No Mike King...You're Out of Touch (UPDATED)

Here is the latest column by AJC columnist Mike King.

It takes a special kind of arrogance for the Fulton-Dekalb County Hospital Authority to stiff Emory and Morehouse medical schools out of $63 million and then demand the schools keep sending doctors to Grady Memorial Hospital. As a condition of turning over the hospital to professional management, the authority demanded that Emory and Morehouse give a written guarantee they will continue their residency and teaching programs at Grady. The money for those programs comes almost entirely from the state and federal governments, but the Grady board has kept much of it in recent years to use for other expenses. The hospital's mismanagement is now threatening the quality of on-the-job training both schools offer. It's one thing to ask Emory and Morehouse to renegotiate the debt, which both have said they are willing to do. But demanding it, as well as a promise that they won't cut back their programs, reveals how truly out of touch with reality the authority can be.

Now, really quickly, here is a run down for those that haven't been following this story. He is speaking of Grady Hospital, which is one of the largest hospitals in the country. It services the poor and is in such dire financial shape that it needs somewhere in the neighborhood of half a billion dollars to stay afloat. Emory and Morehouse provide much of the staff at the hospital (with Emory providing most between the two) and each university gets paid for providing the staff. According to King, Grady wants to not only be relieved of their yearly obligations but they insist that each university's staff remain on duty. Grady is a public hospital so ultimately it is "owned" by the folks. Lastly, and this is quite important, Grady is designed for the very poor or indigent, and by its sheer size it services almost all of the poor folks in Fulton, Dekalb and frankly many other counties. Without it, all the nice hospitals that treat wealthy folks in the area would have to treat these poor folks as well.

Now, I won't argue that arrogance is a trait exhibited by several folks in this mess, however if this is what he is focused on, he really is out of touch. First of all, there are plenty of people out there that believe that Emory and Morehouse should be paying Grady for use of their hospital, not the other way around. (for a full summary on this story including an explanation why Emory and Morehouse should be paying please follow this link) Thus, by demanding that staff continue to work without payment, seems, to many, only fair. Second of all, Grady is near financial collapse and it may take up to half a billion dollars in order to save it. Given that staggering figure, is the important point really whether someone is asking or demanding that debts be forgiven. After all, if Grady needs half a billion dollars, Emory and Morehouse can get in line with a plethora of creditors.

Ah, but unlike most creditors, Grady expects, not asks, these two to continue providing services. Of course, they expect that Emory and Morehouse staff continue to work. Emory and Morehouse account for almost the entire staff. Without them there is no hospital. Without Grady, the poor in Fulton and Dekalb have no place to be treated. If Grady is no longer the whole entire medical system in Fulton, Dekalb and beyond is in serious crisis. (Without Grady some of the hospitals for the affluent would actually have to treat these folks and no one can have that now can they)

Second Emory and Morehouse need Grady a lot more than the other way around. First, Grady is a public hospital so it really belongs to the people. If the folks want it kept open, they WILL infuse it with cash one way or the other. On the other hand, Morehouse uses Grady for nearly all of its medical school and residency training. In other words, without Grady there is no Morehouse medical school. Emory maintains several for profit hospitals however the bulk of their training is also conducted at Grady. Furthermore, Grady is the main selling point to perspective Emory medical students. Grady is one of the biggest hospitals in the country and the world, and going to Emory medical school allows perspective medical students to train there. In other words, without Grady, there is not Morehouse medical school. While there is an Emory medical school, it goes from being an elite school, to the equivalent of EastWest Texas State Community College Medical School. (please, no one be offended, I made the school up but we all know that the more words before and after the State in question the worse the school is)

Thus, of course the powers that be at Grady expect that debt not only be forgiven but that staff continue to work. They hold all the power.

Given all this we can see why they are so arrogant, but frankly this is all besides the main point anyway. King's piece is frankly most atrocious, in my opinion, because it focuses on side issues like demands over requests. King refuses to examine why Grady insists on going private and how that will impact the hospital and the tax payers. (Fortunately, you can count on this blogger to give you the straight scoop on all issues related to Grady and their plan for going private is just one of those issue. So for more info on the plan to go private please click here) By focusing on the arrogance of a group that has frankly shown nothing but arrogance for more than a decade, he really shows a total lack of understand of the issue.

The issue isn't whether or not some people are arrogant. They are and it matters very little, except to explain past, current and likely future behavior. The issue is what to do going forward. It appears obvious to me at least, that the reason the powers that be want to go private is so that their malfeasance can be even more easily hidden. Yet, that possibility isn't even mentioned. In fact, Mike King contributes absolutely nothing of substance to a debate that should be at the front of most Georgians' minds. It should be the AJC leading on this story. It isn't. In fact, if I am right, the AJC is actively participating in the corruption. That may explain why King's only contribution to this debate so far is well, so lame.

Finally, I have heard from the grapevine that Ron Marshall, of the Grady Coalition, wrote a piece that was supposed to counter King's in the AJC, and the AJC refused to publish it. No such refusals will be here. Here is Marshall's piece...

It does not surprise me that Grady voted to go private. This has been in the plan to privatize all major funding resources in America to control how money is being spent and who receives it. Look at Iraq, since when do we hire a private force to protect public interest? This has never happen in the history of war. Who benefits from privatization?

Grady changes have started the wheel of genocide. A whole community will parish (poor people and poor accident victims) in the name of profits. Not to mention the land deals that will be made. We have put a price on human life. Not only have we put a price on the life of an individual we allow the health care system to pick and choose who get’s treated and how much treatment they as humans receive. Animals get treated better than people. Throw a dog in the street and see what happens.

Our Governor had the nerve to pray for rain. The prayers should be for humanity as well as for the salvation of human life and for the protection of our planet. Now we have really fallen off the path of survival.

What’s still hidden in all of this is how did this happen and who is responsible for what happen. This has never been asked. If it has there sure has been very little said about the accountability of the officials who oversee Grady and the official who appoint the board that put Grady in this position. Why is the public being denied
access to records that will show where all the money went or is going and who is receiving it? This is not new and it seems to happen like the migration of geese heading south every year.

Only one person was sent to prison for stealing from Grady, Charles Walker. Walker did not steal all that money by himself. He had to have help. Somebody signed the checks and somebody got paid to keep it quiet. Why wasn’t there an investigation
conducted to find the accomplices. This is like a private (secret) Mafia, they sacrificed one to save the rest. I notice Walker has not turned on his accomplices. Is there money waiting for him when he is released?


Is having cover-up money pay for a pass as Emory has shown. They have clearly had their way with Grady’s funding with a sweet heart contract. Does being a politician automatically give you a pass when crisis’s after crisis’s shock after shock that cost tax payers millions without having them be accountable time after time.


Now we had an explosion in south Georgia and Grady no other but Grady is in the front again. The needs are clear, human lives are at stake. Is there no other real time event that shows Grady at its best.

So to feel anything is like watching killings and brutality between 6-11pm live on the news or a television program. You get use to it. The fight for justice and accountability has only hit a bump in the road, we must be protectors of justice and righteousness and we will accelerate ahead of corruption. Buckle-Up.

Many of the things he says have also been said here. It's too bad that Marshall needs my blog in order to get his message out. You can contact the AJC here about any of the plethora of issues I have raised.

(Update)

I realize that anyone that tries to pick up the story of the crisis at Grady Hospital is likely to get lost in its many mazes. Thus, if this story is your first exposure to it, it is likely you have dumbfounded look on your face. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Then, the dumbfounded look will be removed. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

CNN and My New Favorite Latin Phrase

I received an email from the conservative blog, Redstate, entitled "Heads need to roll at CNN". Here is the article that Redstate linked to in the email.

Our own Dan Spencer made USA Today today in an article by Jill Thompson.Only
if you check our front page, we don't have a contributor named Dan Spencer; well, we do, but he does not write under his name. You actually have to dig around on the web to find out Dan's real name. Good for USA Today for being competent.

Contrast that with CNN last night. Not only did they allow Keith Kerr's question, they invited him to the debate. Had they bothered to research, they would have discovered his connection to Hillary Clinton's campaign. He's a member of the LGBT Americans for Hillary Steering Committee and co-chair on Hillary's National Military Veterans group. He also was an active John Kerry supporter in 2004.

And last night Anderson Cooper willingly gave Mr. Kerr the Democratic activist a soapbox. Anderson has yet to apologize for either his willing participation or incompetent handling of the situation and failure to research.

The fallout from this story continues. Michelle Malkin reports today that the muslim girl that claimed that our reputation in the Muslim world has suffered as a result of the invasion of Iraq was a previous intern at CAIR. The number of non Republican questioners continues to grow each day.

For anyone not following, during Wednesday's Youtube debate hosted by CNN, several questioners turned out not to be Republicans or Independents, but in fact supporters of Democratic candidates. The most infamous was the gay general that scolded the candidates for not believing the military wasn't professional enough to serve with openly gay officers. His situation was even more peculiar because he was in the live audience and he spoke after the candidates answered his video question.

What is most embarrassing for CNN is that bloggers discovered most of the malfeasance in nearly real time. If the story is accurate, Anderson Cooper was told by Bill Bennett during the debate that bloggers had discovered the error.

To me, it really matters not whether or not CNN knew ahead of time that these questioners weren't Republicans. There are only three possible scenarios as far as this situation is concerned vis a vis CNN. They were either corrupt, incompetent, or even both...res ipsa loquitur. None of those scenarios shines anything but a terrible light on CNN. A couple months back CNN took a terrible ratings hit when when they tried to create controversy where none existed when they claimed that comments that Bill O'Reilly made about a Harlem restaurant were racist. They had a special about Iraqi insurgent snipers that many called nothing short of a snuff film. They even admitted soft balling the Hussein regime for years in order to gain access.

Suffice to say, their reputation doesn't need anymore hits. The simple fact of the matter is that heads absolutely need to roll on this and plenty of them. If we don't see heads roll, they will perpetuate the perception that this creates that they have a liberal bias. To me there is nothing to think about here. It isn't as though someone was late for a meeting or spent too much time on personal phone call one day. Several people, who weren't supposed to be asking questions at a major Presidential debate, were allowed to ask questions. Anyone who was responsible for vetting the questions and their superiors hve to be fired. There are no second chances for embarrassing the network on live television. If bloggers can figure these things out, then paid staffers have to or be removed. Like I said Res Ipsa Loquitur.

The other part of this story is the near blackout of its coverage by the rest of the media. I couldn't find anything on MSNBC. I couldn't find anything in the New York Times, There was something in the Washington Post though it is on conservative blogger's Ramesh Ponnuru's blog...not exactly top billing. I also found nothing in the Boston Globe. I could probably do this with most MSM newspapers and networks and if I had the time I would. I think you all get the idea. Most newspapers and networks have stayed relatively away from this story.

The New York Times for instance had a negative story about Iraq, Rudy Giuliani, and a story about the teacher in Sudan, on the front page. I won't say those aren't important, however a major network allowing multiple people to slip by their radar in a live debate is just as important. For their to be a near blackout of this story in the MSM...well that goes by the same Latin phrase, Res Ipsa Loquitur.

What Does the Administration at Emory Get Paid For? (UPDATED)

Introduction: Yesterday, I published this piece. It is a detailed summary of the continued and growing scandal going on at Grady Hospital in Atlanta, Georgia. If you are unfamiliar with the details I suggest that you check out link.

Also, I have a stat counter on my site. It allows me to track in detail who, identified by IP address, comes, where from, which of my pieces they read, and all sorts of other details that turns it into Proprietor Nation's version of big brother.

The following piece is in regards to the aftermath of that piece (which received a fair amount of traffic) and one specific IP address that I have been able to identify. So, without further adieu...



I am not sure however if today is like other days then they are paid to surf the web. I know this because IP address, 170.140.62.42 (administration's IP address, probably this man) has been on my site for hours today. In fact, this IP address is by far my biggest fan. I know this because they check with me usually at least once a day, however today they have taken an unusually large interest. (I wish they would click to Amazon once in a while and buy one of their fabulous books though) Here is a run down of today's activities...




28th November 2007
09:16:51
No referring linkProprietor Nation
29th November 2007
11:01:22
No referring linkProprietor Nation
29th November 2007
12:52:22
No referring linkProprietor Nation
29th November 2007
12:52:29
proprietornation.blogspot.com/Proprietor Nation: An Updated Summary on the Fiasco at Emory, Grady, and Beyond
29th November 2007
13:04:31
No referring linkProprietor Nation
29th November 2007
13:04:34
proprietornation.blogspot.com/Proprietor Nation: A Murder, A Suicide: Connecting More Dots in the Culture of Corruption
29th November 2007
13:04:35
No referring linkProprietor Nation
29th November 2007
13:04:45
proprietornation.blogspot.com/Proprietor Nation: The Incredible Disappearing Story... (UPDATED WITH A VERY SPECIAL SHOUT OUT)
29th November 2007
14:55:47
No referring linkProprietor Nation
29th November 2007
14:58:32
proprietornation.blogspot.com/Proprietor Nation: Emory University
29th November 2007
15:00:01
proprietornation.blogspot.com/search/label/Emory%20UniversityProprietor Nation: Who Is The Real Sociopath??
29th November 2007
15:07:39
blogs.creativeloafing.com/freshloaf/2007/10/09/emorys-skeletons-in-the-closet/Proprietor Nation: The Fox Guarding the Hen House
29th November 2007
15:07:53
blogs.creativeloafing.com/freshloaf/2007/10/09/emorys-skeletons-in-the-closet/Proprietor Nation: Corruption
29th November 2007
15:08:23
proprietornation.blogspot.com/search/label/CorruptionProprietor Nation: A Plea to John Sugg of Creative Loafing



Let me explain what all of these names and numbers mean. This is the full detail of the IP address I spoke of (170.10.62.42). If you click the link it is identified and also identifies its server, Emory University. Everytime anyone visits here the date and time (Central time that is) is recorded. Those are what the dates and times mean. If a link was used to come to my site, that is also identified (for instance the one starting blog.creativeloafing is a site from which this IP linked from). If no link was used, then the words, no reference link appear. (this generally indicates the the address was typed out by the party using the computer. Thus it was likely that http://www.proprietornation.blogspot.com/ was entered into the address field in order to reach my site.) The specific web page is the web page that the party landed at. Sometimes, a party will travel within my site and so if you see two proprietornation pages, that means th party went from one page to another.

As you can see, not only is this IP visiting my site, but they are they are also visiting this story from October. (this is another story that doesn't necessarily paint Emory U in the best light)

The ongoing Grady Memorial Hospital crisis is bringing to the surface many complaints about Emory’s medical school role. In the past, Emory’s response to internal criticism has been to bully and crush the critics, and then try to keep the records sealed.

The latest on the blogosphere is about the persecution of Kevin Kuritzky, who was 41 days from graduation when Emory expelled him from the medical school. Kuritzky claims Emory was retaliating for his blowing the whistle on patient safety — or the lack thereof.

Now, I can assume that as the head of PR, one must know what is being said about their school, however isn't the work of the AJC, the New York Times, where they would want to spend their time predominantly. If I am getting this much traffic from PR, they frankly have very little time left for the AJC et al. Either that or the PR department is now exclusively focusing on surfing the internet for stories related to Emory. Why is my blog, with only several hundred hits daily, getting so much attention in the PR Department at Emory (if it isn't the PR person then frankly they really need to be fired because they are just surfing the internet to waste time then)?



I have already concluded that the powers that be at Emory removed a story from the internet archives at the AJC. I pointed out in a previous diary that this article, and more importantly Emory's response, was damning to Emory in three serious ways. (I won't rehash the story so please go to the links to catch up) I know that the article was removed in the aftermath of me publishing the piece because it is no longer there. I also know that reference to the same article was also removed from a page on Emory's own medical school site. (go to this google link and click on the top link found and see for yourself)



Now, I know that part of PR is damage control but isn't removing archived stories and web pages taking damage control a bit too far. I know that in PR you must know what the media is saying about you, but isn't obsessing about what a small blog says also taking things a bit too far. Unless of course, what that small blog is saying is true, and in that case, you probably would be obsessed. I have recently fallen in love with the phrase Res Ipsa Loquitor (the facts speak for themselves). You can call me crazy, an ego maniac, or suffering from delusions of grandeur, but I believe the fact that Emory's admin IP has become my biggest fan, shows that they know what I am saying is true.



If that is the case. Let's review what that means. Emory is operating as an all powerful sociopathic entity. They are criminally liable in providing medical services to poor folks at Grady Hospital and veterans at the VA hopsital and they have expelled a student, 41 days prior to graduation, for daring to expose their criminality. They have also paid off multiple professors with their silence who also tried to expose the corruption. Furthermore, since Grady Hospital, the subject of much of this corruption, is a public hospital that means that ultimately Emory University has committed all of these crimes and lapses in ethics and morality on the public.



Now, all of this is my supposition only, however, if my supposition is lunacy, why is the admin spending so much time on my blog? Don't take my word for it go and ask the admin yourself. I have provided the link and it has said person's email. See, what they have to say about all of this.

UPDATE:

170.140.62.42 is back. It is nothing short of surreal to update a piece about a party as that party is reading the piece themselves, however that is how it is in the internet age. Here is an updated link to what the stat counter calls the magnified user, a detailed summary of the movements of this particular IP address on my site (including the most recent and probably current visit) The only other thing I will point out is that while I have had much traffic from this IP there has been no contact by email or otherwise. There have previously been some peculiar anonymous messages, however anonymous speaks for itself, and it was also before I became savvy enough to track things down.

UPDATE:

I realize that if someone were to pick up this story somewhere in the middle they would get lost in its many mazes. Thus, if the first story you read regarding Grady Hospital is this one, you are probably confused. So, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

News and Views from Iraq

Here is Michael Yon's latest.

One of the controversies I intended to explore on my second embed with the British is the claim that EFPs are flowing into Iraq from Iran, just miles down the road. Iran’s support for international terrorist groups is well established; and here in Iraq, Iran is believed to have intimate contacts with terrorists groups providing them with “lethal aid.” EFPs fall within that category, because they can destroy any vehicle in Iraq, including America’s and Britain’s best tanks. Warriors are fine vehicles [although they do need real air conditioners for Iraq] but an EFP can slice through the Warrior’s armor like bullets through beer cans. Webb became known for personally inflicting heavy casualties among the enemy, but today it was his Warrior about to rumble over an EFP.

Here is the latest from Michael Totten reporting on the ground from Fallujah.

Nobody was shot last night in Fallujah. No American has been shot anywhere in Fallujah since the 3rd Battalion 5th Marine Regiment rotated into the city two months ago. There have been no rocket or mortar attacks since the summer. Not a single of the 3/5 Marines has even been wounded.

“The only shots we've fired since we got here are warning shots,” said Lieutenant J.C. Davis. Another officer didn't agree. “We haven't even fired warning shots,” he said. “It's too dangerous.”

It's dangerous because anti-American sentiment still exists in the city, even though it is mostly passive right now. It isn't entirely passive, however. Someone has been taking pot shots at Americans. A few days ago somebody threw a hand grenade at Marines. Two weeks ago an insurgent was caught by Iraqi Police officers while planting an IED near the main station. He freaked out, accidentally connected the wires, and blew himself up. “That's what he gets,” Private Gauniel said...

Here is Omar's latest.

This is a great find by any standards but the timing makes it all the more significant.The significance comes not only from the quantity of bombs, cars and other resources that al-Qaeda has been denied the ability to use. It comes from the amount of frustration they have to deal with right now that all these preparations and resources are lost.

What makes me think that this will indeed frustrate them is that al-Qaeda chose to mass this great number of VBIEDs instead of deploying them to the streets one, or a few, at a time fresh from the factory. Two possibilities arise here; they either couldn't find the means and safe routes to deploy the bombs and so they had to wait for more favorable circumstances, which is good news since it means their ability to conduct missions has really been reduced to a great extent.

Bill Roggio talks about the continued hunt for AQI.

"Despite the recent loss of numerous cells across Iraq, the media wing of al-Qaeda’s Islamic State of Iraq (ISI) has produced a second video product, which the al Fajr Media Center posted Tuesday night on the main Jihadi message boards," Nick Grace of Threatswatch reported. "The one minute video, called 'Destruction Of An-American Hummer Vehicle,' is the latest in the ongoing ISI media series 'Roman and Apostate Hell in al-Rafedain Land' and, according to the accompanying Web statement, shows an IED attack on a hummer in the az-Zobayer bin al-Awaam region of Diyala Province." The first video released showed the brutal execution of nine Iraqis, purportedly Shia who served in the Interior Ministry’s police commando unit in Diyala province...

Here is one from a different perspective. The L.A. Times is very upset that Bush is trying to negotiate a deal for bases in Iraq.

Despite the show at Annapolis, this week's main diplomatic initiative has concerned Iraq, not Israel. Without any fanfare, the Bush administration and Iraqi Prime Minister Nouri Maliki announced that the United States and Iraq will begin negotiating a long-term agreement that will set the terms of Washington's Iraq policy for "coming generations."President Bush is again in legacy mode.

His White House "czar" on Iraq, Army Lt. Gen. Douglas Lute, explained that the administration intends to reach a final agreement between the two countries by July 31, 2008. In describing the negotiations, he made a remarkable suggestion: Only the Iraqi parliament, not the U.S. Congress, needs to formally approve the agreement.

Finally, the DOD has this story about a successful operation in Tajj.

Coalition forces captured a wanted individual during operations in Tarmiyah while targeting a foreign terrorist facilitator and associate of senior al Qaeda leaders. They also detained two other suspects without incident. --

Coalition forces captured a wanted individual north of Samarra during operations targeting foreign terrorist facilitators and senior terrorist leader associates. The wanted individual is believed to be an al Qaeda leader in the area. --

Coalition forces detained four suspects while targeting al Qaeda members responsible for assassination-style murders in Hawija. Coalition forces also targeted their associates in Mosul, detaining three suspects without incident.

To sum up, we remain cautiously optimistic about an ever improving though incredibly complicated situation. God bless our troops, stay safe, you are our best.

Post Debate Wrap UP

My alma mater played Maryland in the ACC/Big Ten Challenge last night, so priorities had my attention in other places for most of the debate. Thus, one might say that I am the wrong person to give anyone a post debate wrap up. I disagree. Since I have acknowledged that I didn't see much, I can't make a claim to a winner (which is invariably the candidate that I was supporting). Instead, I will act as a sort of weigh station for post debate stories and analysis.

First, the right blogosphere is ablaze with stories of Democratic plants asking questions.

Michelle Malkin's got the roundup: turns out that the woman framing abortion in terms of penalties for women was an Edwards supporter; the guy trying to gay-bait by asking about Log Cabin Republicans is going to vote for Obama (see also Six
Meat Buffet and JunkYardBlog), the woman brandishing her adopted child on a badly-veiled screed for protectionism is a union organizer and aide to an Edwards supporter (see also the Autopsy); with a h/t to the aforementioned The Autopsy we see these two Jason Coleman links, one of which indicates that Corn Subsidy Boy was an ex-intern for Jane Harman and that the guy asking about why the GOP doesn't attract more African Americans is an Edwards supporter who likes to make fun of actual African-American Republicans. And then, of course, there was Hillary's guy. No doubt there'll be more*.

Since I didn't see most of the debate I don't know, I did see some sort of general actually claim that openly gay people should be allowed to serve in the military. I am certain he was a plant and likely that CNN thought his credentials would play. My guess is no. The MSM continues to exhibit the height of hubris when they think such stunts actually change public opinion.

The pundits appear to be continuing to swoon over Huckabee and his performance last night. There is nothing new there. Huckabee is, in my estimation, by far the best debater of any Presidential candidate on either side. I have long pointed out his charm and charisma. His momentum appears to be continuing if you believe the pundits. Of course, pundits said Rudy would NOT still be leading at this point.

By far, the most interesting piece is from Jay Cost. He breaks down who attacked who, how much and on what. By his account, Rudy is still the front runner. Immigration is the most important primary issue. Thompson is in trouble. Romney sees both Rudy and Huckabee as a threat. McCain has issues.

I saw the last half hour and I turned the channel when the cartoon asked a question. I thought the most interesting question was about why African Americans don't vote more for Republicans. It turns out that was a plant as well, so there is an example of my radar.

The folks at Power Line also have the round up of the debate. Here is the analysis from Richelieu who, like most Conservatives, saves most of his ire for CNN.

An Updated Summary on the Fiasco at Emory, Grady, and Beyond

I just realized that anyone that picks up this story in the middle would get lost in its many mazes and connections. If anyone reads every single story in the Emory University tag, they would get a full picture, however that maybe beyond reason. First, I must disclose some things. There are things that I can prove. There are things I can assert and there are things that I believe. Finally, there are things that follow the Latin phrase, Res Ipsa Loquitor (the facts speak for themselves). I use different language for each.

So, let's start at the beginning. Emory University's Medical School runs a network of hospitals in the Atlanta area. There are five in all if my facts are right. Three are actually owned by Emory and service predominantly the affluent making them quite profitable. The other two are public hospitals and Emory has sort of contracts to staff them with their professors and students. This is no different than many teaching hospitals and if there are any ER fans, the fake hospital in that show runs in a similar manner.

That said, I want to focus a bit more on the two public hospitals with little profit potential. The first is the VA since veterans get set bills, and the second is Grady. Grady is a hospital for the indigent or very poor. Since poor folks rarely have money or insurance, it is much more difficult to make a profit on them. Grady is also a public hospital meaning that the tax payers ultimately are the ones that finance it. (as most indigent hospitals would be for the reasons that I mentioned. No one is going to want to bankroll a hospital that has no hope of making any real money so it is left to the government) Grady is also massive, one of the biggest hospitals in the country, and so while it provides little profit, it provides a bulk of the training.

Here is where things get interesting. Emory enjoys a lucrative relationship vis a vis Grady (I will explain as I go along how that relationship get consummated so to speak). For instance, they get a fat yearly fee of about 50 million dollars to provide staffing at Grady. Keep in mind that Grady is the training vehicle for most of its medical students. Emory already charges its medical students tuition and uses Grady for a lot of the training that this tuition is supposed to go for. Many people refer to this as double dipping. In other words, Emory University has one of the premiere medical schools in the country and one of the main reasons is their association with Grady Hospital, one of the largest hospitals in the country. Thus, Grady provides just as much to Emory is Emory does to Grady. Furthermore, since Grady is a public hospital it is ultimately the tax payers that are stuck with the bill that Emory charges Grady yearly. Also, Grady Hospital pays for Emory's malpractice insurance. It goes without saying that such a relationship invites exploitation.

Exploitation and corruption is what you have at Grady in my opinion, and I really only need to do a Google search to provide plenty of evidence. For instance, Grady Hospital settled a case for Medicare fraud in the late 1990's for about 5 million dollars. A few years later former State Senator Charles Walker committed so much criminality at Grady and beyond that he was ultimately convicted of 127 felonies. (you can click this link for a full write up of the case including its particulars and most importantly what each hero and villain wound up receiving from Grady and Emory) In 2004, the Dept. of Health and Human Services conducted an investigation of Grady Hospital and here are the conclusions,

there is a serious and immediate threat to the health and safety of the patients

That is frankly the equivalent of a builder building you a house that falls down on top of you when you move in. (Only one person was let go in the aftermath, Dr. Andrew Ogwunobi, who has continued to travel an interesting path. You can find his full dossier here. It is important to note that the Chief Medical Officer of Grady Hospital, William Casarella, was cited most often in the actual report. I point this out because Casarella has since been promoted within Emory University. This is important for several reasons not the least of which because it goes to show that in many ways I believe the two entities cross over whenever it suits the powers that be)

Finally, currently Grady is in such financial turmoil that is about to be shut down unless there is a huge infusion of cash, about a hundred million minimum by my estimation. There were also other investigations that started and stopped like an interesting one conducted by the NIH in 2000. While there was ultimately no damning conclusions to those reports, I have my suspicions about how it was exactly that they ended. (for more information on that report and more importantly the role of Kent Alexander, Chief Legal Counsel for Emory University, please go this link. This is probably my most incendiary piece and illicited a flurry of looks from the Emory admin IP upon publishing)

This body of evidence is in my opinion an example of Res Ipsa Loquitor.

Now, while Grady is staffed by almost entirely Emory faculty, it is still a public hospital. It has a board and a CEO. The board chooses the CEO, and the board is chosen by the CEO of Dekalb County. The current CEO of Dekalb County is Vernon Jones. He is an elected official with a remarkable knack for thriving in what I would think are dicey political situations. (when I say dicey I mean things like rape accusations, shady land deals, and all sorts of malfeasance by those close to him Just like everything else, I have written a full write up of Jones as well. Jones is I believe the link between the corruption at Grady and the corruption that infects much of Georgia. We have a running debate about who the ultimate ringleader is and one theory is the Dixie Mafia, and you can vote in my fun poll after getting the full scoop)

Now, the problem as I see it is summed up by this cliche, the fox guarding the hen house. The board is supposed to oversee the CEO who is supposed to oversee the staff, and the CEO of Dekalb County is supposed to oversee all of them. The problem is that all the entities, in my estimation, are corrupted. From Jones, to the board, to the CEO, to the staff, the foxes are guarding the hen house so to speak. For instance, one very prominent member of the board was until two years ago Robert Brown. Robert Brown also runs an architecture firm. Three guesses which firm gets many of the most lucrative contracts for Grady expansion. If we dig deep enough, I have no doubt that there would be an almost endless amount of transactions with really or perceived conflicts of interest.

Enter, whistleblower Kevin Kuritzky...first, there is full disclosure here. Kevin and I have developed a tight relationship, and I have even done a radio show with. (It is linked at the end of my piece on Kent Alexander. Kevin is the calm one and I am the hyper one) I have never claimed traditional journalistic objectivity, and I am not a traditional journalist. I believe the quality and accuracy of the information I have provided speaks for itself. Every piece of data has been double and triple sourced minimum. I have hard copies for anything I don't link to like the aforementioned HHS report. (I can email or fax to anyone upon request)

Kevin has made some incendiary accusation about the quality of patient care at Grady Hospital. He claims that Emory staff goes to one of their for profit hospitals when they are supposed to be at Grady and many times he claims they leave medical students unsupervised. (In fact, in this piece I give an example that was verbalized to me by Kuritzky that is frankly straight out of a bad nightmare.) It goes without saying that his accusations, if true, amount to not only an obscene violation of several laws but frankly every doctor's oath. Kuritzky was expelled from medical school with forty one days remaining. (That is in a four year program) Kevin believes the charges are trumped up and he is now in the middle of a law suit. The Emory Wheel inaccurately reported that Kuritzky's case has been dismissed. It hasn't Kuritzky's side has lost a motion that is being appealed. (again, I have seen the disposition of this motion and it is NOT a dismissal) This was inaccurately reported in a trade journal for academics. (The fact that this was written in a trade journal for academics obviously raises all sorts of issues and I explored them here)

Finally, I have counted four former Emory professors that have been paid off for silence. I have only seen the settlement agreement for one pay off. That is for Dr. Jim Murtaugh. He was paid off right around the time that the NIH investigation was happening and he was paid off along with another person, Diane Owen (though her agreement I haven't seen) Murtaugh's settlement has been the subject of much media buzz because State Senator David Shafer has lead a group of state senators who have demanded that it be unsealed (and one main reason why I was able to see the agreement. (If you go here I explore the case of his records being unsealed. Interestingly enough, certain links disappeared in the aftermath of me publishing that, and I explored that here) (also, the Shafer link has some interesting information about who did and didn't approve his settlement so I encourage you to link there)

Now, why should you care? If you are a resident of Georgia, then it is your tax dollars that will ultimately go to fund something you should see is totally corrupt. This corruption is in my opinion part of even bigger corruption that I probably don't even have the full story to. If you are an Emory student, then your tuition, and likely your parent's money (who are you kidding), is contributing to this corruption. Furthermore, if Kevin really was only expelled because he dared blow the whistle on this, what is to stop Emory from targeting someone else. What if you become a threat to them for this or for anything? Clearly, if you believe my assertions, Emory eliminates all threats to them. They pay some off and they expel others. If you believe Kevin, then he had his life ruined for daring to the right thing. (he often tells me that his friends still in the medical school tell him that he should have kept his mouth shut and graduated and moved on) Furthermore, if you believe Kevin, then your school exhibits the traits of the common sociopath. Sociopaths with power is the worst combination you can have. If you are a citizen, then you should want that all corruption be dealt with appropriately and people be held responsible.


(UPDATE)

Some of you may be wondering where the media in Atlanta fits into all of this. This piece should drive home how the media's coverage, or rather lack thereof, fits into this whole story. This piece contrasts the Atlanta media with another situation in which the media actually did its job. Finally, here is an example of the sort of reporting you will find at the AJC.

In the News

I have to lead with this one, because it is just so juicy. Zal Khalilzad was spotted having lunch with George Soros. Talk about politics making strange bedfellows.

So what were billionaire George Soros and U.S. Ambassador to the U.N. Zalmay Khalilzad discussing Tuesday when they met for a secret lunch at a luxurious but discreet restaurant close to the United Nations?

Nobody but the two men knows.

They met together for roughly 90 minutes after arriving at the restaurant separately, Khalilzad with a Secret Service escort.

Lots of questions and very few answers are available, however there could be significant ramifications. If Khalilzad wasn't authorized he needs to go immediately. If he was, then HUH?


There may have been a "breakthrough" at the peace talks in Annapolis. Color me skeptical however not only is there no "breakthrough" that a car bomb won't stop, but... where do I start? Olmert is sitting at single digit approval ratings and is being investigated. Abbas has no control of Gaza and slightly above no control of the West Bank. How many "breakthroughs" have we had? I am not saying that it is impossible. All I am saying is that peace is difficult when one side believes the other side's proper place in the world is six feet under.

Here is a story for the true political junkie. The new Rasmussen poll has Mike Huckabee in the lead in Iowa. First, can someone please produce a poll that asks Americans if they are sick of polls? That is the only one I am curious about. Second, I never look at individual polls. I only look at the RCP average. Romney continues to lead but it is tenuous. Huckabee should NOT be underestimated. He is charming and charismatic. He debates exceptionally well and he is a firm, unconditional, social conservative. On the other hand, he just made a rise in the polls, and soon enough the media will begin to examine him much more firmly. His record on fiscal issues has been described by some (by some I mean a lot of bloggers on Redstate which examines every Rep candidate the way Hugh Hefner examines playmates) is not so strong. Now, I don't know, but let's wait and see what happens after the expected media examination.

This story has received plenty of blogger coverage. Last week, there was a story out of Saudi Arabia about a gang rape victim that was punished with 200 lashes. No you didn't read that incorrectly. This week, a teach is facing a punishment of up to forty lashes in the Sudan for naming a teddy bear Muhammad. So far, she has only been charged. I have pointed out a while back that we have terrorism because the societies in the Middle East are F%^ked up. That is the crudest way I can say it and this is an example. This story is not merely one to look at like a bad wreck, but rather instructive of the systemic and serious issues that need to be resolved there if we are to win the GWOT.

Here is more evidence of turmoil in the print media. The NY Times, already struggling with obscenely low stock prices, have announced more cuts. The liberals will say that it has to do with the continued fragmenting of the media and the conservatives will say that it has to do with their bias.

The latest pew poll has a shift in perception on Iraq. It isn't surprising that the public has warmed some to Iraq, however, as I pointed out yesterday, I don't think this war will be popular with the public. O'Reilly had two top Democrats on to talk about Iraq. They continued with the narrative I talked about in the piece yesterday. I don't think it will work but go to the link and judge for yourself.


The rumor mill has Hillary Clinton tapping Wesley Clark as her VP. That is according to Amanda Carpenter of townhall.com. I don't care much for rumors but Carpenter is tapped into that sort of thing.

The Incredible Disappearing Story... (UPDATED WITH A VERY SPECIAL SHOUT OUT)

I want to direct everyone to three different web pages. Two of them are attributed to me. The third is a Google search. The reason that I direct you to a Google search is because the site I wanted has been removed. Don't believe me, click the top link (Emory WHSC Grady in the news statements mislabel role) and see what happens. A site initially pops up, it says this page has been moved, and then it disappears and then the main page pops up. Try it and see. So, why am I being so machiavellian? Well, I believe that a story has been removed from the AJC. I believe that this story and its response can ultimately be used to damage the reputation of Emory University and the worst part, from the perspective of Emory University, is that the initial damage was self inflicted. Thus, I believe they have moved heaven and Earth to remove all of evidence of this little piece of malfeasance. (They of course will have a much harder time hiding their overall malfeasance which can be explored in my tag Emory University)

First, here are excerpts from the two stories,

Rather than await a court order, Emory and Grady ought to open the records for public inspection immediately. Emory, which supplies most of the attending physicians and residents-in-training at Grady, has already indicated it is willing for the full file to be unsealed if Murtagh, who no longer is employed by Emory, agrees.

Grady, which turned down Shafer's request for the records several weeks ago, should follow suit. If Grady is concerned that patient records might become public as a result, it can ask that those specific records be exempted or redacted.

Murtagh apparently sued Emory and Grady several times in 2000, alleging, among other things, that Emory broke a deal to name him chief of the pulmonary department. He also alleged that Emory and Grady conspired to defraud Medicare and Medicaid in how the two government health insurance programs compensated Grady and the medical school doctors for patient care at thehospital. Murtagh said he was cooperating with federal investigators, but no apparent federal action was taken against Grady or the medical school.

In response, Kent Alexander and Tim Jefferson, both legal counsels for Grady and Emory, wrote this

The AJC's Oct. 5 editorial "Come clean on lawsuit" resurrects (and misstates) old charges of conspiring to misuse government funds, charges the government reviewed seven years ago and declined to pursue. This has the devastating effect of casting public suspicion on two entities -- Grady Memorial Hospital and Emory University -- that are working together in an increasingly challenging environment to meet the health needs of the most vulnerable members of our society.

The editorial surprisingly calls on Emory and Grady to open the sealed settlement and court records in a case involving Dr. James Murtagh. For the record, Emory and Grady did not move to seal the record; Murtagh did. Emory had already supported unsealing the proceedings -- the complete, entire record -- as had Grady. We simply awaited the doctor and court's approval.Judge Wendy Shoob has since unsealed the record, which is now of course fully open to the public. The real victim in all of this is Grady, the largest public health hospital in the Southeast. Grady is struggling to survive while misinformation circulates that, unintentionally or intentionally, diverts attention from the real issues.

(Unfortunately, since the link is the first part of the article I can't copy that. Go to my initial link and try and link to the link and watch yourself go to a blank page. I know try saying that five times, and you are very confused and you don't see the point. The point is that there is a link that goes to nothing and just accept that for now)

The second article is more clear...

Friday, October 19, 2007

Emory
University: Unraveling Sealed Records
On
October 5th, the AJC wrote this editorial,

Rather than await a court order, Emory and Grady ought to open the records
for public inspection immediately. Emory, which supplies most of the attending
physicians and residents-in-training at Grady, has already indicated it is
willing for the full file to be unsealed if Murtagh, who no longer is employed
by Emory, agrees.

Grady, which turned down Shafer's request for the records several weeks ago, should follow suit. If Grady is concerned that patient records might become public as a result, it can ask that those specific records be exempted or redacted.

Murtagh apparently sued Emory and Grady several times in 2000, alleging, among other things, that Emory broke a deal to name him chief of the pulmonary department. He also alleged that Emory and Grady conspired to defraud Medicare and Medicaid in how the two government health insurance programs compensated Grady and the medical school doctors for patient care at the hospital. Murtagh said he was cooperating with federal investigators, but no apparent federal action was taken against Grady or the medical school.

In response, Kent Alexander and Tim Jefferson, both legal counsels for Grady and Emory, wrote this

The AJC's Oct. 5 editorial "Come clean on lawsuit" resurrects (and misstates) old charges of conspiring to misuse government funds, charges the government reviewed seven years ago and declined to pursue. This has the devastating effect of casting public suspicion on two entities -- Grady Memorial Hospital and Emory University -- that are working together in an increasingly challenging environment to meet the health needs of the most vulnerable members of our society.The editorial surprisingly calls on Emory and Grady to open the sealed settlement and court records in a case involving Dr. James Murtagh.

For the record, Emory and Grady did not move to seal the record; Murtagh did. Emory had already supported unsealing the proceedings -- the complete, entire record -- as had Grady. We simply awaited the doctor and court's approval.

Judge Wendy Shoob has since unsealed the record, which is now of course fully open to the public. The real victim in all of this is Grady, the largest public health hospital in the Southeast. Grady is struggling to survive while misinformation circulates that, unintentionally or intentionally, diverts attention from the real issues.

These articles are of course identical and what we bloggers call cross posting. The important part is that every link I provided leads to nowhere (except those that lead to Amazon.com products which I very much encourage you to link to and buy no explanation needed there). Now, and most of my friends will agree with this, I may just have been a total idiot and provided the wrong link. Or, the link I provided was removed after these pieces were published.

Now, the article that I firmly believe once existed in the AJC website was actually an editorial that urged that Grady and Emory unseal the records of the settlement between them and Dr. Jim Murtaugh. Now, this Emory can't hide. I have seen the settlement. Murtaugh was paid 1.6 million dollars and then both parties were told to shut up entirely including the media. In fact, in the settlement, if either party even gets subpoenad, they must first appear before the judge so that the other party has a chance to quash the subpoena. Now, where I come from, when you are paid a lot of money and told to be quiet, that is called hush money.

The reason this is important is because the response, which no longer exists, claimed that it was Murtaugh, not Emory and Grady, that insisted that the records remain sealed. Now, I will again make the same point that I made in the piece that I have linked. It is patently ridiculous to say that the one being hushed is the one that insists on keeping everything quiet. Second, since Emory knows that Murtaugh must remain silent, since they paid to silence him, he is an easy target. Finally, this non lawyer, believes that by simply speaking out Emory and Grady (represented by their dual counselors Tim Jefferson and Kent Alexander) have each violated the very agreement they helped craft.

As you can see, this is, if true, is quite damaging to the two entitities. Thus, they have every reason to get rid of the evidence.

I know what many are thinking now. Michael, you have delusions of grandeur. Emory doesn't care what some nothing blogger says about them. Au contraire. According to my stat counter, the Emory University faculty IP, 170.140.62.42 (one I now know will never be used again to check my site) is my biggest fan. I know this because someone on that IP address visits my site at least once a day and then it gets up to ten hits in a day whenever a story related to them gets published. (Yes, I know big brother, but it is great when you are the big brother.)

Now, I will also say that I firmly believe that the powers that be will very possibly reverse coure again, and suddenly, the story will be back up on the site and the page will be back up. That is why I hope people check this out now and see for themselves before courses are reversed. In fact, I predicted part of the current course in a previous piece.

So, what does all of this mean? It may mean nothing, but why doesn't the audience indulge my own delusions of grandeur and allow me to state what I believe happened. I believe that Grady and Emory tried to do damage control to an ever growing situation with what can only be described as an absurd response to an editorial in the Atlanta Journal Constitution. The powers that be at Emory read my nothing blog and realized that if my nothing blog every became something, their unbelievable fraud, arrogance, and corruption would be available for everyone. Thus, the powers that be needed to remove all evidence that linked my assertion to them. It was easy since the AJC has a plethora of Emory alum and thus plenty of influence. The article was removed however in their own carelessness they forgot that they themselves linked to the same article from their own site. When I published the second piece, I just linked, they realized their second error and removed that as well. Thus, they have made it look as though I am an incompetent computer novice that can't link straight and thus can't be taken serious.

In other words, if I am right, then in the words of Daniel Caffee (that's A Few Good Men for all you movie novices)

you mean they can make an entire flight disappear

Yes, that's right, and they will to hide their own malfeasance, unless you stop them. Please link to the powers that be and ask him yourself why these pages are missing. Finally, if I am right, then we have incontrovertable evidence that the AJC isn't just tacitly involved in the corruption but frankly an active participant. If you believe me, please go here and ask the AJC where this article went.

UPDATE:

I would like to welcome the administrators at Emory University. According, the my stat counter the aforementioned IP address just visited at 9:16:51 (Central Time, give or take a tenth of a second) I also fully expect that at least their own site, Emory Woodruff Health Sciences Center, they will fix the slight error. Currently, as I said, the site that has been removed pops up for a split second and then disappears. Please follow this google search. Pick the top search, Emory WHSC Statements mislabel role, and you will see what I mean. For now at least. Please leave comments letting me know if your search yielded the same results. If they did, please ask the powers that be why the web page was removed.

UPDATE: Well, the page has been permanently removed or somehow Emory got Google to remove the link. Either way, the page has now disappeared. If you are reading this story too late, you will just have to take my word for it. If you don't believe me, so be it, it is probably the intention of the powers at Emory. Just keep in mind that while they can remove a page from a web site, they cannot remove the entire fiasco. Please read below for the summary of the entire fiasco.

UPDATE:

I realize that if the first exposure to this story comes somewhere in the middle, you may get very confused. Thus, if you this is the first story related to Grady that you are reading, you should be confused. As such, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

The Changing Dynamics of the War in Iraq and Its Political Ramifications

Rick Moran wrote an amazing piece yesterday that really breaks down the situation currently going on in Iraq. If you have a chance, please read it. If you don't, here is a summary. There is no doubt that there has been some success since the institution of the surge. That said, Iraq remains an unbelievably complex place with all sorts of moving parts with varying agendas, and it is impossible to predict if our current success will transfer into ultimate success with all of these parts.

This is all no doubt true however I would also add that I believe that our forces have accomplished the most difficult part of the task so far, and that they have my full confidence in accomplishing the rest. It was fascinating and peculiar that former General Rick Sanchez gave the Democratic response to Bush's weekly radio address this past weekend. After all, the Democrats railed on Rumsfeld's failed Iraq plan and Sanchez was instrumental in its implementation. In 1864, former failed Union General George McClellan ran for the Democratic ticket. While I have no doubt there are eyes rolling, there are some peculiar similarities.

There are now two concurrent and divergent realities going on vis a vis Iraq. The first is that things are improving and the second is that this is a war that the public will NEVER like. This makes Iraq a paradigm politically for both parties. The Republicans are hand cuffed to a perpetually unpopular war and the Democrats are hand cuffed to defeat in an improving situation. It appears neither side wins in this case.

There is also great irony in the political framing that each party is taking vis a vis Iraq. For instance, Carl Levin represented the Democrats in the Iraq War debate on FNS. Here is some of what he said.

Well, it shows an improvement on the military side, but the president's policy very specifically had as its purpose — the surge's purpose was to give the Iraqi political leaders the breathing space to work out a political settlement, and that purpose has not been achieved.

They're just as far apart as ever. And I think there's a growing frustration with the Maliki government, even among our own military leaders, for the Maliki government's failure to make political improvements. That growing frustration is reflected in a State Department bulletin that just came out which said that the greatest threat which now exists in Iraq is no longer Al Qaeda, it is not the insurgency of the Sunni insurgency, it is not the militias.

The greatest threat to any success in Iraq is the failure of the Iraqi politicians to work out their political differences.

Senator Lindsey Graham represented the Republicans and here is some of what he said.

It's working amazingly well, beyond my expectations. I think history will judge the surge as probably the most successful counterinsurgency military operation in history.

Violence is down. Economic activity is up. It's not just about more troops. It's how the troops are used. So hats off to General Petraeus and all under his command. You're making military history and a phenomenal success. I was amazed, really.

Here is the irony. Both parties have maintained their overall assessments for much of the war. The Republicans are optimistic and the Democrats are pessimistic. That is true, however they have swapped their measures. Remember for years, despite all the violence Bush continued to point to political benchmarks: elections, the constitution, the formation of the government, etc. as signs that we were still succeeding, and the Democrats just pointed to the next car bomb. Now, since there are no car bombs, the Republicans are pointing to that, and the Democrats are pointing to the lack of political progress.

Now, if electoral history is any judge, the Republicans now hold the edge. The Democrats must convince the folks that we are losing when we are winning, while the Republicans must divorce themselves from Bush. More and more, the Iraq War is becoming the war of General David Petraeus. He will soon become the face of it almost entirely and the Democrats will likely counter with Generals that weren't in the theater or were there during years of failure.

The Republicans have no easy task either. Tying yourself to a neverending and deeply unpopular war is no easy task. Of course, Nixon proved that this position can still be better than calling defeat. The person in best position to use Iraq is John McCain. He called failure when there was failure and success as soon as that happened as well. Furthermore, no one has more credibility on military issues among politicians.

Hillary Clinton appears to be the weakest on Iraq political, at least to me (and my opinion is certainly slanted). She has had moving positions and at this point continues to not only defend her initial vote but also propose a vague withdrawal plan that has no definite end. That frankly ultimately pleases no one. Barack Obama is a bit stronger since he merely defends a withdrawal plan that is more forceful however ultimately pretty vague as well. He is, in my opinion, a totaly foreign policy light weight and I just can't see the voting public being impressed with foreign policy experience amounting to a few years spent overseas as a youth.

The next major event that will affect the politics of Iraq, in my opinion, comes in March. That is when General David Petraeus presents his next progress report. The last one was overshadowed by the Betray Us ad. It's other main highlight was Hillary Clinton claiming that believing there was progress required a "willing suspension of disbelief". If progress was difficult to see then, it will be darn near impossible to ignore then, again in my opinion only. The last three months we have seen a reduction in coalition casualties, Iraqi military casualties, and Iraqi civilian casualties. I believe that November will be month number four and if the trajectory holds it will be seven months of decreasing violence by the time he speaks to Congress.

The genius of Petraeus is that he has developed a plethora of measurements for progress. He develops so much data that accountants would probably get lost in it: deaths, violent events, business openings, recruitments, elections, etc. There is a statistic for just about everything. Given that progress was only beginning to show in September, the numbers will be nothing short of startling in March.

The Democrats will no doubt continue to point to political progress. By political progress, I mean benchmarks. Obviously, there are all sorts of political progress seen in Iraq, however none of them are included in the benchmarks. To me at least, arguing with a General, who has made Iraq his home for the last three years, that political progress can only be defined by static benchmarks set before the start of the operation seems like a political loser. There are all sorts of reconciling between Sunni and Shia sheiks and these partnerships have lead to security agreements. Things that have worked in Sunni areas have been copied with wrinkles in Shia and mixed areas.

Finally, if a lack of political progress by the Central government is any measure success based on pre set benchmarks, they have also just condemned their own Congress. Like I said, the ever changing political dynamic in Iraq is filled with irony.

In the News

International:

Rioting continues in France and the intensity has amped up.

Rampaging youths rioted for a second night in Paris' suburbs, firing at officers and ramming burning cars into buildings. At least 80 officers were injured, a senior police union official said Tuesday.

The overnight violence was more intense than during the three weeks of rioting in 2005, said the official, Patrice Ribeiro. He said "genuine urban guerrillas with conventional weapons and hunting weapons" were among the rioters.

On Monday night, youths were seen firing buckshot at police and reporters. About 30 of 82 injured officers were hit by buckshot, Ribeiro told The Associated Press. Rioters also hurled stones and Molotov cocktails at police, authorities said.

A few days ago, I pointed out that Nicholas Sarkozy scored a major domestic victory when he when the game of chicken with the unions. That victory maybe short lived if he doesn't get this situation under control. In 2005, his predecessor, Jacque Chirac, waited twelve days until speaking to the people. In the meantime, the perception grew that the rioters, not the authorities, were in charge. Those riots subsided however the rioters probably got the idea that they could do what they wanted. Sarkozy MUST show the kind of leadership Chirac lacked and crack the perverbial whip on the rioters immediately.

Pervez Musharraf officially stepped down as military chief of Pakistan. This opens things up for him to run for President. This situation is to complicated for my simple mind, however I do know that its consequences are serious for those of the GWOT.

North and South Korea have opened up talks on security concerns. I have long been weary of negotiating with sociopaths, and Kim Jong Il is that. I hope this leads somewhere however my bet is that it will be counter productive.

National

President Bush has opened up another summit on Middle East peace. As one commentator put it, every President eventually goes to this step. We all know where the last ones lead to and I fear this one will be no different. I think the problems of the Middle East are far greater than a summit however no one is claiming all problems will be solved in one day.


The housing market got more bad news with the most recent prices reporting a 4.5% drop. I have talked about this ad nauseum and you can go to the mortgage tag for more background. I don't believe the worst is over and I do believe it will get much worse. Finally, condolences go out to the Taylor family and the Washington Redskins. Their safety, and University of Miami product, died of injuries he sustained from an apparent burglary on Sunday. First thing is first, I hope that justice will be served and ALL perpetrators are caught and punished.

A Sad Story About a Mortgage Broker

Here is how my August went. I started out with ten loans that I thought I was going to close. Five of them were with one borrower which is one reason why things unraveled the way they did. My borrower has an excellent credit profile. He holds onto nine mortgages, a car loan, a couple student loans, and several credit cards and never in his life has he been late on anything. Now, because he has so much outstanding credit his score is good not great. Also, he is in sales and owns multiple properties so it is virtually impossible to ever show any documentation to verify his income. Still between his strong credit and the fact that he has money in the bank, his loans were always difficult but doable.

Right around my thirty third birthday, his loans started dropping one at a time. The worst thing about it is that they were dropping for newly made up reasons. While he had money in the bank, it wasn't "congruent" to the amount of money I claimed he made. In other words, he didn't have enough money in the bank for the amount of money I claimed he made in income. While this is a reasonable way of judging things, it was NOT any of the bank's guidelines when I submitted the loan.

I kept trying to find new banks for his loan. I found one and the next day they announced they were shutting down operations. I found another and they changed guidelines right after I found them. I finally found one that I thought would work. They fumbled around with it for five days. Then, while I was driving to a wedding in Minnesota, I got the news on Blackberry that they too were denying the loan, and also because his so called liquid assets weren't congruent to his income.

By the end of the month, the ten loans I thought I was going to close wound up being zero and this is a story that most mortgage brokers will tell you about the month of August and even into September. In those two months, banks were looking for reasons to deny loans. It was near impossible to close anything, and thus, it was near impossible to do what I had dedicated the last six years of my life to. The industry was in turmoil and there was confusion and fear everywhere. Almost no one was sure they would even stay in the business and no one knew what would happen next.

I bet I know your reaction. Who cares? You are a scummy mortgage broker and your excess brought this upon yourself. I have no sympathy for you and I hope that your next year is like August. If you think this way, then ask yourself why you sympathize with the people in this article.

This is an article about people about to face foreclosure. There stories are no less heartwrenching, but frankly no more. If you think it is tough facing the reality that you can't afford to pay for your house, try facing the reality that your industry is in such a state of chaos that you can probably no longer afford to be in it. Losing a house is bad, however losing a career is much worse.

Yet, there is NOT one article about any mortgage broker and the difficulties we have faced in these months. That is despite the fact that our stories are no less poignant. That's because unlike homeowners we aren't sympathetic.

Thus, newspapers like Chicago's Daily Herald, and this one from the New York Times, print stories in which borrowers are portrayed as empathetic victims. Their stories are heartwrenching and we are supposed to feel sorry for them. No one feels sorry for the mortgage broker, even though it is no less heart wrenching to watch your career go up in smoke.

That is frankly not the point. I don't much care if anyone has sympathy for me or my industry and I certainly could care less if any newspaper ever wrote a sympathetic piece about us. Unlike the borrowers, most of my industry could care less if the world has any sympathy for us and we don't seek attention at these times. The reason for this piece is that policy is being determined based on the misleading narrative that borrowers are sympathetic and mortgage brokers and banks are bad. Policy can't be determined based on this principle. Yet, newspapers are hammering this theme home.

The politicians are responding. They have responded with H.R. 3915, which attacks predatory lending, and provides even more protection for borrowers in case they go bad on the loan. In other words, based on the narrative that borrowers are good victims and brokers are evil predators, the pols will design a bill that protects the borrower and punishes the broker.

While this may be good politics, especially when it is egged on by the media, it is terrible policy. Borrowers signed paperwork and they agreed to certain conditions. They aren't meeting those conditions, and now the legislature wants to provide extra protection in case they won't meet those conditions. That is called a moral hazard.

It is hard to know exactly how the final version of H.R. 3915 or its equivalents and cousins will look like, however there have already been several scary things being floated. For instance, Senator Dick Durbin wants to allow for bankruptcy courts to be able to renegotiate the terms of mortgages. In other words, if you go into bankruptcy, you will be rewarded with a better mortgage.

The borrower is actually able to sue the securitizer, Wall Street, if their loan goes bad, and the borrower is afforded all sorts of new protections if they go bad on a loan. Here is the language vis a vis securitizers...

Assignee/Securitizer Liability (does not extend to trusts and investors): Subject to exemptions below, for loans that violate the minimum standards (reasonable ability to repay and net tangible benefits), a consumer has an individual cause of action against assignees and securitizers for rescission of the loan and the consumer’s costs for rescission.

Here is the language vis a vis foreclosures...

When the holder of a mortgage loan or anyone acting on behalf of the holder initiates a judicial or non-judicial foreclosure, (1) the consumer who has a rescission right under this bill may assert such right as a defense to foreclosure against the holder to forestall foreclosure, or (2) if the rescission right has expired, the consumer may seek actual damages (plus costs) against the creditor, assignee, or securitizer.

This is a moral hazard and it is dangerous. If you give people an incentive to go bad, that is exactly what they will do. This is happening because newspapers are perpetuating a narrative. It is a narrative that gives politicians a political angle. None of the narrative is rooted in reality mind you. The reality is significantly more complicated. The reality is something that politicians and their partners in the media have no desire of discovering. Instead, they will pass laws that fit the narrative and perpetuate the very problems they claim to be attacking.

Here is the problem. They create vague concepts that fit their narrative. They are concepts like "predatory lending". Here is the problem with that concept.

There is no specific definition about what exactly predatory lending entails, though most observers believe that the description applies when lenders take advantage of borrowers by charging high interest rates and consider only the value of a borrower’s assets, as opposed to what the borrower can afford to pay.

In other words, politicians have created a concept they can't define. It is there solely to make them feel good and also so they can tell the masses they attacked the bad guys. The problem is that in my business there is only one practical effect of vague and undefinable concepts,

YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET

That's right. The practical effect of all of the legislation that is currently on the books is even more paperwork to sign during the process. Anyone who has closed a loan knows how much attention you pay to the paperwork you already sign, and now you will sign even more.

Why does this happen? That's because politicians are responding to political not policy opening, and that opening is created by one sided heart wrenching pieces in which certain groups are painted as victims and others as villains.

Imagine how much different the legislation would be if every newspaper published stories like the one that started this piece. They would of course be no less dangerous, but they would be different.

In the News

International:

French "youths" are rioting again. Way back when it took Jacque Chirac twelve days to come from under his desk before addressing a French "youth" riot. There are plenty here in America that snicker at such a display. We shouldn't snicker. This is very dangerous and some very bad people are organizing these displays of aggression. The French appear totally impotent to stop them, and that should scare everyone.

There is plenty of news out of Pakistan.

Former Prime Minister Nawaz Sharif, fresh from a triumphant return from exile, registered Monday as a candidate for Pakistan's crucial elections.

However, he maintained a threat to boycott the Jan. 8 vote and said that, even if he did take part, he would not lead any government under President Gen. Pervez Musharraf.

Speaking of Musharraf...

Musharraf is expected to step down as chief of Pakistan's powerful army this week and continue as a civilian president — a key demand of his domestic critics and international sponsors.

This would all be merely the peculiar politics of the Middle East if it wasn't for a huge Islamist contingent in Pakistan and the country's access to nuclear weapons. As such it becomes a potentially explosive situation.

In Australia, John Howard lost the election handily. No doubt, Bush's opponents will use this as a referendum (conveniently skipping elections in Mexico, Colombia, Canada, Germany, and France) and there maybe some of that, however don't fret too much for Howard. He had an eleven year run. In any country, in any office, that is pretty good.

National:

The buzz everywhere is about Trent Lott resigning his position in the Senate by the end of the year. As Michelle acutely points out, he is a unifying figure, at least on the internet. The right blogosphere is no more kind to Lott than the left blogosphere. I don't know the man so I will speak no ill.

The Washington Post reports that Rudy Giuliani and Mitt Romney are turning up the heat on each other in New Hampshire. Look at any focus group organized by Frank Luntz and you will see that attacking your own party's rivals during the primaries is dangerous business. Primary voters are partisan which means in the primary they generally like all the candidates and just like some more and some less. This is a dangerous strategy so stay tuned.

The Fox Guarding the Hen House

This is the final report filed by the Grady Task Force. Let me sum up for anyone that doesn't want to bother to click the link. This is a report that is about thirty pages that is full technical jargon that almost no one can understand.

So, what is the Grady Task Force and why should anyone care? If you have been following my work, you know that Grady Hospital has been in financial turmoil for years and it has now come to a head. Grady Hospital is one of the biggest hospitals, one of the biggest public hospitals, and one of the biggest hospitals for the indigent in the country. It needs a huge infusion of tax payer funds, up to nine digits, or it will close down.

The Grady Task Force is a sort of consulting group, created by the Metro Atlanta Chamber of Commerce, designed to make recommendations to "fix" Grady Hospital. The very fact that Grady Hospital needs this sort of consulting group is curious in and of itself.

This past spring Grady fired Alvarez and Marsals, a professional consulting firm it hired to recommend ways in which it could avert financial ruin. That was only after paying the firm a cool 300K plus, PER MONTH, and over 3 million dollars total. Consulting firms are nothing new for Grady Hospital. Frankly, Grady Hospital goes through consulting firms the way that Liz Taylor goes through husbands. They pay each of them handsomely and they are even thinking of hiring yet another despite having a "consulting firm" hand picked for them by the Chamber.

One would think that after spending roughly eight digits on consulting firm in about two years, Grady would finally figure out WHAT THE F$%K IS WRONG. That is if these consulting firms are being hired for their advice rather than other reasons. For instance, would it surprise anyone to learn that the principles of Alvarez and Marsals have close ties to Grady board member Michael Hollis? Would it surprise anyone to learn that all of the prior consulting firms were in one way or another hired for some reason other than their professional qualifications? It wouldn't surprise me, and my proof is in these Latin words, res ipsa loquitor. The facts speak for themselves, and the facts are that at least four consulting firms have produced a hospital on the brink of financial ruin. Again, Grady paid about ten million dollars for all of this consulting. If these relationships were on the level, this money would have produced something better than what we have.

Now, we have the Grady Task Force, an unpaid consulting firm. When, we examine the facts, I think that we will see that the Task Force has other financial considerations in Grady Hospital. The bulk of the members are community and business leaders and that gives the force a sort of rep. They are also individuals and entities with financial and professional interest in Grady, which makes me wonder if their advice is on the level.

For instance, there is Robert Brown. He is the former head of the Grady Board. He served on the board during a period in which Grady was convicted of Medicare fraud, State Senator Charles Walker was convicted of 127 felonies, many related to Grady, and an HHS report came out and concluded this,

there is a serious and immediate threat to the health and safety of the patients

Does it sound to anyone as though he has any business being on the board given his history of failure at Grady, and possibly obscene amounts of corruption. Did I mention that Robert Brown is also of RL Brown and Associates, an architecture firm? Would it surprise anyone if his own architecture firm was the recipient of several "sweetheart deals" for additions and upgrades to Grady during his tenure? The list is full of such names: Michael Johns, of Emory University, Michael B. Russell of H.J. Russell (also a recepient of several contracts), John E. Maupin, MD – ex-officio President & CEO Morehouse School of Medicine (another proprietor of Grady Hospital), Phil Humann CEO SunTrust Banks, Inc.(with significant financial ties to Emory University but who doesn't in Atlanta), etc. One would think that if a hospital is near financial ruin the last people that would be in charge of recommendations to fix it would be those who put it there in the first place. Not with Grady, in this case the very same people that were responsible for putting Grady in this position are now in charge of fixing it. That is why I call this piece: The Fox Guarding the Hen House.

Like I said earlier, most of the recommendations are quite technical and difficult for the layman to understand. One has caught my eye and it is a plan to make Grady Hospital run by a private corporation. Under this plan, Grady would still receive public funds so the only practical effect would be more secrecy when it came to public fund usage. Given Grady's history with corruption: State Senator Charles Walker, the Medicare fraud, so called double dipping and atrocious patient care, and all sorts of other unproven cases of malfeasance. Is going private and more secretive really the best way to "save Grady". It probably isn't however if I were looking to commit more corruption at Grady, I would certainly want to make it private.

I would love to hear what possible public benefit Grady going private would have. There appears to be none to me, though there is an obvious one if you wanted to commit more corruption. There is a vote coming soon in the Georgia legislature. My own read is that the folks of Georgia don't want the hospital to go private. There appears to be no public good in it. Thus, I can only see one reason for any politician to vote for that plan and by my estimation that vote disqualifies said politician from serving again.

Oh and finally, you want to add insult to injury. After Grady is done listening to the consulting recommendations of the unpaid Grady Task Force, they plan on hiring another paid consulting firm. Frankly, if the Grady Task Force is on the level one would think there would no longer be need for anymore consulting firm. If, that is, the Grady Task Force is on the level.

UPDATE:

While I tried to make this piece as comprehensive as possible, if this is your first exposure to the story behind the crisis at Grady Hospital you may very well be quite confused. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

If Embryonic Stem Cell Research is SO Great...

Why doesn't George Soros use one of his several billions to fund it. This is the question that I asked to a liberal family friend at Thanksgiving dinner. The question came up after they mischaracterized George Bush's position on stem cell research. They claimed that George Bush is against stem cell research.

First, Bush's position, along with his supporters on this issue, must be clarified. Bush isn't against stem cell research and in fact he isn't against any form of stem cell research at all, even the controversial embryonic stem cell research. Bush isn't even against government funding for all embryonic stem cell research. He is for funding on embryonic stem cells that have already been discarded. What he is against is the government funding of embryonic stem cell research in which embryos are created for the sole purpose of being destroyed for research. He doesn't believe that tax payer funds should be used for research in which human life is destroyed.

A new scientific discovery has put the issue of embryonic stem cell research back in the forefront. I want to give a hat tip to my Redstate colleague tomlinsondouthat for finally putting this sophisticated science into layman's terms. Think of the different forms of stem cell research as disks. Adult stem cells are blank disks however they can only be used for one purpose like: DVD's, CD's, games, etc. This is called multipotent. Embryonic stem cells are blank disks that can serve any function. This is called pluripotent. Obviously it goes without saying that there is potential in embryonic stem cell research not held in traditional stem cell research. Now, scientists have discovered a technique in which they can essentially take adult stem cells and remove all of their data and turn them into something close to any embryonic stem cell.

The science is interesting and fascinating but let's face it most of us are too stupid to understand. The morality, on the other hand, is something all of us need to think about. Proponents of federal funding for stem cell research believe that any procedure with potential must be explored because science must be given a chance to flourish fully. While this is true, there must also be some line that we cannot cross even if there is scientific potential. For instance, human cloning has plenty of scientific potential and even this scientific layman wouldn't be surprised if it lead to many discoveries that saved lives. That doesn't mean that we as a society should support its research, and it certainly doesn't mean that the federal government should use tax payer funds to fund it. Heinrich Himmler's experiments also probably had great scientific potential. Of course, no one believes those should be done let alone funded by the federal government.

There will be many proponents of embryonic stem cell research that will say my comparisons are ridiculous and unfair. Are they though? After all, proponents of embryonic stem cell research believe we should create human life for the sole purpose of destroying it. Given that context is it really not a good comparison? What is more obscene than the destruction of human life? THAT IS THE ROOT OF EMBRYONIC STEM CELL RESEARCH.

The proponents of embryonic stem cell research don't consider an embryo a human life because it doesn't perform all the functions of traditional humans. This is of course the most obscene position. They are the ones that favor destroying the life before it lives the way they consider living and then say it isn't really a life. These are the important questions that proponents of embryonic stem cell research refuse to answer or write off.

In fact, it was Bush's insistence on moral and ethical scientific research that fostered the environment for the innovations recently discovered in stem cell research. While his opponents condemned him for standing in the way of scientific breakthroughs, he provided funding to the National Institute of Health so that scientists could develop methods of research on stem cells that didn't face the moral dilemmas of embryonic stem cell research.

It is exactly the sort of society that Hitler favored that says morals and ethics be damned in favor of scientific research. While those, like my family friend, condescend to those like me who have the nerve to ask such ethical questions, I ask my original question? If embryonic stem cell research is so great then why can't scientists get George Soros to provide funding.

I recently read the book, Freedomnomics, and it left me with no doubt. The free market is the ultimate equalizer. If embryonic stem cell research is really that great and all moral questions are trivial then researchers should have no trouble going into the private marketplace for funding. There are more than enough philanthropists looking to park their money in worthy causes. If the proponents of embryonic stem cell research are really right, they don't need the federal government to give them a hand out for funding research. That isn't what they want though. They want us all to ignore the important ethical questions raised by embryonic stem cell research, and still use government, or tax payer funds, to fund it. This despite the fact that many tax payers are against this sort of research.

The proponents of stem cell research on the one hand claim that ALL ethical questions are trivial and then want to force tax payers to fund the research despite their own ethical questions. If all ethical questions are irrelevant, and embryonic stem cell research is all that, then the private marketplace really is the best place for embryonic stem cell research.

The fact that proponents are so forceful in supporting government hand outs tells me that maybe their position really isn't all that.

The Dynamics of Political Corruption

It has been said that absolute power corrupts absolutely. In my fair city, Chicago, our mayor, Richard M. Daley, rules it much like a king. For instance, he won the last election with over 70% of the vote against two other candidates. While we technically live in a Democracy here in Chicago, the political realities are such that Mayor Daley will be our mayor for as long as he wants. He has not only survived scandals that ruin most political careers but has frankly thrived despite them. Such scandals as the hired truck scandal, patronage by point man Robert Sorich, and several top deputies under indictment or investigation, Daley is NOT a politcal boy scout in the manner in which he runs the city. Pundits have long predicted each scandal as his eventual downfall.

Even amid Chicago's storied reputation for corruption, this has been an unusually significant and far-reaching investigation involving 30 indictments and 23 convictions. Those charged have included a top official at the mayor's office of intergovernmental affairs and the former deputy water commissioner, who pleaded guilty to taking bribes, shaking down companies for political contributions, and rigging hiring. With a number of cooperating witnesses, including the water czar, the investigation is far from over.

What's remarkable is that for the first time, Mayor Richard M. Daley seems politically vulnerable. His approval ratings are the lowest since he was elected in 1989. Beneath the apparent cynicism over corruption, many Chicagoans seem genuinely to care about the finding and don't accept his repeated statements that he has nothing to do with hiring. One Republican official even offered a $10,000 reward for anyone who could provide information leading to Mr. Daley's conviction. The next election is two years away, but the notion of a legitimate challenger and potential Daley defeat - once a laughable premise - is now an open discussion.

That article is from 2005, and that "open discussion", led to two candidates combining for less than 30% of the vote. The political reality in Chicago is that winning means you stick with Daley. I give everyone this background so they can understand the context of the brewing political brawl going on in Chicago.

I give a special hat tip to Chicago's artsy "underground" newspaper the Chicago Reader for this story. In many ways, this story has all of the cynical elements of Chicago politics: backroom deals, powerful people protecting each other, and other elements of corruption. At its roots is an all powerful mayor and the political dynamics that creates.

The Reader picks it up with this...

Corporation counsel Mara Georges works for Chicago’s taxpayers, of course. It’s pretty to think that inside City Hall keeping us happy is everybody’s job number one.

But seriously, who gets to give her orders? The Department of Law, which Georges oversees, is an “executive department of the municipal government”—to quote the municipal code. So Georges works for the city’s top executive—the mayor who appointed her.

The City Council advises on and consents to that appointment, and the municipal code goes on to say that “the corporation counsel shall have authority, when directed by the city council, to make settlements of lawsuits and controverted claims against the city.”

So Georges works for the City Council too, and when it says “settle” she’s supposed to settle. How odd, then, that at the moment she won’t even settle with the City Council.

The municipal code also directs the corporation counsel to “protect the rights and interests of the city in all actions, suits and proceedings brought by or against it or any city officer, board or department.” That means Georges works for the police, to name the department whose chestnuts most frequently need to be pulled out of the fire.

At issue is a list of so called "rogue" police officers, those with ten or more citations in the last five years, that the city council is demanding and the city refuses to hand over. In such a case, it is unclear where the loyalties of the City's Corporate Counsel may lie. In this specific case, it is clear where this particular Corporate Counsel's, Mara Georges, loyalties lie. She has represented the police department against the city council every step of the way.

The Chicago Police Department has had several high profile incidents of malfeasance recently. Thus, one could make the case that revealing the names of so called rotten apples would go a long way toward restoring the reputation of a force that for the most part has done good work.

By withholding such a list, the city and the department only perpetuate the image of a force out of control. (an image that I don't for one believe is the reality) The case is one that only a lawyer could follow or enjoy bouncing between Circuit Courts and Appeals Courts with each deciding jurisdiction. The outcome so far seems to be that the names will continue to be remain protected.

Despite what appears to be an overriding issue of public good and right to know, Georges continues to use ambiguous legal arguements to justify taking such a stand. Here is how her representative in the last hearing George Yamin put it.

You know, to represent the City of Chicago it is very ambiguous to say who are—you know, who wants—who our actual clients are. And I think it should be—we have—the relief we have asked for is not unreasonable.”

To me at least, this case comes down to who has more power within the dynamics of the city's political structure. In our city the City Council needs Mayor Richard Daley a lot more than vice versa. Thus, when given a choice of sides most operatives a la Mara Georges choose Daley.

In the News

Lot's going on in the world today. Nicholas Sarkozy is on the verge of winning his stand off with the unions.

Yesterday, the strike of rail and subway workers that has crippled France for nine days was clearly crumbling, as workers began returning to work in large numbers and union branches conceded that support for the dispute is collapsing.

"We think a dynamic of return to work has begun," Julie Vion, a spokeswoman for France's state-owned railroad network, SNCF, said.

Union leaders began to concede defeat yesterday. "We have to face reality. Since yesterday's negotiations, things have changed. The strike is no longer the solution. The strike strategy is no longer winning," a leader of the Sud union representing Paris underground railway workers, Philippe Touzet, said in an interview with Bloomberg News.

One of Margaret Thatcher's signature domestic accomplishments, was her similar crushing of the British unions. Obviously, it depends on where you stand whether or not these are good things.

In Australia, John Howard faces re election. Howard faces off against Labor Party leader Kevin Rudd. Of course, there are likely a plethora of domestic issues involved in this race, however there will be those that will use this as a referendum on Bush foreign policy. I have long pointed out that while the rest of the world claims to hate America, and mostly Bush, they continue to elect pro American leaders: Sarkozy in France, Merkel in Germany, Calderon in Mexico, Uribe in Colombia, Harper in Canada, and even Howard won re election a few years back. We will be keeping a close eye on this race.

In Lebanon, President Lahood has ordered martial law.

In India, ten lawyers were killed when simultaneous bombs ripped through a courthouse.

Why Do So Many Go Hungry?

That is the title of Anna Quindlen's latest column. It is a problem she lays directly at the feet of government and this administration in particular.

Poverty has not been discussed much by the current administration, which was
wild to bring freedom to the Iraqis but not bread to the South Bronx.

In the view of Quindlen, and many like her, poverty is a problem for the government to resolve. Poverty is just one of many problems that folks like Quindlen think is the responsibility of the government. Many times they frame the arguement into one of moral responsibility. Here is a comment from an individual of like mind to Quindlen from another of my diaries.

In the name of Jesus, what is wrong with helping to provide for the common good? Did Jesus say at the sermon on the mount, "Blessed are those financially well off enough to pay for private medical insurance?" Did He say "Blessed are the ones who only serve their self interests?"Since when did health become a privilege? Does the Declaration of Independance say "...the privelage of life, liberty and the pursuit of happiness...?"

Doesn't the Constitution say "...promote the general Welfare...?"I'm sorry I have to disagree with the naysayers who whine about their tax dollars going to pay for the general welfare of our society and our health. That's not big government that's responsible government. That's not the government intruding into your life. That's the government helping its people. A government is only as effective as the people who run it. And as long as we continue to sit idly by and let it "run itself" it's only gonna get worse. If we take the government back into our own hands as a real American society we can curb the corruption
that has left us with unregulated pharmaceutacle pricing practices, and rediculous malpractice insurance premiums that doc's have to pay and pass the cost onto the patient to stay afloat.

Quindlen, not surprisingly, frames much of the rest of her arguement with allusions to Jesus as well. Jesus, of course, meant personal charity not charity taken forcefully by the government. Neither Quindlen, or this commenter, ever extol the virtues of personal charity. Instead, all those things that Jesus wanted for citizens to do for the less fortunate, those like Quindlen want the government, through our tax dollars, to do for everyone.

It is this sort of moral arguement that brought us such government programs as the ponzi scheme known as social security. It brought us Title IX, the Federal Farm Board, Medicare, the Endangered Species Act and many other well intentioned and ultimately counter productive and bloated government programs. In fact, the Great Society, the mother of all government programs, was supposed to end poverty and hunger forty years ago. Despite its obvious failings, Quindlen believes that it still government's responsibility to feed the homeless, and federal government no less. I had a similar argument with a liberal friend of mine about socialized medicine. In his defense of socialized medicine, he asked why, in America, everyone doesn't have the right to free quality health care. (To which I responded that the only rights we have in America are those enumerated in the Constitution) It is this sort of EMOTIONAL arguement that liberals have been using, effectively many times, to convince the public that it is government's role to solve many of our problems: hunger and health care included.

In my business, mortgages, there are two sorts of people: emotional and logical. The logical borrowers are always easy to deal with. They are convinced by the numbers because numbers are logical. The numbers always tell the story in mortgages. If I have a good deal for someone, the numbers will speak for themselves and logical people will always find the answer in them.

Emotional people, on the other hand, are loose cannons. Anything can set them off and you appeal by pushing their so called button. You sell to them by appealing to their basest emotion, and of course, figuring that out is the trick. They of course can be set off by anything. I once had an emotional borrower flip out because an appraiser still hadn't called an hour after they were supposed to. Given that a reasonable mortgage process can take up to a month (and an unreasonable one even longer) you can see what a tight rope an emotional person can be through such a process.

As far as politics is concerned, Quindlen and her ilk, occupy the emotional end of the spectrum. (I pointed out recently how the NY Times used such an emotional arguement in mortgages) Remember, it was the Democrats who trotted out Graeme Frost (just look at the picture, are you really going to say no to him) during the SCHIP debate. There is of course no rational or logical reason for expansion of government, especially into things not found in the Constitution, so the only arguement left is emotional.

There are two problems with those that use an emotional arguement. The first is that it is usually wrong. The logical arguement is the sensible one, and if someone could make a logical arguement, they would. The second problem is that most people aren't sophisticated enough to realize this. That is why the Dems are winning the SCHIP debate. It is why faulty government programs like social security, Medicare, and the Federal Farm Board become law. While there maybe no logical reason for having them, they can be sold by appealing to emotion. Most of the folks, just aren't frankly smart enough to realize what is going on, and ultimately they get sold a bill of goods.

Finally, if we all truly believe in the philosophy of Jesus, we wouldn't need government programs to solve any of these problems. Thus, here are some ways YOU can help the poor and homeless in my hometown of Chicago. If you don't live in Chicago, then Google your hometown like I did mine.

An Important Email

VeThis piece about the murder of Sheriff Elect Derwin Brown, the "suicide" of Charles Hicks, and how they connect to the dastardly character, Vernon Jones created a bit of a stir and has become a sort of cult favorite in the blogosphere. (Yes, I risk sounding awfully arrogant with that statement however the numbers don't lie) I received an email from someone that wishes to remain anonymous for now in response.

Mr. Volpe, Greetings... I have recently been reading many of your comments specifically relating to corruption, politics, and particularly Dekalb County.. You Sir are right on point!!! The dynamic that resulted in the ELECTED by the people Sheriff Derwin Brown (as opposed to the establishment "appointed" Sheriff Tommy Brown) was certainly a result of a vast conspiracy not merely the action of a single individual(Sid Dorsey)..

Derwin had himself uncovered many instances of longstanding good ole boy wink and nod politics and outright corrupt practices. Additionally, he aligned himself with individuals ( such as yours truly) who had personal knowledge of corrupt practices and deals that government officials elected in Dekalb had engaged by formed cozy
relationships with business people for their personal gain and pecuniary benefit. All be it strip club operators, county vendors, bail bondspeople, or off duty officers with private security accounts; Derwin represented the end of this type graft. These miscreants wanted him stopped and they stopped him. Maybe by not necessarily pulling the trigger but by creating an atmosphere and culture that resulted in demented and ignorant individuals like Dorsey, Cuffie, et al feeling that it needed to be done and should be done..

These tacitly involved individuals have Derwin's blood on their hand to the same extent as the trigger men... Moreover, allowing individuals like Vernon Jones, Charles Hicks, Louis Graham, and Thomas Brown (the prmier figurehead) to run the government is nothing short of a farce.. Mr. Hicks may have truly had a crisis of conscience and therein lies the reason for his unfortunate death (be it suicide or murder). The real power brokers (Bob Wilson, Ray Suddeth, Mark Dehler, Frank Redding, and Sembler) are the ones reaping the real benefits $$$ from these shenaigans in Dekalb County government over the last 15 years. Unfortunately, it is at great cost to the taxpayers and underminds the sheer fiber that our Constitution is foundationed upon and yes cost at least one hero his life..

What everyone needs to understand is that nothing that I have exposed has happened in a vacuum and that ultimately it all connects. I can only bring the truth to the open but it is up to the citizens of Atlanta and Georgia at large to act. You can all start by demanding free and open hearings about Grady before one more dime is dropped in their coffers. Furthermore, you can all make a statement by giving Vernon Jones a resounding loss in the primaries. The citizens can demand some answers in the case of State Senator Charles Walker. Unless you all are satisfied with one man, his daughter, and the companies they ran being convicted of 127 felonies, being sentenced to ten years, and no one else even being charged.

Take what I say next or leave it, however your city and state is home to the most obscene corruption I have ever witnessed and given my home city that says plenty. Sadly, as it stands now, the aptly described hero, Sheriff Derwin Brown didn't merely die but he died in vain. Not only did he die in vain but his memory is being spat on everyday that Vernon Jones runs for the U.S. Senate. There is no doubt in my mind that he is a part of the very corruption that is a cancer in your city and state. The very idea that he is campaigning rather than answering for his endless sins is obscene not only to me, but frankly to the memory of Derwin Brown.

You have the power to make this stop. You watched while a hero died and did nothing. You watched while one of the biggest hospitals in the country was pilfered and did nothing. How long will you stand by and watch this happen? Unless, you the citizens, finally rise up nothing will change. I hope that now, once and for all, you will finally say enough is enough.

(UPDATE)

I realize that if anyone picks up any part of the story of the Grady crisis in the middle, they will likely get lost. Thus, if this story is your first exposure to the mess surrounding Grady Hospital, you are probably thoroughly confused. Since we can't have that I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

Trifecta from the New York Times vis a vis Mortgages

Either I have come late to the game or the New York Times used this week to come out swinging against the mortgage industry. In the last two days, I have featured two separate articles vis a vis mortgage from the New York Times. The articles follow a pattern of narrative of the mainstream and it is a dangerous pattern.

The New York Times takes on a populist message. They side with the borrower against the mortgage broker and the bank (and even against Wall Street). The propose all sorts of legislation that protects the borrower even more against foreclosure and the undefined "predatory lending". For instance they back a bill by Dick Durbin that gives an incentive to go into bankruptcy. Under his bill, a person that goes into bankruptcy can re negotiate the terms of their loan. I assume that means for the better. Not only does this give incentive to go bad, but frankly all good borrowers would scream bloody murder and it would create an obscene amount of legislation.

That is some of the legislation they support in the first and second installment. Here is their third installment. (I believe it is their first in chronology however I found it last). First, the New York Times laments a portion of H.R. 3915 that has been altered.

Industry has already scored some regrettable victories. It persuaded the bill’s backers to include a provision that would prevent borrowers from suing Wall Street firms in state court — where consumer protections are often stronger — for common abusive loan practices.

Here, the New York Times, much like most in the media and unfortunately in Congress as well is dealing with concepts well beyond their grasp. While it may make for a great populist message to say you back allowing borrowers to sue Wall Street if they suffer hardship, this is an absolute nightmare. The first problem is that most people don't understand Wall Street's role and of course the consequences of opening them up to suit. Wall Street creates markets for loans. Whereas banks deal in millions of dollars of loans, Wall Street turns those loans into bonds and deals in hundreds of millions. If each individual borrower could actually go to the securitizer (that is Wall Street or the folks that turn loans into bonds) and sue them because they felt they were wronged, that would open up the litigation floodgates with unknown results. That said, the practical results would be that Wall Street would simply not get involved in securitizing loans.

This is in fact what Wall Street has done already with no legislation. Long ago Wall Street soured on mortgage backed securities and without legislation they have washed their hands of the instrument. The sort of legislation the Times touts would give Wall Street even less incentive to get back into that market. Remember, it is those "evil" Wall Street folks that the Times is dying to attack, that created a market for most of the poor folks to get loans in the first place. Before there was such things as mortgage backed securities, the standard loan usually required 20% down and good credit. It was only the innovation of mortgage backed securities that lead to the revolution in mortgages and created the sophisticated system we have today.

Now, the market in the aftermath of the crisis is threatening that system. Sub prime, the outlet for loans for most of the poor folks the Times pretends to care about, is being threatened out of existence through market forces. By this I mean, Wall Street is refusing to make markets for those loans. Without a market, most of these banks will go under or move out of sub prime. Again, this is happening without the push of any legislation. Now, the Times is supporting legislation that would hold Wall Street liable for bad loans. This gives the folks on Wall Street even less reason to make a market. This is at exactly the time when we need to give them as much reason as possible.

Then, the Times says this...

Another must-pass amendment would adopt sensible underwriting standards for all nontraditional mortgages — not just subprime loans — including a rule that lenders must verify a borrower’s ability to repay. The amendment is crucial because it is not only subprime loans that have turned out to be toxic. Another important proposed change would give borrowers the right to modify an illegal loan, before they’re forced into foreclosure.

The first problem with this philosophy is that the word sensible is vague and difficult to define. In my business, whenever there is legislation that is vague and difficult to define what that means to the consumer is

YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET

If there is legislation passed and all it says is a reference to sensible underwriting standards, then banks will create a sensible underwriting standards disclosure. That is what banks do every single time there is vague legislation and the reason why there a hundred documents to sign and not ten or so. Second, the Times, with their cohorts in Congress, continue with their attack on stated loans. (these are loans in which income is claimed but not verified). While the concept of stated loans gets debated in the halls of the Times, the mortgage market has long rendered its verdict. Stated loans are virtually non existent. If Congress wants to outlaw them completely, that is their prerogative but they will only be following the market. The problem with outlawing stated loans is that it assures that the overwhelming majority of self employed borrowers and real estate investors never get a mortgage. Since they are able to take a plethora of write offs, proving income is virtually impossible. (for real estate investors, there is a complicated mortgage formula too boring to discuss that also makes it impossible)

By throwing out the baby with the bathwater so to speak and outlawing stated loans entirely, all Congress would do is remove their original intent. The market has long ago on its own returned stated loans to their original intent, self employed borrowers and real estate investors. The problem wasn't stated loans but rather that garbage men, secretaries, and janitors, could now claim income even though they were salaried and thus had only lying as a reason to go stated.

The New York Times, along with their cohorts in Congress, don't care much about that or frankly good policy. They have figured out which side they need to be on to look good. Keep in mind that while the Times looks to punish banks, brokers and Wall Street for providing loans to borrowers who "lacked a reasonable ability to pay". It was these same borrowers that willingly agreed to take loans that they either did know, or should have known, they couldn't afford. If the borrower themselves had followed their own reasonable ability to pay philosophy, we wouldn't have this mess. The blame isn't solely on their shoulders however, unlike what the Times, and the Congressional cohorts believe, they must shoulder some of the blame.

The reason this is important is because the crisis will affect everyone. The legislation that will no doubt follow must be sensible. Right now, it is not. The Times is effectively cheerleading for Congress to pass legislation who's sole effect is playing political games at the expense of good policy. Ultimately the only practical effect of these new laws will be that the borrower

HASN'T SIGNED ENOUGH PAPERWORK YET

There are two huge problems with this entire mortgage debate. The first is the naive and uninformed making statements, observations, and recommendations regarding the path forward. The second is the uninformed making policy on how to move forward. The New York Times represents the first and Congress represents the second. The mortgage market is at vulnerable state and the last thing it needs is the contribution of the uninformed.

In the News

I bet there are many out there who think they were unfairly punished for one offense or another. You have nothing on this 19 year old victim of a gang rape in Saudi Arabia. After undergoing that unimaginable pain, the Saudi courts sentenced her not the rapists to 200 lashes. Commenting on this is useless so I will simply report it.



The Michigan Supreme Court has reinstated their primary as January 15th. The rush of primaries continues though I do believe that each of the parties can still move to take delegates away from Michigan and other states if they please. Following suit New Hampshire has set their primary at January 8.


The dual reign of Pervez Musharraf appears to be nearing its end. Reports out of Pakistan have Pervez Musharraf giving up his post as military leader and becoming solely the civilian leader by this weekend. The whole situation remains dicey and fragile. Pakistan may soon become the new ground zero for the GWOT.


It appears Mr. Van Der Sloot has been arrested in Natalie Holloway's murder again.

My Frat, The Dems, and War Funding

It was only a couple of weeks prior to graduation and given that Champaign, Illinois is cold throughout much of the school year, many of my fraternity mates went to the roof of the house to enjoy their alcohol. Alcohol did what it does, and soon enough, some of them started jawing with the members of the fraternity across the street. This jawing continued to escalate until one member of my fraternity through a bottle across the street onto their roof. They one upped us and used a sling shot to hurl a bottle across the street. This one didn't just fall harmlessly but rather crashed through the window in the back of the roof. This turned into a full confrontation, and it was a confrontation that my fraternity eventually backed off from. We allowed our window to get broken with absolutely no response.



It was the most I was ashamed of my fraternity brothers. I won't pretend that it had anything to do with the drinking or machismo. I was ashamed because clearly members of my fraternity started a confrontation that deep down they had no intention of finishing. I said as much to all the members in my senior speech. I said that if you are going to start a confrontation you d#$n well better be ready to finish it.



The reason that I bring up this peculiar story is because I believe that most of the Democratic leadership is acting much like the "tough guys" of my fraternity vis a vis Iraq war funding.



Stories are currently all over the place about the Democrats looking to tie war funding to some sort of a troop withdrawal date. Don't believe the hype. The Democrats are no different than any of the members of my fraternity. They are starting a confrontation they have no business finishing. I know this because they backed down in this same confrontation months ago.



Back in May, after passing funding only with troop withdrawal dates which the President promptly vetoed, the Democrats relented and passed a "clean funding bill". Maybe they didn't have the stomach to handle the political fallout of cutting off funds while troops were still in the field. Maybe, they weren't really sure the war was lost. Who knows?



Either way at the time, the war was written off by almost everyone. There were three digits of American military deaths monthly. Two to three thousand Iraqi civilian deaths monthly. Anbar was still in the beginning of its renaissance, and people were tired and angry about the war. Since then, our military deaths have dropped precipitously. Civilian deaths have fallen with them. The remarkable turnaround in Anbar has been chronicled by Michael Yon , Michael Totten , and many others. It has turned cities like Ramadi and Baquobah from some of the most violent anywhere into two of the safest in Iraq. The bottom line is that the situation has seen a remarkable improvement since the last time the Democrats have tried this.



The Democrats gave themselves away with this stunt when they began pushing it months before the military actually needs funds. They are clearly playing to their lunatic niche. It won't work with them and it won't work with the rest of the public. The far left won't accept the old college try, and no one else will accept cutting off funds especially now. The Democrats have started a confrontation they have no intention of finishing and they will end this one the way my fraternity ended ours, in shame.



Their base wants nothing short of all out withdrawal. They aren't going to deliver that. If they didn't deliver when the war was hopeless, what do they expect to do now that we are doing well. (for an excellent analysis of what is currently going on check out this piece by Christopher Hitchens) The rest of the country isn't going to be impressed with these shenanigans meant only to appease the fringe that everyone else frankly hates. There aren't going to be many moderates impressed with the Dems when they see them speak with a bunch of bluster only to back down, AGAIN. Our fraternity was the laughingstock of the Greek System (the largest in the country) in the immediate aftermath of that failed confrontation, and the Dems will look no less foolish once they back down from this ridiculous confrontation that they have started and have no plans of finishing.

In The News

Our least understood branch is taking up a case with serious 2nd amendment implications. This non lawyer believes that this case will come down to the interpretation of the word people in the 2nd amendment. Collectivists believe that the people refers only to organized militias, whereas pro gun groups believe that the people refers to individuals. Without getting off tangent into a discussion of the 2nd amendment, I suggest everyone read this book by Judge Andrew Napolitano. In it is a thorough explanation of the roots of the second amendment. It should be noted that it takes a pro gun stance however I was sold.

The net is abuzz with this Democratic poll in Iowa. It shows Barack Obama with a four point lead. I personally hate polls and even worse I hate too much emphasis on one poll. Real Clear Politics continues to have Clinton leading in Iowa. The lead is small and not insurmountable, however this will no doubt lead to a rush of pundits questioning Hillary's aura of inevitability. Since most of them gave it to her, if this happens, it will be more than ironic. As Dick Morris pointed out on H & C last night, Hillary is only bruised if she loses and guaranteed if she wins. This poll is frankly for the obscene political junkie.


There maybe a stem cell breakthrough. If I understand this correctly, scientists may no longer need embryonic stem cells, however this is so far over my head that I will just give a bunch of links and let the audience decide for itself.

The New York Times Versus Brokers and Banks

The lines are drawn and everyone needs to understand the stakes. The mortgage crisis is crying out for action and everyone wants to pick sides. Congress has picked a narrative and that narrative is politically correct. The problem with a politically correct narrative is that it doesn't address any problems but rather it assigns victims and villains and protects the victims and punishes the villains. If you read any of my work on mortgages and H.R. 3915 you will see my business has complexities that are totally foreign to anyone in Congress. They are making laws about things they can't define like predatory lending.

For instance, with in H.R. 3915, there is something called anti steering. This means that if someone qualifies for prime they can't be steered into sub prime. Unfortunately, prime is a vast universe and it isn't always better than sub prime. For instance, within Fannie Mae (something most of Congress think is a candy company) there can be what we call expanded levels of approval called EA1,2, and 3. The third level is extemely aggressive and thus has a very high rate. Sub prime can very well offer a better deal than EAIII, as we call it. If I steer someone from EAIII to sub prime, can I be sued? No one knows including the representatives of my Congressman's office, Rahm Emanuel (I know because I called and was directed to a confusing website with a one hundred plus page "summary" of the bill)

This matters not to Congress because protecting the homeowners, the victims, and attacking the brokers, the villains is good politics.

The truth matters not to the New York Times either. Yesterday, they published a piece endorsing a bill that would create the "moral hazard" of encouraging bankruptcy. They did it because the bill protected the consumer again, and punished the bank again. Today, we have this piece by Bob Herbert. It tells the story of poor Rosa Dailey who was harrassed and manipulated into taking on a mortgage she couldn't afford. Apparently, she received a plethora of phone calls and the calls wouldn't stop. Apparently, Ms. Dailey never told them to take her off the list or put herself on the do not call list (the time frame is unclear so I don't know if the do not call list was in place yet). Instead, she succombed to the pressure of the phone calls and was put into a loan she couldn't afford.

They knew that the woman who owned the house was old and sick and that her two aging daughters were struggling with illness and poverty as well. That was all to the good as far as the lenders were concerned. The predator’s mission is to home in on the vulnerable.

“The people that wanted to put through the loan called me about a hundred times,” said Rosa Dailey, who is 65 and going blind and needs an oxygen tank at times to help her breathe. “I kept telling them no, because I didn’t think we could afford it. But they kept saying how it was to our advantage. So I finally said: ‘All right, let’s see what we can do.’ ”

That was the beginning of a tragic spiral, with one unaffordable loan following another. As Ms. Dailey put it: “I feel like they led me down a dark alley.”

I have no doubt that this story is essentially true, and I have no doubt that there are plenty of sociopaths that occupy my profession that would perpetrate such a heinous act. What isn't revealed is why Ms. Dailey who apparently had a loan ever agree throughout every part of a month process to take on a loan that was clearly worse for her. What possible motivation would Ms. Dailey have to change what I can only assume was an affordable loan into a loan that wasn't affordable? Despite what Mr. Herbert implies, the rate, monthly payment, and other terms, are all clearly spelled out in the documents. Furthermore, it is something every consumer should ask before signing any of the initial documents. Was Ms. Dailey taking out cash? Was she taking a payment that was initially lower but then grew? We don't know, but for some reason Ms. Dailey moved from a loan she could afford into one she couldn't (or maybe Mr. Herbert conveniently leaves out that the loan she had she couldn't afford either). Unless someone signed documents for her, she must take some responsibility in the process or frankly there is no contract (which is what a mortgage is) anywhere that is worth anything.

I am not excusing the broker or the bank. In fact, I never miss an opportunity to take pot shots at my business. Before doing this I was a stock broker. Stock brokers made fabulously wealthy people less wealthy. While it is no less scummy, it is at least a bit more challenging. Mortgage brokers absolutely prey on little old ladies like Ms. Dailey and take advantage of them. That is because our business is such that we can make just as much money taking advantage of the weak as trying to take advantage of the powerful (who ultimately are not nearly as easy to take advantage) Fraud is fraud and if this case is accurate there was fraud committed and despite what some think this sort of fraud is already illegal. It is just rarely enforced which is the crux of the problem. That said, to say that Ms. Dailey was nothing more than a helpless victim despite signing documents agreeing to pay a loan back and then not paying it back is very well the politically correct thing to say. It is NOT the correct thing to say. There is a reason why there are right to recission laws. If Ms. Dailey felt pressured, that is what the three days after were for.

Again, what Mr. Herbert conveniently left out is why Ms. Dailey initially agreed to refinance a mortgage that apparently she could afford into one that wasn't affordable. For some reason she signed documents changing her terms from those that were affordable into those that weren't. There are scum bags in every business. Mr. Herbert acts as though mine is special because we have those that take advantage of people. We aren't. Just like in any other area, the consumer protects themselves with knowledge. Ms. Dailey was taken advantage of because she was naive. While this maybe harsh, that is the ultimate problem.

My parents once almost walked away from a loan I did for them, their son, because they weren't convinced that I was actually going to pay for all of their costs. I initially tried to convince them by simply saying that I was their son. I eventually convinced them by changing the paperwork and making it accurate since it wasn't initially. My parents were absolutely correct and the whole episode taught me a valuable lesson. My parents would never wind up in the position of Ms. Dailey because they are educated consumers. Ultimately in the case of Ms. Dailey and every other consumer knowledge is power.

I also point out that it was much easier to take advantage of Ms. Dailey because the important documents were buried in a stack of useless ones. There is a stack of useless documents because of the never ending government regulation that Congress and others insist on the mortgage business. Ironically, Mr. Herbert is in favor of more government regulation which would lead to more signed documents for Ms. Dailey.

What is disturbing to me about this article is that it gives nothing besides telling a story that is meant to tug at your heart string. We now have the do not call list. I mentioned the right to recission, and of course, the plethora of paperwork is what the Congress has always done to "protect the consumer against the predator". All Herbert does is say this,

In some cases, corporate con artists have deliberately targeted and seized the equity of financially strapped and unsophisticated owners. In some cases, homes have been stolen outright.

This is an issue crying out for a thorough federal investigation.

This is nothing but nonsense. The idea that banks would ever do a loan where the goal is foreclosure is one made up by those that have it in for banks. I think banks are an evil creature: drunk on power and unwilling to do anything anyway but their way. That doesn't mean they think that creating a loan that would ultimately lead to foreclosure is something that would ever be in their best interest. Herbert provides no specifics of such. In the case of Dailey, it was NOT a bank creating a loan that they wanted to end up in foreclosure. These loans along with many others were created in what I refer to as irrational exuberance. Banks got caught up in the wave of the hot real estate market and ended up creating loans that were far too lenient and allowed for unverified income that was way out of line. They did this because of stupidity and irrationality not malice. Yes, the mortgage broker certainly manipulated the loose system of the bank and the naive client, however, we the sociopathic mortgage brokers, were taking advantage of a system set up by forces around us.

What is important is that the market, THE MARKET, has put an end to this. You need not worry about the likes of Ms. Dailey ever being taken advantage of because there are no longer any such loans. If he wants to investigate, he can, but he doesn't say what he wants to investigate. He gives no solutions. All he does is give a story that is meant to do nothing else but portray him as a populist and attack the easy targets, banks and brokers. This is dangerous because policy is decided based on this narrative.

Maintaining The Secret

The Grady Task Force is a group that I will definitely give a great deal examination to in the near future, however in the meantime, I will cede to Ron Marshall again who is well versed in it himself.

Every time the public ask can we get a look at certain documents, or ask why we weren’t invited to the meetings. We are denied answers. Then the public ask why are you having secret meetings and why can’t we see these document from these meeting. Why are we denied? Some of our elected politicians are not asking. We have become a secret society that has levels of secrecy that only the secret privileged who are a secret themselves know the secret. There is an abusive attitude for power here. By training the workers to keep the secrets, intimidation and retaliation has made robots out these workers and the one’s that want to speak out or expose the secrets they are kept in check or worse.

Emory and Grady secrets have paralyzed open and transparency laws and it seems the thought of having a Sunshine Law is a fraud. Over the years I have been trying to get these and other records the show how the robbery of Grady has been commented. This has not been a Secret to the New Grady Coalition not a secret that Grady and Emory have been keeping the illusion they are clean. Emory and
Grady are not tainted by anything like threatening employees if they speak out
or retaliate against the ones that do. Have they lost their humanitarian equilibrium?

It is not a secret Emory and Grady have kept secrets on how money has been diverted to different owned entities to make them rich and keep the workers under the arm pits of threats that if they spoke out, we will get you. It is not a secret that Grady has over paid management and too many managers on staff, that unqualified workers working in areas where a certification is a must or has management that stole money through bonus payments. We don’t know if the pension funds have been threatened, that’s a secret.

And again the board selected an advisory board that consist of the foxes watching the hen house so the continue pattern of secrecy adds to our concern, is all government and public officials bought and paid for. We also know that Grady and Emory pay large sums to keep their secrets. Hire top lawyer firms to protect their secrets. We know that Emory hired a PR firm to cover up their secrets. It is not a
secret that Emory threatens and retaliates against students that attend its prestige school if they speak out against how Emory treats the student body. Emory is not in the helping poor people business. So we have to ask why all the secrets. Is money and power the ultimate secret?


The local press has said the people who want to know the secrets are just making
things difficult, they are called brow beaters by the press but we keep showing you the secrets. Is the media bought and paid for? I guest if you were a sheep herder you have to keep your sheep in place. One way is by allowing the secret meetings and payoffs to be conducted secretly. Go to this site http://www.maxexchange.com/ybj/chapter15.htm and start looking at the plan that is bigger than Grady and Emory but they use the same technique to accomplish the ultimate goal, get rich and let you die trying.

Ron Marshall
The New Grady
Coalition

Mr. Marshall mentions uses the metaphor the fox guarding the henhouse when describing the Grady Task Force. The best illustration of this metaphor is Robert Brown, and I wrote about him and his role in the task force here.

New York Times Perpetuates Dangerous Politically Correct Narrative on the Mortgage Crisis

The New York Times has contributed their two cents towards analyzing the mortgage crisis with this piece. It is exactly this sort of politically correct analysis that leads to the dangerous legislative agenda that Congress currently is wrestling with regarding my industry.

The NY Times lays out several fundamentals. First, the rightly predict that the housing crisis will get worse before it gets better. The rightly predict that things will get even worse when ARM's (which are already adjusting) adjust to higher levels hit borrowers even more. That is the end of any correct assertions that they make regarding the housing market.

They blame Bush for not acting. The problem is there is absolutely nothing the administration or any other politician can do. The current problem is that there is a plethora of people currently in over their heads. They have bought homes they can't afford. There is no political fix for that and furthermore any bailout will only delay the inevitable and pour good public money after bad private money.

They tout a bill by my Senator, Dick Durbin, that would allow rates to be rearranged as part of any bankruptcy. This bill is nothing short of dangerous. If borrowers are allowed to reset their rates artificially as a part of any bankruptcy, then that encourages someone to go into bankruptcy. It also leaves a lot of good borrowers screaming bloody murder.

Here is how the Times sees it.

The bill also undoes a longstanding injustice. Under current law, mortgages on primary homes are the only type of secured debt that is ineligible for bankruptcy protection. Owners of vacation homes, farms and commercial property can modify those debts in bankruptcy court. But not your everyday homeowner. Under any circumstances, that double standard should not be allowed. With a foreclosure debacle unfolding, it must be rectified.

Now, I didn't know that vacation homes and investment properties can be modified, however that is no less dangerous. If that is the case, the proper course of action is to close that loophole not open up a new one. By re arranging the mortgage so that the payment and subsequently the rate is lowered that encourages bankruptcies. Think about it. You have two borrowers. One borrower makes their payments on time and the other one falls behind. The second borrower files for bankruptcy and as part of that bankruptcy has their rate and payment lowered. Not only does that encourage bankruptcies, but frankly opens banks up to all sorts of suits. If you are a borrower that makes your payment on time, and you heard about borrowers having their rates lowered because they were late, what would you do?

This is what the New York Times is suggesting as a good idea. Again, the politically correct narrative has the borrowers as helpless victims that must be protected from future malfeasance. This is simply not true. The borrowers are for the most part irresponsible. The problem is that through irrational exuberance banks and Wall Street opened up a market so that irresponsible borrowers qualified for loans. We, the mortgage broker, gladly put many of these irresponsible borrowers into loans we shouldn't have. These people are no less responsible because of the dynamics I just described. That has long been corrected by the market, however those same people continue to hold onto mortgages that they can't afford.

No politician can fix this current dynamic no matter how much they claim they can. Providing extra protections for borrowers to take advantage of in case they default in the future only encourages more irresponsible borrowers to take on loans. Because no politician or politically correct news organization would ever dare put even a little responsibility on the shoulders of the borrowers, asinine proposals like the one that Durbin is touting are given credibility rather than ridicule.

In The News

Rumors are everywhere that it was the Romney campaign itself behind the anti Romney phone calls. While the blogosphere is abuzz the rumors come from one source, Mark Hemingway of the National Review.

News broke Thursday that voters in New Hampshire and Iowa had received phone calls from pollsters raising questions about aspects of Republican Mitt Romney’s Mormon faith. Who made the calls? Although the Romney campaign denies involvement, evidence points in its general direction.

I don't have much use for rumors and I know nothing about Hemingway so I won't say anything about their veracity. You can read all the links and decide for yourself. I will say that, if true, his campaign is through.

Michelle Malkin reports that Fran Townsend is resigning. Townsend is a top advisor at DHS and most political junkies will remember her from several Sunday Morning talk shows she has done over the years. I don't know much about her though Michelle asks,

If you’re saying to yourself “Fran who?,” don’t feel bad. And if you’re also saying to yourself, “She’s not the only one who should be resigning,” you’re not alone:

For all you libs that consider Michelle a Republican shill. She is a shill for legal immigration and takes out venom against anyone she sees that isn't aggressive enough in such areas.



In what can only be described as delicious political theater, Robert Novak is sticking by his story. What story is that? According to Novak, Clinton operatives are spreading rumors throughout Democratic circles and that

the Clinton campaign is spreading the word that it's holding back on dishing dirt on Barack Obama, and charged the Democratic frontrunner with playing "Nixon tricks."

This must be true and I believe it hook line and sinker, however that is only because Robert Novak is a graduate of my alma mater and spoke at my commencement ceremony. All right, that really isn't much of a reason, so stay tuned.

The New York Times, of all places, has word of continued drop in violence in Iraq. They make sure to mention that it hasn't been met with political reconciliation however anyone who has read these pages knows this is frankly old news. The admin may have boxed itsefl in regarding the scope and nature of the reconciliation, however the bottom line is that in Iraq the politicians are no less incompetent than they are here. Most of the reconciliation is happening on the grass roots level. We see Sunni and Shia Sheiks coming together to work on strategies to quell violence. The admin has made some token appearances as well with different sects.

The admin made certain things a model of reconciliation: an oil law, De Baathification, etc. Those things are likely NOT going to happen anytime soon, however to say that without them means failure in Iraq, is like saying the U.S. will fall apart without comprehensive immigration reform.



The situation in Pakistan remains dicey. Musharaff hand picked new supreme court judges after dismissing others, and then they took two hours to dismiss appeals to his victory in the last election. Musharaff is certainly acting like a dictator however in that part of the world the devil you know is much better than the devil you don't. With Iraq calming down, Pakistan may become the new focal point for the jihadis.

Passing Along an Action Alert From Numbers USA Vis a Vis the SAVE Act

Numbers USA sent me this email this morning.

Senators Mark Pryor (D-Ark.) and David Vitter (R-La.) have introduced Senate versions of Rep. Heath Shuler's (D-N.C.) SAVE Act (Secure America with Verification Enforcement [H.R. 4088]). Sen. Pryor's bill is S. 2368 and Sen. Vitter's bill is S. 2366.

The two bills are substantively the same -- essentially both bills are identical, so the best thing would be to encourage your Senator to sign onto both. If they want to make a choice based on something other that the substance of the bill, that is their call, but NumbersUSA has endorsed both.

Send this fax asking your Senators to cosponsor BOTH S. 2368 and S. 2366, important bills that would immediately begin to reduce illegal immigration.

My last post on the matter pointed out that the SAVE Act has started to gain a sort of rockstar status. I believe this believe has all the right intentions and it has a ton of potential, however the fawning which is being given to it scares me.

This bill has a huge potential flaw that no one but me it seems is willing to talk about. This will create yet another massive government bureaucracy and that is almost never good and I have heard nothing about this bureaucracy.

Thus, my advice is that everyone do what Numbers asks, but that you also ask about this new bureaucracy and see if the pols know how it will be implemented.

Who Is The Real Sociopath?? (UPDATE)

Introduction: For anyone who hasn't been following my work, let me give you a quick recap. A few weeks back I passed along a story about purported corruption at Grady Hospital with the potential of Emory University staff, who account for all of Grady's staff, being in the middle of it. After that story was published, I was contacted Kevin Kuritzky. He maintains that he blew the whistle on much of the corruption at Grady Hospital and beyond. He was expelled from Emory Medical School with forty one days left. He claims it was in retaliation and Emory claims it was due to tardiness and other offenses. He has a civil suit against Emory University currently in the appeals court. I should point out that Kevin has been at least a source for several stories and I have also done a radio show together with Kevin Kuritzky.

While I in no way hide whatever biases I have, I believe that in the case of what follows the latin phrase, Res Ipso Loquitor (the facts speak for themselves), applies.

A couple of weeks ago I received this UNSOLICITED email.

Mike, Just wanted to let you know that you shouldn't get taken in by Kevin Kuritzky. The guy is a pathological liar and I have personally been taken in by his stories only to realize that he was flat out lying. I also know numerous other people who have experienced the same. It is quite sad because he is a very charming, intelligent person. He just uses these skills to manipulate people. Don't get taken in by him.

Mike--

Michael Ward MD,

MBA

Resident Physician

Department of Emergency Medicine

University of Cincinnati

So, who is Michael Ward MD etc, etc...and what is he talking about? According to the chic professional networking site, Linked In, Michael Ward MD etc., etc... is in fact a member of the staff at the University of Cincinnati. It appears that his path crossed with that Kevin Kuritzky a few years back at medical school at Emory University. If what Dr. Ward says is true, it makes the basis of a lot of my reporting suspect to say the least. In fact, my first comprehensive piece on this subject was based largely on the testimony of Kevin Kuritzky. I say this so that my natural biases are clearly laid out as I continue with my analysis.

The reason that I reveal this email now about three weeks after I got it originally is because through the grapevine I am told that I am told the P.R. arm of Emory University has been making similar claims to Mike King of the AJC. (in that case I believe the word sociopath was used in describing Kuritzky) It is also consistent with the comments of the mysterious pseudonym John in response to this story.

I was in Kevin’s class at Emory (well at one point as it took him several years to complete one academic year), and the allegations by Emory concerning his behavior, ethics and morals are accurate. He should not be taking care of patients plain and simple.

Ironically enough, the term sociopath is one which most of my friends have told me I have a disturbing and obscene fascination with. (Given that two of my favorite shows, 24 and The Sopranos, each delved into the topic at roughly the same time, "I had no choice" (or I just couldn't help myself, potato...) but to get interested in it) Anyone who has read my work knows that I have had personal contact with my fair share of sociopaths and and I see several of the world leaders and our enemies as sociopaths as well. While this by no means makes me an expert, I will use my experience with the phenomenon to try and separate fact from perception in this situation.

One thing is clear. There is no doubt that one of these two side is certainly sociopathic, which in simplest terms is an individual devoid of empathy (in other words they are so selfish that nothing but their own self interest becomes relevant to them). Either Kevin Kuritzky has decided to lie pathological for his own self interest or his opponents want to paint him as such for theirs. Since, in this story, there is no middle ground we are absolutely dealing with sociopathology on one person's part.

If Kevin Kuritzky is himself a sociopath, then his compulsive lying would be a standard trait. There could be several reasons of self interest for his lying. He may have decided to get revenge at Emory for real or perceived wrongs. He may have thought that given the incendiary nature of his lies that they would bring him fame, or money, or both. There are in fact any number of self interest reasons for Kuritzky lying in this case.

On the other hand, if Emory University and their cohorts are sociopathic, they would look to smear Kevin because they know he is a threat. If in fact what he says is true, then their own sociopathic nature would have every reason to eliminate him. Remember, if Kevin is telling the truth, he is a hero. He is then trying to expose some of the worst corruption, leading to fraud, horrible patient care, and outrageous waste of tax payer money. Emory University along with several other people and group are the targets of his accusations. If he is telling the truth, then a sociopath would have every motivation to use every single means available to eliminate, marginalize and demean him.

Obviously, knowing the truth beyond all doubt is impossible, however in this case, it is my opinion that the truth beyond all reasonable doubt is pretty easy to decipher.

First, we know that Grady Hospital is now in such financial turmoil that it will likely need hundreds of millions to survive. We know that State Senator Charles Walker used Grady Hospital and other entities to commit an obscen amount of corruption. (He was charged with 137 felonies, convicted of 127, flipped on no one, and yet only got ten years in jail. Oh, and no one else, besides his daughter and the companies they ran were even charged) We know that in the mid and late 1990's Grady Hospital was the subject of an investigation and ultimately prosecution and settlement for Medicare fraud.

We know that in the mid and late 1990's Grady Hospital was the subject of an investigation and ultimately prosecution and settlement for Medicare fraud. We know that in the beginning of this millenia Grady was subject to an NIH investigation. While the investigation ultimately didn't lead to any arrests, fines or convictions, we do know that four Emory professors were ultimately paid off for their silence. We also know that 2004-2005 HHS conducted its own investigation. Here is the conclusion of that investigation.

there is an exteme and immediate threat to the health and safety of the patients

There is even evidence that in the case of one paid off professor, Dr. Jim Murtaugh, Emory and Grady paid him off without receiving permission from the board of trustees. Finally, even in the current civil case between Emory University and Kevin Kuritzy there is some questionable behavior on the part of Emory University. Court records show that Emory University couldn't produce hundreds if not thousands of documents in the case. In many instances, Emory even admitted to destroying certain documents.

The problem for Emory University, in my mind, is these are all clear characteristics of sociopathic behavior. Sociopaths remove every threat in the way of their goal. Between paying people off, expelling others, destroying documents, I believe they have exhibited that behavior in their goal of running a corrupt hospital. Given all of this evidence it makes Kuritzky's claims well within the pattern of evidence that anyone can discover by simply mastering the art of google.com. The only evidence that Kuritzky is a sociopath come in the accusations of Emory and their cohorts.

Even in the case of the email of Michael Ward, MD, etc, etc, there are no specific accusations. In our exchange by email upon receiving it, I invited Ward to give me specifics and I even emailed him my cell phone number. He never responded with any examples. In the case of the mysterious John it is also vague and unspecific allegations. Emory many times points to Kuritzky being expelled as evidence. Keep in mind it was Emory that expelled him. If they are the sociopaths, his expulsion would fit the behavior pattern of a sociopath to a tee.

In order for Kuritzky to be a sociopath, the pattern of behavior that Grady and Emory exhibited (keep in mind while the two entities are separate Grady is almost entirely staffed by Emory personnel and in many cases Grady higher ups move onto positions with Emory a la William Casarella) was either an anomaly or either a condition that was fixed in a few short years between the events I described and the time period of Kuritzky's accusations. Even that would be hard to believe because the HHS report coincided with the time period of Kuritzky's investigations. If you were to believe that, you would then have a very hard time explaining the current financial crisis at Grady Hospital.

Thus, in conclusion, those that I am accusing can say I have a bias, however I believe I have laid out a solid case for who is the sociopath here. While I must admit that I enjoy an obscene and disturbing amount of fun in delving into the condition of sociopathology, this question is central to what is going on. If Kuritky is the sociopath, then we need not worry about infusing Grady with more money because their administration is fit to receive it. If, on the other hand, it is Emory, Grady and beyond, that are the real sociopaths, then it is time for full fair and open hearings before even one cent is dolled out to what would be the very people that caused the mess.

If my supposition is right, then the likes of Kent Alexander, William Casarella, Ed Renford, Robert Brown, Vernon Jones, (and maybe even State Senator Charles Walker if that can be arranged) as well as those that would be the heroes in this mess: Kevin Kuritzky, Ron Marshall, Dale Cardwell, Joyce Harris and even all those that were paid off, need to be put under oath, on television, to answer truthfully their involvement in this crisis.

Finally, I invite the powers that be at Emory, Mike King, Dr. Ward, and even the mysterious John to respond at their leisure if they feel I have been inaccurate.

UPDATE:

If you are picking up the story of the Grady Hospital crisis anywhere in the middle, you are likely to get quite confused. This maybe happening if this particular story is your first exposure to the crisis. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

More Malfeasance vis a vis Wellcare (Update)

The hat tip goes to Pharma Fraud blog for bringing this to my attention. My initial interest in the story centered around Dr. Andrew Agwunobi, former CEO of Grady Hospital. Now, Dr. Agwunobi appears to me at least to have some explaining to do vis a vis Wellcare. He arrived there in early 2006 to serve on the board. He only stayed about six months. He cashed out for about a million bucks worth of options. He then took over at the AHCA of Florida, and suddenly the AHCA is one of the bureaus involved in investigating his former employer Wellcare. That doesn't pass the sniff test.

The scoop from Pharma fraud also leaves a malodorous odor. Sandy Murman (pictured right) was a Florida State Representative for Hillsborough until March 2005. Then, she became a lobbyist for Wellcare and subsequently politicked her way onto the newly formed county Health Care Plan Study Group. According to Pharmafraud, that wasn't revealed while she politicked to get on the board.

Wellcare had plenty of incentive to have one of their own on this board. Here is what their CEO said in February 2005. (Imtiaz "MT" Sattaur would be the CEO)

We (WellCare) are interested in pursuing bidding for Hillsborough County's indigent care program.

Once it came to light that Murman had ties to Wellcare, there became a political battle over her role in the group. She was ultimately removed in June of 2005. (Here are notes from the meeting)

Now, it appears that Murman has made totally contradictory statements regarding Wellcare in two separate interviews. (Here is a link to the first one)

Sandy: “But I would say when you have 200 agents go into an office they have a finding of something… that probably there’s something wrong. And our state needs to be really concerned about that.”

PF: Considering Sandy’s strong alliance to WellCare, her comments seem especially potent.

(Here is a link to the second one)

Sandy: “I was shocked, absolutely shocked, because obviously WellCare is one of the top 5 companies in the nation.”

PF: In which category might one include WellCare among the top 5?

Sandy: “You’ve got a company that has grown really big really fast, and it always leads to a suspicious cloud. How did they get… you know, how did they grow that fast.”

PF: The most favorable statement about WellCare came from reporter Don Germaise, who attributed the following quote to Murman, “Sandy Murman says that
WellCare Is a very ethical company and its CEO would never knowingly break the law.”

Lot's of questions. Stay tuned...

I started following the goings on at WellCare as a result of my initial interest in the mess at Grady Hospital. I firmly believe that this WellCare scandal is thoroughly underreported and I will do my part to get this story out, however my main priority is breaking the scandal at Grady Hospital. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. See, how this relates to that crisis.

SAVE Act: The New Rockstar Bill

If you ever wanted to compare a bill to a rock star, then the SAVE Act would be the rock star. Most bills are much to mundane and wordy to ever warrant such a comparison, however this one may be different. While I support the idea of this bill, and much of its content, I am concerned that the rock star status of the bill may lead to trouble.

First, let's get everyone a brief background on the SAVE Act. It does several things to beef border security however the center piece of the act is a new verification system, that if it works properly, will insure that every employer can easily verify if their employees are here legally. (Go here for more reference) This bill is being introduced by former quarterback now Congressman Heath Shuler of North Carolina. It has an impressive array of supporters. Everyone from Tom Tancredo, to the National Federation of Independent Business, to the International Brotherhood of Electrical Workers support this bill.

Congressmen from every stripe are lining up to support this bill. Everyone from members of the Congressional Black Caucus like Congressmen Davis (D-Alabama) and Bishop (D-Georgia), to members of the Congressional Hispanic Caucus like Congressman Rodriguez (D-Texas), to strange bedfellows like Congressmen Rohrbacher and Murtha.

Numbers USA speaks about this bill the way most dorky high schoolers describe the head cheerleader.

NumbersUSA believes that this legislation originating on the Democratic side of the House is just the vehicle to give us a chance to actually pass immigration legislation through a Democratic-controlled Congress that would significantly improve the lives of most Americans. "It's the one [immigration] bill that will pass this Congress," said Congressional Immigration Reform Caucus Chairman Brian Bilbray (R-Calif.) in an interview with The Hill. "We have to make this about illegal employment and crack down on employers."

My own blog has lit up with readers of previous blog entries. It seems everyone is fawning over this bill as though it is infallable. The problem is that it is fallable. There is a huge potential problem that all the fawning supporters overlook and disregard. This bill would create a huge new bureaucracy. Most massive bureaucracies aren't merely a headache but frankly counter productive. Most people that I mention this to write it off and say it is just something we will need to deal with for border security.

Well, with all due respect to the fawning supporters of SAVE Act, it won't necessarily be a minor inconvenience. It may just be a disaster waiting to happen. This new bureaucracy sounds good on paper but there are no guarantees that it will do what it is supposed to do. INS and subsequent metamorpheses in the DHS have shown time and again that they fail to do what they are supposed to do. How many times do we hear stories of the Feds losing track of illegals.

This system can very well be headed for the same type of disaster if everyone that fawns over it refuses to address what I see as a huge potential problem. While politicians of both stripes push others out of the way to be the first in line to support this bill, I hope they also understand that just because a bill has good intentions doesn't mean it will actually be implemented effectively.

I have heard absolutely nothing from anyone about how this massive new bureaucracy is going to function. The only thing I hear is that we will finally have a system that tracks the legal status of employees. With all due respect to everyone, I thought that social security numbers were designed to do that. If those have proven ineffective, there are no guarantees that this will either. I am not saying this system will fail. In fact, I hope it won't. What I am saying is that everyone needs to stop fawning over this thing like a beauty queen and actually examine it in a sober manner. No bill is ever perfect and the worst are often those that everyone thinks at the time is great.

This bill has potential to do great things against the cancer of illegal immigration, however it also has the potential of creating yet another massive non functioning bureaucracy. Just because we want it to do the first doesn't mean it won't actually do the second.

A Plea to John Sugg of Creative Loafing (UPDATED)

(For reference on this story simply hit the Emory University tag at the bottom and you can read everything that I have written so far)



Here is what I have learned so far about the corruption at Emory University, Grady Hospital, and the Atlanta area in large: a man of questionable character and/or competence is currently running the Florida bureau that specializes in providing health care to poor folks, a man of questionable character and/or competence is now running for Senator of the United States in Georgia (and leading in the Dem primary from what a few people tell me), Grady Hospital was home to an obscene amount of corruption that was only matched by the disposition of the case that followed, and and finally there is eye witness testimony to not only continued corruption at Grady, but tragically sub standard care and dangerous conditions.



As far as my own feelings, I feel that I have only scratched the surface on the curruption that goes on at Grady, Emory and beyond. How can so much corruption go on and no one know it? I firmly believe that much of the media is either in the tank for much of this, too scared, or maybe just too incompetent to report on it. Case in point: State Senator Charles Walker...he was convicted on 127 felonies, he received 10 years in jail without flipping on anyone, and finally no one but him, his daughter and the companies they ran were charged or convicted. Does this seem possible? Yet, very little has been said about this peculiar set of events in the media in Atlanta.



Here is another case in point. Here is a response by Kent Alexander and Tim Jefferson to an editorial by the AJC.

The AJC's Oct. 5 editorial "Come clean on lawsuit" resurrects (and misstates) old charges of conspiring to misuse government funds, charges the government reviewed seven years ago and declined to pursue. This has the devastating effect of casting public suspicion on two entities -- Grady Memorial Hospital and Emory University -- that are working together in an increasingly challenging environment to meet the health needs of the most vulnerable members of our society.

The editorial surprisingly calls on Emory and Grady to open the sealed settlement and court records in a case involving Dr. James Murtagh. For the record, Emory and Grady did not move to seal the record; Murtagh did. Emory had already supported unsealing the proceedings -- the complete, entire record -- as had Grady. We simply awaited the doctor and court's approval. Judge Wendy Shoob has since unsealed the record, which is now of course fully open to the public. The real victim in all of this is Grady, the largest public health hospital in the Southeast. Grady is struggling to survive while misinformation circulates that, unintentionally or intentionally, diverts attention from the real issues.

Now, what they are referring to is Jim Murtaugh and a suit in which Grady and Emory paid Murtaugh about 1.6 million dollars and he along with Emory and Grady each had air tight language in which no one could talk to anyone. Now, when someone gets paid off and told to keep quiet, where I come from that is hush money. According to Jefferson and Alexander it was Murtaugh, not their side, that wanted to records from the case sealed. Obviously, it is ludicrous to believe that the person being hushed is the one pushing to keep the records sealed. Furthermore, since they know that he has to stay quiet he is an easy target. Finally, since the agreement calls for both sides to keep mum, it is this non lawyer's opinion that this response breaks the very agreement that they are referring to. There's more.



Now, do you want to know how corrupt the media is? That editorial as well as the response is no longer available on the AJC's site. (Don't believe me click the link and then click the link that says, Come Clean on the lawsuit, you will get to an empty page) In fact, the response I found is on a site run by Emory and no doubt that will be eliminated as soon as Emory gets wind of this piece. (I referenced the editorial at least twice and the link leads you nowhere each time. It also leads you nowhere from the Emory site I found that currently though I suspect not for long still has their response to the now absent editorial.)



I was told that there maybe a beacon of independent journalism in Atlanta. There maybe one news organization that is more interested in the truth than making friends and contacts and limiting powerful enemies. I was told that news organization was Creative Loafing. I was even heartened when they wrote a piece that referenced my blog. Unfortunately, since then they have remained quiet despite breaking news by me, State Senator David Shafer, and frankly the growing chorus of concern about Grady Hospital (which may go under and will certainly need up to nine digits in tax payer money to stay open).



Thus, I was moved to write this to the editor, John Sugg,

Mr. Sugg,

My name is Michael Volpe and I am writing to you regarding coverage of the corruption at Grady Hospital. A few weeks back your online arm wrote an article about Kevin Kuritzky. That article referenced a piece on my blog, http://www.proprietornation.blogspot.com/. I received a fairly large amount of traffic coming over from your site. I was glad to see that there was an outlet in Atlanta that had the courage to bring this story in the open. Since then, I have broken several pieces of important information on my own blog. Senator David Shafer broke some important information as well, and your paper has not followed up at all.

With all due respect, it is NOT good enough to simply go through the motions on this story but to take it wherever it leads because its tentacles are everywhere. Did you know that the former CEO of Grady Hospital, Dr. Andrew Agwunobi, the same CEO that was employed when an HHS report was issued saying this, “the patients at Grady are in serious and immediate danger”, is now head of the AHCA in Florida? Did you know that prior to that he was on the board at WellCare? Did you know he cashed out one million bucks worth of options after only six months? Finally, did you know that his bureau, the AHCA, is among several currently investigating WellCare? Guess what, the stock plummeted right after he cashed out.

If you publish one story about the terrible plight of Kevin Kuritzky, pat yourself on the back for standing for the little guy and then move on, that is frankly not good enough.

I hope you will take a minute and read my latest piece. I hope after reading it you
appreciate just how deep the corruption most likely goes and then realize that the only way to break it all, is for non stop and intense media coverage.

http://proprietornation.blogspot.com/2007/11/murder-suicide-connecting-more-dots-in.html

I firmly believe that those involved in the corruption at Grady and beyond it are bad, really bad, and they aren’t going to give up power without the biggest battle they can put on. Putting out one article and then going away does nearly nothing. Kevin told me that he believed your organization to be a model of independent and uncorrupted journalism in Atlanta. I believe that is rare if non existent in your city. You can prove me wrong by following this story wherever it leads not merely popping your head up to report a small bit and going away.

Now, I call on everyone else to help me fight this battle to expose what is really going on. Everyone that reads please send Mr. Sugg an email here and insist that Creative Loafing be the model of independent, fair and honest journalism in Atlanta. Demand that Creative Loafing take this story wherever it goes not just where they want to lead it. A lot of people have sacrificed a lot, some with their lives, in trying to expose and root out the corruption that is going on. The powers that be won't go down without a fight and they won't go down if they know the media is in their back pocket. So far, the evidence I have seen tells me at least that the media is, however Creative Loafing can change that and you can help them do it.

(UPDATE)

I realize that anyone that picks up this story at any of its individual part like this particular piece will likely be confused. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

H.R.3915: THE DEMOCRATS THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET: The Political Reality if Republicans Choose to Take It

The full House voted on H.R. 3915 yesterday and the vote was almost entirely party line. Here are the final tallies.

Latest HR 3915 Vote in the House of Representatives
FINAL VOTE RESULTS FOR ROLL CALL 1109
(Democrats in roman; Republicans in italic; Independents underlined) H RES 825 YEA-AND-NAY 15-Nov-2007 11:36 AM QUESTION: On Ordering the Previous Question BILL TITLE: Providing for consideration of H.R. 3915, Mortgage Reform and Anti-Predatory Lending Act
Yeas Nays NV
Demsocratic
224 6
Republican

193 2 7




TOTALS
224 195 13

My initial interest in this bill was entirely self interest. The bill threatened to remove Yield Spread Premium, a tool that I use not only to make money but to provide better loans for my borrowers. There continues to be all sorts of confusion as to whether or not YSP has been eliminated. The members of my Representative's office (Rahm Emanuel) weren't sure themselves. His financial services specialist first sent me here ( this link was useless to me since I had already referenced it myself.) He then sent me here ( a document that is about one hundred and thirty confusing pages. You can take my word for it or open up the link and see for yourself). It was clear that my Representative and his office didn't have much more information about this bill than I already did on my own. I registered my extreme opposition to this bill to which his guy reminded me that Emanuel is NOT on the banking committee. It was typical politico. Whenever there is a bill they are proud of, the Democrats passed it. In this case facing an irate constituent, Emanuel is suddenly not on the committee. Those excuses are no longer acceptable since Emanuel voted for the bill.

What I have figured out is that YSP is NOT the best tool for political hay in this bill. YSP can be removed and added easily. There is another much more serious much more systemic problem with this bill and that can be used to make political hay. The bill is called The Mortgage Reform and Anti-Predatory Lending Act of 2007. Here is the first and main problem (from a Winston Salem newspaper regarding the North Carolina anti predatory lending law upon which this is modeled)

There is no specific definition about what exactly predatory lending entails, though most observers believe that the description applies when lenders take advantage of borrowers by charging high interest rates and consider only the value of a borrower’s assets, as opposed to what the borrower can afford to pay.

That's right, the Democrats (which we can now say since the vote was essentially party line) are attacking a problem they can't define. That should scare everyone. In my business if you can't define it, what that means is you, the borrower and consumer of loans, HAVEN'T SIGNED ENOUGH PAPERWORK YET. In practical terms, when someone is vague and cannot define an issue, it means they are actually quite ignorant to it.

What the Democrats are equivalent to is someone going into a lab and mixing chemicals even though we have no science background. We wouldn't accept that, but yet we sit by while totally clueless individuals mix perverbial chemicals with the loan process.

Let me lay out every instance within this law where I believe the practical effect will be YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

steering any consumer to a loan that the consumer lacks a reasonable ability to repay, does not provide net tangible benefit, or has predatory characteristics

There are at least three new disclosures just in this sentence. I know there will be a net tangible benefits disclosure because the Illinois Legislature has already created that for ALL loans in Illinois. There will no doubt be a reasonable ability to pay disclosure, and probably an anti predatory lending disclosure. In other words, without looking at any other part of this bill, THE DEMOCRATS THINK YOU DON'T SIGN ENOUGH PAPERWORK YET.

Safe Harbor: A presumption can be made that the minimum standards (reasonable ability to repay and net tangible benefit) are met for “qualified mortgages” and “qualified safe harbor mortgages.” Qualified mortgages (prime loans) are presumed to meet the minimum standards and this presumption may not be rebutted. For qualified safe harbor loans, the presumption may be rebutted only against creditors.

The term safe harbor is very important in this bill because "safe harbor" loans are excluded from much of the legislation. Since it becomes vital that a loan be a "safe harbor" loan, you can bet that banks will create however many disclosures they feel necessary in order to insure that each loan meets the vague definition that the law lays out. Since the law itself is vague and undefined, the banks can respond with whatever paperwork they deem necessary to make sure becomes defined as "safe harbor" in the closing documents. In other words, if we went no further, THE DEMOCRATS THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

steering any consumer from a prime loan to a subprime loan,

This sounds reasonable however "prime loans" can mean a lot. For instance, Fannie Mae is prime. Fannie Mae has several different categories. For instance, Fannie Mae has Expanded Approval levels, 1, 2, and 3. If someone is only approved for EA 3, their rate can easily reach 9% and beyond and if the loan to value is over 80%, there will be a large PMI payment as well. So, what if someone is only approved for EA 3, and I steer them toward sub prime (which very likely would have a better deal in such a scenario). Could I be sued? That question is very undefined. The most likely reality is that no one that voted for this bill even knows that there is such a thing as Expanded levels on Fannie Mae loans. I bet most of the legislators think Fannie Mae is candy. What is the practical effect of such vague and undefined situations, that's right, YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

You think I am at the end. Oh no, I am just getting started.

Assignee/Securitizer Liability (does not extend to trusts and investors): Subject to exemptions below, for loans that violate the minimum standards (reasonable ability to repay and net tangible benefits), a consumer has an individual cause of action against assignees and securitizers for rescission of the loan and the consumer’s costs for rescission.

Exemption from Liability: An assignee/securitizer will not be liable for a loan that violates the minimum standards if the assignee/securitizer provides a cure to make the loan conform to the minimum standards within 90 days of receiving notice from the consumer, OR (1) has a policy against buying mortgage loans that are not qualified mortgages or qualified safe harbor mortgages and exercises reasonable due diligence to adhere to such policy AND (2) has obtained representations and warranties from the seller or assignor of the loan regarding not selling or assigning loans that violate the minimum standards.

This wordy and most likely extemely confusing portion of the bill, first, actually allows that a foreclosed borrower can sue the securitizer (Wall Street or those that turn mortgages into mortgage backed securities). This is of course unprecedented and would open up a pandora's box that none of the legislators could possibly manage and control, however the second portion of this piece of the law lays exception to the suits. Since those exceptions are also vague and undefined (for instance it says as long as Wall Street did its "due diligence"...keep in mind mortgage backed securities have markets in the billions so we can assume that no law is necessary for there to be "due diligence") and the stakes are so high, we can expect that with this portion of the bill, THE DEMOCRATS REALLY, REALLY, THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

When the holder of a mortgage loan or anyone acting on behalf of the holder initiates a judicial or non-judicial foreclosure, (1) the consumer who has a rescission right under this bill may assert such right as a defense to foreclosure against the holder to forestall foreclosure, or (2) if the rescission right has expired, the consumer may seek actual damages (plus costs) against the creditor, assignee, or securitizer.

This portion of the bill could ACTUALLY be construed as motivating the borrower to get foreclosed because instead of punishing the borrower for not carrying out their end of the bargain (since a mortgage is a contract and a borrower agrees to make payments on time) the bill mostly lays out steps which the borrower can take action against their creditor. Since it goes without saying banks would never allow themselves to be sued by those they foreclose on, the practical effect of this portion of the bill is YOU REALLY, REALLY, REALLY, HAVEN'T SIGNED ENOUGH PAPERWORK YET.

Finally, there is this,

requiring pre-loan counseling.

We tried pre loan counseling here in Illinois. What it did was forced mostly poor folks to spend $300 extra dollars in closing costs (it was of course mandated that the broker pay but those costs are invariably then passed onto the consumer) to meet with a state sponsored counselor so some stranger can tell them if their loan is good for them. The practical effect was a significant drop in real estate sales, more bureacracy, and of course a handful of new disclosures specifically to address that portion.

Here is the bottom line. If I debated anyone, on either side of the aisle, about this bill they would be so embarrassed I could probably force them to resign. Most of the legislators are clueless about any part of my business. It is easy to pass legislation that only creates more paperwork if you never have to deal with any of it. By the time a loan is closed, it looks much like an edition of an encyclopedia. Those loans must be kept in storage since regulators can inspect any of them anytime. That means that a successful mortgage company has an overwhelming amount of paperwork to deal with. Again, it is easy for the legislators to constantly legislate more paperwork since they have no responsibility in managing it. I have no such luxury, and you the consumers don't either.

The only conclusion I can make is that clueless legislators from one party (the Democrats) have designed a bill that tackles a problem they don't understand or define. The only practical effect of this bill is YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET. Imagine any Republican running with that slogan. H.R. 3915 can become the symbol of the Democrat's entire domestic economic agenda if the Republicans want it to. Leaders like Barney Frank led in crafting it. Chris Dodd is leading the charge on the Senate side. The Republicans can add H.R. 3915 to their list of Democratic legislative failures. All they need to do is make a few commercials with this on the screen

THE DEMOCRATS THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

This bill is the perfect test case to see just exactly how powerful the internet really is. While this bill may not be known by much of the mainstream, it is the equivalent of a rockstar on the internet. The blogosphere is abuzz with it and my own site's traffic has exploded with with people reading my work regarding it. The beauty is that on the internet, there is bipartisan opposition all over the internet. Whenever the crazies at Daily Kos find themselves on the same side of an issue as libertarians, small government conservatives, and of course mortgage professionals, you know you have a juicy opportunity. What needs to happen is for all the sides to get connected and to attack Congress at once.

The narrative is there for us to take. THE DEMOCRATS THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET. The parties must meet and spread the message together. On the other hand, this bill has a populist message and good targets, however our side has the truth. The way for my vision to be realized is for all of the internet to relentlessly beat the message I am talking about,

THE DEMOCRATS THINK YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET

This may sound self serving and egotistically but what if everyone knew about my article? What would they think of H.R. 3915 and the party that sponsored it? If I am wrong, please challenge me. The way for this to work is for everyone opposed to this bill to spread the message throughout the internet until the internet does what it is supposed to do, create a network. Once that happens this message goes from niche to mainstream and everyone behind this bill will have to answer why

THEY DON'T THINK YOU SIGN ENOUGH PAPERWORK YET

I can't say it enough.

Momentum Builds for SAVE Act

According to Numbers USA, both business and labor leaders have endorsed this bill.

The National Federation of Independent Business (NFIB), representing more than 600,000 small businesses in every state endorsed SAVE's requirement that every employer run every new hire (and eventually old hires) through the electronic E-Verify system to ensure that illegal aliens don't get American jobs. It said the bill strikes a “fair balance between increased enforcement and limiting regulatory burdens placed on small business.”

The 752,000-member International Brotherhood of Electrical Workers -- as a way to protect American jobs for American workers -- endorsed the Secure America through Verification and Enforcement Act (SAVE Act).

In politics you never say never, however it is fair to say that the SAVE Act has some great momentum. It certainly has all the political elements in place to become law. Here is how Heath Shuler, the man that introduced the bill, put it.

The SAVE Act is commonsense legislation that is bringing people together to address this difficult issue," Shuler said. "I was proud to work with the NFIB and IBEW while drafting this legislation because of their strong representation of American businesses and American workers. I deeply appreciate their continued support for this bill as we work to pass the SAVE Act into law.”

Numbers says that some bloggers have expressed doubts that it isn't tough enough. I have not heard and my doubts are different and so far they haven't been heard. SAVE Act will most likely create a massive new government bureaucracy. This bill has all the right intentions and lots of people behind it and for that matter I am afraid that many are overlooking its potential problem. I firmly believe that with proper attention and debate the Congress can work it out so that this bureaucracy doesn't become counter productive. That won't happen unless people recognize the potential problem.

Too often we fawn over good work. I believe that some of that is happening here. I firmly believe that Congressman Shuler has created a bill that can have tangible positive effects on stemming the flow of illegal immigration. That doesn't mean that there aren't potential flaws. If we don't address the right way to deal with the massive new bureaucracy that will be put in place, it will wind up working about as well as much of the rest of INS and other such bureaus.

I support the concept behind this bill and I believe that it needs a full and fair hearing, however I am troubled by the way in which a bi partisan group of legislators and special interests are falling over each other without offering any constructive criticism to make it better. We don't need another massive non functioning bureaucracy, and that is what we will have if the powers that be don't recognize that potential flaw and address it. It won't be addressed if every group under the sun is fawning over this bill like a rock star.

A Murder, A Suicide: Connecting More Dots in the Culture of Corruption (UPDATE)

Sheriff Elect Derwin Brown

The 2000 election for Sheriff of Dekalb County was bitter and difficult. It pitted incumbent Sheriff Sidney Dorsey against policeman Derwin Brown. Brown ran on a platform of cleaning up the corruption in the Sheriff's department. Many times the fingers of corruption were pointed directly at Dorsey himself. Dekalb County Sheriff's Department had a long history of corruption and Dorsey himself was no stranger to criminality.

Dorsey became the county's first black sheriff four years ago despite publicity about his arrests for domestic abuse and a manslaughter charge he once faced.

Reports also surfaced that Dorsey assigned inmates to work on houses of supporters of his wife, an Atlanta city councilwoman.

Other reports accused him of allowing deputies to work for his security company while on the clock. And a female deputy filed a lawsuit saying that she was denied a promotion because she ended an affair with Dorsey.

Brown's campaign message resonated and the voters voted him in overwhelmingly with him winning roughly two to one. Brown would never get a chance to fulfill any of his campaign promises. On December 15th, two days before he was to be sworn in, he was gunned down in his drive way.

Within months several people within the Sheriff's department or at least with strong ties to it were arrested. Those people included Paul Skyers, Devon Edwards, Patrick Cuffy (ultimately fingered as the shooter) and Melvin Walker. The man that authorities finally believed to be the ringleader and ultimately the person that gave the order was none other than the Sheriff at the time of the murder at least Sidney Dorsey.

Everyone eventually flipped on Dorsey and spent minimal or no time in jail. Most of their whereabouts are currently unknown, and Dorsey was ultimately convicted about five years later. He serves a sentence of 25 years.

Like with much of the corruption around it, this case leaves many more questions than answers. If a sheriff and several of his deputies and their contacts killed the incoming sheriff, then to me at least, that is the culture of corruption at its worst. Why then did the next Sheriff Thomas Brown (no relation) not clean house as Derwin Brown promised. (Thomas Brown, who was the former public safety officer of Dekalb County, was then selected by then Governor Roy Barnes to be the interim Sheriff)

Fellow candidates for sheriff and confidantes of Derwin Brown blasted the sheriff when he declined to fire all of those targeted for termination by the murdered sheriff-elect, or to hire those previously promised jobs. Although he has dismissed some personnel, Sheriff Brown has been criticized, both before and after the special election, for not fully embracing those changes.

When he came aboard, said Brown, the department was uneasy; he thinks his decisions have helped calm things.

"There may have been some concerns when I came in," said Brown. "I made very few staff changes. There were a few personnel changes -- we did let some people go -- but the heart and soul of the people who built this facility are still here."

It is this diarists opinion that whatever doubts anyone had that the Dekalb County Sheriff's Department had a systemic culture of corruption were tragically erased when its Sheriff elect was gunned down in a conspiracy involving several members of the department itself, including the top person. If ever there was a reason for wholesale house cleaning it was this tragic event. Yet, that didn't happen.

There was other things that raised my eyebrows. There were rumors of a hitlist. In fact, the prosecutor on the case J. Tom Morgan wore a bullet proof vest for safety. I was told that reporter (and current candidate for U.S. Senate) Dale Cardwell had a member of the sheriff's department sleeping in his house for a month because they felt he was a target. The motive for the shooting was said to be revenge. If there was a hitlist and other targets that wouldn't make sense. Was Dorsey really the ringleader or was this murder really the work of someone and something much bigger? Only the powers that be know that answer.

There was some media that wondered if Dorsey really was the ringleader. His family doesn't believe that all the perpetraters have been caught. To this day, his death and the events surrounding it continue to have more questions than answers. Much like most of the corruption in and around Dekalb County, whether its Grady Hospital, Emory University, or the Sheriff's Department, it always seems as though investigations only go so far before somehow, some way they end.

On August 26th, 2004, Charles Hicks, Dekalb County Attorney was found dead. The death of Charles Hicks was eventually ruled a suicide however I believe that this was another case in which there are more questions than answers. Ron Marshall, head of the Grady Coalition, was an acquaintance of Hicks. He told me that on many occasions he told him that he (Hicks) was concerned about all of the corruption that he was procuring. The first officer on the scene was one Donald Frank, a wily character that Marshall says he would run into again (and one I will get back to in a minute). The most damning piece of evidence was that the gun was found laying next to Hicks' right hand. This seems peculiar since Hicks was in fact left handed.

If Hicks was in the middle of a culture of corruption, and he wanted to get out, it would stand to reason that the powers that be would want him eliminated. It also stands to reason that the powers to be would have enough power to then cover up this same murder and turn it into a suicide. Of course, that is all mere speculation. Let's not speculate but rather look for patterns.

The Sheriff's Department had a culture of corruption that went back decades. Several of its sheriffs wound up on the wrong end of the jail cell.

Former Sheriff Pat Jarvis last year was sentenced to 15 months in prison and fined $40,000 for fraud. Ray Bonner, a sheriff in the mid-1970s, pleaded self-defense and was acquitted in the fatal shooting of a 16-year-old boy in his front yard. And Lamar Martin, the sheriff in the late 1960s and early '70s, was convicted of bribery.

Of course after that, the next sheriff in line went in for murder.

While this was going on at the Sheriff's Department State Senator Charles Walker was fleecing Grady Hospital for millions of dollars. The State Senator committed so much crime that by the time he was done he was charged with 137 felonies and ultimately convicted on all but ten. Of course, he flipped on NO ONE. No one else was charged and he got ten years, or less than a month for each felony conviction. Then, we have the mysterious death Charles Hicks.

Who is running Dekalb County? That would be Vernon Jones. Jones is no stranger to trouble. His name has wound up on the police blotter roughly six times. It started in the mid eighties and the last known incident was this past December. The charges range from assault to rape. He's never been convicted of any of these crimes mind you. He's had more than a few questionable land deals including a prime piece of property (that he apparently bought for 500k in cash. Not bad for someone that makes a 100k per year) right next to a mall that he authorized the building of.

In fact, I only need to go to the same article where my research on Hicks began to find all sorts of malfeasance by Jones.

Jones' re-election campaign took its first hit, as one of his opponents, state Rep. Teresa Greene-Johnson, tried unsuccessfully to get a court protection order against him. Greene-Johnson alleged that Jones berated and threatened her on a campaign stop.


...

Within days of each other, Jones lost two political allies. Commissioner Lou Walker died from injuries sustained in a car accident and Jones' deputy chief of staff, Lance Robertson, was arrested and charged with the false imprisonment of a 19-year-old woman after a night of drinking at the W Hotel in Dunwoody.

It was revealed that Robertson had a criminal past, including a shoplifting conviction, that county officials did not investigate before Jones hired him. Robertson, who has been suspended without pay, denies any wrongdoing in the W Hotel incident.

Also in August, a federal lawsuit accused Jones and other county officials of discriminating against white employees. County officials denied the allegations.

That article merely describes a few months in 2004.

By 2006, Ron Marshall was challenging Jones for Dekalb County CEO. Jones introduced Marshall to hardball politics, Dekalb County style. Marshall told me that he was constantly followed throughout the campaign. There was background checks done on him, and he and his wife mysteriously wound up on the Homeland Security Terror Watch List. Only the powers that be know how that happened, however the director of Homeland Security for Dekalb County by this point just happened to be Donald Franks (yes the exact same one that also happened to be the first police officer on the scene of the Hicks death).

There is a Latin phrase, Res Ipsa Loquitor, and it means the facts speak for themselves. There is no question that Vernon Jones is part of the problem. Between the murder of a Sheriff elect, the fleecing of Grady Hospital, the harrassment of a candidate, and many other scandals in between, Res Ipsa Loquitor. Nothing has changed within the Sheriff's Department that occupies the County he is CEO of. Grady is now in desperate need of an infusion of cash or they will cease to exist, so nothing has changed there either. The facts speak for themselves: either he was in on it, he was too incompetent or too scared to stop it, he was asleep at the wheel, or something else. It ultimately matters not because there is no excuse for that much corruption to go on on his watch, Res Ipsa Loquitor.

So, what is Vernon Jones up to now? He's running for U.S. Senate. No, I am not kidding. If this sounds familiar just read this.

I believe that in order to create a culture of corruption, you need the police the politicians, and the media to be in on it or at least looking the other way. I think you can all see how the police are in on it. I think through this piece and in my entire series you can see how the politicians are in on it. How is the media in on it? Well, ask yourself this question. Why is a blogger from the Midwest asking questions the media in Atlanta should be asking? I will leave you with the words of a hero, Derwin Brown.

There have always been a few who have stood up for the many, often at times when the many would not stand for themselves. Whether out of fear, intimidation, or ignorance there have always been those who ride the victories and sacrifices of others, cheering and celebrating as if they dared to make a difference. Yes, even some who would minister to you about God's power and the armor and shield that "the word" provides seem to falter in their convictions when it's time to "step out on faith" and challenge the unrighteousness found in their workplace, community or government. What sacrifice are you willing to make for truth and righteousness? Are you leading a double life, speaking of injustices in whispers, while exclaiming all your faith in the creator? These are questions for self-examination. Are you willing to pick up the drum of justice? "THE TIME IS NOW!! PEACE"

Amen!!

UPDATE: This story speaks for itself and I believe that if this is your first exposure to the crisis at Grady Hospital and the dynamics that surround it, you should still have no trouble understanding this piece. That said, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Thus, if you want to see how Vernon Jones, Derwin Brown, et al fit into the mess at Grady Hospital please read the link I just provided. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

Defining Predatory Lending

Justice Brennan once famously said this about pornography.

I shall not today attempt further to define the kinds of material I understand to be embraced . . . [b]ut I know it when I see it .

The Supreme Court has continued to this day to try and define what is free speech and what is obscene and pornography. While in the matter of pornography vague definitions may suffice, I have pointed out over and over that vague and undefined regulations always lead to disaster in mortgages. What it always leads to is more useless paperwork to sign. If you go to the previous link, you will see that it is all the paperwork already part of the process that leads to much of the fraud.

Enter the term predatory lending which is at the center of the new bill H.R. 3915. Here is what one Winston Salem paper said about predatory lending.

There is no specific definition about what exactly predatory lending entails, though most observers believe that the description applies when lenders take advantage of borrowers by charging high interest rates and consider only the value of a borrower’s assets, as opposed to what the borrower can afford to pay.

Keep in mind the full name of H.R. 3915 is the Mortgage Reform and Anti-Predatory Lending Act of 2007. In other words, the Congress is trying to legislate that which it can't even define. Look at what this paper describes it as. First, it says that it involves "high interest rates". That is of course in the eye of the beholder. How do we determine high? Is high the same for a borrower of a credit score of 800 as it is 500? Is it the same for an investment property as it is for a primary residence? No one knows because "high interest rates" is another dangerously vague term.

Look at the other part of the description. It is a loan that considers value and assets over their ability to pay. I once closed a loan for two borrowers in which their debt to income ratio was almost 100%. You read that right. Keep in mind that income is before taxes and I still was able to get them approved even though just the debts on their credit report amounted to their monthly mortgage. How did this happen? The wife was the breadwinner and she recently got laid off. That income wasn't allowed to be counted. Since they were actually well off, their credit score approached 800. They had about as much in liquid assets (checking, saving, investment, retirement plans, etc) as though owed. Also, they only owed about 200k on a property that was worth 450K. Was I doing predatory lending? By this description I was. This is despite the fact that in this case I was merely lowering their rate while paying for all their costs. In other words, all I did was lower their monthly payment from their previous one.

Yet, without a clear definition of predatory lending, this could be construed as "predatory lending". Even in the current bill there are all sorts of vague characteristics of predatory lending. For instance, there is net tangible benefit. I personally have no problem with net tangible benefit. I use that concept to sell. After all, I have to have a reason for the borrower to take the loan. To me that is their net tangible benefit.

Then, there is the anti steering portion of the bill. According to the bill, if I steer someone into a sub prime loan even though they are qualified for prime, that could be construed as predatory. The problem is that there are times in which sub prime loans are better for the borrower. For instance, Fannie Mae has several different levels. It has Expanded approval and that reaches three levels. By the time a borrower is only approved for Expanded Approval III, they are most likely better off going to sub prime. Yet, unless anti steering isn't better defined, this may also be construed as predatory.

There is more. Look at this portion of the bill.

engaging in abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but different race, ethnicity, gender, or age.

Abusive and unfair can mean just about anything and frankly any borrower can feel as though they were treated as such. By leaving the definition as this vague, it opens just about any behavior to "predatory".

This should scare everyone. Congress can't even define what they are trying to prevent. Then, they use vague and unclear language to describe it. If this bill gets passed in its current form, predatory lending will mean just about whatever anyone wants it to mean. If that is the case, it opens up the industry for all sorts of law suits. More than that, it opens the process up to all sorts of new paperwork to sign. In fact, the legislators think that more paperwork is the answer. Let's look at another part of the article from the Winston Salem paper.

We should have more disclosure about the loan terms that people are signing on to … a one-page summary that every borrower sees explaining everything,” he said.

That was said by Republican Patrick McHenry. Notice he never says what everything is. In his world, after getting everything out in over one hundred documents, we still need one more to summarize everything. This is the sort of nonsensical perspective that our legislators from both sides bring to this debate. All it will lead to is more vague language, more paperwork, and ultimately more confusion.

My Morning at Perspectives Charter School

I spent this morning at Perspectives Charter School. I was one of ten speakers that spoke in groups of five to two classes about my current career and how I got to where I was at. In my group was a personal injury lawyer, a chef, a professor of nursing, and a consultant with Ernst and Young. We spoke in front of a class that Perspectives calls internships.

In this internships class, the kids learn such things as interviewing, job applications, resumes, body language, and even proper behavior in meetings. Among other assignments, the students spend nine separate days with a professional "shadowing" them. This is something that I have volunteered for the last three years.

In my business, mortgages, my students did such tasks as: pricing loans, creating spreadsheets, researching FHA loans on the internet, and grading an interviewee. They also had lunch with several of my friends, my most successful friends: a scientist, a sales executive, another mortgage broker, and a party planner to name a few.

Furthermore, after spending time with the kids (I had three each of the last two years), I learned that they (surprise, surprise) hated school. What was interesting was some of the reasons. First, they hated wearing a uniform. Second, because Perspectives is relatively small, less than 50 students per grade, they couldn't "hang out with their friends". In other words, they hated it for every thing that makes it great.

Besides this internship class, the students also go on college tour. This is a two week tour that they take with their classmates by bus. They see schools in several different states and of varying size and quality.

Since I don't work at Perspectives, my knowledge is only of that which I have had contact with. Perspectives does all sorts of innovative things. I bring this up not merely as a plug for Perspectives but rather as a plug for innovative education and school choice. I know that those that wind up going to a traditional public school in Chicago never have the opportunities the students had at Perspectives.

Even at Glenbrook North, my alma mater, I never did many of the things that the students at Perspectives are exposed to. The person in charge of the internship program mentioned to me that one of the students had never been in an elevator, let alone in downtown Chicago, before they came for their first day of their particular internship which just happened to be located in the Sears Tower.

I know that in Utah school vouchers were recently voted down. I know that any program that allows school choice gives parents a better chance to send their kids to charter schools and other innovative schools. I am not educator and my knowledge of policy related to education is limited to my experience at Perspectives, however, I have enough experience at Perspectives to know that they are revolutionizing education. While I may have personal and emotional attachment to Perspectives, I do know that there are schools all over the country doing similar things to Perspectives. I know that we as a society should do everything we can to give parents the opportunity to send their kids to such schools.

More Asinine Politicking from Harry Reid

The hat tip goes to the Weekly Standard for pointing this out. Harry Reid ultimately caved and went down in a stunning defeat the last time he tried to play chicken with the President. In the spring he tried to stare down the President in a battle of wills over troop funding. We all now know that he and Nancy Pelosi ultimately caved in and gave the President a clean appropriations bill with no troop withdrawal. Well, here is what he is saying now.

Senate Majority Leader Harry Reid said Tuesday that Democrats won't approve more money for the Iraq war this year unless President Bush agrees to begin
bringing troops home.

By the end of the week, the House and Senate planned to vote on a $50 billion measure for operations in Iraq and Afghanistan. The bill would require Bush to initiate troop withdrawals immediately with the goal of ending combat by December 2008.

If Bush vetoes the bill, "then the president won't get his $50 billion," Reid, D-Nev., told reporters at a Capitol Hill news conference.

This is a lot of posturing because as WS explains the Pentagon has funds to last several more months. Given the events on the ground, it is highly unlikely he will have the political power to actually accomplish this.

When I was a senior, my frat brothers got into a verbal joust with the fraternity across the street from ours. The joust led to more words and ultimately people started throwing things across the street. The incident came to a head when the other fraternity used a sling shot to throw a beer bottle across the street. That beer bottle broke one of our windows. Despite a lot of bluster, we ultimately backed down and did absolutely nothing about the beer bottle thrown through our window. It was the most I was ashamed of my fraternity.

I bring up the story because just like Harry Reid we started a fight we had no plans on finishing. The people that started the verbal joust had no intentions of seeing any confrontation through if it became physical. While they had no problem talking tough, they had no intention of backing up their words ultimately with actions. The same, I believe, goes for Harry Reid.

While he is trying to play up his far left credentials with tough talk, he has, in my opinion, no intention of seeing this through. While the war continues to be unpopular, it is far more popular now then it was then. Here is one poll that tracks opinion for the last ten months. It is beyond polls though. Combat deaths have gone from over ninety in August, just over sixty in September, and just over thirty in October. Civilian deaths have gone from just under two thousand in August, to nine hundred plus in September, to seven hundred plus in October. There is no doubt that things are getting better.

If Harry Reid couldn't pull off cutting off funds when it didn't look like we could win, what makes him think he can do it now? He is acting no different than the hooligans from my frat. They started a fight they had no intention of finishing, and so is he. I lost all respect for those guys and the same for Harry Reid.

Ball of Confusion

There are very few heroes in the sordid tale of Emory University and Grady Hospital however I believe Ron Marshall is one of them. He has graciously let me re print an editorial he recently wrote. So, without further adieu...

Here we go round the campaign bush, the every four year dance that has us all fooled in to believing something new is going to happen if you vote for me, no me, no me. There was a song that said “vote for me and I’ll set you free, rap on brothers’ rap on”. With this political race coming around and the same old faces are bubbling up. Where have they been the last four years? Most having the same old connections means we are going to have the same old results.

I wonder how many churches will have to be built before one step’s up and comments to saving our communities instead of seeing who can attract the larges congregation or be the most popular. Change your efforts please. Why haven’t these vital community resources gotten together and tried to find a solution to the crisis that has our communities spinning away into a tornado of self-destruction.

Why are we trying to save hospitals and educational facilities when it should be a way of life to have them with services that improve the quality of our lives? If your sheep are sick then they do not produce good wool. Has the sheep herder been keeping the sheep sick and in the dark so they do not question him? Why are we being stonewalled from finding out what our public money is being used for. Emory, Grady, PDK, and Marta secrets have paralyzed open and transparency laws and it seems the thought of having a Sunshine Law is a fraud.

What happen to parenting? How do we sit back and watch our children fail in the schools. Then, let the school system itself be a failure and more recently have our children fail in life and not riot before our commissions or our representatives? We all just jump on the band wagon, the one that everyone seems to hang on to for dear life when there race has the reigns. Where are the independent thinkers? You can’t pray for them to show up.

If not having water teaches us one thing it is we all need the same things and will die if we don’t have them. We must share our resources and preserve what’s left. Remember Easter Island? They used up everything and did not survive their paragon.

We took away the Native Americans’ belief that if respect the earth and each other it will give us a future. They also say our children are us. Now a days the parents and churches are teaching you must make riches and use plenty of our nature resources in the name of wealth. Who are you praying to?

The Tortured Logic of Matt Yglesias

It was only a matter of time before those that support Hillary tried to prop her up by demeaning Tim Russert. There are probably lots of examples of this however I found this piece by Matt Yglesias. He seems to believe that it wasn't that Russert wasn't asking tough questions, he was, but that he was asking them about the wrong topics. Apparently, illegal immigration is not a topic worthy of tough questions. Yglesias thinks that tough questions should inform as well.

But while I wouldn't want to say that "tough questioning" is a bad thing, making toughness the goal is perverse. The goal should be to inform the audience. Climate change, for example, is a hugely important question. As a result, candidates ought to be subjected to questions about their climate change plans. And as it happens, the plans released by Hillary Clinton, Barack Obama, and John Edwards are all based on good science and good economics. So asking them questions aimed at elucidating their plans shouldn't lead to any embarrassing incidents. Shouldn't, that is, unless the candidates are unprepared to discuss their own plans in an intelligent manner which really would be worth knowing about.

Now, I think that climate change is a worthy topic and there should be tough questions asked about it along with every topic a politician should deal with. Frankly, I wish some moderateor actually knew something about my business, mortgages, and could undress some of the ridiculous plans being offered. That is not the point. Just because Yglesias thinks that climate change is a more worthy topic doesn't mean it is not. It also doesn't mean that asking questions about illegal immigration isn't worthy or enlightening. I think everyone was enlightened by Hillary's non stance.

There are even more problems with Yglesias' analysis. Just because he clearly agrees with Edwards, Obama et al, doesn't mean they are right and based on good science. This is third grade debate tactics. If they are based on good science, we wouldn't need to merely take his word for it. He says they are based on good science and then says nothing beyond that. I don't know what background Yglesias has, but I doubt it is science. Thus, he is really in no position to say such a thing.

Frankly, what it appears to me is that Yglesias thinks that there should only be tough questions on things he and other people like him think is important. Any other topics beyond that are in his words, "sadistic". If you believe Yglesias, questions about climate change and alternative fuels are informative and worthwhile, while questions about illegal immigration are "sadistic".

The fact is that tough questions on any policy are informative and worthwhile. It is not up to Yglesias to figure out what topic is worthwhile and what topics aren't important.

Furthermore, he leaps and pretends as though he knows how a Republican candidate would or wouldn't handle a question.

John McCain, by contrast, might or might not end up embarrassed by serious questions about his plan, which moves in the right direction but on a schedule that's too slow and in a way that's too inefficient. Serious questions would give him the opportunity to make the case for half-measures and whether or not he winds up embarrassing himself would turn on whether or not he can give a convincing rationale for what he's doing -- which is at it should be. His Republican counterparts, by contrast, would almost certainly wind up embarrassed by serious questions about their views of climate change since their policies are badly at odds with reality.

I have no doubt that Yglesias would perceive McCain as embarrassed by a question regarding climate change, but that doesn't mean everyone will. The problem is that Hillary was nearly universally perceived as stumbling on that question. Thus, there is no defending her. Yglesias is left to attack the messenger and work on tortured logic to excuse what is frankly the definition of a gaffe.

Instead of merely admitting that she screwed up, as all politicians do at some point, he tries to deflect the issue with laughable and ultimately illogical reasoning.

Yes, Mr. Yglesias, it is possible in theory that McCain could fumble a question on climate change. He may even be wrong on the science, however I live here in reality. In reality, McCain did nothing wrong recently. In reality, it was Hillary Clinton that actually fumbled something. All your hypotheticals and tortured theories aren't going to change that. You can pretend as though the question wasn't important because YOU don't think it was, however that won't actually change reality.

To All Those That Served and Serve Now: Happy Veteran's Day

A couple years ago, my grandfather passed away. At his funeral I first found out that his brother, my grand uncle, died on a mission as a pilot in WWII. My grandfather was himself a mechanic for planes during the war. The only thing I knew about his service was a bomber pilot's leather helmet that he gave me when I was young. (It was from a German fighter pilot)

My grandfather and his brother both served for the Soviets. (that is of course where my entire family is from and where I was born). I mention this because on the fiftieth anniversary of the war my grandfather was honored here in America (where he eventually emigrated to along with much of the rest of my family). My grandfather and his brother were both heroes. They each sacrificed plenty for the cause of freedom and my grand uncle made the ultimate sacrifice.

I have no such stories of my own, however I respect and honor veterans and combat forces everywhere. They are in Iraq, Afghanistan, Somalia, the Phillipines, and many other places we don't know about. Their courage, dedication and service should humble us all.

On this Veteran's Day, we salute all of you.

The Ponzi Scheme Known as Social Security

This is Charles Ponzi and he is the inspiration for Social Security.



A hat tip needs to go to Michelle Malkin for pointing out this story. It seems that Barack Obama has made enemies with the nutroots recently. His crime is pointing out that social security has some problems. Social Security is the third rail for the base of the Democratic Party and much like someone's ugly wife, criticizing it brings an emotional response. He got hit by most of the usual suspects

All of which makes it just incredible that Barack Obama would make obeisance to fashionable but misguided Social Security crisis-mongering a centerpiece of his campaign. It’s a bad omen; it suggests that he is still, despite all that has happened, desperately seeking approval from Beltway insiders.

...

Barack Obama, please realize that you are assisting the right’s efforts to get rid of Social Security. Their strategy is to make the public think that the program is in trouble and then sweep in with their “solution.” …IS your heart in the right place? Social Security is not in trouble. Stop saying it is.

Now, the right blogosphere is having fun with this little political civil war however they should also remember their own threats against most of the candidates for the Rep nomination because they dared not toe the company line on things like abortion, campaign finance reform, immigration, etc. We all have our third rails and Democrats have among them Social Security.





I don't much care about this little battle. I frankly believe that Obama is better off taking them on. He has nothing to lose at this point anyway and the nutroots turn off as many people as they turn on. I am glad he said what he said and frankly showed political courage that I wish more politicians would show.





That said, I am much more interested in the problems facing Social Security and their solutions. I pay about seven percent of each check to social security and I don't believe that I will get anything when I retire.





A Ponzi scheme works as such. I came to you and promise that if you give me $100 today I will give you say $200 in the future. The way I get your $200 is from other suckers that are made the same promise. This works until I find no more suckers.





Now, the way Social Security works is that today's workers pay for today's retirees under the promise that once they retire, that day's workers will pay for them. That is no different than any other Ponzi Scheme only two things: 1) the government doesn't even hide that it is a Ponzi Scheme and 2) since the government is doing it instead of being illegal it is Social Security.





Frankly, the politicians can raise the age limit or the limit on income or any other limit, and it won't change the fundamentals behind it. If one group is used to fund the investment of another group, that PYRAMID scheme will fail once you have an imbalance in the investors. Say for instance, one month my ponzi scheme had a huge number of new investors and the next month I slowed down. I wouldn't be able to fund the new investors from the first month. That is what is happening now. It wasn't a month but years of baby boomers being born, and now there aren't enough workers to fund their retirement.





Anyone that knows anything about Ponzi Schemes knows that at some point there will be suckers holding the bag. It maybe the baby boomers if we don't figure it out, or it might be my generation or maybe even the generation after us. It matters not. The system is flawed. Social Security is among the worst ideas our government has created. It is a state sponsored legal Ponzi Scheme. That is what we should focus on. Everything else is trivial.

The Ironies of H.R. 3915

Upon reflection, I was just slightly in error in my analysis of the mortgage crisis and the subsequent political opportunism currently being displayed by the politicians. While I believed banks provided easy targets, I also expected that politicians would never attack them because banks have two resources that make attacking them risky and unwise: money and power. For this reason, I thought banks would remain largely unscathed with responsibility and most of the punitive action would fall on the easier target: the mortgage broker.

I was only about 90% correct in my prediction. In fact, the politicians have figured out how to attack banks without necessarily picking a fight that might get messy. They have chosen the sub prime market. In layman's terms sub prime loans are those give to people with poor or mediocre credit profiles. Sub prime lending has revolutionized not only how we lend but who we lend to. The sub prime concept has also been one of the fall guys in the mortgage crisis. (Once again I recommend the book, Liar's Poker, which details how the market for these sub prime loans was created)

As I have already pointed out in previous posts, the market makers of sub prime loans created a market for so many ridiculous loans that just about anyone with a pulse could get qualified. Since merely having a pulse doesn't guarantee that you can pay your loan back, we are finding that many of these loans aren't being paid back. Since foreclosure is the ultimate punishment for non payment, and the borrowers aren't much of a target politically, the concept of sub prime has become the target of politicians everywhere.

There were layer and layers of irony in John Edwards being being attacked for his links to a sub prime mortgage provider. First, Edwards wouldn't know the difference between sub prime and a submarine ship. Second, the reason he was attacked was because this lender had the "audacity" to try and foreclose on borrowers that didn't pay. Again, it seems no one had one problem with sub prime lenders when they were creating markets for all sorts of poor and middle class folks to buy properties that never even dreamed of owning homes before.

It was only when we all realized that everyone was acting irresponsibly, and ultimately lending to irresponsible people, that everyone decided to turn certain groups into villains. Since it makes no political sense to blame the poor folks, the politicians needed an easier target. They chose the sub prime lending concept.

Thus, while I didn't initially predict the draconian ways in which Congress, lead by Barney Frank, plans on dealing with sub prime, they should have been altogether easy to predict. Make no mistake, if the remedies currently in H.R. 3915 are passed then sub prime will be eliminated.

There are four different things that H.R. 3915 does that deals with sub prime.

1) It eliminates Yield Spread Premium on sub prime loans. The great fear for all mortgage brokers is that YSP will be eliminated, however if I read the bill correctly, it is only on sub prime that it will be eliminated.

Since Congress knows very little about my industry and even less about what created this crisis, they think that YSP is what has caused the widespread delinquency on sub prime loans. The reality is that banks and their partners on Wall Street created loans for irresponsible borrowers and we, sociopathic mortgage broker, had absolutely no problem putting the three of them together. The problem is not and never has been YSP, but rather 620, stated, stated, to 100%, a loan in which a borrower with the marginal credit score of 620 could state their income, their assets, and still buy a property with no money down. YSP had absolutely nothing to do with this concept or the fact that Wall Street decided to make this concept into a market. Yet, it is YSP that is being blamed for the excesses of the mortgage dynamics.

By eliminating YSP on sub prime but not on prime, Congress merely makes even more incentive for someone like me to focus on good borrowers. If I know that I can make money on good borrowers without necessarily charging extra fees but not on marginal borrowers, guess which borrowers I will focus on. Furthermore, sub prime was never meant to be a long term loan. It was meant to be taken on while the borrower's credit was being turned into that of someone that would qualify for a prime loan. That being the case, why would it ever make sense for that borrower to pay anymore costs than they absolutely have to. By eliminating YSP, I am forced to make all my money in up front fees. Thus, borrowers with loans intended for short periods are now forced to take on extra fees.

2) Fees and points can no longer be financed. I have already explained that all new sub prime loans will be hit with even more up front fees than normal. Now, Congress is forcing that the borrower rather than the loan pay for these extra costs. Keep in mind that sub prime tailors to the poor. It is ludicrous to believe that poor folks be forced to take on extra fees, pay for those fees up front, and not have any unintended consequences. Financing of points and fees is an old trick that scummy brokers use to hide those fees. If someone isn't paying for something out of their pocket, they simply usually don't realize that they are still paying for it. By simply rolling fees and points within any new loan, brokers are able to use slight of hand so to speak to make people believe they aren't paying costs or merely not paying that much.

It is used much more often, though, by scrupulous brokers to make sure that borrowers that have little or no funds are able to get loans without going broker. What the politicians have never figured out is that despite our reputation the overwhelming majority of loans that are done are done with the borrower's best interest in mind. Thus, while there were plenty of brokers that abused rolling points and other costs into loans, the majority did it with the borrower's interest in mind. By throwing the baby out with the bathwater so to speak, all the politicians will really do is make it that much more difficult to do loans. Since most poor folks, the overwhelming majority of sub prime's target market, don't have thousands lying around, it is going to be very hard to do a loan for them that involves coming to closing with thousands of dollars. That is ultimately the practical effect of no longer allowing rolling in closing costs into the loan. Poor folks will just have to bring the closing costs and points to each closing they have.

3)Anti Steering. Here is another vague and very important part of the current bill.

steering any consumer from a prime loan to a subprime loan,

Now, what this means, I assume, is that anyone who qualifies for a prime loan has to go into a prime loan. While this may sound good and well to a politician, there are times when a non prime loan makes more sense for the borrower. For instance, Fannie Mae loans actually have three levels, called expanded approval 1,2, and 3, besides their standard approval. These are much like the minor leagues of Fannie Mae loans (with EA 3 being like single A). Anyone that only qualifies for EA3 would most likely be better off getting a sub prime loan especially those where the loan to value is high thus making their mortgage insurance expensive as well. Again, it is unclear if EA3, for instance, is considered prime. Thus, it is unclear if someone could be sued for steering a borrower away from it in favor of a sub prime loan.

Whenever it is unclear or murky, either new disclosures are created, or banks and brokers simply stay away from such borrowers. Either thing is ultimately not good for the fate of poorer borrowers as well as sub prime altogether.

4) This bill introduces loan counseling for borrowers in sub prime loans.

This was tried here in Illinois with HB 4050. Here are the real estate sales in the zip codes it was tried in.

Compared to August 2006, sales were down 45% in the target zip codes. The breakdown by zip code:

60620 experienced a 43% drop in sales
60621 experienced a 25% drop in sales
60623 experienced a 57% drop in sales
60628 experienced a 15% drop in sales
60629 experienced a 63% drop in sales
60632 experienced a 34% drop in sales
60636 experienced a 41% drop in sales
60638 experienced a 54% drop in sales
60643 experienced a 49% drop in sales
60652 experienced a 43% drop in sales

Compared to September 2005, one year ago, sales were also down 45% in the target zip codes. So, we can say with near certainty that the plummet is not strictly seasonal. The breakdown by zip code:

60620 experienced a 28% drop in sales
60621 experienced a 37% drop in sales
60623 experienced a 61% drop in sales
60628 experienced a 17% drop in sales
60629 experienced a 70% drop in sales
60632 experienced a 54% drop in sales
60636 experienced a 1% drop in sales
60638 experienced a 65% drop in sales
60643 experienced a 49% drop in sales
60652 experienced a 41% drop in sales

Counseling brings with it extra fees and extra paperwork and most of all it brings with it a lot of confusion. Some thirty lender decided to pull out of zip codes in which HB 4050 applied. Many lenders will simply pull out of doing loans wherever this sort of counseling is done.

Everyone needs to keep in mind that if sub prime was a boxer it would be taking a standing eight count after taking a huge upper cut. Now, Congress is coming in reigning haymakers with H.R. 3915. If this bill gets passed in a form even close to what it is now, it WILL end the area of sub prime. This WILL hurt the poor the most, and ultimately Congress WILL blame someone else for it.

Parsing the Language on H.R. 3915

First and foremost, whatever the specifics of the bill it is an unmitigated disaster. It is full of vague language. Most of it is details are open to interpretation. As I mentioned in a previous post, this bill doesn't address the real problems that lead to the crisis, rather it assigns blame to targets that politicians think the public will cheerlead. This creates a bill that, in my opinion, will only continue to contribute to many of the problems that were in the market, and doesn't really do anything to resolve any of them.

First, there is an awful lot of confusion regarding the Yield Spread Premium portion of the bill. Some are claiming that it is eliminated. Brian Brady, of bloodhound realty blog, claims it is capped at 1%. Though, I have asked for him to source it and so far I have received no source. I cannot find any mention of capping YSP (for prime loans at least it is definitely eliminated for sub prime) in the summary I found. I also received an email late last night that said the the National Association of Mortgage Brokers (NAMB) was able to convince Frank of the importance of YSP. (not apparently so important for sub prime though) I will go with that for now, and just break down the rest of the bill. There are six areas of concern for me.

1) Again, a distinction is made between banks and brokers, and furthermore it creates a massive new government bureaucracy.

Provides for licensing and registration of individual mortgage brokers and registration of bank employees that originate mortgages, as well as the establishment of a Nationwide Mortgage Licensing System and Registry (NMLSR).

Now, as you can see, if you work for a bank, you only need to register whereas brokers need to go through all sorts of licensing on top of the registration. Now, here in Illinois, we already have such a law. It also distinguishes between brokers and bank employees. Brokers have to do all sorts of things while bank employees have to do nothing. This is just one example of many where Congress makes a distinction between those that originate loans through a broker and a bank. For instance, there is the cumbersome and bureaucratic nightmare known as SB 1167 here in Illinois. It forces, on certain loans, counseling mandated by the state for a fee of $300. This is of course only applies to brokers not banks. Banks already don't even have to disclose YSP like brokers do. The list goes on and on.

Furthermore, I was a stock broker before I was a mortgage broker and I can tell you that upon learning everything in the series 7 and 63, I never used any of that information EVER AGAIN. Maybe this new licensing will work, however if anyone has read the book, Freedomnomics, you know that most licensing programs only contribute to keeping good people out of any industry.

Second, this new NMLSR will create a giant new bureaucracy. Does anyone have confidence that the federal government will be able to track and monitor the fingerprints, background, testing, and monitoring of millions of mortgage professionals? Furthermore, there is this.

If a State does not have a system that meets the minimum standards for State-licensed loan originators or does not participate in the NMLSR, then HUD will establish a backup licensing system for loan originators that operate in that State. HUD will be granted enforcement authority over such loan originators similar to banking regulators.

The federal government won't only keep it all organized but it will even develop the model in those states that don't develop it themselves.

2)This bill will spell the end of sub prime. Right now, if sub prime were a boxer, it would have just been knocked down and is being given a standing eight count. Now, Congress just came in and is reigning haymakers.

First, YSP is eliminated, and if I read it right for brokers and bankers. (Retail banks rarely do sub prime loans anyway that loss would be minimal) Then, there is this.

prohibiting the financing of points and fees,

Now, keep in mind, without YSP, the only way anyone can make money is through points. Now, the government is saying I can't finance those within the borrower's loan. What that means in layman's terms is any fees and points charged have to be paid by the borrower at closing. Now, since sub prime is mostly geared toward the poor, this is probably not much of an option. Incentive has already been removed by elminating YSP and now the loans are even more difficult to get done because all the fees must be paid at closing. In other words, the government just totally screwed the very people it claims to protect. By enacting this bill we WILL go back to the elitist society we once had.

The irony is that this bill is supported by a plethora of consumer advocate groups. While they think it protects the poor from vultures like me, they can' t seem to realize that it also eliminates most of their options in buying a home to begin with.

3) Lot's of vague language and that will lead to lot's of new paperwork to sign.

That's right everyone. This should come as no surprise to anyone who has read my work. I pointed out before I realized there was an H.R. 3915 that Barney Frank thinks you don't sign enough paperwork. I counted seven separate places within the summary that will lead to new disclosures. There are words and phrases like: reasonable ability to pay (can you say the reasonable ability to pay disclosure), net tangible benefits (this will certainly be a disclosure since NTB is already a disclosure here in Illinois), presenting consumers with appropriate mortgages (the appropriate mortgage disclosure), unfair lending practices, predatory characteristics, the list is endless.

There are whole sections that are vague and thus will have many disclosures created to deal with them.

Qualified safe harbor mortgages are loans with (1) documented consumer income, (2) underwriting process based on fully indexed rate (taking into account taxes, insurance, and assessments), (3) no negative amortization, (4) other requirements that may be established by regulation, AND (5) one of the following: (i) fixed payment for at least 5 years, (ii) for variable-rate loans, APR that varies less than 3% over the interest-rate index, OR (iii) DTI not greater than a percentage prescribed by regulation.

Qualified safe harbor loans face almost no regulation and thus it will become very important for banks to establish that your loan is a safe harbor loan. No amount of paperwork will be too great in establishing that fact, and since they aren't the one signing anyway, we can all expect a whole host of new disclosures strictly to establish that your loan is a "safe harbor loan". Remember, as I pointed out already, one of the main reasons it is so easy to rip people off is because there is so much paperwork. Congress' solution to the problem is more paperwork.

4) This bill is either heavy handed to Wall Street or more likely it pays lip service to being heavy handed while actually doing nothing.

Assignee/Securitizer Liability (does not extend to trusts and investors): Subject to exemptions below, for loans that violate the minimum standards (reasonable ability to repay and net tangible benefits), a consumer has an individual cause of action against assignees and securitizers for rescission of the loan and the consumer’s costs for rescission.

Exemption from Liability: An assignee/securitizer will not be liable for a loan that violates the minimum standards if the assignee/securitizer provides a cure to make the loan conform to the minimum standards within 90 days of receiving notice from the consumer, OR (1) has a policy against buying mortgage loans that are not qualified mortgages or qualified safe harbor mortgages and exercises reasonable due diligence to adhere to such policy AND (2) has obtained representations and warranties from the seller or assignor of the loan regarding not selling or assigning loans that violate the minimum standards.[1]

If this is confusing, then everything is fine with you. (not with Congress mind you, just with you). If I read this correctly, Congress has established that borrowers that get into trouble can actually go after Wall Street, the securitizer. Now, imagine the nightmare that would cause. Wall Street securitizes millions of loans all at once and Congress wants each individual to be able to go after them. Now remember everyone, mortgage backed securities, the securitized, are out of favor with Wall Street already. Now, Congress wants to come in and allow for the potential of class action law suits against it.

Before you get too scared, I believe this is all lip service anyway. The second paragraph establishes outs for Wall Street. As long as they have a policy against securitizing bad loans and they have done their due diligence, they are immune. How vague is that? Wall Street securitizes billions of dollars worth of loans, or at least it used to, I hope it does its due diligence. This portion of a bill is a lawyer's dream, and ultimately it is impossible to know how anyone will respond to it. Wall Street may see this as reason enough to never go back to this market, or they may realize that Frank put this in only to look as though he is being tough on them.

5) If I read it correctly, this bill actually incentivizes a borrower to get foreclosed on. Remember, there is no way that the politicians would ever hold any irresponsible borrower responsible for any of this. That wouldn't play well politically. Thus, they are doing everything they can to protect the borrower from more problems. (except for the problem of signing more paperwork) This portion is one of several places where they do that and of course the portion regarding Wall Street is another.

When the holder of a mortgage loan or anyone acting on behalf of the holder initiates a judicial or non-judicial foreclosure, (1) the consumer who has a rescission right under this bill may assert such right as a defense to foreclosure against the holder to forestall foreclosure, or (2) if the rescission right has expired, the consumer may seek actual damages (plus costs) against the creditor, assignee, or securitizer.

First, it takes up to nine months and more after payments have been stopped for someone to lose their homes already. This bill will add even more time to that process. In the meantime, a bank receives no payment. While I can sympathize with a borrower that got in over their heads, how about some sympathy for a bank that loans hundreds of thousands and receives no payment for a year and more.

It is portion two that scares me. I can't make heads or tails of it. I can see it being interpreted though as allowing borrowers recourse for lawsuit if they are foreclosed on. Doesn't that sound like an incentive to allow foreclosure.

Yes, the entire section is quite vague and, if you have being paying attention, the practical effect is that YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET. This section will likely have dozens of new disclosures to address it.

6) Finally, there is mention of a new counseling program. I have already referenced the counseling program here in Illinois. While SB 1167 hasn't yet been enacted, its earlier reincarnation HB 4050 did enough damage. It applied to only a handful of zip codes. Take a look, here are the sales figures from those zip codes.

60620 experienced a 43% drop in sales
60621 experienced a 25% drop in sales
60623 experienced a 57% drop in sales
60628 experienced a 15% drop in sales
60629 experienced a 63% drop in sales
60632 experienced a 34% drop in sales
60636 experienced a 41% drop in sales
60638 experienced a 54% drop in sales
60643 experienced a 49% drop in sales
60652 experienced a 43% drop in sales

If you have come to my blog often, then you know my favorite quote. This bill is the perfect vehicle for that quote so I will end the piece with Ronald Reagan,

the nine most terrifying words in the English language are 'I'm from the government and I'm here to help'

I know that H.R. 3915 terrifies me.

SAVE Act Gains Momentum

As always, the hat tip goes again to Numbers USA. The SAVE Act is picking up steam. It now has more than seventy sponsors and most importantly we are getting a cross section of sponsorship. Republicans and Democrats alike are getting behind this bill. It received a crucial endorsement last week when it received the endorsement of Tom Tancredo. This bill has two members of the Congressional Black Caucus (Rep. Davis (D-Ala.) and Rep. Bishop (D-Ga.) and a member of the Congressional Hispanic Caucus (Rep. Rodriguez (D-Texas). It has 46 Republicans and 44 Democrats that have signed on. Even the unlikely bedfellows of Dana Rohrbacher and John Murtha have both gotten on board.

We should all temper our excitement. While I like the bill, I believe it has a serious potential problem. This bill will in fact create a massive new government bureaucracy. More times then not, that does more harm than good. I still have heard nothing about how this will be dealt with. Before this bill gets passed, I hope this is dealt with. Here is numbers on the inside baseball of it.

Our Capitol Hill Team is finding that most of the Republicans who have not yet signed onto this bill have been slowed down by caution from House Republican leadership. The House GOP leaders feel that other enforcement bills introduced this year solely by Republicans are tougher, especially in terms of local arrests and detentions. But it is highly unlikely that any of the GOP bills can be pushed onto the House floor for a vote before the next elections.

GOP leaders also are questioning signing onto the Shuler bill alongside a lot of Democratic freshmen whom they have hoped to defeat next year, in part because they aren't tough enough against illegal immigration. You will want to push your Republican non-signers into co-sponsoring the Shuler bill by putting the improvement of American communities ahead of partisan advantage.

As for Democrats, your Capitol Hill Team is hearing that talk about the Shuler bill is spreading through the Members like wildfire, causing a lot of fence-sitting Democrats to consider appeasing their louder and louder constituents by signing onto this bill.

After being crushed by hostile phone and fax from constituents for several years, many of these Democrats are being tempted to do something popular on immigration with this bill which they consider more moderate than previous enforcement bills that have come before them. Your pressure on your Democratic

Representatives may create just the right amount of extra rationale for Democratic leaders in the House to waive aside their preference for amnesties and allow this enforcement bill to get a vote.

I am also happy to report that Representative Shuler has finally made information about this bill available on his site. This bill has a lot of potential and I believe that when it is passed it WILL be landmark legislation, however everyone must stay on top of it. We cannot assume that big bureaucracy will fix itself. Please urge all legislators to give it a full and fair hearing but also encourage everyone to work on resolving the massive government bureaucracy it may start.

From Boon to Crisis: The Truth about The Mortgage Crisis and H.R. 3915

There are five players that contributed to the mortgage crisis we are now in. Most people know three, and almost everyone only blames one. The truth is that all five worked in a symbiotic manner to create the mess we are in. We are each responsible and any solution must recognize everyone's role. Of course, that isn't what we have. Let's go through the players

THE BORROWER:

Far too many people bought homes they simple couldn't afford during the crisis. That may not be politically correc to say, but it is the truth. I know two things from my experience in the mortgage industry. I know that anytime someone came to me to figure out how much they could afford to buy, they invariably bought a property that was more expensive than what we agreed upon. I also know that most people didn't even do it that way. More times than not, someone would call me, referred by someone else, telling me that they are about to put a bid on a house and they need a pre approval letter. That means that even though they were about to buy, they hadn't yet figured out if they could afford the property. They bought these homes because they loved the property so much that they convinced themselves that they could make the payments. Again, this isn't P.C. but it is the reality. Ultimately, if someone buys something they can't afford there has to be some personal responsibility.

There is a narrative that mortgage brokers put borrowers into loans they couldn't afford. While in some ways this is true. The reality is much more complicated. In reality, borrowers bought property they couldn't afford, and mortgage brokers found loans that they could qualify for, for that particular property. Ultimately, it wasn't the mortgage broker that presented them with property they had no business buying. That was a decision they came to on their own. They maybe crying victim, however in reality, they did it to themselves.

THE BANK:

One of the reasons that there were so many borrowers getting in over their heads is because banks created loans that brought irresponsible people into the market place. It all started with the refinancing boom. When that happened it was prime banks (banks for people with good credit) that were doing ridiculous amounts of business. People like me were making money hand over fist doing loans for borrowers with good credit. Sub prime is already a minority in the industry. Now, they were being pushed out even further. They needed to get back in the game, and the way they did it was by loosening their restrictions. It worked. Brokers like me started doing more sub prime.

Now the lower rates not only created a refi boom but expanded the housing market and when sub prime expanded the housing market boomed. As that happened, mortgages became a hot industry and there were all sorts of minor players popping up everywhere. To deal with the competition, banks tried to one up each other with the sorts of guidelines they would have. At some point, the loans went from being aggressive to being stupid. It all climaxed with a loan that is 620, stated, stated, to 100%. This means someone with a 620 credit score (marginal at best) can state (meaning claim without proving) their income and state (again claim without proving) their liquid assets, and they can do all this while getting a property with no money down.

It was exactly these types of borrowers outfitted with this type of a loan that bought property they simply could not afford.

THE MORTGAGE BROKER:

The mortgage broker was in the middle of all of it. The mortgage broker is ultimately the ultimate capitalist. All we care about is making money. Most of us aren't altogether concerned with our borrowers, and we go where the money takes us. Most brokers were making money hand over fist in prime loans from 2000-2003, and by 2004 we found new money in sub prime loans. Now, we were armed with irresponsible and naive borrowers and programs that allowed for just about everything we wanted. We took full advantage. Plenty of people were put into loans they shouldn't have been put in, and most of those brokers probably knew their borrower couldn't afford their loan, and so be it. Our role was exploiting the environment that was created for us, however we didn't create that environment.

WALL STREET:

The name Lew Ranieri probably means nothing to anyone, however his genius is the pre cursor to the mortgage mess we are in. (Please note he did nothing wrong and in fact he is a visionary and a genius. You can read more about Ranieri in the book Liar's Poker). In the late eighties, he created mortgage backed securities. It transformed the mortgage market from going to your local bank to the sophisticated system we have today. Mortgage backed securities were a hot item upon his creation of them, however after a while they fizzled out and for a long time they became yet another investment option. In other words there was always plenty of money to be made if you knew what you were doing however the investment wasn't what I would call "chic". (For instance in the late nineties internet stocks were chic. After mortgage bonds had their run, they stopped being chic and became yet another in a long line of investment vehicles)

That all changed when the housing boom hit. Once the housing boom hit, suddenly Wall Street couldn't get enough of mortgage bonds, and once they got a taste, they couldn't get enough. It became their crack. It was Wall Street that in fact created the market for most of these irresponsible loans. I know this because 620, stated, stated, to 100% became the industry standard. That means there was a market and only Wall Street had deep enough pockets to make a money. Banks didn't want to hold onto most of their loans. They wouldn't have money to give the next one then. Thus, if 620 was the industry standard, it was Wall Street that was asking for it. Wall Street began accepting just about any loan no matter how ridiculous the scenario (after a while just about everything was disregarded mortgage lates, bankruptcies even foreclosures at times) and creating a market for it.

Thus, on the one hand, you could say banks created loans that were ridiculous. On the other hand, either banks make loans the rest of the market is making, even if they are ridiculous, or they lose business. If banks didn't follow along with the market, the mortgage broker would work with a bank that would. It wasn't banks creating the market. That is Wall Street's role.

The worst part was that as long as the housing market was booming these bonds did great. No matter how ridiculous a program they turned into a bond, that bond performed great as long as real estate performed great. That's because with every rise in real estate the portfolios became significantly less risky. (For instance if they hold a portfolio of no money down loans, and real estate went up ten percent, those loans were now ninety percent which is much safer. Of course, it is more complicated than that but you should get the idea.

It was only when real estate stopped going up that Wall Street realized they were holding onto a bundle of loans of people that couldn't pay their mortgage back. While real estate went up, the people in those portfolios would usually be able to sell or refinance before there were any real problems.

Here is the most insidious part. Once Wall Street realized the mess they had created, most of them washed their hands of mortgages and went on to other investments. They helped create the mess and conveniently walked away when it was time to clean it up. The reason most banks recently went under was because they were holding onto portfolios of loans that Wall Street wouldn't take unless they were willing to take seventy cents on the dollar.

CONGRESS:

Everyone says that mortgage brokers rip people off. No one asks why it is so easy to rip people off. Does anyone know why? Do you think it has anything to do with the mountain of paperwork everyone needs to sign? Isn't it easier to rip someone off when the important piece of information is buried in a pile of useless paperwork? Why is there so much paperwork? It is always a response to yet another piece of regulation. There is a document called the equal credit opportunity act disclosure. It says that the mortgage broker can't discriminate based on race, creed, etc. The funny thing is that is highly unlikely that the person getting the loan is being discriminated against. It is those that didn't get a loan that should be signing that, but instead it is a closing document. I can go on for hours listing the plethora of useless disclosures, however here is the bottom line. Almost every borrower merely signs everything without reading any of it. That means it is much easier for the unscrupulous to take advantage. This is not the doing of the mortgage broker, but the doing of Congress. It was Congress that created the mountain of regulations which banks covered with disclosures. ECOA was a response to one of many regulations handed down by Congress.

This is insidious because Congress wants to respond to this crisis with more regulations. Ultimately, that means YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET.

Now, you have seen the players and how each contributed to the crisis. Now, let's go through why each is or isn't a target.

BANKS:

Banks are an easy target because most people hate banks. Banks are nasty, money hungry, and drunk on power. Most people don't have a high regard for banks. Banks do have something that makes them an uninviting target: a lot of power and a lot of money. Anytime anyone tries to push too much regulation banks employ their high powered lobbyists and make it go away. That is why most rules only apply to mortgage brokers. This insidious H.R. 3915 is a great example however there are plenty.

BORROWERS:

Borrowers have plenty of responsibility, however it isn't much a political move to say you got in over your head so too bad. That won't work so politicians are jumping over themselves to try and "save" the borrowers. Never mind that being in over your head isn't something that can be fixed by a politician. That isn't really the question. The question is what will get them the most votes. Being for the little guy, the borrower, will get them votes.

WALL STREET:

At this point, going after Wall Street is useless since they have taken themselves out of play. Congress can create all sorts of regulation for Wall Street securitization, however they aren't securitizing any of it anyway. Really, though, that would give politicians too much credit. Most of them have no idea what Wall Street's role was in the matter. Those that do don't see any political opportunity taking them on. The ones that do realize that Wall Street has even more lobbyists than banks. Thus, Wall Street skates without even a mention because the whole situation is too complicated, too messy, and not worth the trouble to investigate.

CONGRESS:

Well, if congress blamed itself, they couldn't come up with any new regulations now could they.

That leaves only one group. We are scummy. We have a terrible reputation, and we don't have that good a lobbyists. Thus, through a series of factors, the complicated mess that is the mortgage crisis is laid at the feet of one group. It isn't that we are the only ones responsible. It isn't that eliminating us actually resolves anything. It is that we are convenient, not powerful enough to fight back, and the politicians see the rest of the world cheerleading if they go after us.



I think they are wrong, and I hope everyone that reads this is moved to action. As you can see, what is happening here is a lot more complicated than the narrative, and H.R. 3915 doesn't actually resolve any of the problems that caused this. It is merely a political tool. Borrowers are the victims. Banks are given a pass. Wall Street is ignored and of course, Congress' role need not be mentioned. If you believe the politicians, the mortgage brokers created the loans, created the market, created all of the useless paperwork, and put borrowers into homes they couldn't afford with mortgages that were too expensive for them. Keep in mind. Only one of the five entities is dealt with in any sort of punitive way. Our Yield Spread Premium is taken away and our fees are cut. That basically means both ways of making money are limited. We have all sorts of new nebulous regulations to deal with. New licensing to deal with, and all sorts of new language.

The banks can no longer offer three year pre payment penalties on sub prime. That is something they rarely did at this point anyway. Wall Street isn't spoken for much at all. Obviously, Congress thinks more regulation not less is the answer. Thus, Congress will continue to contribute to making it easier for the unscrupulous to be unscrupulous. The borrower is given a parachute and most will be bailed out.

The only one falling on the sword is the mortgage broker. Think about that. We have a chain of events that worked in symbiosis. We have several different players that each contributed. Only one player is held to account in any meaningful way. Is that fair? Is that right? More importantly, is that sensible? Do you actually think that H.R. 3915 will do anything to avoid the next crisis, or will it merely be another tool for politicking? Are you all right with blatant politicking?

You may or may not care about this bill even though ultimately it affects everyone, but remember, that is because YOUR CAREER is not on the line like it is for every mortgage broker. Mortgage brokers will cease to exist if this is passed in its current form. Frankly, mortgage brokers will cease to exist if the same people leading this effort continue to lead. If mortgage brokers take the fall for a whole complicated chain of events, what's to stop Congress for going after used car salesman, insurance agents, and contractors next. Every industry with a less than stellar reputation will be a target. If everyone sits by while this happens, then Congress will be emboldened and even more heavy handed. This must stop. This bill is a non starter. What is a starter is examining the crisis fully and fairly. Does anyone actually believe anyone in Congress can explain the crisis the way I just did? Why are they allowed to pass laws without knowing what the f$%k is going on?

If you let them get away with this, they WILL go after your industry next when it is convenient.

The Villains of H.R. 3915

As you may or may not know, my industry is facing extinction in the form of a new insidious law called H.R. 3915. Well, now it is time to name names as far as villains of this bill. First, here are the co sponsors of this bill.

Melissa Bean (D Il8)
Michael Capuano (D MA8)
Julia Carson (D IN7)
Willaim Clay (D MO1)
Emaneul Clay (D MO5)
Keith Ellison (MN 5)
Barney Frank (D MA4)
Al Green (D TX9)
Luis Gutierrez (D IL4)
Paul Hodes (D NH 2)
Stephanie Jones (D Oh11)
Marcy Kaptur (D Oh 9)
Carolyn Maloney (D NY14)
Greg Meeks (D NY 6)
Gwen Moore (D WI4)
Christopher Murphy (D CT5)
Betty Sutton (D Oh13)
Maxine Waters (D Ca 35)
Melvin Watt (D NC 12)
Albert Wynn (D MD4)

Villain number one is BRAD MILLER (D NC 13). If any of these Representatives is your representative, they deserve an email, fax or phone call NOW.

There are more villains though. Let's start with the AFL-CIO. They wrote this ignorant piece in support of the bill. (one thing everyone will notice about supporters of this bill is none of them have any real estate or mortgage experience and most importantly they support it for vague and hard to define reasons).

How about this collection of consumer and advocacy groups.

AARP - Susanna Montezemolo 202-434-3807
American Federation of Labor and Congress of Industrial Organizations -
Greg Jefferson 202-637-5087
Black Leadership Forum - Gary L. Flowers 202-689-1965
Center for Responsible Lending - Kathleen Day 202-349-1871 or Sharon Reuss 919-313-8527
Community Development Financial Institution Coalition 703-294-6970
Consumer Action - Linda Sherry 202-544-3088
Consumer Federation of America - Allen Fishbein 202-387-6121
Consumers Union - Jeannine Kenney 202-238-9249
National Association of Consumer Advocates - Ira Rheingold 202-452-989
National Consumer Law Center, on behalf of its low-income clients - Alys Cohen 202-452-6252 x102
Opportunity Finance Network - Jennifer Vasiloff 703-967-1338
U.S. Public Interest Research Group - Ed Mierzwinski 202-546-9707 x314
About the Center for Responsible Lending

Here is a summary of what they said.

We commend Chairman Frank and Representatives Watt and Miller for taking the lead in addressing the underlying problems that have led to the escalating foreclosure crisis in this country. Banning prepayment penalties in the subprime mortgage market, requiring lenders to assess each borrower's ability to repay, and eliminating the bonuses lenders now pay to brokers to put people in more expensive loans than those for which they qualify would go a long way to protecting families from the deceptive and abusive loans that ultimately lead to a decline in home ownership.

Like I said, vague and undefined. Each one of these groups deserves a phone call. If you belong to any of them, please ask what they think will happen to the mortgage market if YSP is eliminated. Also, these groups are in favor of outlawing pre payment penalties on sub prime. Please ask them if they know that pre payment penalties create lower rates (everything else being equal of course). Please ask them if they would accept a pre payment penalty if it was the only loan they could qualify for.

The National Low Income Housing Coalition is another villain. They support the bill because they think it gives "protections to renters".

Low income housing advocates are urged to take action to support protections for renters in H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, which will be marked up by the House Committee on Financial Services on November 6.

Introduced by Representatives Brad Miller (D-NC), Mel Watt (D-NC) and Barney Frank (D-MA), chair of the committee, this bill would address abuses in the mortgage lending market and provide basic protections to the mortgage consumer.

The bill also provides foreclosure protections for renters. In case of foreclosure, any successor who takes over the property will have to honor preexisting leases, and tenants without a lease will have at least 90 days before being required to vacate. The renter protection provision is expected to be controversial, with opposition coming from the lending industry.

At least their support is more defined. First, most leases are honored upon transfer of property (whether it is through foreclosure or sale). Most new landlords are not motivated to look for a new renter when there is a warm body. What these guys want to do is force a landlord to keep a tenant in a property for a minimum of ninety days even though there is no lease. Now, that maybe a good deal for the tenant, however a bill should be fair to all. Here is their contact information. Please ask them if they realize that this bill eliminates YSP which will eliminate the mortgage broker entirely. Please ask them if they realize that without mortgage brokers there will be significantly less loans available to low income folks, or their constituency. (it should come as no surprise to anyone that this group is affiliated with ACORN. Here is the way ACORN contributes to the mortgage debate.)

Finally, the rest of the villains are those that treat this story with apathy. If it was you struggling for your professional survival would you be so cavalier? Would you be so apathetic? Make no mistake this bill isn't bad merely because it will put brokers out of existence. It is bad because it makes no sense. It puts all of the blame on one group not because we are fully responsible, but because we are the best target. This bill will cripple the housing industry, our economy, and give the banks full control of the mortgage market. There is a line I really like from the movie Hotel Rwanda. After Don Cheadle's character gets excited because a network will finally show the gruesome carnage of the war in his country, the cameraman (played by Joaquin Phoenix) said this.

"They'll say 'oh, how horrible,' then return to eating their dinner."

If you read about this bill, and return to eating your dinner because it isn't your derriere on the line, as far as this crisis is concerned, you are another villain.

Barack Obama Responds vis a vis the Dream Act

A few days ago, I received an email from Senator Durbin regarding my inquiry about the DREAM Act. I thought it was an instructive email because it gives everyone a glimpse into the perspective of those that do not take illegal immigration seriously. Obama just responded as well and his email is quite similar.

Dear Michael:

Thank you for contacting me to share your views on the Development, Relief, and Education for Alien Minors (DREAM) Act (S. 2205). I appreciate hearing from you on this important issue.

As an Illinois State Senator and a United States Senator, I have worked hard to improve our nation's immigration laws. For example, I strongly supported legislation before the Illinois State Senate that would have helped honest and hard-working immigrant students attend college by providing them with government loans to pay for tuition. In the U.S. Senate, I am an original cosponsor of the DREAM Act when it was first introduced in the 110th Congress as S. 774. This legislation would allow certain immigrant students to attend college and obtain legal permanent residency.

In order for an undocumented student to qualify and apply for conditional legal status under the DREAM Act, he or she would have to: have arrived in the United States at age 15 or younger; have been continuously present in the U.S. for at least five years; have good moral character; graduated from high school or obtained a GED in the U.S.; not have a history of criminal or terrorist activity; and be age 29 or younger when the DREAM Act is signed into law. The undocumented student would then be required to either serve in the military or attend college for at least two years within a six year time frame. If the undocumented student is able to meet all of these requirements within six years, he or she could then apply for legal permanent residency; if the student fails to meet all of these requirements, he or she would revert to illegal status and become deportable. This legislation offers hope and opportunity to young people who have chosen the right path and who want to become contributing citizens of the United States.

Unfortunately, in October, the DREAM Act failed to receive the necessary 60 votes in order to cut off debate on the measure. Failing to pass the DREAM Act only compounds the immigration crisis by continuing to drive thousands of young people every year into hiding.I will be sure to keep your views in mind if the DREAM Act makes it before the Senate floor for another vote.Again, thank you for writing, and I look forward to hearing from you in the future.

Sincerely,
Barack Obama

The first thing that should be obvious is the terminology for illegal immigrant. Obama will call an illegal anything before he will call them illegal. At one point, he simply refers to them as immigrants and at another point he refers to them as undocumented. Those are all euphimisms used by the writer to try and minimize the situation. Referring to illegals as illegal is a stigma that would rather not face. It is, unfortunately for the Senator, the truth however. Anyone that can't even bring themselves to call an illegal illegal is already suspect.

Now, when this bill was first introduced, I warned opponents that proponents would immediately try and appeal to our sympathies. At least Obama doesn't find an illegal and try and tell their sad tale. Instead, he tries to create empathy through generalization. He points out that the DREAM Act only affects those that came here illegally with their parents. He points out that it allows them to go to school and join the military, and he even tries to appeal to our reasonable side by pointing out all of the hoops they have to go through as well as the "severe" punishment for non compliance. The simple fact of the matter is that he is for a bill that gives legal status to those that came here illegally. That encourages more illegal immigration.

I notice that while Senator Obama was listing through the accomplishments he thought he had in regards to illegal immigration, there weren't any that involved enforcement or anything that would actually discourage illegal immigration. By doing a lot of work on illegal immigration, the Senator means doing everything he can to cater to law breakers. I have sympathy for those that came here illegally with their parents as well. That is why I would be more than happy if before they were deported, they also met with someone that would show them how to fast track their re entry. I would be all for a bill that absolves them of their crime when we look at their application upon re entry. I understand that it wasn't their fault that they entered the country illegally however they still did. Rewarding them with legal status only encourages more illegal immigration.

I would frankly be more than happy to revisit the DREAM Act when I am confident that the border is sealed and we have cut off employment access to illegals. At that point, the DREAM Act is the right thing to do and the compassionate thing to do. At this point, it puts compassion above reason and it is ultimately bad policy. Obama cannot get around that.

H.R. 3915: Opening Up The Closet Full of Skeletons

I received an interesting comment to one of my previous posts on this topic that I want to now share.

Mike, both you and Jonathan are spot on. Here's the rest of the story, as it were.Mortgage Brokers originated loans for submission to underwriters at lenders who then sold the loans to Wall Street mandarins who then chopped them up into acronyms with Triple A ratings and sold them at great profit to institutional investors. Brokers just sold the programs offered by the lenders. Lenders just offered the products that Wall Street demanded.

Since Wall Street could redefine crap as investment grade secured debt obligations 'til the cows came home, The spigot of cheap money for unqualified borrowers stayed on WAY too long.

The cows have come home, and the guys who essentially said 'approve everything, ask no questions, we just need product' aren't being investigated. It's the guys at the mouth of the pipe who read the UW guidelines, shrugged, and submitted.Why is the broker industry being closed rather than the wall street packagers being jailed?

To anyone outside the industry, this may seem confusing however the author is absolutely correct. I will get back to their thoughts in a minute. First, a lot of people ask me why banks are immune from things that brokers have to follow. A great example is the current use of YSP. Currently, a retail bank doesn't even disclose how much YSP they have made on a loan whereas it is there in black and white for the broker. There are one of two ways to look at this phenomenon. The first is that banks require hundreds of millions of dollars in capital and so Congress, erroneously, believes that they are trustworthy enough not to follow the same rules as brokers. The second reason is more realistic. They have a huge lobby. The reality is that banks have money and they have power so anytime Congress does anything the banks spring into action and more times than not they aren't affected. Brokers don't have the same kind of money and power. This is important because money, power and perception ultimately drive the narrative on the mortgage crisis and especially on this bill.

This brings me back to the comment. Before, I explain the comment let's take a quick history lesson into the evolution of the mortgage market. Way back when, if you wanted to buy a home, you had to have a minimum of twenty percent down. The mortgage market was revolutionized with the introduction and explosion of mortgage backed securities. This was documented in the book, Liar's Poker. By creating a secondary market for mortgages, the liquidity in the market exploded. In layman's terms, because banks had a whole new arena which loans could be taken off their hands (these new mortgage backed securities) they had a lot more money to give loans to people. While the market initially exploded and continued to be strong, its real explosion happened just as the refi boom was taking off and the housing market exploded a few years. Wall Street, through the securitization of thes mortgages, had an insatiable appetite for mortgage backed securities. Why wouldn't they? As housing prices rose almost non stop, these securities became a cash machine. As a result, Wall Street couldn't get enough of mortgage backed securities.

There was no loan that was out of bounds. I know this because 620, stated, stated, to 100% became the standard. What this means is a borrower with a 620 credit score (in the fifty percentile at best) stating (really meaning lying) their income and stating (certainly lying) about how much money in the bank. They did all of this while requiring that the borrower put absolutely nothing down. Since this was the industry standard, that could only mean that Wall Street created a market for it. Without Wall Street there is no market, and with no market this loan doesn't exist. Thus, ultimately it was Wall Street responsible for the ridiculously loose standards and the point of the comment.

The loose borrowing at the behest of Wall Street came to an end when the housing spike came to an end. Suddenly the bond traders noticed that the loans they had were full of borrowers that weren't paying back their mortgage. (these loans were being paid back while the market was hot through a very complicated set of events that I can explain however it will detract from the overall point so just take my word for it) Suddenly, mortgage backed securities went from heroes to zeroes nearly overnight. The most insidious part is that once Wall Street realized the mess that was created, with them in the middle, they washed their hands of mortgages entirely. The market dried up and banks could no longer sell their mortgages to Wall Street. That is the main reason why so many banks went out of business. They were holding onto way too many mortgages and couldn't sell them for anything but a huge loss.

Now, unlike what the commenter indicates, Congress has come out with punitive action in H.R. 3915 against Wall Street. It is not only vague but doesn't address the issue properly

the bill also bars any liability for "pools of loans" or "securitization vehicles". The critical language is buried in proposed Section 129B(d)(9). For most subprime mortgages, trusts, which are nothing more than pools of mortgage loans, are the entities that are the legal owners of the mortgage, and the only entity with any assets or ability to provide consumer redress. This is particularly true when the original lender has filed bankruptcy, as in the case of New Century and countless others.

This gets technical however what this bill does is promise to hold Wall Street responsible and ultimately let's them off the hook. Here is the important part. It doesn't much matter. Congress could outlaw mortgage backed securities entirely and no one would care. Wall Street has essentially done that themselves. If Congress wants to punish Wall Street for their role, they are a couple years too late. Wall Street has moved on to whatever is the chic investment of the day and that is no longer mortgage backed securities.

What is important is that no one outside the industry ever talks about Wall Street's crucial role in the whole mess. The entire blame is laid directly at the feet of the mortgage broker. Here is why. It is political suicide to blame the borrower. Imagine a politician actually having the gumption of accusing poor folks of being irresponsible and saying tough. What are the chances that politician gets re elected? Most politicians don't have the courage to take on the behemoth of the banks. Thus, no politician will ever say that the programs created were irresponsible. Instead, they will say that irresponsible brokers put borrowers into programs they couldn't afford, as if the broker came up with the program themselves. Finally, no politician knows or cares about the role of Wall Street. That would mean actually understanding the situation and if you understand the situation, you may not be able to demonize as well.

Finally, Congress would never blame itself even though they probably share the brunt of the responsibility. Does anyone know why it is so easy for a scummy mortgage broker to pull a fast one on unsuspecting borrowers? That's because the borrower is expected to sign almost one hundred separate documents. Those documents didn't just appear out of thin air. They were created in response to a plethora of prior legislation that was supposed to deal with whatever problem Congress deemed necessary at the time. It is really easy to hide a bad deal when there are ninety nine useless documents. Most people are not going to know which one is the important one.

Guess what, there is only one group left. It is a group with an awful reputation. It doesn't have a behemoth lobbying apparatus, and most politicians think that taking on the group will be something most people like.

The insidious nature of the bill is it has absolutely nothing to do with fixing any problems. All it does is pick good political targets and attacks them. Banks and borrowers aren't held responsible at all, even though there were plenty of irresponsible borrowers that got loans they knew they couldn't afford and plenty of banks willing to give them the loans. Furthermore, all this bill does is put unnecessary burden and tightening at a time in which I illustrated that the when the market has already severely tightened it on its own. Congress now wants to put in place all sorts of rules and regulations that ultimately will mean even less loans are approved at the exact time that less and less loans are being approved on their own. How does that make sense? They outlaw pre payment penalties even though it is exactly those types of loans that maybe the only choice for many borrowers. They outlaw YSP even though ultimately that produces less options for the consumer and the broker. Finally, they create all sorts of new vague language which will have the practical effect of meaning YOU HAVEN'T SIGNED ENOUGH PAPERWORK YET. I already showed how that played in the overall mess.

The industry along with good folks that actually care about good policy not just good politics can fight back. I hope everyone goes to this petition and also that they go here and write their Rep and tell them that it is time to make good policy and just policy that they think is good politics.

Kent Alexander: Power Broker (UPDATED)

There is a name that lurks behind the scenes in much of the scandal and corruption associated with Emory University and Grady Hospital and that person's name is Kent Alexander. It should be noted that there is little or no evidence ties Alexander to any wrongdoing on his own part. What is peculiar is how often he finds himself in the middle of scandal at Grady, Emory and beyond.

Kent Alexander first burst on the scene as the son of legendary Atlanta area attorney Miles Alexander. His first brush with fame came in the mysterious case of money laundering by BNL Savings, an Italian government run bank, to the government of Iraq on the eve of the first gulf war. The case is detailed in depth in the book, The Shell Game by Peter Mantius. At the time, Alexander was assistant U.S. Attorney for the Northern District of Georgia. He was the lead attorney for the U.S. on the case. At the time, King and Spaulding, arguably the most powerful and prestigious law firm in Atlanta, represented BNL. According to The Shell Game, Alexander met with an MI6 agent who told him of obscene amounts of corruption. The agent implicated the entire structure of the bank, and they claimed that for political reasons the intelligence apparatus of Italy, the U.S. and Britain looked the other way. The book claimed that the agent provided documentation of all the assertions.

For whatever reason, according to the book, Alexander left the meeting and decided to pin the entire scandal on the bank manager Christopher Drogoul who was in his twenties at the time. Drogoul was prosecuted and eventually convicted and upon his conviction the entire case was closed. This of course made the clients of King and Spaulding happy as well as the rest of the bank was spared prosecution. This was of course curious because of the sheer size and frequency of the crimes. This case also has some troubling parallels to another case I have referenced, State Senator Charles Walker. More than a decade later, while Alexander was now Emory General Counsel, State Senator Charles Walker was convicted of 127 felonies. He was the only one convicted and that case was also wrapped up after his conviction. Of course, it should be noted again that despite not flipping on anyone Walker received the outrageously light sentence of ten years for 127 felonies.

On the strength of the Drogoul along with other good deeds, Alexander was eventually promoted to U.S. Attorney a couple years later. (for reference this is the equivalent of posts once held by both Rudy Giuliani and Elliot Spitzer in their own districts) In the summer of 1996 Atlanta held the Olympics. The sad and ultimately tragic case of Richard Jewell is well documented and it doesn't need to be repeated. While the media has portrayed his role in the affair in a variety of ways, (he meaning Alexander himself) the facts stand out to me at least. He was the lead prosecutor. Jewell was under suspicion for almost ninety days and everyone agrees that ultimately there was absolutely no solid evidence against him.

About a year later, Alexander resigned from the U.S. Attorney's office. He landed on his feet with a cushy position with King and Spaulding. That would be the same King and Spaulding that was the fortuitous recepient of Alexander's narrow investigation of BNL. King and Spaulding is also the firm on retainer for one Emory University.

Alexander moved over to lead general counsel at Emory University in 2000. The two met each other at a fortuitous time because Grady, the hospital Emory helped run, was under investigation by the National Institute of Health. That investigation ultimately lead nowhere however four people that I have found were silenced with regards to the investigation: Dr. Sam Newcom, Dr. Jim Murtaugh, Dr. Diane Owens, and Dr. Jeffrey Sonnenfeld. Dr. Jim Murtaugh's case has recently had some new developments. Here is what State Senator David Shafer was able to recently discover.

Former Grady trustee Bill Loughrey tells me that the settlement with Dr. Murtagh was never approved or even accurately described to Grady’s board of trustees. He says that he was stunned to learn that tax dollars were paid to Dr. Murtagh, conditioned on his silence. He thinks the agreement is invalid and that the judicial process has been misused.

Let me explain for everyone. Dr. Jim Murtaugh settled with Emory University and Grady Hospital right around the time that this investigation was going on. He settled for roughly 1.6 million dollars and each side was under total communication lockdown. In fact, the lockdown was so extreme that even if either side was subpoened the court would need to be notified and there was time available for the subpoena to be quashed. This is of course important because it is very likely that Murtaugh had information relevant to the NIH investigation and this agreement allowed Grady and Emory stop Murtaugh from testifying. Furthermore, as lead counsel Alexander would be in control of the negotiations for his employer. He was in so much control that it is his signature next to Murtaugh's in the ultimate agreement.

Now, what Shafer is saying is that the board of trustees at Grady were never notified of the settlement. This is important because Grady is a public hospital and thus their portion of the settlement would then be tax payer money. As lead counsel, Alexander would be responsible for every bit of the agreement.

By 2004, Grady was again in the middle of another scandal. This one involved State Senator Charles Walker. Again, despite being convicted of 127 separate felonies, Walker was the only one charged and convicted in the case. Not only is it logical to think that it is impossible to commit this much crime on your own, one only needed to be in the courtroom hear of other's involvement. The lead prosecution witness, Joyce Harris, accused much of the higher ups at Grady of all sorts of wrong doing: from witness tampering, intimidation, and kickbacks. Despite it not only making no sense that one person could commit so much crime on their own, and having the star witness accuse others, somehow the powers that be wrapped up their investigation by only convicting Walker himself, and he got only ten years for all those counts.

Now, you might be saying well that's Grady and Alexander was employed by Emory. That is true however the entire Grady staff was Emory faculty and most of the Grady upper level management was also employed by Emory. Thus, while they may seem to be two separate entities to some they are in reality quite interlocked.

Alexander then resurfaces in the case of whistleblower, Kevin Kuritzky. Kuritzky was expelled several months after another investigation of Grady was completed. This one was done by the Center for Medicare and Medicaid Services of the Department Health and Human Services. The conclusion of that report was scathing.

an immediate and serious threat to the health and safety of the patients

is what HHS concluded. Emory maintained that Kuritzky was expelled for missing required clerkship training involving patient care, lying to his professors, and engaging in other unprofessional, dishonest and unethical conduct, while Kuritzky maintains that it was retaliation for blowing the whistle on many of the same type of practices mentioned in the report. While Emory outwardly maintains even today that his expulsion had nothing to do with any incendiary charges on his part, I have found an email from Alexander to the then assistant U.S. Attorney that indicates otherwise.

Amy (Amy Kamenshien then Assitant U.S. Attorney for the Northern District of Georgia) as you know we have had several discussions in the past regarding Dr. Murtaugh and his allegations regarding Emory/Grady. Recently he has had contact with former medical student Kevin Kuritzky. You may in the near future be hearing from Kuritzky or his attorneys and I would advise not pursuing it further. Hope all are keeping well,

Kent.

Clearly, Alexander expected that Kuritzky was going to say something and he moved to pre empt the investigation. Kuritzky ultimately ended up pursuing his case civilly and that is still pending.

Alexander had one more run in with Kuritzy of note. According to Kuritzky just as the legal process for his civil case was starting, (Before any formal paperwork was even filed) Alexander arranged a meeting between Kuritzky, his attorneys and Emory attorneys, headed up by Alexander of course, and finally a mediator. According to Kuritzky, at this meeting Alexander addressed Kuritzky in this manner,

if you pursue this further, we will smear you so badly that even North Korea won't touch you

According to Kuritzky this was said in front of his attorneys and the mediator who went to the third grade step of calling a timeout in its aftermath. The parties were separated into two different rooms so that everyone could cool down, however Alexander wasn't formally reprimanded for this statement.

The last notable moment in Alexander's tenure came last month when he responded to an Atlanta Journal Constitution editorial regarding unsealing the records of the Dr. Jim Murtaugh case. ( those records have been unsealed and of course I even referenced them earlier)

The AJC's Oct. 5 editorial "Come clean on lawsuit" resurrects (and misstates) old charges of conspiring to misuse government funds, charges the government reviewed seven years ago and declined to pursue. This has the devastating effect of casting public suspicion on two entities —- Grady Memorial Hospital and Emory University —- that are working together in an increasingly challenging environment to meet the health needs of the most vulnerable members of our society.

The editorial surprisingly calls on Emory and Grady to open the sealed settlement and court records in a case involving Dr. James Murtagh. For the record, Emory and Grady did not move to seal the record; Murtagh did. Emory had already supported unsealing the proceedings —- the complete, entire record —- as had Grady. We simply awaited the doctor and court's approval. Judge Wendy Shoob has since unsealed the record, which is now of course fully open to the public. The real victim in all of this is Grady, the largest public health hospital in the Southeast. Grady is struggling to survive while misinformation circulates that, unintentionally or intentionally, diverts attention from the real issues.

This statement is absurd on its face (and I should note never countered by the AJC). Murtaugh was paid a huge sum of money (1.6 million dollars) and then told to shut up. That is hush money. It is unlikely that he would be the one that would try and keep those records sealed. It was after all Emory and Grady that paid him not the other way around. They paid him and he was silenced. You do the math. Second, since he was silenced, making this bold face lie is easy since they know he is under order to remain quiet no matter what. Finally, while he was paid the money both parties agreed to a total media blackout. Again, I may not be an attorney however it appears to me that Alexander just violated the terms of the very agreement he helped broker.

The case of Kent Alexander is much like everything about Emory and Grady. There are more questions than answers. Did Alexander receive his cushy position from King and Spaulding as a result of his favorable prosecution in the BNL case? Did he use his influence to squash the NIH and Walker investigations? Did he knowingly violate the policy of the Grady Trustees when he entered into an agreement with Dr. Jim Murtaugh? Did he try to intimidate Kevin Kuritzky?

Only the powers that be know the answers to these questions, however I do know that Grady Hospital may collapse. I know that there needs to be a huge infusion of cash in order for it to survive, and it appears to me that the same people that put it into this position continue to call the shots. I know that if I were a tax payer that was ultimately flipping the bill I would want all of the questions I raised answered, under oath, by Alexander himself, before even one more dime went into Grady Hospital.

For further information on Kent Alexander and this scandal in its entirety, please follow this link to listen to my buddy Snooper discuss this matter further.

UPDATE:

For the most part, if you find your way to one of the stories regarding the Grady mess, you will likely get lost in its many mazes. I actually don't believe that this is one of them. I believe that this story speaks for itself, and no matter your incoming knowledge you should be able to follow. If not let me know. That said, you should also know how Alexander fits into the overall scheme of things. Thus, I have put together a summary of the entire fiasco that tries to put all of its moving parts together in one piece. Please read it for guidance. Also, please check out the recommendations that I and my colleagues have put together for fixing Grady Hospital.

The Politics of H.R. 3915

The likely political ramifications of this bill are probably none. I firmly believe that this bill will ultimately die a slow and terrible death however given the ineptitude of both parties, neither one will be able to use it to their advantage. Currently, the push back to this bill is reaching critical mass. The petition is up to nearly one hundred thousand signatures (more than double from last Friday). It is certainly by far the most popular topic this blog has every had. It has had a warm and passionate reception wherever I have presented it, and frankly once the industry is fully made aware of the bill we will push back and push back hard.

What will happen when every realtor, appraiser, title company, wholesale lender and most importantly borrower hears about this bill? We will reach critical mass that is what. Once that happens the bill will be pulled however it isn't enough. Brad Miller (D NC), Mel Watt (D NC), and Barney Frank (D MA) have shown me that they are not qualified to be legislators anymore.

They are the epitome of everything that is wrong with today's Congress. They are either too naive to realize the mess they will make or they show the height of political opportunism and hubris and creating a bill whose only purpose is to eliminate an entire industry through regulation. They believe that they can create a populist message that will pit them on the same side of poor borrowers against greedy despicable mortgage brokers. It is a common sales technique that I employ myself when I get on the same side of the table with my borrowers against the banks. It is a technique that can work only if the Republicans in Congress let it.

Again, this bill eliminates Yield Spread Premium (YSP). YSP is what the bank for the rate embedded in the loan. The higher the rate of course the bigger the YSP. These three want to eliminate YSP altogether as an option for mortgage brokers. Thus, the only way that a mortgage broker could make money is by charging extra fees or points. The inisidious part of the law again is that it only applies to brokers not banks. This gives banks an advantage that no broker could overcome. Here is how a fellow mortgage broker commented on it in my previous post.

I am a broker and the elimination of yield spread premium is the equivalent to Lowes or Home Depot adding no mark-up to me for tools or household goods in excess of their costs from the venders supplying them with these products. YSP embodies the very concept by which our economy is built, across the board for all industries in retail or wholesale. Why stop at mortgage originators, when we can just ask consumers to pay costs at all retail chains, with no regard to what ex. above, Lowes or Home Depot has to pay in expenses for location in order to make available the products that we need?

The fact of the matter is, the predatory lending percentage cap of 5 is the fail safe already put in place to govern this sort of inflation. It would only make sense to lower this cap across the board to 4 or even 3 halves, rather than another "knee jerk" reaction to loan defaults, which will ultimately clean the market out, by taking out the compensation methods allowing people to be experts in their respective industries.

The snow ball effect will be less available loans for lenders whom rely on the brokers spread out nationwide to feed loans to service with-out the overhead of branches etc.. When there are less loans available, there will be less borrowers. When there are less borrowers, there will be less sold homes. When there are less sold homes, there will be much less appreciation, making it increasingly less likely for the holder of a mortgage, to recoup the liability left behind by foreclosure's. Shall I continue? Great bill, they really put a lot of thought into that one!

He is absolutely right on all counts however there is one thing that he left out. Millions of borrowers have benefited from YSP and they don't even know it. I just closed a loan for a borrower that saved them over one hundred dollars a month in payments and I paid for all of the closing costs. I did this because they plan on selling their home within a year. It makes no sense for them to pay for any costs if they are going to sell in that time frame, however this way they enjoy healthy savings and pay no needless costs. I was able to do this because of YSP. There are millions of such borrowers out there who benefitted from the use of YSP. They just need to be made aware of how they benefitted and what this bill plans on doing. My own borrower happily not only signed this petition but emailed their story to their Representative.

The pols pushing this bill are counting on people not understanding the specifics of the loan. They are counting on people seeing this as a punishment to mortgage brokers who many blame for the mortgage crisis. Most folks already have first hand knowledge of how this bill would negatively affect them they just don't know it. If the Reps merely educate the public on the specifics of the bill, the bill, its sponsors, and its sponsoring party will be exposed.

There are millions such folks out there and the industry will get the word to them. That will almost certainly be enough to kill the bill however the industry isn't going to do the politicians dirty work. If the Reps want to make political hay out of this bill, all they need is a bit of political cajones, mortgage knowledge, and media savvy. We all remember Graeme Frost. The Democrats put him up to plead with the President to approve the Dem's version of SCHIP. The politics of the matter worked and every poll says so. The Reps can do something very similar with H.R. 3915. Humor me for a minute as my borrower tells her story without using her name of course.

Hello,

I wanted to have your attention and tell you my story because I have first hand knowledge with Yield Spread Premium. Currently, a number of Democrats are trying to propose a bill that will eliminate my mortgage broker's ability to charge me YSP. While this sounds like a good idea, I have first hand knowledge of how YSP benefits me. A few years ago I got into a bit of financial trouble and missed a mortgage payment. In the aftermath, I had to refinance to pay off bills and past due taxes and was forced to take a rate higher than I liked.

I have since gotten my finances in order and have been perfect with all my payments for well over a year. I am about to get married and I am looking to sell my home within a year. Knowing all of this my mortgage broker was still able to find me a loan that benefitted me even with my short time frame. Because my credit is much improved he was able to lower my payment by over one hundred dollars a month AND pay for my closing costs. By doing this I not only enjoy monthly savings at a time when I have much more important places for the money, but I paid absolutely no costs to do it. That is important because paying costs makes no financial sense if I do sell within a year. My broker was able to do this because of YSP. He was able to increase the rate enough that not only was I still saving over one hundred dollars a month, but the YSP paid for my costs. Please don't let the Democrats take away this ability. It helped me and it helps millions of others get the mortgages they want and need.

The beauty about this story is that I have hundreds and every other mortgage broker has hundreds and the borrowers are of all shapes and sizes. I use YSP for just about every borrower from the most wealthy to those that aren't so wealthy, young and old, urban and suburban, the use of YSP is critical to my business. It is a tool that helps borrowers pay less fees or no fees, and that helps all borrowers. All politicians need to do is find anyone of millions of borrowers who benefitted, unknowingly usually, from YSP and employ them in a sophisticated media campaign.

The Democrats shamelessly employed little kids to make political hay of SCHIP, and now the Reps have a similar opportunity to make the same kind of hay against an atrocious bill. The reality is that the more that people know about this bill the less they will like. Coming out firmly against this bill will work not only on a rational level but an emotional one as well. How many borrowers are there who are struggling to make ends meet who had their closing costs lowered or eliminated through the use of YSP. Millions, that is how many. They don't know it yet, but they will if someone seeks them out. I have several hundred if a Pol ever wants any references.

The industry is universally against this. Here is a piece of an email I just received (email sorry no link)

Mortgage brokers may be facing extinction. The U.S. House of Representatives Financial Services Committee is considering a bill that will fundamentally change the way we are paid. While we agree that consumers should not be steered into a particular loan, the bill leaves unclear whether consumers can finance their origination fees and other costs inside the interest rate. Therefore, it is unclear whether you can be paid YSP. Additionally, we fear that all subprime lending will cease to exist due to the increased scope of the high-cost mortgages section (Title III) of this bill.

We are calling upon our members to respond as never before. To save our industry, we are asking you to IMMEDIATELY contact your Congressman.

TIME IS CRITICAL. The bill became public last week. We have been working with Congressional offices in good faith, but our concerns have not been fully addressed in the newly, revised version released just hours earlier today. The U.S. House of Representatives Financial Services Committee will be debating and voting on this bill on the morning of Tuesday, November 6, 2007.

YOU MUST ACT NOW.

We are ready and we are serious. All we are looking for is political allies, and for those allies we have millions of stories of regular folks who were helped by YSP. Folks that would pull at heart strings just as well as Graeme Frost and they will all expose these three Congressmen (Watts, Frank, and Miller) as well as their entire party for the totalitarian, demagoguing opportunists that they are.

Senator Durbin responds vis a vis the DREAM Act

This email I received from Senator Durbin gives a window into the philosophy of those that put illegal immigration and the rule of law behind compassion.

Thank you for contacting me about the Development, Relief, and Education
for Alien Minors (DREAM) Act. I appreciate hearing from
you.

The DREAM Act, which I first introduced with bipartisan support in 2003, would provide permanent residence to undocumented young people who have proven their desire to fulfill the American dream.

These young people were brought to the United States as children, when they did not have the independence to make choices on their own. Often, these young people did not discover until much later that the decisions made by their parents left them without a country to call their own. Since arriving here they have attended school, learned English, contributed to their communities, and want to be productive members of our society.

There is currently no way for these deserving young people to legally earn U.S. permanent residence or citizenship. The DREAM Act simply provides them with that opportunity. In return, the bill requires that these young people prove themselves by satisfying several requirements, all of which must be verified by appropriate documentation.

In order to qualify for residency under the DREAM Act, these members of our communities must have come to our country before the age of 16 and must have lived here for at least five years before the bill becomes law. They must refrain from criminal or immoral behavior, and they must have earned a high school degree. Most importantly, they must either complete two years of college or serve at least two years in the military.

I believe our country would benefit greatly if young people who meet these conditions are given the chance to become U.S. citizens.

The DREAM Act would help our military, which faces a serious recruitment crisis. Under the DREAM Act, tens of thousands of well-qualified potential recruits would become eligible for military service. Defense Department officials have said that the DREAM Act is "very appealing" to the military because it would apply to the "cream of the crop" of students. They have concluded that the DREAM Act would be
good for readiness.

For those who pursue college, the DREAM Act provides the opportunity to become an American scientist, nurse, teacher, engineer, or an American in any other profession that requires a college education. Since 2003, we have watched intelligent, ambitious students graduate from high school only to end up in low-wage undocumented jobs because they cannot attend college or work legally. As a result, the United States loses future leaders and social vibrancy as well as tax revenue and economic growth.

I understand the concerns some have about the expense of the DREAM Act. This bill does not provide free financial aid to any individual. Although an earlier version of the DREAM Act allowed states to decide whether their undocumented students should be eligible for in-state tuition, that provision was later removed. I have led the effort in Congress to make college more affordable for middle-class families, and I will continue to support such efforts.

Some opponents of this legislation suggest that it would encourage illegal immigration or that it would provide amnesty to illegal immigrants. This is not the case. Applicants are required to have already been in the country for at least five years before enactment of the DREAM Act. Furthermore, family members of DREAM Act applicants would remain ineligible for legal status.

I have consistently supported efforts to deter illegal immigration. Soon after the debate on immigration reform, I voted in favor of a Homeland Security Appropriations bill that included $3 billion in emergency funding to ensure quick implementation of the bill's border security provisions. The fact remains, however, that the United States can benefit from the contributions of thousands of hardworking, upstanding young people who have proven themselves and who want to live and uphold the American Dream.

In October 2007, the DREAM Act was brought to the floor of the Senate. Although 52 senators - including 11 members of the minority - voted to end a filibuster on the bill, 60 votes were needed to proceed to a final vote. As a result, the DREAM Act did not receive final consideration.

There is no doubt that our current immigration system must be reformed. We need reforms that are tough and enforceable but also fair and consistent with our nation's values. I will continue to support legislation, such as broader enforcement and the DREAM Act, that advances us toward these goals.

I hope this letter helps you better understand my support for the DREAM Act. Thank you again for your message.

There is all sorts of equivocation, rationalization and out and out nonsense all throughout this email. Frankly, Durbin said nothing that I didn't expect him to say and so the email is instructive of the belief system of those that don't treat illegal immigration with any seriousness. As I predicted, Durbin appeals to our basest emotion. He wants everyone to have compassion for law breakers. Durbin is absolutely right that this bill only pertains to children of illegals. They had no decision in coming over the border illegally, and for this reason we should have mercy on them and allow them to stay.

The problem is that illegal immigration works much like Pavlov and his mice. If you reward illegal immigration, you encourage more of it. This may not be compassionate and it may win me no friends in certain circles, however it is the reality. While I have sympathy for the folks covered under the DREAM Act, I cannot allow for them to get blanket amnesty. By doing so, more illegals will be encouraged to cross the border in hopes that their children will also be given amnesty. While it may play well politically for Durbin to stand up for the little guy, and it may even open up a new voting block, what it won't do is create good policy.

His reasons for why this won't encourage more illegal immigration do not work for me and here is why. While it is true that they encourage people to be good citizens, it still encourages them to come here illegally and then be good citizens nonetheless. The goal is to end illegal immigration, not merely limit it to illegals that are good citizens.

He goes onto claim that he is in favor of tough enforcement and I guess I am supposed to be impressed because he favored a bill that is one third the net worth of George Soros. I am not. So far the only thing I see is him giving a pathway to citizenship to millions of illegals. Anyone that commits to a pathway to citizenship for illegals before the border is secured is not serious about stopping the flow of illegals.

He even goes so far as to claim this bill will help our military. That is the height of hubris. I don't know if this is true and I don't care, because I know that we should be able to build a successful military without legalizing millions of illegals.

What Durbin does is what many who support illegal immigration do. First, he never refers to them as illegals. In this case, they are undocumented. Second, he appeals to the basest emotion, in this case empathy. Third, he lists all of the potential benefits without once addressing any problems. The fact that illegal immigration may have benefits is beside the point. Our country thrived long before a plethora of illegals filtered into our nation. It is ludicrous and insulting to suggest that there are benefits to illegal immigration. There are benefits to all sorts of things that ultimately have a lot more negatives. Hillary Clinton's baby bond idea also has benefits and it doesn't make it any less of a ridiculous idea.

Ultimately, politicians have to decide if they are serious about illegal immigration or if they are pretending. Durbin has decided to pay lip service and it is shameful.

Congress Vs. Mortgage Brokers: Follow Up on 3915

I am fully confident that this catastrophe of a proposal will be defeated. I believe we are on the verge of reaching critical mass. The petition that I discovered only last Friday has nearly doubled in signatures from 40k to almost 80k over the weekend. It isn't enough though. For Congress to take it seriously it needs to reach more than one million. Here are the particulars again of the bill.

Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.


Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.


Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lender liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.

Now, let's take these one at a time. I have already stated that outlawing Yield Spread Premium (YSP) will end the industry of mortgage brokers and it will. If we are unable to make money from YSP then we will have to charge everything in fees. Keep in mind this law only applies to mortgage brokers. WAMU and other banks are exempt from this law. This gives them a competitive advantage that is impossible to overcome.It really goes beyond that. When has Congress ever regulated someone' s ability to make money. That is what Congress is doing with Title 1. They are telling the mortgage industry how they can and can't make money. This is unprecedented and dangerous.



Title 2 ranges from vague to ludicrous. ALL BANKS ALWAYS count taxes and insurance within their ratios. Thus, this part only makes me scratch my head. As for the rest, well it is vague and what that means is extra paperwork to sign at closing. Anytime, any politician comes up with a vague law vis a vis my industry the practical effect is more paperwork to sign.

Witht Title 3, the pols give their intentions away. They have already outlawed YSP. Now, they want to limit the amount of fees I can charge at closing. Thus, I can't make any money in Yield Spread and I am limited in how much money I can make in fees. There is only one way to read this bill. The politicians have people like me in their cross hairs and they have decided it is politically advantageous to get rid of me altogether.

The ramifications of this are huge. This will not only end the mortgage broker as we know it, but it will devastate everyone that relies on us. Appraisers, realtors, and title companies will all be affected. Wholesale banks will also be devastated. (Wholesale is when a bank goes through a broker whereas retail is when you go to a branch and do your business directly with the bank) Furthermore, everyone that provides us with technology will also be devastated. For instance, I use a company called Calyx Point for all my administrative software needs (pulling credit, filling out the application, and managing my leads and borrowers). They, along with all their competitors, will also be devastated.

Finally, this insidious law DOESN'T apply to banks. In other words, if you go to your local WAMU branch, they don't have to follow any of this. This will mean that retail ends of banks will now have free reign with little or no competition. I have already pointed out the corrosive effect of the cartel nature of the oil companies. The banking industry has similar barriers to entry with a similar number of players.

Anyone who has ever dealt with a bank before for their mortgage has likely felt as though they go on a power trip during the underwriting process. You have probably been asked for a mountain of paperwork and many times asked for mountains more several times over. This will only get worse when the banks know they have no competition. Without mortgage brokers, you, the borrower, will have to be the mortgage broker. I can always pull a loan and go elsewhere, however once a borrower deals with one bank that process is much more difficult. In order to start again, they would have to call around and find another bank willing to do their loan. Then, the process would start again and there would be no guarantee of being treated any better.

Finally, this bill is anti capitalist and totalitarian. What if you owned a restaurant and the government told you what you could and couldn't serve on your menu? What if you owned a radio station and the government told you what songs you could and couldn't play? What if you were a doctor and the government told you how to operate on your patients? That is the equivalent of what this bill does. It sets underwriting guidelines and tells us what we can and can't charge. If Congress succeeds in ending this industry who is next: used car salesman, contractors, insurance agents, or maybe just maybe your industry? This is the sort of thing that happened in the Soviet Union, Venezuela and in Cuba. It isn't supposed to happen in America.

There is one more insidious group that everyone must be aware of. That is the banks themselves. They are all for this law and why wouldn't they be. Their retail divisions would flourish without the nuisance of competition from wholesale once mortgage brokers are eliminated. Here is why they are so insidious. Most of them have wholesale divisions. That is millions of workers: account reps, underwriters,