Latin America most vulnerable to higher U.S. rates-IMF

WASHINGTON, Sept 30 | Mon Sep 30, 2013 8:59am EDT

WASHINGTON, Sept 30 (Reuters) - Latin America is likely to suffer most if U.S. interest rates rise more quickly than economic conditions merit, the International Monetary Fund said on Monday.

But higher rates could also hit output in Europe and Asia, as any shock in the United States, the world's biggest economy and a large financial hub, usually reverberates around the world, the IMF said in a report.

The IMF said it was concerned rates may rise before the U.S. economy has fully recovered, which would most hurt countries that peg their exchange rates to the dollar.

But the global impact of a slower pace of bond-buying by the U.S. Federal Reserve is harder to gauge, the IMF said in the analytical chapters of its World Economic Outlook. The full report is due out Oct. 8.

The Fed earlier this month surprised markets when it postponed reducing its $85 billion a month worth of bond purchases, saying it needed to wait for more evidence of solid economic growth. Expectations that the U.S. central bank would start pulling back on its bond buying had prompted capital outflows from many emerging markets, as investors anticipated higher yields in advanced economies.

"A stronger-than-expected slowdown of growth in China is a major concern at present," the IMF added, though that would most likely hurt China's close trading partners in Asia and Latin America and would be less harmful to the world as a whole.

The IMF was tasked with assessing how problems in one country spread to another in the wake of the 2007-2009 global financial crisis, which showed how quickly and easily policies cascaded across borders and destabilized the global economy.

In its report, the Fund said the recent financial crisis was one of those rare periods when all the world's economies moved in lock-step, as the collapse of the U.S. investment bank Lehman Brothers spread widespread panic and uncertainty.

That period has ended but could return, as policymakers have still not finished addressing the problem of institutions that are "too big to fail," the Fund warned.

"A large financial shock could again induce the world's economies to rise and fall in tandem," the IMF said. "There are still many systemically important financial institutions whose reach spans the globe."

The IMF also said most emerging markets in Latin America and other regions were hit by volatile capital flows in the midst of the crisis, but some were better at dealing with the problem than others.

Economies like Malaysia and Mexico, with flexible exchange rates, lower inflation and better fiscal policy and economic institutions were able to counter the destabilizing flows, usually through private financial adjustment.

But less resilient countries like Indonesia, Pakistan and Turkey still suffered from the "boom and bust" cycle of sudden inflows and outflows that had bedeviled emerging markets in the past, the IMF said.

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Bank of America fraud trial spotlights whistleblower awards

By Nate Raymond

NEW YORK, Sept 27 | Fri Sep 27, 2013 5:16pm EDT

NEW YORK, Sept 27 (Reuters) - The former executive who blew the whistle on questionable mortgage lending at Countrywide Financial Inc could reap up to $1.6 million under a law dating from the 1980s savings-and-loan crisis.

Edward O'Donnell filed a whistleblower lawsuit last year, the basis for a U.S. Justice Department case against Countrywide's parent, Bank of America Corp, that went to trial this week.

The Justice Department accuses Countrywide of fraudulently selling thousands mortgages it knew were bad to Fannie Mae and Freddie Mac, which suffered losses when the loans defaulted.

The lawsuits say a Countrywide program called the "High Speed Swim Lane," also called "HSSL" or "Hustle," starting in 2007 eliminated quality checkpoints and compensated employees based on loan volume.

O'Donnell filed his lawsuit under the False Claims Act, which allows whistleblowers to bring cases on behalf of the government against companies that defraud the United States.

Before the trial, the judge dismissed the government's claims under the False Claims Act, which eliminated O'Donnell's ability to recoup 15 percent to 30 percent of the up to $848.2 million in penalties the Justice Department has said it would ask for.

But in court on Tuesday, a lawyer from the U.S. Attorney's Office confirmed that O'Donnell also filed a whistleblower claim directly with the Justice Department under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

FIRREA is a savings-and-loan-era law that has become a key tool in efforts to pursue institutions over the financial crisis. Among other provisions, the 1989 law has a 10-year statute of limitations, longer than the limit of other laws used in financial fraud cases.

Less publicized is the ability of whistleblowers to bring claims asserting violations of FIRREA. Under a process set up in a separate law in 1990, the Justice Department has a year to investigate claims under FIRREA submitted by whistleblowers.

O'Donnell filed a FIRREA declaration in February 2012, the same day as he filed his lawsuit in federal court in New York. The Justice Department intervened in the case in October 2012.

In testimony Friday, O'Donnell said he filed the lawsuit because he did not believe anyone in the government was aware of Countrywide's "Hustle" program.

"Because they were not aware of it, no one was being held accountable," O'Donnell said.

'GET RICH QUICK'

But in opening statements Tuesday, a lawyer for Bank of America sought to cast O'Donnell in different light, saying he entered, "into a little bit of a get-rich-quick scheme."

"He had read about the fact maybe as a whistleblower he might collect some money by going back five or six years and saying that, you know what, this is a fraud," said Brendan Sullivan of the law firm Williams & Connolly.

With FIRREA complaints, whistleblowers such as O'Donnell are entitled to a range of awards. But they are capped at $1.6 million, much less than the multimillion-dollar prizes whistleblowers in False Claims Act cases have earned.

O'Donnell's potential recovery, for example, pales in comparison to the $31 million earned by Sherry Hunt, a former employee who filed a complaint against Citigroup Inc under the False Claims Act. The Justice Department intervened in her case and obtained a $158.3 million settlement in February 2012.

Plaintiffs lawyers say they have been giving more attention lately to whistleblower awards under FIRREA. But the small size of the potential award for FIRREA complaints makes it less attractive for potential whistleblowers to step forward and risk their careers and reputations on a case, some lawyers say.

"If it was a 15 to 30 percent bounty provision for whistleblowers bringing claims under FIRREA, you'd see more," said Shayne Stevenson, a lawyer at Hagens Berman Sobol Shapiro, who has brought other False Claims Act cases against Bank of America.

O'Donnell's strategy of filing both a False Claims Act case and a FIRREA declaration might be becoming more common. Mark Labaton, a lawyer at Motley Rice, said he was considering doing the same for at least one purported whistleblower soon.

"Often it makes sense to do both because often you do not know which is the more practical statute to use to get damages," Labaton said.

A spokeswoman for the Justice Department could not immediately provide statistics on how many FIRREA whistleblower claims it had received. A lawyer for O'Donnell did not respond to request for comment.

The case is U.S. ex rel. O'Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 12-01422.

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Mild cognitive impairment in L. America, China and India

One of the first studies to investigate the prevalence of mild cognitive impairment (MCI) in low and middle income countries finds that MCI does not depend on socio-demographic factors, and is associated with disability and neuropsychiatric symptoms. 

The research was led by the 10/66 Dementia Research Group based at the Institute of Psychiatry at King’s College London and published today in PLoS Medicine. 

MCI is an intermediate state between normal signs of cognitive aging, such as becoming increasingly forgetful, and dementia, and may be linked to an increased risk of dementia, 

The research group interviewed roughly 15,000 people aged over 65 years who did not have dementia in eight low and middle incomes countries—Cuba, Dominican Republic, Peru, Mexico, Venezuela, Puerto Rico, China, and India. 

Their mental and physical health, cognitive function were also assessed and their relatives and carers interviewed for further details about any memory loss, any other decline in cognitive function or the presence of any neuropsychiatric symptoms. 

The prevalence of MCI ranged quite widely, from 0.8% in China to 4.3% in India. They found that age or level of former education did not seem to be linked to MCI and that men had a slightly higher prevalence of MCI than women. The authors found that MCI was associated with disability, anxiety, apathy and irritability but not with depression. 

Dr Robert Stewart, senior author of the paper at the IoP at King’s says: ‘By 2050, it’s estimated that more than 115 million people will have dementia, and much of the expected increase will occur in low and middle income countries where the population is rapidly ageing.

‘I hope that the information on MCI in low and middle income countries we report in this study could help inform health care and social service planning in these rapidly ageing and highly populated regions of the world.’

The authors added that more long-term studies are needed to investigate whether MCI can be used as a reliable marker for further cognitive decline and dementia, and into the associations with disability and neuropsychiatric symptoms. 

Dr Stewart adds: ‘It is also worth considering whether cultural influences may impact upon the identification of MCI – it may be that people in certain countries may be more or less likely to admit to memory difficulties. Whilst this may help in part explain the variation between countries, the association between MCI and disability remained constant throughout.’

The 10/66 Dementia Research Group is supported by the Wellcome Trust (UK), the World Health Organization, the US Alzheimer’s Association and the Fondo Nacional de Ciencia Y Tecnologia, Consejo de Desarrollo Cientifico Y Humanistico, Universidad Central de Venezuela (Venezuela). The lead author is funded by the National Institute for Health Research (NIHR) Specialist Biomedical Research Centre for Mental Health at the South London and Maudsley NHS Foundation Trust and Institute of Psychiatry, King’s College London. 

For full paper: Sosa, A.L. et al. ‘Prevalence, Distribution, and Impact of Mild Cognitive Impairment in Latin America, China, and India: A 10/66 Population-Based Study’ (7th February 2012) PLoS Medicine doi: 9(2): e1001170. doi:10.1371/journal.pmed.1001170

For more information, please contact Seil Collins (Press Officer) email: seil.collins@kcl.ac.uk or tel: 0207 848 5377

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Discover Scholarships That Celebrate America

Students interested in studying political science, American history or government should target specialized scholarship programs.

As a kid, I spent the Fourth of July taking part in the holiday festivities of my mom's small Minnesota hometown. I'd watch the local parade, spend the afternoon filling up on hamburgers, hot dogs and watermelon and finish out the day by watching what I'd thought was the most amazing fireworks display.

As an adult, Independence Day transcends my childhood traditions of parades, barbecues and fireworks. If it does for you, too, you should look closely at scholarship opportunities focused on American studies.

[Follow these four steps to boost your summer scholarship search.]

If you want to share your thoughts about what makes America's future bright, consider the Veterans of Foreign Wars' Voice of Democracy audio essay competition. The national first-place winner of this scholarship receives $30,000 to apply towards a college education. The second-place winner receives a $16,000 award.

Last year, this program awarded 54 students a total of $152,000 in scholarships, with awards starting at $1,000. This year's theme is "Why I'm Optimistic About Our Nation's Future." Applicants must submit both a typed essay and a CD recording of themselves reading the essay along with an entry form to their local VFW post by Nov. 1.

The Daughters of the American Revolution hosts a number of scholarship awards for students interested in studying political science, history and government. Graduating high school students planning to pursue an undergraduate degree with a concentration in American history or American government are eligible for the Dr. Aura-Lee A. and James Hobbs Pittenger American History Scholarship. The scholarship includes a $2,000 annual award, which is renewable for up to four years, subject to an annual review of the recipient's transcript.

[Find ways to make your scholarship essay stand out.]

College juniors and seniors majoring in political science, history or government can apply for the $1,000, one-time Enid Hall Griswold Memorial Scholarship. Graduate students in the field of historic preservation can apply for a $2,000 DAR Centennial Scholarship.

The Joe Foss Institute organizes essay and video scholarship contests centered on patriotic themes. The topics change annually and in the past have included, "Is my country proud of me?" and "My right to vote." Past scholarship awards have ranged from $1,000 to $5,000.

The scholarship deadlines vary, so check their website or follow them on social media for information updates.

[Leverage social media to discover new scholarships.]

The Institute is also offering a special scholarship program for Oklahoma students who were impacted by the May 2013 tornadoes and who intend to study at Oklahoma State University. Entrants must submit essays on the theme "Rebuilding Together – How I am working to help my community." At stake are two $5,000 awards. The deadline for this scholarship application is July 21.

Students considering a graduate degree in public policy, public administration or international affairs should look at the Public Policy and International Affairs Program's Fellowship Program.

This national program helps students achieve a master's degree or joint degree through intensive study in a PPIA Junior Summer Institute, partnerships with universities across the country – which waive application fees and offer admitted students a minimum one-time financial award of $5,000 – and an alumni network that provides connections with nearly 4,000 individuals in related fields. According to the website, the application for the 2014 cohort will be available in late 2013.

Janine Fugate, the recipient of numerous scholarships at both the undergraduate and graduate levels, holds a bachelor's degree from the College of Saint Benedict, Saint Joseph, Minn., and a Master of Public Affairs from the Hubert H. Humphrey School of Public Affairs at the University of Minnesota—Twin Cities. Fugate joined Scholarship America in 2002.

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