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You might be surprised to learn who’s following you on Twitter, or who your Facebook friends really are.

As the popularity of social networking spreads, law enforcement agencies are tapping into these sites to nab criminals, tax evaders and other wrongdoers, and gather evidence to support their cases.

"People don’t think [authorities] are going to go that far, but little do they know, they are going this far," said David Seltzer, a criminal and cyber crime defense lawyer.

In several of Seltzer’s cases, law enforcement agents created a false profile on MySpace and "friended" a suspect or a suspect’s friends in an attempt to retrieve information they needed for an investigation.

"I always tell my clients, if you have any social media pages, take them down, because as soon as something happens, agencies will start Googling your name," Seltzer said.

Last month, digital rights advocacy group the Electronic Frontier Foundation (EFF) obtained internal documents from the Justice Department and the IRS showing the ways in which social networking is used during investigations.

For example, an internal Justice Department presentation explained to employees that using social networking in criminal cases can reveal a suspect’s communications or whereabouts, establish motives and personal relationships and prove or disprove alibis.

As long as the information is public on sites like Facebook, LinkedIn and MySpace, it’s fair game for law enforcement. The Department of Justice can also take legal measures to retrieve private data from the site owners, according to the presentation.

Going undercover

"We will continue to use publicly available information individuals post online about their illegal activities or false statements to law enforcement officials in our investigations," a spokeswoman for the Department of Justice said. In addition to accessing public information through social media, the Justice Department document explains how going undercover online allows agents to communicate with suspects and targets, gain access to private information and map social relationships and networks.

But in order to do so, they need cooperation from the sites.

A spokeswoman for MySpace said the site has created a law enforcement guide and has developed a 24/7 hotline and e-mail account to assist law enforcement investigations. The company also provides training for cyber crime units on how to investigate and prosecute cyber criminals using MySpace.

The DOJ said in its presentation that MySpace often has public profiles but that it requires a search warrant to view private messages less than 181 days old.

"Ultimately everything we do revolves around two things," a MySpace spokeswoman said. "Making sure law enforcement gets the information they need in a way that complies with all laws in order to be admissible in court, and protecting the privacy of users from unauthorized exposure."

Facebook rarely allows for emergency exemptions from privacy laws and will fight requests it believes violate the law, according to a spokesman for the company.

"One hypothetical is a kidnapped child where every minute counts," he said. "It is in this type of instance where we have verified an emergency that we feel a responsibility to quickly share information that could save someone’s life."

Even in this example, however, the spokesman said Facebook would share the minimum amount of information, such as whether a user has logged in to his or her account.

IRS nabbing taxpayers

Twitter is less cooperative. While most content on Twitter is public and private messages are kept until users delete them, the site doesn’t require contact information, so users are tough to identify. And the site will only turn over information in response to legal process, according to the DOJ presentation. The IRS also uses social media sites like Facebook, Twitter, LinkedIn, YouTube and even Google Street View to investigate taxpayers.

While the Department of Justice acknowledges going undercover online, the IRS prohibits employees from misrepresenting their identities to obtain information on social media sites.

But IRS agents are allowed to use information they find about an individual taxpayer or business if it is made publicly available on a social networking site.

For example, the IRS explained that Google (GOOG, Fortune 500) Street View can be helpful to view properties.

Invasion of privacy?

"It’s presumably just a really cheap way to see what someone’s house looks like," said Shane Witnov, a student at the Samuelson Law, Technology & Public Policy Clinic, who worked with EFF to obtain this information. "If someone says their house is worth $100,000 and the IRS looks at it on Google Street View and it’s a mansion, they could probably question that claim."The Electronic Frontier Foundation questions the extent to which federal agencies should be able to use social media without crossing the line of legality and privacy invasion.

"The documents basically confirmed what we knew, that social networks are being used to collect information for investigations," said Witnov. "But we’re still trying to find out the scope of their use and what sort of oversight is in place to limit it, since it could be a potential invasion of privacy."

Witnov says that in some cases, authorities may be overstepping their boundaries, especially when creating false profiles and online identities to collect information.

"Law enforcement is allowed to lie, but some things seem to be crossing the line," he said. "We want more specific guidelines to make sure they’re not abusing their power." 

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Who’s going to win this year’s NCAA men’s basketball tournament? Your guess is as good as ours. Probably better, actually.

But here’s one March Madness guarantee you can count on: the wildly popular tournament is going to generate tons of cash for the NCAA. And that’s why an expanded tournament is likely, possibly as soon as next year.

The 65-team tournament will bring in roughly $650 million for the NCAA this year — with the vast majority of that coming from broadcast rights payments from CBS.

That money basically funds the entire operation of the National Collegiate Athletic Association, and is the financial lifeblood of many smaller schools’ athletic departments.

The big schools get most of that money. And more often than not, the more profitable programs make it to the Final Four over so-called Cinderellas. But profits aren’t a guarantee of success. There are plenty of big money schools not in this year’s tournament.

Big dollar schools staying home. North Carolina, last year’s champion, finished second to only Louisville in terms of revenue and profits for its basketball program last year according to figures filed with the Department of Education. It didn’t make the tournament this year though.

Neither did three other schools in the top 10 in basketball revenue — Illinois, Indiana and Arkansas. Still, those teams are certain to get more cash from this year’s tournament than smaller schools that made it to The Big Dance.

About $167 million of the proceeds from the tournament is split among all the NCAA conferences based on the number of games each conference’s teams played in over the last six years. That money is then typically divided evenly between members of the conference.

So North Carolina and their hated rival Duke will both see the same payday from the tournament, even if No. 1 seed Duke is the one cutting down the nets on April 5.

And because the payments are based on a six-year period, even if a Cinderella team from a smaller conference does well this year, that won’t significantly increase the payout for smaller schools.

More teams mean more dollars. That’s why it’s very likely, if not certain, that this is the last year only 65 teams will be invited to the tournament.

There’s too much potential for a lot more money if the tournament is expanded — and too many smaller schools need more of the big money.

The most discussed expansion scenario is to have a field of 96 teams. The teams ranked 1-32, which are primarily the big-dollar schools from the six major conferences, would wait while teams ranked 33 through 96 would play each other for the right to challenge the Goliaths.

The extra games would be shown on cable and on the Internet, which are the two fastest growing sources of new rights money for sports broadcasts fast payday loan.

The NCAA is expected to opt out of the last three years of an 11-year, $6 billion deal with CBS after this year’s tournament and seek a new long-term broadcast and Internet rights deal.

With more games to air in the week before the round of 64 begins, there is the likelihood of a much bigger payday, said Neal Pilson, a sports television consultant.

"I personally am not that excited about extending the tournament to 96 teams," he said. "But it likely will result in more money for the colleges. The NCAA has a fiduciary responsibility to at least find out what a new deal would be worth."

Pilson thinks Walt Disney (DIS, Fortune 500), with its combination of ABC and ESPN might be the front runner in the bidding for the NCAA. But he thinks CBS (CBS, Fortune 500) will fight hard to retain it, even if it means teaming with a cable network operator to make the bid. There are reports CBS is looking at a joint bid with Turner Sports, which like CNNMoney is a unit of Time Warner (TWX, Fortune 500).

Big win for the little guys. Who will benefit most from the additional dollars a new deal could bring? Surprisingly enough, the smaller schools.

In the current 65-team tournament, about half of the teams are from the six major conferences. But if you look at the RPI rankings of schools this year, a ranking that is widely considered to be what the tournament selection committee relies heavily upon, nearly two-thirds of the teams that could be added to a bigger tournament might come from the smaller conferences.

And since those schools would not have to play a top-ranked team in the first round, they would stand a much better chance to win at least one game. That would only help their programs and increase their future payouts.

Those small schools are far more dependent on the NCAA money than the major conference schools, which typically have their own TV deals and huge arenas.

Yes, far more of the tournament money flows to the Big East (about $27.5 million) than to the lowly Big West (about $4 million). But the Big East schools average revenue of $8.5 million and a profit of nearly $3 million annually.

By contrast, the Big West schools average just over $1 million in revenue and typically lose $80,000 each on basketball. Who do you think needs the extra money more?

So if you’re struggling to fill out a 96-team bracket this time next year, you can blame the unusual combination of big money schools and the Cinderella teams. 

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Obama administration officials urged lawmakers Tuesday to support the president’s budget, saying it will drive job growth.

Treasury Secretary Timothy Geithner, White House Director of the Office of Management and Budget Peter Orszag and Council of Economic Advisers Chairwoman Christina Romer testified before the the House Appropriations committee on the administration’s economic outlook and agenda.

In a joint written statement, the officials said that although the stimulus package has helped turn around the economy from when "the threat of a second Great Depression was frighteningly real," the 9.7% unemployment rate is "unacceptable by any metric."

Jobs. An economic forecast produced by the officials’ three offices estimates that the labor market will add 100,000 jobs per month in 2010. However, they said the unemployment rate may still rise slightly over the next few months.

The trio added that jobs will grow by 200,000 a month in 2011, bringing the unemployment rate down to 8.9%. In 2012, payrolls will improve by 250,000 jobs each month, pushing the jobless rate down to 7.9% by the fourth quarter.

In the near term, they expect to see job gains by the spring based on consistent increases in temporary employment and employers expanding the workweek. Productivity growth has also surged at the fastest pace in nearly 50 years during the last three quarters, and the officials expect more hiring to keep pace.

GDP and inflation. Geithner, Orszag and Romer said the forecast projects that gross domestic product, the broadest measure of economic activity, will tick higher by 3% in 2010, and grow 4.3% annually in 2011 and 2012.

They expect inflation to remain low, at 1% in 2010, 1 low interest rate personal loans.4% in 211 and 1.7% in 2012.

Investments. In addition to highlighting recent proposals from President Obama to spur job growth, the officials sought support for Obama’s budget policies that they said would stimulate the labor market and the broader economy.

They pushed for an overhaul of the financial system that would: limit large banks from taking risks that could threaten the whole economy; allow the government to break apart from failing firms; and give consumers better information.

On top of providing $19 billion for job training and other employment initiatives, Geithner, Orszag and Romer said the budget proposes to extend a $2,500 per year tax credit for college costs and assist student loan borrowers with repayment plans.

The budget will also increase research and development by 6.4% and reallocate funding from NASA’s Constellation program to research on climate and global change and and science education.

The budget will also extend funding for clean-energy initiatives, infrastructure and to increase exports of goods produced by small businesses.

Deficit. The officials said the budget also proposes to reduce the government’s deficit by $1.2 trillion over the next decade through several measures, including requiring Wall Street firms to repay the costs of the bailout programs and allowing some tax cuts aimed at households earning more than $250,0000 annually to expire.

Comprehensive health care reform would also lower the deficit, they said.  

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Growth in the number of people tweeting and friending from their mobile devices is keeping pace with increases in subscribers to social networks.

A new study by comScore shows that 4.7 million people accessed Twitter on their mobile phones in January 2010, up 347 percent jump compared to last year.

The number of Facebook users going to the site on their mobiles hit 25.1 million, up 112 percent.

MySpace's numbers actually declined 7 percent from last year, with 11.4 million mobile users free credit report.

Those numbers compare with an overall increase of 4.6 percent in the number of mobile phone users who accessed a social networking site via mobile browser.

ComScore said that In January, 11.1 percent of all mobile phone users went to social networks on their mobiles.

Smartphone owners were far more likely to do so compared to other cell phone users, 30.8 percent vs. 6.8 percent .

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Wednesday marks the one-year anniversary of the stimulus bill, and from here on out the pace of spending should pick up, according to administration officials.

The federal government expects to spend more money on projects — such as high-speed rail — rather than payments to states and individuals, according to Vice President Joe Biden, who released his annual stimulus progress report Wednesday.

On Feb. 17, 2009, Congress passed a $787 billion economic stimulus program — the largest in the nation’s history — and it has elicited both praise and scorn.

The White House is mounting an all-out campaign this week to tout the benefits of the Recovery Act, saying the package has largely lived up to its promises of stemming job losses and boosting economic growth. Administration officials are touring the nation to highlight stimulus-funded work and detailing where the money has been spent in the past 12 months.

Through the end of January, some $334 billion in spending has been approved, of which $179 billion has actually left federal coffers. Another $119 billion has gone to tax cuts.

"Our work is far from over, but we have rescued this economy from the worst of this crisis," said President Obama on Wednesday, though he noted many Americans may not feel the Recovery Act’s impact because they remain unemployed.

Detractors, however, counter that stimulus has been a waste of money and produced few jobs. And few Americans believe the stimulus program is really working. Only 36% of respondents said the Recovery Act is helping the economy, according to a recent CNN poll.

"In the first year of the trillion-dollar stimulus, Americans have lost millions of jobs, the unemployment rate continues to hover near 10%, the deficit continues to soar and we’re inundated with stories of waste, fraud and abuse," said Senate Minority Leader Mitch McConnell, R-Ky. "This was not the plan Americans asked for or the results they were promised."

Shifting the mix

In the coming months, the pace and mix of spending will change, senior administration officials said. Until this point, the bulk of the spending has been on tax relief and direct aid — such as unemployment benefits — in order to stop the economic freefall.

Going forward, the government will distribute $32 billion in Recovery Act funds per month, up from an average $27 billion a month over the past year, according to Biden’s annual report.

To date, only $31 billion has been spent on projects — such as infrastructure, high-speed rail, broadband and health technology. But in the second phase of the act, the amount of money going to these initiatives will more than double to $7 billion a month as the work ramps up. The administration views this spending as setting the stage for a lasting expansion.

"Many projects are just now getting underway, and will be creating jobs throughout 2010 and beyond," said Biden, noting that the administration will announce an additional $1.5 billion of surface transportation projects Wednesday. "Work on many Recovery Act projects will accelerate in the spring and summer months as weather conditions permit work on roads, bridges, water projects, and Superfund site clean ups."

Payments to states and individuals will fall to $11 billion, from $14 billion, per month. Much of this spending — such as Medicaid funding and additional unemployment benefits — was meant to stabilize the economy during the recession.

The administration will reach its goal to disburse 70% of the Recovery Act funds, or $551 billion, by Sept. 30, senior administration officials said.

The Congressional Budget Office recently hiked the cost estimate of the Recovery Act to $862 billion, though the administration still uses the original $787 billion figure.

Shortcomings highlighted

Republicans, however, were quick to point out stimulus’ shortcomings, stressing the nation’s stubbornly high unemployment rate, which stands at 9.7%.

"Taxpayers aren’t getting their money’s worth from the trillion-dollar ’stimulus’ and struggling families and small businesses are rightly asking, ‘Where are the jobs?’," said Rep. John Boehner, R-Ohio, the House’s top Republican.

Republican Whip Rep. Eric Cantor, R-Va., said states have lost a total of 2.9 million jobs between the bill’s enactment last February through December, though the administration projected stimulus would save or create 3.5 million positions.

In the final quarter of last year, the Recovery Act funded 595,263 direct jobs, according to Recovery.gov. The figure is based on about 160,000 reports from state, local and corporate recipients who have spent $57.9 billion in stimulus money.

It does not tally jobs created indirectly through companies buying supplies for stimulus projects, people spending their tax cuts, increased unemployment benefits and the like.

In total, the economic stimulus program has boosted employment by 1.5 million to 2 million jobs, the president’s chief economic adviser said in mid-January. That number is derived from a mathematical formula based on how much money has flowed out the federal door.

A week ago, the president’s top economic adviser praised the Recovery Act, calling it the "great unsung hero of the past year." Council of Economic Advisers Chair Christina Romer reiterated that the program has funded up to 2 million jobs and helped turn the economy around. 

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China property sales jumped 75.5 percent to 4.4 trillion yuan ($644 billion) last year, led by the eastern cities of Zhejiang and Shanghai, as record new loans boosted buying.

The sales data follows last week’s announcement that December property prices rose 7.8 percent, the fastest pace in 18 months, adding urgency to government efforts to rein in speculation. China this month reimposed a sales tax on homes sold within five years of their purchase while the country’s cabinet on Jan. 10 urged strict application of a 40 percent down-payment requirement for second homes. The measures are likely to weigh on first-quarter sales, economist Lu Ting said.

‘We will see very bad transaction numbers, even though prices may not fall that much as the supply of new homes is still low,” Lu, a Hong Kong-based economist at Bank of America- Merrill Lynch, said by phone today. Today’s data more accurately reflect last year’s gain in asset values, he said

By floor area, sales rose 42 percent from 2008 to 937 million square meters (10 billion square feet), the National Bureau of Statistics said in a statement on its Web site today. That compares with a 53 percent gain between January and November, when sales value advanced 86.8 percent. December’s declining sales growth reflects the seasonally slow winter period, Lu said.

The December figure for property prices probably understated the size of the increase, the economist said. “In reality, the inflation in asset prices may be between 20 percent and 30 percent, and that is way too high for the policy- makers,” Lu said.

Shanghai Gain

Zhejiang topped the increase in sales value, with a 130 percent gain, the statistics bureau said today. In Shanghai, the gain was 126 percent.

Investment in property development in 2009 rose 16.1 percent to 3.62 trillion yuan, the statistics bureau said. That was less than the 17.8 percent gain in the first 11 months. Chinese banks extended a record 9.59 trillion yuan of new loans last year.

To counter property speculation, China is tightening lending. Chinese banks from Jan. 18 raised the share of deposits they must set aside as reserves, as the government seeks to rein in liquidity from record lending without stalling a recovery. China is targeting 8 percent growth this year, Industry Minister Li Yizhong said Dec. 21.

Developers Sales Surge

Shanghai Shimao Co., the local unit of billionaire Xu Rongmao’s developer Shimao Holdings Holdings Ltd., said today that 2009 profit may quadruple, partly due to higher sales from additional commercial property projects.

Earlier this month, some of China’s biggest developers said 2009 sales increased significantly.

China Overseas Land & Investment Ltd., owned by the country’s construction ministry, said property sales rose 80 percent to HK$47.8 billion. Evergrande Real Estate Group Ltd., China’s third-biggest developer by market value, said Jan. 5 that contracted sales jumped fivefold to 30.3 billion yuan.

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Oil prices rose above $79 a barrel Monday for the first time in four weeks as an extended cold snap triggered an end-of-year rally in energy futures.

Benchmark crude for February delivery added 72 cents to settle at $78.77 a barrel in light, holiday trading on the New York Mercantile Exchange. Prices rose as high as $79.12 earlier in the day, the highest since Nov. 18.

Futures contracts for oil, natural gas and heating oil have all become more expensive this month as snowstorms blanketed parts of the country and a sharp drop in supplies of crude and other fuels surprised traders.

More frigid temperatures are expected, with up to 4 inches of snow forecast for New England, and up to 7 inches of snow along the eastern shores of the Lower Great Lakes.

Spot prices are starting to perk up as a result.

According to the latest data from the Energy Information Administration, natural gas prices jumped earlier in December to the highest levels since January, and heating oil prices climbed during the middle of this month.

Still, the winter chill hasn’t boosted energy demand above last year’s levels. The U.S. is consuming less petroleum than it did at the same time last year, when oil and gas prices were cheaper and the economy was in recession.

American refiners have cut back on oil imports, which has helped reduce supplies and increase prices. But analyst Andrew Lipow said that oil prices also are rising as China and India expand their petroleum imports.

"That oil is finding a buyer somewhere," Lipow said.

At the pump, retail gas prices rose by less then a penny overnight to a new national average of $2.603 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Gas prices have edged up for three consecutive days, albeit slowly, for the first time since the beginning of the month. A gallon of regular unleaded is 2.4 cents cheaper than last month.

In other Nymex trading in January contracts, heating oil climbed 3.79 cents to settle at $2.0735 a gallon while gasoline added 2.88 cents to settle at $2.0184 a gallon. Natural gas increased by 34.7 cents to settle at $5.99 per 1,000 cubic feet.

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One year after he was restructured out of the telecom sector and into unemployment, Bruce Bracken got a full-time job again.

His ordeal started in November 2008, as Canada’s unemployment rate began to rise. It ended in November 2009, when Bracken got one of the 79,100 new jobs Statistics Canada said was created last month across the country, with Toronto and Ontario leading the surge.

The remarkable growth, which one analyst called "stunning," dropped the national unemployment rate down a notch to 8.5 per cent, the federal agency said on Friday, though many predict this number will rise in 2010.

During his year working contracts, spending time with his two children, and volunteering with Habitat For Humanity, Bracken heard it all, including: "If we could hire two, we would hire you."

"I got a lot of silver medals," joked Bracken, 45, from the office of his new employer, Toronto-based Upstream Works Software.

His company’s decision was part of a surge in private sector hiring across the county, which saw 27,000 jobs created in Ontario – 21,000 of them in Toronto.

The bulk of Canada’s new jobs were created in the services sector, the agency said.

"It’s certainly encouraging, an economy can’t live off the government alone," said Avery Shenfeld, chief economist at CIBC World Markets, referring to the government stimulus projects that will likely not last through the next year.

He also cautioned monthly statistics such as these can be misleading and that multiple-month analysis is more accurate. Shenfeld said that after July, Canada has gained a steady 25,000 jobs per month.

By anyone’s calculation, November’s job growth is nowhere close to employing all those who lost jobs during the entire recession.

The country has lost 321,000 jobs since October 2008 payday loans for self employed.

And by Statistics Canada’s calculations, even Ontario’s strong growth was not enough to dent the province’s 9.3 per cent unemployment rate.

Toronto managed to shave 0.1 per cent off its higher unemployment rate, bringing it to 9.5 per cent.

In Ottawa, Transport Minister John Baird said the federal government is pleased with the numbers, but added: "We can’t, you know, pop the champagne corks."

The majority of these jobs – more than 73,000 of them across the country – were in Ontario, Quebec and Alberta, and were mainly in the service sector, particularly education services.

However, this latter point could be what Shenfeld calls "statistical noise," or could reflect one of two things: either this is pickup from September’s academic hiring or it’s hiring to handle the surge of students fleeing the recession in postgraduate studies.

Full-time jobs increased by 39,000 and part-time unemployment grew by more than 40,000, all while the number of the self-employed dropped – which analysts said was positive, considering the self-employed are not as well paid.

On Dec. 1, Statistics Canada recorded third-quarter GDP growth of 0.1 per cent – 0.4 per cent at the annualized rate – which effectively put an end to the recession.

A recession is defined by at least two consecutive quarters of GDP decline.

In September, the Organization for Economic Co-Operation and Development said Canada’s unemployment would only worsen throughout 2010.

With files from Susan Delacourt

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The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed “short sales” of homes and other loan modification alternatives to stem a rising tide of foreclosures.

The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury’s website.

Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.

The incentives, first announced in May, expand on the government’s Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.

“While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve” or offer a modification, the Treasury said in its announcement.

Financial incentives for completing short sales or similar deed-in-lieu transactions — in which the deed is simply transferred to the lender — include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.

Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower’s credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.

But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.

Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.

It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.

In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.

Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.

The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.

Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.

“If there was a short sale program that didn’t recognize the second lien holder position, it could have pretty damaging consequences for the industry,” Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.

(Editing by Leslie Adler)

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Perhaps Barack Obama’s trip to China this month was not such a flop after all.

Obama was criticized for kowtowing to the Chinese and apparently returning empty-handed, but movement from Beijing last week on Iran’s nuclear program and climate change suggests the U.S. president got further than it seemed at first.

Obama went to China with three major issues on the table — economic relations, climate change and denuclearization — and seems to have made progress on at least two of them.

But analysts said it was unclear exactly how much the U.S. leader had actually influenced the Chinese, or what the long-term impact would be of what was announced last week.

“The Chinese were pressed in a very focused fashion on both of those issues,” said Kenneth Lieberthal, director of the John L. Thornton China Center at the Brookings Institution in Washington.

“I think their position does reflect, in fact, the impact of the Obama visit and of American diplomacy,” he said.

China offered rare backing on Friday to a vote by the U.N. nuclear watchdog to rebuke Iran for building a uranium enrichment plant in secret, the first such vote against Tehran in almost four years.

China, like Russia, backed the measure, smoothing its 25-3 passage through the International Atomic Energy Agency and departing from an earlier pattern of blocking global attempts to isolate trading partner Iran.

Obama stressed in Beijing that Iran’s nuclear program could disrupt the Middle East and world energy supplies, experts and administration officials said.

The Washington Post reported that U.S. officials had argued that Israel saw Iran’s nuclear ambitions as an existential threat, and implied Israel could one day attack Iran to disrupt those ambitions. That argument helped bring the Chinese on board to take a firmer line on Tehran, it reported.

“Obama pressed very hard with the Chinese,” Lieberthal said. “And they went the right way today.”

On Thursday, Beijing said Premier Wen Jiabao would go to U.N.-led climate talks in Copenhagen next month and offered its first firm carbon intensity target, pledging to cut the amount of carbon dioxide produced for each yuan of national income by 40-45 percent by 2020, compared with 2005 levels.

‘THESE THINGS ARE INCREMENTAL’

Washington gave only a guarded welcome to China’s emissions announcement, saying the world would watch progress by the top greenhouse gas emitter. Observers said measuring and verifying implementation would be central going forward.

Bonnie Glaser, a China expert and senior fellow at the Center for Strategic and International Studies in Washington, said China’s 40-45 percent reduction target was disappointing, but it was a good sign that they made an announcement at all. 

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