Drug benefit expanded to 1 million more seniors

WASHINGTON – In case the prospect of nearly $4,000 in prescription assistance isn't enough to perk up low-income seniors, the government is using '60s singer Chubby Checker to publicize "the twist" in the Medicare drug program.

As of Jan. 1, more than 1 million low-income seniors are newly eligible for more generous prescription drug benefits under the "extra help" program. Benefiting from a new law are those with life insurance policies and those who regularly get money from relatives to help pay household expenses but were previously disqualified because of too many assets or too much income.

"The safety net is frayed and this is a way to start stitching it back together again," said Hilary Dalin, associate director for benefits at the National Council on Aging.

Income limits are $16,245 a year for singles and $21,855 for married couples living together. Assets such as stocks, bonds and bank accounts must be limited to $12,510 for singles and $25,010 for married couples. The value of homes and automobiles are excluded.

Under the old law, applicants had to include the value of life insurance policies in calculating their assets. They also had to include as part of their income money received on a regular basis from relatives and friends to help pay household expenses.

As of Jan. 1, life insurance policies are no longer counted as assets and money received to help pay household expenses is not counted as income.

Social Security Commissioner Michael J. Astrue urged seniors who were rejected for the program in the past to reapply.

Reuters – A pharmacist looks through shelving to fill a prescription while working at a pharmacy in New York December …

To help promote the new twist in the law, Astrue enlisted Chubby Checker, who danced and sang "The Twist" to the top of the pop charts in the early 1960s. Those too young to remember Checker probably don't qualify for the 65-and-up health care plan.

Economy loses 85K jobs, unemployment rate steady

WASHINGTON – Lack of confidence in the economic recovery led employers to shed a more-than-expected 85,000 jobs in December even as the unemployment rate held at 10 percent. The rate would have been higher if more people had been looking for work instead of leaving the labor force because they can't find jobs.

The sharp drop in the work force — 661,000 fewer people — showed that more of the jobless are giving up on their search for work. Once people stop looking for jobs, they are no longer counted among the unemployed.

Reuters – People gather while awaiting the start of seminars for job seekers at an employment center in San Francisco, …

When discouraged workers and part-time workers who would prefer full-time jobs are included, the so-called "underemployment" rate in December rose to 17.3 percent, from 17.2 percent in October. That's just below a revised figure of 17.4 percent in October, the highest on records dating from 1994.

10,000 own up to 'morally unacceptable' tax evasion

Stephen Timms, the Treasury Minister, today branded offshore tax evasion "morally unacceptable" today, as HM Revenue and Customs (HMRC) announced that around 10,000 people came forward to declare money in offshore accounts before the UK tax amnesty deadline on Monday.

Mr Timms said: “Hiding money in offshore accounts to evade tax is economically and morally unacceptable. It robs public services of funding and places an unfair burden on the honest majority of taxpayers.
“Some people will still be tempted, and that is why the Government will bring forward measures during 2010 to build on the significant progress made both in the UK and globally during 2009 in closing down offshore tax evasion for good.”
Under the amnesty, introduced in July last year, those who came forward voluntarily must now pay any unpaid tax, plus interest, and a 10 per cent fine.

However, people who have not come forward will face investigation, penalties of 100 per cent on the tax due, being publically "named and shamed" and possibly even prosecution. New maximum fines of 200 per cent could be brought in during 2011 if the Finance Bill is enacted following the 2010 Budget.

Lennar Corp posts profit

Homebuilder Lennar Corp (LEN.N) posted a fourth-quarter profit, helped by a year-over-year increase in new orders, reduced sales incentives and lower construction costs and a tax benefit.

Reuters – A Lennar housing development is seen in Broomfield, Colorado June 26, 2007. REUTERS/Rick Wilking

Lennar said as a result of tax legislation that was enacted in its fourth quarter, it will receive a tax refund of about $320 million in early 2010.

European stocks fall on eve of key US jobs data

LONDON – Europe's leading stock markets dropped on Thursday, the eve of major US jobs figures, and as British investors awaited the Bank of England's latest decision on interest rates.

London's benchmark FTSE 100 index fell by 0.29 percent to stand at 5,514.37 points in late morning deals.
Frankfurt's DAX 30 shed 0.83 percent to 5,984.19 points and in Paris the CAC 40 lost 0.50 percent to 3,997.85.
The DJ Euro Stoxx 50 index of top eurozone shares decreased 0.62 percent in value to reach 2,990.92 points.
"Global equity markets have struggled to build on recent gains ahead of Friday's crucial non-farm payroll figures in the US," said ETX Capital senior trader Manoj Ladwa.

AFP/File – A French trader monitors shares prices in Paris in 2008. Europe's leading stock markets dropped, …

"Poor jobs data caused overnight jitters and London traders that make it to their desk through the snow and ice will be appropriately cautious," he added, in reference to the cold weather gripping Britain.

Wall Street little changed after ISM, ADP data

NEW YORK - Stocks were little changed on Wednesday after data showed the U.S. services sector grew in December, but at a marginal pace.

The Institute for Supply Management said its services index rose to 50.1 from 48.7 in November. The reading was below economists' forecast of 50.5, according to a Reuters survey. A reading above 50 indicates expansion.

"The overall number was pretty good, but it wasn't especially positive. There's still a lot to be desired. I think this will be overlooked in trading though, since there wasn't a huge shock in the headline number," said Dan Cook, senior market analyst at IG Markets in Chicago.

Reuters - Traders work on the floor of the New York Stock Exchange, January 6, 2009. U.S. stocks rose on ...

The Dow Jones industrial average (DJI:^DJI - News) was up 2.04 points, or 0.02 percent, at 10,574.06. The Standard & Poor's 500 Index (^SPX - News) was down 0.99 points, or 0.09 percent, at 1,135.53. The Nasdaq Composite Index (Nasdaq:^IXIC - News) was down 1.95 points, or 0.08 percent, at 2,306.76.

Banks dominate best-buy tables as Building Societies raise rates

Alliance & Leicester crowned most competitive lender, as seperate figures show mutuals are increasing SVRs

Alliance & Leicester was the most competitive mortgage lender over the last three months, research released today has shown, as experts herald burgeoning competition in the market for home loans.

The lender, which is owned by Santander, consistently offered competitive interest rates to borrowers between October and December, according to an analysis by realpricecomparison.com, the price comparison website. It looked at the frequency that lenders appeared in its best-buy tables.

Online bank First Direct and its owner HSBC were the second and fourth most competitive lenders respectively, the research found, while Woolwich, owned by Barclays, was third.

Mortgage rates fell dramatically in the last half of the year as lenders fought to attract borrowers with the largest deposits and the cleanest credit histories.

Alliance & Leicester recently offered borrowers with a 30 per cent deposit a tracker rate of 1.99 per cent above base, a pay rate of 2.49 per cent, for two years. The deal was available through London & Country, the broker. HSBC and Woolwich both offered home loans with a starting interest rate of 1.99 per cent.

Mandelson blasts Tory budget deficit 'nonsense'

Lord Mandelson, the Business Secretary, today said that aggressive Tory plans to slash the country’s budget deficit were “potentially dangerous nonsense” which risked derailing the economic recovery.

Amid speculation that the peer has been unhappy with Alistair Darling’s Pre-Budget Report last month, Lord Mandelson hailed the Chancellor’s plan to halve the deficit within four years as “credible ... bold and tough”.
Reining in the £178 billion annual deficit will require a combination of spending reductions, tax increases and economic growth, he added.
The peer explained that fostering growth was “the best antidote to debt, both in the short and long term”.

He added: “It has a clear objective — to halve the deficit by 2013-14. It is bold and tough: the equivalent of something approaching an £80 billion turnaround in the public finances.

Cash remains king but here comes the new wave

Reports of the death of cash have long been exaggerated; despite years of talk, a cashless society eludes us. Yet it is slowly edging closer with debit card spending set to overtake cash spending, by value, for the first time in 2010 — internet payments accounted for one in four card transactions over Christmas.

Contactless payment, in which cards are waved across a reader to pay instantly for small items, is perhaps the most plausible threat to cash yet. The two main products, Visa’s PayWave and Mastercard’s PayPass, are gaining in popularity. Visa believes that this year will be a “tipping point” for contactless payment and predicts that the number of cards in use will rise from 5 million to 15 million this year. This kind of payment will also start to be used for small purchases — a bottle of water or a newspaper — usually reserved for cash transactions.
“Contactless is as revolutionary as the shift to internet payments was five years ago,” says Steve Perry, executive vice-president of Visa Europe. “It will mean having no notes and coins — it will certainly mean having no coins. It will move us almost to a cashless society.”
Contactless payment is being heavily backed by credit card companies, which are frustrated that plastic has failed to make real inroads into the cash arena; consumers still feel uncomfortable using debit or credit cards for purchases of less than £5, even though many retailers welcome the opportunity to take cash out of their system. Mr Perry says: “Slowly, slowly. We have to get consumers used to it.”

New technology to enable London Underground users to pay by a swipe of their mobile phones is being trialled

Yet many think that the real contactless revolution may not happen in cards but in mobile phones. Contactless cards are the precursor to mobile phone “wallets” with Near Field Communication (NFC) technology embedded, allowing you to pay by waving a phone instead of a card. Visa already has trials under way and believes that within two to three years the technology will migrate to mobile phones. Barclaycard and Orange are partnering to develop mobile payments. Meanwhile Nokia is believed to be developing a range of NFC handsets.

‘Coshed’ banks consider flight from London over tax burden

City bankers are returning to work this week to grapple seriously with the question of whether parts of their business could be relocated to friendlier jurisdictions, tax experts said yesterday.

With Goldman Sachs emerging as the latest bank to investigate whether some of its London operations could be exported in the wake of the banker bonus tax, accountants said that the serious cost-benefit analysis was now just beginning. Alex Henderson, a tax partner in PricewaterhouseCoopers, warned that the threats to move from London were not just sabre-rattling. “We had all the emotion before Christmas,” he said. “Now people are coming back and in the cold light of the new year looking at the hard numbers.”

Mr Henderson said that banks’ finance directors and chief operating officers would be re-examining the case for relocation in the light of the bonus tax, under which banks are liable for a new 50 per cent levy on any bonus in excess of £25,000 paid before April 6.

Taxpayers face big bill as banks spurn fund to help small business

The Government is struggling to raise £1 billion from banks to finance its much-delayed National Investment Corporation (NIC), a fund to help small businesses, and may have to contribute a large amount of taxpayers’ money to hit its target.

Officials are preparing for a final round of arm-twisting with banks in an attempt to reach an agreement on the scheme by the end of the month.

Senior financiers have been called to a meeting with officials from Lord Mandelson’s Business department next week in the hope that a plan can be thrashed out.

But there is a growing belief that the Government will fail to hit its target of £1 billion mainly from retail and investment banks operating in the UK.

The Government has been considering injecting public money into the fund and will almost certainly have to commit a larger sum than it intended, insiders believe. The fund may also have to be administered in a piecemeal way, making small amounts of credit available at any one time.

IT Spending Forecast:Spring Thaw?

Cindy Murray's not alone among bank execs when uttering the following words, but she's not in a crowded room, either: "In 2009, we didn't cut the budget; in 2010 we are increasing our budget in areas of treasury and transaction banking...not only payment services but also liquidity," says Murray, a global corporate banking e-commerce executive at Bank of America.

Murray's in an enviable position for a bank technology exec-treasury management is considered by many bankers to be one of the few places where IT staffs are getting a green light on spending in 2010.
"Anything related to wholesale or corporate banking or transaction banking will get [IT investment] in 2010," says Jacob Jegher, a senior analyst for Celent. "Corporate banking will see an increase in IT spending to offset lackluster growth, if not negative growth on the retail side."

But these bright spots aside, looking for big time increases in IT spending will be like wishing for a home run derby during the dead ball era-a case of hope outpacing reality, with spending in most business lines flat or seeing nominal growth for least another year. And analysts say bank execs should be more alert than usual when it comes to over eager pronouncements from the tech community.

JAL Shares Jump 36% as State Prepares Funding Boost

Shares of Japan Airlines jumped 36 percent to bounce back from a plunge last week after the government sought to boost the amount of funds available to the struggling carrier.

The stock lost a quarter of its value on Wednesday, the last trading day of 2009, after sources said a government-backed turnaround fund told JAL's main creditors it was leaning towards a bankruptcy proceeding as part of a rescue package for Asia's largest carrier by revenue.

The state-owned Development Bank of Japan (DBJ) said on Sunday the government had asked it to double its credit line for JAL to 200 billion yen ($2.2 billion) to provide it with funding while a state-backed turnaround fund decides whether to bail out the airline.

A spokesman for the bank said it was considering the government's request.

"The move appears to have erased worries about JAL's immediate credit concerns," said Takashi Kishi, senior analyst at Mizuho Investors Securities.

Bernanke defends Fed record

NEW YORK - Federal Reserve chairman Ben Bernanke said Sunday that low interest rates in the first half of the last decade were "appropriate" at the time and were not the main cause of the ensuing housing bubble.

Speaking in Atlanta to the American Economic Association, the Fed chairman was addressing a key criticism of Fed policy: That it kept rates too low for too long from 2002 to 2006, encouraging a speculative frenzy that drove home prices to unsustainable levels.

The subsequent crash in home prices led to a surge in foreclosures, billions of dollars in losses for banks, and what Bernanke called the worst financial crisis in modern history.

"Monetary policy during that period -- though certainly accommodative -- does not appear to have been inappropriate, given the state of the economy and policymakers' medium-term objectives," the Fed chairman said in prepared remarks.

Bernanke was sworn in as Fed chairman in February 2006, following the long reign of Alan Greenspan.

More than low interest rates, Bernanke said that the increase in home prices was the result of mortgages that artificially reduced monthly payments and a reduction in lending standards. That brought buyers into the market that could afford their homes only if home prices continued to rise, enabling them to refinance.

Goldman seeks $80m from Chinese power company

Goldman Sachs has threatened to sue a Chinese power company for defaulting on two oil hedging contracts, escalating a long-running dispute between China and Wall Street banks over derivatives losses.

Shenzhen Nanshan Power, a state-owned thermal power generator, said this week that J Aron & Company, the commodities business of Goldman Sachs, had threatened to sue it for $80 million (£50 million) compensation for terminating the contracts in October 2008.

“We will not accept the demand by J Aron for all the losses and related interests,” Shenzhen said in a statement to its local stock exchange, adding that it was negotiating with J Aron to resolve the dispute.

However, the company cautioned that J Aron had warned that if Shenzhen did not pay up, J Aron reserved the right to sue without further warning.

“The possibility of using a lawsuit cannot be ruled out when talks fail,” Shenzhen told the exchange.

In March 2008, Shenzhen executives took out contracts with J Aron that bet that the oil price would remain above $62 a barrel between March and December.

Money printing scheme is working, Bank of England says

Lending to households and businesses continued to pick up in the final three months of last year and is expected to rise further in the coming months, the Bank of England said yesterday, boosting hopes that its scheme of quantitative easing is working.

The Bank’s latest quarterly Credit Conditions Survey, which asks lenders about credit conditions over the past three months, showed that the availability of credit to businesses rose for the fourth consecutive quarter between October and December, while the availability of mortgages rose after falling in the third quarter.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “The survey at least boosts hopes that quantitative easing and other policy measures undertaken by both the central bank and the Government to boost bank lending are increasingly feeding through to have a beneficial impact, in tandem with the modestly improved economic situation and outlook.”
However, the data showed that the rate of improvement in credit conditions for businesses slowed, with the gauge for availability of credit falling from 24.8 in the third quarter to 16.3.

Alan Clarke, UK economist at BNP Paribas, said: “Things are getting better, but at a slowing pace.”
Access to finance was still most difficult for smaller businesses, the survey showed, with the gauge of availability of credit at 1.9 in the fourth quarter.

Vietnam to boost liquidity by easing trading rules

 Vietnam plans to boost stocks liquidity by loosening restrictions on the sale of equities next month, said Vu Bang, chairman of the State Securities Commission.

The regulator will reduce by one day the minimum period in which buyers have to hold onto shares before selling them, the regulator said in an interview in Hanoi wednesday. Currently, buyers need to wait three days for the purchases to clear before they’re able to sell the shares.

“Investors will be able to trade at a much quicker pace because of the shorter time period,” said Le Van Minh, director of the Ho Chi Minh City branch of Agribank Securities Joint- Stock Co. “This is a really good measure for investors.”

The regulator is trying to increase trading volume in the VN Index, Asia’s worst-performing benchmark index this quarter, after the government tightened bank lending to combat quickening inflation. The gauge rose 2.3 percent to 495.36 Wednesday, the best performer among 91 global stock indexes tracked by Bloomberg.