Why You Can’t Believe Government Statistics; Part 1– The Real Unemployment Rate is 16.4%

August 18, 2008

The latest jobless report out for May 2009 says the unemployment rate surged to 9.4, its highest rate in years.  While that sounds bad, the reality is far worse.

United States Government uses the most dishonest statistical skullduggery to calculate the official “Unemployment Rate.” Lying with statistics is easy. It is not how you count; it’s how you define what to count, and over the years both political parties have used this trickery.

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Countrywide Cashing in on Surprising Group of Homeowners

August 15, 2008

Hurricane VictimsAs the foreclosure crisis tightens its grip on most of the country, a surprising part of the United States is experiencing the opposite of declining property values.  Louisiana and Texas, still recovering from the ravages of Hurricanes Katrina and Rita, are displaying a remarkable rebound in the housing market. 

The West South Central region is the only part of the country that reported an increase in housing prices for the first quarter of 2008, according to the latest report by the Office of Federal Housing Enterprise Oversight.  Texas showed a 4.7% increase in housing values and Louisiana a 3.3% increase.

Hurricane Victims Targets for Foreclosure

While that sounds like good news, it’s actually making hurricane victims targets for foreclosure. “They’re trying to steal my home,” said Hurricane Rita victim and Countrywide borrower Derrick Haley.  Haley’s Lake Charles home was severely damaged by Hurricane Rita in September of 2005.  Shortly after the storm, Countrywide Home Loans enacted what they called a “Hurricane Relief Program.” 

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The Hidden Monster

August 11, 2008

Already burdened with mounting educational loan debts, students increasingly find themselves the targets of sordid marketing practices. Sometimes the perpetrators are caught, but what about the ogre lurking in the wings?

We’ve exposed the manner in which colleges have partnered with credit card giants to take advantage of their students for their own profit. In yet another example, companies who provide consolidation loans (combining several student loans into one large loan) entered into agreements with many colleges to market their consolidation loans to students, using the logos and mascots of the college to convince students that these consolidation loans carried the blessing of their college.

Student Financial Services (SFS), a Florida company, was forced last year by state prosecutors to cease its deceptive marketing practice and end its contractual arrangements with 63 colleges, including Florida Atlantic and the University of South Florida. SFS had been paying up front fees and kickbacks for each funded loan application at many of these colleges.

Did your college sell you out?

What did the Schools get out of the deals?

What did SFS get out of the deals?

But where did it find the money to fund its deceptive practices? Lurking in the background was Sallie Mae, the nation’s largest student loan company. When Sallie Mae found that it was losing money to these consolidation loans (lost fees and interest payments), it decided to get into the game itself. If you can’t beat ’em, join ’em. In 2006 it bought $3.6 billion worth of consolidation debts. In 2007, Sallie Mae gave SFS a $30 million line of credit designed to “encourage” further “lending activities” by SFS.

So SFS got spanked by state prosecutors for its deceptive practices, but Sallie Mae gets off scott free? Sound familiar? Unscrupulous lenders helped bring on the sub-prime mortgage crisis, but it was the big money players behind the curtain, like Fannie Mae and Bear Stearns, who fueled the crisis with bags of money, presumably never bothering to check into the lending practices that foretold doom. The hidden monster just sits back and waits for the next taxpayer bailout.

Short Sale – Not As Easy As It Sounds

August 8, 2008

Courtesy ABC News“Short sales” of homes are great deals, right? Well, not always.

A “short sale” is a desperate act by a seller that also requires a bank to accept some misery. The seller paid more for the home and the bank lent more than what the property is now worth. The seller is desperately trying to avoid foreclosure and hopes the bank will agree to cut its losses and accept less than what is owed on its mortgage. The buyer hopes to grab the property at a bargain.  That might be wishful thinking. It sometimes happens, but not without patience and not at the bargain basement price the buyer typically expects.

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Skyrocketing Price of Platinum Causing Skyrocketing Theft of Catalytic Converters

August 5, 2008

Catalytic ConverterIn 2008 the theft of catalytic converters has been increasing at an alarming rate. Catalytic converters have been standard equipment on cars since the 70’s. Today some vehicles have as many as four converters. So why the sudden increase in theft? The answer is the price of platinum.

Five years ago platinum was going for about $600 per ounce. In 2008 the price of platinum soared to $2,200 per ounce and now stands around $1,700 per ounce – and there is platinum in that converter. In fact there is enough platinum to make each stolen converter worth as much as $200 on the black market.

An experienced thief can remove a converter in less than 2 minutes. Unfortunately, the repair cost to the owner can run as high as $1,000 depending on how much damage was caused during the theft. The converters are usually sawed off with a battery powered saw. Bold thieves do not even bother to steal the car, but actually crawl under vehicles that are parked in remote lots and begin sawing.

The AAA reports that sport-utility vehicles and pickup trucks are the prime targets. SUVs and pickups are higher off the ground, so it is easier to crawl under them to cut off the converters. Criminals tend to be lazy types. Catalytic Converter stolenToyota 4Runners are particular targets because a thief can remove the converter with just a socket wrench, and their converters contain plenty of platinum.

There are products on the market that make it more difficult to steal a converter, such as the CatClamp. However, the price of the protective cage goes for around $225. The best protection is to avoid remote parking lots. However, the permanent solution will come from the automobile industry. Collectively automakers spent about $2 billion dollars a year on platinum and in an effort to cut costs are searching for ways to reduce the need for platinum. Mazda has created a catalytic converter that uses 70 to 90 percent less platinum making the converter worthless on the black market.