It has come to our attention that President Obama’s “pocket veto” yesterday of HR 3808 may have been a bit of trickery. This from Karl Denninger:
Is it actually adjourned?
4closurefraud is reporting that The Senate session is still formally open, and if so, our President may have just lied – directly – to The American People.
The word is out that Pres. Obama’s pocket veto of the Digital Robo-Signing Act was actually a trick. Sen. Harry Reid didn’t actually adjourn the U.S. Senate. The Senate has been kept in session by a little understood ruse and the bill will become law tonight at midnight without the President’s signature.
The big banks will file suit after the election to have this bill declared to be law.
Article I, Section 7 of the U.S. Constitution seems to support this view.
Some drunken bankers were already bragging about this an some major news outlets, including Fox News have reported on this.
If we have been intentionally bamboozled by this President for the purpose of legalizing the theft of homes he must be impeached immediately.
This is incredibly important to stop, it is a disgusting slap in the face to the American People if we let the banks cover up their FRAUD yet again.
I urge everyone to please call the White House Switchboard IMMEDIATELY. Make it clear that you want President Obama to stop HR 3808 in its tracks and that you EXPECT HIM TO HOLD THE BANKS ACCOUNTABLE FOR THEIR OWN FRAUD! Let him know in no uncertain terms that you will hold him to account should a procedural end-run be performed!
The number to call is: 202-456-1111
I called… it was easy, I spent 30 seconds on hold and gave them my strongest opinion. Please call NOW! Let them know they will be held accountable if the banks are not!!!
Thank You, Nathan Martin (SwarmUSA), Stephanie Jasky (FedUpUSA)
As a bit of background information, here’s Janet Tavakoli’s take on the importance of this fraud:
Ezra Klein: What’s happening here? Why are we suddenly faced with a crisis that wasn’t apparent two weeks ago?
Janet Tavakoli: This is the biggest fraud in the history of the capital markets. And it’s not something that happened last week. It happened when these loans were originated, in some cases years ago. Loans have representations and warranties that have to be met. In the past, you had a certain period of time, 60 to 90 days, where you sort through these loans and, if they’re bad, you kick them back. If the documentation wasn’t correct, you’d kick it back. If you found the incomes of the buyers had been overstated, or the houses had been appraised at twice their worth, you’d kick it back. But that didn’t happen here. And it turned out there were loan files that were missing required documentation. Part of putting the deal together is that the securitization professional, and in this case that’s banks like Goldman Sachs and JP Morgan, has to watch for this stuff. It’s called perfecting the security interest, and it’s not optional.
EK: And how much danger are the banks themselves in?
JT: When we had the financial crisis, the first thing the banks did was run to Congress and ask for accounting relief. They asked to be able to avoid pricing this stuff at the price where people would buy them. So no one can tell you the size of the hole in these balance sheets. We’ve thrown a lot of money at it. TARP was just the tip of the iceberg. We’ve given them guarantees on debts, low-cost funding from the Fed. But a lot of these mortgages just cannot be saved. Had we acknowledged this problem in 2005, we could’ve cleaned it up for a few hundred billion dollars. But we didn’t. Banks were lying and committing fraud, and our regulators were covering them and so a bad problem has become a hellacious one.
EK: My understanding is that this now pits the banks against the investors they sold these products too. The investors are going to court to argue that the products were flawed and the banks need to take them back.
JT: Many investors now are waking up to the fact that they were defrauded. Even sophisticated investors. If you did your due diligence but material information was withheld, you can recover. It’ll be a case-by-by-case basis.
EK: Given that our financial system is still fragile, isn’t that a disaster for the economy? Will credit freeze again?
JT: I disagree. In order to make the financial system healthy, we need to recognize the extent of our losses and begin facing the fraud. Then the market will be trustworthy again and people will start to participate.
EK: It sounds almost like you’re saying we still need to go through the end of our financial crisis.
JT: Yes, but I wouldn’t say crisis. This can be done with a resolution trust corporation, the way we cleaned up the S&Ls. The system got back on its feet faster because we grappled with the problems. The shareholders would be wiped out and the debt holders would have to take a discount on their debt and they’d get a debt-for-equity swap. Instead we poured TARP money into a pit and meanwhile the banks are paying huge bonuses to some people who should be made accountable for fraud. The financial crisis was a product of our irrational reaction, which protected crony capitalism rather than capitalism. In capitalism, the shareholders who took the risk would be wiped out and the debt holders would take a discount but banking would go on.