california

Hollywood Lobbyist To Politicians: Don’t Count On ‘Support’ If You Opposed SOPA

by on January 24, 2012

Huffington Post…

California Watch . By Will Evans Hollywood is threatening politicians with one thing they hold very dear: campaign cash. As anti-piracy legislation stalled in Congress last week, the movie industry’s top lobbyist, former U.S. Sen. Chris Dodd, warned Democrats not to count on Hollywood money if they turn their backs on the industry’s legislative priority. Among the biggest recipients of Hollywood money are Californian members of Congress who remain supportive of the controversial anti-piracy bills. Eight Californians in the House of Representatives, as well as Democratic U.S. Sens. Dianne Feinstein and Barbara Boxer, co-sponsored the bills, representing more co-sponsors than from any other state. Boxer was the top Senate recipient of campaign contributions from the movie production industry over the last six years, picking up nearly $413,000, according to data compiled by MapLight.org and the Center for Responsive Politics. Democratic Rep. Howard Berman, whose Los Angeles district includes the famed Hollywood sign, is the industry’s top beneficiary in the House, picking up $106,500 in the last two years of reported contributions. Berman was an early co-sponsor of the Stop Online Piracy Act that the Motion Picture Association of America has been pushing. The movie industry and other supporters maintain that the bills, known as SOPA in the House and PIPA [PDF] in the Senate, are necessary to fight foreign websites that pirate American films and music. Opponents, including tech companies, claim the bills threaten freedom of expression on the Internet. The debate pits two powerful California industries against each other, but one gives much more political money than the other. In the Senate, for example, MapLight.org found that the entertainment industry gave $14 million in contributions over the last six years, compared with $2 million from Internet interest groups. The rare admission of the power of campaign contributions from Dodd, a former senator and past presidential candidate, puts a spotlight on the influence of money in this policy debate. “Candidly, those who count on quote ‘Hollywood’ for support need to understand that this industry is watching very carefully who’s going to stand up for them when their job is at stake,” Dodd told Fox News last week. “Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake.” Dodd, CEO of the movie industry association, added: “I would caution people don’t make the assumption that because the quote ‘Hollywood community’ has been historically supportive of Democrats, which they have, don’t make the false assumptions this year that because we did it in years past, we will do it this year.” Watch Dodd’s interview with Fox News : Watch the latest video at video.foxnews.com Howard Gantman, spokesman for the association, said in an e-mail that Dodd “was merely making the obvious point that people support politicians whose views coincide with their own. When politicians take positions that people disagree with, those people tend not to support those politicians.” Meredith McGehee, policy director of the Washington-based Campaign Legal Center, said Dodd’s statement “reveals how much the current system is legalized bribery.” “It’s notable that it’s coming from someone who was so steeped in the system,” she said. Art Brodsky, spokesman for Public Knowledge, an advocacy group that fought the anti-piracy bills, said campaign contributions have indeed factored into the policy battle. “You’d have to be totally naive not to think so,” he said. “Look at the contributions and look where people were on the issue.” Californian co-sponsors of anti-piracy legislation in the House include Los Angeles-area Democrats Karen Bass, who received nearly $30,000 from the movie industry; Brad Sherman, who got $23,000; and Adam Schiff, who picked up about $19,000. Another co-sponsor, Rep. Mary Bono Mack, a Palm Springs Republican, received almost $22,000 over two years. Technology companies and Internet activists succeeded in stalling the bills despite the fact that Hollywood gives more money. But that doesn’t mean that campaign cash didn’t matter, said McGehee, because the fight isn’t over. “We’re only in round one,” she said. Feinstein, who garnered about $146,000 over six years from movie production interests, is working toward compromise legislation. In a statement, Feinstein said: “The only way we can resolve the differences on this bill is by the key CEOs sitting down together.” Will Evans is an investigative reporter for California Watch, a project of the non-profit Center for Investigative Reporting. Find more California Watch stories here .

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Hollywood Lobbyist To Politicians: Don’t Count On ‘Support’ If You Opposed SOPA

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Warehouse Woes: Workers Say They’re Losing Jobs For Speaking Up

by Dave Jamieson on January 18, 2012

Huffington Post…

Nearly a hundred warehouse workers in California who spoke up about alleged wage violations and unsafe working conditions fear they now may lose their jobs. The workers, most of whom load and unload goods destined for Walmart stores, filed a class action lawsuit in the fall against staffing company Rogers-Premier Unloading Services, their employer, and against Schneider Logistics, the company that’s contracted by Walmart to oversee the Riverside County warehouse. The workers contended that they often weren’t paid the legal minimum wage or overtime and were threatened with termination when they complained. Now, the workers say they’ve been notified by management that their jobs will be end on Feb. 24, when a contract between Rogers-Premier and Schneider apparently comes to a close. Erin Elliott, a spokeswoman for Schneider, said that the move was “solely the decision of Rogers-Premier” and that the company will no longer provide workers to the Schneider facilities in Elwood, Ill., or Savannah, Ga., either. Rogers-Premier did not respond to a request for comment. Daniel Lopez, who has been loading trucks at the warehouse since 2009, said he was notified both orally and in writing that his job would end next month. “They just asked us to stay on with them until that day,” said Lopez, 32. Problems at the warehouse first came to light in October, when the California labor department announced it had launched an investigation into alleged labor law violations. Two staffing operations at the facility were cited for not properly maintaining time records for their workers and hit with fines totaling more than $1 million. Six workers filed the class action lawsuit on the heels of the state inspections, alleging they were routinely short-changed on their paychecks and required to work in excessively hot conditions. Warehouses like the Schneider facility commonly use temporary workers who are paid low wages and labor without benefits. As HuffPost detailed in an article last month, allegations of wage theft and other workplace abuses are common at the warehouses in the Inland Empire area of Southern California, one of the largest distribution nexuses in the world. The workers at such facilities — many of whom are Latino immigrants — may be employed directly by small labor agencies, but they often move products for the benefit of mega-retailers like Walmart. Officials with Warehouse Workers United , an advocacy group leading a unionization effort in the Inland Empire, predict that the Rogers-Premier workers will ultimately lose their jobs because they spurred a state investigation and sued their employer. “Either they’re getting fired as retaliation or because the company can’t make any money” while under scrutiny from investigators, argued Sheheryar Kaoosji, an organizer with the group. “Either way, it shows a problem.” Some of the workers held a demonstration with members of Occupy Riverside outside the warehouse on Wednesday morning. The group is calling on Schneider to make sure that the workers find continued employment at the warehouse through another staffing firm. Schneider spokeswoman Elliott says, “If we have openings, we would deal with them in the ordinary fashion, through screening and hiring.” In the lawsuit filed in October, the workers contended that they “spend their workdays performing strenuous, unskilled physical labor in an environment where the temperature often exceeds 90 degrees.” When they questioned their paychecks, their bosses “routinely responded with threats of retaliation and actual retaliation, including by sending the inquiring workers home without pay, refusing to give them work the next day … and imposing other forms of discipline on them,” according to the lawsuit. Lopez said that there were times in 2009 when he worked double shifts several days in a row and never received overtime pay. He added that when he started at the warehouse he was paid at an hourly rate, but he was eventually switched to a “piece rate” under which he was compensated based on the number of trucks he loaded. In the lawsuit, the workers say that they were told their pay would rise under the piece rate plan, but that, in fact, it went down. Lopez said he has been looking for work at other warehouses, although he hasn’t had any luck yet. “Because we know our rights, we spoke up,” Lopez said. “And I’m glad we spoke up. We’re not going to have a job, but I don’t regret it.”

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Warehouse Woes: Workers Say They’re Losing Jobs For Speaking Up

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The Coolest Green Innovations And Advances Of 2011

December 28, 2011

2011 was an important year for green innovations and technological advances. In the world of fuels, a number of strides were made. President Obama announced increased fuel standards for both big and small vehicles in the coming years. Alternative fuels also made headlines. The use of biofuel for aviation is becoming a reality, after the U.S. military announced it would begin using it , and a joint U.S.-Chinese venture tested biofuel in civilian aircraft . Solar technology also grew in 2011. Researchers at Notre Dame have invented a house paint that could one day be used to collect solar energy. Elsewhere in the midwest, scientists at the University of Michigan invented an “optical battery” that might eventually eliminate the need for semi-conductors in solar cells. For more of 2011′s best green technology innovations, vist EarthTechling for their ” 2011 Green Technology Year In Review. ” Check out some of the coolest and most important green advances of 2011, and vote for your favorites! For more on the best of 2011, visit bestof2011.aol.com .

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Mortgage Modification Blunders Bedevil U.S. Housing Recovery

December 19, 2011

WASHINGTON (Aruna Viswanatha) – Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007. She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford. First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America, for not providing documents it never actually asked for. As one part of the bank appealed that decision and approved her for a trial modification, another part denied her again – twice – providing two new reasons in part based on inaccurate calculations, according to documents reviewed by Reuters. When asked about Burnell’s case, a bank spokesman said she was unable to qualify under “imminent default provisions,” a third reason that Burnell said she had never been given. At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01. “They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.” Bank of America is “committed to keeping customers in their homes whenever the homeowner has the financial wherewithal to make reasonable payments and the desire to keep the home,” a spokesman for the bank said. Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works. The administration’s biggest foreclosure-prevention effort, the Home Affordable Modification Program (HAMP), targeted to help 3 million to 4 million homeowners, has reached only about a quarter of that since its 2009 inception. The program pushed mortgage servicers to cut interest, extend terms, or defer parts of a loan in an effort to reduce monthly payments and keep borrowers in their homes. But servicers have dragged their feet on providing wide-scale modifications. They continue to lose documents, use inaccurate numbers to issue denials, or both approve and deny applications at the same time, according to housing advocates. “It delays resolution of the problem of defaulting loans and it is adding uncertainty to the market,” said Susan Wachter, a housing expert at the Wharton School of the University of Pennsylvania. Around one in every 12 mortgages in the country is delinquent, and only a fraction of them have received modifications. “Somehow the borrower is unreachable, or the servicer hasn’t found the right way to reach the borrower, but the fact is, we see (modifications) piercing maybe 10 to 25 percent of the potential population,” said Diane Westerback, a managing director of global surveillance analytics at Standard & Poor’s. Banks have stepped up efforts to deal with the foreclosure crisis since 2009. Chase, for example, set up 82 centers around the country specifically to deal with struggling homeowners. Wells Fargo hosts one-day fairs for homeowners to bring in all of their paperwork and potentially get approved for a modification on the spot. Bank of America says it has completed almost 1 million modifications since 2008, and Wells Fargo says it initiated or completed more than two modifications for every one foreclosure of owner-occupied homes in the past two years. But the majority of homeowners, advocates say, still get stuck in byzantine mazes, with no real enforcement mechanism to pursue under HAMP. “If you get a minor traffic ticket, you get a right to an impartial hearing, but if you are applying for federal home saving assistance, the bank is judge, jury, and executioner,” said Joseph Sant, a lawyer at Staten Island Legal Services who helps defend homeowners facing foreclosure. ‘GOING IN CIRCLES’ It took nearly one year for Hakan Tale to convince his servicer, Chase, that it overvalued his house by more than $100,000 in rejecting a modification. Once he was able to convince Chase of that mistake, it rejected him again, dropping his monthly income by almost $4,000 and determining he didn’t make enough money to qualify, even though his actual income had not changed. In November, more than two years after Tale first sought a modification, Chase asked him to submit an entirely new application. “Maybe they don’t want me to be an example for other people,” said Tale, who lives with his wife and three children in Staten Island, New York. “Any excuse they find, they deny it.” “We have worked with the customer and reviewed his application multiple times, and have been involved in multiple mediation meetings,” a Chase spokesman said. Another Staten Island resident, 77-year-old Hamson McPherson, was first denied a modification two years ago by his servicer, Wells Fargo, after it miscalculated his income. The bank then served him with a foreclosure summons and complaint, which in New York can lead to court-supervised settlement conference. But it stalled on moving forward for so long that McPherson triggered the proceedings himself in August 2011 to try to negotiate an alternative to foreclosure. In October, more than two years after he first applied for a modification, the bank told him there was an investor restriction on the loan, which meant it couldn’t modify it. That investor agreement was public, Wells Fargo told him. But after confronting the bank with that agreement, which did not include any such restriction, the bank told him there was a previously undisclosed secret document that included the restriction. “It’s a nightmare,” McPherson said, “when you have these things, you don’t get proper sleep at all.” In an ironic twist, the hold music played when he called Wells Fargo once was a song called, “Going in Circles.” “I listened to it for five minutes and then hung up because I was so upset,” he said. A Wells Fargo spokesman said the bank has “worked for some time to find payment assistance within the investor guidelines of the loan.” “We continue to work with him to find alternatives to foreclosure,” the spokesman said. ‘NOT DOING THEIR JOB’ Even with staff additions — Chase, for example, added some 10,000 employees to deal with defaults, and Bank of America increased its 5,000 employees to 40,000 — individual negotiators can still have hundreds, or even thousands of cases open, according to housing advocates. Employees can be so overwhelmed that applications languish for months. Banks consider financial documents “stale” within two or three months, forcing homeowners to provide updated documents all over again. While housing counselors have seen some improvements in the past few years, many borrowers are still not even able to email applications in; they have to fax them in, thus creating no real paper trail. Carlos Cespedes, an advocate with the Neighborhood of Affordable Housing in Boston, said his files include 25 faxes of the same document, provided over and over to a servicer that said it never received it or lost it. One of his clients traveled to Central America to obtain her deported husband’s signature on a document renouncing his interest in the property, but had to send that same document six times to her servicer who kept losing it. “These are institutions that have taken a huge amount of bailout money. There should be a level of responsibility to communities,” said Josh Zinner, an advocate with the Neighborhood Economic Development Advocacy Project in New York. “HAMP is far from perfect, but the biggest problem is servicers not doing their job.” (Reporting by Aruna Viswanatha; Editing by Xavier Briand) Copyright 2011 Thomson Reuters. Click for Restrictions .

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U.S. Offers 11 Swiss Banks Deal To Avoid Criminal Prosecution On Tax Evasion

December 18, 2011

ZURICH (Reuters) – U.S. officials are offering 11 Swiss banks, among them Credit Suisse , a deal that allows them to avoid criminal prosecution in exchange for revealing full details of their U.S. offshore business to Washington, a paper reported on Sunday. Famed for the care with which it protects account holders’ anonymity, the Alpine state has been forced to act by a series of U.S. probes into alleged tax evasion by Americans concealing their assets in Swiss banks. In 2009, the Swiss parliament approved a deal to allow UBS to reveal details of around 4,450 U.S. clients and pay a $780 million fine to end lengthy tax proceedings that had threatened the future of the country’s biggest bank. The Swiss government has been in talks with U.S. authorities for months to try to get an investigation into 11 banks dropped, in return for expected hefty fines on the banks and the handing over of the names. Credit Suisse , Julius Baer and Basler Kantonalbank are among the banks under investigation. Citing an unnamed source, the newspaper SonntagsZeitung reported that 11 banks would each be offered a deal like the one to which UBS agreed. In exchange, the banks would have to accept U.S. requests for administrative assistance in tax evasion cases that would mean delivering all information on their U.S. offshore business via Bern to the United States, the paper reported. The paper described a meeting between Swiss officials and representatives on Friday in Berne. The paper also said the banks would likely accept the deal. Yet a spokesman for the State Secretariat for International Financial Matters (SIF), which has represented the Swiss government in negotiations with the United States, said talks between the United States and Switzerland were still ongoing and that the meeting on Friday was part of a regularly scheduled series of talks. SIF Spokesman Mario Tuor declined further comment. FURTHER DETAILS As part of an agreement the names of the U.S. clients would be blacked out and the banks would also be fined, the paper said, adding that the banks had until Tuesday to agree to the terms in writing. According to the paper, the information the banks would have to hand over included: – Correspondence between a bank and its U.S. clients, including notes from telephone conversations and meetings. – Internal notes about U.S. client business from the relevant business units and management – Correspondence between banks and third parties, such as independent wealth managers concerning U.S. clients – All documents about the U.S. business model and about U.S. funds that were transferred to third parties. The paper said the 11 institutions would have to reveal the names of the bankers who conducted the offshore business, though criminal cases against individuals would not be taken up. Credit Suisse, Basler Kantonalbank and HSBC Switzerland would have to deliver material by December 31, the paper said. A spokesman for Credit Suisse declined to comment. The Swiss Bankers Association was not immediately available for comment. Neither was a spokesman for Julius Baer. A spokesman for the State Secretariat for International Financial Matters, which has represented the Swiss government in negotiations with the United States, was also not immediately available. (Reporting by Catherine Bosley; Editing by Jon Loades-Carter) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Enormous Barge To House Immigrant Entrepreneurs On The High Seas

December 16, 2011

SUNNYVALE, Calif. — You’ve heard of tech companies starting in a Silicon Valley garage. What about on a ship? That’s the idea being floated by a California startup that wants to dock a vessel off the coast to house foreign entrepreneurs who have dreams of creating the next Google but can’t get visas to work in the United States. Sunnyvale-based Blueseed Co. says current immigration rules can sink promising ventures and torpedo innovation and job creation. The ship aims to provide a remedy by giving foreign entrepreneurs a place to build their companies only a short boat ride from high tech’s hub. “A lot of people say, `I’d like to go to Silicon Valley’ but there is no way for them to do it,” said Max Marty, Blueseed CEO and co-founder. Marty, the son of Cuban immigrants, thought of the ship after listening to international classmates of his at the University of Miami business school lament about having to leave the U.S. after graduation. Politicians have wrangled with the issue, but efforts to change the system have stalled. Last July, President Barack Obama said during a Twitter town hall he wanted to make sure talented people who studied in the U.S. were able to stay to create jobs. “We don’t want to pay for training them here and then having them benefit other countries,” Obama said. A bill to address so-called brain-drain was reintroduced this year by Sens. Mark Udall, D-Colo., John Kerry, D-Mass., and Richard Lugar, R-Ind. The Startup Visa Act would allow immigrant entrepreneurs and foreign graduates from U.S. universities to appeal for a two-year visa “on condition that they secure financing from a qualified U.S. investor and can demonstrate the ability to create American jobs.” But Blueseed founders don’t expect any real reform from a bitterly divided Congress during an election year. “Our solution is an entrepreneurial solution,” said Dario Mutabdzija, Blueseed’s president. From cruise ships to oil rigs to military aircraft carriers, there are several examples of individuals living and working on ships. This one would accommodate about 1,000 people and be docked 12 miles southwest of San Francisco Bay, in international waters. It would be registered in a country with a reputable legal system, maybe the Bahamas or the Marshall Islands, Marty said. Residents would be subject to the laws of that nation. Residents would be ferried ashore with temporary business or tourist visas, which are easier to get, to meet with investors, collaborators, partners and others. Mutabdzija said the ability to have face-to-face meetings cannot be underestimated when trying to gain trust – and secure funds – from investors. “Yes, we live in an interconnected age with Skype and other video conferencing. But if you want to grow a company, physical interactions are of paramount importance,” Mutabdzija said. “We’re a startup. We ran into this. Some people said if you’re not within a 20 mile radius, we won’t talk to you.” The proximity to high-tech’s center, Silicon Valley, is also important. “The talent, the money, the expertise and a cultural acceptance of risk. Elsewhere if it doesn’t work out, you’re a black sheep and the funds dry up,” Mutabdzija said. The ship would be a remodeled cruise ship or barge that Blueseed leases or owns. It would have all the high-tech amenities expected of a startup incubator and the look of employee-friendly Internet giants Facebook and Google, famous for their modern campuses complete with gourmet cafeterias, exercise facilities and an environmentally-sustainable design. A live-work space would cost about $1,200 a month. Logistical support, including food and other supplies, would come from local businesses along the coast, helping the economies of Half Moon Bay and San Francisco, though it hasn’t been determined exactly which port Blueseed would use. A helicopter also would be available for emergencies. Critics deride the ship as a publicity stunt, and say investors would be better served contributing to ventures that help Americans create businesses. “I would say the whole thing is a perfect metaphor for how in corporate America the practice to grow talent and incubate business locally is drifting away – quite literally,” said Bob Dane, of the Federation for American Immigration Reform, which advocates for limited immigration. But supporters of foreign entrepreneurship say immigrants are responsible for some of the most successful businesses in the world and if the U.S. doesn’t try to attract them, others will. “The ship may sound like a crazy idea but it illustrates how seriously flawed the immigration system here is,” said John Feinblatt, who runs Partnership for a New American Economy, which advocates for immigration reform. The organization published a report in June that said 40 percent of Fortune 500 companies were founded by immigrants or their children. Feinblatt said countries including Chile, Singapore and the United Kingdom have programs to attract immigrant entrepreneurs. “While the U.S. is driving people away, other countries are welcoming them with open arms,” he said. “If you miss out on them, you miss their talent, their ideas and ultimately the jobs that they create and the taxes that they pay.” Christopher S. Bentley, a spokesman with the U.S. Citizenship and Immigration Services, said the agency has not seen the proposal and it’s premature to comment. Maritime experts say such an idea is feasible, but very costly. “A good single point mooring costs in the millions of dollars but it could restrain a ship-shape vessel in quite severe storms and in deep water,” said Bil Stewart, CEO of Houston-based Stewart Technology Associates, an engineering consultancy specializing in offshore and marine structures. “But it would be prudent if the vessel had its own propulsion if you had a Pacific hurricane come along,” Stewart added. Blueseed’s idea has started gaining steam. Silicon Valley investor Peter Thiel, a founder of PayPal, announced he would lead Blueseed’s financing search. Thiel has been a big supporter of “seasteads” – self-ruling cities on the ocean – and both Marty and Mutabdzija worked at the Seasteading Institute. Blueseed wants to raise $10 million to $30 million over the next year and a half. The goal would be to launch in late 2013.

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Federal Marijuana Crackdown Coming To Colorado?

December 15, 2011

Could a large scale medical marijuana crackdown be coming to Colorado like the one seen in California? That’s exactly what a law enforcement official told The Associated Press is being considered for Colorado next year. The official did not want to be identified and did not provide specific details because the the matter is still under review. CBS4 discovered that warning letters — similar to those that were sent out in California — will go out to dispensaries and grow facilities near schools (within 1,000 feet) and would be given 45 days to shut down or move their place of operations or face prosecution by U.S. Attorney in Colorado John Walsh . However, CBS4 also reported that it’s unclear when that process would begin and Walsh has not released a statement on the matter since it was first reported. The reasoning behind the 1,000 foot boundary stems from federal law which uses that measurement as a factor in drug crime sentencing. There are many dispensaries in Colorado that are within 1,000 feet of schools, according to High Times , because they were approved by local laws to do so. However, the federal law would trump the state law if and when a federal crackdown would begin. All of this comes just days after a new poll was released by Public Policy Polling that a large group of Coloradans believe that marijuana should not just be legal medically, but fully legalized. From the Public Policy report: Coloradans are even more strongly in favor of legalizing marijuana, and they overwhelmingly believe it at least should be available for medical purposes. 49% think marijuana use should generally be legal, and 40% illegal. But explicitly for medical use, that rises to a 68-25 spread. Just five years ago, a referendum to legalize simple possession by people over 21 failed by 20 points. On the medical question, Democratic support rises from 64% for general use to 78%; Republicans rise from 30% to 50%, and independents from 54% to 75%. The Colorado Independent reports that the Public Policy Polling data “flies in the face of statements made by a number of legislators over the past year that if voters knew what they were in for, they would never have approved medical marijuana in the first place.” Art Way, Colorado manager for the Drug Policy Alliance, went even further telling the Independent that, “decision-makers and elected officials really just don’t have the pulse of the people they represent. The average person considers the federal position that marijuana has ‘no medical value’ to be a joke.” Rep. Jared Polis (D-Colo.) echoed a similar sentiment when he told HuffPost, “There are more pressing issues facing federal law enforcement so it makes no sense for them to waste time and taxpayer money interfering with state-legal businesses that voters have approved, that are well-regulated, and that generate jobs and economic activity. Colorado has the nation’s strictest regulatory system, which means our dispensaries operate transparently and legitimately. I should hope that the federal government would focus its resources on keeping Americans safe from crime rather than interfering with a legal business that benefits Colorado’s economy.” Despite all this pressure from the feds, the Campaign To Regulate Marijuana Like Alcohol , a collective of marijuana activist groups and individuals including SAFER, Sensible Colorado, NORML and others are still pushing for an initiative to end marijuana prohibition in Colorado for the 2012 state ballot. The Regulate Marijuana Like Alcohol Act of 2012 would make the personal use, possession and limited home-growing of marijuana legal for adults aged 21 and older. It establishes a system in which marijuana is regulated and taxed similarly to alcohol is currently. The act also would allow for the cultivation, procesing, and sale of industrial hemp. Read the entire Regulate Marijuana Like Alchool Act of 2012 here .

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Paul J. Stockinger: How Did We Get Here?

December 14, 2011

The world witnessed uprisings last year in four Arab countries. The protesters were mad as hell, and wanted rid of the despots they blamed for their troubles. They had an agenda, and in two of those countries they managed to accomplish the goal of eliminating the scourge at the top. In America, another protest movement arose. They call themselves “Occupy Wall Street” an aptly named group, who, recognizing that the financial calamity experienced in 2008 was caused by greedy recklessness of those in power on Wall Street, aided and abetted by those in power in Washington. Billions were lost as the house of cards that is mortgage derivatives came tumbling down as a superheated housing market did what bubbles always do. It burst, bringing down the collateral value of mortgage-backed securities. How did this happen? What caused this giant Wall Street calamity? What can be done to put things right, so it doesn’t happen again? The seeds of this destruction began to be sown 26 years earlier, in 1982, when, under the aegis of an actor in the White House, the powers that be began the systematic dismantling of safeguards put in place following the last major economic collapse that was the Great Depression. It began with the relaxing of banking regulations covering the savings and loan industry, making it possible for marginal borrowers to “live the American dream.” Repeal of Glass-Steagall I remember in 1998 when talk of Glass-Steagall repeal was circulating Wall Street, my associates and I were very skeptical. “Wasn’t that law passed for a reason?” we asked. In the Great Depression of 1929-1932, Congress examined the mixing of the “commercial” and “investment” banking industries. Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. The Glass-Steagall Act, then set up a formidable barrier to the mixing of these activities. In 1999, Wall Street convinced Congress and President Clinton to repeal this act so that the banking and insurance/brokerage giants could combine, merging the Citibank branch network with the Salomon Smith Barney brokerage and Travelers insurance. That was only the first of many, many similar combinations. With the banks once again in the securities business, the stage was set for a repeat of 1929. Mortgage-Backed Derivatives In the U.S. the most common securitization trusts (mortgage pools) are Fannie Mae and Freddie Mac, U.S. and Ginnie Mae, a U.S. government-sponsored enterprise. Private institutions, like Investment Banks, Real Estate Mortgage Conduits (REMIC) and Real Estate Investment Trusts (REIT), also securitize mortgages, known as “private-label” mortgage securities. Issuance of private-label mortgage-backed securities increased dramatically from 2001 to 2007, and is where most of the problem lies. Effect of Mortgage Backed Derivatives on the Mortgage Industry The increased use of mortgage-backed securities created a fundamental shift or new paradigm in the mortgage lending industry. Whereas traditional lending practices required prudence in lending only to credit-worthy borrowers, now the concern regarding repayment was removed, as the original lender as “off the hook” once his loan was packaged in a mortgage pool. Repayment became the pool buyer’s problem. The mortgage industry then grew like topsy, making loans to virtually all comers. “Interest only” mortgages mushroomed. Historically marginally or unqualified borrower’s loan could now become part of a “subprime” mortgage pool. Everyone concerned seem to ignore the fact that one day, the borrower was going to have to “pay the piper.” Making loans to unworthy or marginal borrowers had an effect on the real estate market, as the number of buyers grew dramatically, so did real estate values, far beyond where they would have gone otherwise. This set the stage for two things: When prices reversed course, the decline would be far more severe than otherwise, and the number of foreclosures would be at record levels. I predicted this in 2004 (October). Credit Default Swaps When I was in the banking industry in the early-to-late sixties, there was not such a thing as “Credit Default Swaps”(CDS). A credit default swap, similar to a traditional insurance policy, obliges the seller of the CDS to compensate the buyer in the event of default. In the event of default the buyer of the CDS receives money, and the seller of the CDS receives the defaulted loan. However, there is a significant difference between a traditional insurance policy and a CDS. Anyone can purchase a CDS, even buyers who do not hold the loan instrument and may have no direct interest in the loan. The buyer of the CDS makes payments to the seller and, in exchange, receives a payoff if the loan defaults. These are called “naked” CDS, and in fact are a “bet” on default. The European Parliament has approved a ban on this kind of CDS, starting December 1, 2011. Credit default swaps have existed since the early 1990s, and increased in use after 2003. Between the end of 2007 and mid-year 2010 the outstanding CDS amount fell from $62.2 to $26.3 trillion . Insurer AIG required more than one bailout because they were the prime CDS issuer, and unwisely invested heavily in the same instruments they were insuring, in effect compounding their losses. The U.S. government now owns a large stake in AIG. The Fundamental Error I am constantly amazed at man’s failure to learn the lessons of history. Contributing to the Great Depression was rampant speculation, which caused a severe imbalance as security values soared to unsustainable highs. A bubble, if you will. The dramatic gains set the stage for the decline that followed. Because the commercial banks and the investment banks were so closely linked, the failure of one lead to the failure of the other. So, why undo the safeguards designed to prevent a reoccurrence? In retrospect, that was asking for trouble. What about real estate values? History tells us that, as with anything valued in currency, the price has and will continue to fluctuate. If you study price fluctuations in real estate, you will see that real estate values have had a ten-year cycle, with some variations. For example, the 1986 peak was followed by the 1996 low, as prices in more volatile markets like California were halved. It seems that, in their greed-fueled frenzy for bonuses, mortgage lenders became myopic and forgetful.

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Target Worker Denied Students Of Shopping For Charity

December 14, 2011

MAYFIELD HEIGHTS, Ohio — A northeast Ohio middle school teacher says an employee at a local Target store told her she couldn’t shop with about 25 students buying items for charity. Sandy Bean tells The Plain Dealer newspaper she and other Mayfield teachers have for about five years taken students to the Mayfield Heights Target to buy items for a Cleveland-area crisis nursery. She says they spend about $2,000. She says she called Monday to tell a manager they’d be coming Friday and was told there weren’t enough cashiers. The Minneapolis-based Target Inc. apologized Tuesday, saying the store leader contacted the teacher and the students will be shopping there Friday. A phone listing for a Sandra Bean in Cleveland rang unanswered Tuesday evening. A message seeking comment was sent to her likely Facebook account.

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‘Supply Is Down, So Prices Are Up’

December 12, 2011

This article comes to us courtesy of California Watch . By Michael Montgomery A crackdown by federal prosecutors is casting a long shadow over the state’s marijuana industry, but there is one bright spot, at least for some Northern California growers willing to risk prison time: Wholesale prices appear to be on the rise. After slumping precipitously, prices for a pound of high-grade, outdoor-grown marijuana are stabilizing and in some areas are up between 20 and 40 percent, according to interviews with growers, law enforcement agents and analysts. “It’s been a downward thrust since 1996, but this year, prices have been up,” said Kym Kemp, a Humboldt-based blogger who closely follows Northern California’s marijuana scene. “People are saying, ‘Maybe this isn’t our last season,’ ” she said. “I don’t think people are ready to be optimistic, but they’re less depressed.” In recent years, California’s booming medical marijuana industry attracted a rush of new players who harvested increasingly large amounts of pot – for storefront dispensaries and the black market. Some longtime operators responded by also “growing big.” Surging production pushed down prices for some strains to less than $1,000 per pound. This led more growers to illegally ship their marijuana out of state, where they can double or triple their profits. But this year, production levels have dropped, in part because of rainy weather and a “bumper crop of mold,” said medical marijuana grower and activist Charley Custer. “It was a perfect storm,” he said. It wasn’t just the weather. Stepped-up enforcement actions by local and federal law enforcement led some growers to lay low and reduce their plant counts to double digits. “Some growers decided to keep it small this year,” said Dale Gieringer, state director for the National Organization for the Reform of Marijuana Laws. With marijuana supplies under pressure, prices responded as they would with any other commodity. Since the fall harvest, Northern California growers have seen prices jump to between $2,000 and $2,500 per pound for “good-quality” marijuana, according to Kemp. Law enforcement agencies say it’s too early to get a clear read on this year’s harvest. “Marijuana remains readily available in California, and we have not noticed a substantial change in prices,” said Casey McEnry of the Drug Enforcement Administration’s San Francisco office. But data collected by local law enforcement and a federally funded drug task force indicate street prices have nearly doubled in some parts of the state. “Supply is down, so prices are up,” said Tommy LaNier, director of the White House-funded National Marijuana Initiative. LaNier credited the shift in prices to new law enforcement tactics, including the use of more informants, undercover agents and wiretaps and an aggressive effort to intercept marijuana being shipped in vehicles and through commercial carriers like FedEx and UPS. He also said recent actions by the state’s four U.S. attorneys have shaken the marijuana industry. “The market is significantly disrupted,” he said. LaNier said creating market disruptions has been a top priority for law enforcement because it could make marijuana less affordable for minors. But law enforcement agencies are not the only groups welcoming the changes. Black market growers say rising prices mean a return to higher profits. “This is a relief, since my margins were getting very thin,” said one Bay Area grower, who asked that his name be withheld because he is operating outside of state medical marijuana laws. Because of the profit margins, he said he had given up trying to sell his product in California. Instead, he’s been delivering it to the East Coast concealed in private vehicles. The grower said he might return to the California market if prices continue to rise. “I’d rather not take the extra risk of shipping out of state,” he said. But Tim Blake, a Mendocino-based medical marijuana grower, activist and impresario, said it is an outrage that illegal growers stand to benefit from the federal crackdown while medical marijuana operators are the targets of raids and forfeitures. “Prices are going up, but the people who will cash in are the men hiding in the mountains,” he said. “If this continues, the people who are trying to follow medical marijuana laws won’t get anything because they’ll be out of business, thanks to the feds.” Michael Montgomery is an investigative reporter for California Watch, a project of the non-profit Center for Investigative Reporting. Find more California Watch stories here .

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PHOTOS: Oakland Longshoremen Sent Home During ‘Occupy The Ports’ Protest

December 12, 2011

By TERRY COLLINS, Associated Press OAKLAND, Calif. (AP) — Most longshoremen at the Port of Oakland were sent home Monday after Wall Street demonstrators blocked entrances as part of a coordinated West Coast port blockade effort. Shipping companies agreed with workers’ concerns that the protests were creating unsafe working conditions and released about 150 out of about 200 workers on the morning shift, said Craig Merrilees, spokesman for the International Longshore and Warehouse Union. Workers in unaffected parts of the port remained on the job. Several hundred people began picketing at the Port of Oakland before dawn and blocked at least two entrances. A long line of big rigs sat outside the gates, unable to drive into the port. Police in riot gear monitored the scene as protesters marched in an oval and carried signs with messages such as “Labor and Occupy Unite,” an invitation to the powerful dockworkers union join their push against corporate greed. No major clashes with police or arrests were reported. Longshoremen arriving for the morning shift at the two affected port terminals did not try to enter due to what union officials said were safety concerns. Some longshoremen said they weren’t willing to cross the demonstrators’ picket lines. Protesters cheered and declared victory when they learned about the partial shutdown, then dispersed. Another march on the port is planned later in the day. Port spokesman Isaac Kos-Read said the facility remains open. “There’s been disruptions throughout the morning shift. We’ve done our best to minimize those disruptions,” Kos-Read said. “We’ve kept the port largely operational.” It’s unclear whether the longshoremen will be paid for the missed work. Union officials say longshoremen were not paid after Occupy Oakland protesters blockaded the port Nov. 2. DeAndre Whitten, 48, an Oakland longshoreman for 12 years, said it was his understanding he would be losing about $500 in pay for the day. But he said he supported the protest effort. “I’m excited. It was way overdue. I hope they keep it up,” Whitten said. “I have no problem with it. But my wife wasn’t happy about it.” Leaders of the ILWU, which represents thousands of longshoremen, spoke out in recent weeks against the coordinated effort by Occupy protesters to blockade ports from Anchorage to San Diego. In Southern California, as many as 400 demonstrators gathered in a park then marched in heavy rain to the Port of Long Beach. Before most dispersed about 9 a.m., they targeted a dock facility leased by SSA Marine, a shipping company partially owned by giant investment firm Goldman Sachs. Beating drums and waving flags, dozens of protesters, gathered outside a fenced area at the port, part of a sprawling complex that spans parts of Los Angeles and Long Beach. Police repeatedly warned that they faced arrest if they crossed the fenced area. Officers later started pushing the protesters further back. They spilled into the street, blocking access to the pier and holding up truck traffic. At least one person was taken into custody. Protesters mostly remained in a parking lot so there were no major disruptions to operations, port spokesman John Pope said. In Ventura County, about 150 protesters picketed outside the entrance to the Port of Hueneme. No arrests were reported. In Oakland, the protests halted truck traffic at least two gates. Truck drivers, union and port officials and Oakland politicians have said the protests will hurt the incomes of people who have little connection to Wall Street. “This is joke. What are they protesting?” Christian Vega, 32, who sat in his truck carrying a load of recycled paper from Pittsburg said Monday morning. He said the delay was costing him $600. “It only hurts me and the other drivers. We have jobs and families to support and feed. Most of them don’t,” Vega said. Oakland Mayor Jean Quan also urged protesters to consider the impact on port workers. “Thousands of people work at the Port of Oakland every day. Thousands more in agriculture and other industries also depend on the Port of Oakland for their daily wages,” Quan said. Oakland protester Alex Schmaus, 26, said he believed the attempted shutdown was for the greater good of workers. “We’re trying to make things better for them,” Schmaus said. In San Diego, a few dozen protesters converged on the port as part of the blockade effort. Police spokesman Gary Hassen says four people were arrested, most for failure to disperse or refusal to comply with police orders but one for an unspecified traffic violation. He says there’s been no violence. ___ Associated Press writers Robert Jablon and Christina Hoag in Los Angeles and Marcus Wohlsen in San Francisco contributed to this story.

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‘If Taxes Don’t Pass, There Will Be A Hole That Will Trigger Further Cuts’

December 9, 2011

By JUDY LIN, Associated Press SACRAMENTO, Calif. (AP) — Gov. Jerry Brown on Thursday warned of additional automatic cuts if voters reject his tax initiative next fall, offering Californians a stark choice between higher taxes and deeper cuts to schools, universities and public safety. Brown’s spokesman, Gil Duran, posted on Twitter a quote from the governor that said, “If taxes don’t pass, there will be a hole that will trigger further cuts.” The Democratic governor and state lawmakers face a $13 billion projected shortfall over the next 18 months. Analysts have already predicted the state will have to make one round of required midyear reductions to schools, universities and social services. That decision is expected next week under pre-approved cuts authorized in the current budget. Brown wants to increase taxes on high-income earners and raise the state sales tax by half a cent, to 7.75 percent. The proposal would raise about $7 billion a year for five years. Brown filed the measure earlier this week with the state attorney general’s office. It would appear on the November 2012 ballot if supporters collect 807,615 valid voter signatures. If voters approve Brown’s plan, individuals earning from $250,000 to $300,000 would pay an additional 1 percent income tax, bringing their tax rate to 10.3 percent. Individuals earning more than $300,000 but not more than $500,000 would be taxed an additional 1.5 percent, bringing their tax rate to 10.8 percent. Individuals earning more than $500,000 would be taxed at 11.3 percent. The income amounts double in each category for joint filers. The income tax hike would be retroactive to January 2012 and last five years. The sales tax increase would start Jan. 1, 2013, and last four years. Brown indicated Thursday that he would include more automatic cuts in his new budget if voters don’t approve his tax measure. Democratic leaders applauded the plan, saying the tax initiative will offer voters a clear and realistic choice about the amount they are willing to pay and the services they demand. “It’s the only intellectually honest way to do it,” Assembly Speaker John Perez, D-Los Angeles, said in an interview Thursday. It’s not clear what those additional cuts might include. Brown is not expected to release his new budget until January. Last summer, Democratic lawmakers and Brown had hoped for a $4 billion increase in tax revenue through the current fiscal year when they passed the state budget. If the revenue doesn’t materialize, a pre-approved list of cuts will go into effect, starting Jan. 1. The state would give local school districts the option of slicing another seven days off the current 175-day school year, leading to concerns about the quality of education provided in the nation’s largest school system. Among other midyear cuts: Low-income seniors and the disabled would receive less in-home care, local libraries would not receive state aid, and health providers would be paid less under Medi-Cal, the state’s health care program for the poor. Already, a report from the nonpartisan legislative analyst predicts revenue — a majority which comes from income, sales and corporate taxes — will run $3.7 billion less than what the state assumed. The analyst’s report was one of two revenue projections called for in the state budget. The next will be released by Dec. 15 by the governor’s Department of Finance. The automatic spending cuts — referred to as trigger cuts in the Capitol — will be based on whichever report contains the higher revenue projections. While tax collections for the month of November came in 9 percent above projections, the state controller’s office said Thursday that tax collections remain $1 billion less than anticipated revenues for the year. The state is also spending $2 billion more than it anticipated for the year. “Regardless of whether midyear cuts are enacted next week, the Legislature faces a tremendous fiscal challenge when it returns to session next month,” Controller John Chiang said in a statement. Also Thursday, Brown directed California state government to change its budgeting process to spot savings and efficiencies. The governor issued an executive order saying he wants his finance department to use performance measures, strategic planning, cost-benefit analysis and a method called zero-based budgeting. That approach requires annual evaluations of all spending requests. He asked his finance director, Ana Matosantos, to work with agency secretaries and department directors and report back in 90 days with a plan to use in the new budget. Brown’s order said there should be transparency about program goals, outcomes and funding. Matosantos said in a statement that the state has saved $120 million in the Department of Mental Health by using zero-based budgeting and is expected to save $183 million next year. Brown said the goal was to “common sense program-evaluation methods into the budgeting process, in order to fund programs based on their necessity and effectiveness.” He said the current budgeting method focuses on incremental changes, “rather than a deeper review of a department or program.” ___ Associated Press writer Don Thompson contributed to this report.

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Susan Linn: Wondering What Kids Are Nagging for and Why? A New Study Shows the Toys Most Advertised to Children

December 9, 2011

For those of us distressed by the commercialization of the holidays and of childhood in general, here’s a chance to put our money where our values are. This year we can choose to avoid the toys companies are marketing most heavily to children. Today, The Campaign for a Commercial-Free CCFC released the Nagging Nine , the toys and games most advertised on children’s cable television networks during “Black Friday” week. Lego Building Sets, which lead the list, were advertised 415 times during these seven days. During the week of November 21-27, CCFC reviewed every commercial between the hours of 6 a.m. and 8 p.m. on the children’s cable networks Nickelodeon, NickToons, Disney XD, The Hub, and Cartoon Network. Of the more than 11,500 commercials that aired on the networks, just over 9,000 were for toys and games. Lego Building Sets — which were advertised in seven different versions, including highly commercialized kits linked to media properties like Cars 2 and Harry Potter — were advertised 25 percent more than the second-most heavily advertised toy, Cepia’s DaGeDar (331 ads). If we want companies to stop advertising to kids, we have to stop rewarding the ones that do. Commercialism is toxic for children, and it always gets worse around this time of year. Marketers have transformed the holiday season into a materialistic feeding frenzy, teaching kids that it’s all about demanding — and getting — ‘must-have’ toys. Thoughtful consumers already include issues like environmental impact, labor practices and where a product is made in their buying decisions. But most of us don’t think about how, where, and to whom, the toys are marketed. But no we can. The complete list of the “Nagging Nine” is included below. There’s even a downloadble wallet-size version.

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California Arrests Two For Scamming Distressed Homeowners

December 7, 2011

Two owners of a Southern California-based loan modification company were arrested Tuesday on charges that they scammed thousands of distressed homeowners across the country out of more than $6 million, according to a press release from California Attorney General Kamala Harris’ office. Christopher Fox and Curtis Melone, both 37, are accused of illegally charging struggling homeowners $3,500 each in exchange for assistance in securing loan modifications that the attorney general says were never performed. Fox and Melone’s company, Green Credit Solutions — later renamed Guardian Credit Services and Get My Credit Grade — allegedly collected fees from customers before performing services, despite California law prohibiting foreclosure assistance firms from taking money until the related services have been performed. In addition, the company allegedly stated that loan modification services would be performed by lawyers, when its only staff attorney was a disbarred Tennessee lawyer who claimed to have partners at “Smith Harris PLLC,” an already defunct law firm. The arrests come as part of Attorney General Harris’ ongoing efforts to repair the damage done to her state by the housing crisis. Earlier this week, Harris announced that she would be partnering with Nevada Attorney General Catherine Cortez Masto to share resources in pursuit of a variety of mortgage-related frauds, including those committed by some of the nation’s largest banks. In August, California’s mortgage fraud strike force sued a law firm that allegedly stole millions from desperate homeowners. California remains a central figure in the nation’s ongoing foreclosure crisis. The state saw the second-highest percentage of housing units enter the foreclosure process in October, behind only Nevada, according to the California Attorney General. Last year the state led the nation with a total of 546,669 foreclosure filings, or 4 percent of the state’s total housing units. “Homeowners continue to struggle throughout California and across the country to hang onto their homes, and this prosecution is another warning to predators who would seek to profit from their distress: this kind of criminal conduct will meet with swift and certain consequences,” said Harris in a statement. Some former customers of Green Credit Solutions have taken to the Internet to record their complaints. “I paid $6,300 to Green Credit Solutions and they accomplished nothing in four months and now they only want to give me $2,000 out of all that money I gave them,” reads one comment at LoanWorkout.org . Paying fees in advance puts customers in danger and makes the receipt of a refund less likely, explained James Dolan, assistant director for financial practices at the Federal Trade Commission. “Generally, we found that consumers seeking loan modifications are significantly injured if they have to pay a fee in advance of receiving promised services, especially if those promises are false,” Dolan said. In 2009, California became the first state in the nation to outlaw the collection of advance fees for services related to loan modifications. A year later, the Federal Trade Commission issued its Mortgage Assistance Relief Services Rule, which includes a ban on advance fees that applies to all states. “The legislation helped curb a number of violations because there’s no gray area anymore,” said Tom Pool, a spokesman for the California Department of Real Estate, one of the first agencies to investigate Green Credit Solutions. “It just prohibited it, period, regardless of if you’re an attorney or counselor or broker or anything else. That really helped, though we’re still seeing violations.” In addition to arresting the two men, Attorney General Harris is seeking extradition of King Harris III, 42, of St. Louis, a senior executive at Green Credit Solutions.

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George Goehl: President Obama Holds The Keys On Preventing Foreclosures

December 7, 2011

On Sunday, November 27th the New York Times ran an editorial, ” Romney on Foreclosures ,” critiquing Mitt Romney’s strategy to address the foreclosure crisis. The piece is right on target. Romney’s plan, which is to essentially do nothing and let struggling homeowners across the board lose their homes, would further sink a housing market that has already reached historic lows. What the editorial does not address is that President Obama’s plan, while not as mean-spirited as Romney’s, continues to lack the boldness and scale needed to alleviate the crisis. President Obama, unlike candidate Romney, has the power to help stem the tide of foreclosures and heal our housing market right now. The starting point should be the potential foreclosure settlement with big banks. At question is whether the president accepts as sufficient the small settlement currently on the table, reportedly in the $15-20 billion range, or teams with Attorneys General Eric Schneiderman, Beau Biden, and Martha Coakley to push for something more commensurate with the abuses committed by the banks and the scope of the crisis. As the Times editorial notes, mortgages in America are $700 billion underwater. A settlement as small the one being considered would be a small drop in a very big bucket, signaling another victory for big banks, the 1%, and corporate money in our political system. It makes good economic sense for President Obama to push for a larger foreclosure settlement. A settlement that halts more foreclosures will stabilize our housing market, lift homes values, and inject new money into our economy. This would help Americans across the board, regardless of whether our mortgages are underwater or we are a homeowner or renter. The housing market makes up 15% of our Gross Domestic Product. It’s hard to have a robust recovery when one-sixth of our economy is in its worst shape in generations. As the Commerce Department reported last week, median home sale prices have now fallen to their lowest level of the year. Since the housing bubble burst, over $7 trillion in home equity has been wiped out. Without courageous action by President Obama, more home equity will be lost, further weighing down our sluggish economy. To prevent foreclosures at a significant scale, principal reduction — the writing down of mortgages to their actual value — is a must. Principal reduction should be mandatory, not voluntary, for the big banks, and we should be discussing hundreds of billions in reduced principal, not tens of billions. Reforms focused solely on refinancing or forbearance and have been optional for banks have failed to make significant impact. By requiring the banks to adjust principal on a loan to actual value, we not only prevent foreclosures, but also inject the difference between the amount owed and actual value into the economy. It’s another form of stimulus, but one that does not require taxpayer dollars. Reducing principal on mortgages is not a liberal or conservative idea. Economists from across the political spectrum have increasingly come out in favor of principal reduction as a key strategy for rebooting our housing market. For example, Martin S. Feldstein, professor of economics at Harvard, and chairman of the Council of Economic Advisers under President Ronald Reagan, wrote in the NY Times that “failure to act means that further declines in home prices will continue, preventing the rise in consumer spending needed for recovery. As costly as it will be to permanently write down mortgages, it will be even costlier to do nothing and run the risk of another recession.” Taking a more aggressive approach to addressing the foreclosure crisis doesn’t only make good economic sense. It’s good politics too. Any candidate running for president must consider the fact that swing states such as Nevada, Florida, Michigan, and Ohio are among the hardest hit by the housing crisis. In Nevada, 62% of borrowers are underwater. In Florida, 46% of borrowers are underwater. Since homeowners have a particularly high voting rate, every candidate should be looking to prove he or she has the guts to go toe to toe with the big banks, demand retribution for American families, and get our housing market back on track. If there was ever a battle that signified the struggle between the 1 percent and the 99 percent, this is it. By pushing for a settlement that reduces hundreds of billions of dollars in principal the president could buoy the same economy that has been a drag on his presidency. If he doesn’t, he could end up underwater with the rest of us. George Goehl is the Executive Director of National People’s Campaign, which seeks to protect and strengthen low- and moderate-income communities across the United States.

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BYE BYE, OCCUPY: SF Encampment Cleared In Overnight Raid

December 7, 2011

SAN FRANCISCO — More than 100 police officers gave protesters at the Occupy encampment in San Francisco five minutes to gather belongings before authorities took down about 100 tents and arrested 70 people as the camp was dismantled in an overnight raid. A few officers remained at daybreak Wednesday as trash crews raked up paper and plastic bottles, removed chairs and other belongings that accumulated at the camp over the past two months and pressure-washed the sidewalks. (CLICK HERE FOR LIVE UPDATES) Dozens of police cars, fire engines and ambulances surrounded the campsite at Justin Herman Plaza and blocked off the area during the raid, which began shortly after 1 a.m. Police did not immediately release how many people were in the plaza at the time, but campers put the estimate at 150. “Most of the protesters went peacefully,” but one officer received minor injuries when two people threw a chair that cracked his face shield, said officer Albie Esparza. They were arrested on suspicion of felony assault. Dozens of others were arrested for illegal lodging in the plaza and failure to disperse. In all, 70 people were taken into custody. Richard Kriedler with Occupy S.F. said some protesters were also injured, but he didn’t have the details. “This is a very emotional town. We have anarchists, we have very emotional people that this is not going to go over well with, and this could have been handled a lot better,” he said. “A much more simple way to do it would have been direct contact with the mayor and city officials here with us, and even though they’ve been invited many times, they didn’t come.” Jack Martin, of San Francisco, said he was trying to leave the plaza when he was zip-tied, taken to a police station, cited and released. Officers trashed his tent and personal belongings, he said. “I lost everything I owned,” Martin, 51, said as tears welled up in his eyes. “Everything I owned is gone. My medicine, my paper for my Social Security.” He yelled at officers: “I was trying to get out of your way!” Asked what he planned to do next, Martin replied, “Occupy, occupy, occupy, occupy.” Kris Sullivan, 31, from Akron, Ohio, said many campers were sleeping and were taken by surprise. Sullivan, who said he had been at the camp for about two months, got his tent out but lost his pillow, mattress, blanket and another tent. “They didn’t even give much time for anyone to get out. They handled it really badly. They could have given us a warning or some sort of eviction notice,” he said. The tent city was set up in mid-October to protest bank bailouts and economic injustice. Gene Doherty, 47, an Occupy protester who was not present during the raid but watched it on a live streaming website, said the Occupy protesters planned a noon rally at the site and still had several “mobile occupations” throughout the city. “We will come back and reoccupy,” Doherty said. “A large segment of our community has no other options. They don’t have a home to go back to; this was their home.” Protesters will continue to “send a message that this is our right to protest, our right to assemble, and to talk about the economic injustices in the world,” he said. Anthony Kramer, 21, of St. Louis, said he had been in camp about five days. He vowed to return. “We’re not going to give up that easily,” Kramer said as he stood on the sidewalk with his orange sleeping bag under his arm. ___ Associated Press radio reporter Ed Donahue in Washington contributed to this report.

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Occupy Oakland Murderer Arrested In Kentucky

December 3, 2011

OAKLAND, Calif. — A fugitive has been charged with murder after a protester was killed last month near the former Occupy Oakland encampment outside City Hall, authorities said Friday. Norris Terrell, 20, is awaiting extradition to California after being arrested Sunday in Lexington, Ky., for the Nov. 10 slaying of Kayode Ola Foster, 25, who had been staying at the anti-Wall Street site in Oakland for at least two weeks, police said. Terrell left Oakland on a bus the day after the shooting and fled to Kentucky, where authorities found him at a friend’s house, interim police Chief Howard Jordan said. Police said Foster was shot in a fight, possible over alcohol, on the City Hall plaza. At least six gunshots were fired, creating chaos among occupiers and eyewitnesses and sparking community outrage that led police to shut down the camp four days later. Police arrested three other men in connection with the attack. Joseph Anthony Gholston, 32, Excell McKinley, 20, and Carleon Roberson, 18, all of Oakland, were charged Thursday with assault with a deadly weapon for beating Foster before the shooting, police said. Jordan said cooperation from the public and surveillance video led to the arrests. “We’ve been following a bunch of leads since that day, and we received a lot of calls from citizens who provided us with key information,” Jordan said. Terrell also was charged with shooting into an occupied dwelling when a bullet meant for Foster went through a window and grazed a worker inside, police said. It was unclear whether Terrell has a lawyer. Attorneys for Gholston, McKinley and Roberson could not be reached for comment. The three men charged with assault are due in court on Dec. 7. An investigation was ongoing.

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A Major Victory For Fresno Farmers

December 1, 2011

FRESNO, Calif. (AP) — A central California almond and grape grower has been ordered to pay nearly $1 million in a settlement with farmworkers for unfair labor practices, lawyers for the farmworkers said Tuesday. The settlement requires H&R Gunland Ranches Inc., of Caruthers, Calif., to pay $915,000 to 82 migratory farmworkers and their attorneys. It is the result of a lawsuit filed in 2009 by California Rural Legal Assistance, which represents the workers. CRLA attorney Felicia Espinosa said that after legal fees, some $490,000 would be divided among 82 workers depending on when and how often they worked. “It’s a pretty good amount of money,” she said. “We hope this encourages other workers to come forward.” Espinosa said the workers would be paid by Christmas. The lawsuit accused the grower of violating state and federal law, including failing to pay minimum wage and overtime, violations of state rest and meal requirements, and not providing the necessary tools for pruning and tying grapevines. A telephone call to H&R Gunlund Ranches seeking comment rang unanswered Tuesday night. CRLA said the workers filed suit after they were fired for complaining that their per-piece pay had dropped dramatically. Some were being paid less than $3 per hour.

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The Best And Worst Run States In America

November 28, 2011

For the second year, 24/7 Wall St. has reviewed data on financial health, standard of living and government services by state to determine how well each state is managed. Based on this data, 24/7 Wall St. ranked the 50 states from the best to worst run.

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WATCH: Chilling Video Of Students Confronting UC Davis Chancellor

November 20, 2011

A crowd of UC Davis students confronted chancellor Linda Katehi in the wake of an incident that occurred between protesters and campus police on Friday. According to reports , police unleashed pepper spray on a group of students protesers who were part of the Occupy Wall Street movement. Video footage of the protest shows that students were sitting quietly when police began to show off a can of pepper spray before dousing the students. Katehi held a press conference on Saturday to address the incident. Students began to surround the building in protest and she reportedly refused to leave amid safety concerns. Finally, the students cleared a path for her to exit. As she walked back to her car, surrounded by students, some began to ask her questions, which she mostly brushed off “Chancellor, do you still feel threatened by the students?” someone asked. She replied, “no” and a companion said that “we’ve asked for it to be a silent, respectful exit.” Katehi will address the students directly on Monday. The officers’ behavior has sparked outrage among the Occupy Wall Street and UC Davis communities. Two involved officers have reportedly been put on administrative leave and students have even called for the chancellor’s resignation . WATCH:

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Brett King: What the Occupy Movement and Mobile Means for Banking

November 18, 2011

The Occupy Movement has emphasized our changing ‘trust’ in the big banks. Mobile is changing the way we interact day-to-day. But how are these two elements going to intersect in a far more dramatic change in the way we choose and work with a bank in the future? What was our instinct in banking? The earliest instincts around banking were that it was a safe place to store your assets and, in many ways, that is still the case. However, banking in its infancy didn’t necessarily involve a bank or money at all. The earliest forms of banking involved the deposit of commodities or valuables that were traded, and often they were deposited in temples or palaces, the safest physical locations. It wasn’t until the 16th and 17th centuries that organized banking started to emerge globally, particularly as the wealthy tried to keep their assets safe during the dark ages. Even then, banking was still exclusive. It really wasn’t until the 20th century that banking became more mainstream and people started considering storing their savings in a bank. Since then, banking has been an instinctive part of the lives of most people in the developed world. It wasn’t long before it became instinctive to pull out our checkbook to pay for a large ticket item. Some would also use lay-away or lay-buy plans, but these largely disappeared over the last decade or so. Over time those instincts changed to use credit cards and, more recently, debit cards at the point of sale. In the past our instinct when we needed cash was to think about where the nearest branch was and figure out when we would need to go to withdraw cash. Over time, that instinct changed to using an ATM machine and we went from planning when we’d withdraw cash to just picking the nearest ATM when the cash in our wallet was getting low. In the past, our instinct when paying a bill was to write a check and send it in the mail, or to go down to a post office or office of the utility company and pay the bill in person. Today, that instinct has changed to where we pay online in an instant. It’s ironic that we think of banking as a slow and steady institution that doesn’t really change, but in reality the utility of our money means that our behavior in respect to banking has always been changing. The future instincts of banking So what will your instincts for banking be in the next decade? Not a place you go, something you do… Firstly, we won’t instinctively think of banking as a place you go. The concept that a branch is at the center of our banking relationship has been central to retail banking for over 800 years. This is the primary instinctual shift that will occur in the next few years. Instead of looking for a place to store your money, we’ll look for a trusted brand that is safe to store our money but, equally important, will be a brand that offers strong utility and a seamless connection to the things we do with our money. A safe and trusted banking partner will be a bank that offers me access to my money and access to financial services when and where I need them. A bank that demands or prefers a physical interaction will increasingly be avoided instinctively as too hard to work with, as irrelevant to my daily life and as slow and unwieldy. On rare occasions for the minority of us that have complex asset allocations, trust structures and so forth, we’ll look for a physical place to go where we aspire to get the high-touch service of a personal banker who recognizes our status as a special class of banking customer — but this will not be an overriding instinct day-to-day, it will be incidental to our general banking experience. The majority of the time, even for the high net-worth client, instinct will simply dictate a much more efficient engagement of the ‘bank’. Move and Pay, Safely and Efficiently When it comes to day-to-day interactions, the emphasis on the movement of our money will be speed and security. Inevitably in the short-term our instinct will be to pull out our phone at the point-of-sale to pay for goods and services. We’ll do this not only because it is much faster than using cash or a card, but because our money management will be articulated through this personal device — we’ll see our balance, what our monthly expenditure is, what upcoming expenses we have and will be able to understand the context of this payment on our financial life in an instant. The same would have taken much more effort with cash, our checkbook or our card. Your instinct for payments is changing again Security of our cash will be also a primary reason for the shift to digital money. Increasingly we’ll look to the technology of encryption, geo-location tagging, biometrics and active identity management to secure the flow of our funds. We won’t trust a piece of plastic or a piece of paper that can be easily corrupted or stolen, and the technology of ‘hacking’ our cash from a secure device will require a level of expertise and high-performance computing that make it far less frequent than the compromise of traditional physical ‘payment’ artifacts. At the point that it is simply no longer safe to do things with cash and plastic, our instincts will quickly change to keep our finances safe once again. Being able to see what has been happening with our money over time will also drive us to increasing digital management of our money. Core instincts are at the heart of the change in bank modality First and foremost our instinct for banking is keeping our money safe, secondly is the need for the utility of our money. Neither of these core instincts will lend us to continue to support the physical elements of banking and payments that we’ve been used to in the last 100 years. We will measure ‘safety’ in the trust of a brand, not in the bricks and mortar of branches. We will measure ‘utility’ in the seamless access to our cash, and the availability of the bank in our life when and where we need it. Our instincts are rapidly changing. We don’t store grain and gold in temples or palaces anymore. Already most of the world doesn’t use checks anymore. If you’re heavily invested in branches and the physical, you don’t understand the core instinct that banking is.

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FIRST LISTEN: San Francisco’s Most Famous Rockers Pen Occupy Wall Street Anthem

November 17, 2011

Never one to step back from the ledge separating music and politics, Third Eye Blind frontman Stephan Jenkins has penned an ode to the Occupy Wall Street movement. Entitled “If There Ever Was A Time,” the San Francisco alt-rock mainstay’s newly released protest song kicks off with a bang–an audio clip taken from the gristly aftermath of a police-lobbed tear gas canister fracturing the skull of Iraq War veteran Scott Olsen at an infamous Occupy Oakland protest. (SCROLL DOWN FOR VIDEO) From there, the U.C. Berkeley valedictorian ( really ) says Zuccotti Park is everywhere and calls on the youth of America to take to the streets–all done in Third Eye Blind’s trademark glossy post-grunge style. The track can be streamed or downloaded on the band’s Facebook page . “I think college students are going to come to terms with the unfairness of student loans, the hallowing out of jobs from finance based capitalism, and the depletion of public wealth,” said Jenkins in a post on Third Eye Blind’s website . “When you take money out of politics, which is what Occupy Wall Street is about for me, you reverse these trends. This song is meant to encourage their participation. I hope we flood this movement with music.” Jenkins has long been outspoken politically and often embedded political messages in his songs. In a tongue-in-cheek blog post on Huffington Post San Francisco earlier this year, he advocated for Oracle billionaire Larry Ellsion to become the next Republican nominee for president. Here are the lyrics: if there ever was a time, it would be now is all I’m saying if there ever was a time to get on your feet and take it to the street cause you’re the one who’s getting played right now by the game they’re playing come on meet me down at Zuccotti park oh where are the youth, we need you now come speak the truth, come break it down where are the youth, we need you now if there ever was a time, it would be now to make the masters hear this if there ever was a time to get downtown and get non violent and fearless things only get brighter when you light a spark everywhere you go right now is Zuccotti park and news corps says you don’t have a plan well sit down man, i’ll tell you again the plan’s to stand together up to greed and a tear gas can in a veteran’s face won’t change the case (chorus) if there ever was a time, it would be now for the rest of us if there ever was a time it would be now cause money and power are incestuous a moment makes a movement or it fades out in the dark come on meet me down at Zuccotti park and i saw a sign in the oakland spring it said “occupy everything!” or by and for and off won’t mean a thing Listen to the track: Check out this video of Jenkins discussing the politics behind Third Eye Blind:

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Dan Rather: Avoiding the Auction Block

November 16, 2011

No other state has experienced the dizzying heights of the housing boom or the depths of the subsequent bust quite like California. Today, four metro areas in the Golden State have the highest foreclosure rates in the country, eclipsing — for the first time — even Las Vegas, Nevada. In last night’s look at the housing crisis that continues to cripple this country, we traveled to southern California and met Lise Johnson, a mother of four who’s been in the same home for 12 years and is desperate to stay put. And then we did something that’s hard to do… we followed Johnson’s loan on its journey from a subprime (and now defunct) lender in California to Wall Street, where major investment banks bundled Johnson’s loan, and thousands like it, into a security called the Rali Series. The Rali Series was an investment offering that included $9 billion worth of home loans, primarily from California, Arizona and Florida. Goldman Sachs, UBS and Citigroup peddled the Rali series to institutional investors, including pension fund managers, who were looking for a supposedly safe place to put their money. According to attorney Joel Laitman of law firm Cohen, Milstein who is representing some of these investors, the investments were rated AAA and AA, meaning the likelihood of default was virtually nil. But in 2008, Lise Johnson and thousands of other homeowners faced exploding interest rates and stopped paying. That had devastating repercussions for Laitman’s clients, who saw jaw-dropping losses when they opened their pension statements. “The narrative thread that connects Lise and homeowners like her to my clients who are conservative pension fund investors representing working people like carpenters and boilermakers…is that these groups have been left holding the bag as the big losers in this mortgage-backed security scheme” Laitman told us. Meanwhile, Laitman says, the investment banks and rating agencies made a killing. “They made their money the minute the offering was done,” Laitman says. In our investigation into both ends of the housing bust, we found that today, homeowners who took out these loans, and investors, who bought them, often want the same thing… to modify the loans and avoid the auction block, where fire-sale prices mean investors recoup little. But getting a loan modification isn’t easy. The government program Home Affordable Modification Program, or HAMP, pays servicers financial incentives, a few thousand dollars for every loan a servicer modifies. But those ‘financial carrots’ aren’t always enough. Back in Corona, California, Lise Johnson spent three years trying to get her loan modified. She says her mortgage servicer, Aurora Bank of Littleton, CO sent her down a rabbit hole of endless phone calls, lost paperwork and unanswered questions. Johnson’s lawyer told us that for servicers like Aurora, foreclosure can be a lucrative profit center because they make money off of late fees and defaults. Johnson’s home was recently foreclosed. She received an eviction notice on October 13th, which she is trying to fight. Dan Rather Reports airs Tuesdays on HDNet at 8 p.m. and 11 p.m. ET. This program is now available on iTunes . You can also follow us on Facebook and Twitter .

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Poll Shows The ‘State Of Young America’ Is Indebted And Dubious Of Attaining American Dream

November 9, 2011

NEW YORK — Five years ago, when TiffanyAnn Johnson first embarked on her dream of a college education, her parents agreed to shoulder a majority of the costs associated with getting a degree. But soon after, the financial collapse decimated her father’s mortgage business, forcing her family of four to learn to subsist on her mother’s meager salary. With two college-aged children, the added cost of higher education quickly proved more than her one-income family could afford. Johnson, 23, who graduated in 2010 from Virginia Commonwealth University with a degree in mass communications, took out a combination of public and private loans to pay for school. All told, she’s now on the hook for nearly $65,000. “I always thought that if I worked hard and created opportunity for myself, that I would be in a pretty favorable position,” said Johnson. She now works in a temporary administrative position doing data entry at Yale University. “I thought I did everything right. But when this gig is up, I’ll be lucky to even get a job doing seasonal retail.” According to a national poll released Wednesday afternoon, many young Americans share the frustration felt by Johnson . A majority of the 18-to-34-year-olds surveyed perceived a college degree as a more vital component of their own chances for success than it was for their parents . But, many are also simultaneously finding the cost of college increasingly burdensome . “Young adults today are the first generation facing downward economic mobility compared to their parents’ generation,” said Tamara Draut, vice president of policy and programs for Demos. “As job quality has declined for all but those with college degrees, higher education is too often a debt-for-diploma system that puts an immediate obstacle in front of new graduates as they start their working lives.” The Institute for College Access & Success, Demos and Young Invincibles commissioned Wednesday’s national, bipartisan survey, conducted by Lake Research Partners and Bellwether Research and Consulting. Between Sept. 25 and Oct. 4, the survey sampled 872 young adults between the ages of 18 to 34 . The Institute for College Access and Success is a nonprofit working to make higher education more affordable; Demos is a non-partisan research and advocacy organization working for greater levels of civic engagement; and Young Invincibles is a national youth organization working to mobilize and expand opportunity for young Americans. Of the survey’s respondents, 81 percent said it is now harder to afford a college education than it was five years ago, and nearly three-quarters said they graduated with too much debt. “This shows that there’s this widespread recognition that college is getting harder to afford,” said Lauren Asher, president of the Institute for College Access and Success. Last week, the Institute for College Access and Success released an annual report finding that the average debt load for 2010 graduates had again risen. Amidst a difficult job market, it found that last year’s graduates owed an average of $25,250 . The questions used in Wednesday’s poll were included in the ” State of Young America ,” a large, multi-issue survey also released last week. Besides the immediate worry of paying loans back, Draut found that high amounts of education-related debt often impacts other decisions later on in life. “They’re buying homes and starting families with their loan debt still around,” said Draut. “It makes it more difficult to save for their own retirement and save for their own child’s education — and it’s one of the reasons why we see such strong agreement that the amount of debt required to get a degree is too high.” Despite overwhelming concerns about their personal pocketbooks, nearly a majority of respondents — 48 percent — believed their generation would be worse off than their parent’s generation. Even still, 69 percent believed the American Dream was still attainable in their lifetime. Aaron Smith, co-founder of Young Invincibles, sees a generation largely straining under the added burden of college-related debt. “If I have a job and can make my student loan payments, that’s fine. But I’m still stuck with that debt for years, if not decades,” told Smith to HuffPost. “This is going to have a longer-term psychological impact affecting not only young people’s concern about the current cost of higher education, but about the spiraling cost of college for their own children.” Since graduating from Virginia Commonwealth University more than a year ago, Johnson has struggled to find work. Even with a job, her monthly loan payments are nearly impossible to afford. Lately, Johnson dodges as many as six calls per day from Wells Fargo, Sallie Mae, Discover and Direct Loans inquiring about combined total of nearly $65,000 in past-due loan payments. “With my Dad’s additional income, we weren’t upper middle class, but we definitely had a firm footing in middle-class life,” Johnson said. “Now, we’re definitely lower-middle class. It’s all become one huge juggling act and I’m not quite sure how to get back on track.”

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BofA Likely To Alter Rules For Debit Card Fees After Criticism

October 28, 2011

(Rick Rothacker) – Bank of America Corp, after receiving heavy public criticism for a planned $5 per-month debit card fee, is likely to give customers more ways to avoid the fee, a person familiar with the bank’s plans said Friday. The second largest U.S. bank is likely to allow many customers to avoid the fee by taking measures such as maintaining minimum balances, having paychecks direct deposited, or using Bank of America credit cards, the person said. Under earlier plans, customers might have needed balances totaling $20,000 across all their Bank of America accounts to avoid the fee. Bank of Americas unleashed a firestorm of criticism from customers, consumer advocates and politicians last month when it disclosed plans to charge customers $5 per month for using their debit cards, starting sometime next year. The goal was to make up revenue lost to a law that slashes the fees banks charge retailers when consumers swipe their cards. Some other major banks have quietly pulled back on the charges. After testing a $3 per month fee in two states since February, JPMorgan Chase & Co decided not to charge customers, a person familiar with the situation said on Friday. The test will end next month and will not be extended or expanded, the person added. Wells Fargo & Co started testing a $3 per-month fee in five states on October 14. The bank has not had time to evaluate results and has not made any changes in the program, Wells spokeswoman Lisa Westermann said. Charlotte, North Carolina-based Bank of America is not abandoning the fee now and will likely include it in new account types the bank is testing in three states. The bank plans to roll out these packages nationwide next year. The $5 per-month fee may still remain an option for customers, the person said. The bank has said the purpose of the new account types is to provide customers with upfront pricing, instead of hitting them with penalties after the fact. Customers can pay monthly fees of between $9 and $20, or avoid the charges by keeping minimum balances, using their credit cards or having a minimum amount deposited to their account. While some banks have disclosed plans to apply similar fees, many banks and credit unions decided not to institute the charge and have encouraged customers to switch banks. (Reporting by Rick Rothacker in Charlotte, North Carolina; editing by Andre Grenon) Copyright 2011 Thomson Reuters. Click for Restrictions .

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College Dropouts and Students Occupy Wall Street

October 25, 2011

NEW YORK — This past May, Audrey Hollingsworth had finally reached her limit. The rising debt and chronic joblessness among her friends, combined with the thought of personally plunking down $35,000 for another year at Warren Wilson College, was more than Hollingsworth could stomach. So, the 19-year-old, Lexington, Va., native dropped out. After a summer spent waiting tables, Hollingsworth boarded a bus to midtown Manhattan in mid-September with $4 in her pocket and no clear plan for what came next. On a whim, she ventured into lower Manhattan’s Zuccotti Park and set her sleeping bag down alongside dozens of other Occupy Wall Street protesters. And in the four weeks since, Hollingsworth hasn’t really left. “This is exactly the kind of experience I left school to go in search for,” said Hollingsworth, who doesn’t plan to venture home again until Thanksgiving. “In the past month, I’ve learned more about the world than I ever learned during an entire year of college.” Citing increasing amounts of student loan debt and rising rates of underemployment among their classmates, many college students have gravitated toward the Occupy Wall Street movement . While an estimated 150 campuses nationwide have staged formal protests and walkouts , another contingent also occupies Zuccotti Park — college dropouts who are voicing similar frustrations and worries about their own uncertain futures. George Machado, 20, is one. Machado, a philosophy and international relations major, dropped out of American University last spring with $53,000 in debt. If headed in a similar trajectory, Machado reasoned he would owe more than $200,000 in student loans come graduation day. Three weeks ago, Machado started sleeping in Zuccotti Park. At first, he wondered if it was merely a bunch of privileged kids posing as activists. But something about the sense of community quickly convinced him otherwise. “I’ve been waiting for this my whole life,” said Machado, who grew up in New York and believes that higher education should be free. “This is a revolution that’s been needing to happen and has finally begun. I’ve joined the revolution,” he said with a smile. Machado stood alongside his friend, Nicole Carty, who graduated from Brown University in May of 2010. The sociology major now works as an independent contractor, a position that includes neither benefits nor health insurance. Carty worries for the millions of well-educated young Americans unable to find decent-paying jobs. While Carty, 23, owes $14,000 in student loans, she can only afford $50 monthly payments. At that rate, including interest, she said she envisions paying off her student loans until she’s well into her eighties. Standing in the middle of Zuccotti Park on Tuesday morning, Jorden Eck and his friend passed out free slices of apple and pumpkin pie to passersby. Eck, a 20-year-old from upstate New York, dropped out of the State University of New York, Binghamton earlier this year after not being able to come up with enough tuition money to continue. Since dropping out of college, the only job Eck could find consisted of selling knives for Cutco, a cutlery vendor. Yesterday marked his 25th day of sleeping in the park. Despite the chillier temperatures that soon await, Eck vows to remain in Zuccotti Park until his demands are met. As for Hollingsworth, who plans to stay on until the end of November at least, she’s still weighing her future options. Finding a job figures prominently, as does the question of whether or not to reenroll in college at some point. Hollingsworth describes her upbringing as “solidly middle class,” with a father who worked as a financial planner. Her mother’s family operates a yarn shop and a blackberry farm on the outskirts of Lexington, Va. While her parents have expressed concern for their daughter’s safety, they’ve been generally supportive of her participation in the movement. For Hollingsworth, the fight over the affordability of higher education is one of the main reasons why she rearranges her sleeping bag each night. “Our parents always told us to go to college and that if we went to college, we’d get good jobs,” said Hollingsworth, who said she is anxiously awaiting the arrival of new tents later this week. “I’m guess I’m really just not so sure that’s going to happen anymore — and that’s why I’m still here.”

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Anya Kamenetz: Abolishing Student Loan Debt And Other #OccupyWallSt Demands

October 25, 2011

Student loan debt has become a defining issue of the Occupy Wall Street movement. The nation’s cumulative student loan debt surpassed our cumulative credit card debt in 2010, and is heading north of $1 trillion ; currently two-thirds of graduates take out loans, an average of $27,000 a head. The growth of this particular kind of debt makes young people furious. It’s a betrayal of the American social contract that says if you work hard and invest in yourself through education, you’ll be able to build a better life. In my first book, Generation Debt , I explored how we got here and told stories about the emotional and cultural impacts of student loans; lately, with DIY U and the free Edupunks’ Guide , I’ve been focusing more on the underlying issue of soaring college tuition and innovations that might be able to cut the cost spiral — not to mention the growing world of free and open education. These innovations are great, but they don’t help the graduates who are already saddled with so much debt. So here are some proposals to offer student borrowers relief that #OccupyWallSt could take up, ranked from the most radical to the more feasible. 1) Forgive all student loan debt. This idea has a Facebook page, a petition with 300,000 signatures, and it’s even been introduced in Congress . There are real fairness issues here because college graduates, even those with student loans are relatively more privileged with higher earning potential than non-college graduates. Still, if included as part of a radical call for bailing out the American people across the board — mortgages and credit card debt included — it has emotional resonance and could actually jumpstart the economy to boot. 1)a. You could help out those who most need it by canceling the student loan debt of non-graduates, defaulters, people who meet certain income requirements, or people who attended for-profits or other colleges with unacceptably low graduation rates (half of all student loan defaulters attend for-profits). See also: bankruptcy protection. 1)b. The radical direct action variation of this is for people to stage a debt revolt and simply stop paying their student loans. Advantage: Unlike with a mortgage or auto loan, they can’t repossess your brain. Disadvantage: You will never have credit again, and people in your life who have worked hard to pay off their own loans might see you as a deadbeat. 2) Rein in private student loans. Private student loans, those offered by banks like Citibank and Wells Fargo, are growing three times faste r than federal student loans. They are much more expensive, with higher fees and interest rates ranging up to 15%, varying by your creditworthiness. Private student loans could be abolished outright, or they could be required to offer the same interest rates and repayment options as federal student loans, which would severely restrict their availability. If we don’t do something to tame the private student loan beast, it doesn’t much matter what happens with federal student loans — the volume of private loans is set to outpace the volume of public loans by 2025, according to Mark Kantrowitz of finaid.org. 3) Reinstate bankruptcy for student loans. Student loans are unlike any other kind of debt in that they are almost impossible to discharge in bankruptcy, barring permanent disability. For federal loans, the government can garnish your wages, seize your tax refund, your federal disaster relief payments, and even your Social Security . Even private, unsubsidized student loans, the ones with 10 and 15% interest rates, have been nondischargeable in bankruptcy since 2005. Alan Collinge of Student Loan Justice has been organizing on this issue for several years. Bankruptcy protection has failed three times in Congress; there are currently bills in the House (sponsored by Rep. Steve Cohen of TN) and Senate (sponsored by Sen. Durbin) This is an issue of basic fairness. There’s no reason to treat student loan debt so differently from other types of debt, other than as a gift to the banks. 4) Expand Income-Based Repayment and Public Service Loan Forgiveness . Depending on how much you make and how much you owe, you have the right to lower your monthly payments on FFELP and direct student loans through Income-Based Repayment . President Obama just announced that he’s accelerating access to the plan so that graduates can pay just 10% of their income, with all loans forgiven after 20 years. Meanwhile, people who work in the military, for the government, for nonprofits, police, firefighters, teachers, social workers, have the right to have loans completely forgiven after 10 years of repayments. One issue with these programs is simply that they’re undersubscribed. Another is that you may end up paying more by stretching out the payments, and you’re harnessed to that payment for 20 years. But they’re a hell of a lot better than default, and in the absence of bankruptcy protection, they’re the least bad option for people currently facing unsupportable student loan debt.

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IBM Gets First Female CEO

October 25, 2011

SAN FRANCISCO — IBM Corp. ushered in Virginia Rometty as the company’s first-ever female CEO on Tuesday, as Sam Palmisano stepped down from the position. Palmisano, who turned 60 this year, has been CEO for nearly a decade. He will stay on as chairman. Virginia “Ginni” Rometty, 54, is in charge of IBM’s sales and marketing, and has long been whispered about by industry watchers as Palmisano’s likely heir. With Rometty’s appointment, effective Jan. 1, women will be in charge of two of the world’s largest technology companies. Last month, Meg Whitman was named CEO of Hewlett-Packard Co. Whitman joined eBay Inc. when it was a fledgling startup during the dot-com boom and guided it to become an Internet auction powerhouse and later ran for California governor. While Whitman’s HP is a sprawling company in disarray, Rometty will inherit a finely tuned IBM whose focus on the high-margin businesses of technology services and software has helped it thrive. IBM’s move was unexpected. Palmisano had tamped down earlier talk of his retirement, insisting that he wanted to stay on as chief. In rare public comments, he said last year that he was “not going anywhere” and that there’s no formal policy at IBM dictating when a CEO should retire. Palmisano in a statement said that Rometty has led some of IBM’s most important businesses, and was instrumental in the formation of IBM’s business services division. She oversaw IBM’s $3.5 billion purchase of PricewaterhouseCoopers’ consulting business in 2002, which is a key element of a strategy that has made IBM a heavily copied company. She is “more than a superb operational executive,” Palmisano said. “She brings to the role of CEO a unique combination of vision, client focus, unrelenting drive, and passion for IBMers and the company’s future,” Palmisano said. “I know the board agrees with me that Ginni is the ideal CEO to lead IBM into its second century.” Investors had liked the idea of Palmisano staying at the helm. IBM shares fell $1.59, or 0.9 percent, to $178.77 in extended trading, after the change was announced.

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Robert Reich: Why We Shouldn’t Be Selling the Right to Live in America

October 25, 2011

America is having a fire sale. Why not sell wealthy foreigners the right to live here, too? That’s the notion behind a bill introduced last week by Republican Senator Mike Lee of Utah and Democrat Senator Charles Schumer of New York: Stoke demand for American homes by allowing foreign nationals to buy them. In return, give foreigners the right to live here (although not work here). The price? At least $500,000 cash. It could be one piece of real estate costing $500,000 or more, or several, of one would have to be worth at least $250,000. Presumably, this would help homeowners by boosting demand. “This is a way to create more demand without costing the federal government a nickel,” Schumer told the Wall Street Journal . And it would help the street. Rather than have the big banks carry all those non-performing mortgage loans on their books or be forced to write them down, we’ll just goose the housing market by selling off the right to live in America. And the measure wouldn’t allow in the world’s riff-raff, because buyers would have to be rich enough to pay cash, and live here six months a year without working. Realtors love it. Says Glenn Kelman, CEO of Redfin, an online brokerage firm, “when property values sag and this is a desirable place to live, one of the simplest solutions is just to let more people in so they can buy the homes.” In Seattle, where Kelman lives, housing prices have slumped — as they have all over America. But Vancouver, Canada — just 140 miles to the north — is enjoying a housing boom because Canada allows foreigners to buy their way into Canada, just as the Lee-Schumer bill would do here. But wait a minute. Rich foreigner buyers may be a boon to American homeowners looking to sell, because those homeowners can’t find Americans willing and able to fork over as much money as the sellers would like. But what about American home buyers — many of them young, just entering the market — who would prefer low home prices that aren’t bid upward by rich foreigners? It’s not altogether obvious why we should favor American homeowners over American home buyers. The visa-for-home swap proposal also comes at exactly the same time the nation is actively closing its doors to foreigners who aren’t wealthy. Is this what America is all about? Policy makers have tightened eligibility for entering the country legally. Student visas are harder to obtain. Family members are waiting years to become resident aliens. Green cards are in short supply. Meanwhile, many states are doing whatever they can to make immigrants — mostly poor, but legal as well as illegal — feel unwelcome. For example, Alabama and Arizona allow police to demand “papers, please” from anyone they suspect may be undocumented (read: anyone who looks Hispanic). Alabama requires public schools to demand documentation from parents of all children in K-12 programs. The nation is expelling record numbers of undocumented workers. Over the last year (from October 1, 2010 to October 31, 2011), almost 400,000 people were deported – the largest number in the history of the Federal Immigration and Customs Enforcement Agency. Annual deportations have increased 400 percent since 1996. Some of these people committed criminal acts in the United States but a significant number simply overstayed their visas. Others had been in America for decades, working and raising their families here. Some had even been here legally but had no opportunity to defend themselves. A recent report by my colleagues at the Berkeley Law School notes that many immigrants “are pushed rapidly through the system without appropriate checks or opportunities to challenge their detention and/or deportation.” If the Schumer-Lee bill becomes law, the easiest way for a foreigner to live in America will be to plunk down $500,000 for a piece of property. Maybe we should rewrite Emma Lazarus’s words on the Statue of Liberty: Give us your richest, fattest cats, Your highest net-worth, seeking pleasure domes, Your wealthy heirs and pampered brats. Send these, with a half-million to buy our homes, And gild our fading door mats. — Robert Reich is the author of Aftershock: The Next Economy and America’s Future , now in bookstores. This post originally appeared at RobertReich.org .

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Al Checchi: We Have Met the Enemy and He Is Us

October 24, 2011

We hear a lot these days about those evil corporations and their pernicious effect on America. Should we hunt down these malefactors of malice? Perhaps, but on examination, they would be us. Off with our heads? Every one of us who is not employed by the government but engages in some commercial endeavor, be it giving manicures or building bridges, conducts these activities either as a sole proprietorship, partnership, or corporation. The differences: unlike proprietorships and partnerships, corporations are taxed twice, once at the corporate level and again at the individual stockholder level, but their owners (shareholders) are insulated from personal liability. For example if I own a restaurant as an individual proprietor, I can be sued personally by an accident victim. A corporation like McDonald’s may be sued for the same accident but its individual shareholders cannot. Without the protections of limited liability, very few individuals would be willing to invest in any enterprise and subject themselves to defending against potentially unlimited liability. Our very first corporate charters were granted by the states to induce private individuals to join together to build large infrastructure projects like bridges and turnpikes. What do American corporations do today? They do the same thing that any proprietor does, e.g. make and deliver goods and services. They succeed or fail based on the difference in the value that consumers put on their products and the cost of producing them – that ugly thing called “profits”. The formula for running a successful business is quite simple: combine human and material resources as efficiently as possible to create the greatest amount of value for the consumer. Most corporations like Apple, Microsoft, Federal Express, Marriott, and Proctor and Gamble obey the rules and strive and succeed at developing and producing popular products and services that create value (what some call corporate greed). Others like Enron and WorldCom break the rules. Corporations are only as good or bad as the people who run them. Just as most people are honest and do not break the law, most people through their actions as (proprietors, partners, and corporate employees) are honest and conduct themselves within its bounds. Some obviously don’t and they should be removed and punished. Most behave ethically; too many don’t. That is human nature. And as in any endeavor, half the people running business enterprises are below average. Only a minority are exceptional. Corporations are our principal providers of employment but that is decidedly not their objective. Their objective is to maximize profits (more corporate greed). They seek ways to make investments and increase value (provide more goods and services at a profit). To do this generally requires that they employ more people. Employment is the byproduct of investment. Governments have a role in this process too. While they don’t create employment directly, they are a major influence on the ability and willingness to make investments that increase employment. Case in point: As recently reported in the Wall Street Journal, California based CKE which operates 3000 restaurants nationwide is no longer opening restaurants in California but is opening 300 in Texas. One of the reasons: In California the regulatory process can take two years versus only 6 weeks in Texas and as a result, the cost of opening a restaurant in California is $200,000 greater. Similarly, America will import approximately $350 billion of oil this year. While we have many proponents of “green energy”, until we develop viable alternatives to fossil fuel, we must continue to consume oil. We have ample untapped oil reserves of our own to replace all imports. If not restricted by government, we would invest in extracting them. This would create jobs in the oil industry. The $350 billion increase in domestic income and spending would produce more jobs. And the increase in supply and resulting decrease in the cost of oil would allow consumers to spend their savings on other things and increase jobs even more. The lesson, if you want to create jobs, shape public policy to attract private investment. America and indeed the world have no shortage of individuals or enterprises that want to make a buck. Off with their heads?

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Poverty Rates Swelled In Almost All U.S. States, Cities In 2010

October 20, 2011

The ranks of the poor rose in almost all U.S. states and cities in 2010, despite the end of the longest and deepest economic downturn since the Great Depression the year before, U.S. Census data released on Thursday showed. Mississippi and New Mexico had the highest poverty rates, with more than one out of every five people in each state living in poverty. Mississippi’s poverty rate led, at 22.4 percent, followed by New Mexico at 20.4 percent. New Hampshire had the lowest poverty rate, at 8.3 percent, making it the only state with a poverty rate below 10 percent. Twelve states had poverty rates above 17 percent, up from five in 2009, while poverty rates in 10 metropolitan areas topped 18 percent, the data showed. “We saw the recession hit and unemployment increase, but we haven’t seen a dramatic drop in unemployment,” said Elizabeth Kneebone, a senior research associate focusing on metropolitan issues at the Brookings Institution. “Because we’re still in this weak recovery, we could see these numbers get worse before they get better,” she added. The U.S. recession that began in 2007 took a steep toll across the country, sparing only a few places from rising joblessness and crashing incomes. More than a year after the recession officially ended in 2009, the U.S. unemployment rate remains above 9 percent; the poverty rate rose to 15.3 percent in 2010 from 14.3 percent in 2009. “No state had a statistically significant decline in either the number of people in poverty or the poverty rate between 2009 and 2010.” the Census reported. Kneebone, of the Brookings Institution, noted that many of the big increases in the poverty rate in the first year of the recession were centered in the inner-mountain west and the Sunbelt. “As the recession deepened and spread to other industries, other regions of the country also saw their numbers increase,” she said, noting that areas reliant on manufacturing had not fully recovered from a downturn earlier in the decade when the recession struck. The depth of poverty levels increased in 2010, with 6.8 percent of people having incomes that were no more than half of the federal government’s official poverty threshold. That was up from 6.3 percent in 2009. Poverty ran deepest in Washington, D.C., where one in 10 people had incomes less than 50 percent the threshold. The Census also looked at the 366 metropolitan areas that account for more than 80 percent of the U.S. population. The Texas region defined by the cities of McAllen, Edinburg and Mission had the highest poverty rate in the country — 33.4 percent. It was followed the Fresno, California, area at 26.8 percent. Poverty rates topped 18 percent in metropolitan areas centered around El Paso, Texas; the cities of Bakersfield, Modesto and Stockton in California; Augusta, Georgia; Memphis, Tennessee; and both Durham and Greensboro in North Carolina as economic problems spread from core urban areas to the suburbs over the decade. “Many communities are facing this challenge in a magnitude they’ve never had to deal with before,” said Kneebone, who said there are now 2.7 million more people in suburbs than cities. Despite the deep poverty levels in the District of Columbia, the nation’s capital, the Washington, D.C., metropolitan area had the lowest poverty rate in the nation, at 8.4 percent, due to its wealthier suburbs. Honolulu had the second lowest, 9.1 percent. The numbers of people collecting food stamps and relying on Medicaid, the government healthcare program for the poor, skyrocketed in recent years. The Census also found that in 2010 more people collected other forms of public assistance than in 2009. In 2010, 3.3 million people received public assistance at some time in the year, an increase of 300,000 from 2009. Among U.S. households, about 2.9 percent received public assistance in 2010, up from 2.7 percent in 2009. The states with the highest public assistance participation included Alaska, Maine, Vermont and Washington. The states with the lowest rates were Louisiana, Alabama and Wyoming. Although Alaska and Maryland had poverty rates of 9.9 percent in 2010, the margins of error for those states were greater than 0.3 percent. (Editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Median Income Falls To 10-Year Low As Number Of Millionaires Grows

October 20, 2011

Americans’ incomes are falling, perhaps a reason why pessimism about their personal finances is now the lowest it’s been in a decade. The median income fell in 2010 for the second year in a row to $26,364 , a 1.2 percent drop from 2009, and the lowest level since 1999, according to David Cay Johnston at Reuters. Meanwhile, U.S. households are growing increasingly concerned about their finances with more than 20 percent of adult Americans rating their financial situation as “poor,” a Gallup poll finds. That’s a larger share than the 16 to 19 percent of Americans who viewed their finances as poor during and after the recession. It’s also the highest percentage since 2001, the first year of the survey, according to Gallup. In some ways, the financial crisis has taken more of a toll on the employed during the recovery. Indeed, Americans’ incomes have fallen more during the recovery than they did during the recession. Incomes dropped 6.7 percent during the recovery between June 2009 and June 2011, compared to a 3.2 percent drop during the recession from December 2007 to June 2009, a study from former Census Bureau officials found. And it will take some time to get incomes back to where they were before the recession. The U.S. median income has declined 7 percent in the last 10 years and while economists expect incomes to rise over the next decade, it likely won’t be enough to return to pre-recession income levels, the Wall Street Journal reports. Not everyone is suffering, however. The number of workers making $1 million or more actually rose to nearly 94,000 last year from 78,000 in 2009, according to Reuters. Still, most employed workers don’t expect much in the near future. Nine out of 10 American workers say they don’t expect to get a salary increase in the next year that will be enough to compensate for rising food and fuel prices, a June American Pulse survey found. Meanwhile, Gallup’s Basic Necessities Index — a measure of Americans’ access to food, shelter and health care — fell earlier this month to lows on par with recession levels. Corporations may finally be feeling the pain of a sluggish recovery too, MSNBC reports. As CEOs continue to report their company earnings for the last quarter, their outlooks for the future will likely include belt-tightening measures , according to MSNBC.

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SEC Struggles Over Disclosing Which Companies Use ‘Conflict Minerals’

October 16, 2011

WASHINGTON (Sarah N. Lynch) – Securities regulators are struggling to craft a rule that sheds light on companies that use certain African “conflict minerals” but avoids a compliance nightmare that hurts manufacturers. The Securities and Exchange Commission is six months behind schedule in finalizing the rule that is required by last year’s Dodd-Frank financial oversight law. The rule, which was tucked into the legislation at the last minute, will require companies to disclose whether they use tantalum, tin, gold or tungsten from the war-torn Democratic Republic of the Congo. The agency is holding a roundtable discussion on Tuesday to hear from companies, human rights organizations and other stakeholders. The SEC has asked for help navigating the mine field of tricky issues such as tracking conflict minerals through the supply chain and “workable” due diligence. Corporations such as AT&T (T.N) have criticized the rule as overreaching. They say it could trip up companies who contract with manufacturers and have little, if any, control or knowledge about the origins of minor amounts of minerals that end up in their products. Fear about running afoul of the pending reporting rule has already prompted some companies such as Apple Inc (AAPL.O) and Hewlett-Packard Inc (HPQ.N) to stop sourcing from the region. “If you go from compliance on through, this starts to set up not only nightmare scenarios, but also costly scenarios that make it difficult for companies to ensure an adequate supply of raw materials,” said Tom Quaadman, the vice president of the Chamber of Commerce’s Center for Capital Markets Competitiveness. The SEC issued a draft proposal of the rule in December and hopes to finalize it by the end of the year, according to the agency’s website. The challenges of implementing the rule are many. For a start, companies will need to identify whether or not any of the four “conflict minerals” are contained in their products – something that is not always known. Then, if the mineral is present in the manufactured good, the company would have to exercise due diligence to determine where the metal came from. That could mean going through layers upon layers of suppliers, some of whom may be private companies located in third-world countries. And if the metal has been recycled, as gold often is, it could get even trickier to track. “What would be required here is the development of a global compliance infrastructure,” said Brian Cartwright, a senior adviser at Latham & Watkins and former general counsel for the SEC. “The notion is that any public company in the United States will have to file, in annual reports, as an exhibit, a conflict minerals report that has been subject to an independent private sector audit,” said Cartwright. Many companies, business groups and lawyers have urged the SEC to phase in the new rules over time to help make it easier to comply. They also want the SEC to narrow the scope of the rule so that companies are not forced to track trace amounts of minerals. But human rights groups are staunchly opposed to a phase-in period, saying the SEC needs to follow the Dodd-Frank mandate and implement the rule without delay. Because the conflict minerals rule is required by the law, the SEC has little wiggle room to stray from congressional intent. “Businesses should be held accountable for human rights issues, and investors find these concerns to be material in that they, at the end of the day, affect companies’ image and bottom line,” said Amol Mehra, the coordinator of the International Corporate Accountability Roundtable. “All companies need to do… is simply tell us what is in their products.” The SEC must also deal with potential legal challenges to the final rule. The Chamber of Commerce, which in July successfully convinced a federal court to overturn the SEC’s proxy access rule, has its sights on a possible challenge of the conflict minerals rule if the agency does not improve its cost estimates. The agency’s proposal had initially estimated the total paperwork burden of compliance would be $71 million. But the Chamber says that figure is woefully inadequate. The National Association of Manufacturers, a leading trade group fighting the proposal, has estimated the conflict minerals plan could cost industry between $9 to $16 billion to implement. (Reporting by Sarah N. Lynch; Editing by Tim Dobbyn) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Manager Of World’s Largest Bond Fund: ‘I’m Just Having A Bad Year’

October 16, 2011

NEW YORK (Jennifer Ablan) – Bill Gross, manager of the world’s largest bond fund, apologized to his investors late Friday for his poor performance, saying “I’m just having a bad year.” In a Special Edition letter posted on PIMCO’s website, Gross, who runs the $242 billion PIMCO Total Return portfolio, wrote that he underestimated the contagion effect from the Europe debt crisis and the U.S. debt ceiling debacle. “As Europe’s crisis and the U.S. debt ceiling debacle turned developed economies toward a potential recession, the Total Return Fund had too little risk off and too much risk on,” said Gross, who also shares the title of co-chief investment officer at Pacific Investment Management Co. with Mohamed El-Erian. Gross, known as the “bond king”, came under heavy criticism earlier this year when he bet heavily against U.S. Treasuries which have turned out to be one of the biggest outperformers of 2011. His fund’s poor performance led Gross to simply call his open letter to investors, “Mea Culpa.” It is up only 1.06 percent year to date versus the benchmark BarCap U.S. Aggregate Index which is up 3.99 percent. Gross, who helps manage more than $1.2 trillion at PIMCO, said late Friday the Total Return fund had positions in German bonds and Canadian Treasuries to counter the U.S. underweight position, “but not enough.” He added that minor percentages of emerging market corporate and sovereign debt, effectively denominated in their local non-dollar currencies, did not perform well either. “The simple fact is that the portfolio at midyear was positioned for what we call a “New Normal” developed world economy – 2.0 percent real growth and 2 percent inflation,” Gross said. That’s all changed, of course. Gross said PIMCO’s internal growth forecast for developed economies “is now zero percent over the coming several quarters and the portfolio more accurately reflects this posture.” Last week, Reuters reported that Gross ramped up buying of mortgage-backed securities in September, albeit by using leverage, on the likelihood the Federal Reserve’s reinvestment program in those securities will boost prices significantly. Gross increased mortgage debt to 38 percent of assets in September, from 32 percent in August, as the U.S. central bank announced last month that it “will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.” His move into mortgage-backed securities also comes as the PIMCO Total Return fund’s cash equivalents and money-market securities fell to negative 19 percent September, from negative 9.0 percent in August. In having a so-called negative position in cash equivalents and money-market securities, it is an indication of using derivatives and short-term securities as collateral in order to boost the fund’s buying power with leverage. Gross’ move to seek more yield by putting more money into mortgage bonds is yet another bold bet which many will be watching after Gross’s call on Treasuries cost his fund’s performance. In doing so, he is effectively extending the average duration of his fund’s investments, making them potentially more exposed to a rise interest rates. Clearly, Gross is betting interest rates will remain low for some time as the world economy continues to struggle. In his “mea culpa” letter, Gross resorted to baseball analogies and metaphors. He closed his letter by saying: “This is big league ball, where your ticket holders come to the park expecting not a circus-Willie Mays-catch but more wins than losses and a year-end performance that places your bond assets near the top of the standings.” He added, “Baseball metaphors aside, we know why PIMCO Total Return is arguably the largest and hopefully the greatest bond fund in the world.” Copyright 2011 Thomson Reuters. Click for Restrictions .

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Is This The Next Michigan?

October 15, 2011

ANN ARBOR, Mich. — When Rich Sheridan lost his job in the dot-com bubble about a decade ago and decided to start his own company, he had some trouble explaining the idea to his wife. “I came home and told Carol I had lost my job and she went, ‘So you’re unemployed,’” he said. “And I said, ‘No, I’m an entrepreneur now.’” Even after weeks of working in his basement with friends on the business plan, when it came time to invest some $15,000 of the family’s money in the nascent firm, Carol was confused. “I was just thinking, what business?” she recalled, adding that she thought her husband and his friends had been applying for jobs together in the basement. What they had been plotting instead was Menlo Innovations , a software-design outfit that now has 42 employees and that Sheridan and his partners expect will bring in about $5 million in revenue this year. And they weren’t alone. While Michigan’s economy is distressed overall, the emergence of countless small technology start-ups here in recent years gives some hope that there are better days ahead. But even as a report issued this month showed that, for all the state’s challenges, Michigan gained more tech jobs than any other state in 2010, there is still some lingering uncertainty about a brand of business that is much different from automobile manufacturing. Take Carol Sheridan’s father, for one. He worked for Chrysler for 10 years and was later a tool and die maker for an auto parts manufacturer. When Rich Sheridan wanted to start Menlo, his father-in-law “looked at him funny,” as James Goebel, another of the founders, remembered. The state as a whole has had to wrap its mind around these new kinds of companies, which are among the fastest growing in Michigan. Even as GDP growth struggles here, the high concentrations of students and engineers have made it an attractive place to start new companies. Many of these have been founded by graduates of the University of Michigan, which recently announced that it would begin investing in companies that begin on its campus. Still, Goebel said that Michigan investors in general are more risk-averse than venture capitalists in other states. “People here only want to start the next HP or Apple,” he said. “But you have to start 10,000 firms to end up with HP and Apple. It’s a new idea here that you would start companies knowing so many would fail.” Menlo certainly hasn’t failed, and nobody is looking at its founders with anything except admiration anymore. The company has been named a “Michigan Economic Bright Spot” and one of the fastest-growing private companies in America. Software they developed for a cytometer manufacturer helps count cells in fluid and has been one of the firm’s biggest successes. Now they’re ready to branch out into even riskier territory. Nontraditional business arrangements, such as deferring design fees in exchange for an equity stake or royalties in the final product, have always been central to what Menlo does, and was central to getting the firm off its feet in its earliest days. Now the founders are considering making this kind of “leveraged play” almost their entire business. “It’s a completely new model,” as Goebel put it, “and that’s true for us and also for the state in general.” This post is part of Patch: The Road Trip . Read Arianna Huffington’s introduction to the project , and be sure to follow Paul on Twitter and MapQuest .

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A LOOK INSIDE: Occupy LA Opens Its Tents (VIDEO)

October 11, 2011

Los Angeles filmmaker Chelo Alvarez-Stehle takes us into tent city outside of City Hall in Downtown Los Angeles – where Occupy LA protestors have been camped out since October 1. Video produced by Chelo Alvarez-Stehle with Lorena Manriquez Chelo Alvarez-Stehle — SANDS OF SILENCE www.sandsofsilence.org www.facebook.com/sandsofsilence @sandsofsilence Lorena Manriquez — ULISES’ ODYSSEY https://www.facebook.com/group.php?gid=61807137602 MORE: To watch Danny Glover’s speech to Occupy LA protestors, click here . PHOTOS: Occupy LA’s Weekend Warriors PHOTOS: Best Signs From Occupy LA

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Wall Street CEOS May Be Held Accountable If Their Bank Breaks Rule

October 8, 2011

WASHINGTON (Dave Clarke) – Regulators are considering holding Wall Street chief executives legally liable if they allow certain types of proprietary trading on their watch. Regulators due to reveal the Volcker rule proposal next week are expected to ask whether CEOs should have to certify, or “attest,” that their bank has put in place the proper systems to make sure no proprietary trading is taking place. The idea is that holding CEOs personally accountable will add a strong deterrent effect to the Volcker rule. The rule, called for in last year’s Dodd-Frank financial oversight law, bans banks from trading for their own profit in securities, derivatives and some other financial instruments. The bank industry is already balking at the legal burden and compliance headache that would come with a CEO certification. “The whole Volcker rule proposal envisions having an army of nannies overlooking the work of the people who actually work with customers,” said Wayne Abernathy, a senior official with the American Bankers Association. “How much more does an attestation bring that that doesn’t bring?” A CEO certification approach may be similar to 2002′s Sarbanes-Oxley law. That law, put in place after major accounting scandals at Enron and Worldcom, has the power to send executives to prison and make them pay multimillion-dollar fines for submitting false certifications on corporate disclosures. It is unclear if regulators will seek CEO imprisonment or hefty fines as potential penalties for violating the Volcker rule. Whatever regulators might put in place, fines would be a far more likely punishment if any are ever doled out, banking lawyers said. Supporters of the proposal contend it would force the CEO to be more involved and accountable. “Placing personal and legal responsibility directly with a corporation’s top executive is key to ensuring financial firms comply with the Volcker Rule and stop engaging in the risky activities that led to billion-dollar taxpayer bailouts,” Sen. Carl Levin said in a statement to Reuters. The crackdown on proprietary trading, which has some exemptions, is known as the Volcker rule after former Federal Reserve Chairman Paul Volcker, who championed the reform. The rule will mostly impact large banks including Goldman Sachs, JPMorgan Chase and Citigroup. Supporters contend that large banks whose customers receive deposit insurance from the government should not be engaging in risky trading activities that could put these deposits in jeopardy. Despite banks’ concerns, regulators may go easier on the issue of CEOs’ legal liability than the industry’s worst fears. In January the Financial Stability Oversight Council, the panel of regulators headed by the Treasury Department, released recommendations for enforcing the Volcker rule. Included in this list was requiring a CEO to certify their compliance efforts’ “effectiveness.” A draft of the rule to be considered next week by regulators does not explicitly call for a CEO certification and instead solicits feedback on whether it should be in a final rule. The draft, first posted online by the American Banker on Wednesday, could be changed before the Federal Deposit Insurance Corp meeting on Tuesday and the Securities and Exchange Commission meetings on Wednesday on the proposal. Banking lawyers say the certification could work similarly to Sarbanes-Oxley. “The idea is they want to have a human being on the line saying it is true,” said Bradley Sabel, a partner with Shearman and Sterling law firm. But even some critics of the banking industry who argue the government has not done enough to respond to the 2007-2009 financial crisis question whether upping a CEO’s legal responsibility will make much of a difference. “I count myself among those who would like some CEOs’ heads on a stick but I don’t think this is the right way to go about it,” said Cornelius Hurley, director of Boston University’s Morin Center for Banking and Financial Law. “At the end of the day he is going to rely on the representations of his advisers anyway and all this does is make sure he doesn’t sleep at night.” (Reporting by Dave Clarke, Editing by Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions .

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PHOTOS: First Jobs Of Hollywood’s Hottest

October 6, 2011

AOL Jobs got in touch with several stars to find out what they did before they were a popular household name.

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Poll: Majority Of Global Investors Back Buffett Rule

September 30, 2011

The majority of global investors support boosting taxes on households earning at least $1 million, according to a Bloomberg poll released Friday. Sixty-three percent of global investors said they support the so-called Buffett rule — named for billionaire Warren Buffett, who proposed raising taxes on the “super-rich” in an op-ed in The New York Times . American investors were less supportive than their colleagues around the world; forty percent backed the rule, according to the poll. But the majority of American voters are in favor of taxing the rich. Nearly three-quarters of Americans said they supported the Buffett rule , according to a poll released earlier this week by the website Daily Kos. Two-thirds of Americans also support raising taxes on households earning more than $200,000 , a recent Gallup poll found. And A majority of Republicans also support the rule, according to the Daily Kos poll. Still, the partisan rhetoric surrounding the measure may tell a different story. After Obama proposed the Buffett rule earlier this month as part of a larger plan to cut the national deficit using a combination of tax cuts and spending increases , Republican leaders accused him of stoking “class warfare.” In the op-ed, Buffett wrote that his tax rate is lower than that of everyone else working in his office . Buffett suggested raising tax rates on those making $1 million or more both as a way to “stop coddling” the rich and as a way to spur economic growth. Still, some argue that even if the Buffett rule were to survive and become law, it would do little to curb the budget deficit. Daniel Indiviglio of The Atlantic wrote earlier this month that if tax rates on the rich went back to pre-Bush-tax-cut levels they would bring in 4.5 percent of the 2009 national deficit. But many governments around the world think a Buffett rule-type law would help to solve their budget woes. France and England have boosted taxes on their wealthy , according to The New York Times , and Spain, Greece, Japan and Italy are considering doing the same. European investors had the highest level of support for the Buffett rule at 78 percent , the Bloomberg Poll found, while 69 percent of Asian investors back it. The Buffett rule may have less than half the support of U.S. investors, according to the Bloomberg poll, but it’s backed by one prominent American. Def Jam co-founder Russell Simmons told MSNBC on Thursday that he wants the U.S. government to raise his taxe s. The hip-hop mogul, who is worth an estimated $340 million, took a page out of Buffett’s book saying in the interview: “All my employees — every single one — paid more taxes than I did.”

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SEC Finds ‘Apparent Failures’ At 10 Credit Rating Agencies

September 30, 2011

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission staff found “apparent failures” at each of the 10 credit rating agencies it examined, including Standard & Poor’s and Moody’s, the agency said on Friday in its first annual report of credit raters. The SEC staff said concerns include failures to follow ratings methodologies, failures in making timely and accurate disclosures and failures to manage conflicts of interest. The SEC’s annual report was required by last year’s Dodd-Frank financial oversight law. The staff report did not single out by name any credit-rating agency for questionable actions. It also said the SEC has not determined that any of the report’s findings constituted a “material regulatory deficiency” but said it might do so in the future. “We expect the credit rating agencies to address the concerns we have raised in a timely and effective way, and we will be monitoring their progress as part of our ongoing annual examinations,” said Norm Champ, deputy director of the SEC’s Office of Compliance Inspections and Examinations. The SEC’s report covers 10 credit-rating firms including Moody’s Corp, McGraw-Hill Cos Inc’s Standard & Poor’s and Fimalac SA’s Fitch Ratings. Congress first empowered the SEC to closely regulate the firms in 2006, and Dodd-Frank gave the agency even greater powers over the industry. Credit raters have been widely criticized for fueling the financial crisis by giving inflated ratings to toxic subprime mortgage securities. On Monday McGraw-Hill disclosed that the agency might charge its Standard & Poor’s unit with breaking securities laws. SEC Enforcement Director Robert Khuzami told Reuters this week that the agency faces hurdles proving wrongdoing at credit-rating agencies, pointing to the complexity of the cases and the industry’s strong legal defenses. (Reporting by Andrea Shalal-Esa, Aruna Viswanatha, Karey Wutkowski, editing by Gerald E. McCormick) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Siemens moved deposits from French bank to EC: Financial Times

September 20, 2011

(Reuters) – Siemens withdrew deposits from a large French bank two weeks ago and transferred them to the European Central Bank, in the search for a safe haven, the Financial Times reported on Tuesday. The newspaper said the German group had withdrawn more than half a billion euros in cash deposits from the French bank. In total, Siemens has parked between 4 billion euros and 6 billion ($8.2 billion) euros at the ECB’s facilities, mostly through one-week deposits, the paper said. It quoted a person with direct knowledge of the matter as saying that the group had withdrawn the money partly because of concerns about the future financial health of the bank and partly to benefit from the higher interest rates paid by the ECB. The newspaper said it was not clear from which bank Siemens had withdrawn the deposits. However it quoted a person familiar with BNP Paribas as saying that it was not the bank involved. No one at Siemens was available to comment. (Reporting by Kate Holton; Editing by Steve Orlofsky)

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Australia’s Qantas grounds planes as staff strike

September 20, 2011

SYDNEY (Reuters) – Australia’s Qantas Airways canceled or delayed more than 50 flights on Tuesday after around 4,000 ground staff walked off the job as an industrial dispute over pay and the airline’s plans to expand in Asia escalated. Qantas said it expected more than 6,000 passengers to be affected during the day but many had been notified of the changes, avoiding scenes of chaos at Australian airports. Flights were on average delayed by around 15 minutes and schedules were expected to return to normal in most major Australian cities by lunchtime, a Qantas spokesman told Reuters. The Transport Workers Union, which represents baggage handlers and catering staff, said many airport staff had been locked out of the workplace since early Tuesday morning. The strike was triggered by a dispute over pay and conditions and in opposition to planned domestic job cuts as the airline expands in Asia. Qantas had not been notified of plans for further strikes at this stage, the airline spokesman said. (Reporting by Michael Smith; Editing by Balazs Koranyi)

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Lande Yoosuf: How I Became an Entrepreneur Earlier Than I Thought

September 19, 2011

While I sat behind the register at my hotel gift shop job to earn money during college, I secretly went through the pages of different publications that discussed economics, job market, politics and the career advancement of women. Thinking far ahead, I saw myself as an entrepreneur later on in my life featured in between the pages — I thought I would need more money, resources and clout on my side in order to own a business. When I graduated from college, I was oblivious to the intensity of the rat race that existed in the entertainment industry. Disappointment crept in because it was very apparent that I would need more than “hard work” to get to the next level — I needed a sound strategy. I aggressively networked and sought out mentors, hoping they would expose me to business endeavors that served as great homework. I worked extensively without pay at different startups for several years. I worked with online publications, talent managers, television producers and non-profit organizations that all had established relationships with the entertainment industry. Witnessing and helping others execute their visions was something I did with great vigor for a while — that stamina helped me realize that a lot can be done with a limited budget or assets. I often received compliments from colleagues and superiors that observed my leadership qualities. But I still did not execute anything of my own to prove my true capabilities as a leader. An opportunity to start a business partnership presented itself, which made me feel more comfortable in establishing a company. Having power in numbers was a great way to accumulate resources. Some of the most valuable tools used included pro bono legal services, business centers, libraries and websites that offered a plethora of information about launching on a shoestring budget. I was shocked to learn about the vast number of grants available to women and minority entrepreneurs. My mentors from past opportunities offered insight on what strengths they felt I could contribute to this venture. There was definitely a learning curve on my end but I managed to pull a lot off quite a bit for the team. In addition to my individual reflections, the experience was invaluable in teaching me about teamwork, leadership and how to build a sustainable, profitable brand. Surprisingly, my day job as a Casting Producer was a major motivator in finally pushing me to establish a company. I was offered a part-time casting assignment and saw it as a prime opportunity to create One Scribe Media. Those brief part-time jobs cultivated a list of clients that dramatically influenced my company’s credibility. Having those relationships in combination with the background information over the years finally helped me to develop the courage to start a business — and way before I initially thought it would happen. The additional income was a welcomed plus too! Making my company a priority was challenging decision that was more than worth it. I know my ideas are good enough — the amount of support I receive made me realize that it was not about age or resources that prevented me from taking a leap of faith. It was my lack of confidence and preparedness. As I continue to develop more self-awareness and maturity, my list of professional beliefs will grow exponentially. In the interim, here are some things I can share: Brevity beats impeccable presentation. Just get your work out there and make content king if you have very little money. When your product lacks response, pay attention to that information. Find out how you can achieve your mission while engaging your audience. Stay ahead of the curve with technology and marketing. It’s your company’s lifeline. Listen to criticism, but it isn’t gospel. Take it in small doses, thank the person for their time and sleep on whatever they tell you for a few days. Don’t let unhappy people advise you, regardless of their intentions. Negativity is contagious. Listen To Your Gut . This is incredibly important. We often know what the best decisions are instinctively but ignore those thoughts in fear of taking on unpopular ideas. But unpopular ideas are usually the ones that take you to the next level. Make sure your motivations are founded on sound values . When you have bad intentions, it is more apparent than you think. Look presentable but comfortable. Brand your appearance, even if you do not want to be the “face” of the operation. It will help you to be recognized when networking. Read any and everything. Embrace your inner geek. I was surprised when I realized how much my interest in politics peaked my business instincts. Politics drives the economy and vice versa. It’s always good to know what industries are in demand so you can find unique ways to implement it into your brand strategy. Get a mentor. You are not above anyone’s advice, regardless of age. Talk to random elders in your family or in the street. They give the best advice because of their life experience. Egos are lame. Be honest with yourself about past mistakes, and then move on so everyone else around you can move on too. Have a life. Date, get a hobby, travel, exercise, and develop an identity outside of your profession. It will inspire great ideas. And Most Important of All Be persistent and patient. Everyone’s journey is different so don’t focus on what everyone is doing, worry about how you can accomplish your goals. Ambition is channeled through “tunnel vision” for a reason!

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Fidelity adds index funds in search for new flows

September 19, 2011

By Ross Kerber BOSTON (Reuters) – Fidelity Investments added five low-cost equity index funds to its lineup on Monday, its latest move to catch the thrifty, back-to-basics mood of investors. Boston-based Fidelity said it added the funds to its Spartan lineup, which already included eight equity and bond funds with about $80 billion in assets as of August 31. The new funds are aimed at capturing flows from cost-conscious investors and at broadening the funds it can offer through company 401(k) retirement plans. “We want to be cost-competitive with anybody in the industry. We also want to have the options that people want to buy,” said John McNichols, Fidelity Senior Vice-President for Investment Product Management. The new funds are the latest move by Ronald O’Hanley, named president of the family-controlled company’s asset management business in 2010. Last week, O’Hanley replaced the manager of the long-suffering Magellan fund, the company’s onetime flagship that has posted years of underperformance. Under O’Hanley, Fidelity also this year launched four municipal bond funds in June and in March started selling its Conservative Income Bond Fund. Together the moves show O’Hanley has been more active than his predecessor in pushing new products out the door, said John Bonnanzio, who edits a newsletter for Fidelity Investors. “VERY COMPETITIVE ENVIRONMENT” “They need to roll out low-cost products in a very competitive environment,” Bonnanzio said. Data support Bonnanzio’s views. Fidelity was renowned for years for the star portfolio managers who ran big equity funds such as Magellan and the larger Contrafund, which is still successful under longtime manager William Danoff. But concerns about performance and volatility have led investors to pull out money. Last week, Chicago research firm Morningstar Inc estimated Fidelity had outflows of $7.6 billion in August, its worst month since October 2008, when it lost more than $13 billion. Other equity-heavy fund families also lost ground in August’s volatile but overall weak markets. In volatile stock markets, the story is partly about performance and partly about fees. According to Lipper, a unit of Thomson Reuters, index funds, which generally have lower fees, have been growing more quickly than actively-managed funds over the past three years. For the year ended August 31, investors have put $52 billion into indexed stock and bond funds, six percent of the funds’ starting value of $883 billion at August 31, 2010, according to Lipper. Flows to nonindexed stock and bond funds were $86 billion over the same period, or 1 percent of their starting value of $6 trillion at August 31, 2010. Fidelity said its new index funds would invest in areas, including emerging markets, non-U.S. stocks, mid-cap stocks, small-cap stocks and real estate. Their expense ratios would range between 6 to 33 basis points, depending on the amount of assets invested. (Reporting by Ross Kerber; editing by Andre Grenon)

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Negotiations Fail Again, But Employees Return To Work

September 19, 2011

LOS ANGELES — Negotiations throughout the night failed to produce a resolution as Southern California grocery employees returned to work Monday and their union and three major supermarket chains tried to avoid a strike. Ellen Anreder, a spokeswoman for the United Food and Commercial Workers, said talks have continued after a three-day notice period required before calling a strike elapsed early Sunday night. The union has told its members to return to work, she said. “As long as there are negotiations ongoing, we will stay at the table,” Anreder said. “Being at the table is better than being on the street.” Some 62,000 grocery employees have been working without a contract since March, while in discussions with negotiators for The Vons Cos. Inc.; Ralphs Grocery Co., a subsidiary of The Kroger Co.; and Albertsons, owned by Supervalu Inc. The union distributed picket signs Sunday as time ran out, and workers held a candlelight vigil outside a Los Angeles grocery store in hope of a new offer. A four-month strike and lockout that began in 2003 cost Ralphs and other grocery chains an estimated $2 billion. Grocers said they were hopeful new terms for a contract could be reached soon. “We think that progress has been made,” said Kendra Doyel, a Ralphs spokeswoman. “We’re going to stay there (negotiating table) until a contract is settled.” Ralphs has indicated it would initially close all of its stores if there were a strike; Albertsons said it could shutter up to 100 of its locations, while Vons said its stores would remain open. Los Angeles Mayor Antonio Villaraigosa urged negotiators to find a solution. “At a time of persistently high unemployment, poverty and foreclosures the last thing we need is a devastating strike that will make it more difficult for thousands of workers to put food on the table for their families, pay their mortgages and afford other basic necessities,” Villaraigosa said in a statement issued just before the deadline. “I urge both sides to reach an agreement to avoid a costly and damaging strike.” Both sides in the current dispute announced in July that they had reached a tentative agreement on the employers’ contributions to pension benefits, but payments to the union health care trust fund remained a major sticking point. Union members voted overwhelmingly to reject the health care proposal offered by the chains and to authorize their leaders to call a strike. Union officials said they were responding to what they characterized as the chains’ delaying tactics when they issued the required 72-hour notice Thursday evening to cancel the contract extension under which they had been working.

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Unions Start Passing Out The Picket Signs

September 18, 2011

LOS ANGELES — A union representing workers at three major grocery chains in Southern California distributed picket signs Sunday, as the clock ticked toward the end of a three-day notice period required before calling a strike. Union negotiators intend to keep talking if a resolution appears to be in sight when the period ends at 7:10 p.m. They also stressed that members could keep working beyond that time. “Our workers will stay on the job until at least midnight, and possibly longer if negotiations are moving ahead,” said Mike Shimpock, spokesman for United Food and Commercial Workers Local 770, one of the unions representing the 62,000 workers seeking a new contract. If little progress is made toward settling disagreements over health benefits, negotiators said they will tell members to walk off the job. The grocery workers have been working without a contract since March, while in discussions with negotiators for The Vons Cos. Inc.; Ralphs Grocery Co., a subsidiary of The Kroger Co.; and Albertsons, owned by Supervalu Inc. Representatives for the supermarket chains said last week they were disappointed that the unions had taken that step but remained committed to reaching an agreement. Kendra Doyel, a spokeswoman for Ralphs, said Sunday the supermarkets remained hopeful a deal would be reached before the deadline. Calls to representatives for Albertsons and Vons were not immediately returned. A four-month strike and lockout that began in 2003 cost Ralphs and other grocery chains an estimated $2 billion. Both sides in the current dispute announced in July that they had reached a tentative agreement on the employers’ contributions to pension benefits, but payments to the union health care trust fund remained a major sticking point. Union members voted overwhelmingly to reject the health care proposal offered by the chains and to authorize their leaders to call a strike. Union officials said they were responding to what they characterized as the chains’ delaying tactics when they issued the required 72-hour notice Thursday evening to cancel the contract extension under which they had been working.

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Southerners Less Likely To Visit The Dentist, Gallup Finds

September 16, 2011

Residents of Southern states are less likely to visit the dentist, indicating that their household income may be lower, according to a Gallup poll released Thursday. Slightly more than 50 percent of people living in Louisiana and Mississippi got their teeth cleaned in the last 12 months, according to the Gallup study. Massachusetts and Connecticut led the states in dental visits with about 75 percent of residents in both states reporting that they visited the dentist in the last 12 months. The ranks of the American uninsured swelled to nearly 50 million in 2010, according to Census data released earlier this week , which could mean continued bad news for Americans’ dental hygiene, the Gallup poll found. More than 70 percent of residents of the top 10 states for dental visits have health insurance compared to an average insurance rate of 56 percent for the bottom 10 states. Lacking health insurance can often be an indicator of poverty, the Gallup report said. And many Americans aren’t willing to shell out for dental insurance even in good economic times. At least 100 million Americans lacked dental insurance before the recession, according to The Washington Post . Some dentists are finding creative ways to make sure the poor and uninsured have clean teeth. The Georgia Dental Association hosted a free clinic at a church in Woodstock, Georgia last month, according to The Atlanta Journal-Constitution . Four thousand people showed up and many slept outside to get free dental care, the paper reported. Nearly 60 percent of Georgia residents saw a dentist in the last year, putting the state in the “lower range” of the country for dental visits, according to Gallup. Free dental care also drew thousands to an outdoor health clinic in an Appalachian region of Virginia last summer, according to The Washington Post . Even with the country marred in an unemployment crisis, many are flocking back to the dentist, not because they’re in any better position to afford it, but because their teeth hurt too much, according The St. Petersburg Times . The result: Patients paying more for dental care because dentists have to perform more complex procedures after years of neglect. Here’s a list of the bottom 10 states for dental visits in the last year, according to Gallup: Mississippi: 51.9 percent of residents Louisiana: 54.8 percent of residents West Virginia: 55.4 percent of residents Texas: 56.1 percent of residents Alabama: 56.3 percent of residents Kentucky: 56.3 percent of residents Arkansas: 56.6 percent of residents Oklahoma: 56.8 percent of residents Tennessee: 57.9 percent of residents Missouri: 56.8 percent of residents

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America’s Poorest States

September 15, 2011

From 24/7 Wall St.: The U.S. Census Bureau released two pieces of widely followed data Tuesday — one on poverty and the other on median income for 2010. The most interesting findings in this release were the state-by-state figures, especially when compared to national averages. A closer look at the statistics shows that a relatively small number of states suffer such widespread levels of low income and poverty that they skew the national numbers downward. The national poverty rate last year was 15.1%. That is up from 11.3% in 2000 and is the highest it has been since 1993. Over 46 million people lived below the poverty line in 2010. The cut-off for that line is households of four people who made under $22,314. The other troubling news was that median income per household nationwide was an inflation-adjusted $49,445. This is about the same as in 1989 and down 2.3% from 2009. Economists fear that Americans are not consumers. It is easy to tell why when their real income has been frozen in place for more than two decades. The problems of poverty and low income are as much local as national. The poverty rate is 21% in Mississippi. The state also has the lowest median income at $36,850. Mississippi is among the states with the worst education systems, highest obesity levels, highest unemployment, and lowest rates of health insurance coverage. The state is an economic black hole, and it shows in the way people suffer there. And, as is true with black holes, it is nearly impossible for the residents of Mississippi to escape their difficult financial situations. There is a dearth of federal programs that target specific states and cities based on local economic need. 24/7 Wall St. reviewed census data from all 50 states on median income, poverty rates, unemployment, and lack of health insurance. We then identified the ten states that have the lowest median income. We also looked at why low-income households are concentrated in these states and what, in some cases, has been done to reverse the difficult situations. These are the poorest states in America, according to 24/7 Wall St. :

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Controversial Amazon Tax Deal Approved By Lawmakers

September 10, 2011

SACRAMENTO, Calif. — Lawmakers on Friday sent Gov. Jerry Brown a compromise bill that delays California’s effort to force online retailers such as Amazon.com to collect the state’s sales taxes while retailers lobby Congress for national rules governing online sales taxes. The state Assembly approved AB155 on a bipartisan, 59-8 vote in the final hours of this year’s legislative session. The bill had passed the Senate, 36-1, hours earlier. Democratic Assemblywoman Nancy Skinner of Berkeley, one of the bill’s authors, called it a ground-breaking agreement that could help level the playing field between traditional and online retailers. “We finally will give certainty to our California businesses … that the unfair tax advantage that has been enjoyed by out-of-state online retailers will finally end,” Skinner said before the vote. “While it will not end this instant, it will end.” The compromise between lawmakers, Amazon.com and traditional retailers would delay the expanded online tax collections until at least September 2012. That would give Amazon and other retailers time to lobby Congress for national rules governing online sales taxes. AB155 would eliminate an estimated $200 million in tax revenue the state had been counting on this fiscal year. The governor has not offered an opinion. California this year joined a growing wave of states that tried to boost tax collections by expanding the definition of “physical presence” in the state to include marketing affiliates, who steer online customers to the retail site, and sister companies such as Amazon’s Silicon Valley subsidiary that developed the Kindle electronic book reader. Internet retailers said the move was illegal. Amazon cut ties to California affiliates and spent more than $5 million to gather signatures for a 2012 ballot referendum to repeal the law. Brown signed the original bill in June as part of the state budget package. Under the compromise passed Friday, Amazon agreed to resume working with its affiliates. “This bipartisan, win-win legislation will allow Amazon to bring thousands of jobs and hundreds of millions of investment dollars to California, and welcome back to work tens of thousands of California-based advertising affiliates,” Paul Misener, Amazon’s vice president of global public policy, said in a statement. Republicans who supported the compromise called it better than allowing the referendum to move forward. “It does save a very, very expensive and very divisive referendum campaign, pitting Amazon versus Wal-Mart, pitting brick and mortar versus online,” said Assemblyman Chris Norby, R-Fullerton. “They’d be trashing each other.” The debate over whether online retailers must collect taxes from customers in other states involves billions of dollars across the nation. A 1992 U.S. Supreme Court decision involving a mail-order company established that retailers only have to collect state tax if they have a physical presence in the state, such as a retail store. Customers who buy from out-of-state retailers are supposed to pay the sales and use tax directly to their home state, but few do. As Amazon and other online retailers took a larger share of the market, traditional retailers argued that the tax rules unfairly cut into their business by giving online sellers a price advantage. State and local governments also cried foul about outdated laws that never envisioned a retail store in every Web browser and cost them tax revenue. “The retailers and Amazon now go back to Washington, D.C., together to lobby for national legislation to ensure that all Internet sellers collect the taxes. So this is good,” said Senate President Pro Tem Darrell Steinberg, D-Sacramento. He said the compromise provides the state with the certainty of future revenue, even if collections are delayed until next fall. “We actually achieved peace with a delicate compromise here,” said Senate Minority Leader Bob Dutton, R-Rancho Cucamonga. AB155 would eliminate the language Brown signed until at least Sept. 15, 2012. When it does take effect, it would apply only to sellers with at least $1 million in annual sales, up from $500,000 in the law Brown signed. The amendments also would require large online retailers to notify customers that they owe state tax and provide a total amount of annual purchases potentially subject to the tax. Small online businesses criticized the compromise bill for not compelling other online retailers to collect the California sales tax. They questioned whether a federal solution will be viable. “To be clear, this is not an equitable solution for all businesses in the state,” said Rebecca Madigan, executive director of the Performance Marketing Association, Inc., a trade association. “It is, in fact, very disappointing to the 25,000 small online businesses whose incomes were devastated when the affiliate nexus tax first passed in June.” Amazon has previously dropped affiliates in Arkansas, Connecticut and Illinois after similar sales-tax collection laws were passed there. Overstock, which is based in Salt Lake City, also has shuttered its affiliate programs in several states due to the laws. Amazon does collect sales taxes in North Dakota, Kansas, Kentucky and its home state of Washington. It collects in New York, too, as it fights the state over a 2008 law, the first to consider local affiliates enough of an in-state presence to require sales tax collection. ____ Associated Press writers Judy Lin and Don Thompson contributed to this story.

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Amazon, California Lawmakers Cut A Deal

September 8, 2011

SAN FRANCISCO (Reuters) – California lawmakers rushed to write a bill to give Amazon.com Inc a one-year reprieve from collecting certain sales taxes in exchange for dropping its ballot measure campaign to undo the tax, aides said on Thursday. The bill would put in writing the terms of a “handshake” agreement reached Wednesday between representatives of the Seattle-based Internet retailer, its brick-and-mortar opponents and lawmakers in a meeting called by legislative leaders. The measure covers the collection of sales taxes on orders through its affiliates in the state. Top lawmakers called the meeting after Democrats pushing a bill to block Amazon’s ballot measure effort –, aimed at the recently enacted sales tax — concluded they would not be able to win the necessary votes from Republicans for the legislation by Friday, when the legislature’s session ends. Under terms of the deal, Amazon will drop its ballot measure campaign and begin collecting sales tax on orders made by its California shoppers next September if federal legislation on online sales taxes that applies to all states fails to take shape by the end of next July. A representative of the Amazon campaign was not immediately available to comment on the agreement, which Democrats who control the legislature are likely to support. “They get a little more time and we get this thing resolved,” an aide to state Senate President Pro Tem Darrell Steinberg said. Republicans were waiting to see the agreement’s details in print before saying whether they would support it and send the bill to Democratic Governor Jerry Brown, aides said. Lawmakers may see the legislation by Thursday evening. Amazon had recently proposed to lawmakers a hiring spree of 7,000 jobs in California if the state put the sales tax on hold for two years. The offer fell flat with Democrats, who had pressed in state budget talks earlier this year for new revenue to help balance the state’s books, which eventually required close a shortfall of $10 billion. Amazon shares lost 1.2 percent to $217.38 Thursday in Nasdaq. (Editing by Jeffrey Benkoe) Copyright 2011 Thomson Reuters. Click for Restrictions

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