A Symptom Of A Rotten Financial System
Readers suggested a topic on the economy. “The weekend topic I would like to discuss is: the US is in a stagflationary depression. For the purpose of this discussion, never mind the NBER’s definitions determined by calendar quarters of ‘real’ GDP growth/contraction. The ‘official’ calculation of CPI and its components should be discounted as well, consider the article on Marketwatch today stating that ‘food-at-home’ costs (excludes takeout and restaurant purchases) have increased only 3.9% over the past 12 months.”
“If what followed the 2001 recession was called the ‘jobless recovery,’ what we are living in now should be called the ‘recoveryless recovery.’”
A reply, “Is ‘recovery’ dependent upon housing? No. ‘Recovery’ is dependent upon jobs, increases in income, confidence, etc. Housing then follows. It is my opinion that the housing mania was just a symptom of an already rotten financial system.”
“I make this bold prediction: there will be NO recovery until the banking system is overhauled in favor of the people, and made accountable to the people. NO recovery until the Fed is dissolved and has no more sway over the people. NO recovery until the current politicians at all levels are replaced by those who are willing to be responsible to the people. NO recovery until illegals are run out of the country with their families. NO recovery until we repudiate the debt with China, or do our own manufacturing and producing. NO recovery until we unhook from the globalist system. NO recovery until the corps are made accountable to their customers, only in doing so can they really benefit shareholders. NO recovery until any and every trader and bankster who manipulated the system and profited off the misery of others is properly keelhauled. (an old fashioned form of waterboarding).”
“Bottom line, however, is that there will be NO recovery until the people are confident in their institutions and in their leaders and government. Believe it. I’ve said this from time to time here on the blog: a fiat system depends upon confidence, and that confidence is waning fast.”
“BTW, don’t try to find any logic in the thought processes of most of the members of CONgress, the Administration or SCOTUS. This is difficult to swallow, but you have to accept that most of them are out and out insane. Washington is an insane asylum. I’m not kidding. Most of these people are not fit for decent company.”
“There should be a moat around Washington, filled with gators.”
To which was said, “This is so common sense that I think all of us here agree Yet its not ‘obvious’ to the PTB, meaning they are either idiots or have an agenda.”
One replied to the first second poster, “That Ashton Kutcher is replacing Charlie Sheen on ‘Two and a half men’ matters more in the minds of 90% of the sheeple than any single item in your wish-list above. The sheeple know that something has gone terribly wrong in this country and/or in their lives, but once safely ensconced upon couch with remote and slipping into high-fructose-corn-syrup coma, all is well…”
A reply, “Maybe the sheeple subconsciously appreciate that, unlike banks and government, the entertainment industry doesn’t tolerate moral hazard. Charlie Sheen thought he was too big to fail, and guess what? He wasn’t!”
From Arkansas Online. “Stockholders attending the First Federal Bancshares of Arkansas Inc. special meeting Friday in Harrison approved all the proposals required to shift majority interest in the publicly traded company to a Little Rock-based investment group.”
“It also clears the way for Bear State Financial Holdings, owned by about two dozen investors including Joe Ford, Scott Ford and Rick Massey, to inject $55 million into the financially unstable bank and buy out its federal Troubled Asset Relief Program shares at a severe discount.”
“Bear State will pay about $6 million for the bailout shares, worth about $16.5 million. The Treasury Department has been discounting repayment of the investment it made under the Troubled Asset Relief Program for the banks having the most problems making their repayments.”
“The discounts are being made rather than allowing the troubled banks to fail or lose potential buyers.”
“The Treasury agreed to discount First Federal’s repayments by 63.6 percent as part of the company’s pending acquisition by Bear State Financial Holdings, according to a Treasury Department news release April 20. First Federal has missed several bailout repayments, including the most recent one that was due in February, according to the department release.”
The Times Herald. “And then there were none. At 15 minutes before closing time Friday evening, the Sharpsburg branch of First Choice Community Bank had every appearance of a normal business day. But less than half an hour later, it and all other local First Choice branches had the now familiar FDIC notices posted in the window, stating that an Arkansas-based bank will be acquiring the bank’s assets.”
“Bank of the Ozarks, Little Rock, Ark., acquired the banking operations, including all the deposits, of First Choice and a Valdosta-based Bank, The Park Avenue Bank, late Friday. To protect depositors, the Federal Deposit Insurance Corporation entered into purchase and assumption agreements with Bank of the Ozarks. The Georgia Department of Banking and Finance closed the banks and appointed the FDIC as receiver.”
“The FDIC and Bank of the Ozarks entered into loss-share transactions on the failed banks’ assets. The loss-share transaction for First Choice Community Bank was $260.7 million, and the loss-share transaction for The Park Avenue Bank was $514.1 million. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for First Choice Community Bank will be $92.4 million, and for The Park Avenue Bank, $306.1 million. Bank of the Ozarks’ acquisition of all the deposits of the two institutions was the “least costly” option for the DIF compared to all alternatives.”
“Michael Chaffin, former president and CEO of First Choice Community Bank, said that the term ‘troubled assets’ in the relief program prepared by the U.S. Congress was too narrowly defined to be of much help to community banks like First Choice. ‘Most community banks do not hold mortgage paper,’ he said at the time. ‘Savings and loans did in the past, but it doesn’t work on a small bank’s balance sheet. So if this bill is specifically for the purchase of mortgage paper, then the direct impact for us would be zero.’”
“As it turned out, TARP had a negligible impact on community banks, and many failed even as they sought more assistance. ‘Large banks are getting the large part of the money,’ said Chaffin at the time. ‘I don’t know why.’”
“First Choice at first appeared to have weathered the storm, but in February 2010, the bank announced that it had agreed to enter into a consent order to merge with its sister bank, First Choice Community Bank of Dallas, Ga., as fallout from an April 2009 bank examination. ‘As everyone is aware, banks in the Atlanta metro area have been negatively impacted by the housing crises of the past few years,’ said Chaffin at the time of the merger.”
“‘Losses associated with falling real estate values and with land development curtailment have reduced bank earnings,’ he said. ‘We at (First Choice) have not been immune to these real estate woes,’ he said.”
“‘However, the good news is that our bank remains ‘well capitalized,’ as defined by the FDIC,’ he said at the time.”
It’s all about the deleveraging.
The government has hocked the China to make it more disastrous in the short term than it would have been. But that is just making it last longer.
The gradual withdrawl of herion from Uncle Sugar will mean a new locus of pain. Those student loans can’t be paid back at lower wages, and those private equity loans can’t be paid back at higher interest rates. And the real estate delveraging has years to go.
“It’s all about the deleveraging.”
Deleveraging = destruction of debts.
Money that is owed and can’t be paid is money that won’t be paid. Whomever is on the wrong end of this transation (or rather, lack of transaction) is hosed.
This is an environment where cash rules because this envrionment creates a shortage of the stuff.
Cash rules.
Kotch throws money at Florida State University and in return he gets to call the shots as to who gets to teach (and who doesn’t), what will be taught (and what won’t).
The University seems to be going along with this because (choose one):
1. They love Kotch.
2. They are desperate for money.
Kotch = Koch
Pronounced like “Coke”
Oh please - how many times are you going to bring this up?
Instead of having an 87% chance of your college professor being a liberal/democrat it will now be only 86.9999%…
———————————
College Faculties A Most Liberal Lot, Study Finds
By Howard Kurtz
Washington Post Staff Writer
Tuesday, March 29, 2005
College faculties, long assumed to be a liberal bastion, lean further to the left than even the most conspiratorial conservatives might have imagined, a new study says.
By their own description, 72 percent of those teaching at American universities and colleges are liberal and 15 percent are conservative, says the study being published this week. The imbalance is almost as striking in partisan terms, with 50 percent of the faculty members surveyed identifying themselves as Democrats and 11 percent as Republicans.
The disparity is even more pronounced at the most elite schools, where, according to the study, 87 percent of faculty are liberal and 13 percent are conservative.
“What’s most striking is how few conservatives there are in any field,” said Robert Lichter, a professor at George Mason University and a co-author of the study. “There was no field we studied in which there were more conservatives than liberals or more Republicans than Democrats. It’s a very homogenous environment, not just in the places you’d expect to be dominated by liberals.”
Interesting critique of why more professors are liberal.
http://www.nytimes.com/2010/01/18/arts/18liberal.html
Well, bannana, since you seem to have missed my point I’ll try to explain it to you:
My point is about the power of cash when an economy is starved of the stuff; My point has nothing to do with what the cash is specifcally used for.
When cash is scarce and such things as principles are at stake then often it’s the principles that yield. This seems to be the case at Florida State U.
Principles always yield to hunger and desperation.
Most people do have a price even without the above.
The stat he didn’t tell you is that, like me, 60% of those professors who identified themselves as “liberal” were formerly considered “moderate” or “middle of the road”.
Nothing changed except the labels.
What were formerly “right-wing whacko-John Birch/Koresh worshipping semi-fascist Religious extremists” = Mainstream Republicans
Or your average Fox Viewers.
Nanny-nanny boo-boo………
I would expect Oral Roberts University to be a notable exception.
I would also be interested to know what percentage of theologians and engineering professors are liberal versus conservative. Based on thoroughly unscientific methods, it seems to me that the percentage of engineers that are libertarian is higher than in other fields.
I do think X-GS has hit on something. The definition of conservative has taken a hard right in recent years.
“…college professor being a liberal….”
Not “a” liberal. Liberal.
Maybe it’s because colleges and universities tend to attract smart, thoughtful, analytical people instead of the narrow-minded?
By definition, “liberal” means “open-minded, not bigoted.” (Go ahead, look it up.) Institutions of higher learning are just that; places where people gather to advance critical thinking and new ideas. That is to say, not conservative.
One cannot learn with a closed mind, you see….
“The government has hocked the China ”
Hold on- who hocked who?
The federal government hocked the China to China. Perhaps I should have said the federal government hocked the silverware.
All your Treasuries are belong to us?
I printed that ad before E-bay pulled it.
and made accountable to the people
sounds too much like “and give us all cheap loans.”
Wall Street, the Government, AND realtors are liars…
“At 15 minutes before closing time Friday evening, the Sharpsburg branch of First Choice Community Bank had every appearance of a normal business day. But less than half an hour later, it and all other local First Choice branches had the now familiar FDIC notices posted in the window, stating that an Arkansas-based bank will be acquiring the bank’s assets.”
Yet another seamless, odorless, tasteless, noiseless FDIC takeover goes down without a hitch. No need to panic, folks!
The number of zombie banks still out there is truly staggering. They’re only taking down the small ones, propping up the biggest ones. Megabank, Inc. rules!
The destruction of the small community banks and strengthening of the monolithic megabanks might be the most destructive aspect of the 2008 financial collapse. Less and less choices and more and more give a damn too big to fail banks.
I cannot see this ending well.
They had the choice of saving the first class passengers, or the people in steerage.
The first class gets the lifeboats, and steerage gets the “Don’t panic, everything is under control” speech.
No, we are not talking about the Titanic.
‘Large banks are getting the large part of the money,’ said Chaffin at the time. ‘I don’t know why.’
Says the man who didn’t purchase any ‘elected’ representatives in advance.
Speaking of the rotten financial system…
Bair: Robo-Signing Probe “Narrow” with Damages Years in the Making
05/12/2011
By: Carrie Bay
The head of the FDIC says the regulatory investigation into the foreclosure processing issues raised by robo-signing allegations was “narrow.”
“[W]e do not yet really know the full extent of the problem,” outgoing FDIC Chairman Sheila Bair told lawmakers on Thursday.
In speaking to the Senate Banking Committee about the implementation of the Dodd-Frank Act and addressing systemic risk, Bair described the “deeply flawed [mortgage] servicing practices which have yet to be corrected,” as one of the primary risks to the future of the nation’s financial system.
She says it’s one that “must be proactively addressed by the government” and added that the extent of the damages from the resulting overhang of foreclosures and looming litigation exposure from both investors and borrowers “could take years to materialize.”
“Servicers have already encountered challenges to their legal standing to foreclose on individual mortgages,” Bair said. “More broadly, investors in securitizations have raised concerns about whether loan documentation for transferred mortgages fully conforms to applicable laws and the pooling and servicing agreements.”
…
“More broadly, investors in securitizations have raised concerns about whether loan documentation for transferred mortgages fully conforms to applicable laws and the pooling and servicing agreements.”
Translation: LLoyd Blankfein, Angelo Mozillo, Dick Fuld, and the like, are sitting on billions of ill-gotten cash which needs to be clawed back as their @sses are hauled to prison.
Those “investors in securitization” who are now “concerned” are going to find out that “concern” and 50 cents will get you a cup of coffee, as far as the Federal Government is concerned.
The only was to “fix it” without tying things up in the courts for the next 15-20 years (at best), is to retroactively legalize fraud, forgery, embezzlement, tax fraud, ………anything missing?
The Federal government realizes that, by giving the banksters a couple of trillion bucks, basically free, the banks “own them”.
The plan is to baffle the serfs with BS, and hope that the banksters can steal enough money from somewhere else, before the serfs figure stuff out.
“More broadly, investors in securitizations have raised concerns about whether loan documentation for transferred mortgages fully conforms to applicable laws and the pooling and servicing agreements”
Short answer- It doesn’t.
O-oh, MERSy, MERSy me….
IMHO, a lot more and bigger heads will have to roll on Wall Street before the Nation can put the financial crisis behind us. (Not to suggest that Raj Raj’s head isn’t quite large…)
May 13, 2011, 6:49 pm
Podcast: Insider Trading, Robo-Signing and Food Claims
By JEFF SOMMER
The Galleon hedge fund trial was perhaps the most prominent insider-trading case in a generation — and the conviction of Raj Rajaratnam, the hedge fund’s co-founder, has been portrayed both as a great victory for the prosecution and as a chilling warning that lawbreaking, even by the very rich, will be harshly punished.
But will the case have broader implications for Wall Street and for law enforcement?
Peter Lattman, who covered the trial for The Times, addresses these questions in the new Weekend Business podcast. Investigations continue into the use of expert networks to provide information to hedge funds, and the use of wiretaps in the Galleon case may have a deterrent effect on those who may be tempted to violate the rules, he says. Still, the hedge fund investigations don’t bear directly on the major issues that arose in the financial crisis, he says, and very few criminal cases have been brought against those who might be responsible for the economic cataclysm from which the United States is still recovering.
In a separate conversation, Gretchen Morgenson focuses on evidence of widespread robo-signing and other shady practices by mortgage servicers who helped to force troubled borrowers out of their homes. Some of those firms have offered to pay $5 billion to settle allegations brought by state attorneys general, who have apparently demanded much more. Evidence of extensive and abusive servicing practices, meanwhile, has been amassed by the United States Trustee, the Justice Department unit that monitors the bankruptcy system. Ms. Morgenson writes about these issues in her column in Sunday Business.
…
In the early 00’s. the FBI warned of an alarming increase in mortgage fraud at all levels. They were specifically directed by the Bush administration DOJ to ignore it and concentrate on terrorism.
It would be nice if the NRO would use some of those state of the art wire tapping/satellite imaging/wireless intercept technologies against Wall Street criminals.
You just slip out the back, Jack
Make a new plan, Stan
You don’t need to be coy, Roy
Just get yourself free
Hop on the bus, Gus
You don’t need to discuss much
Just drop off the key, Lee
And get yourself free
– Paul Simon
Survey: More Underwater Homeowners Open to Strategic Default
05/13/2011
By: Carrie Bay
Nearly twice as many underwater borrowers think it is okay to walk away from a mortgage if they face financial distress than harbored this sentiment a year ago, according to the results of a survey conducted by Fannie Mae.
The GSE found that because of feelings that they are less financially secure, 27 percent of homeowners with negative equity would consider strategic default as a viable option. That stat is based on a nationwide poll taken during the first three months of this year, and is up from 15 percent who answered so in the January 2010 survey.
…
That’s got to be an awkward survey for Fannie Mae to conduct.
“So, would you ever consider walking away from your mortgage and defaulting?”
“I can do that?”
“Um, no.”
U.S. default could prompt new recession: study
A ”For Sale- Bank Owned” sign sits in front of a home in Pontiac, Michigan June 19, 2009. REUTERS/Rebecca Cook
By Andy Sullivan
WASHINGTON | Fri May 13, 2011 12:27pm EDT
(Reuters) - The United States could plunge back into recession if inaction in Washington forced a debt default, according to a new analysis that arrives as the country reaches the legal limits of its borrowing authority.
Some 640,000 U.S. jobs would vanish, the housing market’s woes would deepen, stocks would fall and lending activity would tighten if the country were unable to pay its bills, according to a report by the centrist think tank Third Way due out on Monday.
The Treasury Department is expected to hit its $14.3 trillion borrowing limit on Monday, making it unable to access the bond markets again. Lawmakers from both parties say they won’t approve a further increase in borrowing authority without steps to keep debt under control.
But observers do not expect a deal to emerge for several months.
The Treasury Department says it can stave off default until August 2 by drawing on other pots of money to pay its bills.
Treasury officials have warned of “catastrophic” consequences if Congress does not approve a further debt-ceiling increase by then, but have declined to say exactly what would happen.
…
“Catastrophic” to whom?
Hey when I was young and maxed out my cards that was it for “glorious living” and time to live within my means. No ifs and whats about it!
I do not see why this should be different for us as a country!
Orders of magnitude.
And it is easier to dig out of a personal hole if everyone else is not also trying to dig out of their own hole at the same time.
“consider the article on Marketwatch today stating that ‘food-at-home’ costs (excludes takeout and restaurant purchases) have increased only 3.9% over the past 12 months”
3.9%? On what planet. I just got back from the grocery store and EVERYTHING is up, up and away. I’d say prices are up 20-30% from a year ago.
I just can’t wait for QE3!
The volatile food and energy sectors don’t even count towards inflation.
As I’ve been saying since last year…
“consider the article on Marketwatch today stating that ‘food-at-home’ costs (excludes takeout and restaurant purchases) have increased only 3.9% over the past 12 months”
You would have to shop really carefully for food-at-home costs to have only gone up 3.9 percent over the past 12 months. And even if you could do that, what you were able to purchase would not be equivalent to what you could purchase a year ago with the same amount of money. Nothing has fallen in price and some items have increased 50 percent or more.
Commercial real estate poisoning small banks
By Ken Sweet May 13, 2011: 2:55 PM ET
NEW YORK (CNNMoney) — The troubled commercial real estate is slowly killing off the nation’s small and regional banks, and industry experts fear the worst is yet to come.
The delinquency rate on commercial mortgage-backed securities hit a record 9.62% in April, according to a report by Trepp, a firm that tracks commercial real estate and banking data.
Analysts expect that to rise above 10% by year end. On the bright side, that forecast marks a slight improvement over prior estimates that called for defaults to top 12%.
The bulk of these rising delinquencies is falling squarely on the shoulders of the nation’s already struggling small and regional banks, forcing dozens to close.
The next crisis: Commercial real estate
Thirteen banks failed in April, with nearly all them heavily exposed to commercial real estate. It’s a familiar pattern that U.S. regulators say they’ve been observing for several months.
“Commercial real estate is a common thread among the more recent bank failures,” said David Barr, spokesman for the FDIC. “When the [financial] crisis started in 2008, most banks got into trouble because of residential mortgages, but in 2009 we started to see that slowly transition over to commercial real estate.”
…
A 35,000 square foot professional office building owner is petitioning the city of Encinitas to be allowed to convert the building’s use to 25 condominium units. This office building currently has a bank and Triple A among it’s tenants and doesn’t appear to have any vacancies, unlike many other buildings along the El Camino Real. What’s the advantage of such a conversion for the building owners?
They know something that we don’t… and it isn’t pretty.
In a “normal” economy, wouldn’t commercial use of these 35,000 square feet pencil out more favorably? I’d think retrofitting to accommodate kitchens, laundry rooms and more bathrooms would be hugely expensive, but what do I know. Maybe they’ve had to drop their lease rates dramatically given all the empty spaces in the vicinity. Aesthetically speaking, the building does seem well-suited for a residential conversion and the property has enough parking.
Residential condos or office condos?
Dallas’ Comerica Bank Tower at risk of default
FILE/Staff Photo
The Comerica sign lit up the Dallas skyline for the first time in late 2007, shortly after the bank moved into five floors of the tower as it relocated its headquarters from Detroit. It is a tenant and not involved in the financing of the 60-story building.
By BRENDAN CASE and SHERYL JEAN
Staff Writers
Published 13 May 2011 12:00 PM
A $180 million loan on Comerica Bank Tower in downtown Dallas has been transferred to special servicing because of a risk of default, according to Fitch Ratings.
That makes it one of the largest and highest-profile troubled assets in North Texas in years.
Metropolitan Real Estate Investors LLC bought the tower — the third-tallest in Dallas — in late 2006 for $216 million. Haim Revah, principal of Metropolitan Real Estate in Los Angeles, did not reply to interview requests Friday.
“It doesn’t necessarily mean that the property is going into foreclosure, but it means something has gone awry,” said Chuck Dannis, who teaches real estate at Southern Methodist University’s Cox School of Business.
“The special servicer is the one that starts working with the borrower on behalf of all the people that have bought into that mortgage-backed security,” Dannis said. “This is really very common in today’s market. Things that were done in 2004 through 2007 are being recast, if you will. Sometimes they work out and sometimes they don’t.”
…
Campbell House in default on mortgage, to be sold at Master Commissioner sale
By Beverly Fortune — bfortune@herald-leader.com
Posted: 12:00am on May 11, 2011; Modified: 3:16pm on May 11, 2011
The Campbell House underwent a $10 million renovation in 2004, when the name of the hotel was changed to Crowne Plaza Lexington.
RON GARRISON | STAFF
The Crowne Plaza Lexington — The Campbell House, one of Lexington’s iconic hotels, is in default on its $21 million mortgage and will be sold at a Master Commissioner sale on May 23 in the Fayette County Circuit Courthouse.
Circuit Judge Pamela Goodwine awarded a judgment against the owners and on April 28 ordered the property sold to pay the lender, JPMorgan Chase, of Atlanta.
…
Analysis: Most U.S. commercial property has long way to go
By Ilaina Jonas
NEW YORK | Fri May 13, 2011 4:11pm EDT
(Reuters) - The reports of U.S. commercial real estate’s recovery have been greatly exaggerated.
Some marquee properties in major U.S. cities recently have sold at high valuations, leaving many investors celebrating the commercial real estate sector’s comeback. But not everyone’s been invited to the party.
For most markets, property values are still depressed and will not likely improve decisively until the economy can generate significant sustainable job growth, and lenders are willing step in and finance transactions.
A sluggish property market recovery could be fatal for many smaller banks — those with assets below $10 billion — which hold $724 billion of commercial mortgages maturing in the next five years.
If property values in weaker markets, such as Cincinnati or Indianapolis, don’t improve before the loans come due, many borrowers will be forced to default. Community banks tend to have the biggest commercial property holdings as a percentage of overall assets, so mass defaults could cause scores of those lenders to fail.
“The problem that no one’s really addressed is how many banks are in trouble.” said Daniel Neidich, chief executive of Dune Real Estate Partners, which manages funds that target distressed and other underperforming properties. “Obviously, where a third of your assets are overvalued, what’s that say about the bank?”
It’s a race against time.
…
Most small business owners I know are struggling. Not all, but most.
I second this.
I suspect small business is a far better barometer on the economy than whatever measures the PTB use to determine how great things are getting. As a small business owner things are tough right now and they are NOT improving.
Wall St and DC whoop it up while Main St. burns to the ground.
Things at the small biz where I work have taken a turn for the worse. We laid another employee off this week as it has suddenly very hard to drum up new business (we do contract design and engineering work).
Thank goodness the contract I’m assigned to has a few years left on it.
I agree too. In Canada our strong dollar has shut off a lot of sales to the US. Our mfg has not yet recovered, going from really low one month to almost normal next month. Margins are being squeezed and work being taken on just to satisfy cash flow.
Not back to normal although jobs that were lost have been replaced (but not mfg jobs).
Our housing is extremely overpriced and sheeple are buying at escalated prices this spring. We will probably have a heavy fall if this keeps up.
Despite abundant evidence that government-subsidized mortgage finance played a leading roll in the 2008 financial collapse, Uncle Sam doesn’t seem quite ready yet to relinquish his role in housing finance.
New Bipartisan Bill Seeks to Maintain Government Role in Mortgages
By Daniel Indiviglio
May 13 2011, 2:28 PM ET 2
Anyone who believes the government’s role in mortgages caused the financial crisis won’t be pleased this week: a new bipartisan bill (.pdf) has been introduced which would keep its influence firmly in place. Although the legislation would eliminate Fannie Mae and Freddie Mac, it would replace them with new utility-like private firms that utilize government guarantees to finance mortgages. Would this new proposal solve the problems that have plagued housing finance?
…
The government became Wall St’s sugar daddy 30 years ago.
And vice-versa. Why do you think the politicos act the way they do?
http://www.ritholtz.com/blog/2011/05/jezebels-undermining-financial-overhaul/
Michigan appeals court ruling could erase thousands of foreclosures
2:05 AM, May. 13, 2011
Written by
MATTHEW MILLER
LANSING STATE JOURNAL
The Michigan Court of Appeals ruled last month that a company called Mortgage Electronic Registration Systems Inc. did not have the right to initiate foreclosure by advertisement on two homes because it didn’t actually own any interest in the debt.
That might sound unexceptional, but for the fact that MERS, whose business is keeping electronic mortgage records, has initiated thousands of similar foreclosures in Michigan, 469 of them in Ingham County in just the last two years.
The court’s decision could invalidate those proceedings and potentially impact foreclosed homes that since have been sold to new buyers.
Debbie Barnett, the owner of the East Lansing real estate company Tomie Raines Inc., said the company already has halted one sale of a MERS-foreclosed home.
Not only have people lost their homes under a process the Court of Appeals declared illegal, said Curtis Hertel Jr., the county register of deeds, but “we also have people who have legitimately bought those homes and now are going to have problems insuring the title in the future when they go to sell the property.”
The idea behind MERS is to allow banks and other financial institutions to avoid the filing fees and potential delays that come with recording every transfer of ownership in every mortgage with a local register of deeds. MERS acts as the owner of record, while investing no actual money. The banks buy, bundle and resell.
The legal problems in Michigan and in a handful other states began when MERS tried to act like an owner in more than name, Hertel said.
“This is just another example of the banks doing things improperly that is causing huge problems for individual citizens and local government,” he said. “Unfortunately, they created this shadow registry and, on top of that, let this shadow registry act as the bank.”
…
incipit MERS meltdown
Incipient?
I concur. It’s an avalanche in progress, reported on an ongoing basis by the MSM, but hasn’t yet nailed its future financial sector victims.
incipit: here begins (Latin)
I like to use Latin for momentous occasion.
Comment:
It’s not really very hard at the moment to find evidence of the rotten financial system; rather, there is such a cornucopia of evidence that I could easily sit here and post continuously for the remainder of a beautiful Saturday and never run out of material.
Or a month of Saturdays.
Thank you Professor Bear
Hard to believe as this may seem, piracy seems to offer even richer returns to its managers than banking does.
The Associated Press
May 3, 2011, 11:39PM ET
8 people cited, released in protest at Wells Fargo
More from BusinessWeek
Somali Pirates’ Rich Returns
SAN FRANCISCO
Police say eight people were cited and released after a protest at the corporate headquarters of Wells Fargo.
Police did not provide an estimate of the number of people taking part in the protest Tuesday afternoon, but television video showed what appeared to be hundreds of people demonstrating outside as the company held its annual shareholders meeting at its San Francisco headquarters.
San Francisco police Sgt. Mike Andraychak says the people cited, five men and three women, had blocked an entrance to the building and refused to leave.
The group holding the demonstration described itself as a coalition of homeowners and clergy who were protesting the bank’s foreclosure procedures.
…
Under the seemingly-reasonable assumption that the U.S. households who received foreclosure filings in 2006, 2007, 2008, 2009 and 2010 were distinct households, the percent of all U.S. housing units which have received foreclosure filings over the five year period since 2006 is
0.58 (2006) + 1.03 (2007) + 1.84 (2008) + 2.21 (2009) + 2.23 (2010) =
7.89 (one in 13 over the 2006-2010 period).
Given that 2.23% of U.S. housing units which received foreclosure filings in 2010 consisted of 2.87m properties, the total number of housing units which received filings since 2006 must have been around (7.89/2.23)*2.87m = about 10.2m. And don’t forget that there are millions of more homes whose owners have defaulted on their mortgages which have yet to enter the foreclosure pipeline.
Our banking system has ceased to exist as a service industry; rather it has turned into a menace to Main Street American households, and should be radically overhauled.
SF protesters slam foreclosure scam
Wed May 4, 2011 6:42PM
Over 100 housing activists gathered outside of the Wells Fargo shareholders’ meeting in San Francisco to protest the firm’s economic policies.
The protesters, on Tuesday, accused the banking giant of predatory lending, not paying taxes and foreclosing on homes by using fraudulent paperwork.
The foreclosure crisis, sometimes referred to as foreclosure-gate, is an ongoing and unresolved issue in the United States and refers to an apparently widespread epidemic of improper foreclosures initiated by large banks and other lenders.
As of October 14, 2010, all 50 U.S. states have entered a joint investigation into the mortgage industry. The joint investigation aims to determine the veracity of allegations that banks have not reviewed foreclosure documents properly or have falsified documents in order to evict homeowners.
RealtyTrac, the leading online marketplace for foreclosure properties, released its Year-End 2010 U.S. Foreclosure Market Report.
The report showed a total of 3.82 million foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on a record 2.87 million U.S. properties in 2010, an increase of nearly 2 percent from 2009 and an increase of 23 percent from 2008.
The report showed 2.23 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 2.21 percent in 2009, 1.84 percent in 2008, 1.03 percent in 2007 and 0.58 percent in 2006.
Back in 2005 I would tell people I knew to expect 5 million foreclosures in the next decade. They were incredulous at the time, but it turns out I was indeed wrong. My estimate was far too low!
I’m thinking it’s currently looking like 13m(+/-). But that could prove wrong, too, as it is only based on those who have defaulted or received foreclosure notices so far. It’s worse than I expected, too.
Two things seem quite likely:
1) This will go down in history as the worst, ever, mortgage crisis (e.g. worse than the 1930s).
2) Major, though as yet unannounced, systemic reform is on the way. Circumstances will force it on the policy makers, whether or not they have yet recognized it.
Report: Big Banks Leaving Abandoned, Foreclosed Homes in Ohio
Activists protest outside a Wells Fargo shareholders meeting in San Francisco. Photo: Justin Sullivan/Getty Images
by Asraa Mustufa
Tuesday, May 10 2011, 12:03 PM EST
PAYDAY LENDERS SWARM BLACK NEIGHBORHOODS
National People’s Action released a report on Monday that shows the extent of foreclosures in Ohio, one of the states hit hardest by the national housing crisis. The three-city study projects that about one in every 10 homes in Cleveland, Cincinnati, and Columbus have received a foreclosure filing since the onset of the national financial crisis in 2007, and that black homeowners were hit especially hard. The homes that banks took have also sat unsold, further depressing the neighborhoods’ economic outlook.
The rate of foreclosures reported in the study area is equal to more than one home falling into foreclosure for every city block, on average, across the three cities since the beginning of 2009. Roughly half of these foreclosure filings were made by the country’s largest banks, including JP Morgan Chase, Bank of America Wells Fargo, Citibank and US Bank.
The report also found that in the study area, about 40 percent of all homes lost to foreclosure were repossessed by one of these big banks, at rates especially high in African-American communities. Foreclosed homes becoming bank-owned property occurs three and a half times more often in majority African-American areas when compared to neighborhoods with low African-American populations.
Foreclosed homes that sit unsold—held by banks that refuse to market them at their actual, lower value—also exacerbate the problems of housing vacancy in urban communities. The increase in bank-owned properties in the study area created an estimated 10 to 30 percent increase in already high home vacancy rates in impacted neighborhoods of Cincinnati, Cleveland, and Columbus.
Colorlines has previously reported on the disproportionate impact of subprime lending and foreclosures on communities of color, and Ohio’s hardest hit communities tell a similar story. The report finds that foreclosure filings in the Ohio cities were, on average, almost three times more concentrated in communities of color than in majority white areas.
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Uh maybe they know that $150K houses sell a lot faster then $400K ones….
Blaze on Van Duzer Street points up scourge of neglected properties
Published: Saturday, May 14, 2011, 12:38 AM
Updated: Saturday, May 14, 2011, 12:45 AM
Deborah E. Young By Deborah E. Young
STATEN ISLAND, N.Y. — Charred box springs, mangled aluminum siding, a coffee mug, window guards, fire-blackened wood: The ash-covered trash heap that for the past week blocked the sidewalk outside 845 Van Duzer St. was removed by the city yesterday after the Van Duzer Civic Association staged a protest to decry the dangerous conditions.
But even after the city Sanitation Department took care of what the owners were supposed to have done after the May 6 electrical fire — they cleaned up — and the city Department of Housing Preservation and Development (HPD) pledged yesterday to cover the burned-out windows, questions remain about the property.
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“This is a vacant owner, and nobody is taking responsibility for it,” said Clark Webb, treasurer of the civic association, who lives in a beautifully maintained house across the street.
He showed off a thick printout of two years’ worth of letters about the property.
“The foreclosure process for any individual or institution has always been complicated and not without its flaws,” states an e-mail sent by the Resolution Center of the Texas-based Bank of America less than a month before the fire. “Due to privacy laws, we are not going to comment on the specifics of this property. … In any manner, we recognize your concerns and will work with your local government officials, the police department and the owners of record in removing the unauthorized persons from the property.”
According to public records, Matamora Shannon and Sanga Anna Doe paid $455,000 for the home in 2006, signing a subprime loan of $364,000.
Despite foreclosure proceedings, they remain the owners of record. Neither responded to a request for comment yesterday.
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Where that “eminent domain” when you need it?
Oh yeah, the lot isn’t big enough to put a shopping center/office on.
Doesn’t the Freedom of Information Act suggest that the Consumer Bureau should have license to make complaints about illegal bank actions against U.S. households and small businesses should be public information? This would also be a very useful way to collect information which could support legal action against the myriad criminal banking operations which currently infest the U.S. financial system. Why should the U.S. public expect the privately held and secretive Federal Reserve Bank to make good on hidden information about fraudulent banking practices, without the implicit oversight of the American public to provide the requisite political pressure?
Banks Push Consumer Bureau to Keep U.S. Complaint Line Private
By Carter Dougherty - May 13, 2011 12:00 AM GMT-1000
Under the Dodd-Frank regulatory overhaul, the Consumer Financial Protection Bureau must establish a way for banking customers to submit reports about their problems with products and services. Photographer: Spencer Platt/Getty Images
The new U.S. consumer agency, which has yet to begin formal operations or write a rule, is already being squeezed between banks and advocacy groups over how to set up a complaint hotline.
Under the Dodd-Frank regulatory overhaul, the Consumer Financial Protection Bureau must establish a way for banking customers to submit reports about their problems with products and services. At issue is what happens after they’re filed.
Nonprofit groups such as Consumers Union and the Sunlight Foundation are pushing for an open system that would allow anyone to scan the raw submissions. Industry groups including the American Bankers Association argue that making them public could allow frivolous complaints to damage reputable brands.
“The point of banking supervision is to get the system working properly, not to air dirty laundry and scare capital away from banks,” Richard Riese, senior vice president at the bankers association’s Center for Regulatory Compliance, said in an interview.
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What a load of crap. Current privacy laws already establish the procedures.
It’s another free speech* (cough) effort by Megabank, Inc.
*AKA propaganda…
“stagflationary depression”
I don’t know who coined this, but I was thinking the exact same phrase just the other day.
My hat is off to you. This is exactly what we’re going through.
Indeed. I once read an interview with Jim Carrey where he talked about his experience taking Prozac or some such antidepressant. He described the feeling as a sort of low-level despair.
Sheesh, I didn’t finish the post, and some readers are probably wondering what that has to do with the price of beans. Well, it’s something you can sort of feel in the air, a low-grade anxiety that people are experiencing, that sort of goes along with the stagflationary depression.
The economy is in a malaise is how I would describe it
Luckily Obama’s covert mission succeeded where Carter’s failed, so even if Iran did take hostages right now Obama will always be seen in a favorable light in comparison to Jimmy. IMO.
It’s deja (1970s) vu all over again.
Ben,
Are you saying that an enconomy that is largely based on ever increasing levels of debt both within individual households and with our governments is not sustainable ?
That an economy that rewards home ownership and house trading over saving, education and hard work is not a sound economy or sustainable?
That an economy that forces the middle class to share an ever increasing percentage of the tax burden, including costs to educate and sustain a ballooning illegal migrant population, is not sustainable ?
That an economy who’s central bankers have decided to devalue the U.S. dollar and, unoffically, declare war on all people (mainly the middle class) who save in the form of U.S. dollars is not healthy and sustainable?
That an economy who’s federal government is incapable of dealing decisively with any difficult issue, including and especially the current budget defict and current national debt levels is not sustainable?
That an economy saddled with massive entitlement programs that are projected to grow and grow for the foreseeable future is not sustainable?
That an enconmy with approximately 9% unemployment and approximately 25% underemployment with no major forecasted improvments is not sustainable?
Please say it ain’t so, Ben…
And now we have to listen to a bunch of jokers line up and tell us how they aim to fix it all as our new President… yea, righto… can’t wait to show the world again our (real) ugly side with the upcoming Presidential politics…
“Are you saying that an enconomy that is largely based on ever increasing levels of debt both within individual households and with our governments is not sustainable?”
Evidently.
Dumb question of the evening: Has the Supreme Court been compromised by multinationals with bank? How did that “Free Speech” ruling possibly ever pass? Why have the Supremes abandoned Constitutional principles?
America is doomed if we continue down this path.
“A Symptom Of A Rotten Financial System”
Here is a symptom of rot: I’m guessing this guy will buy his way out of reach of the hand of justice.
I.M.F. Names Replacement as Chief Awaits Arraignment
By AL BAKER and STEVEN ERLANGER
Published: May 15, 2011
Hours after its chief, Dominique Strauss-Kahn, was arrested in connection with the alleged sexual attack of a maid at a Midtown Manhattan hotel, the International Monetary Fund on Sunday named John Lipsky as acting managing director.
Robert Galbraith/Reuters
John Lipsky will step in to replace Dominique Strauss-Kahn as director of the I.M.F.
Mr. Lipsky, the I.M.F.’s first deputy managing director, is a former U.S. Treasury executive and onetime banker at JP Morgan. William Murray, an I.M.F. spokesman, said that Mr. Lipsky, who has been overseeing the logistics of the bailout of the Greek economy, would meet with members of the I.M.F. board in Washington later in the day, according to Reuters.
“In line with standard I.M.F. procedures, John Lipsky, first deputy managing director, is acting managing director while the M.D. is not in D.C.,” Mr. Murray said in a statement. “Mr. Lipsky will chair the informal Board session today.”
Mr. Strauss-Kahn, 62, was awaiting arraignment on Sunday afternoon in Manhattan. The New York Police Department formally arrested him at 2:15 that morning “on charges of criminal sexual act, attempted rape, and an unlawful imprisonment in connection with a sexual assault on a 32-year-old chambermaid in the luxury suite of a Midtown Manhattan hotel yesterday” about 1 p.m., Deputy Commissioner Paul J. Browne, the department’s chief spokesman, said.
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Strauss-Kahn lawyer famed for Michael Jackson, rapper
5/15/2011
NEW YORK, May 15 (Reuters) - Few criminal lawyers know their way around the New York legal system better than Benjamin Brafman, famed for helping celebrities in serious trouble and chosen by Dominique Strauss-Kahn to defend him on charges he attempted to rape a New York hotel maid.
Brafman is known for either winning cases at trial or negotiating deals.
He represented pop king Michael Jackson in a child molestation case in 2004 before stepping aside, and New York Giants football star Plaxico Burress for carrying a gun into a nightclub that went off when it slipped down his pants. And he won a not guilty verdict for rapper “P.Diddy” Sean Combs, on illegal weapons and bribery charges in a nightclub brawl and shooting that was witnessed by over 100 people.
“Most people who come to me are in really, really desperate situations,” Brafman, 62, said in a recent interview with a legal education group.
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