ReadinessHub.com - News Archives, July 29-31, 2007

LOS ANGELES (MSNBC) - "The number of U.S. homes facing foreclosure surged 58 percent in the first six months of the year, the latest sign of mounting problems in the mortgage industry, a data firm said Monday.

In all, 573,397 properties across the nation reported some sort of foreclosure activity in the first half of this year, including receiving notices of default, auction sale notices or being repossessed by lenders, Irvine-based RealtyTrac Inc. said.

That was 58 percent higher than the 363,672 properties in the first six months of 2006 and 32 percent higher than the 433,504 in the last six months of 2006.

“We could easily surpass 2 million foreclosure filings by the end of the year, which would represent a year-over-year increase of over 65 percent,” said RealtyTrac CEO James J. Saccacio.

California, Florida, Texas and Ohio were among the states with the highest number of homes receiving foreclosure-related notices, the firm said.

In the RealtyTrac report, California led the nation in foreclosure filings and the number of homes receiving notices.

Some 104,572 properties in the state received notices of default or other foreclosure notices — more than double the year-ago total and an increase of 80 percent from the previous six months, the firm said.

RealtyTrac said a total of 925,986 foreclosure filings were sent to homeowners during the first half of the year. Some of those filings targeted the same property, in part because owners had more than one mortgage.

That figure was up 56 percent from the year-ago period and up 39 percent from the last six months of 2006, the firm said.

Notices of default, the first step in the foreclosure process, accounted for the largest slice of filings during the most recent period, a total of 416,937.

The national foreclosure rate through the end of June was one filing for every 134 U.S. households, the company said.

In the past, RealtyTrac released the total number of foreclosure notices issued and did not say if a single property received more than one notice. The company is now breaking out the exact property count..."

The Bottom Line: A lot of Americans are getting churned up and spit out by the Loan and Debt machine.

LONDON (Reuters) - "The world's three largest fully publicly traded oil firms are investing billions of dollars more this year and the extra spending has yet to result in higher production.

Exxon Mobil Corp. (XOM.N: Quote, Profile, Research), Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) and BP Plc (BP.L: Quote, Profile, Research) posted falling second-quarter output, even though they plan up to a total of $61 billion in 2007 capital spending, up 5.5 percent from 2006.

"We're in a transition for the supermajors where they are spending an awful lot to reinvigorate their portfolios," said Jason Kenney, European oil analyst at ING in Edinburgh. "It takes time."

The drop in supply reflects declining output from fields in mature oil regions like the North Sea, violence by militants in Nigeria that has cut output for some companies and slow access to big sources of new reserves.

Oil firms get some production from countries in the Organization of the Petroleum Exporting Countries but top exporter Saudi Arabia keeps its oilfields off-limits to foreign investors.

OPEC's members, whose oil industries are run by national oil companies, sit on three-quarters of the world's proven reserves and 10 of the 12 members pump crude at agreed levels to bolster prices.

Besides disruptions in Nigeria, which have trimmed output for Shell and other companies, Venezuela and Russia are grabbing more cash and control from firms that work their oil and gas fields.

Boulder, Colorado (National Geographic) - " The number of Atlantic hurricanes that form each year has doubled over the past century and global warming is largely to blame, according a new study. The increase occurred in two major steps of about 50 percent each, one in the 1930s and the second since 1995.

"It hasn't been a steady, gradual increase," said Greg Holland, a scientist with the National Center for Atmospheric Research in Boulder, Colorado.

The increases coincide closely with rises in sea surface temperatures in the eastern Atlantic tropics. Previous studies have attributed these rises to human emissions of greenhouse gases.

"That [correlation] implies there is a substantial contribution by greenhouse warming to the current crop of tropical cyclones," Holland said.

The study also shows that the proportion of major hurricanes to less intense hurricanes has sharply increased in recent years, which agrees with earlier studies showing an increase in stronger storms.

So while the storms' severity seems to fluctuate in a natural cycle, their frequency is on the rise, he explained.

"What we're seeing [now] is a high point of major storms, which has been a very, very stable oscillation, combined with a sharp increase in the frequency of all storms, which has been a trend," Holland said.

NEW YORK (Reuters) - "More than half of U.S. mid-sized companies are not planning to hire over the next 12 months or may lay people off, and fewer than a third of the firms expect strong economic growth, a survey said on Monday.

The news adds to evidence the U.S. economy may not grow as robustly next year as it did last quarter, when gross domestic product grew at an annualized rate of 3.4 percent.

Not all companies are gloomy about employment -- 47 percent expect to hire, according to the survey from CIT and the Economist Intelligence Unit. But 44 percent of mid-sized companies see their workforce size staying the same, and 9 percent forecast a decline.

Executives are not excessively optimistic about the economy, either, with just 30 percent saying they expect the economy to be strong over the next 12 months, while 38 percent were neutral and 24 percent expect it to be weak.

"Middle-market companies are realists in terms of what the economy will offer them," said Walter Owens, president of CIT Corporate Finance.

But the companies are still optimistic about their own prospects. Nearly two-thirds of the companies polled said they expect their revenue to grow over the next 12 months.

The survey covered companies that generate between $25 million and $1 billion in annual revenue.

These mid-sized companies employ about 32 million people, more than the 22 million employed by large companies in the Standard & Poor's 500, according to the survey.

The Bottom Line: No Jobs equals recession. Yeah Unemployment is down, but most people won't tell you that it is far more difficult now to be approved for unemployment than it used to be. So, naturally, the % of working-age people on unemployment will be relatively low.

BEIJING (Reuters) - "Deaths from floods, lightning and landslides across China this summer have reached nearly 700, state media said on Monday, with experts warning that global warming is likely to fuel more violent weather.

Over the weekend alone, fierce storms and hail killed 17 people across four provinces.

Ten died in the central province of Hubei, where rain and hail have added to swollen waters along the country's longest river, the Yangtze, and its main tributary, the Han.

In the northwestern province of Shaanxi, five died in floods that cut off roads around Shangluo, Xinhua news agency said.

A hail storm on Saturday hit parts of the eastern province Anhui, where millions of residents have been grappling with the threat of the swollen Huai River for the past month, killing one person and injuring three, Xinhua said.

Flood waters on the Huai have begun to retreat, but 268,000 people, including 8,000 troops, remained stationed along its embankments to prevent any breaches, it added.

One person died in a lightning strike in weekend storms in the flood-battered southwestern province of Sichuan, Xinhua said.

Summer storms are nothing new in China, but experts said global warming driven by growing greenhouse gas emissions from factories, farms and vehicles was fuelling more intense weather.

North Pole (BBC) - "Two Russian mini-subs have made a test dive to the floor of the Arctic Ocean near Russia's most northerly islands.

The subs reached a depth of 1.3km (0.8 miles) at a point 87km north of the Franz Josef Land archipelago.

The dives were a trial run ahead of a planned descent later this week to leave the Russian flag on the seabed 4km below the North Pole.

The team is looking for geological evidence to support Moscow's claim to the resource-rich Arctic seabed.

The expedition is being led by two members of parliament - Arthur Chilingarov, a seasoned polar explorer, and fellow MP Vladimir Gruzdev.

       The subs reached a depth of 1.3km (0.8 miles) at a point 87km north of the Franz Josef Land archipelago.

       The dives were a trial run ahead of a planned descent later this week to leave the Russian flag on the seabed 4km below the North Pole.

       The team is looking for geological evidence to support Moscow's claim to the resource-rich Arctic seabed.

       The expedition is being led by two members of parliament - Arthur Chilingarov, a seasoned polar explorer, and fellow MP Vladimir Gruzdev.

See a detailed map of the region

       "We face the most severe and risky task, to descend to the depths, to the seabed, in the harshest of oceans, where no one has been before and to stand in the centre of the ocean on our own feet," Mr Chilingarov said.

       "Humanity has long dreamt of this."

Continental extension

       The subs are being launched from the Akademik Fyodorov research ship, supported by a nuclear-powered icebreaker.

       "It was the first time a submersible worked under the icecap and it proved they can do this," said the pilot of one of the subs, Anatoly Sagalevich, after the test dives.

       Russia's claim to a vast swathe of territory in the Arctic, thought to contain oil, gas and mineral reserves, has been challenged by other powers, including the US.

       Moscow argued before a UN commission in 2001 that waters off its northern coast were in fact an extension of its maritime territory.

       The claim was based on the argument that an underwater feature, known as the Lomonosov Ridge, was an extension of its continental territory. The UN has yet to rule upon the claim.

       The teams aboard the mini-submarines Mir 1 and Mir 2 are expected to carry out scientific experiments and measurements on the seabed.

       The Law of the Sea Convention allows states an economic zone of 200 nautical miles, which can sometimes be expanded.

       To extend the zone, a state has to prove that the structure of the continental shelf is similar to the geological structure within its territory.

       At the moment, nobody's shelf extends up to the North Pole, so there is an international area around the Pole administered by the International Seabed Authority..."

ARROYO GRANDE, Calif. (MarketWatch) -- "Subprimes downgraded. Will Moody's downgrade America's debt next? Actually, that's already happening; our credit rating is collapsing with the dollar.

Recently Robert Hormats, vice chairman of Goldman Sachs (International), appeared before the U.S. House Budget Committee to "discuss an issue of great economic, financial and national security importance to our country -- the growing dependence of the United States on foreign capital." Currently we import $1 trillion new debt annually, with no repayment plans. That's a historic break from over two centuries of American policy.

Hormats was in Washington with warnings from his brilliant new book, "The Price of Liberty: Paying for America's Wars." He traces the history of American wartime financing from the Revolution through the War of 1812, the Civil War, the two World Wars and the Cold War to the present.

Conclusion: "One central, constant theme emerges: sound national finances have proved to be indispensable to the country's military strength" and long-term national security.

America's long tradition of war financing began with Alexander Hamilton: "In January 1790, Hamilton, by then the country's Treasury secretary, confronted the American people with a stark fact: the nation had run up a huge debt fighting the Revolutionary War. This debt, he wrote, was the 'price of liberty,' and the new government had to repay it. The future creditworthiness of the United States, and ultimately the security and ability to finance future wars, would depend on how successfully and faithfully this was done."

Hamilton's principles have kept America's credit strong through every war since the Revolution ... until the Iraq War. Since then, "although U.S. leaders have warned that the war against terrorism could last for decades, the country lacks a multidecade financial strategy to address the challenge."

Iraq tossed the lessons of history out the window. Hormats says that despite the oft-repeated remark that 9/11 "changed everything, in the area of fiscal policy, however, it changed nothing. The country is pursuing a pre-9/11 fiscal policy in a post-9/11 world." That assessment comes from someone who worked inside Washington for over a decade before joining Goldman Sachs in the 1980s.

America's new faith-based guns-and-butter policy is hurting both guns and butter. The war is costing us $12 billion a month. Hormats examined the Congressional Budget Office's projections for domestic costs: "In 2006, spending on Social Security, Medicare, Medicaid and interest on the federal debt amounted to just under 60% of government revenues" and "if they continue on their current path, they will account for two-thirds by 2015."

Worse yet, these commitments will continue skyrocketing in later decades. The CBO projects the federal debt rising from 40% of GDP to 100% in the next 25 years: "Continuing on this unsustainable path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security."

Hormats warns of the risks of this gross departure from Hamilton's principles: "Of late, the precedents and experiences of past generations have been cast aside. The 9/11 attacks were seen by many legislators as a license to spend more money on nonsecurity programs, and Americans have not been called to make sacrifices. Tax cuts and spending increased on politically popular security-irrelevant domestic programs have been enacted as if there were no expensive defense programs to be funded."

In my opinion, the turning point occurred in late 2002. Remember, the Afghan War was hot. America was in recession and a bear market. The surpluses of the 1990s rapidly disappeared. Corporate scandals were damaging our global standing. Washington was pushing a second round of tax cuts. And the Iraq invasion was imminent.

Treasury Secretary Paul O'Neill, true to Hamiltonian principles, warned the White House of a coming fiscal crisis. The vice president retorted: "Reagan proved deficits don't matter." (Hormats tells me Reagan never said that.) Soon after, Cheney "fired" O'Neill ... and Hamilton's principles of sound war financing were dead.

Unfortunately, Washington's radical new faith-based financing is sabotaging national security. America's unsustainable deficits are making us extremely vulnerable to terrorists whose goal is to "attack the United States, perhaps with chemical, biological, or nuclear weapons capable of killing enormous numbers of people and seriously disrupting the American economy," targeting a "major port or transportation center."

Hormats says America is now "relying on faith over experience, hoping that sustained growth will erase deficits and that the ballooning costs of Social Security, Medicare and Medicaid will be manageable in the coming decades without difficult reforms."

Yet economists now estimate these entitlements can only be "reformed" by either a cut in benefits or an increase in taxes greater that 40%. In short, today's faith-based economics is failing us..."

HELENA, Mont. (MSNBC) - "Wind helped a fire outside Glacier National Park jump firefighters’ control lines Saturday, forcing evacuation orders at a lodge and closing a long stretch of highway, officials said.

When guests of the Summit Station Lodge left Saturday morning to go golfing, hiking, rafting and fishing, the fire was about 8 miles away, said the owner, Jorge Simental. Within three hours, it was a mile away.

“There’s nothing you can do now,” said Dale Warriner, fire information officer. “We are hitting a couple hot spots on the south side with some helicopters, trying to keep it from moving to the south.”

Fire officials ordered guests and nearly all 18 employees to leave the lodge Saturday evening, Simental said. The manager and chief maintenance worker were going to stay “until they have to leave,” he said.

Employees were trying to contact guests and gather their belongings to move them to other lodges, he said.

Fire crews were protecting the lodge and “tearing down some trees that are kind of dangerous, that are very close to cabins,” Simental said.

A 24-mile stretch of U.S. 2, which connects a bridge to a campground, was closed.

The fire had been listed at 420 acres but blew up to about 1,000 acres, or about 1 1/2 square miles, Warriner said.

Another fire north of Helena was still keeping people away from recreation areas and homes, and fire crews appeared to be settling in for a long battle. The fire, burning at nearly 10 square miles, was 15 percent contained.

Meanwhile, officials said a huge, 1,030-square-mile fire in southern Idaho and northern Nevada could be contained as early as Sunday.

“The rain really helped us the other day, which helped bring up that containment,” said fire information officer Pam Bierce. “There are still some hot spots we’re working on.”

BEIJING (Reuters) - "China detained three "underground" Catholic priests unwilling to serve a state-controlled body, a U.S. group has reported, as Beijing and the Vatican press their claims on religious controls.

The three men were caught by police in north China's Inner Mongolia region, having fled there from neighboring Hebei province, the Cardinal Kung Foundation said in a statement emailed late on Saturday.

The detentions came as the Vatican and Beijing test their boundaries of authority following a letter on China's Catholics from Pope Benedict.

China's 12 million Catholics share the same basic religious beliefs but are politically divided between "above-ground" churches approved by the ruling Communist Party and "underground" churches that reject government ties.

On June 30, Pope Benedict issued a letter that urged reconciliation between the two sides. But he said the church must have the power to run its own affairs, including appointing bishops, possibly with government consultation.

The Chinese government has often rejected such claims as interference in "domestic affairs" but has given no detailed public response to the letter.

Parts of Hebei, the priests' home province, are a stronghold of "underground" churches.

The Cardinal Kung Foundation said the three had refused to join the Catholic Patriotic Association, the state-controlled body that seeks to control church affairs.

Plain clothes police detained the priests -- Liang Aijun, Wang Zhong and Gao Jinbao -- on July 24 and they have been transferred to an unknown location, the Foundation said.