The U.S. Justice Department announced plans to file civil fraud
charges against Standard & Poor’s (S&P) relating to the
atrocious ratings that Standard & Poor’s gave to toxic subprime
mortgage-backed securities. (It is unclear whether their cohorts at
Moody’s and Fitch will be targeted by prosecutors as well.) This is a
welcome—if long overdue—development for investors who have been waiting
for years for the Feds to take decisive action against those responsible
for crashing the world economy.
New York Times reporters Andrew Ross Sorkin and Mary Williams Walsh report that
smoking gun e-mails and instant messages cited by the Feds show that
the folks at S&P were not duped by the securities’ issuers. They
knew exactly what they were doing. One S&P employee wrote, “Rating
agencies continue to create an even bigger monster — the C.D.O. market.
Let’s hope we are all wealthy and retired by the time this house of card
falters.” Another wrote in an instant message, “We rate every deal. It
could be structured by cows and we would rate it.”
To any fair-minded observer, these e-mails sure look like fraud
because the rating agencies projected an image that they were
“objectively” rating securities that were purchased by pension funds,
institutions and ultimately the Mom-and-Pop investors who often had
their retirement savings tied up in these funds. Instead, it appears
they were slapping bogus ratings on poor-quality, high-risk mortgage
bonds just to ensure they got their fees, ignoring the fact that real
people were counting on them to give an independent view of the safety
of the investments.
The Justice Department action follows a landmark decision by a New York
Federal Court holding that investors who were harmed by phony ratings
could sue the rating agencies for damages. After years of successfully
hiding behind a First-Amendment defense that their ratings were
opinions—not objective statements—and therefore Constitutionally
protected as free speech, the Court ruled in 2009 that the ratings were
not just opinions but rather misrepresentations resulting from either
fraud or negligence. That ruling ripped off the ratings agencies’ cloak
of immunity and set the stage for the Justice Department’s move.
We now know that the rating agencies rated “cows”, “dogs” and plenty
of “pigs.” Every mortgage-backed security and the various tranches or
“slices” of these securities dumped on investors had to have the ratings
agencies’ seal of approval to get out the door. Simply put, nobody
would buy them and they couldn’t be sold without the rating agencies’
imprimatur.
It has been revealed that the rating agencies were paid by the
companies they rated. This is reminiscent of the stock analyst scandal
of the year-2000 tech bubble where Merrill Lynch, Citigroup
and others gave high ratings to companies that did investment banking
business with their firms. One hand washed the other, the companies that
were given high ratings in essence paid the stock analysts’
multi-million-dollar salaries.
Imagine if a new so-called four-star restaurant paid a New York Times
reviewer to give it a top rating. This is exactly what occurred with
the rating agencies during the financial crisis, rating “garbage” stocks
and bonds as “top-shelf” investment products.
The announcement of the prosecutor’s lawsuit crashed the stock price
of Standard & Poor’s parent, McGraw Hill, as well as the stock of
Moody’s.
It really seems that finally, after five long years of just hoping
the problem would go away, the chickens are coming home to roost for
S&P, and Moody’s and Fitch probably feel their collars tightening
just a bit as well.
Disclaimer: Zamansky & Associates (www.zamansky.com) are securities attorneys
representing investors in federal and state litigation and arbitration
against financial institutions, including issuers and sellers of
mortgage-backed securities.
Wednesday, February 6, 2013
Poorest Americans could be fined under Obamacare
The latest criticism of the Obamacare act comes after a glitch was discovered embedded deep in the writing of the law. Thousands of families could become uni...
Half A Dozen Retailers Expected To Close Stores In 2013
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
While investors are gearing up for final earnings reports
for Q4 2012, many investors are turning sour on the notion of growth
opportunities for large retailers. In fact, about half a dozen big-name
retailers seem likely to cut locations during 2013 in attempts to
improve margins or reverse trends of loses blamed on online-retailers
and large discount outlets.Among these are names very familiar to the American consumer. Retailers such as Best Buy (BBY), Sears (SHLD), Office Depot (ODP), Barnes & Noble (BKS), RadioShack (RSH) and even Gamestop (GME) have seen declines in sales and seek to re-think their retail strategies in 2013. Despite the expected closings, one should note that store closings can often bring needed-relief to corporate balance sheets and free-up constrained capital for investments in new business segments. For example, The Gap (GPS) announced they will be closing 21% of their stores in 2011 and have since become more successful. In this case, downsizing has led to greater efficiency and better profit-margins.
Let's take a look at some of these on a case-by-case basis:
1. Best Buy, Inc. - Best Buy is expected to close anywhere between 200-250 of their 1,056 stores across the US after seeing a staggering 38% decline in one-year stock performance. Above this, same-store sales declined 1.4% from the 2011 holiday season. Combined holiday-season revenues dropped from $12.9b to $12.8b, leading the company to report a $0.04 loss per-share.
2. Sears - Both Sears and KMart brands have been losing middle and lower income customers to brands such as Target Corp (TGT) and Wal-Mart Stores Inc. (WMT). KMart is expected to close 175 to 225 stores with Sears expecting to close another 100-125 US locations. This would drop the total number of US stores from over 2,100 to around 1,750. Despite plans, the stock is up 8.8% from this time last year. 3. Office Depot - It doesn't seem like these guys can get a break. Office Depot has been coming across issues in its retail business since the days of OfficeMax Inc. (OXM) and Staples Inc. (SPLS) through its fierce targeting of the low-to-middle income demographic of consumers captured by big-box retailers like Wal-Mart. Despite the competition, the entire group has been losing customers to Amazon (AMZN). The group plans to close 125 to 150 of its 1,114 U.S. locations. Plans to strategically relocate or downsize as many as 500 locations have lead to a 50%+ increase in stock value over the last one-year.
4. Barnes & Noble - Forecasts include 190-240 of its 689 stores, according to comments made by the company. Despite efforts in 2012 to increase digital-books sales through its line of Book devices, sales have fallen 13% year-over-year. The company expects to have 450 to 500 stores in 10 years.
5. RadioShack - RadioShack has recently terminated its partnership with Target allowing 1500 retail mobile-phone kiosks throughout Target stores Despite their efforts, the stock has taken the largest hit of the group mentioned in this article with a 68.1% decline year-over-year. The company reports a $60 million operating loss in the 3rd quarter of 2012. Same store sales are down 1.6% year-over-year while revenue in the quarter fell 3.8%. In 2010 and 2011 the company closed more than 120 locations. With 4,412 locations across the country, RadioShack can be expected to cut up to an additional 450 to 550 stores during 2013.
6. Gamestop - Gamestop announced it would close 200 stores in 2013. Hurt by growth in mobile gaming, the company has seen a 4.6% decline in revenue over the last year. Gross profits have fallen over all three of the company's product-segments - hardware, software and used products. The company boasts 4,471 retail outlets with some analysts expecting to see 500 or even 600 store closings this year after a 2.2% decline in stock performance year-over-year.
Deadlock in Washington over agreement on a fiscal policy balancing new revenues with additional budget cuts has left many retailers uncertain about prospects for future growth. Above this, increased cost of employing staff due to expected raises in employer-sponsored healthcare costs stemming from healthcare reform legislation take effect later this year, adding stress on growth expectations, leaving American retailers in a peculiar position in terms of taking on risk. Harsh regulatory climates for small-businesses in sectors such as Finance and Healthcare have slowed down retail purchases by small and mid-sized business alike. Growth in online sales can be attributed to part of the decline in the retail sector.
Best Buy, Sears and Office Depot may go the way of The Gap and use this as an opportunity to organize more efficient internal processes and increase their rather lacking online presence. RadioShack may even be able to pull it off if they can somehow manage to shift resources back into more-profitable segments of their business such as electronics and unique electronic equipment. On the other hand, GameStop and Barnes & Noble seem to be in a peculiar situation. Both have been losing sales to digital media. With the growth of wireless networks and electronic distribution, these companies will need a major shift in strategy and marketing if they are to compete with the likes of Amazon and Apple's online media stores.
Some of these adjustments in investor expectations seem to already be priced into the stock price as is the case with Sears and Office Depot. However, Best Buy and RadioShack still seem to be taking a beating which leads me to believe they could make a good comeback in 2013 - especially if management can refocus their strategies to incorporate more online business and return to their more profitable business segments. For that reason, I recommend buying & holding both Best Buy and RadioShack .
With fewer and fewer business-owners and investors expecting policy-decisions leading to economic growth, will 2013 lead to massive downsizing and closing of large US retailer outlets. Or is there another factor that can bring the retail business a stronger year in 2013? We'll have to wait and see.
Obama: I’m Not Done Raising Taxes
Phillip Hodges Godfather Politics
In an interview with CBS that aired while most Americans were watching some big game they call the “Super Bowl,” Obama reiterated that he wants to raise additional revenue by closing “loopholes and deductions”:
“Well, I don’t think the issue right now is raising rates. The question is, if we’re going to be serious about reducing our deficit, can we combine some smart spending cuts, ‘cause there’s still some waste in government; can we reform our health care programs in particular, because we spend a lot more on health care than every other country does, and we don’t get better outcomes, so there’s a lot of waste in the system, and there are things that we can do to reduce health care costs; and can we close some loopholes and deductions that folks who are well-connected and have a lot of accountants and lawyers can take advantage of, so they end up paying lower rates than a bus driver or a cop, can we close some of those loopholes?”
“If we combine those things together, then we can not only reduce our deficit, but we can continue to invest in things like education and research and development that are going to help us grow…without raising rates again.”
“There is no doubt we need additional revenue coupled with smart spending reductions in order to bring down our deficit, and we can do it in a gradual way so that it doesn’t have a huge impact.”
First of all, he says, “If we’re going to be serious about reducing our deficit…” Well, they’re not serious, so everything after that conditional phrase is irrelevant. They don’t even acknowledge that they have a spending problem. Obama’s buddy Paul Krugman said there is no debt problem, nor is there a deficit problem. In fact, during this sluggish economy, it’s wise to run a deficit and increase spending.
Their thinking is that if they decrease spending, that would only contribute to unemployment because of all the government jobs that would be eliminated. So they have to find ways to expand government, thereby creating jobs for people who lost their private sector jobs (most likely because of government regulations and a government-created depression).
He wants to close loopholes and deductions that allow those “rich tax cheats” to dodge higher taxes. He said that it’s not fair that a bus driver has to pay a higher tax rate than a rich guy who has “connections” to good tax accountants. But Obama should be happy that he’s helped create a whole industry of accountants whose job it is to find ways for people to avoid paying higher taxes. That’s creating jobs.
But Obama doesn’t want those kinds of jobs. He wants people working government jobs, and once you become a prominent government worker or politician, then you can become a tax cheat (like Tim Geithner).
Later in the interview, Obama lamented that these rich people dodge the tax system by keeping their money in offshore bank accounts in the Cayman Islands. Well, Romney isn’t the only one with money in the Cayman Islands. Obama does too. So, what Obama really meant to say was that we need to demand that the rich pay their fair share unless that rich person works for the government (and preferably a Democrat) or a corporation that makes large contributions to Obama and his buddies.
In an interview with CBS that aired while most Americans were watching some big game they call the “Super Bowl,” Obama reiterated that he wants to raise additional revenue by closing “loopholes and deductions”:
“Well, I don’t think the issue right now is raising rates. The question is, if we’re going to be serious about reducing our deficit, can we combine some smart spending cuts, ‘cause there’s still some waste in government; can we reform our health care programs in particular, because we spend a lot more on health care than every other country does, and we don’t get better outcomes, so there’s a lot of waste in the system, and there are things that we can do to reduce health care costs; and can we close some loopholes and deductions that folks who are well-connected and have a lot of accountants and lawyers can take advantage of, so they end up paying lower rates than a bus driver or a cop, can we close some of those loopholes?”
“If we combine those things together, then we can not only reduce our deficit, but we can continue to invest in things like education and research and development that are going to help us grow…without raising rates again.”
“There is no doubt we need additional revenue coupled with smart spending reductions in order to bring down our deficit, and we can do it in a gradual way so that it doesn’t have a huge impact.”
First of all, he says, “If we’re going to be serious about reducing our deficit…” Well, they’re not serious, so everything after that conditional phrase is irrelevant. They don’t even acknowledge that they have a spending problem. Obama’s buddy Paul Krugman said there is no debt problem, nor is there a deficit problem. In fact, during this sluggish economy, it’s wise to run a deficit and increase spending.
Their thinking is that if they decrease spending, that would only contribute to unemployment because of all the government jobs that would be eliminated. So they have to find ways to expand government, thereby creating jobs for people who lost their private sector jobs (most likely because of government regulations and a government-created depression).
He wants to close loopholes and deductions that allow those “rich tax cheats” to dodge higher taxes. He said that it’s not fair that a bus driver has to pay a higher tax rate than a rich guy who has “connections” to good tax accountants. But Obama should be happy that he’s helped create a whole industry of accountants whose job it is to find ways for people to avoid paying higher taxes. That’s creating jobs.
But Obama doesn’t want those kinds of jobs. He wants people working government jobs, and once you become a prominent government worker or politician, then you can become a tax cheat (like Tim Geithner).
Later in the interview, Obama lamented that these rich people dodge the tax system by keeping their money in offshore bank accounts in the Cayman Islands. Well, Romney isn’t the only one with money in the Cayman Islands. Obama does too. So, what Obama really meant to say was that we need to demand that the rich pay their fair share unless that rich person works for the government (and preferably a Democrat) or a corporation that makes large contributions to Obama and his buddies.
What Does the Constituion Say About NAFTA, GATT and Other Bad Free Trade Deals?
The Father of our country George Washington made a warning in
his farewell address to the nation” stay out of foreign entanglements”.
The United states being a member of the World Trade Organization, the
result of being a part of an unelected and unaccountable group of people
has not been god for America. George Washington was right about the WTO
being one of many foreign entanglements that is de-industrializing
America.
I remember the political firestorm when Gibson Guitar was raided by the EPA and other federal agents over foreign law concerning a special wood used to make the fret board. When Gibson Guitar went to court. The US Attorney told the American guitar maker. The company would not be in trouble if the Factory was outsources offshore in Madagascar instead of Nashville Tennessee. Something is not right here. Why is the government destroying American jobs? Is it legal? Where is it in the Constitution for the US government forcing companies offshore that destroy American jobs?
Before the War of Independence to break free from British Monarch rule. The same thing was happening in the colonies where craftsmen are put out of work because under the East Indian Trading Company deal with King George III. All finished products and Goods could not be made in the colonies. They had to be produced in England or the other parts of the English empire. This was the agreement the King had with the East Indian Trading Company. This was the King and the English Aristocracy waging economic warfare on the colonies. Is there a difference today and back in the days of the English colonies? History does repeat itself. Nothing has changed.
When the Constitution was written. The congress and the President were designated only certain specific enumerated powers. I will show you why these free trade deals are unconstitutional.
Many of these free trade treaties were passed by congress with a simple majority. Thats is illegal. These Free trade deals needed to be ratified under Article 2 sec. 2:
He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur;
Where these free trade deals are unconstitutional can be found in Article 6:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
So where does to the contrary withstanding come in? It can be found in Article 1 sec. 8
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
and in Article 1 sec. 9 when it comes to keeping monopolies from rising up and no giving preference to one party over another.
No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
We see Monsanto and General Electric and other multinational corporation pushing for regulations to make it impossible to maintain a factory so they have the excuse to pack up and move to China and to shut down the competition for those companies that want to remain inside the United States.
Congress is supposed to protect the manufacturing and industry in this country in article 1 sec 8 protecting our industry with tariffs and duties.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
These Multinational corporations write the laws to exempt themselves for the taxes, tariffs and regulations while using the force of government to do there dirty work. The Constitution is very clear on these bad free trade deals. The Constitution is very clear about no preference given over one party over another. Again repeating in the Constitution state in Article 1 sec 8:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
Congress and the President are supposed to be promoting companies like Gibson Guitars to protect the workers under the” Useful Arts” The US Government is supposed to be promoting the American truck driver, especially the owner operators. They are being driven out of business because the preferential treatment given to Mexican truck drivers because exempt from all the safety laws and regulations that are imposed on the American truck drivers that are costly. They use the word regulating commerce to restrict economic freedom in Article 1 sec 8:
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Politicians use the twist the commerce clause to stifle productivity. They should be promoting the “progress of sciences” with these coal power plants that do not emit smoke. Only water vapor and carbon dioxide. Are they promoting the science that make coal plants clean? No they are not. They are promoting General Electric who wrote the rules and regulations exempting themselves they impose on their competition. GE is shipping jobs overseas too who had the tungsten light bulbs banned so they can sell their florescent light bulbs that are dangerous.
The constitution is very clear that free trade deals and treaties are unconstitutional. Our technology and out skilled craftsmen must be promoted over the outsourcing of jobs to a third world nation. There must be no favoritism favoring one party over another. No one is above the law. The Constitution is not silent about unfair trade deal that put American jobs and skilled craftsmen at a unfair disadvantage.
We need to study the Constitution and tell our congressmen where in the Constitution where these free trade deals and preferential treatment to one corporation to shut down the competition is forbidden by the Constitution too. Study all of the Constitution, not just the bill of rights. You will find the Constitution does protect jobs, our crafts, sciences as well as our bill of rights. The Constitutions is our, We own it, it is not the property of the government. Let Congress not ignore it or be ignorant of it.
I remember the political firestorm when Gibson Guitar was raided by the EPA and other federal agents over foreign law concerning a special wood used to make the fret board. When Gibson Guitar went to court. The US Attorney told the American guitar maker. The company would not be in trouble if the Factory was outsources offshore in Madagascar instead of Nashville Tennessee. Something is not right here. Why is the government destroying American jobs? Is it legal? Where is it in the Constitution for the US government forcing companies offshore that destroy American jobs?
Before the War of Independence to break free from British Monarch rule. The same thing was happening in the colonies where craftsmen are put out of work because under the East Indian Trading Company deal with King George III. All finished products and Goods could not be made in the colonies. They had to be produced in England or the other parts of the English empire. This was the agreement the King had with the East Indian Trading Company. This was the King and the English Aristocracy waging economic warfare on the colonies. Is there a difference today and back in the days of the English colonies? History does repeat itself. Nothing has changed.
When the Constitution was written. The congress and the President were designated only certain specific enumerated powers. I will show you why these free trade deals are unconstitutional.
Many of these free trade treaties were passed by congress with a simple majority. Thats is illegal. These Free trade deals needed to be ratified under Article 2 sec. 2:
He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur;
Where these free trade deals are unconstitutional can be found in Article 6:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
So where does to the contrary withstanding come in? It can be found in Article 1 sec. 8
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
and in Article 1 sec. 9 when it comes to keeping monopolies from rising up and no giving preference to one party over another.
No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another; nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
We see Monsanto and General Electric and other multinational corporation pushing for regulations to make it impossible to maintain a factory so they have the excuse to pack up and move to China and to shut down the competition for those companies that want to remain inside the United States.
Congress is supposed to protect the manufacturing and industry in this country in article 1 sec 8 protecting our industry with tariffs and duties.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
These Multinational corporations write the laws to exempt themselves for the taxes, tariffs and regulations while using the force of government to do there dirty work. The Constitution is very clear on these bad free trade deals. The Constitution is very clear about no preference given over one party over another. Again repeating in the Constitution state in Article 1 sec 8:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
Congress and the President are supposed to be promoting companies like Gibson Guitars to protect the workers under the” Useful Arts” The US Government is supposed to be promoting the American truck driver, especially the owner operators. They are being driven out of business because the preferential treatment given to Mexican truck drivers because exempt from all the safety laws and regulations that are imposed on the American truck drivers that are costly. They use the word regulating commerce to restrict economic freedom in Article 1 sec 8:
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Politicians use the twist the commerce clause to stifle productivity. They should be promoting the “progress of sciences” with these coal power plants that do not emit smoke. Only water vapor and carbon dioxide. Are they promoting the science that make coal plants clean? No they are not. They are promoting General Electric who wrote the rules and regulations exempting themselves they impose on their competition. GE is shipping jobs overseas too who had the tungsten light bulbs banned so they can sell their florescent light bulbs that are dangerous.
The constitution is very clear that free trade deals and treaties are unconstitutional. Our technology and out skilled craftsmen must be promoted over the outsourcing of jobs to a third world nation. There must be no favoritism favoring one party over another. No one is above the law. The Constitution is not silent about unfair trade deal that put American jobs and skilled craftsmen at a unfair disadvantage.
We need to study the Constitution and tell our congressmen where in the Constitution where these free trade deals and preferential treatment to one corporation to shut down the competition is forbidden by the Constitution too. Study all of the Constitution, not just the bill of rights. You will find the Constitution does protect jobs, our crafts, sciences as well as our bill of rights. The Constitutions is our, We own it, it is not the property of the government. Let Congress not ignore it or be ignorant of it.
Student Loan Bubble Forces Yale, Penn To Sue Their Own Students
We have not been shy about exposing the massive (and unsustainable) bubble of credit being blown into the economy via Student Loans from the government. We have not been afraid to note the dramatic rise in delinquencies among these loans
- and the implications for the government. However, as Bloomberg
reports, it appears the impact of this exuberance has come back to bite
the colleges themselves. In what can only be described as a vendor-financing model, the so-called Perkins loans (for students with extraordinary financial hardships) have seen defaults surging more than 20%. The vicious circle, though, has begun as the
ponzi of using these revolving loan funds to 'fund' the next round of
students is collapsing thanks to the rise in delinquencies. Schools
such as Yale, Penn, and George Washington are becoming very aggressive
at going after delinquent student borrowers. While financially hard-up
graduates complain of no jobs, the schools are not impressed: "You could take a job at Subway or wherever to pay the bills ... It seems like basic responsibility to me," but perhaps that is the point - avoiding responsibility is seemingly rewarded in the new normal.
Via Bloomberg,
Yale Suing Former Students Shows Crisis in Loans to Poor
Needy U.S. borrowers are defaulting on almost $1 billion in federal student loans earmarked for the poor, leaving schools such as Yale University and the University of Pennsylvania with little choice except to sue their graduates.
The record defaults on federal Perkins loans may jeopardize the prospects of current students since they are part of a revolving fund that colleges give to students who show extraordinary financial hardship.
Yale, Penn and George Washington University have all sued former students over nonpayment, court records show. While no one tracks the number of lawsuits, students defaulted on $964 million in Perkins loans in the year ended June 2011, 20 percent more than five years earlier, government data show. Unlike most student loans -- distributed and collected by the federal government -- Perkins loans are administered by colleges, which use repayment money to lend to other poor students.
“If you borrow to go to school, it may not be just the government that ends up coming after you if you can’t pay,” said Deanne Loonin, an attorney with the National Consumer Law Center, a nonprofit advocacy group in Boston. “We offer credit very easily.” If the student doesn’t benefit financially from the education, “the government or the school comes after them very aggressively.”
Perkins Pot
The increase in the amount of defaulted loans among poor students comes as President Barack Obama says he wants to expand access to college for working-class families and increase funding for the Perkins program. Under his proposal, the pot for Perkins loans would increase to $8.5 billion from about $1 billion. The Education Department would service the loans instead of colleges.
Aaron Graff, a farmer’s son from Denver, graduated from George Washington in 2010 with the help of $62,500 in scholarships over two years, according to his financial-aid award letters. He defaulted on $4,000 in Perkins loans.
Graff, 30, said he hasn’t been able to find a full-time job. He earns $800 a month from teaching high-school equivalency courses and restores basements for extra money. He said he is trying to pay off other student loans first because they were co-signed by his parents.
“I live on the bare minimum,” he said. “It’s not like I’m defaulting on my student loans to live the lavish life. I’m defaulting on my loans because I really don’t have it.”
...
Student Obligations
“Perkins loans are issued from a revolving fund, so any monies recovered through litigation increase universities’ ability to help other students with education costs,” Candace Smith, a spokeswoman for George Washington, said in an e-mail. The university doesn’t comment on specific lawsuits, she said.
...
“You could take a job at Subway or wherever to pay the bills and that’s something you need to do if you have agreed in taking a loan to pay it back,” McCluskey said. “It seems like basic responsibility to me.”
The interest rate on Perkins loans is 5 percent, and students get a nine-month grace period after leaving school or graduating. In the 2007-2008 academic year, 64 percent of Perkins loan recipients reported parental income of less than $50,000, according to Mark Kantrowitz, who runs finaid.org, a website on educational lending.
College Costs
With college costs climbing faster than the rate of inflation over the past four decades, students have taken out more loans, swelling outstanding education debt to $1 trillion, more than what Americans owe on their credit cards.
The University of Pennsylvania filed at least a dozen Perkins lawsuits last year, according to court records. Penn, based in Philadelphia, gave out more than $8 million in Perkins loans in the year ending June 2012, according to the school.
...
Promissory Note
...
Penn refers loans to a collection agency when they have been delinquent for 120 days. Michelle Brown-Nevers, an associate vice president, declined to discuss thresholds because she said she didn’t want to reveal collection practices.
...
Yale is suing Elizabeth M. Triggs, who studied there between 2001 and 2006 and signed five promissory notes totaling $8,255 under the Perkins program, according to a filing in Superior Court of New Haven last year.
Unpaid Perkins
...
Students who take out Perkins loans aren’t eligible for government income-based repayment plans when they run into financial trouble, unlike borrowers from the more popular Stafford loan program used by many middle-income families. Such repayment plans let students with high debt relative to their paychecks make smaller payments over time. Colleges can work with Perkins students to develop individual plans.
Financial Counseling
...
The federal government also lets universities and debt collectors charge higher collection fees than Stafford when they pursue a Perkins debtor.
On the first attempt, schools can charge 30 percent of loan principal, along with interest and late fees. They can charge 40 percent for the second effort and an additional 40 percent on litigation, according to the Education Department.
The fees are higher than the 25 percent allowed for government-backed Stafford loans because the lower value of the Perkins ones makes them less appealing to collection agencies in terms of commissions, said Dan Madzelan, a former Education Department official.
Not Practical
The University of California system tries to use its own personnel before suing Perkins debtors because balances are relatively small, said Coolidge. When borrowers don’t have assets or income, winning a judgment doesn’t actually result in collecting the money, she said.
“It’s not that we wouldn’t do it,” she said. “It’s not that practical.”
Via Bloomberg,
Needy U.S. borrowers are defaulting on almost $1 billion in federal student loans earmarked for the poor, leaving schools such as Yale University and the University of Pennsylvania with little choice except to sue their graduates.
The record defaults on federal Perkins loans may jeopardize the prospects of current students since they are part of a revolving fund that colleges give to students who show extraordinary financial hardship.
Yale, Penn and George Washington University have all sued former students over nonpayment, court records show. While no one tracks the number of lawsuits, students defaulted on $964 million in Perkins loans in the year ended June 2011, 20 percent more than five years earlier, government data show. Unlike most student loans -- distributed and collected by the federal government -- Perkins loans are administered by colleges, which use repayment money to lend to other poor students.
“If you borrow to go to school, it may not be just the government that ends up coming after you if you can’t pay,” said Deanne Loonin, an attorney with the National Consumer Law Center, a nonprofit advocacy group in Boston. “We offer credit very easily.” If the student doesn’t benefit financially from the education, “the government or the school comes after them very aggressively.”
Perkins Pot
The increase in the amount of defaulted loans among poor students comes as President Barack Obama says he wants to expand access to college for working-class families and increase funding for the Perkins program. Under his proposal, the pot for Perkins loans would increase to $8.5 billion from about $1 billion. The Education Department would service the loans instead of colleges.
Aaron Graff, a farmer’s son from Denver, graduated from George Washington in 2010 with the help of $62,500 in scholarships over two years, according to his financial-aid award letters. He defaulted on $4,000 in Perkins loans.
Graff, 30, said he hasn’t been able to find a full-time job. He earns $800 a month from teaching high-school equivalency courses and restores basements for extra money. He said he is trying to pay off other student loans first because they were co-signed by his parents.
“I live on the bare minimum,” he said. “It’s not like I’m defaulting on my student loans to live the lavish life. I’m defaulting on my loans because I really don’t have it.”
...
Student Obligations
“Perkins loans are issued from a revolving fund, so any monies recovered through litigation increase universities’ ability to help other students with education costs,” Candace Smith, a spokeswoman for George Washington, said in an e-mail. The university doesn’t comment on specific lawsuits, she said.
...
“You could take a job at Subway or wherever to pay the bills and that’s something you need to do if you have agreed in taking a loan to pay it back,” McCluskey said. “It seems like basic responsibility to me.”
The interest rate on Perkins loans is 5 percent, and students get a nine-month grace period after leaving school or graduating. In the 2007-2008 academic year, 64 percent of Perkins loan recipients reported parental income of less than $50,000, according to Mark Kantrowitz, who runs finaid.org, a website on educational lending.
College Costs
With college costs climbing faster than the rate of inflation over the past four decades, students have taken out more loans, swelling outstanding education debt to $1 trillion, more than what Americans owe on their credit cards.
The University of Pennsylvania filed at least a dozen Perkins lawsuits last year, according to court records. Penn, based in Philadelphia, gave out more than $8 million in Perkins loans in the year ending June 2012, according to the school.
...
Promissory Note
...
Penn refers loans to a collection agency when they have been delinquent for 120 days. Michelle Brown-Nevers, an associate vice president, declined to discuss thresholds because she said she didn’t want to reveal collection practices.
...
Yale is suing Elizabeth M. Triggs, who studied there between 2001 and 2006 and signed five promissory notes totaling $8,255 under the Perkins program, according to a filing in Superior Court of New Haven last year.
Unpaid Perkins
...
Students who take out Perkins loans aren’t eligible for government income-based repayment plans when they run into financial trouble, unlike borrowers from the more popular Stafford loan program used by many middle-income families. Such repayment plans let students with high debt relative to their paychecks make smaller payments over time. Colleges can work with Perkins students to develop individual plans.
Financial Counseling
...
The federal government also lets universities and debt collectors charge higher collection fees than Stafford when they pursue a Perkins debtor.
On the first attempt, schools can charge 30 percent of loan principal, along with interest and late fees. They can charge 40 percent for the second effort and an additional 40 percent on litigation, according to the Education Department.
The fees are higher than the 25 percent allowed for government-backed Stafford loans because the lower value of the Perkins ones makes them less appealing to collection agencies in terms of commissions, said Dan Madzelan, a former Education Department official.
Not Practical
The University of California system tries to use its own personnel before suing Perkins debtors because balances are relatively small, said Coolidge. When borrowers don’t have assets or income, winning a judgment doesn’t actually result in collecting the money, she said.
“It’s not that we wouldn’t do it,” she said. “It’s not that practical.”
Amazon Coins: Retail Giant Announces Its Own Currency
Amazon has announced its own currency.
For now it's limited to Amazon's app store used with its Kindle tablets.
But there is also speculation the system could extend to other areas of the company's shopping empire.
The online retail giant said that Amazon Coins would be used as an "easy way for Kindle Fire customers to spend money on developers’ apps in the Amazon Appstore".
The currency will be launched in May, with a special promotion giving users of its app store "tens of millions of dollars' worth of free Amazon Coins" to spend on apps.
Developers will make 70% of the sales on every purchase.
Above: one of Amazon's 'coins'
Amazon said in a statement:
For now it's limited to Amazon's app store used with its Kindle tablets.
But there is also speculation the system could extend to other areas of the company's shopping empire.
The online retail giant said that Amazon Coins would be used as an "easy way for Kindle Fire customers to spend money on developers’ apps in the Amazon Appstore".
The currency will be launched in May, with a special promotion giving users of its app store "tens of millions of dollars' worth of free Amazon Coins" to spend on apps.
Developers will make 70% of the sales on every purchase.
Above: one of Amazon's 'coins'
Amazon said in a statement:
"For customers, it's an easy way to spend money on Kindle Fire apps and games. They'll be able to purchase as they do now, but with the ability to choose to pay with a credit card or using Coins. For you, it's another opportunity to drive traffic, downloads, and increased monetization. Plus, there's no integration required--you'll get paid the same 70% revenue share whether the customer chooses to use Coins or their own money."
BURGLAR ALARMM !!! YOUR 401(K)'s ARE NOT SAFE!!!
The federal government is deciding whether to take over the management of all 401(k)'s.
YEP they will manage it, not you or a private firm. WHY read on!!!
The United Stats is 16 trillion + in debt and increasing by 500 billion every 5 months.
BUT!!! There is 19.4 trillion dollars in private 401(K)'s. And guess what!!! If the government is the manager they can borrow from all funds.
YUP the government will borrow your money and you will get a promisary note. YEA Try to cash one in.
PROTECT your retirement, vote the democRATS out but keep an eye on things so that you can save your retirement.
GOOD BYE 19.4 TRILLION DOLLARS, GOOD-BYE RETIREMENT
Have a great retirement if the FUKKING GOVERNMENT DOESN'T TAKE ALL YOU MONEY!!!
YEP they will manage it, not you or a private firm. WHY read on!!!
The United Stats is 16 trillion + in debt and increasing by 500 billion every 5 months.
BUT!!! There is 19.4 trillion dollars in private 401(K)'s. And guess what!!! If the government is the manager they can borrow from all funds.
YUP the government will borrow your money and you will get a promisary note. YEA Try to cash one in.
PROTECT your retirement, vote the democRATS out but keep an eye on things so that you can save your retirement.
GOOD BYE 19.4 TRILLION DOLLARS, GOOD-BYE RETIREMENT
Have a great retirement if the FUKKING GOVERNMENT DOESN'T TAKE ALL YOU MONEY!!!
US sues S&P after triple-A downgrade
Reuters / Charles Platiau
In a Monday evening filing in federal court, the US Justice Department introduced civil charges against S&P, one of the top three rating agencies in the country, claiming that the group “knowingly and with the intent to defraud, devised, participated in and executed a scheme to defraud investors” between September 2004 and October 2007.
According to the government, S&P’s ill-guided ratings decisions artificially inflated the value of certain mortgage bonds, setting up the American economy for the catastrophic collapse that signaled the single-greatest economist disaster in the country’s history since the Great Depression. S&P lied, the government claims, when they insisted their ratings “were objective, independent, uninfluenced by any conflicts of interest.”
In a statement of response issued after the announcement, S&P writes, “A DOJ lawsuit would be entirely without factual or legal merit.”
“It would disregard the central facts that S&P reviewed the same subprime mortgage data as the rest of the market – including U.S. government officials who in 2007 publicly stated that problems in the subprime market appeared to be contained – and that every CDO that DOJ has cited to us also independently received the same rating from another rating agency,” the company fired back.
Should the Justice Department see a success in federal court, S&P could be stuck spending millions, perhaps billions, to pay back the government over allegations of fraud. For now, however, neither of other big raters — namely Moody’s and Fitch — have been linked to the scandal.
“[W]e have no reason to believe Fitch is a target of any such action,” Fitch spokesperson Daniel J. Noonan tells Forbes this week. The outlet says representatives for Moody’s declined to comment, but a 53 cent surge for the company during Tuesday’s opening bell suggests that, at least for many, Moody’s is in the clear.
Anthony Sabino, a professor at St. John’s University‘s Peter J. Tobin College of Business, tells Forbes that “This is part of the federal government’s continued effort to ‘round up’ anybody and everybody allegedly culpable in the financial crisis.” With S&P being the only entity singled out for now, though, it has others singing a different tune. Could the charges against only S&P suggest something motivated by more than just holding credit raters responsible?
If the Justice Department has a bone to pick with any credit rater, it’s S&P. While the bonds they sold to banks ended up to 2007 indeed ended up being at least partially responsible for the recession that followed, that wasn’t the last time S&P made serious headlines. In August 2011, the agency dropped their credit rating of the United States, downgrading it from triple-A for the first time in 70 years.
"The downgrade reflects our opinion that the … plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics,” S&P reasoned at the time, citing the government’s inability to put partisan bickering aside during that year’s debt ceiling debate.
“Given that S&P issued a historic downgrade of U.S. creditworthiness in August 2011 and has threatened to take that rating down a further notch, the pending suit is raising questions of whether it actually amounts to retaliation,” Kevin G. Hall and Greg Gordon write now for McClatchy Newspapers.
Additionally, McClatchy reports that Moody’s was on the Justice Department’s radar for around three years, but an investigation wrapped up in the summer of 2011 with the conclusion that the company would be spared charges. That decision, of course, coincided with S&P’s downgrading of the US credit rating. One source, speaking on condition of anonymity, tells McClatchy that Moody’s was in the clear after S&P’s 2011 downgrade.
“Why S&P? Because they downgraded the United States,” former Moody’s employee Sylvain Raynes adds to the paper.
The Start Of A Historic Global Financial Meltdown: US Economy Is Slipping Into Reverse, Europe Goes Back Into Collapse Mode, And Hyperinflation Is Coming To Every “Developed” Country Near You!!
by Bill Bonner, Daily Reckoning.com.au:
‘US economy slips into reverse,’ was the headline in the Financial Times.
The US economy didn’t move ahead in the last quarter of 2012. Instead, it started backing up at a 0.1% annual rate, to be precise.
That didn’t seem to bother anyone. They hardly noticed; and they didn’t seem to care what direction it was actually going. The Dow slid a little, but not much.
In the bar car, journalists generally dismissed the whole thing. It was a kind of optical illusion, they seemed to think, caused by the fact that the gunslingers had been a little slow on the draw in the waning months of 2012….
‘US economy slips into reverse,’ was the headline in the Financial Times.
The US economy didn’t move ahead in the last quarter of 2012. Instead, it started backing up at a 0.1% annual rate, to be precise.
That didn’t seem to bother anyone. They hardly noticed; and they didn’t seem to care what direction it was actually going. The Dow slid a little, but not much.
In the bar car, journalists generally dismissed the whole thing. It was a kind of optical illusion, they seemed to think, caused by the fact that the gunslingers had been a little slow on the draw in the waning months of 2012….
American Debt Rating Downgrade Coming, While Half of American Families Already on the Edge of Financial Ruin
from Fabian4Liberty:
How Many Illegal Immigrants Live in Your State?
A map of estimated illegal immigrant population, state by state.
A bipartisan group of senators this week outlined a plan for
comprehensive immigration reform, an issue President Obama has asked
Congress to tackle in the first half of the year. Since the last major
overhaul of U.S. immigration policy, the Immigration Reform and Control
Act of 1986 signed by Ronald Reagan, the number of illegal immigrants
has risen dramatically. According to the Pew Hispanic Center this week,
the number of illegal immigrants peaked in 2007 at about 12 million,
just as the Bush administration ramped up enforcement of existing
immigration laws. With the Obama administration’s continued enforcement
and the economic recession, the estimated illegal immigrants declined to
just over 11 million in 2011.
Estimating where exactly illegal immigrants reside in the United States is tricky, but the Pew Hispanic Center did just that in 2011 for each state.
Although California has the highest number of illegal immigrants,
Nevada has the largest proportion of illegal immigrants—7.2 percent of
the state population and as much as 10 percent of its workforce.
California and Texas follow at just under 7 percent of their
populations, with New Jersey and Arizona rounding out the top five.
Mouse over your state on the map to see the estimated number of
illegal immigrants living there and how that number has changed in the
past two decades.
NOTE: Survey methods cannot precisely pinpoint for each state the number of illegal immigrants, so the following data in this map meets the 90-percent confidence interval for population estimates for each state (save for a handful of states where the illegal immigrant population is so low that it's nearly impossible to confidently estimate).
NOTE: Survey methods cannot precisely pinpoint for each state the number of illegal immigrants, so the following data in this map meets the 90-percent confidence interval for population estimates for each state (save for a handful of states where the illegal immigrant population is so low that it's nearly impossible to confidently estimate).
Jon Stewart Rips HSBC: 'Bank Wankers Too Big To Jail'
Stewart nails it in the final 30 seconds.
Daily Show Video - HSBC proves too big to prosecute when it comes to laundering money for terrorists and Mexican drug cartels.
Last week two Senators looking for press sent the following completely useless letter to Eric Holder at the Justice Department. While sounding all the right notes, there is nothing punitive within, just more hot air from Congress looking to assuage an angry constituency.
***
Brown, Grassley Press Justice Department On Too Big To Jail
Senators Question Whether Too Big to Fail Status Of Wall Street Banks Undermines Government’s Ability to Prosecute Large Financial Institutions
“Wall Street megabanks aren’t just too big to fail, they’re increasingly too big to jail,” Brown said. “Already, the nation’s six largest megabanks enjoy what amounts to taxpayer-funded guarantee by virtue of their size, making it harder for regional and community banks to compete. Now, these megabanks may also enjoy some impunity when they violate the law by laundering money or illegally foreclosing on homeowners. Wall Street should pay the full price of its wrongdoing, not pass the costs along to taxpayers.”
“The best deterrent to crime is to put people in prison,” Grassley said. “That includes those at powerful banks and corporations. Unfortunately, we’ve seen little willingness to charge these individuals criminally. The public deserves an explanation of how the Justice Department arrives at these decisions.”
Read the full letter here...
A must read:
Matt Taibbi: 'Outrageous HSBC Settlement Proves The Drug War Is A Joke'
"If the law doesn’t apply equally to everybody, then you don’t really have a system of law. And so you have a built-in defense for everybody in every drug case forever. I mean, if you get caught with a stem of marijuana, how do you not stand up and say, ‘You’re going to send me to jail for this where a guy who laundered a billion dollars for a bunch of murderers gets nothing?’"Last week:
Jon Stewart: The Ungrateful Bastards Of AIG
Photo by William Banzai7...
The laundry of HSBC
This money is clean as can be
Banks criminal ways
Shows that crime always pays
Move along, there is nothing to see
The Limerick King
Real Estate Broker Claims Landlord Evicted Her Because She Had Cancer
UPPER EAST SIDE — An Upper East Side real estate broker and cancer
survivor was harassed by her landlord and evicted from her apartment
because her management company was afraid she wouldn't be able to pay
the rent if the illness came back, she claims in a federal lawsuit.
Heatheran Kristopher, 43, said she was forced out of her $2,250 per month apartment on East 81st Street by a landlord who began hounding her within a month of taking over the building in 2011, according to the lawsuit filed Jan. 25 in Manhattan Federal Court.
"I feel completely alone, I feel completely lost right now," Kristopher told DNAinfo.com New York Monday, as she stood inside her empty first-floor apartment at 336 E. 81st St.
"I know it's only an apartment, but it's just what I went through here. I healed myself here. I came home from chemo and laid in this backyard. I feel safe here."
"There's nowhere else I can turn at this point," she added, saying she's crashing on friends' couches while she tries to find a place to live.
Kristopher said the high-pressure bid to force her out of the building began in September 2011, less than a month after Stone Street Properties LLC bought her building from the previous landlord Icon Management.
She said she had signed a new two-year lease with Icon in August 2011, but had not received a printed version of the lease by the time Stone Street Properties took over.
According to the court papers, Stone Street co-founder Robert Morgenstern showed up at her door unannounced in September 2011, and began shouting at her that she owed him $5,000.
When she told him she had cancer, he allegedly snapped.
"How do I know you're not going to get cancer again?" Morgenstern yelled, according to the court documents.
Kristopher, who recently founded her own real estate firm, had lived in the apartment since 2008, just before she was diagnosed with ovarian and colon cancer and began chemotherapy and radiation treatment at Memorial Sloan Kettering Cancer Center, according to the lawsuit.
She had fallen behind in rent by more than $10,000 during her cancer treatments, but had caught up by the time Stone Street took over. She wanted to stay in the building in part because of its proximity to Sloan Kettering and because the first floor home made it easy for her to move around.
"They were doing anything and everything to get rid of me," she said.
Stone Street staffers began to insist that her new lease was invalid and refusing to honor its terms, the documents said. Instead, they urged her to sign a six-month lease.
"This way you're not locked in if you do get sick again," Stone Street leasing agent Cody Moore allegedly said. "I strongly suggest you sign this or you will be put on the black list."
Stone Street also tried to increase the rent by $700 per month and get her to pay six months rent up front, the lawsuit says.
On Nov. 22, 2011, the landlord filed a petition to evict Kristopher and a week later she filed a disability discrimination claim with the New York Division of Housing and Urban Development and the New York State Division of Human Rights.
After a nearly seven-month investigation, the New York State Division of Human Rights found that there was "probable cause for discrimination on the basis of [Kristopher's] disability," according to a report dated May 25, 2012.
However, the agency did not find evidence that Morgenstern moved to evict her because she filed the complaint with HUD. Kristopher later withdrew the human rights complaint in order to file the federal lawsuit.
Kristopher won a number of delays in the eviction proceedings, but she was forced to clear out Monday after the state Supreme Court upheld the removal.
"She's a sour-grapes tenant who was evicted because she had no lease," said Morgenstern, who denied making the cancer comment.
"I categorically deny any wrongdoing."
Kristopher, a spokeswoman for Ihadcancer.com, said she went to war with the building to protect herself — and to help others who might find themselves in the same boat.
"I'm an advocate for cancer patients. I work with cancer patients. I volunteer, I go to chemo with them," she said. "I'm not going to allow this to happen."
As part of the investigation, HUD asked Stone Street for a list of other tenants in the building who had fallen behind on their lease and were also then offered a six-month agreement, according to the investigation report. The company failed to provide the information.
While she does not hold any illusions about getting her apartment back, Kristopher said she hopes the suit will dissuade other building owners from discriminating against people in similar situations.
And she is committed to staying in the city, in part to honor her mother, who lived in Manhattan until she died of cancer when Kristopher was 10 years old.
"I feel close to my mom here. Every day everything reminds me of her," she said.
"I'm just going to fight this until the end. I have to. It makes me feel not like the victim."
Heatheran Kristopher, 43, said she was forced out of her $2,250 per month apartment on East 81st Street by a landlord who began hounding her within a month of taking over the building in 2011, according to the lawsuit filed Jan. 25 in Manhattan Federal Court.
"I feel completely alone, I feel completely lost right now," Kristopher told DNAinfo.com New York Monday, as she stood inside her empty first-floor apartment at 336 E. 81st St.
"I know it's only an apartment, but it's just what I went through here. I healed myself here. I came home from chemo and laid in this backyard. I feel safe here."
"There's nowhere else I can turn at this point," she added, saying she's crashing on friends' couches while she tries to find a place to live.
Kristopher said the high-pressure bid to force her out of the building began in September 2011, less than a month after Stone Street Properties LLC bought her building from the previous landlord Icon Management.
She said she had signed a new two-year lease with Icon in August 2011, but had not received a printed version of the lease by the time Stone Street Properties took over.
According to the court papers, Stone Street co-founder Robert Morgenstern showed up at her door unannounced in September 2011, and began shouting at her that she owed him $5,000.
When she told him she had cancer, he allegedly snapped.
"How do I know you're not going to get cancer again?" Morgenstern yelled, according to the court documents.
Kristopher, who recently founded her own real estate firm, had lived in the apartment since 2008, just before she was diagnosed with ovarian and colon cancer and began chemotherapy and radiation treatment at Memorial Sloan Kettering Cancer Center, according to the lawsuit.
She had fallen behind in rent by more than $10,000 during her cancer treatments, but had caught up by the time Stone Street took over. She wanted to stay in the building in part because of its proximity to Sloan Kettering and because the first floor home made it easy for her to move around.
"They were doing anything and everything to get rid of me," she said.
Stone Street staffers began to insist that her new lease was invalid and refusing to honor its terms, the documents said. Instead, they urged her to sign a six-month lease.
"This way you're not locked in if you do get sick again," Stone Street leasing agent Cody Moore allegedly said. "I strongly suggest you sign this or you will be put on the black list."
Stone Street also tried to increase the rent by $700 per month and get her to pay six months rent up front, the lawsuit says.
On Nov. 22, 2011, the landlord filed a petition to evict Kristopher and a week later she filed a disability discrimination claim with the New York Division of Housing and Urban Development and the New York State Division of Human Rights.
After a nearly seven-month investigation, the New York State Division of Human Rights found that there was "probable cause for discrimination on the basis of [Kristopher's] disability," according to a report dated May 25, 2012.
However, the agency did not find evidence that Morgenstern moved to evict her because she filed the complaint with HUD. Kristopher later withdrew the human rights complaint in order to file the federal lawsuit.
Kristopher won a number of delays in the eviction proceedings, but she was forced to clear out Monday after the state Supreme Court upheld the removal.
"She's a sour-grapes tenant who was evicted because she had no lease," said Morgenstern, who denied making the cancer comment.
"I categorically deny any wrongdoing."
Kristopher, a spokeswoman for Ihadcancer.com, said she went to war with the building to protect herself — and to help others who might find themselves in the same boat.
"I'm an advocate for cancer patients. I work with cancer patients. I volunteer, I go to chemo with them," she said. "I'm not going to allow this to happen."
As part of the investigation, HUD asked Stone Street for a list of other tenants in the building who had fallen behind on their lease and were also then offered a six-month agreement, according to the investigation report. The company failed to provide the information.
While she does not hold any illusions about getting her apartment back, Kristopher said she hopes the suit will dissuade other building owners from discriminating against people in similar situations.
And she is committed to staying in the city, in part to honor her mother, who lived in Manhattan until she died of cancer when Kristopher was 10 years old.
"I feel close to my mom here. Every day everything reminds me of her," she said.
"I'm just going to fight this until the end. I have to. It makes me feel not like the victim."
Anonymous posts personal data of 4,000 US bankers online
Personal information on some 4,000 people in the
banking industry, including bank officers, was posted online Sunday by
the hacker collective Anonymous.
The list was initially posted to the website for the Alabama Criminal Justice Information Center (ACJIC), then apparently taken down by that site's operators. The ACJIC did not respond to a request for comment about the incident.
The list was initially posted to the website for the Alabama Criminal Justice Information Center (ACJIC), then apparently taken down by that site's operators. The ACJIC did not respond to a request for comment about the incident.
SEC's Khuzami Says Goodbye: 'I Was Tough On Wall Street'
SEC's top Keystone cop says goodbye.
Khuzami's exit interview with Bloomberg.
Must read piece on Khuzami's exit from Reuters Cate Long:
---
More from our story last week on Khuzami's departure.
Background
BUSTED: Robert Khuzami SEC Enforcement Chief
Keep in mind that Citigroup was hiding - lying about - $40 billion of sub-prime exposure, and the CFO at the time, Gary Crittenden was fined a paltry $100k for his role in this blatant rape of federal securities law. Khuzami who once promised to be a tough cop on the beat, allegedly broke protocol, held a secret meeting with his good friend - counsel for Citi - then instructed SEC staff to go easy on Crittenden and Arthur Tildesley, the lying curbskank at the helm of Citi investor relations.
---
What Did Khuzami Know About $12 Billion In SECRET Losses At Deutsche?
More evidence that the financial crisis is a legal crisis in drag has emerged with two stories about the hiring of top regulators after they failed to detect massive financial frauds that occurred right under their noses. First is S.E.C. enforcement head Robert Khuzami. Before becoming top cop at the S.E.C., he was Deustche Bank’s top lawyer while it was concealing $12 billion of losses in late 2008, according to people who worked there.
The gang that couldn't shoot straight. What Wall Street crook wouldn't be afraid of Khuzami's intrepid team of crime fighters?
Khuzami's exit interview with Bloomberg.
Must read piece on Khuzami's exit from Reuters Cate Long:
---
More from our story last week on Khuzami's departure.
Background
BUSTED: Robert Khuzami SEC Enforcement Chief
Keep in mind that Citigroup was hiding - lying about - $40 billion of sub-prime exposure, and the CFO at the time, Gary Crittenden was fined a paltry $100k for his role in this blatant rape of federal securities law. Khuzami who once promised to be a tough cop on the beat, allegedly broke protocol, held a secret meeting with his good friend - counsel for Citi - then instructed SEC staff to go easy on Crittenden and Arthur Tildesley, the lying curbskank at the helm of Citi investor relations.
---
What Did Khuzami Know About $12 Billion In SECRET Losses At Deutsche?
More evidence that the financial crisis is a legal crisis in drag has emerged with two stories about the hiring of top regulators after they failed to detect massive financial frauds that occurred right under their noses. First is S.E.C. enforcement head Robert Khuzami. Before becoming top cop at the S.E.C., he was Deustche Bank’s top lawyer while it was concealing $12 billion of losses in late 2008, according to people who worked there.
The gang that couldn't shoot straight. What Wall Street crook wouldn't be afraid of Khuzami's intrepid team of crime fighters?
Is This The Beginning Of A Horrifying Stock Market Crash In Europe?
That is a very good question. Perhaps there would not be so much concern if the overall European economy was doing well, but the truth is that the underlying economic fundamentals in Europe have continued to get even worse. The unemployment rate in the eurozone is at an all-time high, and the unemployment rates in both Greece and Spain are now over 26 percent. Much of southern Europe is already in the midst of a full-blown economic depression, so it really has been remarkable that the financial markets in Europe have been able to hold up as well as they have so far.
But now all of that may be changing. Just check out what happened on Monday according to Bloomberg…
National benchmark indexes declined in all of the 18 western European markets, except Greece and Denmark. Italy’s FTSE MIB Index (FTSEMIB) sank 4.5 percent, the most in six months. Spain’s IBEX 35 slid 3.8 percent for a sixth day of declines, the longest losing streak in 10 months. France’s CAC 40 plunged 3 percent for the biggest drop since April. The U.K.’s FTSE 100 dropped 1.6 percent and Germany’s DAX lost 2.5 percent.Unfortunately, what happened on Monday was just the continuation of a trend that started last week. The following is from Zero Hedge…
The last four days have seen the biggest plunge in over six months with the IBEX (Spain -5.7%) and Italy’s MIB -6.7%. At the same time, Europe’s seemingly invincible OMT-promise-protected sovereign bond market has started to underwhelm. Italian bond spreads are 32bps wider and Spain 28bps wider – the biggest increase in risk in two months.European banks have been hit particularly hard during this recent downturn.
Just check out some of the huge declines that European banking stocks experienced on Monday…
UniCredit SpA: -8.3 percent
Commerzbank AG: -5.9 percent
Santander: -5.7 percent
Intesa Sanpaolo SpA: -5.4 percent
Credit Agricole SA: -5.4 percent
Société Générale SA: -4.8 percent
Banco Bilbao Vizcaya Argentaria SA: -4.7 percent
Those are huge moves for just a single day of trading. If we have a couple of more days like that, everyone is going to be talking about a “stock market crash” in Europe.
Unfortunately, it does not appear that any solutions to the scandals that are shaking up southern Europe right now will be forthcoming any time soon.
In Spain, it is increasingly looking like the Prime Minister may actually have to resign. A recent CNN article explained what the scandal is all about…
Rajoy denied on Saturday allegations that he and other leaders of his conservative People’s Party had received secret cash payments from a fund operated by the party’s former treasurer. Rajoy said he would publish details of his personal wealth and income tax states on the prime minister’s website.Of course politicians all over the world are accused of doing evil things all the time, but in this instance it appears that there may be some solid evidence that Rajoy may not be able to deny. The following comes from a Bloomberg report…
Newspaper El Pais last week published allegations of illegal cash payments, featuring extracts from handwritten ledgers by the former People’s Party Treasurer Luis Barcenas showing payments to officials including Rajoy.At this point, opinion polls are showing that even most of his own supporters do not believe him…
Polls show that 60pc of his own supporters do not believe the official explanation. A national petition drive calling for his resignation has already collected almost 800,000 signatures. Socialist opposition leader Alfredo Pérez Rubalcaba yesterday joined the chorus calling for Mr Rajoy’s head, saying the country had become “ungovernable”.So definitely expect things in Spain to get worse before they get better.
Meanwhile, the derivatives scandal in Italy continues to get more “interesting”. Italy’s third largest bank is on the brink of collapse due to huge problems with derivatives contracts, and that bank just happens to be closely linked with the Italian politician that is currently leading in the polls…
The Italian scandal is related to Italy’s third-biggest bank, Monte dei Paschi di Siena, which has received two government bailouts and may yet have to be nationalized as its losses mount.So who benefits from all of this? Well, it turns out that as a result of this scandal former Prime Minister Silvio Berlusconi is rapidly gaining more support. The following is from a recent Telegraph article…
The bank is closely associated to Italy’s Democratic Party, whose leader, Pier Luigi Bersani, is leading in the polls, though slipping from his highs as former prime minister Silvio Berlusconi makes a late surge before the Feb. 25th general election. “The Monte [banking] scandals now look like overwhelming the Italian election campaign and put [Mr.] Bersani and the Democratic Party’s victory at risk,” James Walston, political commentator at the American University of Rome, said in his Monday blog.
The Monte scandal centres on allegedly unreported derivatives deals that were apparently designed to hide losses and instead made the losses deeper. The bank, now under new management, has admitted that the derivatives losses might total more than €700-million.
In Italy, ex-premier Silvio Berlusconi has upset the political landscape just three weeks before elections, surging back into contention with vows to rip up “German-imposed” austerity policies and cancel a hated property tax.
His Right-wing alliance has risen to 28pc in the polls, relishing a widening scandal at Banca Monte dei Paschi that has embroiled the Italian left.
In fact, the entire globe is on the verge of a debt implosion. This was something that Bill Gross of Pimco discussed in his February newsletter…
“So our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic – it is running out of energy and time. When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.”No debt bubble can expand indefinitely. At some point it can no longer hold itself together.
Europe is rapidly approaching that point, and so is the United States.
So how much time do we have left?
Regional war a risk as China focuses on the home front
Source: AUS
Two China experts have warned of the dangers of a regional armed conflict stemming from China’s territorial claims while its new leadership is preoccupied with domestic issues.
Former Australian foreign minister Gareth Evans, writing for Project Syndicate, notes: “Japan is fuelling nationalist sentiment in China and South Korea, and making even more dangerous the already volatile territorial disputes in the East China Sea and the Sea of Japan.”
Focusing on Tokyo’s role in the deteriorating strategic environment, he says: “Japan is again alienating its neighbours and driving its friends to despair over the issue of accepting responsibility for its wartime aggression and atrocities.”
Linda Jakobson, the Lowy Institute’s East Asia program director, has written a 9000-word paper, published today, on “China’s foreign policy dilemma”, which spells out the dangers.
Ms Jakobson says although the international community assumes China is inexorably on the rise, people in China “are deeply worried about the future of their country”.
“They question China’s ability to continue to rise because of daunting domestic problems, many of which can only be tackled by bold reform,” she writes.
This gulf between outside perceptions and domestic preoccupations “complicates attempts to understand China’s foreign policy”. She says the low importance of foreign policy to China’s leaders is reflected in the status of State Councillor Dai Bingguo and Foreign Minister Yang Jiechi as “mere members” of the 204-person central committee.
The immediate foreign policy test for new top leader Xi Jinping is to ease tensions with Japan over the disputed Senkaku, or Diaoyu, islands in the East China Sea.
“The situation is explosive,” she says. In the event of a collision, accidental or intentional, between Japanese and Chinese vessels or aircraft, “an armed conflict could erupt between the two countries”.
But while Mr Xi will wish to manage tensions, Ms Jakobson says, “he will have to tread extremely carefully to avoid creating a perception amongst Chinese that he is weak in defending China’s national interests”.
“Beijing’s skilful diplomacy in Southeast Asia” has been a success, but its use of its power “to coerce Vietnam and The Philippines . . . to accept China’s territorial claims in the South China Sea” means that reservoir of goodwill “has all but evaporated”.
If Mr Xi fails to fend off nationalist demands to display determination over such sovereignty issues, “a limited armed conflict with either The Philippines or Vietnam cannot be ruled out”.
Two China experts have warned of the dangers of a regional armed conflict stemming from China’s territorial claims while its new leadership is preoccupied with domestic issues.
Former Australian foreign minister Gareth Evans, writing for Project Syndicate, notes: “Japan is fuelling nationalist sentiment in China and South Korea, and making even more dangerous the already volatile territorial disputes in the East China Sea and the Sea of Japan.”
Focusing on Tokyo’s role in the deteriorating strategic environment, he says: “Japan is again alienating its neighbours and driving its friends to despair over the issue of accepting responsibility for its wartime aggression and atrocities.”
Linda Jakobson, the Lowy Institute’s East Asia program director, has written a 9000-word paper, published today, on “China’s foreign policy dilemma”, which spells out the dangers.
”If
a maritime or aerial incident occurs, nationalist pressure will narrow
the room for manoeuvre of leaders in each of the countries involved in
the incident. There are numerous foreign and security policy actors
within China who favour Beijing taking a more forceful (foreign policy)
stance.
“Regional stability is at risk of China’s new leadership merely reacts as events unfold.”Ms Jakobson says although the international community assumes China is inexorably on the rise, people in China “are deeply worried about the future of their country”.
“They question China’s ability to continue to rise because of daunting domestic problems, many of which can only be tackled by bold reform,” she writes.
This gulf between outside perceptions and domestic preoccupations “complicates attempts to understand China’s foreign policy”. She says the low importance of foreign policy to China’s leaders is reflected in the status of State Councillor Dai Bingguo and Foreign Minister Yang Jiechi as “mere members” of the 204-person central committee.
The immediate foreign policy test for new top leader Xi Jinping is to ease tensions with Japan over the disputed Senkaku, or Diaoyu, islands in the East China Sea.
“The situation is explosive,” she says. In the event of a collision, accidental or intentional, between Japanese and Chinese vessels or aircraft, “an armed conflict could erupt between the two countries”.
But while Mr Xi will wish to manage tensions, Ms Jakobson says, “he will have to tread extremely carefully to avoid creating a perception amongst Chinese that he is weak in defending China’s national interests”.
“Beijing’s skilful diplomacy in Southeast Asia” has been a success, but its use of its power “to coerce Vietnam and The Philippines . . . to accept China’s territorial claims in the South China Sea” means that reservoir of goodwill “has all but evaporated”.
If Mr Xi fails to fend off nationalist demands to display determination over such sovereignty issues, “a limited armed conflict with either The Philippines or Vietnam cannot be ruled out”.
87% of Americans Say Tax the Wealthy More to Protect Social Security Benefits
Social Security is fully solvent until 2037 and is not in crisis. But
one way to make sure there are no cutbacks in benefit cuts after that is
to lift the payroll tax cap so wealthy Americans contribute more into
the system.
A new survey from
the National Academy of Social Insurance finds that most Americans want
to do just that. When survey respondents were asked how they felt about
the statement “It is critical to preserve Social Security even if it
means increasing Social Security taxes paid by wealthy Americans,” 87
percent of them agreed, with 62 percent of them strongly agreeing.
It’s worth noting that this number includes even 71 percent of
self-identified Republicans (and 86 percent of self-identified
independents).
Some of the survey's key findings:
• Americans don’t mind paying for Social Security because they value it
for themselves (80 percent), for their families (78 percent), and for
the security and stability it provides to millions of retired Americans,
disabled individuals, and children and widowed spouses of deceased
workers (84 percent).
• 84 percent believe current Social Security benefits do not provide enough income for retirees, and 75% believe we should consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.
• 84 percent believe current Social Security benefits do not provide enough income for retirees, and 75% believe we should consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.
• 82 percent agree it is critical to preserve Social Security for
future generations even if it means increasing Social Security taxes
paid by working Americans, and 87% want to preserve Social Security for
future generations even if it means increasing taxes paid by wealthier
Americans.
AND HE FOLDS: Obama Calls For Delaying Spending Cuts
Sequester? We don't need no stinkin' sequester.
---
Deficit President chickens out at the last minute. $20 trillion here we come.
Story just hit the wires.
WASHINGTON (MarketWatch)
- President Barack Obama will ask Congress Tuesday to craft a small
package of short-term spending cuts and tax revenue to put off the
automatic across-the-board cuts, known as the sequester, that are
scheduled to kick in March 1, according to press reports. The request
will come in a public statement from the president at the White House
early this afternoon, the reports said. If Congress does not act, about
$85 billion would have to be cut from government agencies, including the
Defense Department, this fiscal year. Earlier Tuesday, House Speaker
John Boehner used a press conference to urge Obama to offer proposals to
replace the spending cuts. A White House official said the small
package was needed to give the White House and Congress more time to
achieve a bigger budget deal.
These aren't even cuts. They are small reductions to future spending increases. I covered it in full angry detail here.***
Flashback: Obama Tells C-Span 'We've Run Out Of Money'
Flashback - May 23, 3009
Obama and all future presidents should be required to wear a clock around their necks displaying a running tally of the national debt. Something like this:
Photos by William Banzai7...
The Story Of The Fake Economist Who Fooled A Nation
Morning reading. 25 stories.
***
The True Story Of The Fake Economist Who Fooled An Entire Nation
Artur Baptista faces prosecution after faking his 'career' as a famous economist.
As an ex-presidential consultant, a former adviser to the World Bank, a financial researcher for the United Nations and a professor in the US, Artur Baptista da Silva's outspoken attacks on Portugal's austerity cuts made the bespectacled 61-year-old one of the country's leading media pundits last year.
The only problem was that Mr Baptista da Silva is none of the above. He turned out to be a convicted forger with fake credentials and, following his spectacular hoodwinking of Portuguese society, he could soon face fraud charges.
Yet in the country's jails, Mr Baptista da Silva's sudden appearance among the intellectual elite caused amazement among his former cellmates. A colleague from his old school, lawyer Ricardo Sa Fernandes, who had come across Mr Baptista da Silva behind bars by chance when visiting one of his clients, told Visao magazine that when he saw the convicted fraudster on TV he was "staggered by his ability to put his past life behind him."
***
How Colombian Drug Traffickers Used HSBC to Launder Money - ReutersYet in the country's jails, Mr Baptista da Silva's sudden appearance among the intellectual elite caused amazement among his former cellmates. A colleague from his old school, lawyer Ricardo Sa Fernandes, who had come across Mr Baptista da Silva behind bars by chance when visiting one of his clients, told Visao magazine that when he saw the convicted fraudster on TV he was "staggered by his ability to put his past life behind him."
***
Colombian Drug Trafficker In HSBC Case Faces 18 Years In Federal Prison, Bankers Will Pay Fines Instead
Drug cartels sold narcotics in the United States and routed the cash to Mexico, often using couriers to smuggle it across the border. That cash would then be put into bank accounts at HSBC's Mexico unit, where large deposits could be made without arousing suspicion, according to U.S. Department of Justice documents.
In one filing, U.S. prosecutors said, Chaparro and others allegedly utilized accounts at HSBC Mexico to deposit "drug dollars and then wire those funds to ... businesses located in the United States and elsewhere. The funds were then used to purchase consumer goods, which were exported to South America and resold to generate 'clean' cash."
In a typical transaction, a middleman in a drug cartel would offer to deliver consumer goods, such as computers or washing machines, to Colombian businesses on favorable terms. Another person in the United States would buy the goods from firms using funds from drug trafficking, and fulfill those orders. The situation was so bad, according to the Department of Justice, that in 2008, the head of HSBC's Mexican operations was told by Mexican regulators that a local drug lord described the bank as "the place to launder money."
Chaparro, who was arrested in Colombia in 2010 and extradited to the United States in 2011, pleaded guilty to a money-laundering conspiracy count in May and is awaiting sentencing in a federal detention center in Brooklyn. "He is contrite, regretful and ashamed about his crimes. He wants to serve his time and rejoin his family. He understands that a prison term could prevent that from happening for many years."
Under federal guidelines, he could face 15 to 18 years in prison.
An HSBC spokesman declined comment.
***
New Paradigm For Mortgage Put-Back Claims? - Alison Frankel
I did a double take Wednesday, when I noticed a pair of new suits by Lehman Brothers Holdings in federal court in Colorado. The complaints, which are almost identical, claim that the mortgage originator Universal American Mortgage breached representations and warranties about loans it sold to Lehman, which subsequently suffered losses as a result of those breaches. But here's the thing: Each suit addresses only one supposedly deficient loan!
The Lehman complaints each also contained a curious paragraph, noting that the claims at issue were previously asserted as counts in an eight-loan put-back case Lehman was litigating in federal court in Miami. The judge in that case, Lehman said, had decided after a pretrial conference last week that "each loan must be filed separately, rather than joined within one action."
Suitcases Of Cash Circumvent Normal Loan Rules For Mortgages - Bloomberg
Scientology's Biggest Donor Donor Becomes A Billionaire With Cancer Drug
Vanguard Funds Gets Record Inflows As Clients Return to Stocks
Hillary Clinton Helps Silicon Valley On Her Way Out The Door
The Latest Evader Of The French 75% Millionaires Tax: The Former French President
SEC Probing Possible Violations At China's Focus Media - Bloomberg
PRESS RELEASE - SEC Charges Trader with Defrauding Investors In Mortgage Securities
How Bond Trading On Wall Street Really Works - Zero Hedge
Vancouver Home Prices On Fire - Chart Of The Day
Krauthammer On Sandy: "Hypocrisy Of Democrats Would Leave Diogenes Stunned"
BRIBERY SPECIAL REPORT - How China's IPO Process Really Works
Head Of MF Global Investigation Abruptly Quits - NY Times
Attention Taxpayers: You Paid $250 Million For A Company Sold To China
Like Keith Richards, Amazon's Stock Can't Be Killed By Conventional Weapons
Critical Warning: Nothing Will Change Until We Prosecute Bankers
NYT - Inside The Trail Of Tips Leading To Stevie Cohan (great read)
Government Seeks Leniency For Intel Exec Who Helped Bust Hedge Fund Criminals
NJ Senate Votes To Exclude Non-Union Construction Workers For Hurricane Work
Donald Trump Sues Bill Maher For $5 Million For Saying He Was A Product Of His Mother Having Sex With An Orangutan
The Death Of The Mortgage Broker
Coke Engineers Its 'Simply Orange Juice' — With An Algorithm
UPDATE - Horsemeat Could Have Been In British Beef Burgers For A Year - Telegraph
Coach Saves Day - 2 Students Saved After 70-Year Old Coach Shoots Attackers
Grandpa was packing heat.
Cleaning Lady Steals Train In Sweden, Crashes Into House
Photos by William Banzai7 and Jonas Ekstromer / Scanpix Sweden via Reuters
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