Barack Obama says No more tax sops for outsourcing firms – its significance

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US president Barack Obama has served notice that he would end the tax breaks for corporations that ship jobs abroad

I can understand Obama’s standpoint. It is the trade union folks who campaigned so very effectively for Obama and they are to be protected, but it goes against all the principles and policies that America has stood for all these years. America has always been a proponent of free enterprise and globalization. After all, it is a country built by immigrants by and large. All of this is changing because of the protectionist attitude showcased now.

Sample these comments from Marc Faber on the US economy.

“The federal government is sending each of us a $600 rebate.
If we spend that money at Wal-Mart, the money goes to China.
If we spend it on gasoline it goes to the Arabs.
If we buy a computer it will go to India.
If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala.
If we purchase a good car it will go to Germany.
If we purchase useless crap it will go to Taiwan and none of it will help the American economy.
The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US.
I’ve been doing my part.”

These are really extraordinary times for the Americans as well as the President but these cutbacks on tax sops are an extreme step. This is more a populist move that we are used to in Indian politics. Let us dwell on how this affects Indian corporations. I would say that the effect will be huge, because close to 50% of the Indian service exporters revenue comes from the US and it is 50% of $100 billion economy that we are talking about and the impact necessarily will be huge.

Outsourcing in India may take a beating due to Obama's tax policies

Outsourcing in India may take a beating due to Obama's tax policies 

Zeenews Bureau 

New Delhi, Feb 25: Outsourcing to India will take a beating as US President Barack Obama, while addressing the Joint Session of US Congress on Tuesday night, said in his maiden speech that the economic revival plan would translate to no tax breaks for American companies which offshore jobs. 

India Inc is quite disappointed with the same as this package nips in the bud any potential plans for prospective US companies which might have thought of investing in India. 

The reaction that emanated from India had a disappointing tone. Several noted industrialists condemned the speech and said that it could spell doom for the BPO industry here. 

But the Secretary General of India’s apex industry chamber FICCI Amit Mitra added that Obama’s tax policy will also “hurt American companies”. 

With Tuesday’s announcement America’s first Black President set to rest all speculation that he may soften his stand on the issue of outsourcing. 

In his address, the President also remarked that he will also end tax breaks given to America’s wealthiest by the Bush government. However he clarified that this would not affect main street America and downwards. 

"Let me (be) perfectly clear, because I know you'll hear the same old claims that rolling back these tax breaks mean a massive tax increase on the American people. If your family earns less than USD 250,000 a year, you will not see your taxes increased a single dime," he said.

Obama Troop Withdrawal Plan Expected Soon

President Obama could outline his concrete plan for withdrawing troops from Iraq as early as this Friday, when he travels to North Carolina to give a speech, an administration official said Tuesday.

White House officials pushed back at reports that Obama had already decided to remove all combat troops by August of 2010, saying the president was still holding meetings with military leaders on the necessary strength of the U.S. forces. The Associated Press reported that Obama had decided to end the war 19 months into his administration, which would be three months later than he promised during the presidential campaign.

But administration officials -- while remaining noncommittal -- said Obama was getting close to making his final plans, and said the expected a decision and announcement in the next few days.

Posted at 7:34 PM ET on Feb 24, 2009  | Category:  National Security 
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Obama says all will have to sacrifice with budget

WASHINGTON (AP) — President Barack Obama says his budget will not solve every problem, and Democrats and Republicans will have to make some sacrifices.

In excerpts of his speech to Congress on Tuesday, Obama said he will submit a budget this week that he sees as a vision for America and a blueprint for the future.

He says the budget will reflect the harsh reality of the worst economic crisis since the Great Depression, one that he inherited from his predecessor, Republican George W. Bush.

Faced with recession and a trillion-dollar deficit, members of both parties will have to sacrifice some worthy priority. He included himself in that group.

In a rebuke to Republican critics, Obama said he rejects the view that the nation's problems will take care of themselves, that government has no role in pursuing a common prosperity.

A Strong Preaction to Obama's Speech

A Strong Preaction to Obama's Speech

President Obama has been known to fire up a crowd. But until yesterday, none of the places where he was speaking actually caught on fire.

This changed just before 5 p.m., when smoke began billowing out of an office just off the Senate chamber, down the hall from the House chamber where Obama was to give his first annual address to Congress. Lawmakers braving the smoky corridor to investigate learned that it was a problem with the fireplace in the minority whip's office.

"What's this all about?" Senate Majority Leader Harry Reid demanded as he passed through the haze.

Reid should have already known: Strange and magical things happen whenever Obama is around.

Of course, a president's appearance before a joint session of Congress is always a big deal; even President Bush, at 30 percent support in the polls, was mobbed by well-wishers when he walked onto the House floor.

But this time it's a new president, a highly popular one, and a former senator to boot. Lawmakers went gaga

Jindal to criticize stimulus in GOP response to Obama

 Tapped by the Republican party to deliver the GOP's response to President Barack Obama's congressional address Tuesday night, Louisiana Gov. Bobby Jindal plans to take on the massive stimulus package and emphasize that the U.S. economy can recover.

Louisiana Gov. Bobby Jindal will give the GOP response to President Obama's address Tuesday.

"To solve our current problems, Washington must lead," Jindal will say, according to excerpts of his speech released by the Republican National Committee. "But the way to lead is not to raise taxes and put more money and power in the hands of Washington politicians. The way to lead is by empowering you, the American people, because we believe that Americans can do anything."

Obama, in his first speech to a joint session of Congress, is expected to discuss the stimulus and lay out a plans to beat the financial crisis.

Presidential address

Join the best political team on TV as President Obama makes his first address to Congress.
9 ET tonight on CNN

Jindal has been a vocal critic of the $787 stimulus package, highlighting what he says is waste at a White House meeting with governors on Monday. He spoke to a large group of reporters after the session Monday, noting items such as $1 billion in added spending for the national census and $50 million in federal spending for the arts.

Jindal, seen as a possible contender for the 2012 GOP presidential nomination, has announced plans to reject $100 million of stimulus funding for his state, saying it would require Louisiana to change its unemployment laws. Several other governors have expressed similar concerns.

9 Bailout Surprises From GM and Chrysle

9 Bailout Surprises From GM and Chrysle

Back in December, economist Mark Zandi of Moody’s Economy.com told Congress that bailing out the Detroit automakers could ultimately cost $75 billion to $125 billion. So when GM and Chrysler asked for a mere $17.4 billion late last year, it seemed like a bargain.

Then GM got another billion or so as part of a bailout for its car-financing arm, GMAC. And now, GM and Chrysler have asked for almost $30 billion more from a variety of programs, pushing the total for just these two companies close to $50 billion. That doesn’t include Ford, which many analysts think will end up asking for nearly as much federal aid as GM.

[See why Ford is veering closer to a bailout.]

Surprised? Get used to it: Deepening gloom has become a recurring theme of Bailout Mania, as troubled firms dribble out their bad news in droplets and everything turns out worse than expected. Here are some of the major surprises contained in the “viability plans” submitted to the government by GM andChrysler:

Both need way more money than previously acknowledged. In its 117-page viability plan, GM says it expects to burn an astounding $18 billion in cash in 2009, one reason it may need a total of $30 billion from the government by 2011. Chrysler says it will have to declare bankruptcy by March 31 if it doesn’t get an extra $11 billion in government aid, for a total of more than $15 billion. At this point, it seems prudent to assume that they’ll need billions more after that.

College Is Possible for Students With Intellectual Disabilities

College Is Possible for Students With Intellectual Disabilities

Unlike students who pull all-nighters and cram before exams, Mount Aloysius College student Katie Apostolides has been working diligently in preparation for midterms since her first day of class. She starts papers and projects the day they are assigned, meets weekly with a different peer tutor for each of her classes, and knows to take short breaks throughout her studying in an effort to stay focused and on task. These and other strategies help Apostolides learn at a collegiate level in spite of her Down syndrome, an intellectual disability.

If Apostolides passes her classes this semester, she will receive her associate's degree. But Apostolides's success in college is the exception rather than the rule for students with Down syndrome and other intellectual disabilities. According to preliminary results of an ongoing Department of Education study, fewer than one quarter of students with intellectual disabilities have participated in some type of postsecondary education. None has completed a degree. There is hope, however, that this will change. New initiatives started late last year will, for the first time, identify, fund, and disseminate information about programs nationwide that help intellectually disabled students gain access to college.

To date, leaders in the field know of about 150 programs, which vary significantly in rigor and structure. The ThinkCollege.net website provides basic information about each known program, but because of provisions in the Higher Education Opportunity Act (which was reauthorized by Congress last summer) and two multimillion-dollar federal grants awarded in December 2008, the number of known programs, the number of high-quality inclusive programs, and the depth of knowledge about both is set to expand dramatically. Not only does the HEOA allow students with intellectual disabilities to qualify for Pell Grants, Supplemental Educational Opportunity Grants, and the Federal Work Study Program for the first time, it also establishes a new grant program that will fund the development of programs tailored specifically to college students with intellectual disabilities across the country.

The Student's Guide to Beating the Recession

▶ Q: How will the recession affect my scholarship?

▶ Q: I really need a scholarship next year. What can I do?

The Student's Guide to Beating the Recession

▶ Q: How will the recession affect my student loan?

▶ Q: How about my graduate school loan?

▶ Q: How is the recession affecting international students who need to borrow?

▶ Q: How is the recession affecting my college?

▶ Q: How are colleges responding?

▶ Q: How will the recession affect my college experience and education?

▶ Q: How will it affect my chances of getting into college next year?

▶ Q: But I really want a college education! Where can I go?

How the Stimulus Helps You Pay for College

How the Stimulus Helps You Pay for College

The government is poised to spend about $13 billion in stimulus funds on improvements to education tax credits that will offset up to $2,500 in college costs for millions of low- and middle-income families. But the changes probably won't immediately stimulate the economy or make much of a difference to the many families now living paycheck to paycheck, tax experts say.

Other education provisions in the stimulus bill, such as a several-hundred-dollar increase in the Pell grant, the biggest federal grant awarded to low-income students, have won bipartisan support. The education tax changes are more controversial, though, and have drawn criticism from some education organizations for their high costs and comparatively small impact.

Congressional Democrats defended all aspects of the stimulus bill, including the education tax breaks. "For the first time, Congress is making these tax cuts refundable, which means that even if people don't earn enough to pay taxes, they are still eligible for a refund. We also simplified the process by combining two existing tax credits, which will make the tax credit less confusing for eligible students. Both the tuition tax credit and the significant boost in the Pell grant scholarship will be a huge help for low-income and middle-class families struggling to pay for college," says Melissa Salmanowitz, press secretary for the House Education and Labor Committee.

And while the education tax break didn't quite match up to President Barack Obama's campaignpromise of a $4,000 credit payable when bills come due (instead of making students wait for tax refunds) in return for public service, the administration said it was happy with the provision. "This is a good step forward, and we will look at ways we can take the next step," said a spokesman for the Department of Education.

7 Steps to Finding the Right Credit Counselor

7 Steps to Finding the Right Credit Counselor

I don't know about you, but the collapse of the economy and stock market has made my financial plan look a lot like a piece of Swiss cheese that has seen better days - yellowing, curling up at the edges, and definitely giving off a bad odor. Sadly, millions of us seem to be facing Swiss-cheese financial futures these days.

If you're in that camp, perhaps a trip to your friendly neighborhood consumer credit counselor would be a good idea. Having someone other than your Uncle Lou take a look at your finances could be a godsend. A good counselor has seen lots of people like you before, and has developed solid suggestions on how you can overcome your current problems - and perhaps a wee bit of financial paralysis. A counselor can help you build a new financial plan that reflects current economic realities and is right for you. Finding the right counselor may be far easier said than done. Here are some steps to help increase your odds of sitting across the table from someone who just might make your life a lot easier:

The Obama Housing Fix: 5 Things to Know

The Obama Housing Fix: 5 Things to Know

A week after Treasury Secretary Timothy Geithner's plan to resurrect the financial system landed with a thud, President Barack Obama called his own number Wednesday to unveil the new administration's ambitious effort to rescue the housing market. In a speech in Arizona--a state that had the nation's third-highest foreclosure rate in January--Obama detailed a multipronged initiative that aims to enable up to nine million families avoid foreclosure, while halting the drop in home prices by as much as $6,000 a house. "In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen," Obama told the audience. "But if we act boldly and swiftly to arrest this downward spiral, every American will benefit." Here are the five things you need to know about the Obama housing fix:

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1. Refinance mortgages: Here's a key obstacle to extricating the nation from the current mortgage mess: Although mortgage rates are near historic lows, the home owners with the greatest need to access the lower rates aren't able to benefit from them. One reason for this is that Fannie Mae and Freddie Mac--which own or guarantee a huge chunk of the mortgage pie--typically can't guarantee refinancing for home loans that are valued at more than 80 percent of the property's value. And with home prices plunging, an increasing number of homeowners fall outside these parameters. The Obama plan would scrap this restriction, enabling as many as five million people with mortgages owned or guaranteed by Fannie and Freddie to refinance into lower-cost loans, the president said.

India concerned by Pakistan's truce with militants

India fears militants will be emboldened by the pact to allow Sharia law in Pakistan's Swat region. Some fear a Hindu backlash against India's Muslim minority, or even the latter's radicalization.

By Mark Magnier 
February 20, 2009

Reporting from New Delhi -- A decision by Pakistani authorities to allow imposition of Islamic law in a region a short distance from Islamabad is increasing India's fears that religious militancy is growing in its neighbor and traditional rival. 

India's main Hindu nationalist group, the opposition Bharatiya Janata Party, said Wednesday that national security was at risk because of well-entrenched militants operating in Pakistan's Swat Valley, within a five-hour drive of Amritsar, an Indian city of 1.5 million people. 

 

• Pakistan officials allow Sharia in volatile region

• Pakistan acknowledges Mumbai plot was hatched on its soil

Foreign Minister Pranab Mukherjee joined other international leaders in condemning Pakistan's cease-fire deal Monday with the militants, characterizing it as a danger to "humanity and civilization."

"Taliban at India's Door," blared a sensational headline on the Times Now 24-hour, one of India's hyperactive TV news channels. 

Accusations and mutual distrust have marked the India-Pakistan relationship for most of the six decades since the end of British colonial rule.

India's concern is that the latest deal further weakens a Pakistani civilian government not fully in control of its own territory and increases the risk that Pakistan will serve as a staging ground for terrorist attacks, such as occurred in Mumbai in late November. Islamabad acknowledged recently that the attack, which killed more than 160 people, was at least in part planned in Pakistan.

8 Safe Stocks to Buy Now

8 Safe Stocks to Buy Now

General Dynamics (symbol GD)

The economic slowdown has yet to be reflected in the performance of General Dynamics, which gets about two-thirds of its revenues from the U.S. government. The world's sixth-largest defense contractor, which makes everything from tanks and submarines to electronics for the military and intelligence services, continues to see its backlog of business grow. For the quarter that ended September 30, the backlog was $60.5 billion, up from $55 billion the previous quarter. Better yet, profit margins rose in each of GD's four business segments.

Google (GOOG)

Once everybody's favorite glamour stock, Google is now available at half-price. That looks like a pretty good deal. Down from $742 in late 2007, you can buy shares of the leading Internet-search and advertising firm for just 14 times expected 2009 earnings of $22.64 per share.

Johnson & Johnson (JNJ)

Consumer-products firms are a natural refuge in turbulent times. That's why Johnson & Johnson is the right pick now. No matter how bad things get, people will still buy household essentials, such as Band-Aids, Listerine and Rolaids, and that means a steady stream of profits for the company, based in New Brunswick, N.J.

American Tower (AMT)

Fierce competition means that wireless-phone carriers will continue building their communications networks in any economic environment, and that's good news for American Tower. The Boston company owns or operates more than 23,000 wireless-phone and broadcast-communications towers. Major carriers, such as AT&T and Verizon, are willing to sign long-term contracts with built-in annual price increases to lease space on these towers so that they can provide voice and data services for their customers. Morningstar analyst Imari Love estimates that American Tower has more than six years' worth of revenue already locked into these noncancellable contracts.

Oracle (ORCL)

The company is the leading provider of database software, an essential underpinning for virtually every type of corporate software application. Oracle's 43% market share is more than double that of IBM, its nearest competitor. Working from that stronghold, the Silicon Valley-based firm has spent $28 billion over the past four years successfully extending its reach into enterprise software, programs that support or streamline business operations.

Accenture (ACN)

Although Accenture is not immune to a global economic downturn, it should survive relatively unscathed. The company, which is headquartered in Bermuda, provides management- and technology-consulting services to businesses and governments around the world. Plus, it provides services, such as computer-network management, customer help desks and back-office services, that businesses prefer to farm out.

Thermo Fisher Scientific (TMO)

This is a one-stop shop that equips research laboratories with everything from high-end analytical instruments to everyday supplies, such as chemicals and microscope slides. Based in Waltham, Mass., the company derives about half of its annual revenues from lab supplies that need to be restocked -- a steady business that's not particularly economically sensitive. That should cushion any drop-off from sales of costlier scientific instruments (31% of revenues). Customers range from pharmaceutical firms and hospitals to research labs and government agencies. (Other revenues come from sales of software and services.)

Automatic Date Processing (ADP)

Even though the near-term U.S. employment picture looks shaky, the business of processing corporate payrolls remains a good one. ADP boasts long-term contracts and high repeat business, and it gets to keep the interest it earns on billions of dollars in taxes deducted from workers' paychecks that are later turned over to the government. This profitable business model means that the Roseland, N.J., company generates a lot of cash. During the fiscal year that ended last June, ADP rewarded shareholders with dividends and buybacks worth $2 billion.

Obama Disappointed Cabinet Failed To Understand His Reference To 'Savage Sword Of Conan' #24

 http://www.dreamhost.com/r.cgi?2111269|SWA227

WASHINGTON—President Barack Obama expressed frustration Wednesday after members of his cabinet failed to recognize his allusion to the 24th issue of the comic series Savage Sword Of Conan during their first major meeting together.

ENLARGE IMAGE

The 44th president settles into the Oval Office.

Obama, whose upcoming challenges include organizing a massive effort to rebuild the nation's infrastructure, was reportedly unprepared for the confused silence he received upon suggesting that his cabinet "team up with Taurus of Nemedia" to secure the necessary funding from Congress.

"If my inner circle of advisers can't even communicate about the most basic issues, how are we going to tackle the massive problems our nation faces?" Obama said during a press conference. "When I tell my cabinet that getting bipartisan support is exactly like the time Conan got Taurus to help him steal Yara's jewel, they need to understand what I mean."

After receiving no reaction from the assembled reporters, Obama added, "Because a giant spider is protecting this chamber full of precious jewels, just like Congress is protecting its…. God, how are you people not seeing this?"

ENLARGE IMAGE

The commander in chief's "doubles."

Obama, an avid collector of Conan The Barbarian and Spider-Man comic books since he was a child, was referencing the 1977 story "The Tower Of The Elephant," written by Roy Thomas. According to administration sources, no one in Obama's cabinet was familiar with the magazine-sized comic, though Labor Secretary Hilda Solis claimed to have once seenConan the Destroyer.

Aides also confirmed that Obama has refused to lend his copy of issue #24 to Transportation Secretary Ray LaHood, fearing the former Republican congressman will carelessly bend or rip the pages. The commander in chief is reportedly intent on keeping the comics in pristine condition for their eventual inclusion in his presidential library.

Obama On Republicans: 'I'm An Optimist, Not A Sap'

Obama takes on credit rating agencies!

User Forum Topic

Submitted by TheBreeze on January 25, 2009 - 8:57am

Wow! This is awesome and something that Mish has been harping on for a while. Check it out:

Officials said they want rules to eliminate conflicts of interest at credit rating agencies that gave top investment grades to the exotic and ultimately shaky financial instruments that have been a source of market turmoil. The core problem, they said, is that the agencies are paid by companies to help them structure financial instruments, which the agencies then grade.

"Until we deal with the compensation model, we're not going to deal with the conflict of interest, and people are not going to have confidence that the ratings are worth relying on, worth the paper they're printed on," Mary Schapiro said in testimony earlier this month before being confirmed by the Senate to head the Securities and Exchange Commission.

Timothy Geithner, the nominee for Treasury secretary, made similar comments in written and oral testimony before the Senate Finance Committee.

They are also taking on mortgage brokers...

Aides said they would propose new federal standards for mortgage brokers who issued many unsuitable loans and are largely regulated by state officials. They are considering proposals to have the SEC become more involved in supervising the underwriting standards of securities that are backed by mortgages.

...and derivatives...

The administration is also preparing to require that derivatives like credit default swaps, a type of insurance against loan defaults that were at the center of the financial meltdown last year, be traded through a central clearinghouse and possibly on one or more exchanges. That would make it significantly easier for regulators to supervise their use.

...and continuing to rebuke Bush policies...

Officials have been grappling for nearly a year to figure out how to better oversee the financial system, particularly as a number of large and inadequately supervised companies have encountered problems. In a sweeping regulatory blueprint unveiled last March, Treasury Secretary Henry Paulson Jr. proposed a broad consolidation of banking and financial agencies, including merging the Securities and Exchange Commission and the Commodity Futures Trading Commission. That proposal is not included in the current plans.

...and hedge funds (with another rebuke of Bush)...

Other elements of the regulatory overhaul, such as the requirement that hedge funds register with and be more closely supervised by the SEC, would mark a sharp departure from the policies of the Bush administration.

...and executive pay...

For example, they are preparing proposals to limit executive pay at companies that receive money under the bank bailout program. In response to written questions by Senator John Kerry,