Congress

ForclosureGate and Real Estate Armageddon

Michael Collins

I wrote the story below in response to an outrageous trick Congress just tried to play on the public.   As many of you know, the Senate passed HR 3808 The Interstate Recognition of Notarizations Act of 2010 unanimously on September 27.   The bill was a carefully crafted, stealth “silver bullet” for the big banks to deal with their increasing legal problems with foreclosures.   President Obama exercised a “pocket veto,” which means he let it die after Congress adjourned. (Image)

While my story  focused on the process and contempt shown to citizens by Congress in that process, I became aware of a much broader issue.   We may well  be on the verge of a real estate value meltdown as a result of very bad behavior, illegal in many cases, by the big banks combined with the legitimate push back of mortgage holders.

If banks can’t foreclose and people can do a strategic default and walk away (0r live free in their residence), what will happen to real estate values?

The larger question emerged in reviewing bank bad behavior.

If there are fundamental flaws in many, maybe most mortgage, flaws of a serious legal nature, what if a strategic default movement spreads beyond just those facing foreclosure?  That’s where Armageddon comes in
(more…)

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.
(more…)

H.R. 3808 Interstate Recognition of Notarizations Act of 2010

The Library of Congress    THOMAS

Bill Summary & Status
111th Congress (2009 – 2010)
H.R.3808
Major Congressional Actions


H.R. 3808  Title: Interstate Recognition of Notarizations Act of 2010
Sponsor: Rep Aderholt, Robert B. [AL-4] (introduced 10/14/2009)      Cosponsors (3)
Latest Major Action: 9/30/2010 Presented to President (who killed the bill)

MAJOR ACTIONS

10/14/2009 Introduced in House
4/27/2010 Passed/agreed to in House: On motion to suspend the rules and pass the bill Agreed to by voice vote.
9/27/2010 Senate Committee on the Judiciary discharged by Unanimous Consent.
9/27/2010 Passed/agreed to in Senate: Passed Senate without amendment by Unanimous Consent.
9/27/2010 Cleared for White House.
9/30/2010 Presented to President. (President Obama refuses to sign the bill  It dies…for now.)

From: govtrack.us  a civic project to track Congress

H.R.3808

One Hundred Eleventh Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the fifth day of January, two thousand and ten

An Act

To require any Federal or State court to recognize any notarization made by a notary public licensed by a State other than the State where the court is located when such notarization occurs in or affects interstate commerce.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Interstate Recognition of Notarizations Act of 2010’.

SEC. 2. RECOGNITION OF NOTARIZATIONS IN FEDERAL COURTS.

Each Federal court shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the Federal court is located if–

(1) such notarization occurs in or affects interstate commerce; and

(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or

(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.

SEC. 3. RECOGNITION OF NOTARIZATIONS IN STATE COURTS.

Each court that operates under the jurisdiction of a State shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the court is located if–

(1) such notarization occurs in or affects interstate commerce; and

(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or

(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.

SEC. 4. DEFINITIONS.

In this Act:

(1) ELECTRONIC RECORD- The term ‘electronic record’ has the meaning given that term in section 106 of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7006).

(2) LOGICALLY ASSOCIATED WITH- Seal information is ‘logically associated with’ an electronic record if the seal information is securely bound to the electronic record in such a manner as to make it impracticable to falsify or alter, without detection, either the record or the seal information.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

Lawless Nation – Congress

By Michael Collins
Part II of III (Part I)


WASHINGTON – Placed in office through legalized  bribery, supported by public funding for their every need, protected against the laws that we’re expected to obey, Congress represents the epitome of lawlessness; lawmakers who have no regard for the law.  (Image)

Members of Congress are different.  They get to retire at age 62 with lifetime pensions and health benefits.  To qualify, they need just five years of service.   They get free phone, mail, and other communications plus paid domestic and foreign travel.   Supposedly, they’re not allowed to take gifts but the list of exceptions offers plenty of room for luxurious appreciation.

The biggest gift of all – a six to seven figure job with a major corporation or lobbying firm right after retirement – is still fair game for any member.  The revolving door never stops. (more…)

Why do elected leaders hate the citizens? Nihilists at the helm

The graph to the right is from the Center for Budget Policy and Priorities. It shows the relative contribution of various factors to the deficit. It’s not a full exposition, but take it for what it’s worth. If we stopped the wars, restored the Bush tax cuts on the wealthiest citizens, and ended TARP, we would make a huge contribution to reducing the current deficit.

So why hasn’t that happened? Congress and the White House would rather kill people overseas, reward Wall Street failures, and coddle the wealthiest citizens than reducethe deficit.

The solutions aren’t that hard. Will they take action? Of course not.

Why do those in charge hate the citizens of this country? It’s a fair assumption to say that they do hate us when they avoid obvious and direct solutions to a major problem. Instead, they’ve put together a stacked entitlement commission to tombstone Social Security. By their actions, their program is clear. “The middle class is being systematically wiped out” by the current leaders.

They ALL know this. Most of them do absolutely nothing.

All but a very few should be fired in 2010, without regard to party. If the next crew does the same, fire them too. (more…)

Do you deserve to Die?

The Forgotten Question in the Health Care Debate


Rationed care.   Image

Do you deserve to die?

Do your friends and family?

Michael Collins

Also published here, here, and here

Scenario 1: You’ve just been diagnosed with a cancer of the lymphatic system.  You’re told that it requires a procedure within the next two weeks.  Unfortunately, you were laid off from your corporate job 11 months, 30 days ago.  You are on your last day of COBRA.  Your company retirement and savings are all gone.  You can’t afford the $1,200 a month premium needed to continue your coverage.  Without the operation, you will die.  Do you deserve to die?

Scenario 2: Your spouse has a long history of illness.  Then you discover she has a virulent infection that, if untreated, threatens to disable her to the point where she’s immobile and requires ’round the clock medical care.  You work for yourself.  While you have catastrophic health insurance, it doesn’t cover the needed treatment nor does it provide for nursing care.  Does your wife deserve to experience this untreated sickness and suffering until her premature death?

Do you or your family members deserve to die simply because the rulers of this country can’t get their act together to provide universal health care? (more…)

A Matter of Trust – Mexico’s July 6 Congressional Election

A Three Part Series Part 1

In the wake of Felipe Calderon’s surprising electoral win over Andrés Manual Lopez-Obrador in 2006 Presidential Elections, demonstrators protesting alleged election fraud occupied the center of Mexico City from July through December. On three occasions, crowds of over one million were reported. Image: Erasmo Lopez

Michael Collins and Kenneth Thomas

Also published here

“Se requiere que las ciudadanos no estén ausentes ante una clase política que, desde el punto de vista ciudadano, no ha respondido y claramente ha fallado,” dijo el Presidente de la República. Sociedad civil confronta a los poderes de la Unión El Universal, June 25, 2009

Translation: “It is necessary that the citizens not be seated behind a political class which, from the citizen’s point of view, clearly has failed,” said the President of the Republic. (President of Mexico, Felipe Calderon El Universal, June 25, 2009)

Every once in a while, a politician tells the unvarnished truth. It’s difficult to recall the last time it happened. Outgoing president Dwight D. Eisenhower’s 1961 warning of the dangers of the U.S. military-industrial complex comes to mind. Ike told the truth but too late to matter since he was leaving power.

President Calderon is just three years into his six year term as President of Mexico.

Just two days prior to Calderon’s statement, Andrés Manuel Lopez Obrador (ALMO), Calderon’s opponent in the bitterly contested 2006 presidential election, had filed a complaint against the media conglomerate owned television network, Televisa. Obrador argued that Televisa has shown extraordinary bias against his party, the PRD. Candidates are entitled to make complaints about biased coverage to the Federal Electoral Institute (IFE) created as part of Mexico’s 1990 election reform law.
(more…)

ENABLING ACTS FOR AN ERA OF GREED The Money Party at Work

ENABLING ACTS
FOR AN ERA OF GREED

The Money Party at Work

Michael Collins
Also published here

Huge majorities in both houses of Congress voted for legislation to allow the biggest bank heist of all time.   But this time, it was the banks pulling the heist.

Our financial system looks ruined beyond repair.  The credit default swaps crisis is 40 or so times bigger than the real estate meltdown over subprime derivatives.  The top 25 banks in the United States are loaded down with $13 trillion in credit default swaps and the deal is coming unraveled.  If we accept the highly dubious assumption that the debt from the financial meltdown needs to be repaid by us, were looking at $43,000 a citizen right now.  And we’re just starting.

It didn’t get that way by accident.  There was special legislation that enabled the current crisis.

This was classic Money Party strategy and tactics.

The strategic goal was to turn Wall Street into a big casino for the “in crowd” of major investors, funds, and institutions.  No rules and no regulations: “let the market take care of it” was the philosophy.

The tactics were easy.  First you set up a scholarly group called the Law and Economics movement to give your scheme legitimacy.  Then you give money and other favors to members of Congress.

At the right moment, you call in your congressional markers to let the banks start doing what they did to spark the Great Depression.  Walk into the Wall Street casino loaded with cash and spend like they’re on coke.  Your corny academic group has a couple of judges who decide a case that gives legal grace to the scheme.  The casino is legit says the court.  You then go for the whole nine yards by bringing back the long outlawed derivatives, subprimes, credit default swaps, etc.

The corporate media either ignores your “long con” altogether or covers it on their back pages.

Done deal!  It’s the perfect storm to create economic chaos allowing the most massive transfer of wealth since the Visigoths sacked Rome in 410 CE.  It’s all about socialism for the rich and survival of the fittest for the rest of us.

But Congress and the Treasury Department will preserve the financial elite in perpetuity.  Why?  To begin with, they’d have to admit that they created the problem in the first place with their enabling legislation.  Congress would also have to admit to absolutely zero oversight on this matter despite warnings.

Legislative, Judicial and Executive Branches – Acting in Unison Deliver the Goods

Three distinct events enabled the current economic chaos.  The baseline requirement for the era of greed was satisfied in 1999 when Congress repealed key provisions of the Glass-Steagall act. That law was established during the first Great Depression. It tightly restricted the opportunities for reckless speculation by banks..  They were barred from selling stocks and other speculative schemes.  Title 1 of Financial Services Modernization Act, 1999 says it all:

“Facilitating affiliation among banks, securities firms and insurance companies”

“Commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies can freely invest in each others businesses as well as fully integrate their financial operations.”

This was a bipartisan effort with the Senate version passing 90 to 8 and the House 362 to 57.

The once scorned derivatives had been the Holy Grail for “free” market radicals on Wall Street and elsewhere for years.  They said that the restrictions on these products were unnecessary and stifled the free market (“free” for them).  Even before Congress acted definitively in December 2000, the U.S. Court of Appeals for the 7th Circuit struck down the ability of the Securities and Exchange Commission (SEC) to rein in ruinous high risk financial schemes on Sept.1, 1999.

Reagan appointees Richard Posner, then chief judge, and current chief judge Richard Easterbrook were key movers.  They’re also heavily involved with the Law and Economics movement, a right wing, free market movement that opposes almost all regulation in Pavlovian fashion.

7th Circuit judges Richard Posner and Frank Easterbrook started the demolition of SEC regulatory power of high risk derivatives.

Credit default swaps and other derivatives had been illegal for decades.  In 1981, specific rules were set up to tighten restrictions against these schemes.  But all that changed on Dec. 21, 2000 when the lame duck Congress passed the “Commodity Futures Modernization Act of 2000′” making these products legal.  The legislation also barred the gathering of information that would serve as early warning on the legalized gambling on credit worthiness.  Regulators were helpless in looking out for the public.  Here’s the title of the House version of the bill:

“To reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the counter derivatives, and for other purposes106th Congress, 2nd Session,  H. R. 5660

This is the vital wording modifying the Securities Act of 1933 that undid the economy:

“Section 2A–Swap Agreements   The Commission is prohibited from — promulgating, interpreting, or enforcing rules; or issuing orders of general applicability.”  The Senate and House bills were combined in to H.R. 4577, an appropriations bill for the Departments of Labor, Health and Human Services, and Education signed by President Clinton.   Someone had a perverse sense of humor.

In other words, Congress legalized what had been illegal for decades and it secured the 7th Circuit’s opening gambit of handcuffing the SEC in dealing with the new high risk financial products.  Congress fixed the game so that the short staffed regulatory agencies couldn’t monitor the market even if they wanted that function.

Good luck trying to find the legislative debate on this momentous change.  There was none.  The enabling legislation for this disaster was passed by an overwhelming majority in the House of Representatives and by unanimous consent in the Senate.

It’s important to have a “Roll Call” for the sponsors of the “Commodity Futures Modernization Act of 2000.”  They made it happen.

Top row:  Senators (S. 3283:  Richard Lugar (R-IN), sponsor, cosponsors Senators Tom Harkin (D-IA) and Tim Johnson (D-SD).plus cosponsors, Retired Senators Peter Fitzgerald (R-IL), Phil Graham, (R-TX), Chuck Hagel (R-NE).  Bottom:  Representatives (all retired) (H.R. 5600)Thomas Ewing (R-IL) sponsor; cosponsors Thomas Bliley, Jr. (R-VA), John J. LaFalce (D-NY), Jim Leach (R-IA).

Expect More of the Same

The bailout and other efforts to save Wall Street firms and the large banks are essentially an effort to deal with the problems of derivatives and other market failures.  Wall Street got the court decisions and legislation it wanted and then promptly proceeded to create today’s disaster.

They sold these risky products and now they have to pay off.  But they don’t have the money even with the current bailouts.  Where will they get it?  The federal government was the only sucker left to tap and that bet came through to the tune of $4.6 trillion.  There’s $4.6 trillion awaiting further requests from the Federal Reserve

The culprits are still in place at failing financial institutions.

Don’t hold your breath waiting for political action to fix the situation.  Both parties were in on this mess.  Huge majorities in both houses of Congress voted for key legislation to allow the biggest bank heist of all time.  But his time, it was the banks pulling the heist.

That’s why the bankers have to stay in place.  To remove them, would be telling, as William K. Black said recently:

“But the other element of your question is we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.”

William K. Black, Apr. 3, 2009

But it was all legal, wasn’t it?

END

Permission to reproduce in whole or in part with a attribution of authorship and a link to this article

Bailout Blackmail – Just Say No! The Money Party (7)

The Money Party (7):

Bailout Blackmail


Image cc

Just Say No

Michael Collins

(Wash. DC)  We’re being blackmailed into accepting the responsibility and debt for the worst managed financial institutions in the history of this country.  The starting price, our debt, is $700 billion dollars.

What’s really about to happen is that the failed financial institutions will be rewarded for their bad behavior.  As a result, they and others will be encouraged to do it again.  It’s just a matter of time.

We’re under the gun and told that we have just days to make a decision to bailout these mismanaged entities.  The last thing they want is an open hearing on the problem.  Deliberation is deadly for them.

We’re told that our world will collapse; there will be a systemic breakdown if the president’s bailout legislation is not passed.  Without it, we’ll all be eating stale beans and rice for the rest of our lives.

How do you argue with a premise like that – vote yes and you get a chance to live.  Vote no and you’ll be soon living in a cold house or damp shelter, if you’re lucky enough to be off the street.

This is the same type of argument that was used to pass the Patriot Act after 9/11.  It had to be passed right away.  The vulnerability to attack was blamed on the Constitution.  We were asked to forget the president’s disregard for the many warnings of just such an attack.  The people paid for that egregious error through the loss of constitutional rights.

Now we’re told that to avoid economic ruin and all that portends, we must give up common sense, evaluation, and deliberation and allow more debt to be piled on our backs.

The largest financial institutions have made very bad decisions.  They bought into schemes that were senseless.  Subprime loans sold as premium securities and the looming credit derivatives melt down50 times larger than the subprime problem — are obvious losers just on the face of it.

How can grouping subprime loans create a stock that’s anything other than subprime?  What kind of institutional investor would bet your retirement on a subprime investment?

Why would anyone other than a very experienced financial expert get into anything as complex as credit derivatives?  Because the commissions on sales were huge.  For buyers, the short cut to profits was too good to resist.

So what are we supposed to do?  Give $700 billion to these companies to keep them afloat.  While those who marketed these flawed products bear some responsibility, the responsibility and blame grow as you move up the management chain to the top.  They all knew what was going on.  They ignored the certain risk and failure of these schemes for their personal benefit.

The culprit financial products, subprimes securities and derivatives, were bought and sold by many in the financial industry, including the firm formerly headed up by the Secretary of the Treasury.  Why should we trust any of them to decide who gets bailout money or how the firms receiving it are managed?

The debate in Congress is shaping up to be one over style rather than substance.  Both Republicans and Democrats agree that some sort of bailout bill needs to happen.  But the Democrats want oversight and monitoring, as if that will change a single thing.  The Republicans want centralized control by one person, the Secretary of the Treasury, with no review of who gets how much corporate welfare.

Here’s a message for the grossly irresponsible politicians, regulators, and financial firms.

Don’t tell us you’re going to do it right this time when you’re the people who got us into this mess.

Don’t tell us you that your interests are the same as ours.  You haven’t been able to have just one vote to eliminate the loophole that allows oil speculation responsible for high gas and home heating oil prices.  Why should we trust you now?

Don’t tell us that we can’t survive without these decadent financial entities.

This bailout makes no sense.  Listen to people with alternatives to financial blackmail.  Find solutions that impose a minimum of harm to the innocent and that create opportunities for all citizens.  Talk to some smart small business owners, union people, and a variety of citizens.  Deliberate in the open with all assumptions on the table.

Who will stand up for the people and say, let the failed firms bail themselves out or let them do what every citizen does in this situation, declare bankruptcy.

Why is it that the greater your failure, the greater your chances are for a debt canceling rescue?  The vast majority of citizens aren’t getting that option.

This is the first of many bailouts to come.  The time to say no is right now.  No bailouts.  No socialism for the rich with survival of the fittest for the rest of us.  And stop pretending you’re doing something by arguing about details when you’re doing nothing more than rewarding failure while you set us up for the next take down.

END

This article may be copied in whole or part with attribution of authorship, a link to this article, and acknowledgement for any images used.

Previously in The Money Party Series