Bush: White House pressure made marriage stronger

Former President Bush said that if Laura Bush hadn't been first lady, he isn't sure he could have counted on her vote.

"I can promise you that her life dream when she was growing up was not to be first lady of the United States," Bush told a Michigan audience Thursday in one of his first major domestic speeches since leaving the White House.

"Frankly, I am not so sure that if we hadn't married she'd have voted for me. There's a lot of pressure in the White House, as I'm sure you can imagine. Pressure sometimes can make a marriage stronger or weaker. In my case because of her patience and her enthusiasm, it made our marriage a really good marriage."

The pressure of the presidency, he said, weighs most on family members.

"It's much harder to be the son of the president than to be the president. And it's much harder to be the father of the president than to be the president," he said in a reference to his dad, former President George H.W. Bush.

"And I used to have to admonish him not pay attention to what they were writing on the editorial pages about his son. I had gone through the same agony myself. And so I am confident that the end of the presidency is a great relief because of our strong love."

Something else Bush called a great relief: having a vice president, Dick Cheney, who had no plans to run for the top spot.

"I was pleased to have someone serve as my vice president who was not running for president, because someone who is running for president, at times, will try to distance themselves," Bush said. "... If things got tough, [he] could be one of the first persons off the ship, and that would be really unpleasant in the White House."

Bush said he wasn't surprised to lose public support for some of the main elements of his national security agenda.

"I was frustrated because the stakes were so high in some of the decisions that I had to make. I wasn't surprised that people would forget the feeling of how they felt after September 11. I was grateful that people were moving beyond September 11. As a president you don't want your nation to be so worried about an attack that people don't go about their lives. ... The psychology of the nation concerned me. Which then made it harder to get people to listen to you, to some of the decisions I made."

The fact that Americans tuned out media coverage of the risk of terrorism wasn't surprising to him either, he said -- he ignored most news coverage himself.

"The truth of the matter is, I never watched the nightly news, because it was predictable, I thought. Nor did I ever pay attention to the editorial pages, good editorials or bad," he said. "I knew what was in the news. When you're president, you can get so obsessed with this stuff that I felt it would cloud your vision.

"The truth of the matter is there is so much attention paid to you, I thought it was important even in the toughest moments to be upbeat and not to be so worried about myself that I couldn't convey a sense of confidence."

He mused on the transition to a far calmer existence after the presidency.

"People ask, what is it like? Well, I have never stopped at a traffic light for eight years," he said. "...The neighborhood we live in is nice. You know Laura bought this house sight unseen. At least she saw. I didn't. It was like a faith-based initiative."

Bush will take the stage Friday night with former President Clinton in Toronto, Ontario, for what's being termed a "conversation."

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Obama creates top job for guarding online security

WASHINGTON (CNN) -- President Obama announced Friday he is creating the post of cyber security coordinator to oversee "a new comprehensive approach to securing America's digital infrastructure."

The president said he will personally select the person who takes on that post.

"I'll depend on this official in all matters relating to cyber security, and this official will have my full support and regular access to me as we confront these challenges," he said.

The economic crisis cannot be tackled without ensuring the safety of the nation's online activities, Obama said. "America's economic prosperity in the 21st century will depend on cyber security," he said.

"Our technological advantage is a key to America's military dominance," he added. "But our defense and military networks are under constant attack. Al Qaeda and other terrorist groups have spoken of their desire to unleash a cyber attack on our country -- attacks that are harder to detect and harder to defend against."

The country is not adequately prepared, he said, to defend against a possible "weapon of mass disruption."

"From now on ... the networks and computers we depend on every day will be treated as they should be: as a strategic national asset," Obama said. "Protecting this infrastructure will be a national security priority."

Obama vowed that these efforts "will not include monitoring private sector networks or Internet traffic. We will preserve and protect the personal privacy and civil liberties that we cherish as Americans."

"I know how it feels" to have online privacy violated, the president said.

He referred to last year's hacking of computers at his campaign headquarters. The hackers did not access databases containing information about campaign donors, but did gain access to policy position papers and travel plans, Obama said.

CNN reported in November that computers at the headquarters of Obama's rival for the presidency, Sen. John McCain, had been broken into with similar results.

Obama's announcement Friday followed a 60-day review of the government's cyber security efforts, conducted by the National Security Council and Homeland Security Council.

The results of the review are posted at www.whitehouse.gov, along with links to more than 100 documents that helped inform the review.

The military has said it is working to create a Cyber Command. Last month, Defense Secretary Robert Gates said the command would initially be under the U.S. Strategic Command.

The president is expected, within weeks, to sign a classified order officially creating the command, defense officials told CNN.

The Department of Homeland Security reports the number of cyber attacks on government and private networks increased from 4,095 in 2005 to 72,065 in 2008.

This month, a Transportation Department audit -- carried out after hackers got into a support system containing personnel records -- indicated the nation's air-traffic control system could be at risk.

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Credit Card Reform: What Might Have Been

You’d think in a year when major banks received billions in taxpayer aid and face billions more in defaults on credit card debt, tackling anti-consumer practices by credit card issuers would be a slam dunk in Congress. There’s certainly been lots of buzz about changes coming to the credit card industry, served up by feisty Democrats eager to show American consumers that they’re looking out for the little guy. The House approved Rep. Carolyn Maloney’s Credit Card Holder’s Bill of Rights in late April and this week, the Senate is wrangling over Sen. Christopher Dodd’s Credit Card Accountability, Responsibility, and Disclosure Act. It’s strong sounding legislation but the powerful banking lobby is hard at work on Capitol Hill trying to water down the toughest provisions. Unfortunately for consumers, the bank lobbyists are having some success.

Here are just a few provisions that have been dropped or not made it out of committee:

• Speedy reform. Maloney’s original bill included a provision that would require card issuers to implement changes within 90 days of the bill becoming law. Maloney’s bill is very similar to new regulations that the Federal Reserve approved in December , including banning card issuers from raising rates on existing balances unless your payment is late and giving consumers more time to make payment before fees kick in. All that’s good but the Fed’s new rules don’t kick in till July 2010. And ever since the Fed regulations were made public in December, credit card users have been slammed with rate hikes and higher fees, which consumer advocates say is a purposeful move by banks to soak consumers before the new rules kick in. Now the only part of Maloney’s bill that will go into effect within 90 days of signing is a provision that would give consumers 45 days notice that their rate is being increased.

• An end to universal default and multiple overdraft fees. According a report in the Huffington Post, an earlier version of Dodd’s bill explicitly prohibited universal default (that’s when a card company raises a user’s rate when they are late paying another creditor) and limited the number of overdraft fees that hit a cardholder when a cardholder goes over their limit. The latest version contains neither of those provisions.

• A cap on rates. Sen. Bernie Sanders, a Vermont Independent, proposed a provision that would cap credit card interest rates at 15%. Noting that one-third of credit card holder’s pay interest rates higher than 20% and up to 41%, Sanders said this would end “loan sharking” by banks and consumer advocates said the provision would put real teeth in the bill. That effort was defeated last week.

President Obama asked Congress to deliver a credit card reform bill that he can sign by Memorial Day, one that would provide “strong and reliable protections for consumers.” Sure some reform is better than no reform. But let’s hope the legislation that lands on President Obama’s desk is still worth signing. Tell us: What do you think would be the most effective change to credit card practices?

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Obama’s Favorite Mutual Fund

Some food for thought from President Obama’s current investment portfolio, which was revealed last Friday as part of his government-mandated annual financial disclosure report:

1. There’s an old bit of investment advice: If you don’t have a lot of money, you invest to build your assets. If you already have a lot of money, you invest to protect them. Well, it’s the second part of that statement that applies to our president. Judging from the report, he and his immediate family had investments and savings, as of year-end 2008, of at least $1.4 million and as much as $5.9 million. (Sorry about the imprecision there; blame the report’s format for the wide range of valuations.) And, boy, is his portfolio safe and liquid. His biggest holding, by far, is his stake in U.S. Treasury bills–somewhere between $1.05 million and $5.1 million. The next biggest chunk is the $100,000 to $250,000 that Barack and Michelle have in their joint checking account. Face it: When either of them uses a debit card to gas up the limo at the 7-11, they don’t have to worry about those pesky overdraft fees.

2. The president isn’t really into stock-picking. He and the First Lady used to own a few different equity mutual funds; now he owns only one, and it’s an index fund: the Vanguard FTSE Social Index fund (VFTSX). President & Mrs. Obama have somewhere between $115,00 and $250,000 in the fund, spread out among three different retirement accounts. And they’ve suffered like everyone else: The fund has a total return of negative 39% over the past year, slightly worse than that of the S&P 500. Michelle used to have big holdings in the actively-managed Vanguard Wellesley Income (VWINX) and Vanguard Wellington (VWELX) funds, but she apparently got rid of them last year.

3. Face it, when you’re President of the United States, your investment objectives and criteria are not like your next-door neighbor’s (if indeed you have any neighbors). As much as Obama might be concerned about protecting his wealth–and maybe he isn’t, since he’ll have a nice pension and plenty of opportunities to make money in retirement–he’s got to worry more about how his investments look to other people, and what those investments say about him. That’s what they euphemize in financial circles as the “optics” of the situation.

4. On that basis, the optics of Obama’s investments look pretty good. By investing in an index fund, he’s not making an active bet on a particular company (though he does end up making big bets, for better or worse, on particular industries: The Social Index fund has about 26% of its investments in financial stocks, 27% in information technology, and another 30% in either health care or consumer discretionary). That lone mutual fund invests nearly all its money in U.S. stocks, and it screens companies on the basis of their policies and performance relative to the environment, human rights, sweatshops, bribery and other social issues. Who’s going to argue with that? And think about it: With so much of Obama’s money in Treasury bills and cash, he’s making a big bet on the performance of the U.S. economy and the U.S. dollar. It’s like with any money manager: When he’s playing with your money, you want him to have a lot of his own assets at risk, too.

Addendum:

The Obamas have socked away somewhere between $100,000 and $200,000 in 529 plans for Sasha and Malia’s college education. That’s great, but it appears they have put their money in broker-sold plans that charge a 3.5% upfront sales load and have annual expense ratios of around 1.3%. Ouch! Financial planner (and MONEY contributor) Allan Roth suggests they move to lower-expense direct-sold plans, a move that would mean lower fees and more money for the girls’ schooling.

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First-time unemployment claims dip

WASHINGTON (Reuters) -- The number of U.S. workers filing new claims for jobless benefits dropped by 13,000 last week, the Labor Department reported on Thursday, but so-called continued claims hit a new record as the recession took a further toll on job prospects.

Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 623,000 in the week ended May 23 from a revised 636,000 in the prior week. It was the second straight week in which initial claims fell.

Analysts polled by Reuters had forecast 630,000 new claims for benefits last week compared with a previously reported 631,000 in the preceding week.

Some 5.7 million U.S. jobs have been scrubbed from payrolls since a severe recession began in late 2007, battering labor markets as companies cut current employees and hold off on hiring.

The number of people staying on benefit rolls after drawing an initial week of aid increased by 110,000 to a higher-than-forecast 6.79 million in the week ended May 16, the most recent period for which the data was available. Analysts had estimated continued claims would be 6.74 million.

Continued claims have set new records in every week since Jan. 24 and now are more than double the level they were at a year ago.

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Obama weighs new rules for banks

WASHINGTON (Reuters) -- The Obama administration is weighing a plan that would put the Federal Reserve in charge of monitoring systemic risk and give the Federal Deposit Insurance Corp. authority to unwind insolvent bank holding companies, sources familiar with the proposal said on Wednesday.

The idea, which is being circulated to U.S. lawmakers as they embark upon an overhaul of financial regulation, could be announced soon after June 8, the two sources said. They spoke on condition of anonymity because the plan has not been widely shared and cautioned that the plan is not final.

Treasury Secretary Tim Geithner has said the administration will come out with a comprehensive proposal in mid-June. June 8 is the Monday after President Barack Obama returns from a trip to Saudi Arabia, Egypt, Germany and France.

White House spokeswoman Jen Psaki said no final decision had been made about the shape of the regulatory proposal.

"Officials at the White House and the Treasury department are continuing work with Congress on the final phases of a proposal, but there is no final proposal in place and any announcement will not be for a couple of weeks," she said.

The sources said the administration is mulling a consumer protection agency to supervise financial products, such as credit cards and mortgage-related products. Securities would not fall under the consumer supervisor's jurisdiction.

The revamp could also create an agency in charge of investor protection and market integrity, which would likely be a merged Securities and Exchange Commission and Commodity Futures Trading Commission.

Such a move would stop short of trying to eliminate either the SEC, which regulates securities, or the CFTC, which oversees commodity futures, one of the sources said. The new investor protection agency would oversee all investment products, the source said.

The administration will also try to stop banks from shopping for their regulator by creating a new, single government agency to be the hands-on regulator for most banks and insurers, the sources said.

Many financial institutions can currently choose between four bank regulators, creating the opportunity for regulatory arbitrage. The plan being considered would have the new agency be the primary supervisor of state and federally chartered depository institutions, bank holding companies and insurers, according to the sources.

It was not immediately clear what such a plan would mean for the current primary regulators of banks.

Some policymakers have suggested merging the Office of the Comptroller of the Currency, which regulates the nation's largest banks, and the Office of Thrift Supervision, which regulates many mortgage-related financial firms.

The administration is also considering a financial regulatory advisory council, which would include the heads of major financial regulators. This would be similar to the President's Working Group on Financial Markets, which is chaired by the Treasury secretary and composed of the chairmen of agencies like the SEC, the Fed and the CFTC.

"It is important to modernize the system to prevent the financial crisis from happening again," said Scott Talbott, a senior vice president with the Financial Services Roundtable, which represents the largest financial services companies.

READ MORE - Obama weighs new rules for banks

What Credit Card Legislation Means for You?

Consumers scored a major victory on Tuesday as the Senate voted overwhelmingly in favor of a bill that restricts unfair credit card practices. The Credit Card Accountability, Responsibility and Disclosure Act passed by a 90-5 margin. The bill comes on the heels of similar legislation, known as the Credit Cardholders Bill of Rights, that was approved by the House on April 30 in 357 to 70 vote.

So what happens now? The Senate bill heads back to the House for a vote, and there’s a good chance it could hit the President’s desk before Memorial Day. But what do both bills mean for your wallet? Let’s look at the key provisions:

Retroactive rate hikes: Both bills ban hikes to interest rates on existing balances. So say you carry a $1,000 balance at 8%. If the rate on your card changes, the new rate will apply only to new purchases going forward—the issuer won’t be able to start charging 19% on the previous balance. The only catch: If you fail to comply with a debt repayment workout plan or if you are more than 30 days (House bill) or 60 days (Senate bill) late on payments, all bets are off. What’s more, both bills prevent issuers from raising your interest rate during the first year of the card account.

Penalty periods: If you are late and your rate goes up, the Senate bill states that if you pay your bill on time for 6 months in a row, you can reclaim the lower rate.

Advance notification: Time was, your issuer could jack your card’s rate and only give you 15 days notice. No more. Both bills require that issuers must give you 45 days notice before making significant interest rate, fee and finance charge increases.

Teaser rates: Both bills require that promotional rates must be offered for at least six months.

Payment allocation: You may have a balance transfer on your card at one rate, while other purchases or balances accrue interest at a different, higher rate. Before this legislation, banks could apply your payment to the balance with the lowest interest rate first—so your more costly balance just kept racking up interest. Now, payments in excess of the minimum amount owed must first be applied to the balance with the highest interest rate first, and then to remaining balances in descending order.

Due dates: Credit card statements must be mailed 21 days before the bill is due, up from the current 14. And no more odd timing deadlines for payments—payments received by 5 p.m. on the due date are on time. Payments with due dates that fall on holidays or weekends must be accepted by the next business day.

Over-the-limit fees: Before, if you tried to charge above your credit limit, the issuer would approve the transaction and slap you with an “over-the-limit” fee. Now, consumers must opt in for over-the-limit approval—and the fees that come with it.

Cards for young adults: The House bill stipulates that banks can’t issue cards to un-emancipated minors under the age of 18 unless a parent is the account holder. It also limits college students to just one credit card, sets credit limits to a percentage of the student’s income and requires parents to approve increases to credit limits on joint accounts. The Senate bill takes it even further, eliminating credit cards for people under the age of 21 unless an adult co-signs or they can show proof of income.

Gift cards: The House bill doesn’t touch them, but the Senate bill states that gift cards can’t expire in less than five years. Retailers selling Visa, MasterCard, American Express or Discover-branded gift cards will have to print information on dormancy fees—charged when the card goes unused for a while—right on the cards themselves.

Universal default: Both bills eliminate this practice, which allows a card issuer to raise your rates if it learns that you were late on another card.

Account closings: The Senate bill doesn’t address it, but the House bill requires an issuer give you 30 days notice before it closes your account.

Many of the provisions in these bills are already addressed in the Fed’s credit card regulations, which are slated to take effect in July 2010. Will this legislation make it happen sooner? The House bill was scheduled to take effect 12 months after passage, while the Senate bill planned for nine. We’ll keep you updated on what the final law looks like–and when you might start benefiting from it.

READ MORE - What Credit Card Legislation Means for You?

Has the next investing bubble begun?

Every month Merrill Lynch (or Bank of America Securities-Merrill Lynch for you scorekeepers) checks in with a bunch of big time money managers to take their bullish/bearish temperature. Collectively the 400 or so global managers in the May survey are pushing the buttons controlling portfolios worth nearly $1 trillion, so we’re not talking about a Beardstown lady survey here.

And these pros are getting their bull on. Seventy percent said they believe the world economy will improve over the next 12 months and so they are upping their equity stakes. The area getting the most attention: emerging markets. The report notes that 46% of the money managers are now overweight the emerging markets, compared to 26% back in April. The bullishness for China specifically is at its highest since the survey began tracking Chinese sentiment in 2003.

Maybe it’s just coincidence, but um, it just so happens that the MSCI emerging markets index has shot up 15% in the past month, and has gained nearly 50% over the past three months. A bit of performance chasing perhaps? To be sure, emerging markets got hammered mercilessly in ’08 (the iShares Emerging Market ETF lost nearly 50%) so there is a decent valuation gambit at play, but even the co-head of Merrill’s international investment team expressed some concern at the surge in emerging markets interest. “….this rush to take on risk, especially in emerging markets is reminiscent of bubble-like behavior,” said Michael Hartnett.

Individual investors might be wise to pause and consider the bubble possibility before investing at today’s levels. The fact is, fund investors have an absolutely horrid record chasing emerging market performance. According to Morningstar, the iShares MSCI Emerging Markets ETF has an impressive 11.7% annualized gain over the past five years through April. That’s the fund. But investor returns-that is the dollar-weighted returns that measure what the typical investor actually earned based on when they invested-is an anemic 0.96%. Poor timing resulted in earning nearly 10 percentage points less than the actual ETF returned. You might want to keep that in mind before joining the pros piling into emerging markets funds after this big run-up.

– Carla Fried

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Health Insurance Helper Returns Online

Last summer, when I was writing a story about health insurance options for early retirees, I found an incredibly useful resource for individuals trying to obtain health insurance for themselves and/or their families: a web site run by Georgetown University’s Health Policy Institute. The web site, operating under the generic-sounding title healthinsuranceinfo.net, was a collection of 51 exhaustive guides to the rights and options that individuals have for obtaining health insurance in each of the states plus the District of Columbia. I found these guides, formally known as the Consumer Guides to Getting and Keeping Health Insurance, extremely valuable in navigating the patchwork of laws and organizations that serve as the health insurance safety net, such as it is, in the US.

Unfortunately, just as my article started arriving in people’s homes, healthinsuranceinfo.net went offline, the victim of a funding loss at HPI. And offline it has sat, unavailable to the public for the past few months, gathering dust in an electronic lockbox somewhere.

Until recently, that is. Just recently, healthinsuranceinfo.net came back online, thanks to an emergency grant from the Robert Wood Johnson Foundation. HPI says it has also received funding to update 15 of the consumer guides over the summer. America is sorely in need of a healthcare and health-insurance overhaul; until the day that comes about, this is a great place for learning about your choices in today’s system.

READ MORE - Health Insurance Helper Returns Online

Obama says health care changes must come this year

WASHINGTON – President Barack Obama warned Thursday that if Congress doesn't deliver health care legislation by the end of the year, the opportunity will be lost, a plea to political supporters to pressure lawmakers to act. "If we don't get it done this year, we're not going to get it done," Obama told supporters by phone as he flew home on Air Force One from a West Coast fundraising trip.

Obama's political organization, Organizing for America, invited campaign volunteers to a midday conference call to describe a nationwide June 6 kickoff for its health care campaign. The president's message to his re-election campaign-in-waiting was simple: If volunteers don't pressure lawmakers to support the White House's goal on health care, Washington would drag its feet and nothing would change.

"The election in November — that did not bring about change, it just gave us an opportunity for change," Obama said. "So now, we are really going to have to remobilize, we have all had a chance to catch our breath after election and we have gotten a lot of things done during our first four months.

"But health care, that's a big push."

The presidential plea came as lawmakers prepare for an aggressive schedule of work aimed at producing comprehensive health care overhaul bills in the House and Senate by August.

Committee hearings — and soon thereafter votes — will start next week, as soon as lawmakers return to Washington from a weeklong recess. Many members of Congress spent the break holding town hall meetings and other forums with their constituents about health care, even as opponents and supporters of Obama's plans ramped up television and radio ads for and against.

"I think the status quo is unacceptable and that we've got to get it done this year," Obama repeated, ginning up his supporters for a door-to-door and phone-to-phone canvass similar to his presidential campaign.

Obama's top aides, including former campaign manager David Plouffe, told the supporters they have a challenge ahead of them.

"If the country stands with the president and if the country is demanding health care reform then we'll get it done; Washington will not have any option but to follow us," Plouffe said on the call, which was not announced on the White House's official schedule.

The president's conversation with his supporters was part pep talk and part a nod to political reality. Obama is looking to use his network of supporters to deliver a campaign promise, and if he seeks a second term in 2012 — an almost certainty — he hopes to keep many of those volunteers engaged in person and online.

"This is our big chance to prove that the movement that you started during the campaign isn't over, we're just getting started," Obama said.

The president said the costs of the nation's $2.5 trillion health care system are crushing families and businesses and pose the largest threat to the economy.

The White House is leaving it to lawmakers to work out the details of a health care plan, but Obama has said it should ensure choice and lower costs, while extending coverage to the 50 million Americans now uninsured. The cost of accomplishing that has been estimated around $1.5 trillion, and figuring out how to pay is emerging as a major challenge for Congress and the White House.

The Republican National Committee said Obama's approach was not the right path, arguing that Democrats are pushing for a government-run health care system that will take away individual choice.

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