fraud

Salmon: The enormous mortgage-bond scandal


You thought the foreclosure mess was bad? You’re right about that. But it gets so much worse once you start adding in a whole bunch of parallel messes in the world of mortgage bonds. For instance, as Tracy Alloway says, mortgage-bond documentation generally says that if more than a minuscule proportion of notes in a mortgage pool weren’t properly transferred, then the trustee for the bondholders can force the investment bank who put the deal together to repurchase the mortgages. And it’s looking very much as though none of the notes were properly transferred.

But that’s not even the biggest potential problem facing the investment banks who put these deals together. It also turns out that there’s a pretty strong case that they lied to the investors in many if not most of these deals.
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Why Does Congress Hate America?

Michael Collins

Oh, it’s just that Collins guy mouthing off again.

Actually, I was far too easy on Congress yesterday in Lawless Nation – Congress.

Here’s why:  HR 3808 The Interstate Recognition of Notarizations Act of 2010

The bill is the response to the events outlined in a story that  Numerian scooped on foreclosure problems.  The banks are in big trouble.  They failed to follow the law and rules in handling mortgages.  Instead of foreclosing on home owners, those upside down and under water can consider strategic defaults on the mishandled notes.  Legal efforts have reached a point where there’s a “tsunami of legal action against mortgage servicers” as Tyler Durden calls it.

A clever Mandarin somewhere figured out that by changing the law on notarizations, after the fact, Congress could stop the tsunami by “making it more difficult for homeowners to challenge foreclosure proceedings against them.”  (See Ellen Brown)

HR 3808 passed both houses of Congress with ease.  How? (See “Major Actions”) On April 27, it passed the House by a voice vote.  On September 27, it passed the Senate unanimously.   It took just minutes for the bill to pass in both chambers.  Things move right along when there’s no debate.

It was more important for Congress to fix things for the bankers than to keep constituents in their homes in the midst of a relentless financial crisis, as a cold winter approaches.  Congress has inherent contempt for the people.   We’re probably not even important enough to hate.
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Triumph of the Money Party!!! Warren’s role downgraded, reports to Geithner

Michael Collins

The White House snatched back one of the few bones it’s thrown to the people outraged at the looting of the United States Treasury by failed financial concerns – the big banks and Wall Street.   The promised appointment Elizabeth Warren as head of the new agency to protect consumers from the financial services industry has been seriously downgraded.   Instead of running the Consumer Finance Protection Agency, Warren’s role has been diminished to that of special assistant to the president and adviser to Treasury Secretary Tim Geithner.

“President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government’s powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision.”  LA Times, Sept 15

An interim appointment would have given the no-nonsense Warren the full authority to structure consumer bureau in the interests of the people. A special adviser role is defined in a New York Times article as follows:

“Ms. Warren will be named an assistant to the president, a designation that is held by senior White House staff members, including Rahm Emanuel, the chief of staff.

“She will also be a special adviser to the Treasury secretary, Timothy F. Geithner, and report jointly to both men.” September 15

The title of the Times article says it all: Warren to Unofficially Lead Consumer Agency.
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“Is There a Predator Drone Near Gainesville?”

Michael Collins

Military historian and author, Brian Downing, is more than a little perturbed at the foolishness of Koran burning in Gainesville, Florida (site of the most egregious election fraud in 2000). (Image)

As best as I can tell, that plow-hand in Gainesville has never even had the benefit of half-idiot pedagogues and broken down preachers. He acquired his theological learning by watching Jimmy Swaggart on the TV and taking copious notes. There’s a plow-hand preacher born every time a pledge number lights up on the screen. But what about congregations? They must be coming even faster than the rubes at a carnival midway. “Step right this way and see the burning books!” B. Downing

It gets better … (more…)

“Show Me the Money!” – Waste and Fraud in Iraq from the Start

Michael Collins

The Associated Press ran an article Sunday that focused on the wasted funds during the US reconstruction efforts in Iraq.  There were stories of an unused children’s hospital, a prison for 3,600 that will never open, and the diversion of reconstruction funds to pay off Sunni fighters to turn on al Qaeda.

AP failed to mention that the main reason that we have to rebuild Iraq is that the United States government invaded it and destroyed everything it could in a display of shock and awe. Also unmentioned were the unique post invasion strategies of no security for sites like power plants that keep the country running and the dissolution of the 400,000 man army, the main institution that kept order in the country before the invasion.  But I digress.

Anyone paying attention should know that financial controls and accountability went out the window from the very first days following the defeat of Saddam Hussein’s military.
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Gibbs Outed as Republican Mole

Michael Collins
(Satire)

White House Press Secretary, Robert “the mole” Gibbs, was outed last night for his lead role in throwing the 2010 congressional election to the Republican Party. The White House refused to return calls to comment on the charge or verify the outline of the carefully orchestrated plot. But a variety of off the record sources spoke as one – the plot is real and has been going on long before the 2008 general election. The scope of the plot goes well beyond the upcoming congressional contests.

In a recent interview for The Hill newspaper, Gibbs used an entirely new technique in election tactics – offend and humiliate a key element of your voting block right before a critical election.  Gibbs ridiculed progressives as part of the “Professional Left” and said, “They will be satisfied when we have Canadian health care and we’ve eliminated the Pentagon. That’s not reality.” Research indicates that this approach has never been used within 90 days of a general election.

But the story goes much deeper than simple electoral politics. The planned outburst has a short term benefit for Republicans but, as we will see, Gibbs is reporting to a higher authority.
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The Checking Account Scam – How Wells Fargo Gouged Its Customers

By Numerian posted by Michael Collins

We’ve often talked here about the bank practice of extracting equity from customer accounts. Now comes a 90 page ruling from Judge William Alsup of the Northern District of California against Wells Fargo Bank, showing in detail exactly how the bank engaged in “gouging and profiteering” when it managed customer checking accounts. Nor is this one of those polite judicial rulings where the judge waits to the end to conclude whether or nor the defendant engaged in bad behavior. Judge Alsup is biting and nasty throughout his ruling, barely able to hold his disgust at what he concluded was a deliberate attempt by Wells Fargo to profit off a system that trapped customers into overdraft hell.

How the System Was Rigged to Create Overdrafts

Prior to 2000, Wells Fargo did its best to minimize overdrafts in customer accounts. Its computers processed all credits to the account first, followed by ATM withdrawals and debit card purchases, followed by checks and then Automated Clearing House transactions (the ACH is used by banks to process debits such as PayPal charges or monthly mortgage or rental payments where the customer has agreed to an automatic debit). In every step, Wells Fargo used low to high sequencing; the smallest debits would go first and the largest would go last. This entire process mimicked the way the consumer managed their account using a traditional checking account balance, which ranks all transactions in chronological order. When an overdraft occurred on the bank’s records, the consumer would have known had they been keeping their checkbook balance up to date.
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Kos, “Raw Data,” and the Mainstream Media

Michael Collins

When DailyKos publisher and owner Markos Moulitsas demanded that his pollster produce raw data from the polls Moulitsas purchased, he established a principle of election polling transparency that could open up the checkered history of presidential elections in the United States.

The controversy erupted when Moulitsas (kos) fired his polling company.  He was unhappy with their results and demanded that his pollster, Research 2000 (R2000), turn over raw data for review.  Moulitsas said:

“Early in this process, I asked for and they offered to provide us with their raw data for independent analysis — which could potentially exculpate them. That was two weeks ago, and despite repeated promises to provide us that data, Research 2000 ultimately refused to do so.”  kos

When R2000 either refused or delayed (there’s disagreement on that), kos took their actions as a sign of “fraudulent polling practices” (from the kos lawsuit).  DailyKos published a searing criticism of R2000 and the National Council on Public Polls supported kos in his demand that R2000 release the raw polling data.  Blogger Nate Silver of FiveThirtyEight.com and the New York Times supported kos, as well.

The request by kos is well justified.  He’d paid for the polling.  Like any customer in this type of arrangement, he had a right to the product of the work done in his behalf.

Reviewing the basis for the polling results, particularly the raw data and the analytic methods, could answer two key questions:  1) were the polls actually conducted and 2) did  the techniques used meet the professional standards of  other polling organizations.

The president of R2000, Del Ali, defended his polling and denied any and all accusations of improper conduct:  “Every charge against my company and myself are pure lies, plain and simple, and the motives as to why Kos is doing it will be revealed in the legal process and not before that.”  Some of the criticisms of R2000 polling methods have been answered by independent analysis at RichardCharnin.com (more…)

Understanding Supply Side Capitalism

Part #2 of Understanding Capitalism and Socialism
by Joaquin

Now that Republicans are starting to talk about restoring Reaganomics, it is a good time to review Reaganomics; i.e., Supply Side Capitalism. This is number two of my technical essays about how the world works. Today we will explore how supply side economics will save the world. So let’s get to it.

Supply side economics became so powerful that it was renamed Reaganomics in honor of the president and WW II movie hero. Reaganomics helped poor Americans understand what rich people have been telling us since the Middle Ages i.e., Robin Hood was doing it wrong.

Some people call Reaganomics “Trickle Down theory”. Its kind of like when I went to college; most of the students studied hard to get in to our college and were from middle class families like me, but this one guy got in because his parents bought a new building for the school.
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Chris Dodd’s wife and derivatives trading – “all in the family”

Michael Collins

It’s all in the family! Senator Chris Dodd writes a financial reform bill but forgets to regulate derivatives, “financial weapons of mass destruction.” Then we find out that his wife works for the owners of two exchanges that will very likely benefit from Dodd’s “reform” legislation.

They make the rules. They take the money, all of it, and leave us with debt. And they tell us it’s all legal.

Here’s the story.
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