Sunday, January 31, 2010

US Government TARP Watchdog Says Bank Bailout Program A Failure

TARP Watchdog Neil Barofsky: Government Bailout Has Increased Risk Of Economic Crisis


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WASHINGTON — The government's response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.

Since Congress passed $700 billion financial bailout, the remaining institutions considered "too big to fail" have grown larger and failed to restrain the lavish pay for their executives, Barofsky wrote. He said the banks still have an incentive to take on risk because they know the government will save them rather than bring down the financial system.

Barofsky also said his office is investigating 77 cases of possible criminal and civil fraud, including crimes of tax evasion, insider trading, mortgage lending and payment collection, false statements and public corruption.

One case concerns apparent self-dealing by one of the private fund managers Treasury picked to buy bad assets from banks at discounted prices. A portfolio manager at the firm apparently sold a bond out of a private fund, then repurchased it at a higher price for a government-backed fund. A rating agency had just downgraded the bond, so it likely was worth less, not more, when the government fund bought it. The company is not being named pending the outcome of Barofsky's investigation.

Barofsky renewed a call for Treasury to enact clearer walls so that such apparent conflicts are less likely.

Treasury said it welcomed Barofsky's oversight but resisted the call to erect new barriers against conflicts of interest. The new rules "would be detrimental to the program," Treasury spokeswoman Meg Reilly said in a statement. The existing compliance rules "are a rigorous and effective method of protecting taxpayers," she said.

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Much of Barofsky's report focused on the government's growing role in the housing market, which he said has increased the risk of another housing bubble.

Over the past year, the federal government has spent hundreds of billions propping up the housing market. About 90 percent of home loans are backed by government controlled entities, mainly Fannie Mae, Freddie Mac and the Federal Housing Administration.

The Federal Reserve is spending $1.25 trillion to hold down mortgage rates, and millions of homeowners have refinanced at lower rates.

"The government has stepped in where the private players have gone away," Barofsky said in an interview. "If we take government resources and replace that market without addressing the serious (underlying) concerns, there really is a risk of" artificially pushing up home prices in the coming years.

The report warned that these supports mean the government "has done more than simply support the mortgage market, in many ways it has become the mortgage market, with the taxpayer shouldering the risk that had once been borne by the private investor."

Barofsky's report echoed concerns raised by housing experts in recent months, as home sales and prices rebounded. They warn that the primary reason for the turnaround last year has been billions of dollars in federal spending to lower mortgage rates and prop up demand.

Once that spigot of cash is turned off, they caution, the market will be vulnerable to a dramatic turn for the worse. Daniel Alpert, managing partner of investment bank Westwood Capital, wrote in a report that national home prices are bound to fall 8 to 10 percent below the lows of last spring.

"The lion's share of the remaining decline will occur in markets that saw sizable bubbles but have not yet retrenched," he wrote.

Officials from the Obama administration counter that massive federal intervention has helped the housing market stabilize and prevented more dire consequences.

Barofsky's report also disclosed that, while the Obama administration has pledged to spend $75 billion to prevent foreclosures, only a tiny fraction – just over $15 million – has been spent so far. Under the Making Home Affordable program, only about 66,500 borrowers, or 7 percent of those who signed up, had completed the process as of December.

He said the key to preventing future crises is to reform Fannie Mae and Freddie Mac, create and improve loan underwriting and supervision of banks. He stopped short of endorsing specific proposals for overhauling financial regulation, but said many of the proposals would go far to improving the system.

Saturday, January 30, 2010

Some Horror Stories About Doctors Trying To Automate Medical Practices

Shopping for Health Software, Some Doctors Get Buyer's Remorse

Huffington Post Investigative Fund | Emma Schwartz Posted: 01-29-10 06:07 PM

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Robert Cameron wasn't much of a technology buff, but the orthopedic surgeon knew he wanted to get rid of all the paper in his nine-physician practice in Pensacola, Fla. So he bought an electronic medical records system from a California-based company called Acermed.

Cameron's group spent more than $400,000 on the software, but the system still never fully worked and even confused patients' scheduled visits, according to a lawsuit the doctors filed against the technology company in 2006. Acermed filed for bankruptcy in September 2007, complicating the doctors' attempts to recover their expenses.

The effort to go digital "was a disaster," Cameron says now.

Computerizing American medical records within five years is a key goal of federal health policymakers, who have committed to dispense billions of dollars in stimulus money to doctors and hospitals that make the transition in the coming years. Although the dispute between the Florida doctors and Acermed is an extreme example of what can go wrong during a move to digital systems, it highlights some of the challenges for individual medical practices making the conversion.

"This is a very volatile industry," said Steven Lazarus, president of consulting company Boundary Information Group. "Any product doctors buy could be bought or changed within two years."

Federal officials hope that electronic medical records will help lower costs and improve health care quality. And while they acknowledge that the effort will be difficult, they say that any hurdles along the way will pay off through savings to the health care system and improved quality of care.

But there's also concern that the government may not be doing enough to ensure that taxpayer money isn't wasted on faulty systems.

What's more, doctors often have little expertise in buying electronic health records, commonly called EHRs, and do not always know what questions to ask or what protections they should push for in their contracts, several industry consultants said in interviews.

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"I've seen physicians buy EHRs where they've spent less time buying them than their house and car," said Margret Amatayakul, a prominent health care information technology consultant, who has studied the market for more than 10 years.

In a marketplace full of eager sellers of technology--and some with limited track records--"there's a lot of risk," she said.

Hundreds of companies--big and small, new and old--sell health information technology but industry analysts expect a wave of consolidation in the market, creating uncertainty that certain products will stay in the marketplace or even if some vendors will survive. Amatayakul said she found that up to 70 percent of vendors moved in and out of the market in some years, through mergers, acquisitions or on occasion, bankruptcy.

Congress did not address the possibility that federal incentives could be spent on products from companies with shaky finances when it wrote the stimulus law setting aside billions of dollars for electronic health records.

But as government officials write the rules for distributing the stimulus money, there have been renewed calls for oversight. During testimony before a congressionally mandated advisory committee last summer, Sheldon Razin, chairman of Quality Systems, a large electronic medical record vendor, urged officials to "consider a review of company financials to include long-term viability," according to his presentation document.

"We just think it's an important issue that the government needs to consider," said Steven Plochocki, who works with Razin as chief executive of Quality Systems. "Government can't guarantee people will stay in business, but we think it's an important element."

The federal committee did not suggest any consideration of financial viability in their recommendations to David Blumenthal, national coordinator for health information technology. Paul Egerman, who chaired the group that heard Razin's comments, acknowledged that financial viability was a concern, but said that the group was swayed by the recent experience of the financial industry.

"We had a fear that there's a greater risk to hospitals and doctors from organizations that are too big than ones that are too small," Egerman said. "We wanted to make it possible for innovation." He said the committee believed that the centers the government plans to set up around the country to aid doctors in their purchases would include help on how to better evaluate companies' financials.

Officials from another advisory group, the National Committee on Vital and Health Statistics, disagreed in a May report to Blumenthal.

"We're starting a very exciting process that could change the landscape of health care, but the thing that will stop it quickly is if the doctors feel that they don't have some good direction," said Harry Reynolds, chair of the committee and a vice president with Blue Shield Blue Cross of North Carolina. "You've got to make sure that there's a clear definition of viability."

Although Blumenthal's unit has no plans to review company financials at this time, it "will continue to examine the issue", said Nicholas Papas, a spokesman for the Department of Health and Human Services. "This is a complex matter," he said.

Bankrupt Vendors

The Bush administration first set the goal of putting most Americans' medical records online by 2015. By 2006, the industry had begun to receive some oversight through the Certification Commission for Healthcare Information Technology (CCHIT), a nonprofit organization contracted by the government to certify electronic health records.

The commission reviews whether companies' products meet the operating standards they promise. It does not evaluate the firms' financial viability, although since 2008 it has asked companies to voluntarily disclose their number of customers and how long they have been in business.

Mark Leavitt, chair of the certification commission, said evaluating the financial stability of a company poses many challenges. For example, he noted, even a big, financially successful company could decide to discontinue a software system that didn't pan out. And merely certifying the firm's financial strength could give doctors "a very misleading sense of security" about the future of the product they bought, he said.

Still, some doctors have complained that their practices have been hurt after purchasing certified software from a vendor that later went bankrupt.

Canada-based MedcomSoft, which received certification in 2006, declared bankruptcy two and a half years later. The year before, MedcomSoft began installing its software for some members of the 1,200-doctor Independent Physicians Network in Wisconsin. The company also agreed to build a database of the network's patients and provide maintenance, but failed to do so, according to a 2008 lawsuit filed by the physicians' group. That forced the doctors to pay outsiders to keep their system going, they alleged in court documents.

Four months after the doctors filed suit in November 2008, MedcomSoft's attorney filed a motion to withdraw representation, stating that it appeared "neither Medcomsoft nor its parent corporation has any employees, officers, or directors."

Not every client fared as the Wisconsin group did. Megan Peterson, a manager with medical billing company PBF Online, the Johnstown, Pa., company that bought Medcomsoft out of bankruptcy, said the successor firm had retained 85 percent of the original customers. "We're a strong stable company and will continue to be that for our clients," she said.

Nevertheless, the executive director of the Wisconsin physician network, Michael Repka, said: "It's going to be considerable time and labor for [medical] practices that are going to switch to a new system."

In another case, a Florida-based company, Dr. Notes, went bankrupt in 2007 after 57 liens were filed against the company, according to a tally by the South Florida Business Journal. Some doctors alleged they were locked out of their medical records or left saddled with hundreds of thousands of dollars in loan payments on hardware despite being promised by the company they would recoup the costs.

South Carolina-based First Choice Healthcare was one such company, which in 2005, won a $1.5-million judgment against Dr. Notes in state court. Since then, the health care provider has only collected $100,000, the company's lawyer Andrew Schwartz.

"The doctors are left holding the bag," Schwartz said.

A Fight Over Source Code

Cameron's Florida doctors group, Gulf Coast Orthopaedic Specialists, looked at half a dozen companies before signing with Acermed in April 2005. After installing the first part of the system, they alleged in their lawsuit, the scheduling software "malfunctioned causing patient appointment[s] to disappear." Also, the billing system was not feeding claims back to insurers, which over the next six months nearly ran the practice into bankruptcy itself, the complaint alleged.

Gulf Coast doctors continued to alert Acermed to the problems, but the company was unable to fix them, the lawsuit stated. They weren't the only ones having trouble. Two other doctor groups--one in Florida, another in Tennessee--had also filed suit against Acermed, alleging similar problems. Gulf Coast filed its suit in October 2006. Acermed stated in court documents that the doctors had no basis for their claim.

As it turned out, Acermed had been dealing with problems of its own. In July 2006, a federal judge ordered Acermed to pay more than $750,000 for using some of the source code from another vendor it had once worked with to develop its own electronic medical record software in 2004.

Gulf Coast's lawsuit was still pending when, in September 2007, Acermed filed for bankruptcy. Company officials at the time said that the reason for their bankruptcy was the financial impact of legal bills, not problems with their software.

In January 2008, Ophthalmic Imaging Systems of Sacramento, Calif., bought Acermed and renamed it Abraxas Medical Solutions with Acermed's former chief executive Michael Bina as president.

In an email, Bina said he does not "represent AcerMed any more and would not like to comment on its behalf." He said that one of his conditions for joining Abraxas had been that it continued to service Acermed customers, and that "many clients" of AcerMed have stayed with the new company. One of those clients, Tony Cattone, general manager of a 70-doctor medical practice in New Jersey, said in an interview, "they have lived up to their commitments and it's working fine."

Several other doctors said they were left with loan payments for a system they never received.

And today, the Gulf Coast group still hasn't entirely gotten rid of paper. In December 2008, the doctors settled their lawsuit with Acermed for an undisclosed amount. They invested in a different electronic system, but the doctors aren't entirely happy with the new one either, said Alan Trest, the group's technology manager. With the current system, doctors have to type rather than dictate notes. Some aren't willing to make that transition because they say it takes them more time. So the group still pays for transcriptions.

"They haven't really completely bought into the idea," Trest said.

Friday, January 29, 2010

Beware of The Rare Metals That Power The Technological Revolution

In their element

By Javier Blas

Published: January 29 2010 02:00 | Last updated: January 29 2010 02:00

Get Mark Smith talking about his company's biggest asset and the feeling is one of being transported back to a high-school chemistry class. Cerium, lanthanum, praseodymium, neodymium . . . The mine described by the head of the Denver-based Molycorp Minerals contains deposits featuring some of the more esoteric reaches of the periodic table.

"It is really a challenge to explain to investors what we do," Mr Smith concedes.

Yet these so-called minor metals and rare earths are as critical as copper and aluminium to the global economy. From the cobalt in mobile phone batteries to the neodymium in Toyota's hybrid Prius cars, "minor metals and rare earths are involved in every aspect of modern life", says Guy Darby of the London-based Minor Metals Trade Association.

Take cars. At the start of the 20th century they were typically made up of about five raw materials: wood, rubber, steel, glass and brass. But today, according to a report by the National Academies, which has been written by experts who advise the US on science and technology, "a typical automobile may contain up to 39 different minerals in various components" - including several obscure metals.

That increased demand has pushed prices up, with many types trebling or more in value in the past five years. With China dominating much of the supply, and with its own industry's demands to satisfy, policymakers and business in the west have started to worry about future availability. The National Research Council of the US, another scientific group, after studying the market in 2007 concluded that the reliance on foreign sources could "expose a range of US industries to political, economic and other risk".

The result: raw materials as little-known as terbium, samarium and ruthenium are starting to command a level of attention once reserved for energy and food security. "Rare earths are to China as oil is to the Middle East," Deng Xiaoping proclaimed when he was leader as far back as 1992.

With volumes still small, even rumours of tiny variations in supply or demand can send prices up or down by a factor of 10. But because the overall trend is upward, China faces the prospect of losing its total grip as the increase in prices makes other countries' production more viable economically than before. Molycorp's Mountain Pass mine, which sits on the California-Nevada border, was shut in 2002 when prices plummeted as Chinese production flooded the market. Now, Mr Smith says it could be reopened.

The growth of "green technologies" such as wind turbines is also expected to boost the sector. The environmental applications of rare earth elements "have increased markedly" over the past 30 years, according to the US Geological Survey, a government agency, which expects the trend to continue. Avalon Rare Metals, a Toronto-listed mining company, reckons that about 25 per cent of new technologies rely on minor metals and rare earths.

"Minor" metals and "rare" earth elements owe those designations more to a lack of familiarity than true scarcity. Some, including manganese, are as common as base metals such as nickel or precious metals such as gold. However, as the US Geological Survey notes, in contrast to ordinary base and precious metals, minor metals and rare earths are so dispersed that production is feasible only in the few places where they are present in high enough concentrations.

Mostsupply thus comes from a handful of mines. Bayan Obo, in the Chinese region of Inner Mongolia, is the world's largest, followed by Mountain Pass, then Mount Weld in Australia. Like Mr Smith's facility, Mount Weld is currently inactive, though production there is also likely to restart.

So in a world in which Beijing's voracious appetite for commodities dominates demand trends, China is also the main, if not only, supplier of a number of those little-known metals. In particular, it accounts for 97 per cent of the global supply of rare earth elements - a list of 17 elements of the periodic table for which demand is growing fast.

China's supremacy, together with quotas placed by Beijing on exports over the past few years amid rising domestic demand, has triggered concerns about long-term supplies. Dudley Kingsnorth, an independent analyst who is widely followed in the industry, is one of the experts who reckons the squeeze could come in the next five years.

Concerns about China's dominance were aggravated by market rumours late last year that Beijing was about to tighten its rare earth elements export quota further, extending a policy that has seen a notable cut in exportable quantities in the past decade. However, the traders' chatter proved false: Beijing eased its quotas recently, allowing exports of 16,300 tonnes of strategically important rare earth metals for the first half of this year, up by more than 8 per cent from the same period in 2009.

Wang Caifang, deputy directorgeneral of China's Ministry of Industry, told an industry conference last year that Beijing would not take "arbitrary" decisions. "All our decisions will be consistent with scientific development," she said. "China will not close its doors."

Such reassurances are not enough to ally the concerns of US politicians such as Mike Coffman, a congressman who has pushed for new legislation to minimise American dependence on foreign supplies of obscure metals. "This is strategically dangerous," he has argued.

Yet all is not quite as it may seem. More and more more western companies have been shifting production to China in order to bypass the quotas, as the limits apply only to the ores and not to finished products such as magnets or batteries.

Indeed, some see the export quotas as an attempt by Beijing to accelerate that trend, with companies relocating near its mines in Inner Mongolia. China, they say, is not clamping down on supplies as part of a resource war but is attempting to move value-added industry into the country in order to profit from the presence.

"China does not want to supply rare earth to build a Prius or Volt car battery: it wants to build and market the vehicle," says Anthony Lipmann of Lipmann Walton, a UK-based trader.

China has two other reasons to tighten its grip. For one, Beijing is trying to clamp down on illegal, unsafe and polluting mining across all commodities. Paradoxically, mining rare earth elements - crucial for a number of green technologies - is potentially damaging for the environment. Also, prices have not risen as much as Chinese miners had hoped; the country's policymakers believe that restricting supply will push prices up, traders say.

In comparison with earths, demand for minor metals is less beholden to China, traders say. For some - such as titanium, rhenium or lithium - Beijing is not even the dominant supplier, with Chile, the US, Congo, Australia and Russia being large producers too. So investor enthusiasm has centred on rare earths over the past two years, fuelled by the mining companies themselves warning of looming shortages. That bubble burst late last year.

Policymakers remain worried, however. Japan is already stockpiling obscure metals. The European Commission is considering a list of "critical" minor metals and an announcement, including measures such as stockpiles, is expected later this year.

With mining industry lobbyists pushing for strategic stocks, the US defence department has discussed creating a similar list. "This is because they [minor metals] have a number of high-tech applications that are important for the economy and because they are marked by a higher degree of supply risk than the more traditional base and ferrous metals," says the National Academies' report.

In response, some companies that need minor metals and rare earths are supporting exploration and production, in order to diversify their supply base and keep prices low. Toyota Tsusho, an affiliate of the Japanese carmaker, for example this month announced a deal with Australia-based Orocobre to help develop lithium deposits in Argentina. The metal is needed for use in hybrid cars' batteries.

Many traders remain sceptical, arguing that political concerns about so-called "critical" metals are misplaced. They do not foresee worse shortages than for more common commodities such as iron ore.

As Mr Lipmann points out, this is not the first time that policymakers worrying about metal supplies have fumbled their response. He remembers how the US considered tin a critical metal at some point. It even built a stockpile because of fears that communism would spread from the Korean peninsula to important producing nations including Indonesia, Thailand and Malaysia.

At its peak in 1972 the stockpile contained 250,000 tonnes of the metal, equal to more than the world's entire annual supply at that time. "The US government then spent the next 30 years trying to get rid of it without disrupting the market," Mr Lipmann recalls.

Now, the worry is again that governments will commit the same mistake as they seek to limit a national dependency on China for supplies of substances that, while less prosaic than tin, are needed in rather more modest volumes.

Thursday, January 28, 2010

Rebecca Darr The Incredible Lady Who Saved Me From Homelessness

Rebecca Darr is a beautiful and a brilliant lady. She could have made a fortune as a corporate head hunter. Instead she decided to devote her life to helping the poor and disadvantaged. In 1999 I found myself in a homeless shelter. Rebecca arranged for me to get a $450 grant so that I could pay the damage deposit on an apartment. I will soon celebrate 11 years without being homeless.

Rebecca now runs the Wings Program ( She helps battered and disadvantaged women. Here is a wonderful interview she gave on a Chicago television talk show:

Wednesday, January 27, 2010

Big Haiti OIl Discovery

Are We in Haiti because of Oil?
Published on 01-21-2010Email To Friend Print Version
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By Peter Schlosser - BLN Contributing Writer

It has been a little over a week since the devastating earthquake hit just outside Port au Prince, Haiti. Since that day, I have watched in horror as the Haitian people and their society have quickly submerged into a quagmire of social unrest and political grandstanding. Once I observed the mass-murder posse of Team Obama, Bush and Clinton begin circling the wagons and the rapid US militarization of Port au Prince, including the occupation of the Presidential Palace, to the tune of now almost 10,000 US boots on the ground, I began to get suspicious. Call me crazy. I know of the sad history of Haiti imposed upon the tiny former slave nation by one imperial power after the next. But when I see 10,000 American soldiers descend upon a nation in less than a week, my radar flies into the red zone. Just when I was beginning to brush up on the story behind the story regarding Yemen, now I’m thrashed about one more time and forced to begin scrambling for the next story behind the story for this week’s latest NWO hot topic.

After a few hours on the Internet, I discovered an article posted in January of 2008 indicating that large amounts of, you guessed it, OIL had indeed been discovered in Haiti a short while back. According to the article, s cientists Ginette and Daniel Mathurin indicated that “under Haitian soil it is rich in oil and fuel.” “We have identified 20 oil sites.” said ‘Daniel Mathurin stating that “5 of them are considered of great importance by specialists and politicians.”

“The Central Plateau, including the region of Thomonde, the plain of the Cul-de-Sac and the bay of Port-au-Prince are full of hydrocarbons,”he said adding that “the oil reserves of Haiti are more important than those of Venezuela.” “An Olympic pool compared to a glass of water; that is the comparison to illustrate the importance of Haitian oil compared with those of Venezuela,” he explains.

Are We in Haiti because of Oil? 070110banner

“Venezuela is one of the world’s largest producers of oil.”

We know that large amounts of oil had been discovered in Cuba a little over a year ago as appeared in a London Guardian article from Saturday, October 18 th 2008. .

“ Mother nature, it emerged this week, appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers. The government announced there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba’s share of the Gulf of Mexico, more than twice the previous estimate.

If confirmed, it puts Cuba’s reserves on par with those of the US and into the world’s top 20. Drilling is expected to start next year by Cuba’s state oil company Cubapetroleo, or Cupet.

“It would change their whole equation. The government would have more money and no longer be dependent on foreign oil,” said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. “It could join the club of oil exporting nations.” Wrote Rory Carroll, Latin America Correspondent for the Guardian.

If one looks at a map and notices that Haiti and Cuba are only about 60 miles apart separated by the Winward Passage, one might then assume that perhaps the two Caribbean nations might be sitting on the same stretch of oil field.

And the plot thickens. According to the article regarding Haitian oil: “ Daniel and Ginette Malthurin indicate that the American government had in 2005 authorized the use of strategic reserves of the United States. The door should be used by politicians to launch Haitian negotiations with American companies in the context of the exploitation of these deposits.”

“The specialists contend that the government of Jean Claude Duvalier had verified the existence of a major oil field in the Bay of Port-au-Prince shortly before his downfall.”

Hmmm, intriguing. It would seem that the Pentagon’s interest in Haiti during this crisis just might stretch a bit beyond their normal warm and fuzzy humanitarian intentions. It feels like we’ve been here before. Keep your eyes on the bouncing ball and watch for Big Oil to move into the region shortly. Perhaps this may also serve as a wee bit of gunboat diplomacy targeted at Cuba and, more ominously, a back-up plan to secure reserves in the Empire’s backyard as Obama and the War Machine get ready to take on Venezuela. More will be revealed.

Teen Auctions Virginity On Line To Pay School Expenses


In Northern Ireland, a sixteen year old girl attempted to sell her virginity to the highest bidder using the U.K.-based online classifieds website Gumtree.

Her ad was listed under the heading "Virginity for sale," notes the Telegraph. The unnamed teen reportedly said she was offering her body "to the highest bidder" in order to pay for her education.

The startling story was pursued by a reporter atThe Sunday Life, who investigated the claims and found the girl was serious about the transaction. In order to stop her, the paper dispatched a journalist who posed as an interested bidder and placed a bid.

According to the Belfast Telegraph, after being contacted by the reporter, the girl responded quickly via text with descriptions, including her bra size, and asked for details about the transaction. Her text messages to the reporter, who posed as a wealthy businessman, included:

I'm 17 at the end of the month, but I look way older. I'm tallish, size 14-ish, size 36D breasts, long browny-blonde hair. I actually have three piercings.
I can basically do this any Saturday. Do you want me all night? What exactly is it you wish to do?

Among a slew of texts, many sexual in nature, she also mentioned she was "probably gonna drink a lot before or I'll be shy."

Eventually, the reporter was the only bidder left at a price of £6,000 (or about $9,677). The reporter asked the girl multiple times whether or not she was sure about going through with the transaction, and the girl assured him she was, saying, "There's no way I'm gonna change my mind. It's only you now," referring to the fact that all of her alleged "other bidders" had dropped out of the running.

The girl met with the reporter in a bar to discuss the details face to face. During the conversation, the girl told the reporter what she would be using the money for, saying, "This money will mean I can buy loads of supplies for my art course" and she would also "put the rest away for university as I want to do art at uni."

After the meeting, the girl walked home, and a Sunday Life photographer followed her to her home, proving just how unsafe such online transactions and meetings can be for young girls.

However, before the transaction was to occur, the reporter called the girl and revealed his true identity as a reporter, and the girl sent "panicky texts claiming it was 'a joke'."

Online auctions such as this one have taken place before. About one year ago, 22-year-old Natalie Dylan decided to auction off her virginity, receiving offers of up to $3.7 million. The Telegraphnames at least three additional situations in which women turned to online prostitution, including a Peruvian model who "put herself up for sale to help pay her family's medical bills but ended up having second thoughts and turning down $1.5 million."

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