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FRANKFURT (MarketWatch) — European Central Bank President Jean-Claude Trichet said Friday it was premature to pronounce the end of the financial crisis, saying that recent positive developments are underpinned by massive support from the public sector.

“I understand that the mood in the financial system is one of relief,” Trichet said in a speech at the Frankfurt European Banking Congress. “But as of today, it is too early to declare the crisis over.”

At the same time, however, Trichet said that the unprecedented liquidity it’s provided to banks — the total amount of outstanding ECB refinancing is around 60% bigger than it was before the financial market turmoil — won’t continue.

“We will make sure that the extraordinary liquidity measures taken are phased out in a timely and gradual fashion and that the liquidity provided is absorbed in order to counter effectively any threat to price stability over the medium to longer term,” he said.

Similar threats have been taken seriously by the market. Worries that Greek banks will have to move away from central bank funding have hit those stocks hard this week. See related story on Greece.

Trichet’s warning comes on the same day the ECB said banks will make it more difficult for banks to use asset-backed securities as collateral, as lenders will need at least two ratings from external agencies by next March for securities to qualify to be pledged against central bank loans.

While recent financial developments have been “more benign,” Trichet said that “a significant volume of official support underlies” them.

The ECB president emphasized that this support has been extended because of banks’ role in the economy rather than for the banks themselves.

“I understand that the mood in the financial system is one of relief. But as of today, it is too early to declare the crisis over.”

Jean-Claude Trichet, president of European Central Bank

Trichet said banks need to strengthen their balance sheets and they also need to lend, because the magnitude of public support has been provided for that purpose.

He also said that “compensation and bonuses must remain contained.”

The Frankfurt European Banking Congress brought together some of the major figures in the financial industry, including Germany’s Finance Minister Wolfgang Schauble and Josef Ackermann, the chief executive of Deutsche Bank .

And they mostly took a cautious tone.

“We can afford to think about the future of global finance,” Ackermann said. “The worst part of the financial crisis seems to lie behind us.”

However, he warned “it would be foolish to cheer too early,” as there is evidence of a “fragile recovery Business Card Holders.”

Schauble: self-supporting recovery is far away

In a speech to the bankers’ gathering Friday, Schauble said that the economy is far from a self-sustainable recovery.

“It’s too early to say we’re beyond the crisis. We’re still quite far away from a self-supporting [economic] recovery,” he said. “Problems in the banking sector are far from being sorted out.”

Schauble, who was appointed to lead the finance ministry in late October, said that moral hazard problems need to be addressed and additional regulations should be put in place for institutions playing a systemic role.

“The crisis has shown us that individual financial institutions have no longer been able to be disciplined by the market,” he said.

Schauble also discussed the responsibility of bankers to society and the need for values such as honesty and fairness in the financial world.

“We need a change in direction. We need an economy based on societal values,” he said. “We need bankers who do care that more than one billion people suffer from hunger.”

The global financial system should not be just a catalyst for maximizing profits, but it should also contribute to the equal distribution of wealth, he said.

“Selective tax relief will create incentives to boost consumption and investment,” Schauble said, commenting on the German economy. He also said that his government is committed to reducing the federal budget deficit starting in 2011.

In a panel discussion at the congress, Axel Weber, president of the Deutsche Bundesbank, defended the role of regulators and monetary policy.

“Monetary policy was not part of the culprit [for the crisis]. Banks have to adjust down their profit aspirations in a low-interest-rate environment,” Weber said.

Unrealistic profit aspirations of financial institutions are part of the problem, said Weber, who is also a member of the governing council of the ECB.

“The industry is increasingly asking the regulators to judge their core business,” he said. “If regulators have to judge all these decisions taken by banks, we’re removing a lot of responsibility from banks. It’s a bit of a shortcut to blame the regulators.”

Weber also said that regulators should try to move away from cyclicality.

“There’s cyclicality in regulation. Forget cyclicality,” he said, referring to increased calls for regulation after the outbreak of crises.

“It’s very important not to fall prey to influences to not do or do this and that.”

ECB’s Trichet: Too early to say crisis is over

WASHINGTON (Reuters) – Construction of new homes in the United States fell sharply last month, showing potential weakness in the economy's recovery, while consumer prices rose slightly more than expected.

The Commerce Department said on Wednesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 529,000 units, the lowest level since April and the percentage drop was the biggest since January.

Financial markets had expected starts to rise to 600,000 units. September's housing starts were revised upwards to a 592,000 unit rate from the previously reported 590,000 units.

"The trickle-down effect of the housing number is going to be amazing," said Dan Cook, senior market analyst at IG Markets, Chicago. "It's likely that more construction crews will get cut after this, and the supplier who supply those crews will be hurt as well. This is not good news at all."

A separate report from the Labor Department showed the Consumer Price Index rose 0.3 percent, a touch above market expectations for a 0.2 percent increase, after rising an unrevised 0.2 percent in September.

U.S. stock index futures turned negative after the data, while U.S. Treasury debt prices extended losses on the higher than expected inflation data. The U.S. dollar rose against the euro, and New York gold futures held gains near record highs.

Groundbreaking for single-family homes fell 6.8 percent last month to an annual rate of 476,000 units, the lowest since May. Starts for the volatile multifamily segment tumbled 34.6 percent to a 53,000 annual pace, extending the previous month's slide.

Compared to October last year, housing starts dropped 30.7 percent. The latest data will be a blow to the housing market, which had shown signs of stabilization after a three-year slump quick payday loans. Residential investment contributed to economic growth in the July-September period for the first time since 2005.

The U.S. economy expanded in the last quarter after four straight quarters of decline. The recovery in the housing market has been led by the popular $8,000 tax credit for first-time buyers, which has since been extended and expanded by the government.

It had been due to expire this month. In October, it was unclear whether the incentive would be extended and this could have contributed to the slide in construction activity last month.

New building permits, which give a sense of future home construction, fell 4 percent to 552,000 units in October. That compared to analysts' forecasts for 580,000 units. Compared to the same period a year-ago, building permits fell 24.3 percent.

The inventory of total houses under construction dropped to a record low 560,000 units last month, the department said, while the total number of permits authorized but not yet started tumbled to an all-time low of 93,900 units.

In the Labor Department report, core prices, which exclude food and energy, rose a more moderate 0.2 percent last month after increasing by the same margin in September.

"There's very little cost pass-throughs (in the CPI). Inflation is utterly tame," said Tom Porcelli, senior economist at RBC Capital Markets in New York.

A spike in prices on used cars and trucks and new vehicles accounted for more than 90 percent of the rise in core prices. It was the biggest increase in new vehicle prices since 1981.

(Reporting by Lucia Mutikani and Lisa Lambert; Editing by Neil Stempleman)

U.S. inflation edges up, housing starts fall sharply

NEW YORK, Nov. 17 (Xinhua) — U.S. stocks ended slightly higher on Tuesday as higher commodity prices offset Home Depot’s disappointing earning outlook. All major indexes rose less than 0 pay day loans.5 percent at the closing.

U.S. stocks trade slightly higher

NEW YORK – There’s a tug of war in the financial markets between investors who believe the economy is on its way to a strong recovery and those who believe a rebound is likely to be slow and bumpy.

The result: a spate of volatility in stock trading that’s likely to continue this week.

“That wide divergence in opinion can lead to wide swings in market prices,” said Greg Walker, an investment strategist in JPMorgan Chase & Co.’s private banking division.

For the past several weeks, upbeat investors have dominated the market, helping stocks move higher. However, the market’s momentum is only as strong as the latest economic or earnings report.

This week brings reports including readings on retail sales, manufacturing, housing starts and inflation. The Labor Department also provides its weekly look at unemployment benefits claims.

Tom Villalta, lead portfolio manager of the Jones Villalta Opportunity Fund, said economic reports are playing a heavy role in the day-to-day gyrations of the market as investors look for evidence to back up their views on the recovery.

“It’s a matter of bolstering one side over another,” Villalta said. “People are taking anything that comes out to bolster one opinion or another.”

Monday’s Commerce Department report on October retail sales is likely to set the tone for the week. Economists polled by Thomson Reuters predict retail sales rose 0.8 percent in October after a 1.5 percent drop in September.

Analysts generally agree stronger consumer spending is needed for any rebound. And disappointment is likely to send stocks falling.

“A steady stream of mediocre news from the consumer sector does not translate into high numbers for the stock market,” said Mike Schenk, senior economist for the Credit Union National Association.

Meanwhile, major retailers reporting third-quarter earnings will have their own take on the consumer. Home Depot Inc., Target Corp. and TJX Cos. are among those reporting.

Better-than-expected earnings and outlooks from Abercrombie & Fitch Co. and J.C. Penney Co. helped push stocks higher Friday. Wal-Mart Stores Inc. reported stronger-than-expected earnings Thursday, but said sales are likely to be little changed during the fourth quarter at stores open at least a year.

The Dow Jones industrial average ended the week up 2 Internet Payday loans.5 percent, while the broader Standard & Poor’s 500 index rose 2.3 percent. The Nasdaq composite index rose 2.6 percent.

Retailers’ sales outlooks are likely to be even more important than last quarter’s results.

“We’re particularly looking at guidance for the holiday season,” said Benny Lorenzo, CEO of investment bank Kaufman Bros. He said the market has factored in weak holiday sales for the second straight year, so any corporate outlooks that lift those hopes would have a positive effect on the market.

Consumer spending accounts for about 70 percent of all economic activity, so without a boost from shoppers, the economy is likely to stagger through the end of the year as government stimulus spending eases and there is nothing to take its place.

Meanwhile, a Commerce Department report on housing due Wednesday is expected to show home starts rose 2 percent in October to an annual rate of 600,000 units. Building permits, a sign of future activity, are expected to have increased 1 percent to an annual rate of 580,000.

Schenk said the housing market is still far from fully recovering. And that has hurt consumers’ confidence and changed their spending behavior.

Inflation data is expected to have the least effect on the market as most analysts believe the numbers will just affirm comments made recently by Federal Reserve Chairman Ben Bernanke that inflation is not a near-term issue.

The Producer Price Index, which measures inflation at the wholesale level is due out Tuesday and likely rose 0.4 percent in October. The Consumer Price Index, a measure of prices at the retail level, likely gained 0.2 percent. That report is due Wednesday.

Regional manufacturing data — the Empire State and Philadelphia Fed manufacturing reports — will be released Monday and Thursday, respectively. The Federal Reserve’s report on October industrial production, due out Tuesday, is expected to show 0.4 percent growth.

The Labor Department’s weekly tally of first-time claims for unemployment comes out Thursday. JPMorgan’s Walker said investors will be looking to see if the downward trend of the past few weeks continues.

Stocks market only as strong as latest data

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(Reuters) – Stock index futures pointed to a higher open on Wall Street on Monday, with futures for the S&P 500 up 0.84 percent, Dow Jones futures up 0.57 percent and Nasdaq 100 futures up 0.55 percent at 0925 GMT (4:25 a.m. EST).

Investors were bracing for U.S. monthly retail sales data, due at 1330 GMT (8:30 a.m. EST), seeking clues on the outlook for consumer spending ahead of the key Christmas period. They will also keep an eye on New York Federal Reserve's Empire State manufacturing survey, also due at 1330 GMT (8:30 a.m. EST).

Boeing Co (BA.N) will be in focus after EADS (EAD.PA) posted a 77 percent drop in third-quarter core earnings, as it battled a downturn in civil aviation and the damaging effect of the weak dollar along with delays to its A400M program.

General Electric Co (GE.N) and Comcast Corp (CMCSA.O) have agreed on the structure of the board for the proposed joint venture with NBC Universal, a person familiar with the matter said.

Bristol-Myers Squibb Co (BMY.N) said on Sunday it plans to split off its 83 percent stake in Mead Johnson Nutrition Company (MJN.N) in a deal that lets Bristol shareholders exchange their shares for Mead Johnson common stock.

General Motors Co. will announce on Monday it plans to start repaying a $6.7 billion loan to the U.S. Treasury by year-end due to modest operating improvements, a source knowledgeable about the situation said.

The Oslo bourse suspended trade in Tandberg (TAA.OL) shares pending a statement, with all eyes on Cisco System's (CSCO.O) bid for the Norwegian maker of video conferencing equipment, which has received scant support.

The dollar slipped on Monday as traders took a lack of agreement on currencies among Asian and U payday loan lenders.S. leaders as a cue to sell the greenback, even as speculation of a near-term yuan appreciation cooled.

Oil prices rose a dollar to above $77 a barrel, clawing back most of last week's 1.4 percent losses on a weaker U.S. dollar and improved sentiment over the economic outlook.

Gold prices hit a fresh record high above $1,130 an ounce on Monday and traders reported fund buying, with a weak dollar offering additional support.

On the earnings side, investors awaited results from Lowe's (LOW.N).

On the macro front, data showed Japan's economy grew 1.2 percent in the third quarter, nearly double the forecast and the fastest pace in more than two years.

Japan's Nikkei average (.N225) rose 0.2 percent on Monday, buoyed by retailers, while European shares were up 0.8 percent, flirting with a 13-month high, driven higher by commodities-related shares such as Rio Tinto (RIO.L) and Xstrata (XTA.L).

U.S. stocks rose in light volume on Friday to achieve a second straight week of gains as upbeat retail news reinforced hopes for strong sales in the key holiday season.

The Dow Jones industrial average (.DJI) added 73.00 points, or 0.72 percent, to end at 0,270.47. The Standard & Poor's 500 Index (.SPX) rose 6.24 points, or 0.57 percent, to 1,093.48. The Nasdaq Composite Index (.IXIC) rose 18.86 points, or 0.88 percent, to close 2,167.88. For the week, the Dow rose 2.5 percent, while the S&P 500 advanced 2.3 percent, and the Nasdaq gained 2.6 percent.

(Reporting by Blaise Robinson; Editing by Hans Peters)

Stock futures signal gains; retail sales eyed

SINGAPORE (Reuters) – President Barack Obama called on Saturday for a new strategy to rebalance global growth, but leaders around the Pacific rim, gathering for a weekend summit, took aim at signs of U.S. trade protectionism.

Obama, who arrived in Singapore late on Saturday for the Asia Pacific Economic Cooperation (APEC) summit, reiterated his call to redress the economic imbalances blamed by many for the global financial crisis.

The strategy calls for America to save more, spend less, reform its financial system and cut its deficits and borrowing.

"It will also mean a greater emphasis on exports that we can build, produce, and sell all over the world," Obama said in a speech earlier in Tokyo, his first stop on a nine-day Asian tour.

"We simply cannot return to the same cycles of boom and bust that led us into a global recession.

Fresh government figures on the U.S. trade deficit, which ballooned by more than 18 percent to $36.5 billion in September, could add urgency to Obama's efforts to seek greater export opportunities in China and other Asian countries.

Leaders of APEC, a 21-member grouping accounting for more than half of all global output and 40 percent of world trade, began their two-day summit on Saturday before Obama arrived and resolved to exert more political will to jump-start the Doha round of global talks, a news release after the meeting said.

They also "reiterated their commitment to reject all forms of protectionism," the release said. The homilies on Doha and trade protectionism are the usual templates of the yearly APEC meeting.

A row between two APEC members, Peru and Chile, soured the mood just as the summit was getting under way on Saturday.

Peru said it would leave Singapore early after recalling its envoy from Chile over charges a Peruvian military officer had spied for the Chilean government. The spying charges emerged as tensions between the South American neighbors ran high over a maritime border dispute.

The APEC meeting is the last major gathering of global decision-makers before a U.N. climate summit in Copenhagen in three weeks meant to ramp up efforts to fight climate change.

However, the latest draft of the leaders' declaration shows they had watered down the text on emissions cuts, dropping a reference to reductions of 50 percent by 2050, and pledging instead to "substantially" cut carbon pollution by 2050.

SNIPING AT WASHINGTON

Calling himself "America's first Pacific President," the Hawaii-born Obama signaled in Tokyo a commitment to the region, but with no specifics on how to re-invigorate his trade agenda.

He in fact largely missed the APEC summit's first day of business, after delaying his departure for Asia to attend a memorial service for soldiers killed in a mass shooting at a U.S. military base.

Obama went straight to an APEC dinner after arriving around 7:00 a.m. EST in Singapore, where leaders wore long-sleeved linen shirts reflecting the local Malay-Chinese culture, underscoring a tradition to don shirts from the host country at the summit's main dinner party cash til payday loan.

Although Obama proclaimed his faith in open markets, the sniping of regional leaders ahead of his arrival underlined the challenge he faces to convince them it's more than lip service.

After taking office in January, the U.S. president focused first on a huge stimulus to the economy and then on a domestic agenda that so far has included little attention to trade.

No end is in sight for the Doha trade round, now eight years old, despite pledges by Obama and others to get a deal by 2010.

Mexican President Felipe Calderon, singling out Washington for trends "going in the opposite sense of free trade," said protectionism was a major threat to the global economy, citing as an example increasing "buy American" clauses in U.S. legislation.

Chinese President Hu Jintao said Beijing had done its part to lead the world out of recession but had been hit by trade probes and protectionist barriers, while Russian President Dmitry Medvedev took aim at barriers to trade.

Economists said Washington was missing the trade boat.

"There is a lot of activity in the region and this is all in the absence of U.S. engagement," said C. Fred Bergsten, president of the Peterson Institute for International Economics, saying U.S. inaction on trade was giving China and Asia an opening to forge trade agreements amongst themselves.

"What the Asians are hoping is that with this trip, Obama will begin the process of re-engaging with Asian in economic terms."

China's policy of pegging the yuan currency to a weakening dollar — which makes Chinese exports comparatively cheaper — has also come under fire at the APEC meeting. Obama has said he will raise the issue on a visit next week to China.

Aside from endorsing further moves toward free trade, the 21 leaders of APEC will agree to stick with economic stimulus policies until "a durable economic recovery has clearly taken hold," according to the draft declaration.

Obama will undoubtedly be in the limelight on Sunday, the summit's final day, and when the leaders pose for a traditional "family photo." Some participants feel the Bush administration gave insufficient attention to the region, a point Obama addressed in Japan without mentioning his predecessor.

"I know that the United States has been disengaged from these organizations in recent years. So let me be clear: those days have passed … the United States expects to be involved in the discussions that shape the future of this region, and to participate fully in appropriate organizations."

(Additional reporting by Neil Chatterjee, Patrick Markey, David Fogarty, Lucy Hornby; Writing by John Chalmers; Editing by Dean Yates)

APEC supports stimulus; tries to push climate change

NEW YORK (AFP) – US stocks got a lift Friday from strong corporate news and data showing a rise in global trade flows, helping Wall Street cap a second straight week of solid gains.

The Dow Jones Industrial Average climbed 73.00 points (0.72 percent) to close at 10,270.47, rebounding from its first loss in seven sessions on Thursday and giving the blue chips a weekly gain of 2.46 percent.

The tech-heavy Nasdaq added 18.86 points (0.88 percent) to 2,167.99 and the broad Standard & Poor's 500 index rose 6.24 points (0.57 percent) to 1,093.48.

Momentum was helped by results late Thursday from Disney, which reported a quarterly profit of 895 million dollars that was down 25 percent from a year ago but better than expectations.

Other firms, including retailer Abercrombie & Fitch, and Agilent Technologies also delivered solid results.

"Positive earnings offset a weaker than expected reading of consumer confidence," said Scott Marcouiller at Wells Fargo Advisors.

Disappointing the market was the University of Michigan survey on consumer sentiment, whose index fell to 66.0 from 70.6 in October, and caused the market to waver.

A separate report showed the US trade gap rose to 36.5 billion dollars.

Although a higher trade deficit is normally negative, the data "is being viewed by the market in a positive context given its underlying message conveying a pickup in global trade," said Patrick O'Hare at Briefing.com.

Other analysts pointed out that a higher deficit would lead to lower US economic activity and a possible downgrade to gross domestic product no fax cash advance.

"The widening deficit is a warning that as US domestic demand increases, imports will bounce more than exports," said economist Nigel Gault at IHS Global Insight.

"That means that the trade deficit will keep widening, and that trade will be a drag on growth."

Among stocks in focus, Disney rallied 4.78 percent to 30.44 dollars after the media-entertainment giant beat most forecasts for quarterly earnings, helped by strong results from its broadcast units.

In retail, JC Penney leapt 6.19 percent to 31.21 dollars after the discount chain reported earnings shy of expectations but said it improved profit margins and kept its guidance forecasts for the coming months.

Specialty retailer Abercrombie & Fitch surged 10.66 percent to 40.68 dollars after its forecast-beating results.

Agilent rallied 4.3 percent to 28.61 dollars after the maker of electronic testing equipment reported profits better than market forecasts and raised its guidance.

Dow component McDonald's added 2.27 percent to 63.58 dollars after upbeat comments from its executives about growth targets.

Bonds firmed. The yield on the 10-year US Treasury bond eased to 3.429 percent from 3.446 percent Thursday and that on the 30-year bond dropped to 4.356 percent from 4.386 percent. Bond yields and prices move in opposite directions.

Upbeat corporate news fuels Wall Street rebound

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“BILL GATES: The Real Secretary of Education,” ran a recent headline on the state of education reform in America, prompted by the unhappiness of teachers’ unions about the growing influence of the Bill and Melinda Gates Foundation in Washington, D.C.. This reflects a new phase in the development of this generation of megadonors, in which the success or failure of their philanthropic agendas may be determined by their ability to master the dark arts of politics.

For the super-rich who are relatively recent converts to philanthropy, Mr. Gates chief among them, their practice of what we call philanthrocapitalism began with a belief that the sort of thinking that earned them success in business could be applied to the biggest social problems on the planet. As they had made their fortunes through innovation and market forces — like personal computing or investment — their initial efforts at philanthropy tended to try to bypass government.

When Mr. Gates spoke about his philanthropy to the Harvard graduating class of 2007, his speech echoed the language of Microsoft, focusing on finding the “ideal technology” with the right “application” to tackle problems like malaria. Yet experience has taught Mr. Gates and others that, compared with government budgets, even their vast fortunes are a drop in the bucket. (“We’re a tiny, tiny organization,” says Mr. Gates of his foundation, which gives away $4 billion a year.) If they want to achieve change to match their sweeping ambitions, they have to start exercising disproportionate influence in politics.

When he began his philanthropic life a decade or so ago, Mr. Gates was driven by his conviction that providing incentives for pharmaceutical companies to develop drugs for the diseases of the poor world would be enough to avoid millions of deaths. He did not give much thought to the practicalities of getting health care systems in poor countries to deliver the drugs and educate the needy to use them. Likewise, he assumed that if his giving succeeded in developing a better sort of school for deprived urban areas in America, then that model would be widely adopted without his having to think about the political economy of education reform.

That was before he went full time at the helm of his foundation last year. Since then, Mr. Gates has devoted a growing amount of his time and his public speaking to calling for political change: one day making the economic case for American taxpayers to keep investing in global health, the next urging Arne Duncan, who actually is the education secretary, to stay true to the path of change despite the opposition of the teachers’ unions.

Mr. Gates is not alone in this intensifying political focus. Jeff Skoll, who made his fortune as the first chief executive of eBay, has dedicated his giving and his for-profit business to changing public opinion through movies with a message; he was the backer of Al Gore’s Oscar-winning climate change documentary, “An Inconvenient Truth.” Pete Peterson, who made his fortune as a co-founder of the private equity firm Blackstone, has created a foundation dedicated to promoting prudent fiscal policy in America and has hired David Walker, a former comptroller general of the United States, to lead what in current circumstances seems to be a Quixotic crusade.

Then there is Mayor Michael R. Bloomberg, who has said he regards spending hundreds of millions of his own dollars on three elections as an act of philanthropy. By not having to raise money from others, he says, he is spared the need to promise things to backers that leads many politicians astray. Mr. Bloomberg has given away similar amounts through his foundation to fight smoking around the world, yet he says that this more conventional philanthropy has achieved none of the impact he had by getting elected and banning cigarettes from public places — a case study in why philanthropists are increasingly seeking political influence no fax needed payday loans.

The one certain consequence is that these philanthrocapitalists will become increasingly controversial — on specific issues and also in a broader sense by unleashing deep-rooted concerns among the public about plutocracy.

Conspiracy theorists muttered loudly in May when Mr. Gates, Warren E. Buffett and David Rockefeller held a secret summit meeting in New York attended by George Soros, Ted Turner, Oprah Winfrey and Mr. Bloomberg, among others. In his re-election last week, Mr. Bloomberg’s reduced margin of victory seems to have reflected concern about his use of his own money and overturning term limits.

This is part of a long cycle. Philanthropy first took off in America in the late 19th century as tycoons like Andrew Carnegie and John D. Rockefeller responded with good works to populist attacks on them as robber barons. Later, when the new foundations started to pay for research into the fundamental causes of poverty and racism in America, and propose radical policy responses, they were accused in Congress of trying to undermine American capitalism — a critique reprised in the 1960s, when right-wing populists turned on the Ford Foundation and its liberal sympathies. Then, in the 1970s and 1980s, liberals criticized right-wing organizations like the John Olin Foundation for financing the conservative revolution that produced Reaganism and Thatcherism.

ON the face of it, the simplest way to address concerns about plutocracy would be to ban the rich and their foundations entirely from political activism. (Current laws merely ban tax-exempt foundations from overtly partisan activities.) Yet, assuming it could be done in practice, that would deprive society of the talents of some of the world’s most successful and effective people, and their ability to take the sort of higher risk and longer-term bets needed to find solutions that politicians with elections every few years tend to shrink from. That is why we should hope that philanthropists like Mr. Gates develop a thick skin, rather than back off at the first sign of political opposition. The role model here is George Soros, who calls himself a “political philanthropist” and boasts of enemies who include the Fox News commentator Bill O’Reilly and Vladimir Putin.

The philanthrocapitalists could go some way to solving this problem by accepting that secret meetings are only going to excite conspiracy theorists. Transparency may be a pain, but it will save them trouble in the long run. Yet, like fixing schools or ending malaria, establishing the legitimacy of philanthropy to take on controversial challenges is a problem that they cannot tackle on their own.

It has been 40 years since Congress debated the role of philanthropy in society, resulting in the Tax Reform Act of 1969, which defined the role and responsibilities of foundations. On that occasion, the Rockefeller family set up its own commission to contribute to the public debate, led by Mr. Peterson. It is time for Mr. Peterson, along with Mr. Gates, Mr. Buffett and the other big donors, to use their clout to start a similar debate about the role of philanthropy for the next 40 years. This should be done in tandem with the Obama administration, which has gone further than any of its predecessors in seeking to forge partnerships with philanthropists and ought to welcome the opportunity to define the new social contract between the rich and the rest in the 21st century.

Matthew Bishop and Michael Green are the authors of

(Reuters) – Stock index futures pointed to a higher opening on Wall Street on Wednesday, with futures for the S&P 500 up 0.9 percent, Dow Jones futures up 0.8 percent and Nasdaq 100 futures up 0.8 percent at 4:54 a.m. EST.

On the macro front, data showed on Wednesday Chinese factory output growth surged to a 19-month high in October, signaling that the world's third-biggest economy has firmly put the worst of the global economic crisis behind it.

United Parcel Service Inc (UPS.N), the world's largest package delivery service, expects growth in its volumes next year as the global economy gradually recovers, its chief said on Wednesday.

Private equity firm TPG Capital could partner with American Airlines in a minority investment in Japan Airlines (9205.T) to prevent its defection to a rival airline group, the chief financial officer of American parent AMR Corp (AMR.N) said.

McGraw-Hill Inc (MHP.N) is committed to its Standard & Poor's unit, and welcomes tougher regulation aimed at further transparency and accountability in the credit ratings industry, its chairman said on Wednesday.

Unhappy over constraints imposed by U.S. government overseers, American International Group Inc's (AIG.N) chief executive, Robert Benmosche, told the company's board last week that he was considering stepping down, the Wall Street Journal said, citing people familiar with the matter.

Oil eased below $79 a barrel on Wednesday, as mildly bearish October loans data from China offset signs of robust industrial output and retail sales from the world's second-largest energy consumer.

The dollar hit a 15-month low against a currency basket on Wednesday as the U.S. currency came under broad selling pressure versus its higher-risk counterparts on the view that the global economy may be improving.

U.S. Treasury Secretary Timothy Geithner said on Wednesday he believes strongly in the need to maintain a strong dollar and said the United States was determined to get its budget deficit down payday loan.

High unemployment and reluctant consumers will likely make an incipient U.S. economic recovery weak and erratic, top Federal Reserve officials said in a string of speeches across the country on Tuesday.

Japan's Nikkei average (.N225) ended flat, while European stocks were up 1.1 percent in morning trade, powered by buoyant banking shares after results from Credit Agricole (CAGR.PA) and UniCredit (CRDI.MI) pleased investors.

Shares in Toll Brothers Inc (TOL.N) rose more than 6 percent in extended trading on Tuesday after the homebuilder posted preliminary results. Shares last traded up 5.9 percent at $19.47.

On the earnings front, Computer Sciences Corp. (CSC.N), Macy's (M.N), The Progressive Corp. (PGR.N) and Applied Materials (AMAT.O) feature among the companies due to report results.

U.S. stocks closed mostly lower on Tuesday as differing views on whether the market can build on recent gains stalled the S&P 500's six-day winning streak.

The Dow Jones industrial average (.DJI) gained 20.03 points, or 0.20 percent, to end at 10,246.97. The Standard & Poor's 500 Index (.SPX) shed 0.07 of a point, or 0.01 percent, to 1,093.01. The Nasdaq Composite Index (.IXIC) dropped 2.98 points, or 0.14 percent, to close at 2,151.08.

Wednesday's session was expected to be quiet because of the Veterans Day holiday. The U.S. bond market and government offices will remain closed, while other markets will trade normally.

(Reporting by Blaise Robinson; Editing by Greg Mahlich)

Stock index futures point to early gains on Wall Street

Two major agricultural programs in Africa are partnering to bolster food security on the continent. They say African governments have to increase their investment in agriculture in order to combat the hazards caused by climate change.  The Alliance for a Green Revolution in Africa, also known as AGRA, is teaming up with the New Partnership for African Development, or NEPAD. Former UN Secretary General Kofi Annan in Nairobi, Kenya (File)Kofi Annan, former United Nations Secretary-General and Chairman of AGRA, says the move will help African governments to close the gap between intention and action.Under the Comprehensive Africa Agriculture Program, African leaders have agreed to allocate 10 percent of their national budgets to agriculture. President of AGRA Namanga Ngongi says many African governments are not meeting that target. But, speaking to VOA on the phone from Nigeria’s capital Abuja, he says investment in the agricultural sector is growing. “There is a general trend in Africa today of making increasing investments in agriculture. The average has gone from four percent of national budgets to probably 5.5 percent today of national budgets being invested in agriculture,” he said.Ngongi says that together the two organizations will work with governments to increase the productivity of smallholder farmers growing Africa’s staple crops cheap payday advance. He says with investment in new technology, African smallholdings will be much more productive.”There are technologies on the shelf today that, if these were available to the majority of smallholder farmers, especially the women, they would be able to make a dramatic increase in their productivity,” he said.A man walks through a dead maize field due to drought, near Kenya’s Mau forest in this 05 Oct 2009 file photoNgongi says climate change is already starting to have major affects on agriculture in Africa. He says new crops and technologies will be needed to manage the change.”The need to focus on agriculture is growing because of climate change. There will be more and more frequent droughts, more frequent floods, and probably more also destruction,” he said.International aid agencies say millions of people face starvation in East Africa because of a drought that some scientists say may be a result of climate change. The United Nations Food and Agriculture Organization has said a total of 20 million people are dependent on international aid in the region.

New Africa Partnership to Boost Agriculture

For any industry, there has to be at least some good news any time Congress votes to expand the market by tens of millions of customers.

But the business world found plenty to complain about Sunday, as it assessed the House bill that would make sweeping changes in the health care system and extend insurance coverage to millions more Americans.

Insurers do not like the provision to create a new government-run insurance program. Drug makers oppose billions of dollars in rebates they would have to give to the government over 10 years. Makers of artificial hips, heart defibrillators and other medical devices are not particularly happy about the proposed 2.5 percent tax on their products.

And employers large and small oppose rules that, for many of them, would make health care coverage — long a job benefit — become a federally mandated obligation.

That is why, as attention now shifts to the Senate, where Democratic leaders are trying to merge two bills into one, virtually every business group with a stake in the outcome will be hoping to strike at least a slightly better deal than they found in the House version.

And they may indeed get a break from the Senate, where the need for Democrats to compromise to win 60 votes may ensure a more business-moderate outcome.

And yet, many analysts said on Sunday that even the House bill was not as bad for business as many in the health care industry might have feared when the overhaul effort began many months ago.

“All industries stand to gain from this legislation,” Steven D. Findlay, senior health policy analyst with Consumers Union in Washington, said in an interview. “They’re going to continue to fight their narrow issues and get the best that they can get. But all of them are aware they stand to gain significant new business and new revenue streams as more Americans get health coverage and money flows into the system for them.”

Of course, new revenue streams apply only to companies in the business of selling medical goods and services. To employers required to provide worker health benefits or else, in many cases, pay some sort of financial penalty, the House legislation offers little to cheer about.

Employer groups complained on Sunday that the House bill would impose insurance obligations while doing little to rein in the medical costs that help drive premiums higher year after year. In fact, those groups argue, the bill’s creation of a government-run insurance program, which may pay doctors and hospitals less than private insurers do, could end up shifting even more medical costs to the private insurance system that employers use.

“This won’t just hurt business, it will hurt millions of workers who have coverage through their employers,” said John J. Castellani, president the Business Roundtable, a group of chief executives of some of the nation’s biggest companies.

And the National Federation of Independent Business, representing many small businesses, said it was furious with the legislation. Susan Eckerly, senior vice president of the federation, attacked mandates, which she called punitive, and “atrocious new taxes.” The legislation, she said, was “a failed opportunity to help small-business owners with their No. 1 problem — skyrocketing health care costs.”

Another group, the Small Business Majority, praised the legislation but said the Senate needed to take more steps to lower costs.

Employers hope the final Senate legislation ends up looking more like the bill the Finance Committee passed, which does not require companies to insure their workers.

Meanwhile, the health insurance industry has been increasingly vocal about the emerging shape of the legislation, and it was sharply critical of the bill that passed on Saturday night.

“The current House legislation fails to bend the health cost curve and breaks the promise that those who like their current coverage can keep it,” Karen M. Ignagni, the chief executive of America’s Health Insurance Plans, the industry trade association, said.

The reference to a broken promise refers, in part, to people enrolled in privately offered Medicare Advantage insurance plans, which would lose federal subsidies under the House bill free business cards. Ms. Ignagni warned of cuts that would “force millions of seniors out of the program entirely.”

But the promise reference also refers to the bill’s provision of a new government-run insurance plan that would compete directly with the health plans offered by private insurers. The insurance industry has long opposed such a move and warns that it will eventually force many people with private insurance into the government-run program.

That “public option,” as it is known, was also in the Senate health committee bill approved in July. And the Senate majority leader, Harry Reid, Democrat of Nevada, has also signaled that he intends to include some kind of public plan in whatever Senate legislation is reached.

But some observers say the House legislation is much less of a threat than the industry had feared. While insurers were worried that the government plan would be able to piggyback on the Medicare program in being able to demand lower prices than the private insurers get from doctors and hospitals, the House legislation does not give the government plan the same bargaining power as Medicare.

“The ability of that program to gain incredible market share and have the clout to severely undermine the market is minimized,” Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm in Alexandria, Va., said in an interview.

Erik Gordon, a business professor and industry analyst at the University of Michigan, said insurers would find it difficult to price their new risks but might not be hurt too much by the competition — considering how many new customers they would have.

The drug industry expected harsh treatment from the House and got it. The bill would require drug makers to pay much more in rebates and discounts than in the $80 billion, 10-year deal that the industry struck in June with the White House and the chairman of the Senate Finance Committee, Max Baucus. The House bill tacked on $60 billion or so in rebates over 10 years, raising the total to around $140 billion.

But the White House and Mr. Baucus have said they will stay with their deal. It remains to be seen whether it survives the melding of Senate bills being directed by Mr. Reid.

“A good critic doesn’t write his review at the end of the first act of a play,” Ken Johnson, senior vice president of the pharmaceutical trade group the Pharmaceutical Research and Manufacturers of America, said in an interview. “We’re hoping the second act is a lot better.”

And while the House legislation allows direct government negotiation of Medicare drug prices — something specifically precluded in the Senate Finance bill — it does not allow Medicare to create a formulary, or list of limited drugs. Mr. Findlay, of Consumers Union, said that largely neutered Medicare’s price-negotiating power, although it would represent a first step down the price-setting path that the industry is certain to fear.

In a victory for the biotechnology drug industry, the House bill would give biotech drugs, which can cost tens of thousands of dollars a year, protection from generic competition for 12 years.

Doctors were left holding a mixed bag. The American Medical Association supported the House legislation. But the doctors’ group did not get its quid pro quo — the restoration of $210 billion in cuts to physicians’ Medicare fees over the next 10 years, which were already scheduled before the current effort. Attempts in the House and Senate to restore those cuts have been set aside at least temporarily because the issue has been seen as a political distraction from the main health care overhaul effort.

Barry Meier and Andrew Pollack contributed reporting.

News Analysis: The Medical Industry Grumbles, but It Stands to Gain

British Airways said on Friday that it would cut an additional 1,200 jobs in the coming months, raising the number of planned staff reductions to nearly 5,000 as the British carrier wrestled with what its chief executive called the toughest year in the history of aviation.

The announcement came as the airline said its net loss grew to a record £208 million ($345 million) for the six months to Sept. 30, from £49 million a year earlier.

Revenue for the period — which spans the peak summer travel season — slid nearly 14 percent, to £4.1 billion, as the carrier pared seat capacity by 3.5 percent and cargo sales plunged by almost a third.

British Airways announced plans in July to shed 3,700 jobs in Britain by the end of March 2010 through voluntary buyouts and to move about 3,000 workers to part-time work. To date, about 1,900 of the positions have been eliminated, Cathy West, an airline spokeswoman, said.

The additional 1,200 reductions revealed Friday would come from the carrier’s overseas work force, she said. Taken together, the cuts represent about 13 percent of British Airways’ current staff of 39,000.

The new cuts come as the airline’s unions are threatening job actions over changes to employees’ contracts and a proposed two-year pay freeze low fee pay day loans. A British court ruled Thursday that the airline could move ahead with plans to reduce cabin crews on its long-haul flights, rejecting an injunction sought by Unite, a trade union that represents the carrier’s 14,000 flight attendants.

Results of a union vote on whether to authorize a strike are expected on Dec. 14. Unite representatives did not immediately return calls seeking comment.

The International Air Transport Association estimates that the world’s airlines will lose about $11 billion in 2009 as the global recession sharply reduces air traffic.

Revenues from first- and business-class travel — the mainstay of British Airways’ business — have been especially hard hit, with yields falling 18 percent in September from a year earlier. Yield represents the revenue per seat and distance traveled.

“This year is the most difficult year in the history of the airline industry,” the airline’s chief executive, Willie Walsh, told the BBC in an interview.

Job Cutbacks Rise by 1,200 at a Carrier in Britain

Hot News: A Not-So-Guilty Pleasure

THE American love affair with cars seemed to come to a sudden end this year, when car sales became less important to the economy than at any time since the government began counting more than 40 years ago. So far, there are only limited indications of a renewal of the relationship.

The cash-for-clunkers program, in which the federal government offered cash to people who got rid of old, inefficient cars and bought new ones, helped cause a small increase in purchases by consumers. But as the accompanying charts show, there are only the slightest indications of a gain in purchases by businesses.

The government figures on car purchases relative to gross domestic product go back to 1967. In no quarter from then until 2006 did auto sales account for less than 3 percent of G.D.P. But earlier this year, that proportion fell to less than half that figure.

In the third quarter of this year, helped by the cash-for-clunkers program, that percentage climbed back to almost 2 percent, but it is still well below the historic range.

In one way, that plunge provides hope for rapid growth, someday, as sales rise to levels appropriate for an economy with 300 million people.

Figures released this week indicated that vehicles sold at an annual rate of fewer than 11 million in October. But, as Larry Summers, the director of President Obama’s National Economic Council, pointed out in a speech at the Economic Club of New York last week, the country needs more than 14 million new vehicles each year to replace cars that are wearing out and to keep up with population growth fast payday loan no faxing.

Therefore, he said, sales would come back. But he offered no forecasts as to timing.

One delaying factor could be that the auto companies in recent years engaged in major discounting, particularly in sales to rental car companies and other corporate fleets, to keep volume up. The extra cars produced then may delay the need for increased production now.

The plunge in auto sales this year was a major factor in the sharp reduction in the American trade deficit. Adjusted for inflation, the deficit in motor vehicle trade fell from an annual rate of more than $110 billion a year in 2006 to an annual rate of just $36 billion in the first three months of 2009, in large part because automobile imports plunged. With imports again rising, the deficit has moved back to $56 billion. The figures are in 2005 dollars.

Floyd Norris comments on finance and economics in his blog at norris.blogs.nytimes.com.

Off the Charts: Car Buyers Come Back, but Not in Droves

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The United States economy shed 190,000 jobs in October, and the unemployment rate reached a 26-year high of 10.2 percent, up from 9.8 percent in September, the Department of Labor said Friday in its monthly economic appraisal.

While the pace of the job losses has slowed significantly since the peak of the recession last winter, the unemployment rate, which measures the number of people actively seeking work, continues to climb, and economists do not foresee relief until well into next year.

“There’s no doubt that the slashing and burning of jobs has abated quite a lot,” said Allen L. Sinai, the founder of Decision Economics, a research firm. “The economy is recovering, but it is a very soft recovery.”

The agency also revised September’s losses to 219,000 from 263,000.

Dean Baker, a director for the Center for Economic and Policy Research, said he did not expect declining unemployment rates until next spring. “We may be looking at very high levels,” Mr. Baker said, “barring a policy response, for several years into the future.”

The dissonance of economic renewal, with steep job losses coming even as production intensifies and companies show better-than-expected profits, has placed policy makers in a delicate position.

On Thursday, in anticipation of the unemployment report, Congress overwhelmingly extended benefits for jobless workers for up to 20 weeks. That will soothe the short-term financial pain of many families, but demands for a new wave of government relief may intensify if companies continue to cut back.

So far, the federal stimulus package has injected billions into local economies, giving states money, for instance, to finance construction projects or retain teachers. The housing and auto sectors have been propped up with government credits meant to encourage spending. But weak consumer demand and hefty labor costs are still forcing many employers to slash positions and reduce hours to survive.

The recession has forced many Americans to settle for part-time work because companies are reluctant to add full-time employees. The underemployment rate, which includes part-time workers, the jobless, and those who have given up on searching, was 17.5 percent in October — the highest level since at least 1994 payday advance.

Even as unemployment remains high, there are signs that critical industries are gaining steam.

The manufacturing sector, considered the engine of the economy, was given its most optimistic bill of health in three years by a private group on Monday. Manufacturers added jobs for the first time in 15 months in October, the group said, largely by bringing in temporary workers or recalling laid-off workers. Economists say that the first sign of recovery in jobs will be when more companies begin bringing in temporary workers.

The economy expanded at a 3.5 percent annual rate in the third quarter, ending a year of back-to-back contractions. But whether that economic expansion will translate into immediate job creation is still widely debated.

“You can’t force businesses to use their profits to hire,” Mr. Sinai said.

Consumer confidence is still low, and many economists believe that economic turnaround will not come until consumers feel at ease again. With families taking home smaller paychecks each month, that could take time.

For the millions of Americans who are without work, Friday’s data did little to change the realities of their daily lives — mornings spent combing online job sites, afternoons devoted to fighting off bill collectors. Their résumés will still go out, their interviews will go on, and, more likely than not, their phones will not ring.

Melissa Grodhaus, 42, a laid-off cemetery worker from Winona, Ohio, said she had filled out 150 applications since she lost her job nearly two years ago. She struggles to keep up with mortgage payments and utilities bills, and she must also take care of her three children.

“There’s nothing here,” she said. “I can’t see anything worse than it is right now.”

Ms. Grodhaus has started selling old clothes on eBay, and she has told her children she cannot afford to pay the fees for school sports this year. Every two weeks, when the local church brings out food baskets, she rushes to pick up her share. They are gone within minutes, she said.

Jobless Rate Hits 10.2% in October, a 26-Year High

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