Bernanke Delivers Fed Report; Warns Oil Prices Could Threaten Economy

Photo Courtesy - Alex Wong/Getty Images(WASHINGTON) -- In delivering the Federal Reserve's semi-annual monetary policy report to Congress Tuesday, central bank chairman Ben Bernanke said the nation's economic recovery will likely speed up this year compared with last, but a "relatively weak" job market and an "exceptionally weak" housing sector remain problematic.

"Following the stabilization of economic activity in mid-2009, the U.S. economy is now in its seventh quarter of growth; last quarter, for the first time in this expansion, our nation's real gross domestic product matched its pre-crisis peak.  Nevertheless, job growth remains relatively weak and the unemployment rate is still high," Bernanke told a Senate Banking Committee hearing Tuesday morning.

"If the rate of economic growth remains moderate, as projected, it could be several years before the unemployment rate has returned to a more normal level," he added.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he cautioned.  "Likewise, the housing sector remains exceptionally weak."

In addition, Bernanke also warned lawmakers that rising oil prices could pose a threat to economic growth, but the most likely outcome is a "temporary and relatively modest increase in U.S. consumer price inflation."

"Although overall inflation is low, since summer we have seen significant increases in some highly visible prices, including those of gasoline and other commodities," he observed.  "Notably, in the past few weeks, concerns about unrest in the Middle East and North Africa and the possible effects on global oil supplies have led oil and gasoline prices to rise further."

"The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation -- an outlook consistent with the projections of both FOMC [Federal Open Market Committee] participants and more private forecasters.  That said, sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored," he added.

Copyright 2011 ABC News Radio


Christian Dior Fires John Galliano for Alleged Anti-Semitic Rant

Photo Courtesy - Getty Images(PARIS) -- Christian Dior axed designer Galliano Tuesday after a video surfaced online that appears to show the designer spewing anti-Semitic remarks.

In the video, posted Monday on the website of the British tabloid The Sun, Galliano launches into a tirade at the Paris bar La Perle, declaring, "I love Hitler" and telling patrons that "people like you would be dead," and that "your mothers, your forefathers" would all be "gassed." It's unclear when the video was recorded.

Last week, in a separate incident, a Paris couple accused Galliano of verbally abusing them at La Perle. He was suspended from his post as Dior's creative director on Friday after those allegations.

In a statement released Tuesday, Dior's CEO, Sidney Toledano, said, "I unequivocally condemn the statements made by John Galliano which are in total contradiction to the longstanding core values of Christian Dior."

Since joining Dior in 1996, Galliano, 50, has used his provocative sense of style to push the luxury label to the top of the fashion heap. Celebrities covet his creations; Nicole Kidman and Sharon Stone wore Dior gowns to Sunday's Academy Awards.

Copyright 2011 ABC News Radio


'Consumer Reports' Announces its Top Picks for Cars in 2011

Toyota Prius. Photo Courtesy - Toyota(YONKERS, N.Y.) -- Consumer Reports announced its annual Top Picks for cars Monday, which lists the best models in 10 distinct categories as chosen by the magazine.

Two of the top choices for 2011 include models from American automakers Ford and Chevrolet -- the Mustang and Avalanche, respectively.  Both vehicles are among six new models named to the magazine's list.

Meanwhile, for an eigth consecutive year, the Toyota Prius was chosen as the top "Green Car" for getting the best fuel economy -- 44 mpg overall -- of any car tested by Consumer Reports.

The magazine selects its Top Picks after running dozens of tests on each individual vehicle to evaluate its braking, handling, comfort, convenience, safety, and fuel economy, among other things.

Here are Consumer Reports' Top Picks for 2011:

-- Budget Car: Honda Fit

-- Small Car: Hyundai Elantra

-- Family Sedan: Nissan Altima

-- Small SUV: Toyota RAV4

-- Green Car: Toyota Prius

-- Family SUV: Kia Sorento

-- Sporty Car: Ford Mustang

-- Family Hauler: Toyota Sienna

-- Sports Sedan: Infiniti G37

-- Pickup Truck: Chevrolet Avalanche

Copyright 2011 ABC News Radio


Bernie Madoff Says He Was a 'Basket Case' After Son's Suicide

Photo Courtesy - Getty Images(NEW YORK) -- Bernie Madoff, the Wall Street trader convicted of scamming thousands of investors out of billions, said he was a "basket case" in prison after he learned of his son's suicide.

"I cried for well over two weeks after he died," Madoff told New York Magazine in a taped conversation that aired exclusively on ABC News' World News With Diane Sawyer. "They worried about me. They woke me up every hour on the hour to make sure that I was OK, the guards here. They instruct your roommate, 'be careful' and watch you. I was a basket case for weeks.

"Not a day goes by that I don't suffer. I may sound OK on the phone – Trust me, I'm not OK. And never will be," he said.

Madoff said that when he finally told his sons, Mark and Andrew, about his massive fraud scheme before he was arrested, Mark just stood motionless.

"That's when I broke down and told them. I started crying and I said, you know, explained to them what the deal was -- that I owe all of this money out and I'm not going to be able to cover it and so on and so forth. They were like stunned. I was crying. Andy, I remember, took me in his arms. He felt sorry for me at that stage," Madoff said. "Mark was standing there in shock."

Madoff said after that his two sons spoke to their lawyers, turned their father in to the authorities and never spoke to him again. After his father was convicted and sentenced to 150 years in prison, Mark, 46, committed suicide in December 2010 by hanging himself with a dog leash in his Manhattan apartment.

But even before his son's suicide, Madoff told New York Magazine the collapse of his financial house of cards was a "nightmare" for him.

"I mean, you know, I destroyed our family... It was a nightmare for me. It was only a nightmare for me. It's horrible," Madoff said. "I had more than enough money to support any of my lifestyle and my family's lifestyle. I didn't need to do this for that. I allowed [myself] to be talked into something, and that's my fault."

In the interview, that spanned more than a dozen phone calls with New York Magazine reporter Steve Fishman, Madoff never said who talked him into starting his scheme, but said that though his scam cost many their life savings, he was the long-suffering victim.

"Look, imagine going home every night, not being able to tell your wife, living with this ax over your head, not telling your sons, my brother, seeing them every day in the business and not being able to confide in them," he said.

Fishman told ABC News it was that self-pity that made it seem as if Madoff "was in denial at some level."

"Bernie doesn't understand that he's ruined people's lives," he said.

As his scheme kept growing and Madoff got more and more deeply involved in the fraud, Madoff said he always believed he would find a way out.

"I kept on sort of telling myself that some miracle was going to happen or that I was going to be able to work my way out of it. Ok? I just didn't know what that was," he said. "As far as the timing was concerned, I would say probably it became clear to me in the, I would say early 2000s... Because by then the number was so astronomical. You know, I didn't know what I was hoping for quite frankly."

Madoff: 'Very Few People' Will Lose Their Principal Investment

In the interview, Madoff once again repeated claims that the banks and funds "had to know" something was wrong with his investments.

"I wouldn't give them any facts, like how much volume I was doing. I was not willing to have them come up and do the due diligence that they wanted," Madoff told New York Magazine. "I absolutely refused to do it. I said, 'You don't like it, take your money out,' Which of course they never did."

Though a trustee representing the victims of Madoff's Ponzi scheme is in the midst of several lawsuits with major investors over ill-gotten profits, Madoff told New York Magazine "most" of his individual clients were not net losers in the fraud.

"I made a lot of money for them," he said. "I was making 20 percent returns for them for years -- all the A and B clients, all my friends, everybody else. It was the people that came in very late in the game that got hurt.

"I'm confident that when this thing is all finished, [that] very few people, if any, will lose their principal," he said.

One group of "friends" that does stand to lose their principal, along with billions in profits, is the Wilpon family, who own the Mets and who were long-time investors with Madoff.

Fred Wilpon said earlier this month he knew "not one iota" about Madoff's multi-billion-dollar investment fraud, and that his family would be vindicated of any complicity in the multi-billion-dollar Ponzi scheme, despite a lawsuit claiming otherwise.

"We didn't do anything wrong," Wilpon said at the baseball team's Port Lucie, Florida spring training camp. "If anything we trusted a friend for a very long time, and as I told you a few months ago, that betrayal was very difficult for me."

"This was a man who we were friends with for 35 years and investors for 25 years."

A recent court filing by the trustee representing Bernie Madoff's victims, and a previous interview with the Ponzi schemer himself, have renewed public scrutiny of the long business and personal relationship between the Madoff and Wilpon families, and raised questions about the fiscal health of the National League franchise.

While Madoff assured a New York Times reporter that the Wilpons were blameless, bankruptcy trustee Irving Picard has asked the Mets owners for $300 million and released emails showing that there were doubts about Madoff's profits within the Wilpons investment firm.

ABC News chief investigative correspondent Brian Ross told The Charlie Rose Show on Feb. 16 that representatives of Picard's firm say Madoff seems to be protecting "certain people," including "close friends who were mostly winners in this scheme," and that "Picard is going after [the Wilpons] in a very aggressive way."

"Between $300 [million] and $1 billion is the number that they think they'll get out of him," said Ross on "The Charlie Rose Show." "Three-hundred-million would be the fictitious profits they took out and then under the law if they can show that the Wilpons knew it was a fraud they're not supposed to get back the capital they put in initially."

Copyright 2011 ABC News Radio


Tax Tip: Deducting for Charitable Donations

Photo Courtesy - Getty Images(NEW YORK) -- Giving money to your favorite charity qualifies as a tax deduction, but "the key is if you make a charitable contribution, get a receipt or make sure your bank account shows who you've made a charitable contribution to,” says Eric Smith with the IRS.

The money must go to a registered nonprofit group, religious organization or charity.

Have you donated clothing to organizations like Goodwill or the Salvation Army?

“If you can keep a list of – ‘Okay, there were four pair of pants and two shirts and the pants are valued at $3 and the shirts are at $2.’ That would be really good documentation to be able to provide."

Expenses involved in charitable work may also be deductible.

Copyright 2011 ABC News Radio


Americans Spend 15 Percent of Income on Unnecessary Expenses

Photo Courtesy - Getty Images(NEW YORK) -- Americans work hard for their money, but a new survey reveals we spend at least 15 percent of our income to satisfy vices or keep ourselves amused.  According to 24/7 Wall St., an American household with an income of $63,000 spends, on average, more than $8,000 annually on goods and services it doesn’t actually need.

The study by 24/7 Wall St. identified ten categories of unnecessary purchases:

1. Food Away From Home
Annual amount spent per household: $2,619
Percent of total annual expenses: 5.3 percent

2. Gifts
Annual amount spent per household: $1,067
Percent of total annual expenses: 2.2 percent

3. Television, Radio, and Sound Equipment
Annual amount spent per household: $975
Percent of total annual expenses: 2 percent

4. Pets, Toys, Hobbies, and Playground Equipment
Annual amount spent per household: $690
Percent of total annual expenses: 1.4 percent

5. Lodging, Vacation Homes and Hotels
Annual amount spent per household: $672
Percent of total annual expenses: 1.4 percent

6. Fees and Admissions
Annual amount spent per household: $628
Percent of total annual expenses: 1.3 percent

7. Alcohol
Annual amount spent per household: $435
Percent of total annual expenses: 0.9 percent

8. Entertainment Equipment and Services, Nonessential
Annual amount spent per household: $400
Percent of total annual expenses: 0.8 percent

9. Tobacco
Annual amount spent per household: $380
Percent of total annual expenses: 0.8 percent

10. Apparel Products and Services
Annual amount spent per household: $249
Percent of total annual expenses: 0.5 percent

Copyright 2011 ABC News Radio


Rising Oil Prices Hurt Drivers and Gas Station Owners Alike

Photo Courtesy - Getty Images(LOS ANGELES) -- The energy department says the average price of a gallon of unleaded regular is now $3.38 -- an increase of 19 cents over last week.  But gas station owners say not to place the blame on them.

One gas station owner, who wished to remain anonymous, told ABC News that the current gas prices are "killing him."  He said that in order for him to stay competitive, he's got to bring prices down.  But the oil companies are shooting them up so fast and he's only making a few pennies off of each gallon of gas sold.

His gas is now selling for $3.85 per gallon for low grade.  High grade is now over four dollars.  But he says that off of that, he might make four cents a gallon at most.

Many drivers are trying to find ways to save money to fill up their tanks.

"Cutting back on going out to eat," said Los Angeles driver Richard Hawkes.  "That's one of the biggest things -- cutting down on food." 

Hawkes, who drives a Chevy Suburban, says current gas prices cause him to pay $90 to fill his tank.

Copyright 2011 ABC News Radio


Pizzeria Owner Tries to Sabotage Rivals with Mice

File Photo Courtesy - Getty Images(UPPER DARBY, Pa.) -- Cops arrested pizza man Nicholas Galiatsatos on Monday after a crosstown rival allegedly caught the owner of Bella Pizzeria in Upper Darby, Pa., trying to stash bags of live mice in two competing pizzerias.

"It's insane. It's crazy. I never heard of anything like that. I never witnessed anything like that," Fanis Facas, the owner of Verona Pizza told ABC affiliate WPVI-TV.

Facas said a man entered his restaurant Monday carrying a bag and made his way to the bathroom.

"He goes to the bathroom and I heard a noise going on in the bathroom. I thought it was just him banging around or something, so I checked after he had gone out of the bathroom," Facas said.

Inside the restroom, Facas said he found footprints on the toilet seat and a ceiling tile that had been tampered with. Upon further investigation, he said, he found a bag stashed in the ceiling filled with live mice.

Facas alerted two police officers who happened to be in the restaurant having lunch. The cops spotted Galiatsatos crossing the street and entering another pizzeria with another bag under his arm. When he noticed the police, Galiatsatos allegedly ran into Uncle Nicks and discarded the bag of mice in a garbage can. Cops found it and arrested him.

Police said they believe Galiatsatos was hoping to drum up business for his own struggling pizzeria by discrediting his rivals.

Copyright 2011 ABC News Radio


Taco Bell Breaks Down Its Questioned Beef Recipe in New Ads

Photo Courtesy - Joe Raedle/Getty Images(IRVINE, Calif.) -- Stung by a lawsuit in which a woman accused the fast-food giant of using mainly filler in its meat products, Taco Bell hopes to offset negative public perception with a series of new TV and radio spots designed to reassure customers of what really goes into their tacos.

In one commercial, someone presumed to be working for the company claims, "Our seasoned beef is 88 percent premium ground beef and 12 percent signature recipe.  If you want to see that signature recipe, go to  It's right there."

Futhermore, Taco Bell's Greg Creed posted a YouTube video in which he says the 12 percent "signature recipe" consists of water, oats, spices and cocoa powder to provide flavor, texture and moisture.

Still, the marketing ploy may not be enough to get people to come back, so Taco Bell is offering its $2.39 Crunchwrap Supreme for just 88 cents for a limited time.

Copyright 2011 ABC News Radio


Economists Predict Stronger Growth over Next Two Years

Photo Courtesy - Getty Images(NEW YORK) --  Business economists predict stronger growth for this year and next in comparison to what an earlier estimate had predicted, according to a new report released Monday.

The latest forecast calls for annual growth this year of 3.3 percent, up from last November's estimate of 2.6.  Richard Wobbekind, president of the National Association for Business Economics, says companies are planning to spend more.

"Both this year and next year, we're expecting on equipment and software to have double-digit growth," Wobbekind says.

When ask if rising global oil prices could lead to a slowdown, Wobbekind said, "It certainly has impact."

So far, says Wobbekind, oil prices have not gone up enough to lead to slower growth.

Copyright 2011 ABC News Radio

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