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Steelmakers like Arcelor are saying that austerity measures and deteriorating consumer confidence is affecting their business. As a result Arcelor is rescinding price increases and this is affecting profit margins.

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The influence of the AMA convened Relative Value Scale Update Committee (RUC) on how the Medicare payments to doctors is shared, and on the growth of the Medicare budget. Concern that the interested party is driving the decision making process. Medicare costs went up by 9% in 2009. Fears that doctors have too much control over the dollars in the $500 billion Medicare program. The tendency to focus on more expensive procedures and short change preventive and less costly care. Medicare spends $60 billion on doctors fees. The older codes remain in place even when costs are reduced, leading to higher costs for the Medicare budget each year. And there is little incentive for doctors in RUC to revise overvalued codes.

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Three regional Fed bank presidents have expressed skepticism of the Fed plan to buy medium to long term Treasury bonds- they are Kocherlakota of Minneapolis Fed, Richard Fisher of the Dallas Fed, and Plosser of the Philadelphia Fed. There are 12 regional Fed banks, and five voting seats on the Federal Open Market Committee rotate for the 12 Fed bank presidents. Opposition to Bernanke will increase as these presidents take voting positions in the Fed Open Market Committee. The Wall Street Journal reports that there is deep skepticism about Bernanke's plan among some of his colleagues. Thomas Hoenig of the Kansas City Fed says that more expansive monetary policy was "a bargain with the devil." The Fed's plan is to take a measured approach with U.S. Treasury bond purchases with maturities between 2 and 10 years. A WSJ survey of private sector economists in October 2010 found that the Fed is expected to purchase about $250 billion of Treasury bonds each quarter, and continue till mid 2011, amounting to $750 billion in all. By pushing down Treasury yields the Fed hopes to have an impact on the federal funds rate of one-half to three-quarter percentage point impact for $500 billon of bond purchases, says Dudley, President of the New York Fed. Treasury yields on the 10 year note have fallen from 4% in April to 2.6% partly in anticipation of Fed's action. The previous Fed intervention in March 2009 was a program to buy $1.75 trillion of Treasury and mortgage bonds over 6-9 months. This time the approach will be careful and measured based on results, according to the Fed. Alan Blinder, former vice chairman of the Fed, says this is the tool less preferred and of unknown effectiveness, as fiscal tools would be the preferred choice. The deficit concerns, he says, have restricted the preferred option....

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Lower prices have boosted unit sales for Microsoft and Autodesk for Chinese operations. Autodesk now sells its software for about half the price in the USA. Autodesk saw a doubling of licenses in China to 300,000 after slashing prices. Microsoft sells Windows 7 Home Basic for 399 yuan or $59, a third of the price in the USA. By reducing margins, Microsoft makes up for it in volumes, says Microsoft's China CEO. IDC and Business Software Alliance estimate that 79% of the PC software installed in China in 2009 was pirated, down from 86% in 2005. Lower prices make Chinese buyers more willing to invest, and education helps to increase the value of using legitimate copies. China's PC market is expected to be 67 million units in 2010, behind 78 million in the USA, but software sales in China are only $5.8 billion, behind the US sales of $143.6 billion. This makes the potential for software sales large at the right prices.

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The interest rate Ford is paying bondholders is half of what it paid last year. This is especially significant considering Ford's high level of debt and debt payments. Ford lost its investment grade rating in May 2005.

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There is not much difference between the two candidates for President of Brazil. Jose Serra is similiar in his views to Ms. Rousseff about the government having a strong role in the economy. Rousseff is backed by the outgoing President. She has increased her lead in the polls, and leads Serra by 10 points according to one poll.

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Half of the 109 economists and housing analysts polled in October 2010 by MacroMarkets LLC, expect home prices to bottom in 2011, and half don't expect home prices to bottom till 2012. Backing this up is growing inventory in many markets. The Wall Street Journal's latest quarterly survey of housing market conditions in 28 major metropolitan areas showed inventories of unsold homes were up in 19 markets at the end of 3rd quarter 2010, compared to the prior year. The largest increases were in California- in Los Angeles, Sacramento and San Diego. Only parts of Texas, and Washington D.C, and some other areas which have shown decent job growth are an exception. In the Realtor's Report, median home price fell 2.4% to $171,700 in September 2010 from a year earlier. This data does not include the suspension of foreclosures due to title defects, which will further dampen prospects of a recovery in housing. This will affect New Jersey, Florida and other "judicial" states, where the banks must complete foreclosures through court. At the current sales pace it would take 10.7 months to sell the 4.04 million home inventory of unsold homes, according to the recent NAR report. Six to eight months is considered normal. This does not reflect the "shadow" inventory of homes in some stage of foreclosure, which is estimated at around 4 million, creating a problem that even current low rates for a fixed rate mortgage of 4.21% cannot solve....

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Of the 54 Blue Dog in the House, six have retired, 39 are in competitive races, and 22 of those are in pure toss-ups, according tot he Cook Political Report. Blue Dogs are Democrats from the conservative districts, which says one expert makes them an endangered species anyway. The result will be that the returning Congress will have Democrats who are more liberal than the previous Congress. The same dynamc is being repeated on the Republican side with some 50 newcomers expected, and they are not from the political centre. This will make for a very polarized Congress, with less opportunity for new legislation in areas where it is needed.

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Ford's North American operations reported a pretax profit of $1.6 billion for the 3rd quarter 2010. Revenue went up to $16.2 billion from $13.4 billion in the prior year. Ford sold 145,534 F-series pickup trucks, a 25% increase from the same quarter prior year. Worldwide Ford Motor reported a profit of $1.7 billion. Ford will pay down its revolving credit line by $2 billion and will make a cash payment of $3.6 billion this week to cover the last of its health-care trust obligations to Voluntary Employee Beneficiary Association (which covers 195,000 retirees and their spouses). The UAW controls the VEBA trust. These actions will reduce the company's overall debt to $22.8 billon, from $27.3 billion at the end of June 2010.