FedUpUSA

Archive for December 18th, 2010

Leading bank analyst Chris Whalen has raised the question of whether criminal charges should be brought against former Treasury Secretary Hank Paulson.

Any discussion of whether Paulson committed unlawful actions as Treasury Secretary needs to start with Tarp.

As the New York Times wrote last year:

In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.

Indeed, Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed:

That is especially interesting given that the financial crisis had actually been going on for a long time, but – instead of dealing with it – Paulson and the rest of the crew tried to cover it up and pretend it was “contained”, and that it was obvious to world leaders months earlier that it was not a liquidity crisis, but a solvency crisis (and see this).

Bait And Switch

The Tarp Inspector General has said that Paulson misrepresented the big banks’ health in the run-up to passage of TARP. This is no small matter, as the American public would have not been very excited about giving money to insolvent institutions.

And Paulson himself has said:

During the two weeks that Congress considered the [Tarp] legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets—our initial focus—would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.

So Paulson knew “by the time the bill was signed” that it wouldn’t be used for its advertised purpose – disposing of toxic assets – and would instead be used to give money directly to the big banks?

Senator McCain also says that Paulson pulled a bait-and-switch:

Sen. John McCain of Arizona … says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.

“Obviously, that didn’t happen,” McCain said in a meeting Thursday with The Republic‘s Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. “They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors. . . . What they figured was that if they stabilized Wall Street – I guess it was trickle-down economics – that therefore Main Street would be fine.”

Even the New York Times called Paulson a liar in 2008:

“First [Paulson’s Department of Treasury] says it has to have $700 billion to buy back toxic mortgage-backed securities. Then, as Mr. Paulson divulged to The Times this week, it turns out that even before the bill passed the House, he told his staff to start drawing up a plan for capital injections. Fearing Congress’s reaction, he didn’t tell the Hill about his change of heart.

Now, he’s shifted gears again, and is directing Treasury to use the money to force bank acquisitions. Sneaking in the tax break isn’t exactly confidence-inspiring, either.”

What tax breaks is the Times talking about? The article explains:

A new tax break [pushed by Treasury], worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”

Paulson insisted on a “get out of jail card” in the Tarp bill. Specifically, the bill includes the following provision:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Whether or not that would shield Paulson from the false statements he made before the bill was passed – e.g. why Tarp was needed, and what would happen if it didn’t pass – is a separate question.

Moreover, Tarp is just one of Paulson’s shenanigans as Treasury Secretary. And Paulson’s acts as head of Goldman Sachs are beyond the scope of this essay.

There is a growing awareness, a sickening realization out there that fraud is being committed in our courtrooms…just how pervasive the fraud is remains an open question….but I predict the real truth is not going to be pretty.  Some judges are taking the initiative and dismissing cases when they uncover the fraud.  So what kind of fraud rises to the level that a case should be dismissed?

The requisite fraud on the court occurs where “it can be
demonstrated, clearly and convincingly, that a party has
sentiently set in motion some unconscionable scheme
calculated to interfere with the judicial system’s ability
impartially to adjudicate a matter by improperly influencing
the trier of fact or unfairly hampering the presentation of the
opposing party’s claim or defense.” Aoude v. Mobil Oil Corp.,
892 F.2d 1115, 1118 (1st Cir.1989).

Check out this opinion:

5th DCA Fraud on The Court

And this beautiful piece of literature:

ordermersslammed

Along with a nice collection of cases from across the state finding that shows a pattern of our judges finally having enough of all this (hat tip to Foreclosure Hamlet):

Click here for beautiful reads from across the state

What’s my best example of a fraud that so permeates the proceedings?  Well for starters and the easiest, how about fraud in the service of process.  The service itself and the billing, all of which is incorporated into the Final Judgment.  That certainly permeates the whole of the proceedings.  Our judges need to read all of these opinions and start making them part of the practice.

Matt Weidner

I hope that you enjoy the cheap foreign-made plastic trinkets that you will be exchanging with your family and friends this holiday season, because they are literally destroying the U.S. economy.  As part of the new “one world economy” that both Democrats and Republicans insist is so good for us, millions of good paying middle class jobs have been shipped out of America.  Do you need a job?  Are you wondering where all the good jobs went?  Well, the next time you are out just walk into a store and start looking at the product labels.  Most of the things that are sold in our stores are now made out of the country.  So if you need a good paying job to support your family that is just too bad – you have been merged into a global labor pool where you must compete for jobs with people on the other side of the globe willing to work for less than a tenth of what you usually make.  Welcome to the “one world economy” where big global corporations make a fortune exploiting slave labor on the other side of the world while “overly expensive American workers” get dumped out on the street.

Are you in favor of a redistribution of wealth?  Most of the time when the phrase “redistribution of wealth” is brought up, conservatives and libertarians visibly cringe – as they should.  But did you know that right now the greatest redistribution of wealth in the history of the world is taking place and our politicians are doing nothing about it?

For a moment, imagine a giant map of the world.  On that giant map, put a huge pile of money on the United States, and also put a huge pile of money on China and on the OPEC nations.  Now imagine a big hand coming along once a month that takes tens of billions of dollars out of the U.S. pile and puts it into the piles of China and the OPEC nations.

As this continues month after month after month, what is eventually going to happen?

The U.S. pile of money is going to get far smaller and the other piles of money are going to get much, much larger.

And that is exactly what is happening in our world today.

Back in 1985, the U.S. trade deficit with China was 6 million dollars for the entire year – not really anything to worry about  it.

Well, let’s fast forward to 2010.  For the month of August alone, the trade deficit with China was more than 28 billion (that’s billion with a “b”) dollars.

In other words, the U.S. trade deficit with China in August was more than 4,600 times larger than the U.S. trade deficit with China was for the entire year of 1985.

My, how the world has changed in 25 years.

Oh, but doesn’t China “invest” some of that money they are getting from us back into our country?

Well yeah, our top officials regularly go over there to beg them to lend us more money.  Now we owe China close to a trillion dollars.  We also owe the major oil exporting nations of the Middle East massive amounts of money.

Is this a good idea?  Let us keep in mind the ancient principle that the borrower always ends up the servant of the lender.

Is it wise for the United States to become enslaved to China and to the oil exporters of the Middle East?

Is that any way to run an economy?  Is that any way to run a country?

All over the United States factories are closing down.  If you go to shopping centers in many areas of America you would think that the hottest new store was called “Space Available”.

Since the year 2000, we have lost 10% of our middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

What kind of progress is that?

“But oh”, the supporters of the one world economy will declare, “the cheap goods, the cheap goods!”

Yes, I hope you enjoy paying ten percent less for your plastic trinkets.  But you will also support American workers one way or another.  Either you will provide them with good paying jobs, or you will pay for their food stamps and their unemployment checks.

One out of every six Americans is now enrolled in a federal anti-poverty program.  As 2007 began, 26 million Americans were on food stamps, but now 42 million Americans are on food stamps and that number keeps rising every single month.

Can anyone out there please explain how the “one world economy” is supposed to be good for us when 42 million Americans cannot even feed themselves?

Allowing our country to be deindustrialized just so that we can consume more cheap goods from China is like tearing down pieces of your house to keep your fire going.  In the end, you won’t have much of a house left.

Whatever your opinion of Donald Trump is, this next video is worth watching.  Trump certainly should not run for president, but as a savvy businessman he definitely understands what China is doing to us….

It is time for the American people to wake up.

We are being taken advantage of.

The one world economy is going to keep destroying the U.S. middle class.  There is no way that American workers can compete with slave labor on the other side of the globe.  It is impossible.

In fact, just about every kind of job imaginable is being shipped to places where labor is cheaper.  Even engineering and computer programming jobs are being offshored and outsourced.

The United States is even being slaughtered in high-tech industries.  Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

According to one recent study, China could become the global leader in patent filings by next year.

The United States has become a bloated, slovenly nation that consumes massive amounts of wealth but that produces relatively little.

With each passing year, we make fewer things inside the United States….

*The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

*Since 2001, over 42,000 U.S. factories have closed down for good.

*As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time that less than 12 million Americans were employed in manufacturing was in 1941.

*Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

*In 2010, the number one U.S. export to China is “scrap and trash”.

Oh, but won’t “getting more education” solve all of our problems and get the American people back to work?

No.

The truth is that tens of millions of Americans have a “higher education” that is not doing them any good today.

In his article entitled “The Great College-Degree Scam“, Richard Vedder explains that a large percentage of U.S. college graduates are working in jobs that have not historically required college degrees….

Here it is:  approximately 60 percent of the increase in the number of college graduates from 1992 to 2008 worked in jobs that the BLS considers relatively low skilled—occupations where many participants have only high school diplomas and often even less.

Ouch.

Later on in his article, Vedder notes that the number of college graduates that are waiting tables or that are working as cashiers is absolutely exploding….

In 1992 119,000 waiters and waitresses were college degree holders. By 2008, this number had more than doubled to 318,000. While the total number of waiters and waitresses grew by about 1 million during this period, 20% of all new jobs in this occupation were filled by college graduates. Take cashiers as well. While 132,000 cashiers possessed college degrees in 1992, by 2008, 365,000 cashiers were college graduates. As with waiters and waitresses, 20% of new cashiers since 1992 are college graduates.

So do you still think that the “one world economy” is a great idea?

Well, you might want to practice the following two phrases….

#1 “Would you like fries with that?”

#2 “Welcome to Wal-Mart!”

Our economy is turning into a low-wage service economy because we don’t make much of anything in the United States anymore.

So if you need a good job, I am afraid that the joke is on you.

The good jobs are being shipped out of the United States as part of the new one world economy, and millions of unemployed Americans have been left to fight over the low paying service jobs that remain.

So if you are flipping burgers or stocking shelves for a big multinational retail chain, perhaps you should consider yourself to be fortunate.  At least you still have a job.  There are millions of desperate, hungry-eyed Americans that would take your job in a second.

And you know what?  Things are only going to get worse.

The Economic Collapse

In this video, Chairman Ted Kaufman of the TARP Congressional Oversight Panel introduces the COP December report “A Review of Treasury’s Foreclosure Prevention Programs.”  The full report is available online here.

After two years of such reports, all of which have been varying levels of fail, we are no further along in the process of solving this crisis.  Let us not forget that two years after the beginning of the Savings and Loan Crisis, we have more than 1,000 convictions for fraud.  These convictions weren’t just bit players, they were the executives, presidents, vice presidents and board members.

So far, this time, we have nothing.  It certainly isn’t due to lack of evidence of the massive fraud.  On FedUpUSA alone, we have the official expert testimony of William K. Black, Elizabeth Warren, Janet Tavakoli, Chris Peterson and Adam J. Levitin, just to name a few.  Across the country there have been numerous court rulings at the Appellate level and above which confirm the enormous fraud.

So we are left to ask:  Why have we not STOPPED THE LOOTING AND STARTED THE PROSECUTING?

Discussion (registration required to post)

While the U.S. economy may be in deleveraging mode right now, it’s always good to recognize just how far we’ve come as a debtor nation. This chart from Jeffrey Gundlach at DoubleLine makes that abundantly clear.

In terms of domestic credit market debt, the U.S. surpassed the pre-Great Depression heights by some point in the mid-noughties and just kept growing. In 2009, it was all the way up to 353% of GDP. And while it may have fallen since, due to defaults and foreclosures, It still is likely above the Great Depression highs.

Seems the deleveraging process will have a long way to go.

Check out more of Jeff Gundlach’s presentation here >

From DoubleLine (via Zero Hedge):