Legislator enlists Bartlett for natural resources protection

[It’s been obvious to many for a long time that a natural alliance would form between Ecological and Peak Oil interests. That it’s manifest in the House of Representatives is a great thing. – MCR]

by Tom Howell Jr.
Capital News Service
Frederick News Post
Thursday, March 9, 2006 P. A7

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

WASHINGTON - Federal lawmakers' reluctance to adopt new ocean policy "simply has to change" through increased awareness and collaboration, Maryland Rep. Wayne Gilchrest told an ocean research group Wednesday.

To illustrate his point, Mr. Gilchrest, R-Kennedyville, told the Consortium for Oceanographic Research and Education he is joining Rep. Roscoe Bartlett, RFrederick, to make a presentation to the House of Representatives on how energy policy affects natural resources and global change.

"One person's opinion is not going to preside and make public policy," he said. "It's a blending of ideas."

Mr. Gilchrest has numerous concerns about the state of the world's oceans. Population increases near the coasts cause nutrient runoff, while climate change from global warming causes temperature-sensitive fish to move away from the coast and deplete seabirds' food source.

Warming waters also disrupt the Gulf Stream. Proper balance is needed in the stream to prevent freezing temperatures in places like the northeastern United States and London.

The problem is Washington lawmakers are often too busy with Iraq or Medicare Part D to focus on oceans, Mr. Gilchrest said. His resolution to establish the Task Force on Ocean Policy was shot down in the House, he said, after lawmakers did not like some of Mr. Gilchrest's votes on an endangered species bill and other legislation. The task force would have reviewed the final report of the United States Commission on Ocean Policy, entitled "An Ocean Blueprint for the 21st Century."

Mr. Gilchrest referred to the situation as a "political vortex" where other members exacted revenge.

Mr. Gilchrest found a shooting partner in Mr. Bartlett, who often speaks about "peak oil," or the belief that petroleum production has peaked and a drastic new energy plan of "man on the moon" proportions is needed. Lisa Wright, press secretary for Mr. Bartlett, said Mr. Gilchrest has backed Mr. Bartlett's oil concerns for years and participated in a number of Mr. Bartlett's House floor speeches on the topic.

The two congressmen recently met with the Natural Resources Defense Council to discuss global warming, a topic that couples Mr. Gilchrest's ocean and energy bills with Mr. Bartlett's peak oil legislation, Mr. Gilchrest said.

The congressmen's staffs will pool research to prepare a onehour presentation on the House floor, Mr. Gilchrest said. They want to establish global warming as a real problem and address it through alternative energy sources and increased efficiency to reduce carbon dioxide and dependency on foreign oil.

Human activity, Mr. Gilchrest told the consortium, has mostly impacted the world's water resources in a negative and degrading way. But policy makers pay little attention to the oceans that cover two-thirds of the world and provide some of the air we breathe, he said.

"Expressing this to my colleagues here in Washington is difficult, but not impossible," he said.

Mr. Gilchrest struck a light, but contemplative tone at the podium after a speaker who expounded on line-items in ocean policy budgets. Preservation of global resources would allow people to enjoy nature's design, Mr. Gilchrest said, something he does frequently in his canoe back home.

A nature trip in Kennedyville would be ideal for the consortium's next meeting, he quipped.

"I can probably get canoes for everybody," he said, smiling. "We can meet for 10 minutes going down the Sassafras River."

[It seems to me that the more different think tanks (with clear agendas) try to hype the war/attack frenzy against Iran the weaker they look. – MCR]

Former Chief of Staff, Moshe (Bogi) Ya'alon says that Israel has a military option against Iran's nuclear program and that it should not take it out of consideration. In a speech at the Hudson Institute - a Washington think tank - this Tuesday, Ya'alon gave a rare detailed description of Israel's military possibilities regarding Iran. He acknowledged the fact that Iran has its nuclear programs spread out in many sites and said that Israel can overcome the Iranian air defense system and carry out air strikes against several dozen sites which are used for the nuclear development project.

According to Ya'alon, who is now a visiting fellow at the Washington Institute for Near East Policy, an attack against Iran's nuclear facilities should include not only the Israeli air force, but also air forces of the US and European countries and should take place only after Iran is isolated internationally both economically and diplomatically.

Ya'alon stressed in his speech that such air strikes against Iran, will not completely destroy the Iranian nuclear program, but can set it back several years. The former chief of staff predicts that, if not dealt with, Iran is only 6 to 18 months away from achieving the nuclear know-how and 3-5 years from acquiring a nuclear bomb.

The issue of an Israeli air strike against Iran's nuclear sites has been discussed many times in the past and was largely seen as impractical because the facilities Iran uses are spread out all over the country.

Ya'alon, in his speech at the Hudson Institute, said that striking a nuclear facility in Iran is no more difficult than targeting a terror suspect in the territories as Israeli air force has been doing for the past five years.

The former Chief of Staff did acknowledge the fact that any Israeli strike against Iran would lead to a harsh retaliation against Israel. He said that might try launching missiles from its own territory towards Israel or to use the Hizbullah in Lebanon and the Hamas in Gaza in order to fire rockets into Israel. Yet Ya'alon added that Israel can withstand such an attack, thanks to its effective anti-missile systems.

[Just a reminder that all financial markets are rigged and manipulated. There's no longer any direct connection between a rise in the DOW (or any other index) and the way your life feels and works. Inflation figures have been rigged since "core" inflation numbers now exclude energy and food costs. So it's almost like the players in the markets (with institutional investors as the audience) are just doing dog and pony shows for each others' benefit.

Only occasionally do these little tidbits leak out in obscure under-emphasized back pages. FTW continues to thank GATA for being a great scout. – MCR]

The Financial Services Agency ordered the Japan unit of J.P. Morgan Securities Asia Pte. Ltd. on Thursday to suspend part of its operations for five to 15 business days for manipulating the value of a Tokyo Stock Exchange futures index with a massive sum of "cross trades" on Nov. 4, 2004.

The order, which will go into force on Friday, was issued to discipline J.P. Morgan Securities Asia Pte. Ltd., Tokyo Branch, for the trades which contravened Article 42 of the Securities and Exchange Law, the governmental regulator said.

A J.P. Morgan trader placed a total of 15 selling and buying orders for the futures index at the same values, making the opposite orders match and guiding the index's values artificially at levels that do not mirror the market's actual conditions, the FSA said.

The trader, who put the series of orders in over a period of about 70 minutes from 1:57 p.m., was found not to have had any intention to transfer ownership rights among market participants when implementing the fraudulent deals, it said.

In addition, the Japanese arm of J.P. Morgan misled an institutional investor in November 2004 by failing to provide the investor with value appraisal reports on real estate used as underlying assets for asset-backed securities for which it was acting as a sales intermediary, the regulator said.

Besides this, the branch, brushing aside the doubts expressed by the investor on the reality of the assessments, handed over to the investor a separate set of appraisal reports at which the value of the real estate had not been written down to reflect real market conditions, it said.

The FSA imposed the disciplinary order in light of a recommendation by the Securities and Exchange Surveillance Commission to impose punitive measures on the brokerage.

The regulatory authorities slapped the company with a similar penalty in 2003 for market manipulation.

Risky borrowing is catching up with a number of homeowners across the U.S. Foreclosures rose 45% in January compared to a year ago, and experts only expect the pace to accelerate.

The number of homes entering some stage of foreclosure -- from notice of default to bank ownership -- increased 45% in January from the same period a year earlier, according to Irvine, Calif.-based RealtyTrac. That was one new foreclosure for every 1,117 U.S. households.

The number of foreclosures is still low on a historical basis, but it has been rising steadily over the past year, RealtyTrac reported. Job losses in some regions were to blame, but so, too, were risky borrowing practices that left homeowners little wiggle room on their mortgage payments. And with the pace of appreciation stalling and interest rates rising, many economists and industry observers expect the pace of foreclosures to accelerate this year.

Georgia leads the pack
The areas of the country with the highest foreclosure rates on a per capita basis were Georgia, Nevada and Colorado.

One out of every 422 households was in some stage of foreclosure in Georgia in January -- an 88% jump from the previous year. Georgia also came in at No. 5 for the highest total number of foreclosures.
Nevada was second, with 1,795 properties entering foreclosure; 2 1/2 times the number reported the year before and one for every 483 households.
Colorado came in at No. 3, with a 36% rise to 3,747 properties, or one in every 488 households.

Economists speculated that lost jobs in and around the Atlanta and Denver areas were the main culprits. Realtors say the hardest-hit areas appear to be houses in lower-income urban neighborhoods.

“There are definitely more foreclosures out there,” said Duane Duffy of Metro Brokers Duffy & Associates in Littleton, Colo. Indeed, when Duffy recently took a client looking at homes in southwest Denver, “one out of every four homes we were looking at seemed to be a foreclosure.” But, foreclosures, he said, are becoming much more commonplace across Denver County.

The states with the largest total number of foreclosures were Texas, with 14,669 foreclosures; Florida, with 10,334; and California, with 9,354.

In many cases, the high number was a factor of the large population, and not an indicator of a greater percentage of people getting in over their heads. In California, for example, where the number of properties entering some stage of foreclosure reached 9,354 in January, the rate at which homeowners were defaulting was still below the national average.

Rising rates squeeze already-stretched borrowers
Typically, analysts say, it’s a job loss or loss of income from a household breadwinner that drives defaults. But rising interest rates are also beginning to play a role.

“You have a lot of people who stretched to get into a house,” said John Tuccillo of Arlington, Va.-based real estate consulting firm JTA Inc.

In the last few years, many buyers took out interest-only, variable-rate loans, and in some cases put no money down to afford a house, said Frank Nothaft, chief economist with government-chartered mortgage giant Freddie Mac. He estimates one out of every three loans issued in 2005 was an adjustable rate mortgage. Now that we’ve seen 14 consecutive interest-rate increases since June 30, 2004, many of these loan rates are bumping up, increasing the size of mortgage payments.

Nothaft estimates that $500 billion in variable rate mortgages will reset, or rise, sometime this year, leaving many with a payment they can no longer afford. “Those would be the candidates for … delinquent status,” he said.

Foreclosures had been at historic lows in the past three years as rapidly appreciating home prices gave financially strapped owners the option to refinance, sell their house at a profit or take out a cheap home equity line of credit. But with the pace of appreciation slowing in many markets and interest rates rising, for many, these avenues have been cut off.

“You’re really out of options,” said Susan Wachter, professor of real estate at the Wharton School at the University of Pennsylvania.

Silver lining for buyers
In the months ahead, analysts expect delinquencies to rise, putting a greater number of these foreclosures on the market for buyers to choose from. That’s bad news for owners who live in these areas, analysts say, because rising foreclosure rates typically mean falling home prices.

But it’s good news for buyers looking for some relief from the high prices of the last several years. In addition to driving neighboring home values down, foreclosures themselves tend to sell at a discount to the market, said Rick Sharga, vice president of marketing for RealtyTrac. Typically, Sharga says, buyers can shave 10% to 30% off the market price with a foreclosed home, depending on demand.

The best deals can usually be negotiated with an owner, when a property is in default, but hasn’t been put up for auction or turned over to the bank.

“Sometimes you can negotiate both ends, with the property owner and the bank,” Sharga said.

Risky business
But foreclosures don’t always mean bargain-basement prices.

“In a hot real estate market, I have seen properties sold out of foreclosure for more than the estimated market value,” Sharga said.

And there are more drawbacks and risks to buying property at auction. First of all, most buyers will need to come up with 100% of the purchase price on the day following the auction. Second, many times a property can’t be fully inspected, and in some states, the previous owner has the right to buy it back for what you paid within a certain period.

“Like any other investment, the higher the reward, the higher the level of risk,” Sharga said.

Real estate economist Tuccillo recommends that buyers educate themselves about the foreclosure process now, so they can be ready to move when they see something they like. “Start doing a lot of research and monitoring of those markets now,” Tuccillo said. With interest rates expected to rise 3/4 of a point to a point this year, “In six months, you will be able to do more picking and choosing.”

And remember, Sharga said, sometimes these properties are in trouble for a reason, whether it’s a problem with the neighborhood, or a problem with the foundation.