Washington, D.C., United States (AHN) – The U.S. Federal Reserve promised on Tuesday that it would hold interest rates at record lows for at least two years. The Fed had held on to the record-low key lending rate since December 2008 to help boost the American economy.

The decision was based on a 7-3 vote, which was the first time in 20 years that three Fed members dissented. The three members who dissented were Federal Reserve Bank of Dallas President Richard Fisher, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota and Federal Reserve Bank of Philadelphia President Charles Plosser.

Besides holding the interest rate until the middle of 2013, the Fed said it would consider additional measures to support the weak American economy, worsened by Standard & Poor’s downgrade of the country’s credit rating last week to AA+ due to the impasse on the debt limit issue.

The stock market, which dipped following the S&P downgrade, made a dramatic rebound on Tuesday after the Fed announcement. The Dow Jones industrial average ended up by 429 points, which was almost a 4 percent rise – the largest increase in two years.

The Fed policy gave American companies and consumers with more certainty about the availability of low-cost borrowing for major purchases such as vehicles or homes. At the same time, it is expected to encourage investments and risk-taking to convince the markets that the cost of borrowing will not go up for at least two years.

However, the policy is an indicator that the U.S. economy will continue to crawl until the end of President Barack Obama’s first term in office, while wages will remain stagnant and high unemployment rate will continue.

With the policy on benchmark lending rates out, investors are waiting if the Fed would also announce a new round of quantitative easing. The Fed has carried out two rounds of federal stimulus programs, but apparently is hesitant to further pump prime the economy over fears that it would have little impact and could even be inflationary.

View full post on Interest Rate Stories

Washington, D.C., United States (AHN) – The U.S. Federal Reserve would likely keep the record-low interest rates, Treasury markets indicate.

According to a Federal Bank of Cleveland study, the U.S. economy is forecast to grow by only 1.1 percent in the 12 months ending June 2012. That rate is less than half of the central bank’s current forecast and would likely result in delaying any key lending rate increase.

The Fed has held benchmark interest rates from zero to 25 basis points since December 2008.

Given the slower growth of the American economy, analysts said that the Fed is not likely to hike interest rate until June next year. That would make it the longest period that the central bank has held on to a low key lending rate since the 1940s when the Fed was forced to buy Treasuries.

From 1937 through 1947, the Fed kept its rediscount rate at 1 percent. It was the last time the American central bank maintained a prolonged monetary support for the ailing U.S. economy.

Another restraint to the expansion of the U.S. economy would be spending cuts to be agreed by U.S. President Barack Obama and Congress before the Aug. 2 deadline to hike Washington’s debt limit of $14.3 trillion.

However, analyst said the biggest hindrance to raising the overnight lending rate from almost zero would be the U.S. economy’s failure to create more jobs. The recession and the global financial crisis led to the loss of 8.7 million jobs in the U.S. in 2008 and 2009. In 2010, only 1.7 million jobs were created, resulting to national unemployment rate rising to 9.2 percent in June from 8.8 percent in March.

Fed Chairman Ben Bernanke placed a condition of sustained period of strong job creation as a basis for declaring an economy recovery. That translates into a gross domestic product growth rate between 2.7 to 2.8 percent.

View full post on Interest Rate Stories

New York, NY, United States (AHN) – Bank of America (BAC Fortune 500) announced it is partnering with two other entities to develop solar energy from rooftop installations.

The project will ultimately produce about 733 megawatts of solar energy, which is enough energy to power 100,000 homes and represents about 50 percent of the energy output of a nuclear powered electric plant.

A federal loan guarantee through the Department of Energy will help to fund the $2.6 billion project. It will be the world’s largest single effort to install solar energy panels on rooftops. The panels will be installed on the rooftops of industrial buildings in several states. DOE will guarantee 80 percent of the $1.4 billion debt financing. The rest of the money will come from private loan and funding sources.

Other partners in the project include real estate owner Prologis (PLD) and utility NRG Energy (NRG, Fortune 500).

In a press release, Tom Doyle, president of NRG Solar, NRG’s solar subsidiary, put the project into perspective.

“NRG believes rooftop solar is a smart choice for industrial, commercial and residential property owners in markets around the country, and this program provides the commercial scale that will bring the benefits of solar power to customers across the country,” Doyle said. “This program will nearly double the amount of grid-connected solar online in the United States today and make another positive contribution to cleaner air and a healthy environment.”

View full post on Economy, Business And Finance Stories

Washington, D.C., United States (AHN) – More Americans continue to save in banks rather than borrow money from financial institutions. According to latest data from the Federal Reserve, savings in U.S. banks hit a record $1.45 trillion in May.

The growing savings has been observed since the global financial crisis in 2008.

A similar trend was observed in Japan, where the gap between savings and borrowing is at an all-time high.

Japanese banks use the money to purchase bonds to help keep yields the lowest in the world even if Tokyo has more outstanding debts than the U.S. and a lower credit rating.

Before 2008, U.S. deposits exceeded loans at an average of $100 billion.

Because of the worst recession experienced in the U.S. since the 1930s, consumers trimmed household debt to $13.3 trillion from the 2008 peak of $13.9 trillion. The reduction resulted in savings going up 4.9 percent of income from 1.7 percent in 2007.

For the same period, banks reduced lending amid over $2 trillion in losses and writedowns. Rather than grant more loans, American financial institutions instead bought Treasuries and government-related debt, which boosted their holding of such instruments to $1.68 trillion from $1.08 trillion in early 2008.

Economists forecast it would take the U.S. and Japanese economies at least a decade to extricate themselves from the mess of being a debt-ridden society.

View full post on Interest Rate Stories

Amstelveen, Netherlands (AHN) – Dutch carrier KLM on Wednesday said it would begin using used cooking oil for some of its flights. The announcement comes less than two years after the airline flew the first biokerosene-fueled passenger flight in Europe.

Used cooking oil from factories and hotels will fuel KLM flights between Amsterdam and Paris beginning September. According to the airline, the fuel will meet the same technical specifications as those of conventional kerosene. No changes to engines or aircraft infrastructure will be required to use the new fuel.

Approval for the use of biofuel in aviation is expected soon in Europe. KLM, the world’s oldest airline operating under its original name, hopes the move will result in a positive recommendation from the Sustainability Board of the Netherlands.

KLM launched the first plane powered with biokerosene on the continent in November 2009 when it flew a select group of passengers with one engine running on 50 percent used cooking oil and 50 percent aviation kerosene.

Other carriers are similarly exploring the use of biofuels to improve sustainability and lower carbon emissions.

Continental, Japan Airlines and Virgin Atlantic are among those that have tried using fuel sustainably made from sources such as algae, coconut oil and jatropha.

Brazilian airline TAM partnered with Airbus last year to become the first to fly a biokerosene-fueled plane in Latin America.

KLM’s biokerosene is supplied by SkyNRG and made by Dynamic Fuels, a United States-based joint-venture of Tyson Foods and Syntroleum Corp.

Dynamic Fuels operates a plant in Louisiana that is recognized as the first U.S. industrial-scale production facility for biofuels. The company makes fuel from animal fats such as inedible porcine fat, vegetable cooking oil used in frying, fat from wash water in beef rendering and from factory cooking operations, and unrefined, inedible soybean oil produced from the refining process.

KLM, which merged with Air France in 2004 and has led among airlines in the Dow Jones Sustainability Index, said many factors affect the level of sustainability of biofuels. It ensures the quality of its biokerosene with advise from the Sustainability Board, which includes the Dutch wing of the World Wide Fund for Nature (WWF) and the Copernicus Institute of the University of Utrecht.

The carrier made clear its support for the WWF’s Energy Report, which says alternative fuels made from biomass are the only appropriate replacement for fossil fuels for sectors such as the airline industry.

“The route to 100 percent sustainable energy is enormously challenging,” managing director Camiel Eurlings said in a statement. “The costs of biofuels need to come down substantially and permanently. This can be achieved through innovation, collaboration and the right legislation that stimulates biofuel in the airline industry, but with an eye on honest competition. We really need to move forward together to attain continuous access to sustainable fuel.”

View full post on Economy, Business And Finance Stories

Beijing, China (AHN) – China has agreed to end subsidies of its wind power manufacturers that use domestic parts instead of imports, which violate World Trade Organization (WTO) rules and give Chinese firms an unfair advantage over U.S. manufacturers.

A complaint to the WTO filed by the United Steelworkers prompted China’s move, according to U.S. .Trade Representative Ron Kirk.

The end of subsidies by China’s government provides a more level playing field for U.S. wind turbine manufacturers to compete with Chinese products.

Kirk also criticized China for evading its transparency commitments by failing to provide the WTO with information about its subsidy programs on a regular basis. He said that because China is the second largest WTO trader that it is not acceptable for China to evade providing the WTO with the information.

However, critics say that China’s renewable energy manufacturing sector has grown so large that it is now so powerful that ending the illegal subsidies that allowed it to grow so large will not help other nations much to compete against Chinese manufacturers in the world market.

China’s Special Fund for Wind Power Manufacturing illegally gave individual grants of up to $22.5 million to Chinese manufacturers who agreed to use Chinese-made parts in the manufacturing of wind turbines, according to a case filed last year by the United States at the WTO.

The U.S. filed the suit so U.S. manufacturers could have an opportunity to supply parts to Chinese manufacturers.

The issue is especially important now as the U.S. struggles to create more jobs and close the huge trade gap with China.

View full post on Economy, Business And Finance Stories

Washington, DC, United States (KaiserHealth) – Medicaid will stop paying for about two dozen “never events” in hospitals, such as operations on the wrong body part and certain surgical-site infections, federal officials said today.

Currently, about 21 states have such a nonpayment policy. The 2010 federal health law, in effect, expands the ban nationwide. The rule published today gives states until July 2012 to implement it.

Medicaid is a joint state-federal program for the poor and disabled. Under the rule, Medicaid funds can’t be used to pay doctors and hospitals for services that “result from certain preventable health care-acquired illnesses or injuries,” the officials said.

A similar regulation has been in place for Medicare, the federal health program for the elderly, since 2008.

“These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors,” said Donald Berwick, administrator of the Centers for Medicare and Medicaid Services. “As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time.”

Some physician groups have concerns about the new policy. “Simply not paying for complications or conditions, that, while extremely regrettable, are not entirely preventable, is a blunt approach that is not effective or wise for patients or the Medicare or Medicaid program,” Dr. Michael Maves, CEO of the American Medical Association, said in written comments to CMS in March.

He said the medical association has “grave concerns” about states extending the non-payment policy beyond the conditions considered by Medicare. The American Hospital Association expressed similar reservations.

Cindy Mann, deputy director of CMS and director of Medicaid, said the rule gives states the option to expand the nonpayment policy to health care settings besides hospitals and to add other types of “never events.”

She said the policy would help improve patient care and drive down costs in the $364 billion program. “All (health care) payers are looking to gain better value for the dollars they spend and Medicaid is no different,” she said.

But the costs savings from the change is relatively modest. According to the proposed rule, Medicaid would save about $35 million over the next five years from stopping pay for such medical mistakes. Medicare has saved about $20 million a year under its policy.

“It’s a welcome first step into the national debate on quality,” said Matt Salo, executive director of the National Association of Medicaid Directors. “Clearly many states have already moved ahead, although that should never be taken as rationale for forcing the rest of them to do … well, anything. But improving quality in a coordinated fashion between Medicare and Medicaid is important.”

This is list of preventable conditions that Medicaid will no longer pay for:

• Foreign Object Retained After Surgery
• Air Embolism
• Blood Incompatibility
• Stage III and IV Pressure Ulcers
• Falls and Trauma
• Fractures
• Dislocations
• Intracranial Injuries
• Crushing Injuries
• Burns
• Electric Shock
• Catheter-Associated Urinary Tract Infection (UTI)
• Vascular Catheter-Associated Infection
• Manifestations of Poor Glycemic Control
  • Diabetic Ketoacidosis
  • Nonketotic Hyperosmolar Coma
  • Hypoglycemic Coma
  • Secondary Diabetes with Ketoacidosis
  • Secondary Diabetes with Hyperosmolarity
• Surgical Site Infection Following:
  • Coronary Artery Bypass Graft (CABG) – Mediastinitis
  • Bariatric Surgery
  • Laparoscopic Gastric Bypass
  • Gastroenterostomy
  • Laparoscopic Gastric Restrictive Surgery
• Orthopedic Procedures
  • Spine
  • Neck
  • Shoulder
  • Elbow
• Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) Following Total Knee Replacement or Hip Replacement – with pediatric and obstetric exceptions
• Surgery on the wrong patient,
• wrong surgery on a patient, and
• wrong site surgery

Source: CMS

pgalewitz@kff.org

– Provided by Kaiser Health News.

View full post on All Stories

Vernon, CT, United States (AHN) – Bravo! is voluntarily recalling select boxes of Bravo! Pig Ears Chews because it has the potential to be contaminated with Salmonella. The products affected by this recall includes only Bravo! 50 ct bulk Oven roasted Pig Ears Product Code: 75-121 Lot # 12-06-10.

Salmonella can affect animals and there is a risk to humans from handling contaminated pet products, especially if they have not thoroughly washed their hands after having contact with the chews or any other surfaces exposed to these products.

Healthy people with Salmonella should monitor themselves for some or all of the following symptoms including, nausea, vomiting, diarrhea or bloody diarrhea, abdominal cramping and fever. Rarely, Salmonella can result in more serious ailments, including arterial infections, endocarditis, arthritis, muscle pain, eye irritation and urinary tract symptoms. Consumers exhibiting these signs after having contact with this product should contact their healthcare provider.

Pets with Salmonella infections may be lethargic and have diarrhea or bloody diarrhea, fever and vomiting. Some pets will have only have decreased appetite, fever and abdominal pain. Infected but otherwise healthy pets can be carriers and infect other animals or humans. If your pet has consumed the recalled product and has these symptoms, please contact your veterinarian.

The company has received no reports of illness in either people or animals associated with the product. Bravo! is issuing this action out of an abundance of caution and sincerely regrets any inconvenience to pet owners as a result of this announcement.

Bravo! Pig Ears were distributed to retailers on the East and West Coasts. They were shipped to distributors and retailers between January 1 and February 28, 2011, where they were available for purchase.

The recall is the result of routine sampling program by the Washington State Department of Agriculture which revealed that the finished products contained the bacteria. The company has no product left in inventory from this batch of pig ears.

Consumers who have purchased any of these pig ears are urged to return the product to the place of purchase for a full refund. Consumers with questions about the recall, should visit www.bravorawdiet.com or call toll free 1.866.922.9222 9 am to 5 pm Monday to Friday.

View full post on Economy, Business And Finance Stories

Washington, D.C., United States (AHN) – The Obama administration has found an unexpected ally in a ratings agency in the White House’s battle with Republican legislators over spending cuts and hiking the federal debt limit. On Thursday, Moody’s warned that it may downgrade Washington’s credit rating if the U.S. debt ceiling is not hiked soon.

Moody’s said that the U.S. credit rating could downgraded because of a very small, but increasing risk of a short-lived default, which would likely translate into higher interest rates at a time when the country’s recovery is again on the slow lane.

The ratings agency anticipated there would be a political battle between the Obama administration and Republican legislators before the debt ceiling would be lifted, but Moody’s said that it failed to consider the worsening conflicting positions between the two parties. Washington wanted to raise the debt limit to $16.7 trillion from the current $14.3 trillion, but with no major spending cuts.

Moody’s warning came on the heels of a lower outlook by Standard & Poor’s of the AAA U.S. debt rating to negative from stable because of the political wrangling.

The House voted on Tuesday not to hike the federal debt limit without major spending cuts. At the Wednesday White House meeting of Republican legislators with U.S. President Barack Obama, the legislators asked the administration for a detailed plan on budget cuts to solve the impasse.

House Speaker John Boehner justified the lower house’s refusal to give in to Obama’s request because raising the debt limit beyond spending cuts would cost jobs for Americans. Obama, however, warned that failure to hike the debt limit soon would lead to dire consequences for the fragile, but recovering U.S. economy.

View full post on All Stories

Washington, D.C., United States (AHN) – First time jobless claims dropped by 6,000 during the week ending May 28, but still remained above 400,000 mark, signaling continued weakness in the employment sector of the economy.

The advance figure for seasonally adjusted initial unemployment compensation insurance claims was 422,000, down from the previous week’s revised figure of 428,000, according to the U.S. Department of Labor.

Economists say that initial unemployment claims must drop below the 400,000 mark and stay there for the labor market to recover from the massive job losses of the recent recession.

However, bringing the unemployment rate down might not happen anytime soon, since first time claims for unemployment compensation have stubbornly remained above the 400,000 mark for the past eight weeks.

News was no better for the less volatile 4-week moving average, which was 425,500, down by 14,000 from the previous week’s revised average of 439,500.

In addition, the advance seasonally adjusted insured unemployment rate at 3.0 percent for the week ending May 21 was unchanged from the previous week.

However, the total number of people claiming jobless benefits in all programs for the week ending May 14, the latest week for which such data is available, did drop. That number was 7,682,830, down by 56,742 from the prior week.

The largest increases in initial claims for the week ending May 21 were:

• California (+7,053)
• Massachusetts (+1,948)
• South Carolina (+1,066)
• Wisconsin (+1,019)
• Pennsylvania (+959)

View full post on Economy, Business And Finance Stories