Direct Loans: 11/16/11

Wednesday, November 16, 2011

Chat with autos reporter Jerry Hirsch

Thinking about buying a new car? Interested in automakers’ latest offerings?

Times autos writer Jerry Hirsch is at the L.A. Auto Show and will be chatting with readers at noon Thursday about what’s in store when the doors open to the public on Friday.

As Hirsch and colleagues David Undercoffler and Susan Carpenter have reported, Ford has a new-look Escape sport utility vehicle; Mazda is unveiling its newest small SUV, the CX-5; Land Rover is showing off its DC100 concept cars; and Hyundai has revived the Azera.

And for those who are ready to buy, Hirsch also will share tips on what to think about when test-driving a vehicle.

Come back to the Times’ Auto Show page at noon to take part.

Jerry Hirsch chats from L.A. Auto Show

Photo: The new Mazda CX-5 at the Los Angeles Auto Show. Credit: Allen J. Schaben / Los Angeles Times

Ask Laz: Work-from-home offers [Video]

Are offers of big money for work-from-home jobs legit? L.A. Times consumer columnist David Lazarus offers his advice.

Eurozone bond yields rise again despite ECB buying

European government bond yields mostly continued to rise Wednesday, even as the European Central Bank apparently ramped up purchases to try to calm investors.

The jump in interest rates in recent days signals a further spreading of the debt-crisis contagion from Italy to other countries, as investors grow increasingly fearful about governments' abilities to pay their debts.

The ECB’s purchases did help push Italian bond yields modestly lower. The 10-year Italian bond slipped to 7.00% from 7.07% on Tuesday.

But 10-year bond yields rose in France, Spain, Austria and Finland. The French 10-year yield edged up to 3.71%, the highest since April, from 3.68% on Tuesday.

Market yields rise as bond prices fall. Over the last week, nervous investors have been dumping Eurozone bonds, even those of countries still rated AAA, such as France and Austria.

Financial markets have been looking to the European Central Bank to halt the contagion. In theory, the ECB could commit to buying unlimited quantities of bonds to try to hold down rates. But the bank has seemed reluctant to act aggressively, and Germany and France apparently are clashing over how big a role the ECB should play.

Separately, Reuters reported that the head of Italian banking giant UniCredit had urged the ECB to increase access to borrowing for Italian banks, pointing up funding issues for the lenders.

The euro currency slipped for a third day, off 0.1% to $1.353. The euro has tumbled from $1.42 three weeks ago.

European stock markets rallied off their lows for the day, closing higher after two days of losses. The Italian market rose 0.8%, French stocks rose 0.5% and the Swiss market added 0.4%.

Spain pays the price for regional borrowing binge

Europe's mess gives U.S. a reprieve on debt comeuppance

-- Tom Petruno

Photo: The euro symbol outside the European Central Bank's headquarters in Frankfurt. Credit: Bernd Kammerer / Associated Press

Lawmakers slam Fannie Mae, Freddie Mac CEOs over pay and bonuses

The chief executives of Fannie Mae and Freddie Mac faced bipartisan outrage Wednesday over multimillion-dollar salaries and large bonuses at the seized housing finance giants, which still owe the government a combined $150 billion in the largest financial crisis bailout.

"Should you profit while the taxpayer is paying the bill?" asked Rep. Darrell Issa (R-Vista), chairman of the House Oversight and Government Reform Committee.

He summoned Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles "Ed" Haldeman Jr. to testify before his committee. The hearing came a day after another House panel voted overwhelmingly to suspend large executive compensation packages at the two companies and align their salaries with that of government employees.

The total compensation for the top six executives at Fannie and Freddie for 2009 and 2010 was $35.4 million, with Williams and Haldeman receiving about half of that. Each of them could take home as much as $6 million apiece in salary and bonuses in 2011.

Rep. Carolyn Maloney (D-N.Y.) said taxpayers were upset because Fannie and Freddie continue to lose money and require additional bailout money.

"It’s hard for them to understand how executives get $6 million in pay for a failing entity," she said.

The salary and compensation were defended by Williams, Haldeman and Edward DeMarco, the latter of whom is the acting director of the Federal Housing Finance Agency, which has overseen Fannie and Freddie since they were put in a government conservatorship in 2008 because they were on the brink of failure.

The three said executive compensation has been dramatically reduced since the companies were seized but that it remained important to attract and keep skilled people to manage the firms' combined $5 trillion in mortgage-backed securities to prevent further taxpayer losses and additional damage to the housing market.

"I understand the outrage," Haldeman said. "We have significantly reduced executive compensation and overall spending at Freddie Mac, but we have tried to do it in a way that does not risk disrupting the functioning of the company."

DeMarco, who earns $239,555 a year as the independent government regulator of Fannie and Freddie, said that the top executives who caused the problems at Fannie and Freddie before 2008 are no longer there and that it was difficult to find qualified people to help run the companies.

"Others may believe that this sort of talent is easily and quickly hired at compensation far below that of
competing private firms, but I do not," DeMarco said.

But that didn't satisfy some lawmakers, who said Fannie and Freddie should be able to find people who do not need to make six-figure salaries.

Rep. Trey Gowdy (R-S.C.) said that there have been complaints for years about the pay of federal judges compared with that in the private sector and that those jobs are still coveted by lawyers.

"I find it bitterly ironic that the total compensation for the United States Supreme Court justices is less than [what] either of these two men made," Gowdy said.

Fannie Mae loss widens, asks taxpayers for $7.8 billion

Obama administration ramps up mortgage refinancing effort

Fannie Mae and Freddie Mac replacements still uncertain, Treasury says

-- Jim Puzzanghera in Washington

Photo: Fannie Mae Chief Executive Michael Williams and Freddie Mac Chief Executive Charles "Ed" Haldeman Jr. take the oath before testifying before the House Oversight and Government Reform Committee on Wednesday. Credit: Getty Images

30 million Americans to use restaurants for Thanksgiving dinner

So much for battling supermarket crowds and cleaning a gravy-drenched kitchen –- 30 million Americans will rely on restaurants for their Thanksgiving meals.

The National Restaurant Assn. says that 14 million people will eat their turkey dinner at a restaurant while 16 million will get takeout for all or part of their feast.

Six in 10 said that eating out is just more convenient. Local restaurants such as Campanile and even chains such as Boston Market will offer dine-in and to-go Thanksgiving dinners.

Other rationales for using restaurant-cooked food: Many diners will be traveling without access to kitchens, some don’t have the space to host a home-cooked meal, others aren’t good cooks or don’t have time to prepare a self-made feast while several just prefer the taste of restaurant food.

But dinner-table Turkey Day festivities are still the norm, with 55% of Americans eating a meal in their own homes and 46% eating at someone else’s. Still, with the cost of Thanksgiving meal ingredients on the rise, outside eateries will increasingly play into the holiday.

And on Black Friday, 32 million Americans will duck into a restaurant for a respite from frantic shoppers.

Study finds chemical BPA in popular Thanksgiving canned foods

Price of Thanksgiving dinner up 13%, biggest jump in two decades

-- Tiffany Hsu

Photo: Matthew Mead / Associated Press

Fresno dairy raw milk products recalled by state

California food safety regulators have placed a recall and quarantine order on raw milk products from a Fresno dairy, Organic Pastures.

All milk products except cheese aged a minimum of 60 days must be pulled from retail stores, and consumers are urged to dispose of any remaining products in their homes, said the California Department of Food and Agriculture.

The quarantine order came after state health authorities identified a cluster of five children infected between August and October with the same strain of the bacteria E. coli 0157:H7 in Contra Costa, Kings, Sacramento and San Diego counties. An investigation revealed that the only common factor was the drinking of raw milk from Organic Pastures.

State milk and dairy food inspectors have begun a full check of the Organic Pastures facilities.

Organic Pastures marketing manager Kaleigh Lutz said that the dairy's own testing has been negative for presence of pathogens. The family-owned company is working with Food and Agriculture to resolve the investigation. Organic Pasture's organic beef, raw cheese and organic pastured eggs are not affected by the recall.

Symptoms of E.coli infection include abdominal cramps and diarrhea, which is often bloody, officials said. Most people recover within a week, but some victims need to be hospitalized.

Raw milk crackdown went too far, defense attorney says

Food borne pathogens carry devastating long-term effects

-- Marc Lifsher

Photo: A cow whose milk has not been subject to a California recall is being milked for fans of nonpasteurized milk. Credit: Ted S. Warren / Associated Press

Consumer Confidential: Google Music, iTunes Match, no-job majors

Here's your West-End-girls Wednesday roundup of consumer news from around the Web:

-- Google has learned to sing. The searchmeister is entering the online music market with a new service that will let users store songs online and listen to tracks on multiple devices. Google has expanded into music, television and movies to bolster sales of devices running its Android mobile software. The company is also seeking rights for its Google+ social-network users to share music with each other. On the eve of the debut, Google reached an agreement with Sony’s music unit. Universal and EMI have already signed on. Songs will cost 99 cents to $1.29, though Google may offer discounts. (Bloomberg)

-- Not to be outdone, Apple has rolled out a new iTunes Match service. For $24.99, iTunes account holders can store their entire iTunes library, plus songs from their CDs, in the cloud that is the Internet. The library contents are then available to listen to on computers and iOS devices, including iPhones. The program differs from Google Music and Amazon Cloud Player because iTunes Match isn't based on uploading your music then listening to it via a Web-based player that streams your songs. Instead, it determines which songs in your collection are available in the iTunes Store, which boasts some 20 million songs. The program automatically adds these songs to iCloud. Songs that aren't in iTunes can be uploaded by the user. (Lifehacker)

-- Not all college majors are created equal -- at least when it comes to giving you a leg up in the job market. College majors with high unemployment rates include a variety of psychology degrees, fine arts and architecture, according to Census statistics. Here are the Top 10 majors (or should that be Bottom 10?) for not getting a job: Clinical psychology (19.5% unemployment rate), miscellaneous fine arts (16.2%), U.S. history (15.1%), library science (15%), military technologies (10.9%), educational psychology (10.9%), architecture (10.6%), industrial and organizational psychology (10.4%), miscellaneous psychology (10.3%), linguistics and comparative literature (10.2%). (MarketWatch)

-- David Lazarus

Photo: Google is launching a new music service to compete with Apple's iTunes. Credit: Ralph Orlowski / Getty Images

Ten years later, TSA screening still frustrates air travelers

Ten years since the Transportation Security Administration was launched, the airport screening process remains among the top frustrations for most air travelers, a new survey found.

When asked to list their top five frustrations with air travel, a majority of air travelers who were surveyed listed four gripes related to the TSA's security checkpoints.

The findings came from an online survey by the U.S. Travel Assn., the nation's largest travel trade group. It was released to mark the 10th anniversary of the Aviation and Transportation Security Act, which created the TSA in November 2001. The association surveyed 600 Americans who traveled by air in the last 12 months.

The top five frustrations cited by air travelers:

1. People who bring too many carry-on bags through the security checkpoint (72.4%).

2. Uncomfortable seats on an airplane (70.4%).

3. The wait time to clear the TSA checkpoint (68%).

4. Having to remove shoes, belts and jackets at the T.A checkpoint (62.3%).

5. TSA employees who are not friendly (42.4%).

But the survey offered some good news for the TSA: 66% of air travelers said they are somewhat or very satisfied with the TSA's overall performance. The satisfaction rate was lower, 54.6%, for frequent travelers.

Also, nearly 75% of travelers said they were somewhat or very satisfied with the TSA's recent announcement that the agency will eventually phase out the requirement for passengers to remove their shoes.

John Wayne Airport to get upgraded full-body scanners

TSA officers to try interview technique

-- Hugo Martin

Photo: TSA agents search passengers at Los Angeles International Airport. Credit: Los Angeles Times

Federal financial fraud prosecutions tumble to lowest level in 20 years

Financial criminals are facing the lowest number of federal prosecutions in at least 20 years, according to a new report.

The government has filed 1,251 new prosecutions against financial institution fraud so far this fiscal year, according to the Transactional Records Access Clearinghouse at Syracuse University. If the same pace holds, federal attorneys will file 1,365 such cases by the end of the year –- the lowest number since at least 1991.

The report, compiled from Justice Department data gleaned through the Freedom of Information Act, considers crimes involving crooked mortgage brokers, bank executives with something to hide and accounts hiding illegal activity.

The expected volume of prosecutions by the end of 2011 would be 2.4% smaller than that of last year, 28.6% thinner than that of five years ago and less than half the amount from a decade ago. The number of federal bank fraud cases has slipped every year since 1999.

While U.S. Attorneys kept busy in districts such as Miami, Manhattan and Seattle, six of the country’s 90 districts, including Indianapolis and Baton Rouge, filed no financial fraud cases at all.

But that doesn’t mean the government isn’t keeping busy with other types of criminal prosecutions, which have nearly doubled in two decades.

Ex-Oregon congressman Wester Cooley pleads guilty to tax evasion