WaMu failed because of run on bank, former regulatory chief says

By Jim Puzzanghera and Clement Tan

John Reich, who was director of the Office of Thrift Supervision, tells a Senate panel that Washington Mutual’s 2008 collapse resulted from a drop in public confidence, not a failure by his agency.

Reporting from Washington — The former head of the chief banking regulatory agency that oversaw failed Washington Mutual told lawmakers Friday that the giant savings and loan collapsed because of a run on the bank, not failures by him or other regulators.

The testimony of John Reich, who served as head of the Office of Thrift Supervision from 2005 to 2009, came as a Senate subcommittee released the results of an 18-month investigation that blasted regulatory supervisors for doing little to halt risky practices at WaMu that bank examiners had identified as early as 2003.

The criticism was echoed by a report this week on WaMu’s collapse, the largest bank failure in U.S. history, by the inspectors general of the thrift agency and the Federal Deposit Insurance Corp.

Reich said WaMu was seized by regulators on Sept. 25, 2008, because of a $16.4-billion run on deposits after the sharp decline in the economy throughout the year and the failure of Lehman Bros. and the bailout of American International Group Inc. just days earlier.

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Big immigration march in Washington

By Clement Tan and Don Lee

Reporting from Washington — Determined to push a major overhaul of the immigration system to the top of the nation’s political agenda, tens of thousands of people rallied Sunday on the National Mall, challenging Congress to fix laws that they say separate families and hurt the country’s economic and social vitality.

Organizers and supporters of the “March for America” campaign — who demonstrated as House members cast a historic vote on healthcare — want to make an immigration overhaul the next big undertaking in Washington.

“The reality is that immigrants keep jobs in America, they help businesses move forward,” said Angelica Salas, director of the Coalition for Humane Immigrant Rights of Los Angeles, one of hundreds of community, labor and faith-based groups nationwide that joined the march.

The organizing group, Reform Immigration for America, said Sunday’s rally was larger than the massive Washington demonstration in April 2006, when thousands protested around the country over immigrant rights and enforcement practices. On Sunday, the crowd stretched nearly five blocks on the mall.

Although the event had a festive, almost carnival-like feel to it — young and old in T-shirts walking amid white tents and balloons while drummers and musicians played — many participants came bottled up with frustration or sorrow.

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Campaign finance legislation faces tricky issue of foreign corporations

Reporting from Washington – Proposed legislation to block foreign companies from contributing money to U.S. elections could end up affecting well-known companies such as Chrysler, Anheuser-Busch and Citgo, according to legal experts and company representatives.

The legislation is a reaction from key House and Senate Democrats to a Supreme Court decision in January that struck down a portion of the nation’s campaign funding laws, allowing corporations to freely contribute to political campaigns.

The high court’s 5-4 decision in Citizens United vs. Federal Election Commission seemed to open the way for U.S. subsidiaries of foreign corporations to also contribute to campaigns.

The legislators say they are now considering a broad definition of foreign corporations — companies that are more than 20% owned by non-American entities. That could end up banning thousands of corporations from contributing to political activities.

Chrysler would be affected because the Italian automaker Fiat has a 35% stake. The oil company Citgo Petroleum Corp. was started by an American oilman but has been wholly owned by the Venezuelan state-owned petroleum company since 1990. St. Louis-based Anheuser-Busch, the company that brews Budweiser, was bought by Belgian brewing giant InBev for $54.8 billion in 2008.

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Fierce snowstorm shuts down Washington

Reporting from Washington – A ferocious blizzard, dubbed the “snowpocalypse” and “snowmageddon,” descended Friday on Washington, shutting federal offices early, closing schools and sending residents scurrying to stock up on supplies to carry them through the weekend.

Forecasters predicted 30 inches or more of snow, which would easily break the area’s all-time snowfall record of 28 inches set in 1922. The area has seen more than a foot of snow only 13 times since 1870, according to the National Weather Service.

There were lines that went around the block to get into some grocery stores. Hardware and liquor stores were mobbed, and many shops had already run out of items for their customers.

“I tried to stock up, but the shelves were empty,” said Beth Davies, who went to the Giant supermarket in suburban Silver Spring, Md. “There was only pig feet left” in the meat department.

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Pilot erors blamed in deadly N.Y. crash

Reporting from Washington — A series of pilot errors caused the crash of Continental Connection Flight 3407 near Buffalo, N.Y., last year, killing 50 people, but several common aviation industry practices may have led to the mistakes, the National Transportation Safety Board reported Tuesday.

NTSB Chairwoman Deborah A.P. Hersman said the pilots’ errors showed their “complacency and confusion that resulted in catastrophe.” She said she would press the Federal Aviation Administration and Congress to change procedures.

“History is repeating itself,” Hersman told reporters during a break in an evidentiary hearing Tuesday. “There are things in this accident we’ve seen before. . . .”

“Today is Groundhog Day, and I feel like we are in that movie,” she said, referring to a 1993 film about a weatherman who repeatedly relives the same day. “We have made recommendations time after time after time. They haven’t been heeded by the FAA.”

Safety issues raised by the Buffalo accident, Hersman said, go beyond the mistakes that caused it. She noted that the crash cast a spotlight on the safety gap between major airlines and regional carriers, where lower-paid pilots are more likely to commute long distances, fly fatigued and receive inadequate training.

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Grappling with the Obama Reality

For people like me — young, college-educated and politically independent “millenials” — Barack Obama was and stilll remains the college-professor-we-wished-became-president, who actually became president of the United States. His “Yes, We Can” campaign tagline and exhortation for young ones to enter public service resonated strongly, but much to the surprise of those who know my politics, I was rooting for Hilary Clinton in the Democratic primaries. It wasn’t so much a vote against Obama than a vote for Mrs Clinton. We all know who won.

Sure, there were concerns over baggage from her husband’s presidency, but she also had the experience and the verve to negotiate the murky waters of Congressional politics, an important aspect of legislative strategy. I thought Obama could have done with some more political experience as either Hillary’s vice-president or Secretary of State, which would then prepare him for a run in 2016. After all, he’s much younger than Hillary. If there were anybody more equipped to clean up the mess created by a spoilt brat who didn’t know better and allowed two wily old foxes to hijack his presidency, it was perhaps a strong and smart motherly figure who would be able to stand up to the egos that dot politics. Simply put, America needs to be rehabilitated.

Those same friends thought I was cynical for thinking that, but politics is cynical. You have to fight cynical with cynical and then somehow rise above that. Not many political progressives are capable of that because they usually get lynched by the GOP for their politics, which are easily cast as “limp” and “gutless” and therefore “bad for America” by their more hawkish opponents. Both Obama and Hillary want to rise above that, but I wasn’t sure if Obama had what it takes to move beyond cynical hell. I was enthralled by the idea of an Obama presidency, but I wasn’t too hot about the reality of it.

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Washingtonians remember Kennedy at vigil Wednesday night

Photo: Clement Tan

Whatever wrong the late Sen. Ted Kennedy had done earlier in his life, George Mason University professors Hugh Gusterson and Allison Macfarlane are satisfied the youngest of the Kennedy brothers subsequently redeemed himself in the Senate. “He might have been flawed, but he was also passionate and righteous,” Gusterson said.

He was probably echoing the views of the 150-strong crowd who had gathered at the heart of Washington D.C in a hastily arranged candlelight vigil for the late Senator Wednesday evening. For an hour or so, the north side of the Dupont Circle fountain turned into a makeshift memorial for the late senator from Massachusetts.

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Tempering dreams with harsh reality

Photo: Flickr User Yan Arief

TANKING economy, check; struggling newspaper industry, check; few opportunities for fresh young talent, check.

So why would any fresh graduate choose to quadruple his student debt by going straight into graduate journalism school, only to enter an industry that is seemingly devoid of opportunities?

Well, I did. My friends thought I was insane, but I could not imagine doing anything else. I guess I also wanted to attend Columbia Journalism School because the idea of hazarding a calculated risk appealed to me.

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Economic logic alone does not make a “home”

Photo: Flickr User besar bear
Photo: Flickr User besar bear

What makes a country a home? Is it emotional ties or pure economic self-interest?

Linda Lim posed this question in a Straits Times article published June 19 and it has lingered in my mind ever since, particularly at the Kent Ridge Ministerial Forum held Aug. 31 at the NUS Theatrette.

Singapore’s manpower minister, Ng Eng Hen was the minister in attendance as he suggested how the Singapore graduate can “stand tall in a shrinking world”. He talked about the perceived strengths and weaknesses of the Singapore graduate and suggested we have to improve if we were to take advantage of future opportunities in an increasingly globalised world.

It all sounded so familiar. Ng cached his argument in an unmistakable economic paradigm that has come to characterize the PAP government. But should the only logic that prevails on most occasions be economic in a home? While it is important to embrace this global human flow, is Singapore embracing this at the risk of alienating Singaporeans?

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