Tuesday, November 10, 2009

AIG shares up, Moody's sees government repayment

Shares of American International Group Inc. climbed Tuesday after Moody's Investor Service analysts said they believe the company will have the resources to fully repay the federal government.

As of Sept. 30, AIG owed the government $122.31 billion, which includes loans, interest and money the government spent buying investments from AIG.

The insurer has been working for the past year to sell assets and streamline operations in an effort to repay the government debt. Last week it reported that it was profitable for the second straight quarter.

The Moody's analysts said AIG continues to stabilize its core insurance operations and has made progress on its restructuring plan.

They said they believe AIG "can generate sufficient value to fully repay the government's senior secured loan and to repay much or all of its preferred equity stake, giving the government incentive to continue supporting AIG and its various creditors."

A material decline in the value of AIG assets, however, could reduce the government's incentive to support other creditors, the analysts said.

Moody's maintained the current ratings on AIG, a long-term issuer rating of A3, an investment grade rating and a short-term issuer rating of Prime-1, the highest level. The outlook remains "negative."

AIG's shares were up $1.58, or 4.4 percent, to $37.76 in afternoon trading.

The government bailed out AIG in September 2008 as the financial crisis spiraled out of control. The insurer has received aid packages with a total value of more than $182 billion. In return for that financial support, the government received an 80 percent stake in AIG.

The company's financial stability was undermined by its underwriting of risky credit derivatives contracts. A collapse in the value of those contracts was the primary driver of AIG's near-collapse.

Recovering financial markets and changes in accounting rules have helped AIG write up the value of its remaining risky assets.

Those assets could again lose value or AIG could be forced to take losses as it sells them off. AIG had $1.1 trillion in derivative contracts sitting on its books as of Sept. 30, many of which are tied to risky mortgage debt.

Hollywood: Same As It Ever Was

Even with Oscar buzz and box office success, “Precious” isn’t likely to blow up the careers of its female stars. Black actresses still have a hard row to hoe. Just ask Angela Bassett—and Cicely Tyson.

With Precious, Oprah Winfrey and Tyler Perry are attempting to change both the Oscar game and what audiences have come to expect from black movies.

Precious: Based On The Novel Push By Sapphire, is extremely powerful, but I sincerely doubt it will change anything for black actresses in Hollywood. The film is strong, but not that strong.

Even if totally successful on every level—from box office receipts to a cultural shift away from the paralysis of self-pity—Hollywood will continue to go along as it has gone. Too many people are satisfied with the cardboard darkies that supposedly represent black women on film in the past.

When one looks at Byron Hurt’s Hip Hop: Beyond Beats and Rhymes or his equally important Barack & Curtis, the problems with the media depictions of black women should become clear. Most people, black, white or whatever else, should be disturbed by the reduction of black women into beautiful but lascivious sperm buckets, overweight hams or abrasive bitches “deserving” of beat-downs. This caricature of black womanhood is as far removed from life and human dignity as molasses are from the taste of salt.
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Paterson: New York State Will Be Broke Before Christmas

Governor David Paterson is dead serious about cutting $480 million in aid to local school districts.
Delivers Scary News To Legislature, Says Only Way To Fix Problem Is To Have Immediate Cuts To Education, Hospitals

Albany Gov. David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money.

To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month.

"We're going to run out of cash in four and a half weeks. We are going to run out of money. Unless we do something about it, (it will) threaten generations," Paterson said.

And so began what is turning out to be a tense tug of war between Gov. Paterson and the Legislature.

The governor says $3.2 billion in cuts must be enacted how -- or else. The cuts range from $500 million in agency spending to over $1 billion in already committed in aid to school districts and hospitals.

"I will mortgage my political career, but I will not mortgage the fate of the State of New York," Paterson said.

But Senate Democrats, with their tenuous 32-30 hold on the upper house, are terrified to make school and hospital cuts because, they said, the cuts could mean increases in local property taxes.

And that could mean suburban Democrats on Long Island, in Westchester and other parts of the state could have trouble getting re-elected next year.

Remember, high property taxes led to the ouster of many suburban Democrats last week, including Westchester County Executive Andy Spano. Nassau County Executive Tom Suozzi could also lose once absentee ballots are counted.

"Personally, I do not favor mid-year school cuts," said State Sen. Pedro Espada, D-Bronx.

"Last year, in the midst of this financial crisis, the Senate and the Assembly together with the governor decided to raise spending by $12 billion," added Sen. Andrew Lanza, R-Staten Island.

"I'd rather present 96 or 97 percent of a check to school districts, to hospitals than to have them call up and say where's my check? And the state says, sorry, we didn't have any money," said Assembly Speaker Sheldon Silver, D-Manhattan.

The governor has ordered lawmakers into special session Tuesday to close the budget gap. Right now there is no agreement and he could flex his muscles by keeping them here until there is.

Also on the agenda Tuesday are bills to legalize gay marriage, toughen drunk-driving laws, impose a cap on state spending and reform the state's public authorities.

Suspected gunman in custody at school

A suspected gunman was in custody and no one was injured after a principal was held hostage Tuesday at a school in Pine Plains, N.Y., officials said.

The principal was held hostage for nearly two hours at Stissing Mountain High School, about 90 miles north of New York City.

The suspect was taken into custody after state police isolated him to one room of the school and negotiated with him, a spokesman for the sheriff's department told CNN.

Pine Plains Supervisor Gregg Pulver said he had been told the gunman was a parent of a child at the school, which was surrounded Tuesday by nearly 100 state, county and local police officers.

Parents waiting in a nearby lot applauded when they heard the situation had been resolve safely, said Nancy Kotzur, a Pine Plains resident who has two sons at the school.

"Now we're waiting for the children to be released," Kotzur said.

The gunman was at the school when it opened at 7:45 a.m., a time when as many as 500 children and 100 staff also were at the school, Pulver said. There was no immediate word on a motive for the hostage-taking.

BREAKING: Possible hostage situation in Jeff City


Updated 12:12 p.m.

Police say there's no confirmation of shots fired or hostages taken at a Jefferson City office building near the Governor's Mansion that's been under lockdown.

Employees in the 10-story Governor Office Building were told over the intercom to remain in the offices with their doors locked. Police were gradually evacuating the building.

The Governor Office Building primarily houses the staff of the Missouri Public Service Commission, which regulates utilities. It also is home to the state's consumer advocacy office and a development finance board.

Employees connected with each of those offices were reached by telephone. None of those employees said anything unusual had happened.



Two SWAT teams are entering the building.

No shots fired, authorities confirm.

Here's how it started. A woman on the building's 5th floor overheard something on an intercom that led her to believe there was a hostage situation.

A security firm was contacted, which called Jefferson City police, leading to the lockdown.

We'll update as more information becomes available.

Statehouse correspondent Jason Noble just called in to report a possible hostage situation in Jeff City.

Noble said law enforcement officials told him the event is occurring in a building known as the Governor's Office Building across the street from the governor's mansion on Capitol Avenue (not the state Capitol building).

(UPDATE: Here's Lt. Gov. Peter Kinder on Twitter talking about the incident.)

In the background as Noble talked: a law enforcement helicopter. He said officers with assault rifles were visible with one standing on the lawn of the governor's mansion itself. Lots of police cars, too.

But at the same time, Noble said office building workers could be seen in windows. One man held a cup of coffee in his hand. Police were not waving reporters away from the scene, which was a bit unusual.

More as we get it.

ICE Returns 16th Century Hebrew Bible

The Jewish library in Vienna

History sometimes has a way of righting itself — even if it takes a while.

That seemed to be the case Monday when U.S. Immigration and Customs Enforcement officials returned to Vienna’s Jewish community a 16th Century Hebrew Bible that had been looted by the Nazis 71 years ago during “Kristallnacht”, the U.S. Attorney’s Office in New York said.

ICE officials turned over the book to the Museum of Jewish Heritage in Manhattan during a repatriation ceremony.

Authorities said the bible dates back to the year 1561 and was donated to the Jewish community library in Vienna in 1908. On Nov. 9, 1938, the Nazi Gestapo seized the library during “Kristallnacht”, a violent and coordinated attack on Jewish people.

Earlier this year, authorities said, a New York City auction house, Kestenbaum & Company offered the bible up for sale. ICE determined the book had been stolen by the Nazis and the owner of the bible, a Swiss consignor, agreed to turn it over to the Jewish community, the U.S. Attorney’s Office said.

“Seventy one years ago today, on Kristallnacht”, the Nazis carried out a violent and coordinated attack on Jewish people, ransacking the places they lived, worked and gathered,” said New York U.S. Attorney Preet Bharara said in a statement. :The passage of time does not diminish our remembrance, or the duty to return all surviving works of art and precious symbols stolen by the Nazis.

Video: Drunk woman falls onto Boston subway tracks

Spoiler alert: she survives.

In the clip, 27-year-old Charice Lewis is shown perilously weaving about on a Boston subway platform before falling onto the tracks. As Lewis stumbles around on the track, hugging the rail and unable or unwilling to reach the horrified bystanders trying to frantically alert the conductor and reach out to the girl, the train rapidly approaches. Police say that the woman, who was treated for “scrapes,” had been drinking heavily for a long period of time.

Luckily for Lewis, the conductor manages to grind the speeding train to a halt just short of where she stood on the track. The train operator, who was not named, describes the experience:

“The people were waving, but they were waving too much, and they were really, really close to the yellow line, which you are not supposed to be. It was telling me, ‘Slow your train down. Slow your train down.

“As I was approaching, the lady pops her head up, and I was like, ‘Oh my God. Someone is in the pit.’ I threw it into emergency, exactly what I am supposed to do, and it stopped just in time not to hurt her.

“After the fact, she came up with a big smile on her face.”

EMBED-Subway Stops Inches Before Woman on Tracks - Watch more free videos

Cadbury Rejects Kraft Foods $16.4 Billion Bid

Cadbury, the British candy maker, has rejected a renewed $16.4 billion hostile bid from Kraft Foods Inc. on Monday. Kraft refused to increase the previous offer and Cadbury is calling it a hostile bid.

In Britain, 195-year-old Cadbury is a much-loved brand. Its Dairy Milk is the country's top-selling chocolate bar. There wasn't much sweet talk going on when Kraft offered a mixture of cash and shares for each Cadbury share -- these were exactly the same terms Kraft proposed in September.

Cadbury's stock initially dropped as much as 2 percent after Kraft's announcement, but soon began to inch up again. If Kraft and Cadbury combine are combined, it would create a company that generates at least $50 billion in total revenue.

Kraft is the largest food company in the U.S. and number two worldwide to Nestle. However, Nestle which would keep its number one position even if Kraft adds Cadbury.

There was speculation that industry rivals would start a bidding war when Kraft made its initial offering in September. However, the big rival -- U.S. candymaker Hershey Company -- has yet to come forward.

Felicity Loudon, the granddaughter of former Cadbury Brothers managing director Egbert Cadbury, has also been an outspoken critic of any deal. She has been quoted as saying she was "particularly saddened by the possibility of one of the last remaining British icons disappearing into an American plastic cheese company."

With Cadbury's shares recovering after the bid rejection, Kraft shares slipped 35 cents to $26.43 in New York.

Change Wall Street Can Believe In

Wall Street is doing to America what private equity firms did to Simmons Bedding and many other productive companies. Taking control with borrowed money, stripping assets, slashing jobs and cashing out.

Taxpayer bailouts saved Wall Street from choking on its own greed. Now, as the Wall Street Journal reports, “Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year — a record high.”

$140 billion is more than the combined budgets of the U.S. Departments of Commerce, Education, Energy, Housing and Urban Development, the National Science Foundation and the Environmental Protection Agency.

Typical workers, meanwhile, make less today adjusting for inflation than they did in the 1970s. Wall Street rewarded CEOs who cut employee wages and benefits and offshored manufacturing, services, and research and development; feasted on Bush’s tax cuts; turned mortgages into loan sharking; and vacuumed up home equity, college funds, retirement funds and other private and public investments into their rigged casino.

Goldman Sachs, for example, “peddled billions of dollars in shaky securities tied to subprime mortgages on unsuspecting pension funds, insurance companies and other investors when it concluded that the housing bubble would burst,” McClatchy reports in a new investigative series.

The Great Depression gave way to the New Deal. The Great Recession has become the Great Ripoff.

The TARP inspector general’s latest report to Congress says, “The firms that were ‘too big to fail’ … are in many cases bigger still, many as a result of Government-supported and -sponsored mergers and acquisitions; the inherently conflicted rating agencies that failed to warn of the risks leading up to the financial crisis are still just as conflicted; and the recent rebound in big bank stock prices risks removing the urgency of dealing with the system’s fundamental problems.”

Enabled by the Bush and Obama administrations, the megabanks are lending less and gambling more — using taxpayer money to pay bonuses, float a new stock market bubble and make even riskier bets.

The U.S. Treasury and Federal Reserve have become Wall Street’s ATMs, while unemployment, foreclosures and homelessness rise, states slash public services, and small businesses are starved of credit.

Outside the TARP, trillions of dollars are flowing to the banksters in the form of near-zero interest loans, bond guarantees and extreme leverage for toxic assets. You can follow the money at www.nomiprins.com. Nomi Prins, a former managing director at Goldman Sachs, is author of It Takes a Pillage.

The megabanks are not too big to fail. They’re too big and irresponsible to exist.

Just months after taking office in 1933, President Roosevelt signed into law the Glass-Steagall Act, which separated the commercial banking of savings, checking and loans from investment banks doing underwriting and speculative trading. The former got depositor insurance, not the latter.

Glass-Steagall lasted until Citigroup and other power players killed it in 1999 through the Financial Services Modernization Act, taking us back to the pre-New Deal casino economy on steroids. Now former Citigroup CEO John Reed has joined the growing call to split commercial banking and investment.

In 2000, Congress passed the Commodity Futures Modernization Act, ignoring the warnings of Commodity Futures Trading Commission head Brooksley Born who said that unregulated trading in derivatives could “threaten our regulated markets or, indeed, our economy.”

By 2002, the four largest bank holding companies — Bank of America, JP Morgan Chase, Wells Fargo and Citigroup — had 27 percent of FDIC-insured bank assets. Now, reports the Economic Policy Institute, they have nearly half. They overlap with the biggest derivatives dealers — JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley and Citigroup.

The government heavily subsidizes the megabanks, but it’s the small banks that provide higher savings interest, lower fees, lower loan and credit card rates, and do much of the lending to small business, who in turn create most new jobs.

Behind their Main Street rhetoric, Congress and the Obama administration have so far been the change Wall Street can believe in. The administration and Federal Reserve are loaded with revolving door Wall Streeters and their proteges. Campaign donors and lobbyists are working Congress to minimize and distort reform.

Make your voices heard. We need to enact tough regulations and bust the banks who busted our economy — before they do it again.

Michael Steele: "White Republicans Are Scared Of Me"

Hat tip to reader P. for this one. On yesterday's episode of Washington Watch on TVOne, Republican National Committee chairman Michael Steele (pictured standing) visited Roland Martin and they spoke about how the GOP can engage the Black voting bloc. Check out the moderate-conservative Republican's comment about his partymates. No embeddable video link (grrr...my biggest pet peeve as a blogger), but you can view the video clip here.

For those of you who can't see the video, here is Mr. Steele's response to Mr. Martin's comment that "One of the criticisms I've always had is Republicans -- white Republicans -- have been scared of black folks": "You're absolutely right. I mean I've been in the room and they've been scared of me," Mr. Steele said. "I'm like, 'I'm on your side' and so I can imagine going out there and talking to someone like you, you know, [say] 'I'll listen.' And they're like, 'Well.'"

Asked how Republicans can better reach black voters, Mr. Steele said the party needs to focus on “education and the economy” and credited Governors-elect Chris Christie in New Jersey and Bob McDonnell in Virginia for running a message that could appeal to black voters. “You saw in Christie and you saw in McDonnell a door open because they went in and engaged,” he said. “McDonnell was very deliberate about spending.” Mr. Steele specifically pointed to McDonnell, who secured the endorsement of BET founder Sheila Johnson early in his run and used her as one of his top surrogates on the campaign trail. Both GOP candidates, however, lost the black vote by landslide margins. “Sheila Johnson was on his team. I mean, that was a big deal,” Steele said. “He engaged her and she helped navigate him through that relationship.”

Morning Brief: North and South Korean navies exchange fire

North and South Korean vessels exchanged fire for several minutes on the countries' disputed sea border, today. The South Korean ship was lightly damaged with no casualties, but reports indicate that the North Korean vessel was on fire as it left the area. Both countries have accused the other side of violating the sea border. According to South Korea's navy, the South Korean vessel fired a warning shot after which the North Korean ship opened fire.

North Korea has accused South Korean ships of entering its waters several times in the last three months, but the two navies haven't exchanged fire since an incident in 2002. South Korean Commodore Lee Ki-sik said his navy will investigate whether the breach was intentional.

The incident comes just after the announcement that U.S. President Barack Obama will send envoy Stephen Bosworth to Pyongyang for direct talks with the North Korean government this year.

US basketball legend goes public with cancer fight

US basketball great Kareem Abdul-Jabbar has gone public with his fight against a rare form of leukemia, urging regular doctor visits and improved health care for the poor.

Abdul-Jabbar, a six-time most valuable player who retired from the National Basketball Association in 1989 with a record in points scored and a slew of other titles, told CNN Tuesday he has been diagnosed with a blood cancer known as chronic myelogenous leukemia.

The 62-year-old said he first learned of his condition in December 2008 after suffering unusual hot flashes, and has been coping well with treatment.

"I'm doing very well," he said. "But you have to find a specialist that understands your condition. You have to get your blood checked regularly. And you have to take your medication.

"If you do that, you can manage this particular form of leukemia and live a very productive life with minimal intrusion into the things that you love to do," he said.

Abdul-Jabbar, who has become a spokesman for the company that makes the drugs that are treating his leukemia, also urged people to "see a doctor regularly, go for regular checkups... get regular bloodwork done.

"I think someone in my position who gets public attention can do a lot of good because a lot of people are faced with this condition and they think it's a death sentence," he told CNN.

"I know, for myself, I had a very good friend who died just three or four years ago from a different type of leukemia. But when that happened, it was devastating, and I thought I had the same thing and that I had months or weeks to live."

According to the National Cancer Institute, about 4,800 people are diagnosed with chronic myelogenous leukemia in the United States each year.

Abdul-Jabbar also pressed for the US government to take better care of its poor, who often cannot afford treatment, a key issue among US lawmakers who are grappling with President Barack Obama's drive to reform the healthcare system.

"We have the best technology in the world. We're supposed to be the can-do nation. And our health care system really fails so many people, especially poor people, you know, people who don't have the means to go to private doctors," he said.

"I think we should change that. I think it's absolutely crucial and certainly, it's a just and noble cause to make health care available to everyone."

Ex-Miss California admits to making sex tape

Former Miss California USA Carrie Prejean calls a sex tape she made for an ex-boyfriend several years ago "the biggest mistake of my life."

Prejean (pray-ZHAHN') told Fox News on Monday and NBC's "Today" show on Tuesday that she shot the X-rated video of herself alone when she was 17 and sent it to a boyfriend.

The 22-year-old tells NBC: "It was for private use, but does that justify what I did? No. It was the biggest mistake of my life."

Prejean was fired in June. She believes she lost her crown because of her opposition to gay marriage. Pageant organizers said she was skipping official events.

Earlier this month, Prejean and organizers reached a confidential settlement. She tells NBC that she has suffered "a campaign against me to try to silence me."

Washington, DC-Area Sniper One Step Closer to Execution

Recent but undated photo from Virginia Department of Corrections shows convicted sniper John Allen Muhammad, 48

The U.S. Supreme Court has refused to block the scheduled execution of the mastermind of a string of deadly shootings in the Washington, D.C. area seven years ago.

John Allen Muhammad is scheduled to die by lethal injection Tuesday night in the southeastern state of Virginia for the murder of a man at a gas station in Manassas, located 51 kilometers southwest of Washington.

Muhammad's lawyers had argued that their client was mentally ill during his trial, and should not have been allowed to represent himself.

The Supreme Court did not give a reason for its refusal to hear Muhammed's appeal, but three of the nine justices complained that the process had been rushed because the execution date was set before the court was scheduled to discuss the case.

John Paul Stevens, Ruth Bader Ginsburg and Sonia Sotomayor said Virginia's action highlights "the perversity of executing inmates before their appeals process has been fully concluded."

Muhammad's last chance to avoid execution Tuesday is Virginia Governor Timothy Kaine, who could grant the convicted killer clemency.

Muhammad and his accomplice, Lee Boyd Malvo, killed a total of 10 people during a three-week shooting rampage in 2002 across Virginia, Maryland and Washington.

Malvo, who was 17 years old at the time of the shootings, has been sentenced to life in prison without parole in Virginia. The two men are also suspected in several murders in Alabama, Arizona and Louisiana.

Tropical Storm Ida Hits US Gulf Coast

Man walks along beach as wind from Tropical Storm Ida blows on coast near Gulf Shores, Alabama, 10 Nov 2009 Tropical Storm Ida has made landfall on the southern coast of the United States.

The National Hurricane Center in Miami says the storm came ashore early Tuesday at Dauphin in Island, in the southern U.S. state of Alabama.

The forecasters say Ida's maximum sustained winds have diminished to 75 kilometers an hour and the storm is expected to continue weakening as it moves inland.

But the storm is still producing heavy rains, with forecasters predicting it could drop as much as 20 centimeters of rain in some areas.

The governors of Florida, Alabama, Louisiana and Mississippi have declared states of emergency, and several offshore oil wells shut down production in advance of the storm. Two oil workers were plucked from a rig nearly 130 kilometers south of New Orleans Monday.

At its earlier hurricane strength, Ida triggered floods and mudslides that killed at least 130 people in El Salvador and forced thousands from their homes.

Salvadoran President Mauricio Funes has declared a national emergency. The town of Verapaz was one of the hardest hit areas, where streets were covered in mud.

Ida hit Nicaragua's Caribbean coast Thursday as a low-level hurricane, destroying homes and forcing hundreds of people to evacuate.