ATLANTA'S DEADLY FOOD DESERTS: IT'S ALL ABOUT BLACK POPULATION CONTROL

ATLANTA'S DEADLY FOOD DESERTS:

IT'S ALL ABOUT BLACK POPULATION CONTROL

DOES MAYOR KASIM REED CARE??

ATLANTA'S WORST DESERTS & DIRTIEST WATER COMMUNITIES ARE SOUTHWEST, EAST POINT & BANKHEAD.

ATLANTA, Ga is the birthplace of Civil rights beacon Dr Martin Luther King Jr, a regional Mecca "too busy to hate", Hub for Southeastern Federal Govt offices and home of the Real Housewives of Atlanta.

ATLANTA is also a city infamously known for its many FOOD DESERTS and Poor Quality, Bacteria-filled Drinking water.

How can such a Progressive, Wealthy city of six millions residents, mostly BLACK, with so much Business Commerce, allow the majority of its BLACK citizens to prematurely Die from preventable diseases I.e. Obesity, Cancer, Diabetes, Kidney Failure and HIV, all of which derive from Atlanta's Food Deserts, abundance of Greasy Food, and Bacteria-Filled drinking water?

Is this being done intentionally for the purpose of Killing off low income BLACK residents of Atlanta?

~ Starving for nutrition

Poor diets and inaccessibility to healthy foods are creating a crisis of chronic disease.


By Gracie Bonds Staples | The Atlanta Journal-Constitution

In many ways, Evie and Ricky Sanders are lucky, and they know it.

On a good day, if their used 2004 Honda Pilot isn’t on the blink, it takes them no more than 10 minutes to drive the 10 miles from their home in Cumming to the nearest Kroger.

Ricky, 57, is a former flower nursery worker who is HIV-positive and struggles with the side effects of his medications. His wife, Evie, 58, is a former nursing assistant who suffers from chronic obstructive pulmonary disease. They live in a three-bedroom wood frame house atop a small hill in rural Forsyth County, where they eke out a living from $1,500 in monthly disability checks and $25 a month in food stamps.

What the Sanders have learned is that, for them at least, even good days have a bad side.

“Most of our shopping is done from the carts where the markdowns are,” Evie says. “We can’t afford name brands.”

To make ends meet, they rely on the monthly supply of staples they get from There’s Hope for the Hungry, a nonprofit organization that feeds 26,000 North Georgia families a year, many of whom, like the Sanders, live in what the USDA calls food deserts. Their homes are located in low-income areas more than one mile from a supermarket or other reliable source of fresh fruits and vegetables.

Nearly 2 million Georgia residents, including about 500,000 children, live in food deserts. The USDA has classified more than 35 food deserts inside the Perimeter. More border I-285 in the suburbs of Cobb, South Fulton and east DeKalb counties.

Some experts say there is a direct correlation between food deserts and the state’s high rates of obesity and chronic diseases such as hypertension, diabetes and cancers. Stroke and heart disease are among the top three leading causes of death in Georgia, accounting for nearly one-third of all deaths in the state.

One day last January, the Sanders piled into their black Honda and headed to Kroger before the weekend rush. Ricky tuned the radio to 99.3 FM, his favorite country station.

Five minutes later they pulled into the parking lot and headed inside. Evie made a beeline to the restroom on the other side of the store while Ricky secured a shopping cart and waited near the store’s produce section.

He doesn’t make a move without her.

They are a team, and this day was no different.






Sources: AJC, YouTube

Ben Bernanke & Obama's $600B Bond Inflation "Stimulus" Monstrosity

The Fed’s Big Gamble: What Could Go Wrong

The Federal Reserve is about to take a huge risk in hopes of getting the economy steaming along again. Nobody is sure it will work, and it may actually do damage.

The Fed said Wednesday it is committing to buy $600 billion more in government bonds by the middle of next year in an attempt to breathe new life into a struggling U.S. economy.

Economists call it "quantitative easing." It gets the name "QE2" — like the ship — because this would be the second round. The Fed spent about $1.7 trillion from 2008 to earlier this year to take bonds off the hands of banks and stabilize them.

Here's how it's supposed to work this time: The Fed buys Treasury bonds from banks, providing them cash to lend to customers. Buying so many bonds also lowers interest rates because demand for Treasurys leads to higher prices and lower yields. Interest rates are linked to yields. Lower rates encourage people to borrow money for a mortgage or another loan.

At the same time, lower interest rates make relatively safe investments like bonds and cash less appealing, so companies and investors take the cash and buy equipment or other investments, like stocks. The S&P 500 takes off and Americans celebrate with a shopping spree. Businesses see a rise in sales and begin hiring again, and a virtuous cycle of more spending and more hiring ensues.

But many analysts and even supporters of the plan see dangers. It could make the weak dollar even weaker and lead to trade disputes with other countries. It could lead bond traders to believe that higher inflation is on the way, and they could derail the Fed's efforts by pushing rates higher. Many investors argue that it may create bubbles as hedge funds and other speculators borrow cheaply and make even bigger bets on stocks, commodities and markets in developing countries like Brazil.

"It's a desperate act," says Jeremy Grantham, co-founder of the investment firm GMO. Grantham says it's a clear message from the Fed to the rest of the world: "The U.S. doesn't care if the dollar weakens."

Here is a look at the ways the Fed's strategy could backfire:

Dollar drop

As word trickled out over recent months that the Fed was planning a new round of bond purchases, the dollar sank. It hit a 15-year low to the Japanese yen Nov. 1. Why? In the simplest terms, a country that cuts interest rates makes its currency less attractive to the worlds' investors. The interest rate is also the investors' yield, the payout they receive. When that yield falls, the world's banks move their money into countries with higher rates. They may exchange U.S. dollars for Australian dollars then invest the money in higher-paying Australian bonds.

"The Fed aims to push up the prices of stocks, bonds, real estate, and you name it," says Bill O'Donnell, head of U.S. government bond strategy at the Royal Bank of Scotland. "Everything is going to go up but the dollar."

A drop in the dollar can help companies like Ford that sell their products abroad. When the dollar weakens against the euro, for example, one euro buys more dollars than before. Foreign customers notice the price of the Explorer they've been eyeing is lower in their currency, yet Ford still pockets the same number of dollars for every sale.

The downside is that a weakened dollar pinches people in the U.S. because anything produced in other countries becomes more expensive, like oranges from Spain or toys from China.

"Look around you," says Thomas Atteberry, a fund manager at First Pacific Advisors. "How many things can you find that were made in the U.S.A?"


Blowing bubbles

Buying bundles of Treasurys knocks down interest rates, making borrowing cheap. But it also motivates investors to move out of safe investments into riskier ones in search of better returns. The stock market, for instance, rises in value and everyone with some of their savings in stocks feels wealthier. Ideally, it produces what what economists call a "wealth effect": People who feel better off spend more.

The problem, according to some critics, is that cheap borrowing costs and buoyant markets make a fertile environment for bubbles, which eventually pop. "The effort to help the economy sets up another more dangerous bubble," says Grantham, who warned of Japan's surging real estate and stock markets in the 1980s, soaring Internet stocks in the 1990s and the housing market in the 2000s.

Stocks in developing countries are a likely candidate for the next bubble. Cash from Europe and the U.S. has plowed into emerging markets, such as Brazil and Chile, since the financial crisis, largely because these countries have less debt and faster economic growth than in the developed world.

Another concern: Hedge funds borrowing cheap money can magnify their bets, taking a loan at 2 percent to buy a security that's rising 10 percent. They sell the security, pay off the bank and pocket the rest. That's true whenever interest rates remain low. Falling rates allow speculators to borrow larger amounts. In the extreme, losses from hedge funds and other borrowers can put their banks at risk and leave governments to clean up the mess.

The game only works as long as the investment keeps climbing. When the bubble breaks, the fallout can devastate an economy.

"I think bubbles are the main villain in this piece," Grantham says.

Cheap debt provided the fuel for the housing bubble, allowing home buyers to take out larger loans on the belief that somebody else would buy the house at a higher price. Fed chief Ben Bernanke's answer, Grantham said, is to start the cycle over again by blowing a new bubble. "All they can do is replace one bubble with another one," he said.






QE2: Fed Pulls The Trigger


In its latest move to jump start the sluggish recovery, the Federal Reserve announced it will pump billions into the economy.

The central bank will buy $600 billion in long-term Treasuries over the next eight months, the Fed said Wednesday. The Fed also announced it will reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments.

The bond purchases aimed at stimulating the economy -- a policy known as quantitative easing -- will total up to $900 billion and be completed by the end of the third quarter of 2011.

Ever since the Fed first signaled back in August that it was considering a second round of monetary stimulus, dubbed QE2, investors have been preoccupied with speculating on how much the Fed would buy.

Now the verdict is in, and is roughly in line with forecasts. Mainstream estimates had predicted a total between $500 billion and $1 trillion.

"It was all largely as expected," said Calvin Sullivan, chief strategy officer at Morgan Keegan. "The markets are responding as one would expect."

Stocks seesawed between gains and losses, as investors digested the news. The real surprise was in the bond market, where yields on the longer term 10-year and 30-year rose, after traders realized the Fed's plan called for 91% of its purchases at shorter maturities than expected.
Read the Fed statement

The Fed also reiterated its bearish view on the stalling economy, saying "the pace of recovery in output and employment continues to be slow."

Amid sluggish consumer spending, businesses have been reluctant to hire and the economy has grown at a snail's pace. At the same time, inflation is dangerously low, causing some economists to warn that the United States may even be flirting with deflation -- a debilitating drop-off in prices and demand.

The Fed has already kept the federal funds rate, a benchmark for interest rates on a variety of consumer and business loans, at historic lows near zero since December 2008. The Fed said Wednesday that it would continue to hold the rate at "exceptionally low levels" for an "extended period."

The federal funds rate is the central bank's key tool to spur the economy and a low rate is thought to encourage spending by making it cheaper to borrow money.

When already low rates failed to get consumers and businesses to spend, the Fed decided to resort to the more unconventional tool of quantitative easing, to lower interest rates even further.

But critics of QE2, including some Fed members, believe that too much monetary stimulus might lead to runaway inflation that could derail the economy, or future asset bubbles that could endanger economic stability over the long term.

The most outspoken voting member of the Fed, Kansas City Fed President Thomas Hoenig, was once again the lone dissent among policymakers, saying he believed the risks of additional securities purchases outweighed the benefits.

Other opponents have argued that it simply won't work. The Fed already made nearly $2 trillion in similar purchases during the Great Recession, and current low interest rates have not jolted spending, they say.

"I don't think this is going to make any difference at all," said Paul Ashworth, senior U.S. economist with Capitol Economics, who feels the plan is too small. "This is a slippery slope. Once you're on it, it's very hard to get off."

He predicts a repeat of what happened with the first round of quantitative easing two years ago. The Fed initially announced a $600 billion program in November 2008, but then four months later, increased that to $1.8 trillion, when it wasn't enough.


Sources: CNBC, CNN, MSNBC

Reciprocity Foundation Helps Homeless & Gay Youth: The Next Generation

The Reciprocity Foundation


Each year, up to 2.8 million youth experience homelessness—a group roughly equivalent to 1% of the U.S. population. The causes of homelessness are numerous and range from being orphaned, fleeing chronic abuse or simply escaping economic problems. Some youth are called “throw-aways” because their parents and guardians force them out of the home because of sexual orientation or beliefs.

Taz Tagore and Adam Bucko founded the Reciprocity Foundation to enable homeless and high-risk youth and young adults to permanently exit the social services system and start meaningful, sustainable careers in the Creativity Economy (e.g. fashion, design, marketing, PR). The Reciprocity Foundation aims to build a national network of programs to enable homeless youth to enroll in college, secure hands-on work experiences and build a professional network in their field of interest. Currently, their work is focused on the thousands of homeless youth in New York City; in the future, the Reciprocity Foundation plans to expand into cities such Los Angeles, Boston, San Francisco, Seattle and Austin.



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Sources: CBS News, Reciprocity Foundation.org, Youtube, Google Maps

Goldman's E-mails Reveal Profits Soared As Housing Bubble Burst

Goldman E-Mails Cited Serious Profit on Mortgages


In late 2007, as the mortgage crisis gained momentum and many banks were suffering losses, Goldman Sachs executives traded e-mail messages saying that they would make “some serious money” betting against the housing markets, The New York Times’s Louise Story and Sewell Chan report.

The messages, released Saturday by the Senate Permanent Subcommittee on Investigations, appear to contradict statements by Goldman that left the impression that the firm lost money on mortgage-related investments.

In the messages, Lloyd C. Blankfein, the bank’s chief executive, acknowledged in November 2007 that the firm had lost money initially. But it later recovered by making negative bets, known as short positions, to profit as housing prices plummeted. “Of course we didn’t dodge the mortgage mess,” he wrote. “We lost money, then made more than we lost because of shorts.”

He added, “It’s not over, so who knows how it will turn out ultimately.”

In another message, dated July 25, 2007, David A. Viniar, Goldman’s chief financial officer, reacted to figures that said the company had made a $51 million profit from bets that housing securities would drop in value. “Tells you what might be happening to people who don’t have the big short,” he wrote to Gary D. Cohn, now Goldman’s president.

Actions taken by Wall Street firms during the housing collapse have become a major factor in the contentious debate over financial reform. In his weekly radio address on Saturday, President Obama said Wall Street had “hurt just about every sector of our economy” and again pressed the case for tighter regulation. On Monday, Senate Democrats will try to prevent a Republican filibuster in the first major test of the administration’s effort to push through legislation.

Goldman on Saturday denied that it made a significant profit on mortgage-related products in 2007 and 2008. It said the subcommittee had “cherry-picked” e-mail messages from the nearly 20 million pages of documents it provided. This sets up a showdown between the Senate subcommittee and Goldman, which has aggressively defended itself since the Securities and Exchange Commission filed a security fraud complaint against it nine days ago. On Tuesday, seven current and former Goldman employees, including Mr. Blankfein, are expected to testify at a Congressional hearing.

Carl Levin, Democrat of Michigan and head of the Permanent Subcommittee on Investigations, said that the e-mail messages contrasted with Goldman’s public statements about its trading results. “The 2009 Goldman Sachs annual report stated that the firm ‘did not generate enormous net revenues by betting against residential related products,’ ” Senator Levin said in a statement Saturday. “These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market.”

The messages appear to connect some of the dots at a crucial moment of Goldman history. They show that in 2007, as most other banks hemorrhaged money from plummeting mortgage holdings, Goldman prospered.

At first, Goldman openly discussed its prescience in calling the housing downfall. In the third quarter of 2007, the investment bank reported publicly that it had made big profits on its negative bet on mortgages.

But by the end of 2007, the firm curtailed disclosures about its mortgage trading results. Its chief financial officer told analysts that they should not expect Goldman to reveal whether it was long or short on the housing market. By late 2008, Goldman was emphasizing its losses, rather than its profits, pointing regularly to write-downs of $1.7 billion on mortgage assets in 2008 and not disclosing the amount it made on its negative bets.

Goldman and other firms often take positions on both sides of an investment. Some are long, which are bets that the investment will do well, and some are shorts, which are bets the investment will do poorly.

Goldman has said it added shorts to balance its mortgage book, not to make a directional bet on a market collapse. But the messages released by the subcommittee Saturday appear to show that in 2007, at least, Goldman’s short bets were eclipsing the losses on its long positions.

In May 2007, for instance, Goldman workers e-mailed one another about losses on a bundle of mortgages issued by Long Beach Mortgage Securities. Though the firm lost money on those, a worker wrote, there was “good news”: “we own 10 mm in protection.” That meant Goldman had enough of a bet against the bond that, over all, it profited by $5 million.

On Oct. 11, 2007, one Goldman manager in the trading unit wrote to another, “Sounds like we will make some serious money,” and received the response, “Yes we are well positioned.”



Documents released by the Senate subcommittee appear to indicate that in July 2007, Goldman’s accounting showed losses of $322 million on positive mortgage positions, but its negative bet — what Mr. Viniar called “the big short” — brought in $373 million.

As recently as a week ago, a Goldman spokesman emphasized that the firm had tried only to hedge its mortgage holdings in 2007.

The firm said in its annual report this month that it did not know back then where housing was headed, a sentiment expressed by Mr. Blankfein the last time he appeared before Congress.

“We did not know at any minute what would happen next, even though there was a lot of writing,” he told the Financial Crisis Inquiry Commission in January.

It is not known how much money in total Goldman made on its negative housing bets. Neither Goldman nor the panel issued information about Goldman’s mortgage earnings in 2009

In its response on Saturday, Goldman Sachs released an assortment of internal e-mail messages. They showed workers disagreeing at some junctures over the direction of the mortgage market. In 2008, Goldman was stung by some losses on higher-quality mortgage bonds it held, when the crisis expanded from losses on risky bonds with subprime loans to losses in mortgages that were given to people with better credit histories.

Still, in late 2006, there are messages that show Goldman executives discussing ways to get rid of the firm’s positive mortgage positions by selling them to clients. In one message, Goldman’s chief financial officer, Mr. Viniar, wrote, “Let’s be aggressive distributing things.”

Goldman also released detailed financial statements for its mortgage trading unit. Those statements showed that a group of traders in what was known as the structured products group made a profit of $3.69 billion as of Oct. 26, 2007, which more than covered losses in other parts of Goldman’s mortgage unit.

Several traders from that group will testify on Tuesday, and their profitable short positions are likely to be of interest to the Senate committee. The Abacus deal that is involved in the S.E.C. complaint and others like it were created within that group.

The messages released by Goldman included many written by Fabrice Tourre, the executive who is the only Goldman employee named in the S.E.C. complaint. They reveal his skepticism about the direction of the subprime mortgage market in 2007. In a March 7 message to his girlfriend, he wrote, “According to Sparks, that business is totally dead, and the poor little subprime borrowers will not last so long.” He was referring to Dan Sparks, then the head of Goldman’s mortgage trading unit.

The Senate subcommittee began its investigation in November 2008, but its work attracted little attention until a series of hearings in the last month.

The Senate announced that it would convene a hearing on Goldman Sachs within a week of the S.E.C.’s fraud suit. Some members of Congress questioned whether the two investigations had been coordinated.

Mr. Levin’s staff said there was no connection between the two investigations. The subcommittee issued subpoenas to Goldman on June 30 of last year and again on March 12, and informed Goldman about who would be called as witnesses on April 5. The S.E.C. has said there was no political motivation in the timing of its complaint.

Among the lawyers Goldman has hired to deal with the Senate inquiry are Michael D. Bopp, a partner at Gibson, Dunn & Crutcher, and K. Lee Blalack II, a partner at O’Melveny & Myers.

Mr. Bopp and Mr. Blalack are based in Washington and both once worked as lawyers for the Permanent Subcommittee on Investigations. Mr. Blalack was the subcommittee’s chief counsel and staff director.


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Sources: CBS News, C-Span, Huffington Post, MSNBC, NY Times, Washington Post, Youtube, Google Maps

Goldman Prepares Its Defense To Market Timing & Subprime Risk Charges

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Goldman Readies Reply To Claims It Misled Clients

Goldman Sachs is preparing its most detailed defense yet to allegations that it misled clients in its mortgage securities business, arguing that the firm was unsure whether housing prices would rise or fall and did not take any action at odds with the interests of its clients.

An internal Goldman document, prepared for senior executives and obtained by The Washington Post, addresses the criticism that the bank invested its own money betting against the housing market while simultaneously urging clients to invest in securities that would increase in value only if the housing market did.

Those concerns over possible double-dealing spiked a week ago as the Securities and Exchange Commission filed a fraud suit against Goldman, alleging that it misled clients by selling them mortgage-related securities secretly designed to fail.

Goldman prepared the 11-page document to serve as the basis for testimony that chief executive Lloyd Blankfein is scheduled to deliver Tuesday before the Senate Permanent Subcommittee on Investigations.

The Goldman paper describes debates among top executives in 2006 and 2007 over whether the firm should make investment decisions based on the belief that the mortgage market would continue to prosper. The document details meetings and e-mails that ultimately resulted in a decision to reduce the company's exposure to the mortgage market, especially subprime loans, by making new investments that would pay off if housing prices fell.

Subprime Risk

Over the past few years, other financial firms and some in the media have complained that Goldman recognized the risks of the subprime mortgage market early on and, without telling clients, developed financial products that would allow the bank to bet against mortgages with its own money. At the same time, Goldman continued to sell mortgage-related investments to clients who expected the subprime loan business to remain vibrant, critics have alleged.

While the firm moved to significantly reduce its losses when the housing market cratered, the impression conveyed by the document is that Goldman was confused, like many other financial firms, over how bad the collapse would be and suffered losses as a result.

The document also reprises Goldman's frequent explanation that it was not investing its own money in financial transactions to make a trading profit but to help investors who wanted to do a deal and could not easily find someone else to trade with. That role, commonly played by investment banks, is known as being a market maker.

A spokesman for the Senate subcommittee declined Friday evening to comment on Goldman's defense.

"Our investigation has found that investment banks such as Goldman Sachs were not market makers helping clients," Sen. Carl M. Levin (D-Mich.), who heads the panel, said Friday. "They were self-interested promoters of risky and complicated financial schemes that were a major part of the 2008 crisis."

In the paper, Goldman argues that it was a relatively small player in the mortgage market, bringing in only $500 million from its residential mortgage business in 2007, less than 1 percent of the firm's overall revenues.

Still, the bank's mortgage investments were large enough that executives began to worry in 2006 that it was betting too heavily on the health of the housing market.

According to the document, the concerns arose in late 2006, when Dan Sparks, the head of the mortgage unit, wrote to top executives that the "subprime market [was] getting hit hard," with the firm losing $20 million in one day.

On Dec. 14, 2006, financial officer David Viniar called Goldman's mortgage traders and risk managers into a meeting to discuss investing strategy. They concluded that they would reduce the firm's overall exposure to the subprime mortgage market.

But the prevailing view of executives, as described in the paper, was not that the housing market was headed into a prolonged decline. They were not looking to short the market overall. That would have entailed making such large bets against mortgage securities that the firm would turn a profit if the market as a whole collapsed, which in fact it did.

The document acknowledges that Goldman at times shorted the overall market but describes those periods as temporary while the firm was rebalancing its portfolio to limit losses if mortgage securities were to lose more value.

At some moments, executives were actually considering making new bets, buying potentially undervalued securities that could pay off when the mortgage market turned around. A day after Viniar met with traders and risk managers, he wrote to Tom Montan, co-head of the securities division, saying, "There will be very good opportunities as the markets goes into what is likely to be even greater distress and we want to be in position to take advantage of them."

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Market Timing

The back-and-forth over which way the market would go, and how to invest in it, continued into 2007.

On March 14, Goldman co-president Jon Winkelried e-mailed Sparks and others asking what the bank was doing to protect itself from a decline in prices of not just subprime loans but also of other loans traditionally considered less risky. Sparks replied that the firm was trying to have "smaller" exposure to those loans also.

But managing director Richard Ruzika took issue with that answer a few days later, saying that Goldman might be overestimating the decline in housing. "It does feel to me like the market in general underestimated how bad it could get. And now could be overestimating where we are heading," he wrote in an e-mail. "While undoubtedly there will be some continued spillover, I'm not so convinced this is a total death spiral. In fact, we may have terrific opportunities."

Sparks later endorsed that optimistic view, suggesting as late as August 2007 that Goldman begin buying more mortgage securities.

The bank did not immediately follow that path, and by Nov. 30, 2007, Goldman had largely canceled out its exposure to subprime mortgages by increasing its bets that the market would continue to slide, according to the document.

But by that account, Goldman also continued to have $13.5 billion in exposure to safer, prime mortgages. That cost the bank. In 2008, the firm lost $1.7 billion on investments in residential mortgages.


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Sources: CNBC, MSNBC, Washington Post, Google Maps

Geithner's Failure! Banks Returning To Toxic Assets

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No Good Deed Goes Unpunished As Banks Seek Profits


To understand the meaning of no good deed goes unpunished, Treasury Secretary Timothy F. Geithner can look no further than Wall Street where the banks that received the biggest taxpayer bailouts are seeking to reap trading profits from securities rescued by the government.

Only months after it was started, the U.S. program designed to purge debts of no immediate discernible value from the balance sheets of troubled banks has helped transform the frozen debt into a money-maker as the bonds have rallied. Bank of America Corp. and Citigroup Inc., who received 22 percent of the $418.7 billion American taxpayers loaned to troubled financial institutions, boosted holdings on their trading books of home- loan bonds that lack government guarantees while investors were raising cash for the program, according to Federal Reserve data.

Charlotte, North Carolina-based Bank of America along with Citigroup, Morgan Stanley and Goldman Sachs Group Inc., all based in New York, added a combined $3.36 billion of the debt, for which there were few buyers as recently as March, to their short-term trading assets during the third quarter, up 16 percent from the second quarter, the most-recent data show.

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Prices of these securities may slump again, leaving the banks exposed to potential losses that the Treasury Department’s rescue plan was designed to mitigate, said Joshua Rosner, a managing director at New York-based Graham Fisher & Co., which advises regulators and institutional investors.

Speculative Trade

“It’s a trade that will likely work out, but it’s still a speculative trade, which is not what a taxpayer should want from firms that have only recently come out of critical care,” Rosner said.

The Public-Private Investment Program was introduced in March by Geithner as a means of helping struggling banks by reviving the market for unpackaged loans and mortgage securities that aren’t backed by government-supported institutions, such as Fannie Mae or Freddie Mac. Under the program, asset managers were supposed to raise money from investors and, with additional capital and loans from taxpayers, buy as much as $1 trillion in toxic assets from U.S. banks, freeing up money for lending.

It’s “absolutely ridiculous” that banks, which were expected to reduce their holding of such volatile mortgage securities, bought them before the government program was running and may now profit, said Michael Schlachter, managing director of Wilshire Associates, the Santa Monica, California- based investment-consulting firm. “Some of them created this mess, and they are making a killing undoing it.”

Scaling Back

Officials for Bank of America, Citigroup, Goldman Sachs and Morgan Stanley declined to comment on the Fed data, as did Treasury spokeswoman Meg Reilly.

Geithner, 48, scaled back PPIP as the Fed declined to provide additional financing and banks balked at selling non- agency mortgages at a loss. It wasn’t until July that the Treasury chose New York-based BlackRock Inc., Invesco Ltd. in Atlanta and seven other firms to start PPIP funds.

To date, funds participating in the program have raised about $6 billion of equity capital from private investors, which the government has matched. The Treasury also provided $12 billion of debt capital, bringing the funds’ purchasing power to $24 billion. Neither the Treasury nor the funds have disclosed how much and what debt has been bought.

Prices for some of the securities that the funds were supposed to buy have almost doubled since March. The rally was fueled in part by traders jumping in before PPIP funds could get off the ground, said Steve Kuhn, who helps oversee about $440 million of mortgage-bond investments for Pine River Capital Management LLC in Minnetonka, Minnesota.

Market Rally

“Anytime people know there’s a buyer coming, they position for that, and that’s clearly what happened here,” said Kuhn, who is co-manager of the Nisswa Fixed Income Fund.

The rally was boosted further by investors seeking riskier fixed-income assets to offset record low yields on Treasuries and by the stabilization of the housing market, he said.

Typical prices for the most-senior bonds backed by hybrid Alt-A mortgages stood at about 58 cents on the dollar by mid- December, up from lows of around 35 cents in mid-March, according to Barclays Capital data.

Prices rose as high as 60 cents on the dollar in November. Fixed-rate prime jumbo mortgage securities were at 84 cents, up from 63 cents in March.

Before the credit crisis, senior non-agency home-loan securities didn’t typically trade below 95 cents on the dollar, JPMorgan Chase & Co. data show.

Alt-A loans fall between prime and subprime in terms of projected defaults. Jumbo mortgages are larger than government- supported Fannie Mae and Freddie Mac are allowed to finance.

Non-Agency Debt

The Fed data on bank holdings of mortgage securities don’t distinguish between changes in value from buying or selling and those that result from rising or falling market prices. The higher values at Citigroup and Bank of America reflect in part purchases of non-agency debt, according to people familiar with each bank’s positions.

The value of non-agency debt designated by the four banks as held to maturity or available for sale fell a combined $2.9 billion to $70.8 billion in the third quarter from the previous three months. Under accounting rules, securities in these categories are usually held for longer than those designated as trading investments, helping to avoid writedowns. Debt available for sale can be sold more easily at a later stage than notes held to maturity.

Bank of America’s Wager

Bank of America, the largest U.S. bank by assets and deposits, added the most non-agency debt on its trading book in the third quarter, with an increase of $1.56 billion, or 73 percent, according to a Dec. 22 revision by the Fed of the company’s second-quarter data. The value of securities designated held-to-maturity or available-for-sale fell, by 1.7 percent to $37.3 billion.

The Charlotte, North Carolina-based firm, now led by Chief Executive Officer Brian Moynihan, reported $80 billion in writedowns and losses from the credit crisis, much of it related to defaulted home loans and bonds backed by them. The lender received $45 billion in federal bailout funds in October 2008 under the Treasury’s Troubled Asset Relief Program, which it repaid Dec. 9. The U.S. still holds warrants in the bank.

Without new purchases, bank holdings tracked by the Fed usually decline as the underlying loans are refinanced or default. That shrank the overall market by 5 percent in the third quarter and by 30 percent since its peak in mid-2007, separate Fed data show.

Citigroup’s holdings of non-agency residential mortgage bonds designated for trading rose by $421 million to $13.5 billion in the third quarter, the Fed data show. Other holdings fell $2.3 billion, or 6.9 percent, to $33 billion.

$117.8 Billion Loss

The New York-based bank was among the largest and earliest losers on toxic home-loan securities and has posted $117.8 billion of writedowns and credit losses. The U.S. injected $45 billion of taxpayer capital into the company and extended guarantees for $301 billion of its assets, including mortgage debt. Citigroup, led by CEO Vikram Pandit, agreed last month to pay back $20 billion and cancel the insurance. The U.S. owns 27 percent of the bank’s common shares.

At Goldman Sachs, CEO Lloyd Blankfein increased non-agency home mortgage bonds designated for trading by $593 million in the third quarter, to $2.71 billion, and Morgan Stanley’s jumped $785 million to $4.25 billion, the Fed data show. Goldman Sachs’s other holdings climbed $76 million to $449 million. Morgan Stanley, now overseen by CEO James Gorman, classified all its holdings as trading assets, according to the Fed data.

Free Money

Of the seven biggest owners of residential mortgage-backed securities, only San Francisco-based Wells Fargo & Co. reduced holdings of the debt on its trading book, by $130 million to $44 million. JPMorgan added $49 million to the trading book, while cutting its other holdings of the securities by $1.47 billion to $12.7 billion, according to the Fed data.

Eric Petroff, director of research at Wurts & Associates, a Seattle-based firm that advises institutions on $30 billion in investments, said it’s no surprise that banks added to their holdings following the unveiling of PPIP.

“Any time the government says, ‘We’re going to buy something in the securities market,’ they’re putting out a sign that says, ‘Free money, come and get it’,” he said.

The renewed interest by banks in holding the bonds has helped restore liquidity, said Scott Buchta, head of investment strategy at Guggenheim Securities LLC in Chicago. Higher prices have also eroded potential profits of PPIP funds and increased the risk of losses, making it harder for asset managers participating in the program to attract investors, he said.

Returns Shrink

Four of the nine PPIP managers missed the original Sept. 30 deadline for raising the minimum $500 million by more than a month. One manager, Marathon Asset Management, was allowed to make its initial closing after raising $400 million.

“If you were looking at returns in the high teens to low twenties in PPIP, now you’re looking at the low-to-mid teens,” said Joel Paula, senior analyst at Cambridge, Massachusetts- based NEPC LLC, which advised Connecticut’s state pension board on its decision to invest $200 million with three PPIP managers.

Higher prices are also slowing the pace at which PPIP managers can and want to buy, because they must be more careful when examining securities and their underlying collateral, NEPC’s Paula said.

“If you do your homework, you can still find value, but you’re not getting 20 percent for doing nothing anymore,” Paula said in an interview.

Locked In

While fundraising and investing is moving slowly, time could ultimately play to the PPIP investor’s advantage, said Alan Papier, of consulting firm Mercer, a unit of New York-based Marsh & McLennan Cos. Under PPIP’s terms, investors are locked in for eight years and managers have up to two years from their initial closings to invest the money, giving them time to wait for prices to drop.

“Managers are trying to figure out whether the rally in residential mortgage-backed securities is sustainable, or if there will be some sort of pullback,” Papier said.

Bill Eigen, manager of the $5.4 billion JPMorgan Strategic Income Opportunities Fund, said he bought residential mortgage- backed securities in the spring. Since then, he has sold and begun shorting both residential and commercial mortgage-backed securities, anticipating that their price would fall.

“This stuff was supposed to trade on fundamentals and will again trade on fundamentals,” he said in an interview. “PPIP is not going to fill up buildings.”



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Sources: Bloomberg News, MSNBC, CNBC, Google Maps

Charlotte Politicians Approve Risky Stock Investing During Recession...Public Corruption

Charlotte City Council approves bonuses to City Manager, City Attorney and Investing In Stock Market


The Charlotte City Council voted Monday night to give City Attorney Mac McCarley a $15,000 bonus - a controversial decision that comes in a year when city employees aren't receiving bonuses.

Council members a week ago gave City Manager Curt Walton a $16,000 bonus, the same amount he received a year ago. Walton had earlier this year stopped all raises and merit-based bonuses for city employees due to the recession. The council voted 7-5 to give McCarley his bonus. Democrat Michael Barnes and Republican Mayor Pat McCrory were the only "no" votes against Walton's bonus, and they voted against McCarley's as well.

They were joined Monday by Democrats Warren Turner, James Mitchell and Mayor-elect Anthony Foxx. Turner had missed last week's vote on Walton's bonus.

Republican Warren Cooksey voted for both bonuses, and said Monday night he supported them because they were for work done in fiscal year 2008-09, which ended June 30. Walton has cut raises for employees receiving evaluations after July of this year.

When asked if he will accept his bonus, McCarley said "of course." When asked if he won't accept a bonus next year, he said he wouldn't speculate. Walton also said last week in an e-mail that he would not speculate on whether he will accept a bonus for 2009-10.

McCrory, in his last meeting as mayor, said McCarley did "outstanding" work for the city in the last year. But he said he couldn't support the bonus due to the economy.

McCarley's base salary will remain at $175,781. Walton's base salary of $200,312 is the same as he received a year ago. The city manager and the city attorney are the two city salaries set by council.

In other action, council members voted 7-4 to approve spending $630,000 on a smart traffic-control system for Pineville-Matthews Road that's designed to ensure traffic flows on the busy highway.

The item didn't appear to be controversial, but it touched off a heated debate over District 7 member Cooksey's opposition.

Cooksey, a Republican, said he was voting against the item because it's being paid for with federal stimulus dollars. He said he believes it's wrong to pay for these and other projects with money that will place the nation deeper into debt.

Cooksey's statement prompted Mayor Pro Tem Susan Burgess, a Democrat, to question why the rest of the council should support the item, because N.C. 51 is almost entirely in Cooksey's south Charlotte district.

Democrat Michael Barnes continued that line of thought: "If a district rep doesn't believe it's in his best interest to support it, why should the rest of the city?"

Republican John Lassiter, at his last meeting, accused Burgess and Barnes of potentially acting "vindictively" to punish residents near the highway, which Lassiter said he drives frequently. He described it as a "personal assault."

Cooksey said he believes that council districts are to ensure geographic diversity, and that his vote isn't only for his 100,000 residents.

Cooksey wasn't put in the position of voting for the project or losing it. Barnes and Democrats Warren Turner and James Mitchell also voted against it, but it passed with seven votes.

Council members approved its federal lobbying agenda, which included a stance against collective bargaining for police and firefighters.

A bill being considered in Congress would allow for collective bargaining for public safety officials in all states, including those that forbid it, such as North Carolina.

McCrory pushed his colleagues to come out against collective bargaining, saying it would increase costs to taxpayers.

Council members also voted 10-1 to authorize Walton to begin making long-term investments in the stock market with up to $150 million - up to 10 percent of the city's investments.

The N.C. General Assembly in 2007 gave Charlotte and other large N.C. cities and counties the right to invest in the market, with the hope of getting higher returns than safer investments such as bonds.

The city has said it would invest $35 million initially and then $8 million a month.

Barnes voted against the investments.

"This is our entry into the stock market," Barnes said. "I don't believe we need to do that."





Audit: Court invested Bronx estate cash illegally


Bronx court officials broke the law by investing $21 million in risky securities with money from the estates of dead people, a new audit charges.

City Controller William Thompson charged the public administrator's office in Bronx Surrogate's Court violated state law three years ago, when it placed 30% ofthe cash it was holding for heirs with a brokerage firm to buy exotic securities said to be "safe as cash."

The investments turned sour and were worth nothing for much of last year. That temporarily put taxpayers on the hook for paying the heirs their due.

The risky investment was outlined in aJuly Daily News report. Thompson's audit confirmed The News' findings and said the investment decision reflected overall sloppy management that plagued the office.

Public administrators in each borough manage millions of dollars from estates of people who die without wills. Thompson found "a severe lack of management" in the Bronx.

His auditors discovered the Bronx public administrator was late, inaccurate and inconsistent in how the 1,071 estates were managed in 2006.

Contractors hired to clean out apartments of the deceased videotaped their activities - but pointed the camera away from where people were emptying drawers and taking inventory. Furniture, jewelry and other goods were appraised in clumps and sold to buyers who gave verbal, not written or sealed, bids.

"I hope that this report provides the Bronx public administrator with a reference point of how not to operate in the future," Thompson said. "These recommendations will go a long way to helping the office improve its functionality."

Meanwhile, politically connected lawyers like Michael Lippman, then the administrator's general counsel, earned $2.1 million in fees on the auction-rate securities deals made through a broker.

Statewide guidelines say estate funds should be placed in FDIC-insured bank accounts or invested in low-risk U.S. Treasury certificates.

Bronx officials argued privately that there was nothing improper about the investments, but auditors referred the case to the city Department of Investigation because no other public administrators had strayed from the guidelines.

One investigator said there was concern that the investments were just a vehicle to generate fees for friends.

"Why would the public administrator make these investments in the first place?" the investigator asked. "What's in it for them?"




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Sources: McClatchy Newspapers, Charlotte Observer, Chattahbox, NY Daily News, Google Maps

H1N1 Flu Vaccine Went To Wall Street First...Voters Want To Know Why

Wall Street gets H1N1 Flu vaccine first before high risk citizens and children. Now Voters want to know why.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Chris Dodd rips bankers bogarting H1N1 shots


A senior Senate Democrat is demanding answers from federal officials on why they sent swine-flu vaccines to bankers at Goldman Sachs, rather than to the schoolchildren who really need them.

“It is hard to believe that at a time when even the most vulnerable in our society are unable to obtain H1N1 vaccinations, the government is sending doses to private firms on Wall Street,” Sen. Chris Dodd (D-Conn.) said in a statement. “People are frustrated by the government’s response to this crisis, and with news like this, who can blame them? “

“Vaccines should go to people who need them most, not people who happen to work on Wall Street,” said Dodd, who’s also readying financial reform legislation that Wall Street won’t like.

Dodd sent a letter to Secretary of Health and Human Services Kathleen Sebelius, demanding she review her policies to make sure that “healthy stockbrokers” aren’t getting the H1N1 vaccine doses meant for “pregnant women and school children.” He also told Wall Street firms to immediately send back their stash.

“Schools in my state have closed; hospitals and health clinics report widespread shortages. It is shocking to think that private firms would be prioritized ahead of hospitals when the vaccine supply cannot meet the demand,” Dodd said in the letter.

News reports of that large, private employers in New York City – including Wall Street banks – and been sent of the scarce H1N1 vaccines set of a feeding frenzy Thursday. The Service Employees Union International jumped into the fray early, issuing a public call for the Wall Street fat cats to donate their doses to public hospitals.

“It’s bad enough that Wall Street crashed our economy and is back to paying out platinum bonuses after taking trillions in taxpayer-funded bailouts and backstops. But purposely endangering the health of millions of Americans during a public health crisis crosses all lines of decency,” the union’s secretary-treasurer Anna Burger said in a statement.





Flu shots for Wall Street stirs ire in New York

New York City health officials scrambled to explain themselves on Thursday in the wake of media reports about bankers who got scarce H1N1 flu vaccines through their employers.

Members of Congress fired off letters demanding immediate explanations and the U.S. Centers for Disease Control and Prevention reminded state and city health officers of the need to make sure the most vulnerable people get shots first.

"I am concerned that the distribution of the vaccine is resulting in favored treatment for the privileged," New Jersey Democratic Representative Frank Pallone said.

A shortage of H1N1 vaccines has frayed nerves, and public health departments across the country say they will not be able to meet the bulk of the demand until December or January.

The CDC estimates swine flu has infected more than five million people and it is documented as having killed 1,000.

The federal government, which is buying the vaccines and distributing them for free to 62 state and city health departments, says 35.6 million doses have been made and packaged since production began.

Connecticut Sen. Chris Dodd, a Democrat, released a letter to Health and Human Services Secretary Kathleen Sebelius saying he was "stunned" at the reports.

"I implore you to use whatever authorities you have to ensure that H1N1 vaccines already distributed but not yet used are promptly redirected to hospitals, schools, community health clinics, school-based health clinics, and pediatricians so that they can be made immediately available to at-risk members of the public as identified by the Department," Dodd wrote.

CDC Director Dr. Thomas Frieden sent out a reminder to state and city health departments that distribute vaccine.

"I ask each of you to review your plans immediately and work to ensure that the maximum number of doses is delivered to those at greatest risk as rapidly as possible," he wrote.

"I especially appreciate the many innovative ways you've found to reach them, including school-located vaccine clinics, special clinics for pregnant women, outreach to children with special needs, and making vaccine available to community- and faith-based organizations serving these high-risk populations."

Close to 160 million people are in the priority groups to get vaccine first -- healthcare workers, pregnant women, children and adults under 65 with medical conditions, caregivers for infants too young to be vaccinated and people 24 and younger.

"When H1N1 vaccine first became available in the fall, we directed all available doses to pediatricians, OB-GYNs, community health centers, public and private hospitals," New York City health department spokeswoman Jessica Scaperotti said in a telephone interview.

"As more vaccine became available we started to place small orders to providers that serve adults, including employee health centers."

She said the city had given 800,000 doses to about 1,100 providers, with Lenox Hill Hospital, for example, getting 1,200 doses and banking firm Goldman Sachs getting 200 of the 5,300 doses it asked for, Scaperotti said.

She said 16 of the city's 25 biggest employers had vaccine, including Columbia University, Citi Group and others, as well as the Federal Reserve Bank, which is not among the top 25 employers.

Morgan Stanley said it received 500 doses of the vaccine for its New York City locations and 500 doses for its Westchester location in suburban New York.

"We never thought we would receive doses ahead of area hospitals and once this was brought to our attention, we promptly donated the doses we received to a few area hospitals," including Morgan Stanley Children's Hospital in New York, a company spokeswoman said.



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Sources: Politico, MSNBC, Huffington Post, Bizaim, Forcechange, Google Maps