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Struggling to persuade Americans that his economic policies are working, Obama will use appearances to set the tone for the autumn campaign.

The argument he will make on trips to Milwaukee and Cleveland and a rare White House news conference is this: Democratic policies have stopped the bleeding and produced some economic growth. Yes, more needs to be done, but Republicans would bring back ideas, he will argue, that propelled the country into the deepest recession in 70 years.

Obama is to make his case with a speech in Milwaukee to a labor rally on Monday, the Labor Day holiday that marks the informal start of the election campaign season.

His visit to Cleveland on Wednesday promises to be more substantive. It is the same city where the top Republican in the U.S. House of Representatives, John Boehner, recently urged the president to fire his economic team.

Administration officials said he will propose making permanent the business tax credits for research, which the White House projects will cost $100 billion over 10 years and would be paid for by ending some corporate tax breaks.

Other items that could also be talked about Obama are a payroll tax holiday, extending tax cuts for the middle class and increasing money for infrastructure spending and clean energy.

STALLING RECOVERY?

The Obama administration is scrambling for solutions to a stubbornly high 9.6 percent unemployment rate and invigorate an economy whose recovery from the recession is in danger of stalling.

University of California economics professor Laura Tyson, a member of the presidents economic advisory board, said targeted job policies such as a partial payroll tax holiday and permanent tax cuts for research and development should be priorities in the current environment.

"All of us here agree we need targeted policies for jobs and right now the deficit is not a major issue," Tyson told CBSs "Face the Nation" program on Sunday. "The major issue is a slow economy, lack of jobs ... we really need to get our priorities right and focus on targeted job creation."

The White House says patience will be required.

"It took years to create our economic problems, and itll take more time than any of us would like to fully repair the damage," said White House communications director Dan Pfeiffer. "There are no silver bullets and anyone who is promising them is not being straight with the American people."

Democrats are facing an angry electorate that could end their one-party rule in Washington. Many experts believe Democrats could lose control of the House on November 2 and perhaps even the Senate, which would make it harder for Obama to advance his domestic agenda on issues like climate legislation.

Additional reporting by Lucia Mutikani, editing by Philip Barbara

Macquarie, dubbed the "millionaires factory" for its senior bankers hefty pay packages, said its first half net profit would fall by a quarter and its fiscal year 2011 profit would be in line with last years.

The forecasts follow two earlier warnings on market conditions and come as analysts and investors call on the bank to cut jobs or pay to protect earnings.

Macquarie is not alone in suffering. Global rivals such as Goldman Sachs GS.N, Morgan Stanley MS.N, investment bank units of JPMorgan JPM.N and Credit Suisse CSGN.VX have all shared grim outlooks.

"The level of deal activity suggests there will be an earnings shortfall in the near-term," said Christopher Hall, chief investment officer at Argo Investments , which owns Macquarie shares.

"But on a two to three year time frame, their focus on unlisted funds, deployment of surplus capital and a general lift in market sentiment should pay off."

Globally advisory fees have fallen as deal flows slowed trading volumes have thinned amid increased market volatility and fears of a double-dip recession.

Equity capital market volumes have slid 10 percent and debt raising have slipped nearly a fifth so far this year, failing to offset a 23 percent rise in mergers and acquisitions volumes, according to Thomson Reuters data.

Macquaries trading and advisory businesses make up nearly three-quarters of its revenue.

At 0422 GMT, Macquarie shares had trimmed losses, down 5.2 percent at A$35.07 in a positive broader market .AXJO. The shares had fallen as much as 8.1 percent to its lowest since June 2009.

The stock, down 28 percent so far this year, has recorded just three annual falls in the past 14 years.

"Conditions in most markets have continued to be weak," Deputy Managing Director Richard Sheppard said in a statement.

"Full-year result continues to be impacted by the cost of our continued conservative approach to funding and capital."

Macquaries prediction for a 25 percent first half profit fall compares with consensus expectations for an 11 percent rise. Its guidance that 2011 full-year profit would be in line with the previous year is also worse than forecasts for a 14 percent rise.

Macquarie until recently consistently beat expectations with its model of buying and pooling assets, listing them on an exchange and charging fees for managing.

But a migration to a more conventional investment banking model in the wake of the global financial crisis has married its fortunes to the market.

Macquarie, which gets almost half its revenue from Australia, has seen its dominance at home slip.

While it has maintained its No. 2 position in the Australia M&A league table, its market share has fallen more than a third, with UBS UBSN.VX gaining at the expense of Macquarie and last years leader Goldman Sachs. It is not among advisors in BHP Billitons BHP.AX $39 billion bid for Potash Corp

POT.TO.

It has fallen to fifth position in its mainstay equity underwriting business ceding ground to Bank of America Merrill Lynch BAC.N, JPMorgan and Royal bank of Scotland RBS.L, according to Thomson Reuters data.

Macquarie, which has A$3.1 billion in surplus capital and A$29 billion in liquid assets, had twice earlier warned concerns about the global recovery had dragged down market activity to their lowest level since 2004, pushing analysts to cut forecasts.

But this is the first time it has given a specific forecast and analysts are expected to slash their forecasts once again.

Editing by Jean Yoon

Chinese insurers are allowed to invest up to 5 percent of their total assets in private equity and related financial products and 10 percent in real estate, according to rules published on the website of the China Insurance Regulatory Commission CSRC over the weekend.

A broader investment pipeline for Chinas 4.5 trillion yuan $661 billion insurance industry could boost long-term investment returns for insurers including China Life and Ping An, benefit cash-strapped private companies, and enable private equity firms such as TPG, and the Carlyle Group to raise money more easily in China.

But the short-term impact on insurers earnings and share prices will be limited, as the new investments will be subject to close regulatory scrutiny, while the capital markets have been expecting the rule changes for years, analysts said.

"Its certainly good news for the insurance sector, and may push up insurers long-term investment returns by 50 basis points to 5 percent annually ," said Tong Chengdong, analyst at Guosen Securities Co in Shenzhen.

"But I dont expect to see any big changes overnight, as it takes time to find good projects and the real estate sector is still subject to government curbs. Besides, the rule changes have long been priced into insurers share prices."

The CIRC said last month that insurance firms would be allowed to invest in private equity and real estate, without publishing detailed rules. Ping An and China Life have already invested in infrastructure projects directly in a pilot scheme.

Ping An shares fell more than 1 percent in Hong Kong in early trading on Monday, while China Life rose more than 1 percent in a broader market that was also up more than 1 percent.

INVESTMENT CAP

Under the new rules, insurance companies are allowed to invest in unlisted financial firms as well as insurance-related businesses including pension, medical and auto services.

The rules cap insurers indirect private equity investments, often through funds, at 4 percent of total assets, and bar them from investing in venture capital funds.

In real estate, insurers are prohibited from investing in residential properties, and must not directly participate in real estate development. Investments in property-related financial products are capped at 3 percent of assets.

"The rules would enable insurers to better match their assets and liabilities, improve asset allocation, ease investment pressure, diversify risks, and protect asset safety as well as the interests of policy-holders," the CIRC said in the statement.

Chinas insurance assets totaled 4.5 trillion yuan at the end of the second quarter, meaning insurers may invest as much as 450 billion yuan into real estate and 220 billion yuan into private equity, the official Shanghai Securities News reported on Monday.

The new rules may help the real estate sector, which is suffering from sluggish sales and funding shortages as Beijing curbs speculation and investment to avoid a property bubble.

Global private equity firms such as TPG, Carlyle and the Blackstone Group, which are racing to launch yuan-denominated funds in China, should also benefit.

TPG last month launched two funds in China and said it was targeting Chinese insurers as potential investors.

$1=6.80 Yuan

Editing by Dhara Ranasinghe