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Tuesday, November 8, 2011

Californians pessimistic about economy, plan lighter holiday spending

The vast majority of California residents say the state is on the wrong track, with an economy that they consider to be just fair or poor with no signs of recovering.

Nearly 9 in 10 say that job opportunities aren’t good and almost half say that those living in California are worse off than people in other states, according to a new report from Citibank.

Still, 63% believe that the state is an excellent or at least good place to reside, according to the survey.

But that doesn’t mean they’re shielded from recessionary winds. Nearly 60% said they’ve forever changed their spending and saving habits. Nearly three-quarters are eating out at restaurants less, with two thirds avoiding premium foods and other gourmet offerings.

More than 70% have backed off credit card purchases, and nearly the same number are now using coupons. Four in 10 Californians have shaken up their living situation to save money.

During the holiday season, only 12% plan to spend more money than they did last year.

California employers add 11,800 new jobs in September

-- Tiffany Hsu

Photo: Tim Boyle / Getty Images

First nationwide test of Emergency Alert System set for Wednesday

This is a test. This is only a test.

At 11:00 a.m. Wednesday, nearly all U.S. radio stations and television channels (including cable and satellite) will simultaneously pause for the first nationwide test of the Emergency Alert System.

For 30 seconds, "This is a test" will be heard, and on many televisions the message will appear on the screen.

The test will be conducted by the Federal Emergency Management Agency, better known as FEMA, in coordination with the Federal Communications Commission and National Oceanic and Atmospheric Administration.

Over the last 15 years, state and local governments have used the Emergency Alert System, also called EAS, to send weather and emergency alerts to residents. But there has never been a national activation of the system, according to FEMA’s website.

The purpose of the test Wednesday, FEMA said, will be to evaluate how well the system will be able to deliver a nationwide message. FEMA chose Wednesday because it falls between the end of hurricane season and the usual start of severe winter weather, although a late-October storm that slammed into the Northeast jumped the gun this year.

The California Emergency Management Agency urges state residents to use the occasion to remind themselves to get ready for emergencies. Information on preparedness can be found at www.calema.ca.gov.

Just remember, this is only a test.

-- Rosanna Xia

Inflation and property prices ease in China

Inflation in China eased for the third consecutive month in October on government policy tightening that has also started to drive residential property prices down with greater momentum.

China’s annual inflation rate fell to 5.5%, the country's National Bureau of Statistics said Wednesday, down from 6.1% in September.

The decline potentially gives the central government room to ease new credit after months of strict controls aimed at cooling down the country’s overheated economy.

Looser bank lending may soon be necessary to blunt the effects of another global recession and carefully guide economic growth down from unsustainable annual rates of 9% to 10%.

“Weakness in the export sector will be the main hindrance to economic growth in the coming quarters,” Jing Ulrich, an economist for J.P. Morgan, said in a research note. “However, with falling inflation clearing the way for policy easing, we believe that China will manage a ‘soft landing,’ achieving respectable GDP growth of 8.3% in 2012.”

That will require delicate policy tinkering as signs are growing that China’s frothy property market has begun its long-awaited correction.

A national index of property prices in 100 cities has declined two consecutive months as cash-strapped developers are experiencing steep declines in sales.

Tight credit and rules targeting speculators could drive prices down 10% to 30%, according to Barclays Capital.

That’s a relief to potential homebuyers priced out of the market and to a government worried a property bubble was stoking social instability.

So far, only angry homeowners have openly protested changes in prices. Last month, hundreds gathered outside the offices of a Shanghai developer that cut prices, demanding refunds and contract cancellations.

The government risks sinking prices at its own peril. Real estate accounts for a fifth of China’s economy, according to some estimates, and contributes up to half of local government revenue in the form of public land sales.

Still, Premier Wen Jiabao remains committed to driving residential prices down.

“We aim to lead housing prices back to a reasonable level and promote a healthy development of the real estate industry at the same time,” Wen told reporters Sunday.

China's economy slows in third quarter

Inflation remains a worry in China

-- David Pierson

twitter.com/dhpierson

Photo: Two women look at buildings under construction in Chongqing, China. Credit: Getty Images

Ex-Oregon congressman Wester Cooley pleads guilty to tax evasion

Former Oregon congressman Wester Cooley pleaded guilty in Los Angeles federal court to a tax charge related to the allegedly fraudulent sale of stock in an online auction site.

Wester Cooley, who served in Congress from 1995 to 1997, had been charged with seven felonies surrounding the sale of more than $10 million of private stock in Tujunga-based Bidbay.com and related companies from 2000 to 2003.

Under an agreement with federal prosecutors, Cooley, 79, pleaded guilty to the single tax fraud charge Monday before U.S. District Judge Dean D. Pregerson.

Cooley, who is free on bond and living in Oregon, agreed to return to court Feb. 27 for sentencing. The charge carries a maximum sentence of three years in federal prison, but defense attorney Steve Escovar said he would request a lesser sentence to be served under house arrest.

The former congressman has a heart condition and dementia, his attorney said.

“I don’t think anything would be accomplished by imprisoning Mr. Cooley,” Escovar said. “He’s demonstrated acceptance of responsibility and remorse.… We’re hopeful it will be something less than 12 months.”

The plea agreement calls for Cooley to pay $3.6 million in restitution to investors. However, Cooley has no assets to repay them, Escovar said.

Prosecutors accused Cooley and two associates, George Tannous and De Elroy Beeler Jr., of falsely telling investors that they could make substantial profit because Bidbay was about to be acquired by EBay. In truth, EBay had no plans to acquire Bidbay and had sued the company for infringing on its trademark, prosecutors said.

About 400 victims invested more than $10 million in Bidbay before the fraud was discovered, prosecutors said.

Cooley was accused of diverting more than $1.1 million of investor funds for his personal use.

Tannous, a former Internal Revenue Service agent, and Beeler have also pleaded guilty to charges related to the scheme. They were listed as potential witnesses against Cooley, according to a government trial brief.

After leaving Congress, Cooley launched a vitamin company called Rose Laboratories Inc. He became a vice president for Bidbay in 2000 and served as a director on the company’s board. After allegations of the fraud were leveled in a 2002 lawsuit, Cooley sought to hide his illicit profit by giving the money to a third party to invest, prosecutors alleged.

The tax fraud charge alleged that Cooley claimed a false deduction on his 2001 tax return and failed to report $494,000 of income. The guilty plea marked the second time that the former Republican lawmaker has been convicted of a criminal charge. He was previously convicted of making false statements about his military record in an Oregon voter guide.

Admitted Countrywide data thief gets 8 months in prison

Gold price surge leads to wave of crime [Video]

-- Stuart Pfeifer

Photo: EBay headquarters in San Jose. Credit: Paul Sakuma/Associated Press

California shifts unemployment insurance payments to debit cards

The unemployment insurance checks aren't in the mail.

But that doesn't mean that eligible out-of-work Californians don't get benefits.

On Tuesday, the Employment Development Department, the state government agency that runs the unemployment and disability insurance programs, announced that it's completed the process of issuing 1.8 million debit cards to people receiving benefits.

The cards, which can be used to draw cash from Bank of America and some other ATM machines, are more convenient and secure than old-fashioned paper checks, the agency said.

"This unprecedented transition to paperless benefits is one of the largest pre-paid card roll-outs in the country," said Employment Development Department Chief Deputy Director Pam Harris. "It modernizes the purchasing power of our customers and puts them on par with the rest of the buying public."

Since December of 2010, the agency has paid out $3.7 billion in benefits for the disability and unemployment insurance programs.

The agency's debit cards provide recipients and the state with a number of benefits:

- They have no ATM fees, if used carefully.

- Beneficiaries without bank accounts do not have to pay check-cashing fees.

- They can't be lost in the mail or not delivered in the event of natural disasters.

- They can be used for most purchases anywhere that Visa debit cards are accepted.

White House scolded at Inland Empire summit with Latinos

Fewer Americans seek unemployment aid

-- Marc Lifsher

Photo: Unemployed people at the Westminster job center in Orange County. Credit: Jaec Hong/Associated Press

Raj Rajaratnam to pay record $93 million in insider-trading case

After receiving an 11-year prison sentence, Raj Rajaratnam is now getting the bill for his insider-trading misdeeds.

A judge today ordered the once-celebrated Wall Street financier, who was convicted in May of spearheading a massive insider-trading scheme, to pay a civil penalty of nearly $93 million. That comes on top of an earlier $10-million criminal fine and forfeiture of $53.8 million in ill-gotten gains.

Rajaratnam's total tab: $156.6 million.

Both the prison sentence and the $92,805,705 civil penalty are the largest ever in an insider-trading case.

“The penalty imposed today reflects the historic proportions of Raj Rajaratnam’s illegal conduct and its impact on the integrity of our markets,” Robert Khuzami, enforcement chief at the Securities and Exchange Commission, said in a statement.

The SEC alleged that Rajaratnam and more than two dozen others who have been caught up in a massive illicit-trading dragnet garnered illicit profits (or avoided losses) of more than $90 million through improper trading in at least 15 publicly traded companies.

The one-time hedge-fund kingpin was found guilty May 11 of 14 counts, including nine for securities fraud and five for conspiracy to commit securities fraud.

Galleon hedge fund billionaire Raj Rajaratnam found guilty in insider trading case

Former Goldman Sachs director Rajat Gupta arrested

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-- Walter Hamilton

Photo: Raj Rajaratnam leaving federal court after his sentencing last month. Credit: Peter Foley/Bloomberg

Amazon workers complain of heat, cold at Pennsylvania facility

Amazon.com, the world's largest Internet retailer, got lots of scrutiny in September when a Pennsylvania newspaper published a story about workers fainting and suffering other heat-related health problems when temperatures rose to triple digits inside a local distribution center.

Now, employees at Amazon's Breinigsville, Pa., facility are complaining that they're being left out in the cold.

They were forced to spend hours outside in nighttime temperatures in the 20s after they had to leave the building without coats when fire alarms sounded a year ago, the Morning Call newspaper reported last week. Several people required medical attention.

Amazon subsequently changed its evacuation policies and provided employees with cold-weather gear and hand warmers, the newspaper said. The company also said that it had installed air conditioning at the same order-fulfillment center following heat waves last summer.

Both the summer and winter incidents prompted investigations by the federal workplace safety agency, the Occupational Safety and Health Administration.

Amazon released data to the Morning Call showing that its incidence of worker injury and illness, as reported to OSHA, in U.S. warehouses between 2006 and the third quarter of 2011 was lower than the rates reported by general warehousing, automobile manufacturing and department stores.

Amazon agrees to serve as tax collector -- at a price

Amazon to alter the way it does business in California