No surprise: Americans are driving less right now. We drove 11 billion
miles less in March of this year than in March of 2007.

Authorities are accusing a Cincinnati woman of using an everyday
household item to attack her 93-year-old neighbor. They say 57-year-
old Dora Nance entered Florence Holmes' apartment and hit her with a
vacuum cleaner and stole money from her.

A 95-year-old Wisconsin woman has just published her second children's
book. Marion Jacobson's Paddy the Lonesome Turtle is the follow-up to
a book she published last year titled Why the Giraffe Has a Long Neck.

They made a fourth Indiana Jones movie, so what about Back to the
Future 4? BTTF co-writer and producer Bob Gale says "no".

... Okay, Harrison Ford was glad to resurrect Indiana Jones, so how
about Han Solo? He says "no".

... Okay, but would Harrison Ford consider returning to the big screen
as special agent Jack Ryan? He says "yes".

Labels: News

Indiana Jones and the Kingdom of the Crystal Skull pulled in about
$151 million Thursday through Monday.

Frenchman Michel Fournier will jump from 25 miles above the earth this
(Tuesday) morning in an attempt at the world's highest skydive. (The
jump is/was scheduled to happen over Canada at around 5am CST. Check
your favorite news source for updates.)

The guy who introduced the frozen french fry to McDonald's has died.
J.R. Simplot passed away Sunday at the age of 99. In the '50s, Ray
Kroc's fast food empire was growing fast and Simplot offered his new
time-saving invention.

Officials in Scotland will build a $200,000 bridge over a new highway
to protect the country's dwindling red squirrel population. The 375-
foot bridge will allow the squirrels to safely cross the road.

Labels: News

VITAL SIGNS
The case for taking a vacation
Experts say regular time off protects health, raises productivity
By Kristen Gerencher, MarketWatch
Last update: 2:24 p.m. EDT May 23, 2008
This update of a column originally published May 22 corrects the location of the Families and Work Institute.
SAN FRANCISCO (MarketWatch) -- A vacation may seem like a frivolous thing to contemplate in the face of a slowing economy, high food and gas prices, job insecurities and a falling dollar.
Video: Americans pressed to take vacations
You need a vacation, not just because you've earned it, but because by not taking it you are endangering your health. MarketWatch's Kristen Gerencher reports.
But your continued health and productivity may depend upon your getting away from work periodically, and employers grappling with rapidly rising health-care costs are starting to embrace the idea as well, public health experts and benefits consultants say.
"There definitely is a trend towards employers understanding the relationship between stress and health, and that taking time to recharge, relax, does have a benefit to burn-out," said Carol Sladek, principle in the work/life consulting practice of Hewitt Associates in Lincolnshire, Ill. "We do see some of our clients moving in the direction of trying to encourage their employees to use their time off and use it in larger increments."
That may be a tough sell this year, even though workers asked to do more with fewer resources may need their vacation time more than ever. Fearful of appearing unneeded or uncommitted, employees may be more inclined to schedule a few long weekends or limit their vacations to no more than a week. The portion of Americans planning to take a vacation this year dropped to 33% from 40% who said they took one last year, according to a survey of 1,000 adults released earlier this month from travel insurance provider Access America.
On the spectrum of U.S. workers' efforts to secure paid time off, vacation historically has taken a backseat to sick days and leave for medical reasons and family caregiving responsibilities. But it's rising as a benefit that Americans want to protect, said John de Graaf, executive director of Take Back Your Time, a Seattle-based nonprofit that addresses overwork and time poverty.
"We feel vacation time or the lack of it affects many Americans, and in many ways has a negative impact on our health," he said, noting that the U.S. spends 16% of its gross domestic product on health care but fares relatively poorly in international comparisons of life expectancy, infant mortality, chronic illness and obesity.
"We would argue that a big part of this is the time pressure and stress in people's lives that don't allow them to take care of themselves properly," de Graaf said.
There is little research on whether taking vacations impacts personal health, and how the duration and kind of respite may factor in. The frequency of annual vacations was associated with a reduced risk of death in middle-aged men at high risk of heart disease, according to a study published in the journal Psychosomatic Medicine in 2000. A 2005 study of 1,500 women ages 25 to 75 published in the Wisconsin Medical Journal suggests that failing to take a break at least once a year brings psychological health risks.
Depression risks
The majority of the women studied, 34%, reported taking a vacation once a year, while 23% said they took one twice a year. Another 23% reported getting away every two to five years. Almost one in five -19% -- said they only took a vacation once every six years or less often.
The risk of depression, as measured by a standard industry test, increased as the frequency of vacation-taking declined, said Cathy McCarty, senior research scientist at the Marshfield Clinic in Marshfield, Wisc.
"You were twice as likely to be depressed if you took it as infrequently as every two to five years," she said. "We know from other research that depression is associated with days lost at work and lower levels of productivity when you are at work."
There were social effects, too. Women who rarely took vacations also reported lower satisfaction with their marriages.
The study has some limitations. Participants defined what qualified as a vacation and it was impossible to distinguish cause from effect, McCarty said. "It could be that women who are depressed are less likely to take vacation because it's too overwhelming."
Still, employers would be wise to encourage workers to use their earned time off. "The rest of the world both gives and takes more vacation than the U.S," McCarty said, noting the study is due for an update.
"The big change in the last six years since these data were collected is that people, although they physically leave the office, they take it with them because they have Blackberries" and other electronic tethers, McCarty said. "I would love to do this again now and see if we get the same response because the effect of vacation may not be as great."
Preventing chronic stress
Last year, about 84% of U.S. employers offered paid vacation, and 63% rolled sick, vacation and personal days into a single paid time off plan, according to the most recent research from the Society for Human Resource Management in Alexandria, Va. Even those with generous time off don't always take it. Only 14% of U.S. employees take a vacation of at least two weeks, according to a 2005 study from the Families and Work Institute in New York.
More employers are offering mid-career hires additional vacation time up front as a way to attract and keep talent, Sladek said. "If you only offer two weeks of vacation, it's tough to get people in the door....The trend we see is trying to put more time in employees' hands sooner."
But she admits that some employers have outdated vacation schedules. "A lot of it is just a mindset. We have a very hours-focused mentality when it comes to work."
For some people, vacation time is sacrosanct even if money concerns force them to scale back their plans. The opportunity to bond with family and friends, have free time and spontaneous adventures represents the payoff of working. But for others, vacation creates more stress than it alleviates, between endless airport security lines, crowds at popular summer destinations and the prospect of returning to work under a crush of piled-up tasks.
Many Americans already have at least a week off, but their vacation time typically is much less than that of other industrialized countries. Take Back Your Time is working with a senator that de Graaf declined to name to introduce legislation next year aimed at providing minimum paid vacation time for all working Americans. The standard would gradually increase to three weeks.
"We're trying to be practical," he said. "If we were to advocate four weeks, which is the minimal standard in the European Union, then people would just think we were nuts. We think three weeks is a reasonable compromise for the world's richest country."
Paid vacation time is a wellness issue that's as important as careful eating and regular exercise for workers' health, said Joe Robinson, a work/life balance consultant and author of "Work to Live" in Santa Monica, Calif.
Taking a holiday restores emotional resources and a sense of mastery that helps people bring energy, enthusiasm and satisfaction back into their life and puts a stop to chronic stress, which increases their productivity and lowers turnover, he said.
"To be healthy and do a sustainable job in a 24/7 world you've got to have a richer component to your life" than just working all the time, Robinson said. "You've got to understand the role that input plays in your output."
"If you're not paying attention to that as an employer, then you're having people who are going to run up medical bills, quit, burn out, be resentful and you won't be getting maximum productivity out of them," he said. "We're just not aware of the benefits of time off because we're so single-mindedly focused on time on." End of Story
Kristen Gerencher is a reporter for MarketWatch in San Francisco.

May 22, 2008, 7:39PM ET text size: TT
McDonald's cooking fries in trans-fat-free oil

By DAVE CARPENTER

CHICAGO

McDonald's said Thursday its french fries are now trans-fat-free in all its restaurants in the United States and Canada, catching it up with its fast-food rivals in that category.

CEO Jim Skinner made it official at its annual shareholders meeting at McDonald's Corp. headquarters in Oak Brook, Ill.

McDonald's has lagged other restaurant operators in switching over to a zero-trans-fat cooking oil out of worries it would compromise the taste of its trademark fries. It has been under increasing pressure from consumer advocates and some public officials to make the change, but it did so quietly.

"For a few months now, customers in our U.S. restaurants have been enjoying our fried food items, including french fries, hash browns, chicken and filet of fish, as well as our biscuits, with zero grams of trans fat per labeled serving," Skinner said.

There may still be negligible amounts of naturally occurring trans fats in the foods, but federal regulations allow foods to claim zero grams of trans fat as long as the levels are below 0.5 grams per serving.

Skinner said McDonald's is on schedule to convert to the new oil by year's end for its remaining baked items, pies and cookies.

"While we don't plan to advertise these changes, we wanted you to be the first to know that we have followed through on our commitment while keeping the same great taste that our customers expect from McDonald's," Skinner said.

The $23 billion company was especially cautious in making the switch after reneging within months on a September 2002 pledge to introduce a new oil, citing the taste concerns.

McDonald's has nearly 14,000 restaurants in the United States.

The company said it also has upheld its commitment to significantly reduce the amount of trans fat in its restaurants around the world, reducing it to less than 0.5 grams per serving in Europe, Latin America and its Asia Pacific-Middle East-Africa division. The four exceptions are Colombia, Japan, Ukraine and Venezuela, where McDonald's is still working toward its reduction goals.

McDonald's shares fell 25 cents to $58.53 Thursday.

------

On the Net:

http://www.mcdonalds.com

Shortage fears push oil futures near $140

By Carola Hoyos and Javier Blas in London

Published: May 20 2008 19:06 | Last updated: May 21 2008 00:52

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel on Tuesday, further stoking inflationary pressures in the global economy.

Investors rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. The spot price hit a record $129.60 a barrel.

Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints.

Neil McMahon, of Sanford Bernstein, said: “Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices.”

Anne-Louise Hittle, of Wood Mackenzie, added that investors were shifting their focus from the short-term to the medium-term, where supply fears played a bigger role. Since January, long-term futures oil contracts, such as those for delivery in 2016, have jumped almost 60 per cent, while near-term prices have gone up 35 per cent.

That trend was exacerbated by T. Boone Pickens, the influential investor who believes world oil production is about to peak as aging fields run dry. He warned that oil prices would hit $150 a barrel by the end of the year.

“Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87m,” Mr Pickens told CNBC. “It’s just that simple.”

Mr Pickens’s view is still in the minority in the oil industry. But concerns over future oil supplies are fast moving into the mainstream and influencing investors.

Politicians have expressed concern that speculators are forcing prices higher and Joseph Lieberman, the influential senator, said he was considering legislation to limit big institutional investors in commodities markets.

Some energy executives have warned that geopolitical supply constraints will mean production will not be able to match demand as early as 2012 to 2015.

This comes as demand, especially from China, is set to continue to grow, while that of the US slows. Adam Sieminski, chief energy economist at Deutsche Bank, said: “The price is going to go up until governments that subsidise oil consumption in Asia and the Middle East can no longer afford it.”

So far China is doing the opposite, having recently retrenched subsidies. Analysts say Chinese demand could surge further as the country faces shortages of coal and hydropower.

Nervousness about Chinese energy demand was exacerbated on Tuesday when officials said 32 power plants had been forced to close because of coal shortages.

PetroChina and Sinopec, the two biggest domestic oil groups, also have diverted fuel supplies to the quake-hit Sichuan region.

Additional reporting by Geoff Dyer in Beijing

Copyright The Financial Times Limited 2008

Down on Its Luck

Las Vegas used to be a recession-proof oasis. Not anymore.
Steve Freiss
Newsweek Web Exclusive
Updated: 4:29 PM ET May 5, 2008

On the third weekend of every April, Emily Ann Frankston and her family—spread out over five states—meet up in Las Vegas for their annual family vacation. This year was different. The only ones to show up were Frankston, her husband and her brother-in-law, and they stayed just two nights instead of the traditional three. "My two sisters back east said airfares were too high, my mother-in-law lost her job in January, and some of the others said they were busy, but we think they didn't want to spend the money," says Frankston, 37, who drove in from the Phoenix area. "We've done this for the past nine years. Even after 9/11 we all came. But this year's it's just us. This recession is really hurting everyone."

It's even hurting the city of Las Vegas, the economy of which was once thought to be impervious to the economic swings suffered by the rest of the country. Not anymore. According to the Las Vegas Convention and Visitors Authority (LVCVA), Las Vegas has seen gambling revenues fall only once since 1970: in the aftermath of the Sept. 11 terror attacks they dropped 1 percent in 2002 from 2001. So far this year they've fallen 4 percent, the number of conventions held has dropped 10.4 percent, and average daily room rates were off 3.8 percent in the first two months of 2008, according to the most recent data available. Visitor volume was up 1.2 percent through February, but market analysts say that's because of the extra day provided by this being a leap year; March's figures will likely put the year-to-date numbers in negative territory. The stock price of MGM Mirage, owner of Bellagio, Mirage and eight other Strip resorts, has halved, from $100.50 in October to about $49 on Friday. In recent weeks the company eliminated 440 middle management jobs to save $75 million annually. "We made a structural change in our company to become more efficient and provide the same level of service, but we did have to advance that effort because we were also seeing a softening in the marketplace," says MGM Mirage spokesman Alan Feldman.

What's leaving Las Vegas more susceptible to this economic crisis than to previous ones? Diversification. Roughly 60 percent of the Las Vegas Strip's revenues now come from nongaming activities. By contrast, in 1991 and 1992, when the last comparable slowdown occurred, nongaming activities provided just 42 percent of overall revenue. "This is different from prior downturns," says Bill Lerner, a Deutsche Bank gaming-sector analyst. "Now that there are a lot more nongaming amenities, the visitation mix is leaning toward nongamblers, and the consumer coming to Vegas is different now than it was."

It doesn't help that the city's convention business is slipping. Several annual conventions have seen fewer attendees show up and have seen those who do come stay for shorter periods. For example, last week's National Association of Broadcasters confab attracted 105,000 registrants, down from 111,000 in 2007, according to NAB executive vice president Chris Brown. Those figures could have been worse, Brown says, but advance registrations were so far down that several hotel-casinos voluntarily offered to cut room rates by $10 or more to encourage attendance. Says Brown, "That's never happened before."

The Frankstons aren't the only vacationers staying away. Nearly 7 percent fewer cars crossed the Nevada-California border along Interstate 15 through February, reflecting in part that record-high gasoline prices are curtailing drive-in visitors from the largest neighboring state. Making matters worse, three airlines with substantial service to Las Vegas—Aloha, ATA and Champion—are going out of business.

Even the mortgage mess and the subsequent credit crunch have taken a toll on Vegas. Several major construction projects on the Strip are delayed due to financing problems, including a second tower for Donald Trump's new condo-hotel. Also delayed is a plan to build a $6 billion version of New York City's famed Plaza Hotel. And while construction continues on the half-built $3 billion Cosmopolitan Resort and Casino next to the Bellagio, the project may be in jeopardy after developer Bruce Eichner's company defaulted on a $760 million loan from Deutsche Bank. (Eichner did not respond to NEWSWEEK's request for comment.)

Despite such problems, other developers still seem more than willing to bet on the future of Vegas. There is more than $30 billion in new construction scheduled for the Strip. And assuming those projects don't get squeezed by the credit crunch, some 40,000 new hotel rooms will be added to the current 136,000 by 2011, resulting in 100,000 new service sector jobs.

Like other major U.S. cities, Las Vegas is banking on the Euro-rich to help out during these tough times. According to Robert LaFleur, a gaming-stock analyst for Susquehanna Financial Services, "Bachelor parties in Vegas are now all the rage for soon-to-be-wed fellows from Australia and the U.K., for instance, because it's so cheap to get there … Right now it's an easy sell to get people from overseas."

The city isn't skimping on its advertising budget, either. Last week the Las Vegas Convention and Visitors Authority launched a $12 million three-month national TV ad blitz called "Vegas Right Now" that insists "that there are new reasons why you ought to come," says Rob O'Keefe of R&R Partners, the ad agency that handles the annual $90 million tourist board account.

But given the host of problems facing the city, an ad campaign might not be enough of a fix. In one, called "The Dangers of Thinking," an announcer urges the audience to "do without thinking. Do Vegas right now." While it was witty, the ad irked Vegas regular Tania Franco of Atlanta, whose husband was recently forced to take a pay cut at his job. "The message is 'Don't think about how crappy your economic situation is, just come to Vegas, damn it. If you don't, you're a wallowing loser.' That's insensitive."
URL: http://www.newsweek.com/id/135638
© 2008

ow Fraud Fueled Mortgage Crisis
Brokers Pushed Borrowers to Lie, Lenders Misled and Ratings Agencies Looked the Other Way
By Mary Kane 05/01/2008

The debate over what caused the mortgage mess and how best to fix it is now taking a sharp turn, as new problems surrounding liar's loans and payment-option mortgages reveal the pervasive fraud, lying and deceit that permeated the market at its height.

As loans made to borrowers with decent credit begin to fail at a surprisingly rapid rate, it's becoming clear that widespread fraud helped support the entire mortgage system -- from borrowers who lied on their loans, to brokers who encouraged it, to lenders who misled some low income borrowers, to the many lenders, investors and ratings agencies that conveniently and deliberately looked the other way as profits rolled in.

(Matt Mahurin) Despite its widespread role, fraud hasn't yet been at the forefront of proposed rescue plans, which center on refinancing people out of loans now resetting to higher rates. That may begin to change as the mortgage market continues a meltdown that seems to have no end. As fraud becomes a focus, the question of who did most of the lying and cheating will be crucial in deciding who deserves help in any housing rescue plan.

And the search for causes of the crisis may challenge long-held but erroneous beliefs about what homeowners did and why. Many people think borrowers got in trouble by buying bigger houses than they could afford, but the numbers show the majority were refinancing their homes.

Fraud problems drew headlines this week, as Countrywide Financial Corp., announced an $893 million first quarter loss and a 36 percent delinquency rate on subprime loans. The lender that once led the subprime market is facing a federal probe involving allegations that sales executives purposely allowed for inflated income figures on many mortgage applications, The Wall Street Journal said Wednesday.

At the same time, delinquency rates are climbing for payment-option mortgages, or adjustable rate loans that allowed the borrower to choose the size of the monthly payment, the Journal said. Countrywide and other lenders are being hit by state investigations and lawsuits from borrowers who contend they were misled into taking out the complicated loans, which sometimes result in monthly payments going up even as house prices decline. Lenders deny responsibility, saying borrowers knew what they were getting into.

The meltdown of these mortgages is prompting a new spotlight on the extensive role that fraud played in loans gone bad, and who was responsible for it. Lending that required little proof clearly opened the door to widespread cheating, by borrowers who inflated their incomes, or by brokers who did it for them, with or without their knowledge.

A landmark study by the Mortgage Asset Research Institute concluded that almost 60 percent of stated income loans it examined were exaggerated by at least 50 percent. "They earned their name," MARI's Merle Sharick said of liar's loans.

Fraud concerns escalated recently when a task force of states attorneys general and the Conference of State Banking Supervisors found widespread mortgage fraud at the end of the housing boom. Their report said some 28.5 percent of subprime loans that don't face even their first reset to higher rates until next year are already delinquent. In addition, some 70 percent of subprime borrowers seriously delinquent on their loans aren't involved in any effort with lenders to modify the terms to prevent foreclosures. The report urged servicers to work harder on modifications and loan workouts.

At the influential housingwire site, publisher Paul Jackson pointed out that only massive fraud could be responsible for loans going sour so quickly, and that it's unfair to blame servicers for loan workout problems. Borrowers who may have cheated or lied to get a mortgage aren't going to be eager to call up their lender. "What incentive to they have?" Jackson asked. "Offering strong and credible proof that they were party to mortgage fraud?"

He represents a growing belief that mortgage fraud is a major problem yet to be recognized in the housing mess, and one that has been overshadowed by the attention to adjustable rate mortgages that reset to higher rates. Until the scope of the fraud is understood, adequately addressing the market's troubles isn't possible, according to Jackson:

It’s time borrowers, consumer groups and erstwhile working groups stop floating a revisionist history of the “hapless borrower” — you know, the one where greedy, mean lenders duped those innocent and pure borrowers? — as a substitute for what’s really going on in the real world.




Others familiar with the mortgage industry contend that pervasive fraud was, indeed, a problem - on the lender's side. At the peak of the housing boom, they say, the nation's mortgage system was set up to promote and encourage outright fraud in order to close a loan - and everyone, from brokers to loan officers to Wall Street, looked the other way. Borrowers also were put into products like payment-option arms that were unsuitable -- and lenders knew it. "They were pushed like Vioxx, with very little regard for their dangers," said Kathleen Keest, senior policy counsel with the Center for Responsible Lending, a research group that investigates predatory lending.

Patrick Madigan, an Iowa assistant attorney general who has investigated mortgage fraud, said it makes no sense to conclude that lenders are somehow victims. Madigan's office engineered a settlement two years ago with Ameriquest over its subprime practices, including high-pressure "boiler room" sales tactics. Regardless, Madigan said, there is a movement to "blame the borrower."

"There's a perception out there that there's this hapless lender who got duped by middle class and lower income subprime borrowers," Madigan said. "It's ridiculous. Our investigations have shown that most of the fraud happens at the suggestion and direction of the loan originator, who had significant financial incentives to close the loan, no matter what misconduct was required."

The question of fraud and responsibility matters because it can tilt the direction of any plans to rescue the housing market from its freefall. So far, the largest government effort has been FHA Secure, which is supposed to help subprime borrowers facing higher rate resets get refinanced into new mortgages. But with loans going bad even prior to their rates going up, the program doesn't address fraud as the true cause of failing loans, noted Robert Simpson, president of Investors Mortgage Asset Recovery Co., in Irvine, Calif. "These problems are not related to reset issues," he said. "That's a ruse."

As the debate over bailout plans continues on Capitol Hill, borrowers perceived as victims of predatory lending might be more likely to be seen as sympathetic and in need of help than borrowers who took part in lying to buy an expensive house. Lenders under pressure to modify more mortgage loans might get themselves off the hook a bit if borrowers take the hit for lying on liar's loans. If lenders are looked at as the perpetrators of fraud, there might be support for ideas like the one just proposed by Federal Deposit Insurance Corp Chairwoman Sheila Bair, who wants the Treasury Department to make loans directly to troubled borrowers.

If the whole mortgage market is viewed as riddled with fraud on both ends, some, like Simpson, argue that nothing should be done except letting those house prices that have been artificially propped up because of inflated incomes begin to fall -- and enduring the economic pain that will result.

Even if fraud has become a larger part of the mortgage meltdown picture than first realized, it's not simple to figure out who should take most of the blame. Many people point the finger at investors playing the market or homeowners who bought more expensive houses than they could afford -- the "irresponsible" borrowers cited by both President George W. Bush and probable Republican nominee Sen. John McCain (R-Ariz.).

But the numbers don't exactly tell that story - which proves that much in this crisis taken as fact is poorly understood. That also makes a difference, when it comes to deciding whether it makes sense to bail out the market. At the request of The Washington Independent, the trade industry publication Inside Mortgage Finance in Bethesda, Md., ran some numbers and analyzed the resulting data.

Did most people simply buy big homes they couldn't afford? In 2007, 62 percent of all securitized Alt-A loans involved refinances, and 38 percent were for home purchases. In the subprime market, 64 percent were refinances and 36 percent, home purchases. The percentages were the same in 2006. Those borrowers may have been tapping equity for reasons as varied as fancy vacations to overdue medical bills, but the majority were not buying new homes.

Were they just trying to make a quick buck? Regarding investors versus homeowners, in 2007, about 5 percent of all securitized subprime loans and 14 percent of Alt-A loans were reported as investor loans. That compares to 5 percent of subprime loans and 13 percent of Alt-A loans in 2006. These numbers don't include second homes, so the percentages are probably higher, but not significantly so.

Then there's the question of who really lied on the liar's loans. Madigan, the Iowa assistant attorney general, cites repeated cases where borrowers were encouraged by brokers to suddenly create businesses in their basements, like day care centers, to boost their incomes. If they questioned it, brokers would say that lenders required it, or not to worry. Still, borrowers signed on the bottom line, some knowing the information was false. Consider this borrower's account in the San Francisco Chronicle of a sales conversation with a broker:

" He didn't say anything illegal out loud," she said. "He didn't say 'lie,' he just made a strong suggestion. He said, 'If you made $60,000, we could get you into the lowest interest level of this loan; did you make that much?' I said, 'Um, yes, about that much.' He went clickety clack on his computer and said, 'Are you sure you don't remember any more income, like alimony or consultancies, because if you made $80,000, we could get you into a better loan with a lower interest rate and no prepayment penalty.' It was such a big differential that I felt like I had to lie, I'm lying already so what the heck. I said, 'Come to think of it, you're right, I did have another job that I forgot about.'"

Countrywide, for example, had a loan program called "Fast and Easy" that required no pay stubs, tax forms or employment verification. The FBI investigation is finding extensive fraud on loans across the board at Countrywide that didn't require full documentation, The Wall Street Journal reported.

"It really is a case of everybody's at fault on this," said Guy Cecala, publisher of Inside Mortgage Finance. "There's clearly plenty of blame to go around."

The result is a housing market that still has a long way to go to reach the bottom. A report by Barclays Capital on Tuesday warned that half of all subprime and Alt-A borrowers soon could owe more than their homes are worth -- meaning delinquencies are likely to increase, regardless of whether some loans reset.

How those delinquencies will influence the politics of any possible mortgage bailout is anyone's guess, especially as fraud and its part in the meltdown begin to draw more attention. As Cecala points out, finding the right people to blame can be a complicated issue. In some ways, he says, "it's just next to impossible" to solve a crisis that so many had a hand in creating. whether they are willing to admit to it or not.

Labels: Housing