Archive for November 11th, 2010
Open Letter To Alan Simpson & Erskine Bowles Chairmen Of The U.S. Deficit Commission – Regarding Proposed Changes To Social Security
Dear Esteemed Chairmen:
No huge surprise here. What’s unfortunate for you is that for years, even decades – going back to Ross Perot – the American people have been prepared for and willing to accept changes (cuts) to Social Security. You, the politicians never gained the courage to ask, but I think for the most part the general public has been ready. And since I’ve been screaming about these issues my entire adult life, and have always pushed the concept of shared sacrifice as a means to budget sanity and limited government, I’m not comfortable with what I’m about to write, but it’s inescapable after watching and recording a 32-month orgy of fiscal mayhem dominated by trillion-dollar bailouts, trillions in wasted stimulus, and trillions gifted to the military-industrial killing machine.
Fast forward from the Perot deficit awakening 20 years ago, and finally, you, the generationally-irresponsible political class seem to be facing up to the unfunded entitlement budget nightmare of your own creation – or at least you’re in the discussion phase of ‘facing it’ – and what is the societal backdrop? Seething anger over the recession, the wars, multiple failed stimulus, dollar destruction, QE, and the government bailouts of favored industries.
So against this backdrop, your Commission now recommends cuts to Social Security and a hike in the retirement age to help us on our merry way to a fiscally sane future.
Here’s my recommendation for you.
The American people are willing to sacrifice as part of a shared effort at righting our budgetary path, but they are not prepared to be sacrificial lambs led to the ‘benefits and promises slaughterhouse’ while the Wall Street Banker Pigs gorge on trillions in stealth FED and FDIC bailouts, ZIRP giveaways and a record $144 billion in bonuses – an amount equivalent to the 49th largest GDP in the world - $144 billion in bonuses being paid by criminally insolvent banks that are only still operating due to a Wall Street financed K-Street lobbying tsunami that forced FASB to change the accounting rules that now allow these same insolvent institutions of usury and arrogance to apply Faustian valuations to complete shit assets all over their lying, godforsaken, Enron resembling, off-balanced, imbalanced, bs-balanced, sheets.
Banks exist in the lala land of leveraged deferred tax assets representing most of tier-1 capital at Citigroup, of hundreds of billions of helocs at Wells Fargo worth pennies, but marked at dollars, of hundreds of billions of fraudulent MBS pumped out by Countrywide, whose liability now sits with Bank of America. This is a mere glimpse of the great banking lie that provides cover for the $144 billion insolvent bonus river that bathes the Street, all supported and paid for by taxpayers, Treasury and the Federal Reserve. Therefore, ultimately, taxpayers.
In this environment, selling ‘cuts to social security’ is not going to work, and considering the role you both played in creating the irresponsible federal spending machine that now controls Washington and has bankrupted future unborn generations, fuck you for even bringing it up.
In other words, until you STOP THE LOOTING AND START PROSECUTING, STFU about cutting Social Security!
After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.
Besides the obvious seediness of this maneuver, it runs roughshod over state property laws, and the rights of investors, homeowners and borrowers. It amounts to a permanent installation of a Federal system that supersedes the county records for recording property rights. Off-record comments I’ve heard from people in power are outraged at this assault on states’ rights. But these people are not legislators, who are getting promises larger than anything in your imagination, if they will support such a bill. It might be couched as a uniform law to be adopted by the states to get around the states rights issues, but it will permanently remove some of the power over property that lies solely within the jurisdiction of the states and place it preemptively within federal jurisdiction.
All of this is scheduled to happen during the lame duck session of congress between now and the end of the this year, 2010. That means in a manner of days, some bill that may look like it has nothing to do with property, mortgages or foreclosures is going to have attached to it a provision whose effect will go even further than the notarization bill that went through Congress like S–t through a goose and almost got signed by the President. We caught that one AFTER it was passed by Congress unanimously but before Obama signed it.
We announced it as an attempt at a presidential pardon to all those who committed crimes in the notarization of documents that were fabricated and forged, all those who committed forgery and perjury and all those who created counterfeit documentation that was presented to courts as original documents.
This time we got the information, we think, before it was stitched into some innocuous looking bill. If we don’t find it and block it, the plight of homeowners will get that much worse.
That would be an ex-post-facto law, and is explicitly barred by The Constitution.
Such a bill, were it to be promulgated, would be an act of intentional subversion of The Constitution and a violation of the oath of office of every Congressperson who votes or argues for it.
If such a law is in fact introduced it would turn the rule of law on its ear and make clear that we now live in a nation where literal theft will be made legal retroactively by the Congress and President in an explicit form and with the impact of literally stealing millions of privately-held homes.
Call your Members of Congress NOW and tell them you will not tolerate this proposal to blatantly violate the rule of law in order to allow the criminal entities to continue to steal from you! It is up to YOU to defend your rights under the Constitution.
Matt Taibbi blows the door off the entire Foreclosuregate scam with yet another article…..
In one case handled by Jacksonville Area Legal Aid, a homeowner refinanced her house in 2005 but almost immediately got into trouble, going into default in December of that year. Yet somehow, this woman’s loan was placed into a trust called Home Equity Loan Trust Series AE 2005-HE5 in January 2006 — five months after the deadline for that particular trust. The loan was not only late, it was already in foreclosure — which means that, by definition, whoever the investors were in AE 2005-HE5 were getting shafted.
Why does stuff like this matter? Because when the banks put these pools together, they were telling their investors that they were putting their money into tidy collections of real, performing home loans. But frequently, the loans in the trust were complete shit. Or sometimes, the banks didn’t even have all the loans they said they had. But the banks sold the securities based on these pools of mortgages as AAA-rated gold anyway.
Right. So what’s the bottom line?
In short, all of this was a scam — and that’s why so many of these mortgages lack a true paper trail. Had these transfers been done legally, the actual mortgage note and detailed information about all of these transactions would have been passed from entity to entity each time the mortgage was sold. But in actual practice, the banks were often committing securities fraud (because many of the mortgages did not match the information in the prospectuses given to investors) and tax fraud (because the way the mortgages were collected and serviced often violated the strict procedures governing such investments). Having unloaded this diseased cargo onto their unsuspecting customers, the banks had no incentive to waste money keeping “proper” documentation of all these dubious transactions.
The entire thing was and is a scam. I’ve been blowing the whistle on this for more than three years. There’s no interest in stopping it, and most people’s eyes glaze over.
But the essence of the scam is this: you were asset-stripped, your money stolen, you were sold an overinflated house, and all of it was an intentional scam.
What’s sad is that most Americans who have an opinion about the foreclosure crisis don’t give a shit about all the fraud involved. They don’t care that these mortgages wouldn’t have been available in the first place if the banks hadn’t found a way to sell oregano as weed to pension funds and insurance companies.
That’s one of the larger uglies in all of this. Not only were you ripped off but worse, the banks who did it not only robbed you once on your house, but robbed your pension fund on the back end!
There’s a cynical argument to be made that the entire purpose of TARP and all the other BS pulled by both Obama and Bush was to run the statute of limitations – that is, intentionally delay recognition of the harm until you can’t sue to recover any more.
Then there’s the attempts to block the public’s access to the courts – to observe. A right guaranteed in the Constitution.
Worse, about an hour later, April Charney, the lawyer who accompanied me to court, receives an e-mail from the judge actually threatening her with contempt for bringing a stranger to his court. Noting that “we ask that anyone other than a lawyer remain in the lobby,” Judge Soud admonishes Charney that “your unprofessional conduct and apparent authorization that the reporter could pursue a property owner immediately out of Chambers into the hallway for an interview, may very well be sited [sic] for possible contempt in the future.”
What part of The Constitution did this DOUCHE NOZZLE not bother to read?
We stand for this? Now we not only have perjury across the board and fraud up and down the line but we also have courtrooms where judges exclude the public in direct contravention of both state and federal Constitutions?
This so-called Judge needs to be imprisoned.
Why don’t the banks want us to see the paperwork on all these mortgages? Because the documents represent a death sentence for them. According to the rules of the mortgage trusts, a lender like Bank of America, which controls all the Countrywide loans, is required by law to buy back from investors every faulty loan the crooks at Countrywide ever issued. Think about what that would do to Bank of America’s bottom line the next time you wonder why they’re trying so hard to rush these loans into someone else’s hands.
The banks are insolvent. Bankrupt. Kaput. Period.
We’re beyond Banana Republic stage – this is well into the realm where the looters are now employing as many hired guns as they can find in a puerile attempt to cover their tracks and continue to cover up the original looting with more looting!
The only remaining question is why the public sits still for this obviously outrageous behavior, and when we will see the general public rise off their couches, turn off Dancing With The Stars, demand that this crap stop and the institutions involved be shut down and broken up with their executives subject to investigation, prosecution and imprisonment.
Barack Obama And Ben Bernanke Continue To Defend Quantitative Easing, But For The Rest Of The World The Verdict Is In: They Hate It
Even as Barack Obama and Ben Bernanke publicly defend the Federal Reserve’s new $600 billion quantitative easing program, top finance officials around the globe are expressing alarm and outrage. But what did Obama and Bernanke expect? “Quantitative easing” is little more than legalized cheating. For a moment, imagine that the global economy is a giant game of Monopoly. Essentially what Bernanke has done is that he has just reached under the table and has slipped another $600 billion on to his pile of money, hoping that the rest of the players will not call him out on it. The rest of the world has heavily invested in the U.S. dollar and in U.S. Treasuries, and this new quantitative easing program is going to devalue all of those holdings. If the Federal Reserve continues to go down the road of monetizing U.S. government debt, other nations are rapidly going to get spooked and will soon refuse to invest in U.S. dollars and U.S. Treasuries. When that day arrives, it is going to cause mass panic in the world financial system.
Already, investors across the globe are flocking out of the U.S. dollar and into safe investments such as gold and silver. On Monday, gold closed at an all-time record high of $1,403.20 an ounce on the New York Mercantile Exchange, and silver closed at a 30-year high of $27.43 an ounce.
Unfortunately, our leaders seem absolutely clueless about what is really going on. In fact, Barack Obama is very much in Bernanke’s corner. During his trip to India, Barack Obama made it clear that he very much supports this new round of quantitative easing by the Federal Reserve….
“I will say that the Fed’s mandate, my mandate, is to grow our economy. And that’s not just good for the United States, that’s good for the world as a whole.”
This is the exact opposite of what Barack Obama should be doing. He should be demanding accountability from Ben Bernanke and the Federal Reserve. He should be trying to get the U.S. financial system back on some kind of solid footing.
But we all know that is not going to happen. Obama had no problem renominating Bernanke to another term, and Obama has publicly supported him at every opportunity.
Well, if Obama isn’t going to do it, shouldn’t some of our other representatives in Washington D.C. be calling for the resignation of Bernanke? After all, how many chances does one guy get? Bernanke’s record is littered with so much gross incompetence that it makes Wade Phillips of the Dallas Cowboys look like Coach of the Year. The video posted below shows Bernanke reassuring the public over and over and over between 2005 and 2007 that the U.S. economy was in great shape and that we would continue to experience solid growth….
How long is it going to be until everyone wakes up and starts acknowledging that “the emperor has no clothes” and Bernanke is running the U.S. economy into the ground?
At this point, Bernanke has lost virtually all credibility. In 2009, he promised the U.S. Congress that the Federal Reserve would not monetize U.S. government debt, but now that is exactly what is happening.
Most of the top finance officials in other countries realize what is going on, and they are really starting to make their displeasure known. The following are just a few examples of the global outrage that has been expressed about the Fed’s new quantitative easing program over the past few days….
*Xia Bin, an important member of the monetary policy committee of China’s central bank has called the Fed’s new quantitative easing plan “abusive” and is warning that it could set off a global economic meltdown.
*On Monday, Chinese Finance Vice Minister Zhu Guangyao expressed his extreme dismay regarding the Fed’s new quantitative easing scheme….
“As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets.”
“They have already pumped an endless amount of money into the economy via taking on extremely high public debt and through a Fed policy that has already pumped a lot of money into the economy. The results are horrendous.”
*Luiz Inácio Lula da Silva, the President of Brazil, says that he is incredibly upset about QE2 and that he is going to arrive for the G20 meetings in Seoul ready “to fight”.
*Bloomberg is reporting that at the upcoming G20 meetings, Russian President Dmitry Medvedev is going to “insist” that any future quantitative easing measures be globally coordinated.
*Even some top Fed officials are speaking out publicly against this new round of quantitative easing. For example, Kansas City Fed President Thomas Hoenig recently made the following statement about the new direction the Fed is taking….
“I worry that by pumping in significant amounts of dollars we then build the inflationary pressures for the future, and we do encourage then an easier credit environment that helped create this problem in the first place.”
The Federal Reserve had better hope that the rest of the world does not get scared off from buying U.S. government debt. According to the Wall Street Journal, in order to repay maturing bonds and finance the budget deficit, the U.S. government will have to come up with 4.2 trillion dollars over the next year.
If the rest of the world cuts back on buying U.S. Treasuries, the Federal Reserve is going to find itself with a gigantic mountain of debt that it will be forced to monetize.
So what happens someday when China, Japan, Russia and the major oil producers in the Middle East decide that enough is enough and they are not going to buy any more U.S. debt?
Don’t think it can’t happen – these nations are not stupid and if they realize that the U.S. dollar is going to continually keep falling in value there could be a dramatic move away from U.S. debt.
If the rest of the world quits lending massive amounts of money to the U.S. government, our leaders will be faced with three options. The U.S. government could start trying to operate within a balanced budget (which would crash the economy), interest rates on U.S. government debt could be raised until people would be willing to invest in Treasuries again (which would probably crash U.S. government finances and the economy), or the Federal Reserve could just start monetizing most of the debt on a regular basis (which would likely eventually crash the entire world financial system).
In order for the current world financial system to maintain stability, it is essential for there to be faith in the U.S. dollar and for there to be faith in U.S. Treasuries. Once faith in them is lost, it will only be a matter of time until the world financial system totally crumbles.
This new round of quantitative easing could be the “tipping point” that opens the door to the eventual complete and total collapse of the U.S. dollar. Let us hope that the dollar does not completely fail any time soon, but with jokers like Bernanke and Obama running the show, there is not much reason for optimism.
The enterprising lawyer’s network has decided to go to town…… against MERS
Two lawyers in Reno, Nev., have filed suit in 17 states alleging that banks cheated counties out of billions of dollars. In Virginia, a lawmaker has asked the state’s attorney general to investigate MERS over its failure to pay recording fees. And everywhere elected officials and class-action lawyers turn, the back-office procedures of MERS are being called into question.
Oh, this is a good one….. the claims? Exactly what I’ve been talking about for quite some time….
MERS is “an admitted fee-avoidance scheme,” says Robert Hager, the Nevada lawyer who, along with his partner Treva Hearne, is filing the suits against MERS and its bank owners, including the government-backed mortgage-finance companies Fannie Mae and Freddie Mac. Fannie and Freddie provide a low-cost flow of funding to the nation’s mortgage markets by buying mortgages from lenders, packaging them into securities and then selling them to investors.
Oh where have I heard that before? Oh yeah…..
“The MERShole Yawns Wide“, among others….
The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.
The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.
There is a problem with this, of course. MERS has almost no money. It’s just a computer, really, with a handful of employees. The better question is whether these suits can “reach back” to the corporate founders and enablers – whether through some theory of vicarious liability or similar they can get back to the banks that put this Frankenstein monster together.
Dark Ages for a modern Middle Class – Modern day debt serfdom and rising prices not seen through the consumer price index. Coffee up 50 percent for the year.
Most Americans enjoy a good cup of coffee. Yet very few realize that coffee futures are now up over 50 percent for 2010. Creative packaging that includes smaller quantities but offers the same price helps delude many Americans into thinking their dollar still has the purchasing power of better days. This all occurs in a relatively subtle and typically hidden process. Cotton for example is now up 90 percent for the year. Corn is up over 40 percent. It would be one thing if this was all based purely on demand but more of this increase in price is coming from the Federal Reserve pursuing actions that are punishing the U.S. Dollar. The below chart is rather startling and shows that even though the CPI has remained weak, principally because of the crashing housing market, many other areas are seeing incredible price increases.
The S&P 500 is up a good 9 percent for the year but that pales in comparison to other sectors:
Notice that orange juice is now more expensive? Probably because it is up 20 percent for the year. We also need to remember that the working and middle class feel much poorer because even if wages remain stagnant, the cost of daily goods and items has steadily increased. Part of this doesn’t show up in the CPI because of the large dominance of “owner’s equivalent of rent” which has held the index lower for a good time now. But even oil is reflecting the weakness of the dollar:
Clearly gas prices are not going down. The dollar weakness is already showing up in crude prices because people are having less faith in the dollar especially when the Federal Reserve can go off and print money on whatever whim they desire. Did Congress have any thorough vote regarding quantitative easing? It just seems that the Fed can ram down whatever policy it likes and condemn the middle class in the U.S. to a currency that is weaker and weaker. The Fed and the U.S. Treasury won’t openly say this but what they are doing is exporting the U.S. middle class around the globe and lowering the standard of living for most Americans because of their goal of maintaining the current monetary and banking system in place.
Many Americans are having a tough time paying their debts. Housing, the place where most Americans have their net worth is down by $4.7 trillion since the first quarter of 2007. The wealth effect is showing that it cuts both ways and many are now feeling the pinch. Banks are stricter with their lending because they realize that many Americans are already maxed out on debt. The great deleveraging is taking place and pushing many Americans into what seems to be a modern day financial Dark Age. Some of the actions are simply surreal. I’ve seen people driving in newer BMWs taking large containers of plastic and cans to recycling centers and waiting in long lines for this. It just doesn’t compute on a visual level but this is part of the great debt bubble that burst. Artifacts from better days collide with economic realities of the day. You can drive down empty subdivisions in Nevada with gorgeous homes but no one is around and thus prices have cratered.
Some ask what the future holds. The Federal Reserve has already set a torch to the U.S. dollar. Not only is this an open policy, it is what is desired. The Fed states this will make our goods more competitive globally but in reality what they are saying is that they need to bailout their crony banking friends while lowering the standard of living for the middle class in America. Bankers don’t care about allegiance to a currency or nation because they’ll just shift money around like a chess game. But most Americans get paid in U.S. dollars and not Euros.
If you feel that your paycheck is buying less you are right. You can thank the U.S. Central Bank for issuing in a new Dark Age for the middle class.