KeNo's Housing and Economic Portal: Sunday September 6 Housing and Economic stories

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McGill Professor Caught in Ghostwriting Scandal - (www.montrealgazette.com) A McGill professor has been implicated in a ghostwriting scandal where articles paid for by drug giant Wyeth Pharmaceuticals made their way into reputable journals, court documents reveal. Barbara Sherwin – a psychology professor whose expertise in researching how hormones influence memory and mood in humans – was listed as the sole author of an April 2000 article in the Journal of the American Geriatrics Society arguing that estrogen could help treat memory loss in older patients. In fact, the article was written by a freelance author hired by DesignWrite, a ghostwriting firm based in New Jersey. The company was paid by Wyeth to produce ghostwritten articles, which were then submitted to reputable scholars. Court records show the article attributed to Sherwin was submitted to her by DesignWrite. Sherwin made numerous editing suggestions. Sherwin declined to be interviewed on the subject, but said in a statement she made an error. “I wrote a portion of the article, but not all of it, although only my name was listed as its author,” Sherwin said in a statement released by McGill to The Gazette on Sunday. “Other parts of that article were written with the assistance of DesignWrite, a firm which, it turns out, was employed by a pharmaceutical manufacturer to assist in the development of academic articles. I made an error in agreeing to have my name attached to that article without having it made clear that others contributed to it.” Sherwin said this is the only time she ever made such an error, and she was not paid for the article. “I believe the article, which was peer-reviewed, represented sound and thorough scholarship and in no way could be construed as promotion for any particular product or company,” the statement continued. Sherwin is the first Canadian researcher involved in the ghostwriting scheme, which was first reported by The New York Times and the journal Plos Medicine, after a successful court challenge made thousands of pages of documents available. The ghostwriting was uncovered by lawyers working for 8,400 women who are suing Wyeth and claiming the hormone drugs caused them harm. In all, 26 papers were printed in 18 medical journals, including The American Journal of Obstetrics and Gynecology and The International Journal of Cardiology. McGill said it will investigate the incident.

The Coming Upheaval in Japanese Politics - (www.marketwatch.com) A political earthquake is in the making in Japan as an increasingly tired-looking Liberal Democratic Party -- in power almost continuously since 1955 -- prepares to say sayonara after the parliamentary elections on Aug. 30. Yukio Hatoyama, leader of the opposition Democratic Party of Japan, is heavily tipped by opinion polls to take the reins from visibly waning Prime Minister Taro Aso. This is the moment -- equivalent to the Socialists taking power when President François Mitterrand won in France in 1981 -- when a political faction used to high office since the 1950s hands over the baton to an untried party. The change may be overdue from a political point of view, but it spells disruption for the economy. The good news is that much of the DJP is composed of LDP retreads, so too much radicalism in such areas as defense and security policies looks unlikely. The bad news is that the party has a less-than-convincing economic policy and is likely to add further to Japan's burgeoning public debt of close to 200% of GDP. With around 95% of government bond issues held by local institutions and savers, no one is getting too vexed about exploding indebtedness. But Tokyo officials warn the pending sea change in the political landscape will bring months of uncertainty and a forthcoming "war" over the distribution of economic jurisdiction among rival Japanese bureaucratic factions. All are highly likely to stifle the already anemic recovery. Dislocation may be in store on the monetary front, too. With the dollar suddenly a safer bet on U.S. revival hopes, the foreign exchanges may be in the mood to mark down the yen in coming weeks. In a recent Japanese newspaper article, Hatoyama accused America of unleashing an unfettered "globalization wave" and foisting "market fundamentalism" on the rest of the world. That has raised fears of a policy rift with Washington. Hayotama also called for an end to "dollar unilateralism," lending support to a sporadic emerging economy campaign to unseat the dollar as the leading reserve currency. Hayotama's rhetorical flourish -- siding with the political leaders of China and Russia -- scores high marks for gesture politics and is hardly likely to lead to any great change in the proportion of dollars held in Japanese currency reserves, thought to be nearly 70%. From a psychological point of view, however, the statement could turn out to be counter-productive. If economic uncertainties weaken the yen as the world's third most important reserve currency after the euro, then the financial markets -- backed by the asset management policies of central banks and sovereign wealth funds -- will bid up the greenback.

33 Advertisers Have Abandoned Glenn Beck - (news.yahoo.com/s/ap) Glenn Beck returns to Fox News Channel on Monday after a vacation with fewer companies willing to advertise on his show than when he left, part of the fallout from calling President Barack Obama a racist. A total of 33 Fox advertisers, including Wal-Mart Stores Inc., CVS Caremark, Clorox and Sprint, directed that their commercials not air on Beck's show, according to the companies and ColorofChange.org, a group that promotes political action among blacks and launched a campaign to get advertisers to abandon him. That's more than a dozen more than were identified a week ago. While it's unclear what effect, if any, this will ultimately have on Fox and Beck, it is already making advertisers skittish about hawking their wares within the most opinionated cable TV shows. The Clorox Co., a former Beck advertiser, now says that "we do not want to be associated with inflammatory speech used by either liberal or conservative talk show hosts." The maker of bleach and household cleaners said in a statement that it has decided not to advertise on political talk shows. The shows present a dilemma for advertisers, who usually like a "safe" environment for their messages. The Olbermanns, Hannitys, O'Reillys, Maddows and Becks of the TV world are more likely to say something that will anger a viewer, who might take it out on sponsors. They also host the most-watched programs on their networks. "This is a good illustration of that conundrum," said Rich Hallabran, spokesman for UPS Stores, which he said has temporarily halted buying ads on Fox News Channel as a whole. Beck can bring the eyeballs. With the health care debate raising political temperatures, his show had its biggest week ever right before his vacation, averaging 2.4 million viewers each day, according to Nielsen Media Research. He was actually on another Fox show July 28 when he referred to Obama as a racist with "a deep-seated hatred for white people." The network immediately distanced itself from Beck's statement, but Beck didn't. He used his radio show the next day to explain why he believed that. He would not comment for this article, spokesman Matthew Hiltzik said. ColorofChange.org quickly targeted companies whose ads had appeared during Beck's show, telling them what he had said and seeking a commitment to drop him. The goal is to make Beck a liability, said James Rucker, the organization's executive director. "They have a toxic asset," Rucker said. "They can either clean it up or get rid of it." It's not immediately clear how many of the companies actually knew they were advertising on Beck's show. Sometimes commercial time is chosen for a specific show, but often it is bought on a rotation basis, meaning the network sprinkles the ads throughout the day on its own schedule. Sometimes ads appear by mistake; Best Buy said it bought commercial time for earlier in the day, and one of its ads unexpectedly appeared in Beck's show.

Artificial Life Will Be Created in Months - (www.dailymail.co.uk) Scientists are only months away from creating artificial life, it was claimed yesterday. Dr Craig Venter – one of the world’s most famous and controversial biologists – said his U.S. researchers have overcome one of the last big hurdles to making a synthetic organism. The first artificial lifeform is likely to be a simple man-made bacterium that proves that the technology can work. But it will be followed by more complex bacteria that turn coal into cleaner natural gas, or algae that can soak up carbon dioxide and convert it into fuels. They could also be used to create new vaccines and antibiotics. The prediction came after a breakthrough by the J Craig Venter Institute in Maryland. Researchers successfully transferred the DNA of one type of bacteria into a yeast cell, modified it and then transferred it into another bacterial cell. The pioneering 'gene swap' was performed on a simple species of bacteria called Mycoplasma mycoides. Carole Lartigue and colleagues removed the bacteria's entire genome and inserted it into the yeast - an organism that is distant from bacteria on the tree of life. Yeast is easier to manipulate in the lab and this process allowed the team to alter the genes - in this case, deleting one gene not necessary for bacteria to live.

FDIC Reserve Funds Nearing Depletion - (www.fourwinds10.com) America is just a few days away from a possible day of reckoning. I again call attention to this day, August 25, when the Federal Deposit Insurance Corporation issues its 2nd Quarter report for 2009 on the state of health of American banks. It has not particularly alarmed Americans that its growth and prosperity have been built upon debt. The American public is a bit desensitized, particularly since the Y2K threat fizzled. We must wait and see how Americans respond to the upcoming FDIC report. The following charts tell the story. There are roughly 8400 American banks that set aside a small portion of their profits to aggregately insure bank depositors should their local bank fail. A plethora of bank failures has depleted the FDIC reserve fund from $52.8 billion in 2008 to $13 billion in the 1st Quarter of 2009. (See chart below). Alison Vekshin, writing for Bloomberg, indicates. "The failure of 77 banks this year is draining the fund, prompting the agency in May to set an emergency fee of 5 cents for every $100 of assets, excluding Tier 1 capital, to raise $5.6 billion in the second quarter. The agency has authority to set fees in the third and fourth quarters, if needed, to prevent a decline in the fund from undermining public confidence." Vekshin goes on to report that 56 bank failures since March 31 have cost the FDIC an estimated $16 billion. (For comparison, in the 1st Quarter, bank failures only cost the FDIC $2.2 billion.) That $16 billion bank rescue would fully deplete the FDIC fund as it only had $13 billion at the close of the 1stQuarter. It’s possible the FDIC has already tapped into its line of credit at the Treasury Department without setting off alarm bells to the public. The FDIC is required by law to maintain a reserve ratio, or balance divided by insured deposits, of 1.15 percent. It was at 0.27 percent as of March 31. It could be near zero at the current moment. (See 1stQuarter FDIC reserve ratio chart below)

Former Athletes' Adviser Charged in Ponzi Scheme - (www.cnbc.com) Federal prosecutors have charged a woman who once advised Michael Vick and several other NFL players with stealing $3 million from eight victims in a Ponzi scheme. Prosecutors say Mary Wong worked out of her Omaha home and purported to sell investments in luxury properties in Arizona, Tennessee and Michigan along with private jets and other investments. But according to the indictment unsealed Monday, Wong used the money she raised to support her other businesses and a lavish lifestyle for herself, her business partners and clients. Prosecutors say some money from new investors was used to pay past investors, as in a Ponzi scheme. Wong has not been registered to sell securities investments since August 2004, according to court documents, and in September 2007, she was permanently barred from trading securities on the New York Stock Exchange. Wong's attorney, Clarence Mock, did not immediately respond to a message left Monday afternoon. Three NFL players who played for the University of Nebraska were partners in a corporation that Wong ran although she also ran her own investment business. Demorrio Williams of the Kansas City Chiefs and twins Josh Bullocks of the Chicago Bears and Daniel Bullocks of the Detroit Lions were partners with Wong in Williams & Bullocks LLC, which prosecutors say benefited from the Ponzi scheme. Williams and both Bullocks brothers used to play for the University of Nebraska. Williams and Daniel Bullocks did not immediately respond to messages left with their teams. Josh Bullocks said he couldn't discuss the matter Monday afternoon because he was getting ready for practice. The federal indictment against Wong identifies her victims only by initials, so it was not immediately clear Monday who lost money and whether Vick's money was involved in the scheme. Vick sued Wong in January seeking to recover at least $2 million from her; that case is still pending in U.S. District Court in Norfolk, Va. Vick's current team, the Philadelphia Eagles, referred questions to his publicist, who did not immediately respond to a message left Monday evening. According to Vick's lawsuit, Wong persuaded Vick to give her power of attorney, putting her in control of his finances, but did not disclose the sanction she received from the New York Stock Exchange for depositing a customer's money into her personal bank account.

OTHER STORIES:

US Military Says Force in Afghanistan Isn't Big Enough - (www.mercurynews.com)
NYT: The Ascendance of China - (www.nytimes.com)
The Fiscal Ruin of the Western World Beckons - (www.telegraph.co.uk)
Roubini: Risk of Double-Dip Recession is Rising - (www.ft.com)
Video: Tom Woods on the Dynamics of the Fed - (www.dailypaul.com)
Millions Face Shrinking Social Security Checks - (www.usatoday.com)
Is America Scientifically Illiterate? - (www.usatoday.com)
iPhone Defies Recession - (www.bloomberg.com)