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Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to “strategically default” — abruptly and intentionally pull the plug and abandon the mortgage — compared with lower-scoring borrowers.

National credit bureau Experian teamed with consulting company Oliver Wyman to identify the characteristics and debt management behavior of the growing numbers of homeowners who bail out of their mortgages with none of the expected warning signs, such as nonpayments on other debts.

With foreclosures, delinquencies and loan losses at record levels, strategic defaults and walkaways are among the hottest subjects in residential real estate finance. Unlike in earlier academic studies, Experian and Wyman could tap into credit files over extended periods to identify patterns associated with strategic defaults.

Among researchers’ findings are these eye-openers:

* The number of strategic defaults is far beyond most industry estimates — 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year’s fourth quarter.

* Strategic defaulters often go straight from perfect payment histories to no mortgage payments at all. This is in stark contrast with most financially distressed borrowers, who try to keep paying on their mortgage even after they’ve fallen behind on other accounts.

* Strategic defaults are heavily concentrated in negative-equity markets where home values zoomed during the boom and have cratered since 2006. In California last year, the number of strategic defaults was 68 times higher than it was in 2005. In Florida it was 46 times higher. In most other parts of the country, defaults were about nine times higher in 2008 than in 2005.

* Two-thirds of strategic defaulters have only one mortgage — the one they’re walking away from on their primary homes. Individuals who have mortgages on multiple houses also have a higher likelihood of strategic default, but researchers believe that many of these walkaways are from investment properties or second homes.

* Homeowners with large mortgage balances generally are more likely to pull the plug than those with lower balances. Similarly, people with credit ratings in the two highest categories measured by VantageScore — a joint scoring venture created by Experian and the two other national credit bureaus, Equifax and TransUnion — are far more likely to default strategically than people in lower score categories.

But Schwartz says this requirement will be dropped, mainly because there aren’t enough fighter pilots to fill the growing demand for UAV crews. “There’s no need for them to be pilots,” one senior Pentagon official says. “It’s sort of like a union regulation.”

This year, the Air Force will train more joystick pilots than new fighter and bomber pilots. “If you want to be in the center of the action, this is the place to be,” Schwartz says. “It’s not a temporary phenomenon…It’s a sustainable career path. I’ve made that very clear.” Lt. Col. Travis Burdine, a Predator pilot-from-afar, has gotten the message: “We all joined the Air Force to go flying, but word on the street is that job satisfaction is very high [manning a joystick]. Every day we’re doing this, we’re in the thick of the fight. We fly 36 [combat air patrols] a day. Where they’re happening, the hottest 36 things are going on.”

Zeitoun weathered the storm’s harrowing landfall, and ended up in a tent on his house’s roof. He dug a secondhand canoe out of the garage and began paddling around, seeing how he could help. He spent the first days aiding neighbors and strangers, saving the life of at least one person trapped in her house, and even feeding stranded dogs.

Then the standing feet of water became toxic with organic material and spilled pollutants, his meetings with people became more fraught and weird, he saw his first body and his first criminal entrepreneurs, and decided it was time to go. And that’s when the unnatural disaster happened.

On Tuesday, Sept. 6, 2005, armed and badged black-uniformed men and a tall woman in a power boat appeared at the door of one of his properties that he, his tenant, and two others were using as a meeting place because it still had a working phone. Zeitoun was in the middle of a call with his brother Ahmad, a ship captain, calling from Spain to repeat his pleas to Zeitoun to leave town.

With no questions asked and no questions allowed, Zeitoun and the others were handcuffed and shackled at automatic weapon-point, dropped into the boat, and taken away; the officers didn’t secure the house or treat it as a crime scene and left it unlocked, which meant it was eventually completely stripped and looted.

Zeitoun documents a little-known fact: the existence of “Camp Greyhound,” an outdoor jail built in New Orleans’ central bus station within hours of the hurricane’s landfall at the behest of the federal Department of Homeland Security and FEMA. Similar to Guantanamo Bay, Camp Greyhound (the guards’ name for it) was a kennel, runs of wire fencing and concrete flooring; there was nothing to sit or sleep on, and toilet facilities were portables outside the enclosures. Power was provided by a running diesel locomotive parked within yards of the cages, providing a continuous deafening hum and diesel pall.

Zeitoun was not formally charged, was not read Miranda rights, was not allowed a phone call. He was physically and verbally abused, pepper sprayed, strip-and body-cavity searched; and was accused of being a “terrorist” during his processing at the “camp.” The details of his captivity only become increasingly outrageous.

Fellow prisoners he was able to talk to included a New Orleans firefighter ordered to stay in the city to work who was arrested in his own yard, and a Houston sanitation worker whose company contracted to help in the cleanup effort — arrested wearing his work uniform, possessing ID, and with the keys to his garbage truck in his hand.

Prisoners included Marlene Maten, 73-year-old diabetic deaconess at Resurrection Mission Baptist Church, arrested as she carried a package of sausages from a cooler in her car, parked beside the hotel to which she was returning.

Marlene, along with Zeitoun and hundreds of others from Camp Greyhound, ended up at maximum security Elayn Hunt Correctional Center, in St. Gabriel, La., 70 miles from New Orleans. They were FEMA prisoners: FEMA rented state prison space and Camp Greyhound transfers were, according to prison staff, “FEMA’s problem.” Again: transferred with no charges, no information, no opportunity to make a phone call or talk to a lawyer.

Thanks to a volunteer prison missionary who agreed to call Kathy, she found out Zeitoun was alive. (His family had assumed him dead once contact was broken for weeks.) She immediately hired a lawyer, who found out there would finally be a hearing on Zeitoun’s “case.” However, when Kathy contacted the Hunt center to find out where the hearing would be held, she was told that location, and whether Zeitoun was even at the prison, was “private information.”

Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for “an uncontrolled issue of dollars” and said the American currency’s dominance had been “one of the triggers” of the global crisis.

Putin renewed Russia’s call on the U.S. administration and global community to give the green light to alternative reserve currencies: “If there are several reserve currencies, this will not harm the U.S. economy in any way.”

President Dmitry Medvedev’s economic advisor, Arkady Dvorkovich, said Thursday that Russia would at next week’s G20 summit in Pittsburgh press for more follow-through on measures to confront the global downturn and to change Western-dominated international financial institutions.

“It is the biggest taxer of them all. Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and middle class.”

Paul makes the case that the Fed is the main culprit responsible for the current economic mess the country faces through the destructive policies of cheap credit and excessive money printing.

“Prosperity can never be achieved by cheap credit,” says Paul. “If that were so, no one would have to work for a living. Inflated prices only deceive one into believing that real wealth has been created.”

The Federal Reserve, created in 1913, has been acting as the main central bank of the United States for nearly one hundred years. Many Americans are either not sure or not interested in what role the Fed plays in managing the economy. “The economic crisis has changed everything,” writes Congressman Paul.

Paul is currently pushing for passage of a bill, H.R. 1207, that would allow for an unprecedented audit of the Federal Reserve. The bill has 289 co-sponsors, and is gaining solid momentum in the House of Representatives.

“The worse the economy gets, the more power Congress is willing to grant to the Federal Reserve. Trillions of dollars created and distributed by the Fed with no requirement to submit to any oversight” argues Congressman Paul.

“End the Fed” is a sharp counter to Keynesian economic theory, and takes aim at the hazards of a managed economy.

The Secret Service is analyzing whether the bonds taken in August may be counterfeit, said a spokeswoman for the U.S. embassy in Rome. Italy’s financial police in Varese, north of Milan, arrested two individuals carrying the securities in a briefcase, according to a person involved in the case.

The two men currently are in custody as prosecutors in the town of Busto Arsizio carry out their investigation, the person said. The seized notes include securities with face values of $500 million and $1 billion, Italian daily MF reported today, without saying where it got the information.

“There must be a well-organized group behind these alleged crimes,” Fabio Polimeni, a Milan lawyer specializing in counterfeiting cases, said.

Italian authorities seized U.S. treasuries on June 4 with a face value of more than $134 billion from two Japanese travelers attempting to cross into Switzerland. The two men later disappeared and the case is still under investigation. The U.S. government bonds found in the false bottom of a suitcase carried by the men were fake, a U.S. Treasury spokesman said June 18.

“As financial markets become more sophisticated, creative and bigger, we can expect criminal activity to go with it and it’s happening everywhere,” Livia Oglio, a Milan lawyer, said. “The amount seized is phenomenal.”

The officials said investigators had recently turned up information suggesting that Ms. Norton had had discussions while in office with Royal Dutch Shell about future career opportunities. In early 2006, Ms. Norton’s department awarded three tracts in Colorado to a Shell subsidiary for shale exploration. In December 2006, she joined Shell as the company’s general counsel in the United States for unconventional oils, a company spokeswoman said.

…

Ms. Norton, 55, was President George W. Bush’s first interior secretary. In that job, she was an ally of Vice President Dick Cheney in the administration’s general approach of opening up more federal lands for energy exploration.

The river’s flow ranges from murky white to a bright shade of orange and the waters are so viscous that they barely ripple in the breeze. In Shangba, the river brings death, not sustenance.

“All the fish died, even chickens and ducks that drank from the river died. If you put your leg in the water, you’ll get rashes and a terrible itch,” said He Shuncai, a 34-year-old rice farmer who has lived in Shangba all his life.

“Last year alone, six people in our village died from cancer and they were in their 30s and 40s.”

Cancer casts a shadow over the villages in this region of China in southern Guangdong province, nestled among farmland contaminated by heavy metals used to make batteries, computer parts and other electronics devices.

Every year, an estimated 460,000 people die prematurely in China due to exposure to air and water pollution, according to a 2007 World Bank study.

Yun Yaoshun’s two granddaughters died at the ages of 12 and 18, succumbing to kidney and stomach cancer even though these types of cancers rarely affect children. The World Health Organization has suggested that the high rate of such digestive cancers are due to the ingestion of polluted water.

“It’s because of Daboshan and the dirty water,” said the 82-year-old grandmother. “The girls were always playing in the river, even our well water is contaminated,” Yun told Reuters during a visit to the village.

The river where the children played stretches from the bottom of the Daboshan mine, owned by state-owned Guangdong Dabaoshan Mining Co Ltd, past the ramshackle family home. Its waters are contaminated by cadmium, lead, indium and zinc and other metals.

The villagers use well water in Shangba for drinking but tests published by BioMed Central in July show that it contains excessive amounts of cadmium, a heavy metal that is a known carcinogen, as well as zinc which in large quantities can damage the liver and lead to cancer.

“China has many ‘cancer villages’ and it is very likely that these increased cases of cancer are due to water pollution,” said Edward Chan, an official with Greenpeace in southern China.

But it’s not just water, the carcinogenic heavy metals are also entering the food chain.

Mounds of tailings from mineral mining are discarded alongside paddy fields throughout the region.

Gianpaolo Tarantini, an entrepreneur who reportedly told prosecutors in the southern city of Bari he supplied 30 escorts for parties hosted by Berlusconi, was detained in Bari airport as he was about to take a flight to Rome.

Tarantini was being held in the local barracks of Italy’s financial police while a judge decides whether to uphold the prosecutor’s arrest warrant, sources said.

He was detained on charges related to cocaine dealing, sources said, after the prosecutor cited risks that he might tamper with evidence or attempt to flee the country.

His lawyer, Nicola Quaranta, declined to comment.

Tarantini was thrust into the spotlight after call-girl Patrizia D’Addario testified he had paid her to spend the night with Berlusconi following a party at the conservative prime minister’s Rome residence in November.

D’Addario has said she made recordings of the visit and Italian papers have posted audio and transcripts of alleged conversations between her and the prime minister.

Berlusconi has not denied sleeping with her but insists he has never paid for sex and prosecutors have said has committed no crime in the case. Tarantini is also accused of supplying escorts to local left-wing politicians.

The Federal Deposit Insurance Corp. was appointed receiver of Louisville, Ky.-based Irwin Union Bank FSB and Columbus, Ind.-based Irwin Union Bank and Trust Co.

As of Aug. 31, Irwin Bank FSB had $493 million in assets and $441 million in deposits, while Irwin Union Bank and Trust had $2.7 billion in assets and $2.1 billion in deposits.

The FDIC said Friday both bank’s deposits will be assumed by First Financial Bank in Hamilton, Ohio.

First Financial also agreed to purchase essentially all of the two banks’ assets. The FDIC and First Financial Bank reached a loss-share agreement covering about $2.5 billion of the two banks’ combined assets.

The 27 combined branches of Irwin Union Bank FSB and Irwin Union Bank and Trust will be reopened during their normal business hours beginning Saturday as branches of First Financial Bank.

The FDIC estimates the failure of the two banks will cost its insurance fund about $850 million.