Monday, August 27, 2007
  NYTimes - As China Roars, Pollution Reaches Deadly Extremes
Scary stuff.

No country in history has emerged as a major industrial power without creating a legacy of environmental damage that can take decades and big dollops of public wealth to undo.

But just as the speed and scale of China’s rise as an economic power have no clear parallel in history, so its pollution problem has shattered all precedents. Environmental degradation is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public but also an acute political challenge to the ruling Communist Party. And it is not clear that China can rein in its own economic juggernaut.

Public health is reeling. Pollution has made cancer China’s leading cause of death, the Ministry of Health says. Ambient air pollution alone is blamed for hundreds of thousands of deaths each year. Nearly 500 million people lack access to safe drinking water.

Chinese cities often seem wrapped in a toxic gray shroud. Only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union. Beijing is frantically searching for a magic formula, a meteorological deus ex machina, to clear its skies for the 2008 Olympics.

  NYTimes - Inside the Countrywide Lending Spree
Stick a fork in this thing - this NY Times article just roasted the company.

ON its way to becoming the nation’s largest mortgage lender, the Countrywide Financial Corporation encouraged its sales force to court customers over the telephone with a seductive pitch that seldom varied. “I want to be sure you are getting the best loan possible,” the sales representatives would say.

But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees. Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans that resulted in richer commissions for Countrywide’s smooth-talking sales force, outsize fees to company affiliates providing services on the loans, and a roaring stock price that made Countrywide executives among the highest paid in America.

Countrywide’s entire operation, from its computer system to its incentive pay structure and financing arrangements, is intended to wring maximum profits out of the mortgage lending boom no matter what it costs borrowers, according to interviews with former employees and brokers who worked in different units of the company and internal documents they provided. One document, for instance, shows that until last September the computer system in the company’s subprime unit excluded borrowers’ cash reserves, which had the effect of steering them away from lower-cost loans to those that were more expensive to homeowners and more profitable to Countrywide.

Now, with the entire mortgage business on tenterhooks and industry practices under scrutiny by securities regulators and banking industry overseers, Countrywide’s money machine is sputtering. So far this year, fearful investors have cut its stock in half. About two weeks ago, the company was forced to draw down its entire $11.5 billion credit line from a consortium of banks because it could no longer sell or borrow against home loans it has made. And last week, Bank of America invested $2 billion for a 16 percent stake in Countrywide, a move that came amid speculation that Countrywide’s survival was in question and that it had become a takeover target — notions that Countrywide publicly disputed.

Homeowners, meanwhile, drawn in by Countrywide sales scripts assuring “the best loan possible,” are behind on their mortgages in record numbers. As of June 30, almost one in four subprime loans that Countrywide services was delinquent, up from 15 percent in the same period last year, according to company filings. Almost 10 percent were delinquent by 90 days or more, compared with last year’s rate of 5.35 percent.

Many of these loans had interest rates that recently reset from low teaser levels to double digits; others carry prohibitive prepayment penalties that have made refinancing impossibly expensive, even before this month’s upheaval in the mortgage markets.

To be sure, Countrywide was not the only lender that sold questionable loans with enormous fees during the housing bubble. And as real estate prices soared, borrowers themselves proved all too eager to participate, even if it meant paying high costs or signing up for a loan with an interest rate that would jump in coming years.

But few companies benefited more from the mortgage mania than Countrywide, among the most aggressive home lenders in the nation. As such, the company is Exhibit A for the lax and, until recently, highly lucrative lending that has turned a once-hot business ice cold and has touched off a housing crisis of historic proportions.

Thursday, August 16, 2007
  NYTimes - Virus Spreading Alarm and Pig Disease in China
A highly infectious swine virus is sweeping China’s pig population, driving up pork prices and creating fears of a global pandemic among domesticated pigs.

Animal virus experts say Chinese authorities are playing down the gravity and spread of the disease.

So far, the mysterious virus — believed to cause an unusually deadly form of an infection known as blue-ear pig disease — has spread to 25 of this country’s 33 provinces and regions, prompting a pork shortage and the strongest inflation in China in a decade.

More than that, China’s past lack of transparency — particularly over what became the SARS epidemic — has created global concern.

Field experts are reporting widespread disease outbreaks. Fear among pig farmers that their livestock will contract the disease has led to panic selling. And the government and media here have issued alarming reports that farmers are selling diseased or infected pigs to illegal slaughterhouses, which could pose food safety problems.

Scientists who track blue-ear pig disease are puzzled because the disease is generally not so deadly.

“This virus generally makes them ill but on its own it doesn’t cause a lot of deaths,” said Steven McOrist, a professor of pig medicines at the University of Nottingham in England. “The evidence they put up so far is not conclusive.”

Many experts, meanwhile, worry that China, which the F.A.O. says is the fourth-largest exporter of live and slaughtered hogs, could already be exporting the disease.

Friday, August 10, 2007
  Globe and Mail - Analysts fear shorting effect
"The market move was not caused by the rule change, but there is little doubt that it made the slide occur faster than it might otherwise," Gregory Drahuschak, vice-president of Janney Montgomery Scott Inc., wrote in a note to clients this week. "Increased volatility is here to stay as long as the new regulation remains."

The so-called "uptick rule" or "tick test" was implemented in the 1930s after the stock market crash to ensure short sellers were not alone in causing a stock price to fall.

But regulators at the U.S. Securities and Exchange Commission revoked the rule in July, suggesting it modestly hurt liquidity and did not appear necessary to prevent the manipulation of a stock price.

"The hedge funds were very, very aware of this. They sit around and giggle when this stuff happens," said Mallory Hill, chief executive officer of mortgage lender Novelle Financial Services Inc. "Without the uptick rule, they can put anyone out of business."

Also, since the tick test was officially eliminated July 6, downside trades have proliferated and volatility has become increasingly prevalent in the stock market.

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