A foundering bond insurer on Thursday filed a civil fraud suit against Goldman Sachs over the same exotic mortgage-securities deal in which Goldman paid $550 million last summer in a settlement with the Securities and Exchange Commission.
ACA Financial Guaranty Corp. charged that Goldman helped a major client, hedge fund Paulson & Co., rig the billion-dollar deal by allowing the firm to pack it with securities backed by highly risky mortgages in early 2007 as the housing market was beginning to collapse.
ACA invested heavily in the deal, known as Abacus 2007-AC1, in the belief that Paulson had agreed to absorb the first losses, while Goldman concealed that the fund was actually betting the so-called synthetic securities would default, the suit said same day payday loans.
Goldman initially bet on the failure of the underlying bonds in the deal, but secretly sold its position to Paulson.
Paulson ultimately racked up $1 billion in profits on the deal while ACA and European banks lost that much. Besides investing $42 million, ACA wrote $909 million in insurance on the securities in the deal. When the insurer ran into financial problems, the European bank, ABN Amro, reinsured ACA’s position at Goldman’s insistence, the suit said.
Victor Pauca will have plenty of presents to unwrap on Christmas, but the 5-year-old Winston-Salem boy has already received the best gift he’ll get this year: the ability to communicate.
Victor has a rare genetic disorder that delays development of a number of skills, including speech. To help him and others with disabilities, his father, Paul, and some of his students at Wake Forest University in Winston-Salem have created an application for the iPhone and iPad that turns their touch screens into communications tools.
The VerbalVictor app allows parents and caregivers to take pictures and record phrases to go with them. These become “buttons” on the screen that Victor touches when he wants to communicate. A picture of the backyard, for example, can be accompanied by a recording of a sentence like “I want to go outside and play.” When Victor touches it, his parents or teachers know what he wants to do.
“The user records the voice, so it’s something the child’s familiar with. It’s not robotic,” Paul Pauca said.
The app, which should be for sale for $10 in Apple Inc.’s iTunes store by early next week, is one of dozens of new software products designed to make life easier for people with a range of disabilities.
The category is expanding so fast that Apple now has a separate listing for it in the App Store. More apps are added every week, ranging from Sign4Me, a sign language tutor that uses an animated avatar, to ArtikPix, a flash card-like app that helps teachers and speech therapists improve their students’ articulation of words.
“It opens up his mind to us, because he can show us what he’s thinking,” said Victor’s mother, Theresa.
Victor has a rare genetic disorder called Pitt Hopkins Syndrome, a diagnosis he shares with about 50 other people in the U.S. The ailment causes delays in cognitive abilities, motor skills, social development and language skills. Victor’s progress, in many ways, has been good _ he could walk at age 2, whereas some children with the condition can’t walk until they’re 10 or older.
The Paucas tried a number of therapeutic devices designed to help people with similar disabilities communicate. These standalone devices are often low-tech _ the one the Paucas first tried required paper printouts. Or they are expensive: a top-of-the-line model similar to the one used by famed physicist Stephen Hawking can cost about $8,200.
Paul Pauca, a computer science professor, decided that he and some of his students could do better payday lenders. Starting in January, they worked to create an app that would use the versatility of the Apple devices to make communication easier.
Because the hardware already existed, and the work was done as part of a class, there were essentially no direct costs of development. The prototype was done by late spring.
“We’re not a big-budget operation, and that allows us to sell it for $10,” said Tommy Guy, who is one of Pauca’s students and is now a Ph.D. candidate at the University of Toronto.
Jim Tobias, president of consulting firm Inclusive Technologies and an expert on disability-accessible technology, points out that VerbalVictor takes advantage of general-purpose, mass-market gadgets that cost hundreds of dollars rather than thousands.
People who already own an iPhone or iPad need to pay only $10 more for the app, “instead of taking a risk with $1,000″ with specialized machines, said Tobias, who is not involved with the project.
There are dozens of apps designed to help people with a variety of disabilities, ranging from sign language aids to apps that play back text on the screen in a clear voice to help visually impaired people navigate their phones.
The apps also offer a rich experience with bright colors, high-definition photos and crisp sound recordings that weren’t possible before mobile computing technology, Tobias said. But a potential downside exists when people start to think of the apps as a magic wand. Not every app will help every person, he said.
“I’ve been contacted by about 100 eager and enthusiastic parents in the last three or four months about things like this,” he said, “and if it doesn’t work out, they’re a little bit at a loss as to what to do next. We still need to do more to help professionals understand what’s available and what might be best suited for individuals.”
For the Paucas, who founded the Pitt Hopkins Syndrome International Network to meet and share information with other families, something as seemingly commonplace as a smart phone app has added inexpressible richness to their family life.
“He has the most positive attitude and the brightest smile,” Theresa said about Victor. “He teaches us something new every day about what we need to be thankful for.”
European Union officials estimate that a rescue package for Ireland may amount to about 85 billion euros ($114 billion), according to two officials familiar with the talks.
The European Commission cited the figure as a preliminary estimate on a conference call of euro-region finance ministers on Nov. 21, said the people, who spoke on condition of anonymity because the talks were private. Of the total, 35 billion euros would be earmarked for banks and 50 billion euros to help finance the Irish government.
Ireland is in negotiations with the EU and the International Monetary Fund after the country’s property crash threatened to topple the banking system.
“The overall figure is linked to the outcome of the current discussions on the three-year EU-IMF program, which includes also potential capital needs for the banking sector,” Amadeu Altafaj, spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn, said by telephone in Brussels cash advance today.
Economists’ estimates on the size of the bailout have varied. Goldman Sachs Group Inc. says Ireland may ask for about 95 billion euros. UniCredit SA put the package at as much as 85 billion euros, while Deutsche Bank AG sees a 90 billion-euro plan.
Ireland is being urged by European policy makers to take emergency aid to contain a debt crisis rattling their markets, according to a person briefed on the discussions.
In a conference call of European Central Bank officials around noon Frankfurt time yesterday, Ireland was pressed to seek outside help within days, the person said on condition of anonymity. Separately, a European Union official said a request for assistance was likely even as Irish Finance Minister Brian Lenihan told RTE Radio that such a call “makes no sense” as the government is fully funded to mid-2011.
Irish bonds rose from a record low yesterday, gaining for the first time in 14 days as traders bet a bailout was near. Prime Minister Brian Cowen said for the first time that he is working with fellow EU leaders as “there are issues affecting the wider euro area” and that they are trying to “ensure that the bond markets respond positively to the euro.” He reiterated that his debt-strapped country has not sought cash.
“It seems difficult for Ireland to avoid tapping the fund unless they have new rabbits to pull out their hat,” said Julian Callow, chief European economist at Barclays Capital in London.
An ECB spokeswoman declined to comment and the Finance Ministry in Dublin said no talks on emergency funds were under way. ECB President Jean-Claude Trichet, speaking today in Tutzing, Germany, declined to comment on Ireland.
Possible Aid
Ireland could draw on the 60 billion euro ($82 billion) segment of the broader 750-billion-euro fund set up by the EU and International Monetary Fund in May, Irish state broadcaster RTE said, without saying where it obtained the information. The smaller pool is funded directly by the European Commission, the EU’s Brussels-based executive branch.
Luxembourg Prime Minister Jean-Claude Juncker, who chairs the panel of euro-area finance ministers, said yesterday there was “no immediate reason” to think Ireland will request cash and that officials would not meet before regular monthly talks in Brussels next week.
IMF Managing Director Dominique Strauss-Kahn said he was prepared to help. “If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready,” he told reporters today in Yokohama, Japan.
Cowen’s Conversations
Irish officials yesterday spoke to the offices of Trichet, European Commission President Jose Barroso and German Foreign Minister Guido Westerwelle, resisting the bailout that EU officials hope would calm markets, the Irish Times said without citing sources.
The British Broadcasting Corp. reported today that preliminary talks were under way for emergency aid. A Finance Ministry spokesman repeated a denial from yesterday that such talks were happening.
The premium that investors demand to hold Irish 10-year sovereign bonds over the benchmark German bonds was 564 basis points at 3:59 p.m. in London, down from a record 646 points yesterday.
Yields on bonds of Spain and Portugal jumped earlier in the week amid concern that fallout from Ireland would spread. The extra yield that investors demand to hold Portuguese 10-year bonds instead of German bunds climbed to a record 484 basis points on Nov. 11.
A decision by Ireland to use the European Financial Stability Facility would be a “circuit breaker” for the market turmoil and boost the euro, Emma Lawson, a Hong Kong-based currency strategist at Morgan Stanley, said in a report yesterday.
Euro’s Decline
At the end of European trading yesterday the euro was poised for its biggest weekly loss since August although it climbed yesterday from a six-week low against the dollar.
Ireland’s woes formed part of the debate at the Seoul summit of Group of 20 leaders, from which the finance chiefs of Germany, France, the U.K., Spain and Italy successfully cooled market concerns by saying in a statement that a plan being debated to have investors cover future bailout costs would have “no impact whatsoever” on existing debt.
The drafting of that crisis program hasn’t “been helpful,” Cowen said in an interview with the Irish Independent newspaper published yesterday. German Chancellor Angela Merkel rejected such criticism, saying in Seoul yesterday “the future crisis mechanism has nothing to do with the debate going on right now.”
“Clarification was needed and it is good news it’s now out there,” said Erik Nielsen, chief European economist at Goldman Sachs Group Inc.
Bailout Fund
EU countries established the bailout fund in May to protect the euro area from the fallout of the Greek-led debt crisis. Speculation has grown that Ireland would need it after a housing-led recession and the need to save its biggest lenders plunged it into fiscal turmoil.
Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.
Irish officials have indicated they hope a 2011 budget, due for release on Dec. 7, will placate markets as they try to cut a budget deficit which will be about 12 percent of gross domestic product this year, or 32 percent when the costs of the banking rescue are included. Lenihan’s plan includes 6 billion euros of spending cuts and tax increases next year.
Time Needed
“The more time elapses, the bigger is the chance that the results of fiscal policies will show,” said Holger Schmieding, chief economist at Joh Berenberg Gossler & Co. in London. “The more time elapses before a country taps the fund the better.”
Ireland’s banks are nevertheless becoming more dependent on the European Central Bank after it said in September saving its lenders may cost as much as 50 billion euros as the state sinks more funds into nationalized Anglo Irish Bank Corp. and other lenders. Lenders’ borrowings from the ECB rose 7 percent last month, according to statistics published on the central bank’s website yesterday.
“The chances are rather big that at some point they need to ask for financial assistance just to calm down the situation,” Aline Schuiling, an economist at ABN Amro Bank NV in Amsterdam, said yesterday. “There will have to be a solution.”
France’s expansion slowed in the third quarter as a surge in imports and a decline in manufacturing overshadowed increasing household spending.
Gross domestic product rose 0.4 percent in the three months through September, down from the 0.7 percent gain in the previous quarter, Paris-based statistics office Insee said today. The increase was less than the median 0.5 percent forecast in a survey of 20 analysts by Bloomberg News.
France’s sixth straight quarter of growth underlines how Europe’s recovery remains fragile in the wake of the worst recession since World War II. A 4.1 percent jump in imports meant that the trade balance created a 0.5 percent drag on growth in the quarter, while the pace of growth in consumer spending doubled to 0.6 percent.
“France keeps its atypical growth structure, driven by private consumption,” said Dominique Barbet, an economist at BNP Paribas in Paris. “The foreign trade weakness is limiting the pace of economic recovery. More of the same is expected in the next few months.”
GDP rose 1 no fax cash advances.8 percent from its year-earlier level.
Factory output fell 0.1 percent from the second quarter, when it advanced 1.5 percent. Investment spending increased 0.5 percent, down from the 0.9 percent increase in the three months through June. Inventory building contributed 0.3 percent to growth, down from 0.6 percent.
So far, French consumer spending has supported the economy, limiting the drop in output during the recession relative to other countries. Spending climbed more than economists forecast in September as expectations of better job prospects and higher wages boosted confidence.
“One of the consistent surprises for me has been the resilience of consumer spending,” said Joost Beaumont, an economist at ABN Amro in Amsterdam. Growth may moderate in the months ahead “as fiscal retrenchment as well as weak labor market conditions leave their mark.”
About 700 contractors attended two recent events about upcoming Silicon Valley construction contracts worth $1.1 billion, according to officials of the Santa Clara Valley Transportation Authority.
The largest was a Sept. 30 event at the San Jose McEnery Convention Center where 550 contractors attended to learn details of the $785 million design-build contract for the 10-mile extension of BART from the future Warm Springs station in Fremont to San Jose's Berryessa district.
The Warm Springs station is expected to be open by 2014 with the completion of a 5.4-mile line from the existing Fremont station. The BART extension into Milpitas and North San Jose is scheduled to be operating by 2018.
"BART-Silicon Valley presents our local economy with the largest public works project in Northern California," Sam Liccardo, San Jose City Council member and chairman of the VTA board of directors, said in a statement. "The stand-room only turnout at this forum evinced the very high level of interest to become engaged with the project."
VTA officials will issue a Request for Qualifications Oct. 15 for that project, and a Request for Proposal early next year.
This week, transit district officials participated in a regional outreach to contractors and subcontractors considered small and disadvantaged to learn about opportunities provided by the BART extension and other transportation projects.
Hayden Lee, manager of VTA's Office of Small & Disadvantaged Businesses, said in a statement his agency makes an "ardent effort" to assist small firms, as well as those owned by women and people of minority backgrounds, in procuring contracts.
Southwest, American and American Eagle rank in the bottom half of all U.S.-based airlines in the U.S. Department of Transportation's latest monthly report of on-time arrivals.
Southwest (NYSE: LUV) ranked 10th out of 18 carriers after posting an on-time arrival rate of 78.45 percent in June.
American (NYSE: AMR) ranked 14th, with an on-time arrival rate of 73.76 percent. American Eagle ranked 17th with an on-time arrival rate of 67.89 percent. American Eagle’s rate was followed only by Comair, which had an on-time arrival rate of 64.87 percent.
The top three airlines were Hawaiian, Alaska and US Airways, which reported on-time arrival rates of 93 one hour payday loan.62 percent, 88.94 percent and 83.37 percent, respectively.
For the first six months of the year, Southwest ranked seventh with an on-time arrival rate of 80.58 percent. Meanwhile, American and American Eagle ranked 14th and 17th, respectively, with on-time arrival rates of 77.18 and 74.53 percent, respectively.
Financial services security software firm Perimeter Internetworking Corp. has hired a dozen engineers to establish a research-and-development center at 60 State Street in Boston, the Milford, Conn., company is expected to announce Tuesday.
Perimeter, which does business as Perimeter E-Security, plans to hire eight more in the next 18 to 24 months, said Chief Marketing Officer Kurt Heinemann.
“We’re making it our headquarters for many of our developers, and the core location for what we’re doing in engineering and development,” Heinemann said.
To make the move, Perimeter cut some offshore engineering resources based in India, Heinemann said. The company employs about 300, globally.
Heinemann declined to discuss revenue numbers, but said Perimeter is seeing growth in encrypted e-mail, vulnerability scanning and firewall intrusion defense — especially where regulation requires reporting and backup related to those services.
Cisco Systems Inc. executives said on Monday that air traffic problems caused by a volcano in Iceland makes a good argument for this video conferencing products.
The market for advanced video conferencing such as Cisco's telepresence already has good growth potential, the company's Senior Vice President for Emerging Technologies Marthin De Beer said on a conference call about its completed acquisition of Tandberg ASA on Monday.
But De Beer added that the volcano-related cancellation of flights in Europe and across the Atlantic shows the need for telepresence as a way for companies to communicate under any conditions.
"We have seen a huge spike in usage," Fredrik Halvorsen, the former Tandberg CEO who will now head Cisco Systems's TelePresence Technology Group, told Reuters on Sunday. "The only evidence is anecdotal, but you will not get a demo room in any of the Cisco facilities."
Spanish producer prices fell the least in six months in October as oil prices rose.
Prices of goods leaving Spain’s factories, mines and refineries declined 4.2 percent from a year earlier, the National Statistics Institute in Madrid said today, after a 5.4 percent drop in September. Prices were unchanged from the prior month, today’s report showed.
The price of crude oil rose 14 percent in the year to the end of October and traded at $76.94 today. Weak demand is still pulling producer prices lower as the Spanish economy contracted for a sixth quarter from July through September even as Germany, France and the euro region expanded.
Spanish consumer prices have been falling in annual terms since March, as inflation slows more sharply than in the euro region overall. The Spanish economy may contract 0.7 next year, the International Monetary Fund forecast on Oct. 1, while the euro area, the U.S. and the U.K. post full-year growth.
Industrial production in Spain decreased 12.5 percent from a year earlier in September, declining for a 17th month as companies reduced staff to weather the slump. Nissan Motor Co. cut production of cars and light trucks 57 percent in September from a year earlier, compared with a global decline of 8.5 percent, it said on Oct. 28.
Powered by WordPress -- XHTML 1.0