Health care spending growth is at a record low. Here's the catch.

NEW YORK (CNNMoney)

What's less clear is why -- the weak economy or cost-control measures, including the earliest provisions of the Affordable Care Act. Since health care spending is a major driver of the federal deficit, that's a pretty critical question.

The experts at the Kaiser Family Foundation and Altarum Institute are among the first to tease out how much each factor contributed to the slowdown. Their conclusion: about three-quarters is due to the lackluster economy. The rest stems from efforts to keep spending down, including measures introduced in the 2010 "Obamacare" law.

America's national health care spending grew by 3.9% each year from 2009 to 2011, the lowest rate since the federal government began keeping these records in 1960. That slow growth appears to have continued into 2012, when expenditures totaled an estimated $2.8 trillion.

The biggest driver of the slowdown is that people spend less on health care in weak economic times, said Larry Levitt, senior vice president at Kaiser. Those who lose their jobs often lose coverage and hold off on seeing the doctor, and even workers with company-sponsored plans may still face large out-of-pocket costs that they'd rather avoid unless absolutely necessary.

"When people feel less secure, they are more hesitant to use the health care system," Levitt said.

Companies have tried to curb their spending, too, by raising deductibles and co-pays, as well moving toward high-deductible plans, through which enrollees must typically spend a few thousand dollars before coverage kicks in. A growing number of companies have also instituted disease management or wellness efforts that aim to cut costs by keeping workers healthier.

Related story: A doctor says 'I gave up on health care in America'

Most of Obamacare's provisions have yet to be implemented, but some of the early ones are already having an effect, Levitt said. Insurance companies, hospitals and other providers are seeing smaller payment increases, while insurers are limited in what they can spend on administrative costs and must submit any premium increases of more than 10% for review by state or federal experts.

Here's the catch: This dampened spending pattern is unlikely to last much longer. As the economy picks up, health care spending is expected to increase, rising to an annual growth rate of more than 7% annually by the end of the decade, Kaiser predicts. As their finances get better, Americans are likely to return to their more typical patterns of visiting doctors, getting tests done and the like.

New spending control measures, including Obamacare, may temper that looming increase. Further trimming of provider rate hikes, along with additional efforts to coordinate care and pay providers fixed rates for treating a given illness instead of paying per individual test or treatment, may also help, Levitt said.

The fact that Obamacare's early provisions have already had an impact is an encouraging sign, said Josh Gordon, policy director at the Concord Coalition.

"It shows policy levers can be pulled to slow health care spending down," he said.

First Published: April 29, 2013: 5:58 AM ET

23.10 | 0 komentar | Read More

Income, spending both up

Spending and income both rose in March.

NEW YORK (CNNMoney)

The Commerce Department reported that income rose at a 0.2% rate in the month, slower than a 1.1% rise in February. Spending also grew at a 0.2% rate, down from the 0.7% increase the previous month.

The February income reading had been distorted by some unique events the previous two months. Some companies moved up dividend and bonus payments normally made in January to the end of 2012 so the recipients wouldn't be hit with a rise in taxes set to take place on Jan. 1.

Related: US economy revved up, but it's probably temporary

That caused a big increase in the income numbers in December, followed by a sharp drop in January and a rebound to more normal levels in February. So the March reading was the first in several months not to have the month-to-month change be distorted by the one-time event.

Some economists had forecast a drop in the pace of spending in the face of federal spending cuts and furloughs of some federal workers known as the sequester.

First Published: April 29, 2013: 8:55 AM ET

23.10 | 0 komentar | Read More

Stocks: Starting week on a high note

Click on chart to track premarkets

NEW YORK (CNNMoney)

Expectations of a further rate cut from the European Central Bank and continued monetary support from the Federal Reserve later this week gave additional support to the market.

"The ECB meeting may be the most interesting event this week," wrote Marc Chandler, strategist for Brown Brothers Harriman. "The ECB indicated earlier this month that if economic data worsened, it was prepared to cut the refi rate."

U.S. stock futures were higher Monday.

Investors mulled reports on U.S. personal income and spending, which both rose 0.2% in March, according to the government. Personal income was expected to have increased 0.4% last month and personal spending was expected to have slipped 0.1%, according to a consensus of economist forecasts compiled by Briefing.com.

On Friday, the government reported that the U.S. economy grew at an annual pace of 2.5% in the first quarter.

Stocks are on track to end April with gains this week, which would mark the fourth straight month of gains this year.

Consumer spending, which alone accounts for roughly two-thirds of GDP, rose at a 3.2% annual pace, the fastest pace since the end of 2010. But the data also shows that consumers funded that spending in part by saving less.

At 10 a.m. ET, the National Association of Realtors will release data on pending home sales.

Related: Fear & Greed Index, idling in neutral

In corporate news, controversial supplements company Herbalife (HLF) and gun maker Sturm Ruger (RGR) are set to release their quarterly results after the close. Ruger's stock rose in premarket trading.

JPMorgan Chase (JPM, Fortune 500) announced Sunday that another of CEO Jamie Dimon's key executives, co-chief operating officer Frank Bisignano, is leaving the firm and will be replaced by Matt Zames.

U.S. stocks finished mixed Friday.

European markets were higher in morning trading after Enrico Letta was sworn in as Italy's prime minister, ending weeks of political deadlock and uncertainty in a country mired by recession.

Related: World's five hottest stock markets

Greek lawmakers agreed to cut thousands of government jobs to secure another $11.5 billion in bailout funds.

Markets in Hong Kong added 0.1%. Exchanges in Shanghai and Tokyo were closed for a holiday.

First Published: April 29, 2013: 5:19 AM ET

23.10 | 0 komentar | Read More

Spending cut bright spot: Fewer IRS audits

NEW YORK (CNNMoney)

The cuts, known as the sequester, will wipe $600 million from the IRS's budget this year, forcing the agency's nearly 100,000 employees to be furloughed without pay for up to seven days.

Five furlough days have been identified so far -- beginning on May 24 and they will be spread out among separate pay periods, according to the National Treasury Employees Union.

Not only will these furloughs shrink paychecks for IRS workers, but they will also make it harder for taxpayers to receive the assistance they need and enforcement efforts will be significantly reduced as well, IRS Acting Commissioner Steve Miller said in congressional testimony earlier this month.

Related: Spending cuts -- Reality of furloughs hits home

"[W]ithout a change in the current budget environment, the American people will see erosion in our ability to serve them, and the Federal government will see fewer receipts from our enforcement activities," he said.

Translation for taxpayers: you're less likely to be audited, said Mark W. Everson, vice chairman of tax service firm alliantgroup and former head of the IRS.

"Of course this has an impact on the number of audits," said Everson. "If you have someone working on 20 audits, if they're not working as many days it's going to take longer to finish those and they're not starting new ones."

Related: How to survive a tax audit

The irony is that by limiting audits, the sequestration is limiting the revenue that flows into the government's coffers, he said.

Audits have already been on the decline due to budget cuts at the IRS over the last few years. Last year, for example, the number of audits dropped by 5% to about 1.5 million.

Your odds of being audited still rise significantly with the more income you have, however. While the overall chance of being audited is 1%, those odds jump to 18% for people with income of $5 million or more and 27% for taxpayers earning $10 million or more.

Related: 12 tax audit red flags

And if you do get audited, don't think the IRS is going to be lax just because it's squeezed on resources.

"The [IRS] won't start [as many] new audits, but I think it will be equally rigorous in the ones it conducts, so don't think that they won't be as thorough as they once were," said Everson.

First Published: April 29, 2013: 6:02 AM ET

23.10 | 0 komentar | Read More

Legal marijuana's all-cash business and secret banking

SEATTLE (CNNMoney)

Banks and credit card companies are staying away from marijuana businesses, forcing growers and sellers to deal mostly in cash. In response, when pot businesses deal with banks, it's usually in disguise.

That's just one byproduct of the nation's mismatched drug laws.

Washington State has long allowed for medical marijuana, and it legalized pot for recreational use last year. But financial institutions still face intense pressure from federal authorities, because pot is illegal under the nation's Controlled Substances Act. Banks that deal with cannabis businesses open themselves up to accusations of money laundering, so they avoid it altogether.

Related: Is marijuana legal or not?

But forcing businesses into cash-only transactions brings about all sorts of problems -- it undermines the state's efforts to tax the industry and creates security risks at stores.

The Northwest Patient Resource Center, a Seattle store that grows and sells cannabis, ran into its first hardship last year when it could no longer process customers' credit cards. Davis, the center's CEO, said American Express and Discover dropped him in the fall. Visa and Mastercard soon followed.

Davis resorted to buying his own ATM machine. Every night, he refills it with a few thousand dollars of his own cash. He deposits the rest at his bank the next day. The practice makes Davis uneasy.

"The more cash you have sitting around, the more of a target you are," he said.

Last September, he received a letter from his bank -- which he prefers to not name -- that made matters worse: "After a thorough assessment and evaluation, it is with deep regret that [we] will cease offering banking services for medical marijuana/cannabis businesses and/or facilities," it read.

Davis hasn't banked openly ever since.

To create distance between him and the pot business, he started an unrelated holding company.

More than a dozen interviews with dispensaries and growers in Washington show this kind of secret banking is a common practice.

CNNMoney asked the nation's largest retail banks with operations in Washington about their policies for small marijuana businesses. HSBC didn't respond. JPMorgan Chase (JPM, Fortune 500), U.S. Bancorp (USB, Fortune 500) and Wells Fargo (WFC, Fortune 500) said they don't serve the industry, citing federal law. Bank of America (BAC, Fortune 500) didn't respond but has previously stated that it turned away marijuana-related business clients after warnings from the U.S. Drug Enforcement Administration five years ago.

However, more than a dozen cannabis businesses have told CNNMoney they all keep corporate accounts at Chase, U.S. Bank and Wells Fargo, in addition to small, local banks.

Even those companies that only indirectly deal with the marijuana industry have a banking problem.

Canna Security is an alarm system provider for the industry. CEO Daniel Williams explains that all of his clients use cash, so he's forced to take his payments that way. He often shows up to his bank -- a major national bank -- holding a bag filled with $10,000.

A loan officer there once suggested Williams apply for a credit line, one he desperately needs to expand his business. The bank later got cold feet.

Williams said having the financial community turn its back on the industry "almost makes it impossible to run a proper and legitimate business."

Related: Legal marijuana's need for high security

Greta Carter has also been forced to bank in secret. Although she doesn't sell marijuana, her wellness center is wholly tied to the pot industry. It partners with dispensaries, who then offer the center's services, such as massage therapy and acupuncture.

When a major bank came by for a visit, she and others scrambled to hide any poster or drawing featuring marijuana's ubiquitous green leaf. Carter had worked at Citi (C, Fortune 500), helping develop new products, like debit cards.

"Those of us that have banking are doing it covertly," she said. "The irony is that these people are trying to come out of the shadows."

Businesses have found ways to circumvent credit card processors. Some use Square, a point-of-sale device that works on tablets and smartphones. Others use debit card machines that look like credit card terminals but function like ATMs.

For the most part, though, weed is bought with paper money. That could hinder Washington's ability to properly tax pot businesses, because the state will have a difficult time tracking sales.

Washington hopes to prevent that by controlling and closely monitoring how much marijuana is produced, said Pat Kohler, director at the state agency regulating the industry.

But the pot industry will still face considerable incentive to dodge the law.

"Forces are conspiring to keep it in the black market," Davis said.

In the meantime, he does what he can to protect himself. The Northwest pot dispensary has reinforced concrete walls, motion detectors and cameras everywhere. Teller windows are made of thick, ballistic acrylic glass. The place is built like a fortress -- which is appropriate. It's a former bank.

First Published: April 29, 2013: 9:27 AM ET

23.10 | 0 komentar | Read More

Legal marijuana's need for high security

The high value of marijuana, and the cash that businesses are forced to keep around, makes them a target for thieves.

SEATTLE (CNNMoney)

Without extensive security, a pot dispensary is nothing more than a giant target. A pound of weed goes for more than $2,000 wholesale. And federal pressure on banks forces growers and stores to rely almost entirely on cash.

A robber who swipes the jars on display alone could make away with $20,000 of product, plus whatever stacks of bills are behind the counter.

Dispensaries bulk up as much as they can.

A typical store has more than a dozen cameras, motion detectors, infrared sensors and flood lights. Some even line the ceilings with tripwire to avoid rooftop burglars sawing their way in. At most dispensaries, no one gets in without passing by three doors, showing identification and presenting a doctor's note.

But that security is hard to maintain. Some store owners who use ADT, the nation's largest security provider, say the company has dropped them in recent months. ADT told CNNMoney it won't "sell security services to businesses engaged in the marijuana industry because it is still illegal under federal law."

Related: Is marijuana legal or not?

Kevin Griffin, founder of West Coast Wellness, said ADT dropped him without warning in mid-April. He still has a silent panic alarm button Velcro-strapped beneath the front desk -- but it doesn't call anyone.

Griffin blasts ADT, saying, "They already knew what we were. We were completely transparent. It's not fair to put us in a jam and not give us any time to prepare."

The security needs create an opportunity for startups like Canna Security, a Colorado company currently expanding to Washington. It's founder, Daniel Williams, recalls the video cameras that catch footage of what pot stores and growers are up against.

There were teenagers who rammed an Audi into a warehouse, bursting through its door. They walk out having discovered that the marijuana plants they intended on stealing were actually moved elsewhere the previous day.

Then came the cat burglar who cut a hole in the roof of another marijuana warehouse and rappelled down from the rooftop. After filling a duffel bag full of the stuff, he realized the doors were locked from the outside. He couldn't climb back up to escape.

Next came the ninjas who robbed a dispensary in broad daylight then sped off on street bikes.

"We get the goofballs," Williams said.

But Williams stresses that the losses to these businesses are no joke. Demand for his services is on the rise. Williams' employees are working 12-hour shifts every day, installing cameras and alarm systems across both states.

His biggest concern is his inability to finance his company's rapid growth. Williams discovered that when his bank -- which gladly accepted his cash deposits -- recently denied him a credit line.

"I'm concerned that we'll get too much business and won't be able to manage it," he said. "It gets frustrating when I get a whole new channel of business and funding isn't there to adjust to it."

Related: Legal marijuana: An all-cash business

Meanwhile, dispensaries like West Coast Wellness have few options. For Griffin, this heightened level of risk is nothing new. It's an industry on the fringes of legality, and uncertainty is the name of the game. He reminds this reporter that he stands much to lose from robbers as from federal authorities eager to shut him down.

"They're worse than criminals," Griffin said. "They have the right to walk through the front door and take whatever they want."

First Published: April 29, 2013: 9:28 AM ET

23.10 | 0 komentar | Read More

Even when 'legal,' marijuana is risky business

Washington State legalized marijuana, but it's still illegal to the federal government. That makes growing it -- and selling it -- complicated.

SEATTLE (CNNMoney)

At the local level, pot businesses are often welcomed by politicians and sheriffs alike. Medical marijuana is legal in 18 states and the District of Columbia. Most recently, Colorado and Washington legalized it for recreational use too.

But pot is still listed in the nation's Controlled Substances Act. Federal raids of pot businesses in those states continue at feverish pace. In 2012 alone, federal agencies seized more than 2,500 indoor grow operations, killing close to 300,000 plants.

"The feds are saying one thing. The states are saying another," said Sean Cecil, a criminal defense attorney in Seattle. He is also a member of the Cannabis Defense Coalition, which raises awareness of pot laws.

The situation makes the so-called legal marijuana industry a risky one. A dispensary could be in full compliance with state laws, but the feds could still raid them.

Related: Marijuana: An all-cash business

Still, not every grower, seller and user is a federal target. Top U.S. Justice Department officials have issued two memos -- orders, essentially -- explaining how federal prosecutors are to deal with state-legalized marijuana.

One, in 2009, says U.S. attorneys shouldn't make it a priority to prosecute caregivers and seriously ill patients abiding by state laws.

"Prosecution of [patients and caregivers] in clear and unambiguous compliance with existing state law... is unlikely to be an efficient use of limited federal resources," it states.

But another memo, issued in 2011, clarified that those protections don't extend to business owners.

"Persons who are in the business of cultivating, selling or distributing marijuana, and those who knowingly facilitate such activities, are in violation of the Controlled Substances Act, regardless of state law," it says.

So, what happens to a raided business?

If a dispensary or grow farm is raided, plants are destroyed. Cash and equipment is confiscated. Business owners are jailed and often face mandatory minimum sentences of five years or more in federal prison.

Those on the periphery face dangers as well. Investors in a business could lose money they put into the operation. And banks that deal with cannabis businesses open themselves up to accusations of money laundering.

First Published: April 29, 2013: 9:28 AM ET

23.10 | 0 komentar | Read More

Italian markets cheered by new government

New Italian Prime Minister Enrico Letta wins investor approval but faces huge economic challenges.

LONDON (CNNMoney)

Center-left Prime Minister Enrico Letta was sworn in Sunday to head a broad coalition of ministers from his own party and members of Silvio Berlusconi's center-right party.

In a speech to parliament Monday, Letta stressed the need to stimulate growth and create jobs, but said Italy couldn't borrow its way out of trouble.

"After more than a decade without growth, we can't wait any longer for a policy of recovery," he said. "Without growth and without cohesion, Italy is lost."

Letta's appointment ends two months of political stalemate and removes the prospect, for now at least, of a prolonged period of instability -- despite doubts about the coalition's durability and uncertainty over how it will achieve its economic goals.

Italian markets rallied, with Milan's benchmark index gaining 2% and outperforming its European peers. The index has been the strongest of all major European markets over the past month, although it is still lagging so far this year.

Italy also sold three billion euros in 10-year bonds at a yield of 3.94%, down from nearly 4.7% a month ago and their lowest level since October 2010.

Related: If not now, when will ECB cut rates

Bonds in weaker eurozone states have been rallying for months, supported by the European Central Bank's backstop pledge last year and hyper-loose monetary policy in Japan and the United States, which has prompted investors to look for higher returns elsewhere.

"Italian sovereign debt is benefiting from the effects of central bank liquidity support and political stability of sorts," said Nicholas Spiro, managing director of Spiro Sovereign Strategy.

The eurozone's third-biggest economy was brought to the brink of collapse in late 2011 when yields on its huge debt pile climbed to unsustainable levels around 7%.

Tax increases and spending cuts by a technocrat government led by Mario Monti reassured investors. But they led to a backlash against austerity in February's elections, boosting support for comedian Beppe Grillo's protest movement and leaving no party able to form a government on its own.

Related: Austerity debate rages in Europe

Letta wants to adjust Italy's unpopular austerity drive, and Berlusconi has campaigned for a tax on property to be reversed, but it is unclear how the new government would make up for the revenue shortfall and the backdrop continues to deteriorate.

"Post-crisis sentiment toward Italy has never been better, but the economic conditions have never been worse," said Spiro.

Government borrowing totals about two trillion euros, equal to around 127% of gross domestic product, a ratio surpassed in the eurozone only by Greece. The economy hasn't grown for years, unemployment is near 12% and rising, and living standards for many are tumbling.

Letta said he would cut some taxes on the young and new employees, reform the property tax, and cancel a planned increase in the value-added tax, acknowledging that easing the austerity drive without piling on more debt would be a challenge.

"While the latest news is positive for markets, the task of the new prime minister won't be an easy one," noted UniCredit economist Loredana Federico.

The priorities for Letta's government mirror those of 87-year old Italian President Giorgio Napolitano, who was persuaded to accept a second term after parliament failed to agree on an alternative.

Napolitano established two expert committees to work on overhauling Italy's convoluted electoral system and political institutions, and making structural reforms to restore competitiveness, boost growth and make a dent in the debt mountain.

--CNN's Hada Messia contributed to this article

First Published: April 29, 2013: 8:16 AM ET

23.10 | 0 komentar | Read More

EU bans some pesticides to save its bees

Campaigners dressed as bees swarmed Parliament Square in London to show their support for a ban on pesticides that are said to hurt the bee population.

LONDON (CNNMoney)

The European Commission will roll out the ban across all 27 member states at the end of the year, after scientific studies showed that three kinds of pesticides -- clothianidin, imidacloprid and thiametoxam -- damaged the bee population.

The EU's health and consumer commissioner, Tonio Borg, said he would do everything in his power to ensure the bee population was protected, adding that bees are "vital to our ecosystem and contribute over 22 billion euros annually to European agriculture."

People dressed in bee costumes had been swarming around European capitals ahead of the decision, trying to drum up support for the restrictions.

"This decision is a significant victory for common sense and our beleaguered bee populations," said Andrew Pendleton, a campaigner at Friends of the Earth. "Restricting the use of these pesticides could be an historic milestone on the road to recovery for these crucial pollinators."

Related: Climate change will cause turbulence for airlines and passengers

Syngenta (SYT) and Bayer (BAYRY), who produce these pesticides, had been lobbying against the ban.

Syngenta's chief operating officer, John Atkin, said the ban was based on poor science and ignored evidence that the pesticides do not damage bees' health.

"Instead of banning these products, the commission should now take the opportunity to address the real reasons for bee health decline: Disease, viruses and loss of habitat and nutrition," he said in a statement.

The scientific community is still debating whether laboratory-based studies accurately demonstrate that pesticides harm the bee population in the wild. But even though some maintain that the science is inconclusive, the European Commission said it wanted to err on the side of safety.

"The science is sufficiently strong to make it worth taking certain measures now. The costs in the short term are worth it given the potential costs over the long term," said European Commission spokesman Roger Waite.

First Published: April 29, 2013: 11:40 AM ET

23.10 | 0 komentar | Read More

Wall Street lifted by Italy, housing data

Click the chart for more stock market data.

NEW YORK (CNNMoney)

Early Monday, European investors cheered the formation of a new Italian government, ending weeks of political deadlock and uncertainty in a country mired by recession.

Italian stocks rallied more than 2% after Enrico Letta was sworn in as Italy's prime minister. The news also pushed Italian bond yields to their lowest levels in more than two years.

The Dow Jones industrial average edged up 0.4% and the S&P 500 added 0.5%. The Nasdaq gained 0.8%, reaching its highest level since November 2000.

A better-than-expected report on pending home sales also fueled U.S. stocks. Sales jumped 1.5% in March, according to the National Association of Realtors, stronger than the 0.1% rise economists were expecting.

U.S. stocks are on track to end April with gains this week, which would mark the fourth straight positive month this year.

Click here for more on stocks, oil, gold, and bonds

Expectations of a further rate cut from the European Central Bank and continued monetary support from the Federal Reserve later this week were also lending support.

"The ECB meeting may be the most interesting event this week," wrote Marc Chandler, strategist for Brown Brothers Harriman, adding that the ECB indicated earlier this month that if economic data worsened, it was prepared to cut interest rates.

Related: World's five hottest stock markets

What's moving: Shares of Moody's (MCO), Standard and Poor's parent McGraw Hill (MHP, Fortune 500) and Morgan Stanley (MS, Fortune 500) were big gainers after the firms settled two outstanding lawsuits, dating back to the financial crisis, that accused them of misleading investors about the risks involved with buying bonds backed by subprime mortgages.

J.C. Penney (JCP, Fortune 500) shares rose after the struggling retailer officially said it had secured a $1.75 billion loan from Goldman Sachs. Shares were also boosted by a New York Post report that claimed "at least" two major hedge funds have taken significant stakes in Penney, with one's investment worth over $10 billion.

In other corporate news, JPMorgan Chase (JPM, Fortune 500) announced Sunday that another of CEO Jamie Dimon's key executives, co-chief operating officer Frank Bisignano, is leaving the firm.

Earnings continue to roll in, with controversial supplements company Herbalife (HLF) and gun maker Sturm Ruger (RGR) set to release their quarterly results after the close.

First Published: April 29, 2013: 9:45 AM ET

23.10 | 0 komentar | Read More