Global Financial Crisis

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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Corn, Quantitative Easing and the Coming Storm

By Numerian

Does Ben Bernanke make any connection between the asset bubble in a commodity like corn, and the economic pressures this creates for the middle class or poor people? Given their lofty and isolated position, and the fact that Fed officials talk only to businessmen and millionaires in Congress, one of the things most lacking in Fed policy debates, public or private, is any concern for the average person in the US. It’s as if these are the people of least concern to the Fed, or if they are of concern, it is only as economic factors in econometric models. You get the impression that the Fed has, for a long long time, forgotten about the real, and often immediate personal consequences its policies have for the average person. Numerian
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The world as crack house

Michael Collins

Crack house: “A place “where people make, deal and smoke crack cocaine. This could be a house, an apartment, or a shack to name a few…” Urban Dictionary


The G-20 and big oil treat the earth as though it were a crack house. They set up shop, trash the premises, without regard to the surroundings — all for the purpose of creating and selling a substance that people simply can’t do without.

In fact, these oligarchs are far worse than crack dealers. Users can get off of crack. They can do the hard work of getting clean and do just fine. The oligarch crack daddies made sure that once we were hooked on oil, there was no way out. We either get well every day or we’ll collapse as a society. You’d think there would be a law against it?   (Images 1 & 2) (more…)

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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Economic Warfare? Europe versus Wall Street

Economic Warfare?  Europe versus Wall Street
Michael Collins

(March 10) Wall Streets is headed toward international pariah status thanks to two recent actions by the European Union (EU).

On Tuesday, the EU announced that it was banning Wall Street banks from the lucrative government bond business in Europe.   They didn’t express official concern or fire off a warning shot.  They simply banned Wall Street from financing government bond deals like the one Goldman Sachs sold to Greece.  The Guardian pointed out that Wall Street bond business from European governments has gone down over the last two years.  Now the business is gone period. In effect, the EU has labeled Wall Streets business tactics as too dangerous for their governments to handle.

Then on Wednesday, the President of the European Commission said that the EU was considering a ban on government debt speculation through Credit Default Swaps (CDS)  President José Manuel Barroso announced that, “the Commission will examine closely the relevance of banning purely speculative naked sales on Credit Default Swaps of sovereign debt.”   While not an outright ban, the threat of banning CDS on national debt would be a major loss for the world’s financial speculators, particularly those in the United States and Great Britain.
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