From the AP:

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

"These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

The AP goes on to list several proposals from 2005 that were ignored. Here they are:

Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.

Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Countrywide, then the nation's largest mortgage lender, called the proposals "excessive" and claimed they would "inhibit future innovation in the marketplace." Whooooops.

AP IMPACT: US diluted loan rules before crash [AP]
(Photo: dooleymtv )

[Failblog] (Thanks, Rob!)

In recent months, Moody's and S&P have been forced to downgrade the ratings of mortgage-backed securities as delinquencies soared and the housing market crashed. But why were they so highly rated in the first place? According to Bloomberg, the SEC found that "credit-rating companies improperly managed conflicts of interest and violated internal procedures in granting top rankings to mortgage bonds."

An e-mail that a S&P employee wrote to a co-worker in 2006, obtained by committee investigators, said, ``Let's hope we are all wealthy and retired by the time this house of cards falters.''

The New York Times says that one former S&P executive, with the all-too-perfect name of Mr. Raiter, claimed that old, outdated models were used to rate the bonds and that newer more accurate estimates were avoided due to "budgetary concerns."

Mr. Raiter said that the residential mortgage rating group at S.& P. had captured the largest market share among its main competitors — 92 percent or better — “and improving the model would not add to S.& P.’s revenues.”
...
Mr. Waxman’s committee also cited an internal e-mail exchange between Mr. Raiter, who had been asked to rate a collateralized debt obligation called “Pinstripe,” and Richard Gugliada, an S.& P. managing director. Mr. Raiter had requested highly detailed data about each individual loan, known as loan level tapes, to assess the creditworthiness of the loans in the security, but Mr. Gugliada wrote: “Any request for loan level tapes is totally unreasonable!!! It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.”

Another former credit-rating company employee told the committee that the companies pushing these mortgage-backed securities "typically chose the agency with the lowest standards, engendering a race to the bottom in terms of rating quality.'' Credit ratings are paid for by the companies that are offering the securities — a system that causes a conflict of interest.

Still, others blame the investors for listening to the credit rating companies when they understand the nature of the relationship:

Asked how to fix the problem of potential conflicts among rating agencies, Mr. Egan, of Egan-Jones, said change would come only if institutional investors no longer made investment decisions based on ratings produced by agencies that take money from issuers. “Institutional investors know darn well that ratings are paid for by the issuers,” he said, “so why do they have all their investment guidelines geared to conflicted ratings?”

Credit Rating Agency Heads Grilled by Lawmakers [NYT]
Credit-Rating Companies `Sold Soul,' Employees Said (Correct) [Bloomberg]
(AP Photo/Lawrence Jackson)

Vickie writes:

I have used the Delta PermEnamel Products for several years with marvelous results. This was an isolated incident which I would not expect to recur. This isolated incident has been resolved to my complete satisfaction. Thank you, Delta Creative, Inc.

Vickie Silcox/Artist
A Painted Setting

(Photo: Getty Images)

I have used the Delta PermEnamel Products for several years with marvelous results. This was an isolated incident which I would not expect to recur. This isolated incident has been resolved to my complete satisfaction. Thank you, Delta Creative, Inc.

Vickie Silcox/Artist
A Painted Setting

Congrats, Vickie! We're glad Delta Creative came through in the end.

If you're finding this for the first time, you can still read the original post below:

First of all, this is a story about Delta Creative, not Delta Airlines. Delta Creative makes craft and hobby supplies, including something called PermEnamel glass paint. Vickie, a glass artist who says she's painted "literally thousands of pieces" using PermEnamel, had it fail on her recently. It ruined almost 100 of her pieces and cost her approximately $2,000. She says Delta confirmed the product failed, and approved a reimbursement request—but then "the President of Delta Creative, Bill George, stepped in and said they don't guarantee their products, nor is he in the business of reimbursement," and he denied it.

Here's Vickie's story:

I have lost nearly 100 pieces, at a value of nearly $2,000.00, due to the failure of Delta Permenamel surface conditioner. Their technical department confirmed the failure, the Director of Marketing approved the claim for time and materials, and the President declined reimbursement to me stating that Delta is not in the business of reimbursement! Most importantly, he stated to me that the company does not and will not guarantee the products.

I have painted thousands of pieces, with fantastic results, never one dissatisfied client....you might say I was a Delta disciple, proficient in every way in the application of these products.......but I am no longer that gal. I will never touch this product again.

I lost the ability to sell these 100 pieces and Delta Creative is responsible, and I am now suffering the aftermath. Loss of inventory to sell, loss of revenue to purchase glass, paint, book future shows. Cut off at the knees.

I'm posting this to give other Glass Painters using Delta Permenamel products the opportunity to weigh the risk that they are taking when using this paint. And to seriously evaluate the consequences, if the process fails. You will have no recourse.

I have reported Delta Creative with the Better Business Bureau, and will take further steps if necessary for them to right this wrong.

Finally, when you read that label that says "dishwasher safe", what it should really say is "sometimes dishwasher safe" or perhaps...."dishwasher safe only at the Delta Plant.

You may not be in the business of "guaranteeing" products, Bill George, but you'd think some sort of goodwill reimbursement at the very least would be a smart idea. Regardless of your behavior, however, we agree with Vickie that other glass artists should know that if (when?) PermEnamel fails, it will be their problem, not Delta Creative's.

(Photo: Getty Images)

Here's a head's up - Continental has canceled dozens of flights going into and out of Houston (IAH)...but they haven't told anyone. They canceled my outbound flight to California through Houston (which, fine, understandable), but didn't send me so much as an email or phone call, like most carriers do. It wasn't until I tried to check this morning that I was met with their proposed new flight plan (see attached.) It's sad and hilarious at the same time. Needless to say, I've rebooked since then.

I'd have been in trouble at the airport if I hadn't tried to check in this morning, so just a warning to anyone trying to fly across the country today - the airlines, particularly Continental, are doing their usual awesome job at handling the situation. I'm not so much upset about changing my plans, it's the total lack of communication from Continental and the completely useless "solution" they tried to offer.

(Photo: FlyGuy92586)

Dear J Crew,

Re. my recent order:
1. Invoiced for $9208.50 in shipping charges. Scan of invoice attached.
2. Baby sized shirts shipped. I ordered men's medium sized polo shirts. (Size M as in the invoice). Photo attached.
3. Cannot sign into website, JSP_EXECUTION_FAILED, screenshot attached.

I would like to
1) Return the shirts for a refund - they are completely the wrong size.
2) Not be charged $9,208 for shipping
3) Not have to use the website to do this, as I can't log in

Can you reply to my email at as soon as possible? I am worried about my credit card being charged for the incorrect shipping cost.

Thanks
Per

He also attached this image of the tiny, tiny shirt that he received. How sad.

We're reasonably sure that no self-respecting credit card will allow a shipping charge of over $9k to go through without calling, but if the charge is incorrect, Per can call and do a chargeback.

J Crew Customer [Blogspot]

Chief Executive Dan Hesse, who took over in December, said business is worse than he expected and is deteriorating.

"We need an articulated strategy of how he's going to turn around the business," said Michael Nelson, an analyst at Stanford Group Co. in New York. "I don't expect it to be a pretty picture."

Hesse knows he is facing a tough road.

"We will have a difficult 2008 as we turn this ship around," Hesse said on a conference call with analysts. "This turnaround will not happen for many quarters."

Sprint records $29.5 billion net loss [Chicago Tribune]
(Photo:diaper)

She forwarded her complaint letter to us:

Hello Mr. Reddick,

I'm writing to you today in the hopes that you can help me. I am very frustrated with the service I have received from Verizon. I'd like to document my concerns and request an immediate resolution.

Regarding account [redacted], here is the timeline of my experiences with Verizon. Forgive the length, but hopefully it will show you just how frustrated I am as a customer.

November 9, 2007 - I began my first day with Verizon DSL.
November 13, 2007 - FOUR calls - No DSL.
November 14, 2007 - FIVE calls - No DSL.
December 6, 2007 - No DSL.
December 22, 2007 - No DSL.
December 23, 2007 - No DSL.
December 26, 2007 - TWO calls - No DSL.
December 28, 2007 - No DSL.
January 1, 2008 - No DSL.
January 2, 2008 - No DSL.
January 8, 2008 - No DSL.
January 22, 2008 - TWO calls - No DSL.
Febraury 8, 2008 - No DSL.

From my understanding, there is a certain length at which the DSL line to my house may become problematic. I was told that my house is 17,000 feet from the central office, with a limit of 18,000 feet. I was re-assured time and again that I would have zero problems with connectivity. As you can see from the list above, this is not the case.

Each time I call tech support, I run the same race. Unplug router, turn off modem, wait 20 seconds, turn it all back on, watch the DSL light that doesn't stop blinking. Then, the tech will say "let me run a line test, give me just a moment" (I could recite this in my sleep; I've heard it so many times). Miraculously, as soon as they run a line test, the light will stop blinking and I'll have connectivity. They will tell me that there is no problem. I re-iterate that there is a problem and that as soon as we hang up the phone and their 'line test' disconnects, I'm back to square one. They never believe me, and I have even been told that since they don't see a problem, they can't open a ticket for more in-depth trouble-shooting.

In mid-November, I finally got someone on the phone who was willing to help me. She ran all sorts of tests and finally determined that a tech needed to be dispatched. She opened a ticket for me. I took time out of my work-day to wait for the tech. He came the next day and reported that the modem was faulty. He promised that I would get a return package to send the faulty one back, and a replacement would be sent so that I could (finally) get a steady signal. Unfortunately, even though I mention the faulty modem in every single tech support call, I still have yet to receive the replacement.

After 21 calls to tech support in less than three months, this has become more than a nuisance. Since we work from home, this has seriously affected work productivity. Online training sessions, net meetings, VoiP client chat sessions and more: the egg is on our face, on our company's face.

Because of the easily documented losses like lost work time and cell phone bills reflecting hours of tech support time to the less easily documented like aggravation, loss of productivity and stress, I would like to request that Verizon do the following to immediately resolve this situation and keep me as a customer:

1) I would like to return the faulty modem and receive a full refund (please send me the return box, as was promised by the tech). Do not send me another modem. I will purchase one myself.
2) I would like to receive a refund for the DSL down-time that I have experienced.

If you have any questions or would like to contact me directly, you may reach me at [redacted]

Thank you,

Roberta

Just went down to my local Wal-Mart the other day (La Quinta, Ca) and saw a Red Ring Of Death xbox 360 on display... thought it was worth a picture.

The poor human who caused this error writes:

Adobe pushed out an upgrade of its Creative Suite. I installed it, as prompted. This is what happens when I try to run any element of the Suite after the install.

Click on the modal dialog box and the program closes. For extra redundancy, there's a second error message that reads "licensing for this product has stopped working." But I am impressed that I wasn't merely able to get the programs to fail, but that I got them to fail "catastrophically."

Adobe Creative Suite fails "catastrophically" thanks to DRM [BoingBoing]

If you purchased videos from this service, you'll probably want to read this FAQ for more information.
It appears that your videos will remain playable with Windows Media Player.

Farewell, Walmart Video Download store. Oh Johnny I hardly knew ye.

Walmart Video Downloads

PREVIOUSLY: Walmart's Video Download Service Predictably Sucks

Thought you guys would like this screenshot of a page I've been receiving from Macys.com for about the last half hour. Makes it pretty hard to see what their final One Day Sale before the holidays has to offer. Keep up the good work Consumerist!

Mike

Martin says he has data that proves the cable industry has reached 70/70. The cable industry says Martin's data is wrong.

It's too bad for Martin that the lobbyists got to the commissioners before it was time to vote.

From the New York Times:

Mr. Martin had thought earlier this month that he had the support of two of the agency's Democrats for his original proposals, which would have given him a majority of the five-member agency. The commission's two Republicans had in varying degrees publicly questioned some of the proposals.

But after the recent lobbying barrage, Mr. Adelstein, who is up for renomination soon, began to express reservations about the proposals.

Republicans in the House and Senate sent letters to Mr. Martin echoing the industry's concerns, as did senior cable television and network executives.

Under the compromise, cable companies will have two months to submit the numbers of customers and size of their markets, which the agency could use next year to determine whether the industry had reached the threshold for more regulation.

Cable Industry Wins Compromise on F.C.C. Plans [NYT](Thanks, Gil!)

The Washington Post has a fantastic article about Ford's belly flop:

Fifty years ago today, Don Mazzella skipped out of school to see the hot new car that everybody was talking about, the hot new car that almost nobody had actually seen.

Ford Motor Co. had proclaimed it "E-Day," and Mazzella and two buddies sneaked out of East Side High School in Newark, N.J., and hiked 13 blocks to Foley Ford so they could cast their gaze upon the much-ballyhooed new car that had been kept secret from the American public until its release that day.

It was called the Edsel.

"The line was around the block," recalls Mazzella, now 66 and an executive in a New Jersey consulting firm. "People were coming from all over to see this car. You couldn't see it from the street. The only way you could see it was to walk into the showroom and look behind a curtain."

Mazzella and his truant friends waited their turn, thrilled to be there. "Back then for teenagers, cars were the be-all and end-all," he explains. They'd read countless articles about the Edsel and seen countless ads that touted it as the car of the future. But they hadn't seen the car. Ford kept it secret, building excitement by coyly withholding it from sight, like a strip-tease dancer.

Finally, Mazzella and his friends reached the showroom. Finally, they were permitted to peek behind the curtain. They saw a cream-colored car with a strange oval grille that looked like a big chrome O.

"We looked at it and said, ' What?' " Mazzella recalls. "It was just a blah car. I remember my friend Joe Grandi, who later became a Newark cop — he had a gruff voice, and he said, ' This is what we waited all this time for?' We all felt betrayed."

The Flop Heard Round the World [Washington Post via boingboing]
(Photo:Edsel.com)

The latest chance at a merger ended yesterday, when US Airways withdrew its $10.2 billion offer for Delta Air Lines, after it failed to win the support of Delta's creditors, which included the Boeing Company and the federal pension agency.

US Airways Withdraws Its $10.2 Billion Offer for Delta [NYT]