FedUpUSA

Archive for February 3rd, 2011

When law offices, consumer advocates and the media flooded government offices with irrefutable evidence of civil and criminal violations found in thousands upon thousands of foreclosure cases, the willful blindness of many state attorneys general could no longer ignore what many have been screaming about since the 1980′s S&L crisis:  Most foreclosures are a theft by deception scheme that contain evidence of criminal acts that include tax fraud, insurance fraud, securities fraud, mortgage fraud, and other acts considered state jail felonies.

Heading up the 50-state AG investigation is Iowa AG Tom Miller (send him a pre-printed letter here), who pledged during a December 14 meeting: “We Will Put People in Jail” for foreclosure fraud.  Less than three weeks later, Mr. Miller’s growl now whimpers: “Our focus is to reform the servicing process and that’s inherently civil, not criminal”.   Stealing homes and equity (money) is criminal — just ask a banker or a little kid.  Besides, the FTC tried the “reform” process with Fairbanks Capital and EMC Mortgage, and both were nothing short of insulting, as both continue to breach the FTC settlement daily without penalty.  Miller’s latest comment is raising public concern that the attorneys general have decided the criminal elements are not strong enough.  

Try telling that to the Texas woman currently serving 99 years in prison for making false statements to obtain property; one of the many criminal charges that should haunt anyone who has engaged in wrongful foreclosures – or is attempting to foreclose.  Especially when you consider foreclosure-mills and foreclosure factories make more false statements in the time it takes this woman to sprint to the other side of her jail cell.  One Texas man is serving 25 years for committing mortgage fraud on a single street.  Sanctions, disbarments or indictments against corrupted lawyers and judges would quickly restore a substantial amount of faith in our judicial process. 

Making false statements or filing fraudulent, forged, fabricated or counterfeit evidence in our courts and land records to obtain void judgments to take people’s homes and money under false pretenses is criminal.

Banks, lawyers and judges have turned Courts and Land Record offices into Crime Scenes

The evidence is everywhere.  Investigators will discover finding evidence to support criminal indictments will be as easy as shooting a worm in a test-tube.  MSFraud and other advocates can locate certifiable evidence in virtually any county courthouse and land record office nationwide, along with shocking cases laden with criminal evidence ripe for prosecution, if law enforcement would simply ask. 

A Great Opportunity for Good Men and Women to do Something

This foreclosure crisis simply could not have happened without the dereliction of duty by many of our judges.  Many of our gatekeepers blatantly disregarded the law and refused the evidence brought before them.  Most state AG’s and the DOJ remain reluctant to get involved in individual foreclosure cases, regardless of its evidence of crimes, so it was impressive when Ohio AG Richard Cordray filed an amicus brief in U.S. Bank v Renfro . Cordray understands that when notified of a crime against the public, Attorneys General have a duty “to prevent or halt the commission of an offense”.  Speaking of good men, Ohio’s former attorney general, Marc Dann, has put his boots on the ground to fight the foreclosure crimes in his state, and recently filed a class action against the foreclosure-mill Lerner, Sampson & Rothfuss.  In addition, task forces have been directed by President Obama’s Executive Order 13519: …

and the public is increasingly demanding these perpetrators be prosecuted and put in prison, but we need the help of only good men and women.

The Foreclosure Crisis was Remedied more than a Century ago

Imagine the time and tax dollars being wasted searching for after-the-fact solutions to our current foreclosure crisis, when the  original remedy has remained in law books for more than a century, and upheld in last month’s landmark ruling from the Massachusetts Supreme Court, which cited one case from 1871.  Many wonder if the high court opinion will morph its way into courtrooms across the country, or will local courts and law enforcement continue using the same type of strong-arm justice Americans would demand from the likes of Pee-Wee Herman.

Laws specifically enacted to protect one’s property from unlawful seizure have remained constant, and some judges have even stated: If you plan to take  someone’s property, you will not cross the threshold unless you possess the legal right to do so.  But unfortunately, finding a respectable or honorable judge to enforce basic property law remains elusive in most foreclosure courtrooms.  For instance, in Collin County, Texas, local court rule 4.1 is suitable for carving into every foreclosure-court wall, for with authority it commands:  

Would fraudulent foreclosures dare take place in a county brandishing its “Don’t Mess With Texas” laws?  Yes, by the thousands.  Judges refuse to enforce their own local rule and local law enforcement is evicting homeowners without a court order.  And just how many of those foreclosures may be unlawful?  According to the Texas Foreclosure Task Force  –  90%.  That’s 9 out of 10!  Would we even have a foreclosure crisis if judges had always forced these pretender lenders to prove they had the legal capacity to foreclose?  Probably not.

The (pre-crisis) 2007 certified transcript from the Texas Supreme Court “MEETING OF THE TASK FORCE ON JUDICIAL FORECLOSURE RULES” attended by judges, lawyers, title companies, Mortgage Bankers Assoc. and others, captured testimony from foreclosure-mill Barrett-Burke, who stated that finding [a document] that grants the right to foreclose “is an impossibility in 90 percent of the cases”.  Their remedy for a missing document?  “They create one”, and “we all kinda’ turn a blind-eye to it”.  Perhaps a misprison of felony charge would clean that up.  

86 the phrase “Loan-Modification” 

Mr. Miller’s focus on servicing reform couldn’t possibly include loan modifications now that people are acutely aware that pretender-modifiers cannot modify a loan they do not own.  Those are the facts and it is that simple.  Loan modification programs proved to be the spam in the scam.  Many who thought they won a loan mod, found their payments actually increased, or learned modification was nothing more than a “Swindler’s Dream”; a nefarious opportunity to profit by duping borrowers into signing documents that ultimately convert their unsecured and sometimes uncollectable debt – into a secured and collectable debt.  In other words, the entity who tried to swindle you out of your home but couldn’t, because they didn’t own your home, just got your signature and can now foreclose on a home it paid nothing for. The government’s modification fiasco also funneled additional taxpayer dollars into the pockets of the exact same racketeers who caused the foreclosure crisis, and whose familiar mug shots have graced the Swindler’s List for years.  

Law enforcement must read Professor Wray’s article “Nightmare on Wall Street“, as it is difficult to quote less than the entire article. The malfeasance, misfeasance, nonfeasance and criminal acts are everywhere.  

It is unsettling to realize that for more than a decade, the majority of judges and law enforcement turned a blind-eye to the biggest financial crime in history until it had already incinerated the livelihood of millions.   If we continue to ignore law and truth, and not embrace this best opportunity to restore faith, trust, honor and integrity in our laws, then we are doomed to be forever remembered and ridiculed as the generation who paid trillions to the criminals after they caused the crisis, emptied retirement funds, and stole millions of homes the banks didn’t even own.  

     Call your state AG today and demand they the criminal side of foreclosure. 

MSFraud

STOP THE LOOTING & START PROSECUTING!

Some (Like Nutting) Really Are Nuts

From Marketwatch:

As much as he might like to take credit for the march of democracy, Bernanke wouldnt do it when he was asked about it on Thursday. He said higher prices reflect strong global demand for commodities due to high growth rates in the emerging economies, not to anything the Fed is doing.

Right.  This is why the following charts are what they are:

Cotton:

Wheat:

Sugar:

Corn:

We can keep going, but I think you get the point.  When did all of these charts start to move like this?

Right around the time that Bernanke started chattering about QE2.

High “growth rates” in emerging markets started….. when? 

Remember, the global economy allegedly came out of recession more than a year earlier, in 2009, and in fact China posted an 8.7% full-year 2009 growth rate, including the first two quarters – their 4th quarter figure from 09 was 10.7%.

So why did the price ramp not start until more than a year later, when QE2 was talked about?

Kudlow and other critics of the Fed are confused. They think that because many commodities are priced in U.S. dollars that means that any price movements can be traced back to U.S. policies. But the fact that oil and other commodities are priced in dollars is irrelevant in a world of floating exchange rates.

It is?

The Egyptian Pound (EGP) has been pegged to the dollar on an effective basis since 2005.

Their compound inflation rate over the last three years is 45%. 

That is, the cost of living has risen 45%.

Their per-capita GDP is 1/17th of ours, and hasn’t materially expanded during that time.

Our per-capita GDP is $47,000, which is quite close to median household income (right near $50k.) 

Their per-capita GDP is $2,700 (both from the CIA World Factbook.)

Would you like to run the numbers on what a 45% increase in the CPI would do to someone living here with a $2,700 per-capita domestic output (which likely closely approximates household income there too)? 

That person would starve…. and maybe riot, eh?

Just because it costs more dollars to buy a barrel of oil or a bushel of wheat doesnt mean that it will also cost more euros, or Egyptian pounds, or Chinese yuan to buy that barrel or bushel. Its the exchange rate that matters, not the level of the federal funds rate.

The Egyptian Pound is pegged to the dollar. 

You can argue that it shouldn’t be, but right now it is and has been on an effective basis since ’05.

Bernanke 0, everyone else who has pointed out the facts (that you refuse to look at) 1.

Before blowing smoke out one’s butt, one should check the facts, especially when they’re right under your nose.

The Market-Ticker

In a shocking new interview, Donald Trump has gone farther than he ever has before in discussing a potential economic collapse in America.  Using phrases such as “you’re going to pay $25 for a loaf of bread pretty soon” and “we could end up being another Egypt”, Trump explained to Newsmax that he is incredibly concerned about the direction our economy is headed.  Whatever you may think of Donald Trump on a personal level, it is undeniable that he has been extremely successful in business.  As one of the most prominent businessmen in America, he is absolutely horrified about what is happening to this nation.  In fact, he is so disturbed about the direction that this country is heading that he is seriously considering running for president in 2012.  But whether he decides to run in 2012 or not, what Trump is now saying about the U.S. economy should be a huge wake up call for all of us.

Trump says that the U.S. government is broke, that all of our jobs are being shipped overseas, that other nations are heavily taking advantage of us and that the value of the U.S. dollar is being destroyed.  The following interview with Trump was originally posted on Newsmax and it is really worth watching….

Now, you may or may not think much of Donald Trump as a politician, but when a businessman of his caliber starts using apocalyptic language to describe where the U.S. economy is headed perhaps we should all pay attention.

The following are 12 key quotes that were pulled out of Trump’s new interview along with some facts and statistics that show that what Trump is saying is really happening.

#1 “If oil prices are allowed to inflate and keep inflating, if the dollar keeps going down in value, I think there’s a very distinct possibility that things could get worse.”

Donald Trump is exactly right – we are headed for big trouble if we continue to allow the Federal Reserve to pump hundreds of billions of new dollars into the system.  As I have written about previously, all of this new money will give us the illusion of short-term economic growth and it will pump up the stock market, but in the end all of the inflation the new money is gong to cause is going to be very painful.  Just look at how rapidly M1 has been skyrocketing over the last couple of years.  Is there any way that we are going to be able to avoid paying a very serious price for all of this reckless money printing?….

Already all of this money printing has had a very serious affect on world financial markets.  The price of agricultural commodities is skyrocketing and the price of oil has almost reached $100 a barrel once again.  The last time that the price of oil soared above $100 a barrel was in the early part of 2008, and we all remember the horrific financial collapse that followed in the fall of 2008.

#2 “….you’re going to pay $25 for a loaf of bread pretty soon. Look at what’s happening with our food prices. They’re going through the roof. We could end up being another Egypt. You could have riots in our streets also.”

The price of corn has risen 88 percent over the past year and the price of wheat has soared a whopping 114 percent over the past year.  Let’s hope that we don’t have to pay $25 for a loaf of bread in the United States any time soon, but in some areas of the world that is what it now feels like.

Approximately 3 billion people in the world today live on the equivalent of $2 a day or less, and most of that money ends up getting spent on food.  When food prices go up 10 or 20 percent in deeply impoverished areas of the globe, suddenly the lives of millions are threatened.  The riots that we have seen in Egypt, Algeria, Tunisia and other nations recently were not entirely caused by rising food prices, but they were certainly a big factor.

#3 “I think gold will go up as long as people don’t have confidence in our president and our country. And they don’t have confidence in our president.”

Investors run to gold and other precious metals when they don’t feel secure.  We saw that happen a lot in 2010.  As confidence in the paper currencies and the financial systems of the world has rapidly diminished, precious metals have become increasingly attractive.

In fact, the price of gold has doubled since the beginning of the economic downturn in 2007.  As the global financial situation continues to become more unstable, the demand for precious metals is likely only going to become more intense.

#4 “The banks have really let us down. Number one, they did some bad things and caused some bad problems. Number two, if you have something that you want to buy, like a house, they’re generally not there for you.”

Banks were given massive bailouts with the understanding that they would open up the vaults and start lending money to average Americans again.

Well, that has not happened.

In particular, it has become much, much harder to get a mortgage in the United States today.  Not that the big banks didn’t need to make changes to their lending practices, but things have gotten so tight now that it is choking the real estate market to death.

#5 “I see $3.50 for a gallon of gas for cars, and cars are lined up trying to get it and it’s $3.50. It’s a shame, a ridiculous shame.”

Our lack of a cohesive energy policy is a national disgrace.  There is no way in the world that a gallon of gas should be $3.50 a gallon.

The U.S. has massive reserves of oil and natural gas that it should be using.  In addition, the lack of progress on developing alternative energy sources in light of our sickening dependence on foreign oil is very puzzling.  We should be very far along towards solving our energy problems by this point.

Meanwhile, we keep pouring billions into the pockets of foreign oil barons every single month.  Unfortunately, Trump was exactly correct in the interview – if something is not done the price of gas is going to keep going higher.

#6 “I think the biggest threat is that our jobs are being stolen by other countries. We’re not going to have any jobs here pretty soon.”

Donal Trump is one of the few prominent leaders that is openly speaking the truth about the predatory economic practices of some of our “trading partners”.  Most of our politicians have just kept endlessly promising us that free trade is “good for us” even as tens of thousands of factories and millions upon millions of jobs have been shipped overseas.

Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

Yes, computers and robots have replaced a lot of manual labor today, but technology does not account for most of the decline we have seen in manufacturing.

n 1959, manufacturing represented 28 percent of all U.S. economic output.  In 2008, it represented only 11.5 percent.  Meanwhile, manufacturing in the “developing world” has absolutely exploded.

#7 “We’re like a whipping post for other countries. We are standing there and just being beaten by South Korea, by Mexico, by China, by India.”

Most Americans have absolutely no idea how lopsided many of our “trade agreements” actually are.  Other nations openly manipulate their currencies in order to keep their exports dirt cheap and we allow it.  Other nations openly subsidize their domestic industries that are directly competing with businesses in the United States and we don’t complain.  Other nations make it incredibly difficult for American companies to do business in their countries while we allow foreign corporations to come on in and do pretty much whatever they want here.

Then there are certain nations (such as China) that brazenly rip off trade secrets from foreign corporations time after time after time and never get penalized for it.

Meanwhile, our economy continues to bleed jobs at a staggering pace.  The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.

Fortunately, more Americans than ever seem to be waking up and are realizing that globalism is causing many of these problems.  A NBC News/Wall Street Journal poll conducted last year discovered that 69 percent of Americans now believe that free trade agreements have cost America jobs.

#8 “All of our jobs are going to China. We’re rebuilding China and other places.”

China is doing great.  China is now the number one producer in the world of wind and solar power.  They now possess the fastest supercomputer on the entire globe.  China also now has the world’s fastest train and the world’s biggest high-speed rail network.

Most Americans don’t realize that China is literally kicking the crap out of us.

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.

Every single month we buy about 4 times as much stuff from them as they buy from us.  Our trade deficit with China has ballooned to enormous proportions.  In fact, the U.S. trade deficit with China during this past August was more than 4,600 times larger than the U.S. trade deficit with China was for the entire year of 1985.

So when Donald Trump says that we are rebuilding China he is not joking around.

Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

Yes, that is how serious things have become.

#9 “We are a laughingstock throughout the world.”

Donald Trump has said on several occasions that his friends and business partners in China just laugh and laugh at us.  They can’t even believe what they are getting away with.

We have become an incompetent giant that is the butt of all the jokes.

According to Stanford University economics professor Ed Lazear, if the U.S. economy and the Chinese economy continue to grow at current rates, the average Chinese citizen will be wealthier than the average American citizen in just 30 years.

Our formerly great industrial cities are slowly becoming ghost towns.  The number of long-term unemployed Americans is at an all-time high.  Tens of millions of Americans can’t even survive without government assistance anymore.  The number of Americans on food stamps set a new all-time record every single month during 2010, and now well over 43 million Americans are enrolled in the program.

We really have become a joke.

#10 “The federal government has no money.”

Unfortunately, our federal government has continued to borrow and spend like there is no tomorrow.

According to the Congressional Budget Office, the U.S. government will have the biggest budget deficit ever recorded (approximately 1.5 trillion dollars) this year.

So much for fiscal discipline, eh?

It is being projected that the U.S. national debt will increase by $150,000 per U.S. household between 2009 and 2021.

Do you have an extra $150,000 to contribute for your share?

By 2015 our national debt will be somewhere in the neighborhood of 20 trillion dollars.

It is the biggest mountain of debt in the history of the world by far, and it is the gift that we are going to pass down to future generations of Americans.

If there are any future generations of Americans.

#11 “I hate what is happening to this country.”

We should all hate what is happening to this country.  Our economic guts are being ripped out, we are being abused by the rest of the world, America’s infrastructure is being sold off piece by piece, our federal government is drowning in debt, our state governments are drowning in debt and our local governments are drowning in debt.

The only way we can even keep going is to run around to the rest of the world and beg them to keep lending us more money.

The mainstream media keeps proclaiming that we are the greatest economy on earth, but the truth is that we are being transformed into a pathetic loser and our politicians are just standing there with their hands in their pockets letting it happen.

All red-blooded Americans should be horrified by what is happening to this nation.  We have been betrayed by corrupt and incompetent leaders.  As a nation, we have become fat, lazy and stupid.

Hopefully what Donald Trump and others are saying about a coming economic collapse will serve as a huge wake up call and the sleeping giant will arise once again.

If the sleeping giant does not arise, we are in a massive amount of trouble, because right now the road we are on is leading to the biggest economic collapse the world has ever seen.

The Economic Collapse

Bernanke was yapping away with reporters today, bragging about the “expected” action in the stock market while dissing inflation concerns and ignoring Fed expectations that did not happen such as falling treasury yields or improvements in housing.

Please consider Bernanke dismisses inflation concerns, says unemployment to take several years to get back on track

The economy is poised to grow more rapidly this year, Federal Reserve Chairman Ben S. Bernanke said Thursday, dismissing fears that rising fuel prices will trigger broad-based inflation. But he stressed that it will still take several years before the unemployment rate comes down to normal levels.

Speaking at the National Press Club just before a rare question-and-answer period with journalists, Bernanke gave a mixed assessment of the nation’s economic prospects, according to a prepared text of his remarks. He made clear that the economy cannot get back on track until the job market improves.

Bernanke maintained his view that the Fed’s program of buying $600 billion in Treasurys to try to prop up growth, announced in November, is working: Stock prices have risen; the stock market has become less jumpy; companies are able to borrow money more cheaply; and inflation expectations have risen a bit. All were expected results, he said.

While Bernanke repeated recent comments that he and his Fed colleagues will review the Treasury purchase program regularly and adjust it as needed, he gave no hint that the Fed would either stop the program before its scheduled June end date or expand it beyond that time.

As he has in the past, the Fed chairman again warned that the United States is on an unsustainable fiscal course.

Quoting the economist Herbert Stein that “if something cannot go on forever, it will stop,” Bernanke said that the federal government must stabilize its budget. The question, he said, “is whether these adjustment will take place through a … process that weighs priorities and gives people adequate time to adjust to changes in government programs or tax policies, or whether [they] will be a rapid and painful response to a looming or actual fiscal crisis.”

I suggest Congress should listen to one of the few things Bernanke has ever said that made any sense. The correct Congressional response is to take Bernanke at his word and not raise the debt ceiling.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

You first saw this video in November 2010 (it is also pinned at the top page of FedUpUSA).  The events worldwide, especially in Egypt, call for an update with the new price change numbers, which are even more horrific than before, along with the continuing consequences.

The Market-Ticker

The Fed’s policies are pricing basic morning staples out of reach — and the results may come back to haunt even those who don’t notice.

“Poverty wants some things, luxury many things, avarice all things.”-Benjamin Franklin

Yesterday, one of our young Jedi analysts at Hedgeye, Kevin Kaiser, sent me a highlight from The Grocer (an industry trade rag) that inflating food prices are making ordinary breakfast items like orange and apple juice a “luxury.”

Now a Wall Street analyst at a sell side investment bank would find a way to dress this data point up with a pig’s lipstick and call it an “affordable luxury.” Someone working for Federal Reserve Chief Ben Bernanke probably calls something like breakfast “non-core” or “free.” But we simpleton, non-recipients of government bailout moneys, just call it what it is – inflation.

Six months ago we didn’t have global inflation accelerating. We had a US dollar index that wasn’t being debauched (7.7% higher at $83), a CRB Commodities Index (19 commodity basket) that was 30% lower in price, and we didn’t have Quantitative Guessing Part Deux either. Back then, free markets pricing in a strong U.S. dollar and low inflation was a bullish signal to buy U.S. equities. Today, the  latest big government intervention scheme is debauching the dollar and perpetuating higher inflation. Back then, I dropped my cash position to 46%. Today, I’ve raised it to 67%. (And understand that I’m not one of these perma-bulls who needs to be invested trying to get back to a 2007 high-water mark gone bad.)

Yesterday, we saw a new high-water mark established in the real-world inflation reading. With the U.S. dollar getting burned at the stake (down 1% on the day, making a move towards a 6-month low), the CRB Commodities Index was hitting a freshly squeezed 6-month high. All luxury things considered, if you are one of the 44 milllion Americans who lives on food stamps, how do you like them apples?

Now setting aside the inconvenient truth that there’s never been a global economic powerhouse that has devalued its way to prosperity, let’s give the Bernanke a little something to bring to his dance with America’s new chair of the US Financial Services Sub-Committee on Domestic Monetary Policy, Ron Paul, on February 9th. Here are the 6-month price percentage moves in some of the things people need to live with:

• Cotton = +125.7%
• Sugar = +82.6%
• Corn = +59.0%
• Coffee = +41.4%
• Rice = +40.5%
• Oats = +36.6%
• Copper = +36.1%
• Lumber = +33.8%
• Oil = +25.1%

Yeah, I guess for the sake of professional policy makers in DC who get dinner for free and a car service to work, I should stop there. To make the Top 10 things that may or may not be considered “luxury things,” you really need to have inflated on the order of 25% or more. Pork bellies are only up 10.7% in the last 6 months – so go have yourself some powdered Keynesian Kool-Aid with some sausage links for lunch and like it.

Over that same 6-month period the dollar has droppred almost 6% and now has an inverse correlation to the price of rice and wheat.

So where does that leave the almighty American Consumer? That’s easy, pull up some charts of U.S. consumer stocks – and pull up some big ones like Procter & Gamble (PG), McDonalds (MCD), and Target (TGT).

Sure, since most people in this business read points of view in terms of how it directly addresses their personal positioning, I’m sure you can find me some US Consumer stocks that used to look like Coach (COH) — before the man-purse idea didn’t take  CEO Lew Frankfort to the moon — but overall, Consumer Staples (XLP) and Consumer Discretionary (XLY) are the 2 worst sectors in the entire US stock market all of a sudden for a reason, down 1.84% and 0.97% in the last 3 weeks of trading, respectively.

On a more positive note, Hosni Mubarak turned on the internet. So now all of our Egyptian friends can start tweeting Hedgeye’s 6-month table of real-world inflation to their friends again. Social networking tools are going to continue to revolutionize the transparency and accountability standards that the people of this world hold their governments to. That’s a luxury thing of personal liberty that I can believe in.

CNNMoney