Cracking the housing bust conspiracy

Conspiracy theorists ran into a brick wall earlier this month in efforts to connect the collapse of the mortgage industry to politicians -- a controversial quest because most agree the housing bust was one of the first indicators, and one of the first causes, of the lagging U.S. economy.

Judicial Watch, the capital's conservative and sometimes quixotic legal watchdog organization, started the whole thing in May 2009 by asking the newly created Federal Housing Finance Agency to disclose "[a]ny and all Freddie Mac ... or Fannie Mae records concerning political campaign contributions."

No can do, the agency responded.

Judicial Watch went to court, filing a Freedom of Information Act suit to acquire the relevant documents. Understanding why the suit failed, at least short of the U.S. Supreme Court, requires an understanding of the background.

The Federal National Mortgage Association -- Fannie Mae -- and the Federal Home Loan Mortgage Corp -- Freddie Mac -- buy residential mortgages from banks, then repackage them for sale as mortgage-backed securities. Fannie Mae and Freddie Mac guarantee the securities, pledging to reimburse investors if borrowers default.

The federal appeals court in Washington nicely captures what went wrong with the two lenders.

Fannie Mae and Freddie Mac "are structured as private corporations, but they are federally chartered and play an important role in the national housing market by making it easier for home buyers to obtain loans. ... In 2009, the two companies guaranteed three-quarters of new residential mortgages in the United States."

But things had begun to go south.

"National housing prices began a sustained decline in 2006 that by mid-2008 had substantially eroded the value of Fannie- and Freddie-held mortgages," the court said. "Worried that either or both Fannie and Freddie might become insolvent, Congress passed the Housing and Economic Recovery Act of 2008 ... which created the (Federal Housing Finance Agency, or FHFA) and authorized this new agency to place the two companies into conservatorship under specified circumstances," such as when Fannie's or Freddie's assets are insufficient to meet its obligations and where the management in the relevant agency consents to a conservatorship.

"On Sept. 7, 2008, with the consent of management at Fannie and Freddie, the FHFA placed both into conservatorship," the appeals court said. "As conservator, the FHFA has power to exercise 'all rights, titles, powers and privileges of the regulated entity, and of any stockholder, officer or director of such regulated entity with respect to the regulated entity and the assets of the regulated identity.'"

Given this structure, it was natural for Judicial Watch to approach the FHFA for the documents it wanted, and then file a FOIA suit against it when the request was rejected. But that structure turned out to be part of the problem.

The Freedom of Information Act "gives federal courts jurisdiction 'to order the production of any agency records improperly withheld from the complainant,'" the appeals court said. "But under FOIA, a federal court may only order an agency to release 'agency records.' ... Judicial Watch acknowledges that Fannie and Freddie," not being federal agencies, "are not themselves subject to FOIA, but argues that the requested documents became 'agency records' when the FHFA took over as conservator."

In asking for summary judgment in the FOIA suit from a federal judge, "the FHFA acknowledged that it had access to responsive documents, but, in an accompanying affidavit, swore that no one at the agency had ever read them." The affidavit was a declaration from FHFA Deputy General Counsel David A. Felt. "The FHFA argued that until someone at the agency uses the requested documents, they cannot be 'agency records' for purposes of FOIA. The (U.S. District) court agreed and granted summary judgment for the agency."

It was like being lost in some remote area, asking for directions, and being told, "You can't get there from here."

A three-judge panel of the U.S. Court of Appeals agreed with the judge and the FHFA.

"The Supreme Court has held that FOIA reaches only records the agency controls at the time of the request," the unanimous opinion by U.S. Circuit Judge Thomas Griffith said. "Control means 'the materials have come into the agency's possession in the legitimate conduct of its official duties.'"

The opinion said it had to weigh the case based on the four factors identified in the Supreme Court's 1996 ruling in Burka vs. HHS: "(1) the intent of the document's creator to retain or relinquish control over the records; (2) the ability of the agency to use and dispose of the record as it sees fit; (3) the extent to which agency personnel have read or relied upon the document; and (4) the degree to which the document was integrated into the agency's record system or files."

At the trial stage, the judge "considered these factors and determined that the FHFA does not 'control' the documents Judicial Watch requested because the agency had neither used the documents nor integrated them into its files," the appeals panel opinion said.

"Judicial Watch argues that the FHFA controls the documents because it holds title to them and that we therefore need not consider the Burka factors in this case," the opinion said, later adding, "But our cases have never suggested that ownership means control."

The opinion concluded: "Although there is no doubt that the FHFA could consult the requested records as it conducts its business, the problem for Judicial Watch is that no one from the FHFA has done so. The Supreme Court held in (1980's) Forsham vs. Harris that documents an agency had the right to acquire would not become agency records subject to FOIA 'unless and until the right is exercised.' ... In the same way, the FHFA's unexercised right to use and dispose of the records requested in this case is not enough to subject those records to FOIA."

No word yet on whether Judicial Watch will ask the full D.C. Circuit to rehear the case en banc or ask the U.S. Supreme Court for review.

After the appeals court ruling, Jill S. Farrell, director of public affairs for Judicial Watch, sent out an e-mail describing her frustration in classical terms: "An outrage? Youbetcha. Just another day for Sisyphus; keep pushing that rock uphill."

But the rigidly non-partisan Open Secrets, dedicated to revealing the finances of lobbyists and political sugar daddies, said in 2008 it learned -- presumably from recipients -- that Fannie Mae and Freddie Mac gave $4.7 million to members of Congress, Politico reported. Among the top 10 recipients -- then Sens. Barack Obama, D-Ill., and Hillary Clinton, D-N.Y.

Accepting properly packaged contributions from corporations is no crime. But being linked to an increasingly unpopular segment of the economy would carry a political price.

The meltdown itself occurred under President George W. Bush, and at least partially under a Congress controlled by a Democratic majority.

Meanwhile, recent news is still bad for Fannie Mae and Freddie Mac. Following S&P's downgrading of the U.S. credit rating, the rating agency downgraded the two lenders to the same degree, from AAA to a slightly less than sterling AA+.

Bankrate's Greg McBride told The Baltimore Sun, "The downgrade of Fannie Mae and Freddie Mac debt is what could lead to greater spreads between Treasury yields and those on mortgage-backed securities, and the rates borrowers pay."

McBride told the Sun investors who "buy mortgage bonds often buy them because they're guaranteed by Fannie Mae and Freddie Mac. The yield they're getting is only as good as the guarantee. If Fannie Mae and Freddie Mac have been downgraded, then those investors may command a higher premium for holding that debt, and that would translate into higher mortgage rates."

Right now, he said, a weak economy is keeping mortgage rates low. But if and when the economy picks up, rates will rise.

The Boston Globe said local financiers told it the downgrade of U.S. credit and Fannie Mae and Freddie Mac is "fraying nerves and making a double-dip recession closer to reality." But higher lending rates are more of a long-term problem.

"Long-term, the downgrade is going to mean inflation," Rob Lutts, president of Cabot Money Management of Salem, Mass., told the Globe.

All this likely will lead to more consumer anger. Whether the courts will cooperate with efforts to direct that anger at select politicians remains up in the air.

Zimbabwe diamond torture camp alleged

Zimbabwe's security forces are allegedly operating a torture camp in the country's Marange diamond fields, the BBC's Panorama TV investigative show reported.

Victims told of severe beatings and sexual assault, Panorama said Monday.

The claims come as the European Union is considering a partial lift of a trade ban on Zimbabwe's diamonds dating back to 2009 imposed by the Kimberley Process, the international organization that polices diamonds.

The ban of Zimbabwe diamonds from world markets came after reports of killings and abuses by Zimbabwe's security forces in the diamond fields.

Witnesses described conditions in the alleged torture camp in Zengeni near Marange.

"It is the place of torture where sometimes miners are unable to walk on account of the beatings," a victim who was released from the camp in February told the BBC.

There have been reports of an additional camp located in nearby Muchena, Panorama said.

Civilians recruited by the police and military to illegally dig for diamonds for them are taken to the torture camps if they demand too large a share, the program said.

Civilians found mining for themselves are also tortured in the camps, the report said.

Types of Computer Security

Computer security is that branch of information technology which deals in the protection of data on a network or a standalone desktop. As every organization is dependent on computers, the technology of its security requires constant upgradation. Here are the different types of computer security.



Computer Network Security

Computer networks are an integral part of any organization these days, as they facilitate the free flow of data and services to the authorized users. However, such networks also pose a security threat in case the data is classified and confidential, thus making network security a vital necessity. As the data is available only for authorized users, it is possible for hackers to pretend to be one, by providing the correct user name and password. Computer network security can be disrupted or encroached in the following ways:

• Denial of Service: Denial-of-service is meant to disable a computer or a network and can be executed with limited resources. It is one of the most common forms of attacks by hackers and can effectively disable the whole network of an organization. Denial of service attack makes a computer resource unavailable to its intended user. To carry out this kind of attack, hackers generally flood a network or the access routers with bogus traffic. They also make attempts to disrupt connections between two machines and prevent individuals from accessing a service.
• Trojan Horse: Trojan horse is common and one of the most potential threats to computer security. They are malicious and security-breaking programs, disguised as something which is considered as non-malicious by the security softwares. They are a useful tool for hackers who try to break into private networks. Hackers generally attach Trojan horse to a file, which triggers a virus or remotely controlled software, giving the hacker complete control over the computer.
• Viruses and Worms: Viruses and worms are well known for their destructive nature and the property of replicating themselves. They are basically pieces of computer program codes which are written by hackers and other computer geniuses.
• Sniffing: Sniffing is the act of intercepting TCP/IP packets while they are getting transferred on a network. The interception generally takes place through simple eavesdropping done by a hacker.

Computer System Security

The security of computer hardware and its components is also necessary for the overall protection of data. Even if the computer is not plugged into a network, a person can open its cabinet and gain access to the hard disk, which can later be used on some other computer for data theft. If a standalone system contains some important or classified information, it should be kept under constant surveillance. It is also necessary to remember that in case one dissembles his computer hardware, the risk of losing coverage of warranty becomes very high.



Computer Information and Data Security

It is important to avoid data and information loss in case of hard disk crashes. The only solution is to regularly keep backups of all the data on other media such as magnetic tapes, CD-ROM, etc. It is a good practice to store the media off-site and in case of a disk crash, restore the information from the backup media onto the new disk. In case a backup media is not affordable, one should try and store the files on at least two different media devices. These media devices should be systematically kept at a place which is safe and secured, as the information contained may be confidential. People usually backup database files, spreadsheet files and large documents. As the technical constraints are always there, it is better to take regular backups, in order to avoid any loss of information.



It is important to keep a record of technical support consultants and software documentations, like, manuals and guides to make them accessible to the staff members of the company.

Britain contracting facilities management

Britain's Defense Infrastructure Organization is developing a prime contract for management of the country's military training ranges.

The National Training Estate Prime contract will deliver management of training areas, camps and ranges when the current arrangement starts to expire in 2013.

Key sites will include the Salisbury Plain Training Area, Catterick Training Area, Sennybridge and Otterburn.

The contract is valued at between $653 million and $1.5 billion over a minimum of five years and a maximum of 10 years, the Defense Infrastructure Organization said.

The Defense Training Estate supports training for an average of 9,000 military personnel per day. Services to be provided under the project will include management and operation of ranges and training areas, specialist range safety and range warden services.

They will also include built estate facilities management, accommodation services, management of the rural estate, catering, cleaning, construction, range bookings and information management.

"The training estate contains a variety of terrain, buildings, and training facilities across U.K.," said Brig. Ian Simpson, head of International and Training. "By creating a national contract, we will ensure coherent management and optimized value for money across highly complex assets and training requirements."