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Huffington Post…

WASHINGTON — An Illinois company has received millions of dollars worth of earmarks from the office of home-state Sen. Dick Durbin (D-Ill.) — while retaining the wife of Durbin’s chief of staff as a lobbyist on the account. Amy Ford Souders, the wife of chief of staff Patrick Souders, registered in 2007 to lobby on behalf of EPIR Technologies , a defense contractor, according to Senate filings. Souders is a founding member of Cornerstone Government Affairs, a well-known, earmark-oriented lobby shop. Her firm no longer represents EPIR. A spokesman for Durbin declined to comment on the earmark, other than to say that Souders did not lobby the office and that there is a strict firewall between Durbin’s congressional business and family members who lobby. The “firewall” policy has been in the news before because Durbin’s wife, Loretta Shaeffer Durbin, is a lobbyist for Government Affairs Specialists in Springfield, Ill., which works with Illinois clients. Durbin’s support of EPIR began before Souders won the lobbying contract, Durbin was not the first lawmaker to back it, and government support of EPIR continues today despite the virtual elimination of the earmark process in Congress. Illinois Rep. Judy Biggert, a Republican, first wrote the Department of Defense on behalf of funding for EPIR in March 2006. EPIR is based in Biggert’s district. According to an undated earmark request form submitted to Durbin’s office and reviewed by HuffPost, EPIR was represented in 2006 by Tom O’Donnell of the Continental Consulting Group. The form instructs lobbyists that it must be emailed before March 1, 2006. The firm asked for $3 million; Durbin requested as much from the Senate appropriations committee, which ultimately awarded $1.8 million for Fiscal Year 2007 and $1.6 million for FY 2008. Souder’s firm signed EPIR in May 2007, according to her lobbying disclosure paperwork filed with the Secretary of the Senate. For that coming fiscal year, the request for an earmark was not made by Souders but by Cornerstone Government Affairs lobbyist Mark Murray, according to the earmark submission form. However, Souders did work on the EPIR account, lobbying the House side in support of the company. The lobbying registration form that was first filed in 2007 and renewed in 2008 and 2009 lists Amy Souders, Mark Murray and Mark Mioduski as the lobbyists working on EPIR’s earmark. In FY 2009, Durbin requested $5.6 million for EPIR, all of which was awarded. FY 2010 brought a $7.2 million earmark. Earmarking has now become too controversial for the Senate to undertake, but EPIR has nevertheless continued to receive government money at the discretion of the Department of Defense. Souders says that she stayed well within the rules and ethical guidelines that govern lobbying when a spouse works in public service. “I worked on the Cornerstone team for EPIR, when they were a client of our firm,” she told HuffPost in an email. “I dealt mostly with the client’s House Rep. I didn’t lobby the Durbin office on this issue. As you may know, the Durbin office has a strict policy on relatives of staff members who are federally registered lobbyists and I follow those restrictions without question.” Durbin’s office ethics policy covers everyone on staff, not just the relatives themselves. “To avoid any appearance of impropriety, the Office prohibits its employees from meeting, conversing, or corresponding with any registered lobbyist who is an immediate family member of the Senator or any Office employee regarding the immediate family member’s ‘lobbying contacts’ or ‘lobbying activities’, as those terms are defined in the Lobbying Disclosure Act of 1995,” according to a copy of the office policy manual dated 2007, and still in force. “The firm employing the immediate family member may lobby the office consistent with the rules of the Senate and all applicable statutes.” Durbin has been public about the EPIR earmarks themselves, pumping out press releases on each occasion, proud of having funded projects back home. “Senator Durbin’s continued support has been extremely helpful, and I expect to continue rewarding his support with innovation and achievement that exceeds expectations and contributes substantially both to the protection of our soldiers, our country, our economic growth and the health of our environment,” Dr. Siva Sivananthan, chairman and CEO of EPIR, said in an a statement put out after one of the announcements. Patrick and Amy Souders attended Marquette University together and both went on to work for Durbin. Amy Souders served on his successful 1996 Senate campaign and Pat Souders, who began as a Durbin intern, became projects director, in charge of funneling federal money back to Illinois. Amy Souders has contributed $2,500 to Durbin over the years, according to records filed with the Federal Election Commission. Earlier this week, the Washington Post investigated members of Congress who’ve won funding for projects connected to family members. The Post didn’t report on Durbin or Souders, but a former Senate aide who’s worked with Patrick Souders told HuffPost that the family phenomenon is fairly common, and that when relatives are involved, staffers and members of Congress aren’t always able to see what the public perception of a situation might be. “I’m sure if Pat looked around the office and somebody else was in this situation, he’d say, ‘Hmm, this doesn’t look quite right,’” said the former aide, who spoke highly of the Durbin aide. “When family’s involved, often times people with the best of intentions have blinders on.” According to records filed with the Senate, CGA earned $70,000 from EPIR in 2007. Between 2007 and 2010, CGA billed EPIR $520,000, the CGA filings state. Durbin himself has faced the dilemma of how to influence public spending while avoiding the appearance of a conflict of interest. A 2005 article in the Daily Herald laid out his thinking: Sen. Dick Durbin also consulted an ethics committee over his wife’s career. In 1997, when Loretta Durbin wanted to start a lobbying firm representing clients before local and state government, the Democratic senator asked about the propriety of being married to a lobbyist. The committee replied that there was nothing improper about it. Four years later, Durbin used his clout on the Senate Appropriations Committee to approve a $150,000 grant for the American Lung Association of Illinois, one of his wife’s clients. The money was to improve a tobacco quit-line and run an outreach program for military veterans. Again, Durbin had a question. This time, he supplied the answer himself. “I did step back and I thought for a second: ‘Now, Loretta represents the Illinois Lung Association. Would I have done this anyway?’ And the answer was clearly yes,” said Durbin, a longtime critic of tobacco whose father died of lung cancer. “I just didn’t think it was fair to say that these veterans wouldn’t get a helping hand because the Illinois Lung Association worked with my wife on state issues.” EPIR’s president didn’t respond to a request for comment.

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Family Affair: Dick Durbin Aide’s Spouse Lobbied For Illinois Company’s Earmark

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Huffington Post…

Since an improbable victory over Honda last week in a California small-claims court, a woman who sued over the disappointing fuel economy on her Civic hybrid says she has fielded hundreds of inquiries from disgruntled owners asking how they can follow in her footsteps. Heather Peters says she has been happy to answer questions, and she’s curious to see how many file small-claims court cases of their own. She’s not the only one. Automakers, legal experts and consumer-rights advocates are keeping an eye on what happens in the aftermath of her victory. Every car company today must advertise fuel economy to comply with regulation. But many–Ford, Hyundai, Chevy, Toyota and Honda, for example– regularly trumpet fuel economy ratings in an attempt to convey quality and innovation, as well as appeal to pocketbooks when gas prices spike. They’ll all have a clearer idea of what they are facing from disappointed consumers and judges soon.

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Woman’s Small Claims Court Win Could Rock Entire Auto Industry

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U.S. Calls Big Swiss Bank A ‘Fugitive’

February 11, 2012

NEW YORK — The U.S. Justice Department called Switzerland’s largest private bank a fugitive from justice on Friday after it didn’t send any representatives to a court hearing in New York, where it has been charged with conspired with American clients to hide $1.2 billion from the Internal Revenue Service. Wegelin & Co. is accused of helping at least 100 U.S. clients conceal huge sums of money from the IRS in overseas accounts. Federal prosecutors said the bank recruited American customers who were concerned about possible prosecution for tax violations at home, including some that had already pulled money out of other Swiss banks because of growing pressure from U.S. law enforcement. Three of the bank’s client advisers were indicted in January. The bank was added as a defendant in the case on Feb. 2 U.S. officials, however, have yet to find a way to move the case forward. The three Wegelin advisers charged in the case, Michael Berlinka, Urs Frei and Roger Keller, have not been arrested and the Justice Department has decided that any attempt to extradite them from Switzerland is unlikely to succeed. The bank was summoned to appear before a federal judge in New York on Friday at 3 p.m., but neither a bank officer nor a lawyer showed. In a statement issued in Switzerland after the court hearing, the bank said it had not been properly served with the criminal summons, and was therefore under no obligation to appear in court. As for the charges, the bank suggested that there was a conflict between US and Swiss law. “The circumstances create a clear dilemma for Wegelin & Co: If it were to adhere to current US legal practice aimed at Swiss banks, it would have to breach Swiss law,” the statement said. The bank added that it would “make every effort to resolve this matter within the boundaries of respectful cooperation.” It is unclear what prosecutors can do next. Wegelin doesn’t have an office in the U.S. Federal authorities have frozen $16 million that the bank had in a correspondent account in the U.S., but that amount is tiny compared to the large sums involved. U.S. District Judge Jed Rakoff, who is presiding over the case, asked prosecutors to make a proposal on how to move the prosecution forward, and suggested involving the State Department, but the hearing ended without any immediate resolution.

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‘Joe The Plumber’: ‘I Don’t Have To Try’ To Stand Out At CPAC (VIDEO)

February 11, 2012

WASHINGTON — HuffPost’s Zach Carter and Howard Fineman on Friday spoke with Joseph Wurzelbacher at the 2012 Conservative Political Action Conference. Wurzelbacher is also known as ” Joe the Plumber ,” a name he was dubbed during the 2008 presidential campaign when he was portrayed as a symbol of middle-class America. CPAC is a major annual event for the conservative movement, and on Friday GOP presidential candidates Rick Santorum, Mitt Romney and Newt Gingrich all addressed large crowds. Yet Wurzelbacher told HuffPost he has no problem distinguishing himself. “I don’t have to try,” he said. “My name is Joe Wurzelbacher. I’m going to speak the truth. And I don’t have to remember what I said five years ago or three years from now because it’ll always be the same thing — because it’s the truth.” Wurzelbacher is now running as a Republican candidate for Congress in the 9th District of Ohio.

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Check Your Statement: Citibank Users Found iPad App Payments Made Twice

February 10, 2012

Customers who use Citibank’s iPad bill-paying app might want to pay closer attention to their bank statements: A technological glitch recently caused the app to charge an undisclosed number of customers twice for bank payments. As early as last summer, Citibank received anonymous complaints, sent to the Apple App Store, about the double charges, according to Andrew Brent, a Citi spokesman. Months later, in late December, the bank detected that its app was to blame for problem. Since then Citibank has alerted affected users and reimbursed them for extra charges and any fees incurred. Brent attributed the lag between when the company first found out about the issue (in July) and when officials began alerting customers (in December) to the small number of complaints involved. One user had anonymously reported in July that a charge was duplicated as a result of double tapping the screen, according to Brent. He added that there was nothing to suggest that the incidents were linked to the iPad app itself. Citi later discovered that the app had been programmed to reattempt any transaction disrupted by a network error on the first try. The bank launched an update to its iPad app on Jan. 31. The glitch was first reported by The New York Times on Thursday. The issue affected less than 2 percent of transactions made via the iPad app, according to Brent. He declined to disclose the number of customers who use the bank’s iPad app and how many people were affected by the glitch. “We take seriously the functionality of our products and services as well as the satisfaction of our clients,” Brent stated in an email. “Upon discovering a technical bug in our Citibank for iPad app had caused a limited number of clients to encounter duplicate payments and/or transfers, we immediately fixed the technical issue. Even more important, we have reached out to clients who were impacted to ensure their individual situations are resolved completely.” Citigroup — which aims to be “the world’s digital bank,” according to Bloomberg — has encountered a series of tech glitches in recent years. Two-hundred thousand Citibank credit card holders fell victim to a hacker attack last June that exposed customers’ personal data. In 2010, Citigroup admitted that the bank’s iPhone app stored users’ confidential information on their phones, making the data vulnerable, according to the Wall Street Journal . The bank subsequently released an updated version of the app that it said patched up the glitch. According to American Banker , 25 percent of all mobile banking apps earned a “fail” rating as a result of security flaws.

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Fake Suicide Call Prompts Woman To Sue Big Bank

February 10, 2012

These days, debt collectors are putting some people through so much pain that it’s landing them in the hospital. Anne Sessions of Lane County, Oregon is suing Wells Fargo after one of its debt collectors reported to police that that the 85-year-old was threatening suicide, a claim she maintains was false, The Oregonian reports . After hitting financial trouble, Sessions says she arranged a payment plan for her credit card debt with Wells Fargo last year, but just days later she allegedly received a call from a debt collector who badgered her with a “contemptous tone,” according to the lawsuit. Sessions told the collector that such abuse may cause other customers to take their own lives, which allegedly prompted a line of questioning that included the collector asking Sessions: “But…if you did [commit suicide], how would you do it – hurt yourself?” Courthouse News reports . Within a half hour police arrived at Sessions’ door and forcibly took her to the hospital. She was released hours later after hospital staff said they “strongly” believed Sessions was not a threat to herself or others, ABC News reports . But the incident left Sessions stuck with a hospital bill worth $1,055, for which she is seeking compensation, as well as $250,000 in punitive damages. Sessions’ suit may involve one of the more puzzling instances of debt collector abuse recently, but harassment of its kind is far from uncommon. Complaints filed to the Federal Trade Commission about debt collectors rose to 140,036 in 2010, up from 119,609 in 2009 . The boost may be explained in part by the industry’s growth in a troubled economy that’s caused many Americans to delay debt payments. Over the next three years, the debt collection industry is expected to expand by 26 percent . Indeed, all the negative reports — collection agencies are responsible for the most complaints to the FTC of any industry — may be beginning to take a toll. The FTC has begun cracking down on illegal debt collecting tactics , including repeated calls to the debtors, failure to notify consumers in writing of their rights, misrepresenting the debt in question as well as using profanity or threats. Last month it settled with Michigan-based debt collection company Asset Acceptance for $2.5 million on charges of misconduct . It also took action against two California-based collection agencies last year, one for attempting to collect debts that didn’t exist and the other for threatening to kill debtors pets and desecrete the bodies of deceased family members .

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Hundreds Of Millions More Dollars Of MF Global’s Money Thought Missing

February 10, 2012

The trustee overseeing MF Global’s liquidation said Friday that the shortfall between the funds under his control and the amount customers of the failed brokerage are expected to claim is at least $1.6 billion. The gap estimated by the court-appointed trustee, James Giddens, compares with his previous estimate of $1.2 billion. Giddens said in a statement Friday that the new estimate is based on his investigation and it could change again. Giddens has been combing through the accounts of MF Global since it filed for bankruptcy protection on Oct. 31. The collapse of MF Global, which was headed by former New Jersey Gov. Jon Corzine, was the eighth-largest corporate bankruptcy in U.S. history. Most of the $1.2 billion previously reported missing has been traced to customer accounts and banks. Regulators are investigating whether MF Global tapped money from clients’ accounts as its financial condition worsened. That would violate securities laws. Brokerages are required to keep customer money separate from the firm’s money. Unlike the previous figure, the new estimate of $1.6 billion includes about $700 million in customer money located in Britain. Giddens is in a legal dispute over that money with the administrator in Britain overseeing the liquidation of MF Global’s division in London. The new estimate excludes some customer claims that haven’t been filed yet. It also takes into account some funds that have been recovered since the earlier estimate was made in November. Giddens said about 40 percent of the claims filed by U.S. commodities customers of MF Global came from five states: California, Florida, Illinois, New York and Texas. Around 91 percent of the claims are for less than $100,000, according to his statement. Much of the missing money belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from the fluctuating prices of commodities such as corn and wheat. Giddens has returned about $3.9 billion to customers.

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Trader Joe’s Relents To Pressure, Signs Fair Food Agreement

February 10, 2012

Trader Joe’s relented this week and signed a Fair Food Agreement with the Coalition of Immokalee Workers (CIW), a community-based organization of mainly Latino, Mayan Indian and Haitian immigrants employed in low-wage jobs in Florida. The agreement requires the grocery store to pay a penny more per pound of tomatoes and to ensure better working conditions for tomato workers. In the past year, protesters have become a common sight at Trader Joe’s locations across the country in response to the chain’s refusal to sign the agreement . Chains like Taco Bell, McDonald’s, Burger King and Whole Foods all signed the agreement years ago. “This is nearly a 50 percent raise for the workers,” Barry Estabrook, the writer behind PoliticsOfThePlate.com and author of the book ” Tomatoland ” (about large-scale tomato agriculture), told The Huffington Post. “These are desperately poor people.” “We are truly happy today to welcome Trader Joe’s aboard the Fair Food Program,” said Gerardo Reyes of the CIW, in a jont press release issued by the coalition and Trader Joe’s. “Trader Joe’s is cherished by its customers for a number of reasons, but high on that list is the company’s commitment to ethical purchasing practices. With this agreement, Trader Joe’s reaffirms that commitment and sends a strong — and timely — message of support to the Florida growers who are choosing to do the right thing, investing in improved labor standards, despite the challenges of a difficult marketplace and tough economic times.” Although jointly issued, the press release did not have a comment directly from Trader Joe’s. The grocery chain told HuffPost via email that it had nothing further to say beyond the release. Estabrook, who last spoke to Trader Joe’s in the fall of 2011, said he found the company’s attitude to be “almost belligerent” when a group of religious leaders tried to present it with a petition in October of last year. But the CIW had a 40-city protest planned for this weekend , and Trader Joe’s may have felt compelled to finally sign on, he said. The protests have now been canceled. “Trader Joe’s presents an image of friendliness and fairness. When you’re doing that, you can’t very well have a group of people demonstrating in front of your stores,” Estabrook said. The CIW now plans to focus its attention on the major supermarket chain Publix, and has a six-day fast planned for next month. Trader Joe’s opened its first Florida store in Naples on Friday, one day after signing the CIW agreement. In a weird twist of fate, the store is located on Immokalee Road.

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S&P Downgrades Huge Number Of Italian Banks

February 10, 2012

MILAN, Feb 10 (Reuters) – Rating agency Standard & Poor’s downgraded 34 Italian banks on Friday, including heavyweights UniCredit and Intesa Sanpaolo, citing a reduced ability to roll over their wholesale debt and expected weak profitability. The move follows S&P’s downgrade of Italy’s sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries. In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 — out of 10 groups — reflecting its more negative view on Italy’s banking system. “Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” it said. “We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital. We believe this may be negative for the Italian banking industry’s stability.” Italian banks have borne the brunt of a sell-off in Italian assets since the euro zone’s third-largest economy was dragged into the single currency bloc’s debt crisis last summer. Because of their vast holdings of domestic government bonds, Italy’s top five banks have been asked to find some 15 billion euros by June to meet tougher capital requirements set by the European Bnaking Authority. Lenders have also been effectively shut out of wholesale debt markets and have increased their reliance on cheap funds from the European Central Bank. Italian banks tapped a whopping 116 billion euros of nearly 500 billion euros of three-year funds offered by the ECB last December, easing funding strains. A similar operation will be held at the end of February and analysts expect Italian banks to further increase their borrowing from the ECB. S&P said weak profitability and increased cost of capital could lead Italian banks to write down a large part of the goodwill they booked during a wave of industry consolidation over the past decade. Such writedowns forced UniCredit, Italy’s biggest bank by assets, to announce a 10.6 billion euro loss in the third quarter of 2011. Among the banks downgraded, Banca Monte dei Paschi di Siena and Banco Popolare had their rating cut below that of Italy’s sovereign debt. For a list of the banks affected by S&P’s downgrades, please click on

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Ben Bernanke: Blame Housing For This Lousy Recovery

February 10, 2012

Housing, with some help from Wall Street, got us into the Great Recession, and it is housing that has made the recovery from that recession so slow and painful, Federal Reserve Chairman Ben Bernanke said today. “The state of the housing sector has been a key impediment to a faster recovery,” Bernanke said in a speech at the National Association of Homebuilders International Builders’ Show in Orlando, Florida on Friday. “In the typical economic recovery, a resurgent housing sector helps fuel reemployment and rising incomes,” he added. “But as you know all too well, that scenario has not played out this time.” Bernanke cited economic studies that suggest the collapse in home prices might be shrinking consumer spending, the largest engine of U.S. economic growth, by between $200 billion and $375 billion a year. Underwater homeowners are also unable to move to find better, higher-paying work or borrow against home equity to help with emergency expenses, Bernanke observed. So begins the vicious cycle in which clusters of foreclosed homes lower property values throughout entire communities and hurt property tax revenues, which lead to cutbacks in municipal services that push house prices still lower. Economists have seen evidence lately that the housing market might finally have hit a bottom after a collapse and slump that has lasted more than six years. But home prices and new-home construction are still in a deep pit despite record-low mortgage rates that have made housing theoretically more affordable than ever . The Fed helped push those interest rates to rock-bottom lows in part to support the housing market. But their efforts have mostly been met with frustration. Bernanke suggested the still-weak housing market might be making it hard for low rates to do much good. Banks, suffering from losses on bad mortgages are afraid of taking still more losses so tighten lending standards, making borrowing more difficult even at low rates. “The Federal Reserve, in its supervisory capacity, continues to encourage lenders to find ways to maintain prudent lending standards while serving creditworthy borrowers,” Bernanke said. “But the slow recovery of the housing market and the economy” and other factors are keeping lenders cautious. He also acknowledged that the recovery in housing will continue to be painfully slow, estimating that one million foreclosed homes owned by banks could hit the market each year “for the next few years,” keeping downward pressure on prices. One possible solution, he acknowledged, would be to turn some of these foreclosed properties into rental properties, to help meet rising rental demand. But he also acknowledged there was no silver bullet for housing. Without it, the recovery could stay slow and painful for a while longer.

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Jed Kolko: The Robo-Signing Settlement: Breaking the Usual Rules of Housing Policy

February 10, 2012

The robo-signing settlement is the latest — and potentially the largest — piece in the U.S. housing policy puzzle. Even though it’s partly punishment for banks’ wrongdoing, it is also another answer by the government to the question of how it can help the housing market. Our own housing policy survey last December showed strong bipartisan support for two key elements of the robo-signing settlement: refinancing by underwater homeowners (82 percent of Democrats, 69 percent of Republicans), and loan modifications to reduce principal balances (74 percent of Democrats, 61 percent of Republicans). With the robo-signing settlement, as with any housing policy, I look at three questions: 1) Is it big or small? Relative to other housing policies, it’s big. It calls for much more money for loan modifications than HAMP has cost so far, and it could mean money or relief for close to two million current and former homeowners. HAMP and HARP have each helped roughly one million homeowners so far. But relative to the housing crisis, it’s small. The loan modifications could yield tens of billions in principal reductions for one million homeowners — but that’s a sliver compared with the 11 million homeowners today who are over $700 billion underwater. And the cash compensation of $1,500-$2,000 for up to a million people who lost their homes will hardly make them whole. 2) Who pays? Usually it’s good politics to keep quiet about who pays for housing policy, but not with the robo-signing settlement. It’s good politics for the government and the attorneys-general for everyone to know that the banks are paying for their robo-signing sins. In contrast, most housing policy announcements hide — or at least don’t broadcast — who is paying, whether it’s investors who implicitly bear the cost of refinancing or taxpayers who implicitly bear the cost of many other policies. 3) Does it reward risk-taking or bad behavior? Delinquency is a disqualification for refinancing but is almost a requirement for getting a principal reduction. The largest piece of the robo-signing settlement is for principal reduction for borrowers who are “either delinquent or at imminent risk of default.” This is opposite of the refinancing rules laid out in HARP and the State of the Union address , which require borrowers to be current on their payments because that shows they’re “responsible.” So much for a coherent message from the government to homeowners about moral hazard. This issue could be fuel for election debates on housing policy: Republicans are much more bothered by rewarding bad behavior than Democrats are. In our December survey of consumers, 61 percent of Democrats agreed that “helping people keep their homes is the right policy even if it helps some undeserving homeowners,” but only 38 percent of Republicans agreed.

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Van Jones: Bank Settlement: $25 Billion Down, $675 Billion to Go

February 10, 2012

This week a $25 billion settlement was announced in which big banks pay up for a portion of their bad deeds in the home foreclosure crisis. Everyone is trying to determine whether this is a good deal or a bad deal. Here is how I score it. This deal represents small progress on a small problem. Now it’s time to make big progress on the big problem. Don’t count on finding many good points in the deal itself, because there aren’t a lot. In fact, the main win can be found in what’s NOT in the deal. A truly horrible deal would have let the banks write a small check and then seal the door on all further investigations and pursuits of accountability. This deal does NOT do that. Because this settlement limits legal immunity for banks, this deal does not automatically let the banks off the hook for all of their wrong-doing. Except for a few issues like robo-signing, state attorneys general can still fight for more compensation and relief for the banks’ victims. Government officials can proceed with investigating and prosecuting banks for their role in crashing the economy and the housing market. In other words, the door is still open to solve the much bigger problems we face. Our fight for justice can, and will, continue. That is small comfort, perhaps, but it was hard won. So we should honor the hard work of New York State Attorney General Eric Schneiderman, California Attorney General Kamala Harris and others, including many grassroots progressive organizations like New Bottom Line. They fought courageously to prevent a total sweetheart deal for the banks. This outcome is the result of determined activism, and without this heroic effort, the deal would have been drastically worse. That said, there is a reason why many progressives and housing advocates are furious, and why many struggling homeowners are left wondering, “How does this help me?” Millions of homeowners and families are still suffering under the tremendous weight of a debt blanket that is smothering the economy. This $25 billion settlement helps only a fraction of those homeowners and addresses only a very limited set of fraudulent behaviors. A number of homeowners will get some cash payments, but the amounts are negligible compared to the pain and injustice they have experienced. The actual total cash paid out by the banks is only $5 billion dollars, to be split among the nation’s largest banks — hardly a stiff penalty considering that the six largest banks in the U.S. paid $144 billion in bonuses last year. And enforcement mechanisms remain murky. We must not forget the more than 14 million homeowners (one in five) whose homes are underwater, beneath a crushing total $700 billion in negative equity. We must not forget the more than 4 million families who have lost their homes. We must not forget the millions of families who are in some form of foreclosure proceedings on this very day. These are the Americans who have suffered and continue to suffer. They are worried today, like yesterday, whether they will still have a home to live in tomorrow. They are the ones who must choose every month whether to pay bills or to feed their children. Here are three things that must happen next: 1) The U.S. Department of Justice and state attorneys general must investigate and prosecute banks more aggressively than ever, at a much larger scale than anything that has happened to date. 2) We must force banks to make massive principal reduction of hundreds of billions of dollars, to immediately relieve the 14 million homeowners in the country who have underwater mortgages. 3) We must change laws and regulations to prevent this kind of crisis and fraud from ever happening again. Two weeks ago, I called for hundreds of billions in principal reduction for homeowners. This would free up Americans to start new businesses, spend money on worthwhile products and services, and invest in their children’s futures. We still need to address the $700 billion in negative equity, which in turn is only part of the nearly seven trillion dollars in total lost equity created by the banks’ irresponsible, and in some cases, illegal practices. We need a solution at the scale of the problem, so that families can get back on their feet, the economy can get working, and people can reach for their American dreams again instead of watching them drown. That is why I say: $25 billion down, $675 billion to go.

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Greek Police Union Threatens To Arrest EU, IMF Officials

February 10, 2012

Greece’s largest police union has threatened to issue arrest warrants for officials from the country’s European Union and International Monetary Fund lenders for demanding deeply unpopular austerity measures.

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Athens Burns As Eurozone Rejects Greece Bailout Deal

February 10, 2012

ATHENS, Greece (AP) — Thousands took to the streets of Athens as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece’s crucial international bailout was put in limbo by its partners in the 17-nation eurozone. Clashes broke out in Syntagma Square, outside Parliament, as dozens of hooded youths threw fire bombs and stones at police, who responded with tear gas. No arrests or injuries were reported. Police said some 7,000 people took part in the demonstration. Another 10,000 Communist supporters held a separate, peaceful march, chanting slogans against cutbacks that include reducing the minimum wage by 22 per cent and cutting one in five government jobs in a country which is in its fifth year of recession. Bailout creditors say Greece has not yet met demands for all the required austerity measures and, frustrated by days of dithering, have given political leaders in Athens until the middle of next week to do so. Otherwise, the country will lose its rescue loan lifeline, go bankrupt next month and likely leave the euro. “We are experiencing tragic moments,” Deputy Prime Minister Theodoros Pangalos told Parliament Friday. “These days are the last acts of a drama that we all hope will lead to a happy conclusion with a voluntary reduction in our public debt and implementation of a framework by 2015 that will allow the economy to stabilize.” The Greek coalition government, led by Prime Minister Lucas Papademos had hoped some of the heat had been taken out of the crisis after leaders agreed Thursday to a raft of austerity measures they hoped would pave the way for the €130 billion ($173 billion) bailout package. However, finance ministers from the other 16 eurozone states put up a roadblock later in the day by insisting that Greece had to save an extra €325 million ($430 million), pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April. A Cabinet meeting has been called for the afternoon, while the majority Socialists and the conservatives were later to hold party meetings to discuss the cutbacks. The new hurdles Greece has to clear to avoid a default that could send shock waves around the global economy dented sentiment in the markets Friday. Stocks were down all over Europe, with the benchmark index in Athens 1.8 per cent lower in early afternoon trading. While facing intense pressure abroad, Greece is having to deal with another strike. The country’s two biggest labour unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted. Unions were planning protests in Athens and other cities around midday. Prime Minister Papademos and heads of the three parties backing his government have already agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending. But the party leaders balked at demands for more cuts to already depleted pensions, later issuing nebulous assurances that a solution had been found. “Unfortunately, the eurogroup did not take a final, positive decision,” Finance Minister Evangelos Venizelos said after Thursday’s talks in Brussels. “Many countries expressed objections, based on the fact that we did not fully complete the list of additional measures required to meet our targets for 2012.” “The choice we face is one of sacrifice or even greater sacrifice — on a scale that cannot be compared,” Venizelos added. Once all the demands have been fulfilled, the eurozone will give Greece the green light to start implementing a separate bond swap deal with banks and other private investors designed to slice some €100 billion ($132 billion) off Greece’s debt load. EU Commission President José Manuel Barroso on Friday offered hope a deal could still be struck. “I am confident that a solution will be reached next week as this is critically important for Greece and the Greek citizens first and foremost but also for the whole euro area,” he said during a visit to India. “I therefore call on the responsibility and the leadership of the Greek leaders and all members of the eurozone so that we can obtain this goal that is important for the euro area and indeed for the global economy.” France’s central bank chief Christian Noyer also urged Greece to accept the “reasonable and indispensable” austerity plan. “Greece needs to do what other countries are doing, countries that have been in difficulty but are completely in line with the recovery plans,” Noyer said on Europe-1 radio Friday. “Greece has to accept all of this.” But on the streets of Greece, the mood is grim, after two years of severe income losses, repeated tax hikes and retirement age increases that failed to signally improve the country’s finances. Unemployment is at a record high of 21 per cent — with more than a million people out of work — while the economy is in its fifth year of recession and is expected to contract up to 5 per cent in 2012. The country’s politicians have taken a lot of criticism for the situation, and polls show the majority Socialists, elected in a 2009 landslide are now languishing at around 8 per cent. A Greek Socialist lawmaker resigned his seat Friday to protest the new austerity, a day after the country’s deputy labour ministry stepped down from his position for the same reason. But the resignation of Pavlos Stasinos will not affect the party balance in Parliament, as he will be replaced by another Socialist deputy. “It is unacceptable that right now our politicians’ petty political and public relations manoeuvring should be leading the country to bankruptcy,” respected Kathimerini daily said in an editorial. “The country is tumbling towards a cliff-edge, and a tough European establishment is putting out the view that Greece cannot be saved and lacks credible politicians. Our politicians back that view with their carryings-on.” Ta Nea daily accused Greek politicians of “theatrics and shilly-shallying,” and urged lawmakers to back the new measures in the Parliamentary vote, tentatively planned for Sunday. “Nobody can happily back the painful agreement with the troika,” it said in an editorial. “But neither can anyone shoulder the burden of the consequences, if the agreement is not completed.”

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Lehman Brothers Suing Citi Over Huge Account

February 10, 2012

NEW YORK — Lehman Brothers Holdings Inc. and its creditors are suing several units of Citigroup Inc. to recover $2.5 billion the failed investment bank transferred to a backup account at Citi months before seeking bankruptcy court protection. In the complaint filed on Wednesday with the U.S. Bankruptcy Court for the Southern District of New York, Lehman claims that Citibank is wrongfully withholding the money as a potential source of funds in a dispute over derivative contracts. Lehman also is asking the court to disallow what it says are $2 billion of “inflated and legally unsupported” claims that Citibank has asserted against it. In a statement Thursday, Citigroup vowed to defend itself and its right to recover losses from Lehman’s collapse. It called the lawsuit unjustified and accused Lehman of trying to renege on its obligations and claw back assets to which it has no right. According to the lawsuit, Citi demanded on June 12, 2008, that Lehman transfer between $3 billion to $5 billion into an account to cover potential overdrafts by Lehman subsidiaries that were using Citi’s clearing and settlement services. Lehman agreed that same day to set aside $2 billion from its account at Citibank into a segregated account, on the condition that the bank would have no lien or other rights to the funds. In its statement, Citi said that it tried to help Lehman prior to its bankruptcy filing, but needed to obtain the guarantees and cash deposits from Lehman in order to protect its shareholders from potential losses. Lehman claims that by holding on to the $2 billion, Citibank is violating the U.S. bankruptcy code, state law and going against the conditions both agreed to when the funds were set aside. In addition, Lehman asserts that Citibank has refused to return another $500 million in cash that was transferred into its broker-dealer subsidiary just hours before Lehman filed for bankruptcy protection. Lehman’s bankruptcy filing in September 2008 was the biggest in U.S. history and triggered more than 75 separate bankruptcy proceedings. The company listed more than $600 billion in debts when it filed. Lehman Brothers Holdings is the company that controls what’s left of the investment bank’s assets. Citigroup shares ended regular trading down 57 cents to $33.66 on Thursday. The stock slipped another 8 cents to $33.58 in extended trading.

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Another Big Bank Slashes Its Bonus Pool

February 10, 2012

LONDON — Barclays PLC revealed Friday that it is slashing its bonus pool after earnings at its investment banking division fell sharply and dented overall profitability. The bank said it was taking the action as it reported that its profit after taxes fell 15 percent last year to 3 billion pounds ($4.8 billion) from 3.56 billion pounds the year before even though income rose 2.6 percent to 33 billion pounds. Much of the profit decline was due to a 32 percent fall in pretax profit at the Barclays Capital investment banking unit to 2.97 billion pounds. The bank said the average bonus for Barclays Capital employees will be 64,000 pounds ($101,000), down 30 percent from 2010. The total bonus pool was cut by 25 percent and the average bonus per employee will be 21 percent lower at 15,200 pounds. “We need to balance remaining competitive with being responsive to the public mood,” Chief Executive Bob Diamond told reporters after the publication of the results. Bonuses are a highly sensitive political issue in Britain, particularly at Royal Bank of Scotland and Lloyds Banking Group which were bailed out by taxpayers. Lloyds chief executive Antonio Horta-Osorio and RBS CEO Stephen Hester have both waived their bonuses, though Hester did so only after coming under intense political pressure. Barclays said bonuses for executive directors and the eight highest paid senior executive officers would be down 48 versus 2010 on a like-for-like basis. Diamond received a bonus in shares worth 1.8 million pounds last year. Barclays said no one would get a cash bonus of more than 65,000 pounds. A more detailed look at the results show that the bank’s adjusted pretax profit of 5.6 billion pounds fell short of the consensus forecast of 5.8 billion pounds. After initially opening lower, Barclays shares in London were trading 2.9 percent higher after an hour of trading. Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, said the initial sell-off appeared to respond to the disappointing top line results and that the upturn fed on more positive news within the earnings report. Hunter noted a 48 percent gain in pretax profit in the retail and business banking, a return to profit in the corporate division, a 9 percent hike in the dividend to 6 pence and a “sturdy” Tier 1 capital ratio of 11 percent. Barclays shares are now at their highest level since July. A year ago they were trading at about 330 pence but fell as low as 139 pence in September.

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Google’s $12.5 Billion Deal Expected To Be Approved

February 9, 2012

By Diane Bartz WASHINGTON (Reuters) – The Justice Department will approve Google’s $12.5 billion bid to acquire Motorola Mobility Holdings Inc, according to sources close to the antitrust review. The department is also expected to approve an Apple-led consortium’s bid to acquire a group of patents from bankrupt Canadian company Nortel Networks. Both deals are expected to be cleared early next week. Google, whose Android software is the top operating system for Internet-enabled smart phones, announced in August it planned to acquire phone-maker Motorola Mobility. The deal will give Google one of the mobile phone industry’s largest patent libraries, as well as hardware manufacturing operations that will allow Google to develop its own line of smart phones. The Apple-led consortium, which includes RIM, Microsoft, EMC, Ericsson and Sony, had agreed in July pay $4.5 billion for 6,000 patents and patent applications that telecom-equipment maker Nortel had put up for sale, including coveted 4G wireless technologies. The companies joined forces to outbid Google for the patents. Google, the world’s No. 1 search engine, has been under increasing regulatory scrutiny. The U.S. Federal Trade Commission and the European Union are both investigating Google’s business practices. The company faces accusations it uses its clout in the search market to beat rivals as it moves into related businesses. The Justice Department will likely continue monitoring patent litigation in the telecom space, according to the sources. The department of Justice, Google, and Apple did not immediately respond to requests for comment. (Reporting By Diane Bartz; Editing by Tim Dobbyn)

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SEC May Target Big Banks In Lawsuit Over Mortgage-Backed Securities

February 9, 2012

Regulators may be preparing a lawsuit against some of the country’s largest banks in order to probe their role in the acceleration of the financial crisis. The Securities and Exchange Commission is planning to formally warn a number of firms that sold mortgage-backed securities in the years leading up to the meltdown of an impending enforcement action, the Wall Street Journal reports. At issue is whether banks knew at the time that the mortgages backing their securities were of poor quality — and whether the banks nevertheless presented a picture of the loans that was misleadingly reassuring. Mortgage-backed securities are generally believed to have played a central role in the near-meltdown of the national banking system a few years ago. The country’s largest financial firms repeatedly bundled subprime mortgages and used them to guarantee securities that were sold to investors. When those mortgages proved unsound, it triggered a series of financial failures that dealt a severe blow to the national economy. If such a lawsuit does come to pass, it would be part of a broader effort on the part of the federal government to assign responsibility for the financial crisis — and to better regulate hazardous trading practices and high-risk financial instruments in the hopes of preventing another one. At the same time, the SEC has been criticized for not doing more to stamp out misconduct. In 2009, one prominent whistleblower called the agency ” captive to the industry it regulates .” Multiple lawsuits and inquiries have already raised the issue of whether banks misrepresented the health of mortgage-backed securities during the housing boom. JPMorgan Chase faced one such suit last year, as did Washington Mutual and Bank of America’s Merrill Lynch division . Goldman Sachs is currently facing a potential class-action suit from investors over whether it purchased a number of mortgage-backed securities in 2005 without first examining their health. Goldman was also accused last year, by an investigatory Senate panel, of misleading Congress and investors as to the safety of the mortgage-backed securities it was selling. News of the possible suit comes at a moment when banks are already being called to account for their handling of another result of the collapsing housing market: the foreclosure crisis. On Thursday, the government announced that it had reached a $25 billion settlement with some of the country’s largest financial firms — among them Citigroup, Ally and BofA, all said to be targets of the SEC investigation — over charges that the banks engaged in systematic and widespread mortgage fraud. No major bank executives have yet to face prison over their role in the worse financial crisis since the Great Depression.

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The Greenest Car Of 2012 Is…

February 9, 2012

From Mother Nature Networks’ Melissa Hincha-Ownby: The American Council for an Energy-Efficient Economy (ACEEE) has published its 14th annual Greenest Cars List and for the first time an electric vehicle takes the number one spot. The new Mitsubishi i-MIEV bested the Honda Civic Natural Gas , which held the number one spot for eight straight years. A variety of environmental criteria are assessed when evaluating a vehicle’s green score, including the emissions created by the power plant used to provide electricity to the i-MIEV and other electric vehicles . The changing face of the eco-friendly automotive scene actually led to a few changes in the ACEEE’s methodology this year. “This year, a number of updates were made to the Green Book® methodology to more accurately estimate vehicles’ environmental impacts. These include improved emissions estimates for the vehicle manufacturing process, changes reflecting current natural gas extraction practices, and consideration of upcoming shifts in the generation mix for the electricity used to power electric cars.” Source: ACEEE One very prominent electrified vehicle is missing from this list, the Chevy Volt . According to CNNMoney.com , “That’s because the ACEEE uses vehicle weight as a criterion for scoring, under the assumption that a heavier vehicle causes more waste in production.” Unfortunately for General Motors, the Chevy Volt was their best chance for inclusion on the list. Instead, the Greenest Cars of 2012 list is dominated by Japanese imports. General Motors and other Detroit-based automakers are receiving unfavorable recognition on the Greenest List’s companion, the Meanest Vehicles for the Environment in 2012 . Both the Chevrolet G3500 Express Cargo van and its GMC cousin, the G3500 Savana tied with the Ford E-350 Wagon for the Meanest Vehicle of 2012 with a Green Score of 17. For those that cry foul, there are electric cargo vans on the market that are a viable alternative to these gas-hogging beasts. The 2012 Greenest List and each vehicle’s corresponding Green Score follows:

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Occupy Y’All Street: Occupy Charlotte Activist Gambles Everything On The Movement

February 9, 2012

This is the fourth in a series of stories and short films on under-publicized Occupy sites. The first is here , the second is here , and the third is here . Stay tuned in the coming days for more from our road trip through the South. CHARLOTTE, N.C. — Vic Suter is looking for Ghost. She sloshes through the slick grass and soggy leaves matting the grounds of the Old City Hall. She and the rest of Occupy Charlotte have called the property home since early October. She knows every sign, every tent in this place. But it’s Ghost’s tent that she wants. A cold rain begins to fall steadily on a camp that’s all but deserted. Vic, 22, doesn’t care. Vic motors past tents sagging under layers of tarp and other jerry-rigged, middle-of-the-night weatherproofing. Dragging a cardboard sign with a bitten corner, she ignores all those tents before finally stopping at a giant beige orb, outfitted with a mesh enclosure that gives off a screened-in porch effect. There’s room for three chairs and what look like wind chimes. Ghost has his shit together. “Hey Ghost?” she shouts, a few feet from his tent. Vic leans into the orb’s entrance. Her face, curtained by her brown hoodie, is pale and expectant. Even at 11 a.m. in early November, she looks game. “Hey Ghost! You in there?” The orb shows no signs of life. “You got to Godzilla people’s tents — shake them, nag them to get up and go on a march,” she explains later. Vic lets out one long “Ghooouuuust!” in a nagging sing-song. She thinks this is funny. She stoner-laughs to herself. The rain sounds like it’s hitting the trees a little harder. Vic fiddles with the orb’s flaps. “Let’s see.” The tent is locked. “No, he’s not here.” Vic finally has to give up. She trudges past the orb in her untied black army boots — shitkickers her stepfather wore when he turned 18 in Vietnam. She says she’s worn them every day since high school. Instead of lockers and jocks, she has to stomp past an empty bucket, empty plastic chairs and more empty tents. Ghost is a memory. She’s looking for James and Bobby, and somebody named Peanut. Vic hits on the last of the tents located at the outer edge of the camp. They’re quiet, too. “Where is everybody?” she asks. A month earlier, the Occupy activists in Charlotte had drawn more than 500 to their first march uptown, a noisy success that included a stop at Bank of America’s North Tryon Street headquarters, where the throngs chanted up its 60 stories. The building — the tallest in the state and a dominant spear in the city’s skyline — had been a force for civic pride. But since the Great Recession, the bank has become one of the country’s great villains. The Wall Street of the South now had its own potent occupation. The early general assemblies could number in the hundreds. The meeting participants were drawn by growing income disparities, rising college tuition costs, the region’s environmental decay. They were among the metro area’s double-digit unemployment rate. They realized they were everybody. Vic had joined on the first night and had been charged with welcoming newcomers and teaching them the movement’s hand signals. Soon she began organizing three marches each day to one spot. This was her work week. Charlotte’s downtown had grown rich with examples of injustice wrapped in glass and outfitted with bad public art. Vic filled up to-do lists with ideas for future marches. For years, she had searched for her place. She tattooed “Restless” in black cursive script on her shoulder. But at Occupy, she thought she might have found her calling, and her very own tribe in the buckle of the bible belt. She fell hard. “When you’re throwing yourself into something,” she explained to us, “you don’t have a lunch break. You don’t have time off. You don’t get a vacation from a long-term protest.” The movement proved it could inspire people like Vic to produce Pastebin manifestos, YouTube gotchas, and a working kitchen. But a month or so in, Occupy began facing an important dilemma that they have yet to resolve. How does a non-hierarchical movement avoid arguing itself into oblivion? How does it sustain the true believers? As the days got colder, and inertia seeped in, the general assemblies got smaller and so did the press stories. Even before the big city camps were razed, a lot of activists had already burned out. But Vic never did. The problem for Vic was that the chants never got old. Vic wants Ghost and Peanut for a march that will begin in a half hour and lead her — and as many willing activists as she can cajole — from their camp, through downtown Charlotte to Duke Energy’s headquarters. Vic chose the energy mega-company for its planned rate hike ; its environmental record and its hold on power in the region and beyond — planners for the Democratic National Convention, to be held in Charlotte, rely on a $10 million line of credit from the company. She is still exuberant about this march — even if it means chanting in the rain to stone-faced security guards in Charlotte’s bank-building canyon. Not everyone in Occupy Charlotte is as charged up. Last night, Vic says she begged three fellow activists to get her up on time for the morning march. Her cell was dying and she couldn’t depend on its alarm. “None of them wake up,” she explains of her neighboring activists. “Thanks guys.” She ended up oversleeping. Vic trudges back toward the camp’s center, first stopping at the information desk’s uncovered table and filing cabinet. A fellow activist shows her his sign — it’s the state outline with a fight-the-power fist punching up through its midsection. Vic approves. “That’s awesome. Right on. Hell yeah.” A small group of guys are standing by a cluster of tents near the kitchen and storage spot where the activists keep their signs. Earlier that morning, the kitchen’s tent started collecting water and nearly caved in. It had to be held up by a broom. The guys watch her. As one of the only female campers, she stands out — a girlie gutter punk with piercings (tribal) and tattoos (personal), a sea-green streak manic-panicked through a mess of matted, light-brown curls piled high above her round face. You don’t want to mess with that. You want to follow that. The guys are waiting for her orders. One is wearing a dress. “You guys want to mic check?” she hollers down toward them. They want to mic check. “IF YOU’RE GOING TO MARCH, WE’RE LEAVING NOW!” Suddenly, stragglers appear and grab signs. They display them for Vic to sign off on. Vic asks for a cigarette. A guy rolls one for her. Vic asks for a light. She leans into the flame and exhales a fat cloud. She eats a banana that someone drops on the ground. She laces up her stepfather’s boots. She tells everyone that marching in untied boots is lazy. Fifteen Occupy Charlotte activists — all men — are ready to join her. And then Vic asks the question she’s been wanting to ask all morning: “Why are we still here?” * * * * * Occupy Wall Street’s most effective recruitment tools were not testimonials from the unemployed or income-inequality charts. The movement grew exponentially with each video that captured police actions against demonstrators. The mass arrest on the Brooklyn Bridge, the maiming of Iraq War Vet Scott Olsen in Oakland, the UC Davis cop pepper-spraying seated students — each jolted the movement’s sense of outrage, and gave the mainstream media fresh footage to endlessly loop. The resulting demonstrations were some of the bigger, more effective marches. None had more impact on Occupy than the videos capturing NYPD Deputy Inspector Anthony Bologna’s close-range pepper-spraying of a group of women penned behind orange police netting. One YouTube video of the incident racked up more than 800,000 views. Another attracted more than 1.5 million. Vic had seen the clips: the white-shirt official firing the stinging spray, the women cooped in, shrieking in horror before crumbling to the pavement. “It was just a catalyst,” Vic says. “It got me going. For the following week after that, I was just sitting there like obsessive at the computer just trying to find out more and more and more.” How long is this going to last? Are they serious? Vic wanted to know. Vic began calling around to the few activists she knew in Charlotte, hoping for any signs that a local occupation might be starting. The odds were against her. The city had no reputation as a rowdy place of political dissent. The big banks held sway over the local economy, the southern conservative mindset over the political discourse. Just days before the occupation started, Mayor Anthony Foxx, a Democrat, defended Bank of America against criticism for wanting to charge customers a $5 monthly fee for using its services: “People who live in this community know how generous our financial institutions have been.” Vic’s last activism had been a silent protest, helping with a letter writing campaign against Monsanto, an agri-business giant. She couldn’t remember the last time she marched or attended a rally. As soon as she heard that Occupy Charlotte would start, she put in her two-weeks notice at the earthy grocery store where she did food prep for $9 an hour. The first day that Occupy Charlotte began its encampment — Oct. 8 — was Vic’s last at the grocery. After her final shift, Vic said goodbye to the group house she’d rented for about $252 per month. Her roommate gave her a ride downtown. She forgot to pack a sleeping bag or pillow. But she did remember to stuff in her backpack a couple journals and books (Emma Goldman, George Orwell, Noam Chomsky, Nietzsche), a re-useable water bottle, extra clothes and a couple blankets. She also packed nonperishable food like granola bars and sunflower seeds, along with a few pieces of fruit. She did not plan on leaving. That first night, Vic joined maybe a dozen strangers. They formed a circle and introduced themselves: the high school dropout, the injured iron worker, the local musician, the college student. They talked about what the movement would mean to them. Vic said she was glad to see people in Charlotte finally not “turning a blind eye to things.” She says she didn’t go to sleep for two days. “It was awesome,” she says. “It came at a good point in her life,” says Vic’s stepfather, Danny Hill, 59. “She needed something to latch onto that would get her focused again … It was just get up and go to work. She didn’t really have much time for herself. This has been her passion all along but she just didn’t know how to go about doing it.” A month before she joined Occupy Charlotte, Vic wasn’t sure where she belonged. She wrote in her journal: “The world is changing quickly or maybe I’m not adapting fast enough. Maybe it’s not changing fast enough for me — or perhaps I’m not changing fast enough for me.” In Charlotte, Vic had a difficult time finding her way. Her beloved older brother Nick moved out before she hit middle school. Her parents put her in a small, private, Christian high school. She graduated an expert on what it felt to be shunned by your own peers. “Being the only out gay person in your school, being someone who graduated from a Christian school who never believed any of it, I was alone,” she says. She’d had to sit through Bible study every day for two years. Vic moved a little more than 90 minutes away, across the South Carolina border, and enrolled in Columbia College. But she quickly found that the all-women’s school wasn’t for her either. “All my peers were busy reading Vogue,” she says. “They were in school to meet their husband and their bridesmaids. I was starving to learn more.” Vic dropped out after her freshman year. For three months, Vic bounced around the Southeast: Athens, Atlanta, Savannah. “I’d hang around somewhere for a week, get bored and then leave,” she says. She’d walk or hitch or jump trains. In Tallahassee she joined up with a friend’s band. In Tampa, she squatted in a warehouse covered in black mold. Her itinerary ended with a return trip to her parents’ house. After a short stint at a community college, Vic enrolled at Winthrop University. But all that came to a chaotic end in October 2009 when she contracted swine flu. That December, she lost her grandfather. She felt overwhelmed and depressed. She decided to withdraw. Vic tried to re-enroll but says Winthrop wouldn’t accept all of her old credits. It became too much of a financial burden. “I was heartbroken that I couldn’t go back,” she says. Instead, she took the grocery job. “It was hard to live one block from my school and walk through campus on my way to work. It was a daily reminder.” Her mother Karen Hill says they couldn’t pay for Vic’s college; they had persistent health problems, and barely enough money to eat on their fixed incomes. Danny Hill has shoulder and lung issues, as well as post-traumatic stress disorder from his tours in Vietnam and the first Gulf War. It is hard for him to walk without having to catch his breath. Karen Hill handled baggage for US Airways, loading and unloading up to 20,000 pounds of luggage per shift, she estimates. After 23 years on the job, she had to have carpel tunnel surgery. She says her doctors soon rushed her back to work; she ended up with nerve damage in both hands. She never was able to get worker’s comp, she says. Her hands swelled up so bad, Vic had to dial for her and cradle the receiver. Vic had racked up her own share of medical debts. She had grown up with lungs weakened by a stubborn asthma that left her immune system vulnerable to attack. Hospital stays were common annoyances. In her journals, she taped a hospital bracelet from this past June. In the corner of the page, she wrote in black: “DIE YOUNG AND SAVE YOURSELF.” As the start of the occupation grew closer, she wrote in her journal: “Clean slate in front of me, bumpy road both behind and before — I’m bursting … I must become as strong as stone.” During the first week Vic lived at Occupy Charlotte, she says someone stole her clothes, her jacket and her ID. She eventually got a tent and a lock. She says she was afraid to leave the camp. She’d only leave for an hour or two a day. “I was always scared — What’s going to happen while I’m gone? What am I going to come back to?” she recalls thinking. “I was just scared that somebody was going to do something stupid and get us shut down and I was going to come back and tents were going to be destroyed.” Despite the setbacks, Vic confessed to her mom just how meaningful it all was. “She told me that this is the most important thing she’s ever done in her life,” Karen Hill says of her finally grown up daughter. “I had to let her go.” It was hard to fathom that this was the same daughter who had come out to her by handing her a note. Hill made sure to drop off an entire wardrobe of clothes. Hill couldn’t march, but she could open her home to her daughter’s new friends. As the seasons changed, she supplied the activists with vitamin c and cold meds. When they needed a break, she invited them over to the house for a hot meal and the use of their washer, dryer and shower. They hardly disturbed the household. “Usually, they would sit on the floor with their computers — and it was Occupy, Occupy, Occupy,” Hill says. But their victories went beyond blog posts and tweets. A group of Latino tenants were facing eviction when the camp decided to take up their cause. The landlord soon backed down. “That’s a concrete thing that they can point to and say ‘Look, this is what we did,’” says Mark Kemp, editor in chief of Creative Loafing, the Charlotte weekly. Luis Rodriguez , a former organizer with Occupy Charlotte, describes Vic as pivotal to whatever success the camp had. “She’s a big motivator,” Rodriguez explains. “She’s very charismatic and she has a way of rallying support to her … You look at her and you see the hair and the piercings and then you get to talking to her and she’s really, really passionate. She does not suffer idleness and she wants everyone else to be constantly moving.” The marches were addictive. Vic says she yelled so much that no one heard her real voice for long stretches. For the first three weeks, her voice was constantly hoarse. But it wasn’t powerful enough to silence the camp’s in-fighting that sometimes got physical. On a few occasions, people got caught bringing drugs into the camp. One leader left in a well-publicized dispute over the direction of the camp. Restraining orders were exchanged, the scope of which banned one of the main organizers from the camp and from participating “directly or indirectly” in general assemblies. There was a fight over who controls the camp’s website. The ousted activist turned one site into an anti-Occupy Charlotte missive. The remaining occupiers had to start a new site. General assemblies became a grind even for Vic. After a particularly intense session, Vic walked away in tears. She thought about quitting. She’d been occupying for about a month. She was tired of seeing too many activists sitting around. She’d sometimes had to barter with them to march: I’ll give you a cigarette if you get out of your tent . She and others even had to march on their own camp to motivate the laziest camp squatters. They’d tromp through the haphazard rows of tents shouting, “Out of the tents and into the streets!” More than once, Vic complained about the camp going slack. Not everyone appreciated her bluntness. Some tent dwellers had taken to calling Vic a “stuck-up bitch.” If an activist quit the camp, others blamed her. She didn’t miss the quitters. There was always the next march to organize. She didn’t care if she could only get a half dozen to march with her. They were an escape from the camp’s drama and bad vibes. The morning of the march on Duke Energy, one man sits in the rain in front of a chess board, expressionless. Later, an activist shouts down a young girl. She doesn’t look old enough to drive. She’d been at the camp before. She had runaway from home and ended up there. She left in a police car that time. The activist isn’t happy that she came back. He bellows at her loud enough for the whole camp to hear. He calls her a “fucking bitch.” The girl asks to borrow one of our cellphones. She needs to get a ride home. That night, the camp is partly illuminated by the city’s police headquarters across Trade. The Occupiers are only a short walk from the heart of downtown Charlotte’s decade-and-a-half building boom, but the tents feel a world away from the gleaming hotels and loud bars. One activist describes it as “a bubble.” It’s kind of quiet inside the bubble. There are no drummers, or old heads moderating debates over the ” Pedagogy Of The Oppressed .” Instead of a friendship circle, there are small cliques hanging by the information desk and around the kitchen smoking cigarettes. They all look young and tired, shivering in jean jackets and hoodies. At the previous night’s general assembly, several activists debated whether another should be allowed to wear a ball cap emblazoned with the words “Fuck the Police.” Zuccotti Park inspired more than a hundred camps just like this one. The tents and general assembly hand gestures may be the same. But camps like Occupy Charlotte’s have had to make their way very much in the dark, without the correctives that constant media attention can bring, without the steady flow of donations and celebrity cameos. Russell Simmons and Michael Moore have not stopped by. Here, it’s up to Vic and her ability to get Peanut to wake up and march. The night before Vic had sat at the information desk until 4:30 a.m. in the hopes of pitching the movement to any stranger that happened to stumble down to this darkened block of Trade. Tonight, she just wants sleep. Vic slinks away from her group and walks carefully past the tree line running along Trade and into the pathless dark, looking for her one-person tent. She unwraps her tent tarp and fiddles with the combination on her padlock. “The weather is ruining this lock,” she complains. Her voice is a rasp. It’s about 10 p.m. when she finally takes her boots off. After little sleep, she wakes up at 7:30 a.m. feeling sick. The first march to a military recruiting center to highlight the plight of veterans will have to be put on hold. Vic wants more sleep. At 10:30 a.m., Vic’s speech is groggy, her eyes bloodshot. “You’re catching me like just waking up,” she says, laughing. “Sorry.” She decided to join a friend’s tent for the conversation and the platonic body warmth. “When it gets cold, you make friends with your neighbors,” she says. “Body heat is a necessity.” Vic spies the camp from the tent’s entrance. Not a soul in sight. “I wish more people were up and moving about,” she says. She insists she will be ready for the next march: “Put my boots on and go.” Vic had one advantage over all the other Occupy activists: her older brother Nick. From an early age, he introduced her to Orwell and Zinn and radical punk bands like Crass and the Dead Kennedys. He’d stand in the doorway to her bedroom and roll his eyes at her record collection. “What is this except for a waste of record space?” he’d sneer. He was eight years older. He left home when she was 10. Even when he moved out to the Midwest, he made sure to heckle her long distance — pushing her toward more alternative culture. “I’ve always looked up to him,” Vic explains. “He never led me astray … He was always there to give me that hint.” Nick had been a part of the anti-globalization protests a decade earlier. He marched against the World Bank and the International Monetary Fund in Washington, D.C. While the movement’s message, tactics and global analysis animated the Occupiers, Nick’s generation faced an ambivalent public and brutal police. Pepper spray was the least of their worries. The press corps only seemed to accept the kettling tactics as a justified use of force. After one infamous mass arrest, The Washington Post headlined its editorial ” Hail to the Chief–and His Cops .” The preemptive roundup would ultimately cost taxpayers millions in civil-suit settlements . No activist got famous on Twitter or ended up as a talking head on MSNBC. Nick remembers the tear gassing and pepper spraying, the times when the police beat him with their nightsticks and stomped on him with their heavy boots. None of it ended up on YouTube. But he could share his war stories with Vic. “I guess I wanted to try to pass on values, a willingness to stand up for what you believe in,” he says. “I didn’t really want to pass on a lot of the stuff I was doing. Nightsticks hurt. And tear gas isn’t fun. I wouldn’t want her to experience that part of things.” Vic had sought counsel from her brother before her planned arrest. Nick recalls telling her to not piss off the cops. Make them work for her arrest but not too much. “Make them pick you up,” he told her. “Ride that fine line between being cooperative and resisting.” Five days after we met her, Vic and three others formed a human blockade in front of the entrance to Bank of America’s headquarters. They stretched out a banner that said “Bank of Coal.” The Charlotte cops didn’t really know what to do at first. The blockade lasted maybe five minutes. “But it felt like an hour,” Vic says. Vic and seven other activists were arrested for blocking the entrance and climbing the flag pole for another banner drop. Vic made sure, her mother says, to take off her piercings, so she’d look more respectable. But Nick had to call to critique her mugshot. “I was kind of let down she wasn’t smiling,” he says. “I thought she would have smiled for it. When I talked to her, I gave her a hard time about it.” He said he was surprised how easy her arrest went down, that the cops didn’t get rough. He had to admit, though, that he was impressed with her commitment — especially her decision to quit her job for Occupy. “I was actually pretty proud of that,” he says. “I wish I had been at a place where I could do the same and join her. It’s an admirable thing. You find something that means that much to you and you’re willing to give up what you have to be a part of it … It’s kind of her taking it to where I wanted to be.” The Bush Administration and its two wars would consume the energy of the U.S.-based anti-globalization movement. As Nick got older, he says the activists organizing the most aggressive actions appeared to migrate overseas. “It kind of hit a point where nothing was happening,” he recalls. “All the meetings started taking place in Europe. You got punk kid from Charlotte — you can’t go over to Italy or those places.” Especially not a punk kid with growing financial debts. Nick, 30, says he needed to find steady employment, which eventually led him to railroad work as a track laborer in Wisconsin. He currently is a train conductor based in Duluth, Minn. — far from his old activist friends. He’s getting married in June. The closest he gets to protesting is participating in union meetings, and calling and texting his sister. When Vic first started, Nick called with some advice. He still remembers the conversation, that he cautioned her not to let Occupy become all consuming. “I didn’t really know what all to say at the time,” he explains. “Just tried to tell her to be careful and don’t make it like work, like a job. I’d seen a lot of people … taking it to a point where it becomes too much work, too stressful.” When the activists deserted the camp during the Thanksgiving holiday, Vic insisted on remaining behind, her mother recalls. “Somebody had to be there,” Vic explains. “I didn’t trust leaving. I was scared. If I left and everyone else did, anything could happen.” What would the media say if they found a ghost town? she wondered. On Nov. 26 she wrote in her journal: “As of today I have been protesting for 50 days straight. Not one day I haven’t marched.” She had watched the camp grow from six tents to more than 40. In mid-December, Vic learned that a friend — not affiliated with Occupy — had died from a heroin overdose. She says she couldn’t handle the funeral. When word spread about a ride to Occupy DC, she took it. She left behind both her tent and an ambitious schedule of marches. She brought with her a backpack full of clothes and $3. Vic says she needed to step away from Charlotte’s small, intense group. She wanted to witness up close how a big city’s Occupy force handles things. She made sure to take a few Occupy Charlotte friends with her. Vic says she spent her first night with Freedom Plaza’s Occupy faction. There was no friendly circle, no introductions, and no all-night bonding session. “It was cold shoulders everywhere I went,” she says. “It was an ‘I’m too busy’ type thing. That was disappointing.” The next day, Vic and a friend moved their shared tent to Occupy DC at McPherson Square, just off K Street. She found a spot under a giant tarp that made up the neighborhood named after Malcolm X. She’d jump into people’s faces: “Hey, I’m Vic.” Vic’s voice eventually grew hoarse in D.C., too. She participated in marches against the National Defense Authorization Act — the recently signed law that allows for indefinite detention of American citizens. She screamed in front of the White House. She’d loved watching others do the same. “You could see it and it was beautiful,” she gushes, when we catch up with her in D.C. But there are fights at the camp nearly every night, she says. There are fights over missing money. There are fights over a missing laptop. There are drunken fights. Even worse than the fights — some days, there aren’t any marches at all, just rumors of marches. Sometimes, when they march, Vic says the organizers seem to get lost. We go to a used bookstore a short drive from the camp. She says she could spend hours there. She could fall asleep in a corner of the literature section. We walk around a bit, looking for a place to eat. Vic seems oblivious to the stores and restaurants. None of it matters. She isn’t protesting them. Vic admits that it had maybe been 24 hours since her last real meal. She is still an outsider at the camp, just an Occupy tourist. She only mentions one Occupy DC activist — a painter she had met on her first day. Her deeper connection is still with Occupy Charlotte. “I was really down about Charlotte and the state of things,” she says. “Coming here helped me get a little respect back for my hometown’s occupation.” Ten days into her stay, Vic develops a cough. “You lay down at night to go to sleep,” she explains, “and it’s just like a chorus of coughing.” We are sitting in a sandwich shop, the closest warm place to the camp that afternoon. Outside, it looks like it might rain. She admits: “I’ve been terrified … If I hear people coughing, I might put my bandanna up.” Vic gives her cough a funny name. She calls it her “Occu-Cough.” She thinks there’s another anti-NDAA march. Maybe it’s at 6 p.m. Maybe it’s at 8. She doesn’t know but she does want to join it. By 6:30, she texts: “No ones marching yet!,” then, “Im trying to see if anyones wanting to march at 8 against the ndaa.” Whatever plans there are wash away with the night’s heavy rains. We find her in her tent in the back of Fort Malcolm. A battery-powered lantern illuminates the small space filled with old clothes, half-empty sugar cereal boxes, and tangles of adapter wires. Vic would rather be marching. “Everybody’s pussing out, man,” she complains, curling up in a fuzzy blanket next to a new friend named Kiki. Even without the march, Vic has a lot on her mind — including her other Occupy Charlotte transplants. “My to-do list keeps growing,” she says. “I have to write three press releases. I have to call my lawyer tomorrow. I have to get Tate to call the lawyer tomorrow because he’s not doing it on his own, same with Jesse. Fucking babysit. I have to find out what’s going on tomorrow as far as marches. I’ve got two meetings tomorrow. It just doesn’t stop.” * * * * * Shortly before Christmas, Vic returns to Occupy Charlotte to address her court case and add a New Year’s Eve march to her to-do list. The planning hits a snag when police catch a couple activists burning American flags late one night and charge them with careless use of fire . One of the culprits claims that the flag burning was done as an attempt to motivate the camp. Instead, they receive a lot of bad publicity, and two well-attended but drama-filled general assemblies that fail to resolve the matter. A small faction of activists who don’t reside at the park walk into Occupy Charlotte and read a declaration that they are no longer working with the campers. Vic finds that the activists have done very little in her absence. They respond with laughter when she asks whether they had kept up the marches. “Is there a purpose in me doing this?” she worries. “I don’t know.” Vic was not on the scene at the time of the flag burning, but at her parents’ house. “We are the pissed off white kids. We need to be so much more,” she complains after hearing the news. “It’s now tarnished everything.” She then utters the previously-unthinkable: “I’m going later today to get my tent.” But Vic decides to keep her holiday march on schedule. She and about two dozen other activists read off her New Year’s resolutions in front of Wells Fargo, Bank of America and Duke Energy. They all begin the same way: “We the people of 600 E. Trade St. as a part of Occupy Charlotte, stand in protest of the injustices brought upon the city of Charlotte.” It is her last march through her hometown. Even before her return, she had planned her exit strategy, what she calls out her “Occu-Hop” — a nine-month tour of still-standing Occupy camps, with visits to friends and family along the way. The first stop would be a return trip to Occupy DC, then she’d travel to Chicago and maybe stop in on her biological father, and then to Duluth to see Nick. Eventually, she’d make her way to Oakland before returning east to Charlotte, in time for the Democratic National Convention in September. Before she leaves for D.C., her stepfather Danny Hill presents her with his Marine duffel bag, which he’d had since 1970. It fits with the boots and the Vietnam-era gas mask he’d given her. When she isn’t looking, he stuffs a $100 into her belongings. “It is different with her in D.C.,” Hill says. “You get a little more worried. You watch things going on there. You can tell it’s on a whole different level … We’d rather her stay here. But at the same time, we understand that’s what she was wanting to do.” On Jan. 4, Vic and her ride leave Charlotte. As they head out through the city, Vic stops at the Occupy site one last time. She still needs to get her old tent. She makes her rounds, too, saying her goodbyes. Some are sad, some are angry that she is leaving. They all tell her to “be safe.” Vic knows the camp may be gone by the time she returns. By the end of the month, it will be — police clear the site after the city passes an ordinance banning camping on public property. It is 1:40 p.m. when Vic finally gets going. “I’ll certainly be worried about the occupation as well as my family within and outside of it,” she texts, “but I’m ready for the road …”

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Foreclosure Settlement Reached: Largest Bank Payout By Far Since Financial Crisis

February 9, 2012

As early as Thursday the government is expected to announce a roughly $25 billion deal with some of the nation’s largest banks to settle charges of systemic and widespread mortgage fraud, according to multiple sources close to the negotiations. The deal would be the largest payout to date from banks in the wake of the financial crisis. The settlement, 16 months in the making, could bring significant relief to those in danger of losing their homes and also much needed stability to the long-suffering housing market. Those who already lost their home, however, would receive just the smallest fraction of the money: a one-time cash payment of about $1,800 as compensation. “Their entire lives have been turned upside down and changed,” said Philip Robinson, the acting executive director of Civil Justice, a Baltimore-based nonprofit that has worked with thousands of Maryland families fighting for their homes. “Does $1,800 sound fair? Does that seem like compensation for a financial and emotional tragedy?” The Department of Housing and Urban Development, one of the Obama administration’s lead negotiators on the deal, could not be reached for comment. Late Wednesday night, as the terms were being finalized, more than 40 states had signed on, including New York, which had been vocal in its opposition to any deal that was soft on the banks. A source close to the negotiations said that California also was on board, but a representative from Attorney General Kamala Harris’s office would not confirm its participation. The deal between federal officials, the state attorneys general and Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial is an attempt to close the book on a scandal that erupted in 2010, freezing the housing market as the legality of thousands of bank-initiated foreclosures were called into question. The announcement is expected to crank up the pace of bank foreclosures, which has slowed as government officials investigate whether some institutions have forfeited their right to repossess homes after forging key real estate documents. As part of the deal, participating states would agree not to pursue a variety of independent lawsuits against the banks. Some consumer advocates argue that the deal is inherently too lenient on banks because the administration chose to negotiate a settlement without first conducting a full investigation into the nature and magnitude of the banks’ alleged fraud. “Any partial settlement is fraught partly because we don’t know the scope of the damages,” said Robert Borosage, founder and president of the Institute for America’s Future, a left-leaning nonprofit organization. “If the banks get broad immunity, homeowners get screwed because the next investigation won’t be able to get around that.” Under the terms of the settlement, the banks would pay $25 billion to participating states. California is reportedly receiving a total of $6 billion to $15 billion in the settlement. Potentially more significant, the banks would agree to forgive some mortgage debt owed by struggling borrowers through what’s called “principal reduction.” The remedy is nearly universally hailed by economists on the right and left as a way to revive the ailing housing market and rescue the nation’s struggling underwater borrowers: More than 20 percent of mortgage holders in the United States owe more on their loan than their home is worth. Citigroup, Wells Fargo and Ally Bank declined to comment while requests for comment from JPMorgan Chase went unanswered. Bank of America declined to discuss the terms of the deal, instead saying, “We’re interested in finding a path forward with a comprehensive settlement that benefits homeowners and communities.” The settlement has the potential to prevent future wrongdoing through new bank guidelines that have been crafted as part of the deal. The effectiveness of these new rules will rely heavily on whether the states can enforce them. The Obama administration pushed forcefully for the deal to present it to voters in 2012 as evidence that the president is helping homeowners and getting tough on banks. Splitting a $25 billion deal between five banks, however, will amount to little more than the cost of doing business and is too small a penalty to deter future fraud, many housing advocates say. “Compared to what these [banks] literally stole, it’s just eyewash,” said Margery Golant, a Florida-based attorney who represents homeowners and formerly served as assistant general counsel at subprime mortgage giant Ocwen Financial. “These are such serious crimes and for everybody to get a pass like this, it just encourages them to think that they always will.” Also unclear is how far the agreement can go in helping borrowers who are trying to hold onto their home. In addition to granting principal reduction, the deal would offer struggling homeowners relief by changing the terms, or refinancing, loans. Those dollars amount to a pittance when you consider the millions of homeowners in need of help, Golant said. “If you do the math, that’s a few hundred million per state. That’s not enough to change anything.” Consumer advocates supportive of the deal argue that while the settlement dollars are small, the principal reduction piece is critical. A handful of lenders have already begun offering such assistance, but mortgage giants Fannie Mae and Freddie Mac have fiercely resisted such a move. “This settlement could be a starting point for principal reduction,” said Ira Rheingold, president of the National Association of Consumer Advocates. “Hopefully it will demonstrate how principal reduction can and should benefit homeowners. If it is done well, maybe it will shame Fannie and Freddie into doing what it should have been doing all along.” Economists are also excited about the potential for principal reductions to boost the housing market. “If $15 to $20 billion is devoted to principal reduction modifications over the next year, that would significantly reduce the number of properties that ultimately end up hitting the market in a distressed sale, thus supporting housing prices,” said Mark Zandi, chief economist at Moody’s Analytics. Included in the settlement are new rules designed to reform the policies and practices among the mortgage companies, mainly banks, that manage the loans on a daily basis and assist struggling borrowers. These new rules could finally shut down any excuses previously put forward by the banks for wrongful foreclosure — if the rules are adequately enforced, said Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities. “The fact that the settlement has the state attorneys general behind it means that we really should see an end to some of these nefarious mortgage servicing practices,” he said. The states’ ability to enforce the deal remains one of the great unknowns. Nearly four years ago, 11 states signed an $8.4 billion settlement with Bank of America over predatory lending practices by Countrywide Financial. (Bank of America acquired Countrywide in 2008.) Most housing experts agree that the deal has significantly underperformed in large part because the states didn’t have a good mechanism for holding the bank accountable. This settlement will be different because it has a “very robust enforcement mechanism,” said Patrick Madigan, Iowa assistant attorney general and one of the lead negotiators for the Countrywide settlement and the current deal. Banks will pay substantial cash penalties if they do not deliver the full amount of homeowner assistance agreed to under the deal, according to Madigan. North Carolina’s Banking Commissioner Joseph Smith will serve as the “independent monitor” to enforce the deal’s terms. “There’s no comparison between the enforcement and monitoring of this case and Countrywide,” Madigan said. It remains to be seen, however, if these enforcement mechanisms have any teeth. Settlement supporters have high hopes for the deal, though success has to be measured against very narrow expectations, cautioned Rheingold. “In the absence of sufficient federal action, sufficient regulatory action, sufficient congressional action, what we have left is a bunch of state attorneys general saying, ‘Our homeowners are getting hurt. We have to do something.’ “But the state resources are fairly limited, so you have to look at this in terms of what the attorneys general can accomplish within their own set of powers,” Rheingold added. “Does it provide the justice necessary? Clearly not. But will it provide an opportunity for homeowners to be treated fairly? I think it will.”

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Clay Farris Naff: Jesus Concerned About The Poor? You Must Be Joking, Says The Christian Right

February 8, 2012

When President Obama used the occasion of the National Prayer Breakfast to say that for the fortunate to pay a little more to help the less fortunate “coincides” with Jesus’ teachings, he must have touched a nerve. How else to explain the volcanic eruption of hate that has spewed from the right in response? Exposure to the pyroclastic flow of rightwing political lava for more than a moment can cause severe brain tissue burns, so I’ll offer a few quick samples. Geoff Ross, a retired naval man and self-styled president of the Rogue Patriot Group, writes: I am correcting the record, Sir. You [are] a degenerate immoral hack that has no values or moral fiber or glue. … It is not your job to give Americans a fair shot at anything. It is up to us Americans to be able to go out and find prosperity and happiness and financial independence. It is you sir with your BOOT on the neck of this nations carotid artery that is shutting off blood flow to freedom and liberty we used to enjoy. When you remove your boot then we will prosper. … You stated Mr. President “Living by the principle that we are our brother’s keeper. Caring for the poor and those in need. These values are old. They can be found in many denominations and many faiths, among many believers and among many non-believers. And they are values that have always made this country great.” You make this statement yet you remove millions of dollars in federal aid from Catholic charities because they refuse to bow down to your demand that they send rape victims for mandatory abortions… Mandatory abortions? I guess they must have been authorized by the Obamacare Death Panels when we weren’t looking. Now, you might be tempted to dismiss the above drivel as just typical Internet raving. But that would be a mistake. For the fanatics of Old Time Religion, this is mainstream stuff. Here’s Fox News regular Steven Crowder: OK, you might say, this guy with his “Obama’s Burning Taxpayer-Funded Incense To Whatever Pagan, Foreign Deity He’s Worshiping” nonsense is just another attention-seeking rightwing rent-a-ranter. But it doesn’t stop there. On the floor of the Senate, Orrin Hatch of Utah took up the cudgels to berate the president about the Gospels. Short version: Hatch blasts the president for injecting a “tax-the-rich scheme” into the prayer breakfast, says the Gospels are concerned about “weightier matters,” and cautions him to remember that only one person ever walked on water. Apparently, in today’s GOP to even mention making a little financial sacrifice to help the poor is to compare yourself to the messiah. See for yourself. Why are the reactions so venomous? The answer, I think, lies in an asymmetry of belief. For mainstream believers across the political spectrum, religion is an important but limited dimension of their lives. It fosters altruism, a sense of community and a reassurance of meaning in their lives. The hotheads of the Christian Right have a completely different orientation to religion. Forget about charity, mercy or love. As far as they are concerned if Jesus said, “Blessed are the poor,” he must have meant in the afterlife. As they see it, this life is all about war. Theirs is a tribal god who bears a remarkable resemblance to the angry, vengeful and often merciless Yahweh of old. The defenders of Old Time Religion see themselves in an existential fight to the finish with Satanic enemies. And clearly they believe that Satan’s plan is to tax them into hell. It is a worldview strangely detached from the Gospels. Otherwise, you might think that when President Obama says , “if I’m willing to give something up as somebody who’s been extraordinarily blessed, and give up some of the tax breaks that I enjoy, I actually think that’s going to make economic sense. But for me as a Christian, it also coincides with Jesus’s teaching that ‘for unto whom much is given, much shall be required,’” it might ring true. But then again, maybe that would come uncomfortably close to reminding them of something else Jesus is quoted as saying, in the Gospel of Matthew: …for I was hungry, and ye gave me to eat; I was thirsty, and ye gave me drink; I was a stranger, and ye took me in … Verily I say unto you, Inasmuch as ye did it unto one of these my brethren, even these least, ye did it unto me. Or this: “…sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.” Or, worst of all, this: “Verily I say unto you, It is hard for a rich man to enter into the kingdom of heaven. And again I say unto you, It is easier for a camel to go through a needle’s eye, than for a rich man to enter into the kingdom of God.” No, that will never do. Better book some TV preacher on Fox News to explain it all away.

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Stanley A. Dashew: How to Succeed in Small Business Even During Hard Times

February 8, 2012

I entered the job market at the height of the Great Depression, and launched my first business in 1950 — five years after the end of World War II. Points of reference: Boomers, this was before color TV and rock ‘n’ roll. Gen Xers, this was before video games and the Internet. Millennials, a “smart mob” would have been an oxymoron. Since then, I have launched a half-dozen successful businesses and been responsible for a score of inventions (and more than 40 patents) in fields as diverse as credit card processing, mining, mass transit, medical equipment and off-shore oil transportation. I’ve also weathered a dozen recessions. You could say that when it comes to free enterprise, I’ve been around the block. A few times. My first piece of advice for those thinking about starting a small business: Don’t wait. There’s never a right time. You might think that the current hard times would be the time to hunker and wait for the passing storm before testing your entrepreneurial mettle. Don’t fool yourself. A tough economy can present as many opportunities for a great — and profitable — business idea as when the good times are rollin’. Here, then, are my five sure-fire steps for becoming a successful entrepreneur, even during hard times: 1. Identify The Problem : What bothers you? I mean, what really grates on your nerves? Chances are, whatever the problem, others feel the same way. I made my first fortune in starting a company that automated the credit card industry, because paper cards were very problematic and really grated on the nerves of bankers. Now, I knew nothing about high finance much less retail, but beginning in 1957 I began reading about new-fangled “charge cards” that some banks were beginning to offer their customers. And when I began talking to bankers who were offering the cards, what really bothered them was what they were made of: paper. The paper cards would tear and fray, and become difficult to read both at the merchant and bank-processing levels. Yep, I had an early Diner’s Card made of paper and they were exactly right. Rightly so, banks also were predicting a huge market for credit cards so they wanted a way to issue cards in large volume at low-cost and then be able to maintain faster files and accounts on the state-of-the-art technology at the time: IBM punch cards. Bing! Problem identified. 2. Find The Fix : In the case of credit cards, the solution was clear: Create durable credit cards with data lines such as account number and expiration dates, name, street, address, city and state. Like the Dustin Hoffman character in the movie The Graduate , it was revealed to me that the answer to all my problems — well, at least this one – was “plastic.” I had to find a way of creating a plastic credit card. About that time, I had heard through my old contacts at Addressograph-Multigraph (the company that gave me my first job during the Great Depression), that a young man, Dunstan Sheldon, had come up with a plastic material that could be embossed upon. Fortunately for me, my ex-employer was sitting on the idea. I tracked down the material, which hadn’t been patented, and next, set to work devising a way to fulfill the banks’ other requirement. 3. Connect The Dots : OK, problem identified. Check. Material (emboss-able plastic) found. Check. Now what about all that data processing the bankers were wanting for their customers’ credit cards? Here’s where I had to really jump into the skin of a banker and see why this whole processing thing was so important to them. After doing more research, I learned that the flow of credit card paperwork began with the merchant at the point of sales. If that starting point couldn’t be automated, the entire system would fall like a house of (credit) cards. 4. Gather The Troops : OK, I’m not an engineer, but I have some engineering genes in me. Also, I knew some very talented engineers. This is why it is so important to form strategic partnerships with people who have skills which you lack. I hired then to work with me on reproducing and embossing a keyboard embosser that embossed plastic credit cards with their name, account number, and expiration date. This machine was operated by punch cards, one for each customer. It was able to emboss 1,000 cards per hour. We also developed an imprinting machine which imprinted all the information on a plastic card, which was inserted into the imprinter and printed out all the info on the card, and was then signed by the customer. These machines printed account numbers, dollar amount, merchant number and date onto a sales draft that could later be scanned and read by optical character readers. The results were not only faster but foolproof. The problem of human error — caused by sales clerks writing down the wrong information or bank clerks misreading the right information — was eliminated. We used existing technology to build these machines. However, it was the application of this technology in a new way that met the bankers needs that proved decisive. In 1958, Dashew Business Machines received an initial order from 300,000 BankAmericard plastic credit cards and 3,000 imprinters and 1 electronic Databosser to emboss the credit card information on the plastic credit card and from the IBM punch cards. Here’s the takeaway: When you lack the skills or experience to overcome a roadblock to your success, don’t be afraid to ask — you friends, family, existing clients, vendors or colleagues — for help. 5. Roll With The Punches : Business looked good for Dashew Business Machines in 1958, if only all the players remained in place. Of course, they did not. Joe, the Bank of America executive who had helped me secure my deal, was out. He lost his bid to be president and along with his departure, we were shown the door. And the final kick in the pants was that we had just ordered costly parts for 10,000 credit-card imprinters in anticipation of the millions of BankAmericards we were going to be making. Rather than throw in the towel (and I did think about it, more than once), I eventually came up with what I thought was a pretty original strategy. I hired Joe, now newly unemployed, to find a way of creating an entirely new credit card that could be used nationwide — an ‘unheard of’ concept at a time when bank charge cards, like banks themselves, were restricted by law to do business in only one state. It was an enormous undertaking and truth be told, we never accomplished it. (The first “national” credit card would not emerge until 1966 with MasterCharge, which would later become MasterCard.) But something even better happened. While speaking with Chase Manhattan Bank (now Chase Morgan), Joe got us a deal to take over its failing charge card operations. Chase was, and is today, such a blue-chip brand name in the banking industry, that it was relatively easy to raise financing on Wall Street to cover the deal. And here’s the cherry on top: Soon, American Express came calling and bought the company we had created to handle the Chase operations. The deal called for cash and a generous amount of Amex stock. Within a year, following the successful conclusion of a lawsuit, Amex stock skyrocketed. It was now 1965, and I was in the thick of the revolutionizing the financial habits of middle America. It was BIG and we knew it.

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Dennis M. Kelleher: More Unconscionable Wall Street Whining

February 8, 2012

I can barely write this as tears for the poor, picked-on Wall Street bankers fill my eyes as they are comforted by Obama’s campaign manager, who reportedly met yesterday with his big donors on Wall Street. Until we fix the sickening campaign finance system, I don’t like, but I understand that all fundraising politicians have to raise money and meet with donors and I understand why the campaign manager did, but how anyone on Wall Street could feel picked-on by Obama is beyond reason. Every single Wall Street bank would have been bankrupt, broken up and/or liquidated in 2008-2009 due to their recklessness, greed, incompetence and arrogance. The only reason that didn’t happen is because the US government, with taxpayer dollars, bailed them all out and, indefensibly, did so with no strings attached so they quickly began stuffing their pockets with billions in bonuses in mere months. Most of these “demoralized” Wall Streeters would have lost everything: their bank accounts, their multiple homes at the world’s hottest locations, their many sports cars, Italian designed wardrobes, yachts, club memberships, jets, helicopters, cooks and legions of house help and personal assistants and everything else they purchased with the tens of billions of dollars they sucked out of the economy as they created the bubble of toxic, worthless assets in the years before the financial collapse that they caused. True, they didn’t create it alone, but, in the hierarchy of those who caused the financial crisis, any fair-minded, unbiased list would put them at the top. That is particularly true if one looked at who benefited the most from the bubble and who was treated the best once the bubble popped. No one was treated better before, during and after the crisis that Wall Street. The government didn’t open the treasury and taxpayer pockets with no strings attached for anyone other than the financial industry (compare the demands and concessions forced on the auto industry). Anyone not directly or indirectly on the payroll of Wall Street or their ideological fellow travelers (who are almost all coincidentally also on the payroll) sees this and understands this. They see that no accountability only applies on Wall Street. They see that no-strings bailouts only apply to the already-rich Wall Street bankers. They see the unlevel playing field created and sustained by a federal safety net that looks a lot like a hammock for the filthy rich. (The Wall Streeters and their allies like to say such criticism is an attack on wealth, entrepreneurs and capitalism itself. That baseless, self-serving attempt to distract and distort the debate is laughable. No one is attacking Silicon Valley, Bill Gates, Apple, Caterpillar, Procter and Gamble, Hewlett-Packard, AT&A, IBM or the rest of the Fortune 500 — or celebrities, athletes or other super-wealthy people. No — the criticism is focused on the biggest Wall Street banks and bankers that enriched and engorged themselves at the expense of the rest of the country, that caused the crisis, got bailout out by taxpayers and just can’t stop claiming they are picked on, and that still benefit from a taxpayer-funded federal safety net that subsidizes their current too-big-to-fail operations.) It is also obvious to see that Main Street, not Wall Street, has paid and is paying for the costs of the financial crisis . They see a hollowed-out middle class struggling just to get by, having lost most of their stock value, home value, savings and retirement funds. These are the people living paycheck to paycheck with gnawing insecurity that at any moment it can all disappear and they too could join the ranks of the unemployed and, even, the homeless. Food stamp use is at an all time high and, most tellingly, the ramp up in use is in what used to be solid middle class neighborhoods. The same is true for free and subsidized school lunches. The distinction between the poor and the middle class is evaporating in far too many communities in America. Sadly, hope and the American Dream are also slowly receding from the horizons of too many hard-working American families. And, yet, in the midst of all this pain, suffering and wreckage, Obama’s campaign manager has to go to the oh-so-exclusive “Core Club in Manhatten” to reassure the bonus-bloated bankers that “Obama won’t demonize Wall Street as he emphasizes populist appeals in his re-election campaign ….” As if that wasn’t enough, this was reported to be “the latest in a series of hand-holding sessions.” It was also reported that one anonymous banker stopped going to these meetings because “the actual White House message of locking up fat cat bankers and raising their taxes never actually changes.” Er, ok, could anyone, please, identify a fat cat banker that got locked up? Nooooooooooooooo. There have been none. Not one. THAT actually is part of the problem . They are almost all still right where they were when they were creating the bubble or have departed Wall Street to the comfort of their billions or millions. (And, their taxes remain historically low.) Every single sane employed person on Wall Street should be sending a check to Obama — they would all be an empty shell of themselves but for him and the actions his administration took to stop the collapse of the financial system and our economy. Yet, ignoring all evidence and facts, Wall Street is reported to be “an industry that the White House has thoroughly and repeatedly demonized and demoralized” — what? That’s so ludicrous that it could be a “Seriously” skit on Saturday Night Live . Or an Onion headline. But, no, Wall Street, its bankers and its allies everywhere, including in the media, actually think that Obama has “thoroughly and repeatedly demonized and demoralized” Wall Street. Can they really be that thin-skinned? Can they really be that out of touch with reality? Can they really be that narcissistic to not see their “plight” relative to what is happening to the rest of the country ? Sadly, the answer to all those questions is yes. Wall Street and those who make fact-free assertions from their mahogany-line corner offices, 30,000 square foot mansions and spacious limousines about their plight live in a parallel universe that begins and ends in the mirror they gaze in and apparently mistake for the entire world. Until they look beyond their reflection in the mirror and until one of the titans on Wall Street actually becomes a statesman , then Wall Street’s whining won’t end and no amount of “hand-holding” meetings will satisfy them.

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Groupon Reports Earnings Results For First Time

February 8, 2012

NEW YORK — Groupon investors were expecting a better deal than the surprise loss the company delivered on Wednesday. The online deals site, reporting for the first time as a public company, said its fourth-quarter revenue nearly tripled, but it lost money and its shares fell sharply after hours. Groupon Inc., which went public in November, makes money by taking a cut from the online deals it offers on a variety of goods and services, such as restaurant meals, manicures and weekend getaways. Investors are watching whether this business model is sustainable and leads to growth over the long term – and whether the company can not only grow its customer base but make more from each subscriber. Groupon’s net loss totaled $42.7 million, or 8 cents per share, for the final three months of 2011. A year earlier, as a private company, it booked a larger loss of $378.6 million, or $1.08 per share. The company said its adjusted loss was 2 cents per share in the latest quarter. On this basis, analysts were expecting a profit of 3 cents per share, according to FactSet. Groupon said an unusually high international tax rate hurt the quarter’s adjusted results. Groupon’s revenue was $506.5 million, nearly triple the $172.2 million it reported for last year’s fourth quarter. Analysts, on average, had expected lower revenue $473.1 million, according to FactSet. For the current quarter Groupon expects revenue of $510 million to $550 million. Analysts are forecasting $501 million. CEO Andrew Mason called 2011 a “phenomenal growth year” for Groupon. But he stressed that the company wants to keep expanding and that will require continuing investment in technology. “While Groupon is the clear market leader in online local commerce, we estimate that we still participate in less than 1 percent of total local transactions,” Mason said. Groupon had 33 million active customers at the end of the quarter, nearly four times as many as a year earlier. It defines active customers as those who have purchased a Groupon in the previous 12 months. Customers spent $1.25 billion on all the Groupons the company sold in the quarter. That “gross billings” figure doesn’t include taxes or account for the money the company paid to merchants. Benchmark analyst Clayton Moran called the sharp share price drop unwarranted, though he noted that the stock has been “volatile, hotly debated” and “somewhat controversial” since its IPO. Nonetheless, he said Groupon’s first quarter as a public company was impressive and strong where it counts, notably revenue and other key metrics. Chicago-based Groupon’s stock tumbled $3.59, or 14.6 percent, to $20.99 in after-hours trading. The stock, which closed at $24.58 on Wednesday, has traded in the range of $14.85 to $31.14 since pricing at $20 ahead of its initial public offering on Nov. 4.

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Barry Levinson: Don’t Know Much About Oil

February 8, 2012

I don’t know much about the business world, I don’t know much about economics. So you’ll have to take what I say with a grain of salt. It’s more about what I don’t know than what I do know. Here’s my question: why does the gasoline price at the pump vary from day to day? You see this change on the signs. Suddenly it’s up three cents. Up seven cents. Down four cents. It’s always in flux. Why? The answers we’re always hearing are, “Government upheavals in the Middle East,” or “Issues with super tankers.” Or, “Nervous about the economic health of the global economy.” All those issues may in fact be real, but why does the price of the oil at your nearby station suddenly jump at the first sign of oil company anxiety? The oil at the gas station is sitting under the pump. It’s been bought at a certain price. So why does it change daily, based on the fears of the oil company? If you went into a car dealership and you were interested in some Buick at a given price, the salesman doesn’t suddenly come in and say the Buick went up $36 today because they’re having difficulty with supplying enough grills to the front of the car. They bought the car at a certain price, therefore they sell it at a certain price. Sometimes at a lower price. But one thing is for certain, the price of the Buick does not go up and down throughout the course of the week. To take it one step further, the earthquake in Japan, which disrupted the entire Japanese auto industry, did not set off an uptick in the cost of a Nissan or Toyota or Honda. The oil industry doesn’t need a natural disaster to actually happen though. Just their anxiety over the possible disruption of the Straits of Hormuz can cause the gas to increase in your neighborhood by four or five cents overnight. Another analogy. You decide to go for a big purchase. You hear that art is a good investment. You gather your courage and you go to your local gallery. You see a painting, a Julian Schnabel that catches your attention. You’re interested in it. You see the price. You wonder if you could afford it. Suddenly the gallery gets a phone call. “Schnabel has sprained his thumb on the hand that holds the brush. He may or may not be able to paint full time.” Suddenly the gallerist quickly hangs up the phone, crosses the gallery, and increases the painting’s cost by $183. “Why?” asks the potential buyer. The gallery man responds, “We have anxiety over Julian Schnabel’s thumb.” And then the oil industry has the other gimmick they throw in there. Look carefully. Gas is $3.87.04. Or $3.87.05. It is the only commodity I know of that you pay a percentage of a penny on. You don’t go for a Big Mac and it costs $3.37.03. Whatever is happening in the cattle markets, cows coming down with diseases or what have you, does not shake the price of the Big Mac or the Big Whopper or whatever Wendy’s calls its beef patties on any given day. Same price. Every day. The fries do not fluctuate no matter what’s going on in the potato world. Coke and Pepsi hold the price line. Nothing fluctuates daily in price like oil. And for whatever reason, we have accepted it. One final thing: In your local area, why is all gasoline almost the exact same price? Exxon Mobil. BP. Shell. At the local pumps, almost identical price. Why is that? You would think one of them would be known as “The Low Price Oil Company.” Their slogan: “The highest performance gasoline at the lowest price.” As opposed to other types of companies, oil companies never have special sales. Never the “Winter Sell-Off.” Never the “Spring Clearance.” Never “The Back-to-School Sale.” All other businesses have some kind of sale celebrations going on periodically. Not when it comes to oil. Years ago there used to be price wars. One station undercutting another. But that’s when real people used to own the gas stations. That’s when hardworking men maintained their service station and provided services, like checking your tire pressure. Your oil. Cleaned your windows. Pumped your gas. And were happy to see you. And actually kept their toilets clean, just as a bonus. Just because they cared. That’s when gas was probably around 29 cents a gallon at the pump. Any way, these are just a few questions. Unfortunately, I have yet to find one intelligent answer. Or at least one that I can comprehend.

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The Big Price Of Somali Piracy

February 8, 2012

Though many first think of Johnny Depp when pirating come up, avoiding the real-life bandits of the sea is are multi-billion dollar problem for the shipping industry. Somali pirates cost various governments and the shipping industry up to $6.9 billion last year, according to the One Earth Future Foundation , a non-profit advocacy group. Piracy off the coast of Somalia is both lucrative and common due to its location near the Gulf of Aden, an oil shipping lane that sees about 20 percent of global trade, according to Bloomberg . As a result, the cost to the shipping industry of Somali piracy alone accounts for over half of the total $9 billion in extra costs each year, according to recent figures from the Indian National Shipowners Organization . In 2011, Somali hijackings actually fell 36 percent from the year before, the Financial Times reports . Still, Somali pirates cost the shipping industry billions. Shipping companies pay about $2.7 billion in additional fuel costs to speed up ships in particularly high-danger areas. One Earth Future Foundation reports that no vessel has been hijacked when travelling 18 knots — or about 20 miles per hour — or faster . There may be have been fewer hijackings last year, but piracy in the poverty-stricken west-African nation are still making headlines. Somali pirates have recently shifted tactics to kidnapping people on land , such as travel and surfing journalist Michael Scott Moore, who was kidnapped in northern Somalia last month . However, the tactic may be ill-advised. At about the same time as Moore’s capture, Navy SEAL team 6, the same squad responsible for the Osama Bin Laden’s death , rescued an American woman and Dutch man during a raid that resulted in deaths of eight of their captors. Still, employees working on oil tankers and cargo ships remain at substantial risk, so much so that employers pay an additoinal $195 million each year to compensate them for taking on the danger. Shipping industry workers also endure a variety of other dangers on the job. In addition to the risk of running aground — a danger that the workers on the New Zealand cargo ship Rena know all too well — workers also face the possibility of exploding shipping containers.

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In Minnesota, Missouri, Colorado, Economies Languish As GOP Candidates Vie For Votes

February 8, 2012

When Republicans in Minnesota, Missouri and Colorado cast their votes for presidential candidates Tuesday, many will no doubt have the economy on their minds. Tying the three economies together is government, among the top three employers in all three states. And in all three states, government employment is falling too. Missouri particularly struggled last year, losing jobs while nationwide employment grew. And nearly a third of Missouri’s mortgages are underwater — a larger share than the national average. The state is also less confident about the future of the economy than 35 states. Though Minnesota and Colorado’s economies are doing better than average, they are still far from healthy. Minnesota’s home prices plunged 20 percent over the past five years. And Minnesota’s unemployment rate is lower than the national average largely because of slow population growth, said Troy Walters, an economist at IHS Global Insight. Coloradans may feel a bit wealthier than the nation as a whole since the same housing bust has not been as severe there. Home prices have fallen just 5 percent over the past five years, and 16 percent of Colorado mortgages are underwater — far below the national average.

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Many With Only High School Degree Laid Off During Weak Recovery

February 7, 2012

For many in the United States, the two years since the end of the recession have been worse than the downturn itself. Among those Americans with only a high school degree who have lost a job since 2007, a third became unemployed after the official end of the recession, according to The Washington Post . It’s a troubling statistic in its own right — job seekers without a college degree are having serious difficulty finding work in the current market, and the unemployment rate for high school graduates is more than twice that of college grads — but it also underscores the fact that, for many Americans, the recovery hasn’t felt very different from the recession that preceded it. Economists consider the Great Recession to have ended in the summer of 2009, nearly three years ago. That’s the point when the economy stopped outright shrinking and began growing again . But the subsequent period of modest expansion has been marked by job cuts, uncertainty and a gradual erosion of financial security for many Americans. These conditions are expected to remain pronounced for a long time to come. U.S. employers cut 529,973 jobs in 2010 , according to the outplacement company Challenger, Gray & Christmas. In 2011, that number rose to 606,082 . At the same time, wages and benefits barely grew , with the high jobless rate giving employers little incentive to pay workers more. Today, there are still nearly 13 million Americans looking for work. It’s not that life has gotten much better for those with a job either. All together, median household incomes have now fallen more in the recovery than they did during the recession. Meanwhile, as many as 49 million Americans live in poverty — a record high — and almost half the households in the country lack the kind of savings necessary to weather a financial emergency. People without a college degree are having a particularly difficult time finding work , but they’re not the only demographic hard hit by the crisis. The unemployment rate among very recent college graduates is well above the national average . While Baby Boomers account for a huge percentage of the long-term unemployed . And African-Americans have a jobless rate of 13.6 percent — more than five percentage points above the national level.

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Bank Loan Rates Could Spike Following Money Market Rules

February 7, 2012

By Karen Brettell NEW YORK, Feb 7 (Reuters) – The cost for banks and other borrowers to raise funds in short-term markets could jump if regulatory proposals for money market funds result in large redemptions in the industry. The Wall Street Journal on Tuesday reported that the U.S. Securities and Exchange Commission was finalizing rules to stabilize the $2.7 trillion money-market fund sector, including a requirement that funds allow their net asset values to fluctuate. The proposals are vehemently opposed by the industry, which says they will effectively kill the business. “As soon as you introduce a floating NAV (net asset value), demand for the product is going to plummet,” said Mary Beth Fisher, an interest rate strategist at BNP Paribas in New York. “You have no additional security by being in a money market fund.” The new rules are designed to reduce risks of the large funds, which suffered an investor run after the collapse of Lehman Brothers in 2008. The run led one large fund’s share value to “break the buck,” which then intensified the crisis, leading to the SEC’s development of the proposed rules in 2009. Fund managers contend that allowing share prices to fluctuate will remove certainty from the investments and increase, rather than reduce, the risk of a loss of investor confidence. Money market funds provide billions in loans to banks through repurchase agreements, commercial paper and other loans. A pullback sparked by investor redemptions or from the funds simply closing down could have large market ripples. Fidelity Investments, the largest money-market fund manager, recently warned regulators that a floating NAV would result in large redemptions, “leading to unintended consequences for the financial markets and U.S. economy.” Shares of Federated Investors, one of the largest money fund managers, fell 3.9 percent on Tuesday on the report. The Pittsburgh-based firm’s Chief Executive Christopher Donahue told the Journal he would sue the SEC if the new rules affect Federated’s ability to do business. European banks were left scrambling for dollar-based funds in the last half of 2011 as money funds withdrew loans, a large factor that led to global central banks coordinating offers of low-cost loans to banks to fill the funding gap. Investors have pulled around $50 billion from money market funds since January 11, according to the Investment Company Institute. That in recent weeks helped increase the cost to finance overnight loans backed by Treasuries in the repurchase agreement market. The cost of overnight repo loans backed by Treasuries traded at around 10 basis points on Thursday after rising to the high 20-basis point area last week. “If there are further fund redemptions, overnight funding for Treasuries will probably go back up,” said Raymond Gilmartin, head of repo trading at Bank of Nova Scotia in New York. A key question is where cash will move if money funds become less attractive. Money funds have won investors who want a guarantee that their money will be returned. Other mutual funds that invest in short-term instruments but do not guarantee the full investment return could gain at least part of the funds. “There’s still a huge amount of demand for short-term liquidity, people will put their money in a T-bill fund instead of a money market fund and not pay the extra fees,” said BNP’s Fisher. Banks, on the other hand, have been reluctant to take large deposits from investors flocking to safety as they need to pay a fee to the Federal Deposit Insurance Corp to insure the deposits. An insurance cap of $250,000 per depositor per bank is also scheduled to come into force in December. “It is unclear how much of the ($1.6 trillion) institutional money held in money funds would ‘go elsewhere’,” Barclays Capital analyst Joseph Abate wrote in a recent report. “Banks are not eager to be on the receiving end of all this cash.”

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Boehner: Obama Super PAC Decision ‘Just Another Broken Promise’

February 7, 2012

Hours after President Barack Obama’s campaign decided to soften its stance toward super PACs, House Majority Leader John Boehner (R-Ohio) slammed the decision. At a Tuesday news conference, Boehner was asked for his comment regarding the president’s reversal. “Just another broken promise,” he said. On Monday evening, Obama’s re-election team announced its backing of Priorities USA , a super PAC run by former Obama aides. Obama has traditionally been a fervent opponent toward the organizations , dating back to the Citizens United v. Federal Election Commission Supreme Court decision that spearheaded their creation. Obama Campaign Manager Jim Messina explained the decision, alluding to the millions of dollars spent by organizations supporting GOP presidential candidates. Via Obama 2012′s official website : With so much at stake, we can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm. Therefore, the campaign has decided to do what we can, consistent with the law, to support Priorities USA in its effort to counter the weight of the GOP Super PAC. We will do so only in the knowledge and with the expectation that all of its donations will be fully disclosed as required by law to the Federal Election Commission. In a Tuesday morning conference call , more details emerged about the change of political heart. Outside of millions of dollars flooding into GOP super PACs, another factor was the $500 million fundraising goal set by Crossroads groups and the Koch Brothers. While Boehner was critical of Obama’s decision, he’s historically been against limitations on campaign fundraising. After the Supreme Court rolled back campaign finance restrictions in the landmark Citizens United case, Boehner called the decision “a big win for the First Amendment.” “Let the American people decide how much money is enough,” Boehner said, according to NPR. A few months later, when Democrats turned to the DISCLOSE Act to increase transparency among private groups investing in elections, Boehner expressed his opposition . “Freedom of speech is the basis of our democracy,” he said in a press release on the day that the House passed the bill . “The purpose of this bill, plain and simple, is to allow Democrats to use their Majority in this House to silence their political opponents. This is a backroom deal to shred our Constitution for raw, ugly, partisan gain.” The DISCLOSE Act fell by one vote in the Senate , which then-White House senior adviser and current Obama political adviser David Axelrod called a “significant” blow. From the Democratic side of the aisle, Monday’s Obama decision did not sit well with former Sen. Russ Feingold (D-Wis.). A heavy proponent of campaign finance laws, Feingold opposed the campaign’s support of super PACs, telling The Huffington Post that “it is a dumb approach.” Feingold proceeded to question how the move affects Democrats across the board. “I also think it guts the president’s message and the Democratic Party’s message,” Feingold said. “We are doing very well right now. The president is doing brilliantly. This is no time to blunt that message by starting to play this game.”

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Qutenza, Chili Pepper Drug, Gets Mixed Review For Treating HIV-Related Pain

February 7, 2012

* FDA raises concerns of effectiveness of pain patch * NeurogesX seeks Qutenza approval for pain in HIV patients * US FDA panel to review proposed new use on Thursday * Shares fall 23 percent (Recasts first sentence with stock fall, adds details on approval process) WASHINGTON, Feb 7 (Reuters) – NeurogesX Inc’s pain treatment derived from chili peppers had only mixed success at treating pain in HIV patients, U.S. health regulators said on Tuesday, sending shares of the tiny company down 23 percent. NeurogesX won FDA approval in 2009 for its Qutenza patch as a treatment for pain related to shingles. The product’s active ingredient is a synthetic form of the agent that makes chili peppers hot, known as capsaicin. The company now hopes to get the nod to sell the product for peripheral neuropathic pain that afflicts as many as 40 percent of HIV sufferers. An FDA committee of outside experts will meet to discuss Qutenza’s use among HIV patients on Thursday. The FDA is expected to make a decision by March 7. On Tuesday, Food and Drug Administration reviewers said in a report that the Qutenza patch produced statistically significant pain reduction among people with HIV. But that success was due to a 90-minute application. FDA staff said company studies failed to demonstrate the efficacy of the 30-minute treatment the company proposed for use in treating HIV-related pain. Statistical concerns including a lack of evidence that the results can be repeated “have raised the question of whether evidence of substantial efficacy has been demonstrated for this proposed treatment regimen,” said Dr. Bob Rappaport, director of the FDA’s Division of Anesthesia, Analgesia and Addition Products. FDA staff said studies with HIV patients showed no new safety issues. European Union regulators have already approved Qutenza for controlling pain in nondiabetic adults including people with HIV. Shares in the San Mateo, California-based biopharmaceutical company were down more than 23 percent at 89 cents on Tuesday morning on the Nasdaq. The exchange has threatened to delist the stock unless it can be sustained at $1 a share or above between now and July 28. (Reporting By David Morgan; Editing by Gerald E. McCormick, Derek Caney and Matthew Lewis)

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Craig Aaron: When Whinosaurs Attack!

February 7, 2012

From the same people who brought you Fear Factor , Temptation Island and When Animals Attack! comes one of the most-shocking-but-true stories of hubris, greed and endless griping imaginable. This is a tale of the vastly powerful but sniveling giants who control your TV, dictate much of our political discourse and get rich doing it — all while evading even the most basic forms of public accountability. This isn’t just another reality show — it’s the reality of what’s airing on every local TV station. And as far as station owners and their lobbyists are concerned, their business is none of yours. Broadcasters have pocketed gazillions over the years while using the airwaves free of charge. In exchange, they’re supposed to serve the public interest with programming that reflects community needs. But the Federal Communications Commission’s modest attempts to hold broadcasters to their end of the bargain are being met by a teeth-gnashing, fire-breathing rhetoric… and pitiful mewling about how hard it is to use a computer. But like so many of the reality stars before them, these whiny media dinosaurs — or whinosaurs for short — have no shame. A Series of Rubes So what kind of onerous government inquisition has drawn the whinosaurs’ ire? Well, the FCC has asked broadcasters to put the “public files” every station is supposed to keep upon the Internet, so it’s easier for people to view them. While nearly every other industry has found electronic record-keeping to be a better way of doing business, broadcasters are desperately clinging to their dusty file cabinets. They’re actually claiming, in the year 2012, that putting this basic information online — in other words, PDF-ing a document and posting it to the Web — is far too laborious. Somehow, these broadcasters, who have managed to make pictures fly through the air and into your living room for 70 years, are still relying on paper records and perhaps abacuses. Their arguments basically boil down to: “Keep your newfangled Google machines out of our buildings.” It’s ridiculous. As a coalition of public interest groups recently wrote to the FCC: “Those broadcasters that continue to rely solely or primarily on handwritten documents and manual updating of political files would do well to reevaluate their business practices with an eye to joining the modern world.” Steve Waldman, the main author of last year’s exhaustive FCC report on the future of media, has been the leading voice in favor of the FCC’s proposals and against the whinosaurs. “The rest of the world has figured out ways to use the Internet to reduce workload and cost,” Waldman recently wrote on the Columbia Journalism Review website . “I’m not sure the broadcasters want to take the position that they will be the one industry that can’t possibly be expected to use the Internet to improve efficiency.” Back in the USSR The FCC is also pushing broadcasters to put records of political ad buys online — records the stations are already required to keep. This information is especially important in 2012, when broadcasters will rake in billions of dollars from election ads. So why not give the public a way to know who’s trying to influence them? As Waldman explains : “Putting that information online would allow the public and reporters to better understand the flow of money in political campaigns.” Yet according to Allbritton, the TV station owner and publisher of Politico , this is nothing less than the first step on the road to a “Soviet-style standardization of the way advertising should be sold as determined by the government.” Because the Ruskies are so renowned for their transparency efforts? All this hyperventilating and hyperbole is especially galling when it comes from organizations that are supposed to be practicing journalism. As 12 leaders of the nation’s top journalism schools wrote in a letter to the FCC: “Broadcast news organizations depend on, and consistently call for, robust open-record regimes for the institutions they cover; it seems hypocritical for broadcasters to oppose applying the same principle to themselves.” But hypocrisy is another telltale trait of the whinosaur. Get with the Program Lastly, the FCC is proposing that stations keep basic records on what kinds of programming they put on the air. Imagine the audacity in asking broadcasters, who have made money hand over fist from squatting on the public airwaves, to report back on how much news or locally originated programming they actually do. Yet according to the FCC filings of 48 state broadcast associations, the request for standardized reports “carries with it the high risk that the commission will find itself not just at the edge of a First Amendment cliff, but in a catastrophic plunge that intertwines the commission and its staff for the indefinite future in the journalistic news judgments of television stations nationwide.” Such claims are preposterous. The FCC has not proposed any quotas or programming requirements — all it is asking, in exchange for an exclusive and lucrative license, is for broadcasters to report back on what they are already doing. Maybe the broadcasters are just unwilling to face up to the disconnect between their consistent claims that they’re giving the audience what they want, and the conflicting reality that wherever you go the one thing people are sure to agree on is that their local news must be the worst in the country. Now is the time to tell the FCC to ignore all this whining and move forward with its common-sense plans to encourage transparency and accountability. The whinosaurs have a reputation as fierce lobbyists and are good at making a lot of noise. But the climate is changing. So whinosaurs be warned: You either evolve, or you go extinct.

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Businesses Accuse Cybersecurity Plan Of Overstepping Bounds

February 7, 2012

WASHINGTON — A developing Senate plan that would bolster the government’s ability to regulate the computer security of companies that run critical industries is drawing strong opposition from businesses that say it goes too far and security experts who believe it should have even more teeth. Legislation set to come out in the days ahead is intended to ensure that computer systems running power plants and other essential parts of the country’s infrastructure are protected from hackers, terrorists or other criminals. The Department of Homeland Security, with input from businesses, would select which companies to regulate; the agency would have the power to require better computer security, according to officials who described the bill. They spoke on condition of anonymity because lawmakers have not finalized all the details. Those are the most contentious parts of legislation designed to boost cybersecurity against the constant attacks that target U.S. government, corporate and personal computer networks and accounts. Authorities are increasingly worried that cybercriminals are trying to take over systems that control the inner workings of water, electrical, nuclear or other power plants. That was the case with the Stuxnet computer worm, which targeted Iran’s nuclear program in 2010, infecting laptops at the Bushehr nuclear power plant. As much as 85 percent of America’s critical infrastructure is owned and operated by private companies The emerging proposal isn’t sitting well with those who believe it gives Homeland Security too much power and those who think it’s too watered down to achieve real security improvements. One issue under debate is how the bill narrowly limits the industries that would be subject to regulation. Summaries of the bill refer to companies with systems “whose disruption could result in the interruption of life-sustaining services, catastrophic economic damage or severe degradation of national security capabilities.” Critics suggest that such limits may make it too difficult for the government to regulate those who need it. There are sharp disagreements over whether Homeland Security is the right department to enforce the rules and whether it can handle the new responsibilities. U.S. officials familiar with the debate said the department would move gradually, taking on higher priority industries first. “The debate taking place in Congress is not whether the government should protect the American people from catastrophic harms caused by cyberattacks on critical infrastructure, but which entity can do that most effectively,” said Jacob Olcott, a senior cybersecurity expert at Good Harbor Consulting. Under the legislation, Homeland Security would not regulate industries that are under the authority of an agency, such as the Nuclear Regulatory Commission, with jurisdiction already over cyber issues. “Where the market has worked, and systems are appropriately secure, we don’t interfere,” said Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee. “But where the market has failed, and critical systems are insecure, the government has a responsibility to step in.” The bill, written largely by the Senate Commerce, Science and Transportation Committee and the Senate homeland panel, is also notable for what it does not include: a provision that would give the president authority to shut down Internet traffic to compromised Web sites during a national emergency. This `”kill switch” idea was discussed in early drafts, but drew outrage from corporate leaders, privacy advocates and Internet purists who believe cyberspace should remain an untouched digital universe. While the Senate is pulling together one major piece of cybersecurity legislation, the House has several bills that deal with various aspects of the issue. A bill from a House Homeland Security subcommittee doesn’t go as far as the Senate’s in setting the government’s role. Still, it would require DHS to develop cybersecurity standards and work with industry to meet them. “We know voluntary guidelines simply have not worked,” said Rep. Jim Langevin, D-R.I. “For the industries upon which we most rely, government has a role to work with the private sector on setting security guidelines and ensuring they are followed.” Stewart Baker, a former assistant secretary at Homeland Security, said the government must get involved to force companies to take cybersecurity more seriously. Concerns about federal involvement, he said, belie the fact that computer breaches over the past several years make it clear that hackers and other governments, such as China and Russia, are already inside many industry networks. “They already have governments in their business, just not the U.S.,” said Baker. “For them to say they don’t want this suggests they don’t really understand how bad this problem is.” Industry groups have lobbied against the Senate bill’s regulatory powers and say new mandates will drive up costs without increasing security. They say businesses are trying to secure their networks and need legal protections built into the law so they can share information with authorities without risking antitrust or privacy violations. In a letter to lawmakers this past week, the U.S. Chamber of Commerce said any additional regulations would be counterproductive and force businesses to shift their focus from security to compliance. Liesyl Franz, a vice president at TechAmerica, which represents about 1,200 companies, said businesses would prefer to work with the government to enhance security rather than face more regulations. She said companies coping with the potential security risks, market consequences, and damage to corporate reputations, are defending against cyberthreats. Senior national security officials were on Capitol Hill last week to talk to senators about the growing cybersecurity threat. After the meeting, Sen. Susan Collins, R-Maine, said she’s always had a sense of urgency about it, adding, “I hope the briefing gives that same sense of urgency to members to put aside turf battles.” She said senators are reviewing concerns raised by the Chamber about the bill. ___

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Dead Man Found In Foreclosed Home Four Years Later

February 6, 2012

Abandoned homes have become an increasingly common sight amidst a national foreclosure crisis. Yet what may lurk forgotten behind closed doors may be much worse than nothing at all. A Milwaukee real estate agent entered one such house last month after it was repossessed due to tax foreclosure — the government can foreclose on a home if taxes and subsequent fees are not paid off within a designated time period — to find a sight he’s not likely to forget soon. The body of the owner David Carter was found on the stairs in a “nearly skeletonized” state after being left there undiscovered for what investigators believe to be up to four years, The Daily Mail reports . Carter, whose friends and acquaintances described as “smart and generous,” even “funny,” quit his job as a nuisance control officer for the City of Milwaukee in 2007, telling co-workers that he planned to move to New Mexico, according to the Milwaukee-Wisconsin Journal Sentinel . Instead, it appears that Carter committed suicide. He was found with a bullet wound through his head and a handgun on his chest the day that he would have turned 45 years old. Sadly, Carter’s isn’t the first body to be discovered after a seemingly unfathomable amount of time. In England, creditors looking for unpaid bills found the body of a 38-year-old London woman in her rented room in 2006 nearly three years after she’s believed to have died . The episode is the subject of a forthcoming film, Dreams of Life , the research for which revealed that the woman was acquaintances with many influential members of London’s 80s and 90s pop music scene. In addition, police last year found an elderly woman’s body in a home in Sydney, Australia after she was believed to have died sometime around 2003 . Though Carter and others were found in their homes years after their deaths, the opposite situation — declaring someone dead prematurely — has also occurred. A Florida woman is currently suing her lender, JPMorgan Chase, after the bank mistakenly declared her deceased in 2010 , which she claimed ruined her credit score. Similarly, a veteran has had to prove his existence four times over in the past two years after the U.S. Department of Veterans Affairs stopped paying him his pension benefits on the grounds that he’s no longer living . One in every 627 Wisconsin housing units received a foreclosure filing in December 2011, according to RealtyTrac. In total, the state had the tenth most foreclosure activity of any state.

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Cassidy: Who Gets Counted In The Unemployment Rate And Why

February 6, 2012

I would like to respond to something many commentators, on this site and others, have picked up upon: a suggestion that the Labor Department’s Bureau of Labor Statistics (B.L.S.) cooked the unemployment rate by removing 1.2 million Americans from the labor force. Some critics claim that these people should have been counted, and the unemployment rate should be considerably higher than 8.3 per cent.

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BofA Investor Lawsuit Wins Class-Action Status

February 6, 2012

Feb 6 (Reuters) – Shareholders suing Bank of America Corp on Monday won class-action status for their lawsuit accusing the bank and various executives and directors of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co and size of Merrill’s losses and bonus payouts. U.S. District Judge P. Kevin Castel in Manhattan on Monday rejected Bank of America’s effort to deny certification, after the lender claimed that investors could not prove they suffered losses after relying on materially misleading statements or omissions. Bank of America had no immediate comment. Investors had faulted Bank of America for not timely disclosing the scope of Merrill’s soaring losses, which reached $15.84 billion in the fourth quarter of 2008, and for letting Merrill pay $3.6 billion of bonuses at the time. The case covers a variety of investors who owned Bank of America stock or call options between September 2008 and January 2009. Class certification lets plaintiffs pursue their case as a group, which can cut costs, and can lead to larger recoveries than if plaintiffs were to sue individually.

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Crucial Reform Seen As ‘Ferociously Difficult’

February 6, 2012

WASHINGTON — Tax reform sounds like a good idea to lots of people, but where to start? Eliminate the popular deduction for home mortgages? End the write-off for charitable contributions? How about expanding the Social Security payroll tax? Not likely. Politicians of all stripes in this presidential election year are clamoring for simplifying the tax code and closing loopholes. But that would mean Americans would lose some of their prized deductions. Not that Congress actually is likely to end tax breaks for home loans or religious and charitable contributions anytime soon. President Barack Obama and his chief Republican challengers – Mitt Romney and Newt Gingrich – certainly aren’t advocating that. In fact, recommendations to trim the mortgage deduction made in 2005 by a tax-overhaul panel convened by then President George W. Bush and again in 2010 by a deficit-reduction committee set up by Obama were ignored by both those presidents. Overhauling the complex U.S. tax code could mean that for everyone who would pay less someone else would pay more. And every existing provision in the code has its advocates. “Tax reform is ferociously difficult. If you tackle it straight up, the likelihood of success is rather small,” said Henry Aaron, a senior fellow in economic studies at the Brookings Institution. “Whenever you try to take money away from somebody, they will fight harder to keep it than will those who stand to gain.” And if deficit reduction is also a goal, it makes the job even harder. Most recently, a bipartisan deficit-reduction congressional “supercommittee” failed to meet a Thanksgiving 2011 deadline and had to disband when it could not find common ground on tax changes. None of the major tax overhaul proposals now on the table seems likely to be enacted given the current political rancor in Washington. Of course, a lot could depend on the outcome of the November elections. For now, the urgency for both parties is focused on the Bush-era tax cuts, scheduled to expire at year’s end. Republicans generally want to make them permanent. Democrats would like to raise taxes on the wealthy but keep them at present levels for all others. The income tax as we now know it has been around for nearly 100 years, and it’s had only a few major overhauls. The last major restructuring came in 1986, when Republican President Ronald Reagan and Democratic House Speaker Thomas P. O’Neill were able to put aside their political differences to strike a grand deal that both simplified the tax code and lowered rates on most individuals. “To get comprehensive tax reform, you have to have tremendous presidential leadership. There’s no way around that to be successful,” said Douglas Holtz-Eakin, who was the director of the Congressional Budget Office from 2003 to 2005 and now heads the American Action Forum, a conservative public policy institute. In addition to being a hot issue on the campaign trail, tax reform is also being closely studied by congressional leaders who oversee tax-writing, Holtz-Eakin said. “So with all the key players all saying `Let’s do it,’ I think that’s promising.” “Now the next issue is, what is `it’?” There, we don’t have a consensus,” he added. Obama has proposed ending tax breaks for U.S. companies moving jobs or profits to foreign countries. He also would create a minimum tax on their overseas earnings. And he has suggested new tax breaks for businesses that move jobs back to the U.S., for domestic manufacturing and for companies that invest in towns that have suffered major job losses. But getting most attention is his plan to tax personal incomes above $1 million – including investment income – at a rate of at least 30 percent. “Washington should stop subsidizing millionaires,” Obama said in his State of the Union address. “Send me these tax reforms, and I’ll sign them right away.” Obama also wants to see corporate taxes lowered but hasn’t said by how much. The White House has signaled he’ll unveil details on Feb. 13 when he submits his budget for the fiscal year that begins Sept. 1. The nominal corporate tax rate is 35 percent, the highest in the world after Japan. However, few companies pay that much after taking various deductions. Because of recent special deductions in the government’s stimulus programs, including the ability to write off the full cost of purchases of new equipment, corporations last year paid just over 12 percent on average. That is expected to rise to about 26 percent this year, according to Congressional Budget Office calculations. Romney would make permanent most Bush-era tax cuts and would eliminate taxes on interest, dividends and capital gains for those earning under $200,000. He would lower the corporate tax rate to 25 percent. Jobs and tax reform have been leading issues in the GOP primaries so far. Most Americans believe that the tax system is unfair and would like to see it changed, recent polls suggest. The polls show a majority believe upper-income Americans pay less than their fair share, although far more Democrats believe this than Republicans. There is also a big political divide over whether to keep the current system of taxing investment income – such as dividends and capital gains – at lower rates than wages. Far fewer Democrats than Republicans want to keep things the way they are, polls show. Romney, one of the richest presidential candidates ever, recently disclosed that he paid federal taxes at an effective rate of around 15 percent because most of his income came from investments that are taxed at that rate, compared to a top rate of 35 percent for wages. That disclosure has helped fuel the recent surge of interest in tax reform. Gingrich would let people choose whether to file under the current system or pay a 15 percent “flat” tax while preserving the mortgage interest and charitable deductions. He would eliminate the capital gains and estate taxes and would cut the corporate tax rate to 12.5 percent. Former Sen. Rick Santorum, R-Pa., would reduce the number of tax brackets to two – 10 percent and 28 percent, exempt domestic manufacturers from the corporate tax and halve the top rate for other businesses. He would triple the personal exemption for dependent children. Rep. Ron Paul, R-Texas, would eliminate the federal income tax altogether. Also the Internal Revenue Service. He would vote for a national sales tax, and he supports certain excise taxes and certain tariffs. The nonpartisan Tax Policy Center has said that the wealthy would be the biggest beneficiaries of the Romney, Gingrich and Santorum tax plans. The center did not evaluate Paul’s plan The Tax Reform Act of 1986 backed by Reagan and O’Neill reduced the number of tax brackets and lowered the top marginal tax rate to 28 percent from 50 percent (it’s now 35 percent). The reduction in individual taxes was in large part paid for by repeal of the investment tax credit, which effectively raised corporate tax payments to the Treasury by 25 percent, or about $100 billion a year in today’s terms. But the political climate was far difference in 1986. Reagan was a popular second-term president with a good working relationship with Congress. The deficit was under control and the economy was growing, not limping like now. Economist Bruce Bartlett, author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take,” is not optimistic for major tax reform no matter who wins the election. “I think the most we can hope for is a modest improvement to fix some glaring problems in the code,” he said. As to those calling for starting from scratch with a whole new tax system such as the so-called fair tax or flat tax, “I don’t believe that’s going to happen,” Bartlett said. “I think that’s just a political non-starter.” ___

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Moroun And Stamper Might Be Headed Back To Jail

February 6, 2012

Ambassador Bridge owner Manuel “Matty” Moroun and bridge company President Dan Stamper can be jailed for civil contempt involving a judge’s 2010 court order — but only if the judge specifies exactly what it takes for the pair to go free again, the Michigan Court of Appeals ruled today. A three-judge panel issued a sharply divided ruling about the Jan. 12 court order jailing Moroun and Stampfer by Judge Prentis Edwards of Wayne County Circuit Court. The ruling stems from a 2009 lawsuit filed by the Michigan Department of Transportation against the Moroun-controlled Detroit International Bridge Co. involving the Gateway Project to connect the bridge with I-75 and I-96.

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John Fox: 1 Stat Picks Super Bowl Winner… and Business Success?

February 6, 2012

Just like the previous 45 games, the winner of this year’s Super Bowl came down to one stat. Turnovers. According to Stats, LLC, the team that wins the turnover battle wins the game. Not the team to win the coin toss (that’s true only 49 percent of the time), scoring first (66 percent) or even the team that leads after the 3 rd quarter (84 percent). Rather, the team that hangs onto the ball ultimately is the victor. Winning the turnover battle is even a better stat to watch than the more sexy “average more yards per pass play” stat (78 percent). The odds that a team will win the Super Bowl when the following events occur, based on the previous 45 years of Super Bowl history: Event Odds of Winning Win the coin toss 49% (22 of 45) Score first 64% (29 of 45) Gain the first play of 25-plus yards 58% (26 of 45) Lead after the first quarter 68% (23 of 34) Lead after the second quarter 79% (34 of 43) Lead after the third quarter 84% (37 of 44) Lead midway through the fourth quarter 95% (40 of 42) Average more yards per pass play 78% (35 of 45) Win the turnover battle 92% (33 of 36) Source: Stats LLC and WSJ.com Sure, this year’s battle had only one turnover (an interception), but there could have been two turnovers had not NY been called for a penalty for having 12 men on the field (and who knows what the score would have then been). Do Turnovers Predict Business Success? I started my sales career with Intel — back in the go-go days of the late ’70s. Intel was not the chip leader it is today. While we were dwarfed by Texas Instruments, Motorola and many others, Intel sales management was maniacally focused on customer wins. When we won a new account, the Customer Win was celebrated. As a sales guy, it was a nice notch in your belt, especially when it was recognized with a Telex from the sales vice president, Hank O’Hara, or a handwritten note from a regional manager like Frank Gill. But the bigger prize was a Customer Win earned by taking away an account from a competitor. It didn’t even matter how big the account was or if the customer had some marquee value. Nope. Stealing an account created heroes. Same, too, for battling it out with a competitor for a current account. Nothing seemed to get management worked up into a lather like the prospect of losing an existing customer. Even a young field sales rep like me was given full license to call upon anyone in management to fly in for a customer presentation. It was just part of Intel’s DNA to never ever lose an account and to pull out all the stops to win a new account. Turnovers in Your Business? Since I left Intel several years ago I’ve had the opportunity to work with hundreds of small businesses with revenues under $50 million. Some are rising stars. Unfortunately, though, most have flat-lined — having reached a steady-state of customer wins vs. customer losses. With eerie predictability, the “Turnover Stat” holds true. Even in slow-growth industries, those businesses driven by customer retention AND customer acquisition just do better. They make more money, have happier customers and are better places to work. Everyone just seems to understand the priorities without mission statement plaques. How about your business? Does this “Turnover Stat” apply to you? Do you track it?

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Colleen Murphy-Dunning: Green Jobs for Ex-Cons: Fixing Broken Systems

February 6, 2012

Reports by the Labor Department last Friday of an 8.3 percent unemployment rate, the lowest it’s been in nearly three years, signal hope of economic recovery. Almost two million jobs were added in the last year. Though warning of fluctuation, President Obama announced that “the recovery is speeding up.” But as they inevitably must, gross national statistics veil those boats not lifted on the rising tide. It is believed that the unemployment rate among ex-offenders exceeds fifty percent. (National statistics are not available, but estimates from state agencies of unemployment among the formerly incarcerated range from about 35 to more than 60 percent.) Our country, a promised land of opportunity, needs a national green jobs program that targets ex-offenders. The United States maintains 25 percent of the world’s incarcerated population, locking up one in every hundred adults. More than half of all black men without a high school diploma will go to prison. Our extensively privatized corrections system generates the perverse incentive by which high incarceration rates buoy corporate profits. The 2005 annual report of the Corrections Corporation of America advises its investors that: Our growth is generally dependent upon our ability to obtain new contracts to develop and manage new correctional and detention facilities… [A]ny changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them. More than 650,000 ex-offenders are released every year with little more than fifty dollars in pocket and a bus pass. Amid fitful economic recovery and the fierce competition of over-qualified job applicants, prospects appear grim. It’s no wonder recidivism rates top 60 percent in some states. Our country also faces immense environmental challenges spanning across the next few decades. The American Society of Civil Engineers recently gave a grade of D+ to the aging U.S. electric grid, which is inefficient, ill-equipped to manage intermittent energy technologies, and incapable of adapting to smart grid innovations. Our drinking and wastewater infrastructure both received grades of D-, and budgets allocated to upgrading these systems fall far short of what is required. The confluence of these challenges affords a clear and profound opportunity. The Urban Resources Initiative , through its GreenSkills program, works with small crews of ex-offenders every year, merging prison reentry with job training in urban forestry and environmental stewardship. We are part of a growing group of organizations across the country testing the premise that horticultural work can restore urban ecosystems, environmental value, and vulnerable populations. The recent installation of a solar panel array at two correctional facilities in Merced County, Illinois, to defray operational costs opens the possibility of not simply a transitional green jobs training program, but of a green jobs pipeline that runs from inside prisons to prisoner release and fulltime employment. Rather than contract Siemens to install the panels, as was done, could Merced County have created an internal job corps trained in solar installation and efficiency retrofits? In a short article last year, The Wall Street Journal cited a report on the “top 10 thriving industries” of 2011. Correctional facilities made the list with a haul of $35 billion in revenue during 2010. Wind and solar power also made the list. In 2011, Corrections and Medicaid were the only two areas of state budgets that saw a percentage increase over the previous year. Transportation, public assistance, and education all lost a share of their budgets, with public universities taking the biggest hit. Jacob Lew, President Obama’s budget director and Chief of Staff, has written that, “The budget is not just a collection of numbers, but an expression of our values and aspirations.” It seems Mr. Lew could hardly have uttered a more damning indictment of U.S. values. It’s time we did better.

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Adam Hanft: Capitalist Porn – Behind the Fetishization of Super Bowl Commercials

February 6, 2012

Just as the marketing of Christmas begins around Columbus Day, each year the Super Bowl commercial frenzy muscles onto the scene earlier and earlier, and extends beyond the final scrimmage. In fact, a Super Bowl commercial is no longer a mere message, it is a complex and prismatic marketing campaign that, of course, uses social media to create anticipation and start a “conversation” — as the brand mavens call it — with consumers. If “advertising is dead,” like many say, then the two weeks before the Super Bowl are the kind of mortality that American manufacturing would like to experience. We’ve reached the point where these commercials have transcended their conventional job — which is to sell a product. They have largely become the product itself; Super Bowl ads have actually become “brands” — self-contained economies that require their own marketing and PR strategies. You can image the meetings, the PowerPoints, the Keurig-fueled debates about how soon before the game to release the commercial, exactly what the long-form version of the spot should be, and how to leverage the compliant media to drive YouTube viewcos and Twitter conversations. As of a couple of hours before the game, more than 11.5 million people had seen Matthew Broderick in ” Matthew’s Day Off “, the reborn Bueller in Honda’s commercial launching the new 2012 CR-V. Which means that the millions who see the spot will be watching an old friend in a new context, and paying no less attention to it — and perhaps more — had it not been previewed. Much of the commentary around the apotheosis of the Super Bowl commercial is driven by the same argument we’ve been hearing for a while. That our culture is fragmented, our media universe splintered, and we hunger for those moments of rare communal focus. Megan Garber put it nicely on the Atlantic’s blog yesterday, noting that the simultaneous viewing experience offers the “warmth of assumed connection that convened attention can confer. I am watching Matthew Broderick as 110,999,999 other people do. There is something epic — and rare — about that.” But I think there’s something else operating here. Why would TV advertising for the game, a constructed manipulation that’s clearly designed to coerce us into buying “stuff we don’t need” — as the conventional meme used to go — rise to level of honor and exaltation, winning such intense and prolonged attention? And why would millions of people — “consumers” or “end users,” as marketers call them — willingly and happily become unpaid workers for billion-dollar corporations by tweeting and Facebooking and participating in polls and surveys about the advertising? The 99% aren’t protesting, they are acting as useful idiots — and no, Lenin didn’t invent that phrase — for the 1%. There are a number of interlocking reasons for this, and Megan Garber’s point that we cherish the rare communal connection, is just one of them. At the salesy center of our national obsession with Super Bowl commercials is that we are all marketers now. After all, we’re all desperately concerned with our personal brands, and how we manage them on Facebook, LinkedIn and Twitter. So we enjoy analyzing the black magic of commercials, because we’re all part of this meta-branding game. We no longer resent being sold stuff. We’re as much the manipulators as the manipulated. We’re fascinated by persuasion. Soon, everyone will be working on their Klout score, or some equivalent measure of personal, yet commercial success. There’s yet another reason why we are obsessed with Super Bowl commercials. They’re more interesting than the average TV spot, and hence we’re more interested — a communications tautology. It is precisely because viewers are focused on them that advertisers can get away with commercials that require more intense concentration. Super Bowl commercials can unfold more languidly, can use more complex story-telling techniques, can inject jarring elements of non-linearity and can be more subtle and filmic. We’re expecting that level of richness. The rest of the year, when we’re emailing and texting and Words-With-Friending, and we’re befogged by clashing inputs, we don’t have the attention span or patience to watch commercials unfold. It also helps that so many people have seen the commercials before, so they can focus on some of the small details that otherwise be overlooked. There are so many tiny references to the original movie in the Ferris Bueller take-off that MTV has published an entire skeleton key to them. If you look at the survey data, Americans have lost faith in our institutions of power, from government to business to media. We say corporations have too much money and put their own interests first. We also claim we don’t trust advertising or that we make buying decisions based on it. Recognizing that, advertisers are canny enough to recognize their own vulnerabilities. Last year, Hulu’s Super Bowl advertising described the company as an “Evil plot to destroy the world.” This year, they called themselves an ” eviler plot .” So we’ll allow ourselves to be pawns in the game, as long as we’re aware of what’s happening to us, and the companies who are selling to us continue let us judge them. That’s a reciprocal deal every one of the Fortune 500 will take, any day. Especially on Super Bowl Sunday.

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Robert Creamer: Last Friday the GOP Had a Really Bad Day

February 6, 2012

Last Friday the GOP had a really bad day. It didn’t come in the form of new polling results — or some new political scandal. It was delivered to them by the economic statistics: Private sector jobs up 243,000 — almost 100,000 more than expected. Unemployment rate down to 8.3 percent. Twenty-three straight months of private sector jobs growth. But you say, this is not bad news — this is good news. Not for the GOP and its chances of ousting President Obama, seizing control of the Senate or maintaining its majority in the House. As Senate Republican leader Mitch McConnell made ever so clear early last year, the Republican Leadership — and their backers on Wall Street — have one and only one goal: to defeat President Obama next fall. To do that, the GOP is betting against the American economy. For the last two years they have done everything in their power to slow America’s recovery from the greatest economic meltdown since the Great Depression. They have opposed virtually every element of the president’s American Jobs Act. They brought the economy to the brink by threatening that they wouldn’t allow America to pay its bills during the debt ceiling standoff last year. They tried their best to prevent extension of the payroll tax holiday and unemployment benefits that are so critical to maintaining buying power momentum as the economy begins to pick up speed. And, of course, they advocate returning to the regulatory and fiscal policies that caused the Great Recession in the first place. But the most significant thing they have done to stall the economic recovery has been their refusal to continue federal aid to state and local government. In the last 23 months, the economy has created 3.7 million new private sector jobs. But during the same period, it has created only 3.165 net total jobs. That is because government — mainly state and local government — laid off a net of about 535,000 people. If the Republicans in Congress had not refused to continue providing aid to state and local governments, it is likely that unemployment would be in the mid 7 percent range and the economy as a whole would have at least another half million jobs. And we would also be more likely to have more private sector jobs as well, since the additional teachers and firefighters and policemen who the Republicans basically fired, would have had money to spend on the products and services produced by private businesses. As much as they like to pretend they don’t agree with “Keynesian” economics, many Republicans completely understand that by refusing to provide aid to state and local government, they are hurting the economic recovery — and that is exactly what they are trying to do. They have been perfectly willing to allow our kids to have fewer teachers and bigger class sizes, and to allow our cities to have fewer policemen and firefighters all to advance their political goal of slowing the economic recovery. But despite their efforts to the contrary, the economy is beginning to gain traction. That is very important to the prospects of everyday Americans — and it is critically important politically. Anyone who has ever tried to move a car that is stuck in the snow — or in the mud — knows what I mean. As long as the car just keeps spinning its wheels, there seems to be no hope. But after you’ve shaken and pushed, and put sand under the tires and the car finally begins to get the smallest amount of traction — everyone’s spirits change. Suddenly there is hope that you’re finally going to get the car moving again. That’s what’s beginning to happen to the economy — and it will have an enormous effect on the attitudes of voters. It begins to give them hope that the president’s policies are, in fact, moving the economy in the right direction — that it actually is beginning to build up steam — that there is hope that middle class Americans are actually going to see their prospects begin to improve. And it gives lie to the ridiculous statements of Mitt Romney, who continued to claim as late as last Friday that Barack Obama has made the economy “worse.” The definition of “worse” is “not as good as it was before.” The economic disaster that was caused by the policies of the Bush administration — the same policies that Romney wants to bring back to the White House — caused the destruction of 8 million jobs. In fact, George Bush was the first president in modern American history to preside over net zero private sector job growth. As soon as President Obama took office he put into place policies that reversed those jobs losses. Monthly private sector job losses declined continuously and finally turned positive — and the economy has added private sector jobs continuously for the last 23 months. In the last two months alone, the economy has added 446,000 new jobs. That is not worse . In fact, that is commonly known as better . And that is a huge problem for the GOP political narrative this fall. In the next several weeks, Congress will rejoin the battle over the extension of the payroll tax holiday and unemployment benefits for those who are out of work for no fault of their own. Recall that this was the fight that involved the complete surrender of GOP opposition in the week leading to the Christmas holidays. Then, they agreed to a two month extension that guaranteed that the battle would be renewed — a fight that will once more highlight just how, when it comes to jobs, President Obama and the Democrats are doing battle with a “do nothing Republican Congress.” There will likely be ups and downs in the jobs numbers over the next eight months. But as long as the economy continues to gain traction — and as long as Democrats continue to battle for jobs legislation in Congress — there will be many more bad days ahead for the GOP’s strategy of making themselves look better by trying to make the economy worse. Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com . He is a partner in Democracy Partners and a Senior Strategist for Americans United for Change . Follow him on Twitter @rbcreamer.

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Connie Dieken: Influencer of the Week: Cancer-Conquering Super Bowl Linebacker

February 5, 2012

The All American linebacker with the crazy face paint — that’s how Mark Herzlich was defined during his stellar football career at Boston College. Then came cancer . Doctors hoped to redefine the 2008 Atlantic Coast Conference Defensive Player of the Year as Mark Herzlich, cancer survivor. Finished with football, yet alive and well. But Mark disagreed. He had a goal. Always ambitious, he was still determined to become Mark Herzlich, NFL linebacker. Cancer be damned. He’s my Influencer of the Week because he inspires and models this mindset: A goal is a dream with a deadline. After his devastating diagnosis of Ewing’s Sarcoma, Herzlich set a deadline: September 4, 2010. That’s the date when he would beat his rare form of bone cancer. That’s the date when he’d get back on the field at Boston College. Not only did he accomplish that goal, but he set and reached another goal, and another. That’s why he’s now Mark Herzlich, New York Giants linebacker. Mark Herzlich, Super Bowl player. Turns out, the former face paint fanatic was not so crazy, after all. A goal is a dream with a deadline. Have you set a deadline to make your dreams come true?

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Chicago College Offers Class On Occupy Movement

February 5, 2012

CHICAGO — A Chicago college is offering a class on the Occupy movement. Thirty-two undergraduate students are enrolled at Roosevelt University’s “Occupy Everywhere” class. It’s a three-credit political science course that looks at the movement that started last summer near New York City’s Wall Street and spread nationwide. Leaders from the Chicago movement may present guest lectures. Professor Jeff Edwards studies social movements. He says the Occupy movement has been unfolding before students and the class is a good opportunity for them. He says they are reading a range of analysis on the movement concerned with corporate greed and the division of wealth. ___

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Fred Goldring: A Strategic Insurance Policy for Self-Absorbed Rich People

February 5, 2012

Ok let’s look at the current state of affairs in the U.S. from the perspective of that portion of the 1% who only sees things from their own completely self-interested viewpoint. You’re someone who has worked really hard — the old fashioned way — to earn what you have achieved (or you are part of the lucky inheritance club and your father or grandfather worked really hard to get what you now enjoy). You’ve hit it big and now have lots of money and a great lifestyle. You have a very difficult time rationalizing or even comprehending why your dollars should go towards higher taxes to support a bunch of poor, know-nothing, lazy people, particularly those immigrants and undocumented aliens who come here and live off the fat of the land for free (when they’re not otherwise taking away those menial manual labor jobs from real Americans). And you are dead set against that big wasteful government machine that only encourages people not to work, live off welfare and food stamps and now get expensive or subsidized medical care via “Obamacare” which you are paying for. So with all of this money out of your pocket for taxes, what does it do for you personally? You are all set in your life and what happens to these people is not your concern because, hey, it’s America, and everybody has a chance to attain the American Dream just like you did. If they don’t, it’s their problem, not yours; they are obviously just lazy or unlucky, some make it and some don’t, that’s unfortunately the way the world works. So keep taxes as low as possible (particularly for you as one of the “job creators”), pay for only the minimum basic government services which are necessary, and let these people fend for themselves or be cared for by the “private sector” which you are certain always steps in to fill the void. Here’s the problem with this ideology: it’s actually in your self-interest to take care of these people. If history has taught us anything, it was that this same attitude eventually caused the fall of many civilizations throughout the millennia, (many of which were around a lot longer than the 236 years that the United States has existed). What happened in those situations was that too much money, power and control were in the hands of too few at the top who started to distance themselves from the masses and pull the ladder up behind them, leaving them in the dust. And they got mad as hell and couldn’t take it anymore. When you actually look at the facts about taxes today, you see that we are paying lower taxes than ever before and all that has been suggested is closing tax loopholes and raising the top tax bracket from 36% to 39% (that was the top rate when Clinton was in office and we had a surplus). But since that may still seem like a lot to ask, let’s look at this in a completely different way. Instead of looking at all of this merely as the government taking your money and giving it to unentitled poor people, how about looking at this slight increase in your taxes (which frankly won’t make one iota of a dent in your lifestyle) as a strategic insurance policy or a hedge? You regularly take out life insurance policies, health insurance policies, liability policies, disability policies, car insurance and homeowners, renters insurance policies — even policies to pay inheritance taxes. How about an insurance policy against people rising up and just taking what you own and possess because you’ve pushed them too far and they have no where else to go? To understand what I mean by this, let’s start by looking at something that is obvious and that many of us take for granted: that invisible line separating the rich suburbs from the poor neighborhoods and the inner city. In case you haven’t noticed, there is no wall or physical barrier that keeps poorer people from invading the rich neighborhoods. Yeah, I know we have the police force, private security patrols, alarms, etc. and we know that “those people just wouldn’t do that”. But in reality all we really have in place is an implied social contract. The contract is that those poor needy people will more or less leave you alone as long as you take care of their basic needs (food, clothing, shelter, protection, education and the like). However, with the direction we are going in lately, we seem to be getting dangerously close to imposing a condition of desperation with these people because we are threatening to take away (and in some cases already have) their opportunity to get these basic human necessities. And we will discover that there will come a point when these people will have been pushed too far and will feel they have nothing left to lose. They will then come to realize very quickly (much like the emperor’s new clothes) that this “line” between their neighborhood and yours is, in reality, invisible and non-existent. In a nation where we’ve made the ability to get a firearm much easier than getting a driver’s license and now have hundreds of millions of guns out there, is it really worth the risk of pushing poor people (and middle class people who are on the verge of falling into poverty) to the boiling point? People who feel oppressed also have new tools to connect and rise up behind a cause than ever before. Can anyone say Arab Spring? Occupy Wall Street? Putting aside the rational Judeo/Christian moral arguments about helping those less fortunate and in need, creating a societal structure to help people pull themselves up and giving them the opportunity to advance in society, it is in the self-interest of you as a “one percenter” to help these people. If you don’t, you run the very real risk of the “invisible barrier” evaporating and having real class warfare in this country. Despite the political assertions to the contrary, it is not “”class warfare” to tell the 1% that some of their money should go towards helping those less fortunate – it’s actually good, smart, strategic business. It’s an insurance policy to protect your assets and good fortune. There’s that old saying about how “the pigs get rich and the hogs get slaughtered”. The completely self-interested members of the 1% need to decide soon whether they are going to be pigs or hogs. You might say I’m just being paranoid. I say look back at history for this lesson, don’t take my word for it. And for a bit of underscored irony, be sure to catch the new Batman movie The Dark Knight Rises that millions will be watching this summer. Who is that new villain who is terrorizing the people of Gotham City? His name is Bane. Sounds eerily like the name of Romney’s former company.

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GOP Lawmakers Seek Vote On PA Natural Gas Drilling Bill

February 5, 2012

HARRISBURG, Pa. (AP) — A final framework is at hand on sweeping legislation to impose an impact fee and update safety regulations on Pennsylvania’s booming natural gas industry, top Republican state lawmakers say. Republicans notified rank-and-file lawmakers Saturday night that they hope to hold votes this week on a framework reached by negotiators from the House, Senate and Gov. Tom Corbett’s office during closed-door negotiations over the past six weeks. Pennsylvania is the only major gas-producing state that doesn’t tax natural gas production. “These discussions have progressed rapidly over the course of the last two weeks,” House Speaker Sam Smith and House Majority Leader Mike Turzai said in a letter to lawmakers. “In fact, staff have been working throughout the weekend and will be working tomorrow in order to have a proposal that we can consider as early as this week.” According to summaries of the framework distributed to lawmakers, the impact fee would rise and fall with the price of natural gas and inflation. Counties that host the drilling would have the option of whether to impose the fee, but a critical mass of municipalities could override a refusal. Details of the exact fee were not included in the summaries. The bill would increase the required distance between drilling and public water sources such as reservoirs, but not to the extent sought by Democrats, and it would require the state to develop regulations for transporting drilling wastewater and enforce qualifications of treatment plant operators. Money from the impact fee and state forest drilling royalties would be distributed to a wide range of purposes, including bridge repairs, water and sewer plant improvements, statewide environmental cleanup programs and purchases of natural-gas fleet vehicles. Local governments would get 60 percent of the money from an impact fee, with 40 percent going to state programs or agencies. It also would address a top priority of the natural gas industry and set limits to prevent municipal officials from imposing zoning ordinances that effectively prevent drilling there. A drilling operator could ask state utility regulators to review a local ordinance to determine whether it allows for “the reasonable development of oil and gas.” If the Public Utility Commission or a state court decides that a local ordinance fails, the municipality would be unable to receive impact-fee money until it changes it. Pennsylvania lawmakers have talked about whether to tax the natural gas industry since it arrived in earnest in 2008 to tap into the Marcellus Shale natural gas formation, considered the nation’s largest-known natural gas reservoir. The drilling has drawn opponents who fear it is polluting the water supply. The Marcellus Shale lies primarily beneath Pennsylvania, New York, West Virginia and Ohio. Pennsylvania is the center of activity, with more than 3,000 wells drilled in the past three years and thousands more planned as shale emerges as an affordable, plentiful and profitable source of natural gas.

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Super Bowl: Microbrews Make A Run At Big-Time Beer Makers

February 5, 2012

By David K. Randall Feb 3 (Reuters) – Beer and football: it’s one of those perfect combinations, like peanut butter and chocolate. Super Bowl Sunday is the eighth-largest day for beer sales in the United States, according to the Nielsen Co. Most of the estimated 49.3 million cases sold will be consumed at home or a living room party, not at a bar. That large in-home audience for American football’s annual championship game this Sunday is part of the reason the broadcast has long been prime real estate for beer commercials featuring everything from talking frogs to glass bottles playing quarterback. But investors shouldn’t be fooled by the clever advertising from big-time beer makers touting brands like Coors Light and Budweiser. Those names might be dominant on the airwaves, but space in the refrigerator is increasingly going to specialty beers. The U.S. beer market is in the midst of a transition. Smaller, craft brewers are taking market share from global giants like Anheuser Busch InBev, which has a 47 percent share of the U.S. beer market. These smaller companies target discerning, and often affluent, customers who are the foodies of the beer world. The message is resonating. While sales of traditional names have fallen by as much as 2 percent since 2009, revenue in the craft brew segment has grown by double-digits, according to Beer Marketer’s Insights, a trade publication. How to play a shifting beer market. GO SMALL, BUT HEDGE Craft brewers are a concentrated bet on higher-end U.S. consumers. The majority of their sales come from the domestic market. Typical buyers of craft beers are frequently Whole Foods customers. Concerned more with quality than convenience, they are willing to pay more for what they believe is a superior product. They tend to be older than 30, employed as professionals and earn higher-than-average salaries. The core audience for traditional products distributed by global beer companies, meanwhile, is 21 to 30 year old men, a demographic that has been hit harder by unemployment since the recession ended in 2009. Though prices differ by region, craft brews tend to be more expensive than bigger brands. A six-pack of Coors Light bottles goes for just under $7 in the New York area; a similar pack of seasonal Sam Adams for about $9. Boston Beer Company, the brewer behind Sam Adams, is the most efficient option for tapping into the craft brewery trend. It is the biggest small company in the marketplace, with a share of about 1 percent of the total U.S. beer market. Analysts like Boston Beer in part because it is small, but growing at a time that customer tastes are changing. “Consumers have been willing to try and embrace new and interesting beverages and change long-held daily habits,” noted Marc Riddick, an analyst at Williams Capital Group, in a Jan. 30 report. Riddick rates the company an outperform. Still, it is more expensive than the average stock, trading at 23 times earnings. The broad Standard & Poor’s 500 index trades at about 13 times earnings. And shares are down about 5 percent since the start of the year, on investor concern about the effect of high commodity costs on the company’s margins. Barley cost pressures are estimated to add more than $8 million in incremental cost, according to the company. Investors can hedge a bet on Boston Beer by picking up a commodity-focused fund that would benefit from a jump in barley prices. The $427 million Elements Rodgers International Commodity Agriculture ETN (RJA), for instance, holds futures contracts for some 22 products, including wheat, barley and oats. The fund charges 75 cents per every $100 invested. The Craft Brew Alliance, a smaller brewing company in the Pacific Northwest, is another bet. It has less than 0.6 of the total beer market, analysts said, but could be a takeover target for a larger company looking to expand its reach. PLAYING DEFENSE Global brewers are also taking steps to go smaller. Anheuser Busch InBev, for instance, purchased Chicago’s Fulton Street Brewery last year for $38 million and will continue to distribute its popular 312 Urban Wheat Ale. Molson Coors Brewing and SABMiller, meanwhile, signed a joint venture in 2007 called MillerCoors. One of its divisions, called Tenth and Blake, markets and sells craft brands. Tenth and Blake’s sales increased by 17.2 percent in its last quarter, driven by increased sales of Blue Moon and Leinenkugel’s. “These mega beer companies really depend on the success of their brands like Coors Light and Bud Light,” said Thomas Mullarkey, an analyst at Morningstar who covers the beer industry. “But they want success at the craft level too. By buying small, they can put their tremendous distribution networks to work and add to their competitive advantage.” Larger brewers also offer another benefit: dividends. Anheuser Busch InBev, trades at a P/E of 20 and has a dividend yield of 1.7 percent. SABMiller trades at a P/E of 23, with a dividend yield of 2.4 percent. Diageo, parent of Guinness and several liquor brands, has a 3.14 percent dividend yield. Only a few funds offer specialized bets on the beer market. The $82 million Vice Fund offers perhaps the best alternative, though it comes with a hefty price tag of $1.81 per every $100 invested. The fund concentrates its bets on so-called sinful markets of alcohol, tobacco, gambling and weapons manufacturers. Diageo, SABMiller and Carlsberg are among its top holdings. The fund is up an annualized 0.5 percent over the five years, slightly more than the 0.1 percent return of the S&P 500 over the same time. (Reporting By David Randall; Editing by Jennifer Merritt and Steve Orlofsky) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Happy Birthday, Facebook!

February 4, 2012

Today marks the eighth anniversary since the social network first launched at Harvard University in Mark Zuckberg’s dorm room on February 4, 2004. After Google, Facebook is the most visited site in the world and may reach as many as 1 billion members by August , notes Mashable. On February 1, the company filed a Form S-1 with the SEC in preparation for an IPO worth $5 billion. Some speculate that once Facebook begins trading publicly, it could be valued as high as $100 billion . According to Facebook’s S-1 , the company pulled in a whopping $1 billion in net profit on $3.7 billion in revenue in 2011. But much of Facebook’s success has come from building a better user experience and resisting the temptation to make fast money. Indeed, the S-1 featured a section titled “The Hacker Way,” a declaration by Mark Zuckerberg, who wrote that the company’s mantra has long been to focus on delivering features first and improving later. WIth over 800 million members worldwide, it’s pretty amazing how Facebook has grown and changed our lives over the years. It now seems almost impossible to imagine life without witty status updates, friend requests, relationship statuses or photo tags. Users became even more attached to the site after the company rolled out interactive features like chat, the timeline and the subscription button . Some might even say the site resembles a digital resume, especially since now you can turn your timeline into business cards . Even more notable is how Facebook expanded internationally. Available in over 70 languages, 80% of the company’s monthly users are from outside the U.S. and Canada . Happy Birthday, Facebook.

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Economists: Job Growth Won’t Deter Fed From Another Massive Stimulus

February 4, 2012

By Chris Reese NEW YORK, Feb 3 (Reuters) – Economists at most leading Wall Street firms stuck to their belief that the Federal Reserve will undertake another massive stimulus program, even after data on Friday showed U.S. job growth hit its fastest pace in nine months in January. Economists at 13 of 20 U.S. primary dealers – the large financial institutions that do business directly with the Fed – said the Fed would eventually expand its balance sheet by buying mortgage-backed securities or a combination of MBS and Treasuries. A similar poll conducted last week showed 12 of 19 dealers were looking for another program of quantitative easing. Friday’s poll came after the government said U.S. employers added 243,000 jobs last month, and the unemployment rate dipped to 8.3 percent from 8.5 percent in December. “Despite the fall in the unemployment rate, we do not believe the outlook for Fed policy has been altered significantly,” said Omair Sharif, U.S. economist with RBS Securities in Stamford, Connecticut. “To be sure, it will be more difficult for (Fed Chairman Ben) Bernanke to sell QE3, but it is still too early to rule it out, given the strong inclination that we think the Fed leadership has to act.” The Fed has already completed two rounds of quantitative easing, known as QE1 and QE2, under which it has bought a total of $2.3 trillion in mortgage-backed securities and Treasury debt. Lingering economic weakness has fueled expectations of more such stimulus. The Fed’s current $400 billion stimulus program, dubbed “Operation Twist,” extends the maturity of the central bank’s Treasury debt holdings in an effort to bring down longer-term rates like those on mortgages. Operation Twist is scheduled to last through June. Fed officials last week said high unemployment was one of the reasons they expect to hold interest rates at the current level near zero through late 2014, and that they were considering further stimulus. Though the rate of job growth in January was the fastest since April and the 8.3 percent unemployment rate was the lowest since February 2009, the stop-start nature of the recovery so far means the Fed will be looking for consistently strong improvement in the labor market. “The Federal Open Market Committee majority will need to see sustained strong hiring for many months before QE3 is off the table,” said Michael Hanson, senior economist at Bank of America Merrill Lynch in New York. In Friday’s poll, nine of 12 dealers expected the Fed to undertake QE3 in the first half of this year, while two dealers saw the program in mid-2012 and one forecast it for September. The median of forecasts from 11 dealers was for a program that is $600 billion in size, which was unchanged from the results of a similar poll last week. Six of 12 primary dealers said a QE3 program would involve the Fed buying only mortgage-backed securities, while six said the central bank would buy both MBS and Treasuries. “They have bought a lot of long-term Treasuries, but to do another big program of several hundred billion dollars they would really be crowding the long end of the Treasuries market,” said Kevin Logan, economist at HSBC Securities in New York. He added, “They also want to get directly at the housing market, so buying mortgages is more direct.” There are 21 U.S. primary dealers, of which 20 responded to the poll. Do you expect the Fed to If so, will announce a How large the Fed buy further round will the MBS, or of quantitative program be? Treasuries, COMPANY easing? When? ($billion) or both? BAML Yes (Yes) Sept (Sept) 800 (800) Both (Both) BMO Capital No (Possibly) No (NA) No (NA) NA (MBS) Bank of NS Yes (Yes) Mid 2012 (Mid 2012) 500 (500) Both (Both) Barclays No (No) No (No) No (No) NA (NA) BNP Yes (Yes) June (April) 400 (400) MBS (Both) Cantor Yes (Yes) April (April) 750 (750) MBS (MBS) Citigroup No (No) No (No) No (No) NA (NA) CSuisse Yes (Yes) Q2 (H1 2012) 700 (600) Both (Both) Daiwa No (No) No (No) No (No) NA (NA) Deutsche No (No) No (No) No (No) NA (NA) Goldman Yes (Yes) Mid 2012 (Mid 2012) NA (NA) NA (NA) HSBC Yes (Yes) NA (June) NA (NA) MBS (Possibly Both) Jefferies Yes (Yes) Q2 (Q2) 750 (750) MBS (MBS) JP Morgan No (No) No (No) No (No) NA (NA) Mizuho Yes (Yes) Q2 (Q2) 800 (NA) Both (Both) M Stanley Nomura Yes (Yes) Q2 (Q2) 350-500 (375) Both (MBS) RBC Yes (Possibly) H1 2012 (NA) 600 (500) MBS (MBS) RBS Yes (Yes) June (Mid 2012) 600 (600) Both (NA) Soc Gen Yes (Yes) March (March) 600 (600) MBS (MBS) UBS No (NA) No (NA) No (NA) NA (NA) (Additional reporting by Pam Niimi; Editing by Leslie Adler)

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