Saturday, November 29, 2008

FDIC Says 171 Banks on Watch List

WASHINGTON - The number of problem U.S. banks and thrifts jumped in the third quarter to 171, from 117 at the end of the prior quarter, marking the highest level since the end of 1995 and adding to expectations that more banks will fail, regulators said on Tuesday.

The Federal Deposit Insurance Corp said the industry-funded reserve to back deposits was $34.6 bln as of September 30, a 23.5 percent decrease from the previous quarter.

The FDIC also reported that bank industry income fell 94 percent from the previous year to $1.7 billion in the third quarter.

Whitney Houston Shoots Down Rumors of a Bobby Brown Reunion

Whitney Houston has issued a statement denying the rumors of a reunion with Bobby Brown.

Acting on behalf of Houston, the singer's publicist Nancy Seltzer calls speculation that the exes are getting back together "a complete fabrication."

Seltzer pinpoints the rumors to a report in Wednesday's Chicago Sun-Times that said Houston and Brown had been spotted out and about in Georgia looking romantic.

Houston and Brown divorced in April 2007 after 14 years of marriage. During their tumultuous union, Brown was arrested on drug and alcohol charges, and Houston twice entered drug rehabilitation programs. Houston has custody of their teenage daughter, Bobbi Kristina.

Goldman Sachs Closer to Becoming Bank

NEW YORK - Goldman Sachs Group Inc. on Friday won a charter from New York State's banking department, a key step in the Wall Street bank's effort to change its investment banking model and gather deposits.

The new bank will be called Goldman Sachs Bank USA, and include Goldman Sachs Capital Markets LP, Goldman Sachs Credit Partners LP and Goldman Sachs Mortgage Co, the banking department said. Goldman will merge its Utah-based industrial loan company into its New York-chartered trust company. Goldman Sachs Bank will be based in New York City.

A Goldman spokeswoman declined to comment.

The approval came two months after the Federal Reserve designated Goldman and rival Morgan Stanley as bank holding companies. That change gives them access to more low-cost funding and the $700 billion federal bank bailout, but requires greater regulatory scrutiny and reduced risk.

In seeking a state charter, Goldman diverged from Morgan Stanley and other lenders that have sought national charters, which would make it easier to expand into many states. JPMorgan Chase & Co Citigroup Inc and Bank of America Corp also have national charters.

Goldman's pursuit of a state charter suggests the company will continue to focus on investment banking, trading and wealthier clients, and not soon build a nationwide retail banking business. Morgan Stanley, in contrast, has said it will pursue "opportunistic" bank acquisitions.

A state charter nevertheless permits Goldman to open branches in states with "reciprocal" agreements, an arrangement now spanning roughly 25 states. New York-chartered banks may also operate branches in neighboring Connecticut, New Jersey and Pennsylvania, while remaining subject to New York laws.

Other lenders with New York charters include Bank of New York Mellon Corp and M&T Bank Corp.

Goldman's decision to seek a state banking charter "reflects confidence in New York as a financial center and in its banking department as an effective regulator," State Banking Superintendent Richard Neiman said in a statement.

Goldman and Morgan Stanley changed their banking model following the collapses of Bear Stearns Cos and Lehman Brothers Holdings Inc and Merrill Lynch & Co's agreement to be acquired by Bank of America.

Many investors worried about the sustainability of the Wall Street banking model, especially if customers or trading partners were to flee to lenders with more stable funding.

Goldman in September won a $5 billion infusion from Warren Buffett's Berkshire Hathaway Inc., four days after Goldman obtained bank holding company status.

Shares of Goldman closed Friday up $2.49 at $78.99. They have fallen 63 percent this year.

(Reporting by Jonathan Stempel; editing by Carol Bishopric)
Copyright 2008, Reuters

Raul Castro attends first beatification in Cuba

By ANDREA RODRIGUEZ- Thousands of Roman Catholic faithful and even President Raul Castro gathered Saturday for the beatification of a monk known as the "father of the poor" - the first ceremony of its kind on Cuban soil.

The act brings Friar Jose Olallo Valdes, a member of the Hospitaller Order of St. John of God, one step closer to sainthood.

Olallo was born in 1820 and abandoned at a Havana orphanage. He came to the central city of Camaguey to take his religious vows at 15 and stayed the rest of his life, earning his nickname by caring for the needy and chronically ill. He died in 1889 at age 69.

Beatification declares a departed person's ability to intercede on the part of the faithful who pray to him and is the last step to possible sainthood. Olallo is credited with a miracle in 1999, when a 3-year-old girl with an abdominal tumor made an unlikely recovery after her family prayed to him for help.

Authorities erected a large, open-air cathedral in Camaguey's Plaza de la Caridad and Cuba's 77-year-old president made a previously unannounced appearance, wearing a gray suit and taking a seat in the front row.

"In the face of a materialist culture that we see imposing itself everywhere and that pushes aside the weak and the poor, we learn from Olallo the virtues of the wisdom of God and how to love thy neighbor universally," said Jose Saraiva, prefect emeritus of the Congregation for the Causes of Saints, the Vatican's saint-making office, who traveled to Cuba from Rome for the ceremony.

To commemorate the occasion, officials released a collection of doves and rang church bells. There was also a 2-kilometer (1-mile) pilgrimage.

The Cuban Roman Catholic Church started the process of beatifying Olallo in 1989, the 100th anniversary of his death. His is the first beatification in Cuba, but he is not the first Cuban to be beatified.

Cuban-born, Augustinian deacon Jose Lopez Piteira was beatified in Rome last year. He did most of his work in Spain, where he was shot in 1936 during the civil war.

Pope Benedict XVI released a statement saying he hoped Olvallo's beatification will "give renewed apostolic vitality" to religious Cubans.

"We give thanks to the pope who, in Rome, watches us from a window in his heart," Camaguey Archbishop Juan Garcia said Saturday.

The beatification and Raul Castro's attendance could help further improve the once icy relationship between the church and Cuba's communist government. The ceremony was widely announced in state-controlled news media, unusual in a country where official news outlets often ignore religious matters.

The single-party, communist government never outlawed religion, but expelled priests and closed religious schools when Fidel Castro took power in January 1959.

Tensions eased in the early 1990s when the government removed references to atheism in the constitution and let believers of all faiths join the Communist Party. They warmed more when Pope John Paul II visited in 1998.

Raul Castro's first diplomatic meeting as head of state was with Cardinal Tarcisio Bertone, the pope's secretary of state whose previously scheduled visit to the island coincided with Fidel's transferal of power.

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