El crecimiento Más general Trae malas Noticias para los bancos

De repente al Rojo vivo towards sector financiero SE encogió hombros de Frente A LA quiebra de EE.UU. N º 2 General crecimiento Comercial propietario Property Inc, Peru Los BIENES commercial Raíces, recesión Senales de EE.UU. QUE acechan podría bancos - especialmente las regional - in Los-próximos meses. 

El colapso EN LA OFICINA Y OTRAS no property Residencial Ya ha exprimido EE.UU. Las EMPRESAS financieras, CON LOS bancos Goldman Sachs Group Inc., Citigroup Inc., the company de las de Seguros American International Group Inc in MetLife EN de la Presentación informer billion write-off. 

Pero el fracaso Más Grande de-BIENES Raíces stories en-la-de-los-EE.UU. Todavía PUEDE predecir Mayor Dolor de lo previsto POR delante-de-los-bancos EN EL ámbito inmobiliario. 

"Property de crecimiento general básicamente UN Mensaje para el Resto del Mundo financiero QUE ESTÁ pasando Estonia, PORQUE UN hay Monton de pequeñas operaciones, Las not Reuner al attention TIPO DE QUE EL crecimiento Total (ha) that are available teniendo dificultades" dijo James Ellman, Presidente del Fondo de cobertura Seacliff Capital. 

El crecimiento improving overall colapso it is unlikely that sea el Latest POR UNO-de-los-principales desarrolladores in EE.UU. Ya QUE LA mayoría SE encuentran some Fuentes de Financiación de Ventas para on refinanciar de la Deuda maduración. 

Alrededor with $ 814 million MILLONES de Deuda Comercial hipotecaria Madura turn SE QUE EN-los próximos dos AÑOS, según firm-de-la-de-studies BIENES de Raíces prospectiva Analytics. 

El panorama ha empeorado ", dijo Anton protection, PRESIDENTE DE Mendon Capital. 

ADEMAS, Los-bancos TAMBIÉN podrían verse obligados a renegociar algunos préstamos CON EL FIN-de Perdidas Further avoided. 

Los-bancos no quiere Los propios commercial centers. Los prices son MUY Bajos, POR LO QUE Los bancos PUEDEN Estar Bajo Presión para Más margins are maniobra para los de destacaron Comercial operator of commercial centers in Los operator Seguir funcionando Kon de la Esperanza QUE and trav puedan OBTENER -de-la-recesión not incautación-de-los-BIENES, L. Venta UN Precio Venta de Fuego Y QUE TENER sufrir a Gran perdida ", dijo Ellman. 

Otro Dolor de Cabeza para REGIONAL DE Bancos 

Casa de Fox corretaje-Pitt Kelton assessment QUE BIENES commercial representados Raíces EN promedio POR Ciento EL-23-de-los-préstamos de los de-bancos Almost 60 QUE Abarca, CON 57 POR TANTO To EN EL CASO Ciento De PacWest Bancorp 

Dijo that Aun los bancos necesitan cifra record de US $ 63 MILLONES EN LA Construcción Y BIENES commercial Raíces, Perdidas, O EL 83 POR Ciento Total Estimado to Las Perdidas QUE EN LOS NEGOCIOS. 

ADEMAS, dijo Fox-Pitt reglamentarios data de los bancos sugirió 100 La Construcción Y Raíces BIENES commercial, Las Perdidas fueron 2.39 Y POR LA Ciento morosidad POR Ciento 5.27 fueron EN EL Cuarto trimestre, Todavía MUY POR debajo de los Picos historicos POR Ciento de 4.46 and 17.16 POR Ciento, respectivamente, DESDE principios to decenio de 1990, Cuando Eran Los préstamos la Fuente de Credito main agitación. 

Los-bancos regional podrían Ser some de-las-principales víctimas. 

"If Khan financiado Más pequeñas property de Sus comunidades, POCO commercial on-los-regional center, Y Los Afectados son sin Duda QUE TIENE To conseguir minoristas reduction ... Y obviamente la capacidad-de-los-commercial para llevar el Service de su Deuda debilita ", afirmó protection. 

Fox-Pitt Estimado BB and T Corp., Comercio Y Bancshares Inc Sterling Bancshares Inc Todavía TIENEN QUE Darse Bill de Entre 94 and 95 POR Ciento de Su Construcción Y-de-la-Cartera BIENES commercial Raíces. 

Más Alla de los-bancos regional, incluso EN Wall Street Estrellas PARECE EN Estar problems. A principios de Este MES, Roger Freeman, Barclays Capital, Morgan Stanley analista de calculations QUE podría incurrir S $ 2,6 million MILLONES-de Sus Perdidas BIENES Raíces de Inversiones. 

Goldman Sachs and Sanford C. Bernstein Wall Street cortar el del Banco de ingresos Foresight Chief citando cancellation in your presence Comercial EN LOS Best respaldados POR hipotecas inmobiliarias Y SUS carteras investment. 

Pero su not available to solo. Entre los mayores bancos commercial, de Fox-Pitt Estimado de Bank of America Corp. El Futuro-de-las-Perdidas relacionadas CON SU Construcción Y BIENES commercial Raíces Cartera representaba EL 5 Ciento POR SU social capital común. 

El-temor de las there-QUE disposición Aun no han SIDO totalmente ", dijo Thomas Russo, director of Gardner Russo And Gardner. 

Bank of America, Morgan Stanley, Sterling Bancshares, BB AND T Bancshares Comercio in his HACER comments.

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President Barack Obama said on Tuesday he had seen signs of progress in its campaign to implement the United States from the economic crisis in order to reassure Americans tired of the recession on the right track.

"We are moving in the right direction," said Obama, in his second prime-time White House news conference since taking office on January 20.

The drop step anger, government and corporate bonds, compared with its huge skepticism about the budget, Obama has moved into its policy and focus on the economic agenda to a large extent.

He made his case the American people on the same day that a coordinated approach among the largest economies of the world, and only on the day following the discovery of billions of dollars soak up toxic bank assets in connection with the global financial collapse.

Obama has the podium after the U.S. called on investors' stock slipped, while the government's recent efforts aimed at maintaining the balance of the banks. The initial euphoria about the plan, stocks sharply higher on Monday.

Despite the fact that the economy is in, the press conference Obama gave him an opportunity to lay the foundations for a certain week before he made his debut on the international scene with his first major presidential election in overseas travel.

Brush side G20 summit of major economies in London on 2 April, it is inconsistent with its European partners, Obama said that he expects state leaders shared the goal of promoting growth and renewal of outdated financial management, avoiding trade protectionism.

Obama, who promises to repair America's image abroad, after eight years of George W. Bush has previously stated that the signs of change in its policy of "restoring confidence" in the international world of American leadership

He made it clear that he was serious about its recently about a new beginning in the U.S. for a long time enemy of Iran and said that the status quo in the Israeli-Palestinian conflict has taken on a strong commitment to the U.S. as "unsustainable sustainable."

Dominated economy

Focusing on the economy, Obama said: "We have developed a strategy to attack this crisis on all fronts. This is a strategy to create jobs to help the owner to resume lending and economic growth in our economy in the long run. And we are beginning to see signs of progress ".

The administration cited the recent signs of improvement in the devastated housing market, but most of the major economic indicators are still under extreme stress.

Obama higher adoption have been tested in the public response to the payment of $ 165 million in executive bonuses to American International Group after the insurance giant received a $ 180 billion in taxpayer funds to rescue.

Obama was forced to repeatedly denounce AIG bonuses in an attempt to temper public outrage and calls for protection of the Minister of Finance Timothy Geithner waive its consideration of the case.

Obama has serious problems with the way back to the journalists, but he was pressed over AIG wildcat scandal.

The question of why his sentence was deferred for payment of AIG, the president - who cultivated "Obama is not a fiction" image ", - he said laconically:" It took us a few days because I would like to know what I am talking about before speak. "

AIG sensation to distract Americans from Obama to convince them that the $ 787 billion program to stimulate economic shock to the economy from recession, and its inclusion of $ 3.55 trillion budget for fiscal year 2010 money.

An attempt to resolve the matter on its economic rescue measures, Obama defended his proposal on the budget, the opposition and even some fellow Republicans, Democrats have criticized for being too expensive.

Obama said his budget, and then in the committees of Congress this week, paving the way to overall economic growth, providing time to borrow and spend, if we save and invest. "

Congressional Budget Office projects Obama plan the budget deficit for fiscal year 2009 is just over 1.8 billion dollars for fiscal year 2010, about 1.4 billion U.S. dollars.

Knowing about the problems, leading Obama, his economic outlook. "There are no quick fixes, and there is no panacea," he said.

He stressed that the United States, despite the economic problems the U.S. has "very strong" on the credibility of America in the economic outlook and said that there is no need for a single global currency - a proposal recently submitted by China and Russia.

Vaunted Obama message machine has a central place

When billionaire investor Warren Buffett said the president Barack Obama economic message confusing and undermines public confidence, it is worth listening to. Half of his first 100 days in Office Communicator, than Obama has problems, the right tone when it comes to economics, partnerships bleak warnings about the future with optimism. In the campaign, Obama said the president should be able to do several things simultaneously, and the White House does. He and his colleagues interspliced remarks about the economy, while the introduction of daily health initiatives, stem cell research and on Tuesday, to education. Last week, the White House, spent some time that the conservative radio talk show host Rush Limbaugh as the leader of the Republican Party. But Obama, as well as Minister of Finance, Timothy Geithner, the White House economic guru Lawrence Summers and others have still not been able to explain how they can save the banks, some of them to the brink of collapse. He speaks of "stress tests" for banks in difficulty, or nationalization, or not, is not small - but there is no clear plan. Buffett, an informal adviser to Obama believes financial seers on Wall Street, CNBC reported on Monday, news was "very, very clear that the government will." "And I think we have, and the nature of the political process, a little bit, but we have mixed messages and the public does not know. They believe that they do not know what happened and their reaction, and then completely" he said. The White House, spokesman Robert Gibbs reacts defensive, Obama said only seven weeks in office, and there should be no surprise that "all the problems, the root of many years, not been solved." Obama, education event on Tuesday, he rejected criticism that he was trying too many things at once with three predecessors, the juggling problems on many fronts - Abraham Lincoln, Franklin Roosevelt and John Kennedy. "President Kennedy is not the luxury of choosing between civil rights, and the moon. And we do not have the luxury of our economy, and is now a long-term reconstruction," he said. Obama has the support of the population is high. Polls him 60 percent approval, and experts say that voters are ready to show him the time to make his sea legs. "He has an audience that is concerned about the president some slack and understand that this is a deep problem," said American Enterprise Institute political analyst Norman Ornstein. This may be a problem for the summer "But if there are any signs of progress in any case, there is no evidence that the measures taken in the period from January to February is not done in June, July or August, then it becomes a major political issue" said Ornstein. University of Virginia, Larry SABATO, a political scientist said that the Government has left confusion about what is happening with the banks and may be inadvertently sending the message that "the problem is too big for the government to resolve." "I can not imagine what they are talking about banks," he said. Tony Fratto, Treasury, and former Press Secretary, White House of former President George Bush said in confusing messages not the only problem. "This is not just a problem of communication. This is partly because the market does not give clear information about what are the intentions of the Ministry of Finance for the rest of the program, he said.

Obama said that the U.S. - can not afford to wait for health care

They say that Americans can not afford a full review of health care, President Barack Obama on Thursday promised to break the political impasse, which prevents the previous efforts to approve a plan this year. Obama formally launched a campaign to reform the health system as a forum for the White House and said that some 120 professionals, expensive and inefficient system towed the U.S. economic crisis. "The reform of health care is not only a moral imperative, it is necessary, the business year," said Obama. "If we want to create jobs and rebuild our economy, we are on the cost of health care for crushing this year, under this government." Obama said that he understands the skepticism about the initiative, the failure of President Bill Clinton with a plan in 1990, who died in the strong opposition from insurance and pharmaceutical companies. "I know that people are afraid we will have the same line in the sand and the same interests, and the same dead end, we have had in decades," he said. "This time is different. This time, the demand for reform from the bottom up, from the entire spectrum - from doctors, nurses and patients, unions and businesses, hospitals, medical institutions and groups," said. Obama is a unit for general medical care, the central promise of the democratic candidate, is another point of ticket jammed day at the White House, including programs aimed at alleviating the economic crisis, the rescue of the financial system and the healing crisis in the housing market. But the U.S. said Obama, the economic crisis, this is more to health, and reiterated the purpose of a comprehensive measure of health services by the end of this year. "By a wide margin, the greatest threat to our nation, is the result of the rising cost of medical services, he said. U.S. health expenditures rose to 2.5 billion dollars a year, and the number of uninsured have swelled to 46 million. The country has consistently lower than in other rich countries in preventing and treating many diseases such as diabetes. GROWING momentum of reforms The political impetus for the revision has improved in recent years. Obama and his Republican rival in the presidential election, Senator John McCain, who suggested significant changes in health during the campaign. More than 80 percent of Americans believe that the United States - the health care system needs fundamental change or a complete overhaul, 2008 Harris Interactive survey found. In his budget, Obama suggested that, in addition to the $ 634 million to pay for the review in the next 10 years. "Now is the time to act," said Senator Edward Kennedy, a Democrat and a champion of health care reform, the emergence of which in the final session of the Forum applause. "I'm hoping to be a foot soldier in this company," said Kennedy, a brain tumor. "At this time we will not." At the White House during the session of Congress, industry, labor and reflection, some experts, such as insurance and pharmaceutical industry lobbyists, the implementation of the final plan. Health care stocks are usually on Thursday. Morgan Stanley health care payer health insurance index fell more than 9 percent, including drops of Humana Inc. and Cigna Corp. Obama has a plan to reform the Congress to avoid the problems that led to the death of Clinton and effort before he relies on the concept. "Clearly, there is tremendous momentum," said Democratic Senator Max Baucus, chairman of the Senate Finance Committee. "What must we do? The fact that it is incredibly difficult." Senator Baucus and Charles Grassley, ranking Republican on the Senate Finance, said that the bill in June of Health. Representative Joe Barton, ranking Republican on the House panel, the fact that for the health sector, the President congratulated all the participants to achieve together, and said that "if this is the real process, and listen to us, people like me to participate." "I do not know what will happen in 90 years, a failure," said Burton, adding that he worked until the end of Clinton plan. "But it is different time and a different approach." Clinton was criticized for hatching plans for reform behind closed doors, but Obama said that ensuring the process is transparent and inclusive. Health and Human Services Department has launched a new website dedicated to this subject in www.healthreform.gov.

Obama wants to costly defense contracts

President Barack Obama said Wednesday the U.S. government paid too much for something that is not necessary and ordered to disperse the costs "to suffer from huge cost overruns and fraud." Democrats, Republicans under fire for 3.5 billion dollars for its budget in 2010, also aimed at predecessor George Bush, and noted the costs of government contracts, to ensure that more than half a trillion dollars in the last eight years. Obama, who inherited a budget of 1,3 billion deficit when he took office on January 20, said wasteful spending is a problem in the power, but to zero in the defense industry, and expensive projects financed by the gun, immediately after the delay. " "Day of Defense, the contractor a blank check," Obama told reporters at a press conference about his reforms. Said ball is the cost of the project to Lockheed Martin Corp. to build a new fleet of presidential helicopters as an example for the purchase of "Ido fury." Defense companies, however, bristles at the suggestion that Obama was Running Wild on the taxpayers' money, and insisted he has always been oversight and accountability. Obama said that he was ordering the reform, the state-owned companies, a step to save taxpayers $ 40 billion per year and help reduce the budget deficit, which he estimated at $ 1 billion for the 75 fiscal year 2009. "We stop the outsourcing of services in public and open recruitment process for small business. We end with no extra money and spending, as well as contracts," he said. Critics say that in terms of cost, as well as contracts to invite abuse, because they allow companies to the detriment of the Government, as well as fixed costs to benefits, regardless of how bad their performance. Obama tried to demonstrate its determination to exercise fiscal discipline, even if public spending ratchets-up said that is crucial for the worst economic crisis in decades. Republicans, including his opponents in the election, Senator John McCain, the reform of public procurement, but said his budget proposal is part of the tax and spending policy of the attack. IN IRAQ Obama in the White House Budget Director Peter Orszag, to begin work with the Cabinet and officials of institutions to develop new guidelines for hiring at the end of September. "Too often, suffers from huge cost overruns, fraud and lack of oversight and accountability," said Obama, the campaign promises of radical change and greater accountability in Washington. "We give money for things you do not need, and we will pay more than you have to pay, and this is totally unacceptable. I reject the false choice between the country and some of the loss of billions of taxpayer dollars," he said. Obama said that the Government Accountability Office has examined the 95 largest defense projects in 2008 and found cost overruns in the US $ 295 million. "This is happening because of lack of control. It comes from the influence of trade and the justification without bidding contracts taxpayers billions of dollars," he said. Obama said the war in Iraq, where he said that too much money has been paid for services not performed, and the building was never completed, while the company skimmed the top. " Secretary of Defense Robert Gates said the Pentagon and Congress to make difficult decisions concerning expensive weapons programs, partly as a result of global economic weakness and the continuing war in Iraq and Afghanistan. Pentagon review of procurement procedures, and it is expected that a decision on the fate of big-ticket programs like Lockheed Martin F-22 jet first. Lockheed Martin, the Pentagon's largest provider of sales, said, on Wednesday to work with the Government and Congress to promote the effectiveness of the systems have been developed and deployed. Boeing Co. ", № 2 contractor, it was committed to" best value for taxpayers. " Aerospace Industries Association, U.S. defense contractor's first statement Obama disputed that there is a blank check to the contractor. "It has always been oversight, monitoring and enforcement of government procurement," said Sterling Cable, vice-president of the group.

Top U.S. - officials in Syria, as Clinton has pursued peace in the Middle East, "many areas"

Hillary Clinton announced yesterday that Washington will consist of two senior officials in Syria for talks "in the clear signs of further easing of U.S. policy.

U. S. Secretary of State, meets Israeli leaders in Jerusalem, said he could not predict whether the talks. But he added: "We do not participate in discussions on the establishment of a chain. There should be an objective for them to be certain advantages for the United States and our allies."

U.S. said Jeffrey Feltman, Principal State Department Middle East diplomat, who would travel to Damascus to Dan Shapiro in the White House National Security Council. Feltman met last week for almost two hours with the Syrian Embassy in Washington, the highest level contact between the countries since the beginning of the government Obama.

Washington recalled its ambassador to Damascus in 2005 after the assassination in Beirut of former Lebanese Prime Minister Rafik al-Hariri. But the Obama administration should reconsider its policy towards Syria, and was considering sending ambassador back. On Monday at a conference on aid to Palestinians in Egypt, Clinton shook hands and spoke briefly with Syrian Foreign Minister Walid al-Moallem.

Clinton came after the announcement, she met with Israeli Foreign Minister Tzipi Livni. He also met with Israeli President Shimon Peres and opposition leader and likely next Prime Minister Benjamin Netanyahu and the current Prime Minister Ehud Olmert.

Clinton said Monday he wants to achieve peace between Israel and the Arab world in many fronts, that they can get Israel and Syria to talk. Some leaders of Israel believed that the agreement with Syria would be easier to achieve a peace agreement with the Palestinians. Nevertheless, in all visibility, Netanyahu made at the beginning of negotiations with Syria, abandoning the Golan Heights to Syria, which Israel captured in 1967.

Netanyahu, who is likely to be in a narrow, right-wing government is also short for the two states to end the conflict between Israel and the Palestinians. Clinton said that an independent Palestinian state was "inevitable" that the new Israeli Government against the dollar - Administration. Clinton said one of the two States in the operation "in the best interests of Israel."

"The United States is firmly committed to achieving the two-State solution, at each step of the way, he said." The need for cooperation in dealing with a two-state solution is inevitable. "

It was not a criticism of Israel, at a time than three weeks after the election of a new government is still in training, and proposed a "relentless" support for Israel's security. She once again spoke against rocket attacks by militant Palestinians in the Gaza Strip and said that can not be regarded as a "permanent ceasefire", the militias during their attacks. "There is no doubt that any country, including Israel, can not monitor its territory and people, rocket attacks," he said.

Clinton meets Palestinian President Mahmoud Abbas and Prime Minister Salam Fayyad in the occupied West Bank tomorrow.

Israeli officials were willing to talk to Clinton about the nuclear ambitions of Iran, Israel, as one of the biggest problems in the region.

The newspaper Haaretz said that Israeli officials "red lines" in negotiations between Washington and Tehran. Israel said that he wants a tightening of sanctions, while the dialogue is happening, and an action plan for the development of U.S. - Russia, France, Germany and Great Britain advance to decide how to act if the talks do not. Israel also wants the time limit for the negotiations said.

Clinton said she was with the United States with Israel in its approach to Iran. "When we talk about engagement with Iran, not to be confused in any way. Our goal remains the same: to keep and to prevent Iran from acquiring nuclear weapons, as well as continued funding of terrorism," he said.

"What we do well, based on consultations with our friends and Israel, especially Israel."

Obama aide: deficit goals on track despite grim economy

President Barack Obama's targets for cutting the budget deficit remain in reach, a top aide said on Sunday, despite an alarmingly steep US economic decline that could throw off revenue collections.

White House Budget Director Peter Orzag also fiercely defended a proposed $ 600 billion plan to tax high-income Americans to pay for a healthcare overhaul and another $ 600 billion plan to sell companies permits to emit carbon-dioxide gases above a fixed limit.

Republicans have complained that measures would stifle any economic rebound and weaken small businesses.

"I just reject the theory that the only thing that drives economic performance is the marginal tax rate on wealthy Americans, and the only way of being pro-market is to funnel billions and billions of dollars of subsidies to corporations," Orzag said on ABC's "This Week."

Obama last week proposed a $ 3.6 trillion spending plan for fiscal 2010, with a deficit of $ 1.12 trillion, and projected the deficit would fall to $ 533 billion in 2013. He projected a $ 1.75 trillion deficit for 2009, including the impact of a two-year economic stimulus package costing $ 787 billion.

The deficit forecasts were based in part on predictions that the economy would shrink 1.2 percent in 2009 before growing again by 3.2 percent in 2010 - figures already more optimistic than those of most economists surveyed by the Blue Chip Economic Indicators newsletter just before the stimulus plan was approved.

Then on Friday, the government reported the U.S. economy shrank by 6.2 percent in the last three months of 2008, the steepest since 1982 and far worse than most forecasts.

A sharper-than-expected contraction in the economy would lead to weakened government revenue from income taxes and other sources.

But asked if the deficit-reduction targets remained on track, Orzag said, "I think so."

"The deficit reduction doesn't just come from the economy recovering. And by 2013 or 2014, let's all hope that the economy is back on its feet," Orzag said.

He said spending cuts and new revenue sources would also help meet the targets.

HEALTH CARE OVERHAUL

Obama last week proposed a 10-year, $ 646 billion overhaul to expand healthcare to the 46 million people who are uninsured in the United States. It would be financed largely by raising taxes on households earning more than $ 250,000 a year. Much of that would come from letting tax cuts enacted by President George W. Bush expire on schedule in 2011.

Some Democrats have joined Republicans in expressing concerns about the tax increases.

"As we see in this budget that has been presented last week, it is proposing massive tax increases on people and on businesses that can't afford to pay them," said Representative Eric Cantor, who has led resistance among House Republicans to Obama's economic agenda.

White House dampens stimulus expectations

President Barack Obama's aides warned Americans on Sunday not to expect instant miracles from the $787 billion economic stimulus bill he will sign this week, but said it would help eventually.

Obama is due to sign the bill passed last week by Congress in Denver on Tuesday. It was the first major legislative victory of his young presidency, which could rise or fall with its success or failure.

"There will be signs of activity very quickly," David Axelrod, the White House senior adviser, said on "Fox News Sunday." "But it's going to take time for that to show up in the statistics. The president has said it's likely to get worse before it gets better."

White House spokesman Robert Gibbs used similar language on CBS' "Face the Nation."

"I don't think there's any doubt that we've seen this economy has gotten worse just in the last few months. The acceleration in job loss probably means that this economy is going to get worse before it gets better," he said.

Obama himself said last week that if he failed to heal the economy, he would be out of a job by 2012, when he faces re-election.

The White House hopes the package will save or create 3.5 million jobs. Mark Zandi, chief economist at Moody's Economy.com, said on "Fox News Sunday" that was likely too optimistic.

"By my estimate, it will add 2 to 2.5 million jobs, more than would be the case without stimulus, by the end of 2010. That translates into a lower unemployment rate of about a point to a point and a half," he said.

Only three Republican senators supported the bill and no Republicans in the House of Representatives backed it. They kept up their criticism on the Sunday television talk shows.

"This bill was not bipartisan. It is incredibly expensive. It has hundreds of billions of dollars in projects which will not yield in jobs," said John McCain, whom Obama defeated in last year's presidential election, said on CNN's "State of the Union."

Gibbs said Obama's team had crafted a stimulus bill to produce jobs as quickly as possible in an economy that lost 3.6 million in the past year.

BALANCED APPROACH

"The urgency to get something done was very important," he said. "What we have here is a very balanced approach that's going to put people to work."

Obama faces a new potential flashpoint next week when two Detroit automakers, General Motors Corp and Chrysler LLC, must reach agreements with the United Auto Workers labor union to restructure themselves.

Talks between GM and the union broke down on Saturday. Chrysler's negotiations with the UAW are also deadlocked.

Axelrod made it clear the White House would not intervene in the situation until after Tuesday.

"Obviously, this is a difficult situation and everyone's going to have to continue to work toward a solution. We're going to wait and see what the automakers have to say on Tuesday and we'll go from there," he said.

On a third front, Obama plans to issue a plan to tackle the housing crisis next week, hoping to stem a flood of home foreclosures that has weakened the banking system and frozen credit markets while continuing to depress house prices.

http://www.reuters.com

U.S. offers $2 trillion bank plan but stocks slump

U.S. Treasury chief Timothy Geithner on Tuesday unveiled a new bank rescue plan that would put $2 trillion to work mopping up bad assets and restoring credit, but stock markets plunged on fears it would not work.

Global markets had intensely awaited Geithner's ideas for a plan mixing private and public funding to stabilize a financial system tottering under the weight of bad mortgages, but were disappointed over the scant details provided.

The Dow Jones industrial average ended down 4.6 percent -- its biggest one-day percentage drop since December 1 -- with bank stocks hit particularly hard. U.S. government bonds rose as investors scrambled for safe-haven debt.

In a speech on television and in Capitol Hill testimony, Geithner made his case for how the Obama administration plans to handle the roughly $350 billion left in a $700 billion financial bailout fund approved by Congress in October.

Geithner said the lack of public confidence in prior rescue efforts had made it all the more difficult to stop "a dangerous dynamic" in which a lack of credit undercuts the economy and leads to more weakness among banks, worsening the recession.

"This is very complicated to get it right," he said in an interview on Bloomberg Television. "We are going to try to get it right before we give the details so that we don't add further to uncertainty in these markets."

He steered clear of saying whether the administration might have to ask Congress for more money to fix the banks, restore credit and counter recession, but did not rule it out.

"We're going to consult with the Congress carefully to try to make sure the world understands that the resources necessary to solve this will be available over time," Geithner told CNBC, adding: "The important thing is that ... we send a basic signal, working with the Congress, that we will do what's necessary to fix this."

The lack of details frustrated many market participants.

"Investors want clarity, simplicity and resolution. This plan is seen as convoluted, obfuscating and clouded," said James Ellman, president of Seacliff Capital in San Francisco.

But Thomas Priore, president of ICP Capital in New York, gave Geithner credit for candidly laying out the depth and difficulty presented by the problem of how to restart credit flows when banks are burdened by hard-to-value, weak assets.

"He told it like it is. That's a start," Priore said.

LEVERAGING PRIVATE MONEY

Geithner defended his decision to put forward what he called a framework instead of waiting until a detailed proposal was ready.

"If we wait and we take the approach that we don't lay that out, ever, until we've solved every problem and every detail, then I think that itself will create greater uncertainty," he said, acknowledging he was "very sensitive" to criticism about the approach.

A centerpiece of the renamed "Financial Stability Plan" is a proposal to set up a public-private investment fund, in partnership with the Federal Deposit Insurance Corp, a bank watchdog, and the Federal Reserve.

Seeded with public money, it would leverage up to $500 billion -- and possibly as much as $1 trillion -- so that toxic assets can be purged from a weakened banking system.

Geithner told an invited audience at the U.S. Treasury that $50 billion in federal rescue funds will be used to try to stem home foreclosures and soften the crushing impact of the deep housing crisis now afflicting the entire economy.

The plan would also expand a Fed program aimed at expanding credit card, student, auto and small business lending.

The facility will grow from its current $200 billion limit to up to $1 trillion, thanks to a jump in Treasury funding to $100 billion from $20 billion.

The lending program would be extended to cover some mortgage-related assets.

The Treasury also said it would continue to pump capital into banks, as the former Bush administration did, but Geithner said there will be conditions attached to ensure the money is lent and that top executives heed restraints on their pay.

In return for the capital, the government would receive preferred shares in the banks that could convert to common stock.

BANK FIX PART OF LARGER PLAN

Geithner said it was critically important to restore credit flows in order for a separate $800-billion-plus package of tax cuts and government spending measures to lift the economy.

Shortly after Geithner announced the plan, the U.S. Senate cleared an $838 billion stimulus package, which needs to be reconciled with a separate bill approved by the U.S. House of Representatives.

The Treasury is tussling with the worst financial crisis since the Great Depression as careless lending fueled a housing boom gone bust, dragging the U.S. economy -- and much of the rest of the world -- into a deep recession.

President Barack Obama said on Monday that cleaning up banks' balance sheets was a priority and did not rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job.

"We don't know yet whether we're going to need additional money or how much additional money we'll need until we see how successful we are at restoring a level of confidence in the marketplace," Obama told a news conference.

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Obama pushes stimulus, sees no easy out for banks

President Barack Obama urged the U.S. Congress on Tuesday to wrap up a huge economic stimulus bill and warned investors not to expect quick fixes as financial markets plunged on the lack of detail in a new bank rescue plan.

Obama, speaking at a town hall meeting in a Florida city hard hit by mortgage foreclosures, praised the Senate for passing an $838 billion spending and tax cutting bill that the president says is crucial to avoid economic catastrophe.

"That's good news," Obama said after an aide passed him a note on stage about the Senate vote.

Obama said there was still work to be done to reconcile differences between the Senate version and a $819 billion bill passed earlier by the House of Representatives.

"I'm not going to tell you that this plan is perfect. I mean, it was produced in Washington," Obama said to rueful laughter.

"But I can tell you with complete confidence that a failure to act in the face of this crisis will only worsen our problems. Doing nothing is not an option."

In Washington, Treasury Secretary Timothy Geithner unveiled a bank rescue plan to remove up to $500 billion in bad assets and support $1 trillion in lending.

But financial markets, hoping for more details, fell on the news.

"Wall Street, I think, is hoping for an easy out on this thing and there is no easy out," Obama told television network ABC in an interview.

"There's a lot of work that has to be done to put these banks back on a firmer footing."

Geithner did not detail how the administration would address housing issues that sparked the financial and economic crises. Obama said he would lay out those plans himself.

"I'm going to be personally making an announcement in the next couple of weeks what our overall housing strategy is going to be," Obama told the Florida audience, answering a question about the unwillingness of banks to restructure the terms of housing loans when homeowners were not yet in default.

"Unless we address this in a serious way, we are not going to be able to get the economy back where it needs to be," Obama said.

The Florida trip, which included emotional moments with people hurt by the nation's economic downturn, was the second stop on a roadshow in which Obama is taking his argument for the stimulus package directly to Americans.

On Monday he went to Elkhart, Indiana, where unemployment has rocketed as the economy fell into the deepest recession in decades.

IMPORTANT MILESTONE

The stimulus package is an important milestone for the new president, a Democrat who took office three weeks ago, inheriting the crisis from his predecessor George W. Bush. He wants a finished bill on his desk by February 16.

Republicans complain it has too many spending projects and not enough tax cuts. The House version passed with no Republican support, while the Senate version drew only three Republican votes.

The final version will also need those votes to pass, setting up a new round of haggling this week.

Obama, who had originally worked to attract bipartisan support after championing a more cooperative approach in Washington, has shown decreasing patience for the stand of Republicans whose policies, he said, had caused the problem.

"It's a little hard for me to take criticism from folks about this recovery package after they've presided over a doubling of the national debt," he said at a news conference on Monday. "I'm not sure they have a lot of credibility when it comes to fiscal responsibility."

Obama went to Fort Myers partly because it had the country's highest foreclosure rate last year, with 12 percent of housing units receiving a foreclosure-related notice.

Unemployment in the area was 10 percent in December -- more than triple the rate two years ago, the White House said.

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Obama team works on bank rescue, private money eyed

The Obama administration on Monday was nailing down details of a bank rescue plan expected to offer incentives to lure private investors into buying bad debts undermining the financial system and the economy.

U.S. Treasury officials were expected to brief congressional committee staffers on the plan on Monday evening, with Treasury Secretary Timothy Geithner scheduled to outline it publicly at 11 a.m. on Tuesday.

The plan and the administration's economic stimulus program are pillars of President Barack Obama's strategy for tackling the deepest U.S. financial crisis since the Great Depression.

A top White House aide said the administration will push private investors to buy compromised mortgage-related assets that are clogging bank balance sheets.

"Government capital is a last resort, and wherever possible, we want to catalyze the private sector to take responsibility for a situation that in many ways was created in the private sector," National Economic Council Director Lawrence Summers said on CNN.

Financial sector lobbyists said they doubt the Treasury is ready at this point to unveil a plan with the level of detail being sought by much of the banking community and Wall Street.

Major banks and Wall Street want the government to buy distressed assets off their balance sheets, but the administration has struggled with pricing the assets in a way that helps the banks while also being fair to taxpayers.

Summers said on Sunday the administration believes that with the right kinds of government guarantees and financing, the government can bring in "substantial" private capital.

ANNOUNCEMENT POSTPONED

An announcement on the bank plan had been set for Monday, but was pushed back so the administration could focus its efforts on pushing a huge economic stimulus bill through Congress.

A source familiar with the administration's thinking said creation of a so-called "bad bank," financed in part by private equity, was under discussion as a way to take bad assets off banks' books.

To lure in private investors, the bank could be allowed to issue debt backed by the Federal Deposit Insurance Corp, the source said.

U.S. stock indexes edged down on Monday but bank shares gained on hopes the rescue plan would not dilute current shareholders.

The Treasury is expected to continue to pump capital into banks. A person familiar with the matter said it would likely begin taking preferred stakes that would eventually convert into common equity, buying time for a bank to recover before shareholders are diluted. Currently, the Treasury takes a preferred share and a warrant for common stock.

The plan Geithner is set to outline marks a revamped approach to a $700 billion financial bailout fund approved by Congress last fall.

Officials are not expected to ask immediately for more funds to help rescue the banks, despite signs that future banking sector losses may be huge.

Public opinion has turned against the way the first half of the bailout funds were rushed out to help banks, with little clear impact, and Republicans in Congress have voiced stiff opposition to the size of Obama's economic stimulus plans.

ECONOMY CHOKING

But with banks worldwide laid low by huge losses and a scarcity of credit choking the U.S. economy, Geithner was searching for ways to get at the root of the problem -- a mountain of bad debts tied to U.S. mortgages.

Summers said on Monday the president would announce plans to contain damage to the housing sector within two weeks.

Shares in major U.S. banks such as Bank of America and Citigroup have been volatile in recent weeks on speculation about the contents of the plan.

As part of the bailout revamp, the Treasury is expected to offer government guarantees against losses for distressed assets that would remain on banks' books but that would be separated from the rest of a bank's portfolio.

Geithner is also expected to announce plans to widen the scope of a Federal Reserve program worth up to $200 billion that seeks to encourage private investors to buy consumer-credit backed debt.

The administration is also designing a mortgage rescue program that would see Fannie Mae and Freddie Mac ease payments for hundreds of thousands of borrowers and offer a model for Wall Street to do the same, sources familiar with the plan said.

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Obama says U.S. economy risks "negative spiral"

President Barack Obama said on Monday that if the government failed to act, the U.S. economy risked sinking into a "negative spiral" that could prolong the current recession.

"This is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression," Obama told a news conference, citing Japan's "Lost Decade" of the 1990s as an example of what can happen when an economy fails to revive.

"We've lost now 3.6 million jobs. But what's perhaps even more disturbing is almost half of that job loss has taken place over the last three months -- which means that the problems are accelerating instead of getting better," Obama said, repeating his call for swift passage of a roughly $800 billion economic stimulus plan.

"I'm absolutely confident that we can solve this problem but it is going to require that we take some important steps," he said.

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Obama pitches economic plan to American people

President Barack Obama took his case for a massive economic stimulus package directly to the recession-weary American people on Monday as he urged Congress to move swiftly on a final bill before the crisis worsens.

Holding his first news conference since taking office, Obama pressed lawmakers to "act without delay in the coming week" to resolve differences over an $800 billion-plus economic rescue plan expected to help define his young presidency.

"With the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life," Obama said as he began a televised prime-time appearance in the East Room of the White House 20 days after his historic inauguration

Sandwiched between campaign-style trips to economically blighted areas in Indiana and Florida, it gave Obama a chance to pitch his solutions for confronting the worst financial meltdown since the Great Depression.

The new Democratic president also hoped to regain momentum following a week in which a key cabinet nominee withdrew in a flap over unpaid taxes and his push for the stimulus plan hit unexpected snags in the Democratic-led Congress.

It remained to be seen, however, whether his words -- spoken in the calm, deliberative tone that helped him win the presidency -- would be enough to ease Americans' anxieties and stabilize jittery world markets.

Despite an ideological split along party lines, the House of Representatives approved an $819 billion economic recovery plan last week.

Just hours before Obama stood in front of the cameras, the Senate moved a step closer to passing its own bill, setting up a vote on a $838 billion emergency package on Tuesday.

But delays in fashioning compromise legislation, a mix of government spending and tax breaks, could prevent Congress from delivering a final bill to Obama by his deadline this weekend.

While the economy topped the agenda, Obama was also expected to face questions about his early foray into foreign policy as he seeks to repair America's image abroad. Issues were likely to include the wars in Iraq and Afghanistan and the nuclear standoff with Iran, challenges bequeathed to him by his predecessor, George W. Bush.

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Russia signals new optimism on ties with U.S

Russia on Sunday welcomed a pledge by the United States "to press the reset button" on relations with Moscow, in a sign the former Cold War rivals could repair relations under President Barack Obama.

Vice President Joe Biden, in a speech at a security conference in Munich, said on Saturday it was time to end a dangerous drift in ties and work with Moscow.

Russian Deputy Prime Minister Sergei Ivanov, speaking at a news conference in Munich after meeting Biden on Sunday, said the United States had sent a strong signal about its willingness to cooperate.

"It is obvious the new U.S. administration has a very strong desire to change and that inspires optimism," Ivanov said.

Relations between Russia and the United States have grown increasingly strained in recent years.

Russia's brief war with Georgia last year and its recognition of the breakaway Georgian regions of Abkhazia and South Ossetia were condemned by the United States.

Moscow responded angrily to former President George W. Bush's plans to deploy parts of a missile shield in Poland and the Czech Republic as defense against perceived threats from countries hostile to Washington, chiefly Iran.

It also bristled at Bush's push to bring Russia's neighbors Georgia and Ukraine into the NATO alliance.

Obama promised a more pragmatic and less ideological foreign policy, fanning expectations of a thaw in relations with Russia.

CONCILIATORY COMMENTS

Asked whether Russia would take concrete steps to respond to Washington's overtures, Ivanov was cautious, saying: "It is not an oriental bazaar and we do not trade the way people do in a bazaar."

In some of the most conciliatory comments from Russia for some time, he indicated Moscow was prepared to discuss missile threats with Washington and renewed an offer to use existing Russian radar stations in a future defense system.

Ivanov reaffirmed that, if the United States scrapped plans to deploy the shield in central Europe, Russia would not follow through on a threat to put its own nuclear missiles near the Polish border.

He said he believed the United States was ready to start negotiations soon on disarmament and welcomed Obama's pledge to talk to Iran about its nuclear program.

"We welcome any steps aimed at a political settlement of the Iranian nuclear program," Ivanov said.

Russia holds a permanent seat on the U.N. Security Council and is an important player in Western efforts to curb Iran's nuclear program.

In his Saturday speech to the annual gathering of world leaders and defense experts, Biden acknowledged that Washington and Moscow would not agree on everything.

"But the United States and Russia can disagree and still work together where our interests coincide and they coincide in many places."

Until now, Moscow has sent contradictory signals about the kind of relationship it wants with Obama's administration.

Last week, the former Soviet republic of Kyrgyzstan said it would close down a U.S. air base on its territory that supplies U.S. forces fighting in Afghanistan.

The surprise move coincided with an announcement that Kyrgyzstan would receive more than $2 billion in aid and credit from Russia, raising questions about whether Moscow might have played a role in the decision to close the base.

Ivanov denied that was the case.

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White House seeks final passage of rescue plan

Top aides to President Barack Obama on Sunday urged Democratic and Republican lawmakers to set aside political differences and quickly approve a massive economic stimulus package this week.

"If there was ever a moment to transcend politics, this is that moment," Larry Summers, head of the White House National Economic Council, told "Fox News Sunday."

Yet, with the world watching to see how the new president and Congress respond to the worst U.S. financial crisis in 70 years, more political fireworks were certain at the U.S. Capitol.

Squabbling will resume on Monday when the Democratic-led Senate, with the help of just a few Republicans, votes to end debate on an $827 billion rescue package and clear the way for passage of the measure on Tuesday.

Negotiators will then seek to resolve differences between the Senate bill and an $819 billion version of the measure earlier passed by the House of Representatives without any Republican support.

"Negotiations will be difficult, but fun to watch," a Republican aide said, citing battles on the size and scope of a final package of tax relief and new spending.

Senator Charles Schumer of New York, a member of the Democratic leadership, told CNN's "State of the Union" that the House, Senate and the White House "all agree there has to be some give and take."

Obama has demanded that a final bill be on his desk by next Monday to sign into law.

The president takes his case to the public this week, traveling on Monday to Indiana for a town hall meeting and then returning to the White House for a prime-time news conference. Tuesday he goes to Florida for another town hall meeting.

The political drama is being played out as the Democratic and Republican parties are at odds ideologically, with both claiming popular support.

Republicans stand accused of having driven the country into an economic mess under President George W. Bush, and of pushing a tax-cut agenda that failed to revive the economy and instead helped create a record federal deficit.

Foes accuse Obama's Democrats of seizing on the economic crisis to pump cash into their pet projects and "big government" social agenda under the guise of creating jobs.

The White House itself has been vague about what it wants other than a plan with enough support by Democrats and Republicans to win passage and create jobs.

Appearing on CBS's "Face the Nation," Christina Romer, another top Obama fiscal adviser, said, "If we can get this (rescue) package through, we can turn it (the economy) around and be back on the road to growth."

FAILURE WILL BE "CATASTROPHIC"

Warning that failure is not an option, Romer said if the package falls apart, "I think it would be -- the word the president used was catastrophic."

Seeking to keep Congress focused on the package, the Obama administration on Sunday delayed Treasury Secretary Timothy Geithner's announcement of a keenly awaited and separate bank rescue plan until 11 a.m. EST (1600 GMT) on Tuesday. The announcement had been expected to be made on Monday.

"We need to get the stimulus package through and we do know that any package to get the economy healthy is going to be more effective if we get the banks healthy, because we have got to get them lending again," Romer said.

Summers, appearing on ABC's "This Week," added, "There's a desire to keep the focus right now on the economic recovery program, which is so very, very important."

Democrats seem to have the votes needed to prevail on the economic stimulus package, the centerpiece of Obama's plan to revive the U.S. economy.

Yet Republicans ripped into Obama, charging he has fallen short of his campaign vow to work with them and promote a new spirit of cooperation in Washington.

"This agreement is not bipartisan," scoffed Republican Senator John McCain, who lost the 2008 White House race to Obama.

Appearing on CBS's "Face the Nation," McCain argued that the package is twice as much as needed. He also noted just three Republicans in the 100-member Senate back it.

McCain said he believed the rescue package "may help a bit," but will also saddle future generations with increased federal debt.

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, appearing on the same show, accused many Republicans of playing politics.

"I think most of them have made a political calculation that it's better to be in opposition. And you can see that on a political basis because, look, this economy is in desperately serious shape," Conrad said.

Republican Senator John Ensign said he expected the Senate bill to pass. But Ensign said he and other Republicans want time to go through the compromise package that was reached late on Friday and put into written legislation late on Saturday.

"This is almost a trillion dollars. You don't get do-overs with a trillion dollars," Ensign told NBC's "Meet the Press."

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Obama takes a break at Kennedy Center show

After a tough week of haggling over an economic stimulus package and cabinet nominee dramas, President Barack Obama took some time to unwind on Friday night and stepped out for a dance show with his family.

Obama, first lady Michelle and daughters Sasha and Malia attended a 50th anniversary celebration performance by the Alvin Ailey American Dance Theater at the Kennedy Center for the Performing Arts in Washington.

The audience at the sold out show greeted the Obamas with raucous applause as the first family waved from a red VIP box decorated with the presidential seal.

The Ailey company is a celebrated predominantly African-American modern dance troop founded in 1958.

The group has performed for estimated 21 million people in 71 countries.

After their date night on Friday, the Obamas will go to Camp David on Saturday for their first visit to the presidential retreat outside Washington.

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Senators reach deal on stimulus bill

Democratic senators agreed on Friday on a scaled-back $780 billion fiscal stimulus package, a potentially big win for President Barack Obama but undercut by scant Republican support.

Democrats said a vote on passage of the measure, drafted by leaders of a group of moderate lawmakers from both parties, and closely watched internationally as a sign of U.S. commitment to help revive the world economy, would be held by early next week.

"We do not want this recession we're in to march into a depression," said Senate Majority Leader Harry Reid, a Nevada Democrat, confident he had the votes for passage.

With the United States in the grip of the worst economic crisis in more than 70 years -- a report on Friday showed nearly 600,000 jobs were lost in December -- Obama has demanded that a bill be put on his desk by February 16.

After five days of negotiations, Democrats agreed to more than $150 billion in cuts to their earlier $937 billion proposal to trim what critics, most of them Republicans, called billions of dollars in unwarranted spending.

"We've got a deal," Senator Sherrod Brown declared after a meeting with fellow Democrats on the measure.

Democratic Senator Ben Nelson, a leader of the group, said the stimulus would help to jolt the struggling economy through middle-class tax cuts and targeted investment.

"We trimmed the fat, fried the bacon and milked the sacred cows," he said on the Senate floor.

The Senate met as official data showed U.S. job losses accelerating in January and the unemployment rate surging to a 16-year high.

Despite that news, U.S. stocks rallied for a second day on Friday partly in anticipation of a possible accord on the stimulus.

If the measure passes, lawmakers would have to resolve differences between it and an $819 billion version of the legislation approved last week by the House of Representatives without a single Republican vote.

Once a final bill is crafted and passed by both chambers, the measure would be sent to Obama to sign into law.

JUST ENOUGH SUPPORT

Senate Finance Committee Chairman Max Baucus said the compromise plan would pass with the support of three or four Republicans in the 100-member chamber -- a far cry from the broad bipartisan backing Obama had originally hoped for.

Senate Minority Leader Mitch McConnell denounced the pact and predicted it would do little to stem the recession.

"No action is not what any of the Republican colleagues that I know are advocating, but most of us are deeply skeptical that this will work," McConnell said.

Republican Senator John McCain, whom Obama defeated in last year's presidential campaign while promising to work with Republicans, scoffed at the measure and Obama's vow.

"You can call it a lot of things but bipartisan isn't one of them," McCain said.

Pennsylvania Republican Senator Arlen Specter also voiced criticism of the measure, but said, "I do believe that we have to act and I believe that under all the circumstances this is the best we can do and we ought to do it."

Massachusetts Democrat John Kerry said the compromise price tag would be made up of 42 percent tax cuts and 58 percent in new spending. "It's a good balance," he said.

While a deal on the measures marks a solid start for Obama, who took office on January 20, the largely party-line support in the House and Senate was a setback in his drive to foster a new spirit of bipartisan cooperation in Washington.

Opponents complained much of the new spending amounted to little more than a liberal wish list, and more should have been devoted to tax relief and job-creating construction projects instead of new rounds of other government spending.

SPENDING LOTS, FAST

Obama had said he could accept a package in the $800 billion range and that failure to act could turn crisis into catastrophe. He rejected demands for wholesale changes by Republicans, saying it was their policies that created the crisis in the first place.

It was unclear how the deal would affect changes already adopted by senators, including adding an $11 billion tax break for automobile sales and a $19 billion tax incentive for homebuyers. Conrad said they would remain but other senators said they were not included.

He also said that some 80 percent of the package would be disbursed over the first two years, higher than the 75 percent Obama had sought. He also said that money for school construction would be eliminated in the legislation.

Details of the administration's other major initiative to address the crisis -- how it will spend the remaining $350 billion of a bank rescue program agreed to under former President George W. Bush -- are due to be announced on Monday.

A source with knowledge of the plan told Reuters the measure would offer to insure some distressed assets held by banks, authorize the government to purchase others and spend up to $100 billion to buy and modify troubled homeowner mortgages.

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Senate to resume stimulus debate on Friday

U.S. Senate Majority Leader Harry Reid abruptly stopped debate on Thursday on a $920 billion economic stimulus bill, but said lawmakers would resume work on Friday in their drive for a bipartisan agreement.

Reid had said earlier in the day that he believed he had the votes to pass the measure and hoped to do so within hours. He said he would try again on Friday and remained hopeful.

"I'm cautiously optimistic," said Reid.

The Nevada Democratic said if there is no progress on Friday, however, he would file a motion to set up a showdown procedural vote for Sunday on the White House-backed measure.

Reid has said he's confident he can muster the 60 votes that would be needed in the 100-member chamber to move to end debate and head toward a vote on passage of the bill.

"I wish I had all the answers, but the answers are not here tonight. I think the answers are coming forth rapidly," Reid said. "I think staying here later tonight would not benefit us."

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Obama CIA pick may back "limited" abuse prosecution

President Barack Obama's choice to head the CIA said on Thursday he would support "limited" prosecution of any agents who deliberately violated the law in interrogating terrorism suspects.

Former White House chief of staff Leon Panetta, in Senate confirmation hearings on his nomination, broke with outgoing CIA Director Michael Hayden to support a congressional inquiry into the agency's detention and interrogation program launched after the September 11 attacks.

He said the Senate Intelligence Committee would be an appropriate place for an inquiry "to learn lessons from what happened" in the program, and said he would do everything he could to cooperate.

Terrorism suspects were subjected to harsh interrogation techniques denounced as illegal torture, including, in three cases, simulated drowning or "waterboarding."

Panetta said he considered "waterboarding" to be torture, but did not support prosecuting agents who relied on high-level legal guidance allowing such techniques.

However, "if there were those who deliberately violated the law, and deliberately took actions which were above and beyond the standards presented to them, then obviously in those limited cases there should be prosecution," he said.

He said he also suspected the United States had sent some terrorism suspects to other countries for interrogation using harsher techniques that violated U.S. standards.

Hayden has opposed any inquiry into the interrogation program, saying that if agents were to feel legally vulnerable, they would be intimidated in their future work.

Panetta said he would if necessary ask Obama to allow harsher interrogations than those covered by the Army Field Manual, which the president last month set as the government standard. The manual bans techniques such as waterboarding.

"I would not hesitate," to seek broader interrogation authority, Panetta said, adding "I think that this president would do nothing that would violate the laws that are in place."

He promised to tell Congress if Obama were to authorize a departure from standards the president imposed last month.

Panetta is a former U.S. congressman and White House chief of staff under former President Bill Clinton. He is expected to win easy confirmation, despite his lack of professional experience and some questions from Republicans concerned over his denunciations of torture.

Panetta also said as CIA director he would seek to identify risks related to the global economic crisis. "What are the consequences of that in terms of stability in the world?" he said.

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