March 15, 2012 archive

Mar 15

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Mar 15

World-Inferno Politrix Social Club

(Cross-dressed from The Free Speech Zone)

Goldman Rejects Claims Made by Outgoing Executive

Goldman Sachs Exec Resignation

Goldman Sachs Group Inc. is wasting no time fighting back against a disgruntled executive who lit up the Internet Wednesday morning by tendering his resignation via the op-ed pages of the New York Times.

The executive, Greg Smith, blasted Goldman for betraying its historic culture and putting profits ahead of client interests. He said Goldman executives talk openly about ripping off their clients, who sometimes are referred to internally as “muppets.”  His incendiary take on Goldman culture quickly became a flashpoint on Twitter and elsewhere. It doesn’t exactly jibe with doing “God’s work.”

A Goldman official confirmed that Mr. Smith, who worked for the Wall Street firm for nearly 12 years, most recently in London, resigned from Goldman this morning.

http://blogs.wsj.com/deals/201…

Mar 15

On This Day In History March 15

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

March 15 is the 74th day of the year (75th in leap years) in the Gregorian calendar. There are 291 days remaining until the end of the year.

In the Roman calendar, March 15 was known as the Ides of March.

On this day in 1965, President Lyndon B. Johnson addressed a joint session of Congress to urge the passage of legislation guaranteeing voting rights for all.

Using the phrase “we shall overcome,” borrowed from African-American leaders struggling for equal rights, Johnson declared that “every American citizen must have an equal right to vote.” Johnson reminded the nation that the Fifteenth Amendment, which was passed after the Civil War, gave all citizens the right to vote regardless of race or color. But states had defied the Constitution and erected barriers. Discrimination had taken the form of literacy, knowledge or character tests administered solely to African-Americans to keep them from registering to vote.

“Their cause must be our cause too,” Johnson said. “Because it is not just Negroes, but really it is all of us, who must overcome the crippling legacy of bigotry and injustice. And we shall overcome.”

The speech was delivered eight days after racial violence erupted in Selma, Alabama. Civil rights leader Rev. Martin Luther King and over 500 supporters were attacked while planning a march to Montgomery to register African-Americans to vote. The police violence that erupted resulted in the death of a King supporter, a white Unitarian Minister from Boston named James J. Reeb. Television news coverage of the event galvanized voting rights supporters in Congress.

The Voting Rights Act of 1965 (42 U.S.C. §§ 1973 – 1973aa-6 is a landmark piece of national legislation in the United States that outlawed discriminatory voting practices that had been responsible for the widespread disenfranchisement of African Americans in the U.S.

Echoing the language of the 15th Amendment, the Act prohibits states from imposing any “voting qualification or prerequisite to voting, or standard, practice, or procedure … to deny or abridge the right of any citizen of the United States to vote on account of race or color.” Specifically, Congress intended the Act to outlaw the practice of requiring otherwise qualified voters to pass literacy tests in order to register to vote, a principal means by which Southern states had prevented African-Americans from exercising the franchise The Act was signed into law by President Lyndon B. Johnson, a Democrat, who had earlier signed the landmark Civil Rights Act of 1964 into law.

The Act established extensive federal oversight of elections administration, providing that states with a history of discriminatory voting practices (so-called “covered jurisdictions”) could not implement any change affecting voting without first obtaining the approval of the Department of Justice, a process known as preclearance. These enforcement provisions applied to states and political subdivisions (mostly in the South) that had used a “device” to limit voting and in which less than 50 percent of the population was registered to vote in 1964. The Act has been renewed and amended by Congress four times, the most recent being a 25-year extension signed into law by President George W. Bush in 2006.

The Act is widely considered a landmark in civil-rights legislation, though some of its provisions have sparked political controversy. During the debate over the 2006 extension, some Republican members of Congress objected to renewing the preclearance requirement (the Act’s primary enforcement provision), arguing that it represents an overreach of federal power and places unwarranted bureaucratic demands on Southern states that have long since abandoned the discriminatory practices the Act was meant to eradicate. Conservative legislators also opposed requiring states with large Spanish-speaking populations to provide bilingual ballots. Congress nonetheless voted to extend the Act for twenty-five years with its original enforcement provisions left intact.

Mar 15

Muse in the Morning

Photo Sharing and Video Hosting at Photobucket
Muse in the Morning


Early Summer

Mar 15

Foreclosure Fraud: The Criminals Conducted the Prosecution

Cross posted from The Stars Hollow Gazette

Along with the Foreclosure Settlement documents it was agreed that the Housing and Urban Development Inspector General report was also released. The New York Times review of the report noted that, contrary to the denial by the banks, top bank managers were responsible for the criminal conduct:

   Managers at major banks ignored widespread errors in the foreclosure process, in some cases instructing employees to adopt make-believe titles and speed documents through the system despite internal objections, according to a wide-ranging review by federal investigators.

   The banks have largely focused the blame for mistakes on low-level employees, attributing many of the problems to the surge in the volume of foreclosures after the housing market collapsed and the economy weakened in 2008.

   But the report concludes that managers were aware of the problems and did nothing to correct them. The shortcuts were directed by managers in some cases, according to the report, which is by the inspector general of the Department of Housing and Urban Development […]

   “I believe the reports we just released will leave the reader asking one question – how could so many people have participated in this misconduct?” David Montoya, the inspector general of the housing department, said in a statement. “The answer – simple greed.”

Ben Hallman at The Huffington Post observed that the report fell short because of stonewalling by the banks lawyers who blocked interviews with but a handful of employees:

Though the report describes a pattern of misconduct that appears widespread, it fails to quantify the damage to homeowners or, ultimately, how many home loans were affected. It also clearly reflects the frustration that investigators felt in conducting the review. Even as negotiators for the banks were fighting to win the best possible deal, their lawyers were stonewalling other government investigators trying to ascertain the scope of the “robo-signing” abuses.

Wells Fargo provided a list of 14 affidavit signers and notaries — but then stalled while the bank’s own attorneys interviewed them first. The bank then tried to restrict access to just five of those employees. The reason? “Wells Fargo told us we could not interview the others because they had reported questionable affidavit signing or notarizing practices when it interviewed them,” the report says. [..]

Bank of America only permitted its employees to be interviewed after the Department of Justice intervened and compelled the testimony through a civil investigation demand. Even so, the review was hindered, the report says.  [..]

The investigation into Citigroup’s mortgage division was “significantly hindered” by the bank’s lack of records. Citigroup simply did not have a mechanism for tracking how many foreclosure documents were signed.

Both JPMorgan Chase and Ally Financial refused to provide access to some employees or documents or otherwise impeded the investigation, according to the report.

Hallman also noted some of what was uncovered by investigators:

Wells Fargo employees testified that they signed up to 600 documents a day without attempting to verify whether any of the information was correct. [..] The bank also relied on low-paid, unskilled workers to do the reviews: a former pizza restaurant worker, department store cashier, and a daycare worker, to name a few.

A vice president at Bank of America testified that she only checked foreclosure documents for formatting and spelling errors. Employees in India supposedly verified judgment figures in foreclosure documents, but none of the U.S. employees interviewed by the inspector general could explain how that process was supposed to work. One former employee described signing 12 to 18 inch stacks of documents without review.

Employees at Wells Fargo and Bank of America testified that they complained about the pace and lack of care given to reviews, but instead of relief, were told to sign even faster. One Bank of America notary said his target was set at 75 to 80 documents an hour, and he was evaluated on whether he met that target. One notary even notarized her own signature on a few documents.

Abuses at the other banks — JPMorgan Chase, Citigroup and Ally Financial — appear just as pervasive. Citi, for example, routinely hired law firms that “robo-signed” documents. An exhibit included with the report shows eight different versions of one attorney’s signature — all apparently signed by different people.

In signing off on this 49 state agreement the banks did not have to admit to any wrongdoing despite the damning evidence of fraud that was directed by top management. No other sanctions beyond a few billion dollars and certainly no criminal prosecutions. If I were Bernie Madoff, I’d be really pissed.

Mar 15

Foreclosure Fraud: Finally the Details

Cross posted from The Stars Hollow Gazette

The Foreclosure Fraud Settlement documents were filed in federal court and released to the public. There is a lot to wade through but the intrepid David Dayen at FDL News Desk breaks them down in a series of four articles that highlight just how easy these banks are getting off and what they are getting away with. Some of it will really make your blood boil:

Foreclosure Fraud Settlement Docs (I): Ally’s Side Deal

What accounts for this? Probably this little nugget buried in a Reuters article on the settlement:

  Some banks negotiated separate requirements.

   Ally Financial, for example, negotiated a steep discount on the fine part of its settlement, based on an inability to pay it, according to people familiar with the matter.

   It was expected to pay some $250 million, but the Justice Department cut it to around $110 million, these people said.

   In exchange, it committed to solicit all borrowers in its own loan portfolios and to offer to cut principal for delinquent borrowers down to 105 percent of the home’s value. It also offered to refinance underwater borrowers who are current on their payments.

Gee, I didn’t know that federal and state civil penalties had a “pay what you can” quality to them. [..]

About those state funds: there is nothing to stop state AGs from using them in any way they see fit. Note the weasel words in this language (which I’ve bolded):

Each State Attorney General shall designate the uses of the funds set forth in the attached Exhibit B-1. To the extent practicable, such funds shall be used for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance law enforcement efforts to prevent and prosecute financial fraud, or unfair or deceptive acts or practices and to compensate the States for costs resulting from the alleged unlawful conduct of the Defendants.

   No more than ten percent of the aggregate amount paid to the State Parties under this paragraph 1(b) may be designated as a civil penalty, fine, or similar payment. The remainder of the payments is intended to remediate the harms to the States and their communities resulting from the alleged unlawful conduct of the Defendant and to facilitate the implementation of the Borrower Payment Fund and consumer relief.

You have that strong word “shall” competing with “to the extent practicable.” And indeed, several states have already made clear that they will be diverting much of the settlement into their state budgets. More make it clear in the settlement docs, more on that later.

Foreclosure Fraud Settlement Docs (II): Giving Homes to Charity as a Penalty

Another part of the document explains that any modification under any government housing program can qualify under the settlement credits:

   Eligible modifications include any modification that is made on or after Servicer’s Start Date, including:

   i. Write-offs made to allow for refinancing under the FHA Short Refinance Program;

   ii. Modifications under the Making Home Affordable Program (including the Home Affordable Modification Program (“HAMP”) Tier 1 or Tier 2) or the Housing Finance Agency Hardest Hit Fund (“HFA Hardest Hit Fund”) (or any other federal program) where principal is forgiven, except to the extent that state or federal funds paid to Servicer in its capacity as an investor are the source of a Servicer’s credit claim.

   iii. Modifications under other proprietary or other government modification programs, provided that such modifications meet the guidelines set forth herein.

Presumably those programs weren’t all going to shut down. So banks doing what they’ve been doing, meeting the minimum requirements of those other programs, will help them complete the settlement requirements.

Foreclosure Fraud Settlement Docs (III): “Internal Review Group”

Page E-3 details the “internal review group”:

   Servicer will designate an internal quality control group that is independent from the line of business whose performance is being measured (the “Internal Review Group”) to perform compliance reviews each calendar quarter (“Quarter”) in accordance with the terms and conditions of the Work Plan (the “Compliance Reviews”) and satisfaction of the Consumer Relief Requirements after the (A) end of each calendar year (and, in the discretion of the Servicer, any Quarter) and (B) earlier of the Servicer assertion that it has satisfied its obligations thereunder and the third anniversary of the Start Date (the “Satisfaction Review”). For the purposes of this provision, a group that is independent from the line of business shall be one that does not perform operational work on mortgage servicing, and ultimately reports to a Chief Risk Officer, Chief Audit Executive, Chief Compliance Officer, or another employee or manager who has no direct operational responsibility for mortgage servicing.

So the bank can take their own employees out of another part of the bank and have them conduct a quarterly review, which then gets passed to the monitors and becomes the initial basis for enforcement. Even if you believe these will be “independent” internal reviews, we’ve seen with the OCC foreclosure reviews that those independent reviewers paid for and hired by the banks typically write bank-friendly reports. In fact, a later note indicates that “The Internal Review Group may include non-employee consultants or contractors working at Servicer’s direction.”

Foreclosure Fraud Settlement Docs (IV): Association of Mortgage Investors Planning to Challenge in Court

At any rate, if there’s one group who does not agree with HUD that investors won’t end up footing the bill for a substantial portion of the settlement, it’s… the Association of Mortgage Investors. The trade group representing investors in mortgage-backed securities fully believes they will be on the hook for losses, and so they will challenge the settlement in federal court.

   As the federal court reviews the final settlement, AMI asks that the following changes be made on behalf of all investors:

   Transparency. The NPV (net present value) model incorporated into the settlement must consider all of a borrower’s debts, be national in scope, transparent, and publicly disclosed; the NPV model must be developed by an independent third-party. An incorrect NPV model likely will lead to further re-defaults and further harm distressed homeowners.

   Monetary Cap to Protect Public Institutions. As intended, the settlement causes financial loss to the abusers (the bank servicers and their affiliates). Unfortunately, the settlement is expected to also draw billions of dollars from those not a party to the settlement, including public institutions, unions, and individual investors. It places first and second lien priority in conflict with its original construct thereby increasing future homeowner mortgage credit costs. It is unfair to settle claims against the robosigners with other people’s funds. While we request that it not be done, at a minimum we request that a meaningful cap be placed on the dollar amount of the settlement satisfied by innocent parties. Again, restitution should come from those who are settling these claims, and

   Public Reporting. We ask that the settlement Administrator be required to make reports public and available on a monthly basis, reporting progress on clearly defined benchmarks and detailing on both a dollar and percentage basis whether the mortgages modified are owned by the mortgage servicers or the general public.

Over at naked capitalism, Yves Smith points out The Legal Lie at the Heart of the $8.5 Billion Bank of America and Federal/State Mortgage Settlements

HUD Secretary Donovan, the propagandist in chief for the Federal/state mortgage pact, has claimed he has investor approval to do the mortgage modifications that are a significant portion of the value of the settlement. We’ll eventually see what is actually in the settlement, but the early PR was that “no less than $10 billion” of the $25 billion headline total was to come from principal reductions. Modifications of mortgages not owned by banks, meaning in securitized trusts, are counted only 50% and before Donovan realized he was committing a faux pas, he said he expected 85% of the mods to be from securitizations, so that means $17 billion. [..]

But what about this investor approval that Donovan says he has? He has told both journalists and mortgage investors directly that the bulk of the mods will come from Countrywide deals and he has consent via the $8.5 billion Bank of America/Bank of New York settlement. Huh? First, it seems more that a bit cheeky to rely on a major piece of a program via a deal that has not yet gone through (the Bank of America settlement was removed to Federal court and has now been sent back to state court, and there will be discovery in the state court process, so approval is not imminent).

But second and more important, investors approved nothing. Bank of New York is trying to act well outside its authority as trustee for the 530 Countrywide trusts in the settlement. It’s tantamount to having a friend that you gave a medical power of attorney claim that it gave him the authority to sell your car and write checks on your account.

The terms of Countrywide PSAs vary, but all appear to restrict mods. The prohibitions varied by credit quality of the deal. Alt-A and early vintage (2004 and earlier) deals often barred mods completely; subprime and later vintage deals generally allowed for a higher limit on mods, with 5% the top amount across these deals. The idea was that some mods were expected in the dreckier mortgage pools. Nevertheless, all of them, as well as the few that had no caps, also required Bank of America to buy the modified loans back at par. That is something the battered Charlotte bank would be very keen to avoid doing.

This comment by Synoia sums it all up pretty nicely:

The Banks won’t be held accountable

The Banks won’t fix their past behavior

The Banks won’t change their behavior

The Banks won’t stop bribing our politicians

The Banks won’t stop gouging consumers

The Banks won’t tell the truth about any facet of their business

The Banks won’t stop taking enormous risks with other people’s money

The Banks won’t stop paying their worthless executives too much money

Need one continue?

And this settlement won’t change a thing.

Thank you, President Obama

Mar 15

Late Night Karaoke

Mar 15

Cartnoon

Crusader vs. the Pirates

Crusader Rabbit Crusade 2 Episode 10

Open Thread

Mar 15

The Humanitarian War

Watch  The Humanitarian War.    Curveball strikes again.  It’s the same damned playbook.

“Responsibility 2 Protect” is the witty handmaiden of imperial power, and it’s easy for liberals to text.

RU4 R2P?

Gaddafi got in the way of Empire!    Gaddafi wanted an African Union, independent banking.  We wanted AFRICOM (and light, sweet crude).  Bang, bang.  You’re dead.  “We came, we saw, he died.  Ha, ha.”  Easy peasy, lemon squeezy, R2P is slick and sleazy.  Most liberals not only fell for it, they continue claiming bragging rights!  Don’t tell that to Obama supporters, unless you want to be labeled a purity troll and hear inept comparisons to taking out Dillinger.  That’s how these hypo-criticals roll.

When the media claimed Gaddafi was handing out boner pills so his soldiers could rape more effectively, you had to be an idiot not to still smell the bullshit from the Iraqi incubator story.

This is not a momentary lapse of reason, but simple alternation, resulting in a continuous lapse of reason: conduct wars that liberals like, then conduct wars conservatives like, and so on.   Vilification of the victims is “a cakewalk” with threshold public support.  

Now a majority of Americans want to go to war with Iran, if they try to get nukes, which I’m certain we will assure ourselves is true, despite any lack of evidence.  We have informants we trust in MEK.  Ask Howard Dean!  Yee-argh!

I’m looking forward to the shoot-out in the bathtub.  I’ve never seen modern, nuclear-powered aircraft carriers sink.  Besides, killing a million (more) Iranians, a massive land war in Asia, sky-rocketing oil prices, and some heavy duty military spending are just what we need to get this economy rolling (faster, downhill, backwards, with no brakes).

Maybe the commies have us in their mind rays, and are just paying us back for their collapse.  Nah, we’re just that stupid.

Update:

Libya is fucked up, just like Iraq.

Mar 15

My Little Town 20120314: The Halls

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

When I was a lad there were two general stores in town, the one that Gene and Katy Pittman ran and the one up the street that Mr. and Mrs. Rutledge owned.  Gene and Katy had the smaller one, and it was literally a mom and pop outfit.  The Rutledge’s store was quite a bit larger and had a greater variety of things, like clothes, than the other one.

The Rutledges employed Mr. Hall as a butcher.  Mr. Hall was at the time around 60 or so.  They lived only a few blocks from my grandmum, and Mrs. Hall was the classic stay at home spouse, but she did teach piano lessons in her home.  They were really nice people, and Mr. Hall was into radio in a big way.  I was also interested in radio, so we would sit in his shop and he would show me how to repair them.  He did that as a sideline business and he also collected antique radios.

Mar 15

Today on The Stars Hollow Gazette

Our regular featured content-

These featured articles-

This special feature for March Madness

This is an Open Thread

The Stars Hollow Gazette