Thursday, April 1, 2010

Peter Schiff: 'Very good reason' to believe home prices will collapse

The following is an opinion piece written by Peter Schiff, president of Euro Pacific Capital (www.europac.net), regarding the major housing initiative announced today by the White House. Mr. Schiff, a Republican, is also running for the U.S. Senate seat currently held by Banking Committee chair Christopher Dodd.

The latest housing initiative announced today by the Obama Administration draws the U.S. government and, by proxy, all taxpaying Americans, further into the inescapable quagmire of a devastated real estate market.

By transferring more underwater mortgage balances onto the public books, the plan puts taxpayers on the hook for further losses if housing prices continue to fall. Given the massive support for real estate already afforded by record-low interest rates and massive federal tax and policy incentives, there are very good reasons to believe that home prices will indeed collapse when these crutches are removed. Recent spikes in long-term interest rates warn of this prospect.

If the Administration had allowed losses to fall where they rightfully belong, namely on those who foolishly loaded up on toxic mortgage bonds, then the housing market would have already found its true clearing level. Instead, every measure is working to prolong and delay the ultimate reckoning, while setting up taxpayers as the patsy. Given the horrendous government deficit projections for the next several years, any losses incurred by the government mortgage portfolio may add a critical stress on America's fiscal viability.

In addition, the moves add even more incentives detrimental to economic growth. By targeting benefits toward unemployed homeowners, or those who are delinquent in mortgage payments, the program will encourage some mortgage holders to defer job-hunting and miss payments. Also, in offering loan-balance reductions, the program makes no distinction between homeowners who naively overpaid during the speculative peak and those who willfully put themselves underwater by taking advantage of home equity loans on existing mortgages. In short, these policies reward profligacy and penalize prudence.

The longer the government continues to distort the underlying economics of the real estate market, the longer it will take for the sector to heal itself - and the longer the sickness will infect the broader economy.

'Hedge Fund' Took Them for $8M, Family Says

SACRAMENTO (CN) - A family says three men ran a bogus hedge fund that cheated them of $8 million. They say the Black Card Group may never have existed at all, that if it did exist it's in default, and that its directors, Ethan Conrad, Frank Sim and Harrold Pressly, spent their money on luxury vehicles and resort property.
Five members of the Urata family say Conrad told them that "the real estate market was getting soft, that he had formed a hedge fund that was earning 3 percent a month and that Charles Urata should put his money in the fund instead of real estate." He told Urata that he had put his own money into the fund, which "was exclusive ... was available just for friends ... [and] that it was a 'no brainer'; that it was really safe."
But the Uratas say the Black Card hedge fund may never have even existed, and if it did, its managers "were not competent to manage an investment fund."
Not did the fund operate out of Las Vegas, as it claimed, according to the complaint: "If the defendant Black Card Group, Inc., was in fact ever legally formed and does indeed exist as a legal entity, the principal place of business of that entity was at all times relevant to this complaint, and is, located in the County of Sacramento."
The Uratas demand $8.2 million in damages for negligence, breach of contract and misrepresentation.
They are represented by Mark Campbell with Murphy, Campbell, Guthrie & Alliston.

Inventing the Internet

Click this link .... http://www.youtube.com/watch?v=BnFJ8cHAlco

Hutaree Militia Is An Israeli Mossad Zionist Front Group - True Sons Of Liberty Exposed Them In 2007

Click this link ....... http://bit.ly/9lEMEf

Massachusetts Court Stops H&R Block, Option One Foreclosures

People unfairly lured into a subprime mortgage shouldn't lose their homes to foreclosure. That's the ruling of a Massachusetts Appeals Court, in affirming an injunction blocking Option One Mortgage Corporation and H&R Block Mortgage Corporation from initiating foreclosure proceedings.

The preliminary injunction prohibits the two firms from initiating or advancing foreclosures on mortgage loans that the court found to be "presumptively unfair." Under the order, which affects up to 9,700 Massachusetts loans originated by Option One, AHMSI must give the Massachusetts Attorney General's Office advance notice before it intends to foreclose on any such loan, and if the Attorney General objects, obtain approval from the Court before foreclosing on a loan.

In a summary order, the Appeals Court affirmed the preliminary injunction. The Appeals Court cited the Supreme Judicial Court's decision in Commonwealth v. Fremont Investment & Loan and determined the Superior Court's injunction was proper. The Fremont case also involved a restriction on foreclosures obtained by the Attorney General based on evidence of unfair and deceptive loan origination practices.

Option One had appealed the November 2008 order on due process and other grounds, but was rejected by the court. AHMSI, the current servicer of Option One loans, did not appeal the order and has complied with its terms for the past 12 months.

"We are pleased with the court's decision, but we are most pleased that, for nearly a year, the court's preliminary injunction has helped ensure that no unnecessary foreclosures take place with respect to Option One loans," said Attorney General Martha Coakley. "Our office has worked with the current loan servicer to achieve reasonable workouts, which serve the interests of borrowers, the public, as well as the holders of these loans."

2008 suit

The Attorney General's Office filed suit against Option One and its parent company, H&R Block, Inc., in June 2008, alleging that they originated thousands of risky subprime loans in Massachusetts, with reckless disregard as to whether borrowers would be able to afford their loan payments - a practice that has contributed significantly to the foreclosure crisis in Massachusetts.

According to the complaint, filed in Suffolk Superior Court, Option One and H&R Block engaged in unfair and deceptive conduct on a broad scale by selling extremely risky loan products to Massachusetts consumers that the companies knew or should have known were destined to fail. The complaint also alleges that the companies discriminated against black and Latino borrowers in Massachusetts by charging them higher points and fees to close their loans than similarly situated white borrowers and by targeting black and Latino consumers with marketing that pushed the sale of predatory loan products.

In the November 2008 preliminary injunction, the court held that certain mortgage loans were "presumptively unfair," because they posed an unreasonable risk of default and foreclosure. On those loans, Option One must direct AHMSI not to foreclose without giving the Attorney General's Office 45-days to object.

During that time, the Attorney General's Office can object to the foreclosure going forward if it is determined that the loans were so risky as to be unfair, or was originated using unfair or deceptive acts or practices. If the Attorney General's Office objects, the parties have 15 days to resolve their differences and discuss alternatives, such as an affordable loan modification. If they cannot reach a mutually agreeable resolution in this time period, then AHMSI may only proceed with a foreclosure if it receives Court approval. To date, no foreclosures have gone forward over the Commonwealth's objection.

'Unfair' loans targeted

Under the order, a loan is "presumptively unfair" if it possesses the following characteristics:

The loan is an adjustable rate mortgage with an introductory period of three years or less;

The borrower has a debt-to-income ratio (the ratio between the borrower's monthly debt payments, including the monthly mortgage payment, and the borrower's monthly income) that would have exceeded 50% if Option One had measured the debt, not by the debt due under the teaser rate, but by the debt due under the fully-indexed rate, except when the borrower had a student loan in which payment had been deferred at least six months from the date of submission of the mortgage loan application, in which case debt-to-income ratio need exceed only 45 percent;

The loan has an introductory or "teaser" rate for the initial period that is at least 2 percent lower than the fully indexed rate, (unless the debt-to-income ratio is 55 percent or above, in which case the difference between the teaser rate and fully indexed rate is not relevant);

The loan-to-value ratio of the loan is 97% or the loan carries a substantial prepayment penalty or a prepayment penalty that lasts beyond the introductory period.

RDR: McVeigh and the 'Hispanic man' - what did the feds know?

OKLAHOMA CITY – Late last week, Red Dirt Report featured a story about reports indicating that there was somewhat of a resurgence in Ku Klux Klan membership in Oklahoma.

That story, which was among the most-viewed stories on the site this past week, triggered some discussion online, on the radio and with me personally. It seems as though the story reminded some folks here in the state of Elohim City out in Adair County, Okla. and that white supremacist community’s connection to Timothy McVeigh and the 1995 bombing of the Alfred P. Murrah federal building here in Oklahoma City.

Of course federal infiltration of right-wing extremist groups like the KKK, is well-known and thoroughly covered via the COINTELPRO operation directed by the FBI four decades ago. The raid on the “Hutaree” militia in Michigan and surrounding states is a major red flag, considering the FBI involvement in the raid and their history.

With all that is going on with Tea Parties, militias, Republicans and Democrats at each other’s throats … it is starting to feel like 1994-95 all over again. There is a Democrat president extremely interested in government-run health care. A top official named “Janet” interested in cracking down on right-wing extremists … and then there are these comments from David Cid, executive director of the Oklahoma City-based Memorial Institute for the Prevention of Terrorism, as reported Monday by the Associated Press …

Cid said there has been a “resurgence in the past year or two of ‘domestic militancy’ similar to what was seen before the Oklahoma City bombing.”

Indeed, Mr. Cid, who is also a former FBI counterterrorism agent is an expert on these sorts of issues. But one wonders who is really stoking the flames of ‘militancy’?

Continuing, Cid tells the AP: “It’s issues like eminent domain and immigration, and apparently national health care in some quarters. It’s increasing these people’s ire and their discomfort with their own government.”

One phone call to your Red Dirt Reporter was of particular interest. It was from a person I am familiar with and some of my readers are probably familiar with. This person had read my story on the KKK report connected to a site called Hatetrackers.com

The conversation went quickly from my story on the KKK in Oklahoma to the Elohim City connection and Andreas “Andy the German” Strassmeier, a foreign operative.

The caller said he believes the Southern Poverty Law Center, based in Montgomery, Alabama, is connected to figures linked to the bombing. Indeed, SPLC leader Morris Dees has previously told reporters about links to Elohim City and an informant that “If I told you what we were doing there, I would have to kill you.”

And this very week, SPLC is all over the news talking about the Hutaree militia and their alleged plans of waging war against the government and an “Anti-Christ.”

Back in 1995, this individual knew of a man who worked for a cleaning company that worked at the Murrah federal building in 1995. He was told how a young man working for the company happened upon two men – Timothy McVeigh and a Hispanic man – who were seeking a judge’s office wanting to “get married.”

It was after hours and on an upper floor of the Murrah building. They were wearing blue smocks, like those of the cleaning company workers. There had been reports of missing uniforms and equipment in the weeks leading up to the bombing and security, he told us, "was very lax."

As for the odd encounter with "McVeigh" and the "Hispanic man," it certainly alarmed the cleaning worker, who was reportedly interrogated for nearly an hour by federal officials in the days following the bombing.

Another thing he mentioned had to do with “John Doe 2” and his identity. The cleaning person identified the second man in the Murrah building in the days prior to the bombing as being the elusive “John Doe 2.” He was allegedly Hispanic, we were told, and had been a convict from California. The FBI, he said, had a photo of the Hispanic man and not just the famous sketch.

The person who called me shared more information about things he saw and heard in the following days, information related not only to the Murrah bombing but to 9/11, information that may be elaborated upon in future posts.

Talking to an Oklahoma City-based bombing researcher about this new information, he told Red Dirt Report that the deep source that contacted this online newspaper gave us information that corroborated information he has gathered in his many years of research and witness interviews. More on that in coming posts.

And don’t forget, as has been reported in recent years in the Salt Lake Tribune, things are not always as they seem.

Reported the Tribune in 2007: “Oklahoma City bombing conspirator Terry Nichols says a high-ranking FBI official ‘apparently’ was directing Timothy McVeigh in the plot to blow up a government building and might have changed the original target of the attack.”

And on Monday, we see a story posted at KTOK.com by reporter Jerry Bohnen headlined “CIA documents suggest foreign involvement in OKC 1995 bombing.”

Bohnen’s story notes that Salt Lake City, Utah attorney, Jesse Trentadue, whose brother was murdered in prison in the wake of the bombing, “sought a dozen document s from the CIA and (the federal judge Clark Waddoups) ruled they were considered ‘national security’ and would not be made available to the public. It was the first such national security defense ever used by the government in denying records to Trentadue.”

Naturally, the question that arises is what would the CIA have to do with a domestic terrorist attack that focused solely on McVeigh and Terry Nichols, two Americans.

In the KTOK story, Bohnen lists 12 “exhibits” are featured, ranging from foreign operatives offering information to the CIA to a cable from a day after the bombing that was “relaying information about the Oklahoma City bombing that was provided to a U.S. ambassador by a foreign official.” Many of these are simply listed as “classified as secret.”

In the story, Bohnen asks if there was “foreign involvement in some manner in the bombing or the investigation?”

Trentadue responds in the story by saying “Without a doubt.”

He then adds: “If there was no foreign involvement, then why was the CIA asked to help federal prosecutors?” He concludes saying that Enid attorney Stephen Jones was never offered the information about the possible CIA connection.

And on Monday afternoon, Lee Matthews, sitting in for Mark Shannon on KTOK's "Mark Shannon Show," asked listeners to call in and share their thoughts on this new revelation pointing to CIA links to McVeigh and the bombing. Reactions were mixed, with one caller saying that some information is best left alone.

Undeniably, something is in the air and it isn't just a lot of pollen. We here at Red Dirt Report hope the government will do the right thing and put all the information out there related to the Murrah bombing and others who may have been involved in that horrible terror attack nearly 15 years ago.

Private sector unexpectedly sheds 23,000 more jobs

U.S. private employers shed 23,000 jobs in March, missing expectations for an increase in jobs although fewer than the adjusted 24,000 jobs lost in February, a report by a private employment service said on Wednesday.

The February fall was originally reported at 20,000.

The median of estimates from 35 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 40,000 private-sector jobs last month.

The ADP report is seen as an early indicator of the Labor Department's employment report due out Friday. However, there can be wide variations because ADP only accounts for private-sector jobs.

Economists expect the Labor Department's report to show employers added 190,000 jobs in March. It would be only the second monthly increase in jobs since the recession began in late 2007. The number could be somewhat inflated because the government hired temporary workers to conduct the 2010 census.

The weak ADP report could temper some expectations for Friday's data.

Jobs growth is considered vital to a strong, sustained recovery because it will give consumers more confidence to go out and spend on goods and services. And consumer spending is the biggest driver of economic activity in the country.

The worse-than-expected jobs report appears set to provide a disappointing end to an otherwise strong first quarter.