Archive for September 29th, 2011
Time to pull your deposits and close your accounts folks.
Bank of America To Charge $5 Monthly Fee For Debit Card Usage $BAC @BofA_News – DJ
From CNBC Breaking Tweets.
Now why would you pay $5/month (that’s $60/year!) just to use your debit card? Uh, no.
Credit union folks.
Better service, better price, kill the TBTF financial rapists.
The entitlement mindset includes much more than government benefits programs.
The word entitlement commonly refers to government benefits to which we are entitled as taxpayers and/or citizens/residents.But there are layers of entitlement in the American psyche far beyond government benefits programs.
Let’s start with the government benefits entitlements. The programs most people refer to as entitlements are Social Security and Medicare, which taxpayers pay for with payroll taxes (even if the money just goes into one giant Federal pot).
Beyond these “I paid into them” entitlements are the “welfare” entitlements of Medicaid, Section 8 Housing, SNAP/food stamps, etc., which are paid out of general tax revenues and which are available to anyone who qualifies, regardless of their status as taxpayers.
Buried within Social Security is another large entitlement program for the disabled and dependents (widows and orphans).
Veterans are entitled to benefits as a result of their military service, as are their families.
Employers pay for other employment-related entitlements: Federal and state unemployment, workers compensation and disability insurance, etc.
The entitlement mindset is thus firmly established in the American psyche.If we experience bad luck and/or the negative consequences of poor choices, we have been trained to expect the government at some level to alleviate our suffering, cut us a check or otherwise address our difficulties.
The poisonous problem with the entitlement mindset is intrinsic to human nature:once we “deserve” something, then our minds fill with resentment and greed, and we focus obsessively on creating multiple rationalizations for why we “deserve our fair share.”
Eventually this leads to a government that has been reduced to a competitive stripmining operation in which the spoils are divided up amongst the most politically powerful Elites: in other words, the government we now have.
The entitlement mindset atrophies self-reliance, adaptability and flexibility, all key survival traits. If the government will “fix” our health, we no longer feel responsible in the way one does if there is limited government/employer-provided healthcare. If we expect our Social Security retirement regardless of what other conditions may be affecting the global economy or our nation, then we stop being responsible for managing our financial affairs in the same way as one does when there is no “guaranteed” retirement entitlement.
The question isn’t whether entitlements are a “right” or not, the question is their sustainability now that the demographic, financial and energy foundations of those promises has eroded. Clearly, the government has a role in providing for public health and safety, but to claim that entitling every citizen to hundreds of thousands of dollars in healthcare is “public health” spending is absurd.
Based on projections of high-birthrates/cheap-oil/high-growth in the 1940s – 1960s, entitlement programs were promised basically forever, with no recognition that conditions might change. Now conditions have changed, demographically, financially and in terms of energy input costs.
We might usefully think of the government as a ship in a sea governed by forces too planetary to influence: the tides, currents, winds, etc. Entitlements are essentially a claim that the small ship of government “should” be able to bend the sea to its will, regardless of what tidal forces, winds and currents are at work.
we can claim it’s our “right” not to sink, but gravity and the ocean do not respond to our claims of permanent “rights.”
But these direct government entitlements only scratch the surface of our sense of entitlement.We don’t just expect healthcare and retirement; if we’re honest with ourselves, don’t we also expect these other entitlements?
1. Cheap and abundant fuels and energy. We can debate whether this constitutes an implicit “right” or an entitlement, but the point is that Americans expect unlimited fuels and energy at low cost, and if cheap, abundant energy vanishes then they will demand “somebody make this right,” with the “somebody” presumably in government and certainly not the individual American or his community.
2. Ever-more government services and benefits, i.e. the entitlement mindset knows no bounds.
3. Full employment and bountiful employment opportunities. If we can’t find a job or create value that someone is willing to pay/trade for, then the government should create jobs out of thin air.
There are only two ways to fund “make-work” jobs: either take more money from existing wage-earners via taxes and redistribute the funds to potentially unproductive uses, or print/borrow the money into existence. Both have costs in terms of the productivity surplus of the entire nation and in the potential to destabilize the financial foundation of the economy.
4. An education suited to the demands of a global economy, etc., as opposed to providing the basic skills of learning, so the citizens can educate themselves throughout life. This distinction is lost in the endless debates over education, but in fast-changing environments and times, the only real value of any education is to learn how to learn. Though it seems “impossible” to the Status Quo educator, the world we are preparing students for–one dependent on consumer spending, cheap oil, globalization, ever-expanding government and healthcare costs, exponentially increasing debt to pay for everything, etc.–may not exist in 5 or 10 years.
5. An upper-middle class lifestyle for everyone who does what the Status Quo expects: get a graduate-level university degree, sacrifice for the corporation, remain politically silent/passive, etc. The idea that toeing the line will not result in a big-bucks secure profession/career is somehow a violation of the social/financial contract of Corporate America–once again, a right or an entitlement that is implicit in the American psyche.
6. Cheap and plentiful food. Once again, if food costs actually rose to “percentage of income spent on food” levels found in developing-world nations, Americans would undoubtedly demand that the “government do something.” Once again, this is like demanding the ship’s crew change the winds and tides. As oil prices rise, food costs will rise. There is no way out of this, as the primary input of agricultural costs is oil and petroleum-based fertilizers, chemicals, transport, etc. extremes of weather can ruin crops regardless of policy.
7. That the U.S. should be able to influence other nations to act in what we perceive as our best interests. The idea that we cannot persuade/force others to do what benefits us is anathema to the general entitlement mindset, e.g. “what’s our oil doing under their sand?”
There are undoubtedly many more layers of implicit entitlements, and the analogy that comes to mind is a worm-riddled, leaky wooden-hulled sailing ship approaching a coral reef. The only way into the relative calm of the lagoon beyond is to lighten the ship enough to pass over the reef, or the sand bar on the other side of the lagoon.
If the ship sails on fully loaded with the heavy baggage of the entitlement mindset, the reef will either rip out its bottom or the ship will be wedged on the sand bar, where the waves will break it apart.
In other words, the destruction of the ship is guaranteed in either scenario. The only possible way to save the ship and its passengers/crew is to throw most of the inessential baggage overboard. Everything that the passengers “can’t live without” will doom them if it isn’t jettisoned, and soon. Once the hull has been shredded by the coral reef, or the hull is stuck on the sand bar, it will be too late: jettisoning all the financial “rights,” entitlements and “essentials” will not save the ship or its crew/passengers.
The entitlement mindset is heavy baggage indeed, and the emotional content of the baggage– resentment, anger, and a debilitating focus on “what I deserve”–is toxic to the traits we will need in abundance to weather the decade ahead: flexibility, adaptability, open-mindedness, experimentation, community and self-reliance.
Charles Hugh Smith – Of Two Minds
Despite the growing Solyndra scandal, yesterday the Department of Energy approved $1 billion in new loans to green energy companies — including a $737 million loan guarantee to a company known as SolarReserve:
3/4 of a billion dollars. And who’s the #2 at one of the “investment partners”? None other than the brother in-law of Nancy Pelosi.
It sure pays well to be related to these crooks in DC, doesn’t it? Oh yeah, that’s your money they’re handing out, all the while telling us that we’re not paying enough in taxes.
Here is an excellent video on fiat currencies by my friend Dominic Frisby at Frisby’s Bulls and Bears.
Bear in mind we are in credit based economy, and credit markets can override the Fed’s ability to create inflation, assuming of course a definition of inflation that encompasses credit.
Please see Yes Virginia, U.S. Back in Deflation; Inflation Scare Ends; Hyperinflationists Wrong Twice Over for a discussion.
Mike “Mish” Shedlock
NEVADA ATTORNEY GENERAL (Catherine Cortez Masto) TO FILE CRIMINAL CHARGES AGAINST WELLS FARGO FOR FORGERY
“WE’VE GOT THEM COLD.”
EDITOR’S NOTE: We have all said what they did was criminal, now it is becoming official. And before you naysayers start complaining, let me point out that this has actually followed an orderly progression and you will see it many times over in the coming months.
- First we started with the deductive logic and investigation, and allegations by borrowers in court. They were not taken seriously until the number of such complaints reached a crescendo, but that is the way our system works.
- Then the regulators, who had turned a deaf ear to anyone writing a letter complaining about the servicing of their loan or the behavior of a pretender lender, turned themselves around and entered a slew of cease and desist, consent orders and those orders have teeth and can be used by borrowers in discovery and in their pleadings. The agency findings of misbehavior are presumptively correct.
- Now the justice system is getting involved, because building criminal cases takes a lot longer than civil cases or even administrative cases against the banks. Remember they have to prove the case beyond a reasonable doubt — not merely on innuendo or they “must have done it” or anything but that they did do it, they knew they did it and they did it with criminal intent.
Wells Fargo accused of forging loan documents
Wells Fargo Accused of Forging Loan DocumentsPosted: Sep. 22, 2011 | 2:02 a.m.
Updated: Sep. 22, 2011 | 8:27 a.m.A Las Vegas attorney who represents people facing foreclosure has accused Wells Fargo of forging loan documents. The allegation is the latest sign that efforts to hold mortgage lenders accountable are escalating in Nevada.In court papers filed this month in Clark County District Court, attorney Dave Crosby alleged bank employees committed forgery and fraud in making a $350,000 loan to a father of four who was unemployed at the time.“They forged signatures, they backdated documents,” Crosby said. “We’ve got them cold.”
Crosby said the bank has presented two deeds of trust for the same property. One bears the signature of Olivia A. Todd, who on Jan. 27, 2010, was identified as an assistant secretary with MERS, Inc., a mortgage servicer from the Phoenix area and a co-defendant in the lawsuit.
But on Feb. 16, 2010, Todd’s signature appears on a second deed of trust, where she is identified as the firm’s president. Both assignments were notarized as authentic, Crosby said in court papers.
Crosby made his allegations in a request to have a judge review three failed mediations between him and his clients, Ryan and Mical Henderson of Las Vegas, and lawyers with Wells Fargo, formerly Wells Fargo Home Mortgage.
Attempts to contact bank attorney Kevin Soderstrom were unsuccessful. Calls to Wells Fargo also went unreturned.
Nevada Foreclosure Mediation rules allow for a judicial review of failed mediations. In Clark County, District Judge Donald Mosley hears all such reviews.
The Legislature created the Foreclosure Mediation Program in 2009 to help thousands of troubled homeowners in the state, considered ground zero of the U.S. housing crisis, where tens of thousands of homes have been abandoned or foreclosed and a staggering 80 percent of homeowners owe significantly more than their homes are worth.
But banks and title insurance companies have not always been able to prove they own the mortgage and have the right to foreclose.
The Henderson case is the latest shot across the bow of mortgage lenders. The Nevada Supreme Court has issued rulings favoring homeowners in several recent cases on appeal. Nevada Attorney General Catherine Cortez Masto is expected to file criminal charges against bank and title company employees, as well as notary publics, over allegations of robo signing.
The term applies to a practice of signing affidavits attesting that bank officials have reviewed documents and found them proper even without making any review.
When the robo-signing scandal erupted last October in Florida, bank employees admitted to signing 10,000 documents a month without knowing whether they are legitimate.
Masto’s office declined comment on any plans for criminal action against robo-signers. She has taken an aggressive approach to holding banks accountable, and the Legislature earlier this year enacted new laws regarding robo signing.
Crosby said he suspects robo-signing is widespread in Nevada. One of his cases was the subject of an appeal filed with the state’s high court, and he used the lender’s own words against it.
Supreme Court justices found in favor of Crosby’s client, Moises Leyva, ruling unanimously that lenders have an absolute duty to strictly follow foreclosure mediation rules exactly as written.
More important, the high court ensured lenders couldn’t simply provide a sworn statement, often from their own employees, that they were the lender even when they failed to provide a verified copy of the deed of trust.
“They admitted how disorganized they were, that they lost paperwork,” Crosby said.
In court papers, Crosby accused Wells Fargo of continuing to play outside the lines. He alleged that a document the bank produced during mediation was backdated and bore a style of notary stamp that didn’t exist at the time it was signed. The document is included in the court file.
He also alleged that two documents bore the name of a bank employee and “are notarized by the same notary, (but) both signatures do not belong to the same person.”
Crosby wants Mosley to rule that Wells Fargo acted in bad faith, to award sanctions for the “obvious forged, backdated and falsified documents” and to award cash sanctions.
Crosby will ask Mosley to fine Wells Fargo an amount equal to the difference between the loan and the home’s current value.
The Supreme Court in its recent decision has made it clear to judges that such sanctions are appropriate when lenders are found to have acted in bad faith. A hearing has been scheduled for Oct. 6.
Review-Journal writer Chris Sieroty contributed to this report. Contact Doug McMurdo at firstname.lastname@example.org or 224-5512.
Neil Garfield – Living Lies
The bad news just keeps rolling in. Keeping up with it is almost a full-time job. Here’s a recent sample featuring wage slaves, vanishing pensions and soaring health care costs.
1. It’s Not Too Late To Revive Slavery
A recent report notes that it’s not enough to create jobs. You’ve also got to create jobs which pay a living wage. Imagine that! What are these guys? Socialists? From Not getting by on minimum wage (September 27, 2011)—
NEW YORK (CNNMoney) — Most experts agree that to get out of the economic slump, we need more jobs.
But another problem is that millions of Americans already have jobs that don’t pay very much.
Getting the economy going will require more than just creating a large number of low-wage positions, said Paul Osterman, economics professor at MIT. Raising the minimum wage to get more cash to the working poor is just as crucial, he said.
About 20% of American adults who have jobs are earning only $10.65 an hour or less, according to Osterman’s analysis. Even at 40 hours a week, that amounts to less than $22,314, the poverty level for a family of four.
The federal minimum wage currently stands at $7.25 an hour (18 states set their own rates above the federal level, maxing out at $8.67 an hour in Washington State).
Here’s the kicker.
But increases have not kept up with inflation. When adjusted for inflation, the highest federal minimum wage was in 1968, when it was the equivalent of $10.38 in today’s dollars…
With a greater percentage of the nation’s income going to corporate profits than ever before, Osterman argues that businesses can afford a higher minimum wage.
“There needs to be standards in the job market,” he said. “If the object is simply to minimize costs, we can use slaves again.”
2. Your Vanishing Pension
The Daily Ticker recently reported on the Retirement Heist! — U.S. Pensions Plundered By Corporate Greed, Author Says (video below).
As if the average worker didn’t have enough to worry about, Ellen Schultz, an award-winning Wall Street Journal reporter and author of Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, says that in some instances the fat paychecks of the top paid executives are coming directly out of the pocket of average workers.
“As recently as a decade ago there was a trillion dollars, a quarter of a trillion in surplus assets,” in corporate funds, Schultz tells The Daily Ticker’s Aaron Task in the accompanying clip. “There was plenty of money in pension plans; there was plenty to pay the benefits but corporations went about taking the money away.”
… Schultz believes this was no accident, claiming corporations have been “exaggerating their retiree burdens” and plundering retirement plans in a variety of ways, including:
- Siphon billions of dollars from their pension plans to finance downsizings and sell the assets in merger deals.
- Overstate the burden of rank-and-file retiree obligations to justify benefits cuts, while simultaneously using the savings to inflate executive pay and pensions.
And so on… Corporate big shots are stealing worker pension funds and then reducing their retirement benefits. It’s really very simple, the opposite of complicated. It’s not a head-scratcher. No need to pore over the details. What did George Carlin say about corporate big shots?
They want obedient workers. Obedient workers. People who are just smart enough to run the machines and do the paperwork, and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime, and the vanishing pension which disappears the minute you go to collect it…
The American Dream, folks. Of course, you’ve got to asleep to believe it.
3. If You Shoot Yourself In The Head…
McClatchy Newspapers reports that job-based health insurance premiums have risen sharply this year.
WASHINGTON — After modest increases last year, the cost of job-based health insurance for families and individuals has jumped sharply this year, even though insurers are paying less in benefits as cash-strapped American workers opt for less medical care.
For the estimated 150 million workers with employer-sponsored coverage, the average cost of family health insurance jumped 9 percent this year to $15,073, while the price of individual coverage rose 8 percent to $5,429.
Both increases are the largest since 2005.
And when McClatchy says this—
Each far outpaced a national 2 percent hike in wages and a 3.2 percent rise in inflation, according to an annual survey of nearly 2,100 businesses that the Kaiser Family Foundation and the Health Research & Educational Trust released Tuesday.
you should bear in mind that it is nearly a certainty that the wages of working Americans have not increased this year, while those of the top wage-earners did.
All is not lost. You can avoid these soaring health care costs. My solution? If you shoot yourself in the head, you won’t have to pay those rising premiums. If you don’t own a gun, be creative!