Grand Theft Economics
Grant McCool and Michael Erman
Reuters
Wed, 11 Nov 2009 19:56 EST
New York - Two former Bear Stearns hedge fund managers were found not guilty of fraud, a decision that could make government prosecutors less likely to bring criminal charges against Wall Street executives for their role in the financial crisis.
The case -- the first major prosecution arising from the meltdown of major U.S. financial institutions -- was seen as a litmus test of whether a jury, presented with evidence from emails between money managers and conference calls with investors, would convict individuals for corporate collapses.
Ralph Cioffi, 53, and Matthew Tannin, 48, were acquitted of all charges on the second day of deliberations by a jury in U.S. District Court in Brooklyn, New York. Cioffi and Tannin left the courthouse with their smiling wives and relatives, some of them crying tears of relief.
Cioffi and Tannin managed two funds, crammed with subprime mortgage-backed securities, that lost institutional and individual investors a total of $1.6 billion when the funds collapsed in mid-2007 at an early phase of the Wall Street market meltdown.
The jury on Tuesday acquitted both men of conspiracy, securities fraud and wire fraud -- charges brought in a June 2008 indictment. Cioffi was acquitted of an additional charge of insider trading.
Andrew Martin and Lowell Bergman
New York Times
Wed, 11 Nov 2009 19:49 EST
Banks are struggling to make money in the credit card business these days, and consumers are paying the price. Interest rates are going up, credit lines are being cut and a variety of new fees are being imposed on even the best cardholders.
One recipient of new credit card terms is Anita Holaday, a 91-year-old in Florida, who received a letter last month from Citibank announcing that her new interest rate was 29.99 percent, an increase of 10 percentage points.
"I think it's outrageous they pursue such a policy," said Susan Holaday Schumacher, Ms. Holaday's daughter, who pays her mother's bills. "That rate is shocking under any circumstances."
While the average interest rates charged by banks are lower than Ms. Holaday's, her situation is not all that unusual. The higher rates and fees reflect the grim new realities of the credit card industry - the percentage of uncollectible balances has hit a record even as a new law may further limit the cards' profitability.
Jesse Jackson
Chicago Sun-Times
Tue, 10 Nov 2009 19:24 EST
Black Unemployment Tops 40 Percent
Unemployment has soared above 10 percent, but that figure doesn't count those forced to work part-time, those who have given up in despair, young people who were never able to get hired. There are now 25 million people unemployed.
For African Americans, it is worse. African Americans are experiencing a silent depression. Unemployment is more than 18 percent; underemployment even higher. And among black teens, unemployment is more than 40 percent.
This is combined with a staggering loss of wealth among what was the emerging African-American middle class -- a group devastated by the collapse of the housing bubble. African-Americans were prime targets of mortgage companies peddling misleading mortgages, with low entry rates, hidden fees and exploding interest-rate escalation clauses. Having redlined urban areas for decades, mortgage brokers then targeted them for subprime mortgages. Too many families aspiring to own their own homes assumed that their jobs were secure and that they could always remortgage after their low entry rates expired -- and got caught.
Andrew Cockburn
Counter Punch
Wed, 11 Nov 2009 19:15 EST
" Those who respect the law and love sausage should watch neither being made."
-- Mark Twain.
AMENDMENT TO THE PETERSON SUBSTITUTE FOR H.R. 3795 (a) OFFERED BY MR. PETERSON OF MINNESOTA (b) Page 21, after line 25, insert the following:
(19) by adding at the end the following:
''(50) ALTERNATIVESWAP EXECUTIONFACILITY. (c). - The term 'alternative swap execution facility' means a service that facilitates (d) the execution ortrading of swaps between two persons through any means of interstate commerce, but which is not a designated contract market (e), including any electronic trade execution or confirmation facility (f) or any voice brokerage facility (g).''
Now let's see what went into this legislative sausage.
Carolyn Said
San Francisco Chronicle
Wed, 11 Nov 2009 16:27 EST
© Unknown
Once it seemed like a radical idea: Let delinquent borrowers stay in their homes as renters after foreclosure.
Last week it gained legitimacy when housing giant Fannie Mae said it would do just that, offering one-year leases at market rates to people who sign over their homes as a deed in lieu of foreclosure. Voluntarily surrendering homes instead of having the lender repossess them doesn't wallop the borrowers' credit as much.
Fannie Mae wouldn't say how many homeowners it expects to qualify for the program, but it has backed plenty of struggling borrowers. The total "nonperforming" loans in its portfolio hit $198.3 billion in the third quarter, it said in financial results released last week.
Now housing advocates and some political leaders say the concept should be expanded further. They hope the government will prod banks to follow Fannie Mae's lead, and they propose leases of three to five years followed by the option to buy back the home. With millions of homeowners nationwide behind on mortgage payments, the potential pool could be enormous.
Sangwon Yoon
Reuters
Wed, 11 Nov 2009 07:17 EST
Jewish American math teacher Goldie Burdetsky never expected to find herself working the front desk of a hotel in southern Israel alongside management interns young enough to be her children.
"I mean, for God's sakes, I have a master's degree in education," said the 55-year-old New Yorker. "I expected to be able to find a teaching job in the U.S. without any problems. But I couldn't."
Burdetsky decided to escape the dire economic situation back home, by coming to Israel on a program that offers Jews free housing, Hebrew classes, training, and work experience -- all of which translate into temporary financial respite.
As the unemployment rate in the U.S. climbed to a 26-year high of 10.2 percent last month, growing numbers of young and adult American Jews were arriving in Israel to inexpensively "wait out" the economic lull.
In an attempt to lure diaspora Jews to make Israel their permanent home, the Israeli government and Jewish organizations offer a multitude of scholarships and travel grants, allowing many to spend up to six months in Israel almost for free.
Xinhua
Wed, 11 Nov 2009 07:30 EST
Credit Agricole S.A. banking group, France's third largest bank by market value, reported a 21-percent decline in net income for the July-September period on Wednesday.
The Paris-based bank had net income of 289 million euros (432.3million U.S. dollars), a 21 percent drop from 365 million euros (547 million dollars) in the same period last year, the bank said.
The bank's investment branch lost 99 million euros (148.3 million dollars) in the quarter due to write-downs on asset-backed securities and debt and loan obligations.
Meanwhile, Credit Agricole suffered a 417 million euros (624.9 million dollars) loss from international retail banking, although the French retail network grew 63 percent to 222 million euros (332.7 million dollars).
Barry Grey
World Socialist Website
Tue, 10 Nov 2009 07:08 EST
Last Wednesday the Federal Reserve Board's policy-making Federal Open Market Committee announced it was holding its target federal funds interest rate to the current level of zero to 0.25 percent. While that decision had been widely anticipated, there was much speculation that the Fed would employ language in its announcement to indicate that it would soon begin to raise interest rates.
In the event, the Fed repeated its recent mantra of keeping interest rates "exceptionally low" for "an extended period of time." A change in the formula from "an extended period of time" to "for some time" would have been seen as a signal that the Fed was preparing to shift from its policy of near-zero rates.
The Fed's signal of no early end to its extraordinarily cheap credit policy sent stock markets surging. Since the Fed announcement last Wednesday, the Dow Jones Industrial Average has surged hundreds of points, despite Friday's dire Labor Department report of an official US jobless rate of 10.2 percent. On Monday, the Dow Jones Industrial Average gained 205 points, closing at a 13-month high of 10,227.
PhysOrg
Tue, 10 Nov 2009 21:00 EST
© Adobe
Adobe logo
Adobe Systems, known for its Photoshop editing program and Acrobat document software, announced on Tuesday it was cutting some 680 jobs worldwide, about nine percent of its workforce.
Adobe, in a filing with the US Securities and Exchange Commission (SEC), said it would incur between 65 million dollars and 71 million dollars in restructuring charges because of the layoffs.
Adobe said the jobs being cut only involve employees who were with the San Jose, California-based company ahead of its October acquisition of Web analytics firm Omniture Inc.
Adobe, which employed 7,564 people worldwide at the end of August, also produces the Flash and Shockwave software used in many games and Internet applications.
Karl Denninger
Market Ticker
Tue, 10 Nov 2009 15:30 EST
Yet more BS Fedspeak, this time in the
mainstream media:
In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.
That's because there is no real economic recovery at all.
So why is the stock market up so much?
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