The public keeps losing and losing and losing to big finance because financiers have made an art form of using complexity, opacity, and leverage to cover their tracks.
The last example comes in an anodyne-seeming article in the Financial Times about collateralized loan obligations, or CLOs.
Read more...By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha)
“There Goes the Neighborhood,” which ran on 60 Minutes last Sunday, is a must-see piece. Scott Pelley walks through a pillaged house in Cleveland, slated for demolition in a county neighborhood stabilization program. This abandoned house is owned by Structured Asset Investment Trust 2003-BC11. An investor reports lists the property as “in foreclosure” despite no court filing. Ohio is a judicial foreclosure state, so a foreclosure filing requires a lawsuit, but there isn’t one.
Read more...The New York Times reports faithfully that the Department of Justice has entered into the biggest fair lending settlement on record with Bank of America on charges that Countrywide had charged more 200,000 Hispanic and black borrowers higher rates and fees than white borrowers with similar credit records. It also engaged in discrimination by marital status.
Impressive, no?
Read more...By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
Well, it looks like Santa finally stuck his head out of the dark cave for a look around. It is yet to be seen if he rams it straight back in again because he doesn’t like the weather, but at least he has appeared for one night.
Read more...Quite a few housing market experts have argued that principal modifications to viable borrowers are the best way to resolve the housing market malaise. In the stone ages when banks kept the mortgages they originated, mortgage modifications, including principal mods, were standard practice when a borrower got in financial difficulty but was still salvageable. And because these restructurings were done behind closed doors, no one but the banker and his grateful customer were the wiser. But now that servicer bad incentives have meant they don’t do mods unless cajoled or bribed by the government (and not much even then), the topic has entered the public debate.
It had appeared that any principal mod program was going to come over the dead bodies of the banks, who have been feigned compliance with various Federal programs but either dragged their feet and/or gamed the schemes. So it was surprising to read that the acting head of the FHAF, Edward DeMarco, is considering what amounts to a principal mod program implemented through bankruptcy courts.
Read more...We’ve commented previously on Tom Miller as the contemporary exemplar of what in the 1960s was called a credibility gap. Readers no doubt know that he is the lead negotiator on behalf of the state attorneys general in what was formerly called the 50 state attorney general [mortgage] settlement. (Notice separately how the state AGs are providing cover for several Federal banking regulators, HUD and the Department of Justice, which are also parties to this deal).
A partial recap: Miller started by promising criminal prosecutions, then reneged. He has refused to do investigations, then has the temerity to try to claim they took place). He said there would not be a big waiver on mortgage liability, when as we discussed, that was the only thing Miller & Co. could offer that would get a deal to the numbers he had unwisely committed himself to (north of $20 billion). And several state attorneys general have walked from the deal precisely because they object to the plan in motion: a big release when they have an inadequate idea of how much questionable activity is being forgiven.
But the truly absurd part is the continued pretense by Miller that a deal will get done.
Read more...By Mark Ames, the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine. Cross posted from The eXiled
With violence and government crackdowns making headlines from so many familiar parts of the world, there’s hardly been a peep in the media about the biggest and ugliest massacre of all: Last Friday in Kazakhstan, riot police slaughtered up 70 striking oil workers, wounding somewhere between 500 and 800, and arresting scores.
Read more...The development reported by the Financial Times’ Shahien Nasiripour, that the inspector general for the FHFA, the supervisor of Fannie and Freddie, and the Federal Home Loan bank, has decided to share information with New York State attorney general Eric Schneiderman, is far more significant than it appears on the surface.
It’s a well deserved slap in the face of the Department of Justice.
Read more...By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.
Nicolas Sarkozy will be the only French president since World War II with two recessions under his watch, if the forecast by the National Institute of Statistics and Economics (Insee) turns out to be correct. Recessions are rare in France: between the end of the war and the beginning of the financial crisis, there were two. Then came the four negative quarters of 2008/2009. Now, Insee forecasts another contraction: -0.2% in the fourth quarter of 2011 and -0.1% in the first quarter of 2012.
After an uptick over the summer, economic indicators have gone south.
Read more...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
Sixty Minutes’ December 11, 2011 interview of President Obama included a claim by Obama that, unfortunately, did not lead the interviewer to ask the obvious, essential follow-up questions.
I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal.
Obama did not explain what Wall Street behavior he found least ethical or what unethical Wall Street actions he believed was not illegal. It would have done the world (and Obama) a great service had he been asked these questions. He would not have given a coherent answer because his thinking on these issues has never been coherent. If he had to explain his position he, and the public, would recognize it was indefensible.
I offer the following scale of unethical banker behavior related to fraudulent mortgages and mortgage paper (principally collateralized debt obligations (CDOs)) that is illegal and deserved punishment. I write to prompt the rigorous analytical discussion that is essential to expose and end Obama and Bush’s “Presidential Amnesty for Contributors” (PAC) doctrine.
Read more...By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
Yet another interesting night in Europe. Spain managed to over sell as it latest auction with €6.03 billion sold versus €3.5 billion targeted which in the current environment is seen as a good result.
Read more...By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha)
The National Association of Realtors (NAR) has announced that their estimates for home sales have been materially incorrect since 2007, and that they plan to restate the number of homes sales downward. Apparently the NAR derives their homes sales information from the Multiple Listing Services, the proprietary “want-ads” real-estate agents use to list houses for sale.
Read more...As Bradley Manning’s trial is about to move forward, the Real News Network provides a useful and timely reminder of one of the key incidents that Manning publicized, the shooting of a group of Iraqi citizens that included Reuters reporters by a helicopter gunship.
I have a pretty tough constitution, but I was really sickened by this video. I can see why the authorities would be keen to discourage this sort of release.
Read more...By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
For some time now I have been pointing out poor economic policy implementations within the European economy and how those policies are likely to effect the real economies of European nations. As I re-stated on Monday, my major concern with the current thinking from European economic leaders is their misguided belief that implementing austerity before credit write-downs/offs is a credible policy for a highly indebted, non-export competitive nation with a non-deflatable currency.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
Recently I wrote an essay claiming that Austrian economics provided a metaphysical-theological basis for what is today called ‘libertarianism’ – a popular, dogmatic political cult in the vein of Marxism-Leninism. The essay was abstract and, quite possibly, a bit obtuse – for that I apologise, but such is the nature of the material.
If I am correct and libertarianism is a political cult and its foundations were laid by the Austrian economists, what real world effects does this have?
Read more...