Sequestered within the pages of auto industry news, came notice of a recent EPA approval that could cause unexpected repercussions across a wide range of investor and consumer interests. The EPA has just given its approval for a 5% increase in the amount of ethanol allowable in today's motor fuels. While the petroleum industry has not yet given indication whether or not it shall make the new fuel blend available to consumers, various business sectors and government entities are quickly aligning themselves either pro or con on the issue. One thing is almost certain, corn futures just became more volatile.

The auto industry is largely against the increase in ethanol concentrations, citing the fact that a 15% ethanol mixture cannot be safely and efficiently burned in vehicles manufactured before 2007. Consumers who mistakenly pumped E15 gasoline into those older vehicles would run the risk of damaging their car engines and defeating the emission equipment and mileage standards of their vehicles.

BBC News reported that the Committee of European Banking Supervisors passed a measure to cap European bank bonuses to 30%. This committee is made up of financial regulators from EU's 27 members. Draft regulations will be drawn up within the next few days, followed by a one month discussion.

The specifics of the proposal are:

• Cash bonuses to be capped at 30%.
• A new watchdog would define what a big bonus is.

A weekend meeting of global finance ministers was sponsored by the International Monetary Fund to deal with the growing currency imbalances in world economies. The two big players -- the U.S. and China -- instead of reaching a consensus, ended farther apart with each side digging in and pushing back against the other.

Zhou Xiaochuan, China's central bank governor told the Financial Times: "The continuation of relatively low interest rates and unconventional monetary policies by major reserve currency issuers have created stark challenges for emerging market countries in the conduct of monetary policy."

The U.S. Federal Reserve is in a quandary about how to explain its anticipated quantitative easing stimulus, dubbed QE2. Officials worry that an added stimulus will create unwanted inflation.

Fed officials Charles Evans and William Dudley have spoken in favor of the new stimulus. Dudley told the Financial Times that asset purchases and communication are "two potentially complimentary avenues."

One disastrous international trade policy of the 1930s concerned tariffs: nations increased tariffs on imports to protect domestic industries; when applied universally, it resulted in declining export sales and trade volumes. Tariffs made the Great Depression worse.

Now, it appears, nations are on the verge of implementing another counter-productive policy -- manipulating currencies -- and if public officials are not careful, a similar downward spiral in international trade could occur.

A member of the National Bureau of Economic Research, which announced Monday that the U.S. recession ended in June 2009, told The New York Times (NYT) the U.S. economy must grow at a 2.5% rate just to keep the unemployment rate, currently 9.6%, constant.

By extension, the world's largest economy will need upwards of 2.7% U.S. GDP growth annually -- probably closer to 3% growth -- to substantially reduce unemployment.

How about getting millions of China's new middle class to contribute to that growth? Li Daokui, an economist and an adviser to the People's Bank of China, agrees, at least regarding consumption by China's consumers.

The 2001 Bush income tax cut is one of those issues whose fate has been sealed by objective economic conditions.

Simply, if the U.S. economy had registered robust growth during the final two years of the Bush administration, and no other negative economic events occurred, the tax cut, which will increase the deficit by $336 billion this fiscal year, $295 billion in fiscal 2011, and by more than $320 billion per year through fiscal 2019, perhaps would have had a chance of being extended.

With sophisticated high-frequency trading and quant funds, it seems that the proverbial Hal 9000 has taken over Wall Street. Of course, a stark example of this was in May 6, in which the market inexplicably lost $862 billion in market value within 20 minutes. It was the "Flash Crash."

Since then, the SEC and other government regulators have been investigating the matter. Already, there are some changes that have been put in place, such as circuit breakers. And yes, these have been triggered in some cases already.

As the economy continues to sputter, President Obama is trying to find new ways to get things back on track. While still in the early stages, it looks like his plan will include key tax breaks, which could amount to as much as $200 billion over the next couple years.

First, the plan will allow companies to write off 100% of new investment in capital and factories. Of course, all companies can deduct such purchases -- through depreciation. But it can take as much as 30 years. But the new plan would greatly accelerate the process to one year.

Over a year ago, two Bloomberg reporters filed under the Freedom of Information Act to obtain information from the Federal Reserve on their bailout activities during the market crash of 2008-09. The Federal Reserve has blocked their attempts maintaining that disclosure would harm the financial institutions involved. The latest attempt at blockage was at the U.S. Court Appeals Court.

In the race of economies, China is now number two. It passed Japan and will most likely stay there for the rest of the year. China's economy is valued at $1.33 trillion beating Japan's $1.28 trillion.

So, you say, what's the big deal? The big deal is that China is now the powerhouse in the East, while the U.S. remains the leader in the West. China can use its clout to increase trading with nearby countries in the East. The number two slot is important because China beat out the European Union, even its biggest exporter, Germany. So we can say that China has moved westward.

"The period around mid-term elections is nearly always conducive to stock market gains, regardless of the political outcome," suggests market historian and money manager Jim Stack.

The editor of InvesTech Market Analyst explains, "We are now coming up on the strongest 3-quarter period of the 4-year Presidential Election Cycle.

"In fact, the fourth quarter of the mid-term election year has the highest average return of all quarters in the cycle (6.3%). Looking back over the last 20 election cycles since 1929, the average cumulative gain over the upcoming 3-quarter period starting in October is a healthy 18.1%.

You don't often see these moves in commodities, but when they happen, look out below. Two days ago, September wheat closed "limit up" -- 60 cents. That means that the market stopped trading. You could not enter a buy order.

On Friday, just the opposite happened. Wheat fell the daily limit of 60 cents. September wheat closed at $7.25 3/4 per bushel. A "limit down" move means that the market stops trading. At that point you cannot enter a sell order and are locked in. On Monday, if the market opens lower but not limit down, you can sell out but at a big loss.