Tag: banks

Cross posted from The Stars Hollow Gazette

President Obama’s jettisoning the EPA regulations dominated the Friday news dump. What was buried in the usual media hullabaloo was this:

Apparently the FHFA has found something that this White House hasn’t, the courage to hold the banks accountable for the losses from the sale of mortgage backed securities (MBS) to Fannie Mae and Freddie Mac. The suit surpasses the $20 billion settlement that the 50 state AG settlement is reportedly attempting to extract from the banks for a liability release over ALL issues in foreclosure fraud.

The lawsuits cover $105 billion worth of securities, and FHFA wants returns on some portion of the losses taken on the securities, which they attribute to illegal actions by the banks when they sold the MBS (specifically, misrepresentations about the underlying loans). Earlier reports said that the losses for Fannie and Freddie on private-label MBS came to around $30 billion, so that’s probably around what they will ask for. The LA Times story puts it at $41 billion in losses. Whatever the number, this is more than the 50 state AG settlement is reportedly attempting to extract from the banks for a liability release over ALL issues in foreclosure fraud. And this is just a representations and warrants case.

This may derail the 50 state AG attempts at an agreement that absolves banks from any liability:

The biggest banks are already negotiating with the attorneys general of all 50 states to address mortgage abuses. They are looking for a comprehensive settlement that will protect them from future litigation and limit their potential mortgage litigation losses.

“This new litigation could disrupt the AG settlement,” said Anthony Sanders, finance professor at George Mason University and a former mortgage bond strategist.

Banks may be more reluctant to agree to a settlement if they know litigation from other government players could still wallop their capital, he said.

As David Dayen so astutely observes:

. . . . FHFA is just a canary in the coalmine for the losses and the liability that these banks are holding because of their actions in mortgage origination, securitization, and servicing. You cannot have a banking sector with this many liabilities and expect a robust, well-functioning economy. This action is necessary for the rule of law as well as for the health of the nation.

(emphasis mine)

Even better would be some of the people involved being held responsible and sent to prison.

Cross posted from The Stars Hollow Gazette

Once again the President who campaign on the restoration of the rule of law falls on the wrong side. The New York Times writer, Gretchen Morgensen, revealed in an article that the Obama Justice Department and Housing and Urban Development were putting pressure on New York State Attorney General Eric Schneiderman to drop his investigation into the banking industries foreclosure fraud that led to the economic housing crisis:

Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.

Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

In other words, this is going to take too long and we have an election to finance. Please, do not piss off the banksters, they’re the only ones with money.

Obama administration doesn’t want to help the homeowners or prosecute those who committed this fraud, as David Dayen so bluntly states, they want to “white wash the fraud”:

The White House must think that if they can get Schneiderman, the AG with the most leverage over the talks by virtue of New York’s important position with respect to mortgage securitization, to bend, they can roll the rest as well. The WSJ article says that federal officials have a Labor Day target date for a settlement, and that they’ll continue “outreach” to all AGs. I bet they will.

The banks want at least 40 states signing off on this settlement before they agree to it. I can think of at least 10 AGs right now who wouldn’t agree to the broadest terms. Democrats Madigan, Schneiderman, Delaware’s Beau Biden (the VP’s son, who has joined Schneiderman on his intervention into the Bank of America settlement with investors over mortgage backed securities), Massachusetts’ Martha Coakley and Nevada’s Catherine Cortez Masto are on the record against a broad liability release in one way or another, and others like Washington’s Rob McKenna (R), Colorado’s John Suthers (R), California’s Kamala Harris, and even Utah’s Mark Shurtleff (R) and Michigan’s Bill Schuette (R) have active investigations or lawsuits on this issue. That’s an incomplete list off the top of my head. And if you add Republican anti-government types who don’t want to see any monetary penalty at all, you might not get to 25 in favor.

Of course this has earned a couple of people the dubious honor of not being named “wankers” but two of the worst people by Dayen and our man of few words, Atrios.

From Dayen the honor goes to Kathryn S. Wylde, board member of the Federal Reserve Bank of New York:

   The lawsuit angered Bank of New York Mellon, and as Mr. Schneiderman was leaving the memorial service last week for Hugh Carey, the former New York governor who died Aug. 7, an attendee said Mr. Schneiderman became embroiled in a contentious conversation with Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York who represents the public. Ms. Wylde, who has criticized Mr. Schneiderman for bringing the lawsuit, is also chief executive of the Partnership for New York City. The New York Fed has supported the proposed $8.5 billion settlement {…}

   Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general “it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street – love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”

And from Atrios, his honor goes to HUD Secretary Shaun Donovan for this gem:

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks. … In an interview on Friday, Mr. Donovan defended his discussions with the attorney general, saying they were motivated by a desire to speed up help for troubled homeowners. But he said he had not spoken to bank officials or their representatives about trying to persuade Mr. Schneiderman to get on board with the deal.

Remember HAMP? Right. They just want to help.

    Unlike the deficit ceiling standoff in Washington, Europe is experiencing a real financial crisis, and today it began to get out of control.

 The European money markets have begun to seize up as pressure mounts on the Italian and Spanish banking systems, tracking the pattern seen during the build-up towards the financial crisis in 2008.

   “Europe’s money markets are undoubtedly starting to freeze up,” said Marc Ostwald from Monument Securites.

   “It’s not as dramatic as pre-Lehman but it is alarming and shows the pervasive degree of fear in the markets. People are again refusing to lend except on a secured basis.”

 Italian banks have been hit especially hard, with almost daily suspensions of their stock trading due to selling pressure. But today things went to a different level.

 Italian bank’s main stock market collapses, causing the suspension

 They called it a “technical problem” that just happened to coincide with a collapse in Italian bank stocks.

AFL-CIO blog site about rallies-link in graphic

If you thought you didn’t have a reason to participate in the April 4th “We Are One” {face book page link} rallies around the country this report will certainly plant that needed seed as they continue trying to destroy what America once was building successfully, through it’s workers!

6omin. 3 April 2011, if you missed this it’s a must watch and or read!  

As Lieberman deliberated, the new chair of the Democratic Senatorial Campaign Committee, Sen. Patty Murray (D-Wash.), told HuffPost that the party would consider supporting Lieberman if he returned to the fold.

http://www.huffingtonpost.com/…

Joe & George the President

The feeling of ill will is mutual: Lieberman said during the health care debate that one reason he opposed a Medicare buy-in compromise was that progressives were embracing it.

Joe & John the Presidential Candidate

March 20, 2003

” What we are doing here is not only in the interest of the safety of the American people. Believe me, Saddam Hussein would have used these weapons against us eventually or given them to terrorists who would have. But what we are doing here, in overthrowing Saddam and removing those weapons of mass destruction and taking them into our control, is good for the security of people all over the world, including the Iraqi people themselves.”

http://www.lobelog.com/lieberm…

Joe and John in Iraq

September 29, 2011.    10 years and 18 days after 9-11 attacks on NYC



” It is time for us to take steps that make clear that if diplomatic and economic strategies continue to fail to change Iran’s nuclear policies, a military strike is not just a remote possibility in the abstract, but a real and credible alternative policy that we and our allies are ready to exercise.

It is time to retire our ambiguous mantra about all options remaining on the table. It is time for our message to our friends and enemies in the region to become clearer: namely, that we will prevent Iran from acquiring a nuclear weapons capability — by peaceful means if we possibly can, but with military force if we absolutely must. A military strike against Iran’s nuclear facilities entails risks and costs, but I am convinced that the risks and costs of allowing Iran to obtain a nuclear weapons capability are much greater.

Some have suggested that we should simply learn to live with a nuclear Iran and pledge to contain it. In my judgment, that would be a grave mistake. As one Arab leader I recently spoke with pointed out, how could anyone count on the United States to go to war to defend them against a nuclear-armed Iran, if we were unwilling to go to war to prevent a nuclear-armed Iran? Having tried and failed to stop Iran’s nuclear breakout, our country would be a poor position to contain its consequences.

I also believe it would be a failure of U.S. leadership if this situation reaches the point where the Israelis decide to attempt a unilateral strike on Iran. If military action must come, the United States is in the strongest position to confront Iran and manage the regional consequences. This is not a responsibility we should outsource. We can and should coordinate with our many allies who share our interest in stopping a nuclear Iran, but we cannot delegate our global responsibilities to them.”

http://www.lobelog.com/lieberm…

http://lieberman.senate.gov/in…

The “too-big-to-fail” banks brought the world economy within hours of utter collapse in September 2008 through a chain reaction of insolvency and counter-party risk.  The fuse was lit, only to be serially and temporarily retarded by massive government infusions of taxpayer money approximating the size of our entire GDP.  A prudent response would have been to dismantle any risk-taking institution that might be considered to be “too big to fail” in any future scenario, to create a more distributed (not all eggs in one basket), and more robust system that could easily withstand isolated failures.  This was not done.  In fact, just the opposite occurred.  The banks took the massive infusions of cash and became even  fewer, bigger, and more prone to systemic failure.

Goldman Sachs:

“We consider our size an asset that we try hard to preserve.”

Or as Lloyd Blankfein might say: We embiggen ourselves!  

Simon Johnson explains the “logic” and purpose of becoming “even bigger and failer” after the first near total collapse of the global economy:

As John Cochrane, a University of Chicago professor and frequent contributor to the Wall Street Journal puts it, “The incentive for the banks is to be as big, as systemically dangerous as possible.”

This is how big banks ensure they will be bailed out.

Financial terrorism using the threat of a “financial weapons of mass destruction” is a feature, not a bug.  Holding Americans (and the rest of the world) hostage to financial terrorism is a feature that the Obama administration clearly supports by inviting the perpetrators of financial terrorism into key posts in the White House.  Try crashing those gates, Kos!  You might need some help from non-Democrats.

The Federal Reserve is fully committed to Wall Street, as well.  Fueling asset speculation by giving cheap (to the banks) taxpayer-backed money to the rich, while not one of its two mandates (of full employment and price stability) is now the Fed’s primary goal.  The Fed has abandoned its mandates of full employment and price stability in favor of letting the rich get richer by gambling with our money.  

This comment (from the previous link) explains the Fed’s strategy:

The Fed agenda is quite simple: fuel asset speculation in the hope of provoking a price inflation that will validate outstanding debt. Why can’t this work? Because the debt is owed by wage earners whose incomes are undermined by globalization.

Of course, as the comment implies, a lot of the speculation is being done in emerging markets overseas (draining away productive capacity and jobs at home) and in commodities, such as food and fuel, making everyday living ever more painful for 90% of us, while the lugals save their own bacon and embiggen themselves.

Don’t expect home prices to rise or even stabilize, even after 50-some-odd straight months of housing price declines.  We’re still a long way from rock bottom.  Of course, it’s not just the wage earners whose assets are impaired.  The government and all of its government-sponsored entities, including the six largest banks and Fannie and Freddie, will simply be the last to fold.

The real economy, including the surplus eaters (you and I), can literally drop dead.  Now.

Things I Couldn’t Make Up If I Tried, continued:

William Daley, an executive with JP Morgan Chase in Chicago, is under consideration to replace Rahm Emanuel, who is running for Mayor of Chicago, as President Obama’s Chief of Staff.

http://thehill.com/blogs/blog-…

Emanuel hopes to succeed outgoing Mayor Richard M. Daley, the brother of William Daley. Like Emanuel, Daley would be a choice with strong ties to the president’s hometown of Chicago.

The decision comes at a critical point of turnover for the Obama administration, as it pivots toward the back half of its first term, and looks toward re-election in 2012.

Someone please diary this info. I do not have time and this is really huge

chart

Banking giants leaned heavily on Fed in crisis

* Fed releases details of loans made during crisis

* Barclays took largest loan from broker-dealer window

* Citigroup, BofA sought support well into spring 2009

* Korea, Harley Davidson borrowed commercial paper (Recasts, adds details, analyst reaction)

By Pedro da Costa and Rachelle Younglai

WASHINGTON, Dec 1 (Reuters) – Goldman Sachs Group (GS.N) Citigroup (C.N) and other big U.S. banks repeatedly sought help from the Federal Reserve during the financial crisis, according to data on Wednesday that showed just how precarious their situation was at the time.

Many of the firms now boasting solid profits had to rely on funding from the U.S. central bank, which essentially acted as the glue holding the financial system together in the tumultuous months that followed the bankruptcy of Lehman Brothers in September 2008.

Citi tapped Fed window 278 times during crisis

Goldman tapped Fed window 84 times during crisis

Talk about journalists being stenographers to powerful, banking interests. Banks which are foreclosing home mortgages are getting a walk in the traditional press because the press insists on reporting that the banks “didn’t read the documents” filed in court, rather than that the banks swore to documents that were palpably false and filed in courts, all in the service of taking title to homes in foreclosure so they could be re-sold and their present occupants could be evicted.

Join me in the fine print.

Remember how we were all told that by installing new regulation oversight on the banks would fix what is wrong with the economy?

Remember how the same guys who broke the financial economy and stole trillions stood before the world and declared that they now know how to fix it?

Well … one thing is for sure … The Fix Is In!

The Reaganomics, working as forecast, not by supporters of!

Why isn’t the economy moving, watch or read this clip report from last night. A simple explanation of how and who controls what, as the repub or conservative meme’s coming from the top to their herds about how their ideology on capitalism and the economy will cause prosperity, especially the continuing saying it will help small businesses develop and grow, for everyone, ‘Trickle Down’. There is very little private capital, their grease for the economic machine, being invested into small businesses as we talk and hear about billions between corporations and wall street and multi millions into the pockets of the corporate execs with ever growing tax write off corporate perks to go along with their huge tax cuts!