The Obama administration has adopted new procedures for using the Defense Department’s vast array of cyberwarfare capabilities in case of an attack on vital computer networks inside the United States, delicately navigating historic rules that restrict military action on American soil.

The system would mirror that used when the military is called on in natural disasters like hurricanes or wildfires. A presidential order dispatches the military forces, working under the control of the Federal Emergency Management Agency.

Under the new rules, the president would approve the use of the military’s expertise in computer-network warfare, and the Department of Homeland Security would direct the work.

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Bank of America may be trying to bring down the curtain on the foreclosure furor, but there were numerous indications Tuesday that the problems would not move off-stage so quickly.

A day after the bank said it would once again pursue defaulting borrowers in the 23 states where foreclosures were overseen by the courts, judges in Florida said they were expecting even more challenges from defaulting homeowners.

The White House is convening a meeting of regulators and administration officials on Wednesday to review federal investigations into the foreclosure crisis, while state law enforcement officials emphasized their inquiry into flawed foreclosures was continuing.

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A string of Federal Reserve officials on Tuesday indicated the central bank will soon offer further monetary stimulus to the economy, with one saying $100 billion a month in bond buys may be appropriate.

While internal differences on the unconventional policy are still evident, the consensus view at the Fed appears to be that the economy is weak enough to warrant further support, most likely through increased purchases of Treasury debt.

The U.S. economy is expected to have grown just 1.9 percent in the third quarter, a level considered too low to bring down unemployment. The debt purchases would help lower long-term interest rates in the hope of boosting demand.

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“Stimulus” may be a dirty word in Washington these days, but don’t we need another boost to kick-start the economy?

Many economists say yes ”” even if it may not be politically feasible after the election. Economic historian Niall Ferguson, however, says a second round isn’t a good idea at all.

The Harvard historian tells NPR’s Guy Raz that while it might have some impact on unemployment figures, another stimulus also carries with it a tremendous risk.

“The risk is that you finally stretch the credulity of financial markets to the breaking point, and investors ”” not only in the U.S., but abroad ”” say, ‘You know what? U.S. fiscal policy really is out of control,’ ” Ferguson says.

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Set against the backdrop of post-9/11 paranoia, with a lead character who has lost his wife and daughter in the destruction at ground zero, Rubicon seems almost designed to fan conspiracy-theory flames among those who believe despite all indications that the Sept. 11, 2001, attacks were an inside job ”” a government conspiracy. Bromell knows that all too well.

“There are a lot of nuts out there,” he says ruefully. “Thomas Pynchon beautifully said in, I think, V, that what we got when we lost religion as a unifying glue in our culture was paranoia. Because we have to have something that suggests there are secret workings going on, and if we decide it’s not God, we have to put something in there. And he may be right: It’s less terrifying to look out into the world and see conspiracy, no matter how kooky it sounds, than to look out in the world and see nothing.”

And frankly, he thinks there are elements of society and the government whose activities could, broadly speaking, be described as conspiracy.

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The Obama administration backed away on Friday from a showdown with Beijing over the value of China’s currency that would have caused new frictions between the world’s only superpower and its largest creditor.

The Treasury Department delayed a much-anticipated decision on whether to label China as a currency manipulator until after the U.S. congressional elections on November 2 and a Group of 20 leaders summit in South Korea on November 11.

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The dollar tumbled against most major currencies on Thursday, prompting warnings that the weakness of the world’s reserve currency could destabilise the global economy and push other countries into retaliatory devaluations to underwrite their exports.

Increasing expectations the Federal Reserve will pump more money into the US economy next month under a policy known as quantitative easing sent the dollar to new lows against the Chinese renminbi, Swiss franc and Australian dollar. It dropped to a 15-year low against the yen and an eight-month low against the euro.

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A 2007 GAO study looked at the Postal Service’s use of facilities, and concluded that, “A 2005 contractor assessment of 651 randomly selected postal facilities revealed that two- thirds of these facilities were in less than “acceptable” condition, including 22 percent that were rated “poor.” Inspection of one facility in Dallas led the inspector to recommend that the building be immediately evacuated.

The decaying buildings provide a handy visual clue to the quality of service. Unfortunately, we don’t know how bad the service is, because the Postal Service collects data on its own service quality, but it refuses to make the data public. Isn’t it nice that your tax dollars pay for data that you’re not allowed to see?

The Postal Service’s ability to lose mail is, of course, legendary. Here is an example of how bad it has become: last week the American Postal Workers Union had to postpone their national election of officers because so many of the ballots were lost in the mail.

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… if, as appears to be the case, the overwhelming majority of homeowners facing foreclosure have fallen far behind on their payments, then it is a good deal harder to summon up the same moral outrage over reports that the banks and loan service companies cut corners, failed to keep the right documents and engaged in shoddy and even fraudulent practices. Just because the banks and servicers have screwed up doesn’t mean they and their investors are no longer entitled to get their money back.

Certainly banks and servicers should, at their own expense, be sent back to do things right. Those who engaged in fraud should be punished. And if there are legitimate questions about who owns a loan, those will need to be resolved before the proceeds of any foreclosure are distributed.

But none of that changes the basic reality that there are millions of Americans who took out mortgages they could not support on houses they could not afford. It may be necessary to postpone their day of reckoning for a few months to get the paperwork in order and ensure that all the proper procedures are followed, but the reckoning is inevitable.

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(Please note the above title is from the print edition–KSH).

A snapshot of the problems can be seen at the real estate agency that sold Ms. [Amanda] Ducksworth her home, Marc Joseph Realty, based in Fort Myers.

The agency had 35 deals that were supposed to close this month. As of Thursday, Fannie [Mae] had postponed 11 of them. Another handful of homes that did not have offers or were being prepared for market had also been withdrawn.

“If this wipes out half my inventory, that’s a scary thing,” said Bill Mitchell, the agency’s closing coordinator.

As he spoke, his computer pinged and another message from Fannie [Mae] came through about withdrawing a house. It had the subject line, “Unable to Market Notice.”

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The U.S. economy continued to lose jobs last month as small gains in the private sector failed to offset big cuts in government workers, pointing to a still sluggish recovery.

Private-sector employers added only 64,000 jobs in September, the Labor Department said Friday. Overall, nonfarm payrolls fell by 95,000 as temporary census workers were let go and state and local governments also cut employment.

he U.S. labor market remains in the doldrums 15 months after the recession ended. That could hurt Democrats in mid-term elections Nov. 2 and is likely to lead the Federal Reserve to take new steps to jump-start the economy at its next meeting Nov. 2-3. The September data was the last jobs report before these two key events.

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The dollar hit fresh lows against several currencies Thursday, raising pressure on global leaders to address worsening tensions among countries vying to keep their currencies weak and exports competitive.

The relentless rise of currencies from the Japanese yen to the Australian dollar is threatening to derail economic recoveries and global cooperation. In the six weeks since the Federal Reserve began discussing the prospect of further easing monetary policy, the dollar has fallen 7% against a basket of currencies.

Compounding matters are frustrations with the Chinese government’s unwillingness to allow its currency, the yuan, to significantly appreciate.

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As the U.S. prepares to embark on a new round of Federal Reserve quantitative easing, there are plenty of reasons to doubt that it is the right course for the economy and job creation.

Here’s another: The voyage might have to be aborted ”” or at least diverted ”” soon after QE2 leaves the dock because the Fed may be sailing into a political hurricane.

Even before the anticipated launch of the next round of Treasury purchases ”” it’s expected to be made official on Nov. 3 ”” the Fed’s unmistakable signals have fueled commodity price gains as the dollar has sagged….

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“We basically have two bankrupt parties bankrupting the country,” said the Stanford University political scientist Larry Diamond. Indeed, our two-party system is ossified; it lacks integrity and creativity and any sense of courage or high-aspiration in confronting our problems. We simply will not be able to do the things we need to do as a country to move forward “with all the vested interests that have accrued around these two parties,” added Diamond. “They cannot think about the overall public good and the longer term anymore because both parties are trapped in short-term, zero-sum calculations,” where each one’s gains are seen as the other’s losses.

We have to rip open this two-party duopoly and have it challenged by a serious third party that will talk about education reform, without worrying about offending unions; financial reform, without worrying about losing donations from Wall Street; corporate tax reductions to stimulate jobs, without worrying about offending the far left; energy and climate reform, without worrying about offending the far right and coal-state Democrats; and proper health care reform, without worrying about offending insurers and drug companies.

“If competition is good for our economy,” asks Diamond, “why isn’t it good for our politics?”

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….the law requires all plans to meet the 80% to 85% threshold (also known as the “medical loss ratio”). And that’s a problem for “mini-med” plans such as the ones offered by McDonald’s, which typically have high administrative costs — a consequence of insuring businesses with high employee turnover.

The threshold is also problematic for insurers that have a comparatively small number of customers, like Principal, which has sold fewer than 1 million health policies. The more customers an insurer has, the easier it will be to meet the threshold — its fixed administrative costs can be spread across more people.

McDonald’s is likely to obtain a waiver from the feds that will allow it to continue its current insurance plan, and another insurer (United Healthcare) has agreed to take over Principal’s customers after it exits the business. Still, the reports raise the question of why the feds should be setting minimum medical loss ratios in the first place.

After all, in a free-market system, profits should be limited by competition, not by regulation.

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The recession and housing costs cause many to move in together to help meet ends

The Grundy family seemed headed down the conventional path for American families: Daughter goes to college, graduates, gets a job and her own apartment.

Then something happened.

“She lost her job,” Vel Grundy says about daughter Monika, 25. “She kept looking and got very, very discouraged. She moved back home.”

Grown children returning home. Brothers and sisters moving in together. Families taking in grandparents. Friends living in the basement. Fueled by the dismal economy and high unemployment, more Americans ”” friends and families ”” are doubling up.

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The U.S. government will face pressure to bail out struggling states in the next 12 months, said Meredith Whitney, the banking analyst who correctly predicted Citigroup Inc.’s dividend cut in 2008.

While saying a bailout might not be politically viable, Whitney joined investor Warren Buffett in raising alarm bells about the potential for widespread defaults in the $2.8 trillion municipal bond market. She said state and local issuers have taken on too much debt and that the gap between public spending and revenue is unsustainable.

“People will think the federal government will bail these states out,” Whitney, 40, the founder of Meredith Whitney Advisory Group Inc., said in an interview on Bloomberg Television’s “In the Loop.” “It’s going to be an incredibly divisive issue.”

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“The Pentagon has been incredibly negligent,” said Peter Leitner, who was a senior strategic trade adviser at the Defense Department from 1986 to 2007. “There are plenty of early warning signs that China will use its leverage over these materials as a weapon….”

The rare earths are chemically similar elements, with names such as yttrium and dysprosium. China has the largest share of worldwide reserves, about 36 percent, and the U.S. is second, with 13 percent, the U.S. Geological Survey says. While the elements aren’t rare, they’re less frequently found in profitable concentrations, expensive for Western producers to extract and often laced with radioactive elements.

China produced 120,000 tons, or 97 percent, of the world’s 124,000-ton supply last year, according to the GAO. Half of that came from Baotou, said Kingsnorth. The raw elements have many applications. Neodymium is used by Chinese companies including magnet makers, who sell to U.S. suppliers of defense contractors.

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The House of Representatives by a wide margin passed legislation to penalize China’s foreign-exchange practices, sending a powerful warning to Beijing but risking a response that could harm U.S. companies and consumers.

The measure would allow, but not require, the U.S. to levy tariffs on countries that undervalue their currencies, which makes their goods cheaper relative to American products. A majority of Republicans lined up with Democrats to pass the bill on a 348-79 vote, highlighting lawmakers’ long-simmering frustration with Chinese trade practices as well as their sensitivity to the faltering U.S. economic recovery with an election looming.

The vote marks the strongest trade measure aimed at China to make it through a chamber of Congress after more than a decade of threats by lawmakers. But despite the broad support Wednesday, dim Senate prospects make it unlikely the measure would become law this year.

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Bob Moon: What’s the rush? That’s what investment consultant Chris Whalen was asking today at Institutional Risk Analytics. He says the government seems to be in a hurry to get the word out that it’s aiming to start unloading its $49 billion in AIG shares within the coming year. Whalen warns the market isn’t ready and won’t support it.

Chris Whalen: We’re trying to do a public offering of shares in a company that can’t stand by itself, that has to have government support. That’s not going to work.

Flooding the market with shares, he cautions, is a money-losing proposition. He says it’s the same catch-22 the government faces with General Motors, and has already run up against trying to sell its Citigroup shares. Gauging by AIG’s total market capitalization — the value of all outstanding shares — he argues the idea of taxpayers making all their money back is pie-in-the-sky.

Whalen: The market cap of this company is single digits. They owe us $100 billion, right? So what the market’s telling you is that the company is worth, today, a tenth of what they owe us.

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The bill, which the Obama administration plans to submit to lawmakers next year, raises fresh questions about how to balance security needs with protecting privacy and fostering innovation. And because security services around the world face the same problem, it could set an example that is copied globally.

James X. Dempsey, vice president of the Center for Democracy and Technology, an Internet policy group, said the proposal had “huge implications” and challenged “fundamental elements of the Internet revolution” ”” including its decentralized design.

“They are really asking for the authority to redesign services that take advantage of the unique, and now pervasive, architecture of the Internet,” he said. “They basically want to turn back the clock and make Internet services function the way that the telephone system used to function.”

But law enforcement officials contend that imposing such a mandate is reasonable and necessary to prevent the erosion of their investigative powers.

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Federal prosecutors in New York have opened a criminal probe of one of Afghan President Hamid Karzai’s brothers, raising the stakes in Washington’s sometimes-contentious dealings with the Karzai government.

U.S. officials said Mahmood Karzai has become a focus in a corruption probe handled by federal prosecutors in the Southern District of New York, an office that has a history of charging, extraditing and trying suspects in far-flung parts of the world, including Afghanistan.

ny move to indict Mahmood Karzai, who is a U.S. citizen, carries huge risks for American officials, whose anticorruption efforts have often provoked sharp backlashes from President Karzai.

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Winston Churchill once moaned about the long, dishonourable tradition in politics that sees commerce as a cow to be milked or a dangerous tiger to be shot. Businesses are the generators of the wealth on which incomes, taxation and all else depends; “the strong horse that pulls the whole cart”, as Churchill put it. No sane leader of a country would want businesspeople to think that he was against them, especially at a time when confidence is essential for the recovery.

From this perspective, Barack Obama already has a lot to answer for. A president who does so little to counter the idea that he dislikes business is, self-evidently, a worryingly negligent chief executive. No matter that other Western politicians have publicly played with populism more dangerously, from France’s “laissez-faire is dead” president, Nicolas Sarkozy, to Britain’s “capitalism kills competition” business secretary, Vince Cable (see article); no matter that talk on the American right about Mr Obama being a socialist is rot; no matter that Wall Street’s woes are largely of its own making. The evidence that American business thinks the president does not understand Main Street is mounting

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Two years after the peak of the financial crisis, the federal government swooped in to stabilize a crucial part of the credit-union sector battered by losses on subprime mortgages.

Regulators announced Friday a rescue and revamping of the nation’s wholesale credit union system, underpinned by a federal guarantee valued at $30 billion or more. Wholesale credit unions don’t deal with the general public but provide essential back-office services to thousands of other credit unions across the U.S. The majority of retail credit unions are sound, but they will have to shoulder the losses through special assessments over the next decade.

Friday’s moves include the seizure of three wholesale credit unions, plus an unusual plan by government officials to manage $50 billion of troubled assets inherited from failed institutions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.

Officials said the plan won’t cost taxpayers any money. Still, it marks the latest intervention by the U.S. government into a financial system weakened by the real-estate bust….

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“It’s like the American dream in reverse.” That’s how President Barack Obama, ten days after taking office last year, described the plight of Americans hit by the faltering economy. His catchy description fell short ”” the dream has turned into a nightmare for tens of millions.

So much so that an opinion poll this week showed that 43 percent of those surveyed thought that “the American Dream” is a thing of the past. It “once held true” but no longer does. Only half the country believes the dream “still exists,” according to the poll, commissioned by ABC News and Yahoo against a background of dismal statistics on growing poverty, inequality, unemployment, and Americans without health insurance.

Before turning to the gloomy numbers, a brief detour to the meaning of the phrase “the American Dream,” long a familiar part of the U.S. (and international) lexicon. The survey defined it as “if you work hard, you get ahead.” That’s neat shorthand for the concept that the American social, economic and political system makes success possible for everyone….

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The first major conference on health policy I ever attended, organized by The National Journal in Washington sometime in the late 1970s, focused on the rising cost of health care, which then absorbed close to 8 percent of gross domestic product and was threatening the unimaginable: to claim 10 percent or more of G.D.P.

Governors, senators, members of Congress, business executives, the heads of trade associations and leaders of unions representing health care workers made presentations, and all of them agreed that the growth of health care spending had to be curbed -”“ by what now is called “bending the cost curve….”

Over the decades, the mission has been a failure, naturally….

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Even as Wall Street rallies on the National Bureau of Economic Research announcement that the recession ended in June 2009, Gallup finds — more than a year later — that 88% of Americans believe now is a bad time to find a quality job.

The percentage of Americans holding these views about finding a quality job is as high now as it was a year ago, and higher than it was at this time in 2008, when the recession was fully underway. Three years ago, in September 2007 — just prior to the official beginning of the recession that December — 55% held this view of the job market.

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The Federal Communications Commission on Thursday approved the use of unlicensed airwaves in what it hopes will be a new market for high-speed Internet connections for smartphones, tablets and computers.

The order, approved unanimously by the five-member commission, is a win for high-tech giants Dell, Microsoft and Google, which have lobbied for the use of the airwaves known as “white spaces.” Those are parts of the broadcast spectrum that sit between television channels, and are valued as a potential home for amped-up versions of WiFi networks with longer ranges and stronger connections that can penetrate walls.

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The nation’s top counterterrorism officials were blunt. The threat from within—of Americans willing to commit terrorist acts— is growing. FBI Director Robert S. Mueller III told a congressional hearing today that a spike in recent terrorism cases is direct evidence of the evolving threat.

“Groups affiliated with al Qaeda are now actively targeting the United States and looking to use Americans or Westerners who are able to remain undetected by heightened security measures,” Mueller said. “It appears domestic extremism and radicalization appears to have become more pronounced based on the number of disruptions and incidents.”

Mueller appeared before the Senate Homeland Security and Government Affairs committee along with Department of Homeland Security Secretary Janet Napolitano and National Counterterrorism Chief Michael Leiter.

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It is a very scary picture.