Washington, DC, United States (KaiserHealth) – Tired of feeling “like the walking dead” but worried about the cost of a doctor’s visit, Amber Young sat on her bed near tears one recent Friday night in Woodbury, Minn.

That’s when she logged onto an Internet site, run by NowClinic online care, a subsidiary of UnitedHealth Group (which also owns UnitedHealthcare), and “met” with a doctor in Texas.

After talking with the physician via instant messaging and then by telephone, Young was diagnosed with an upper respiratory illness and prescribed an antibiotic that her husband picked up at a local pharmacy. The doctor’s “visit” cost $45.

“I was as suspicious as anyone about getting treated over the computer,” said Young, 34, who was uninsured then. “But I could not have been happier with the service.”

NowClinic, which started in 2010 and has expanded into 22 states, is part of the explosion of Web- and telephone-based medical services that experts say are transforming the delivery of primary health care, giving consumers access to inexpensive, round-the-clock care for routine problems — often without having to leave home or work.

Insurers such as UnitedHealthcare, Aetna and Cigna, and large employers such as General Electric and Delta Air Lines are getting on board, pushing telemedicine as a way to make doctor “visits” cheaper and more easily available. Proponents also see it as an answer to a worsening doctor shortage.

But some physician and consumer groups worry about the trend.

“Getting medical advice over a computer or telephone is appropriate only when patients already know their doctors,” said Glen Stream, president of the American Academy of Family Physicians. “Even for a minor illness, I think people are going to be shortchanged,” he said.

Carmen Balber, a spokeswoman for Consumer Watchdog in Santa Monica, Calif., is concerned that lower co-payments, and other incentives, will spur consumers to see doctors or nurses online just to save money. “People will choose the more economical option, even if it is not the option they want,” she said.

Employers, however, say they’re getting mostly positive reviews.

“Our employees just love the convenience, the low cost and the efficiency,” said Lynn Zonakis, managing director of health strategy and resources at Delta Air Lines, which offers NowClinic to some employees for $10 a consultation.

The global telemedicine business is projected to almost triple to $27.3 billion in 2016, according to a recent report by BBC Research, a Wellesley, Mass., research firm.

“Virtual care is a form of communication whose time has come and can be instrumental in fixing our current state of affairs within the health care system,” said Robert L. Smith, a family doctor in Canandaigua, N.Y., and co-founder of NowDox, a telemedicine consulting firm.

Although the field developed more than 40 years ago as a way to deliver care to geographically isolated patients, its growth was slow. That’s changed in the past decade thanks to the development of high-speed communications networks and the push to lower health costs.

“It’s the wave of the future,” said Joe Kvedar, director of the Center for Connected Health, founded by Harvard Medical School.

Major obstacle

One major obstacle has remained, however: Many state medical boards make it difficult for doctors to practice telemedicine, especially interstate care, by requiring a prior doctor-patient relationship, sometimes involving a prior medical exam, said Gary Capistrant, senior director of public policy at the American Telemedicine Association, a trade group. “The situation seems to be getting worse, not better,” he said.

He cited a 2010 ruling by the Texas Medical Board that effectively blocks a physician from treating new patients via telemedicine. The only exception is if the patient has been referred by another physician who evaluated him or her in person.

“It’s about accountability,” said Dr. Humayun Chaudhry, CEO of the Federation of State Medical Boards. State boards insist on licensing doctors treating patients in their states so that if patients are injured, they have a state agency they can go to for help.

“We want to enable telemedicine to flourish, but at the end of the day we want patients protected,” Chaudhry said.

Some medical boards are loosening restrictions, he noted, citing nine, mostly rural, states, including Tennessee, Nevada and New Mexico, which in recent years passed rules to ease the licensing process.

Companies marketing telemedicine services say they are seeing strong demand. Bloomington, Minn.-based HealthPartners, a health system with four hospitals and 1.4 million health plan members, began an online service in fall 2010 that allows anyone in Minnesota or Wisconsin to consult a nurse practitioner for $40 or less.

Using an online interactive tool called Virtuwell, 23,000 patients have received a treatment plan often including a prescription, after answering questions about their condition and medical history.

Laurie Fedje, of Coon Rapids, Minn., tried Virtuwell last fall when her son, Noah, had a high fever and other flu symptoms and she did not want to go out in bad weather. She said it took her about 15 minutes to answer about 50 questions about her son’s health, such as whether he had ear pain, how long he had been sick and whether he had any allergies. Within a few minutes, she received an e-mail and a call from a nurse practitioner who diagnosed him with flu and sent a prescription.

“It was wonderful,” Fedje said.

Her employer, St. Paul-based Bethel University, covers the first three visits for free as an employee benefit.

About 80% of patients using Virtuwell have insurance, and many use the service as a covered benefit, said Kevin Palattao, a vice president at HealthPartners.

He notes that Virtuwell has turned away 45,000 prospective patients because they had problems that required in-person consultations, such as chest pain or multiple chronic conditions.

The most common problems treated online are routine sinus and bladder infections, pinkeye, upper respiratory illness and minor skin rashes, Palattao said.

OptumHealth, which operates the NowClinic, said it leaves it to physicians to determine if they can diagnose a patient via computer.

“This is not intended to replace the intimacy of the doctor-patient relationship,” said Chris Stidman, senior vice president.

The company would not disclose how many people have used the service or how many physicians it employs.

Testing at drugstores

Camp Hill, Pa.-based Rite Aid recently began testing NowClinic in several of its drugstores in Michigan and Pennsylvania. It’s a cheaper alternative to hiring doctors or nurse practitioners to work in store clinics.

At the stores, patients can pay $45 for a 10-minute teleconsultation with a doctor, or less if their employer has negotiated a reduced rate.

In a tiny office next to the pharmacy counter in one Harrisburg, Pa., Rite Aid, patients use a Web camera and microphone to talk to a doctor on a desktop computer, where they type in their symptoms, a brief medical history and their credit card information. A thermometer, blood pressure machine and scale are available nearby.

The physician sends an electronic prescription to the store that can be picked up minutes later.

On a recent afternoon when a reporter tested the service, there was a choice of only one doctor — Dr. Pardeep Shori, an internist in Irving, Texas, who is board-certified in family medicine.

Shori said he typically treats about a dozen NowClinic patients a day. While he is unable to look into a patient’s ears or throat, he noted, “The key thing you learn in medical school is that a lot of information comes from just listening.”

Young, the woman who talked to a NowClinic physician from her home in Woodbury, Minn., said she would use the service again even though she now has health insurance. She was impressed when the online doctor called her three days later to see how she was feeling.

“I’ve never had my own primary care doctor do that,” she said.

– Provided by Kaiser Health News.

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Houston, TX, United States (AHN) – Dallas based Energy Transfer Partners LP, announced Monday it was buying Sunoco Inc for $5.3 billion.

Under the terms of the deal, Sunocoshareholders will receive about $50.13 a share: $25 in cash and 0.5246 common units of Energy Transfer.

Energy Transfer is paying a 23 percent premium over Sunoco’s closing prior prior to Monday’s announcement.

The transaction will assist Energy Transfer Partners goal of diversifying the company’s pipeline network and the products it ships.

The acquisition gives Energy Transfer Partners 4,900 Sunoco branded retail fueling station in the U.S., in addition to its 32.4 percent share of Sunoco Logistics Partners LP’s common units, enabling Energy Partner to expand its oil pipelines.

In September, Sunoco hired Credit Suisse to explore strategic alternatives, including a possible sale.

Sunoco, an owner of oil refineries since 1895, said it planned to exit that business after posting a $1.7 billion loss in 2011.

Shares of Sunoco soared on the news, rising nearly 20 percent to $48.88.

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Gaza, Palestinian Territory (IRIN) – The demand for microloans has risen steeply in the West Bank and Gaza Strip in recent years, according to data from the Palestinian Network for Small and Microfinance (Sharakeh), which represents 11 microfinance non-profit institutions whose total loan portfolio was US$75 million by the end of 2011.

Between 2007 and 2011, the number of active microloans in the West Bank and Gaza Strip rose from 20,000 to more than 43,000. This trend is likely to continue, said Sharakeh, predicting that by 2015 the number of loans will reach 77,000. The number of active clients receiving loans from microfinance institutions has grown by an average of 27 percent annually since 2007, he added.

“Microfinance is on the rise in Palestine because it serves small businesses which are growing in number and importance,” Shireen al-Ahmad, a division chief at the Palestine Monetary Authority (PMA), told IRIN. Trying to start a small business is one way to cope with the challenges of public sector employment – but it can be a precarious existence given the state of the Palestinian economy.

Demand for microcredit, designed for borrowers who typically lack collateral, steady employment and a verifiable credit history, has spread by word of mouth, said Alaa Abu Halawa, programme coordinator at Sharakeh, adding: “The people realized the benefit of microfinance. And its growing importance is attracting more investors.”

Besides being promoted as a tool for providing the poor with financial access, microloans in the occupied Palestinian territory (oPt) have become an attractive alternative to normal credit from banks for any small businesses, say Palestinian microfinance institutions.

“Banks require high collateral and complicated loan procedures. We don’t,” Sameer Kraishi, a microcredit manager at the Arab Centre for Agricultural Development (ACAD), told IRIN. “The Palestinian case is special…Our microloans are high compared to developing countries like India, usually about $5,000.”

During his work for ACAD, Kraishi has seen many Palestinians who successfully built up their business with the help of microloans. But equally, he has seen many of them fail. The persistent financial crisis of the aid-dependent Palestinian Authority (PA) and the resulting impacts on the general West Bank economy affect small businesses heavily, he said.

Lack of donor support

According to the PA senior official Ghassan Khatib, the PA’s salaries were once again delayed for several days this month. “The PA cannot fulfil its payment obligations because of a lack in foreign funding. The outlook for this year does not look good,” he told IRIN.

One of the reasons why economic growth in the West Bank slowed down in 2011 was foreign donors’ failure to provide sufficient support to the PA, the World Bank said in a recent report. In 2011, the PA required $1.5 billion in budget support, but eventually only received about $814 million. The budget for 2012 is expected to have a recurrent budget deficit of around $1.1 billion.

“Economic deterioration is a main reason for a rise in microfinance, which together with the PA financial crisis resulted in high unemployment and increased the poverty rate. This, in turn, lead people to look for private projects to earn their living,” said Sharakeh’s Halawa.

But small businesses are dependent on the spending of government employees. “When salaries are cut, the demand for goods and services goes down,” Samer Barghouti, general manager at ACAD, told IRIN, adding: “As a result, our clients often face difficulties paying back their microloans, and this creates risks for them, but also for us, as an institution.”

Failure never far away

One of ACAD’s clients hit by the economic slowdown is 43-year-old Mahmud al-Haj, a vegetable seller in Ramallah’s central market.

“Over the last year, I have made less and less profit. Many of my customers are PA employees. They just don’t have enough money when their salaries come too late, so they simply stop buying,” he told IRIN.

Some years ago he had made the equivalent of about $1,600 per month, now his monthly profit barely exceeds $500. He had borrowed US$3,000.

“I hardly sell 200kg of vegetables a month,” he said, adding: “I fear that once the loan is used up, I will not be able to continue. I need to pay taxes to the municipality. I have to take care of my family. I need to pay for my children’s school, for electricity, food, and haven’t even paid back most of the loan I took.”

Almost half of micro-loan projects fail in one way or another, according to Shaker Saadeh, manager of ACAD’s Ramallah field office.

“Many of our clients used to be unskilled labourers in Israel, never acquiring the knowledge necessary to run a business. Others use microloans as a means to change profession, like a carpenter who suddenly starts an agricultural business, but doesn’t really know how to do it,” he added.

Sewing

“Over the last seven years I received 15 microloans from different organizations. I used to be a wage worker, but eventually opened my own sewing workshop,” 48-year-old Na’ma Shamali said, while pulling fabric through a sewing machine in her shop in Ramallah.

Her current loan amounts to $3,000, but past experience has taught her to invest the borrowed money wisely. “At the beginning of every month I set my priorities. What do I really need? So recently I bought a new automatic sewing machine for 9,000 shekels [$2,400]. But at the beginning of every month, I pressure myself to work a lot, so I can pay back the loan,” she said.

Thanks to the growth of her business, she and her husband were able to buy the house they previously rented and send their children to a private school. “I am making 5,000 shekels [$1,320] of profit [per month] today. I am satisfied.”

Whether microfinance provides a mechanism for women’s empowerment beyond mere financial success has been widely debated in the past.

Gender issue

In oPt, real empowerment is often hindered by the traditional roles women are assigned to, said Nisreen Swelem, West Bank regional manager at the Palestinian Businesswomen’s Association (Asala), which is currently providing microloans to about 4,000 Palestinian women.

“It happens often that women continue to do the hard work while their husbands take over the business. We simply cannot control the cultural aspects,” Swelem told IRIN.

In particular in the field of agriculture, women often remain unpaid family workers and as such are invisible contributors to the economy, Asala’s research has shown.

“I try to raise awareness. I ask them, who controls the money?” Swelem said.

“There is still a lot to do on the level of gender awareness. But in one way, the positive impact of the gender meetings is obvious. Many of the women that take the trainings later become trainers themselves.”

ah/oa/cb

– Provided by Integrated Regional Information Networks.

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United States (KaiserHealth) – Once a year, employees of the Swiss Village Retirement Community in Berne, Ind., have a checkup that will help determine how much they pay for health coverage. Those who don’t smoke, aren’t obese and whose blood pressure and cholesterol fall below specific levels get to shave as much as $2,000 off their annual health insurance deductible.

Daryl Martin, 60, Swiss Village Executive Director, uses the chest press machine in the early morning hours at the Swiss Village Wellness Pavilion (Photo by William Rozier for USA Today/KHN).

At Chicago-based Jones Lang LaSalle, a real estate firm, workers can earn up to $300 in cash for having a physical and hitting certain medical goals, or completing health coaching programs.

Gone are the days of just signing up for health insurance and hoping you don’t have to use it. Now, more employees are being asked to roll up their sleeves for medical tests — and to exercise, participate in disease management programs and quit smoking to qualify for hundreds, even thousands of dollars’ worth of premium or deductible discounts.

Proponents say such plans offer people a financial incentive to make healthier choices and manage chronic conditions such as obesity, high blood pressure and diabetes, which are driving up healthcare costs in the USA. Even so, studies of the effect of such policies on lifestyle changes are inconclusive. And advocates for people with chronic health conditions, such as heart disease and diabetes, fear that tying premium costs directly to test results could lead to discrimination.

Consumer Tips: Workplace Wellness Plans

More and more employers are tying financial reward and penalties to workers completing a set of medical tests. KHN’s Julie Appleby says the tests can include blood pressure, cholesterol and blood sugar. Watch the video.

Employee reaction has also been mixed. “It’s an invasion of privacy,” says Bradley Seff, 54, a court reporter who filed a lawsuit against his employer, Broward County, in August, 2010, for introducing such a plan.

Nonetheless, such plans could be the wave of the future. Faced with crippling healthcare costs, the number of employers embracing such programs shot up from 49 percent in 2010 to 54 percent last year — and more say they expect to do so soon, according to a survey by consultants Aon Hewitt. Big-name participants include insurer UnitedHealthcare, car rental firm Hertz, postage meter maker Pitney Bowes and media owner Gannett, owner of USA TODAY.

And more employers are expected to adopt them starting in 2014, when the health law allows them to offer larger incentives or penalties than they can now.

“We’re seeing a big move in this direction driven by employers’ concern about rising health costs and their sense that employee behavior has a lot to do with high costs,” says Kevin Volpp, a professor at the University of Pennsylvania School of Medicine, who has studied the use of incentives in health insurance programs.

Cost Savings Seen

Julie White, 50, Swiss Village Director of Nursing Services, swims laps in the early morning hours at the Swiss Village Wellness Pavilion (Photo by William Rozier for USA Today/KHN).

Leaders at Swiss Village credit their eight-year-old wellness program, along with a high-deductible insurance plan and an on-site fitness center, with slowing health care cost increases. Workers saw no increase in their health premiums from 2005 to 2011.

“We continue to embrace what we’re doing,” says Daryl Martin, executive director of the nonprofit organization. Still, a few high-cost medical issues among its 230 covered employees and their dependents last year caused it to raise employee costs- percent this year.

What’s important, Martin says, is that the company’s approach keeps health “at the forefront of what people are thinking about.”

Of the employers who offer such programs, about one-third offer financial incentives to those who undergo specific medical tests, according to the Aon Hewitt survey. And 5 percent of those tie the financial rewards or penalties to meeting specific medical-based standards.

The survey also found the use of medical screening tests poised to expand to family members: 57 percent of employers said they planned to add incentives for spouses and dependents in the next three to five years.

“A lot of costs come from spouses, but only 29 percent had incentives for spouses,” says Cathy Tripp, a senior vice president at Aon.

Starting in 2014, federal law allows employers to raise the value of the perk or penalty from 20 percent of the cost of a worker’s health insurance plan, to 30 percent. Based on the average cost of employer-offered insurance today, that means firms will be able to offer annual discounts or penalties of more than $4,500 a family, or $1,600 for individuals.

Joe Burkhead, 61, Swiss Village Director of Information Services, uses the leg curl machine in the early morning hours at the Swiss Village Wellness Pavilion (Photo by William Rozier for USA Today/KHN).

Employers will still have to craft plans to comply with federal and, in some cases, state requirements, Volpp says. The programs must be voluntary — meaning an employer can’t require a worker to participate as a condition of coverage. And the employer must offer a “reasonable alternative” to qualify for the reward, or to avoid the penalty for those who can’t achieve the sought-after medical goals.

But Dick Woodruff, vice president of federal relations for the American Cancer Society Cancer Action Network, worries there’s no definition of what a reasonable alternative must include.

Some workers complain the programs are an intrusion into their private lives.

“They portrayed it as voluntary, which it isn’t, because if you don’t participate, they fine you every paycheck,” says Seff, the former Broward employee who is suing over the program. He has since retired on disability with back and neck problems. “I don’t think any employer should do it.”

In an effort to slow rising health care costs, Broward County in 2009 began asking workers to fill out a health information form and have a finger-stick blood test each year to check blood sugar and cholesterol levels, according to court filings. Workers who declined were docked $40 a month.

Those who did participate were offered disease management programs if they had asthma, high blood pressure, diabetes, congestive heart failure or kidney disease. The county stopped docking those who declined to participate Jan. 1, 2011, after Seff’s suit was filed, court documents say.

The lawsuit, which argues the county’s program violates the Americans with Disabilities Act, is likely the first of its kind in the nation, says Seff’s attorney Daniel Levine in Boca Raton, Fla. Without ruling on whether the wellness effort was voluntary, a federal district court judge backed the county in April, 2011, saying the plan fell under provisions of the law meant to protect bona fide benefit programs. The case is now on appeal. Broward County attorneys did not return requests for comment.

Some state lawmakers are also concerned about the potential for discrimination. Colorado passed legislation in 2010 that requires wellness programs to be accredited, bars penalizing workers for not participating, or failing to meet a health standard — and allows appeals if an employee is denied an alternative. A similar bill was brought unsuccessfully in California last year, according to a February report by Georgetown University’s Health Policy Institute.

While supporting wellness programs in general, several patient advocacy groups warned the Obama administration last March that additional consumer protections are needed. Tying medical test results to financial incentives or penalties in premiums or deductibles could discriminate against some workers, especially those who already have health problems, the groups said.

“When you start increasing premiums or pumping up the deductibles, you’re making it more expensive and harder for people to access insurance,” says the Cancer Society’s Woodruff, who adds that offering gift cards or bonuses are a better way to reward people for participation.

Employers, however, argue that since they’re on the hook for the bills, they can ask workers to take more responsibility.

“House money, house rules,” says Ken Sperling, global healthcare practice leader at Aon Hewitt.

Humble Beginnings

The first worker wellness programs, which began about a decade ago, rewarded simple participation: attending a health fair or filling out a “health risk assessments,” with the worker perhaps receiving a $25 gift card in return.

Today, many offer discounted premiums to workers who meet standards related to blood pressure, cholesterol and weight, with the value of those discounts running between $30 and $60 a month, says Jim Pshock, founder and CEO of Bravo Wellness in Avon, Ohio. Pshock administers such wellness programs for about 220 employers nationwide, including Colorado construction firm Oakwood Homes and Nashville’s Ardent Health Services.

Although employers may set specific goals — such as a body mass index (BMI) below the 30, the level considered obese — many also reward achievement of less daunting targets. One employer rewarded workers if their test results didn’t get any worse, Pshock says.

At Swiss Village, workers get $500 off their deductible for each of these measures: not smoking, having a BMI of 27.5 or less, a low-density lipoprotein cholesterol level (LDL) of 130 milligrams per deciliter or less, and blood pressure of 130/85 or less. LDL levels above 129 are associated with higher risk of heart disease, while blood pressure greater than 120/80 is considered a risk factor for heart attack and stroke.

A second tier of awards allow workers who approach those ranges to earn $250 per category. The testing takes place at an on-site health fair, or at a doctor’s office with the results gathered by an independent insurance firm that runs the program for the company.

Federal laws allow employers to require workers to fill out a health risk assessment, but bar them from learning a specific worker’s answers, although they can get results in aggregate. The Genetic Information Nondiscrimination Act of 2008 also limits employers’ ability to ask about family history or require genetic testing.

The information is generally gathered by firms that run wellness programs or insurance plans. UnitedHealthcare, which offers its “Personal Rewards” program to large, self-insured clients, says it does not use the information to set premiums.

Pshock says some of his clients share the information with their insurers, who may “recognize the significance of a program … with a 3 percent to 6 percent rate reduction.” Many insurers, however, take “more of a wait-and-see-if-the-health-improvement-results-in-fewer-claims approach,” he says.

But Do They Work?

Given the available data, it’s hard to parse how much of the reported savings from such programs come from improved health, and how much from the frequent pairing of such programs with high deductible policies, which shift more costs onto workers.

“We just don’t know how effective (incentives) are,” says Volpp. There is pretty good evidence they help smokers quit, he says, but less that they prompt workers to lose weight and keep it off.

Weight gain is partly a function of genes and environment, he says, so programs that tie incentives to achieving a particular weight range are “in essence, penalizing people for factors they can’t control or can only partly control” – either because they’ve failed to lose weight or haven’t participated in the program.

Volpp says the medical literature shows that incentives work best when participants have choices: get below a certain BMI, or lose 5 percent of current body weight, for example. And, he says, rewards should be immediate.

“If you want the employee to do a health assessment or (medical) screening, you should give them the reward right after they do it” he says.

At Jones Lang LaSalle, workers who make a pledge — on the honor system — that they don’t smoke, or will take a stop-smoking class, and achieve a healthy weight, get 10 percent off their contribution toward insurance premiums.

In 2010, the firm added a cash bonus program, offering $50 to workers who get a physical and another $50 for every one of four medical tests they take: weight, blood pressure, glucose and cholesterol, plus an extra $50 if they do all the tests. If they meet specified goals — or complete a coaching program — they get the money in the form of a cash bonus. Spouses and domestic partners are also eligible, says Howard Futterman, senior vice president of benefits.

Last year, 65 percent of employees participated. While it’s early, he says, indications are the program is having an impact on costs: health spending rose 6 percent in 2010, but only 3 percent in 2011.

“Our long term goal is to make health and well-being part of our culture and everyday values,” says Futterman. “When people start doing it naturally and you don’t have to pay them for it, that’s when you know you’ve succeeded.”

– Provided by Kaiser Health News.

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Purchase, NY, United States (AHN) – Credit card giant MasterCard said Friday it is investigating a possible breach of cardholder data involving a U.S. based payment processor.

In a statement, MasterCard said, “As a result we have altered payment card issuers regarding certain MasterCard accounts that are potentially at risk.”

The Purchase, NY-based credit card company added that the company’s own “systems have not been compromised in any manner.”

Law enforcement officials have been notified of the matter, and an “independent data security organization” is conducting an ongoing forensic review.

A spokesman for MasterCard would not say how many cards may have been compromised or how many banks it has notified, the Wall Street Journal reported.

The breach was first made public early Friday by the Krebs On Security blog. The blog also reported that Visa was notifying banks about a breach involving a third-party processor.

Visa has not commented.

Visa and MasterCard do not lend or issue cards to consumers. They process transactions for banks that issue their cards and those that handle transactions for merchants.

Cardholders concerned about their accounts should called the their issuing banks.

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Washington, D.C, United States (AHN) – Federal Reserve Chairman Ben Bernanke rejected a return to the gold standard saying that such a move would not solve the current economic problems.

Bernanke made the comment Tuesday in the first of a series of four public lectures at George Washington University. He maintained that such a system would handicap the government’s ability to address economic conditions.

“Since the gold standard determines the money supply, there is not much scope for the central bank to use monetary policy to stabilize the economy. Under a gold standard, typically the money supply goes up and interest rates go down in a period of strong economic activity—so that’s the reverse of what a central bank would normally do today,” Bernanke commented.

Proponents of a return to the gold standard, including GOP presidential hopeful Ron Paul, advocate for a closure of the central bank and a return to the gold standard, where dollar issues must be backed with equivalent reserves of precious metal.

Most economists give the Fed credit for its forceful action in lowering interest rates in an aggressive measure once it realized the scale of the 2007-2009 crisis. But, policy makers, including Bernanke, have been blamed for downplaying the housing market’s near-collapse in its early stages, and for turning a blind eye to blemishes in the regulatory system that laid the groundwork for the boom and subsequent bust.

Several notable figures critical of the Fed argue that the central bank’s “ultra-easy-monetary-stance” of holding interest rates near zero since late 2008, and its latest announcement that it plans to keep them at that level through at least 2013, coupled with its purchase of some $2.3 trillion in bonds (called quantitative easing), is paving a clear path for future inflation.

Bernanke went on to defend the need for a central bank, noting that it has been in existence for a long time, and working well.

Since entering office in 2006, Bernanke has taken numerous steps to make the Central Bank more transparent, including holding quarterly news conferences and publishing policymakers’ own projections for the path of interest rates.

While Bernanke did not make direct comments on the current state of the economy, he did say that the Central Bank needs to “be attentive to where the economy is and not move too quickly to reverse the polices that are helping the recovery.”

Bernanke delivers a second lecture Thursday, followed by two more next week.

Wednesday afternoon, gold was trading up $1.80 to $1650 a troy ounce.

 

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London, United Kingdom (AHN) – European Central Bank (ECB) officials left the benchmark interest rate of 1 percent unchanged. The bank has not changed the rate since November.

The ECB has provided European banks with hundreds of billions of dollars worth of loan-interest loans in an effort to keep financial markets supplied with cheap cash. The ECB also has bought government bonds from countries such as Spain and Italy in an effort to help lower borrowing costs for governments within the troubled eurozone that have been hit by the sovereign debt crisis.

ECB president Mario Draghi says that the strategy of loosening credit has improved the risk environment.

However, the strategy isn’t expected to help the eurozone economies to grow.

The ECB revised its previous forecast that called for growth and now expects the eurozone economy to shrink by 0.1 percent this year. It was the third consecutive quarter the ECB revised its economic estimate downward.

It also revised downward its growth forecast for 2013 to 1.1 percent compared with the earlier forecast of 1.3 percent growth.

Moreover, ECB officials also now say that they expect inflation to grow at a faster pace than the bank’s medium-term target rate.

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New York, NY, United States (AHN) – U.S. stocks rose on the open Wednesday after the European Central Bank said it will lend €529.5 billion ($721.4 billion) to European banks in an effort to avert a credit crunch.

Just before 10 a.m. on Wall Street, the Dow Jones Industrial Average was up 30 points, the Standard & Poor’s 500 Index gained 3 points and the NASDAQ rose 7 points.

Investors were buoyed by the ECB’s second Long-Term Refinancing Operation in which banks will be able to borrow money for three years at interest rates as low as 1 percent. The move is the bank’s latest effort to prevent a credit crunch in the eurozone region. In December, the ECB handed out nearly €500 billion.

World markets were mixed in afternoon trading following the news.

Also giving market participants some encouragement was a report from the U.S. government that showed the economy grew at an annual rate of 3 percent during the fourth quarter, up from an initial estimate of 2.8 percent.

Rising oil prices continue to be a concern for investors and consumers. Gas prices spiked some 8 percent in February.

Oil for April delivery rose 53 cents Wednesday to $107.08 a barrel.

In the precious metal markets, gold futures for April delivery fell $1.20 to $1,787.20 a troy ounce. Meanwhile, silver, which has been enjoying several days of strong gains, was last up 45 cents to $37.38.

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Cairo, Egypt (The Media Line) – Egypt faces a risk-laden game of Beat the Clock as it tries to get its political house in order before its foreign currency reserves sink much more.

Reserves fell to $16.4 billion in January from about $36 million a year earlier, a drop that economists all agree imperils the economy and requires Egypt to seek support from external sources and make difficult decisions to cut back government spending and subsidies. But that will be difficult given the political situation.

Presidential elections are now scheduled for late May, preceded by a six-week election season. Meanwhile, a parliament dominated by Islamists is tussling over who will control the government with the interim military council. A dispute with the United States over foreign human rights activists detained in Egypt is threatening vital American aid to the country. In the meantime, no U.S. assistance is being transferred to the country.

The timetable looks even more challenging when the role of the International Monetary Fund (IMF) is factored in. Egypt’s Ministry of Finance is reportedly counting on the IMF’s executive board to approve a $3.2 billion facility towards mid-March, which will then go to parliament for approval about the time the presidential campaign is getting under way.

“Time is not on Egypt’s side and politics could be the prime suspect to derail or delay an IMF program or exacerbate dollarization and [foreign currency] outflows,” Bank of America Merrill Lynch analyst Jean-Michel Saliba said in a note to investors last week.

Concerns that Egypt’s political trajectory looks to be on a collision course with its financial needs came in the form a downgrade in its bond rating by Standard & Poor’s (S&P) on Feb. 10. S&P lowered its ratings to B from B+ on Friday, five notches into junk territory, and said further downgrades could be on the way.

“The negative outlook reflects our view that a further downgrade is possible if the government fails to stem the decline in reserves, or an uncertain policy environment and weak institutions emerge from the ongoing political transition,” S&P said. Moody’s and Fitch, two other bond-rating agencies, cut their ratings on Egypt earlier.

Diminishing foreign reserves may be the most immediate threat to Egypt’s economy, but it is not the only one. More than a year after the revolution that brought down Hosni Mubarak, economic growth has stalled, the number of visiting tourists has plummeted and foreign investment has evaporated, all of which is exerting huge economic pressure on the government at a time of political flux.

Bank of America Merrill Lynch estimated that Egypt’s drawdown of its foreign currency would slow to what it called a “more manageable” $500 million a month because the foreign capital that has been responsible for much of the decline has been nearly drained out of the country.

On the other hand, Egypt could also get a boost from a rare instance of foreign investment if France Telecom goes ahead with the purchase of a $2 billion stake in the Egyptian Company for Mobile Service, popularly known as Mobinil, which it agreed to buy from Egyptian entrepreneur Naguib Sawiris last week. If the transaction goes through, that money might be transferred to Egypt in March.

But Merrill also noted that Egypt’s finances look more precarious than the headline foreign reserves figures show. Taking out Egypt’s holdings of gold, reserves fall to $13.6 billion, which are equal to just 2.8 months of imports, Saliba wrote in the Feb. 16 note. Meanwhile, Egypt’s external financing needs could reach some $11 billion through June 2013, Finance Minister Momtaz el-Saieed said Feb. 10.

But accepting aid is politically problematic because the public looks askance at foreign assistance, especially from the U.S. Only 26 percent favor accepting American aid, according to a Gallup poll taken in December. The proportion willing to accept international aid rises to 50 percent (with 42 percent opposing) and those willing to accept it from fellow Arabs reaches 68 percent (28 percent opposing), Gallup found.

Egyptians don’t like aid because it usual comes with strings attached, such as unpopular economic reforms in the case of the IMF and maintaining the 1979 peace treaty with Israel, in the case of American assistance. Political opposition to foreign assistance caused the interim military government to reject the original offer of an IMF credit last spring, a decision many economists say has exacerbated the financial troubles in which Egypt now finds itself.

Parliament must approve an IMF loan, but Essam el-Erian, a leader of the Muslim Brotherhood’s Freedom and Justice Party, which dominates parliament, said his group may vote against it because it might impinge on Egyptian sovereignty. “Look at Greece,” el-Erian said in an interview with Bloomberg News this week. “Everybody is telling it what to do.”

Above and beyond accepting foreign financial assistance, the other remedies for Egypt’s foreign reserves ailment are all painful for politicians and the public alike.

One is bringing down the budget deficit. As the economy has shrunk and the government boosted handouts in the early days of the revolution to try and palliate the population, Egypt’s fiscal deficit has ballooned. Officials recently revised upward their forecast for the budget deficit for the fiscal year ending June 30 to 9.4 percent of gross domestic product.

The solution would be to cut spending, particularly costly and wasteful subsidies on food and energy. Indeed, the military government recently announced plans for $4 billion in spending cuts and the IMF and others providing aid will have their own list of fiscal measures. But political analysts suggest that will inevitably mean cuts to popular energy and food subsidies of the kind that have set off riots in the past.

Another remedy is devaluing the Egyptian pound. In spite of Egypt’s mountain of economic woes, the pound had shed only about 1 percent of its value over the past year as the central bank acted to shore up its value by raising interest rates and drawing down on reserves. But the bank’s options are narrowing as it is forced to devalue the pound, which will almost certainly lead to higher inflation.

Analysts see some positive elements in the Egyptian political scene. Saliba notes that the decision to move up the presidential vote to May reduces the length of the campaign season and the opportunity for grandstanding by candidates. Ahmed Galal, managing director of the Economic Research Forum in Cairo, maintains that the Muslim Brotherhood has taken a pragmatic line on subsidiary reform and supports free markets.

©2012. The Media Line. All Rights Reserved.

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Dallas, TX, United States (AHN Sports) – Radim Vrbata’s 25th goal of the season snapped a 1-1 tie late in the second period, and the Phoenix Coyotes added third period tallies by Raffi Torres and Derek Morris in the third to secure a crucial 4-1 victory over the Dallas Stars Tuesday night at the American Airlines Center.

The win is the third in a row for the Coyotes and fourth in the last five games, despite the fact they were playing their third game in four nights. They gain two ultra-important points in the Western Conference playoff chase and moves from a 10th-place tie with Dallas into a tie with Minnesota for the eighth and final playoff slot.

“That’s three games we’ve played how we want to play or how we have to play,” said Coyotes coach Dave Tippett. “We’ve got a lot of people really committed into doing things that make you win hockey games. We come in here on a back-to-back, I give our guys a lot of credit. They competed hard. They did a lot of little things right that make you win games.”

“I think we do the little things right,” added Vrbata, who also added an assist. “We had that break there but we regrouped and had a couple days of practice. I think that helped us a lot. Now we pay more attention to the details and you have everybody contributing. That’s the key to our group I think.”

The Stars had been 3-1-0 in their previous four, but had a difficult time generating offense against Phoenix goaltender Mike Smith, who made 28 saves for his 21st triumph of the season, already well-past his previous career-high of 15.

“Awful, atrocious, I don’t know,” said Dallas defenseman Sheldon Souray of the Stars’ performance. “We just didn’t rise to the occasion, and it’s frustrating and disappointing because we know what’s riding on the line here. We’re fighting that team for a playoff spot and we weren’t good enough tonight.”

“We weren’t very good again,” added Stars coach Glen Gulutzan. “Even with a real good goalie performance, we got outworked by a team that played last night. If you put up 45 shots and lost 2-1 because of an outstanding goaltender, you can live with those, but when you get outplayed and outworked and your goaltender stands on his head to keep it close, I got a big problem with that.”

Keith Yandle also scored for the Coyotes, while Michael Ryder found the back of the net for Dallas.

With Phoenix up 2-1 in the third period, Torres’ ninth goal of the season at 5:41 sealed the Stars’ fate. On a 3-on-2 rush into the Dallas zone, Michal Rozsival fed a nice pass from the right sideboards to Torres low in the left circle, and Torres’ wrist shot beat Stars goaltender Kari Lehtonen over the blocker.

Morris completed the scoring with his first goal of the season at 16:09 when Vrbata stole the puck from Dallas defenseman Philip Larsen behind the net and fed a pass out into the high slot, where Morris drilled a one-timer over Lehtonen’s glove.

“Before the third period, we talked that this is a good test for our team, how we’re going to react in a tight game, points that we have to have against a team that we want to leapfrog in the standings,” Tippett said. “Our guys came out and played accordingly and we got the win.”

Yandle put the Coyotes on the board first with his seventh goal of the season just 4:43 into the opening period when his slap shot from the left point deflected off one of several bodies causing a screen in front and bounced through Lehtonen’s pads.

The Stars tied it on Ryder’s team-leading 19th of the year at 2:34 of the second, on a shot that Smith would probably like to have back. Ryder sliced his way through several Coyotes before unleashed a quick wrist shot from the right face-off circle that squeezed under Smith’s blocker arm and in.

Later in the second, the Stars enjoyed a four-minute power play, but were unable to capitalize, despite generating three shots during the advantage.

“Every time a team kills a four-minute, it gives a big boost to that team, it kind of gives them some momentum,” said Dallas defenseman Stephane Robidas. “I thought we had good movement and we just couldn’t get one in.”

The Coyotes drew a spark from the penalty kill and wound up going ahead 2-1 on Vrbata’s 25th goal at 14:30. Seconds after an Eric Nystrom giveaway led to sustained Phoenix pressure in the Dallas zone, Rostislav Klesla threaded a nice pass from the left face-off circle to Vrbata in front for a re-direction that beat Lehtonen over the glove.

“I think it was a big momentum booster for us,” Tippett said of the big penalty kill. “I thought we were still doing some things very well in the game. Lehtonen made a big save on Whitney and then we ended up taking the four-minute minor. But getting the kill there and exhausting ourselves doing it was a boost to the rest of the guys on the bench.”

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