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U.S. stocks up on shortened Friday trading session

Diane Alter – AHN News Reporter

New York, NY, United States (AHN) – U.S. stock markets will close at 1 p.m. on Friday having many investors joking they have only a half a day to lose half as much money.

Just after the opening bell, the Dow Jones Industrial Average rose 58 points, the Standard & Poor’s 500 Index was up 7 points and the NASDAQ was better by 11 points.

Oil was down 21 cents at $95.84 a barrel, and gold was trading lower by $17 at $1,679.10 a troy ounce.

Weighing on markets were continued fears about the eurozone debt crisis. Yields on Italy’s debt neared recent highs and spooked world markets, sparking a sell-off overseas. Italy paid a record 6.5 percent to borrow money over six months on Friday. Longer term funding costs in the Italian nation soared well above levels seen as sustainable for public finances.

Investors all over the globe are frightened that economic ills in Italy, Spain, Greece and France will spill over into Germany, regarded as the most financially stable eurozone country.

With little on the economic calendar in the shortened trading session, investors were buoyed by signs that Black Friday deals will help retailers post strong profits over the Thanksgiving weekend.

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Mortgage insurance ‘kickbacks’ alleged in Supreme Court case

Tom Ramstack – AHN News Legal Correspondent

Washington, DC, United States (AHN) – The Supreme Court plans to confront consumers’ anger toward the mortgage lending industry Monday with a hearing in a lawsuit against a real estate title company.

The plaintiff, Denise Edwards, is trying to sue First American Financial Corp. in a class action lawsuit that alleges violations of the Real Estate Settlement Procedures Act.

The 1974 federal law prohibits payment of kickbacks when consumers purchase a “federally-related mortgage loan.”

Under the law, a kickback refers to payments in exchange for referrals of mortgage settlement service business.

The Supreme Court is being asked to decide whether a consumer can sue for damages when the kickbacks did nothing to raise the price of her mortgage.

In other words, how can she be compensated for damages when she might not have suffered any damages, according to the defendants.

When she bought a home in Cleveland in 2006, Edwards was referred by her settlement agent at Tower City Title Agency to First American Title Insurance Company.

First American charged Edwards a standard fee under Ohio law of $455.43.

However, no one told her that First American owned 17.5 percent of Tower City Title Agency. They also did not tell her that Tower City shared some of the income from customers who purchase mortgage insurance from First American.

Edwards filed a class action lawsuit alleging that First American’s ownership interest in Tower City, plus the fact Tower City referred customers to First American, was the same as a kickback.

If the class action lawsuit succeeds, First American customers could receive compensation of three times more than they paid for mortgage insurance, up to a half-million dollar cap.

First American claimed the case should be dismissed because Edwards’ standard $455.43 bill was unaffected by the alleged kickback. She also could not prove the quality of service she received was bad.

Edwards says that regardless of the fee she was charged, First American still violated the Real Estate Settlement Procedures Act by paying a kickback, which should be enough of a reason to get sued.

So far, Edwards has won in lower courts.

The U.S. District Court for the Central District of California denied First American’s motion to dismiss. The Ninth Circuit Court of Appeals in San Francisco affirmed the dismissal.

An “injury” that can be compensated in a lawsuit “can exist solely by virtue of statutes creating legal rights,” even if consumers cannot prove they lost money, the Ninth Circuit’s ruling said.

First American appealed to the Supreme Court.

Edwards has lined up powerful friends to support her in the hearing Monday. They include the U.S. Justice Department, which filed an amicus – or friend of the court – brief that argues Congress can create legally protected rights by passing laws intended to protect certain persons.

In Edwards’ case, Congress was trying to protect home buyers by approving the Real Estate Settlement Procedures Act.

Both Edwards and the Justice Department say filing the lawsuit as a class action might motivate mortgage companies like First American to comply with the law.

The Supreme Court case coincides with ongoing efforts in Congress to clamp down on fraud and other shady dealings by the mortgage industry.

President Barack Obama has blamed the industry for being a primary culprit in the Great Recession that began in 2008.

Easy credit terms for consumers led to numerous bad loans, which then prompted widespread home foreclosures and personal bankruptcies.

In the latest move by Congress, 15 lawmakers are asking bank regulators in the Treasury Department to publicly release information about what steps are being taken to prevent illegal foreclosures by banks. The U.S. Comptroller is investigating the bank foreclosures.

“The only way this claims process will be fair is if the regulators shine a bright light on mortgage servicers, and make them demonstrate to the public how they’re being held accountable,” said Rep. Maxine Waters (D-CA), who is leading the effort for greater “transparency” in mortgage fraud cases.

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Europe’s lust for gold continues

Diane Alter – AHN News Reporter

New York, NY, United States (AHN) – Despite rising and record prices, gold continues to shine, especially overseas. The European sovereign debt crisis has spurred a gold rush across the continent. The World Gold Council reported Thursday that investors in Europe purchased a record $6.2 billion in gold bars and coins in the third quarter.

While not a record in terms of weight, Europe’s demand for about 118 metric tons of the yellow metal in the third quarter amounts to nearly a third of all the investment grade gold demand around the world for the period. It is also a 135 percent increase in demand from Europe from the same period a year ago.

Worldwide, demand for gold bars and coins was up 29 percent from a year earlier.

The increase in demand was not deterred by record high gold prices. Prices for the precious metal surged 20 percent in July and August, and topped record highs above the $1,900 an ounce mark. It has since fallen back a bit.

While inflation worries, hedges, diversification and geopolitical factors are main drivers of gold, economic uncertainties and looming defaults of European nations were the main push behind the recent rush to gold.

And it wasn’t just investors who were paying for gold. Even foreign central banks increased their buying, adding 148.4 tons of the yellow metal in the quarter, up from 22.6 billion tons a year ago.

Some analysts question gold’s stellar run and wonder if the precious metal will continue to shine. Global demand for jewelry, which typically accounts for about two-thirds of all gold demand, fell 10 percent year-over-year and is sitting near its lowest level in 25 years. And gold supply is increasing.

But those figures don’t sway die-hard gold bugs who say the sky is the limit for gold.

On Thursday, in afternoon trading, the gold was down $47 to $1,716 a troy ounce in what some traders were calling profit taking.

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Smucker recalls two batches of chunky natural peanut butter over Salmonella concerns

Linda Young – AHN News Writer

Washington, D.C., United States (AHN) – The J.M. Smucker Co. announced a voluntary limited recall as a precaution because of salmonella fears affecting two specific Best-If-Used-By dates of 16 oz. Smucker’s Natural Peanut Butter Chunky.

“No illnesses related to this issue have been reported and the product is being recalled out of an abundance of caution for consumer safety,” company officials said in a statement.

The company launched the recall after its routine testing program indicated the possibility that salmonella bacteria could be present in the product.

Smucker said the limited recall affected that brand of its peanut butter packaged in 16 oz. jars with the following dates and codes:

  • UPC: 5150001701 (located on the side of the jar’s label below the bar code)
  • Production Codes: 1307004 and 1308004
  • Best-If-Used-By dates: Aug. 3, 2012 and Aug. 4, 2012
  • Chunky product only (not creamy)
  • Impacted product would have been purchased from Nov. 8 to 17

The affected product was distributed in the District of Columbia and 24 states, including Arkansas, Colorado, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Virginia and Wisconsin.

No other Smucker product is affected.

Salmonella is an “organism that can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea (which may be bloody), nausea, vomiting and abdominal pain.” Smucker said.

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Tension rises in New York as court backs OWS protesters

Matthew Borghese – AHN News Contributor

New York, NY, United States (AHN) – The “Occupy Wall Street” movement won major support from a New York court Tuesday, possibly extending the life of the demonstration that has spawned similar anti-establishment protests around the world.

New York Supreme Court Judge Lucy Billings, will, on paper, allow protesters to remain camped out at the privately-owned Zuccotti Park in the Big Apple.

On Tuesday, the New York Police Department (NYPD) forcibly cleared protesters from the site. Clearing the camp was the latest in a long battle between OWS and local leaders. Protesters took to the court system to protect their right to camp out. New York City Mayor Michael Bloomberg and other city officials pressed for an end to the demonstration, saying the right to free speech did not extend to a long-term occupation of a public space.

“No right is absolute and with every right comes responsibilities,” Bloomberg said. “The First Amendment gives every New Yorker the right to speak out — but it does not give anyone the right to sleep in a park or otherwise take it over to the exclusion of others — nor does it permit anyone in our society to live outside the law. There is no ambiguity in the law here — the First Amendment protects speech -’ it does not protect the use of tents and sleeping bags to take over a public space.”

“New York City is the city where you can come and express yourself. What was happening in Zuccotti Park was not that,” Bloomberg added.

Nonetheless, only hours after their eviction, a court order proclaimed the protestors could return to Zuccotti Park. Despite the ruling, police have closed off the park under Bloomberg’s orders. The city is planning a legal appeal of Billings’ ruling, citing ongoing “health and safety concerns.”

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Italian debt reaches unsustainable level

Vittorio Hernandez – AHN News

Rome, Italy (AHN) – When Italy’s debt ballooned to over $1.5 trillion, some leaders are now asking if the country has reached a point of being beyond rescue. The offer by Italian Prime Minister Silvio Berlusconi to resign from his post had failed to slow down the financial turmoil.

Another indicator that Italy’s debt has reached unsustainable level is that the interest rate on Italian bonds hit 7 percent which is the same rate that smaller eurozone economies such as Ireland, Portugal and Greece reached and needed a rescue. At one point, the rate even reached 7.5 percent.

Because of the impact of the problematic eurozone members on the whole single currency area, instead of kicking out Greece and eventually Italy from the zone, Germany and France reportedly are scouting for ways to leave the currency.

Even non-eurozone members such as Britain are affected by the debt crisis that the United Kingdom faces a threat of a double dip recession before the end of 2011. Because of the impact of the Greek and Italian debt crisis on Britain, British Prime Minister David Cameron urged the leaders of the two nations to get on top of their countries’ debts and deficits.

Cameron also suggested putting in place the largest possible firewall, which is what the European Financial Stability Facility was supposed to be. However, lack of interest failed among the markets failed to boost the fund’s firepower.

Amid the political and financial turmoil besetting Italy, the Italian stock market lost 4 percent of its value, the FTSE 100 index closed 106.96 points down at 5460.38 and the Dow Jones closed 389 points down at 11,780.94.

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Obama’s foreign policy authority disputed in Supreme Court case

Tom Ramstack – AHN News Legal Correspondent

Washington, D.C., United States (AHN) – The Supreme Court stepped into the fray Monday over whether Jerusalem is an international city or exclusively the property of Israel. The outcome of the dispute is likely to redefine which branch of the U.S. government has final authority over some issues of foreign policy.

The lawsuit that prompted oral arguments before the Supreme Court Monday involved a passport for a boy born in 2002 to American parents in Jerusalem.

When his parents went to the U.S. Embassy in Tel Aviv to get a passport for their newborn, they asked that his country of birth be listed as Israel.

The embassy staff refused, citing State Department policy. Instead, they wrote in Jerusalem.

A month before the boy, Menachem Zivotofsky, was born, Congress had passed a law ordering the State Department to list Israel as the country of birth for all U.S. citizens born in Jerusalem.

However, the State Department is part of the executive branch of government, not Congress. Under the Constitution, the president and his administration decide foreign policy.

The Supreme Court seeks to resolve the difference of opinion.

Nathan Lewin, attorney for the Zivotofskys, told the Supreme Court Monday the case should not be defined as political. Instead, American citizens born in Jerusalem should be allowed to have the identification they prefer on their passports.

“This is not a recognition case, this is a passport case,” he said. “We live in a system in which Congress passes the laws and the president is the instrument of foreign policy.”

Equally important is how the case could affect Mideast politics.

Israel claims Jerusalem as its capital despite the fact the United Nations and many countries refuse to recognize it.

East Jerusalem consists predominantly of Muslims while West Jerusalem is populated mostly by Jews. The 6,000-year-old city is the birth place of three major religions: Judaism, Christianity and Islam.

Israel claimed the western part of the city since 1948 while Jordan says it annexed the eastern part of the city.

The Israelis took control of the entire city after the 1967 Six Day War. They base their government there, but no foreign embassies are located in Jerusalem.

Disputes over who should control Jerusalem remain a core issue in Mideast conflicts.

President Barack Obama acknowledged the tense standoff in a May 2010 speech on the Mideast peace process when he said, “Two wrenching and emotional issues remain: the future of Jerusalem, and the fate of Palestinian refugees.”

So far, the State Department has tried to walk a middle ground when granting passports to children of Americans born in Jerusalem.

Their country of birth is listed as Jerusalem, despite the fact no one claims the city as a nation.

The Zivotofskys say in their lawsuit the policy should be changed.

The State Department says in its brief before the Supreme Court that foreign affairs, such as the status of passports, are a “political question” that fall under the “exclusive power” of the presidency.

“A passport is an official instrument of foreign policy through which the United States addresses foreign nations,” the State Department’s brief says.

Congress can enact passport legislation but the Constitution reserves foreign policy issues such as “the recognition of foreign states and their territorial sovereignty” to the presidency, the State Department’s brief says.

The Zivotofskys have framed their case around one simple request to the Supreme Court. They want the Supreme Court to tell the Obama administration to enforce the law approved by Congress.

In other words, their son’s passport should say he was born in Israel, not Jerusalem.

The president has exclusive authority over a “political question” only in cases “in which Congress has failed to set standards,” the Zivotofskys’ brief says.

Congress set the standard for passports of American citizens born in Jerusalem with the law it approved a month before their son’s birth, the Zivotofskys say.

About 50,000 American citizens were born in Jerusalem.

The Zivotofskys drew support in amicus briefs from several Jewish organizations, 28 senators and 11 members of the House of Representatives.

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Greek cabinet supports Papandreou’s referendum plan, markets fall in panic

Vittorio Hernandez – AHN News

Athens, Greece (AHN) – The Greek cabinet supported on Tuesday Prime Minister George Papandreou’s plan to submit the European Union (EU) debt deal to citizens although the rescue package may place the country in a worse financial situation.

Papandreou said the referendum results will represent a clear mandate on how Greeks want the government to approach the country’s debt problem and future use of the euro currency. Papandreou promised to abide by the referendum results.

Prior to the referendum, Papandreou’s Socialist Party will submit itself to a confidence vote before the Parliament on Friday.

European leaders were surprised with Papandreou’s plan to submit the debt deal to a referendum vote. The French and German governments, which are the largest holders of Greek debts, wanted the rescue deal implemented at the soonest possible time.

News of a referendum, which would likely reject the deal because it carries another round of austerity measures, sent markets to panic and the European debt crisis back to square one after a week of intense EU leaders’ meeting in Brussels.

The FTSE closed down 2.2 percent at 5421 after it initially declined 5 percent. Both the German Dax and French Cac indices dipped 5 percent at closing time, and the Dow Jones closed down by almost 2.5 percent.

French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet with EU and International Monetary Fund officials on Wednesday in Cannes. Papandreous will also meet with Merkel and Sarkozy on the sidelines of the G20 Summit in France.

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RCMP recovers $2.6 million cash tossed into sea by BC man

Vittorio Hernandez – AHN News

Vancouver, British Columbia, Canada (AHN) – The Royal Canadian Mounted Police (RCMP) have recovered $2.6 million in cash thrown by a British Columbia man from a small boat off Vancouver Island. The amount is considered one of the largest cash confiscations in the RCMP’s history.

The man tossed the cash, which was inside a suitcase, when the RCMP approached the man’s boat. Mounties later plucked the suitcase from the water.

The RCMP, which showed the money – wrapped in plastic – and disclosed the incident on Tuesday, said the incident happened on March 24 near the U.S.-Canadian border known for smuggling. The Mounties said they had to wait several months before they made public the incident because it needed to follow up on matters concerning the case.

The suspect, 44-year-old Jeffrey Melchior of Lake Cowichan, was charged with possession of property obtained by crime and money laundering. He is scheduled to appear in court in Victoria on Nov. 21.

According to the Canadian Center for Justice Statistics, the number of money-laundering crimes in the country has gone up in the past 10 years and law enforcers have difficulty in finding and arresting the money launderers.

The RCMP estimate is that between $5 billion and $15 billion is laundered in Canada yearly, mainly through the financial system. However, a Statistics Canada report said the police were able to identify money-laundering suspects only 18 percent of the time.

Only one third of the cases resulted in a guilty verdict compared to two-thirds success in ordinary crimes.

The StatsCan study said money-laundering crimes rose fivefold between 2004 and 2006 but have leveled off since then. In 2009, the RCMP recorded 525 money laundering incidents in Canada.

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Wizards among teams hit hard by latest NBA schedule cancelation

AHN Sports Staff

Washington, DC, United States (AHN Sports) – The Washington Wizards saw their first 14 games of the season scrapped after NBA commissioner David Stern cancelled two more weeks from the 2011-2012 season schedules due to the extended labor lockout.

The Wizards took a huge blow in the latest labor dispute development, losing nine more games in their schedule after the NBA eliminated another two weeks from the 2011-2012 regular-season.

The Wizards, who have now lost a total of 14 games, will miss out six road games, including a four-game West Coast trip, and three home games.

Wizards players will be losing around $7.42 million worth of paychecks, while all NBA players are going to lose an estimated $400 million due to the cancellation of the first month of the season.

“I’m just reflecting the calendar,” Stern told the Washington Post Saturday. “I mean, there’s just — you need 30 days to play, and so the last two weeks of November are gone. It’s already getting to be November 1. The calendar takes care of our games. These are not punitive announcements, these are calendar-generated announcements.”

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