Treasury sells 30-year bonds at record lows

Diane Alter – AHN News Reporter

New York, NY, United States (AHN) – The U.S. Treasury Department sold $13 billion in 30-year bonds Wednesday at a record low yield of 2.925 percent.

Despite the debt security having the lowest yield on record, investors in the U.S. and around the world still have a hearty appetite for the long bond.

Bidders offered to buy 3.05 times the amount of debt sold, compared to an average of 2.81 times at the last four comparable auctions.

Indirect bidders, those that include global central banks, bought 32.5 percent of the sale, compared to 36.1 percent on average.

Direct bidders–domestic money managers–purchased another 21.2 percent, versus an average of 19.5 percent.

Following the oversubscribed and highly successful auction, the broader bond market continued the rally.

Yields on 10-year notes, which move in the opposite direction to prices, fell 5 basis points to 1.92 percent.

Article © AHN – All Rights Reserved

View full post on All Stories

U.S. cautious in reaction to death, succession in North Korea

Tejinder Singh – AHN News Correspondent

Washington, DC, United States (AHN) – Officials across the U.S. government reacted with caution Monday to the weekend death of North Korean dictator Kim Jong Il, instead collectively conveying America’s unwavering commitment to South Korea.

Defense Secretary Leon E. Panetta spoke with South Korean Defense Minister Kim Kwan-jin about the death of North Korean dictator Kim Jong Il in a 15-minute telephone call Monday morning, Pentagon press secretary George Little told journalists.

“The secretary conveyed to Mr. Kim the strong commitment of the United States to peninsular stability and to our alliance,” he said. “He made it clear that the United States stands with Korea in this time of uncertainty.”

“Both men agreed that it was critical to remain prudent with respect to all matters related to our security posture there, and pledged to keep one another informed in the coming days,” read a statement from the Pentagon.

Panetta was briefed on Kim’s death immediately after word reached the outside world over the weekend, Little said.

“He has been closely monitoring the situation ever since,” Little said. “He has been in contact with senior officials here in the department.”

Little said there was “no truth” to rumors that Americans would be evacuated from South Korea as a caution. He also denied there would be any increase in force protection for U.S. forces in Korea or that any unusual military movements had been detected after the death of the North Korean dictator.

The press secretary said there had been no movement of the 36,000 U.S. service members stationed in South Korea.

On the announcement from North Korean officials that Kim’s son, Kim Jong Un, will take over the isolated country, Little said, “I wouldn’t comment on the particulars of succession at this stage.”

“Obviously, we are closely monitoring the succession process. The North Koreans are in a period of mourning at this point, and that being said, the military does exercise a prominent role in North Korea, but I wouldn’t want to speculate at this stage,” added the spokesman.

Defense department officials, along with their South Korean counterparts, believe that a North Korean missile test conducted earlier on Monday was pre-planned and not connected to Kim’s death, a senior Pentagon official said on background.

Later, Secretary of State Hillary Clinton, in a joint press conference with Japanese Foreign Minister Koichiro Gemba, said “We both share a common interest in a peaceful and stable transition in North Korea, as well as in ensuring regional peace and stability.”

The Japanese official echoed Clinton’s sentiments. “We share the recognition that it is important to make sure that the latest events would not negatively affect the peace and stability on the Korean Peninsula,” added Gemba. Citing the situation in North Korea, Gemba said, “Secretary Clinton and I reaffirmed to continue to make frequent contact with each other.”

Former Republican presidential candidate and U.S. Sen. John McCain, in a statement, said the world was “a better place now that Kim Jong-il is no longer in it.”

“For more than six decades, people in North Korea have been consigned to lives of dire poverty and cruel oppression under one of the most totalitarian regimes the world has ever known,” said, McCain. “I can only express satisfaction that the Dear Leader is joining the likes of Qaddafi, Bin Laden, Hitler, and Stalin in a warm corner of hell.”

Human rights activists called the death of Kim Jong Il an unprecedented opportunity for North Korea’s new leaders, including Kim Jong Un, to turn a new page on the human rights situation in the country and put an end to widespread and systematic violations.

“North Korea remains a closed country and access is therefore urgently needed for independent and neutral human rights monitors, in particular the UN Special Rapporteur for Human Rights in North Korea and international humanitarian organizations,” said Souhayr Belhassen, president of the International Federation for Human Rights.

The International Coalition to Stop Crimes against Humanity in North Korea (ICNK) urged DPRK leaders to “immediately put an end to practices such as forced labor, forced abortion of returnees, torture or executions, close all kwan-li-so (political prisoners’ camps) and release all political prisoners and abductees.”

Benedict Rogers, East Asia team Leader at Christian Solidarity Worldwide, commented, “While there may be a period of uncertainty and instability in the days ahead, the international community should ensure that the severe human rights and humanitarian crisis in North Korea is placed firmly on the agenda alongside security and political concerns.”

Article © AHN – All Rights Reserved

View full post on All Stories

HHS gives states flexibility on health law’s ‘essential benefits’

United States (KaiserHealth) – States will be given wide latitude to decide what “essential benefits” insurers must offer in policies offered on new health exchanges come 2014, the Obama administration said Friday in a move that pushes off final federal rules on those benefits until sometime next year.

Instead of one national standard, states will be able to design benchmark plans based on one of four choices: The benefits offered in one of the three largest federal employee plans (by enrollment), one of the three largest plans offered to their state employees, one of the three largest small-business plans in the state or the plan offered by the largest HMO in the state.

Those benefits, which must be offered by insurers in most policies sold to individuals and small businesses, are one of the key flash points in the federal health law. Patient advocates have called for a broad national standard covering a wide range of treatments, while business groups say affordability must be a top consideration, even if it means a more limited package.

Because state employee plans and policies sold in the states can vary widely, the move means there will likely not be one national standard benefit package, but rather “benchmark” plans in each state. That gives states the flexibility they had called for, but also means coverage will vary.

Rather than issue a proposed regulation, the administration chose to advise the states through a “pre-rule bulletin,” which does not have the force of law. But neither can it be quashed by Congress, as could a rule. By putting out the choices as a form of guidance, the administration also does not have to provide definitive economic estimates of the proposal or determine its regulatory impact on small businesses.

“Now, no one can say they put out a rule that costs umpteen billion dollars, but they floated something to give states an idea of what to expect’,” said Robert Laszewski, a former insurance executive and head of the consulting firm Health Policy and Strategy Associates in Alexandria, VA.

– Provided by Kaiser Health News.

Article © AHN – All Rights Reserved

View full post on All Stories

Moody’s downgrades top three French banks

Linda Young – AHN News Writer

Paris, France (AHN) – Moody’s announced Friday it was downgrading the credit rating of all three of France’s top banks because of the difficulty they have borrowing money.

Credit Agricole and BNP Paribas went down one notch from a Aa2 rating to Aa3, which is the fourth-highest investment grade rating. Societe Generale fell from Aa3 to A1, the fifth-highest rating. The best rating a bank can get is AAA.

BNP is the largest bank, Societe Generale is second and Credit Agricole is third.

The credit rating agency also gave each of the three a negative outlook and warned that it might downgrade them again.

Moody’s said that not only had liquidity and funding conditions deteriorated at each of the banks, but that it was likely the situation would become worse because of further funding pressures from the European debt crisis, which has deteriorated.

The ratings cuts for these three banks follow Moody’s previous downgrades in September of Credit Agricole and Societe Generale.

Part of the problem with liquidity comes from the fact that many money market funds in the United States have refused to lend to European banks since the summer. That has made it difficult for eurozone banks to maintain borrowing in U.S. dollars.

The European Central Bank on Thursday announced new measures to make sure that eurozone banks do not run out of cash.

During the past few months, both BNP and Societe Generale announced asset sales aimed at reducing their reliance on short-term wholesale funding.

However, Moody’s cautioned that if too many European banks try to sell assets at the same time it would depress their value and result in selling them at a loss.

Article © AHN – All Rights Reserved

View full post on All Stories

Skip the raw cookie dough–always, scientist warns

Diane Alter – AHN News Reporter

New York, NY, United States (AHN) – Come on. Fess up.

You always sneak a sample of the raw cookie dough and savor licking the sticky, sweet, battered spoon.

Well, new research warns that you should put the spoon in the sink for a good washing, and resist the temptation for a taste of the gooey treat. According to a new report from the Centers for Disease Control and Prevention, nasty and potentially harmful germs lurk in ready-to bake cookie dough.

The findings say raw cookie dough caused 77 people in 30 states to become sick in 2009; 35 got so ill they required hospitalization.

After learning of the outbreak, the researchers tested 36 healthy volunteers to 36 people sickened by the deadly strain of E coli in 2009. They were able to determine that raw cookie dough consumption was the one thing the ailing 36 all had in common.

The investigation resulted in the recall of 3.6 million packages of cookie dough. The manufacturer of the cookie dough was not named in the report.

And contrary to popular belief, the culprit is thought to be flour, not eggs, butter, molasses or sugar. Flour does not go through the special processing to destroy pathogens that other ingredients do.

If you still have a yen for raw cookie dough, eat cookie dough ice cream. The cookie dough in the frozen dessert is designed to be eaten raw, experts note.

Article © AHN – All Rights Reserved

View full post on All Stories

Presidential Pardons Heavily Favor Whites

ProPublica Staff

Washington, DC, United States (ProPublica) – by Dafna Linzer and Jennifer LaFleur

First of two parts. This story was co-published with The Washington Post.

White criminals seeking presidential pardons over the past decade have been nearly four times as likely to succeed as minorities, a ProPublica examination has found.

Blacks have had the poorest chance of receiving the president’s ultimate act of mercy, according to an analysis of previously unreleased records and related data.

Current and former officials at the White House and Justice Department said they were surprised and dismayed by the racial disparities, which persist even when factors such as the type of crime and sentence are considered.

“I’m just astounded by those numbers,” said Roger Adams, who served as head of the Justice Department’s pardons office from 1998 to 2008. He said he could think of nothing in the office’s practices that would have skewed the recommendations. “I can recall several African Americans getting pardons.”

The review of applications for pardons is conducted almost entirely in secret, with the government releasing scant information about those it rejects.

ProPublica’s review examined what happened after President George W. Bush decided at the beginning of his first term to rely almost entirely on the recommendations made by career lawyers in the Office of the Pardon Attorney.

The office was given wide latitude to apply subjective standards, including judgments about the “attitude” and the marital and financial stability of applicants. No two pardon cases match up perfectly, but records reveal repeated instances in which white applicants won pardons with transgressions on their records similar to those of blacks and other minorities who were denied.

Senior aides in the Bush White House say the president had hoped to take politics out of the process and avoid a repetition of the Marc Rich scandal, in which the fugitive financier won an eleventh-hour pardon tainted by his ex-wife’s donations to Democratic causes and the Clinton Presidential Library.

Justice Department officials said in a statement Friday that the pardon process takes into account many factors that cannot be statistically measured, such as an applicant’s candor and level of remorse.

“Nonetheless, we take the concerns seriously,” the statement said. “We will continue to evaluate the statistical analysis and, of course, are always working to improve the clemency process and ensure that every applicant gets a fair, merit-based evaluation.”

Bush followed the recommendations of the pardons office in nearly every case, the aides said. The results, spread among hundreds of cases over eight years, heavily favored whites. President Obama — who has pardoned 22 people, two of them minorities — has continued the practice of relying on the pardons office.

“President Obama takes his constitutional power to grant clemency very seriously,” said Matt Lehrich, a White House spokesman. “Race has no place in the evaluation of clemency evaluations, and the White House does not consider or even receive information on the race of applicants.”

The president’s power to pardon is enshrined in the Constitution. It is an act of forgiveness for a federal crime. It does not wipe away the conviction, but it does restore a person’s full rights to vote, possess firearms and serve on federal juries. It allows individuals to obtain licensing and business permits and removes barriers to certain career opportunities and adoptions.

To assess how the pardons office selects candidates for pardons, ProPublica interviewed key officials, obtained access to thousands of pages of internal documents and used statistical tests to measure the effects of race and other factors on the outcome.

From 2001 to 2008, Bush issued decisions in 1,918 pardon cases sent to him by the Justice Department, most involving nonviolent drug or financial crimes. He pardoned 189 people – all but 13 of whom were white. Seven pardons went to blacks, four to Hispanics, one to an Asian and one to a Native American.

Fred Fielding, who served as Bush’s White House counsel, said the racial disparity “is very troubling to me and will be to , because we had no idea of the race of any applicant.”

“The names were colorblind to us,” Fielding said, “and we assumed they would be at all levels of clemency review.”

Beginning in September 2010, the Justice Department was required to make available the names of people denied pardons. Bush’s pardon decisions were selected to examine the impact of the pardons office’s recommendations over a president’s full term and to test how well the office met the president’s goal of assuring fairness in the process.

The department does not reveal race or any additional information that would identify an applicant, citing privacy grounds. To analyze pardons, ProPublica selected a random sample of nearly 500 cases decided by Bush and spent a year tracking down the age, gender, race, crime, sentence and marital status of applicants from public records and interviews.

In multiple cases, white and black pardon applicants who committed similar offenses and had comparable post-conviction records experienced opposite outcomes.

An African American woman from Little Rock, fined $3,000 for underreporting her income in 1989, was denied a pardon; a white woman from the same city who faked multiple tax returns to collect more than $25,000 in refunds got one. A black, first-time drug offender — a Vietnam veteran who got probation in South Carolina for possessing 1.1 grams of crack – was turned down. A white, fourth-time drug offender who did prison time for selling 1,050 grams of methamphetamine was pardoned.

All of the drug offenders forgiven during the Bush administration at the pardon attorney’s recommendation – 34 of them – were white.

Turning over pardons to career officials has not removed money and politics from the process, the analysis found. Justice Department documents show that nearly 200 members of Congress from both parties contacted the pardons office regarding pending cases. In multiple instances, felons and their families made campaign contributions to the lawmakers supporting their pleas. Applicants with congressional support were three times as likely to be pardoned, the statistical analysis shows.

In reviewing applicants, pardon lawyers rely on their discretion in ways that favor people who are married and who have never divorced, declared bankruptcy or taken on large amounts of debt. The intent, officials say, is to reward people who demonstrated “stability” after their convictions. But the effect has been to exclude large segments of society.

The ProPublica data show that applicants whose offense was older than 20 years had the best odds of a pardon. Married people, those who received probation rather than prison time, and financially stable applicants also fared better. When the effects of those factors and others were controlled using statistical methods, however, race emerged as one of the strongest predictors of a pardon.

The most striking disparity involved African Americans, who make up 38 percent of the federal prison population and have historically suffered from greater financial and marital instability. Of the nearly 500 cases in ProPublica’s sample, 12 percent of whites were pardoned, as were 10 percent of Hispanics.

None of the 62 African Americans in the random sample received a pardon. To assess the chances of black applicants, ProPublica used the sample to extrapolate the total number of black applicants and compare it with the seven blacks whom Bush pardoned. Allowing for a margin of error, this yielded a pardon rate of between 2 percent and 4 percent.

– Provided by ProPublica.org

Article © AHN – All Rights Reserved

View full post on All Stories

Prosecutors seek 15-20 years in prison for Blagojevich

Matthew Borghese – AHN News Contributor

Chicago, IL, United States (AHN) – Former Illinois governor and now convicted felon Rod Blagojevich is back in court as lawyers argue over his sentencing. In one week, U.S. District Judge James Zagel will sentence Blagojevich in the final act of his fall from the governor’s mansion’s grace.

Prosecutors are calling for a long prison term in a 21-page sentencing brief filed before the court. Assistant U.S. Attorney Reid Schar says the former governor belongs behind bars for between 15 to 20 years.

“[Blagojevich], has refused to accept any responsibility for his criminal conduct and, rather, has repeatedly obstructed justice and taken action to further erode respect for the law,” according to the prosecutorial filing, obtained by the Chicago Tribune. “While the government is not unsympathetic to the plight that Blagojevich, like many criminals, has inflicted upon his family through his criminal acts, Blagojevich has nobody to blame but himself for the criminal conduct in which he engaged.”

“Blagojevich has done his best to undermine the legitimacy of the proceedings against him in this case, further demonstrating he does not respect the rule of law,” the prosecutors added.

But defense attorneys say his public disgrace is punishment enough in a 72-page reply filing, and argue he deserves to spend just 51 months (4 1/4 years) in prison. Blagojevich’s lawyers told the court that their client has already suffered “personal ruination, public scorn and criminal conviction.”

“Despite a strong and seemingly defiant exterior, no one is more acutely aware of the tragedy that has become of his life’s work and aspirations as is Mr. Blagojevich himself,” the defense added.

Article © AHN – All Rights Reserved

View full post on All Stories

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.

Article © AHN – All Rights Reserved

View full post on All Stories

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.

Article © AHN – All Rights Reserved

View full post on All Stories

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.

Article © AHN – All Rights Reserved

View full post on All Stories