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Who's Still Eating Peanut Butter?

Paul Kiesel — Tue, 10 Feb 2009 20:05:56 GMT

From CNN:

Peanut butter makers not affected by the deadly salmonella outbreak linked to a Georgia peanut plant are trying to get consumers to keep buying peanut butter. It could be an uphill battle.

J.M. Smucker Co. wants to assure consumers that its Jif brand of peanut butter is safe to eat.

Companies such as ConAgra Foods Inc. and J.M. Smucker Co. have started running ads and offering coupons, trying to lure peanut butter customers as sales have plunged at least 20 percent since the salmonella outbreak.

Eight people have died and nearly 600 have been sickened in the outbreak. The original peanut butter recall launched weeks ago has expanded to include more than 1,000 products.

On ConAgra's Web site, a letter assures customers that the company's peanut butter is safe.

"ConAgra Foods, the maker of Peter Pan Peanut Butter, has confirmed that none of the ingredients used to make Peter Pan Peanut Butter come from Peanut Corporation of America, the company linked to the government's current salmonella investigation," the letter says. "We are extremely confident in the safety protocols."

J.M. Smucker, maker of Jif peanut butter, had a similar message for customers.

"Our Smucker's peanut butter brand and peanut butter products are safe for consumption. The J.M. Smucker Company does not purchase peanuts or any ingredients from Peanut Corporation of America," its Web site says.

The Peanut Corporation of America is under investigation by the Food and Drug Administration, and the FBI searched its Blakely, Georgia, plant on Monday, CNN affiliate WALB-TV in Albany, Georgia, reported.

Americans have shied away from peanut butter despite the FDA's assurances that major-label peanut butter in grocery stores is safe.

With eight dead and almost 600 sick [. . .]

For the rest of the article, click here.

Originally posted at InjuryBoard by Paul Kiesel

Foreclosure Exposure

Paul Kiesel — Fri, 23 Jan 2009 19:30:38 GMT

What are the foreclosure numbers nationwide? It appears nobody knows the exact numbers, but many fear it's much greater than what's been reported.

Below is an article from CNNMoney that discusses the problems with the numbers that have been reported. Keep in mind, there is a wave of foreclosures that will take place during the first half of 2009, due to prime borrowers facing interest rate resets on pay-option ARM loans (loans that were originated in 2006 and 2007). This will result in higher foreclosure inventory and a slower recovery from all of the foreclosures that occurred in 2008.

Click here for an article that discusses and prognosticates California's looming second foreclosure flood and click here for anyone who needs information about protecting one's self, if he or she chooses to attempt a loan modification with their lender.

From CNNMoney

Housing might be in worse shape than we think.

There is probably even more excess housing inventory gumming up the market than current statistics indicate, thanks to a wave of foreclosures that has yet to hit the market.

The problem: Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market.

"That's not good news," said Pat Newport, an analyst with IHS Global Insight. "[Excess] inventory is the biggest problem in housing these days, and it leads to lower housing prices, which leads to more foreclosures."

RealtyTrac, the online marketer of foreclosed properties, recently discovered that it has far more foreclosed properties listed in its database, which the company compiles using courthouse records, than there are listed in the multiple listing services (MLS) maintained by real estate agents.

RealtyTrac looked at listings in four states, California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database.

The scope of the problem isn't clear, but it could be huge considering that RealtyTrac has a total of 1.5 million bank-owned properties on its site.

"Many properties that should be listed on the MLS are not listed on the MLS," said Lawrence Yun, chief economist for the National Association of Realtors (NAR).

Underestimating inventory

The National Association of Realtors calculates official housing inventory statistics using data from the multiple listing services. By that measure, there were 4.2 million existing homes for sale in November, an 11.2-month supply at the current sales pace, up from a 10.3-month supply in October.

But now it seems quite possible that these figures, which are already at record highs, are underestimating the situation. And if that's the case, it could take much longer for the housing market recovery than analysts currently expect.

Until supply can be brought down to a more normalized level of six to seven months, home prices will continue to come under pressure, according to Yun.

"It could be a worse problem than we think," he said.

L.J. Jennings, a real estate broker with Pyramid Real Estate and Investments in Oakland, Calif., sees plenty of evidence that it is.

"There are a number of properties in my area that have actually been taken back by the banks, but have not hit the market yet," he said. "Once a bank repossesses a property, in some cases, it can take more than six months to hit the market."

He cites a handful of examples offhand, including a single-family home in Richmond seized in early October, a condo in San Ramon taken back the same month and a four-family building in Oakland that was repossessed in July.

"Either lenders are overwhelmed and can't get these properties back on sale quickly" said RealtyTrac spokesman Rick Sharga, "or they're deliberately slowing down."

Why there's a delay

The chief problem is probably system overload: Lenders are just not prepared to handle the sheer numbers of foreclosures that they have on their books. Banks took back about 860,000 in 2008 - more than twice the number in 2007 - according to RealtyTrac. Before the housing crisis hit, it took only about a month to get a bank-owned foreclosure on the market.

Lenders still insist they try to act as swiftly as possible. According to Tom Kelly, a spokesman for Chase (JPM, Fortune 500) Mortgage, their goal is to cut their losses on these homes, which are expensive to maintain, as fast as possible.

But banks might hold back listings in areas where they already have lots of homes for sale in order to avoid flooding the market, according to Michael Youngblood, a financial analyst and founder of Five Bridges Capital, an asset management company.

"If lenders have a significant number of properties in a limited area, they may want to stagger putting them back on the market," he said.

Eve Alexander, a real estate broker with Buyers Broker of Florida in Orlando, attributes the delays to the general malaise that's overtaken the lending industry as it's imploded.

"I think banks are dragging their rears about doing just about everything," she said. "They have so much going on, and there's so much red tape and the people don't care, nothing gets done."

There are also batches of bank-owned homes that don't appear on the multiple listing services because lenders are trying to sell them via bulk and auction sales to investors as well as individuals, according to John Mechem, public affairs director for the Mortgage Bankers Association.

He adds that it's also taking much longer to get many foreclosed homes in decent enough shape to put on the market. (see This home for sale stinks.)

Bank-owned properties are in worse condition than ever because the foreclosure process is taking longer than ever. As much as a year can pass between the time a borrower first misses a payment and the final auction sale, according to Youngblood. During that time, houses often deteriorate because owners have neither the money nor the incentive to maintain them. Some disgruntled homeowners may even deliberately damage homes before they leave.

"According to our servicing folks, it's taking more time for lenders to get properties in saleable condition," said Mechem.

The phenomenon of a growing ghost inventory doesn't promise to get better anytime soon, as long as the rate of foreclosures continues to ravage the market. There were more than 3.1 million foreclosure filings in 2008, according to RealtyTrac.

Said Sharga: "I don't see how we can avoid another 3 million in 2009."

Originally posted at InjuryBoard by Paul Kiesel

Rep. Barney Frank: No "Free Rides" for People Facing Foreclosures

Paul Kiesel — Thu, 13 Nov 2008 16:22:00 GMT

House Committee on Financial Services Chairman Barney Frank noted yesterday that a bailout program for troubled homeowners is needed to prevent the foreclosure crisis from spinning out of control. However, he also emphasized that not all borrowers should be rescued.

"Diminishing foreclosures is an important part of getting out of this [crisis]," Rep. Frank said in an opening statement at a Congressional hearing focused on what banks were doing to modify loans and further assist borrowers facing foreclosure, while adding that taxpayer money should not provide a "free ride" to people facing foreclosure, and warned that aid should not go to homeowners who should have never been in a mortgage to begin with.

"There is, in my judgment, zero likelihood that taxpayer dollars will go to those who should have never have had loans in the first place," Rep. Frank said.

Banks, like Bank of America, Citigroup and JP Morgan Chase, have started programs to modify loans for borrowers that are in danger of being foreclosed on. However, all of the programs have certain criteria that need to be met in order for a borrower to qualify (i.e. being in default; which is problematic because it could encourage frustrated borrowers who are in underwater mortgages, and who are not behind on their payments, to default in order to receive a loan modification) and the loan modification programs also appear to be overly streamlined, so it remains to be seen if the loan modification programs being offered by the banks will provide desirable results.

And even with the banks tackling the foreclosure crisis with their own loan modification programs, Mark Zandi, chief economist for Moody's Economy.com, estimates that 1.6 million Americans will lose their homes this year through foreclosure or distressed sale. Zandi, who was not at Rep. Frank's hearing, has also stressed for the past year (at least since December 2007) that another 1.9 million families will their homes in 2009, regardless of wide-scale loan modification programs.

Originally posted at InjuryBoard by Paul Kiesel

McCain Mortgage Plan: The Wrong Approach

Paul Kiesel — Fri, 10 Oct 2008 22:40:28 GMT

John McCain announced, during the last Presidential Debate, that he has a plan to combat rising foreclosure rates and curb the amount of underwater mortgages throughout the country. McCain proposes that the government should buy $300 billion worth of "bad" mortgages and refinance them. McCain did not get into the specifics of his plan or even dare to disclose that his plan would transfer the financial burden and responsibility to taxpayers, thus, taking lenders off the hook.

Members from his own party and even his economic adviser, Douglas Holtz-Eakin, are either angered by McCain's proposal or confused by its purpose (when there are several other better plans and strategies to combat the mortgage crisis). Holtz-Eakin conceded that the plan WOULD place a burden on taxpayers and, under the proposal, taxpayers would be responsible for the difference in value between the old and new mortgages. It is very likely that McCain's plan would result in a loss of taxpayer money.

Another problem with the plan is that if 1 in 6 homeowners are considered to be in "underwater mortgages." Noting that over $5 trillion of mortgages are out in the market, that would result in about $678 billion worth of mortgages that could be considered "bad." McCain's round and even number of $300 billion doesn't even address half of the people he's trying to help. It's almost as if he arbitrarily came up with the number after hearing Senators Barack Obama's and Joe Biden's foreclosure relief plans and approach to helping troubled borrowers.

Even The National Review -- a magazine that is considered to be highly influential amongst conservatives -- railed against the plan as "creating a level of moral hazard that is unacceptable [. . .] a gift to lenders who abandoned any sense of prudence during the boom years." Ouch.

Granted, McCain's plan could be enacted under the rules (Sec. 109 and 110) of the recently passed bailout plan, however, his plan departs from two major issues: 1. The bailout plan relies on the lenders and servicers taking a hit -- as Holtz-Eakin proves while quoted on a conference call per the McCain Mortgage Plan, " This bypasses that step." 2. McCain, just six months ago, said he wouldn't intervene to help borrowers or lenders, noting that he didn't understand how "Only 55 million [homeowners] have a mortgage at all and 51 million are doing what is necessary [. . .] to make their payments on time. That leaves us with a puzzling situation: How could 4 million mortgages cause this much trouble for us all?" (New York Times, 3/25/08).

It sounds like McCain's missing the days when Phil Gramm was his economic adviser, who took control of everything economics for John McCain, while trying to convince Americans, whom he coined as being a "nation of whiners," that the fundamentals of the economy are strong and that we're just in a "mental recession." Phil Gramm rolled the dice with his choice of words and it cost him his job with the McCain campaign. The Arizona senator's own role of the dice will likely come up snake eyes on this all too simplified and myopic mortgage plan.

Originally posted at InjuryBoard by Paul Kiesel

Biden on McCain's Bailout Proposal: "What’s Notable is What’s not in the Package"

Paul Kiesel — Thu, 25 Sep 2008 19:07:37 GMT

Senator Joe Biden said today in Pennsylvania that the biggest problem with John McCain's proposal to the Wall Street Bailout, and what caught his eye, was what was missing from it.

"What’s notable is what’s not in the package. The silence on issues relating to the middle class is deafening in the package John’s put forward. There is no help for families struggling to stay in their homes. If John keeps changing his rhetoric, but not changing the worn-out philosophy that got us into this spot, if John continues to do that, ladies and gentlemen, why is John expecting us to believe he will be an agent of change? Look, that’s the reason we need change," Biden told a crowd of about 1,000 in Wilkes-Barre, Pennsylvania, a town very close to his hometown of Scranton.

Biden went on to say, "Of all the important issues we face, all of them, all of them, John McCain has been profoundly out of touch because he’s been so in touch with President Bush’s position on those issues and nowhere, nowhere has that failed philosophy, that failed philosophy of the past eight years been more exposed than in the recent and immediate economic crisis we’re facing in this country."

And some congressional Republicans are seeing Biden's points, too. Alabama senator Richard Shelby, the ranking Republican on the Senate Banking Committee, who co-sponsored the Dodd-Shelby housing rescue bill back in July, told members of the press, shortly after leaving the financial bailout meeting with Senators Barack Obama, Chris Dodd and John McCain, "We will not have a deal." He claims that the bill has not changed enough in the last 24 to 48 hours (and needs to be) and that it doesn't meet the needs of homeowners, seniors, small businesses and taxpayers. "It will not solve problems, it will create more problems," Shelby said.

Chris Dodd, chairman of the Senate Banking Committee, who also attended the meeting, said Thursday that the meeting was contentious and blasted what he calls McCain's inaction. "I'm not quite sure what John McCain said at the meeting. He said something [. . .] He had no indication he was for any particular plans. I don't know where he is on all of this," Dodd said.

Earlier in the day, congressional members said that a deal had been agreed upon, however, it looks like the debate over the financial bailout may spill over into next week.

Originally posted at InjuryBoard by Paul Kiesel

Biden Elucidates McCain's Regulatory History

Paul Kiesel — Tue, 23 Sep 2008 16:17:12 GMT

Up until recent weeks, John McCain did not have a history of supporting regulatory oversight. McCain's camp has vigorously denied or has tried to amend statements that prove otherwise, especially since the federal government's rescue of AIG and President Bush's proposed bailout last week. The McCain camp has tried saying that members of the media and the Obama-Biden campaign have been distorting the truth. But who's really been distorting the truth in recent weeks?

Senator Joe Biden has said that Democratic presidential candidate Barack Obama and he would "increase regulatory oversight of the very people John [McCain] has refused to regulate. Biden said this as recent as last Tuesday, September 16, on CNN's "American Morning." Both Senators Barack Obama and

McCain, on the other hand, has consistently described himself as an opponent of most government regulation and has comprised a staff of economic advisers who are in lockstep with him and President Bush on economic policy. For instance, in early 1995, after Republicans had taken control of Congress, McCain proposed an across-the board moratorium on all federal regulations, but that subsequently failed in Congress. He was quoted as saying that excessive regulations were “destroying the American family, the American dream” and voters “want these regulations stopped.” The moratorium measure was unsuccessful.

McCain often takes his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman. Phil Gramm was one of the more influential congressmen to pass deregulation bills in the late 90s and 2000 (i.e. Gramm-Leach-Bliley, Commodity Futures Modernization Act). Phil Gramm also said in July 2008 that the American economy was fine, healthy, and that we are a "nation of whiners" in a "mental recession." In order to distance himself from those comments, McCain would relieve Gramm of his duties as an economic adviser to his presidential campaign a couple weeks later.

In March 2008 McCain said in an interview with the Wall Street Journal, as the mortgage crisis was worsening, "I'm always for less regulation. But I am aware of the view that there is a need for government oversight. I think we found this in the subprime lending crisis -- that there are people that [cheated] the system and if not outright broke the law, they certainly engaged in unethical conduct which made this problem worse. So I do believe there is a role for oversight."

And as the situation on Wall Street has grown more severe, as there is now a proposed $700,000,000,000 bailout on the table by the Bush Administration, McCain has gradually added increasing regulation of the financial sector to his "reform projects," but he has not provided any specifics on what that reform would look like.

Therefore, Biden's statements on McCain's track record as a "deregulator" prove to be accurate, even though McCain's position has rapidly changed over the course of his campaign and even more so in recent weeks.

Originally posted at InjuryBoard by Paul Kiesel

Foreclosure Crisis: Before a Subprime Problem, Now an Everybody Problem

Paul Kiesel — Fri, 12 Sep 2008 15:44:18 GMT

August foreclosures hit an all-time high: 304,000 homes were in some stage of default and 91,000 families lost their homes. The hardest hit housing markets continue to be in Arizona, California, and Nevada.

Nevada once again had the highest rate of filings in the nation (one in every 91 households), as more than 101,000 Californians received foreclosure notices (one in every 130 households), and another 35,000 people lost their homes.

Fannie Mae chief economist Doug Duncan said, "It's been my view for a long time that foreclosures won't peak until the last three months of 2008," (CNNMoney.com, 9/12/08). And that might even be an optimistic outlook.

Take into account that foreclosures or default notices continue to rise steadily at a monthly rate that's 10% greater from the previous month, throughout all of 2008. Even if you compare August 2008 numbers from August 2007, when the foreclosure crisis was already underway, the numbers from last month are still 27% higher than August of last year. The two variables that weren't present last year that are now a growing concern for economists: the unemployment rate and option ARM loan resets. The latter will increase sharply towards the end of this year, into early next year. There are too many of those teaser rate payment loans out in the market that are about to reset to ballooned monthly payments, and too many filled with several TILA violations (which allowed this subsequent problem to occur), to not have a dramatic impact on the recovery of the economy in the short term.

Since last August, over 3/4 of a million homes have been repossessed and we're not even halfway through the meltdown yet. Lehman Brothers is going to be bought by another bank (with or without the help of the government; it expects to post $3.9 billion in losses for the third quarter), and Washington Mutual has been contacted by (or is contacting, according to some reports) JPMorgan Chase to broker some type of deal.

As the presidential candidates discuss fixing the economy and a couple touch upon restoring "small town values," ultimately, the former has to be the more pressing issue for the next president and vice president when it comes to dealing with and pulling us out of this financial quagmire. "Small town values" might sound like a good talking point on the campaign stump, but in order to compete in a global economy and allow Americans to bounce back from cash-strapped times and a Wall Street that was negligent and running wild with mortgage-backed securities, we need the next president to absorb this dilemma and consider the urgency and value of restoring order, regulation and confidence back into the financial markets. It'll help small towns and big cities alike.

Originally posted at InjuryBoard by Paul Kiesel

McCain-Palin Economic Plan Lacks Transparency in Wall Street Journal Op-Ed

Paul Kiesel — Wed, 10 Sep 2008 19:03:12 GMT

John McCain and Sarah Palin gave their opinions on the federal government's takeover of Fannie Mae and Freddie Mac, yesterday, in the Wall Street Journal. Here are a few of the pair's stances: "The bailout of Fannie Mae and Freddie Mac is another outrageous, but sadly necessary, step for these two institutions [. . .] Treasury has broadly followed the McCain plan, outlined months ago, and gets at the short-term heart of the problem [. . .] [The federal bailout] terminates future lobbying, which was one of the primary contributors to this great debacle [. . .] Reforms are necessary now to make mortgage lending and banking organizations more transparent," (online.wsj.com, 9/9/08).

First, the bailout was necessary and it is unfortunate that it had to occur. Could it have been prevented? Maybe years ago, before deregulation bills laxed lending industry rules, like the Commodity Futures Modernization Act of 2000, thus, allowing the lending industry to act like a teenager whose parents were out of town for the weekend... Or several years. Economists, conservative or liberal, will agree on that.

However, when McCain and Palin suggest that the Treasury has "broadly followed the McCain plan, outlined months ago," is that the same McCain plan that the senator discussed with reporters back in March: "Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates [. . .] Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary — working a second job, skipping a vacation and managing their budgets to make their payments on time [. . .] it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers," (New York Times, 3/25/08).

I guess March would qualify as months ago. And it does seem like McCain is expressing his economic policies (or laying out "McCain's plan") and how he'd react to the mortgage/housing crisis as Commander-in-chief: that a bailout is a non-option, which is made clear when McCain said, "[. . .] what is not necessary is a multibillion dollar bailout for big banks and speculators, as Sens. Clinton and Obama have proposed. There is a tendency for liberals to seek big government programs that sock it to American taxpayers while failing to solve the very real problems we face." But, it doesn't appear that the Treasury department is using "the McCain plan," as Palin and he suggest. The plan the Treasury is following, not to a tee, but more closely than McCain's, is the plan that both senators Hillary Clinton and Barack Obama called for the same week that McCain was criticizing homeowners, many of who were suffering from mortgages littered with TILA violations.

As to the lobbyists that McCain attributes as being "one of the primary contributors to this great debacle," why is it that one of those lobbysists, former Texas senator Phil Gramm (a former lobbyist for UBS), was McCain's former economic adviser and co-chair, until he was forced to leave McCain's campaign in July after making some careless remarks? Why would McCain surround himself with Gramm, a long time political ally and personal friend, along with seven other lobbyists, and at least 20 other major McCain fundraisers who have lobbied on behalf of Fannie and Freddie in recent years?

Those seven lobbyists working on the McCain-Palin campaign, courtesy of CNN.com:

• One: Campaign manager Rick Davis is a major telecommunications lobbyist.

• Two: Senior foreign policy adviser Randy Scheunemann recently faced scrutiny over his foreign lobbying on behalf of the Republic of Georgia, which has been embroiled in a military conflict with Russia.

• Three: Senior adviser Charlie Black was a foreign lobbyist for dictators in Zaire and Angola in the 1980s, fodder for the liberal group MoveOn.org.

One of the group's recent ads charged, "Charlie Black said he didn't do anything wrong. John McCain should tell Black he did. Call John McCain and tell him to fire Charlie Black."

• Four: Frank Donatelli, the Republican National Committee's liaison to the McCain campaign, has had clients including Exxon Mobil.

• Five: Economic adviser Nancy Pfotenhauer has lobbied for corporate giants like Koch Industries.

"Both John McCain and Sarah Palin have challenged special interests, challenged their own party. That's the test of courage," Pfotenhauer has said.

• The final two lobbyists are McCain's congressional liaison, John Green, and national finance Co-chairman Wayne Berman. They both lobbied for Fannie Mae, the troubled mortgage giant.

So it's more than likely that the "lobbyists" McCain refers to as enablers in this mortgage crisis aren't leaving the political landscape anytime soon, especially if McCain becomes president.

Finally, in regards to McCain's and Palin's call for reforming the two mortgage giants and providing better oversight to the lending industry as a whole, why is it that Phil Gramm's name continues to be mentioned as a possible Treasury Secretary in a McCain-Palin administration? Gramm is the author of the Commodity Futures Modernization Act passed in 2000. There is no coincidence that his energy and lending deregulation bill, among several other deregulation bills like Newt Gingrich's Home Ownership and Equity Protection Act of 1994 (which was written to protect consumers against predatory loans, but it instead helped spark the subprime boom), opened the door for a lot of the problems seen throughout the subprime crisis (i.e. see what happened or is happening at Bear Stearns, Countrywide, IndyMac, WaMu, etc.).

It was through Gramm’s deregulation (as a senator) that helped set the stage for an explosion of banks slicing up subprime mortgages, bundling them with other mortgage slices, to hide the credit risks (and not being transparent about how the mortgages were written as millions of option ARM mortgages violated the Truth in Lending Act), and selling mortgage stew to other investment firms. And as a lobbyist, just as recently as December 31, 2007, Gramm was lobbying for Swiss bankers to help kill the Helping Families Save Their Home and Bankruptcy Act, a bill that would have let bankruptcy judges adjust mortgage terms so American families facing foreclosure could repay their loans and keep their homes.

Is this the reform that McCain potentially plans to bring with him to the White House, if he's elected? Is this the "promise [to] the American people that our administration will be different?"

People change their minds all the time. Both Democrats and Republicans do this constantly in Congress (McCain was initially against the Bush tax cuts and then favored them; Palin was for the "Bridge to Nowhere" and then, after becoming Governor of Alaska, she wasn't for it). President Bush has done this, too, as he signed a housing bill in late-July that he adamantly stated a week earlier he would veto. But on the issues brought up in the Wall Street Journal Op-Ed by the two self-proclaimed mavericks, with McCain and Palin calling for reform to the lending industry, more transparency amongst lenders and less future risk of a taxpayer bailout (issues that McCain has said he's not too sharp on and relies on his economic advisers opinions to make up for his lack of experience, "The issue of economics is not something I’ve understood as well as I should [. . .] I would rely on the circle that I have developed over many years of people like Jack Kemp, Phil Gramm [. . .]”), it seems like there's just too much old "Washington" and lobbyist baggage to fit on the "Straight Talk Express" plane.

People change all the time, however, as the old adage goes: You can't teach an old dog new tricks. An old maverick is likely the same.

Originally posted at InjuryBoard by Paul Kiesel

On Wall Street: McCain vs. Obama

Paul Kiesel — Thu, 04 Sep 2008 20:45:05 GMT

Barack Obama and John McCain have both stressed the need for greater transparency and imposing capital requirements on financial institutions since the debacles at Bear Stearns, IndyMac and Fannie & Freddie.

Also, considering that the economy is one if not the main concern for most voters, it's interesting that during the Republican Convention that many speakers, including former New York Mayor Rudolph Giuliani and Alaskan Governor Sarah Palin, have omitted economic policy from their speeches: fixing the housing crisis, credit crunch, improving the unemployment rate (tomorrow morning, over 75,000 more jobs lost in Q3 are expected to be announced) and curbing inflation.

Below are the two candidates' stances on "Wall Street." To see the candidates' other economic policies, click here: CNNMoney.com.

McCain

· Increase capital requirements on financial institutions.

· Remove some of the regulatory, accounting and tax impediments to raising capital.

· Examine how banks and other firms value assets that exacerbated the credit crunch.

· Increase transparency of complex financial instruments.

"Capital markets work best when there is both accountability and transparency. In the case of our current [credit] crisis, both were lacking." -- McCain

Obama

· Impose liquidity and capital requirements on investment banks.

· Streamline regulatory framework of the financial services sector.

· Create an oversight commission that would advise the president, Congress and regulators on the health of and risks facing financial markets.

· Give Federal Reserve supervisory power over any bank that borrows from it.

"Let me be clear: the American economy does not stand still, and neither should the rules that govern it. The evolution of industries often warrants regulatory reform..." -- Obama

Originally posted at InjuryBoard by Paul Kiesel

On Mortgage Fraud: McCain vs. Obama

Paul Kiesel — Thu, 04 Sep 2008 20:13:19 GMT

Senators Barack Obama and John McCain want to go after predatory lenders. Senator Obama, contrary to Alaskan Governor Sarah Palin's claims about his Senate record in her acceptance speech at the Republican National Convention (RNC) last night, introduced the STOP FRAUD Act in the Senate with Senator Dick Durbin, and now it is a major part of the Illinois senator's platform. Senator McCain called for creating a task force to investigate criminal wrongdoing in the mortgage lending and securitization industry, which, incidentally, had already been created by the FBI long before McCain urged its formation. (The task force was created in 2005, and McCain didn't call for one until this year, just a few months ago; however, certain states ramped up the effort in the last half of 2007 and the first half of 2008, like California, which created an FBI task force named SCAM in May 2008.)

Below are the two candidates' stances on "Mortgage Fraud." To see the candidates' other economic policies, click here: CNNMoney.com.

McCain

· Create a Justice Department task force that punishes individuals or firms that defrauded innocent homeowners or forged loan application documents.

· Task force would also assist state attorneys general investigating abusive lending practices.

· Improve transparency in the lending process so that borrowers know exactly what they are agreeing to.

"Lenders who initiate loans should be held accountable for the quality and performance of those loans and strict standards should be required in the lending process." -- McCain

Obama

· Boost funding for law enforcement programs aimed at housing fraud by $40 million.

· Establish new federal criminal penalties for mortgage professionals found guilty of fraud.

· Require lending professionals to report suspicious or fraudulent activity.

· Establish a database of censured or debarred mortgage professionals, so borrowers can easily check the credentials of lenders.

· Establish a standardized estimate of the total annualized cost of a mortgage loan to make it easier for borrowers to compare different loans.

"We must establish stiff penalties to deter fraud and protect consumers against abusive lending practices."-- Obama

Originally posted at InjuryBoard by Paul Kiesel