60 Minutes covers bogus foreclosure documents

Just when you think the issues related to mortgage fraud couldn't get any worse, they do. Last night, 60 Minutes covered the story of lenders which outsourced their foreclosure process to outside firms, who in turn hired untrained bodies -- aka 'robosigners' -- for $10/hour to pretend they were officers of the banks and sign thousands of documents per day.

Only problem? Many of those forms weren't filled out correctly (often laughably so), which has slowed down the entire foreclosure process. Of course the banks which hired these firms -- companies such as Bank of America, Wells Fargo, Citibank and others -- deny any knowledge of these irresponsible practices. So who's going to jail for this huge fraud? As usual in this country, no one. They'll probably pay (another) fine and call it a day.

Has the time for mass-produced fuel cells finally arrived?

Back around the year 2000, I wrote an article for a local building industry group magazine about fuel cells and the impact on housing, cars and overall economy. But due to ongoing issues with using hydrogen to power these cells, over the last decade the industry has struggled to gain traction. Now, however, a Silicon Valley start-up called Bloom Energy has invented a relatively simple fuel cell that can run on not just hydrogen, but a host of other renewable energy sources.

Firstly, 60 Minutes aired a segment about Bloom Energy (I sure hope they give their PR people a nice raise!) on Sunday night:


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Next, a story in the L.A. Times covers the company and its technology:

After nine years of research shrouded in secrecy, a Silicon Valley tech firm Wednesday took the wraps off a fuel cell that it says can generate energy by combining air and a wide range of fuels without going through the process of combustion.

The firm, Bloom Energy, said the solid oxide fuel cell -- resembling a Polaroid snapshot both in dimension and thickness -- could be a game-changer in the clean technology industry because it can be powered by either fossil fuel or renewable sources in an electro-chemical process that is both cleaner and more reliable than current options.

In the company's plans, thousands of fuel cells would be crammed into a box about the size of a refrigerator called the Bloom Energy Server, each capable of producing 100 kilowatts of electricity, or enough to power 100 average-size homes or a small office building, Bloom said...

Still, given the high cost ($700,000+), it will be awhile until prices come down far enough to power individual homes. However, power companies could install a unit at a substation to power a specific neighborhood rather than build expensive power plants in remote locations that can be expensive to transmit (just look at your power bill).

Last year, EBay Inc. set up a 500-kilowatt system powered by biogas outside its San Jose headquarters, taking 15% of the campus' energy needs off the electrical utility grid. The fuel cells, which EBay dubbed "skinny batteries," were officially introduced at the company's site Wednesday with Gov. Arnold Schwarzenegger and former U.S. Secretary of State Colin Powell on hand.

Bloom Chief Executive K.R. Sridhar, a former NASA scientist, described the technology behind the fuel cell in a statement as potentially having "the same kind of impact on energy that the mobile phone had on communications."

Fuel cell technology has been in development for decades, with hydrogen as the usual fuel source. But Bloom's flat ceramic squares are more versatile, the company said.

What will the devastation to 401k balances mean for the housing market?

Although it's not technically a housing-related story, the collapse in the value of many people's 401k balances could have a large impact on their home purchasing decisions -- especially for those over age 50. About the time the market was starting to see-saw in late 2007, I moved my 401k balance over to a self-directed IRA, where it's mostly sat in cash ever since, but most others weren't so lucky. From a 60 minutes report:

Checked your 401k lately? The recent financial collapse has devastated this retirement resource. Older workers are hardest hit, as their financial futures may now be at risk. Steve Kroft reports.


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60 Minutes talks with President Obama about the economy, AIG and settling into his new job

They say that starting a new job is one of life's most stressing events -- and if you're Barack Obama and you're taking the helm of the United States as the world teeters on the edge of financial catastrophe? Gallows humor. Lots of it. From CBSNews.com:

By most accounts, this past week was one of the most difficult in the young presidency of Barack Obama. At the heart of it all was the public upheaval over $165 million in bonuses paid to employees of AIG, a company largely responsible for bringing the world's financial system to its knees and now being propped up by U.S. taxpayers. The bonuses touched off a cultural war between Wall Street and Main Street, both of whose support the president needs to help stabilize the economy.

After campaigning in California to drum up support for his $3.6 trillion budget, the president sat down with 60 Minutes in the Oval Office for a conversation about the AIG debacle, the economy, and getting the hang of the world's most difficult job.

Part I:


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Part II:


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60 Minutes interviews Fed Chairman Ben Bernanke

Last week, 60 Minutes correspondent Scott Pelley went on a ride-along with the FDIC when taking over a bank outside of Chicago. This week, he interviews Federal Reserve Chairman Ben Bernanke and asks the question, "When does this end?" First, from CBSNews.com:

"Mr. Chairman, I'm gonna start with a question that everyone wants me to ask: when does this end?" 60 Minutes correspondent Scott Pelley asked Bernanke.

"It depends a lot on the financial system," he replied. "The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis. We've seen some progress in the financial markets, absolutely. But until we get that stabilized and working normally, we're not gonna see recovery. But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time."

Asked if he thinks the recession is going to end this year, Bernanke said, "In the sense that this decline will begin to moderate and we'll begin to see leveling off. We won't be back to full employment. But we will see, I hope, the end of these declines that have been so strong in a last couple of quarters."

"But you wouldn't say at this point that we're out of the woods?" Pelley asked.

"No," Bernanke replied. "I think the key issue is the banking system and the financial system."

"Unemployment, as we sit here, is about 8.1 percent. I wonder, do you expect double digit unemployment?" Pelley asked.

"Well, it's hard to forecast exactly where we're going. Unemployment is rising. Job losses are still very severe. And no doubt, the unemployment rate's gonna go higher than it is. But I think, again, that if we do succeed in stabilizing the financial system, that we'll begin to see a slower pace of decline, and eventually, a stabilization that will set the basis for a recovery," Bernanke said.

"You seem to be saying that we're not heading into a new American Depression?" Pelley asked.

"I think we've averted that risk. I think we've gotten past that and now the problem is to get the thing working properly again," the chairman said.

The video is in two parts. First, part one:



Next, part two:

60 Minutes profiles an FDIC bank takeover

Wonder what happens to a bank when it's taken over by the FDIC? 60 Minutes was recently allowed unprecedented access because the FDIC wants the public to know what happens during one of these takeovers. FDIC Sheila Bair says they expect to spend $65 billion on these takeovers over the next five years -- certainly relative chump change versus the recent stimulus package, and an amount that may certainly rise. From a CBSNews.com story:

A lot of people are worried about their banks these days. While devastated giants like Citigroup get bailed out again and again and again, many smaller banks are failing. The federal agency that takes over unsound banks is the Federal Deposit Insurance Corporation - the same people who guarantee depositors won't lose their money.

Most every Friday night now the FDIC seizes several banks. You haven't seen these takeovers happening because they're done secretly at night to make sure there's no needless panic by depositors. But last week 60 Minutes and correspondent Scott Pelley were given extraordinary access to one of these operations because the FDIC wants you to know what happens to your money when your bank has failed...

60 Minutes covers the World Savings option ARM fiasco

Last night, 60 Minutes covered the story of a mortgage salesman named Paul Bishop with World Savings, who discusses some of the standard practices of the day at a company which heavily promoted toxic Option ARM loans and other no-doc alternatives. The damage so far? $37 billion and counting.

Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings - the nation's second largest savings and loan company - that many of the mortgages they were granting were misleading and predatory.

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So why didn't he or anyone else step up in a public way? Because, at least in my own experience, when people have mortgages and car loans to pay and kids to feed, looking the other way becomes the most practical (and cowardly) way to keep a job. As someone who regularly speaks his mind, I can personally attest to the perils of losing clients who simply went elsewhere to find someone willing to play ball (and you can thank numerous bankruptcies of development deals for that short-sightedness).

So is this country ready to start listening to people willing to ignore petty politics in search of the truth? That certainly remains to be seen. Perhaps seeing some former executives of those companies engaging in fraud (i.e., mortgage companies, Wall Street companies, ratings agencies and certain consultants) doing the perp walk for a nice long prison sentence would get the ball rolling in that direction?

60 Minutes covers upcoming Alt-A and Option ARM foreclosure wave

Tonight 60 Minutes covered the upcoming wave of potential foreclosures related to Option ARM and Alt-A loans, which are expected to start rising over the next three years, with as many as 8 million homeowners losing their homes. Already 10% of outstanding mortgages are in technical default:


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60 Minutes looks at reasons for financial crisis

Mortgage-backed securities. Credit default swaps. Just what are these financial instruments and how have they plunged the global markets into chaos? 60 Minutes' Steve Kroft takes a look:


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60 Minutes interview with Treasury Secretary Paulson

This season's premiere of 60 Minutes included an interview with Treasury Secretary Paulson, which tagged along with him over the last two weeks as the financial crisis unfolded. Definitely worth a look:


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