The Federal Reserve drop short-term interest rate from 1.5 percent to 1 percent.

The Federal Reserve cut a key short-term interest rate by a half-percentage point Wednesday and expressed continued worries about the damage being done to the economy by the ongoing crisis in the financial and credit markets.

The rate cut put the central bank's federal funds rate at 1%. That matched the lowest level for this overnight bank lending rate ever -- the last time it was at 1% was from June 2003 to June 2004.

Investors had been expecting a half-point cut and some were betting that the Fed would even cut rates by three-quarters of a point to 0.75%.

The Dow Jones industrial average, which had been higher ahead of the Fed's decision, turned lower shortly after the announcement.

The fed funds rate is used to set rates for a wide variety of consumer loans, including home equity lines and credit cards, as well as for many business loans. The lower the rate, the more the Fed hopes to spur economic activity.

The Fed said in a statement that it was concerned about the drop-off in consumer and business spending due disruptions in the credit markets and warned that the economic slowdown is likely to get worse.

"The intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit," the central bank said in its statement.

This is the ninth time that the central bank has lowered rates since September 2007 in an effort to deal with the problems in the U.S. economy and credit markets. The Fed also lowered its discount rate by a half-percentage point to 1.25%. That is the rate at which it lends directly to banks and Wall Street firms.

The Fed's last cut was an emergency half-point reduction on Oct. 8. Six other central banks around the globe also lowered rates that day in a coordinated move. The European Central Bank and the Bank of England are scheduled to meet next on Nov. 6.

While rate cuts are traditionally the key tool the Fed uses to stimulate the U.S. economy, it has had to take other steps to address the current credit crisis.

The Fed has loaned hundreds of billions of dollars to banks through a new lending facility and is starting to loan money directly to major businesses by purchasing commercial paper, which is what some banks and businesses use as their primary method to fund day to day operations.

In its statement, the Fed also appeared to concede that these actions would not lead to an immediate return of economic growth. The Fed projected improved credit markets and a return of moderate growth "over time." And it warned that "downside risks to growth remain."

Sphere: Related Content Shows Obama-Biden Tax Calculator

Following claims of increased Taxes under Obama fueled by such people as Joe the Plumber, the Obama Campaign has produced a website:, titled Obama-Biden Tax Calculator, where people can put in their income and choose other options that applies in order to calculate what their taxes would be.

Interestingly the site, in addition to Obama's tax savings, also calculates McCain's tax savings, and other tax credits under Obama.

On the site, it says: "Barack Obama and Joe Biden will cut taxes for 95% of working families, and provide at least three times as much tax relief for middle class families as John McCain and Sarah Palin. The Obama/Biden plan provides $1,000 of tax relief for workers and new tax benefits to help families pay for college, childcare and save for retirement."

And it also encourages visitors to tell a friend or copy the widget to their sites.

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FDIC and the Treasury Department to Solve Foreclosure Crisis?

Foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to a monthly report by research firm RealtyTrac.

Foreclosure filings -- default notices, auction sale notices and bank repossessions -- fell by 12 percent from August to 265,968 in September, according to RealtyTrac, which records property in various stages of foreclosure.

In view of these souring conditions, Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., told the Senate Banking Committee that her agency and the Treasury Department are working closely to find ways to prevent avoidable foreclosures. The plan would use the Treasury Secretary's new authority under the Emergency Economic Stabilization Act to provide guarantees to mortgage lenders.

"Loan guarantees could be used as an incentive for servicers to modify loans," Bair said. "Specifically the government could establish standards for loan modifications and provide guarantees for loans meeting those standards."

That way, she said, "unaffordable loans could be converted into loans that are sustainable over the long term."

Americans have made it clear they are not happy that the $700 billion financial rescue package is focused so heavily on financial institutions and less so on helping homeownwers directly.

"Now that the administration has taken strong measures to stabilize financial institutions, it is imperative that we apply the same sharp and urgent focus to help the individual homeowners whose plight is at the root cause of this crisis," said Senate Banking Committee Chairman Christopher Dodd, D-Conn.

Bair, who worked with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke in crafting the financial rescue law, has been a longtime advocate of streamlining the modification process for homeowners who realistically have a chance of affording their mortgages once modified.

After the FDIC became conservator of mortgage lender IndyMac this summer, Bair instituted a loan modification process for loans that were 60 days or more past due and which IndyMac either owned directly or serviced. About two-thirds of the 60,000 loans under IndyMac's umbrella are considered potentially eligible for the new program, she said.

"Through this week, IndyMac Federal has mailed more than 15,000 modification proposals to borrowers and has called many thousands more in continuing efforts to help avoid unnecessary foreclosures," Bair said. So far, more than 3,500 have accepted the offers and others are being "processed."

The modifications on average have cut borrowers' monthly payments by more than $380, Bair said.

Not all foreclosures are preventable since some homeowners still won't be able to afford their homes, even under modified loan terms. Bair said the loans being modified at IndyMac must provide "improved value" for the bank or for the investors who own the loans.

She added that she hoped the IndyMac modification program will serve as a "catalyst" for more loan modifications around the country.

Other witnesses at Thursday's hearing include Neel Kashkari, the Treasury's interim assistant secretary for financial stability; Brian Montgomery, the assistant secretary for housing at the Department of Housing and Urban Development; James Lockhart, director of the Federal Housing Finance Agency; and Elizabeth Duke, a member of the Federal Reserve Board of Governors.

Kashkari is leading the Treasury's efforts under the $700 billion bailout to buy mortgage-backed securities and invest in banks. He said Thursday that Treasury "will look for every opportunity possible to help homeowners" as it carries out the plan.

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Working Less To Achieve More, How To Do It?

Leo Babauta
It's something we're all looking for -- the perfect solution that will minimize our work life while still getting the stuff done that we need to get done. Well, that one solution doesn't exist, but with a combination of strategies, you can get to where you want to be.

Now, none of these tips will turn your life around. But they can make a big difference, and when used together, your work life might just be enjoyable, productive, low-stress and high fun. And these tips won't work for everyone. They're not meant to be used as a step-by-step guide. It's a list of strategies that work -- choose your favorites and give them a try.

1. One goal. Set a single goal that you want to accomplish this year -- I know that we probably want to do 12 goals, but it's too difficult to maintain your focus on more than one goal, and it diffuses your energy. Pick one goal for the next 12 months, and then a single 3-6 month goal that will lead to your 12-month goal. Then choose something you can accomplish within the next 1-2 weeks that will lead to the 3-6 month goal. Now focus on that short-term goal, giving it all your energy, and when it's achieved, set your next short-term goal until you've accomplished your medium-term goal.

2. Find your passion. All the rest of these tips are just window dressing if you find work you're passionate about. If you're not in a job you love, start your quest to find that job now. You don't need to quit your current job right away, but start doing some research on the web, think about what you're really interested in, talk to others who are doing what you want to do. Make this your One Goal for this year, and it could turn out to be your best year ever.

3. Work from home. This is not a miracle solution, but it's something many people would love to do. And it's completely possible -- more people are doing it every day. Is it something you want to do? Give it some thought, and find a solution that works for you. You could telecommute for your current job -- plan your pitch to your boss today, making sure to focus on how it will benefit your company. Or you could find another job that allows you to work from home -- even if the pay is a little less at first, you will have reduced costs from not having to commute or eat lunch at work or buy expensive work clothes, and you will also have increased satisfaction.

4. Come in early. If telecommuting isn't your thing, try getting to work 30-60 minutes before the rest of the crowd. Or even more. This might require you to learn to wake up early, but the benefits are many: you skip the morning traffic, you can work without distractions until the rest of your coworkers come in, you can get a jump start on your day, you can be ahead of the crowd and get more done. Getting an early start is a great way to start your work day and to become more productive.

5. Work 4 days. If you can control your work schedule (or can convince your boss to change it), try working fewer days. Working four days a week not only gives you an additional day off, but it forces you to be more productive in the days you do work. Think about it: if you knew that you had to get your work done by the end of Thursday, you will focus more on what really needs to get done, and goof off less too. What would you do less? Email? Read stuff on the Internet? Chat? Play solitaire? Those unimportant things fade away when your time is limited.

6. Work 6-hour days. Same concept as above, but reconfigured. Personally, I'd choose the 4-day workweek, but that can't work for everyone. Get in early and leave even earlier -- imagine the 7 a.m.-1 p.m. work day. With focus, it can be done.

7. Work 20 hours. This might sound impossible. And if you are a full-time employee somewhere, it might be. But you could either 1) telecommute, and get your work done in fewer hours; or 2) work for yourself. Now, I'll admit that these options won't work for everyone, but they can be done. And I'll also admit that in working for yourself, you tend to work more hours, not fewer. But if you limit your hours to 20, it will force you to focus in the same what that working four days a week does. And if you focus on only those tasks that are truly important (see next item), you can get a lot done in 20 hours a week.

8. MITs. Each day, make a list with only three items: the three Most Important Tasks you want to accomplish today. Make at least one of them related to your One Goal. The others might be something you've been procrastinating on, or a big project that's due today, or something similar. Ideally, these MITs are really important tasks -- ones that will gain you longer-term recognition or income. Now focus on these, making sure to accomplish them. It's best to do your MITs first thing in the morning, before you get interrupted by a bunch of other things. If you do only three things today (you could choose more or less than three MITs, but I've found that three works for me), make it your MITs.

9. Batch process. There are usually a bunch of smaller tasks that we have to do that aren't that important. Email, paperwork, phone calls, things like that. Instead of doing those little things throughout the day, giving you busywork to interrupt and distract you from your important tasks, batch them together and do them at one set time each day. Write these tasks down on a small list, and with an hour left in your work day (or whatever works for you), start processing them as quickly as possible, ticking them off your list.

10. Telecommute 1 day a week. If you can't convince your boss to let you work completely from home, try one day a week. You could start out by calling in sick, but still getting a lot done from home. Or tell him you want to give it a try, just for one day this week, because you think it will make you more productive.

11. Freelance as a 2nd job. This is something I do, and I earn an extra $2,000 a month doing it. It's extra work, but it helps me to pay the bills (and pay off debt and save). Eventually, if you get good at the freelancing gig, you could make it your full-time work. To do this as a second job, set aside some time each day for freelance work. I've used early mornings (I get up an hour earlier and do one assignment), my lunch hour, work time (with permission), or evenings. If you could do 1-2 assignments a day, you will be making a decent extra income, and starting yourself down the road to working for yourself.

12. Brown bag it. This isn't life-changing, but I take my lunch to work every day -- leftovers or a sandwich, usually, with snacks such as fruits on the side. How does this help? Well, it saves me a lot of money (a few thousand a year) and it allows me to work through lunch, giving me time for that freelancing gig I talked about above or perhaps allowing you to leave work early.

13. Cycle to work. Again, not necessarily life-changing, but if you can commute even just a couple times a week by bike, you will save money on gas, reduce the stress of rush-hour traffic, and get your daily exercise done at the same time. A shower at work (or at a nearby gym) helps make this easier.

14. Take high-profile projects. If you just take the grunt work, your boss might or might not appreciate it, but it certainly won't make you a star and you won't go very far. Instead, volunteer for the big projects, the ones that will make a name for both you and your company. If there aren't any available, make your own. Be sure you can do them well, but if you do, these projects will have a huge impact on your life. The tasks on these projects should be your MITs every day. If you take on high-impact projects, you can be more productive working a half day than if you worked 10 hours a day on tasks that won't matter next week.

15. Automate your business. If you have your own business, or set one up on the side, find ways to make it automated as much as possible. Everything can be outsourced, from manufacturing to mailing to advertising to taking orders to customer support to credit card processing. Put your business front online, with online ordering, and give your outsourcers the ability to make decisions (with certain limits, following rules you set) without your approval, removing yourself from the bottleneck. If it's completely automated, your business will require minimal work from you once you've got it set up. Now all you have to do is check now and then to make sure things are running smoothly, and make sure your money is being deposited in your bank account. Nice.

16. Bank your raise. If you get a raise (and if you haven't in awhile, you need to make it happen by taking on high-profile projects and then asking for the raise), don't increase your spending. Take the raise and put the entire amount in the bank, making it automatically deducted from your paycheck or checking account and sent to a high-interest online savings account. Doesn't increase your productivity, but it can increase your financial stability.

17. Clear your desk. A messy desk might be the sign of a creative mind, but in my experience (I've tried both messy and now clean desks), having a desk that's clean is much more calming, much more productive, and more organized. Most importantly, it reduces visual clutter and allows you to focus on the task at hand, increasing your productivity. Clearing your desk can take a chunk of time, but it's worth it: take all your papers (everything!) and put them in your inbox, or in a pile if they don't fit. Now process through them, one at a time, from top to bottom, filing, acting upon, delegating, trashing each document or noting tasks on a to-do list for later (and filing the to-be-acted-upon documents in an action folder). Remove other knick knacks and put any office supplies or tools in a drawer (and empty out your drawers while you're at it). From here on out, everything goes in your inbox, and you process it to empty every day using the steps outlined here.

18. Granularize. If a project or task seems too intimidating, split it into smaller tasks, and just focus on the first task you need to do. For example, instead of "Research report", just find three sources on the Internet. You can read each of these sources and take notes after that.

19. Delegate. Get out of the habit of thinking you need to do everything yourself. Relinquish control and learn to trust others. If you don't think a person can handle a task, take the time to train him to do so. It will save you tons of time and headaches later. And by delegating, you empower others while shrinking your to-do list, leaving you to focus on what's really important.

20. Eliminate. Your to-do list is a mile long. You'll never be able to do all those things. Cut it in half by crossing out stuff that doesn't really need to be done, or delegating others. And from that list, just choose the three most important things that you need to do today. Get in the habit of eliminating as many of the tasks and processes you normally do as possible, and your work life will be greatly simplified.

21. Clear distractions. In addition to clearing your desk, you can allow yourself to focus more by eliminating all distractions: email or IM alerts, Twitter, other websites (in fact, turn off the Internet), phones, visual clutter around you or on your walls. Wear headphones so your coworkers interrupt you less, or let them know that you're not available right now. Focus more, and you'll get more done.

22. Kill meetings. One of the biggest time-wasters in our work lives. Most of the time, a meeting could have been accomplished with an email or a phone call. Beg out of meetings (or if you're the boss, eliminate them) by claiming you have a project due that you need to work on. Then be very productive during the time you would be at the meeting, and show your boss how much you got done.

23. Email once a day. Don't do email throughout the day. Set one time during the day to process email, then crank through it, getting your inbox to empty (use the same steps in "clear your desk" above). If you check email throughout the day, you are allowing yourself to be distracted and at the mercy of anyone who sends you a request. And by sending out emails all day, you are generating even more responses in return, compounding the problem. Batch process, and you will get a lot more done. Same applies to reading your RSS feeds and checking your blog stats and reading your forums.

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