Statements That Were Materially False
Readers suggested a topic on the latest mortgage related lawsuit. “Uncle Sam, Amalgamated versus Megabank, Inc? What next: Bankers in orange jump suits? Let’s hope this is the beginning of a movement to break up the world’s outlaw international investment banks into non-systemically risky, small-enough-to-regulate pieces.”
A reply, “I believe I said quite some time ago that government action against the banks would come but the process was extremely complicated and it would take a while for it all to get everything put together and announced. I doubt this is the end of it.”
One added, “Finally! Let’s hope they do not simply settle. I want to see someone actually pay for what they did.”
And last, “So, if this whole thing were a book or a movie, we’re finally getting to the good part? (I sure hope so!)”
The Associated Press. “The government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed. Among those targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. Large European banks including The Royal Bank of Scotland, Barclays Bank and Credit Suisse were also sued.”
“In a statement Friday, Bank of America rejected the claims in the government’s lawsuits. Fannie and Freddie invested heavily in the mortgage-backed securities even after their regulator said they didn’t have the needed risk-management capabilities, the bank said. ‘Despite this, (Fannie and Freddie) are now seeking to hold other market participants responsible for their losses,’ it said.”
“Also sued Friday were are Ally Financial Inc., formerly known GMAC LLC, Deutsche Bank AG, First Horizon National Corp., General Electric Co., HSBC North America Holdings Inc., Morgan Stanley, Nomura Holding America Inc., and Societe Generale. Ally Financial said in a statement said the government’s ‘claims are meritless, and the company intends to defend its position aggressively.’ A spokeswoman for First Horizon said the bank intends to ‘vigorously defend’ itself.”
This Is Money. “Taxpayer-owned Royal Bank of Scotland yesterday emerged as one of the main targets of a multi-billion pound legal case brought by the authorities in the United States. If successful, the claim would be a savage blow to RBS’s finances and shatter any hopes of British taxpayers making back the cash they invested in bailing out the bank for years to come.”
“The 17 banks, which include most of America and Europe’s leading financial institutions are alleged to have a sold a total of more than $200 billion (£123billion) of mortgages to America’s state-sponsored mortgage companies Freddie Mac and Fannie Mae at the height of the credit boom. RBS sold £18.5billion of the mortgages, second in scale only to JP Morgan Chase, which sold £20.3billion.”
“The amount of damages being sought is unclear, but in an identical case, the FHFA is seeking £555million in damages from Swiss bank UBS after it sold £2.8billion of mortgage securities. If that rate of damages was reflected in the new cases, RBS would be facing a claim for £3.7billion, Barclays just under £616million and HSBC £770million. The total being sought by the FHFA would be about £24.7billion.”
“All 17 legal suits make the same basic claim that the sales documents used to sell the mortgage investments contained statements that were ‘materially false’ and hid important information about the quality of the mortgages. In close detail over hundreds of pages, the documents allege the information about the loan to value of mortgages, the ability of borrowers to repay and the numbers who were home-buyers rather than investors was inaccurate.”
The Independent. “The FHFA was given three years from September 2008, when Fannie Mae and Freddie Mac were nationalised, to bring certain claims based on alleged past wrongdoing. The lawsuits were filed late yesterday in courts in New York and Connecticut, and the banks are likely to fight them vigorously. Deutsche Bank, one of the first to react, said: ‘Fannie Mae and Freddie Mac are the epitome of a sophisticated investor, having issued trillions of dollars of mortgage-backed securities and purchased hundreds of billions of dollars more.’”
The Times. “Thirteen senior figures at Royal Bank of Scotland, HSBC and Barclays have been named in litigation brought by the US accusing the banks of mis-selling billions of dollars of mortgage-backed securities. Those named in the lawsuit were five senior bankers from HSBC, five from RBS and three from Barclays. They include Neal Leonard, chairman of HSBC’s mortgage securities subsidiary HIS, and Todd White. Both joined from Lehman Brothers in 2004.”
“At Barclays, Michael Wade, the former head of its mortgage subsidiary SABR, who left for Credit Suisse in April last year and quit the Swiss bank a year later, was named. So, too, were John Carroll, a managing director at Barclays, and Paul Menefee, SABR’s chief accounting officer, both of whom joined from Morgan Stanley in 2003.”
“The five RBS bankers named included Joe Walsh, its former global co-head of credit markets in the Americas, who has since left to join Fortress Investment, a private equity company.”
“His departure left John C Anderson, also named in the suit, in sole charge. Other defendants include Carol Mathis, a former partner at PwC who joined RBS in 2000 as chief financial officer of capital markets; James Esposito, a managing director of capital markets and general counsel of acceptance and financial issue; and Bob McGinnis, also a managing director and the head of asset-backed finance and trading of capital markets.”
“RBS said it would defend itself vigorously against the allegations, saying that it had ’substantial and credible legal and factual defences to these claims.’”
The Daily Caller. “In the wake of the real estate meltdown, Hollywood has created a new bad guy: cold-hearted bankers bent on foreclosure. The Tom Hanks, Julia Roberts flop ‘Larry Crowne’ stars Hanks as a Los Angeles man facing foreclosure after being laid off from his sales job. Larry served in the Navy for 20 years and presumably has a pension, but that’s no help with his mortgage upside down.”
‘In ‘Warrior,’ opening September 9, a high school teacher and his wife work three jobs between them but still face foreclosure after pulling money out to pay medical bills for their stricken daughter.”
“Even the otherwise compelling ‘Machine Gun Preacher’ (opening November 18) portrays a loan officer callously refusing to give a preacher another second mortgage, money intended to support an orphanage in the Sudan.”
“The movie trend reflects America’s anger at banks, and also some of the illogic. The bank scene in ‘Warrior,’ an otherwise excellent but violent Rocky-esque film about Mixed Martial Arts, is particularly confusing. Brendan Conlon (Joel Edgerton) argues with the bank about his county assessment, although banks have no control over county assessments nor do assessments change the terms of the mortgage. One wonders if the screenwriter has any knowledge of mortgages at all or if the foreclosure threat was just a convenient plot device.”
“The bottom line? Brendan has taken all the value out of his house and now expects the bank to bail him out. Good thing he knows how to throw a punch in the Ultimate Fighting Championship, which offers big prize money.”
I believe this action against the banks is nothing more than kabuki theater so the government can say they’re “doing something.” Sure, they’ll recover about 50 billion, I’m guessing, which will of course be a small fraction of what was stolen.
Unless it’s different this time, you are absolutely right. This pretense to bring perpetrators of high-level financial crimes to justice in the aftermath of a speculative mania is covered in a chapter of John Kenneth Galbraith’s book, A Short History of Financial Euphoria.
As he points out so clearly, the reason for that is that it would take some serious psychological surgery for the sheeple to admit that they were part of the problem. (They never are. It’s always someone else’s fault.)
The banks may have pushed the pills but it was the sheeple that signed on the dotted line and popped them.
But people to a great extent assume that the big companies like banks would never be that stupid to purposely derail the system that keeps them alive. The banks are like a flu virus that kill off the host and ultimately the flu dies off once the host is dead. When I was trying to convince my wife of the bubble in 2005, she always said, “but these bankers are highly educated. Are you saying they’re that dumb!”
‘The FHFA was given three years from September 2008, when Fannie Mae and Freddie Mac were nationalised, to bring certain claims based on alleged past wrongdoing’
They waited till the last minute. I’d guess there would have been an uproar if they had allowed the time limit to pass without some sort of action.
Or the last desperate struggles of a dying government? If this were a snake it’s head is the Banking cartel and the viper pit is Wall St..
I honestly can’t see anything the Executive Branch can do in a proactive way to directly create private sector jobs so what’s left but to attack while it still has some power left. Let be clear here, I don’t think these legal actions sprouted from the mind of Obama but from the legions of federal bureaucrats that are circling the wagons for the last stand. Once the right wing takes over the rest of congress and the White House in 2012 they will be replaced with more compliant droids. Maybe the FED still has some influence but with Europe’s financial markets in turmoil plus extreme push back from the controlling branch of government (the House GOP) I don’t think the answers will come from Bernanke.
Many here think it’s all for show, a political ploy to shift attention away from the over all economy. They might be right too. If these law suits don’t charge individuals with criminal acts and end up just handing out fines then the corporations will just treat this as an accounting entry. You put some heads on pikes lining Wall St. and maybe the trajectory of our nation will change.
Zoom out beyond the Bank law suit and I think the same thing might be happening with the AT&T anti-trust action, the Boing plant, Gibson Guitar ect..
“Or the last desperate struggles of a dying government? If this were a snake it’s head is the Banking cartel and the viper pit is Wall St.”
Andrew Jackson proved long ago that the U.S.A. could survive the elimination of a failed banking system. I see no reason to assume history could not repeat itself in this regard.
How many more months till the Presidential election?
Seems to be timed for maximum effect IMHO.
I’m a little confused here. If we haven’t resolved the too-big to-fail issue, what’s gonna happen? Bank of America gets a judgment from the GSE receiver, that then the US govt steps up to pay to save BOA?
Some individuals were named. If there were all these misstatements, wasn’t there some fraud involved? Isn’t that a crime, and do prosecutors now decide what laws to enforce and which to skip over?
And the inevitable spin; I heard an NPR guys say on Friday ‘this may make us feel better’ then something about how it might hurt the economy. In the narrative of the MSM, we’ve got to have someone to blame. Cuz then all those foolish, greedy borrowers can become victims. I suppose we then pardon the bankers in the name of a sound economy, and it’s a wrap, Hollywood style.
Anyway:
On Feb 23, 2005 ‘The regulator, the Office of Federal Housing Enterprise Oversight (OFHEO), had…a release on its web site proposing new regulations requiring Fannie and Freddie Mac to report mortgage fraud. ‘This rule will ensure that Fannie Mae and Freddie Mac do their part to help combat mortgage fraud,’ said Armando Falcon, Jr., OFHEO Director. ‘The Enterprises will now have a clear obligation to report fraud and help prevent a repeat of cases like the First Beneficial matter,’ Falcon said.’
‘First Beneficial had sold mortgages to Fannie, and bought them back when it was discovered the homes were problematic. First Beneficial then sold them to Ginnie Mae, a government agency. ‘
On January 10, 2005. “Dominion Bond Rating Service issued a warning about mortgage companies in the coming real estate slowdown. Realty Times reports “mortgages underwritten (with) minimal documentation sometimes account for as much as 50 percent of mortgage pools” in the subprime arena.”
On March 30, 2005. “Foreclosure filings have exploded in the Denver metro area and county officials are pretty clear as to who is to blame. ‘Lenders started giving money to people, and it’s gotten out of hand,’ said Jeannie Reeser, public trustee of Adams County. ‘I am talking to people who have jobs, but their income doesn’t come anywhere close to matching their financing.’
‘One mortgage lender says borrowers should be wiser. “Everybody has to have what they want right now, no waiting, no saving up,” he said. “Credit is so loose today that I can buy the groceries I need on a credit card, eat the food tonight, discard the food by tomorrow at noon and finance my debt on a 30-year, amortized loan. How stupid is that? But people do it all the time - and then they wonder why they’re in foreclosure.’
On March 30, 2005, “There is an calculation done by Goldman Sachs economist Jan Hatzius called mortgage equity withdrawal, or MEW. MEW represents ‘the flow of new borrowing secured on existing homes..Ten years ago, MEW was $74 billion. Last year, it bulged to $640 billion.” The piece titled “Formula puts price on greed’, challenges Alan Greenspans assertion that a bubble in homes is unlikely due to a lack of liquidity.’
March 17, 2005. “Smartmoney.com reports “Fannie Mae shares sank to a new low, losing 4%, after The Wall Street Journal reported that regulators are probing instances of employees falsifying signatures and accounting records.’
‘Readers of this blog will remember I reported on these irregularities on March 9th. See:Agreement Gives Insight Into Fannie Mae Scandal. ‘The implementation of controls surrounding accounting ledger journal entries,including policies that prohibit the falsification of signatures..adoption of internal controls that limit the ability of personnel to overwrite database records.’
‘And on the 15th: ‘As it became known last week, Fannie employees have been ‘falsifying signatures and altering information in databases’ and were ‘not isolated incidents.’
March 9, 2005. “For some reason the full text of the new supplemental agreement between Fannie Mae and her regulator OFHEO has been unavailble. But the PDF summary offers a glimpse of how really messy things have been inside the mortgage giant.’
“The implementation of controls surrounding accounting ledger journal entries,including policies that prohibit the falsification of signatures..address deficiencies in the portfolio accounting systems, such that the systems are able to properly calculate amortization and properly account for certain assets.(!)..The adoption of internal controls that limit the ability of personnel to overwrite database records.”(!!)
‘It is obvious these things were going on. I understand the OFHEO had to demand that FNMs board not do further business with former boss Frankiln Raines. This is looking a lot bigger than Enron.’
“…‘this may make us feel better’ then something about how it might hurt the economy.”
Too Big to Jail
None of this will make a difference. If Obama is thrown out of office, then all the prosecutors who brought this case will be thrown out and replaced by Republican appointees who will simply fail to move these cases forward.
Jamie and Lloyd have nothing to fear.
Angelo may swim with the fishies, but only via BoA, who was forced to buy his trash.
“If Obama is thrown out of office, then all the prosecutors who brought this case will be thrown out and replaced by Republican appointees who will simply fail to move these cases forward.”
If I become convinced between now and November 2012 that these cases are real, that would push me towards voting for Obama again, just to make sure justice can run its course. I place less trust in Republicans, with their deep-pocketed Wall Street donors hidden in the shadows, to get the job done.
‘None of this will make a difference…If Obama is thrown out of office’
If he loses, he’s got no one but himself to blame. Imagine how popular he’d be if there had been convictions of CEOs, or lines of Wall Streeter executives walking off shackled in orange jumpsuits?
What really got him was the economy. All this boo-hoo about foreclosures wasted a ton of money and time. Plus he listened to, and acted on advice from the Goldman guys. Who does he have to blame for that?
“Plus he listened to, and acted on advice from the Goldman guys.”
High level Chinese officials did the same. I’m guessing many among the ranks of the high and mighty now rue the day they decided to accept and act on Goldman’s advice.
ASIA BUSINESS
SEPTEMBER 1, 2011
Fitch Reiterates Warning on China’s Banking System
(Residential buildings in China’s Inner Mongolia region under construction in May.)
SHANGHAI—Fitch Ratings Inc. again warned of significant risks to China’s banking system over the next few years, saying the property market poses the biggest threat.
A Fitch analyst said at a seminar the ratings firm was more concerned about the property sector than local government financing vehicles, even as the latter have taken on substantial amounts of debt.
“We believe that the LGFV issue is much easier to deal with than property for two reasons,” said Charlene Chu, head of China financial institutions at Fitch.
“The government has done a lot of work to identify these loans,” she said. “Property on the other hand is very difficult to deal with because it’s penetrating every aspect of the economy and you can’t isolate the problem and throw money at it in the way you can for the local government issue.”
China’s easy monetary policy in 2009 and 2010 fueled a rise in inflation and a property bubble. Credit risk has risen as a result of heavy lending to local governments and property firms.
Ms. Chu told the seminar Wednesday that compared to banks’ exposure to local government financing vehicles, the property market is “more intractable and much more complicated to deal with.”
Real estate has been the foundation of China’s supercharged growth over the past two decades, and the market’s health is crucial to the construction, steel and cement sectors. Local municipalities and provinces receive funds from land sales and rely on high land prices to fund infrastructure projects.
Central bank data showed that a quarter of new yuan loans issued last year were related to the property sector, including mortgages. Analysts believe the share was much bigger in 2009, the first year of China’s two-year campaign of heavy spending to cushion the impact of the global financial crisis.
While the central government has launched a series of measures to cool property prices, including higher mortgage rates and curbs on purchases of second homes, housing prices remain high in big cities including Shanghai, Beijing and Shenzhen.
“Clearly the government has done a lot to cool down the market and to some extent it has been successful… [But] the jury is still out,” said Ms. Chu.
…
Agreed!
The first thing I would have done before signing the TARP papers would have been to get written assurances from the banks that NO bonuses would be issued to any employees as a condition of receiving the money. The second thing is I would have required the banks stop ALL political campaign contributions since these would have come from bailout money anyway.
Obama took a gigantic black eye on this and the specter of outrageous banking fees and obscene bonuses set the tone for the entire administration. Then there is the unpopular health care law, and again he folded under pressure and dropped the only think that could have made it work which is single payer. Instead folks like my wife and I face the possibility that we will be required to pay a large additional tax because we cannot afford whatever the health insurance industry decides to charge us in 2014.
Frankly I believe the Obama Administration was the wrong Administration at the wrong time and clearly there is not a lot of action from the top when it comes to the economy. More of a deer in the headlights kind of stupidity.
Now on the other side we have a lineup of far right wing religious nutters, and yes they will do what they can to further weaken consumer rights.
I may have to incorporate MYSELF! - Sorry I have rights I AM a Corporation!
“far right wing religious nutters,”
You know, I just learned the other day that Florida’s Gov., Rick Scott, lived in public housing as a kid.
Some guy, huh?
The second thing is I would have required the banks stop ALL political campaign contributions
———————————
A politician to get rid of one of their sources of money? hahahahahahahahaha
“The second thing is I would have required the banks stop ALL political campaign contributions.”
It would been blocked by the Supreme Court. They don’t want any spending limits, much less on corporations.
If I become convinced between now and November 2012 that these cases are real, that would push me towards voting for Obama again, just to make sure justice can run its course. I place less trust in Republicans, with their deep-pocketed Wall Street donors hidden in the shadows, to get the job done.
Goldman Sachs - #2 money contributor to obama.
You were saying…
——————–
Barack Obama (D)
Top Contributors
www dot opensecrets.org/pres08/contrib.php?cycle=2008&cid=n00009638
They contributed him because they knew he was going to win, not because they wanted him to win.
“They contributed him because they knew he was going to win, not because they wanted him to win.”
Not necessarily. Lloyd “The Devil Incarnate” Blankfein has always contributed to Democratic candidates.
Big campaign contributions = big political capture
I’ve gotta agree with oxy on this one. I’ve spent a fair amount of time on opensecrets and the correlation is really strong (at least in the past 2 elections) between who was thought to win and how the contributions played out, pretty much independent of industry (ie - media, finance, etc).
Kerry/Bush was 50/50 most of the time and the contributions reflect this. Obama was overwhelmingly thought to win and owned the contribution space.
“…do prosecutors now decide what laws to enforce and which to skip over?”
That would seem to be a travesty of justice.
“…do prosecutors now decide what laws to enforce and which to skip over?”
Yes, it’s all up for grabs. The “law” is capriciously applied. Illegal immigration is perhaps one of the biggest examples. I knew it was all over when that phenomenon reached massive proportions. The other day I was reading about the billions (yes, billions! $4.2 billion to be exact) illegals have pocketed in tax credits. Break some laws, reap the rewards from other laws.
People are deciding, at all levels, which laws they do and don’t want to follow. Nation of Laws, my patootie.
I don’t expect squat from Eric Holder’s Justice (giggle) defartment. The administration decides NOT to enforce immigration law, but yet sues the peewadden out of any state or entity that DARES to do so, with the ACLU and various Latin American countries filing amicus briefs. That tells you all you need to know about the “law” in the US.
‘”Ten years ago, MEW was $74 billion. Last year, it bulged to $640 billion.” The piece titled “Formula puts price on greed’, challenges Alan Greenspans assertion that a bubble in homes is unlikely due to a lack of liquidity.’
In retrospect, there was plenty of liquidity in that flow of MEW out of American households’ lifetime savings.
‘And on the 15th: ‘As it became known last week, Fannie employees have been ‘falsifying signatures and altering information in databases’ and were ‘not isolated incidents.’
Are any of these folks under the scope of the FHFA investigation, or is it limited to private banks?
‘Are any of these folks under the scope of the FHFA investigation’
Funny things come out of these situations. Maybe a lawyer will bring up the Justice Departments criminal investigation of Fannie in the fall of 2004 that disappeared.
In 2005, Fannie WAS a private bank. People seem to forget that.
‘This is looking a lot bigger than Enron.’
Good call! Somebody did see it coming, after all!!!
Yea, I can’t wait until the government sues itself which is what it essentially doing in this crony capitalism state. I can’t wait until they bail out the banks they sent into Chapter 11 through these lawsuits.
“So, if this whole thing were a book or a movie, we’re finally getting to the good part? (I sure hope so!)”
How about a new Hollywood production, entitled Inside Job: The Sequel?
“In close detail over hundreds of pages, the documents allege the information about the loan to value of mortgages, the ability of borrowers to repay and the numbers who were home-buyers rather than investors was inaccurate.”
I’m not an attorney, but if these allegations are true, isn’t this a clear-cut case of financial fraud? Given the amounts of money involved, the crime appears to meet the description of felony, and it was perpetrated against a U.S. federal government agency, no less.
What am I missing here?
“I’m a little confused here. If we haven’t resolved the too-big to-fail issue, what’s gonna happen? Bank of America gets a judgment from the GSE receiver, that then the US govt steps up to pay to save BOA?”
How about this. A rapid fire bankruptcy a la GM following a judgement. The shareholders (and pensions and bonuses) are wiped out, and the big banks are owned by a claimant committee with profits going to those harmed. So instead of the banks owning the taxpayers, the taxpayers own the banks.
I would guess this is the first step towards an antitrust breakup of the biggest banks. If done ruthlessly I would be all for it.
‘Fannie Mae and Freddie Mac are the epitome of a sophisticated investor, having issued trillions of dollars of mortgage-backed securities and purchased hundreds of billions of dollars more.’
I suspect even the most sophisticated investors failed to anticipate the now-apparent egregious deceptions perpetrated by formerly reputable U.S. financial institutions. Many were simply blindsided.
That said, I believe the Romans had it right: Caveat emptor.
That said, I believe the Romans had it right: Caveat emptor.
Unless forced to do something by your emperor…
————————
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy
WSJ
Dec 28, 2009
By JAMES R. HAGERTY and JESSICA HOLZER
The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.
“emptor” = buyer in Latin. But I guess there is no rule of law that says the emperor cannot be the buyer of whatever he chooses?
“The bottom line? Brendan has taken all the value out of his house and now expects the bank to bail him out. Good thing he knows how to throw a punch in the Ultimate Fighting Championship, which offers big prize money.”
Sounds like Hollywood has discovered what HBBers have already realized for several years running: There is great entertainment value in FB stories.
Had standing law taken it’s course back in 2006 onward ,instead of Government bailouts and interference ,these Banking entities and middlemen for mortgage backed securities would
of been sued by the losers that were mislead .
Someone was saying the other day that maybe 50% of the loans have title problems and some of the State recording offices are suing for how they were deprived of recording fees by the loans .
Someone else said the other day that some of these issues involve
errors and ommission insurance and who has to pay . Also the way
this tranfer of title situation might play out is that TITLE Companies
might refuse to give Title insurance in the future because of the potential for actions .
So, its not only the issue of the various frauds that took place in the marketing of these high leveraged securities ,but its the question of
a possible mistake in the tranfer of title or the note .
Does it let borrowers off the hook that committed fraud ? Why should it ? The problem is that there was so many cases of fraud with these loans that it’s a joke .Did the loan officers commit the fraud or was it a joint effort with the borrower ?
I mean these borrowers that were in a frenzy and were willing to engage in fraud on their loan application were part of the problem
as well as the real estate people and the whole chain .
For me the question is ,”Would the investors of bought the securities if they had been rated the junk that they were ? Would Investors of
bought the securities had they known a high percentage of them were based on faulty appraisals/loans based on a false demand that raised prices artifically ?”
Really ,given how absurd the lending was ,one would have to say that
crimes were committed .
Mozillo started screaming that the Governemnt had to do something .
No investigation ,just do something ?
The system was built on high leverage games with faulty insurance
backing it also . The reservves weren’t proper either . The whole system was build on keeping the Ponzi-scheme going and passing the buck to the unsuspecting .
If the value of real estate is based on a qualified willing and able borrower in a arms length transaction establishing market value and demand ,than the entire market price was false and was raised
artifically by fraud ,loan fraud .
So the losers are the retirement funds and what have you that bought misrepresented securities that in large poart were the byproduct of a crime spree . If you raise value by fraud ,its a fraud .
This lending crime spree was so big and so many other casino bets were based on this house of cards that it is to big to prosecute to some extent . Everybody was harmed by it in the final analysis because it was so invasive into all that was financial .
What i hate is the cover up and the attempt to deny just what happened and the attempt to make innocent parties pay . All this wasted money trying to keep a fake market from crashing . All this protection of the Culprits and many attempts to transfer the loss and transfer the blame .This isn’t normal Justice or remedy under the law .
Why is everyone starting to sue now ,rather than 5 years ago ? Why has this been delayed for so long .
All I know is that this ongoing talk about real estate recovery was
absurd . You don’t recover from a fake price market . It would take years to go up to those fake prices and now with all the forclosures
it will take even longer .
” You don’t recover from a fake price market . It would take years to go up to those fake prices and now with all the forclosures it will take even longer .”
Seems like the thing to do would be go back to the market price before all the mortgage backed securities fraud and Liar Loans and start from there. I guess that would be mid to late 90`s home prices.
Yea that’s my thought too. Add 2-3%/yr for inflation and you get to a reasonable price.
Watch for a conspiratorial settlement approved by the judge–this way no one else can go after the banksters. “Consent Decrees” and “Stipulated Judgments” are a common way to do things that the parties otherwise couldn’t get away with, such as the transfer of wealth to environmental causes, or to particular favored communities, or, in this case, from you to the banks.
Does anyone know the answers to the following: (USA data only)
1. What was the value of all mortgages created yearly from 2003 to 2008 ?
2. What was the value created yearly of all those mortgages that were insured by Fannie and Freddie?
3. What was the value created yearly of all those mortgages that were not insured and sold to third parties?
4. What was the value created yearly of all of those mortgages retained by the banks?
This would let us know how big this problem really is.
Frankly, I think the stock market is also in a bubble. I think we may find some really interesting info there too - soon.
“Frankly, I think the stock market is also in a bubble. I think we may find some really interesting info there too - soon.”
I couldn’t agree more, my man. Couldn’t happen soon enuf for me.
Yawn…
Sept. 5, 2011, 11:19 a.m. EDT
UBS sees drop ahead for global equities
By Polya Lesova
LONDON (MarketWatch) — Analysts at UBS initiated a tactical underweight on global equities, writing in a research report Monday that assets perceived as risky have come under pressure from weak economic data and a re-escalation of the euro-zone sovereign-debt crisis. “Given the deterioration in economic and policy fundamentals, we find it difficult to see why equity markets should trade at more elevated levels than their summer lows,” UBS analysts, including Larry Hatheway, wrote in a note to clients.
“Given the deterioration in economic and policy fundamentals, we find it difficult to see why equity markets should trade at more elevated levels that their summer lows.”
IOW, sell.