"Source: Orlando Sentinel 06/11/2007
WASHINGTON -- By his own admission, he might have misled the public in describing his role in firing eight U.S. attorneys.
A top aide likely violated civil-service laws by injecting politics into hiring career prosecutors at the Justice Department.
And his bedside manner leaves something to be desired.
But Attorney General Alberto Gonzales nonetheless is expected to survive today when the Senate takes up a no-confidence vote on his performance.
Now, the questions are where a Democratic-led investigation of Gonzales' two-year tenure at the department goes from here and whether it is losing steam.
"Purely a symbolic vote," White House press secretary Tony Snow said on Fox News Sunday. "What you've got here [is] a Senate that's had a great deal of difficulty delivering on any of its promises."
The vote marks a critical juncture in a congressional probe that has raised questions about whether the mission of the Justice Department has been politicized under Gonzales.
The investigation began with the testimony of a group of U.S. attorneys fired last year -- and evidence suggesting the White House and Justice Department conspired to replace them to affect public-corruption and voting cases that would benefit Republicans.
Some Republicans called for Gonzales to resign, but he has retained the support of President Bush, his political mentor from Texas.
Gonzales has sought to put himself above the fray, appearing to go about the daily business of the department and law enforcement. He is to be in Miami today, giving a speech at a conference on nuclear terrorism, and later in Mobile, Ala., addressing a child-protection task force.
The Republican leadership appears to be falling in line behind Gonzales.
As concerned as some in the GOP are about the job that he has done at the department, they are approaching today's vote more as an opportunity to make a statement about the Democratic leadership. Fresh from the collapse of immigration-reform legislation, the nonbinding no-confidence resolution shows how Democrats are failing to lead on issues of importance to Americans, they say.
Even some Republicans who have called for Gonzales to resign, including Oklahoma Sen. Tom Coburn, plan to vote against the measure.
"This vote is irrelevant," White House spokesman Tony Fratto said. "If I were them, I'd worry about the public's no-confidence vote in this Congress, which specializes in doing nothing and complaining about everything. The Senate should go back to work on serious business instead of playing these games."
Even a leader of the Democratic effort to oust Gonzales, Sen. Charles Schumer, D-N.Y., who a month ago said he thought there was a good chance the resolution would win the necessary 60 votes, was trying to lower expectations.
"If all senators who have actually lost confidence in Attorney General Gonzales voted their conscience, this vote would be unanimous," Schumer said. "However, the president will certainly exert pressure to support the attorney general, his longtime friend. We will soon see where people's loyalties lie." "
Monday, June 11, 2007
Humanity In Iraq
Far too often notions of peace, justice, humanity, and universal human rights are deemed radical ideas by war hawks. I discuss these issues as they relate to the War in Iraq because we must never forget the 2 primary justifications that sparked this war.
The American people and the World were told Saddam Hussein’s gassing of thousands of Kurds and the prevention of the development of weapons of mass destruction were the reasons behind this conflict.
In all practicality the above reasons are humanitarian, for the purpose of saving lives. However, this war has killed 100 times more innocent civilians and children than Saddam’s gassing of the Kurds. In addition this war has resulted in the death of Iraqi civilians to trump any WMD ever deployed.
Recent reports also discuss the matter of “insurgency”. “Chessani's defense team called Dinsmore as a witness to describe what was happening around Al-Hadithah in the months leading up to the killings. He said insurgents regularly used hospitals and mosques to launch attacks. Men pretending to be asleep in a house shot and killed a Marine when he entered. ''They would exploit any hesitation in order to gain an advantage,'' Dinsmore said. “
In my opinion let me explain to you what I see as an insurgent. Hypothetically picture the USA being invaded by a superpower as a result American patriots fight the invaders in the streets. Back in this superpowers homeland these patriots are labeled “insurgents”. This is precisely what has happened in Iraq. This definition of an “insurgent” is a crucial topic that will lead to an end of this War. Are these Iraqi citizens, civilians fighting for their land, political decedents, or members of Al Queda?
In its on this topic alone that I hold this position, the War in Iraq must be ended immediately.
Source: Source: San Jose Mercury News 06/08/2007
The American people and the World were told Saddam Hussein’s gassing of thousands of Kurds and the prevention of the development of weapons of mass destruction were the reasons behind this conflict.
In all practicality the above reasons are humanitarian, for the purpose of saving lives. However, this war has killed 100 times more innocent civilians and children than Saddam’s gassing of the Kurds. In addition this war has resulted in the death of Iraqi civilians to trump any WMD ever deployed.
Recent reports also discuss the matter of “insurgency”. “Chessani's defense team called Dinsmore as a witness to describe what was happening around Al-Hadithah in the months leading up to the killings. He said insurgents regularly used hospitals and mosques to launch attacks. Men pretending to be asleep in a house shot and killed a Marine when he entered. ''They would exploit any hesitation in order to gain an advantage,'' Dinsmore said. “
In my opinion let me explain to you what I see as an insurgent. Hypothetically picture the USA being invaded by a superpower as a result American patriots fight the invaders in the streets. Back in this superpowers homeland these patriots are labeled “insurgents”. This is precisely what has happened in Iraq. This definition of an “insurgent” is a crucial topic that will lead to an end of this War. Are these Iraqi citizens, civilians fighting for their land, political decedents, or members of Al Queda?
In its on this topic alone that I hold this position, the War in Iraq must be ended immediately.
Source: Source: San Jose Mercury News 06/08/2007
Saturday, June 09, 2007
Shooting in Sarasota
"Jacquelyn Ferguson knew she was going to be fired when she walked into work at the cardiologist's office Friday morning, deputies say.Whether that ever happened, no one knows.While the two spoke in private, Ferguson, 51, took out a gun and shot and killed her manager, 45-year-old Denise Keyworth.Then, less than three hours later, the woman described as "peaceful" and "against guns" by her neighbors shot herself.A Herald-Tribune editor found Ferguson at her home in Palm-Aire, lying in a lounge chair with a head wound, a black revolver in her lap and a pool of blood on the floor.The two women met last fall, when Ferguson started working for Dr. Jeffrey Sack.But the office environment was troubled. Sack was arrested on drug charges in October, and the Drug Enforcement Administration raided the office.A neighbor said Ferguson was depressed about work and taking medication. Ferguson told a co-worker she could not afford to lose her job.The murder-suicide began unfolding before 9 a.m. at Sack's office on Bee Ridge Road.When Ferguson walked in, the two other employees in the room left to give her privacy to speak with Keyworth. They, too, had heard that Ferguson would be fired.Moments later, they heard gunshots. They ran to a neighboring office."They heard bumping noises, multiple gunshots and one short scream," said Dave Jones, the manager of the adjacent Center for Angiography. "They were seeking refuge."They called the police. They called Dr. Sack.Fearing the shooter would come to his office next, Jones locked patients and nurses in rooms in his office.Outside, police crouched on cars and rooftops. They closed off heavily traveled Bee Ridge Road between Tuttle Avenue and Lockwood Ridge Road. The nearby Church of the Palms preschool on Bee Ridge went into lockdown.Working on the assumption that Ferguson would be in the back of the building, deputies asked everyone in Jones' office to huddle in a big group and shuffle out the front door."It was a little bit shaky," Jones said of the moment when they had to leave the locked office, unsure if the shooter was still next door. "We had to pass by the SWAT team with our arms in the air."Before the building was evacuated, there were about a dozen people inside. Emergency and law enforcement officials rushed Sack's office.Keyworth was dead. And Ferguson was gone.Killer described as quietDeputies from Manatee and Sarasota counties were stationed in Ferguson's neighborhood waiting for a warrant to search her home, and waiting for her return to the one-story gray house and pool.They did not realize she was already inside, dead on the lanai.Friends and neighbors said Ferguson was calm, with a penchant for exotic pet birds and holistic medicine."She was always ready to help out when you go on vacation or anything," said Jessie Laiken, who lived across the street.Ferguson was unmarried and did not have a boyfriend, friends said. She did not want a relationship."She really keeps to herself," said Shyla Roberts.Ferguson was from Maryland and had two sons living in the Washington, D.C., area, Roberts said.A few months after she started at Sack's office, Ferguson accepted an invitation to eat Christmas dinner at Keyworth's home in Sarasota.Family members of Keyworth gathered there Friday afternoon. They said they were not ready to talk to the media.Keyworth worked for Sack for a "number of years," according to court documents, but left in February of 2005.She started a business called Making Dollars & Sense Inc. in October 2005, and filed an annual report with the state for the business in April. The number for the business has been disconnected.She was rehired to work for Sack in May of 2006.Police say Sack illegally ordered a medicine used to treat drug dependency. Because the medicine can be abused, doctors need a special authorization from the DEA to order and dispense it.Sack lacked that authorization, according to case documents.He was arrested last year after a federal sting.Reached this morning at his Tampa office, Sack's attorney, John M. Fitzgibbons, said he expected the trial to clear Sack's record.Sack also has a previous conviction in federal court for prescription drug fraud, stemming from the 1996 purchase of a painkiller under a false identity. He was sentenced to three years' probation and fined $7,000.Wearing cut-off jeans and driving a Mercedes-Benz, Sack arrived at the scene just after 9 a.m. Friday and was escorted to the command center.Attempts to reach him Friday were unsuccessful."
Thursday, June 07, 2007
Blank Checks for Defense Spending
"By Robert Dreyfuss, Tomdispatch.com. Posted June 6, 2007.
Defense spending has nearly doubled since the mid-1990s, and Democrats willing to challenge the bloated Pentagon budget are essentially nonexistent.
War critics are rightly disappointed over the inability of congressional Democrats to mount an effective challenge to President Bush's Iraq adventure. What began as a frontal assault on the war, with tough talk about deadlines and timetables, has settled into something like a guerrilla-style campaign to chip away at war policy until the edifice crumbles.
Still, Democratic criticism of administration policy in Iraq looks muscle-bound when compared with the Party's readiness to go along with the President's massive military buildup, domestically and globally. Nothing underlines the tacit alliance between so-called foreign-policy realists and hard-line exponents of neoconservative-style empire-building more than the Washington consensus that the United States needs to expand the budget of the Defense Department without end, while increasing the size of the U.S. Armed Forces. In addition, spending on the 16 agencies and other organizations that make up the official U.S. "intelligence community" or IC -- including the CIA -- and on homeland security is going through the roof.
The numbers are astonishing and, except for a hardy band of progressives in the House of Representatives, Democrats willing to call for shrinking the bloated Pentagon or intelligence budgets are essentially nonexistent. Among presidential candidates, only Rep. Dennis Kucinich and New Mexico Governor Bill Richardson even mention the possibility of cutting the defense budget. Indeed, presidential candidates Hillary Clinton and Barack Obama are, at present, competing with each other in their calls for the expansion of the Armed Forces. Both are supporting manpower increases in the range of 80,000 to 100,000 troops, mostly for the Army and the Marines. (The current, Bush-backed authorization for fiscal year 2008 calls for the addition of 65,000 more Army recruits and 27,000 Marines by 2012.)
How astonishing are the budgetary numbers? Consider the trajectory of U.S. defense spending over the last nearly two decades. From the end of the Cold War into the mid-1990s, defense spending actually fell significantly. In constant 1996 dollars, the Pentagon's budget dropped from a peacetime high of $376 billion, at the end of President Ronald Reagan's military buildup in 1989, to a low of $265 billion in 1996. (That compares to post-World War II wartime highs of $437 billion in 1953, during the Korean War, and $388 billion in 1968, at the peak of the War in Vietnam.) After the Soviet empire peacefully disintegrated, the 1990s decline wasn't exactly the hoped-for "peace dividend," but it wasn't peanuts either.
However, since September 12th, 2001, defense spending has simply exploded. For 2008, the Bush administration is requesting a staggering $650 billion, compared to the already staggering $400 billion the Pentagon collected in 2001. Even subtracting the costs of the ongoing "Global War on Terrorism" -- which is what the White House likes to call its wars in Iraq and Afghanistan -- for FY 2008, the Pentagon will still spend $510 billion. In other words, even without the President's two wars, defense spending will have nearly doubled since the mid-1990s. Given that the United States has literally no significant enemy state to fight anywhere on the planet, this represents a remarkable, if perverse, achievement. As a famous Democratic politician once asked: Where is the outrage?
Neocons, war profiteers, and hardliners of all stripes still argue that the "enemy" we face is a nonexistent bugaboo called "Islamofascism." It's easy to imagine them laughing into their sleeves while they continue to claim that the way to battle low-tech, rag-tag bands of leftover Al Qaeda crazies is by spending billions of dollars on massively expensive, massively powerful, futuristic weapons systems.
As always, a significant part of the defense bill is eaten up by these big-ticket items. According to the reputable Center for Arms Control and Nonproliferation, there are at least 28 pricey weapons systems that, just by themselves, will rack up a whopping $44 billion in 2008. The projected cost of these 28 systems -- which include fighter jets, the B-2 bomber, the V-22 Osprey, various advanced naval vessels, cruise-missile systems, and the ultra-expensive aircraft carriers the Navy always demands -- will, in the end, be more than $1 trillion. And that's not even including the Star Wars missile-defense system, which at the moment soaks up about $11 billion a year.
By one count, U.S. defense spending in 2008 will amount to 29 times the combined military spending of all six so-called rogue states: Cuba, Iran, Libya, North Korea, Sudan, and Syria. The United States accounts for almost half -- approximately 48% -- of the entire world's spending on what we like to call "defense." Again, according to the Center for Arms Control and Nonproliferation, U.S. defense spending this year amounts to exactly twice the combined military spending of the next six biggest military powers: China, Russia, the U.K., France, Japan, and Germany. "
Defense spending has nearly doubled since the mid-1990s, and Democrats willing to challenge the bloated Pentagon budget are essentially nonexistent.
War critics are rightly disappointed over the inability of congressional Democrats to mount an effective challenge to President Bush's Iraq adventure. What began as a frontal assault on the war, with tough talk about deadlines and timetables, has settled into something like a guerrilla-style campaign to chip away at war policy until the edifice crumbles.
Still, Democratic criticism of administration policy in Iraq looks muscle-bound when compared with the Party's readiness to go along with the President's massive military buildup, domestically and globally. Nothing underlines the tacit alliance between so-called foreign-policy realists and hard-line exponents of neoconservative-style empire-building more than the Washington consensus that the United States needs to expand the budget of the Defense Department without end, while increasing the size of the U.S. Armed Forces. In addition, spending on the 16 agencies and other organizations that make up the official U.S. "intelligence community" or IC -- including the CIA -- and on homeland security is going through the roof.
The numbers are astonishing and, except for a hardy band of progressives in the House of Representatives, Democrats willing to call for shrinking the bloated Pentagon or intelligence budgets are essentially nonexistent. Among presidential candidates, only Rep. Dennis Kucinich and New Mexico Governor Bill Richardson even mention the possibility of cutting the defense budget. Indeed, presidential candidates Hillary Clinton and Barack Obama are, at present, competing with each other in their calls for the expansion of the Armed Forces. Both are supporting manpower increases in the range of 80,000 to 100,000 troops, mostly for the Army and the Marines. (The current, Bush-backed authorization for fiscal year 2008 calls for the addition of 65,000 more Army recruits and 27,000 Marines by 2012.)
How astonishing are the budgetary numbers? Consider the trajectory of U.S. defense spending over the last nearly two decades. From the end of the Cold War into the mid-1990s, defense spending actually fell significantly. In constant 1996 dollars, the Pentagon's budget dropped from a peacetime high of $376 billion, at the end of President Ronald Reagan's military buildup in 1989, to a low of $265 billion in 1996. (That compares to post-World War II wartime highs of $437 billion in 1953, during the Korean War, and $388 billion in 1968, at the peak of the War in Vietnam.) After the Soviet empire peacefully disintegrated, the 1990s decline wasn't exactly the hoped-for "peace dividend," but it wasn't peanuts either.
However, since September 12th, 2001, defense spending has simply exploded. For 2008, the Bush administration is requesting a staggering $650 billion, compared to the already staggering $400 billion the Pentagon collected in 2001. Even subtracting the costs of the ongoing "Global War on Terrorism" -- which is what the White House likes to call its wars in Iraq and Afghanistan -- for FY 2008, the Pentagon will still spend $510 billion. In other words, even without the President's two wars, defense spending will have nearly doubled since the mid-1990s. Given that the United States has literally no significant enemy state to fight anywhere on the planet, this represents a remarkable, if perverse, achievement. As a famous Democratic politician once asked: Where is the outrage?
Neocons, war profiteers, and hardliners of all stripes still argue that the "enemy" we face is a nonexistent bugaboo called "Islamofascism." It's easy to imagine them laughing into their sleeves while they continue to claim that the way to battle low-tech, rag-tag bands of leftover Al Qaeda crazies is by spending billions of dollars on massively expensive, massively powerful, futuristic weapons systems.
As always, a significant part of the defense bill is eaten up by these big-ticket items. According to the reputable Center for Arms Control and Nonproliferation, there are at least 28 pricey weapons systems that, just by themselves, will rack up a whopping $44 billion in 2008. The projected cost of these 28 systems -- which include fighter jets, the B-2 bomber, the V-22 Osprey, various advanced naval vessels, cruise-missile systems, and the ultra-expensive aircraft carriers the Navy always demands -- will, in the end, be more than $1 trillion. And that's not even including the Star Wars missile-defense system, which at the moment soaks up about $11 billion a year.
By one count, U.S. defense spending in 2008 will amount to 29 times the combined military spending of all six so-called rogue states: Cuba, Iran, Libya, North Korea, Sudan, and Syria. The United States accounts for almost half -- approximately 48% -- of the entire world's spending on what we like to call "defense." Again, according to the Center for Arms Control and Nonproliferation, U.S. defense spending this year amounts to exactly twice the combined military spending of the next six biggest military powers: China, Russia, the U.K., France, Japan, and Germany. "
The Federalist Society, the U.S. Attorneys Scandal
"Harpers.org by Scott Horton
The Federalist Society bills itself as “a group of conservatives and libertarians interested in the current state of the legal order.” It sponsors debates and public information functions at law schools around the country. I have participated in Federalist Society functions for more than a decade myself, and I always enjoy them. But there is another, darker side of the Federalist Society which doesn’t show up on its website, but it making increasing appearances on documents turnover in the current probe of the U.S. Attorneys scandal. It serves as a means by which “loyal Bushies” identify themselves to one another, prove their absolute ideological loyalty, and it operates as an express elevator to high government office. Recall, for instance, that in the list of qualifications that
Kyle Sampson prepared, one column was headed “Federalist Society?”
Now evidence has surfaced suggesting that the Federalist Society was deeply enmeshed in the plot to purge the Justice Department of those who were unwilling to fulfill Karl Rove’s political plans, and in identifying new candidates who would. McClatchy reports:
A leader of an influential conservative legal group recommended a replacement candidate for the U.S. attorney in San Diego just days after the sitting prosecutor’s name was secretly placed on a Justice Department firing list, according to a document released Wednesday. The recommendation by the executive vice president of the Federalist Society, Leonard Leo, came before anyone outside of a tight group in the White House and Justice Department knew about a nascent strategy that ultimately led to the firings of nine U.S. attorneys.
It could not be determined whether a short e-mail, sent on March 7, 2005, making the recommendation meant that Leo knew of the plan to fire Carol Lam or whether his message was unsolicited and coincidental. The subject line of Leo’s e-mail to Mary Beth Buchanan, then-director of the Executive Office for U.S. Attorneys, says, “USA San Diego,” indicating the top prosecutor job for the Southern District of California. Lam was on the job at the time and had no plans to step down.
What is most revealing here is both that Leo knew that Lam was being fired before she did, and that he was busy identifying replacements. And the candidate he suggested is telling:
The text of the note reads, “You guys need a good candidate?” Leo goes on to say he would “strongly recommend” the Air Force’s general counsel, Mary Walker. Walker led a Pentagon working group in 2003, which critics said helped provide the administration with a rationale to circumvent the international Geneva Conventions banning torture in the interrogations of terrorism suspects.
Mary Walker, who is close to a number of Religious Right groups, was a principal architect of legal efforts to justify torture and other war crimes. She also played a suspicious role, apparently attempting to suppress an independent investigation of misconduct by religious evangelical groups at the Air Force Academy in Colorado Springs. Walker is also widely believed to be involved in efforts to harass and intimidate Air Force JAGs she considered to be politically disloyal. She appears to have launched a vendetta against the Air Force’s Judge Advocate General, who had, together with his deputy, opposed her torture initiatives. She has been one of the most widely disliked figures in the Rumsfeld Pentagon.
On its website, the Federalist Society claims that it was “founded on the principles that the state exists to preserve freedom [and] that the separation of governmental powers is central to our Constitution.” It would apparently be incorrect to suppose that the “separation of powers” they have in mind here would in any way limit political control over the prosecutorial functions. "
The Federalist Society bills itself as “a group of conservatives and libertarians interested in the current state of the legal order.” It sponsors debates and public information functions at law schools around the country. I have participated in Federalist Society functions for more than a decade myself, and I always enjoy them. But there is another, darker side of the Federalist Society which doesn’t show up on its website, but it making increasing appearances on documents turnover in the current probe of the U.S. Attorneys scandal. It serves as a means by which “loyal Bushies” identify themselves to one another, prove their absolute ideological loyalty, and it operates as an express elevator to high government office. Recall, for instance, that in the list of qualifications that
Kyle Sampson prepared, one column was headed “Federalist Society?”
Now evidence has surfaced suggesting that the Federalist Society was deeply enmeshed in the plot to purge the Justice Department of those who were unwilling to fulfill Karl Rove’s political plans, and in identifying new candidates who would. McClatchy reports:
A leader of an influential conservative legal group recommended a replacement candidate for the U.S. attorney in San Diego just days after the sitting prosecutor’s name was secretly placed on a Justice Department firing list, according to a document released Wednesday. The recommendation by the executive vice president of the Federalist Society, Leonard Leo, came before anyone outside of a tight group in the White House and Justice Department knew about a nascent strategy that ultimately led to the firings of nine U.S. attorneys.
It could not be determined whether a short e-mail, sent on March 7, 2005, making the recommendation meant that Leo knew of the plan to fire Carol Lam or whether his message was unsolicited and coincidental. The subject line of Leo’s e-mail to Mary Beth Buchanan, then-director of the Executive Office for U.S. Attorneys, says, “USA San Diego,” indicating the top prosecutor job for the Southern District of California. Lam was on the job at the time and had no plans to step down.
What is most revealing here is both that Leo knew that Lam was being fired before she did, and that he was busy identifying replacements. And the candidate he suggested is telling:
The text of the note reads, “You guys need a good candidate?” Leo goes on to say he would “strongly recommend” the Air Force’s general counsel, Mary Walker. Walker led a Pentagon working group in 2003, which critics said helped provide the administration with a rationale to circumvent the international Geneva Conventions banning torture in the interrogations of terrorism suspects.
Mary Walker, who is close to a number of Religious Right groups, was a principal architect of legal efforts to justify torture and other war crimes. She also played a suspicious role, apparently attempting to suppress an independent investigation of misconduct by religious evangelical groups at the Air Force Academy in Colorado Springs. Walker is also widely believed to be involved in efforts to harass and intimidate Air Force JAGs she considered to be politically disloyal. She appears to have launched a vendetta against the Air Force’s Judge Advocate General, who had, together with his deputy, opposed her torture initiatives. She has been one of the most widely disliked figures in the Rumsfeld Pentagon.
On its website, the Federalist Society claims that it was “founded on the principles that the state exists to preserve freedom [and] that the separation of governmental powers is central to our Constitution.” It would apparently be incorrect to suppose that the “separation of powers” they have in mind here would in any way limit political control over the prosecutorial functions. "
Thursday, May 31, 2007
Opposition to NASA Chief Michael Griffin
I completely dispute the opinion of NASA Chief Michael Griffin on global warming. Why do I u ask? The fact of the matter is man has never been as industrialized as we are today, spewing pollutants into the environment. Manmade pollutants are not a naturally occurring phenomenon. Furthermore, the Chief said it is “arrogant for people now to determine the current climate is optimal”. Would you agree with me in that this is an absurd statement primarily because human beings, animals, and plants are not biologically evolving alongside the rate of the warming of the Earth.
"NASA administrator Michael Griffin defends the space agency's programs, including plans for a permanent moon base and manned missions to Mars. He also says that while NASA studies climate change, the agency has no authorization to "take actions to affect climate change in either one way or another."
The following are excerpts from Griffin's conversation with Steve Inskeep, edited for clarity:
It has been mentioned that NASA is not spending as much money as it could to study climate change — global warming — from space. Are you concerned about global warming?
I'm aware that global warming exists. I understand that the bulk of scientific evidence accumulated supports the claim that we've had about a one degree centigrade rise in temperature over the last century to within an accuracy of 20 percent. I'm also aware of recent findings that appear to have nailed down — pretty well nailed down the conclusion that much of that is manmade. Whether that is a longterm concern or not, I can't say.
Do you have any doubt that this is a problem that mankind has to wrestle with?
I have no doubt that … a trend of global warming exists. I am not sure that it is fair to say that it is a problem we must wrestle with. To assume that it is a problem is to assume that the state of Earth's climate today is the optimal climate, the best climate that we could have or ever have had and that we need to take steps to make sure that it doesn't change. First of all, I don't think it's within the power of human beings to assure that the climate does not change, as millions of years of history have shown. And second of all, I guess I would ask which human beings — where and when — are to be accorded the privilege of deciding that this particular climate that we have right here today, right now is the best climate for all other human beings. I think that's a rather arrogant position for people to take.
Is that thinking that informs you as you put together the budget? That something is happening, that it's worth studying, but you're not sure that you want to be battling it as an army might battle an enemy?
Nowhere in NASA's authorization, which of course governs what we do, is there anything at all telling us that we should take actions to affect climate change in either one way or another. We study global climate change, that is in our authorization, we think we do it rather well. I'm proud of that, but NASA is not an agency chartered to, quote, battle climate change."
"NASA administrator Michael Griffin defends the space agency's programs, including plans for a permanent moon base and manned missions to Mars. He also says that while NASA studies climate change, the agency has no authorization to "take actions to affect climate change in either one way or another."
The following are excerpts from Griffin's conversation with Steve Inskeep, edited for clarity:
It has been mentioned that NASA is not spending as much money as it could to study climate change — global warming — from space. Are you concerned about global warming?
I'm aware that global warming exists. I understand that the bulk of scientific evidence accumulated supports the claim that we've had about a one degree centigrade rise in temperature over the last century to within an accuracy of 20 percent. I'm also aware of recent findings that appear to have nailed down — pretty well nailed down the conclusion that much of that is manmade. Whether that is a longterm concern or not, I can't say.
Do you have any doubt that this is a problem that mankind has to wrestle with?
I have no doubt that … a trend of global warming exists. I am not sure that it is fair to say that it is a problem we must wrestle with. To assume that it is a problem is to assume that the state of Earth's climate today is the optimal climate, the best climate that we could have or ever have had and that we need to take steps to make sure that it doesn't change. First of all, I don't think it's within the power of human beings to assure that the climate does not change, as millions of years of history have shown. And second of all, I guess I would ask which human beings — where and when — are to be accorded the privilege of deciding that this particular climate that we have right here today, right now is the best climate for all other human beings. I think that's a rather arrogant position for people to take.
Is that thinking that informs you as you put together the budget? That something is happening, that it's worth studying, but you're not sure that you want to be battling it as an army might battle an enemy?
Nowhere in NASA's authorization, which of course governs what we do, is there anything at all telling us that we should take actions to affect climate change in either one way or another. We study global climate change, that is in our authorization, we think we do it rather well. I'm proud of that, but NASA is not an agency chartered to, quote, battle climate change."
Seeking Perspective on Iraq Death Toll
By Ted Koppel
“There is a reason for keeping U.S. troops in Iraq that has more to do with American interests: stability in the Persian Gulf, the world's single largest producer and exporter of oil and natural gas.”
"It's been a brutal month for American soldiers in Iraq; but it would be a mistake to think that it's the number of deaths alone that is creating the sense of national urgency to get out. Given the right circumstances, Americans are quite prepared to tolerate far higher casualties. Roughly 43,000 people die on our roads and highways every year.
Considerable effort is expended to bring that number down: Our vehicles are increasingly built to withstand crashes. We seem to have made real progress in persuading drivers to wear seatbelts and not to consume alcoholic beverages when they're about to get behind the wheel. Law enforcement does what it can to reduce speeding. Having said that, the number of driving fatalities every year remains stubbornly constant.
Apparently, 43,000 deaths a year is a price we are prepared to pay for the benefits that motorcycles, cars, trucks and buses provide. Those benefits are such, that no politician in recent memory has seriously suggested getting rid of all motor vehicles. It simply wouldn't happen. Our economy would come to a grinding halt. The impact on the national interest would be devastating.
In another week or so, we will have lost 3,500 U.S. troops in Iraq. That, of course, is over a four-year period.
So, the level of outrage and the growing opposition to the Iraq war has to be connected to something other than simply the number of those killed. After all, we lose that many people in traffic accidents every month, with barely a murmur of protest.
Where the Bush administration has failed, tragically and repeatedly, is in explaining to the American public why U.S. forces were sent into Iraq in the first place, and why they must remain there now.
Certainly, the United States has a moral obligation to deal with the chaos and anarchy that were, at least partially, unleashed by the U.S. invasion of Iraq. But that falls into the category of something we're doing for them. The president cannot and should not expect Americans to give their open-ended support to a nation that seems overwhelmingly to regard our troops as "invaders and occupiers."
What, then? There is a reason for keeping U.S. troops in Iraq that has more to do with American interests: stability in the Persian Gulf, the world's single largest producer and exporter of oil and natural gas.
Do we know for a fact that, without U.S. troops in Iraq, that country's chaos would bleed into Saudi Arabia and Kuwait; Egypt, Syria and Jordan? No. But chances are better than even that it would — and you can throw Iran into the mix.
That is not an easy political argument to make: Blood for oil has never been a popular slogan in America. But try to separate us from our motor vehicles and you'll get a sense of where our national interests lie. And if you try to keep those vehicles running without Persian Gulf oil, you'll know that a U.S. withdrawal from Iraq is nowhere in our immediate future."
“There is a reason for keeping U.S. troops in Iraq that has more to do with American interests: stability in the Persian Gulf, the world's single largest producer and exporter of oil and natural gas.”
"It's been a brutal month for American soldiers in Iraq; but it would be a mistake to think that it's the number of deaths alone that is creating the sense of national urgency to get out. Given the right circumstances, Americans are quite prepared to tolerate far higher casualties. Roughly 43,000 people die on our roads and highways every year.
Considerable effort is expended to bring that number down: Our vehicles are increasingly built to withstand crashes. We seem to have made real progress in persuading drivers to wear seatbelts and not to consume alcoholic beverages when they're about to get behind the wheel. Law enforcement does what it can to reduce speeding. Having said that, the number of driving fatalities every year remains stubbornly constant.
Apparently, 43,000 deaths a year is a price we are prepared to pay for the benefits that motorcycles, cars, trucks and buses provide. Those benefits are such, that no politician in recent memory has seriously suggested getting rid of all motor vehicles. It simply wouldn't happen. Our economy would come to a grinding halt. The impact on the national interest would be devastating.
In another week or so, we will have lost 3,500 U.S. troops in Iraq. That, of course, is over a four-year period.
So, the level of outrage and the growing opposition to the Iraq war has to be connected to something other than simply the number of those killed. After all, we lose that many people in traffic accidents every month, with barely a murmur of protest.
Where the Bush administration has failed, tragically and repeatedly, is in explaining to the American public why U.S. forces were sent into Iraq in the first place, and why they must remain there now.
Certainly, the United States has a moral obligation to deal with the chaos and anarchy that were, at least partially, unleashed by the U.S. invasion of Iraq. But that falls into the category of something we're doing for them. The president cannot and should not expect Americans to give their open-ended support to a nation that seems overwhelmingly to regard our troops as "invaders and occupiers."
What, then? There is a reason for keeping U.S. troops in Iraq that has more to do with American interests: stability in the Persian Gulf, the world's single largest producer and exporter of oil and natural gas.
Do we know for a fact that, without U.S. troops in Iraq, that country's chaos would bleed into Saudi Arabia and Kuwait; Egypt, Syria and Jordan? No. But chances are better than even that it would — and you can throw Iran into the mix.
That is not an easy political argument to make: Blood for oil has never been a popular slogan in America. But try to separate us from our motor vehicles and you'll get a sense of where our national interests lie. And if you try to keep those vehicles running without Persian Gulf oil, you'll know that a U.S. withdrawal from Iraq is nowhere in our immediate future."
Wednesday, May 30, 2007
FL U.S. Attorney post has few takers
"Source: Orlando Sentinel 05/30/2007
Wanted: Veteran attorney to oversee important cases in 35 Florida counties. Job expected to last 18 months or so. Salary: $145,400.
Sounds enticing, but so far there have been almost no takers.
In the past, lawyers clamored to be U.S. attorney for the Middle District of Florida -- one of the most powerful federal-prosecutor jobs in the country.
Stretching from Fort Myers to Orlando and Jacksonville, the office has prosecuted some of the nation's biggest criminal cases, from Colombian drug lord Carlos Lehder to real-estate infomercial personality William McCorkle and Soviet spy George Trofimoff.
But after U.S. Attorney Paul Perez announced March 13 that he was stepping down for a lucrative private-sector job, only one person applied for the post. So earlier this month, the job was re-advertised with an application deadline of June 15.
"It's astonishing," said Michael Seigel, the former No. 2 man in the region's U.S. Attorney's Office from 1995 to 1999, who twice was considered for the top job. "The typical number is 15 people.
"Being U.S. attorney at the end of the Bush administration -- most people would not see that as being a plus on your resume."
Current and former prosecutors say there are several reasons complicating decisions for prospective applicants.
With 18 months before the next presidential election, a change in administrations -- especially if a Democrat is elected -- would likely guarantee the U.S. attorney would be replaced. The jobs are filled by political appointees who serve at the pleasure of the president.
There also would be a significant risk to any civil lawyer selected for the job who would have to leave his or her practice with little time to earn a reputation in the new role, attorneys say. Any career prosecutor who got the job could risk a smaller pension if not allowed to return to an old job when the new administration takes over.
"Everyone can sense the political winds are changing in this country, and there's a possibility a Democrat could win [the White House]," said Rick Jancha, an Orlando defense lawyer and Republican who retired in January after 21 years as a federal prosecutor. "There would be a real likelihood [the new U.S. attorney] would lose their job. So if you're a career prosecutor, why screw up your retirement for 18 months as boss?"
And once the U.S. attorney resigns or is replaced, he or she would be barred by federal law for two years from handling any criminal or civil cases investigated by the prosecutor's office.
Finally, there is the controversy and drama engulfing Attorney General Alberto Gonzales and his firing of eight U.S. attorneys last year, possibly for political reasons. His office and the White House are currently under scrutiny by Congress.
Seigel, a Democrat who is a University of Florida law professor, thinks the turmoil inside the Justice Department in Washington is a key factor.
"It's got to be a reflection of the low morale and the attorney general's awful performance in defending the actions the department took in firing eight U.S. attorneys. I think the politicization of the department -- a lot of people are not interested in getting in the middle of that."
Perez, 52, now a corporate lawyer in Jacksonville, said the political controversy in Washington and congressional hearings have little to do with operating the U.S. Attorney's Office in Central Florida.
"
I think that's an inside-the-beltway issue," Perez said. "That doesn't affect what's going on in the field. That shouldn't keep qualified people from applying for U.S. attorney.
"This is major league, the big show," Perez said of the district. "You're basically a mini-Department of Justice."
The job also has been a steppingstone for lawyers to become federal judges and partners in major law firms. Perez said working with 200 employees, including 94 attorneys, was the best post he has ever had.
"Supreme Court Justice Samuel Alito, who was U.S. attorney for New Jersey, told me earlier this year it was the best job he ever had," Perez said. "Michael Chertoff, secretary of the Department of Homeland Security, said it was the best job he had."
Orlando business lawyer Marcos Marchena, chairman of the Middle District Conference committee that will screen candidates, said it is expected to submit at least three names to Florida's Republican U.S. Sen. Mel Martinez for review with Democratic Sen. Bill Nelson. The senators will submit a candidate's name to the White House for consideration, and the nominee will be sent to the Senate for confirmation.
Screening committee members decided to postpone the May 3 deadline because they received only one application, Marchena said. He noted that only a half-dozen lawyers applied for a similar vacancy in Miami two years ago.
Since the application process was reopened, Marchena said, he has received inquiries from interested parties.
He admits political issues in Washington might complicate the process, but he is confident qualified candidates to oversee criminal and civil cases locally for the federal government will be found. Marchena also said some U.S. attorneys have been retained by successor administrations.
"It's an important position and crucial position for our society," Marchena said.
Perez said he urged the department to name his former No. 2, Jim Klindt, as the acting U.S. attorney because of the short amount of time before the election.
"When there's 18 months left," Perez said, "maybe more attention should be paid to continuity and less disruption caused by a new person coming in." "
Wanted: Veteran attorney to oversee important cases in 35 Florida counties. Job expected to last 18 months or so. Salary: $145,400.
Sounds enticing, but so far there have been almost no takers.
In the past, lawyers clamored to be U.S. attorney for the Middle District of Florida -- one of the most powerful federal-prosecutor jobs in the country.
Stretching from Fort Myers to Orlando and Jacksonville, the office has prosecuted some of the nation's biggest criminal cases, from Colombian drug lord Carlos Lehder to real-estate infomercial personality William McCorkle and Soviet spy George Trofimoff.
But after U.S. Attorney Paul Perez announced March 13 that he was stepping down for a lucrative private-sector job, only one person applied for the post. So earlier this month, the job was re-advertised with an application deadline of June 15.
"It's astonishing," said Michael Seigel, the former No. 2 man in the region's U.S. Attorney's Office from 1995 to 1999, who twice was considered for the top job. "The typical number is 15 people.
"Being U.S. attorney at the end of the Bush administration -- most people would not see that as being a plus on your resume."
Current and former prosecutors say there are several reasons complicating decisions for prospective applicants.
With 18 months before the next presidential election, a change in administrations -- especially if a Democrat is elected -- would likely guarantee the U.S. attorney would be replaced. The jobs are filled by political appointees who serve at the pleasure of the president.
There also would be a significant risk to any civil lawyer selected for the job who would have to leave his or her practice with little time to earn a reputation in the new role, attorneys say. Any career prosecutor who got the job could risk a smaller pension if not allowed to return to an old job when the new administration takes over.
"Everyone can sense the political winds are changing in this country, and there's a possibility a Democrat could win [the White House]," said Rick Jancha, an Orlando defense lawyer and Republican who retired in January after 21 years as a federal prosecutor. "There would be a real likelihood [the new U.S. attorney] would lose their job. So if you're a career prosecutor, why screw up your retirement for 18 months as boss?"
And once the U.S. attorney resigns or is replaced, he or she would be barred by federal law for two years from handling any criminal or civil cases investigated by the prosecutor's office.
Finally, there is the controversy and drama engulfing Attorney General Alberto Gonzales and his firing of eight U.S. attorneys last year, possibly for political reasons. His office and the White House are currently under scrutiny by Congress.
Seigel, a Democrat who is a University of Florida law professor, thinks the turmoil inside the Justice Department in Washington is a key factor.
"It's got to be a reflection of the low morale and the attorney general's awful performance in defending the actions the department took in firing eight U.S. attorneys. I think the politicization of the department -- a lot of people are not interested in getting in the middle of that."
Perez, 52, now a corporate lawyer in Jacksonville, said the political controversy in Washington and congressional hearings have little to do with operating the U.S. Attorney's Office in Central Florida.
"
I think that's an inside-the-beltway issue," Perez said. "That doesn't affect what's going on in the field. That shouldn't keep qualified people from applying for U.S. attorney.
"This is major league, the big show," Perez said of the district. "You're basically a mini-Department of Justice."
The job also has been a steppingstone for lawyers to become federal judges and partners in major law firms. Perez said working with 200 employees, including 94 attorneys, was the best post he has ever had.
"Supreme Court Justice Samuel Alito, who was U.S. attorney for New Jersey, told me earlier this year it was the best job he ever had," Perez said. "Michael Chertoff, secretary of the Department of Homeland Security, said it was the best job he had."
Orlando business lawyer Marcos Marchena, chairman of the Middle District Conference committee that will screen candidates, said it is expected to submit at least three names to Florida's Republican U.S. Sen. Mel Martinez for review with Democratic Sen. Bill Nelson. The senators will submit a candidate's name to the White House for consideration, and the nominee will be sent to the Senate for confirmation.
Screening committee members decided to postpone the May 3 deadline because they received only one application, Marchena said. He noted that only a half-dozen lawyers applied for a similar vacancy in Miami two years ago.
Since the application process was reopened, Marchena said, he has received inquiries from interested parties.
He admits political issues in Washington might complicate the process, but he is confident qualified candidates to oversee criminal and civil cases locally for the federal government will be found. Marchena also said some U.S. attorneys have been retained by successor administrations.
"It's an important position and crucial position for our society," Marchena said.
Perez said he urged the department to name his former No. 2, Jim Klindt, as the acting U.S. attorney because of the short amount of time before the election.
"When there's 18 months left," Perez said, "maybe more attention should be paid to continuity and less disruption caused by a new person coming in." "
Predatory Lending
Have you been misled, been lied too or giving false information when applying for a loan? If so, I advise you to report this and sue the crooks. Too many companies have become irresponsible in their business practices. There is a place for honesty, truth, and integrity in business. Please feel free to post information about crooked companies on this web site.
"Ameriquest Faces Lawsuit by Borrowers
by Chris Arnold
May 30, 2007 · Ameriquest was a high-flying sub-prime lender during the housing boom, and was accused of predatory lending by state prosecutors. The company now faces a class-action lawsuit from borrowers.
Chris Arnold talks to people who lost their homes after getting Ameriquest loans and to former employees who describe the hyper-aggressive sales practices.
As the nationwide real-estate boom of recent years goes bust, economists and regulators are questioning the role that mortgage lenders played in helping to create an overheated housing environment. Here, an overview of what happened:
A Rush of New Buyers
In the early 2000s, the economy was healthy, interest rates were low and consumers felt a bit flush – all of which helped push real-estate values up across the country. With values escalating, lenders felt more confident about making mortgages to customers whose poor credit histories had prevented them from buying homes in the past. (When values are rising, borrowers are less likely to default, because they can take money out of their homes if they run into trouble.)
That put more potential homebuyers in the market, helping to raise home-ownership rates to a record 69 percent in 2004 – which pushed housing prices up more. Skyrocketing prices (double-digit growth year over year was common in some areas) lured real-estate speculators, creating even more demand — and driving the cycle further.
Risky Loans Proliferated
To attract this growing pool of borrowers, lenders repurposed "creative financing" products that had previously been marketed to high-income borrowers seeking flexibility with their money. Among the most popular were variations on the adjustable-rate mortgage, or ARM.
ARMs are loans whose interest rates adjust up or down periodically. The initial rate is typically fixed for a period of two or three years. The benefit is that the starter rates are lower for ARMs than for traditional, fixed-rate mortgages. That means lower monthly payments, making homeownership more affordable and allowing borrowers to qualify for a bigger loan.
Some of the creative ARM products that flourished of late included interest-only and payment-option loans. With the former, a borrower only pays the interest on the loan — not the principal balance — during the introductory period. With payment-option ARMs, borrowers get to choose how much they pay each month: enough to cover the interest plus the principal, the interest only... or less than the interest. In that last scenario, the unpaid interest is tacked on to the principal, leaving borrowers owing more than the amount of the original loan.
How prevalent were these loans? Nearly 23 percent of all mortgages taken out in 2005 were interest-only ARMs, and more than 8 percent were payment-option ARMs, according to First American LoanPerformance. In certain once-sizzling markets, the numbers were much higher: For example, 34 percent of all new mortgages in California in 2005 were interest-only.
These products made sense to borrowers who thought they'd live in their homes for a few years, then sell at a profit or refinance. But now that housing sales have stalled and prices are softening, borrowers can't do either very easily.
And many borrowers are facing painful payment hikes: According to a First American CoreLogic study, one-third of ARMs taken out between 2004 and 2006 began with "teaser" rates below 4 percent. Payments on these loans will double on average – if they haven't already done so, says study author Dr. Christopher Cagan.
Growth in Subprime Lending
And then there were the loans to borrowers with poor credit. Subprime loans expanded to 20 percent of the mortgage market in 2006, from 9 percent a decade earlier. These loans carry higher interest rates to compensate for the risk posed by borrowers. They can be traditional fixed-rate loans, but most are ARMs, according to Susan Wachter of the University of Pennsylvania's Wharton School.
Recent subprime loans were rife with risky terms — interest-only payment options, penalties for paying off the loan early (which makes it costly to refinance into a better loan), and low documentation requirements, meaning borrowers needed little paperwork to verify that they could, in fact, afford the loans. (These so-called "liar loans" accounted for about 58 percent of all loans in 2006, according to First American LoanPerformance).
Kathleen Keest of the Center for Responsible Lending says the pairing of these new loan types and new pool of borrowers was dangerous.
"They took the riskiest of products and sold them to the weakest borrowers to compound risk," Keest says.
Unethical Practices
In the old days, most homeowners obtained mortgages from their local bank or credit union, which adhered to strict lending rules. Nowadays, the lion's share of homebuyers' business (70 percent) goes to independent mortgage brokers — some of whom get bonuses for steering borrowers to higher-interest loans.
Experts say many recent borrowers were put into ARMs that are likely to cost far more over the life of the loan than if they'd chosen a fixed-rate option. Often, consumers could have locked in fixed-rate loans at low interest rates, but lenders downplayed the advantages of these loans.
Experts also cite numerous cases where borrowers say they didn't understand the loan structure — and the escalating payments; in many cases, they couldn't really afford them. Jennie Haliburton, a 77-year-old widow in Philadelphia, told NPR she refinanced into a subprime ARM that now costs her $300 more than the $800 she was originally told she'd pay. Her loan resets in May 2008. If the current interest rate holds, the monthly payments will grow to $1,218; depending on rates, they could eventually reach almost $1,700 — 95 percent of her Social Security income.
Loose Oversight
New loan products allowed more Americans to own their own homes than ever before. But regulators exercised little oversight over the booming mortgage market. The Federal Reserve and four other federal regulators did not issue guidance for nontraditional mortgages until last year. They recommended that lending institutions consider the borrowers' ability to make payments over the life of the loan before underwriting, and that they improve disclosure to consumers.
Yet many, including Federal Reserve executive Roger T. Cole, say it was too little, too late. "Given what we know now, yes, we could have done more, sooner," Cole told Congress in March.
But the loans are already out there; all that's left is to wait for the fallout. According to First American CoreLogic, this year and next, about $260 billion in prime ARMs and $376 billion in subprime ARMs will begin to reset.
So What Now?
Several lenders are taking steps to curtail the rising tide of foreclosures. Washington Mutual plans to refinance up to $2 billion in subprime loans at below-market rates. Citigroup and Bank of America are working with an advocacy group to similarly target $1 billion in subprime mortgages, focusing on cities with high foreclosure rates. Freddie Mac is fueling the market with a commitment to buy up to $20 billion in subprime loans, and Ohio is floating a $100 million bond issue to help troubled homeowners.
The new environment may also drive new solutions. Lenders now face falling home prices, large loan portfolios with no money down, and a home-foreclosure process that may cost them tens of thousands of dollars. Renegotiating loans -– lowering the interest rate or extending the payment period –- may be more attractive than foreclosing."
"Ameriquest Faces Lawsuit by Borrowers
by Chris Arnold
May 30, 2007 · Ameriquest was a high-flying sub-prime lender during the housing boom, and was accused of predatory lending by state prosecutors. The company now faces a class-action lawsuit from borrowers.
Chris Arnold talks to people who lost their homes after getting Ameriquest loans and to former employees who describe the hyper-aggressive sales practices.
As the nationwide real-estate boom of recent years goes bust, economists and regulators are questioning the role that mortgage lenders played in helping to create an overheated housing environment. Here, an overview of what happened:
A Rush of New Buyers
In the early 2000s, the economy was healthy, interest rates were low and consumers felt a bit flush – all of which helped push real-estate values up across the country. With values escalating, lenders felt more confident about making mortgages to customers whose poor credit histories had prevented them from buying homes in the past. (When values are rising, borrowers are less likely to default, because they can take money out of their homes if they run into trouble.)
That put more potential homebuyers in the market, helping to raise home-ownership rates to a record 69 percent in 2004 – which pushed housing prices up more. Skyrocketing prices (double-digit growth year over year was common in some areas) lured real-estate speculators, creating even more demand — and driving the cycle further.
Risky Loans Proliferated
To attract this growing pool of borrowers, lenders repurposed "creative financing" products that had previously been marketed to high-income borrowers seeking flexibility with their money. Among the most popular were variations on the adjustable-rate mortgage, or ARM.
ARMs are loans whose interest rates adjust up or down periodically. The initial rate is typically fixed for a period of two or three years. The benefit is that the starter rates are lower for ARMs than for traditional, fixed-rate mortgages. That means lower monthly payments, making homeownership more affordable and allowing borrowers to qualify for a bigger loan.
Some of the creative ARM products that flourished of late included interest-only and payment-option loans. With the former, a borrower only pays the interest on the loan — not the principal balance — during the introductory period. With payment-option ARMs, borrowers get to choose how much they pay each month: enough to cover the interest plus the principal, the interest only... or less than the interest. In that last scenario, the unpaid interest is tacked on to the principal, leaving borrowers owing more than the amount of the original loan.
How prevalent were these loans? Nearly 23 percent of all mortgages taken out in 2005 were interest-only ARMs, and more than 8 percent were payment-option ARMs, according to First American LoanPerformance. In certain once-sizzling markets, the numbers were much higher: For example, 34 percent of all new mortgages in California in 2005 were interest-only.
These products made sense to borrowers who thought they'd live in their homes for a few years, then sell at a profit or refinance. But now that housing sales have stalled and prices are softening, borrowers can't do either very easily.
And many borrowers are facing painful payment hikes: According to a First American CoreLogic study, one-third of ARMs taken out between 2004 and 2006 began with "teaser" rates below 4 percent. Payments on these loans will double on average – if they haven't already done so, says study author Dr. Christopher Cagan.
Growth in Subprime Lending
And then there were the loans to borrowers with poor credit. Subprime loans expanded to 20 percent of the mortgage market in 2006, from 9 percent a decade earlier. These loans carry higher interest rates to compensate for the risk posed by borrowers. They can be traditional fixed-rate loans, but most are ARMs, according to Susan Wachter of the University of Pennsylvania's Wharton School.
Recent subprime loans were rife with risky terms — interest-only payment options, penalties for paying off the loan early (which makes it costly to refinance into a better loan), and low documentation requirements, meaning borrowers needed little paperwork to verify that they could, in fact, afford the loans. (These so-called "liar loans" accounted for about 58 percent of all loans in 2006, according to First American LoanPerformance).
Kathleen Keest of the Center for Responsible Lending says the pairing of these new loan types and new pool of borrowers was dangerous.
"They took the riskiest of products and sold them to the weakest borrowers to compound risk," Keest says.
Unethical Practices
In the old days, most homeowners obtained mortgages from their local bank or credit union, which adhered to strict lending rules. Nowadays, the lion's share of homebuyers' business (70 percent) goes to independent mortgage brokers — some of whom get bonuses for steering borrowers to higher-interest loans.
Experts say many recent borrowers were put into ARMs that are likely to cost far more over the life of the loan than if they'd chosen a fixed-rate option. Often, consumers could have locked in fixed-rate loans at low interest rates, but lenders downplayed the advantages of these loans.
Experts also cite numerous cases where borrowers say they didn't understand the loan structure — and the escalating payments; in many cases, they couldn't really afford them. Jennie Haliburton, a 77-year-old widow in Philadelphia, told NPR she refinanced into a subprime ARM that now costs her $300 more than the $800 she was originally told she'd pay. Her loan resets in May 2008. If the current interest rate holds, the monthly payments will grow to $1,218; depending on rates, they could eventually reach almost $1,700 — 95 percent of her Social Security income.
Loose Oversight
New loan products allowed more Americans to own their own homes than ever before. But regulators exercised little oversight over the booming mortgage market. The Federal Reserve and four other federal regulators did not issue guidance for nontraditional mortgages until last year. They recommended that lending institutions consider the borrowers' ability to make payments over the life of the loan before underwriting, and that they improve disclosure to consumers.
Yet many, including Federal Reserve executive Roger T. Cole, say it was too little, too late. "Given what we know now, yes, we could have done more, sooner," Cole told Congress in March.
But the loans are already out there; all that's left is to wait for the fallout. According to First American CoreLogic, this year and next, about $260 billion in prime ARMs and $376 billion in subprime ARMs will begin to reset.
So What Now?
Several lenders are taking steps to curtail the rising tide of foreclosures. Washington Mutual plans to refinance up to $2 billion in subprime loans at below-market rates. Citigroup and Bank of America are working with an advocacy group to similarly target $1 billion in subprime mortgages, focusing on cities with high foreclosure rates. Freddie Mac is fueling the market with a commitment to buy up to $20 billion in subprime loans, and Ohio is floating a $100 million bond issue to help troubled homeowners.
The new environment may also drive new solutions. Lenders now face falling home prices, large loan portfolios with no money down, and a home-foreclosure process that may cost them tens of thousands of dollars. Renegotiating loans -– lowering the interest rate or extending the payment period –- may be more attractive than foreclosing."
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