Category Archives: Politics

Yet Another Reason to Hate the Mortgage Settlement: The Release is Botched

Do you remember the brouhaha before the mortgage settlement was announced about the release? Recall, sports fans, as we stressed often, that this was a cash for release deal. The only motivating factor for the banks was the scope of the release. The Administration and attorneys general kept claiming the release was narrow, even as both the messaging (unintentionally) and snippets of disclosure suggested otherwise.

Neil Barofsky, Matt Stoller, and Your Humble Blogger on Why the Mortgage Settlement Sucks

This Bloomberg interview gives a nice high-level overview of why the mortgage settlement is terrible. It’s particularly useful if you are looking for a few key issues to present to someone who has bought the Obama administration PR or is late to the topic.

Ian Fraser: Will We Finally See Some Bank Board Members Face the Music?

Yves here. As much as the odds still favor clueless or complicit board members bearing no consequences of their misdeeds, the authorities in England are moving forward on the HBOS failure far more seriously than anything we’ve seen in the US. That is no small measure due to the fact that leadership of both the Bank of England and the FSA recognize that banks need to be curbed and have proposed and pushed hard for some serious remedies, such as a version of Glass Steagall (their more aggressive version was beaten back thanks to concerted lobbying by the banks and the Treasury).

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser.

Last Friday was an extraordinary day in the world of banking.

Bill Black: (Re) Occupy Greece

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

While the Occupy Wall Street (OWS) movement set its sights on occupying a financial center, Germany has accomplished the vastly more impressive feat of occupying an entire nation – Greece. Germany has experience at occupying Greece having done so during World War II. The art of occupying another nation is to recruit a local puppet to do the dirty work required to repress the citizens. Germany used several puppets, most notoriously the murderous Ioannis Rallis, to (nominally) rule Greece and terrify the Greek people during World War II. (After Germany’s defeat, Rallis was executed for his treason.)

This time around, Germany has been far more successful in recruiting and using a puppet to (nominally) rule Greece and terrify the Greek people before the German occupation.

Memo to Shaun Donovan: Your Nose is Getting So Long You Need to Get a Hacksaw

I know I owe readers some comments on the mortgage settlement, but that will have to wait a few days, since I need to pack to go to DC later this AM. But that will give me more time to digest the voluminous filings, and at least as important, the onslaught of spin.

For a good overview, read The Subprime Shakeout (hat tip Deontos), with one major caveat: he is far too positive about the servicing reforms. Servicers have not only never met these standards, they cannot meet these standards. The sorry history has been that servicers lose boatloads of money servicing highly delinquent portfolios, make a hash of it and cheat to recoup the losses.

But I couldn’t let this bit of propaganda go without comment. From the settlement FAQ:

Is the Fed Going to Go Easy on the Banks to Help Obama?

We were more than a little surprised to read a Bloomberg story on March 10, which reported that the Federal Reserve was giving banks a hard time over its latest stress tests, particularly on the possible losses on consumer debt if the economy were to take a dive. The story indicated that if the Fed held tough, major banks would be restricted in making dividends and buying stock. This seemed to be quite a volte face from the Fed’s previous “give banks everything they ask for and then some” posture. But some Fed defenders argued, no really, once the banks were out of confidence crisis land, the regulators always planned to get tougher with them about building up their capital bases.

If today’s Bloomberg story is accurate, whatever resolve the central bank had was awfully short lived:

The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements

One in a while, you can discern a linchpin lie on which other important lies hinge. We can point to quite a few in America: the notion of a permanent war on terror, which somehow justifies vitiating not just the Constitution, but even the Magna Carta, or the idea of an imperial executive branch.

Now the apparently-to-be-filed-in-court-today Federal/state attorneys general mortgage settlement is less consequential than matters of life and limb. But it still show the lengths to which the officialdom is willing to go to vitiate the law in order to get its way.

Taxing the Rich Does Not Hurt Jobs

This Real News Network interview with professor of economics Jeffrey Thompson debunks the notion that increasing taxes on the well off is not a negative for employment.

Reader Query: What Sleazy Con Artist Does the Obama “Greatness” Campaign Evoke?

Just when you think things have gotten as bad as they can, whether in matters of great import of small, they manage to get worse. I should be inured to relentless Obama propagandizing by now, but to make sure the public doesn’t miss the fact that they are lucky enough to be governed by someone possessed of true genius, the pre-election PR is now taking on heavy-handed cult of personality overtones. As if Obama has enough in the way of personality for anyone to notice.

Gillian Tett Exhibits Undue Faith in Data and Models

I hate beating up on Gillian Tett, because even a writer is clever as she is is ultimately no better than her sources, and she seems to be spending too much time with the wrong sort of technocrats.

GAO: Almost Half of Bailed Banks Repaid the Government With Money “From Other Federal Programs”

By Matt Stoller, former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at@matthewstoller

The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”.

Lynn Parramore: Schools Without Toilet Paper? The Pain in Spain Falls Mainly on the Plain Folks

By Lynn Parramore. Cross posted from Alternet

Lately, European elites have been congratulating themselves for averting disaster in the eurozone. But who, exactly, is breaking out the champagne?

OCC Servicer Review Firm Also “Scrubs” Loan Files, Fabricates Documents

Reader Lisa N. pointed me to a troubling October 2010 press release by SolomonEdwardsGroup, a company that describes itself as a “national financial services consulting and staffing firm” about its remediation services for “significant loan documentation problems.” Alert readers will recognize that this is shortly after the robosiging scandal broke.

Here are the key parts of the press release:

SEG’s teams can also be rapidly deployed across the U.S., to help banks and servicers “scrub” files and determine which foreclosures may have been tainted by incorrect loan documentation and processing issues such as robo-signing….

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