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WASHINGTON – One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.

Even more — 80 percent — rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.

The public sentiment also poses a challenge to central elements of Obama's governing agenda. Half of those surveyed said deficit reduction should be a national priority over increased spending on health care, education or alternative energy.

"I know a lot of people who don't have health care and really can't afford it," said Judy Purkey, a 57-year-old grandmother from Morristown, Tenn., who has raised four grandchildren and is living on disability payments. But she added: "The economy is so bad. You've heard the expression getting blood out of a turnip? — Well, that's what's going on."

The president, in a CBS interview that aired Sunday on "60 Minutes," acknowledged the public's quandary.

"This is a very difficult economic environment. People are feeling anxious," he said. "And I think it is absolutely fair to say that people started feeling some sticker shock."

Still, Obama generally avoided public blame for the recession or the condition of the banking sector.

Only one out of five surveyed said Obama bore responsibility for the recession; 54 percent blamed former President George W. Bush and 19 percent blamed former President Bill Clinton.

Financial institutions, however, bore the brunt of the criticism — 79 percent of those surveyed said banks and lenders that made risky loans deserve quite a bit of the blame. Sixty-eight percent held the federal government responsible for not adequately regulating banks and 65 percent blamed borrowers who could not afford to repay loans.

In a glimmer of good news for the administration, 17 percent of those surveyed said the government's massive economic stimulus has improved the economy, a 10 percentage point increase over July. Nearly six out of 10, however, said they are not confident that $787 billion that Congress approved to lower taxes and inject spending into the economy will do any good.

The White House has been promoting the stimulus package as a job creator and job saver that has helped keep unemployment from rising above its current 9.7 percent level — the highest since 1983.

Michael Painter, a 38-year-old unemployed plumber from Orlando, Fla., said that while he believed that spending package would ultimately stimulate the economy, it had yet to help him or his laid-off wife and teenage daughter.

He said he approved of Obama's job performance so far, but not Congress'. "The people in Congress need to quit bickering about party issues and start worrying about people issues."

The Obama administration also has begun to portray the financial sector in more upbeat terms, eager to make the case that government interventions begun under then-President Bush and continued, altered or expanded under Obama have brought stability to the markets.

Obama plans to deliver a speech Monday — the anniversary of Lehman Brothers' bankruptcy — to outline the administration's achievements and press Congress to enact changes in bank regulations.

But the AP-GfK poll illustrates the difficulty he faces.

More Americans worry about facing big, unexpected medical expenses now than they did in July — up 7 percentage points to 68 percent among those polled. Likewise, more worry that the value of their stocks and retirement investments will drop — up 4 percentage points from July to 68 percent.

In October, then-President Bush pushed a $700 billion financial rescue package through Congress on the condition that only half could be spent without further congressional authority. Obama, upon becoming president in January, succeeded in getting the second amount released, despite growing apprehension among lawmakers about the wisdom of such a bailout.

Obama has repeatedly said that the rescue of the financial sector would be incomplete without a new regulatory regime that would prevent a recurrence of the crisis. Obama has sent the outlines of possible regulation to Congress. Key banking lawmakers in the House and Senate have promised Obama legislation by the end of the year, but there is vigorous debate over key elements of Obama's plan, including a new consumer finance protection agency and the designation of the Federal Reserve as the main overseer of large institutions that could pose risks to the system.

The survey of 1,001 adults with cell and landline telephones was conducted from Sept. 3-8. It had a margin of sampling error of plus or minus 3.1 percentage points.

Link to article:
http://news.yahoo.com/s/ap/20090914/ap_on_bi_ge/us_meltdown_ap_poll

Sept. 8 (Bloomberg) -- Hong Kong stocks rose for a fourth day as China said it will sell sovereign bonds in the city, boosting confidence in the mainland’s support for the former British colony’s place as a global financial hub.

Bank of China Ltd., the nation’s third-largest lender by assets, rallied 2.2 percent, while Industrial & Commercial Bank of China Ltd., the world’s largest financial company by market value, advanced 1.9 percent. China’s Ministry of Finance today said in a statement on its Web site that the government plans to sell 6 billion yuan ($879 million) of sovereign bonds in Hong Kong on Sept. 28. Genesis Energy Holdings Ltd., an oil and gas company, jumped 7.7 percent after buying mining rights in China’s Shaanxi Province.

The Hang Seng Index advanced 2.1 percent to 21,069.81 at the close of trade. It had fallen as much as 0.1 percent earlier. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, rose 2.5 percent to 12,275.66.

“Six billion yuan is a small amount on the mainland market, but it shows the central government’s support to Hong Kong as an international financial center,” said Zhao Qingming, an analyst at China Construction Bank Corp. in Beijing. “It will be the beginning of more measures to push Hong Kong as an offshore center for China’s yuan.”

The Hang Seng Index has rallied 86 percent since hitting a four-month low on March 9. Stocks on the gauge are valued at 17.3 times estimated earnings, up from 10.6 times at the start of the year.

Growth Prospects

Gains accelerated in the afternoon on speculation data out later this week will show China’s economic recovery is strengthening.

The government is due to release August figures for trade, industrial production, urban fixed-asset investment, retail sales and inflation on Sept. 11. The central bank may also give lending and money-supply figures this week.

China will maintain its current stimulatory fiscal and monetary policies as the economy stabilizes and rebounds, State Councilor Ma Kai said at an investment fair in Xiamen today.

Bank of China rallied 2.2 percent to HK$4.19. Industrial & Commercial Bank gained 1.9 percent to HK$5.89. China Construction Bank Corp., the nation’s second largest, climbed 2.4 percent to HK$6.30.

New Revenue Sources

Standard Chartered Plc advanced 0.8 percent to HK$177. The company said it expects its private banking assets in Taiwan to grow twice as fast as the island’s industry average in the next three years as more money is repatriated.

“There’s no doubt that over time the income sources for Hong Kong banks are going to increase,” said Diane Lin, a Sydney-based fund manager at Pengana Capital Ltd., which oversees about $1 billion, including Hong Kong investments. “It offers quite a nice potential growth prospect for them. We are relatively cautious on Hong Kong because valuations have become less attractive.”

Genesis Energy surged 7.7 percent to 28 Hong Kong cents. The company will acquire a 12-square-kilometer (4.6-square-mile) oil and gas project. The mining rights will expire in September 2015, and can be extended upon further negotiations, Genesis Energy said in an e-mailed statement.

Other energy stocks climbed as crude oil for October delivery rose 1.5 percent to $69.07 a barrel at 4:31 p.m. Hong Kong time. PetroChina Co., the country’s largest oil producer, rose 3.2 percent to HK$9.15. Cnooc Ltd., China’s third-biggest oil company, rallied 3 percent to HK$10.84.

Zhaojin Mining Industry Co., a gold mining company based in China’s Shandong province, surged 12 percent to HK$14.28, as gold futures punched through $1,000 an ounce for the first time in more than six months. Real Gold Mining Ltd., based in Inner Mongolia, jumped 17 percent to HK$8.86.

Geely Automobile Holdings Ltd. rose 3 percent to HK$2.07 as China’s biggest privately owned carmaker more than doubled first-half profit after boosting auto sales and buying stakes in carmaking affiliates.

Link to article:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTsMLpMZcOfo

Sept. 12 (Bloomberg) -- President Barack Obama placed tariffs of 35 percent on $1.8 billion of automobile tires from China, acting on a labor union complaint that surging imports were pushing U.S. factory workers out of their jobs.

The additional duties will begin Sept. 26 and last for three years, dropping 5 percentage points a year, according to a White House statement.

“These remedies are a necessary response to the harm done to U.S. workers and businesses,” U.S. Trade Representative Ron Kirk said in a statement. “Enforcing trade laws is key to maintaining an open and free trading system.”

The case brought by the United Steelworkers is the largest so-called safeguard petition filed to protect U.S. producers from increasing imports from China. Union leaders and Democratic lawmakers portrayed the decision as a gauge of how Obama would balance his campaign pledge to protect workers from imports with his statements as president that he would avoid protectionism.

Democratic Representative Louise Slaughter of New York said the decision was “the first big test of whether President Obama was going to side with the interest of big corporations and the U.S. Chamber of Commerce or with workers.”

“I am happy to say that he came down on the right side,” she said in an e-mailed statement.

The decision is a blow to Chinese producers such as GITI Tire Pte Ltd., the largest Chinese tire maker, and U.S. retailers of low-cost imports.

‘Unprecedented Action’

“By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”

The independent U.S. International Trade Commission recommended that Obama impose duties for three years, starting at 55 percent, to counter a tripling of tire imports from China from 2004 to 2008. The union, which represents 15,000 employees at 13 tire plants in the U.S., said cheap imports were forcing factories to close, eliminating jobs.

“The president sent the message that we expect others to live by the rules, just as we do,” United Steelworkers President Leo Gerard said in a statement. This decision “means China and other countries can no longer assume they can engage in predatory trade practices with impunity.”

Hosting Hu Jintao

Obama is to speak at a convention of the AFL-CIO, the nation’s largest labor federation, next week. He is also hosting Chinese President Hu Jintao and other world leaders at an economic summit in Pittsburgh later this month.

China is the second-largest U.S. trading partner, after Canada.

Since the Steelworkers filed their petition in April, tire imports from China rose as importers raced to beat the imposition of tariffs or quotas. The tariffs Obama imposed are in addition to existing 4 percent duties on all Chinese tires for cars and light trucks.

All of the U.S. tire makers have operations in China, according to the ITC, and none of them publicly supported the Steelworkers complaint. Goodyear Tire & Rubber Co., the largest U.S. tiremaker, stayed neutral. Cooper Tire & Rubber Co., the second-largest U.S. tiremaker, opposed the relief. The company has a plant in China.

‘Protectionist Spiral’

Chinese officials and a lobbying group for multinational companies such as Caterpillar Inc., Citigroup Inc. and Microsoft Corp. have urged Obama to refrain from curbing imports, saying it could lead to a “downward protectionist spiral.”

Imposing tariffs will have “highly damaging ripple effects throughout the U.S. economy by increasing the cost of imported tires that largely comprise the low-end of the tire market,” the Emergency Committee for American Trade, which represents those companies, wrote in a letter to Obama last month.

Former President George W. Bush turned down each of the four requests for such trade safeguards in other industries, saying they would do more harm than good to the U.S. economy. Obama pledged during the election campaign to take a harder line against Chinese trade barriers, and said he would assess these safeguard cases on their merits.

Since taking office Obama has vowed to avoid any new protectionist measures.

“While it’s tempting to turn inward during this time of economic uncertainty, President Obama and China’s leaders have counseled us to avoid protectionism,” Commerce Secretary Gary Locke said at a dinner hosted by the U.S. Chamber of Commerce Sept. 10 to fete Wu Bangguo, China’s top legislator.

Article Link:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afiQ4gaun6_0

Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”

A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.

While Obama wants to name some banks as “systemically important” and subject them to stricter oversight, his plan wouldn’t force them to shrink or simplify their structure.

Stiglitz said the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action.

G-20 Steps

“We aren’t doing anything significant so far, and the banks are pushing back,” he said. “The leaders of the G-20 will make some small steps forward, given the power of the banks” and “any step forward is a move in the right direction.”

G-20 leaders gather next week in Pittsburgh and will consider ways of improving regulation of financial markets and in particular how to set tighter limits on remuneration for market operators. Under pressure from France and Germany, G-20 finance ministers last week reached a preliminary accord that included proposals to claw-back cash awards and linking compensation more closely to long-term performance.

“It’s an outrage,” especially “in the U.S. where we poured so much money into the banks,” Stiglitz said. “The administration seems very reluctant to do what is necessary. Yes they’ll do something, the question is: Will they do as much as required?”

Global Economy

Stiglitz, former chief economist at the World Bank and member of the White House Council of Economic Advisers, said the world economy is “far from being out of the woods” even if it has pulled back from the precipice it teetered on after the collapse of Lehman.

“We’re going into an extended period of weak economy, of economic malaise,” Stiglitz said. The U.S. will “grow but not enough to offset the increase in the population,” he said, adding that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

The Federal Reserve faces a “quandary” in ending its monetary stimulus programs because doing so may drive up the cost of borrowing for the U.S. government, he said.

“The question then is who is going to finance the U.S. government,” Stiglitz said.

Link to article:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYdgQkXu9eBg