Signs of the Times (2/10/12)

$25 Billion Mortgage Fraud Settlement Reached

After nearly a year of negotiations, federal and state officials and five major mortgage servicers have announced a $25 billion settlement over alleged past foreclosure and mortgage loan-servicing abuses. In addition to the federal government, all the states, except Oklahoma. are part of the agreement. Oklahoma reached its own settlement. The five servicers are Bank of America, JPMorgan Chase, Citibank, Wells Fargo and Ally Financial. Smaller ones are expected to join later. Officials estimate the deal could grow to $30 billion if the next nine largest servicers join the agreement. Servicers will be more restricted in their ability to carry out a foreclosure while someone is pursuing a loan modification. They will also be expected to adhere to more consistent time frames. Nearly two million Americans could benefit from mortgage relief

At least $10 billion will be used to reduce the principal on loans for borrowers who are either delinquent or at imminent risk of default and are underwater — meaning they owe more on their mortgages than their homes are worth; at least $3 billion will go for refinancing loans for borrowers current on their mortgages and underwater; Up to $7 billion will go toward other kinds of assistance, including forbearance of principal for unemployed borrowers, anti-blight programs and short sales. Conservatives called it overreaching on the part of the Obama administration, and say it rewards homeowners who haven’t been paying their home loans.

Obama Give 10 States a Pass on No Child Left Behind Deadline

President Obama gave 10 states a pass regarding an approaching deadline under the No Child Left Behind law, after the states struggled to meet the proficiency standards for reading and math. The executive action will circumvent Congress, which has been stuck on how to rewrite the law. The 10 states will receive “flexibility” allowing them to miss 2014 targets for student proficiency. The executive action by Obama is one of his most prominent in an ongoing campaign to act on his own where Congress is rebuffing him. The move also reflects the sobering reality that the United States is not close to the law’s original goal: getting children to grade level in reading and math.

Nuclear Agency Approves First Reactor Since 1978

The Nuclear Regulatory Commission approved the nation’s first nuclear power plant in a generation on Thursday, clearing the way for Atlanta-based Southern Co. to build two reactors at its Plant Vogtle site near Augusta. It’s the first approval since 1978, the year before the Three Mile Island accident in Pennsylvania. Some residents of the communities near Plant Vogtle, who maintain that some cancers have increased since 1987, when Southern opened the first of two existing reactors, were dismayed. Nine environmental groups plan a challenge in federal court in Washington. The groups say that the approval process was rushed and that regulators failed to incorporate lessons from Japan’s accident.

One in Five Americans Receiving Federal Assistance

A new study finds more Americans than ever before are dependent on the federal government for financial assistance. The Heritage Foundation’s “Index of Dependence on Government” also finds that the average American relying on federal government assistance receives $300 more in benefits ($32,748) annually than the average American’s disposable personal income ($32,446). William Beach of The Heritage Foundation’s Center for Data Analysis reports, “We now have 67 million Americans who are getting significant aid from the government for their housing or their food or their income support or their healthcare or their education — or all five put together, That’s one out of every five Americans.” Beach also points out that while the number of Americans receiving federal aid rises, the number of federal taxpayers continues to drop, with nearly half of Americans (49.5 percent) not paying any federal income taxes. Unless significant steps are taken to cut debt, reduce spending, and restore prosperity, Beach warns this unsustainable fiscal model will collapse.

Americans’ Trans Fat Levels Decline

Years of warnings about the dangers of artery-clogging trans fats that Americans get in their foods seem to be paying off: The amount of trans fats in the blood of white adults in the USA dropped a “dramatic” 58% from 2000 to 2009, a government study shows. Trans fats increase bad (LDL) cholesterol and decrease good (HDL) cholesterol, so the consumption of these fats increases the risk of heart disease. Trans fats occur naturally in foods such as milk, butter, cheese and beef, but most are found in the form of partially hydrogenated oils. They are created by a process that adds hydrogen molecules to vegetable oils, creating a more stable oil that’s useful for food processing and cooking. These oils help create a special texture, firmness and longer shelf life for many products (but a shorter shelf life for humans). In recent years, many food companies have taken trans fats out of their products, and many big chain restaurants have switched to healthier oils. A government regulation requires food manufacturers to list the amount of trans fats on the nutrition facts panel of the food labels.

Momentum Growing for Online Sales Tax

Attention, online shoppers. The days of tax-free online shopping may be coming to an end. More than a dozen states have enacted legislation or rules to force online retailers to collect sales taxes on purchases. Similar legislation is pending in 10 states. The National Conference of State Legislatures estimates that uncollected state sales taxes will cost states $23 billion this year. Residents of sales-tax states are supposed to pay taxes on online purchases, but because retailers don’t collect them, they rarely do. Retailers have long argued that exempting online purchases from sales taxes gives online retailers an unfair advantage over brick-and-mortar stores. In 1992, the Supreme Court ruled that states couldn’t require retailers to collect sales taxes unless the retailers had a physical presence in the state. Increasingly, though, states have interpreted that requirement to include subsidiaries or affiliates of online retailers, or online retailers with a warehouse or distribution center in the state.

Economic News

After falling steadily since the recession began four years ago, household income appeared to turn the corner by rising sharply the last four months of 2011. Inflation-adjusted median household income increased 4%, from $49,434 to $51,413, from August to December. That’s the biggest jump since the start of the recession in December 2007. Real median household income is still 7% lower than it was in December 2007 and 3.9% lower than in June 2009, when the recession officially ended.

The Greek government announced a deal with private creditors that may help it make a 14 billion euro payment due next month, heading off a default that threatened to cascade into a run on debt issued by nations such as Spain and Italy. Greece agreed to lay off public employees, slash pension benefits and lower the minimum wage in exchange for a 70% reduction in the amount of its debt held by private investors. The deal is not a final solution to Greece’s fiscal woes. It doesn’t address the majority of the nation’s outstanding debt, which is now held by other governments and the European Central Bank.

PepsiCo says it will cut 8,700 jobs to cut costs as it increases investment in advertising and marketing. The snack and drink giant also says net income for the quarter ended Dec. 31 rose 4% to $1.42 billion.

  • More profit, more advertising, fewer jobs. How helpful.

Middle East

Israeli Prime Minister Benjamin Netanyahu addressed a special plenum meeting in honor of the Knesset’s 63rd birthday on Wednesday, declaring that the Palestinian Authority has rejected the possibility of permanent peace with Israel by agreeing to form a unity government with the Islamist terror militia Hamas. “We said [the PA] needs to choose between the path of Hamas and the path of peace,” he said. “The Palestinians embraced a terrorist organization that calls for Israel’s destruction.” In related news, the leadership of Hamas in Gaza added its voice to a rising chorus condemning the choice of PA president Mahmoud Abbas to be the prime minister in a future unity government between Hamas and the PA. The agreement was signed by Hamas leader in exile Khaled Mishaal, and the Gaza based leadership says they were not consulted and do not consent.

A series of public statements by high-ranking officials in both the U.S. and Israel over the past few days have revealed a deep division between the two allies over the proper response to Iran. Israeli Defense Minister Ehud Barak said that action must be taken before Iran “reaches an immunity zone.” But U.S. officials downplayed the threat that Iran is close to having a nuclear weapon, saying that they are still several years away and that there is time for diplomacy and sanctions to work. The division raised fears among the Obama Administration that Israel will act unilaterally, without getting approval or even notifying Washington.

Syria

Twin blasts tore through government buildings in the Syrian city of Aleppo on Friday, fueling President Assad’s claims that “terrorists” and not government forces are causing the violence that has left thousands dead across the country. The explosions at two security force buildings happened the same day that tens of thousands of Syrians across the country demonstrated against Russia for its veto of a U.N. Security Council resolution condemning the violence. Amid international criticism of its U.N. veto, Russia fired back Friday and accused the West of having a military presence in Syria to stoke the fighting and intervene in Syria’s internal affairs.

Between blasts of rockets and mortar fire, Syrians used loudspeakers to call for blood donations and medical supplies Thursday in the stricken city of Homs, where a weeklong government offensive has created a deepening humanitarian crisis. Government forces are trying to crush pockets of violent resistance in Homs, the epicenter of an 11-month-old uprising that has brought the country ever closer to civil war. The intense shelling has made it difficult to get medicine and care to the wounded, and some areas have been without electricity for days. Hundreds of people are believed to have been killed since early Saturday in the heaviest attack the city has endured since the uprising began in March,.

Egypt

Egyptian activists vowed to flood Tahrir Square and cripple the country with a strike this weekend, saying that one year after forcing a dictator from power, their revolution is far from complete. Egypt’s economy has suffered since Mubarak’s ouster: Foreign investment has dried up and tourists are staying away. The Brotherhood’s Freedom and Justice Party says it plans to improve things by ending corruption, but little has changed. The streets have yet to calm since Mubarak’s ouster. The festive air that enveloped Tahrir after Mubarak’s ouster has been displaced by clouds of tear gas. This week, medical workers tended to the injured inside hospital tents while protesters rested from the day’s battle on sidewalks pockmarked by broken tree planters and piles of garbage.

Iran

India has boosted its imports of Iranian oil, becoming the Islamic Republic’s largest customer last month and largely offsetting a cut in Chinese purchases as sanctions fail to dent Tehran’s sales for now, people within the oil industry said this week. Iranian crude exports to India rose to 550,000 barrels a day in January, up 37.5% from December, the person said. That partly offset a 50% cut in crude exports to China–now at about 250,000 barrels a day–amid a pricing dispute. Based on preliminary figures, overall Iranian crude exports remained broadly unchanged at 2.10 million barrels a day, compared with 2.14 million barrels a day in December, amid easing seasonal demand in the first half of the year… Despite a pledge to find alternatives, South Africa also doubled its Iranian oil imports to 100,000 barrels a day

  • Sanctions are not going to prevent Iran from developing nuclear weapons

Pakistan

A U.S. drone fired two missiles at a house in Pakistan’s northwest tribal region, killing three suspected militants in the second such attack in as many days. The back-to-back strikes could be an indication the drone program is picking up steam again after a slowdown caused by tensions with Pakistan over accidental American airstrikes that killed 24 Pakistani soldiers late last year.

Nigeria

Increasing violence in Nigeria has strengthened the faith of local Christians, even sparking a revival at the Deeper Life Bible Church in Gombe, where nine Christians were killed in an attack on the church on Jan. 5, according to Voice of the Martyrs. During a funeral service for those killed, many accepted Jesus and many other believers rededicated their lives to Christ. The crowd of about 500 then joined in intercessory prayer for the church of Nigeria, the country as a whole, Muslims in Nigeria, and the Islamist extremist group Boko Haram. Ever since Boko Haram issued an ultimatum on Jan. 3 ordering Christians to leave northern Nigeria or face violence, the group has claimed responsibility for the murders of at least 44 Christians, including another church attack on Jan. 22 that killed seven.

Sudan

A Bible school backed by the American ministry Samaritan’s Purse was destroyed in the latest bomb attack to hit Sudan’s South Kordofan state, CNN reports. On Feb. 2, Heiban Bible College’s first day of classes, at least eight bombs were dropped in the area, destroying two of the school’s buildings and starting fires. No injuries were reported. Franklin Graham, president and CEO of Samaritan’s Purse, blamed Sudan’s air force for the strike, and called on the international community to establish a no-fly zone in the region. “We are deeply concerned for the welfare and lives of the people of South Kordofan, and we condemn the bombing of … Christian facilities,” he said. At least four churches in the area have also been destroyed in recent months, and more than 78,000 people have fled South Kordofan and the neighboring Blue Nile state since clashes between Sudan’s government and an armed rebellion broke out in August.

Haiti

The slow pace of rebuilding in Haiti two years after a devastating earthquake has demoralized Haitians and could destabilize the country, Prime Minister Garry Conille said Thursday. The catastrophic magnitude-7.0 earthquake that struck 15 miles west of Haiti’s densely populated capital Port-au-Prince on Jan. 12, 2010 killed more than 300,000 people and left more than 1 million people homeless. Two years later, nearly 500,000 people still live in squalid tent camps. Less than half the $4.5 billion pledged by international donors following the quake has been paid out to various projects, the United Nations said in a January report. The vast majority of the money disbursed has gone to non-governmental aid groups that operate in the country, rather than through the government, which is widely perceived as corrupt. Transparency International, a global civil society organization that helps countries identify and root out corruption, ranks Haiti among the most corrupt nations — 175 out of 182 countries — in its latest Corruption Perception Index published in December.

Weather

At least four Balkan nations suspended shipping on the Danube River because of severe frost and the vast amount of ice blocking the heavily traveled waterway. Bulgaria, Croatia, Romania and Serbia made the decision because up to 90 percent of the river’s surface is covered with floating ice. The conditions are making it extremely difficult to traverse Europe’s main commercial waterway, which winds 1,777-miles from Germany and serves as the natural border between Bulgaria and Romania. Europe has been battling a deep freeze that started in late January and has killed hundreds, snow that has trapped thousands in Balkan mountain villages and prompted worries of flooding as heavy snow melts.

The National Weather Service’s Climate Prediction Center says the La Niña climate phenomenon that contributed to the southwestern U.S. drought is winding down. La Niña is showing signs that it will be over by summer, but that’s too late for the U.S. Southwest because the rainy season will be over by that time. But it is good news for the Atlantic hurricane belt. More tropical storms and hurricanes form there during La Niñas. The effects of La Niña, a cooling of the central Pacific Ocean water, are generally weaker in summer.

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