N.J. Governor Chris Christie to Finally Announce Whether He Runs for President
FTSE Closes Down 2.6%
Alaska Announces Recall of Velveeta Shells ($KFT)
Alaska state officials are announcing the recall of three varieties of Velveeta Shells & Cheese microwaveable cups, saying the products possibly contain small pieces of wire bristle.
The state Department of Environmental Conservation says the products recalled by Kraft Foods Global Inc. are Shells & Cheese Original, Shells & Cheese made with 2 percent milk and Shells & Cheese Broccoli.
The products have various “best when used by” dates between March 2012 and May 2012.
DEC officials say the products were distributed in Alaska.
Officials say there have been no reports of injuries.
Comments »NY TIMES: Fannie Mae Knew as Early as 2003!
Fannie Mae, the mortgage finance giant, learned as early as 2003 of extensive foreclosure abuses among the law firms it had hired to remove troubled borrowers from their homes. But the company did little to correct the firms’ practices, according to a report issued Tuesday.
Only after news reports in mid-2010 began to describe the dubious practices, like the routine filing of false pleadings in bankruptcy courts, did Fannie Mae’s overseer start to scrutinize the conduct. The report was critical of that overseer, the Federal Housing Finance Agency, and was prepared by the agency’s inspector general.
In one notable lapse, even after the agency reported problems to Fannie Mae in late 2010 about some of the approved law firms, it did not request a response from the company, the report said.
“American homeowners have been struggling with the effects of the housing finance crisis for several years, and they shouldn’t have to worry whether they will be victims of foreclosure abuse,” said Steve Linick, inspector general of the finance agency. “Increased oversight by F.H.F.A. could help to prevent these abuses.”
The report is the second in two weeks in which the inspector general has outlined lapses at both the Federal Housing Finance Agency and the companies it oversees — Fannie Mae and Freddie Mac. The agency has acted as conservator for the companies since they were taken over by the government in 2008. Its duty is to ensure that their operations do not pose additional risk to the taxpayers who now own them. The companies have tapped the taxpayers to cover mortgage losses totaling about $160 billion.
Elijah E. Cummings, the Maryland Democrat who is the ranking member of the House Committee on Oversight and Government Reform and who requested the inspector general’s report, said in a statement, “As a member of Congress and an attorney, I find the systemic failures by F.H.F.A. and Fannie Mae to adequately oversee these foreclosure law firms to be a breach of the public trust and an assault on the integrity of our justice system.”
The new report from the inspector general tracks Fannie Mae’s dealings with the law firms handling its foreclosures from 1997, when the company created its so-called retained attorney network. At the time, Fannie Mae was a highly profitable and powerful institution, and it devised the legal network to ensure that borrower defaults would be resolved with efficiency and speed.
The law firms in the network agreed to a flat-rate fee structure and pricing model based on the volume of foreclosures they completed. The companies that serviced the loans for Fannie Mae, were supposed to monitor the law firms’ performance and practices, the report noted
After receiving information from a shareholder in 2003 about foreclosure abuses by its law firms, Fannie Mae assigned its outside counsel to investigate, according to the report. That law firm concluded in a 2006 analysis that “foreclosure attorneys in Florida are routinely filing false pleadings and affidavits,” and that the practice could be occurring elsewhere. “It is axiomatic that the practice is improper and should be stopped,” the law firm said.
The inspector general’s report said that it could not be determined whether Fannie Mae had alerted its regulator, then the Office of Federal Housing Enterprise Oversight, to the legal improprieties identified by its internal investigation.
Amy Bonitatibus, a Fannie Mae spokeswoman, declined to comment on the inspector general’s report, but said that the 2006 legal analysis identified a specific issue with the practice of filing lost-note affidavits, which the company immediately addressed.
The inspector general said that both Fannie Mae and its regulator appear to have ignored other signs of problems in their foreclosure operations. For example, the Federal Housing Finance Agency did not respond to borrower complaints about improper actions taken by law firms in foreclosures received as early as August 2009, even though foreclosure abuse poses operational and financial risks to Fannie Mae.
The report cited a media report from early 2008 detailing foreclosure abuses by law firms doing work for Fannie Mae.
Nevertheless, a few months later and just before its takeover by the government, Fannie Mae began requiring the banks that serviced its loans to use only those law firms that were in its network. By then, 140 law firms in 31 jurisdictions were in the group. Among the largest firms in the network was the David J. Stern firm in Plantation, Fla., which was handling more than 75,000 foreclosure actions a year before Fannie Mae terminated it because of vast problems with its legal work.
Finally last fall, after an outcry over apparently forged foreclosure documents and other improprieties, the Federal Housing Finance Agency began investigating the company’s process. In a report issued early this year, it determined that Fannie Mae’s management of its network of lawyers did not meet safety and soundness standards. Among the reasons: the company’s controls to prevent or detect foreclosure abuses were inadequate, as was the company’s monitoring of the law firms. “If a law firm self-reported no issues as it processed cases,” the inspector general said, “then Fannie Mae presumed the firm was doing a good job.”
The agency is still deciding how to handle the lawyer network, the inspector general said.
Mr. Cummings has asked the federal housing agency to consider terminating the program.
Officials at the housing agency agreed, however, with the recommendations in the inspector general’s report. Corinne Russell, a spokeswoman for F.H.F.A. said the agency was concluding its supervisory work in this area and would direct Fannie Mae to take necessary action when the work was completed.
In a response, the agency said that by Sept. 29, 2012, it would review its existing supervisory practices and act to resolve “deficiencies in the management of risks associated with default-related legal services vendors.”
Brazil’s Government Decides on Oil Policy
Brazil’s government is racing to forge adeal in Congress this week that it hopes will prevent a lengthy legal and political battle over its huge offshore oil reserves.
Brazil’s states and cities have been quarreling for years over how to distribute the expected multi-trillion-dollar windfall from one of the world’s biggest recent oil finds. Former President Luiz Inacio Lula da Silva called the so-called “subsalt” fields, discovered in 2007, “a gift from God” that could make Brazil a rich country.
President Dilma Rousseff’s government is now trying to defuse the arguments by offering a cut of its own take in future royalties from the fields. Officials are confident Congress will approve the government proposal in coming days or weeks.
“We’re at ease. The interested sides are hard at work … and by the looks of it, they’re forging a quite significant majority,” Gilberto Carvalho, general-secretary of the president’s office, told Reuters.
Yet some leading politicians are still balking at the proposal or threatening legal action. The final outcome is up in the air at a time when Rousseff’s relationship with Congress has been poisoned by budget cuts and other problems.
At stake is Brazil’s plan to become one of the world’s largest suppliers of oil outside of OPEC and to ensure revenue to finance improvements in infrastructure, health programs and education, which are crucial to entering the ranks of developed nations.
The final outcome will have major implications for state oil company Petrobras (PETR4.SA)(PBR.N), and possibly for multinational energy companies such as Italy’s (ENI.MI) and Norway’s Norsk Hydro (NHY.OL), who have expressed interest in helping Brazil develop the fields.
So far Brazil is pumping only a small fraction of the subsalt fields and requires tens of billions of dollars to develop the remaining reserves.
An agreement on distributing oil revenues is needed for the government to go ahead with a planned auction next year for the rights to develop the vast oil fields.
The so-called subsalt region is believed to hold more than 50 billion barrels of oil buried under a thick layer of salt. At current prices that would be about $4 trillion in revenue.
Failure to reach agreement on the bill would spark a drawn-out legal battle, potentially stalling fresh investments for several years. Without a compromise, Congress would almost certainly overrule last year’s veto by Lula of a law that would have distributed more revenue to non-producer states.
The three largest oil producing states — Rio de Janeiro, Sao Paulo and Espirito Santo — are keen to uphold the veto.
Sergio Cabral, governor of Rio de Janeiro, said he would go all the way to the Supreme Court to ensure his state’s oil income. Losing it would generate a political backlash for him and President Dilma Rousseff, Cabral warned.
“The electoral tragedy in Rio would be dramatic,” said Cabral, wary of losing cash before hosting the 2016 Olympics.
Rio de Janeiro pumps the vast majority of Brazil’s roughly 2 million barrels per day of crude.
TAX RISK
Cabral proposes hiking a separate oil excise tax, which state oil company Petrobras in turn has said would violate existing contracts and force it to go to court.
New framework legislation passed last year heightened state control over the subsalt region and made state-led oil company Petrobras (PETR4.SA). But private investors can still take a stake of up to 70 percent in joint-ventures.
Mauricio Pedrosa, a partner with asset management group Queluz Asset in Rio de Janeiro, said any changes to existing contracts would be a blow to the company.
“If the royalty agreement alters existing contracts it could affect Petrobras’ cash flow. It’s another risk factor for the company,” said Pedrosa, who helps manage around 300 million reais ($158 million in assets).
The proposal by Rousseff’s administration would cut the federal government’s cut of royalties by almost a third and distribute that to non-producer states.
Producer states like Rio de Janeiro would see a small cut.
The offer was rebuffed by some players, particularly by municipal governments, which would see the biggest losses.
“We don’t understand why the government is punishing the municipalities. We are the ones who suffer the economic and social effects of oil operations,” said Riverton Mussi, mayor of the city of Macae — the country’s main oil hub.
Mussi, who estimates Macae would lose a quarter of its annual budget under the government’s plan, also said he would defend his city’s oil income in court.
“Right now this debate is holding hostage the whole development of the sector,” said Latin America analyst Christopher Garman of the Eurasia consultancy in Washington.
Comments »Bears Hand Bulls a @Moober Upper Decker as Stocks Get Slammed
Closed on the lows of the days. Mass carnage in the risk appetite names.
Final numbers courtesy of Google.com/finance
Dow Jones 10,655.00 -258.38 (-2.37%) S&P 500 1,099.15 -32.27 (-2.85%) Nasdaq 2,335.83 -79.57 (-3.29%)Comments »
FLASH: GREASEBALL ITALIAN PROSECUTOR LOSES AS AMANDA KNOX FREED ON APPEAL
FLASH: SPRINT GOES ALL-IN ON IPHONE, COMMITS $20 BILLION
Developing…
(from Marketwatch.com)
Sprint to commit $20 bln to iPhone: WSJ
3 min ago – Wallace Witkowski
Comments »AMR Shares Plunge on Bankruptcy Talk
Shares of American Airlines parent AMR plunged on Monday, as analysts debated the prospects for a bankruptcy filing for the third-largest U.S. airline, which lags its industry peers. But the company quickly denied to CNBC that it is considering a pre-packaged bankrutptcy filing.
Comments »Rhapsody to Buy Napster from Best Buy
BLAST FROM THE PAST: HERMAN CAIN SPARS WITH BILL CINTON IN 1994 TOWN HALL
[youtube:http://www.youtube.com/watch?v=HdLGKRBJ_0E 550 412]
Comments »Report: No Decision on Next Tranche of Aid to Greece
Jean-Claude Juncker, leader of the finance ministers of the euro zone, said Monday that the group will not make a decision on a scheduled bailout payment to Greece just yet, Bloomberg reports. Last month, in putting off the decision until October, Juncker had said that Greece must meet all conditions before receiving the next tranche of financial aid.
Comments »FLASH: 55 INDICTED IN ALLEGED $250-MILLION TAX FRAUD SCHEME
A federal grand jury has indicted 55 people in San Bernardino County in connection with an alleged tax fraud scheme involving the filing of false income tax returns seeking more than $250 million in bogus refunds, authorities said Monday.
Many of the defendants are charged with conspiracy to defraud the United States and face a maximum sentence of 10 years in prison if convicted.
Others are accused of making false claims against the United States, with a maximum sentence of five years.
The IRS investigation centered on two companies: Old Quest Foundation in Fontana and De la Fuente and Ramirez and Associates in Rancho Cucamonga.
The indictment alleged a scheme by Old Quest in which more than 400 false tax returns were filed, resulting in millions of dollars in payouts, including one refund check for $1.2 million.Old Quest, accusing of preparing and filing false returns, allegedly told customers they could get hundreds of thousands of dollars in tax refunds from a “secret government account.”
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Company representatives allegedly gave presentations with people posing as attorneys, accountants, certified public accountants and former IRS employees, telling audiences that the United States was bankrupt and owned by England.
Customers were required to make “donations” of as much as $10,000 to the company and pay a percentage of the refunds they received.
The company received about $1 million from customers in the scheme, according to the indictment.
The indictments charge the owners of the company — Arturo S. Ruiz, Francisco J. Mendoza and his wife, Maria de Jesus Mendoza — along with attorneys and tax preparers who worked for them, as well as customers who received the allegedly fraudulent refunds.
Francisco Mendoza was arrested Friday, while authorities were still seeking the other two owners.
De la Fuente and Ramirez and Associates allegedly carried out a similar scheme, recruiting people at seminars and consultations and charging them $2,500 to become customers.
Owners Genaro de la Fuente, Osman Norales and Francisco Ramirez were charged, along with tax preparers, customers and a promoter.
De la Fuente has been arrested, Ramirez was to receive a summons to appear, and Norales was listed as a fugitive.
Preview of Apple’s Tuesday iPhone Event
Get ready: Tuesday is iPhone day.
Tim Cook will take the stage for the first time as Apple’s new permanent CEO Tuesday morning, replacing the recently-retired Steve Jobs to reveal the company’s newest gadgets. Cook may not be the star that Jobs has become, but sources at Apple assure me that the holiday product lineup will be the real star of the event.
The most anticipated product is the new iPhone. Rumor has it that the phone will be called the iPhone 4S, not iPhone 5. We have seen Apple do this before when its flagship phone has not been fully refreshed but rather updated incrementally. The 3G and 3GS are good examples.
Comments »SCOTUS: Non-Profits CAN Discriminate in Hiring Based on Religious Affiliations
Midday Stock Market Update
Stocks were little changed on Monday as positive U.S. economic data helped to offset fearsGreece may require increased euro zone financial assistance after news it will exceed its deficit targets.
Wall Street began the new quarter with choppy trading after falling on Friday to end its the weakest quarter since 2008. The decline was sparked in part by worries over the financial crisis in Europe and the threat of recession that could drag down economies around the world.
Greece’s draft budget sent to parliament on Monday showed Athens would miss its deficit targets for both this year and next despite harsh new austerity measures.
The revelations brought the specter of a Greece default closer as euro zone finance ministers met to discuss the next steps toward resolving thecurrency area’s sovereign debt crisis.
“This news isn’t surprising, but if Greece continues to have problems that could really drag Europe into recession, and possibly the U.S. as well,” said Randall Warren, chief investment officer of Warren Financial Service in Exton, Pennsylvania.
Stocks briefly rebounded after the Institute for Supply Management’s September manufacturing index topped consensus forecasts and the government said August construction spending unexpectedly rose.
“The data supports the minority view that things are going to get better,” Warren said. “You can’t discount that view even as the market finds it hard to believe, and that’s why things are so choppy today.”
The Dow Jones industrial average was up 24.00 points, or 0.22 percent, at 10,937.38. The Standard & Poor’s 500 Index was up 0.46 points, or 0.04 percent, at 1,131.88. The Nasdaq Composite Index was down 2.72 points, or 0.11 percent, at 2,412.68.
The S&P 500 index lost more than 14 percent in the third quarter and fell more than 7 percent in September alone.
Yahoo Inc rose 4.2 percent to $13.74 after the founder and chief executive of Chinese e-commerce company, Alibaba, expressed interest in buying the company and said he has talked with other potential buyers.
Eastman Kodak Co surged 93 percent to $1.50 after losing half its value on Friday. The photography company has hired a law firm specializing in bankruptcy but said it had no intention of filing for bankruptcy.
Pharmaceutical Product Development Inc climbed 26 percent to $32.41 after it agreed to be acquired by Carlyle Group and Hellman & Friedman for $3.9 billion in cash.
Comments »Pickups & SUV’s Help U.S. Auto Sales Rise in September
Pickups and SUVs helped accelerate U.S. auto sales in September, although carmakers remain concerned that worries about the economy could dampen demand later this fall.
General Motor Co.’s sales rose 20 percent compared with last September, led by a 34-percent rise in full-size pickups and SUV sales. Chrysler Group LLC’s overall sales rose 27 percent.
The growth built on a healthy performance in August, when new models, cheaper financing and pent-up demand lifted the industry after several disappointing months.
September truck sales benefited from falling gas prices, a need to replace aging fleets, and promotions to clear out older models from showrooms.
Sales promotions were especially helpful, according to Jeff Schuster, executive director of global forecasting for J.D. Power and Associates. GM, for example, was offering zero-percent financing and $1,000 cash on the 2011 Chevrolet Silverado 1500 pickup. Sales of the Silverado, one of America’s best-selling vehicles, rose 36 percent. Ram pickup sales were especially strong at Chrysler.
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