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WASHINGTON — President Barack Obama’s administration released new fuel economy standards Tuesday in hopes of reducing greenhouse gas emissions.

The fuel economy standards, unveiled by Transportation Secretary Ray LaHood and EPA Administrator Lisa P. Jackson, would hold domestic automakers to a 35.5 miles-per-gallon standard by 2016.

The new goal would harmonize U.S. fuel economy standards after years of differences between California’s ambitious requirements and more modest national goals.

Tuesday’s proposed regulations are a result of Obama’s May agreement with automakers, states and the environmental community to tighten fuel efficiency and emissions standards, ending years of litigation over regulations. This plan goes even further than a 2007 law that set a nonbinding goal of 35 mpg by 2020.

Democrats and environmentalists applauded the administration action. But conservatives criticized the changes because of the extra costs that might be placed on consumers.

Administrators estimated earlier this year that the cost of the new requirements to automakers would be $1,300 per vehicle. But the National Highway Traffic and Safety Commission and EPA predict that the new standards will save drivers $3,000 in fuel costs during the lifetime of a model year 2016 vehicle absolutely free credit report. They will also conserve 1.8 billion barrels of oil and cut greenhouse gas emissions by 950 million metric tons.

Tuesday’s announcement indicated a federal embrace of fuel economy standards first established by California but rejected by the EPA in 2007 during the Bush administration. After Obama’s administration negotiated some changes in the requirements with the states, California’s standards in effect became a federal program.

The plan "is an important step toward harmonizing federal regulations and development of a single national standard that is reasonable and predictable," said Sen. Carl Levin, D-Mich.

But Sen. James Inhofe, R-Okla., the top Republican on the Senate Energy & Natural Resources Committee, said the new regulations "will exact a heavy price on the American people for no climate benefit." The Obama plan "will not enhance America’s energy security," Inhofe contended, "and, in fact, will make new cars more expensive and less safe."

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Boeing said it’s prepared to enter the next Air Force tanker competition with one of two planes.

The St. Louis-based defense unit of Boeing Co. on Monday offered details of its tanker proposals that would be either a KC-767 or a larger, converted 777. The latter would be comparable in size to the modified A330 offered by competitor Northrop Grumman Corp. and European Aeronautic Defence & Space Co.

"Boeing is ready to deliver maximum capability at the lowest cost," Boeing program manager Rick Lemaster said in a prepared news release Monday.

The Pentagon is preparing draft guidelines spelling out the rules for a new refueling tanker competition. Boeing will review the request before it decides what it would offer, said Bill Barksdale, a spokesman for Boeing Global Mobility Systems.

In February 2008, the Pentagon chose the Northrop/EADS proposal to build aerial refueling tankers that were larger than Boeing’s proposed KC-767 tanker. Boeing protested and was supported by the Government Accountability Office, which found problems with how the contract was awarded.

The Pentagon decided to start over and reopen the $35 billion tanker competition.

"All that matters is the Air Force and what they want," Barksdale said. "If they want a bigger tanker, we have one that is definitely superior" to the A330.

Part of Monday’s message is that "the other guys don’t have a permanent advantage" with respect to the size of its tanker proposal, said Richard Aboulafia, an analyst with the Teal Group in Fairfax, Va. But converting the 777 into a refueling tanker would likely take time and money, he said.

"This is supposed to be an off-the-shelf procurement," Aboulafia said.

Boeing has produced some of the KC-767s already, including three that are in operational squadrons for the Japanese air force, Barksdale said. If it wins the contract, Boeing projects 50,000 jobs will be dedicated to the tanker. The planes would be built in Washington state.

Boeing officials provided the details at the Air Force Association’s 2009 Air and Space Conference and Technology Exposition near Washington, D.C. The company also has launched a website devoted to its refueling tanker options called UnitedStatesTanker.com

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A U.S. decision to impose special duties on Chinese tires could trigger a host of trade complaints against Chinese products and a backlash from Beijing, creating tensions as Western nations seek China’s support at a G20 meeting.

China responded swiftly to President Barack Obama’s announcement Friday of safeguard duties on tire imports from China, saying on Monday it would request World Trade Organization consultations with the U.S. over the duties.

It also announced its own anti-dumping investigations of chicken products from the United States, a trade worth $800 million a year, as well as U.S. automotive exports.

Looming in the United States are complaints about products ranging from electric blankets to a steelmaking ingredient, while Chinese and European trade negotiators are gearing up for a fight over shoes.

Obama, in a speech on Wall Street, said he was committed to expanding world trade and denied protectionist intent.

“When, as happened this weekend, we invoke provisions of existing agreements, we do so not to be provocative or to promote self-defeating protectionism,” he said.

“We do so because enforcing trade agreements is part and parcel of maintaining an open and free trading system.”

The United Steelworkers union filed the tire protection petition earlier this year. It said a tripling of Chinese tire imports from 2004 to 2008 had cost more than 5,000 U.S. jobs.

The U.S. trade deficit with China totaled $103 billion in the first half of 2009, down 13 percent from last year but it has grown considerably over the last decade.

The imbalance is a source of much ire in Washington and the rest of the country.

U.S. Agriculture Secretary Tom Vilsack said the Obama administration will strongly object to any attempt by China to retaliate against chicken exports.

“There is no reason why another country should try to even the scale, if you will, by focusing on agricultural products,” Vilsack told a National Farmers Union conference.

Stocks on Wall Street slipped shortly after the opening bell on Monday in part over concerns about the trade dispute but finished squarely ahead, with the Dow industrials up 19 points to 9,624. U.S. tire makers Goodyear Tire & Rubber Co and Cooper Tire & Rubber Co ended higher.

NO FULL-SCALE TRADE WAR

While the intensified sparring between two of the world’s biggest economies could trigger a bout of nerves in financial markets, it is unlikely to spiral into a full-scale trade war. 

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My investments need to be a lot more diversified, I was told. Within a split of 55 percent stocks and 45 percent bonds, I was presented a list of 10 mutual funds and exchange-traded funds to buy (plus 23 others as alternatives).

I won’t buy any because the suggestions were based on faulty assumptions. But I appreciated the concept of building a broadly diversified portfolio consisting of different asset classes, including growth and value stocks of large and small U.S. companies, and stocks from foreign companies.

And I relished the idea of keeping costs down by focusing on index mutual funds, exchange-traded funds and low-cost actively managed funds with consistent performance.

I received these fund suggestions from Cake Financial, an online computer-driven mutual fund "engine" that analyzes your investments and suggests and monitors a low-cost diversified portfolio appropriate for your age. For $99.99 a year — there is a 30-day free trial — Cake Financial claims it can save investors many thousands of dollars in the long run by selecting lower-cost and less-risky funds. The site also offers a more basic investment tracking service for free and a fund-comparison service for $29.99 a year, also with a 30-day free trial.

In my case, the fund suggestions were based on the wrong assumption that all my money was in large-company stocks. That’s because Cake Financial can analyze only investments held in brokerage and fund accounts it can link to its site (for a list, to which customers can recommend additions, go https:// www.cakefinancial.com/help/linking-a-brokerage). More than half my assets are outside brokerage accounts.

For investors who have the bulk if not all their retirement savings — including 401(k)s — with brokerage and fund providers, this online fund "engine" can provide a useful service that will add to diversification and keep costs down free credit report and score. The average Cake user is in his early 40s with about $150,000 to $200,000 mostly in mutual funds, said Steven Carpenter, the company’s founder and CEO.

Cake is not the only place you can get fund recommendations online. Several free sites run by investment advisers, such as www.fundadvice.com, list model portfolios consisting mostly of index and other low-cost funds. Of course, the people running these sites are trying to sign you up as a client. The sites of many fund companies provide solid advice on asset allocation and sometimes suggest certain funds or combinations of funds (naturally, the funds they sell). By contrast, Cake is an independent information and screening service that gives you fund choices from which to pick.

"We are not an adviser and we do not effect transactions," Carpenter said, but simply base fund suggestions on computer models that look for strong consistent performance and incorporate fund fees in their calculations.

"We show all the top funds for an asset class and sort them by fees," Carpenter said. "Where we feel we are better than an adviser is that we don’t have" any incentive to recommend one fund over another. A survey by Harris Interactive on behalf of Cake Financial found only 21 percent of Americans who use financial investment firms are confident the firms put customers’ best interest ahead of their own.

To be fair, many advisers who act in a fiduciary capacity focus only on what’s best for the client. Cake Financial does a bare-bones job in estimating how much money you need in retirement and is not a substitute for a trusted financial professional adviser.

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The number of bankruptcies in Canada rose by more than a third in July compared with the year earlier, the latest figures show. But the number fell slightly from June.

Some observers say the data from the Office of the Superintendent of Bankruptcy, released yesterday, show that the tide of insolvency swamping Canadian households is easing, a sign that the worst of the recession may have passed.

Others said the slowdown was typical of midsummer.

There were 10,726 personal and business bankruptcy filings in July, up from 7,908 a year ago, the report showed. That’s an increase of nearly 36 per cent.

Bankruptcy filings were down 5.4 per cent in July from the 11,338 filings in the previous month. The overwhelming majority of filings were by consumers, while the number of business bankruptcies fell from last year.

The data "provide further evidence that the worst of the economic downturn may have passed," Keith Howlett, retail industry analyst with Desjardins Securities, wrote in a report.

In July, 10,294 consumers went bankrupt, up 38.1 per cent from a year earlier, but down 4.9 per cent from the previous month. "This marks the first instance of a sequential improvement in consumer bankruptcy filings since December 2008," Howlett noted.

The number of insolvencies in July has been lower than the number in June eight times in the past 10 years, the agency noted.

"It’s just got to do with the summer," Andy Fisher, trustee with A. Farber & Partners, said of the July decline. "People are putting off the decision to go bankrupt. They want to forget about those problems."

In March and June, the number of bankruptcies rose by more than 50 per cent over the previous year, sharp increases that were not surprising in light of the recession and the rising unemployment rate.

"It’s good that (the overall rate) is improving, but it’s still a concerning trend," Fisher said. "We may have passed the worst of the recession, but things are still bad."

Insolvency is known as a lagging indicator, meaning economists expect bankruptcies to rise even after the economy begins to improve.

Businesses accounted for 432 bankruptcies in July. That’s down 16.1 per cent from the 515 companies that filed in the previous month. It’s also a decline of 5.3 per cent from July, 2008.

Construction, manufacturing and retail accounted for most of the bankruptcies.

The monthly data also show the number of proposals, a last-ditch effort to pay creditors a portion of what they are owed, rose 31.1 per cent.

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In obscure corners of the U.S. stock market — where “flash orders,” “dark pools” and other controversial practices thrive — regulators are trying to shine a light to guard against unfair dealing.

But a crackdown by the U.S. Securities and Exchange Commission, sought in recent months by some top lawmakers in Washington, won’t come quickly and may not be as comprehensive as some desire.

The market rule-making process at the SEC is long and time-consuming. And while some trading practices are under the gun, the overall market has been sound throughout the financial meltdown, helped, many argue, by its embrace of the complex electronic trading at the center of the controversy.

Exchanges, brokerages and other market players have catered in recent years to so-called high-frequency traders — firms that use computer algorithms to make hair-trigger trades in small amounts of stock. This has spawned other controversial practices, but has also given the U.S. stock market unrivaled liquidity.

“The tendency is to leave the market alone. As long as it’s working, don’t try to play games with it,” said Fred Lipman, a partner at Philadelphia law firm Blank Rome who has written several books on capital markets.

“These algorithms and computer programs are … a fact of life,” he said, and regulators “are going to do just enough to keep the politicians off their backs.”

Unlike the high-profile financial regulation overhaul being sought by the Obama administration, the SEC’s market-structure initiative targets behind-the-scenes Wall Street practices.

Some observers say the next big scandal lurks in this structure, which has evolved mostly unobstructed since 2004, when sweeping rules ensured all orders are executed at the best price good credit score. That helped seed the growth of high-frequency traders, which are now involved in an estimated 70 percent of equity trades.

This summer, Democratic U.S. Senators Charles Schumer and Ted Kaufman called for a review of high-frequency trading and other practices that they said could exploit smaller investors and put the stability of markets at risk.

Banks such as Goldman Sachs, hedge funds like Citadel, and private marketmakers such as GETCO have been the main target of criticism in recent months, since high-frequency trading came under the spotlight after a former Goldman computer programer was charged with stealing trading code.

EXPLORING POSSIBILITIES

SEC staffers are exploring possible recommendations to the agency this fall on market-structure issues, including high-frequency trading, said SEC spokesman John Nester.

He said the agency is also probing aspects of trading and transparency at more than 40 U.S. “dark pools,” where large block trades are done away from central exchanges.

Also under SEC scrutiny: “naked access,” where a broker allows a customer to use the broker’s name to get direct access to markets; and “co-location,” in which exchanges like NYSE Euronext and Nasdaq OMX rent space to firms, which put their computers next to the exchanges’ trading engines to shave valuable microseconds from trading time.

Regulators have said little publicly about high-frequency trading, suggesting they are loath to tamper with a phenomenon that the industry says makes trading in U.S. markets relatively easy. 

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Wal-Mart Stores Inc is expecting a “late Christmas” as consumers continue to carefully manage spending, CEO Mike Duke said at an investor conference on Thursday.

Duke said shoppers are keeping a watchful eye on prices and are less likely than before to stock up on items or to purchase lower-quality “throw-away” items.

Consumer spending, an important driver of the U.S. economy, has fallen off sharply during what has become the longest and deepest recession since the Great Depression.

“This is the new normal. This is not something that is going to change,” Duke said at the Goldman Sachs Global Retail Conference.

Duke said the world’s largest retailer is prepared for the upcoming winter holidays, but that he expects “it will be a late Christmas.”

The chief executive said Wal-Mart still has opportunity for growth in many U.S. markets but that investors should not expect to see any significant increase in long-term margins.

(Reporting by Lisa Baertlein; editing by Gunna Dickson)

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Global oil demand through next year will be weaker than previously forecast while petroleum supplies will be higher, the U.S. government said in a revised outlook on Wednesday.

The latest forecast from the U.S. Energy Information Administration could put downward pressure on oil prices, which have more than doubled since February on hopes for an economic recovery.

The EIA cut its forecast for world oil demand growth in 2010 by 30,000 barrels per day to daily demand of 84.58 million bpd. But it boosted its forecast of global oil production growth by 150,000 bpd to average output of 84.65 million bpd.

The EIA’s new monthly short-term energy forecast would mean a daily world oil supply surplus of 70,000 barrels.

“This is the definition of an oil glut and should mean we will enter a bear market,” said Phil Flynn, an energy analyst at PFGBest Research in Chicago.

The EIA said while the current outlook assumes the world economy “begins to recover at the end of this year,” projected strong oil demand growth in developing countries will be partially offset by weaker oil use in industrialized nations, contributing to the supply surplus.

Flynn said despite the fact that the market is “swimming in crude,” prices for oil may continue to be supported by outside forces, such as the weak dollar and a global economic stimulus.

For the fourth quarter of 2009, the agency lowered its forecast for OPEC crude oil production to 29.26 million bpd from its prior estimate of 29.31 million bpd free credit score.

“The combination of higher prices and OPEC’s historical tendency for weaker compliance with production targets over time … suggests that OPEC crude oil production could (still) rise over the remainder of the year, unless prices fall sharply from current levels,” the EIA said.

The EIA raised its forecast of OPEC oil output during 2010 to an average 28.89 million bpd from 28.82 million bpd.

EIA’s forecast came as OPEC ministers were meeting in Vienna, where they were expected to not change their oil output targets. “As long as oil prices remain in their current range, EIA expects the Organization of the Petroleum Exporting Countries to maintain its existing production targets,” the agency said.

Separately, the EIA lowered its projection for oil output from non-OPEC countries next year to 50.19 million bpd from its previous projection of 50.22 million bpd.

“Over the forecast period, higher output from Brazil, the United States, Azerbaijan, Kazakhstan and Canada offsets falling production in Mexico and the North Sea,” EIA said.

U.S. oil output is forecast to average 5.24 million bpd this year and then rise to 5.30 million bpd in 2010.

“Crude oil production from the new Thunder Horse, Tahiti, Shenzi and Atlantis federal offshore fields accounts for about 14 percent of Lower-48 crude oil production in the fourth quarter of 2010,” the agency said. 

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American International Group Inc is interviewing banks this week to manage a planned initial public offering of life insurance unit American Life Insurance Co, sources familiar with the matter said.

An IPO could fetch as much as $5 billion for Alico, depending on the size of the stake that is sold, the sources said. AIG has said it plans to list the company in New York.

About 10 banks, including UBS AG, Deutsche Bank AG, Citigroup Inc, Credit Suisse Group AG() and Goldman Sachs Group Inc, are expected to be interviewed for the job, the sources said on Tuesday.

Morgan Stanley is expected to get a lead role as it has been guaranteed such a position by the Federal Reserve Bank of New York for any IPO of AIG units, the sources said.

An IPO of Alico is expected only after the public offering of shares in another major AIG property, American International Assurance Co Ltd, which has been slated for early next year, one of the sources said.

Morgan Stanley and Deutsche Bank have been selected as global coordinators for the AIA offering.

AIG and all the banks declined to comment. The sources declined to be identified because the process is not public.

Alico, which was founded in 1921, sells life insurance and retirement products to 19 million customers through a distribution network that includes 40,000 agents easy payday loans. It operates in 54 countries but generates more than half of its revenue in Japan.

In July, another source told Reuters that AIG was in talks with MetLife Inc for a possible sale of Alico. The status of those talks could not be determined on Tuesday.

Late last month, AIG’s new chief executive, Robert Benmosche, said the company was still planning IPOs for Alico and AIA, preparing them from an eventual sale when the time was right.

The divestitures are part of the insurer’s efforts to repay U.S. taxpayers the roughly $80 billion it received as part of a larger federal rescue.

The company has agreed to give the U.S. government preferred stakes in Alico and AIA to reduce its debt by $25 billion.

Separately, Credit Suisse downgraded AIG to “underperform” from “neutral,” saying near-term sale of businesses would leave little to no value for common equity holders.

AIG’s shares were off $3.58, or 8.9 percent, at $36.47 during afternoon trading on the New York Stock Exchange.

(Reporting by Paritosh Bansal Editing by Gerald E. McCormick, Ted Kerr, Gary Hill)

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Chinatrust Financial, Taiwan’s top credit card issuer, offered $2.4 billion for AIG’s Taiwan Nan Shan Life unit, outbidding rivals, a source with direct knowledge of the situation told Reuters on Saturday.

Primus Financial, which was competing head-on with Chinatrust in acquiring Nan Shan, gave up on its pursuit after Chinatrust raised its bid to T$80 billion ($2.4 billion), said the source, who is involved in the negotiations.

“Paying that much is suicidal,” the source said, referring to Chinatrust’s offer. “It is 100 percent certain Primus is not in the game any more,” he told Reuters via phone.

Chinatrust’s latest bid was above market expectations and was better than the $2 billion target American International Group (AIG) had expected for Nan Shan, its most expensive asset for sale in Asia so far.

Three other bidders, including Primus Financial and China Strategic, the Carlyle Group and Fubon Financial, and Cathay Financial, had offered less than $1.5 billion each, sources close to the companies said late in August.

In an interview with Reuters in August, AIG’s new chief executive officer Robert Benmosche had said he did not favor shedding assets at any price.

Officials of Chinatrust and Morgan Stanley, the financial advisor on the Nan Shan deal for AIG, declined to comment.

New York-based AIG is under pressure to repay more than $80 billion in U.S. bailout loans extended last year, when the insurer nearly collapsed under the weight of mortgage-related derivative losses.

Shares of Chinatrust ended up 1.58 percent on Friday, while the main index rose 0.68 percent.

(Editing by Lee Chyen Yee and Ruth Pitchford)

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