Legion of Angels News Archive

WASHINGTON – Amtrak’s USA Rail Pass is now available for purchase in the U.S.

Until recently, the pass could only be bought by travelers who lived outside the country.

The passes are available for 15, 30 and 45 days of travel. The 15-day pass offers eight segments of travel for $389. The 30-day pass offers 12 segments of travel for $579. The 45-day pass offers 18 segments of travel for $749.

Amtrak counts a segment of travel each time a passenger boards a train or connecting Amtrak Thruway bus.

The passes are priced the same regardless of when you travel, but you must begin your travel within 180 days of purchase.

Also note that the pass is not a ticket. Passengers must also have a ticket and reservation for each train they board.

If your travels are likely to take you to multiple points in California, you might be better off with Amtrak’s California Rail Pass, which offers seven days of travel in a 21-day period for $159.

The USA Rail Pass is not valid for travel on Amtrak’s Auto Train or Acela Express. Some other restrictions apply. Details at 800-872-7245 or http://tickets.amtrak.com/itd/amtrak/selectpass/ for more information.

Source — Yahoo!

NEW YORK (CNNMoney.com) – The United States has sneezed. And while it may be too strong to say that China has now caught a cold, it has, at the very least, come down with a bit of a runny nose.

And that’s not an encouraging sign for the U.S. economy.

China’s government reported on Monday that its economy grew 9% in the third quarter. That is, of course, still robust expansion by any measure.

But it is a cause for concern considering that China’s gross domestic product increased at a greater than 10% clip in the first two quarters of this year and has been growing at a double-digit pace annually since 2002.

The Chinese economy was expected to slow a bit following the Olympics in Beijing this past summer. But this is clearly more than a post-Olympic pullback.

It’s even more troubling when you take into account the fact that China is a big investor in U.S. stocks and bonds. The Chinese sovereign wealth fund China Investment Corp. has stakes in U.S. financial firms Morgan Stanley (MS, Fortune 500), Visa (V) and Blackstone (BX), for example.

And as I pointed out last week, foreign purchases of U.S. securities - with the notable exception of Treasurys - is starting to slow.

Simply put, a slowing Chinese economy is not good news for the United States. Consider another reason: China is an important customer of U.S. goods.

According to figures from the U.S. Department of Commerce, exports to China increased 18% last year. And China is now the country’s third-largest export market. China surpassed Japan in 2007 and trails only Canada and Mexico.

Christian Broda, an economist with Barclays Capital, said in a research report last week that China helped keep the U.S. economy from slipping into a deeper recession in 2001 since it was just beginning to become a more active trading partner with the rest of the world at that time.

China was only added to the World Trade Organization in December 2001.

But Broda pointed out that China’s exposure to the global economy is now double what it was in 1998-2002 because of its more active role as an importer and exporter. In other words, it’s now too big to be immune from the financial crisis.

“We don’t expect China to provide a buffer this time,” Broda wrote. “As growth decelerates in the developed world, there is unlikely to be a region in emerging markets that will act as a natural countervailing force.”

To be sure, China’s economy is not going to grind to a halt. But even a marginal slowdown could hurt large U.S. firms. Many of them have been able to offset sluggish growth in the United States with sales to China and other developing markets.

And it’s not certain that China’s economy will continue to keep expanding at such a rapid pace in the next few years if this credit crunch continues to persist for much longer.

“This enormous shock to the worldwide banking business, which was really magnified in mid-September, should probably lead to a reduction of 2.5% in the growth for all global economies next year. So if you thought China would grow 10% in 2009, you now have to figure it will grow 7.5%,” said Alexander “Sandy” Cutler, CEO of Eaton, a Cleveland -based manufacturer of industrial equipment.

Cutler said he expected China to remain a big growth opportunity for the company. Still, Eaton (ETN, Fortune 500) warned Monday that its fourth-quarter results would be lower than expected in large part due to slowing demand around the globe.

Construction equipment giant Caterpillar (CAT, Fortune 500) also hinted that China’s economy would slow down next year when it reported slightly lower-than-expected results for the third quarter Tuesday.

Stuart Hoffman, chief economist of PNC Financial Services in Pittsburgh, said it would not be a surprise if China’s slowdown affected other industrial companies, as well as tech firms that have increasingly looked to China as a growth market.

However, he added that there is one piece of good news worth mentioning - China is now the world’s second-largest importer of oil. So the sharp decline in crude prices could help keep China spending more than other countries.

And since China doesn’t rely as heavily on oil production as other developing nations - Russia being the most notable - it is unlikely to experience as much economic hardship due to falling oil prices.

Still, it’s crucial for the health of the U.S. economy that China’s doesn’t suffer a severe meltdown.

To that end, Treasury Secretary Henry Paulson is giving a speech in New York on Tuesday night about China and the global economy. It will be very interesting to hear what he has to say.

There is already some evidence to suggest that the two nations may need to work together to avert more global economic pain.

When the Fed announced a coordinated interest rate cut on Oct. 8 with banks in Europe and Canada, China’s central bank also lowered interest rates that day.

The Fed’s announcement didn’t mention the Chinese rate cut and China’s central bank didn’t acknowledge the rate cuts in the United States and Europe. But does anyone honestly think that the United States and China coincidentally decided on the same day to lower interest rates?

Make no mistake. The two countries clearly realize they need each other and that economic hardship suffered by the other is not good for either. China may not have the exact problems that the U.S. does but its third-quarter GDP slowdown is definitely a sign that the credit crunch is hitting China as well.

“This is proof positive that the world is very much interconnected and not decoupled. The U.S. is not the only locomotive for growth. China’s growth is likely to continue slowing down,” Hoffman said.

Source — CNN

NEW YORK (Reuters) - Prices of U.S. existing homes suffered a record drop in August and the rate of sales tumbled, offering little sign of improvement in the source of the financial crisis in the United States.

The pace of existing home sales decreased 2.2 percent to an annual pace of 4.91 million units while the median national home price declined a record 9.5 percent to $203,100, the National Association of Realtors said on Wednesday.

In what would normally be a potentially bright spot, the overstock of homes for sale shrank. However, the trade group said as many as 2 in 5 home sales were by borrowers who have seen their property lose value or are facing foreclosure.

“The NAR estimates that 35-to-40 percent of all sales are of distressed property, so underlying private activity is weaker than the headlines (imply) and there is little sign of imminent improvement,” Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace from the 5.00 million unit rate initially reported for July, which was revised to a 5.02 million unit pace.

The inventory of existing homes for sale fell 7.0 percent to 4.26 million from the record-high overstock reported in July.

The data came as U.S. Federal Reserve Chairman Ben Bernanke delivered a second day of testimony before Congress aimed at persuading skeptical lawmakers of the need for the government’s $700 billion rescue plan for troubled financial markets.

The political wrangling over the financial-sector bailout overshadowed the day’s offering of economic data.

Stocks were higher but vulnerable to uncertainties over the fate of the banking sector. U.S. government bonds, which generally benefit from signs of economic weakness, were higher on the day.

Applications for U.S. home mortgages retreated to sluggish levels last week as rising interest rates spoiled a spurt in loan refinancing, according to data published from an industry group.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity dropped 10.6 percent to 591.4 in the week ended Sept 19.

The MBA’s seasonally adjusted index of refinancing applications declined 11.2 percent to 2,043.4 last week as the average 30-year mortgage rate surged 0.26 percentage point to 6.06 percent, the MBA said.

Source — Yahoo!

NEW YORK - The wave of storms battering the U.S. has plunged the American Red Cross deep into debt as it rushes to prepare for Hurricane Ike, prompting a searching look at how to stabilize its finances.

Gail McGovern, who became the embattled charity’s president in June, said even a request for federal funding is under consideration as the Red Cross seeks to become less dependent on spontaneous donations that arrive only in the wake of huge disasters.

“We are going to explore every avenue we can to ensure we have a healthy Red Cross,” McGovern said in an interview Thursday as her organization deployed 1,000 out-of-state volunteers to Texas to await menacing Ike.

As of last week, when Ike was still a distant threat, the Red Cross said it has raised only $5 million to cover costs from Hurricane Gustav that will total at least $40 million, possibly more than $70 million. It has borrowed money to meet those bills, and now is incurring more expenses as it shifts response teams to Texas and readies its shelters.

“The beautiful thing about the American Red Cross is we are going to be there when people need us,” McGovern said. “As the disaster relief fund depletes, we will borrow money if we need to, to be there.”

Gustav a ’silent disaster’
McGovern said Red Cross officials were calling Gustav a “silent disaster” because it entailed sizable costs for sheltering displaced people, yet did not trigger the flood of donations that often follows more deadly and destructive storms.

With Ike, McGovern said, the Red Cross wants to be ready even though it has no idea how damaging or costly the storm will be.

The Red Cross endured widespread criticism — some from within its own ranks — after Hurricane Katrina hit New Orleans in 2005. An internal report cited overwhelmed volunteers, inflexible attitudes and inadequate anti-fraud measures.

Fundraising is only one of several major challenges confronting the Red Cross in recent years. Faced with a deficit of about $210 million, it laid off one-third of the 3,000 employees at its Washington headquarters earlier this year. Emergency response operations have not been affected, and the deficit is now about $140 million, McGovern said.

The Red Cross also had been plagued by rapid turnover of its presidents.

McGovern is the fourth full-fledged president to serve since 2001, along with three interim leaders. She replaced Mark Everson, who resigned last November because of an extramarital affair with an official from a Red Cross chapter in Mississippi.

Source — MSNBC

WASHINGTON (Reuters) - The House of Representatives could vote next week on energy legislation that would open nearly all of the U.S. coastline to offshore drilling while repealing some tax breaks for oil companies, Democratic leaders said on Thursday.

Democrats had said they hoped to hold a vote on the energy package this week, but the House will be closed on Friday so Texas lawmakers can return to their districts to prepare as Hurricane Ike approaches.

The package proposed by Democrats would give states the option to allow drilling between 50 and 100 miles off their shores. Areas further than 100 miles from the coast would be completely open to oil exploration.

Democrats previously had opposed drilling on the outer continental shelf.

The bill also would repeal some tax breaks for oil companies to help fund investments in alternative energy.

“So we’re saying: OK, you want to drill, this is how it will be. No more subsidies,” House Speaker Nancy Pelosi told reporters Thursday.

Republicans, who have been pushing to lift the moratorium on drilling, criticized the proposal because it does not provide a revenue-sharing plan to coastal states as an incentive to allow drilling.

Separately, Senators Max Baucus and Chuck Grassley on Thursday unveiled energy tax legislation that would extend solar and wind energy tax credits and provide $2.5 billion in credits to clean coal facilities.

Baucus, a Democrat from Montana, and Grassley, a Republican from Iowa, said the bill would provide consumers with a tax credit of up to $7,500 for plug-in electric vehicles and also would extend credits for extend energy efficiency.

The tax bill would be funded partially by reducing tax breaks for the five largest oil and gas companies.

“This bill has the right tax policy to create thousands of jobs, jump-start alternative energy solutions and finally move America away from our dependence on foreign oil,” Baucus, chairman of the Senate Finance Committee, said in a statement.

Source — Yahoo!