HMany foreign investors are not reassured by the increasingly explicit US government guarantee, and are wary of the debt that the two housing agencies issue. The political fallout over the US debt ceiling this summer and the consequent Standard & Poor’s downgrade of US sovereign debt intensified fears that politics might derail the US government promise to guarantee the debt.

“We have become hostage to the irresponsible behaviour of politicians,” said Bader al-Saad, head of the KIA, in a New York speech last month. “What happened during the debt negotiations will make many countries think twice about the investment environment of the US.”

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The U.S. economy added more jobs than expected last month, and employment gains for the previous two months were revised higher, providing some hope for the weak labor market.

Nonfarm payrolls rose by 103,000 in September as the private sector added 137,000 jobs, the Labor Department said Friday in its survey of employers. Payrolls data for the previous two months were revised up by a total 99,000 to show 57,000 jobs were added in August and 127,000 jobs in July.

However, the September payrolls data was boosted by a one-time event: 45,000 telecom workers returning to their jobs following a strike at Verizon Communications Inc. in August.

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Dan Tolleson, a researcher and writer with a Ph.D. in politics, has been out of work since 2009, except for brief stints as a driver. Still, he opposes President Obama’s call for Congress to renew extensions on unemployment benefits.

“They’re going to end up spending more money on unemployment benefits, while less money is coming in on tax returns,” he said, suggesting that the government should focus on measures that might encourage businesses to hire. “Far better to relax some of these outrageous regulations.”

Make no mistake ”” Mr. Tolleson, 54, has collected unemployment checks, saying he had little choice. But his objection to a policy that would probably benefit him shows just how divisive the question has become of providing a bigger safety net to the long-term jobless, a common strategy in recessions….

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“A total of 37 punchings was made for every bond.”

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The wealth of nations, the [Social Trends Institute] report says, is inextricably associated with the health of families. And, amongst other factors, the global retreat from marriage and from family has depressed economic growth and has deeply hurt two generations of children.

“Evidence drawn from Europe and North America indicates that children who are raised in an intact married home are more likely to excel in school and be active in the labour force as young adults,” the report says. “An abundant social-science literature, as well as common sense, supports the claim that children are more likely to flourish, and to become productive adults, when they are raised in stable, married-couple households.” Yet, with the global decline of these households, “the sustainability of humankind’s oldest organization, the family ”“ the fount of fertility, nurturance and human capital ”“ is now an open question.”

The report cites studies that indicate that American children who are raised outside of “an intact married home” are two to three times more likely to suffer serious social and psychological problems….

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Plenty of lawmakers are against tax breaks and so-called loopholes. Unless, of course, they personally helped create them.

The Senate Republican leader, Mitch McConnell, for instance, says he is open to ending tax breaks for special interests. But when it comes to a tax break he secured in 2008 for the owners of thoroughbred racehorses, he argues that the measure is essential for the protection of jobs in his home state of Kentucky.

Senator John Kerry, Democrat of Massachusetts, says he too wants to eliminate such breaks, except when it comes to beer. He is one of the main supporters of a proposal that would cut taxes for small beer makers like the Samuel Adams Brewery in Boston.

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We’re just stuck?

If we don’t deal with it ”“ if we don’t proactively say we’re going to get our deficit under control ”“let me put it this way: My personal belief is that if we do proactively get our long-term budget issues under control, the bond market will say, “Okay, you’re credible and we will buy your bonds, because you have put yourself on a credible path ”“ whether it’s through cuts, whether it’s through tax increases, however you want to do it ”“ but you have to do it. But you have shown us a credible way to get to the place where the growth rate of your deficit is below the growth rate of nominal GDP.”

But if we don’t do that, my wine bottle of pain becomes a jeroboam and we end up downing it all at once.

That sounds ugly.

It is. It will force budget cuts; it will force tax increases of the magnitude that no one is ready to contemplate. We’re talking cuts in Medicare, cuts in education, in defense, in spending of all kinds. That would create a depression, a true depression that would last 4-5 years, push unemployment to 20%-25%….

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After a weekend of tense meetings among world finance officials here, euro-zone leaders were weighing options to maximize the size of their bailout fund by borrowing against it. The move could provide trillions of dollars of firepower to rescue governments and banks””-but only if all 17 euro-zone legislatures approve a two-month-old agreement to broaden the bailout fund.

Highly public opposition from Germany, the largest and most powerful euro-zone economy, could block the plan.

Policy makers are “focused on their own internal restraints, so that we don’t have the outcome that we need,” Antonio Borges, head of the International Monetary Fund’s Europe department, said Sunday. While key players were understandably acting in self-interest, he said, it was generating “disastrous” collective results.

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The reserve powers would be well advised to pull out all the stops to save Europe and its banking system. Together they hold $10 trillion in foreign bonds. If they agreed to rotate just 4pc of these holdings ($400bn) into Spanish, Italian, and Belgian debt over the next two years, they could offer a soothing balm. None has yet risen to the challenge. It is `sauve qui peut’, with no evidence of G20 leadership in sight.

Once again, the US has had to take charge. The multi-trillion package now taking shape for Euroland was largely concocted in Washington, in cahoots with the European Commission, and is being imposed on Germany by the full force of American diplomacy.

It is an ugly and twisted set of proposals, devised to accomodate Berlin’s refusal to accept fiscal union, Eurobonds, and an EU treasury. But at least it is big.

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There are many more reasons for concern. The continuing inability of Europe to cope with the euro troubles, the political impasse over economic policy in the United States, and the deer-in-the-headlights immobility of Japan do not inspire confidence. The emerging economies ”” China, India, Turkey and Brazil ”” face increased difficulties of their own and will not pull the global economy out of the dumps. That large corporations are sitting on cash hoards or buying back stock rather than making new investments is bad news; that consumers are cutting down debt and doing what they can to increase their savings is good news for the long term, but bad news now. And it seems clear that two years of frantic efforts in Washington have failed to breathe new life into the nation’s housing market….

Global economic events are moving so rapidly that we have no way of foreseeing the economic environment for next year. It will probably not be very good, but how bad it will be and how it will look to voters cannot yet be foretold.

More to the point, we need policy discussions more than we need political ones. This is not just about how big the deficit should be; it is about whether the international financial system will survive the next six months in the form we now know it. It is about whether the foundations of the postwar order are cracking in Europe.

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“The storyline is that global growth is decelerating,” Mike Ryan, chief investment strategist at UBS Wealth Management Americas, told Bloomberg. “Financial stresses are rising and policymakers are finding few viable options to stabilize the real economy.”

That leaves [Ben] Bernanke and company in a bind.

“The Fed can only do so much,” Greg McBride of the financial website Bankrate.com, told NPR’s Scott Horsley. “Their most effective tools are things that they have used up already. At this point, they’ve got a few options left, but none of them is a surefire way to either jump-start the economy or get people to borrow or get banks to lend. There’s still a demand problem. And that is not something that the Fed alone can fix.”

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Muffins costing $16 (£10) and biscuits at $10 were among the “extravagant and wasteful” conference spending by the US justice department, a report has found.

Critics voiced outrage at the spending shown in the internal audit, including $8 coffees and $32-per-person snacks.

The justice department said it accepted the findings, adding that it had taken steps since 2009 “to ensure that these problems do not occur again”.

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Cutting its global forecasts sharply, the world’s economic watchdog said the global economy had entered a “dangerous new phase” and urged policymakers to tread a careful line between aggressive deficit reduction and growth. Central banks should stand ready to restart the printing presses to aid the recovery, it added in its twice-yearly World Economic Outlook.

“The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks,” Olivier Blanchard, the IMF’s chief economist, said. “Markets have clearly become more sceptical about the ability of many countries to stabilise their public debt. Fear of the unknown is high.”

Europe’s leaders came under scathing criticism over the escalating debt crisis.

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This year, volatility has soared and share prices have fallen sharply, in part because few believe there is a Bernanke put, or, for that matter, a Trichet put. It is far from clear that the authorities could stem a new panic, and even less clear that many would be willing to try.

In other words, the slogan for markets as the International Monetary Fund and World Bank meet this week in Washington could well be, “You’re on your own. Don’t count on anybody to bail you out.”

The situation is thus drastically different from that of three years ago, when I.M.F.-World Bank meetings served as a forum to find joint strategies to ameliorate the financial crisis that had followed the collapse of Lehman Brothers.

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Americans’ pessimism about the economy and its future is deepening, a USA TODAY/Gallup Poll finds, and they are increasingly willing to hold President Obama responsible for hard times.

Eight of 10 say the economy is in a recession, and nearly as many say it hasn’t improved over the past year. Even more ominous: Six in 10 predict the economy a year from now will be the same or worse than today, a downturn from the public’s views last year and the year before.

That gloomy outlook, economists say, can become a self-fulfilling prophesy.

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Read it all and the full letter may be found there.

A sharply divided Federal Reserve is expected to take modest steps Wednesday to bolster stagnant growth and hiring amid European debt woes.

The efforts likely won’t have a dramatic impact, analysts say. But inflation concerns may preclude stronger medicine, and in any case prior doses of shock-and-awe easing didn’t result in a self-sustaining, robust recovery.

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But for the inflationary policies of the Fed and the ECB to stimulate pseudo “growth” over the past several decades, there would have been no financial bubble and no mountain of housing-related debt. Why do economists like Roubini and Krugman say we need more of this medicine? Such pathetic proposals for more-debt-driven government intervention are what pass for mainstream economic thinking today in the G-20 nations.

Keep in mind that there are still hundreds of billions in bad debts in the US and EU tied to real estate and other speculative endeavors ”” debt which must eventually default. Until the global financial system is cleansed of these bad debts, market volatility and uncertainty will remain high. Unless we bite the bullet and write down debts to levels that will allow private growth and employment, there will be no recovery.

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It is apparent not only that US banks have lost confidence in their European counterparts and have started shutting them out of inter-bank funding markets, but also that US officials are busy making matters worse by seeking to shift blame for America’s dire domestic performance on to influences from this side of the Atlantic. “Seventy-five per cent of the dark things happening in the world economy are because of the eurozone,” one of Geithner’s team said at Marseille….

Markets are convinced of several things: that Greece is politically incapable of meeting the austerity demands imposed by the EU and the IMF, and is now locked into a spiral in which its debt position can only become worse as its economy deteriorates; that a default on Greek sovereign debt is therefore inevitable sooner rather than later, and will impose losses on European banks, including the likes of Société Générale and Crédit Agricole of France, which may in turn need to be bailed out by their governments; and that the eviction of a bankrupt and incorrigibly irresponsible eurozone member is not only a technical possibility but an economic necessity if the single currency is to survive at all.

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It sounds like a good plan, but here’s the real risk: even after this restructuring, Greece ends up defaulting on those new EFSF-backed bonds. Remember, this is a solvency problem not a liquidity issue.

So the EFSF takes a loss, and maybe even its partner, the IMF. The debt is removed from bank balance sheets and put directly on the taxpayers of Europe and, via Washington’s 17% stake in IMF loans, Americans.

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The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan ”” while welcome ”” will change their minds any time soon.

That sentiment was echoed across numerous industries by executives in companies big and small on Friday, underscoring the challenge for the Obama administration as it tries to encourage hiring and perk up the moribund economy.

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Inside the narrow valley, Taliban insurgents were dug into the high ground and hidden inside a village, pouring down deadly fire at Afghan forces and their American advisers. Armed militants swarmed the low ground to try to finish off the troops.

[Marine Cpl. Dakota] Meyer’s team was pinned down near the village. He wasn’t going to wait and see whether they would get out. Defying orders to stay put, Meyer set himself in the turret of a Humvee and rode straight into the firefight, taking fire from all directions. He went in not once, but five times, trying to rescue his comrades.

During about six hours of chaotic fighting, he killed eight Taliban militants and provided cover for Afghan and U.S. servicemen to escape the ambush, according to a Marine Corps account of the events.

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While many Americans worry that the Social Security Administration won’t have enough money left to pay their benefits when they retire, the agency is doling out millions of dollars to people who aren’t even alive.

The Social Security inspector general estimates that the agency has made $40.3 million in erroneous payments to deceased beneficiaries — even though the administration had already recorded their deaths in its records. The estimate is based on a sample tested during its most recent audit in January 2008, the watchdog agency said.

One man told CNNMoney that he notified Social Security four years ago that his mother had passed away, but he still can’t get the agency to stop sending her checks every month.

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The Joint Select Committee on Deficit Reduction, aka super Congress or super committee, is Congress’s answer to its own inability to break the hold of partisan gridlock that took America to the brink of default on Aug. 2, prompting the first-ever downgrade of the nation’s credit rating.

The panel, which on Thursday holds an organizational meeting open to the public, has a sweeping mandate to propose cuts to spending and entitlements and recommend tax reform by Nov. 23. Congress must vote the package up or down ”“ no amendments or filibuster ”“ by Dec. 23, or trigger a $1.2 trillion package of automatic spending cuts, equally divided between defense and domestic spending.

“Never has Washington had an all-or-nothing panel that is empowered and backed by a firm timeline like this one is,” says John Ullyot, a public-affairs consultant in Washington and former GOP Senate staffer. “The starter pistol will fire right after Labor Day.”

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The job market is even worse than the 9.1 percent unemployment rate suggests.

America’s 14 million unemployed aren’t competing just with each other. They must also contend with 8.8 million other people not counted as unemployed ”” part-timers who want full-time work.

When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. It means they have room to expand without hiring.

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Perhaps Secretary [Hilda] Solis, in her zeal to bolster U.S. manufacturing, could use her influence in high places to urge an NLRB retreat on this absurd action against Boeing — and on similarly misguided administration pandering to organized labor.

After all, as she writes in her column: “In the Charleston area alone, more than 900 manufacturing jobs have been added since July 2010 — an increase of 4.3 percent.”

In other words, President Obama’s labor secretary is bragging, in part, about jobs added in the Charleston area by Boeing, even as President Obama’s NLRB acting general counsel takes Boeing to court for adding those jobs.

And that, by any logical analysis, doesn’t add up.

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You can check out the chart here.

Treasuries rose, pushing 10-year note yields below 2 percent, as the government’s payrolls report showed no jobs were added in August, stoking speculation that the Federal Reserve may consider additional stimulus measures to boost the economy.

U.S. 30-year yields fell to the lowest in since January 2009 as U.S. employment data were the weakest reading since September 2010. Minutes of the Federal Reserve’s Aug. 9 meeting released on Aug. 30 showed policy makers will debate stimulus options at their September gathering. German government debt rallied and credit defaults swaps rose, reflecting concern the European debt crisis is worsening.

“The markets were expecting some positive rate of job growth, and with that not materializing, everyone wants the safety of Treasuries,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “The nonexistent job growth has decreased fear of inflation and replaced it with increased fear of recession.”

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…[This potential] threat came into sharp focus last week, when shaking from the largest earthquake to hit Virginia in 117 years appeared to exceed what the North Anna nuclear power plant northwest of Richmond was built to sustain.

The two North Anna reactors are among 27 in the eastern and central U.S. that a preliminary Nuclear Regulatory Commission review has said may need upgrades. That’s because those plants are more likely to get hit with an earthquake larger than the one their design was based on.

In South Carolina, SCE&G’s V.C. Summer nuclear plant, about 25 miles northwest of Columbia, is among the 27 facilities possibly needing upgrades to better withstand earthquakes, the NRC records show. So are three reactors operated by Duke Energy near Seneca.

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Central banks and official bodies have parked record sums of dollars at the US Federal Reserve for safe-keeping, indicating a clear loss of trust in commercial banks.

Data from the St Louis Fed shows that reserve funds from “official foreign accounts” have doubled since the start of the year, with a dramatic surge since the end of July when the eurozone debt crisis spread to Italy and Spain.

“This shows a pervasive loss of confidence in the European banking system,” said Simon Ward from Henderson Global Investors. “Central banks are worried about the security of their deposits so they are placing the money with the Fed.”

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