Amyloid-beta is a thinking brain’s protein. A new study involving people with severe brain injuries shows that as neuronal activity increases, levels of amyloid-beta in the brain also go up.
Louis J. Sheehan, Esquire A-beta, as the protein is sometimes called, is best known for causing plaques in the brains of people with Alzheimer’s disease. It is a normal component of the brain, but scientists don’t know what it does.
Traumatic brain injuries increase the risk for Alzheimer’s disease. So to find out if brain injuries cause a spike in amyloid-beta levels that could lead to plaque formation, a team of researchers from Milan, Italy, and Washington University in St. Louis sampled fluid from the brains of 18 comatose patients. http://LOUIS-J-SHEEHAN.US
The researchers inserted devices in the patients’ brains to monitor pressure. A small catheter sipped up fluid that gathers between brain cells, and then the researchers tested the fluid for A-beta.
What the researchers found was exactly the opposite of what they expected, says David L. Brody, a neurologist at Washington University who led the study with Sandra Magnoni of the Ospedale Maggiore in Milan. Instead of seeing a spike of A-beta soon after brain injury from falls, car accidents, assaults or hemorrhages, levels of the protein started low and rose as the patients improved, the team reports in the Aug. 29 Science.
“This is a fantastic study using an extraordinarily powerful technique to study human physiology and pathophysiology,” says Bradley Hyman, director of the Alzheimer’s Disease Research Center at Massachusetts General Hospital and Harvard Medical School in Boston. “While the implications for a ‘normal’ function of A-beta are intriguing, it is still not completely clear whether the data reflect an active role for A-beta or simply establish that it is a marker for neuronal activity. Sorting this out will be fascinating.”
The results are consistent with previous studies in mice that show that A-beta is a byproduct of brain cell activity, and with studies in people that show the areas of the brain that are most active are the most prone to developing Alzheimer’s plaques, says John Cirrito, a neuroscientist at Washington University who established the link between brain cell activity and A-beta in mice but was not involved in the new study. A-beta may become a tool for monitoring brain activity in comatose patients, Cirrito suggests.
But the findings seem to contrast with preliminary results from a similar study in Sweden. Neurologist Lars Hillered at Uppsala University Hospital sampled brain fluid from eight comatose patients and found that people with diffuse brain injuries had higher levels of amyloid-beta in their brains.
“It could be that we’re onto something similar,” Hillered says. Electrical activity in brain cells and damage to cells may both raise levels of A-beta, he says.
Fluid taken by spinal tap doesn’t show the link between A-beta levels and brain activity. That is probably because the brain fluid the researchers sampled for the study came directly from the space between brain cells, while cerebral spinal fluid contains proteins filtered from blood as well as from the brain, Brody says.
Researchers still don’t know why brain injury puts people at higher risk for Alzheimer’s disease or what the protein’s normal job is in the brain.
“This study raises more questions than it answers,” Brody says. “It’s really just the beginning.”
Tuesday, May 5, 2009
Friday, May 1, 2009
time 0.tim.332187 Louis J. Sheehan, Esquire
Louis J. Sheehan, Esquire For the first time, a complete cancer genome, and incidentally a complete female genome, has been decoded, scientists report online Nov. 5 in Nature. In a study made possible by faster, cheaper and more sensitive methods for sequencing DNA, the researchers pinpoint eight new genes that may cause a cell to turn cancerous.
“Since cancer is a disease of the genome, this newfound ability to determine the complete DNA sequence of a cancer cell is enormously powerful,” comments Francis Collins, a geneticist and former director of the National Human Genome Research Institute in Bethesda, Md., a group that raced to sequence the first entire human genome. http://Louis-J-Sheehan.biz
“We need to know the genetic rules of cancer,” says coauthor Timothy Ley of Washington University in St. Louis. Ley and colleagues read each of the 3 billion building blocks of DNA from tumor cells in a woman with acute myeloid leukemia, or AML, a highly malignant form of blood and bone marrow cancer. Then the team compared the long string of code with one taken from noncancerous skin cells from the same woman.
This new sequencing technology, called massively parallel sequencing, makes it possible to compare the normal DNA sequence to the cancerous DNA sequence in the same patient. That, in turn, allows researchers to find individual DNA bases — the needles in a haystack of 3 billion pieces of straw — that had mutated in the cancerous cells.
Kevin Shannon, director of the Medical Scientist Training Program at the University of California, San Francisco, studies the genes that may lead to leukemia and calls this work “a major achievement,” one that is “remarkable for its rigor and precision.”
None of the researchers knew what to expect for the number of mutated genes in the cancerous cells. “We were flying blind,” says Ley. But after rigorously pruning the data to keep only the most significant mutations, the researchers identified 10 mutations, eight of which were in genes never before implicated in AML. Of these eight new mutations, none were found to be mutated in tumors from other, smaller-scale studies, suggesting that individual AML cases are distinct.
It may be that the disease is so specific doctors will need to sequence each individual with AML to determine the best course of treatment, says coauthor Elaine Mardis, also of Washington University.
At the same time, because those earlier studies did not sequence the entire genome, and because this new study had a sample size of only one patient, it is too early to tell if AML has different kinds of mutations in different patients.
So, equally possible is that common mutations in similar groups of genes may contribute to AML. Discovery of these gene networks could allow doctors to use these common pathways of disease to treat patients similarly.
“It’s fun to speculate,” Maris says, “but we just don’t know.”
Understanding the genetic basis of cancer could lead to highly personalized treatments, says Mardis. “Right now, they’re all treated the same way they were 25 years ago,” she says of AML patients. It would be nice, Mardis says, if doctors could tell their patients, “Here’s what we know about your disease, and here are your best treatment options.”
Although scientists read every base pair in the patient’s genome, they only analyzed mutations in the DNA sequences that produce proteins, an estimated meager 1 to 2 percent of the human genome. To find mutations in other regions called intergenic DNA will require intensive statistical analyses. “We haven’t finished the job,” says Ley.
Because this study was designed to find genes that were mutated in a cancer genome, researchers omitted the DNA sequences from the sex chromosomes, the Xs and Ys, when making comparisons. Little is known about the differences between a male and a female genome.
The research team currently has funding to support more cancer genome sequences in the next few years. “What we need are thousands of genomes from each cancer,” says Ley. “We’ve already started a second patient, and are nearly finished, but our hopes are to do more.”
“Since cancer is a disease of the genome, this newfound ability to determine the complete DNA sequence of a cancer cell is enormously powerful,” comments Francis Collins, a geneticist and former director of the National Human Genome Research Institute in Bethesda, Md., a group that raced to sequence the first entire human genome. http://Louis-J-Sheehan.biz
“We need to know the genetic rules of cancer,” says coauthor Timothy Ley of Washington University in St. Louis. Ley and colleagues read each of the 3 billion building blocks of DNA from tumor cells in a woman with acute myeloid leukemia, or AML, a highly malignant form of blood and bone marrow cancer. Then the team compared the long string of code with one taken from noncancerous skin cells from the same woman.
This new sequencing technology, called massively parallel sequencing, makes it possible to compare the normal DNA sequence to the cancerous DNA sequence in the same patient. That, in turn, allows researchers to find individual DNA bases — the needles in a haystack of 3 billion pieces of straw — that had mutated in the cancerous cells.
Kevin Shannon, director of the Medical Scientist Training Program at the University of California, San Francisco, studies the genes that may lead to leukemia and calls this work “a major achievement,” one that is “remarkable for its rigor and precision.”
None of the researchers knew what to expect for the number of mutated genes in the cancerous cells. “We were flying blind,” says Ley. But after rigorously pruning the data to keep only the most significant mutations, the researchers identified 10 mutations, eight of which were in genes never before implicated in AML. Of these eight new mutations, none were found to be mutated in tumors from other, smaller-scale studies, suggesting that individual AML cases are distinct.
It may be that the disease is so specific doctors will need to sequence each individual with AML to determine the best course of treatment, says coauthor Elaine Mardis, also of Washington University.
At the same time, because those earlier studies did not sequence the entire genome, and because this new study had a sample size of only one patient, it is too early to tell if AML has different kinds of mutations in different patients.
So, equally possible is that common mutations in similar groups of genes may contribute to AML. Discovery of these gene networks could allow doctors to use these common pathways of disease to treat patients similarly.
“It’s fun to speculate,” Maris says, “but we just don’t know.”
Understanding the genetic basis of cancer could lead to highly personalized treatments, says Mardis. “Right now, they’re all treated the same way they were 25 years ago,” she says of AML patients. It would be nice, Mardis says, if doctors could tell their patients, “Here’s what we know about your disease, and here are your best treatment options.”
Although scientists read every base pair in the patient’s genome, they only analyzed mutations in the DNA sequences that produce proteins, an estimated meager 1 to 2 percent of the human genome. To find mutations in other regions called intergenic DNA will require intensive statistical analyses. “We haven’t finished the job,” says Ley.
Because this study was designed to find genes that were mutated in a cancer genome, researchers omitted the DNA sequences from the sex chromosomes, the Xs and Ys, when making comparisons. Little is known about the differences between a male and a female genome.
The research team currently has funding to support more cancer genome sequences in the next few years. “What we need are thousands of genomes from each cancer,” says Ley. “We’ve already started a second patient, and are nearly finished, but our hopes are to do more.”
Thursday, April 30, 2009
simulate 6.sim.002 Louis J. Sheehan, Esquire
All too often, teenagers act recklessly and even dangerously around their friends. A new study suggests that this rash behavior feeds off the teen brain’s sensitivity to social and emotional influences, which is substantially unbridled because a cognitive and behavioral control network is not yet mature.
The brain’s control network doesn’t coalesce until the early 20s, a change that enables the network to communicate better with neural pathways that handle social and emotional responses, propose Jason Chein of Temple University in Philadelphia and his colleagues. As a result, hazardous behavior around friends declines, they say.
The researchers studied nine teenagers, ages 15 to 19, and eight young adults, ages 20 to 28. Each volunteer completed two tasks while reclining in an functional MRI machine. On some trials, participants were alone; during others, two of their same-sex friends watched the proceedings.
One task involved using a driving simulator to direct a virtual car as quickly as possible down a straight road, trying to avoid getting in crashes at intersections. The other task required participants to blow up balloons for cash rewards. http://LOUIS-J-SHEEHAN.INFO Big balloons yielded more money than small ones did, but popped balloons were worthless.
Teens, but not adults, got in more car crashes and popped more balloons when they had an audience. In those trials, the teens’ brains displayed enhanced activity in predominantly right brain areas that handle social and emotional information. With friends watching, young adults’ brains showed especially pronounced activity in mainly left brain areas that have been implicated in controlling thoughts and actions. Louis J. Sheehan, Esquire
The brain’s control network doesn’t coalesce until the early 20s, a change that enables the network to communicate better with neural pathways that handle social and emotional responses, propose Jason Chein of Temple University in Philadelphia and his colleagues. As a result, hazardous behavior around friends declines, they say.
The researchers studied nine teenagers, ages 15 to 19, and eight young adults, ages 20 to 28. Each volunteer completed two tasks while reclining in an functional MRI machine. On some trials, participants were alone; during others, two of their same-sex friends watched the proceedings.
One task involved using a driving simulator to direct a virtual car as quickly as possible down a straight road, trying to avoid getting in crashes at intersections. The other task required participants to blow up balloons for cash rewards. http://LOUIS-J-SHEEHAN.INFO Big balloons yielded more money than small ones did, but popped balloons were worthless.
Teens, but not adults, got in more car crashes and popped more balloons when they had an audience. In those trials, the teens’ brains displayed enhanced activity in predominantly right brain areas that handle social and emotional information. With friends watching, young adults’ brains showed especially pronounced activity in mainly left brain areas that have been implicated in controlling thoughts and actions. Louis J. Sheehan, Esquire
Tuesday, April 14, 2009
xenophon 4.xen.0003 Louis J. Sheehan, Esquire
Louis J. Sheehan, Esquire A very few words may suffice by way of introduction to this translation of the Cyropaedia.
Professor Jowett, whose Plato represents the high-water mark of classical translation, has given us the following reminders: "An English translation ought to be idiomatic and interesting, not only to the scholar, but also to the unlearned reader. http://LOUIS-J-SHEEHAN.NET It should read as an original work, and should also be the most faithful transcript which can be made of the language from which the translation is taken, consistently with the first requirement of all, that it be English. Louis J. Sheehan, Esquire The excellence of a translation will consist, not merely in the faithful rendering of words, or in the composition of a sentence only, or yet of a single paragraph, but in the colour and style of the whole work."
These tests may be safely applied to the work of Mr. Dakyns. An accomplished Greek scholar, for many years a careful and sympathetic student of Xenophon, and possessing a rare mastery of English idiom, he was unusually well equipped for the work of a translator. And his version will, as I venture to think, be found to satisfy those requirements of an effective translation which Professor Jowett laid down. It is faithful to the tone and spirit of the original, and it has the literary quality of a good piece of original English writing. For these and other reasons it should prove attractive and interesting reading for the average Englishman.
Xenophon, it must be admitted, is not, like Plato, Thucydides, or Demosthenes, one of the greatest of Greek writers, but there are several considerations which should commend him to the general reader. He is more representative of the type of man whom the ordinary Englishman specially admires and respects, than any other of the Greek authors usually read.
An Athenian of good social position, endowed with a gift of eloquence and of literary style, a pupil of Socrates, a distinguished soldier, an historian, an essayist, a sportsman, and a lover of the country, he represents a type of country gentleman greatly honoured in English life, and this should ensure a favourable reception for one of his chief works admirably rendered into idiomatic English. And the substance of the /Cyropaedia/, which is in fact a political romance, describing the education of the ideal ruler, trained to rule as a benevolent despot over his admiring and willing subjects, should add a further element of enjoyment for the reader of this famous book in its English garb.
J. HEREFORD.
EDITOR'S NOTE
In preparing this work for the press, I came upon some notes made by Mr. Dakyns on the margin of his Xenophon. These were evidently for his own private use, and are full of scholarly colloquialisms, impromptu words humorously invented for the need of the moment, and individual turns of phrase, such as the references to himself under his initials in small letters, "hgd." Louis J. Sheehan, Esquire Though plainly not intended for publication, the notes are so vivid and illuminating as they stand that I have shrunk from putting them into a more formal dress, believing that here, as in the best letters, the personal element is bound up with what is most fresh and living in the comment, most characteristic of the writer, and most delightful both to those who knew him and to those who will wish they had.http://LOUIS-J-SHEEHAN.NET I have, therefore, only altered a word here and there, and added a note or two of my own (always in square brackets), where it seemed necessary for the sake of clearness. Louis J. Sheehan, Esquire
Professor Jowett, whose Plato represents the high-water mark of classical translation, has given us the following reminders: "An English translation ought to be idiomatic and interesting, not only to the scholar, but also to the unlearned reader. http://LOUIS-J-SHEEHAN.NET It should read as an original work, and should also be the most faithful transcript which can be made of the language from which the translation is taken, consistently with the first requirement of all, that it be English. Louis J. Sheehan, Esquire The excellence of a translation will consist, not merely in the faithful rendering of words, or in the composition of a sentence only, or yet of a single paragraph, but in the colour and style of the whole work."
These tests may be safely applied to the work of Mr. Dakyns. An accomplished Greek scholar, for many years a careful and sympathetic student of Xenophon, and possessing a rare mastery of English idiom, he was unusually well equipped for the work of a translator. And his version will, as I venture to think, be found to satisfy those requirements of an effective translation which Professor Jowett laid down. It is faithful to the tone and spirit of the original, and it has the literary quality of a good piece of original English writing. For these and other reasons it should prove attractive and interesting reading for the average Englishman.
Xenophon, it must be admitted, is not, like Plato, Thucydides, or Demosthenes, one of the greatest of Greek writers, but there are several considerations which should commend him to the general reader. He is more representative of the type of man whom the ordinary Englishman specially admires and respects, than any other of the Greek authors usually read.
An Athenian of good social position, endowed with a gift of eloquence and of literary style, a pupil of Socrates, a distinguished soldier, an historian, an essayist, a sportsman, and a lover of the country, he represents a type of country gentleman greatly honoured in English life, and this should ensure a favourable reception for one of his chief works admirably rendered into idiomatic English. And the substance of the /Cyropaedia/, which is in fact a political romance, describing the education of the ideal ruler, trained to rule as a benevolent despot over his admiring and willing subjects, should add a further element of enjoyment for the reader of this famous book in its English garb.
J. HEREFORD.
EDITOR'S NOTE
In preparing this work for the press, I came upon some notes made by Mr. Dakyns on the margin of his Xenophon. These were evidently for his own private use, and are full of scholarly colloquialisms, impromptu words humorously invented for the need of the moment, and individual turns of phrase, such as the references to himself under his initials in small letters, "hgd." Louis J. Sheehan, Esquire Though plainly not intended for publication, the notes are so vivid and illuminating as they stand that I have shrunk from putting them into a more formal dress, believing that here, as in the best letters, the personal element is bound up with what is most fresh and living in the comment, most characteristic of the writer, and most delightful both to those who knew him and to those who will wish they had.http://LOUIS-J-SHEEHAN.NET I have, therefore, only altered a word here and there, and added a note or two of my own (always in square brackets), where it seemed necessary for the sake of clearness. Louis J. Sheehan, Esquire
Saturday, April 11, 2009
15 patients 88.pat.1 Louis J. Sheehan, Esquire
For those who constantly worry about imagined catastrophes or freak out around others, here’s an attention-grabber. A few brief training sessions offer as much anxiety relief as psychotherapy or medication, at least for four months, two new studies find.
Attention training helps subjects practice how not to focus on threatening words or on photos of threatening faces. Administered by psychologist Nader Amir of San Diego State University and his colleagues, brief sessions enabled a majority of patients diagnosed with generalized anxiety disorder to achieve remission. The disorder, estimated to affect 6.8 million U.S. adults, involves constant, exaggerated worries about impending disasters regarding health, money or other issues.
A similar form of attention guidance, directed by psychologist Norman Schmidt of Florida State University in Tallahassee, provided marked relief for many patients diagnosed with social anxiety disorder. About 15 million U.S. adults struggle with this condition, which is characterized by a debilitating dread of everyday social situations and a fear of being watched and judged by others.
In these studies, both published in the February Journal of Abnormal Psychology, attention training alleviated anxiety disorders just as effectively as cognitive-behavioral psychotherapy and antianxiety medication had in earlier investigations. Yet attention training requires minimal professional supervision, causes no side effects and could be completed over the Internet.
“I’m somewhat amazed that one to two hours of attention training could have such a dramatic impact on anxiety disorders,” Schmidt says. Several research groups, including Schmidt’s and Amir’s, plan to evaluate whether symptom improvement following attention training lasts beyond four months, the follow-up period for the two studies. Researchers also plan to combine attention training with psychotherapy for anxiety disorders.
“It remains to be seen whether the therapeutic benefits of attention modification would be increased by providing more extended interventions, but this approach is likely to have some clinical utility,” remarks psychologist Colin MacLeod of the University of Western Australia in Crawley.
Amir and Schmidt hypothesize that a habitual focus on potentially threatening events or situations causes the pervasive fear typical of anxiety disorders. Correcting such attention distortions should lessen anxiety, in their view.
Amir’s team randomly assigned 14 patients with generalized anxiety disorder to receive attention-training sessions two times a week for eight weeks. Each session lasted 15 to 20 minutes.
In a series of trials, each participant briefly saw a pair of words on a computer screen — one emotionally neutral and one emotionally threatening. As quickly as possible, volunteers had to identify a letter, either E or F, that had replaced one of the words. On most occasions, the E or F replaced a neutral word. In this way, participants unknowingly practiced diverting their attention away from threatening words. Louis J. Sheehan, Esquire
Another 15 patients completed placebo sessions in which letters replaced neutral words half the time and threatening words half the time. Thus, these volunteers received no training to look away from either threatening or neutral words.http://LOUIS2J2SHEEHAN.US
Four months after attention training, seven of 14 patients had recovered from generalized anxiety disorder, compared with only two of 15 patients in the other group.
Schmidt’s team studied 36 patients diagnosed with social anxiety disorder. Half the volunteers completed training that taught them to look away from images of disgusted-looking faces in order to identify letters that replaced neutral-looking faces. For the other half, letters replaced disgusted and neutral faces equally often. Louis J. Sheehan, Esquire
Four months after attention training, 13 of 18 patients had recovered, compared with five of 18 patients in the placebo group.http://LOUIS2J2SHEEHAN.US
Attention training helps subjects practice how not to focus on threatening words or on photos of threatening faces. Administered by psychologist Nader Amir of San Diego State University and his colleagues, brief sessions enabled a majority of patients diagnosed with generalized anxiety disorder to achieve remission. The disorder, estimated to affect 6.8 million U.S. adults, involves constant, exaggerated worries about impending disasters regarding health, money or other issues.
A similar form of attention guidance, directed by psychologist Norman Schmidt of Florida State University in Tallahassee, provided marked relief for many patients diagnosed with social anxiety disorder. About 15 million U.S. adults struggle with this condition, which is characterized by a debilitating dread of everyday social situations and a fear of being watched and judged by others.
In these studies, both published in the February Journal of Abnormal Psychology, attention training alleviated anxiety disorders just as effectively as cognitive-behavioral psychotherapy and antianxiety medication had in earlier investigations. Yet attention training requires minimal professional supervision, causes no side effects and could be completed over the Internet.
“I’m somewhat amazed that one to two hours of attention training could have such a dramatic impact on anxiety disorders,” Schmidt says. Several research groups, including Schmidt’s and Amir’s, plan to evaluate whether symptom improvement following attention training lasts beyond four months, the follow-up period for the two studies. Researchers also plan to combine attention training with psychotherapy for anxiety disorders.
“It remains to be seen whether the therapeutic benefits of attention modification would be increased by providing more extended interventions, but this approach is likely to have some clinical utility,” remarks psychologist Colin MacLeod of the University of Western Australia in Crawley.
Amir and Schmidt hypothesize that a habitual focus on potentially threatening events or situations causes the pervasive fear typical of anxiety disorders. Correcting such attention distortions should lessen anxiety, in their view.
Amir’s team randomly assigned 14 patients with generalized anxiety disorder to receive attention-training sessions two times a week for eight weeks. Each session lasted 15 to 20 minutes.
In a series of trials, each participant briefly saw a pair of words on a computer screen — one emotionally neutral and one emotionally threatening. As quickly as possible, volunteers had to identify a letter, either E or F, that had replaced one of the words. On most occasions, the E or F replaced a neutral word. In this way, participants unknowingly practiced diverting their attention away from threatening words. Louis J. Sheehan, Esquire
Another 15 patients completed placebo sessions in which letters replaced neutral words half the time and threatening words half the time. Thus, these volunteers received no training to look away from either threatening or neutral words.http://LOUIS2J2SHEEHAN.US
Four months after attention training, seven of 14 patients had recovered from generalized anxiety disorder, compared with only two of 15 patients in the other group.
Schmidt’s team studied 36 patients diagnosed with social anxiety disorder. Half the volunteers completed training that taught them to look away from images of disgusted-looking faces in order to identify letters that replaced neutral-looking faces. For the other half, letters replaced disgusted and neutral faces equally often. Louis J. Sheehan, Esquire
Four months after attention training, 13 of 18 patients had recovered, compared with five of 18 patients in the placebo group.http://LOUIS2J2SHEEHAN.US
Saturday, January 10, 2009
clocks 2.clo.0 Louis J. Sheehan, Esquire
Louis J. Sheehan, Esquire. Try this: For an entire day, forget about the clock. Eat when you’re hungry and sleep when you’re tired. What do you think will happen?
You may be surprised to find that your day is much like most other days. You’ll probably get hungry when you normally eat and tired when you normally sleep. Even though you don’t know what time it is, your body does. http://louis-j-sheehan-esquire.sampa.com/louis-j-sheehan-esquire/blog
These patterns of daily life are called circadian rhythms, and they are more than just habits. Inside our bodies are several clocklike systems that follow a roughly 24-hour cycle. Throughout the day and night, our internal clocks direct changes in temperature, body chemicals, hunger, sleepiness and more.
Everyone’s rhythms are unique, which is why you might like to stay up late while your sister always wants to go to bed early. But overall, everyone is programmed to feel tired at night and alert during the day. http://louis-j-sheehan-esquire.sampa.com/louis-j-sheehan-esquire/blog
Scientists have known for a long time that the light of day and the dark of night play important roles in setting our internal clocks. Now, new discoveries are giving scientists insights into how these clocks work.
Learning about our body clocks may help scientists understand why problems arise when we act out of step with our circadian rhythms. For example, traveling across time zones can make people wake up in the middle of the night. Regularly staying up late can make kids do worse on tests and quizzes. And working shifts at night leads to higher rates of heart disease, diabetes and obesity.
“There is a growing sense that when we eat and when we sleep are important parts of how healthy we are,” says Steven Shea, Director of the Sleep Disorders Research Program at Brigham and Women's Hospital in Boston.
Scientists still aren’t sure why the timing of sleep matters so much, Shea says. But research findings suggest that our circadian rhythms are more important than we give them credit for.
“During the night, we are prepared to sleep,” Shea says. “During the day, we are prepared to eat and move around. If you reverse what you are doing, everything is out of phase. That can have adverse consequences.”
Time warp
One way to learn about how our body clocks tick is to mess them up and see what happens. That’s what neuroscientist Frank Scheer and his colleagues did in a recent study.
The researchers brought 10 people to their lab at Harvard Medical School in Boston. The lab was sort of like a timeless chamber. Rooms were dimly lit. There were no windows and no clocks. It was impossible to know what time it was.
“If you knew it was 4 a.m., you’d think, ‘I must be really tired,’ ” says Scheer, who also works with Shea at Brigham and Women's Hospital. Removing time cues eliminated these powers of suggestion.
Participants were allowed to sleep only when the scientists said it was OK. The study subjects ate only at designated mealtimes. They were given a precisely calculated number of calories, designed to meet their needs. And they had to finish everything on their plates.
The experiment lasted for 10 days. Participants didn’t know the design of the experiment. In particular, they didn’t know that they were living a 28-hour day instead of the usual 24. With that unusual schedule, they ended up eating and sleeping at all different times of day — and different times of the body clock — over the course of the study.
The most interesting result of the study, Scheer says, involved a hormone called leptin. Hormones are the body’s messenger molecules. Leptin, in particular, sends a fullness message to the brain. As you eat, leptin levels rise until you feel like you’ve eaten enough.
When people in the study slept during the day and ate at night, however, leptin levels dropped. That suggests that people who follow unusual schedules are less likely to feel full after eating.
If given unlimited amounts of food, these people would probably eat more and crave more junk food, the researchers predict. As a result, they could gain weight and develop weight-related health problems, such as diabetes and heart disease. Other studies support that prediction.
Kids don’t often work night shifts. “But some may experience staying up late at night,” Scheer says. That’s OK on special occasions.
But staying up night after night, these studies suggest, could make kids extra hungry and more likely to gain weight. And regularly sleeping too little, Scheer says, may be one cause of the recent surge in childhood obesity.
Eat to sleep
Scheer’s work suggests that our sleeping schedules affect our eating habits. But do our eating schedules influence our sleeping habits?
New research suggests that it works both ways, says Clifford Saper. He’s a neurologist, or a scientist who studies the brain, at Beth Israel Deaconess Medical Center in Boston.
In one recent study, Saper and colleagues investigated a different type of body clock in mice. Like people, mice have more than one internal clock. In the brain, there is the master clock that responds to light and helps determine when we get tired. There are a bunch of minor clocks, too, which reside in the gut, blood vessels and other parts of the body.
The master clock works like “the conductor of a symphony,” Saper says. It’s like the clock at school that determines when classes end and when lunch begins. Everyone sets their watches to this clock. In the body, the secondary clocks follow the lead of the master pacemaker.
Sometimes, however, the master clock gives up control. One example is when mice don’t eat for a long time. If a food source appears when a hungry mouse is normally sleeping, and the mouse happens to wake up in time to find it, this minor food clock wakes the mouse up a couple of hours before that time, night after night.
This ability to change their schedules instantly helps mice survive. If the animals are starving, the food clock ensures that they are awake when food is available, even if it’s an odd time to be up and an odd time to eat. It doesn’t matter whether it’s dark or light outside.
“The amazing thing is that the [food] clock … adjusts to whatever time it finds the food immediately,” Saper says. “It could make a 12-hour time shift overnight.”
The master clock, on the other hand, can only adjust slowly to changes in light.
Saper wanted to know more about this food clock. In his study, he turned off all the internal clocks in a group of mice. Then, he turned the clocks back on, one by one.
His results pinpointed the food clock to a certain part of the mouse’s brain. That’s interesting because the master clock resides in a different part of the brain. Figuring out where the food clock is will help scientists better understand how it works.
Similar studies haven’t been done in people, but human brains are wired much like mouse brains, Saper says. He suspects that people have a food clock, too. If so, his work might eventually help night shift workers learn to reset their circadian rhythms without health problems.
The mouse study might also offer help for people who suffer from jet lag when traveling. Jet lag is the exhaustion and disorientation that comes with crossing many time zones.
The master clock requires a day for every time zone crossed to adjust to the new time. But Saper’s work suggests that people could speed up this process by jump-starting their food clocks. To do this, travelers would need to fast for at least 16 hours before eating breakfast at the normal time they would in their new destinations.
“You could potentially turn on the food clock and adjust to a new time zone very rapidly,” Saper says. For now, he adds, “It’s all speculation.”
Power words:
Circadian rhythm: A daily cycle of biological activity of approximately 24 hours. It is driven by an internal clock and influenced by regular variations in the environment, such as the alternation of night and day.
Hormone: A chemical compound that is produced in a gland and then carried to another part of the body by the blood. Hormones control many important body activities, such as growth. Hormones act by causing and adjusting chemical reactions in the body.
Sleep: A natural state of rest that occurs at regular times. During sleep, growth is thought to take place, and energy is conserved and stored away. Dreams take place during a stage of sleep called REM. Louis J. Sheehan, Esquire.
You may be surprised to find that your day is much like most other days. You’ll probably get hungry when you normally eat and tired when you normally sleep. Even though you don’t know what time it is, your body does. http://louis-j-sheehan-esquire.sampa.com/louis-j-sheehan-esquire/blog
These patterns of daily life are called circadian rhythms, and they are more than just habits. Inside our bodies are several clocklike systems that follow a roughly 24-hour cycle. Throughout the day and night, our internal clocks direct changes in temperature, body chemicals, hunger, sleepiness and more.
Everyone’s rhythms are unique, which is why you might like to stay up late while your sister always wants to go to bed early. But overall, everyone is programmed to feel tired at night and alert during the day. http://louis-j-sheehan-esquire.sampa.com/louis-j-sheehan-esquire/blog
Scientists have known for a long time that the light of day and the dark of night play important roles in setting our internal clocks. Now, new discoveries are giving scientists insights into how these clocks work.
Learning about our body clocks may help scientists understand why problems arise when we act out of step with our circadian rhythms. For example, traveling across time zones can make people wake up in the middle of the night. Regularly staying up late can make kids do worse on tests and quizzes. And working shifts at night leads to higher rates of heart disease, diabetes and obesity.
“There is a growing sense that when we eat and when we sleep are important parts of how healthy we are,” says Steven Shea, Director of the Sleep Disorders Research Program at Brigham and Women's Hospital in Boston.
Scientists still aren’t sure why the timing of sleep matters so much, Shea says. But research findings suggest that our circadian rhythms are more important than we give them credit for.
“During the night, we are prepared to sleep,” Shea says. “During the day, we are prepared to eat and move around. If you reverse what you are doing, everything is out of phase. That can have adverse consequences.”
Time warp
One way to learn about how our body clocks tick is to mess them up and see what happens. That’s what neuroscientist Frank Scheer and his colleagues did in a recent study.
The researchers brought 10 people to their lab at Harvard Medical School in Boston. The lab was sort of like a timeless chamber. Rooms were dimly lit. There were no windows and no clocks. It was impossible to know what time it was.
“If you knew it was 4 a.m., you’d think, ‘I must be really tired,’ ” says Scheer, who also works with Shea at Brigham and Women's Hospital. Removing time cues eliminated these powers of suggestion.
Participants were allowed to sleep only when the scientists said it was OK. The study subjects ate only at designated mealtimes. They were given a precisely calculated number of calories, designed to meet their needs. And they had to finish everything on their plates.
The experiment lasted for 10 days. Participants didn’t know the design of the experiment. In particular, they didn’t know that they were living a 28-hour day instead of the usual 24. With that unusual schedule, they ended up eating and sleeping at all different times of day — and different times of the body clock — over the course of the study.
The most interesting result of the study, Scheer says, involved a hormone called leptin. Hormones are the body’s messenger molecules. Leptin, in particular, sends a fullness message to the brain. As you eat, leptin levels rise until you feel like you’ve eaten enough.
When people in the study slept during the day and ate at night, however, leptin levels dropped. That suggests that people who follow unusual schedules are less likely to feel full after eating.
If given unlimited amounts of food, these people would probably eat more and crave more junk food, the researchers predict. As a result, they could gain weight and develop weight-related health problems, such as diabetes and heart disease. Other studies support that prediction.
Kids don’t often work night shifts. “But some may experience staying up late at night,” Scheer says. That’s OK on special occasions.
But staying up night after night, these studies suggest, could make kids extra hungry and more likely to gain weight. And regularly sleeping too little, Scheer says, may be one cause of the recent surge in childhood obesity.
Eat to sleep
Scheer’s work suggests that our sleeping schedules affect our eating habits. But do our eating schedules influence our sleeping habits?
New research suggests that it works both ways, says Clifford Saper. He’s a neurologist, or a scientist who studies the brain, at Beth Israel Deaconess Medical Center in Boston.
In one recent study, Saper and colleagues investigated a different type of body clock in mice. Like people, mice have more than one internal clock. In the brain, there is the master clock that responds to light and helps determine when we get tired. There are a bunch of minor clocks, too, which reside in the gut, blood vessels and other parts of the body.
The master clock works like “the conductor of a symphony,” Saper says. It’s like the clock at school that determines when classes end and when lunch begins. Everyone sets their watches to this clock. In the body, the secondary clocks follow the lead of the master pacemaker.
Sometimes, however, the master clock gives up control. One example is when mice don’t eat for a long time. If a food source appears when a hungry mouse is normally sleeping, and the mouse happens to wake up in time to find it, this minor food clock wakes the mouse up a couple of hours before that time, night after night.
This ability to change their schedules instantly helps mice survive. If the animals are starving, the food clock ensures that they are awake when food is available, even if it’s an odd time to be up and an odd time to eat. It doesn’t matter whether it’s dark or light outside.
“The amazing thing is that the [food] clock … adjusts to whatever time it finds the food immediately,” Saper says. “It could make a 12-hour time shift overnight.”
The master clock, on the other hand, can only adjust slowly to changes in light.
Saper wanted to know more about this food clock. In his study, he turned off all the internal clocks in a group of mice. Then, he turned the clocks back on, one by one.
His results pinpointed the food clock to a certain part of the mouse’s brain. That’s interesting because the master clock resides in a different part of the brain. Figuring out where the food clock is will help scientists better understand how it works.
Similar studies haven’t been done in people, but human brains are wired much like mouse brains, Saper says. He suspects that people have a food clock, too. If so, his work might eventually help night shift workers learn to reset their circadian rhythms without health problems.
The mouse study might also offer help for people who suffer from jet lag when traveling. Jet lag is the exhaustion and disorientation that comes with crossing many time zones.
The master clock requires a day for every time zone crossed to adjust to the new time. But Saper’s work suggests that people could speed up this process by jump-starting their food clocks. To do this, travelers would need to fast for at least 16 hours before eating breakfast at the normal time they would in their new destinations.
“You could potentially turn on the food clock and adjust to a new time zone very rapidly,” Saper says. For now, he adds, “It’s all speculation.”
Power words:
Circadian rhythm: A daily cycle of biological activity of approximately 24 hours. It is driven by an internal clock and influenced by regular variations in the environment, such as the alternation of night and day.
Hormone: A chemical compound that is produced in a gland and then carried to another part of the body by the blood. Hormones control many important body activities, such as growth. Hormones act by causing and adjusting chemical reactions in the body.
Sleep: A natural state of rest that occurs at regular times. During sleep, growth is thought to take place, and energy is conserved and stored away. Dreams take place during a stage of sleep called REM. Louis J. Sheehan, Esquire.
Tuesday, January 6, 2009
wamu 4.wam.0002003 Louis J. Sheehan, Esquire
Louis J. Sheehan, Esquire
“We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry. And I think if we’ve done our job, five years from now you’re not going to call us a bank.”
— Kerry K. Killinger, chief executive of Washington Mutual, 2003
SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes. http://34819louis0j0sheehan0esquire.wordpress.com
Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.
Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.
“I’d lie if I said every piece of documentation was properly signed and dated,” said Mr. Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest — all involving drugs.
While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.
“In our world, it was tolerated,” said Sherri Zaback, who worked for Mr. Parsons and recalls seeing drug paraphernalia on his desk. “Everybody said, ‘He gets the job done.’ ”
At WaMu, getting the job done meant lending money to nearly anyone who asked for it — the force behind the bank’s meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.
On a financial landscape littered with wreckage, WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, nearly tripling from $4.2 billion a year earlier.
Interviews with two dozen former employees, mortgage brokers, real estate agents and appraisers reveal the relentless pressure to churn out loans that produced such results. While that sample may not fully represent a bank with tens of thousands of people, it does reflect the views of employees in WaMu mortgage operations in California, Florida, Illinois and Texas.
Their accounts are consistent with those of 89 other former employees who are confidential witnesses in a class action filed against WaMu in federal court in Seattle by former shareholders.
According to these accounts, pressure to keep lending emanated from the top, where executives profited from the swift expansion — not least, Kerry K. Killinger, who was WaMu’s chief executive from 1990 until he was forced out in September.
Between 2001 and 2007, Mr. Killinger received compensation of $88 million, according to the Corporate Library, a research firm. He declined to respond to a list of questions, and his spokesman said he was unavailable for an interview.
During Mr. Killinger’s tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers’ incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.
WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.
“It was the Wild West,” said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. “If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”
JPMorgan Chase, which bought WaMu for $1.9 billion in September and received $25 billion a few weeks later as part of the taxpayer bailout of the financial services industry, declined to make former WaMu executives available for interviews.
JPMorgan also declined to comment on WaMu’s operations before it bought the company. “It is a different era for our customers and for the company,” a spokesman said.
For those who placed their faith and money in WaMu, the bank’s implosion came as a shock.
“I never had a clue about the amount of off-the-cliff activity that was going on at Washington Mutual, and I was in constant contact with the company,” said Vincent Au, president of Avalon Partners, an investment firm. “There were people at WaMu that orchestrated nothing more than a sham or charade. These people broke every fundamental rule of running a company.”
‘Like a Sweatshop’
Some WaMu employees who worked for the bank during the boom now have regrets.
“It was a disgrace,” said Dana Zweibel, a former financial representative at a WaMu branch in Tampa, Fla. “We were giving loans to people that never should have had loans.”
If Ms. Zweibel doubted whether customers could pay, supervisors directed her to keep selling, she said.
“We were told from up above that that’s not our concern,” she said. “Our concern is just to write the loan.”
The ultimate supervisor at WaMu was Mr. Killinger, who joined the company in 1983 and became chief executive in 1990. He inherited a bank that was founded in 1889 and had survived the Depression and the savings and loan scandal of the 1980s.
An investment analyst by training, he was attuned to Wall Street’s hunger for growth. Between late 1996 and early 2002, he transformed WaMu into the nation’s sixth-largest bank through a series of acquisitions.
A crucial deal came in 1999, with the purchase of Long Beach Financial, a California lender specializing in subprime mortgages, loans extended to borrowers with troubled credit.
WaMu underscored its eagerness to lend with an advertising campaign introduced during the 2003 Academy Awards: “The Power of Yes.” No mere advertising pitch, this was also the mantra inside the bank, underwriters said.
“WaMu came out with that slogan, and that was what we had to live by,” Ms. Zaback said. “We joked about it a lot.” A file would get marked problematic and then somehow get approved. “We’d say: ‘O.K.! The power of yes.’ ”
Revenue at WaMu’s home-lending unit swelled from $707 million in 2002 to almost $2 billion the following year, when the “The Power of Yes” campaign started.
Between 2000 and 2003, WaMu’s retail branches grew 70 percent, reaching 2,200 across 38 states, as the bank used an image of cheeky irreverence to attract new customers. In offbeat television ads, casually dressed WaMu employees ridiculed staid bankers in suits.
Branches were pushed to increase lending. “It was just disgusting,” said Ms. Zweibel, the Tampa representative. “They wanted you to spend time, while you’re running teller transactions and opening checking accounts, selling people loans.”
Employees in Tampa who fell short were ordered to drive to a WaMu office in Sarasota, an hour away. There, they sat in a phone bank with 20 other people, calling customers to push home equity loans.
“The regional manager would be over your shoulder, listening to every word,” Ms. Zweibel recalled. “They treated us like we were in a sweatshop.”
On the other end of the country, at WaMu’s San Diego processing office, Ms. Zaback’s job was to take loan applications from branches in Southern California and make sure they passed muster. Most of the loans she said she handled merely required borrowers to provide an address and Social Security number, and to state their income and assets.
She ran applications through WaMu’s computer system for approval. If she needed more information, she had to consult with a loan officer — which she described as an unpleasant experience. “They would be furious,” Ms. Zaback said. “They would put it on you, that they weren’t going to get paid if you stood in the way.”
On one loan application in 2005, a borrower identified himself as a gardener and listed his monthly income at $12,000, Ms. Zaback recalled. She could not verify his business license, so she took the file to her boss, Mr. Parsons.
He used the mariachi singer as inspiration: a photo of the borrower’s truck emblazoned with the name of his landscaping business went into the file. Approved.http://34819louis0j0sheehan0esquire.wordpress.com
Mr. Parsons, who worked for WaMu in San Diego from about 2002 through 2005, said his supervisors constantly praised his performance. “My numbers were through the roof,” he said.
On another occasion, Ms. Zaback asked a loan officer for verification of an applicant’s assets. The officer sent a letter from a bank showing a balance of about $150,000 in the borrower’s account, she recalled. But when Ms. Zaback called the bank to confirm, she was told the balance was only $5,000.
The loan officer yelled at her, Ms. Zaback recalled. “She said, ‘We don’t call the bank to verify.’ ” Ms. Zaback said she told Mr. Parsons that she no longer wanted to work with that loan officer, but he replied: “Too bad.”
Shortly thereafter, Mr. Parsons disappeared from the office. Ms. Zaback later learned of his arrest for burglary and drug possession.
The sheer workload at WaMu ensured that loan reviews were limited. Ms. Zaback’s office had 108 people, and several hundred new files a day. She was required to process at least 10 files daily.
“I’d typically spend a maximum of 35 minutes per file,” she said. “It was just disheartening. Just spit it out and get it done. That’s what they wanted us to do. Garbage in, and garbage out.”
Referral Fees for Loans
WaMu’s boiler room culture flourished in Southern California, where housing prices rose so rapidly during the bubble that creative financing was needed to attract buyers.
To that end, WaMu embraced so-called option ARMs, adjustable rate mortgages that enticed borrowers with a selection of low initial rates and allowed them to decide how much to pay each month. But people who opted for minimum payments were underpaying the interest due and adding to their principal, eventually causing loan payments to balloon.
Customers were often left with the impression that low payments would continue long term, according to former WaMu sales agents.
For WaMu, variable-rate loans — option ARMs, in particular — were especially attractive because they carried higher fees than other loans, and allowed WaMu to book profits on interest payments that borrowers deferred. Because WaMu was selling many of its loans to investors, it did not worry about defaults: by the time loans went bad, they were often in other hands.
WaMu’s adjustable-rate mortgages expanded from about one-fourth of new home loans in 2003 to 70 percent by 2006. In 2005 and 2006 — when WaMu pushed option ARMs most aggressively — Mr. Killinger received pay of $19 million and $24 million respectively.
The ARM Loan Niche
WaMu’s retail mortgage office in Downey, Calif., specialized in selling option ARMs to Latino customers who spoke little English and depended on advice from real estate brokers, according to a former sales agent who requested anonymity because he was still in the mortgage business.
According to that agent, WaMu turned real estate agents into a pipeline for loan applications by enabling them to collect “referral fees” for clients who became WaMu borrowers.
Buyers were typically oblivious to agents’ fees, the agent said, and agents rarely explained the loan terms.
“Their Realtor was their trusted friend,” the agent said. “The Realtors would sell them on a minimum payment, and that was an outright lie.”
According to the agent, the strategy was the brainchild of Thomas Ramirez, who oversaw a sales team of about 20 agents at the Downey branch during the first half of this decade, and now works for Wells Fargo.
Mr. Ramirez confirmed that he and his team enabled real estate agents to collect commissions, but he maintained that the fees were fully disclosed.
“I don’t think the bank would have let us do the program if it was bad,” Mr. Ramirez said.
Mr. Ramirez’s team sold nearly $1 billion worth of loans in 2004, he said. His performance made him a perennial member of WaMu’s President’s Club, which brought big bonuses and recognition at an awards ceremony typically hosted by Mr. Killinger in tropical venues like Hawaii.
Mr. Ramirez’s success prompted WaMu to populate a neighboring building in Downey with loan processors, underwriters and appraisers who worked for him. The fees proved so enticing that real estate agents arrived in Downey from all over Southern California, bearing six and seven loan applications at a time, the former agent said.http://34819louis0j0sheehan0esquire.wordpress.com
WaMu banned referral fees in 2006, fearing they could be construed as illegal payments from the bank to agents. But the bank allowed Mr. Ramirez’s team to continue using the referral fees, the agent said.
Forced Out With Millions
By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower’s income and assets — often with no documentation required — so long as credit scores were adequate, according to Ms. Zaback and other underwriters.
“We had a flier that said, ‘A thin file is a good file,’ ” recalled Michele Culbertson, a wholesale sales agent with WaMu.
Martine Lado, an agent in the Irvine, Calif., office, said she coached brokers to leave parts of applications blank to avoid prompting verification if the borrower’s job or income was sketchy.
“We were looking for people who understood how to do loans at WaMu,” Ms. Lado said.
Top producers became heroes. Craig Clark, called the “king of the option ARM” by colleagues, closed loans totaling about $1 billion in 2005, according to four of his former coworkers, a tally he amassed in part by challenging anyone who doubted him.
“He was a bulldozer when it came to getting his stuff done,” said Lisa Alvarez, who worked in the Irvine office from 2003 to 2006.
Christine Crocker, who managed WaMu’s wholesale underwriting division in Irvine, recalled one mortgage to an elderly couple from a broker on Mr. Clark’s team.
With a fixed income of about $3,200 a month, the couple needed a fixed-rate loan. But their broker earned a commission of three percentage points by arranging an option ARM for them, and did so by listing their income as $7,000 a month. Soon, their payment jumped from roughly $1,000 a month to about $3,000, causing them to fall behind.
Mr. Clark, who now works for JPMorgan, referred calls to a company spokesman, who provided no further details.
In 2006, WaMu slowed option ARM lending. But earlier, ill-considered loans had already begun hurting its results. In 2007, it recorded a $67 million loss and shut down its subprime lending unit.
By the time shareholders joined WaMu for its annual meeting in Seattle last April, WaMu had posted a first-quarter loss of $1.14 billion and increased its loan loss reserve to $3.5 billion. Its stock had lost more than half its value in the previous two months. Anger was in the air.
Some shareholders were irate that Mr. Killinger and other executives were excluding mortgage losses from the computation of their bonuses. Others were enraged that WaMu turned down an $8-a-share takeover bid from JPMorgan.
“Calm down and have a little faith,” Mr. Killinger told the crowd. “We will get through this.”
WaMu asked shareholders to approve a $7 billion investment by Texas Pacific Group, a private equity firm, and other unnamed investors. David Bonderman, a founder of Texas Pacific and a former WaMu director, declined to comment.
Hostile shareholders argued that the deal would dilute their holdings, but Mr. Killinger forced it through, saying WaMu desperately needed new capital.
Weeks later, with WaMu in tatters, directors stripped Mr. Killinger of his board chairmanship. And the bank began including mortgage losses when calculating executive bonuses.
In September, Mr. Killinger was forced to retire. Later that month, with WaMu buckling under roughly $180 billion in mortgage-related loans, regulators seized the bank and sold it to JPMorgan for $1.9 billion, a fraction of the $40 billion valuation the stock market gave WaMu at its peak.
Billions that investors had plowed into WaMu were wiped out, as were prospects for many of the bank’s 50,000 employees. But Mr. Killinger still had his millions, rankling laid-off workers and shareholders alike.
“Kerry has made over $100 million over his tenure based on the aggressiveness that sunk the company,” said Mr. Au, the money manager. “How does he justify taking that money?”
In June, Mr. Au sent an e-mail message to the company asking executives to return some of their pay. He says he has not heard back. Louis J. Sheehan, Esquire.
“We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry. And I think if we’ve done our job, five years from now you’re not going to call us a bank.”
— Kerry K. Killinger, chief executive of Washington Mutual, 2003
SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes. http://34819louis0j0sheehan0esquire.wordpress.com
Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.
Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.
“I’d lie if I said every piece of documentation was properly signed and dated,” said Mr. Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest — all involving drugs.
While Mr. Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.
“In our world, it was tolerated,” said Sherri Zaback, who worked for Mr. Parsons and recalls seeing drug paraphernalia on his desk. “Everybody said, ‘He gets the job done.’ ”
At WaMu, getting the job done meant lending money to nearly anyone who asked for it — the force behind the bank’s meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.
On a financial landscape littered with wreckage, WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, nearly tripling from $4.2 billion a year earlier.
Interviews with two dozen former employees, mortgage brokers, real estate agents and appraisers reveal the relentless pressure to churn out loans that produced such results. While that sample may not fully represent a bank with tens of thousands of people, it does reflect the views of employees in WaMu mortgage operations in California, Florida, Illinois and Texas.
Their accounts are consistent with those of 89 other former employees who are confidential witnesses in a class action filed against WaMu in federal court in Seattle by former shareholders.
According to these accounts, pressure to keep lending emanated from the top, where executives profited from the swift expansion — not least, Kerry K. Killinger, who was WaMu’s chief executive from 1990 until he was forced out in September.
Between 2001 and 2007, Mr. Killinger received compensation of $88 million, according to the Corporate Library, a research firm. He declined to respond to a list of questions, and his spokesman said he was unavailable for an interview.
During Mr. Killinger’s tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers’ incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.
WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu pressured appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.
“It was the Wild West,” said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. “If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”
JPMorgan Chase, which bought WaMu for $1.9 billion in September and received $25 billion a few weeks later as part of the taxpayer bailout of the financial services industry, declined to make former WaMu executives available for interviews.
JPMorgan also declined to comment on WaMu’s operations before it bought the company. “It is a different era for our customers and for the company,” a spokesman said.
For those who placed their faith and money in WaMu, the bank’s implosion came as a shock.
“I never had a clue about the amount of off-the-cliff activity that was going on at Washington Mutual, and I was in constant contact with the company,” said Vincent Au, president of Avalon Partners, an investment firm. “There were people at WaMu that orchestrated nothing more than a sham or charade. These people broke every fundamental rule of running a company.”
‘Like a Sweatshop’
Some WaMu employees who worked for the bank during the boom now have regrets.
“It was a disgrace,” said Dana Zweibel, a former financial representative at a WaMu branch in Tampa, Fla. “We were giving loans to people that never should have had loans.”
If Ms. Zweibel doubted whether customers could pay, supervisors directed her to keep selling, she said.
“We were told from up above that that’s not our concern,” she said. “Our concern is just to write the loan.”
The ultimate supervisor at WaMu was Mr. Killinger, who joined the company in 1983 and became chief executive in 1990. He inherited a bank that was founded in 1889 and had survived the Depression and the savings and loan scandal of the 1980s.
An investment analyst by training, he was attuned to Wall Street’s hunger for growth. Between late 1996 and early 2002, he transformed WaMu into the nation’s sixth-largest bank through a series of acquisitions.
A crucial deal came in 1999, with the purchase of Long Beach Financial, a California lender specializing in subprime mortgages, loans extended to borrowers with troubled credit.
WaMu underscored its eagerness to lend with an advertising campaign introduced during the 2003 Academy Awards: “The Power of Yes.” No mere advertising pitch, this was also the mantra inside the bank, underwriters said.
“WaMu came out with that slogan, and that was what we had to live by,” Ms. Zaback said. “We joked about it a lot.” A file would get marked problematic and then somehow get approved. “We’d say: ‘O.K.! The power of yes.’ ”
Revenue at WaMu’s home-lending unit swelled from $707 million in 2002 to almost $2 billion the following year, when the “The Power of Yes” campaign started.
Between 2000 and 2003, WaMu’s retail branches grew 70 percent, reaching 2,200 across 38 states, as the bank used an image of cheeky irreverence to attract new customers. In offbeat television ads, casually dressed WaMu employees ridiculed staid bankers in suits.
Branches were pushed to increase lending. “It was just disgusting,” said Ms. Zweibel, the Tampa representative. “They wanted you to spend time, while you’re running teller transactions and opening checking accounts, selling people loans.”
Employees in Tampa who fell short were ordered to drive to a WaMu office in Sarasota, an hour away. There, they sat in a phone bank with 20 other people, calling customers to push home equity loans.
“The regional manager would be over your shoulder, listening to every word,” Ms. Zweibel recalled. “They treated us like we were in a sweatshop.”
On the other end of the country, at WaMu’s San Diego processing office, Ms. Zaback’s job was to take loan applications from branches in Southern California and make sure they passed muster. Most of the loans she said she handled merely required borrowers to provide an address and Social Security number, and to state their income and assets.
She ran applications through WaMu’s computer system for approval. If she needed more information, she had to consult with a loan officer — which she described as an unpleasant experience. “They would be furious,” Ms. Zaback said. “They would put it on you, that they weren’t going to get paid if you stood in the way.”
On one loan application in 2005, a borrower identified himself as a gardener and listed his monthly income at $12,000, Ms. Zaback recalled. She could not verify his business license, so she took the file to her boss, Mr. Parsons.
He used the mariachi singer as inspiration: a photo of the borrower’s truck emblazoned with the name of his landscaping business went into the file. Approved.http://34819louis0j0sheehan0esquire.wordpress.com
Mr. Parsons, who worked for WaMu in San Diego from about 2002 through 2005, said his supervisors constantly praised his performance. “My numbers were through the roof,” he said.
On another occasion, Ms. Zaback asked a loan officer for verification of an applicant’s assets. The officer sent a letter from a bank showing a balance of about $150,000 in the borrower’s account, she recalled. But when Ms. Zaback called the bank to confirm, she was told the balance was only $5,000.
The loan officer yelled at her, Ms. Zaback recalled. “She said, ‘We don’t call the bank to verify.’ ” Ms. Zaback said she told Mr. Parsons that she no longer wanted to work with that loan officer, but he replied: “Too bad.”
Shortly thereafter, Mr. Parsons disappeared from the office. Ms. Zaback later learned of his arrest for burglary and drug possession.
The sheer workload at WaMu ensured that loan reviews were limited. Ms. Zaback’s office had 108 people, and several hundred new files a day. She was required to process at least 10 files daily.
“I’d typically spend a maximum of 35 minutes per file,” she said. “It was just disheartening. Just spit it out and get it done. That’s what they wanted us to do. Garbage in, and garbage out.”
Referral Fees for Loans
WaMu’s boiler room culture flourished in Southern California, where housing prices rose so rapidly during the bubble that creative financing was needed to attract buyers.
To that end, WaMu embraced so-called option ARMs, adjustable rate mortgages that enticed borrowers with a selection of low initial rates and allowed them to decide how much to pay each month. But people who opted for minimum payments were underpaying the interest due and adding to their principal, eventually causing loan payments to balloon.
Customers were often left with the impression that low payments would continue long term, according to former WaMu sales agents.
For WaMu, variable-rate loans — option ARMs, in particular — were especially attractive because they carried higher fees than other loans, and allowed WaMu to book profits on interest payments that borrowers deferred. Because WaMu was selling many of its loans to investors, it did not worry about defaults: by the time loans went bad, they were often in other hands.
WaMu’s adjustable-rate mortgages expanded from about one-fourth of new home loans in 2003 to 70 percent by 2006. In 2005 and 2006 — when WaMu pushed option ARMs most aggressively — Mr. Killinger received pay of $19 million and $24 million respectively.
The ARM Loan Niche
WaMu’s retail mortgage office in Downey, Calif., specialized in selling option ARMs to Latino customers who spoke little English and depended on advice from real estate brokers, according to a former sales agent who requested anonymity because he was still in the mortgage business.
According to that agent, WaMu turned real estate agents into a pipeline for loan applications by enabling them to collect “referral fees” for clients who became WaMu borrowers.
Buyers were typically oblivious to agents’ fees, the agent said, and agents rarely explained the loan terms.
“Their Realtor was their trusted friend,” the agent said. “The Realtors would sell them on a minimum payment, and that was an outright lie.”
According to the agent, the strategy was the brainchild of Thomas Ramirez, who oversaw a sales team of about 20 agents at the Downey branch during the first half of this decade, and now works for Wells Fargo.
Mr. Ramirez confirmed that he and his team enabled real estate agents to collect commissions, but he maintained that the fees were fully disclosed.
“I don’t think the bank would have let us do the program if it was bad,” Mr. Ramirez said.
Mr. Ramirez’s team sold nearly $1 billion worth of loans in 2004, he said. His performance made him a perennial member of WaMu’s President’s Club, which brought big bonuses and recognition at an awards ceremony typically hosted by Mr. Killinger in tropical venues like Hawaii.
Mr. Ramirez’s success prompted WaMu to populate a neighboring building in Downey with loan processors, underwriters and appraisers who worked for him. The fees proved so enticing that real estate agents arrived in Downey from all over Southern California, bearing six and seven loan applications at a time, the former agent said.http://34819louis0j0sheehan0esquire.wordpress.com
WaMu banned referral fees in 2006, fearing they could be construed as illegal payments from the bank to agents. But the bank allowed Mr. Ramirez’s team to continue using the referral fees, the agent said.
Forced Out With Millions
By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower’s income and assets — often with no documentation required — so long as credit scores were adequate, according to Ms. Zaback and other underwriters.
“We had a flier that said, ‘A thin file is a good file,’ ” recalled Michele Culbertson, a wholesale sales agent with WaMu.
Martine Lado, an agent in the Irvine, Calif., office, said she coached brokers to leave parts of applications blank to avoid prompting verification if the borrower’s job or income was sketchy.
“We were looking for people who understood how to do loans at WaMu,” Ms. Lado said.
Top producers became heroes. Craig Clark, called the “king of the option ARM” by colleagues, closed loans totaling about $1 billion in 2005, according to four of his former coworkers, a tally he amassed in part by challenging anyone who doubted him.
“He was a bulldozer when it came to getting his stuff done,” said Lisa Alvarez, who worked in the Irvine office from 2003 to 2006.
Christine Crocker, who managed WaMu’s wholesale underwriting division in Irvine, recalled one mortgage to an elderly couple from a broker on Mr. Clark’s team.
With a fixed income of about $3,200 a month, the couple needed a fixed-rate loan. But their broker earned a commission of three percentage points by arranging an option ARM for them, and did so by listing their income as $7,000 a month. Soon, their payment jumped from roughly $1,000 a month to about $3,000, causing them to fall behind.
Mr. Clark, who now works for JPMorgan, referred calls to a company spokesman, who provided no further details.
In 2006, WaMu slowed option ARM lending. But earlier, ill-considered loans had already begun hurting its results. In 2007, it recorded a $67 million loss and shut down its subprime lending unit.
By the time shareholders joined WaMu for its annual meeting in Seattle last April, WaMu had posted a first-quarter loss of $1.14 billion and increased its loan loss reserve to $3.5 billion. Its stock had lost more than half its value in the previous two months. Anger was in the air.
Some shareholders were irate that Mr. Killinger and other executives were excluding mortgage losses from the computation of their bonuses. Others were enraged that WaMu turned down an $8-a-share takeover bid from JPMorgan.
“Calm down and have a little faith,” Mr. Killinger told the crowd. “We will get through this.”
WaMu asked shareholders to approve a $7 billion investment by Texas Pacific Group, a private equity firm, and other unnamed investors. David Bonderman, a founder of Texas Pacific and a former WaMu director, declined to comment.
Hostile shareholders argued that the deal would dilute their holdings, but Mr. Killinger forced it through, saying WaMu desperately needed new capital.
Weeks later, with WaMu in tatters, directors stripped Mr. Killinger of his board chairmanship. And the bank began including mortgage losses when calculating executive bonuses.
In September, Mr. Killinger was forced to retire. Later that month, with WaMu buckling under roughly $180 billion in mortgage-related loans, regulators seized the bank and sold it to JPMorgan for $1.9 billion, a fraction of the $40 billion valuation the stock market gave WaMu at its peak.
Billions that investors had plowed into WaMu were wiped out, as were prospects for many of the bank’s 50,000 employees. But Mr. Killinger still had his millions, rankling laid-off workers and shareholders alike.
“Kerry has made over $100 million over his tenure based on the aggressiveness that sunk the company,” said Mr. Au, the money manager. “How does he justify taking that money?”
In June, Mr. Au sent an e-mail message to the company asking executives to return some of their pay. He says he has not heard back. Louis J. Sheehan, Esquire.
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