Paul Joseph Watson & Alex Jones
Prison Planet.com
Every other case involving people arrested for filming cops has been thrown out of court, but media promulgates hoax that recording police is illegal
41-year old Illinois mechanic Michael Allison faces life in jail for recording police officers after authorities hit him with eavesdropping charges based on the hoax that it is illegal to film cops, a misnomer that has been disproved by every other case against people filming police officers being thrown out of court.
The state of Illinois is trying to charge Allison with five counts of wiretapping, each punishable by four to 15 years in prison.
Allison refused a plea deal which would have seen him serve no jail time but would reinforce the hoax that it is illegal to film police officers, as well as acting as a chilling effect to prevent other Americans from filming cases of police brutality.
Allison has chosen to reject the plea bargain and fight to clear his name via a jury trial, arguing, “If we don’t fight for our freedoms here at home we’re all going to lose them.”
A judge is expected to rule on when the case will go to trial over the next two weeks.
As another report concerning the Allison case documents, in every other example where people have been arrested for recording police officers, the charges have been dropped and the case thrown out of court. Despite this fact, the state is so desperate to make an example out of Allison that an assistant from the Attorney General’s Office was recently sent to speak against him during a hearing.
The notion that it is illegal to film police officers is a mass hoax that is being promulgated by authorities, the media, and police officers themselves.
In the latest example, charges were dismissed against a woman who filmed cops in her own back yard in Rochester, New York.
In Illinois itself, eavesdropping charges against Tiawanda Moore for recording patrol officers were dropped, after a “Criminal Court jury quickly repudiated the prosecution’s case, taking less than an hour to acquit Moore on both eavesdropping counts.”
Despite the fact that recording police officers (public servants) is perfectly legal, Americans are still being arrested for doing so, and the establishment media is enthusiastically perpetuating the hoax that such conduct is unlawful, even though in doing so they are completely eroding protections that guarantee press freedom.
There is no expectation of privacy in public, the police are fully aware of this, which is why they have dash cams on their cars to record incidents, wear microphones and utilize other recording equipment as part of their job.
Cases like Allison’s have been thrown out all over the country and yet police continue to arrest people for filming them as a form of intimidation.
The fact that the state is knowingly ignoring its own laws in order to engage in acts of official repression highlights the rampant criminality that has infested every level of American government. This behavior is reflective of a predatory system that seeks to criminalize all first amendment activities.
It also highlights how petrified the system is about the public being able to document and record acts of police brutality.
Prosecutors in Allison’s case are deliberately attempting jail an innocent man for life for an activity that they know full well is not illegal. If anything, they should be the ones being charged with illegal conduct and official oppression.
editor's note: I would like to know your input in this matter, MR. PRESIDENT !!!
Wednesday, August 31, 2011
Tying Health Problems to Rise in Home Foreclosures .
By S. MITRA KALITA
WSJ
The threat of losing your home is stressful enough to make you ill, it stands to reason. Now two economists have measured just how unhealthy the foreclosure crisis has been in some of the hardest-hit areas of the U.S.
New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.
Each rise of 100 foreclosures was also associated with 12% more visits related to anxiety in the same age category. And the same rise in foreclosures was associated with 39% more visits for suicide attempts among the same group, though this still represents a small number of patients, the researchers say.
Teasing out cause and effect can be delicate, and correlation doesn't necessarily mean foreclosures directly cause health problems. Financial duress, among other issues, could lead to health problems—and cause foreclosures, too.
The economists didn't find similar patterns with diseases such as cancer or elective surgeries such as hip replacement, leading them to conclude that areas with high foreclosures are seeing mostly an increase of stress-related ailments.
Tuesday brought news of further weakness in the housing market as the closely watched S&P/Case-Shiller home-price index came in 5.9% lower for the second quarter from a year earlier. Continued job losses and economic uncertainty could weigh on home prices and make for another wave of foreclosures, economists say.
It may not just be foreclosure victims arriving at hospitals—but neighbors also grappling with depleting equity in their biggest investment.
"You see foreclosures having a general effect on the neighborhood," Ms. Currie says. "Everybody's stressed out. There is a connection between people's economic well being and their physical well being."
The situation got so bad for Patricia Graci, a 51-year-old Staten Island, N.Y., resident, that she canceled a recent court appearance related to the foreclosure on her house because she couldn't get out of bed. After her husband lost his job as a painter in 2008, the Gracis relied on savings to pay their mortgage for two years.
"Everything was going downhill. My savings were going down to nothing," says Ms. Graci. "When I realized the money wasn't there anymore, I started getting very anxious and depressed."
She says her lender advised her to default on her mortgage to qualify for a loan modification. Ms. Graci, who was an assistant bank manager and already had rheumatoid arthritis, says she began seeing a therapist and landed in the hospital with difficulty breathing in December 2009. A few weeks later came the foreclosure notice from the bank.
"They told me it was more anxiety and stress that made me wind up in the hospital than the arthritis," Ms. Graci says. After repeatedly missing work due to illness, Ms. Graci went on long-term disability.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. Much of the 2005-2009 period examined came before unemployment peaked, too, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. The time period examined, 2005 to 2007, was before unemployment peaked, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
They found that areas in the top fifth of foreclosure activity have more than double the number of visits for preventable conditions that generally don't require hospitalization than the bottom fifth.
At the local hospital in Homestead, Fla., a city of mostly single-family, middle-class homes about 30 miles from Miami, the emergency room has been bustling. Emergency visits to the hospital in 2010 more than doubled from 10 years earlier to about 67,000, and emergency department medical director Otto Vega says they will surpass 70,000 this year. Homestead has the highest rate of mortgage delinquencies in the U.S.—in June, 41% of mortgage holders in the hardest-hit ZIP Code of Homestead were 90 days or more past due on payments, according to real-estate data firm CoreLogic Inc.
While the most common ailments are respiratory problems and pneumonia, Dr. Vega notes an increase in psychosomatic disorders, such as patients with chest pain and shortness of breath, and others who feel suicidal. "A lot of young people, less than 50 years old, have chest pain. You know it's anxiety," he says.
Nationwide, overall emergency-room visits have also been rising, growing 5% from 2007 to 127.3 million in 2009, according to the American Hospital Association. But inpatient stays have largely kept pace with population growth over the last decade, says Beth Feldpush, a vice president for policy and advocacy at the National Association of Public Hospitals.
The number of people covered by employer-sponsored insurance has been falling, she says. "When people don't have insurance, they put off seeking care for too long and end up in the emergency room."
And some of those seeking treatment had medical conditions before foreclosure—but the stress of losing their homes has exacerbated their ailments.
In 2008, Norman Adelman of Freehold, N.J., called his lender to ask for a forbearance of three or four months, saying he was about to undergo knee-replacement surgery. The lender complied and Mr. Adelman, who runs a home-energy business, says he began scaling back his work. He underwent needed tests and doctor visits.
After two months of not paying his mortgage, he successfully applied for a loan modification, taking his monthly payment from $2,700 to $1,900. But then the loan was sold—and a new servicer didn't recognize the terms of the arrangement, he says.
Mr. Adelman is fighting the new lender but says he has been in and out of the hospital for the last two years. He never had his knees replaced and is now on antidepressants and antianxiety medication.
"He's deteriorated. He's had sleepless nights," says his wife, Shulamis. "You always have this fear of being thrown out. He's just gotten worse and worse from not sleeping."
Earlier this month, after working with the nonprofit Staten Island Legal Services, Ms. Graci received a trial loan modification. "I'm happy but I am still scared," she says. "I want a permanent solution. I don't know if I am in the clear."
editor's note: could you believe this nonsense
MR. PRESIDENT ?????
WSJ
The threat of losing your home is stressful enough to make you ill, it stands to reason. Now two economists have measured just how unhealthy the foreclosure crisis has been in some of the hardest-hit areas of the U.S.
New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49.
Each rise of 100 foreclosures was also associated with 12% more visits related to anxiety in the same age category. And the same rise in foreclosures was associated with 39% more visits for suicide attempts among the same group, though this still represents a small number of patients, the researchers say.
Teasing out cause and effect can be delicate, and correlation doesn't necessarily mean foreclosures directly cause health problems. Financial duress, among other issues, could lead to health problems—and cause foreclosures, too.
The economists didn't find similar patterns with diseases such as cancer or elective surgeries such as hip replacement, leading them to conclude that areas with high foreclosures are seeing mostly an increase of stress-related ailments.
Tuesday brought news of further weakness in the housing market as the closely watched S&P/Case-Shiller home-price index came in 5.9% lower for the second quarter from a year earlier. Continued job losses and economic uncertainty could weigh on home prices and make for another wave of foreclosures, economists say.
It may not just be foreclosure victims arriving at hospitals—but neighbors also grappling with depleting equity in their biggest investment.
"You see foreclosures having a general effect on the neighborhood," Ms. Currie says. "Everybody's stressed out. There is a connection between people's economic well being and their physical well being."
The situation got so bad for Patricia Graci, a 51-year-old Staten Island, N.Y., resident, that she canceled a recent court appearance related to the foreclosure on her house because she couldn't get out of bed. After her husband lost his job as a painter in 2008, the Gracis relied on savings to pay their mortgage for two years.
"Everything was going downhill. My savings were going down to nothing," says Ms. Graci. "When I realized the money wasn't there anymore, I started getting very anxious and depressed."
She says her lender advised her to default on her mortgage to qualify for a loan modification. Ms. Graci, who was an assistant bank manager and already had rheumatoid arthritis, says she began seeing a therapist and landed in the hospital with difficulty breathing in December 2009. A few weeks later came the foreclosure notice from the bank.
"They told me it was more anxiety and stress that made me wind up in the hospital than the arthritis," Ms. Graci says. After repeatedly missing work due to illness, Ms. Graci went on long-term disability.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. Much of the 2005-2009 period examined came before unemployment peaked, too, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
The areas that have the highest foreclosure rates also tend to have a large portion of their population unemployed, underemployed or uninsured. Ms. Currie says the research accounted for this by instituting controls for persistent differences among areas, such as poverty rates, as well as for county-level trends. The time period examined, 2005 to 2007, was before unemployment peaked, she says. The researchers examined hospital-visit numbers and foreclosure rates in all ZIP Codes that had those data available.
They found that areas in the top fifth of foreclosure activity have more than double the number of visits for preventable conditions that generally don't require hospitalization than the bottom fifth.
At the local hospital in Homestead, Fla., a city of mostly single-family, middle-class homes about 30 miles from Miami, the emergency room has been bustling. Emergency visits to the hospital in 2010 more than doubled from 10 years earlier to about 67,000, and emergency department medical director Otto Vega says they will surpass 70,000 this year. Homestead has the highest rate of mortgage delinquencies in the U.S.—in June, 41% of mortgage holders in the hardest-hit ZIP Code of Homestead were 90 days or more past due on payments, according to real-estate data firm CoreLogic Inc.
While the most common ailments are respiratory problems and pneumonia, Dr. Vega notes an increase in psychosomatic disorders, such as patients with chest pain and shortness of breath, and others who feel suicidal. "A lot of young people, less than 50 years old, have chest pain. You know it's anxiety," he says.
Nationwide, overall emergency-room visits have also been rising, growing 5% from 2007 to 127.3 million in 2009, according to the American Hospital Association. But inpatient stays have largely kept pace with population growth over the last decade, says Beth Feldpush, a vice president for policy and advocacy at the National Association of Public Hospitals.
The number of people covered by employer-sponsored insurance has been falling, she says. "When people don't have insurance, they put off seeking care for too long and end up in the emergency room."
And some of those seeking treatment had medical conditions before foreclosure—but the stress of losing their homes has exacerbated their ailments.
In 2008, Norman Adelman of Freehold, N.J., called his lender to ask for a forbearance of three or four months, saying he was about to undergo knee-replacement surgery. The lender complied and Mr. Adelman, who runs a home-energy business, says he began scaling back his work. He underwent needed tests and doctor visits.
After two months of not paying his mortgage, he successfully applied for a loan modification, taking his monthly payment from $2,700 to $1,900. But then the loan was sold—and a new servicer didn't recognize the terms of the arrangement, he says.
Mr. Adelman is fighting the new lender but says he has been in and out of the hospital for the last two years. He never had his knees replaced and is now on antidepressants and antianxiety medication.
"He's deteriorated. He's had sleepless nights," says his wife, Shulamis. "You always have this fear of being thrown out. He's just gotten worse and worse from not sleeping."
Earlier this month, after working with the nonprofit Staten Island Legal Services, Ms. Graci received a trial loan modification. "I'm happy but I am still scared," she says. "I want a permanent solution. I don't know if I am in the clear."
editor's note: could you believe this nonsense
MR. PRESIDENT ?????
Nevada Says Bank of America Broke Mortgage Settlement
By GRETCHEN MORGENSON
NYT
The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.
In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.
In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.
The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.
But foreclosure problems mounted in Nevada, where Countrywide originated 262,622 loans, and complaints about the bank’s loan servicing practices began flooding into Ms. Masto’s office shortly after the settlement was struck. She found that Bank of America had “materially and almost immediately violated” the terms of the settlement, according to the complaint.
Ms. Masto declined to comment beyond the court filing.
Jumana Bauwens, a spokeswoman for Bank of America, said the bank was reviewing Ms. Masto’s complaint. “We disagree that there has been any material breach of the consent decree and will continue to vigorously defend this action,” she said.
Ms. Masto’s request to terminate the 2008 deal could raise further questions about the extent of its liabilities arising from Countrywide’s lending practices and from the bank’s own loan servicing activities in the foreclosure crisis. The move by the Nevada attorney general could also imperil the already shaky negotiations over improper foreclosure practices being conducted by state attorneys general and the four largest banks, including Bank of America.
Those talks, which also involve federal officials, have stalled over the summer with disagreements over whether the deal would allow state regulators to bring future lawsuits against the institutions for questionable practices. Attorneys general who do not want to give up the right to file additional suits against the banks — including Ms. Masto, Eric Schneiderman of New York and Beau Biden of Delaware — have declined to endorse a proposed settlement.
The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.
For example, the complaint says the bank advised credit reporting agencies that consumers were in default when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.
Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.
One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations were reprimanded, this employee said.
The Nevada filing also maintains that Countrywide, which Bank of America acquired in 2008, did not deliver necessary loan documentation when it put together mortgage securities and sold them to investors during the boom. Under the typical pooling and servicing agreements struck between Countrywide and investors who bought the securities, the bank was required to endorse the mortgage note and deliver it to the trustee overseeing the pool. Countrywide failed to do so, the complaint notes.
These paperwork failures should have barred the bank from foreclosing on borrowers, the Nevada complaint says, but it went ahead nonetheless. This aspect of Ms. Masto’s complaint echoes a lawsuit filed in early August by Mr. Schneiderman, the New York attorney general, to block a settlement between Bank of New York and Bank of America covering 530 Countrywide mortgage pools. In that case, Mr. Schneiderman contends that Countrywide did not deposit loans into the mortgage pools as required and that the bank had no right to bring foreclosure actions against these borrowers.
Ms. Masto’s complaint asks that the court impose civil penalties on Bank of America and order it to cover the costs of caring for foreclosed properties borne by municipalities.
editor's note: Reading material for the :
Is the
reading any newspaper, or blog, ?????
The chief executive of the Office of the Comptroller of the Currency
John G. Walsh
when this person is going to get FIRE !!!!!
The Government should close right now such a useless regulating office.
NYT
The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.
In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.
In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.
The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.
But foreclosure problems mounted in Nevada, where Countrywide originated 262,622 loans, and complaints about the bank’s loan servicing practices began flooding into Ms. Masto’s office shortly after the settlement was struck. She found that Bank of America had “materially and almost immediately violated” the terms of the settlement, according to the complaint.
Ms. Masto declined to comment beyond the court filing.
Jumana Bauwens, a spokeswoman for Bank of America, said the bank was reviewing Ms. Masto’s complaint. “We disagree that there has been any material breach of the consent decree and will continue to vigorously defend this action,” she said.
Ms. Masto’s request to terminate the 2008 deal could raise further questions about the extent of its liabilities arising from Countrywide’s lending practices and from the bank’s own loan servicing activities in the foreclosure crisis. The move by the Nevada attorney general could also imperil the already shaky negotiations over improper foreclosure practices being conducted by state attorneys general and the four largest banks, including Bank of America.
Those talks, which also involve federal officials, have stalled over the summer with disagreements over whether the deal would allow state regulators to bring future lawsuits against the institutions for questionable practices. Attorneys general who do not want to give up the right to file additional suits against the banks — including Ms. Masto, Eric Schneiderman of New York and Beau Biden of Delaware — have declined to endorse a proposed settlement.
The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.
For example, the complaint says the bank advised credit reporting agencies that consumers were in default when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.
Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.
One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations were reprimanded, this employee said.
The Nevada filing also maintains that Countrywide, which Bank of America acquired in 2008, did not deliver necessary loan documentation when it put together mortgage securities and sold them to investors during the boom. Under the typical pooling and servicing agreements struck between Countrywide and investors who bought the securities, the bank was required to endorse the mortgage note and deliver it to the trustee overseeing the pool. Countrywide failed to do so, the complaint notes.
These paperwork failures should have barred the bank from foreclosing on borrowers, the Nevada complaint says, but it went ahead nonetheless. This aspect of Ms. Masto’s complaint echoes a lawsuit filed in early August by Mr. Schneiderman, the New York attorney general, to block a settlement between Bank of New York and Bank of America covering 530 Countrywide mortgage pools. In that case, Mr. Schneiderman contends that Countrywide did not deposit loans into the mortgage pools as required and that the bank had no right to bring foreclosure actions against these borrowers.
Ms. Masto’s complaint asks that the court impose civil penalties on Bank of America and order it to cover the costs of caring for foreclosed properties borne by municipalities.
Is the
John G. Walsh
when this person is going to get FIRE !!!!!
The Government should close right now such a useless regulating office.
Foreclosure Fraud Settlement Crumbles As Tom Miller Whines
By: David Dayen
FDL
Tom Miller’s feewings are huwt. He doesn’t like how he’s being portrayed by those who have actually taken a look at how he’s been handling the 50-state “investigation” on foreclosure fraud. And he’s having his top deputy defend him to major media.
Those involved in the settlement talks are increasingly frustrated at how their efforts have been perceived.
“We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order,” said Iowa Assistant Attorney General Patrick Madigan, a longtime Miller deputy, who has worked on major settlements with subprime lenders such as Countrywide and Ameriquest. “It’s just unreal.”
Oh really? The Countrywide settlement? You’re touting the Countrywide settlement? Can I have your fax number, Attorney General Miller? There’s something I want to send you from Attorney General Masto that I’d like you to see.
Incidentally, this is par for the course for Miller. He’s been hyping the Countrywide settlement since he signed onto it in October 2008. Pity he hasn’t been checking to see if Bank of America abided by the terms of it in any way whatsoever. Marcy Wheeler shot the fish in the barrel on this one, too.
The novel new criticism of Eric Schneiderman’s demands for investigations is that homeowners would get lost in the shuffle:
"If Schneiderman were to get his way, his critics warn, homeowners could end up at the same table as massive asset and investment management firms such as Pimco and BlackRock. The interests of ordinary homeowners could end up competing with those of financial heavyweights. Even more thorny legal issues, such as those related to the way pools of mortgages were bundled and sold to investors, would be injected into the discussions.
Critics say such an approach would delay a final settlement, with no guarantee of helping homeowners at the end of the day."
There’s a kernel of truth to this. But are these anonymous critics aware that Schneiderman, by intervening in the Bank of America MBS settlement, is taking on Black Rock and Pimco, who are parties to that settlement? All this bickering about an investigation stands in for the investigation; the defenders of the settlement have literally been going in circles for almost a year. In that time, Schneiderman has actually moved forward on investigating securitization and produced results. As his spokesman Danny Kanner said, a global settlement by Miller and others “would unequivocally preclude Attorney General Schneiderman and other state prosecutors from following the facts where they lead.”
I think the White House has pretty much given up on the settlement at this point. Their internal deadline was Labor Day, and it looks like they’ll announce something then, just not the settlement. More likely they will announce some new steps aimed at mortgage relief through refinancing, which still has to surmount the hurdle that is Ed DeMarco of the FHFA, who has resisted efforts of this type at Fannie and Freddie. Interesting side note in that story that Tim Geithner tried to fire DeMarco but abandoned the idea after finding himself unable to find a credible replacement. The refinancing effort is more a Congress-free stimulus measure, with a benefit of anywhere between $20-$80 billion a year depending on who you ask, than a real fix for the housing market, of course.
But back to my main point. A settlement will not be part of this announcement, because some important Attorneys General think it’s more important to defend the rule of law than to let banks off the hook for systematic crimes that they will probably continue to commit even in the event of a settlement. Even those AGs in the settlement talks agree that there will be no broad release of claims, and that the investigations of Schneiderman and the other states on issues beyond robo-signing and servicing should continue. Of course, this guarantees that there will not be a settlement, because the banks want a liability release on everything
FDL
Tom Miller’s feewings are huwt. He doesn’t like how he’s being portrayed by those who have actually taken a look at how he’s been handling the 50-state “investigation” on foreclosure fraud. And he’s having his top deputy defend him to major media.
Those involved in the settlement talks are increasingly frustrated at how their efforts have been perceived.
“We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order,” said Iowa Assistant Attorney General Patrick Madigan, a longtime Miller deputy, who has worked on major settlements with subprime lenders such as Countrywide and Ameriquest. “It’s just unreal.”
Oh really? The Countrywide settlement? You’re touting the Countrywide settlement? Can I have your fax number, Attorney General Miller? There’s something I want to send you from Attorney General Masto that I’d like you to see.
Incidentally, this is par for the course for Miller. He’s been hyping the Countrywide settlement since he signed onto it in October 2008. Pity he hasn’t been checking to see if Bank of America abided by the terms of it in any way whatsoever. Marcy Wheeler shot the fish in the barrel on this one, too.
The novel new criticism of Eric Schneiderman’s demands for investigations is that homeowners would get lost in the shuffle:
"If Schneiderman were to get his way, his critics warn, homeowners could end up at the same table as massive asset and investment management firms such as Pimco and BlackRock. The interests of ordinary homeowners could end up competing with those of financial heavyweights. Even more thorny legal issues, such as those related to the way pools of mortgages were bundled and sold to investors, would be injected into the discussions.
Critics say such an approach would delay a final settlement, with no guarantee of helping homeowners at the end of the day."
There’s a kernel of truth to this. But are these anonymous critics aware that Schneiderman, by intervening in the Bank of America MBS settlement, is taking on Black Rock and Pimco, who are parties to that settlement? All this bickering about an investigation stands in for the investigation; the defenders of the settlement have literally been going in circles for almost a year. In that time, Schneiderman has actually moved forward on investigating securitization and produced results. As his spokesman Danny Kanner said, a global settlement by Miller and others “would unequivocally preclude Attorney General Schneiderman and other state prosecutors from following the facts where they lead.”
I think the White House has pretty much given up on the settlement at this point. Their internal deadline was Labor Day, and it looks like they’ll announce something then, just not the settlement. More likely they will announce some new steps aimed at mortgage relief through refinancing, which still has to surmount the hurdle that is Ed DeMarco of the FHFA, who has resisted efforts of this type at Fannie and Freddie. Interesting side note in that story that Tim Geithner tried to fire DeMarco but abandoned the idea after finding himself unable to find a credible replacement. The refinancing effort is more a Congress-free stimulus measure, with a benefit of anywhere between $20-$80 billion a year depending on who you ask, than a real fix for the housing market, of course.
But back to my main point. A settlement will not be part of this announcement, because some important Attorneys General think it’s more important to defend the rule of law than to let banks off the hook for systematic crimes that they will probably continue to commit even in the event of a settlement. Even those AGs in the settlement talks agree that there will be no broad release of claims, and that the investigations of Schneiderman and the other states on issues beyond robo-signing and servicing should continue. Of course, this guarantees that there will not be a settlement, because the banks want a liability release on everything
Sell America to Communist China Faster, Says New York Fed Official and Schneiderman Foe Kathryn Wylde
By Matt Stoller, a fellow at the Roosevelt Institute. He is the former Senior Policy Advisor to Rep. Alan Grayson. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller
The elite consensus in American politics is held together by a small group of well-paid and well-connected insiders who are marbled throughout the world of corporations, banks, government service, and elite nonprofits. Who are they? And what do they believe?
One way to start is to look at who is being recruited to attack Eric Schneiderman, the liberal New York Attorney General going after the big banks. Normally these people stay behind the scenes, but in this case, we’re getting a nice peak behind the curtain. The best example so far is Kathryn Wylde, the chief of the nonprofit Partnership for New York City, a big bank/corporate-funded lobbying group that advises political officials on how to build a more business-friendly New York.
Wylde, importantly, sits on the Board of the New York Federal Reserve as a Class C Director, the group that is supposed to represent “the public”. Yet, after Schneiderman got into a contentious legal fight with Bank of New York Mellon over foreclosure fraud, the bank literally referred reporters to Wylde for her comment. She even went so far as to confront Schneiderman at a funeral. Because she’s a director of the New York Fed, her actions reflect on the Fed. Let’s start there. Wylde is appointed, and can be fired, by the Federal Reserve Board in Washington, DC, according to Section 11(f) of the Federal Reserve Act (these Board members are Ben Bernanke, Janet Yellen, Elizabeth Duke, Dan Tarullo, and Sarah Bloom Raskin).
Should she be fired? Let’s look at the facts. Wylde is subject to this restriction in the Federal Reserve Act.
“Class C Directors as Employees or Stockholders of Banks No director of class C shall be an officer, director, employee, or stockholder of any bank.”
The odds are high that she owns mutual funds or bank shares. She made $466,000 last year. Unless she has profligate spending habits, or is unusually risk averse, she probably has a decent sized investment portfolio, and if she invested along orthodox lines, a chunk of it would be diversified holdings of domestic stock, which would have to include bank shares. The NY Fed is pretty sloppy about its ethics issues. For instance, former NY Fed class C director and ex-Goldman co-chariman, Steve Friedman, bought Goldman shares while privy to and probably influencing Fed “save the bank” efforts in early 2008. Eliot Spitzer pointed to clear conflicts of interest regarding Jeff Immelt. You’d expect the Federal Reserve Board in DC to put a stop to this, but so far, it has allowed Wylde to continue in her role.
Wylde’s open opposition to New York attorney general Eric Schneiderma’s objecting to a proposed $8.5 billion Bank of America mortgage settlement appears to run afoul of these NY Fed bylaws.
“As a Reserve Bank directorship is a form of public service, directors also must limit their participation in partisan politics. Specifically, directors should not engage in any political activity or serve in any public office where such activity or service might:
associate the Reserve Bank with any political party or partisan political activity;
raise questions as to the director’s independence and ability to perform the duties of his or her position with the System; or
bring embarrassment to the Reserve Bank or the Federal Reserve System.
She’s violated these quite clearly. Meddling in the work of a law enforcement officer is obviously embarrassing and risks the independence of the system. That Bank of New York Mellon is openly referring reporters to her shows that she is not operating independently, or even on behalf of the public. Whether that’s a firing offense is up to Bernanke and company.
Just checking into Kathryn Wylde’s background shows that she’s a standard issue Rubinite who wants to sell out America to bankers and Chinese elites. As head of the Partnership for New York City, she went after unions by attacking education expert Diane Ravitch (aligning her with Obama Education Secretary Arne Duncan to complement her alliance with HUD Secretary Shaun Donovan). Wylde opposes a living wage for New Yorkers, as well as paid sick leave. Not letting employees go home when they are sick is unsanitary, dangerous and authoritarian. These positions are literally pro-poverty.
But nothing screams “I represent America” like this post of hers.
Within a generation, the U.S. will no longer be the world’s largest economy. Partnerships with foreign-controlled businesses and investors will be more important than ever. China will be larger and is already the most important market for U.S.-based international businesses. Chinese leadership is fed up with U.S. policies and politics that discourage foreign investment in business and real estate, at the same time their country is holding much of our national debt.
Locally, New York is trying to counter this negative sentiment by supporting investment by one of China’s largest real estate companies in five floors of the Freedom Tower that is being constructed on the World Trade Center site. The Beijing-based Vantone Group will develop a 200,000 square foot business and conference center designed to encourage business ties between the two nations and to house the Western headquarters of Chinese companies that are going global.
And let’s be clear – Wylde is excited that this deal is approved by the Communist Chinese government, which is explicitly trying to reduce America’s wealth and power. And this woman is on the board of the New York Fed representing the public. So there you have it. If you feel like American multinationals are too warm and fuzzy for your tastes, you have Kathryn Wylde out there representing you at the New York Fed, making sure that Chinese multinationals are waiting in the wings to take over for them. That, of course, assumes there is anything left worth having in the US once the big financial players are done with their looting.
The elite consensus in American politics is held together by a small group of well-paid and well-connected insiders who are marbled throughout the world of corporations, banks, government service, and elite nonprofits. Who are they? And what do they believe?
One way to start is to look at who is being recruited to attack Eric Schneiderman, the liberal New York Attorney General going after the big banks. Normally these people stay behind the scenes, but in this case, we’re getting a nice peak behind the curtain. The best example so far is Kathryn Wylde, the chief of the nonprofit Partnership for New York City, a big bank/corporate-funded lobbying group that advises political officials on how to build a more business-friendly New York.
Wylde, importantly, sits on the Board of the New York Federal Reserve as a Class C Director, the group that is supposed to represent “the public”. Yet, after Schneiderman got into a contentious legal fight with Bank of New York Mellon over foreclosure fraud, the bank literally referred reporters to Wylde for her comment. She even went so far as to confront Schneiderman at a funeral. Because she’s a director of the New York Fed, her actions reflect on the Fed. Let’s start there. Wylde is appointed, and can be fired, by the Federal Reserve Board in Washington, DC, according to Section 11(f) of the Federal Reserve Act (these Board members are Ben Bernanke, Janet Yellen, Elizabeth Duke, Dan Tarullo, and Sarah Bloom Raskin).
Should she be fired? Let’s look at the facts. Wylde is subject to this restriction in the Federal Reserve Act.
“Class C Directors as Employees or Stockholders of Banks No director of class C shall be an officer, director, employee, or stockholder of any bank.”
The odds are high that she owns mutual funds or bank shares. She made $466,000 last year. Unless she has profligate spending habits, or is unusually risk averse, she probably has a decent sized investment portfolio, and if she invested along orthodox lines, a chunk of it would be diversified holdings of domestic stock, which would have to include bank shares. The NY Fed is pretty sloppy about its ethics issues. For instance, former NY Fed class C director and ex-Goldman co-chariman, Steve Friedman, bought Goldman shares while privy to and probably influencing Fed “save the bank” efforts in early 2008. Eliot Spitzer pointed to clear conflicts of interest regarding Jeff Immelt. You’d expect the Federal Reserve Board in DC to put a stop to this, but so far, it has allowed Wylde to continue in her role.
Wylde’s open opposition to New York attorney general Eric Schneiderma’s objecting to a proposed $8.5 billion Bank of America mortgage settlement appears to run afoul of these NY Fed bylaws.
“As a Reserve Bank directorship is a form of public service, directors also must limit their participation in partisan politics. Specifically, directors should not engage in any political activity or serve in any public office where such activity or service might:
associate the Reserve Bank with any political party or partisan political activity;
raise questions as to the director’s independence and ability to perform the duties of his or her position with the System; or
bring embarrassment to the Reserve Bank or the Federal Reserve System.
She’s violated these quite clearly. Meddling in the work of a law enforcement officer is obviously embarrassing and risks the independence of the system. That Bank of New York Mellon is openly referring reporters to her shows that she is not operating independently, or even on behalf of the public. Whether that’s a firing offense is up to Bernanke and company.
Just checking into Kathryn Wylde’s background shows that she’s a standard issue Rubinite who wants to sell out America to bankers and Chinese elites. As head of the Partnership for New York City, she went after unions by attacking education expert Diane Ravitch (aligning her with Obama Education Secretary Arne Duncan to complement her alliance with HUD Secretary Shaun Donovan). Wylde opposes a living wage for New Yorkers, as well as paid sick leave. Not letting employees go home when they are sick is unsanitary, dangerous and authoritarian. These positions are literally pro-poverty.
But nothing screams “I represent America” like this post of hers.
Within a generation, the U.S. will no longer be the world’s largest economy. Partnerships with foreign-controlled businesses and investors will be more important than ever. China will be larger and is already the most important market for U.S.-based international businesses. Chinese leadership is fed up with U.S. policies and politics that discourage foreign investment in business and real estate, at the same time their country is holding much of our national debt.
Locally, New York is trying to counter this negative sentiment by supporting investment by one of China’s largest real estate companies in five floors of the Freedom Tower that is being constructed on the World Trade Center site. The Beijing-based Vantone Group will develop a 200,000 square foot business and conference center designed to encourage business ties between the two nations and to house the Western headquarters of Chinese companies that are going global.
And let’s be clear – Wylde is excited that this deal is approved by the Communist Chinese government, which is explicitly trying to reduce America’s wealth and power. And this woman is on the board of the New York Fed representing the public. So there you have it. If you feel like American multinationals are too warm and fuzzy for your tastes, you have Kathryn Wylde out there representing you at the New York Fed, making sure that Chinese multinationals are waiting in the wings to take over for them. That, of course, assumes there is anything left worth having in the US once the big financial players are done with their looting.
Tuesday, August 30, 2011
Monday, August 29, 2011
A Huge Housing Bargain -- but Not for You
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/reo/mm/mminfoBy Roger Arnold
thestreet.com
The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.
These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.
In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
On Wednesday, the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD) and the U.S. Treasury Department issued a Request for Information (RFI) concerning the disposition of the inventory of foreclosed homes owned by the federal government.
An RFI is ostensibly a way for the federal government to get input from the private sector on how to accomplish the goals laid out in the request. But that's really just a facade, as the RFI was structured by the investors to begin with.
In reality, the RFI is a way for the members of Congress to find out if they can get away with bulk-selling these homes to private companies without incurring the wrath of their constituents, taxpayers and former owners of the properties.
Assuming taxpayers don't push back, the next step will be to issue a Request for Proposals (RFP). The RFP will be the bid and plan for these homes by investors.
The way to keep taxpayers from pushing back is to structure the RFI so that the real intention, the bulk sales, is masked by feel-good goals, such as stabilizing neighborhoods and increasing the supply of rental properties.
As intended, the mass media are playing their part in classic style. Every major newspaper in the U.S. has run articles discussing the plan as a rental conversion, allowing readers to assume that Fannie, Freddie and HUD will be renting the properties directly to families who need housing. And although there is an allowance for these kinds of rentals, it is a minor political facade to the obvious true goal of bulk-sale privatization of these homes.
The investors in this program have been waiting for this opportunity since the portfolio of homes owned by HUD began to spike in 2007, when foreclosures surged first in the "Rust Belt," principally Ohio and Michigan.
Since then, of course, the systemic collapse of housing has engulfed all of the major urban coastal regions of the U.S., as well as Phoenix and Las Vegas, and caused the homes owned by Fannie Mae and Freddie Mac, which are now under the direct control of the U.S. Treasury Department, to spike as well.
Even before this crisis occurred, HUD, i.e. the U.S. government, was the largest improved real estate owner in the world, because of its portfolio of foreclosed homes, which is classified as "real estate owned" (REO). The entire massive HUD REO Portfolio is quietly managed by a handful of private firms already, a group listed as Management and Marketing Contractors.
These M&M companies are principally owned by and employ former high-ranking government officials from the various germane agencies -- the Treasury, HUD, FHA and others. And they will provide the necessary access to the current government employees who are tasked with bringing this program to fruition. Once the privatization is complete, those government employees will move from their positions, and many will take up new employment at one of the M&Ms or the new vulture funds.
I am not currently aware of any way for retail investors to participate in this process.
It is probable, however, that once the privatization has occurred and the properties are generating rental income for the investors, the initial investors will cash out by forming real estate investment trusts (REITs), real estate operating companies (REOCs) or limited partnerships (LPs) that will be made available to retail investors.
thestreet.com
The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.
These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.
You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS_) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.
In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
On Wednesday, the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD) and the U.S. Treasury Department issued a Request for Information (RFI) concerning the disposition of the inventory of foreclosed homes owned by the federal government.
An RFI is ostensibly a way for the federal government to get input from the private sector on how to accomplish the goals laid out in the request. But that's really just a facade, as the RFI was structured by the investors to begin with.
In reality, the RFI is a way for the members of Congress to find out if they can get away with bulk-selling these homes to private companies without incurring the wrath of their constituents, taxpayers and former owners of the properties.
Assuming taxpayers don't push back, the next step will be to issue a Request for Proposals (RFP). The RFP will be the bid and plan for these homes by investors.
The way to keep taxpayers from pushing back is to structure the RFI so that the real intention, the bulk sales, is masked by feel-good goals, such as stabilizing neighborhoods and increasing the supply of rental properties.
As intended, the mass media are playing their part in classic style. Every major newspaper in the U.S. has run articles discussing the plan as a rental conversion, allowing readers to assume that Fannie, Freddie and HUD will be renting the properties directly to families who need housing. And although there is an allowance for these kinds of rentals, it is a minor political facade to the obvious true goal of bulk-sale privatization of these homes.
The investors in this program have been waiting for this opportunity since the portfolio of homes owned by HUD began to spike in 2007, when foreclosures surged first in the "Rust Belt," principally Ohio and Michigan.
Since then, of course, the systemic collapse of housing has engulfed all of the major urban coastal regions of the U.S., as well as Phoenix and Las Vegas, and caused the homes owned by Fannie Mae and Freddie Mac, which are now under the direct control of the U.S. Treasury Department, to spike as well.
Even before this crisis occurred, HUD, i.e. the U.S. government, was the largest improved real estate owner in the world, because of its portfolio of foreclosed homes, which is classified as "real estate owned" (REO). The entire massive HUD REO Portfolio is quietly managed by a handful of private firms already, a group listed as Management and Marketing Contractors.
These M&M companies are principally owned by and employ former high-ranking government officials from the various germane agencies -- the Treasury, HUD, FHA and others. And they will provide the necessary access to the current government employees who are tasked with bringing this program to fruition. Once the privatization is complete, those government employees will move from their positions, and many will take up new employment at one of the M&Ms or the new vulture funds.
I am not currently aware of any way for retail investors to participate in this process.
It is probable, however, that once the privatization has occurred and the properties are generating rental income for the investors, the initial investors will cash out by forming real estate investment trusts (REITs), real estate operating companies (REOCs) or limited partnerships (LPs) that will be made available to retail investors.
Secret Exemptions Allowed Speculators to Distort Futures Markets
Michael Greenberger (former Chief of Staff to Brooksley Born): Secret deals with CFTC staff led to futures markets with 80% speculation.
Why is the Government Driving Folks Off Their Land?
By Zach Weissmueller & Tim Cavanaugh
Is this the people we vote to be a public servant in LA County ???
Arrogance, impunity, disregard for the constituents, and hiding behind code violations to pick on the the people who are the most defenseless and have the least resources.
Is this the people we vote to be a public servant in LA County ???
Arrogance, impunity, disregard for the constituents, and hiding behind code violations to pick on the the people who are the most defenseless and have the least resources.
The Rothschild Spring
By LetThemFail
The Rothschild Spring taking place in the MENA (Middle East, North Africa) region is all about the false promise of democratic socialism: economic justice and the redistribution of wealth.
But if the ecstatic ”rebels” shaking their rifles above their heads think the real wealth is being shifted to them, they should take America’s lesson about “something for nothing” to heart. The Islamic banks, which do not fall under the BIS central banking oligarchy by choice, will now gradually “fall” under it’s military arm – NATO – by force.
You will not see 80% or more of gold deals. If it was done with all to see the discount value would be lost as the world price would explode. This is not the realm of any public “Wall Street”. Wars will be fought over the lack of “visibility” of these dealings.
To “democratize” this region is merely a matter of confiscating the gold that its oil was bought with, to support the systemic run on paper gold, now revealing itself through the collapsing fiat system. In that process, the “people” willingly trade sovereignty for the illusion of prosperity through debt, while the real wealth in physical gold is shifted West.
Add Venezuela to the list of state-owned central banks, not yet assimilated into Rothschild’s BIS collective.
I do believe it’s time for another North Atlantic joint venture. Black OPS always precedes NATO.
For the people of the region to chose which master they are enslaved to is really just a matter of power and propaganda. False promises buy allegiance there just as they do here. But resistance to the collective is NOT futile. Not there and not here.
Against the superpowers of Fabian fiat paper, gold is our Kryptonite.
The Rothschild Spring taking place in the MENA (Middle East, North Africa) region is all about the false promise of democratic socialism: economic justice and the redistribution of wealth.
But if the ecstatic ”rebels” shaking their rifles above their heads think the real wealth is being shifted to them, they should take America’s lesson about “something for nothing” to heart. The Islamic banks, which do not fall under the BIS central banking oligarchy by choice, will now gradually “fall” under it’s military arm – NATO – by force.
You will not see 80% or more of gold deals. If it was done with all to see the discount value would be lost as the world price would explode. This is not the realm of any public “Wall Street”. Wars will be fought over the lack of “visibility” of these dealings.
To “democratize” this region is merely a matter of confiscating the gold that its oil was bought with, to support the systemic run on paper gold, now revealing itself through the collapsing fiat system. In that process, the “people” willingly trade sovereignty for the illusion of prosperity through debt, while the real wealth in physical gold is shifted West.
Add Venezuela to the list of state-owned central banks, not yet assimilated into Rothschild’s BIS collective.
I do believe it’s time for another North Atlantic joint venture. Black OPS always precedes NATO.
For the people of the region to chose which master they are enslaved to is really just a matter of power and propaganda. False promises buy allegiance there just as they do here. But resistance to the collective is NOT futile. Not there and not here.
Against the superpowers of Fabian fiat paper, gold is our Kryptonite.
Soros and U.S. Trained Activists in Libya Egypt Bahrain Syria Tunisia Etc To Kill Islamic Banking
By puppet99.com
Islamic banks have been eating into the profits of conventional banks in the Middle East because: they don’t charge interest (Shariah Law), they are growing very rapidly, and (in these catastrophic economic times) they are more stable than western banks.
The New York Times article “Islamic banking rises on oil wealth, drawing non-Muslims” ( November 22, 2007) reported: “Rising oil wealth is lifting Islamic banking – which adheres to the laws of the Koran and its prohibition against charging interest – into the financial mainstream. . . . In addition to Islamic loans, there are Islamic bonds, Islamic credit cards …In Islamic banking, financiers are required to share borrowers’ risks, meaning that depositors are treated more like shareholders, earning a portion of profits. …And while the biggest Islamic banks are in the wealthy Gulf states, the most attractive potential markets are in Turkey and North Africa (emphasis added) and among European Muslims… .”
Most people of the world prefer the conventional banking model. They don’t mind paying 20% interest on small loans (credit card). They don’t want to share in their bank’s profits: they want their banks to grow even bigger and stronger and more powerful to compete on international markets. They don’t mind paying income tax to bail out monster banks (i.e. too big to fail) for their bad gambling debts (i.e. TARP in U.S.) [and because that bail out is added to the government’s debt, they don’t mind paying interest on the bail out to the Federal Reserve (whose policies created the crisis)]. They don’t mind children dying in Africa due to third-world usury (countries that can’t pay down the principle have gone further into debt instead of declaring bankruptcy).
With the support of their governments, Islamic Finance is the fastest growing sector in the MENA region (Middle East North Africa) with huge business opportunities ahead in the untapped Muslim populations in many countries. Middle East regimes threaten to derail the forces of globalization and unseat traditional banking because Islam is setting up an attractive alternate model to conventional banking. Suffering a setback after the “Battle in Seattle”, the globalists have wrapped themselves in the cloak of democracy to further their agenda. Conventional western bankers see regime change in the Middle East as an imperative to competing with the success of the Islamic banking system (Henry, Clement Moore, PhD. and Robert Springborg. Globalization and the politics of development in the Middle East, Cambridge University Press, 2001, 2nd edition 2010).
In their Islamic Finance Outlook 2010 , Standard and Poor’s says, “Competition Is Mounting, With Conventional Banks’ Islamic Windows Actively Challenging Fully-Fledged Islamic Banks: Pioneering Islamic banks that have managed to acquire quasi-monopolies in their domestic niche markets are now facing stiff competition in our opinion. Their first mover advantage is shrinking in their domestic markets and we understand they are now looking at business and/or geographic diversification strategies. Conventional banks entering Islamic banking currently constitute the most active competitive threat to established Islamic banks. …”
Late in 2008, French Finance Minister Christine Lagarde announced France’s intention to make Paris “the capital of Islamic finance” and said several Islamic banks would open branches in the French capital in 2009. French sources estimate this area of the financial market is worth from 500 to 600 billion dollars and could grow by an average 11 percent a year.
John Sandwick, managing director of Swiss asset management firm Encore Management, characterized the opening of several Swiss Islamic banks as, “the race to control the rich prize: which today is worth hundreds of billions, but in the future will be trillions of dollars of Islamic wealth.”
Reporting on material from Wikileaks, The Telegraph (Islamic Finance Key To Ensuring London As Top Financial Center) reported that Robert Tuttle, the then US ambassador to the Court of St. James in London as stating “Should London successfully position itself as a leading Islamic finance center, it could gain an edge on New York, when the global financial markets recover. . . . Prospects for growth from a Standard & Poor forecast [see above], assesses the [Islamic Finance] industry to potentially contain up to $4 trillion of assets. Other estimates put growth figures even higher, since Muslims account for 20 percent of the world population. Presently only about 1 percent of global financial assets are controlled under finance compliant with Islamic law.”
Islamic banking is not yet established in North Africa (except in Sudan) and Egypt where large Muslim populations represent a very lucrative opportunity for Islamic banking in these emerging economies. “However, despite the current poor climate, the potential for Islamic banking in Egypt is huge,” states Executive Magazine (Feb 8 2011), “ … Clearly Islamic banks in the Gulf are already anticipating the day when their home markets are saturated. And it appears that Egypt will be on the next front-line in the development of regional Islamic banking and finance.”
“African countries such as Algeria, Egypt, Libya, Morocco, Tunisia and Sudan are keen on future sukuk exercises (issuing Islamic bonds),” [International Finance Review (Reuters), 2008]
ROTHSCHILDS/U.S. FINANCE REVOLUTIONS IN PLAIN SITE
(This portion was in the previous post. If you read it already, please scroll down to the table analyzing the banking profile and activist training in each country)
The MENA (Middle East North Africa) revolutions are from the same playbook as the nonviolent “color revolutions”. The playbook is From Dictatorship To Democracy by Gene Sharp of the Albert Einstein Institute (funded partially by George Soros). These revolutions have been successful in Serbia [especially the Bulldozer Revolution (2000)], in Georgia’s Rose Revolution (2003), in Ukraine’s Orange Revolution (2004), in Lebanon’s Cedar Revolution and in Kyrgyzstan’s Tulip Revolution (2005). Iran’s Green Revolution (2009) was unsuccessful.
The Guardian reported (Nov 26, 2004) that the following were “directly involved” in organizing the color revolutions: George Soros’ Open Society Institute, the National Endowment for Democracy (NED), the International Republican Institute, and Freedom House. The Washington Post and the New York Times also reported substantial Western involvement in some of these events. The network for this strategy is outlined in the Carnegie Endowment For International Peace’s Fact-Sheet: U.S. Actors Promoting Democracy In The Middle East. The nature of the programs is described below:
In 2007-08, Freedom House [funded by Soros and the Middle Eastern Partnership Initiative (MEPI)] ran the following program: “New Generation of Advocates, a MEPI-funded program that supports young civil society activists working for peaceful political change in the Middle East and North Africa, spearheaded the “Lawyers against Corruption” campaign in Tunisia.”(Freedom House website). The group of “journalists, lawyers, and other activists who advocate for democratic reform” had a meeting with then Secretary of State Condoleezza Rice, on a trip to Washington on International Human Rights Day, December 10, 2008. In May 2009, U.S. Secretary of State Hillary Clinton met with the group of activist/dissidents. Freedom House reported on their website that the group also visited “U.S. government officials, members of Congress, media outlets and think tanks . . . After returning to Egypt, the fellows received small grants to implement innovative initiatives such as advocating for political reform through Facebook and SMS messaging.” (emphasis added)
In 2010, Soros’ Open Society Institute funded a grant called ‘Can It Tweet its way to Democracy? The promise of Participatory Media in Africa’ described on the OSI website as being focused in Ethiopia and Egypt.
Facebook and Twitter were the primary means of organizing the revolution in Egypt: “Activists from Egypt’s Kifaya (Enough) movement – a coalition of government opponents – and the 6th of April Youth Movement organized the protests on Facebook and Twitter . . . .” (Voice of America)
In the Foreign Policy Journal, Dr. D.K. Bolton (Jan 19 2011) writes, “NED [National Endowment for Democracy] and Soros work in tandem, targeting the same regimes and using the same methods. . . . At least ten of the twenty-two directors of NED are also members of the plutocratic think tank, the Council on Foreign Relations . . . .” (The Council of Foreign Relations is the American sister of the Rothschild’s Royal Institute of International Affairs in Britain: both are instruments of plutocratic control hiding in plain sight.)
NED is funded by the U.S. government and private interests (including George Soros). The following are quotes from the NED website from a few 2009 projects:
“Al-Jahedh Forum for Free Thought $131,000 To strengthen the capacity and build a democratic culture among Tunisian youth activists.”
“Mohamed Ali Center for Research, Studies and Training $33,500 To train a core group of Tunisian youth activists on leadership and organizational skills to encourage their involvement in public life. [MACRST] will conduct a four-day intensive training of trainers program for a core group of 10 young Tunisian civic activists on leadership and organizational skills; train 50 male and female activists aged 20 to 40 on leadership and empowered decision-making; and work with the trained activists through 50 on-site visits to their respective organizations.”
“Association for the Promotion of Education $27,000 To strengthen the capacity of Tunisian high school teachers to promote democratic and civic values in their classrooms.”
“Al-Jahedh Forum for Free Thought $57,000 [in 2008] To train Tunisian activists.”
In Egypt, the number of NED grants doubled in 2009 to 33 democracy projects totaling $1.4 million and the focus changed from promoting private enterprise to training young human-rights lawyers, and identifying and training youth activists:
“Egyptian Union of Liberal Youth (EULY) $33,300 To expand the use of new media among youth activists for the promotion of democratic ideas and values. EULY will train 60 youth activists to use filmmaking for the dissemination of democratic ideas and values.”
“Andalus Institute for Tolerance and Anti-Violence Studies (AITAS) $48,900 To strengthen youth understanding of the Egyptian parliament and enhance regional activists’ use of new technologies as accountability tools. AITAS will conduct a series of workshops for 300 university students to raise their awareness of parliament’s functions and engage them in monitoring parliamentary committees. AITAS will also host 8 month-long internships for youth activists from the Middle East and North Africa to share its experiences using web-based technologies in monitoring efforts.”
”Egyptian Democracy Institute (EDI) $48,900 To promote accountability and transparency in parliament through public participation, and to build legislative capacity. EDI will produce quarterly monitoring reports and hold seminars to discuss the overall performance of Parliament and offer recommendations on legislation proposed in the People’s Assembly. EDI will monitor, collect, and document evidence of corruption in Cairo and Alexandria.”
“Lawyers Union for Democratic and Legal Studies (LUDLS) $20,000 To support freedom of association by strengthening young activists’ ability to express and organize themselves peacefully within the bounds of the law. LUDLS will train 250 youth activists on peaceful assembly and dispute resolution”
“Youth Forum $19,000 To expand and maintain a network of youth activists on Egyptian university campuses and to encourage the participation of university students in student union elections and civic activities on campus. . . .”
—————————————————————————
George Soros is a wealthy, billionaire globalist. His long-time trading partner was the late James Goldsmith, British banker and cousin to the Rothschilds. James’ grandfather Adolphe Goldschmidt came to London as a multi-millionaire in 1895 and changed the family name from the German Goldschmidt to the English Goldsmith. The Goldschmidts, like their neighbors and relatives the Rothschilds, had been prosperous merchant bankers in Frankfurt Germany since the 16th century (Wikipedia).
These revolutions are done under the pretense of bringing democracy and deposing despots, but the real aim is to initially create chaos and a leadership vacuum, then quickly offer a solution: install a puppet that will do the economic bidding of the Rothschilds. The citizens gain civil liberties, but become economic serfs.
These revolutions are most likely coordinated at the highest levels by the International Crisis Group. Mohamed ElBaradei is already being touted as a new leader for Egypt. ElBaradei is a trustee of the International Crisis Group. Another board member of this group is Zbigniew Brzezinski (another frontman for the Rothschilds). George Soros also sits on the executive committee.
TABLE I: COUNTRY BY COUNTRY ANALYSIS OF ISLAMIC FINANCE AND ACTIVIST TRAINING
(For the exact figures for this table plus oil reserves, and sources see the page on this topic in the menu on the right)
keep reading the post: http://www.puppet99.com/?p=218
Islamic banks have been eating into the profits of conventional banks in the Middle East because: they don’t charge interest (Shariah Law), they are growing very rapidly, and (in these catastrophic economic times) they are more stable than western banks.
The New York Times article “Islamic banking rises on oil wealth, drawing non-Muslims” ( November 22, 2007) reported: “Rising oil wealth is lifting Islamic banking – which adheres to the laws of the Koran and its prohibition against charging interest – into the financial mainstream. . . . In addition to Islamic loans, there are Islamic bonds, Islamic credit cards …In Islamic banking, financiers are required to share borrowers’ risks, meaning that depositors are treated more like shareholders, earning a portion of profits. …And while the biggest Islamic banks are in the wealthy Gulf states, the most attractive potential markets are in Turkey and North Africa (emphasis added) and among European Muslims… .”
Most people of the world prefer the conventional banking model. They don’t mind paying 20% interest on small loans (credit card). They don’t want to share in their bank’s profits: they want their banks to grow even bigger and stronger and more powerful to compete on international markets. They don’t mind paying income tax to bail out monster banks (i.e. too big to fail) for their bad gambling debts (i.e. TARP in U.S.) [and because that bail out is added to the government’s debt, they don’t mind paying interest on the bail out to the Federal Reserve (whose policies created the crisis)]. They don’t mind children dying in Africa due to third-world usury (countries that can’t pay down the principle have gone further into debt instead of declaring bankruptcy).
With the support of their governments, Islamic Finance is the fastest growing sector in the MENA region (Middle East North Africa) with huge business opportunities ahead in the untapped Muslim populations in many countries. Middle East regimes threaten to derail the forces of globalization and unseat traditional banking because Islam is setting up an attractive alternate model to conventional banking. Suffering a setback after the “Battle in Seattle”, the globalists have wrapped themselves in the cloak of democracy to further their agenda. Conventional western bankers see regime change in the Middle East as an imperative to competing with the success of the Islamic banking system (Henry, Clement Moore, PhD. and Robert Springborg. Globalization and the politics of development in the Middle East, Cambridge University Press, 2001, 2nd edition 2010).
In their Islamic Finance Outlook 2010 , Standard and Poor’s says, “Competition Is Mounting, With Conventional Banks’ Islamic Windows Actively Challenging Fully-Fledged Islamic Banks: Pioneering Islamic banks that have managed to acquire quasi-monopolies in their domestic niche markets are now facing stiff competition in our opinion. Their first mover advantage is shrinking in their domestic markets and we understand they are now looking at business and/or geographic diversification strategies. Conventional banks entering Islamic banking currently constitute the most active competitive threat to established Islamic banks. …”
Late in 2008, French Finance Minister Christine Lagarde announced France’s intention to make Paris “the capital of Islamic finance” and said several Islamic banks would open branches in the French capital in 2009. French sources estimate this area of the financial market is worth from 500 to 600 billion dollars and could grow by an average 11 percent a year.
John Sandwick, managing director of Swiss asset management firm Encore Management, characterized the opening of several Swiss Islamic banks as, “the race to control the rich prize: which today is worth hundreds of billions, but in the future will be trillions of dollars of Islamic wealth.”
Reporting on material from Wikileaks, The Telegraph (Islamic Finance Key To Ensuring London As Top Financial Center) reported that Robert Tuttle, the then US ambassador to the Court of St. James in London as stating “Should London successfully position itself as a leading Islamic finance center, it could gain an edge on New York, when the global financial markets recover. . . . Prospects for growth from a Standard & Poor forecast [see above], assesses the [Islamic Finance] industry to potentially contain up to $4 trillion of assets. Other estimates put growth figures even higher, since Muslims account for 20 percent of the world population. Presently only about 1 percent of global financial assets are controlled under finance compliant with Islamic law.”
Islamic banking is not yet established in North Africa (except in Sudan) and Egypt where large Muslim populations represent a very lucrative opportunity for Islamic banking in these emerging economies. “However, despite the current poor climate, the potential for Islamic banking in Egypt is huge,” states Executive Magazine (Feb 8 2011), “ … Clearly Islamic banks in the Gulf are already anticipating the day when their home markets are saturated. And it appears that Egypt will be on the next front-line in the development of regional Islamic banking and finance.”
“African countries such as Algeria, Egypt, Libya, Morocco, Tunisia and Sudan are keen on future sukuk exercises (issuing Islamic bonds),” [International Finance Review (Reuters), 2008]
ROTHSCHILDS/U.S. FINANCE REVOLUTIONS IN PLAIN SITE
(This portion was in the previous post. If you read it already, please scroll down to the table analyzing the banking profile and activist training in each country)
The MENA (Middle East North Africa) revolutions are from the same playbook as the nonviolent “color revolutions”. The playbook is From Dictatorship To Democracy by Gene Sharp of the Albert Einstein Institute (funded partially by George Soros). These revolutions have been successful in Serbia [especially the Bulldozer Revolution (2000)], in Georgia’s Rose Revolution (2003), in Ukraine’s Orange Revolution (2004), in Lebanon’s Cedar Revolution and in Kyrgyzstan’s Tulip Revolution (2005). Iran’s Green Revolution (2009) was unsuccessful.
The Guardian reported (Nov 26, 2004) that the following were “directly involved” in organizing the color revolutions: George Soros’ Open Society Institute, the National Endowment for Democracy (NED), the International Republican Institute, and Freedom House. The Washington Post and the New York Times also reported substantial Western involvement in some of these events. The network for this strategy is outlined in the Carnegie Endowment For International Peace’s Fact-Sheet: U.S. Actors Promoting Democracy In The Middle East. The nature of the programs is described below:
In 2007-08, Freedom House [funded by Soros and the Middle Eastern Partnership Initiative (MEPI)] ran the following program: “New Generation of Advocates, a MEPI-funded program that supports young civil society activists working for peaceful political change in the Middle East and North Africa, spearheaded the “Lawyers against Corruption” campaign in Tunisia.”(Freedom House website). The group of “journalists, lawyers, and other activists who advocate for democratic reform” had a meeting with then Secretary of State Condoleezza Rice, on a trip to Washington on International Human Rights Day, December 10, 2008. In May 2009, U.S. Secretary of State Hillary Clinton met with the group of activist/dissidents. Freedom House reported on their website that the group also visited “U.S. government officials, members of Congress, media outlets and think tanks . . . After returning to Egypt, the fellows received small grants to implement innovative initiatives such as advocating for political reform through Facebook and SMS messaging.” (emphasis added)
In 2010, Soros’ Open Society Institute funded a grant called ‘Can It Tweet its way to Democracy? The promise of Participatory Media in Africa’ described on the OSI website as being focused in Ethiopia and Egypt.
Facebook and Twitter were the primary means of organizing the revolution in Egypt: “Activists from Egypt’s Kifaya (Enough) movement – a coalition of government opponents – and the 6th of April Youth Movement organized the protests on Facebook and Twitter . . . .” (Voice of America)
In the Foreign Policy Journal, Dr. D.K. Bolton (Jan 19 2011) writes, “NED [National Endowment for Democracy] and Soros work in tandem, targeting the same regimes and using the same methods. . . . At least ten of the twenty-two directors of NED are also members of the plutocratic think tank, the Council on Foreign Relations . . . .” (The Council of Foreign Relations is the American sister of the Rothschild’s Royal Institute of International Affairs in Britain: both are instruments of plutocratic control hiding in plain sight.)
NED is funded by the U.S. government and private interests (including George Soros). The following are quotes from the NED website from a few 2009 projects:
“Al-Jahedh Forum for Free Thought $131,000 To strengthen the capacity and build a democratic culture among Tunisian youth activists.”
“Mohamed Ali Center for Research, Studies and Training $33,500 To train a core group of Tunisian youth activists on leadership and organizational skills to encourage their involvement in public life. [MACRST] will conduct a four-day intensive training of trainers program for a core group of 10 young Tunisian civic activists on leadership and organizational skills; train 50 male and female activists aged 20 to 40 on leadership and empowered decision-making; and work with the trained activists through 50 on-site visits to their respective organizations.”
“Association for the Promotion of Education $27,000 To strengthen the capacity of Tunisian high school teachers to promote democratic and civic values in their classrooms.”
“Al-Jahedh Forum for Free Thought $57,000 [in 2008] To train Tunisian activists.”
In Egypt, the number of NED grants doubled in 2009 to 33 democracy projects totaling $1.4 million and the focus changed from promoting private enterprise to training young human-rights lawyers, and identifying and training youth activists:
“Egyptian Union of Liberal Youth (EULY) $33,300 To expand the use of new media among youth activists for the promotion of democratic ideas and values. EULY will train 60 youth activists to use filmmaking for the dissemination of democratic ideas and values.”
“Andalus Institute for Tolerance and Anti-Violence Studies (AITAS) $48,900 To strengthen youth understanding of the Egyptian parliament and enhance regional activists’ use of new technologies as accountability tools. AITAS will conduct a series of workshops for 300 university students to raise their awareness of parliament’s functions and engage them in monitoring parliamentary committees. AITAS will also host 8 month-long internships for youth activists from the Middle East and North Africa to share its experiences using web-based technologies in monitoring efforts.”
”Egyptian Democracy Institute (EDI) $48,900 To promote accountability and transparency in parliament through public participation, and to build legislative capacity. EDI will produce quarterly monitoring reports and hold seminars to discuss the overall performance of Parliament and offer recommendations on legislation proposed in the People’s Assembly. EDI will monitor, collect, and document evidence of corruption in Cairo and Alexandria.”
“Lawyers Union for Democratic and Legal Studies (LUDLS) $20,000 To support freedom of association by strengthening young activists’ ability to express and organize themselves peacefully within the bounds of the law. LUDLS will train 250 youth activists on peaceful assembly and dispute resolution”
“Youth Forum $19,000 To expand and maintain a network of youth activists on Egyptian university campuses and to encourage the participation of university students in student union elections and civic activities on campus. . . .”
—————————————————————————
George Soros is a wealthy, billionaire globalist. His long-time trading partner was the late James Goldsmith, British banker and cousin to the Rothschilds. James’ grandfather Adolphe Goldschmidt came to London as a multi-millionaire in 1895 and changed the family name from the German Goldschmidt to the English Goldsmith. The Goldschmidts, like their neighbors and relatives the Rothschilds, had been prosperous merchant bankers in Frankfurt Germany since the 16th century (Wikipedia).
These revolutions are done under the pretense of bringing democracy and deposing despots, but the real aim is to initially create chaos and a leadership vacuum, then quickly offer a solution: install a puppet that will do the economic bidding of the Rothschilds. The citizens gain civil liberties, but become economic serfs.
These revolutions are most likely coordinated at the highest levels by the International Crisis Group. Mohamed ElBaradei is already being touted as a new leader for Egypt. ElBaradei is a trustee of the International Crisis Group. Another board member of this group is Zbigniew Brzezinski (another frontman for the Rothschilds). George Soros also sits on the executive committee.
TABLE I: COUNTRY BY COUNTRY ANALYSIS OF ISLAMIC FINANCE AND ACTIVIST TRAINING
(For the exact figures for this table plus oil reserves, and sources see the page on this topic in the menu on the right)
keep reading the post: http://www.puppet99.com/?p=218
Are The Banks Ripping People Off?
by Karl Denninger
This is rather stinging indictment....
Once you read the allegations in the cases included in this post, I strongly suspect you will agree that the “ruining lives” in the headline is not an exaggeration. And as important, these two cases, with very similar fact sets, also suggest that these abuses are not mere “mistakes”. These are clearly well established practices that Chase can’t be bothered to clean up, since cleaning them up costs money and letting them continue is more profitable.
Both cases took place in Alabama. In both cases, the borrowers had made every mortgage payment on time. One was a couple with three children, the Barnetts. The second is a widow, Besty Barlow, but her husband was still alive when this ugly saga started.
Read the rest over at Yves blog. Basically, the allegation is that these two people had homes and were making every payment on their mortgage. They were not in arrears. Their homes burned down due to no fault of their own - that is, they didn't commit arson, they had an ordinary house fire.
And there things went sideways - it is alleged Chase intentionally dickered around with the payment from the insurance company, thereby forcing a default that would not have otherwise happened, and then foreclosed, effectively stealing the insurance proceeds and the property.
Yes, Chase is getting sued, as they should be.
The better question is why the OCC isn't in there and why the executives of this organization aren't being led away in irons.
Of course we know the answer, right? The Obama administration, just like the Bush administration, is perfectly happy to watch banks steal.
Literally.
We live today with a literal criminal government.
This is rather stinging indictment....
Once you read the allegations in the cases included in this post, I strongly suspect you will agree that the “ruining lives” in the headline is not an exaggeration. And as important, these two cases, with very similar fact sets, also suggest that these abuses are not mere “mistakes”. These are clearly well established practices that Chase can’t be bothered to clean up, since cleaning them up costs money and letting them continue is more profitable.
Both cases took place in Alabama. In both cases, the borrowers had made every mortgage payment on time. One was a couple with three children, the Barnetts. The second is a widow, Besty Barlow, but her husband was still alive when this ugly saga started.
Read the rest over at Yves blog. Basically, the allegation is that these two people had homes and were making every payment on their mortgage. They were not in arrears. Their homes burned down due to no fault of their own - that is, they didn't commit arson, they had an ordinary house fire.
And there things went sideways - it is alleged Chase intentionally dickered around with the payment from the insurance company, thereby forcing a default that would not have otherwise happened, and then foreclosed, effectively stealing the insurance proceeds and the property.
Yes, Chase is getting sued, as they should be.
The better question is why the OCC isn't in there and why the executives of this organization aren't being led away in irons.
Of course we know the answer, right? The Obama administration, just like the Bush administration, is perfectly happy to watch banks steal.
Literally.
We live today with a literal criminal government.
Sunday, August 28, 2011
Power Politics – What Eric Schneiderman Reveals About Obama
By Matt Stoller, a fellow at the Roosevelt Institute. He is the former Senior Policy Advisor to Rep. Alan Grayson. You can reach him at stoller (at) gmail.com
A lot of people have asked why New York Attorney General Eric Schneiderman is going after the banks as aggressively as he is. It’s almost unbelievable that one lone elected official, who happens to have powerful legal tools at his disposal, is doing something that no one with any serious degree of power has done. So what is the secret? What kind of machinations is he undertaking that no one else has been able to do?
I’ve known Schneiderman for a few years, back when he was a state Senator working to reform the Rockefeller drug laws. And my answer to this question is pretty simple. He wants to. That’s it. Eric Schneiderman is investigating the banks because he thinks it’s the right thing to do. So he’s doing it. This guy has thought about his politics. He wrote an article about how he sees politics in 2008 in the Nation, and in his inaugural speech as NY AG he talked about the need to restore faith in both public and private institutions. Free will still counts for something, apparently.
In all the absurdly stupid punditry, the simple application of free will to our elected officials goes missing. Yeah, Obama got money from Wall Street. But Obama is choosing to pursue a policy of foreclosures and bank bailouts not because of any grand corporate scheme. He just wants to. He thinks it’s the right thing to do, and he’s doing it. If you don’t think it’s the right thing to do, then you shouldn’t be disappointed in him any more than you might have been disappointed in Bush. Obama is not trying to do the opposite of what he’s doing, he’s not repeatedly suckered by Republicans, and he isn’t naive or stupid. Obama is simply doing what he thinks is right. So is Eric Schneiderman. So is Tom Miller. So are any number of elected officials out there.
In positions of power, the best expression I heard is that “up there the air is thin”. That is, you have enormous latitude, if you want to use it. Power can be wielded creatively and effectively on behalf of whatever it is the wielder wants. Now of course there are constraints, plenty of them. Smart politicians spend their time working to maximize the constraints they want to impose and weakening the ones they want to overcome. But the basic Reaganite liberal argument defending supplication towards Obama these days is that Obama is “disappointing”. In this line of thought, powerful corporate interests and Republicans are preventing him from enacting what his real agenda would be were he unfettered by this mean machine. Eric Schneiderman, who is in a far less powerful position as New York Attorney General, shows that this is utter hogwash. Obama is who he is, and anyone who thinks otherwise is selling something.
The banking system is really at the heart of our politics, which is why it’s such a great test of one’s political theory of change. I’ve been following the foreclosure fraud story for a few years now, because it’s the tail end of a massive economy-wide fraud scheme that started as early as 2003. The securitization chain failure can’t be put back in the bottle, the housing system it collapsed is simply too big to bail. So elites keep trying to patch this up the way they have everything else. It isn’t working. And their scheme has been obvious and obviously dishonest. Along with Obama (who I criticized as empty as early as 2004, ratcheting this up to dishonest and authoritarian by 2006-2007), I pointed out that Iowa Attorney General Tom Miller was engaged in serious bad faith only a few months after the negotiations started.
I’m no genius, I just listened to what these people actually said and did. Obama mocks the idea that he is an honest politician, overtly, lying about NAFTA and FISA very early on in power. Miller lied to activists about being willing to put bankers in jail, and then said he was negotiating with banks in secret. It was overt. For Miller, as with Obama, few people really picked up on the lies until recently. Iowa activists who heckled Miller got it, as did Naked Capitalism readers. Now it’s becoming more and more obvious. That’s just how it is, I suppose, people in the establishment are paid to not notice corruption until the harsh glare is too bright.
The crazy thing is that robosigning is apparently still going on. Right now, the “settlement” talks are the equivalent of law enforcement negotiating with a serial killer over whether he’ll get a parking ticket, even as he continually sprays bullets into the neighborhood. Even having these “settlement” talks when the actual crimes haven’t been investigated or a complaint hasn’t been registered should be example enough that this process is rigged as badly as Dodd-Frank. It should not be a surprise that the administration is putting pressure on Eric Schneiderman, that Tom Miller is kicking him out of the club house. That’s who these people are. It’s what they believe in. Just as it should not be a surprise, though it is laudable, that Schneiderman isn’t knuckling under to the administration. I suspect he probably is laughing at the idiocy of Miller’s pressure tactic. I mean, this is a guy going up some of the most powerful entities in the United States: Bank of New York Mellon, Bank of America, the New York Fed, etc. And the Iowa Attorney General isn’t going let him on conference calls? Mmmkay.
When you look closely at most significant areas of government, it becomes clear that the President and his administration are enormously powerful actors who get a lot done. Handing over our national wealth to the banks and to China is not nothing. These people are reorganizing the economy and the political system so that there are no constraints on the oligarchical interests that fund and pay them. That is their goal, it has been their goal from day one (or even before that), and anyone who says otherwise is just wrong or deluding him or herself. Obama spoke at the founding of Robert Rubin’s Hamilton Institute, and his first, and most important by far policy initiative, was his whipping for TARP, a policy that was signed by Bush but could not have passed without Obama getting his party in line. That was his goal, and he’s still pursuing it. The numerous “what happened to Obama” wailing editorials overlook the consistency of his policy agenda, which stretches back years at this point.
If someone worked or works for the Obama administration, or the Department of Justice, or any other executive branch agency, they need to remember their service as a mark of shame for the rest of their lives. Remembering how they participated in this example of how to govern is literally the least they could do for the damage they have caused. I would leave out the small number of people who are there to overtly prevent as much damage as possible, and those who resign or are fired in protest.
For the rest of the Democratic Party, well, reality is just beginning to intrude into the fantasy-land of partisans, even though the 2010 loss should have delivered a searing wake-up call to the failure Obama’s policy agenda. From 2006-2008, the Bush administration’s failures crashed down upon conservatives, and they in many ways could not cope. But their intellectual collapse was bailed out by Obama. Faux liberals are seeing their grand experiment in tatters, though right now they can only admit to feeling disappointed because the recognition that they have been swindled is far too painful. And the recognition for many of the professionals is even more difficult, because they must recognize that they have helped swindle many others and acknowledge the debt they have incurred to their victims. The signs of coming betrayal were there, but in the end it all comes down to judging people based on what they do and who they choose as opponents. And this Democratic partisans did not do, choosing instead a comfortable delusional fantasy-land where foreclosures don’t matter and theft enabled by Obama (and Clinton before him) doesn’t matter.
Eric Schneiderman’s willingness to go after the banks and stand up to the corruption of the Bush and Obama administrations should be a reminder to all of us of this. We have free will. He is doing the right thing for no other reason than because he wants to, because he believes in it. He is going to face serious consequences for this, very nasty stuff. Eliot Spitzer was taken down and his name dragged through mud because of who he took on. Paying ugly costs for standing up is routine, unfortunately, in modern America. And the least powerful among us face far worse consequences than politicians who are embarrassed. But integrity exists, and Schneiderman is showing that free will can be exercised in its service. This fact is true of many people, not just Schneiderman; Bill McKibbin, Jane Hamsher, Dan Choi and others just got arrested in front of the White House to register dissent. So next time someone tells you that you have no choice but to support one of the two branches of the banking party, just remember, you also have free will. And the only person who can take that away from you, is you.
A lot of people have asked why New York Attorney General Eric Schneiderman is going after the banks as aggressively as he is. It’s almost unbelievable that one lone elected official, who happens to have powerful legal tools at his disposal, is doing something that no one with any serious degree of power has done. So what is the secret? What kind of machinations is he undertaking that no one else has been able to do?
I’ve known Schneiderman for a few years, back when he was a state Senator working to reform the Rockefeller drug laws. And my answer to this question is pretty simple. He wants to. That’s it. Eric Schneiderman is investigating the banks because he thinks it’s the right thing to do. So he’s doing it. This guy has thought about his politics. He wrote an article about how he sees politics in 2008 in the Nation, and in his inaugural speech as NY AG he talked about the need to restore faith in both public and private institutions. Free will still counts for something, apparently.
In all the absurdly stupid punditry, the simple application of free will to our elected officials goes missing. Yeah, Obama got money from Wall Street. But Obama is choosing to pursue a policy of foreclosures and bank bailouts not because of any grand corporate scheme. He just wants to. He thinks it’s the right thing to do, and he’s doing it. If you don’t think it’s the right thing to do, then you shouldn’t be disappointed in him any more than you might have been disappointed in Bush. Obama is not trying to do the opposite of what he’s doing, he’s not repeatedly suckered by Republicans, and he isn’t naive or stupid. Obama is simply doing what he thinks is right. So is Eric Schneiderman. So is Tom Miller. So are any number of elected officials out there.
In positions of power, the best expression I heard is that “up there the air is thin”. That is, you have enormous latitude, if you want to use it. Power can be wielded creatively and effectively on behalf of whatever it is the wielder wants. Now of course there are constraints, plenty of them. Smart politicians spend their time working to maximize the constraints they want to impose and weakening the ones they want to overcome. But the basic Reaganite liberal argument defending supplication towards Obama these days is that Obama is “disappointing”. In this line of thought, powerful corporate interests and Republicans are preventing him from enacting what his real agenda would be were he unfettered by this mean machine. Eric Schneiderman, who is in a far less powerful position as New York Attorney General, shows that this is utter hogwash. Obama is who he is, and anyone who thinks otherwise is selling something.
The banking system is really at the heart of our politics, which is why it’s such a great test of one’s political theory of change. I’ve been following the foreclosure fraud story for a few years now, because it’s the tail end of a massive economy-wide fraud scheme that started as early as 2003. The securitization chain failure can’t be put back in the bottle, the housing system it collapsed is simply too big to bail. So elites keep trying to patch this up the way they have everything else. It isn’t working. And their scheme has been obvious and obviously dishonest. Along with Obama (who I criticized as empty as early as 2004, ratcheting this up to dishonest and authoritarian by 2006-2007), I pointed out that Iowa Attorney General Tom Miller was engaged in serious bad faith only a few months after the negotiations started.
I’m no genius, I just listened to what these people actually said and did. Obama mocks the idea that he is an honest politician, overtly, lying about NAFTA and FISA very early on in power. Miller lied to activists about being willing to put bankers in jail, and then said he was negotiating with banks in secret. It was overt. For Miller, as with Obama, few people really picked up on the lies until recently. Iowa activists who heckled Miller got it, as did Naked Capitalism readers. Now it’s becoming more and more obvious. That’s just how it is, I suppose, people in the establishment are paid to not notice corruption until the harsh glare is too bright.
The crazy thing is that robosigning is apparently still going on. Right now, the “settlement” talks are the equivalent of law enforcement negotiating with a serial killer over whether he’ll get a parking ticket, even as he continually sprays bullets into the neighborhood. Even having these “settlement” talks when the actual crimes haven’t been investigated or a complaint hasn’t been registered should be example enough that this process is rigged as badly as Dodd-Frank. It should not be a surprise that the administration is putting pressure on Eric Schneiderman, that Tom Miller is kicking him out of the club house. That’s who these people are. It’s what they believe in. Just as it should not be a surprise, though it is laudable, that Schneiderman isn’t knuckling under to the administration. I suspect he probably is laughing at the idiocy of Miller’s pressure tactic. I mean, this is a guy going up some of the most powerful entities in the United States: Bank of New York Mellon, Bank of America, the New York Fed, etc. And the Iowa Attorney General isn’t going let him on conference calls? Mmmkay.
When you look closely at most significant areas of government, it becomes clear that the President and his administration are enormously powerful actors who get a lot done. Handing over our national wealth to the banks and to China is not nothing. These people are reorganizing the economy and the political system so that there are no constraints on the oligarchical interests that fund and pay them. That is their goal, it has been their goal from day one (or even before that), and anyone who says otherwise is just wrong or deluding him or herself. Obama spoke at the founding of Robert Rubin’s Hamilton Institute, and his first, and most important by far policy initiative, was his whipping for TARP, a policy that was signed by Bush but could not have passed without Obama getting his party in line. That was his goal, and he’s still pursuing it. The numerous “what happened to Obama” wailing editorials overlook the consistency of his policy agenda, which stretches back years at this point.
If someone worked or works for the Obama administration, or the Department of Justice, or any other executive branch agency, they need to remember their service as a mark of shame for the rest of their lives. Remembering how they participated in this example of how to govern is literally the least they could do for the damage they have caused. I would leave out the small number of people who are there to overtly prevent as much damage as possible, and those who resign or are fired in protest.
For the rest of the Democratic Party, well, reality is just beginning to intrude into the fantasy-land of partisans, even though the 2010 loss should have delivered a searing wake-up call to the failure Obama’s policy agenda. From 2006-2008, the Bush administration’s failures crashed down upon conservatives, and they in many ways could not cope. But their intellectual collapse was bailed out by Obama. Faux liberals are seeing their grand experiment in tatters, though right now they can only admit to feeling disappointed because the recognition that they have been swindled is far too painful. And the recognition for many of the professionals is even more difficult, because they must recognize that they have helped swindle many others and acknowledge the debt they have incurred to their victims. The signs of coming betrayal were there, but in the end it all comes down to judging people based on what they do and who they choose as opponents. And this Democratic partisans did not do, choosing instead a comfortable delusional fantasy-land where foreclosures don’t matter and theft enabled by Obama (and Clinton before him) doesn’t matter.
Eric Schneiderman’s willingness to go after the banks and stand up to the corruption of the Bush and Obama administrations should be a reminder to all of us of this. We have free will. He is doing the right thing for no other reason than because he wants to, because he believes in it. He is going to face serious consequences for this, very nasty stuff. Eliot Spitzer was taken down and his name dragged through mud because of who he took on. Paying ugly costs for standing up is routine, unfortunately, in modern America. And the least powerful among us face far worse consequences than politicians who are embarrassed. But integrity exists, and Schneiderman is showing that free will can be exercised in its service. This fact is true of many people, not just Schneiderman; Bill McKibbin, Jane Hamsher, Dan Choi and others just got arrested in front of the White House to register dissent. So next time someone tells you that you have no choice but to support one of the two branches of the banking party, just remember, you also have free will. And the only person who can take that away from you, is you.
Outrage(s) Of The Week
by Karl Denninger
So many to choose from this week.... Buffett and BAC (which I already wrote on), Bernanke's continued mendacity and of course the destruction of real liquidity in the markets due to all the gaming and schemes that the "Wall Street Capitalists" have engaged in over the last few years.
But today's column is reserved for those topics I haven't explored this week. We'll begin with this:
The Elko County Sheriff’s Office was notified in July of possible sexual contact between David Ralph Anderson, 61, and a girl younger than 14.
According to Elko Justice Court records, the victim told investigators that on seven to 10 occasions between 2010 and this year, Anderson allegedly taught the victim about various sexual acts and had sexual contact in the form of touching each other’s genitals.
Alleged perverts aren't anything special, right? Well, this one is. The article says he's a TSA employee.
Still want to go through that security line to fly, do you? There wouldn't be anything special about being a TSA employee that might be attractive to an alleged pervert, is there? Oh yeah, there is - you get to grope the balls of little boys and fondle little girls breasts, and it's part of your job description.
Why do we allow this as citizens of this nation again?
You can never eliminate as a prospective matter all perverts - by definition until the first time they get caught, arrested, tried and (hopefully) imprisoned you don't know they're perverts. But you can refuse to create government-sponsored and mandated positions where people like this can molest thousands of kids as part of their job!
What sort of sick society have we become that we're willing to subject not only ourselves but our kids to sexual abuse simply to exercise our constitutional right to travel? And don't give me this "privilege" crap - you (as an adult) may be able to consent to being groped (legally) to get on a plane (the difference between sexual assault and simple sex is in fact consent) but the premise of someone being a minor is that they cannot consent as a matter of law and you cannot consent for them. Arguing that this is acceptable is identical to arguing that a parent should be able to "consent" to their child sleeping with an uncle - or anyone else for that matter. Disgusted yet? You should be - with yourself.
So many to choose from this week.... Buffett and BAC (which I already wrote on), Bernanke's continued mendacity and of course the destruction of real liquidity in the markets due to all the gaming and schemes that the "Wall Street Capitalists" have engaged in over the last few years.
But today's column is reserved for those topics I haven't explored this week. We'll begin with this:
The Elko County Sheriff’s Office was notified in July of possible sexual contact between David Ralph Anderson, 61, and a girl younger than 14.
According to Elko Justice Court records, the victim told investigators that on seven to 10 occasions between 2010 and this year, Anderson allegedly taught the victim about various sexual acts and had sexual contact in the form of touching each other’s genitals.
Alleged perverts aren't anything special, right? Well, this one is. The article says he's a TSA employee.
Still want to go through that security line to fly, do you? There wouldn't be anything special about being a TSA employee that might be attractive to an alleged pervert, is there? Oh yeah, there is - you get to grope the balls of little boys and fondle little girls breasts, and it's part of your job description.
Why do we allow this as citizens of this nation again?
You can never eliminate as a prospective matter all perverts - by definition until the first time they get caught, arrested, tried and (hopefully) imprisoned you don't know they're perverts. But you can refuse to create government-sponsored and mandated positions where people like this can molest thousands of kids as part of their job!
What sort of sick society have we become that we're willing to subject not only ourselves but our kids to sexual abuse simply to exercise our constitutional right to travel? And don't give me this "privilege" crap - you (as an adult) may be able to consent to being groped (legally) to get on a plane (the difference between sexual assault and simple sex is in fact consent) but the premise of someone being a minor is that they cannot consent as a matter of law and you cannot consent for them. Arguing that this is acceptable is identical to arguing that a parent should be able to "consent" to their child sleeping with an uncle - or anyone else for that matter. Disgusted yet? You should be - with yourself.
The IMF: Please Don't Hold Our Heads Underwater
by Karl Denninger
We should, you know, especially when the head of the IMF spews crap like this:
As we all know, a major cause of the crisis was too much debt and leverage in key advanced economies. Financial institutions engaged in practices that magnified, disguised and fragmented risk, while households borrowed too much.
Right. There's the admission. But let's remember that without the financial institutions households could not have borrowed too much. It's somewhat like a crack addict - you can want all the crack you want, but if nobody is selling it you're not going to be smoking it.
So where is the accountability for those institutions? Oh, it's missing - indeed Christine calls for more theft from you through public balance sheets to prop these jackasses up!
Put simply, while fiscal consolidation remains an imperative, macroeconomic policies must support growth. Fiscal policy must navigate between the twin perils of losing credibility and undercutting recovery. The precise path is different for each country. But to meet the credibility test, each country needs a dual focus: a primary emphasis on durable measures that will deliver savings tomorrow which, in turn, will help to create as much space as possible for supporting growth today—at least by permitting a slower pace of consolidation where possible. For instance—measures that change the rate of growth of entitlements, health or retirement.
Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation. This is particularly true as (i) in most advanced economies inflation expectations are well anchored; and (ii) pressures from energy and food prices are abating. So policymakers should stand ready, as needed, to dive back into unconventional waters.
Micro-level policy actions to relieve balance sheet pressures—felt by households, banks, and governments—are equally important. We must get to the root of the problem. Without this, we will endure a painful and drawn-out adjustment process. Structural reforms will surely help boost productivity and growth over time, but we should take care not to weaken demand in the short term.
In a word, no. What should be done is to impose the corporate death penalty on those institutions that cannot cover their own debt loads. We should force the bad debt into the open and default it. We must return to a sustainable level of public and private debt, and in the United States that's about half of what's outstanding right now.
Pretending that we can "grow" out of this is a lie. We cannot. To do so we would need to double GDP over the next decade, and yet do so without taking on one penny of additional debt anywhere in the system. That amounts to 7% growth each and every year for the next ten, with zero additional debt. That exceeds any long-run GDP growth the United States has experienced on a debt-adjusted basis at any point in the modern era and as such is simply not going to happen.
The dreams of political fools must accede to mathematical and historical facts, and on this point the data is clear - we cannot grow out of this. We must instead consolidate out of it and accept the economic pain that will result.
On Europe:
First, sovereign finances need to be sustainable. Such a strategy means more fiscal action and more financing. It does not necessarily mean drastic upfront belt-tightening—if countries address long-term fiscal risks like rising pension costs or healthcare spending, they will have more space in the short run to support growth and jobs. But without a credible financing path, fiscal adjustment will be doomed to fail. After all, deciding on a deficit path is one thing, getting the money to finance it is another. Sufficient financing can come from the private or official sector—including continued support from the ECB, with full backup of the euro area members.
Again, no. There is no reason on God's Green Earth that those nations with reasonable fiscal policies should subsidize those who do not. Since the Euro zone failed to put in place actual incentive and punishment mechanisms for those nations that fail to act in a reasonable fashion there is now only one reasonable outcome - those nations must default and those entities that lent them money they cannot pay must lose part or all of that investment.
After all, lending money is an investment and comes with risk. This is why you earn a return; removing risk makes it not an investment at all but rather a tax.
Second, banks need urgent recapitalization. They must be strong enough to withstand the risks of sovereigns and weak growth. This is key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis. The most efficient solution would be mandatory substantial recapitalization—seeking private resources first, but using public funds if necessary. One option would be to mobilize EFSF or other European-wide funding to recapitalize banks directly, which would avoid placing even greater burdens on vulnerable sovereigns.
Those institutions that cannot raise private funds must be closed. No European should stand for any attempt to force them to cover the bad bets of private companies that have been more than happy to pocket the profits. Such acts, if attempted, should be met with open resistance using any means necessary as they are open declarations of war.
Not all wars are initiated with the discharge of firearms. Some are initiated with briefcases, suits and dresses. But all initiations of force are deserving of the same response.
Third, Europe needs a common vision for its future. The current economic turmoil has exposed some serious flaws in the architecture of the eurozone, flaws that threaten the sustainability of the entire project. In such an atmosphere, there is no room for ambivalence about its future direction. An unclear or confused message will add to market uncertainty and magnify the eurozone’s economic tensions. So Europe must recommit credibly to a common vision, and it needs to be built on solid foundations—including, for example, fiscal rules that actually work.
This is absolutely true. But such negotiation must take place free of the use of force. If the use of force to bail out private institutions is the means by which these negotiations are "entered" or "maintained", then the people of Europe must rise and forbid such actions - again, by any means necessary.
In the United States, policymakers must strike the right balance between reducing public debt and sustaining the recovery—especially by making a serious dent in long-term unemployment. A fair amount has been done to restore financial sector health, but house price declines continue to weaken household balance sheets. With falling house prices still holding down consumption and creating economic uncertainty, there is simply no room for half-measures or delay.
Baloney. House prices rose for thirty years at an unsustainable rate. This is not a ten year problem and won't be fixed that way. In particular:
First—the nexus of fiscal consolidation and growth. At first blush, these challenges seem contradictory. But they are actually mutually reinforcing. Credible decisions on future consolidation—involving both revenue and expenditure—create space for policies that support growth and jobs today. At the same time, growth is necessary for fiscal credibility—after all, who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged high unemployment and social dissatisfaction?
Revenue and expenditure are easy problems. The government cannot provide that which we are unwilling or unable to pay for with current tax revenues. Period. That's the beginning and end of this, and it's not that hard to figure out. We simply must stop screwing around and deal with the facts - our government has promised things that our people have not been asked to pay for.
It may be that we're unwilling to pay. If that's the case then we cannot have those things. It's that simple.
Second—halting the downward spiral of foreclosures, falling house prices and deteriorating household spending. This could involve more aggressive principal reduction programs for homeowners, stronger intervention by the government housing finance agencies, or steps to help homeowners take advantage of the low interest rate environment.
Nonsense. Those institutions that unreasonably lent against nothing but speculative fervor must be forced to eat their losses. If this blows them up then so be it. Home prices must come down. It is specifically this problem - the attempted prevention of a normal market adjustment that is 30 years in the making - that is causing our difficulties. This abuse of leverage is not limited to homes - it also infests medical care and college educations, to name two parts of our economy. It must end - everywhere - if we are to return to a stable and prosperous economic environment for everyone, not just a handful on Wall Street.
It is rather amusing to watch the IMF chair speak of "consolidation" and "sustainability" when in fact the IMF has a nearly-unbroken record of exploiting a crisis for its own aggrandizement and the protection of the banksters. The people of this nation and indeed the world would be far better off without these jackals. Banking's essential purpose in the clearing of payments does not have to intersect with the building and maintenance of Ponzi Schemes that are nothing more than a way to asset-strip the populace.
We should, you know, especially when the head of the IMF spews crap like this:
As we all know, a major cause of the crisis was too much debt and leverage in key advanced economies. Financial institutions engaged in practices that magnified, disguised and fragmented risk, while households borrowed too much.
Right. There's the admission. But let's remember that without the financial institutions households could not have borrowed too much. It's somewhat like a crack addict - you can want all the crack you want, but if nobody is selling it you're not going to be smoking it.
So where is the accountability for those institutions? Oh, it's missing - indeed Christine calls for more theft from you through public balance sheets to prop these jackasses up!
Put simply, while fiscal consolidation remains an imperative, macroeconomic policies must support growth. Fiscal policy must navigate between the twin perils of losing credibility and undercutting recovery. The precise path is different for each country. But to meet the credibility test, each country needs a dual focus: a primary emphasis on durable measures that will deliver savings tomorrow which, in turn, will help to create as much space as possible for supporting growth today—at least by permitting a slower pace of consolidation where possible. For instance—measures that change the rate of growth of entitlements, health or retirement.
Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation. This is particularly true as (i) in most advanced economies inflation expectations are well anchored; and (ii) pressures from energy and food prices are abating. So policymakers should stand ready, as needed, to dive back into unconventional waters.
Micro-level policy actions to relieve balance sheet pressures—felt by households, banks, and governments—are equally important. We must get to the root of the problem. Without this, we will endure a painful and drawn-out adjustment process. Structural reforms will surely help boost productivity and growth over time, but we should take care not to weaken demand in the short term.
In a word, no. What should be done is to impose the corporate death penalty on those institutions that cannot cover their own debt loads. We should force the bad debt into the open and default it. We must return to a sustainable level of public and private debt, and in the United States that's about half of what's outstanding right now.
Pretending that we can "grow" out of this is a lie. We cannot. To do so we would need to double GDP over the next decade, and yet do so without taking on one penny of additional debt anywhere in the system. That amounts to 7% growth each and every year for the next ten, with zero additional debt. That exceeds any long-run GDP growth the United States has experienced on a debt-adjusted basis at any point in the modern era and as such is simply not going to happen.
The dreams of political fools must accede to mathematical and historical facts, and on this point the data is clear - we cannot grow out of this. We must instead consolidate out of it and accept the economic pain that will result.
On Europe:
First, sovereign finances need to be sustainable. Such a strategy means more fiscal action and more financing. It does not necessarily mean drastic upfront belt-tightening—if countries address long-term fiscal risks like rising pension costs or healthcare spending, they will have more space in the short run to support growth and jobs. But without a credible financing path, fiscal adjustment will be doomed to fail. After all, deciding on a deficit path is one thing, getting the money to finance it is another. Sufficient financing can come from the private or official sector—including continued support from the ECB, with full backup of the euro area members.
Again, no. There is no reason on God's Green Earth that those nations with reasonable fiscal policies should subsidize those who do not. Since the Euro zone failed to put in place actual incentive and punishment mechanisms for those nations that fail to act in a reasonable fashion there is now only one reasonable outcome - those nations must default and those entities that lent them money they cannot pay must lose part or all of that investment.
After all, lending money is an investment and comes with risk. This is why you earn a return; removing risk makes it not an investment at all but rather a tax.
Second, banks need urgent recapitalization. They must be strong enough to withstand the risks of sovereigns and weak growth. This is key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis. The most efficient solution would be mandatory substantial recapitalization—seeking private resources first, but using public funds if necessary. One option would be to mobilize EFSF or other European-wide funding to recapitalize banks directly, which would avoid placing even greater burdens on vulnerable sovereigns.
Those institutions that cannot raise private funds must be closed. No European should stand for any attempt to force them to cover the bad bets of private companies that have been more than happy to pocket the profits. Such acts, if attempted, should be met with open resistance using any means necessary as they are open declarations of war.
Not all wars are initiated with the discharge of firearms. Some are initiated with briefcases, suits and dresses. But all initiations of force are deserving of the same response.
Third, Europe needs a common vision for its future. The current economic turmoil has exposed some serious flaws in the architecture of the eurozone, flaws that threaten the sustainability of the entire project. In such an atmosphere, there is no room for ambivalence about its future direction. An unclear or confused message will add to market uncertainty and magnify the eurozone’s economic tensions. So Europe must recommit credibly to a common vision, and it needs to be built on solid foundations—including, for example, fiscal rules that actually work.
This is absolutely true. But such negotiation must take place free of the use of force. If the use of force to bail out private institutions is the means by which these negotiations are "entered" or "maintained", then the people of Europe must rise and forbid such actions - again, by any means necessary.
In the United States, policymakers must strike the right balance between reducing public debt and sustaining the recovery—especially by making a serious dent in long-term unemployment. A fair amount has been done to restore financial sector health, but house price declines continue to weaken household balance sheets. With falling house prices still holding down consumption and creating economic uncertainty, there is simply no room for half-measures or delay.
Baloney. House prices rose for thirty years at an unsustainable rate. This is not a ten year problem and won't be fixed that way. In particular:
First—the nexus of fiscal consolidation and growth. At first blush, these challenges seem contradictory. But they are actually mutually reinforcing. Credible decisions on future consolidation—involving both revenue and expenditure—create space for policies that support growth and jobs today. At the same time, growth is necessary for fiscal credibility—after all, who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged high unemployment and social dissatisfaction?
Revenue and expenditure are easy problems. The government cannot provide that which we are unwilling or unable to pay for with current tax revenues. Period. That's the beginning and end of this, and it's not that hard to figure out. We simply must stop screwing around and deal with the facts - our government has promised things that our people have not been asked to pay for.
It may be that we're unwilling to pay. If that's the case then we cannot have those things. It's that simple.
Second—halting the downward spiral of foreclosures, falling house prices and deteriorating household spending. This could involve more aggressive principal reduction programs for homeowners, stronger intervention by the government housing finance agencies, or steps to help homeowners take advantage of the low interest rate environment.
Nonsense. Those institutions that unreasonably lent against nothing but speculative fervor must be forced to eat their losses. If this blows them up then so be it. Home prices must come down. It is specifically this problem - the attempted prevention of a normal market adjustment that is 30 years in the making - that is causing our difficulties. This abuse of leverage is not limited to homes - it also infests medical care and college educations, to name two parts of our economy. It must end - everywhere - if we are to return to a stable and prosperous economic environment for everyone, not just a handful on Wall Street.
It is rather amusing to watch the IMF chair speak of "consolidation" and "sustainability" when in fact the IMF has a nearly-unbroken record of exploiting a crisis for its own aggrandizement and the protection of the banksters. The people of this nation and indeed the world would be far better off without these jackals. Banking's essential purpose in the clearing of payments does not have to intersect with the building and maintenance of Ponzi Schemes that are nothing more than a way to asset-strip the populace.
Charlie Reese | 545 vs. 300,000,000 People
by rcwhalen
Charley Reese's final column for the Orlando Sentinel. The article below is completely neutral, neither anti-republican or democrat. -- Chris
545 vs. 300,000,000 People
- By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The President does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a President to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The President can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? John Boehner. He is the leader of the majority party. He and fellow House members, not the President, can approve any budget they want. If the President vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in Iraq and Afghanistan it's because they want them in Iraq and Afghanistan.
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy","inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess.
Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
What you do with this article now that you have read it is up to you. This might be funny if it weren't so true. Be sure to read all the way to the end:
Tax his land,
Tax his bed,
Tax the table,
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his work,
Tax his pay,
He works for
peanuts anyway!
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries
Tax his tears.
Tax his car,
Tax his gas,
Find other ways
Taxes to pass
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.
Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...
Put these words
Upon his tomb,
'Taxes drove me
to my doom...'
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (currently 44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
STILL THINK THIS IS FUNNY?
Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.
What in the heck happened? Can you spell 'politicians?'
I hope this goes around THE USA at least 545 times! YOU can help it get there!!!
GO AHEAD. . . BE AN AMERICAN
Charley Reese's final column for the Orlando Sentinel. The article below is completely neutral, neither anti-republican or democrat. -- Chris
545 vs. 300,000,000 People
- By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The President does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a President to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The President can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? John Boehner. He is the leader of the majority party. He and fellow House members, not the President, can approve any budget they want. If the President vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red.
If the Army & Marines are in Iraq and Afghanistan it's because they want them in Iraq and Afghanistan.
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy","inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess.
Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
What you do with this article now that you have read it is up to you. This might be funny if it weren't so true. Be sure to read all the way to the end:
Tax his land,
Tax his bed,
Tax the table,
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his work,
Tax his pay,
He works for
peanuts anyway!
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries
Tax his tears.
Tax his car,
Tax his gas,
Find other ways
Taxes to pass
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.
Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...
Put these words
Upon his tomb,
'Taxes drove me
to my doom...'
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (currently 44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
STILL THINK THIS IS FUNNY?
Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.
What in the heck happened? Can you spell 'politicians?'
I hope this goes around THE USA at least 545 times! YOU can help it get there!!!
GO AHEAD. . . BE AN AMERICAN
Friday, August 26, 2011
Why did the shares in European Banks and BoA collapse?
By Golem XIV
It's Jackson Hole time again. The best of the best are gathering to, as MarketWatch describes it, 'brainstorm' ways of dealing with the economy. God help us. MarketWatch goes on to exclusively reveal that,
"The biggest puzzle of all is the sudden demise of the U.S. recovery.
Sometimes there is no satire nor irony strong enough. Two rounds of QE, the second telegraphed at last year's Jackson Hole meeting, both 'guarenteed' by those clever FED chaps, to solve what we were told over and over was just a 'liquidity problem'. And the result is that another year and several Debt Ceiling hikes later, the banks are back at the Fed's table once again, banging their knives and forks. Famished fat men demanding to be fed.
The questions we have to ask is why, after so much money in the last three years, they still need more? Why, if this policy is the correct, the only one, are the banks selling each other's stocks? What has caused the sudden collapse in European and American banks stocks? We need to find answers because it is obvious our financial experts are lost, but too arrogant and too afraid to admit it.
Until early August, Fed officials gave no sign that they were worried about the economy. They had forecast a pickup in activity for the second half and said that weakness in the first half was due to temporary factors."
Not one official forecast of the last three years has been worth a pin. And the financial press, because they follow the same disastrously wrong ideological assumptions as those they report on, are equally clueless. Thus MarketWatch sincerely feels
A second puzzle is why the U.S. economy catches cold every time Europe sneezes.
So let me offer some thoughts.
The banks are want QE3. That much is obvious. At the start of this year Bank of America's market value was $143 billion. Today it is around $63 billion. Their share price along with most of the European banks has been slaughtered day after day after day. Banks are traditionally big owners of bank stocks. So who is selling do you think?
Will another injection of easy money into the banks save them or help the economy? Well the last three years shows us quite unambiguously that the money, your money that is, will save gorge the fat men one more time but do almost nothing to help the broader economy. QE has never, in any country in this crisis been a stimulus for the economy. That was has been one of those unrelentingly told lies.
If Bernanke or King or any other expert wants to stimulate the economy - the real economy - they could easily do it, but NOT by putting the money in to the banks.
The US banks are not lending but not because they don't have the money. The Big US banks have $1.7 trillion on overnight deposit in the NY FED. Most of that is QE money. It is doing nothing for anyone except the banks. 'US tax payers 'gave' it to them and the banks are now being paid interest on it ... by the tax payer. Nice deal.
But why the sudden collapse of bank stocks in the US and Europe? The financial press says it is due to worries about the slow down in the American economy and over debt worries in Europe. I think these are weaselly half truths at best, but let's look at them anyway. MarketWatch claims they and the Fed have been surprised at the slow down in the US. I find that hard to believe. Unless these people really never, ever get out of their gated communities and sound proofed offices they cannot really have thought that two years of barely a pulse at all and even what there being purely due to two previous massive injections of QE - they cannot have thought this was evidence of a roaring recovery?
So why the sudden and massive decline in bank stocks? Of course the short answer is 'the exact same reasons every other time the banks have reached the point of panic'. They are insolvent, their assets are rotting, their debts are increasing and they are not making enough real profit (as opposed to those conjured up by accounting jiggery pokery) to survive. But while I think think this is undeniably true it doesn't answer the question of why such a savage sell off and why no one will lend overnight to European banks, not even other European banks?
I think the answer is summed up in three words - "Risk Weighted Assets."
When 'stress tests' or risk managers, regulators or investors look at the health of a bank they look at what capital it has relative to it liabilities, debts and potential losses. Two such measures are The Capital Adequacy Ratio (CA) and the Tangible Common Equity (TCE) Ratio. Both are the ratio of Capital (what people have put in to the bank and which the bank must be able to pay back) over Assets (what the bank has loaned out and from which it expects a return from which it will pay off its investors).
People make a lot of the difference between these two measures. How they differ is in what they count as Capital. Basically Capital Adequacy counts all sorts of things as Capital, including deferred tax rebates on past losses. Tangible Common Equity is far stricter and is a far more accurate measure of how much equity there is in the bank for investors in the case of the bank going down.
Needless to say banks prefer to talk about Capital Adequacy and so do their political and regulatory fluffers. But last year Deutsche Bank did a study of the stricter TCE of European Banks. What they found was while all the banks, of course, passed the European Stress Tests their real state was not good.
Deutsche found that on average Europe's banks had a TCE ratio of a mere 3.2%. They should have about 6-8%. The study's authors concluded - this is a year ago before things 'started to get bad' - that European banks would have to raise between €600 billion and €1 Trillion in new capital. Since then the banks, and particularly those most vulnerable such as UniCredit, have raised very little if any.
You have to ask why not? Especially as now they really need to raise that money and can't because they are completely locked out. Genius and Prudence both equally absent.
This chart published recently by ZeroHedge looking at the health of Canadian Banks also happens to show how horribly exposed to ruin and loss the investors in Europe's 'Super banks' are, should the banks go under. Suddenly you can see why certain banks have been hammered by investors dumping their stock in the recent weeks.
But I want to suggest that the real cause of the huge sell off and collapse in bank share price is due not the change in the top half of the ratio, the Capital, but to a collapse in the much less talked about bottom of the ratio - the 'assets' - the loans.
The key is that these are not 'assets' they are 'risk weighted assets'. Banks are purveyors of and experts in managing risk - or so they have told us. They have whole departments of 'Risk Managers'.
But in a nut shell this is what I think has happened.
Risk and Reward are directly related. The lower the risk the lower the Reward, the higher the Risk the higher the Reward. The ideal is to somehow get high return but not have any risk. Pure fantasy of course. Except that banks being banks it can be done. And has been. Take Sovereign debt. It is usually considered zero risk. In all the tress tests they state quite clearly they do not model a sovereign default - because it can't/won't happen. And if you ask a bank's risk manger he/she will tell you how Sovereign Bonds are generally considered risk free from a Risk Manager's point of view.
And yet, we have all heard the news about how the cost of CDS on Spain's or Italy's and even now France's Sovereign bonds has been going up. Think about that for a second. The Risk Manager's office in the bank says Sovereign debt is a risk free asset. While just down the corridor in the Bond trading room they are buying and selling insurance on those 'risk free' assets. And 'of course' the riskier ones form Spain or Italy come with a much more attractive coupon (Interest payment).
Son one part of the bank says - Sovereign bonds are a risk free asset and counts them as such if asked - by a regulator for example. While down the corridor they know they are anything but risk free because they are buying and selling insurance on those bonds and getting a handsome reward from trading the riskier ones. Risk free and rewardingly risky at the same time. The alchemy of modern banking.
Which, as this article form the Wall Street Journal breezily notes,
This can incentivize banks to build up their balance sheets during times of stability by holding assets whose risk weightings don’t accurately reflect the bank’s exposure during times of stress.
Exactly. During the two years of QE-heroine induced good times Banks wanted to get maximum growth but be able to have lots and lots of 'risk weighted' assets to underpin the health of their business, at the same time. And so they all bought 'risk free' but in actual fact very lucratively risky, 'can't ever default but we'll insure them for lots of money for you just in case' assets. They speculated on the riskiest Sovereign bonds they could find. Why else, when the sovereign debt crisis has been so obviously brewing for over a year, are the big banks all still holding billions upon billions of Euros of it?
But during the 'good times' when all the bank looked at the 'recovery' and made their bone headed growth forecasts and basically smoked their own dope - they thought there was no 'risk' and their Risk Managers' confirmed it. But now, when the fiction of growth can no longer be sustained, suddenly everyone has remembered with a start, that the assets are 'Risk Weighted'.
Hundreds of billions with zero risk weighting is zero. But go from zero to any number at all no matter if its still fairly small and the answer goes from zero to 'A LOT' in an instant. And that is what I think has happened in the risk Manager's office of every bank in Europe and America. The denominator of the Capital Adequacy Ratio and the Tangible Common Equity Ratio just went through the roof. And when it did the ration went to zero. Suddenly the Risk Managers are telling everyone that the 'safe' banks are actually virtually insolvent. Quelle surprise! I think we'll find Bank of America is in the same or worse state.
And for once they are right. They all know the only thing that will stop this sell off is another round of 'rape the tax payer'. Will Bernanke tell the Americans that while there is 'no money' for paying for social services' - like schools and police - hundreds of billions can be found for the banks...again. And will the ECB and the BoE say the same to their people?
What really bothers me is that this game has been going on all during the time when our 'regulators' and the banks and the governments were all telling us how they had learnt their lessons. how we must let by-gones be by-gones and stop bashing the poor bankers etc etc, they were ALL conniving to play this game.
They all knew the banks and others were buying up sovereign debt of 'unhealthy' nations. Spanish banks were encouraged to buy Spanish debt. Greek banks Greek debt, Italian banks Italian debt and they all got it on with each other as well. So that the French banks obliged everyone.
They had learned nothing. They have not changed. The banks never intended to. The regulators are still gurning, toothless cowards and mountebanks and our political leaders just did what they do - they lied. AGAIN.
Just like last time, they have all been caught by their own lies and they want us to bail them out again. And our leaders will do it, if we do not say clearly "This was not in your mandate from us at the last election." The time is upon us for civil disobedience.
It's Jackson Hole time again. The best of the best are gathering to, as MarketWatch describes it, 'brainstorm' ways of dealing with the economy. God help us. MarketWatch goes on to exclusively reveal that,
"The biggest puzzle of all is the sudden demise of the U.S. recovery.
Sometimes there is no satire nor irony strong enough. Two rounds of QE, the second telegraphed at last year's Jackson Hole meeting, both 'guarenteed' by those clever FED chaps, to solve what we were told over and over was just a 'liquidity problem'. And the result is that another year and several Debt Ceiling hikes later, the banks are back at the Fed's table once again, banging their knives and forks. Famished fat men demanding to be fed.
The questions we have to ask is why, after so much money in the last three years, they still need more? Why, if this policy is the correct, the only one, are the banks selling each other's stocks? What has caused the sudden collapse in European and American banks stocks? We need to find answers because it is obvious our financial experts are lost, but too arrogant and too afraid to admit it.
Until early August, Fed officials gave no sign that they were worried about the economy. They had forecast a pickup in activity for the second half and said that weakness in the first half was due to temporary factors."
Not one official forecast of the last three years has been worth a pin. And the financial press, because they follow the same disastrously wrong ideological assumptions as those they report on, are equally clueless. Thus MarketWatch sincerely feels
A second puzzle is why the U.S. economy catches cold every time Europe sneezes.
So let me offer some thoughts.
The banks are want QE3. That much is obvious. At the start of this year Bank of America's market value was $143 billion. Today it is around $63 billion. Their share price along with most of the European banks has been slaughtered day after day after day. Banks are traditionally big owners of bank stocks. So who is selling do you think?
Will another injection of easy money into the banks save them or help the economy? Well the last three years shows us quite unambiguously that the money, your money that is, will save gorge the fat men one more time but do almost nothing to help the broader economy. QE has never, in any country in this crisis been a stimulus for the economy. That was has been one of those unrelentingly told lies.
If Bernanke or King or any other expert wants to stimulate the economy - the real economy - they could easily do it, but NOT by putting the money in to the banks.
The US banks are not lending but not because they don't have the money. The Big US banks have $1.7 trillion on overnight deposit in the NY FED. Most of that is QE money. It is doing nothing for anyone except the banks. 'US tax payers 'gave' it to them and the banks are now being paid interest on it ... by the tax payer. Nice deal.
But why the sudden collapse of bank stocks in the US and Europe? The financial press says it is due to worries about the slow down in the American economy and over debt worries in Europe. I think these are weaselly half truths at best, but let's look at them anyway. MarketWatch claims they and the Fed have been surprised at the slow down in the US. I find that hard to believe. Unless these people really never, ever get out of their gated communities and sound proofed offices they cannot really have thought that two years of barely a pulse at all and even what there being purely due to two previous massive injections of QE - they cannot have thought this was evidence of a roaring recovery?
So why the sudden and massive decline in bank stocks? Of course the short answer is 'the exact same reasons every other time the banks have reached the point of panic'. They are insolvent, their assets are rotting, their debts are increasing and they are not making enough real profit (as opposed to those conjured up by accounting jiggery pokery) to survive. But while I think think this is undeniably true it doesn't answer the question of why such a savage sell off and why no one will lend overnight to European banks, not even other European banks?
I think the answer is summed up in three words - "Risk Weighted Assets."
When 'stress tests' or risk managers, regulators or investors look at the health of a bank they look at what capital it has relative to it liabilities, debts and potential losses. Two such measures are The Capital Adequacy Ratio (CA) and the Tangible Common Equity (TCE) Ratio. Both are the ratio of Capital (what people have put in to the bank and which the bank must be able to pay back) over Assets (what the bank has loaned out and from which it expects a return from which it will pay off its investors).
People make a lot of the difference between these two measures. How they differ is in what they count as Capital. Basically Capital Adequacy counts all sorts of things as Capital, including deferred tax rebates on past losses. Tangible Common Equity is far stricter and is a far more accurate measure of how much equity there is in the bank for investors in the case of the bank going down.
Needless to say banks prefer to talk about Capital Adequacy and so do their political and regulatory fluffers. But last year Deutsche Bank did a study of the stricter TCE of European Banks. What they found was while all the banks, of course, passed the European Stress Tests their real state was not good.
Deutsche found that on average Europe's banks had a TCE ratio of a mere 3.2%. They should have about 6-8%. The study's authors concluded - this is a year ago before things 'started to get bad' - that European banks would have to raise between €600 billion and €1 Trillion in new capital. Since then the banks, and particularly those most vulnerable such as UniCredit, have raised very little if any.
You have to ask why not? Especially as now they really need to raise that money and can't because they are completely locked out. Genius and Prudence both equally absent.
This chart published recently by ZeroHedge looking at the health of Canadian Banks also happens to show how horribly exposed to ruin and loss the investors in Europe's 'Super banks' are, should the banks go under. Suddenly you can see why certain banks have been hammered by investors dumping their stock in the recent weeks.
But I want to suggest that the real cause of the huge sell off and collapse in bank share price is due not the change in the top half of the ratio, the Capital, but to a collapse in the much less talked about bottom of the ratio - the 'assets' - the loans.
The key is that these are not 'assets' they are 'risk weighted assets'. Banks are purveyors of and experts in managing risk - or so they have told us. They have whole departments of 'Risk Managers'.
But in a nut shell this is what I think has happened.
Risk and Reward are directly related. The lower the risk the lower the Reward, the higher the Risk the higher the Reward. The ideal is to somehow get high return but not have any risk. Pure fantasy of course. Except that banks being banks it can be done. And has been. Take Sovereign debt. It is usually considered zero risk. In all the tress tests they state quite clearly they do not model a sovereign default - because it can't/won't happen. And if you ask a bank's risk manger he/she will tell you how Sovereign Bonds are generally considered risk free from a Risk Manager's point of view.
And yet, we have all heard the news about how the cost of CDS on Spain's or Italy's and even now France's Sovereign bonds has been going up. Think about that for a second. The Risk Manager's office in the bank says Sovereign debt is a risk free asset. While just down the corridor in the Bond trading room they are buying and selling insurance on those 'risk free' assets. And 'of course' the riskier ones form Spain or Italy come with a much more attractive coupon (Interest payment).
Son one part of the bank says - Sovereign bonds are a risk free asset and counts them as such if asked - by a regulator for example. While down the corridor they know they are anything but risk free because they are buying and selling insurance on those bonds and getting a handsome reward from trading the riskier ones. Risk free and rewardingly risky at the same time. The alchemy of modern banking.
Which, as this article form the Wall Street Journal breezily notes,
This can incentivize banks to build up their balance sheets during times of stability by holding assets whose risk weightings don’t accurately reflect the bank’s exposure during times of stress.
Exactly. During the two years of QE-heroine induced good times Banks wanted to get maximum growth but be able to have lots and lots of 'risk weighted' assets to underpin the health of their business, at the same time. And so they all bought 'risk free' but in actual fact very lucratively risky, 'can't ever default but we'll insure them for lots of money for you just in case' assets. They speculated on the riskiest Sovereign bonds they could find. Why else, when the sovereign debt crisis has been so obviously brewing for over a year, are the big banks all still holding billions upon billions of Euros of it?
But during the 'good times' when all the bank looked at the 'recovery' and made their bone headed growth forecasts and basically smoked their own dope - they thought there was no 'risk' and their Risk Managers' confirmed it. But now, when the fiction of growth can no longer be sustained, suddenly everyone has remembered with a start, that the assets are 'Risk Weighted'.
Hundreds of billions with zero risk weighting is zero. But go from zero to any number at all no matter if its still fairly small and the answer goes from zero to 'A LOT' in an instant. And that is what I think has happened in the risk Manager's office of every bank in Europe and America. The denominator of the Capital Adequacy Ratio and the Tangible Common Equity Ratio just went through the roof. And when it did the ration went to zero. Suddenly the Risk Managers are telling everyone that the 'safe' banks are actually virtually insolvent. Quelle surprise! I think we'll find Bank of America is in the same or worse state.
And for once they are right. They all know the only thing that will stop this sell off is another round of 'rape the tax payer'. Will Bernanke tell the Americans that while there is 'no money' for paying for social services' - like schools and police - hundreds of billions can be found for the banks...again. And will the ECB and the BoE say the same to their people?
What really bothers me is that this game has been going on all during the time when our 'regulators' and the banks and the governments were all telling us how they had learnt their lessons. how we must let by-gones be by-gones and stop bashing the poor bankers etc etc, they were ALL conniving to play this game.
They all knew the banks and others were buying up sovereign debt of 'unhealthy' nations. Spanish banks were encouraged to buy Spanish debt. Greek banks Greek debt, Italian banks Italian debt and they all got it on with each other as well. So that the French banks obliged everyone.
They had learned nothing. They have not changed. The banks never intended to. The regulators are still gurning, toothless cowards and mountebanks and our political leaders just did what they do - they lied. AGAIN.
Just like last time, they have all been caught by their own lies and they want us to bail them out again. And our leaders will do it, if we do not say clearly "This was not in your mandate from us at the last election." The time is upon us for civil disobedience.
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