Does Guinness Beer Taste Better in Ireland? ScienceDaily (hat tip reader furzy mouse)
Cave in moon: Base station for astronauts? SiliconIndia
Libya lurches close to full-blown civil war Financial Times
Saudis mobilise thousands of troops to quell growing revolt Independent (hat tip Jesse)
Georgetown law professor and securitization expert Adam Levitin has weighed in on the ruling in an Alabama case, U.S. Bank v. Congress, in which a state court judge ruled against what we have called the New York trust theory. For readers new to this terrain, the short form is that the parties to mortgage securitizations are governed by a so-called pooling and servicing agreement. The PSA, among many other things, described how the notes (the borrower IOU) were to be conveyed to a trust that would hold them for the benefit of investors. The trust was almost without exception a New York trust. New York was chosen because its trust law is both very well settled and very rigid. New York trusts have no discretion in how they operate. Any measure undertaken that is inconsistent with explicit instructions is deemed to be a “void act”.
Now it appears that the notes were not conveyed to the trusts as stipulated in the PSAs on a widespread basis. (You can read the details here). Because the trusts are New York trusts, that means you have a really big mess. You can’t convey the notes in now, that’s not permitted because the trust had specific dates for accepting the assets that have long passed. The party that has the note (someone earlier in the securitization chain) can foreclose, but no one wants to do that. It isn’t just that this would be an admission that that parties to the agreement didn’t fulfill their contractual obligations; there is no way to get the money from the party that foreclosed to the trust and then to the investors.
Since the securitization industry has had so little good news of late, and this New York trust issue has the potential to make the chain of title problems that banks are facing in courtrooms all over the US even more acute, Paul Jackson of Housing Wire was quick to jump on this pro-bank decision as a major victory. We argued that it was probably not a significant precedent, and that some of the legal reasoning looked like a stretch, other parts were at odds with decisions in other states (meaning those states were unlikely to change course based on a lower-court decision in Alabama). But we acknowledged that parts of the decision were hard to parse and over our pay grade.
Levitin has taken an even more dismissive view of the decision
Read more...We pointed last week to an analysis by Lynn Syzmoniak that showed that foreclosures across a number of different servicers were way down in January 2011 versus the same period in January 2010. This was admittedly a tally in only two Florida counties, but she indicated that a quick look at other counties in Florida showed a similar pattern.
We are seeing analogous developments, but the drivers appear to be state specific, as judges give adverse rulings on common practices in foreclosure land. Reader wc4d pointed to a report in the Portland Oregonian, that lenders are withdrawing cases because five court decisions have found that lenders that used MERS violated state recording laws.
Read more...Scientists try to determine whether life on Earth is quickly heading toward extinction Mercury News (hat tip reader May S)
What’s Killing the Babies of Kettleman City? Mother Jones (hat tip reader May S)
Shark Fin Bill Makes Waves in California New York Times. It would be good to ban bluefin tuna to be consistent.
Gaddafi troops’ ‘gains’ disputed BBC
The new Republic of Libya: temporary council P2PNet
I’m not easily shocked these days, but I have to confess I gasped out loud when I read that the former managing director of McKinsey, and until recently board member of Goldman and Procter & Gamble, Rajat Gupta, had been charged by the SEC for insider trading. Why would someone with one of the most blue chip reputations in Corporate America, who has clearly done very well financially, risk it all to make a bit more? Not only is the downside considerable, but it also isn’t as if these moves would have made a meaningful difference in his lifestyle. He already had status others would kill for. And passing profitable tips to Raj Rajaratnam was never going to be a ticket to Hedgistan levels of wealth.
But the next interesting bit was to watch the reaction in terms of what this scandal meant for McKinsey. This event was a Rorschach tests on the firm, often with a bit of schadenfreude at another elite name being shown to have feet of clay. And even though I worked for McKinsey over 20 years ago and think the firm has a lot to answer for, some of the charges are a bit barmy.
So let’s dispatch with the uninformed inflammatory stuff first and get to the real dirt.
Read more...I thought readers would enjoy this program, which was broadcast late last year but is still relevant particularly now that the State Department has acknowledged that Aljazeera is beating US newscasters. From Hillary Clinton in testimony before the Senate Foreign Relations Committee, as reported by the Associated Press:
“Like it or hate it, it is really effective,” Clinton said. “In fact, viewership of Al-Jazeera is going up in the United States because it is real news.”
“You may not agree with it, but you feel like you’re getting real news around the clock instead of a million commercials and, you know, arguments between talking heads and the kind of stuff that we do on our news that is not providing information to us, let alone foreigners.”
This program focuses on how the Pentagon has been able to get Hollywood to, um, cooperate with its efforts to present a positive image of the military (hat tip reader Scott A). I must confess I enjoyed the action footage.
Read more...Paul Jackson has posted on a decision by an Alabama trial court involving the so-called New York trust theory that we have discussed at some length on this blog. Given how banks have been taking it on the chin ever since the robo-signing scandal broke, I suppose I’d be inclined to gloat a little, as Jackson does, in response to a verdict in favor of a bank; bank PR has been a particularly tough assignment these past few months.
But Jackson tries to treat this particular lower court decision as an important precedent, when this is anything but. In addition, Jackson evidently is not familiar the normal process of getting new legal arguments accepted in court, or of how decisions in one court are viewed in another. Finally, as I will touch on here and discuss at greater length next week, there are good reasons why it is unlikely courts in other states (or even Federal bankruptcy courts in Alabama) will look to this decision as a precedent.
Read more...Early man was ‘ancient mariner’ BBC
Smarter Than You Think – Google Cars Drive Themselves, in Traffic Spice Up Your Life
Gaddafi’s billions ‘will never be found’ Channel 4 News (hat tip reader Tim C) Confirms our earlier take.
Our session with Harry Shearer last year was so well received that he is rebroadcasting it on Sunday. Check here to find the time in your local area if you missed it on the first go-round.
Read more...First, Jon Stewart on the teacher versus Wall Street pay logic (hat tip reader Scott via Jesse):
Read more...Memristor Processor Solves Mazes Technology Review (hat tip Richard Smith)
IMF warns food prices to stay high Financial Times
U.S. cables detail Saudi royal welfare program Reuters (hat tip reader Tim C)
Ohio GOP may invite backlash with tough stance on unions Washington Post
We are getting only odd tidbits out of the so-called settlement negotiations among the fifty state attorneys general, various Federal banking regulators, and mortgage servicing miscreants (meaning all of them). As Matt Stoller pointed out last weekend, the lack of transparency is troubling. Nevertheless, certain things are apparent.
1. There has not been anything even remotely resembling an investigation. As we have said earlier, the eight week Federal exam was a joke. As Adam Levitin noted:
Read more...The propaganda strategy for selling the public on the creation of supposedly new improved GSEs is becoming more apparent. Recall that we had an initial skirmish a month ago, when the Center for American Progress published a plan to reform Fannie/Freddie and the housing finance system. It would create an FDIC-like insurance fund to stand behind private Fannie/Freddie like entities that will offer reinsurance with an explicit Federal guarantee on mortgage-backed securities. These new firms can also be controlled by banks.
This plan, which was very similar to ones presented by the Mortgage Bankers Association, the Federal Reserve and the New York Fed, t was clearly an Administration trial balloon; the CAP is the mainstream Democrat think-tank, with close ties to Team Obama. But after the CAP proposal got some resistance, the Treasury’s report, which came later in the month, went the route of presenting three alternatives rather than a specific plan. But we argued at the time that this seeming change was merely a tactical move, to present the Administration as fair brokers in a politically fraught process, and that it still favored what we called the GSE 2.0 plan.
We think the idea of reconstituting the GSEs in somewhat improved form a terrible idea because it preserves the bad incentives of a public/private system and launders housing market subsidies in an inefficient and unaccountable way through the banking industry.
Read more...The Science of Women and Cats: The Bond Is Real Time (hat tip reader May S). This study simply shows that cats find women easier to train than men. I suspect most women would find their experience with training men to be broadly similar.
Lasers can act as ‘tractor beams’ BBC
The Battle for Control — What People Who Worry About the Internet Are Really Worried About The Scholarly Kitchen (hat tip reader Richard Smith)
Should we cheer or fear cyber vigilantes like Anonymous? InfoWorld. This is not well argued or reported. Retaliating as Anonymous did with HBGary is not the same as being the aggressor, and Anonymous says it was not responsible for the attack on the Westboro Baptist Church.
I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts. The latest, as we mentioned a few weeks ago, is the prospect of litigation by various local governments asserting the right to the recording fees that the MERS system bypassed.
The press release below is from the Guifford County Register of Deeds in North Carolina. As you can see, he is exploring the county’s options for recouping recording fees he believes that MERS owe to Guifford County, to the tune of $1.3 million (hat tip Lisa Epstein via ForeclosureFraud).
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