Yearly Archives: 2011

Latest Leak on State Attorney General Mortgage Settlement: A Shameless Sellout to the Banks

There have been so many rumors about the so-called 50 state attorney general settlement (which now is more like a 43 state settlement) being on the verge of having a deal that we’ve discounted them. We’ve said from the beginning that this was a cash for release deal. Basically, because the Federal regulators and state AGs, by design, had done no meaningful investigations, they didn’t have any threats to bring the banks to heel. So they’d have to offer a bribe, and the bribe has always been a “get out of jail free” card.

Put it more simply: The banks got bailed out, and the rest of us got left out.

Links 10/29/11

Links 10/28/11

Grand European Rescue Already Starting to Come Unglued?

This site has had plenty of company in expressing doubts about the latest episode in the continuing “save the banks, devil take the hindmost” Eurodrama. The same issues came up over and over: too small size of rescue fund, heavy reliance on smoke and gimmickry to get it even to that size, insufficient relief to the Greek economy (the haircuts will apply to only a portion of the bonds), no assurance that enough banks will go along with the “voluntary” rescue, and way way too many details left to be sorted out.

But it is a particularly bad sign to see disagreement within the officialdom about the just-annnounced deal.

Debunking the “Paid Back the TARP” Myth: Banks Should be Paying Over $300 Billion a Year in Systemic Risk Insurance

This Institute for New Economic Thinking interview with economist Ed Kane discusses how systemic risk should be measured. Kane argues that taxpayer are essentially disadvantaged bank shareholders, getting the downside and none of the bennies, like dividends or capital gains. He argues that banks should be paying taxpayers for the privilege of having them and their counterparties rescued, and that is over $300 billion a year.’

And that isn’t the only freebie banks are getting.

Making a mockery of sovereign CDS

What happens when you get a default that equates to a 50% loss for most investors without triggering default insurance? Massively negative unintended consequences. Europe has just made a mockery of the sovereign credit default swap (CDS) market by trying to structure a default via voluntary 50% haircuts in order to avoid triggering CDS claims. […]

Warren Mosler and Philip Pilkington: A Bad Haircut

By Warren Mosler, an investment manager and creator of the mortgage swap and the current Eurofutures swap contract and Philip Pilkington, a journalist and writer based in Dublin, Ireland

Are these haircuts on Greek debt really such a good idea? Or are they really just a stopgap that will make things all the worse in the long-run?

Delaware Attorney General Sues MERS Over Deceptive Practices, Asks for Halt of Foreclosures Relying on MERS (Updated)

The mortgage securitization industry has just had a new major front open on its battle with those who are less than happy with the way it has run roughshod over the law. While there are a significant number of court rulings questioning foreclosures in the name of MERS or other practices commonly associated with the use of MERS (for instance, in Oregon, its violation of recording requirements mandated at the state level), no major regulator or public official (beyond county registers of deeds) has gone after MERS in a serious way (New York’s AG has opened an investigation, but it has not led to any litigation).

This has changed with the Delaware attorney general Beau Biden’s filing.

How to Donate to Our Fundraiser

We have multiple channels for helping support this site. The first are here on the blog, the “Donate” and “Subscribe” buttons in the upper right, both of which take you to PayPal (the charge will be in the name of Aurora Advisors). If you are allergic to PayPal, you can send a check (or multiple […]

Links 10/27/11