Friday, October 2, 2009
Peter Schiff 9/29/09 "All The FDIC Does Is Damage/Government
Check this link ....... http://bit.ly/4bxIDL
BILL MOYERS JOURNAL | William K. Black | PBS
The Best Way to rob a bank is the own one ........ http://bit.ly/HQHcP
APF Leader Exposed As Career Criminal As Hardin Patrols Labeled Unconstitutional
Founder of private paramilitary force patrolling Montana town exposed as a lifetime crook
UPDATE: Exposed: American Police Force Is A Blackwater Front Group
The mystery surrounding the paramilitary force patrolling the streets of a town in Montana deepened last night after American Police Force founder “Captain” Michael Hilton was exposed as a career criminal and a convicted fraudster who has operated under numerous different aliases.
As we reported this week, Hardin Montana is currently being patrolled by a private organization completely outside the purview of the law as local authorities wait to seal a contract that will also see APF boss a $27 million dollar detention center located in the town.
APF’s founder, Michael Hilton, who ascribes himself the title “Captain” and speaks with an eastern European accent, has been at the center of the controversy after initially refusing to reveal his surname to reporters or even officials he was negotiating contracts with.
It has now emerged that “Michael Hilton” is merely the latest incarnation of a man previously known as Miodrag Dokovich, Michael Hamilton, Hristian Djokich and Michael Djokovich.
Hilton, who was born in the south-eastern European country Montenegro, is a “convicted felon with a number of aliases, a string of legal judgments against him, two bankruptcies and a decades-long reputation for deals gone bad,” according to an Associated Press report.
Hilton was sentenced to 6 years in jail in 1993 for “Such schemes you cannot believe,” according to Joseph Carella, an Orange County, Calif. doctor, namely a dozen counts of grand theft. Hilton has defrauded numerous different individuals to the tune of $1.1 million dollars over the past 20 years.
“Fraud cases include luring investors into a fake real estate development project, convincing a couple to give him a silver statue worth $100,000 dollars, and pocketing construction funds,” reports KURL 8 News.
Carella expressed his shock that authorities had even entertained Hilton’s proposal to have his paramilitary outfit take over the newly built detention camp while allowing his men to patrol the town.
“I didn’t even sleep last night because of the memories that it conjured up, he’s the reason I had to go bankrupt. I lost my practice, I had some mental issues because of this. He was using up other people’s money, mainly mine, and other people, like a Ponzi scheme,” said Carella.
Hilton’s claim to have advised forces in Iraq and Afghanistan also appears to be a lie, according to the AP.
Both Al Peterson, vice president of Hardin’s Two Rivers Authority, and Becky Shay, the former Billings Gazette reporter who first broke the story but was bizarrely lured to become APF’s spokesperson after she was given a brand new car and a massive pay raise, dismissed questions about Hilton’s criminal past.
Meanwhile, Livingstone State Representative Robert Ebinger told KURL 8 that APF may have violated article 2 section 33 of the Montana Constitution Titled Importation of Armed Persons, which states, “No armed person or persons or body of men shall be brought into the state for the presentation of the peace or the suppression of domestic violence unless the application of the legislature or of the governor when the legislature cannot be convened.”
“They talk about people being able to come in at a moments notice to put forces together and I think if we’re having statements like that made we should figure out who these people are what the deal is over there in Hardin,” said Ebinger.
The FBI refused to acknowledge that they were looking into APF’s occupation of Hardin but said they were aware of the situation.
Alex Jones will be on the ground reporting from Hardin Montana over the next two days to try and get to the bottom of the story and prevent what could be repeated across America, with at least 30 other towns and cities targeted for occupation by APF, if the paramilitary force is allowed to continue its business in Hardin.
The American Police Force is completely violating the Constitution and should be kicked out of the area immediately. No private organization, never mind a secretive paramilitary group headed up by a lifetime crook, should be allowed to conduct law enforcement duties in America.
Watch the two latest reports on American Police Force from KURL 8 News below.
Britain asks Schwarzenegger to close prostitute web site
LONDON (Reuters) - A British government minister asked California governor Arnold Schwarzenegger on Wednesday to shut down a U.S. website that allows men to rate prostitutes, including many working in London.
Harriet Harman, minister for women and equality, told the ruling Labor Party's annual conference that "Punternet" fuels the demand for prostitution -- a vice she said degrades women and puts them at risk.
She said the web site was a "very sinister development" in the trade and exploitation of women and allows guests to compare and rate services in the same way as they would a restaurant, a hotel or a holiday.
Pimps put women on sale for sex on the site then clients offered their comments on line, she said.
"Punternet has pages and pages of women for sale in London," said Harman, who is deputy leader of Prime Minister Gordon Brown's Labor Party.
She said she had raised the issue with the U.S. ambassador to Britain and asked California Governor Arnold Schwarzenegger to close it down as it is based in that state.
"Surely it can't be too difficult for 'The Terminator' to terminate Punternet and that's what I am demanding that he does."
The Punternet site describes itself as "The Online Community for Patrons and Providers of Adult Personal Services in the UK" and says it was "created to facilitate the exchange of information on prostitution in the UK."
A U.S. Embassy spokesman could not immediately be reached for comment.
Prostitution is not illegal in Britain. But associated activities, including soliciting, advertising using cards in telephone boxes and kerb crawling, are criminal offences.
The minister also used the speech to say the government would make it a criminal offence to have sex with a prostitute who is being controlled by a pimp.
The government was also stepping up action to tackle human trafficking in the run up to the 2012 Olympic Games, most of which will be hosted in London.
"We're determined to ensure that, especially in the run-up to the Olympics, international criminal gangs don't trick and abduct women from abroad and sell them for sex in London."
(Reporting by Stefano Ambrogi; Editing by Angus MacSwan)
FDIC Discloses Deposit Insurance Fund Is Now Negative
In an unprecedented disclosure, the FDIC has highlighted that it expects the DIF reserve ratio to be negative as of September 30. As there are a whopping 48 hours before that deadline, one can safely assume that the DIF is now well into negative territory: as of today depositors have no insurance courtesy of a banking system that has leeched out all the capital of the Federal Deposit Insurance Corporation. Let's pray there is no run on the bank soon.
Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative. This reflects, in part, an increase in provisioning for anticipated failures. In contrast, cash and marketable securities available to resolve failed institutions remain positive.
Additionally, the FDIC has now raised its expectation for bank failure costs from $70 billion $100 billion. Feel free to expect this number to continue growing.
Staff has also projected the Fund balance and reserve ratio for each quarter over the next several years using the most recently available information on expected failures and loss rates and statistical analyses of trends in CAMELS downgrades, failure rates and loss rates. Staff projects that, over the period 2009 through 2013, the Fund could incur approximately $100 billion in failure costs. Staff projects that most of these costs will occur in 2009 and 2010. Approximately $25 billion of the $100 billion amount has already been incurred in failure costs so far in 2009. Staff projects that most of these costs will occur in 2009 and 2010.
First Mary Schapiro has failed at her task of "regulating" anything on Wall Street, and now Sheila Bair presides over a newly insolvent institution. Chalk one up to Washington's success at "containing" the crisis. Zero Hedge wishes Ms. Bair all the luck in the world in returning the DIF to its statutory minimum requirement of 1.15% of all insured deposits (a shortfall of a mere hundred billion or so). Maybe she can convert the FDIC to a REIT and have Merrill Lynch do a concurrent IPO and follow-on offering (while Goldman raises it to a Conviction Buy which incorporates the firm's expectations for 10% GDP growth in 2010 coupled with projections for $1,000 per barrel of crude)?
FDIC's full memorandum outlining its failure can be found here.
Shadow Inventory Case Study: Inventory in the Shadows Twice as Big as Normal Resale Inventory in Los Angeles and not on the MLS or for Public Viewing.
The pent up inventory is getting ready to unleash in 2010. The gigantic bet made by the bankers and Wall Street was that somehow by allowing banks to fudge numbers since the crisis started that housing would find its footing and the market would stabilize. Sweep the collapse under the bailout rug. This perceived grounding was then going to allow banks to unload these properties and avoid realizing institutional ending losses. Yet 21 months into this painful recession and trillions handed out to the banking sector, housing prices are not spiking. The tiny uptick in home prices is a mirage brought on by three major factors. First, the $8,000 tax credit lured additional home buyers into the market. Next banks have held back on the shadow inventory thus artificially lowering the supply of homes on the market. Finally, the U.S. Treasury and Federal Reserve have artificially kept mortgage rates low by buying up some $1.25 trillion in mortgage backed securities. All this and housing prices have barely stabilized in some regions while foreclosures are at record breaking heights.
Yet the problem with operating in a crony banking system is that the tainted few are merely looking out for their own gain as they always do. They tried convincing the public that what they were doing was for the good of the average American yet behind the scenes, have shot down cram down legislation at every turn and have their hand out for every bailout. In reality, the current loan modifications are a joke and recent reports by the OCC and OTS show massive amounts of re-default rates.
NPR had a show last week discussing strategic defaults. A strategic default is when someone purposely stops paying even though they have the money to make the payment. This is in contrast to say a job loss default where the person has run out of cash. It was a fascinating show. Many people had little issue with defaulting on their home. Many argued that banks received their bailout so why shouldn’t they? We can thank the government for creating one enormous moral hazard. How can you argue with the borrower’s logic? However there is a problem. The taxpayer is now on the hook for nearly every major bank and let us be honest, the bulk of the mortgages are pumped out by the too big to fail. The government is the mortgage market now. So these strategic defaults are going to harm the average taxpayer even more.
To be honest, I have no problem with people walking away from their mortgage. In a sustainable environment, the punishment to this borrower will be a battered credit score and the inability to buy a home for many years. Yet the government in their infinite wisdom combined with Wall Street felt that by co-opting the banks with taxpayer money, somehow the prudent majority was going to be supportive of all these government handouts to the crony banking system. It is no surprise that people are downright dissatisfied with how things are being operated.
I love how some pundits argue that the shadow inventory will cause no problem on the markets or even, that it doesn’t exist. Keep in mind that we have never had a housing market like this. The Great Depression had a major housing downturn but mortgages were nothing like they are today. At least then, you knew who owned your mortgage. They didn’t have option ARM or toxic nuclear waste Alt-A loans. In fact, many of the prime loans are going bad because people also went HELOC crazy and yanked out equity actually believing their home was worth the inflated price. Let us look at a real case study of shadow inventory. I will use a bigger sample size here and look at Los Angeles:
A quick search of properties shows us some 6,901 homes up for sale. Seems like a small amount of inventory for a big area. But let us add the entire shadow inventory into the mix:
Well isn’t that something? We have 6,901 homes for sale yet we have:
Notice of Defaults: 6,583
Auction: 4,264
Real Estate Owned: 3,376
The shadow market is twice as big as the regular market! This for the biggest area in Southern California! And don’t feed me any of this hogwash that most of these mortgages will be modified. Loans that are modified are re-defaulting by 50, 60, and 70 percent and that is nationwide. Here in California you can imagine what that number will be. Also, many of the option ARMs and Alt-A products don’t even qualify for HAMP or any other loan modification because they are deep underwater. Want to try this exercise on another area? Let us look at Costa Mesa in Orange County for another example:
320 homes found. This is probably what your real estate agent is feeding you. But what is the shadow inventory figures?
Notice of Defaults: 227
Auction: 160
Real Estate Owned: 86
The shadow inventory is larger than the actual re-sale number. The reality is that most of these loans won’t cure. Sure, a handful will be modified. But the REO number won’t be modified, the bank already owns these properties. Those scheduled for auction are pretty much a lost cause with the owner. The notice of default data is linked to an audience that is 3 to 6 months behind and given the large mortgage payments in California, if you are this behind chances are you are not catching up. Keep in mind that this data is only for homes that have action being taken on. There is probably a shadow to the shadow inventory! That is, we have heard and know that many banks are not even sending notice of defaults to some late paying borrowers. In other words, there is a boatload of toxic debt out there.
2010 will usher in the recast era of the Alt-A and option ARM tsunami. We’ve talked about this for well over a year. Like subprime, there isn’t much that can be done about this. There are only two scenarios out:
1 – Home prices skyrocket, the employment situation improves, and people can sell out of their problems. Given the 12.2 percent unemployment rate and 23 percent unemployment/underemployment rate in the state, this scenario is highly unlikely. People forget that now that we are back to more conventional lending standards, the easy leverage of the bubble days has caused home buyers to have less pull in buying homes (aka, can’t use other people’s money as easy).
2 – Home prices stagnant, drop in mid to upper tier, and employment remains in the doldrums. This is actually happening. This is our path. Why do you think Realtors are pushing hard for the tax credit to be extended? Why do you think the Fed is still buying up agency debt like an addict? The 30 year fixed mortgage is hovering around 5 percent. The 40 year historical rate for a 30 year fixed mortgage is more like 9 percent. Are they planning on buying agency debt forever? Only if they can convince the world and hold the charade up long enough.
If you haven’t noticed, we have chosen the Japanese option. For Ben Bernanke being an expert on the Great Depression, he is no expert on Japan or doesn’t care we are going to repeat their mistakes. Let us count the ways we are like Japan:
1 – Massive banking bailout and failure to recognize losses. Banks keep walking around like zombies continually eating up resources from the living sectors of the economy.
2 – Real Estate bubble bursting and slow recognition of real losses. Can you say shadow inventory?
3 – Central bank zero bound problems. We didn’t invent quantitative easing!
4 – Massive government spending. Trillions in government injections in Japan and all they got was a 20 year sideways moving market. Stock markets still massively down after two long decades.
You might want to read about the Heisei Bubble for more details. Clearly we are different than Japan in many ways but the above repetition is unmistakable. After 21 months there should be little doubt why our economy is still in a mess. We’ve put the economy on financial Valium and we are trying to pretend that our deep seated problems will go away. We either confront the issues face on or gear up for at least a lost decade for our country. The shadow inventory will depress real estate values for years to come. There are still a few that want the government to buy up all the option ARM and Alt-A junk. You know why that hasn’t happened? Because even the crony Wall Street bankers can’t convince the bailout happy government that these loans are any good. But let us assume we do buy all those toxic loans. Then what? The government will need to sell and face the losses at some point. In the end, price discovery needs to occur. You can’t maintain these bubble prices. Yes, prices in many areas of California are still in a bubble. The dam is going to break one way or another. You can listen to the same dubious folks that missed the biggest collapse since the Great Depression or spend a few minutes looking at the data above and putting two and two together. The path ahead is not good for housing values.
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