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It helped Elizabeth Poelker buy her house.

It probably helped Paul Medler sell his.

But is the $8,000 tax credit for first-time homebuyers really helping the economy all that much? Enough to warrant extending it for another year, at an estimated cost of $15 billion? Enough to maybe even expand it to $15,000 apiece, for everyone?

That’s a question Congress is wrestling with these days, as the program starts to near its Nov. 30 closing date, and the real estate industry ramps up a full-throated campaign to keep the credits flowing. It’s unclear at this point what will be decided.

Nearly everyone agrees that the credits have helped keep the housing market afloat during a tough time. After they were enacted as part of the $787 billion federal stimulus Congress passed in February, existing home sales rose for four straight months, before dipping in August. The rate of sales is up 12 percent since March, according to the National Association of Realtors.

About 1.4 million people have already claimed the credit on their taxes, according to the IRS, with probably more awaiting paperwork or delaying until they file in the spring.

And, along with low prices and historically low interest rates, real estate agents say the credits are sparking interest in home-buying.

"There’s no question it’s had a positive impact on our business," said Jim Dohr, president of Coldwell Banker Gundaker, which has 25 offices in the St. Louis region. That’s especially true at lower price points. Coldwell’s business is up 23 percent from last year on homes sold for less than $100,000 and 16 percent for homes sold for $150,000 or less.

"Much of the action in our business is at the lower end, and it’s really being fueled by the first-time tax credit," Dohr said.

What is less clear is how many of those sales would have happened anyway.

Prices and interest rates are low, after all. And people still need a place to live.

Out of a projected 1.8 million sales that will use the tax credit this year, economists estimate that between 350,000 and 400,000 would not have happened without it. And a recent survey commissioned by real estate tracking firm Zillow found that, if the credit is extended another year, it would be a major deciding factor for 18 percent of first-time homebuyers — spurring an additional 334,000 sales in all.

That’s nothing to sneeze at, said Zillow chief economist Stan Humphries. But at $15 billion, it works out to almost $45,000 for every sale generated.

"It’s an expensive program," he said. "For every five homes, four were going to get purchased anyway."

But there’s still that other one — people such as Poelker.

She’s 25 and works at an accounting firm. Her lease in Maryland Heights was coming up this summer, and she had grown tired of renting but didn’t think she could afford a down payment. When the tax credit passed, she started looking.

Soon, she found a nice townhouse in Manchester, put in an offer, and closed in June.

"It really helped me make it work," said Poelker, who noted that her brother and a friend had also used the tax credit to buy houses. "I probably would have purchased in the next couple of years, but it helped me do it sooner."

Still, that raises another question about the tax credit. Is it just borrowing sales from the future?

Skeptics point to Cash for Clunkers, the government-funded program to help spur auto sales. After a surge of car-buying in July and August, September is expected to be car dealers’ worst month of the year, according to a recent report from JD Power. The same thing, critics say, could easily happen whenever the homebuyer credit expires.

But supporters say that’s all the more reason to prolong it, at least for a few months. The economy is still shaky. Any housing recovery is fragile at best. Winter is typically a slow season in real estate. The timing, said Scott Dettmer, general manager of Dettmer Homes in Cottleville, is bad all around.

"You’re taking the single biggest impetus for home sales in at least three years, and you’re going to expire it at what is normally a bad time anyway?" he said. "I’d like to see it extended at least through the spring, to give a bridge over what are normally a tough few months."

At least 20 bills have been proposed in Congress to extend the plan, including one co-sponsored by Sen. Majority Leader Harry Reid that would push it into June. Another bill — to extend the credit and make it $15,000 for all homebuyers — reportedly has 15 co-sponsors.

But that measure was stripped from the stimulus bill in February, and there seems to be a limited appetite for it now, as Congress wrestles with health care reform and other pricey legislation. Many observers don’t expect a resolution until the Nov. 30 deadline draws nearer.

And that will probably keep Paul Medler waiting.

He sold his home in Kirkwood in June to a first-time buyer who used the tax credit. It probably helped make the deal happen, Medler said. Now he’s renting, and waiting to find a good deal to buy, but prices in the neighborhoods where he’s looking still seem too high for this market.

Medler’s hoping the credit either gets extended to everybody — so he can use it — or ends in November as planned.

"After this stops I feel like we might have another dive in housing prices," he said.

And, at least in his case, that would be a good thing.

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American International Group Inc’s shares fell 5.4 percent on Tuesday after speculation that the insurer was planning to sell shares, two portfolio managers said.

The source of the speculation was not clear, although earlier on Tuesday, an article by CNBC television host Jim Cramer published on TheStreet.com argued that AIG ought to sell shares.

AIG declined to comment.

The two portfolio managers who had heard the rumors declined to comment because they are not authorized to speak to the media.

AIG’s shares closed down 5.37 percent at $45.80.

(Reporting by Dan Wilchins)

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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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Taking on corporate giants can feel like tilting at windmills, but John Kopchinski’s six-year legal battle against Pfizer Inc just made him a rich man.

The Gulf War veteran and former Pfizer sales representative will earn more than $51.5 million as a result of his whistleblower lawsuit against the world’s biggest drugmaker and the record penalty the company must pay the U.S. government for its massive marketing transgressions.

The unassuming Texas resident celebrated his windfall by having a family portrait photograph taken Wednesday morning.

“We’re going to be staying right here in San Antonio in the same house, and my wife tells me when we go to the movies we’re still getting one tub of popcorn — the large tub,” Kopchinski said in a telephone interview.

Kopchinski, appalled by Pfizer’s tactics in selling the pain drug Bextra, filed a “qui tam” lawsuit in 2003, sparking federal and state probes that led to Wednesday’s agreement by the company to pay $2.3 billion in civil and criminal penalties and plead guilty to a felony charge for promoting Bextra and 12 other drugs for unapproved uses and doses.

“In the Army I was expected to protect people at all costs,” Kopchinski said in a statement. “At Pfizer I was expected to increase profits at all costs, even when sales meant endangering lives.

“I couldn’t do that,” added Kopchinski, 45, who was fired by Pfizer in March of 2003, two years before the company pulled Bextra from the market over concerns it raised the risk of heart attacks and strokes.

At the time of his dismissal after raising his concerns with the company, Kopchinski had a baby son and his wife was pregnant with twins. He went from earning about $125,000 a year to living off his retirement fund before landing a job with an insurance company for $40,000 a year.

“It was a lot of stress on the family. I pretty much depleted my entire 401(k),” he said.

“The last six years have been pretty hard, so going forward it’s going to be pretty much easier,” said Kopchinski, noting that college for his young children “is taken care of.”

Erika Kelton, Kopchinski’s lead attorney from the firm of Phillips & Cohen LLP, said large rewards are justified because of what whistleblowers must endure, often for many years, after complaints within the company go unheeded.

“Particularly in pharma, it’s no secret that it’s an industry that can blackball former employees,” Kelton said, “so the reward is important both to encourage people to step forward and to recognize that their contributions are huge.”

Kopchinski and five other whistleblowers will earn more than $102 million in payments from the U.S. government under the False Claims Act through which individuals can reap rewards for exposing corporate wrongdoing.

“The use of whistleblowers has really opened up the keys to the kingdom in terms of what’s going on in these companies,” said Dean Zerbe, senior counsel for the National Whistleblower Center and a partner at the law firm of Zerbe, Fingeret, Frank and Jadav in Washington.

“You’d never find out what’s happening without this kind of reward structure,” Zerbe said. 

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If Air Canada has its way, it soon will see fewer travellers lined up at the airport, clutching printouts of their boarding passes, in addition to suitcases and carry-on luggage.

The country’s largest airline yesterday introduced an application for the Apple Inc. iPhone and iPod Touch devices that lets travellers retrieve electronic boarding passes, track flight data and receive notifications about delayed and cancelled flights.

An application designed for BlackBerry devices is also in the works, said Patrice Ouellette, director of customer service platforms.

Ouellette said web check-in is increasingly popular but only a fraction of passengers check in with mobile devices to have an electronic boarding pass emailed to them.

The problem now is those emailed barcodes can get lost in a mountain of other correspondence; the iPhone and iPod application, by contrast, consolidates all of Air Canada’s flight data in one place.

Also, the airline is expanding programs that allow passengers to print baggage tags from airport kiosks. Research suggests that could shave 15 to 30 minutes off the time air passengers spend in lineups.

"To be honest, I wasn’t sure if it would be picked up or not by the customer," Ouellette said of self-tagging. But the practice is catching on – about 90,000 people tagged their own bags last week – a number he expects will rise once the service expands from Toronto, Montreal and Vancouver to major airports across the country.

Such do-it-yourself approaches promise eventually to reduce relatively high costs for the money-losing airline, but for now, Ouellette said the focus is on increasing customer convenience.

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Shoppers remained tight-fisted in July, raising concern about the back-to-school and holiday shopping seasons as well as for the broader economic recovery.

The big worry is that frugal parents will focus on outfitting their children this fall with just necessities like notebooks and jeans. And fear is bubbling up that parents might consider any extra splurges early Christmas gifts.

The persistent pullback despite signs of a stabilizing economy could stall the overall recovery; consumers account for 70 percent of all economic activity.

A monthly compilation of more than 50 retailers’ results by The International Council of Shopping Centers and Goldman Sachs showed overall same-store sales fell 5 percent in July compared with the year-ago period.
"The consumer is stressed and depressed," said Ken Perkins, president of retail consulting firm Retail Metrics. "Back-to-school shopping season is going to be very late."

Worries about job security, retirement accounts and home values have made consumers focus on necessities like food and other basics. But stores are also grappling with a newly adopted frugality as consumers — even those that have jobs and feel secure about their assets — learn how to save and stick to a budget. That fixation on frugality is likely to linger even after economic worries dissipate.

Michael Dart, a retail strategist and leader of private equity practice for consulting firm Kurt Salmon Associates, believes that based on what he’s been hearing from consumers, some of those purchases may even double up as Christmas gifts as shoppers remain tight-fisted. "Shoppers are becoming much more practical," Dart said.

The bargain-hunting played out again in the retailers’ reports, with mall-based apparel stores faring the worst cheap credit report. Among the disappointments were Macy’s Inc. and teen retailers Abercrombie & Fitch Co. and Wet Seal Inc.

The few bright spots were apparel discounters like Ross Stores Inc., and TJX Cos., operator of the T.J. Maxx and Marshalls chains, both of which reported sales gains — a rarity right now — that well exceeded Wall Street estimates.

A number of special factors also depressed July’s sales results. Lean inventories left fewer clearance options for bargain hunters, as stores wanted to protect themselves from getting stuck with piles of leftovers. And NPD Group Inc. chief retail industry analyst Marshal Cohen fears that lean back-to-school inventories, particularly at department stores, could stall sales this fall — if shoppers can’t find what they want.

The shift of the sales-tax holidays from July to August in most of the 14 states that have them because of a late Labor Day weekend also stole momentum from July.

Perkins and other analysts have also noted that the uptick in car buying spurred by the cash-for-clunkers" program might siphon sales from other categories like clothing and home furnishings. That could hurt back-to-school shopping as consumers shift available cash to car payments.

Merchants are seeing indications that sales decreases are easing. However, retail sales remain weak even amid signs of economic stabilization, including signs of life in the real estate market. One big factor has been job security. When the Labor Department releases its monthly jobs report today, economists expect it to show unemployment ticked up to 9.6 percent in July, close to its post-World War II high.

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Royal Dutch Shell Plc posted a 70 percent fall in net profit in the second quarter, as oil prices and refining margins tumbled, but foreign exchange gains helped the oil major beat forecasts.

The world’s second-largest non government-controlled oil company by market value said on Thursday second-quarter current cost of supply (CCS) net income, which strips out unrealized gains or losses related to changes in the value of fuel inventories, was $2.34 billion.

Excluding one-off items, the result was $3.15 billion, compared with an average forecast of $2.55 billion in a Reuters poll of eight analysts.

“Blow-out numbers considering the environment. This is a big positive,” said Jason Kenney, oil analyst at ING.

Chief Executive Peter Voser, who took office earlier this month, gave a somber outlook for energy demand and prices, and promised to adapt to the tough environment by slashing costs.

“We are not banking on a quick recovery,” Voser said in a statement business

SUDBURY – Union workers at Vale Inco’s huge nickel mine here rejected the company’s final contract offer and were going on strike at midnight, the United Steelworkers union said yesterday.

Negotiations between Vale Inco – the nickel mining and processing division of Brazil’s Companhia Vale do Rio Doce – and its union broke down last week as the two sides failed to agree on bonuses, pensions and other issues.

Members of the USW’s Local 6500 voted overwhelmingly to reject the company’s contract offer. The local represents about 3,300 workers at the site, which is one of the world’s largest nickel mines.

"Our members have negotiated forward-looking and long-term contracts that have been positive for our members, the community and the company," Wayne Fraser a member of the union’s bargaining committee, said in a statement. "It’s just wrong that Vale is now trying to eliminate all that."

Eighty five per cent of the miners who voted rejected the company’s proposal, the union said.

"We find the results unfortunate and disappointing but not entirely surprising," said Vale Inco spokesman Cory McPhee, adding that there were no immediate plans to return to the bargaining table fast cash advance.

The union has urged the company to return for talks.

Miners at the company’s Voisey’s Bay nickel-copper operations already have voted to authorize a strike, which likely will take effect by the end of July.

Strikes at both sites would likely have a limited impact initially, as most of their operations have been halted through the end of July because of weak nickel demand.

The two mines are among the 10 largest nickel-producing mines in the world.

Analysts say the strikes will not have much of an effect on the price of nickel – a metal often used in the manufacture of stainless steel and cast iron – because the economic slowdown has caused an oversupply in global markets.

CVRD acquired the Canadian operations through its acquisition of Inco in 2006.

CVRD chief executive Roger Agnelli recently told media in Brazil that Sudbury is the company’s highest-cost operation and is not sustainable.

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Argentine President Cristina Fernandez de Kirchner’s first showdown with the opposition- controlled congress may be over inflation data.

The ruling coalition plans to propose changes to the National Statistics Institute two years after Fernandez’s predecessor, her husband Nestor Kirchner, sparked data-rigging allegations from statisticians by putting a political appointee in charge of inflation figures.

Fernandez is seeking to shore up support after her coalition, weakened by the inflation-underreporting speculation and an economic slump, lost its congressional majority in June 28 elections, said Carlos Fara, director of pollster Carlos Fara & Asociados in Buenos Aires. Fernandez will likely pursue changes that fall short of the overhaul that the opposition demands, including making the institute independent of the executive branch, Fara said.

The government will push for a reform that will “create the sensation of change but that will have nothing to do with the changes that the society has been asking for,” said Fara, whose company has tracked Argentine politics since 1991.

Fernandez’s post-election cabinet reshuffle, in which she picked officials from within her government to take over key posts such as economy minister, indicates she doesn’t plan a “large reform,” said Rafael de la Fuente, a senior Latin America economist at BNP Paribas in New York. He said the government may try to pass a reform before the new legislators take office in December.

San Luis Province

Annual inflation in South America’s second-largest economy slowed to 5.5 percent in May, the lowest rate in four years, according to the institute, known as Indec. Alejandro Cuadrado, an economist at Banc of America Corp. in New York, estimates the actual rate is about triple that at 15 percent. Indec is scheduled to release June figures tomorrow.

The national inflation rate has decoupled with the rate in the western province of San Luis. Consumer prices rose 14.4 percent in San Luis in the 12 months through May, according to the province’s data. In December 2006, several weeks before Kirchner handpicked a new consumer price chief at Indec, inflation in San Luis was below the national rate — 8 percent compared with 9.8 percent.

“Indec has to be normalized to regain credibility,” Senator Elena Corregido, a member of the ruling coalition, said in a telephone interview.

CPI-Linked Bonds

Fixing the data may be expensive.

The government’s peso-denominated bonds linked to inflation totaled $53 billion in December, meaning each additional percentage point of inflation would swell the debt’s principal by about $530 million easy payday loans. The inflation-linked debt accounted for almost 40 percent of the government’s overall debt of $146 billion, according to the Finance Secretariat.

The yield on the government’s inflation-linked bonds due in 2033 surged to 14.86 percent on July 10 from 5.3 percent in February 2007, the month Indec statisticians began complaining that Kirchner’s appointee had them eliminate some details from the index.

“Investors pushed these bonds aside after the problems with Indec emerged,” said Javier Salvucci, a fixed-income analyst at Silver Cloud Advisors in Buenos Aires.

Fernandez, like her husband, has maintained since taking office in December 2007 that the figures are reliable. Alfredo Scoccimarro, a spokesman at the Presidential Palace, said he has no information on planned changes to Indec.

‘Deep Changes’

Fernandez’s congressional backers will initiate debate on the matter in coming weeks, said a spokesman for the coalition’s lower house bloc, who asked not to be identified in accordance with the party’s policies. He declined to say what the proposed changes may look like.

Corregido, the ruling coalition senator, said she wants reforms that ensure Indec — which also reports gross domestic product, unemployment and trade figures — awards promotions based on merit and skill tests.

That may not be enough for opposition lawmakers such as Adrian Perez, who heads the Civic Coalition party in the lower house. He says he wants to make the institute autonomous from the government so the president can’t handpick officials.

“It’s good that the government finally agrees to discuss this issue,” Perez said in a telephone interview. “But we want deep changes, not just cosmetic ones.”

Markets Last Week

Last week, the yield on Argentina’s benchmark 8.28 percent dollar bonds due in 2033 rose seven basis points, or 0.07 percentage point, to 15.77 percent, according to Bloomberg data. The bond’s price slid 0.25 cents to 51.5 cents on the dollar.

The Buenos Aires benchmark Merval stock index fell 6.4 percent to 1,477.84. The local listing of Brazil’s state-run oil company Petroleo Brasileiro SA (APBR AF) fell 9.8 percent, while energy holding company Pampa Energia SA (PAMP AF) dropped 9.4 percent.

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