Bits Bucket for October 26, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Tuesday, October 25, 2011
GOVERNMENT GOON SQUAD MOVES IN ON OCCUPY OAKLAND
Dozens Arrested as Police Close Occupy Oakland Encampment at Frank Ogawa Plaza - KRON 4 News
Posted by Al M at 1:05 PM
Some enlightening reader comments on the WSJ article Atlanta Police Arrest Protesters:
“From the interviews and protest signs I’ve seen most of them seem to be socialists, communists, or even anarchists. If you want to save capitalism join the Tea Party.”
“Too much violence connected with this “protest”. Why are things sponsored by the Democrats violent?”
“OWS is just like the TEA party … All you have to do is add rats, garbage, drugs, toilet issues, vandals etc to the TEA party and you would hardly be able to tell the two groups apart.”
“The Marxist behind it (Van Jones George Soros & Co.) are looking to pick a fight. The OWS kids are pawns.”
What a bunch of mentally challenged (I mean paid) commentators. When 70% of registered voters in New York agree with the OWS, it makes one wonder how 90% of the comments on major online news articles can be so negative about them.
-Cops commit violence against innocent protesters, comments complain about “violent Democrats”.
-Protesters are mainly middle-class people of all ages and races, comments complain about “dirty hippies”.
-Protesters haven’t said a word about the TEA party, comments complain about protesters supposedly disagreeing with the TEA party.
It is very hard for me to believe that “most people” are motivated enough to make online comments, yet not motivated enough to be aware that their comments do not reflect reality in any way.
The wealthier serfs, the kulaks, have been well programmed by the lords of the manor…
But the notion of a wealthier serf is false. They only think they’re wealthy. They’ve been convinced by the kings personal town crier that they’re “close” to being rich….. if only the serf works a little harder……. he’ll be a king too. The serf has been bamboozled.
Now you see how news is manufactured.
Every. Day.
Hmmm, I thought they were reader comments. That’s not news. Right or wrong it’s opinion.
Comment by alpha-sloth
2011-10-25 06:13:30
wikipedia
“Red herring: a speaker attempts to distract an audience by deviating from the topic at hand by introducing a separate argument which the speaker believes will be easier to speak to.”
Obama: “Occupy Wall Street” reflects “broad-based frustration”
October 6, 2011 12:17 PM
President Obama on Thursday called the “Occupy Wall Street” protests a reflection of a “broad-based frustration about how our financial system works” and pledged to continue fighting to protect American consumers.
http://www.cbsnews.com/8301-503544_162-20116707-503544.html - 122k -
———————————————————————————-
Fundraising, Obama Relies Even More on Wall Street
By: Eamon Javers
CNBC Washington, DC Correspondent
Published: Friday, 22 Jul 2011 | 9:49 AM ET
Does Wall street have a problem with President Barack Obama?
Not so you’d notice where it counts—in his reelection effort.
Plenty of high visibility figures have complained about Obama on everything from Wall Street reform to potential tax increases to his anti-fat cat rhetoric.
But a new study by the Center for Responsive politics out Friday morning shows that Obama is relying more on Wall Street to fund his re-election this year than he did in 2008.
A copy of the study was obtained in advance by CNBC.
In fact, the Center found that one-third of the money Obama’s elite fund-raising corps has raised on behalf of his re-election has come from the financial sector.
“Individuals who work in the finance, insurance and real estate sector are responsible for raising at least $11.3 million for Obama’s campaign and the Democratic National Committee,” the Center reported.
All of Obama’s bundlers have raised a minimum of $34.95 million.
Obama and the DNC combined are on pace to blow away the amounts Obama raised from Wall Street donors in 2008. At the current pace, Obama and the DNC will far surpass his 2008 Wall Street fund-raising numbers both in raw dollar amounts and as a percentage of what he raises overall.
The comparison with 2008 is not exactly apples to apples, however, because the Obama campaign disclosed combined figures for Obama and the DNC figure this year, while the ‘08 numbers were just for Obama, because he didn’t control the DNC at that time. Now he does.
The Center also cautioned that an exact dollar amount for how much cash these individuals raised ahead of the 2008 election or during the past few months is not known because the Obama campaign provided only broad ranges of how much money each bundler collected.
A precise figure, however, is known for how much the Obama campaign and the DNC raised during the second quarter of the year: $86 million. Thus, the Center concludes that at least $1 out of every $8 that the DNC and Obama campaign raised came thanks to a bundler connected to the finance, insurance and real estate industry.
What’s more, the Center has identified 80 bundlers—out of 244 whose names were released by the Obama campaign last week—who are part of the financial sector. Forty-four specifically work for the securities and investment industry.
Even when Obama is receiving criticism from some quarters on Wall Street, he’s adding new Wall Street bundlers who did not work for him in 2008. Four of them are: former Goldman Sachs CEO Jon Corzine, Evercore Partners executive Charles Myers, Greenstreet Real Estate Partners CEO Steven Green and Azita Raji, a former investment banker for JPMorgan.
http://www.cnbc.com/id/43854224/For_Fundraising_Obama_Relies_Even_More_on_Wall_Street - 136k
As the squad posted here yesterday, OWS is not for corporate democrats to co-opt and exploit.
Kucinich/Paul 2012!
Ronald Reagan dyed his hair!
Moreover, at age 51 he quit being a Democrapt.
“Ronald Reagan dyed his hair!”
Ronald “Mommy?” Reagan was a true believer in the make-believe.
“How can a 70 year old man have a full head of hair with no gray?
The answer comes from Gerald Ford’s observation that “Ronnie doesn’t dye his hair, he’s just prematurely orange,” referring to the fact that “Orange on a middle-aged man means he’s been playing unsupervised among the Clairol”
Doctorzebra
(Am I doing a good job with the red herrings, jeff? I bow to your expertise.)
“Ronald Reagan always denied he hued his hair. But author Kitty Kelley scooped the world and revealed in her unauthorized biography about Nancy Reagan more than 10 years ago that the president’s gray roots were dyed regularly — in secret, of course, and by Nancy’s hairdresser, Julius — since 1968.
When Reagan’s head was shaved for surgery after he left the White House, his hair grew back gray. Still, his handlers denied that he previously had colored it.”
Seattle Times
“(Am I doing a good job with the red herrings, jeff? I bow to your expertise.)”
I just want a house I can afford. So I lean towards the corrupt guy who says…
“As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit the bottom,”
As opposed to the corrupt guys who come up with…..
This will focus on affordability and foreclosure prevention for responsible homeowners, who, through no fault of their own find themselves in a situation of negative equity,” said FHA Commissioner David Stevens.
“I just want a house I can afford.”
Tell it to your bankster friends. They’re who’s holding back the inventory from the market.
“Tell it to your bankster friends. They’re who’s holding back the inventory from the market.”
How do I get in touch with David Stevens?
It gives me great pleasure to congratulate David Stevens on his recent appointment from President Obama to head up the FHA Administration. (Washington Post Article)
Even though its not official until the Senate approves the final vote, I am very excited because of Two reasons.
1st of all if elected, Mr. Stevens will be the only the only FHA commissioner to have a strong background in Mortgages and Real Estate.
2nd of all Mr. Stevens was the president of my company (Prosperity Mortgage a joint venture of Wells Fargo and Long & Foster Realty), he was also a former president of Freddie Mac and currently he is the president of Long & Foster Realty.
So not only does he have the background and mindset from a Mortgage standpoint, he has the knowledge and mindset from a Real Estate agent standpoint! How awesome is this?
David Stevens is also a current Activerain member, although he has erased most of his previous posts because he transferred them over to his outside blog where he focuses most of his content now.
I have personally met with David Stevens when he came down to my office and witnessed his great presentation skills and knowledge. He is truly an extremely smart individual who knows his stuff and has the vision of making our marketplace a better place for all.
So here is hoping you get the job David and Good Luck & Best Success to you my friend!
http://activerain.com/blogsview/999862/congratulations-david-stevens-on-being-appointed-as-the-new-fha-commissioner-for-hud- - 56k -
With more than two decades in the financial services industry, Stevens oversaw every aspect of home financing, from creating mortgages to selling them on the secondary market. Those experiences were helpful to Stevens as head of the Federal Housing Administration (FHA). Stevens was the only FHA commissioner in recent years with a strong background in home mortgages.
The FHA position is one of the most closely-watched and challenging in President Obama’s administration, thanks to the 2008-2009 economic crisis and the subprime mortgage meltdown. As former head of the FHA, Stevens was responsible for ensuring the agency makes good bets on the mortgages it guaranteed. The FHA assumed the risk for almost a third of the new mortgages drafted in 2009, and critics worry that the government agency has not adequately screened applicants.
Stevens left the FHA in April 2011 to return to the private sector and head the Mortgage Bankers Assocation. He was replaced by acting head Robert C. Ryan.
http://www.whorunsgov.com/Profiles/David_H._Stevens - 62k -
Or this:
‘With all the divisiveness in Washington these days, it might seem unusual for President Barack Obama’s nominations to coast through the Senate. But Thomas Curry is one of those people whose nominations should be as close to a slam dunk as possible.’
‘Curry, a former Massachusetts banking commissioner, hasn’t necessarily been whisked through the Senate. Obama in July nominated Curry to run the Office of the Comptroller of the Currency, the unwieldy-sounding agency that oversees national banks. The Senate’s banking committee approved the appointment last month. A Republican on that panel who had raised concerns about Curry told Reuters earlier this month that he wouldn’t oppose Curry’s nomination, and he knew of no other opponents in the Senate.’
‘With the banking committee’s endorsement, his final Senate approval should be coming soon.’
‘That will be a great relief to bankers and housing activists in Massachusetts who have nothing but positive things to say about the guy…They cite a wide range of factors, based on their experience with him as the state’s top banking regulator before he left and joined the Federal Deposit Insurance Corp.’s board in January 2004.’
Read more: http://www.patriotledger.com/business/x366618867/MASS-MARKET-Former-state-bank-commissioner-gets-key-DC-role#ixzz1btemlUnR
“How do I get in touch with David Stevens?”
What does his appointment have to do with the fact that it’s the banksters who are holding back the inventory of houses?
Looked like a good place for a red herring?
‘it’s the banksters who are holding back the inventory of houses’
That’s just not true. Most of the inventory of foreclosures is owned by Fannie Mae, Freddie Mac and HUD/FHA. Not one of these entities is a bank, all are under the control of the government.
“That’s just not true.”
Interesting question: Is it the owners of the mortgages that are holding back the inventory, or the servicers?
Seems like all the horror stories about homeowners being sand-bagged or given the run-around all involve the servicer as the stonewalling party, not F&F. Same with the ‘robo’-signing.
“That’s just not true.”
“Interesting question:”
Where is the question mark?
I had the as-yet-unanswered interesting question:
Is it the owners of the mortgages that are holding back the inventory, or the servicers?
‘all the horror stories’
Yeah, the media is writing the ‘horror stories’ aren’t they? You do know the media is largely owned by a handful of giant corporations, don’t you? I’m sure they are doing this because they are for the ‘little people.’
Look, I was blogging about these banks when the MSM was worshiping them for providing ‘affordability products’ like subprime loans. I agree that to a degree the bankers are the problem:
http://www.youtube.com/watch?v=z1vpEcebYBg&feature=related
But I’m not buying that they are the only problem. The government is also a problem. Powerful lobbies like the realtors and builders are also a problem.
I never said the banksters were the only ones to blame. There’s plenty of blame to go around- FBs, government, media, etc.
But my original point was that it’s not Obama’s newly introduced idea that’s holding back the release of the inventory, and it’s not the robo-signing stuff- unless the banks really can’t produce proof of ownership (which I still suspect may be the case). What’s holding back the inventory is the banks not wanting to realize their losses, and end their servicing agreements. The rest is right-wing bogeymen.
If not, what, specifically, is stopping the banks from throwing out the deadbeats?
F&F are definitely holding back housing inventory.
I’ve been telling you guys for 2 years or more that the disappearing and reappearing houses on Fannie and Freddies REO list is a rule, not an exception.
For instance; The RAL clan checked out a shack in Delaware in Summer of 2008. It hung around on Fannies website until Jan 2009. Haven’t seen it since. Last Monday evening I did my daily review of Fannies inventory and low behold, there it is again. The same house, price reduced 20% and listed as a “new listing”.
This is NOT a exceptional case. I see it all the time in multiple states.
The 3 or 4 times I’ve mentioned this occurring on this blog, a goober will come along and say “maybe it was sold and repo’ed again. The houses have NOT changed hands. Fannie has owned them all along. You have to pay attention to the what they’re doing in order to see it happen.
What’s holding back the inventory is the banks not wanting to realize their losses, and end their servicing agreements.
Ding-ding-ding! We have a winner!
And I suggest a reading of articles by William K. Black, who’s an authority on control fraud. The goal of this kind of fraud is to gain control of a company so you can loot it to enrich yourself.
Per Black, the foot-dragging we’re seeing is a symptom of a massive control fraud at work. The moment you have to recognize that the bank you’re looting is insolvent is the moment that your party is over.
F&F should be the real holders of the “shadow”.
If banks lent the money, bundled them and sold them to WS (but kept the administration fees annually), who in turn sold them several times over (getting fees each time) - then the mortgage went bad - then the “administrator” (bank) foreclosed on them - then the bank claimed on the F&F insurance - then F&F would then be in possession of them. In this case, why would the bank even have to foreclose, couldn’t they just make the claim on F&F who would then have the “right” to that home?
“I just want a house I can afford.”
Those Wichita, KS homes posted yesterday really illustrates the inflation along the coasts.
http://tinyurl.com/4yndnuh
OTOH, you’d better hide that dinosaur bone.
“Those Wichita, KS homes posted yesterday really illustrates the inflation along the coasts.”
Yeah, make like a free-market libertarian and move, if your bankster friends won’t release the inventory where you are now.
“KS homes”
Dorothy’s House & Witch Feet
http://www.flickr.com/photos/xstarsprinklesx/1333755022/ - 176k -
My daughter lived in an apartment less than half a mile from this house. Just bought a house and moved to Goddard.
The area is quickly turning into gangbanger central, like the rest of east Wichita.
Anybody buying a house in Wichta area right now is looking in Andover or Augusta (if you work on the east side of Wichita), or Maize/Goddard/Cheney on the west side.
X-GSfixr
My husband is from Kansas. He hasn’t been back to Wichita since he dad passed in 1992. I’ll share your post with him.
“How can a 70 year old man have a full head of hair with no gray?
i would ask my grandfather but he passed away awhile ago.
He dyed it.
“”…and pledged to continue fighting to protect American consumers.”
how about protecting american citizens mr. president?
the war on savers continues.
Get a rope.
Tie the knot.
“What’s more, the Center has identified 80 bundlers—out of 244 whose names were released by the Obama campaign last week—who are part of the financial sector. Forty-four specifically work for the securities and investment industry.”
Sounds like the Dems are finally bringing a gun to a gun fight. Yes, it’s Machiavellain, but you do what you gotta do.
And of course those particular “contributors” expect nothing in return.
OWS, care to comment?
The Economist
KAL’s cartoon
Oct 22nd 2011 | from the print edition
BIRD’S EYE VIEW of the REPUBLICAN PRESIDENTIAL CANDIDATES
Realtors Are Liars®
realtoRs will steal your popcorn.
My hunch is that the refinancing plan actually works out great for F&F, as the costs are passed on to current MBS holders, not taxpayers. The likelihood the outstanding debt will be repaid goes up if loans are refinanced at lower rates, reducing, not increasing, future potential taxpayer losses on federal mortgage guarantees already in place. By hammering the private supply of loanable funds at its source (savers), F&F’s monopoly position as government-sponsored mortgage securitizer of last resort is strengthened.
OCTOBER 25, 2011, 4:26 P.M. ET
GOP Lawmaker Wants Regulator’s Analysis Of Mortgage-Refinancing Program
By Alan Zibel
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–A Republican lawmaker called Tuesday on a U.S. regulator to disclose its analysis of how a reworked government mortgage-refinancing effort would affect the finances of Fannie Mae (FNMA) and Freddie Mac (FMCC), arguing that it will mean more losses for taxpayers.
The regulator, the Federal Housing Finance Agency, announced the revamped refinancing program earlier in the week, and President Barack Obama touted it in a speech in Las Vegas. It aims to enroll up to 1 million borrowers whose homes have declined in value.
Homeowners will be able to apply regardless of how much home prices have dropped, eliminating an earlier restriction shutting out some severely “under water” borrowers. The program only affects loans owned or guaranteed by Fannie and Freddie, the two mortgage-finance companies that were taken over by the government more than three years ago.
Rep. Randy Neugebauer (R., Texas) criticized the plan in an interview, arguing it would increase the cost of rescuing Fannie and Freddie, which now stands at $141 billion. That’s because big holders of mortgage bonds, including Fannie and Freddie themselves, will take a hit when more borrowers refinance.
“If you’re a borrower, this is a good thing,” Neugebauer said in an interview. “If you’re an investor, this could be problematic.”
…
“If you are an investor, this could be problematic.”
Fannie and Freddie money = Houdini money.
Now you see it, now you don’t. Poof, just like magic it’s gone.
“The program only affects loans owned or guaranteed by Fannie and Freddie…”
Wondering how you’d know if F or F owns or your loan?
http://www.fanniemae.com/loanlookup/
As for guarantees, I’m not sure.
Likely F-or-F if your mortgage is “conforming.”
Don’t they back like 95% of all US mortgages?
This development could put a major wrinkle in Wall Street’s year-end bonus picture.
Officials say still no deal on cutting Greece’s debt, boost crisis fund, Italian commitments
By Associated Press, Published: October 25
BRUSSELS — A grand plan to resolve Europe’s escalating debt crisis was once again in doubt after officials said Tuesday that key parts of the package may not be ready in time for a leaders’ summit on Wednesday.
A meeting of European Union finance ministers, which was to be held just before the summit, was called off. A summit of EU and eurozone leaders planned for Wednesday evening will still be held, but it was unclear whether the heads of state and government would be able to reach a detailed deal.
The euro and stocks on both sides of the Atlantic slid on the news amid fears that Europe would prove unable, after two years, to get a grip on its debt crisis.
The 17 eurozone countries have not reached final agreement on the details of two key elements of the plan — reducing Greece’s massive debts and boosting the firepower of the bailout fund, two European officials said. They spoke on condition of anonymity because the talks were confidential.
…
We already know how the crisis will be resolved. It will be resolved by Greece not paying their debt. Anonymous “international lenders” across the globe will lose their bribing power, and things will change for the better.
What’s behind surging copper
(scroll down page for video)
Andrea Hotter discusses whether spike in copper prices can be attributed to Chinese demand or speculators, and whether there are solid foundations beneath the price.
discusses whether spike in copper prices can be attributed to Chinese demand or speculators
So, it’s always an either / or $it-U-Ation?
(I see!, said the blind man as he picked up his hammer and saw.)
Maybe the Chinese are speculating?
You guys need to get caught up with the Chinese “Cash for copper” trade.
http://tinyurl.com/444ecva
I’ve reached the conclusion that there isn’t a single market for ANYTHING that isn’t being manipulated by one means or another.
As “Joshua” said: “A-strange-game. The-only-winning-move-is-not-to play…..”
There isn’t. This is the true face and motivation of “globalization.”
Speculation so divriced from the reality of supply and demand it makes Alice in Wonderland look perfectly rational.
I would argue that all the “needs” markets are manipulated. For all their talk of Tax Cuts, those with the $$$ are putting it where the customers are.
Refi plan: If homeowners win, someone else loses
Kathleen Pender
Tuesday, October 25, 2011
The government’s new plan to let more underwater homeowners refinance their mortgage is a good deal for homeowners who qualify, but for every dollar they save in monthly payments, someone will lose.
That someone is whoever owns the mortgage being refinanced. Mortgage owners include Fannie Mae and Freddie Mac, the taxpayer-owned entities that own and guarantee home loans; the Federal Reserve, banks, insurance companies, pension funds, endowments and other investors worldwide.
But holders of mortgages that have been refinanced will have less cash flow if they have to reinvest at lower rates.
For private-sector mortgage holders, there’s not much upside in this. They will get back the money they were owed, but since these mortgages were already guaranteed by Fannie or Freddie, there was never a risk that they would not be repaid.
For Fannie and Freddie - which own as well as guarantee mortgages -the equation is different. Their cash flow will be reduced if higher-rate mortgages they own get repaid. But if homeowners who are deeply underwater refinance into a more affordable mortgage, they might be less likely to walk way from their homes. That could reduce the losses Fannie and Freddie suffer on defaulted mortgages.
Ely points out that their cash flows will be reduced almost immediately whereas any benefit from reduced credit losses will be “harder to quantify and spread out over time.”
He adds that the plan will create a “two-tiered mortgage finance system. If you are not underwater or if you are buying a house, you are going to be subject to traditional requirements in terms of credit score, loan-to-value ratios and all the documentation. If you are in deep doo-doo, you will be able to take advantage of this more liberal program.”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/10/24/BU641LLO8F.DTL&type=business - 121k -
“If homeowners win, someone else loses”
Top government policy economists are stilling trying their best to invent the free lunch.
“If homeowners win, someone else loses”
You better believe it. There is a loud mouthed crowd out there saying this is a no cost gig.
My hard and fast rule is that it’s a zero sum game. If someone is gaining, another is losing.
“… it’s a zero sum game.”
When the economic pie shrinks it becomes less than a zero sum game.
Old game: Share the wealth
New game: Bagholder identification
“When the economic pie shrinks it becomes less than a zero sum game.”
No. It’s still a zero sum game. The portions just get smaller.
If the expansion of the economic pie was financed by promises and these promises are broken then the pie will shrink.
One person’s promise of money is another person’s money. Break the promise of money and somebody is out some money. If enough people are out enough money then the economy takes a gigantic hit - it shrinks.
“… someone else loses.”
But, but, but … they PROMISED!
And as if home-debtors are really winners in this? Spare me.
Mark my word…. If this becomes law, they’ll stretch the term to 40 or 50 years in order to completely bleed the morons dry.
Mark my word…. If this becomes law, they’ll stretch the term to 40 or 50 years in order to completely bleed the morons dry.
Already happening. From today’s HBB news roundup and commentary:
“Kennedy Lidonde, who lives in Woodstock, started working with Neighborhood Assistance Corp. of America, or NACA, a nonprofit housing advocacy group, even before he came to the XL Center. Unlike many borrowers seeking help, Lidonde wasn’t behind on his mortgage payments. But he was in danger of missing a payment after he lost his job as a supervisor at a college in Worcester, Mass., and was forced to take a lower-paying job as a car salesman. His wife works as a clerk at the same college where he once did, but it wasn’t enough to make ends meet.”
“‘I thought, ‘How am I going to keep coming up with $2,400 for the mortgage,’ on top of credit card, food and utility bills, Lidonde said. ‘It all started piling up.’”
“Bank of America offered to drop Lidonde’s mortgage rate from 5.89 percent to 3 percent, cutting his monthly payment to $1,600 on his four-bedroom, Cape Cod-style house near a lake. The payment comprises principal, interest, plus escrow for taxes and homeowners insurance. While the monthly payment is lower, the term of the mortgage will stretch from 30 to 40 years, Lidonde said. It’s going to take a little longer, Lidonde said. ‘It’s going to be like starting over, but it’s a relief.’”
So he just signed up for a brand-new 40 yr mortgage - ?
Whew.
Let’s hope his career lasts that long.
Actually, all these bonds discuss (at length) in their offering documents that the bonds will pay off early if/when the underlying loans are refinanced or otherwise paid off. Anyone who claims they relied on these bonds not behaving this way because people weren’t going to be able to refi or sell since they were going to be underwater on the loans very soon is lying. If they thought that, they wouldn’t have bought the bonds in the first place because they would have doubted the AAA ratings.
The free lunch does not have what you think it has between the slices of bread.
“You will take what I give you and you will like it.”
The beatings WILL continue until moral improves.
That’s what the holders of government-guaranteed MBSs are finding out.
Balony!
“If homeowners win, someone else loses”
I guess if the investors were unhappy, they could opt to remove F&F’s guarantees from their loans?
No such thing as a free lunch.
No such thing as a free lunch.
Especially if you spend your per-diem at the Burlington coat factory like Michael Scott.
That’s what I was thinking. It’s like the banksters who happily take TARP money and 0% loans from the Federal Reserve, but then complain that some people think regulations should be enforced to help prevent banks from ripping people off.
By any scientific clinical analysis, banks are pyschopaths.
If 90% of all USA mortgages were F&F insured then the “administrator”(bank) would collect the insurance on defaults and pay out the insurance cos, etc.
Only the 10% will lose and that group of mortgages tended to be held by small cap banks - directly, as well as some insurance cos. They will and are losing - big time.
The only losses the big banks will have will be from the lawsuits - most from the gov for lyer loans.
Doesn’t look like realtors, appraisers, WS, etc will suffer - except from reduced sales !
I think Ben has hit the nail on the head. F&F have to be forced to do their job. They have to be forced to clear their inventory either real or shadow and to do so within a prescribed time limit. Do you think the President has the fortitude to order this ?
Is Europe on the Brink?
Oct. 25, 2011
WSJ’s Thorold Barker stops on Mean Street to discuss European leaders postponing Wednesday’s planned resolution on a rescue plan for ailing Eurozone economies.
Jeebus, I can’t stand it. Is Europe on the brink? Yes, for a lot of reasons. But I’m SO sick of the up and down the stock market does depending on the quality of the farts coming out of Europe. Somebody please give Europe a tiny shove in the back, OK? Just a little poke of the finger will do. The teeter-totter act is getting so. dang. old.
However, I do take heart from the fact that obviously, the global elites just can’t seem to agree. It’s the only thing that prevents us from having from a one world gubmin. These guys all distrust each other so completely, it’s impossible to get them to agree on anything.
What has been severely been swept under the rug in our press is that WWI and WWII could be viewed as European civil wars. The total casualty figures for those wars total is about 90 million people (per wikipedia).
I don’t know if that kind of thing can or will be ignored. Virtually everyone in Europe was affected.
Here’s what will happen:
1. They will leverage the EFSF fund from 440 billion to about 1-2 trillion.
2. serveral sovereign downgrades will follow including Germany and France.
3. The banksters and the PIIGS will suck the EFSF dry in record time. Get it while you can! You got to be fast and greedy at those feeding buckets.
4. In 1-2 years the EFSF will be depleted and sovereign credit ratings will be too low to borrow more money. What will follow is either be the biggest default the world has ever seen or the biggest money printing operation. The descision will be purely political but knowing European politicians I would guess they print whatever is needed.
The situation for the beloved Dollar is not much better.
I’m going to sound like a realtor for a second, but if we’re going to face massive inflation in 2-3 years, maybe it IS a good time to buy, even if the price is mildly inflated. If you lock in at 4.5% interest or so, your low payment is set no matter how much money they print.
I can guarantee you this, rents do not go down. Yes, I’m sure HBB can find a statistic where rent went down 3% or so, but that’s on average, and usually doesn’t apply to commercial complexes.
Oxide:
I don’t understand why there are still some people who keep screaming that we are going to have massive inflation over the next few years. Haven’t they been saying that throughout this entire deflationary spiral?
BTW, rents have gone down drastically in every market that I have had a reason to pay attention to. So have house prices.
Inflation is a useful measure when the economy is relatively stable and prices will, for the most part, move together. I don’t see that happening now.
Prices for necessities are going up as demand rises due to increased competition from emerging economies and speculation.
The price of labour for the Western world is going down, and is likely to continue for the forseable future.
Prices for local goods (such as houses) will mostly be affected by local wages. The point? Don’t expect inflation to drive up the price of houses.
In Phoenix, house prices have continued to drop, but rents have actually increased. That said, I have no idea what, if anything, that signals about future inflation. I continue to think our future likely looks something like Japan over the last 20 years. Low rates and no inflation.
Max:
Phoenix rents are WAAAAYYYY down from five years ago. Nice, big, new houses with pools are $1,000/month.
“Prices for local goods (such as houses) will mostly be affected by local wages. The point? Don’t expect inflation to drive up the price of houses.”
Your logic is okay, but remember that people are shacking up with roommates or Mom, effectively raising the amount of money that a household has available for housing. Yes, that does decrease the demand for housing, but as long as banks can mark the shadow inventory to fantasy, supply of housing will decrease with demand.
—-
Big V, what is there for JOBS in Phoenix? That’s why rent is low. Nobody has to live there.
Hey Oxide:
I agree that there are more high-paying jobs where you live. However, if you able to get a good job in Phoenix, then you will spend a much, much lower percentage of your income. You can actually save a bunch every month. After all, no one has to live anywhere. I’m not advocating Phoenix per se, but I’m just saying that there are plenty of places where rents are not that high compared to incomes.
Rents don’t go down if you stay in the same complex. You can get a better price if you move. I understand that moving is expensive.
The only place I ever lived where rent went down (a little) was in my apartment in Jersey City. The had a centralized computer system (I think the company owned hundreds of buildings) that calculated market rate for a one or two year lease every month. It may even have updated every week. That is what they charged and, once or twice over the decade I lived there, the new rent was a little lower than the old one. I’ve never come across or even heard of that situation in a commecial complex before or since.
The only time my rent went down is when I moved from DC area to the Midwest.
If you stay in the same town, the only way to keep the rent low is to either take advantage of free months, or take advantage of low rent. Either way, the rent skyrockets after that one year. So the only way I could keep my rent the same is to move every single year. Those freebies have since disappeared. And forget about negotiating. I tried that last year and it was a flop. There are simply too many people with jobs, roommates, and government cheese willing to pay.
For the heck of it, I looked up a few garden-looking things. A one-bed in Gaithersburg (15 minute drive from the end of the Metro subway) is $1200/month. I can buy a three-bed SFH for that. Yes, the house would be trashed, but livable. I’m starting to wonder why I should rent at all.
And nothing cheaper is available? Are you sure? I was offered a one bed in downtown Bethesda last year for just $1100. Now, it was a walk up in an area with only on street parking and the set up wasn’t great, but it was quiet, very close walking distance to the Metro and had an amazing, gigantic back porch. There must be deals in other parts of MoCo that would work for you. It was a small landlord who had owned the property for ages.
Then again, if you want to buy, I don’t see why you shouldn’t. As long as the commute is reasonable and the numbers work. Given where I work, my numbers are nothing like yours. I don’t see how I could buy anything without at least doubling my commute time and making the car absolutely mandatory (as opposed to now, when having it is very nice, but arguably optional).
Hey:
I know I’m beating a dead horse here, but I still think some people might be better off looking for a job in a cheaper location.
Jobs in cheaper locations often pay cheap as well.
Big V, I did have a job in a cheaper location, and was laid off. Not gonna do it again.
Houses in DC are expensive, but the price differential can be easily offset by ONE year of secure income.
Is Now The Time To Short Housing?
October 26, 2011
Case Shiller Home price data came out Tuesday morning and showed a 3.8% year-on-year drop for the 20 city home price index. Housing has been one of the critical parts of the economy which has lagged in the recovery and several attempts to support this sector have met with limited success (HARP, first time home buyers credit, Operation Twist – with an aim to lower long term mortgage rates etc.). Several analysts claim that housing is already in a double dip mode, which doesn’t augur too well for the economy. In the graph below we see that Case Shiller composite index is still bouncing around the lows from early 2009 and is down more than 30% from its peak reached in 2006.
…
As can be seen in the graph below, according to the U.S. Census, a significant amount of U.S. housing inventory is held off the market. This shadow inventory supposedly stands at 7.2 million houses, which is a dangerously high number and shows structural weakness in the housing market.
…
In conclusion it is important to come up with innovative ways to revive the U.S. housing market and such policies should make for a good debate. However the housing market fundamentals still look dreary and hence one should be very careful in gaining exposure in housing related stocks.
XHB, the homebuilders ETF, has run up significantly over the last couple of weeks in anticipation of a euro bailout. However, fundamentals underlying the U.S. housing sector still do not look great. Hence, XHB looks like a good short here. One could play the short outright or against the S&P (beta adjusting the exposure).
Posted on Sun, Oct. 16, 2011 07:07 AM
Millions of homes lurk on bank inventories, casting doubts of rebound
By TOLUSE OLORUNNIPA
McClatchy Newspapers
Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows - hidden neatly away on banks’ balance sheets, stalled in foreclosure court proceedings or simply occupied by nonpaying owners as lenders wait months or years before taking action.
The housing market’s ballooning shadow inventory - buoyed by a yearlong foreclosure slowdown - stands as the most menacing obstacle to the recovery of the residential real estate market.
Clustered mostly in hard-hit cities and states, there are more than 4.5 million homes either owned by lenders or headed for foreclosure. In Miami, for example, there are about 200,000 shadow homes, dwarfing the 30,000 properties that are listed on the active market. Even as prices in Miami have shown signs of stability this year, an impending wave of foreclosures threatens to keep real estate values deflated.
“A lot of people don’t understand how much inventory is set to come on line in the next 18 to 24 months,” said Jack McCabe, the CEO of McCabe Research & Consulting in Deerfield Beach, Fla. “When you compare what the Realtors show as inventory to what’s out there, you realize we have a long way to go.”
…
“A lot of people don’t understand how much inventory is set to come on line in the next 18 to 24 months,”
Hopefully not in DC. I’d like to buy before then.
What’s the average income in DC? Are house prices 3X that? In that case, prices are probably pretty stable.
On the other hand, you might want to see what happens with this European debt crisis. If TBTF has finally reached TBTB (too big to bail), then you might see some reform in the debt markets.
The market is booming(?)
But where are the buyers?
Inventory is looming
Realtors Are Liars®
Very nice.
I love it some much I’d like to claim it as my own masterpiece but reluctantly, I give credit to Liz Pendens.
It’s beautifully truthful isn’t it?
Here in Tucson, a good chunk of the shadow inventory consists of abandoned houses. There are several in this neighborhood, in fact. Some have been empty for years.
I certainly hope California soon joins this criminal foreclosure probe. It is high time to use the courts to reclaim what the politicians helped the Wall Street banksters to systemically steal from Main Street.
Bloomberg
New York Working With Delaware on Criminal Foreclosure Probe
October 26, 2011, 12:24 AM EDT
By David McLaughlin
Oct. 26 (Bloomberg) — New York Attorney General Eric Schneiderman is working with Delaware Attorney General Beau Biden to investigate possible criminal acts by financial institutions tied to the foreclosure crisis.
Schneiderman, who disclosed the effort in an interview last night on the cable news network MSNBC, has been investigating mortgage practices of banks as state and federal officials negotiate a settlement with lenders over foreclosure and mortgage-servicing conduct.
All 50 state attorneys general last year announced they were investigating the foreclosure practices of banks following disclosures that faulty documents were being used to seize homes. Negotiations with banks including Bank of America Corp. and JPMorgan Chase & Co. have yet to achieve a settlement more than a year since the investigation began.
Representatives of Bank of America and JPMorgan didn’t immediately respond to e-mails seeking comment after normal business hours.
…
What about the criminal acts that led to the mortgages being written in the first place?
http://www.bloomberg.com/news/2011-10-25/houston-s-county-will-ask-texas-attorney-general-to-investigate-suing-mers.html
October 21, 2011 4:01 AM
BofA Said to Get Subpoena From California’s Attorney General
Oct. 21 (Bloomberg) — Bank of America Corp. was given a subpoena by California’s attorney general for information related to the packaging and sale of mortgage-backed securities, a person familiar with the matter said.
The subpoena, delivered Oct. 18, involves mortgage securitization by the Charlotte, North Carolina-based bank and its Countrywide Financial unit, said the person, who wasn’t authorized to speak and didn’t want to be identified.
The subpoena follows a decision by California Attorney General Kamala Harris to withdraw from talks among state officials, the U.S. Justice Department and the five largest mortgage servicers.
…
Haha. I guess this is the answer to my question above.
Oct. 20, 2011, 12:32 p.m. EDT
Michael S. Riley Announces: Lawsuit Against California Attorney General Kamala Harris Continues; California Attorney — “The Doberman” — Maintains the Battle Against Ms. Harris to Protect Homeowners Nationwide
LOS ANGELES, CA, Oct 20, 2011 (MARKETWIRE via COMTEX) — In a series of hearings occurring in Florida and California, federal and state courts ruled that a lawsuit filed against California Attorney General Kamala Harris will continue. Former Florida State Prosecutor Michael S. Riley, who was present at the hearing today in Los Angeles, stated, “Ms. Harris may have unlawfully seized funds from lawyers suing allegedly corrupt banks and financial institutions.”
In what were described as very “unusual” proceedings attended by hundreds of homeowners, Attorney General Harris attempted to assume jurisdiction over well-known attorney Mitchell J. Stein but failed when Stein — known for 20 years as the “Doberman” — said multiple times in a packed Los Angeles courtroom that he will continue representing aggrieved home owners nationwide. Judge Jane Johnson did not dispute that he could indeed continue his legal representation of homeowners. Mr. Stein challenged Ms. Harris and the Judge to attempt to enjoin him from representing the homeowners in the face of California’s new “pro-bank” stance, and both Ms. Harris’ office and the Judge refused the invitation.
Mr. Riley further clarified, “The Florida court also stated that Ms. Harris may have unlawfully seized monies of Mr. Stein and asked Stein to file an amended lawsuit to identify which accounts Harris unlawfully seized and to also identify other legal claims against Harris.”
Ms. Harris then asked the Los Angeles Court to issue an injunction prohibiting 26 people from engaging in acts that have no bearing on the lawsuits currently being handled by lawyers who are working with Mr. Stein, and have no bearing on home ownership or on protecting the country from the current bank scandal.
The Los Angeles hearing was attended by more than 100 homeowners, each of whom said they were appalled and shocked that the State of California is looking to protect banks who are already found to have to have committed unsafe and unsound practices. Some of the homeowners drove more than 500 miles to attend the hearing. A homeowner who wished to remain anonymous for fear of being retaliated against by the banks said, “Mr. Stein is the only person willing to stand up to the most obvious corruption I have ever seen. I now have seen the ‘Doberman’ in action, taking corruption on head to head. What I saw today was an eye-opener.”
…
CalHFA wants to foreclose on owners renting out homes
Los Angeles Business from bizjournals by Michael Shaw, Staff Writer
Date: Tuesday, October 25, 2011, 6:52am PDT
Banking & Financial Services, Residential Real Estate, Foreclosures
Housing renting CalHFA foreclosures
A California Senate panel claimed Monday that the California Housing Finance Agency is forcing some borrowers who have rented out their homes into foreclosure even when they are current on their payments.
As if California’s foreclosure problems weren’t enough, a state Senate panel claimed Monday that the California Housing Finance Agency is forcing some borrowers who have rented out their homes into foreclosure even when they are current on their payments.
The agency is considered the state’s “affordable housing bank.”
Its officials claim the agency has no choice because its federally backed programs, which give borrowers lower mortgage rates than they get on the open market, are designed to help lower income individuals get housing, not rent out their homes.
…
So what’s wrong with this? I’m assuming that they signed the loan documents stating the homes were owner occupied to get funded. If this is the case, and the properties were used as income-generating or investment and (later, due to market conditions) rental properties, then this would constitute fraud on the buyers’ part.
Here in Tucson, saying that you’re going to live in a property that you’re actually going to rent is quite common.
And we neighborhood activists get a real kick out of reporting these “investors” to the county assessor’s office. Because that kicks their property taxes up quite a bit.
Neener-neener.
Seems that the right action is to tell them they have to get alternate financing and pay off the restricted loan and if they don’t within X number of days, then move to foreclosure, which is exactly what the article says is happening. They also can move back in to the house so it is again owner occupied.
OOPS!
Is anyone here pissed? I’m mean really pissed off? We’ve been here yammering for years about interference with a market where $hitty ideas floated as “good” drove prices sky high and now those same thugs continue to impede the natural order of things to keep prices inflated?
Are you $%^@ing pissed yet?
“Are you $%^@ing pissed yet?”
Hand raised.
Uncle! Uncle!
Unions are fine, unemployment benefits? 200 weeks, I don’t care.
SNAP, the more the merrier. Illegal immigration? I’ll buy Rosetta Stone. Just let the GD housing market correct
I’m not sure if that’s sarcasm or not.
At this point, no it isn`t.
“Unions are fine, unemployment benefits? 200 weeks, I don’t care.
SNAP, the more the merrier. Illegal immigration? I’ll buy Rosetta Stone. Just let the GD housing market correct”
TCMAU
(this cracked my ass up)
If I see an angry mob, I’ll grab my pitchfork.
Google “Occupy” for a location near you.
What angers me is that FB’s are living in those home payment-free for years on end, while I have to pay on time or have my stuff chucked on the sidewalk. Even worse, I pay rent which is inflated by Section 8 and military subsidies.
What also angers me is the number of houses which are being allowed to fall into disrepair. There are so many of these that owners of quality homes, knowing full well the families with two jobs don’t have time for a fixer-upper, jack up the price of anything that isn’t trashed.
I know. Some of my neighbors were complaining recently because their daughter (a single mom) has to pay $900/month for a 3-bedroom apartment. The thing is, see, she gets HUD assistance. Everyone else around here has to pay a few hundred more every month than she does. If it weren’t for that HUD assistance, then the market rate would drop to $900, she would still be paying the same amount, and everyone would be better off except the landlord.
“and everyone would be better off except the landlord.”
And the government (tax base). Therein lies the problem.
Yes….it is going to be very difficult to keep my mouth shut much longer. I’ve already jettisoned a few that have argued vehemently w/the very few housing ideas I’ve shared. I have just had it w/their cluelessness.
I’ve since past my patience with this. In your face confrontation is what it is now.
http://market-ticker.org/akcs-www?post=196539
For those who think the corrupt Establishment GOP is any less culpable than the Democrats for our current fiscal mess.
I am cured of thinking the corrupt GOP is any less culpable than the Democrats for our current fiscal mess. So if you can find me a D or an R or an I who will let the housing market find it`s bottom, I will vote for them. Until then, as I stated above…..
I just want a house I can afford. So I lean towards the corrupt guy who says…
“As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit the bottom,”
As opposed to the corrupt guys who come up with…..
This will focus on affordability and foreclosure prevention for responsible homeowners, who, through no fault of their own find themselves in a situation of negative equity,” said FHA Commissioner David Stevens.
x elventygazillion.
But will they do what they say if elected? I doubt it but you expressed my sentiment exactly.
There is no way Mitt will actively work to let the housing market “hit bottom” if he is elected. I doubt he was really contemplating how much capital is still at risk if that happens. That isn’t to say it won’t happen. All sorts of stuff could happen no matter who ends up in the White House next time around.
The best way to get everyone to stop trying to prop up the market would be to bring back mark-to-market on assets. Once you have to take the loss anyway, you might as well sell off everything. Even the bond holders might be able to get together on that one which would finally end the servicing stream of income. I just don’t see it happening any time soon.
And do you really see Mitt signing a bill ending Fannie/Freddie/FHA which would throw all mortgage lending back to private capital and private mortgage insurance? Nope. I don’t see it either. Ron Paul would, if he could find a Congress to send it to him, but that isn’t going to happen either.
“There is no way Mitt will actively work to let the housing market “hit bottom” if he is elected.”
Shh. He’s busy fooling the idiots.
http://news.yahoo.com/ap-man-surrender-ny-insider-trading-case-015916116.html
Goldman Sachs director to surrender in NY insider trading case
NEW YORK (AP) — A former Goldman Sachs board member linked to a massive hedge fund insider trading case is set to surrender to face criminal charges in New York City.
Two people with inside knowledge of the case confirmed that Rajat Gupta was expected to appear in federal court in Manhattan on Wednesday.
They spoke to The Associated Press on condition of anonymity because the charges hadn’t been formally announced.
Gupta’s name played prominently at the trial of former hedge fund titan Raj Rajaratnam (rahj rah-juh-RUHT’-nuhm), convicted this year of insider trading. Jurors heard wiretaps of the men discussing what prosecutors portrayed as inside information about Goldman Sachs.
Rajaratnam got 11 years in prison.
Gupta’s lawyer says the allegations are “totally baseless.”
The FBI and the U.S. attorney’s office have declined to comment.
Rajat Gupta?
Raj Rajaratnam?
You think the “$everely-gonna-be-punished” drag-net enforcement team will ever catch someone named:
Larry, James, Stevie, Eddie, Paul, Bruce, Stanley…?
Lindsey?
They are protected class. They will walk free.
Madoff doesn’t count -his biggest mistake was to mismanage other powerful white people’s money.
Finally! Let’s hope this is the beginning of a trend.
Oh thank goodness, they’re finally digging into the ranks of the Wall Street executives, prosecuting those who are responsible for this mess.
Wait, what’s that you say? That insider trading had nothing to do with the current economic crisis?*
Oh *crestfallen*.
Bread and circuses continue. No real change.
Yet, anyway.
* Don’t get me wrong. I’m for nailing all scumbags’ hides to the wall, including this one if he’s guilty. But IMHO, this is just a distraction, just another diversion to distract from the real guilty parties
See my article below on overstock.com before you discount the roll of insider trading.
I would love to see who was invested in Paulson’s Hedge Fund at the time of the crash. My guess is the list is littered with names well known on WS. We already know GS sold crapy MBS and then shorted them. That’s insider trading. You can bet that those in a position to make money off the crash did everything they could to make it look as bad as possible.
The only two brown guys on Wall Street are going to the clink. What about the 99% who are white guys?
I doubt that this is a brown guy thing, I suspect that as the % of people with investable money decreases that the elite will turn on their own. The really powerfull will use the gov to extract their revenge.
It’s the orange people who have all the power.
Yeah, I notice the squid is starting to squirt his ink in hopes of distracting us while he slips away…
The rest of the developed world in STILL in a housing bubble…
——————————–
Housing Affordability: U.S. Is the Envy Of the Developed World
Real Clear Markets | 10/26/2011 | Edward Pinto
Affordable markets are those where the median house price is less than or equal to three times median income. The United States as a whole is affordable with an average score of 3.0. As the nearby chart indicates, this places the U.S. at the head of the affordability class among seven ranked countries, with the other six ranging from moderately unaffordable to severely unaffordable.
Significantly, half of the 211 housing markets in the U.S. are ranked as affordable, with another 35% ranked as moderately unaffordable. For the other six countries, almost eighty percent of their 114 markets were ranked as either seriously or severely unaffordable. While the U.S. has 15 severely unaffordable markets, they are concentrated in a few geographies, including Honolulu, nine markets in California, and two in the Northeast, including New York City.
The U.S. high affordability ranking is noteworthy in at least three respects:
Government policy made things worse:
In the early 1990s Congress, responding to pleas by community groups such as ACORN for loosened underwriting standards to make home ownership “more affordable”, imposed affordable housing mandates on Fannie Mae and Freddie Mac. Their goal was to replace common sense credit standards based on a reasonable amount of equity, a good credit history, and adequate income.
Yet in 1989 nearly 90% of U.S. markets were already rated as affordable with only 4% rated as severely unaffordable. Not much has changed as these four were Honolulu, San Francisco, Los Angeles, and New York City. In 1992 the national home ownership rate was 64.4% and had changed little over the previous 30 years.
It’s never a moving target is it.
With wages falling, costs of living rising (school,med,insurance,food, fuel etc) , access to credit falling, and job security falling current affordability may not be an accurate representation of what’s going on.
The German vote to approve the increased bailout also increased a cap on German contributions. I think this means that they now know how much the Greek bondholders will have to lose. Whether the banks accept it is a different story.
1) German bailout fund increased, with German cap:
“The chancellor ensured cross-party support in the Bundestag to increase the effectiveness of the European Financial Stability Facility fund after persuading the main opposition Social Democrats and Greens to sign up to a motion that included a cap on German guarantees. Lawmakers voted 503 in favor of the motion to 89 against; four abstained.”
http://www.bloomberg.com/news/2011-10-26/merkel-takes-rescue-fund-vote-to-eu-summit-as-berlusconi-pressed-on-debt.html
2) Talks with Greek bondholders deadlocked:
“European Union talks with banks on bondholder losses as part of a second Greek rescue package are deadlocked and have been suspended, an EU official said.”
http://www.bloomberg.com/news/2011-10-26/eu-talks-with-banks-on-greek-bondholder-losses-are-said-to-be-deadlocked.html
Typo (major one): I wrote “The German vote to approve the increased bailout also increased a cap on German contributions”
Should be “also SET a cap on German contributions”.
Changes the whole point of the comment.
the New York Fed shipped about $40 billion in cash between 2003 and 2008. In just the first two years, the shipments included more than 281 million individual bills weighing a total of 363 tons.
“heheeheeheee…” Cheney-$hrub: “We’re in $hock & Awe, really”
NY Fed’s $40 Billion Iraqi Money Trail:
On Tuesday October 25, 2011 / CNBC
It has been called the largest airborne transfer of currency in the history of the world. But finding out what happened to all the money involved has become one of the biggest financial mysteries of all time.
Beginning in the very earliest days of the war in Iraq, the New York Federal Reserve shipped billions of dollars in physical cash to Baghdad to pay for the reopening of the government and restoration of basic services.
The money was packed onto pallets inside a heavily guarded New York Federal Reserve compound in East Rutherford, New Jersey, trucked to Andrews Air Force Base outside of Washington, and flown by military aircraft to Baghdad International Airport.
To find out what happened, a special inspector general for Iraq reconstruction has focused on the chain of custody-who was responsible for the money, minute by minute, as it made its way to Baghdad.
And although the money was handled by a variety of trained American officials and military officers in the first legs of its trip halfway around the world, CNBC has learned that something unusual happened on the Baghdad side of the transaction: Each of the money flights to Baghdad was met at the airport in Iraq by the same man.
The previously unknown Coalition Provisional Authority (CPA) official was tasked with picking up the bales of billions as they were unloaded from C-17s and arranging for them to get to the Central Bank of Iraq in downtown Baghdad. It was a perilous journey of about seven miles over a road the U.S. military called “Route Irish” through territory often controlled by insurgents. Travelers faced the threat of rocket propelled grenades, mortars, car bombs and IEDs.
Transit was so dangerous that returning American GI’s often posted YouTube videos of their trips on Route Irish, just for the bragging rights of having been there.
The CPA official was a stocky, middle-aged naturalized American citizen of Lebanese descent who was born in Saudi Arabia. His first name is Basel. At his request, CNBC has agreed to withhold his last name from this story. Basel ferried cash in Baghdad for the CPA and the American embassy from 2003 until 2008-all told handling, he said, about $40 billion in cash.
His job made him the very last American to see that money before it disappeared into the vaults at the Central Bank of Iraq. And it may have made him the only person in the history of the world to oversee the movement of $40 billion in a combat zone.
It doesn’t seem that anyone in the US government planned ahead of time to put so much responsibility-and temptation-into the hands of just one man. Former Republican Connecticut Congressman Christopher Shays co-chaired the Commission on Wartime Contracting, digging into waste, fraud and abuse in Iraq. He has traveled to Iraq scores of times to oversee US efforts there. Shays did a double take when CNBC told him how much money Basel said he handled in Iraq.
“Wait, one person?” Shays asked. “One person received $40 billion?”
Asked what he thinks about that, Shays said, “It just blows you away.”
The enormous undertaking of moving the billions began in the heavily guarded Federal Reserve compound on 100 Orchard Street in East Rutherford, NJ. There, carefully screened employees loaded pallets of cash into tractor-trailers for their journey down I-95 toward Washington, DC. The money came from an account held at the New York Fed called the “Development Fund for Iraq” which was made up of billions of dollars in Saddam Hussein’s financial assets that had been frozen under various US and global sanctions regimes. They weren’t taxpayer dollars, but the US government was responsible for making sure they got where they were going.
A typical pallet held 640 bundles, which the handlers called “bricks,” with a thousand bills in each bundle. Each pallet weighed 1,500 pounds, and they were separated by color. Gold seals were used for $100 bills, brown seals held $50 bills, purple seals $20, and so on.
The operation was handled with the utmost secrecy-just imagine what could have happened if the mafia found out which trucks held the money. The chain of custody of the cash was rigorously documented as it left the custody of the New York Fed and was signed over to Air Force officers, who oversaw the loading of C-17 transport planes and flew with the bales of money on the long flight to Baghdad. When the cargo holds were unloaded in Baghdad, Basel was there. But his presence on the receiving end of the largest airborne currency transfer in history began almost entirely by accident.
As a fluent speaker of multiple Arabic dialects, Basel had come to Iraq as a civilian with the American military. Both he and his former boss say Basel was sitting in a waiting area in Saddam Hussein’s palace in early 2003, waiting for his first assignment. While he was waiting, a US Treasury official burst into the room, looking for a translator.
“I have a situation here,” the official said. Basel raised his hand to help.
Soon he found himself wrangling with a crew of Iraqi truck drivers who had been told to make a delivery to the Central Bank of Iraq. But the bank was closed for the night, and they did not understand the instructions their American overseers were trying to impart about where to store their trucks. Basel intervened, untangling the confusion.
Meanwhile back Stateside:
“TrueReduceTheDeficitNow!!!!…Today!™” + “TrueAngry’s™”:
“Linda-the-American-Lunch-Lady-Lives-Lavishly!”
So we dropped money, not bombs?
If that’s the case, I will take my chances. My co-ordinates are…….
Liberals receive hope and inspiration from slogans. First the mantra that got Obama was “change”. The latest seems to be “we can’t wait”. All of this is to give cover to one that lacks the administrative skills to serve. We know liberals can’t change so that is why Obama will not drop below 30% in the approval ratings. You would think liberals would learn but it is easier to live in a fantasy world than face reality. Our economic problems are simple as is the solution. Govt is the problem and must be cut !!
Because everyone knows that there’s nothing worse than a…
…LIBERAL!
I agree. Senator McCain is pretty liberal and said this morning how he refused to consider reducing the trillion dollar military budget. Somehow we still need 700+ military bases in 125+ countries. Those damn liberals.
Is this type of commentary really needed?
…you’re right. Why did I take the bait?
“Liberals receive hope and inspiration from slogans.”
Morning in America.
Nobody I knew cared a bit about that slogan. What they were excited about was somebody who might scare the Russians and the Iranians.
For those to bash OWS
SALT LAKE CITY, Oct. 24, 2011 /PRNewswire/ — O.co (also known as Overstock.com, Inc., NASDAQ: OSTK), today announced March 5, 2012 as the newly set trial date for its case against Goldman Sachs and Bank of America subsidiary, Merrill Lynch. The new date was moved from December 5, 2011. To learn more visit http://www.overstock.com/50257/static.html
The San Francisco action, filed in February 2007, alleged the prime broker defendants engaged in manipulation by “naked short selling” and failing to deliver shares they sold all designed to drive down O.co’s share price to the benefit of themselves and their hedge fund clients. In December 2010, O.co filed a motion to amend to include claims under New Jersey’s Racketeer Influenced and Corrupt Organizations (RICO) Act but that motion was denied.
“We believe that Goldman and Merrill manipulated the price of our shares,” said O.co Chairman and CEO Dr. Patrick Byrne. “As we expect to show in this case, their illegal actions were designed to, and did, make them billions of dollars.”
“We will have our day in court,” said O.co President Jonathan Johnson. “Our core manipulation case is solidly established, and we move forward confident in our belief that a jury will hold these defendants to account for the harm they caused.”
Byrne continued: “In April 2006, I wrote a letter to the Wall Street Journal stating, ‘I do believe blackguards have practiced “failure to deliver” (FTD) for profit, while incidentally destroying businesses and (probably) destabilizing our capital markets. I also think that if this nation ever grasps how its savings have been looted through this mechanism, a few million Americans are going to show up at the corner of Wall and Broad with pitchforks and nooses.’ (See http://online.wsj.com/article/SB114558723216732121.html.) That, unfortunately, has come true. Wall Street’s unfettered greed has gutted the financial markets and, with Occupy Wall Street movements growing across the country, people are ready to see the corrupt organizations of Wall Street brought to justice. I anxiously await watching Goldman Sachs and Merrill Lynch rationalizing their nefarious schemes to a jury box with 12 Americans in it.”
finance.yahoo.com/news/Oco-aka-Overstockcom-prnews-2709966708.html?x=0&.v=1
Hard to imagine why anyone would bash OWS, isn’t it? The recent police actions with tear gas and flash grenades makes me want to buy a gas mask and a taser-proof vest.
The more I read about our banking industry, the more disgusted I get. I am amazed that people are still apathetic or oblivious what’s really happening.
Another of my daily reads is: http://www.nakedcapitalism.com
I’m with you on the Naked Capitalism vote. Here’s an excerpt from NK’s take on the President’s latest plan to save housing:
So why is the Administration bothering to do this?
First, Obama is addicted to the appearance of Doing Something, regardless of whether it is productive. A clear sign is the apparent failure to investigate why HARP was a dud. As a management consultant, I’ve often been brought in to help clients dig their way out of failed initiatives. Almost without exception, their idea of what went wrong misses critical issues from the customer perspective. Cardoza suggests the banks dragged their feet. Another possibility is borrowers who are seriously underwater don’t want a refi; they might want a short sale or a principal mod. Remember, default is highly correlated with how deeply a home is underwater. And that makes sense: why should any one struggle to stay in a home if it’s a losing investment? Some parents may stay so as not to disrupt their children, or because they find the stress, legal hassle, and credit rating damage of a default to be too daunting. So even if a refi makes economic sense, borrowers may feel it commits them more to a home that they need to exit.
Second, this is a sop to the banks, because a refi ends any liability associated with the origination of the mortgage, including putback liability. Now that would seem to be a big “get out of jail free” card for banks engaged in putback litigation. But the reason this is not as nefarious as it might seem is that current mortgages aren’t the big bone of contention in putbacks (even if the originator lied, the borrower is paying, so there are no damages). But it would also end any chain of title issue on that mortgage. I’ve had lawyers calling me about the “empty trust” question, that mortgages might never have been conveyed properly to securitization trusts. Kemp v. Countrywide, in which a senior Bank of America servicing officer said Countrywide retained the notes (the borrower IOU) as standard practice raises the possibility that many of its securitizations were in fact empty trusts. The more mortgages that it can get refinanced, the lower its liability would be.
This plan is yet more proof that this Administration is not about to inconvenience banks to help homeowners and communities. It has tools in its power than would change the incentives for banks and make them far more willing to do what the overwhelming majority of mortgage investors would prefer, which is provide deep principal mods for viable borrowers. Forcing banks to write down seconds, and taking an aggressive stance on foreclosure fraud would restructuring debt more attractive than it is now. But just as the banks and their captured governments in Europe seem intent on grinding down entire economies to extract their pound of flesh, so are banks in the US continuing to operate a doomsday machine that grind up housing with no regard for the economic and social costs.
All politicians are adicted to the appearance of doing something. They have to be. When a problem is generally recognized, it is almost always too late to do the right thing (prevent it). So they have to look like they are doing something to fix it.
There is a reason why airports are all set up to prevent the last attempt, but shipping containers are still uninspected. Inspecting shipping containers is boring, expensive and not visible to most people. Taking your shoes off at the airport is showy. Guess which one we have.
Hard to imagine why anyone would bash OWS, isn’t it? The recent police actions with tear gas and flash grenades makes me want to buy a gas mask and a taser-proof vest.
Be carefull the snipers will be targeting those who are prepared first.
I find it encouraging that corporations are taking them to court. God knows the retail investor has no chance. I hope they form a class action suit with all of the other companies crushed by this type of activity.
Good news that more and more libertarians are finding the truth about the WS crime machines. The crime machines still has a support of the Dems in Power and Repubs who want power. Tea Party, it’s time for you to declare, are you with the Banksters or those who oppose it?
“Tea Party, it’s time for you to declare, are you with the Banksters or those who oppose it?”
Hear, hear!
Which side are you on, Tea Party,
Which side are you on?
B.G. plant to move 47 more jobs
BY LARRY P. VALLEQUETTE
BLADE STAFF WRITER
BOWLING GREEN — An automotive supplier that this year announced it was moving 200 jobs from Bowling Green to Kentucky and Mexico now plans to cut 47 more and send the work to Mexico, a spokesman for the workers’ union said.
The Cooper-Standard Automotive employees who make window and door seal assemblies for the Ford Explorer were informed that their work was being sent to Mexico sometime between Thanksgiving and the end of the year, said Pat Gallagher, a spokesman for the United Steelworkers.
The job cuts are in addition to the loss of 200 jobs earlier this year when Cooper-Standard sent its hose manufacturing operations to Kentucky and Mexico.
And 200 more employees at the sealing plant who manufacture products for other automakers are unaffected so far, Mr. Gallagher said. “It’s very disturbing, to say the least. We were told that [pricing pressure from] Ford forced them to move the work, but we haven’t gotten confirmation.”
Woh, down in Mexico, I never really been so I don’t really know.
And oh, Mexico, I guess I’ll have to go.
OWS Oakland
http://www.youtube.com/watch?v=QngE6kKk8Lg
Shades of the 1968 Democratic Convention in Chicago. The police response was a riot.
I can’t watch it from this particular computer. Who started the violence? The cops or the protesters. The cops are trying to say they didn’t start it, but I don’t believe them.
Maybe both, cops dressed like protesters.
O asldkj W S Oakland
youtube
.com/watch?v=QngE6kKk8Lg
The internet whistleblower Wikileaks is suspending operations to focus on fund-raising instead. Its founder Julian Assange, speaking at a news conference in London, said a financial blockade imposed by American Banks has left them w/o cash.
I still can’t figure out why he didn’t leak the bank documemts first. Really can’t.
I don’t understand that either. He kept teasing us about those BAC documents and then…
…nothing.
Yeah! Either he never really had them, or they paid him off, or they threatened him. Something.
Many political observers agree that Rick Perry’s dismal debate performances have helped spark his dramatic collapse in recent polls. Now, not surprisingly, the Republican presidential hopeful insists his biggest mistake in the campaign so far was agreeing to participate in the forums at all.
“These debates are set up for nothing more than to tear down the candidates. It’s pretty hard to be able to sit and lay out your ideas and your concepts with a one-minute response,”
Yahoo news.
Is this the future? No debates? From now on we will make decisions based on who has been packaged up and presented to us from a distance.
OAKLAND, Calif. (AP) — The clash between Oakland police and Occupy Wall Street protesters left a Marine veteran who completed two Iraq tours in critical condition Wednesday after he was struck by a police projectile, a veterans’ group said.
Scott Olsen, 24, suffered a fractured skull Tuesday as he marched with other protesters toward City Hall, said Dottie Guy, of the Iraq Veterans Against the War. The demonstrators had been making an attempt to re-establish a presence in the area of a disbanded protesters’ camp when they were met by police officers in riot gear.
Several small skirmishes broke out and officers cleared the area by firing tear gas.
It’s not known exactly what type of object struck Olsen, currently a systems network administrator in Daly City, or whether he’ll need surgery, Guy said.
Olsen, who completed his service last year, participated in the protest because he felt corporations and banks have too much influence on the government, Guy said.
This is a guy who never stops giving to his country.
“This is a guy who never stops giving to his country.”
In contrast to those who never stop taking.
This is merely the beginning, folks.
To the extent military veterans and professional workers are peacefully protesting, the MSM’s straw man characterization of the OWS protestors as a pack of hand-drum pounding freakazoids will run the PTB into serious trouble.
“hand-drum pounding freakazoids will run the PTB into serious trouble.”
This is where Arab Spring and the Google-enhanced revolutions win. Nobody is stupid anymore… we don’t have to to trust mainstream media. We can review sources and interact as needed, like we do here every day.
“…left a Marine veteran who completed two Iraq tours in critical condition Wednesday after he was struck by a police projectile, a veterans’ group said.
Scott Olsen, 24, suffered a fractured skull Tuesday as he marched with other protesters toward City Hall, said Dottie Guy, of the Iraq Veterans Against the War.”
Poor guy made it out of Iraq alive, only to be injured on his home soil.
This is typical of what happens when goon squads are unleashed on peaceful protestors.
left a Marine veteran who completed two Iraq tours in critical condition Wednesday after he was struck by a police projectile
Given the recent employment personnel of hiring mainly from the military for 1st responders, chalk it up to “Friendly-fire” :-/
COMMERCIAL REAL ESTATE
OCTOBER 26, 2011
Apartment Values Rise, as Do Rents
By DAWN WOTAPKA
Strong growth of rents and occupancy levels of rental apartments have pushed some building values to record levels as Americans shift away from home ownership.
While concerns about the economy are cooling the market for most other types of commercial real estate, apartment rents and occupancies continue to be boosted by demand from millions of people who are victims of foreclosure or are unwilling or unable to buy their own homes.
At the end of the third quarter, 5.6% of the nation’s apartments were vacant, down from 5.9% in the second quarter, and the lowest level since 2006, according to Reis Inc., a real-estate data service.
Rents are up even in some cities that have been hard hit by high unemployment and the housing crash, like Orlando, Fla., Detroit and Phoenix. Effective rents, which include landlord discounts in some markets, rose to $1,004 a month in the third quarter, up 2.3% from a year earlier, according to Reis. Of the 82 major markets that Reis tracks, only Las Vegas saw rents decline compared with a year earlier.
Forecasters say rent increases could slow or stop if the economy weakens further. But for now, these trends are producing outsized returns for real-estate companies, compared with other commercial-property classes.
…
“The apartment sector has been insulated from high unemployment because it continues to inhabit a sweet spot in the economy created by demographic factors and the anemic home sales market. The U.S. is expected to see 1.5 million rental household formations in 2011, a record year, according to Green Street.”
Contrast the above information (from the WSJ) with the following:
Oct. 21, 2011, 11:23 a.m. EDT
Stay-at-home 20-year-olds: key to housing rebound
By Steve Goldstein, MarketWatch
…
A household formation is when children move out of the house, people get married, roommates split apart or couples separate. According to Census Bureau data, household formation has broken below the 500,000 to 3.5 million yearly rate it’s held for many years as more twenty-year-olds choose to live with their parents or stay with their roommates longer.
…
Now for some maths: If new renter households are increasing at record 1.5m annual rate while new households overall are increasing at lower than a tepid 0.5m rate, then the rate of former homeowner households transforming into renter households exceeds 1m per year.
Wall Street protesters find cities’ patience wearing thin
By Larry Copeland, Judy Keen, and Martha T. Moore
Updated 35m ago
A protester with the Occupy Atlanta demonstration is arrested after refusing to leave Woodruff Park early Wednesday after Mayor Kasim Reed revoked his executive order allowing the protesters to camp there.
By David Goldman, AP
ATLANTA – The Occupy Wall Street protests that started last month in New York City and spread across the USA appear to have worn thin the nerves of downtown denizens, neighbors and businesses as police in several cities are cracking down on demonstrators or preparing to do so.
A protester with the Occupy Atlanta demonstration is arrested after refusing to leave Woodruff Park early Wednesday after Mayor Kasim Reed revoked his executive order allowing the protesters to camp there.
From coast to coast, there were signs Wednesday that the Occupy demonstrations, which began in a Lower Manhattan park to protest corporate greed and other economic issues, face a growing backlash over concerns ranging from issues such as noise and sanitation to public safety and general cleanliness.
“I think what they’re doing is cool, but I like to sit in the park on nice days, and I haven’t been able to go since they’ve been there,” Karen Sanders, 34, who works downtown, says of Occupy Atlanta protesters. “Maybe it’s time they tried another approach.”
…
America’s Common Man is arising from his slumber. Perhaps we soon can reclaim our Country from the international brigade of 1%ers who ruthlessly exploit us and other free peoples.
An Occupy Wall Street March to Support Those in Oakland
Robert Stolarik for The New York Times
Police arrested a man during a march of Occupy Wall Street demonstrators on Wednesday night.
By ELIZABETH A. HARRIS and COLIN MOYNIHAN
Published: October 27, 2011
Hundreds of protesters in New York City marched on Wednesday night to show solidarity with protesters in Oakland, Calif., where the police used tear gas to disperse crowds a night earlier. About a dozen demonstrators were arrested in New York, the police said.
Just after 9 p.m., about 500 people left the Occupy Wall Street base in Zuccotti Park and went on a winding march around the financial district and City Hall, accompanied by drummers and a man playing the bagpipes as a helicopter followed overhead.
Less than an hour later, a smaller group of protesters poured into the streets, ignoring orders from police officers to stay on the sidewalk, and began a frantic cat-and-mouse game. More than 250 protesters walked quickly and sometimes ran through the streets of SoHo and the West Village, at one point storming through a movie set on Macdougal Street as groups of police vehicles with lights and sirens pursued them closely. People emerged from bars along the way asking what was going on and offering encouragement.
At one point, a group of protesters carried an orange net, the kind the police have used in similar episodes to block protesters’ movement before arrests.
Chants of “We are the 99 percent!” and “Oakland!” could be heard through the neighborhoods.
“This march is happening because the riot police attacked people in Oakland,” said a young woman who refused to give her name. “It’s something that could have happened to all of us.”
…
I hope we see some change happen from all this activism. It is a great first step, if it can keep its momentum through the winter, the movement will be able to accomplish a lot.