Financial thoughts

The Federal Reserve, which is urging Congress to let it keep its bank supervising role, may lose oversight of smaller state banks to the Federal Deposit Insurance Corp., Democratic Senator Jack Reed said.

“What seems to be emerging is the consolidation” of two Treasury bank agencies “with FDIC having some responsibility for state banks as regulator in lieu of the Fed,” Reed, a Rhode Island Democrat and a member of the Senate Banking Committee, said yesterday in a Washington interview.

Senate negotiators are working through proposals to put in place the financial rules proposed by President Barack Obama more than eight months ago, a process stalled by disagreements over the Fed’s role and consumer protection.

Lawmakers are negotiating language that may give the Fed oversight of the largest U.S. financial companies along with a new consumer unit, two Democratic congressional aides with knowledge of the talks said yesterday. The consumer proposal from Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Republican Bob Corker of Tennessee has so far failed to win lawmaker support.

Republicans and the financial-services industry oppose Obama’s Consumer Financial Protection Agency, and Dodd and Corker have scrapped the plan. Banks lobbied against the proposal, with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon calling the agency “just a whole new bureaucracy” on a December conference call with analysts.

The Senate plan under consideration would put the Fed in charge of about 20 or 30 bank holding companies, said one Democratic congressional aide who declined to be identified because the talks are private. The Treasury’s Office of the Comptroller of the Currency, which oversees national banks, and Office of Thrift Supervision would merge, Reed said.

Bernanke Setback

A loss of oversight would be a setback for Fed Chairman Ben S. Bernanke, who told the Banking Committee on Feb. 26 it would be a “grave mistake” to remove authority to regulate banks. Giving another agency the power would make it tougher for the Fed to act as the lender of last resort, he said free credit report online.

The Fed won endorsement yesterday from six Washington-based trade groups, led by the American Bankers Association. A letter to the banking committee said “it would be a mistake to limit the Federal Reserve to supervision of only larger, complex institutions headquartered in major financial centers.”

Treasury Secretary Timothy Geithner had asked the leaders to back the administration’s rules overhaul at a Feb. 25 Washington meeting. Later, groups including the Financial Services Roundtable and Securities Industry and Financial Markets Association agreed to write a letter, according to two people with knowledge of the matter, who declined to be identified because the meeting was private.

Small Bankers

The leaders then recruited the Consumer Bankers Association and Independent Community Bankers of America, which represent small banks, the people said. Both support the Fed as overseer of some state-chartered banks. The Senate legislation may give such power to the FDIC, which regulates some state-chartered banks.

A copy of the letter was sent March 2 to Michelle Smith, the Fed spokeswoman and adviser to Bernanke, the people said.

The Fed’s role emerged yesterday as senators negotiated the powers of a consumer unit at the Fed.

“Each of these pieces affects another piece in the bill,” Corker said in an interview. “Today has been by far the very best day we’ve had in the process.”

The plan for the Fed, still under discussion and may change, would abandon the single bank regulator Dodd proposed in his November draft legislation.

Dodd wanted to eliminate the OCC, which regulates national banks, and the OTS, the regulator of savings and loans, and merge their authority into a new Financial Institutions Regulatory Administration that would gain oversight powers of the FDIC and the Fed. The House passed a bill in December that merged OCC and OTS, leaving the Fed’s bank oversight powers intact.

Source

Get help finding the best life insurance rates on the internet. Comparison shop for rates online and choose the best insurance for you.

A new Illinois non-traded real investment estate trust (REIT) bought the Pleasant Hill Commons shopping center in Kissimmee for $12.4 million in cash.

Inland Diversified Kissimmee LLC, a related entity to Oakbrook, Ill.-based Inland Diversified Real Estate Trust Inc., bought the 70,642-square-foot Publix-anchored shopping center from Winter Park-based MCP Retail LLC on Feb. 18, said a filing with the U.S. Securities & Exchange Commission. MCP Retail LLC is an entity related to developer Michael Collard Properties Inc.

Lou Quilici of Inland Real Estate Acquisitions Inc. handled the transaction, said a news release.

The property is 100 percent leased, the SEC filing said, and has tenants including Tijuana Flats, Subway, Jackson Hewitt, Metro PCS, Pizza Hut, BonWorth and Fantastic Sams.

Inland Diversified Real Estate Trust filed its prospectus in August 2009 to be taxed as a REIT beginning with the tax year ended Dec flexcheck cash advance. 31. This was the firm’s second purchase and was funded by proceeds from its initial public offering, the SEC filing said. The REIT focuses on the acquisition and development of a diversified portfolio of commercial real estate assets.

The REIT is related to The Inland Real Estate Group of Companies Inc., a fast-growing buyer of retail property in the United States and one of the largest shopping center owners in North America. Inland-sponsored firms own and manage more than 113 million square feet of commercial real estate in 46 states and manage properties valued at more than $25.3 billion.

Source

Compare up to 8 cheap car insurance quotes now. We have over 1000 licensed insurers and agents within our online auto insurance comparison network.

Driven by growth in insurance services, outpatient medical care and physician services, operating income rose 13 percent or $130 million for the University of Pittsburgh Medical Center for the six-month period ending December 31, the hospital network announced on Friday.

During the same period, operating revenue rose $216 million to $4.062 billion for a 5.6 percent increase, while the operating margin for the health insurance and medical giant improved to 3.2 percent from 3 percent.

The system’s earnings before interest, depreciation and amortization were $326 million for the first half of the fiscal year, up from $292 million for the same period a year ago and on target to exceed $600 million for fiscal 2010.

The results were released during a difficult period for health care providers and as UPMC’s cost of providing free care and contributions to the community rise, said CFO Robert DeMichiei. UPMC’s cost of charity care rose 16 percent to $518 million from 2007 to 2008, the most recent period data were available.

Key metrics for the six-month period include insurance services, up 8 percent to more than 1.4 million members; outpatient revenue, up 5 percent; and physician services, up 11 percent. During the same period, UPMC’s $3 billion investment portfolio gained $228 million, for a return of 11.8 percent, said Treasurer C. Talbot Heppenstall. UPMC reported a loss of $786 million for the same period a year ago.

Separately, UPMC’s pending $1.175 billion bond refinancing will be used to substitute fixed for variable rate debt and lower interest costs, Heppenstall said. Allegheny County Councilman Charles McCullough has been in court seeking to stop the refinancing because of UPMC’s decision to close Braddock Hospital Jan. 31, but Heppenstall predicted the litigation would not be a factor.

The biggest challenges may be ahead for UPMC and other hospitals, according to Moody’s Investors Service.

In a report released last month, Moody’s maintained its negative outlook for the nonprofit health care industry overall. The outlook was revised to negative from stable in Nov. 2008 based on credit market problems.

“Over the next 12 to 18 months, we believe the relative abilities of different not-for-profit hospital management and governance teams will become more apparent as they face one of the toughest environments in decades,” the report stated.

Source

Roshni Sircar racked up nearly $20,000 in credit card debt after using a number of special purpose cheques that came with her credit card.

The 75-year-old had never used her American Express card before. But when faced with a family emergency, she began using the special offers to help her grandchildren.

She didn’t know the introductory 2 per cent interest rate was just that – a short-term "teaser" rate. "We were really in a tight spot and we used the money," Sircar said.

As her interest rate began to rise, she missed some payments. Her rate eventually jumped to 25.99 per cent. At that point, Sircar realized she couldn’t pay off her bill.

After writing to the head of Amex Canada, Finance Minister Jim Flaherty and the Star, her rate was lowered to a more manageable level. But she still feels "entrapped" by the special offer.

Banks and credit card companies often argue the popularity of credit cards represents a "democratization of credit." Yet, some experts suggest the current system is fundamentally rigged against the consumer and the merchant.

"In consumer contracts highly sophisticated corporations will often exploit consumers’ behavioural biases," Oren Bar-Gill of Harvard Law School wrote in a paper entitled Seduction by Plastic. "Competition cannot cure such exploitation. On the contrary, competitive forces compel sellers to take advantage of consumers’ weaknesses."

The federal government is facing increased pressure to regulate Canada’s credit card market and has taken steps to respond to consumers’ and retailers’ complaints. Within days, the Competition Bureau is expected to rule on two key issues that could fundamentally alter the payments-industry landscape.

The first deals with a request from the Interac Association, Canada’s non-profit debit network operator, to become a for-profit company better able to compete with Visa and MasterCard as those two multinational giants enter Canada’s $168-billion a year debit market.

The second has to do with allegations that Visa and MasterCard have abused their market dominance in the credit card market, where they hold 94 per cent of market share.

And by Jan. 18, industry members are to issue comments on Flaherty’s proposed voluntary code of conduct for the credit and debit sector. The code contains provisions that would help retailers, especially smaller ones, gain some clarity and clout in dealing with their payment processing fees.

Earlier this year, Flaherty announced new regulations aimed at protecting consumers from some of the problems that may have contributed to Sircar’s situation.

Among other things, these new rules require a "summary box" on all credit-card contracts and applications clearly outlining information about interest rates, minimum payments, annual fees and other applicable costs, including penalty charges for bounced cheques.

But while initiatives like these are helpful, experts say more could be done to help low-income Canadians. They cite innovative new card products that give consumers the power to set their own spending limits, or require Ottawa to be the guarantor on the kind of secured card offered to people consider poor credit risks.

The Canadian Bankers Association says "income is not a factor on who pays off their credit cards" in Canada.

But research by the Bank of Canada this year shows the bottom 20 per cent of earners carry a larger share of credit card debt in percentage terms than other income groups. Additionally, the lowest-income earners have the largest share of "unsecured" debt, which includes credit cards.

Canada’s banks say a multitude of cheaper options, such as low-rate credit cards and personal lines of credit, are available to those consumers who carry a balance.

Nancy Hughes Anthony, president and chief executive of the Canadian Bankers Association, estimates more than 60 low-interest-rate credit cards are available in Canada. The Financial Consumer Agency of Canada, however, recently told the Senate banking committee that some low-interest credit cards have disappeared.

And critics say low-income Canadians are often denied access to those low-rate cards because they lack sufficient assets. "They don’t have low-cost options at all," said Armine Yalnizyan, senior economist with the Canadian Centre for Policy Alternatives payday loans.

Banks do not release data about the number of low-rate cards they issue compared with the number of applications they receive, and the bankers association has no statistics on the number of Canadians with low-rate cards.

When asked about consumer eligibility earlier this year, Hughes Anthony said acceptance is "determined on a case-by-case basis."

Other alternatives, such as secured credit cards or prepaid credit cards, disadvantage consumers with unfavourable terms or high service charges, experts say.

"For low-income consumers who don’t have access to a conventional credit card, the costs go up much higher," said Michael De Santis, a researcher at the Public Interest Advocacy Centre.

Low-income consumers, those with spotty credit scores and new immigrants are often encouraged to get secured credit cards to build or repair their credit histories.

But many consumers lack sufficient funds to pay the required lump sum. That upfront cost is usually equivalent to or higher than the card’s credit limit. The bank collects that money as security but the funds do not earn the customer any interest, even if the sum remains tied up for years.

In addition, prepaid cards are more costly to use than regular credit cards. Not only must users load their own money on the card, but they are also on the hook for "significant fees," De Santis said.

Those can include upfront fees for the card to be issued, monthly maintenance fees, invoice charges, customer service fees, transaction fees, ATM fees, reloading fees and even cancellation fees.

"It is very expensive to have one of these prepaid cards in your pocket and they don’t offer any advantages over a conventional card other than the fact that they are more available to people who might not otherwise qualify," De Santis said, adding the product does not help build a credit history. "The less fortunate classes actually end up having to pay the greater amount than the more fortunate ones, which I think is a terrible irony."

The advocacy centre is urging the federal government to collaborate with the banking industry on creating a new financial product that could help low-income Canadians, new immigrants and aboriginals build financial credibility and make payments in an increasingly "digital marketplace."

It argues that eligibility "could be proportional to income level, so as to avoid a lower income becoming a barrier to build a level of creditworthiness."

That may involve a new type of secured card, where the federal government provides some security to the lender so the entire burden does not fall on cash-strapped consumers, De Santis said.

Others champion the idea of "self-directed" credit cards. Angela Littwin, an assistant professor at Harvard Law School, says such cards would allow consumers to cap their credit limits and even block the card’s acceptance at certain stores.

Merchants are also lobbying for change. Retailers want Ottawa to quickly set new ground rules for the debit market as Visa and MasterCard prepare to take on the non-profit Interac Association, whose low-cost flat fee model is the envy of the world.

Flaherty’s proposed voluntary code of conduct won praise from merchants when it was announced Nov. 18. But retailers and small businesses fear credit card firms will be pushing Ottawa during the current 60-day consultation period to water down certain key provisions.

One proposal, designed to give merchants more power in dealing with Visa and MasterCard debit, is at greatest risk, the retailers fear.

During the period when Visa and MasterCard are building their debit networks, the credit card companies plan to issue co-badged cards that also run on the more ubiquitous Interac system.

MasterCard says its new debit product will automatically run on its Maestro network, wherever it is present. Visa says it’s giving consumers the choice but merchants says Visa’s network will show up first on the PIN pad and then Interac.

Source

South Korea’s economy expanded at a faster pace than initially estimated in the third quarter, boosted by rising overseas orders for cars and semiconductors plus local spending by consumers and companies.

Gross domestic product increased 3.2 percent in the three months ended Sept. 30, compared with the 2.9 percent gain reported in October, the central bank said in Seoul today. The economy grew 0.9 percent in the third quarter from a year earlier, compared with the previous estimate of 0.6 percent.

“South Korea’s economy has benefited from relatively better exports as well as the effects of expansionary policies,” said Ryu Seung Sun, an economist at HMC Investment Securities Co. in Seoul. “Economic growth will remain relatively strong, even though the pace may weaken somewhat in coming quarters.”

South Korea has led a regional rebound with China and Singapore as companies including Samsung Electronics Co. and LG Electronics Inc. reported a jump in profits. The nation is projected to be one of the first in Asia to boost interest rates as it helps lead the region out of a slowdown caused by the global financial crisis.

LG Electronics Inc., the world’s second-largest maker of liquid-crystal-display televisions, reported third-quarter profit that beat analysts’ estimates, driven by record shipments of televisions and higher sales of appliances.

Government Spending

The central bank and the government have raised their economic forecasts for this year. Finance Minister Yoon Jeung Hyun said the economy will probably post zero growth, reversing an earlier forecast for a contraction, and President Lee Myung Bak said last month GDP may expand 5 percent in 2010.

To help prevent the economy from sliding into a recession, the central bank cut the benchmark interest rate by 3.25 percentage points between October and February to a record-low 2 percent and the government increased spending payday loans for bad credit. The benchmark Kospi stock index has risen 44 percent this year and sales at the nation’s main department stores gained the most in 14 months in October.

Exports, which account for about half of the $929 billion economy, rose for the first time in 13 months in November, a government report showed Dec. 1. Overseas shipments will increase 13 percent to $410 billion next year, boosted by demand for semiconductors, cars and display panels, the government said.

South Korea’s exports of goods gained 5.2 percent in the third quarter from the previous three months, compared with the initial 5.1 percent gain estimated in October, today’s report showed. Corporate investment in factories and equipment climbed 10.4 percent in the quarter, up from the 8.9 percent initial estimate.

Private Consumption

Private consumption rose 1.5 from the second quarter, up from the 1.4 percent earlier estimated. Manufacturing rose 9.8 percent from the second quarter compared with the initial estimate of 8.7 percent, while construction investment dropped 2 percent.

Still, there are signs economic growth may slow in coming months. Manufacturers’ confidence has slipped to the lowest level in four months due to uncertainty about the outlook for domestic demand. Consumer confidence also fell in November for the first time in eight months and factory production unexpectedly declined 3.8 percent in October from September.

South Korea’s corporate earnings may fall short of analyst estimates in 2010 as costs climb and the benefits from stimulus measures fade, according to Samsung Securities Co., the nation’s top-ranked brokerage.

Source

WaterStone Bank said it has agreed to a consent order with federal and state banking regulators to maintain minimum capital ratios that are higher than regulators typically require as a safeguard to cover the bank’s problem real estate loans.

Wauwatosa-based WaterStone (NASDAQ: WSBF) said Friday that on Wednesday it agreed to the consent order with the Federal Deposit Insurance Corporation and the Wisconsin Department of Financial Institutions. WaterStone said it also signed a stipulation and consent to a cease-and-desist order for its holding company, WaterStone Financial Inc., with the federal Office of Thrift Supervision.

WaterStone said the orders formalize a prior informal agreement the bank, its holding company and the FDIC entered in 2008. The bank and regulators have been working for the past two years to minimize the effects that the economic recession is having on the bank and its borrowers, WaterStone said.

The orders require, among other things, that the bank maintain minimum Tier 1 capital of 8 easy payday loans.5 percent of total average assets and minimum total risk-based capital of 12 percent of risk-weighted assets.

As of Sept. 30, WaterStone exceeded those levels with a Tier 1 capital ratio of 12.64 percent compared with 10.76 percent a year earlier, and a total risk-based capital ratio of 13.86 percent, compared with 12.01 percent a year ago.

Through the first nine months of 2009, WaterStone recorded a net loss of $6.24 million compared with a net loss of $27.3 million for the same period of 2008. The bank’s level of noncurrent loans to total loans increased to 6.24 percent as of Sept. 30 compared with 5.78 percent a year earlier.

WaterStone stock was down 1 cent, to $1.86, on Friday.

Source

WASHINGTON–Ford, Subaru and Volkswagen lead the insurance industry’s annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms.

The Virginia-based Insurance Institute for Highway Safety awarded its "top safety pick" on Wednesday to 19 passenger cars and eight sport utility vehicles for the 2010 model year. The institute substantially reduced the number of awards compared with 2009, because of tougher requirements for roof strength.

Ford Motor Co. and its Volvo unit received the most awards with six, followed by five awards apiece for Japanese automaker Subaru and German automaker Volkswagen AG and its Audi unit.

Chrysler Group LLC received four awards followed by two each for Honda Motor Co. and General Motors Co.

Toyota Motor Corp., BMW AG, Mazda Motor Corp. and Mitsubishi Motors Corp. were shut out in the annual IIHS review.

Ford’s recipients include the Ford Taurus and Lincoln MKS passenger cars and the Volvo S80 and C30 passenger cars and the XC60 and XC90 SUVs.

Ford said in a statement it is "committed to providing customers with safe vehicles for a broad range of real-world crash conditions.”

Subaru recorded winners with the Subaru Legacy, Outback and Impreza cars and Tribeca and Forester SUVs. Subaru was the only automaker with an IIHS winner in all four vehicle classes in which it competes.

The automaker, which has bucked the brutal U.S. sales market with a 13 per cent increase during the first 10 months of 2009, attributed its safety success to a unique engine design that sits low in the vehicle chassis and moves down and under occupants in a frontal collision.

Tom Doll, executive vice president and COO of Subaru of America, said the awards were a "tribute to the engineering that goes into Subaru products.”

Volkswagen scored with the 4-door versions of the Jetta, Passat and Golf, the Audi A3 and the Volkswagen Tiguan, a small SUV. Mark Barnes, Volkswagen of America’s chief operating officer, said the "safety of our cars is of the utmost concern, from the initial design stages all the way through the maintenance procedures at dealerships.”

Chrysler won the award for the Chrysler Sebring and Dodge Avenger sedans equipped with optional electronic stability control, the Dodge Journey midsize SUV and the Jeep Patriot with optional side thorax air bags loan until payday.

Scott Kunselman, Chrysler’s senior vice president-engineering, said the awards underscore the Auburn Hills, Mich., automaker’s “engineering capability and leadership in occupant protection.”

General Motors Co. and Honda Motor Co. both received two awards. GM was recognized for the Buick LaCrosse and the Chevrolet Malibu while Honda won for 4-door versions of the Civic with optional electronic stability control and the Honda Element.

Other winners included the Nissan Cube, the Kia Soul and the Mercedes C Class.

The vehicles are selected for best protecting motorists in front, side and rear crash tests based on Institute evaluations during the year. The vehicles are required to have electronic stability control, or ESC, to qualify for the award. Earlier this year, the Institute said vehicles would need to receive its highest score in its roof strength evaluation to qualify the safety pick designation.

"With the addition of our roof strength evaluation, our crash test results now cover all four of the most common kinds of crashes," said Institute president Adrian Lund. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety.”

The Institute awarded its top prize to 94 vehicles in 2009 and attributed the decline in awards this year to the roof strength requirement. The Honda Accord and the Ford Fusion both dropped off the list because 2010 versions didn’t earn high enough scores on the roof test.

The Toyota Camry would have made the list, the Institute said, if it had received the highest rating in rear crash protection. The Institute said the Camry’s seats and head restraints were rated marginal for protection against whiplash injuries.

–––

On the Net:

Insurance Institute for Highway Safety: http://www.iihs.org

Source

The World Series may not be over, but many fans of the defending Philadelphia Phillies are apparently giving up, leading to a plunge in the asking price for tickets being sold through ticket reselling Web sites.

Ticket search engine FanSnap reported Monday that the average price of tickets listed for sale for Game 5 in Philadelphia has fallen about 39% since Sunday night. FanSnap said there have been 2,000 tickets put up for sale during that time, swelling the supply of tickets for sale to almost 6,000.

Christian Anderson, spokesman for FanSnap, said that ticket prices for playoff games this postseason have typically edged higher as game time approaches unless there was bad weather. That’s not the case for what could be the last game of the World Series on Monday.

The price for Game 5 tickets are down an average of 60% since Friday morning. The Phillies lost games 3 and 4 to the New York Yankees on Saturday and Sunday.

Yankees fan Nathan Thompson, a physician from Manhattan, said he bought two tickets for Monday’s game at a price of $220 each early Monday. He said asking prices for the same seats in the rooftop bleacher section had been as high as $800 last week and that prices changed throughout Sunday’s game, depending on the score.

"When the Yankees went ahead, the price went down; when they Phillies tied it up, all of a sudden, the prices went back up," he said. "When we woke up this morning the prices were about half of where they were last night."

Ticket reselling site StubHub, a unit of online auction site eBay (EBAY, Fortune 500), reported similar trends. It said that the average price of a Game 5 ticket purchased on the site fell to $373 during the day Monday. That’s down 31% from the purchase price from as recently as Sunday.

Even with Cliff Lee, the Phillies’ best pitcher and winner of Game 1 of the Word Series, set to pitch Monday night, apparently many Phillies fans with tickets don’t want to risk watching the Yankees celebrate a championship at Citizens Bank Park.

The Phillies are now down three games to one in the best-of-seven series, putting the Yankees on the cusp of its first championship since 2000. 

Source

A former top executive at hedge fund firm ValueAct Capital is one of seven people charged with trading on inside information in Acxiom Corp.

Ronald Yee, who had been the San Francisco-based hedge fund firm’s chief financial officer until June 2008, was named in a civil suit filed by the Securities and Exchange Commission on Friday.

The SEC did not identify Yee’s former employer.

ValueAct, a nine-year-old firm that invests roughly $3.5 billion in undervalued securities, said it has been cooperating with the SEC since the agency began probing Yee in 2008.

The firm, which made national headlines when its co-founder Jeffrey Ubben became the chairman of Martha Stewart Living Omnimedia Inc, put Yee on administrative leave in April 2008. In June 2008 the partners accepted Yee’s request to resign.

ValueAct said it requires all employees to participate in rigorous training on how to handle non-public information and immediately told investors about the probe into Yee in 2008 and then wrote to them on Friday to detail the charges against him.

The hedge fund is not implicated in the scheme in any way and received a no-action letter from the SEC, confirming that it is not a target in the investigation, said George Hamel, ValueAct’s co-founder and chief operating officer.

Yee’s lawyer said he is innocent and will contest the charges.

The matter has drawn attention because it comes only two weeks after prosecutors charged prominent hedge fund firm Galleon Group’s founder Raj Rajaratnam with insider trading companies making payday loans.

At that time sources familiar with regulators’ insider trading probes said there would likely be more charges, but they did not give details about specific cases.

The cases are very different however. In the Galleon matter, the fund’s founder has been charged while in the Yee matter the hedge fund and its current partners have not been implicated in the scheme.

The SEC alleges that Yee, who joined ValueAct as chief financial officer in 2005, tipped off his brother-in-law, Chen Tang, who then traded on the information through personal accounts. Tang was employed at private-equity firm Friedman Fleischer & Lowe. The two men had previously founded a financial consulting firm together.

In 2007 Tang learned from Yee that ValueAct was trying to acquire Little Rock, Arkansas-based data management company Acxiom, the SEC said. Yee later found out that the deal was in jeopardy and passed the information to Tang, who then tipped his friends and family.

According to the complaint, Yee did not make any trades himself. Tang and the others used Yee’s tips to trade Acxiom’s securities and earned more than $6 million in illegal profits, the SEC said.

“Mr. Yee denies the charges against him and intends to vigorously contest them,” said Yee’s lawyer, Michael Celio, a partner at Keker & Van Nest in San Francisco. 

Read more

Most Federal Reserve policymakers believe that an economic recovery has started, although they view the turnaround as weak enough that some want the central bank to take additional steps to stimulate the economy, according to minutes of a meeting last month that were released Wednesday.

The minutes of the two-day meeting, concluded Sept. 23, were the most explicit statement yet that the Federal Open Market Committee now believes the recession that started in December 2007 is over. The committee comprises the group of Fed governors and district bank presidents who set interest rates and take other steps to spur or slow economic growth.

"Most thought an economic recovery was under way," the minutes stated. "Many participants noted that since August, they had revised up their projections for the second half of 2009 and for subsequent years."

Up to now, the Fed’s statements have been more circumspect. Its statement , released at the end of the meeting, said simply that economic readings suggest "that economic activity has picked up following its severe downturn."

This is the first time that Fed minutes explicitly said that most members believe the recession is over. However, in response to a question in an appearance at the Brookings Institution last month, Fed Chairman Ben Bernanke did say that the recession is "very likely over."

The decision on when a recession begins and ends is not up to the Federal Reserve, but instead the National Bureau of Economic Research. That group doesn’t make any sort of declaration until months after the fact, in order to take into account final readings of various economic measures such as employment, income and industrial production.

For example, the NBER didn’t declare that the recent recession had begun in December 2007 until a full year after the fact.

There is a growing consensus among outside economists that the recession is over. A survey of top forecasters by the National Association for Business Economics earlier this month found 81% believe the economy is in recovery.

Still, there was debate at the Fed’s September meeting about what to do next. There was broad agreement that the fed funds rate, the key rate used to pump money into the economy, should be kept near 0%, and that the statement should say "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

But some members wanted to increase the amount of mortgages the Fed will buy from the $1.25 trillion level that had been previously announced. The Fed is buying up those mortgages in an effort to keep mortgage rates low.

At least one member wanted to instead cut the amount of mortgages purchased before reaching that level.

The members agreed that the job market is likely to stay weak for the foreseeable future — and that is likely to keep wages from rising.

But there was a "a range of views" among members about how soon inflation would reappear as a result of trillions that the Fed has pumped into the economy in the last year.

Bernard Baumohl, executive director of the Economic Outlook Group, said he thinks there is a "vigorous debate" going on right now within the Fed as to when it should take steps to pull out the money it has pumped into the economy.

"If we’re getting signs that the recession is over and recovery is gathering steam, the Fed is going to have to move very quickly to begin to withdrawal the stimulus, or else it will sow the seeds for inflation," he said.

Even with the debate about purchases of mortgages and the threat of inflation, there appears to be general agreement that the recovery is likely to be modest.

"Despite…positive factors, many participants noted that the economic recovery was likely to be quite restrained," according to the minutes. 

Source