Prediction Of More Bad To Come

I don't like being the bearer of bad news but I believe their is more bad news down the road for our ailing economy and the people of this country.  While the attitude of many - in places so high that it makes your nose bleed - is to report what I call "feel good" news.  News and reports that will make you think things are better and if you hear it enough you will begin to believe it.  Our government has been using this tactic for years now.

What I believe is in the best interest of the American people is the truth.  With the truth people can plan accordingly.  With false hopes of betterment, they might do things they will later regret.  The tendency is to spend more if you believe things are better and going to be even better.  If we have so called, bottomed out, then yahoo, let's spend again.

Spending in and of itself is not bad for the economy and can help in a recovery effort.  What is bad is that most spending does not occur with cash.  Spending is done with credit.  It is certainly enticing to obligate one's self to a future payment if that person is led to believe that they will be able to meet this future obligation.  Isn't that what got us into this mess to begin with? 

You cannot have a recover by spending more on credit.  You can't solve an economic crisis where everyone is over extended on credit by the use of more credit.

Therefore, it is vital that we know the truth.

"More Rough Times Ahead" was published in late September by RIS Media/ 

Despite recent signs of improvement, more rough times are ahead for the U.S. economy, according to several prominent experts in real estate and the economy who attended a recent forum at the Nixon Presidential Library.

Keep in mind that this was done well over a month ago but with the exception the indication that car sales increased (due to the cash for clunkers stimulous)  the other facts are still viable.
“You look at the numbers and everything points to the fact that we not only have bottomed, but things seem to be improving,” said Christopher Thornberg of Beacon Economics, citing increases in durable goods orders, exports and auto sales. He added, “When you think about the problems we’ve been through and what government has done, in many ways, they have, in fact, stabilized the economy. But you know what? They haven’t actually solved the underlying problems in the economy.”




Yes, the underlying problems of the economy.  Rising unemployment now up over 10%, increasing foreclosures, increasing credit card defaults and increasing commercial real estate defaults and new housing starts at its lowest level in decades are all underlying problems.

Until you have productivity, employment levels back to our previous averages and cash - not credit - flowing in our economy, there can be no recovery.

Obama promised us a stimulus that would provide millions and millions of dollars to repari our badly needed infrastructure.  He in fact said  that there are projects ready to go but for the lack of funding.  That sure was a great idea that certainly would have helped the economy rebound.  But, I have not seen any infrastructure work being performed on these "ready to go" projects.  Where did the funding go? 

While all of the panelists agreed that the economy will rebound in another two or three years, several pointed to tough economic conditions in the interim

Two or three years, not the 2010 recovery everyone seems to be talking about.  I now you can put 10 different economists into a room and get 10 different opinions. Affter all who can reallyl predict the future?  But the one thing we can do is look at the facts logically, analyze these facts logically and come to a logical conclusion - things are not going to get better for a while so prepare yourselves.

To date the only recovery I have seen is on Wall Street.  The reason for that as simple as I said above.  It takes cash to create a recover and Wall Street certainly got all of it.  I say, if that same amount of money were put out on the street, the infrastructure work begun, those and other jobs created, small business allowed to survive (unlike the "too big to fail" guys) we would begin to see an up tick.

Don't get the wool pulled over your eyes.  That has been happening all to much in our country for years.  The true figures of unemployment which takes into account those underemployed and off of the unemployment benefit roles total over 20%.  Ask the question, how can you have a jobless recovery that is meaningful?

Open your eyes adn see the reality of the real situation.  Take actions to allow your survival and take vocal action to change the way our system works.  Let's bring it back so that it works for the people not the "too big to fail" banksters.

Bring the Wall Street recovery down to Main Street. That is where the people live.

$13 Trilliond Dollars To Banks Outside of TARP

Tavis Smiley interviews ex Goldman Sachs executive Nomi Prins.  This link has a 9 minute video interview which is worth listening to.  She talks about "too big to fail" and the closeness of various people in government - past and present - to Wall Street, specifically Goldman Sachs.

She also talks about $13 trillion banks have received that we may never get paid back for.  All we hear about is the TARP funds which totaled $700 billion.  It seems that money just keeps flowing to Wall Street and the Banks yet money for the people's needs are always questioned as to "where are we going to get it" or "we are mortgaging our childrens future" or simplly, "we have a deficit now so we can't afford more".

There is trillions available for war and trillions available for banks but nothing to create jobs, to provide health care and support small business.  With starving children in this country you would think we could feed them as easily as we feed the banks.

Get more insight and more truth.

Goldman Whistleblower Nomi Prins Talks Banking Heist With Tavis Smiley - Home - The Daily Bail...click title to view.

Endorsers of significant change in banking

 Editor's Note:  Robdashu is a "guest writer" and contributor to the TMC FORUM.  He is amongst those that see the truth and is willing to speak out.  Look for more Guest Posts in the future.  

This post articulates the previous post

A Too Big Too Fail Apology From Former Citi Chairman

Alan Greenspan:

"If they're too big to fail, they're too big" - Alan finally recognizes the moral hazard of bailing out these risk-takers. They'll just do it again, expecting to be bailed out again.

Paul Volcker:

Volcker wants the splitting of commercial and investment banking back into separate entities; leave the risk-taking where it belongs - among those willing and able to take the risks; this still does not address the havoc that risky trading can bring to the system, and the unintended financial wounding of innocent bystanders. Still, a big step in the right direction.

Joseph Stiglitz:
(Nobel-prize winning economist)

The "too big to fail" banks have gotten even bigger since the crisis under Obama's guidance, and have not change their risky investment behavior. Stiglitz favors some kind of breakup of the mega-banks.

Paul Craig Roberts
(was Assistant Secretary of the Treasury in the Reagan administration)

Roberts compares the trading of financial derivatives like credit swaps to be tantamount to casino gambling. The bets on companies' financial positions open up all kinds of perverse incentives in this market.
Roberts article http://www.counterpunch.org/roberts10162009.html

Dominique Strauss-Kahn:
head of the International Monetary Fund,

":without a slimming down and restructuring of the banking system there can be no economic recovery":

"As long as the financial sector is not restructured, which means it has in some way to shrink, and some part of it has to just disappear," said Dominique Strauss-Kahn, Confidence has to be restored by recognition of all the losses [they have incurred]. Until this has been done confidence will not come back."

http://www.voanews.com/english/archive/2009-01/2009-01-26-voa62.cfm?moddate=2009-01-26

Simon Johnson, a professor at MIT’s Sloan School of Management, was the chief economist at the International Monetary Fund during 2007 and 2008.

A Too Big Too Fail Apology From Former Citi Chairman

History, it is said, is the greatest teacher. Yet many intelligent and knowledgeable people don’t seem to read history.

Corporate growth throughout the late 60’ the 70’s and into the 80’s flourished through Mergers and Acquisitions. Companies were gobbling up other companies in their own industries as well as other industries. The goal – to see how big they could get.

Paint companies were buying drug store companies, storage companies were buying hotel companies and companies were created just to buy up other companies like Great Western who bought Paramount Pictures and Associates Finance – a personal and auto loan company.

Throughout the 80’s Leveraged Buyouts was the rage. One company buying another company for virtually no money of their own, just using the assets of the target company to accomplish the purchase. The theory was that many of these companies who grew in previous years through Mergers and Acquisitions were worth more by selling off their pieces then they were keeping them whole. Contract to buy a company then sell off its subsidiaries to pay for the purchase.

What drove these Leveraged Buyouts in addition to the thirst for bigness, wealth and poser was the fact that many of them were “too big” and potential failure loomed. “Too Big” companies could not properly manage what they owned.

This fact drove many companies to sell off any subsidiaries that had that were not related to their “core” business. Bigger was not better.

With over 40 years of history, you would think that our highly paid corporate executives and especially our government would have learned the lesson as well. Instead, they embarked again on a known road to failure.

John Reed, former Chairman of Citi Bank was one who did not learn. He was obviously captured and captivated by the thought of GREATNESS. But now, out of the business world, looking at the crisis we are in which he helped to create, he humbly apologizes.

John Reed, Former Citigroup CEO, APOLOGIZES For Creating Monster Of A Bank The Huffington Post by Ryan McCarthy

Former Citigroup chairman and CEO, John Reed, has apologized to a Bloomberg reporter for his role in creating the ailing mega-bank, which has received $45 billion bailout funds and more than $300 billion in asset guarantees.
In other words, Reed, is essentially saying, sorry about that whole "too big to fail" thing.
Here's what Reed told Bloomberg:
"I'm sorry," Reed, 70, said in an interview yesterday. "These are people I love and care about. You could imagine emotionally it's not easy to see what's happened"...

He now proposes to curtail executive compensation and begin to break apart those “too big to fail” institutions. I think he read the history books too late.

Reed's apologia comes on the heels of his letter to the editor of the New York Times last week, in which he put forth his support for separating banks lending operations from their trading arms. In 1999 Congress repealed the 1933 Glass-Steagall Act, and opened the door for commercial banks to meld with trading houses.

When our economy was working well, we had usury laws that capped the interest rates that banks and finance companies could charge. At it height the maximum rate was 18%. Anything above that was considered “loan sharking”

When the economy was working well we had and enforced anti trust laws in effect limiting the ability of any one company to monopolize an industry and eliminate competition which in turn harmed the consumer = me and you.

When the economy was working well there were laws against price gouging. In fact, there still exist laws against price gouging, - the taking advantage of people by charging higher prices for needed commodities in times of trouble. Well, these are certainly times of trouble of most Americans yet we see price gouging almost everywhere – oil, food, insurance and most certainly in bank fees.

What is interesting to me however is that most of our current CEO’s and Congresspersons are old enough to remember “the way it was”. In other words, they are old enough to have witnessed first hand and participated in those earlier times I mention above. They didn’t’ even have to read any history books – THEY WERE THERE!

What we are actually experiencing is the need for greed, wealth and most of all power. These people know the history. Others in advisory positions to them know the history and certainly there are hundreds of business and economics professors in universities across this nation that knows.

They knew! They knew what the consequences of their actions would be but did not care. When you put billions of dollars into your pockets it is often difficult to determine right from wrong or even care.

We, the people, were also blinded by this. We were allowed a time of prosperity never before seen in our history. Everyone had virtually anything they wanted. Within the confines of your economic status and earnings, you could buy things you really couldn’t afford. Why, because those too big to fail guys knew if they diverted your attention you would not say or do anything about what they were doing.

They blinded us with the same form of greed they were using just a much lower level of it. They went for billions by allowing us to get thousands.

Break up the too big too fail

There are many who are in favor of breaking up those “too big to fail” institutions saying that if they are “too big to fail” they are simply just too big to exist. Two such proponents of breaking up the banks are former Fed Chairman Volker and current Chairwoman of the FDIC, Sheila Bair.

The banks would have you to believe that in order for them to be competitive globally they have to be as big – if not bigger then European and Asian banks. My question is competitive for whom? The large global institutions that are probably also “too big to fail?? This argument certainly does not apply to the American consumer.

I am one of those that believe that a mandated break up for anti-trust and monopoly reasons should occur. By concentrating almost half of our consumer banking in just four banks – Citi, JP Morgan, Bank of America and Wells Fargo – just does not work to the benefit of the consumer. It is only good for themselves and their enormous salaries and bonuses.

Competition, in basic economics, means that prices are held in check and also creates a more consumer conscious company. If you have no competition then why worry about good sound business practices and customer satisfaction? Two good examples of this would be your local or regional electric utility company. Have you tried to negotiate a better price with yours? Of course not – because there is no one else to go to.

Now, look at the cell phone industry. They are continually offering lower rate plans to gain more market share – a plus for the consumer. The consumer has a choice. But as I say that, the consolidations are occurring there as well. Verizon recently acquired Alltel, Sprint acquired Nextel, AT&T acquired Cingular and there are rumors out there that T Mobile and Sprint are working on joining forces.

Cable companies at one time also had no competition as each purchased the rights to an area in which no other cable company could operate. Remember those days before satellite? While single cable company operators still buy a franchise territory, the consumer does have the option of two other satellite companies. The result is a more cooperative, consumer friendly and lower cost services by all competitors.

The last case I will make for the breakup of “too big to fail” are the oil companies. If you are old enough – I am – to remember the old gas wars where the oil companies would lower gas prices almost on a daily basis to get more market share. Then they too realized that eliminating competition would work to their benefit and against the consumers. Oil companies began to merge. The Exxon merger with Mobil the biggest example of that. In addition, oil companies made agreements with each other as to territories. They agreed amongst themselves who would operate in what regions and gain the market share in that area. Competition was reduced greatly and we have all seen the results of that most recently.

There is a case for the breakup of the “too big to fail” banks.

One other item that should be considered in a break up argument is the idea of all banks limiting their business to consumer banking. They, as former Citi CEO, Reed, pointed out should not be in the insurance business nor should they be in the investment banking business. The latter having been recently reinvigorated when Congress agreed to giving investment banks such as Goldman Sachs, commercial banking status. Also, by the Fed’s prompting of allowing JP Morgan to purchase Bear Stearns and having Bank of America purchase Merrill Lynch.

It appears that whatever powers to be in our government are making a concentrated effort to limit competition to aid and abet “too big to fail” by aiding and abetting consumer destruction. I am not sure who and where those powers are but a look inside The Federal Reserve might give us an idea.

Mr. Reed, your apology comes somewhat too late. If you are sincere in your beliefs vocalized by your apology then you should use your power and influence to make the changes. What say you?

The Federal Reserve Loses Attempt For More Power

The Federal Reserve Chairman, Timothy Geithner had proposed a bill giving the Fed unprecedented "blanket" authority.  This authority included an unchecked ability to bail out their brethren banks at will, with no oversight whatsoever.

The pushback against an omnipotent Federal Reserve keeps growing.

In the Obama proposal, which was released in the House last week in the form of a draft bill, the Federal Reserve would have the authority to ignore the recommendations by a firm's primary regulator (be it a bank or securities regulator) and simply impose its own standards on the firm. The Fed would also have the power to examine the firm, and force the firm to comply with those standards if necessary.
In essence, if the other regulators didn't play ball the Fed's way, the Fed could shove them aside.

I watched the hearings when Geithner appeared to plead his case and was surprisingly pleased to see the out lash from both Democrats and Republicans.  I must admit they really laid into him and his displeasure was evident in his facial expressions and eye movement.  Almost as if he were saying, "how dare you question me, I am the true power here". 

Well as you will see in the Huffington Post's article, Federal Reserve Loses Expanded Powers Proposed By Obama Administration, Geithner - the omnipotent - did not get his way.

So on Thursday, House Financial Services Committee Chairman Barney Frank (D-Mass.) said he was changing that provision.

"There will not be a Federal Reserve power to overrule other entities," he said.

It seems to be another sign that dissatisfaction with the Fed as a regulator is starting to impact how legislators and policymakers attempt to fix what is largely seen as a broken and fractured regulatory regime.

The Federal Reserve Bank – The Fed – is a dangerous entity.  A private company, owned in secrecy with all the power over our monetary system.  It can increase and decrease inflation at will.  It can create and print money at will.  It can give out billions and trillions of dollars at will.  In reality, by controlling the money they control our country.  “They care not who makes its laws”.

If your eyes are as they say - the window to your sole - you need only look into the eyes of Geithner and his predecessor, Henry Paulson.  

Rep. Ron Paul has been fighting them tooth and nail – like him or not – he has a large following in both Houses of Congress in this fight against The Fed.

I commend the members of the House Services Committee and Barney Frank for once standing up for what is right and for standing up to that Omnipotent power, The Fed.

Read the full article…click here

Goldman Sachs: A Wall Street Crime Syndicate?

As posted in GoldmanSachs666.com

Wall Street Crime/Goldman Sachs Exposed by Allen L. Roland as reported in thepeoplesvoice.org News and Viewpoints

Greg Gordon, McClatchy News Investigative reporter, reveals how Goldman Sachs didn't tell buyers of 40 Billion in toxic Mortgage securities that it was secretly betting the other way ~ standard fare for a Wall Street crime syndicate that is about to become exposed:
As I have said for some time, it's an Oligarchy, folks ~ the tyranny of the elites with government and Wall Street ruled by the powerful few ~ and the Obama administration is part of it.

Read The Full Article...click here

This is another must read:
Allen L Roland's Radio Weblog:  "Ben Bernanke: A Stooge For The Oligarchy"

Allen is one of us and is a professonal investigative reporter.

Allen's philosophy:
My ongoing theme is always the truth , as I see it , and the exposure of lies, deception and manipulation wherever they exist. I remain firmly convinced that the world can no longer resist its innate urge to unite and co-operate with one another and we are very close to the point where war can no longer be an option if this transformation is to occur. Website: allenroland.com Email: allen@allenroland.com

It is apparent to me, to Allen and many others that our banking system is an ongoing criminal enterprise.  When will something be done about it?  There should be outrage from everyone.
Is the power of banksters so great that they can control the law?  Their activities are not without notice yet no law enforcement agency dares to take any action - including our United States Congress.  In fact, the banksters are aided and abetted by them.
If you are outraged, post a comment saying "I am outraged".  If we get enough of these we will forward them to the U.S. Attorney General's office.  We need to speak upo and out.  It is up to us to make a difference and get our country back to its rightful owners, the people, not the banksters.

Something has to be done - the evidence is everywhere.
See also:  My post in JPMorgan666.com:  "JP Morgan Gets Away With Bribery".  It can also be viewed at TheMortgageCornerFORUM.

Is FHA Broke and Contemplating A Cover UP?

Paul Muolo, editor and reporter for National Mortgage News has been one of the few in the media who has uncovered and reported the naked truth as to our financial breakdown. He has authored two very exposing books and continues to inform the public correctly.

In his recent weekly post in National Mortgage News column What We're Hearing, he reported on a planned HUD press conference where they were to disclose the results of their financial audit. The press conference was canceled the night before it was to occur with no explanation for cancellation at all.

Paul writes:

The next paragraph is for HUD secretary Shaun Donovan and FHADavid Stevens and concerns this past week's canceled press conference. The rest of you can scroll down to the next item. Shaun, Dave: What the heck happened? Who's advising you these days on media relations? (If you need any help give me a call. Let's do lunch. And, by the way, where's my FOIA on Lend America?) But seriously, gents: You don't call a press conference at the National Press Club in Washington and then cancel it the night before WITHOUT giving a real explanation. Shaun, you're in the president's cabinet! OK, so the audit looks a little dodgy and you're trying to get the numbers right. I get it - but don't put out a press release/e-mail without some explanation. Better yet, don't say you're even going to have a press conference and release the audit when it's not a sure thing. You wouldn't believe what the rumor mill was saying about FHA. (Remember: FHA has almost 30% of the market these days. Without it ... you can fill in the blank.) It sounds like the fund is broke but sources tell me it's not. Let me correct that, sources say there's still some money left in it. That's the good news. The bad news is that the fund covers $700 billion in mortgages. Meanwhile, the rumor mill says FHA premiums could rise. For the full story see Monday's NMN...

editors note: you must be a subscriber to read the full story.

Little has been said about FHA and even less reported by the media. but here is my comment submitted to Paul's post:

FHA:

It is curious that FHA - the FHA Commissioner and HUD Secretary - canceled the press conference that would have announced their audit. However, it is not surprising. Optimistically they both probably thought the audit would be fine then found out it wasn't (just my opinion).

Addressing it logically, why would it be OK? FHA was the government's creation of sub prime after which all other sub prime was fashioned. Even that so called very toxic Option Arm Loan was a creation of FHA back in the 80's.

FHA required NO credit scores and allowed credit to be established by use of utility bills, phone bills and financed auto insurance. If you had a 12 month good pay history on those - you HAD credit. Then FHA only required 3% of borrowers cash in the deal. It was not necessarily a down payment requirement, it could have been in the form of closing costs. So basically, FHA did 100% financing. To enhance credit, you could use a non occupant relative's credit as well. And to make it even easier to buy and qualify, the seller could pay up to 6% of the buyers closing costs, prepaids and escrows.

Editors Comment Not Found In Original: Fannie Mae and Freddie Mac - so called conforming loans - required a minimum of a 620 credit score, 5% cash down payment and seller could only pay up to 3% of closing costs, pp's and escrows.

The market for FHA loans was primarily low income borrowers (you could have a much higher debt to income ratio with FHA) with little or no credit. SO YOU THOUGHT SUB PRIME WAS BAD, huh?.

These low income borrowers with little or no credit are the main victims of our failed economy and would, I believe, be a large segment of our unemployed.

FHA INSURES these loans to the lenders that actually make and fund them. THEY DO NOT MAKE LOANS as many are led to believe. So basically they are an insurance company probably facing a larger number of claims then they have cash to pay them. Not unlike what happened with Credit Default Swaps that brought AIG down.

Editors Comment Not Found In Original: Credit Default Swaps were basically insurance against the security failing. Wall Street created them, collected premiums but never set any money aside to pay claims. Fraud?

There has been little or no investigation, conversation or reporting on FHA other then, as you say it accounts for almost 30% of the market now.

But if sub prime failed so miserably - and those loans were all securitized and sold as are FHA loans - the banks/lenders had and have no risk as the risk fell onto the insurance (FHA) fund. If AIG failed because of Credit Default Swaps why does anyone think FHA could have survived with an inadequate insurance fund?  Kind of the same.

Fannie and Freddie cooked their books and the delay in the press conference is probably a way to figure out HOW to HIDE the real numbers from the public.

I, for one, say the fund is broke.

JP Morgan Gets Away With Bribery

Editors Note:  This post was written for and published in JPMorgan666.com.  JPMorgan666 is now part of TheMortgageCornerFORUM family.  We are happy to be a part of other avenues exposing the truth.

In an adjunt to jrdeputyaccuntant's piece posted earlier today, it needs to be brought out that guilt is guilt regardless of the "bribe" (fine) paid so as not to be called guilty.

WASHINGTON -- JPMorgan Chase & Co. has agreed to a settlement worth more than $700 million over federal regulators' charges that it made unlawful payments to friends of public officials to win municipal bond business in Jefferson County, Ala.
Source:  GATA - Gold Anti-Trust Acton Committee

If this were you or me, we would have been charged under RICO as an ongoing criminal activity - which it is - convicted and spend the next few years handwriting posts to this blog for publication upon our release.  This is just another example of the corruption and conspircies that exist between our government and the "too big to fail" institutions using taxpayer money to gleen more profits to line their pockets and continue their suspicious(?) activities.

The Wall Street bank did not admit or deny the SEC allegations in agreeing to pay a $25 million civil fine, a $50 million payment to the county and to forfeit $647 million in termination fees it claims the county owes from the canceled swap agreements.

What is even more astonishing is that the forfeiture of the $647 million comes from another highly questionable transaction made by JP Morgan as reported previously right here.  So in reality JP Morgan did not pay $700 million to bribe their way out of this crime as most of that was money they were scamming the county out of to begin with.  RICO RICO RICO

The SEC also accused two former managing directors of JPMorgan, Charles LeCroy and Douglas MacFaddin, of securities law violations. The agency is seeking unspecified restitution from them. MacFaddin will contest the charges.

Yes, they could contest.  Not the charges but the fact that JP Morgan itself as well as its' top management should also be accused of securities laws violations.  Don't securities law violations carry jail terms if convicted? I guess not if you can afford to buy your way out.  The new double standard in the application of our laws. 

The SEC alleged that JPMorgan, LeCroy and MacFaddin made about $8 million in undisclosed payments to close friends of several Jefferson County commissioners. Starting in July 2002, LeCroy and MacFaddin solicited the county for a $1.4 billion sewer bond deal.

Here is where I get even more confused.  LeCroy and MacFadden could not have acted on their own without the knowledge and blessing of higher management - even as high as the CEO.  Come on now!  This is like believing Madoff got away with his crime for over 20 years without anyone at the SEC, Investment Banks and others in government knowing about it.  Somebody had to close a blind eye and that somebody would have been instructed to by someone very high up the political ladder.

JPMorgan failed to disclose any of the unlawful payments or conflicts of interest in the bond offering documents

If something is unlawful then is it not the responsibility of law enforcement to prosecute?  Where is our Attorney General of the United States?  Don't tell me he has a vision problem as well.

"The transactions were complex but the scheme was simple," SEC Enforcement Director Robert Khuzami said in a statement. "Senior JPMorgan bankers made unlawful payments to win business and earn fees."

How many times do we have to hear the word "unlawful" before it is payed attention to?  SEC Enforcement Director, you should be enforcing exactly what you state was "unlawful Payments" by "Senior JP Morgan bankers".  Also, how senior were these banksters anyway?

New York-based JPMorgan said in a statement it has since discontinued its municipal swap-exchange business.

OK, I see how it works.  All they have to say is "I'm sorry, I didn't mean to do anything wrong so I'll pay you a fine and promise to never do it again".  "Here is my get out of jial free card".
But that privilege does not pass down to smaller players in the game.  Those without the protection of "too big to fail" which is kind of like a Diplomatic Passport. 

The SEC previously charged Birmingham, Ala., mayor Larry Langford and two others for undisclosed payments to Langford related to municipal bond offerings and swap agreement transactions made while he was president of the Jefferson County Commission. On Oct. 28, Langford was found guilty in the related criminal case on 60 counts of bribery, mail fraud, wire fraud and tax evasion.

This is how our criminal injustice system works.  The big guys have Diplomatic Immunity while the little guy at the other end of the crime does not.  He is convicted of a crime in a criminal case on 60 counts of bribery, mail fraud, wire fraud and tax evasion (tax evasion is always brought into these crimes as a hedge against the law losing on the other charges.  A tax evasion charge brought by the IRS is difficult to beat).

However, it take two to be involved in bribery which the statement above says is criminal.  The bribor and the bribee.  If there was no bribor (JP Morgan) there would be no bribee (the Mayor).  How can one side of the crime be punished but the perpetrator of the crime go free and virtually unscathed?

At issue here and within our entire bankster system is the inequality of justice.  A two tier system where a law applies and can be used against one but is not used against another allowing them to continue their criminal activity.  RICO RICO RICO

I was once quoted in the National Law Journal as saying, "The law is the law for everyone".  Yet, it does not and has not been the way it is dispensed.  From the Attorneys General down to the lowest level civil court judge, a two tiered system of ruling on law.

Our system of government is failing us - the average person - and is working in favor of the large corporations who have capitalized their profits but socialized their losses.  Corporatons with no moral convictions - aided and abetted by our so called elected government - who should be representing the people - as it says in our Constitution.  You know that document signed by our Forefathers - the one that was shredded in the previous administration during which time these crimes really flourished.

I believe we are experiencing the rule of what I call a Shadow Government - people behind the scenes making the rules and the laws we live under.  A form of Fascist Socialism I fear.  Of course this is just my opinion, I could be wrong.

The Game: Taking Away People's Homes

Editors Note:  This article appears in and was written for
TheForeclosureDetonatorFORUM, a sister publication to TheMortgageCornerFORUM.

We have experienced the greates transfer of wealth in the history of this nation and perhaps the world.  the biggest game of Monopoly ever except the banks get to keep "the get out of jail card free" for the entire game.

We were like kids in a candy store who were told "you can have whatever you want".  We did!  As the old but relatively recent Chase Credit Card ads said, "i want it all and I want it now".  The ad was for you to use your credit card to buy something you really didn't need and really could not afford.

So too with homes.  The banks lured us into believing we could buy homes we could not afford.  They created - let me say again - THEY CREATED - the programs making it possible for us to qualify.  They approved - let me say again - they apporved our loans and funded them.  I, as a mortgage broker wondered why they were doing this.  I know and "they" knew that many of these loans would go bad.  (Note:  We never made loans beyond what people could really afford).

In court encounters, Goldman and other Wall Street firms have faced the impact of their own wheeling and dealing. Many of the families being put on the street never would've gotten their big mortgages if investment banks hadn't provided a seemingly insatiable secondary market for millions of loans to marginally qualified buyers. ....(from McClatchy in article linked below)

What I didn't know is that they had a grander plan.  Not only were they making billions selling our mortgage notes to unwary investors around the globe - using fraudulent AAA ratings - but as it turns out and is being proven, they are making more billions by "stealing" our homes. 

The banks crashed the economy and brought us to the brink of a Greater Depression all the while raking in as much cash as they could (transferring wealth).  Now, that there is little or no cash available the only other thing that is left is assets - mainly homes and other real estate. 

This was a plan executed with the full knowledge of our government who deregulated and turned the other way even when there was regulation.

Then the banks that made billions claimed they were broke.  No one ever asked them what happened to all those billions they made.  But of course, they all have overseas operations and I bet those bank accounts are pretty fat. 

As we all know, there is no real effort on the part of any bank to modify or work out a loan.  Their only purpose is to foreclose using any means - legal or illegal - to do so.

Here is just one more example of what is going on.  In an article published n McClatchy titled, "Goldman takes on new role: taking away people's homes" evidence is presented to subtantiate teh title.

The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender,

When a mortgage is sold the homewoner - borrower - must be notified.  Goldman obviously violated this requirement.

...even after they wrote to Goldman's then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003.

What did then CEO Paulson know about the plan that he so readily and shadily executed as Treasury Secretary?

Unable to identify a lender, the couple could neither capitalize on a mortgage hardship provision that would allow them to defer some payments, nor on a state law enabling them to offset their debt against separate, investment-related claims against Goldman.

It seems to me their rights were violated as our rights are being violated today in most foreclosures.

Read the full story...click here

Today, banks are saying they are buying mortgage notes but never seem to say from whom and provide a paper trail - chain of title.

Let me tell you a quick story of a friend who is in foreclosure.  The Plaintiff is Chase Home Loans, LLC, self acknowledged to be "the servicing company".

In their initial complaint (foreclosure filing) they included a copy of the mortgage obviously obtained from public records and a copy of the mortgage note.  In their initial filing with the court, they included a "Lost Note Affidavit" asking the court to allow them to re establish the note they claimed to have had possession and ownership of.  They claimed the note was "lost, stolen or destroyed". (As one judge in NY said to a banks attorney's, "was it lost, was it stolen or was it destroyed?  You should know which one it was as it could not be all of them")

Then when the Defendant, Pro Se,  filed his Motion To Dismiss for lack of standing, Chase Home Loans, LLC filed a Motion that included another copy of the mortgage note but this time the copy had an endorsement in blank on it.  They claimed that having the note with a blank endorsement in effect gave them the right to foreclosure.

BUT WAIT A MINUTE HERE! They said they did not have the note because it was "lost, stolen or destroyed".  So where did this one come from and how did it get the endorsement on it that the copy filed with the court originally DID NOT HAVE?  Could this possibly be Fraud on the Court?

Now it gets even better.  The Defendant received a letter from Chase Home Loan, LLC (as did another person I know) saying that Chase Home Loan, LLC purchased their mortgage note and now was the owner and holder and had the standing to foreclosure.

Hold on just a minute there Mr. Chase.  You initially said that you had and owned the note but couldn't find it.  Then you produced the note with a blank endorsement on it saying it was like a bearer bond so you now had th rights to it.  Now you say you just bought it! 

Why would you buy something you already owned and had evidently mysteriously found?  The other question is why would you buy a mortgage note that was in foreclosure on a property you know is not worth what is owed on it?  And lastly, who did you buy it from and can you produce a bill of sale or some documentation that must exist for a purchase of a note?

If this doesn't smell and look like fraud then George Washington's white horse was not really white.

Let's paraphrase all this:

You had the note but lost the note then the note was stolen and was also destroyed.

You found the note - a different copy of the note so you must have found the note that was destroyed.

Then you bought the note when you had the note that was lost, stolen or destroyed.

Now you have the note which you had before with new endorsement stamps on it that got there by the theives that stole it from you to begin with who just steal the notes to stamp the notes that were lost or stolen.

Too add insult to injury in Chase the servicing company as Plaintiff's last filing - an affidavit of fees - they again admit in this document that they are "the servicing company".  But if you bought the note would you not then state you were also the owner?

Banks are stealing our properties.  In another post we will discuss how the banks are taking the properties at the auction sales, paying no money for them getting the properties back with zero dollars.  Remember, that the bank that made you the loan DID SELL THE LOAN as a security to investors.  They got paid back for the money you borrowed - IN FULL plus.

Let me know if you are facing foreclosure against Chase Home Loans, LLC.

Editors Note:  This is not meant to be legal advice or opinion.  You should seek the advice and opinion of a licensed attorney. 

James Kenneth Galbraith on Bill Moyer's Journal

When I was working as a corporate drone, my wife and I (she worked at the same corporation) used to have a code phrase that we used to express disregard for others' response, indifference, or apathy - "F*** Them If They Can't Take A Joke". Others were supposed to roll with the punches like you , and "it's all a game, anyway"; the Dilbert philosophy.

I suspect the drones of the finance industry must adopt this attitude to some degree also, in order to distance themselves from the potential victims of their business dealings. But I just learned a new one: IBGYBG. In an interview with Bill Moyers, Galbraith says, on Freedman's long easy money run:

The Federal Reserve, in particular, knew that the dam was cracking. Alan Greenspan, I think, almost surely knew this, and chose to wait until it had washed away. “

Read the full story at: http://www.alternet.org/story/143649/bill_moyers_and_james_galbraith%3A_our_free_market_makes_economic_collapse_inevitable

IBGYBG - "I'll Be Gone, You'll Be Gone". This is the height of cynicism. James K. Galbraith, speaking on Bill Moyer's Journal, claims it has been a finance industry code for some time. The gist of this one is that, "by the time someone figures out that the arrangement we're selling stinks, we will not be held responsible".

I can imagine this one being applied on a daily basis as the big banks packaged and sold mortgages that they knew were questionable, since the borrowers had not been required to demonstrate their creditworthiness. It's a little like the old fascist rationale of "only following orders". Many of the people working in the finance industry were not in a position to alter the direction of their company's business practices, so I can imagine many were squeamish about the business they were operating. If they had been in the business long, they knew that they were incurring much greater risk by lowering qualification standards. If they understood the packaging into MBS's, they probably understood that someone was going to get screwed.

So this code - IBGYBG - was presumably used when an objection was raised on legal or ethical grounds in business strategy meetings. It's not a surprise when a CEO or executive gets hired immediately by an old competitor or some other corporation regardless of the condition he's left his old company in, and regardless of his own personal responsibility for the old company's problems. If the company crashes, it's probably on their resume that they were working on the bleeding edge at the behest of the company, only their luck went bad.

The effrontery, the presumption of suckers waiting to be had, the whole snake-oil salesmanship routine, are expressed quite adequately by this new (to me) code - IBGYBG. Just look the other way.

More Regulation or Different Regulation?

Anti-regulation folks are continually pointing out that intervention in business affairs is unwise. It seems they ignore the fact that, often, the reasons for bizarre market behavior [that disrupts "normal" market mechanisms and exposes everyone, even non-participants, to great financial risk] are the specific terms under which a business sector operates, i.e. the man-made rules that constrain [or don't] what economic actors can do. The government can foster more order and create rules that promote stability in the economy – a situation that most folks would desire. For instance, the government should regulate credit default swaps just like insurance, because that is what it is. Playing games with the names of financial products is also blatantly misleading. The “equity tranches” of mortgage-backed securities turned out to be the most risky, and most holders have experienced huge capital losses – though the word “equity” implies less risk. For those with perseverance, patience, and an appreciation of complex mechanisms see this SEC report:

www.sec.gov/news/studies/2008craexamination070808.pdf

Certain regs seem like no-brainers:

For instance, rating agencies: This function of assessing and broadcasting the creditworthiness of firms is very sensitive, and has large impacts on who gets money, and what is invested in. If they are doing a poor job, maybe their methods or approach can be improved. Is this an area that should be regulated? How much? Credit Default Swaps should be addressed at the same time - much more transparency is needed.

For instance, banks: the environment in which they manage assets is set up with many options for how, and in what, to invest. Each approach may have highly technical terms and mechanisms that are used to manage the risk of the contracts or limit their scope, or other purposes. These technical complexities can open the doors to bizarre incentives when conditions not previously anticipated occur. Yes, they are already regulated. How much is enough? Does regulation only need to be strongly prescriptive in the high-risk areas? "Normal" bank operations, before the emergence of investment banks of gargantuan proportions and the blurring of the lines between the two, saw "crises", but each was more contained and recoverable from [ In the 1980's, the S&L “crisis” was a dry run for the recent crash – a much smaller housing bubble ]. Some say that highly targeted regulation is required, not regulation which is a ball and chain on every participant in the economy. That approach seems short-sighted in that we it's rather like the dutchman's finger in the dike - we plug up the holes we see, but more will spring up. Rather than encumber our system with more layers of regulators, and more rules for them to try to enforce, simpler measures – limiting bank size, raising reserve margins, and requiring reasonable proof that a loan will perform as everyone expects before approval - should be considered.

For instance: dangerous overuse of leverage, packaging of debt instruments undermining confidence in the system. See last paragraph.

Finance businesses create opportunities for get-rich schemes that allow individuals to aggregate money, make a short-term profit, then get out [essentially, legal Ponzi schemes enabled by misinformation, mis-valuation, misrepresentation, mis-etc.]. Should the institution responsible for maintaining property rights get involved and mediate between parties when disputes occur? Of course they should. Are the courts sufficient to the task? That's debatable. If there is an ongoing problem with an aspect of the business system that keep recurring in the courts, perhaps the court is not the right venue to resolve these conflicts.

So we could have legislation to correct these defects. There are several drawbacks to that. Sometimes the changes required are highly technical. Sometimes they are very narrow and poorly understood, except by insiders. The number of instances requiring intervention/adjudication is quite large, and it is difficult to cover many perceived problems with simple changes. Legislators cannot micromanage, even if they wished to, due to the volume of complaints, and lack of consensus on solutions [especially among those who don't fully understand the issues - mostly not "insiders"; this makes the move from industry to regulator seem not so dumb - they know where the bodies are if they can be convinced to use a shovel!]. So our mechanisms for dealing with property rights issues create a need for regulation. Neither judicial or legislative intervention seems appropriate for some issues.

Essentially the entire body of western law derives from protection of property rights. Those who would have less government would also have more social friction due to less clarity over what an individual can do without being considered to be an infringement on his neighbor.

Some speak of regulation as if it were against "nature", whereas what it is against is the sometime inequity, unreasonableness, and occasionally just plain stupidity of the body of evolved man-made rules governing property rights. No offense intended to anyone involved in the evolution of these rules, but, as in nature, evolution can produce some pretty bizarre creatures!

Unintended effects and consequences are encountered regularly in most lines of business. When the risks are embodied in exotic financial instruments that only the Einsteins of finance seem to understand, we cannot allow huge institutions to use these financial instruments to gamble with a large portion of the wealth of the citizens of the U.S.