Thursday, January 13, 2011

US Banks Reporting Phantom Income on $1.4 Trillion Delinquent Mortgages

The giant US banks have been bailed out again from huge potential writeoffs by loosey-goosey accounting accepted by the accounting profession and the regulators.

They are allowed to accrue interest on non-performing mortgages ” until the actual foreclosure takes place, which on average takes about 16 months.

All the phantom interest that is not actually collected is booked as income until the actual act of foreclosure. As a resullt, many bank financial statements actually look much better than they actually are. At foreclosure all the phantom income comes off gthe books of the banks.

This means that Bank of America, Citigroup, JP Morgan and Wells Fargo, among hundreds of other smaller institutions, can report interest due them, but not paid, on an estimated $1.4 trillion of face value mortgages on the 7 million homes that are in the process of being foreclosed.

Ultimately, these banks face a potential loss of $1 trillion on nonperforming loans, suggests Madeleine Schnapp, director of macro-economic research at Trim-Tabs, an economic consulting firm 24.5% owned by Goldman Sachs.

The potential writeoffs could be even larger should home prices continue to weaken, placing more homes in the nomnperforming category on bank balance sheets.

About 6 million homes are still at risk, according to Schnapp, and at least 10% of them are 25% underwater, meaning their market value is 25% less than the mortgage– but the owners are still paying interest to their banks.

« China Frets About U.S. Holdings Ahead Of Hu Trip »

(Reuters) - China would welcome assurances its financial assets in the United States are safe, a senior diplomat said on Wednesday, ahead of President Hu Jintao's visit next week, but played down rifts between the two powers.

Chinese Vice Foreign Minister Cui Tiankai said North Korea and other issues that need the two global giants to work together would also come up during Hu's January 18-21 trip. Hu will hold talks with President Barack Obama on January 19.

While Obama is certain to press Hu on currency controls, which many in Washington say keeps the yuan unfairly cheap and contributes to the U.S. trade deficit, Cui said Beijing had its own concerns about safety its big holdings of U.S. treasury debt.

China has amassed the world's biggest stockpile of foreign exchange reserves at $2.85 trillion, an estimated two-thirds of which is invested in the United States.

"Regarding the security of China's assets in the United States, if the U.S. side can offer a positive statement on that then of course we'd welcome that, and it's an issue we're paying attention to," Cui told reporters.

Underscoring China's sensitivity to the issue, an academic adviser to its central bank, Xia Bin, told Reuters that global financial markets are better off with a balance between the dollar and euro, as opposed to having only dollar dominance.

China often seeks assurances on the security of its U.S. investments before any high-level meetings with Washington.

For two years, Chinese Premier Wen Jiabao has used his most important press conference of the year to say he is worried about the safety of China's U.S. investments.


You gotta see this one...

Very funny skit on the national debt. It starts out slowly, but the jokes kick in after a minute or so.

  • "You are not allowed to pay us back in clunkers."
  • "Do I look like Mrs. Obama? Then why you are trying to do sex to me like Mrs. Obama."

Saturday Night Live annihilates Obama in a mock presser with Chinese President Wu Jintao and his unique interpreter.


« May God Protect Global Bankers: Irish Leaders Castigated As Greatest Traitors Of All Time »

It's raining global bankster bullshit...


See the rest of the photos - 25 pics - all black & white...

Make sure to see #12 and #13...


Several videos at the bottom of the story...For background for the article below, see this...


This is a very long piece, but well worth your time.

Guest post from Gabriel Donohoe

Editor's Note: Look for the Hank Paulson & Bilderberg references...

Source - Fool's Crow

The Irish Government has recently passed the harshest budget in the history of the State with further austerity promised for the next three years and perhaps for decades. Prime Minister Brian Cowen and Finance Minister Brian Lenihan have steered Ireland from the booming prosperity of a Celtic Tiger to a ruined shell of a country where unemployment, poverty, emigration, and despair are proceeding to destroy a once proud, industrious people.

Cowen and Lenihan also bear the ignominy of having brought in the International Monetary Fund who, along with EU banksters, are now dictating Irish fiscal policy. The IMF has long had a vulturish reputation for plundering weaker countries by stripping the flesh of its victims down to the bare bones. This repulsive scavenger is well known for promoting austerity and misery, grabbing national assets for its bankster and corporate friends, and leaving the skeleton of a country’s economy in its wake. The first piece of offal to be plucked from the Irish carcass by this opportunistic carrion eater was the nation’s €20 billion pension fund, the life savings of working people.

As a result of Ireland’s dramatic reversal of fortune the names of Brian Cowen and Brian Lenihan are now being reviled as the villains who inflicted horrendous financial disaster upon the Irish people and forced the enslavement of future generations to a criminal cadre of International Banksters.

The words ‘treason’, ‘traitors’, and ‘treachery’ are being increasingly used not only by ordinary citizens but also by certain politicians, economists, business leaders, and celebrities. ‘Economic treason’ was a term used by the leader of the Labour Party to describe Cowen and Lenihan’s blanket guarantee to the banks. And, incredibly, even the country’s ostensibly non-partisan police association, the GRA, accused the government of ‘treachery’ and denounced it as a ‘government of national sabotage’.

Today, Cowen and Lenihan are being compared to other traitors in history like Vidkun Quisling, a Norwegian politician who assisted the Nazis to conquer his native country; General Benedict Arnold, an American soldier who changed sides during the Revolution and betrayed his country to the British; and even Judas Iscariot, who betrayed his Master for 30 pieces of silver.

In Ireland, the names of Cowen and Lenihan now evoke the same revulsion as that reserved for Dermot MacMurrough, a 12th century King of Leinster who has been loathed for over 8 centuries as the man who brought the first English invaders to Ireland. In 1167, after a dispute with other Irish kings which led to his forced exile, MacMurrough persuaded an English army under the command of the Earl of Pembroke, known as ‘Strongbow’, to invade Ireland and help him take his kingdom back.

MacMurrough died 3 years later and Strongbow declared himself the King of Leinster. Thus began the beginning of a British military occupation that would last for over 800 years and cause countless thousands of Irish deaths and condemn many generations of Irish men and women to utter misery, slavery, famine, and financial and religious tyranny. It is not easy for anyone to incite more odium in the hearts of the Irish people than that of the back-stabber Dermot MacMurrough.

And yet Brian Cowen and Brian Lenihan are reviled with the same detestation as that accorded the traitorous 12th century King of Leinster.

What did Cowen and Lenihan do to earn such public loathing?

On September 29th, 2008, a momentous event occurred. That evening, four of the most senior executives of Ireland’s two largest high street banks, Dermot Gleeson and Eugene Sheehy of Allied Irish Bank (AIB) and Brian Goggin and Richard Burrows of Bank of Ireland (BOI), called to Government Buildings for a hastily convened meeting with the Prime Minister, Brian Cowen, and the Minister for Finance, Brian Lenihan. Also present was the Irish Attorney-General, Paul Gallagher.

The banksters were frantic. As the property bubble was beginning to burst, their main rival, Anglo Irish Bank, was in serious trouble and the huge loss of liquidity could bring down the country’s entire financial system. Like Anglo Irish, AIB and BOI also had massive exposure to the developers and all were in danger of imminent collapse. The banksters implored the Government to do something, immediately, before the money markets opened the following morning.

Having received such stark news from the banksters, Cowen and Lenihan knew they had to move quickly and decisively. They would have to act, and be seen to act, without bias and without favouring any special interest groups. Their first duty was to ensure the welfare of the nation as a whole and to safeguard the financial interests of all the Irish people.

But in this they failed utterly. One special interest group, the banksters, prevailed spectacularly over the interests of the Irish people. How did the banksters manage to wield such inordinate influence over crucial governmental policy?

A key disturbing fact about this meeting was never commented upon in the mainstream media. On the government side of the table sat Paul Gallagher, the Attorney-General, legal adviser to the Irish Government. On the banksters’ side of the table sat Dermot Gleeson, the AIB chairman and himself a former Irish Attorney-General. But, apart from both men holding the senior law office of the land, a more sinister connection between them remained undisclosed. They were both Bilderbergers.

For those who haven’t heard of the Bilderbergers, they are a brotherhood of unelected international banksters, corporatists, politicians, and others who meet secretly every year to formulate and manipulate world policy in finance, economics, trade, and any other area that they can control for their own selfish, globalist interests.

It may well be that the presence of the two Bilderbergers, Gleeson and Gallagher, was just a coincidence but, considering such incredibly high stakes, it can be argued that Gallagher’s attendance as Attorney-General at such a crucial meeting generated a monumental conflict of interest. His Bilderberger connection clearly compromised him as legal adviser to the Irish Government, especially when his Bilderberger pal, Gleeson, was about to be on the receiving end of a whopping government bailout.

After a surprisingly short discussion with some members of the cabinet, the Attorney-General, and top civil servants, Cowen and Lenihan arrived at an ominous decision. They decided that the Government would guarantee all the liabilities of six Irish banks – not just customer and interbank deposits but also the full exposure of all bondholders! This amounted to some 450 billion euro, an astronomical figure which, if ever called upon, would destroy the country.

With the stroke of a pen Cowen and Lenihan shifted hundreds of billions of private debt incurred by greedy, fraudulent banksters and dumped it onto the backs of the Irish people. This was an incredible act of treachery against the Irish nation. What could possess these two politicians to put their people into impossible debt and penury – perhaps for generations – just to save a few mega-rich banksters from taking a loss on their reckless gambling? Was it utter ineptitude or was it something more sinister than that?

As Marcellus said to Horatio in Shakespeare’s Hamlet, ‘Something is rotten in the State of Denmark.’ He said ‘Denmark’, but he might well have been describing present-day Ireland. This bank guarantee deal stinks to high heaven!

Inflicting a risk exposure of €450 billion on the Irish nation was tantamount to state suicide. The willing and needless placement of an entire people into such peril could only be the result of criminal incompetence or criminal collusion. There could be no other explanation, except, of course, criminal insanity. Take your pick. Are Cowen and Lenihan criminally inept, corrupt, or insane?

To put the enormity of the hazard to the nation into perspective let’s compare it to U.S Treasury Secretary Hank Paulson’s 2008 bank bailout of $700 billion which was then strenuously opposed by the great majority of the American people. The Irish bailout was the equivalent of more than $585 billion dollars, not a far cry from the $700 billion that so appalled and angered most Americans. Consider that the U.S. has a population of 300 million while Ireland only has a population of less than 4.5 million, much the same as the state of Louisiana.

At 3.30am the four bankers left. According to Shane Ross, author of Bankers, they had ‘put the gun to the Government’s head and the ministers had delivered.’

Ireland was aghast. Cowen and Lenihan said the bailout was necessary to preserve Ireland’s creditworthiness with ‘the markets’. This was hogwash and was said so by many people at the time, including leading economists. (The fallacy of the ministers’ thinking is borne out by the approach of the plucky Icelandic people who refused to take on private bankster debt and whose economy is now in a much healthier position than that of Ireland.) But Lenihan persisted with the bailout declaring that it would be ‘the cheapest bailout in history’. Those words, like the ghost in Hamlet, would soon come back to haunt him.

Cowen and Lenihan then proceeded to pour taxpayers’ money into the banks, capitalizing the high street lenders to the tune of some €13.5 billion. This figure did not even include the requirements of Anglo Irish Bank, the biggest culprit of fraudulent lending, who Lenihan said could be saved with a €4 billion bailout. As time progressed the Minister of Finance continually revised his figures upwards, going to €12 billion, €18 billion, €24 billion, and now the figure is hovering around €35 billion. The Irish people will never see a single cent of the tens of billions poured into that black hole that is Anglo Irish Bank. This cannot be described as anything other than an act of outrageous criminality.

Another fiasco in the making, the brainchild of Lenihan and Cowen, is NAMA (National Asset Management Agency), set up to restore the banks’ balance sheets by buying their toxic loans to the tune of some €54 billion of taxpayers’ money. This is another huge and needless risk that is likely to go disastrously wrong and which hangs eternally over Irish taxpayers like the Sword of Damocles. The slightest miscalculation and the sword falls – with devastating effect.

This writer, and many others, pointed out at the time that there was a much better short-term solution to the Irish banking problem. The Government could have let the banks fail – that’s what happens in capitalism when businesses are reckless or make mistakes – and set up a state bank. A state bank could have created all the credit the country needed with a much, much smaller outlay. Through fractional reserve lending, a bank can create some twelve and a half times the amount of credit that it holds in assets. For example, if a state bank is capitalised with €10 billion it can lend out €125 billion. With only €20 billion in capital a state bank could create and lend out €250 billion. This would have boosted Irish businesses and given the economy a huge injection and would have obviated the need to go back to the exploitative money markets.

(It is important to point out that this would be a short-term solution only. The real cause of global financial chaos and prohibitive national debt is the permitting of private banking cartels to create a nation’s money, money that is based on debt and bears interest and which makes an immense fortune for the international banksters – to the impoverishment of the people.)

But Cowen and Lenihan seemed not to be focussed on what was good and efficacious for the people of Ireland but on how to save a few criminal banksters from incurring gigantic losses.

Before the bank guarantees, Ireland had a manageable sovereign debt. But after taking on the private debts of reckless, fraudulent banksters Cowen and Lenihan drove Ireland into insolvency. Interest on Irish government bonds rose dramatically and threatened to destabilise the Euro. Uncertainty about Ireland’s ability to handle its deficit caused unrest in Portuguese and Spanish bond markets. There were concerns too about Belgium and Italy. The EU, fearful that panic and contagion would spread and collapse the Euro, bullied the Irish Government into taking a joint EU/IMF bailout. The high placed members of the self-serving Brussels elite were willing to impose hardship and needless austerity upon the people of Ireland in order to save their precious Euro and to preserve their positions of opulence and power.

The Irish economy per se did not need a bailout, but Irish banks did. The IMF does not lend to banks but only to sovereign countries. (That way, they can force a country to bleed its taxpayers to get their money back.) Cowen and Lenihan then proceeded to sell the idea of an EU/IMF loan to the country as a ‘rescue package’ for the Irish nation. This was a complete lie. It was a rescue package mainly for German, British, and French banks who had recklessly and greedily loaned billions to Irish banks during the Celtic Tiger boom.

David McWilliams, Irish economist, broadcaster, and writer, says of the IMF, ‘It is not here to bail us out; it is here to bail [the banks] out. The bailout is a bailout for the banks of Germany and France and the Irish taxpayer foots the bill. It is that simple. And where will the EU and IMF money come from? It will be borrowed from the very investment banks that will be bailed out. So they will get interest payments from us, in order that we pay for their mistakes.’

This view is echoed by Dr. Constantin Gurdgiev, adjunct lecturer in Finance at Trinity College, Dublin, who likens the ECB/IMF bailout to ‘corporate welfare’ (as opposed to social welfare). ‘It’s worse than corporate welfare, it’s corporate welfare with a massive moral hazard loaded on top. This is an undemocratic, corporatist transfer of wealth from ordinary citizens to a tiny group of people: bank bondholders…’

Just who are these precious bondholders that Cowen and Lenihan would bind and bankrupt the country in order to make up their ‘gambling’ losses?

Senator and presidential hopeful David Norris tried to read out their names under parliamentary privilege in the Irish Senate but was quickly silenced. It seems that Cowen and Lenihan and the Irish Government do not want the people to know that they have been put into debt slavery for the benefit of some of the wealthiest, most fraudulent banksters in the world. The names of these bondholders are now a matter of public record, thanks to investigative journalists like Guido Fawkes (

Some of the more familiar names among the four score or so major bondholders are Goldman Sachs, one of the most despised banks on Wall Street whose name is synonymous with greed, sleaze, and fraud. Max Keiser, broadcaster and former broker & options trader, says, ‘Goldman Sachs are scum. I mean that’s the bottom line. They have basically co-opted the U.S. Government, they have co-opted the Treasury Department, the Federal Reserve functionality. They’ve co-opted the Obama administration. And Barack Obama dances to Goldman Sach’s tune. They are really crooked and abominable in what they’ve done.’

Keiser continues, with remarkable candour, ‘Just remember, Hank Paulson held Congress hostage, took them in the back room and said give us $700 billion or we’re gonna crash the market. He’s an arsonist; he’s an outlaw. And yet he’s given praise. If you go down the list, they’re all Goldman Sachs scum, whether it’s Hank Paulson, whether it’s Geithner…you know Geithner has very strong ties to Goldman Sachs…and of course all these banking bonuses are paid out to all their cronies who are Goldman Sachs scum.’

Another Anglo Irish Bank bondholder is the Rothschilds Bank, Zurich; the Rothschild family are reputed to have owned half the wealth of Europe a century and a half ago – how much do they own now? And most of the remaining bondholders are worth an accumulation of some twenty trillion euro. An Irish default would involve such an insignificant fraction of their wealth that it would hardly cause them to raise their eyebrows. Yet Cowen and Lenihan forced crippling debt upon the Irish people for many years to come in order to repay the banksters every single cent of their reckless investments.

One great irony amid all this debt and despair is the great wealth recently discovered in the gas fields off the west coast of Ireland. The Corrib gas field alone is reckoned to be worth well over €420 billion, enough to pay off all of Ireland’s debts and make the country vastly rich. According to the Petroleum Affairs Division there is even more gas and oil off the west coast, perhaps as much as 13 trillion euro or beyond, enough to make millionaires of every man, woman, and child in Ireland.

What did the Irish Government do with this €420 billion windfall from the Corrib field? They gave it away to Royal Dutch Shell for nothing. Yes, nothing! In an incredible move, the government cut the State’s share from 50% to zero on all its offshore oil and gas and abolished all royalties.

Why would they do such a crazy thing?

For an answer to that you’ll have to ask the then minister, Ray Burke, who was later convicted and jailed for political corruption on other matters.

Royal Dutch Shell, with its monthly revenues fluctuating between $25 billion and $45 billion, certainly doesn’t need the money as much as the Irish people do. Royal Dutch Shell is a key Bilderberg asset; its principal shareholder is Queen Beatrix of Holland, a long-time member of Bilderberg which was founded by her father, Prince Bernhard, a former officer of Hitler’s SS. Giving these plutocrats billions, and perhaps trillions, in oil and gas for absolutely nothing is criminally obscene and utterly enraging. These energy resources rightfully belong to the Irish people and it’s not for individual politicians, whether corrupt or incompetent, to give them away for nothing.

Looking forward, there will soon be a new government in Ireland. It is now time for the Irish people to take a firm stand. In the coming election campaign they must warn incoming government hopefuls that there HAS to be radical change. The criminal pledges of an outgoing government of traitors MUST be dismantled and consigned to the trash can, along with their authors. The people will not stand for more of the same old bullshit gombeen politics; they are in no mood for mealy-mouthedness or ineffectual tinkering with a failed system. They demand nothing less than clear, decisive, and even ruthless change. They demand leaders of integrity, innovation, and courage. And they demand a decent living for themselves, their children, and future generations yet unborn. There can be no going back!

Pecunia, si uti scis, ancilla est; si nescis, domina. (If you know how to use money, money is your slave; if you don’t, money is your master.)


Jimmy Rogers on Ireland...

Video: Per usual, Jimmy Rogers tells the undeniable truth...

Even better, he never mucks around with airtime. This is a solid 2 minutes of pain for bank-bullshitting fear mongers on both sides of the Pond.



Watch this one...

This is outstanding...


Spoiler ALERT -- Do not miss #7:


It's raining global bankster bullshit...

See the rest of the photos - 25 pics - Make sure to see #12 and #13...


Heads up - Fans of women's swimming (and high heel shoes) might want to make sure to see pic #4...


Spoiler ALERT -- Do not miss #7:


« Simon Johnson: "The age of America is over; Chinese Yuan will be the world's reserve currency within 2 decades" »

(Reuters) - To hear a number of prominent economists tell it, it doesn't look good for the U.S. economy, not this year, not in 10 years.

Leading thinkers in the dismal science speaking at an annual convention offered varying visions of U.S. economic decline, in the short, medium and long term. This year, the recovery may bog down as government stimulus measures dry up.

In the long run, the United States must face up to inevitably being overtaken by China as the world's largest economy. And it may have missed a chance to rein in its largest financial institutions, many of whom remain too big to fail and are getting bigger.

The United States will need to come to terms with the fact that its prevalence in the world is fated to come to an end, Jorgenson said. This will be difficult for many Americans to swallow and the United States should brace for social unrest amid blame over who was responsible for squandering global primacy, he said.

MIT's Simon Johnson put it more bluntly, saying the damage from the financial crisis and its aftermath have dealt U.S. prominence a permanent blow.

  • "The age of American predominance is over," he told a panel. "The (Chinese) Yuan will be the world's reserve currency within two decades."

Johnson said he believes the United States has failed to learn its lesson from the financial crisis and continues to implicitly back its largest financial institutions.

  • "I'm concerned about the excessive power of the largest global banks," he said. "Who are the government-sponsored enterprises now? It's the six biggest bank holding companies."


Continue reading at Reuters...


Simon Johnson with Bill Moyers...

More detail on this clip is here...


This is excellent...


« Tim Geithner Says The United States Is Insolvent »

Scroll down for a huge video collection...


Michael S. Rozeff

Geithner Says U.S. Insolvent

The U.S. government is insolvent. Who says so? Timothy F. Geithner, the U.S. Secretary of the Treasury. Geithner sent a letter to Congress on Jan. 6, 2011 asking for the debt limit to be raised. If it is not raised, he warned, the U.S. will default on its debt.

In his words:

  • "Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States."

He didn’t say that the government will be inconvenienced. He didn’t say that the government would be forced to muddle through by delaying payments, raising taxes, and cutting non-obligatory programs and services. He said the government will default. This means that the government doesn’t have enough cash to pay its obligations to the many and sundry persons to whom it owes cash unless Congress authorizes an issue of even more debt.

After the government issues the new debt, its overall debt will be even higher than before. Unless its obligations that require cash payments are reduced, or unless it finds new sources of revenue, or unless the interest rates that it pays decline, the same situation will surely occur again and occur even faster because its overall debt will have risen. It will run short of cash to pay its obligations.

Suppose that you had a debt of $10,000 that required a payment of $500 in order to stave off your creditors’ seizing your assets. Suppose that you didn’t have the $500. One way out would be to borrow $500 from a new lender and use that $500 to pay off the old lenders. That buys you time. However, now you have debts of $10,500. You have to find ways of lowering this or else you will again be faced with an even worse situation.

You are approaching insolvency when you begin to run out of new lenders who are willing to add to your debt. The willing lenders dry up because they know that they have to get in line to get their promised payments while you continually seek out new borrowers, all the while making your situation worse and worse.

Knowing their precarious position, the new lenders are likely to demand rising default risk premiums.

That means they demand higher interest rates.

That means your cash payment obligations go up. That hastens your approach to insolvency.

Insolvency occurs when you cannot find enough cash from any source, even new lenders, in order to make required payments.

The U.S. is approaching insolvency, according to its Treasury Secretary. He didn’t put the matter in precisely that way, but he put it in words that are as close as you can get to it. He said that the U.S. would default, and its only way out at this moment is to issue more debt.

The increases in the debt limit have necessarily accompanied the increase in the government’s overall debt. Those increases have been especially astonishing in the last 10 years. The ceiling is now $14.29 trillion. The ceiling was $5.73 trillion in September of 2001. That’s a growth rate of over 10 percent a year.

A few months back, Laurence Kotlikoff wrote that "The U.S. is bankrupt." Using the government’s numbers properly labeled, he found that the U.S. fiscal gap, which is the difference between the present value of projected spending and revenues, is $202 trillion. An IMF study of the U.S. finances found that it would have to double taxes to close its fiscal gap. This is an impossibility. It would destroy the struggling economy.

Geithner’s statement confirms those of other analysts outside of the U.S. government.

According to Kotlikoff, the government’s sixty-year "massive Ponzi scheme" will end when there are not enough revenues to pay for Social Security, Medicare, and Medicaid. He sees large benefit cuts, large tax increases, and high inflation ahead when the government seeks to survive.

How will the U.S. extricate itself from this situation? That’s a matter of speculation because there are many interacting variables involved. There are lots of ifs, ands, and buts.

When a state cannot meet its promised obligations, there is no bankruptcy code to guide a reorganization, as there is with a company. There is no court to oversee a restructuring. There is no judge or panel that decides on the priority of claims. Instead, the government itself decides how to handle its inability to pay cash to fulfill its promises.

In the immediate future, the U.S. government will not default on its bonds. They will have priority of payment. The reason the government will do that is to maintain its capacity to borrow at reasonable rates of interest so that it can maintain its size and programs. If the government defaulted on its bonds as a way of solving its financial problem, it would have immediately to cut back its spending severely. The government would shrink radically all at once. The government would take a big bath. Congress doesn’t want to do that. It would rather stretch out the default process and inflict the pain over time and among more groups than bondholders. Congressmen prefer to maintain themselves in power while managing a large government. Other branches and bureaucracies also prefer to keep their pet programs and activities afloat.

Therefore, as usual, Congress will raise the debt limit again. That doesn’t end the financial problem. It adds to it even as it postpones and enhances possible insolvency.

The new lenders that the government seeks out to lend it new cash are likely to demand higher interest rates, except for one major lender, which is the Federal Reserve System.

Bond yields are subject to numerous worldwide influences. They include the default risk premiums demanded by foreign lenders, including Asian central banks. Those risk premiums are likely to rise.

In contrast, the Federal Reserve has committed itself to buying $600 billion of new government debt in the next few months. Its purchases tend to support bond prices and keep interest rates down, other things equal.

As the Federal Reserve keeps buying more and more government debt, with no prospect of reducing its holdings unless and until the government gets its house in order, bond yields are likely to rise, despite Fed buying, because yields also reflect inflation premiums. The prospect of inflation will rise as the Fed monetizes the debt. We would then see yields rising accompanied by firm prices of commodities and metals.

The inflationary participation by the Fed, which postpones the inevitable fiscal decisions of the government, harms all holders of fixed-dollar assets and all those whose receipts of dollars are fixed and lag behind the Fed’s production of new dollars. In addition and more importantly, the inflation sets in motion another boom-bust cycle.

Continued debt monetization by the Fed is quite likely for many reasons.


Geithner and Paul Ryan argue over the deficit...

I brought up page 146 in your budget which is your S-1 budget totals...­y2011/assets/budget.pdf

When you take a look at this, I just find this amazing. You've got budget totals here, which by your own admission, from your own Budget Director, and youre a smart guy, youve got smart economists over there, all of them say, that for the medium and long-run budget deficits have to get below 3% of GDP, yet this budget plan that youre bringing to us doesn't even get close to it.

Treasury Secretary Tim Geithner: Youre exactly right.

Ryan: Since I have three minutes, you have this warning under here. Its like a warning on a cigarette pack. You have this little magic box underneath your budget totals that says: were going to have a commission do it. Were going to have this partisan commission, with a 2 to 1 ratio of Democrats and Republicans, that will give us a report after the election.

Geithner: Its not a 2 to 1 ratio, thats not fair. And let me say it slightly differently, were going to solve our part of the mess we inherited. We inherited a structural deficit and to bring that down, were going to have to work together.

Ryan: Why dont you solve this problem in your Budget? You run the government, if you are going to solve our fiscal situation, why dont you do that? Why dont you give us a budget that actually gets our deficits to sustainable levels?

Let me read a quote from OMB Director Peter Orszag in the Wall Street Journal: The unusual situation that the government finds itself in with other countries willing to finance U.S. debt at low rates wont last. He added, when it flips, the question is: how do you get ahead of that to avoid the downward spiral of rising interest rates, plunging dollar, a sinking economy.

Geithner: I think its a good quote, too. I agree with that.

Ryan: The vigilantes in the bond market are going to get us and the American people are going to get hurt. And so, why arent you giving us a budget - not punting to a commission - why arent you giving us a budget that using your own standards and definitions actually is sustainable?

Geithner: Congressman, we are proposing a budget that takes the huge mess we inherited and cuts that deficit dramatically.

Ryan: You can blame Bush only so long. You obviously inherited a tough situation, but you are making it worse by your own admission.


Video - Geithner on the deficit - Meet the Press


Geithner says the U.S. will never lose its AAA rating...

Famous last words...


Even Obama admits that we're broke...

Video - Obama on C-Span discussing health care & GM - May 23, 2009

The pink elephant gets some love as Obama admits:

  • "Well, we're out of money now..."


Ron Paul says he'll vote against raising the debt ceiling...

Excellent clip.

Video - Jan. 8, 2011 - Ron Paul discusses how raising the national debt limit is inevitable due to the culture of spending in Washington...

Bill just presented in the Virginia House of Delegates

Offered January 12, 2011
Prefiled December 17, 2010
A BILL to amend and reenact §§ 26-15, 55-59.1, and 55-66.01 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 55-59.5 and 55-59.6, relating to foreclosure procedures; assignment of deed of trust.
Patron-- Marshall, R.G.
Referred to Committee for Courts of Justice

Be it enacted by the General Assembly of Virginia:

1. That §§ 26-15, 55-59.1, and 55-66.01 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding sections numbered 55-59.5 and 55-59.6 as follows:

§ 26-15. Accounts of sales under deeds of trust, etc.

Within six months after the date of a sale made under any recorded deed of trust, mortgage or assignment for benefit of creditors, otherwise than under a decree, the trustee shall return an account of sale to the commissioner of accounts of the court wherein the instrument was first recorded. Promptly after recording any trustee's deed, the trustee shall deliver to the commissioner of accounts a copy of the deed. The date of sale is the date specified in the notice of sale, or any postponement thereof, as required by subsection A B of § 55-59.1. The commissioner shall state, settle and report to the court an account of the transactions of such trustee, and it shall be recorded as other fiduciary reports. Any trustee failing to comply with this section shall forfeit his commissions on such sale, unless such commissions are allowed by the court.

If the commissioner of accounts of the court wherein an instrument was first recorded becomes aware that an account as required by this section has not been filed, the commissioner and the court shall proceed against the trustee in like manner and impose like penalties as set forth in § 26-13, unless such trustee is excused for sufficient reason. If after a deed of trust is given on land lying in a county, and before sale thereunder, the land is taken within the limits of the incorporated city, the returns of the trustee and settlement of his accounts shall be before the commissioner of accounts of such city.

Whenever the commissioner reports to the court that a fiduciary, who is an attorney-at-law licensed to practice in the Commonwealth, has failed to make the required return within 30 days after the date of service of a summons, the commissioner shall also mail a copy of his report to the Virginia State Bar.

§ 55-59.1. Notices required before sale by trustee to owners, lienors, etc.; if note lost.

A. At least 45 days before any proposed sale in execution of a deed of trust, the party secured or mortgage servicer shall provide written notice to the present owner of the property to be sold of the intent of the party secured to foreclose upon the property. The notice shall contain the name, address, and telephone number of the party secured, the trustee, and any employee or department of the mortgage servicer, the party secured, or any agent of the party secured that can be contacted for inquiries regarding alternatives to foreclosure, including loan modifications. The notice shall be sent by certified or registered mail to the present owner's last known address as such owner and address appear in the records of the party secured.

B. In addition to the advertisement required by § 55-59.2, the trustee or the party secured shall give written notice of the time, date and place of any proposed sale in execution of a deed of trust, which notice shall include either (i) the instrument number or deed book and page numbers of the instrument of appointment filed pursuant to § 55-59, or (ii) said notice shall include a copy of the executed and notarized appointment of substitute trustee by personal delivery or by mail to (i) (a) the present owner of the property to be sold at his last known address as such owner and address appear in the records of the party secured, (ii) (b) any subordinate lienholder who holds a note against the property secured by a deed of trust recorded at least 30 days prior to the proposed sale and whose address is recorded with the deed of trust, (iii) (c) any assignee of such a note secured by a deed of trust provided the assignment and address of assignee are likewise recorded at least 30 days prior to the proposed sale, (iv) (d) any condominium unit owners' association which has filed a lien pursuant to § 55-79.84, (v) (e) any property owners' association which has filed a lien pursuant to § 55-516, and (vi) (f) any proprietary lessees' association which has filed a lien pursuant to § 55-472. Written notice shall be given pursuant to clauses (iv) (d), (v) (e) and (vi) (f), only if the lien is recorded at least 30 days prior to the proposed sale. Mailing of a copy of the advertisement or a notice containing the same information to the owner by certified or registered mail no less than 14 days prior to such sale and to lienholders, the property owners' association or proprietary lessees' association, their assigns and the condominium unit owners' association, at the address noted in the memorandum of lien, by ordinary mail no less than 14 days prior to such sale shall be a sufficient compliance with the requirement of notice. The written notice of proposed sale when given as provided herein shall be deemed an effective exercise of any right of acceleration contained in such deed of trust or otherwise possessed by the party secured relative to the indebtedness secured. The inadvertent failure to give notice as required by this subsection shall not impose liability on either the trustee or the secured party.

BC. If a note or other evidence of indebtedness secured by a deed of trust is lost or for any reason cannot be produced and the beneficiary submits to the trustee an affidavit, under penalty of perjury, to that effect, the trustee may nonetheless proceed to sale, provided the beneficiary has given written notice to the person required to pay the instrument that the instrument is unavailable and a request for sale will be made of the trustee upon expiration of 14 days from the date of mailing of the notice. The notice shall be sent by certified mail, return receipt requested, to the last known address of the person required to pay the instrument as reflected in the records of the beneficiary and shall include the name and mailing address of the trustee. The notice shall further advise the person required to pay the instrument that if he believes he may be subject to a claim by a person other than the beneficiary to enforce the instrument, he may petition the circuit court of the county or city where the property or some part thereof lies for an order requiring the beneficiary to provide adequate protection against any such claim. If deemed appropriate by the court such a petition is made, the court may condition shall not permit the sale on a finding unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means. If the trustee proceeds to sale, the fact that the instrument is lost or cannot be produced shall not affect the authority of the trustee to sell or the validity of the sale.

CD. When the written notice of proposed sale is given as provided herein, there shall be a rebuttable presumption that the lienholder has complied with any requirement to provide notice of default contained in a deed of trust. Failure to comply with the requirements of notice contained in this section shall not affect the validity of the sale, and a purchaser for value at such sale shall be under no duty to ascertain whether such notice was validly given.

DE. In the event of postponement of sale, which may be done in the discretion of the trustee, no new or additional notice need be given pursuant to this section.

§ 55-59.5. Sale by trustee; additional requirements; nominee cannot request sale.

A. On or after July 1, 2011, if a deed of trust or mortgage has been assigned by the original grantee or mortgagee, the trustee, or any substitute trustee, under any deed of trust or mortgage shall not proceed with any sale of the property unless (i) all assignments of the deed of trust or mortgage have been duly recorded with the land records of the locality in which the property is located and (ii) the person who asserts that he is the holder of the obligation secured by the deed of trust or mortgage can directly trace his interest through the duly recorded assignments to the original grantee or mortgagee.

B. If all assignments of the deed of trust or mortgage have not been duly recorded with the land records of the locality in which the property is located, the trustee, or any substitute trustee, may proceed with the sale of the property conveyed to him by the deed of trust or mortgage upon (i) the recordation of any assignments necessary to trace the interest of the person who asserts that he is the holder of the obligation secured by the deed of trust or mortgage to the original grantee or mortgagee or, if an intervening assignment cannot be recorded because the assignee no longer exists, the provision of an affidavit by the party secured to the trustee, or any substitute trustee, attesting under penalty of perjury that the person is the party secured under the deed of trust, and (ii) the payment of all fees, taxes, and other costs applicable to the recording of the assignments. The person who asserts that he is the holder of the obligation secured by the deed of trust or mortgage is solely responsible for paying all fees, taxes, and other costs required in clause (ii).

C. A nominee of a grantee, mortgagee, or beneficiary for a deed of trust or mortgage has no authority to request that the trustee, or any substitute trustee, proceed with any sale of the property and the trustee, or any substitute trustee, shall not proceed with any such sale upon the request of the nominee. As used in this section, "nominee" means a person who is designated in the deed of trust or mortgage, or who is subsequently designated to act on behalf of the grantee, mortgagee, or beneficiary. The term "nominee" does not include an agent or other fiduciary.

§ 55-59.6. Foreclosure; civil penalty for fraud; civil action.

A. Any person who (i) knowingly makes, uses, or causes to be made or used a false or fraudulent record, document, or statement or (ii) knowingly swears or affirms falsely to any matter, in support of any foreclosure upon property under this chapter shall be liable for a civil penalty of $5,000 for each violation.

B. Any attorney for the Commonwealth for the county or city or any attorney for the county, city, or town in which an alleged violation occurred may bring an action to recover the civil penalty, which shall be paid into the local treasury. A person violating this section shall be liable for reasonable attorney fees and costs of a civil action brought to recover any such penalty.

C. The owner of the property subject to foreclosure has a civil cause action against a person who has violated this section, and shall be entitled to recover from such person compensatory damages in the amount of three times the damages incurred by the owner as a result of the violation in addition to reasonable attorney fees and costs.

D. The civil penalty provisions of this section shall apply in addition to any applicable criminal penalties for forgery set forth in §§ 18.2-168 and 18.2-172 and perjury set forth in § 18.2-434 or any other applicable criminal penalty.

§ 55-66.01. Protection of assignees or transferees of debts secured by real estate; form of certificate of transfer.

A. Whenever a debt or other obligation secured by a deed of trust, mortgage or vendor's lien on real estate has been assigned, the assignor or the assignee, at its option, may cause the instrument of assignment to be recorded in the clerk's office of the circuit court where such deed of trust, mortgage or vendor's lien is recorded provided such instrument is otherwise in recordable form, or may cause a certificate of transfer signed by the assignor to be recorded in such clerk's office, and such instrument of assignment or certificate of transfer, upon recordation, shall operate as a notice of such assignment. The instrument of assignment or certificate of transfer shall be indexed in the name of the assignor and in the names of the obligor or maker, and the trustees, as applicable, all of whose names shall be set forth in such instrument or certificate. The certificate of transfer shall conform substantially to the following:

Place of Record: Clerk's Office of the Circuit
Court of the ............ of
............, Virginia
Date of [Deed of Trust/
Mortgage/Vendor's Lien]: ................,
Deed Book
........, Page ........
Name of Obligor or Maker: ..........................................
Names(s) of Trustee(s)
[if a Deed of Trust]: ..........................................
Name of Original
Payee or Obligee: ..........................................
Original Amount Secured
[if applicable]:
$ ................................................................
The undersigned, the original payee or obligee [or the subsequent assignee]
of the obligation secured by the above-mentioned [Deed of Trust/Mortgage/
Vendor's Lien], hereby certifies that the obligations secured thereby have
been assigned to ....................................................
[If a credit line deed of trust, the name and address to which notice may
be mailed or delivered to the Noteholder as provided by § 55-58.2 is as
Given under [my/our] hand(s) as of the ................................
day of ................, ..........
.................. of .............
County/City of ...................., to wit:
Subscribed, sworn to and acknowledged before me by ....................
this .................... day of ............ 20..........
My Commission Expires: ............
Notary Public

For purposes of this statute, the word "assigned" shall include endorsed, pledged, hypothecated or otherwise transferred. Nothing in this statute shall be deemed to invalidate any other form or notice of assignment that may have been heretofore recorded. Nothing in this statute shall imply that recordation of the instrument of assignment or a certificate of transfer is necessary in order to transfer to an assignee the benefit of the security provided by the deed of trust, mortgage or vendor's lien.

B. On or after July 1, 2011, all assignments of a debt or other obligation secured by a deed of trust or mortgage shall be recorded in the clerk's office of the circuit court where such deed of trust or mortgage is recorded. The trustee, or any substitute trustee, under any deed of trust or mortgage shall not proceed with any sale of the property conveyed to him by the deed of trust or mortgage at the request of a person who asserts that he is the holder of the obligation secured thereby unless the land records of the locality in which the property is located contain a duly recorded instrument evidencing the assignment of the secured obligation to such person.

2. That the provisions of this act may result in a net increase in periods of imprisonment or commitment. Pursuant to § 30-19.1:4, the estimated amount of the necessary appropriation is $0 for periods of imprisonment in state adult correctional facilities and is $0 for periods of commitment to the custody of the Department of Juvenile Justice.

KPMG says public purse the main victim as fraud cases soar

Financial crime hit record levels in 2010, with the Government overtaking the financial services industry as the main victim, according to the KPMG Fraud Barometer.

Financial crime hit record levels in 2010, with the Government overtaking the financial services industry as the main victim, according to the KPMG Fraud Barometer.
The total number of fraud cases reported in the UK last year rose 16pc to 315, worth just under £1.4bn, according to the KPMG fraud barometer.

Fraud committed by company managers was the fastest growing area, up 30pc in value to £441m against the previous year. Tax fraud, money laundering and complex cases involving new technology all increased in the year. According to KPMG many of the cases were directly linked to the tight economic conditions.

Hitesh Patel, KPMG forensic partner, said: "Government agencies, like commercial businesses, have been increasingly vulnerable to the threat of fraud. In a year of austerity measures implemented by Government, tax increases, rising unemployment, and significant structural change it is hardly surprising that the long fingers of the fraudster have reached into the public purse."

The total number of fraud cases reported in the UK last year rose 16pc to 315, worth just under £1.4bn, according to the KPMG fraud barometer, which only records cases worth in excess of £100,000 that have been heard or are due to be heard in the High Courts. The real level of fraud, undetected and unprosecuted, is almost certainly a significant multiple of this figure.

The public purse bore the brunt of the cases in 2010, overtaking financial services as the main victim of fraud. Just over 42pc of all cases targeted the Government, in total worth £593m. The number of such cases increased from 59 to 70 in 2010.

Mr Patel said: "Businesses trying to survive and individuals seeking to maintain lifestyles by whatever means will have undoubtedly driven the numbers up – it is these same vulnerable groups that will have been the prey for professional criminals."

The sharp rise in cases involving company management is thought to be linked to the pressure directors have been under to perform in the recession and its aftermath. The level of fraud linked to employees was roughly a third that of management at £129m. Cases of fraud perpetrated by managers were much higher by value, averaging £7.2m per case against £1.6m for employees.

Although fraud detection normally increases during and just after recessions, the current economic downturn has not seen the expected spike in activity – until now. Many legal experts attribute the lack of prosecutions to police forces around the country downsizing their fraud squads during the Labour administration. Never a key sector under Labour, many fraud squads were either disbanded or demoted from 1997 to 2010.

However, one area where the corporate world seems to have had some success tackling financial crime is in mortgage fraud. Although instances of mortgage fraud were rife in the first half of the year they plummeted from July to December, the total number of cases dropping from 21 to 13 between the first and second half of the year.

One of the largest cases to appear in the KPMG Fraud Barometer involves alleged fraudster Michael Richards, 48. The businessman stands accused of masterminding one of the biggest direct tax frauds in UK history.

Although the case has yet to reach trial Mr Richards is accused of making fraudulent bids worth £103m in tax breaks on research into green technologies. Prosecutors say rich investors were lured into the scheme. Mr Richards is charged with six offences in total. The case is unlikely to reach court until 2012.

Meanwhile KPMG says that fraudsters are beginning to target new technology, as one case in the Midlands demonstrated. In this instance, a DJ was accused of plotting a credit card scam on the iTunes website.

Both the man and his 10 accomplices targeted the Apple and Amazon sites with 20 songs which they then sold through them. It is thought that they then stole approximately 1,500 credit cards to buy the songs, and then claimed back just under £469,000 in royalties.

Riots rage in Chile as gas price hike fuels flames of anger

Do NOT give out any numbers on your card to a phone caller. Period. They want the 3-digit PIN # on the back. Don't give it out

"This is (name), and I'm calling from the Security and Fraud Department at VISA. My Badge number is 12460, Your card has been flagged for an unusual purchase pattern, and I'm calling to verify."

"This information is on your VISA card which was issued by (name of bank). Did you purchase an Anti-Telemarketing Device for $497.99 from a marketing company based in Arizona (your state)?"

When you say 'No', the caller continues with, 'Then we will be issuing a credit to your account. (Yeah, sure, really! Some anonymous dickhead on the phone is going to GIVE you a credit! Give me a break!)

"This is a company we have been watching and the charges range from $297 to $497, just under the $500 purchase pattern that flags most cards. Before your next statement, the credit will be sent to (gives you your address), is that correct?'

If you are really numb, you say 'yes'. If you're alert, say 'No' and hang up.

Or the caller continues - 'I will be starting a Fraud Investigation. If you have any questions, you should call the 1- 800 number listed on the back of your card (1-800-VISA) and ask for Security. You will need to refer to this Control Number. The caller then gives you a 6 digit number. 'Do you need me to read it again?'

Here's the IMPORTANT part on how the scam works - The caller then says, 'I need to verify you are in possession of your card'. He'll ask you to 'turn your card over and look for some numbers'. There are 7 numbers; the first 4 are part of your card number, the last 3 are the Security Numbers that verify you are the possessor of the card.

These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the last 3 numbers to him. After you tell the caller the 3 numbers, he'll say, 'That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card Do you have any other questions?'

After you say no, the caller then thanks you and states, 'Don't hesitate to call back if you do', and hangs up. You actually say very little, and they never ask for or tell you the card number.

But after we were called on Wednesday, we called back. Within 20 minutes to ask a question. Are we were glad we did!

The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of $497.99 was charged to our card. We made a real fraud report and closed the VISA account. VISA is reissuing us a new number. What the scammers want is the 3-digit PIN number on the back of the card. Don't give it to them. Instead, tell them you'll call VISA or Master Card directly for verification of their conversation..

The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN Number, you think you're receiving a credit; however, by the time you get your statement you'll see charges for purchases you didn't make, and by then it's almost too late and/or more difficult to actually file a fraud report.

What makes this more remarkable is that on Thursday, I got a call from a 'Jason Richardson of MasterCard' with a word-for-word repeat of the VISA Scam. This time I didn't let him finish. I hung up! We filed a police report, as instructed by VISA. The police said they are taking several of these reports daily! They also urged us to tell everybody we know that this scam is happening. I dealt with a similar situation this morning, with the caller telling me that $3,097 had been charged to my account for plane tickets to Spain , and so on through the above routine..

It appears that this Is a very active scam, and evidently quite successful

Ed Brown, Boston, Mass.l

The Federal Reserve Becomes Most Profitable Bank In History

The Financial Times reports the financial crisis has helped the U.S. Federal Reserve become the most profitable bank in history.

According to the the Fed, it turned an $80.9 billion profit in 2010. $76.2 billion of it came from securities the Fed bought during the financial crisis. The bank sent $78.4 billion of that profit to the U.S. Treasury.

The Financial Times explains that the Fed sends most of its profit to the Treasury instead of recapitalizing itself. And there's always the possibility these profits won't hold up in the future:

It is possible that the Fed’s profits could turn to losses in future years if rising inflation forced it to tighten monetary policy rapidly. In that case, it would have to pay much more interest on its liabilities and might suffer capital losses if it had to sell securities rather than let them mature.

But a Fed official said that he could not see circumstances in which the Treasury would have to recapitalise the Fed. If a regional Fed bank did suffer losses, then it would be allowed to halt future payments to the Treasury until it had recovered them, and it could create an accounting asset to reflect the suspension of payments that would keep its capital positive.

« You Gotta See This: Ohio Judge Follows JPMorgan's Advice And They Promptly Throw Him Into Foreclosure »

It's the loan modification bait and switch...

  • "We won't consider your case if you're current on your mortgage."
  • "Now that you are behind on your payment, we have denied your modification, and have started foreclosure."
  • Thank you for banking with JP Morgan Chase."

What's shocking, well maybe not so much for Jamie Dimon's operation, is that they did this to a judge.

Even more shocking? That Bank of America didn't do it first.


Ohio Judge Follows JPMorgan's Advice, Ends up in Foreclosure

Source - Cleveland Plain Dealer

Source - ML Implode

Ohio Judge Peter Sikora was looking to take advantage of the lowest mortgage interest rates in decades and refinance his eight-bedroom, lakefront Cleveland home, so he contacted his bank, JPMorgan Chase. With property values in decline in Cleveland, Chase said no to refinancing but told the judge to apply for a loan modification instead. The judge followed JPMorgan Chase’s advice to the letter and as a result has fallen a year behind on his nearly $1 million mortgage… hasn’t paid his property taxes… and now has ended up in foreclosure.

  • "The bank advised me that the only way they would consider a loan modification would be if I fell behind on my payments," said Sikora, 59, a judge since 1989. "I took their advice and put the money aside."

Sikora said he was surprised when, in June, during the middle of negotiations, JP Morgan Chase filed the foreclosure lawsuit against him seeking $999,000, including $6,400 in unpaid property taxes.

"It's unfortunate that it's gotten to this situation," Sikora said. "I've been talking with them for more than a year, but the bank hasn't been responsive."

The attorney for JP Morgan Chase did not return a phone call.


Third-quarter HAMP trials plunge 84% from year ago

The Treasury Department's Home Affordable Modification Program is dwindling.

According to data released last week from the Office of the Comptroller Currency, lenders started 43,739 new, three-month HAMP trials in the third quarter, down 84% from the peak of 272,709 a year ago.

New trials have been on the decline ever since lenders reported, on average, 57,000 fewer trials than the quarter before. The biggest drop came in first quarter of 2010, when lenders offered 118,000 fewer trials than the previous quarter.

"I think the program is turning out to have a lot less impact on the market than we thought it would have," said Sen. Ted Kaufman (D-Del.), chairman of Congressional Oversight Panel after it released a scathing report on HAMP last month.


Treasury's Incredible Shrinking Mortgage Mod Program

Banks have had a poor record of modifying mortgages under the government program.

Homeowners report Kafka-esque experiences of lost paperwork, miscommunication and dashed hopes in trying to get help preventing foreclosures.

We've recently chronicled homeowner experiences in a series of profiles and a questionnaire. Investors who own mortgages are dismayed as well.

The Treasury Department has yet to penalize a single mortgage servicer since the program launched last spring.


Amid Foreclosure Questions, Govt Loan Mod Program Continues


Bank Of America Stands Out For Poor HAMP Performance


Lawsuits Reflect Widespread Frustration With Government's Mortgage Modification Program

A federal judicial panel recently consolidated class-action lawsuits from across the country alleging that Bank of America treated homeowners with bad faith when they applied for mortgage modifications under the Obama administration's Home Affordable Modification Program.

"What this demonstrates is that homeowners across this country have grown frustrated with Bank of America's inability to comply with regulations put out by HAMP," Ira Rheingold, director of the National Association of Consumer Advocates, told HuffPost.

Under HAMP, the Treasury Department gives mortgage servicers $1,000 incentive payments to reduce borrowers' monthly payments, mostly by cutting interest rates. If an eligible borrower makes his or her reduced payments for three or four months during a trial period, the modification is supposed to become permanent. Often, trials drag on for much longer.

"Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States," says the complaint seeking class action filed in July by Teresa Follmer of Mesa, Ariz.

Follmer's suit is one of eight putative class actions that will be consolidated as one case in federal court in Massachusetts. Bank of America supports the consolidation, according to ProPublica, which first reported the consolidation.


Now watch this excellent clip...

Video - Yves Smith on The Real News

  • "Mortgage service industry makes more money from foreclosures than from restructuring debt."


We Need More Political Rhetoric, Not Less

The Rodeo Clown Posse was led out of Tucson in a cloud of dust with a hay-burning frenzy by Arizona's Pima County Sheriff Clarence Dupnik. Close in tow were hyper-boiling politicians and the usual lefty print and TV media cowboys such as Rep. James Clyburn, columnist Paul Krugman, TV antagonista Chris Matthews, and even our own Secretary of State Hillary Clinton. These tin-star constables couldn't get on their donkeys fast enough to round up the usual outlaws. The leading perennial villain, of course, is overheated political rhetoric, the euphemism for any strongly held opinion that differs from the liberal narrative.

The arrest warrant, hastily drawn up by the shallow yet influential chatterers, derives from a persistent liberal theme that political adversaries should be disarmed and neutralized by eliminating their ability to speak freely in any forum in any style. Thus, any pretext, no matter how reprehensible or disingenuous, to wrap duct tape around the mouths of their enemies is justifiable to this herd of dubious deputies. Moreover, they would have us believe that their brand of gag rule makes for a more perfect utopian democratic ideal.

John Steele Gordon in Tuesday's Wall Street Journal documents the long history of political discourse -- overheated, boiling, or even incendiary -- as a trademark of American politics. Speechmaking and opinion-mongering have always been athletic pursuits, punctuated by the well-timed sarcastic jab or sweeping insult. Otherwise, what would be the point? Protecting political speech, by no accident, is found in the First Amendment of the Bill of Rights. If political speech were not poignant, direct, explicit, colorful, indeed overheated and frequently uncomfortable and unwelcome -- short of libelous and directly life-threatening -- it wouldn't need to be protected, would it?

Political speech has content and a wrapper. Content is the idea; the wrapper is the means by which and from whom the idea is expressed. Often, competing ideas carry the identity of the speaker and with it, the good, bad and ugly. Personal attacks in print and speech, while generally unattractive if gratuitous, are often intertwined with retorts and rejoinders that can be both persuasive and amusing.

At least in the Anglo tradition, debaters have fun at others' expense. As noted by Bernard Bailyn in his seminal work The Ideological Origins of the American Revolution, there is actually a far lengthier history of astringent polemics in 18th-century Britain, where dissuading one's political opponent wasn't satisfaction enough -- annihilation was the goal. The subtle dig and explicit name-calling have their place -- one accepted as sophisticated repartee, the other denounced as unimaginative and immature ad hominem. Yet the latter is just as likely accompanied by laughing out loud, if only in private.

Speech of all types -- political or otherwise -- is protected because it forms the fundamental platform for sustaining the marketplace of ideas without which a democratic republic cannot survive. That's not to say that all ideas are equally elegant or elegantly expressed, or even that they deserve to be heard. But most ideas, even if clumsily expressed or devoid of merit, whether asserted gently or forcefully, deferentially or in your face, form the nutrient-rich red blood cells of our great nation's discourse.

Freedom of speech guarantees the formation of government by the people. The ballot box is where American political action happens. One of the more enduring but amazing features of America's exceptional nature has been the orderly governance transition for well over two centuries from one political leaning to a different one in succeeding administrations without violence or dysfunctional discord. Even throughout the antebellum and Civil War period, despite significant numbers of Southern sympathizers in the North, the federal government and its foundational principles remained intact.

It is also noteworthy that assassins and would-be gunmen targeting the political governing class, from John Hinckley, Jr to Lee Harvey Oswald and John Wilkes Booth, while having a profound and tragic impact on the course of U.S. and indeed human history, have been infrequent. And these were not calculated eliminations by a political class or engineered by multiple co-conspirators. These were the acts of isolated psychopaths with whatever grievances provoking them derived from neurological demons instead of mainstream political sloganeering making them crazy.

Free speech is the currency for a marketplace of liberty, private pursuits, and economic choices; in America, it has been remarkably free from anarchy and violence. If speech is proscribed or in any way curtailed or restricted, the ballot box will no longer be the perfection of opinion.

Imagine instead an America where speech is stifled, controlled, circumscribed, or diminished, and the right to say whatever by whomever is curtailed. That would render the ballot box incomplete, untrustworthy, unperfected, and doubtful. With the promise of the accessible ballot box, knowing that speech preceding it is free and unencumbered, hopes and frustrations can be ventilated by the peaceful act of voting. Without the safety valve of free and unencumbered speech, how would the right of the people peaceably to assemble, and to petition the Government for a redress of grievances happen peacefully and non-violently?

The Rodeo Clown Posse, having neither a persuasive idea nor an attractive wrapper to express it, would like to whip up an indiscriminate and symbolic hanging instead of recognizing that more speech, however expressed, is better than speech suppressed. The rest of us must be vigilant to keep this pernicious posse from finding a rope.

5 Reasons NOT to Pay Your Credit Cards

Are you one of the millions of Americans trying to decide between paying your credit card bills and eating?

John Galt — Activist Post

We live in a matrix that goes to unspeakable expense to nurture us from the teat to be good consumers. You are issued a tax collection number at birth (SS#), another artificial number for your credit worthiness (FICO), and then you’re extended a certain amount of tokens to play “life” based on those numbers. This virtual currency, not unlike your earned coins, only has value because you give it value.

It is a brilliantly designed game: the banksters create a unit of money out of thin air; lend it to people with interest attached; get them to buy real items; then raise the rates, force people to work harder, hover like a vulture until expected default occurs, and rake in the forfeited assets. Best of all, when the whole Ponzi scheme comes crashing down because they drunkenly gambled with your interest payments, the very people who destroyed you get bailed out by you with tax money. And they call youthe thieves when you can’t pay them back. The game is rigged for the house and it’s always a Win/Win for them and a Lose/Lose for you.

Sure, you get to “rent” a flat-screen TV, a car, or a home from them, making life in the matrix almost worth it. But, ultimately, you only temporarily use that stuff at great expense to you and massive profits to the banks. After years and years of paid interest, you still never truly own anything. The TV is now obsolete and worthless; you still must pay increasing property taxes and insurance on your homes and cars, even when your done paying the bank three times their value, all while they bought your years of servitude with nothing real or tangible.

In truth, if there was real justice in America, the criminal banking cartel would be arrested under the Federal Racketeer Influenced and Corrupt Organizations (RICO) Act, and their assets should seized and returned to their victims. After their arrest and the unconditional release of all debt prisoners, a new, fair, and sound money system should be put in place for the benefit of all (See The Secret of Oz).

For the many who are contemplating dropping out of the corrupt debtor system, the least impact from the mafia will occur by ignoring your unsecured credit cards. Before you take this action, be warned that you may have to return the signing bonus gift you received when got your contract to play in the big leagues.

Here are the top five reasons not to pay your credit cards:

  1. If you owe $6,000 on a credit card with a 20 percent interest rate, and you only pay the minimum payment each time, it will take you 54 years to pay off that credit card. During those 54 years you will pay $26,168 in interest rate charges in addition to the $6,000 in principal that you are required to pay back (Source).
  2. Under the legal fractional reserve banking system, the banks NEVER actually had the fake money for the credit they extended you in the first place. They added you to their stable of debt slaves with a simple accounting key stroke.
  3. The cartel of the large private banks are a proven criminal entity at the heart of most global problems including, but not limited to: wars, genocide, famine, and resource plundering. It’s immoral to continue to support such a system on any level.
  4. You won’t need a good credit score to live outside of the matrix. It’s a place in your mind where it is okay to not ever “use” anything with bank financing for the rest of your life.
  5. Not paying your credit cards may be one of the only ways to make the matrix feel the weight of your protest without drawing too much oppression.

Since the foxes guard the chickens on Wallshington Street, the citizens may have to take justice into their own hands through peaceful resistance — by simply dropping out of the matrix. In other words, don’t pay your phony debts to criminal banksters.

By not paying your debts, you should expect the system’s goons to rain down fear by way of phone calls and mail to you. Additionally, you will certainly risk losing your esteemed Farmville status and, these days, you may even win a free trip to one of the oligarchy’s private jails.

However . . . you could just wind up gaining some independence from your manufactured stress and servitude.

Australia flooding considered ominous sign of disasters to come

As deadly floodwaters reach their peak in Brisbane, residents of Australia’s third-largest city, around the same population of Vancouver, and surrounding area are bracing for the devastating aftermath, the full extent to which will only become apparent once the waters start to recede.

Officials said Thursday the Brisbane River, which runs through the centre of the city, peaked at 4.45 metres. Though well below expected highs, the flooding has already led to at least 13 deaths, billions in damages and displaced tens of thousands of people in the state of Queensland. Many residents face the prospect of not being able to return to their homes for months, while others have been made homeless by the flooding. Some experts predict it will take years to make a full recovery from this natural disaster.