Key barometers in the Treasury market late Friday, compared with late Thursday. Price changes in the 10-year note and 30-year bond are per $100 invested:
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1. Bond Buyer index of 40 actively traded municipal bonds.
Monday, April 30, 2012
Euro at Risk if Spanish GDP, Slower Inflation Drive ECB Rate Cut Bets
The Euro may come under pressure as Spanish GDP data confirms the country is in recession while region-wide inflation slows, boosting ECB rate cut expectations. Talking Points Euro at Risk if Spanish GDP, Slower Inflation Drive ECB Rate Cut Bets Australian Dollar Underperforms as Traders Set Sights on RBA Meeting Spain’s Gross Domestic Product report headlines the economic calendar in European hours. Expectations call for output to shrink 0.4 percent in the first quarter from the three months through December, marking the second consecutive print in negative territory and putting the country in a technical recession. Traders are looking to the outcome in the context of the Eurozone debt crisis amid widespread fears that Spain is doomed to follow Greece down the path to insolvency. A weak reading is likely to unnerve investors fearing that an economic slump will reduce the government’s tax take and limit scope for additional austerity, derailing deficit-reduction efforts. Elsewhere, a preliminary estimate of April’s Eurozone Consumer Price Index reading is expected to show that inflation slowed to an annual rate of 2.5 percent, the lowest in eight months. Taken together with confirmation of recession in Spain, the currency bloc’s fourth-largest economy, the result may begin to plant seeds of ECB rate cuts on the horizon. Needless to say, such outcomes stand to threaten the Euro. On the issuance front, France is due to sell €8 billion in 91-, 154- and 364-day bills. As usual, markets will be monitoring average yield and bid-to-cover readings for signs of funding stress, although the short tenor of the debt on offer may somewhat limit the potential for fireworks. The Australian Dollar underperformed overnight as traders looked ahead to tomorrow’s RBA interest rate decision, where policymakers are widely expected to cut benchmark borrowing costs by 25 basis points. The day’s economic data set reinforced selling pressure. An inflation gauge from TD Securities put the annualized price growth rate at 1.9 percent in April, marking the second month below the RBA’s 2-3 percent target range. Separately, year-on-year Private Sector Credit growth slowed to 3.4 percent, the weakest in six months. A three-month low on China’s Leading Economic Index likewise undermined the Aussie amid fears that slowing conditions in Australia’s top export partner will translate into faltering growth and ultimately deeper RBA rate cuts in the month ahead. Asia Session: What Happened Trade Balance 12mth YTD (NZ$) (MAR) Hometrack Housing Survey (YoY) (APR) Hometrack Housing Survey (MoM) (APR) TD Securities Inflation (MoM) (APR) TD Securities Inflation (YoY) (APR) NBNZ Business Confidence (APR) HIA New Home Sales (MoM) (MAR) Private Sector Credit (YoY) (MAR) Private Sector Credit (MoM) (MAR) Euro Session: What to Expect Spanish GDP (Constant SA) (YoY) (1Q P) Spanish GDP (Constant SA) (QoQ) (1Q P) Euro-Zone M3 s.a. (3mth avg) (MAR) Euro-Zone CPI Estimate (YoY) (APR) Italian CPI (NIC incl. tobacco) (MoM) (APR P) Italian CPI (NIC incl. tobacco) (YoY) (APR P) Italian CPI – EU Harmonized (MoM) (APR P) Italian CPI – EU Harmonized (YoY) (APR P) France to Sell €8bn in 91-364 Day Bills Critical Levels --- Written by Ilya Spivak, Currency Strategist for Dailyfx.com To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com
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Greed may be good, but it doesn't matter to judge
By Dan Levine
SAN FRANCISCO (Reuters) - Greed does not matter when it comes to the legal battle of two Silicon Valley icons, a federal judge told jurors who are hearing the lawsuit Oracle filed against Google.
"There has been a suggestion made that greed is at work here," U.S. District Judge William Alsup said on Friday. "That doesn't matter."
His remarks served as a caution to the seven women and five men who are expected to begin their deliberations on Oracle's copyright claims next week.
Oracle is suing Google in federal court claiming the search engine giant violated its intellectual property rights to the Java programming language and is seeking roughly $1 billion in copyright damages.
The judge explained that the motives of both sides in pre-trial negotiations are irrelevant to their verdict.
Oracle contends that some of the platform Google's Android runs on, Java, violates its intellectual property. Google says it does not violate Oracle's patents and that Oracle cannot copyright certain parts of Java, an "open-source," or publicly available, software language.
Attorneys for Google have suggested that Oracle only filed a lawsuit after it decided it would not try to develop a smartphone of its own. But Oracle's final witness, its president and chief financial officer disputed that idea.
"That couldn't be further from the truth," Safra Catz testified.
The trial, expected to last at least eight weeks, has been divided into three phases: copyright liability, patent claims, and damages.
The case in U.S. District Court, Northern District of California, is Oracle America, Inc v. Google Inc, 10-3561.
(Reporting By Dan Levine; Editing by Leslie Gevirtz)
Summary Box: Yahoo expands Facebook lawsuit
LEGAL SKIRMISH: Yahoo is expanding its allegations of intellectual property theft against Facebook. In court papers filed Friday, Yahoo Inc. says Facebook's online social network is infringing on 12 of its Internet patents. That's up from the 10 alleged violations that Yahoo cited when it initiated the lawsuit March 12.
GETTING NASTIER: Yahoo denied allegations that it's also infringing on Facebook's patents and accused its rival of engaging in shady conduct. Facebook said it's perplexed by Yahoo's "erratic actions."
MORE DRAMA LOOMS: The acrimony is spilling out as Facebook prepares to raise $5 billion in a highly anticipated initial public offering of stock.
The Fed Is Making A Huge Mistake By Being More Transparent
The most highly anticipated segment of the Federal Reserve's big policy day on Wednesday ended up being the release of Fed members' future policy projections.The second such release in what is a new program of transparency, the report indicated that a few members of the Federal Open Market Committee had improved their economic forecasts and foresaw a faster onset of tighter monetary policy. Many investors interpreted this as a sign that a new, somewhat expected round of quantitative easing this year is no longer forthcoming.That said, the true change in the Committee's views appeared to be slight, with interest rights likely to rise significantly in 2014. What's more, Morgan Stanley analyst Gabriel de Kock argues that policy projections diverge from the Fed's overall assessment of future policy--"exceptionally low levels for the federal funds rate at least through late 2014"--because Committee members actually project firming sooner than that when polled alone:In contrast with the FOMC’s unchanged policy guidance, the FOMC and non-voting regional presidents’ fed funds rate forecasts shifted hawkishly on both the timing and pace of rate hikes from January. Notably, none of the meeting participants expect the first rate hike in 2016, while two more members now see the first hike in 2014. Similarly, only five see the funds rate at 0.25% at the end of 2014, suggesting that at least four of the FOMC members voting for the statement harbor some doubts about the statement’s policy guidance.That's evident from the graph of policy projections too, since it is clear that most of the seven members supporting policy firming in 2014 foresee much higher interest rates by the end of that year than we are led to believe by the Fed statement:According to de Kock, this spells big trouble for the Fed's attempts at transparency moving forward:
The disconnect between FOMC’s policy announcement and members’ fed funds rate forecasts underscores deep divisions on the FOMC.
The FOMC members’ forecasts show sustained misses on the Fed’s dual mandate, highlighting the limitations on the Fed’s ability to achieve its targets.
The FOMC has tilted more hawkishly through inaction borne of a lack of conviction.
The FOMC remains data-dependent, but uncertainty about its response to the data should mute the FX impact of incoming releases, consistent with continued noisy range trading rather than the emerging of clear trends.
True, the divergence between the official Fed story and individual committee members' policy projections is not huge, but changes from the last report to this one do suggest a much larger role for data and the markets than most investors would like. Further, if the Fed can't keep its story straight, then how can projections or outlooks be trusted?AND NOW: The Ultimate Story Of How The US Spiraled Into A Recession And Finally Pulled Itself Out >More From Business Insider
Daily ETF Roundup: XLY Jumps On Amazon Earnings, UNG Soars On Weather
Friday’s trading session saw stock uphold their bullish momentum despite a rather substantial miss in GDP. U.S. GDP for the first quarter of the year came in at 2.2, down from the anticipated 2.5. While this news would typically hammer markets, positive earnings kept the bull run alive and overshadowed this miss. The Dow closed the day with a 23 point gain while the S&P 500 jumped by a meager 0.2%; still a strong day with all things considered. Despite some volatility early in the week, stocks were finally able to post a winning week, but with earnings winding down, the next few weeks will be especially crucial [see also ETF Filings Frenzy Roundup].
Major commodities were relatively quiet on the day, as gold gained 3 points and crude tacked on about 0.3 points. For those who monitor Ag futures, corn had a very strong day, as its prices jumped by nearly 4.7% while commodity losers were lead by rough rice (-2.8%). Typically, we outline two of the most notable ETF performances on the day, with one loser and one winner. But today presented special circumstances, so this roundup will be a bit different. Below, we outline two of the biggest ETF winners on the day, as a number of funds were able to finish the session in the black [see also Forget Gold, Why Your Portfolio Needs Silver].
One of the biggest winners came from the Consumer Discretionary Select Sector SPDR (XLY) which rose by 1.2%. This fund measures the consumer discretionary sector of the U.S. and as such, as a big stake in Amazon (AMZN). Yesterday’s report from Amazon beat Street estimates, boosting confidence in consumer spending; it also boosted the stock by more than 15% for the day. It is important to note that its results showed a 35% decline from the previous earnings, but the firm had wanred the Street to expect “a big decline in its operating profit for the quarter as it plowed money into businesses that it expects will pay off in the future, like its Kindle Fire device and new centers for shipping goods” writes Nick Wingfield.
The other major ETF winner came from the United States Natural Gas Fund LP (UNG), which jumped but 3.1% for the day. Natural gas has been welcoming some much-needed momentum in recent days as the battered commodity seems to have finally found its footing. Today’s gains spawned from a weather forecast that shows a cooler-than normal Spring; this after a warmer-than average winter that dug NG’s hole in the first place. “Natural gas rose 6 cents to finish at $2.186 per 1,000 cubic feet in Friday trading. That’s up nearly 15 percent from April 19 when the price hit the lowest level in more than a decade at $1.907 per 1,000 cubic feet” writes Sandy Shore [see also 25 Ways To Invest In Natural Gas].
Follow me on Twitter @JaredCummans
Disclosure: No positions at time of writing.
Click here to read the original article on ETFdb.com.
Greed may be good, but it doesn't matter to judge
By Dan Levine
SAN FRANCISCO (Reuters) - Greed does not matter when it comes to the legal battle of two Silicon Valley icons, a federal judge told jurors who are hearing the lawsuit Oracle filed against Google.
"There has been a suggestion made that greed is at work here," U.S. District Judge William Alsup said on Friday. "That doesn't matter."
His remarks served as a caution to the seven women and five men who are expected to begin their deliberations on Oracle's copyright claims next week.
Oracle is suing Google in federal court claiming the search engine giant violated its intellectual property rights to the Java programming language and is seeking roughly $1 billion in copyright damages.
The judge explained that the motives of both sides in pre-trial negotiations are irrelevant to their verdict.
Oracle contends that some of the platform Google's Android runs on, Java, violates its intellectual property. Google says it does not violate Oracle's patents and that Oracle cannot copyright certain parts of Java, an "open-source," or publicly available, software language.
Attorneys for Google have suggested that Oracle only filed a lawsuit after it decided it would not try to develop a smartphone of its own. But Oracle's final witness, its president and chief financial officer disputed that idea.
"That couldn't be further from the truth," Safra Catz testified.
The trial, expected to last at least eight weeks, has been divided into three phases: copyright liability, patent claims, and damages.
The case in U.S. District Court, Northern District of California, is Oracle America, Inc v. Google Inc, 10-3561.
(Reporting By Dan Levine; Editing by Leslie Gevirtz)
Thursday, April 26, 2012
CNO Financial Attains a Settlement
Conseco Life Insurance Company ("Conseco Life"), a subsidiary of CNO Financial Group, Inc. (NYSE:CNO - News), reached a settlement to pursue with the Nicholas putative class action lawsuit.
The litigation comes in the wake of certain changes made last year to certain non-guaranteed elements in some of the universal life policies sold by Conseco Life prior to its takeover.
In the hearing a couple of days back, the judge considered Conseco Life’s request for a countrywide status that would act as an approval for the settlement of the claim. The court also complied with Conseco Life’s request for a stay order on any other legal action pertaining to the cost of insurance increase on the Valulife and Valuterm policies in November 2011, that are a part of Nicholas proceedings.
Even though if the court approves a go ahead on the status of a class for the purpose of settling the claim, the final approval is subject to hearing after a notice to the inforce and former policyholders under the settlement schemes.
As a consequence of this settlement, the company is expected to incur a pre-tax charge about $20 million in its Other CNO Business segment for the first quarter of 2012. Also, CNO Financial’s risk-based capital ratio will be trimmed down by 6%.
The company has scheduled the release of its first quarter results on May 1, 2012. The Zacks Consensus Estimate for the first quarter is 15 cents per share, down 15.9% from a year ago.
CNOFinancial remains committed to its expense management initiatives that help the company improve its operational efficiency supported by a sound capital position. The company also fairs well with the rating agencies.
We retain our long term Neutral recommendation on CNO Financial. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term. CNO Financial competes with AFLAC Inc. (NYSE:AFL - News) and Torchmark Corp. (NYSE:TMK - News).
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American makes its case against union contracts
NEW YORK (AP) -- Lawyers for American Airlines and its labor unions argued Monday in federal bankruptcy court over the best course for the financially troubled company.
American's lawyers said the company must make painful cuts in labor costs to survive in an increasingly competitive industry. Union lawyers suggested that there is a gentler alternative — a merger with US Airways.
American's parent, AMR Corp., has lost about $12 billion since 2001 and filed for bankruptcy protection in November. The company says it is saddled with higher labor costs than competitors and must eliminate 13,000 union jobs, freeze or terminate pension plans, curb health benefits, and change work rules.
Without union approval, American can only make those cuts — saving $1.25 billion a year — if the bankruptcy court lets it throw out the union contracts. Otherwise, American says, it can't survive.
"A restructured job is better than no job at all," said Jack Gallagher, a lawyer for American, the nation's third-biggest airline.
Once-great carriers such as Pan Am and TWA are gone. "We don't want to join them," he told Judge Sean H. Lane, who will decide whether American can throw out the union contracts.
Lawyers for unions that represent nearly 55,000 pilots, flight attendants and ground workers at American said the airline's turnaround plan is unfair and unworkable. It's endorsed only by the company's paid witnesses, said union lawyer Edgar N. James.
"There are alternatives out there that don't require these draconian cuts," he said.
The union lawyer was referring to last week's bombshell — American's unions endorsed a potential takeover bid by US Airways Group Inc., the fifth-largest U.S. carrier, which has failed in previous merger attempts with United and Delta. Union officials approved tentative contracts that would kick in if US Airways can take control, with terms including pay raises and fewer job losses.
US Airways CEO Doug Parker says he would keep both airlines' hubs and planes, stick with the American Airlines name, and create a bigger company that could compete against United and Delta. But AMR CEO Thomas Horton says he's not interested in a merger until his company finishes cutting costs in bankruptcy.
American has exclusive rights to present a restructuring plan to the court until Sept. 28. The unions and other creditors could ask the court to cut that period short if there is a legitimate alternate proposal.
Horton told American Airlines employees in a letter Monday that the US Airways announcement changed nothing. He said US Airways has its own long-standing problems, and that only American and its creditors can determine the company's future.
While it would be natural to look for "an easy way out" — a dismissive reference to letting US Airways take over — "there is no easy path back to renewal and growth and industry leadership," Horton said.
Horton has said American can bounce back on its own, with new revenue from international flying, a planned expansion at five big U.S. hubs, and orders for 460 new planes that will be more fuel-efficient and comfortable.
But to carry out that turnaround, American says, it needs relief from union work rules that limit its flexibility and drive up costs. The most important are restrictions in the pilots' contract that limit American's use of certain planes and prevent it from outsourcing flying to other U.S. airlines, which Horton wants to do. Another rule allows crews to fix seats while a plane is outside but not while it's in the hangar.
Before the hearing, union members rallied outside the courthouse a few blocks from Wall Street. They carried signs saying "Merge don't purge" and chanted "We got sold out."
The fight inside the courtroom is about more than just American. If the company gets its way, it will cement a decade-long upheaval that has seen most other large U.S. airlines use the bankruptcy process to cut wages, shed pension obligations, and eliminate cumbersome union work rules.
American is expected to take the entire week to make its case. That will be followed by a two-week break for the company and unions to try to negotiate agreements outside court. The Transport Workers Union will start voting on American's final offer next week, a spokesman said. If any of the three unions haven't settled by May 14, they will present their case, and the judge is expected to issue a decision in early June.
AMR lost more than $10 billion in the decade leading up to its Chapter 11 filing, and the losses keep piling up — another $1.7 billion in the first three months of 2012, most of it for restructuring expenses. Other major U.S. airlines, however, have returned to profitability by raising fares, imposing more fees on passengers, and by cutting labor costs.
"We're going through a major restructuring of labor relations in the airline industry," said Gary Chaison, a professor of industrial relations at Clark University in Massachusetts.
The unions, which forced American to capitulate on wages in the 1990s, have lost much of their clout. Even if they agree to concessions now, Chaison said, they'll probably be asked to give up more in a few years as the airlines keep cutting costs.
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Follow David Koenig at http://www.twitter.com/airlinewriter
Follow Scott Mayerowitz at http://www.twitter.com/globetrotscott
Mayerowitz reported from New York, Koenig from Dallas.
Judge may scrap most Toyota lawsuits from NY, Fla.
SANTA ANA, Calif. (AP) -- A federal judge in California indicated Monday that he would dismiss most New Yorkers' and Floridians' claims in class-action litigation over the unintended acceleration of Toyota vehicles, saying their claims don't fly under those states' laws.
Hundreds of lawsuits from around the country have been consolidated and put in the hands of U.S. District Judge James Selna in Santa Ana, who issued the tentative ruling.
Most plaintiffs did not actually experience the sudden acceleration problems that led to millions of recalled vehicles, but instead are claiming that Toyota owes them for lost value because of the tainted reputation of the vehicles and the possibility of dangerous acceleration.
According to City News Service, Selna said laws in New York and Florida don't allow for such claims, and he had already ruled that out-of-state plaintiffs cannot sue under California laws that are friendlier to their cases. The ruling would not affect any California plaintiffs.
It isn't clear when the judge would finalize the ruling, but if he does, it would be a major victory for Toyota Motor Corp. and its efforts to dismiss the lawsuits.
"We believe the law is clear," the automaker said in a statement. "Plaintiffs from New York and Florida who continue to operate their vehicles and do not allege to have experienced unintended acceleration or incurred an economic loss have no legally recognizable claims."
Steve Berman, a plaintiffs' attorney, argued that appellate courts have not been clear on the issue, and that the "unique" Toyota case could establish new precedent.
Berman said a court cannot ask that a vehicle owner have dangerous problems before filing a claim when the defects could arise at any moment.
"That would require someone to drive a ticking time bomb and wait for it to explode," Berman told Selna.
Wednesday, April 25, 2012
Honda appeal seeks to overturn US woman's award
TORRANCE, California (AP) -- Lawyers for the American Honda Motor company are heading back to court trying to overturn a highly publicized small claims court award to a woman who sued over the poor fuel mileage of her hybrid Honda Civic.
Honda appealed the $9,867 (€7,536) award to Heather Peters after 1,700 hybrid owners followed her example and opted out of a class action settlement designed to give some 200,000 owners of the cars between $100 and $200 each plus a rebate if they buy a new Honda.
Peters sued the giant automaker when her hybrid failed to get a promised 50 miles per gallon. Her suit was a unique end run around the class action process which she said offered too little to Honda owners and too much to lawyers. She urged Honda owners to take the small claims route as she did.
Honda's appeal of the small claims verdict is due back in court Thursday before a superior court judge who is hearing testimony from both sides in what is essentially a retrial. According to small claims rules, this is the last chance for review of the case. It cannot be appealed further.
Unlike the small claims trial, Honda has legal representation and Peters, who renewed her law license, is presenting new evidence she has discovered since she received her award. She testified in the first part of the hearing last Friday with lawyers for Honda questioning her.
The class action settlement approved by a judge last month pays owners of about 200,000 Honda Civics from model years 2003 to 2009 between $100 and $200, plus a rebate toward the purchase of a new Honda. Owners of models from 2006 to 2008 get the larger amount due to additional claims over battery defects.
The judge has valued the settlement at $170 million. Attorneys for the plaintiffs have pegged the value between $87.5 million and $461.3 million, depending largely on how many people accept rebates of up to $1,500.
The judge approved more than $8 million in plaintiff attorneys' fees in his 43-page ruling.
AMR fires opening shot in court battle with workers
By Nick Brown
NEW YORK (Reuters) - American Airlines on Monday kicked off a week-long court hearing on its bid to abandon union contracts, telling a judge that its bankrupt parent, AMR Corp, cannot survive without major concessions from its labor force.
Hundreds of lawyers, airline workers and others filled the courtroom and two overflow rooms in U.S. Bankruptcy Court in Manhattan for the start of the hearing, as other unionized workers rallied outside the courthouse.
Cordoned off by police, the workers held signs and chanted for fairer work terms and against AMR's plan to cut about 13,000 union jobs.
The hearing is AMR's chance to convince Judge Sean Lane not only that the company desperately needs labor concessions, but that its unions have unreasonably rejected prior attempts to negotiate those concessions. AMR filed for Chapter 11 in November, citing uncompetitive labor costs.
In opening statements, AMR lawyer Jack Gallagher said the company needs 20 percent across-the-board reductions in employee costs, half of which must come from medical benefits.
AMR spends three times as much annually on medical benefits as the average lower-cost carrier, like Southwest Airlines, he said.
"It's not the unions' fault we're in bankruptcy, but it's not about whose fault it is," Gallagher said. "It's about the facts of our business."
Edgar James, a lawyer for the Allied Pilots' Association, which represents about 10,000 AMR pilots, said AMR's proposed business plan is unfair, in part because AMR has not done enough to explore possible merger or consolidation options.
"What everyone believes is going to occur is they're going to get out of this bankruptcy and consolidate with someone," yet the company has told the pilots' group it has not considered that option, James said.
In an unusual step in bankruptcy, the pilots' union and two other major AMR unions on Friday said they had struck a deal with US Airways Group Inc to support a potential merger between US Air and AMR. They said the deal could save more than 6,000 jobs and are pushing AMR to consider it.
US Airways Chief Executive Doug Parker cautioned his employees in a letter on Friday that the union deal does not mean a merger is in the works. He noted that a deal would need support from the AMR creditors, management team and its board of directors.
AMR has long shunned merger interest from US Airways.
Some of AMR's expert witnesses were expected to testify on Monday afternoon, along with the company's chief restructuring officer, Bev Goulet.
After the hearing wraps up, the company and its unions have another two weeks to negotiate. If new terms are still not reached, the unions will have a chance to present their case in court in May.
Regardless of how Lane rules, AMR must keep negotiating for a consensual deal with its unions. A ruling by Lane granting AMR's request to break its contracts would allow AMR to impose its own unilateral labor terms while those negotiations go on.
The bankruptcy is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.
(Reporting By Nick Brown; editing by Carol Bishopric)
Judge: DA can subpoena NY Occupy protester tweets
NEW YORK (AP) -- An Occupy Wall Street protester can't stop prosecutors from getting his tweets, a judge has ruled in a clash over the bounds of privacy in an age of living publicly on social networks.
In a ruling punctuated with Twitter users' beloved hashtag marks, the judge said prosecutors weren't overreaching by seeking Malcolm Harris' public tweets for weeks before and months after his Oct. 1 disorderly conduct arrest on the Brooklyn Bridge, as well as the user information surrounding the Twitter account he used at the time.
"There is, in fact, reasonable grounds to believe the information sought was relevant and material to this investigation," Manhattan Criminal Court Judge Matthew A. Sciarrino Jr. wrote in a decision Friday. He also found that Harris doesn't have legal standing to challenge a subpoena directed to Twitter Inc., not him.
Harris' bid to quash the subpoena "is denied," the judge wrote, underscoring "quash" and "denied" with hashtags, which Twitter aficionados use to mark key words.
Sciarrino added, however, that he would review the material before the Manhattan District Attorney's Office sees it, in light of Harris' privacy concerns.
Prosecutors' bid for the tweets raised alarms among electronic privacy advocates, as well as a now-retired civil court judge who wasn't involved in the case.
They and Harris' lawyer said the timespan was unreasonably broad, and although the tweets were sent publicly, seeking the accompanying user information violated Harris' privacy and free association rights. The data could give prosecutors a picture of his followers, their interactions through replies and retweets, and his location at various points, said his lawyer, Martin Stolar.
"There's a whole universe of information out there that deals with the associations that Mr. Harris has," Stolar said at a court hearing in March.
"Here, there is a privacy interest in his communications with other people," he said.
Stolar said Monday that he strongly disagreed with the judge's ruling and intended to challenge it.
Prosecutors said it was fair game to go after publicly sent messages — some of which are no longer visible because newer ones crowded them out — and they might contradict Harris' contention that he thought protesters had police permission to march in the bridge roadway. He was among more than 700 people arrested there. Police said they ignored warnings to stay on a pedestrian path; many demonstrators said they didn't hear the warnings or thought officers were leading them onto the road.
"All of the tweets that we request are communications that the defendant put out there, into the world, and he has no privacy interest," Manhattan Assistant District Attorney Lee Langston said at the March hearing.
"The very purpose of Twitter is to spread this information to the entire world," Langston said.
San Francisco-based Twitter Inc. declined to comment on the judge's decision but noted that it makes a policy of notifying users about law enforcement and government requests for their information, unless the microblogging service is legally barred from doing so. The DA's office had no immediate comment.
The dispute over the subpoena has received attention from the Electronic Frontier Foundation, which defends free speech and digital rights online, and from former Manhattan civil court judge Emily Jane Goodman, who wrote about the matter in The Nation in February.
"Tapping phones may be passe, but the dangers of more modern electronic 'eavesdropping' are not," wrote Goodman, who wasn't involved in Harris' case. She retired at the end of February.
The charge against Harris is a violation, not a crime. Maintaining his innocence, he is heading toward trial in June.
Authorities in Manhattan and elsewhere increasingly avail themselves of social networking sites to build cases, and some others arrested at Occupy demonstrations in Manhattan have also said their tweets have been subpoenaed. The issue also has arisen in Boston, where the American Civil Liberties Union of Massachusetts tried to block a prosecutor's subpoena sent to Twitter for information on a user linked to Occupy Boston. A judge has ordered the information to be turned over.
___
Follow Jennifer Peltz at http://twitter.com/jennpeltz
Fed likely to keep stance on rates and bond buys
WASHINGTON (AP) -- The Federal Reserve will have plenty to say about the economy Wednesday, when its two-day policy meeting ends with a statement, updated forecasts and Chairman Ben Bernanke's latest news conference.
Whether all that information will signal any shift in its outlook or the prospect of further steps to boost the economy is far from clear.
The Fed will likely repeat its plan to keep short-term interest rates at record lows through 2014. It may also signal that it won't likely launch any new program to lower longer-term rates unless the economy weakens.
That would be a switch from three months ago, when Bernanke and his colleagues ended their January meeting with hints that they were edging closer to a third round of bond buying. The Fed's bond purchases have been intended to drive down long-term rates to encourage borrowing and spending.
But since then, signs have suggested that the U.S. economy has strengthened. And the European debt crisis looks less dire than when the year began, though France's presidential race has muddied the outlook. Those developments make a further round of Fed bond buying less likely, many economists say.
"This will be a wait-and-watch meeting," said David Jones, chief economist at DMJ Advisors. "Despite all the theatrics with a Bernanke press conference and new economic forecasts, I think we will get a very predictable outcome — no change in policy."
That would mean the Fed would retain its plan to keep its benchmark interest rate, the federal funds rate, at a record low until at least late 2014. The Fed set that target at its January meeting and left it unchanged at its March meeting.
The funds rate has been kept near zero since December 2008. That means consumer and business loans tied to that rate have also remained at super-low levels. The lower those loan rates, the more likely people and companies are to borrow and spend and invigorate the economy.
With the federal funds rate as low as the Fed can set it, the central bank has resorted to other unconventional steps to keep long-term rates down. Those rates, such as those for home loans, are set by financial markets.
The Fed has pursued two rounds of purchases of Treasury bonds and mortgage-backed securities. Those efforts have expanded its asset holdings by more than $2 trillion. And at his previous quarterly news conference in January, Bernanke said a third round of bond buying was an option that was "certainly on the table."
Bernanke and other Fed officials have recently sounded less inclined to pursue further bond purchases. But private economists expect the Fed to keep another round as at least an option. They point to the cloudy state of the economy in light of Europe's debt crisis, a potential new spike in oil prices and still-high unemployment.
"There is a lot of uncertainty out there," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "Europe is in and out of a crisis, week by week. Oil prices look good now, but are they going to stay low?"
On Friday, the government will issue its first estimate of economic growth for the January-March quarter. Many economists are predicting an annual growth rate of 2.5 percent — better than they had expected when the year began. But analysts are concerned that growth could weaken in the current quarter, reflecting payback from an unusually warm winter that boosted economic activity in the first quarter.
The Fed's updated economic forecasts will be examined to see whether officials stick to their January assessments or have grown more upbeat about growth and hiring. A brighter Fed forecast would be seen as a sign that officials will be less likely to take further steps to support the economy for fear of causing high inflation.
One Fed bond-buying program is still underway: a $400 billion program dubbed Operation Twist. Under this program, the Fed sells shorter-term securities and buys longer-term bonds, to try to push down long-term rates. That program is scheduled to end in June. Many economists think the Fed will let it end on schedule.
If the Fed signals Wednesday that Operation Twist will end, it might disappoint investors, who could react by sending stock prices lower and bond yields higher.
"I think markets have broadly discounted expectations that we will get any more Fed easing in the form of further bond purchases," said Mark Zandi, chief economist at Moody's Analytics. "But there are some investors who still have hope for further Fed actions, so an announcement of an end to Operation Twist will have a dampening effect on markets."
WPI in Patent Infringement Lawsuit
Watson Pharmaceuticals Inc. (NYSE:WPI - News) recently announced the filing of an Abbreviated New Drug Application (:ANDA) with the US Food and Drug Administration (:FDA) for a generic version of Depomed Inc.’s (NasdaqGS:DEPO - News) diabetes drug, Glumetza. The drug is used as an adjunct to diet and exercise to improve glycemic control in adults with type II diabetes.
In response, Depomed and Valeant International together filed a lawsuit against Watson Pharma in the United States District Court for the District of Delaware, to prevent the generic company from commercializing generic Glumetza before the patents expire.
Since the lawsuit was filed under the provisions of the Hatch-Waxman Act, the FDA cannot approve Watson Pharma's ANDA until 30 months from the date of Depomed receiving the notice for the ANDA filing or until the court order, whichever is earlier.
According to IMS Health, US sales of Glumetza amounted to $80 million, for the twelve months ended February 28, 2012.
Separately, Watson Pharma announced the launch of an authorized generic version of Shionogi, Inc.’s drug, Fortamet. The drug is available as an adjunct to diet and exercise to lower blood glucose in patients 17 years or older.
According to IMS Health, US sales of Fortamet came in at $82 million, for the twelve months ended February 28, 2012.
Our View
We currently have a Neutral recommendation on Watson Pharma. The stock carries a Zacks #2 Rank (Buy rating) in the short run.
We expect new generic product launches over regular intervals to help drive the company’s Global Generic segment’s sales, which climbed 46% during 2011 to $3.32 billion, driven by the generic launch of Pfizer Inc.’s (NYSE:PFE - News) Lipitor and Johnson & Johnson’s (NYSE:JNJ - News) Concerta.
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Rates on Treasury bills mixed at weekly auction
WASHINGTON (AP) -- Interest rates on short-term Treasury bills were mixed in Monday's auction with rates on three-month bills unchanged while rates on six-month bills dropped to their lowest point since February.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.080 percent, the same as last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.130 percent, down from 0.135 percent last week.
The three-month rate matched last week's rate, which was the lowest since April 2 when three-month bills averaged 0.075 percent. The six-month rate was the lowest since those bills averaged 0.125 percent on Feb. 21.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.98 while a six-month bill sold for $9,993.43. That would equal an annualized rate of 0.081 percent for the three-month bills and 0.132 percent for the six-month bills.
Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was unchanged at 0.18 percent last week, the same as the previous week.
Repsol warns potential YPF investors of lawsuits
MADRID (Reuters) - Oil major Repsol (MCE:REP.MC - News) warned it could take legal action against companies that invest in YPF after Argentina seized control of the Spanish company's energy unit last week.
Argentina expropriated the 51 percent of YPF (BUE:YPFD.BA - News) owned by Repsol, saying that the company needed to invest more to address the South American country's energy shortage.
Argentine Planning Minister Julio De Vido approached Brazil's state-run oil company Petrobras over investment in YPF last week.
Argentine officials met executives from ConocoPhillips (NYS:COP - News) earlier on Monday to discuss potential investments, a Planning Ministry statement said. Company executives left the meeting without talking to reporters.
Vido said last week he would make contact with foreign oil companies, such as ConocoPhillips, Exxon (NYS:XOM - News), and Chevron (NYS:CVX - News) to seek to attract more investment in oil.
"Repsol reserves the right to take legal action against companies' investment in YPF," a Repsol spokesman said on Monday.
Argentina needs hefty foreign investment to help develop its shale gas reserves, the third largest in the world.
European, U.S. and Mexican officials have all criticized Argentina's expropriation of YPF, the country's biggest oil company, but the effects of retaliation may be limited as Argentina in the past has failed to pay settlements stemming from international trade disputes.
The only concrete measure Spain has taken so far was to curtail multimillion-dollar imports of biodiesel from the Latin American nation.
In Luxembourg, Spanish Foreign Minister Jose Manuel Garcia-Margallo met his European Union counterparts on Monday and discussed potential measures against Argentina, which has said it will not pay Repsol the full price for YPF.
The minister said he had discussed measures such as ending trade benefits to Argentina and had received support from his counterparts.
However, Margallo said the government wanted to negotiate with Argentina's government. "We keep saying that the best thing that could happen is for us to reach a negotiated solution...and we have asked some of our European and Latin American partners to act as intermediaries in this matter to avoid a dispute, a clash which is bad for Spain, Argentina and Europe," he said.
Earlier on Monday, a source told Reuters Spain considered restricting Argentine soybean meal imports last week to retaliate against the South American country's seizure of Spanish-owned energy company YPF (BUE:YPFD.BA - News), but rejected the move in the end.
Argentina is the world's third biggest exporter of soybean meal, which is an essential source of protein in animal feed, and Spain is Europe's biggest pig feed producer.
The European Parliament on Friday urged the executive European Commission to consider reprisals against Argentina, although it would need backing from European Union countries and the World Trade Organisation to do so.
No swift action by the EU against Argentina is expected, as Europe's trade ministers would also have to consider any proposals and, ultimately, it would be up to the European Commission to decide on sanctions.
Karel De Gucht, the European Union's trade commissioner, wrote to Argentina last week to express the bloc's "serious concerns about the overall business and investment climate in Argentina," singling out the YPF takeover and import curbs for criticism.
"The EU keeps open all possible options to address this matter," his letter read.
Also last week, the European Parliament urged the Commission to consider reprisals such as the suspension of trade benefits, mirroring a recent decision by Washington.
(Reporting By Fiona Ortiz, Tracy Rucinski, Martin Roberts and Sarah Morris; Editing by David Cowell and Carol Bishopric)
Tuesday, April 24, 2012
Survey: Mortgage Foreclosure Scams Surge
Not only is America's foreclosure crisis still going strong, it now comes with even more fraud and deception.
First-time foreclosure starts--default notices or scheduled foreclosure auctions--were up 7 percent from February to March, the third straight monthly increase according to foreclosure website RealtyTrac.
While those numbers are troubling for most, for scammers, it means a fresh supply of potential prey. With heightened media coverage surrounding the recent national mortgage settlement and refinements to government assistance programs, experts say selling "the schtick" has only become easier for criminals.
[See today's best photos.]
The scams can be as simple as someone posing as a homeowner's bank, offering to renegotiate or refinance a mortgage, or as complex as an entire website set up to trick borrowers into forking over cash to a seemingly legitimate organization that promises to work with a lender or servicer to save a borrower's home.
"It's absolutely fertile ground for these scam organizations," says Josh Fuhrman, senior vice president of community affairs for the Homeownership Preservation Foundation, a nonprofit organization dedicated to helping distressed homeowners.
"These are not your average everyday street thugs--the scam organizations are very sophisticated and as they see new programs pop up, they're mimicking these programs."
"It doesn't take [scam organizations] long to figure out where that opportunity is, because those programs get a lot of press and media and they quickly pop up pages on the Internet and solicit borrowers," he adds.
Consequently, reported mortgage foreclosure scams surged nearly 60 percent over the past year, according to the HPF's estimates, with about half of complaints involving scammers claiming to be attorneys or offering specialized "legal services."
"People who are in desperate situations, they kind of grasp at straws," Fuhrman says. "When they see these kinds of organizations, they will contact them in hopes that they might be able to find a better answer and unfortunately, they're just going to get scammed."
[Read: The Political Fight Over Principal Reduction.]
Fuhrman estimates his organization receives about 3,000 calls a month from homeowners who believe they've been a victim of a scam. Callers lose about $2,500 on average, he says.
"[Scammers] really prey on these vulnerable people and oftentimes they're taking that very last amount of money and hope away from them," he adds.
But there are red flags consumers can watch out for when trying to determine whether or not an organization is legit. First, homeowners should never have to pay anything up front for a loan modification or information on how to negotiate with their lender, says Roy Oppenheim, whose Florida-based law firm Oppenheim Law has handled more than 1,000 mortgage and foreclosure fraud cases over the past 5 years.
"If you're paying upfront to a non-lawyer who's claiming they can modify your loan, that's a big scam," Oppenheim says.
Furhman agrees: "You should never have to pay anything upfront," he says. "There are housing counselors that provide the very same information and support and impact for free."
Fuhrman also cautions borrowers to stay away from any program that guarantees an outcome.
"That's usually a tip that it's a scam organization, because nobody can guarantee an outcome except the investor or servicer," he says. "If they're really aggressive and trying to force a decision on the spot, that's also usually a tip that it's a scam organization."
While it's unlikely those who are duped will get their money back, they can still reach out to the HPF for help. Their call could actually help others, Fuhrman says, since HPF submits all of its fraud reports to a national database accessible by federal enforcement agencies.
[Read: Consumer Watchdog Agency Takes on Mortgage Servicers.]
"They have access to that information and then try to shut down these scam organizations," Fuhrman says.
Still, while a flourishing number of small-time scam operations have cost American homeowners a pretty penny, it pales in comparison to the damage unleashed by banks who threw the rule of law out the window with robo-signing, some critics say.
"Robo-signing was a scam 1000 times bigger in proportion to all these little scams that you're talking about," Oppenheim says. "The real perpetrators were the banks where they deliberately cut corners and the corners they were cutting were the constitutional rights of homeowners."
Meg Handley is a business reporter for U.S. News & World Report. You can follow her on Twitter, Facebook, or Google+.
You can also reach her at mhandley@usnews.com.
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Treasury weighs sale of money-losing bonds
Would you pay more for a Treasury security than it's worth?
The U.S. Treasury Department is betting yes. And it's mulling an odd idea -- whether to begin offering securities on the primary market at negative yields. For example, an investor might pay $1,010 for a $1,000 Treasury bill. The result: Investors get back less money than their original investment when they hold the Treasury to maturity.
The Treasury Department plans to make its final decision by May.
Why is the government considering this far-fetched tactic? Treasuries already have sold at negative yields on the secondary market, where investors buy and sell securities with other investors. But currently, the government can't sell its own negative-yielding bonds in primary markets.
The result: The Treasury is leaving money on the table, says Paul Jacobs, a Certified Financial Planner at Palisades Hudson Financial Group in Atlanta.
That's why the Treasury is considering the sale of negative-yielding securities. The government would be paid by investors to finance the massive government debt -- $15.7 trillion in mid-April.
"Negative yields are a smart way for the Treasury to be borrowing," adds Brian Evans, founder of Everett, Wash.-based Madrona Funds, which offers exchange-traded funds.
Negative-yielding securities are nothing new. On the heels of the financial crisis in 2008, bond yields in the secondary market dipped into negative territory, and they've returned there off and on.
"Negative yields are a sign of the times," says Aaron Smith, a senior economist at Moody's Analytics. "People want to park money in Treasuries and have quick access."
There's usually demand when people are fearful, Evans says. Last year, skittish investors returned to Treasuries, even negative-yielding bonds, as they fled European investments.
But beware of being driven by fear when investing, Evans says. A negative-yielding bond has no possibility of upside and lots of downside, he says. "You're guaranteed to lose principal and not keep pace with inflation," Evans says.
For example, if interest rates rise, your Treasury security could sink even further into the red on the secondary market.
There are better choices. Besides Treasuries, money already is flocking to short-term investments, says Donald Cummings, founder of Blue Haven Capital in Geneva, Ill. The reason: Investors are overly worried about rising interest rates, he says. Staying on the short end of the maturity curve helps avoid losses because bond prices decline when interest rates rise.
Before parking your money, consider your liquidity needs, Cummings says. Bank CDs and money market accounts are usually safe -- and sometimes higher-yielding -- alternatives to Treasuries, and they're insured up to $250,000 per depositor. Meanwhile, three-month Treasuries were yielding only 0.09 percent as of mid-April.
Be sure to avoid investing in long-term Treasury bonds, Jacobs says. These bonds can tie up your money in low-yielding investments when interest rates start rising again.
As for negative-yielding securities, put them at the bottom of your list, Evans says.
More From Bankrate.com
NY AG claims fraud by NYC leasing company
ALBANY, N.Y. (AP) -- New York Attorney General Eric Schneiderman on Monday sued a company that leases credit card machines to small businesses, claiming Northern Leasing Systems Inc. fraudulently attempted to drain more than $10 million from 100,000 former customers with expired leases.
The attorney general's office said the Manhattan-based company kept at least $3.5 million from the scheme launched in March 2011, while disguising it by working through a shell company called SKS Associates LLC. The complaint also names Northern Leasing affiliates Lease Finance Group LLC, MBF Leasing LLC, Golden Eagle Leasing LLC and Lease Source-LSI LLC all operating from the same address.
"These companies engaged in a series of deceptions to squeeze unauthorized fees out of their former customers up to a decade after their contracts expired," Schneiderman said.
The lawsuit filed in state Supreme Court in Manhattan seeks restitution, disgorgement of profits, penalties and fees. Schneiderman says the investigation was prompted by more than 70 complaints, and the company claimed it was collecting taxes and administrative fees previously unpaid.
"The taxes and fees in question were clearly called for in the lease agreement with our customers," Northern Leasing said Monday. "The company looks forward to demonstrating this to the satisfaction of everyone concerned. We have always prided ourselves on the fairness of our business practices."
The attorney general's complaint noted at least two class-action lawsuits and hundreds of complaints against Northern Leasing alleging predatory sales practices and deceptive lease agreements from customers, many of which are sole proprietors or mom-and-pop retailers. Leases typically had four-year terms with automatic monthly payments that required customers to give their checking account and bank routing numbers.
"Ultimately, over 77 percent of the amounts sought by SKS were not even taxes at all but merely alleged 'fees' related to the taxes," the complaint said. "Respondents debited former customers with expired contracts, including many customers who had received releases from their contracts when they executed buyout options to purchase the equipment."
Northern Leasing describes itself as an established provider of third-party equipment leasing services that enable business owners to finance point-of-sale and other key equipment components, that it also provides financing for equipment and leasing, and was established in 1991.
Testimony shows MF Global trustee to seek civil fines
By Nick Brown
NEW YORK (Reuters) - The trustee for failed commodities brokerage MF Global Inc plans to tell a Congressional committee on Tuesday he supports civil fines for executives when their commodities brokerages lose customer money, even without proof they knowingly broke rules.
James Giddens said MF's collapse was due in part to lack of supervision, according to a copy of his planned testimony to the U.S. Senate Committee on Banking, Housing & Urban Affairs, obtained by Reuters.
Giddens is the trustee tasked with recovering as much money as possible for former MF Global customers. The company collapsed in October after revealing exposure to risky European debt and with a huge shortfall in client accounts.
According to a February report from Giddens, the estimated $1.6 billion shortfall resulted from MF Global workers commingling customer funds with the firm's own cash, a violation of a rule segregating client money from corporate assets.
While investigators have not yet brought charges alleging criminal intent, civil fines do not require intent.
"Where there is a shortfall in customer funds, Congress should consider making the officers and directors of the company accountable and personally and civilly liable for their certifications," Giddens' testimony says.
Giddens has said separately he may bring civil lawsuits against executives for breach of fiduciary duty and other alleged violations.
According to his testimony, the trustee will also say he supports a rule change that would require commodities brokers to hold an excess of customer funds in segregation in case of emergency.
Such a rule "could help ensure that there is a sufficient cushion at all times," according to the testimony.
Giddens also supports setting up a protection fund for commodities customers, similar to the Securities Investor Protection Corp, an industry-funded insurance program to protect customers of failed securities firms.
It could be generally affordable as most commodities traders hold small accounts, Giddens' testimony says.
"The liquidation of MF Global Inc. would have played out differently had there been even a modest protection fund for commodities customers," the testimony says.
Giddens and several regulators, including Commodity Futures Trading Commissioner Jill Sommers and CME Group Inc Executive Chairman Terrence Duffy, are testifying on Capitol Hill on Tuesday.
Louis Freeh, the trustee in charge of recovering money for creditors of MF Global's parent company, is also slated to testify.
Giddens plans to push support for an idea to require commodities brokers to segregate the funds of clients who trade on foreign exchanges, and a rule that would require commodities traders to meet certain suitability requirements, according to testimony.
(Editing by Paul Tait)
The next health care overhaul? Look to employers
WASHINGTON (AP) -- If the Supreme Court strikes down President Barack Obama's health care law, employers and insurance companies — not the government — will be the main drivers of change over the next decade and maybe even longer.
They'll borrow some ideas from Obamacare, and push harder to cut costs.
Business can't and won't take care of America's 50 million uninsured, but for the majority with coverage, here's what experts say to expect:
— Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles, the amount you pay out of pocket each year before insurance kicks in. Traditional workplace insurance will lose ground to high-deductible plans with tax-free accounts for routine medical expenses, to which employers can contribute.
— Increasingly, smokers will face financial penalties if they don't at least seriously try to quit. Employees with a weight problem and high cholesterol are next. They may get tagged as health risks and nudged into diet programs.
— Some companies will keep the health care law's most popular benefit so far, coverage for adult children until they turn 26. Others will cut it to save money.
— Workers and family members will be steered to hospitals and doctors that can prove to insurers and employers that they deliver quality care. These networks of medical providers would earn part of their fees for keeping patients as healthy as possible, similar to the "accountable care organizations" in the health care law.
— Some workers will pick their health plans from a private insurance exchange, another similarity to Obama's law. They'll get fixed payments from their employers to choose from four levels of coverage: platinum, gold, silver and bronze. Those who pick rich benefits would pay more. It's an approach that Rep. Paul Ryan, R-Wis., the GOP budget leader, also wants to try with Medicare.
"Employers had been the major force driving health care change in this country up until the passage of health reform," said Tom Billet, a senior benefits consultant with Towers Watson, which advises major companies. "If Obamacare disappears ... we go back to square one. We still have a major problem in this country with very expensive health care."
Republican proposals for replacing the health care law will help some businesses and individuals, but aren't likely to solve the problem of the uninsured because of the party's opposition to raising taxes. The GOP alternative during House debate of Obama's law would have covered 3 million uninsured people, compared with more than 30 million under the president's plan.
After the collapse of then-President Bill Clinton's health care plan in the 1990s, policymakers shied away from big health care legislation for many years. Many expect something similar to happen if the Supreme Court invalidates Obama's Affordable Care Act.
Starting in 2014, the law requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.
The law's opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce. A decision is expected in late June.
The federal insurance mandate is modeled on one that Massachusetts enacted in 2006 under then-Gov. Mitt Romney. That appears to have worked well, but it's unlikely states would forge ahead if the federal law is invalidated because health care has become so politically polarized. Romney, the likely Republican presidential nominee, says he'd repeal Obamacare if elected.
That would leave it to employers, who provide coverage for about three out of five Americans under age 65.
"With or without health care reform, employers are committed to offering health care benefits and want to manage costs," said Tracy Watts, a senior health care consultant with Mercer, which advises many large employers. "The health care reform law itself has driven employers, as well as the provider community, to advance some bolder strategies for cost containment."
First, employers would push harder to control their own costs by shifting more financial responsibility to workers.
Data from Mercer's employer survey suggests that a typical large employer can save nearly $1,800 per worker by replacing traditional preferred provider plans with a high-deductible policy combined with a health care account. "That is very compelling," said Watts.
It won't stop there. Many employers are convinced they have to go beyond haggling over money, and also pay attention to the health of their workers.
"As important as it is to manage the cost of medical services and products, and eliminate wasteful utilization, there has been a strong recognition that ultimately healthier populations cost less," said Dr. Ian Chuang, medical director at the Lockton Companies, advisers to many medium-size employers. His firm touts programs that encourage employees to shed pounds, get active or quit smoking.
Employer health plans were already allowed to use economic incentives to promote wellness, and the overhaul law loosened some limits.
A Towers Watson survey found that 35 percent of large employers are currently using penalties or rewards to discourage smoking, for example, and another 17 percent plan to do so next year. The average penalty ranges from $10 to $80 a month, but one large retailer hits smokers who pick its most generous health plans with a surcharge of $178 a month, more than $2,100 a year.
Overall, one of the most intriguing employer experiments involves setting up private health insurance exchanges, markets such as the health care law envisions in each state. Major consulting firms such as Mercer and Aon Hewitt are developing exchanges for employers.
As under the health care law, the idea is that competition among insurers and cost-conscious decisions by employees will help keep spending in check. Aon Hewitt's exchange would open next January, with as many as 19 companies participating, and some 600,000 employees and dependents.
"The concept of an exchange does not belong to Obamacare," said Ken Sperling, managing the project for Aon Hewitt. "We're borrowing a concept that was central to the health care law and bringing it into the private sector. Whether the law survives or not, the concept is still valid."
Google's Schmidt set to testify in smartphone trial
By Dan Levine
SAN FRANCISCO (Reuters) - Google's former chief executive, Eric Schmidt, is slated to testify on Tuesday as Oracle's final witness in the first part of a high stakes trial over smartphone technology, attorneys said in court.
Oracle sued Google in August 2010, saying Google's Android mobile operating system infringes its copyrights and patents for the Java programming language. Google countered that it does not violate Oracle's patents and that Oracle cannot copyright certain parts of Java, an "open-source," or publicly available, software language.
The trial, expected to last at least eight weeks, has been divided into three phases: copyright liability, patent claims, and damages. The first phase over copyright began last week, with both Oracle Chief Executive Larry Ellison and Google CEO Larry Page taking the stand.
In court on Monday, attorneys for both Oracle and Google confirmed that Schmidt would appear on Tuesday, after Google's Android chief, Andy Rubin, completes his testimony.
Schmidt was Google's CEO for 10 years before assuming the role of executive chairman last year. He previously worked as chief technology officer at Sun Microsystems, which developed Java. Oracle acquired Sun for $7.4 billion in 2010.
Schmidt is expected to testify about negotiations with both Sun and Oracle over Java, along with his awareness of Sun's Java licensing practices due to his tenure there, according to a witness list filed in court.
Early in the case, estimates of potential damages against Google ran as high as $6.1 billion. But Google successfully narrowed Oracle's patent claims and reduced the possible award. Oracle is seeking roughly $1 billion in copyright damages.
After Schmidt, Oracle is expected to rest its copyright presentation, and Google will then have an opportunity to present witnesses. The jury will deliberate solely on copyright liability before moving on to hear evidence about patent infringement.
U.S. District Judge William Alsup may also decide some of the copyright issues. However, Alsup has not yet formally ruled on which questions will ultimately be sent to the jury and which ones he will decide.
The case in U.S. District Court, Northern District of California, is Oracle America, Inc v. Google Inc, 10-3561.
(Reporting By Dan Levine; Editing by Phil Berlowitz)
US Dollar Index at Risk Ahead of 9900 Despite Less Dovish Fed
The Dow Jones FXCM Dollar Index is markedly weaker at the close of North American trade as European currencies advanced at the expense of the greenback. Key levels to watch heading into Asia Pacific trade.
The greenback is markedly weaker at the close of North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) off by 0.57% on the session after moving a full 115% of its daily average true range. Equity markets were mixed at the close as headlines out of Europe and mixed US economic data weighed on stocks with the S&P and NASDAQ off by 0.05% and 0.76% respectively while the Dow climbed higher by 0.56%. Remarks made by Cleveland Fed President Sandra Pianalto were surprisingly less dovish than expected with the central banker citing the need for the Fed to take “balanced approach” to an exit strategy while noting that the economy continues to display, “forward momentum.” Despite the remarks from Pianalto, a known dove, the dollar remained on the defensive with its European counter-parts outperforming early in the week. The dollar closed back below the 61.8% Fibonacci extension taken from the August 1st and October 27th troughs at 9945. The index has continued to straddle this level for the past few sessions with key daily support seen at the relative three way confluence of the 50 & 100-day moving averages and the 9900 support level. This level remains paramount for the greenback with a break below eyeing support targets at the 50% extension at 9850. Daily topside advances are limited by channel resistance dating back to the 2012 high, currently just above the psychological 10,000 level. Note that the relative strength index continues to trade within the confines of a descending channel with a topside break needed to dispel further dollar weakness. 
An hourly chart shows the index trading back in the confines of a descending channel formation after briefly dipping below channel support late last week. A break below this formation eyes subsequent floors at 9900, 9875, and the 50% extension at 9850. Interim resistance stands at the key 61.8% extension at 9945 backed by 9975 and channel resistance. A breach above the 10,000 mark shifts our focus higher with such a scenario eyeing primary objectives at 10,040 and the 78.6% extension at 10,080. Look for the dollar to take cues off broader risk trends as the European crisis comes back into focus with a substantial shift into risk aversion likely to offer ample support for the reserve currency. 
The greenback declined against three of the four component currencies highlighted by a 0.58% decline against the Japanese yen. The USD/JPY has remained under pressure since last week when the BoJ yielded no plans to further ease policy. Risk aversion flows have also continued to support the low yielder as traders flock into so called “haven” assets such as the yen, the greenback, and US Treasuries. For complete USD/JPY scalp targets refer to today’s Winners/Losers Report. The Australian dollar was the weakest performer of the lot with a decline of 0.16% on the session. Although the greenback saw broad-based losses against its European counterparts like the pound, the euro and the swissie, commodity backed currencies remained on the defensive with the aussie, the kiwi, and the cad all closing weaker on the session. Global growth concerns continue to limit advances in the commodity bloc with the greenback well supported in the interim. Traders will be closely eyeing the minutes from the most recent RBA interest rate decision with our medium-term bias on the aussie remaining weighted to the downside. Tomorrow’s economic docket is highlighted March housing starts, building permits, manufacturing production and industrial production data. Traders will be closely eying the housing data as the sector continues to drag on the economy with housing starts expected to rise to 1.0% m/m, up from a previous contraction of 1.1% m/m. Building permits are expected to remain under pressure with consensus estimates calling for a decline of 0.6% m/m, down from a previous gain of 5.1% m/m. We remain neutral on the greenback at these levels while noting that our longer-term outlook remains weighted to the topside. However in light of recent price action, further declines in the index are likely with such a scenario to offer favorable long entries. Upcoming Events Manufacturing Production (MAR) ---Written by Michael Boutros, Currency Strategist with DailyFX.com Join Michael on Tomorrow morning for a Live Scalping Webinar at 1230GMT (8:30ET) To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex for the latest charts and commentary To be added to Michael’s distribution list, send an email with the subject line “Distribution List”
The greenback is markedly weaker at the close of North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) off by 0.57% on the session after moving a full 115% of its daily average true range. Equity markets were mixed at the close as headlines out of Europe and mixed US economic data weighed on stocks with the S&P and NASDAQ off by 0.05% and 0.76% respectively while the Dow climbed higher by 0.56%. Remarks made by Cleveland Fed President Sandra Pianalto were surprisingly less dovish than expected with the central banker citing the need for the Fed to take “balanced approach” to an exit strategy while noting that the economy continues to display, “forward momentum.” Despite the remarks from Pianalto, a known dove, the dollar remained on the defensive with its European counter-parts outperforming early in the week. The dollar closed back below the 61.8% Fibonacci extension taken from the August 1st and October 27th troughs at 9945. The index has continued to straddle this level for the past few sessions with key daily support seen at the relative three way confluence of the 50 & 100-day moving averages and the 9900 support level. This level remains paramount for the greenback with a break below eyeing support targets at the 50% extension at 9850. Daily topside advances are limited by channel resistance dating back to the 2012 high, currently just above the psychological 10,000 level. Note that the relative strength index continues to trade within the confines of a descending channel with a topside break needed to dispel further dollar weakness. An hourly chart shows the index trading back in the confines of a descending channel formation after briefly dipping below channel support late last week. A break below this formation eyes subsequent floors at 9900, 9875, and the 50% extension at 9850. Interim resistance stands at the key 61.8% extension at 9945 backed by 9975 and channel resistance. A breach above the 10,000 mark shifts our focus higher with such a scenario eyeing primary objectives at 10,040 and the 78.6% extension at 10,080. Look for the dollar to take cues off broader risk trends as the European crisis comes back into focus with a substantial shift into risk aversion likely to offer ample support for the reserve currency. The greenback declined against three of the four component currencies highlighted by a 0.58% decline against the Japanese yen. The USD/JPY has remained under pressure since last week when the BoJ yielded no plans to further ease policy. Risk aversion flows have also continued to support the low yielder as traders flock into so called “haven” assets such as the yen, the greenback, and US Treasuries. For complete USD/JPY scalp targets refer to today’s Winners/Losers Report. The Australian dollar was the weakest performer of the lot with a decline of 0.16% on the session. Although the greenback saw broad-based losses against its European counterparts like the pound, the euro and the swissie, commodity backed currencies remained on the defensive with the aussie, the kiwi, and the cad all closing weaker on the session. Global growth concerns continue to limit advances in the commodity bloc with the greenback well supported in the interim. Traders will be closely eyeing the minutes from the most recent RBA interest rate decision with our medium-term bias on the aussie remaining weighted to the downside. Tomorrow’s economic docket is highlighted March housing starts, building permits, manufacturing production and industrial production data. Traders will be closely eying the housing data as the sector continues to drag on the economy with housing starts expected to rise to 1.0% m/m, up from a previous contraction of 1.1% m/m. Building permits are expected to remain under pressure with consensus estimates calling for a decline of 0.6% m/m, down from a previous gain of 5.1% m/m. We remain neutral on the greenback at these levels while noting that our longer-term outlook remains weighted to the topside. However in light of recent price action, further declines in the index are likely with such a scenario to offer favorable long entries. Upcoming Events Manufacturing Production (MAR) ---Written by Michael Boutros, Currency Strategist with DailyFX.com Join Michael on Tomorrow morning for a Live Scalping Webinar at 1230GMT (8:30ET) To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex for the latest charts and commentary To be added to Michael’s distribution list, send an email with the subject line “Distribution List” DailyFX provides forex news on the economic reports and political events that influence the currency market.
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Monday, April 23, 2012
Fed tries to steer clear of controversial bond buys
By Pedro Nicolaci da Costa
WASHINGTON (Reuters) - The U.S. Federal Reserve is independent but it does not exist in a vacuum, as waning appetite at the central bank for contentious bond purchases suggests.
Minutes from the Fed's March meeting released this month showed support thinning for further bond purchases. Officials are unlikely to develop any more appetite for them by their meeting next week, despite disappointing March jobs figures.
Policymakers have been heartened by patches of better economic data that raised hopes for solid growth this year, which helps explain their reticence toward further monetary stimulus.
"The state of the economy doesn't argue for them to do more stimulus but it also doesn't warrant them doing less," said Ann Owen, a former Fed economist now at Hamilton College in Clinton, New York.
Officials are also leery of a barrage of anti-bond-buying sentiment both at home and abroad, with Republicans criticizing the Fed for weakening the dollar and developing countries arguing that the weaker currency gives U.S. exporters an unfair advantage.
Even within the Fed, hawks are making plenty of noise, not only about the possible detrimental effects of further quantitative easing, but also about the likely need to begin raising interest rates soon. For some, that means within months.
"A number of officials are very vocal in their expectations of tighter policy sooner than later," said Tim Duy, an economics professor at the University of Oregon and author of a popular blog on the Fed. "I don't think they would be so vocal if they thought there was likely to be a policy shift (in the opposite direction) in the near term."
That minority chorus diverges sharply from the broader message coming from the policy-setting Federal Open Market Committee. Officials will likely hold to that message at their April 24-25 gathering: official borrowing costs look set to remain near zero until at least late 2014.
That is a timetable Janet Yellen, the Fed's influential vice chair, staunchly defended in a speech last week. Her strong support for Fed rates guidance, the latest step in an effort to increase policy transparency, suggests the central bank may rely in shifting that goalpost back and forth as its primary policy tool until it decides on more decisive action - either further asset purchases or the start of a policy tightening.
The latest Reuters poll of primary dealers - banks that do business directly with the Fed - found that 11 of 15 still believe the central bank eventually will resort to a third round of bond buys or, in market parlance, QE3. (FED/R)
The U.S. economy expanded at a 3 percent annual rate in the last three months of 2011 but is expected to have slowed in the first quarter. Unemployment came down rather quickly, from 9.1 percent last summer to 8.2 percent in March, yet analysts and Fed officials believe further progress will be tougher to achieve.
BELLS AND WHISTLES
With interest rates close to zero, the Fed has - as one trader put it - come to rely on a lot of "bells and whistles" to influence the economy.
The April meeting is a case in point. The Fed will release its usual policy statement at noon, likely making only small tweaks to its assessment of the economic backdrop.
It will then release an update of its quarterly economic forecasts, as well as an outline of policymakers' individual estimates for when interest rates should be raised.
In addition, Fed Chairman Ben Bernanke will hold a news conference at which he will be bombarded with questions about the prospect for further easing.
He is likely to keep his options open. The Fed appears to be taking a wait-and-see approach, trying to gauge whether the relatively brighter economic signs of recent months prove lasting.
The central bank's subsequent policy meeting in June may prove more critical. Its most recent effort to keep down long-term rates by selling short-term securities and buying longer dated ones is set to expire at the end of June.
Atlanta Federal Reserve Bank President Dennis Lockhart, a policy centrist and 2012 FOMC voting member, told reporters last week the Fed would watch the bond market closely as the program ends to see if yields are pressured higher. But he added that the bar remains high for another round of monetary easing.
(Reporting by Pedro da Costa; Editing by Dan Grebler)
Fed solicits bids from eight banks for Maiden Lane III assets
NEW YORK (Reuters) - The New York Federal Reserve said on Wednesday it has asked eight dealers to bid on assets from its Maiden Lane III portfolio, which was created during the bailout of insurer American International Group (AIG).
Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley and Nomura have been invited to submit bids for the assets, "based on the strength of their expressions of interest" in the bonds, the Fed said in a statement on its website.
BlackRock Solutions, the investment manager for the Maiden Lane portfolio, will conduct a bid process for the bonds, with all bids due on April 26, though there is no fixed timetable for the sales, the Fed said.
The Fed will decide whether to sell the assets based on the strength of the best bid, it said.
Maiden Lane III grew out of the purchase of $29.3 billion in collateralized debt obligations from certain counterparties to an AIG unit.
The Fed completed the sale of all the remaining securities from its Maiden Lane II portfolio in February, which had $20.5 billion worth of risky mortgage bonds owned by several AIG insurance subsidiaries.
The New York Fed held three auctions to sell the assets from Maiden Lane II. Credit Suisse Group AG bought roughly $13 billion worth of the Maiden II bonds, while Goldman Sachs purchased about $6.2 billion.
(Reporting By Karen Brettell and Richard Leong, editing by Dave Zimmerman)
Honda appeal seeks to overturn US woman's award
TORRANCE, California (AP) -- Lawyers for the American Honda Motor company are heading back to court trying to overturn a highly publicized small claims court award to a woman who sued over the poor fuel mileage of her hybrid Honda Civic.
Honda appealed the $9,867 (€7,536) award to Heather Peters after 1,700 hybrid owners followed her example and opted out of a class action settlement designed to give some 200,000 owners of the cars between $100 and $200 each plus a rebate if they buy a new Honda.
Peters sued the giant automaker when her hybrid failed to get a promised 50 miles per gallon. Her suit was a unique end run around the class action process which she said offered too little to Honda owners and too much to lawyers. She urged Honda owners to take the small claims route as she did.
Honda's appeal of the small claims verdict is due back in court Thursday before a superior court judge who is hearing testimony from both sides in what is essentially a retrial. According to small claims rules, this is the last chance for review of the case. It cannot be appealed further.
Unlike the small claims trial, Honda has legal representation and Peters, who renewed her law license, is presenting new evidence she has discovered since she received her award. She testified in the first part of the hearing last Friday with lawyers for Honda questioning her.
The class action settlement approved by a judge last month pays owners of about 200,000 Honda Civics from model years 2003 to 2009 between $100 and $200, plus a rebate toward the purchase of a new Honda. Owners of models from 2006 to 2008 get the larger amount due to additional claims over battery defects.
The judge has valued the settlement at $170 million. Attorneys for the plaintiffs have pegged the value between $87.5 million and $461.3 million, depending largely on how many people accept rebates of up to $1,500.
The judge approved more than $8 million in plaintiff attorneys' fees in his 43-page ruling.
Fed parses job numbers for clues on U.S. economy
By Jonathan Spicer and Debbie Hummel
NEW YORK/LOGAN, Utah (Reuters) - Two top Federal Reserve officials pointed on Monday to last month's surprisingly weak jobs report as all the more reason to take a wait-and-see approach to a U.S. economy that, in general, is improving.
Although the unemployment rate slipped to a still high 8.2 percent in March, jobs growth slowed sharply, raising fears the labor market could start to sputter as it did a year ago. Nonfarm payroll employment rose by only 120,000 last month, roughly half the gains in each of the previous two months.
Cleveland Fed President Sandra Pianalto, a voter this year on the central bank's policy-setting panel, called the March job gains "meager" and illustrative of "the uneven pattern" of economic activity.
"Monthly ups and downs like these make it hard to confirm the underlying pace of job creation," she said at a bankers' event in Lexington, Kentucky, citing the robust jobs reports in January and February. "So it seems as though the labor market is still improving, albeit at a modest pace."
St. Louis Fed President James Bullard, who does not have a vote on policy this year, called the report "mediocre," but added: "It's just one piece of the puzzle. Certainly viewed in a broader context, the jobs reports have been strong."
The stubbornly high jobless rate has frustrated the Fed, which in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy after the worst recession in decades.
BULLARD SEES INFLATION RISK
The Fed meets next week on Tuesday and Wednesday, when it is not expected to adopt any fresh policy measures beyond its ultra-easy monetary stance, but rather use the meeting to discuss the latest economic developments and further refinements to its communications strategy.
Central bank officials have suggested the economy would need to deteriorate, and inflation would need to remain below a 2 percent target, for them to consider more stimulus in the form of bond purchases - a controversial move that would increase the Fed's balance sheet from almost $3 trillion.
"I still think the economy is on track for right now, and the best thing to do is gather more information and see if the improvement in the economy in 2012 can sustain itself," Bullard told reporters after addressing students at the Utah State University Jon M. Huntsman School of Business.
The Fed is taking on a lot of inflation risk with its bond buys, added Bullard, a policy centrist.
Still, a Reuters poll conducted after the release of the disappointing March employment figures found most Wall Street primary dealers think a third round of Fed bond-buying will eventually take place. (FED/R)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a Reuters interactive graphic on hawks and doves among Fed
policymakers, see: http://r.reuters.com/jad67s
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At its last two meetings, the central bank said it expected to keep rates "exceptionally low" at least through late 2014. Fed policymakers, however, give individual forecasts, and Bullard said on Monday that he still expects the Fed to raise rates late in 2013.
Pianalto, a moderate policy dove more in line with Fed Chairman Ben Bernanke, said the economy needs to grow at a faster rate in order to speed up the pace of employment growth and repair damage from the 2007-2009 recession, though she did not comment specifically on policy.
"If our economy were a Kentucky thoroughbred, I'd say we have moved from a walk to a trot, but we're far from a gallop," Pianalto said.
(Reporting by Jonathan Spicer in New York and Debbie Hummell in Logan; Editing by Jan Paschal)
Wednesday's Treasury bond market at a glance
Key barometers in the Treasury market late Wednesday, compared with late Tuesday. Price changes in the 10-year note and 30-year bond are per $100 invested:
___
1. Bond Buyer index of 40 actively traded municipal bonds.
Judge dismisses claims against banks in GE lawsuit
By Nick Brown
NEW YORK (Reuters) - A federal judge on Wednesday dismissed claims against Goldman Sachs Group Inc (NYS:GS - News), JPMorgan Chase & Co (NYS:JPM - News) and 40 other defendants that they helped mislead investors in General Electric Co's $12.2 billion stock offering in 2008.
U.S. District Judge Denise Cote, who took over the case in February, said a January ruling denying the defendants' bid to dismiss claims failed to consider key court rulings and improperly relied on certain statements.
Cote's ruling does not entirely dismiss the class action lawsuit filed by GE investors, keeping intact claims that GE (NYS:GE - News) and its chief financial officer, Keith Sherin, made misleading statements about the quality of the company's loan portfolio.
The State Universities Retirement System of Illinois, the lead plaintiff, filed the lawsuit in 2009, saying GE and myriad financial firms were responsible for investor losses during a six-month period when GE's stock price fell to about $10 from about $26.
The plaintiffs alleged that GE withheld information regarding its health and the health of its GE Capital finance arm, including exposures to subprime and other low-quality loans. They also said GE misleadingly touted itself as being safer than rivals, despite the effects of the financial crisis.
Among those dismissed from the lawsuit on Wednesday are Barclays PLC (LSE:BARC.L - News), Citigroup (NYS:C) and Bank of America Corp (NYS:BAC - News).
"The January opinion improperly relied on statements that were not incorporated into the offering documents, and on statements that were modified and superseded by later statements," Cote said.
It also failed to take into account a court ruling that had established rules on whether stated opinions could be grounds for a lawsuit, Cote said.
Attorneys for the dismissed defendants did not respond to requests for comment. Lawyers for the plaintiffs could not immediately be reached.
A GE spokesman did not respond to an email seeking comment.
The case is In re: General Electric Co Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01951.
(Additional reporting by Jonathan Stempel; Editing by Ryan Woo)
Sunday, April 22, 2012
Judge extends deadline for BP oil spill settlement
NEW ORLEANS (AP) -- A federal judge on Monday extended a deadline for BP and a team of plaintiffs' attorneys to file details of a proposed settlement designed to resolve billions of dollars in economic damage claims spawned by the 2010 oil spill in the Gulf of Mexico.
The company and lawyers representing more than 100,000 individuals and businesses were expected late Monday to present the formal terms of the settlement agreement to U.S. District Judge Carl Barbier in New Orleans and ask him for preliminary approval.
Early Monday evening, Barbier extended the deadline to Wednesday morning. He said the parties needed more time to finish compiling supporting documentation and exhibits.
London-based BP PLC estimates it will pay about $7.8 billion to resolve private party claims, but the proposed settlement doesn't have a cap.
The agreement announced March 2 doesn't resolve separate claims brought by the federal government and Gulf states against BP and its contractors on the Deepwater Horizon drilling rig over environmental damage from the nation's worst offshore oil spill.
BP set up a $20 billion compensation fund after the April 20, 2010, blowout of its Macondo well. The Gulf Coast Claims Facility paid out more than $6 billion from the fund before a court-supervised administrator took over the claims process on March 8.
The agreement calls for BP to pay $2.3 billion for seafood-related claims by commercial fishing vessel owners, captains and deckhands.
BP and the plaintiffs' attorneys also have said their agreement calls for paying eligible claims by cleanup workers and others who say they suffered illnesses from exposure to the oil. Many people have filed claims asserting spill-related illnesses, but none were paid by the GCCF.
The Plaintiffs' Steering Committee, which negotiated the proposed settlement, filed a class-action complaint Monday against BP on behalf of cleanup workers and coastal residents who claim they were harmed by exposure to oil or chemicals that were used to disperse the oil. The committee members also filed a separate class-action complaint against BP over the economic loss and property damages claims. The new complaints are believed to be procedural moves that pave the way for both sets of claims to be settled.
Summary Box: Oracle spars with Google in trial
LEGAL SHOWDOWN: Oracle delivered its opening statement in a federal court trial revolving around its allegations that Google stole a key piece of programming technology called Java to build the Android operating system that now powers more than 300 million smartphones and computer tablets.
FIRST JABS: In an hour-long presentation before a jury Monday, Oracle Corp. lawyer Michael Jacobs highlighted a series of internal emails indicating Google's top executives knew the company needed pay licensing fees to use Java in Android. A licensing agreement was never worked out.
NEXT ROUND: Google Inc.'s lawyers will counter with their opening statement Tuesday.
Rates decline at Treasury bill auction
WASHINGTON (AP) -- Interest rates on short-term Treasury bills fell in Monday's auction with rates on six-month bills dropping to the lowest level since early March.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.080 percent, down from 0.085 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.135 percent, down from 0.150 percent last week.
The three-month rate was the lowest since three-month bills averaged 0.075 percent on April 2. The six-month rate was the lowest since those bills averaged 0.130 percent on March 5.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.98 while a six-month bill sold for $9,993.18. That would equal an annualized rate of 0.081 percent for the three-month bills and 0.137 percent for the six-month bills.
Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged down to 0.18 percent last week from 0.19 percent the previous week.
Oracle skewers Google as Android trial opens
SAN FRANCISCO (AP) -- Oracle began Monday trying to convince a jury that Google's top executives have long known that they stole a key piece of technology to build the Android software that now powers more than more than 300 million smartphones and tablet computers.
The unflattering portrait of Google Inc. was drawn by Oracle lawyer Michael Jacobs in the opening phase of a complex trial pitting two Silicon Valley powerhouses in a battle delving into the often mind-numbing minutiae of intellectual property and computer coding.
"We will prove to you from beginning to end ... that Google knew it was using someone else's property," Jacobs said near the end of his hour-long opening statement.
Google's lawyers will counter with their opening statements Tuesday.
The showdown in a San Francisco federal court centers on Oracle's allegations that Google's Android software infringes on the patents and copyrights of Java, a programming technology that Sun Microsystems began developing 20 years ago.
Oracle Corp., a business software maker based in Redwood Shores, acquired the rights to Java when it bought Sun Microsystems for $7.3 billion in January 2010.
Google Inc., the Mountain View-based Internet search leader, has steadfastly denied Oracle's allegations since the lawsuit was filed seven months after the Sun deal closed.
The impasse has left it to a 12-member jury to resolve the dispute in a trial scheduled to last as long as 10 weeks. U.S. District Judge William Alsup devoted most of Monday's session to picking the jury, leaving only enough time for Oracle to lay out the framework for its case.
Oracle is seeking hundreds of millions of dollars in damages and an injunction that would force Google to pay future licensing fees or find an alternative to Java to keep its Android system running smoothly.
At one point in the lawsuit, Oracle estimated it might be owed as much as $6.1 billion. But Alsup has whittled the case down in a way that has substantially lowered the size of the potential payout if Google loses.
In a sign of how far apart the two sides are, Google last month said it would be willing to pay $2.8 million plus a tiny percentage of its future revenue if the jury decides Android infringed on two Java patents. Google hasn't publicly estimated what it thinks its liability might be if the jury decides Android violated 37 Java programming copyrights as alleged by Oracle.
The copyright disagreement — the most important point of the case — will be covered in the first phase of the trial followed by the patent dispute. If necessary, a third phase will be devoted to how much money Google owes Oracle.
Much of the evidence presented during the trial will delve into highly technical fare likely only to appeal to programming geeks and patent-law aficionados. However, there may be dramatic interludes that lift a veil on the inner workings of two of the world's most influential technology companies.
The intrigue will include testimony from the two companies' multibillionaire CEOs, Oracle's Larry Ellison and Google's Larry Page. Oracle indicated on Monday that it could call Ellison to the stand as early as Tuesday.
Several other industry luminaries, including former Google CEO Eric Schmidt and former Sun Microsystems CEO Jonathan Schwartz, are also on the list of potential witnesses.
Jacobs focused much of his opening statement on excerpts in internal emails that suggest Google knew it needed to pay licensing fees to use some of the Java technology that went into Android, a project that began in earnest in 2005 when Google bought a startup run by Andy Rubin. The first phone running on Android software didn't go on sale until October 2008, about 15 months before Oracle bought Sun Microsystems and stepped up the attempts to make Google pay up for the Java technology.
Oracle cited an October 2005 email from Rubin to Page as an early sign that Google realized it probably would have to pay Sun for using Java in Android.
"My proposal is that we take a license that specifically grants the right for us to Open Source our product," Rubin wrote.
Jacobs pointed to a May 2006 email from Schmidt to Rubin as an indication that Google knew it might need to seek other solutions for Android if it couldn't work out an agreement with Sun.
"How are we doing on the Sun deal?" Schmidt asked in his message. "Its (sic) it time to develop a non-Java solution to avoid dealing with them?"
By August 2010, Google still hadn't been able to find any satisfactory alternatives to Java, according to an email that Google engineer Tim Lindholm sent to Rubin.
"We have been over a bunch of these, and think they all suck," wrote Lindholm, who worked at Sun Microsystems before joining Google. "We conclude that we need to negotiate a license for Java under the terms we need."
The lack of a licensing agreement ultimately didn't deter Google, Jacobs told the jury, because the company realized it needed a mobile software system to preserve its digital search-and-advertising empire as more sophisticated phones enabled more people to surf the Internet while they were away from their desktop computers. Java provided Google with a springboard into mobile computing because 6 million software programmers were already familiar with the technology and could easily create applications that would run on Android, Jacobs said.
Although Google doesn't charge device makers to use Android, the company makes money from some of the mobile advertising and mobile applications sold on the system. Google has said its mobile advertising revenue now exceeds $2.5 billion, but it hasn't specified how much of that money comes from Android-powered devices.
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