Detroit’s last effort to avoid emergency manager

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Although Mayor Dave Bing has repeatedly said he doesn’t want to be the city’s emergency manager, he would essentially become one under a new proposed consent agreement that he and city council staffers privately are hammering out this week.

Under the 26-page draft, obtained today by the Free Press, Bing proposes taking over many of the responsibilities of a nine-member financial advisory board that Gov. Rick Snyder wanted to assume control of most of the city’s finances.

Incensed that Snyder’s proposed consent agreement strips elected officials of many of their responsibilities, Bing and the council drafted their own version following private, individual meetings between his office and the council’s staff.

The draft would grant the mayor powers of an emergency manager, except that of being able to terminate union contracts.

Under the draft proposal, Bing would be empowered to unilaterally lay off employees, close departments, end services, terminate outside contracts and appoint a chief operating officer, chief financial officer and human services director — all tasks that belonged to the financial advisory board under Snyder’s proposal.

Council, which would lose virtually all of its authority under Snyder’s proposal, would have the authority to approve the budget and would have more say in who serves on the financial advisory board.

Geneva, Switzerland (CNN) — Iran says it wants more clarity from the IAEA before it allows inspectors into the Parchin military complex south of Tehran, one of Iran’s most influential officials said Wednesday.

Iran denies it conducted any nuclear experiments there, even though it is suspected of having tested explosives for a nuclear device in the early 2000s. High-level diplomats told CNN’s Christiane Amanpour it’s believed Iran abruptly stopped any work toward weaponizing its nuclear program after 2003. But weapons inspectors want to make sure.

“If the Western community is asking us for more transparency, then we should expect more cooperation,” said Mohammad Javad Larijani, a member of a powerful political clan in Iran and an adviser to the country’s supreme leader, Ayatollah Ali Khamenei.

International powers have agreed to resume nuclear talks with Tehran in the pursuit of a diplomatic solution to the tensions over Iran’s controversial nuclear program amid saber rattling in Israel about the possible need for a pre-emptive strike.

Washington (CNN) — Federal health officials on Thursday are unveiling a $54 million national media campaign to get smokers to quit and prevent anyone else, especially children, from starting.

The campaign, called “Tips From Former Smokers,” is intended to educate Americans about the dangers of smoking through the stories and graphic pictures of ex-smokers who have suffered severe health consequences of tobacco use.

The former smokers profiled have suffered ailments such as stroke-related paralysis, limb amputation, lung removal and heart attack. One breathes through a stoma, a surgically created hole in the neck through which a person who has undergone larynx or voice box surgery can breathe.

“Hundreds of thousands of lives are lost each year due to smoking, and for every person who dies, 20 more Americans live with an illness caused by smoking,” Health and Human Services Secretary Kathleen Sebelius said in a statement.

“We cannot afford to continue watching the human and economic toll from tobacco rob our communities of parents and grandparents, aunts and uncles, friends and co-workers. We are committed to doing everything we can to help smokers quit and prevent young people from starting in the first place.”

The ads are the brainchild of the Centers for Disease Control and Prevention’s Office on Smoking and Health. The agency says smoking remains the country’s leading cause of disease and preventable death, resulting in more than 443,000 fatalities annually. More than 8 million Americans live with a smoking-related illness or conditions, according to the disease agency.

(CNN) — International officials in a Syrian-led mission will attempt to gauge humanitarian conditions across the turbulent nation this weekend as world powers push for open entree to provide much-needed relief.

This comes as the Syrian conflict enters its second year, with President Bashar al-Assad’s fierce crackdown against anti-government enclaves showing no signs of ending. More than 8,000 civilians have been killed during the conflict, the United Nations says, but opposition activists said the overall toll is more than 9,000, mostly civilians.

The numbers have exceeded 9,700 and are “fast approaching 10,000,” said Rafif Jouejati, spokeswoman for the Local Coordination Committees of Syria, an opposition activist network.

Valerie Amos, U.N. under-secretary-general for humanitarian affairs, said Thursday the government will lead a mission to the provinces of Homs, Hama, Tartous, Latakia, Aleppo, Deir Ezzor, Rif Damashq and Daraa. U.N. and Organization of Islamic Cooperation officials will accompany the mission, she said.

“It is increasingly vital that humanitarian organizations have unhindered access to identify urgent needs and provide emergency care and basic supplies,” she said in a written statement. “There is no time to waste.”

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The embarrassing tongue-lashing Goldman Sachs (GS: 122.68, +2.31, +1.92%) received this week from a former employee in the Op-Ed pages of The New York Times seemingly presents a unique opportunity for the Wall Street firm’s rivals.

Yet bankers at JPMorgan Chase (JPM: 44.72, +1.14, +2.62%) have been warned not to seize upon so-called Muppetgate, which erupted after a former Goldman employee resigned and bashed Goldman as a “toxic” place to work full of self-interested people.

According to Reuters, JPMorgan CEO Jamie Dimon warned employees in an internal memo not to try to take advantage of the “alleged” issues raised by the Op-Ed written by Greg Smith.

“I want to be clear that I don’t want anyone here to seek advantage from a competitor’s alleged issues or hearsay — ever. It’s not the way we do business,” Dimon wrote in the memo, the news service reported.

The Dimon memo, which urged workers to focus on the company’s own standards, greeted Asian employees as they arrived for work Thursday morning and was later forwarded to wider parts of the business, Reuters reported.

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The United States encountered mounting challenges to its presence in Afghanistan Thursday, as Afghan President Hamid Karzai urged the U.S. to pull back to military bases and the Taliban announced they were suspending tentative peace talks.

The developments come after two incidents strained relations between the two countries — the inadvertent burning of Korans on a U.S. base, and most recently a shooting spree that left 16 Afghan civilians dead. Afghan lawmakers expressed outrage after the U.S. soldier suspected in that massacre was flown out of the country to Kuwait.

By Thursday, both Karzai and the Taliban were lashing out at American negotiators, all while Defense Secretary Leon Panetta was visiting the country.

Karzai, in a meeting with Panetta, asked the U.S. to withdraw from Afghan villages and stay on bases, saying, “Afghan security forces have the ability to keep the security in rural areas and in villages on their own.”

He also urged the U.S. to let Afghan forces take the lead for countrywide security in 2013, a year ahead of schedule.

Shortly afterward, the Taliban announced they were breaking away from talks with the U.S. because the U.S. “turned back on its promises.” One concession the Taliban were looking to extract out of peace talks was the release of prisoners from Guantanamo Bay.

The statement said the Taliban would suspend talks “until the Americans clarify their stance on the issues concerned and until they show willingness in carrying out their promises instead of wasting time.”

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As the Obama administration tries to respond to rising gas prices by touting an all-of-the-above strategy for energy independence, its own alternative energy initiatives are getting slammed from both sides.

The administration for the past six months has been under fire for blowing through nearly $530 million on Solyndra, the solar panel firm that filed for bankruptcy last September. A new government report now finds the loan program that funded Solyndra continues to suffer from management problems.

The administration was also just hit with a lawsuit from the gas companies’ trade association over a biofuels mandate that dates back to the George W. Bush administration — one which the industry says is unworkable.

Meanwhile, companies that are trying to secure government funding for fuel-efficient vehicles in the wake of Solyndra say the fallout from that controversy has led to a bureaucratic freeze at the Department of Energy and prevented their firms from getting any money.

Several companies applying for loans for their vehicle projects have abandoned that process in recent weeks.

The frustration was encapsulated in a letter sent by Bright Automotive to the department in late February, just days before the firm withdrew its loan application and started to close down shop.

“Unfortunately, irrationality and petty politics have paralyzed your agency at a time America needs you most. One cannot score if one does not shoot,” the executives of the now-defunct company wrote to Energy Secretary Steven Chu.

Mike Donoughe, chief operating officer with Bright, told FoxNews.com that Energy Department officials told them repeatedly they were under a directive to never put the department through another Solyndra.

“Those were their sort of marching orders,” Donoughe said of the department officials his firm dealt with. He said officials are so wound up they “do nothing. And they’re good at that.”

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I’m glad to have the chance to speak again to the Independent Community Bankers of America, even if it’s by way of prerecorded remarks. This will be the first time in quite a few years that I haven’t been with you in person, but, as you may know, the Federal Open Market Committee met just yesterday in Washington, so I am unable to join you in Nashville. I have very much enjoyed attending these annual ICBA get-togethers, especially since I get the chance to hear directly from you about what’s happening in your local economies and in community banking more generally. It’s a tradition I hope to reestablish in the future.

The Role of Community Banks in a Challenging Economy
Community banks remain a critical component of our financial system and our economy. They help keep their local economies vibrant and growing by taking on and managing the risks of local lending, which larger banks may be unwilling or unable to do. They often respond with greater agility to lending requests than their national competitors because of their detailed knowledge of the needs of their customers and their close ties to the communities they serve.

As you well know, however, community banks are also facing difficult challenges. Their close ties to local economies are, on balance, a source of strength, but a drawback of those ties is that the fortunes of communities and their banks tend to rise and fall together. Another concern for community banks is the narrowing of the range of their profitable lending activities: Because larger banks have used their scale to gain a pricing advantage in volume-driven businesses such as consumer lending, community banks have tended to specialize in other areas, such as loans secured by commercial real estate. That said, I know that community banks are continuing to look for ways to prudently diversify their revenue sources.

Like larger banks, community banks are also being affected by the state of the national economy. Despite some recent signs of improvement, the recovery has been frustratingly slow, constraining opportunities for profitable lending. And, as I will discuss momentarily, actual and prospective changes in the regulatory landscape have also raised concerns among community bankers.

The good news is that, for the most part, community banks appear to be meeting their challenges. Profits of smaller banks were considerably higher in 2011 than in the previous year, nonperforming assets were lower, provisions for loan losses fell appreciably, and capital ratios improved.

Oh yeah, that’ll work well…(sarcasm). Idiot academics; then why the hell should anyone pay their mortgages at all?

They’re not going to avoid another round of foreclosures, they’re going to make it worse.

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There’s a growing consensus among economists, investors, academics, and consumer advocates that more “principal reduction” — writing off a portion of a mortgage that exceeds a home’s value in exchange for a higher likelihood of repayment — can help avoid another wave of costly and economy-crushing foreclosures. That’s good for homeowners and lenders, and because millions of underwater mortgages are controlled by the government, it’s also good public policy.

But the country’s two biggest mortgage companies are not convinced, according to Edward DeMarco, acting director of the Federal Housing Finance Agency — which oversees the government-controlled mortgage giants Fannie Mae and Freddie Mac.

“Both [Fannie and Freddie] have been reviewing principal forgiveness alternatives and both have advised me that they do not believe it is in the best interest of the companies to do so,” DeMarco told Congress last week. He added that principal reduction is inconsistent with his mandate to protect taxpayers, who have invested more than $150 billion in the companies since 2008.

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The original story of Narcissus may be a couple thousand years old now but in the eyes of market strategist Adam Parker at Morgan Stanley, the myth about the boy who falls in love with his own image is about to make a comeback.

“My sense is that we’ve gone a little bit too internal now among U.S. investors,” Parker says in the attached video clip, adding we are so focused on our domestic comeback that we’re ignoring the risks that still exist in Europe and China.

Sure U.S. stocks have rebounded nicely and investors (theoretically) have enjoyed a nice six month run –not to mention a bull market that just entered its fourth year running– but Parker feels this inward focus is about to get a rude awakening.

“We don’t think U.S. companies have sufficiently guided down for the weakening economy in Europe,” Parker warns. He predicts that along with first quarter earnings results in April will be a slew of cautious commentary about the 2nd half due to the bite from a recession in Europe.

“I think you should be betting on the fact you will see more negative guidance from companies with exposure to Europe,” he says.

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On Monday, European finance ministers are expected to approve the latest bailout package for Greece, which last week got more-than 85% of its creditors to agree to “voluntary” haircuts on their Greek debt.

The resulting restructuring is the largest for a sovereign nation in modern history, and the first since the adoption of the euro in 1999, but did avoid a messy, disorderly “credit event.” But a default by any other name is still a default.

The EU has probably bought itself “several more months,” thanks to the Greek restructuring and the “radical measures” adopted by the European Central Bank, says Steve Forbes, chairman of Forbes Media. “You can keep kicking” the can down the road, “but crises emerge.”

Notably, Greek debt is trading in the so-called “grey market” as if Greece will fail to make payments on its newly restructured debt and Portuguese debt yields have risen sharply in the past week.

In sum, Forbes fears European policymakers have failed to take the “right” lessons from the Greek tragedy.

Right now “you have the worst of both words” in Greece, he says. “The economy is going into the tank without the pro-growth reforms to get it back again.”

Forbes prescription for Greece — and Europe’s other so-called PIIGS — is familiar to anyone who’s followed his work over the years: less regulation, labor reform and a “radically reformed tax structure,” featuring (of course) a flat tax.

“They’re going in the wrong direction” in Europe, he says, citing new tax increases in Spain and Portugal and Greece’s failure to really reform its bloated public sector.

“They need remedial education,” Forbes says of EU policymakers. “They’re all tied to defunct notion of Keynesianism that government spending somehow stimulates the economy — that easy money stimulates the economy. No it does not.”

Forbes compares European policymakers to medieval doctors who tried to “bleed the patient to cure the patient. So they killed the patient.”

Europe — and the Eurozone — certainly isn’t “dead” but the road to recovery from its rolling debt crisis is starting to look shaky, again.

But hey, if the other nations don’t like that, they are welcome to try financing their own budgets on their individual credit ratings…

ATHENS (Reuters) – Euro zone countries with a top credit rating might have a bigger say in talks to replace Jean-Claude Juncker as chairman of the bloc’s finance ministers, a Greek newspaper quoted German Finance Minister Wolfgang Schaeuble as saying on Saturday.

Asked in an interview in weekly To Vima whether Juncker’s successor would have to come from a triple-A country, Schaeuble said: “Member states that observe the euro zone’s fiscal rules and are rewarded for this by the rating agencies and the market will possibly have better chance to promote their candidates for the post.”

Schaeuble declined, however, to make further comments, saying he did “not want to talk publicly about possible candidates” or “make speculations on the issue”.

Four out of the euro zone’s 17 countries currently have a top credit rating: Germany, Finland, Luxembourg and the Netherlands.

Juncker’s term as head of the so-called Eurogroup expires in June and he has said he does not want to keep the job.

Schaeuble reiterated in the interview that there is no guarantee that a second bailout plan for Greece, due to be approved by euro zone finance ministers next week, will work. “No-one can’t rule out that Greece won’t need at some point by then (2020) a third package,” he told To Vima.

He also dismissed any notions that Germany was using the euro zone crisis to dominate Europe.

“Drawing the conclusion that we want to dominate Europe is really, just foolish”, he said. “I can assure you that Germany has neither the intention nor the power to impose such a dominance”.

He will of course be as missed as at his other past corporate flings; GE, Home Depot, Chrysler…

(Reuters) – Robert Nardelli, the former head of Chrysler and Home Depot, has stepped down from his operating roles at Cerberus Capital Management LP, the private equity firm said this week.

Cerberus said Nardelli, who served as chief executive of the firm’s management consulting affiliate as well as its firearms-making conglomerate, resigned from both posts effective immediately.

Nardelli will continue to serve as senior adviser to Cerberus CEO Steve Feinberg, the firm said.

In a statement, Nardelli said he was stepping away from active management roles at Cerberus to devote his attention to XLR-8 LLC, his investment and consulting company.

Nardelli, a square-jawed General Electric veteran executive who was known as “Little Jack” at the conglomerate for his emulation of mentor Jack Welch, left GE when he was passed over as Welch’s successor.

He became CEO of Home Depot in 2000 but left in early 2007 after losing the support of the board. His $210 million severance package from the chain of home improvement superstores made him a lightning rod for criticism.

Several months later, he took the helm at Chrysler, the then deeply troubled automaker owned by Cerberus.

He arrived promising to take a $1 salary and to restore the company’s reputation as an American icon.

Eighteen months later, Nardelli stepped down following Chrysler’s bankruptcy, the first-ever by a major U.S. automaker.

He returned to Cerberus, where he was eventually named CEO of Cerberus Operations and Advisory Company, a consulting affiliate, and Freedom Works, a gunmaking company in the private-equity firm’s portfolio.

Cerberus said Chan Galbato, a long-time Nardelli protege, would succeed him as CEO of Cerberus Operations and Advisory Company LLC, the consulting affiliate.

At Freedom Works, where Nardelli took over as CEO in January, Cerberus said George Kollitide would act as interim CEO of the firearms maker while a permanent successor is found.

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A company owned by Warren Buffett’s Berkshire Hathaway (BRK-A) is being called out for the lobbying dollars it spent in Washington while fighting to receive a more favorable tax treatment.

According to a report Tuesday on The Huffington Post, Berkshire company NetJets put north of $2.5 million toward lobbyists who were pushing measures to benefit a group of private jet firms. The findings followed a HuffPo analysis of lobbyist disclosure records. Thanks to one part of the legislation, the Federal Aviation Administration Modernization and Reform Act, NetJets and other fractionally owned jet companies “will pay lower taxes over the next four years than they do today,” HuffPo reports. Because of the law, the federal government will miss out on around $25 million in revenue during the next three years from the jet firms who will benefit from the tax changes, the report says.

Now, NetJets is no different from hundreds, even thousands of other companies and groups that have lobbyists in the nation’s capital. In some of these cases, the lobbyists are looking for ways to help their clients pay lower taxes or otherwise gain financially through the goings-on in Congress.

What is different is that, in this particular case, a company under the control of Buffett’s Omaha-based firm is being spotlighted.

LONDON/ATHENS (Reuters) – A disorderly Greek default would cause more than a trillion euros ($1.3 trillion) of damage to the euro zone and could leave Italy and Spain dependent on outside help to stop contagion spreading, the main bondholders group has said.

Greek private creditors have until Thursday night to say whether they will participate in a bond swap that is part of a bailout and restructuring deal to help it manage its finances and meet a debt repayment on March 20.

Investors will lose almost three-quarters of the value of their debt in the exchange. Finance Minister Evangelos Venizelos told Reuters on Monday it was the best deal they would get and those who did not sign up would still be forced to take losses.

Analysts said the Institute of International Finance document, marked “IIF Staff Note: Confidential,” may have been designed to alarm investors into participating in the exchange.

“There are some very important and damaging ramifications that would result from a disorderly default on Greek government debt,” the IIF said in the February 18 document obtained by Reuters.

“It is difficult to add all these contingent liabilities up with any degree of precision, although it is hard to see how they would not exceed 1 trillion euros.”

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EXCLUSIVE: It was one of the hottest days of the year and evening temperatures were still sweltering when two FBI agents wearing bulletproof vests under their dark suits climbed the stairs of the Jacob Riis housing complex in New York’s Lower East Side on June 7, 2011. Drenched in sweat, they knocked on the steel door of a sixth-floor unit. It swung open to reveal a man in his late twenties wearing jeans and a white T-shirt.

“I’m Hector,” he said.

The agents were suddenly face-to-face with “Sabu,” the computer genius they had stalked for months, a quarry so elusive they hadn’t pinned down his identity and location until just weeks before. The suspected ringleader of the Anonymous offshoot group LulzSec, Hector Xavier Monsegur and his web minions had just completed a month-long reign of terror, hacking the CIA, Fox, Sony and several financial institutions, causing, according to some estimates, billions of dollars in damage around the world.

The nondescript public housing unit seemed an unlikely nerve center for one of the world’s most wanted criminal masterminds, but the 28-year-old Monsegur himself is a study in such contradictions. An unemployed computer programmer, welfare recipient and legal guardian of two young children, Monsegur did not go to college and is a self-taught hacker. Although his skills and intellect could command a lucrative salary in the private sector, those who know him say he is lazy, an underachiever complacent with his lifestyle.

“He’s extremely intelligent,” a law enforcement official said. “Brilliant, but lazy.”

It was the laziness that got him.

Sabu had always been cautious, hiding his Internet protocol address through proxy servers. But then just once he slipped. He logged into an Internet relay chatroom from his own IP address without masking it. All it took was once. The feds had a fix on him.

For weeks they waited, watching him, monitoring the online activity of the man they believed was the leader of LulzSec.

But then, late in the evening of June 7, they received word that Sabu had been “doxed” — meaning that for a very brief moment, someone had posted Sabu’s real name and address online. Law enforcement feared Sabu would see he’d been outed and begin destroying evidence of his hacking career—and all traces of those he’d worked and communicated with online. They had to move.

WASHINGTON (AP) — Congress was moving Tuesday to overturn a court decision and reaffirm that the government has the right to impose higher tariffs on goods from China and other countries that subsidize their exports to the United States.

The House was expected to pass the bill Tuesday and send it to President Barack Obama for his signature. The Senate approved it Monday on a voice vote with no debate.

The speedy and bipartisan congressional action came after a federal appellate court ruled in December that the Commerce Department did not have the authority to levy the punitive tariffs because Congress had never explicitly given the agency that right.

The Commerce Department has been applying these “countervailing” duties since 2007. The legislation ensures that 24 existing higher tariff orders and six pending investigations against imports from China and Vietnam will continue to be valid.

The duties are allowed under World Trade Organization rules to counteract unfair subsidies used by countries, such as China and Vietnam, that have yet to fully adopt market economies.

Senate Finance Committee Chairman Max Baucus, a Democrat, said that since 2007 countervailing duties have protected some 80,000 jobs across the country. “China doesn’t get a free pass to violate the rules at the expense of American jobs,” he said.

DETROIT (AP) — Chrysler aims to be the first U.S. automaker to produce a factory-built pickup truck that is powered mainly by natural gas.

The privately held company said Tuesday that its new Ram 2500 Heavy Duty CNG truck will be sold to commercial customers that operate truck fleets. The company expects to deliver the first trucks in July.

The truck will have natural gas tanks and an 8-gallon fuel tank for gasoline. Chrysler said a small amount of gasoline is needed to start the truck, but after ignition it runs entirely on natural gas. If the natural gas tanks run out, the engine can switch to gasoline.

Natural gas prices have dropped steeply over the last year thanks to higher production. Chrysler said the gas-powered trucks will save money for their owners over the long term.

Other automakers are moving into the natural gas market.

On Monday, General Motors Co. said it would release two 2013-model pickup trucks powered in part by natural gas. The company said it would start taking orders in April for the natural gas-powered 2013 Chevrolet Silverado and GMC Sierra 2500 HD.

GM said it expects to ship its vehicles toward the end of the year. The trucks will be available to both commercial fleet operators and retail customers.

PARIS/FRANKFURT (Reuters) – France is prepared to switch allegiance from Spain to Luxembourg in the battle for a seat on the Executive Board of the European Central Bank, according to diplomatic sources, an appointment that would tilt the balance towards anti-inflation traditionalists.

Spain, Luxembourg and Slovenia are in a three-horse race to replace Jose Manuel Gonzalez-Paramo when the Spaniard leaves the ECB at the end of May.

Since the ECB flooded banks with cheap money for a second time last week, some of its policymakers led by Bundesbank chief Jens Weidmann have expressed alarm that the dramatic loosening of lending policy will fuel imbalances in the euro zone and stoke inflationary pressures.

The ECB hawks’ bargaining position could be further bolstered if Luxembourg’s central bank chief, Yves Mersch, wins the race.

French President Nicolas Sarkozy backed Spain to keep its seat on the ECB board before Madrid put forward the ECB’s top lawyer Antonio Sainz de Vicuna as its candidate.

Since then the veteran Mersch, who has one of the strictest anti-inflation stances among ECB policymakers, has entered the race for the post which manages the ECB’s day-to-day business.

Sources said France was now backing him rather than Sainz de Vicuna as part of a grand deal on top jobs at European institutions, which could see France bag the European Bank for Reconstruction and Development.

ECB board members are chosen by euro zone governments rather than the central bank itself. A decision may be made as soon as Monday at a meeting of euro zone finance ministers before being rubber stamped by heads of government at a later date.

(Reuters) – Lehman Brothers Holdings Inc emerged from its record $639 billion bankruptcy on Tuesday and said it will start paying back creditors on April 17.

The move puts an end to the bankruptcy proceeding that began on September 15, 2008, when Lehman collapsed and rocked the foundations of the global financial markets, catalyzing the Great Recession.

Exactly 1,268 days later, the case’s end enables Lehman to start distributing $65 billion or so to creditors who had asserted more than $300 billion in claims.

Bankruptcy Judge James Peck approved Lehman’s creditor payback plan in December. Since then, the company has tied up loose ends: selling assets, litigating claims and settling disputes with affiliates and counterparties.

The company will continue to liquidate its holdings under a new board of directors, Lehman said in a statement.