China rejects US products

September 23, 2009

Our media has not fully addressed the initial story, inconvenient details nor the repercussions of our Presidents’ decision to impose special protectionist tariffs on tire imports from China less than two weeks ago.

China immediately responded to the September 11 decision by President Obama citing the U.S. violated World Trade Organization (WTO) and other related rules. Trade protection, which is strongly discouraged — especially during times of economic struggle — is an issue Obama had strongly spoke out against.

China and the United States are both the second-largest trading partners to each other.

China said this move would only slow world economic recovery and ultimately hurt the interests of the businesses and people of all countries.

Two days later China launched anti-dumping and anti-subsidies investigations into some automobile and chicken products originally produced in the United States.

This week China announced prominent PepsiCo and Mead Johnson among the companies blacklisted from a monthly report by a State Council watchdog in charge of product quality. The watchdog names unqualified imported goods which are either returned or destroyed. Does this have anything to do with the tire tariff? Who knows.

According to the list, a quarter of the substandard products came from the US.

PepsiCo: nearly 38 tons of frozen concentrated orange juice that the firm allegedly imported from Louis Dreyfus Citrus Trading LDA in Brazil in July were found with excessive yeast, according to the website of the General Administration of Quality Supervision, Inspection and Quarantine. Excessive yeast causes foods to spoil faster.

PepsiCo — which has it’s international branch based in New York — produces a vast array of products including Pepsi, Gatorade, Tropicana, Quaker, Doritos, Lipton, Propel, Ethos Water and Aunt Jemima.

Mead Johnson: allegedly imported 300 kg of baby formula in July with substandard protein content.

Mead Johnson — based in Illinois — is a global leader in infant and children’s nutrition. It’s a baby formula leader in China, the Philippines, Thailand, Malaysia and Mexico, five of the six largest children’s nutrition markets.


Compare unemployment figures worldwide

September 1, 2009

I thought it would be interesting to compare unemployment against other countries. If you would like to see figures of a country not listed leave your request in the comments section.

world employment


Government revise unemployment criteria, etc. OR are the books being cooked?

August 7, 2009

The “change” in the way government statistics are kept is a troubling phenomenon — for me — that is currently occurring.

Actually, I stumbled over the “change” disclaimer while doing research for a future post.

I read:

On July 31, 2009, the Bureau of Economic Analysis (BEA) released the results of the comprehensive, or benchmark, revision of the national income and product accounts (NIPAs).  The comprehensive revision incorporated the results of the 2002 benchmark input-output (I-O) accounts as well as changes in definitions, classifications, statistical methods, source data, and presentation.

As a huge fan of Mark Twain, I couldn’t help but reflect the quote in his own Autobiography: The Chapters from the North American Review

“There are three kinds of lies: lies, damned lies and statistics.”

The government website went on to say that most of the tables in this release present revised statistics beginning with 1998.

With the revision, real GDP increased 0.4 percent for 2008; in the previously published estimates, real GDP had increased 1.1 percent.

One by one the BEA announced which sectors it would revise. There it was … Quarterly Census of Employment and Wages (QCEW) for 2006-2008 have been revised.

Would that mean the employment numbers I’m reading in the news today have changes in definitions, classifications, statistical methods, source data, and presentation?

Here are the “revised” employment numbers for the second quarter according to the Bureau of Labor Statistics:

Nonfarm payroll employment continued to decline in July (-247,000).

The unemployment rate was little changed at 9.4 percent.

The U-6 unemployment rate is listed at 16.3 percent. U-6 includes total unemployed  who are discouraged and have stopped looking for work and other criteria.

The average monthly job loss for May through July (-331,000) was about half the average decline for November through April (-645,000).

There were 14.5 million unemployed persons in July.

The number of long-term unemployed continued to rise.  In July, 5.0 million people had been unemployed for more than 6 months, accounting for 1 in 3 unemployed persons.

Among the employed, there were 8.8 million persons working part time in July who would have preferred full-time work.

The unemployment numbers by month:

2006

4.7

4.8

4.7

4.7

4.7

4.6

4.7

4.7

4.5

4.4

4.5

4.4

 

2007

4.6

4.5

4.4

4.5

4.5

4.6

4.7

4.7

4.7

4.8

4.7

4.9

 

2008

4.9

4.8

5.1

5.0

5.5

5.6

5.8

6.2

6.2

6.6

6.8

7.2

 

2009

7.6

8.1

8.5

8.9

9.4

9.5

9.4

           
 

Current Unemployment Rates for States and Historical Highs/Lows
Seasonally Adjusted

 

June 2009p

Historical High

Historical Low

State

Rate

Date

Rate

Date

Rate

Alabama

10.1

Dec. 1982

14.4

Feb. 2007

3.3

Alaska

8.4

July 1986

11.5

Sept. 1999

5.9

Arizona

8.7

Feb. 1983

11.5

June 2007

3.6

Arkansas

7.2

Mar. 1983

10.2

Sept. 2000

4.1

California

11.6

June 2009

11.6

Feb. 2001

4.7

Colorado

7.6

Nov. 1982

9.1

Jan. 2001

2.5

Connecticut

8.0

Jan. 1976

10.0

Nov. 2000

2.1

Delaware

8.4

June 2009

8.4

Oct. 1988

2.9

District of Columbia

10.9

Mar. 1983

11.4

Dec. 1988

4.8

Florida

10.6

June 2009

10.6

July 2006

3.3

Georgia

10.1

June 2009

10.1

Dec. 2000

3.4

Hawaii

7.4

Mar. 1976

10.2

Dec. 2006

2.2

Idaho

8.4

Feb. 1983

9.4

May 2007

2.8

Illinois

10.3

Feb. 1983

12.9

Mar. 1999

4.1

Indiana

10.7

Nov. 1982

12.8

Apr. 1999

2.6

Iowa

6.2

May 1983

8.5

Jan. 2000

2.6

Kansas

7.0

Sept. 1982

7.4

Oct. 1978

2.9

Kentucky

10.9

Dec. 1982

12.1

Mar. 2000

4.0

Louisiana

6.8

Sept. 1986

12.9

July 2006

3.2

Maine

8.5

Mar. 1977

9.0

Jan. 2001

3.0

Maryland

7.3

Aug. 1982

8.3

Mar. 2000

3.3

Massachusetts

8.6

Jan. 1976

10.9

Dec. 2000

2.7

Michigan

15.2

Nov. 1982

16.9

Mar. 2000

3.2

Minnesota

8.4

Nov. 1982

9.0

Apr. 1999

2.5

Mississippi

9.0

May 1983

13.7

Jan. 2001

4.9

Missouri

9.3

Apr. 1983

10.5

Jan. 2000

2.6

Montana

6.4

May 1983

8.7

Mar. 2007

3.2

Nebraska

5.0

Feb. 1983

6.8

Feb. 1998

2.2

Nevada

12.0

June 2009

12.0

Mar. 2006

4.2

New Hampshire

6.8

June 1992

7.7

Apr. 1987

1.9

New Jersey

9.2

Feb. 1977

10.6

June 2000

3.5

New Mexico

6.8

Apr. 1983

9.9

Oct. 2007

3.5

New York

8.7

July 1976

10.5

Apr. 1988

4.0

North Carolina

11.0

May 2009

11.1

Apr. 1999

3.1

North Dakota

4.2

Mar. 1983

6.9

Jan. 1998

2.5

Ohio

11.1

Jan. 1983

13.8

Mar. 2001

3.9

Oklahoma

6.3

Aug. 1986

9.4

Jan. 2001

2.7

Oregon

12.2

June 2009

12.2

Apr. 1995

4.7

Pennsylvania

8.3

Mar. 1983

12.9

Mar. 2000

4.0

Rhode Island

12.4

June 2009

12.4

July 1988

2.9

South Carolina

12.1

June 2009

12.1

Mar. 1998

3.1

South Dakota

5.1

Oct. 1982

5.9

Mar. 2000

2.4

Tennessee

10.8

Dec. 1982

12.4

Mar. 2000

3.8

Texas

7.5

Oct. 1986

9.3

July 2007

4.3

Utah

5.7

Mar. 1983

9.7

Mar. 2007

2.4

Vermont

7.1

June 1976

9.0

Mar. 2000

2.2

Virginia

7.2

Jan. 1983

7.8

Jan. 2001

2.2

Washington

9.3

Nov. 1982

12.2

Apr. 2007

4.4

West Virginia

9.2

Mar. 1983

18.2

Jan. 2008

4.1

Wisconsin

9.0

Jan. 1983

11.8

Apr. 1999

2.9

Wyoming

5.9

May 1983

10.1

Feb. 1979

1.9

Note: Data series begin in January 1976.

p = preliminary. 


Immigratation: testing more than just Americans

May 26, 2009

This BBC Panorama video is about 30 minutes long and documents the immigration problems within England. Could we be in the beginning stages of the same issues?

Representative Jesse Jackson, Jr., (D-IL) has proposed an Amendment to the US Constitution for all persons – irrespective of citizenship – to have a RIGHT to decent, safe, sanitary, and affordable housing. The right shall not be denied or be abridged by the United States or any State.

HJ 32 IH

See the daily obscure news here


First person to “die with dignity” under new Wash. state law

May 25, 2009

Linda Fleming has become the first person to die under the new Washington state law allowing “death with dignity.” Fleming, 66, was diagnosed with late stage pancreatic cancer last month. She made the decision to die with dignity. With the help of her physicians and Compassion and Choices of Washington, she considered her choices and made her own end of life decisions.

“I had only recently learned how to live in the world as I had always wanted to, and now I will no longer be here. So my fatal disease arrived at a most inopportune time,”  said Linda. Read more about her circumstances here.

Thursday evening, Linda, with her family, dog and physician at her bedside took  the prescribed medication to end her life with dignity.

Linda died peacefully knowing that she had a choice in controlling her suffering and time of death from terminal cancer.

The death with dignity movement is not to be confused with assisted suicide. Death with dignity adds another option for patients who are dying from a terminal illness. Oftentimes, the two terms are wrongly interchanged by the public, media and legal authorities.

Jack Kevorkian, nicknamed “Dr Death”, brought the issue of death with dignity out into the open.  He was charged with second degree murder in 1999 after he gave a lethal injection to a man suffering from Lou Gehrig’s disease. Mr. Kevorkian challenged the courts and was sentenced to prison.

Death with dignity continues to be a polarizing subject to many. Openly discussed and legally practiced in Oregon and Washington while perhaps being pushed underground in the rest of the country.

In recent news, last Feb. 25, Georgia Bureau of Investigation charged two Final Exit guides with racketeering, tampering with evidence and violation of “assisted suicide laws” and froze the groups’ assets after an agent, posing as a terminally ill cancer patient persuaded network members to be taken through the steps that would lead to his death.

Currently, in Arizona, charges of manslaughter and conspiracy to commit manslaughter have been issued to four people who were part of a right to die organization called Final Exit Network. The Final Exit Network  is being investigated by the FBI and police agencies in eight states where death with dignity is outlawed.


Supreme court rules on identity theft

May 4, 2009

May 4, 2009

A major Supreme Court ruling regarding identify theft came down today in the case of FLORES-FIGUEROA V. UNITED STATES.

A federal statute forbidding “[a]ggrivated identity theft” imposes a mandatory consecutive 2-year prison term on an individual convicted of certain predicate crimes if, during (or in relation to) the commission of those other crimes, the offender “knowingly … uses, without lawful authority a means of identification of another person.”

The petitioner, Flores-Figueroa, a Mexican citizen, gave his employer counterfeit Social Security and alien registration cards containing his name but other people’s identification numbers, he was arrested and charged with two immigration offenses and aggravated identity theft.

According to the ruling, the court has to prove a person knowingly used someone’s identification as opposed to making up a number and causing identity theft by chance.

See the question presented and court opinion of the US Supreme Court.


The death of polo horses — why it’s important to mind that decimal point

April 28, 2009

The recent death of the polo horses in Florida brings a grim reminder to mind your math. The decimal point was inadvertently moved when producing a drug for the horses.

A pharmacy compounding lab has admitted that the strength of an ingredient in medication given the animals was incorrect.

The lab produced a substitute for a drug called Biodyl at the direction of a veterinarian. Biodyl, which is illegal in the United States is not approved by the Food and Drug Administration.

The suspect vitamin and mineral mix contains selenium (as sodium selenite, a selenium-based salt), compounds of potassium, magnesium and ATP (adenosine triphosphoric acid).

It is alleged that the medication given to the horses contained 10 times the amount of selenium requested. The 0.5 mg/ml was prescribed but the mixture contained 5 mg/ml.


Is YOUR drivers license photo in the biometric facial recognition database?

April 19, 2009

In Arizona, former Gov. Janet Napolitano,  defended facial recognition in late 2006 when it was linked with a photo database and software at the nation’s first homeland-defense hub based in Phoenix.  The hub combines federal, state and municipal intelligence officers. More than 8 million photographs in a database of mug shots, drivers’ license photos and state identification cards is compiled and linked to special software.  Surveillance camera images can be used against the database to isolate any persons of interest.

The Delaware Department of Motor Vehicles is the most recent state to implement facial recognition for drivers’ licenses and identification cards.


Facial recognition biometrics is used within a database of pictures to help stop driver’s license fraud. It helps prevent identity theft and duplicate identifications in other names. If you recall, British immigration who use the latest in prints and biometrics denied President Obama’s brother Samson a visa when it was discovered he was using falsified documents to enter their country earlier this year.

Special features are added to prevent counterfeiting. When applying for a new license, the recipient will have a Department of Motor Vehicle employee with him through the entire process to comply with federal requirements.

Boarding an airplane or entering a federal building will not be possible with the old style license or ID card should Delaware residents opt to not update their credentials.

Drivers’ licenses could begin being issued using the new process by November 1, 2009

The recently signed American Recovery and Reinvestment Act (ARRA) of 2009 provides $10.4 billion to the National Institute of Health (NIH) to accelerate the pace of biomedical research. See how much funding your state has received in 2008 here.

The NIH website states: “The NIH it tracks its funding of critical medical research and other support at universities, hospitals, small businesses and other organizations, and annually compiles this information and makes it available to the public. Up to now, this funding information was available in the form of tables that showed comparative rankings in terms of dollars received.

The NIH no longer will provide these comparative ranking tables on its medical research funding. Instead, NIH has developed a Web-based tool that allows you to determine the dollars awarded to any one organization or department. The tool will also allow you to download aggregate data, on a per fiscal year basis, so that you can conduct your own analysis.

This change comes in part from responses received from the grantee community that suggested that the current ranking tables were not necessary.”


2,035 country tea parties set for today

April 15, 2009

Nationwide tea parties are set for today by concerned citizens gathering together to voice their dissent over tax spending policies.

Todays peaceful tea party gatherings have no party lines and many citizens attending have not publicly voiced their views before.

From Alaska to Wyoming, the common bond is to voice the displeasure of government spending of our tax dollars.

Unfortunately, it’s said that ACORN operatives will be infiltrating the peaceful rallies to gather names, addresses and perhaps turn the peaceful rallies into something not intended by the organizers.

To attend your local tea party today view details and lists here at www.teapartyday.com


Buying a home? Test your home for radon — the number one cause of lung cancer among non-smokers

April 6, 2009

A radon test by homeowners and potential buyers to check indoor air quality shouldn’t be overlooked. Radon is the second leading cause of lung cancer in the United States. It is the number one cause of lung cancer among non-smokers, according to the United States Environmental Protection Agency (EPA) estimates.

Radon, which causes no immediate health symptoms, is a radioactive gas. Unable to see, smell or taste this elemental soil gas, it is formed by the natural breakdown of uranium in the earth, it is found in varying concentrations all over the world.

While smoking is the leading cause of lung cancer with an estimated 160,000 cancer deaths in the U.S. every year, radon is the second leading cause of lung cancer.  It’s responsible for about 21,000 lung cancer deaths every year compared to 3,000 deaths caused by secondhand smoke.

In 2005, a national health advisory was issued by the Surgeon General warning the American public about the risks of breathing indoor radon.  Americans were urged to prevent this silent radioactive gas from seeping into their homes and building up to dangerous levels.

Included in the 2005 news release the EPA estimated that one in every 15 homes nationwide had a high radon level at or above the recommended radon action level.

It is recommended you test your home for radon every two years, and retest any time you move, make structural changes to your home, or occupy a previously unused level of a house.

The EPA has a map listing radon zones but cautions that homes have been found with radon in all three zones and recommends using it in conjunction with available local data. Although the map is a general guide it should not be used to determine if a home in a given zone should be tested for radon.

The EPA has a list of frequently asked questions about radon to view here.

A number of tools and resources for use by the real estate community can be viewed here.


See salaries of your elected officials in DC

April 4, 2009

Have you ever wondered what your elected officials earn while working as your public servant in Washington, DC?

Because it’s in vogue now to scrutinizing the salaries of others, it might be fun to scrutinize our public employee salaries and expenditures.

We each pay – through our tax dollars — for our elected officials to represent us. Each individual public servant is sent to the nations’ capital to represent the best interests of the people he/she serves.

The term public servant in itself alludes to tirelessly serving others.

President $400,000

Vice President $227,300

Speaker of the House $223,500

House Majority and Minority Leaders $193,400

House Members and Delegates $174,000

Senate Members & Delegates $174,000

Chief Justice, Supreme Court $217,400

Associate Justices, Supreme Court $208,100

The cost of running each office runs into the millions. For instance, when President Obama was a Senator, the total salary expenditures for fiscal 2008 were nearly $3 million just for his office alone!

The cost of sending your public servant to Washington becomes even greater when you add in the benefit and retirement packages.

See what your public servant costs you here.


Illegal immigration enforcement funds held back while Hispanic groups urge quick passage of reform pledge

April 3, 2009

Arizona, being a border state, has it’s own problems with illegal immigration. Enter Sheriff Joe Arpaio.

Some may know the Arizona Law Enforcement Official as “America’s Toughest Sheriff” as he was dubbed by the media years ago.  As an elected official, he continues to receive the popular vote by residents to enforce the laws in the fourth largest Sheriff’s office in the nation.

To date, the statistics stated from the Sheriff’s office indicate:

State law arrests by Sheriff’s deputies of persons transporting or being transported illegally into Arizona is 1,285

Federal law arrests by Sheriff’s deputies who, in the course of their duties, determine the arrestee is in Arizona illegally is 1,621

Immigration and Customs Enforcement (ICE) “holds” by the Sheriff’s detention officers have turned over 23,261 illegal immigrants to Immigration authorities for deportation

In Phoenix, AZ earlier this week the Maricopa County Board of Supervisors voted to postpone the acceptance of $1.6 million from the state to help pay for illegal immigration enforcement by the nationally infamous Sheriff Joe Arpaio. The Sheriff has been under fire for his immigration enforcement.

In an AP report “…Hispanic groups on Wednesday urged the Obama administration to follow through now on its pledge to pass immigration reform or risk an undercount of millions of people.”

The New York Times said President Obama has promised immigration enforcement that would focus less on illegal workers and more on the employers who rely on them.

During economic hard times the United States has historically tightened the enforcement of illegal immigrant deportation.

President Herbert Hoover ordered the deportation of ALL illegal aliens in order to make jobs available to American citizens during The Great Depression.

After WWII Harry Truman deported illegal immigrants in order to create jobs for returning veterans.

President Eisenhower deported Mexican nationals in 1954 through “Operation Wetback” to allow for a better opportunity for returning American WWII and Korean veterans to gain employment.

According to US Citizenship and Immigration Services Fact Sheet: Through the Consolidated Security, Disaster Assistance and Continuing Appropriations Act of 2009 (Public Law 110-329), Congress created the Fiscal Year 2009 Citizenship Grant Program.  This competitive grant program provides approximately $1.2 million of federal funding-in the form of 12 $100,000 individual awards-to support citizenship preparation programs for legal permanent residents (LPRs).

We may be in the midst of a change in American history.


Amidst loss in billions, Congress expresses need to prevent Post Office closures / consolidations

April 1, 2009

A House Concurrent Resolution was submitted by Republican Congresswoman Jo Anne Emerson of Missouri expressing the sense of Congress regarding the need to prevent the closure or consolidation of post offices.

While the Postal Service continues to struggle to bring itself back into the fiscal black, Congress has it’s own ideas.

This is a multi-part series to gaze into the Congressional records in this current 111th Congress, that if brought to practice may effect the troubled Postal Service.

In the first of this series, Postmaster General Potter appeared on Capital Hill to ask Congress for help after yet another year of losses in the billions. Potter had been publicized recently for his lavish compensation package valued over $800,000. The article is titled, Move over AIG. Make room for the Postal Service.

Part two, is titled Congress, Cuba and the Postal Service.

On March 25, 2009, Postmaster General Potter stood before the Subcommittee on Federal Workforce, Postal Service, and the District of Columbia of the Committee on Oversight and Government, United States House of Representatives. He spoke of the mail volume running 12 percent below 2008 levels and the Postal Service facing losses of historic proportions because of the widening gap between revenue and costs.

[Digg]

H Con Res 4 expressed that the United States Postal Service should provide a maximum degree of effective and regular postal services to all communities … where post offices may not be self sustaining and should take all necessary steps to ensure that post offices are not closed or consolidated.

In the days to come, more legislation, which, if enacted, could affect the profitability of the Postal Service will be covered.


FDA Failed Again — But No One’s Talking

March 7, 2009

Remember that scene in the movie Slum Dog Millionaire when the empty water bottles were refilled with tap water then sealed with super glue? That was just a movie.

Here in the United States a more sinister act has been perpetrated by a North Carolina pre-filled syringe factory.

On Feb. 23, 2009, two employees of a pre-filled syringe manufacture, AM2PAT, Inc,  plead guilty and were sentenced to 54 months imprisonment for misbranding syringes for distribution. The employees are Ravindra Kumar Sharma, age 54, of Richmond, Virginia and Aniruddha Petel, age 43, of Carpentersville, Illinois.

Criminal complaints included mail fraud, submitting false statements to a US government entity, and knowingly sending misbranded medical devices into interstate commerce with the intent to defraud.

Syringes were misbranded as “sterile,” when, in fact, the requisite sterility testing on these products had not been completed prior to their shipment into interstate commerce.

Paperwork had been falsified or fabricated to indicate compliance.

The company, AM2PAT, Inc. is responsible for 200 to 300 medical patients throughout the country who developed bacterial infections after having been injected by the syringes. Serious illness such as spinal meningitis, permanent brain damage and even death have resulted in some cases.

AM2PAT, which also sold products under the name Sierra Pre-Filled, produced syringes of heparin and saline, which are often used on already vulnerable patients during cancer treatments, kidney dialysis and other procedures. Read more here

A Federal Grand Jury returned a ten-count Indictment against both AM2PAT, Inc., and its former President, Dushyant Pate on February 19, 2009. Charges include making materially false statements to the Food and Drug Administration in the company’s 2003 Notification to the Food and Drug Administration of its intent to market syringes pre-filled with heparin.

A statement made on Feb. 25 indicated authorities searching for the Chicago-based company’s CEO Dushyant Patel, who had been indicted the week earlier. They believe he fled to his native India.

Read the entire US Attorneys’ Office Press Release here

Other articles of interest:
Mark to Market Accounting in the Banking System
http://willnevergiveup.wordpress.com/2009/03/06/fdic/

A fable unfolded: ACORN and a foreclosure “victim”
http://willnevergiveup.wordpress.com/2009/02/23/acorn/

Foreclosures and illegals
http://willnevergiveup.wordpress.com/2009/02/21/foreclosures-illegals/

Illegal Aliens, the US Stimulus Package and the Age of Transparency Unveilled
http://willnevergiveup.wordpress.com/2009/02/05/hr-1/

Mortgage Rescue Bill and YOUR Tax Dollars
http://willnevergiveup.wordpress.com/2008/09/05/mortgage-rescue-bill-and-your-tax-dollars/

Citizenship of Birth Entitlement to End
http://willnevergiveup.wordpress.com/2009/01/30/hj-res-6/

Tax Loophole Proposed
http://willnevergiveup.wordpress.com/2009/01/26/s-261s-261/

Information gathering on US citizens
http://willnevergiveup.wordpress.com/2009/01/23/hr-640/

Gun control legislation
http://willnevergiveup.wordpress.com/2009/01/19/hr-45/

Presidential term limits to vanish
http://willnevergiveup.wordpress.com/2009/01/10/hj-res-5/

Congress to meet in secret locations
http://willnevergiveup.wordpress.com/2009/01/16/h-con-res-1/

Social Security Funds for Native Hawaiian Healthcare
http://willnevergiveup.wordpress.com/2009/01/12/s-52/

What a Russian Newspaper had to say about our Obama
http://willnevergiveup.wordpress.com/2008/12/02/russia/


The Sky Is Falling? REAL Talk About Bank Accounting Methods, Foreclosures

March 7, 2009

The media continues to make announcements of foreclosures, hard times and victims of the mortgage crisis. Some citizens publicly and privately express anger who have invested responsibly of the unfairness of the mortgage bailout. It would be easier to form an opinion if we had a better grasp of the situation. What percentage of home loans are defaulting and to what capacity compared to historic defaults? No one seems to be talking about that. Who’s responsible for all those sub prime loans? Who’s really the “dirty bird?”

Firstly, banks aren’t broke. There’s an accounting system called “mark to market” that isn’t widely talked about. The sky is not falling and the FDIC has access to insurance funds.

“Mark-to-Market” Accounting and the Origins of the Financial Crisis: Mark-to-market accounting (also known as “fair value” accounting) means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately. Under such a rule, declining housing prices don’t just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less.

“Sub Prime Mortgage” is a type of loan granted to people with poor credit histories.

In the OTS disclosure of mortgage loan data, 35 percent of mortgages modified in the second quarter of 2008 had become 60 days or more past due within 5 months of modification. That’s important to know when we’re at the crossroads of spending all that time and money refinancing all those “victims.” See end of article for OTS links.

Excerpts of a New York Times article published in 1999 …In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

…Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

…the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

…In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Read the entire article here.

In a public announcement this week, Sheila Blair, head of the Federal Deposit Insurance Corporation (FDIC) warned bank chief executives that raised assessment fees–in addition to a new “emergency” fee–were critical to keep the insurance fund solvent. Thus… the sky is falling in an effort to charge more “fees” without too much fuss and no doubt those “fees” will be passed on to the consumer, YOU.

“Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative,” she wrote.

What the media isn’t telling you is that last month John Bovenzi, chief operating officer (COO) of the Federal Deposit Insurance Corp (FDIC), asked Congress for authority to impose special fees on banks for “a range of entities.” He stood before the Federal Committee on Financial Services and made a speech entitled “Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and Other Enhancements.” Read it here.

Bovenzi said it would impose the assessment on banks that take insured deposits, those banks’ holding companies, or both, as the FDIC sees fit.

He asked that Congress more than triple its existing line of credit with Treasury to $100 billion from $30 billion.

Bovenzi said that if Congress goes forward with permanently increasing the level of deposit insurance from $100,000 to $250,000, the FDIC should also be able to charge banks increased fees against the increased coverage. Rep. Barney Frank is currently working on a bill to make the FDIC coverage permanent at $250,000.

Steve Forbes, Forbes Inc Chief Executive wrote in a recent WSJ opinion column, “The most disastrous Bush policy that Mr. Obama is perpetuating is mark-to-market or ‘fair value’ accounting for banks, insurance companies and other financial institutions.”

Under mark-to-market — the revaluation of assets to their current market value — even non-suspect assets are being artificially knocked down in value, Forbes wrote.

“Banks and life insurance companies that have positive cash flows now find themselves in a death spiral,” Forbes wrote.

Forbes said that of the more than $700 billion that financial institutions had written off, almost all of it had been book write downs, not actual cash losses. Read more here

Chief economist Brian S. Wesbury and his colleagle Bob Stein at Trust Portfolios of Chicago estimate the impact of the “mark-to-market” accounting rule on the current crisis as follows:

“It is true that the root of this crisis is bad mortgage loans, but probably 70% of the real crisis that we face today is caused by mark-to-market accounting in an illiquid market. What’s most fascinating is that the Treasury is selling its plan as a way to put a bottom in mortgage pool prices, tipping its hat to the problem of mark-to-market accounting without acknowledging it. It is a real shame that there is so little discussion of this reality.” (Emphasis added.)

If regulators on their own–or Congress, if regulators fail to use their discretion–can fix 70% of the financial crisis by changing the mark-to-market accounting rule, we should change the rule first before attempting to pass another reevaluated bailout package. Read more here

Who is the OTS? The Office of Thrift Supervision is an agency of the US Dept. of the Treasury

Office of Thrift Supervision (OTS) homepage

OTS Disclosure of mortgage loan data, third quarter 2008

OTS Disclosure of mortgage loan data, October 2007 to March 2008

Other articles of interest:

A fable unfolded: ACORN and a foreclosure “victim”
http://willnevergiveup.wordpress.com/2009/02/23/acorn/

Foreclosures and illegals
http://willnevergiveup.wordpress.com/2009/02/21/foreclosures-illegals/

Illegal Aliens, the US Stimulus Package and the Age of Transparency Unveilled
http://willnevergiveup.wordpress.com/2009/02/05/hr-1/

Mortgage Rescue Bill and YOUR Tax Dollars
http://willnevergiveup.wordpress.com/2008/09/05/mortgage-rescue-bill-and-your-tax-dollars/

Citizenship of Birth Entitlement to End
http://willnevergiveup.wordpress.com/2009/01/30/hj-res-6/

Tax Loophole Proposed
http://willnevergiveup.wordpress.com/2009/01/26/s-261s-261/

Information gathering on US citizens
http://willnevergiveup.wordpress.com/2009/01/23/hr-640/

Gun control legislation
http://willnevergiveup.wordpress.com/2009/01/19/hr-45/

Presidential term limits to vanish
http://willnevergiveup.wordpress.com/2009/01/10/hj-res-5/

Congress to meet in secret locations
http://willnevergiveup.wordpress.com/2009/01/16/h-con-res-1/

Social Security Funds for Native Hawaiian Healthcare
http://willnevergiveup.wordpress.com/2009/01/12/s-52/

What a Russian Newspaper had to say about our Obama
http://willnevergiveup.wordpress.com/2008/12/02/russia/