Current Events in October 2015

Tired of waiting for Volkswagen, German authorities have rejected VW's proposal for voluntary repairs and ordered the automaker to get its recall of 8.5 million diesel-powered cars into gear.

In the U.S., the Environmental Protection Agency is waiting for VW to propose a remedy. The EPA will then study the proposed remedy to determine whether it is likely to work, a process that could stretch well into 2016.

The Federal Trade Commission has also opened an investigation into the deception, joining the Justice Department and the EPA, agency spokesman Justin Cole confirmed yesterday. At issue, presumably, are VW's advertisements touting its "clean" diesels. 

It was researchers in the United States who discovered that VW had rigged a "cut-out" that turned off much of the pollution control equipment on its diesel cars except when they are being inspected, allowing the cars to emit as much as 40 times the allowed amount of pollutants.

But the number of cars involved in the U.S. is relatively small, fewer than half a million. In Germany, by contrast, the illegal device is found on more than 8.5 million cars. Today's recall affects 2.4 million of them. It came after German Transport Ministry officials rejected VW's proposed fix.

A huge embarrassment

In the U.S., the scandal is a huge embarrassment for Volkswagen that many analysts say could permanently harm its brand but is not regarded as a national disgrace or a potential economic or environmental disaster.

In Germany, by contrast, the number of cars is not only much greater, but the importance of VW to the nation's economy is hard to overstate. German authorities, fearing that their entire auto industry could be harmed by the scandal, are increasingly impatient and determined to begin implementing a solution.

The recall ordered by the government will be much more expensive for VW since it requires the company to speed up the process and devote more time, money, and personnel to designing and implementeing a fix.

Under today's order, Volkswagen must share technical details of its solution with the government by mid-November and begin recalling cars in January. The government will test the recalled vehicles to be sure the repairs are successful.

For the sake of customers and the image of the automobile, “we will clear up what happened at Volkswagen,” Enak Ferlemann, state secretary in Germany’s Transport Ministry, said in a speech in the lower house of parliament, Bloomberg Business reported. “Germany will stay the No. 1 auto country.”

Foreclosure activity in the third quarter rose 3% from 2014, according to foreclosure marketing website RealtyTrac. Most of that activity came in the form of bank repossessions, which spiked 66% year-over-year.

On the surface that might look like trouble, but it probably isn't. The increased activity isn't caused by new problems in the housing market but is a hangover from the housing crises.

Homes lost by people three to five years ago, many of them vacant for years, are finally being seized and put on the market. According to RealtyTrac, here is the key statistic:

A total of 133,811 U.S. properties started the foreclosure process in the third quarter, down 12% from the previous quarter and down 14% from a year ago to the lowest level since the third quarter of 2005.

Back to normal

In other words, we are very close to getting back to normal when it comes to homeowners being able to manage their mortgage payments.

“The widespread rise in foreclosure activity in the third quarter compared to a year ago is the result of two starkly different trends taking place,” said Daren Blomquist, vice president at RealtyTrac. “In states such as New Jersey, Massachusetts, and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years. On the other hand, in states such as Texas, Michigan and Washington, the third quarter increases are a sign that the foreclosure market has settled into a normalized pattern close to or even below pre-crisis levels, and in those states the overall housing market should easily absorb the additional foreclosure activity with little impact on home values.”

But in states where there is a flood of distressed homes finally hitting Multiple Listings, there should be a significant impact on the housing market – good for buyers, not so good for sellers.

When foreclosed homes are finally put up for sale, they have often sat empty for years. There may be cosmetic and even structural degradation. That tends to pull down its asking price as well as surrounding property values.

However, it can be a great benefit for buyers. It not only provides a lower entry price into the market, it vastly increases the supply of homes they have to choose from.

Most-affected states

Here are some markets that may be most affected:

• New Jersey: Foreclosure activity was up 27%, boosting the state’s foreclosure rate to the nation’s highest. One in every 171 housing units received a foreclosure filing during the quarter — more than twice the national average. Most of the activity was centered in Atlantic City.
• Florida: Foreclosure activity dropped 17% from a year ago, but the state still posted the nation’s second highest foreclosure rate. One in every 186 housing units had a foreclosure filing. Data suggests that the Florida housing market is on the mend.
• Nevada: Foreclosure activity jumped 13%, with the third highest foreclosure rate in the nation. One in every 194 housing units had a foreclosure filing. But like Florida, the trend is moving in the right direction. Foreclosure stats dropped 14%.
• Maryland: Foreclosure activity was down year-over-year, but the state has a large share of repossessed homes finally hitting the market.

“We are anticipating a continued slowdown in foreclosure activity across the state in the fourth quarter,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton, and Columbus markets in Ohio. “While the lower number of foreclosures is a good reflection of the growing economy and jobs across Ohio, less foreclosure activity will help lender servicers to provide quicker action on pending foreclosure accounts into their REO portfolios.”

A shortage of homes for sale in many markets has distorted prices, artificially boosting home prices. In regions where repossessed homes are finally hitting the market, prices could moderate significantly.

High blood pressure was once just a concern for people entering their middle-aged years. Now, with an epidemic of obesity and increasing cases of diabetes, it's a problem for young people too.

A recent federal study determined that having even slightly elevated blood pressure when you are young can lead to serious heart problems in middle age.

Persistently elevated blood pressure, or hypertension, is one that tops 140/90, a reading that measures the force of pressure in the heart as it contracts and as it relaxes between contractions. Hypertension has been long implicated as a risk factor in a range of cardiovascular diseases.

But the recent study suggests that pressure just below that threshold -- or high normal pressure -- begins to fuel heart damage in people as young as 20 and can lead to changes in heart muscle function in as little as 25 years.

One in 25 teens

According to the Nemours Foundation, a non-profit children's health organization, about one in 25 teenagers has elevated blood pressure. The foundation says there can be many reasons, but most have to do with an unhealthy lifestyle – a bad diet, excess weight, stress, and too little physical activity.

One risk factor for high blood pressure in teens may be spending hours each day on the Internet.

Researchers at Henry Ford Hospital in Detroit discovered teens who spend at least 14 hours a week on the Internet had an increased risk of elevated blood pressure. When they examined 134 teens who fit the category of heavy Internet users, 26 of them had higher than normal blood pressure.

These findings add to other research that seems to suggest an association between heavy Internet use and a number of health risks like addiction, anxiety, depression, obesity, and social isolation.

Dial it back

Andrea Cassidy-Bushrow, the study’s lead author, says the take-home message for teens and parents is moderation.

“Using the Internet is part of our daily life but it shouldn’t consume us,” she said. “In our study, teens considered heavy Internet users were on the Internet an average of 25 hours a week.”

Cassidy-Bushrow urges young people to take regular breaks from their computer or smartphone and engage in some form of physical activity. She also recommends parents place limits on their children’s’ time at home on the Internet.

“I think two hours a day, five days a week is good rule of thumb,” she said.

The study estimates teens spend an average of 15 hours a week online, either at school or at home. Forty-three percent of heavy Internet users were considered overweight compared to 26% of light Internet users.

The latest lawsuit in the Volkswagen dirty diesel scandal seeks an immediate buyback of "clean" TDI diesels sold in California, arguing that the cars violate California's strict emissions laws.

The lawsuit follows Congressional testimony by VW executives who said the firm won't begin to recall its polluting diesels until 2016, and that the recall process could take a year or more.

“In a state where environmental protection is paramount, consumers in California have suffered greatly from VW's dirty diesels and its deception,” said Steve Berman, managing partner of the Seattle law firm Hagens Berman. “We believe California owners should not have to choose between either parking their cars and walking, or driving them and spewing illegal and dangerous compounds into the environment. They should not have to wait years or even months for Volkswagen to get around to fixing this.”

The lawsuit states that the tainted vehicles violate California law because by design, they were never intended to pass the state's emissions requirements and instead employed a defeat device which, during emissions tests, turns on full emissions controls -- but only during the test.

Warranty breached

“Under California’s stringent automobile emissions control laws, each vehicle purchased in the state must as a matter of law come with an express manufacturer’s warranty that the vehicle was ‘[d]esigned, built, and equipped so as to conform with all applicable regulations adopted by the Air Resources Board,’ the suit states. “Volkswagen Group of America, Inc. (“VW”) breached this express warranty with respect to each California Vehicle.”

According to the suit, “Under applicable California express warranty law, VW must ‘promptly’ offer to accept the return of non-conforming vehicles and to provide replacement vehicles or restitution of the purchase price (among other remedies) unless it can make them ‘conform to the applicable express warranties after a reasonable number of attempts.’”

The suit further alleges that Volkswagen admits it cannot presently make the required repairs and its own timetable would have owners wait months, or even years for a suitable repair.

The suit covers these diesel VWs:

• Jetta (model years 2009 – 2015),
• Beetle (model years 2009 – 2015),
• Audi A3 (model years 2009 – 2015),
• Golf (model years 2009 – 2015) and
• Passat (model years 2014 – 2015).

Hagens Berman's suit quotes VW owners who feel that Volkswagen has committed consumer fraud, leaving them with either an illegally polluting car, or what will become a recalled, underperforming vehicle whose value has sharply declined.

Joining Hagens Berman in the suit is business litigation firm Quinn Emanuel.

No doubt there will be many issues in the 2016 presidential election – from immigration to private email servers.

But researchers at the University of Houston and Georgia State Universitysuggest one more – the role of corporate bond sales in the Great Recession. The effects of that economic calamity, they say, are still being felt and need to be better understood so they can be avoided in the future.

The general view is that the collapse of the subprime housing market created the severe recession. While it played a major role, the researchers in their paper – "Spreading the Fire: Investment and Product Market Effects of Corporate Bond Fire Sales" – find another culprit.

University of Houston finance professor Praveen Kumar says that a central question that should be asked is why the housing bubble spread to the broader economy, sparking corporate cutbacks and job losses.

Wall Street sinking Main Street

"There is a widespread view that financial market shocks were transmitted to the real sector - the 'Wall Street sinking the Main Street' syndrome," he and Georgia State's Hadiye Aslan wrote. "In particular, shocks in the asset-backed commercial paper market led to substantial losses on the balance sheets of banks, forcing them to sell assets in 'fire sales,' contract their lending firms, and force the economy into a prolonged recession.”

There was nothing wrong with the corporate bonds that got dumped during the financial crisis, the authors write. It's actually that fact that led to the fire sale.

Because banks were holding so many “toxic” assets they couldn't sell at any price, they were forced to sell their more valuable assets to raise money. And the more commercial paper put up for sale, the lower the price sank.

The study found institutional holders of corporate bonds - primarily insurance companies and mutual fund firms – were also heavily invested in risky mortgage securities.

Credit freeze

As they dumped their good assets and saturated the commercial bond market, even strong companies were unable to issue additional bonds to finance capital expenditures. At one point, even GE could find no buyers for its bonds.

When major companies couldn't raise capital, they suspended activity and slashed their workforce. At that point, an ordinary recession became the Great Recession.

The research team says capital expenditures of affected firms dropped by 14.5% while research and development dropped by 17.2%.

"This highlights how integrated the financial markets are with the rest of the economy," Kumar said. "One financial market sneezes, and the rest of the economy catches pneumonia. This goes far beyond Wall Street."

The research already has captured the attention of advocates for additional reform of the nation's financial markets. Kumar predicts the issue of Wall Street risk taking, and how it could threaten the overall economy, will heat up as the 2016 presidential campaign progresses.

Getting plenty of calcium in your diet is a good thing – particularly for your kidneys. So it was something of a surprise when health researchers determined that taking calcium supplements might actually have the opposite effect.

Researcher Christopher Loftus of the Cleveland Clinic Lerner College of Medicine and his colleagues reviewed the 24-hour urine collections and CT imaging scans from patients at their institution who had a history of kidney stones.

More than 6,000 patients had a history of kidney stones by imaging scans, a third of whom had 24-hour urine collections before and after starting calcium supplements. A total of 1486 patients were supplemented with calcium, 417 with vitamin D only, and 158 with no supplementation.

The patients who took calcium supplements had lower total calcium and oxalate – components of kidney stones – in their urine. Blood levels were unaffected. That's the good news.

Faster kidney stone growth

However, these patients also had a faster rate of kidney stone growth. Researchers believe this suggests that the mechanism of calcium supplementation on stone formation may not be so clear-cut.

Vitamin D supplements appeared to have better results. Those subjects had less urinary calcium excretion, as well as less stone growth.

Bottom line? Vitamin D supplements might help reduce the risk of stone formation. As for calcium, the research team concludes it is preferable to get it from food, especially if you are prone to developing kidney stones.

“While taking supplemental calcium has associated positive effects, these results suggest that supplemental, as compared with dietary, calcium may worsen stone disease for patients who are known to form kidney stones,” said Loftus.

Dairy products and green leafy vegetables are good food sources of the mineral.

Skeptical

Past research has questioned the effectiveness of calcium supplements. In 2013, the U.S. Prevention Services Task Force recommended that postmenopausal women avoid calcium and vitamin D supplements, saying it could find little evidence that they protected against broken bones.

But the human body needs calcium, especially to build and maintain strong bones. Your heart, muscles, and nerves also need calcium to function properly.

Some studies suggest that calcium, along with vitamin D, may have benefits beyond bone health: perhaps protecting against cancer, diabetes, and high blood pressure. But the Mayo Clinicsays evidence about such health benefits is not definitive.

Men and women have different calcium needs, which also vary by age. Before taking supplements, you should discuss it with your healthcare provider since overloading on calcium can cause other types of health problems.

When real estate economists talk about housing affordability, they tend to focus on home prices and interest rates.

While those are important, they aren't the only factors that determine whether a home is affordable. Another big consideration is the purchaser's income.

Researchers at real estate site Zillow conducted an interesting research project. They selected several occupational categories for which there is data on average salaries and compared that with home prices in various housing markets. The results were surprising.

Tale of two teachers

They found that teachers would have an easier time finding an affordable home in parts of California – known for pricey real estate – than in Salt Lake City. The reason? Teachers in California make a lot more money than teachers in Utah.

In Bakersfield, Calif., the median home value is $166,300, while the average teacher's salary is $61,000 a year. Since consumers in Bakersfield usually spend 22% of their income on a house payment, a Bakersfield teacher could afford a $310,000 home. In fact, currently 86% of the homes on the market would be in their price range.

It's a much different story in Salt Lake City, where the average teacher earns $38,000 a year and people historically spend the same share – 22% – of their incomes on a mortgage payment. There, teachers could buy a $195,000 home – meaning only about a quarter of the homes on the Salt Lake City market would fall within their budget.

The Midwest isn't always a bargain

That's why homes in the middle of the country aren't the bargains they appear to be. Home prices in the Midwest are less than comparable houses on either coast, but salaries are generally lower too.

"There's a lot more to home buying affordability than just the cost of the home. Incomes vary a lot across the country – even within the same occupation," said Zillow Chief Economist Dr. Svenja Gudell. "There's also the question of how much of your paycheck you're willing to put toward a house payment, and finally, whether you can find a home in your price range.”

Gudell says many potential buyers are doing all the right things before buying a home – saving a healthy down payment, organizing finances, and qualifying for a loan – only to find there are few homes available within their budget and close to their job.

According to Zillow's research, if you are a lawyer or judge you could afford almost every home on the market in Buffalo or Syracuse, N.Y. But don't move to Stockton, Calif., because 34% of homes would be out of your price range.

If someone could “get it for you wholesale” last month, you got a pretty good deal. The Department of Labor reports its Producer Price Index (PPI) for final demand declined 0.5% in September.

The index for final demand goods moved down 1.2% for the month, the largest decrease since a 1.9% drop in January.

What does that mean, exactly? It means the cost of producing goods was lower, with not a hint of inflation. It also means the Federal Reserve may hesitate once again before raising interest rates.

Lower gasoline prices

Much of the decline was centered in the energy sector, dragged down by falling gasoline prices. In fact, the Bureau of Labor Statistics says over 80% of the price decline can be traced to final demand for energy, which was down 5.9%. Final demand prices for gasoline were down 16.6%.

Wholesale prices for beef, veal, and eggs were also lower, helping to keep food prices in check. Egg prices were down from recent highs caused by the bird flu virus.

The deflationary trend also extended to the service sector. The report shows the index for final demand services fell 0.4% in September, the largest decline since falling 0.5% in February.

Almost half of the drop can be traced to prices for services outside the trade, transportation, and warehousing sectors.

Cause for concern

This is a report that may worry Fed policymakers who are trying to increase the amount if inflation in the economy. Normally, inflation is bad for consumers because it makes everything more expensive.

But the Fed wants prices to rise moderately to encourage businesses to expand and hire more people. It also makes existing debt cheaper, since it will be paid back in dollars that are worth less than when the debt was incurred.

Today's Commerce Department report on retail sales won't make Fed policymakers feel any better. In September, consumer spending rose an anemic 0.1%, largely because consumers spent less on gasoline.

Consumers pocket the savings

That, of course, could be considered a good thing as long as they spent the savings elsewhere. They didn't. The report shows other spending areas were down or flat as consumers, for the most part, pocketed their fuel savings.

Sluggish demand feeds worries that the economy is slowing down, at a time when demand is falling worldwide and commodity prices continue to move lower.

For consumers, it's something of a double-edged sword. Buying things becomes more affordable, but if you are an employee, your employer may feel the pressure.

At best, raises may be harder to come by. At worst, there could be an increasing number of pink slips.

As we reported last week, the scrutiny on one-week fantasy sports enterprises has intensified amid allegations of insider trading.

After New York Attorney General Eric Schneiderman announced he would investigate the two largest one-week fantasy enterprises, DraftKings and FanDuel, USA Today sports columnist Nate Scott predicted the scandal is “the beginning of the end” for one-week fantasy sports games, saying they're gambling that is legal only because of a loophole in the law. That loophole, he predicts, is about to be closed.

But the obituaries may be premature. AdWeek delved into the issue, since the new industry is spending record amounts of ad dollars. The publication says the experts it has consulted all agree – fantasy sports is already too big to fail.

Too big to fail

In other words, there is too much money at stake. No one is going to be willing to pull the plug on that.

"The problem is that everybody has a partnership with these companies; the media, the league, the teams – it's incredible," executive vice president/executive creative director Bob Dorfman of Baker Street Advertising, told AdWeek.

By Adweek's counting, there have been more than 60,000 network TV ads for these companies so far this year. It's hard to turn on the TV without seeing one – and the frequency has only increased with the kick-off of the NFL season.

Congressional attention

Now Congress is showing signs of getting involved. Sen. Bob Menendez (D-NJ) and Rep. Frank Pallone (D-NJ) have asked Federal Trade Commission (FTC) Chairwoman Edith Ramirez to explore and implement safeguards to ensure a fair playing field for fantasy sports enthusiasts who participate in daily or weekly games.

The two lawmakers point out they aren't advocating outlawing the wildly popular games, just trying to provide some regulation.

“We believe that fantasy sports should be legal and subject to appropriate consumer and competitive protections,” Menendez and Pallone wrote in a letter to the FTC Chairwoman. “Consumers also expect companies to hold online contests in a fair, transparent manner.”

Fantasy games are not considered gambling, and in fact are embraced and encouraged by professional sports leagues, because it has been determined they are games of skill, not chance. Participants choose actual players for their fantasy teams and get points – and huge potential payouts – when their team performs well.

But critics like USA Today's Scott see it differently.

“You give someone money, and based on outcomes outside your control, you can win more money,” Scott wrote. “That is gambling.”

A clinical trial is underway to determine whether a new drug that attacks beta amyloid in the brain could delay the onset of Alzheimer's disease.

If it can, scientists say it would be a breakthrough in the treatment of this disease that robs victims of their memory and ultimately causes death.

Beta amyloid is a protein that can form in the brain and previous research has suggested that when it builds up it plays a major role in the development of Alzheimer's.

The drug is a mono-clonal antibody called solanezumab, which targets excess amyloid in the brain. It is being given to subjects ages 65 to 85 who are deemed at risk for Alzheimer’s disease-related memory loss but who have not yet shown signs of the disease.

Treatment before symptoms appear

If successful, doctors might eventually use positron emission tomography (PET scans) to locate beta amyloid as it begins to form plaques in the brains of people with Alzheimer’s disease 10 to 20 years before they show any symptoms of the disease.

The idea is to remove that harmful protein from the brain before it can begin to build up. Researchers think it could delay memory loss by at least 10 years.

The trial is being carried out at the Nantz National Alzheimer Center at Houston Methodist Hospital.

The center was established with major financial support from NBC sportscaster Jim Nance and his wife Courtney, who have campaigned to increase funding for research and generate awareness of dementia and Alzheimer’s disease, as well as the possible effects that concussions and traumatic brain injuries have on these diseases.

“It is encouraging to be able to detect excess beta amyloid with PET technology in people predisposed to Alzheimer’s and then try to lower the amyloid levels with solanezumab,” said Dr. Joseph Masdeu, principal investigator of the study.

However, Masdeu says there appears to be a point in the development of Alzheimer’s where removing beta amyloid does not reverse or stop the disease progression because too much damage has been done. That's why it is crucial to identify patients early, before they begin to display symptoms.

Approximately 1,000 adults are expected to participate in more than 60 sites, besides the Nance Center, across the United States, Canada, and Australia.

IVIG shows promise

Meanwhile, in another trial, the blood product intravenous immunoglobulin, or IVIG, was found to reduce brain atrophy and cognitive decline in patients in the early, pre-dementia phase of Alzheimer’s disease.

IVIG is extracted from the plasma of more than 1,000 blood donors and contains antibodies to amyloid. Researchers at the Sutter Institute of Medical Research designed the study to see if a course of IVIG could be a practical way to reduce the effects of Alzheimer's when administered before a patient develops dementia.

Researchers say the study showed promising results during the first year after treatment in the form of reduced brain atrophy as well as reduced development of dementia.

“This research shows some evidence that IVIG could prevent brain atrophy and delay the onset of Alzheimer’s disease in patients who are in the beginning stages,” said Shawn Kile, M.D., Sutter Neuroscience Institute neurologist and principal investigator of the IVIG study. “My hope is that our study will lead to additional investigations of this treatment strategy so we can eventually conquer this devastating disease.”

The 2016 model-year vehicles are arriving at dealer showrooms around the U.S., some providing better value than others.

Kelley Blue Book (KBB) has sorted through the data – from prices to performance statistics – and has assembled a list of vehicles in every category it says represent the finalists in the 2016 Kelley Blue Book Best Buy Awards.

KBB said it narrowed down its lists by subjecting the new cars and trucks to head-to-head comparison testing and evaluation. The winners in each category and an overall winner will be announced in November.

Cream of the crop

The competition is designed to identify the cream of the crop of all available 2016 model-year vehicles. The finalist models are chosen on a set of criteria that identify overall vehicle quality and value, based both on proprietary KBB metrics and the evaluations of the KBB.com editorial staff.

Included in the evaluation are vehicle pricing/transaction prices, five-year cost-to-own data, which includes depreciation, insurance, maintenance, financing, fuel, fees and taxes for new cars, consumer reviews and ratings, and vehicle sales/retail sales information.

“At Kelley Blue Book, everything we do is designed to help car shoppers make smart decisions, and the Best Buy Awards program is the culmination of a wide variety of data and expert vehicle evaluation efforts throughout the company,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book’s KBB.com.

Toyota gets most nominations

A total of 49 vehicles ended up with a nomination. The nominees include 18 vehicle makes across 12 major vehicle categories. The top three vote-getters are Toyota, with eight nominations, Chevrolet with seven, and Honda with six.

In the highly competitive pick-up truck category, the finalists are the 2015 Chevrolet Colorado, 2016 Ford F-150, 2016 Nissan Titan, and 2016 Toyota Tacoma.

“While at the conclusion of the testing and evaluation period only 12 prestigious models will be deemed 2016 winners, it is a very high honor for a vehicle to be chosen as a finalist for these prominent awards,” Nerad said. “The automakers represented among this year’s finalists offer car buyers with top-notch vehicle choices.”

You'll find the complete list here.

The Defense Department has clipped the wings of once high-flying University of Phoenix as federal agencies investigate the for-profit school's recruiting tactics.

“No new or transfer students will be permitted to receive DoD tuition assistance at the University of Phoenix,” DoD Chief of Voluntary Eduction Dawn Bilodeau said in a statement. “The institution will not be authorized access to DoD installations for the purposes of participating in any recruitment-type activities, including but not limited to job training, and career events and fairs.”

Currently enrolled members of the military will be able to continue drawing on tuition assistance funds, Bilodeau said.

The DoD's action took Phoenix by surprise, according to its president, Tim Slottow. He said in a statement that the school has been cooperating with investigators and "expected a different response."

Besides its recruiting tactics, the university's course offerings have been under review by the Department of Education since last year. 

"Long overdue"

Veterans groups generally applauded the DoD's action but some said the government should do more. Iraq and Afghanistan Veterans of America said the Veterans Administration should restrict the amount of money payable to the University of Phoenix through the GI Bill.  

“This is good and long overdue news for veterans and active duty troops worldwide,” said Iraq and Afghanistan Veterans of America (IAVA) Founder and CEO Paul Rieckhoff. “IAVA members have been taken advantage of and manipulated by many for-profit 'schools,' but the University of Phoenix is constantly reported as the single worst by far.

"Too many of our members have been left by the University of Phoenix with their New GI Bill burned out, loads of debt and a degree they can’t use," Rieckhoff said. "IAVA applauds this long overdue move by the DoD to protect our troops, veterans and their families."

Rieckhoff said his organization has established a website, NewGIBill.org, that provides information and assistance to veterans. 

Sen. Dick Durbin (D-Ill.), who in July asked DoD and the Education Department to investigate the school, said the University of Phoenix "makes much of its money off of service members and veterans, including nearly $300 million from the DOD Tuition Assistance program and the VA’s GI Bill last year alone."

Durbin said University of Phoenix students owe more in cumulative student debt than any institution of higher education in America. He said the company is being investigated by at least three state Attorneys General, the Securities and Exchange Commission, the Department of Education Inspector General, and the Federal Trade Commission.

Banned from bases

Perhaps most damaging of all the investigations and allegations so far was this week's announcement by the Defense Department that it would bar the school from recruiting on military bases and would not grant tuition assistance to University of Phoenix students.

Among the issues raised by DoD investigators was University of Phoenix's use of "challenge coins" in recruiting servicemembers. The coins are traditionally exchanged by military members as a token of a job well done or to commemorate a notable event. The University of Phoenix allegedly used coins bearing trademarked military insignia. It says it has stopped doing so.

A June 2015 story by the Center for Investigative Reporting detailed the alleged recruiting violations in detail, including reports that the University of Phoenix had reaped more than $1 billion in taxpayer-funded Post-9/11 GI Bill benefits.

TF Supplements of Houston, Texas, is recalling RHINO 7 3000 capsules packaged in a bottle containing six capsules UPC: 616453150126 ALL LOT NUMBERS WITHIN EXPIRY, and Rhino 7 Platinum 3000 Capsules packaged in a single (1) blister packs hang card count UPC: 700729253748 ALL LOT NUMBERS WITHIN EXPIRY.

Lot numbers are on the back top right of the (1) count and on the side of the (6) count bottle.

The products contain undeclared desmethyl carbondenafil and dapoxetine.

Desmethyl carbondenafil is a phosphodiesterase PDE-5 inhibitor which is a class of drugs used to treat male erectile dysfunction, making these products unapproved new drugs. Dapoxetine is an active ingredient not approved by the Food and Drug Administration (FDA).

The company says it has received a report of one adverse event associated with these products to date.

These products are marketed as dietary supplements for sexual enhancement and packaged in (6) count bottle and count hanging card and distributed to consumers nationwide via the company website tfsupplements.com.

Customers are being notified of the recall by e-mail.

Consumers who purchased the recalled products should stop using them immediately and may return them to:

TF Supplements

6666 Gulf Freeway

Houston, TX 77087

The pressure is building on Volkswagen in the wake of the automaker's admission that it installed software in its “clean diesel” cars to pass mandated emissions tests, when the vehicles were actually operating at 40 times over the Environmental Protection Agency (EPA) standard.

Besides the legal and public relations disaster VW has on its hands, it faces another stern test. Somehow it has to “fix” the problem on the millions of cars that have the technology.

One would think that if the problem could have been easily fixed, the company would have done that in the first place, rather than take the enormous risk that cheating on the emissions test entailed.

Might not be that complicated

Actually, the fix might not be all that complicated, according to Ta-Jen Huang, a chemical engineering professor at National Tsing Hua University in Taiwan. Huang says replacing the Selective Catalytic Reduction (SCR) system on current VWs with what he describes as the Electro-Catalytic Honeycomb (ECH) system would solve the problem.

As we reported last week, the SCR system has significant drawbacks. This system uses a technology bearing the trade name “AdBlue” to convert diesel fuel's toxic NOx by-product into harmless nitrogen via various chemical reactions in a special SCR that has been optimized for NOx reduction.

According to Empa Laboratory of Automotive Powertrain Technologies director Christian Bach, SCR systems are considerably more complex than a conventional three-way catalytic converter in gasoline engines. AdBlue is carried in a separate tank in the car and needs to be topped off every now and again, usually while the vehicle is being serviced. The AdBlue dosage needs to be set precisely to the amount of NOx emitted by the engine.

If the dosage is too low, it doesn't reduce NOx emissions enough to meet the standard. Too high a dosage and the result is undesirable ammonia emissions. In short, diesel SCR systems can yield unpredictable results.

Zero emissions

Huang believes replacing the SCR system with the ECH system can treat diesel exhaust to zero emissions. But what does that do to fuel economy?

“The fuel economy with replacing the SCR with the ECH can be kept at least the same or even be increased,” Huang told ConsumerAffairs. “In fact, the electro-catalytic honeycomb (ECH) can maximize both the performance and the fuel economy, with possible zero air pollution, without consuming any resource.”

Huang provided a graphic showing how the ECH system works (shown above). He says it's an easy fix on cars equipped with existing SCR technology, only requiring the replacement of a section of the tail pipe.

”This only needs to replace the section of the SCR converter by the ECH, which is a honeycomb in a size similar to the SCR catalyst honeycomb,” Huang said. ”The consumer may not see any difference on this fix.”

If the fix is that simple, one has to wonder why it hasn't been adopted before. But Huang said he believes it is the answer, and that VW is well aware of it. He quotes engineers at VW Group as saying they believe the ECH system ”has big potential.”

The FBI has joined the discussion of the new EMV, or chip cards that are replacing credit and debit cards in the U.S.

“While EMV cards offer enhanced security, the FBI is warning law enforcement, merchants, and the general public that these cards can still be targeted by fraudsters,” the Bureau said in a public service announcement.

The EMV cards replace the traditional magnetic strip on the back with a small chip that holds encrypted data. It allows merchants to verify a card’s authenticity, providing the cardholder greater security and making the EMV card less vulnerable to hacking while the data is transmitted from the point of sale (PoS) to the issuing bank.

But the FBI says that may not be enough. It says EMV cards can be counterfeited using stolen card data obtained from the black market.

Prefers a PIN system

The FBI says the best defense is for consumers to use a PIN instead of a signature when making purchases.

“Merchants are encouraged to require consumers to enter their PIN for each transaction, in order to verify their identity,” the FBI said. “If a consumer uses a signature, merchants should ask to also see a government-issued photo identification card to verify the cardholder’s identity.”

This was music to retailers' ears, since they delivered an almost identical warning to Congress this week.

“What the FBI is saying is what the rest of the world already sees as common sense,” Mallory Duncan, National Retail Federation vice-president said. “It’s the right thing to do, and we hope the banks are listening.”

Leaving the back door open

Not using all of the card's potential security features, says Duncan, is like locking the front door but leaving the back door wide open.

“Retailers have long-argued that PINs are essential to providing cardholders with the security that they deserve,” said Brian Dodge, executive vice president of the Retail Industry Leaders Association (RILA), another retail industry trade group. “The FBI’s alert should be a wake-up call to the banks and card networks that continue to stand in the way of making PIN authentication the standard in the U.S. just as it has been around the world for years.”

The retailers complain that virtually all of the chip cards being issued in the United States are chip-and-signature rather than chip-and-PIN, leaving consumers without the option to use a PIN. By contrast, EMV cards used in 80 countries around the world for 20 years or more are routinely chip-and-PIN.

“They’re encouraging consumers to use PIN and they’re encouraging merchants to request PIN – the only thing missing is to encourage the banks to issue PIN cards,” Duncan said.

Consumers hoping to advance in a career are often attracted by for-profit institutions that, even though they can be expensive, admit anyone who applies. But not all these school can deliver on promises.

In North Carolina, state Attorney General Roy Cooper has obtained a court order temporarily halting operations at a private, for-profit career school that Cooper maintains charged students hundreds of dollars for unlicensed, unaccredited medical courses and put them to work without proper training.

On Thursday, Wake County, North Carolina Superior Court Judge G. Bryan Collins, Jr., granted Cooper’s request to temporarily bar North Carolina Medical Institute and its owner, Sherita McQueen, from advertising, offering, or accepting payment for any educational products or services in the state.

Cooper is asking the court for a permanent ban on NC Medical Institute’s operation and refunds for students.

Keeping an eye on career schools

“Students seeking training to upgrade their job skills deserve to get what they pay for, and patients deserve care from properly trained employees,” Cooper said. “If you notice a career school taking advantage of students, my office wants to hear about it.”

Cooper claims that the school could endanger patients in his state by certifying some students as qualified nursing aides after completing course work, which Cooper claims is far less training than required by law.

The complaint alleges that McQueen used a former employee’s nursing license and Social Security number to enter 50 unqualified Nursing Aide II students into the State Board of Nursing’s electronic registry, permitting them to get jobs.

License yanked

Back in May the North Carolina State Board of Proprietary Schools and the North Carolina State Board of Nursing refused to renew NC Medical Institute’s license. It previously determined that the school advertised and enrolled students in unlicensed courses, employed unapproved teaching instructors, and presented misleading information to the State Board of Community Colleges.

Cooper said it didn't stop there. He says after losing required licenses, McQueen misled prospective students by telling them that the courses offered by her school were accredited. He said NC Medical Institute continued to charge fees as high as $800 per course for unlicensed medical training programs, including pharmacy technician, medical assistant, and first aid courses.

After completing the classes, students often found themselves unprepared or ineligible for jobs in their fields of study.

Illegal practices

Cooper further alleges NC Medical Institute engaged in illegal practices while licensed. According to an affidavit filed by a North Carolina Board of Nursing employee, the school continued to offer a Nursing Aide II program despite repeatedly failing to meet state requirements.

While this might seem scary and discouraging for someone who hopes to advance in the medical field, Cooper says it shouldn't. Consumers just have to be careful.

“Enrolling in a vocational program can lead to a brighter future, but make sure the school you select is legitimate before you pay any money to enroll,” he said.

He suggests checking out your local or regional community college, where he says students are much more likely to receive quality training at a fair price.