There was another tick-up in home prices in July, a further indication that housing markets may be stabilizing, according to a report issued Tuesday.
Prices for the S&P Case-Shiller Home Price index of 20 cities rose 1.6% from a month earlier, the third consecutive month of gains. They went up 1.4% in June.
Prices were still down 13.3% compared with July 2008, but even that performance was better than expected. A panel of industry experts surveyed by Briefing.com had forecast a 14.2% loss.
"The rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets" said David Blitzer, chairman of the Index Committee at Standard & Poor’s.
Craig Thomas, a senior economist with PNC Financial Services Group, called the report very encouraging.
"The rule of thumb is that three observations is a trend," he said. "There have been three straight good reports, so, this is a trend."
The home-price gains also confirmed other positive recent housing reports such as lower inventories and more traffic being reported by home builders, according to Thomas. Trends in other economic indicators, such as job losses and retail sales have also improved lately.
A pattern is developing, according to Lawrence Yun, chief economist for the National Association of Realtors (NAR), one in which stabilizing prices could contribute to a self-sustaining recovery.
"When prices are falling, consumers ask themselves, ‘Why buy now when I can buy later for less,’" he said, adding that rising prices are a strong incentive to act more quickly.
Minneapolis’ gain: Among the 20 cities, Minneapolis recorded the biggest gain during July; with prices up 4.6%. San Francisco, up 3.3%, and Chicago, 2.7% higher, also recorded sizable gains.
The only price declines occurred in Las Vegas, where they fell 1.1%, and Seattle, down 0.1%.
Las Vegas has become the city hardest hit by foreclosures, which remain one of the big issues facing housing markets.
Yun points out that there will be another foreclosure spike over the next six to 12 months as the terms of option ARMs and interest-only mortgages reset, raising monthly payments for many borrowers and pushing some into delinquency. Foreclosed homes will continue to come back onto the market, padding supplies and dampening prices.
The other major uncertainty is over the first time homebuyers’ tax credit that currently gives back up to $8,000 to taxpayers who buy before Dec. 1 and who have not owned a home within the past three years.
Yun credits the tax credit with being a major market stimulus. NAR estimated that an extra 350,000 homes will be sold because of it. There are bills in Congress that would extend the program and even expand it to every home buyer. If none of these are enacted, the market could suffer a reversal.
There will be a clear-cut market recovery because of buyer interest tied to that stimulus, according to Yun, and if the tax credit is allowed to lapse, we could be looking at another bottom coming our way.
The Case-Shiller index compares the sale price of a home to its price the last time it was sold, then factors in changes in prices over time.
That, ideally, yields a more accurate picture of home price fluctuations than simply calculating the median or average prices of all homes sold during the month. Those averages can be skewed by changes in the mix of homes sold during any one period.
Sometimes you need a little starter cash to get things going.
Mariam Noland, president of the Community Foundation for Southeast Michigan, took that idea to a whole new level.
Nolan and her organization raised $100 million for Detroit’s New Economy Initiative, which aims to diversify the area’s businesses away from the automobile industry.
The money doesn’t just stop with the New Economy Initiative. The community foundation uses big sums of money from foundations, donors and a healthy endowment to fund a variety of public initiatives around the Detroit area. This year they’ll give out over $40 million.
"Anything can get done," said Noland, who started her career in college admissions offices before getting a mid-level position at a sister community foundation in Cleveland over 25 years ago. "My job is to figure out who can do it, and where to get the money."
The New Economy Initiative is striving to diversify the area’s current auto-reliant business mix to one that incorporates information technology, biotech, advanced manufacturing, renewable energy, and a host of other emerging industries.
New Economy was also a major sponsor behind a recent entrepreneur training workshop in Detroit, helping Detroiters put themselves to work.
The Community Foundation for South East Michigan is part of a national network of community foundations that all work on community development.
Other recent initiatives undertaken by Detroit’s community foundation include an effort to convert some of the city’s vast tracts of vacant land to greenways. There’s now over 100 miles of greenway trails snaking around southeast Michigan.
The foundation has also worked on programs addressing childhood obesity and helped local arts organizations build long-lasting fundraising programs in what is undoubtedly a challenging environment to raise money.
"It’s about money, but it’s also about knowledge," said Noland. "Once the money is used you want people to be better able to do whatever it is they need to do."
Raising money in Michigan is a challenge itself, said Noland. Many people that make it big in Detroit often leave the area for warmer weather, and bring their money with them. Keeping that money in Detroit is one of the group’s challenges.
Going forward, Noland said journalism is one area her group may focus on. She said the cutbacks at struggling news outfits is leading to less information for the community, information that’s vital for people to make good decisions. Funding non-profit news agencies might be something the foundation would do, although no plans have been made yet.
Working to raise money doesn’t come without it’s odd stories.
One gentleman, who appeared homeless, would come into the foundation on a regular basis saying he wanted to start a fund, as Noland tells it.
The staff would give him food or make sure he was ok, but no one really took him seriously. Finally they contacted his lawyer, who told them to make preparations for a fund. When the man died they found out that he was a former cab driver who had evidently been quite frugal with his earnings. He left a six-figure endowment to help the homeless.
One donor gave $1 million with the stipulation that the grants be chosen by high school students. Another sent in a dollar every three months to atone for a shoplifting incident as a young girl that had apparently been weighing on her conscience.
Getting Detroiters to give is one thing. Getting them to change their mind set is another.
Noland is confident Detroit can grow in the next 5 years, but she said it will take strong local political leadership and a recovering national economy to do it.
But like many in Detroit, she said moving the city from its old way of thinking is key to putting it on track to compete in the 21st century economy.
"It’s an entitlement culture here, you didn’t have to go to school and you could get a good job," said Noland. "That’s gone."
As President Obama turns up the heat on health care reform, one new and surprising detail to emerge is his pledge to tackle medical malpractice.
"I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs," Obama said Wednesday night.
Obama’s decision to wade into the issue has some insiders scratching their heads, because cutting down on medical malpractice lawsuits is a Republican tenet.
But the president’s idea of reducing health care costs by cutting down on lawsuits isn’t the same as Republicans, who want to cap lawsuit damage awards. Instead, Obama plans to run with an idea left over from his predecessor’s administration and fund pilot projects in states that trumpet patient safety.
In one approach, the Department of Health and Human Services would fund projects aimed at limiting lawsuits by encouraging doctors and clinics to disclose accidents early and apologize to patients when appropriate.
Experts point to the University of Michigan Health Care system as a potential model. Malpractice claims in the system dropped by 55% between 1999 and 2006.
"If we make a mistake, we’ll move quickly to apologize and compensate that patient. But if we didn’t make a mistake, we talk to the patient and explain," said Richard Boothman, chief risk officer for the University of Michigan system.
Politics of malpractice
As the Obama administration knows well, medical malpractice can be a sticky issue. When the discussion centers on lawsuit damages, it pits two deep-pocketed lobbying groups against each other: trial lawyers and big business.
Advocates like the U.S. Chamber of Commerce and hospital and doctor groups say that lawsuits, especially frivolous ones, drive up the cost of health care by increasing the cost of doctors’ malpractice insurance.
Trial lawyers counter that limiting their ability to hold doctors and hospitals accountable for mistakes won’t reduce costs.
More neutral agencies like the Congressional Budget Office say that efforts to curb medical malpractice lawsuits can prompt cheaper malpractice insurance premiums but don’t really affect health care spending.
In June, Obama told the American Medical Association that he was not an advocate of lawsuit caps, which he said can "be unfair to people who’ve been wrongfully harmed."
Despite his legal background, Obama hasn’t always sided with lawyers on legislation targeting the court system.
In 2005, he voted with Senate Republicans to pass a law that limited attorneys’ fees in class action suits and shifted most of those cases into federal courts to prevent attorneys from seeking more favorable state-court venues.
On Wednesday, the president made it clear that he brought up medical malpractice as a sign of good will to the "Republican side of the aisle."
That irks some left-leaning Democrats. Rep. Keith Ellison, D-Minn., said he didn’t see the need to address the issue, which is often called "tort reform."
"But you know, if the president wants to discuss tort reform — fine. I am not going to die on that hill," Ellison said.
Details and next steps
The next wave of controversy depends on the kinds of medical malpractice pilot projects the Obama administration agrees to fund.
If the projects aim to stop and prevent medical errors and accidents before they happen, the trial lawyers’ lobbying group, the American Association for Justice, is on board. If the measures limit liability, that’s another story.
"If you really want to solve the health care crisis, you need to focus your efforts on saving lives," said Linda Lipsen, the AAJ’s top lobbyist. "That’s where the most cost savings are."
The American Medical Association was more guarded in its reaction, but the doctors lobbying group applauded Obama’s intent to address malpractice lawsuits as a way of cutting health care costs.
An administration official said the types of things they’re looking to fund include two proposals contained in one of the health care reform bills now in Congress.
One resembles what the University of Michigan already does, where hospitals and clinics disclose errors and apologize when at fault. Meanwhile doctors are well-insured against lawsuits.
"I’ve the luxury of saying to our physicians, no matter how big a case is, how bad a case is, ‘You’re completely insured and your personal assets are not at stake,’ " Boothman said. "You can’t ask them them to be totally honest when they have such things at stake."
The other provision would require patients who want to file lawsuits to get a panel of experts or doctors to agree their lawsuit has merit before they go to court.
But if the Obama administration is truly thinking of running with Bush administration ideas, they’ll look at a 2002 Institute of Medicine study aimed at cutting malpractice suits.
That study offered recommendations that have yet to surface in current health care policy discussions.
In one, the federal government would offer backup insurance to provider groups who disclose mistakes and compensate patients for avoidable injuries. But the report also recommended that participating states limit pain and suffering awards.
The other option gave health care providers "immunity," or protection against lawsuits if they agreed to participate in a government-run administrative system that compensated injured patients, mostly based on a formula.
William Sage, a doctor and attorney who advised the Institute of Medicine, said the 2002 recommendations fit well with the president’s pledge, because they attack malpractice lawsuits from the bedside instead of the courtroom.
Sage said he expects that such medical malpractice reforms will go beyond pilot projects and make it into final legislation.
"This year it’s different," said Sage, vice provost for health affairs at the University of Texas at Austin. "We have to have major long-term changes, so malpractice proposals have to appeal more broadly. They have to gain the confidence of a large number of medical physicians and make them think about their work differently without always being afraid of being sued."
The poverty rate rose last year to 13.2%, the highest level since 1997, said a report released Thursday.
That marks the first statistically significant annual increase since 2004, according to the annual Census Bureau report "Income, Poverty, and Health Insurance Coverage in the United States: 2008."
Last year, 39.8 million people lived below the poverty level, which is $22,025 for a family of four, according to the Office of Management and Budget. That’s up 3.9% from 2007, when 37.3 million people lived in poverty.
Regional changes. The West had 9.6 million people living in poverty in 2008, which represents 13.5% of that region’s population, up from a rate of 12% in 2007.
The Midwest had 8.1 million people living below the poverty line in 2008, which is a rate of 12.4%, up from 11.1% in 2007.
"Unfortunately, the regional numbers make perfect sense," said Heidi Shierholz, labor market economist at the Economic Policy Institute free instant credit report.
"The West was very hard hit by the housing bubble, and the industrial Midwest states are suffering in the manufacturing sector."
The poverty rates for the Northeast (11.6%) and the South (14.3%) were both statistically unchanged from 2007.
State-by-state. New Mexico had the highest poverty rate of any state– 19.3% — followed by Louisiana (18.2%), Mississippi (18.1%), Arizona (18%) and Kentucky (17.1%).
At 7% New Hampshire had the nation’s lowest poverty rate, followed by Utah (7.6%), Connecticut (8.1%), Alaska (8.2%) and Maryland (8.7%).
The fight over health care overhaul is on track to be the most expensive issue ever to hit the hallways of Congress.
The bill for lobbyists, television ads and political donations has topped $375 million — or enough to pay the entire insurance tab for about 30,000 families a year.
The big spenders range from drug companies, hospitals and doctor groups to organizations that advocate for unions, immigrants and retirees.
The largest chunk has gone to direct lobbying of lawmakers and other policymakers. In the first half of 2009, the health care industry spent nearly $280 million on lobbyists, according to the Center for Responsive Politics.
Another $75 million was spent on television advertising airtime by health care interests, mostly politically left-leaning groups and health industries. And another $23 million has flowed from the health care sector into the campaign war chests of 2010 candidates for federal office, on the heels of some $95 million raised during the 2008 cycle.
"The health sector is on track in 2009 to spend more on lobbying than it has on any other year in U.S. history — and by a lot," said Dave Levinthal of the Center for Responsive Politics, which analyzes and collects lobbying and campaign spending figures.
Taking the Hill
Part of the reason for the big price tag is that so many different types of groups and companies could be affected by health care reform. Business models could be upended — for better or worse — for everything from urgent care clinics to providers of electronic medical records.
Lobbyists have been hired for groups as varied as the College of American Pathologists, which has spent $775,717 on lobbying this year, and the prestigious University of Texas M.D. Anderson Cancer Center, which spent $220,000.
The other reason for the big bucks is the duration of the debate. Every week it goes on, millions more are spent trying to influence the negotiations.
The lobbying figures alone are on track to exceed half-a-billion-dollar mark by the end of the year, which would be a record.
The big payoff for such spending? Open doors to policy makers.
Consider that Richard Umbdenstock, who heads the American Hospital Association, has spent $7 million on lobbying this year and made seven White House visits since March to talk to staffers, according to a White House letter to Citizens for Responsibility and Ethics, a nonprofit watchdog group that sued to get such information.
Other advocates that have made White House visits include the head of the lobbing group for drug makers, Pharmaceutical Research and Manufacturers of America, and the head of the health insurance lobbying group, America’s Health Insurance Plans.
"Health care is supposed to be a personal issue that addresses the issues of individual Americans, but now it’s addressing drug and insurance industry concerns, thanks to their lobbyists," said Christine Hines of Public Citizen, a nonprofit group that tracks money and power on the Hill.
Yet, lobbying and advertising is guaranteed by the Constitution. And several big spenders, such as the Pharmaceutical Research and Manufacturers of America, say they’re educating not advocating for any particular bill creditreport.
"All of our advertising to date has been done to raise awareness of the importance of passing bipartisan health care reform this year," said Ken Johnson, a senior vice president at the pharmaceutical group, which has spent $13 million on lobbying this year.
Johnson points out that his association’s members have told policymakers they’ll commit $80 billion to cutting costs over the next 10 years. However, the group is also wary of legislative attempts to allow government to use its purchasing power to force drugmakers to negotiate pricing or allow cheaper foreign drugs to be imported.
"Our companies directly employ nearly 700,000 workers around the country as well as another 2.5 million indirectly," Johnson said. "I would say that we have a pretty significant stake in this debate, too."
TV ads get the word out
A popular way to influence public opinion is through television ads, and August was the biggest month this year for health care advocacy ads, according to the Campaign Media Analysis Group.
About $1 million a day has been spent on health care reform TV ads since June, said Evan Tracey, president of the the media research group.
In August alone, $20 million was spent on 34,000 ads, with foes of congressional reform proposals outspending proponents. Earlier in the year ads supporting reform outnumbered those opposing by a margin of 2-to-1.
The buyers range from left-leaning groups Health Care for America Now, whose members include unions and immigrant advocacy groups, to the U.S. Chamber of Commerce and anti-tax groups such as Our Country Deserves Better.
"What you’ve got is the perfect storm of lots of stakeholders who have access to all kinds of capital, so they’re putting everything into this," said Tracey, whose group consults for CNN. "Everyone has a dog in this fight. That’s what is compounding this from an advocacy perspective."
Another way to influence the debate is through election campaign contributions. Although it is early in the 2010 election cycle, the health care sector has contributed $23 million, according to the Center for Responsive Politics.
One of the biggest beneficiaries has been conservative Blue Dog Democrats.
Many Blue Dogs are on the fence about controversial health care issues, such as whether to create government-run insurance plans. Their votes are crucial to passing a final bill, so they also tend to attract more attention and campaign contributions than other Democrats and Republicans.
Health and accident insurers, HMOs and health services organizations increased their contributions to Blue Dogs from $106,200 in the first quarter of 2009 to $122,650 in the second, according to the Center for Responsive Politics.
That is a 15% increase. By comparison, Democrats not in the Blue Dog group saw a 3% hike in contributions.
Forget about resting easy.
Target-date funds, billed as confidence-building vehicles that gradually shift your holdings into more conservative fixed-rate instruments as their date nears, have caused some sleepless nights.
Investors stashed money in these one-stop retirement plans so they didn’t have to worry about making their own allocation decisions. But it has become clear they need to better understand the basic concept of target-date funds and carefully scrutinize any fund under consideration.
The 2010 target-date funds designed for people who turn 65 years old next year lost an average of 25 percent of their value in 2008. Because many target-date funds are also the automatic default investment for enrollees in company 401(k) retirement accounts, the devastation was compounded.
As funds were drawing close to that target date, encouraged by a vibrant stock market, they kept a lot of stock in their portfolios. They were also competing for the best performance in order to attract new assets. But then the bull turned into a bear, and they paid a high price.
The average 2010 target-date fund had a 45 percent stock allocation at year-end 2008, according to Target Date Analytics LLC in Marina del Rey, Calif.
"The fund companies had expanded their investment strategy past the target date, using the rationale that people live 15 or 20 years past retirement, so they should keep a strong equity position," said Joseph Nagengast, principal with Target Date Analytics. "Target-date fund managers weren’t managing to the year 2010, as some investors assumed, but to some point well beyond it."
Investors must determine whether a target fund they’re considering is a "to" fund that manages the money to the target date or a "through" fund that manages it past the target date and into retirement, he said.
"Ask the fund company when the fund will reach its most conservative position," advised Nagengast. "If it’s a 2030 fund and they tell you 2029, you know they’re managing to the target date, but if they say 10 years after that date, you’ll know they’re managing well into retirement."
That means more responsibility than most target-date investors expected.
"You as the investor must define the target date and whether it represents when you plan to retire or some date beyond that," said Jack VanDerhei, research director for the Employee Benefits Research Institute in Washington. "A lot of people believe that by the target date they should be down to zero equities, which indicates their lack of understanding."
Some fund companies that were low on equities last year are now trumpeting their lack of negative performance, VanDerhei noted, while others are saying a certain percentage of equities must be in your portfolio to fight inflation if you have 20 years or more left in your retirement fast cash without a hassle.
"As the investor, you must know which strategy makes you feel most comfortable," he said, noting that reading the prospectus of the fund remains crucial. "Many people say target funds dated 2010 or close to that have too much equity in them, but this ignores the fact that the investor can look for a fund that holds a smaller percentage of equities."
Surveys have shown that some investors incorrectly believed they were getting a guaranteed payout when the target date was reached, another misconception. But despite all the fallout from poor performance and some murky comprehension, there can be a place for target-date funds in an individual’s planning if he or she clearly understands what the investment is all about.
"It still makes sense to have target-date funds and, like any other investment, there are good and bad ones," said Greg Carlson, fund analyst with Morningstar Inc. in Chicago. "They provide one-stop shopping for investors who don’t want to build their own portfolios, plus broad diversification over most asset classes."
The three biggest competitors in target-date funds are Fidelity Investments, Vanguard Group and T. Rowe Price, though such funds are offered by a host of investment companies.
Carlson especially likes the Vanguard Target Retirement Funds because they’re mostly index funds with broad diversification and low fees. He also likes T. Rowe Price Retirement because it has some excellent funds in its portfolio and "is one of the few companies that does a lot of things really well." Two examples of 2010 target-date funds Carlson finds noteworthy are Vanguard Target Retirement 2010 and T. Rowe Price Retirement 2010.
Other experts have caveats about even those fund groups.
"I think Vanguard and T. Rowe Price do a good job in long-dated funds that have more than 20 years until the target date," said Nagengast. "But in my view, they do a poor job of managing risk in short-dated funds of 15 years or less because they’re making investment decisions based on a date well past the actual target date."
Whatever fund company and fund is chosen, individual investors still bear the ultimate responsibility for the selection made. The buck stops with them.
"All the big fund companies are pretty competitive on fees, so I don’t think that will be the greatest factor making an investor choose one company over another," concluded VanDerhei. "It really comes down to asset allocation and which fund company you feel most comfortable with."
Chinese stocks sank 6% to a three-month low on Monday, weighing on Asian stocks and sapping investor willingness to put money at risk.
Meanwhile the yen rose sharply after Japanese voters swept the opposition into power.
The election results, while widely anticipated, sparked some short-term buying of yen on hopes that new policies will support consumer spending in an economy trapped in deflation and haunted by a weak growth outlook, though domestic stocks slipped on exporter weakness.
Major European stock futures fell 0.9%, following commodity prices lower, in trade thinned by a holiday in London. U.S. stock futures fell 0.6% and U.S. Treasury futures were up 0.2%.
Outside of Japan, volatility in Shanghai, a market largely closed to foreigners, has curbed risk taking and has been weighing on the Australian dollar, which is a common target for investors searching for bigger returns because of its relatively high yields.
Shanghai-listed shares dropped 6.2% on the day, on track to post losses of 21 percent in August, only the second month that the composite index has fallen more than 20% in the last 15 years.
The index also crucially dropped below the 125-day moving average, what is viewed by many domestic investors as the threshold for bear and bull markets.
Fears that banks will rein in their lending after a torrid first six months of the year and an abundant supply of expected new shares have been knocking Chinese shares lower for the last month, often weighing on global investor sentiment about holding riskier assets.
Shares of Bank of China, the country’s biggest foreign exchange lender, were down 3.9% in Shanghai and the top drag on the market. Hong Kong’s Hang Seng dropped 1.8% to a one-month low in sympathy with Shanghai.
Tokyo’s Nikkei share average fell 0.4%. Large exporters Canon Inc (CAJ) and Honda Motor Corp (HMC) were among the biggest drags on the Nikkei, losing around 3.3% and 1.8%, respectively, on the stronger yen.
Australian stocks also performed relatively well, falling only 0.2%. Shares of Australia and New Zealand Banking Group Ltd jumped 4.1% after the country’s fourth-largest lender said it was starting to see bad debt provisions bottom out.
The MSCI index of Asia Pacific stocks traded outside Japan slid 1 best payday loan.3%. The selling was widespread, hitting the consumer discretionary, energy, telecommunications and materials sectors.
Stock valuations questioned
Asian stocks are trading at a price-to-book valuation of 1.1 times, above the 30-year average of 0.7 times and around the same level at the peak of the last bull market.
Investors since March had been justifying the premium based on the region’s growth prospects and its expected speedy recovery from the global downturn. Yet in August developed markets, such as the United States and Europe, have attracted investors away from emerging markets thanks to better economic data.
The Asian stock rally sputtered in July and August for two reasons, according to Mark Matthews, Asia Pacific strategist with Fox-Pitt Kelton in Hong Kong.
"The first is that the U.S. in particular and the developed world in general are experiencing economic recoveries that are more robust than previously expected. The second is that there is policy shift in China, and even the doves there are happy that asset prices are no longer rising quickly," he said in a note.
Yen for yen
In the currency market, the yen got an early boost on the clear-as-day election result, which eliminated any uncertainty about Japan’s political leadership. The sharp selloff in Shanghai equities also supported the yen as dealers sought a safe haven.
The U.S. dollar fell 0.7% to ¥92.75, the lowest since July 13, and the euro dropped 1% to ¥132.28.
The sharp decline in Chinese stocks "has muddied the picture as well as to whether it’s a reaction to the election victory or risk aversion. It’s probably a bit of a combination of both," said a dealer at a European bank in Hong Kong about the yen strength.
The Australian dollar was off 0.6% to $0.8373, though was largely unchanged in August.
The yield on the benchmark 10-year U.S. Treasury note slipped to 3.43%, down sharply since hitting 4 percent on June 10.
The creeping rise of risk aversion in markets pushed down oil prices, with U.S. crude for October delivery down 0.7% to $72.22 a barrel.
Bernard Madoff, convicted of swindling $65 billion through the biggest-ever Ponzi scheme, has told fellow prison inmates that he is dying of cancer, the New York Post reported on Monday, citing unnamed prison sources.
Madoff, 71, who since June has been serving a 150-year sentence at a North Carolina federal prison, has been telling fellow inmates he does not have much longer to live, the Post said, citing the unofficial and unusual sources.
The Post said there had been speculation that Madoff was suffering from pancreatic cancer earlier this year. Inmates said Madoff was taking “about 20 pills a day” and “not doing very well.”
The Post said Madoff’s lawyer did not return messages Sunday and had previously declined to answer questions about whether Madoff had cancer. Reuters could not reach Madoff lawyer Ira Sorkin immediately for comment.
The tabloid also reported Madoff has engaged in a number of surprising new activities with some unexpected social circles.
A shirtless Madoff has joined weekly “Native American religious purification ceremonies” that involve prayers, heated rocks to induce sweat and smoking from a ceremonial pipe, the paper said.
The paper also reported that various “gangs” at the prison are trying to recruit Madoff while some inmates regularly cook “sandwich wraps” for him at their cells.
(Reporting by Joseph A. Giannone, editing by Maureen Bavdek)
There’s a reason consumers are worried about protecting their credit- and debit-card information.
The feds said Monday that one alleged master scammer stole data involving more than 130 million credit cards. In fact, Albert Gonzalez may be responsible for the largest case of identity theft on record, according to federal prosecutors.
Meanwhile, other hackers are working their way into the computer systems of major retailers across the country, experts say.
As the bad guys get savvier, identity theft has become more common. Last year, the number of incidents of identity fraud in the United States increased 22% over 2007, according to the most recent survey by Javelin Strategy & Research.
Identity theft occurs when someone uses your information to open credit cards or bank accounts, write bad checks or take out loans. Victims can be left with countless charges, years of bad credit and endless aggravation.
Some 10 million Americans were victimized in 2008, up from 8.1 million in 2007, Javelin said.
"Let’s face it, these scammers are extremely intelligent people," said Bill Hardekopf, CEO of LowCards.com and author of "The Credit Card Guidebook." But, "there are certain things that you can do to protect yourself."
Stop identify theft before it starts
What can you do to keep it from happening to you?
The most effective weapon against identity theft is to safeguard your personal information: birth date, Social Security number and credit card numbers.
Shredding your mail, using unpredictable passwords and secure networks, keeping careful tabs on your bank statements and monthly bills and monitoring your credit report regularly are the best ways to prevent identity theft.
"The key word vigilance," said Linda Foley, founder of the Identity Theft Resource Center affordable car insurance.
Consumers are entitled to one free credit report a year from each of the three credit bureaus — Equifax, Experian and TransUnion. Hardekopf recommends staggering the reports so you’ll get one every four months.
To get your report, go to annualcreditreport.com — the official site set up by the three credit bureaus to comply with federal law.
The three major agencies each offer ID protection services for about $15 a month as well. That includes monitoring your credit report and notifying you of any changes plus a few fancy extras.
Equifax’s ID Patrol searches suspected underground Internet trading sites for your personal information and includes identity theft insurance up to $1 million with no deductible.
Other credit monitoring services are available from your bank. Bank of America’s Privacy Assist service costs $12.99 a month for unlimited credit checks. For $9.99 a month, Chase’s Identity Protection will also reimburse up to $100,000 of identity fraud expenses.
But keep in mind, most services can only warn or insure you against ID theft after the fact. Monitoring services can only throw up red flags at the first sign of trouble and help limit losses, which Foley says is "reactive, not proactive."
Even after paying for credit monitoring and insurance, experts agree that no identity theft prevention service is foolproof.
"As a consumer there is only so much you can do," Foley said. "But you can lower your risk somewhat."
Swiss bank UBS AG and the U.S. government have agreed to settle a long-running dispute over the disclosure of names of wealthy American clients suspected of tax evasion, a U.S. government lawyer said Wednesday.
The settlement is expected to involve the disclosure to U.S. authorities of thousands of names of people suspected of using offshore accounts to conceal assets and evade taxes.
Washington’s case against UBS, the world’s second-largest wealth manager, had strained relations between the United States and Switzerland because it challenged the latter’s jealously guarded bank secrecy laws.
The case therefore has big implications not just for Switzerland, whose private banks manage around $2 trillion of foreign wealth, but for the entire offshore banking industry.
At a roughly three-minute hearing before U.S. District Judge Alan Gold in Miami, U.S. Department of Justice tax lawyer Stuart Gibson said the government would drop the case against UBS once a final settlement was in place.
"The parties have initialed agreements," Gibson said. "It will take a little time for the agreements to be signed in final form."
The U.S. government and UBS had reached a settlement in principle on July 31. Subsequent talks focused on how to transfer client data to Washington while respecting Swiss bank secrecy laws.
U.S. authorities had been seeking the names of 52,000 wealthy American clients suspected of trying to evade taxes quick cash.
The authorities believe many of the clients either inherited substantial wealth and have European roots, are frequent business travelers who receive offshore compensation via Swiss accounts, or intended their accounts from the start as a means to avoid U.S. taxes.
But UBS, backed by the Swiss government, held onto the data, calling the U.S. demand a fishing expedition that would breach Swiss laws and bilateral tax agreements.
In February, UBS had agreed to pay $780 million to settle criminal charges it had faced in a similar tax dispute with the U.S. government.
It agreed to hand over data related to about 250 U.S. clients who held secret accounts, and promised to close its offshore business to U.S. clients.
Swiss bank secrecy rules have eroded in recent years, and in March the government made concessions to abandon the distinction between tax fraud and tax evasion when dealing with foreign authorities.
UBS (UBS) shares were up 1% at 16.01 Swiss francs in afternoon trading in Switzerland. In the United States, they were up 1% at $14.87 in morning trading.
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