NEW YORK (CNN) — Admitted fraudster Bernard Madoff, the mastermind of history’s biggest Ponzi scheme, had a three-hour meeting with the Securities and Exchange Commission’s top watchdog this week, several sources with knowledge of the situation told CNN.
The session took place Wednesday at New York’s Metropolitan Correctional Center, where Madoff is awaiting sentencing on federal fraud charges, the sources said. He met with SEC Inspector-General David Kotz, who is investigating what federal securities regulators knew about Madoff’s $50 billion enterprise before it collapsed in December.
Asked about the reported meeting, Kotz said only, “We’ve been making substantial progress in the investigation and plan to issue a comprehensive report very shortly.” He told a congressional committee earlier this week that his main report should be complete by the end of August.
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A Sonoma County winery is on a nationwide search for a social media maven to generate buzz about its products. Hundreds of applicants have submitted videos.
By Tina Susman
June 2009
Reporting from New York — Are you a “people person”?
How about an “excellent communicator”?
Do resume-wrecking cliches like those make your thumbs twitter with excitement? If so, you may be just what California’s Murphy-Goode Winery is looking for.
In a sign of the cyber-crazed times, the Sonoma County winery is on a nationwide hunt for someone to fill its “Really Goode Job.” The successful applicant will earn $10,000 a month to tweet and use other social media skills to generate buzz about its reds and whites.
The job, which begins in August, offers no health insurance and lasts for six months. But by the time auditions were held this week at a restaurant at New York’s Grand Central Terminal, at least 747 people had posted videos in hopes of impressing winemaker David Ready Jr.
Hundreds more are expected to submit applications — videos no longer than 60 seconds — by the June 19 deadline, either by posting them directly to a website or by going on camera at auditions across the country.
Ready said his idea was to “demystify wine” by using social networking via Twitter, Facebook, YouTube and other sites to spread interest among a crowd that might view the beverage as out of its league.
“This has never really been done in the wine industry,” said Ready, a burly Minnesota native who sipped wine samples as hopefuls closed in, hungering for face time with the man who might be their boss.
“It’s so the new frontier,” said Tara Moncheck, who planned to submit a joint video with her fiance, Rayhan Daudani.
“We obviously didn’t expect double salary or anything,” Daudani said when Ready emphasized that he wanted just one online guru to send out messages and thoughts on wine to people around the globe.
The job-seekers who showed up at Michael Jordan’s Steak House were a reflection of the recession’s indiscriminate effect: They included a former investment bank vice president who was laid off after 20 years, two young journalists (Moncheck and Daudani) and passers-by who couldn’t resist giving it a shot, like Stefanie Johnston.
“I love wine!” Johnston burbled as she stood before the camera on a balcony overhanging Grand Central’s main concourse. As proof of her devotion, the New Yorker pointed out that she even had a copy of Wine Enthusiast in her backpack. “Look, I’m serious,” she said, pulling the magazine out after her audition.
Another drop-in spoke of his varied passions and talents, but he forgot one important thing. “I should have told him to say something about wine,” the videographer muttered as the man walked away.
Ready said he got the idea of hiring a “lifestyle correspondent” via video application from the Australian state of Queensland. Early this year, tourism officials there caused an online sensation by inviting people to submit videos for “The Best Job in the World.” The gig: spending six months as caretaker of a palm-fringed island surrounded by azure sea, and using blogs, video updates, photo diaries and other online media to promote tourism. More than 34,000 people applied for the roughly $120,000 job, which went to Ben Southall, a self-described adventurer from Britain.
“We thought, ‘Wow, can we apply this to the wine industry?’ I guess we can,” Ready said as applicants joined him in sipping samples of Murphy-Goode wine. Many said they had learned of the job — which calls for an imaginative, inquisitive “people person” who is also a communications whiz — through e-mail lists or from friends.
Ready said the main weakness among the applicants so far was their inability to show a passion for wine or for life in the bucolic Alexander Valley, not their mastery of the Web as a marketing tool.
In one video, an applicant named Valerie stood with a fat snake coiled around her neck to show her fearlessness in the face of one element of the job: monitoring the creatures that live among the vines.
“I want to be able to go into the vineyard and get my hands dirty and stomp on some grapes,” she said as the serpent’s head bobbed beside her left ear.
“Already my name makes me the perfect candidate,” said another applicant, noting her last name was Vinograd: “As in ‘vino,’ as in the Latin root for wine.”
There has been plenty of humor. One applicant gargled with a bottle of red wine, and another attempted to capitalize on Ready’s devotion to his home state’s NFL team by pouring wine into a Minnesota Vikings helmet and drinking from it.
There also have been some clearly Web- and tech-savvy applicants.
“I’m a Twitterer, a YouTuber, a Facebooker, a MySpacer, a Digger,” said Clay, who also touted himself as a blogger, photographer, video producer and sommelier. “Did I mention I was a home-brewer too?” he quipped at the close of his breathless video.
But most who auditioned in person beneath the cavernous sky-blue ceiling and ornate chandeliers of Grand Central simply stood and delivered their spiels in between train arrival and departure announcements.
“I have over 1,000 friends whom I actually know,” said Meredith Garcia, a fashion and style blogger, referring to Facebookers who accumulate “friends” they’ve never met. Actually, according to the site, Garcia has 906 friends.
Stacey Chait, who spent 20 years as a corporate events planner, read her pitch to herself over and over, trying to memorize it before she went on camera. After several takes, she was satisfied — and hopeful that her background in planning events for the likes of former Vice President Dick Cheney, ex-British Prime Minister Margaret Thatcher and President Clinton would give her an edge.
But, she admitted, “I don’t tweet” and can’t get excited about most people’s tweets or Facebook status updates.
“If I was tweeting for Murphy-Goode, I’d have something to tweet about,” Chait said. “But tweeting about my lunch today?”
NEW YORK(AP) — Sean Hamilton considered stopping his search for that special someone when he lost his job in January.
With 90 percent less income and no unemployment coming in, the 34-year-old IT professional couldn’t really pay for a dinner date. And how would he explain his financial situation without coming across as a slacker?
“To speak plainly, chicks don’t dig a broke guy,” said the Dallas resident, now a part-time consultant. So he came up with a strategy: “I don’t bring it up.”
Men have been hit much harder than women by this recession. Close to 80 percent of the job losses since December 2007 were jobs held by men, according to economics expert Mark J. Perry, who analyzed Bureau of Labor Statistics data. April unemployment was a seasonally adjusted 10 percent for men and 7.6 percent for women.
For some guys, unemployment is the last thing they want to reveal to a potential date. Even if men aren’t expected to pay for a date, they feel pressure from women who are looking for someone who is financially stable.
“A lot of men are very careful not to say, ‘I’m unemployed,’” said Pepper Schwartz, chief relationship expert at Perfectmatch.com. “They say, ‘I’m working on this project. I’m taking a sabbatical from work’ or ‘You heard of GM declaring bankruptcy? I worked there.’ They find ways to make it sound like it’s not permanent.”
Hamilton said when he is pressed, he says he’s a consultant. He proposes cheap dates, like cooking an elegant dinner for a woman at her place.
Christie Nightingale of Premier Match, with clients in Washington, D.C., Philadelphia and New York, said an unemployed man is a harder sell. She used to be able to brag to her female clients that a man worked in hedge funds, for example.
Now she has to explain that he is a great match in other areas _ looks, religion _ “but, you know, he’s looking for a job.”
“I find that women are very accepting,” she said. “Some of the women are going through it as well. They have friends that have gotten laid off. It’s the times that we’re in.”
Colin Deeb, 25, who was let go from his computer consulting gig in November, said he has had some experiences where women “seemed a lot less interested the second I told them that I was not gainfully employed.”
But that has been rare for the aspiring actor from Brooklyn, N.Y. He said it helps that he is actively looking for work and going on auditions. And he’s gotten creative with dates _ meeting for a bike ride, grabbing coffee or finding a cheap play.
“You learn to keep things simple when you’re not working as much as you would like to be,” he said. “Generally women have been OK with that.”
Simple has its limits, though.
Melissa Braverman, who blogs about dating, said she knows someone who was asked out on a walking date and considered it a turnoff. And in the last six months, she’s noticed that men don’t suggest meals. When they meet for drinks, they limit it to one hour. She believes it’s so she won’t order a second drink.
“The recession is almost becoming an excuse,” said Braverman, 35, of New York City. “Men don’t want to take the initiative, suggesting something fun that is inexpensive. It’s more well, ‘I can’t afford to take you out for a meal, let’s keep it brief.’ Unfortunately, a lot of times chemistry needs time to develop.”
Schwartz said unemployed men need to keep a positive attitude and show potential mates that they are stable: “`I don’t have a job but I’m doing everything I can to find one. I own my own house.’”
Being too cheap can be a turnoff for women like Virginia Wall, 40, who works in retail sales in Philadelphia. She doesn’t believe in coffee or drinks as a first date and expects the man to pay.
If he can’t afford to take her to lunch _ nothing fancy, just a casual place to sit and get to know each other over a sandwich _ then he probably shouldn’t be dating, she said.
“He shouldn’t bring someone in his life if he can barely take care of himself,” she said.
Sit out of the dating game, though, and you may miss out on the love of your life.
Christopher Floyd, 39, a photographer and video producer in Albuquerque, N.M., almost stopped communicating with a woman he met on eHarmony late last year because of his financial situation. His business has decreased 65 percent and he is trying to do a short sale on his home.
But his potential love match, Angela Sowers, 31, who works in human resources in Sacramento, Calif., persuaded him to give the relationship a shot. She flew out with friends to meet him and the two hit it off.
Floyd is moving to Sacramento next week and will live with her parents, so the two can date locally.
Sowers, who has had to foot the bill for a few plane tickets, said she isn’t too worried about his lack of income. She’s hoping he can get his business going in Sacramento.
“The relationship isn’t based on how much money he makes,” she said. “It’s who he is and what’s in his heart that matters to me.”
NEW YORK (Reuters) – A higher U.S. minimum wage is providing a cushion to the economy when it is most needed, according to a report released on Thursday.
The Economic Policy Institute, a liberal think-tank based in Washington, said recent rises in the minimum wage have acted as a “stealth stimulus,” preventing the worst recession in generations from spiraling out of control.
The study found that the bottom-rung pay increases will boost spending by $4.9 billion.
Such findings counter conventional wisdom among economists, who tend to argue that mandated wage increases hurt businesses’ bottom line, putting a crimp on hiring.
On the contrary, say EPI analysts, who argued that further growth in low-end incomes would go a long way toward engendering an economic recovery.
“An increase in the minimum wage would not only benefit low-income working families, but it would also provide a boost to consumer spending and the broader economy,” said Kai Filion, an analyst at EPI.
In the first increase in over a decade, the minimum wage was raised to $5.85 two years ago after a tough battle in Congress.
The EPI study found the July 2007 minimum wage hike benefited over 700,000 families and added $1.7 billion in additional spending over the following year.
A July 2008 increase benefited over 1.3 million families and added $3.1 billion in additional spending over the following year, the EPI analysts added.
(Reporting by Pedro Nicolaci da Costa; Editing by Dan Grebler)
NEW YORK — Facebook is getting a $200 million investment from a Russian Internet investor that values the social networking company at $10 billion even though it has yet to turn a profit.
The investment gives Digital Sky Technologies a nearly 2 percent stake in Palo Alto, Calif.-based Facebook’s preferred stock. Digital Sky won’t get a board seat.
The $10 billion valuation for Facebook is less than the $15 billion value implied in 2007, when Microsoft spent $240 million for a 1.6 percent stake in the company _ even though Facebook has substantially grown since then. However Facebook’s own appraisal after the Microsoft deal gave the company a market value of about $3.7 billion, according to details revealed in a legal settlement.
The latest investment, in preferred stock, does not necessarily compare with what the company’s common shares would be worth on the open market. That would be determined if the company were to go public, which is likely a ways off.
During a conference call Tuesday, Chief Executive Mark Zuckerberg said an IPO is “not something we are rushing toward.” He called the Digital Sky investment a “good cash buffer” to support its growth. Facebook now counts 200 million users, 70 percent of whom live outside the U.S.
As a private company, Facebook does not disclose financial details. It doesn’t even have a chief financial officer. Gideon Yu left that post in March and Facebook says it is still searching for a replacement.
The company says it has been profitable by one measure _ earnings before interest, taxes, depreciation and amortization, or EBITDA _ for the past five quarters. Zuckerberg reiterated Tuesday that the company expects to generate positive cash flow in 2010.
Zuckerberg also repeated his claim that Facebook will grow revenue by 70 percent this year.
Debra Aho Williamson, a senior analyst with Internet research firm eMarketer, questions whether that projection is achievable. EMarketer estimates that Facebook’s worldwide ad revenue will be $300 million this year, up 20 percent from last year.
In other words, to hit 70 percent growth, Facebook might have to ramp up the sale of products or services on the site. The company has experimented with some ideas, such as letting users send each other tiny virtual “gifts” for $1 each.
Yuri Milner, Digital Sky’s chief executive, said he is “confident that Facebook has the potential to be one of the most valuable Internet companies globally.” In addition to the $200 million preferred stock investment, Digital Sky also plans to offer to buy least $100 million of Facebook’s common shares from the company’s existing shareholders.
Based in London and Moscow, Digital Sky also holds a stake in vKontakte, a Russian online social network that is far more popular in that country than Facebook.
Its investment brings the total amount that Facebook has raised to more than $600 million since its founding five years ago.
NEW YORK (Reuters) – About $1 billion has been recovered to pay back the defrauded customers of swindler Bernard Madoff, but settlements in the coming weeks will boost the number significantly, the trustee winding down the Madoff firm said on Thursday.
Trustee Irving Picard told reporters on a conference call that he has filed lawsuits to recover $10.1 billion in assets from Wall Street‘s biggest investment fraud.
“This is too soon to project or speculate” the final amount that can be recovered from a fraud of up to $65 billion, Picard said.
He added that “over the course of the next few weeks, if we get some settlements, the number will certainly go up significantly from the $1 billion level, but I would not want to get into specific numbers.”
Madoff, 71, was arrested in December and he pleaded guilty in March to operating a huge Ponzi scheme, in which early investors are paid with money from new clients.
He is jailed awaiting sentencing, which was postponed on Thursday to June 29 from June 16, and he is likely to spend the rest of his life in prison.
The case is Securities Investor Protection Corp v Bernard L. Madoff Investment Securities 08-01789 in U.S. Bankruptcy Court for the Southern District of New York (Manhattan)
(Reporting by Grant McCool; Editing by Brian Moss)
NEW YORK — Bank of America Corp. stock rose Wednesday as investors appeared comforted by reports that the bank has the means to cover a potential $34 billion shortfall in capital.
“Investors have figured out Bank of America has plenty of options and earnings capacity” to handle any shortfall the government may say they are facing, said Gary Townsend, president and chief executive of private investment group Hill-Townsend Capital Inc., based in Chevy Chase, Md.
Shares of Bank of America rose $1.14, or 10.6 percent, to $11.99 in early afternoon trading.
According to New York Times and Wall Street Journal reports, the government is expected to announce Thursday that the Charlotte, N.C.-based bank needs $34 billion in capital based on the results of its “stress tests” on 19 of the nation’s largest financial firms. The New York Times quoted a bank executive, while the Journal report cited unnamed people familiar with the situation.
The stress tests are being used to determine how banks would fare if economic conditions worsened. Any banks that are deemed to need more capital based on potential future losses will be required to address the capital situation immediately, to ensure they have the necessary protection if the economy worsens.
Banks will have an opportunity to raise the funds on their own before the government steps in to help support them.
For Bank of America, the $34 billion shortfall could be covered in multiple ways, including converting into common stock a portion of a $45 billion investment it received from the government as part of the Troubled Asset Relief Program. Bank of America has been among the hardest hit banks by the credit crisis and ongoing recession.
Bank of America’s chief administrative officer, J. Steele Alphin, said in the New York Times report that the bank would have plenty of options to raise capital before it would need to convert taxpayer money into stock.
Virginia police said they found David Kellermann, acting chief financial officer of mortgage company Freddie Mac, hanging in the basement of his Reston, Va., home, dead from an apparent suicide early this morning.
The death was “an active investigation” and there were “no signs of foul play,” Fairfax County police officer Sabrina Ruck said.
Kellermann, 41, and a 16-year veteran of Freddie Mac, had been the company’s CFO since September, after a government takeover of the company after the housing crisis.
Freddie Mac had been criticized for reckless business practices that some argued contributed to the housing and financial crisis. The company is controlled by the government and owns or guarantees about 13 million home loans.
We get these questions a lot, and decided it was time to go beyond the broad answers of smarts, ambition and luck by sorting through our database of wealthy individuals in search of bona fide trends. We analyzed everything from the billionaires’ parents’ professions to where they went to school, their track records in the early stages of their careers and other experiences that may have put them on the path to extreme wealth.
Our admittedly unscientific study of the 657 self-made billionaires we counted in February for our list of the World’s Billionaires yielded some interesting results.
First, a significant percentage of billionaires had parents with a high aptitude for math. The ability to crunch numbers is crucial to becoming a billionaire, and mathematical prowess is hereditary. Some of the most common professions among the parents of American billionaires (for whom we could find the information) were engineer, accountant and small-business owner.
Consistent with the rest of the population, more American billionaires were born in the fall than in any other season. However, relatively few billionaires were born in December, traditionally the month with the eighth highest birth rate. This anomaly holds true among billionaires in the U.S. and abroad.
More than 20% of the 292 of the self-made American billionaires on the most recent list of the World’s Billionaires have either never started or never completed college. This is especially true of those destined for careers as technology entrepreneurs: Bill Gates, Steve Jobs, Michael Dell, Larry Ellison, and Theodore Waitt.
Billionaires who derive their fortunes from finance make up one of the most highly educated sub-groups: More than 55% of them have graduate degrees. Nearly 90% of those with M.B.A.s obtained their master’s degree from one of three Ivy League schools: Harvard, Columbia or U. Penn’s Wharton School of Business.
Goldman Sachs has attracted a large share of hungry minds that went on to garner 10-figure fortunes. At least 11 current and recent billionaire financiers worked at Goldman early in their careers, including Edward Lampert, Daniel Och, Tom Steyer and Richard Perry.
Several billionaires suffered a bitter professional setback early in their careers that heightened their fear of failure. Pharmaceutical tycoon R.J. Kirk’s first venture was a flop–an experience he regrets but appreciates. “Failure early on is a necessary condition for success, though not a sufficient one,” he told Forbes in 2007.
According to a statement read by Phil Falcone during a congressional hearing in November, his botched buyout of a company in Newark in the early 1990s taught him “several valuable lessons that have had a profound impact upon my success as a hedge fund manager.”
Several current and former billionaires rounded out their Yale careers as members of Skull and Bones, the secret society portrayed with enigmatic relish by Hollywood in movies like The Skulls and W. Among those who were inducted: investor Edward Lampert, Blackstone co-founder Steven Schwarzman, and FedEx founder Frederick Smith.
Please visit Forbes.com to check out the full list of billionaire clusters by clicking here.
Forbes.com is the original owner of the content in this article.
Did you notice the additional couple of bucks in your pay check last week? Well as of April 1st, 2009, 95% of hardworking Americans will start receiving benefits from the “Making Work Pay” tax break. The Treasury Department has directed employers to reduce the amount of taxes withheld from people’s paychecks. Individuals will receive a $400 credit, and couples $800, over the course of the year. So expect to see a $13 per week increase in your take home pay. That’s about an additional $65 a month for American Families. Enjoy your bailout funds…
The world renowned Sears Tower in Chicago is going to be renamed Willis Tower with new residents, Willis Group Holdings, a London based insurance broker, moving in late this summer. The 36 year-old Sears Tower is the tallest building in the U.S. and entire Western Hemisphere sitting at 1,450.58 feet (442 m) high.
Along with moving 500 employees into 140,000 square feet on multiple floors of the 110-story building this summer, the Willis Group gets the naming rights as part of its lease agreement with the real estate investment group that owns Sears Tower.
The change is not sitting well with many Chicagoans with sceptics spawning nicknames like “UK Invasion Tower” and “Watchu Talkin’ Bout Tower”. Already an online petition, ItstheSearsTower.com, has been established to protest at the building’s renaming.
It appears that even the playboy of playboy’s cant avoid the financial crunch. Playboy owner and founder Hugh Hefner has listed his private residence, not the playboy mansion itself, up for sale. The private residence which is located on the grounds of the playboy mansion is located on S. Mapleton Drive in Los Angeles, Ca. But don’t count start planning your playmate parties just yet, this 7,318 square feet, 5 bedrooms, 7 bathrooms comes with a near $28 million price tag. So if you have the bank ($$$), then you can purchase the house of every mans’ dream.
Hugh Hefner and wife Kimberley have listed their personal residence, located next door to the Playboy mansion, for sale at $28M.
SELLERS: Hugh and Kimberly Hefner LOCATION: S. Mapleton Drive, Los Angeles PRICE: $27,995,000 SIZE: 7,318 square feet, 7 bedrooms, 5 bathrooms
DESCRIPTION: Exquisite 2 Acre Country English Holmby Hills Manor. ADJACENT TO LOS ANGELES COUNTRY CLUB. This magnificent walled estate includes remarkable grounds and privacy. 2 story entry, spacious living room w/ fireplace & beautiful garden vistas, large family room adjoins the dining room & eat-in gourmet kitchen opening to charming outdoor terrace. Enormous motor court. Rolling lawns, mature trees and wonderful private pool area.
The 7,318 square, 7 bedrooms, 5 bathrooms private residence (Photo:the real estalker)
NEW YORK — Bernard Madoff arrived at the federal courthouse Thursday morning where the disgraced financier is expected to deliver on his lawyer’s prediction that he will plead guilty to all 11 felony charges brought by prosecutors.
The expected plea ends a half-century career that saw him rise to Nasdaq chairman and one of Wall Street’s elite, and could result in a maximum prison term of 150 years.
Madoff, 70, also faces the prospect of coming face to face for the first time since his December arrest with some of the thousands of investors whose accounts prosecutors say he oversaw since at least the 1980s.
A plea would mark the first time Madoff has spoken publicly about the scheme. The judge must hear him describe his crimes in his own words to accept it.
U.S. District Judge Denny Chin said that, assuming Madoff goes forward with plans for a guilty plea, he will give investors a chance to challenge his conclusion whether to accept a guilty plea to securities fraud and perjury, among other charges. He also will let burned investors challenge his decision whether Madoff should be allowed to await sentencing in his $7 million Manhattan penthouse or immediately go to prison.
Victims of Madoff’s Ponzi scheme began arriving at court as early as 8 a.m., two hours before the hearing.
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The man considered by many to be the greatest investor of all time just had his worst year ever.
But the results released Saturday for Warren Buffett’s company, Berkshire Hathaway Inc., also demonstrate how recently, and over time, the investor has positioned his far-flung empire to weather the financial storm.
NFL Commissioner Roger Goodell has voluntarily taken a significant 20% pay cut of his $11 million salary , as the reeling economy has caused for layoffs around the country and around the league. NFL sources confirm that the league has trimmed its staff of 1,100 by 15% in which 169 jobs were either bought out , laid off, or other method.
“All of us understand that it will continue to take collective sacrifice to get through this challenging economic environment, but these and other steps by our office and clubs will enable us to be more efficient and better positioned for future growth,” league spokesman Greg Aiello said.
The NFL has also frozen salaries of league staff for 2009 in addition to reducing expenses by 20% and reducing playoff ticket prices by 10%.
The league’s other concern is its contracts with advertisers. With the auto industry being hit hard during the crisis they are weary of ad sales with the sports biggest advertisers. Ratings were high last season so they hope to retain their advertisers at the same level.
Three-quarters of teams in the NFL are said to be freezing ticket prices at 2008 levels to aid fans wallets.
Now only if the players would only be so noble to do the same.
Well some moves that seem right, are wrong, even when they are right at first. This is the case for Kellogg’s, after they dumped Phelps over the notorious photo of him smoking via bong , now that move might not have been so smart. A large share of Kellogg’s consumers organized a boycott of the brand. Pot activists have spread the message of boycotting Kellogg’s in support of Phelps to the point they have other not pot smoking customers onboard as well. Kellogg’s has even changed is audio recording at their office to address concerns about the brands relationship with Phelps.
The Sillicon Alley Insider reports more bad news for the brand:
Out of the 5,600 company reputations Vanno monitors, Kellogg ranked ninth before it booted Phelps. Now it’s ranked 83. Not even an industry-wide peanut scare inflicted as much damage on the food company’s reputation.
The L.A. Times is reporting that Peter Chernin–President and Chief Operation Officer of News Corp– has chosen to part ways with News Corp. and Rupert Murdoch after 12 years.
No immediate successor has been named, but Murdoch will reportedly assume many of Cherin’s former responsibilities, according to sources in the L.A. Times.
For months, there has been speculation that Chernin–widely known to take contract negotiations down to the wire–might meet an offer he couldn’t refuse. There was no word of a last minute deal.
Chernin played an instrumental part in turning News Corp into the Wall Street global media conglomerate that it is regarded as today. His departure deals a big blow to News Corp, an outlet directly affected by the recession.
News Corp.’s Fox unit has entitled Chernin to a lucrative movie and T.V. production deal, and he is expected to pursue that, according to people close to the situation.
By Adrian Cox in London, Frances Williams in Bern and Joanna Chung in New York
February 20 2009 10:53
As many as 52,000 American customers hid UBS accounts from the authorities in violation of tax laws, a US government lawsuit against the Swiss bank alleged on Thursday.
The Department of Justice filed a suit seeking to force UBS to disclose the holders of accounts with about $14.8bn in assets.
It alleged UBS, Switzerland’s biggest bank, engaged in cross-border securities transactions in the US that it knew violated security laws and helped US taxpayers set up dummy offshore companies.
UBS said it would challenge enforcement of the so-called John Doe summons, which seeks information on the accounts of thousands of US citizens at UBS in Switzerland, where such information is protected by financial privacy laws.
“UBS believes it has substantial defences to the enforcement of the John Doe summons and intends to vigorously contest the enforcement of the summons in the civil proceeding,” the bank said in a statement.
UBS shares fell more than 15 per cent on Friday to €10.81 as investors worried that US tax authorities were widening their investigation into the Swiss bank.
The suit came a day after UBS reached a landmark settlement with the US government in which the Swiss bank admitted having enabled clients to evade taxes, agreed to pay $780m in fines and turn over about 250 client names to the US.
The settlement provoked intensive questioning over the future of Switzerland’s famously-secretive banking industry as international pressure mounts for more transparency.
Hans-Rudolf Merz, the country’s president, said the UBS settlement would not compromise the confidentiality of the Swiss banking industry.
“Banking secrecy remains intact,” Mr Merz, also Switzerland’s finance minister, told a press conference in Bern.
He noted that banking secrecy “does not protect tax fraud” and can be lifted if clients are suspected of a crime that counts as a crime in Switzerland as well as abroad.
Switzerland’s banking system has thrived under 75-year-old rules defending confidentiality. While banks have benefited from Switzerland’s economic stability and political neutrality, they have had a significant competitive advantage in being able to protect customers from the prying eyes of hostile home governments, associates and tax authorities.
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Video of Press conference shown below (Text version @ very bottom):
The description of President Obama’s $75 billion home foreclosure plan as taken from the White House Blogs:
9 million +
The housing plan President Obama unveiled today could directly help up to 9 million people — but indirectly, it will help all of us.
“In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen,” President Obama said today in Phoenix, AZ. “But if we act boldly and swiftly to arrest this downward spiral, every American will benefit.”
He laid out the four key elements of the Homeowner Affordability and Stability Plan:
refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
new incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
additional reforms designed to help families stay in their homes
“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly,” the President said, “by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.”
We’ve put together a few Q&A that will help you understand the plan, how it will work, and how it will affect you:
Questions and Answers for Borrowers about the Homeowner Affordability and Stability Plan
Borrowers Who Are Current on Their Mortgage Are Asking:
What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
*For a full list of Q&A, vist www.whitehouse.gov by clicking here
**Here is the prepared text of Obama’s speech as prepared for delivery**:
I’m here today to talk about a crisis unlike any we’ve ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn’t enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can’t afford to leave and you can’t afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you’ve gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see “For Sale” signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they’ve fallen by 43 percent.
Even if your neighborhood hasn’t been hit by foreclosures, you’re likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they’re cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.
The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that’s what I want to talk about today.
The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.
Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
Here is how my plan works:
First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Today, as a result of declining home values, millions of families are “underwater,” which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home’s worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don’t know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren’t. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.
My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.
If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we’ll make up part of the gap between what the old payments were and what the new payments will be. And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower’s income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
We’re also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.
My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That’s the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.
Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation’s capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.
AP – President Barack Obama signs the $787 billion economic stimulus bill, as Vice President Joe Biden looks on at left, at the Denver Museum of Nature and Science in Denver on Tuesday, Feb. 17, 2009. (AP Photo/Darin McGregor, Pool)
Earlier Tuesday, President Obama and Vice President Joe Biden flew to Denver, Colorado where they would hold a press conference to further support the stimulus bill that was passed last week. It is there that President Obama signed into lawa the American Recovery and Reinvestment Act into law, but he was careful not to declare it mission accomplished.
“Today does not mark the end of our economic troubles,” Obama said
before signing the bill at the Denver Museum of Nature and Science.
“But it does mark the beginning of theend – the beginning of
what we need to do to create jobs for Americans scrambling in the wake
of layoffs; to provide relief for families worried they won’t be able
to pay next month’s bills; and to set our economy on a firmer
foundation.”
After White House Press Secretary, Robert Gibbs, wouldn’t rule out a second stimulus package .
Click Here to Read the bill. You can also keep keep of the exependitures @ Recovery.gov
Below is a chart of how the money will be spent:
Where your money is going….
Here is a short video by the Associated Press of what the stimulus may do for you:
