The first major newspaper endorsement has been issued in the race for New York governor — even before the Republicans pick a candidate.
The New York Daily News has endorsed the Democratic nominee, Attorney General Andrew Cuomo, saying that he is far superior to either Republican contender.
"There is no point in taking further stock of the candidates vying for the Republican nomination in next month's primary," the Daily News said. "Rick Lazio and Carl Paladino have been that awful."
Most of the newspaper's editorial was devoted to the Republicans' perceived shortcomings, rather than Cuomo's attributes.
The Daily News charged that Lazio, a former congressman from Long Island, "has thrown substantive ideas to the wind in favor of demagoguery free business cards." And it accused Paladino, a Buffalo developer, of offering "proposals [that] range from ill-informed to illegal."
The editorial also referred to two controversies that dogged Paladino's campaign earlier in the year.
"Paladino is also given to insensitivities that would divide New Yorkers," it said. "He has forwarded racist and pornographic emails, including some using the N-word, and contemptibly compared [Assembly Speaker Sheldon] Silver, an Orthodox Jew, to the anti-Christ and Hitler."
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KBR has won two contracts by the Republic of Iraq Ministry of Oil through the South Refineries Co.
KBR will provide licensing and basic engineering services for the construction of fluid catalytic cracking and solvent deasphalting units at the planned grassroots Maissan Refinery in Maissan, Iraq. Financial terms were not disclosed.
Houston-based KBR (NSYE: KBR) plans to license its FCC Technology for an anticipated 47,500 barrels per day FCC unit and its “Rose” technology for a 45,000 barrels per day SDA unit poor credit personal loans.
KBR and ExxonMobil Research and Engineering Co. have formed a joint marketing alliance to work on the FCC unit.
“These awards mark the first wins for KBR’s technology business in Iraq and provide KBR the opportunity to introduce two of its leading refining technologies into an important, emerging market,” Tim Challand, president of KBR Technology, said in a statement.
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As world leaders gather in Canada to discuss ways to strengthen the global economy, lawmakers in the United States finalized a bill Friday that would impose a $19 billion tax on financial institutions.
The tax, which is part of a sweeping overhaul of the U.S. financial system, comes after policymakers in the United Kingdom, France and Germany moved ahead with plans to impose new bank taxes this week.
Given those steps, analysts expect leaders to discuss bank taxes at the G-20 summit this weekend. In a Tuesday letter to fellow G-20 members, the leaders of France and Germany called for "an international agreement to introduce a levy or tax on financial institutions."
But plans to impose a global bank tax were scratched at the last G-20 meeting earlier this month in South Korea. Canada, Brazil and Japan opposed the idea, noting that banks in their countries did not require government aid during the financial crisis.
While the taxes vary from country to country, the reasoning behind them is basically the same: to ensure that banks are responsible for the risks they take and not taxpayers.
"The failures of the banks imposed a huge cost on the rest of society," said George Osborne, the U.K. Chancellor of the Exchequer. "I believe it is fair and it is right that in the future banks should make a more appropriate contribution, which reflects the many risks they generate."
Osborne made the remarks Tuesday in unveiling one of the most stringent budgets in decades lowest fee payday loans. The budget calls for a levy on bank liabilities that is expected to raise 2 billion British pounds annually.
In the United States, the proposed $19 billion tax would cover the cost of implementing financial reform. President Obama is expected to sign the bill in July.
The tax would apply to banks with more than $50 billion of assets and hedge funds with over $10 billion in assets. It would be assessed based on how much risk an institution takes and is expected to raise $4 billion a year over the next five years.
In addition, Congress is considering a $90 billion "financial crisis responsibility fee" as part of President Obama’s 2011 budget proposal. The so-called bailout tax would be paid largely by major financial institutions that contributed to the financial crisis, and were the biggest beneficiaries of extraordinary government actions.
While the banking industry supports some key principles of reform, bankers are concerned that certain regulations will hurt consumers, according to Edward Yingling, president of the American Bankers Association.
"The consequences involved are very real and will have a very negative impact on traditional banks, on consumers and on the broader economy," Yingling said in a statement.
A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.
The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.
The rate has been inching steadily toward this record, having ticked up almost a full point since a year go.
The report contained a sliver of good news, however. The non-seasonally adjusted delinquency rate dropped almost one point to 9.38% between the fourth quarter 2009 and first quarter 2010.
So while the seasonally adjusted number saw growth during that period, the non-seasonally adjusted number followed the traditional pattern. Rates usually peak in the fourth quarter, as holiday spending and heating bills kick in causing people to put off paying their loan. But then, when they get caught up in the first quarter, delinquencies fall again.
"The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement," said Jay Brinkmann, MBA’s chief economist. "The normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which."
The foreclosure inventory rate, which represents the percentage of mortgaged homes repossessed by lenders, was fairly flat quarter-over-quarter, inching up to 4.63% from 4.58%. But it jumped a lot from 12 months earlier, when the rate stood at 3.85%.
Nearly all varieties of loans suffered increased delinquencies compared with 12 months earlier. Prime fixed-rate loans hit 6.17%; prime adjustable-rate mortgages (ARMs) tipped 13.52%. Subprime fixed-rates jumped to 25.69%; and subprime ARMs are a whopping 29.09%.
The one bright spot was that delinquencies for FHA loans, the mortgages guaranteed by the Federal Housing Authority, dropped slightly to 13.15%.
The improvement is likely due to tighter FHA underwriting standards, which it adjusted after loans issued in 2007 and 2008 started souring. That should be a relief for taxpayers, who will be on the hook for any losses the FHA suffers.
Most of the overall rate increases are attributable to the seriously delinquent loans, Brinkmann said. Those loans, which are 90 days or more late, are going all the way through to foreclosure, but are not being foreclosed, keeping people in the system longer.
In the pre-housing-bust world, many borrowers would have already lost their homes and their delinquencies would no longer be counted in the survey.
Shift in problem-loan types
Lenders have slowed repossessions for various reasons: They may not have enough staff yet to handle the volume; the foreclosure prevention initiatives, such as the Home Affordable Modification Program, is postponing many foreclosures; and the banks themselves are trying to prevent defaults by approving more short sales.
There has been a fundamental change in the nature of the loans causing the most default problems, according to Brinkmann. And, he added, unemployment is the culprit. "Delinquencies are much more driven by the recession than by any one loan type now," he said.
Subprime ARMs accounted for nearly 30% of all delinquencies a year ago, but just under 15% now. Meanwhile, prime fixed-rate loans delinquencies have grown so much that they represent the single biggest bucket of delinquent mortgages: 37% up from 29% a year ago.
Some of the prime loan defaults stem from an increase in people deliberately "walking away" from mortgages. These are homeowners who can pay their loans but choose not to because their homes have dropped so much in value.
According to a recent report, as much as 31% of all defaults in March were strategic.
Brinkmann opined that many of these "strategic defaulters" may be underestimating the impact of walking away. It may take them much longer to repair their credit histories than they realize as lenders assess more than their credit ratings to determine whether to finance future home purchases.
Underwriting involves more than just checking credit scores, and if a lender sees a strategic default on their records, homebuyers may not qualify for loans.
"They may be able to repair their credit scores," he said, "but their ability to buy a home in the future may be negatively impacted for years to come."
Danny Ayala, head of global remittance at Wells Fargo & Co., has only to look at the numbers from Mother’s Day week to see improvement in the business of zipping money from country to country.
In a sign of an improving economy, the bank saw a 57 percent increase in volume during that week and an all-time daily high on May 10 — the day Mother’s Day is celebrated in Mexico.
"It shows that remitters have money to send," Ayala said in an interview Thursday. "Last year was a much different story."
Wells Fargo & Co. expects even bigger things from the remittance business, with the addition of eight new recipient countries at the end of last year and the gradual rollout of its "ExpressSend" service in Wachovia branches.
Wells started ramping up ExpressSend in 2003 and now offers service to 15 countries in Latin America and Asia. Customers can send money overseas from a branch, by phone or online. Wells is also looking to add mobile and ATM options.
In the first quarter, total transactions increased 36 percent to Mexico and 35 percent to all countries, compared with the same period a year earlier. The bank handles billions of dollars in remittance volume each year, but doesn’t provide specific volume or transaction figures.
With the business, Wells sees a way to help a growing immigrant population send money home — and an opportunity to sell them checking accounts and other banking products, Ayala said.
The remittance business is at the center of two hot issues lately: immigration and financial services. Many customers who use the product are in the U.S. legally, but Ayala acknowledges that some may not be. The company follows laws that require it to check customers’ identification, but not immigration status, he said.
"The immigration issue is an issue of public policy," he said. "We are here to provide financial services."
As part of financial reform legislation being debated in Congress, some lawmakers are pushing for more consumer protections for remittance customers. One proposal would require remittance providers to display fees in their storefronts and give the cost to customers upfront.
Ayala said the bank favored transparency but wasn’t comfortable with current proposals. The legislation could be difficult to implement because prices change frequently as exchange rates fluctuate, he said. According to World Bank figures, the remittance flow to developing countries fell 6 percent to $316 billion in 2009. As the world economy picks up, the World Bank expects remittances to increase by 6.2 percent in 2010.
Wells competes with money transfer giants such as Western Union Co. and MoneyGram International Inc., as well as other banks. Bank of America Corp. has a product that allows customers with checking accounts to send money to Mexico by phone. The bank also has an online wire transfer service.
German business software maker SAP AG has agreed to buy Sybase Inc. in a $5.8 billion deal that ratchets up SAP’s rivalry with database leader Oracle Corp.
The deal intensifies the battle between SAP and Oracle to run more of the programs that corporations use to manage their data.
Oracle is the world’s leading database maker a market where Sybase is a small player and has been on a buying binge in an attempt to take business in other areas from SAP.
Salt River Project is cutting back on incentives planned for home solar installations in the wake of increased demand, and will begin instituting those changes after Friday.
SRP will lower its incentives from $2.70 per installed watt of solar power to $2.15 per installed watt.
The state’s second largest utility had been scheduled to lower the amount to $2.55 May 1 but, has been inundated with applications, said Lori Singleton, manager of environmental initiatives for SRP. “Due to the overwhelming response of the program, we’ve decided to lower the rates more this year,” he said.
SRP officials made the decision to lower the incentives Thursday afternoon and were contacting installers to inform them that applications had to be in by 5 p.m. Friday in order to qualify for the current incentive rate.
SRP was hit with 211 applications for incentives in March, more than double any previous month since last June, right before the utility dropped the amount for the first time.
The non-partisan Congressional Budget Office estimates that the Democrats’ revised health care bill will cost $940 billion over the next 10 years, a House Democratic source told CNN Thursday.
CNN has not seen the numbers directly yet nor has the CBO released them publicly. But, according to the source, the bill would cut the deficit by $130 billion during the first decade. And it would reduce the deficit by another $1.2 trillion in the following decade, the source said.
The measure extends health insurance coverage to 32 million Americans, helping to guarantee that 95% of Americans will be covered, the source said. It also reduces Medicare expenditures by 1.4% annually while extending Medicare’s solvency by at least 9 years, the source added.
The source also told CNN the $940 billion price tag is fully paid for. But what’s not clear yet — and what may be revealed later Thursday — is just how Democrats plan to pay for the bill instant payday loan.
One of the reasons House Democrats objected to the Senate-passed version of health reform is the nature of some of the revenue raisers in that bill, in particular an excise tax on insurers that would apply to high-cost insurance plans.
Supporters of the excise tax say it offers a good shot at reducing health care spending over time, since insurers and employers would seek to avoid the tax by opting for lower cost coverage.
Opponents, including unions, say the tax would be passed on to workers, and lower cost coverage would be less comprehensive.
– CNN’s Dana Bash and Brianna Keilar and CNNMoney’s Jeanne Sahadi contributed to this report.
Hot or iced, with whipped topping or not — Seattle’s Best Coffee fans can soon have it their way.
Burger King (BKC) will start serving up the Starbucks (SBUX, Fortune 500)-owned brand at 7,250 of its restaurants across the United States by September, for $1 to $2.79 a cup, the company announced today.
"The addition of Seattle’s Best Coffee expands on our ‘Have it Your Way’ brand promise by offering our guests even more beverage options and strengthens our ability to remain competitive in a continuously changing industry," the restaurant chain’s senior marketing VP, John Schaufelberger, said in a statement.
The news comes amid a weak economy in which consumers seem to be pinching pennies and avoiding burgers, soda and beer.
Last week McDonald’s posted same-store sales were down 0.7% in January in its U.S. restaurants. Burger King competes with McDonalds’ McCafe to attract morning customers. Burger King doesn’t post monthly figures, but showed same-store sales in the U.S. and Canada were down 3.3% in the second quarter of 2010.
Seattle’s Best Coffee will replace Burger King’s BK Joe coffee menu, launched in 2005.
The sandwich chain Subway also signed a deal with Seattle’s Best back in November and now sells its coffee in 8,500 stores.
European finance chiefs sought to bolster international confidence in Greece’s ability to cut its budget deficit by endorsing the country’s austerity plan and promising to ensure the government delivers on it.
“The European members of the G-7 will make sure it is managed,” French Finance Minister Christine Lagarde told reporters on Feb. 6 after meeting counterparts and central bankers from the Group of Seven in Iqaluit, Canada. European Central Bank President Jean-Claude Trichet said the ECB is “confident” Greece will cut its deficit below the limit of 3 percent of gross domestic product in 2012 from 12.7 percent.
The struggles of the Greek government to convince investors it can reduce the largest budget gap in the European Union without outside assistance forced their way on to the agenda of the G-7 talks after the MSCI World Index of stocks fell to its lowest in four months on concern of a default.
“I just want to underscore they made it clear to us, they the European authorities, that they will manage this with great care,” U.S. Treasury Secretary Timothy F. Geithner said in Iqaluit. “The European authorities gave us a very comprehensive review of the program now in place to address the challenges faced by the Greek economy.”
Greek bonds have tumbled in the past two months, pushing the yield on the country’s 10-year debt above 7 percent, the highest since 1999, the year the euro began trading. The premium investors charge to hold Greek 10-year bonds over the benchmark German bund has widened to 356 basis points, about 10 times what it was two years ago, and credit-default swaps on Greek debt rose to a record on Feb. 5.
Foreign-Exchange Markets
“No measure of official reassurance would be enough unless the nations in question retain credibility in financial markets, which remains to be seen,” Geoffrey Yu, a currency strategist at UBS AG in London, said in a note to clients. “We expect foreign-exchange markets to continue trading on a risk-averse tone.”
Borrowing costs have also jumped for Portugal and Spain, raising concern among policy makers that Greece’s woes will be shared elsewhere in Europe and overseas as governments try to rein in the record budget deficits they ran up fighting the worst global recession since World War II.
“This is a crisis that has been on the horizon for quite a while,” Harvard University Professor Niall Ferguson told Bloomberg Television, adding that Belgium and Italy are also at risk. “The contagion is going to spread.”
‘Intense Concern’
German Finance Minister Wolfgang Schaeuble said in Iqaluit that policy makers outside Europe “have the impression that Europeans will solve this problem and that they’re aware of the problem.” Canadian Finance Minister Jim Flaherty said the size of Greece’s economy means “in global terms it’s not of intense concern.”
Schaeuble said Greece still has to “pay a price” for running up the deficit and said the euro remains “stable.”
“Euro-area members of the G-7 gave an update on the efforts and commitments by the Greece government to ensure fiscal sustainability and economic reform,” Trichet said. “We said that the euro area would continue to monitor closely the implementation of this stability program.”
Greek Prime Minister George Papandreou has already pledged to step up budget cuts if needed and EU Monetary Affairs Commissioner Joaquin Almunia, who also attended the G-7 meeting, said last month that leaders have no “plan B” to help Greece.
Painful Measures
Most Greeks object to increases in the retirement age and fuel taxes even as a majority say painful measures are needed to reduce the budget gap, according to a Kappa Research poll for To Vima newspaper, published yesterday.
Harvard’s Ferguson said Greece’s economy will suffer as it tries to restore fiscal order with the resulting increase in unemployment triggering public strikes. Teachers, hospital workers and tax collectors already have called a 24-hour strike for Feb. 10 and private-sector workers will follow two weeks later.
“It’s going to be messy,” said Ferguson, who predicted Germany and France will provide financial aid if needed. “Suddenly the markets woke up and realized these weren’t credible fiscal policies.”
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