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Washington Redskins Are Pursuing Jay Cutler

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Redskins Still in Pursuit of Cutler

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By Jason Reid and Jason LaCanfora
Washington Post Staff Writers
Thursday, April 2, 2009; 12:07 PM

The Washington Redskins’ pursuit of Jay Cutler continued today, with the Denver Broncos reportedly informing teams they want at least two first-round draft picks for the disgruntled quarterback.

Cutler, who requested a trade on March 16, expressed surprise that Denver had moved so quickly to meet his demand and indicated he was having second thoughts about leaving the Broncos.

“I was surprised they decided to trade me this soon,” Cutler, 25, told FoxSports Wednesday night. “I didn’t want to get traded. That wasn’t me. They had been going back and forth saying things, wanting me to be their quarterback, and then they didn’t. I really didn’t want this. I love Denver. I really like my teammates. I didn’t want it to get this far.”

One NFL source said the Redskins were trying to complete the deal as quickly as possible, although at least two other teams, the New York Jets and the Tampa Bay Buccaneers, were also reportedly interested in acquiring Cutler. An official with an NFL team that has been in touch with Denver said the Broncos told his club they would want at least two first-round draft picks for the two-year starter, confirming a report by ESPN’s Chris Mortensen.

The Redskins have declined to comment on the reports.

The NFL source said Redskins owner Daniel M. Snyder has been pushing for the trade in an attempt to solve the team’s decades-long pursuit of a franchise quarterback.

Another NFL source said a high-ranking Redskins official contacted one NFL team Wednesday about the possibility of trading quarterback Jason Campbell for a second-round pick in the upcoming draft. That source said he interpreted the Redskins’ overture as an attempt by Washington to put together a package to acquire Cutler.

Redskins spokesman Zack Bolno denied the team had inquired about dealing Campbell.

Redskins officials have repeatedly publicly denied interest in Cutler. Vinny Cerrato, Washington’s executive vice president of football operations, said March 17 that the team was not pursuing Cutler, and Coach Jim Zorn dismissed the notion while meeting with reporters last week at the NFL owners’ meetings in Dana Point, Calif.

If the Redskins fail to acquire Cutler, they risk alienating Campbell, who has been the starter the past two seasons. Campbell said Wednesday that he wants to stay in Washington.

“I want to be here. I feel like there’s a lot I want to accomplish and that’s what I’ve been working to do, but you know it’s not in your control,” Campbell said. “All I can do is just keep doing what I’m doing, working hard and waiting to see what happens.”

Campbell was among the main targets of frustrated fans, who questioned his intelligence and leadership skills on Internet message boards and sports-talk radio, during the team’s 2-6 collapse after a 6-2 start to last season. The offensive line struggled in pass protection, and the receiving corps did not produce as Snyder and Cerrato hoped, but “everyone always want to blame the quarterback,” Campbell said yesterday. “I know I’m improving, I’m working to get better every day, but some people are . . . you just know that’s the way it is.”

After the Redskins failed to qualify for the playoffs, Cerrato declined to commit to Campbell as the team’s quarterback beyond the 2009 season. Zorn has continued to publicly support Campbell, who in only his second full season as a starter last season established personal bests with an 84.3 passer rating, 3,245 yards and 13 touchdown passes while throwing only six interceptions.

Zorn, however, has stopped short of declaring Campbell a “franchise quarterback,” saying the former first-round draft pick possesses the skills to become an elite player. Having played in three offensive systems in his first four NFL seasons with Washington, Campbell was eager to begin his second season in Zorn’s version of the West Coast offense.

“I was definitely looking forward to being in the same offense for another year and seeing what we could together,” Campbell said. “Being in a different system almost every year, you just don’t get as comfortable as when you’re in the same system for a lot of years. It’s just different.”

Although Campbell still hopes to be Washington’s starting quarterback in the 2009 season, “with all the stuff out there, you know crazy stuff happens in this league,” he said. “You just have to be ready for anything.

“A bunch of trade talk is what got Cutler mad at Denver, that’s the reason all that stuff started with him, but I wouldn’t do all that. The thing you understand that there’s no loyalty in this game, so you just have to work hard. That’s all you can do.”

Cutler is one of only three NFL quarterbacks to throw for at least 25 touchdown passes and 4,500 yards last season, and has developed well the past two seasons as a starter, to the point where some believe he is on the cusp of becoming a star.

He expressed a desire to leave Denver after the Broncos were reported to have pursued a trade for New England Patriots quarterback Matt Cassel — a former pupil of rookie head coach Josh McDaniels. The Broncos attempted to repair the frayed relationship between the talented young quarterback and the coach, but the situation deteriorated to the point where owner Pat Bowlen finally declared his intent on Tuesday night to trade the player.

Cutler was the 11th overall pick in the 2006 draft out of Vanderbilt, and was heralded for his strong arm, size, strength and athleticism. He replaced Jake Plummer as Denver’s starter in late November of his rookie season, and finished 2007 as the league’s 12th-rated passer. In 2008 he reached the Pro Bowl, but some scouts have pointed to his high interception totals as a cause of concern. He has thrown 32 interceptions in his last 32 games, and at least one interception in 13 of his 16 starts last season.

Cutler has also failed to post a winning record as a starter, though Denver’s poor defense certainly played a role in that.

Some NFL executives have also called Cutler’s attitude and leadership into question following his response to the trade talks, and some clubs found him to be aloof while evaluating him prior to the draft. Whether he possess all of the intangibles generally associated with elite quarterbacks will play out as he evolves in his next locale.

President Barack Obama Arrives in Europe

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Obama arrives in London, first leg of Europe trip

5:00pm est
AP
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LONDON – President Barack Obama embarked on his Europe trip Tuesday, with a hefty economic and national security agenda for his first journey across the Atlantic since taking office two months ago. The president and first lady Michelle Obama arrived in London Tuesday night local time. First up for the president was a summit of the world’s economic powers to address the global financial meltdown.

Obama planned to meet with leaders of Britain, Russia and China — major players in the U.S. financial system. He also scheduled meetings with leaders of India and South Korea while in London.

During his eight-day, five-country trip, Obama is scheduled to meet with European leaders who split with the United States over the war in Iraq and the treatment of suspected terrorists held at Guantanamo Bay, Cuba, under President George W. Bush.

He also will participate in a NATO summit marking the 60 years since the alliance was founded to blunt Soviet aggression in Europe.

Obama plans to attend international summits on urgent topics, including the downward-spiraling fight against terrorists in Afghanistan and Pakistan. He also will make his first stop in a Muslim nation, Turkey.

Wildly popular around the globe but relatively inexperienced in foreign affairs, Obama and the first lady also will squeeze in a Buckingham Palace audience with Queen Elizabeth II. He will deliver a speech in France on the trans-Atlantic relationship and an address in Prague on weapons proliferation. And he will host a round-table session with students in Turkey.

Taking Stock Of The Claims Against Michael Steele

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Steele Trap? Taking Stock Of The Claims Against The New RNC Chief

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TALKING POINTS MEMO M U C K R A K E R
By Zachary Roth
February 9, 2009,

So what to make of the allegation against newly elected GOP chairman Michael Steele, that his 2006 Senate campaign made payments to a company run by his sister, for work that was never performed?

It’s not yet clear. The claim comes from a court filing made last March by Alan Fabian — Steele’s finance chair during that campaign — who was facing unrelated fraud charges and hoped, in vain, to get credit for cooperation. In the end, Fabian was sentenced to nine years in jail for swindling millions from businesses and banks.

So there’s reason to be skeptical.

But there isn’t reason to dismiss the claim out of hand. For one thing, the Feds appear to be taking it seriously: Agents have spoken to Steele’s sister about the issue, according to a Steele spokesman.

Steele told ABC’s This Week that the FBI is “winding this thing down” but didn’t explain how he knew that. And although Steele added that the payments were for legitimate work, the explanations from his camp don’t yet add up.

At issue is a February 2007 payment of more than $37,000 made by Steele’s unsuccessful Senate campaign to Brown Sugar Unlimited, a company run by Monica Turner, Steele’s sister (and also the former Mrs. Mike Tyson, incidentally).

According to campaign finance records, reports the Post, the payments were for “catering/web services.” But a Steele spokesman told the paper that Turner “did a lot of media stuff” for the campaign. The spokesman then showed the paper an invoice for catering services for two events. But the invoice was dated December 2006, although the events occurred in October 2006 and July 2007. The spokesman attributed this to a typo.

So, was it media, web services, or catering? How many companies do all three?

There’s also the fact that, as the Post reports, “Turner filed papers to dissolve the company 11 months before the payment was received”. (Steele told ABC yesterday that Turner believed the company was still in existence when the payments were made.)

The payments to Turner aren’t the only allegations Fabian is making against Steele. There are three additional — and apparently less serious — claims.

One is that Steele, who at the time was Maryland’s lieutenant-governor, used his state campaign to pay bills invoiced to his 2006 Senate campaign for printing services, totaling around $38,000 — which would violate campaign finance law. Steele’s spokesman says the printing was related to Steele’s lieutenant governor’s office.

Another claim is that Steele paid $75,000 from the state campaign to the law firm of Baker Hostetler, for work that was never performed. The payment was listed in campaign finance records as an in-kind contribution to the state GOP. And a lawyer for Baker Hostetler — who was also chief counsel for the RNC — told the Post that the payment was for legal work on challenging Maryland’s 2002 legislative redistricting.

Finally, Fabian claims that Steele or an aide transferred more than $500,000 in campaign cash from one bank to another without appropriate authorization. The bank transfer appears to have angered aides to former Maryland governor Bob Ehrlich, who had hoped to use the money for other states races, including Ehrlich’s. But there doesn’t appear to be evidence that it was illegal.

There’s also no evidence that the Feds are looking into any of these latter three claims.
So it’s those payments to Steele’s sister’s company that appear to be where the action is. And until we get a fuller explanation of what those payments were really for, this story will probably linger.

That can’t be a prospect that will please a Republican Party that just made Steele its major national spokesman

David Letterman Rips Limbicile

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Letterman shreds Limbaugh, calling him ‘bonehead,’ ‘gangster

David Edwards and John Byrne
Tuesday March 3, 2009

Raw Story

In a scathing rebuke to Rush Limbaugh, CBS’ David Letterman excoriated the conservative talk show host while talking to CBS anchor Katie Couric on the network’s ‘Late Show’ Monday night.

“What about this bonehead Rush Limbaugh? Honest to God, I mean, what is going on there?” Letterman said.

“Dave, don’t do this to me, please,” Couric interjected. “Don’t do this to me.”

“He gets up in Washington and he’s the keynote speaker at some function and he comes up and he looks like an East European gangster,” Letterman continued. “He’s got the black jacket on, the black silk shirt and it’s unbuttoned like, oh yeah, when you think Rush Limbaugh, you think, ‘Ooh, let’s see a little flesh.’ Honestly. What is he doing?”

“On a serious note — although I’m thrown by the Rush Limbaugh flesh in the same sentence — I think it’s sort of indicative of the power vacuum in the Republican party right now… and there are ideological differences about role of government but I just don’t know if the country can waste time talking about different sorts of approaches and whether Keynesian economists agree with other economists about the free market.”

Remarked Letterman: “We get used to Republicans like Newt Gingrich, and Newt resembled a Newt — but a smart guy. And now you’ve got Rush Limbaugh, who says, ‘Sorry, the casino’s closed.’ Leave us alone.”

“So much for my interview with Rush,” Couric concludes.

AP Picks Top 10 'Pop Culture' Moments of 2008

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“Yes We Can”

dowThe Associated Press

NEW YORK–

In any normal year, it would be impossible to discern a coherent theme from a year of American pop culture, try as we journalists might. This year was different.

The presidential campaign seeped into our culture everywhere it could: into our music, our television, our street art, our Internet habits. And it was a symbiotic relationship, for pop culture seeped back into our politics, too. Remember the bizarre moment Paris Hilton and Britney Spears became part of the campaign, courtesy of a John McCain ad likening Barack Obama to a vapid Hollywood celebrity?

Or try this: Tina Fey and Sarah Palin, walking by each other at a fake news conference on “Saturday Night Live,” indistinguishable from each other in matching red blazers and Palin hairdos. Even Fey’s toddler daughter had trouble telling them apart that night.

Now Palin’s back in Alaska, Fey’s back on “30 Rock” and, oh yes, Obama’s on his way to the White House. But they weren’t the only big names in the 2008 pop culture firmament. A chronological journey back:

JANUARY

How can we begin without BRITNEY SPEARS still, amazingly, the most-searched term on Yahoo. A few days into 2008, she melts down spectacularly, ending up in a hospital after locking herself in a room with her young son. We don’t need Dr. Phil to tell us this girl needs help, though he does. Celeb magazines freely diagnose her as bipolar. (But more on Britney later.)

In politics, HILLARY RODHAM CLINTON has her first real pop-culture moment of the year when she chokes up talking to voters in a New Hampshire diner, a scene to be replayed endlessly on YouTube.

And true tragedy strikes when actor HEATH LEDGER dies of an accidental prescription drug overdose in a New York apartment, cutting short a brilliant career.

FEBRUARY

The Obama slogan “Yes We Can” ricochets across the Web in rapper and songwriter WILL.I.AM’s viral video hit, starring a host of celebrities. It’s not the only good news for Obama: His campaign raises a staggering $55 million this month, a success attributed to small donations gathered on the Internet.

And “SATURDAY NIGHT LIVE” spoofs the media’s fondness for Obama later, Clinton will refer to the skit in a real debate.

HOLLYWOOD WRITERS, meanwhile, end their 100-day strike. Days later, the OSCARS air to dismal ratings.

MARCH

Politics continues to enthrall, and this time it’s New York Gov. ELIOT SPITZER who’s on everyone’s mind. The most striking visual: the ashen-faced misery of his wife, Silda, standing next to him at the podium as he resigns over a prostitution scandal. The blogosphere and the airwaves buzz with the question: Why did she stand by him? Would you?

Obama may be the Internet candidate, but here’s an Internet sensation he’d prefer disappear: video of his former pastor JEREMIAH WRIGHT, making incendiary comments that will give Obama a major political headache.

APRIL

MILEY CYRUS is a genuine superstar at age 15, a role model to countless girls. So what’s the problem? A few pesky photos shot by Annie Leibovitz for Vanity Fair. They show the Disney princess, aka Hannah Montana of course, in a come-hither pose, with a bare back and shoulders. A rare bump in the road for this teen phenom.

In one of his many pop-culture moments, OBAMA displays true hip-hop cred, channeling Jay-Z with a “Dirt Off Your Shoulders” reference at a North Carolina rally. Mashups spread across the Web.

MAY

After four years and endless buildup, the “SEX AND THE CITY” gals return in a feature-length film. Will Carrie find happiness with Mr. Big? Yes, but even happier are the producers, after a $55.7 million opening weekend unprecedented for a chick flick. And this IS a chick flick. Men flock to root canal appointments.

HARRISON FORD returns as Indiana Jones at age 65! We doubt Hollywood would be so kind to a 65-year-old actress. And speaking of older women, they’re said to be behind the “American Idol” victory of 25-year-old DAVID COOK, who beats the baby-faced 17-year-old, DAVID ARCHULETA, breaking the hearts of countless tween girls.

Los Angeles street artist SHEPARD FAIREY creates his wildly popular poster of Obama, a red-white-and-blue hued image of the candidate gazing ahead, underlined by the word “HOPE.”

JUNE

TIM RUSSERT dies at 58 of a sudden heart attack, after more than 16 years in one of the most influential jobs in TV news moderator of NBC’s “Meet The Press.” The death causes some baby boomers to start to wonder about their own health.

A computer-animated science fiction romance? Leave it to Pixar. After “The Incredibles,” “Ratatouille” and “Cars,” another triumph for the studio comes in the form of “WALL-E,” a futuristic film about love between two robots.

JULY

Bonjour to the new JOLIE-PITT twins, who emerge in France, where parents ANGELINA JOLIE and BRAD PITT are hunkered down on their enormous estate. And BATMANIA reigns, thanks to LEDGER’S stunning (and posthumous) portrayal of the Joker in “The Dark Knight.”

BRITNEY and PARIS make their unwitting entrance into the campaign, fodder for McCain’s commercial mocking Obama as “the biggest celebrity in the world.” Hilton, though, gets the last laugh: The doe-eyed hotel heiress, lounging in a leopard-print swimsuit, offers up a much cleverer video riposte.

AUGUST

Call this the anti-celebrity month: Wary after that Britney-Paris spot, the DEMOCRATIC PARTY does its very best to de-emphasize the celeb factor at its convention in Denver. Meanwhile, McCain’s anti-celebrity campaign unveils its own, well, celebrity: the telegenic PALIN, who bursts onto the scene with a speech that galvanizes the GOP convention.

MADONNA turns 50! And the chiseled superstar is hardly alone. Also hitting the half-century mark this year: MICHAEL JACKSON, PRINCE, ELLEN DEGENERES, MICHELLE PFEIFFER, VIGGO MORTENSEN. Let’s imagine an amazing party at the royal palace in Monaco, where PRINCE ALBERT also hits the big 5-0, perhaps covered for CNN by CHRISTIANE AMANPOUR (yup, 50 too.)

SEPTEMBER

“I can see Russia from my house!” FEY debuts her impersonation of PALIN on “Saturday Night Live.” Kudos to the “SNL” writers, but you can’t say Palin doesn’t give them plenty of material including verbatim chunks of her rambling exchanges with KATIE COURIC. The CBS anchor, long plagued by low ratings and high expectations, makes a welcome comeback.

Also making a comeback: the ’60s, with all that guilt-free smoking, thanks to “MAD MEN,” the evocative drama on cable’s AMC. “Mad Men” wins an Emmy this month, thrilling its small but hugely loyal audience.

OCTOBER

Shall we just call it “HSM3”? And if you don’t know what that means, you probably won’t be seeing the movie. “High School Musical 3: Senior Year,” the big-screen sequel to the two Disney TV movies, sings and dances its fresh-faced way to the top of the box office, thanks to the durable appeal of Zac Efron, Vanessa Hudgens, Ashley Tisdale and the other “HSM” alums.

“SNL” scores its highest ratings in 14 years when it snags the ultimate prize: Palin herself. The VP candidate proves a game cast member, obliging happily when Amy Poehler shouts out: “All the mavericks in the house, put your hands up!” ”

And JOE THE PLUMBER makes his debut, as a constant reference in the third presidential debate. Later, Joe, aka Samuel Joseph Wurzelbacher, 34, campaigns for McCain and Palin.

NOVEMBER

Yeah yeah, Obama is elected, but we’ll reserve the pop culture prize this month for OPRAH WINFREY. Weeping on the shoulder of a stranger at Obama’s victory rally, and gushing uncontrollably on her postelection show, the talk-show queen can surely claim a little credit for the triumph of her “favorite guy.” Maybe MOST celebrity endorsements don’t mean much, but this is Oprah. Two economists even claim she brought Obama a million votes in the primaries.

DECEMBER

Any true pop culture story must end as we started: with BRITNEY for, after a year in which she seemed to reach the depths, this famously durable young woman is in the midst of an astonishing comeback, with “Circus,” her latest CD, reaching No.1 on the album charts, according to her label, Jive. At 27, she seems to be not only “the world’s pop princess,” as her manager says. She’s the world’s pop culture princess, too.

Polaroid Declares Bankruptcy For Third Time

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Dec. 19 (Bloomberg) — Polaroid Corp., the pioneer of instant photography, sought bankruptcy protection for the second time in seven years, blaming an alleged $2 billion fraud at its parent company Petters Group Worldwide LLC.

Petters Group, which acquired the 71-year-old company in 2005, has unsecured claims against Polaroid totaling $213.5 million, according to papers filed yesterday in U.S. Bankruptcy Court in Minneapolis. Polaroid, which is disputing the claims, didn’t estimate its total assets or debt.

The company and nine subsidiaries “entered bankruptcy with ample cash reserves, sufficient to finance the company’s reorganization under Chapter 11,” it said yesterday in a statement. “The company has not sought, nor does it expect to seek, additional debtor-in-possession financing.”

Petters Group’s founder, Thomas Petters, was arrested Oct. 3 on charges of mail fraud, wire fraud and money laundering. Prosecutors accused him of siphoning money from business ventures since 1995 to support an extravagant lifestyle.

Polaroid’s owner, based in Minnetonka, Minnesota, filed for bankruptcy in October after its assets were frozen by a judge. Petters and his firm are accused of defrauding hedge funds using fake purchase orders to secure investments. He allegedly told investors their money would be used to buy merchandise that would be resold to retailers including Costco Wholesale Corp.

Polaroid was founded in 1937 by legendary inventor Edwin Land, a Harvard University dropout.

Goggles, Instant Cameras

The company made protective glasses and goggles for the U.S. military during World War II. It sold the first instant camera in 1948, making $5 million in sales in the first year, according to the company’s Web site.

Another Petters company, Sun Country Airlines Inc., sought bankruptcy Oct. 6 when it couldn’t secure a $7 million short-term loan from its owner. The St. Paul, Minnesota-based carrier, which also had an earlier bankruptcy in 2001, has debt of $108.2 million and assets of $55.2 million, court papers show.

Polaroid has an annual profit of about $400 million through sales at retailers including Best Buy Co., Wal-Mart Stores Inc., Target Corp. and Sears Holdings Corp., it said in court papers.

“Despite having one of the most recognized brand names in the world, Polaroid has seen a decline in net sales over the past several years, coupled with increasing operational and product development costs,” the company said in bankruptcy papers.

DVD Players, TVs

Polaroid makes DVD players, TVs and other electronics, bringing in about $1 billion in annual sales. It unveiled a line of Zink printers in January that can make wallet-sized photos from digital cameras in 60 seconds.

“We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009,” Chief Executive Officer Mary Jeffries said yesterday in the company statement.

Polaroid said in February it would exit the film business and close plants in the U.S., Mexico and the Netherlands to focus on digital photography and flat-panel televisions. The company stopped making instant cameras for commercial use in 2006 and halted production of consumer models last year.

Polaroid first sought bankruptcy protection from creditors in 2001 after digital cameras rendered obsolete the instant-film technology that made the company a household name.

The company plans to fire 16 workers the day after Christmas and another 31 during the first quarter of next year, court papers show.

Ownership Changes

JPMorgan Chase & Co.’s private-equity unit, One Equity Partners LLC, in 2002 purchased a 53 percent stake in Polaroid for $56 million, helping it come out of its earlier bankruptcy. Petters Group began licensing Polaroid’s brand name in 2002 and bought the company in 2005 for $426 million.

The maker of One Step, I-Zone and JoyCam cameras was among the U.S. stock market’s “Nifty Fifty” three decades ago. The Nifty Fifty, compiled in 1972 by Morgan Guaranty Trust, a predecessor of JPMorgan, consisted of stocks considered certain to reward investors, regardless of how much they cost or how well the market performed.

Petters resigned as Petters Group chief executive officer Sept. 29 after the FBI received information that at least 20 investors may have been victims of a lending scam and raided the company’s Minnetonka headquarters. Petters has been jailed since his arrest. Several hedge funds that invested with Petters have also sought bankruptcy protection.

A former Petters Group tax accountant linked to the alleged fraud pleaded guilty today to conspiring to evade taxes. James Carl Wehmhoff, 67, admitted one count of conspiracy and one count of assisting tax fraud in federal court in St. Paul, Minnesota.

Land’s Inventions

Land, who left Harvard just months before graduation in 1932 to establish the company, is named on 533 patents, including one for the first synthetic polarizer.

The inventor kept Polaroid innovative for decades with products including 3-D film. The Polaroid OneStep was the world’s best-selling camera in the 1970s.

Lorrie Parent, a Polaroid spokeswoman, didn’t return a call for comment. The company earlier said it isn’t a target of the federal investigation.

The case is In re Polaroid Corp., 08-46617, U.S. Bankruptcy Court, District of Minnesota (Minneapolis).

To contact the reporters on this story: Courtney Dentch in New York at cdentch1@bloomberg.net; Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

Last Updated: December 19, 2008 15:45 EST

1 in 7 Owes More Than House is Worth

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Owners find themselves trapped underwater

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By Stephanie Armour, USA TODAY
Michael and Cynthia Russell wanted to move to New York City, where they both work. Jobs are more plentiful there than in their town of Poughkeepsie, N.Y. But like millions of Americans today, the couple are stuck. They owe about $80,000 more on the home they bought in 2004 than it is now worth.

So instead of selling their home, Cynthia is going to school to become a registered nurse and Michael is working from home.

“We have had to find opportunities closer to home,” Michael Russell says. “We actually began trying to refinance in June 2007, but absolutely no one would take us.”

It’s a problem that’s only expected to get worse for legions of homeowners across the USA. Nearly one in seven homeowners is underwater, owing more on their mortgages than their homes are worth. That’s about 12 million homeowners, nearly double the number underwater at the end of 2007, according to Moody’s Economy.com. Most are homeowners who bought between late 2003 and 2007.

Home prices are projected to drop on average another 10%, bringing to about 14.6 million the number of homeowners who will be underwater on their mortgages by fall 2009, says Mark Zandi, chief economist at Moody’s Economy.com. By contrast, about 2.5 million homeowners had negative equity in their homes in 2006.

Increasingly, job seekers find that their homes are albatrosses imperiling their ability to relocate for higher incomes or more secure job opportunities. In fact, the greatest drop in home prices, in many cases, is in areas with the sharpest rise in unemployment.

“It’s a pretty alarming trend,” says Alan Steel, general manager of AOL Real Estate.

In California, about 18% of homeowners owe more on their first mortgages than their homes are worth. In Florida, it’s nearly one in four. Half of homeowners in Louisiana are underwater on their first mortgages.

Paying on ‘a lost cause’

Ken Schimpf, 61, a retired carpenter in Lancaster, Calif., briefly toyed with the idea of moving to Wyoming so he could be closer to his oldest son and live in an area where he could find work more easily. But he’s trapped by his house.

In August 2005, Ken and his wife, Juli, bought their home in Lancaster for $330,000. It seemed ideal at the time. The 1,900-square-foot, three-bedroom house includes an expansive master suite with a Jacuzzi, a pool, and 2.5-car garage where he keeps a 1923 T-Bucket hot rod that he and his wife worked on.

They got an interest-only loan at 5.25%, with the rate locked in for five years.

But in January 2006, Juli was diagnosed with leukemia. She spent months in and out of the hospital. Ken eventually took a leave of absence from work to help care for her. She died last March. Now Ken is trying to make his mortgage payment of $2,600 a month by relying on his retirement pension of $1,900 a month and savings. He doesn’t want to lose the house because it’s also home to two adult children: a son who was laid off and a daughter who is working temporary jobs. In September, his mortgage payments will increase by almost $500 a month when the interest-only teaser runs out.

He’s selling his hot rod collection, looking for work and fast depleting his savings to make ends meet. Plans to sell the house were thwarted when he discovered the property is worth about $90,000 less than he paid for it. He doesn’t want to just walk away from the home because he fears that would devastate his credit.

“I really hate putting the money out each month into what appears to be a lost cause,” Schimpf says. “I just hope the economy turns around before too long so people can once again realize that owning a home is the American dream and not the American nightmare.”

The inability to relocate because of negative home equity isn’t just hurting workers who want to move for better jobs. It’s also straining employers. Employees and new hires are increasingly turning down relocation opportunities because of the housing market. A 2008 corporate relocation survey by Atlas Van Lines found that “family ties” was the top reason (62%) cited by companies for workers declining relocations. That was a sharp drop from 84% last year. By contrast, 50% of companies said employees cited “housing and mortgages concerns” as the reason for turning down relocation offers, vs. 30% in 2007.

The dramatic shift is forcing businesses to offer more generous relocation assistance at the same time they’re facing significant pressures to curtail costs because of the lackluster economy. In fact, the number of firms offering lump sum payments to transferees and new hires is at the highest in six years.

Some homeowners are so certain that their homes won’t appreciate anytime soon that they have pondered simply walking away. Accountant Jason Khan, 33, owes about $80,000 more on his Phoenix home than it’s worth in today’s market.

“I am not in danger of losing my house. I have no problem paying my mortgage payments,” he says in an e-mail. “However, I have considered walking away from my house and buying another … or making late payments to see if my mortgage company will renegotiate my principal with me.”

For the most part, lenders will only ease loan terms for homeowners who are at risk of default or foreclosure.

Home prices keep on falling

Economists say a rebound in the housing market is still months away. The drop in home prices has shown no signs of letting up. And at least $500 billion worth of option-ARM loans are expected to reset from mid-2009 through 2012, driving up monthly mortgage payments for homeowners.

That could lead to a wave of new foreclosures that “could drive down home prices and leave more people underwater,” Zandi says.

Jim Fawcett of Houston says the 6% decline in his home’s value is just enough of a drop to keep him from retiring and moving inland from the coast.

“There’s probably no way I could even sell my house in this market — short of giving it away,” says Fawcett, 70. “Homes in my area, a newer development, sit on the market for six months, don’t sell, then are taken off.”

Mara Stefan’s house is an unwanted reminder of her life before divorce. “As part of the settlement, I’m stuck in a house I don’t want to live in,” says Stefan, 42, who works in consumer technology and whose suburban Boston home is $60,000 underwater. She would love to move with her sons, Eric, 15, and Ethan, 6. “But it looks like I’ll have to be here awhile.”

Where'd The Bailout Money Go? Shhhh, It's a Secret

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warren2WASHINGTON (AP)

Dec 22

By MATT APUZZO– It’s something any bank would demand to know before handing out a loan: Where’s the money going?

But after receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending the money or they simply refuse to discuss it.

“We’ve lent some of it. We’ve not lent some of it. We’ve not given any accounting of, ‘Here’s how we’re doing it,'” said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. “We have not disclosed that to the public. We’re declining to.”

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

“We’re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn’t know where the money was going.

“We manage our capital in its aggregate,” said Regions Financial Corp. (RF) spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion – about the size of the Netherlands’ economy – to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money – not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that’s happening and there are no consequences for banks who don’t comply.

“It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there’s no way for taxpayers to find that out.

Pressured by the Bush administration to approve the money quickly, Congress attached nearly no strings on the $700 billion bailout in October. And the Treasury Department, which doles out the money, never asked banks how it would be spent.

“Those are legitimate questions that should have been asked on Day One,” said Rep. Scott Garrett, R-N.J., a House Financial Services Committee member who opposed the bailout as it was rushed through Congress. “Where is the money going to go to? How is it going to be spent? When are we going to get a record on it?”

Nearly every bank AP questioned – including Citibank and Bank of America, two of the largest recipients of bailout money – responded with generic public relations statements explaining that the money was being used to strengthen balance sheets and continue making loans to ease the credit crisis.

A few banks described company-specific programs, such as JPMorgan Chase’s plan to lend $5 billion to nonprofit and health care companies next year. Richard Becker, senior vice president of Wisconsin-based Marshall & Ilsley Corp. (MI) (MI), said the $1.75 billion in bailout money allowed the bank to temporarily stop foreclosing on homes.

But no bank provided even the most basic accounting for the federal money.

“We’re choosing not to disclose that,” said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

Others said the money couldn’t be tracked. Bob Denham, a spokesman for North Carolina-based BB&T Corp., said the bailout money “doesn’t have its own bucket.” But he said taxpayer money wasn’t used in the bank’s recent purchase of a Florida insurance company. Asked how he could be sure, since the money wasn’t being tracked, Denham said the bank would have made that deal regardless.

Others, such as Morgan Stanley (MS) spokeswoman Carissa Ramirez, offered to discuss the matter with reporters on condition of anonymity. When AP refused, Ramirez sent an e-mail saying: “We are going to decline to comment on your story.”

Most banks wouldn’t say why they were keeping the details secret.

“We’re not sharing any other details. We’re just not at this time,” said Wendy Walker, a spokeswoman for Dallas-based Comerica Inc., which received $2.25 billion from the government.

Heine, the New York Mellon Corp. spokesman who said he wouldn’t share spending specifics, added: “I just would prefer if you wouldn’t say that we’re not going to discuss those details.”

The banks which came closest to answering the questions were those, such as U.S. Bancorp and Huntington Bancshares Inc., that only recently received the money and have yet to spend it. But neither provided anything more than a generic summary of how the money would be spent.

Lawmakers say they want to tighten restrictions on the remaining, yet-to-be-released $350 billion block of bailout money before more cash is handed out. Treasury Secretary Henry Paulson said the department is trying to step up its monitoring of bank spending.

“What we’ve been doing here is moving, I think, with lightning speed to put necessary programs in place, to develop them, implement them, and then we need to monitor them while we’re doing this,” Paulson said at a recent forum in New York. “So we’re building this organization as we’re going.”

Warren, the congressional watchdog appointed by Democrats, said her oversight panel will try to force the banks to say where they’ve spent the money.

“It would take a lot of nerve not to give answers,” she said.

But Warren said she’s surprised she even has to ask.

“If the appropriate restrictions were put on the money to begin with, if the appropriate transparency was in place, then we wouldn’t be in a position where you’re trying to call every recipient and get the basic information that should already be in public documents,” she said.

Garrett, the New Jersey congressman, said the nation might never get a clear answer on where hundreds of billions of dollars went.

“A year or two ago, when we talked about spending $100 million for a bridge to nowhere, that was considered a scandal,” he said.

—

Associated Press writers Stevenson Jacobs in New York and Christopher S. Rugaber and Daniel Wagner in Washington contributed to this report.

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