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Monday, March 09, 2009

Free Internet Press Newsletter - Monday March 9 2009 - (813)

Monday March 9 2009 edition
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More FHA-Backed Mortgages Default Without A Single Payment
2009-03-08 15:33:54

The last time the housing market was this bad, Congress set up the Federal Housing Administration to insure Depression-era mortgages that lenders wouldn't otherwise make.

This decade's housing boom rendered the agency irrelevant. Americans raced to aggressive lenders, seduced by easy credit and loans with no upfront costs; but the subprime mortgage market has crashed and borrowers are flocking back to the FHA, which has become the only option for those who lack hefty down payments or stellar credit. The agency's historic role in backing mortgages is more crucial now than at any time since its founding.

With the surge in new loans, however, comes a new threat. Many borrowers are defaulting as quickly as they take out the loans. In the past year alone, the number of borrowers who failed to make more than a single payment before defaulting on FHA-backed mortgages has nearly tripled, far out-pacing the agency's overall growth in new loans, according to a Washington Post analysis of federal data.

Many industry experts attribute the jump in these instant defaults to factors that include the weak economy, lax scrutiny of prospective borrowers and most notably, foul play among unscrupulous lenders looking to make a quick buck.

If a loan "is going into default immediately, it clearly suggests impropriety and fraudulent activity," said Kenneth Donohue, the inspector general of the Department of Housing and Urban Development, which includes the FHA.

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Editorial: A Start On Health Care Reform
2009-03-08 15:33:28
Intellpuke: This editorial appeared in the New York Times edition for Sunday, March 8, 2009.

President Obama has shown both courage and sound judgment pressing for quick action on comprehensive health care reform, even in the midst of the country’s deep economic crisis. He has rightly stressed the urgency of reining in skyrocketing health care costs that are straining the budgets of families, businesses, and federal and state governments.

But his proposals, for all of their ambition, do not fully answer two central questions: how to cover tens of millions of uninsured Americans, and how to reform the health care system to reduce costs and improve the quality of care.

Mr. Obama has decided to let Congress thrash out the details of those issues, with the White House providing guidance along the way. Democratic leaders in Congress, many of whom are far more versed in the issues than the president is, will have to step up and fashion an effective bill. If they falter, Mr. Obama will need to step in with a clear vision and vigorous leadership.

To his credit, the president has tackled the first tough issue of how to pay for expanded coverage and systemic reforms. His budget has proposed huge expenditures - $634 billion over 10 years - as a down payment, and it clearly specifies where to find the money.

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Pentagon's Unwanted Projects In Earmarks
2009-03-08 15:32:58

When President Obama promised Wednesday to attack defense spending that he considers wasteful and inefficient, he opened a fight with key lawmakers from his own party.

It was Democrats who stuffed an estimated $524 million in defense earmarks that the Pentagon did not request into the 2008 appropriations bill, about $220 million more than Republicans did, according to an independent estimate. Of the 44 senators who implored Defense Secretary Robert M. Gates in January to build more F-22 Raptors - a fighter conceived during the Cold War that senior Pentagon officials say is not suited to probable 21st-century conflicts - most were Democrats.

Last July, when the Navy's top brass decided to end production of their newest class of destroyers - in response to 15 classified intelligence reports highlighting their vulnerability to a range of foreign missiles - seven Democratic senators quickly joined four Republicans to demand a reversal. They threatened to cut all funding for surface combat ships in 2009.

Within a month, Gates and the Navy reversed course and endorsed production of a third DDG-1000 destroyer, at a cost of $2.7 billion.

"Too many contractors have been allowed to get away with delay after delay in developing unproven weapon systems," Obama said, attributing $295 billion in cost overruns to "influence peddling" and "a lack of oversight" that produces weapons meant "to make a defense contractor rich" instead of securing the nation.

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Suicide Attack Near Baghdad Police Station Kills 28, Injures 57
2009-03-08 15:32:25
At least one suicide bomber blew himself up in the busy early morning hours on Sunday near the police academy killing 28 people including five policemen and injuring 57, some of them seriously, according to Iraq's Interior Minister.

The area near the police academy has been a frequent target for suicide bombers since shortly after the American invasion in 2003. Just over three months ago, on Dec. 1, a bomber wearing a vest blew himself up in almost the same location killing 15 people.

Sunday’s bombing came after a period of relative calm in the capital and a peaceful election at the end of January. However, many military officials, Iraqi and American, have predicted that the post-election period would see an increase in violence.

This bombing took place at an intersection between the police academy and the oil ministry. “There was a demonstration of oil employees who were demanding their salaries, about 100 people,” said Amar Sami Abdul Hussain, a police lieutenant who was stopping vehicles, reporters and onlookers from approaching the site of the bombing.

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Republican Senators: Some Big Banks Can Fail
2009-03-08 15:33:42
U.S. Sens. John McCain and Richard Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail.

“Close them down, get them out of business,” Shelby, the senior Republican on the Banking Committee, told ABC’s “This Week With George Stephanopoulos.” “If they’re dead, they ought to be buried.”

While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has “always been a problem child.”

McCain, appearing on “Fox News Sunday,” echoed that sentiment without identifying any banks. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the “hard decision” to let “these banks fail.”

Investor concern about the future of banks, including Citigroup, have been one issue weighing heavily on the stock market. Financial shares continue to be among the worst hit, despite the trillions that governments are spending to try and restore the system. Citigroup shares, for example, closed at $1.03 on Friday; two years ago, the stock was trading at $55 a share.

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New Chairman Boos Republican Party When He Isn't Cheerleading
2009-03-08 15:33:13

None of the guests seemed to be complaining, yet Michael Steele stood at a Fifth Avenue fund-raiser in New York on Wednesday evening and defended his month-old tenure as chairman of the Republican National Committee.His glasses had been askew since he pleaded his case on television that morning, and now he threw up his arms in admission.

Yes, some of his problems in the job were “self-inflicted,” he said, “but I do things to get a reaction.”

There is no wondering which things he meant. Since taking office, Steele has joyfully gone to war with his own party, often live on television.

Most chairmen wave the party flag; Steele smiles and shreds it. A man of constantly colliding analogies, he compares Republicans to drunks in need of a 12-step program and to the mentally ill. He has insulted Rush Limbaugh and moderate Republican senators alike, and he has promised a “hip-hop makeover” that would attract even “one-armed midgets” to his party.

Steele is the party’s first African-American chairman, his election a response to a history-making Democratic president. But now his performance is raising questions: Does he have a strategy, or is he simply saying whatever comes to mind? Republican moderates have staked hopes of reform on him, betting that his race and frank style will foster a new image of the party, but is this what they expected?

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Gunman Kills Pastor Shot Front Of Congregation In Illinois Church
2009-03-08 15:32:45
A gunman walked down the aisle of a church during a Sunday service and killed the pastor, then stabbed himself and two others as parishioners wrestled him to the ground, said authorities.

The man walked into the sprawling brick First Baptist Church in Maryville shortly after 8 a.m. and briefly spoke with Pastor Fred Winters before pulling out a .45-caliber handgun and shooting Winters once, said Illinois State Trooper Master Trooper Ralph Timmins.

The gun jammed before the man could fire again, said Timmins. The attacker then pulled out a knife and injured himself before churchgoers subdued him. Two parishioners involved in the struggle also suffered knife wounds, said Timmins.

Timmins said officials don't know if Winters and the suspect knew each other.

''We don't know the relationship (between the gunman and pastor), why he's here or what the circumstances came about that caused him in the first place to be here,'' said Timmins.

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Tsvangirai Leaves Zimbabwe For Health Care, After Crash That Killed His Wife
2009-03-08 15:32:02
Zimbabwe's prime minister, injured in a car crash that killed his wife, has left his troubled homeland for medical treatment in Botswana, an official that neighboring country said Sunday.

Clifford Maribe, spokesman for Botswana's foreign ministry, said Morgan Tsvanigirai arrived in Botswana Saturday, a day after the crash. State media in Zimbabwe had said only that Tsvangirai had left the country for treatment, and his party had refused publicly to specify where he had gone.

A party official, though, had said on condition of anonymity that the prime minister was in Botswana, where Tsvangirai spent months last year, fearing for his life in his homeland at the height of a standoff with President Robert Mugabe.

Last month, Tsvangirai and Mugabe formed a coalition government, but the union has been rocky from the start.

Botswana President Seretse Ian Khama has been one of the few African leaders to openly criticize Zimbabwean Mugabe, who has ruled Zimbabwe since independence from Britain in 1980 and is accused of destroying its economy and trampling on democratic and human rights.

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