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Flash: Obama Gets Subpeonaed

Showing a growing frustration with the the Obama administration, congressional Republicans on Thursday authorized their second subpoena this week, demanding White House documents related to failed solar technology company Solyndra.

By a 14-9 party-line vote the Energy and Commerce Committee’s investigative subcommittee authorized issuing a subpoena for any White House documents related to Solyndra, which received renewable energy loan guarantees under President Obama’s stimulus program. The request for documents could include details of the president’s own travel and communications.

Democrats said it was “unprecedented” to subpoena documents from the president’s executive office like this, but Republicans said they’ve run out of patience with White House “stalling.”

“We simply cannot allow the executive branch at its highest levels to pick and choose what they will produce, or whether they will produce anything at all,” said Rep. Cliff Stearns, the Florida Republican who runs the investigative panel.

Thursday’s subpoena came just a day after the Judiciary Committee’s immigration subcommittee voted along party lines to authorize a subpoena for Homeland Security records related to illegal immigrants the department has declined to pursue deportation cases against.

**FILE** An auction sign is shown outside the Fremont, Calif., headquarters for bankrupt solar company Solyndra headquarters on Oct. 31, 2011, before the auction on the following day. Solyndra received a $500 million loan guarantee from the government before filing for bankruptcy in September. (Associated Press)**FILE** An auction sign is shown outside the Fremont, Calif., headquarters for bankrupt solar company Solyndra headquarters on Oct. 31, 2011, before the auction on the following day. Solyndra received a $500 million loan guarantee from the government before filing for bankruptcy in September. (Associated Press)

Together they mark an escalation as Republicans have become increasingly aggressive in pushing back against what they see as administration stonewalling of oversight by the new GOPmajority in the House.

In each case, the vote only authorizes a subpoena. It’s up to the chairmen of the full committees to actually issue them.

Democrats said both votes were premature. They pointed to ongoing discussions between Homeland Security and the Judiciary Committee on the one hand, and between theWhite House and the Energy and Commerce Committee on the other, as evidence the administration is acting in good faith.

“The White House repeatedly said they had turned over documents and they were willing to turn over more documents,” said Rep. Diana DeGette, the ranking Democrat on the investigations panel.

She also said the administration has already turned over tens of thousands of documents.

Each side now argues the other is acting in bad faith.

Republicans point to a lengthy effort to get documents, and said it is only when the committee begins to threaten subpoenas that things shake loose.

Rep. Fred Upton, Michigan Republican and chairman of the full committee, said several new boxes of documents were released to the press Wednesday night even before they were turned over to thecommittee. Those documents reportedly show the Obama administration mulled bailing Solyndra out just days before the solar panel manufacturer collapsed.

Democrats said they support legitimate requests for information and back the House’s right to investigate the administration. But they said the request for all potential Solyndra communications was a broad fishing expedition, and accused the GOP of short-circuiting usual negotiations.

“Apparently what the committee really wants is a confrontation with the president,” said Rep. Henry A. Waxman, the top Democrat on the full Energy and Commerce Committee.


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Bernanke and #FED See High Unemployment and Malaise for Years to Come

Federal Reserve officials sharply downgraded their forecasts for economic growth and jobs on Wednesday, expecting a sluggish recovery and high unemployment for years to come.

In releasing their projections for how the economy will perform in the years ahead, the 17 top officials of the central bank project that the jobless rate, 9.1 percent in September, will fall only to 8.5 to 8.7 percent by the final months of 2012. In June, the last time they released projections, they thought the unemployment rate would descend to around 8 percent.

They envision a very slow decline in unemployment beyond that, with the jobless rate falling to the 6.8 to 7.7 percent range by the end of 2014. That is still well above the 5.2 to 6 percent range that they view as the longer run jobless rate.

The Fed officials predict a lackluster 2.5 to 2.9 percent pace growth in gross domestic product next year. That is not much higher than what they view as the economy’s longer run potential growth rate, and is not enough to repair the economy quickly. In June, they thought 2012 GDP growth would be in the 3.3 to 3.7 percent range.

The forecast was released a couple of hours after the central bank announced that it would not take new action to pump money into the economy, assessing that economic growth had “strengthened somewhat” in recent months.

Some Fed officials had argued for the central bank to take further action to pump up growth, such as beginning new purchases of mortgage-related securities to try to lower interest rates and support the housing market. But after two meetings at which the central bank took steps to ease monetary policy, Fed officials elected to stand pat.

One official, Federal Reserve Bank of Chicago President Charles Evans, opposed the decision, arguing that the Fed should have taken more action to help the economy. While dissents in the opposite direction–arguing for less aggressive policy–have been common in recent years, it was the first time in four years that an official has dissented in favor of doing more.

Later in the day, Chairman Ben S. Bernanke began a news conference by recapping the forecast and then took questions from reporters. The first noted the criticism that Republican political leaders have lobbed at the Fed over its monetary policy decisions. “It’s very important” he responded, that the Fed — as an independent body — be free of political influence. In addressing the concerns that Republicans have raised about an increase in inflation, Bernanke noted that “inflation has averaged 2 percent,” the Fed’s target rate. “Where we are falling short,” he said, “is on the unemployment side.”

The leaders of the central bank likely also spent much of the two-day meeting discussing how they communicate their expectations and goals for the economy. There was no immediate announcement Wednesday of changes to those strategies.

The policy-setting Federal Open Market Committee saw the economic situation as being slightly better than they had at their September meeting, however, saying that “economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year.”

The U.S. economy grew at a 2.5 percent annual rate in the July through September quarter, the Commerce Department said last week.

But the Fed’s policy statement was hardly ebullient in its description of the economy. “Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated,” the statement said, and “the housing sector remains depressed.”

Evans has argued for a variety of more aggressive steps to try to strengthen the economy and reduce unemployment, but had not previously dissented from a Fed action. The last time an official voted against policy in the “dovish” direction, favoring easier monetary policy, was Boston Fed President Eric Rosengren in December 2007.

At the last two Fed meetings, three policymakers dissented in the opposite direction, worried the Fed’s monetary policy was doing too much to boost growth and risked inflation. None did so at this meeting.


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Senate Democrat Proposes Subsidies for Diapers

Sen. Richard Blumenthal (D-Conn.) on Tuesday introduced legislation that would allow federal block grants that states now use to subsidize child-care services to also allow for the purchase of diapers and “diapering supplies.”

The bill, S. 1778, would amend the Child Care and Development Block Grant Act of 1990 to allow diapers and related supplies to be bought with grant money provided to states. Under current law, the money is meant to subsidize child-care services to parents who are entering the labor force or are in job training and education programs. It also helps subsidize child-care services for certain eligible families.

Under the law, 4 percent of all funds must be used to improve the quality of child-care. A summary of Blumenthal’s bill indicates that it would allow the purchase of diapers under this provision, as it would “include the provision of diapers and diapering supplies among the activities for which funds may be employed to improve the quality of and access to child care.”

The federal program, called the Child Care and Development Fund, received $5 billion in fiscal 2011, which it distributed to all 50 states, the District of Columbia and scores of tribal governments. The program now helps to provide for an estimated 1.8 million children each month.

The program also received an extra $2 billion under the 2009 stimulus bill.


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Jon Corzine Gave Speech and Got His Eat On the Night Prior to MF’s Blow-Up

The night before MF Global Holdings Ltd. (MF) posted its biggest quarterly loss, triggering a 48 percent stock plunge, Chairman and Chief Executive Officer Jon Corzine appeared at a steak dinner at New York’s Helmsley Park Lane Hotel for a speech to a group of bankers and traders.

“There was no sense at all that there was impending doom,” Kenneth Polcari, a managing director of ICAP Corporates, said of Corzine’s Oct. 24 address to the National Organization of Investment Professionals. “He gave a spectacular speech” about his decades at Goldman Sachs Group Inc. (GS), life as a U.S. senator and New Jersey governor and his return to the private sector. “He’s had a full life, up until now.”

Corzine, 64, excused himself before the main course was served, saying he had to prepare for an earnings call the next day, said David Shields, vice chairman of New York-based brokerage Wellington Shields & Co. and a former chairman of the organization. The group seeks to foster “a favorable regulatory environment,” according to its website.

Timothy Mahoney, CEO of New York-based Bids Trading LP, said Corzine’s speech was “delightful.”

The next day, MF Global reported a $191.6 million net loss tied to its $6.3 billion wager on European sovereign debt. On Oct. 27, after the company’s bonds dropped to 63.75 cents on the dollar, Moody’s Investors Service and Fitch Ratings cut the firm to below investment grade, or junk. Unable to find a buyer, the company filed for bankruptcy on Oct. 31, the first major U.S. casualty of the European debt crisis.

‘Serve the Public’

At least two dozen U.S. lawmakers and regulators, including Representative Joe Barton, a Texas Republican, Carolyn Maloney, Democrat of New York, and former Securities and Exchange Commission Chairman Harvey Pitt have addressed the group, according to its website.

“There are many people in the group that do lobby and talk to regulators,” Shields said. “You talk to regulators, you talk to lawmakers and you try to get the points forward, things that will help the marketplace, that will serve the public.”

The group’s board includes head traders at firms such as Waddell & Reed Financial Inc., whose futures trade triggered the flash crash of May 6, 2010, according to a study by the SEC and the U.S. Commodity Futures Trading Commission.

Its members’ firms “trade approximately 70 percent of the institutional volume transacted daily in the New York and Nasdaq markets,” according to the website.

‘Difficult’ Day

The group’s current chairman, Dan Hannafin of Boston-based investment manager Wellington Management Co., declined to comment on the dinner. Corzine and Diana DeSocio, an MF Global spokeswoman, didn’t reply to an e-mailed request for comment.

Mahoney said he appreciated Corzine’s ability “to compartmentalize” and speak engagingly last week. Mahoney’s firm, Bids, runs a private trading venue known as a dark pool, and is a joint venture of banks including Goldman Sachs.

Before the speech, Moody’s cut MF Global’s credit ratings to the lowest investment grade. Polcari said there was one reference to Corzine’s “difficult” day.

While he was “cordial” and “positive,” the MF Global chief lacked his typical “sharp bounce,” Shields said. Corzine is “a member of the community,” and could be invited back after the bankruptcy, he said. “People go through bad times.”


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Cosa Nostra Mobsters Charged in Mortgage Fraud Scheme

CAMDEN, NJ — The FBI says a financial fraud case shows that mobsters are moving “from the back alleys to the boardrooms.”

Reputed mobsters, including the son former Philadelphia mob boss Nicodemo D. “Little Nicky” Scarfo, were charged in an indictment unsealed Tuesday.

Five lawyers and an accountant were charged along with Nicodemo S. Scarfo.

Federal authorities say the group took over FirstPlus Financial Group, an Irving, Texas mortgage company, had it buy shell companies they ran and took the money out.

Authorities say the scheme brought them $12 million between 2007 and 2008.

One of the reputed mobsters’ purchases with the money: A yacht named “Priceless.”

FBI Special Agent Michael Ward says the allegations show organized crime has evolved.

Scarfo Jr. is due in a Camden federal court Tuesday afternoon.

Read more: http://trade.cc/azh

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SHERIFF LAYS DOWN THE LAW: “Carry a concealed weapon. That’ll fix it.”

The Spartanburg County Sheriff is known for speaking his mind, and at a news conference on Monday, he didn’t hold back his anger and frustration after a woman was attacked in a park over the weekend.


Investigators said 46-year-old Walter Lance grabbed a woman who was walking her dog in Milliken Park on Sunday afternoon. They said Lance choked the woman, made her take off her clothing and tried to rape her. (Full Story)


Lance is in custody and was denied bond on Monday.

Sheriff Chuck Wright opened his news conference by saying, “Our form of justice is not making it.”

He said, “Carry a concealed weapon. That’ll fix it.”

Wright said Lance has had more than 20 charges dating back to 1983.


Wright said Lance has been in jail more often than he has, and he runs the jail, and he said Lance gets out easier. Wright punctuated it by saying, “And I’m aggravated.”


He said he doesn’t believe every person needs to be kept in jail, but he said, “I don’t think this animal deserves to be out in our society, walking alongside our women.”


Wright said,”Liberals call me and tell me the chain-gang form of justice isn’t working. Well, let me inform you, your form of justice isn’t working either.”


He said Lance should not have had the right or opportunity to “violate a good, upstanding woman.”


“This is a horrific crime,” Wright said. “Her life was threatened so many times.”


Walter Lance was denied bond.

He said Lance “doesn’t fight police or men folk — he just goes after women.” He said Lance is not married because, “No woman can stay married to him because he beats them down too much.”


Wright said, “It’s too bad someone with a concealed weapons permit didn’t walk by. That would fix it.” He said people are tired of doing the right thing and criminals getting away with their actions.


He said several times, “I want you to get a concealed weapons permit.”


At one point, Wright held up a fanny pack and said, “They make this right here where you can conceal a small pistol in them. They got one called The Judge that shoots a .45 or a .410 shell. You ain’t got to be accurate; you just have to get close.”


Wright said, “I’m tired of looking at victims saying, ‘There’s life after this’ … I’m tired of saying, ‘We’re sorry, we can’t keep them in jail.'”


Wright said in his view, gun control is, “Is when you can get your barrel back on the target quick. That’s gun control.”


Milliken Park

Wright said the attack is not the fault of Millken Park. He said, “It’s a nice place for families.”


He said officers patrol the area all the time and respond to various calls there. He said, “Don’t blame anyone for having an animal on their property … We can’t get it all.”


He encouraged women to walk in groups, and he ended by saying again, “I want you to get a concealed weapons permit. Don’t get Mace. Get a firearm.”

And then he said, “I think I better stop before I get sanctioned.”
Read more: http://trade.cc/axh

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California Dreaming: New High-Speed Rail Project to Cost Roughly $100 Billion


The new business plan for California’s high-speed rail system shows the nation’s most ambitious state rail project could cost nearly $100 billion in inflation-adjusted funding over a 20-year construction period, far above the amount originally projected.The plan, which was shared late Monday with The Associated Press, also shows the system would be profitable even at the lowest ridership estimates and would not require public subsidies to operate.

The report estimates the actual cost at $98.5 billion if the route between San Francisco and Anaheim is completed in 2033. It assumes private investment will account for roughly 20 percent of the final cost.

The initial estimate to build the system when voters approved bond funding for it in 2008 was $43 billion in non-adjusted dollars.

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As noted many times in iBC Financial News, the recent federal raids on offshore online poker sites is likely to wind up being nothing more than a Godfather, Part II-esque ploy on the part of Steve Wynn and the Vegas tycoons to legalize and regulate it in America (with them running the show). 


With billionaires and casino companies rushing to get ready for the potential of regulated online gambling in America, MGM Resorts on Monday announced an online poker alliance with Bwin.party digital entertainment, which owns PartyPoker, the second-biggest online poker service in the world, and the World Poker Tour.

“MGM is proud to have bwin.party as our partner as they have the assets and experience that, combined with our brands, can ensure a secure, fair and entertaining online poker experience,” Jim Murren, chief of MGM Resorts, said in a statement.

The MGM deal, which is contingent on a regulatory regime being established for online poker on either the federal or state level, helps define the competitive landscape as casino companies get ready to enter the online gambling business in the U.S. Boyd Gaming also announced on Monday that it has entered into an online poker alliance with Bwin.party.

According to Jim Ryan, co-chief executive of Bwin.party, the two announcements are related and have been in the works for nearly 18 months. Bwin.party will form a joint venture with MGM and Boyd to offer online poker in regulated U.S. jurisdictions. Bwin.party is slated to own 65% of the proposed joint venture, while MGM will own 25% and Boyd will own 10%. In addition, the deals call for Bwin.party to license its technology to both MGM and Boyd, which also plan to offer online poker under their brands.

“The intention of the joint venture is to take the PartyPoker brand and the World Poker Tour brand and our operating expertise and combine that with the regulatory expertise of MGM and Boyd,” Ryan said in an interview. “Effectively you will have four brands in the U.S. and all four brands will be acquiring players and putting them in one hub, one poker network.”

Bwin.party’s PartyPoker was the biggest online poker platform in the world until Congress passed the Unlawful Internet Gambling Enforcement Act in 2006, which caused the company to exit the U.S. market and lose its dominant market share. The deals with MGM and Boyd mark the formal return of Bwin.party to the U.S. Ryan, who is based in Gibraltar, has spent a lot of time recently in the U.S.preparing for Monday’s announcement.

Notably, the announced deals only cover online poker, even though Bwin.party has strong online casino offerings. “We see no evidence that a state or federal body is prepared to legislate anything other than poker,” says Ryan.

The U.S. online poker market has long been the world’s biggest, but for years it has operated in the shadows of the law and a disapproving Department of Justice. Prominent U.S. billionaires and casino companies stayed out of the business, leaving its riches for offshore companies like PokerStars and Full Tilt Poker. But now the casino industry is strongly pushing to get online poker regulation through Congress and lawmakers in states like Nevada and New Jersey are also trying to get something done. It is widely believed that first-mover advantage will be key in seizing the Internet if and when online gambling gets regulated, leading to a mad mobilization.


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Trick-or-treaters might want to hold on to those Reese’s Cups this Halloween as sharp increases in peanut butter prices have begun going into effect following one of the worst peanut harvests in decades.

Kraft (KFTFortune 500) will raise prices for its Planters brand peanut butter by 40% starting Monday, while ConAgra (CAGFortune 500) has instituted increases of more than 20% for its Peter Pan brand that went into effect this month.

J.M. Smucker (SJMFortune 500), which makes Jif, will introduce price hikes of around 30% starting Tuesday.

Consumers, meanwhile, are already seeing these increases reflected at grocery stores.

Maria Brous, a spokeswoman for the Publix chain, said the store had already made slight increases in retail prices and expects them to go higher “as the cost of goods continue[s] to rise”.

Dick Roberts, a spokesman for Giant Eagle grocery stores, said that “like all retailers,” the store is “being affected by industry factors on peanut butter pricing”. Chris Brand, a spokesman for Giant food stores, said the “outlook does not look good until next year’s crop is harvested and produced”.

Peanuts usually get harvested in the fall, around September and October.

While spokespeople for several grocery chains declined to provide specific pricing figures, the peanut industry is clearly under pressure this year after one of the worst harvests in recent memory.

Prices for a ton of runner peanuts, commonly used to make peanut butter, hit nearly $1,200 this month, according to the U.S. Department of Agriculture. That’s up from just $450 per ton a year ago. Overall, the USDA projects that American peanut production will hit 3.6 billion pounds this year, down 13% from last year.

Analysts attribute this drop to the intense heat and drought that hit the southern U.S. this year, as well as to high prices for other crops that led farmers to focus their efforts elsewhere.

Americans spend almost $800 million on peanut butter and consume an average of more than six pounds of peanut products each year, according to The National Peanut Board, a farmer-funded research group.


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