Current Events in September 2013

After crashing and burning in July, sales of new single-family houses bounced back in August with an increase of 7.9% to a seasonally adjusted annual rate of 421,000.

As they released their latest figures, the U.S. Census Bureau and the Department of Housing and Urban Development had even more bad news about the preceding month. The previously reported rate of 394,000, which represented a plunge of 13.4% from June, was revised downward to 390,000.

While the August figure topped the Briefing.com estimate of 415,000, sales were at their second lowest level since December 2012.

The median sales price of new houses sold in August was $254,600, a gain of just 0.6% -- the smallest since June 2012, while the average sales price was $318,900.

The estimate of new houses for sale at the end of the month was 175,000, representing a supply of 5.0 months at the current sales rate.

Mortgage applications

Separately, the Mortgage Bankers Association (MBA) reports mortgage applications rose 5.5% during the week ending September 20. The Refinance Index was up 5%, holding the refinance share of mortgage activity steady at 61 percent of total applications.

The adjustable-rate mortgage (ARM) share of activity was unchanged at 7% of total applications, while the Home Affordable Refinance Program (HARP) share of refinance applications increased to 41 %, and is the highest since MBA started tracking this measure in early 2012.

The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) decreased to 4.62% from 4.75%,with points increasing to 0.41 from 0.39 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) decreased to 4.66% from 4.83%,with points decreasing to 0.29 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year FRMs backed by the FHA decreased to 4.32% from 4.50%,with points decreasing to 0.37 from 0.41 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year FRMs decreased to 3.68% from 3.81%, with points decreasing to 0.28 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.39% from 3.54%,with points decreasing to 0.35 from 0.43 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

Did the FDA and MacNeil Consumer Healthcare, manufacturer of Tylenol, deliberately suppress information showing how the main ingredient acetaminophen is far more lethal, and in far lower doses, than most Americans previously thought?

That's the charge leveled in a series of investigative stories by the non-profit investigative news site ProPublica, which notes that the U.S. Food and Drug Administration (FDA) enjoys strong legal authority in this country: basically, the power to decide whether Americans may legally buy, sell or consume various foods and medicines. But in exchange for this power, the FDA is supposed to monitor the safety and efficacy of the drugs it regulates, and release rather than suppress information relating to those topics.

This did not happen, according to ProPublica reporters Jeff Girth and T. Christian Miller, whose stories charge that, “During the last decade, more than 1,500 Americans died after accidentally taking too much of a drug renowned for its safety: acetaminophen, one of the nation’s most popular pain relievers.

“Acetaminophen – the active ingredient in Tylenol – is considered safe when taken at recommended doses. Tens of millions of people use it weekly with no ill effect. But in larger amounts, especially in combination with alcohol, the drug can damage or even destroy the liver,” ProPublica noted.

Studies ignored

Granted, 1,500 deaths in a decade is a statistically tiny number, compared to the tens of millions who use acetaminophen with no ill effects every year. But those numbers could have been—should have been—smaller still. ProPublica reports that since 1977, the FDA and MacNeil ignored studies showing that acetaminophen has a much narrower margin of safety than most over-the-counter painkillers—in other words, the difference between a safe dose from a harmful one is much smaller than in most medications.

Even more damning are claims that, “For at least 15 years, until 2011, McNeil continued selling two versions of Tylenol for young children, despite knowing that parents and even medical professionals mixed them up, sometimes with serious consequences. And the Food and Drug Administration failed to intervene.”

Turns out it’s far too easy to overdose on acetaminophen without realizing it. In 2003, five-month-old Brianna Hutto went into a coma after an accidental overdose destroyed her liver. Her parents had given her the prescribed dose of Tylenol: one teaspoon every four hours.

But until 2011, MacNeil sold two different forms of pediatric Tylenol: Infants’ Tylenol and Childrens’ Tylenol. And, paradoxically, the active dose in the Infants’ version was stronger than that in the Childrens’. As ProPublica pointed out, “By confusing the pediatric products and administering too much of the infants’ version, parents could inadvertently overdose their children. Other manufacturers also made two children’s products with different concentrations of acetaminophen.”

Easy to OD

Confusing “Infant” and “Children” medications isn’t the only way Americans stumble into accidental acetaminophen overdoses. A poll conducted by ProPublica showed that, for example, 35 percent of Americans did not know it’s possible to overdose on acetaminophen by combining the maximum recommended dose of Extra-Strength Tylenol with a dose of NyQuil.

Over 600 medications – both over-the-counter and prescription-only—contain acetaminophen.

ProPublica developed an app showing consumers which medications contain acetaminophen, and in what amounts, but warns app users that “a single dose might be more than the amount shown. For example, one pill might contain 325 mg but the recommended dose might be two pills, or 650 mg.”

The commercial for the sleek BMW isn't promoting the car's pick up and race car handling. Rather, the highlight of the spot is the car's warning system that alerts the driver that there's a cow standing in the roadway.

In the 1960s U.S. cars didn't even have seat belts, unless you ordered them as an option. Over the years, auto safety has become a top consumer priority and a major selling point for manufacturers.

Volvo built its reputation on safety, pioneering many safety improvements now taken for granted. Mercedes Benz recently escalated the marketing of its safety features, highlighting its accident avoidance system in a number of television commercials.

Consumers – especially ones with young families -- now want and expect safe cars and manufacturers in nearly every price range are now designing their vehicles with safety in mind. The safety features address two areas; ways to help you avoid getting into an accident and giving you added protection if an accident occurs.

High-tech improvements

To avoid accidents carmakers over the years have added improved stability control and braking – in addition to the high-tech collision avoidance systems available on the Mercedes and other high-priced vehicles. Common now, on even many entry-level cars – are multiple airbags, improved chassis designs and crumple zones that can keep the occupants safer in a crash.

Cars with six airbags, including ones on the side called “curtain airbags,” have become the norm, especially on vehicles earning spots on the official and unofficial safe car lists.

The National Highway Traffic Safety Administration (NHTSA) maintains the official auto safety list, awarding 5-Star Safety Ratings to the safest vehicles, broken down by vehicle type and class. Starting with 2011 models, NHTSA introduced tougher tests and a new 5-Star Safety Ratings that provide more information about vehicle safety and crash avoidance technologies. Because of the more stringent tests, 2011 and newer vehicles are held to a higher standard than those that came before.

To shop for a safe car or truck, consumers can start here, comparing the safety ratings on the vehicles they are considering. 

Safety ratings

The Insurance Institute for Highway Safety (IIHS) is one of the major non-government testing agencies that rates automobiles for their safety. To determine crashworthiness — how well a vehicle protects its occupants in a crash — IIHS rates vehicles good, acceptable, marginal or poor based on performance in five tests: moderate overlap front, small overlap front, side, roof strength and head restraints.

In its latest ranking, the 2014 Honda Odyessy – a minivan – earned the Institute's top safety rating for good performance in all five IIHS crash evaluations, including the challenging small overlap front test, which is getting more attention from safety engineers. The Institute rates vehicles good, acceptable, marginal or poor based on performance in the moderate overlap front, small overlap front, side, rollover and rear crash evaluations. The video below shows why it's important.

In August the Institute issued its small overlap front crash test results, showing a range of performance among many of the most popular small cars on U.S. highways. Of the 12 models evaluated, half earned a good or acceptable rating and qualified for the IIHS TOP SAFETY PICK+ award.

Honda Civic No. 1

The standout in the group was the Honda Civic. The two- and four-door models were the only small cars to earn the top rating of good in the test. The Dodge Dart, Ford Focus, Hyundai Elantra and 2014 model Scion tC earn acceptable ratings.

As a group, the small cars didn't perform as well as their midsize, moderately-priced counterparts in the same test. However, they had better results than small SUVs.

"The small cars with marginal or poor ratings had some of the same structural and restraint system issues as other models we've tested," said David Zuby, IIHS's chief research officer. "In the worst cases safety cages collapsed, driver airbags moved sideways with unstable steering columns and the dummy's head hit the instrument panel. Side curtain airbags didn't deploy or didn't provide enough forward coverage to make a difference. All of this adds up to marginal or poor protection in a small overlap crash."

The good news, says Zuby, is that there are six small cars qualifying for IIHS's highest safety award. That, he says, broadens the choices for consumers who are looking for safety and affordability.

The attorneys general of 40 states today urged the U.S. Food and Drug Administration (FDA) to ban the sale of e-cigarettes to minors and to regulate ingredients and advertising of the popular new products, which the AGs said are highly addictive.

The FDA has been studying the issue for more than a year and is expected to issue regulations shortly.

In a letter to the FDA, the 40 attorneys general called on the agency to take all available measures to regulate e-cigarettes as “tobacco products” under the Tobacco Control Act. E-cigs are battery-operated products that heat liquid nicotine, turning it into a vapor that is inhaled by the user.

Unlike traditional tobacco products, there are no federal age restrictions that would prevent children from obtaining e-cigarettes but the AGs say there should be. They urged the FDA to protect teens and children from becoming addicted to nicotine, citing a Centers for Disease Control and Prevention (CDC) survey that showed the percentages of youth who have tried or currently use e-cigarettes roughly doubled from 2011 to 2012.

The survey estimated that in 2012 nearly 1.8 million middle and high school students had tried e-cigarettes.

"Deceptive health claims"

“It’s widely known that most adult smokers start smoking at an early age, in part because manufacturers and advertisers have historically targeted young consumers with flashy marketing campaigns and deceptive health claims,” Illinois Attorney General Lisa Madigan said. “We’re seeing the same tactics at work in the e-cigarette industry. The FDA needs to put a stop to this before more teens take up this dangerous habit.”

The AGs' letter noted that e-cigarette manufacturers are using celebrity endorsements, television advertising, cartoons, attractive packaging and cheap prices to encourage young people to try e-cigs.

Some marketing, they said, has included claims that e-cigs do not contain the same level of toxins and carcinogens found in traditional cigarettes, cigars and other tobacco products.

"These claims imply that e-cigarettes are a safe alternative to smoking, when in fact nicotine is highly addictive, the health effects of e-cigarettes have not been adequately studied, and the ingredients are not regulated and may still contain carcinogens," Madigan said. "The lack of regulation puts the public at risk because users of e-cigarettes are inhaling unknown chemicals with unknown effects."

In 1998, the attorneys general of 52 states and territories signed a landmark agreement with the country’s four largest tobacco companies to recover billions of dollars in costs associated with smoking-related illnesses and restrict cigarette advertising to prevent youth smoking.

The number of people infected by hepatitis A after eating "Townsend Farms Organic Antioxidant Blend" has reached 162, according to the U.S. Centers for Disease Control and Prevention. Of those, 77 have been hospitalized. No deaths have yet been reported.

The suspected products -- which contain pomegranate seeds from Turkey -- were sold by Costco and Harris Teeter markets, but so far all of those who have fallen ill bought their products from Costco.  The CDC said it is tracking all known hepatitis A cases nationwide to see if others resulted from the pomegranate seeds.

What to do

The CDC has this simple advice for consumers: Do not eat any of these recalled products containing pomegranate seeds:

• Townsend Farms Organic Antioxidant Blend frozen berry and pomegranate mix 
• Harris Teeter Organic Antioxidant Blend frozen berry and pomegranate mix
• Woodstock Organic Pomegranate Kernels

If products containing pomegranate seeds are still in your freezer:

• Discard any recalled products in your home and freezer.
• Even if some of the product has been eaten without anyone in your home becoming ill, the rest of the product should be discarded.

Goknur Foodstuffs

By combining information gained from FDA’s traceback and traceforward investigations and the CDC’s epidemiological investigation, FDA and CDC have determined that the most likely vehicle for the hepatitis A virus appears to be a common shipment of pomegranate seeds from a company in Turkey, Goknur Foodstuffs Import Export Trading.

FDA will detain shipments of pomegranate seeds from Goknur when they are offered for import into the United States.

These pomegranate seeds were used by Townsend Farms to make the Townsend Farms and Harris Teeter Organic Antioxidant Blends and by Scenic Fruit Company to make the Woodstock Frozen Organic Pomegranate Kernels.

A massive sweepstakes scam that has taken more than $11 million from consumers throughout the U.S. and dozens of other countries including Canada, the United Kingdom, France, and Japan, has been brought to a screeching halt -- for the time being anyway.

The Federal Trade Commission (FTC) is seeking to put a permanent end to the allegedly illegal practices that have continued for seven years, and return money to victims.

Bogus letters sent

According to the FTC’s complaint, Liam O. Moran, a resident of Ventura, Calif., and his companies, mass mail personalized letters to millions of consumers telling them that they have won a large cash prize, typically more than $2 million with bold, large-type statements such as “Over TWO MILLION DOLLARS in sweepstakes has been reserved for you.”

Consumers are told that they can collect the prize by sending in a small fee of approximately $20 to $30. The letters often indicate that recipients are “guaranteed” to receive the prize money if they pay the fee, and they create a sense of urgency by stating that it is a limited-time offer.

In “dense, confusing language,” often on the back of the letters, there are statements in direct conflict with the bold claims of major winnings, the FTC said. A very careful reader might learn that he -- in fact -- has not won, and that the defendants do not sponsor sweepstakes but instead claim only to provide consumers with a list of available sweepstakes. Consumers frequently fail to see or understand this language and send money to the defendants.

The FTC contends that this language does not appear designed to correct deceptive statements, but exists mainly as an attempt to provide a defense to law enforcement action. Consumers get nothing of value in exchange for their payment.

The defendants have sent more than 3.7 million letters during the past two years, including nearly 800,000 letters to people in 156 countries in the first half of 2013. They have collected more than $11 million from consumers since 2009. The vast majority of the victims of this scam appear to be over 65.

The case continues

The court order temporarily stops the illegal conduct, freezes the operation’s assets, and appoints a receiver over the corporate defendants while the FTC moves forward with the case.

Moran’s co-defendants are Applied Marketing Sciences LLC; Standard Registration Corporation, also doing business as Consolidated Research Authority and CRA; and Worldwide Information Systems Incorporated, also doing business as Specific Monitoring Service, SMS, Specific Reporting Service, SRS, Universal Information Services, UIS, Compendium Sampler Services, and CSS.

Your home was worth more in July than it was in June -- a pattern that's stretched over at least the last four months.

According to the S&P/Case-Shiller Home Price Indices, home prices in July were up 1.9% and 1.8% from June for the 10- and 20-City Composites. All 20 cities have showed showed monthly gains for at least the last four months. Phoenix has now posted 22 consecutive months of advances.

Although home prices in all the cities increased, 15 cities and both Composites saw the increase in the monthly rates decelerate in July versus June. Over the last 12 months, prices rose 12.3% and 12.4% as measured by the 10- and 20-City Composites. The year-over-year returns show a brighter outlook with 13 cities posting improvement in July versus June values. Las Vegas increased the most from +24.9% in June to an impressive +27.5% in July.

No peaks yet

“Home prices gains are holding their 12% annual rate of gain established by the two Composite indices in April,” says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The Southwest continues to lead the housing recovery. Las Vegas home prices are up 27.5% year-over-year; in California, San Francisco, Los Angeles and San Diego are up 24.8%, 20.8% and20.4% respectively. However, all remain far below their peak levels.

Since April 2013, all 20 cities are up month to month; however, the monthly rates of price gains have declined, with more cities are experiencing slow gains each month than the previous month. That, says Blitzer, suggests the rate of increase may have peaked.

“Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing,” he said, adding, “The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favorable, impact on housing.”

As of July 2013, average home prices across the U.S. are back to their spring 2004 levels. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 21-22%. The recovery from the March 2012 lows is 20.5% and 21.2% for the 10-City and 20-City Composites.

FHFA house price index

Meanwhile, the Federal Housing Finance Agency (FHFA) monthly House Price Index (HPI) shows home prices were up 1.0% in July from their June levels. That's the eighteenth consecutive monthly price increase.

The HPI is calculated using home sales price information from mortgages either sold to or guaranteed by Fannie Mae and Freddie Mac. Compared with July 2012, house prices were up 8.8% in July. The U.S. index is 9.6% below its April 2007 peak and is roughly the same as the March 2005 index level.

For the nine census divisions, monthly price changes from June to July ranged from -0.7% in the East South Central division to +2.2% in the Pacific division, while the 12-month changes ranged from +3.8% in the East South Central division to +20.8% in the Pacific division.

The full July report is available on the FHFA website.

Consumers appear to have become a bit wobbly about the economy in September.

According to The Conference Board, its Consumer Confidence Index, slipped this month after showing some strength in August. It now stands at 79.7 – a drop of just over two points from its reading of 81.8 the previous month. The Present Situation Index grew to 73.2 from 70.9, while the Expectations Index fell to 84.1 from 89.0 last month.

“Consumer Confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed,” said Lynn Franco, director of Economic Indicators. “Consumers’ assessment of current business and labor market conditions, however, was more positive. While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead.”

How they see it

Consumers’ appraisal of present-day conditions improved moderately. Those who say business conditions are “good” increased to 19.5% from 18.7%, while those who think conditions are “bad” fell to 23.9% from 24.5$.

Consumers’ assessment of the labor market also was more favorable. Those who believe jobs are “plentiful” inched up to 11.5% from 11.3%, while those saying jobs are “hard to get” fell to a five-year low of 32.7% from 33.3%.

Consumers’ expectations, which had increased in August, declined in September. The percentage of consumers expecting business conditions to improve over the next six months edged up to 20.9% from 20.6%, while those expecting business conditions to worsen was virtually unchanged at 11.0%.

Consumers’ outlook for the labor market, however, grew more pessimistic. Those anticipating more jobs in the months ahead dropped to 16.9% from 17.5%, while those anticipating fewer jobs increased to 19.7% from 17.2%. The proportion of consumers expecting their incomes to increase declined to 15.4% from 17.5%.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was September 13.

Face it, it's pretty hard to give up French fries. So Burger King is hoping its new lower-calorie fries will find a following.

The company says its new "Satisfries" have 70 fewer calories than a same-sized serving of their regular fries -- 270 compared to 340. The ingredients are the same -- potato, oil and batter.

The difference, Burger King says, is in the batter, which absorbs less oil and, therefore, less fat and fewer calories. 

This isn't really a new idea. For decades, food manufacturers have been producing lower-fat, lower-calorie versions of what are basically indulent foods -- ice cream, cookies and so forth.

It's a way of having your cake and eating it too, as the saying goes. BK is hoping to lure customers who want to cut back on calories and fat but don't want to give up the satisfaction of munching on a new crispy French fry.

Burger King isn't saying exactly what it did to the batter, in hopes of staying ahead of the competition for at least a few months.

The new fries have a different shape -- they're crinkle-cut, whereas Burger King's regular fries are straight-edged. The company says the shape has nothing to do with the caloric content; it's just intended to help customers and employees tell which kind of fry they're eating.

Honda is recalling 374,618 model year 2003 and 2004 Odyssey and model year 2003 Acura MDX vehicles.

Due to electrical noise, a component in the air bag control module may fail causing the front air bags, side curtain air bags, and/or seatbelt pretensioners to deploy inadvertently while the vehicle is being operated. Inadvertent deployment of the air bags may increase the risk of injury and the possibility of a vehicle crash.

Honda will notify owners, and dealers will install a noise suppressor unit, free of charge. The recall is expected to begin on, or about, October 28, 2013.

Owners may contact Honda at 1-800-999-1009. Honda's recall numbers are JC2 (Honda Odyssey) and JC3 (Acura MDX).

Chicken from China has been blamed by many pet owners for the illnesses and deaths their dogs have experienced after eating treats made with Chinese chicken.

The only consolation was that Chinese chicken wasn't approved for human consumption in the United States. But that's about to change. Soon, chicken from at least four Chinese plants will not only be allowed into the U.S. but will be sold without any labeling that identifies its origin.

Sen. Sherrod Brown (D-Ohio) thinks this is foolhardy and is demanding action from the Agriculture Department.

“Given the well-documented shortcoming of the Chinese food safety system, we shouldn’t allow unmarked meat into our markets that is processed in Chinese facilities that are not subject to food safety inspections,” Brown said in a letter to Secretary of Agriculture Tom Vilsack. “This action could endanger the health and safety of American consumers and potentially undermines confidence in our nation’s food safety standards.”

U.S. Rep. Rosa DeLauro (D-Conn.) is also questioning the policy, saying that Chinese food-safety regulations are “terrible.” DeLauro says she fears the consequences of China's use of illegal antibiotics and its ongoing problems with various strains of bird flu.

Equivalent to what?

USDA recently reaffirmed an "equivalency standard" that grants four Chinese poultry processors the ability to ship processed meat into American markets, based on the premise that the Chinese inspectors are equivalent to their American counterparts.

Under the USDA guidelines, no USDA inspector will be present in Chinese facilities and products will lack country of origin labeling. Consumers will be unable to identify whether the chicken in their nuggets, patties or canned soups is from Chinese processors.

It's not the first time Brown has played a role in food safety. During a U.S. Senate Agriculture hearing in July, Brown urged heightened scrutiny of a Chinese-subsidized company’s bid to buy Smithfield Foods. Brown emphasized that any review of the deal should consider the national security, food safety, and long-term food security implications of approving the transaction.

In 2012, Brown led the way in holding the Food and Drug Administration responsible after an Ohio family’s five-month old puppy, Penny, passed away after eating tainted chicken jerky made in China, one of many such cases reported in recent years. 

In February, the Food and Drug Administration (FDA) said it has been trying to find a cause for the widespread reports of dogs that became ill and died after eating jerky treats containing chicken from China. Without directly blaming China, the FDA noted that there has been a dramatic increase in pet food imported from China over the last ten years.

The FDA said in February that it had received about 2,200 reports of pets becoming ill or dying after eating jerky treats; 360 died. Most of those reports involved dogs, although a few cats have also become ill.

By the FDA's count, the amount of pet food imported from China has grown 85-fold in recent years, with nearly 86 million pounds of pet food being imported in 2011.

It noted that, at that time, Chinese chicken was not approved for human consumption in the U.S., which made more of it available at attractive prices for use in pet food.

Questions for USDA

In his letter to Vilsack, Brown said that American consumers "deserve to be fully informed of their product choices and should be afforded every opportunity to buy quality, American-sourced food products that support U.S. farmers and U.S.-based employment."  

He posed the following questions

• When will the first Chinese-processed poultry shipments reach U.S. ports of entry? 

• Is it true that poultry processed in China would be labeled upon reaching our shores, and possibly subject to reinspection, but regulatory exemptions for processed poultry and meats allow labeling to be removed before these products are purchased by American consumers?  If so, how might this labeling gap be remedied by USDA?

• What additional regulatory or labeling steps might USDA take to ensure that American consumers are given all currently available information regarding supply chain safety and country of origin of their meat products (processed and unprocessed)? 

• Has FSIS requested that it be able to station its inspectors in Chinese poultry facilities when products destined for export to the U.S. are processed?  If not, why not?

• Will there be intensified port-of-entry inspection of products imported from China under the provisions of the August 30, 2013 FSIS announcement?  If so, please identify those measures and the agency responsible for implementation.

• Is USDA or FSIS also currently working toward approving the shipment of Chinese-origin poultry and other meats (processed or unprocessed) to the U.S.?  If so, what is the status of that effort?

• What if any further regulatory or administrative steps are required before FSIS decision on processing poultry in China is fully implemented?

• Which U.S., Canadian, or Chilean poultry slaughter facilities have been identified by USDA that will ship raw poultry to China for further processing?

• Has USDA developed or sought industry-wide data concerning the anticipated employment effects of its decisions on the U.S. based poultry and meat processing industry?

Have you tried to close a bank account recently? It's not as easy as you'd think. Among other obstacles, many banks will continue to honor automatic payments, putting an inactive account into overdraft and piling on the fees. Some will even reopen a closed account to pile on more fees.

Sherrie of Memphis learned this when she tried to close her account with Regions Bank. 

"I went into Regions in October or November 2012. I wanted to close my account because I was going through a separation with husband," she said. "I withdrew all except $20 because the teller said there was something pending come back tomorrow it should clear and then close account. The next day I went back in and closed the account and got my last $20."

And that, she thought, was the end of it. 

But in December, Sherrie said, "I received a call from Regions that told me that AT&T opened my checking account up and they have been charging me fees ever since because AT&T opened my account and tried to get money. Now they said I owe them over a hundred dollars worth of NSF fees."

It took a ConsumerAffairs reporter more than a year to finally close a Wells Fargo checking account and cost hundreds of dollars in fees, all because the bank continued honoring direct payment requests from companies that had ignored requests to switch automatic payment drafts to a new account. 

"Commonsense legislation"

Legislation introduced in Congress last week would make life a little easier. The bill was introduced in both the House and Senate by Senator Tom Harkin (D-Iowa) and Congresswoman Jan Schakowsky (D-Ill). 

“It should be easy for consumers to place their money in a financial institution of their choice.  But, today, too many hardworking families, in particular those of modest means, do not have the flexibility to close an existing account and move institutions,” said Harkin. “The commonsense legislation we are introducing today will allow consumers to easily and fairly move their money, which will also help make our banking system more competitive.”

“This bill would make sure bank customers are able to transfer their business if and when they decide to do so, eliminating obstacles and ensuring transparency in the banking system,” said Rep. Schakowsky. “I’ve heard from many of my constituents who still have problems moving their money to a new bank, but this bill would end that problem.”

A 2012 report by Consumers Union, “Trapped at the Bank,” found consumers can encounter myriad problems in switching banks accounts such as delays and uncertainty regarding automatic transfers, fees, or banks reopening closed accounts.  The report also found that bank disclosures typically fail to contain even rudimentary information to help consumers in closing an account. 

Pamela Banks, senior policy counsel for Consumers Union, said, “As frustrated as some people are with their banks, people tend to stay put because it can be a huge hassle to switch.  This bill would remove some of the barriers that make it hard for bank customers to take their business elsewhere.  This is a common-sense solution that gives consumers more choices and options, and it makes the banking system more competitive and accountable.”

What it would do

The Freedom and Mobility in Consumer Banking Act would create clear rules of the road for how to close an account and move to a new institution.  The bill would direct the Consumer Financial Protection Bureau to issue rules to:

• Give consumers the right to close an account without a fee, regardless of the remaining balance;
• Give consumers a choice of how to receive their funds upon closing their accounts, including a check or electronic transfer;
• Protect consumers from having old accounts reopened without their consent;
• Protect consumers from being charged any account fees after requesting to close the account;
• Require banks to provide clear account closing procedures; and
• Require banks to provide a list of all the automated transactions, such as direct deposit and bill payments, that go in and out of a consumer’s existing account to help consumers reroute those transactions to a new account.

Among the national groups supporting this legislation are: American for Financial Reform (AFR), The Center for Economic Justice, CFA, Consumer Action, Consumers Union, The National Fair Housing Alliance, The National Consumer Law Center (on behalf of its low- income clients), and U.S. PIRG.

Maybe it’s time to admit the U.S. Postal Service can’t make a profit in the twenty-first century. I check my mailbox every day and this week’s snail-mail tally includes two bills, one magazine, a jury-duty questionnaire (ugh) and dozens of pieces of junk mail: fliers, catalogs, coupon books, political endorsements, advertising postcards and a baker’s dozen of credit-card offers.

Almost all of this junk mail went directly from my mailbox to my recycling bin (except the credit-card offers, which first had to be cut into unreadable little pieces as protection against identity theft).

The U.S. Post Office is established in the U.S. Constitution; Article 1, Section 8 grants Congress the power, “To establish Post Offices and post Roads.” Back in the eighteenth century, mail was pretty much the only mass communication system in existence, so this was a very big deal.

Now it’s 2013, you’re reading this on the Internet, and if you’re in the habit of regularly checking Internet news sources you’ve noticed that never a year goes by without some version of the “U.S. Post Office is in financial trouble” story making the rounds.

We published one just a few days ago, after the U.S. Postmaster General testified before the Senate that the post office is in serious financial trouble, and will soon have only enough money on hand to cover five days’ worth of operating expenses.

Not really surprising

It's not like this is really surprising. Two years ago, Business Insider reported that “The US Postal Service Nears Collapse” and partially explained why:

“[The post office] relies on first-class mail to fund most of its operations, but first-class mail volume is steadily declining—in 2005 it fell below junk mail for the first time. This was a significant milestone. The USPS needs three pieces of junk mail to replace the profit of a vanished stamp-bearing letter.”

Hence the bagfuls of junk mail I throw out every week. What happened to all those first-class letters? Email and free domestic long-distance calls made most of them obsolete. So the post office covers part of the financial gap by delivering junk mail to people who don’t want it, which doesn’t sound like a viable long-term business model.

Maybe the problem is inherent to anything where you’re supposed to apply terms like “business model” or “profitable operating costs” to what arguably qualifies as a legal obligation or a public utility. In the era of the Internet, unlimited long-distance phone calls, and private delivery services like FedEx and UPS, is the old-school post office model still necessary?

Density drives profits

Maybe it is, at least for people living out in the sticks. It’s easy for private companies like FedEx and UPS to make a profit delivering to people living in areas of high population density. But consider what Business Insider noted about the post office back in 2011:

“The USPS is a wondrous American creation. Six days a week it delivers an average of 563 million pieces of mail—40 percent of the entire world's volume. For the price of a 44¢ stamp [46¢ as of 2013], you can mail a letter anywhere within the nation's borders. The service will carry it by pack mule to the Havasupai Indian reservation at the bottom of the Grand Canyon. Mailmen on snowmobiles take it to the wilds of Alaska. If your recipient can no longer be found, the USPS will return it at no extra charge. It may be the greatest bargain on earth.”

True enough, and it’s great that Americans living in remote wilderness areas accessible only by snowmobile or pack mule can still get mail sent to and from their fellow Americans in the rest of the country. But how realistic is it to criticize the guys expected to deliver mail on muleback for only 46 cents per letter, because they aren’t operating in the black?

Of course, everybody knows all this already. But like so many things that seem eternally stuck in Congress, nobody wants to do much of anything about it. Except talk. Maybe we should all send them a letter?

If you’re trying to lose weight or keep from gaining any, eating actual sugar might be better than making do with low-calorie artificial sweeteners.

So says Yale University professor Ivan de Araulo, in a press release published on Sept. 22. De Araulo was lead researcher of a study which seems to indicate that your brain is much harder to fool than your tongue—however sweet an artificial sugar-free might taste, it won’t satisfy your brain’s food-craving center as effectively as genuine sugar.

With all the “sugar makes you fat” and “beware diabetes” warning stories you see in the news, sometimes it’s easy to forget that there’s a valid biological reason humans evolved to crave sugar: it’s a concentrated source of food energy. Sugar isn’t inherently bad for your health; excessive amounts of sugar is.

Fewer calories

The logic behind using artificial sweeteners in lieu of sugar is that the fake stuff has fewer calories than sucrose or fructose; thus, the weight-conscious person can satisfy their craving for sweets while consuming far less calories.

The problem, as suggested by de Araulo’s study (among others),  is that artificial sweeteners might not satisfy that craving after all. As de Araulo wrote in his press release, “The study identified a specific physiological brain signal that is critical for determining choice between sugars and sweeteners. This signal regulates dopamine levels – a chemical necessary for reward signalling in the brain – and only arises when sugar is broken down into a form where it is usable as fuel for cells of the body to function.”

In other words: when you have a sugar craving, what eventually satisfies that craving is not the sensation of sweetness on your tongue, but the presence of dopamine in your brain. And, regardless of what sweet flavors stimulate your taste buds, your brain won’t generate that dopamine unless it gets some genuine sugar to work with.

Yale and de Araulo are far from the first researchers to suggest that low-calorie sweeteners might paradoxically result in weight gain caused by increased food cravings; as early as 2008, we noted that

“Psychologists at Purdue University's Ingestive Behavior Research Center reported that, compared with rats that ate yogurt sweetened with sugar, those given yogurt sweetened with zero-calorie saccharin later consumed more calories, gained more weight, put on more body fat, and didn't make up for it by cutting back later.

“Authors Susan Swithers, PhD, and Terry Davidson, PhD, theorize that by breaking the connection between a sweet sensation and high-calorie food, the use of saccharin changes the body’s ability to regulate intake.”

Five years later, de Araulo and his team made the similar observation that “humans frequently ingesting low-calorie sweet products in a state of hunger or exhaustion may be more likely to 'relapse' and choose high calorie alternatives in the future.”

The solution, according to de Araulo, might not be to cut out the use of artificial sweetener altogether, but to combine them with actual sugar in amounts sufficient to satisfy the brain’s craving for it. “The results suggest that a 'happy medium' could be a solution; combining sweeteners with minimal amounts of sugar so that energy metabolism doesn't drop, while caloric intake is kept to a minimum.”

Pretty much everyone agrees that strong skills and experience are essential to getting a job. But, those only the only factors that enter into the decision-making process when the hiring is actually done.

A new study from CareerBuilder.com finds that a sense of humor, an eye for fashion, or even knowledge of current affairs and pop culture could also play some part in influencing who gets the job and who doesn't.

Where the rubber meets the road

The nationwide study, conducted online by Harris Interactive in the May-June 2013 period included 2,076 hiring managers and human resource professionals across industries. Employers were asked, if they had two equally qualified candidates, which factors would make them more likely to consider one candidate over another. Their responses included:

• The candidate with the better sense of humor - 27%
• The candidate who is involved in his or her community - 26%
• The candidate who is better dressed - 22%
• The candidate with whom I have more in common - 21%
• The candidate who is more physically fit - 13%
• The candidate who is more on top of current affairs and pop culture - 8%
• The candidate who is more involved in social media - 7%
• The candidate who is knowledgeable about sports - 4%

“When you’re looking for a job, the key is selling your personal brand. Employers are not only looking for people who are professionally qualified for the position, but also someone who is going to fit in at the office,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “Once you get the job, however, the process doesn’t simply stop. Employers will continuously assess personality, performance and behavior when considering prospects for promotions. You want to treat your current job like an extended interview for the next job you want in the company.”

Movin' on up

One third (33%) of employers said they are more likely to promote an employee who has been vocal about asking for a promotion in the past. However, there are also several behaviors other than sub-par or average performance that employers identified as red flags, keeping employees from promotions, including:

• Someone who says, “that’s not my job” - 71%
• Someone who is often late - 69%
• Someone who has lied at work - 68%
• Someone who takes credit for other people’s work - 64%
• Someone who often leaves work early - 55%
• Someone who takes liberties with expenses charged back to the company - 55%
• Someone who gossips - 46%
• Someone who doesn’t dress professionally - 35%
• Someone who swears - 30%
• Someone who doesn’t say anything in meetings - 22%
• Someone who cried at work - 9%
• Someone who has dated a co-worker - 8%

The survey also found that promotions aren’t necessarily accompanied by higher compensation. Nearly two-thirds of employers (63%) said that a promotion at their firms doesn’t always include a pay raise.

The end of your auto lease is approaching and you have to make a decision. Do you turn the car over to the lender, as called for under the lease agreement, or do you purchase it?

As is the answer to a lot of questions, it depends. Primarily, it depends on the residual value of the vehicle, specified in the lease. That number, in large part, will determine whether the purchase would be to your advantage.

Currently there are many attractive lease deals in the marketplace. Consumers can lease a nice car for not much more than $200 a month.

Pay now or pay later

The thing that makes those current lease deals so attractive, however, works against you if you want to buy the vehicle. Lease payments are partially based on the residual value of the car at the end of the lease. Because cars – even small economy cars – are holding their values at a much higher rate these days, those residual values are higher.

A higher residual value at the end of the lease means your payments are lower but your purchase price, at the end of the lease, would be higher. But don't forget, that residual price was set at the beginning of the lease term – often three or more years ago.

The experts at automotive site Edmunds.com say how accurately the residual value in your lease agreement reflects current market values is the deciding factor in whether buying your lease vehicle is a good deal or not.

Know the market value

Edmunds.com Sr. Consumer Advice Editor Philip Reed says the general rule of thumb is if the residual value is less than the current market value, “then the buyout is a good deal.” Edmunds' True Market Value estimator is one source of current market values. Kelly Blue Book's Blue Book Value is another.

On the flip side, Reed advises that if the car's residual value is higher than the market value, then the smart play is to turn in your leased car and move on to the next vehicle.

Autotrader.com, another automotive website, brings up another reason you might be motivated to purchase your leased vehicle. The lease agreement requires you to keep the vehicle in excellent condition and drive it no more than a set number of miles.

If you go over the miles, and pick up a small dent in the rear door along the way, you'll have to pay for those transgressions – unless you purchase the vehicle. The amount of that fee might be a factor in your decision.

The phone call

As the end of your lease approaches the leasing company will probably call you to discuss your options. According to Autotrader, you should ask plenty of questions but make no decision while you are on the call. Ending the lease to your advantage will require some research and thought.

As your lease is ending you may already be inclined to purchase your car, but according to Bankrate.com, you should refrain from calling the leasing company. Rather, you should wait for the leasing company to call you.

The leasing company is going to sell your car to someone. If they can sell it to you, their life is a little easier. Therefore, there might be some room for negotiation, despite what you agreed to in the leasing contract. But Bankrate notes the leasing company will be less inclined to negotiate if you express enthusiasm for the purchase option. In other words, wear your poker face.

Nearly everything's negotiable

Many lease agreements include a "purchase option" fee, which is a fee of up to a couple of hundred dollars that must be paid on top of the residual price. This should be the first thing you try to negotiate away.

If the agreed-to residual value is higher than the current market value, you may have some leverage to negotiate it lower. Remember, the leasing company is going to sell your car – if not to you then to a wholesaler, who clearly knows what the real value is.

According to Edmunds, even the end of the lease can be subject to negotiation. If you aren't ready to end the lease but don't want to make a purchase decision either, you may be able to continue to lease on a month-to-month basis at the same price.

Halloween sales may be cooler, along with the October weather, as fewer consumers plan to celebrate the holiday.

According to the National Retail Federation's (NRF) Halloween Spending Survey conducted by Prosper Insights & Analytics, nearly 158 million consumers will participate in Halloween activities, compared with the survey high of 170 million last year.

The survey also says that those who do celebrate will trim their budgets, with the average celebrant expected to spend $75.03 on decor, costumes, candy and fun, down nearly $5 from last year. Overall, average spending on Halloween has increased 54.7 percent since 2005, with total spending estimated to reach $6.9 billion this year.

“Still one of the most beloved and anticipated consumer holidays, Halloween will be far from a bust this year,” said NRF President and CEO Matthew Shay. “After a long summer, the arrival of fall will put millions of Americans in the spirit to partake in traditional and festive activities.”

How we spend

One of the most cherished parts of the holiday -- dressing in costume -- will once again be popular. According to the survey, 43.6% of people plan to dress up and will spend a total of $2.6 billion on traditional and awe-inspiring costumes. Specifically, consumers will shell out $1.04 billion on children’s costumes, and $1.22 billion on adult costumes.

When it comes to pets, 13.8% of those celebrating will take the extra time to find the perfect costume for their four-legged friends to the tune of approximately $330 million.

Additionally, celebrants will spend $2.08 billion on candy and $360 million on greeting cards. Second only to Christmas in terms of spending on decorations, consumers will shell out $1.96 billion on life-size skeletons, fake cob webs, mantle pieces and other festive decorations.

When we shop

For the first time, NRF asked when people will begin shopping for Halloween. According to the survey, nearly one-third (32.8%) begin shopping before September 30. An additional 67.2% of consumers will shop in October. Specifically, 43.6% will begin the first two weeks in October and 23.6% will wait until the final two weeks of the month.

When it comes to inspiration for costume ideas, one-third (32.9%) will search for costume ideas online, another third (32.8%) will look for new ideas in a store, and one-fifth (20.8%) will seek advice from friends or family. Additionally, 14.1% will check Facebook  for inspiration and 3.8% will review blogs.

Nearly one in 10 (9.3%) will scour the visually-appealing Pinterest for costume ideas, versus 7.1% last year. Of those buying or making costumes, the average person will spend $27.85 -- a few cents less than last year.

How we celebrate

There are a variety of ways consumers will celebrate this year, with handing out candy being the most popular (72.0%). Others will carve a pumpkin (44.2%), visit a haunted house (20.3%), take their child trick-or-treating (31.7%) and decorate their home and/or yard (47.5%). Three in 10 (30.9%) will attend or host a party.

Despite the anticipation of the popular fall event, one-fourth of U.S. consumers (25.2%) say the state of the economy will affect their Halloween spending plans -- nearly nine in 10 (86.1%) will spend less overall, up a touch from last year. Additionally, 32.7% will buy less candy and 18.1% will make a costume instead of buying one.

U.S. Marshals seized food products at two Virginia companies -- Gourmet Provisions and Royal Cup -- after investigators found widespread and active rodent and insect infestation on the premises.

The U.S. Food and Drug Administration (FDA) initiated seizures of products manufactured by Gourmet Provisions and stored by the two companies on September 16, 2013, under warrants issued by the U.S. District Court for the Western District of Virginia.

Failed inspection

During the most recent inspection, investigators found widespread rodent and insect activity, unclean equipment, and structural defects. Effective measures had not been taken to exclude insects and rodents from the facility and to protect food products and food contact surfaces from contamination.

“These companies have a responsibility for the safety and quality of their products,” said Melinda K. Plaisier, the FDA’s associate commissioner for regulatory affairs. “When firms do not uphold this responsibility, the FDA will take actions that demonstrate its commitment to assuring consumers that foods they buy are prepared, packaged, and held under sanitary conditions.”

Some of the seized goods had been under an embargo by the Virginia Department of Agriculture and Consumer Services.

Gourmet Provisions manufactures and packages ice cream cones and stores other finished food products in its warehouse. Royal Cup stores coffee service items in a separate area within the Gourmet Provisions warehouse. Gourmet Provisions does business as Matt’s Supreme Cones. The two businesses are located on the same premises in Waynesboro, Va.

To date, no illnesses have been associated with these products.