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Sunday, 24 February 2008
Today 24 February 2008
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China must not hesitate to curb inflation
Giving an example of how inflationary psychology can set in, Song calculated that one yuan deposited in the bank in 1980 was worth only 95 cents now in real terms, because inflation had eroded the accumulated interest.
A junior manager, a senior manager and their boss are on their way to a meeting. On their way through a park, they come across a wonder lamp. They rub the lamp and a ghost appears.
The ghost says, ‘Normally, one is granted three wishes but as you are three, I will allow one wish each.’
So the eager senior manager shouted, ‘I want the first wish. I want to be in the Bahamas, on a fast boat and have no worries.
‘Pfufffff, and he was gone.
Now the junior manager could not keep quiet and shouted ‘I want to be in Florida with beautiful girls, plenty of food and cocktails.’
Pfufffff, and he was also gone.
The boss calmly said, ‘I want these two idiots back in the office after lunch at 12.35pm.’
MORAL OF THE STORY IS: ‘ALWAYS ALLOW THE BOSSES TO SPEAK FIRST’
After 13 years of research costing more than $150 million, Geron says it is finally ready to conduct an unprecedented test in people with a treatment made from one of the most controversial substances in science.
Therapy that enabled paralyzed rats to walk ready for test on humans, stem-cell firm says
By Steve Johnson 02/24/2008
Using human embryonic stem cells, the Menlo Park company has developed a therapy that enables paralyzed rats to walk and that it claims shows no dangerous side effects in experiments with about 2,000 animals.
Others also are studying such cells for medical uses, including Stanford University scientists, who last week said they had used them to help stroke-disabled lab rats walk better. But none are as close to seeking permission for human tests as Geron, whose treatment is for spinal injuries.
For its application requesting regulatory approval from the U.S. Food and Drug Administration, the public company has gathered 25,000 pages of data - far more than normal for such requests, Geron Chief Executive Dr. Thomas Okarma said. He told analysts recently that Geron would submit it to the FDA during the first part of this year. But he declined to reveal the actual filing date, he said, "to minimize any kind of pressure on the agency."
Yet Geron's bid isn't certain.
Although the FDA would not comment on Geron's application, President Bush objects to most research with embryonic stem cells, which come from discarded embryos. Moreover, his administration has become intrigued with recent studies showing skin cells can be manipulated to have embryonic-like properties without harming an embryo.
In addition, although Geron says it has found nothing unsafe about its treatment, some scientists fear embryonic stem cells might cause tumors or other health problems.
Geron isn't alone in its quest.
Los Angeles-based Advanced Cell Technology also expects to get FDA approval this year to test people with an eye treatment made from human embryonic stem cells.
Nonetheless, Okarma said he is confident he'll be allowed to do the human study.
He and other scientists say the skin-cell technique has technical problems. And he claims no other firm can beat him to the punch.
"They're not even close," he said. "All these companies are Geron wannabes. . . . We are the pioneers of this and we will reap all of the fruits of that pioneering work."
More than 250,000 people in this country have spinal injuries and about 11,000 new cases are reported in the United States each year, according to federal data. For now, most of those suffering paralysis have little hope of regaining their physical functions, said Marcie Roth, executive director of the National Spinal Cord Injury Association in Maryland.
"Our hats are off to companies like Geron," Roth said.
Even if Geron gets to try its cells on people, it could take years for the treatment to be approved for widespread use, said Graig Suvannavejh, an analyst with UBS Investment Research, who doesn't own Geron stock.
However, Ren Benjamin, a Rodman & Renshaw analyst who also owns no Geron stock, said getting the OK for the study could mean a quick payday for Geron, because "investors may get excited and buy shares of the company."
That could be a big boost to Geron, which has consistently lost money since going into business in 1992. It has no products on the market for patients, although it has several in the works.
The company is developing drugs for various types of cancer and HIV. It's also considering using human embryonic stem cells to help people suffering from heart attacks, osteoporosis and liver disease, among other ailments.
Yet Geron's revolutionary spinal treatment, which it began researching in 1995 with investors' funding, has generated the most media attention. That's largely due to a breakthrough Geron reported in 2005 when a study it financed showed the treatment could help paralyzed rats walk.
Embryonic cells can turn into any type of tissue in the body, which is why many scientists think they may have a myriad of medical uses. For the rat study, the cells were coaxed into developing into oligodendrocytes. Those are cells that help nerve fibers replace myelin, a fatty substance that provides insulation, which is important for motor function.
When a spine is damaged, myelin often is stripped off. That can disrupt the body's ability to transmit sensory signals - similar to the way an electrical cord shorts out when its insulation is peeled away - resulting in paralysis.
Okarma said the FDA required his company to go to extraordinary lengths to prove the treatment won't harm people. Given the study's unprecedented nature, that is appropriate, said Alan Trounson, president of the California Institute for Regenerative Medicine, which also finances human embryonic stem-cell research.
"Walking forward purposefully and carefully in this area is what we should be doing," Trounson said.
Many human embryonic stem-cell colonies scientists have been studying are bathed in mouse skin cells, which provide nutrients but also can transmit viruses or other harmful substances to people. So Geron had to create a way to make such colonies without using mouse cells.
In addition, the FDA required Geron to prove that hundreds of rats injected with the cells could remain free of tumors and other toxic side effects for nine months to a year. The company successfully did that, Okarma said, but it was hugely labor intensive.
Under anesthesia, the rats were given injuries much more severe than a paralyzed person normally would experience. That left the animals incapable of regaining bodily functions - even with the treatment. So Geron's researchers had to manually empty each rodents' bladder three times a day for the entire period to keep the rats' kidneys from failing.
Given the sensitivity of the topic and the amount of data Geron has gathered, it could take the FDA months to render a decision. That might enable Advanced Cell Technology, which had been well behind Geron in readying its treatment for human tests, to narrow the gap.
Advanced Cell, which has an office in Alameda, has used human embryonic stem cells to grow retinal pigmented epithelial cells, which it hopes to turn into a treatment for eye diseases such as retinitis pigmentosa and age-related macular degeneration.
It's chief executive, William Caldwell, said he hopes to ask the FDA within months to begin testing the treatment in people. But he said if Okarma is the first to start a human study that's OK, because "I'm one of his greatest fans."
Not everyone is so charitable. Noting that Geron has been saying for several years that it hoped to soon ask the FDA for permission to do the study, some critics have accused the company of raising false hopes. But Okarma is undeterred.
"There will be a lot of surprised people, not only that we'll do it but that the agency approved it," he said. "We know we'll be the first."
Sun Hung Kai boss employed 10 people ‘to please female friend’
SCMP - Feb 24, 2008
Walter Kwok Ping-sheung, chairman of Sun Hung Kai Properties, hired up to 10 middle-ranking employees to please his female friend, sources have claimed.
The staff were personal friends of the married Mr Kwok’s close friend, Ida Tong Kam-hing, 61, and recruited in departments focusing on mainland investment, land acquisition and leasing, according to one well-placed source.
These employees allegedly used their direct access to the chairman several times to advise him to buy various sites in Beijing which were 20 to 30 per cent above the market value.
If the purchases had been approved, they would have scooped commissions from the sellers for negotiating the exorbitant prices.
However, the deals were never completed because vice-chairman Thomas Kwok Ping-kwong and managing director Raymond Kwok Ping-luen vetoed the purchases.
Some of the employees are still with the company, but they will be weeded out now that the 57-year-old chairman has stepped down temporarily from his position.
Hong Kong’s biggest property developer shocked the business community when it announced last Monday that its chairman - one of three brothers who control the company - would take a “leave of absence” with immediate effect.
His two brothers will assume his duties. Since the announcement, a series of revelations have emerged about the reason behind the decision.
The other brothers were apparently unhappy at the influence Ms Tong was having over their older brother’s decision-making and her own ambitions for the company.
Unable to tolerate the situation any longer, the younger brothers asked their mother, Kwong Siu-hing, to pass judgment in the family “court”. Ms Kwong holds the largest stake in Sun Hung Kai through a family trust.
These revelations come as company records reveal that Walter Kwok has applied to change the name of a company he registered on January 23, called Sun Hung Kai Properties International Limited, on the day he announced he was stepping down from the company.
Goldman Sachs raises China’s 2008 inflation forecast to 6.8%
24 February 2008
BEIJING, Feb. 24 (Xinhua) -- The U.S. investment bank Goldman Sachs has lifted forecast of China’s inflation this year to 6.8 percent from 4.5 percent in light of the rapid growth in money supply.
M2, the broader measure of money supply, which covers cash in circulation plus all deposits, rose 18.94 percent by the end of January, 2.22 percentage points higher than a month earlier, the People’s Bank of China (PBOC) said on Feb. 14.
Liang Hong, the bank’s chief China economist, said in a recent research report that inflation may continue accelerating in the short term and rise by double digits in some coming months.
The bank also raised forecast for China’s inflation next year to 3 percent from 2.5 percent.
Liang noted the high inflation would add pressure to the faster appreciation of the local currency and the yuan was expected to appreciate 12 percent in the coming 12 months.
The yuan’s appreciation was the most practical and the best way to tame inflation and avoid an economic “hard landing”, the report noted.
The yuan has appreciated more than 2.2 percent against the U.S. dollar so far this year, after climbing 6.9 percent against the greenback in 2007.
Analysts believed the PBOC was allowing faster appreciation of the yuan in an attempt to curb the rising inflation.
China’s consumer price index (CPI), the main gauge of inflation, retouched an 11-year monthly high with a 7.1-percent rise in January. Huge increases in food prices had pushed up CPI by 4.8 percent in 2007, also the highest level since 1997.
Yi Gang, PBOC’s vice governor, told a seminar in Beijing Sunday that the primary risk to China’s economy was inflation and the government would stick to the tight monetary policy.
China to Stay With Tight Monetary Policy, PBOC Says
Feb. 24 (Bloomberg) -- China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People’s Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to “vigorously” soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an “optimal” tightening package out of currency, interest-rate and money-supply measures, he said.
Last month’s 7.1 percent inflation rate was the nation’s highest in more than 11 years. Snowstorms that started in mid- January in provinces such as Zhejiang, Guangxi and Jiangxi closed factories, paralysed transportation and disrupted food and power supplies, pushing up prices that had begun to soar last year.
“The central bank will stick with a tightened monetary policy this year despite uncertain factors domestically and externally,” Yi said, referring to the snowstorms and the deteriorating world economic outlook as the U.S. subprime crisis unfolds. “Inflation remains the biggest risk in the economy this year.”
“The inflation situation is serious and upward pressure will be further felt throughout the first quarter,” Xing Ziqiang, an economist at China International Capital Corp., said today at the conference in Beijing. Xing predicted that the pace of consumer price increases may be higher than 7 percent in the first three months.
More Flexible Yuan
The central bank will make the yuan more flexible and use interest rate tools to curb inflation, it said in its monetary policy report issued on Feb. 22. The bank has kept borrowing costs steady this year after six increases in 2007 pushed the key one-year lending rate to 7.47 percent.
Currency appreciation is the “most effective tool” to direct more resources to industries that will boost domestic consumption, Yi said. The Chinese currency gained 7 percent last year versus the dollar, twice as fast as in 2006, according to Bloomberg data.
“Because of the growing interest-rate differentials between China’s yuan and the U.S. dollar, we believe currency adjustment will take on a larger role in tightening monetary conditions this year, compared with the past,” Liang Hong, a senior economist at Goldman Sachs Group Inc. in Hong Kong, wrote in a recent note.
Currency Appreciation
Liang said the central bank may front-load currency appreciation over the next few months, with the full year’s gains totalling 12 percent against the U.S. dollar.
Yi also said today that growth in M2, the broadest measure of money supply, will slow to 16 percent this year. It rose 18.9 percent in January to 41.8 trillion yuan ($5.9 trillion) from a year earlier.
Bank lending growth is expected to be lower than last year, Yi said. Outstanding loans in yuan jumped 17 percent to 26.97 trillion yuan at the end of January from a year earlier.
The subprime crises in the U.S. has sparked concerns about the potential for a slowdown of Chinese exports.
“The impact of a slowdown in the U.S. economy on China’s export would be slower growth, rather than shrinking exports, because China’s exports are mostly cheap and necessary consumer goods,” said Justin Yifu Lin, head of the China Center for Economic Research at Peking University, who was appointed as World Bank’s chief economist on Feb. 5.
Taiwan spouses of mainland women angered by Hsieh’s insult
Frank Hsieh, a candidate in Taiwan’s leader election, might pay a price for his excessive frankness this time, after calling local men who have married women from the mainland of China as “piggy brothers”, according to Taiwan media reports.
The Democratic Progressive Party (DPP) candidate for the election have insulted many local men with mainland wives when he told Taiwan men not to pin their hopes on the opening of exchanges across the Taiwan Strait, in attempt to marry “cheap” mainland women.
Wang Bao-jun, spokesman for Taiwan’s Association for the Care of New Residents, said his wife is a graduate of the mainland’s prestigious Tsinghua University and she has become part of Taiwan people. He wondered how Hsieh could use the word “cheap” when talking about the mainland spouses of Taiwan people.
In Taiwan, about 280,000 local residents have married mainland people. The total number of people living in families with mainland members has topped 500,000, according to local media.
Traditionally, Chinese regard the pig as a stupid animal.
America’s housing crisis spreads to the middle classes as property renovators hand back the keys to homes they can’t sell, reports James Doran
The Observer February 24 2008
More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties, a signal that the housing crisis has spread to the wealthier middle classes who, until now, were considered immune to the worst rigours of the economic downturn.
Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody’s, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market.
Barb Corwin, 37, knows all about negative equity. She has watched hundreds of thousands of dollars worth of value drain out of three properties she bought just a few years ago. ‘I have put 10 years of my life into buying and renovating properties, and I believed that I would sell them, pay off the mortgages and make a profit. But that didn’t happen. I feel like the past 10 years have been wasted.’
Corwin owns a popular piano bar in Ann Arbor, Michigan, a suburb of Detroit known for its big luxury homes and wealthy inhabitants, such as Bill Ford Jr, the chief executive of the car maker.
Corwin considers herself ‘a house flipper’ - someone who buys properties on the cheap in the hope of turning a profit after upgrading the bathroom, kitchen and other fittings. ‘I was a fan of Flip That House,’ she says, referring to one of the many American TV shows that feature the lives of flippers like her.
Corwin bought a four-bedroom house for about $315,000 five years ago. ‘I thought it was a great price,’ she says. ‘I put about $365,000 into it, an all-new bathroom, granite work surfaces in the kitchen, stainless steel appliances. It was a beautiful place.’
But then the market crashed and Corwin was stuck with debts of more than $600,000 on a property the market valued at less than she paid for it. She was forced to sell a couple of weeks ago for just $290,000. ‘I still owe the bank money,’ she says.
Corwin is also saddled with a condominium she bought to let. ‘I have had to rent it out to people who work for me at the bar because I just couldn’t get enough rent to make the mortgage payments on the open market,’ she says.
Then there is her own home, which she is also trying to sell in an effort to alleviate the pressure of such a large mortgage debt. ‘I bought the home I currently live in for $369,000, I put about $25,000 into renovations, and I can’t list it for more than $364,000,’ she says. ‘None of the banks will give me a refinance or another mortgage.’
Corwin’s story may sound excessive and out of the ordinary, but it is not.David Wyss, the chief economist at Standard & Poor’s in New York, closely monitors the US housing market and believes about half of all the properties in negative equity today were bought by would-be flippers.
‘The numbers being talked about by the Mortgage Bankers Association at a conference here in New York last month showed that between 40 and 50 per cent of properties in foreclosure in 2007 were investment properties,’ Wyss says. ‘The banks that lent the mortgages did not know: they believed when the loans were made that they were financing primary residences.’
The slow realisation that the majority of people in negative equity have absolutely no interest in keeping their homes, because they don’t live in them, further compounds the housing market crisis.
‘Foreclosure is a good option for flippers,’ Wyss says. ‘If your house is in negative equity and you can’t sell it, why should you go on making mortgage payments? It makes little commercial sense. Instead, you can just walk away and hand the keys over to the bank.’
The worry now is that the US market could be flooded with another 5 million or more foreclosed houses in the next year, deepening the crisis further still.
On Tuesday, Standard & Poor’s will publish the important Case-Shiller house price index and the news is not expected to be good.
‘I am expecting an 8.1 per cent [year on year] decline in house prices for December, compared with 7.7 per cent in November and an 8.5 per cent decline in prices for the year as a whole,’ Wyss says.
Meanwhile, the US government is considering numerous measures to combat the rise of foreclosures and the damage caused by negative equity, including economic aid for homeowners and a complex mortgage guarantee scheme proposed last week by the Office of Thrift Services, the government department that deals with debt.
The candidates running for president on all sides of the political divide are making as much capital as they can out of the crisis, with Senator Hillary Clinton, the trailing Democrat, pledging a moratorium on all foreclosures if she is elected.
But such promises have come too late for the likes of Barb Corwin, who nurses a drink at her bar and contemplates her dire finances. ‘This is nothing short of catastrophic,’ she says. ‘I cannot see a way out.’
America’s housing crisis spreads to the middle classes as property renovators hand back the keys to homes they can’t sell, reports James Doran
The Observer February 24 2008
More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties, a signal that the housing crisis has spread to the wealthier middle classes who, until now, were considered immune to the worst rigours of the economic downturn.
Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody’s, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market.
Barb Corwin, 37, knows all about negative equity. She has watched hundreds of thousands of dollars worth of value drain out of three properties she bought just a few years ago. ‘I have put 10 years of my life into buying and renovating properties, and I believed that I would sell them, pay off the mortgages and make a profit. But that didn’t happen. I feel like the past 10 years have been wasted.’
Corwin owns a popular piano bar in Ann Arbor, Michigan, a suburb of Detroit known for its big luxury homes and wealthy inhabitants, such as Bill Ford Jr, the chief executive of the car maker.
Corwin considers herself ‘a house flipper’ - someone who buys properties on the cheap in the hope of turning a profit after upgrading the bathroom, kitchen and other fittings. ‘I was a fan of Flip That House,’ she says, referring to one of the many American TV shows that feature the lives of flippers like her.
Corwin bought a four-bedroom house for about $315,000 five years ago. ‘I thought it was a great price,’ she says. ‘I put about $365,000 into it, an all-new bathroom, granite work surfaces in the kitchen, stainless steel appliances. It was a beautiful place.’
But then the market crashed and Corwin was stuck with debts of more than $600,000 on a property the market valued at less than she paid for it. She was forced to sell a couple of weeks ago for just $290,000. ‘I still owe the bank money,’ she says.
Corwin is also saddled with a condominium she bought to let. ‘I have had to rent it out to people who work for me at the bar because I just couldn’t get enough rent to make the mortgage payments on the open market,’ she says.
Then there is her own home, which she is also trying to sell in an effort to alleviate the pressure of such a large mortgage debt. ‘I bought the home I currently live in for $369,000, I put about $25,000 into renovations, and I can’t list it for more than $364,000,’ she says. ‘None of the banks will give me a refinance or another mortgage.’
Corwin’s story may sound excessive and out of the ordinary, but it is not. David Wyss, the chief economist at Standard & Poor’s in New York, closely monitors the US housing market and believes about half of all the properties in negative equity today were bought by would-be flippers.
‘The numbers being talked about by the Mortgage Bankers Association at a conference here in New York last month showed that between 40 and 50 per cent of properties in foreclosure in 2007 were investment properties,’ Wyss says. ‘The banks that lent the mortgages did not know: they believed when the loans were made that they were financing primary residences.’
The slow realisation that the majority of people in negative equity have absolutely no interest in keeping their homes, because they don’t live in them, further compounds the housing market crisis.
‘Foreclosure is a good option for flippers,’ Wyss says. ‘If your house is in negative equity and you can’t sell it, why should you go on making mortgage payments? It makes little commercial sense. Instead, you can just walk away and hand the keys over to the bank.’
The worry now is that the US market could be flooded with another 5 million or more foreclosed houses in the next year, deepening the crisis further still.
On Tuesday, Standard & Poor’s will publish the important Case-Shiller house price index and the news is not expected to be good.
‘I am expecting an 8.1 per cent [year on year] decline in house prices for December, compared with 7.7 per cent in November and an 8.5 per cent decline in prices for the year as a whole,’ Wyss says.
Meanwhile, the US government is considering numerous measures to combat the rise of foreclosures and the damage caused by negative equity, including economic aid for homeowners and a complex mortgage guarantee scheme proposed last week by the Office of Thrift Services, the government department that deals with debt.
The candidates running for president on all sides of the political divide are making as much capital as they can out of the crisis, with Senator Hillary Clinton, the trailing Democrat, pledging a moratorium on all foreclosures if she is elected.
But such promises have come too late for the likes of Barb Corwin, who nurses a drink at her bar and contemplates her dire finances. ‘This is nothing short of catastrophic,’ she says. ‘I cannot see a way out.’
14 comments:
China must not hesitate to curb inflation
Giving an example of how inflationary psychology can set in, Song calculated that one yuan deposited in the bank in 1980 was worth only 95 cents now in real terms, because inflation had eroded the accumulated interest.
A junior manager, a senior manager and their boss are on their way to a meeting. On their way through a park, they come across a wonder lamp. They rub the lamp and a ghost appears.
The ghost says, ‘Normally, one is granted three wishes but as you are three, I will allow one wish each.’
So the eager senior manager shouted, ‘I want the first wish. I want to be in the Bahamas, on a fast boat and have no worries.
‘Pfufffff, and he was gone.
Now the junior manager could not keep quiet and shouted ‘I want to be in Florida with beautiful girls, plenty of food and cocktails.’
Pfufffff, and he was also gone.
The boss calmly said, ‘I want these two idiots back in the office after lunch at 12.35pm.’
MORAL OF THE STORY IS: ‘ALWAYS ALLOW THE BOSSES TO SPEAK FIRST’
Standing in front of a shredder with a piece of paper in his hand.
‘Listen,’ said the CEO, ‘this is a very sensitive and important document, and my secretary has left.
Can you make this thing work?’
‘Certainly,’ said the young executive.
He turned the machine on, inserted the paper, and pressed the start button.
‘Excellent, excellent!’ said the CEO as his paper disappeared inside the shredder machine. ‘I just need one copy.’
LESSON II - NEVER, NEVER ASSUME THAT YOUR BOSS KNOWS EVERYTHING.
An American and a Japanese were sitting on the plane on the way to LA.
When the American turned to the Japanese and asked, ‘What kind of -ese are you?’
The Japanese confused, replied, ‘Sorry but I don’t understand what you mean.’
The American repeated, ‘What kind of -ese are you?’
Again, the Japanese was confused over the question.
The American, now irritated, then yelled, ‘What kind of -ese are you ... are you a Chinese, Japanese, Vietnamese!, etc......???’
The Japanese then replied, ‘Oh, I am Japanese.’
A while later the Japanese turned to the American and asked ‘What kind of ‘key’ was he.
The American, frustrated, yelled, ‘What do you mean what kind of -kee’ am I ?!’
The Japanese said, ‘Are you a Yankee, donkee, or monkee?’
LESSON III - NEVER INSULT ANYONE.
The organs of the body were having a meeting, trying to decide who was in charge. Each organ took a turn to speak up:
Brain......... I should be in charge because I run all body functions.
Blood........ I should be in charge because I circulate oxygen for the brain.
Stomach... I should be in charge because I process food to the brain.
Legs......... I should be in charge because I take the brain where it wants to go.
Eyes......... I should be in charge because I let the brain see where it’s going.
Asshole.....I should be in charge because I get rid of your waste.
All the other parts laughed so hard and this made the asshole very mad.
To prove his point, the asshole immediately slammed tightly closed and, stayed that way for 6 days.
Refusing to rid the body of any waste whatsoever.
Day 1 - Brain got a terrible headache and cried out for relief.
Day 2 - Stomach got bloated and began to ache terribly.
Day 3 - Legs got cramps and became
unstable.
Day 4 - Eyes became watery and vision became blurred.
Day 5 - Blood became toxic and poisoned the body.
Day 6 -The other organs agreed to let the asshole be in charge.
MORAL OF THE STORY: NO MATTER WHO YOU ARE, OR HOW IMPORTANT YOU THINK YOU ARE, YOU WILL FIND THAT IT IS ALWAYS THE ASSHOLE THAT IS IN CHARGE.
Top 10 Mistakes Traders Make
一篇值得思考的文章：人的七种才华与职业
在人生中，第一要紧的事是发现自我，为了这个目的，各位经常需要孤独和深思。这件事将深深地影响你的一生，决定你的成败。
我们每一个人在世界上，都是一个伟大的奇迹。不为什么，只因为我们每个人都是独一无二的。古往今来，绝对没有一个和自己一模一样的人，因此我们必须活出真情自我，活出独一无二的人生。
人才学家归纳出人类的七种才华，相信每个人都能兼得其中的几项，你可以由此作出对自己的认知和评估，来决定和调整自己未来的发展方向。
第一种才华：善于人际沟通
你可以发现有些人天生具有交际手腕，不仅是沟通高手，慧眼识人，而且擅长组织，富有领导能力，并且具有高度的社会适应力。这种人适合的工作有经理、行政主管、社会学家、人类学家、心理辅导、心理学家、公关、推销员、旅行业、社会工作者。
第二种才华：语言方面的智慧
比方说一个人很容易学会某种方言，甚至多种语言，以及具有语言表达及写作天赋。他适合当作家、记者、律师、教师、演讲家，以及担任翻译、编辑、电脑文字处理、播音员、参谋等等。
第三种才华：感受空间的能力
建筑师、艺术家、设计师特别能够感觉空间。他们能够透过想象思考，并且具有高度美感。代表性的职业有工程师、美工、室内设计、画家、雕塑家、摄影师等等。
第四种才华：体能方面的智力
像运动员、舞蹈家，以及具有各种手艺技巧的人。这种人适合的职业有演员、舞蹈家、模特儿、技工、木匠、体育老师、健美教练、职业选手、珠宝设计师等。
第五种才华：音乐的才华
这种人听觉敏锐，音感特佳，会听会唱，会写歌作曲。音乐家、演奏家、调音师都具有这种才华。此外，适合的工作有音乐节目主持人、乐器制作者、录音师、指挥、歌手、音乐教师。
第六种才华：数理逻辑的才能
有些人特别善于数字思考，精于抽象逻辑，很科学、很理智、很会推理。代表性职业有会计师、保险业者、科学家、数学家、统计学家、电脑分析师、经济学家、自然科学工作者。
第七种才华：哲学和思考的智慧
凡是一个人有对人生和宇宙的探知热忱，甚至对自我的认知和反省，以及道德境界的追求，都属于这一范畴。适合的职业有哲学家、神学家、宗教研究，以及心理学领域的心理学家、心理教学、心理辅导治疗等。
你可以依据这七种才华，找出自己的天赋，开发自己的潜能，再来把自己的一生推向实现自我的境界。你可知道，人类的大脑才开发了1／10，我们每一个人都拥有尚未发掘出来的潜能。这如同在银行存有巨大款项，却不知如何支配一样的浪费与可惜。
增设社交网指数
在人的所有才华中，处理人际关系的能力是极其重要的，跟一生的成败有很大的关联。
你可知道，缺乏人际关系，是形成失败甚至死亡的重大因素吗？事实证明，一个人在生活中，如果不能建立起一个良好的人际网络，比方说与家人、朋友之间的情谊，与社区、团体、公司维系适度的关系，社交网指数很低的话，在10年内的死亡率比社交正常良好的人要高出2倍。因为人际关系不佳，会导致许多心理和生理方面的疾病。
你也许不知道，有人对美国500家大企业做过研究，发现这些大企业提升行政主管的主要考核标准，就是此人的人际沟通能力。有专家指出，80%在事业上失败的人，都是由于人际技巧太差的缘故。
有一项研究指出，经理人员大约有50～80%的时间是花在与上司、下属和外界的沟通上。这是因为想要动员所有的人全力以赴，全靠人际沟通技巧。要做到这点，就得看你是否具有人际感应与思考力，并且运用这种慧眼识人的本领去与人协商，去说服他人，去排难解纷，去取得资讯，才能做好统合的工作。
根据心理学家的说法，人际沟通有60～90%是属于无声的身体语言，诸如表情、姿势、手势、眼神、身体距离、触摸方式等等。令人更为惊讶的是，光是身体就有70万种不同的动作，脸部有25万种动作，手语有5000种。
要细微地观察这些，纯属不易，不过至少亲疏、迎拒是可以判断的，比如谁主导谈话、眼睛对视的方式、谁在主动迎合等等，这些均属判断关系和识人之道。
然而，瞬间识人的确不易，这是因为每个人都难免对别人产生心理预期和偏见之故。通过个人不知不觉建立起来的复杂心理架构，便决定了我们看待他人的态度，以及自我的反应。通常人们总是重视第一印象，用以解释他人的行为，并预测他人未来的行为。当然这是一种具有风险的习惯。
其实，一个真正的人际关系高手，不仅能够识人知人、通晓人际关系理论，而且还能够活用这些知识，在现实中与人合作相处。这是因为他们能够洞悉他人的动机、意图、心情、感受和思路，并且将对方的动向也事先掌握住了。这可真是一项神奇的本领和智慧啊。成事在人，这样的人，做事当然是水到渠成。
省视自己的人际关系
人，不可能不与他人发生关系。
此刻，你是否在与一个同事、下属、朋友、邻居……生气恼火呢？你是否在为对手，甚至老公、老婆而忧心烦恼呢？
你可知道所有的负面和挫折情绪，对我们都不会有害处，而且还有帮助。人际关系，正像一面镜子，使我们能把从他人身上反映出来的问题，照到我们尚未认识自己的地方。
要把人际关系做好，自己的襟怀、气度和自省能力必不可少。
关于人际关系的才华，你可以问问自己，是否很容易交朋友，能自然地和陌生人交谈，是否有亲和力或同情心？
或者你是一个非常害羞的人，不能感应到身边的人际互动关系，也不懂察言观色，不能体会别人的情感、动机和意图。或者你不仅常常误解别人，又很容易遭人误解；对他人怀有敌意，也不信任他人，容易与人起争执。那你是一个缺乏朋友的人，危难时几乎无人可求。
这一切都没有关系，因为人际关系的才华不只是一种天赋，也不仅仅局限于个人的魅力，它是可以经过学习获得的。
一个人即使再排斥与人交流、听人诉说，或者认为交际应酬是件痛苦不堪的事，但是也应当经常并拥有一个小小的人际关系网络。它关系到你事业的成功，也关系到你人生的幸福和健康。
首先将你的名字写在一张纸的中央，并画出一个小圆圈，然后再画下四个愈来愈大的同心圆。
第一圈写下你所有的知心人，例如配偶、亲人，危难中可求助的人士。
第二圈则列出你经常周旋来往的好朋友，你的同学、至交，也可以是同事。
第三圈则写下你的社交圈内地位重要的人，在关键时刻有力量帮助别人的角色。
第四圈则囊括一切比较熟识的人。
最后，你可以依照与这些人士来往的亲疏程度，再与你的名字画双线或单线，是单向交往或者是双向交往并画上箭头，表示出关系的流向。
这样的做法，有助于我们透视自己的人际关系，并由此省视我们人际的联系、支援与合作。
我们对待人际关系的态度，尤其是对我们亲近的人，可以反映出自己的心态。如果有正面的体验，便会在人际关系上和谐，并且能更上一层楼。反之将会产生困难。不过克服困难也是一种治疗和调整。
爱的力量是神奇的，只要怀有爱心，人际关系就容易达到和谐。爱心，不仅使我们肯定自己，也使我们学会欣赏他人。改善人际关系的第一步，就是让自己做一个爱能强大的人。
增进及扩张人际关系的方法
许多书籍，许多学派，都介绍过增进人际关系的技巧和能力的种种方法，在这里我们也罗列出一些要点：
1.要拓展人际关系网，无论你是什么年龄，无论你处在什么地位，千万不要自外于人，要下定决心不断结交新的朋友，使你的人际关系网充满活力。
2.充分利用个人际遇，将现有的亲戚、同事、朋友，以及业务上有来往关系的人，列入备忘录，并且勤加联系。
3.学习正确的社交礼仪和应对之道。
4.选读一门人际沟通课程，或者找出这方面的名著自修。
5.尽力多参加各种社团，或者担任志愿者等，这些活动会使你认识许多志同道合的朋友。
6.培养个人的兴趣爱好，以志趣会友，如加入读书会、登山社、球友会、合唱队等，这样的主题聚会和活动，能使你在轻松愉快中自然地交到朋友。
7.生日或者节假日，举办小型家庭聚会，并一定要邀请新朋友与会。
8.定期与家人聚餐，经常沟通思想，感情像花草树木一样，是需要培育的。
9.学习主动与人交谈的技巧，哪怕是同舟同车的陌生人。
10.观察他人是如何与人沟通的，注意学习社交名流的行为举止。
11.信息时代，利用电脑网络系统交友。网上聊天交谈有模拟的特点，对内向性格的人可能是很合适的操练。
12.主动发起同事间的休闲活动，以增进情谊，激发脑力。
除了这些实际有效的行动外，更别忘了人际沟通的要点，在于倾听的能力、表达的能力、排忧解难的能力，以及共谋合作的能力。
对于个人而言，如果想要保持沟通管道畅通，自身必须做到公正开明，不戴有色眼镜看人，也不偏执己见。别人说话时眼睛要注视对方，鼓励对方把意思表达完整，同时不要干扰别人说话，并且尽量表现感同身受。
另外，在增进人际能力方面，别忘了自己做人的态度。
1.一个经常喜欢批评、抱怨、谴责他人的人，可以保证人见人恶。千万别让自己成为一个喜欢批评、抱怨和谴责他人的人。
2.要真心关怀别人，别尽说些表里不一、口惠而实不至的空话，这是自以为聪明的反效果做法。
3.自尊尊人，尤其是尊重他人，对人际交往有奇效。
4.多询问意见，少发号施令。
5.心存一颗感恩的心，并表达真诚的感激之情。
6.微笑绝对讨人喜欢。
7.懂得赞美，凡事随缘同喜。
8.做一个有高度幽默感的人。
最后献上十大要诀，这几个句子，寓合了待人处世的真理和精义。
1.肚量大一点；
2.嘴巴小一点；
3.行动快一点；
4.效率高一点；
5.头脑活一点；
6.理由少一点；
7.做事多一点；
8.脾气少一点；
9.说话轻一点；
10.微笑露一点。
After 13 years of research costing more than $150 million, Geron says it is finally ready to conduct an unprecedented test in people with a treatment made from one of the most controversial substances in science.
Therapy that enabled paralyzed rats to walk ready for test on humans, stem-cell firm says
By Steve Johnson
02/24/2008
Using human embryonic stem cells, the Menlo Park company has developed a therapy that enables paralyzed rats to walk and that it claims shows no dangerous side effects in experiments with about 2,000 animals.
Others also are studying such cells for medical uses, including Stanford University scientists, who last week said they had used them to help stroke-disabled lab rats walk better. But none are as close to seeking permission for human tests as Geron, whose treatment is for spinal injuries.
For its application requesting regulatory approval from the U.S. Food and Drug Administration, the public company has gathered 25,000 pages of data - far more than normal for such requests, Geron Chief Executive Dr. Thomas Okarma said. He told analysts recently that Geron would submit it to the FDA during the first part of this year. But he declined to reveal the actual filing date, he said, "to minimize any kind of pressure on the agency."
Yet Geron's bid isn't certain.
Although the FDA would not comment on Geron's application, President Bush objects to most research with embryonic stem cells, which come from discarded embryos. Moreover, his administration has become intrigued with recent studies showing skin cells can be manipulated to have embryonic-like properties without harming an embryo.
In addition, although Geron says it has found nothing unsafe about its treatment, some scientists fear embryonic stem cells might cause tumors or other health problems.
Geron isn't alone in its quest.
Los Angeles-based Advanced Cell Technology also expects to get FDA approval this year to test people with an eye treatment made from human embryonic stem cells.
Nonetheless, Okarma said he is confident he'll be allowed to do the human study.
He and other scientists say the skin-cell technique has technical problems. And he claims no other firm can beat him to the punch.
"They're not even close," he said. "All these companies are Geron wannabes. . . . We are the pioneers of this and we will reap all of the fruits of that pioneering work."
More than 250,000 people in this country have spinal injuries and about 11,000 new cases are reported in the United States each year, according to federal data. For now, most of those suffering paralysis have little hope of regaining their physical functions, said Marcie Roth, executive director of the National Spinal Cord Injury Association in Maryland.
"Our hats are off to companies like Geron," Roth said.
Even if Geron gets to try its cells on people, it could take years for the treatment to be approved for widespread use, said Graig Suvannavejh, an analyst with UBS Investment Research, who doesn't own Geron stock.
However, Ren Benjamin, a Rodman & Renshaw analyst who also owns no Geron stock, said getting the OK for the study could mean a quick payday for Geron, because "investors may get excited and buy shares of the company."
That could be a big boost to Geron, which has consistently lost money since going into business in 1992. It has no products on the market for patients, although it has several in the works.
The company is developing drugs for various types of cancer and HIV. It's also considering using human embryonic stem cells to help people suffering from heart attacks, osteoporosis and liver disease, among other ailments.
Yet Geron's revolutionary spinal treatment, which it began researching in 1995 with investors' funding, has generated the most media attention. That's largely due to a breakthrough Geron reported in 2005 when a study it financed showed the treatment could help paralyzed rats walk.
Embryonic cells can turn into any type of tissue in the body, which is why many scientists think they may have a myriad of medical uses. For the rat study, the cells were coaxed into developing into oligodendrocytes. Those are cells that help nerve fibers replace myelin, a fatty substance that provides insulation, which is important for motor function.
When a spine is damaged, myelin often is stripped off. That can disrupt the body's ability to transmit sensory signals - similar to the way an electrical cord shorts out when its insulation is peeled away - resulting in paralysis.
Okarma said the FDA required his company to go to extraordinary lengths to prove the treatment won't harm people. Given the study's unprecedented nature, that is appropriate, said Alan Trounson, president of the California Institute for Regenerative Medicine, which also finances human embryonic stem-cell research.
"Walking forward purposefully and carefully in this area is what we should be doing," Trounson said.
Many human embryonic stem-cell colonies scientists have been studying are bathed in mouse skin cells, which provide nutrients but also can transmit viruses or other harmful substances to people. So Geron had to create a way to make such colonies without using mouse cells.
In addition, the FDA required Geron to prove that hundreds of rats injected with the cells could remain free of tumors and other toxic side effects for nine months to a year. The company successfully did that, Okarma said, but it was hugely labor intensive.
Under anesthesia, the rats were given injuries much more severe than a paralyzed person normally would experience. That left the animals incapable of regaining bodily functions - even with the treatment. So Geron's researchers had to manually empty each rodents' bladder three times a day for the entire period to keep the rats' kidneys from failing.
Given the sensitivity of the topic and the amount of data Geron has gathered, it could take the FDA months to render a decision. That might enable Advanced Cell Technology, which had been well behind Geron in readying its treatment for human tests, to narrow the gap.
Advanced Cell, which has an office in Alameda, has used human embryonic stem cells to grow retinal pigmented epithelial cells, which it hopes to turn into a treatment for eye diseases such as retinitis pigmentosa and age-related macular degeneration.
It's chief executive, William Caldwell, said he hopes to ask the FDA within months to begin testing the treatment in people. But he said if Okarma is the first to start a human study that's OK, because "I'm one of his greatest fans."
Not everyone is so charitable. Noting that Geron has been saying for several years that it hoped to soon ask the FDA for permission to do the study, some critics have accused the company of raising false hopes. But Okarma is undeterred.
"There will be a lot of surprised people, not only that we'll do it but that the agency approved it," he said. "We know we'll be the first."
Sun Hung Kai boss employed 10 people ‘to please female friend’
SCMP - Feb 24, 2008
Walter Kwok Ping-sheung, chairman of Sun Hung Kai Properties, hired up to 10 middle-ranking employees to please his female friend, sources have claimed.
The staff were personal friends of the married Mr Kwok’s close friend, Ida Tong Kam-hing, 61, and recruited in departments focusing on mainland investment, land acquisition and leasing, according to one well-placed source.
These employees allegedly used their direct access to the chairman several times to advise him to buy various sites in Beijing which were 20 to 30 per cent above the market value.
If the purchases had been approved, they would have scooped commissions from the sellers for negotiating the exorbitant prices.
However, the deals were never completed because vice-chairman Thomas Kwok Ping-kwong and managing director Raymond Kwok Ping-luen vetoed the purchases.
Some of the employees are still with the company, but they will be weeded out now that the 57-year-old chairman has stepped down temporarily from his position.
Hong Kong’s biggest property developer shocked the business community when it announced last Monday that its chairman - one of three brothers who control the company - would take a “leave of absence” with immediate effect.
His two brothers will assume his duties. Since the announcement, a series of revelations have emerged about the reason behind the decision.
The other brothers were apparently unhappy at the influence Ms Tong was having over their older brother’s decision-making and her own ambitions for the company.
Unable to tolerate the situation any longer, the younger brothers asked their mother, Kwong Siu-hing, to pass judgment in the family “court”. Ms Kwong holds the largest stake in Sun Hung Kai through a family trust.
These revelations come as company records reveal that Walter Kwok has applied to change the name of a company he registered on January 23, called Sun Hung Kai Properties International Limited, on the day he announced he was stepping down from the company.
Goldman Sachs raises China’s 2008 inflation forecast to 6.8%
24 February 2008
BEIJING, Feb. 24 (Xinhua) -- The U.S. investment bank Goldman Sachs has lifted forecast of China’s inflation this year to 6.8 percent from 4.5 percent in light of the rapid growth in money supply.
M2, the broader measure of money supply, which covers cash in circulation plus all deposits, rose 18.94 percent by the end of January, 2.22 percentage points higher than a month earlier, the People’s Bank of China (PBOC) said on Feb. 14.
Liang Hong, the bank’s chief China economist, said in a recent research report that inflation may continue accelerating in the short term and rise by double digits in some coming months.
The bank also raised forecast for China’s inflation next year to 3 percent from 2.5 percent.
Liang noted the high inflation would add pressure to the faster appreciation of the local currency and the yuan was expected to appreciate 12 percent in the coming 12 months.
The yuan’s appreciation was the most practical and the best way to tame inflation and avoid an economic “hard landing”, the report noted.
The yuan has appreciated more than 2.2 percent against the U.S. dollar so far this year, after climbing 6.9 percent against the greenback in 2007.
Analysts believed the PBOC was allowing faster appreciation of the yuan in an attempt to curb the rising inflation.
China’s consumer price index (CPI), the main gauge of inflation, retouched an 11-year monthly high with a 7.1-percent rise in January. Huge increases in food prices had pushed up CPI by 4.8 percent in 2007, also the highest level since 1997.
Yi Gang, PBOC’s vice governor, told a seminar in Beijing Sunday that the primary risk to China’s economy was inflation and the government would stick to the tight monetary policy.
China to Stay With Tight Monetary Policy, PBOC Says
Feb. 24 (Bloomberg) -- China, which is expected to have 10 percent economic growth this year, will stick with a tight monetary policy as controlling inflation remains a top priority, the vice governor of the People’s Bank of China said.
The central bank will boost open-market operations and increase the required reserve ratios for commercial banks to “vigorously” soak up liquidity, Yi Gang said today at an economic forum in Beijing. The central bank will select an “optimal” tightening package out of currency, interest-rate and money-supply measures, he said.
Last month’s 7.1 percent inflation rate was the nation’s highest in more than 11 years. Snowstorms that started in mid- January in provinces such as Zhejiang, Guangxi and Jiangxi closed factories, paralysed transportation and disrupted food and power supplies, pushing up prices that had begun to soar last year.
“The central bank will stick with a tightened monetary policy this year despite uncertain factors domestically and externally,” Yi said, referring to the snowstorms and the deteriorating world economic outlook as the U.S. subprime crisis unfolds. “Inflation remains the biggest risk in the economy this year.”
“The inflation situation is serious and upward pressure will be further felt throughout the first quarter,” Xing Ziqiang, an economist at China International Capital Corp., said today at the conference in Beijing. Xing predicted that the pace of consumer price increases may be higher than 7 percent in the first three months.
More Flexible Yuan
The central bank will make the yuan more flexible and use interest rate tools to curb inflation, it said in its monetary policy report issued on Feb. 22. The bank has kept borrowing costs steady this year after six increases in 2007 pushed the key one-year lending rate to 7.47 percent.
Currency appreciation is the “most effective tool” to direct more resources to industries that will boost domestic consumption, Yi said. The Chinese currency gained 7 percent last year versus the dollar, twice as fast as in 2006, according to Bloomberg data.
“Because of the growing interest-rate differentials between China’s yuan and the U.S. dollar, we believe currency adjustment will take on a larger role in tightening monetary conditions this year, compared with the past,” Liang Hong, a senior economist at Goldman Sachs Group Inc. in Hong Kong, wrote in a recent note.
Currency Appreciation
Liang said the central bank may front-load currency appreciation over the next few months, with the full year’s gains totalling 12 percent against the U.S. dollar.
Yi also said today that growth in M2, the broadest measure of money supply, will slow to 16 percent this year. It rose 18.9 percent in January to 41.8 trillion yuan ($5.9 trillion) from a year earlier.
Bank lending growth is expected to be lower than last year, Yi said. Outstanding loans in yuan jumped 17 percent to 26.97 trillion yuan at the end of January from a year earlier.
The subprime crises in the U.S. has sparked concerns about the potential for a slowdown of Chinese exports.
“The impact of a slowdown in the U.S. economy on China’s export would be slower growth, rather than shrinking exports, because China’s exports are mostly cheap and necessary consumer goods,” said Justin Yifu Lin, head of the China Center for Economic Research at Peking University, who was appointed as World Bank’s chief economist on Feb. 5.
Taiwan spouses of mainland women angered by Hsieh’s insult
Frank Hsieh, a candidate in Taiwan’s leader election, might pay a price for his excessive frankness this time, after calling local men who have married women from the mainland of China as “piggy brothers”, according to Taiwan media reports.
The Democratic Progressive Party (DPP) candidate for the election have insulted many local men with mainland wives when he told Taiwan men not to pin their hopes on the opening of exchanges across the Taiwan Strait, in attempt to marry “cheap” mainland women.
Wang Bao-jun, spokesman for Taiwan’s Association for the Care of New Residents, said his wife is a graduate of the mainland’s prestigious Tsinghua University and she has become part of Taiwan people. He wondered how Hsieh could use the word “cheap” when talking about the mainland spouses of Taiwan people.
In Taiwan, about 280,000 local residents have married mainland people. The total number of people living in families with mainland members has topped 500,000, according to local media.
Traditionally, Chinese regard the pig as a stupid animal.
US properties plunge into negative equity
America’s housing crisis spreads to the middle classes as property renovators hand back the keys to homes they can’t sell, reports James Doran
The Observer
February 24 2008
More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties, a signal that the housing crisis has spread to the wealthier middle classes who, until now, were considered immune to the worst rigours of the economic downturn.
Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody’s, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market.
Barb Corwin, 37, knows all about negative equity. She has watched hundreds of thousands of dollars worth of value drain out of three properties she bought just a few years ago. ‘I have put 10 years of my life into buying and renovating properties, and I believed that I would sell them, pay off the mortgages and make a profit. But that didn’t happen. I feel like the past 10 years have been wasted.’
Corwin owns a popular piano bar in Ann Arbor, Michigan, a suburb of Detroit known for its big luxury homes and wealthy inhabitants, such as Bill Ford Jr, the chief executive of the car maker.
Corwin considers herself ‘a house flipper’ - someone who buys properties on the cheap in the hope of turning a profit after upgrading the bathroom, kitchen and other fittings. ‘I was a fan of Flip That House,’ she says, referring to one of the many American TV shows that feature the lives of flippers like her.
Corwin bought a four-bedroom house for about $315,000 five years ago. ‘I thought it was a great price,’ she says. ‘I put about $365,000 into it, an all-new bathroom, granite work surfaces in the kitchen, stainless steel appliances. It was a beautiful place.’
But then the market crashed and Corwin was stuck with debts of more than $600,000 on a property the market valued at less than she paid for it. She was forced to sell a couple of weeks ago for just $290,000. ‘I still owe the bank money,’ she says.
Corwin is also saddled with a condominium she bought to let. ‘I have had to rent it out to people who work for me at the bar because I just couldn’t get enough rent to make the mortgage payments on the open market,’ she says.
Then there is her own home, which she is also trying to sell in an effort to alleviate the pressure of such a large mortgage debt. ‘I bought the home I currently live in for $369,000, I put about $25,000 into renovations, and I can’t list it for more than $364,000,’ she says. ‘None of the banks will give me a refinance or another mortgage.’
Corwin’s story may sound excessive and out of the ordinary, but it is not.David Wyss, the chief economist at Standard & Poor’s in New York, closely monitors the US housing market and believes about half of all the properties in negative equity today were bought by would-be flippers.
‘The numbers being talked about by the Mortgage Bankers Association at a conference here in New York last month showed that between 40 and 50 per cent of properties in foreclosure in 2007 were investment properties,’ Wyss says. ‘The banks that lent the mortgages did not know: they believed when the loans were made that they were financing primary residences.’
The slow realisation that the majority of people in negative equity have absolutely no interest in keeping their homes, because they don’t live in them, further compounds the housing market crisis.
‘Foreclosure is a good option for flippers,’ Wyss says. ‘If your house is in negative equity and you can’t sell it, why should you go on making mortgage payments? It makes little commercial sense. Instead, you can just walk away and hand the keys over to the bank.’
The worry now is that the US market could be flooded with another 5 million or more foreclosed houses in the next year, deepening the crisis further still.
On Tuesday, Standard & Poor’s will publish the important Case-Shiller house price index and the news is not expected to be good.
‘I am expecting an 8.1 per cent [year on year] decline in house prices for December, compared with 7.7 per cent in November and an 8.5 per cent decline in prices for the year as a whole,’ Wyss says.
Meanwhile, the US government is considering numerous measures to combat the rise of foreclosures and the damage caused by negative equity, including economic aid for homeowners and a complex mortgage guarantee scheme proposed last week by the Office of Thrift Services, the government department that deals with debt.
The candidates running for president on all sides of the political divide are making as much capital as they can out of the crisis, with Senator Hillary Clinton, the trailing Democrat, pledging a moratorium on all foreclosures if she is elected.
But such promises have come too late for the likes of Barb Corwin, who nurses a drink at her bar and contemplates her dire finances. ‘This is nothing short of catastrophic,’ she says. ‘I cannot see a way out.’
US properties plunge into negative equity
America’s housing crisis spreads to the middle classes as property renovators hand back the keys to homes they can’t sell, reports James Doran
The Observer
February 24 2008
More American homeowners are mired in negative equity than at any time since the Great Depression of the Thirties, a signal that the housing crisis has spread to the wealthier middle classes who, until now, were considered immune to the worst rigours of the economic downturn.
Close to 9 million Americans, or 10.3 per cent of homeowners in the US, now owe more on their mortgages than their house is worth, according to the latest figures from Moody’s, the ratings agency, as inventories of unsold homes continue to pile up in an already over-supplied market.
Barb Corwin, 37, knows all about negative equity. She has watched hundreds of thousands of dollars worth of value drain out of three properties she bought just a few years ago. ‘I have put 10 years of my life into buying and renovating properties, and I believed that I would sell them, pay off the mortgages and make a profit. But that didn’t happen. I feel like the past 10 years have been wasted.’
Corwin owns a popular piano bar in Ann Arbor, Michigan, a suburb of Detroit known for its big luxury homes and wealthy inhabitants, such as Bill Ford Jr, the chief executive of the car maker.
Corwin considers herself ‘a house flipper’ - someone who buys properties on the cheap in the hope of turning a profit after upgrading the bathroom, kitchen and other fittings. ‘I was a fan of Flip That House,’ she says, referring to one of the many American TV shows that feature the lives of flippers like her.
Corwin bought a four-bedroom house for about $315,000 five years ago. ‘I thought it was a great price,’ she says. ‘I put about $365,000 into it, an all-new bathroom, granite work surfaces in the kitchen, stainless steel appliances. It was a beautiful place.’
But then the market crashed and Corwin was stuck with debts of more than $600,000 on a property the market valued at less than she paid for it. She was forced to sell a couple of weeks ago for just $290,000. ‘I still owe the bank money,’ she says.
Corwin is also saddled with a condominium she bought to let. ‘I have had to rent it out to people who work for me at the bar because I just couldn’t get enough rent to make the mortgage payments on the open market,’ she says.
Then there is her own home, which she is also trying to sell in an effort to alleviate the pressure of such a large mortgage debt. ‘I bought the home I currently live in for $369,000, I put about $25,000 into renovations, and I can’t list it for more than $364,000,’ she says. ‘None of the banks will give me a refinance or another mortgage.’
Corwin’s story may sound excessive and out of the ordinary, but it is not. David Wyss, the chief economist at Standard & Poor’s in New York, closely monitors the US housing market and believes about half of all the properties in negative equity today were bought by would-be flippers.
‘The numbers being talked about by the Mortgage Bankers Association at a conference here in New York last month showed that between 40 and 50 per cent of properties in foreclosure in 2007 were investment properties,’ Wyss says. ‘The banks that lent the mortgages did not know: they believed when the loans were made that they were financing primary residences.’
The slow realisation that the majority of people in negative equity have absolutely no interest in keeping their homes, because they don’t live in them, further compounds the housing market crisis.
‘Foreclosure is a good option for flippers,’ Wyss says. ‘If your house is in negative equity and you can’t sell it, why should you go on making mortgage payments? It makes little commercial sense. Instead, you can just walk away and hand the keys over to the bank.’
The worry now is that the US market could be flooded with another 5 million or more foreclosed houses in the next year, deepening the crisis further still.
On Tuesday, Standard & Poor’s will publish the important Case-Shiller house price index and the news is not expected to be good.
‘I am expecting an 8.1 per cent [year on year] decline in house prices for December, compared with 7.7 per cent in November and an 8.5 per cent decline in prices for the year as a whole,’ Wyss says.
Meanwhile, the US government is considering numerous measures to combat the rise of foreclosures and the damage caused by negative equity, including economic aid for homeowners and a complex mortgage guarantee scheme proposed last week by the Office of Thrift Services, the government department that deals with debt.
The candidates running for president on all sides of the political divide are making as much capital as they can out of the crisis, with Senator Hillary Clinton, the trailing Democrat, pledging a moratorium on all foreclosures if she is elected.
But such promises have come too late for the likes of Barb Corwin, who nurses a drink at her bar and contemplates her dire finances. ‘This is nothing short of catastrophic,’ she says. ‘I cannot see a way out.’
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