Tales from the Trail

Washington Extra – Trying it out

March 3, 2011

It’s a bird, it’s a plane… oh wait… sorry, just some trial balloons floating around…

President Barack Obama took a harsh tone on Libyan leader Muammar Gaddafi at today’s news conference.  USA/

The way he repeatedly emphasized “COLONEL” was an effective reminder that Gaddafi was not an elected leader like a president, but rather a military man who took power through a coup.

Obama’s insistence that Gaddafi go is a way to keep verbal pressure on while he considers  which option on the table to use. He also tried to leave the impression that whatever he chooses will be bad for the Libyan leader and good for the people.

Another person exploring options is former House Speaker Newt Gingrich who announced his intent to explore whether there is support for a potential run for president.

Sort of like when policymakers agree on a framework to discuss the framework…

Here are our top stories from Washington…

Obama says Libya stalemate a danger

President Barack Obama said he was concerned a bloody stalemate could develop between Libyan leader Muammar Gaddafi and rebel forces but gave no sign of a willingness to intervene militarily. Obama said he had asked his military and diplomatic advisers to examine “a full range of options” and that a no-fly zone was one of those. “I don’t want us hamstrung,” he said. “I want us to be making our decisions based on what is going to be best for the Libyan people in consultation with the international community.”

For more of this story by Caren Bohan and Patricia Zengerle, read here.

Obama, Mexico’s Calderon seek to ease tensions

President Obama and Mexican President Felipe Calderon vowed greater cooperation to combat drugs and arms smuggling and ease trade tensions as they sought to smooth over cross-border differences. Beyond that and progress on a trucking dispute, however, their talks yielded little more than renewed commitments to the U.S.-Mexico drug war alliance, where cracks have recently appeared. Calderon raised eyebrows last week when he accused the U.S. of damaging efforts to beat back cartels, just days after one agent was killed and another wounded in one of the worst attacks on U.S. officials in Mexico.

For more of this story by Matt Spetalnick, read here.

Obama and Calderon make progress on trucking dispute

President Obama said the United States and Mexico had agreed on a way to solve a long-simmering cross-border trucking dispute that has hurt trade between the two neighbors. “After nearly 20 years, we finally have found a clear path to resolving the dispute over trucking between our two countries,” Obama said after meeting with Mexican President Felipe Calderon. If Congress approves the plan, the White House said it would lift tariffs on $2 billion worth of U.S. goods and boost hiring on both sides of the border.

For more of this story by Alister Bull, read here.

Oil prices may be up, but U.S. drivers aren’t cutting

As gasoline prices soared in February, Americans bought big pick-up trucks. For all the talk about $100-a-barrel oil snuffing out the economic recovery like spikes did in decades past, it has so far inspired only modest changes in consumer behavior. “We’ve been at $4 before — it wasn’t for very long, but we have hit that number,” said Nigel Gault, chief economist with IHS Global Insight. “Round numbers do still matter; $4 does still have shock value. Does it have the same shock value this time around as it did in 2008? It probably doesn’t.”

For more of this analysis by Emily Kaiser and Lauren Young, read here.

Data point to strengthening growth, jobs market

The number of Americans filing new claims for jobless aid hit the lowest level in more than 2-1/2 years last week and service sector hiring picked up in February, signs the labor market recovery was quickening. “There can be no denial that a strengthening in labor market conditions is under way, as layoffs have dropped sharply since the beginning of the year,” said Jim Baird of Plante Moran Financial Advisors.

For more of this story by Lucia Mutikani, read here.

House votes to rescind IRS reporting measure

The House of Representatives voted to rescind an unpopular business tax reporting requirement in the year-old healthcare law, but the measure could be delayed by a dispute with Senate Democrats over how to pay for it. Small business groups have been howling over the new reporting requirements for purchases, saying it will bury entrepreneurs in paperwork. They have convinced lawmakers of both parties to remove it.

For more of this story by Kim Dixon and Donna Smith, read here.

Erratic global reforms tempt next banking crisis

Quirks in the way countries implement global pledges to toughen up financial rules may cause regulators to hit the wrong targets while failing to prevent another crisis. Regulators, bankers and exchange heads said new rules will only be effective if they are matched globally. “Dodd-Frank will really work if the rest of the world follows the bulk of what we do here,” IntercontinentalExchange Inc Chief Executive Officer Jeffrey Sprecher said. That is a tall order, despite efforts by the Group of 20 leading economies to coordinate their actions.

For more of this summit story by Kevin Drawbaugh, Rachel Armstrong and Huw Jones, read here.

U.S. covered bond appetite still suppressed

Covered bond sales could boost the struggling mortgage bond market and give investors more options for highly rated securities, a top lawmaker and a senior regulator told Reuters this week. But building a U.S. market is still in the theoretical stage, until housing finance reform scales back massive government support in the mortgage market. “There are advantages to having covered bonds in terms of the bank, the loans staying on balance sheet, and capital held against them,” FDIC Chairman Sheila Bair said.

For more of this summit story by Margaret Chadbourn, read here.

Oil reserves give price safety valve: Geithner

Rich nations could tap strategic oil reserves if needed to ward off the risk that Middle East political unrest triggers an inflationary price spiral, Treasury Secretary Timothy Geithner said. In wide-ranging testimony before the U.S. Senate Foreign Relations Committee, Geithner again tweaked China for keeping its currency too low and assured lawmakers he was committed to expanding U.S. overseas trade while playing down risks that oil prices were a threat to a budding recovery. He said there was “considerable” spare oil production capacity around the world and “substantial” reserves on hand.

For more of this story by Glenn Somerville, read here.

Illinois regulator to head U.S. insurance office-sources

The Obama administration was expected soon to name an Illinois state insurance regulator to head the new Federal Insurance Office, said sources. Michael McRaith, seen as the front-runner for the job, is now head of the Illinois Department of Insurance. The Federal Insurance Office is being set up to monitor insurers but not regulate them under 2010′s Dodd-Frank reforms. The industry is presently regulated only by state governments.

For more of this story by Kevin Drawbaugh, read here.

What we are blogging…

Robert Pozen says not running for Senate – but perhaps could be convinced

Mutual fund industry veteran Robert Pozen says he’s not running (so far) for the Senate seat once held by the late Edward Kennedy. But he does appear to be positioning himself as a possible centrist candidate to take on Republican Senator Scott Brown.

For the full post by Ross Kerber of our Boston bureau, click here.

From elsewhere…

Gingrich exploring 2012 U.S. presidential bid

Former House of Representatives Speaker Newt Gingrich edged toward becoming the first senior Republican to challenge President Obama in the 2012 election. Gingrich, known for budget battles with President Clinton in the mid-1990s, said he would explore a bid for the Republican nomination in the weeks ahead. “We are excited about exploring whether there is sufficient support for my potential candidacy for president of this exceptional country,” Gingrich and his wife, Callista, said on newtexplore2012.com.

For more of this story, read here.

England’s 17th century witch chronicles put online

A 350-year-old notebook which documents the trials of women convicted of witchcraft in England during the 17th century has been published online. The notebook written by Nehemiah Wallington, an English Puritan, recounts the fate of women accused of having relationships with the devil at a time when England was embroiled in a bitter civil war.

For more of this story, read here.

Photo credit: Reuters/Lucy Nicholson (woman releases balloon with note in California)

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