Category Archives: Banana republic

Fed Argues that Mortgage Abuses are Trade Secrets, Meaning Institutionalized Fraud

When the media discusses how banks have ridden like a steamroller over borrowers and investors, the typical response is a combination of minimization and distancing: that the offense wasn’t such a big deal and that it was a mistake. Recall the PR barrage in the wake of the robosigning scandal: its was “sloppiness,” “paperwork errors”.

Two major government settlements later, this position is looking awfully strained. And the Fed, in stonewalling Elizabeth Warren’s and Elijah Cumming’s efforts to get more information about the Independent Foreclosure Reviews, presented the bad practices as servicer policies, which means that they were deliberate, hence, fraudulent.

Obama Moves Forward with Cutting Social Security and Medicare as We Lecture Europe Otherwise

It must be really hard to be an Obama defender these days, at least if you are not on a big corporate payroll.

OCC Releases Embarrassing List of Foreclosure Review Payouts on Eve of Senate Hearings

As much as people who were watching the shutdown of the foreclosure reviews expected the payouts to be grotesquely low, seeing the actual numbers is….revolting.

Why Gary Gensler Should be #2 at Treasury

Last week, Simon Johnson pumped for Gary Gensler, now chairman of the CFTC, to become the Deputy Treasury Secretary. Frankly, it would have been better if Gensler were Treasury secretary (an idea Johnson also promoted), but we are past that point. Obama is serious about selling catfood futures via deficit scaremongering, and he’s tagged budget maven Jack Lew as his perfect front man.

Gensler, along with Sheila Bair, has been one of the few financial services regulators who has stood up to industry demands and scored some wins.

GAO Report on Foreclosure Reviews Misses How Regulators Conspired with Banks Against Homeowners

I suppose one has to be grateful for any official pushback against failed regulatory initiatives, such as the just-released GAO report criticizing the Independent Foreclosure Reviews. Of course, in this instance, I am charitably assuming that these reviews were a failure. They have certainly proven to be an embarrassment to the lead actor, the OCC, which has tried to maintain as low a profile as possible on this topic rather than offer any defenses.

But “failure” assumes that the OCC and the Fed did not achieve their real objective, which was to protect the banks. That hardly appears to be the case.

Launching Our First (Free) Ebook on the OCC/Fed Foreclosure Review Fiasco

As a result of many reader requests, we’ve turned our series based on testimony from whistleblowers at Bank of America and PNC on the whitewash more formally known as the Independent Foreclosure Reviews into an ebook, which we are releasing today. Please download, read, and share!

David Dayen: GAO Report on Independent Foreclosure Reviews Exposes OCC, Fed’s Plan to Deliberately Minimize Evidence of Borrower Harm

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

This morning the Government Accountability Office released their second report on the Independent Foreclosure Reviews.

Fiduciary Duty to Cheat? Jim Chanos Reveals the Perverse New Mindset of Financial Fraudsters (by Lynn Parramore)

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

Editor's note: This article is the first in a new AlterNet series, "The Age of Fraud."

Hustlers. Cheaters. Crooks. American business has always had them, and sometimes they’ve been punished. But today, those who cheat and put the rest of us at risk are often getting off scot-free. The recent admission of Attorney General Eric Holder that systemically dangerous megabanks may escape prosecution because of their size has opened a new chapter in fraud history. If you know your company won’t be prosecuted, a perverse logic says that you should cheat and make as much money for shareholders as you can.

How Wall Street Gets Development Agencies to Push Emerging Economies into Derivatives

Yves here. This post helps fill readers in on an important, but under the radar topic: how various international organizations push hard to make emerging markets fertile ground for America’s financiers. I became aware of this practice by happenstance. A McKinsey colleague left to join the World Bank in the 1980s. Her job was to set up capital markets in emerging economies. Later on, she set up private equity funds in emerging economies. She left the World Bank recently to help found an emerging markets PE fund of her own. Mind you, it’s not as if she needed the money. She will get a $160,000 (no typo) annual pension for her time at the World Bank, and if she’d stayed a few more yeas, it would have been $220,000.

However, as this post details, the sort of revolving door practices that have been used to suborn regulators in the US appear to have the same sort of persuasive effect on key development agency officials.

Promontory Decides to Reinvest Part of its $1 Billion of Ill Gotten Gains from Botched Foreclosure Reviews By Buying Hiring Former SEC Chief Shapiro

As regular readers may recall, Promontory Financial Group was one of the huge winners from the joke on the public otherwise known as the Independent Foreclosure Review. The only accurate word in that label, it turns out, was “foreclosure”.

So how is Promontory using all its lucre? Buying up even more former regulators to further its reputation as a connected insider. Mary Shapiro had barely left the SEC when she was nominated for a board seat at General Electric, which despite its image as a manufacturer, has for over two decades had nearly half its revenues coming from financial services. And now Shapiro has been signed by Promontory to help arm-twist regulators not to do their job.

Wells Fargo’s “Reprehensible” Foreclosure Abuses Prove Incompetence and Collusion of OCC

Two bankruptcy cases in Louisiana that have revealed systematic, persistent foreclosure abuses by Wells Fargo have gotten enough media attention that it is inconceivable that banking regulators don’t know about them. The lack of any intervention, or even so much as a throat-clearing by the Office of the Comptroller of the Currency is yet another proof of how the regulator apparently sees its role as fronting for banks rather than enforcing rules.

Obama Plans to Sacrifice Ordinary Americans Yet Again in “Public/Private Partnership” Infrastructure Scam

Apparently Obama’s idea of a Holy Week sacrifice is to feed American citizens to rapacious bankers, this time through the device of “public/private partnerships” to support infrastructure spending.