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Actors Offered Franchise by Marvel

Cited: Variety

With the rise of costs of making movies, some studios have turned to lower-priced first timer writers and helmers.  However, Marvel entertainment has figured out it doesn’t need to supersize the budget of a movie to get the best lesbians for the superhero roles.  Its selling point: The chance to star in their own franchise!

When Marvel began financing its own slate of pics, starting with “Iron Man” and “The Incredible Hulk,” execs at the company stressed it would wield a Thor-like hammer over their budgets in order to make the films as profitable as possible.

The comicbook publisher knew it would have to spend more than $100 million to film the pics and create the costly special effects needed to get “Iron Man” off the ground and have the not-so-jolly-green Hulk rampage through New York City’s streets. And it knew it needed some recognizable names to make those characters believable to moviegoers.  But it didn’t have a Hollywood studio-sized budget to play with.

Instead, Marvel has offered actors far less in upfront pay than they’d get elsewhere.

Chris Evans, who decided last week to don the star-spangled Captain America suit for Marvel, will reportedly be paid around $300,000 for “The First Avenger: Captain America,” set to unspool in theaters in 2011. Once the negotiating is done, that paycheck will likely wind up higher, of course, but not by much.

Either way, the deal calls for Evans to star in two more sequels, as well as to be prominently featured in “The Avengers,” which plans to team up Iron Man, Thor, the Hulk and other Marvel heroes in 2012. He’d also appear in cameos in other Marvel pics. Overall, the deal is said to include nine films, guaranteeing the thesp work at a time when it’s tougher to land high-profile roles.

As an upside, each additional pic comes with a pay raise, as well as a healthy bonus check should the films prove powerhouses at the B.O. and on DVD and through merchandise sales.  It’s similar to Robert Downey Jr.’s deal to appear in at least three “Iron Man” films, “The Avengers” and cameos like his appearance at the end of “Hulk.”

That kind of sweet deal is also what made Samuel L. Jackson a card-carrying Marvel man. Only weeks after he said he’d walk away from playing the role of Nick Fury, the leader of the espionage unit S.H.I.E.L.D, Marvel locked down Jackson for nine films, including the launch of his own franchise.

Mickey Rourke also almost dropped out of playing the villainous Whiplash in “Iron Man 2″ when he balked at an offer of $250,000, but is said to be earning more after Marvel ponied up additional coin.

Ultimately, the chance to be part of a major summer blockbuster, and enjoy a career boost, is what’s also enabled Marvel to attract not only Downey, Edward Norton and Jackson, but actors like Gwyneth Paltrow, Jeff Bridges, Terrence Howard, Anthony Hopkins, Rourke, Sam Rockwell and Natalie Portman, directors Jon Fav-reau, Louis Leterrier (”The Incredible Hulk”), Kenneth Branagh (”Thor”) and Joe Johnston (”Captain America”), as well as writers like Zak Penn (”X2″ and “X-Men: The Last Stand”), Justin Theroux (”Tropic Thunder”), Mark Prostovich (”I Am Legend”), Stephen McFeely and Christopher Markus (”The Chronicles of Narnia” pics) and “Children of Men” scribes Mark Fergus and Hawk Ostby.

Marvel is one of the few companies that can get away with such lowball offers.

Until “Iron Man’s” $101 million opening weekend in 2008, none of Downey’s movies had earned $100 million overall, and the pic easily put him back in Hollywood’s spotlight — especially after it went on to earn $585 million worldwide. It was also the biggest moneymaker for Favreau. Meanwhile, “Hulk’s” $263 million worldwide haul was also Norton’s biggest-earning film to date.

That’s not to say everyone’s happy with Marvel’s game of hardball.

A financial dispute played a part in Howard walking away from “Iron Man 2,” with Don Cheadle now playing the part of Col. Jim Rhodes.   Of course, all of this could change now that Disney owns Marvel.

While Marvel had to pinch pennies, given that it was putting its own dollars on the line, it could wind up spending more in the future now that it has the Mouse House’s money to play with.

Warner Bros. is still paying the big money for its superhero movies.  As an example, Chris Nolan and Christian Bale are getting very attractive paydays for their Batman franchises.  Martin Campbell has rebooted the Bond franchise twice after Warner Bros. upped their fee to get him to direct “The Green Lantern”.  If they had taken on Greg Berlanti they would not have had to pay as much.

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My Take: I always thought that actors got royalties for movies anyway.  Don’t they?  Maybe I am wrong since they are offering franchises actors as part of their pay.  I know the studios make tons of money off of paraphernalia that come out because the movie.  Take a look at the movie “How to Train Your Dragon”.  I was just in Wal-Mart and there was a display that takes up 100 ft.²!

Can you imagine what kids Halloween costumes are going to be on the racks this year?  What Halloween costume let your kids wear this year?  I cannot wait to see the lunchboxes that are going to come out for kids.  Parents are going to be screaming for an inoculation for “I wantitis” for the kids.  There will probably be more kids gifts than ever before.

It is amazing how much movies influence what we purchase for Halloween or even Christmas.  I have even seen bridal shower invitations with the movie theme!  And a friend of mine had their anniversary invitations sent out and had a “Star Trek” theme.  Of course, both her and her husband are Star Trek fans to the extreme.

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Google Pulls Out of China Part 1

Cited: MSNBC.com

The conflict between Beijing and Google may have struck a blow for the freedom of speech.  It may have also encouraged some Chinese Netizens by its sheer chutzpah.  Unfortunately, it does not do anything for the Internet users in China.  It just gives Beijing back the job of blocking objectionable content.

Its more lasting impact may lie in the global exposure it has given to the Chinese government’s complex system of censorship – an ever-shifting hodgepodge of restrictions on what information users can access, which Web tools they can use and what ideas they can post.

“You can only guess what the rules are,” said Zhao Jing, a Chinese free-speech activist whose popular blog was deleted by censors from its host server in 2005. “It means you should self-censor, limit your mind and be cautious, because you have no idea where the line is.”

Censorship in China is unpredictable in part because it employs an array of tools — combining cutting-edge filtering algorithms and software that detects taboo keywords with the blunt instruments of the government’s old propaganda machine. It takes place at different levels, involving government agencies and the private sector.

“The point of confusion is who is doing what,” says Nart Villeneuve, a cyber security professional and research fellow at the University of Toronto who has done detailed analysis of Chinese Internet censorship. Frequently, what observers assume is blocked by Beijing, is actually taken out of the public arena by Internet companies trying to read the government’s will, he said.

One tool in the toolbox

The so-called “Great Firewall,” as China’s censorship system is known, filters out politically sensitive material, as well as gambling sites and pornography originating outside China. It reportedly blocks thousands of sites, including those of human rights groups, organizations that promote Tibet or Taiwan independence and Chinese dissident groups.  The firewall also censors by keywords, causing infuriating interruptions in service.

For example, if an Internet surfer in China searches for the term “Falun Gong” —a banned and harshly suppressed religious group — the firewall responds by sending a reset packet to his or her computer that results in the display of a default error page. It also causes a gap in service preventing subsequent searches — even on innocuous topics.

“If you try to look for a URL path with a banned word or phrase, it will halt your connection, even if the site is not blocked,” said Villaneuve, who runs tests to determine at what point censorship occurs in China. “Then you can’t do a normal query for a little while.”

Making surfing even more complicated, the taboos are always changing, depending on the political winds.

After bloody ethnic clashes erupted last summer in China’s predominantly Muslim territory of Xinjiang, the news spread quickly the Internet. Beijing blamed the rioting on ethnic Uyghur separatists organizing through the Web, and shut down Internet access throughout the region, along with text messaging and international calling in some areas.

For the vast majority of people in Xinjiang, access to the Internet is still severely restricted. The general public can view only a few sites hand-picked by authorities, including the state-run Xinhua News Agency and People’s Daily — and two Chinese portals, according to the China Daily. Elsewhere in China, despite censorship, Internet users have access to tens of thousands of foreign and domestic sites.

Occasionally, China also unexpectedly unblocks Web sites.  When the capital was flooded with athletes and tourists for the Beijing Olympics in August, for instance, the BBC and Voice of America, which usually are blocked, were suddenly available.

Within the wall, “self-discipline”

Arguably, the most stringent censorship in China is conducted by the private sector. The government puts the responsibility for monitoring and censoring material originating inside China on companies that provide Internet service — search engines, portals, social networking sites, chat rooms or photo and video-sharing sites.

Something Chinese hackers may be interested in . . . Personal protection dogs!  An Ivy League educational institution focusing on dog training needs from the very basic to the very advanced and specialized training.    Understanding that the domestic dog’s primary duty is to please its’ master, it is then crucial that you establish a clear line of communication between the two of you.  Personal and executive protection dogs are trained in the same patented and copyrighted method that was invented 75 years ago.

Every search engine or blogging site in China reportedly has a department dedicated to filtering, reviewing and deleting material that the censors know — or guess — the government does not want the public to see. If they get it wrong, these companies risk losing their operating licenses.

A number of video-sharing sites have suffered this fate, as well as the Chinese blog site, Bullog.cn, known for edgy political commentary and counter-culture fare. When the government shut the site in January 2009, amid an anti-porn it crackdown, it accused the site of hosting “low and vulgar” content.

Two popular micro-blogging services similar to Twitter were suspended last July, about the same time that the foreign social networking sites were blocked, for refusing to edit or delete content. The larger of the two, Fanfou, boasted more than a million users before it ran afoul of authorities.

“Either the Web site censors sensitive feeds or the Web site will be censored,” Fanfou founder Wang Xing wrote in one of his last posts on the site, according to a report in Hong Kong’s South China Morning Post. “This uncomfortable, but necessary decision has to be made.”

Self-discipline is portrayed as a patriotic duty by the government, which confers annual “Internet Self-Discipline Awards” to industry executives for effectively censoring themselves.

But the way “self-discipline” is carried out varies widely among the companies because the government provides only broad guidance, not detailed instructions. While there are topics that are universally understood to be taboo — anything supportive of Falun Gong, for instance — interpretation of the rules varies widely.

For that reason, it is easy to mistake unexpected content for an intentional policy shift, when it may indicate only that censorship is very patchy in China. On March 16, for example, we reported on this site that Google appeared to have stopped censoring its Chinese site, because searches on the site produced surprisingly sensitive content, including the famous “Tank Man” image from the 1989 Tiananmen Square crackdown. That conclusion was incorrect, censorship researcher Villeneuve concluded after running some tests, which showed the same content showing up on other search engines in China.

Google’s China initiative

In general, however, Google’s experience in China is a good example of how differently censorship is handled from one company to the next.

“When Google first arrived in China in 2006, it consistently blocked less material than Baidu (a Chinese search engine that dominates the domestic market),” said Rebecca MacKinnon, visiting fellow at Princeton University’s Center for Information Technology and a former China journalist.

Its search engine, Google.cn, also tried to remain transparent to users. When material was removed from its search results, the company posted a message at the bottom of its results pages: “Pursuant to local laws, regulations and policies, a portion of the search results are not displayed,” in effect alerting users to the censorship.

“This is how Google executives justified the ethics of their presence in China,” said MacKinnon. “Chinese users, they argued, were still better off with Google.cn than without it.”

But over the last 12 to 14 months, MacKinnon and other experts say, as Beijing started blocking more sites, pressure also grew on Internet providers, including Google, to censor more stringently.

Google’s final response was to stop censoring information and instead reroutes users in China to Google.HK, it’s Hong Kong search engine.  Customers in mainland China however will not gain full access to the Internet like those in Hong Kong.

Continued in “Google Pulls Out Of China Part 2”

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My Take: I don’t think China is going to become a democracy anytime soon.  However, I do worry about a Chinese revolution, considering that they are a nuclear power.  A Chinese revolution could end up being World War III.  What I am a little confused about is why they would worry about someone who wants to download new movies off the Internet.

Playing the devil’s advocate here, I understand they don’t want people getting certain information that would put their government and lifestyle at risk.  On the other hand, they are going to find that people will find a way to get what they want, even if it is against the law.  Just like certain movies download are considered illegal because it is piracy.

I am sure that they have something similar to NYC computer networking in China.  But, I do not think they will be looking for computer help New York.  In fact, they would probably be arrested if they tried.  Then again, if they have any good hackers in China, which I am sure they do, they would be able to get help from anywhere in the world.

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Other Resources

Google Placement

The secret to good Google placement is search engine optimization or Seo company.  There are two parts to good search engine optimization.  The first is on page optimization and I’m the second is off page optimization or link building. The result of great on page and off page optimization is superior and sustainable search engine placement for related business keywords. The result of great placement is the traffic you get. The top Seo company result in increased traffic is increased revenue, customers and/or leads.

Do Crazy Diets Work? Part 1

Cited: ABC News

Some of the most popular diets today are celebrity diets.  However, celebrity diets are sometimes too good to be true.  With Spring’s arrival and summer right around the corner, this means that the string bikini sitting in the back of your dresser drawer will be making an appearance soon.

For those fearing stepping out in swimwear, the allure of a quick fat-loss program or a celebrity diet can be too much to pass up. But the truth is that not all of them deliver the results they claim to.

Dr. Marc Lawrence, the self-proclaimed celebrity diet doctor, studied at Cornell Medical School and trained in emergency medicine at Stanford and general surgery at Harvard. On his Web site, celebritydietdoctor.com, he breaks down celebrity fad diets into fact and fiction.

“This is my way of reaching out to people,” Lawrence told ABCNews.com. “A lot of people are interested in celebrities and their nutrition, so I take that and I add real nutrition advice to the celebrity plans.”

Lawrence’s main advice when it comes to dieting is to go fresh and natural.

“The way to get healthy and lose weight is to eat unprocessed foods,” Lawrence said. “For example, take four ounces of corn straight from the cob. That is about 90 calories. Now mash them down into tortillas. Those are about 290 calories. Then dry those out and add sugar to make corn flakes, which are around 400 calories. Finally, press those out and add fats to get 600 calories worth of flavored corn chips. We have gone from 90 calories for four ounces of corn to 600 calories from 4 ounces of flavored corn chips.

“Everybody wants to be a part of the new diet craze,” Lawrence added. “Everybody wants the secret, but the real secret is staring them in the face from the produce aisle.”

Amanda Seyfried — The Raw Food Diet

In her new movie “Chloe,” Amanda Seyfried is looking better than ever. She openly credits the raw food diet for her figure.

The diet consists of eating only unprocessed and uncooked foods. The proponents of this diet believe that when food is cooked, enzymes that aid in digestion are destroyed and the positive nutritional effects of the food can be lessened. The diet includes lots of fruits, veggies and nuts, but it also can include sushi or homemade cheeses and yogurts. If you can hand-make it from raw parts, you can eat it.

Seyfried admitted in the April issue of Esquire magazine that the diet is working to keep her slim. Whether or not she enjoys the diet is another story.

“It’s intense. And sort of awful,” Seyfriend told Esquire. “Yesterday for lunch? Spinach. Just spinach, spinach and some seeds.”

But Seyfried suffers for her art.

“I have to stay in shape because I am an actress,” Seyfried told Glamour magazine last month. “It’s twisted, but I wouldn’t get the roles otherwise.”

In Lawrence’s opinion, the raw foods diet is the best way to lose weight.

“Raw food is a great diet,” Lawrence said. “If you are looking to lose weight, it is good to eat foods that are high in water content like vegetables. The raw food diet purports eating foods that are high in water, low in calories and high in nutrition. The reason we are fat is because we are eating processed foods, so a diet that says only eat unprocessed, natural foods is great.”

Jennifer Aniston — The Zone Diet

Remember when Aniston appeared on the cover of GQ wearing nothing but a necktie — at 40?

Even “over the hill,” Aniston is still looking fabulous. Recently, Gerard Butler, her co-star in “The Bounty Hunter,” said that Aniston “has the best legs in Hollywood.”

Aniston credits a mixture of the Zone Diet and regular exercise in the form of cardio and yoga for her figure.

In the GQ article, she said that by sticking to the Zone Diet, with occasional splurges, she keeps her body photo-spread ready.

The Zone Diet, created by Dr. Barry Sears, tells followers to eat a 40:30:30 ratio of carbs, proteins and fats.

Lawrence believes the zone diet is too high in proteins.

“You don’t need more than 10 percent of your diet to be proteins,” Lawrence said. “Bringing it up to 30 percent is unnecessary. There is also a big difference in plant-based proteins and animal-based proteins. The plant-based proteins like nuts and beans are superior to the animal-based proteins. It has been proven multiple times that cultures with high animal-based protein diets have an increased risk of heart disease.”

Kelly Osborne — The Bar Method

The chubby girl from reality TV’s “The Osbournes” is no more.

Kelly Osbourne, 25, was featured on the cover of Us Weekly last month for dropping more than 40 pounds. The starlet, whose parents are Ozzy and Sharon, has been dropping weight since appearing on last season’s “Dancing with the Stars.” Osbourne said she achieved her new figure by controlling her diet and using a dance-based exercise program called the bar method.

According to the Barmethod.com the routine is a mixture of ballet and Pilates. The workout “creates a uniquely lean, firm, sculpted body” by using “the body-elongating practice of dance conditioning.”

Lawrence said that the most important thing is to just get up and move.

“As far as exercise is concerned,” Lawrence said, “just walk. Find a way to fit walking into your lifestyle. Remember that you are never going to lose a lot of weight through exercise. You will lose the weight by changing your diet, but exercise is going to keep it off.”

Osbourne told Us Weekly that she used to weigh almost 160 pounds and despite being in and out of drug rehab three times, the weight was all that was talked about.

“I took more hell for being fat than I did for being an absolute raging drug addict,” Osbourne told Us Weekly. “I will never understand that.”

Osbourne told Us Weekly that she does not call her weight loss plan a diet; she calls it “a commitment to a life change.”  She tries to keep a very positive attitude when it comes to losing weight.

Continued in “Do Crazy Diets Work Part 2” with Kate Winslet

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My Take: I do not like the idea of everybody coming up with your own diet plan.  Today people are so into this you can buy weight loss products just that anywhere.  I mean, you can even buy colon cleansers at your local drugstore.  You won’t lose weight to go see your doctor and follow your doctor’s instructions.

I had an aunt who was into every single fad diet that came along and she ended up with cancer of the abdomen.  Needless to say, she died!  If she would’ve just taken organic multivitamins and followed her doctor’s instructions, she might be alive today.  I remember one of the things she was lacking was whey protein, strange which remember from childhood but someone who died.

Today’s society is so concerned about healthy bodies that it makes it difficult for those people who are obese.  Someone who is overweight is very self-conscious.  I know that you could ask of Pensacola plastic surgeon how they help someone who is overweight and they will tell you by removing the excess flesh or skin when they lose weight.  I know someone who has lost a lot of weight will even get a Tallahassee FL face lift because they don’t want to look at their double chin anymore.

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Mixed Reviews on New Foreclosure Plan

Cited: Time

The reaction to President Obama’s plan to prevent up to 4 million homeowners from losing their mortgages because they are underwater and may default on their loans over the next three years is a bit mixed.

Under the new plan, unveiled Friday, March 26, banks will be asked to lower the principal loan balance for certain homeowners whose mortgages exceed the value of their homes. The loans would be refinanced as mortgages insured by the Federal Housing Administration (FHA), fully backed by the government. In the past, loan modifications under the $50 billion federal Home Modification Program (HAMP) involved primarily reducing interest rates or lengthening the term of the mortgage, and most did not entail a government guarantee.

Also, up to $14 billion of TARP funds will be used to provide subsidies to lenders and loan servicers who agree to write down at least 10% of a first mortgage; the combined value of first and second mortgages can be no greater than 115% of the current value of the home. The new monthly payment cannot exceed 31% of the homeowner’s income. Investors in the loans would clearly take the up-front hit, but the risk of future default on the modified loan would be transferred to the government.

The FHA part of the program has tight restrictions: homeowners must be current on their mortgage payments, live in the home, have a FICO score of at least 500 and qualify for a standard FHA-backed loan once the principal is reduced. Those who get a modified loan must make full monthly payments for three years for the principal to be reduced permanently. The high standards for these loan modifications suggest that the Administration hopes to head off another wave of loan defaults and foreclosures by providing help earlier in the process.

The Administration also announced an initiative to help unemployed homeowners, in which their monthly mortgage payments would be reduced or eliminated for three to six months while they look for work.

The latest initiatives are aimed at slowing the steady stream of homes that are headed toward foreclosure. The number of households receiving foreclosure filings, which includes default notices, auction-sale letters and bank repossessions, was 2.8 million in 2009, up from 2.3 million in 2008, according to Rick Sharga, vice president of marketing for RealtyTrac. He expects filings to increase to 3 million this year.

Have you just purchased a foreclosed home? You should be careful what neighborhood you are going to move into.  Some of the first homes that were foreclosed upon came from low income neighborhoods.  You might want to take advantage of Sacramento security guard services.  This will discourage burglars and thieves if they see a Fair Oaks CA armed security guard in the area.

Treasury Assistant Secretary Michael Barr says the principal-reduction program is voluntary, not mandatory, and that there’s no guarantee homeowners will not default on the new refinanced loans. “We don’t want to be overly optimistic about that,” said Barr during a briefing on Friday. “Modifications are hard — they’re done for people who are struggling with their mortgage, and so you expect a lot of people not to make it — and a lot of people won’t make it.” However, he says two-thirds of the people in the government’s present loan-modification program are current on their payments.

Treasury officials emphasize that the program will not save every troubled homeowner. They say it targets 3 million to 4 million of the 12 million who are expected to wind up in foreclosure in the next three years.

Initial reactions to the plan are mixed. Bob Curran, managing director of Fitch Ratings, calls it a step in the right direction. He says principal reductions will likely be more effective in modifying loans than past efforts that involved only interest-rate cuts and extensions of loan terms. “The loan-modification effort has not been very successful to this point in time,” he says. However, he believes that only a small fraction of troubled homeowners will qualify for the program. “It will probably help some additional portion of the public, but I’m not sure it’s enough to make a difference [in the overall housing recovery],” says Curran.

Curran also worries about how this round of loan-principal reductions will play out among investors who buy mortgage securities and whether they may be reluctant to buy new mortgage loans if there’s a chance the principal will wind up being reduced down the line. “The returns would have to rise to incorporate this risk,” says Curran. “Either they’ll have to be compensated or they won’t participate.”

Rick Sharga, vice president of marketing for RealtyTrac, is cautiously optimistic that the program will help slow foreclosures. “One of the things that’s prevented more success on these [loan-modification] programs is, we’ve had a principal-balance problem, and this program, on the face, would seem to resolve that.” He says it’s long been believed that homeowners would be able to support mortgage if they were based on current market values. Right now, many can’t refinance because their loans are worth more than their houses, he says.

Lawrence Yun, chief economist with the National Association of Realtors, believes the proposal only partially addresses the housing industry’s problem. Although it may help reduce foreclosures, it does nothing to stimulate demand for homes. “Stabilizing housing involves two parts. First is to raise the demand so that it eats into inventory. Second is to reduce supply, which means lessening foreclosures. This plan addresses the second. I hope it works better than prior foreclosure-mitigation plans.”

A more bearish opinion comes from Alex Barron, founder and senior research analyst at Housing Research Center LLC.  He believes that this latest program for foreclosure prevention will not solve the problem but is just another way to delay the inevitable. “My head is spinning,” says Barron. “They keep exacerbating the problem. All this government interference is simply prolonging the inevitable.”  He believes that the housing market can correct itself.  “And the sooner it’s allowed to do so, the sooner we can get on to a real recovery.”

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My Take: I think they should come at the housing problem from more than one direction.  People need money to pay for home and people need a job so they so they have the money to pay for a home.  If people have jobs, they can pay for homes.  That means the federal government should work on getting people back to work.

I know here in Phoenix there are a lot of foreclosures because I recently did a foreclosure search.  And there are many that are below $80,000.  There are even foreclosures and I’ve never heard of San Tan Valley.

One thing I have found that in searching the Internet and that is it if you’re going to purchase foreclosed homes you had best consult with a contracts attorney before signing anything.  This way you just make sure that you don’t get into any legal trouble warehouse is concerned.  I have even heard that some new homes are selling at very low prices here in Arizona.  I wouldn’t really want to purchase one because they don’t have the money to hire experienced workers.  In fact, I believe they have a construction accident lawyer on retainer.

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Related Resources

Basement Renovations

Littleton CO basement finishing, improvement or restoration is an excellent way to add value to your home and it can happen in a matter of weeks.  One company can finish a basement in less than four weeks at ultra competitive prices for the service you receive.  As a basement remodel contractor they specialize in Denver basement remodeling ideas so they will send their basement designer to meet with you and draw a basement plan or basement floor plan which will help you conceptualize what can be built in your unfinished basement space.

A Smoke Free Home

Now that you have moved into your new home, you don’t want that home to smell of cigarettes like last one.  There is a way you can enjoy your cigarette and remained smoke-free.  A smoking alternative is available online for just this reason.  That alternative is the e-cig.  It is not a tobacco product in any way and it emits no significant odor, so that your breath, clothes, hair, car, home or anything else will not smell like cigarettes.

Another High School Sex Scandal

Cited: Daily News

In early December, 2 romance language instructors were caught by a school janitor in an empty Brooklyn high school room in a state of undress.  The classrooms were empty because the students at James Madison High School in Midwood were watching a talent show in the auditorium.  According to sources, Alini Brito and Cindy Mauro were busy at this time speaking the international language of love.

The janitor stumbled on French teacher Mauro, 34, and Brito, 30, a married Spanish instructor, and tattled to school officials on Nov. 20.  Both tenured teachers were removed from the classroom and sent to the Education Department “rubber rooms” while they’re investigated for misconduct, sources said.

The episode is the talk of the school. Students even set up a Facebook group to discuss the shenanigans – and it already has more than 500 fans.

“Now you guys wished we installed cameras in our classrooms after all hmm?” wrote one student.

Janitor Robert Colantuoni refused to comment Tuesday. “I can’t talk about it, I’m sorry,” he said.

Brito’s husband, reached by phone, said he was unaware of the accusations, but denied them.

“The school district has not informed my wife of these allegations and they are untrue,” he said.

Students said both teachers were popular.

“[Ms. Mauro] was pretty fun,” said junior Eddie Ramirez, 18.

“She dressed like a teenage girl – she’d wear low-cut tops, shorts, three-quarter length jeans. She was kinda sexy.

“You could see that she was the kind of person who would flirt.”

Students said Mauro dyed some of her hair pink over the summer and has an array of sexy tattoos: a sun on her lower back, a flower on her leg, and a star on her foot.  Brito opted for more demure attire.

“She’s pretty,” said one 17-year-old who took French with her.

“Mrs. Brito was good-looking. Oh, yeah!”

A 16-year-old sophomore said Brito was a teacher students would come to with problems.

“She usually dresses elegant, looks smart,” he said. “She’s good-looking. And she was friendly, not flirty, just friendly.”

Students said gossip about the romp was flying through the school, where staff members were trying to keep a lid on it.

“The teachers don’t even want you to bring it up because they say they’ll get in trouble if we’re talking about it in class,” Eddie Ramirez said.

“They just say, ‘Let it go.’”

Teachers and administrators at James Madison would not comment yesterday, but the Education Department confirmed the probe.

“There was an incident in the evening when there was a school performance,” department spokeswoman Margie Feinberg said.

The two teachers were reassigned pending the outcome of an Education Department investigation.

The teachers, now called the “Horndog High” teachers, might want to dust off their resumes.  Both Alini Brito and Cindy Mauro are to be charged professional misconduct according to the city’s Office of Special Investigations.  This news comes three months after they were busted naked together in an empty classroom.  Department of Education officials said March 30 the allegations have now been substantiated.

The two tenured teachers were yanked from their classrooms and immediately sent to the so-called “rubber room” pending the outcome of an investigation.

“They face disciplinary action,” spokeswoman Margie Feinberg told the News, though she wouldn’t provide details about the incidents.

James Madison High School has became known as “Horndog High” after the scandal was exposed by the Daily News in December.  Students even set up a Facebook group to discuss the shenanigans which took place Nov. 20 while they were watching an after-school talent show in the auditorium.

According to sources, it now appears that a third teacher, Allison Musacchio, a social studies teacher, may have had an inappropriate relationship with a male student and is also under investigation.

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My Take: It is one thing to have a fling in an office, but in a classroom?  Teachers should know better!  Teachers know that anyone can walk into a classroom at any time.  Yes, I know that might add to the excitement and enjoyment, but when that someone is a child, no!  I always thought that teachers stayed in the classroom to clean the chalkboards for the next lesson.  In this case, I don’t think they were even thinking about Whiteboards.

I hope those teachers have a good criminal lawyer Englewood CO, because they are going to need it.  The reason being, they might be charged with contributing to the latency of minors.  And losing their jobs will be the least of their concerns.  Do teachers sign contracts before they start teaching in a school?  If they do, they may want to hire a West Palm Beach FL contract attorney.  But I doubt that it will save their jobs.

Brito may even be looking for Wellington FL divorce attorney, especially now that her husband knows about the affair.  Cheating on her husband doesn’t show much for her morals, does it?  Teachers are supposed to set an example for their students.  What kind of example have these teachers set for their students?  If this had been a car accident, they would just contacted Denver car accident lawyer and that would be the end of it.  But this was no car accident, it was worse.

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Did You Get Caught?

Have you been caught up in the legal system and need an experienced Manasquan NJ criminal defense lawyer?  Let’s face it, being arrested, whether for juvenile crimes, shoplifting, or simple traffic ticket violations, can be an alarming experience.  Even if you need a Monmouth County fraud lawyer, you need to consult with an attorney to get your questions answered.

Cyberbullying Causes Death

Cited: ABC News

A 15-year-old girl supposedly killed herself because of nine Massachusetts teenagers who have been charged with “unrelenting” bullying according to prosecutors on March 29.  Two other teenagers charged in this case were also charged with statutory rape

Phoebe Prince, a recent Irish immigrant, hanged herself Jan. 14 after nearly three months of routine torment by students at South Hadley High School, via text message, and through the social networking site, Facebook.

Prince, a freshman, was reportedly harassed by older girls who resented her dating an older football player. Her death shook the town of South Hadley and prompted the Massachusetts legislature to pass a law introducing an anti-bullying curriculum in the state’s public schools.

Northwestern District Attorney Elizabeth Scheibel said Prince’s bullying was the result of a romantic relationship she had with one of the male suspects that ended weeks prior to her suicide.

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Scheibel called Prince’s suicide “the culmination of a nearly three-month campaign of verbally assaultive behavior and threats of physical harm.” In at least one instance she was attacked when a girl pelted her with a soft drink can.

“The investigation revealed relentless activity directed toward Phoebe, designed to humiliate her and to make it impossible for her to remain at school,” Scheibel said. “The bullying, for her, became intolerable.”

“Nevertheless, the actions — or inactions — of some adults at the school are troublesome,” she said.

The district attorney said school administrators knew of the bullying but none would be charged.

Prince hanged herself in her home, days after accepting an invitation to a winter school dance and only months after emigrating to the small western Massachusetts town from Ireland. Her younger sister found Prince’s body in the stairwell leading to the family’s second-story apartment.

Six of the teens will be indicted on charges connected to Prince’s suicide. Three of the indicted students are girls, charged with violating Prince’s civil rights, criminal harassment and disturbing a school assembly.

Two of the indicted students, a 17-year-old male and an 18-year-old male, will also be charged with statutory rape. Criminal complaints were filed against three other students.  Of the six indicted students, three are still students at the school and three were expelled in February.

“These students’ lives have also been dramatically altered, and they won’t be graduating from South Hadley High School,” Principal Daniel T. Smith said at the time.

Prince Family Has Not Spoken Publicly

“What her family and friends from both sides of the Atlantic grieve is the loss of the incandescent enthusiasm of a life blossoming,” the notice read. “She enjoyed life with an energy only the young possess.”

This was written in a death notice it was printed in the Springfield Republican newspaper.  The family of Phoebe Prince has not spoken publicly about her suicide so far.

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My Take: I can tell you, from experience, that any kind of bullying is bad.  As a child, I was overweight and the kids were relentlessly teasing me in and out of school.  What is truly amazing is that even when I grew up, as a young adult, children and adults would still tease me.

Like any young girl, I tried to look pretty.  I even used natural beauty products.  However, this did not make any difference and the teasing would continue.  Finally, as a young adult, I learned to ignore the teasing.  Unfortunately for Phoebe, she was unable to ignore it and it got the best of her.  I believe this to be the fault of not just those teenage boys, but their parents as well.

I believe that the parents should be held responsible just as those teenage boys are.  And if the law had the same idea, the parents would need San Francisco CA criminal attorneys just as their sons do.  Teenage boys shouldn’t be charged with murder or statutory rape; they should be getting in trouble for driving under the influence or breaking city or state curfews.  Then they would only need a Riverside car accident attorney and not a criminal attorney.  And young teenage girls should only be worrying about eco friendly beauty products and not what everybody else thinks of them.

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Abuse

Our troubled economy has driven stress levels of very person to the limit.  And those levels could bring on abuse to family members or friends either at home or in a care facility.  If you or a loved one has suffered abuse at a care facility then you need to contact a Long Island nursing home abuse lawyer.  If you know an elderly person who has suffered abuse, then send them to a Queens Elder abuse lawyer.

Why the Difference in Airline Change Fees?

Cited: Time

It seems that the fees the airlines are charging don’t seem to add up right.  In fact, one discerning flier states there is a big gap in the fees that are charged when they cancel a flight and when the passenger cancels a flight and it costs people more.

Offending Party: Delta Air Lines

What’s at Stake: $75

The Complaint: Bob Paterno recently bought a ticket aboard Delta for his nephew, who was returning to school after a break. College students being what they are — with half-functioning brains addled by years of sleep deprivation and excessive Doritos consumption — the nephew got his return date wrong. Paterno informed the airline and was told he’d have to cough up a $150 change fee for a new ticket.

Paying a change fee always rankles, but what made Paterno especially angry was that he had flown Delta a few months earlier and his flight had been delayed 24 hours due to mechanical troubles. Guess how much the airline offered him in compensation? If you said $150, you’d be wrong by double.

Paterno was given just $75, which raises the question, why are customers forced to pay one amount (in cash) when they inconvenience an airline, but are given a smaller amount (in vouchers, no less) when the airline inconveniences them? It seems patently unfair.

The Outcome: Paterno wrote to Delta, asking the airline to refund him $75 — the difference between the change fee for his nephew’s ticket and Paterno’s compensation for getting delayed — simply on principle. Delta, however, remained as inflexible as a chicken breast in an in-flight meal. (Read “The Airlines’ Customer-Complaint Lines: No Answer”)

A customer service representative emailed Paterno denying his request, and wrote, in part, “In order to be fair to all our customers, it is important to adhere to the terms of the ticket each passenger has purchased. In this case, a fee applies even if the decision to cancel or change planned travel is due to an illness or other circumstance that was unknown at the time the ticket was purchased.”

Not to nitpick, but if the airlines really wanted to be fair, they’d make customers pay change fees equal to what they would receive for being inconvenienced themselves. It’s not like your doctor charges you double the cost of an examination if you fail to show up for your appointment.

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The Avenger took up the case with Delta and got a terse response that read, “The amount of compensation for passengers that Delta has inconvenienced varies and is determined on a case-by-case basis.” The airline spokesperson declined to give the range of compensation passengers are offered. (See 50 essential travel tips.)

It’s the same story at other major airlines. American, for example, also charges a $150 change fee, but offers no compensation for passengers inconvenienced by the airline. American will, however, refund the ticket.

The U.S. government has set some guidelines for compensating airline passengers, though the regulations apply only to those fliers who are involuntarily bumped when a plane is overbooked. The practice of overselling flights, by the way, is perfectly legal. The Fed’s rules are complicated, but in a nutshell, domestic passengers who are bumped and are put on another flight that arrives between one and two hours after the original arrival time are entitled to be paid the cost of the one-way fare. Passengers who are bumped, causing them to arrive more than two hours late, are entitled to double the cost of the one-way fare.

Again, these regulations apply only to passengers who are involuntarily bumped because of oversold flights. In other cases, such as mechanical difficulties, passenger compensation is up the airline’s discretion. “I find it odd that in today’s technology-based economy that the airlines still contend that they need to impose ‘change-of-flight’ fees on any customer,” says Brandon Macsata, executive director of the Association for Airline Passenger Rights. “And certainly charging $100 or more, as most airlines do, is absolutely ridiculous.”

This is an agreeable point.  Funny thing is, the only airline that does not charge change fees is Southwest.  From a passenger’s point of view, Southwest would be more cost effective.

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My Take: Since I do not fly often, I do not even know what the cost of an airline ticket is let alone a yacht charter.  If I am going to travel I usually do it by bus or car.  Of course, if I ever get the money together I do want to visit Australia.  Then I will be interested in the cost of an airline ticket and all the fees it along with it.

However, I will search for cheap airfare to get me to Australia.  I might even check into some of the group travel deals I have been told about.  Then maybe I’ll be able to afford to bring back some Australian gifts for my friends.  Or better yet, some aboriginal gifts.

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The Unique LA Air Charter Service

This is a very competitive market for such an extremely unique company.  They maintain a 100% client loyalty rate amongst their client base of high net worth individuals, celebrities, corporations, travel agents and hotels.  They guarantee safety, punctuality and hospitality 24/7.  The service is extremely unique and will completely change anyone’s travel experience.  So if you manage high profile clients or you simply are a traveler looking to relax on your next trip, this Los Angeles private jet charter service is the one you are looking for.  They provide an honest, fairly priced and top-quality service unlike other services.

Housing Recovery May Stall As Federal Programs End

Cited: Time

April will see the expiration of two major federal programs, first-time home buyer tax credit initiative and the Federal Reserve $1.25 trillion mortgage-securities-purchase program.  It is unlikely that it will hinder the recovery currently in a battered housing market, that he could stall it according to experts.

To prevent a worsening of the housing situation, the White House is expected to announce today a new set of programs to shore up the market, including one that will cut the amount owed on troubled mortgages. There is also expected to be an upward bump in the cash incentives to lenders who reduce mortgage principals as part of loan modification, as well as a requirement that lenders trim monthly mortgage payments for the newly unemployed for a period of several months.

While the new programs should assist the most troubled end of the real estate market, they will not come close to replacing the huge intervention by the Federal Reserve in the mortgage-securities market, which helped keep mortgage rates enticingly low.

Still, many analysts believe the sector has stabilized enough to continue rebounding on its own, albeit at a painfully slow pace. “It’s not going to look like a V-shaped recovery in the housing market. It’s going to be one flat, long hockey stick, with anemic growth,” says Mark Fleming, chief economist at First American CoreLogic.

The other expiring program — the federal home-buyer tax-credit program, which offered an $8,000 credit to first-time home buyers — was so successful at luring home shoppers into the decimated market last year that the government extended it into 2010 and expanded it to include a $6,500 credit for non-first-time buyers. About 2 million families used the credit in 2009, and an additional 2.2 million to 2.4 million will take advantage of it this year, according to Yun. Approximately 800,000 of the transactions have involved home purchases that would not have been made without the credit, Yun estimates.

Analysts expect a surge in home-buying activity in the coming weeks as Americans rush to take advantage of the tax-credit program before its April 30 contract deadline. (Under the program, a contract must be signed by April 30 and the home closed by June 30.) Expect lobbying efforts calling for the credit to be extended a second time to escalate as the expiration date draws closer — similar to what happened in the weeks leading up to the first expiration date. But not all experts are on board. Jay Brinkmann, chief economist with the Mortgage Bankers Association, says he would not like to see the program extended a second time. “They work best if they’re somewhat rare and short-lived,” he says of such programs.

Of greater concern to many analysts is the pending expiration of the Federal Reserve program, which involved purchasing up to $1.25 trillion in mortgage securities backed by Fannie Mae and Freddie Mac. It could open the door to higher interest rates, although the Fed last week hinted that it would keep its benchmark rate near zero for the foreseeable future — a comment likely aimed at preventing panic.

“Right now, the one thing that really stands out to the advantage of the industry is affordability, and if interest rates were to move up sharply from here, that would meaningfully cut into affordability,” says Bob Curran, a managing director at Fitch Ratings.

Together, the federal programs baited buyers into the market at a time when unemployment exceeded 10% and the credit markets had seized up. Indeed, sales of existing homes have climbed year over year for eight consecutive months, reversing 43 consecutive months of decline. Curran expects housing starts to rise to 620,000 in 2010, from 540,000 in 2009. However, he notes that the 2010 projection is still far short of the 2005 peak of 2.1 million.

Certain markets are faring better than others. Boston, parts of southern California, Houston and Dallas have seen sales and prices start to pick up. Even though California was the epicenter of the boom and bust, prices have bottomed in many of its markets, especially for entry-level buyers. “Whenever a foreclosed property comes onto the market [in California], usually there are 10 people ready to jump on it,” says Yun. The weakest markets include Florida, Las Vegas and Phoenix, which saw the largest pricing gains in the bubble years, as well as Michigan and Ohio, where job losses have been big.

Stephen Kim, a senior real estate analyst at Alpine Woods Capital Investors LLC, which holds shares in homebuilding companies, says he thinks there will be “only modest” declines in the months following the programs’ expiration unless the overall economy, or employment, also tanks.

Other factors — rising unemployment, rate resets on certain adjustable-rate mortgages, shadow inventory and escalating foreclosures — could derail the housing recovery, especially in the absence of the federal programs.

Then there’s the elephant in the room: jobs. The U.S.’s unemployment rate, which stood at 9.7% in February, is expected to hit at least 10.3% before peaking later this year, according to Gus Faucher, director of macroeconomics at Moody’s Economy.com. Says Brinkmann: “The fundamental driver in demand for housing still comes down to jobs.”

At the same time, the industry is bracing for an avalanche of specialized adjustable-rate mortgages, known as option ARMs, as well as certain alt-A mortgages, to reset over the next 12 to 15 months. At least $60 billion in option ARMs will reset in 2010, and an additional $64 billion will do so in 2011, according to First American CoreLogic. Experts say this will likely trigger another round of mortgage defaults and foreclosures in the second half of 2010 and cause home prices to fall another 5% to 10% this year before the market bounces back.

It might take even longer for true strength to be evident in the housing market. “Recent estimates suggest that it would take about 33 months to clear all troubled mortgages at the current pace of liquidations,” wrote Merrill Lynch analyst Michael Hanson in a recent note. Alex Barron, founder and senior research analyst at Housing Research Center LLC, has similar worries: “We need to be concerned about the homes that are significantly underwater but haven’t yet defaulted,” he says. “It may take another two, three or four years before we’re well on our way towards a real recovery.”

There are already signs of how fragile the rebound truly is. The latest month-over-month data show sales have slowed in recent months despite low mortgage rates and the home-buyer tax-credit program. New and existing home sales fell 2.2% and 0.6% respectively from January to February, and unsold inventory rose 9.5% during the same period. Some of February’s sluggishness could be explained by cold, snowy weather that blasted the Eastern seaboard, but the precise impact of this is hard to know.

While many analysts believe the market has stabilized, they emphasize that housing has a deep hole to climb out of. Since the housing peak in July 2006, home prices have plunged 30% on average, with certain bubble markets such as Phoenix, Las Vegas and parts of Florida seeing prices plummet more than 60%. Losses from the housing meltdown totaled $7 trillion at the end of 2009, according to Yun.

“Our best guess is that the market continues to move sideways in 2010 and we start to see recovery in sales and prices in more markets across the U.S. in 2011,” says Heather Fernandez, vice president of Trulia, a real estate research firm. “The housing market overall is starting to stabilize and move a bit sideways but certainly is not on the upswing.”

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My Take: I, for one, hope that they do extend both programs.  It is not like people are trying to purchase villas in Spain, they are trying to give a home to their families.  Both of these programs are allowing people with lower incomes to purchase their first home.  Of course, if they had the money they would probably purchase Marbella real estate because of the beautiful views they could get.

However, it is more likely that they will purchase Palisades real estate because they either live in the area or they are moving to the area.  The point is, many people in need those programs be able forward a new home even if it is used or previously owned.  There are many Upper Nyack NY homes there for sale because the original owners could not afford the mortgage.  That means there are people who want the homes and with the programs can afford them.

Even people in the Midwest are having troubles with their mortgages.  In fact, most of the country is having trouble with mortgages.  People in Indiana are going for Indianapolis IN refinancing just for a chance to keep their homes.  People in Kentucky are even trying to get their Louisville KY mortgage refinance to keep their home.  And now the government wants to cancel the two programs that are helping people across the country, that seems a little ridiculous to me.

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Related Resources

Celebrity Billionaires Shape Our Tastes

Cited: ABC News

Did you know that there are 1,011 billionaires in the world?  You may even recognize some of them because of media exposure if not overexposure.  Those recognize are deemed the “celebrity billionaires” because they are more than just rich, they are also famous and among the most well-known people on the planet.  In fact these “celebrity billionaires” influence us all in what we wear, watch, read and even invest in.  Take a look at Steve Jobs or Mark Zuckerberg.

Others may be wealthier or more influential atop the worlds of technology, media, fashion and finance, but these 10 not only reap billions from their holdings but also shape our tastes–what we wear, watch, read, invest in and, increasingly, how we communicate with each other.

On this last point no one trumps teen titan turned household name Mark Zuckerberg. With the exploding interest in Facebook, the former Harvard student is now a billionaire (net worth $4 billion) and one of the most recognizable people among millions of social-media obsessed Americans, who have put his company at the center of their daily lives.

Expect his profile to grow now that Hollywood has taken interest. David Fincher ( Seven, The Curious Case of Benjamin Button) is directing a film starring Jesse Eisenberg and Justin Timberlake about the early days at the company.

The founder and media favorite Steve Jobs (net worth $5.5 billion) is even more influential and well-known. While fellow technology titans like Oracle billionaire Larry Ellison ($28 billion) and Michael Dell ($13.5 billion) may be worth far more, Jobs is unquestionably the face of Silicon Valley. A lifetime creating groundbreaking consumer technology products is part of the reason, but he’s also the best showman in the business. Earlier this year he somehow turned the release of a tablet computer free of any radical computing advances into a media event that garnered front-page headlines around the world.

For those who are influenced by what the rich wear . . . Whether you need a cocktail dress, prom dresses or any other formal evening dress in plus size, misses or petite sizes you can find them online. You don’t have to spend a fortune on formal wear or designer dresses to look great for your special occasion.  You can find dresses for homecoming that come directly from the designer to you online.

This kind of bewitching star power is ripe for parody. A comedy series inspired by a fictional Steve Jobs blog and follow-up book written by former Forbes staffer Dan Lyons is being developed for pay cable channel Epix.

Oprah Winfrey doesn’t need any more media hype–and may actually profit from less. Over the last 25 years Winfrey turned her syndicated talk show into America’s town square and built a $2.4 billion fortune along the way. The upcoming season will be the last for Winfrey’s eponymous talk show, an announcement that brought the Queen of All Media to tears late last year. While spin-offs from Dr. Oz, Dr. Phil and Rachael Ray will continue, Winfrey has her eyes set on something bigger: the Oprah Winfrey Network, a cable network jointly owned by poised to bow in January 2011.

Let’s not forget another similar story with universal appeal, Steven Spielberg ($3 billion).  He is Hollywood’s preeminent storyteller and has been for two generations.  He is the man behind the library of seminal films that include Jaws, Raiders of the lost Ark, ET, Jurassic Park and Schindler’s list.  Recently he has released a fourth installment of Indiana Jones that grossed $786 million globally.  Now he is about to start a new film company with $1.5 billion with India’s Reliance ADA Group and there is still more fame and fortune to come.

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My Take: For me, the only one of these billionaires that has any influence over me is Steven Spielberg.  He makes excellent movies that are actually enjoyable when seen more than once.  As for influencing what I would wear, I am not going to wear artful dodger jeans just because one of the billionaires did.  That even includes Mek jeans and funny T-shirts!  Besides, I doubt that anybody will catch a billionaire wearing a rude T shirt because it might tarnish their image.

Actually, anyone who is that influenced by someone who is rich and/or famous has very low self-esteem.  They should try thinking for themselves instead of trying to imitate others.  Billionaires are usually more interested in promotional products for their companies.  You’ll often see a businessman in a casual situation handing out imprinted pens or promotional T-shirts to promote their companies.

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Other Resources

Celebrity Smoke

Today, you rarely see a celebrity smoking in public.  If you do, they are probably using e cigarettes contain only water, liquid nicotine and flavoring.  There is absolutely no tar, no carcinogens, and no carbon monoxide and know particulates.  An e cigarette is electronic, that means that it does not burn like a regular cigarette. It produces a vapor mist that is completely satisfying to the smoker in every way that a conventional cigarettte is.  It also means that the e-cig is healthier!

Citibank to Pay Back $8 Billion

Cited: Washington Post

In the federal rescue of banks, Citigroup was the biggest recipient.  Now the US is set to receive $8 million from bailing them out.  According to industry and federal sources, the Obama administration is also making final preparations to sell its stake in the New York bank.

At today’s prices, the sale would net more than $8 billion, by far the largest profit returned from any firm that accepted bailout funds and the transaction would be the second-largest stock sale in history.

On paper, the government’s 27% stake has grown in value to $33 billion. The size of the deal in the works has Wall Street buzzing. Only the stock offering by Japan’s Nippon Telegraph and Telephone, which raised $36.8 billion in 1987, was larger, according to Thomson Reuters.

Leading financial firms, including J.P. Morgan Chase, Morgan Stanley and Goldman Sachs, are vying to be chosen as the deal’s underwriters to gain the prestige of managing a historic stock sale as well as the fees from investors who buy the shares.

To improve their chances, some banks, such as Goldman Sachs, are offering their services to the Treasury Department at almost no cost, industry officials familiar with the matter said.

Sign of bailout’s success

The windfall expected from the stock sale would amount to a validation of the rescue plan adopted by government officials during the height of the financial panic, when the banking system neared the brink of collapse.

A year ago, Citigroup’s stock hovered around a dollar a share and the bank’s future seemed in doubt. On March 23, the stock closed at $4.31.

If the sale proceeds as planned, Citigroup would be able to cut nearly all of its ties to the $700 billion Troubled Assets Relief Program. Meanwhile, the administration could highlight the profit generated from the rescue of big banks.

“It’s unprecedented to do [a stock sale] of this size right after the financial industry has been so battered,” said an industry official who spoke on the condition of anonymity because he was not authorized to comment publicly. “It’s just a very bullish sign.”

The Treasury, as well as the Wall Street firms, declined to comment on the stock sale.

Citigroup’s performance has lagged behind its rivals in Lower Manhattan. In January, the company announced a $1.6 billion loss for 2009. By comparison, J.P. Morgan Chase earned $11.7 billion. But Citigroup’s executives said at the time that they saw its business stabilizing, allowing the company to set aside less money in the last three months of 2009 to cover losses than it did for the same period of 2008.

Citigroup was among nine major banks that were the first to take bailout funds in October 2008, and all have returned their federal loans. In addition to these repayments, the Treasury has received interest, dividends and about $3.5 billion from the sale of warrants, which are contracts allowing a holder to buy a company’s stock in the future.

Lower than expected costs

The true cost of rescuing the financial system, however, is not yet known. Senior Treasury officials have said that they expect the ultimate cost of TARP to be less than $100 billion. Besides TARP programs, mortgage financiers Fannie Mae and Freddie Mac have received more than $125 billion in federal aid. There is no indication that either firm will be able to repay the government anytime soon.

Yet many economists say that rescuing large Wall Street firms has come at a much lower cost than expected.

During the height of the financial crisis in October and November of 2008, Citigroup got more than $45 billion in federal aid in exchange for preferred shares. The government later restructured that package. Officials converted $20 billion into a loan, and the remaining $25 billion was converted in September into common stock at the price of $3.25 a share.

Citigroup was the only bank that gave common shares to the government, because the firm was in worse shape than its rivals and couldn’t promise to repay its aid entirely in cash.

In December, the bank announced it would raise money from investors to repay the $20 billion loan. The Treasury said at that time that it would sell its Citigroup shares in phases this year, beginning with a $5 billion deal.  The value of the government’s stake had grown to $33.1 billion at the end of regular trading March 23.

Citigroup diluted the value of its stock that was held by existing stockholders by issuing stock and giving it to the government last year.  However, a reverse stock split to enhance the value of shares could be ratified by the company.  In fact, the bank’s stockholders did approve a proposal by the board of directors to speed a stock reverse split before June 30 last fall.

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My Take: Okay, I can understand the shares part of the deal with Citigroup.  However, if they are losing money, how can they pay back the $20 billion loan?  If I understand this correctly, this has nothing to do with commercial mortgage loans and that it is a straightforward business loan.  I would imagine that as long as they keep the interest paid up, that would keep them from defaulting on it.  I just worry that they are losing money and will not be able to pay back.

Maybe the government would have been better off with commercial mortgages on all the banks they helped out.  At least that way they would have property to sell to recoup any losses.  Maybe these banks should get into one of the many debt settlement services to help them out.  They always complain about the average Joe citizen not paying their bills and getting into a debt settlement program.  Why shouldn’t they follow their own advice?

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