Hedging gasoline, calling the White House home

It takes an enormous staff to maintain the White House. But do any of the mansion's butlers, chefs or handymen actually call the residence of presidents home?

That's one of the questions in this edition of "Ask AP," a weekly Q&A column where AP journalists respond to readers' questions about the news.

If you have your own news-related question that you'd like to see answered by an AP reporter or editor, send it to newsquestions@ap.org, with "Ask AP" in the subject line. And please include your full name and hometown so they can be published with your question.

Q: Now that prices for a barrel of oil and a gallon of gasoline have dropped so sharply, is there something the average consumer can do to "hedge" the price of fuel, the way the airlines do? Is there any sort of mechanism for this that's at a scale appropriate for individuals and families? Douglas Olson, Laurel, Md.

A: Airlines and other energy-intense industries use a complex system of financial instruments to protect themselves against rising fuel costs by locking in prices as early as possible. Their hedging methods have been described as everything from gambling to buying insurance.

Because even a price change as small as a penny could cost millions when buying enormous amounts of fuel, the complexity of hedging is worth it for large companies. But for individual consumers it doesn't make much sense to constantly troll through trading data.

The average American could, in theory, buy a year's supply of gasoline at current prices and stockpile it. Though local planning boards, not to mention the FBI, might frown on having a storage tank next to your kids' swing set.

There are other options, though. Through an exchange traded fund, or ETF, retail investors can pool resources to buy crude oil and reap the benefits - or suffer the repercussions - when prices change.

Many ETFs, such as the U.S. Oil Fund, tend to mirror the price of crude, and could in theory be sold for a profit if prices flirt with $150 per barrel again. That way investors can offset price jumps at the pump.

"When you know you have these expenses, you can use the ETF to hedge them out," said Paul Justice, an ETF strategist at Morningstar. "You just have to anticipate how much you are going to spend."

Buying a five-year ETF might seem like a good move, but like any investment it's a risk because no one knows where crude prices could go in the future, he said. Justice cautions that oil-related ETFs can be a "risky proposition" and should only be used by those confident enough to ride the market. Ernest Scheyder, AP Energy Writer, New York

Q: Does anyone live in the White House other than the president and his family? Members of the White House staff, for example? Felix Jimenez, Los Angeles

A: President George W. Bush and his family are the only residents of the White House, according to first lady Laura Bush's spokeswoman. The next inhabitants are expected to follow that tradition. President-elect Barack Obama's mother-in-law will also be living at the White House with Michelle Obama and the two children, at least temporarily.

But that's not to say the two-century-old compound is ever empty or dark. Military aides assigned to the president work in shifts; the family quarters have butlers and valets available at all hours. And it's not uncommon to find White House political aides at their desks late into the evening or very early in the morning.

The White House encompasses a small army of workers, from the four florists and five chefs to the four calligraphers and four curators. The payroll also includes 33 handymen who tend to the six-level, 132-room mansion and its 31 bathrooms, 28 fireplaces, three kitchens, three elevators, movie theater and bowling alley. And they're available 24 hours a day.

The White House compound also features sleeping quarters across Pennsylvania Avenue at Blair House, the official government guest house. Other visitors sometimes stay in the private residence of the White House itself. But only the president's family calls 1600 Pennsylvania home. Philip Elliott, Associated Press Writer, Washington

Q: We recently returned from a vacation in Mexico. On Jan. 3-4, we spent 15 hours to cross the border into the U.S. at the Columbia Bridge outside Laredo, Texas. This leads me to suspect that the highest volume of border crossing into Mexico probably happens the weekend before Christmas, and the highest volume into the U.S. happens the weekend after New Year's.

When does the highest volume of crossings across the U.S.-Mexico border occur, so we can avoid those days in the future? Richard Capestani, Texas City, Texas

A: The busiest traffic days crossing the Colombia-Solidarity Bridge in Laredo come around the Christmas and New Year holidays.

Heading south into Mexico traffic peaked on Dec. 20, the Saturday before Christmas, when it was five times higher than any other day in 2008, according to the City of Laredo Bridge System. The next busiest days were Dec. 19 and Dec. 21. Returning north into the United States, the heaviest traffic came the day after New Year's and the day after Christmas, followed by Jan. 3, Jan. 4 and Dec. 27, according to U.S. Customs and Border Protection.

Not surprisingly, other heavy traffic days on the bridge track other holidays, especially Holy Week, leading up to Easter.

Similar holiday traffic snarls are common at crossings all along the U.S.-Mexico border. Last Memorial Day, border traffic kept an AP reporter in El Paso from getting to work; she called in "stuck in Mexico." Christopher Sherman, Associated Press Writer, Harlingen, Texas

Federal government posts $603M deficit in October

Economy 'is weakening significantly,' Flaherty says

The federal government posted a $603-million deficit in October as tax revenues fell, according to figures released by the Finance Department on Tuesday.

Ottawa's October shortfall was $87 million higher than the deficit for the same month last year and almost totally eliminated the government's surplus for the April-to-October period.

For those seven first months of fiscal 2008, the government posted a surplus of $200 million, down from an excess of revenue over expenses for the same period last year of $6.1 billion.

The figures indicate that the amount Ottawa accumulates in tax revenue is falling faster as the year — and the global recession — progresses.

Finance Minister Jim Flaherty acknowledged Tuesday that the economy "is weakening significantly."

The Canadian government will run a deficit as it strives to fend off a looming recession, Flaherty said, but it will offer detailed measures in the January budget on how it plans to balance the books once the ongoing economic crisis settles.

"We will ensure that spending that puts us into deficit is temporary, is for finite purposes, so that we will not be into a permanent deficit," Flaherty said Tuesday before meeting with his newly assembled economic advisory panel in Toronto.

The finance minister said no decisions had yet been made about what exactly will be included in the 2009-2010 budget, to be presented Jan. 27, except that it will contain some sort of stimulus measures.

Nevertheless, he said it will show "how we'll come out of deficit, so that it'll be clear to Canadians that as the economy recovers the deficit will disappear and we'll be in surplus again."

Canada's expanding pool of red ink in October was mostly attributable to falling tax revenues.

The government pulled in $18.76 billion in total revenue for the month, an increase of 3.7 per cent compared with October 2007.

Tax intake down
Considering only tax monies, however, the federal government actually gathered 1.6 per cent less for the public treasury this October compared with a year earlier. Ottawa posted tax revenue of $15.59 billion in those 31 days.

In this case, the goods and services intake was down a hefty 17 per cent, to $2.3 billion, in the month. The federal cut to the GST was the reason for lower revenues in this category throughout 2008, the Finance Department said.

"GST revenues were down $2 billion, or 11 per cent (for April to October), reflecting the one-percentage-point reduction in the GST rate effective January 1, 2008," the department noted.

For the April-to-October period, Ottawa's overall tax take stood at $111.6 billion, down 0.3 per cent compared with the same seven months a year earlier.

Of the $15.59 billion the government levied from Canadians in October, only 12.8 per cent, or $1.99 billion, came from corporate income taxes, down from 14.4 per cent for the same period one year earlier.

Corporate income taxes were off 23 per cent in the month and 12.6 per cent in the April-to-October period, compared with one year earlier.

Corporate taxes can be volatile in a single month. But shrinking corporate tax figures over a longer period can indicate a slowing economy.

Costs up
What Ottawa gives back to Canadians in the form of transfer payments to provinces and individuals rose in October.

The federal government had program expenses of $16.77 billion in the month, up 5.9 per cent versus October 2007. For the April-to-October period of 2008, Ottawa spent an additional 7.2 per cent compared with the same period one year earlier.

Welfare payments and higher medical transfers to provincial governments were the categories exhibiting the biggest increases in October.

In addition, employment insurance payments rose by 4.2 per cent in the April-to-October span, reaching $8.1 billion. For October, however, EI costs fell to $1.05 billion.

Still, the number of Canadians without work increased by slightly less than 110,000 in November compared with January. As a result, fiscal experts believe Ottawa might need to fork out more in terms of unemployment benefits in the coming months.

Insurance fraudsters? We shall sight them from the bushes

The world's most exciting insurance job is also a booming area of business. Under cover of foliage, Paul Kendall joins the intrepid claim investigators.

By Paul Kendall
Last Updated: 12:53AM GMT 14 Dec 2008

It is just after six on a bitter December morning and I am lying in the mud on a strip of scrubland next to a bush. All is quiet, save for a handful of reeds whistling in the breeze. Suddenly, out of the gloom, the bush speaks. "Sierra, this is Hotel," it says. "We are in position."

A video camera appears from within the vegetation and points towards a handsome, whitewashed house 200 yards away. "Dwelling is in darkness," says the bush. "No sign of subject."

Then, silence again. "Hotel" – not actually a bush, but a burly former member of the Special Forces – squats next to me, dressed head to foot in camouflage gear, not moving. The minutes tick by. It starts to rain. As the early-morning sky turns slowly from dark blue to a pale, frosty white, we continue to scan the house for any signs of life.

"You know," my companion whispers eventually, "people don't realise the lengths you have to go to in this job. No one sees that."

Hotel is an insurance fraud investigator, a specialist in "static control", which means he spends his working life hiding in trees, undergrowth and ditches, spying on people who claim to be injured and unable to work.

In his time, he has caught out hundreds of fraudsters: men who had said they couldn't walk playing a round of golf; enthusiastic ramblers who had claimed they were confined to a wheelchair; even workers blinded in an accident who could miraculously drive a car. He investigates an average of two or three cases a week, and thanks to the current recession, he has never been busier.

For, while other employers are laying off staff, the fraud investigation business is booming as companies look to cut down on the vast amounts they pay out in personal injury claims. Local authorities that are sued by people who have tripped over broken pavements or potholes are also good customers.

Business is so buoyant, in fact, that Hotel's employer, the surveillance firm CIA Excel, is advertising for recruits for the first time in its 19-year history. More than 300 people have applied for the two available posts, 15 of whom will attend a series of intense military-style boot camps, where they will be assessed in nine areas, including observation, driving skills and their ability to react under pressure. Anyone who thinks insurance is a dull, desk-bound job needs to think again.

"This is one of the most challenging civilian jobs you could do," says Alan D'Ambrosio, CIA Excel's managing director, when I speak to him on the phone from his home in Scotland. "Operators have to be prepared to work long and irregular hours in unfamiliar and often dangerous environments. It is an extremely tough job, and those applicants who are successful will need to be both extraordinarily patient and, at the same time, very quick-witted."

Investigators also need to look "grey" – in other words, they must have the kind of face that blends into a crowd. Both Hotel and his partner, Sierra, a former policeman and one of the most unprepossessing men I have ever met, score perfectly on all fronts.

At 7.48am, after a display of stillness that puts me in mind of a Buddhist monk, Hotel snaps into action. A light has come on in the "target" property. The subject, a businessman in his late 40s who is suing a motor insurance company after sustaining back and neck injuries in a motorbike accident, has appeared in his dressing gown in the kitchen. The fact that Hotel has spotted the subject at all impresses me. I'm also dressed in camouflage, but can't see anything through all the foliage.

"Sierra, this is Hotel. Light on in property. Repeat, light on in property," he says, talking into a two-way radio.

"Is there?" I whisper, "Where?" Too late, I realise I'm talking to a mound of grass. Hotel has moved to some higher ground 30 yards to my right to gain a better view. I curse and desperately rearrange my headpiece.

Ten minutes later, foliage out of the way, I glimpse our man outside his house. He has told doctors he can hardly walk, but despite this, he pushes a wheelie bin up the drive, through a gate and out on to the street.

Hotel whips out his camcorder again. "Subject is pushing a wheelie bin and showing no signs of discomfort," he says into the microphone. Then, turning to me: "OK, move out."

Together – in the sort of manoeuvre that would convince Macbeth that Birnam Wood had moved to Dunsinane – we scurry across the scrubland towards the shelter of some trees. Once there, we remove our bush suits, place them in rucksacks and, when the coast is clear, jump over a fence and walk along the road back to Hotel's car. This, I am told, marks the second phase of the operation.

The man we are watching has said he cannot drive, but 'local intelligence' has assured Hotel and Sierra, who is parked down the road in a surveillance van, that he can. Sure enough, before long he pulls out of his driveway in a silver 4 x 4.

"Stand by, stand by, stand by," says Hotel. "That's the subject's vehicle in your direction. We're in pursuit."

Weaving in and out of traffic, the two investigators take it in turns to tail the man. In the event, he drives only as far as the local petrol station before returning home. It's not enough to prove he is faking.

But 20 minutes later, he is off again. And this time he drives much farther, first to the local school, where he drops off his daughter, then to a café, where he has a coffee and reads the paper, and then to a secondary school in a neighbouring village.

While we wait outside the school for the man to reappear, Hotel tells me about a recent case. It is obvious that he takes great pride in what he does. "Last year, we investigated a man who was claiming a quarter of a million pounds a year for care," he says. "He had lost half a leg in an industrial accident, which entitled him to some compensation, obviously, but he was claiming for four carers and grossly exaggerating his disability."

Hotel watched him 12 hours a day for seven days, mostly from an observation point in a canal, using a pair of high-powered binoculars. "It was one of the most difficult surveillance jobs I've ever done. But we established that the subject was more or less independent. He could walk on his own, cook on his own, and go to the lavatory on his own – all things he'd said were impossible."

The evidence collected by the investigators is expected to reduce the subject's claim by at least £200,000 a year.

And that was just one of more than 1,000 cases that CIA Excel investigated last year. Altogether, D'Ambrosio says he saves his clients tens of millions of pounds. I wonder, however, whether Hotel ever feels uncomfortable about snooping on people.

"Why should I?" he says. "I mean, it's you and me who pay for these people through higher premiums. We are staying within the law and trying to do a difficult job, while these people break the law and try to get money by deception. We are here to make sure that everyone pays a fair price for insurance."

As he says this, the man we have been following reappears in his silver 4 x 4, with his older daughter in the passenger seat. This time he sets off on a 35-mile journey to a dental surgery. He parks and gets
out the car. It is about 100 yards to the door of the surgery, over frosty ground, but he covers the distance with consummate ease.

"There he is! There he is!" exclaims Hotel, as we watch from a safe distance. "He's walking!" Everything is recorded on video. "OK, job done," says Hotel. "Let's get breakfast." There is an unmistakable note of glee in his voice.