NEW YORK (Reuters) –
It's still not cheap, but Livin' La Vida Madoff may now cost a bit less.

Asking prices for homes once occupied by now imprisoned Ponzi schemer Bernard Madoff in Manhattan's Upper East Side and in Palm Beach, Florida, have been cut, after about two months on the market.

Madoff's 4,000-square-foot duplex Manhattan penthouse, "perched atop a distinguished white-glove prewar cooperative" according to the broker Sotheby's International Realty, is now being offered for $8.9 million, 10 percent below its initial $9.9 million asking price.

The price of the 8,750-square-foot home in Palm Beach was cut 7 percent to $7.9 million from $8.49 million, according to the broker Corcoran Group.

Corcoran calls that home "a return to classic Florida island living" of the 1950s and 1960s "when Palm Beach was a less manicured tropical paradise."

In contrast, Madoff's beachfront home sold last month for $9.41 million, above its $8.75 million asking price, and also listed by Corcoran. Steven Roth, chairman of Vornado Realty Trust, was the buyer, according to The Wall Street Journal.

Corcoran did not immediately return requests for comment. Madoff himself estimated the Manhattan penthouse was worth $7 million and the Palm Beach home $11 million.

Sale proceeds will go toward reimbursing victims of Madoff's estimated $65 billion Ponzi scheme.

U.S. Marshal Joseph Guccione said the price for the Manhattan penthouse was reduced to attract more potential buyers.

Irving Picard, the trustee supervising the liquidation of Madoff's investment firm, last month said he had recovered $1.4 billion of Madoff assets. That's just 7 percent of the $21.2 billion of investor losses he had identified.

An auction is scheduled for Saturday at a Sheraton hotel in Manhattan of items once used by Madoff and his wife Ruth, including Rolex watches, Hermes and Prada handbags, and a satin New York Mets baseball jacket emblazoned with Madoff's name.

Proceeds are expected to be at least several hundred thousand dollars, according to low estimates from the U.S. Marshals Service and Gaston & Sheehan Auctioneers Inc, (http://www.txauction.com), and also go to Madoff victims.

Bernard Madoff is serving a 150-year prison sentence in North Carolina.

(Reporting by Jonathan Stempel, editing by Dave Zimmerman)

STRASBOURG, France – Europe's court of human rights says the display of crucifixes in Italian public schools violates religious and education freedoms.
A seven-judge panel sided with a complaint filed by Soile Lautsi, a parent who claimed public schools in her northern Italian town refused to remove the Roman Catholic symbols from classrooms. Lautsi says the crucifixes violated the secular principles the public schools are supposed to uphold.
Tuesday's ruling awarded euro5,000 ($7,390) in damages to Lautsi, which the Italian government is to pay her. It has not ordered Italian authorities to remove the crucifixes.

NEW YORK (Reuters) –
Crude oil rose and the dollar fell on Monday on strong worldwide factory data and a surprise jump in U.S. pending home sales, but U.S. stocks see-sawed before ending higher after a sell-off in banking shares.

The data boosted risk appetite as it pointed to steady improvement in the economy, but critical remarks by a Federal Reserve official caused investors to sell financial shares and snuff an early rally on Wall Street.

The major U.S. equity indexes had risen about 1 percent as the data and strong results from Ford Motor Co (F.N) spurred broad-based gains and soothed worries over the strength of the recovery.

But Jon Greenlee, associate director of the Federal Reserve's Division of Banking Supervision and Regulation, said U.S. banks are at risk of sizable new loan losses, particularly on commercial property.

Some banks may not have sufficient capital to fully cushion against setbacks, Greenlee said in testimony before a congressional subcommittee meeting in Atlanta.

Questions about whether the seven-month rally in U.S. equities has run out of steam also weighed on sentiment. The Fed is set to begin a two-day policy meeting on Tuesday.

"The market has turned from buying on dips to selling on rallies," said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Co in Reading, Pennsylvania.

The Dow Jones industrial average (.DJI) was up 76.71 points, or 0.79 percent, at 9,789.44. The Standard & Poor's 500 Index (.SPX) was up 6.69 points, or 0.65 percent, at 1,042.88. The Nasdaq Composite Index (.IXIC) was up 4.09 points, or 0.20 percent, at 2,049.20.

The economic data gave the oil markets a shot in the arm, said Phil Flynn, an analyst at PFGBest Research in Chicago.

"Oil futures are still trading in the recent range here, but the market is sensing that if manufacturing continues to be strong that will translate into higher demand for oil," Flynn said.

U.S. crude rose $1.13 to settle at $78.13 a barrel. In London, Brent crude settled $1.35 higher at $76.55 a barrel.

Commodity prices mostly rose, lifting commodity-linked currencies such as the Australian and Canadian dollars.

"The pattern in which stocks and the euro are correlated is intact. As stocks rise, so does the euro," said Marc Chandler, global head of FX strategy at Brown Brothers Harriman in New York.

"But I don't think we're out of this consolidation and correction in stocks, and even in the euro. I'm not convinced that the downside correction in the euro is over," he said.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index (.DXY) down 0.10 percent at 76.223.

The euro was up 0.36 percent at $1.4768, and against the yen, the dollar was up 0.27 percent at 90.32.

U.S. December gold futures settled up $13.60 at $1,054 an ounce in New York.

The benchmark 10-year U.S. Treasury note was down 11/32 in price to yield 3.43 percent.

Earlier in Asia, worries about the U.S. financial sector resurfaced after CIT Group Inc (CIT.N), the lender to small and mid-sized U.S. companies, filed for bankruptcy.

The MSCI index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1 percent to touch a one-month low. Japan's Nikkei average (.N225) dropped 2.3 percent, mirroring the 2.8 percent slide in the U.S. S&P 500 (.SPX) on Friday.

(Reporting by Chuck Mikolajczak, Gertrude Chavez-Dreyfuss, Matthew Robinson and Ellen Freilich in New York; Emelia Sithole-Matarise and Joanne Frearson in London; writing by Herbert Lash; Editing by Leslie Adler)

MARRAKECH, Morocco – Trying to mute Arab criticism that the Obama administration had retreated from its tough stance on Israeli settlements, U.S. Secretary of State Hillary Rodham Clinton on Monday softened her praise for Israel's offer to restrain new housing in Palestinian areas.
While Israel was moving in the right direction in its offer to restrict but not stop the settlements, Clinton said, its offer "falls far short" of U.S. expectations.
Clinton said her earlier praise of Israel's offer, during a stop in Jerusalem, had been intended as "positive reinforcement." But her comment drew widespread criticism from Persian Gulf ministers who interpreted it as a U.S drawback on settlements, which have been the main obstacle to a resumption of Israeli-Palestinian peace talks.
In a sign of U.S. eagerness to calm Arab concerns, Clinton is extending her trip by one day to fly to Cairo to meet with President Hosni Mubarak on Wednesday, her staff announced. She had been scheduled to return to Washington on Tuesday.
Clinton's comments in Jerusalem on Saturday appeared to reflect a realization within the Obama administration that Netanyahu's government will not accept a full-on settlement freeze and that a partial halt may be the best lesser option. Her appeal on Saturday seemed designed to make the Israeli position more palatable to the Palestinians and Arab states.
Clinton had traveled to the region only reluctantly, concerned her visit might be seen as a failure, according to several U.S. officials. She agreed to meet Israeli and Palestinian leaders after pressure from the White House, according to the officials, who spoke on condition of anonymity to discuss internal administration thinking.
During a photo-taking session Monday with her Moroccan counterpart, Clinton was asked by a reporter about the Arab reaction, and she responded by reading from a written statement that appeared designed to counter the skepticism about the Obama administration's views on settlements.
"Successive American administrations of both parties have opposed Israel's settlement policy," she said. "That is absolutely a fact, and the Obama administration's position on settlements is clear, unequivocal and it has not changed. As the president has said on many occasions, the United States does not accept the legitimacy of continued Israeli settlements."
Clinton's tweaking of her earlier remarks appeared to satisfy at least some of the Morocco meeting attendees. Palestinian Foreign Minister Riad Malki said Monday that "we have heard her say something completely different from that statement in line with previous statements, so we are happy that such a position was highlighted and brought back to the right line and right now we will see how things will go."
Malki added that "we completely appreciate the sincere efforts made by President Barack Obama and his team to take this issue as a top priority and to try to deal with it from day one."
In her recalibrated comments Monday, Clinton also called on the Israelis to do more to improve "movement and access" for Palestinians and on Israeli security arrangements.
She added, however, that Israel deserved praise for moving in the right direction.
"This offer falls far short of what we would characterize as our position or what our preference would be," she added. "But if it is acted upon, it will be an unprecedented restriction on settlements and would have a significant and meaningful effect on restraining their growth."
In her statement to reporters, Clinton also stressed that the Palestinian authorities deserved credit for what she called "unprecedented" steps to improve security in the West Bank and praised the Palestinians for progress in training their security forces.
On Monday evening, Clinton met with representatives of the Gulf Cooperation Council, plus officials from Egypt, Jordan, Iraq and Morocco. Clinton also flew Monday to the south-central city of Ouarzazate for an audience with King Mohammed VI, then returned to Marrakech for talks with foreign ministers of several Persian Gulf nations.
Clinton was expected to meet separately with Saudi Foreign Minister Prince Saud al-Faisal, who has rejected U.S. appeals for improved Arab relations with Israel as a way to help restart Middle East peace talks.
After taking office in January, Obama buoyed Palestinian hopes for progress toward establishing a Palestinian state with his outreach to the Muslim world and an initially tough stance urging a full freeze to all settlement construction.
But after making little headway with the Israelis in recent months, Clinton urged Palestinian leader Mahmoud Abbas in a face-to-face meeting in Abu Dhabi on Saturday to renew talks, which broke down late last year, without conditions. Abbas said no, insisting that Israel first halt all settlement activity in the West Bank and east Jerusalem — lands the Palestinians claim for a future state.

Then, at a joint news conference with Israeli Prime Minister Benjamin Netanyahu late Saturday in Jerusalem, Clinton praised Netanyahu's offer to curb some settlement construction, saying it was an unprecedented gesture.

That statement provoked a chiding by Palestinian government spokesman Ghassan Khatib. Jordan and Egypt also issued statements Sunday critical of the latest U.S. approach.

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Associated Press writer Matthew Lee in Washington contributed to this report.