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Friday
Dec032010

Jobs Report Disappointing, Unemployment Up to 9.8%

Photo Courtesy - Getty Images(WASHINGTON) -- The nation's employers increased payrolls by 39,000 in November, significantly worse than the 130,000 increase analysts expected.

Private sector companies added only 50,000 workers, far fewer than the 140,000 predicted.
 
The jobless rate jumped significantly from 9.6 to 9.8 percent.

A net of 7.5 million jobs have been lost since Dec. 2007, the first month of the recession.

“There's no denying that the report is disappointing,” Vice President Biden said from the Roosevelt Room of the White House, “because we were, quite frankly, hoping for even stronger job growth.”

The vice president said that the bottom line is that there has clearly not been enough economic progress.

“There is too much pain out there. There's still millions of people out of work and trying to make do with -- without a paycheck and without the dignity or the respect that goes with a job.”

Copyright 2010 ABC News Radio

Friday
Dec032010

JP Morgan Suspected Madoff Months Prior to Arrest

Photo Courtesy - Mario Tama/Getty Images(NEW YORK) -- Documents obtained by ABC News show that two months before Bernie Madoff's arrest, JP Morgan Chase suspected that his investment returns were probably "too good to be true."  The bank, however, was still doing business with Madoff when federal authorities discovered his Ponzi scheme.

Lawyers representing the victims of Madoff's massive investment fraud filed a $6.4 billion lawsuit against JP Morgan Chase Thursday, claiming the bank continued its relationship with Madoff despite having documented suspicions about him.

The lawyers' complaint remains sealed, and lawyers did not specify in a public statement on the lawsuit how JP Morgan had documented those suspicions, but ABC News has obtained a "Suspicious Activity Report" that the London office of JP Morgan Chase filed with the U.K.'s Serious Organized Crime Agency in October 2008. The document -- filed two months prior to Madoff's arrest -- specifically notes Madoff's investment returns were most likely "too good to be true."

The report shows the company was already removing its money from funds that did business with Madoff -- so-called "feeder funds" -- by the time it alerted the British government to its concerns.  The London office did not issue a similar alert to U.S. authorities, and an Inspector General's Report from the U.S. Securities and Exchange Commission issued in the wake of Madoff's arrest did not mention any warnings from JP Morgan.

The company filed the report, an attorney for JP Morgan would later say, after a representative of a Madoff feeder fund became angry when JP Morgan began removing money from the fund.  The representative of Geneva-based Aurelia Finance, which was acting as an advisor to one of the feeder funds, allegedly hinted at violence against a JP Morgan employee involving Aurelia's "Colombian friends" who could "create havoc."

But the report also emphasizes concerns about Madoff based on "the investment performance achieved by its funds which is so consistently and significantly ahead of its peers year-on-year, even in the prevailing market conditions, as to appear too good to be true -- meaning it probably is."

It also cites Madoff's "lack of transparency" surrounding his trading techniques, the "implementation" of Madoff's investment strategy, the "identity" of its over-the-counter (OTC) option counterparties, and Madoff's "unwillingness to provide helpful information."

As a result, the report says, JP Morgan has "sent out redemption notices in respect of one fund, and is preparing similar notices for two more funds -- referring funds Lagoon, Fairfield Sentry/Sigma Ltd., and Herald Fund SPC."

While the London office of the bank sent its warning letter to British authorities, and withdrew its funds from the Madoff feeder funds, it did not send a similar notification to U.S. authorities.

Copyright 2010 ABC News Radio

Thursday
Dec022010

'We Did Not Stop Hosting WikiLeaks Because of Government, Site Attacks,' Says Amazon

Photo Courtesy - ABC News(NEW YORK) -- Amid reports that government inquiry caused Amazon not to serve WikiLeaks, Amazon Web Services (AWS) posted a message on its blog stating "that is inaccurate."

AWS Thursday claimed that WikiLeaks simply did not follow the terms of service, which was cause for removal from the server.  For example, Amazon's terms state that one must "represent and warrant that you own or otherwise control all of the rights to the content...that use of the content you supply does not violate this policy and will not cause injury to any person or entity."

Amazon said it was "clear that WikiLeaks doesn't own or otherwise control all the rights to this classified content."

AWS, which has been storing data for its customers for over four years, also said that controversial information is not an issue for them as much as violation of terms.

"Some of this data is controversial, and that's perfectly fine.  But, when companies or people go about securing and storing large quantities of data that isn't rightfully theirs, and publishing this data without ensuring it won't injure others, it's a violation of our terms of service, and folks need to go operate elsewhere."

Copyright 2010 ABC News Radio

Thursday
Dec022010

Fact Check: Who Gets Hurt, Who Gets Helped If Bush Tax Cuts Expire?

Photo Courtesy - ABC News(WASHINGTON) -- On Thursday, with the clock running down on the Bush tax cuts, Democrats in the House voted to make them permanent, but not for the wealthiest Americans.

Democratic senators, like Charles Schumer, D-N.Y., and Claire McCaskill, D-Mo., have said that continuing the Bush-era tax cuts for America's richest will give the millionaires a tax break, while Republicans in Congress, like the next Speaker of the House, Rep. John Boehner, R-Ohio, have said tax hikes will kill jobs.

So who's right? Will letting the top Bush tax cuts expire hit small business or the super-rich? The answer is both.

If the top tax cuts expire, someone making $1 million a year would see their taxes go up by about $43 thousand, and for someone making $10 million, it's a tax hike of more than $450 thousand.

But small business owners, like Drew Greenblatt, would be hit, too. When ABC News visited his 30-employee wire basket company in Baltimore earlier this year, he said an increase in the top tax rate would cost him about $40 thousand -- and likely at least one employee.

Small businesses aren't the only concern. What about the deficit? Extending tax cuts on the top brackets would add to the deficit, as would extending any of the cuts.

Extending the tax cuts for those with incomes under $200 thousand a year, as the president and Democrats are fighting for, will add an estimated $3.1 trillion to the deficit over 10 years. Extending any tax cuts for those over $200 thousand a year adds another $800 thousand to the deficit.

These figures are just estimates, though. According to Diane Swonk, chief economist at Mesirow Financial, a tax increase could bring in less than expected.

"Many of the wealthier individuals in particular will find ways to hide their money or they'll give more to charity," she said.

Despite what the politicians say, the truth is there is not much certainty with any of these numbers. The IRS doesn't keep records of how many truly small businesses pay taxes at the top income tax level, so no one knows for sure just how many businesses -- and jobs -- would be affected.

Copyright 2010 ABC News Radio

Thursday
Dec022010

Christian Leaders Protest Apple's Removal of 'Anti-Gay' App 

Photo Courtesy - Apple(NEW YORK) -- It's been said that Apple products are instruments of the divine, but it seems that some religious leaders think the tech company is on the wrong side of God on at least one issue -- an iPhone application opposing gay marriage.

After Apple removed the controversial application from its iTunes app store, a group of Christian leaders sent a letter to the company protesting the decision.

The application, called Manhattan Declaration, was a "call of Christian Conscience" that advocated "the sanctity of life, the dignity of marriage as the union of one man and one woman, and religious liberty," according to its website.

In a letter sent to Apple CEO Steve Jobs earlier this week, the religious leaders said they were disappointed to learn the company stopped selling the application, which included the text of the "Manhattan Declaration."

"We do not know exactly why the app was pulled, as we have yet to receive any explanation from Apple, but we assume that it was the result of pressure brought to bear by some who, for blatantly ideologically partisan reasons, claim that the Manhattan Declaration is bigoted, or otherwise offensive," they said. "We hope that you will see how wrong it would be to let one side shut down the opposing side in a debate by slandering their opponents with prejudicial labels such as "bigot" or "homophobe."

The letter was signed by Charles Colson, former aide to President Richard Nixon and head of The Colson Center for Christian Worldview, Dr. Robert George, professor of jurisprudence at Princeton University, and Dr. Timothy George, dean of Beeson Divinity School.

The three leaders urged Apple to reinstate the application and are calling on their own supporters to e-mail Apple and sign a petition. According to the Manhattan Declaration website, more than 16,000 people have already signed their names in support.

In a statement, Apple said, "We removed the Manhattan Declaration app from the App Store because it violates our developer guidelines by being offensive to large groups of people."

The iPhone application initially disappeared from the app store in late November after more than 7,000 people signed a Change.org petition urging Apple to delete it.

Copyright 2010 ABC News Radio

Thursday
Dec022010

Mylanta Recall Adds to Johnson & Johnson Woes

Photo Courtesy - Johnson & Johnson/ Mylanta [dot] com(NEW BRUNSWICK, N.J.) -- Health care product giant Johnson & Johnson is adding to its growing list of recalls this year -- this time a dozen types of Mylanta and one Alternagel antacid.

The wholesale and retail level recall was not done due to "adverse effects," the company said, but because an internal review showed the bottles failed to note the alcohol content of some flavoring agents.

"Certain flavoring agents contribute small (<1%) amounts of alcohol," the company said on the Mylanta website.  "It is unlikely that use of these products will cause either absorption or alcohol sensitivity related adverse events."

Johnson & Johnson advised that there was no consumer safety concern related to the recall and the products can still be used as directed.

It's yet another blow to the company whose manufacturer has already made more than half a dozen recalls this year alone, including the largest recall in children's medicine history.

Copyright 2010 ABC News Radio

Wednesday
Dec012010

Federal Reserve Details Massive $3.3 Trillion in Crisis Lending

Photo Courtesy - Getty Images(WASHINGTON) -- The Federal Reserve, in an unprecedented move required by the Dodd-Frank financial reform legislation, provided details of which banks and firms took advantage of a series of lending programs during the financial crisis.
 
Details of some $3.3 trillion in loans were posted to the Federal Reserve’s website early Wednesday afternoon. The data covers 21,000 lending transactions in the programs from December 2007 to July 2010.
 
In the data, Fed watchers can see which firms accessed the programs and how much lending these firms accessed. As one might expect, big banks were some of the most prolific users of the Fed’s largesse. But dozens of “Main Street” companies like McDonald's, Verizon, Harley-Davidson and General Electric also accessed the Fed lending programs. Even large foreign banks took out Fed loans -- through their US subsidiaries.
 
“After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America,” said Senator Bernie Sanders, I-Vt., in a post-release statement. “Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Copyright 2010 ABC News Radio

Wednesday
Dec012010

Fact Check: Hard Steps Ahead to Reduce the Federal Deficit

Photo Courtesy - Getty Images(WASHINGTON) -- A presidential commission had a wakeup call for the nation Wednesday, releasing a document that outlines the tough choices the country faces to reel in its runaway debt, now totaling almost $14 trillion.

Two of the toughest choices involve Social Security and Medicare, programs that have long been considered so untouchable that they're known as the third rail of American politics.

So what are the facts on how the deficit can actually be reduced? On Wednesday, ABC News spoke to economists who have advised both Republican and Democratic presidents, asking whether it's possible to reduce the deficit without touching those big-ticket items.

When it comes to Social Security, the commission recommends slowly raising the retirement age from 66 to 69 by the year 2075. Commission members would also reduce benefits from the program.

As unpopular as that might seem, is there a way to avoid changes to Social Security and still fix the deficit?

"No," said Gregory Mankiw, the former chairman of President Bush's Council of Economic Advisors. "Social Security is part of the problem and it has to be addressed."

Mankiw believes that the commission's bipartisan proposal makes sense, and so does Jeff Frankel, who held the same chairmanship during the Clinton Administration.

Economists say that you have to look at the pie chart showing the nation's spending. Social Security consumes some 20 percent of the federal budget, and Medicare takes a bite nearly as big.

Experts told us there's simply no way to rein in the deficit without touching Medicare. The panel's tough guidelines call for a freeze on Medicare payments to doctors through 2020.

"Medicare is part of the problem, an even bigger part of the problem than Social Security," said Mankiw, pointing out the aging baby boomers who will cause healthcare spending to skyrocket in coming years.

Clinton's advisor, Frankel, was again in agreement.

"We have no choice," he said.

Lastly, there's the issue of defense spending. It accounts for roughly 20 percent of the federal budget and has long been considered untouchable by many. But according to our economists from both sides, it must be cut to reduce the overall deficit.

The panel's suggestions may be tough, but according to these men who served Bush and Clinton, they're the only only option.

Copyright 2010 ABC News Radio

Wednesday
Dec012010

Banks Pressured to Buy Back Billions in Sour Home Loans

Photo Courtesy -- Getty Images(NEW YORK) – Banks who made failed mortgages that contributed to the housing market meltdown may be forced to buy back billions in bad mortgages.

The Financial Times reports that Assured Guaranty, a bond issuer which has been one of the biggest claimants against banks like JP Morgan and Bank of America, has demanded that such banks hand over information that will help determine just how many of their mortgages failed to meet underwriting standards.
 
If underwriting standards fell short, the banks would be required to buy back the mortgages. Assured Guaranty alone uncovered $4.7 billion in mortgage loan breaches after reviews of $5.3 billion in files.

It has not been determined what amount of those loans banks will be forced to repurchase.

Copyright 2010 ABC News Radio

Wednesday
Dec012010

Record $1 Billion Spent on Cyber Monday

Photo Courtesy -- Getty Images(RESTON, Va.) – Cyber Monday brought in over $1 billion this week to become the largest online shopping day in U.S. history.

comScore says online spending Monday, driven by workplace shopping and an increase in spending per buyer, surpassed the $1 billion mark for the first time in history.
 
The one-day figure represents a 16-percent increase from a year ago, with nearly half of all money spent on U.S. websites coming from work computers.

Cyber Monday is the name given to the Monday after Black Friday, the biggest shopping day of the year.

Copyright 2010 ABC News Radio







ABC News Radio