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Wednesday, October 3, 2012

A View of the Debate From Inside the Hall


DENVER - The pundits and prognosticators have spoken. The spinners and spinnees have gone home. President Obama may have sounded a bit too professorial, and Mitt Romney may have come energetic and ready to spar.

But, before the chattering class starts lowering expectations and telling voters What to Watch For in next week's vice-presidential debate in Kentucky, here's a look at what happened behind the scenes, inside the debate hall Wednesday night:

Mr. Romney, whose predebate dinner consisted of Cheesecake Factory take-out, continued his low-key debate day preparation backstage in his green room, where he and four of his sons - everyone but Ben, a medical resident in Utah, made the trip - played a last-minute game of Jenga. (When photographers were ushered out of the room, the tower was high, and still going strong.)

Inside the debate hall, Mr. Romney was focused like a laser - on his wife, Ann. After he and Mr. Obama took the stage, shaking hands and clapping one another on the back, Mr. Romney looked directly at Mrs. Romney and waved at her, before turning and waving again to the crowd.

Before the two men emerged, Jim Lehrer, the moderator, had ordered the audience to remain “absolutely silent.” At one point, he even enlisted the help of the candidates' wives, delegating Michelle Obama and Ann Romney “enforcers” and joking, “Take names. I'll humiliate them.” The crowd's first test came early, when the president wished his wife a happy 20th wedding anniversary in his opening remarks; the room began to clap but then, seeming to remember the Mr. Lehrer's admonishment, quickly stopped.

Several other moments of audible laughter rose up throughout the night, almost always in response to some quip by Mr. Obama: when the president, talking about Medicare, urged the audience, “so if you're 54 or 55, you might want to listen”; when Mr. Obama joked that Mr. Romney was going to have a “busy first day” with all of the promises he'd made, considering “he's also going to repeal Obamacare”; and when Mr. Obama said that Mr. Romney would probably agree that he'd kept his promise when he said four years ago that he was not a perfect man, nor would he be a perfect president.

When the debate ended, Mr. Obama stepped out in front of his podium first and began walking over to Mr. Romney. Mrs. Obama and Mrs. Romney then joined their husbands onstage, Mrs. Romney in a white dress, closely trailed by one of her granddaughters. Mr. and Mrs. Obama then walked over to where the Romneys were - they had since been joined by the four of their sons who were in Denver, as well as some grandchildren and one daughter-in-law - and the two families began mingling. Matt Romney, before congratulating his father, first went over and shook hands with the Obamas.

Mr. Lehrer also joined the two families onstage, an d Mrs. Obama seemed to bend down to say something to the Romney grandchildren.

At one point, as the two families were together onstage, Mr. Romney walked back over to his podium, to retrieve his notes. He held them in his hand, turning in a tight circle as if unsure whom to give them to, and finally folded them up and handed them to his son Josh.

The Obamas exited the stage first, each offering one final wave to the crowd. But Mr. Romney seemed eager to bask in his postdebate glow a bit longer. With his family behind him, Mr. Romney turned to the crowd and waved again. The right side of the hall, where Romney supporters had been sitting, cheered and applauded.

Mr. Romney then put his right hand over his heart and held it there, in a gesture that seemed to be an act of appreciation and gratitude for his supporters.

First Presidential Debate Live Blog


President Obama and Mitt Romney square off on Wednesday night in Denver in the first of three presidential debates. Live coverage begins at 8 p.m. eastern. The Times will be providing updates and analysis on our live dashboard. You can also follow along on Twitter @thecaucus, or follow our list of Times journalists covering the debate.

Romney Dials Back Acceptance of Obama Immigration Program


With hours to go before the presidential candidates meet in Denver for their first debate, Mitt Romney has scaled back his acceptance of a program by President Obama to grant reprieves from deportation to hundreds of thousands of young illegal immigrants.

On Monday, after months of pressure to clarify whether he would end the program if elected, Mr. Romney said in an interview with The Denver Post that he would not cancel two-year deportation deferrals already granted by the Obama administration.

“I'm not going to take something they've purchased,” Mr. Romney said.

But on Wednesday morning, campaign aides clarified that Mr. Romney intended to halt the program after he took office and would not issue any new deferrals.

“We're not going to continue Obama's program,” an aide said by e-mail. “We're going to replace it and would only honor visas already issued.”

Mr. Romney has said that instead of Mr. Obama's temporary measure, he would seek a long-term solution for young undocumented immigrants. He has said he would support legislation to give permanent resident green cards to illegal immigrants who serve in the military.

“He will seek from day one to work as quickly as he can for a permanent solution that will supersede what Barack Obama did,” said Alberto Martinez, an adviser to the Romney campaign on immigration. “He will replace certainty and permanence for something that is uncertain and not permanent.”

Mr. Martinez confirmed that Mr. Romney, as president, would not issue any new deportation deferrals. But he said Mr. Romney would not deport undocumented students who would have been eligible for a deferral.

Mr. Romney has not offered details of a broader plan to give legal status to those immigrants. An estimated 1.2 million immigrants are immediately eligible for reprieves under Mr. Obama's program.< /p>

Undocumented youth leaders said they were dismayed by Mr. Romney's turnaround. “Dreamers across the nation are disappointed to learn that if elected to the presidency, Governor Mitt Romney would dismantle the Dreamer deferred action policy,” Lorella Praeli, a leader of the United We Dream Network, said Wednesday. She was referring to a group of young undocumented immigrants who call themselves Dreamers, after a bill called the Dream Act.

Mr. Romney's revision could have a major impact on the deferral program, which began to receive applications on Aug. 15. Since there is no filing deadline, many illegal immigrants have said they were holding back from applying until after the Nov. 6 elections, fearing that Mr. Romney would stop the program.

Still, more than 100,000 immigrants have applied for deferrals and work permits that come with them. After the first month officials confirmed 29 approvals, and they said the pace of decisions could slow as the vol ume increases.

Immigration policy analysts were perplexed that Mr. Romney referred to the deferrals as visas, noting that the program does not grant visas. Mr. Obama created the program by executive action after the Dream Act stalled in Congress.

The Scene Before Obama\'s First Debate


DENVER â€" What is it like inside President Obama's bubble as he gets ready for Wednesday night's debate? No one outside the room can know for sure. But it's worth remembering what it was like before his first debate at the presidential level five years ago

He was going up against Hillary Rodham Clinton, John Edwards, Joseph R. Biden Jr. and other Democrats seeking the party's presidential nomination in a face-off in South Carolina in 2007. David Plouffe, then Mr. Obama's campaign manager and now the president's senior adviser, recalled the scene in his memoir, “The Audacity to Win.”

“Don't forget to smile,” David Axelrod, the campaign strategist, told Mr. Obama.

“Iraq is an economic issue too,” Mr. Plouffe added.

“And remember the experience riff,” Mr. Axelrod threw in.

Finally Mr. Obama grew impatient. “Guys, enough,” he said. “You're junking up my h ead. All I will be thinking about is what you just told me I had to do and I'll be tight.”

Mr. Obama was “not a strong debater,” as Mr. Plouffe put it in the book. He derided “the whole exercise of boiling down complex answers into thirty- or sixty-second sound bites.” So his staff was more than a little nervous when he went out to face Mrs. Clinton, one of the most formidable figures in the party. “This could be an unmitigated disaster,” Mr. Axelrod said after the candidate took the stage.

In the end, Mrs. Clinton did win, according to the pundits. Mr. Axelrod's minimalist verdict? “Well, that could have been a lot worse.”

Answers on Retirement Planning

Readers recently submitted questions about financial planning for retirement to Doug Wheat, a certified financial planner with Family Wealth Management, based in western Massachusetts. Here is Part 1 of his responses; more will be posted on the Booming blog next Wednesday. (More than 100 questions were submitted, and regrettably not all can be answered on the blog.)

Q. My experience has been that retirement planners ask three questions, often somewhat obscurely: (1) How long do you expect to live? (2) How much income will you need to live comfortably in retirement? And (3) what do you expect the inflation rate to be? The math isn't very complicated -- if I were confident of my answers to those three questions, I could figure it out myself and wouldn't need a retirement planner. How about helping us figure out how to answer the three questions? -jrg, San Francisco.

A. By its nature retirement planning requires making plans without being able to know the future. You can, however, make reasonable assumptions and test them against historical data to determine the outcome with some confidence. The decisions you make in your preretirement and early retirement years set you on a path, but of course you will need to revisit your assumptions and adjust your path along the way. The Society of Actuaries estimates that for a married 65-year-old couple, there is a 45 percent chance of one person reaching age 90 and a 20 person chance of one person reaching age 95. So it is prudent to plan on living a long time.

The best way to determine the income you will need to live comfortably is to first determine how much you are spending on your fixed and discretionary expenses today. Second, determine which expenses will continue in retirement, which will disappear and which will be new. For instance, your property taxes will continue, but your mortgage may disappear and you may have new medical insurance and travel costs. And don't forget large periodic costs, like cars. No one knows what inflation will be. The Federal Reserve has a target annual inflation rate of 2 percent, but it is best to have inflation protection in some of your assets and income sources. Social Security is adjusted for inflation; some pensions and annuities are not.

Q. I have read that the rule of thumb is to withdraw 4 percent or 1/25 of your retirement funds each year. My guess is that this “rule” was developed when interest rates on “safe” investments (CDs, certain bonds, etc.) would support this level of withdrawal. However, with interest rates near zero (at least for now), it seems only equities have the chance to earn a sufficient return to support the 4 percent rule, but equities are risky for retirees. What is your advice on how to invest retirement funds, and is the 4 percent rule still applicable? -HonuCarl, Los Angeles.

A. The notion of a 4 percent safe withdrawal rate emanates from a 1998 academic study often referred to as the “Trinity Study.” In the study the authors from Trinity University provide historical evidence that if you begin withdrawing 4 percent of your accumulated savings your first year of retirement and increase that amount each year by the rate of inflation, you have little danger of running out of money over a 30-year period if it is invested in a balanced portfolio of stocks and bonds. For example, if you have $1 million at retirement, you can withdraw $40,000 the first year. Assuming the inflation rate is 3 percent, the second year of retirement you can withdraw $41,200. This strategy is appealing because it provides a steady cash flow while the value of your portfolio may be fluctuating. Updated studies through 2011 indicate that since 1926 there were no 30-year periods where you would have run out of money using this strategy (although if you retired in 1966 you w ould have come awfully close).

In a 2012 study, Wayne Pfau examined time periods of low dividend rates and high market valuations on withdrawal rates. He found that in those environments there may be reason for retirees to worry about the 4 percent rule of thumb.

In practice people may want to start with a 4 percent withdrawal rate and periodically adjust based on the current situation. A mix of stocks (equities) and bonds gives the best likelihood of success. If you are using a 4 percent withdrawal rate and the stock market booms, if you don't re-evaluate you will be living more frugally than you need to. The opposite is true as well.

It's also important to consider age. If you retire when you are in 50s, you will probably want to start with a lower withdrawal rate. If you are in your 80s, a higher withdrawal rate is certainly appropriate.

Q. I am very confused about what to do about long-term care insurance. Do you need to know where you will live when you retire, or are there policies that can be purchased in one state and used in another? Are there still such things as prepaid policies that you can pay off while you are still working? And are there any guarantees, or “insurance for the insurance”? That is, what if the company drops you, or the company goes under, or sells your policy to another company that goes under - do you lose everything you've already paid into it? And how much do they really cover? If you go into a nursing home, don't you end up spending down all of your assets and ending up on Medicaid anyway? I've heard rumors that they don't really cover all that much, once the time comes to actually collect. I understand that health care is a huge, huge cost when one is older, but are these plans really worth it? Are you really better off with one, given all the things that can go wrong? The l ast thing I want to do is to spend savings on insurance that won't actually do me any good in the end. - E., Long Island.

A. Deciding whether to purchase a long-term care policy is one of the most difficult decisions a preretiree needs to make. Like many insurance products, long-term care insurance is insuring against a risk that you hope you never need but that if you do need it, you want to be sure it is there.

Long-term care companies are bound by state regulators to pay for care covered in their contracts. Indeed, the insurance companies have paid so much in long-term care benefits that Unum Group, Guardian, MetLife, Allianz and Prudential are not writing new policies because they are not profitable. There are no guarantees for long-term care insurance companies, but they generally have the ability to request rate increases if their costs increase, allowing them to continue paying benefits (sometimes price increases are substantial). You should know, however, that at least one long-term care insurance company, Penn Treaty, is in bankruptcy, and it is likely the policy holders will receive little in the way of benefits. Make sure you check the credit rating of an insurance company before you buy a policy. You can move from state to state with your existing long-term care insurance.

Refinancing Spikes as Mortgage Rates Fall


Is it time to think about refinancing - or perhaps, re-refinancing?

Mortgage refinancing jumped to a three-year high, as interest rates on home loans dropped to new lows, according to a weekly industry survey from the Mortgage Bankers Association.

Mortgage applications overall increased 16.6 percent from one week earlier on a seasonally adjusted basis for the week that ended Sept. 28, according to the association's Market Composite Index, a measure of loan application volume. The survey covers more than three-fourths of all retail home mortgage applications in the United States, and has been conducted weekly since 1990.

The Refinance Index, meanwhile, increased 20 percent from the previous week. This was the highest refinance index recorded in the survey since April 2009.

“Refinance application volume jumped to the highest level in more than three years last week as each of the f ive mortgage rates in the M.B.A.'s dropped to new record lows in the survey,” Mike Fratantoni, the association's vice president of research and economics, said in a prepared statement.

He said the markets are continuing to adjust as the Federal Reserve's initiative to buy bonds known as mortgage-backed securities, dubbed “QE3,” pushes rates lower.

The refinance share of mortgage activity increased to 83 percent of total applications, from 81 percent the previous week.

The average interest rate for 30-year fixed-rate mortgages with “conforming” loan balances (meaning $417,500 or less) fell to 3.53 percent from 3.63 percent, while the average rate for 30-year fixed-rate jumbo loans (greater than $417,500) fell to 3.82 percent from 3.87 percent.

The average rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration fell to 3.37 percent.

Those who can swing the monthly payments for a 15-year fixed rate mortgage saw the average rate decline to 2.90 percent.

Are low rates causing you to consider refinancing? Have you refinanced previously?

Polls Show Voters Divided Ahead of Debate


Before the first debate between Barack Obama and Mitt Romney on Wednesday night, a fresh batch of polls measuring support for the candidates and their policies shows a closely divided nation.

An NBC/Wall Street Journal national poll released Tuesday showed voters were divided over which candidate was better prepared to create jobs and improve the economy, by far the most important issue in deciding how to vote, and a central topic in the debate tonight. However, more voters said that Mr. Obama is better prepared to lead the country for the next four years.

In the overall match-up, the NBC/WSJ poll showed Mr. Obama with a 3-point advantage among likely voters over Mr. Romney, a difference within the poll's margin of sampling error of plus or minus 3 percentage points.

In Quinnipiac University's national poll, also released Tuesday, about 9 in 10 voters said they planned to wat ch the debates, but nearly the same number said they did not expect the candidates to say anything that would change their minds. The poll showed Mr. Obama with 49 percent of support among likely voters, compared with 45 percent for Mr. Romney.

In Ohio, Mr. Obama has an 8-point lead among likely voters, according to a new NBC/Marist/Wall Street Journal poll, driven in part by strong support among women and young voters, and a small edge among independents.

In the swing states of Florida and Virginia, the race is more competitive, according to the NBC/Marist/Wall Street Journal poll. In Virginia, Mr. Obama received the backing of 48 percent of likely voters, compared with 46 percent who support Mr. Romney. In Florida, the race is nearly even. Voters in Virginia and Florida were divided over which candidate would better handle the economy, but Mr. Obama held a slim advantage on foreign policy.

The Heartland Monitor Poll, conducted by Allstate and National Jou rnal, found that nearly half of Americans said they were better off because Mr. Obama had won the 2008 election, while 4 in 10 said they would have been better off under someone else. Three-quarters said they've been able to get ahead financially over the course of their lives, but about the same number said it was harder to do so today than in previous generations.

While nearly 6 in 10 said the economy will improve over the next 12 months, Americans were divided over which candidate has the experience and skills needed to steer the economy. More said that Mr. Obama would better support policies that would benefit people like themselves, as well as promote opportunities for all Americans and for future generations.

Conducted nearly two weeks ago, the Heartland poll found 50 percent of likely voters supporting Mr. Obama and 43 percent supporting Mr. Romney.

In a new national survey of Hispanics conducted by CNN/ORC, Latinos said that Mr. Obama would do bette r on a number of issues by a large margin over Mr. Romney, including the economy (40 points), immigration (54 points) and education (57 points). Seven in 10 likely Hispanic voters said they would support Mr. Obama, compared with about a quarter who said they would support Mr. Romney.

The Boom (and Bust) That Your Mortgage Bonds Built


Mortgage-backed securities are in the news again this week now that the Justice Department has sued a JPMorgan Chase unit accusing it of various improprieties during the housing boom and subsequent collapse.

In this excerpt from his new book, “Man vs. Markets,” Paddy Hirsch, senior producer for personal finance at American Public Media's business radio program production house, Marketplace, explains the history of asset-backed securities and how they ended up causing so much trouble.

Mr. Hirsch, perhaps best known for his series of whiteboard drawings and videos, leads the team of Marketplace staffers that co-produces two special newspaper sections and two hourlong radio shows each year with The New York Times.

In the 1980s, old-fashioned banks wanted big money. The kind of big money that the investment banks were making with all their fee­-based business. Commercial banks began asking themselves how they could get their hands on that fee money, without taking on risk. Interest income is great but it comes with an ever­-present risk that the borrower might default. The fee that a borrower pays on first signing for a loan, on the other hand, comes without any risk.

So one way lenders can make more money is to extend loans to borrowers, collect the fees, and then sell the loans to a third party, someone who's neither the borrower nor the lender. The risk of default is now assumed by the new owner of the loan, and the original lender simply pockets the fee and walks away.

The first mortgage­-backed security, which was assembled in this fashion from plain-old home mortgages, was created in 1970. It was called a pass-through, because the interest an d principal on all the loans in the pool were simply passed straight through to the bondholders (after the people running the trust were paid a fee, of course).

Securitization was a boon for homeowners, for the government, and for the banks who lent these mortgages. When investors asked for even more loans, with higher potential returns, Salomon Brothers and First Boston teamed up to give the idea a try. In 1983, they created a new securitization for Freddie Mac that offered a range of bonds based on a pool of private mortgages. Each class of bond had a different tenor and a different interest rate. Just like in a corporation, the safest, shortest-­duration investments were at the top and the riskiest and longest were at the bottom. It was a mortgage­-backed security with a twist, so it needed a new name. They called it a collateralized mortgage obligation.

It might help to think about a collateralized mortgage obligation as a pyramid of glasses, piled up in se veral tiers on a silver tray. Each tier represents a class of investor, the senior bondholders at the top, then the mid­level or mezzanine bondholders in the middle, and the junior bond­holders at the bottom. The tray is where the equity holders stand.

Now we pop the bottle of Champagne. The bottle is the bundle of mort­gages. At the end of the month, all the mortgage borrowers make their interest payments and the cash flows, like Champagne pouring out of the bottle. It flows out over the pyramid, filling the top tier of bondholders first, then the mezzanine tier, then the bottom and finally it fills the silver tray. And the same thing happens month after month after month.

If some of the mortgage borrowers get into trouble and fail to make their interest payments, or if they prepay or refinance their mortgages, less money will spout out of the mortgage pool and cascade over the pyramid. The top tier will likely still be filled, so those bondholders get paid, and maybe the mezzanine, too. But the chances of the bottom­-tier lenders and the equity investors being left dry become very real. That's why the junior bondholders get the biggest interest payments, while the payouts to the senior lenders are the smallest.

The collateralized mortgage obligation was a stroke of genius. It cre­ated a range of risk profiles and investment durations, and thereby appealed to many more investors. Now conservative banks could buy bonds that gave them a small, steady, and all­-but­-certain income, while speculators could gamble big with their bond investments, hoping for a fat payout each month.

And just like that, the genie was out of the bottle. Lenders realized that anything that generated cash flow or a steady stream of money each month could be securitized. Whether it was a mortgage, an aircraft lease, a student loan, or a book royalty payment, if it had cash flow, it was called an asset, which meant it could be turned into a so­-called asset-backed security, or A.B.S.

Now a single investor could put money into mortgages, credit cards, and car loans, rather than focusing on just one area. Investors liked the idea of being able to diversify this way, so they asked for more of these types of bonds.
That demand in turn fueled demand for more car loans, mortgages, and credit cards to put into the securitizations, which meant banks were pressured into going out and making more loans.

Suddenly it became a lot easier to get a loan. And that was great news for the economy. At the consumer level, it gave individuals access to money to buy goods and services in volumes that businesses had never seen before. That income allowed those businesses to grow, to hire more people, who in turn consumed more. At the corporate level, it gave companies access to the kind of money that gave them the freedom to do the kinds of things that companies could only have dreamed of in the past. Now they could expand into other parts of the globe, create new markets for their goods, even buy out their competitors.

In the late 1990s and early 2000s, the banks were happy, because they were making lots of fee money without taking much of a long­-term risk. American consumers and companies were happy because more money in the system and the banks' dwindling concern about credit quality (since it was bondholders who were now on the hook in the event of nonpayment) made it easier for them to borrow. But investors were happiest of all. Asset­-backed securities, whether they were based on mortgages, corporate bonds, or student loans, were enormously profitable. America was growing rapidly, unemployment was falling, and incomes were rising. Investors noticed that most people were making their interest payments, and the default rate of companies and individuals was way, way down. Many figured the riskiest bonds sold by an asset­-backed security were less risky than they seemed. So they demanded more.

And the lenders were happy to oblige. As the 1990s wore on, they doled out mortgages, car loans, and credit cards to people who would never have qualified for a loan twenty years before. Those borrowers of­ten paid painfully high interest rates on their loans, which reflected the possibility that they wouldn't be able to make their payments. But the investors who bought bonds backed by bundles of mortgages or car loans didn't mind: the more the borrowers had to pay, the higher the interest payments went on the bonds, and the more cash went into their pockets.

In the early 2000s, an unprecedented amount of debt was being lent to subprime borrowers, who opened credit card accounts, bought cars, boats, and, of course, houses. We now know that many lenders were giv­ing mortgages to people without asking for any collateral, or even proof of earnings. The lenders didn't care about the borrowers, because they could simply sell the mortgages on to a securitization trust. If the borrower defaulted, it was no longer the lender's problem.

The trusts didn't think it was their problem, either. The economy was booming, so that enough subprime borrowers were making their payments to funnel money to most of the investors who bought the bonds in these securitization vehicles. Most of the glasses in the pyramid were filling up, as it were. These bonds did so well that some enterprising financiers decided to take those bonds and securitize them, too! They called these new vehicles collateralized debt obligations, or C.D.O.'s, and they marketed them as completely safe.

But on Oct. 31, 2007, a stock analyst named Meredith Whitney shocked the banking world with a report that said Citigroup, one of the biggest banks in the nation, had too many bad home loans and was barely making enough money to operate.

The statement seemed absurd. Citi was the recipient of stamps of approval from analysts at all three ratings age ncies and the best investment banks. The bank insisted it had plenty of money and that Whitney was plain wrong.

But Whitney was right. She had ignored her peers, dug deep into Citi's balance sheet, and gone through its operations with a clear, hard eye. Other analysts rushed to do their own due diligence a little more diligently. Many downgraded Citi, and a week later, the bank's chief executive resigned.

Debt was the engine of the massive boom in the economy from 2002 onward, and the shadow banking system was the grimy stoker shoveling the fuel. Everyone benefited from debt: the people from all walks of life who could buy huge houses and max out their credit cards filling those houses up with flat­-screen TVs and leather recliners; the companies who could set up operations in far­-flung corners of the world one day and then gobble up a neighbor the next; the investors who rode the soaring stock market, and used asset­-backed securities to turn a billion dolla rs into a hundred billion on paper in less than a year; the politicians who could point to the buildings rising in their districts and the unemployment numbers falling all over the nation; the president who could boast about the country's stunning growth rate and announce the forces of terror had failed to suppress the American way of life.

Occasionally some egghead or analyst like Ms. Whitney would try to spoil the party by muttering darkly about the overextension of credit, or the lack of regulation in the banking sector, or the dangerous and poorly understood interconnected­-ness of the financial system. But most Americans had no idea what the eggheads were burbling about. And most of those who did understand the warnings dismissed them, saying they didn't acknowledge the benefits of a truly free and unregulated market.

Unfortunately, however, the eggheads were right. Debt, and consumer debt in particular, was the fuel that the stokers of the financial indust ry shoveled into the engine of the 1990â€"2007 economic boom. The trouble with fuel is that someone has to pay for it. A borrower can play the game of paying one loan off with another for so long, but one day the bill comes due and the debt must finally be paid. And in 2007, the bills started coming due, all over America.

Excerpted from “Man vs. Markets: Economics Explained (Plain and Simple),” published by Harper Business. Copyright © Paddy Hirsch, 2012. Reprinted with permission.

Priorities USA Action Pulls Ads From Florida and Wisconsin


The pro-Obama “super PAC” that has spent millions of dollars attacking Mitt Romney in ads is pulling commercials from Florida and Wisconsin, part of what the group says is a realignment of its advertising campaign.

The cancelations by Priorities USA Action, coupled with new purchases of television time in other key swing states, indicate where Democratic strategists think the presidential race may and may not be competitive with a month left to Election Day.

President Obama was always polling strongly in Wisconsin, so the need for him to have a strong television presence advertising there was less crucial.

But Priorities, which has been pulling in more money than its pro-Romney counterp art recently and will continue to aggressively fundraise through much of October, is also going up on the air in states where the polls are much tighter, like Nevada, which is a first.

Bill Burton, a senior strategist for the group, said Wednesday that Priorities would also be buying more time in Colorado, Iowa, Nevada and Virginia in the coming days.

According to preliminary advertising totals, Priorities moved $4.5 million out of Florida and Wisconsin markets. But the group remains on the air in some markets, including Orlando, West Palm Beach and Green Bay.

“We are not leaving any states,” Mr. Burton said. “Based on our extensive polling and targeting data, in some states we are shifting efforts into some key markets.”

Wednesday Readiing: A Day Trip to Princeton for $66, Nap Included


A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

The Early Word: Debate Prep


In Today's Times

  • It is no coincidence that President Obama rehearsed for Wednesday's debate in Nevada, a swing state that serves as a vivid reminder of the economic distress facing the country and threatening his hopes for re-election, Mark Landler reports.
  • Political observers know that both candidates face risk and reward for their debate performances, and Jeff Zeleny has a list of things to watch for in style and substance for the first of three encounters between the president and Mitt Romney.
  • Jackie Calmes and John Harwood look at some of the topics that could come up in the debate and how claims the candidates have been making stack up against the facts.
  • Mr. Obama has been out-advertising Mr. Romney in most of the key battleground states since the parties' conventions, which helps explain why polls in most of the competitive areas have shifted in his direction over the last month, Jim Rutenberg and Jeremy W. Peters report.
  • Though he has not appeared in public since early June, Representative Jesse L. Jackson Jr., Democrat of Illinois, is still running for a 10th term, leaving his little-known opponents in the surprisingly difficult position of trying to rally opposition to a campaign that does not seem to exist, Monica Davey writes.

Around the Web

  • Congress could have its first openly gay Asian-American member, its first openly bisexual member and its first openly gay senator after the elections, The Associated Press reports.

Happenings in Washington

  • There will be a number of debate watch parties around the city, and the one in the Bloomberg Room of the National Press Club will be open to the public.
  • The National Museum of American History will unveil a portrait of Celia Cruz, a Cuban-American salsa performer, in honor of Hispanic Heritage Month.
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