FedUpUSA

Archive for the ‘Republicans’ Category

I know this is getting repetitive, but I’m going to keep pounding the table on this until it sinks in to the American public and they rise and demand that we cut the crap with the deficit spending.

Bloomberg is once again stoking the “tanks in the streets” fear game, with this crap:

“The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this,” Cooper said. “The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis.

“The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose,” Cooper said. Jefferies is one of 20 primary dealers that trade with the U.S. Federal Reserve.

Utter and complete crap.

Look folks, there is absolutely zero risk of default based upon payment flows without a deal.  None.  Nada.  Zip.

I want you to look at the following – this is from Treasury itself.  It’s the monthly treasury statement, otherwise known as “MTS”:

Click for a larger copy that’s easier to read.

There’s no magic here.  The “heavy” revenue months are January (Corporate 1120 filing deadline), April (tax day, of course), June (estimated taxes), September (estimated taxes) and December (estimated taxes and end-of-calendar year deposits.)  The other months, of which July and August are two, tend to be significantly lower revenue months.

But when I say “significantly lower”, I am still referring to somewhere around $150-170 billion in tax revenues.

Bloomberg has nice enough to categorize expected outlays for August.  Here we go, assuming we have $150 billion (I’m a pessimist) in revenue to spend.

First, there’s what we must pay.  That’s $29 billion in interest.  We have $121 billion left.  Everything else is, legally, a choice.

Social Security ($49.2 billion, Medicare (28.6 billion) and Medicaid (21.4) billion are up next.  They’re big.  If we pay them all without exception we now have $21.8 billion left.

We can pay military active duty pay and IRS tax refunds (you’re going to have trouble getting people to send in taxes in the future if you simply steal them) which total $2.9 billion and $3.9 billion, respectively.  We can also pay Veterans benefits ($2.9 billion.)  We now have $12.1 billion.

We now have a choice.  We can pay a third of the defense vendor payments, or nearly all of unemployment benefits, most of which are not insurance – they’re extended benefits.  Those are $31.7 billion and $12.8 billion respectively.  We cannot, however, pay both, and whichever we choose we just ran out of money.

That means we can’t pay TANF ($7.1 billion), federal salaries (awwwwww, that’s $14.2 billion) or the Department of Wasted Minds (otherwise called “education”) at $20.2 billion.  HUD gets stiffed ($6.7 billion), energy, highway admin and justice.  I suggest, incidentally, that for the Department of Justice we let Mexico have Eric Holder and his pals at BATFE – they’ll take care of that for us.

There’s much more of course, but this outlines the problem.

It also outlines the solution.

We will not default in August, unless Treasury intentionally spends the money that they are legally required to pay in interest on the equivalent of “hookers and blow” instead.

However, a refusal to pass the debt increase will force an immediate balanced budget.

If you think we can’t find 50% savings in Medicare and Medicaid, I assure you that we can.  We have to fix the entire medical system, starting with refusing to give away billions to illegal aliens in “free” medical care along with permitting medical drug and device vendors to price-fix in this country while selling for far less everywhere else in the world – for openers.  We also have to deal with the fact that not everyone can be given a triple-bypass and two new hips when they’re 70.  Sorry, the money doesn’t exist.

Unemployment insurance?  It’s supposed to be 26 weeks; that’s actually insurance since premiums are paid for it.  Cut off the extended programs. Poof – there goes a lot of spending.

Federal salaries and benefits?  Cut ‘em in half.  Anyone who doesn’t like the deal can quit.  With as many unemployed as we have, there will be plenty of people willing to work for the offered wage.

Education Department?  Gingrich told us in his “Contract for America” it was going to go away.  There’s no time like the present.  Poof.

HUD?  Poof.

Justice?  Legalize pot tomorrow.  There’s more than enough tax revenue from that to cover the expense, not to mention the decrease in the cost of jails with all the people we’ll release the next morning.  Resolved.

Health and Human Services grants?  Poof.

“Other spending”?  If you can’t itemize it then it must not be important.

Defense?  Now that’s a tough one, but I got an answer.  President Obama told us he was going to leave Afghanistan and Iraq when he campaigned in 2008.  Well, let’s do it.  Like now.  As for those who want paid for past performance they’ll have to wait.  We’ll pay ‘em, but not today, and we won’t need so many tanks, body armor sets and bullets going forward since we’re brining the boys home immediately.

Yeah, this will be a rough ride.

Have you ever lost your job?  I have.

What happened?  You went through the family budget and figured out what you couldn’t kill off.  Cable TV?  Gone.  Second phone line?  Gone.  Expensive cell plan?  Gone.  Internet?  Gone or seriously cut back.  Air conditioning?  Hahaha – turn it off.  (For those who think it’s impossible, my girlfriend, who lives in Florida, proves otherwise.  Yes, you can have a $30 electric bill in this state.  Shut the damn thing off!)  Eating out?  Nope.  Chicken thighs are inexpensive and nutritious.  So are a few apples, bananas and broccoli crowns and a dozen eggs and a hunk of cheese for your breakfast.  Starbucks?  Nope.  Lunches out?  Nope.  Movie night?  Redbox – $1 – instead of $50 at the theater.  Netflix? Gone.

You get the idea.

We can do this.  We must do this.  But the reason the political parties don’t want to do it is right here:

Our GDP is being overstated by more than 10%, and has been for the last three years running.  If we balance the budget we’ll be forced to recognize what condition our economy is truthfully in and has been since 2008 – a Depression.

We can’t keep doing this, and the time to stop lying was three years ago, as I have repeatedly pointed out.  But since we didn’t, and we can’t turn the clock back, the best time to “eat our peas” is right now.

The time for lies has passed ladies and gentlemen.

It is now time for truth, because the mathematics have caught up with the forked-tongue brigade in Washington DC on both the left and right.

And he’s the mutineer!

Last night the first “debate” was held, and the common conclusion was that Herman Cain “won.”  People said he “talked straight” and other similar things.

Incidentally, if you missed it, you can watch it right here.

Well, did Cain do any of those things?

I didn’t see or hear anything “straight” – just “goals”, not intended acts.  Let’s remember who this guy is.  Yes, he’s a former successful CEO.  So am I.  He ran bigger companies, but he’s got valuable (and valid) experience in the business world.

But he is also a former Federal Reserve Bank Chair!

Does he have any sort of intent – or desire – to put a stop to the abuse of leverage that got us in this mess?  Oh hell no.

In fact, what I found astounding was the complete lack of any attention whatsoever in the so-called “debate” last evening to the root causes of the issues we face as a nation. 

That is, the abusive use of DEBT to blow bubbles on a serial basis, and the fact that absolutely nothing has been done, or even discussed, about how we allegedly “grew” over the last 30 years:

There it is.  And how bad was the imbalance?

There has been no actual economic growth funded by output since 1983!

And nobody – and I do mean nobody – had actual answers for this problem:

The guy who came closest was Governor Johnson.  If you’re interested in more on him, you might want to listen to my interview of him from 2009, which you can find in my Blogtalk Archives.  The link is here.

It’s all fine and well to talk about how we have to do a “cost-benefit” analysis.  But the fact of the matter is that someone has to lay upon the table what they actually intend to do, and I didn’t hear that from anyone last night.

Did you?

This much is clear: Unless I hear honest contrition and a real path forward from this guy my view is simple – you vote for this nozzle, you’re gonna get douched.

The Market-Ticker

By Donald Hank

In a recent video featuring former finance regulator Bill Black exposing fraud and corruption in major financial institutions, the GOP is seen as sticking to a highly questionable philosophy of non-regulation of finance even in situations where non-regulation leads, directly or indirectly, to implementation of taxpayer-paid bailouts and guarantees for bad banker decisions:

Former Finance Regulator Bill Black: Criminal Charges Must Be Laid

This video shows that the old Republican habit of defending a regulation-free banking system could soon be an albatross.

The Old Republican theory is that too many regulations on banks will hamstring the free market. In theory, this libertarian approach to finance makes sense. But only in a vacuum or a libertarian (laissez-faire) utopia does it hold true. In the real world, the government is obliged to guarantee deposits of bank customers against bank failure. But when you relax regulations to the point that banks are no longer responsible for their actions, and the public is obliged to pick up the tab, you get the kind of situation that led to Reagan’s savings and loan scandals. This scandal shows you can’t treat banks as independent businesses subject only to the laws of supply and demand as long as the government guarantees deposits and loans made in these banks. This kind of practice costs the taxpayer a lot of cash, which, in a free market, they would not have to pay. If you want to apply totally libertarian (or free market) solutions, you would also have to deny bank customers all taxpayer subsidized guarantees. This is not going to happen, so some regulations are necessary to protect the taxpayer against either poor judgment errors or criminal behavior of the kind discussed by Mr. Black.

The government used to just guarantee deposits up to a certain amount to protect the bank customer against failure – a practice that in itself led indirectly to some warps. But now we have additionally introduced the reckless concept of government guarantees for loans – in the form of bailouts for banks with lax lending practices but also in the form of coercion of the CRA variety.

That is an untenable situation for the taxpayer, who now is often held at gunpoint every time a bank fails for abusing this protection.
It is arguably more favorable to a free market if the bank is either made 100% responsible for its actions – ie, no bailouts – or the bank is 100% regulated so that bad loans cannot be made. It is also essential to the operation of the free market to prosecute to the fullest extent of the law and breach of bank rules that make banks dependent on public funding in the form of bailouts or the like.

Neither situation will ever develop in the real world, so a balance between regulations for banks and taxpayer-paid guarantees for bank customers must be found.

The blind policy of simply refusing to regulate (to meet GOP demands) while continuing to provide taxpayer-subsidized guarantees for loans and deposits (to meet essentially Democrat demands) will lead to an untenable situation, especially for the GOP. If the GOP is eventually seen as blindly deregulating in ways that directly or indirectly trigger taxpayer subsidies for banks, the GOP will fail to hold onto its lead among voters. Only a few rich bankers could desire such a situation.

The only sensible move is for the GOP to start being more flexible with regard to regulations, specifically where deregulation would entail a risk of public monies being used for bailouts, guarantees on deposits and the like.

Deregulation is a free-market solution only if the government is not paying the bill for bad banking policies and decisions.

It is time for the GOP to realize that taxpayer subsidies to the rich can put them right back behind the eight ball again. The Tea Party must take up this issue.

It took less than six hours for me to be able to wave the “told ‘ya so” flag:

An early push by New Jersey Republican Rep. Scott Garrett to add some “teeth” to the GOP’s new Constitution rule requiring every bill cite its specific constitutional authority failed in a Republican conference meeting Tuesday.

What was the rule?  That you couldn’t claim “general welfare” or “necessary and proper” as justification – you had to point to an actual enumerated power.

The very so-called “Tea Party” and “Conservative” members of Congress could not even agree to cite a specific clause in The Constitution that enabled legislation to be brought to the floor.

Oh, it gets better.  The actual proposed rule would not have prevented passing something that nobody could manage to find a clause in The Constitution that enabled the bill.  It in fact only required that a point of order be raised if the language was not present, allowing a gigantic and overwhelming 20 minutes of debate (10 each side) before a simple majority could vote to table the objection and move forward anyway – Constitution be damned.

The Committee rejected that watered-down milquetoast rule!

That would be enough to call the Tea Party and so-called “Conservatives” we sent to Washington a failure on the day they took their oaths of office all by itself.

But no, that wasn’t enough for them.  They had to make damn sure that I could get out the megaphone and holler from the rafters that every single thing we were sold by these clowns during the campaign – the entire Palin thing, the entire “we’re gonna take back Washington!” screed was an out-and-out fraud from the very first breath that passed their lips.

Remember, the claim by the Republicans (including but not limited to The Tea Party) was that they would cut the budget by $100 billion?  Which, I might remind you, would have been less than five percent of the deficit this year.

Well, it turns out that was a lie too.

Even some Tea Party types who are sticking to the original goal concede that it’ll be hard to reach as long as the GOP exempts — as it plans to — funding for defense, homeland security, veterans and entitlements.

So we simply exempt the more than half the budget, then say “well, we can’t get there.”

By how much can’t we get there?

And over in the Senate, a top GOP aide told me that the real bottom line is a max of $30 billion for the rest of this fiscal year.

What was the deficit again for the calendar year that just closed?

Oh, that was $1,700 billion, give or take a few.

So we’re talking about…. one point seven six percent of the deficit?

Yes, 1.76%.

Really.

Washington spends that $30 billion, incidentally, in roughly three days.

LIARS and FRAUDS, every last one of you. 

Anyone remember this Ticker?

I, and FedUpUSA, ought to sue anyone using this moniker for their so-called “political affiliation” for defamation.

Yeah, that’s a joke.

But so are you.

All of you.

Especially Sarah Palin, Newt Gingrich, Bob Barr, and douchebag groups such as the “Tea Party Patriots.”

Or the follow-ups to it, like, for instance, this?

But telling me that I’m voting to “fix things” if I go to the polls and vote Republican in a couple of weeks is a flat lie.  I will get no such thing, as the standard-bearer for the Right-Side Party, Tea or otherwise, at this point is Sarah Palin who I remind you suspended HER campaign along with McCain’s to blow Lloyd Blankfein and company in 2008.

Right up above is your “fix” that we voted for.  That America sent The Faux Tea Party to Washington DC.  The above is the “result” of “America speaking loudly at the ballot box.”

I was called all sorts of names by other so-called “Tea Party” folks after my string of posts, from people who said I had no right to speak at all and those who simply said “you’re wrong – we’ll do it – you’ll see.”

Admit it you jackasses, every last one of you: You were dead fucking wrong, you were lying to the American public the entire time, and I was right.

It took less than SIX HOURS after the swearing in of the new Congress to prove you were full of crap.  You couldn’t even manage to wait for one day before repudiating the two most-important things you claimed you were going to do – quit blowing money we don’t have and actually follow The Constitution.

When the market figures out that irrespective of the grandiose claims you were completely full of crap, expect the bond market to go bananas.  Or Bernanke will go bananas and so will the commodity markets. 

Doesn’t really matter – either way the American People – especially the middle class and below – are going to get financially raped.

Again.

And this time, it’s your – and only your – responsibility, because you told us you’d stop it.

FiredogLake is reporting this morning that six Senators have demanded criminal and regulatory action by the FHFA regarding the blatant fraud in the mortgage industry. 

The six Democrats – Sherrod Brown, Barbara Boxer, Sheldon Whitehouse, Debbie Stabenow, Tom Harkin and Mark Begich – pushed back on the idea that these are merely technical errors, as the FHFA letter intimates, rather than systematic violations of the law:

There have been attempts to dismiss the reported violations as minor technical paperwork errors, and to employ the defense that these were harmless errors because the homeowners were in foreclosure and would have lost their houses anyway. These are not technicalities, they are not isolated cases – it is likely that over 200,000 foreclosures have now been suspended – and these improprieties cast doubt on the foreclosures in question.

Rather than a few rogue employees disregarding company policy, the policies themselves were flawed, indicating that there is a systemic problem with the manner in which loss mitigation and foreclosure operations are being conducted by most, if not all, mortgage servicers. This pattern of behavior has undermined the integrity of the housing market, creating uncertainty for home sales and the availability of title insurance.

We shouldn’t be reassuring the banks and their servicers that they’ll make it through this all right, we should be filling out criminal charges. The banks basically never changed their policies from the questionable lending practices of the subprime mortgage scandal – they couldn’t be trifled with basic legal procedures, and they hired a bunch of incompetents to push the paperwork. When the defaults rose, the same gang of idiots failed to provide any relief for homeowners through mortgage modification. And now they’re breaking the laws surrounding foreclosure, to cover up for their other fraudulent activities with proper mortgage assignment.

While this has started to become an election issue, with familiar battle lines, it should be noted that only Barbara Boxer among these six is up for re-election. I do think this issue resonates and is pretty clear:

To Cuban-born Jose Martinez, 65, a lifelong Republican from the Miami area who works in liquor manufacturing and export, “It seems like a joke that we are a country with laws and the banks keep stealing.”

As for remedies, the Senators suggest forcing the servicers to work with homeowners to modify loans, to impose “tailored moratoriums” for certain lenders as per their authority as regulators of banks and non-bank institutions that are the parent companies of the servicers, and to “review and reform” the financial incentives that make it beneficial for the servicers to foreclose. They are looking at the issue in a comprehensive way and beyond the “technical errors” argument which is clearly false.

 As has been tediously and thoroughly documented on this website now for more than 2 years, there is no ‘procedural error’ – this was blatant, intential and orchestrated fraud from the very top down to the bottom of the mortgage industry.  While it is easy to just ‘blame homeowners’ , the fact is, homeowners were not the predators. 

This is WRONG HEADED thinking!  It is NOT illegal to default on a debt, but it IS a CRIME to commit fraud – and the latter is what the banks have done, the former is what the homeowners have done.   While there is no denying that there were some homeowners that lied on their mortgage applications, that number pales in comparison to the number of lenders, brokers and banks that lied to prospective buyers in order to put them into homes they knew darn well they couldn’t afford.  The more mortgages they could write, the more money they made.  Prospective buyers were no longer people they were helping to purchase a home in a price range that was sustainable, they were a profit stream.  Often times it wasn’t the buyer who lied on the application at all, it was the lender who altered documents before submitting the loan for underwriting without the knowledge of the buyer!

The other problem with the idea of blaming the homeowner is that the homeowners were NOT the experts.  The lenders were – and when they told people ‘this is how you do it’ and ‘yes you can afford this’ and ‘this is a fantastic deal’ – how were laypeople supposed to know better?   Being naive and uneducated about the home-buying process is not a criminal act.  All these creative toxic loans were crammed down the public’s throats which caused home prices to skyrocket far out of the reach of average wages. While inflation in food, energy, clothing and everything else also increased at a historic rate at the same time, wages were FALLING.  Often times, people had NO CHOICE but to take on more credit than they were comfortable with because the government policies were not only creating rampant inflation, but they were mandating that banks lend to people who they deemed ‘underserved’  – minorities, poor people, the unemployed - basically the government forced banks to lend to those who could not afford to pay.  For reference, at the peak, home prices had inflated to more than 7 times wages.  This is historically and definitively unsustainable….yet banks were processing loans with 60% DTIs and this was advertised to the public as acceptable! 

Nowhere was this more evident than in the State of Ohio.  The State itself attempted to kick subprime lenders out of Ohio because it had become exceedingly clear that the predatory lending practices were entrapping people by putting them into loans they could not pay for and ultimately ending up with entire neighborhoods where the vast majority of houses were in some stage of foreclosure.  Unfortunately, the Federal Government told the State of Ohio, that they could not stop these lenders from operating in the State because that would be ‘discrimination.’  So, basically the federal government gave these lenders a license to commit fraud and forced the State of Ohio to accept it. 

As for the lenders, at first they weren’t so sure that lending to those that couldn’t pay would be such a great idea.  So, to offset this risk in lending to people they KNEW couldn’t pay, they came up with mortgage backed securities and other ‘creative investment vehicles’ that they could buy and sell like stocks.  As fast as they could bundle and pool these things together, they would sell them to individual investors, pension funds and anyone who was looking for big returns….because after all, home prices only go up, right?  Thing is, long after people got weary of taking on more debt, the demand for mortgages became driven ENTIRELY by the banks THEMSELVES because the toxic instruments they created were a cash cow….as long as home prices were going up – they kept inflating the values of the securities so they could continue to profit from them. 

It was when ALL private sector demand stopped because no one could take on any  more debt, that the wheels started to come off back in late 2007.  Then the banks and Wall Street were bailed out with taxpayer money and we’ve now seen them again inflate the prices of fuel and commodities with their taxpayer money that they gamble with – but because the hole is so large, the over $1 Trillion in taxpayer money is not enough to prevent the over $14 Trillion in leveraged security instruments from imploding.

THAT is the summary of the true depths of the fraud we are dealing with.  Long after real demand for home mortages stopped, the banks continued to leverage these instruments, fraudulently inflate their values and sell them to investors.  Because profits depended upon doing this in bulk, the rule of law was abandoned in transferrence of title.  MERS (Mortgage Electronic Registration Systems) was invented by the banks themselves in order for them to more rapidly offload these ‘investments’ without the pesky business of continuity of the chain of title of the collateral (that would be your home).  Now, quite frankly, no one with any sort of mortgage transaction since 2002 can be sure of whether or not their title is clear, nor can they be sure they are actually paying the entity to which they truly owe money! 

Meanwhile, the banks and lenders are foreclosing as quickly as they can, often times facilitating this process with ‘recreated’ (forged) documents, robo-signers and false affidavits as has been documented extensively here on FedUpUSA.  Multiple courts across the country have discovered much of this fraud, and some banks have now claimed to be temporarily halting foreclosures to ‘sort out this procedural error’, but even that is a lie.  Foreclosures especially continue unabated and at an accelerated pace in non-judicial states where the lenders can be sure they never have to prove their standing or right to foreclose.  Essentially, what the banks are doing amounts to asset stripping the public.  They deceived the public with the loans themselves, the loans began to default, so they got Congress to give them more than $700 Billion in bailout money and now that the fraud is beginning to be exposed, they are taking possession of the collateral as quickly as possible, even if they have no legal rights to do so.  Asset stripping at every possible level.  This will continue until or unless we stop it.

Clearly the enormous economic crisis we face today was largely created by the banks/lenders and Wall Street and the stupid policies of our government.  Homeowners were the victims here.   At the very least they deserve: 

#1.  Their day in court to discover exactly WHO owns their mortgage; they have a right to know to whom they are actually indebted (and it is not the servicers).  This is a legal right of every debtor under the FDCPA – The Fair Debt Collection Practices Act

#2.  The opportunity to negotiate with the actual party to whom they are indebted  (in most cases, the servicer was ALREADY PAID when the note was sold and has absolutely no motivation or consideration for negotiating a fair market price – this is why HAMP was such a failure!)

#3.  The opportunity to have clear title to the asset that they purchased – and if that title is not clear, they are entitled to restitution under USC 15 § 1641 , which allows for the sanction of expunging  interest on the debt which encumbers that property wherein a title has been fraudulently transferred.  In addition, wherein the chain of title has been broken, there should be a release of that collateral, making the mortgage loan an unsecured debt (like a credit card), which also makes the debt dischargeable under Chapter 7 Bankruptcy.

As for the political angle of all this - it sure seems to me that the Republicans are vastly missing here.  Is it that they truly want to snatch defeat from the jaws of victory this November?  The surest way to lose much of the momentum they have been building this election cycle is to be completely silent on the issue of fraud, or worse, seen as defending fraud!  I make no secret of the fact that I am and always have been a staunch conservative and I believe that part of that ideology includes a moral and ethical obligation.  Hasn’t the Tea Party been demanding a return to principles over politics and party?  This election hinges upon which party gets their constituents to the polls and up until this point all the enthusiasm has come from the re-engergized Tea Party groups.  I am now seeing some of the liberal base become re-engergized in response to the issue of the massive fraud that has been perpetrated upon America by the banking sector and Wall Street.  Certainly, the fact is not lost on me that much of the blame for enabling this to happen resides with Congress and much of the way was paved by liberals with their mandates to loan to those that could not afford it.  It also is not lost on me that Wall Street and the banks gave more to Democrats in the past 4 years than any time in history.  Coincidence?  I think not.  But in a strange twist of irony, we now have Democrats leading the way in pursuit of the prosecution of fraud in this industry. 

So, why are Republicans missing?  This could be an issue that they slam-dunk Democrats with – but we have only deafening silence.  Could it be that Wall Street and the big banks are now giving all that money to the GOP?  Will Tea Party voters allow Republicans to be bought, in direct conflict with the values that they have been espousing?  Can the Republicans afford to risk losing voter support to gain all that Wall Street money they’ve long been missing?

Somebody better wake up – we have only 3 weeks to go.  Either all this effort by the Tea Parties to clean up our government and demand morals and ethics will be wasted as we end up with more of the same crap we have had just under a different label or the Tea Partiers really DO stand for something.  Either the Republicans are worth surviving as a party with principles or they are not.