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Check Your Statement: Citibank Users Found iPad App Payments Made Twice

2012-02-10T23:08:43Z

Customers who use Citibank's iPad bill-paying app might want to pay closer attention to their bank statements: A technological glitch recently caused the app to charge an undisclosed number of customers twice for bank payments.

As early as last summer, Citibank received anonymous complaints, sent to the Apple App Store, about the double charges, according to Andrew Brent, a Citi spokesman. Months later, in late December, the bank detected that its app was to blame for problem. Since then Citibank has alerted affected users and reimbursed them for extra charges and any fees incurred.

Brent attributed the lag between when the company first found out about the issue (in July) and when officials began alerting customers (in December) to the small number of complaints involved. One user had anonymously reported in July that a charge was duplicated as a result of double tapping the screen, according to Brent. He added that there was nothing to suggest that the incidents were linked to the iPad app itself.

Citi later discovered that the app had been programmed to reattempt any transaction disrupted by a network error on the first try. The bank launched an update to its iPad app on Jan. 31. The glitch was first reported by The New York Times on Thursday.

The issue affected less than 2 percent of transactions made via the iPad app, according to Brent. He declined to disclose the number of customers who use the bank's iPad app and how many people were affected by the glitch.

"We take seriously the functionality of our products and services as well as the satisfaction of our clients," Brent stated in an email. "Upon discovering a technical bug in our Citibank for iPad app had caused a limited number of clients to encounter duplicate payments and/or transfers, we immediately fixed the technical issue. Even more important, we have reached out to clients who were impacted to ensure their individual situations are resolved completely."

Citigroup -- which aims to be "the world's digital bank," according to Bloomberg -- has encountered a series of tech glitches in recent years. Two-hundred thousand Citibank credit card holders fell victim to a hacker attack last June that exposed customers' personal data.

In 2010, Citigroup admitted that the bank's iPhone app stored users' confidential information on their phones, making the data vulnerable, according to the Wall Street Journal. The bank subsequently released an updated version of the app that it said patched up the glitch.

According to American Banker, 25 percent of all mobile banking apps earned a "fail" rating as a result of security flaws.

Bill Gunderson: Can a Businessman Run a Country?

2012-02-10T23:01:21Z

President Obama sure likes to hold Warren Buffett up as an example these days. After all, it is Warren Buffett that is dying to pay a higher tax rate. Never mind that he is currently fighting the IRS over a paltry billion dollars or so in unpaid taxes.

Warren is also hot and bothered about his secretary paying a higher effective tax rate than most millionaires and billionaires. Of course, we still have not seen her tax return, so we really don't know what rate she does pay. I guess it does not matter however, that Mitt Romney paid several million in taxes while Buffet's secretary may have paid a few thousand. Who's counting anyway?

My question to you the reader is this: If God forbid, something should happen to Mr. Buffett, would he feel more comfortable hiring Barack Obama or Mitt Romney to take over the management of Berkshire Hathaway? Oh, I know what you are thinking, government cannot be run like a business; it takes politicians to get things done.

It is thinking like this that has helped create a current debt load of $15 trillion dollars! Do you think that Mr. Buffett would have gotten us into the mess that we are currently in had he been running the country over the last 10 years? I highly doubt it. Warren still lives in the same humble abode that he has lived in for years. He is known for being pretty frugal. Oh, I forgot however that Mr. Buffett is a businessman though. We can't have a businessman running our country.

Actually, it would be real interesting to know where we would be today had Warren Buffett been running the country for the last 10 years. Maybe he would have consulted with other businessmen like Steve Jobs of Apple Computer or Jim Skinner of McDonald's about the economy and job creation. Instead our president goes to CEOs like Jeffrey Immelt of General Electric and Antonio Perez of Eastman Kodak to get his advice about job creation.

Is that the same Jeffrey Immelt who has had the stock of GE going backwards by an average of 3.3 percent per year over the last 10 years? Is that the same Antonio Perez who just had his company file for bankruptcy? Eastman Kodak was once a member of the Dow Jones Industrial Average, it is now a penny stock! I don't know about you, but when I want to lose weight, I seek out a skinny diet counselor.

Now back to Berkshire Hathaway. What does President Obama's resume look like when it comes to investing in companies? Let's see, there was some $520 million that went into Solyndra. How did that one turn out? Did the investment go there on merit or favoritism? What would Buffet's shareholders say if Warren made an investment that went from $520 million to zero in the span of 18 months?

How did the Obama administration's investment in Beacon Power go? Oh well, it is just taxpayer money that we don't have. How about the billions that went into the so-called stimulus program? What kind of return are we getting on that one?

While it is intriguing to think where our country might be today had a crackerjack businessman like Warren Buffett been running the show, it is an absolutely frightful thought to think where Berkshire Hathaway might be today, had Mr. Obama been at the helm for the last 10 years. This may sound like a harsh observation, but close your own eyes and ponder these questions for a minute.

The bottom line is this: What we have been doing has not been working. The hole that we have to climb out of here in America is getting deeper and deeper and deeper. In fact, it is getting so deep, I think I can see Greece-austerity, strikes, riots, and bailouts anyone?

We need a different skill set in the White House right now. We need a turnaround expert in the worst way. Oh, I forgot that a businessman cannot run a country. If a bunch of politicians can run the country into the ground, I feel pretty confident that it will take some businessmen to turn it around.

Some States Using Funds From Foreclosure Deal To Close Budget Gaps

2012-02-10T22:39:34Z

Well, that was fast.

Two states have already announced that they won't be using all of their share of the $25 billion allocated in Thursday's historic foreclosure settlement to pay its intended recepients -- the homeowners and borrowers who saw the housing market collapse beneath their feet.

Instead, in some areas, a share of those dollars is likely to be diverted to state budgets, in a bid to offset some of the massive deficits that states have been struggling with since the economic downturn, according to reports.

In Wisconsin, Governor Scott Walker and state Attorney General J.B. Van Hollen have announced plans to use $25.6 million of the settlement money -- about 18 percent of the $140 million Wisconsin will get in total -- to plug holes in the state's budget, according to the Milwaukee Journal Sentinel. As the MJS notes, this is a reversal of Walker's previous opposition to using legal settlements to close budget gaps.

Meanwhile, in Missouri, state Attorney General Chris Koster has said that he plans to put $40 million of Missouri's settlement money -- about 20 percent of the total $196 million -- into the general state fund, apparently in response to Governor Jay Nixon's call for a stronger college and university budget, Stateline reported.

In the wake of Missouri and Wisconsin's announcements to use the settlement funds for purposes other than directly assisting borrowers -- and with similar announcements possibly forthcoming from other states -- critics have begun comparing Thursday's deal to the 1998 tobacco settlement that saw some of the country's largest tobacco companies agree to pay $246 billion over the next 25 years to fund public-health initiatives.

Much of that money has since been spent on other things, according to the Campaign for Tobacco-Free Kids, which estimates that states will receive $25.6 billion from the tobacco settlement this year, but only use 1.8 percent of it to combat tobacco use.

If the news that some of the money from the foreclosure settlement won't end up in borrowers' hands is disappointing to some, it won't be the first time this week that the deal has let someone down.

While the settlement involves five of the country's largest banks -- Citigroup, JPMorgan Chase, Ally Financial, Wells Fargo and Bank of America -- and an amount of money that has been called one of the largest mortgage settlements in history, many borrowers stand to realize practical benefits that are marginal at best.

Some 1 million homeowners will receive material mortgage relief that may help them stave off a default, but another 775,000 borrowers who have lost their homes to foreclosure will receive payments of no more than $2,000.

And the settlement excludes mortgages owned by Fannie Mae and Freddie Mac, the massive mortgage agencies currently in government conservatorship, which means about half the country's mortgages aren't covered at all by the deal.

Devon Swezey: Romer Misses the Mark on Manufacturing

2012-02-10T22:31:37Z

A healthy manufacturing sector is essential to America's economic prosperity in the 21st century. But you wouldn't know that reading last Sunday's New York Times, where former Obama Administration CEA Chair Christina Romer writes that there are no compelling reasons for U.S. manufacturing policy.

According to Romer, the recent hubbub about manufacturing is due to the fact that people have a "feeling" that "making things" is important. In reality, she writes, consumers "value haircuts as much as hair dryers." To be sure, all of us need haircuts, some of us more than others. But Romer's argument that we should value all industries of the economy the same is just not true. It's reminiscent of economist Michael Boskin, another former CEA chair, who said it doesn't matter whether a country makes computer chips or potato chips.

The fact is that some industries are characterized by high productivity and economies of scale that reduce costs and drive economic growth throughout the economy. As Clyde Prestowitz writes of Romer's own example:

Production of hair dryers can be done in large factories that produce economies of scale. Such scale economies lead to lower prices, lower inflation, higher productivity and thus higher wealth creation for the whole economy. In addition, producers of hair dryers invest in research and development to foster innovation of new, more efficient, less energy using, and easier to produce dryers.

Investment in new product and process innovations is what drives economic growth over the long-term. And as we discuss in "Manufacturing Growth: Advanced Manufacturing and the Future of the American Economy," manufacturing is absolutely central to innovation, something that many economists like Romer and economic commentators like Matt Yglesias don't seem to understand. The manufacturing sector comprises two-thirds of the nation's industry investment in research and development (R&D) and employs nearly 64 percent of the country's scientists and engineers.

But Romer doesn't mention manufacturing's importance to innovation in her article. Instead, she prefers to argue with what she sees as the common rationales for manufacturing policy -- market failures, jobs and inequality -- none of which she finds "completely convincing."

On the first issue, she writes that market failures in manufacturing -- where positive spillovers mean that some benefits of a new manufacturing plant go to other companies in the area, thus providing a rationale for government investment -- are small, citing two academic studies on the subject. But many other studies have found that manufacturing is a central component of regional industrial ecosystems, and that being near manufacturing can accelerate innovation and strengthen regional competitiveness. As President Bush's Council of Advisors on Science and Technology wrote in 2004, "design, product development, and process evolution all benefit from proximity to manufacturing, so that new ideas can be tested and discussed with those 'working on the ground.'"

Indeed, recent research suggests that losing high-tech manufacturing can imperil a nation's capacity for future innovation. Harvard's Carl Pisano and Willy Shih write that America's "industrial commons" -- the collective engineering, R&D and manufacturing capabilities that sustain innovation -- are being hollowed out and the United States can no longer produce many high-tech products. Moreover, research and design are starting to follow high-tech manufacturing abroad, imperiling America's historic advantages in innovation.

Next, Romer writes that the impact of manufacturing on jobs relative to the employment needs of the economy is small and that we should focus on boosting aggregate demand instead:

Unemployment today is high, but not because of a decline in manufacturing. That decline has been going on for 30 years -- and for most of the 1990s and 2000s, the unemployment rate was less than 6 percent.

Put aside that this obscures the fact that manufacturing employment generally followed the business cycle with only modest declines until 2000 when it fell off a cliff -- declining by 5.5 million jobs from 2000 to 2008, or 32 percent. Romer understates the impact of manufacturing on jobs for two key reasons.

First, she ignores the fact that manufacturing facilities have extensive backward linkages, generating output and employment throughout the economy. Indeed, manufacturing's "multiplier effect" in terms of both output and employment is larger than any other sector of the economy. Specifically, studies demonstrate that every dollar in final sales of manufactured products supports $1.40 in output from other sectors of the economy. And the average job in manufacturing produces two to three spinoff jobs elsewhere in the economy. Even if employment on the factory floor never reaches levels of previous decades, when these effects are taken into account, manufacturing's employment footprint is quite substantial.

Second, Romer completely misses the connection between America's persistent, massive trade deficits and our employment situation. In 2010 the trade deficit stood at nearly $500 billion, down from a record of $760 billion in 2006. With such large deficits, it's difficult to see how more fiscal stimulus to boost aggregate demand, which Romer favors, will fill the jobs hole in the economy. It would certainly create some jobs, but much of that demand would be filled by imports, which creates jobs in other countries. Rather, eliminating the trade deficit would create millions of jobs in the United States.

And the best way to close the trade deficit is by expanding manufactured exports. This is because the large majority of U.S. trade -- nearly 70 percent of exports and 83 percent of imports -- is still in goods. Manufactured goods in particular comprise 57 percent of U.S. exports. Can exporting services help reduce the trade deficit? Absolutely, and the United States enjoyed a $149 billion surplus in services in 2010. But it took 11 years for service exports to double to its 2010 level of $543 billion. The simple arithmetic shows that the current positive balance in services would need to quadruple to eliminate the deficit in goods. This is implausible, to say the least.

What about inequality? Romer writes correctly that while manufacturing pays higher-than-average wages, it is no longer a source of high-paying jobs for less educated workers. Manufacturing is a technologically sophisticated enterprise and today's manufacturing workers must have a wide array of abilities, including the production skills to set up and operate processes, design and development skills to continuously improve those processes, as well as proficiency in maintenance, repair and supply chain logistics. But then the policy response should not be to ignore manufacturing but ensure that workers have the skills for advanced manufacturing industries.

Romer ends by implying that manufacturing policy is driven by economic nostalgia for an earlier age, writing, "public policy needs to go beyond sentiment and history." To be sure, policy must account for the ways in which manufacturing has changed over previous decades. Some labor-intensive industries are likely gone for good, while the increasing use of information technology, robotics, and high-precision tools means that today's factory workers must have much greater skills than previous generations.

Fortunately, advanced manufacturing policy need not be about sentimentality or history, but about creating the next generation of advanced technologies that spur innovation, drive productivity, and power economic growth in the 21st century. It is about strengthening a sector that is a key catalyst of employment and economic growth. And it's about ensuring the international competitiveness of the U.S. economy, closing the trade deficit and out-competing other nations whose governments rightly view high-tech manufacturing as a strategic industry.

The good news is that the Obama administration has recently recognized that advanced manufacturing is critical for the future prosperity of the U.S. economy, even if its former chief economist does not.

For more on the importance of advanced manufacturing to the U.S. economy, see "Manufacturing Growth," a joint report by the Breakthrough Institute and Third Way.

WATCH: Tilted Kilt Employees File Sexual Harassment Lawsuit

2012-02-10T22:23:22Z

Nineteen employees of the Celtic-themed "breastaurant" Tilted Kilt's Chicago Loop location on Wednesday filed a lawsuit alleging that the eatery's bar manager sexually harassed them.

The lawsuit [PDF] contains disturbing details of incidents that allegedly occurred between the manager, the location's owners and their scantily-clad staff at the restaurant, located at 17 N. Wabash Ave.

According to CBS Chicago, Mark Roth, an attorney representing the women, accused the location's former manager, whom he described as a "predator," and the location's owners of making numerous disturbing comments to his clients.

"There were requests for sex," Roth told CBS. "There were degrading comments that were made. Something that no woman should have to put up with anywhere, let alone by their manager in the workforce."

As the Chicago Tribune reports, the women in June filed a sexual harassment complaint with the U.S. Equal Employment Opportunity Commission, upon which they received "right to sue" letters.

The women, according to the Tribune, allege a "sexually hostile, offensive, humiliating and degrading work environment" where, among the 30 incidents outlined in the lawsuit, the location's manager and owners made comments such as "Meow, meow, you're a dirty kitty" and "You don't know what I'd like to do to you" to the employees. Women who spoke out against these remarks alleging were giving less busy shifts.

According to Fox Chicago, other incidents included grabbing employees' breasts, putting licking employees' ears and attempting to kiss the women.

The manager and many of the plaintiffs in the lawsuit no longer works at that specific Tilted Kilt location, according to the Tribune.

A company spokeswoman said in a statement that Tilted Kilt "does not tolerate sexual or other types of harassment either within its own organization or within its franchiseesâ organizations" and pointed out that the company utilizes a franchise model where each location is independently owned and operated, NBC Chicago reports.

The chain is no stranger to controversy in its Chicago-area operations. When the chain opened a Schaumburg location, it was met with complaints from several area residents, including one who argued that the restaurant attracted "men that come in there want more than just hot wings."

Fake Suicide Call Prompts Woman To Sue Big Bank

2012-02-10T22:12:49Z

These days, debt collectors are putting some people through so much pain that it's landing them in the hospital.

Anne Sessions of Lane County, Oregon is suing Wells Fargo after one of its debt collectors reported to police that that the 85-year-old was threatening suicide, a claim she maintains was false, The Oregonian reports. After hitting financial trouble, Sessions says she arranged a payment plan for her credit card debt with Wells Fargo last year, but just days later she allegedly received a call from a debt collector who badgered her with a "contemptous tone," according to the lawsuit.

Sessions told the collector that such abuse may cause other customers to take their own lives, which allegedly prompted a line of questioning that included the collector asking Sessions: "But...if you did [commit suicide], how would you do it - hurt yourself?" Courthouse News reports.

Within a half hour police arrived at Sessions' door and forcibly took her to the hospital. She was released hours later after hospital staff said they "strongly" believed Sessions was not a threat to herself or others, ABC News reports. But the incident left Sessions stuck with a hospital bill worth $1,055, for which she is seeking compensation, as well as $250,000 in punitive damages.

Sessions' suit may involve one of the more puzzling instances of debt collector abuse recently, but harassment of its kind is far from uncommon. Complaints filed to the Federal Trade Commission about debt collectors rose to 140,036 in 2010, up from 119,609 in 2009. The boost may be explained in part by the industry's growth in a troubled economy that's caused many Americans to delay debt payments.

Over the next three years, the debt collection industry is expected to expand by 26 percent.

Indeed, all the negative reports -- collection agencies are responsible for the most complaints to the FTC of any industry -- may be beginning to take a toll. The FTC has begun cracking down on illegal debt collecting tactics, including repeated calls to the debtors, failure to notify consumers in writing of their rights, misrepresenting the debt in question as well as using profanity or threats.

Last month it settled with Michigan-based debt collection company Asset Acceptance for $2.5 million on charges of misconduct. It also took action against two California-based collection agencies last year, one for attempting to collect debts that didn't exist and the other for threatening to kill debtors pets and desecrete the bodies of deceased family members.

'99 Percent' Protest CPAC

2012-02-10T22:00:31Z

WASHINGTON -- The Conservative Political Action Conference drew crowds of protesters on Friday, as members of the Occupy Wall Street movement and labor groups demonstrated against the annual confab as a powwow for the "1 percent."

(CLICK HERE FOR LIVE UPDATES)

Inside the Marriott Wardman Park Hotel in Washington, D.C., students affiliated with Occupy silently interrupted a speech by GOP presidential hopeful Mitt Romney. The protesters, wearing "We are the 99%" stickers over their mouths and shirts that read "If money is speech, poverty is silence," were escorted from the building by security.

While leading figures in the conservative movement continued to meet inside, outside the hotel the atmosphere was more raucous, with several hundred people rallying at noon beneath a giant inflatable "fat cat." They held signs, chanted, and set up a few tents at the bottom of the hotel's winding driveway.

But when protesters began marching up the driveway shortly after noon, several D.C. police officers impeded their path and instructed protesters -- and members of the media -- that they needed to move back. Police said the driveway was private property and that those still on it risked arrest. The protest began moving back down the driveway as CPAC attendees watched from the sidelines. Police continued to keep protesters and members of the media off the driveway but allowed the protest to spill off the sidewalk, blocking the street.

The protest saw a number of outlandish attendees, from the Brooklyn "Tax Dodgers," a faux baseball team who satirically support former Massachusetts Gov. Romney, to "Candidate Walmart," aka Ben Waxman, who said he was standing up for a corporation's right to run for president. It also drew a mix of Occupy protesters, union supporters and members of local groups.

"We're protesting CPAC's propping up of policies that don't force U.S. corporations to pay their fair tax share, and really promote obscene income inequality in this country," said James Adams, a coordinator with Our DC, another group of protesters that focuses on jobs. "The dreams of Americans who make up the 99 percent are being squashed by CPAC and their poster boy, Mitt Romney."

Although protesters expressed concern on issues from hydraulic fracturing, or fracking, to foreign policy, most said they were focused on economic policy.

"We're trying to create more jobs here in the District, and we feel by holding Congress and big corporations accountable for not paying their fair share of taxes, they can create more jobs by doing so," said Dwayne Devoe, another member of Our DC. "A lot of them are talking about creating jobs, but at the end of the day, what they're saying doesn't really relate to their message."

Jeanae Paul, a member of Good Jobs Baltimore, said she was trying to call attention to the plight of the jobless. "I've been unemployed for over a year now, and it's been really hard," Paul said. "I've been going on interviews, but there's no jobs out there. They're non-existent. And it's hard to feed my family, it's hard to buy clothes, to celebrate the holidays."

Paul said she made the trip to Washington because she wanted the Republican candidates for president to hear stories like hers. "It's important to let them know that we're people, too," she said. "We want to be heard. You know, they need to know the real stories, instead of listening to what their 1 percent is saying. Because we're the 99 percent."

Brendan Duke, a spokesman for the Service Employees International Union, an organization of 2.1 million members, told The Huffington Post that there were 600 protesters on hand, including 300 unemployed workers from the D.C. area. He said the protest was scheduled to last until 2 p.m.

Most CPAC attendees simply walked around the rally, but several stopped to speak with protesters.

Byron Sanford, a Catholic University student who supports Rep. Ron Paul (R-Texas), seemed sympathetic. "I agree with Occupy Wall Street on one of the things they stand for -- I think corporations are ripping off the American people," he said, admitting that he was actually more comfortable with the atmosphere outside the conference. "I feel much better out here."

Others were less impressed.

"I've been to a couple of these things, and it's pretty typical -- it's the same slogans," said John Sexton, who writes for Verum Serum, CPAC's 2012 Blog of the Year. "Individually, they can be very reasonable, but in groups, you're not thinking."

Another protest outside CPAC is planned for Friday evening.

Michael Calderone contributed to this report.

CORRECTION:The original version of this story quoted James Adams and Dwayne Devoe as members of Occupy DC. They are part of the group Our DC.

Hundreds Of Millions More Dollars Of MF Global's Money Thought Missing

2012-02-10T21:57:46Z

The trustee overseeing MF Global's liquidation said Friday that the shortfall between the funds under his control and the amount customers of the failed brokerage are expected to claim is at least $1.6 billion.

The gap estimated by the court-appointed trustee, James Giddens, compares with his previous estimate of $1.2 billion. Giddens said in a statement Friday that the new estimate is based on his investigation and it could change again.

Giddens has been combing through the accounts of MF Global since it filed for bankruptcy protection on Oct. 31. The collapse of MF Global, which was headed by former New Jersey Gov. Jon Corzine, was the eighth-largest corporate bankruptcy in U.S. history.

Most of the $1.2 billion previously reported missing has been traced to customer accounts and banks. Regulators are investigating whether MF Global tapped money from clients' accounts as its financial condition worsened. That would violate securities laws. Brokerages are required to keep customer money separate from the firm's money.

Unlike the previous figure, the new estimate of $1.6 billion includes about $700 million in customer money located in Britain. Giddens is in a legal dispute over that money with the administrator in Britain overseeing the liquidation of MF Global's division in London.

The new estimate excludes some customer claims that haven't been filed yet. It also takes into account some funds that have been recovered since the earlier estimate was made in November.

Giddens said about 40 percent of the claims filed by U.S. commodities customers of MF Global came from five states: California, Florida, Illinois, New York and Texas. Around 91 percent of the claims are for less than $100,000, according to his statement.

Much of the missing money belonged to farmers, ranchers and other business owners who used MF Global to reduce their risks from the fluctuating prices of commodities such as corn and wheat.

Giddens has returned about $3.9 billion to customers.

Trader Joe's Relents To Pressure, Signs Fair Food Agreement

2012-02-10T21:55:24Z

Trader Joe's relented this week and signed a Fair Food Agreement with the Coalition of Immokalee Workers (CIW), a community-based organization of mainly Latino, Mayan Indian and Haitian immigrants employed in low-wage jobs in Florida. The agreement requires the grocery store to pay a penny more per pound of tomatoes and to ensure better working conditions for tomato workers.

In the past year, protesters have become a common sight at Trader Joe's locations across the country in response to the chain's refusal to sign the agreement. Chains like Taco Bell, McDonald's, Burger King and Whole Foods all signed the agreement years ago.

"This is nearly a 50 percent raise for the workers," Barry Estabrook, the writer behind PoliticsOfThePlate.com and author of the book "Tomatoland" (about large-scale tomato agriculture), told The Huffington Post. "These are desperately poor people."

"We are truly happy today to welcome Trader Joe's aboard the Fair Food Program," said Gerardo Reyes of the CIW, in a jont press release issued by the coalition and Trader Joe's. "Trader Joe's is cherished by its customers for a number of reasons, but high on that list is the company's commitment to ethical purchasing practices. With this agreement, Trader Joe's reaffirms that commitment and sends a strong -- and timely -- message of support to the Florida growers who are choosing to do the right thing, investing in improved labor standards, despite the challenges of a difficult marketplace and tough economic times."

Although jointly issued, the press release did not have a comment directly from Trader Joe's. The grocery chain told HuffPost via email that it had nothing further to say beyond the release.

Estabrook, who last spoke to Trader Joe's in the fall of 2011, said he found the company's attitude to be "almost belligerent" when a group of religious leaders tried to present it with a petition in October of last year. But the CIW had a 40-city protest planned for this weekend, and Trader Joe's may have felt compelled to finally sign on, he said. The protests have now been canceled.

"Trader Joe's presents an image of friendliness and fairness. When you're doing that, you can't very well have a group of people demonstrating in front of your stores," Estabrook said. The CIW now plans to focus its attention on the major supermarket chain Publix, and has a six-day fast planned for next month.

Trader Joe's opened its first Florida store in Naples on Friday, one day after signing the CIW agreement. In a weird twist of fate, the store is located on Immokalee Road.

S&P Downgrades Huge Number Of Italian Banks

2012-02-10T21:45:00Z

MILAN, Feb 10 (Reuters) - Rating agency Standard & Poor's downgraded 34 Italian banks on Friday, including heavyweights UniCredit and Intesa Sanpaolo, citing a reduced ability to roll over their wholesale debt and expected weak profitability.

The move follows S&P's downgrade of Italy's sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries.

In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 -- out of 10 groups -- reflecting its more negative view on Italy's banking system.

"Italy's vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks' significantly diminished ability to roll over their wholesale debt," it said.

"We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital.

We believe this may be negative for the Italian banking industry's stability."

Italian banks have borne the brunt of a sell-off in Italian assets since the euro zone's third-largest economy was dragged into the single currency bloc's debt crisis last summer.

Because of their vast holdings of domestic government bonds, Italy's top five banks have been asked to find some 15 billion euros by June to meet tougher capital requirements set by the European Bnaking Authority.

Lenders have also been effectively shut out of wholesale debt markets and have increased their reliance on cheap funds from the European Central Bank.

Italian banks tapped a whopping 116 billion euros of nearly 500 billion euros of three-year funds offered by the ECB last December, easing funding strains.

A similar operation will be held at the end of February and analysts expect Italian banks to further increase their borrowing from the ECB.

S&P said weak profitability and increased cost of capital could lead Italian banks to write down a large part of the goodwill they booked during a wave of industry consolidation over the past decade.

Such writedowns forced UniCredit, Italy's biggest bank by assets, to announce a 10.6 billion euro loss in the third quarter of 2011.

Among the banks downgraded, Banca Monte dei Paschi di Siena and Banco Popolare had their rating cut below that of Italy's sovereign debt.

For a list of the banks affected by S&P's downgrades, please click on

White House: Energy Department Loan Oversight Needs Overhaul

2012-02-10T21:38:00Z

* Struggling to fill key positions to manage loans

* Did not evaluate failed loan to Solyndra

* Chu: will review ideas, but program is working

By Roberta Rampton

WASHINGTON, Feb 10 (Reuters) - The U.S. Energy Department relies on too many consultants and committees for managing its loans and needs to beef up its management, concluded a review commissioned by the White House in the wake of publicity over failed solar panel maker Solyndra.

Herb Allison, a former investment banker known for his work helping government agencies manage large, complex financing programs, reviewed the energy loan program, and recommended an overhaul in oversight of the $23.769 billion portfolio.

He said the Energy Department has struggled to fill vacancies in key positions without success. "At least one manager is acting head of several departments," he said in a 75-page report.

Decisions should be made by individual managers with expertise, Allison said, instead of using a committee process "where collective responsibility can obscure individual accountability."

Allison did not review a $535 million loan guarantee to Solyndra, which filed for bankruptcy last year and has become a political sore spot leading into the 2012 election season.

The loan was once held up by President Barack Obama as an example of how his administration was creating new jobs with "stimulus" funding while promoting renewable energy.

It now is featured in at least two attack ads on television, and candidates for the Republican presidential nomination regularly invoke Solyndra as a symbol of what they say is government waste and misguided energy policy.

Energy Secretary Steven Chu said he would review the recommendations to find ways to strengthen the program.

But he said the program is working as it is intended, and noted that the review rated the overall risk of the loan portfolio as "slightly lower" than the department's projections.

"We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won't succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest," Chu said in a statement.

Obama's Approval Rating Keeps Inching Up, Driven By One Factor

2012-02-10T21:35:00Z

WASHINGTON -- On Thursday, the Gallup Daily tracking poll marked a symbolic milestone. For the first time in more than a month and only the third time since last July, Gallup reported an approval rating for President Barack Obama (49 percent) that was slightly higher than his disapproval rating (46 percent).

On Friday, the Rasmussen Reports automated tracking survey marked a similar landmark. It showed Obama's approval rating at 50 percent or greater nationwide for the fifth consecutive day, a popularity not matched on the Rasmussen poll since January 2011.

The two daily tracking surveys are not alone. National telephone polls released in the past week by Fox News, ABC News and the Washington Post, Ipsos/Reuters, and the Democratic Party-affiliated Public Policy Polling (also sponsored by the website DailyKos and the Service Employees International Union) have all found increases in Obama's approval rating since October. Most of the increases range between 4 and 6 percentage points; the Ipsos/Reuters survey found a smaller rise.

The improvement since the fall has also been evident in state polls, including such likely battlegrounds in the general presidential election as Ohio, New Hampshire, North Carolina and Virginia.

Given the recent upward blip in the two national daily-tracking polls, some have looked for explanations in the events of the past week, particularly last Friday's Labor Department report of a rising employment rate. While positive economic news is the most likely reason for Obama's improving job rating, the upward trend in his ratings did not begin in February. In fact, most of the surveys have tracked a gradual increase in Obama's ratings that began in late October.

The HuffPost Pollster chart, based on all available public polls, shows a slow, steady rise of roughly five percentage points in the president's job approval rating since it hit its all-time low in early October.

The longer-term increase in Obama's approval rating parallels five months of increases in several survey-based indexes of consumer confidence. Specifically:

Gallup reported that its index of consumer confidence has risen for five consecutive months to its highest point since May 2011. The pollster also reports that 22 percent of Americans now say they are satisfied with the way things are going, "higher than at any point since last spring."
The Bloomberg Consumer Comfort Index rose to its highest level in a year this week.
The Thompson Reuters University of Michigan Index of Consumer Sentiment was up in December for the fifth straight month. A preliminary estimate for January, based on a smaller sample, is slightly down, but confidence remained higher than in previous months.
The Rasmussen Consumer Index stands at its highest level in over a year, although it's down slightly from a peak earlier in the week.
The Consumer Confidence Index of the Conference Board showed a slight decline in January, but its December and January measurements were still significantly higher than those of the three previous months.

Of course, the overall economic mood remains gloomy. On the Gallup surveys, for example, far more Americans still say that economic conditions nationwide are getting worse (58 percent) than say they're getting better (36 percent) -- though the positive number has more than doubled, from 18 percent, since the fall.

And despite big increases since October, the president continues to receive net negative ratings on "the economy" (44 percent approve, 53 percent disapprove) and "creating jobs" (44 percent approve, 51 percent disapprove) in the most recent ABC News/Washington Post survey.

The main point, however, is that the rising tide of consumer optimism directly parallels the upward trend in Obama's overall job approval rating. That result underscores the promise and the peril for the Obama administration in 2012. Continuing economic recovery will likely further boost his approval ratings and his chances in the November election. Yet we have seen temporary increases in consumer confidence before -- most memorably in January 2010 -- that quickly ebbed in the face of later negative economic news.

Either way, the economic trends of the next six to eight months are likely the most important factor in determining whether Barack Obama wins a second term in November.

Ron Davis: The Republican Nanny State

2012-02-10T21:22:31Z

Republicans who support subsidies should stop their mass-manipulation. Rather than hiding behind hypocritical pro-market rhetoric, it is time to admit they have embraced their very own entitlement-boom that rivals the dreams of any European welfarist. Matt Kibbe recently wailed in Forbes about a "tort litigation nightmare" because a court granted a large award to a woman paralyzed from the neck down by a company's negligence. And last week in the Wall Street Journal, Senator Ron Johnson of Wisconsin decried the EPA and the Department of Labor's increased regulation because of its "job crushing... cost" to businesses. "Cost" is a strange adjective to describe all these rules when many actually serve to stop current subsidies. Senator Johnson unsurprisingly failed to mention the excruciating economic cost-benefit scrutiny applied to regulations by the Office of Information and Regulatory Affairs (OIRA), recently famous for rejecting the EPA's smog rules.

Both point toward an ironic truth: mainstream Republicanism has rejected market economics in favor of a subsidy-loving conservative nanny-state. Subsidies, as economists tell us, insulate people from the true costs (or consequences) of their behavior. And market efficiencies and the economic growth they create get undermined when people don't pay full price.

Even more disturbing, these handout-loving Republican pundits and politicians regularly and cynically deceive rank and file believers in personal responsibility by using free-market sounding language to distract citizens from their constituents' reliance on public support. These interest group puppets start by pretending that the only subsidies come from governments. But any economist will tell you this is nonsense. Inefficient subsidies flow from more than just the national treasury. In fact, sometimes only the government can shut off this golden faucet.

Economists call these decision-distorting efficiency killers "externalities." An externality arises when part of the price of my behavior gets absorbed by someone else, forcing that person to subsidize my choice. For example, costs get externalized if a toy factory's manufacturing process puts toxic chemicals in the groundwater, and the neighbors get stuck paying for part of the toy making process -- by shouldering lowered property value, experiencing illness, or getting stuck with the bill for cleaning up the mess. This is one reason why we compensate people through lawsuits -- to make sure the toy factory, not its neighbors, pays the full price for its behavior.

But Republicans leaders seem bent on forcing their backers' costs onto others. House Majority Leader Eric Cantor (R-VA) opposes greenhouse gas taxes, arguing they would "cost our economy billions of dollars [and] destroy jobs." Certainly such taxes do encourage what economists call "creative destruction," another market miracle where inefficient providers get put out to pasture. But then better providers take their place, which is why markets are good for business. The supposedly job-killing pollution taxes would remove the ventilator from these market-insulated companies and expose them for what they are -- corporate welfare queens.

When I drive a car, or operate a coal factory, many people pay the price for my emissions. These hurt other consumers and businesses, future citizens who clean up the mess, or Bangladeshis swamped by floodwaters. Whatever one's position on climate change, we all know that pollution costs something, and when we pollute without paying the full cost -- we act like people do on someone else's dime. We overindulge. No wonder the misery of traffic.

If Matt Kibbe had his way, he would eliminate the "tort litigation nightmare." But doing so would allow a host of externalities, forcing people to subsidize others' negligence. Consider medical malpractice compensation caps. If an architect makes $200k a year with ten working years ahead of her, and a surgeon commits professional negligence that destroys the architect's ability to work, that poor architect faces a $2 million loss. But with a tort liability cap of $1 million, the surgeon will only pay for half the cost of his bad behavior. The injured architect would have to subsidize the surgeon's practice.

Systemic risk, also an externality, recently reared its ugly head. If, after Lehman collapsed, the banking sector had failed, its employees and stockholders would certainly have paid a tremendous price. But this would only amount to a fraction of the total cost paid by the rest of the world. Bailouts may have saved world markets from depression, but our citizens have paid dearly -- recession, a feeble recovery, and mounds of debt to cover tax cuts and stimulus spending. But we can't just bill the banks for this mess after the fact because the tab dwarfs bank resources. Unlike the polluting factory or the negligent doctor, a court judgment cannot make the banks face the full cleanup cost.

We don't begrudge banks for trying to turn a big profit, but citizens shouldn't be forced to subsidize it either. Since we cannot afford to let the financial markets fail, systemic risk must be regulated up-front, rather than paid for after the fact. Those who fight bank regulations designed to minimize systemic risk actually work to preserve mammoth bank subsidies -- because the banks can never take on the full risk-cost of their risky behavior.

The list goes on. Globalization displaces workers, which means the displaced pick up most of the tab for our economic gains. The rising tide may lift all boats, but it drowns a few people too. When we refuse to compensate them accordingly -- through retraining and other assistance -- we force them to subsidize our fortunes. Accordingly, last summer, Senate Minority Leader Mitch McConnell (R-KY) threatened to block a free trade deal with South Korea unless the White House dropped the provision for the Trade Adjustment Assistance program, which helps retrain displaced workers. Mr. McConnell apparently believes these workers should subsidize the rest of us.

The issues above are, of course, complex along many dimensions not discussed here. But the truth remains: Some kinds of taxes and regulations actually stop subsidies, and market rhetoric frequently hypocritically helps conceal colossal handouts.

These Republican leaders are right about one thing. The jobs that rely on subsidies will be killed if externality entitlements get taken away. But they will be replaced by a more efficient, prosperous economy and the jobs that come with it. Forcing companies and people to internalize the costs of their behavior is not bad for businesses in general. Just the ones with their hands in someone else's pocket.

San Francisco Art School Under Investigation For Shady Recruitment

2012-02-10T21:08:01Z

CORRECTION:

An earlier version of this article mistakenly identified the Art Institute of California in San Francisco as the San Francisco Art Institute. The two schools are in no way affiliated.

This article comes to us courtesy of California Watch.

By Erica Perez

The San Francisco city attorney's office is investigating student recruiting practices and job placement reporting at The Art Institute of California in San Francisco and seven other Art Institute campuses across the state, according to a new filing by the for-profit college owner, Education Management Corp.

In a filing this week with the U.S. Securities and Exchange Commission, Education Management said the company received a letter in December from the city attorney seeking information regarding student recruitment and indebtedness at The Art Institutes. The statement said the company intends to cooperate with the investigation, but can't predict the scope or outcome of the investigation.

A spokesman with the city attorney's office declined to comment on the investigation.

While several state attorneys general have been investigating claims of fraud and deceptive business practices at for-profit college companies in the last few years, an investigation by a city attorney appears to be less common.

State law gives city attorneys in California's large cities the authority to act as attorney general and bring claims concerning unfair or deceptive business practices on behalf of consumers in the local jurisdiction, said former San Francisco City Attorney Louise Renne.

Renne used that authority, for example, when the city sued gun makers, claiming they knowingly and recklessly marketed and sold guns in a way that circumvented the law and contributed to the use of guns in crimes.

"It's there to protect consumers and taxpayers," said Renne, who is a partner at the law firm Renne Sloan Holtzman Sakai. "Itâs an affirmative tool."

It's possible the San Francisco city attorney's office is coordinating with the California attorney general's office, Renne said.

California Attorney General Kamala Harris, the U.S. Department of Justice and attorneys general in five other states and the District of Columbia are suing Pennsylvania-based Education Management, contending that the for-profit college company illegally paid admissions employees based on the number of students they recruited, regardless of the students' qualifications.

Federal law prohibits colleges and universities that participate in the federal financial aid program from paying commissions, bonuses or other incentive payments to recruiters based on how many students they enroll.

Harris is suing Education Management for all the state financial aid the company's colleges have received since 2003, plus other fines. The exact dollar figure isn't clear, but from 1999 to 2010, Education Management-run colleges have received about $93 million in Cal Grants funds from the California Student Aid Commission, according to the complaint.

Education Management runs not just the eight Art Institutes in California, but also five Argosy University campuses and the Western State University College of Law in Fullerton.

The federal government and states contend that the sole factor that determined changes to admissions representatives' pay at Education Management-run colleges was the number of students the employee recruited during the previous year.

Education Management filed a 64-page brief this month in an effort to get the government lawsuit dismissed. The company argued that its compensation plan was legal because it was not based just on the number of students recruited, but also on considerations such as professionalism, customer service, and business practices and ethics.

The case is in U.S. District Court in the Western District of Pennsylvania. Judge Terrence F. McVerry has not yet ruled on whether to dismiss the complaint.

Erica Perez is an investigative reporter for California Watch, a project of the non-profit Center for Investigative Reporting. Find more California Watch stories here.

Fed's Secret Sale Of AIG Assets To Goldman Criticized As 'Un-American'

2012-02-10T21:00:33Z

The Federal Reserve gave just five banks the chance to bid on $6.2 billion in taxpayer-owned AIG assets before selling them to Goldman Sachs on Wednesday.

The Fed allowed Goldman Sachs, Barclays, Credit Suisse, the Royal Bank of Scotland, and Morgan Stanley to participate in the auction, according to a New York Fed statement. Reports of the auction leaked just days before the Federal Reserve announced the sale.

Some investors told Bloomberg News that the Fed's decision to keep the auction secret was unfair to both investors and taxpayers. They said that if the bank had allowed the free market to set the price for the assets, the sale would have earned taxpayers more money.

"The exclusivity by which the process has shut out smaller dealers is a little un-American.... It seems odd that if you want to get the best possible price that it wouldn't be open to anyone who wants to put in the most competitive bid," David Castillo, head of sales and trading at Further Lane Securities, told Bloomberg News.

New York Fed spokesperson Andrea Priest wrote in a statement that the sales process was competitive and realized an "excellent value for taxpayers." This sale "will enable full repayment" of a loan from the New York Fed to the group of AIG securities, she wrote.

"We did not simply accept an offer to buy a bundle of securities - we forced the bidder to compete with other potential buyers," Priest wrote. "The participants were selected using objective criteria based on how active they are in this market."

The New York Fed's statement on Wednesday noted that the auction was prompted by an unsolicited offer by Credit Suisse to buy the securities. It did not specify the amount of Goldman's winning bid. Just two out of 24 sales of the AIG securities have been closed, according to Bloomberg News.

The New York Fed held open auctions for individual AIG bonds last spring but didn't get the highest possible prices, as investors fretted about the crisis in Europe and the markets fell, according to the WSJ.

The bonds are part of a package called Maiden Lane II, which absorbed AIG's toxic mortgage-backed securities in order to help prevent AIG's collapse during the financial crisis.

The Federal Reserve sold $7.01 billion in Maiden Lane II securities to Credit Suisse on January 19 in a similarly closed auction. The Fed invited just Goldman Sachs, Credit Suisse, Barclays, and Merrill Lynch to participate, according to its statement. Goldman Sachs had approached the New York Fed in January offering to buy those securities, according to Bloomberg News.

These two sales whittle down the total amount left in the Maiden Lane II portfolio to $6.2 billion.