"Nadya Suleman may need government financial assistance to have and raise her children.
But she doesn’t need Salma Hayek’s milk.
“I’ve got enough” she told TMZ cameramen this week when they jokingly asked her about letting the actress donate her milk, the way she did for a starving baby in Africa recently.
So does Nadya still want a reality TV show?
“No, that’s exploitation of my kids.”
But she tells TMZ pappers that she will have help to go get eight new cribs, she needs a bigger house, and she doesn’t think a Hummer is gonna be big enough for her enlarged family.
Crying out, 'I’m not a celebrity,' Suleman insists she is not a fan of Angelina Jolie 'or anybody' and doesn't 'put people on a pedestal,' as she covers her lips, er, face, while answering all the paps' questions just like a real attention-seeking celebrity missile.
Hmmm. We think she doth protest too much. You?
Related Nadya Suleman news:"
Friday, February 27, 2009
Alarm company: Um, sir? Your house is on fire
A Connecticut man was so engrossed with the tunes on his iPod that he didn't realize his house was on fire — until his alarm company called.
Pomfret Assistant Fire Chief Edward Bates says Andrew Riley told him he was listening to music Thursday afternoon when the blaze broke out on the upper floor of his 2 1/2-story house.
Bates says Riley didn't smell smoke or hear the smoke alarm going off.
After receiving the call, Riley dashed upstairs and shut a door to the burning room.
Firefighters arrived on the scene and quickly put out the blaze. The damage was limited to the exercise room and an adjoining office.
A fire marshal blamed the fire on an electrical malfunction in the exercise room."
Pomfret Assistant Fire Chief Edward Bates says Andrew Riley told him he was listening to music Thursday afternoon when the blaze broke out on the upper floor of his 2 1/2-story house.
Bates says Riley didn't smell smoke or hear the smoke alarm going off.
After receiving the call, Riley dashed upstairs and shut a door to the burning room.
Firefighters arrived on the scene and quickly put out the blaze. The damage was limited to the exercise room and an adjoining office.
A fire marshal blamed the fire on an electrical malfunction in the exercise room."
Mich. man pleads no contest in vacuum sex act case
A man has pleaded no contest to indecent exposure after police said he was arrested for performing a sex act with a car wash vacuum. The Saginaw News reported 29-year-old Jason Leroy Savage entered the plea Wednesday in Saginaw County Circuit Court. A no-contest plea is not an admission of guilt but will be treated as one at sentencing on March 25.
Police said Savage was arrested after a resident called officers early on Oct. 16 to report suspicious activity at a car wash in Thomas Township, about 90 miles northwest of Detroit.
Defense attorney Philip Alexander Sturtz had no immediate comment Thursday."
Police said Savage was arrested after a resident called officers early on Oct. 16 to report suspicious activity at a car wash in Thomas Township, about 90 miles northwest of Detroit.
Defense attorney Philip Alexander Sturtz had no immediate comment Thursday."
Big banks damaging 'mainstream' - Business First of Buffalo:
Salvatore Marranca is outraged.
The Southern Tier banker says his little Cattaraugus County Bank and thousands of other small U.S. banks are being punished for what a few big institutions did.
“Mainstream banks, which is what the 5,000 banks like us call ourselves, continue to be pummeled for the sins of Wall Street,” Marranca said.
“It’s very frustrating when we have to pay for the bad things other people are doing. We didn’t cause today’s problems and are willing to be part of a solution, but don’t penalize us in the process,” he said.
As the U.S. government tries to reverse the current economic free-fall, hoped-for solutions are being enacted that Marranca says will cost all institutions, not just the giants such as Citigroup, Bank of America and the others that are accused of taking unnecessary risks, bypassing or breaking the rules and contributing to the deepening and darkening recession.
At a Washington, D.C., meeting today, banks expect to learn more about the price they will have to pay. It will come in the form of a special assessment on top of higher insurance premiums that the Federal Deposit Insurance Corp. will impose.
This year, Cattaraugus County Bank already has budgeted $100,000 more for insurance premiums than the $40,000 to $50,000 it paid in 2008, Marranca said. But on top of that, the FDIC is expected to impose a one-time special assessment that could cost the bank as much as $26,000 in the second quarter.
The special charge and higher premiums are meant to bolster federal reserves and cover losses from accelerating bank failures. In a worst case scenario, the Deposit Insurance Fund could be nearly exhausted by yearend, some industry experts say.
Though the higher mandated costs are not expected to affect Cattaraugus County Bank’s lending ability, Marranca said “they will mean less money to make capital improvements and for growth, less money to spend on either higher deposit returns or lower loan rates - less money to flow into capital.
“It’s a tremendously significant increase for us,” said Marranca, who served as an FDIC bank examiner for 14 years before becoming president of Cattaraugus County Bank in 1982.
The Southern Tier banker says his little Cattaraugus County Bank and thousands of other small U.S. banks are being punished for what a few big institutions did.
“Mainstream banks, which is what the 5,000 banks like us call ourselves, continue to be pummeled for the sins of Wall Street,” Marranca said.
“It’s very frustrating when we have to pay for the bad things other people are doing. We didn’t cause today’s problems and are willing to be part of a solution, but don’t penalize us in the process,” he said.
As the U.S. government tries to reverse the current economic free-fall, hoped-for solutions are being enacted that Marranca says will cost all institutions, not just the giants such as Citigroup, Bank of America and the others that are accused of taking unnecessary risks, bypassing or breaking the rules and contributing to the deepening and darkening recession.
At a Washington, D.C., meeting today, banks expect to learn more about the price they will have to pay. It will come in the form of a special assessment on top of higher insurance premiums that the Federal Deposit Insurance Corp. will impose.
This year, Cattaraugus County Bank already has budgeted $100,000 more for insurance premiums than the $40,000 to $50,000 it paid in 2008, Marranca said. But on top of that, the FDIC is expected to impose a one-time special assessment that could cost the bank as much as $26,000 in the second quarter.
The special charge and higher premiums are meant to bolster federal reserves and cover losses from accelerating bank failures. In a worst case scenario, the Deposit Insurance Fund could be nearly exhausted by yearend, some industry experts say.
Though the higher mandated costs are not expected to affect Cattaraugus County Bank’s lending ability, Marranca said “they will mean less money to make capital improvements and for growth, less money to spend on either higher deposit returns or lower loan rates - less money to flow into capital.
“It’s a tremendously significant increase for us,” said Marranca, who served as an FDIC bank examiner for 14 years before becoming president of Cattaraugus County Bank in 1982.
OctoMom Turns Down Free House Offer | Hollyscoop
OctoMom Nadya Suleman has officially lost her marbles! She turned down an offer by a non-profit charity group called Angels In Waiting to provide her with a temporary new home for six months. "Angels" had also offered to provide around the clock individualized care by pediatric nurses and other early intervention professionals for her octuplets and their six other siblings, reports Radaronline.com.
Why she wouldn't accept the offer is beyond us. She's about to lose her home, she has no set income, no job and Child Services isn't even sure they'll allow her to take her octopulets home because she doesn’t have a stable environment.
L.A. attorney Gloria Allred and "Angels in Waiting" founder, Linda West-Conforti, are expected to hold a press conference later today and describe in detail disturbing conversations with Nadya and why they believe that she was not willing to accept their offer. Maybe she turned down the offer because she's considering going into porn?!
At this point, she really wouldn't surprise us if she did. Stay tuned!
Why she wouldn't accept the offer is beyond us. She's about to lose her home, she has no set income, no job and Child Services isn't even sure they'll allow her to take her octopulets home because she doesn’t have a stable environment.
L.A. attorney Gloria Allred and "Angels in Waiting" founder, Linda West-Conforti, are expected to hold a press conference later today and describe in detail disturbing conversations with Nadya and why they believe that she was not willing to accept their offer. Maybe she turned down the offer because she's considering going into porn?!
At this point, she really wouldn't surprise us if she did. Stay tuned!
Thursday, February 26, 2009
Porn Plot: Vivid's Sordid Plans for Nadya 'Octomom' Suleman
You may want to take a shower after reading this.
Vivid Entertainment has offered Nadya 'Octomom' Suleman $1 million to star in a pornographic video. Now Tarts has learned the disgusting details of what they want Octomom to do.
They want Suleman, who gave birth to octuplets in January, to have sex in eight different scenes with eight different men.
'The number eight is obviously heavily associated with her so we would like to work with that,' Vivid’s CEO Stephen Hirsch told Tarts. 'But we would really love just to sit down and talk with her and come up with something she feels comfortable with. We want her to be involved with the whole thing from the plot line to the packaging.'
Hirsch says Suleman has received their offer and is considering it. Suleman did not return calls for comment.
'She’s struggling financially and this is a woman who wants to provide for her kids,' Hirsch said. 'This way she can hold her head high and not be using taxpayers money to support her family.'
However, the New York Post's Cindy Adams is reporting that Octomom has been looking at $1 million houses in the Los Angeles area.
So maybe - let's all pray - she doesn't need the money.
UPDATE: Octomom is keeping her clothes on! 'Those guys at Vivid video must be nuts!' she told Radaronline.com. ' Who wants to see me naked? Maybe in a year when the baby fat goes away.' Tarts think she's kidding...?"
Vivid Entertainment has offered Nadya 'Octomom' Suleman $1 million to star in a pornographic video. Now Tarts has learned the disgusting details of what they want Octomom to do.
They want Suleman, who gave birth to octuplets in January, to have sex in eight different scenes with eight different men.
'The number eight is obviously heavily associated with her so we would like to work with that,' Vivid’s CEO Stephen Hirsch told Tarts. 'But we would really love just to sit down and talk with her and come up with something she feels comfortable with. We want her to be involved with the whole thing from the plot line to the packaging.'
Hirsch says Suleman has received their offer and is considering it. Suleman did not return calls for comment.
'She’s struggling financially and this is a woman who wants to provide for her kids,' Hirsch said. 'This way she can hold her head high and not be using taxpayers money to support her family.'
However, the New York Post's Cindy Adams is reporting that Octomom has been looking at $1 million houses in the Los Angeles area.
So maybe - let's all pray - she doesn't need the money.
UPDATE: Octomom is keeping her clothes on! 'Those guys at Vivid video must be nuts!' she told Radaronline.com. ' Who wants to see me naked? Maybe in a year when the baby fat goes away.' Tarts think she's kidding...?"
Wednesday, February 25, 2009
$65 Billion spent on fighter jets that have not seen battle.
The Air Force tries to save a fighter plane that's never seen battle.
F-22A Raptor In the next few weeks, on into the spring and beyond, the U.S. Air Force is likely to wage one of the most ferocious battles it has seen in decades, a fight that many of its generals regard as a life-or-death struggle—a war to save the F-22 Raptor fighter plane.
The skirmishes began a little more than a year ago, when Secretary of Defense Robert Gates announced that he was halting the plane's production. The nation had already bought 187 of them, at a total cost of $65 billion (nearly $350 million apiece), and that was more than enough.
Exhibit A was the plane's own combat record—or, rather, its lack of one. Not a single Air Force commander has sent a single F-22 into harm's way in any of the wars the United States has fought these past few years. Designed during the Cold War for air-to-air combat against the Soviet air force over the battlefield of Europe, the plane seems ill-suited—either overdesigned or simply useless—for any wars we're likely to fight in the coming decade or so.
But the Air Force brass is dominated by fighter pilots who still see air-to-air combat as the service's main mission; they took Gates' declaration as fighting words, and they fought back. They wanted 381 F-22s, and a couple of high-ranking officers told industry journals that they would continue to demand 381. The secretary's decision, they said, was "wrong."
Gen. Norton Schwartz, recently named the Air Force chief of staff, has reportedly scaled back the request, saying he would settle for an additional 60 planes—bringing the total to 247—to be purchased over the next three years. Schwartz may be sincere; he is the first chief in the Air Force's 62-year history who has never been a fighter pilot. Since the plane has long been produced at a rate of 20 per year, however, many skeptics—and several Air Force officers—see the chief's offer not as a compromise but as a foot in the door.
Meanwhile, Lockheed Martin, the plane's main contractor, has threatened to start shutting down production — and laying off workers — on March 1 unless the Obama administration commits to buying more planes.
(One senior Pentagon official says this deadline is a bluff. In any case, though President Obama will issue the fiscal year 2010 budget on Feb. 26, the document will state only the "top-line" numbers for each department; the details—not just for the F-22, but for all programs, defense and otherwise—won't be released, or in many cases decided, until April.)
F-22A Raptor In the next few weeks, on into the spring and beyond, the U.S. Air Force is likely to wage one of the most ferocious battles it has seen in decades, a fight that many of its generals regard as a life-or-death struggle—a war to save the F-22 Raptor fighter plane.
The skirmishes began a little more than a year ago, when Secretary of Defense Robert Gates announced that he was halting the plane's production. The nation had already bought 187 of them, at a total cost of $65 billion (nearly $350 million apiece), and that was more than enough.
Exhibit A was the plane's own combat record—or, rather, its lack of one. Not a single Air Force commander has sent a single F-22 into harm's way in any of the wars the United States has fought these past few years. Designed during the Cold War for air-to-air combat against the Soviet air force over the battlefield of Europe, the plane seems ill-suited—either overdesigned or simply useless—for any wars we're likely to fight in the coming decade or so.
But the Air Force brass is dominated by fighter pilots who still see air-to-air combat as the service's main mission; they took Gates' declaration as fighting words, and they fought back. They wanted 381 F-22s, and a couple of high-ranking officers told industry journals that they would continue to demand 381. The secretary's decision, they said, was "wrong."
Gen. Norton Schwartz, recently named the Air Force chief of staff, has reportedly scaled back the request, saying he would settle for an additional 60 planes—bringing the total to 247—to be purchased over the next three years. Schwartz may be sincere; he is the first chief in the Air Force's 62-year history who has never been a fighter pilot. Since the plane has long been produced at a rate of 20 per year, however, many skeptics—and several Air Force officers—see the chief's offer not as a compromise but as a foot in the door.
Meanwhile, Lockheed Martin, the plane's main contractor, has threatened to start shutting down production — and laying off workers — on March 1 unless the Obama administration commits to buying more planes.
(One senior Pentagon official says this deadline is a bluff. In any case, though President Obama will issue the fiscal year 2010 budget on Feb. 26, the document will state only the "top-line" numbers for each department; the details—not just for the F-22, but for all programs, defense and otherwise—won't be released, or in many cases decided, until April.)
Let's see how badly she needs the money!!!!
"Vivid Entertainment has made a $1 million offer to Nadya Suleman to make a pornographic video.
In an offer letter obtained by TMZ.com, the president of the pornography studio and distributor Steven Hirsch says the company would release the film under their 'Vivid-Celeb imprint, which has released titles starring such personalities as Pamela Anderson, Kim Kardashian, and most recently, former Miss USA Kelli MCarty.'
The site also reports that the company is offering her family dental and health care if she agrees to star in a series of films.
Suleman, 33, known as 'Octomom' after giving birth to octuplets earlier this year, has reportedly not replied to the request."
In an offer letter obtained by TMZ.com, the president of the pornography studio and distributor Steven Hirsch says the company would release the film under their 'Vivid-Celeb imprint, which has released titles starring such personalities as Pamela Anderson, Kim Kardashian, and most recently, former Miss USA Kelli MCarty.'
The site also reports that the company is offering her family dental and health care if she agrees to star in a series of films.
Suleman, 33, known as 'Octomom' after giving birth to octuplets earlier this year, has reportedly not replied to the request."
Gov't says 'mass layoffs' soared in January
WASHINGTON – Employers took a large ax to their payrolls in January, the government said Wednesday, and the cuts are likely to get worse over the next few months.
The Labor Department reported that mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50 percent from the same month last year. More than 235,000 workers were fired in last month's cuts.
January was a bad month for the labor market. Companies from a wide range of sectors announced tens of thousands of layoffs, including Home Depot Inc., Boeing Co., Pfizer Inc. and Caterpillar Inc.
Not all of those cuts were reflected in the government's mass layoffs report, which counts actual firings as reported by laid-off workers seeking unemployment benefits. Many of the layoffs announced in January will take place over time, meaning that the department's mass layoff figures will likely keep increasing.
The pain continued Wednesday. The NFL said commissioner Roger Goodell has taken a 20 percent pay cut and the league dropped 169 jobs through buyouts, layoffs and other reductions. Spartanburg, S.C.-based textile maker Milliken & Co. said it would cut 650 jobs at facilities worldwide and jeweler Zale Corp. said it will close 115 stores and eliminate 245 positions.
On Monday, troubled flash memory maker Spansion Inc. said it will lay off about 3,000 employees and computer chip maker Micron Technology Inc. announced it will slash as many as 2,000 workers by the end of August.
In a bit of positive news for the job market, consulting firm Watson Wyatt said Wednesday that the number of large employers planning layoffs has dropped since December, according to a survey it conducted of 245 companies last week.
The survey found that the proportion of corporations expecting to cut jobs has dropped to 13 percent from 23 percent. But more companies are considering other cost savings, such as increasing health care premiums, eliminating employee benefits like tuition reimbursement, and reducing matching payments for 401(k)-style retirement plans.
The number of layoffs last month actually declined slightly from December on a seasonally adjusted basis, the Labor Department said. But the figures were uglier without the seasonal adjustment: mass layoffs jumped to 3,806, from 3,377 in December and 1,647 in January 2008.
The government seasonally adjusts many economic indicators to smooth out fluctuations resulting from weather changes, holidays and other predictable factors.
Eleven industries — including mining, manufacturing, transportation and financial services — in January reported the highest levels of job losses on government records dating back to 1996.
The department said earlier this month that employers cut nearly 600,000 jobs in January, the biggest loss since 1974. That sent the unemployment rate to 7.6 percent, the highest in 16 years. Since the recession began in December 2007, companies have cut a net total of nearly 3.6 million jobs.
Mass layoffs rose sharply last year to more than 21,000, from about 15,000 in 2007, the department said in January. More than 2.1 million workers lost their jobs last year due to those reductions.
The Labor Department reported that mass layoffs, or job cuts of 50 or more by a single employer, increased to 2,227 in January, up almost 50 percent from the same month last year. More than 235,000 workers were fired in last month's cuts.
January was a bad month for the labor market. Companies from a wide range of sectors announced tens of thousands of layoffs, including Home Depot Inc., Boeing Co., Pfizer Inc. and Caterpillar Inc.
Not all of those cuts were reflected in the government's mass layoffs report, which counts actual firings as reported by laid-off workers seeking unemployment benefits. Many of the layoffs announced in January will take place over time, meaning that the department's mass layoff figures will likely keep increasing.
The pain continued Wednesday. The NFL said commissioner Roger Goodell has taken a 20 percent pay cut and the league dropped 169 jobs through buyouts, layoffs and other reductions. Spartanburg, S.C.-based textile maker Milliken & Co. said it would cut 650 jobs at facilities worldwide and jeweler Zale Corp. said it will close 115 stores and eliminate 245 positions.
On Monday, troubled flash memory maker Spansion Inc. said it will lay off about 3,000 employees and computer chip maker Micron Technology Inc. announced it will slash as many as 2,000 workers by the end of August.
In a bit of positive news for the job market, consulting firm Watson Wyatt said Wednesday that the number of large employers planning layoffs has dropped since December, according to a survey it conducted of 245 companies last week.
The survey found that the proportion of corporations expecting to cut jobs has dropped to 13 percent from 23 percent. But more companies are considering other cost savings, such as increasing health care premiums, eliminating employee benefits like tuition reimbursement, and reducing matching payments for 401(k)-style retirement plans.
The number of layoffs last month actually declined slightly from December on a seasonally adjusted basis, the Labor Department said. But the figures were uglier without the seasonal adjustment: mass layoffs jumped to 3,806, from 3,377 in December and 1,647 in January 2008.
The government seasonally adjusts many economic indicators to smooth out fluctuations resulting from weather changes, holidays and other predictable factors.
Eleven industries — including mining, manufacturing, transportation and financial services — in January reported the highest levels of job losses on government records dating back to 1996.
The department said earlier this month that employers cut nearly 600,000 jobs in January, the biggest loss since 1974. That sent the unemployment rate to 7.6 percent, the highest in 16 years. Since the recession began in December 2007, companies have cut a net total of nearly 3.6 million jobs.
Mass layoffs rose sharply last year to more than 21,000, from about 15,000 in 2007, the department said in January. More than 2.1 million workers lost their jobs last year due to those reductions.
Monday, February 23, 2009
DA: Boy who shot father's pregnant girlfriend was jealous - Pittsburgh Tribune-Review
An 11-year-old boy accused of fatally shooting his father's pregnant girlfriend was having trouble adjusting to his new family, Lawrence County District Attorney John Bongivengo said this morning.
Jordan Anthony Brown was "the center of attention in his father's life" until recently, when Kenzie Marie Houk, 26, moved into the Brown family farmhouse in Wampum with her daughters, ages 7 and 4. Houk was due to give birth to a baby boy the first week of March, Bongivengo said.
"This child was the center of everything for a very long time, and suddenly there's a girlfriend and other children in the house and another son on the way," Bongivengo said. "So he was no longer the center of things. We're looking into reports that he might have made threats to the girlfriend before and was very jealous of her."
Bongivengo described the slaying as "callous, cold and calculating."
The victim's 7-year-old daughter is the "main witness" in the case, Bongivengo said. The girl told authorities that Brown came downstairs early Friday morning holding two guns. She asked him what he was doing and he ran back upstairs, Bongivengo said. Brown then came back downstairs holding a shotgun covered with a blanket.
The boy walked into a room where Houk was lying down, put a 20-gauge shotgun to the back of her head and fired one time, Bongivengo said. He then ran back upstairs, put away the gun — a Christmas present from his father — and walked outside to catch the school bus, the prosecutor said.
While walking down the long driveway to the bus, the girl saw him casually toss something from his pocket to the ground, Bongivengo said.
"It was a spent 20-gauge shotgun shell," Bongivengo said. "The boy then got onto the bus and went to school like nothing ever happened."
The victim's younger daughter found her mother's body. When Brown was questioned by police, he at first said he saw a black truck parked near the family's garage behind the house when he was leaving for school.
His description of the truck changed several times and the boy told police he thought the vehicle belonged to a man who comes to feed the cows housed on the property.
But police talked to the man who owns the home — Brown's father rents the house — who said the man who feeds the livestock drives a white truck and comes in the afternoon.
Defense lawyer Dennis Elisco said the boy has not confessed to the shooting, and he doesn't believe the physical evidence will support the police contention that the boy killed Houk execution-style, with one shot to the back of her head. Bongivengo said the child knew how to load and handle a shotgun and recently won a turkey shooting contest in Lawrence County.
"This child was comfortable with guns, and he knew what he was doing with them," Bongivengo said. "In this area, in Lawrence County, it's not unusual for a boy that age to have a gun and know how to shoot it. This is a hunting and fishing community."
Bongivengo said he plans to move forward with plans to try the child as an adult and the judge assigned to his case will make the final decision on whether the boy is instead charged in juvenile court.
Bongivengo said Brown is being housed in the Lawrence County Jail but the district attorney's office is looking into possibly moving the boy to another county jail in the state which "might have more experience than we do in dealing with juveniles who are charged as adults."
Pennsylvania law allows prosecutors to charge children as young as 10 with criminal homicide. Elisco planned to file motions today asking a judge to move the case to juvenile court and let the boy's father post bail.
"I don't think anybody wants him there," Elisco said, referring to the county jail.
Until a judge hears his motions, Elisco hopes to get the fifth-grader's school to send him assignments in jail.
"I want him to be occupied and busy and back, essentially, in school," Elisco said. "I wouldn't say he's in good spirits. He's confused. He looks and acts like a typical 11-year-old."
Jordan Anthony Brown was "the center of attention in his father's life" until recently, when Kenzie Marie Houk, 26, moved into the Brown family farmhouse in Wampum with her daughters, ages 7 and 4. Houk was due to give birth to a baby boy the first week of March, Bongivengo said.
"This child was the center of everything for a very long time, and suddenly there's a girlfriend and other children in the house and another son on the way," Bongivengo said. "So he was no longer the center of things. We're looking into reports that he might have made threats to the girlfriend before and was very jealous of her."
Bongivengo described the slaying as "callous, cold and calculating."
The victim's 7-year-old daughter is the "main witness" in the case, Bongivengo said. The girl told authorities that Brown came downstairs early Friday morning holding two guns. She asked him what he was doing and he ran back upstairs, Bongivengo said. Brown then came back downstairs holding a shotgun covered with a blanket.
The boy walked into a room where Houk was lying down, put a 20-gauge shotgun to the back of her head and fired one time, Bongivengo said. He then ran back upstairs, put away the gun — a Christmas present from his father — and walked outside to catch the school bus, the prosecutor said.
While walking down the long driveway to the bus, the girl saw him casually toss something from his pocket to the ground, Bongivengo said.
"It was a spent 20-gauge shotgun shell," Bongivengo said. "The boy then got onto the bus and went to school like nothing ever happened."
The victim's younger daughter found her mother's body. When Brown was questioned by police, he at first said he saw a black truck parked near the family's garage behind the house when he was leaving for school.
His description of the truck changed several times and the boy told police he thought the vehicle belonged to a man who comes to feed the cows housed on the property.
But police talked to the man who owns the home — Brown's father rents the house — who said the man who feeds the livestock drives a white truck and comes in the afternoon.
Defense lawyer Dennis Elisco said the boy has not confessed to the shooting, and he doesn't believe the physical evidence will support the police contention that the boy killed Houk execution-style, with one shot to the back of her head. Bongivengo said the child knew how to load and handle a shotgun and recently won a turkey shooting contest in Lawrence County.
"This child was comfortable with guns, and he knew what he was doing with them," Bongivengo said. "In this area, in Lawrence County, it's not unusual for a boy that age to have a gun and know how to shoot it. This is a hunting and fishing community."
Bongivengo said he plans to move forward with plans to try the child as an adult and the judge assigned to his case will make the final decision on whether the boy is instead charged in juvenile court.
Bongivengo said Brown is being housed in the Lawrence County Jail but the district attorney's office is looking into possibly moving the boy to another county jail in the state which "might have more experience than we do in dealing with juveniles who are charged as adults."
Pennsylvania law allows prosecutors to charge children as young as 10 with criminal homicide. Elisco planned to file motions today asking a judge to move the case to juvenile court and let the boy's father post bail.
"I don't think anybody wants him there," Elisco said, referring to the county jail.
Until a judge hears his motions, Elisco hopes to get the fifth-grader's school to send him assignments in jail.
"I want him to be occupied and busy and back, essentially, in school," Elisco said. "I wouldn't say he's in good spirits. He's confused. He looks and acts like a typical 11-year-old."
Friday, February 20, 2009
Dow slides to new 6-year lows, led by financials
NEW YORK – Stocks extended their slide Friday, leading a worldwide rout as investors lost even more confidence in the ability of U.S. banks to right themselves.
Investors again pummeled the shares of financial bellwethers Citigroup Inc. and Bank of America Corp. on worries that the government will have to nationalize some banks and wipe out shareholders in the process. Citigroup fell 25 percent, while Bank of America fell 19 percent in afternoon trading.
Poor earnings reports from Lowe's Cos., a major home improvement retailer, and department store chain J.C. Penney Co. gave the latest stark indicator of trouble in the broader economy.
The Dow Jones industrials fell 164.32, or 2.20 percent, to 7,301.63. On Thursday, the Dow closed at its lowest level since Oct. 9, 2002, the depths of the last bear market.
In afternoon trading Friday the Standard & Poor's 500 index fell 18.48, or 2.37 percent, to 760.46. The benchmark most watched by traders hovered near its Nov. 20 close of 752.44 but remained further above its Nov. 21 trading low of 741.02.
The Nasdaq composite index fell 20.02, or 1.39 percent, to 1,422.80.
The sell-off followed steep drops in other major markets in Europe and Asia. Germany's DAX and France's CAC-40 each fell more than 4 percent, and Tokyo's Nikkei fell 1.9 percent and the Hang Seng in Hong Kong fell 2.5 percent.
Stocks have fallen steadily over the past two weeks as investors lost confidence in multiple Obama administration programs aimed at bolstering the economy. Just this week the government finalized two major initiatives, a massive fiscal stimulus package and a relief plan for homeowners.
"There's perceived disappointment from the lack of clarity from the Treasury (Department) for what it will do with the financial sector," said Wasif Latif, portfolio manager at USAA Investment Management Co. "That's hitting financials regularly."
Both Citi and Bank of America, which also got hammered on Thursday, have been among the hardest hit by the ongoing turmoil in the industry and received multiple multibillion investments from the government.
Citi shares tumbled 63 cents to $1.88 while Bank of America, which touched a 25-year low earlier in the day, sank 74 cents to $3.19.
As investors dropped out of stocks, safer instruments like Treasury debt and gold rose. The price of the benchmark 10-year Treasury note rose sharply, sending its yield down to 2.72 percent from 2.86 percent. Gold jumped 3 percent to $1,005.60 per ounce.
A pair of poor earnings reports Friday only worsened sentiment about the economy. Lowe's said fourth-quarter profit dropped 60 percent after customers cut back on spending and the company gave a full-year profit estimate that disappointed investors. Department store chain J.C. Penney said profits tumbled 51 percent.
"There's still a big fear factor syndrome," said Michael Strauss, chief economist and market strategist at Commonfund. "There is a focus on what is happening here and now instead of six months to nine months from now."
Declining issues outnumbered advancers by about nine to one on the New York Stock Exchange, where volume came to 1.19 billion shares.
The Russell 2000 index of smaller companies fell 11.21, or 2.69 percent, to 405.50.
Other world indicators also fell. Britain's FTSE 100 declined 3.2 percent, Germany's DAX index tumbled 4.8 percent, and France's CAC-40 fell 4.3 percent.
Investors again pummeled the shares of financial bellwethers Citigroup Inc. and Bank of America Corp. on worries that the government will have to nationalize some banks and wipe out shareholders in the process. Citigroup fell 25 percent, while Bank of America fell 19 percent in afternoon trading.
Poor earnings reports from Lowe's Cos., a major home improvement retailer, and department store chain J.C. Penney Co. gave the latest stark indicator of trouble in the broader economy.
The Dow Jones industrials fell 164.32, or 2.20 percent, to 7,301.63. On Thursday, the Dow closed at its lowest level since Oct. 9, 2002, the depths of the last bear market.
In afternoon trading Friday the Standard & Poor's 500 index fell 18.48, or 2.37 percent, to 760.46. The benchmark most watched by traders hovered near its Nov. 20 close of 752.44 but remained further above its Nov. 21 trading low of 741.02.
The Nasdaq composite index fell 20.02, or 1.39 percent, to 1,422.80.
The sell-off followed steep drops in other major markets in Europe and Asia. Germany's DAX and France's CAC-40 each fell more than 4 percent, and Tokyo's Nikkei fell 1.9 percent and the Hang Seng in Hong Kong fell 2.5 percent.
Stocks have fallen steadily over the past two weeks as investors lost confidence in multiple Obama administration programs aimed at bolstering the economy. Just this week the government finalized two major initiatives, a massive fiscal stimulus package and a relief plan for homeowners.
"There's perceived disappointment from the lack of clarity from the Treasury (Department) for what it will do with the financial sector," said Wasif Latif, portfolio manager at USAA Investment Management Co. "That's hitting financials regularly."
Both Citi and Bank of America, which also got hammered on Thursday, have been among the hardest hit by the ongoing turmoil in the industry and received multiple multibillion investments from the government.
Citi shares tumbled 63 cents to $1.88 while Bank of America, which touched a 25-year low earlier in the day, sank 74 cents to $3.19.
As investors dropped out of stocks, safer instruments like Treasury debt and gold rose. The price of the benchmark 10-year Treasury note rose sharply, sending its yield down to 2.72 percent from 2.86 percent. Gold jumped 3 percent to $1,005.60 per ounce.
A pair of poor earnings reports Friday only worsened sentiment about the economy. Lowe's said fourth-quarter profit dropped 60 percent after customers cut back on spending and the company gave a full-year profit estimate that disappointed investors. Department store chain J.C. Penney said profits tumbled 51 percent.
"There's still a big fear factor syndrome," said Michael Strauss, chief economist and market strategist at Commonfund. "There is a focus on what is happening here and now instead of six months to nine months from now."
Declining issues outnumbered advancers by about nine to one on the New York Stock Exchange, where volume came to 1.19 billion shares.
The Russell 2000 index of smaller companies fell 11.21, or 2.69 percent, to 405.50.
Other world indicators also fell. Britain's FTSE 100 declined 3.2 percent, Germany's DAX index tumbled 4.8 percent, and France's CAC-40 fell 4.3 percent.
Thursday, February 19, 2009
Now he can pull his pants down in jail!
Suspect trips over his pants while fleeing police
PENSACOLA, Fla. – Authorities said a burglary suspect was literally caught with his pants down while trying to run away. A deputy responded to an alarm at a convenient store early Tuesday morning and reported seeing a 37-year-old man exiting through a smashed-out front door while carrying several packs of cigarettes.
Deputies said the man tried to flee, but the handfuls of cigarettes prevented him from holding up his pants, which fell down and tripped him before he could make it out of the parking lot.
The man was charged with criminal mischief, burglary, theft and possession of drug paraphernalia. He was being held on $12,000 bail.
PENSACOLA, Fla. – Authorities said a burglary suspect was literally caught with his pants down while trying to run away. A deputy responded to an alarm at a convenient store early Tuesday morning and reported seeing a 37-year-old man exiting through a smashed-out front door while carrying several packs of cigarettes.
Deputies said the man tried to flee, but the handfuls of cigarettes prevented him from holding up his pants, which fell down and tripped him before he could make it out of the parking lot.
The man was charged with criminal mischief, burglary, theft and possession of drug paraphernalia. He was being held on $12,000 bail.
Wednesday, February 18, 2009
President Obama’s Remarks on the Homeowner Affordability and Stability Plan
President Obama’s Remarks on the Homeowner Affordability and Stability Plan
Following is the text of President Obama's remarks in Arizona, as prepared for delivery and provided by The White House.
I'm here today to talk about a crisis unlike any we've ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see "For Sale" signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they're cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.
The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.
Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
Here is how my plan works:
First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Today, as a result of declining home values, millions of families are "underwater," which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren't. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.
My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.
If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we'll make up part of the gap between what the old payments were and what the new payments will be.
And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
We're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.
My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That's the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.
Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility.
Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.
Thank you, God Bless you, and God bless America.
Following is the text of President Obama's remarks in Arizona, as prepared for delivery and provided by The White House.
I'm here today to talk about a crisis unlike any we've ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see "For Sale" signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they're cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.
The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.
Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
Here is how my plan works:
First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Today, as a result of declining home values, millions of families are "underwater," which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren't. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.
My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.
If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we'll make up part of the gap between what the old payments were and what the new payments will be.
And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
We're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.
My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That's the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.
Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility.
Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.
Thank you, God Bless you, and God bless America.
President Obama’s Remarks on the Homeowner Affordability and Stability Plan
President Obama’s Remarks on the Homeowner Affordability and Stability Plan
Following is the text of President Obama's remarks in Arizona, as prepared for delivery and provided by The White House.
I'm here today to talk about a crisis unlike any we've ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see "For Sale" signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they're cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.
The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.
Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
Here is how my plan works:
First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Today, as a result of declining home values, millions of families are "underwater," which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren't. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.
My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.
If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we'll make up part of the gap between what the old payments were and what the new payments will be.
And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
We're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.
My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That's the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.
Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility.
Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.
Thank you, God Bless you, and God bless America.
Following is the text of President Obama's remarks in Arizona, as prepared for delivery and provided by The White House.
I'm here today to talk about a crisis unlike any we've ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.
You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you've gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see "For Sale" signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they've fallen by 43 percent.
Even if your neighborhood hasn't been hit by foreclosures, you're likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they're cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.
The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.
In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that's what I want to talk about today.
The plan I'm announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.
At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.
Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.
Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.
But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by up to $6,000 per home.
Here is how my plan works:
First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.
Today, as a result of declining home values, millions of families are "underwater," which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.
Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home's worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.
My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.
I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.
Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.
Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.
Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren't. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.
My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.
If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we'll make up part of the gap between what the old payments were and what the new payments will be.
And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.
So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.
I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.
Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.
Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.
Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.
We're also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.
Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure.
My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That's the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.
In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.
Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.
Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.
So solving this crisis will require more than resources – it will require all of us to take responsibility.
Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.
These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.
It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.
Thank you, God Bless you, and God bless America.
Monday, February 16, 2009
U.S. judges admit to jailing children for money
PHILADELPHIA (Reuters) – Two judges pleaded guilty on Thursday to accepting more than $2.6 million from a private youth detention centre in Pennsylvania in return for giving hundreds of youths and teenagers long sentences.
Judges Mark Ciavarella and Michael Conahan of the Court of Common Pleas in Luzerne County, Pennsylvania, entered plea agreements in federal court in Scranton admitting that they took payoffs from PA Childcare and a sister company, Western PA Childcare, between 2003 and 2006.
"Your statement that I have disgraced my judgeship is true," Ciavarella wrote in a letter to the court. "My actions have destroyed everything I worked to accomplish and I have only myself to blame."
Conahan, who along with Ciavarella faces up to seven years in prison, did not make any comment on the case.
When someone is sent to a detention centre, the company running the facility receives money from the county government to defray the cost of incarceration. So as more children were sentenced to the detention centre, PA Childcare and Western PA Childcare received more money from the government, prosecutors said.
Teenagers who came before Ciavarella in juvenile court often were sentenced to detention centres for minor offences that would typically have been classified as misdemeanours, according to the Juvenile Law Centre, a Philadelphia nonprofit group.
One 17-year-old boy was sentenced to three months' detention for being in the company of another minor caught shoplifting.
Others were given similar sentences for "simple assault" resulting from a schoolyard scuffle that would normally draw a warning, a spokeswoman for the Juvenile Law Centre said.
The Constitution guarantees the right to legal representation in U.S. courts. But many of the juveniles appeared before Ciavarella without an attorney because they were told by the probation service that their minor offences didn't require one.
Marsha Levick, chief counsel for the Juvenile Law Centre, estimated that of approximately 5,000 juveniles who came before Ciavarella from 2003 and 2006, between 1,000 and 2,000 received excessively harsh detention sentences. She said the centre will sue the judges, PA Childcare and Western PA Childcare for financial compensation for their victims.
"That judges would allow their greed to trump the rights of defendants is just obscene," Levick said.
The judges attempted to hide their income from the scheme by creating false records and routing payments through intermediaries, prosecutors said.
The Pennsylvania Supreme Court removed Ciavarella and Conahan from their duties after federal prosecutors filed charges on January 26. The court has also appointed a judge to review all the cases involved.
Judges Mark Ciavarella and Michael Conahan of the Court of Common Pleas in Luzerne County, Pennsylvania, entered plea agreements in federal court in Scranton admitting that they took payoffs from PA Childcare and a sister company, Western PA Childcare, between 2003 and 2006.
"Your statement that I have disgraced my judgeship is true," Ciavarella wrote in a letter to the court. "My actions have destroyed everything I worked to accomplish and I have only myself to blame."
Conahan, who along with Ciavarella faces up to seven years in prison, did not make any comment on the case.
When someone is sent to a detention centre, the company running the facility receives money from the county government to defray the cost of incarceration. So as more children were sentenced to the detention centre, PA Childcare and Western PA Childcare received more money from the government, prosecutors said.
Teenagers who came before Ciavarella in juvenile court often were sentenced to detention centres for minor offences that would typically have been classified as misdemeanours, according to the Juvenile Law Centre, a Philadelphia nonprofit group.
One 17-year-old boy was sentenced to three months' detention for being in the company of another minor caught shoplifting.
Others were given similar sentences for "simple assault" resulting from a schoolyard scuffle that would normally draw a warning, a spokeswoman for the Juvenile Law Centre said.
The Constitution guarantees the right to legal representation in U.S. courts. But many of the juveniles appeared before Ciavarella without an attorney because they were told by the probation service that their minor offences didn't require one.
Marsha Levick, chief counsel for the Juvenile Law Centre, estimated that of approximately 5,000 juveniles who came before Ciavarella from 2003 and 2006, between 1,000 and 2,000 received excessively harsh detention sentences. She said the centre will sue the judges, PA Childcare and Western PA Childcare for financial compensation for their victims.
"That judges would allow their greed to trump the rights of defendants is just obscene," Levick said.
The judges attempted to hide their income from the scheme by creating false records and routing payments through intermediaries, prosecutors said.
The Pennsylvania Supreme Court removed Ciavarella and Conahan from their duties after federal prosecutors filed charges on January 26. The court has also appointed a judge to review all the cases involved.
Schoolboy father: Alfie Patten 'distraught' at claims Maisie not his
Nicola Patten, 43, the 13-year-old's mother, said he had not doubted the paternity of the week-old child until now.
But on Sunday two boys, aged 14 and 16, both claimed they could be the father of 15-year-old Chantelle Steadman's daughter.
Several others have also claimed to have had a sexual relationship with the schoolgirl, from Eastbourne in Sussex.
Mrs Patten told The Mirror: "He's absolutely devastated these lads have come forward to say they slept with her at the time she got pregnant. Everything is wrong.
"Now that is in his mind and I'm not happy. I don't know where they get this from. I mean, that's my son, that's his baby.
"Alfie is distraught and upset about everything. But Maisie is fine."
The Patten family have now accepted that a DNA test is needed to confirm the paternity.
Max Clifford, the publicist who is representing Alfie and his family, said: "Nicola has agreed that DNA tests are the best way to resolve the issue of paternity.
"It is inevitable there are going to be doubts, particularly with the number of boys who've come forward claiming to have had sex with Chantelle.
"There is one boy in particular who does seem to have a stronger resemblance to the child."
It was reported last week that Alfie was the youngest father in Britain following the birth of Maisie, who was conceived when Alfie was 12-years-old.
Politicians including David Cameron spoke about the situation, and said it raised "worrying" questions about modern society.
It was disclosed that Alfie and Chantelle had routinely been allowed to share a bed.
Two more teenagers have since said that they too had spent the night in Chantelle's room.
Richard Goodsell, 16, a trainee chef, claims to have had a three-month relationship with the schoolgirl.
He said: "I know I could be the father. Everyone thinks I am. My friends all tell me that baby has my eyes– even my mum thinks so."
And Tyler Barker, 14, also insists he had a sexual relationship with Chantelle.
He said: "I slept with Chantelle in her bed about nine months ago and I'm really worried I could be the father."
However, Chantelle and her family claim the two boys are lying and insist Alfie is the only boyfriend she has had.
But on Sunday two boys, aged 14 and 16, both claimed they could be the father of 15-year-old Chantelle Steadman's daughter.
Several others have also claimed to have had a sexual relationship with the schoolgirl, from Eastbourne in Sussex.
Mrs Patten told The Mirror: "He's absolutely devastated these lads have come forward to say they slept with her at the time she got pregnant. Everything is wrong.
"Now that is in his mind and I'm not happy. I don't know where they get this from. I mean, that's my son, that's his baby.
"Alfie is distraught and upset about everything. But Maisie is fine."
The Patten family have now accepted that a DNA test is needed to confirm the paternity.
Max Clifford, the publicist who is representing Alfie and his family, said: "Nicola has agreed that DNA tests are the best way to resolve the issue of paternity.
"It is inevitable there are going to be doubts, particularly with the number of boys who've come forward claiming to have had sex with Chantelle.
"There is one boy in particular who does seem to have a stronger resemblance to the child."
It was reported last week that Alfie was the youngest father in Britain following the birth of Maisie, who was conceived when Alfie was 12-years-old.
Politicians including David Cameron spoke about the situation, and said it raised "worrying" questions about modern society.
It was disclosed that Alfie and Chantelle had routinely been allowed to share a bed.
Two more teenagers have since said that they too had spent the night in Chantelle's room.
Richard Goodsell, 16, a trainee chef, claims to have had a three-month relationship with the schoolgirl.
He said: "I know I could be the father. Everyone thinks I am. My friends all tell me that baby has my eyes– even my mum thinks so."
And Tyler Barker, 14, also insists he had a sexual relationship with Chantelle.
He said: "I slept with Chantelle in her bed about nine months ago and I'm really worried I could be the father."
However, Chantelle and her family claim the two boys are lying and insist Alfie is the only boyfriend she has had.
Friday, February 13, 2009
One less working Iridium satellite
MOSCOW – The crash of two satellites has generated an estimated tens of thousands of pieces of space junk that could circle Earth and threaten other satellites for the next 10,000 years, space experts said Friday.
One expert called the collision "a catastrophic event" that he hoped would force President Barack Obama's administration to address the long-ignored issue of debris in space.
Russian Mission Control chief Vladimir Solovyov said Tuesday's smashup of a derelict Russian military satellite and a working U.S. Iridium commercial satellite occurred in the busiest part of near-Earth space — some 500 miles (800 kilometers) above Earth.
"800 kilometers is a very popular orbit which is used by Earth-tracking and communications satellites," Solovyov told reporters Friday. "The clouds of debris pose a serious danger to them."
Solovyov said debris from the collision could stay in orbit for up to 10,000 years and even tiny fragments threaten spacecraft because both travel at such a high orbiting speed.
James Oberg, a NASA veteran who is now space consultant, described the crash over northern Siberia as "catastrophic event." NASA said it was the first-ever high-speed impact between two intact spacecraft — with the Iridium craft weighing 1,235 pounds (560 kilograms) and the Russian craft nearly a ton.
"At physical contact at orbital speeds, a hypersonic shock wave bursts outwards through the structures," Oberg said in e-mailed comments. "It literally shreds the material into confetti and detonates any fuels."
Most fragments are concentrated near the collision course, but Maj.-Gen. Alexander Yakushin, chief of staff of the Russian military's Space Forces, said some debris was thrown into other orbits, ranging from 300 to 800 miles (500-1,300 kilometers) above Earth.
David Wright at the Union of Concerned Scientists' Global Security said the collision had possibly generated tens of thousands of particles larger than 1 centimeter (half an inch), any of which could significantly damage or even destroy a satellite.
Wright, in a posting on the group's Web site, said the two large debris clouds from Tuesday's crash will spread over time, forming a shell around Earth. He likened the debris to "a shotgun blast that threatens other satellites in the region."
Meanwhile, there's no global air traffic control system that tracks the position of all satellites.
The U.S. military tracks some 17,000 pieces of space debris larger than 2 to 4 inches (5 to 10 centimeters), along with some 900 active satellites. But its main job is protecting the international space station and other manned spacecraft, and it lacks the resources to warn all satellite operators of every possible close call.
"With the amount of spacecraft and debris in orbit, the probability of collisions is going up more rapidly," said John Higginbotham, chief executive of Integral Systems Inc., a Lanham, Maryland-based company that runs ground support systems for satellites.
Oberg said the limited accuracy of tracking data and computer calculations makes it impossible to predict collisions, only their probability. He said most satellites also have little fuel to escape what most likely would be a false alarm.
"The collision offers a literally heaven-sent opportunity for the Obama administration to take forceful, visible and long-overdo measures to address a long-ignored issue of 'space debris,'" Oberg said.
In January 2007, China destroyed one of its own defunct satellites with a ballistic missile at an altitude close to that of Tuesday's collision, creating thousands of pieces of debris which threatened other spacecraft.
Both NASA and Russia's Roscosmos agencies said there was little risk to the international space station, which orbits 230 miles (370 kilometers) above Earth, far below the collision point. An unmanned Russian cargo ship docked smoothly Friday at the station, delivering water, food, fuel, oxygen and other supplies as well as a new Russian spacesuit for space walks.
American astronauts Michael Fincke and Sandra Magnus are aboard the station along with Russian Yuri Lonchakov. The crew size will be doubled to six members later this year.
One expert called the collision "a catastrophic event" that he hoped would force President Barack Obama's administration to address the long-ignored issue of debris in space.
Russian Mission Control chief Vladimir Solovyov said Tuesday's smashup of a derelict Russian military satellite and a working U.S. Iridium commercial satellite occurred in the busiest part of near-Earth space — some 500 miles (800 kilometers) above Earth.
"800 kilometers is a very popular orbit which is used by Earth-tracking and communications satellites," Solovyov told reporters Friday. "The clouds of debris pose a serious danger to them."
Solovyov said debris from the collision could stay in orbit for up to 10,000 years and even tiny fragments threaten spacecraft because both travel at such a high orbiting speed.
James Oberg, a NASA veteran who is now space consultant, described the crash over northern Siberia as "catastrophic event." NASA said it was the first-ever high-speed impact between two intact spacecraft — with the Iridium craft weighing 1,235 pounds (560 kilograms) and the Russian craft nearly a ton.
"At physical contact at orbital speeds, a hypersonic shock wave bursts outwards through the structures," Oberg said in e-mailed comments. "It literally shreds the material into confetti and detonates any fuels."
Most fragments are concentrated near the collision course, but Maj.-Gen. Alexander Yakushin, chief of staff of the Russian military's Space Forces, said some debris was thrown into other orbits, ranging from 300 to 800 miles (500-1,300 kilometers) above Earth.
David Wright at the Union of Concerned Scientists' Global Security said the collision had possibly generated tens of thousands of particles larger than 1 centimeter (half an inch), any of which could significantly damage or even destroy a satellite.
Wright, in a posting on the group's Web site, said the two large debris clouds from Tuesday's crash will spread over time, forming a shell around Earth. He likened the debris to "a shotgun blast that threatens other satellites in the region."
Meanwhile, there's no global air traffic control system that tracks the position of all satellites.
The U.S. military tracks some 17,000 pieces of space debris larger than 2 to 4 inches (5 to 10 centimeters), along with some 900 active satellites. But its main job is protecting the international space station and other manned spacecraft, and it lacks the resources to warn all satellite operators of every possible close call.
"With the amount of spacecraft and debris in orbit, the probability of collisions is going up more rapidly," said John Higginbotham, chief executive of Integral Systems Inc., a Lanham, Maryland-based company that runs ground support systems for satellites.
Oberg said the limited accuracy of tracking data and computer calculations makes it impossible to predict collisions, only their probability. He said most satellites also have little fuel to escape what most likely would be a false alarm.
"The collision offers a literally heaven-sent opportunity for the Obama administration to take forceful, visible and long-overdo measures to address a long-ignored issue of 'space debris,'" Oberg said.
In January 2007, China destroyed one of its own defunct satellites with a ballistic missile at an altitude close to that of Tuesday's collision, creating thousands of pieces of debris which threatened other spacecraft.
Both NASA and Russia's Roscosmos agencies said there was little risk to the international space station, which orbits 230 miles (370 kilometers) above Earth, far below the collision point. An unmanned Russian cargo ship docked smoothly Friday at the station, delivering water, food, fuel, oxygen and other supplies as well as a new Russian spacesuit for space walks.
American astronauts Michael Fincke and Sandra Magnus are aboard the station along with Russian Yuri Lonchakov. The crew size will be doubled to six members later this year.
Fiery plane crash near Buffalo, NY, kills 50
CLARENCE, N.Y. – A commuter plane dropped out of the sky without warning and nose-dived into a suburban Buffalo house in a fiery crash that killed all 49 people aboard and one person in the home. It was the nation's first deadly crash of a commercial airliner in 2 1/2 years.
The cause of the disaster was under investigation, but other pilots were overheard around the same time reporting a buildup of ice on their wings — a hazard that has caused major crashes in the past.
The twin turboprop aircraft — Continental Connection Flight 3407 from Newark, N.J. — was coming in for a landing when it went down in light snow and fog around 10:20 p.m. Thursday about five miles short of the Buffalo Niagara International Airport.
Witnesses heard the plane sputtering before it plunged squarely through the roof of the house, its tail section visible through flames shooting at least 50 feet high.
"The whole sky was lit up orange," said Bob Dworak, who lives less than a mile away. "All the sudden, there was a big bang, and the house shook."
Two others in the house escaped with minor injuries. The plane was carrying a four-member crew and an off-duty pilot. Among the 44 passengers killed was a woman whose husband died in the World Trade Center attacks of Sept. 11, 2001.
One of the survivors, Karen Wielinski, 57, told WBEN-AM in Buffalo that she was watching TV in the family room in the back of the house when she heard a noise. She said her daughter, 22-year-old Jill, who also survived, was watching TV in another part of the house.
"Planes do go over our house, but this one just sounded really different, louder, and I thought to myself, 'If that's a plane, it's going to hit something,'" she told the station. "The next thing I knew the ceiling was on me."
She said she still hasn't been told the fate of her husband, Doug, but added: "He was a good person, loved his family."
Federal investigators found the black box recorders in the plane's tail that could shed light on what went wrong, but they said the smoldering debris was still too hot to remove any bodies. The recorders were on their way to Washington for examination.
No mayday call came from the pilot before the crash, according to a recording of air traffic control's radio messages captured by the Web site LiveATC.net. Neither the controller nor the pilot showed concern that anything was out of the ordinary as the airplane was asked to fly at 2,300 feet.
A minute later, the controller tried to contact the plane but heard no response. After a pause, he tried to contact the plane again.
Eventually he told an unidentified listener to contact authorities on the ground in the Clarence area.
Erie County Emergency Coordinator David Bissonette said it appeared the plane "dove directly on top of the house."
"It was a direct hit," Bissonette said. "It's remarkable that it only took one house. As devastating as that is, it could have wiped out the entire neighborhood."
The 74-seat Q400 Bombardier aircraft, also known as the Dash 8, in Thursday's disaster was operated by Colgan Air, based in Manassas, Va. Colgan's parent company, Pinnacle Airlines of Memphis, Tenn., said the plane was new and had a clean safety record.
The nearly vertical drop of the plane suggests a sudden loss of control, said William Voss, a former official of the Federal Aviation Administration and current president of the Flight Safety Foundation, a nonprofit advocacy group.
Voss suggested that icing or a mechanical failure, such as wing flaps deploying asymmetrically or the two engines putting out different thrust, might have caused the crash, he said.
After the crash, at least two pilots were heard on air traffic control messages saying they had been picking up ice on their wings. "We've been getting ice since 20 miles south of the airport," one said.
Ice on the wings of a plane can alter aerodynamics and interfere with lift and handling. The danger is well known among pilots.
In general, smaller planes like the Dash 8, which uses a system of pneumatic de-icing boots, are more susceptible to icing problems than larger commuter planes that use a system to warm the wings. The boots, a rubber membrane stretched over the surface, are filled with compressed air to crack any ice that builds up.
A similar turboprop jet crash 15 years ago in Indiana was caused by icing, and after that the NTSB issued icing recommendations to more aggressively use the plane's system of pneumatic de-icing boots. But the FAA hasn't adopted it. It remains part of the NTSB's most-wanted safety improvements list.
The National Transportation Safety Board sent a team of investigators to Buffalo. The Department of Homeland Security said there was no indication of terrorism.
While residents of the neighborhood were used to planes rumbling overhead, witnesses said it sounded louder than usual, sputtered and made odd noises.
David Luce said he and his wife were working on their computers when they heard the plane come in low. "It didn't sound normal," he said. "We heard it for a few seconds, then it stopped, then a couple of seconds later was this tremendous explosion."
Dworak drove to the site, and "all we were seeing was 50- to 100-foot flames and a pile of rubble on the ground. It looked like the house just got destroyed the instant it got hit."
The plane was carrying 5,000 pounds of fuel and apparently exploded on impact, Erie County Executive Chris Collins said.
The 9/11 widow on board was identified as Beverly Eckert. She was heading to Buffalo for a celebration of what would have been her husband's 58th birthday, said Mary Fetchet, a 9/11 family activist.
Clarence is a growing eastern suburb of Buffalo, largely residential but with rural stretches. The crash site is on a street of older, single-family homes about 20 to 25 feet apart that back up to a wooded area.
It was the first fatal crash of a commercial airliner in the United States since Aug. 27, 2006, when 49 people were killed after a Comair jetliner mistakenly took off from a Lexington, Ky., runway that was too short.
The crash came less than a month after a US Airways pilot guided his crippled plane to a landing in the Hudson River in New York City, saving the lives of all 155 people aboard. Birds had apparently disabled both its engines.
On Dec. 20, a Continental Airlines plane veered off a runway and slid into a snowy field at the Denver airport, injuring 38 people.
___
Contributing to this report were Associated Press writers Carolyn Thompson in Buffalo, Linda Franklin in Dallas, Daniel Yee in Atlanta, Ron Powers in Washington, and Cristian Salazar and Jennifer Peltz in New York.
___
Continental said relatives and friends of those on Flight 3407 who want to give or receive information about those on board can call a special family assistance number, 1-800-621-3263.
The cause of the disaster was under investigation, but other pilots were overheard around the same time reporting a buildup of ice on their wings — a hazard that has caused major crashes in the past.
The twin turboprop aircraft — Continental Connection Flight 3407 from Newark, N.J. — was coming in for a landing when it went down in light snow and fog around 10:20 p.m. Thursday about five miles short of the Buffalo Niagara International Airport.
Witnesses heard the plane sputtering before it plunged squarely through the roof of the house, its tail section visible through flames shooting at least 50 feet high.
"The whole sky was lit up orange," said Bob Dworak, who lives less than a mile away. "All the sudden, there was a big bang, and the house shook."
Two others in the house escaped with minor injuries. The plane was carrying a four-member crew and an off-duty pilot. Among the 44 passengers killed was a woman whose husband died in the World Trade Center attacks of Sept. 11, 2001.
One of the survivors, Karen Wielinski, 57, told WBEN-AM in Buffalo that she was watching TV in the family room in the back of the house when she heard a noise. She said her daughter, 22-year-old Jill, who also survived, was watching TV in another part of the house.
"Planes do go over our house, but this one just sounded really different, louder, and I thought to myself, 'If that's a plane, it's going to hit something,'" she told the station. "The next thing I knew the ceiling was on me."
She said she still hasn't been told the fate of her husband, Doug, but added: "He was a good person, loved his family."
Federal investigators found the black box recorders in the plane's tail that could shed light on what went wrong, but they said the smoldering debris was still too hot to remove any bodies. The recorders were on their way to Washington for examination.
No mayday call came from the pilot before the crash, according to a recording of air traffic control's radio messages captured by the Web site LiveATC.net. Neither the controller nor the pilot showed concern that anything was out of the ordinary as the airplane was asked to fly at 2,300 feet.
A minute later, the controller tried to contact the plane but heard no response. After a pause, he tried to contact the plane again.
Eventually he told an unidentified listener to contact authorities on the ground in the Clarence area.
Erie County Emergency Coordinator David Bissonette said it appeared the plane "dove directly on top of the house."
"It was a direct hit," Bissonette said. "It's remarkable that it only took one house. As devastating as that is, it could have wiped out the entire neighborhood."
The 74-seat Q400 Bombardier aircraft, also known as the Dash 8, in Thursday's disaster was operated by Colgan Air, based in Manassas, Va. Colgan's parent company, Pinnacle Airlines of Memphis, Tenn., said the plane was new and had a clean safety record.
The nearly vertical drop of the plane suggests a sudden loss of control, said William Voss, a former official of the Federal Aviation Administration and current president of the Flight Safety Foundation, a nonprofit advocacy group.
Voss suggested that icing or a mechanical failure, such as wing flaps deploying asymmetrically or the two engines putting out different thrust, might have caused the crash, he said.
After the crash, at least two pilots were heard on air traffic control messages saying they had been picking up ice on their wings. "We've been getting ice since 20 miles south of the airport," one said.
Ice on the wings of a plane can alter aerodynamics and interfere with lift and handling. The danger is well known among pilots.
In general, smaller planes like the Dash 8, which uses a system of pneumatic de-icing boots, are more susceptible to icing problems than larger commuter planes that use a system to warm the wings. The boots, a rubber membrane stretched over the surface, are filled with compressed air to crack any ice that builds up.
A similar turboprop jet crash 15 years ago in Indiana was caused by icing, and after that the NTSB issued icing recommendations to more aggressively use the plane's system of pneumatic de-icing boots. But the FAA hasn't adopted it. It remains part of the NTSB's most-wanted safety improvements list.
The National Transportation Safety Board sent a team of investigators to Buffalo. The Department of Homeland Security said there was no indication of terrorism.
While residents of the neighborhood were used to planes rumbling overhead, witnesses said it sounded louder than usual, sputtered and made odd noises.
David Luce said he and his wife were working on their computers when they heard the plane come in low. "It didn't sound normal," he said. "We heard it for a few seconds, then it stopped, then a couple of seconds later was this tremendous explosion."
Dworak drove to the site, and "all we were seeing was 50- to 100-foot flames and a pile of rubble on the ground. It looked like the house just got destroyed the instant it got hit."
The plane was carrying 5,000 pounds of fuel and apparently exploded on impact, Erie County Executive Chris Collins said.
The 9/11 widow on board was identified as Beverly Eckert. She was heading to Buffalo for a celebration of what would have been her husband's 58th birthday, said Mary Fetchet, a 9/11 family activist.
Clarence is a growing eastern suburb of Buffalo, largely residential but with rural stretches. The crash site is on a street of older, single-family homes about 20 to 25 feet apart that back up to a wooded area.
It was the first fatal crash of a commercial airliner in the United States since Aug. 27, 2006, when 49 people were killed after a Comair jetliner mistakenly took off from a Lexington, Ky., runway that was too short.
The crash came less than a month after a US Airways pilot guided his crippled plane to a landing in the Hudson River in New York City, saving the lives of all 155 people aboard. Birds had apparently disabled both its engines.
On Dec. 20, a Continental Airlines plane veered off a runway and slid into a snowy field at the Denver airport, injuring 38 people.
___
Contributing to this report were Associated Press writers Carolyn Thompson in Buffalo, Linda Franklin in Dallas, Daniel Yee in Atlanta, Ron Powers in Washington, and Cristian Salazar and Jennifer Peltz in New York.
___
Continental said relatives and friends of those on Flight 3407 who want to give or receive information about those on board can call a special family assistance number, 1-800-621-3263.
Thursday, February 12, 2009
It is not the vaccines - it is old eggs!!!
Court Says Vaccine Not to Blame for Autism
In a blow to the movement arguing that vaccines trigger autism, three Federal judges ruled Thursday against all three families in three test cases, all of whom had sought compensation from the Federal vaccine-injury fund.
Both sides in the debate have been awaiting decisions in these cases since hearings began in early 2007; more than 5,000 similar claims have been filed with the fund.
These three decisions, each looking into a different theory as to how vaccines might have injured the children, are expected to guide the outcomes of all those claims.
The judges ruled that the families seeking compensation had not shown that their children’s autism was brought on by the presence of thimerosal, a mercury vaccine preservative, by the weakened measles virus used in the measles/mumps/rubella vaccine, or by a combination of the two.
For example, in a case pitting the family of Michelle Cedillo, a severely autistic child, against the Federal Department of Health and Human Services, the special master for the U.S. Court of Federal Claims ruled that the Cedillos had “failed to demonstrate that thimerosal-containing vaccines can contribute to causing immune dysfunction, or that the MMR vaccine can contributed to causing either autism or gastrointestinal dysfunction.”
In his strongly worded decision, the special master, George L. Hastings Jr. ruled that the government’s expert witnesses were “far better qualified, far more experienced and far more persuasive” than the Cedillos. Although the Cedillos only had to show that the preponderance of the evidence was on their side, the judge ruled that it was “not a close case” because the evidence was “overwhelmingly contrary” to their argument.
While expressing “deep sympathy and admiration” for the Cedillo family, he ruled that they were “misled by physicians who are guilty, in my view, of gross medical misjudgment.”
The other two special masters, Denise Vowell and Patricia Campbell-Smith, rendered similar decisions in cases involving two other children, William Yates Hazlehurst and Colten Snyder.
Lawyers for the plaintiffs have indicated they will appeal.
Pediatricians and government agencies welcomed the rulings.
“Hopefully, the determination by the special masters will help reassure parents that vaccines do not cause autism,” the Department of Health and Human Services said in a statement released Thursday.
As the administrator of the Vaccine Injury Compensation Fund, the department was the respondent in all three cases.
Dr. Michael T. Brady, a pediatrician in Columbus, Ohio and spokesman for the American Academy of Pediatrics, said the academy was “obviously very satisfied” with the rulings and hoped that they would mean that pediatricians would meet less resistance from parents to giving their children vaccines.
In contrast, J.B. Handley, the founder of Generation Rescue, a group that blames vaccines for autism and advocates treating children with wheat- and dairy-free diets, vitamins and chelation to remove mercury from their bodies, wrote on the blog Age of Autism that the decision not to compensate the Cedillos was “an incomprehensible injustice.”
The three joint rulings, he said, were “salt in the wounds, albeit not unexpected by a community used to being stepped on.”
The compensation fund was created because it is recognized that vaccines are not risk-free.In a small number of cases they can cause seizures, high fevers and other symptoms. Some vaccines no longer routinely used in the United States, such as oral polio vaccine and the smallpox vaccine, could even in very rare cases bring on life-threatening infections quite like those they were meant to protect against. The fund was created to compensate those victims, and comes from a tax on all vaccines.
At issue in these cases was whether vaccines could bring on autism, which comprises a wide spectrum of symptoms that often begin to show up when children are one to three years old — both the time when language develops and when children get many of their shots.
Severely affected children may stop speaking, develop ritual behaviors and devastating fears and become prone to violent outbursts. Last month an 18-year-old severely autistic youth was accused of beating to death his mother, a Kent State University professor, Gertrude Steuernagel, who had written essays about the difficulties of bringing up an autistic child.
Noting that vaccine opponents have proposed other theories about how vaccines might cause autism, such as that the alum “booster” or the number of shots children get at once could be to blame, Dr. Brady said he would “not be surprised if lawyers for parents would look for a different wrinkle in future cases.”
In a blow to the movement arguing that vaccines trigger autism, three Federal judges ruled Thursday against all three families in three test cases, all of whom had sought compensation from the Federal vaccine-injury fund.
Both sides in the debate have been awaiting decisions in these cases since hearings began in early 2007; more than 5,000 similar claims have been filed with the fund.
These three decisions, each looking into a different theory as to how vaccines might have injured the children, are expected to guide the outcomes of all those claims.
The judges ruled that the families seeking compensation had not shown that their children’s autism was brought on by the presence of thimerosal, a mercury vaccine preservative, by the weakened measles virus used in the measles/mumps/rubella vaccine, or by a combination of the two.
For example, in a case pitting the family of Michelle Cedillo, a severely autistic child, against the Federal Department of Health and Human Services, the special master for the U.S. Court of Federal Claims ruled that the Cedillos had “failed to demonstrate that thimerosal-containing vaccines can contribute to causing immune dysfunction, or that the MMR vaccine can contributed to causing either autism or gastrointestinal dysfunction.”
In his strongly worded decision, the special master, George L. Hastings Jr. ruled that the government’s expert witnesses were “far better qualified, far more experienced and far more persuasive” than the Cedillos. Although the Cedillos only had to show that the preponderance of the evidence was on their side, the judge ruled that it was “not a close case” because the evidence was “overwhelmingly contrary” to their argument.
While expressing “deep sympathy and admiration” for the Cedillo family, he ruled that they were “misled by physicians who are guilty, in my view, of gross medical misjudgment.”
The other two special masters, Denise Vowell and Patricia Campbell-Smith, rendered similar decisions in cases involving two other children, William Yates Hazlehurst and Colten Snyder.
Lawyers for the plaintiffs have indicated they will appeal.
Pediatricians and government agencies welcomed the rulings.
“Hopefully, the determination by the special masters will help reassure parents that vaccines do not cause autism,” the Department of Health and Human Services said in a statement released Thursday.
As the administrator of the Vaccine Injury Compensation Fund, the department was the respondent in all three cases.
Dr. Michael T. Brady, a pediatrician in Columbus, Ohio and spokesman for the American Academy of Pediatrics, said the academy was “obviously very satisfied” with the rulings and hoped that they would mean that pediatricians would meet less resistance from parents to giving their children vaccines.
In contrast, J.B. Handley, the founder of Generation Rescue, a group that blames vaccines for autism and advocates treating children with wheat- and dairy-free diets, vitamins and chelation to remove mercury from their bodies, wrote on the blog Age of Autism that the decision not to compensate the Cedillos was “an incomprehensible injustice.”
The three joint rulings, he said, were “salt in the wounds, albeit not unexpected by a community used to being stepped on.”
The compensation fund was created because it is recognized that vaccines are not risk-free.In a small number of cases they can cause seizures, high fevers and other symptoms. Some vaccines no longer routinely used in the United States, such as oral polio vaccine and the smallpox vaccine, could even in very rare cases bring on life-threatening infections quite like those they were meant to protect against. The fund was created to compensate those victims, and comes from a tax on all vaccines.
At issue in these cases was whether vaccines could bring on autism, which comprises a wide spectrum of symptoms that often begin to show up when children are one to three years old — both the time when language develops and when children get many of their shots.
Severely affected children may stop speaking, develop ritual behaviors and devastating fears and become prone to violent outbursts. Last month an 18-year-old severely autistic youth was accused of beating to death his mother, a Kent State University professor, Gertrude Steuernagel, who had written essays about the difficulties of bringing up an autistic child.
Noting that vaccine opponents have proposed other theories about how vaccines might cause autism, such as that the alum “booster” or the number of shots children get at once could be to blame, Dr. Brady said he would “not be surprised if lawyers for parents would look for a different wrinkle in future cases.”
Wednesday, February 11, 2009
Taxpayers may have to cover octuplet mom's costs
This is one sicko!!
LOS ANGELES – A big share of the financial burden of raising Nadya Suleman's 14 children could fall on the shoulders of California's taxpayers, compounding the public furor in a state already billions of dollars in the red.
Even before the 33-year-old single, unemployed mother gave birth to octuplets last month, she had been caring for her six other children with the help of $490 a month in food stamps, plus Social Security disability payments for three of the youngsters. The public aid will almost certainly be increased with the new additions to her family.
Also, the hospital where the octuplets are expected to spend seven to 12 weeks has requested reimbursement from Medi-Cal, the state's Medicaid program, for care of the premature babies, according to the Los Angeles Times. The cost has not been disclosed.
Word of the public assistance has stoked the furor over Suleman's decision to have so many children by having embryos implanted in her womb.
"It appears that, in the case of the Suleman family, raising 14 children takes not simply a village but the combined resources of the county, state and federal governments," Los Angeles Times columnist Tim Rutten wrote in Wednesday's paper. He called Suleman's story "grotesque."
On the Internet, bloggers rained insults on Suleman, calling her an "idiot," criticizing her decision to have more children when she couldn't afford the ones she had, and suggesting she be sterilized.
"It's my opinion that a woman's right to reproduce should be limited to a number which the parents can pay for," Charles Murray wrote in a letter to the Los Angeles Daily News. "Why should my wife and I, as taxpayers, pay child support for 14 Suleman kids?"
She was also berated on talk radio, where listeners accused her of manipulating the system and being an irresponsible mother.
"From the outside you can tell that this woman was playing the system," host Bryan Suits said on the "Kennedy and Suits" show on KFI-AM. "You're damn right the state should step in and seize the kids and adopt them out."
A call to Suleman's publicist Mike Furtney was not immediately returned.
In her only media interviews, Suleman told NBC's "Today" she doesn't consider the public assistance she receives to be welfare and doesn't intend to remain on it for long.
Also, a Nadya Suleman Family Web Site has been set up to collect donations for the children. It features pictures of the mother and each octuplet and has instructions for making donations by check or credit card.
Suleman, whose six older children range in age from 2 to 7, said three of them receive disability payments.
She said one is autistic, but she has not disclosed the other youngsters' disabilities, and refused to say how much they get in payments.
In California, a low-income family can receive Social Security payments of up to $793 a month for each disabled child. Three children would amount to $2,379.
The Suleman octuplets' medical costs have not been disclosed, but in 2006, the average cost for a premature baby's hospital stay in California was $164,273, according to the U.S. Department of Health and Human Services. The average cost for just one cesarean birth in 2006 was $22,762 in California. Eight times that equals $1.3 million.
For a single mother, the cost of raising 14 children through age 17 ranges from $1.3 million to $2.7 million, according to the U.S. Department of Agriculture.
Gov. Arnold Schwarzenegger, who is struggling to close a $42 billion budget gap by cutting services, declined through a spokesman to comment on the taxpayer costs associated with the octuplets' delivery and care.
Suleman received disability payments for an on-the-job back injury during a riot at a state mental hospital, collecting more than $165,000 over nearly a decade before the benefits were discontinued last year.
Some of the disability money was spent on in vitro fertilizations, which was used for all 14 of her children, Suleman said. Suleman said she also worked double shifts at the mental hospital and saved up for the treatments. She estimated that all her treatments cost $100,000.
A dozen states, including California, have laws requiring insurance companies to cover infertility treatment, according to the National Conference of State Legislatures. But California does not require insurers to cover in vitro procedures. It's not clear what type of coverage Suleman has.
In the NBC interview, Suleman said she will go back to California State University, Fullerton in the fall to complete her master's degree in counseling, and will use student loans to support her children. She said she will rely on the school's daycare center and volunteers.
LOS ANGELES – A big share of the financial burden of raising Nadya Suleman's 14 children could fall on the shoulders of California's taxpayers, compounding the public furor in a state already billions of dollars in the red.
Even before the 33-year-old single, unemployed mother gave birth to octuplets last month, she had been caring for her six other children with the help of $490 a month in food stamps, plus Social Security disability payments for three of the youngsters. The public aid will almost certainly be increased with the new additions to her family.
Also, the hospital where the octuplets are expected to spend seven to 12 weeks has requested reimbursement from Medi-Cal, the state's Medicaid program, for care of the premature babies, according to the Los Angeles Times. The cost has not been disclosed.
Word of the public assistance has stoked the furor over Suleman's decision to have so many children by having embryos implanted in her womb.
"It appears that, in the case of the Suleman family, raising 14 children takes not simply a village but the combined resources of the county, state and federal governments," Los Angeles Times columnist Tim Rutten wrote in Wednesday's paper. He called Suleman's story "grotesque."
On the Internet, bloggers rained insults on Suleman, calling her an "idiot," criticizing her decision to have more children when she couldn't afford the ones she had, and suggesting she be sterilized.
"It's my opinion that a woman's right to reproduce should be limited to a number which the parents can pay for," Charles Murray wrote in a letter to the Los Angeles Daily News. "Why should my wife and I, as taxpayers, pay child support for 14 Suleman kids?"
She was also berated on talk radio, where listeners accused her of manipulating the system and being an irresponsible mother.
"From the outside you can tell that this woman was playing the system," host Bryan Suits said on the "Kennedy and Suits" show on KFI-AM. "You're damn right the state should step in and seize the kids and adopt them out."
A call to Suleman's publicist Mike Furtney was not immediately returned.
In her only media interviews, Suleman told NBC's "Today" she doesn't consider the public assistance she receives to be welfare and doesn't intend to remain on it for long.
Also, a Nadya Suleman Family Web Site has been set up to collect donations for the children. It features pictures of the mother and each octuplet and has instructions for making donations by check or credit card.
Suleman, whose six older children range in age from 2 to 7, said three of them receive disability payments.
She said one is autistic, but she has not disclosed the other youngsters' disabilities, and refused to say how much they get in payments.
In California, a low-income family can receive Social Security payments of up to $793 a month for each disabled child. Three children would amount to $2,379.
The Suleman octuplets' medical costs have not been disclosed, but in 2006, the average cost for a premature baby's hospital stay in California was $164,273, according to the U.S. Department of Health and Human Services. The average cost for just one cesarean birth in 2006 was $22,762 in California. Eight times that equals $1.3 million.
For a single mother, the cost of raising 14 children through age 17 ranges from $1.3 million to $2.7 million, according to the U.S. Department of Agriculture.
Gov. Arnold Schwarzenegger, who is struggling to close a $42 billion budget gap by cutting services, declined through a spokesman to comment on the taxpayer costs associated with the octuplets' delivery and care.
Suleman received disability payments for an on-the-job back injury during a riot at a state mental hospital, collecting more than $165,000 over nearly a decade before the benefits were discontinued last year.
Some of the disability money was spent on in vitro fertilizations, which was used for all 14 of her children, Suleman said. Suleman said she also worked double shifts at the mental hospital and saved up for the treatments. She estimated that all her treatments cost $100,000.
A dozen states, including California, have laws requiring insurance companies to cover infertility treatment, according to the National Conference of State Legislatures. But California does not require insurers to cover in vitro procedures. It's not clear what type of coverage Suleman has.
In the NBC interview, Suleman said she will go back to California State University, Fullerton in the fall to complete her master's degree in counseling, and will use student loans to support her children. She said she will rely on the school's daycare center and volunteers.
Tuesday, February 10, 2009
Stocks plunge as government unveils bailout plan
Seems the Dems aren't getting it right either!
NEW YORK – Investors are frustrated with the government's latest bank bailout plan — and showing it by unloading stocks. The major stock indexes fell more than 4 percent Tuesday, including the Dow Jones industrial average, which tumbled 382 points. Financial stocks led the market lower, a sign of how concerned Wall Street is about the government's ability to restore the health of the banking industry.
Traders and investors said the lack of specifics from Treasury Secretary Timothy Geithner on how the government will direct more than $1 trillion in public and private support was troubling.
The plan is aimed at restoring proper functioning to credit markets, which seized up over worries about bad debt after the September bankruptcy of Lehman Brothers Holdings Inc. The latest plan calls for a government-private sector partnership to help remove banks' soured assets from their books. It would also boost an effort to unclog the credit markets that govern loans to consumers and businesses.
"The good news is they are going to spend a trillion dollars, the bad news is they don't know how," said James Cox, managing partner at Harris Financial Group.
"They built this up as being a panacea," he said. "There was so much hope pinned on them to do a good job. The expectations have been so high. It's hard to live up to."
Investors also questioned whether this plan, which followed previous efforts in the final months of 2008, would work. Some selling was to be expected, however, as stocks rose sharply last week ahead of the announcement.
Geithner's speech "basically puts a spotlight on the fact that the government has no idea how to fix the problem," said Jeff Buetow, senior portfolio manager at Portfolio Management Consultants. "People bought on rumor and hope, and now they're selling on reality."
Investors focused on the financial rescue showed little reaction to the Senate's approval of its $838 billion economic stimulus package. The bill must now be reconciled with an $819 billion version passed by the House. Congressional leaders hope to have the bill on President Barack Obama's desk before a recess next week.
"The economy is in deep trouble. The stimulus plan is not very stimulative. It's not addressing the real problem," Buetow said. "We have an insolvent financial system. The government is trying to find a comprehensive way to save it. They can't afford to just throw money at it. That's what they tried to do in the fall and that clearly did not work."
Stocks extended their slide after Federal Reserve Chairman Ben Bernanke didn't elaborate on the plan in testimony at a House Financial Services Committee hearing. Instead, Bernanke said the programs designed to revive the credit markets are showing promise and that any fix to the worst financial crisis since the 1930s would take time to work.
According to preliminary calculations, the Dow industrials fell 381.99, or 4.62 percent, to 7,888.88. It was the lowest close since Nov. 20, when the blue chips finished at their lowest level since March 2003.
Broader stock indicators also tumbled. The Standard & Poor's 500 index fell 42.73, or 4.91 percent, to 827.16, and the Nasdaq fell 66.83, or 4.20 percent, to 1,524.73.
The Russell 2000 index of smaller companies fell 22.17, or 4.74 percent, to 445.77.
Declining issues outnumbered advancers by about 6 to 1 on the New York Stock Exchange, where volume came to 1.76 billion shares.
Bond prices jumped as investors sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.83 percent from 2.99 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.31 percent from 0.32 percent late Monday.
The dollar rose against other major currencies. Gold prices also rose.
Light, sweet crude fell $2.01 to settle at $37.55 a barrel on the New York Mercantile Exchange.
Peter Jankovskis, co-chief investment officer at OakBrook Investments, said the government's plan doesn't resolve the question of how much the troubled assets weighing down banks' books are worth. By providing funds to purchase the assets or by buying them outright the government risks hurting banks by paying too little or hurting tax payers by paying too much.
"Valuation is the fundamental issue," Jankovskis said.
Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co. said the government might be playing politics by not proposing measures that would touch off great debate in Washington and meet with public approval. A government takeover of a bank, for example, wouldn't be politically palatable, he said.
"There are some people that believe the government is dancing around the issue of what has to be done and what is politically acceptable," he said.
Valentin also said some of the drop in stocks could be hastened by short sellers — investors who place bets that a stock will fall.
Short sellers last week snapped up shares of financial stocks to cover their bets in case Geithner's announcement sent stocks higher. Now, those investors can put their pessimistic bets back in place. This can weigh on the price of a stock and exacerbate selling.
Investors are simply left with many questions.
"I think generally we just don't know enough. We just don't know enough of what it all means," said Jon Biele, head of capital markets at Cowen & Co. "It's digestion time."
Most other news only added to investors' worries. The government reported that wholesalers cut back on their inventories in December by the largest amount in 16 years. The reduction means wholesalers ordered fewer new goods, leading to reduced production and potentially more job losses.
The Commerce Department said wholesale inventories plunged by 1.4 percent, nearly double analysts' expectations of 0.8 percent. It also was the fourth straight monthly decline.
Bank stocks saw the biggest selling. Bank of America Corp. fell $1.33, or 19.3 percent, to $5.56, while Wells Fargo & Co. fell $2.71, or 14.2 percent, to $16.35.
Regional banks also showed big drops. Fifth Third Bancorp fell 70 cents, or 24 percent, to $2.19, while Huntington Bancshares Inc. fell 65 cents, or 25 percent, to $1.96. Conglomerate General Electric Co., which has a big finance arm and often trades like a bank stock, fell $1.02, or 8.1 percent, to $11.62.
Principal Financial Group Inc. fell $5.04, or 30 percent, to $11.99 after the insurer posted a fourth-quarter loss on investment and loan losses. The company's report raised fears that the company will be forced to raise cash.
More downbeat corporate news served as unnecessary reminders of just how bad the economic situation remains.
Alcoa Inc. fell 85 cents, or 10 percent, to $7.65 after a ratings agency slashed the aluminum producer's corporate credit rating. Standard & Poor's Ratings Services said it expected the company's credit metrics to deteriorate significantly this year.
General Motors Corp. said it will cut 10,000 salaried jobs in 2009, as part of the restructuring plan the company submitted to Congress late last year. GM fell 13 cents, or 4.6 percent, to $2.70.
Overseas, Britain's FTSE 100 fell 2.19 percent, Germany's DAX index fell 3.46 percent, and France's CAC-40 fell 3.64 percent. Japan's Nikkei stock average fell 0.29 percent.
NEW YORK – Investors are frustrated with the government's latest bank bailout plan — and showing it by unloading stocks. The major stock indexes fell more than 4 percent Tuesday, including the Dow Jones industrial average, which tumbled 382 points. Financial stocks led the market lower, a sign of how concerned Wall Street is about the government's ability to restore the health of the banking industry.
Traders and investors said the lack of specifics from Treasury Secretary Timothy Geithner on how the government will direct more than $1 trillion in public and private support was troubling.
The plan is aimed at restoring proper functioning to credit markets, which seized up over worries about bad debt after the September bankruptcy of Lehman Brothers Holdings Inc. The latest plan calls for a government-private sector partnership to help remove banks' soured assets from their books. It would also boost an effort to unclog the credit markets that govern loans to consumers and businesses.
"The good news is they are going to spend a trillion dollars, the bad news is they don't know how," said James Cox, managing partner at Harris Financial Group.
"They built this up as being a panacea," he said. "There was so much hope pinned on them to do a good job. The expectations have been so high. It's hard to live up to."
Investors also questioned whether this plan, which followed previous efforts in the final months of 2008, would work. Some selling was to be expected, however, as stocks rose sharply last week ahead of the announcement.
Geithner's speech "basically puts a spotlight on the fact that the government has no idea how to fix the problem," said Jeff Buetow, senior portfolio manager at Portfolio Management Consultants. "People bought on rumor and hope, and now they're selling on reality."
Investors focused on the financial rescue showed little reaction to the Senate's approval of its $838 billion economic stimulus package. The bill must now be reconciled with an $819 billion version passed by the House. Congressional leaders hope to have the bill on President Barack Obama's desk before a recess next week.
"The economy is in deep trouble. The stimulus plan is not very stimulative. It's not addressing the real problem," Buetow said. "We have an insolvent financial system. The government is trying to find a comprehensive way to save it. They can't afford to just throw money at it. That's what they tried to do in the fall and that clearly did not work."
Stocks extended their slide after Federal Reserve Chairman Ben Bernanke didn't elaborate on the plan in testimony at a House Financial Services Committee hearing. Instead, Bernanke said the programs designed to revive the credit markets are showing promise and that any fix to the worst financial crisis since the 1930s would take time to work.
According to preliminary calculations, the Dow industrials fell 381.99, or 4.62 percent, to 7,888.88. It was the lowest close since Nov. 20, when the blue chips finished at their lowest level since March 2003.
Broader stock indicators also tumbled. The Standard & Poor's 500 index fell 42.73, or 4.91 percent, to 827.16, and the Nasdaq fell 66.83, or 4.20 percent, to 1,524.73.
The Russell 2000 index of smaller companies fell 22.17, or 4.74 percent, to 445.77.
Declining issues outnumbered advancers by about 6 to 1 on the New York Stock Exchange, where volume came to 1.76 billion shares.
Bond prices jumped as investors sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.83 percent from 2.99 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.31 percent from 0.32 percent late Monday.
The dollar rose against other major currencies. Gold prices also rose.
Light, sweet crude fell $2.01 to settle at $37.55 a barrel on the New York Mercantile Exchange.
Peter Jankovskis, co-chief investment officer at OakBrook Investments, said the government's plan doesn't resolve the question of how much the troubled assets weighing down banks' books are worth. By providing funds to purchase the assets or by buying them outright the government risks hurting banks by paying too little or hurting tax payers by paying too much.
"Valuation is the fundamental issue," Jankovskis said.
Scott Valentin, an analyst at Friedman, Billings, Ramsey & Co. said the government might be playing politics by not proposing measures that would touch off great debate in Washington and meet with public approval. A government takeover of a bank, for example, wouldn't be politically palatable, he said.
"There are some people that believe the government is dancing around the issue of what has to be done and what is politically acceptable," he said.
Valentin also said some of the drop in stocks could be hastened by short sellers — investors who place bets that a stock will fall.
Short sellers last week snapped up shares of financial stocks to cover their bets in case Geithner's announcement sent stocks higher. Now, those investors can put their pessimistic bets back in place. This can weigh on the price of a stock and exacerbate selling.
Investors are simply left with many questions.
"I think generally we just don't know enough. We just don't know enough of what it all means," said Jon Biele, head of capital markets at Cowen & Co. "It's digestion time."
Most other news only added to investors' worries. The government reported that wholesalers cut back on their inventories in December by the largest amount in 16 years. The reduction means wholesalers ordered fewer new goods, leading to reduced production and potentially more job losses.
The Commerce Department said wholesale inventories plunged by 1.4 percent, nearly double analysts' expectations of 0.8 percent. It also was the fourth straight monthly decline.
Bank stocks saw the biggest selling. Bank of America Corp. fell $1.33, or 19.3 percent, to $5.56, while Wells Fargo & Co. fell $2.71, or 14.2 percent, to $16.35.
Regional banks also showed big drops. Fifth Third Bancorp fell 70 cents, or 24 percent, to $2.19, while Huntington Bancshares Inc. fell 65 cents, or 25 percent, to $1.96. Conglomerate General Electric Co., which has a big finance arm and often trades like a bank stock, fell $1.02, or 8.1 percent, to $11.62.
Principal Financial Group Inc. fell $5.04, or 30 percent, to $11.99 after the insurer posted a fourth-quarter loss on investment and loan losses. The company's report raised fears that the company will be forced to raise cash.
More downbeat corporate news served as unnecessary reminders of just how bad the economic situation remains.
Alcoa Inc. fell 85 cents, or 10 percent, to $7.65 after a ratings agency slashed the aluminum producer's corporate credit rating. Standard & Poor's Ratings Services said it expected the company's credit metrics to deteriorate significantly this year.
General Motors Corp. said it will cut 10,000 salaried jobs in 2009, as part of the restructuring plan the company submitted to Congress late last year. GM fell 13 cents, or 4.6 percent, to $2.70.
Overseas, Britain's FTSE 100 fell 2.19 percent, Germany's DAX index fell 3.46 percent, and France's CAC-40 fell 3.64 percent. Japan's Nikkei stock average fell 0.29 percent.
Friday, February 6, 2009
This woman and her doctor need to be institutionalized!!!
California Medical Board probes octuplet birth
LOS ANGELES – The fertility doctor who helped a California woman have 14 children, including octuplets born last month, is now facing a state investigation on top of harsh criticism from medical ethicists.
The Medical Board of California did not identify the doctor who helped Nadya Suleman, 33, of Whittier, become pregnant with the six boys and two girls born on Jan. 26., even though she already had six other children.
"We're looking into the matter to see if we can substantiate if there was a violation of the standard of care," board spokeswoman Candis Cohen said Friday.
Suleman, a divorced single mother, told NBC's "Today" show that the same fertility specialist provided in vitro fertilization for all 14 children.
In the interview broadcast Friday, Suleman also said six embryos were implanted for each of her pregnancies. In her latest, two of Suleman's embryos split, resulting in two sets of twins among the octuplets.
When asked why so many embryos were implanted, Suleman said: "Those are my children, and that's what was available and I used them. So, I took a risk. It's a gamble. It always is."
Doctors say the norm is to implant two or three embryos, at most, in women Suleman's age.
"The revelation about one center treating her makes the treatment even harder to understand," said Arthur Caplan, bioethics chairman at the University of Pennsylvania. "They went ahead when she had six kids, knowing that she was a single mom ... and put embryos into her anyway."
Suleman's infants were born prematurely and are expected to remain in the hospital for several more weeks. Her six other children are between ages 2 and 7.
Suleman said she had never been on welfare and would find a way to get by with the help of family, friends and her church. She said she planned to return to school in the fall.
"All I wanted was children. I wanted to be a mom. That's all I ever wanted in my life," Suleman said in the portion of the interview that aired Friday. "I love my children."
She said she struggled for seven years before finally giving birth to her first child.
According to state documents, Suleman told a doctor she had three miscarriages. Another doctor disputed that number, saying she had two ectopic pregnancies, a dangerous condition in which a fertilized egg implants somewhere other than in the uterus.
The state documents describe Suleman becoming pregnant with her first child after a 1999 injury during a riot at a state mental hospital where she worked. Suleman feared she would lose the child and sunk into an intense depression, according to a psychological evaluation in her workers' compensation case.
"When you have a history of miscarriages, you think it will take a miracle," she told Dr. Dennis Nehamen. "I just wanted to die. I suspected I was pregnant but I thought, 'That's ridiculous.'"
But the 2001 birth of the baby "helped my spirits," Suleman said.
More than 300 pages of documents were disclosed to The Associated Press following a public records request to the state Division of Workers' Compensation. Among other things, they reveal that Suleman collected more than $165,000 in disability payments between 2002 and 2008 for the work injury, which she said left her in near-constant pain and helped end her marriage
LOS ANGELES – The fertility doctor who helped a California woman have 14 children, including octuplets born last month, is now facing a state investigation on top of harsh criticism from medical ethicists.
The Medical Board of California did not identify the doctor who helped Nadya Suleman, 33, of Whittier, become pregnant with the six boys and two girls born on Jan. 26., even though she already had six other children.
"We're looking into the matter to see if we can substantiate if there was a violation of the standard of care," board spokeswoman Candis Cohen said Friday.
Suleman, a divorced single mother, told NBC's "Today" show that the same fertility specialist provided in vitro fertilization for all 14 children.
In the interview broadcast Friday, Suleman also said six embryos were implanted for each of her pregnancies. In her latest, two of Suleman's embryos split, resulting in two sets of twins among the octuplets.
When asked why so many embryos were implanted, Suleman said: "Those are my children, and that's what was available and I used them. So, I took a risk. It's a gamble. It always is."
Doctors say the norm is to implant two or three embryos, at most, in women Suleman's age.
"The revelation about one center treating her makes the treatment even harder to understand," said Arthur Caplan, bioethics chairman at the University of Pennsylvania. "They went ahead when she had six kids, knowing that she was a single mom ... and put embryos into her anyway."
Suleman's infants were born prematurely and are expected to remain in the hospital for several more weeks. Her six other children are between ages 2 and 7.
Suleman said she had never been on welfare and would find a way to get by with the help of family, friends and her church. She said she planned to return to school in the fall.
"All I wanted was children. I wanted to be a mom. That's all I ever wanted in my life," Suleman said in the portion of the interview that aired Friday. "I love my children."
She said she struggled for seven years before finally giving birth to her first child.
According to state documents, Suleman told a doctor she had three miscarriages. Another doctor disputed that number, saying she had two ectopic pregnancies, a dangerous condition in which a fertilized egg implants somewhere other than in the uterus.
The state documents describe Suleman becoming pregnant with her first child after a 1999 injury during a riot at a state mental hospital where she worked. Suleman feared she would lose the child and sunk into an intense depression, according to a psychological evaluation in her workers' compensation case.
"When you have a history of miscarriages, you think it will take a miracle," she told Dr. Dennis Nehamen. "I just wanted to die. I suspected I was pregnant but I thought, 'That's ridiculous.'"
But the 2001 birth of the baby "helped my spirits," Suleman said.
More than 300 pages of documents were disclosed to The Associated Press following a public records request to the state Division of Workers' Compensation. Among other things, they reveal that Suleman collected more than $165,000 in disability payments between 2002 and 2008 for the work injury, which she said left her in near-constant pain and helped end her marriage
Octuplets' mom says she had 6 embryos implanted - Yahoo! News
WHITTIER, Calif. – The mother of newborn octuplets says she had six embryos implanted in her fertility procedure — far more than industry guidelines recommend under ordinary circumstances — and was well aware that multiple births could result.
"I wanted them all transferred," Nadya Suleman told NBC's "Today" show. "Those are my children, and that's what was available and I used them. So, I took a risk. It's a gamble. It always is."
"It turned out perfectly," Suleman added in a portion of the interview broadcast Friday.
Other portions of interview are scheduled to air next week.
The interview and public documents obtained by The Associated Press lifted the veil of secrecy in which Suleman shrouded herself after the Jan. 26 births.
The 33-year-old single, unemployed woman has been harshly criticized for having a fertility procedure and risking multiple births when she already has six young children, including twins.
With in vitro fertilization, doctors frequently implant more than one embryo to improve the odds that one will take. However, the U.S. fertility industry has guidelines that call for no more than two embryos be implanted for women under 35 "in the absence of extraordinary circumstances."
Experts say there is a small chance that embryos can divide, which apparently led to the octuplets.
Suleman said she had six embryos implanted for each of the previous in vitro procedures that resulted in her other six children, including twins.
"All I wanted was children. I wanted to be a mom. That's all I ever wanted in my life," she said. "I love my children.
In the interview, Suleman said she struggled for seven years before finally giving birth to her first child. According to state documents, Suleman told a doctor she had three miscarriages. Another doctor disputed that number, saying she had two ectopic pregnancies, a dangerous condition in which a fertilized egg implants somewhere other than in the uterus.
Suleman said all 14 of her children were born by in vitro fertilization from sperm donated by a friend.
Suleman's publicist, Mike Furtney, said Thursday that Suleman was "feeling great" and looking forward to being reunited with her octuplets, who were born prematurely and are expected to remain in the hospital for several more weeks.
The state documents describe Suleman becoming pregnant with her first child after a 1999 injury during a riot at a state mental hospital where she worked.
Suleman feared she would lose the child and sunk into an intense depression, according to a psychological evaluation in her workers' compensation case.
"When you have a history of miscarriages, you think it will take a miracle," she told Dr. Dennis Nehamen. "I just wanted to die. I suspected I was pregnant but I thought, 'That's ridiculous.'"
But the 2001 birth of the baby "helped my spirits," Suleman said.
More than 300 pages of documents were disclosed to The Associated Press following a public records request to the state Division of Workers' Compensation.
Among other things, they reveal that Suleman collected more than $165,000 in disability payments between 2002 and 2008 for the work injury, which she said left her in near-constant pain and helped end her marriage.
Details of the documents were reported the same day that NBC released excerpts of Suleman's first interview since giving birth.
In the interview, Suleman called her childhood as an only child "pretty dysfunctional."
In the state documents, however, doctors quoted her as indicating she had a happy childhood. She told them she was an above-average student at Nogales High School in La Puente, where she enjoyed being a cheerleader, had many friends and stayed out of trouble. She said both her parents were loving and supportive.
According to the state documents, Suleman was injured Sept. 18, 1999, when a riot involving nearly two dozen patients broke out in the women's ward of the Metropolitan State Hospital in Norwalk, where she worked as a psychiatric technician. As she was helping other staff members restrain a patient, a desk thrown at her by another patient hit her in the back. It damaged her spine and left her complaining of headaches and intense pain throughout her lower body for years.
Suleman attributed the lingering pain in part to the breakup of her marriage to Marcos Gutierrez, whom she wed in 1996 and divorced in 2008.
She told a psychiatrist the bouts of depression she was suffering as a result of her injury were unfair to her husband.
"I don't want to keep bringing him down," she said. "I want him to move on with his life."
Public records show Suleman was listed on the Metropolitan State Hospital payroll from 1997 until last year, although it appears she did little work after September 1999 because of her injury.
During a hearing on her case in December 2001, Suleman said pregnancy aggravated her back condition. She said she spent most of the day in bed and was unable to care for her first child, according to a report by workers' compensation judge Jerome Bulavsky.
After examining her in August, Dr. Steven Nagelberg attributed 90 percent of her condition to the work incident and 10 percent to her pregnancy.
"I wanted them all transferred," Nadya Suleman told NBC's "Today" show. "Those are my children, and that's what was available and I used them. So, I took a risk. It's a gamble. It always is."
"It turned out perfectly," Suleman added in a portion of the interview broadcast Friday.
Other portions of interview are scheduled to air next week.
The interview and public documents obtained by The Associated Press lifted the veil of secrecy in which Suleman shrouded herself after the Jan. 26 births.
The 33-year-old single, unemployed woman has been harshly criticized for having a fertility procedure and risking multiple births when she already has six young children, including twins.
With in vitro fertilization, doctors frequently implant more than one embryo to improve the odds that one will take. However, the U.S. fertility industry has guidelines that call for no more than two embryos be implanted for women under 35 "in the absence of extraordinary circumstances."
Experts say there is a small chance that embryos can divide, which apparently led to the octuplets.
Suleman said she had six embryos implanted for each of the previous in vitro procedures that resulted in her other six children, including twins.
"All I wanted was children. I wanted to be a mom. That's all I ever wanted in my life," she said. "I love my children.
In the interview, Suleman said she struggled for seven years before finally giving birth to her first child. According to state documents, Suleman told a doctor she had three miscarriages. Another doctor disputed that number, saying she had two ectopic pregnancies, a dangerous condition in which a fertilized egg implants somewhere other than in the uterus.
Suleman said all 14 of her children were born by in vitro fertilization from sperm donated by a friend.
Suleman's publicist, Mike Furtney, said Thursday that Suleman was "feeling great" and looking forward to being reunited with her octuplets, who were born prematurely and are expected to remain in the hospital for several more weeks.
The state documents describe Suleman becoming pregnant with her first child after a 1999 injury during a riot at a state mental hospital where she worked.
Suleman feared she would lose the child and sunk into an intense depression, according to a psychological evaluation in her workers' compensation case.
"When you have a history of miscarriages, you think it will take a miracle," she told Dr. Dennis Nehamen. "I just wanted to die. I suspected I was pregnant but I thought, 'That's ridiculous.'"
But the 2001 birth of the baby "helped my spirits," Suleman said.
More than 300 pages of documents were disclosed to The Associated Press following a public records request to the state Division of Workers' Compensation.
Among other things, they reveal that Suleman collected more than $165,000 in disability payments between 2002 and 2008 for the work injury, which she said left her in near-constant pain and helped end her marriage.
Details of the documents were reported the same day that NBC released excerpts of Suleman's first interview since giving birth.
In the interview, Suleman called her childhood as an only child "pretty dysfunctional."
In the state documents, however, doctors quoted her as indicating she had a happy childhood. She told them she was an above-average student at Nogales High School in La Puente, where she enjoyed being a cheerleader, had many friends and stayed out of trouble. She said both her parents were loving and supportive.
According to the state documents, Suleman was injured Sept. 18, 1999, when a riot involving nearly two dozen patients broke out in the women's ward of the Metropolitan State Hospital in Norwalk, where she worked as a psychiatric technician. As she was helping other staff members restrain a patient, a desk thrown at her by another patient hit her in the back. It damaged her spine and left her complaining of headaches and intense pain throughout her lower body for years.
Suleman attributed the lingering pain in part to the breakup of her marriage to Marcos Gutierrez, whom she wed in 1996 and divorced in 2008.
She told a psychiatrist the bouts of depression she was suffering as a result of her injury were unfair to her husband.
"I don't want to keep bringing him down," she said. "I want him to move on with his life."
Public records show Suleman was listed on the Metropolitan State Hospital payroll from 1997 until last year, although it appears she did little work after September 1999 because of her injury.
During a hearing on her case in December 2001, Suleman said pregnancy aggravated her back condition. She said she spent most of the day in bed and was unable to care for her first child, according to a report by workers' compensation judge Jerome Bulavsky.
After examining her in August, Dr. Steven Nagelberg attributed 90 percent of her condition to the work incident and 10 percent to her pregnancy.
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