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Gingrich Crosses Enemy Lines, Lends Romney Hand
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April 25, 2012: Newt Gingrich speaks in Cramerton, N.C.AP
Newt Gingrich says he will join the campaign trail for Mitt Romney next week with two events in Georgia, including the state's GOP convention.
Gingrich, the former House speaker who represented Georgia, last week suspended his 2012 GOP presidential campaign. Gingrich won only two primaries in his campaign â€" Georgia and South Carolina.Â
A Gingrich campaign spokesman told CNN on Friday night about plans to help Romney, the likely GOP presidential nominee, starting at the GOP convention next weekend. He also reportedly will campaign for Romney in Las Vegas.
Gingrich has said he fully backs Romney and did so in his May 2 exit speech, though the endorsement seemed less than overwhelming.
“I am asked sometimes is Mitt Romney conservative enough?†Gingrich said. “And my answer is simple â€" compared to Barack Obama? This is not a choice between Mitt Romney and Ronald Reagan. This is a choice between Mitt Romney and the most radical leftist president in American history."
Gingrich's arrival to the campaign trail is followed by that of several other former GOP candidates including GOP Rep. Michele Bachmann and former Minnesota Gov. Tim Pawlenty.Â
Rick Santorum, Romney's once-closest challenger, endorsed Romney on Monday night, toward the end of letter to supporters that also acknowledged their remaining “differences.â€
Santorum said in the letter he would “keep lines of communication open with (Romney) and his campaign,†but gave no indication he would join the campaign trail.
On Saturday, Pawlenty will attend two events for the Romney campaign, including the state GOP convention in Norman. Â
Bachmann, R-Minn. and Tea Party candidate, endorsed Romney last week at a campaign stop in Portsmouth, Va.
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Authorities lose data for 700K home-care workers
SACRAMENTO â€"  Authorities have lost personal information for hundreds of thousands of Californian home-care workers and recipients, the Los Angeles Times reported, citing an internal government email.
The breach of security, affecting more than 700,000 people associated with California's In-Home Supportive Services program, was discovered on Wednesday, according to the email.
"While we continue to investigate, at this time we can't confirm whether the information was damaged, lost or stolen," the email said, adding that law enforcement agencies had been notified.
The information that has been lost includes names, Social Security numbers and wages, the Times reported.
A news release issued late Friday by the California Department of Social Services said, "The information was in a package that was damaged in transit between a Hewlett Packard processing center and the State Compensation Insurance Fund.
"Upon arrival, it was noted that the package was damaged and that some of the information was missing."
The department advised those affected to take appropriate steps to protect their identities and credit files.
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NJ town cracks down on texting while walking
FORT LEE, N.J. â€"  A New Jersey town took to ticketing pedestrians caught texting while walking after a rise in jaywalking incidents.
Police in Fort Lee., N.J., say people are constantly putting themselves at risk of being hit by cars because they do not pay attention while walking.
Local Sue Choe admitted to WTXF that she texts and walks "all the time," but added, "When I walk, I still look around. I'm not constantly looking down."
But cops say it is pedestrians like Choe who are the biggest jaywalking culprits.
"It's a big distraction. Pedestrians aren't watching where they're going. They're not aware," Fort Lee Police Department (FLPD) Chief Thomas Ripoli said at a news conference.
The FLPD is stepping up patrols looking out for "dangerous" walkers who are not paying attention or obeying the rules of the road but said pamphlets were handed out to warn people about the crackdown.
Offenders can be charged $85 per offense -- the fine for jaywalking. In the last month and a half, 117 tickets were issued, according to the report.
To read more on this story see the myFOXphilly.com article here.
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Fisherman: Swimmers\' urine to blame for fish deaths
HAMBURG â€"  Swimmers have killed about 500 fish in a northern Germany lake, with their urine causing algae that poisons marine life.
The mass death in the past two weeks has occurred in Eichbaum lake, in the port city of Hamburg, The Local reported.
"Swimmers who urinate in the lake are introducing a lot of phosphate," fishermen's spokesman Manfred Siedler told Bild newspaper. "We're calculating half a liter [0.15 of a gallon] of urine per swimmer per day."
Applying anti-phosphate -- at a reported cost of $667,000 -- hasn't worked, fueling an ongoing feud between fishermen and those who swim in the lake.
Swimmers have been banned from the lake until the algae outbreak is addressed.
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3 dead, 2 critical after small plane crashes in Kan.
CHANUTE, Kan. â€"  Three people were killed and two more were in critical condition after a small plane crashed in southeastern Kansas on Friday afternoon, KOAM-TV reported.
The twin-engine Cessna 401 plane was carrying five people when it crashed west of Chanute, Kan., roughly 90 miles northwest of Joplin, Mo., about 4:30pm local time.
Authorities said the plane had been en route from Riverside, Kan., to Council Bluffs, Iowa.
The National Transportation Safety Board (NTSB), who is investigating the cause of the crash, said the incident occurred after the plane lost contact with air traffic control -- after receiving permission to fly at a lower altitude.
The identities of the passengers have not been released.
"It is of course a sad situation any time anything like this happens," Wilson County Sheriff Dan Path told KOAM. Â "Our hearts go out to the families of the victims, and so forth, and the survivors will certainly be in our prayers."
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JP Morgan loss renews calls for stricter oversight- VIDEO: Bank reports $2B loss on hedging flop - OPINION: Bust Up the Big Financial Houses
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AP
Washington â€"  JPMorgan Chase faces intense criticism for claiming that a surprise $2 billion loss by one of its trading groups was the result of a sloppy but well-intentioned strategy to manage financial risk.
More than three years after the financial industry almost collapsed, the colossal misfire was cited as proof that big banks still do not understand the threats posed by their own speculation.
"It just shows they can't manage risk -- and if JPMorgan can't, no one can," Simon Johnson, the former chief economist for the International Monetary Fund, said Friday.
JPMorgan is the largest bank in the United States and was the only major bank to remain profitable during the 2008 financial crisis. That lent credibility to its tough-talking CEO, Jamie Dimon, as he opposed stricter regulation in the aftermath.
But Dimon's contention that the $2 billion loss came from a hedging strategy that backfired, not an opportunistic bet with the bank's own money, faced doubt on Friday, if not outright ridicule.
"This is not a hedge," said Sen. Carl Levin, D-Mich., chair of a subcommittee that investigated the crisis. He said the trades were instead a "major bet" on the direction of the economy, as published reports suggested.
On Friday, Dimon told NBC News, for an interview airing Sunday on "Meet the Press," that he did not know whether JPMorgan had broken any laws or regulatory rules. He said the bank was "totally open" to regulators.
The head of the Securities and Exchange Commission, Mary Schapiro, told reporters that the agency was focused on the JPMorgan loss but declined to comment further.
JPMorgan's disclosure Thursday recharged a debate about how to ensure that banks are strong and competitive without allowing them to become so big and complex that they threaten the financial system when they falter.
The JPMorgan loss did not cause anything close to the panic that followed the September 2008 failure of the Lehman Brothers investment bank. But it shook the confidence of the financial industry.
Within minutes after trading began on Wall Street, JPMorgan stock had lost almost 10 percent, wiping out about $15 billion in market value. It closed down 9.3 percent.
Fitch Ratings downgraded the bank's credit rating by one notch, while Standard & Poor's cut its outlook JPMorgan to "negative," indicating a credit-rating downgrade could follow.
Morgan Stanley and Citigroup closed down more than 4 percent, and Goldman Sachs closed down almost 4 percent. The broader stock market was down only slightly for the day.
Dimon gave few details about the trades Thursday beyond saying they involved "synthetic credit positions," a type of the complex financial instruments known as derivatives.
Enhanced oversight of derivatives was a pillar of the 2010 financial overhaul law, known as Dodd-Frank, but the implementation has been delayed repeatedly and will not take effect until the end of this year at the earliest.
JPMorgan's trades show that the derivatives market remains too opaque for regulators to oversee effectively, said Rep. Barney Frank, D-Mass., one of the law's namesakes.
"When a supposedly responsible, well-run organization could make such an enormous mistake with derivatives, that really blows up the argument, `Oh, leave us alone, we don't need you to regulate us,"' he said.
Criticism of the bank did not stop with its traditional chorus of detractors. It also came from Sen. Bob Corker, R-Tenn., a prominent member of the Senate Banking Committee who has received $10,000 since January 2011 from JPMorgan's political action committee, the most any candidate has received.
Corker, a leader of a failed effort last year to block a Federal Reserve rule that slashed bank profits from debit cards, called for a hearing "as expeditiously as possible" into the events surrounding JPMorgan's loss.
Tim Ryan, president of the Securities Industry and Financial Markets Association, a trade group, said it was impossible to legislate or regulate risk out of the financial system.
"My hope is that this is viewed as bona fide hedging, but it went wrong," he said in an interview. "A mistake was made. Money is going to be lost. It's not customer money. It's not government money. It's JPMorgan's money, the shareholders of JPMorgan."
No one seemed to suggest Friday that JPMorgan had broken a law. But the mistake added a wrinkle to the still-unsettled discussion about how the financial industry should be regulated in the aftermath of 2008.
"This just tells you that we are a long, long way from getting our arms around this whole `too big to fail' issue," said Cliff Rossi, a former top risk executive for Citigroup, Countrywide and other big financial companies.
Immediately after the crisis, a time of popular outrage over bailouts and investment losses, there was broad public support for an overhaul of bank regulations.
The changes promoted by the Obama administration were in many cases similar to what the financial industry had sought before the crisis: Consolidation of regulators and oversight of the multi-trillion-dollar marketplace for derivatives.
Regulators are still drafting hundreds of rules under the 2010 law. As Wall Street has returned to record profits, and executives to million-dollar bonuses, banks have fought to soften those rules.
In particular, the industry has fought hard against a few provisions that might have prevented the problems at JPMorgan.
One is the so-called Volcker rule, which will prohibit banks from trading for their own profit. The rule is still being written, and the Federal Reserve has said it will begin enforcement in 2014.
JPMorgan said that its bets were made only to hedge against financial risk. Dimon conceded that the strategy was "egregious" and poorly monitored. But analysts, former bank executives and many lawmakers disagreed.
"This is an exact description of proprietary trading-style activity," Sen. Jeff Merkley, D-Ore., told reporters Friday. "This really is a textbook illustration of why we need a strong Volcker rule firewall."
Nancy Bush, a longtime bank analyst at NAB Research and a contributing editor at SNL Financial, said the trades probably crossed that line because they were making money for JPMorgan.
"So they made money on hedges and then they hedged some more," she said. "At some point it goes from being a hedge to being a moneymaker."
JPMorgan was seen as a savior of weaker banks during the financial crisis and the only big bank to escape relatively unscathed. His reputation enhanced, Dimon, 56, has been emboldened to challenge efforts to toughen regulation.
In an interview with the Fox Business Network earlier this year, Dimon said that Paul Volcker, the former Federal Reserve chairman for whom the rule is named "doesn't understand capital markets."
Last year, he questioned the current Fed chair, Ben Bernanke, about the rules and said they might be delaying the recovering of the financial system and the broader economy.
"Has anyone bothered to study the cumulative effect of all these things?" he asked.
Dimon, who grew up in the Queens borough of New York and was groomed by the former Citigroup chief executive Sanford Weill, has also chafed against Occupy Wall Street protesters.
"Acting like everyone who's been successful is bad and that everyone who is rich is bad -- I just don't get it," he said at a conference earlier this year.
On Thursday, at about the same time he was breaking news of the $2 billion loss to Wall Street, Dimon sent an email to JPMorgan's 270,000 worldwide employees assuring them that the company was "very strong."
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Thousands Remember Junior Seau at Memorial
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May 11, 2012: Pastor Miles McPherson, of the Rock Church and a former NFL football player, holds up a photo of Junior Seau as Seau's casket rests behind McPherson at Seau's burial Oceanside. Seau committed suicide last week.AP
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May 11, 2012: Former San Diego Chargers running back LaDainian Tomlinson points upward during a public memorial service for the late NFL football player Junior Seau at Qualcomm Stadium in San Diego.AP
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May 11, 2012: Tyler Seau, center, the son of Junior Seau, reacts to fans during a public memorial service for the late NFL football player Junior Seau at Qualcomm Stadium in San Diego.AP
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May 11, 2012: Fans pray during a public memorial service for the late NFL football player Junior Seau at Qualcomm Stadium Friday, San Diego.AP
SAN DIEGO â€"  Hours after Junior Seau was buried in his hometown, thousands of fans got their chance to cheer one more time for the hard-hitting, fist-pumping linebacker at the stadium where he starred for 13 seasons.
A crowd estimated at 20,000 attended a public memorial service at Qualcomm Stadium. Many wore Seau's No. 55 jersey -- in Chargers blue, Southern California cardinal and gold and Miami Dolphins aqua and orange. One of Seau's cousins wore a jersey combing the colors of all three of his pro teams, including the New England Patriots.
Former NFL safety John Lynch led a shout-out of "Buddy!" -- Seau's greeting to friends and strangers alike.
"I love it," Lynch said.
"He was a good and loyal friend," said former teammate LaDainian Tomlinson, who drew some of the biggest cheers of the night as he spoke of Seau. "Notice the words I said: good and loyal."
Chargers president Dean Spanos made official what many had known since Seau left after the 2002 season, that No. 55 will never be worn by another Chargers player.
Among those attending were Seau's parents, his ex-wife and their children, several current and former Chargers, and former rival John Elway. Elway, who now runs Denver's front office, was accompanied by new Broncos quarterback Peyton Manning and coach John Fox, a former assistant with San Diego.
Seau's No. 55 was painted at midfield.
Seau committed suicide on May 2 at his Oceanside home. He played parts of 20 seasons in the NFL.
After a private funeral earlier Friday, Seau was buried at Eternal Hills cemetery.
Chargers chaplain Shawn Mitchell opened the service with a prayer.
"Junior, we don't know if you can see this down here, but tonight's your night."
Said Hall of Fame quarterback Dan Fouts: "Our paths never crossed on the field, but boy could we have used him with the offense of Air Coryell. I'm also glad I never had to play against him. I could just imagine the thought of him sacking me, then standing over me and dancing all over me."
Someone yelled, "Ask Elway!"
Fouts called it a "classy move" for Elway, Manning and Fox to attend, and the crowd cheered.
Seau didn't leave a suicide note.
"No doubt this is a tragedy," Fouts said. "A tragedy for the community of San Diego, for Chargers fans and football fans everywhere. And with all tragedies, there are lessons to be learned, lessons that must be learned by all of us. The lesson here is, if you need help, get help. It's out there. All you have to do is swallow your pride and ask for it. We all need help at times. We can all do a better job of helping each other."
Former teammate Billy Ray Smith, a fellow linebacker, told the crowd: "I want to make sure you know, Junior Seau loved you guys; loved you all. I'm real sure that you loved No. 55 as well. Is that correct? He was a great friend a great teammate and I will miss him forever. Rest in peace."
Bobby Ross, the only coach to get the Chargers to the Super Bowl, told a Seau "bounty" story from the 1990s, when Stan Humphries was throwing long passes during pregame warmups near the stands. One of the Raiders fans was dressed up in a garish football outfit that included shoulder pads and a helmet.
"I said, `Stan, what the hell's going on?"' Ross said. "And he said, `I've got to tell you, coach, Junior told me if I hit that guy in the stands, he'd give me $1,000."'
Ross recalled Seau's many charitable contributions to the community.
"I don't believe there's a player who played in the National Football League who has done for a city what Junior Seau has done for San Diego," Ross said.
"Junior, we know that you're with our maker, up there with our heavenly father," Ross added. "We know that. Look out for our guys who have also left. Look out for our guys."
Ross then mentioned the other seven players from San Diego's 1994 team who have died: David Griggs, Doug Miller, Rodney Culver, Chris Mims, Curtis Whitley, Shawn Lee and Lew Bush, as well as former equipment manager Sid Brooks.
Tomlinson recalled how impossible it was to block Seau during practice, and how it inspired him to lift weights.
"But lucky enough, he was on my team," Tomlinson said to loud applause.
Tomlinson spoke directly to Seau's parents, telling them: "Mama Seau, Papa Seau, it's time for you to take a bow. Why? Because of everything that you instilled in Junior, and taught him and told him to go out and be happy and do happy, he did that. He instilled in everybody he touched, the things you taught him. So don't be sad today, be happy because Junior lives through us every day in everything he's touched."
Then, reciting the names of Seau's children, who were seated in the front row, Tomlinson said: "Go make your father proud. He'll live through you. Thank you, Junior."
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Al Qaeda tactics add wild card element in Syria
Damascus â€"  The latest suicide bombings in the Syrian capital showed an increasing ruthlessness: The attackers struck during rush hour, setting off one blast to draw a crowd before unleashing a much bigger one, killing 55 people and leaving the street strewn with rubble and mangled bodies.
For many, the Al Qaeda-style tactics recall those once familiar in the country's eastern neighbor, Iraq, raising fears that Syria's conflict is drifting further away from the Arab Spring calls for political change and closer to a bloody insurgency.
"Syria is slowly but surely turning into another Iraq," said Bilal Y. Saab, a Syria expert at the Monterey Institute of International Studies.
The presence of Al Qaeda militants and other extremists adds a wild card element to the Syria conflict that could further hamper international efforts to end it. While world powers and U.N. observers in Syria can pressure the government and the opposition to stick to special envoy Kofi Annan's peace plan, they have no means of influencing shadowy Islamic militants who often don't claim their own attacks.
Western officials say there is little doubt that Al Qaeda-affiliated extremists have made inroads in Syria since the popular uprising against President Bashar Assad began 14 months ago. But much remains unclear about their numbers, influence and activities inside Syria.
"We do have intelligence that indicates that there is an Al Qaeda presence in Syria, but frankly we don't have very good intelligence as to just exactly what their activities are," U.S. Defense Secretary Leon Panetta told reporters in Washington on Thursday.
Panetta said he didn't know whether Al Qaeda was connected to the latest bombings in Damascus.
Amateur videos posted online provide occasional glimpses of extremist activity.
One video posted this week shows a suicide attack that reportedly took place on May 2 in the northern town of Idlib. In the footage, a white van speeds toward an army checkpoint and erupts into a huge ball of flame as it nears the soldiers, sending their bodies flying.
In February, Al Qaeda leader Ayman al-Zawahri called on Muslims in neighboring countries to join the uprising, saying Syria's rebels must not rely on the West.
Syria's uprising started in March 2011 with mostly peaceful protests inspired by successful revolts elsewhere calling for political reform. The Syrian government responded with a brutal crackdown, prompting many in the opposition to take up arms to defend themselves and attack government troops.
The U.N. said weeks ago that more than 9,000 people have been killed. Hundreds more have died since.
Thursday's twin blasts in Damascus were the fifth in a string of major attacks in Syrian cities that have clouded the picture of a fight between the opposition and the regime. It was the deadliest yet, in part because it happened on a key thoroughfare during rush hour, while previous bombings were on weekends.
No one has claimed responsibility for the blasts, although a shadowy militant group calling itself the Al-Nusra Front has claimed past attacks through statements posted on militant websites. Little is known about the group, although Western intelligence officials say it could be a front for Al Qaeda.
Throughout the conflict, the government and its foes have tried to tar each other with accusations of links to the terror network.
On Friday, Burhan Ghalioun, head of the opposition Syrian National Council, accused the government of cooperating with Al Qaeda to carry out the Damascus attacks, using the violence as a way to taint the uprising.
A day earlier, Syria's Ambassador to the United Nations, Bashar Ja'afari, told the U.N. Security Council in New York that Al Qaeda, backed by unnamed foreign governments, was behind the attacks.
Late Friday, the leader of Lebanon's Hezbollah militant group and a strong Assad ally warned that attacks like Thursday's could tear Syria apart. Sheik Hassan Nasrallah told supporters via videolink that the same hands that "destroyed and killed in Iraq ... want to destroy Syria today."
Syria's rebels -- vastly outnumbered and outgunned by Assad's armed forces and security apparatus -- have adopted insurgency tactics, regularly ambushing military checkpoints and convoys.
But Joint Chiefs Chairman Gen. Martin Dempsey differentiated Thursday between extremists and the opposition.
"We do know that there have been extremist elements that are trying to make inroads in Syria," he said. "That is to be distinct from the opposition. I'm not tying those together."
Sometimes, the line between them is unclear.
On Friday, the pro-government TV station Ikhbariya said police shot dead a man driving a truck filled with 1,500 kilograms (3,300 pounds) of explosives. It broadcast video of a police general showing two U.N. observers a minibus holding four large metal containers rigged with explosives.
In the driver's seat, a bearded, bloodied man wore what appeared to be an explosive belt.
"It was similar to the terrorist attack that targeted Damascus yesterday," the general told the observers.
The videos could not be independently verified, and the opposition often accuses pro-Assad media of staging events. Nor was it clear what group -- if any -- the would-be bomber belonged to.
World powers have backed a peace plan by international envoy Kofi Annan that calls for a truce to allow for dialogue on a political solution to the conflict.
The plan has been troubled from the start, with neither side fully respecting a cease-fire that was supposed to begin on April 12. But the presence of international observers has brought the daily death toll down and halted large government assaults on opposition areas.
U.N. headquarters in New York announced that as of Friday there are 145 military observers and 56 civilian staff deployed in Syria.
Most experts don't expect Annan's plan to fully succeed, and many say large attacks are likely to become more common.
"I think increasingly we'll see less directed bombings and more arbitrary ones that seek to create chaos more than anything else," said Bassam Haddad, director of the Middle East Studies Program at George Mason University.
Related Images
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May 10, 2012: In this photo released by the Syrian official news agency SANA, flames and smoke raise from burning cars after two bombs exploded, at Qazaz neighborhood in Damascus, Syria.
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May 10, 2012: In this photo released by the Syrian official news agency SANA, flames and smoke raise from burning cars after two bombs exploded, at Qazaz neighborhood in Damascus, Syria.
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Court rules NSA can keep mum on ties with Google
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FILE: Exhibitors of the Google company work on laptop computers in front of an illuminated sign of the Google logo at the industrial fair Hannover Messe in Hanover, Germany.AP
Washington â€"  A federal appeals court has turned down a Freedom of Information Act request to disclose National Security Agency records about the 2010 cyberattack on Google users in China.
The Electronic Privacy Information Center, which focuses on privacy and civil liberties, sought communications between Google and the NSA, which conducts worldwide electronic surveillance and protects the U.S. government from such spying. But the NSA refused to confirm or deny whether it had any relationship with Google. The NSA argued that doing so could make U.S. government information systems vulnerable to attack.
A federal district court judge sided with the NSA last year, and on Friday, a three-judge panel of the U.S. Court of Appeals for the District of Columbia upheld the ruling.
In 2010, Google complained about major attacks on its website by Chinese hackers and suggested the Chinese government may have instigated them. The Chinese government denied any involvement. Soon after, there were news reports that Google was teaming up with the NSA to analyze the attack and help prevent future ones.
The privacy center's FOIA request drew a "Glomar" response, in which an agency refuses to confirm or deny the existence of records. The term refers to a case in the 1970s, when the CIA refused to confirm or deny the existence of the Glomar Explorer, a ship disguised as an ocean mining vessel that the CIA used to salvage a sunken Soviet submarine. Courts consistently have upheld Glomar responses.
"In reviewing an agency's Glomar response, this court exercises caution when the information requested" involves national security, Judge Janice Rogers Brown wrote in the unanimous appeals court panel's ruling. "NSA need not make a specific showing of potential harm to national security in order to justify withholding information" under one of the law's exemptions because Congress has already, in enacting the FOIA statute, decided that disclosure of NSA activities is potentially harmful.
Brown said the question was whether acknowledging the existence or nonexistence of the requested material would reveal an NSA activity. The privacy center argued that some of the records it sought -- unsolicited communications from Google to NSA -- are not covered by exemptions cited by the NSA.
"The existence of a relationship or communications between the NSA and any private company certainly constitutes an `activity' of the agency" subject to exemption, Brown wrote. "Whether the relationship -- or any communications pertaining to the relationship -- were initiated by Google or NSA is irrelevant to our analysis."
"Moreover," she added, "if private entities knew that any of their attempts to reach out to NSA could be made public through a FOIA request, they might hesitate or decline to contact the agency, thereby hindering its information assurance mission," which focuses on protecting national security information and information systems.
Brown, an appointee of former President George W. Bush, was joined in the ruling by Judges Brett Kavanaugh, another George W. Bush appointee, and Douglas Ginsburg, who was appointed by former President Ronald Reagan.
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Big banks under fire after JPMorgan fiasco
WASHINGTON (AP) - JPMorgan Chase faced intense criticism Friday for claiming that a surprise $2 billion loss by one of its trading groups was the result of a sloppy but well-intentioned strategy to manage financial risk.
More than three years after the financial industry almost collapsed, the colossal misfire was cited as proof that big banks still do not understand the threats posed by their own speculation.
"It just shows they can't manage risk - and if JPMorgan can't, no one can," said Simon Johnson, the former chief economist for the International Monetary Fund.
JPMorgan is the largest bank in the United States and was the only major bank to remain profitable during the 2008 financial crisis. That lent credibility to its tough-talking CEO, Jamie Dimon, as he opposed stricter regulation in the aftermath.
But Dimon's contention that the $2 billion loss came from a hedging strategy that backfired, not an opportunistic bet with the bank's own money, faced doubt on Friday, if not outright ridicule.
"This is not a hedge," said Sen. Carl Levin, D-Mich., chair of a subcommittee that investigated the crisis. He said the trades were instead a "major bet" on the direction of the economy, as published reports suggested.
On Friday, Dimon told NBC News, for an interview airing Sunday on "Meet the Press," that he did not know whether JPMorgan had broken any laws or regulatory rules. He said the bank was "totally open" to regulators.
The head of the Securities and Exchange Commission, Mary Schapiro, told reporters that the agency was focused on the JPMorgan loss but declined to comment further.
JPMorgan's disclosure Thursday recharged a debate about how to ensure that banks are strong and competitive without allowing them to become so big and complex that they threaten the financial system when they falter.
The JPMorgan loss did not cause anything close to the panic that followed the September 2008 failure of the Lehman Brothers investment bank. But it shook the confidence of the financial industry.
Within minutes after trading began on Wall Street, JPMorgan stock had lost almost 10 percent, wiping out about $15 billion in market value. It closed down 9.3 percent.
Fitch Ratings downgraded the bank's credit rating by one notch, while Standard & Poor's cut its outlook JPMorgan to "negative," indicating a credit-rating downgrade could follow.
Morgan Stanley and Citigroup closed down more than 4 percent, and Goldman Sachs closed down almost 4 percent. The broader stock market was down only slightly for the day.
Dimon gave few details about the trades Thursday beyond saying they involved "synthetic credit positions," a type of the complex financial instruments known as derivatives.
Enhanced oversight of derivatives was a pillar of the 2010 financial overhaul law, known as Dodd-Frank, but the implementation has been delayed repeatedly and will not take effect until the end of this year at the earliest.
JPMorgan's trades show that the derivatives market remains too opaque for regulators to oversee effectively, said Rep. Barney Frank, D-Mass., one of the law's namesakes.
"When a supposedly responsible, well-run organization could make such an enormous mistake with derivatives, that really blows up the argument, 'Oh, leave us alone, we don't need you to regulate us,'" he said.
Criticism of the bank did not stop with its traditional chorus of detractors. It also came from Sen. Bob Corker, R-Tenn., a prominent member of the Senate Banking Committee who has received $10,000 since January 2011 from JPMorgan's political action committee, the most any candidate has received.
Corker, a leader of a failed effort last year to block a Federal Reserve rule that slashed bank profits from debit cards, called for a hearing "as expeditiously as possible" into the events surrounding JPMorgan's loss.
Tim Ryan, president of the Securities Industry and Financial Markets Association, a trade group, said it was impossible to legislate or regulate risk out of the financial system.
"My hope is that this is viewed as bona fide hedging, but it went wrong," he said in an interview. "A mistake was made. Money is going to be lost. It's not customer money. It's not government money. It's JPMorgan's money, the shareholders of JPMorgan."
No one seemed to suggest Friday that JPMorgan had broken a law. But the mistake added a wrinkle to the still-unsettled discussion about how the financial industry should be regulated in the aftermath of 2008.
"This just tells you that we are a long, long way from getting our arms around this whole 'too big to fail' issue," said Cliff Rossi, a former top risk executive for Citigroup, Countrywide and other big financial companies.
Immediately after the crisis, a time of popular outrage over bailouts and investment losses, there was broad public support for an overhaul of bank regulations.
The changes promoted by the Obama administration were in many cases similar to what the financial industry had sought before the crisis: Consolidation of regulators and oversight of the multi-trillion-dollar marketplace for derivatives.
Regulators are still drafting hundreds of rules under the 2010 law. As Wall Street has returned to record profits, and executives to million-dollar bonuses, banks have fought to soften those rules.
In particular, the industry has fought hard against a few provisions that might have prevented the problems at JPMorgan.
One is the so-called Volcker rule, which will prohibit banks from trading for their own profit. The rule is still being written, and the Federal Reserve has said it will begin enforcement in 2014.
JPMorgan said that its bets were made only to hedge against financial risk. Dimon conceded that the strategy was "egregious" and poorly monitored. But analysts, former bank executives and many lawmakers disagreed.
"This is an exact description of proprietary trading-style activity," Sen. Jeff Merkley, D-Ore., told reporters Friday. "This really is a textbook illustration of why we need a strong Volcker rule firewall."
Nancy Bush, a longtime bank analyst at NAB Research and a contributing editor at SNL Financial, said the trades probably crossed that line because they were making money for JPMorgan.
"So they made money on hedges and then they hedged some more," she said. "At some point it goes from being a hedge to being a moneymaker."
JPMorgan was seen as a savior of weaker banks during the financial crisis and the only big bank to escape relatively unscathed. His reputation enhanced, Dimon, 56, has been emboldened to challenge efforts to toughen regulation.
In an interview with the Fox Business Network earlier this year, Dimon said that Paul Volcker, the former Federal Reserve chairman for whom the rule is named "doesn't understand capital markets."
Last year, he questioned the current Fed chair, Ben Bernanke, about the rules and said they might be delaying the recovering of the financial system and the broader economy.
"Has anyone bothered to study the cumulative effect of all these things?" he asked.
Dimon, who grew up in the Queens borough of New York and was groomed by the former Citigroup chief executive Sanford Weill, has also chafed against Occupy Wall Street protesters.
"Acting like everyone who's been successful is bad and that everyone who is rich is bad - I just don't get it," he said at a conference earlier this year.
On Thursday, at about the same time he was breaking news of the $2 billion loss to Wall Street, Dimon sent an email to JPMorgan's 270,000 worldwide employees assuring them that the company was "very strong."
___
AP Business Writer Marcy Gordon, AP Business Writer Pallavi Gogoi and Associated Press writer Jack Gillum contributed to this report.
Daniel Wagner can be reached at www.twitter.com/wagnerreports.
Article from YAHOO NEWS
Putin No-Show Causing US Tension?
WASHINGTON â€"  Among Vladimir Putin's first acts now that he's back in Russia's top job was to cancel a date with President Barack Obama.
Both nations insist Putin's no-show at a high-profile economic gathering tailored for his attendance is not a snub. But the decision to skip next week's meeting of the Group of Eight industrial nations in the United States and a much-anticipated Oval Office meeting with Obama, may set a sour tone for the next four years.
If Obama wins re-election, he will have Putin as a sometime partner and sometime adversary through the end of his presidency. If Republican Mitt Romney wins, the dynamic might be very different. Romney has called Russia an "enemy," while Putin has signaled that he will hold off on any major new cooperation with the United States until he knows who will be president.
Either way, Russia watchers in and out of the U.S. government predict a more businesslike relationship than was the case under his predecessor, Dmitry Medvedev, and perhaps a more limited one. Putin has a variety of troubles at home and is not likely to pick a fight with the United States despite sharply negative rhetoric about Washington during his election campaign. But he also is not likely to welcome friendly ties for their own sake, said Steven Pifer, a Russia and arms control expert at the Brookings Institution.
"I think you'll see a more transactional relationship," Pifer said.
Putin will be prepared to cooperate with the U.S. where he sees fit, "but it will be, `If I do this for you, what do I get?"' Pifer said.
Putin returned Monday to the presidency he had vacated four years earlier. The Russian constitution prohibits more than two consecutive terms. In the interim, Putin protege Medvedev was president and Putin occupied the previously less important post of prime minister. Medvedev made way for Putin's return, and now Putin has installed Medvedev as prime minister.
Putin was considered the top decision-maker throughout, but Medvedev brought a cheerier and more Western-oriented face to Russian leadership that Obama sought to engage.
The White House quietly announced this week that Putin would not attend the G-8 meeting as planned and would send Medvedev instead. That followed another surprising announcement from the White House earlier this year, when it abruptly said the G-8 meeting was being moved from its long-planned Chicago venue to Camp David, the presidential retreat in Maryland's Catoctin Mountains north of Washington.
A major reason for the switch was to appear welcoming to Putin, U.S. and other diplomats said. The economic meeting was planned to take place adjacent to a summit of NATO leaders in Chicago, and Putin's fierce opposition to a planned NATO missile defense shield in Europe made his attendance at even half the planned gathering awkward.
The Kremlin explained Thursday Putin's decision to skip the high-profile visit to the United States by saying he needs to finish setting up his new government. That sounded hollow to many U.S. ears but makes some sense given Putin's political troubles at home.
"It does not at all feel like a snub," White House press secretary Jay Carney said Thursday. "It was something we understood."
Putin's job swap with Medvedev, the former president who is now prime minister, has created tensions of its own within Russia's ruling elite. Who will serve in the new Cabinet under Medvedev and what role will be played by other top Putin allies who object to being subordinate to Medvedev? No appointments have yet been made.
All of that has little to do with the United States, but Moscow's relationship with Washington remains its most-watched and arguably its most important overseas relationship.
Cooperation with the Obama administration on such areas as supply routes for the war in Afghanistan and international sanctions on Iran would not have happened without Putin's back-seat consent. That kind of cooperation is likely to continue, at least for now, but with Putin's warier and more skeptical view of the United States more on display.
The Obama administration knew Putin would be a tough customer but hoped for a smoother start.
A senior U.S. official said the White House expects to continue regular, high-level meetings with Russian leaders and does not expect areas of disagreement such as missile defense or human rights issues to derail cooperation between the two countries. The official spoke on condition of anonymity to describe internal planning.
Putin has gone out of his way since the election to defend the U.S.-led campaign in Afghanistan and his proposal to allow the Americans to use a strategic airfield for resupply. He also has defended Russia's decision to join the World Trade Organization, which the Obama administration has pushed hard to make happen.
In both cases, domestic Russian criticism has come mainly from the Communists, who have the second-largest faction in parliament.
Anti-Putin street protests in Moscow erupted on Sunday, and more than 400 people were arrested after the rally turned into clashes between the demonstrators and riot police.
Since Monday, activists have been staging flash mobs across Moscow: suddenly assembling in public places, camping and staying there for the night.
The United States is dampening expectation for any major new arms control gains with Russia at least until after the election, and diplomats have all but conceded they cannot get Russian consent for harsher United Nations Security Council action against Syria now.
Putin and Obama spoke by phone on Wednesday, and agreed to meet next month on the sidelines of another economic gathering in Mexico. That meeting will lack the symbolism of a White House invitation, however, which may suit Putin just fine.
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Photos: The legacy of Carroll Shelby
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Did Bill Clinton Encourage Hillary Clinton to Quit Job?
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Nov. 14: Former President Bill Clinton speaks during his visit to the Rabin Center in Tel Aviv.Reuters
A new biography of President Obama claims that Bill Clinton was so unimpressed with the president's performance that he called him an "amateur" and urged wife Hillary Clinton to quit her job as secretary of state to mount a Democratic primary challenge.
"Barack Obama is an amateur," Bill Clinton said, according to excerpts from the book.
The details about the book, "The Amateur," were reported first by the New York Post.
Clinton unleashed on Obama and urged his wife to challenge him in the 2012 Democratic primaries during a gathering last summer at the Clintons' upstate New York home, author Edward Klein said. He said his reporting is based on interviews with people who attended the event.
Klein is a former editor for Newsweek and The New York Times Magazine.
"The economy's a mess, it's dead flat. America has lost its Triple-A rating … You know better than Obama does," Clinton allegedly told his wife, who said she wanted to remain as secretary of the State Department in part because she did not want her legacy to including leaving a Cabinet post to pursue higher office.
The former president, who has helped campaign for Obama, and his wife have dismissed the account as false. And the White House said Klein made up facts to sell books.
At one point during the gathering at the Clinton home, daughter Chelsea allegedly arrived and agreed with the father, who said, "I want everyone to know how strong you poll," according to the book.
A recent Fox News poll shows Clinton receives better job approval ratings than Obama â€" 67 percent to 45 percent.
The April 22 to 24 poll showed Clinton had support from 94 percent of Democrats, 60 percent of independents and 40 percent of Republicans.Â
Obama had support from 83 percent of Democrats, 33 percent of independents and 7 percent of Republicans. The poll's margin of error was 3 percentage points.Â
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Judge denies request to dismiss charges in Edwards trial
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May 10: Former presidential candidate and Sen. John Edwards arrives at a federal courthouse in Greensboro, N.C.
GREENSBORO, N.C. â€"  A federal judge denied a motion Friday by John Edwards' lawyers to dismiss corruption charges against the former Democratic presidential candidate.
The request was made in an empty courtroom and follows the prosecution resting its case Thursday. The jury will return Monday to hear the defense case.
"We will let the jury decide," Judge Catherine Eagles said in response to the request to dismiss.
Edwards' lead attorney Abbe Lowell argued that the prosecution, while pointing out his clients' moral transgressions, had failed to prove he committed any crimes.
"No one is going to deny that Mr. Edwards lied and lied and lied and lied," Lowell said. "Then the government is going to say, 'See, he lied.' And I'll say, 'Yes, he lied.' "
Prosecutors are trying to prove Edwards used unreported campaign contributions to hide his pregnant mistress during his 2008 bid for president with the intent of protecting his election prospects.
The defense claims the funds in question were private gifts from friends intended to protect Edwards' cancer-stricken wife from finding out about his extramarital affair.
"Mr. Edwards could have expenses for a baby if he had a campaign or if he didn't have a campaign," Lowell argued. "Mr. Edwards would hide an affair if he was or wasn't a candidate."
Lead prosecutor David Harbach argued, "This is an experienced politician. He just didn't drop out of the sky in '07 and into a world of campaign finance he knew nothing about."
Judge Eagles decided the prosecution had presented enough evidence to merit consideration by a jury.
Edwards' mistress, Rielle Hunter, is on the list of defense witnesses. But that's no guarantee she'll be called to testify.
Hunter had also been on the prosecution's witness list, but never took the stand.
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