Category:Lockerbie bombing

This is the category for the Lockerbie bombing, in which a US passenger airliner was destroyed over Lockerbie, Scotland in 1988.

Refresh this list to see the latest articles.

  • 1 February 2013: British Prime Minister David Cameron makes unannounced visit to Libya
  • 23 May 2012: Lockerbie convict Abdelbaset Ali al-Megrahi buried after dying at Libyan home
  • 21 October 2009: Scottish lawyer denies death of Lockerbie bomber Abdelbaset Ali al-Megrahi
  • 2 September 2009: UK denies pressuring Scotland into Lockerbie release
  • 20 August 2009: Lockerbie bomber Abdelbaset Ali al-Megrahi released on compassionate grounds
  • 18 August 2009: Lockerbie bombing appeal dropped
  • 15 August 2009: Abdelbaset Ali al-Megrahi moves to drop Lockerbie bombing appeal
  • 11 August 2009: Scotland denies bail to terminally ill man convicted of Lockerbie bombing
  • 11 August 2009: Lockerbie convict’s family among protesters for justice in Edinburgh
  • 21 December 2008: 20 years on: Lockerbie victims’ group head talks to Wikinews

From Wikinews, the free news source you can write.


The wreckage of Pan Am 103 in 1988 (Image: AAIB)


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Interview with Ton Roosendaal about Elephants Dream and free content movies

Sunday, May 21, 2006

Three days after the Internet release of the free content 3D short Elephants Dream (see Wikinews coverage), we exchanged e-mails with Ton Roosendaal about the reaction to the film, open source filmmaking, and the changes to Blender that resulted from the production. Ton Roosendaal is the lead developer of the Blender 3D rendering and modelling software that was used for the movie. He is also the chairman of the Blender Foundation, a non-profit organization which was formed in support of the software and projects like Elephants Dream.

How much money did the Blender Foundation spend on producing the movie? Has the money been fully recouped by DVD orders and donations?

We still have to finish the final bookkeeping for this project. It has been executed in co-production with the Netherlands Media Art Institute, and we each had our own internal budgeting for the project. When you exclude expenses of pre-production and producer personnel, the total budget was about 120,000 €, of which we covered half. Our contribution was roughly covered half by the DVD sales, and half by European Union support (http://www.uni-verse.org consortium).

One of the most common criticisms of CGI films is focus on technology over content. For instance, Final Fantasy: The Spirits Within flopped with audiences, in spite of being an undisputed technical milestone. I’ve seen many reviews that criticized the plot of “Elephants Dream” as too bizarre or confusing. In retrospect, are you happy with the story development process?

Haha, I knew the story and plot would get a mixed acclaim. There’s a couple of reasons I’d like to mention for it.

First of all; the criticism resembles how people witness Blender itself, too. Many people expect that Free Software is an easy accessible mass audience product. We get a lot of complaints by non-artists that they can’t get into the software easily, whilst the complexity of commercial products like Maya or Houdini is perceived as a confirmation of its “quality”. Apparently an Open Movie created similar expectations with the audience.

Luckily we also got many positive reviews of the artistic result of the movie. It is quite abstract, but definitely has many layers of information, inspiring many of the viewers to see relevant real life messages hidden here.

For this project we’ve teamed up with the Netherlands Media Art Institute, internationally renowned as a resource for video art. So for Elephants Dream, we’ve had the luxury to challenge ourselves to create real independent artistic content as well. The artists had a lot of freedom from the start; they were responsible for the concept, story and creative development of the entire movie. This has resulted in a lot of quite personal choices, based on what the artists liked to do themselves. I really cherish such an approach, it has resulted in a very motivated team working crazy hours the last months to get it all realized.

But, most importantly; the main target of our project was not only to create a 3D movie short, but to experiment with ways to improve the efficiency and quality of open source development. On this aspect only, this project was just a huge success, and the main reason for our sponsors (the DVD pre-sale) to support it. I know they might have liked a cartoonish funny movie with furry animals better, but for that you get already pretty well served by the bigger 3D animation studios. 🙂

I’m the first to admit that – looking back especially – certain aspects worked out quite weakly; there’s loose ends and questionable decisions, especially in story development and continuity. That’s just the risk of doing experiments, and nothing I regret really. The five artists from our user community who were invited to make the movie were young people with no professional background in filmmaking. Their personal incentive to participate in this project was also to learn from it, and to create a good portfolio for their future career. I’ve witnessed them grow in competence in the past year enormously, something I’m incredibly proud of.

On the technical level, the only major criticism I’ve seen of “Elephants Dream” is the character animation, especially in the opening scene — many reviewers felt that the movements seemed a bit unnatural. Do you agree with these criticisms? If so, what do you think can be done to improve on that level?

Yeah, the challenge the artists set themselves – to use quite realistic personages – is also something that easily works against you. In many animation movies they introduce characters in the beginning in a way you get used to their specific characteristic movements, so you accept a certain level of non-realism easily. (Check the weird walk cycles in The Incredibles for example). Another aspect is that we’ve started work on the first scenes, and ended with the last scenes. I can clearly see the animation quality increase, and that whilst the ending scenes were done in much less time due to time constraints.

We also didn’t schedule to do 9.5 minutes of animation either…. Originally it was more like 6. But, it’s always easier to look back to define the right decisions, eh? 🙂

I’m very happy with the reviews we got so far; luckily the movie was perceived as a professional quality product, and reviewed based on comparisons with what the big studios come up with. Even when we couldn’t satisfy all these quality demands, it has luckily not been branded as a pathetic presumptuous attempt by amateurs!

Do you think there is hope for a full-length open movie project in the near future? Would the Blender Foundation be interested in such a project, or do you intend to continue focusing mainly on shorts?

I’d like to wait a little while with defining what a next project would look like. Given the constraints of “organizing projects to improve open source development”, we might have not much choice either. It would probably mean to work with a new team each time, so most likely be based on shorts only. On the other hand, there’s also clear signals that this approach works well, and creates excitement and involvement of a lot of people, also from producers and sponsors. That might enable us to set up a next project based on larger targets. For a full-length feature film however, we should involve a sufficient amount of experienced film makers as well, and/or invite the first team to participate again. That would put a lot of pressure on the required budget…. You can’t do that based on a 1000 DVD pre-sale target. Would more be like 20,000 or so…. 🙂

How did the process of making the movie feed back into the development of Blender? Are there major technical changes that were made only or primarily because of the film?

Already during the pre-production phase the artists have defined the key targets for Blender development. This then was coordinated with the online development community too. I’ve done the most crucial (re-)development mostly myself, though. Especially on the character animation tools, on the rendering pipeline and compositing tools.

It is especially the latter I’m most satisfied with. In 3D movie production the compositing stage creates a giant content bottleneck. By transparently integrating this in our render-pipeline, a very efficient workflow has been achieved. And, not to forget, Blender now also offers the first production-level open source compositor on the market!

The current summary you can find in our work-in-progress release notes.

What are the key technical features in Blender you want to add or improve for future movie projects?

Depends on what the movie is about! There’s always hundreds of features you can work on. However, we’ll have to work on that anyway, movie project or not. There’s a lot of professionals using Blender now, and they can’t wait for the Blender Foundation to do movies! Look at this studio for example:http://www.plumiferos.com/

I read that at least one proprietary software package, Reaktor, was used for the sound effects. Is this because no equivalent free software solution exists yet? Will future projects have a “free software only” policy?

We’ve limited the “Open Source tools” requirement to our own Studio Orange only. That was what we could keep in control at least, and I can tell you it was not always easy even… 🙂

For sound and music we’ve decided from the beginning to seek an external sponsor. We have chosen to work with the best quality studio and composer we could find, preferably using open source, but not as a prerequisite.

My own competence is solely within the CG [computer graphics, Ed.] side of movie making. When it comes to music editing, or video encoding and DVD authoring, I could only decide to choose to work with external parties with proven competences in that area. I have to be practical in projects like this, especially to ensure it will be realized.

Hopefully, now we’ve got so much attention world wide, we can involve more non-CG open source next time, too. I will definitely strive for the maximum here, but it will fully depend on the amount of professional support we can get.

Blender itself was originally closed source freeware, until it was “liberated” through a fundraising campaign. If you could choose one proprietary application to “set free” where such a goal could be realistically achieved, which one would it be?

Well, the “realistically achieved” demand makes it quite difficult. 🙂 Looking back at similar cases, like Mozilla and OpenOffice.org, it was always very circumstantial. It just happens sometimes, you can’t organize something like this to happen in advance. The only common denominator is “a company in troubles”… so, who’s in trouble now?

What is your personal favorite computer-animated full-length film?

Uuuh… that differs every week! Probably Ice Age (the first one). Mostly because they didn’t overdo showcasing 3D technology so much, but created truly adorable characters and great funny gags.

Retrieved from “https://en.wikinews.org/w/index.php?title=Interview_with_Ton_Roosendaal_about_Elephants_Dream_and_free_content_movies&oldid=4635190”

Mauritanian refugees begin returning home from Senegal

Tuesday, January 29, 2008

Mauritanian refugees stuck in Senegal for nearly two decades after fleeing ethnic clashes in their home country have begun returning to Mauritania under a U.N.-sponsored program. But many do not want to return.

There were goodbye ceremonies and welcoming ceremonies attended by officials on both sides of the Senegal River as more than 100 former refugees were ferried on motorized pirogues.

A spokesman for the United Nations refugee agency, Alphonse Munyaneza, explained international funding will help pay for resettlement.

“Each refugee returning back to Mauritania will receive a piece of land equivalent to 140 square meters for establishing a house. UNHCR and the government of Mauritania will provide construction material so that they can build a house,” explained Munyaneza. “We will provide three months of food ration. We will provide a tent also.”

Each refugee returning back to Mauritania will receive a piece of land equivalent to 140 square meters for establishing a house.

Mauritanian refugee children broke out in song and laughter when officials arrived at their camps close to the border to get the process going.

There are more than 20,000 Mauritanian refugees in Senegal. Officials say the return program will extend over 18 months.

One of those happy to go is Haddy Sy. She says she left Mauritania after she was beaten up. This took place during a wave of ethnic violence that began in Arab Moor-dominated Mauritania in 1989 and escalated into border clashes, forcing tens of thousands of black, mostly ethnic Fula, Mauritanians into exile.

In the late 1990s, more than 30,000 refugees returned by their own means and some U.N. assistance.

Sy says she is leaving behind many good things in Senegal, including a peaceful setting, but that she is still happy to return to her home country.

Since taking office last year, the government of the elected, post-coup President Sidi Ould Cheikh Abdallahi has been making efforts to bring home the refugees, including several thousand more in Mali.

But many in Senegal do not want to return home, like Yaraah Sow, who lives in the Dagana refugee camp about 400 kilometers northwest of Dakar.

He says he is still very bitter about what happened nearly 20 years ago. He said his father, who was a civil servant, was attacked by a mob and died of internal bleeding at the gates of a hospital after doctors refused to treat him.

Sow accuses the military of seizing all his family’s property. He says that two of his younger brothers died on the trip to Senegal. He says his children are now going to school and that they are better off in Senegal.

One of the refugee leaders, Mohamed Ali Sow, who left when he was 10, says he is studying at a university in Senegal to become a lawyer to defend the rights of chased out Mauritanians.

He says the return program has been rushed, because he says people who had their property seized, houses burned, and jobs taken away, should have guarantees these will be restored. He says until then, he does not think it is wise to go back.

Retrieved from “https://en.wikinews.org/w/index.php?title=Mauritanian_refugees_begin_returning_home_from_Senegal&oldid=622744”

Officials: Eight insurgents killed in Orakzai, Pakistan

Sunday, April 25, 2010

In a gun battle that took place between Pakistani soldiers and insurgents on Sunday, eight insurgents were killed and ten others were injured. The incident occurred when about 40 rebels attacked a checkpoint near the Goain village in the Orakzai district of the North-West Frontier Province of the country.

Jahanzeb Khan, a local administrative official, said the attack at the Goain checkpoint was resisted by the army. Two security officials confirmed that heavy artillery had been used for the battle, in which eight rebels died. Sajjad Ahmed, another local official, told Agence France-Presse (AFP) that two underground hideouts of the rebels had also been captured by the army.

A senior military official confirmed that the death toll was eight. “Security forces killed at least eight militants during a search operation,” the official said. “Up to 40 militants attacked our security forces,” he said. Bodies of six of the dead insurgents have been discovered.

Retrieved from “https://en.wikinews.org/w/index.php?title=Officials:_Eight_insurgents_killed_in_Orakzai,_Pakistan&oldid=4581264”

Six die in Nigeria church shooting

Saturday, January 7, 2012

Six people have died after a shooting incident Thursday in a Deeper Life church located in Gombe, in the north east of Nigeria. Gombe state police spokesman Ahmed Muhammad reported that eight other individuals had also been wounded during the shootings.

The wife of the pastor of the church was amongst those killed in the attack, which happened as a prayer service was in progress. Theresa Munyok, self-identified as daughter and brother of two of those shot dead, spoke of the events which occurred. “The only thing I heard was my mommy shouting,” Munyok explained. “She told me that it was gunshots and that my dad is not even breathing. She called and called and he did not wake up,” she said.

No groups were reported to have claimed responsibility for the incident. It is reportedly suspected that Boko Haram, a Muslim sect, carried out the attack. On Sunday, an individual presumed to be a representative of Boko Haram gave a warning to the Christian citizens of the north of Nigeria, which is mainly Muslim, ordering them to depart from the region within three days. Boko Haram translates from Hausa to English as ‘Western education is sacrilege’. The group was reportedly responsible in 2011 for over five hundred killings. The group accepted responsibility for the attack of a Catholic church near the Nigerian capital Abuja on Christmas Day, in which at least 37 people died, as well as a suicide bombing at a United Nations building in the same city, where 25 people were killed as a result.

Goodluck Jonathan, the president of Nigeria, placed various areas of the country in a state of emergency on December 31, 2011, including areas in Yobe, Plateau, Borno and Niger state. Gombe was not included amongst these states. Authorities in these areas can now arrest individuals without requiring evidence to do so. Similarly, searches can be made by authorities without requiring warrants to do so.

Retrieved from “https://en.wikinews.org/w/index.php?title=Six_die_in_Nigeria_church_shooting&oldid=4501476”

U.S. military confirms Qur’ans were kicked, stepped on and splashed with urine at Guantanamo

Saturday, June 4, 2005

On Friday, the U.S. military released the results of their investigation and confirmed that in 5 separate incidents, American guards at the Guantánamo Bay prison “mishandled” the Islamic holy book. However, they stress that guards were usually “respectful” of the Qur’an.

One incident involved splashing a Qur’an with urine by urinating near an air vent while others involved kicking, stepping on and writing in Qur’ans.

Brigadier-General Jay Hood, the commander of the jail, said that these incidents are the exception to the rule. In a statement issued late Friday, he said: “The inquiry … revealed a consistent, documented policy of respectful handling of the Qur’an dating back almost two-and-a-half years.”

Gen. Hood looked into the allegations, published and then retracted by Newsweek, that American personnel flushed a Qur’an down a toilet. He said that the inquiry did not find any evidence supporting this particular allegation. “The inquiry found no credible evidence that a member of the Joint Task Force at Guantanamo Bay ever flushed a Qur’an down a toilet. This matter is considered closed.”

The incidents reported are:

  • a guard kicking a prisoner’s Qur’an;
  • Qur’ans wetted by water balloons thrown by guards;
  • a “two-word obscenity” written, in English, inside the cover of a Qur’an. Military officials state that it is equally possible that a guard wrote this in the prisoner’s Qur’an or that the prisoner wrote this in his own Qur’an;
  • a guard who urinated too close to an air vent, spraying a Qur’an with urine;
  • an interrogator who stepped on a Qur’an during an interrogation.

The investigation also revealed 15 alleged cases of Qur’an mistreatment by detainees themselves. Detainees used Qur’ans as pillows, urinated on them, and, several times, tore pages out of copies of the books, according to the report. For example, the report states that a guard observed a “detainee place two Qur’ans in his toilet and state he no longer cared about the Qur’an or his religion,” on February 23, 2004. It is believed that such behavior is intended to cause disruption and problems for the guards.

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China overtakes Germany as world’s biggest exporter

Sunday, January 10, 2010

Chinese officials have said that their country’s exports surged last December to edge out Germany as the world’s biggest exporter.

The official Xinhua news agency reported today that figures from the General Administration for Customs showed that exports jumped 17.7% in December from a year earlier. Over the whole of 2009 total Chinese exports reached US$1.2 trillion, above Germany’s forecast $1.17 trillion.

Huang Guohua, a statistics official with the customs administration, said the December exports rebound was an important turning point for China’s export sector. He commented that the jump was an indication that exporters have emerged from their downslide.

“We can say that China’s export enterprises have completely emerged from their all-time low in exports,” he said.

However, although China overtook Germany in exports, China’s total foreign trade — both exports and imports — fell 13.9% last year.

Retrieved from “https://en.wikinews.org/w/index.php?title=China_overtakes_Germany_as_world%27s_biggest_exporter&oldid=3255271”

City Planning Board postpones decision on Buffalo, N.Y. hotel proposal

Buffalo, N.Y. Hotel Proposal Controversy
Recent Developments
  • “Old deeds threaten Buffalo, NY hotel development” — Wikinews, November 21, 2006
  • “Proposal for Buffalo, N.Y. hotel reportedly dead: parcels for sale “by owner”” — Wikinews, November 16, 2006
  • “Contract to buy properties on site of Buffalo, N.Y. hotel proposal extended” — Wikinews, October 2, 2006
  • “Court date “as needed” for lawsuit against Buffalo, N.Y. hotel proposal” — Wikinews, August 14, 2006
  • “Preliminary hearing for lawsuit against Buffalo, N.Y. hotel proposal rescheduled” — Wikinews, July 26, 2006
  • “Elmwood Village Hotel proposal in Buffalo, N.Y. withdrawn” — Wikinews, July 13, 2006
  • “Preliminary hearing against Buffalo, N.Y. hotel proposal delayed” — Wikinews, June 2, 2006
Original Story
  • “Hotel development proposal could displace Buffalo, NY business owners” — Wikinews, February 17, 2006

Thursday, March 2, 2006

Buffalo, New York —In an unanimous vote, the City of Buffalo‘s Planning Board voted to table the Elmwood Village hotel Proposal, postponing voting on legislation for up to 30 days.

The Board said its decision was due to the lack of public involvement, saying that there have not been enough meetings.

The Elmwood Village Hotel is a proposed project by Savarino Construction Services Corporation and was designed by Karl Frizlen of The Frizlen Group. The hotel would be placed on Elmwood and Forest Avenues in Buffalo, New York. In order for the hotel to be built, at least five buildings, that include both businesses and residents, must be demolished.

The Forever Elmwood Corp. is a Buffalo-based non-profit organization founded in 1994. Justin Azzarella, the Executive Director for the organization voiced support for the proposal, stating: “I am here today to lend Forever Elmwood’s support the hotel project. Particularly, Forever Elmwood is encouraged by the fact that this building follows the more stringent Elmwood Village Design Guidelines. We have been speaking with Savarino Construction, and they have promised us [Forever Elmwood] that they will engage the community further, including the surrounding Block Clubs and businesses. For that reason, while Forever Elmwood is in support of this project and the type of project that it is, we are asking also that the project be tabled so that the community can be further engaged. Specifically the surrounding Block clubs which include the Granger, Claremont, Asland and The Lincoln Parkway Block Clubs.”

“Because of the excellent work that Karl does and the game plan that they have, I think its an ideal use of this particular location. I think that this particular type of development needs to be encouraged and promoted as opposed to roadblocked,” said a man who owns five properties near the proposal site.

However, Evelyn Bencinich, a resident of Granger Place and whose house would be located directly behind the hotel said, “My property value will be depreciated or non-existent because no one is going to want to live behind a multi-story hotel. We are facing up to a year of noisy and dangerous demolition and construction. Children, pets and even drunk rebellers could wander on site and get hurt. Traffic tie-ups caused by large machinery and garbage bins is inevitable. Where will pedestrians walk? We could experience increased unsanitary flooding in our yards and basements due to the digging and cementing for the underground parking garage. Rats will be displaced into the immediate neighborhoods and be in great abundance. Once we get past the year of nightmare construction, what if you build it and they don’t come? We could ultimately have a seven million dollar rooming house on our corner.”

Patty Morris, co-owner of Don Apparel with Nancy Pollina at 1119 Elmwood also asked that the project be tabled saying, “this has only been public knowledge for less than two weeks and the public never saw the redesign. How can you vote on anything that no one has seen yet? The Board cut off Morris saying, “so specifically you don’t have any problem with it [the design] you just…” Morris then said, “Oh I am totally against this project, but thats besides the point isn’t it.”

The planning board is also concerned that the current design may still be too big.

At one point Board member Susan Curran Hoyt said, “we know you’ve cut down your number of rooms on this project, but we still see it doesn’t seem to fit the description of a ‘botique’ hotel,” and asked Eva Hassett, Vice President of Savarino Construction, “we wonder if you could reduce the rooms further.”

“One thing I didn’t talk about was the price levels of these rooms and that will be important to know. The room rate will be somewhere between US$120 and $160 a night, which is about the same price of the Hampton Inn down town and the smaller you make the hotel, the more expensive the rooms will get. We believe that we’ve made a good compromise in terms of the size of the hotel and perhaps botique means different things to different people,” said Hassett.

The board was also concerned that there is not enough parking asking, “are there alternative plans for valet parking off-site, in the event that you have a full hotel or a large event going on?”

“We are exploring several possibilities with respect to additional parking for valet and parking near-by,” replied Hassett. “We are also exploring the possibility of using the rear of 1105 Elmwood for additional parking, which would give us an additional ten or eleven spaces.”

The new design has a total of 55 parking spaces for 72 rooms, with 39 of them underground and the rest on ground level.

Hassett also said that a “parking study” will be done on the area.

Concerns that the second floor of the hotel will be too close to the property of 605 Forest were also brought up. The board asked how far the hotel would be from the property and Karl Frizlen replied saying it would “be approximately five feet from the property line,” but he also admitted that, “I do not know exactly how close the house next door” will be from the hotel, but did say “I think the house is about four or five feet away from the property line and we [the hotel] sit right on the property line.”

The board is concerned the setback from the property is not enough saying the space between the building and the hotel is “pretty narrow.”

The City’s Common Council also agreed to table the proposal also citing the need for more public engagement and the need for more organizations to respond including the Buffalo Preservation Board and the Office of Historic Preservation.

During that meeting, Hassett also said the proposal to try and get a variance to obtain the properties of 605 and 607 Forest were “now off the agenda.”

The Common Council is expected to meet and hold a public hearing about the project and the rezoning of the properties to be demolished (1119-1121 Elmwood) on Tuesday March 7, 2006 at 2:00 p.m. in Council Chambers at City Hall. At the moment the properties are not zoned for a hotel.

Retrieved from “https://en.wikinews.org/w/index.php?title=City_Planning_Board_postpones_decision_on_Buffalo,_N.Y._hotel_proposal&oldid=1981797”

Study says to clean your sponge, microwave it

Thursday, January 25, 2007

Studies done on germs and bacteria performed by researchers at the University of Florida show that a dirty kitchen sponge can be cleaned and “sterilized” by microwaving it for 2 minutes, but researchers warn to wet the sponge first.

“People often put their sponges and scrubbers in the dishwasher, but if they really want to decontaminate them and not just clean them, they should use the microwave,” said the professor who was in charge of the study that discovered the results, Gabriel Bitton.

“Basically what we find is that we could knock out most bacteria in two minutes. The microwave is a very powerful and an inexpensive tool for sterilization,” added Bitton.

The sponges that researchers studied, were placed in “raw wastewater” and then put into a microwave to be “zapped,” according to Bitton. The wastewater was a “witch’s brew of fecal bacteria, viruses, protozoan parasites and bacterial spores, including Bacillus cereus spores,” said Bitton.

Researchers say that at least 99% of the bacteria, viruses, spores and parasites in kitchen spongees can be destroyed or “inactivated” by simply microwaving the wet sponge, on the highest power, for two minutes.

Retrieved from “https://en.wikinews.org/w/index.php?title=Study_says_to_clean_your_sponge,_microwave_it&oldid=440468”

Sub-prime lenders send jitters through global markets

Tuesday, March 13, 2007

Just two weeks after China sent global markets into a tumble, growing worries about sub-prime mortgage lenders in the United States are sending jitters through stock exchanges around the globe. The three major US stock market indices each fell two percent from Monday’s closing price, marking the second-biggest loss of 2007. London’s FTSE 100, Paris’ CAC 40 and Frankfurt’s DAX 30 indices each closed down more than 1 percent.

As the Mortgage Bankers Association reported that late payments on mortgages and home foreclosures in the US homes rose in the fourth quarter to their highest level in years, investors are concerned that not only US banks but also multi-national banks around the globe could have exposure.

More than two dozen sub-prime lenders have closed or sold operations as defaults on those mortgages have risen. “The delinquencies and defaults have started to soar,” said Nicolas Retsinas, director of Housing Studies at Harvard University. “A lot of these lenders started to make loans and lost track of some of the fundamentals.”

New Century Financial Corporation, the second largest sub-prime lender in the US, has recently revealed that its creditors were no longer providing funds and, further, it has become subject of an SEC investigation. The New York Stock Exchange has said it will delist New Century. Accredited Home Loan Lending, another major sub-prime mortgage specialist, said it was seeking fresh capital and waivers on its lending covenants.

Sub-prime lenders provide mortgages to people who do not qualify for loans from mainstream lenders, typically due to their credit histories. The lenders then bundle these mortgages as collateral for loans that they obtain from other financing firms, such as GMAC. Such firms can then repackage these loans and sell them as mortgage-backed securities. These securities may end up in the hands of major multi-national banks such as Citibank, HSBC, and Commerzbank. Each level of lending assumes a level of financial risk, but trouble can arise when the risk tolerances are exceeded. If too many homeowners default on their mortgages, the sub-prime lender can end up defaulting. If too many of these lenders default, as it is feared may be happening now, the defaults can cascade upward. While no one is predicting major bank failures at this point, it is feared that their profits could be hurt.

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