Obama Tax, falling Market's, Greek Desperation

Greek's Conference marathon to continue : Desperation, palpable 


Greece's conference call with the European Commission, the International Monetary Fund and the European Central Bank could last until Tuesday or later, according to published reports. Markets around the world have been in turmoil during recent days over the possibility of a Greek default. Monday's conference call came after Greece Finance Minister Evangelos Venizelos promised to hurry budget reforms and make cuts to the nation's civil-service staff. 

Dollar Libor at the yearly High :


The cost to borrow money in dollars remained at the highest level in more than a year on Monday while the rate to borrow euros was little changed. The London interbank offered rate, or Libor, for three-month dollar loans traded at 0.35133%, little changed from Friday and up from 0.34289% a week ago, according to FactSet Research. The three-month Libor rate for euros was little changed at 1.48375%, near the highest since early 2009. The one-week Libor rate for euros was 1.05063%, also unchanged from Friday and down from higher levels seen in early August.


Gold Sinks with all metals and Commodities :


 Gold futures fell 2% Monday to close at their lowest level in more than three weeks, pressured by broad losses in the U.S. stock market and commodities, as a stronger U.S. dollar dulled demand for the metal. Gold for December delivery fell $35.80 to close at $1,778.90 an ounce on the Comex division of the New York Mercantile Exchange. That was the lowest closing level for futures prices since Aug. 25. Given how long the European debt crisis has been going on, it's no surprise that gold's failing to get a lift from the Greek debt concerns and right now, the movement in gold is really focused on the stronger U.S. dollar, said Jeffrey Wright, senior analyst of metals and mining equity research at Global Hunter Securities.

Obama's tax adventure :

 In a blunt rejoinder to congressional Republicans, President Barack Obama called for $1.5 trillion in new taxes Monday, part of a total 10-year deficit reduction package totaling more than $3 trillion. He vowed to veto any deficit reduction package that cuts benefits to Medicare recipients but does not raise taxes on the wealthy and big corporations.

"We can't just cut our way out of this hole," the president said.

The president's proposal would predominantly hit upper income taxpayers but would also reduce spending in mandatory benefit programs, including Medicare and Medicaid, by $580 billion. It also counts savings of $1 trillion over 10 years from the withdrawal of troops from Iraq and Afghanistan.

The deficit reduction plan represents an economic bookend to the $447 billion in tax cuts and new public works spending that Obama has proposed as a short-term measure to stimulate the economy and create jobs. And it gives the president a voice in a process that will be dominated by a joint congressional committee charged with recommending deficit reductions of up to $1.5 trillion.

His plan served as a sharp counterpoint to Republican lawmakers, who have insisted that tax increases should play no part in taming the nation's escalating national debt. Obama's plan would end Bush-era tax cuts for top earners and would limit their deductions.

"It's only right we ask everyone to pay their fair share," Obama said from the Rose Garden at the White House.

In issuing his threat to veto any Medicare benefits that aren't paired with tax increases on upper-income people, Obama said: "I will not support any plan that puts all the burden for closing our deficit on ordinary Americans."

Responding to a complaint from Republicans about his proposed tax on the wealthy, Obama added: "This is not class warfare. It's math."

The Republican reaction was swift and derisive.

"Veto threats, a massive tax hike, phantom savings, and punting on entitlement reform is not a recipe for economic or job growth_or even meaningful deficit reduction," Senate Republican leader Mitch McConnell said in a statement issued minutes after the president's announcement. "The good news is that the Joint Committee is taking this issue far more seriously than the White House."

Obama's proposal comes amid Democratic demands that Obama take a tougher stance against Republicans. And while the plan stands little chance of passing Congress, its populist pitch is one that the White House believes the public can support.

The core of the president's plan totals just over $2 trillion in deficit reduction over 10 years. It would let Bush-era tax cuts for upper income earners expire, limit deductions for wealthier filers and close loopholes and end some corporate tax breaks. It also would cut $580 billion from mandatory programs, including $248 billion from Medicare. It also targets subsidies to farmers and benefits programs for federal employees.

Officials cast Obama's plan as his vision for deficit reduction, and distinguished it from the negotiations he had with House Speaker John Boehner in July as Obama sought to avoid a government default.

As a result, Obama's proposal includes no changes in Social Security and no increase in the Medicare eligibility age, which the president had been willing to accept this summer.

Administration officials also said that Obama's $1.5 trillion in new taxes is a goal that Congress could achieve through a broad overhaul of the tax code. They said the president's specific proposals represent one way to get to that goal under the existing tax code.

Coupled with about $1 trillion in cuts already approved by Congress and signed by the president, overall deficit reduction would total more than $4 trillion, a number many economists cite as a minimum threshold to bring the nation's debt under control.

Key features of Obama's plan:

—$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.

—$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies and federal employee benefits. Administration officials said 90 percent of the $248 billion in 10-year Medicare cuts would be squeezed from service providers. The plan does shift some additional costs to beneficiaries, but those changes would not start until 2017.

—$430 billion in savings from lower interest payment on the national debt.

— $1 trillion in savings from drawing down military forces from Iraq and Afghanistan.

Republicans have ridiculed the war savings as gimmicky, but House Republicans included them in their budget proposal this year and Boehner had agreed to count them as savings during debt ceiling negotiations with the president this summer.

Illustrating Obama's populist pitch on tax revenue, he suggested that Congress establish a minimum tax on taxpayers making $1 million or more in income. The measure — the White House calls it the "Buffett Rule" for billionaire investor Warren Buffett — is designed to prevent millionaires from taking advantage of lower tax rates on investment earnings than what middle-income taxpayers pay on their wages.

That minimum rate, however, is not included in the White House revenue projections. Officials said it was a suggestion for Congress if it were to undertake an overhaul of the tax code.

.At issue is the difference between a taxpayer's tax bracket and the effective tax rate that taxpayer pays. Millionaires face a 35 percent tax bracket, while middle income filers fall in the 15 or 25 percent bracket. But investment income is taxed at 15 percent and Buffett has complained that he and other wealthy people have been "coddled long enough" and shouldn't be paying a smaller share of their income in federal taxes than middle-class taxpayers.

Associated Press

America Invents Act : New Patent law overview

President Barack Obama says a bill he signed Friday overhauling the U.S. patent system will "put a dent" in a towering stack of nearly 700,000 applications still waiting to be reviewed, making it faster and easier to turn innovative ideas into new jobs and new businesses.

Some questions and answers on how the new America Invents Act would help accomplish that:

Q: Why are there so many applications sitting around the U.S. Patent and Trademark Office?

A: It's primarily because of insufficient manpower and funding. The patent office doesn't have enough examiners to keep up with the filings, which have increased slightly under Obama. The agency has a backlog of 1.2 million patents pending, including nearly 700,000 applications alone that are waiting to be reviewed. The agency is funded entirely by fees but Congress has tapped its funding stream over the years.

Q: How long typically until an application is reviewed?

A: Nearly three years, on average. Obama said inventor Thomas Edison's application for the photograph was approved in seven weeks.

Q: How will the America Invents Act make the process better?

A: In several ways. The agency will be able to set its own fees and, with congressional oversight, keep all the money it collects. Plans call for hiring between 1,500 and 2,000 examiners during the budget year ending Sept. 30, 2012. Congress currently sets the office's annual budget and the fees it can charge. David Kappos, the patent office director, told Congress that change would raise an additional $300 million, which could be used to increase staffing and upgrade computers and other information technology.

Applicants also can pay extra for a faster review process that is supposed to cut the average wait to one year, down from three. Small businesses would get a discount on the fee for that special process. New guidelines clarify and tighten standards for issuing patents. The law also switches the U.S. from a "first-to-invent" system to a "first-to-file" system, a change designed to help reduce costly legal battles and even the playing field with other industrialized nations.

Q: What about the backlog?

A: Kappos said the changes could help cut that in half, to 350,000 applications.

Q: How many jobs would be created?

A: Kappos told Congress that "millions of jobs are lying in wait," without being more specific.

Q: How soon will the changes take effect?

A: It depends. Some parts of the law take effect immediately. Other parts will require a year or 18 months.

Q: How is it that Democrats and Republicans in Congress were able to agree on overhauling the patent process when they can't seem to agree on much of anything lately?

A: Both parties have long recognized that the patent system was inadequate to meet the needs of 21st century innovators and the groups pressing for change represent the entire political spectrum, from manufacturers and drug companies with ties to Republicans to high-tech companies and academics more often associated with Democrats. Still, the issue went unresolved for years, a result of the sheer complexity of patent law and resistance from some groups, particularly smaller businesses and private inventors who feared they would be disadvantaged by the changes. This year, the stars were aligned after several court decisions settled litigation questions that had held up the bill. Increased concerns about losing the patenting edge to China and other foreign competitors, and the pressure on both parties to produce legislation that could actually put people to work also were factors.

___

Associated Press writer Jim Abrams contributed to this report.

Major patent law change since 1952 : Pres. Obama Signs

President Barack Obama signed into law Friday a major overhaul of the nation's patent system, a measure designed to ease the way for inventors to bring their products to market. "We can't afford to drag our feet any longer," the president said.

Passed in a rare display of congressional bipartisanship, the America Invents Act is the first significant change in patent law since 1952. It has been hailed as a milestone that would spur innovation and create jobs.

The bill is meant to ensure that the patent office, now facing a backlog of 1.2 million pending patents, has the money to expedite the application process. It now takes an average of three years to get a patent approved. More than 700,000 applications have yet to be reviewed.

"Somewhere in that stack of applications could be the next technological breakthrough, the next miracle drug," Obama said. "We should be making it easier and faster to turn new ideas into jobs."

The president signed the bill after touring Thomas Jefferson High School for Science and Technology in Alexandria, where he examined students' work, including a wheelchair that responds to brain waves. Obama at one point had to step aside as he admired the technological displays. "I don't want to get run over by a robot," he said.

The law aims to streamline the patent process and reduce costly legal battles. It was backed companies including Google and Apple as well as the U.S. Chamber of Commerce. Small-scale inventors are divided on the legislation, with some arguing that it gives an advantage to big corporations.

Obama was joined at the signing ceremony by Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and House Judiciary Chairman Lamar Smith, R-Texas, the two main sponsors of the legislation.

Note : Many Indian firms like Dr Reddy, Lupin, and Many are on this bee line. 

Fact sheet: President Obama declares the " Debt Deal" -Video

Fact Sheet: Bipartisan Debt Deal: A Win for the Economy and Budget Discipline

Bipartisan Debt Deal: A Win for the Economy and Budget Discipline

• Removes the cloud of uncertainty over our economy at this critical time, by ensuring that no one will be able to use the threat of the nation’s first default now, or in only a few months, for political gain;
• Locks in a down payment on significant deficit reduction, with savings from both domestic and Pentagon spending, and is designed to protect crucial investments like aid for college students;
• Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;
• Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;
• Stays true to the President’s commitment to shared sacrifice by preventing the middle class, seniors and those who are most vulnerable from shouldering the burden of deficit reduction. The President did not agree to any entitlement reforms outside of the context of a bipartisan committee process where tax reform will be on the table and the President will insist on shared sacrifice from the most well-off and those with the most indefensible tax breaks.

Mechanics of the Debt Deal

• Immediately enacted 10-year discretionary spending caps generating nearly $1 trillion in deficit reduction; balanced between defense and non-defense spending.
• President authorized to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013.
• Bipartisan committee process tasked with identifying an additional $1.5 trillion in deficit reduction, including from entitlement and tax reform. Committee is required to report legislation by November 23, 2011, which receives fast-track protections. Congress is required to vote on Committee recommendations by December 23, 2011.
• Enforcement mechanism established to force all parties – Republican and Democrat – to agree to balanced deficit reduction. If Committee fails, enforcement mechanism will trigger spending reductions beginning in 2013 – split 50/50 between domestic and defense spending. Enforcement protects Social Security, Medicare beneficiaries, and low-income programs from any cuts.

1. REMOVING UNCERTAINTY TO SUPPORT THE AMERICAN ECONOMY

• Deal Removes Cloud of Uncertainty Until 2013, Eliminating Key Headwind on the Economy: Independent analysts, economists, and ratings agencies have all made clear that a short-term debt limit increase would create unacceptable economic uncertainty by risking default again within only a matter of months and as S&P stated, increase the chance of a downgrade. By ensuring a debt limit increase of at least $2.1 trillion, this deal removes the specter of default, providing important certainty to our economy at a fragile moment.
• Mechanism to Ensure Further Deficit Reduction is Designed to Phase-In Beginning in 2013 to Avoid Harming the Recovery: The deal includes a mechanism to ensure additional deficit reduction, consistent with the economic recovery. The enforcement mechanism would not be made effective until 2013, avoiding any immediate contraction that could harm the recovery. And savings from the down payment will be enacted over 10 years, consistent with supporting the economic recovery.

2. A DOWNPAYMENT ON DEFICIT REDUCTION BY LOCKING IN HISTORIC SPENDING DISCIPLINE – BALANCED BETWEEN DOMESTIC AND PENTAGON SPENDING

• More than $900 Billion in Savings over 10 Years By Capping Discretionary Spending: The deal includes caps on discretionary spending that will produce more than $900 billion in savings over the next 10 years compared to the CBO March baseline, even as it protects core investments from deep and economically damaging cuts.
• Includes Savings of $350 Billion from the Base Defense Budget – the First Defense Cut Since the 1990s: The deal puts us on track to cut $350 billion from the defense budget over 10 years. These reductions will be implemented based on the outcome of a review of our missions, roles, and capabilities that will reflect the President’s commitment to protecting our national security.
• Reduces Domestic Discretionary Spending to the Lowest Level Since Eisenhower: These discretionary caps will put us on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President.
• Includes Funding to Protect the President’s Historic Investment in Pell Grants: Since taking office, the President has increased the maximum Pell award by $819 to a maximum award $5,550, helping over 9 million students pay for college tuition bills. The deal provides specific protection in the discretionary budget to ensure that the there will be sufficient funding for the President’s historic investment in Pell Grants without undermining other critical investments.

3. ESTABLISHING A BIPARTISAN PROCESS TO ACHIEVE $1.5 TRILLION IN ADDITIONAL BALANCED DEFICIT REDUCTION BY THE END OF 2011

• The Deal Locks in a Process to Enact $1.5 Trillion in Additional Deficit Reduction Through a Bipartisan, Bicameral Congressional Committee: The deal creates a bipartisan, bicameral Congressional Committee that is charged with enacting $1.5 trillion in additional deficit reduction by the end of the year. This Committee will work without the looming specter of default, ensuring time to carefully consider essential reforms without the disruption and brinksmanship of the past few months.
• This Committee is Empowered Beyond Previous Bipartisan Attempts at Deficit Reduction: Any recommendation of the Committee would be given fast-track privilege in the House and Senate, assuring it of an up or down vote and preventing some from using procedural gimmicks to block action.
• To Meet This Target, the Committee Will Consider Responsible Entitlement and Tax Reform. This means putting all the priorities of both parties on the table – including both entitlement reform and revenue-raising tax reform.

4. A STRONG ENFORCEMENT MECHANISM TO MAKE ALL SIDES COME TOGETHER

• The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
• Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
• Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table: If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education. That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.

5. A BALANCED DEAL CONSISTENT WITH THE PRESIDENT’S COMMITMENT TO SHARED SACRIFICE

Reliance on Go, RBI silent and US Debt deal is done..

1) Reliance has reported the Best Result, after Long Long time. and Equities do not know how to react. The Market may shoot skyward, with reliance boost. The Leadership Mantle now firmly in the hands of Reliance and is under owned. As, Nifty changes its clothes and adds/subtracts...

2)  RBI is likely to keep the interest rates, as is. 
         
     Most of the central bankers have preferred to stay on side lines, except China. The Dr. Reddy's Suggestion  of ' Wait and Watch' and implicit hint about,' Positive Interest rates and previous Action', Lean season for debt and Divergence in debts, all give jolly good reason for RBI to ' NOT TO Raise rates' . The Bond Markets are too suggesting the same. Even, if RBI raises the rates, markets will take it as ' Last Salvo'. Somehow, Mr Market seems to be wanting to be ' UP "

3)  US Debt talks ' Debt Marketing' Exercise.
   
    With no one really interested in ' US Bonds'. The FED exercise of Buy back is over. The Debt Talk has Brought US Bonds back into the game. Both the Groups, have agreed and unanimous on raising debt limit. Its most unlikely that 'talk' will fail. However, it will be different issue, what happens next...

                               
4) The End of Month Bear Squeeze shall put many on the wrong foot and scramble for Cover.

If so ever I am Wrong, still good to be at ' No side ' than being at ' Wrong side'..

US Default effect on Asia, Latin America, Poor countries

Scenario                                                                   

Standard and Poor's, Moody's and FITCH   revises the ratings on the U.S. to ‘SD’ (selective default) and then raise them to ‘AA/A-1+’ with a negative outlook.

 A few weeks later....

In this scenario,1) Expect a systemic market disruption to follow the revision to 'SD', which would have a significant impact on ratings in the financial institutions sector.

2) If a selective default occurs, but without a systemic market disruption, 

 expect this scenario to have less of an impact on global financial institutions ratings.

• Asia-Pacific: 

  
  The region's financial sector might experience more pronounced funding difficulties in this scenario . These could be associated with market disruptions that could result in costlier funding that could erode profits, while smaller market participants might experience difficulties in refinancing maturing debt. More exposed to a prolonged disruption could be Australian, Korean, and Japanese banks that have some dependence on offshore funding markets. Thus, the impact of a dislocation in global funding markets would be high.  Banks that have previously benefited from strong government support would receive support this time around as well. Asia-Pacific banks and insurers would also feel the impact on their marked-to-market assets on their balance sheets and pressure on market-dependent income. The overall impact would hurt earnings for some, and  couldn’t rule out downgrades for smaller players. ( Contagion Effect )
  
  It’s also important to remember that China and Japan are large holders of U.S. debt securities. The immediate disruptions in global markets would be unlikely to cause a substantial hike in official interest rates in China and Japan--if authorities there moved quickly to maintain confidence. Both countries would likely experience repatriations of funds deployed abroad plus a flight to quality--which, to a degree, should help the largest banks (the expected recipients of such funds) deflect funding pressures.
  

  Latin America

  
  Finance companies are more sensitive than other companies in the region to liquidity shortages because of links to debt market funding requirements and our expectation that banks could close credit lines. Additionally, an economic impact similar to the one in 2008 and 2009 could hurt asset quality and profitability for some finance companies. The ratings on issuers in other sectors in Latin America are not directly tied to the U.S. sovereign rating, which may help limit the number of rating actions.

        I.M.F., W.H.O. and other so many Associtions may find huge difficulties, is an separate issue....

Theatrics of US Budget..? Mummy of US Deficit....

The White House has become a Crowded. 

US Political Actors are feasting on ' US Deficit ' and now, on  'Raising Deficit Plan'. 

Political Campaign Banners are being made.

    

The Washington has so Many Deals flying between the US Default and US Budget, that every Law Maker is Caught with a Fancy Figure and Magic Solution. The President's Media Campaign in Last week and the Camp David Summit has withered in thin Air. Give me Credible Plan Contest has many Takers & Talkers...

                The Gang Of Six : Saxby Chambliss, Mark Warner, with  $3.77 Trillions 

Why Every Law Maker is on the Street..? And, from nowhere every One is Centre Stage.. Why..?

Every One is on Clinch Credit Race.

To appear on the History Page, US Budget 2011 and  be written as " The man, who saved US Default". 

                            

 ( US House of Representative Speaker John Boehner )

Probably, all and One, is smart enough and know that 

' The Plan' will  be Successful. It Has to work !!!

 ( Even if, the Plan is irrelevant and Lacks Validity )

The most active Farce makers are here 

and one or more may catch the Flight of Epoch........>>

But, All these foxes know that Budget is the Plank for the Upcoming Election. 

Hence, this Optically Frantic Efforts by Law makers is Nothing but Theatrics and Melody of Absurd.    Its a Cruel Joke on Americans, and  Eye Wash for world. 

But, Does it Going the serve US and World from the Fears of Default..? 

Guessed Right. The US debt Default may now Haunt Banks, Money Market and Wall Street like Mummies. 

        When this Mummy of Debt will Rise..?

                    

The question, Doubts may shall Rise, again,  Now and Then..... like European Default.