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  1. Mr. Black says:

    Hence that raspy voice of his…

  2. stigma normally associated with such borrowing.It was one of several innovative lending mechanisms the central bank created to keep at least some credit flowing during a deepening crisis.”I will remember Chairman Ben Bernanke as an individual who – in the midst of very stressful circumstances – led the Fed in taking bold, decisive, and creative actions to avoid a global financial catastrophe,” said Dana Saporta, senior economist at Credit Suisse.The enormity of what lay ahead would not crystallize until 2008, when U.S. investment firms came under speculative attack. Only two of the five biggest, Goldman Sachs and Morgan Stanley, survived – and only because of taxpayer support.The bank bailout generated a powerful public backlash. Critics charged that the bank aid was not matched by similarly aggressive rescues for troubled homeowners or jobless Americans.But Bernanke, drawing insights from his Princeton research, argued that rescuing the financial system was central to saving the economy.His main academic focus, sparked by the experiences of his small businessman grandfather, was the central role of the Fed in creating the Great Depression when it kept monetary policy too tight and allowed banks to fail en masse.As Bernanke rewrote the rules on providing liquidity to parched financial markets, he also led an historic easing of monetary policy.By December 2008, the Fed had brought overnight interest rates down to effectively zero for the first time in its 100-year history. It then further pushed down borrowing costs with three rounds of bond purchases that have quadrupled its balance sheet to a record $3.7 trillion.Bernanke’s efforts were recognized when Time Magazine named him as “Person of the Year” in 2009, dubbing him “the most powerful nerd on the planet.”But the unconventional policy attracted critics, including those who argued it risked fanning inflation or creating asset price bubbles – concerns yet to be substantiated.When Bernanke came up for reappointment to a second four-year term in January 2010, the Senate confirmed him on a tepid 70-30 vote, the narrowest margin in the position’s history.Both Democrats and Republicans assailed his leadership, blasting him for the unpopular $182 billion taxpayer bailout of insurer American International Group and for regulatory failures that fueled the crisis. Many criticized the bank’s closeness to Wall Street.By his own admission, Bernanke failed to predict the housing bubble fall-out. In March 2007, he told Congress that “the problems in the subprime (mortgage) market seem likely to be contained.” Several other times he expressed optimism about the financial system’s soundness.RECOVERY NOTAnother Bernanke legacy will be his push for greater Fed transparency, particularly in convincing his colleagues to adopt a numerical inflation target.He also created a more collegial, less hierarchical central bank than the one Greenspan left behind.”One of the things that I hoped to accomplish and was not entirely successful at … was to try to depersonalize, to some extent, monetary policy,” he told reporters in March 2013.Bernanke might prefer to leave with the nation on a more solid economic footing but reality has not cooperated. U.S. unemployment remains high at 7.3 percent and labor force participation continues to decline.There also are doubts about the Fed’s rosy 2014 growth forecasts given a deteriorating global outlook, with rising tensions in key emerging markets such as India.Fed officials’ faith in the recovery’s strength is sufficiently weak that they surprised markets with a decision not to begin cutting back bond purchases in September. That sparked criticism about the Fed’s communications – despite Bernanke’s transparency drive.Some now see the decision as prescient given fresh clouds of economic uncertainty from a federal government shutdown and a political standoff over raising the nation’s $16.7 trillion debt ceiling that could lead to a default.(Additional reporting by Alister Bull; Editing by Krista Hughes, Marilyn W. Thompson and Tim Dobbyn)TI Media in talks with L’Espresso on broadcasting tie-upMILAN (Reuters) – Italy’s Telecom Italia Media has signed a non-binding term sheet with publisher L’Espresso to pave the way for a tie-up of their digital broadcasting activities.In a statement on Monday the media company said the operation would generate industrial synergies and create a company with five national bandwidth assets, also known as multiplexes, owned by Telecom Italia Media.The company, controlled by debt-laden phone group Telecom Italia, said its board had decided to continue talks to reach a final agreement.Two sources familiar with the matter said the newly created broadcasting company, which would sell bandwidth in competition with Mediaset and state broadcaster RAI, could be put up for sale at a later date.”The rationale of the operation is to put together the assets and extract value from them, probably through the sale of a stake or of the entire entity,” one source told Reuters.The value of each multiplex is between 80 million euros ($100 million) and 200 million euros and could benefit from a recovery of the Italian advertising market, analysts said.Mediobanca advised Telecom Italia Media and Banca IMI advised L’Espresso.Shares in Telecom Italia Media closed up 2.5 percent on Monday and L’Espresso was up 4.75 percent, outperforming the broader Milan bourse.($1 = 0.7368 euros)(Reporting by Danilo Masoni, editing by Stephen Jewkes and David Evans)Timberlake celebrates return to music with 2nd No. 1 album this yearLOS ANGELES (Reuters) – Pop singer Justin Timberlake scored his second chart-topping album this year on Wednesday as his latest record debuted at No. 1 on the weekly Billboard 200 album chart, capping the singer’s successful return to the musical spotlight.Timberlake’s “The 20/20 Experience – 2 of 2,” which follows the first set of 10 songs released in March this year, sold 350,000 copies in its first week, according to figures compiled by Nielsen SoundScan.The first installment of “The 20/20 Experience” sold 968,000 copies, the biggest opening week sales of the year so far.Timberlake, 32, returned to music after more than a five-year hiatus, during which he focused on his acting career. His debut single “Suit & Tie” featuring rapper Jay Z became a chart-topper in January, and his album was received well by fans and critics.Other new albums in the top 10 this week include 16-year-old New Zealand singer-songwriter Lorde at No. 3 with her debut album “Pure Heroine,” selling 129,000 copies.The album has been driven by the popularity of the single “Royals,” which topped Billboard’s digital songs chart this week, selling more than 2 million download copies in the United States. Lorde’s album also garnered nearly 6 million U.S. plays on online streaming platform Spotify in its first week.Country singer Tyler Farr entered the chart at No. 5 with his debut album “Redneck Crazy,” while Los Angeles sister trio Haim came in at No. 6 with the critically acclaimed debut album “Days Are Gone.”On the digital songs chart, which measures song downloads, the top three songs remained steady this week with Lorde’s “Royals” at No. 1, Katy Perry’s “Roar” at No. 2 and Miley Cyrus’ “Wrecking Ball” at No. 3.A surprise entry on the digital songs chart this week came in the form of British 1960s rock band Badfinger’s “Baby Blue” at No. 32. The song scored 37,000 downloads in the past week after being featured in the closing scene in the final episode of AMC’s drug drama “Breaking Bad” last month.Overall, album sales for the week ending October 6 totaled 4.8 million, down 10 percent from the comparable week in 2012, according to Billboard.(Editing by Eric Kelsey and Stacey Joyce)Time not on the side of older Americans in housing slumpCHICAGO (Reuters) – Prior to 2008, many baby boomers assumed they were set for retirement. They would fund those golden years by tapping into their homes if they hadn’t saved enough in their 401(k) plans.But home equity no longer looks like a safe Plan B for a fast-growing group of pre-retirees and seniors.About 3.5 million homeowners are “underwater” on their mortgages, meaning they owe more than their properties are worth, according to a report released last week by the AARP Public Policy Institute. The rate of foreclosures is lower for homeowners under age 50, while the 50+ population experienced a much higher rate of growth in foreclosures from 2007 to 2011.At the end of last year, 2.92 percent of mortgage loans to 50+ households had been foreclosed – a whopping 873 percent increase from 2007, AARP reported. By contrast, 3.48 percent of loans to younger households had been foreclosed, with a corresponding growth rate of 729 percent.The study adds to the growing mountain of evidence that the economy has shredded retirement possibilities, especially for low and middle-class households. Lower home values are especially devastating for these demographic groups.The Federal Reserve Bank reported recently in its triennial Survey of Consume Finances that housing accounted for 51 percent of household wealth for middle-income households, compared with just 19 percent for households in the top ten percent of income.HIGHEST ACTIVITYForeclosure activity remains high in many parts of the country, according to a report released today by RealtyTrac, an online marketplace for foreclosed properties. The report found that the number of foreclosures rose in 59 percent of the nation’s top metro markets.California accounted for 10 of the top 20 metro foreclosure rates during the first half of the year; Florida accounted for four of the top 20 metro foreclosure rates, and Illinois accounted for two of the top 20. Georgia, Arizona, Nevada and Colorado each had one city in the top 20.”Even if seniors are only a little underwater, that can be a big problem since they may be at a time when they want to make a move, and can’t easily sell,” says Andrea Alegria, an industry analyst specializing in real estate at IBISWorld. “They don’t have the benefit of time, which would allow them to wait for the property’s value to increase.”AARP found that 53 percent of foreclosures among homeowners over age 50 occurred on loans where borrower income was between $50,000 and $124,999; another 32 percent occurred where borrower income was less than $50,000. Last year, the foreclosure rate for Hispanics over age 50 was 3.9 percent and the foreclosure rate for African Americans was 3.5 percent – double the rate of 1.9 percent for whites.NO TIME TO WAITEven if a housing recovery does get underway, older homeowners who are underwater aren’t likely to have sufficient time to wait out a full recovery, which likely will take years, if not decades. About half (51 percent) of families headed by a person age 65 to 74 had no money in retirement savings accounts in 2010, according to Federal Reserve data. And among those with savings, half had less than $100,000. Among families headed by a person age 75 and older, 67 percent had no money in retirement savings accounts in 2010.”Many of these seniors are relying entirely on Social Security,” says Debra Whitman, executive vice president for policy at the AARP Policy Institute.That leaves many older adults with very limited options when mortgage problems surface. “Many will look to family members for housing – we are seeing a lot of multi-generational housing,” says Alegria. “Or they’ll rent.”Experts advise seniors facing foreclosure to seek counseling – but only from one of the network of free counseling services approved by the U.S. Department of Housing and Urban Development (HUD). A federal task force has been seeking to crack down on scams by fee-based counseling services that promise vulnerable homeowners that they can save their homes and lower their mortgage payments.”A lot of the fee-based services we think of as scams,” says Bruce Dorpalen, executive director of the National Housing Resource Center, a nonprofit organization advocating for housing counseling agencies. “They aren’t as well-connected or as effective as the HUD-approved counseling services.” HUD’s website offers a national directory of free counseling services (), which work with mortgage lenders to try to avoid foreclosure. Housing counselors also can help homeowners organize their finances and understand mortgage options.The department also offers a 24-hour housing foreclosure hotline (888-995-4673) that can provide foreclosure assistance.The new Consumer Financial Protection Bureau (CFPB) offers a useful page of advice and resources for consumers at risk of foreclosure on its website, including HUD-approved counseling and free legal services. ().(The writer is a Reuters columnist. The opinions expressed are his own. For more from Mark Miller, see )(Follow us @ReutersMoney or . Editing by Jilian Mincer and Alden Bentley)TIMELINE – Fed’s Bernanke saw U.S. economy through turbulent timesWASHINGTON (Reuters) – President Barack Obama nominated Janet Yellen on Wednesday to take over from Federal Reserve Chairman Ben Bernanke, closing a chapter in a turbulent period for the U.S. economy that has spurred unprecedented central bank action.Following is a look at Bernanke’s two four-year terms in office, which come to a close on January 31:October 24, 2005 – President George W. Bush nominates Bernanke to four-year term as Fed chairman. Bernanke is confirmed by the Senate on January 31, 2006, and sworn in the following day.August 17, 2007 – Fed cuts discount rate it charges banks for emergency loans by 0.5 percentage point to ease growing strains in financial markets.November 14, 2007 – Fed announces it will increase frequency of its economic forecasts in an effort to improve transparency.December 2007 – U.S. economy slips into recession.December 12, 2007 – Fed launches Term Auction Facility to encourage borrowing by banks hesitant to borrow at its discount window. It was the first of several crisis-era programs the Fed would launch to keep money flowing through the economy.March 11, 2008 – Fed invokes emergency powers to launch a $200 billion Term Securities Lending Facility in which it offers Treasury securities to primary dealers against a broad range of collateral, including home mortgages, as a way to foster market liquidity. The Fed would invoke emergency powers multiple times during the crisis to launch new lending facilities.March 14, 2008 – Fed provides emergency financing to Bear Stearns through JPMorgan, the first bailout of a broker since the Great Depression.March 16, 2008 – Bear Stearns collapses and JPMorgan agrees to buy it with $30 billion in backing from the New York Federal Reserve Bank. Fed launches Primary Dealer Credit Facility for investment banks.September 7, 2008 – U.S. government takes over mortgage finance firms Fannie Mae and Freddie Mac.September 14, 2008 – Bank of America buys Merrill Lynch for about $50 billion.September 15, 2008 – Lehman Brothers becomes the largest firm in U.S. history to declare Chapter 11 bankruptcy after the Fed and Treasury fail to find a buyer and make the controversial decision not to bail out the giant investment bank.September 16, 2008 – Fed lends $85 billion to insurer American International Group to prevent its bankruptcy.September 19, 2008 – Fed begins Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility to foster liquidity in the ABCP market and money markets in general.September 21, 2008 – Morgan Stanley and Goldman Sachs become bank holding companies, giving them access to the Fed’s discount window.September 23, 2008 – Bernanke and Treasury Secretary Henry Paulson urge Congress to approve a $700 billion financial bailout fund.September 29, 2008 – Dow Jones industrial average drops 778 points, its largest one-day decline in history, after the House of Representatives fails to pass the bailout bill. The Senate passes the bill on October 1 and the House takes it up again on October 3 and this time passes it.October 8, 2008 – Fed, European Central Bank and the central banks of Canada, Britain, Switzerland and Sweden coordinate a global interest rate cut.October 21, 2008 – Fed announces a $600 billion facility to help money markets purchase certificates of deposits and commercial paper.October 27, 2008 – Fed expands support of commercial paper market with creation of a temporary Commercial Paper Funding Facility to extend liquidity to non-bank issuers of the paper.November 23, 2008 – Fed, Treasury and Federal Deposit Insurance Corp bail out Citigroup by backing $306 billion in loans and acquiring preferred shares in the bank.November 25, 2008 – Fed launches first round of quantitative easing, or QE1, with plans to buy up to $500 billion in mortgage-backed securities and $100 billion in housing agency debt.December 16, 2008 – Fed cuts overnight federal funds rate to between zero and 0.25 percent.January 16, 2009 – Fed, Treasury and FDIC bail out Bank of America by backing some $118 billion in loans and acquiring stock in the bank.February 18, 2009 – Fed policymakers add longer-run projections for GDP, unemployment and inflation to their quarterly forecasts, a move seen as effectively establishing informal inflation target.March 15, 2009 – In interview on CBS’s 60 Minutes, Bernanke says he sees “green shoots” of economic revival. It is the first television interview by a sitting Fed chairman in 20 years.March 18, 2009 – Fed announces it will expand QE1 with additional $750 billion in MBS, $100 billion in housing agency debt and $300 billion in Treasury securities. It also vows for first time to hold short-term rates near zero “for an extended period.”June 2009 – U.S. economic recession ends. The 18-month downturn was the longest and deepest since the Great Depression.August 2009 – Obama nominates Bernanke for second term.October 2009 – U.S. unemployment rate peaks at 10 percent, its highest since 1983.January 28, 2010 – Senate confirms Bernanke for second term. The 70-30 vote is the weakest endorsement of a chairman in the Fed’s 96-year history.November 3, 2010 – Fed announces second round of quantitative easing, or QE2, totaling $600 billion in longer-term Treasury bonds.April 27, 2011 – Bernanke holds Fed’s first post-meeting news conference.August 29, 2011 – Fed says plans to keep rates near zero until mid-2013.September 21, 2011 – Fed announces “Operation Twist,” a plan to exchange $400 billion of short-term Treasury bonds on its balance sheet for long-term bonds in attempt to lower longer-term interest rates.January 25, 2012 – Fed adopts inflation target for first time, setting 2 percent as the goal. It also says it expect to keep rates near zero through late 2014 and begins publishing policymakers’ projections of when they think federal funds rate should rise.September 13, 2012 – Fed announces third round of quantitative easing, or QE3. It starts by purchasing $40 billion in mortgage-backed securities per month and says it will continue to reinvest principal payments from its holdings.December 12, 2012 – With Operation Twist expiring at year end, Fed announces plan to expand QE3 by adding purchases of $45 billion worth of longer-term Treasuries per month. It also says it expects rates near zero would be appropriate as long as the jobless rate is above 6.5 percent and inflation does not threaten to top 2.5 percent.June 19, 2013 – Bernanke says Fed expects to begin to wind down QE3 by year end and bring it to full halt by mid-2014.September 18, 2013 – Bernanke says the economy is not yet strong enough to allow the Fed to begin reducing its bond buying, confounding markets which had been betting on a decision to taper the purchases.October 9, 2013 – President Barack Obama, nominating Fed Vice Chair Janet Yellen to replace Bernanke at the Fed’s helm, thanks the chairman for his service: “He has truly been a stabilizing force, not just for our country but the entire world,” he said. (Compiled by Paige Gance; Editing by James Dalgleish)Timeline: Fed’s Bernanke saw U.S. economy through turbulent timesWASHINGTON (Reuters) – President Barack Obama nominated Janet Yellen on Wednesday to take over from Federal Reserve Chairman Ben Bernanke, closing a chapter in a turbulent period for the U.S. economy that has spurred unprecedented central bank action.Following is a look at Bernanke’s two four-year terms in office, which come to a close on January 31:October 24, 2005 – President George W. Bush nominates Bernanke to four-year term as Fed chairman. Bernanke is confirmed by the Senate on January 31, 2006, and sworn in the following day.August 17, 2007 – Fed cuts discount rate it charges banks for emergency loans by 0.5 percentage point to ease growing strains in financial markets.November 14, 2007 – Fed announces it will increase frequency of its economic forecasts in an effort to improve transparency.December 2007 – U.S. economy slips into recession.December 12, 2007 – Fed launches Term Auction Facility to encourage borrowing by banks hesitant to borrow at its discount window. It was the first of several crisis-era programs the Fed would launch to keep money flowing through the economy.March 11, 2008 – Fed invokes emergency powers to launch a $200 billion Term Securities Lending Facility in which it offers Treasury securities to primary dealers against a broad range of collateral, including home mortgages, as a way to foster market liquidity. The Fed would invoke emergency powers multiple times during the crisis to launch new lending facilities.March 14, 2008 – Fed provides emergency financing to Bear Stearns through JPMorgan, the first bailout of a broker since the Great Depression.March 16, 2008 – Bear Stearns collapses and JPMorgan agrees to buy it with $30 billion in backing from the New York Federal Reserve Bank. Fed launches Primary Dealer Credit Facility for investment banks.September 7, 2008 – U.S. government takes over mortgage finance firms Fannie Mae and Freddie Mac.September 14, 2008 – Bank of America buys Merrill Lynch for about $50 billion.September 15, 2008 – Lehman Brothers becomes the largest firm in U.S. history to declare Chapter 11 bankruptcy after the Fed and Treasury fail to find a buyer and make the controversial decision not to bail out the giant investment bank.September 16, 2008 – Fed lends $85 billion to insurer American International Group to prevent its bankruptcy.September 19, 2008 – Fed begins Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility to foster liquidity in the ABCP market and money markets in general.September 21, 2008 – Morgan Stanley and Goldman Sachs become bank holding companies, giving them access to the Fed’s discount window.September 23, 2008 – Bernanke and Treasury Secretary Henry Paulson urge Congress to approve a $700 billion financial bailout fund.September 29, 2008 – Dow Jones industrial average drops 778 points, its largest one-day decline in history, after the House of Representatives fails to pass the bailout bill. The Senate passes the bill on October 1 and the House takes it up again on October 3 and this time passes it.October 8, 2008 – Fed, European Central Bank and the central banks of Canada, Britain, Switzerland and Sweden coordinate a global interest rate cut.October 21, 2008 – Fed announces a $600 billion facility to help money markets purchase certificates of deposits and commercial paper.October 27, 2008 – Fed expands support of commercial paper market with creation of a temporary Commercial Paper Funding Facility to extend liquidity to non-bank issuers of the paper.November 23, 2008 – Fed, Treasury and Federal Deposit Insurance Corp bail out Citigroup by backing $306 billion in loans and acquiring preferred shares in the bank.November 25, 2008 – Fed launches first round of quantitative easing, or QE1, with plans to buy up to $500 billion in mortgage-backed securities and $100 billion in housing agency debt.December 16, 2008 – Fed cuts overnight federal funds rate to between zero and 0.25 percent.January 16, 2009 – Fed, Treasury and FDIC bail out Bank of America by backing some $118 billion in loans and acquiring stock in the bank.February 18, 2009 – Fed policymakers add longer-run projections for GDP, unemployment and inflation to their quarterly forecasts, a move seen as effectively establishing informal inflation target.March 15, 2009 – In interview on CBS’s 60 Minutes, Bernanke says he sees “green shoots” of economic revival. It is the first television interview by a sitting Fed chairman in 20 years.March 18, 2009 – Fed announces it will expand QE1 with additional $750 billion in MBS, $100 billion in housing agency debt and $300 billion in Treasury securities. It also vows for first time to hold short-term rates near zero “for an extended period.”June 2009 – U.S. economic recession ends. The 18-month downturn was the longest and deepest since the Great Depression.August 2009 – Obama nominates Bernanke for second term.October 2009 – U.S. unemployment rate peaks at 10 percent, its highest since 1983.January 28, 2010 – Senate confirms Bernanke for second term. The 70-30 vote is the weakest endorsement of a chairman in the Fed’s 96-year history.November 3, 2010 – Fed announces second round of quantitative easing, or QE2, totaling $600 billion in longer-term Treasury bonds.April 27, 2011 – Bernanke holds Fed’s first post-meeting news conference.August 29, 2011 – Fed says plans to keep rates near zero until mid-2013.September 21, 2011 – Fed announces “Operation Twist,” a plan to exchange $400 billion of short-term Treasury bonds on its balance sheet for long-term bonds in attempt to lower longer-term interest rates.January 25, 2012 – Fed adopts inflation target for first time, setting 2 percent as the goal. It also says it expect to keep rates near zero through late 2014 and begins publishing policymakers’ projections of when they think federal funds rate should rise.September 13, 2012 – Fed announces third round of quantitative easing, or QE3. It starts by purchasing $40 billion in mortgage-backed securities per month and says it will continue to reinvest principal payments from its holdings.December 12, 2012 – With Operation Twist expiring at year end, Fed announces plan to expand QE3 by adding purchases of $45 billion worth of longer-term Treasuries per month. It also says it expects rates near zero would be appropriate as long as the jobless rate is above 6.5 percent and inflation does not threaten to top 2.5 percent.June 19, 2013 – Bernanke says Fed expects to begin to wind down QE3 by year end and bring it to full halt by mid-2014.September 18, 2013 – Bernanke says the economy is not yet strong enough to allow the Fed to begin reducing its bond buying, confounding markets which had been betting on a decision to taper the purchases.October 9, 2013 – President Barack Obama, nominating Fed Vice Chair Janet Yellen to replace Bernanke at the Fed’s helm, thanks the chairman for his service: “He has truly been a stabilizing force, not just for our country but the entire world,” he said.(Compiled by Paige Gance; Editing by James Dalgleish)To maximize retirement benefits, know the rulesNEW YORK (Reuters) – When the oldest baby boomers start turning 66 this year, they’ll be eligible to file for full Social Security benefits. But pollsters say many Americans plan to work well past that age, reflecting tough economic times and a general desire to reshape the idea of retirement.What will working longer mean for the Social Security benefits of these seniors? How about Medicare, which has filing rules that are closely linked to those of Social Security and employment status?These are important questions for a large portion of the U.S. population; about 10,000 seniors will turn 66 every day over the next 20 years. Social Security and Medicare both have detailed rules governing the interplay of work and benefits, and making the right decisions make a difference of thousands of dollars in enhanced Social Security benefits or the Medicare premiums that you pay.I’ll be looking at how work and entitlement benefits are intertwined in two columns, starting today with Social Security.Social Security’s rules encourage seniors to keep working at least until the Full Retirement Age (FRA) of 66. You can work and receive full benefits starting at that age. You can start receiving Social Security as young as 62, but if you’re working, $1 will be deducted from benefit payments for every $2 earned over $14,640. Although this is often described as a penalty, the withheld benefits are added back to your benefits, after you reach 66, using a complex actuarial formula.Social Security offers another important incentive to forestall filing until at least 66. Benefits are reduced permanently for every year that you file before the FRA, and increased for every year that you wait to file beyond it, up till the age of 70.That’s intended to keep the program actuarially fair, paying roughly equal lifetime benefits to everyone in the program. But delaying does deliver a major boost to monthly income – and it serves as an inducement to work longer and wait to receive benefits.For example, filing at 62 means you retired four years early, and the net effect is a permanent reduction in annual benefits of 25 percent. On the other hand, if you wait until age 70, your annual benefit will be 32 percent higher than if you started at age 66.Married couples can coordinate these decisions to boost benefits through smart navigation of Social Security’s survivor and spousal benefits rules.The survivor rules permit widows to receive up to 100 percent of a deceased spouse’s benefit or her own benefit, whichever is greater; the spousal rules permit receiving the greater of her own benefit or up to half of a living spouse’s benefit.The survivor rule has a very simple implication for retirement timing decisions: couples usually benefit when the spouse with the higher lifetime earning history (which translates into a bigger Social Security check) delays filing.That’s most often the man – and men can expect their wives to outlive them. A delayed filing by the higher-earning husband usually sets the stage for the widow to receive a higher benefit down the road, after his death.But that doesn’t mean couples must forego Social Security entirely while the husband delays filing, notes Jim Blankenship, a financial planner in New Berlin, Illinois and author of “A Social Security Owner’s Manual: Your Guide to Social Security Retirement, Dependent’s, and Survivor’s Benefits” ().Blankenship suggests that the lower-earning spouse files for her own benefit at 62, receiving the lower rate, or at her FRA. When the higher-earning spouse files to receive the increased, delayed benefits, the spouse is eligible to shift to the spousal benefit (again, based on half of the spouse’s benefit) in situations where that makes sense.”That brings in some benefits while the higher-earning spouse – usually the husband – keeps working and earning credits toward a higher benefit,” he says.Blankenship takes it one step further: He suggests that the higher-earning spouse files for a spousal benefit while he waits to file for his own benefits.”It’s not a lot of money in most cases, but it is money you’re entitled to and should receive,” he says.Another perfectly kosher maneuver is known as a “file and suspend.” Let’s say the higher-earning husband wants to continue delaying taking benefits past his FRA in order to keep accruing credits. But the lower-earning wife would like to file for spousal benefits on the husband’s record.Here’s how the “file-and-suspend” works:1. The higher-earning spouse files for benefits at his FRA but immediately files a notice to suspend benefits.2. The lower-earning spouse elects to receive spousal benefits3. The higher-earning spouse continues to accrue higher payments for whatever point he elects to begin receiving benefits.For more on the ins and outs of filing for benefits , see my guide to Social Security basics ( ) and an FAQ on spousal and survivor benefits ().In a future column, I’ll take a look at how Medicare’s filing rules and how they interact with employer-based benefits.(Editing by Bernadette Baum)Toilet glitch forces JAL to turn around Dreamliner flightTOKYO Oct 10 (Reuters) – Japan Airlines Co wasforced to turn around its Tokyo-bound flight from Moscow onThursday due to a problem in the Boeing 787 jet’slavatory, a spokesman for the Japanese carrier said.The incident on the 787 Dreamliner follows a spate ofproblems since its first flight in December 2009, including abattery fire that temporarily forced the grounding world-wide ofBoeing’s high-profile fleet.JAL spokesman Takuya Shimoguchi said the toilet malfunctionon the flight from Moscow was likely caused by an electronicglitch. The airline was working on repairs on the ground, headded.The flight, carrying 141 passengers, departed Moscow onWednesday evening and returned after about five hours, he said.Shares in JAL, which made headlines this week by signingwith Boeing rival Airbus for the next generation oflong-haul jets, were up 2.1 percent on Thursday morning,outperforming the broader market.Top court upholds healthcare law in Obama triumphWASHINGTON (Reuters) – The Supreme Court upheld President Barack Obama’s healthcare law on Thursday in an election-year triumph for him and fellow Democrats who championed the most sweeping overhaul since the 1960s of the unwieldy U.S. healthcare system.In a 5-4 ruling based on the power of Congress to impose taxes, the nation’s highest court preserved the law’s “individual mandate” requiring that most Americans obtain health insurance by 2014 or pay a tax. The justices also preserved, with some changes, a provision of the law expanding the Medicaid health insurance program for the poor.The decision – written by conservative Chief Justice John Roberts and joined by the court’s four liberals – was a setback for Republicans who mounted unified opposition in Congress to the law before its 2010 passage and who deride it as meddling in the lives of individuals and in the business of the states.Obama and Mitt Romney, the Republican challenger in the November 6 presidential election, immediately responded, with the president calling the ruling “a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court’s decision to uphold it.”"We will continue to implement this law and we’ll work together to improve on it,” said Obama, speaking somberly in the White House East Room, the same setting he used to announce the 2011 death of al Qaeda leader Osama bin Laden.”What we won’t do – what the country can’t afford to do – is re-fight the political battles of two years ago or go back to the way things were. With today’s announcement, it’s time for us to move forward,” Obama added.Romney, who pushed through a similar healthcare overhaul at the state level in 2006 as governor of Massachusetts but opposed Obama’s law, called on voters to help him defeat the president in order to repeal the law critics derisively call “Obamacare.”"If we’re going get rid of ‘Obamacare’ we’re going to have to replace President Obama. My mission is to make sure we do exactly that,” Romney said on the roof of a building overlooking the U.S. Capitol.The healthcare law, known formally as the Patient Protection and Affordable Care Act, is the biggest overhaul of the $2.6 trillion healthcare system in about 50 years. It was signed by Obama in March 2010 and promptly put to the test in the courts by 26 of the 50 states and a trade group for small businesses.The court’s decision largely vindicates Obama and Democratic lawmakers in their attempt to fix a system that, while representing 18 percent of the economy, leaves 16 percent of Americans uninsured, a fact that sets the United States apart in the industrialized world.The U.S. system, unlike other rich countries, is a patchwork of private insurance and restrictive government programs. The United States pays more for healthcare than any other country, but about 50 million of the roughly 310 million Americans still have no insurance at all.The Obama law was meant to bring coverage to more than 30 million of the uninsured and slow soaring medical costs.Roberts was joined by liberal Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan in upholding the law’s pivotal “individual mandate” provision.The four dissenters, all from the court’s conservative wing – Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito, took the unusual step of issuing one joint opinion and said they would have struck down the entire law.Kennedy, summarizing the dissent from the bench, accused the court majority of “vast judicial overreaching. It creates a debilitated, inoperable version of healthcare regulation that Congress did not enact and the public does not expect.”‘CHARACTERIZED AS A TAX’Opponents said the individual mandate was an overreach by the federal government and that Congress had exceeded its powers. The court was deeply divided on this issue, but the majority ruled that Congress’s taxing authority allowed the mandate.The law’s “requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,” Roberts wrote for the court’s majority.”Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Roberts wrote.In another part of the decision, the court said Congress went too far in a part of the law that requires states to expand the government’s Medicaid health insurance program for the poor with the goal of covering more of the uninsured.The court said this problem can be fixed by precluding the federal government from stripping states of existing Medicaid funds if they did not comply with the expansion, and that this did not require striking down other parts of the law.DRAMATIC DAY AT COURTThe court began its session much as it always does. At 10 a.m. sharp, the marshal’s familiar cry of “Oyez! Oyez! Oyez!” rang out as the nine justices entered through heavy scarlet drapes and took their seats at the tall mahogany bench.The looks on their faces gave nothing away. As he took a seat, Chief Justice Roberts smiled slightly in the direction of the justices’ guest seats, where his wife, Jane, was sitting.As he and other justices read statements, it became obvious that Roberts, appointed by Republican President George W. Bush in 2005, had been the crucial vote upholding Obama’s law.Roberts showed he had taken control over a divided bench. He highlighted flaws in the administration’s arguments and stressed the majority was not commenting on the wisdom of the law.Rather, he said, if it could be upheld, the court must uphold it. He said it was not the job of the judiciary “to save” the nation from policy choices made by elected legislators.Romney and the Republicans had hoped the Supreme Court would gut the law. Deprived of that outcome, they can now continue pressing the attack on Obama on the campaign trail, but their hopes for a rollback or repeal will hang on legislation, unlikely before the elections, and on the voting public, whose views are mixed.”What the court did today was say that Obamacare does not violate the Constitution,” Romney said. “What they did not do is say that Obamacare is good law, or good policy.”About 56 percent of Americans said they opposed the law in a Reuters/Ipsos poll released on Sunday. When asked about its individual provisions, however, most respondents said they strongly supported them, except for the individual mandate, which was opposed by 61 percent of those surveyed.Most respondents in the survey favored banning insurers from denying coverage to people with pre-existing conditions; letting young adults stay on their parents’ insurance plans until age 26; and making companies with more than 50 workers offer insurance to their employees. All are parts of the law.So are the creation of state-based exchanges to offer health insurance; insurance premium assistance to poor people; and insurance tax credits for those just above the poverty line.Jamie Thompson of Harleysville, Pennsylvania, who has a daughter with cystic fibrosis, welcomed the ruling.”My daughter’s healthcare costs a fortune. She’s 10. We haven’t gotten to the end of the line, but we’ve been told it’s not uncommon for cystic fibrosis kids to discover they’ve used up their lifetime benefit from healthcare,” he said. “It means she will have healthcare when she needs it.”House of Representatives Speaker John Boehner, the top Republican in Congress, said, “Today’s ruling underscores the urgency of repealing this harmful law in its entirety.”Eric Cantor, the No. 2 Republican in the House, said the House would vote on July 11 on legislation that would repeal the law. The Democratic-led Senate is certain to block any repeal legislation coming out of the Republican-controlled House.Democrats hailed the court ruling as a posthumous victory for a longtime healthcare reform champion, Senator Ted Kennedy, who died in 2009. House Democratic leader Nancy Pelosi said she called his widow Vicki Kennedy to say: “Now, Teddy can rest.Shares of hospital chains jumped, while large health insurer stocks fell after the ruling. Widening the pool of paying patients stands to benefit hospitals, which are often left to cover the high medical bills of the sick who have no coverage.(Additional reporting by David Morgan, Donna Smith, Deborah Charles, Thomas Ferraro, Jeff Mason, Alister Bull and Laura MacInnis in Washington with Lewis Krauskopf in New York and Julie Steenhuysen in Chicago; Writing by Kevin Drawbaugh; Editing by Howard Goller and Will Dunham)Top SEC lawyer on ‘Fabulous Fab’ trial to join WilmerHaleNEW YORK (Reuters) – Matthew Martens, the top trial lawyer at the U.S. Securities and Exchange Commission who led the agency to victory in its blockbuster civil fraud case against Goldman Sachs Vice President Fabrice Tourre, is joining the law firm Wilmer Cutler Pickering Hale and Dorr.The law firm, known as WilmerHale, announced on Wednesday that Martens will be joining as a partner in its securities and litigation practices.Martens most recently served as chief litigation counsel for the Division of Enforcement at the SEC. Although his main job was to oversee other lawyers, he tried the case against Tourre, the highest profile case to emerge from the agency’s investigations into the causes of the 2008 financial crisis.The SEC had accused Tourre, who once referred to himself as “the fabulous Fab” in an email, of misleading investors in a synthetic collateralized debt obligation called Abacus 2007-AC1. The SEC said Tourre failed to disclose that Paulson & Co Inc, the hedge fund of billionaire John Paulson, helped choose subprime mortgage securities linked to go into Abacus and also that the fund planned to bet against it.Martens joined the SEC in August 2010 from the U.S. Attorney’s Office in Charlotte, North Carolina, which he joined as an assistant U.S. Attorney and left as a deputy criminal chief.WilmerHale, which represents major corporations, has 1,000 lawyers across 14 offices in the United States, Europe and Asia, according to its website.(Reporting by Andrew Longstreth and Sarah Lynch; Editing by Lisa Shumaker)Top shareholders back Alibaba’s controversial corporate structure(Reuters) – Alibaba Group’s biggest shareholders have backed a partnership structure that is at the center of a debate over where the Chinese e-commerce giant may list its shares in the most highly anticipated Internet IPO since Facebook Inc’s $16 billion offer last year.Alibaba, which analysts value at as much as $120 billion, appears to have failed to convince Hong Kong regulators to waive tough listing rules, potentially handing the lucrative IPO to rival U.S. market operators.Founded by billionaire entrepreneur Jack Ma, Alibaba wants to find a home for its stock where its 28 partners, mainly founders and senior executives, can keep control over a majority of the board, even though they own only around 13 percent of the company.In the first public comments from one of those partners, Executive Vice Chairman Joseph Tsai defended Alibaba’s corporate structure on Thursday, saying it is a “living body” intended to preserve the company’s culture.While losing such a large IPO would be a blow to the Hong Kong stock exchange – Alibaba could seek to raise as much as $15 billion in the initial public offering – regulators there have stood firm in their defense of small investors and a policy of treating all shareholders alike.”We understand Hong Kong may not want to change its tradition for one company, but we firmly believe that Hong Kong must consider what is needed in order to adapt to future trends and changes,” Tsai, one of Alibaba’s 18 founders in 1999, wrote in a blog post. ()On Friday, Alibaba received the backing of both Japanese wireless carrier SoftBank Corp and Yahoo Inc, its two largest shareholders with stakes of 36.7 percent and 24 percent, respectively.”Alibaba has built a phenomenal business and created tremendous value for its shareholders over the years,” SoftBank CEO Masayoshi Son said in a statement. “We are therefore very supportive of the Alibaba partnership structure.”In a brief statement, Jacqueline Reses, Chief Development Officer at Yahoo and an Alibaba board member, said: “In a fast-moving technology market, it’s critical that a company’s leadership can continue to preserve its culture and set its strategic course for the future.”"As one of Alibaba’s largest shareholders, Yahoo believes that management’s efforts reflect the desire to govern the company for long-term success while also balancing the rights of shareholders.”STRONG DEFENCETsai’s defense of Alibaba’s partnership model comes as debate rages in Hong Kong about whether the Asian financial hub should be more flexible to attract new and emerging companies.Hong Kong Exchanges and Clearing Ltd (HKEx), which is both the regulator of new listings and a publicly traded company that benefits from IPO fees and subsequent stock trading volumes, has insisted that its first duty is to protect all shareholders.In a lengthy blog post this week, the exchange’s CEO Charles Li suggested maybe leaving open the door to potential rule changes, so long as discussions aren’t rushed. He did not directly name Alibaba in his commentary.Hong Kong’s failure to secure the Alibaba IPO would mean lost revenues and less marketing clout to attract other deals. Alibaba commands 80 percent of China’s e-commerce market and handled 1 trillion yuan ($163.4 billion) of goods last year through its Tmall and Taobao market platforms.”The question Hong Kong must address is whether it is ready to look forward as the rest of the world passes it by,” Tsai wrote. “As a company with most of our business in China, it was natural for Hong Kong to be our first choice.”"Those who lack appreciation of our partnership philosophy may view our proposal merely as a founder wanting to preserve control. We could not have a more different objective,” he added.Alibaba declined to comment beyond Tsai’s post. A spokesman for the Hong Kong exchange declined to comment.($1 = 6.1214 Chinese yuan)(Reporting by Paul Carsten in BEIJING, Edwin Chan in SAN FRANCISCO, Mari Saito and Nobuhiro Kubo in TOKYO, Elzio Barreto and Denny Thomas in HONG KONG; Editing by Ian Geoghegan)Top U.S. bankers warn against prioritizing interest payments: WSJ(Reuters) – Top U.S. bankers have warned the Obama administration and Republican lawmakers that any move to pay interest on debt before obligations such as Social Security and payments to veterans would pose severe risks to financial markets and the economy, the Wall Street Journal reported.Some lawmakers think prioritizing interest payments would placate bond investors if the government breaches its borrowing limit, the Journal said.However, heads of the nation’s largest financial institutions told the officials in meetings that prioritizing some payments would create insurmountable uncertainty for investors, drive up borrowing costs and disrupt markets, the Journal said, citing people familiar with the meetings.As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked Congress also faced an October 17 deadline to increase the nation’s borrowing power or risk defaulting on its debt.If no deal is reached, many outside observers including debt-ratings firms assume the government will begin prioritizing payments to bondholders over others, rather than risk defaulting on its debt, the Journal said.(Reporting by Sakthi Prasad in Bangalore; Editing by Supriya Kurane)Top U.S. SEC lawyer on ‘Fabulous Fab’ trial to join WilmerHaleNEW YORK Oct 9 (Reuters) – Matthew Martens, the top triallawyer at the U.S. Securities and Exchange Commission who ledthe agency to victory in its blockbuster civil fraud caseagainst Goldman Sachs Vice President Fabrice Tourre, isjoining the law firm Wilmer Cutler Pickering Hale and Dorr.The law firm, known as WilmerHale, announced on Wednesdaythat Martens will be joining as a partner in its securities andlitigation practices.Martens most recently served as chief litigation counsel forthe Division of Enforcement at the SEC. Although his main jobwas to oversee other lawyers, he tried the case against Tourre,the highest profile case to emerge from the agency’sinvestigations into the causes of the 2008 financial crisis.The SEC had accused Tourre, who once referred to himself as”the fabulous Fab” in an email, of misleading investors in asynthetic collateralized debt obligation called Abacus 2007-AC1.The SEC said Tourre failed to disclose that Paulson & Co Inc,the hedge fund of billionaire John Paulson, helped choosesubprime mortgage securities linked to go into Abacus and alsothat the fund planned to bet against it.Martens joined the SEC in August 2010 from the U.S.Attorney’s Office in Charlotte, North Carolina, which he joinedas an assistant U.S. Attorney and left as a deputy criminalchief.WilmerHale, which represents major corporations, has 1,000lawyers across 14 offices in the United States, Europe and Asia,according to its website.Tough times for hedge funds that bet on market tumultNEW YORK (Reuters) – Nelson Saiers, a trader and math whiz, runs the type of hedge fund that tends to perform best when markets are going haywire.The $600 million Saiers Capital fund and other so-called volatility funds use complex trading strategies to take advantage of pricing discrepancies caused by gyrations in global financial markets.These funds flourished in the years after the financial crisis, when volatility was running hot, but this year is a different story.Financial markets have been largely moving upwards with few wild swings along the way. The Standard & Poor’s 500 index is up about 11 percent and the closely watched CBOE Volatility Index hit a six-year low in March.Saiers Capital’s fund is down about 1.24 percent through April 26, according to an investor. Overall, volatility funds gained 1.16 percent in the first quarter, according to hedge fund tracking firm eVestment, underperforming the broader hedge fund industry’s 3.7 percent gain.Saiers, who manages one of the better-known volatility funds, declined to confirm specific return figures but said some of his fund’s underperformance this year is the result of a deliberate strategy to put on trades that would profit in the event of a U.S. stock market crash.”If you buy crash protection you most likely lose a small amount of money, but if there is a crash you make a windfall,” said Saiers, who earned his doctorate in mathematics when he was 23 years old and joined the Alphabet Capital hedge fund in 2010. Alphabet changed its name in December to Saiers Capital to recognize his contribution to the firm’s performance.Many volatility traders are math nerds like Saiers, who cut their teeth on Wall Street trading derivatives or working on quantitative trading desks. Others come from the options pits or were specialists in statistical arbitrage.But one thing all volatility traders abhor is calm markets.”This is an environment to hit singles and doubles as opposed to home runs,” said Joshua Thimons, a portfolio manager with the PIMCO Multi-Asset Volatility Offshore Fund, which the Newport Beach, California-based investment firm launched in 2011.The $1 billion volatility hedge fund run by bond giant Pacific Investment Management Co fell 1.4 percent during the first quarter, according to data from HSBC’s Private Bank. Thimons declined to comment on the figure.Last year, volatility managers were able to boost returns with successful bets on price dislocations triggered by the European crisis in May and June. The PIMCO volatility fund gained 13.4 percent, while Saiers Capital was up 10 percent. The average hedge fund was up 6 percent last year.TAIL RISKThis year’s flattened returns are one byproduct of efforts by the Federal Reserve and other central banks to keep interest rates low and create a more tranquil trading environment.The Volatility Index fell 30 percent during the first quarter from 18.02 to 12.70. The VIX is often referred to as Wall Street’s “fear index” because it tracks the price of puts on SP500 index options. In periods of relative tranquility, demand for puts falls as they are often used as insurance against a market slide. A put option gives the holder the option, but not the obligation, to sell at a set price by a certain date.”The low-volatility environment could potentially persist for the next few years,” said Vishnu Kurella, portfolio manager at BlueMountain Capital, which has a $600 million fund that specializes in equity derivatives and volatility trading. “With extremely accommodative monetary policy and supportive fiscal policy, governments globally have all but committed to supporting the markets.”BlueMountain’s portfolio is one of the few volatility funds doing well in 2013, up 3.74 percent through April 12, according to data from HSBC’s Private Bank. Kurella declined to give specifics of the fund’s performance.For the most part, volatility funds remain a small corner of the hedge fund world, representing roughly $17 billion of the industry’s $2 trillion in assets. But last year PIMCO’s volatility fund scored a coup when the Pennsylvania Public School Employees’ Retirement System allocated $220 million to its fund. The pension fund did not return a request for comment on whether it was satisfied with its investment in the fund.One reason volatility funds have attracted investors is that they are not merely positioned as “tail risk” funds that make money when financial markets implode. The funds, which buy and sell options linked to an underlying asset, aim to take advantage of mispricings in stocks, currencies, commodities or bonds in both rising and falling markets.A big component of an option’s price is its implied volatility, or the likelihood for a sudden swing in the price of the option or the underlying asset. Low implied volatility typically translates to a low price.Many volatility funds tend to bleed when markets are stress free. In March, for example, 7 out of 10 funds that comprise the Newedge Volatility Trading Index posted negative returns, according to the broker. That index fell 2.6 percent in the first quarter.TEMPORARY SETBACK?The Saiers fund pared some losses as April progressed, according to the investor.Saiers said underperformance in his fund is a temporary setback and he stands by the decision to purchase crash protection even though the trade has eaten into returns. Though he doesn’t think a stock market crash is imminent, he said macro uncertainty persists.Even if a U.S. stock market crash is not in the offing any time soon, volatility investors say there is money to be made with bets tied to Japan’s recent embrace of Fed-style easy money policies.PIMCO’s Thimons said the Bank of Japan’s “extraordinary balance sheet expansion” has triggered big swings in the country’s currency and interest rate markets and his team has “dedicated a significant amount” of time to looking at trades that capitalize on those mispricings.For BlueMountain’s Kurella, government intervention in the financial markets should not stop volatility investors from making money.”While the environment feels like low-vol in the US, Japanese equities are up 60 percent in the past six months,” Kurella emailed. “And that’s anything but low volatility.”(Reporting By Katya Wachtel; Editing by Matthew Goldstein, Tiffany Wu and Tim Dobbyn)Tough US crackdown on tax evaders forces Swiss bank to shut downJan 4 (Reuters) – The U.S. government has raised the stakesin its crackdown on Swiss banks through a hard-chargingprosecution that has forced the closing of a 272-year-old Swissfirm for offering tax-evasion services to wealthy Americans.Tax lawyers and former prosecutors said on Friday theclosing of Wegelin & Co, Switzerland’s oldest private bank,served as a stark warning for some Swiss banks underinvestigation, especially smaller firms such as Wegelin.Wegelin, founded in 1741, said on Thursday it would shut itsdoors permanently after pleading guilty to an indictmentcharging it with helping Americans dodge taxes through secretaccounts.It was the first time the United States forced a foreignbank to close because of its sale of tax-evasion services.”The Justice Department wanted a scalp to send a message toall the other banks, in particular the small cantonal andprivate banks,” said Christopher Rizek, a tax lawyer at Caplin &Drysdale in Washington, D.C., and a senior former TreasuryDepartment tax official.Around a dozen banks are under criminal scrutiny by theJustice Department, including Credit Suisse AG, whichdisclosed last July it had received a target letter saying itwas under a grand jury investigation.Zurich-based Julius Baer and some cantonal, or regional,banks are also under scrutiny, U.S. sources familiar with theprobes previously told Reuters. So are UK-based HSBC HoldingsPlc and three Israeli banks, Hapoalim, Mizrahi-TefahotBank Ltd and Bank Leumi, U.S. sourcesbriefed on the matter said previously. Those banks have notcommented on the inquiries.The widening probe grew out of an investigation of Swissbank UBS AG, which in 2009 entered into adeferred-prosecution agreement and paid a $780 million fineafter admitting to wrongdoing in selling tax-evasion services towealthy Americans.Unlike UBS or Credit Suisse, both major global playerswidely regarded as “too big to fail,” Wegelin and the cantonalbanks are smaller institutions unlikely to pose any systemicrisk to the global financial system if indicted or put out ofbusiness.As such, the old model in which UBS averted indictment andsurvived does not appear to be a road map going forward forsmaller banks, tax lawyers said.Jeffrey Neiman, a former federal prosecutor involved incriminal proceedings against UBS, said that “the cantonal banksthat have similar exposure now have a blueprint to look at inorder to see how to resolve their liability.”The prosecution and closing of Wegelin, however, did notsacrifice a significant number of jobs. Although Wegelin hadabout a dozen branches, all in Switzerland, at the time of itsindictment, it moved quickly to wind down its business, partlythrough a sale of its non-U.S. assets to regional Swiss bankRaiffeisen Gruppe.In contrast, after Arthur Andersen was found guilty for itsrole in the failed energy company Enron Corp, the accountingfirm went out of business in 2002. A 2005 Supreme Court rulinglater overturned the conviction, but it was too late to save thefirm.Wegelin’s plea offers other hints of things to come. TheSwiss government has been at odds with the United States oversecrecy laws that govern bank client data and the plea leavesopen the question of how or whether the bank will discloseclient data in coming months. Going forward, the role of theSwiss in resolving the logjam could be magnified.Neiman said the plea, which ended the case against Wegelin,but required it to preserve client data, suggested the U.S.government had decided to take the issue of client data “head-onwith the Swiss government” and not with the Swiss banks.”Clearly there is another process at work here and it’s onein which there is now not going to be a compelled disclosure inconnection with a plea,” said Scott Michel, a tax lawyer atCaplin & Drysdale in Washington, D.C. with many wealthy clientsof Swiss banks. A Justice Department spokesman did not returncalls requesting comment.As part of its agreement, UBS was required to turn over some4,450 client names, a long process that involved Swiss financialand legal authorities and rattled sacred Swiss secrecy laws.U.S. authorities have long maintained that client data is theirprime quarry.But by leaving open the question of how or if Wegelin willdisclose client data, the Wegelin plea magnifies the new rolethe Swiss government will likely have to play in resolving itslogjam with the United States over secrecy laws protecting bankclient data.A Swiss government source declined to comment onlong-running talks between Switzerland and the JusticeDepartment and U.S. Internal Revenue Service regarding ahandover of American client names. The two sides are set to meet”shortly,” the source said.U.S. authorities already hold more weapons in their arsenalfollowing the 2009 agreement with UBS. Since then, tens ofthousands of Americans have come forward to the I.R.S. tovoluntarily disclose their hidden offshore accounts, providing aroad map to the inner workings of Swiss banks, and prosecutorialleverage over them.Last December, Switzerland agreed to comply with new U.S.disclosure rules on offshore accounts controlled by Americans, anew enforcement regime known as FATCA, or the Foreign AccountTax Compliance Act.”The Justice Department has a lot more leverage now than itdid with UBS,” said James Mastracchio, a tax controversy lawyerat Baker Hostetler in Washington, D.C. Unlike UBS, whose casedragged out over several years, Wegelin, indicted less than ayear ago, “had a very fast acceptance of responsibility.”Tourre on stand says email in SEC case ‘not accurate’NEW YORK (Reuters) – Fabrice Tourre, the former Goldman Sachs trader accused of secretly helping the hedge fund of billionaire John Paulson construct a $2 billion deal it could bet against, said Wednesday an email he sent to a key participant in the investment was inaccurate.Tourre, 34, made the statement after taking the stand in the eighth day of what has become the highest-profile trial to come out of the U.S. Securities and Exchange Commission’s investigations of the 2008 financial crisis.The trial is a chance for the SEC to show it can win big cases against individuals on Wall Street for wrongdoing that caused the financial crisis.SEC lawyers say Tourre was driven by “Wall Street greed” to mislead investors in the infamous investment called Abacus 2007-AC1. Tourre denies any wrongdoing.Early questioning of Tourre on Wednesday afternoon focused on a January 10, 2007, email Tourre sent describing what became Abacus to an executive at ACA Capital Holdings Inc, which the SEC claims was misled into believing hedge fund Paulson & Co Inc was an equity investor.The email said the riskiest slice of Abacus was “pre-committed,” which an executive at ACA testified she believed meant Paulson would invest in it. Tourre, who left Goldman in 2012, acknowledged Wednesday that it was not pre-committed.Asked repeatedly by an SEC lawyer if the statement was “false,” Tourre said, “It was not accurate.”"I wasn’t trying to confuse anybody, it just wasn’t accurate at the time,” he said.2010 LAWSUITTourre’s testimony comes three years after the SEC accused him and Goldman Sachs Group Inc of fraud over Abacus, a synthetic collateralized debt obligation.Defendants can assert the right under the U.S. Constitution not to testify, to avoid incriminating themselves, and frequently do in criminal cases. But experts say that in a civil case, such as Tourre’s, a jury could draw an adverse inference if he asserted that right.”It creates the presumption you did something wrong,” said David Marder, a former SEC lawyer at Robins, Kaplan, Miller & Ciresi.Goldman and Tourre did not tell potential investors that Paulson & Co helped select the mortgage-backed securities linked to Abacus and then went on to bet against it.When the securities in Abacus turned toxic amid the downturn in the U.S. subprime mortgage market, investors lost $1 billion, the SEC says. Paulson, who made $15 billion betting against the housing market, meanwhile made about $1 billion shorting the CDO, the SEC says.Goldman Sachs agreed in July 2010 to pay $550 million to settle the claims against it without admitting or denying wrongdoing. Before that accord was announced, Tourre received a settlement offer but rejected it, a person familiar with the matter said.Tourre, who in an email cited by the SEC is referred to as the “Fabulous Fab,” is now an economics doctoral student at the University of Chicago. He faces a fine and a lifetime ban from the securities industry if jurors find him liable.At times, the judge or court reporter had difficulty understanding the pronunciation of so

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