Government Reform

Investment Politics 2008: What’s (left) in your Wallet?

The parade of promises is marching down Main Street. For too many months to come, politicians of all descriptions, parties, and ideologies will be courting our votes… they have the cure for all that is wrong in the world, they tell us. With crystal clear hindsight, every candidate criticizes the decisions of every incumbent, from the Town Council of Podunk to The Presidency itself. You’ve heard it all before; it never changes. But we all know that little will be accomplished. Ten years from now, we’ll be grumbling about the same things that bothered us ten years ago! But we listen to (and sometimes even believe) the same garbage, campaign after campaign. Aren’t you tired of this cycle of frustration? If you thought you could make a difference, would you try?

As Investors, we represent the single biggest voter block in the country. Of the 250 million (+ or -) voting age Americans, no less than 75% have some form of investment portfolio plus an interest in the illusory Social Security Trust Fund. Investors have the power to elect the next president, change the tax code, fix Social Security, and strengthen the economy. We have the power to produce significant changes in our society, but we need to start sending the right message to politicians… collectively, constructively, and quickly. In this rapidly “flattening” world, our non-leaders (in both parties) are unwittingly making us less competitive globally, more protectionist at home, and less attractive to foreign investment than ever before. It’s no wonder that we export more rhetoric than we do goods and services…

In addition to being Democrats, Republicans, Libertarians, Independents, etc, why not pledge our allegiance to the multi-partisan “MT~BSW” Supra-Party. This (hypothetical) political party could well become the first choice of most investors, regardless of their portfolio size. Investors must respond in one voice to the endless political drivel with a resounding “Money Talks, BS Walks”. We are tired of trite promises, and circus sideshow antics. As Investors, we want less government, no name-calling, and fewer regulations. We want decision makers who design laws that aid economic freedoms, not lawmakers who make decisions that restrict them. Incumbent bashing is not a political platform and neither is picking the pockets of the most productive members of society. We want a change in attitude and we will fire those who don’t appreciate the problem. The MT~BSW Party can rebuild a productive government, and without nominating our own representatives.

The writing is on Walls of Congress, and it is telling us that we need to replace old school power politicians with a new breed of decision-making managers who can lead us back to the creative space in the global economy that we once dominated. Here’s the MT~BSW “Financial Plan” for the 2008 Election… Dot Connectors Wanted:

The first step is to get the politicians out of Politics. Leave the “newbies” alone on the assumption that they still have the ability to think for themselves. But do what you can to get rid of any two-term person in any elected position, anywhere, regardless of name or party affiliation. If they’ve been in office that long, and Social Security Payments are still taxable, they do not share our agenda. Next, absolutely do not vote for any new person who has not issued a brief (300 words or less) (personally written and delivered under some form of oath) (in adult English without legalese) position statement on each of the following list of Ten Issues that we, as Investors, consider of primary importance if we (the US of A) are to continue as the most powerful economic force in the world.

The MT~BSW Party demands reform, change, and improvement in government attitudes toward investors. We will not support any candidate, regardless of party affiliation, who does not pledge to work toward a return to government that supports the principles of Capitalism, and rewards productivity, ingenuity, and creativity, as much as it respects the needs of the sick, the poor, and the environment. Briefly (but to be expanded upon in future articles):

1. Investment Income: Abolish the taxation of all forms of investment income at all levels, Federal, State, or Local. This includes all rents, royalties, interest, dividends, capital gains, etc. Similarly, abolish taxation of any form of retirement income… regardless of source.

2. Corporate Income Tax: Eliminate the Corporate Income Tax… and observe the increase in employment and employee compensation that follows.

3. Social Security Reform: Take Social Security out of the Public Sector and replace it with a mandatory, Deferred, Fixed-Annuity program within the private sector, funded by a 2% or less employee only premium. Absolutely never allow access to these retirement annuity accounts prior to retirement.

4. Tort Reform: Reform Tort Law at every level, and protect both businesses and individuals from frivolous lawsuits. Adopt a rule of personal responsibility for one’s own stupidity, ignorance, and clumsiness.

5. Estate & Gift Taxes: Eliminate Estate and Gift Taxes at all levels. Find a way to reward charitable contributions through 25% government matching payments.

6. Government Regulation: Examine the destructive economic impact of Government Regulation and oversight in many industries, particularly small business practitioners in personal services fields. Provide an arbitration and review system to identify and control abuses of regulatory power and a separate Department in each agency to deal with Small Business entities.

7. Obscene Executive Compensation: Adopt Amount Guidelines and Tax Rules that will control abusive Corporate Executive Compensation levels, and which would include all forms of compensation not available proportionately to all employees and/or shareholders.

8. Federal Income Tax Reform: Revise, rewrite, and actually simplify the Internal Revenue Code, starting with a top rate of 25% on income, a general non-specific single deduction and no subsection of more than two sentences or with more than two levels of subsections.

9. Size of Government: Reduce Government Staff at all levels by at least 10% per year for the next three to five years.

10. Individual Retirement Plans: Combine all forms of voluntary Employee and personal retirement programs into one IRA plan with tax deductible contributions up to a $5,000 per year limit per person (employed or not).

Of course there can be more than ten planks in the Investors’ MT~BSW platform, but let’s have some fun with these. Maybe some of you will get real serious about it and actually make change happen. I welcome your contributions to later articles, and your efforts to spread the “investors’ manifesto however you can.

Steve Selengut
http://www.articlesbase.com/politics-articles/investment-politics-2008-whats-left-in-your-wallet-127092.html

Groundswell of Asbestos Risks And Mesothelioma Lawsuits in California

In today’s era of information, most people are well aware of the dangers that asbestos pose. Factories, refineries, automotive companies, and construction sites are the leaders of Mesothelioma risks and asbestos exposure.

There are numerous asbestos-related risks and Mesothelioma risk factors lingering around California that have little to do with factories and labor companies. Asbestos has been brought back to the forefront of health concerns despite tougher asbestos laws. As if asbestos laden debris isn’t enough of an insult, asbestos is being released through the vast amounts of construction occurring in the many areas of California, including Richmond and Oakland.

Despite the asbestos reform laws in the early eighties due to the risk of Mesothelioma, this fire resistant material is still used in modern day construction as a cost effective, safety conscious building material. Though asbestos is used in lower concentrations because of its very obvious links to mesothelioma, it is still far from being outlawed as it should be.

Residents in Richmond, California and the surrounding Bay Area are at a very high risk for current asbestos exposure and later cases of Mesothelioma. With percentages of older homes, businesses, and buildings carrying high levels of asbestos, a mesothelioma case is simply waiting to happen. Add that exposure to the high exposure rate that the new construction has brought, and somebody really needs to take a long hard look at what the potential fallout may very well end up meaning.

The government itself certainly has knowledge of the Mesothelioma risk and the asbestos exposure. Legislation is hanging in the balance to determine that those who were exposed to asbestos and are likely to contract Mesothelioma later in life are not going to be permitted to file Mesothelioma lawsuits. The government is trying to state that while they are well aware of the risk of future Mesothelioma cases, they are trying to deny the people their right to medical and legal claims associated with Mesothelioma.

The government claims that they are willing to set aside funds that will allow Mesothelioma claimants to file for medical coverage if they meet stringent guidelines concerning asbestos exposure and Mesothelioma contraction. This is a phenomenal slap in the face to those who were unknowingly exposed to asbestos and the threat of Mesothelioma. The government can’t even ensure that social security funds will be available in twenty to thirty years, not to mention that hands down, private health care is far and above government health care.

This new law would of course not be surprising. Ample laws have been passed protecting the government and businesses from worker claims. Mesothelioma laws have already hit governmental facilities as well in Pennsylvania, Ohio, and a few Midwestern states. These laws prohibit workers from suing their companies, provided their companies pay for their medical expenses which are deemed “necessary.” These laws will leave Mesothelioma and other health care choices in the hands of the insurance companies and do not provide for various other financial liabilities which are bound to occur when Mesothelioma creates symptoms bad enough that the injured party can no longer hold gainful employment.

Louisiana legislation was enacted after lawmakers were petitioned by companies who were sued by healthy claimants after selling asbestos laden fill dirt to homeowners who were rebuilding after Hurricane Katrina. The contractor who sold this fill dirt was successfully sued for the risk that the exposure to the asbestos presented to the homeowners and their families. In a time when Mesothelioma is well enough understood to be rightfully feared, the contractors had the responsibility to their own welfare and the welfare of others to be sure their product was clean of asbestos.
These types of lawsuits serve a greater purpose than providing future financial relief for families who were exposed to asbestos and placed at risk for future cases of mesothelioma. Mesothelioma settlements such as these send a very clear message that the public is tired of being placed at risk for dangers that can be prevented. The governmental stance on this lawsuit allows for companies to increase their levels of irresponsible exposure while undermining the value of the worker. Mesothelioma is a virtual death sentence, and by allowing companies to abandon Mesothelioma victims, it creates a further risk for everyone.

Substantial mesothelioma settlements and awards are necessary to keep companies accountable and within the bounds of human expectation.

Nick Johnson
http://www.articlesbase.com/law-articles/groundswell-of-asbestos-risks-and-mesothelioma-lawsuits-in-california-119266.html

Not so Fast, Obama, Say Insurance Companies

The health insurance industry has some lingering doubts about President-elect Barack Obama’s health care plan.  Even though they have supported a plan that will require them to accept all applicants without regard to pre-existing conditions, there are still concerns.  The National Health Insurance Exchange is giving them issue.

The National Health Insurance Exchange would give Americans a choice between a private plan and a government sponsored plan. The premise is that by combining government sources and open market options, the insured will have more resources with which to tailor a custom plan.  The New York Times reports Tom Daschle, the incoming HHS Secretary, as stating that the government’s plan is designed around the Medicare model.

The Plan would encourage competition between itself and participating private companies.  Proponents say the competition that it encourages is likely to drive down market rates.  The insurance industry, however, says this is not necessarily true.  They argue that the opposite is true, that the government plan would likely underpay doctors for services rendered, causing private providers to raise their prices to cover their losses experienced from government plans.

Karen Ignagni, president of America’s Health Insurance Plans, recently stated “A new public program similar to Medicare would exacerbate cost-shifting, which already adds $1,500, or 10%, to the average premium for a family of four.”  President-elect Obama, in spite of differences, seems to be keeping his word regarding giving all parties an equal seat at the negotiating table.  This in itself is commendable.

Stephanie Cutter, spokesperson for Obama’s White House transition, recently said, “These are listening sessions.  We are trying to find people who share Obama’s goal of health care reform, even if they disagree on the specifics.”  Thousands of meetings have already been scheduled with health care reform as the subject.  All parties are being welcomed.

If you find yourself asking questions about your present <a href=”http://www.gohealthinsurance.com”>health insurance</a> predicament, not knowing where to turn for answers, then visit the web’s best known and most extensive source of advice at www.GoHealthInsurance.com to learn about available <a href=”http://www.gohealthinsurance.com/plan-finder.html”>health insurance plans</a>.

Ethan Kalvin
http://www.articlesbase.com/insurance-articles/not-so-fast-obama-say-insurance-companies-704939.html

CAMEO_Examines_Issue_5-6_part_2_of_5.avi

Part two of a five part Program. The Cleveland American Middle East Organization examines Cuyahoga County Reform Issues 5 & 6 on October 14th 2009 at the Kan Zaman Restaurant. Advocating for Issue 5 are County Recorder, Judge Lillian Greene and County Sheriff Bob Reed. Advocating for Issue 6 are State Senators Nina Turner and Dale Miller.

Duration : 29 min 55 sec

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Nick Clegg: Change politics for good

Nick Clegg talks about how we can all reform government and Parliament, restoring trust in politics and handing power to people, putting you back in charge.
Website: http://www.TakeBackPower.org

Duration : 2 min 42 sec

Read more…

Why Cmos May be Considered for Private Trading Programs

Collateralized Mortgage Obligations (CMOs) sometimes referred to as Real Estate Mortgage Investment Conduits (REMICs), are one of few innovative investment methods available in today’s investment world. CMOs offer relative safety, regular payments and notable yield advantages over other better known fixed-income securities of comparable credit quality.

A wide variety of CMO securities with different cash flow and expected maturity characteristics have been designed to meet specific investment objectives. While CMOs offer advantages to investors, they also carry certain risks which will be further explained in this document. To determine if CMOs fit within your investment portfolio, you should first understand the distinctive features of these securities.

CMOs were first introduced in 1983. The Tax Reform Act of 1986 allowed CMOs to be issues in the form of REMICs, creating certain tax and accounting advantages for issuers and for certain large institutional and foreign investors. Today, almost all CMOs are issued in REMIC form. Remember that throughout this CMO explanation, REMICs and CMOs are interchangeable.

THE BUILDING BLOCKS OF CMOS Mortgage Loans and Mortgage Pass-Throughs. When a CMO is created, it begins with a mortgage loan extended by a financial institution (such as a savings and loan, commercial bank or mortgage company) to finance a borrower’s home or other real estate. The homeowner usually pays the mortgage loan in monthly installments composed of both interest and “principal”. Over the duration of the mortgage loan, the interest component of payments in the early years gradually declines as the principal component increases.

To obtain funds to generate more loans, lenders either “pool” groups of loans with similar characteristics to create securities or sell the loans to issuers of mortgage securities. The securities most commonly created from pools of mortgage loans are “mortgage pass-through securities” (MBS) or “participation certificates” (PCs). MBS represent a direct ownership interest in a pool of mortgage loans. As the homeowners whose loans are in the pool make their mortgage loan payments, the money is distributed on a pro rata basis to the holders of the securities.

Several factors can affect the homeowners’ payments. Typically, the homeowner will “prepay” the mortgage loan by selling the property, refinancing the mortgage or otherwise paying off the loan in part or whole. Most mortgage pass-through securities are based on fixed-rate mortgage loans with an original maturity of 30 years, but experience shows that most of these mortgage loans will be paid off much earlier.

While the creation of MBS greatly increased the secondary market for mortgage loans by pooling them and selling interests in the pool, the structure of such securities has inherent limitations. MBSs only appeal to investors with a certain investment horizon – on average, 10-12 years.

CMOs were developed to offer investors a wider range of investment time frames and greater cash-flow certainty than had previously been available with MBS. The CMO issuer assembles a package of these MBS and uses them as collateral for a multiclass security offering. The different classes of securities in a CMO offering are known as tranches, from the French word for slice. The CMO structure enables the issuer to direct the principal and interest cash flow generated by the collateral to the different tranches in a prescribed manner, as defined in the offering’s prospectus, to meet different investment objectives.

THE HIGH CREDIT QUALITY OF CMOS The Government National Mortgage Association (GNMA, or Ginnie Mae) an agency of the U.S. government, along with U.S. government-sponsored enterprises (GSE) such as the Federal National Mortgage Association (FNMA, or Fannie Mae) or the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac), guarantee most MBSs. Ginnie Mae is a government-owned corporation within the Department of Housing and Urban Development. Fannie Mae and Freddie Mac have federal charters and are subject to some oversight by the federal government, but are publicly owned by stockholders.

Fannie Mae and Freddie Mac issue and guarantee pass-through securities. Ginnie Mae only adds its guarantee to privately issued pass-throughs backed by government issued (FHA and VA) mortgages. Fannie Mae and Freddie Mac have issues CMOs for quite some time; the Department of Veterans Affairs (VA) began to issue CMOs in 1992, and Ginnie Mae initiates its own CMO program which began in 1994. Securities guaranteed or guaranteed and issues by these entities are known generically as “agency” mortgage securities. The agency guarantees enhance their credit quality for investors. In addition, the mortgages backing Fannie Mae and Freddie Mac mortgage securities must meet strict quality criteria. Those backing GNMA pass-throughs are underwritten in accordance with the rules and regulations of the FHA and the VA, which insure them against default.

The extent of the agency guarantee depends on the entity making it. Ginnie Mae, for example, guarantees the timely payment of principal and interest on all of its mortgage securities, and its guarantee is backed by the “full faith and credit” of the U.S. government. Holders of Ginnie Mae mortgage securities are therefore assured of receiving payments promptly each month, regardless of whether the underlying homeowners make their payments. They are guaranteed to receive the full return of face-value principal even if the underlying borrowers default on their loans. Mortgage securities issued by the VA carry the same full faith and credit U.S. government guarantees.

Fannie Mae guarantees timely payment of both principal and interest on its mortgage securities whether or not the payments have been collected from the borrowers. Freddie Mac also guarantees timely payment of both principal and interest on its Gold PCs and CMOs. Some older series of Freddie Mac PCs guarantee timely payment of interest, but only the eventual payment of principal. Although neither Fannie Mae or Freddie Mac securities carry the additional full faith and credit U.S. government guarantee, the credit markets consider the credit on these securities to be equivalent to that of securities rated triple-A or better. Some private institutions, such as subsidiaries of investment bank, financial institutions and home-builders, also issue mortgage securities. When issuing CMOs, they often use agency mortgage pass-through securities as collateral; however, their collateral may include different or specialized types of mortgage loans and/or pools, letters of credit and other types of credit enhancements. These private-labeled CMOs are the sole obligation of their issuer. To the extent that private-label CMOs use agency mortgage pass-through securities as collateral, their agency collateral carries the respective agency’s guarantees. Private-label CMOs are assigned credit ratings by independent credit agencies based on their structure, issuer, collateral and any guarantees or outside factors. Many carry the highest AAA credit rating.

As an additional investor protection, the CMO issuer typically segregates the CMO collateral or deposits it in the care of the trustee, who holds it for the exclusive benefit of the CMO bondholders.

For the above reasons described, CMOs are considered by a select few platforms to be an asset that is easy to validate and prove ownership. In addition, the trading platform is able to be added as the CMOs Beneficiary allowing for the appropriate financing lines to be obtained. The result is a CMO asset that can be purchased for pennies on the dollar with nominal returns and subsequently placed and traded successfully in a Private Trading Program with yields the owner once only dreamed of.

Marcel Ford
http://www.articlesbase.com/finance-articles/why-cmos-may-be-considered-for-private-trading-programs-738561.html