Online Newsletter 
by Ed Meny  (Last updated on January 13, 2008)  Program reports and recaps below are in date order with the earliest at the beginning and the last meeting at the end.  Future programs, member birthdays, district rating and calendar of events, and news about new links and features added to this page and site are at the top of this page.


Programs & Events:

A HISTORY OF PROGRAMS WE HAVE HOSTED CAN BE FOUND ON THE MEMBERS & ASSIGNS PAGE!!!
Thanks to Darl Williams for putting it together!!!

 

IMMEDIATE CLUB BUSINESS!!!
THIS WILL BE THE PLACE FOR CURRENT ANNOUNCEMENTS AND MEMBER POSTINGS.  YOU WANT TO SAY SOMETHING, TELL YOUR FELLOW MEMBERS SOMETHING, GET YOUR POINT ACROSS OR LET YOUR COMMITTEE KNOW WHEN SOMETHING IS HAPPENING?  JUST LET ME KNOW, AND I WILL BE PLEASED TO POST IT HERE FOR YOU.

Member Birthdays

2008 Program Chairs:

Members!  
Please attend our meetings!!!!  Our programs have been excellent and interesting.  It really hurts our Club's reputation when speakers have just a few members to present to.  You can read about it here but there is no substitute for having lunch and fellowship with at your Kiwanis Club!  Put Tuesday, Noon to 1:00 PM on your schedule.  COME ON!

Key Clubs
Key Clubs are a very good thing.  Those of us who have been involved in an advisory role, have found the young members of our Key Clubs to be great ambassadors for Kiwanis and hopefully future Kiwanians at some point in their lives.  
Key Club allows the High School students involved to take leadership roles at their schools and involve themselves in organization and community service.  Key Club is a little bit of the outside world in a High School setting.  Given a chance, the Club becomes a very important part of the High School experience and a big contributor to the school.

April 8th Meeting:
President Longpre called the meeting to order, Rev. Cowall offered the Invocation and Dr. Klos led the singing.
Several Key Club members were introduced.  Lakeshore High and Benton Harbor High Key Clubs were represented.  
Kalamazoo Golden K Club visited.  
Dave Brown was welcomed back from the south and reported that our distant member Lou Pinderski is doing very well  Lou and Ida are living in the Carolinas. 
President Greg was our 50/50 Raffle winner.  
Program Chair, Ron Lyness introduced our speaker, Bertha King.  Bertha discussed diversity, stereotypes and diversity training. 
Bertha’s presentation was very interesting.  She used role playing and audience participation to make her points.  She discussed stereotypes and how we all see each other.  She pointed out that now, more than ever before, diversity is a part of nearly everything we do.  Political and social correctness are front and center.  Making employees who may be different in some way, (race, gender, age, nationality, sexual orientation, disabilities, etc.) is very important today.  The world demands that we understand one another.
Pick a workplace.  Whirlpool, Leco, GE, the National Basketball Association, professional baseball, agriculture, schools and universities, the airlines and nearly every other American business have diversity issues.  How we communicate with each other, see each other and our perceptions of one an other are vital to our every day. 
DIVERSITY:  1. The state or fact of being diverse; difference or variety.  2. A point of difference.  (Webster’s Dictionary, 1993 edition)
DIVERSITY:  The quality of being diverse or different; difference or variety.  (Taken from the on-line Wictionary – today)
Ok, what does “diversity” really mean?  This has been one of my pet peeves for some time.
I guess it really depends upon the context:
1.  To some, it means “multiculturalism”; meaning the ideology of including and co-existing with people of diverse cultural and religious backgrounds.
2.  In a political context it might mean the political and social policy of encouraging tolerance for people of different backgrounds.
3.  In a business context it might mean the business tactic which encourages diversity to better serve a heterogeneous customer base.
Frankly, diversity is a word that HAS had a very different meaning over the years.  In the United States of America , unfortunately and in my opinion, it is a word that hasn’t had a meaningful context for a very long time.  America is a country with “one language”, despite the fact that we have many different languages spoken by a very diverse and multicultural population.  America is a country with a significant population of people who prefer to be called “African American”, “Hispanic American” or “Asian American”.  Many people who resent being excluded from what might be termed main stream America , actually have self imposed much of the separation on themselves by the value they place on their “native” culture, language or background.
America began its life as the place where people came to escape intolerance and persecution, and many immigrants have had to fight like mad to make their way in American society.  Those who have had to fight the hardest seem to have become “more American”.  We have absorbed many immigrants.  The fact remains, however, that many of our immigrant groups have settled in pockets of America , and continue to live “largely” together as ethnic groups and separate as Americans.
The interior of the pedestal on our Statue of Liberty contains a bronze plaque inscribed with the poem "The New Colossus" by Emma Lazarus.  It reads:

Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
"Keep, ancient lands, your storied pomp!" cries she
With silent lips. "Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!"

Over the years Americans, those who have been absorbed successfully and have made a “successful” life for themselves in America, have taken great pride in the highlighted part of the above poem.
Today, however, we have issues with that part of the poem.  Those tired, poor, huddled wretched refuse masses are coming to America legally and illegally in ever greater numbers, and we cannot afford them anymore.  We have built our society on a kind of socialism.  Welfare, Medicaid and all of their brother and sister programs have made it less likely that immigrant groups and existing citizens in America will “endure a struggle to become a productive part of our country”.  
Now, in that context, we address diversity and Diversity Training.  
Diversity Training:  The process of educating employees, students or volunteers to function in a diverse environment.
Diversity Training, in my opinion again, isn’t intended only to teach people to tolerate other different people.  If it is applied for that reason only it will fail.  Diversity Training, again in my opinion, should not result in people troubled by the fact that there is a limit to how much they can rewire someone’s brain by “teaching them” to tolerate others.  Instead it should result in people viewing it as a happy confirmation that people are different.  As a society, school, club or employer we should be teaching new skills and new knowledge, we should be demanding more from the “huddled masses”, we should be helping them find and realize their talents and we should make being an American a challenge again.  In short, we should make America an exclusive club into which people want to belong.  Free, should not just mean “free ride”.  “Hey!  We welcome you to our country but you will have to work very hard to make it here!  Our social programs aren’t an incentive, so you will have to make it without them…at least to begin with.”  Again, in my opinion, this is the message we should have carved on the Statue of Liberty and one that we should have instilled in our existing citizens. 
Additionally, Americans should learn from each other.  Why do we speak one language?  Hey it is great to teach English in our schools as the primary language!  I would have it no other way.  And, I agree that everyone living in America should learn English as their primary language.  However, we should be teaching seriously, from pre-school on up, multiple languages.  How can we not do that?  Americans aren’t alone in the world!
When you really think about it America barged into globalization unprepared in many ways.  Our standard of living was much higher than the developing world.  Yet, we barged into globalization without giving thought to the impact it might have on our own standard of living.  Our schools were unprepared; and they had not prepared prior graduates to compete in an aggressive global economy.
Simply put, the race, gender, age, religion, sexual orientation, national background or socio-economic station of a person is insignificant in comparison to their desire, competence, vision, discipline, sense of responsibility, creativity, problem solving skills, level of education and work ethic.
Arguably, a person is usually successful and accepted if he or she contributes significant value.  The key to diversity is to open our eyes and our heart to people so we can recognize their talents and encourage their contributions.

February 26th Meeting
President Longpre called our meeting to order, Dr. Sisson offered the invocation and Dr. Klos led the singing.
Greg welcomed an Interclub from South Haven.  In fact, one of the South Haven members stood in as piano player.
Kevin VanAntwerp and Ron Lyness introduced Key Club members from the Lakeshore, St Joseph and Benton Harbor High School clubs.
Ron Lyness introduced his guest and a potential member, Shontelle Marsh. (If I didn't spell that right, I'm sorry). 
We all took a minute to express our sympathy to Mike Ryan and his family upon his dads passing.
There were a few happy bucks.  Dr. Dave Miller paid a buck for his recent engagement picture in the H.P.
Mark Miller paid for Vince Miller's birthday.  Mark told us that Vince had delayed his trip home from Florida thus missing his birthday and a party.  Wise move, Vince!
I was sitting at the same table with Dr. Gary Sisson.  When Greg announced the 50/50 raffle drawing, Gary said, over my shoulder, that he was going to win.  Well, he did!  Recently we have had a couple of winners who have taken the big pot.  As a result, Gary's prize was $4.00 and the "big pot" was $9.00.  Gary didn't draw the Ace and the pot finally rolls over.  
Dick Peterson introduced speaker Berrien County Treasurer, Brett Witkowski.
The principal functions of the County Treasurer's Office are to receive, maintain custody of, and disburse all county monies; maintain records of receipts and disbursements of monies from all County departments; collect and distribute to all county governmental units delinquent property taxes; manage the investment of monies of the County; prepare and manage the county's delinquent tax reversion process;  and sell dog licenses.
Brett, who also does a great job as a radio announcer for St. Joseph Bear Football, stressed that the County Treasurer does not prepare the County budget.  
Brett told us that Berrien County has gone to a "unified approach" to collecting property taxes.  Although 96% of County property owners pay their property taxes on time, the Treasurer has to spend a lot of time collecting the taxes of those 4% who do not.  
In 2007 470 businesses were visited in Berrien County for the purpose of collecting unpaid property taxes.  
Brett told us that property values have held up pretty well in Berrien County.  Compared to other areas of the state and country, Berrien County, because of the lake, its proximity to Chicago, Whirlpool and other fine companies has held up better.  There are some problems with over-building in Berrien County, but the problem is not as great in comparison.  
A problem that the County has been working very hard to address is the Homestead Property v. Non-Homestead property identification issue. 
In 1978, Michigan voters approved the "Headlee" tax limitation amendments to the Michigan Constitution of 1963 (Article IX, Sections 24 - 34). Article IX, Section 26 establishes an overall limitation on total state spending each fiscal year. The "Headlee" Amendment also creates two significant limitations on the fiscal relationship between state and local units of government.
Article IX, Section 29 prohibits the state from reducing its share of existing state-mandated programs and requires the state to reimburse local governmental units for any new state-mandated programs.
Article IX, Section 30 prohibits the state from reducing the proportion of total state spending paid to all units of local government as a group below the proportion in effect in fiscal year 1979.
In 1994 Michigan Voters passed Proposal A.  Proposal A made significant changes to the way education was funded in Michigan and to the way property taxes were calculated and paid.  Proposal A  put in place a 2-cent sales tax increase (increased sales tax from 4% to 6%) and generated revenue from several smaller sources (including a state property tax), to replace about two-thirds of the local school property tax. (Actually, school property taxes were reduced by only about 50 percent, because the proposal also instituted a 6-mill state education tax.) The state school tax on homestead property was set at 6% and that on non-homestead property at 18%.  Homestead property (dwellings) are defined as the primary residence of the property owner.  Seasonal dwellings or second homes are therefore non-homestead properties.  In many cases, because of the large disparity between the taxes charged on non-homestead properties and those defined as homestead properties, owners have attempted to "get by" by claiming that their seasonal homes are their primary dwelling.
Brett pointed out that in many cases property owners have claimed that three or more homes in different states are their primary homes.  This is costing Berrien County between $5 and $7 million dollars in lost revenues.  He has found that some people are registered voters in multiple states.  
Basically, the County has researched these cases carefully and finds out where the property owners file their taxes.  That is their primary home.  
The County has offered an amnesty program to property tax violators and many people have taken advantage of that.  
Berrien County also takes advantage of a Land Bank to rehab and repair some of the foreclosed homes when tax collection has not been successful.  Many of these homes were rentals and their owners put very little into them.  These homes, if they can be improved and occupied by actual owners, can add to the County tax base.

Credit Problems Hit Our Students!
The Kiwanis Club of St. Joseph sponsors the St. Joseph Kiwanis Foundation.  As most of you know, we award scholarships to graduates of our three local high schools, St Joseph , Lakeshore and Lake Michigan Catholic High Schools . 
I have discussed the so-called “credit crisis” in this newsletter.  With this installment, I would like to take the discussion a little further.
On Tuesday, February 12^th the MI-Loan, Michigan Higher Education Student Loan Authority, a state agency, announced on its web site that "due to the current and unprecedented capital-markets disruption" it will stop making loans under the state's Michigan Alternative Student Loan, or MI-Loan, program. More than 100 Michigan colleges and universities participate in the program.  MI-Loan is used by colleges and universities to supplement Federal student loans that might not cover tuition costs.  Currently, 316 Michigan State University students have MI-Loans totaling roughly $3,000,000, Western Michigan Students have another 220 totaling $2 million.  Of course other colleges and universities see the same basic totals.   At this point, students who currently have active loans in place will not be affected, but no new loans will be transacted and this is the time when students are out putting their financial packages together.  In 2007 $28,000,000 was borrowed in private student loan arrangements by students.  MI-Loans is one of many private student loan programs that is having serious problems because of credit market problems.    
This news is important for the students we assist of course.  Many of them make student loans an important part of their education funding plans.  Some will find it difficult to obtain a loan, some will have no luck at all and some will have to negotiate much higher interest rate loans.
So, what is going on?
There is a relatively small but important component of the credit market called Auction-Rate Securities.
Borrowers ranging from student-loan authorities to municipalities to big bond funds to large multi-national corporations depend on this market to raise money for making loans and funding projects. They do so by selling securities whose interest rates are reset every week as they change hands.  Auctions of these debt instruments are arranged by Wall Street investment firms such as Goldman Sachs Group Inc., UBS, Citigroup Inc. and J.P. Morgan Chase & Co.  What would ordinarily be a long-term debt for the borrower, becomes a very short-term and ordinarily liquid and safe investment for the buyers.  For instance, let’s say that Whirlpool wants to raise some money at a relatively low interest rate to provide extra corporate cash or liquidity.  Perhaps they want to buy a plant or hedge their steel costs by making a big purchase in advance of a likely price increase.  Issuing Auction-Rate Securities could have been done at a modest interest rate of say, 3.4%.  An investment firm or firms for a fee could auction this debt to anyone interested in a very open market.  The debt would turn over very quickly, every 30 days for instance.  Every 30 days holders of the Auction-Rate Securities would sell the securities to new buyers at the same or a different rate.  This was a pretty effective cash tool for both the borrower and the investors.  The investment was usually very safe and the securities insured by one of the major bond insurers.  Auction-Rate Securities often reset interest rates as often as every seven days.  They have been seen as very easily tradable long term (for a borrower and short term for the investor, debt instrument.
The fallout from the subprime-mortgage mess has forced hundreds of millions of dollars of write downs by Wall-Street and world banks.  Because of that, and the pressure these losses have put on the bond insurers and their ratings, liquidity has in many cases dried up.  In the past, if there was low demand or some problem that caused Auction-Rate Securities not to trade on schedule, the big banks and investment firms would keep their clients liquid by taking the securities onto their books for a short time.  With their balance sheets in tatters today, this isn’t happening.  Investors, big and small, are stuck holding onto Auction-Rate Securities that won’t sell.  Or will only sell as a distressed investment.
When the demand drops off, there is always someone with cash who will buy.  The problem is that the interest rate demanded is very high.  Municipalities, museums, hospitals and businesses that were paying 3.4% suddenly were forced to pay 15% for instance.  Since the instruments trade so often, the rates could bounce all over the place.  Some of the securities had an interest rate limit.  The interest rate could only go up a small percentage.  They suddenly weren't in demand at all.
This is a two edged sword in that both borrower and lender/investor are held hostage at the same time.
“Smaller investors” or individuals who might have hundreds of thousands to millions invested were impacted as well.  Many individual investors, afraid of the stock market volatility, “parked” their cash "temporarily" in what they felt was a safe, liquid, insured place paying a little higher rate than treasuries with a much shorter time frame and less interest rate risk.  All of a sudden the auctions started to fail.  There were no buyers.  Issuers aren't obligated to redeem the securities, meaning in many cases investors need to wait for the next round of auctions to try to resell in coming weeks, or the next, or the next.  Many of those investors needed the cash to pay their own debt or other obligations.   Mutual Funds also invested in Auction-Rate Securities and they were stuck as well.  Fund costs increased and interest rates increased.  Some could not pay dividends or cash out their investors.
In short, and I know this doesn’t appear short when you read it, borrowers and sellers are in a pickle and activities screech to a halt.
I mentioned Whirlpool earlier.  As far as I know, they aren’t having this problem.  I used them as an example of a corporation managing cash.  Bristol-Myers Squibb is a real-live story, however.  As reported in the Wall-Street Journal:  
Bristol-Myers Squibb Co. earlier this month recorded a $275 million charge, attributing it to the global credit crunch and its effects on the company's short-term investment portfolio. The company held some auction-rate securities tied to mortgage and corporate-bond debt.
The charge contributed to a net loss for Bristol-Myers in the fourth quarter and it is now seeking a new treasurer. The company's chief financial officer, Andrew Bonfield, told analysts in late January that the company was unable to unload some of its securities in the auction process.  Over time, many other corporations will come forward to admit their sins.
Getting back to the Michigan Higher Education Student Loan Authority.
They may be back in the business or loaning to students again.  Their web-site isn’t clear about their situation today.  I continue to think they are still turned off.  The Auction-Rate Securities problems haven’t gone away, however.  

February 19th Meeting
President Greg called the meeting to order, Gary Cowall offered the Invocation and Harvey led the singing.  
Mike Ryan was the 50/50 Raffle winner.
Program Chairperson, Dick Peterson introduced our speaker, Donna Southwell representing the Therapeutic Equestrian Center in Buchanan.
I don't know about you, but I never heard of the Therapeutic Equestrian Center!  The program was wonderful!!!  Very interesting.
The mission of the "TEC" is "to enhance the lives of people with special needs through horse-related activities."  
The Center makes a positive difference in the quality of life of participating riders and those who serve them though core values such as:  respect, cooperation, integrity, excellence, collaboration and innovation.  
Special needs riders gain improvement in both their physical and mental health including higher self-confidence, better balance, strength and improved emotional well-being.  Riders gain a feeling of belonging, of caring and a sense of responsibility and work ethic.  
It isn't just riding, there is great value in taking care of the horses, cleaning the stalls, working the farm and feeling that you are an important working part of something bigger.  
Participants come from all backgrounds, ages and have a wide variety of special needs.  
Scholarships are available based on financial need and nobody is turned away.  
The TEC is located on 20 acres at 11930 N. Red Bud Trail in Buchanan, south of Snow Rd and between Grange and Little Glendora Roads.
Visitors and volunteers are welcome.

February 12th 2008 Meeting
President Greg Longpre called our meeting to order, Dr. Gary Sisson offered the Invocation and Dr. Henry Klos led us in song.
Several Key Club members from Benton Harbor and St Joseph High Schools were introduced.  Sorry, I didn't get their names.
Club Secretary Dick Peterson gave us a recap of the board of directors meeting held Wednesday, February 6th.
Ron Lyness reminded members that the Key Clubs will be participating in a very important project.  Our member, Ron serves as the Michigan Key Club West Zone Advisor.  Below is a recap of Ron's press release:

On Tuesday, March 11, the Benton Harbor High School Key Club along with the Key Clubs at Lakeshore and St. Joseph High Schools , and their student bodies will host a packaging  for Kids Against Hunger.  Kids Against Hunger is a 501(C) non-profit corporation whose mission is to end hunger and hunger-related diseases in children around the world. 

If the Key Clubs meet their goal, on that date, over 450 students will come together at the Mendel Center at Lake Michigan College to package over 60,000 meals.  These meals are a combination of soy powder, rice and essential minerals that when combined with 6 quarts of water make a nutritious meal for 6, at the cost of less than $1 per package.  These meals are then sent around the world to help solve hunger and starvation problems.  Many of the packages are  delivered to food banks and pantries locally.

To meet this goal, the Key Clubs of Southwest Michigan are seeking sponsorships.  For $250, companies and organizations will be listed on the back of the t-shirts provided to all participants in the packaging.  For $1000, companies and organizations will be listed on the packaging banner flown at the packaging.  We are seeking to raise at least $18,000 to make this dream a reality.

To make a sponsorship, please call Ron Lyness at (269) 605-1246.

I'm sure that Ron will revisit Kids Against Hunger with us again prior to March 11th so our members will have opportunities to help.

We were all disappointed to learn from Greg that our Board received letters of resignation from three members:  Joe Moore, Pat Miller and Jon Sleder.  We are certainly sorry that we have lost these members and wish them the best.

Our 50/50 raffle winner was Gary Cowall.  Gary took home both prizes.

Harvey Johnson announced that the annual Cub trip will take place on Thursday, June 26th.  The Cubs will host Baltimore. 
 
John Festa introduced our speaker, Lisa Langley representing the Michigan Eye-Bank.  John's introduction was a really interesting one.  Several years ago, John had an infection in one of his eyes.  The infection was serious and did substantial damage to the cornea in John's eye.  Eventually John lost his sight in that eye.  John was lucky in that he was treated by an eye doctor who specialized in corneal transplants.  John received a transplant and his sight was restored.  Although he experienced some serious complications and his body attempted to reject the transplanted cornea, John was able to take, and continues to take, anti-rejection drugs that allow his eye to continue working properly.
Lisa talked to us about the Michigan Eye-Bank in particular, and the Michigan Organ Donor Registry of which the Eye-Bank is a participant.  Right off the bat, Lisa pointed out something that I wasn't aware of.  She pointed out that the way people in Michigan can express their wish to donate organs has changed.  I have always made that designation on the back of my drivers license by filling out a sticker and placing it there.  Today, donors must fill out a card and send it to Gift of Life Michigan.  In return, the donor will receive a little red heart sticker in the mail.  That little red heart is put on the drivers license to indicate the donor's intent.  
The Michigan Organ Donor Registry is a confidential 24-hour a day, computerized database that documents our wishes to become organ tissue and eye donors.  
Lisa told us that corneas are special organs and a bit different than others.  Corneas can be stored up to thirteen days.  They are Avascular (without blood vessels) organs and as such do not have to match blood type.  So, a cornea from one person should transplant successfully into another with few problems.  Obviously, John's difficulty is an exception to that rule.
Lisa told us that there were ten donations and ten transplants of corneas in Berrien County in 2007.

Some interesting things are happening in the USA and around the world.  This morning I read that Kosovo declared its independence from Serbia on Sunday, February 17th.  Why is this interesting to the members of the Kiwanis Club of St. Joseph.  Well, our good friend and great member Clare Musgrove spent some time in that area of the world during World War II.  Clare was one of hundreds of American airmen shot down in Nazi-occupied Yugoslavia during a bombing raid on Romanian oil fields and refineries.  Clare has talked to us about Operation Halyard in 1944.  His rescue is written about in a recent book titled The Forgotten 500 by Gregory Freeman.  If you haven't read it, get it and give it a read.  
Below is a link to the story in the New York Times this morning.  Kosovo Declares Its Independence From Serbia.  Clare's experience being invited back to be honored by the people there was interesting.  He told us that there was much political controversy involved and surrounding his two visits.  Well, the story about Kosovo's declaration of independence is all about the history behind all of that.  I'll tell you, the map of eastern Europe has changed many times and the breakup of the old Soviet Union has resulted in even more confusion.  The Balkans is a largely Muslim area, and we (America) aren't loved in very many places there.  Unemployment runs 60% and life hasn't been easy for the people living there.  The Soviets held things together by force.

http://www.nytimes.com/2008/02/18/world/europe/18kosovo.html?th&emc=th/

I'm not sure if the above will work as a link.  If it doesn't, copy and paste it into your browser and it should take you to the article.  It is interesting.

Recently, there has been some discussion about American's lack of world geography knowledge.  Evidently, Kelly Pickler (Ms. Pickler was an American Idol contestant several years ago and a Country and Western singer these days) appeared on the TV show, Do You Think You Are Smarter Than A Fifth Grader?  I think that is the name of the show anyway.  She was asked: “Budapest is the capital of what European country?”.  Ms. Pickler threw up both hands and looked at the large blackboard perplexed. “I thought Europe was a country,” she said. Playing it safe, she chose to copy the answer offered by one of the genuine fifth graders: Hungary. “Hungry?” she said, eyes widening in disbelief. “That’s a country? I’ve heard of Turkey. But Hungry? I’ve never heard of it.” 
I read that, and thought about my own knowledge of world geography and even USA geography.  Certainly, I was confident that Kelly Pickler and I weren't on the same level...me being much higher of course.  But I wondered....what would my answer be to questions about geography.  Well, I went on-line and found an interesting and fun web-site that presents geography quizes.  It was an eye opener for me.  Give it a try, smarty-pants!  Click the link below, or paste it into your browser.  

http://www.lizardpoint.com/fun/geoquiz/

Again, in the New York Times I read of an author, Susan Jacoby, who has written a book, The Age of American Unreason.  Ms. Jacoby and many other authors are writing and talking about the lack of knowledge and education in America.  TV, video games, computers, I-pods..you name it, all pull Americans away from learning.   Many people believe, and I am one of them, that American schools, because of No Child Left Behind and other government programs, are teaching our young people to pass tests associated with those programs, rather than teaching them about the world around them.  I was lucky in the 1960's to have Ms. Dorothy Derkats as my Geography teacher in high school.  Dorothy ruled with an iron fist and I did learn about the world.  A link to the article I refer to is below.  

http://www.nytimes.com/2008/02/14/books/14dumb.html?ex=1203829200&en=a1ef0bd99366a9be&ei=5070&emc=eta1

I hope these articles and thoughts interest you. Today, splitting large under-performing schools into smaller schools is the new idea for public education.  The concern some have with this idea is connected to these very articles.  Hey, it matters what you teach kids as much as it does how you teach them!

See you Tuesday!

February 5, 2008 Meeting
Greg Longpre called the meeting to order.  John Helsley offered the Invocation and Harvey Johnson led the singing.
Ken McKeown was our 50/50 raffle winner.  Ken won the $5.00 prize but didn't draw the Ace and the $17 big pot rolled over.
Ron Lyness introduced Benton Harbor Key Club members Christine Carter and Tiara Banks.  Christine and Tiara announced that the Benton Harbor Key Club is sponsoring a blood drive next Wednesday at Benton Harbor High School.  That is Wednesday, February 13th.  If you have questions about the times, or making arrangements to donate blood, please call Ron Lyness at 269-605-1246.
State Representative John Proos was also our guest.  John provided a brief report on the doings in Lansing these days.  John told us that the FY 2008 budget seems set and that there will be a little money.  There is a small surplus projected.  John thinks the legislature should put all or part of it away for a rainy day.  As you can imagine, the Michigan legislature has a burning feeling in their collective pockets.  
Dick Peterson introduced our speaker, Mary Jane Johnson representing Starks & Menchinger funeral homes.  Mary Jane talked to us about pre-planning or pre arranging funerals.  Pre-planning provides some real values for people.  Of course, pre-planning lets your wishes be clearly known.  Pre-planning would also prevent emotional over-spending out of grief or guilt.  It can be very helpful in easing the financial burden and there are several creative ways funding can be arranged.  Bottom line, for some people the peace of mind is what makes them most receptive to the idea.
Mary Jane told us several interesting stories and did a nice job introducing the subject.
I can't resist, in the heart of the national primary season when politics are on the mind, at a time when recession has been called and the financial sector of our economy is struggling, to remind you of my previous ranting about the credit crises and put some historical perspective on the matters at hand.  
Although there aren't many of us who remember first hand the 1929 stock market crash and great depression that followed, most of us do remember our parents talking about it.  Most of our parents and grandparents were a bit tighter with their money because of their memories.  The 1929 crash was 79 years ago.  Memories are much shorter than that.   Most economists agree that the crash and the great depression resulted directly from wild speculation.  John Galbraith said in his study of the event, The Great Crash, that behind that speculation was the fact that the US economy was fundamentally unsound.  He pointed to very unhealthy corporate and banking structures, an unsound foreign trade, much economic misinformation, and the "bad distribution of income".  The highest 5% of the population in those days received about 1/3 of all personal income.  And the gap in living standards between the top 5% and the rest of the population was very wide.  The capitalist system was driven by one overriding motive of corporate profits and therefore unstable, unpredictable, and blind to human needs.  The result was permanent depression for most of the people and periodic crises for almost everyone else.  
After the 1929 crash, the US economy was stunned and dead in the water.  Over five thousand banks closed and huge numbers of businesses, unable to get money, closed too.  Those that continued laid off employees and cut wages.  By 1933 industrial production was cut in half and one third of the labor force was out of work.  Calvin Coolidge, evidently the George W. Bush of his day, was quoted as saying: "When more and more people are thrown out of work, unemployment results".  That must have been very comforting to the unemployed of the day.  Henry Ford said in March, 1931 that the crisis was here because "the average man won't really do a days work unless he is caught and cannot get out of it.  There is plenty of work to do if people would do it."  A few weeks later he laid off 75,000.
I hope that, as we approach the elections, all of us keep some of the historical similarities in mind.  Today, there is rampant speculation that whips the US and world markets day-to-day.  The gap between the haves and the have-nots is wider every day.  Thousands of workers have been laid off or let go because jobs have left the country and businesses have cut.  Corporate profits have to be double digit or the stock price of a company falls significantly.  Investors are more likely to take short positions in the stock market than invest for the success of companies.  Rating agencies are making up the rules as they go along.  Wages are being cut every day.  We don't manufacture nearly as much as we did in this country.  The Federal Reserve is overly involved in a tinkering process that seems too closely tied to stock market activity and speculation.  People aren't saving and they aren't spending either.  Many people have been living off the equity in their home and their over-extended credit cards.  Elderly people and people on fixed incomes can't find a decent safe return.  Most are earning less than the rate of inflation on their investments.  Those, forced to look to mutual funds and stock market investments are subjected to a whip saw roller coaster ride.  The government's answer seems to be to cut interest rates even further.  That is inflationary and continues to push the dollar lower and national debt higher.  What costs less these days???  Food, gas, clothing?  Oh, homes do.  In many parts of the country homes cost less.
George W. Bush and many of the financial experts tell us that our economy is fundamentally sound.  Most US companies make no bones about having more confidence in their investments outside the US.  
Fundamentally sound has different meanings to different people.
The American economy is in recession and probably has been for many months.   
I hope we all vote with our brains this election.

January 29, 2008 Meeting
Our meeting was called to order by Greg Longpre.  
Henry Klos offered the Invocation and Harvey Johnson led the singing.
There were no member birthdays.
There were several Key Club guests introduced.  There were two members of the Benton Harbor High Key Club and three from St Joseph High.
Greg announced that there will be a board meeting Wednesday February 6th at Noon.  The meeting will take place at the St Joe Elks.
Ed Meny was the 50/50 raffle winner.  Ed took home $6.00 but did not draw the Ace.  There are ten cards left.
Our speaker was Kelly Matti from Junior Achievement.  
Kelly told us that our Junior Achievement chapter serves a five county area that includes SW Michigan.  There are 145 JA offices in the United States, one of them here in St Joseph.
Junior Achievement has changed over the years.  JA began in 1919.   Today JA provides K thru 12th grade programs and services.  JA used to be an after school program.  Today, with all the other things going on in the lives of our young people, JA has found its way into the classroom.   
Junior Achievement provides a program consisting of six sequential themes at the elementary, middle school and High School levels.  
Students are provided an introduction into personal and business finance and economics.  
Volunteers have an opportunity to pass some of their expertise and experience to the kids.
The schools are provided a curriculum with a real-world perspective.
Businesses that participate contribute to a better educated student and a potential well-educated employee later. 

January 22nd, 2008 Meeting
President Longpre called the meeting to order.  John Helsley offered the Invocation and, without a pianist because of the weather, we did not sing.
The 50/50 Raffle was just getting started again after Bob Nagle's big win the week prior.  The prize was $6.00 and the winner, Glenn Youngstedt.
We welcomed two speakers.  From St. Joseph High School, Athletic Director Kevin Guzzo.  From Lakeshore High School, Athletic Director Jim Sanford.  Kevin and Jim discussed the new season format that kicked off this year following the MHSAA's equity suit setback last year.  After a nine-year series of appeals, the US Supreme Court finally ruled that it would not hear the MHSAA's appeal.  That forced Lower Penensula  athletic seasons to change for six sports.
The 2007-08 school year is the first under a compliance plan created after Communities for Equity, a Grand Rapids-based parents group led by Saginaw native Jay Roberts-Eveland, won its case in district court in 2001. The court ruled that the Michigan High School Athletic Association violated the Equal Protection Clause of the 14th Amendment, Title IX and the Michigan civil rights law.
After appeals to the Sixth Circuit Court of Appeals and the Supreme Court, the case eventually ended on April 2, 2007, when the Supreme Court refused to hear a final appeal from the Michigan high school association (MHSSA).

Our January 15, 2008 meeting was called to order by President Greg Longpre .
Dick Peterson gave a report on the Board meeting held Wednesday, January 9^th. 
John Festa asked that all members keep Joe Moore in their prayers.  Joe is ill and we all are pulling for him.
Bob Nagle was the 50/50 raffle winning ticket holder.  Bob won the $7 small pot, drew the Ace and took home another $35 in addition to the $7.
Mike Ryan introduced our speaker, John Wallace from Carter-Wallace Mortgage.  John’s presentation was intended to explain the Sub-Prime Mortgage Crisis.
John’s presentation was more anecdotal in nature than explanatory. John told us several stories about examples of abuse and hanky-panky by mortgage originators and banks.  He explained the changes that he has seen in the market.  He told us that our area is one of the least impacted by the problem.  He explained that our home values are stable.   
How do you describe or explain the so called Sub-Prime Mortgage Crisis anyway?
John’s focus was on the procedural wrong-doing.  Incorrect or doctored appraisals of the correct properties and appraisals made on the wrong properties were some examples.  Invalid valuations and misinformation regarding condition and size of homes were other examples.  High fees and shady dealings by mortgage companies featuring bait and switch tactics were additional factors sited.  The very purpose of a Sub-Prime mortgage was distorted.  Where Sub-Prime lending should have addressed problems that the borrower might be having, and provide assistance to the borrower to help he or she get out of trouble, much of what was going on did just the opposite.  Many people were lured into bad deals that resulted in more trouble for them rather than less.  High fees and adjustable rate mortgages added unnecessary costs that were predatory.
The people loaning and borrowing the money were only part of the problem, however.
The current subprime mortgage crisis, an unusually large fraction of subprime mortgages originated being delinquent or in foreclosure only months later, has spurred massive media attention.  Many different causes and implications have been suggested and reported.
As America's mortgage markets began unraveling in 2007, analysts seeking explanations pointed to subprime mortgages issued to low-income, minority and urban borrowers.  But an analysis of more than 130 million home loans made over the past decade reveals that risky mortgages were made in nearly every corner of the nation.  Small towns, inner cities and affluent suburbs were all areas where shaky loans were originated.  
The Wall Street Journal reported that from 2004 to 2006, when home prices peaked in many parts of the country, more than 2,500 banks, thrifts, credit unions and mortgage companies made a combined $1.5 TRILLION in high-interest-rate loans.  Most subprime loans, which are extended to borrowers with sketchy credit or stretched finances, fall into this category.  High rate loans accounted for 29% of the total number of home loans originated in 2006/7, up from 16% in 2004.  Arguably, this surge in sub-prime lending was, in part, a sign that our national economy was heading toward recession or greater problems.  A high rate of such lending rose sharply in middle-class and affluent communities.  
Banks and other mortgage lenders have long charged higher rates to borrowers considered high risk, either because of their credit histories or their small down payments.  As home prices accelerated across the country of the past decade, more affluent families turned to high-rate loans to buy expensive homes they could not have qualified for under conventional lending standards.  An aggressive home-mortgage industry and builders speculating and over-building, made every effort, ethical and otherwise, to get people into homes they could not afford at a time when home prices were very high.
The Wall Street Journal reported this example:
"Last September, Darla Ball, a printer and copier saleswoman, purchased a $460,000 home in Las Vegas using an adjustable-rate subprime loan with an initial rate of 8.2%.  At the time, she says, she expected to refinance before her interest rate resets to 14% next year, which will raise her monthly payments to $8,000 from $3,700.  But in the past year, she says, prices of comparable homes in her subdivision have fallen to $310,000, which means that she would not qualify for a new $460,000 mortgage unless home values go back up.  That is not likely to happen.  In the Detroit area 32% of all loan volume is high-rate.  It isn't unusual for 20%-30% drops in median sales prices for existing and new homes in some areas of the country.  
High-rate loan data is likely understated because of relaxation of credit standards and the peril posed by mortgages with low teaser rates.  Some subprime teaser loans do not show up as having high rates.  
Many people in this country have been using their homes as their only savings account.  In general, homes have been appreciating in value in the United States .  In some areas of the country the increases in home values has been very rapid and over-blown.  This has been called “the housing bubble”.  There have been many variations.  Many people borrowed against the increased value of their homes and used sub-prime mortgages with low initial teaser rates to do so.  Every increase in the market value of their homes triggered a refinance or  an additional draw on home equity line of credit.  Some lines were in excess of 100% of the homes value.  And, the determination of the value of the home was often inflated by borrower, lender or both.  Home owners were also encouraged to refinance their mortgage to take advantage of lower interest rates.  Many of those people did refinance, increased their mortgage amounts well above the home’s value and bought into adjustable rate or interest only mortgages.  Many of these adjustable rate mortgages featured a built in balloon date, at which time the interest rate would increase substantially. 
As long as the values of homes continued to increase these folks thought they were OK.  They just kept doing deals and increasing their level of debt.
Lenders also extended more "second-lein" mortgages, many of them "piggyback" second loans that borrowers used to cover their down payments.  
In 2006/07 real-estate investors speculated on homes in large numbers.  13% of all high-rate home loans were for properties not occupied by owners.  Speculator financed properties are a higher foreclosure risk than homes lived in by their owners.  Vacant and unoccupied homes are more likely to be abandoned, stripped and left valueless.  The inventory of unsold homes has soared, and some investors who had hoped to flip houses at a profit have walked away from sales contracts for purchases they don't want anymore or can't afford.  
When the housing bubble burst in 2006-2007 these same borrowers were unable to continue to sustain the high level of debt, high interest rate adjustments and their homes lost value faster than anyone had anticipated.  Suddenly their source of what seemed to be unlimited money dried up.
For many years banks have packaged and sold loans.  Many continued to service the loans for a fee, but the risk was transferred by putting many loans together into a Mortgage Backed Security that was backed by a Government Sponsored Enterprise and thus guaranteed.  Investments in Mortgage Backed Securities and Government Sponsored Enterprises were like investing in bonds.  The return on investment was competitive with bonds and the investment was safe.
The problems began when private label Mortgage Backed Securities began to be sold.  These were not government sponsored and there was no guarantee whatsoever provided the investors.  The higher risk brought with it a higher rate of return for investors.  Rates of 14% and higher were paid and these private Mortgage Backed Securities became very popular.
Many of the private Mortgage Backed Securities were comprised of sub-prime and balloon-type mortgages.  There was such a demand for these investments and the returns were so great that major banks in the United States and elsewhere loaded up on these private Mortgage Backed Securities.   Everyone was thrilled with the mark to the market of these securities.  Their value was believed to be equal to the mortgage amounts contained in them.  Rates of return reflected the high interest rates and fees charged the borrowers.  The security of the investments wasn’t questioned.  The actual market to book value of the investments, on the other hand, was unknown or questionable.  As the quality of the underlying mortgages and equity loans deteriorated and the housing bubble burst, so did the actual market to book value of the investment. 
Citibank’s experience is a very good example of what has happened.  Citi has had to mark down their investment portfolio in Mortgage Backed Securities and similar investments by approximately 20 billion dollars.  UBS, Merrill and many other companies and banks have had to take similar markdowns.  In order to stay financially viable, Citi and other companies have had to look for capitol from China , the Middle East and have had to virtually sell themselves.  You have to wonder what these bankers were thinking???  Not only were they making bad loans, they were buying them back as well.
This thing is far from over.  Banks and investment firms were not the only investors.  Many people looking for higher rates of return, sovereign wealth funds, mutual funds, pension funds, insurance companies, labor unions, major corporations and money market funds probably own private mortgage backed securities or have investments in the stock of companies that do.  And I’m sure that private mortgage backed securities have been bundled to securitize other investments as well.
Of course not all of the mortgages are bad.  Some of them will be adjusted to keep them from going bad.  Some of the rate increases will be curtailed or negotiated.  The fact remains, however, that the eventual fixes or adjustments will reduce the income and return on the original investments.
Because the availability of credit has been curtailed home and commercial real estate values continue to fall.  This will cause additional foreclosures as time passes.  It is a complicated long-term mess.
You probably were asking yourself several paragraphs ago:  “Where is he going with this and why?”  I don’t blame you for wondering.
I have written the above because I am angry.  I personally feel that the Federal Reserve is partially responsible for what has happened.  The economy doesn’t require the tinkering it is getting in my opinion.  Lowering and raising interest rates to solve short-term problems doesn’t make any sense to me.  In fact, these actions cause more problems than they solve.  In the case of the housing bubble and the sub-prime mess, I feel that the very low interest rates contributed to the conditions that led to speculation, profited a few, and hurt many others. 
Henry Hazlett wrote in Economics In One Lesson: 
“In addition to these endless pleadings of self-interest, there is a second main factor that spawns new economic fallacies every day.  This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.  It is the fallacy of overlooking secondary consequences.
In this lies the whole difference between good economics and bad.  The bad economist sees only what immediately strikes the eye; the good economist also looks beyond.  The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences.  The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.”
I believe that the Fed contributed substantially to the problem by lowering interest rates during the period of time from 2001 to 2007 to stimulate the economy.  That contributed to an environment that encouraged speculation, dishonesty and outright fraud on several levels. 
Loan to value ratios became a problem.  Borrowers were able to borrow far more than their homes were worth.  The combination of a large increase in credit availability, easier financing,  (loosening underwriting standards in terms of, for example, loan to value requirements, improper information, falsification of income and employment status), lowering price, and deteriorating loan performance resembles a classic lending boom-bust scenario, in which unsustainable growth leads to the collapse of the market. 

January 8, 2008 Program recap:
Our own Dick Peterson gave a presentation entitled TAXES FOR 2007 AND BEYOND.
Dick discussed the Standard Deductions, Personal Exemptions, Mileage Rates, Medical Deductions, Contributions and penalties that we have grown so fond of over the years.
Dick also touched on Wraparound Mortgages as only Dick can do.  
Tax preparers and tax firms were discussed.  Dick suggested that you pick a good ethical preparer and a firm that is likely to do the work locally.  
The good old Alternative Minimum Tax was discussed.  Dick pointed out that Congress took it's time getting around to acting on the "AMT" and other important time-critical tax-related issues. Congress took it's time getting around to acting...period.   As a result some of  the forms required to complete your taxes will be available late for many taxpayers.  This will hold up refunds where applicable and mess with our minds in general.
What's important for the modern taxpayer?  Dick told us to be proactive and plan ahead.  Keep good records-where you can find them-and make sure that any deduction claimed can be substantiated with some formal documentation.  Always tell your tax preparer everything (he or she actually asks you about) and be truthful.  A deduction you might have in a dream, might not translate into something the IRS will buy.  
Will you get audited?  Hope not.  In 2008, the IRS is going to audit approximately 13,000 random returns out of roughly 136 million 2007 returns.  You will notice the use of the words approximately, random and roughly.  These are government words.  These are words that have the same meaning as Market to Book and Mark to the Market have to Citi-Bank, UBS, Morgan Stanley and Countrywide these days.  
Anyway, make sure that you don't attend an audit meeting alone.  And Dick didn't mean attending with your friend from the IRS.  Don't count him or her.  Attend with your tax guy or gal.  Don't attend with your wife or husband unless you have told him or her that you made some things up.  Make sure that you have an advisor advise you on your answers.  And never, ever volunteer anything unless you are asked about it.  The IRS agent will make every attempt to be your chum.  Just be his or her silent partner for however long that might take.
Hey!  Attend meetings regularly!  Its important! 

CHRISTMAS PROGRAMS TO REMEMBER!!!!
Our Club was fortunate to have two Christmas programs this year.  Ron Lyness came to the rescue on December 4th when one of our scheduled programs cancelled.  We were very lucky to be able to welcome the Benton Harbor High School Concert Choir to our meeting.  Their program was grand and everyone really enjoyed the very talented students from BHHS.  Please click on the thumbnail below.  Click your "Back" button to return to this page.
 
On December 18th we welcomed one of the Lakeshore High School choral groups for a scheduled performance.  Again, the students represented their school magnificently and members and spouses had a great time.  The thumbnail below will enlarge the photo taken by Ken McKeown.  Again, click your back button to return to this page.


Come to the meetings!  Fellowship and entertainment abound!!!