Monday, March 13, 2006

BUTTERFLY BALLOTS(Next week's Wash Times ad)

As a Bank of America and JP Morgan Chase shareholder I submitted the below shareholder proposal for placement on their 2006 proxy ballot. The SEC at the banks' request barred the proposals because the issues raised were too complicated for the average shareholder to decide. Americans vote on something that really affects theirs and their children's lives? NEVER EVER.

PROPOSAL: To protect and enhance the health and general welfare of children and adults the shareholders recommend BANK OF AMERICA/JP MORGAN CHASE not issue first mortgage home loans, except as required by law, no greater than four times the borrower’s gross income.


As a mature man in my mid-60s, a physician and psychiatrist, a father and grandfather, and a seasoned, very successful investor, I believe the physical and emotional health of adults and children are closely linked to a satisfying family life which in turn depends upon the availability of affordable housing.

I believe today’s housing price inflation is primarily driven by unsound lending practices, commonly referred to as non-conforming mortgages, which promote excessive speculation by pumping too much money into the real estate market. Just Economics 101 supply and demand theory: Too many dollars chasing scarce housing resources drive up prices.The most pernicious non-conforming mortgage loan practice is issuing first mortgage loans in excess of four times the borrower’s gross income. Loans above that level are imprudent for the borrower and unsound for the lender.

Sky high housing costs destabilize marriage. Financial distress is a major cause of marital collapse. and child abuse and neglect.Burdened by excessive debt couples are forced to work excessive hours leaving little time to nurture their marriages much less derive pleasure from them.Spending too much time away from home creates unnecessary opportunities for unfaithfulness which recent studies suggest at least 40% per cent of married men and women do.

Divorce commonly causes mental and physical illness for the partners and their children.The heightened divorce risk notwithstanding, excessive work hours caused by excessive mortgage debt is a major contributing factor to today’s exploding obesity driven diabetes epidemic. With too many moms and dads working long hours in lieu of regular balanced, portion controlled, home cooked meals too many children subsist mostly on junk food.As a physician and a father it’s personally heartbreaking to see so many overweight children knowing of the suffering they will face and the likelihood of shortened lives.Overworked adults also succumb to obesity leading to diabetes because restaurant food and takeout are usually overloaded with fats and carbohydrates with little protein.

There is more to life than making a buck. As an investor, I don’t own shares in companies which intentionally and knowingly prey upon human weakness and/or damage individuals and society, e.g., gambling, hard liquor, tobacco, and fast foods.

I believe the adoption of my proposal might over the short term negatively affect Bank of America’s earnings and dividend growth. No doubt we’ll anger some customers and other banks will continue their unsound practices.A parent’s a parent until their very last breath. We owe it to our children, and to all Americans, to jettison unsound mortgage lending practices rather than continue them just because “Johnnie’s parents let him do it”.
Last week I attended the Southern Republican Leadership Conference in Memphis. I requested my name be listed on the straw ballot. Was refused. I placed 7th in a field of 13. In the official results my votes were reported as "Other".

Senator Bill Frist
Governor Mitt Romney
Senator George Allen
President Bush (write in to show support)
Senator John McCain
Governor Mike Huckabee
Dr. Mark Klein (McCain beat me by about 20 votes and Huckabee by 11)
Governor George Petaki
Senator Sam Brownback
Rudy Guiliani
Newt Gingrich
Senator Chuck Hagel

I received a large number of "2nd choice" votes.

Just what does the Republican Party stand for?

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