Saturday, August 25, 2007

Fed Bends Rules To Help Two Big Banks

It is stories like this that make you wonder if our banking system is truly safe.
In a clear sign that the credit crunch is still affecting the nation's largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup and Bank of America, according to documents posted Friday on the Fed's web site.

The Aug. 20 letters from the Fed to Citigroup and Bank of America state that the Fed, which regulates large parts of the U.S. financial system, has agreed to exempt both banks from rules that effectively limit the amount of lending that their federally-insured banks can do with their brokerage affiliates. The exemption, which is temporary, means, for example, that Citigroup's Citibank entity can substantially increase funding to Citigroup Global Markets, its brokerage subsidiary. Citigroup and Bank of America requested the exemptions, according to the letters, to provide liquidity to those holding mortgage loans, mortgage-backed securities, and other securities.

This unusual move by the Fed shows that the largest Wall Street firms are continuing to have problems funding operations during the current market difficulties, according to banking industry skeptics. The Fed's move appears to support the view that even the biggest brokerages have been caught off guard by the credit crunch and don't have financing to deal with the resulting dislocation in the markets. The opposing, less negative view is that the Fed has taken this step merely to increase the speed with which the funds recently borrowed at the Fed's discount window can flow through to the bond markets, where the mortgage mess has caused a drying up of liquidity.
I am not sure what this all means but I will be keeping a very close eye on the markets in the weeks ahead. Are we heading toward some financial meltdown?
The regulations in question effectively limit a bank's funding exposure to an affiliate to 10% of the bank's capital. But the Fed has allowed Citibank and Bank of America to blow through that level. Citigroup and Bank of America are able to lend up to $25 billion apiece under this exemption, according to the Fed. If Citibank used the full amount, "that represents about 30% of Citibank's total regulatory capital, which is no small exemption," says Charlie Peabody, banks analyst at Portales Partners.

The Fed says that it made the exemption in the public interest, because it allows Citibank to get liquidity to the brokerage in "the most rapid and cost-effective manner possible."

So, how serious is this rule-bending? Very. One of the central tenets of banking regulation is that banks with federally insured deposits should never be over-exposed to brokerage subsidiaries; indeed, for decades financial institutions were legally required to keep the two units completely separate. This move by the Fed eats away at the principle.
The more I read, the more I see this action as a defensive measure against a banking system collapse brought about by the intermingling of traditional banking business and the more risky securities and hedge fund businesses. Although this action by the Federal Reserve is troubling, it does signify that they are aware of the problems and are doing what is necessary to avoid a financial disaster. Will their actions be enough to ward off a meltdown? Lets hope so!!

Friday, August 24, 2007

Vick Admits Dog Killing

NFL star Michael Vick has admitted that he and his co-conspirators killed dogs that did not fight well in papers filed on Friday with a federal court in Virginia.
Vick said he would plead guilty to one count of "Conspiracy to Travel in Interstate Commerce in Aid of Unlawful Activities and to Sponsor a Dog in an Animal Fighting Venture," in a plea agreement filed at the federal district court in Richmond, Virginia.

The charge is punishable by up to five years in prison, a $250,000 fine, "full restitution, a special assessment, and 3 years of supervised release," the plea deal says.

Federal prosecutors agreed to ask for the low end of the sentencing guidelines.

"The defendant will plead guilty because the defendant is in fact guilty of the charged offense," the plea agreement says.
Now that he has admitted guilt everyone should flood the NFL with calls and e-mails telling them that Michael Vick should never grace the playing field again. His behavior was sub human and he must never be in a position to influence children again.

Top General To Urge Iraq Troop Cut

The chairman of the Joint Chiefs of Staff is expected to advise President Bush to reduce the U.S. force in Iraq next year by almost half, potentially creating a rift with top White House officials and other military commanders over the course of the war.
Administration and military officials say Marine Gen. Peter Pace is likely to convey concerns by the Joint Chiefs that keeping well in excess of 100,000 troops in Iraq through 2008 will severely strain the military. This assessment could collide with one being prepared by the U.S. commander in Iraq, Army Gen. David H. Petraeus, calling for the U.S. to maintain higher troop levels for 2008 and beyond.

Petraeus is expected to support a White House view that the absence of widespread political progress in Iraq requires several more months of the U.S. troop buildup before force levels are decreased to their pre-buildup numbers sometime next year.
Why would this General go against the Bush policy of perpetual war? General Pace understands that this war and its long deployments has stretched the military to a breaking point. He realizes that we could not respond to events in other parts of the world without some drastic changes to the military such as a draft.

I believe that Bush's speech comparing the Wars in Iraq and Vietnam was done to lay the groundwork for a return to the draft. Military leaders must realize that our forces are broken and that we simply can not keep up deployments without a draft.

The issue is that they can not publicly say they support a draft for what that would do to Republicans in 2008. The next president will be left to clean up the mess in Iraq and restore our military. They are hoping the choices that will need to be made will be so unpopular that they would regain the Presidency in 2012. It is a gamble they seem willing to make but one I think they will lose in the end. Americans will understand that it was the ill advised war in Iraq that brought our military to the breaking point and they punish the Republican party for it.

New Homes Sales Rise But Prices Fall

New home sales posted an unexpected gain in July, according to a government report Friday a rare ray of good news in the stormy housing market but economists warn the glint of sunshine is likely to be short-lived.
New home sales rose 2.8 percent to an annual rate of 870,000 from a revised 846,000 rate in June, the Commerce Department reported. Economists had been looking for sales to fall to a rate of about 825,000, a level that would have been a seven-year low.

Even with the unexpected rise, the pace of sales only looked good by comparison to very weak sales seen so far this year. The pace of sales is still off 10.2 percent from year ago levels, and the July sales pace would have been lower than any monthly reading seen from October 2001 through January of this year.

Much of the increase came in the West, which saw sales jump 22 percent from June. The South posted only a 0.6 percent rise, while the Midwest and Northeast continued to see new home sales fall. All four regions have sales well below year-earlier levels.

Economists said that problems in the secondary market for mortgages seen in August, which has made subprime mortgages and the so-called jumbo mortgages more difficult to come by, will hit results going forward.

"We were in a slightly stronger position going into this latest hurt than we thought we were. That's the good news," said Bill Hampel, chief economist for the Credit Union National Association. "But this is probably the last bit of good news we'll get from this market for a long time."
This latest report was unexpected but it would appear from the comments that the worst in the housing market is far from over. There are still many hurdles to overcome such as the expected foreclosures, stricter underwriting guidelines and higher mortgage interest rates which could derail any unexpected uptick in the housing market.

I have said for some time that any extended housing slump will push the economy into recession and I stand by that prediction. I hope I am wrong and that the downturn will just slow growth and not push us into recession.

The Surge Has Forced Even More Iraqis To Flee Their Homes

The humanitarian crisis in Iraq continues.
The number of Iraqis fleeing their homes has soared since the American troop increase began in February, according to data from two humanitarian groups, accelerating the partition of the country into sectarian enclaves.

Despite some evidence that the troop buildup has improved security in certain areas, sectarian violence continues and American-led operations have brought new fighting, driving fearful Iraqis from their homes at much higher rates than before the tens of thousands of additional troops arrived, the studies show.

The data track what are known as internally displaced Iraqis: those who have been driven from their neighborhoods and seek refuge elsewhere in the country rather than fleeing across the border. The effect of this vast migration is to drain religiously mixed areas in the center of Iraq, sending Shiite refugees toward the overwhelmingly Shiite areas to the south and Sunnis toward majority Sunni regions to the west and north.

Though most displaced Iraqis say they would like to return, there is little prospect of their doing so. One Sunni Arab who had been driven out of the Baghdad neighborhood of southern Dora by Shiite snipers said she doubted that her family would ever return, buildup or no buildup.

“There is no way we would go back,” said the woman, 26, who gave her name only as Aswaidi. “It is a city of ghosts. The only people left there are terrorists.”

Statistics collected by one of the two humanitarian groups, the Iraqi Red Crescent Organization, indicate that the total number of internally displaced Iraqis has more than doubled, to 1.1 million from 499,000, since the buildup started in February.
To put that number into perspective that is roughly 4.5% of the population. If we were to have the same percentage of Americans flee their homes, we would empty the cities of New York, Los Angeles and Chicago.

Iraq is a humanitarian nightmare. How can anyone think we can restore stability to a country with so much of its population displaced, many homeless and most without basic services. You can not completely understand the situation in Iraq until you know the real facts. What we have done to Iraq as a result of this ill advised invasion is criminal.

Thursday, August 23, 2007

More Republican Sexual Hypocrisy

Wow these pious Christian Conservative Republicans sure are kinky.
A former lawmaker and president of a North Carolina Christian group pleaded guilty Wednesday to soliciting a prostitute.

Coy C. Privette, 74, of Kannapolis, was placed on probation for one year after pleading guilty to six counts of aiding and abetting prostitution. He also was ordered to perform 48 hours of community service and receive counseling.

Privette was arrested last month after investigators said he rented a hotel room and paid Tiffany Denise Summers, 32, of Salisbury, for sexual acts. Summers was charged with six counts of prostitution in the case.
Do as I say not as I do is the mantra of these freaks. Hey I have no problem if you want to get your freak on just don't pass judgement on others and spout your holier than thou nonsense. I need a scorecard to keep up the recent arrests of Republicans on sex charges.

The Iraq Disaster Continues

The Iraqi government will become more precarious over the next six to 12 months and its security forces have not improved enough to operate without outside help, intelligence analysts conclude in a new National Intelligence Estimate.
The report says that Iraqi Security Forces, working alongside the United States, have performed "adequately." However, it says they haven't shown enough improvement to conduct operations without U.S. and coalition forces and are still reliant on others for key support.

The findings could provide support for the Bush administration's argument that coalition forces need to stay in Iraq in order to avoid letting security lapse, should they withdraw from certain areas.
This report will embolden the Bush administration as it tries to gain support for a continued presence in Iraq. Although the assertions within this report are most likely true, when will there be an improvement in the situation within Iraq. At this rate we will be there forever, but I think that was the goal anyway. We set the fire now we must stay till the fire is out. Since the Sunni-Shiite conflict has lasted for hundreds of years that would mean this conflict will not end in my lifetime.

What we have set in motion in Iraq will reverberate for generations. It is not just a huge foreign policy blunder it is a human catastrophe started by a moronic President of the United States. The blood on his hands will never historically be washed off.

Ari Fleischer Rears His Ugly Head To Cheerlead The Iraq War

A sort of shadow White House communications shop has emerged to help the beleaguered president sell his unpopular war to the American people.

Freedom's Watch was formed by former White House and Bush administration officials and funded by Republican big-money donors. Today it began airing $15 million worth of ads -- featuring veterans and their families -- aimed at influencing wavering members of Congress.

"I know what I lost," says one of those in a TV ad, veteran John Kriesel, who lost both legs in a blast near Fallujah last December. "I also know if we pull out now, everything I've given and sacrificed will mean nothing."
Ari Fleischer was on MSNBC's Hardball yesterday and was asked the name of the soldier in the ad. he could not name that soldier. That should tell you all you need to know about this group. The soldiers are once again just props to spread propaganda and once again they try to tie 9/11 to Iraq. Its more lies. Please watch the video and judge for yourself. Ari Fleischer used to get up every moring, put on his suit and tie and go out and lie to the American public. He is doing that again. Lets call him on it.

Pentagon Cuts Armored Vehicles Due In Iraq In 2007

U.S. troops in Iraq will receive at least 1,000 fewer special armored vehicles than expected this year due to the amount of time needed for shipment, the Pentagon said on Wednesday.
Pentagon spokesman Geoff Morrell said the Defense Department expected defense contractors to produce 3,900 Mine Resistant Ambush Protected (MRAP) vehicles this year. But only 1,500 would make it to the war zone -- down from the Pentagon's previous shipment target of 2,500 to 3,000.

"If we could get 1,500 to theater by the end of this year, that would be a positive development," Morrell said.
Why is it that this administration constantly talks about supporting the troops yet its actions say something entirely different. They have had years to get these vehicles to the troops. If they cared as much about the soldiers as they do about tax cuts for the wealthy, our death toll in Iraq could be cut drastically. These people make me sick.

Wednesday, August 22, 2007

U.S. Officials Rethink Hopes For Iraq Democracy

Who said we need Democracy in Iraq, a functioning government will be just fine.
Nightmarish political realities in Baghdad are prompting American officials to curb their vision for democracy in Iraq. Instead, the officials now say they are willing to settle for a government that functions and can bring security.

A workable democratic and sovereign government in Iraq was one of the Bush administration's stated goals of the war.

But for the first time, exasperated front-line U.S. generals talk openly of non-democratic governmental alternatives, and while the two top U.S. officials in Iraq still talk about preserving the country's nascent democratic institutions, they say their ambitions aren't as "lofty" as they once had been.

"Democratic institutions are not necessarily the way ahead in the long-term future," said Brig. Gen. John "Mick" Bednarek, part of Task Force Lightning in Diyala province, one of the war's major battlegrounds.
So what does 3700 dead soldiers, countless dead Iraqis and $500 billion dollars get you? According to this report nothing since the new goal would be just a functioning secure society. Gee isn't that what they had under Saddam Hussein? When Cindy Sheehan asks for what noble cause her son died for she will have the serenity of knowing that her son died for absolutely nothing as did all the others.

More GOP Sexual Hypocrisy

Tim Droogsma, a former press secretary to a U.S. senator and a Minnesota governor, was arrested Tuesday in a midafternoon prostitution sting on St. Paul's East Side.
He allegedly arranged a deal for sex from an undercover officer through Craig's List, police spokesman Tom Walsh said Wednesday.

Authorities cited Droogsma, 50, of Red Wing, on a misdemeanor charge of engaging in prostitution and jailed him for about 12 hours before releasing him on his own recognizance early Wednesday.
I am beginning to need a score card to keep up with the arrests of GOP operatives on sex charges. This is the family values party? What family are we talking about, the Hefners?

Fox News Wants War With Iran and Wanted War With Iraq

Watch this and then tell me that Fox News is not the propaganda arm of the the right wing war mongers that currently run our government.

Bush Compares Iraq To Vietnam

President Bush, laying the groundwork for next month's critical debate in Washington over the Iraq war, said Wednesday that his surge policy was "gaining momentum" and called for American perseverance and patience.
In a speech to the Veterans of Foreign Wars, Bush drew parallels to U.S. experience in Asia, saying steadfastness against critics of U.S. policy in Japan and Korea in the post-war years led to blossoming democracies and thriving economies in both countries.

"The advance of freedom in these lands should give us confidence that the hard work we are doing in the Middle East can have the same results we have seen in Asia — if we show the same perseverance and sense of purpose," he said.
This man is a complete moron. The similarities between Iraq and Vietnam can be summed up in one word "Quagmire". The lessons of Vietnam were ignored in Iraq. Even Dick Cheney in 1994 could see the debacle of invading Iraq.

This is the latest attempt for the United States to keep up the game of whack a mole that we are playing in Iraq. This is also an attempt to focus the blame for loss of the war on the next President. The President is willing to sacrifice the lives of our soldiers to escape the ultimate blame for the disaster that is Iraq. That alone should be grounds for his impeachment.

Iraq Helicopter Crash Kills 14 U.S. Soldiers

Fourteen U.S. soldiers died Wednesday when their helicopter crashed in northern Iraq, according to a U.S. military statement.
Separately, at least 28 people were killed and 91 wounded when a suicide car bomb detonated outside a police building in the Iraqi town of Baiji, north of Baghdad, in Salaheddin province, police said.
Since the start of the war, 3,714 U.S. troops have died in Iraq.
Do you still think the surge is working? How much more death and destruction must be tolerated before the American people will finally take to the streets and show that we will not tolerate one more death?

Tuesday, August 21, 2007

Petraeus Report To Be Given On 9/11

First we found out that the September report everyone has been waiting for will not be written by General Petraeus but by the White House now they have changed the date from 9/15 to 9/11 for his testimony before Congress.

This administration will do anything to avoid telling the truth to the American public including using the deaths of 3000 on 9/11 to justify the continuation of this debacle in Iraq. The problem is that Iraq had nothing to do with 9/11. People that still beleive that it did need to turn off Fox News and educate themselves.

This administration relies on the stupidity of the American population. Lets show them that we are not stupid and reject this blatant dog and pny show scheduled for 9/11.

Somethings Happening Here

Why is it that those who point to the lack of attack never mention that we were not attacked on American soil by radical Islam from February 1993 until 9/11/01. There is still two years to go to match that time frame but worldwide terrorist attacks have increased dramatically. You think the war in Iraq has nothing to do with that?

New Bush Policies Limit Reach of Child Insurance Plan

The Bush administration, engaged in a battle with Congress over whether a popular children's health insurance program should be expanded, has announced new policies that will make it harder for states to insure all but the lowest-income children.
New administrative hurdles, which state health officials were told about late last week, are aimed at preventing parents with private insurance for their children from availing of the government-subsidized State Children's Health Insurance Program. But Democrats and children's advocates said that the announcement will jeopardize coverage for children whose parents work at jobs that do not provide employer-paid insurance.

Under the new policy, a state seeking to enroll a child whose family earns more than 250 percent of the poverty level -- or $51,625 for a family of four -- must first ensure that the child is uninsured for at least one year. The state must also demonstrate that at least 95 percent of children from families making less than 200 percent of the poverty level have been enrolled in the children's health insurance program or Medicaid -- a sign-up rate that no state has yet managed.
Doesn't an article like this just warm your heart? The Bush administration only cares about the unborn. Once you are here you are on your own. The SCHIP programs have been very successful in getting uninsured children insured. The provision that you must be uninsured for one year is the most troubling. Children need yearly health exams as do all people. What happens to the children who become sick during that year of uninsurance? How can a family of four earning $52,000 afford private health insurance? The SCHIP programs at least cover the children. If you still think this administation or the Republican party cares at all about the poor or middle class, I have a bridge to sell you in Minneapolis.

U.S. Foreclosures Rise Sharply In July

Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday.
In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc.

A total of 164,644 foreclosure filings were reported in June.

The national foreclosure rate in July was one filing for every 693 households, the firm said.

"While 43 states experienced year-over-year increases in foreclosure activity, just five states — California, Florida, Michigan, Ohio and Georgia — accounted for more than half of the nation's total foreclosure filings," said RealtyTrac Chief Executive James J. Saccacio.

Nevada posted the highest foreclosure rate: one filing for every 199 households, or more than three times the national average. It reported 5,116 filings during the month, an increase of 8 percent from June.
Seeing Nevada, Florida, Ohio and Georgia on this list must be giving the Republican party many sleepless nights.

The foreclusire nightmares that are resulting from the subprime mortgage debacle will cause economic downturn in these states. With Ohio trending blue and Nevada and Florida truly purple states, the chances of a democratic president in 2008 grow.

Monday, August 20, 2007

Soldiers Tell The Truth About Iraq

From the Sunday New York Times this op-ed from soldiers in Iraq:
VIEWED from Iraq at the tail end of a 15-month deployment, the political debate in Washington is indeed surreal. Counterinsurgency is, by definition, a competition between insurgents and counterinsurgents for the control and support of a population. To believe that Americans, with an occupying force that long ago outlived its reluctant welcome, can win over a recalcitrant local population and win this counterinsurgency is far-fetched. As responsible infantrymen and noncommissioned officers with the 82nd Airborne Division soon heading back home, we are skeptical of recent press coverage portraying the conflict as increasingly manageable and feel it has neglected the mounting civil, political and social unrest we see every day. (Obviously, these are our personal views and should not be seen as official within our chain of command.)

The claim that we are increasingly in control of the battlefields in Iraq is an assessment arrived at through a flawed, American-centered framework. Yes, we are militarily superior, but our successes are offset by failures elsewhere. What soldiers call the “battle space” remains the same, with changes only at the margins. It is crowded with actors who do not fit neatly into boxes: Sunni extremists, Al Qaeda terrorists, Shiite militiamen, criminals and armed tribes. This situation is made more complex by the questionable loyalties and Janus-faced role of the Iraqi police and Iraqi Army, which have been trained and armed at United States taxpayers’ expense.

A few nights ago, for example, we witnessed the death of one American soldier and the critical wounding of two others when a lethal armor-piercing explosive was detonated between an Iraqi Army checkpoint and a police one. Local Iraqis readily testified to American investigators that Iraqi police and Army officers escorted the triggermen and helped plant the bomb. These civilians highlighted their own predicament: had they informed the Americans of the bomb before the incident, the Iraqi Army, the police or the local Shiite militia would have killed their families.

As many grunts will tell you, this is a near-routine event. Reports that a majority of Iraqi Army commanders are now reliable partners can be considered only misleading rhetoric. The truth is that battalion commanders, even if well meaning, have little to no influence over the thousands of obstinate men under them, in an incoherent chain of command, who are really loyal only to their militias.

Similarly, Sunnis, who have been underrepresented in the new Iraqi armed forces, now find themselves forming militias, sometimes with our tacit support. Sunnis recognize that the best guarantee they may have against Shiite militias and the Shiite-dominated government is to form their own armed bands. We arm them to aid in our fight against Al Qaeda.

However, while creating proxies is essential in winning a counterinsurgency, it requires that the proxies are loyal to the center that we claim to support. Armed Sunni tribes have indeed become effective surrogates, but the enduring question is where their loyalties would lie in our absence. The Iraqi government finds itself working at cross purposes with us on this issue because it is justifiably fearful that Sunni militias will turn on it should the Americans leave.

In short, we operate in a bewildering context of determined enemies and questionable allies, one where the balance of forces on the ground remains entirely unclear. (In the course of writing this article, this fact became all too clear: one of us, Staff Sergeant Murphy, an Army Ranger and reconnaissance team leader, was shot in the head during a “time-sensitive target acquisition mission” on Aug. 12; he is expected to survive and is being flown to a military hospital in the United States.) While we have the will and the resources to fight in this context, we are effectively hamstrung because realities on the ground require measures we will always refuse — namely, the widespread use of lethal and brutal force.

Given the situation, it is important not to assess security from an American-centered perspective. The ability of, say, American observers to safely walk down the streets of formerly violent towns is not a resounding indicator of security. What matters is the experience of the local citizenry and the future of our counterinsurgency. When we take this view, we see that a vast majority of Iraqis feel increasingly insecure and view us as an occupation force that has failed to produce normalcy after four years and is increasingly unlikely to do so as we continue to arm each warring side.

Coupling our military strategy to an insistence that the Iraqis meet political benchmarks for reconciliation is also unhelpful. The morass in the government has fueled impatience and confusion while providing no semblance of security to average Iraqis. Leaders are far from arriving at a lasting political settlement. This should not be surprising, since a lasting political solution will not be possible while the military situation remains in constant flux.

The Iraqi government is run by the main coalition partners of the Shiite-dominated United Iraqi Alliance, with Kurds as minority members. The Shiite clerical establishment formed the alliance to make sure its people did not succumb to the same mistake as in 1920: rebelling against the occupying Western force (then the British) and losing what they believed was their inherent right to rule Iraq as the majority. The qualified and reluctant welcome we received from the Shiites since the invasion has to be seen in that historical context. They saw in us something useful for the moment.

Now that moment is passing, as the Shiites have achieved what they believe is rightfully theirs. Their next task is to figure out how best to consolidate the gains, because reconciliation without consolidation risks losing it all. Washington’s insistence that the Iraqis correct the three gravest mistakes we made — de-Baathification, the dismantling of the Iraqi Army and the creation of a loose federalist system of government — places us at cross purposes with the government we have committed to support.

Political reconciliation in Iraq will occur, but not at our insistence or in ways that meet our benchmarks. It will happen on Iraqi terms when the reality on the battlefield is congruent with that in the political sphere. There will be no magnanimous solutions that please every party the way we expect, and there will be winners and losers. The choice we have left is to decide which side we will take. Trying to please every party in the conflict — as we do now — will only ensure we are hated by all in the long run.

At the same time, the most important front in the counterinsurgency, improving basic social and economic conditions, is the one on which we have failed most miserably. Two million Iraqis are in refugee camps in bordering countries. Close to two million more are internally displaced and now fill many urban slums. Cities lack regular electricity, telephone services and sanitation. “Lucky” Iraqis live in gated communities barricaded with concrete blast walls that provide them with a sense of communal claustrophobia rather than any sense of security we would consider normal.

In a lawless environment where men with guns rule the streets, engaging in the banalities of life has become a death-defying act. Four years into our occupation, we have failed on every promise, while we have substituted Baath Party tyranny with a tyranny of Islamist, militia and criminal violence. When the primary preoccupation of average Iraqis is when and how they are likely to be killed, we can hardly feel smug as we hand out care packages. As an Iraqi man told us a few days ago with deep resignation, “We need security, not free food.”

In the end, we need to recognize that our presence may have released Iraqis from the grip of a tyrant, but that it has also robbed them of their self-respect. They will soon realize that the best way to regain dignity is to call us what we are — an army of occupation — and force our withdrawal.

Until that happens, it would be prudent for us to increasingly let Iraqis take center stage in all matters, to come up with a nuanced policy in which we assist them from the margins but let them resolve their differences as they see fit. This suggestion is not meant to be defeatist, but rather to highlight our pursuit of incompatible policies to absurd ends without recognizing the incongruities.

We need not talk about our morale. As committed soldiers, we will see this mission through.

Vick Accepts Deal, Will Plead Guilty

Michael Vick agreed Monday to plead guilty to federal dogfighting conspiracy charges, a deal that leaves the Atlanta Falcons quarterback facing up to 18 months in prison and puts his NFL career in jeopardy.
Under the plea agreement, prosecutors will recommend Vick be sentenced to between a year and 18 months in prison, according to a government official who spoke to The Associated Press on condition of anonymity because the terms have not yet been made final.
His career is in jeopardy? His career should be over. Electrocuting, drowning and other unspeakable cruelties to these dogs should have him in jail for the next ten years. Since that won't happen he should wind up broke and homeless and living like a stray dog. He is an animal and should be treated like one.

In Brazil Sex Change Operations are Free

Brazil's public health system will begin providing free sex-change operations in compliance with a court order, the Health Ministry said Friday.
Ministry spokesman Edmilson Oliveira da Silva said the government would not appeal Wednesday's ruling by a panel of federal judges giving the government 30 days to offer the procedure or face fines of US$5,000 (€3,700) a day.

"The health minister was prompted by the judges' decision," Silva said. "But we already had a technical group studying the procedure with the idea of including it among the procedures that are covered."

Federal prosecutors from Rio Grande do Sul state had argued that sexual reassignment surgery is covered under a constitutional clause guaranteeing medical care as a basic right.
Does Brazil have the type of care that we can receive here in the United States? I would say not for the free services but if you have the money to pay for medical care then the care is good.
Brazil's public health system offers free care to all Brazilians, including a variety of surgeries and free AIDS medication. But long lines and poorly equipped facilities mean that those who can afford it usually choose to pay for private hospitals and clinics.
I have always beleived the road to quality health care for all resides in an expansion of the Medicare system to include all citizens. It is why I support HR 676 which would provide for single payer health care for all.

Can you imagine the oputcry from the religious right if we were to approve all sexual reassignment surgery? Brazil may be a developing nation but it seems light years ahead in its social positions on issues of sexuality. It is one of the best countries on earth for AIDS policy as shown with its policy of free AIDS medications for its citizens. Is Brazil perfect for health care, of course not but maybe we could learn a lesson or two from them. It is time that Americans understand that our health care system is failing us. We rank 37 in the world in health care delviery and 42 in life expectnacy but first in per capita cost. Those are all alarming but true statistics.

Taliban Fighters Void Second Truce in Pakistan

For the second time in two months, a truce designed to curb militancy in the tribal areas of northwestern Pakistan was declared void this weekend by Taliban fighters.
The apparent collapse of the deal in the restive South Waziristan area followed the scrapping of a similar deal in neighboring North Waziristan in July, and comes as there are escalating tensions in both areas. On Sunday, the Pakistani military reported killing 15 insurgent fighters near the town of Mir Ali in North Waziristan.

Pakistan's president, Gen. Pervez Musharraf, had focused on the peace deals as a way to combat rising extremism in his country without relying on military force. But the cease-fires had come under intense scrutiny from critics who said they amounted to capitulation to the fighters.

The collapse of the South Waziristan deal intensifies pressure on Musharraf, who is struggling to remain in office, to come up with a new strategy.
There is bascially a war within Pakistan between these Islamic fighters and those loyal to Pervez Musharraf. There have been numerous assisination attempts on Musharraf and should one be successful you will be looking at a Pakistani government very hostile to United States interests with nuclear capabilities. That is the worst nightmare of the American government.

The question should be how did we get here? The simple answer is the war in Iraq. Had we not removed most of our military from Afghanistan this precarious position in Pakistan may very well have been avoided.

Kicking Them When They Are Down

Did you know that you need to pay tax on a foreclosed mortgage? Neither did I.
Two years ago, William Stout lost his home in Allentown, Pa., to foreclosure when he could no longer make the payments on his $106,000 mortgage. Wells Fargo offered the two-bedroom house for sale on the courthouse steps. No bidders came forward. So Wells Fargo bought it for $1, county records show.

Despite the setback, Mr. Stout was relieved that his debt was wiped clean and he could make a new start. He married and moved in with his wife, Denise.

But on July 9, they received a bill from the Internal Revenue Service for $34,603 in back taxes. The letter explained that the debt canceled by Wells Fargo upon foreclosure was subject to income taxes, as well as penalties and late fees. The couple had a month to challenge the charges.
This revelation stunned me. This is the last indignity to people who are being forced from their homes. The one thing to remember is that all of these homeowners will not qualify for a new mortgage for many years, a tax judgement will only make that situation worse.

I posted this story to highlight the plight of the middle class. Most of the people caught up in this subprime debacle are low and middle class who were trying to achieve the American dream. This dream has turned into a nightmare that threatens to involve us all.

One Family's Journey Into a Subprime Trap

From the Wall Street Journal Online:

Nearly two years ago, Mario and Leticia Montes found a home they loved, a gray stucco bungalow with a hot tub in the backyard in a middle-class neighborhood of Orange County.

The price was a major stretch at $567,000. But the couple, who had sold a home a few years earlier to move to a better area, was tired of renting. Mr. and Mrs. Montes convened a meeting with their two teenage daughters around the kitchen table to hash out the implications. "We agreed we wanted to be homeowners again," says Mr. Montes, "even if it meant the end of vacations and not eating out as often."

Like many people who jumped into the rising housing market in recent years, they had little money for a down payment and chose a loan that would hold their monthly payments down for the first two years, then "reset" to a much higher level. Mr. and Mrs. Montes say their mortgage broker assured them they would be able to refinance in a couple of years to keep their payments affordable.

With a December "reset" on their loan looming, however, the refinancing option now looks impossible. A friend who works as a loan officer called with some bad news this week: Similar homes in their area have been selling for $535,000 to $565,000 recently. That means the Monteses' loan balance may exceed the value of their home.

The Monteses are caught in a trap -- one that hundreds of thousands of people could face as the housing market totters and the easy credit of recent years dries up. They in effect bet that the boom in housing prices would continue. It was more important to hop onto the escalator than to wait until they could afford to make the leap according to traditional measures.

With mortgage banks and brokers threatened with extinction, lenders that embraced all kinds of risky loans two years ago are enforcing increasingly strict standards. They are refusing even to consider extending new credit to people like the Monteses who lack any equity in their homes. "We have a disaster on our hands," says Mr. Montes, a 48-year-old warehouse manager. He fears he won't be able to handle the payments after the December reset and wonders whether the family can avert foreclosure. "At this point," he says, "we really don't have a plan."

Until recently, the Montes family didn't seem like the type that would find itself faced with foreclosure. They live in a solid neighborhood and are both employed and in good health. "My wife and I make pretty good money," says Mr. Montes. Mrs. Montes works as a school secretary. Together, they earned nearly $90,000 last year.

But they already pay about $38,400 a year on their home loans, even before taxes and insurance. In December, when their primary loan "resets" to a higher rate, that cost will rise to about $50,000 a year, Mr. Montes says.

Lenders have been tightening their standards for the past year in the face of rising defaults and growing jitters among the investors who provide funding for loans. That tightening has accelerated in the past two weeks as many lenders -- uncertain at what price they might be able to sell loans -- have stopped making all but the safest ones.

"It's getting worse and worse," says Jeff Lazerson, chief executive of Mortgage Grader, a mortgage broker in Laguna Niguel, who tried to help the Montes family last spring but concluded even then that they couldn't qualify for a new loan. Many people who have been counting on a refinancing to ease their debt burdens will find that's now impossible, he says: "It's either work 24 hours a day to make ends meet [with the existing loan] or mail the keys back to the bank."

Being stuck with little or no home equity is no longer a rare situation. Christopher Cagan, director of research at First American CoreLogic, a housing and mortgage data supplier in Santa Ana, recently found that nearly 7% of 32 million U.S. households studied as of December owed more than their homes were worth, based on computer estimates of the property values. An additional 4% had home equity of 5% or less. Since then, house prices have edged down in much of the country, erasing more home equity. Without a cushion of equity, homeowners are vulnerable to losing their homes to foreclosure if they suddenly are out of work, suffer a serious illness or, like the Montes family, face a jump in mortgage payments.

Partly as a result, foreclosures are surging. Moody's, a research firm in West Chester, Pa., projects that lenders will acquire about 760,000 homes through foreclosure this year and 935,000 in 2008, up from an average of about 440,000 a year from 2000 through 2006.

When the Monteses decided to buy the bungalow in 2005, they had only a so-so credit record and little savings. So they settled for a "subprime" loan, with costlier terms than those available in the prime market.

The Monteses' primary loan is the type that became the dominant subprime mortgage during the housing boom of the first half of this decade -- and now has become a symbol of misguided lending, swept away by regulatory fiat and investors' flight from mortgages deemed too risky. These loans are known in the trade as 2/28 mortgages. The interest rate is fixed at a relatively low rate for the first two years (5.45% in the Monteses' case), then floats at a predetermined margin above an interest-rate index for the next 28 years. In many cases, that "reset" of the interest rate after two years leads to a monthly payment increase of 30% or more.

U.S. lenders originated about $600 billion of subprime home loans in 2006, or 20% of all home mortgages, according to Inside Mortgage Finance, a trade publication. About 56% of those subprime loans were 2/28 mortgages, says Keith Ernst, senior policy counsel at the Center for Responsible Lending, a nonprofit research and lobbying group in Durham, N.C. Mario and Leticia Montes and daughter, Christina, in front of their house in Fullerton, Calif.

The lending industry touted the 2/28 loans as "affordability" mortgages, because they helped people buy houses that wouldn't have been affordable with the higher immediate payments on 30-year fixed-rate mortgages. To make the loans even more affordable in the early years, they were often structured as "interest-only," meaning that principal payments were deferred until later.

Lenders sometimes described these loans as "credit-repair tools." The idea was that people with blemished credit records could take out a 2/28 subprime loan and keep up with the payments long enough to improve their credit records and qualify for a less-costly prime loan.

Earlier this year, regulators ordered subprime lenders to make such loans based on the borrower's ability to afford the loan after the reset, not just for the initial two years, as was the common practice. That change, along with tighter guidelines from rating agencies and risk-aversion among investors, has recently prompted major subprime lenders to stop making 2/28 loans. Instead, they are making more subprime loans that carry a fixed rate for at least five years, as well as ones that hold down payments by stretching the payments over 40 years instead of 30.

The Montes family got their loan through a mortgage broker in Rancho Cucamonga. Using what was then a common formula, the broker offered to arrange for two loans, one to cover about 80% of the home price and the other, a so-called piggyback loan, for the rest. For the first two years, their total monthly mortgage payments are about $3,200. The loans are initially interest-only.

Mr. Montes recalls feeling edgy about whether he would be able to afford the higher costs -- about $900 more per month -- due to take effect after two years. But he says the broker assured him he could refinance before those costs kicked in.

Mr. Montes preferred not to name the broker publicly because the broker has a business connection with a relative of the Monteses. The broker declined to comment.

Mrs. Montes says she was apprehensive about the broker's assurances. "But I blame that on that I don't understand the lingo they were talking," she says. "It's a scary experience.... All I could see was all these numbers flash before me.... I said, 'Mario, I hope you don't get into something that is going to hurt us.'"

They moved into their home and hung a sign on the front door reading, "Life is a daily celebration of love." Within months, things started going wrong. The Monteses received a letter informing them their property taxes had been reassessed based on the $567,000 sale price instead of its previous $389,000 value. That raised their taxes to $6,000 from $2,900 a year and would have increased their monthly payments (including the mortgages and taxes) to $3,931. "Whoa!" Mr. Montes recalls saying. "I can't afford this. I went into emergency mode."

He was able to successfully challenge part of the tax increase, but another shock came in late February of this year when he began looking at refinancing possibilities. Mr. Montes says four brokers -- including the one who arranged the original loan -- turned him away, saying it wouldn't be possible to refinance because, with home prices flat at best, the family had little or no equity in the home. Worse for the Monteses, they learned that they faced a $12,000 prepayment penalty if they refinanced within three years of the original mortgages -- something that Mr. Montes says wasn't made clear to him when he took out those loans.

Then another broker told him in March that his home had gained enough in value for him to qualify for a more affordable loan. They paid for an appraisal and were told their home was worth $620,000, or about $53,000 more than they paid in 2005. The Monteses were jubilant, thinking their home was saved. But more than three months later, the broker outlined a package that would have involved payments far higher than indicated in earlier meetings.

Next, Mr. Montes sought the help of Laurie Arnold, a former neighbor who is a loan officer at IndyMac Bancorp, a large lender based in Pasadena. In another blow, Mr. Montes learned that the appraisal he had done in March -- at a cost of $375 -- is no longer valid. Ms. Arnold sounded out appraisers and concluded that there was no hope the house could appraise for enough to allow the family to qualify for a refinancing. Based on recent sale prices and other data,, an online service that provides home-value information, estimates that the price of a typical home in Fullerton is down 6.7% from a year ago.

The Monteses now hope for help from the company that services their loan, America's Servicing Co., a unit of Wells Fargo & Co. Mr. Montes telephoned America's Servicing Tuesday to ask whether it might consider a modification in the terms of the loans to help him keep the payments affordable beyond the reset date. An employee of the servicing company said that wouldn't be possible if the family has no home equity, Mr. Montes says.

A Wells spokesman declined to comment on the Monteses' loan but said the bank reviews requests for loan modifications "on a case-by-case basis and works with customers on solutions that address their individual financial needs."

Mr. Montes says the family may try to sell the house, but that would be tricky in today's weak market. Or they could try to trim other expenses and keep meeting the higher monthly home payments that are due to take effect in December.

There is very little wiggle room. Mr. and Mrs. Montes also have two car loans, with payments totaling about $700 a month, and are borrowing more money to help put their elder daughter through college. They recently had to tell their younger daughter they couldn't afford $70 a month for her to take piano lessons.

The couple now eat out once or twice a month, instead of once or twice a week before they bought the house. They have yet to visit a nearby jazz club they had hoped to frequent. The trips they used to take to Lake Tahoe now are out of the question.

To bring in a bit more income, Mr. Montes two weeks ago found a weekend job as a bartender for a catering company. He says he might be able to take on a third job.

"Bottom line, it's our little home," Mrs. Montes told a visitor one evening in April as tears welled in her eyes. "We're going to keep it. Hopefully, we won't go down and if we do, we're going to go down with a fight."

Sunday, August 19, 2007

In Mortgage Meltdown, Missed Signs

How can we trust the "Financial Experts" if they could not see this coming although some did and made a bundle
All through last year, Jim Melcher saw the signs of a rapidly deteriorating American housing market — riskier mortgages, rising delinquencies and more homes falling into foreclosure. And with $100 million in assets at his hedge fund, Balestra Capital, he was in a position to do something about it.

So in October, as mortgage-backed bonds were still flying high, he bet $10 million that these bonds would plunge in value, using complex derivatives available to any institutional investor. As his gamble began to pay off in the first months of 2007, Mr. Melcher, a money manager based in New York, plowed the profits into ever bigger wagers that the mortgage crisis would worsen further, eventually risking some $60 million of the fund’s money.

“We saw the opportunity of a lifetime, and since then events have unfolded on schedule,” he said. Mr. Melcher’s flagship fund has since doubled in value, even as this summer’s market turmoil cost other investors billions, forced the closing of several major hedge funds and pushed the stock market down 7 percent since mid-July. This week, Mr. Melcher is heading to Paris for a vacation with his wife.
As I have been saying for some time, the financial
markets have become like Las Vegas. The problem I have is how could they have not seen this coming? I am certainly not a financial expert but I would put my knowledge of the markets above a majority of Americans simply because of my employment in the financial service field for the past 15 years.

How could you think that a housing market could sustain ever increasing price growth without a similar growth in wages? How could you think that a population with a negative savings rate and ever increasing debt could keep up this dizzying upward spiral in home prices. I knew logically it could not be sustained as I believe so did most experts but they remained silent. Why would they remain silent? The real question is did they remain silent or were they told to shut up?

I am the President of my cooperative board where I live and it was my decision as to where to place the cooperatives reserve funds. I was offered the opportunity by our broker to invest in mortgage backed securities. I was told they were "A" rated and did not pose a risk to capital. I did not believe that to be the case knowing what I knew about the state of the current mortgage industry. I chose instead CD's at lower returns but with no risk to principal. My last call to the broker revealed that the bonds I was pitched were actually down although I was not told to what extent. If I could make the right decision, why couldn't the experts? Was it just dumb luck?

It seems ethics and logic go out the window when a quick buck can be made. The problem is that we will all suffer now as a result of this greed. Read the rest of the linked story. It is eye opening in many ways.

"Heck Of A Job" Brownie Using Government Contacts To Get Consulting Gigs

Only with the Bush administration could total incompetence lead to financial gain after you leave the administration.
Nearly two years after Hurricane Katrina overwhelmed New Orleans, Michael Brown, who bore the brunt of the criticism for the federal response to the storm, has moved into a career promoting disaster-response and data-mining technology for government agencies and private customers.

Brown, who served as director of the Federal Emergency Management Agency when Katrina blasted New Orleans and the Gulf Coast on Aug. 29, 2005, has not returned to New Orleans in nearly two years. His last stop was on Sept. 11, 2005, the day before he resigned under pressure.

The next time he sees New Orleans, Brown ruefully suggests, it may be in response to lawsuits resulting from Katrina, which left more than 1,000 dead and tens of thousands homeless.
This article calls him a salesman. He is clearly working as a lobbyist for these firms in assisting them in getting government contracts. he even plans to register as a lobbyist. The moral of this story is that even if you are a total incompetent, if you have the right connections door open for you.

This story is a true representation of how our current government works. If you think this current system is good then do nothing. If you feel it needs to be changed then become involved. We the people can change it.