Thanksgiving night in search of Black Friday deals, they’ll stand out from the crowd in their matching “very bright blue” shirts. They’ll scatter when they hit the store, and the shirts will help them see each other quickly.

It’s different for the Goldman sisters. Stephanie Goldman, a Cliffside Park, New Jersey, public relations executive, and her sisters Nadine Kleinman of Highland Park, New Jersey, and Valerie Goldman of Washington, D.C., travel in a pack, flooding one zone at a time.

Shoppers look over items on sale at a Macy's store in New York, November 23, 2012. REUTERS/Keith Bedford

The strategy, honed when Stephanie was a young teen, has helped them score priority bargains, like the time they got $900 worth of clothes from Ann Taylor for about $100. They went that Black Friday to an outlet store, already full of discounted items, hit the clearance rack, where prices were further reduced, then tacked on the credit-card application discount.

This year, Black Friday starts earlier than ever, with some retailers, including Wal-Mart, opening early on Thanksgiving evening. About 140 million people were expected to shop over the four-day weekend, according to the National Retail Federation.

Goldman, Brittain and other warriors who will prowl for deals on the busiest of shopping days took time from their mission planning to share war stories and tips to those who want to spend less and get more on the day after Thanksgiving. Here are their tips and tales:

SET YOUR STRATEGY

A Black Friday neophyte will shop without a plan. The veteran shopper knows where to go and when, what to buy, and how much to pay.

Goldman and her sisters start months ahead. Over calls and emails, they analyze sales flyers and figure out where the best deals are on the items they want to buy. Many flyers have been available for weeks – Macy’s and Toys R Us for example – collected on sites such as BlackFriday.com.

Brittain, 45, who lives near Atlanta, starts later, but plans to a more extreme degree. A week before Thanksgiving, she and her pack – family and friends including her cousin, her grandmother and an aunt – will pore over the circulars and craft plans right down to the amount of space available in their cars to cart away their booty.

USE THE BUDDY SYSTEM

Brittain’s crew take teamwork seriously. They hit a specific store and go to multiple departments at once, keeping each other on speed-dial to discuss items they have spotted or if someone needs a helping hand. “We call it divide and conquer. It’s battle. It’s war,” she says.

The strategy has paid off handsomely, says Brittain, who writes the prettyfrugaldiva.com blog. “All my kitchen supplies have been purchased at Black Friday sales, and I haven’t paid more than $5 for them.”

That includes a blender, mixer, coffee maker and electric can opener.

The Goldman clan travels as a pack, Stephanie says, allowing honest assessments about clothing choices and whether the price is really a bargain. Once they’re on the move, they will shop for eight to 14 hours.

Even if you can’t field a team, shop with a wingman. Christina Wojciechowski, 37, of Orchard Park, New York, goes with one partner, either her brother or sister-in-law. When she heads out late Thanksgiving night, it is not only comforting to have someone you know with you, she says, but you can help each other find what you’re looking for.

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‘Great Satan’ meets ‘Axis of Evil’ and strikes a deal

(Reuters) – Saturday night had turned into Sunday morning and four days of talks over Iran’s nuclear program had already gone so far over schedule that the Geneva Intercontinental Hotel had been given over to another event.

A black tie charity ball was finishing up and singers with an after party band at a bar above the lobby were crooning out the words to a Johnny Cash song – “I fell into a burning ring of fire” – while weary diplomats in nearby conference rooms were trying to polish off the last touches of an accord. Negotiators emerged complaining that the hotel lobby smelled like beer.

At around 2:00 a.m., U.S. Secretary of State John Kerry and counterparts from Britain, China, France, Germany and Russia were brought to a conference room to approve a final text of the agreement which would provide limited relief of sanctions on Iran in return for curbs to its nuclear program.

At the last minute, with the ministers already gathered in the room, an Iranian official called seeking changes. Negotiators for the global powers refused. Finally the ministers were given the all clear. The deal, a decade in the making, would be done at last.

Now that the interim deal is signed, talks are far from over as the parties work towards a final accord that would lay to rest all doubts about Iran’s nuclear program.

“Now the really hard part begins,” Kerry told reporters. “We know this.”

THAW

(L-R) Germany's Foreign Minister Guido Westerwelle, British Foreign Secretary William Hague, Chinese Foreign Minister Wang Yi, U.S. Secretary of State John Kerry, French Foreign Minister Laurent Fabius, Russia's Foreign Minister Sergei Lavrov, EU foreign policy chief Catherine Ashton and Iranian Foreign Minister Mohammad Javad Zarif gather at the United Nations Palais in Geneva November 24, 2013. REUTERS/Carolyn Kaster/Pool

The deal, which represents the most important thaw between the United States and Iran in more than three decades since Iranian revolutionaries held 52 American hostages in the U.S. embassy in Tehran, very nearly did not happen.

There was still ample ground to cover on the final day, when U.S. Secretary of State John Kerry arrived, joining foreign ministers from Britain, China, France, Germany and Russia.

Officials from several of the countries were doubtful that a deal would be reached. Resentful-sounding European diplomats said their foreign minister bosses had not wanted to come unless a final text was on the table, but had felt obliged to come anyway when Russia’s Sergei Lavrov showed up on Friday.

When the foreign ministers arrived, some junior diplomats and journalists were evicted from their hotel rooms to clear space for the VIPs.

After his trans-Atlantic flight on Saturday morning, Kerry met his Iranian opposite number Mohammad Zarif, with European Union foreign policy chief Catherine Ashton, who has led negotiations on behalf of the powers.

According to a senior U.S. State Department official, Kerry told Zarif there could be no more delay. President Barack Obama’s administration would call for even tighter sanctions on Iran unless a deal was reached now. Congress members were demanding new sanctions and the White House would join them.

Kerry made the case that “there would be no way to hold back new sanctions to give room for (a) new round and we would lead the charge for more sanctions if we did not come to agreement,” the State Department official said.

By Saturday evening, the final language was personally approved by Obama in Washington. In a sign of how big a risk the Obama administration was taking, the main U.S. ally in the Middle East, Israel, decried what it called an “historic mistake”, easing sanctions without dismantling Iran’s nuclear program.

But Obama said the deal put limits down on Iran’s nuclear program that would make it harder for Tehran to build a weapon and easier for the world to find out if it tried.

“Simply put, they cut off Iran’s most likely paths to a bomb,” Obama said in a late-night appearance at the White House after the deal was reached.

Obama was not the only one taking a risk. Iran’s new president, the relative moderate Hassan Rouhani, was elected in June and inaugurated in August promising to ease the crippling sanctions. But Iran has invested billions of dollars in a nuclear program, which its clerical and military establishment believes is a cornerstone of national pride.

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Honduras Votes for President as Drug Violence Crimps Growth

According to Bloomberg,

Hondurans choose a new president and Congress today as the world’s highest rate of violent crime crimps economic growth in the country four years after a military coup ousted former President Manuel Zelaya.

Polls show the race in a statistical tie between the ruling National Party’s Juan Orlando Hernandez, 45, and Zelaya’s wife, Xiomara Castro, who heads the newly formed Libre party. Both candidates have vowed to improve security after a surge in murders fueled by drug gangs linked to Mexican cartels. Polls opened at 7 a.m. local time and will close at 5 p.m.

Castro, 54, is seeking to break a century-long grip on the presidential palace by the country’s two traditional parties. She has tapped into frustration from the coup, during which she led protests to have her husband returned from exile. Hernandez led the national assembly when Zelaya was ousted for backing a referendum to change the constitution.

In the eight-candidate race, no party is expected to win a majority in the legislature.

“It’s going to be difficult for whoever wins to govern,” said Geoff Thale, director of the Washington Office on Latin America.

Bordered by Nicaragua, El Salvador and Guatemala, Honduras has a murder rate of more than 80 per 100,000 inhabitants, the highest in the world, according to the United Nations. The U.S. State Department estimated that last year about 90 percent of all cocaine smuggling flights departing South America for the U.S. first land in Honduras, where illegal airstrips abound in poorly patrolled parts of the country.

International Observers

The government plans to deploy 14,000 soldiers and police to safeguard the process, while almost 750 international observers will monitor the vote. Current President Porfirio Lobo is barred from seeking re-election and whoever gets the most votes wins. There is no second round.

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