Italy's Monti may lead again, reforms key

Monti says he may be a candidate for prime minister if asked by reformist parties

LONDON (CNNMoney)

Monti stood down, and parliament was dissolved Friday, after former Prime Minister Silvio Berlusconi withdrew his support for Monti's unelected government of technocrats, appointed a year ago to save Italy from the financial crisis then threatening to tear the eurozone apart.

Speaking on Sunday, Monti said he was more concerned that his policies survived than taking sides in the campaign but added he was ready to offer advice and leadership if a party or coalition came forward with a program he could support.

"I would be much more interested if the Monti agenda - and I apologise if my name appears here - would serve to provide clarity and perhaps help unite the forces," he said at a news conference.

Monti, an economics professor and former European Commissioner, has been credited with restoring confidence in Italy, as well as with its eurozone partners and investors, thanks to his commitment to reduce government borrowing and introduce economic and political reforms.

"While he may not have thrown his hat into the ring, Il Professore has become Il Politico whether he likes it or not," said Nicholas Spiro, managing director of London consulting firm Spiro Sovereign Strategy.

Related: Greece may remain in euro after all

Yields on 10-year Italian government bonds have risen recently on the renewed political instability but remain way below the 7% level Monti inherited a year ago, when he succeeded Berlusconi, who resigned under a cloud of scandal.

In a taste of a bitter election campaign to come, Berlusconi criticized Monti's lack of business experience and said his government had made too many errors

"Last night I had a nightmare, I woke up screaming. I dreamed of a government still with Mario Monti as president of the council," he said, according to the transcript of an interview posted on his website.

Fiscal tightening, weak confidence and tight credit supply have kept Italy deep in recession for the past five quarters. The economy is expected to shrink by about 2.4% this year, and continue to contract in 2013. Unemployment hit 11% in October and is forecast to rise even further next year.

Related: Europe needs new ideas - Vodafone CEO

Opinion polls suggest the center-left Democratic Party led by Pier Luigi Bersani will win the lower house elections, but may need to build a coalition to gain a majority.

Bersani said in a statement on his website that he had no reason to apologize for supporting Monti's program in government and would consider his policy proposals carefully.

Analysts at Nomura said a Bersani-led government including Monti in some capacity was the "best case" likely outcome for financial markets but cautioned that even such a government may struggle to implement reforms, particularly if it failed to win a majority in the upper house.

"Given all this political uncertainty, we see a non-negligible risk that markets will become unsettled over Italy again early in the new year," wrote Alastair Newton in a research note.

-- CNN's Alex Felton contributed to this article

First Published: December 24, 2012: 9:47 AM ET

14.44 | 0 komentar | Read More

Last minute shoppers bring hope to stores

Shopping has ramped up as consumers rush to get last minute gifts, but experts say the late push may not be enough to save holiday retail sales.

NEW YORK (CNNMoney)

Estimates for the final shopping weekend aren't out yet, but there's evidence that more shoppers were coming into stores as the holidays drew near.

At North Point Mall in Alpharetta, Georgia, the parking lots were at capacity this past weekend, and it was standing room only at the food court, according to the mall's general manager Nick Nicolosi.

"By the amount of bags I saw, with people carrying four or five each, it's looking like a great season," he said.

A poll conducted by The NPD Group and CivicScience revealed that 42% of consumers were still shopping for the holidays last week, since many have been groomed to wait for better deals later in the season.

Related: Last minute deals at Wal-Mart, Target, Bloomingdales

The long holiday shopping calendar also played a role in why many customers waited, said Bill Martin, founder of ShopperTrak, which analyzes retail foot traffic.

"Many consumers delayed their Christmas shopping -- and with good reason," he said. "They saw 32 shopping days between Black Friday and Christmas."

Even if shopping ramped up during the final rush, experts are expecting disappointing numbers for the holiday season overall.

Superstorm Sandy forced many stores to close for days in October and early November. It also left many people in the Northeast without power for weeks, hurting their psyche. Looming worries over whether tax rates will go up from the fiscal cliff has also kept shoppers from going overboard with their holiday lists.

ShopperTrak lowered its holiday sales forecast for the months of November and December. It now predicts that sales will increase 2.5% over last year, down from the 3.3% it initially projected in September.

Retailers were pulling out all the stops at the last minute to lure in late shoppers.

Toys R Us stores were staying open open for 88 consecutive hours until 10 p.m. on Christmas Eve. Macy's (M, Fortune 500) stores were open for more than 48 hours straight.

Other retailers are handing cash back to customers. For every $50 spent at Kohl's (KSS, Fortune 500), the department store gave out a $10 store coupon. Target (TGT, Fortune 500) handed out gift cards worth up to $130 to shoppers who bought certain Dyson vacuums. And Wal-Mart (WMT, Fortune 500)slashed prices on iPhones and iPads.

Trae Bodge, senior editor of RetailMeNot.com Insider, said that these discounts are a sign that retailers want to get stale inventory moving, since shopping so far this season has been slow.

First Published: December 24, 2012: 12:02 PM ET

14.44 | 0 komentar | Read More

Stocks tumble as fiscal cliff deadline nears

Click for more market data.

NEW YORK (CNNMoney)

The Dow Jones industrial average fell 0.4%. The S&P 500 and the Nasdaq both lost about 0.3%. U.S. markets closed at 1 p.m. ET and will remain dark Tuesday for the Christmas holiday.

With time running out, investors are increasingly concerned about the lack of progress in talks over tax hikes and spending cuts set to kick in automatically on Jan. 1, known as the fiscal cliff.

Stocks fell 1% on Friday after a plan by Speaker John Boehner to avert the fiscal cliff failed to get enough support in the House late Thursday. President Obama spoke about the negotiations Friday evening before leaving for the holiday, urging a scaled-back deal that would stop taxes from rising on 98% of Americans -- something both sides say they want.

No one expects progress on a deal Monday, with members of Congress having left Washington for their homes to celebrate the Christmas holiday.

Related: What happens to stocks if we go over fiscal cliff?

But investors are still holding out hope for a temporary fix before the end of the year, said Mark Luschini, chief investment strategist at financial advisory firm Janney Montgomery Scott. Such a deal would only forestall the immediate crisis and delay more difficult decisions until later next month, he added.

"If they can avert the worst, the market will find some support," said Luschini. "Absent that, we will definitely see some pressure on equities."

Fear & Greed Index

Most federal offices and many businesses were closed on Monday. There are no economic reports or corporate news scheduled for release.

European markets ended a holiday-shortened day mixed, with markets in Germany closed. Italy's Mario Monti said this weekend he may consider a second term as prime minister if asked by parties committed to the economic reforms he began over the past 12 months.

Asian markets ended slightly higher, while markets in Japan were closed.

The U.S. dollar rose versus the euro, British pound and Japanese yen. In the bond market, U.S. Treasuries were lower, with the 10-year note yielding 1.78%. Oil prices fell while gold prices edged higher.

First Published: December 24, 2012: 9:41 AM ET

14.44 | 0 komentar | Read More

Financial planners: How to survive fiscal cliff

Financial planners are "doing a lot of hand holding" as they help clients prepare for the fiscal cliff.

NEW YORK (CNNMoney)

Their advice: Prepare for the worst but don't panic.

"We're doing a lot of hand holding," said Lynn Ballou, Certified Financial Planner and managing partner at Ballou Plum Wealth Advisors. "Clients were really hopeful that Congress would set aside its differences and come to a decision, so most people don't actually know what it's going to mean to them if they go over the fiscal cliff. They're concerned but they're also just mad."

Here are a few questions advisers have been fielding from their clients.

1. What's going to happen to my money if we go over the fiscal cliff?

If the fiscal cliff isn't avoided, tax rates on income, estates, gifts, capital gains and dividends will increase, and a number of tax breaks will expire.

The average household will face a total tax increase of $3,500, according to the Tax Policy Center.

Income tax rates would revert to higher levels if the Bush tax cuts expire. Gift and estate tax rates are slated to soar to 55% for anything worth $1 million or more next year -- up from the current 35% tax and exemption of $5.12 million.

Related: Going over the cliff -- What changes, what doesn't

Ballou said it's a smart idea for certain clients to convert retirement accounts to a Roth IRA. And for clients who were planning to give big gifts next year, it could be beneficial to do it this year to avoid a big tax hit.

In addition to the rate increases, key tax breaks for families -- like the American Opportunity Credit and the Earned Income Tax Credit -- are set to revert to lower levels at the beginning of the year. The payroll tax cut is also slated to expire, which would leave 160 million workers with smaller paychecks.

2. Should I get out of the stock market?

Ross Levin, president of Accredited Investors in Minneapolis, said that many of his clients are especially concerned that going over the fiscal cliff could spark a stock market sell-off.

For those particularly worried about investment losses, Levin has been shifting their stock and bond holdings. While a typical portfolio has 70% stocks and 30% bonds, he said in some cases he will scale back the stock investment to as little as 55%.

But he says it's a bad idea to do any drastic repositioning. "As an investor, you need to be comfortable with uncertainty -- it is that uncertainty that allows you to have returns," he said.

For clients who were already planning on selling a stock next year, however, Levin said he may advise them to do it this year instead, in order to take advantage of the lower capital gains tax rate.

Related: What will happen to stocks if we go over the cliff

Otherwise, planners are telling clients not to panic.

"Some people want to take drastic actions like go to all cash," said Paul Jarvis, a CFP and portfolio manager at Bell State Bank & Trust in Fargo, North Dakota. "Investors are worried that if the fiscal cliff negotiations fail, they'll have a significant loss."

Along with making modest portfolio adjustments, Jarvis advises people to put aside enough money to last one to three years. And stash this money in an FDIC-insured savings account -- not under a mattress, Levin recommends.

Ballou said she doesn't have any clients who want to get out of the stock market completely, but she said that many have thought about selling their dividend-paying stocks because they're worried about dividend taxes increasing.

"We have to tell clients, 'Your portfolio is designed to get you where you need to go in life irrespective of tax law, so there's no rush to go out and start selling things because you think you're paying lower tax rates now."

3. Am I on track to survive a fiscal cliff?

Making it through the fiscal cliff unscathed will likely involve readjusting your spending and saving habits, advisers say.

"Many clients are saying their biggest concern is whether they're going to run out of money," said Jarvis. He recommends setting up an emergency fund, making sure investments are diversified and maximizing tax-deferred accounts like 401(k)s and IRAs.

Related: World aghast at fiscal cliff mess

Ballou, who has received more calls than usual in recent weeks, said many clients are particularly worried about affording income tax hikes. To help them budget accordingly, she sits down with them and looks over last year's tax returns to show them just how much taxes would increase if Congress doesn't act.

"We're looking at people's budgets to make sure they have room for an extra tax bite," she said.

Even if Congress reaches a deal and their taxes don't end up rising, this is still a good way for people to make sure they're living within their means and their finances can sustain an emergency or future tax code changes.

"It's a good reminder of what we should be doing anyway," she said.

First Published: December 23, 2012: 10:26 AM ET

14.44 | 0 komentar | Read More

Stocks: Investors hope for a 'Cliff-mas' miracle

Click the chart for more stock market data

NEW YORK (CNNMoney)

Lawmakers in Washington have only one week left to strike a fiscal cliff deal that will avert automatic tax increases and spending cuts due January 1. Many fear that the fiscal cliff could tip the U.S. into another recession.

Investors are on heightened alert over the gridlock in Washington, since politicians struck down their "Plan B" late last week, and debate is halted until after the Christmas holiday.

Anxious investors are also bracing for a low volume trading week. U.S. stock markets will close at 1 p.m. Eastern Time on Monday and be closed entirely on Tuesday, Christmas day.

Related: Fear & Greed Index

The week is also light on economic data. Reports due on the housing market include new and pending home sales and the Case-Shiller 20 city index on home prices.

The housing market has been showing numerous signs of recovery in recent months. Demand for homes have been helped by record low mortgage rates, thanks to the Federal Reserve's decision to buy $40 billion in mortgages every month.

Foreclosures have also fallen to a five-year low, which has cut down the supply of distressed homes available in the market and helped lift home prices.

Aside from housing, investors will get a glimpse into consumer sentiment as holiday shopping wraps up. Last month, optimism about the job market had consumers feeling more upbeat about the U.S. economy than they had been in four and a half years. It's a closely watched gauge, because consumer spending accounts for more than two thirds of U.S. economic activity.

Related: Top fiscal cliff dodgers

All three U.S. stock indexes finished last week higher, even though fiscal cliff fears sent markets tumbling on Friday.

Overall stocks are up significantly in 2012. The Dow Jones Industrial Average has gained 8%, while the S&P 500 and Nasdaq are up 14% and 16% respectively.

First Published: December 23, 2012: 12:05 PM ET

14.44 | 0 komentar | Read More

New deal to give MF Global customers more money

Trustees reached a deal that will likely return an estimated $500 million to $600 to MF Global's U.S. brokerage estate.

NEW YORK (CNNMoney)

The trustee trying to recover funds for MF Global customers announced that a settlement was reached on Friday. Under the deal an estimated $500 million to $600 million will be returned to the U.S. brokerage estate, which has been giving money back to customers.

Many of the firm's roughly 38,000 customers were left in the lurch after MF Global collapsed in October 2011, when its disclosure of billions of dollars worth of bets on risky European debt sparked panic among investors.

The firm was left scrambling for cash to make good on its obligations and ended up tapping customer funds, failing to replace them in violation of industry rules and leaving a shortfall of $1.6 billion.

Customers who traded on U.S. exchanges have since received roughly 80% of their money back. But customers trading on foreign exchanges have just recovered 5%.

Related: MF Global FAQ

James Giddens, a trustee appointed to unwind MF Global's estate, said in a statement that the deal resolves disputes between MF Global's brokerage division and its London operations. He said the agreement would result in "significant" additional payouts for clients.

The deal must be approved by a U.S. bankruptcy judge, who is expected to hear the case at the end of January.

First Published: December 23, 2012: 12:24 PM ET

14.44 | 0 komentar | Read More

EPA study supports more natural gas

NEW YORK (CNNMoney)

"As the administration and EPA has made clear, natural gas has a central role to play in our energy future," the agency said in a press release. "The administration continues to work to expand production of this important domestic resource safely and responsibly."

EPA outlined several steps it's taking to assess the impacts fracking -- short for hydraulic fracturing -- has on the nation's water supply, as directed by Congress in 2009.

Steps include:

-- Analyzing existing data from natural gas companies on chemicals and practices used

-- Modeling how discharging waste might impact the water

-- Lab testing on water discharge

-- Testing fracking chemicals for toxicity

-- Testing groundwater in five regions near drilling activity

As expected, the study contained no new data or conclusions. The final results are not expected until late 2014.

Related: World's 10 most expensive energy projects

Some see the lack of data or negative comments in Friday's progress report as a positive for the industry.

"It signals that the Obama administration has no real appetite for additional federal regulations until 2014 at the earliest," said Nitzan Goldberger, a natural gas analyst at Eurasia Group, a political risk consultancy. "That's good news for the oil and gas guys."

The Obama administration has tightened some rules around fracking, but for the most part has left regulation up to the states.

Fracking involves injecting massive amounts of water, sand and some chemicals deep underground in a bid to crack shale rock and ease the flow of oil and natural gas.

The process has unleashed an energy boom in the United States, creating thousands of jobs, driving down the price of oil and natural gas and cutting energy imports to levels not seen in decades.

But it's also raised serious concerns over its effects on the environment, including air pollution from trucks and wells, its links to earthquakes and fears that it is contaminating drinking water.

For environmentalists, the negatives seem to outweigh the positives.

Fracking was once seen by some environmentalists as a technology that, given the proper regulations, could be done safely and provide a fuel that emits far fewer greenhouse gases than coal. Natural gas was seen as a good alternative to coal, at least until renewables like wind and solar were ready for prime time.

But declining costs for renewables, more instances of water contamination, uncertainly over the heat-trappng nature of natural gas that escapes from wells unburned, and a fear that cheap gas is crowding out wind and solar have led many to change their minds.

Several environmental groups are calling for an immediate ban on fracking, while others favor a gradual phase out combined with greater federal regulation.

On the other side are many analysts and economists that believe this technology can give the United States a significant economic and geopolitical advantage.

First Published: December 21, 2012: 2:54 PM ET

14.44 | 0 komentar | Read More

Going over the cliff: What changes, what doesn't

Senate Majority Leader Harry Reid may need to do some heavy lifting to pass a fiscal cliff deal in the Senate, after House Speaker John Boehner's so-called Plan B did not garner enough support in the House.

NEW YORK (CNNMoney)

The good news: It won't be the end of the world.

The bad news: Going over the cliff could create problems that no one should have to deal with, simply because Congress and the White House couldn't get the job done on time.

Practically speaking, however, there is likely to be a "grace period" of a couple of weeks during which Congress could pass a deal to ward off the bulk of scheduled tax increases and spending cuts. And there are ways both may be postponed temporarily while lawmakers work that out.

Your paycheck: If you'll be paid during the first week in January, your company's payroll processor will probably be cutting your check during Christmas week. So far, however, the IRS hasn't told the payroll companies how much tax to withhold for 2013.

Unless new withholding tables are issued, payroll processors will continue to use 2012 withholding rates for the early January paychecks. In that sense, your paycheck in early January won't be much different than what it was in late December.

But your paycheck still could be smaller, because the 2% payroll tax holiday is expiring. Starting in January, workers will once again have 6.2% of their wages up to $113,700 withheld to pay for Social Security, up from the 4.2% rate that's been in effect for the past two years.

Effectively that means someone making $50,000 might get about $83 less a month in their paychecks. Someone making twice that would see their pay reduced by roughly $167 a month.

If you're getting a bonus, you'll likely have more withheld there, too, said Michael O'Toole, senior director of government relations for the American Payroll Association. That's because there's one supplemental withholding rate that applies to bonuses. This year it's 25%, but it's set to rise to 28% on Jan. 1, unless Congress decides to change it.

For paychecks that will be cut during the second, third and fourth weeks of January, payroll processors will likely continue to use 2012 income tax withholding tables if they've heard nothing from Treasury and the IRS by that point, O'Toole said.

CNN: Breakdown of support for Plan B

There also is some debate whether Treasury Secretary Tim Geithner will have the authority to tell employers that they should continue to use the 2012 withholding tables until further notice if he chooses.

The other option, of course, is that the IRS could issue new withholding tables reflecting 2013 law, which means everyone's tax rates will go up officially on Jan. 1. In that case, paychecks that are processed in January will have more withheld than they do currently.

If, as expected, Congress eventually chooses to extend the Bush tax cuts for all but the highest earners, adjustments would need to be made for paychecks that went out earlier in the year.

Treasury did not indicate to CNNMoney whether it would issue new withholding tables by Jan. 1.

Your 401(k) and IRA: There's no telling how markets will respond if fiscal cliff gridlock persists into 2013.

They've been relatively sanguine so far. But that may not be the case going forward.

After news that House Speaker John Boehner tabled Plan B because it lacked sufficient support, U.S. stocks fell Friday by just under 1%. World markets also ended the day modestly in the red.

Then again, some believe, markets may not move much on fiscal cliff news - whether Congress cuts a deal soon or not.

Your 2012 tax return: Here's where things potentially become a dumb mess. The IRS warned lawmakers that if they don't act to protect the middle class from having to pay the Alternative Minimum Tax for tax year 2012 by Dec. 31, up to 100 million taxpayers may not be able to file their 2012 taxes until late March.

That would mean their refunds will be delayed. And they wouldn't be injecting those refunds into the economy during the first quarter.

Based on Treasury Department records from the past three years, refunds paid during January, February and March combined have ranged from $117 billion to $136 billion.

Related: What's in the fiscal cliff?

Government spending: Unless lawmakers avert the so-called sequester, a series of automatic cuts will reduce the budgets of most federal agencies and programs by 8% to 10%.

But that doesn't necessarily mean those cuts would have to occur immediately, according to a former official with the Office of Management and Budget.

Both the White House budget office and federal agencies themselves will have some latitude to postpone the cuts from occurring "for several weeks if necessary," added OMB Watch, a group that monitors the federal budget.

The White House Budget Office did not respond to questions from CNNMoney.

Doctors' pay: Absent a fiscal cliff deal that includes a so-called "doc fix," Medicare physicians are facing a nearly 27% cut in their payments for treating Medicare patients.

But here again there may be a few weeks' grace period for Congress to change its mind and reverse the cut. That's because a claim submitted will be paid no less than two weeks after it's received.

Unemployment benefits: A federal extension of unemployment benefits is set to expire. If Congress does not renew it, workers who lost their jobs after July 1, 2012, will only receive up to 26 weeks in state unemployment benefits, down from as many as 73 weeks in state and federal benefits that have been available in 2012. As a result, more than 2 million of the long-term unemployed will run out of benefits in January, according to the National Employment Law Project, an advocacy group.

If Congress chooses early next year to keep the extension in place, and makes the extension retroactive, then many of the 2 million who fell off the rolls may be paid retroactively, said Rick McHugh, a NELP staff attorney.

First Published: December 21, 2012: 4:39 PM ET

14.44 | 0 komentar | Read More

'Dairy cliff': Milk prices may double in New Year

If Congress doesn't act on an expiring protection for dairy farmers before Jan 1, milk prices could double.

NEW YORK (CNNMoney)

With Congress spending all its time trying to avert the fiscal cliff, a slew of other legislative matters are going unattended. One of them is the agriculture bill which, if not addressed, could lead to a doubling of the price of milk early next year.

It works like this: In order to keep dairy farmers in businesses, the government agrees to buy milk and other products if the price gets too low. The current agriculture bill has a formula that means the government steps in if the price of milk were to drop by roughly half from its current national average of about $3.65 a gallon.

Problem is, the current bill expired last summer, and Congress had been unable to agree on a new one. Several protections for farmers have already expired, and several more are set to do so over the next few months. One of them is the dairy subsidy, which expires January 1.

But instead of leaving farmers entirely out in the cold, the law states that if a new bill isn't passed or the current one extended, the formula for calculating the price the government pays for dairy products reverts back to a 1949 statute. Under that formula, the government would be forced to buy milk at twice today's price -- driving up the cost for everyone.

"If you like anything made with milk, you're going to be impacted by the fact that there's no farm bill," U.S. Secretary of Agriculture Tom Vilsack told CNN's Candy Crowley in an interview on State of the Union airing Sunday, Dec. 30.

"Consumers are going to be a bit shocked when instead of seeing $3.60 a gallon for milk, they see $7 a gallon for milk. And that's going to ripple throughout all of the commodities if this thing goes on for an extended period of time," Vilsack said.

Related: Independent farms rake in millions

Sky-high milk prices wouldn't necessarily be good for dairy farmers either, according to Chris Galen, a spokesman for the National Milk Producers Federation, which represents over 30,000 dairy farmers.

While it might provide a short term boost to profits, there's a fear that consumers would either cut back on dairy or opt for imported dairy products. It could also force food makers to search for alternatives to dairy, like soy.

"We call it the dairy cliff," Galen said.

Fortunately, there's still time for Congress to act.

Galen said the government would have to issue a notice saying it was going to pay the increased price for dairy products, then set up a schedule for when purchases would start, a process that could take a few weeks.

"It's not like people would dump blocks of cheese on the USDA's front lawn January first," he said.

To prevent the price spike, Congress either needs to extend the current bill, pass a new bill, or enact some provision to keep the 1949 law from taking effect.

Given the current state of the fiscal cliff talks and Congress' inability to get things done in general, dairy lovers might want to stock up now.

First Published: December 21, 2012: 3:31 PM ET

14.44 | 0 komentar | Read More

EPA study supports more natural gas

NEW YORK (CNNMoney)

"As the administration and EPA has made clear, natural gas has a central role to play in our energy future," the agency said in a press release. "The administration continues to work to expand production of this important domestic resource safely and responsibly."

EPA outlined several steps it's taking to assess the impacts fracking -- short for hydraulic fracturing -- has on the nation's water supply, as directed by Congress in 2009.

Steps include:

-- Analyzing existing data from natural gas companies on chemicals and practices used

-- Modeling how discharging waste might impact the water

-- Lab testing on water discharge

-- Testing fracking chemicals for toxicity

-- Testing groundwater in five regions near drilling activity

As expected, the study contained no new data or conclusions. The final results are not expected until late 2014.

Related: World's 10 most expensive energy projects

Some see the lack of data or negative comments in Friday's progress report as a positive for the industry.

"It signals that the Obama administration has no real appetite for additional federal regulations until 2014 at the earliest," said Nitzan Goldberger, a natural gas analyst at Eurasia Group, a political risk consultancy. "That's good news for the oil and gas guys."

The Obama administration has tightened some rules around fracking, but for the most part has left regulation up to the states.

Fracking involves injecting massive amounts of water, sand and some chemicals deep underground in a bid to crack shale rock and ease the flow of oil and natural gas.

The process has unleashed an energy boom in the United States, creating thousands of jobs, driving down the price of oil and natural gas and cutting energy imports to levels not seen in decades.

But it's also raised serious concerns over its effects on the environment, including air pollution from trucks and wells, its links to earthquakes and fears that it is contaminating drinking water.

For environmentalists, the negatives seem to outweigh the positives.

Fracking was once seen by some environmentalists as a technology that, given the proper regulations, could be done safely and provide a fuel that emits far fewer greenhouse gases than coal. Natural gas was seen as a good alternative to coal, at least until renewables like wind and solar were ready for prime time.

But declining costs for renewables, more instances of water contamination, uncertainly over the heat-trappng nature of natural gas that escapes from wells unburned, and a fear that cheap gas is crowding out wind and solar have led many to change their minds.

Several environmental groups are calling for an immediate ban on fracking, while others favor a gradual phase out combined with greater federal regulation.

On the other side are many analysts and economists that believe this technology can give the United States a significant economic and geopolitical advantage.

First Published: December 21, 2012: 2:54 PM ET

14.44 | 0 komentar | Read More