Hewlett-Packard has outbid Dell for the data storage firm 3PAR, according to a report from the technology blog TechCrunch. HP's bid of $24 per share, or $1.6 billion, is 33 percent above the $1.15 billion offer Dell announced last week.

Both companies prize 3PAR for its expertise in the high-end market for cloud data storage, which is increasingly the preferred choice for companies versus purchasing and maintaining their own data centers. HP acknowledged during a conference call with reporters that a previous bid for 3PAR had been rejected in favor of Dell's offer.

“HP’s proposal offers superior value to 3PAR’s shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR,” said Dave Donatelli, executive vice president and general manager of Enterprise Servers, Storage and Networking.

Policies designed to aid the nation's largest banks are putting community banks at a disadvantage, a central bank official said Monday.

"Because the market perceived the largest banks as being too big to fail, they have had the advantage of running their business with a much greater level of leverage and a consistently lower cost of capital and debt," Federal Reserve Bank of Kansas City President Thomas Hoenig said today during a congressional hearing in Overland Park, Kan. 

Hoenig has regularly criticized the federal government's too-big-to-fail policies that he says could hamper lending efforts in local communities where small businesses seek access to credit. 

"The decline in overall bank lending, particularly to small businesses, is a major concern," Hoenig said. 

But he pointed to data showing that community banks are trying to meet lending needs in the community, increasing total loans by about 2 percent as larger bank loans have declined 6 percent. 

More than 1,000 organizations on Monday sent a letter to senators urging them for an open debate on extending the tax cuts enacted by President George W. Bush. 

Industry sources say the recent uptick in construction jobs will likely be fleeting since it is based on federal stimulus dollars that will soon dry up. 

The IRS failed to conduct proper oversight of contractors that received Recovery Act funds, according to a new report from the Treasury Inspector General for Tax Administration.

According to the IG, technical representatives for the IRS are not performing basic oversight duties such as verifying whether the goods and services provided by contractors were acceptable. The officials also failed to keep receipts to verify that contractor invoices for labor and other services were accurate.

The IRS received $203 million in stimulus funds to reprogram its computer systems, update tax forms and improve customer service. As of April, the agency had initiated 26 stimulus projects with a total contract value of $81.9 million.

"IRS management has implemented some of the corrective actions they planned as a result of our previous findings," said J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA). "However, IRS Recovery Act procurements are still at risk that goods and services received are not in compliance with the terms and conditions of the contracts or within the cost and schedule requirements."

In stump speeches this week, House Democrats will highlight their efforts to shore up the economy by talking about the many tax cuts Congress recently passed aimed at helping small businesses. 

The Senate Republicans' campaign arm on Monday pressured Democrats running in competitive races.

HOUSING MARKET LOOMS LARGE THIS WEEK

Tuesday: Existing home sales data for July, by the National Association of Realtors
Wednesday: New home sales data for July, from the Census Bureau
Thursday: July mortgage delinquencies, by the Mortgage Bankers Association
And Friday: the Commerce Deparment is expected to revise downward last quarter's GDP

http://bit.ly/aMnRjA (via Calculated Risk)

DATA LOOKS BLEAK IN THE SHORT AND LONG TERM...

Housing slide threatens to drag economy into recession. Bloomberg: Economists predict Tuesday's report will show a 12.9 percent drop in new home sales from June to July. That would be the biggest monthly decline of 2010.

"Housing led the U.S. out of seven of the last eight recessions. This time, it may kill the recovery. Home sales collapsed after a federal tax credit for buyers expired in April. Since then, the manufacturing-led expansion, which began in the second half of 2009, has been waning, with jobless claims rising and factory orders falling." http://bit.ly/bHeYPL

Housing Fades as a Means to Build Wealth, Analysts Say. NYT, A1: "Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg." http://nyti.ms/a6QWF6

Robert Samuelson calls for reform of Frannie and the mortgage deduction tax break, but not just yet. "In an ideal world, we would discard failed policies. We would trim or end the mortgage-interest tax deduction. We would curtail the GSEs' [government-sponsored enterprise] loans and guarantees (the promise to repay mortgages that default). The consequences need not be dire. ... The trouble is that the ideal solution may be temporarily undesirable. ... The irony is that, in failure, the GSEs have become more important than ever." http://bit.ly/dsoDat

Investors looking to Europe amid U.S. double-dip recession fears. Reuters: "Given a surprisingly robust economic performance, especially in Germany, investors are becoming more sanguine about the single currency region's sovereign debt troubles — once the biggest drag for investors in euro zone stocks and other assets. Concerns that the U.S. economy is slowing, or possibly returning to a recession, has affected other markets, as seen in Friday's fall in Asian and European stocks."
 http://bit.ly/aLj68i

INTERLUDE... NYT asks, "Can Smart Money Management Be Sexy?"

Answer: No.

A survey by ING Direct asked people what they would think of a blind date described as frugal. The results: "Just 3.7 percent answered 'sexy,' while 15 percent picked 'boring' and 27 percent chose 'stingy.' " http://nyti.ms/dmsjqe 

Vice President Biden to tout Obama administration's economic relief efforts at a Chrysler plant in Toledo, Ohio, on Monday.

White House guidance: "At 3:00 PM EDT, the Vice President, Chair of the White House Middle Class Task Force, will deliver remarks about the success thus far of the Administration’s actions to strengthen the American auto industry. ...

"The Vice President will emphasize the role of the Administration’s investments in GM and Chrysler, as well as their suppliers, in helping these companies return to profitability, retain and hire workers, and keep plants open."

Biden will be joined by Ohio Democrats Gov. Ted Strickland, Sen. Sherrod Brown and Rep. Marcy Kaptur.

FREE-TRADE FIGHT: South Korean trade pact back on agenda. WaPo, A1: "... administration officials estimate the deal could mean more than $10 billion annually in increased U.S. exports to Seoul and tens of thousands of new U.S. jobs. ... U.S. opponents of the agreement argue it doesn't do enough to benefit American industry, even as it gives South Korean businesses greater rights in the United States...

"But the more fundamental dispute is over free trade itself. Presidents Bill Clinton and George W. Bush had aggressively promoted it. Yet the appeal of free trade has waned amid large U.S. trade deficits and concerns that more American manufacturing jobs will disappear overseas at a time when unemployment remains stuck near 10 percent." http://bit.ly/d02rcg

Meanwhile... China, facing rising labor costs, is looking to Southeast Asian countries for cheap workers. WSJ: http://bit.ly/aPKewV

Credit card rates up to 9-year high due in part to last year's credit card reforms. They're likely to climb higher. WSJ: http://bit.ly/aP23Kh

Shortly after the report, House Majority Leader Steny Hoyer (D-Md.) blasted Republicans for proposing to extend Bush policies.