Tuesday, January 31, 2012
Monday, January 30, 2012
Sen Mark Kirk's Condidtion Upgraded to "Fair"
Dr. Fessler provided the following update on Senator Kirk’s condition this morning:
“Senator Kirk’s recovery is continuing. He is alert, talking and responding well to questions. He has been upgraded to fair condition and we are very pleased with his progress,” said Richard Fessler, MD, PhD, neurosurgeon at Northwestern Memorial Hospital and professor of neurological surgery at Northwestern University Feinberg School of Medicine.
“Senator Kirk’s recovery is continuing. He is alert, talking and responding well to questions. He has been upgraded to fair condition and we are very pleased with his progress,” said Richard Fessler, MD, PhD, neurosurgeon at Northwestern Memorial Hospital and professor of neurological surgery at Northwestern University Feinberg School of Medicine.
Wednesday, January 25, 2012
AG Madigan Sues Standard and Poor's for Its Role in Rating Risky Mortgages as Safe
Chicago — Attorney General Lisa Madigan today filed a lawsuit against Standard & Poor’s for its fraudulent role in assigning its highest ratings to risky mortgage-backed investments in the years leading up to the housing market crash.
Madigan filed her lawsuit today in Cook County Circuit Court, alleging that Standard & Poor’s, or S&P, compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share. The Attorney General’s lawsuit alleges that S&P ignored the increasing risks posed by mortgage-backed securities, instead giving the investment pools ratings that were favorable to its investment bank client base and S&P’s profits.
“Publically, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue,” Madigan said. “Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar – and ultimately crash – could not have been purchased by most investors without S&P’s seal of approval.”
The Attorney General’s lawsuit cites numerous internal emails and conversations among S&P employees in the run up to the housing market’s crash that demonstrate the company misrepresented its ratings as objective and independent. In one such exchange, in April 2007, an online conversation via a company-based instant messenger application revealed employees discussing S&P ratings compared to the reality of risk involved, with an employee stating an investment “could be structured by cows and we would rate it.”
Madigan said investors relied on S&P ratings because they were historically rooted in the agency’s purported independence and objectivity. S&P’s internal code of conduct states its goal to “promote investor protection by safeguarding the integrity of the rating process.” But, the Attorney General’s lawsuit cites congressional testimony by a former managing director of S&P who revealed that “profits were running the show,” with ratings being assigned to risky investments to help drive profit margins for their clients.
S&P, a subsidiary of McGraw-Hill Companies, is one of the nation’s largest credit ratings agencies responsible for independently rating risk on behalf of clients and investors. Madigan said in the run up to the financial crisis, S&P consistently misrepresented the risk of mortgage-backed securities, assigning these securities its highest seal of approval – or AAA rating. This misrepresentation spurred investors to purchase securities that were far riskier than their ratings revealed.
Mortgage-backed securities are financial products made up of a pool of mortgages that are bundled together and sold as a security. The assets are backed by residential mortgages, including subprime mortgages. The performance of these investment products have significant, real-world implications for Illinois institutional investors, such as pension funds and 401(k) managers that make decisions about whether, and which, of these securities are appropriate investments. It was the misrepresentation of the true value of these risky mortgage pools that helped the housing market skyrocket and ultimately led to its collapse in 2008.
Today’s lawsuit is part of Attorney General Madigan’s continuing work to hold lenders accountable for their unlawful financial misconduct, and to provide relief and assistance to Illinois families struggling to save their homes. Most recently, in December 2011, Madigan and the U.S. Department of Justice reached a $335 million settlement with Countrywide, a subsidiary of Bank of America, for discriminating against thousands of Illinois borrowers of color during the height of the subprime mortgage lending spree. The settlement will provide restitution to harmed Illinois borrowers and is the largest settlement of a fair lending lawsuit ever obtained by a state attorney general. The Attorney General is litigating a similar lawsuit against Wells Fargo alleging widespread discrimination against African American and Latino borrowers.
Madigan led an earlier lawsuit against Countrywide, which resulted in a nationwide $8.7 billion settlement in 2008 over the company’s predatory lending practices. The Attorney General also reached a $39.5 million settlement with Wells Fargo over the bank’s deceptive marketing of extremely risky loans called Pay Option ARMs, and in 2006, Madigan obtained more than $10 million in restitution for Illinois homeowners as part of a $325 billion multi-state settlement with Ameriquest over the former mortgage giant’s deceptive sales of predatory subprime mortgages.
Assistant Attorneys General Vaishali Rao and Vijay Raghavan are handling the case for Madigan’s Consumer Fraud Bureau.
Madigan filed her lawsuit today in Cook County Circuit Court, alleging that Standard & Poor’s, or S&P, compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share. The Attorney General’s lawsuit alleges that S&P ignored the increasing risks posed by mortgage-backed securities, instead giving the investment pools ratings that were favorable to its investment bank client base and S&P’s profits.
“Publically, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue,” Madigan said. “Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar – and ultimately crash – could not have been purchased by most investors without S&P’s seal of approval.”
The Attorney General’s lawsuit cites numerous internal emails and conversations among S&P employees in the run up to the housing market’s crash that demonstrate the company misrepresented its ratings as objective and independent. In one such exchange, in April 2007, an online conversation via a company-based instant messenger application revealed employees discussing S&P ratings compared to the reality of risk involved, with an employee stating an investment “could be structured by cows and we would rate it.”
Madigan said investors relied on S&P ratings because they were historically rooted in the agency’s purported independence and objectivity. S&P’s internal code of conduct states its goal to “promote investor protection by safeguarding the integrity of the rating process.” But, the Attorney General’s lawsuit cites congressional testimony by a former managing director of S&P who revealed that “profits were running the show,” with ratings being assigned to risky investments to help drive profit margins for their clients.
S&P, a subsidiary of McGraw-Hill Companies, is one of the nation’s largest credit ratings agencies responsible for independently rating risk on behalf of clients and investors. Madigan said in the run up to the financial crisis, S&P consistently misrepresented the risk of mortgage-backed securities, assigning these securities its highest seal of approval – or AAA rating. This misrepresentation spurred investors to purchase securities that were far riskier than their ratings revealed.
Mortgage-backed securities are financial products made up of a pool of mortgages that are bundled together and sold as a security. The assets are backed by residential mortgages, including subprime mortgages. The performance of these investment products have significant, real-world implications for Illinois institutional investors, such as pension funds and 401(k) managers that make decisions about whether, and which, of these securities are appropriate investments. It was the misrepresentation of the true value of these risky mortgage pools that helped the housing market skyrocket and ultimately led to its collapse in 2008.
Today’s lawsuit is part of Attorney General Madigan’s continuing work to hold lenders accountable for their unlawful financial misconduct, and to provide relief and assistance to Illinois families struggling to save their homes. Most recently, in December 2011, Madigan and the U.S. Department of Justice reached a $335 million settlement with Countrywide, a subsidiary of Bank of America, for discriminating against thousands of Illinois borrowers of color during the height of the subprime mortgage lending spree. The settlement will provide restitution to harmed Illinois borrowers and is the largest settlement of a fair lending lawsuit ever obtained by a state attorney general. The Attorney General is litigating a similar lawsuit against Wells Fargo alleging widespread discrimination against African American and Latino borrowers.
Madigan led an earlier lawsuit against Countrywide, which resulted in a nationwide $8.7 billion settlement in 2008 over the company’s predatory lending practices. The Attorney General also reached a $39.5 million settlement with Wells Fargo over the bank’s deceptive marketing of extremely risky loans called Pay Option ARMs, and in 2006, Madigan obtained more than $10 million in restitution for Illinois homeowners as part of a $325 billion multi-state settlement with Ameriquest over the former mortgage giant’s deceptive sales of predatory subprime mortgages.
Assistant Attorneys General Vaishali Rao and Vijay Raghavan are handling the case for Madigan’s Consumer Fraud Bureau.
Update on Sen Kirk's Condition
“Senator Kirk continues to progress as expected and we continue to be hopeful about his long term prognosis. He remains in serious condition and is being monitored closely,” said Richard Fessler, neurosurgeon at Northwestern Memorial Hospital and professor of neurological surgery at Northwestern University Feinberg School of Medicine.
USDA Acts on First Lady's Healthy Eating Campaign by Setting Limits on Calories in School Lunches
FAIRFAX, Va., Jan. 25. 2012 – First Lady Michelle Obama and Agriculture Secretary Tom Vilsack today unveiled new standards for school meals that will result in healthier meals for kids across the nation. The new meal requirements will raise standards for the first time in more than fifteen years and improve the health and nutrition of nearly 32 million kids that participate in school meal programs every school day. The healthier meal requirements are a key component of the Healthy, Hunger-Free Kids Act, which was championed by the First Lady as part of her Let's Move! campaign and signed into law by President Obama.
"As parents, we try to prepare decent meals, limit how much junk food our kids eat, and ensure they have a reasonably balanced diet," said First Lady Michelle Obama. "And when we're putting in all that effort the last thing we want is for our hard work to be undone each day in the school cafeteria. When we send our kids to school, we expect that they won't be eating the kind of fatty, salty, sugary foods that we try to keep them from eating at home. We want the food they get at school to be the same kind of food we would serve at our own kitchen tables."
"Improving the quality of the school meals is a critical step in building a healthy future for our kids," said Vilsack. "When it comes to our children, we must do everything possible to provide them the nutrition they need to be healthy, active and ready to face the future – today we take an important step towards that goal."
The final standards make the same kinds of practical changes that many parents are already encouraging at home, including:
Ensuring students are offered both fruits and vegetables every day of the week;
Substantially increasing offerings of whole grain-rich foods;
Offering only fat-free or low-fat milk varieties;
Limiting calories based on the age of children being served to ensure proper portion size; and
Increasing the focus on reducing the amounts of saturated fat, trans fats and sodium.
A sample lunch menu with a before and after comparison is available to view and download in PDF and JPG formats.
USDA built the new rule around recommendations from a panel of experts convened by the Institute of Medicine —a gold standard for evidence-based health analysis. The standards were also updated with key changes from the 2010 Dietary Guidelines for Americans – the Federal government's benchmark for nutrition – and aimed to foster the kind of healthy changes at school that many parents are already trying to encourage at home, such as making sure that kids are offered both fruits and vegetables each day, more whole grains, and portion sizes and calorie counts designed to maintain a healthy weight.
USDA received an unprecedented 132,000 public comments on its proposed standards (available on the web at www.regulations.gov) – and made modifications to the proposed rule where appropriate. USDA Under Secretary Kevin Concannon said: "We know that robust public input is essential to developing successful standards and the final standards took a number of suggestions from stakeholders, school food service professions and parents to make important operational changes while maintaining nutritional integrity."
The new standards are expected to cost $3.2 billion over the next five years -- less than half of the estimated cost of the proposed rule and are just one of five major components of the Healthy Hunger Free Kids Act, now implemented or under development, that will work together to reform school nutrition. In addition to the updated meal standards, unprecedented improvements to come include:
The ability to take nutrition standards beyond the lunchline for the first time ever, foods and beverages sold in vending machines and other venues on school campuses will also contribute to a healthy diet;
Increased funding for schools – an additional 6 cents a meal is the first real increase in 30 years – tied to strong performance in serving improved meals;
Common-sense pricing standards for schools to ensure that revenues from non-Federal sources keep pace with the Federal commitment to healthy school meals and properly align with costs; and
Training and technical assistance to help schools achieve and monitor compliance.
The final nutrition standards released today also provide more time for schools to implement key changes, which will be largely phased in over a three-year period, starting in School Year 2012-2013. For example, schools will be permitted to focus on changes in the lunches in the first year, with most changes in breakfast phased in during future years.
"As parents, we try to prepare decent meals, limit how much junk food our kids eat, and ensure they have a reasonably balanced diet," said First Lady Michelle Obama. "And when we're putting in all that effort the last thing we want is for our hard work to be undone each day in the school cafeteria. When we send our kids to school, we expect that they won't be eating the kind of fatty, salty, sugary foods that we try to keep them from eating at home. We want the food they get at school to be the same kind of food we would serve at our own kitchen tables."
"Improving the quality of the school meals is a critical step in building a healthy future for our kids," said Vilsack. "When it comes to our children, we must do everything possible to provide them the nutrition they need to be healthy, active and ready to face the future – today we take an important step towards that goal."
The final standards make the same kinds of practical changes that many parents are already encouraging at home, including:
Ensuring students are offered both fruits and vegetables every day of the week;
Substantially increasing offerings of whole grain-rich foods;
Offering only fat-free or low-fat milk varieties;
Limiting calories based on the age of children being served to ensure proper portion size; and
Increasing the focus on reducing the amounts of saturated fat, trans fats and sodium.
A sample lunch menu with a before and after comparison is available to view and download in PDF and JPG formats.
USDA built the new rule around recommendations from a panel of experts convened by the Institute of Medicine —a gold standard for evidence-based health analysis. The standards were also updated with key changes from the 2010 Dietary Guidelines for Americans – the Federal government's benchmark for nutrition – and aimed to foster the kind of healthy changes at school that many parents are already trying to encourage at home, such as making sure that kids are offered both fruits and vegetables each day, more whole grains, and portion sizes and calorie counts designed to maintain a healthy weight.
USDA received an unprecedented 132,000 public comments on its proposed standards (available on the web at www.regulations.gov) – and made modifications to the proposed rule where appropriate. USDA Under Secretary Kevin Concannon said: "We know that robust public input is essential to developing successful standards and the final standards took a number of suggestions from stakeholders, school food service professions and parents to make important operational changes while maintaining nutritional integrity."
The new standards are expected to cost $3.2 billion over the next five years -- less than half of the estimated cost of the proposed rule and are just one of five major components of the Healthy Hunger Free Kids Act, now implemented or under development, that will work together to reform school nutrition. In addition to the updated meal standards, unprecedented improvements to come include:
The ability to take nutrition standards beyond the lunchline for the first time ever, foods and beverages sold in vending machines and other venues on school campuses will also contribute to a healthy diet;
Increased funding for schools – an additional 6 cents a meal is the first real increase in 30 years – tied to strong performance in serving improved meals;
Common-sense pricing standards for schools to ensure that revenues from non-Federal sources keep pace with the Federal commitment to healthy school meals and properly align with costs; and
Training and technical assistance to help schools achieve and monitor compliance.
The final nutrition standards released today also provide more time for schools to implement key changes, which will be largely phased in over a three-year period, starting in School Year 2012-2013. For example, schools will be permitted to focus on changes in the lunches in the first year, with most changes in breakfast phased in during future years.
Federal Reserve's Statement on Why It Plans to Keep Interest Rates Low Through 2014
Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee’s dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Sarah Bloom Raskin; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant exceptionally low levels of the federal funds rate.
President Obama's Statement on the Rescue of Hostages in Somalia
NOTE: Seal Team 6, the same unit that killed Osama bin Laden, successfully rescued two hostages on Monday, including American Jessica Buchanan. Here is the President's statement on that mission:
On Monday, I authorized an operation to rescue Jessica Buchanan, an American citizen who was kidnapped and held against her will for three months in Somalia. Thanks to the extraordinary courage and capabilities of our Special Operations Forces, yesterday Jessica Buchanan was rescued and she is on her way home. As Commander-in-Chief, I could not be prouder of the troops who carried out this mission, and the dedicated professionals who supported their efforts.
Jessica Buchanan was selflessly serving her fellow human beings when she was taken hostage by criminals and pirates who showed no regard for her health and well-being. Last night I spoke with Jessica Buchanan’s father and told him that all Americans have Jessica in our thoughts and prayers, and give thanks that she will soon be reunited with her family. The United States will not tolerate the abduction of our people, and will spare no effort to secure the safety of our citizens and to bring their captors to justice. This is yet another message to the world that the United States of America will stand strongly against any threats to our people.
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