Most Madoff Victims Denied SIPC Repayments a Year After Arrest

By Erik Larson

Dec. 11 (Bloomberg) -- Most of the people who say they lost money with Bernard Madoff have had their claims denied because they invested with the con man indirectly or withdrew more money than they put in.

Trustee Irving Picard has turned down about 9,900 of the 11,500 people whose claims he has analyzed, with another 4,500 cases still to be looked into. The 1,600 people whose claims he has approved have losses totaling $4.69 billion, though they’ll get at most $500,000 to begin with, pending the results of Picard’s suits against people he regards as beneficiaries of the biggest Ponzi scheme in history.

One year after Madoff’s arrest in his penthouse apartment in Manhattan on Dec. 11, 2008, exposing the swindle that ruined thousands of investors, the denial of most claims and the approval of some at lesser amounts than victims sought has emerged as the biggest dispute in the case. Many alleged victims argue they should be paid years’ worth of fake profit.

While Picard said yesterday he’s processing claims as quickly as possible, he declined to estimate when he’ll finish.

“Getting visibility into older account records has unfortunately been a slow process,” Picard said in an e-mail. “We are making progress and issuing new determinations regularly.”

Picard’s method for determining claims is “grossly unfair,” retiree Ken Macher, who claims he lost a savings account once worth $1.6 million, said in a Dec. 7 filing in U.S. Bankruptcy Court in New York. Picard is depriving Macher of “some small relief from the loss of our entire investment,” he said.

Macher’s claim was denied because he withdrew $1 million in 2007 after having invested only about $365,500, according to the filing. Macher, of Fairfax, California, said the funds were immediately placed in another Madoff account that was wiped out.

Reality

“We never received any of the money,” said Macher, who said in his filing he took a consulting job to help save his home. “Equating this transaction with a withdrawal in which the investor actually received the funds ignores the reality of the circumstances.” A call to the phone number listed for Macher’s address in Fairfax wasn’t returned.

Picard is calculating claims based on cash deposits minus withdrawals.

Helen Chaitman, who testified Dec. 9 in Washington at a congressional subcommittee hearing about the case, said the liquidation is taking too long because Picard didn’t set claims based on Madoff’s last account statements.

“He’s violating a federal statute which mandates that customers be paid based on their last statements,” Chaitman said yesterday in a phone interview. “He’s going through decades’ worth of records in order to disqualify eligible investors.”

February Hearing

U.S. Bankruptcy Judge Burton Lifland will consider the disagreement at a Feb. 2 hearing in New York.

Picard, hired by the government-chartered Securities Investor Protection Corp., said yesterday that cash losses were about $19.4 billion, while victims thought they had $65 billion based on profit from securities that Madoff didn’t actually purchase. Picard previously estimated that cash losses were $21 billion and said yesterday that his new figure may change as the investigation continues.

SIPC will pay about $561 million for the investors’ claims, money it has raised through fees charged to its 5,227 brokerage firm members. Investor claims that exceed $500,000 will get a share of what Picard recovers in lawsuits seeking about $15 billion in fake profit to be distributed to victims.

Feeder Funds

Out of 11,500 determined so far, Picard denied about 9,900, mostly because they invested indirectly through so-called feeder funds.

Picard has said the victims who invested indirectly through so-called feeder funds may still get some cash if claims by the funds are approved and those funds use the money to repay customers. Some feeder funds have also had claims denied.

“Most of the feeder funds deposited more money than they received back,” Picard said in yesterday’s e-mail. “Thus, they should have allowed claims and receive payments.”

Billions of dollars in investor cash were funneled into the fraud by funds including those run by New York-based Fairfield Greenwich Group, investment manager J. Ezra Merkin’s Gabriel Capital Corp., Spanish lender Banco Santander SA and Bermuda- based Kingate Management Ltd., among others. Many of the funds were sued by Picard for the return of profit from the fraud.

Madoff, 71, pleaded guilty in March and is serving a 150- year sentence at a federal prison in Butner, North Carolina.

The case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Finding Hope in Troubled Times

 

Investment	Debt
Money	Loan
Insurance	Economic

By John Baldoni

I've heard executives say that they have never seen things as bad as they are now. Even as the economy shows signs of recovery, it is by no means certain that recovery will be a linear process.

In these troubled times, it is useful to recall examples of leaders who have survived adversity. One of my favorites, and one whom I have written about extensively, is Winston Churchill. For our times the Churchill most apt is not the Prime Minister of 1940 who rallied Britain as the sole force against the Nazis. Rather it is the Churchill of 1915, tossed from the cabinet after the debacle of Dardanelles, an ill-fated plan to knock Turkey out of the Great War.

As we learn in Paul Johnson's splendid new biography, Churchill at age 40 found himself very much alone and reviled. So what did he do? He "brooded" for a bit; his wife Clementine said "I thought he would die of grief." But then to his great delight, Churchill found a new hobby — painting. And through his art, for which he exhibited great talent, he reconnected himself. Rejuvenated, he enlisted in the Army and served on the Front in France for six months of 1915-16. Later Churchill re-entered politics, and from there continued his public life.

The Churchill of this period teaches us that we can recover from our mistakes if we do two things: one, recharge; two, act. The latter is familiar to any executive but action after adversity should be preceded by a period of reflection as well as rejuvenation. Here are three ways to make this happen.

Reflect. Take a step back, consider what happened, and examine the situation from all angles. Discuss with colleagues what went right as well as wrong. Assess your performance and consider what you might have done differently. Now that you know the outcome, use what you know to prepare for the future.

Recharge. Now, put the failure aside and find ways to reconnect with yourself. It may be through a regime of fitness or by spending more time with friends and family. Keep yourself occupied; do not dwell on yourself. Churchill painted. What might you do? Find something to reconnect your mind with your spirit. You may have lost a battle, but you did not lose your life. Keep thinking positively.

(Re)Act. You must do something. If you are in the same job, put lessons learned from failure into place. Debrief your team. If you are in a new job, then find ways to leverage those bitter lessons in your new position. Know that you are a different person, in many ways a stronger one for having withstood the pressures of defeat. Channel your energies into your work, but keep in tune with yourself and people close to you.

Churchill did have one luxury that business leaders may not have: time. He could retire from public life. Leaders on the job now have no such time. Yet no matter how tough things are, every leader can and should make some time for self, especially in the wake of defeat. Failure to do so may pre-destine future failure.

Understand that defeat is not the end. The Churchill of 1915 prepared the way for the Churchill of 1940 to become the savior of his nation. "A pessimist sees the difficulty in every opportunity," Churchill once quipped. "An optimist sees the opportunity in every difficulty."

Yen, Dollar Rise on Rate Outlook, Gold Falls Most in 14 Months

Dec. 7 (Bloomberg) -- The yen strengthened and the dollar rose to its highest level in a month against the euro as investors weighed whether the world economy is recovering fast enough to warrant higher central bank interest rates. Gold headed for the steepest two-day retreat since October 2008.

The yen advanced against all 16 most-traded currencies tracked by Bloomberg at 12:13 p.m. in New York. The dollar gained versus 12. The MSCI Emerging Markets Index dropped for a second straight day as Dubai’s equity index plunged 5.8 percent to a four-month low. Gold fell 1.9 percent in New York, while crude oil dropped a fourth consecutive day. European equities fell, while the Standard & Poor’s 500 Index rallied.

Federal Reserve Chairman Ben Bernanke speaks today for the first time since the Dec. 4 U.S. employment report signaled a surprise drop in the jobless rate, stoking expectations the Fed may raise rates sooner than economists had anticipated. Investors are concerned banks may have to increase writedowns that have reached $1.7 trillion worldwide since the credit crunch began, as Dubai World seeks to delay payment on $26 billion of debt.

“Not only are commodities falling because of strength in the dollar, traders and investors are easing up on their inflation fears and on their hedges on the U.S. dollar,” said Kathy Lien, New York-based director of currency research with online currency trader GFT Forex. “One of the primary reasons why traders or investors have piled into gold is because of the belief that the Federal Reserve is going to be behind the curve on tightening monetary policy.”

Yen, Dollar Gain

The yen rose most against higher-yielding currencies, advancing 1.8 percent versus the New Zealand dollar. The U.S. dollar traded at its highest level since Nov. 4 versus the euro, extending gains made at the end of last week that followed the U.S. employment report.

Treasury two-year notes advanced on speculation Bernanke may try to damp optimism about the strength of the economic recovery in his speech today. The benchmark two-year note yield fell four basis points to 0.80 percent.

The U.S. lost 11,000 jobs in November, less than the 125,000 median forecast of 82 economists in a Bloomberg survey, the Labor Department said Dec. 4. Fed-funds futures contracts on the Chicago Board of Trade showed today a 16 percent probability the central bank will increase its benchmark overnight rate to at least 0.5 percent by March, up from 11 percent a week ago.

Gold futures for February delivery in New York extended their decline since Dec. 3 to 5.8 percent, falling to $1,147.90 an ounce as the Dollar Index’s advance curbed the metal’s appear as an alternative asset.

Four-Day Retreat

Crude oil futures slumped 1.5 percent and have now lost 5.2 percent since Dec. 1. The Reuters/Jefferies CRB Index of commodities declined for a fourth day, the longest losing streak since August.

The Dubai Financial Market General Index sank the most among benchmark equity indexes worldwide. The measure has tumbled 17 percent since Dubai announced on Nov. 25 that state- owned Dubai World would ask creditors for a “standstill” agreement on its debt, including property company Nakheel PJSC’s $3.5 billion bond due for repayment in a week.

Russia’s Micex Index dropped 1.5 percent as oil company OAO Rosneft sank on falling crude prices. South Africa’s FTSE/JSE Africa All Shares Index declined 0.9 percent, after gold producer AngloGold Ashanti Ltd. retreated 3.7 percent.

Europe, U.S. Stocks

The Dow Jones Stoxx 600 Index, the benchmark for European stocks, slumped 0.5 percent. Fresnillo Plc, the world’s largest primary silver producer, led basic-resources producers lower in London, losing 1.89 percent. Siemens AG, Europe’s biggest engineering company, slipped 1.6 percent in Frankfurt after Morgan Stanley cut its recommendation.

The S&P 500 rose 0.1 percent, adding to last week’s 1.3 percent advance. Cigna Corp. added 4.5 percent, leading gains among health-care companies, after Goldman Sachs lifted its industry rating to “attractive,” citing cheap shares and “limited downside risk under likely outcomes for health reform legislation.”

Dubai Concerns Eased, Wall St. Moves Up

tocks were higher on Tuesday as jitters over the debt crisis in Dubai eased and reports showed signs of stability in three cornerstones of the economy: housing, manufacturing and construction.

Uncertainty pervaded the markets in recent days, as investors tried to assess whether the inability of a Dubai investment fund to keep up with $59 billion in debt payments would rattle banks and other emerging economies.

But on Tuesday, investors across the world seemed more confident that the crisis was contained. A pledge by Dubai World, the emirate’s investment vehicle, to restructure its debt helped calm investors even though the company said late Monday that it was seeking to renegotiate only the $26 billion in obligations held by its troubled real estate developer, Nakheel.

“It’s a huge sigh of anticipatory relief that Dubai is not going to blow up in the global investor’s face,” said M. Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Okla. “What this market needs is to be able to trust the worldwide comeback and to know that worldwide economies are going to hold strong.”

The Dow Jones industrial average rose 126.74 points, or 1.23 percent, to 10,471.58 — a 14-month high. The Standard & Poor’s 500-stock index jumped 13.23 points, or 1.21 percent, to 1,108.86, also to a 14-month high.

The Nasdaq composite index gained 31.21 points, or 1.46 percent, to 2,175.81. The increases were broad-based, led by shares of utility and telecommunication companies.

Shares of Comcast, the nation’s largest cable operator, rose 2.1 percent after reports said General Electric had reached a tentative deal that would clear the way for the sale of NBC Universal to Comcast. Shares of G.E. gained 0.94 percent.

In addition to the Dubai news, investors took in three reports on Tuesday that, while not glowing, largely beat expectations and added optimism to the forecast for an economic rebound.

An index on tentative home sales compiled by the National Association of Realtors reached its highest level in three years in October, aided by the allure of a government-financed credit of up to $8,000 for first-time home buyers.

A separate barometer on manufacturing activity, from the Institute for Supply Management, showed a slight drop in the pace of expansion in November, falling short of Wall Street’s expectations. The report, however, recorded an increase in new factory orders in November, suggesting growth.

Finally, the Commerce Department said construction spending remained flat in October, at $910.77 billion, as a rise in residential spending helped offset losses in commercial spending. Excluding residential improvements, which are difficult to estimate, spending fell 1.1 percent. The government also revised its September data, recording a 1.6 percent decrease rather than a 0.8 percent increase in construction spending.

Hank B. Smith, chief investment officer for Haverford Investments, said that while the economic reports, taken together, did not show great gains, they reassured investors. “All recoveries go in fits and starts,” he said. “If you look at the reports as a whole, clearly we are recovering.”

Commodities posted gains on Tuesday. Gold shot past $1,200 an ounce for the first time, but then retreated slightly, ending the day at $1,197 an ounce. Crude oil prices rose $1.09, to $78.37 a barrel.

The dollar continued to weaken, trading at $1.51 against the euro.

The Treasury’s benchmark 10-year note fell 23/32, to 100 25/32, and the yield rose to 3.27 percent from 3.20 percent late Monday.

Later this week, investors will examine two crucial snapshots of the health of the economy. On Thursday, retailers will report November sales figures, giving a sense of the strength of holiday sales. On Friday, the Labor Department will release its monthly unemployment report.

Following are the results of Tuesday’s auction of four-week notes:

Dubai Credit Risk Falls Most in 9 Months on $26 Billion Workout

Dec. 2 (Bloomberg) -- Dubai’s credit risk fell the most in nine months after state-controlled Dubai World began talks on restructuring less than half its total liabilities and said the rest of its obligations are on “a stable financial footing.”

The cost to protect against a default by Dubai dropped 113 basis points to 457 yesterday, the biggest one-day decline since Feb. 23, according to credit-default swap prices from CMA Datavision. Debt from Dubai World subsidiaries including Infinity World Holding, Istithmar World and Ports & Free Zone World aren’t part of restructuring negotiations, the company said in a statement on Nov. 30.

Dubai World is seeking to delay payments on less than half its $59 billion of liabilities, easing the potential damage to banks recovering from $1.7 trillion of losses and writedowns from the global crisis. Shares worldwide recovered some of the losses suffered since Dubai announced it would seek a “standstill” agreement on all of Dubai World’s debt as the MSCI World Index gained 2 percent yesterday, the most in three weeks.

“Now that they’re saying $26 billion, it reduces some of the panic that built up in the last few days,” said Nick Chamie, an analyst at RBC Capital Markets in Toronto. “This is positive. The market was feeding on its own concern and there were talks of $60 billion debt that would need to be restructured.”

A creditor group including HSBC Holdings Plc, Standard Chartered Plc, Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc has formed a steering committee and will meet with representatives of Dubai World on Sunday or Monday, the Financial Times reported yesterday, citing a person familiar with the matter.

‘Minor Problem’

Dubai’s ruler and United Arab Emirates Prime Minister Sheikh Mohammed Bin RashidAl Maktoum said the world misunderstood the government’s intention when it said state-run holding company Dubai World would renegotiate debt repayments, according to Al Arabiya television yesterday.

The debt Dubai World plans to restructure includes about $6 billion of Islamic bonds sold by Nakheel, according to the Dubai World statement.

“Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis,” Dubai World said in the statement. “It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders.”

EM Bond Rally

Debt and shares worldwide have been rebounding after Europe suffered its biggest one-day stock market slump since April last week on investor concern Dubai’s debt delay might cause the biggest emerging-market default since Argentina in 2001. The MSCI Emerging Market Index of stocks climbed 2.1 percent, the most since Nov. 9, to 973.31 yesterday.

The extra yield investors demand to own emerging-market bonds instead of U.S. Treasuries declined 14 basis points to 3.15 percentage points yesterday, according to JPMorgan Chase & Co.’s EMBI+ Index. Lebanon sold $500 million of bonds in overseas credit markets yesterday.

The $26 billion figure “confirms that it’s a relatively minor problem,” said Michael Atkin, who helps oversee $10 billion in fixed-income assets as head of sovereign research at Putnam Investments in Boston. Dubai’s struggles serve as a “reminder that we’re not yet out of the woods in the global financial system. It raises the issue of what else is out there,” he said.

Royal Bank of Scotland was the biggest underwriter of Dubai World loans while HSBC has the most at risk in the U.A.E., according to JPMorgan Chase & Co. Spokespeople for RBS and HSBC declined to comment.

Moody’s

Banks have begun negotiating with Dubai World because they “are wary of any alternative including calling Dubai World in default,” said Hani Sabra, an associate covering the Middle East for New York-based research firm Eurasia Group.

Total government and government-related debt in Dubai could be about $100 billion, including an estimated $34.22 billion at Dubai World and its units, Moody’s Investors Service said in an e-mailed report yesterday. The rating assessor said it expects no material loss at any of the international banks exposed to Dubai World.

“The only consequence that we expect to result from this event is a change in investors’ perception of the risks associated to Dubai and the United Arab Emirates, and a re- pricing of risks and opportunities,” Moody’s said in the statement. Dubai’s corporate landscape is now effectively a high-yield market, Moody’s added.

Default Swaps

The United Arab Emirates’ central bank said Nov. 29 it “stands behind” the country’s local and foreign banks and offered them access to more money under a new facility. U.A.E. Central Bank Governor Sultan Al-Suwaidi told Abu Dhabi TV on Nov. 30 there was “no need to worry” about lenders in the Persian Gulf nation.

Default swaps for Abu Dhabi narrowed 15 basis points to 129 and contracts linked to DP World Ltd. dropped 113 to 519 yesterday.

The contracts, which fall as perceptions of credit quality improve, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. A basis point is 0.01 percentage point and is equivalent to $1,000 a year on a contract protecting $10 million of debt.

Shares in the emirates fell, with Abu Dhabi’s measure wiping out its gains since May in a record 12 percent two-day slump. The Dubai Financial Market index declined 5.6 percent. Qatar’s DSM20 Index lost 8.3 percent in its first trading day since the Nov. 25 restructuring announcement.

Support Fund

The Dubai government said Nov. 25 its Financial Support Fund will spearhead the workout for Dubai World and named Aidan Birkett of Deloitte LLP as its chief restructuring officer. The government said Dubai World would seek an extension of loan maturities until at least May 30, 2010.

Bondholders of Nakheel PJSC, whose Islamic bond is due Dec. 14, have formed a creditor group that represents more than 25 percent of the debt, said Jo Shepherd, head of public relations at Ashurst LLC, which was appointed legal adviser. The group is considering its options, Shepherd said in an interview on Nov. 30. More than 75 percent consent from creditors is needed to approve extraordinary resolutions.

The Nakheel 3.17 percent bonds, known as sukuk, fell to 55 cents on the dollar from 58, according to Citigroup Inc. prices on Bloomberg. The bonds, governed by Shariah laws barring investors from profiting from the exchange of money, traded for 110.5 cents on Nov. 23 and as low as 42 cents on the dollar Nov. 27.

Creditor Incentive

“Even though it is going to be tough to restructure $26 billion of debt, Dubai World’s creditors have an incentive to do so in order to reduce the haircut that they will have to take,” said Rachel Ziemba, a senior analyst covering sovereign wealth funds at Roubini Global Economics, a New York-based research firm. “Time is short but they might still avoid defaulting on Nakheel’s $3.5 billion bonds due on Dec. 14.”

Dubai’s government told creditors of Dubai World on Nov. 30 that they should help in a restructuring the holding company because it hasn’t guaranteed the debt.

“The lenders should bear part of the responsibility,” the director general of the emirate’s finance department, Abdulrahman Al Saleh, said on state-run Dubai TV. The government’s Nov. 25 decision to seek a halt on Dubai World’s debt payments is “in the interest of all parties, the investors the creditors and the contractors,” he said.

Housing Slump

Dubai, the second-biggest of seven emirates that make up the U.A.E., and its state-owned companies borrowed $80 billion to fund a boom in growth and diversify the economy. The global financial turmoil and a decline in property prices hurt companies such as Dubai World as they struggled to raise loans.

The company received financing based on the “viability of its projects, not on government guarantees,” Al Saleh said.

Home prices in Dubai plummeted 47 percent in the second quarter from a year ago, the steepest drop of any market, according to Knight Frank LLC. Property prices may slide further, a survey by Colliers International showed Oct. 14.

Istithmar World, Dubai World’s investment unit, bought New York luxury retailer Barneys in 2007 for $942.3 million. Dubai World agreed in 2008 to invest about $5.1 billion in U.S. casino company MGM Mirage as part of a plan to diversify the emirate’s economy into entertainment and financial services.

Infinity World is a special purpose vehicle to buy Dubai World’s stake in U.S. casino company MGM Mirage in 2007. Ports & Free Zone World owns DP World Ltd., Economic Zones World, P&O Ferries and Jebel Ali Free Zone.

Dubai, home to the world’s tallest tower, set up a $20 billion Dubai Financial Support Fund after the seizure in credit markets. Dubai said Nov. 25 it borrowed $5 billion from Abu Dhabi government-controlled banks for the fund, after raising $10 billion by selling bonds to the U.A.E. central bank in February.

$5 Billion Borrowed

Dubai’s government raised $1.93 billion in October from the biggest sale of Islamic bonds from the Gulf Arab region this year, and paid off a $1 billion Dubai Civil Aviation Authority sukuk due Nov. 4. The sheikhdom and its state-owned companies have to repay $9.2 billion of bonds and loans maturing in 2010, $19.8 billion in 2011 and $17.3 billion in the following year, Deutsche Bank AG said in report in August.

Istithmar World breached covenants on two loans backed by London’s Adelphi office building on Oct. 19, the issuer said in a statement on Nov. 30.

Moody’s and Standard & Poor’s cut their ratings on Dubai state companies, saying they may consider Dubai World’s plan to delay payments a default.

“The times of implicit support are clearly over,” said Philipp Lotter, vice-president of Moody’s Investors Service in Dubai. “In the past, entities such as Dubai World certainly represented themselves as quasi-government entities, whereas there was no legal obligation on behalf of the government to support, and that has certainly shifted with last week’s announcement.”

Tags: Dubai,dubai

Stocks, Commodities Rise on Dubai, China; Dollar Weakens

Dec. 1 (Bloomberg) -- Stocks rallied from Shanghai to New York and the dollar slid as Dubai World began talks to restructure less than half its debt and Chinese manufacturing grew at the fastest pace in five years. Treasury 10-year notes dropped for the first time in six days.

The Standard & Poor’s 500 Index added 1.2 percent to 1,108.86 at 4:09 p.m. in New York. Europe’s Dow Jones Stoxx 600 Index jumped 2.7 percent, the most since July. The dollar weakened against 14 of the 16 most-traded currencies, gold rose to a record and oil climbed 1.4 percent. Aluminum, copper, lead and zinc led gains in industrial metals.

Dubai is in talks with its lenders to restructure $26 billion of debt, easing concern that a default would add to the $1.7 trillion that financial companies around the world have written down because of the credit crisis. An HSBC Holdings Plc index showed China’s manufacturing increased last month, while the Institute for Supply Management said U.S. manufacturing expanded in November for a fourth consecutive month.

“The scare with Dubai World is dissipating, it’s a faded memory at this point,” said Scott Richter, who helps oversee $18.6 billion at Fifth Third Asset Management in Cleveland. “The fact that they’re trying to restructure the debt and the central banks in the region are providing liquidity implies that it’s a more contained issue and it’s not going to blow up into another systemic Lehman Brothers. Or at least that’s the hope.”

Commodity Producers Rally

The Dow Jones Industrial Average increased 126.74 points, or 1.2 percent, to a 14-month high of 10,471.58. Caterpillar Inc., the largest maker of earth-moving equipment, and Home Depot Inc., the biggest home-improvement retailer, jumped at least 2.2 percent after the number of contracts to buy previously owned U.S. homes unexpectedly rose 3.7 percent in October, according to the National Association of Realtors.

Commodity producers, real-estate and media companies led gains in Europe as all 19 industry groups in the Stoxx 600 advanced at least 1.7 percent. HSBC Holdings, the region’s largest bank, added 2.7 percent in London as concern eased that losses from a possible default by Dubai World will spread. BHP Billiton Ltd. led basic-resources companies higher, gaining 3.5 percent.

The MSCI Asia Pacific Index jumped 1.5 percent. Nissan Motor Co., which gets 35 percent of its revenue from North America, added 3 percent in Tokyo as the yen slumped against the dollar. Baoshan Iron & Steel Co. surged 7.8 percent in Shanghai on speculation steel demand in China will increase.

The Shanghai Stock Exchange Composite Index added 1.3 percent and extended its two-day gain to 4.5 percent, the biggest since October.

‘Following on the Upside’

“When China is going up, the U.S., Europe and the U.K. are following on the upside,” said Louis de Fels, a Paris-based money manager at Raymond James Asset Management International, which oversees $29 billion. “We can see that what’s happening in Dubai was not a huge factor for the market, because we just went down for one day.”

Dubai’s announcement Nov. 25 that it would seek to delay debt repayments stoked concern that a potential default would set back the global financial system’s recovery from the recession. It triggered the biggest stock market slump in three months in Asia and Europe’s worst rout since April as the debt request risked adding to banks’ losses.

Qatar’s benchmark equity index fell 8.3 percent on the nation’s first trading day since Dubai’s announcement, leading declines across the Persian Gulf. The Dubai Financial Market General Index sank for a second day, dropping 5.6 percent to the lowest level since August.

Treasuries Drop

Treasuries declined as demand for the relative safety of U.S. government debt decreased. The yield on the 10-year Treasury note rose seven basis points to 3.27 percent.

The extra yield investors demand to own emerging-market debt over U.S. treasuries fell 14 basis points to 3.16 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index. The MSCI Emerging Markets Index of equities climbed 2.3 percent, the most since Nov. 9.

Dubai’s credit risk fell the most in nine months. The cost to protect against a default by Dubai dropped 113 basis points to 457, the biggest one-day decline since Feb. 23, according to credit-default swap prices from CMA Datavision.

Crude oil for January delivery gained $1.09 to $78.37 a barrel in New York. Natural gas fell 1.8 percent to $4.762 per million British thermal units on forecasts for milder weather later this month.

Copper advanced 1.7 percent to $3.231 a pound in New York, while lead, zinc and aluminum also rallied. Gold rose for the 11th time in 12 session, jumping to a record above $1,200 an ounce as declines in the dollar spurred investor demand for an inflation hedge.

Australia’s dollar strengthened, rising 1.3 percent versus the yen and 0.9 percent against the U.S. currency, as the nation’s central bank increased interest rates for an unprecedented third consecutive month, citing the pace of Asia’s economic recovery.

Tags: Dubai,dubai

Reid $849 Billion Measure Widens Health Coverage, Cuts Deficit

http://www.bloomberg.com

Nov. 19 (Bloomberg) -- Senate Majority Leader Harry Reid unveiled an $849 billion health-care plan that would create new government competition for private insurers, cover almost all Americans and raise a payroll tax on the highest earners.

Reid’s proposal, the most sweeping overhaul of the U.S. health system in four decades, cleared a major hurdle when the Congressional Budget Office said it would cut the federal budget deficit by $127 billion in the first decade. That met a standard set by President Barack Obama and allows Reid to seek a vote as early as Saturday to open the way for Senate debate.

The 2,074-page Senate bill would extend coverage to 94 percent of Americans or some 31 million people, lawmakers said. The House passed its version on a vote of 220-215 on Nov. 7.

“This legislation is a tremendous step forward,” Reid told reporters at the Capitol last night. “Tonight begins the last leg of this journey.”

That last leg is full of obstacles. Senate Republicans are universally opposed to his plan and Democrats are divided over issues ranging from the new government-insurance plan to how to pay for the measure. And an even bigger battle looms when the Senate and House try to work out a compromise, each pushing for their own version of the legislation.

Calendar Threat

The calendar is also increasingly a threat. Should work spill into next year, the congressional elections and breaks in the legislative schedule may open the effort up to the same types of criticism that dogged Democrats during their August recess. Democrats in tight re-election battles might be tempted to defect from their party’s agenda.

The legislation is intended to both reduce the ranks of the uninsured and curb rising medical costs. Both the House and Senate versions require that Americans get health coverage or pay a penalty, set up online insurance-purchasing exchanges and offer government aid to help lower-income people.

The Senate legislation would reduce the deficit by $650 billion in the second decade, according to preliminary estimates from the nonpartisan CBO cited by lawmakers.

While Obama has said he wants to sign health-care legislation into law this year, Reid has cast doubt on that goal after months of setbacks and signs the Republicans want to prolong the debate by using delaying tactics.

‘Closer Than Ever’

“We’re closer than ever to enacting solutions to these problems,” Obama said in a statement released by the White House. “I look forward to working with the Senate and House to get a finished bill to my desk as soon as possible.”

Reid included a so-called public option program to compete with private insurers such as Hartford, Connecticut-based Aetna Inc. even though it’s opposed by all Senate Republicans and some Democrats. He’s gambling he can get support to start debate on a bill that’s likely to be rewritten by the full Senate.

While the House plans an income surtax on the wealthiest Americans, much of the funding for the Senate bill will come from a tax on high-end insurance. That so-called Cadillac tax would be assessed for plans valued at $8,500 for individuals or $23,000 for families, with higher thresholds for high-risk workers and people living in states with costlier premiums.

Reid settled on a Medicare payroll tax increase for some Americans, raising the rate to 1.95 percent from 1.45 percent for couples earning more than $250,000.

He also plans a new commission to help set rates paid by Medicare, the government program for the elderly.

Employer Requirement

Another new twist is Reid’s decision to put a 5 percent tax on elective cosmetic surgery. Still, much of the funding for the bill would come from cuts in future Medicare spending, largely through curbing fraud and abuse, Obama and lawmakers have said.

Reid also took steps to keep the costs down in the CBO estimate in part by delaying many elements of the bill to 2014 from 2013, including establishment of the insurance exchanges and their subsidies for the poor.

Under Reid’s bill, companies with 50 or more workers would face penalties if they don’t provide coverage and have workers who get taxpayer-funded subsidies to buy policies. It also includes a federally run long-term care insurance plan that would let workers pay premiums and then get a cash benefit later for adult day care or assisted-living expenses.

Pre-Existing Conditions

Like the House legislation, Reid’s plan would also bar insurers from denying coverage based on pre-existing conditions, and help seniors pay for prescription drugs.

New York Senator Chuck Schumer, one of the Democratic leaders, told reporters “everything looks good” for an initial vote to start debate. At least three Democrats -- Senators Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas -- had refused to pledge their votes for that step until they could review the bill’s text.

The bill “is better in some ways than in other ways,” Nelson said yesterday. “Until I have a chance to go through it, a brief explanation is not enough” for a conclusion, he said.

Reid met with the three senators yesterday and got some help from Vice President Joe Biden, who went to Capitol Hill to lobby other senators. Former Senators Tom Daschle and Ken Salazar, who now serves as Obama’s interior secretary, also met with lawmakers.

To win passage, Reid has to keep all 60 votes controlled by Democrats together. Besides Nelson, Landrieu and Lincoln, Connecticut Senator Joe Lieberman has been critical of the public option. Lieberman, an independent who caucuses with the Democrats, said he would support the vote to start debate and work with lawmakers to strip out the government program.

Snowe’s Trigger

Maine Senator Olympia Snowe, the only Republican to vote for a health-care plan in the committee phase, said she can’t support a public option. She’s pushing for a trigger to put a government plan in effect only if there is evidence that policies offered by private insurers are unaffordable.

Senator Orrin Hatch, a Utah Republican, said it’s doubtful any Republican will vote for Reid’s plan. He also said Reid should allow enough time for debate.

“We’re talking about one-sixth of the economy,” Hatch said. “This should be a very deliberative process. And it should take more than a month and a half.”

Reid has safeguards to keep federal dollars from funding abortion, though not the restrictions adopted in the House. Abortion rights supporters have threatened to vote against a final bill if it contains the House language and have been working to keep it out of the Senate version.

If the Senate passes legislation, it would work with the House to come up with compromise legislation for a new round of votes in both chambers before a bill would go to Obama.

“We are now down to the week we have been waiting for,” Massachusetts Senator John Kerry told reporters. “This is not just a matter of months in the waiting, this has been decades in the waiting.”

Obama Aims to Allay Auto Lobby Concern on Korea Trade

http://www.bloomberg.com/

President Barack Obama said he is committed to pushing through a free trade agreement with South Korea that has been stalled by the U.S. auto lobby and unions, who argue it doesn’t do enough to open up Korean markets.

Obama’s joint press conference in Seoul today with South Korean counterpart Lee Myung Bak was a last chance on his four- nation Asia trip to show he opposes protectionism. The accord has been held up in Congress, where lawmakers are demanding wider access for Chrysler Group LLC, Ford Motor Co. and General Motors Co. Lee said today he is willing to reopen talks on the auto industry.

The U.S. Chamber of Commerce estimates that failure to enact the accord means the loss of $35 billion in exports and 345,000 jobs. South Korea signed a rival agreement with the European Union last month that calls for 99 percent of commerce to be duty-free within five years.

“Team Obama talked the talk, now we’ll see if they walk the walk,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington. “Possibly in Seoul the president will achieve another breakthrough” with a commitment to seek ratification of the U.S.-South Korea pact.

U.S. automakers sold 6,980 vehicles in South Korea last year, or 0.72 percent of the passenger car market, according to the Korea Automobile Importers & Distributors Association. Those figures exclude GM’s local Daewoo unit, which captured 7 percent of the market in the first nine months of this year.

Hyundai Motor Co., Korea’s biggest carmaker, accounted for almost half of all sales at home. Through October this year, Hyundai raised its U.S. sales 4.1 percent to 373,222 vehicles.The U.S. market share for Hyundai and its Kia Motors Corp. affiliate was 7.3 percent in October. Hyundai says about a quarter of the cars the group sells in the U.S. are made there.

Trade Imbalances

Obama said he would work to address the issues in the U.S. that were holding up the free trade agreement.

“There is obviously also a concern within the United States around the incredible trade imbalances that have grown over the last several decades,” Obama said. While that imbalance was not so marked with South Korea, “there has been a tendency I think to lump all of Asia together when Congress votes on trade agreements.”

While in Asia, Obama has been called on by regional leaders, including Malaysian Prime Minister Najib Razak and Chinese President Hu Jintao, to demonstrate the U.S. will work to reduce trade barriers. At the Asia-Pacific Economic Cooperation summit in Singapore, Obama expressed interest in joining and expanding a regional free-trade group that so far includes Chile, New Zealand, Singapore and Brunei.

Forging an agreement that would ensure passage of the Korea trade accord will be “politically tough back in the U.S.,” Hufbauer said.

Tax Hurdle

Democrats, who have majorities in the House and Senate, are holding up a vote on the agreement. Representative Sander Levin, a Michigan Democrat and chairman of the House Ways and Means Committee’s trade panel, said South Korea first must remove tax and regulatory obstacles to sales of U.S. autos, refrigerators and other manufactured goods.

Lee’s comments appear to mark an about-face. Yesterday, Ahn Ho Young, South Korea’s deputy minister for trade, said there would be “no re-negotiation.”

South Korea is the seventh-biggest U.S. trading partner. Last year, two-way trade totaled $82.9 billion, according to the Commerce Department.

China, the second-biggest U.S. trading partner after Canada, has been subjected to a series of trade sanctions by the Obama administration on tires and steel pipe in the months leading up to the president’s Asia trip. China called the pipe tariffs “discriminatory” and said it would start its own anti-dumping probe of American cars.

Keeping Quiet

Obama didn’t mention trade during a joint appearance with Hu Nov. 17 at Beijing’s Great Hall of the People. Hu urged Obama to “oppose and reject protectionism in all its manifestations in an even stronger stand.”

Still, U.S. companies used the president’s visit to help cement business ties in China. Tempe, Arizona-based First Solar Inc. advanced its plan to build the world’s biggest plant directly converting sunlight to electricity in Inner Mongolia, signing an agreement in Beijing Nov. 17 with U.S. Energy Secretary Steven Chu and Chinese Vice Premier Li Keqiang in attendance.

China is the third-biggest export market for the U.S., with outbound shipments last year amounting to $71.5 billion, an increase of 9.5 percent from 2007. The U.S. imported $337.8 billion from China last year, more than from any other country, according to the Commerce Department.

North Korea

Obama and Lee reiterated their commitment to bringing North Korea back to multilateral talks on ending its nuclear weapons program. China is host to six-party negotiations that include the two Koreas, Japan, Russia and the U.S. The talks were broken off after North Korea launched a rocket in April in violation of a United Nations resolution.

Obama said he and Lee “both agree on the need to break a pattern that has existed in the past in which North Korea behaves in a provocative fashion; it then is willing to return to talks; it talks for a while, and then it leaves the talks seeking further exceptions and is never actually making progress on the core issues.”

e-commerce - the basic

Electronic commerce or e-commerce means buying products or services via the Internet. One way to do that is by using a credit card and the manner in which this process is shown in the diagram below.
Consumers visiting the online shop to purchase your merchandise. The transaction data via a secure connection, or SSL, the web host server.
The encrypted credit card data are handled by the Payment Processing Gateway, which is responsible for the transaction.
The movement of funds is handled by the merchant account.
The funds are then charged to the credit card buyers.
Followed by the funds being deposited in the seller bank.
Managing E-commerce
There are several ways to manage e-commerce transactions on your website. Perhaps the simplest method by which third party such as Paypal, to handle all your e-commerce process or any other method is by including all your website pages.
For all through your website, your site will be designed for your merchandise.
You can use the shopping cart system.
Alternatively you can use one of your own system with a customized website and a database.
If you accept credit card transactions through your website, it is important you Secure Socket Layer, or SSL, encryption in place. This ensures all transaction data is encrypted as they travel between the buyers and the PC server. When using an SSL secure system, a small padlock symbol is shown on your web browser at the bottom right of the screen.
There are two ways to integrate SSL into your website.
You can set the SSL field to the hosts.
You can create your own SSL certificate. This costs about $ 100 per year and requires a Hosingen account and a unique IP address. This method is certainly more professional than using third party such as Paypal.
If you decide to handle e-commerce transactions through your website, instead of third party to manage them, you should also set up a Merchant Account and a processor account.

tags: E-commerce ,Make Money On Line,credit card

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Tags: HYIP, MONEY, INVESMENT, FINANCE, MONEY MARKET, RATE, INVESTING, IMVEST, ON LINE INVESTMENT, INTERNET MONEY

U.S. loans GM $4 billion more

General Motors, which is surviving on $15.4 billion in U.S. government loans, announced today that it has received an additional $4 billion from the government.

In a regulatory filing, GM said it borrowed the additional money today after amending its loan agreement with the U.S. Treasury last Wednesday.

The new loan brings the total amount lent to GM to $19.4 billion.

The automaker said in press release that the new loans are “to maintain adequate liquidity as the company undergoes an aggressive restructuring.”

GM said it had previously believed it would need only $2.6 billion prior to June 1 but now forecasts needing that amount plus an additional $1.4 billion.

The added $1.4 billion “reflects updated timing of when certain expenses would be incurred,” the company said.

The additional amount is being pulled ahead from money that was expected to be borrowed later. GM had forecast that it would need $9 billion from the government after June 1. Now that total has now dropped to $7.6 billion.

“We appreciate President Obama's and his Administration's ongoing support of GM and the domestic U.S. auto industry as we undertake the difficult but necessary actions to reinvent our company,” GM said in a statement. “We will continue to work closely with members of the President's Auto Task Force throughout our restructuring and together we will continue to monitor our liquidity needs during this period.”

Payday loan regs pass, ending 4-month impasse

The Senate passed a payday lending bill today, a controversial measure proponents call a compromise, and consumer advocates call disappointing.

The Senate vote for passage, 41-4, broke a four-month long General Assembly impasse.

Sen. Joel Lourie,D-Richland, a co-sponsor of the compromise amendment that broke impasse, said he expects the House of Representatives to accept the Senate version of the bill, without a need for further action.

If that happens, the bill would go downstairs for the governor to sign or veto.

The compromise raises the maximum payday loan amount to $550 from $350, and limits outstanding loans to one at a time by way of a database that will track borrowers.
.
Borrowers would have to wait one day between loans, and after consecutive loans a two-day cooling off period would be in effect.

Other provisions of the compromise are that borrowers would have a 24-hour to change their mind on taking out a loan, meaning they could cancel the transaction within 24 hours if they chose.

If borrowers get trapped in a loan they cannot repay, they could enter an extended payment plan, once per year, which would allow their loan repayment to be broken into four equal payment dates.

The bill also calls for an annal review of the database by the state Board of Financial Institutions, which must make a report to the Senate Banking and Insurance Committee and the House Labor, Commerce and Industry Committee.

Loan reset threat looms till 2012

Homeowners nationwide with good credit but artificially low mortgage payments could be forced to pay more to the bank sometime within the next three years, according to Credit Suisse.

If low interest rates remain, some of these borrowers will be spared payment shock. But those with extremely low payments via deferral of interest/principal owed, will not.

While preparing a story about high-priced foreclosure resales selling slowly in Orange County, I asked Credit Suisse for the latest version of its chart on loan resets nationwide. (The chart has popped up on several Web sites in past months.)

To the right is the version updated last month (click on it for larger image). It shows resets increasing from here with peaks in 2010 and 2011/2012 in the range of $30 to $45 billion monthly. The chart also shows subprime resets are still going on, but decreasing in frequency over the rest of 2009. However, prime resets and resets on loans to people with decent credit scores but special circumstances (stated income) are heading straight up through early 2012.

Note that the chart uses both resets, when interest rates change, and recasts, when payments change. Resets and recasts often happen at once, but not always. Credit Suisse, an analyst told me, used resets in the chart for all loans except option adjustable-rate mortgages, when borrowers can choose a minimum payment that may be less than interest owed (option ARMs are in yellow on the chart… see how they are rising!). For option ARMs it used recasts, which can happen either when the loan amount expands to a maximum allowed — often 115% or 125% of original principal — or a set period, such as five years. (Read more on resets/recasts at Calculated Risk.)

Now here is a copy of the chart published in a February report. This chart goes back further in time. The older chart shows a big peak in 2010 — about $40 to $45 billion a month in loans around September/October 2010. The newer chart pushes that peak about one year into the future into late 2011/beginning 2012.

Some borrowers will hold on a little longer. Maybe the housing market will recover by 2012 and they can sell to avoid foreclosure.

But if any of these borrowers are deferring principal and interest owed, reaching say a maximum of 125% on a loan amount on 2005 to 2007 prices, then it is much less likely home prices will have rebounded enough to save them by 2011 or 2012.

1-in-4 O.C. home buyers use federal loan program

For the past five months, roughly one out of every four home buyers in Orange County used a federally run loan insurance program that was practically nonexistent here two years ago.

Now home buyers are taking advantage of loans insured by the Federal Housing Administration. One reason: they can make a down payment as low as 3.5% and that can be gifted from a relative. Another reason: the limit was raised to nearly $730,000.

The chart (click on it for larger image) shows FHA market share of purchase loans per month — it was 24.2% in April, down a tad from 25.2% in March but nearly triple a year ago.

FHA has also taken off because brokers and lenders are pushing the program to consumers. When investors in 2007  stopped buying securities backed by mortgages with no government protections, lenders increased or switched to FHA loans and also began doing more loans that can be sold to Fannie Mae or Freddie Mac, which are both under federal receivership.

Under FHA, borrowers pay a fee, and those fees go into a pool which is used to compensate lenders if borrowers default. However, if the pool is inadequate to keep up with defaults, taxpayer money could be used to fill the gap.

I haven’t seen data on what percentage of Orange County purchase loans are being sold to Fannie or Freddie, but I would guess they are making up most of the other 75% of the market.

Our federal government is keeping Orange County’s housing market on life support. How long will this go on?

Stimulating success

Chamber’s ‘Financing Options for Your Business’ program June 9

By Jessica Legge
Times West Virginian

FAIRMONT — The Marion County Chamber of Commerce is helping small businesses learn about financing assistance that could help them succeed.
A chamber event, titled “Financing Options for Your Business,” will take place at 6 p.m. June 9 at the I-79 Technology Park Research Center in Fairmont.
The organization is inviting all of its members to attend this reception, sponsored by Freedom Bank and the West Virginia High Technology Consortium Foundation. The event, which the chamber’s small business committee is organizing, will give attendees the opportunity to discuss financing options that are available.
“The reason we’re doing this now is we feel it’s very timely because of all the stimulus funding that is coming through,” Tina Shaw, president of the chamber, said.
During this panel discussion, several organizations will talk about the financing assistance that small businesses can apply for and the application process, she said. Attendees will be able to find out about the federal government money now available for start-ups, expansion and other business needs.
The panel will include representatives from the Small Business Administration, Washington County Council on Economic Development, West Virginia Economic Development Authority, and U.S. Department of Commerce.
“This is one of the things that our members have told us that they want,” Shaw said. “They want us to host programs that are educational that will help them grow their business (and) showcase products that are out there that could assist them.”
She said there is no cost to attend, and the event will be catered. The chamber is also inviting local financial institutions and other economic-development agencies to provide information to the small businesses.
“They will be there to answer any questions,” Shaw said. “That connection will be right there.”
“We think it’s going to be very beneficial to our small business members.”
To attend, call the Marion County Chamber of Commerce at 304-363-0442 by June 2. While the event is for chamber members, interested persons who aren’t members can call the office to see if seating is available.
On March 16, President Barack Obama announced enhancements to some of the SBA’s programs as part of the American Recovery and Reinvestment Act of 2009. During the upcoming chamber reception, representatives from the SBA will present updates on the new stimulus package and talk about some additional enhancements.
Rick Haney, public affairs officer for the SBA’s West Virginia District Office in Clarksburg, said the focus will be on the agency’s regular loans, which the stimulus package enhances.
The SBA will also discuss some of the qualifications that lenders take into account when it comes to financing and how small businesses can be prepared when they go to the bank. Lenders base much of their decision on a small business’ credit and character, he said.
“Each lender’s different, but they have basically the same type of credit that they look for,” Haney said. “Mostly it’s credit-worthiness. They’re looking for payback — how they’re going to be repaid.”
Small businesses that get any SBA loan this year will incur no fees, he said. The elimination of those costs to get an SBA loan is a big incentive for businesses.
Haney said the 7(a) loan is the SBA’s main financing program, providing funding for any type of business need. The SBA also has a Microloan program, and the 504 loan is a fixed-asset loan program offered through certified development companies and lenders.
He explained that the SBA doesn’t make direct loans, but the funding is available through small business lenders.
“We do work with just about every lender in the state as far as SBA loan programs,” he said.
Around the middle of June, the SBA will offer the America’s Recovery Capital (ARC) loan, which is also tied in with the stimulus program. The details are still being worked out for this new loan, which will provide funding of up to $35,000 for viable small businesses that need help making payments on existing non-SBA loans or debts. The loan is 100 percent guaranteed, has a 0 percent interest rate, and repayment doesn’t start until a year down the road, Haney said.
“They can use that to basically catch up their delinquencies,” he said.
Haney said if small businesses are looking to borrow money from a lender, the chamber event would be an ideal spot for them.
“The SBA looks upon chambers and entities like that as resource partners,” he said. “They’re our eyes and ears. They’re our direct contact with the small business, where we’re the more direct contact with the lenders.”
He said it’s important “to reach out to the small business community and let them know what’s available,” and to get their feedback.
The Washington County Council on Economic Development, another participant in the chamber’s panel discussion, has been around for 20 years. This entity, out of Washington, Pa., is an SBA Microloan lender that does work in Marion, Harrison and Monongalia counties and in four counties in southwestern Pennsylvania, said Ed Nemeth, senior loan officer.
“We specialize in helping entrepreneurs and start-up businesses as well as any small business that’s looking to expand,” he said. “We don’t have the stringent lending criteria that your (banks have). We’re better equipped to help an entrepreneur start up a company.”
Nemeth said the Microloan program offers anywhere from $1,000 to $35,000 to small businesses, and the average loan is around $19,000.
While the Washington County Council on Economic Development has been working in Monongalia County for a while, the organization is trying to get the word out in Marion and Harrison counties about its services.
“We’re trying to expand our presence down into Marion and Harrison,” he said. “Marion and Harrison are newer to us.”
The council is trying to let small businesses know that it’s there to help.
E-mail Jessica Legge at jlegge@timeswv.com.

LI loan officer charged in mortgage scam

As a Garden City loan officer, Anita Bareja approved applications like the one from a purported sales manager earning $15,000 a month, prosecutors said Friday.
In reality the borrower was a welder earning $11 an hour -- and a partner in Bareja's scheme to steal money from banks through fraudulent mortgage applications, according to a release from Nassau District Attorney Kathleen Rice's office.
Bareja, 35, of Dix Hills, pleaded not guilty Friday to charges of grand larceny and forgery charges in First District Court in Hempstead. She was held on $20,000 bond, or $10,000 cash, and due back in court May 26.
A message for Bareja's lawyer Neil Greenberg was not immediately returned.

Prosecutors say Bareja approved at least three false loan applications from co-conspirators, based on what she knew to be falsified bank and employment information, and took an estimated $500,000 in profit, Rice said.
Two co-conspirators are to be arrested soon, according to a spokesman for Rice. No further details were available.
On top of lying about the co-conspirators' salary information, the mortgage applications included forged house appraisals to inflate the amount of the loans, Rice said.
Bareja faces two counts of second-degree grand larceny, three counts of first-degree falsification of business records, one count of first-degree scheme to defraud, and four counts of third-degree criminal possession of a forged instrument.
In May 2006, Bareja, while working at EFI Capital Corp., and her co-conspirators, used falsified employment records, financial information and bogus appraisals to obtain more than $1.5 million in fraudulent mortgages, Rice said.
Once Bareja approved the loan for the inflated sale price, she and her co-conspirators would profit from the difference, Rice said. They then defaulted on the loans and sent the newly purchased home into immediate foreclosure.
The investigation is ongoing.

Tags: Loan,money,debt,insurance,economic,bank

Story Comments 01 May 22, 2009 in City State officials reject airport’s bid for expansion loan

SEATAC, Wash. – In a decision that could jeopardize more than 200 planned jobs, state officials on Thursday rejected the Spokane airport’s request for a $6.8 million loan.

It’s too much to ask for, some members of the state Community Economic Revitalization Board said, when many rural communities are struggling more.

“I just can’t get there,” said board member George Raiter, voting no.

But by a single vote, the board also offered an alternative: $4 million. Proponents were disappointed, but said they’d see if there was a way to make it work.

“Hopefully there is. We want to be in Spokane,” said Bret Burnside, president of Cascade Aerospace USA, one of the two companies that wants to expand into a new $11.6 million building that would be partially paid for with the loan money.

Airport spokesman Todd Woodard said the expansion would create 266 new jobs.

“It’s an extraordinary number for Eastern Washington,” said Terry Lawhead, the regional manager for the state office of Community, Trade and Economic Development.

Unfortunately for proponents, $6.8 million was also an extraordinary number. Until now, CERB loans have been capped at $2 million.

“Leaping from 2 to 6.8 is a big step,” board member Marty Gardner said. The board voted to do away with that limit to consider the Spokane proposal.

For the past three years, state cash has helped add 142 local aircraft-based jobs. Some $750,000 in grants and nearly $3.3 million in loans has helped develop facilities used by four companies. Among them: a new 18,000-square-foot maintenance hangar.

Since setting up maintenance operations in February, Cascade has grown from 40 Spokane-area jobs to 60. Workers commute from as far away as Idaho and Moses Lake. Burnside said Thursday that a pending deal could mean 60 more jobs by the end of the year.

To supplement the $6.8 million no-interest loan, the airport would kick in $1 million, with Cascade and an aircraft-painting company, Associated Painters, each adding nearly $2 million.

In Cascade’s case, Burnside said, having the additional hangar space would mean the company could add more than 200 new workers, plus work for local suppliers. Associated Painters President Rod Friese said the Spokane operation would mean 36 jobs or more. The new facility is essential, he said.

“Without it, we will be forced to look elsewhere,” he said.

Spokane Community College would piggyback on the expansion, moving its aircraft-technician program from Felts Field. SCC President Joe Dunlap said the program has grown from 43 students to 90 in just two years.

Spokane International Airport’s proposal has already been pared back once. The original plan was to ask for a total of $8.7 million to build two buildings.

CERB projects are mostly rural, but in the last months of each two-year budget cycle, unspent money can be used for urban projects. The airport, as part of Spokane County, is considered urban.

The two-year budget cycle ends June 30. After that, any money left over would fall under the next budget’s rules, meaning that only $1.5 million can be spent in urban areas.

So airport and company officials must decide quickly whether they can make the project work with $4 million.

Some CERB members objected to spending so much money in one spot. State Sen. Dan Swecker, R-Rochester, suggested that the proposal was an urban money grab. CERB loans are for hard-to-grow rural areas, he said. Urban areas can find other money, he said. “Urban always wins,” he said.

Raiter, a county official from Kelso, also said the project would wrongly gobble up money that could be spread around. “I can’t do that to other parts of the state,” he said.

And the Spokane airport has “gotten three CERB loans since 2005,” added board member Julie Tappero, of Gig Harbor. “It’s not like they’ve never gotten anything.”

Sen. Brian Hatfield, D-Raymond, argued that the 266 jobs were a rare “bird in the hand” that shouldn’t be turned down in favor of awarding $50,000 here and there.

“What did we really get for that in the long term?” he said. “Right now we need jobs for the recession.”

Tags: Loan,money,debt,insurance,economic,bank

Government seeks US$300mn World Bank loan for transport sector

The Peruvian government is seeking a US$300mn loan from the World Bank to partly finance transport infrastructure development projects, according to a bank document posted on its website.

The funding - to be covered by the World Bank Group's International Bank for Reconstruction and Development (IBRD) - would support road and highway projects (80%), and the general transportation sector (20%).

The loan would support an overall US$1.08bn transport infrastructure development program, of which another US$630mn is to be covered by the state and US$150mn by IDB.

The World Bank's contribution is expected to be authorized on October 8, while its approval by the bank's board is expected for January 28, 2010.

According to document, US$200mn of the US$300mn loan would support an US$880mn road rehabilitation and maintenance program developed by the transport and communications ministry (MTC).

Another US$75mn of the funding would support a US$150mn road maintenance program known as Proyecto Perú, implemented by the national roads authority (Provías).

A total of US$20mn would support a US$40mn road safety program to reduce critical points and improve bridges, improving safety standards along a number of national roads.

Finally, US$5mn would support a US$10mn institutional support and transport regulation initiative, which seeks to improve the institutional performance of Provías and other MTC areas, increasing the quality of infrastructure management, monitoring and evaluation by improving information and planning, among other issues.

Tags: Loan,money,debt,insurance,economic,bank

Banks approve $150-M loan to ICTSI

MANILA, Philippines—Port operator International Container Terminal Services Inc. (ICTSI) has raised $150 million from a three-year loan with a syndicate of seven banks for the refinancing of some debt due by end-2010.

In a disclosure to the Philippine Stock Exchange yesterday, ICSTI said it had signed a three-year loan facility with The Bank of Tokyo-Mitsubishi UFK Ltd., Calyon, HSBC Ltd., Australia and New Zealand Banking Group Ltd., Chinatrust (Philippines) Commercial Bank Corp., Citibank NA and Mizuho Corporate Bank Ltd.

“Proceeds of the loan facility will be used to refinance substantially all of the remaining outstanding balance of the company’s $250 million revolving and term loan facility due in December 2010 and will result in ICTSI having no substantial debt repayments due until the second half of 2011,” the company said.

It was earlier reported that ICTSI is bracing for a tough global environment by settling some debts ahead of maturity and negotiating with foreign creditors to stretch out the term of the large maturities next year.

ICTSI has already prefunded its capital requirements for this year and taken steps to prefund some of the debts due next year. The company tapped $106 million in remaining funds from a revolving credit facility in October last year and raised another P7.2 billion last December from five- to seven-year loans.

The company’s principal business is the management, operation and development of container terminals here and abroad while subsidiaries provide cargo handling and related services to container, storage facilities and services, and roll-on roll-off and anchorage services to non-containerized cargo or general cargo.

Aside from operating its flagship Manila International Container Terminal, ICTSI also operates two other terminals in the Philippines—the Cubi Point at the Subic Bay Freeport Zone in Zambales and Sasa International Port in Davao City. It also has a global portfolio of port terminals in 11 countries across four continents. It has operations in the Philippines, Brazil, Poland, Madagascar, Japan, Indonesia, Syria, China, Ecuador, Colombia and Georgia.

Doris C. Dumlao

Tags: Loan,money,debt,insurance,economic,bank

Pilgrim's Pride repays DIP loan, sells assets

NEW YORK, May 22 - Pilgrim's Pride Corp <PGPDQ.PK>, the bankrupt U.S. chicken processor, said on Friday that it fully repaid its $450 million debtor-in-possession financing facility and completed the sale of its Farmerville, Louisiana, processing facility for $72.3 million.

The company said it sold the Farmerville complex, which includes a processing facility, a cook plant, two hatcheries, a feed mill and a protein conversion plant, to Foster Farms. A U.S. Bankruptcy Court approved the sale earlier this week.

Pilgrim's Pride said the proceeds of the sale will be held in a cash collateral account and used for general corporate operating purposes as needed.

The company and certain of its subsidiaries filed for Chapter 11 bankruptcy protection in December. It has been closing plants, reducing production and laying off employees as it works to return to profitability.

Tags: Loan,money,debt,insurance,economic,bank

Citizens Bank Foundation Donates More Than $170,000 to Financial Literacy Programs

Programs offer financial tips to individuals on how to manage their money and budget for the future

BOSTON, May 8 /PRNewswire/ -- In recognition of April's Financial Literacy month, the Citizens Bank Foundation announced it has provided more than $170,000 in grants to local organizations supporting financial literacy programs during the first quarter of 2009.

Nonprofit recipients and programs include:

• Greater Boston Interfaith Organization - Moving from Debt to Assets
• BayPath Elder Services - Money Management for Seniors
• Junior Achievement of Central Massachusetts - Financial Literacy for the Future
• Allston Brighton Community Development Corporation - Homebuyer Classes
• Girls Incorporated of Worcester - Economic Literacy
• Valley Community Development Corporation - Homeownership Assistance Center

National Financial Literacy Month is designed to bring awareness to the importance of developing and maintaining healthy financial habits. Financial education provides individuals with the understanding and knowledge to become financially independent by giving people a basic understanding of investing options, managing saving accounts, budgeting tools, credit and debt.

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StemCells Announces 2009 First Quarter Financial Results

For the quarter, the Company’s loss from operations was $6,924,000, which was essentially unchanged compared to the loss from operations of $6,897,000 in the first quarter of 2008. The loss from operations in the first quarter of 2009 includes approximately $544,000 of expenses related to the Company’s acquisition of the operating assets and liabilities of Stem Cell Sciences Plc (“SCS”) which closed on April 1, 2009. In the first three months of 2009, net cash used in operating activities was $5,782,000, a decline of 21% compared to the $7,291,000 in net cash used for operating activities in the first quarter of 2008. The decline in cash used for operating activities in the first quarter of 2009 as compared to the same period in 2008 was primarily attributable to more proactive management of the Company’s working capital.

The Company reported a net loss of $9,282,000, or $0.10 per share, for the first quarter ended March 31, 2009, compared to a net loss of $6,545,000, or $0.08 per share, for the first quarter of 2008. The increase in net loss in 2009 compared to the same period in 2008 was primarily attributable to a non-cash expense of $2,755,000 recorded in the first quarter of 2009 to reflect an increase in the Company’s estimated warrant liability.

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Experts call for broad flu watch

The head of the World Organisation for Animal Health called on Friday for greater surveillance of pigs and animals other than birds in intensified efforts to limit the impact of future pandemic flu outbreaks.

Bernard Vallat, director-general, told the Financial Times it was “entirely wrong” to focus on slaughtering pigs as a result of the outbreak in Mexico but that there was a long-term need to step up surveillance of animals other than birds, a primary focus because of fears of H5N1 bird flu.

He made the comments as the World Health Organisation said the spread of the swine flu virus was broadly stable, with 11 countries reporting 331 laboratory confirmed cases of the virus, including 10 deaths. Only Mexico, with 156 cases and nine deaths, and the US, with 109 cases and one death, have seen “sustained community transmission”.

Mr Vallat’s organisation – reinforcing similar calls from Infosan, the International Food Safety Authorities Network – has been at the forefront of criticism leading to the WHO this week switching the name “swine flu” to influenza A (H1N1), stressing that while it contains porcine virus genes, there is no evidence the virus is currently circulating among pigs anywhere.

Virologists say pigs’ biology makes them perfect “mixing vessels” in which new flu strains are formed, making them important animals to study in order to monitor future viruses with potential to infect humans.

Even as a growing number of countries and individual businesses advised against international travel, the WHO warned that to do so would do little to prevent the spread of the virus while proving “highly disruptive to the global community”.

Marie-Paule Kieny, WHO’s vaccine research director, said the agency was discussing plans to produce a pandemic vaccine with all the relevant companies round the world, many of which are now well advanced in producing seasonal flu vaccine for the next northern hemisphere winter.

“What is absolutely certain is that within a few weeks there will be switches from seasonal to influenza A (H5N1),” Dr Kieny said. “We have no doubt that making a successful vaccine is possible within a relatively short period of time.