"End of Wall Street Boom" - Must-read history

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Re: "End of Wall Street Boom" - Must-read history

Postby 82_28 » Thu Oct 14, 2010 11:48 am

seemslikeadream wrote:
freemason9 wrote:at what point does this become a crisis as predicted by marx



crisis? Amerikkans are in and playing catchup with the rest of humanity. It's only a crisis when someone you know gets hurt
Image





Isn't that quaint. What a telling picture. You had nothing, but still had the power to vote for the court's bailiff. (I'm assuming that's an "elect a bailiff" sign off to the right).
There is no me. There is no you. There is all. There is no you. There is no me. And that is all. A profound acceptance of an enormous pageantry. A haunting certainty that the unifying principle of this universe is love. -- Propagandhi
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Thu Oct 14, 2010 12:28 pm

freemason9 wrote:at what point does this become a crisis as predicted by marx



Gonzalo Lira [ http://gonzalolira.blogspot.com/2010/10 ... .html#more ]

The Second Leg Down of America’s Death Spiral

I swear to God Almighty: Mortgage Backed Securities are America’s Herpes—the gift that keeps on oozing.

Last Friday, Bank of America announced that it was suspending all foreclosure proceedings, presumably until further notice. Other banks have already suspended foreclosures in a whole truckload of states. A nationwide moratorium on foreclosures might soon happen—which would be a big deal: Global Financial Crisis, Part II—Longer, Wider and Uncut.



But the mainstream media—surprise-surprise—has downplayed the whole shebang. They’re throwing terms out there into the ether, but devoid of context or explanation: “Robo-signings”, “foreclosure mills”, forged signatures, “double booking”, MERS—it’s confusing as all get-out.

So the mainstream media just mentions it casually—“and in other news tonight . . .”—like it’s no big deal: A couple-three lines, lots of complicated, unfamiliar terms, an attitude like it’s a brouhaha over paperwork of all things!—and then zappo-presto-change-o!: They’re showing video footage of a cute koala nursing in the arms of a San Diego zookeeper.

But even the koalas know that something awful is heading America’s way. Smart little critters, they’re heading for the treetops, to get away from this mess.

So what the hell is going on with the God forsaken mortgage mess in the United States?

It’s got a lot of bells and whistles, but it’s basically quite simple: It’s all about the fucking Mortgage Backed Securities (MBS). Again.

So this is what happened, more or less—the short version:

In the crazed frenzy to get as many mortgages securitized during the Oughts, banks took shortcuts with the paperwork necessary for the Mortgage Backed Securities. The reason was because everyone in the chain of this securitization mania got a little piece of the action—a little slice of the MBS pie in the shape of commissions.

So in the name of “improved efficiencies” (and how many horror stories are we finding out, carried out in the name of “improved efficiencies”), banks digitized the mortgage notes—they didn’t physically endorse them, like they were supposed to by the various state and Federal laws.

Plus—once the wave of foreclosures broke, and the holes in this bureaucratic paperwork became evident and relevant—some of the big law firms handling the foreclosures for the banks started doing some document fabrication and signature forgery, in order to cover up the mistakes—which is definitely illegal.

Long story short (since this is the short version): A lot of the foreclosed properties might not have been foreclosed legally. The people evicted might still have a right to their old houses. The new buyers might not actually own the REO’s they bought off the banks. The banks could be on the hook for trillions of dollars, and in the sights of literally millions of lawsuits.

In short: This could become another massive oozing sore, complete with yellow-green pus drip-drip-dripping out of some unmentionable places on the Body Economic.

Now—the long version:

Homeowners can only be foreclosed and evicted from their homes by the person or institution who actually has the loan paper—only the note-holder has legal standing to ask a court to foreclose and evict. Not the mortgage—the note, which is the actual IOU that people sign, promising to pay back the mortgage loan.

Before Mortgage Backed Securities, most mortgage loans were issued by the local Savings & Loan. So the note usually didn’t go anywhere: It stayed in the offices of the S&L down the street.

But once mortgage loan securitization happened, things got sloppy—they got sloppy by the very nature of Mortgage Backed Securities.

The whole purpose of MBS’s was for different investors to have their different risk appetites satiated with different bonds. Some bond customers wanted super-safe bonds with low returns, some others wanted riskier bonds with therefore higher rates of return.

Therefore, as everyone knows, the loans were “bundled” into REMIC’s (Real-Estate Mortgage Investment Conduits, a special vehicle designed to hold the loans for tax purposes), and then “sliced & diced”—split up and put into tranches, according to their likelihood of default, their interest rates, and other characteristics.

This slicing and dicing created “senior tranches”, where the loans would likely be paid in full, if past history of mortgage loan statistics was to be believed. And it also created “junior tranches”, where the loans might well default, again according to past history and statistics. (A whole range of tranches were created, of course, but for purposes of this discussion, we can ignore all those countless other variations.)

These various tranches were sold to different investors, according to their risk appetite. That’s why some of the MBS bonds were rated as safe as Treasury bonds, and others were rated by the ratings agencies as risky as junk bonds.

But here’s the key issue: When an MBS was first created, all the mortgages were pristine—none had defaulted yet, because they were all brand new loans. Statistically, some would default and some others would be paid back in full—but which ones specifically would default? No one knew, of course. If I toss a coin 1,000 times, statistically, 500 tosses the coin will land heads—but what will the result be of, say, the 723rd toss specifically? I dunno.

Same with mortgages.

So in fact, it wasn’t that the riskier loans were in junior tranches and the safer mortgage loans were in the senior tranches: Rather, all the loans were in all the tranches, and if and when a mortgage in a given bundle of mortgages defaulted, the junior tranche holders would take the losses first, and the senior tranche holder take the loss last.

But who was the owner of the junior tranche bond and the senior tranche bond? Two different people. Therefore, the mortgage note was not actually signed over to the bond holder. In fact, it couldn’t be signed over. Because, again, since no one knew which mortgage would default first, it was impossible to assign a specific mortgage to a specific bond.

Therefore, how to make sure the safe mortgage loan stayed with the safe MBS tranche, and the risky and/or defaulting mortgage went to the riskier MBS tranche?

Enter stage right, the famed MERS—the Mortgage Electronic Registration System.

MERS was the repository of these digitized mortgage notes that the banks originated from the actual mortgage loans signed by homebuyers. MERS was jointly owned by Fannie Mae and Freddie Mac (yes, those two, again, I know, I know: Like the chlamydia and the gonorrhea of the financial world—you cure ‘em, but they just keep coming back).

The purpose of MERS was to help in the securitization process. Basically, MERS directed defaulting mortgages to the appropriate tranches of mortgage bonds. MERS was essentially the operating table where the digitized mortgage notes were sliced and diced and rearranged so as to create the Mortgage Backed Securities. Think of MERS as Dr. Frankenstein’s operating table, where the beast got put together.

However, legally—and this is the important part—MERS didn’t hold any mortgage note: The true owner of the mortgage notes should have been the REMIC’s.

But the REMIC’s didn’t own the note either, because of a fluke of the ratings agencies: The REMIC’s had to be “bankruptcy remote”, in order to get the precious ratings needed to peddle Mortgage Backed Securities to insitutional investors.

So somewhere between the REMIC’s and the MERS, the chain of title was broken.

Now, what does “broken chain of title” mean? Simple: When a homebuyer signs a mortgage, the key document is the note. As I said before, it’s the actual IOU. In order for the mortgage note to be sold or transferred to someone else (and therefore turned into a Mortgage Backed Security), this document has to be physically endorsed to the next person. All of these signatures on the note are called the “chain of title”.

You can endorse the note as many times as you please—but you have to have a clear chain of title right on the actual note: I sold the note to Moe, who sold it to Larry, who sold it to Curly, and all our notarized signatures are actually, physically on the note, one after the other.

If for whatever reason, any of these signatures is skipped, then the chain of title is said to be broken. Therefore, legally, the mortgage note is no longer valid. That is, the person who took out the mortgage loan to pay for the house no longer owes the loan, because he no longer knows whom to pay.

To repeat: If the chain of title of the note is broken, then the borrower no longer owes any money on the loan.

Read that last sentence again, please. Don’t worry, I’ll wait.

You read it again? Good: Now you see the can of worms that’s opening up.

The broken chain of title wouldn’t have been an issue if there hadn’t been an unusual number of foreclosures. Before the housing bubble collapse, the people who defaulted on their mortgages wouldn’t have bothered to check to see that the paperwork was in order.

But as everyone knows, following the housing collapse of 2007–‘10-and-counting, there’s been a boatload of foreclosures—and foreclosures on a lot of people who weren’t sloppy bums who skipped out on their mortgage payments, but smart and cautious people who got squeezed by circumstances.

These people started contesting their foreclosures and evictions, and so started looking into the chain of title issue . . . and that’s when the paperwork became important. So the chain of title became important. So the botched paperwork became a non-trivial issue.

Now, the banks had hired “foreclosure mills”—law firms that specialized in foreclosures—in order to handle the massive volume of foreclosures and evictions that occurred because of the Housing Crisis. The foreclosure mills, as one would expect, were the first to spot the broken chain of titles.

Well, hell, whaddaya know—turns out that these foreclosure mills might have faked and falsified documentation, so as to fraudulently repair the chain-of-title issue, thereby “proving” that the banks had judicial standing to foreclose on a delinquent mortgage. These foreclosure mills might have even forged the loan note itself—

—wait, why am I hedging? The foreclosure mills actually, deliberately and categorically faked and falsified documents, in order to expedite these foreclosures and evictions. Yves Smith at naked capitalism, who has been all over this story, put up a price list for this “service” from a company called DocX—yes, a price list for forged documents. Talk about your one-stop shopping!

So in other words, a massive fraud was carried out, with the inevitable innocent bystander getting caught up in this fraud: The guy who got foreclosed and evicted from his home in Florida, even though he didn’t actually have a mortgage, and in fact owned his house free-and-clear. The family that was foreclosed and evicted, even though they had a perfect mortgage payment record. Et cetera, depressing et cetera.

Now, the reason this all came to light is not because enough people were getting screwed that the banks or the government or someone with power saw what was going on, and decided to put a stop to it—that would have been nice, to see a shining knight in armor, riding on a white horse.

But that’s not how America works nowadays.

No, alarm bells started going off when the title insurance companies started to refuse to insure the title.

In every sale, a title insurance company insures that the title is free-and-clear: That the prospective buyer is in fact buying a properly vetted house, with its title issues all in order. Title insurance companies stopped providing their service because—of course—they didn’t want to expose themselves to the risk that the chain-of-title had been broken, and that the bank had illegally foreclosed on the previous owner.

That’s when things started gettin’ innerestin’: That’s when the Attorneys General of various states started snooping around and making noises (elections are coming up, after all).

The fact that Ally Financial (formerly GMAC), JP Morgan Chase, and now Bank of America have suspended foreclosures signals that this is a serious problem—obviously. Banks that size, with that much exposure to foreclosed properties, don’t suspend foreclosures just because they’re good corporate citizens who want to do the right thing, with all the paperwork in strict order—they’re halting their foreclosures for a reason.

The move by the United States Congress last week, to sneak by the Interstate Recognition of Notarizations Act? That was all the banking lobby—they wanted to shove down that law, so that their foreclosure mills’ forged and fraudulent documents would not be scrutinized by out-of-state judges. (The spineless cowards in the Senate carried out their Master’s will by a voice vote—so that there’d be no registry of who had voted for it, and therefore no accountability, the corrupt pricks.)

And President Obama’s pocket veto of the measure? He had to veto it—if he’d signed it, there would have been political hell to pay, plus it would have been challenged almost immediately, and likely overturned as un-Constitutional in short order. (The jug-eared milquetoast didn’t even have the gumption to veto it—he pocket vetoed it.)

As soon as the White House announced the pocket veto—the very next day!—Bank of America halted all foreclosures, nationwide.

Why do you think that happened? Because the banks are screwed—again. By the same fucking thing as the last time—the fucking Mortgage Backed Securities!

The reason the banks are fucked again is, if they’ve been foreclosing on people they didn’t have the legal right to foreclose on, then those people have the right to get their houses back. And the people who bought those foreclosed houses from the bank might not actually own the houses they paid for.

And it won’t matter if a particular case—or even most cases—were on the up-and-up: It won’t matter if most of the foreclosures and evictions were truly because the homeowner failed to pay his mortgage. The fraud committed by the foreclosure mills casts enough doubt that now, all foreclosures come into question. Not only that, all mortgages come into question.

People still haven’t figured out what this all means—but I’ll tell you: If enough mortgage-paying homeowners realize that they may be able to get out of their mortgage loan and keep their house, scott-free? Shit, that’s basically a license to halt payments right the fuck now. That’s basically a license to tell the banks to fuck off.

What are the banks gonna do—try to foreclose and then evict you? Show me the paper, motherfucker, will be all you need to say.

This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?

If this isn’t handled right, then this will be the second leg down, in the American Death Spiral.

Oh dear Lord, he said, calm yet despondent. Look at it, he said. I mean just look at it! Have you ever seen anything like it?!?
No, said the koala—truthfully. And you know, uh . . . it’s . . . It’s pretty disgusting, actually. So would you mind putting that thing away?
««« • »»»

Note: Next post, I’ll discuss a possible—I emphasize, a possible—silver bullet that will fix this whole Mortgage Mess—but it’ll have to be done soon, and have to be carried out fast, and sold under the guise that it’s this great new program that everybody—and I mean everybody—will simply just love to be a part of!—

—Streamlined Refinance.

*

from comments:

Anonymous said...
You detailed the problem very eloquently, well done. I, for one, did not realize the magnitude of the issue at hand before this.

According to the SIFMA (http://www.sifma.org/uploadedFiles/Rese ... anding.pdf), there are about $8.9 trillion in total U.S. mortgage-related securities outstanding.

$8.9 trillion.

All the major U.S. banks are effectively bankrupt (if the transfer of title is broken in all of the MBS securities) provided that the laws on the books are held up, as they should be.

The Fed could print that amount up, but that would be the end of the dollar as a usable currency.

Anonymous said...
There's a bigger problem. The banks are realizing losses on the foreclosures. There have been a lot of them, and so a lot of loss realized. And more down the line with each foreclosure they do now.

So they stopped.

That's why Bank of America called a halt. They are not worried about chain of title; they are bleeding money and have to stop before anyone notices.

That's why you have this incredible, and I mean incredible anomaly. Bank of America stops foreclosing on Americans, and the president sends his minions out to the Sunday talk shows to express disapproval and the hope that foreclosures can get back on track. See Sunday's Face the Nation.

It's bizarre but true. The country's leading politician encouraging the banks to foreclose on voters' homes. Never seen anything like it. The world has never seen anything like it.

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freemason9 wrote:at what point does this become a crisis as predicted by marx


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Re: "End of Wall Street Boom" - Must-read history

Postby JackRiddler » Thu Oct 14, 2010 1:29 pm

.

A correction in the above: Obama did subsequently perform a proper (not just pocket) veto of the notary bill.

I have to read up on this latest revealed booby-trap of the perpetual housing debt crisis, but I'm thinking whatever the total of endangered debt is, it must be exceeded by a multiple in as-yet uncalled side-bet derivatives. This is going to push toward a choice between widespread and incontrovertibly undeniable suspension of rule of law and court power in all 50 states, or liquidation and break-up of the zombie banks (which does not yet entail the end of capitalism, although it will be fought against as though it were Bigger Than Armaggedon). Because I doubt this time the Fed can credibly magically conjure another X trillion to cover the banks without setting off a central bankers' revolt abroad. Read back into this thread and you'll find plenty of talk of a post-election crash.

The crisis "as predicted by Marx" of declining profit rates in the long run arrived to the West in the 1970s, and the ruling class system responded with a new class war, financialization, neoliberal policies worldwide, new forms of imperial war and the political turn to the anti-liberal right. The process has gone through several phases since, in ways that would have been very hard for Marx to foresee, but with the bottom line that the rich are ever richer and ever fewer and all others are being pushed into prole precarity - also as "predicted by Marx."
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Re: "End of Wall Street Boom" - Must-read history

Postby Peachtree Pam » Thu Oct 14, 2010 2:23 pm

http://georgewashington2.blogspot.com/

Wednesday, October 13, 2010


What Is MERS and What Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60% of All Mortgages, But Has ZERO Employees)

This is a very in-depth account of the situation described in Vanlose kid's great post. As Nordic has said he puts many links in ihis blog and you should read EVERY ONE but it is very long to copy. It includes the depositions of the robo-signers etc and much, much more.

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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Thu Oct 14, 2010 2:29 pm

CNBC oct 4, 2010


"... 22% [home sales] in august were foreclosures, with investors making up 21% of all buyers..."


CNBC oct 13, 2010.


"... the far more serious problem is whether the banks own these titles ... there are law suits not only coming from home owners but from very deep-pocketed investors who fell like they bought these mortgage backed securities and now the title to these mortgages, it's unclear who owns them..."

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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Thu Oct 14, 2010 2:37 pm

Peachtree Pam wrote:http://georgewashington2.blogspot.com/

Wednesday, October 13, 2010


What Is MERS and What Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60% of All Mortgages, But Has ZERO Employees)

This is a very in-depth account of the situation described in Vanlose kid's great post. As Nordic has said he puts many links in ihis blog and you should read EVERY ONE but it is very long to copy. It includes the depositions of the robo-signers etc and much, much more.

Peachtree


just followed the link and it's true, it's long, lots of links etc. but i just had to quote some of it here:

You've heard the name Mortgage Electronic Registration Systems or "MERS" mentioned in relation to the foreclosure problems in the residential real estate market.

But what is MERS?

It is the company created and owned by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.

MERS is a shell corporation with no employees, but thousands of officers.

As the treasurer and secretary of MERS admitted in a deposition:


Q Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.

***

A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.

***

How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
[Objection]
A There are no employees of MERS.


(page 70, line 1 through page 72, line 8)

In another deposition, a legal assistant at a law firm initiating 4000 to 7000 foreclosures per month in Florida held herself out as "vice president" and "assistant secretary" of MERS. She testified:

Q: The question was you have no job duties as an assistant secretary of MERS, correct?
A: I do not have any job duties other than signing the assignments and mortgage. Does that help?
Q: Yes. Here, I’ll try to rephrase this. Do you attend any board meetings at MERS?
A: No, sir.
Q: Do you attend any meetings at all at MERS?
A: No, sir.
Q: Do you report to the secretary of MERS?
A: No, sir.
Q: Who is the secretary of MERS?
A: I have no idea.

***

Q: Where are the MERS offices located?
A: I can’t remember.
Q: How many offices do they have?
A: I have no idea.
Q: Do you know where their headquarters are?
A: Nope.
Q: Have you ever been there?
A: No.
Q: How many employees do they have?
A: I have no idea.
(pages 11 & 12)

She further testified that her signatures on “these assignments,” which from all indications were and are at least several thousand in number, were in no way attestations that the statements contained therein were accurate or truthful. She further testified that she was the person with the most knowledge about the subject assignment.
For example, she testified:

Q: It says, ‘but effective as of the 19th day of February, 2008.” Do you see that?
A: Yes.
Q: Where did you get that date from?
A: I did not pick that date. That date was put in by the processor that prepared the
assignment.
Q: And who was that?
A: Off the top-of-my-head, I do not know who actually typed this assignment.
Q: Okay. But you are signing on behalf of MERS, and you are stating here that it is effective as of the 19th day of February, 2008, correct?
A: Correct.
Q: At the time you signed this, what reason did you have, as agent for MERS, to make it
effective as of the 19th day of February, 2008?
A: I did not pick that date. And I do not recall this document.
Q: Sitting here today, you have no idea why it is that it says, “effective as of the 19th day of February, 2008.” Is that correct?
A: Looking at this one particular piece of paper, I do not recall or know the answer to that question, no.
Q: Is there some general practice, of which you are aware, that would give us information as to why this particular date was inserted?
A: That information was determined by the people that review the file prior to me.
Q: And what would they base that on, as a general practice?
A: I do not know.
Q: You don’t know? Were, to your knowledge, any physical documents transferred on February 19, 2008?
A: I do not know.
Q: To your knowledge, does the 19th day of February, 2008 have any significance?
A: I do not know.
Q: Ma’am, if you signed this document on behalf of MERS, picking this date, this effective
date - -
A: I did not pick the effective date.
Q: But you ratified it by signing this; didn’t you?
[objection]
Q: Didn’t you attest to the accuracy of that date by signing this document?
[objection]
A: I would say, no.
Q: Did you attest to this document, as a whole, by signing it?
[objection]
A: I do not think that in my capacity of signing these assignments, it was my position to attest. My role was to be given a document that had been reviewed by an attorney, had been reviewed by a title examiner, had instructions from the client, and I was to sign the assignment as secretary on behalf of MERS.
Q: Right. And when you signed it as secretary on behalf of MERS, were you approving and agreeing with the terms contained therein for MERS?
A: I believe I was approving and agreeing to the fact that the mortgage needed to be assigned from MERS to another entity.
(pages 13 and 14)
In other words, assignments of title were never actually created, notarized and recorded, as required by state law. The "vice president" and "assistant secretary" MERS signing sworn statements under penalty perjury was simply making it up and doing what she was told.

In that light, Yves Smith's report that "no one in the industry transferred the paper" makes perfect sense.

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Re: "End of Wall Street Boom" - Must-read history

Postby freemason9 » Thu Oct 14, 2010 9:02 pm

JackRiddler wrote:.

A correction in the above: Obama did subsequently perform a proper (not just pocket) veto of the notary bill.

I have to read up on this latest revealed booby-trap of the perpetual housing debt crisis, but I'm thinking whatever the total of endangered debt is, it must be exceeded by a multiple in as-yet uncalled side-bet derivatives. This is going to push toward a choice between widespread and incontrovertibly undeniable suspension of rule of law and court power in all 50 states, or liquidation and break-up of the zombie banks (which does not yet entail the end of capitalism, although it will be fought against as though it were Bigger Than Armaggedon). Because I doubt this time the Fed can credibly magically conjure another X trillion to cover the banks without setting off a central bankers' revolt abroad. Read back into this thread and you'll find plenty of talk of a post-election crash.

The crisis "as predicted by Marx" of declining profit rates in the long run arrived to the West in the 1970s, and the ruling class system responded with a new class war, financialization, neoliberal policies worldwide, new forms of imperial war and the political turn to the anti-liberal right. The process has gone through several phases since, in ways that would have been very hard for Marx to foresee, but with the bottom line that the rich are ever richer and ever fewer and all others are being pushed into prole precarity - also as "predicted by Marx."


so you acknowledge jr that this could be the big one, the one american capitalism has been spiraling down for the last four decades. money is paper as it turns out, and it has little value if it can't be put to use anymore, why produce goods that will never, ever sell?
The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new.
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Re: "End of Wall Street Boom" - Must-read history

Postby Peachtree Pam » Fri Oct 15, 2010 1:27 am

http://www.washingtonsblog.com/2010/10/ ... ns-of.html

More on the unfolding methods used to construct the scam. Please go to the link to see the many examples of forged signatures of "Linda Green".

October 14, 2010
Same Person Forged Billions of Dollars Worth of Mortgage Documents for Bank of America, Wells Fargo, U.S. Bank and Dozens of Other Lenders and Shells


The Washington Post notes:

In Georgia, an employee of a document processing company, Linda Green, for years claimed to be executives of Bank of America , Wells Fargo, U.S. Bank and dozens of other lenders while signing off on tens of thousands of foreclosure affidavits. In many cases, her signature appeared to be forged by different employees.

Green worked for a foreclosure document company owned by Lender Processing Services. The company is being investigated by a U.S. attorney in Florida for allegedly using improper documentation to speed foreclosures.

Lenders have already started to withdraw foreclosures that had Green's name on them.

Green also submitted to courts documents that listed "Bogus Assignee" as the owner of a mortgage instead of the real name. In another case, she signed as the vice president of "Bad Bene," a made-up company.

***

"There are procedures to be followed in order to get a foreclosure, and you either get it right or not. Either you're pregnant or not. There's no in-between," [Arthur M. Schack, a Kings County Supreme Court judge in Brooklyn,] said

Foreclosure attorney Lynn Szymoniak located numerous signatures of "Linda Green" from pleadings filed in various courts.

StopForeclosureFraud.com has rounded up some examples of "Linda Green's" signatures in one image:


In February 2010, 4ClosureFraud.org posted one of Green's signatures on an assignment of title to "Bogus Assignee":


(And here are numerous other assignments to "Bogus Assignee" signed by Green, start with the fourth document down.)

Szymoniak pointed out in July:

There are examples of the many different Linda Green signatures/forgeries. Green’s “signature” appears on HUNDREDS OF THOUSANDS of mortgage assignments – as an officer of at least 20 different banks and mortgage companies.

Doing the Math

The total mortgage loan amount on 500 “Linda Green” Mortgage Assignments is $126,956,912, or approximately $125 million for each 500 Assignments. The average output of Assignments from the Docx office in Alpharetta [Green's actual employer], Georgia in 2009 was 2,000 Assignments per day.

This would be equivalent to (4 x $125 million) or $500 million each day. Assuming that Docx operated 5 days a week for 51 weeks (allowing for holidays), the office was open, producing Assignments, 255 days. It is likely that the Linda Green/Docx crew prepared and filed Mortgage Assignments showing One Hundred Twenty-Seven Billion, Five Hundred Million ($127,500,000,000) in mortgages were Assigned in 2009.

Remember also that Mortgage Electronic Registration Systems - which Green repeatedly signed for - is itself a shell company which holds 60% of all American residential mortgages.

DocX is also the company which published price lists for forging documents, including such gems as:

"Create Missing Intervening Assignment" $35

"Cure Defective Assignment" $12.95

"Recreate Entire Collateral File" $95

Given the above, it is clear why the Florida Attorney General has issued a subpoena to Linda Green's real employer - DocX - requesting the following documents:

2. Copies of any and all underlying documentation that allows for your employee or ex-employee, Linda Green to sign documents in the following capacities:

a. Vice President of Loan Documentation, Wells Fargo Bank, N.A. successor by merger to Wells Fargo Home Mortgage, Inc.;

b. Vice President, Mortgage Electronic Registration Systems, Inc. as nominee for American Home Mortgage Acceptance, Inc.;

c. Vice President, American Home Mortgage Servicing as successor-in-interest to Option One Mortgage Corporation;

d. Vice President, Mortgage Electronic Registration Systems, Inc. as nominee for American Brokers Conduit;

e. Vice President & Asst. Secretary, American Home Mortgage Servicing, Inc., as servicer for Ameriquest Mortgage Corporation;

f. Vice President, Option One Mortgage Corporation;

g. Vice President, Mortgage Electronic Registration Systems, Inc. as nominee for HLB Mortgage;

h. Vice President, American Home Mortgage Servicing, Inc.;

1. Vice President, Mortgage Electronic Registration Systems, Inc. as nominee for Family Lending Services, Inc.;

J. Vice President, American Home Mortgage Servicing, Inc. as Successor -ininterest to Option One Mortgage Corporation;

k. Vice President, Argent Mortgage Company, LLC by Citi Residential Lending, Inc., attorney-in-fact;

1. . Vice President, Sand Canyon Corporation f/kJal Option One Mortgage Corporation;

m. Vice President, Amtrust Funsing (sic) Services, Inc., by American Home Mortgage Servicing, Inc., as Attorney-in -fact;

n. Vice President, Seattle Mortgage Company.

3. Copies of every document signed in any capacity by Linda Green.

Subpoena DT to Docx L.L.C

Of course, its not just Linda Green.

As Szymoniak points out:

The offices of Lender Processing Services in Mendota Heights, Minnesota, seems likely to also have produced 2,000 Assignments each working day.

Jeffrey Stephan from the GMAC offices in Montgomery County, Pennsylvania also is likely to have produced 2,000 Assignments each day.

Bryan Bly of Nationwide Title Clearing also is likely to have produced 2,000 Mortgage Assignments each day.

Scott Anderson of Ocwen Loan Servicing in West Palm Beach, Florida, almost certainly produced an average of 2,000 Assignments a day.

Herman John Kennerty of America’s Servicing Company in Ft. Mill, South Carolina, also is likely to have produced 2,000 Assignments each day.

Erica Johnson-Seck was almost certainly producing Assignments at this same level for IndyMac.

Christina Trowbridge, Whitney Cook, and Stacy Spohn of Chase Home Finance in Franklin, Ohio likely had the same output.

Keri Selman and Renee Hertzler of BAC Home Loan Servicing (formerly Countrywide) in Texas almost certainly produced an average of 2,000 Assignments a day.

If these nine offices each produced 2,000 Assignments a day, the value of the Mortgage Assignments filed by all nine offices in 2009 was One Trillion, One Hundred Forty Seven Billion, Five Hundred Million ($1,147,500,000,000).
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Re: "End of Wall Street Boom" - Must-read history

Postby 82_28 » Fri Oct 15, 2010 2:39 am

Sometimes I wonder if this shit is so huge that it doesn't even become real anymore. As in, nothing noticeably happens at all -- the new reality download is still streaming strong -- there is no lack of memetic bandwidth. There clearly is an "endgame" which Alex Jones has conveniently hi-jacked the meaning of. There has always been a "New World Order", this is part of the order. It plays on because it is ancient. The Empire Never Ended. Bada bing. . .
There is no me. There is no you. There is all. There is no you. There is no me. And that is all. A profound acceptance of an enormous pageantry. A haunting certainty that the unifying principle of this universe is love. -- Propagandhi
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Re: "End of Wall Street Boom" - Must-read history

Postby Peachtree Pam » Fri Oct 15, 2010 4:42 am

Here is another stunning angle

that could contribute to homeowners keeping their homes - and making no payments. This is a comment posted on nakedcapitalism by a bankrupcy attorney. It would really be great if this entire scam backfires and the middle-class and the poor actually gain a house free of mortgage! It might even mean nationalization of the big banks.

http://www.nakedcapitalism.com/2010/10/ ... -club.html

Ricky Dee says:
October 14, 2010 at 4:06 am

An email sent to Gonzalo Lira and published in his site (gonzalolira.blogspot.com/2010/10/second-leg-down-of-americas-death.html):

“A bankruptcy attorney wrote me the following:

Love your blog and follow it regularly. I was unable to post a comment on your site, so I’m writing you directly. The point you made about a break in title is not entirely accurate. A break in title, generally, simply renders the title still properly in the name of the last proper transferee. The real issue with all of this is the use of MERS as a straw man beneficiary. MERS was created as the functional equivalent of a “John Doe” for purposes of registering the beneficial holder of notes with state property records. This would allow the banks, et al. to shift around the notes amongst the members of MERS without having to re-register the note everytime it was sliced, diced, transferred.

As set forth in landmark cases like Landmark v. Kesler from the Supreme Court of Kansas (http://en.wikipedia.org/wiki/Landmark_N ... _v._Kesler), it is the splitting or bifurcation of the promissory note or mortgage note and mortgage or deed of trust creates an immediate and fatal flaw in title. Thus, your point and prediction are well taken – the powder keg is the potential reclassification of secured (mortgage) debt on one’s home to general unsecured debt, which can be wiped out through bankruptcy.

Thus, a real risk is that if people can show their home loans are unsecured, you could see massive personal bankruptcy filings to wipe out that debt.

If you’re interested, you should check out the line of bankruptcy court cases that are adopting this reasoning.

I’m a commercial bankruptcy attorney in NYC, so I follow this topic with great interest. I look forward to reading more of your thoughts on it in future posts. “
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Fri Oct 15, 2010 5:07 pm

JackRiddler wrote:.

A correction in the above: Obama did subsequently perform a proper (not just pocket) veto of the notary bill.

I have to read up on this latest revealed booby-trap of the perpetual housing debt crisis, but I'm thinking whatever the total of endangered debt is, it must be exceeded by a multiple in as-yet uncalled side-bet derivatives. This is going to push toward a choice between widespread and incontrovertibly undeniable suspension of rule of law and court power in all 50 states, or liquidation and break-up of the zombie banks (which does not yet entail the end of capitalism, although it will be fought against as though it were Bigger Than Armaggedon). Because I doubt this time the Fed can credibly magically conjure another X trillion to cover the banks without setting off a central bankers' revolt abroad. Read back into this thread and you'll find plenty of talk of a post-election crash.

The crisis "as predicted by Marx" of declining profit rates in the long run arrived to the West in the 1970s, and the ruling class system responded with a new class war, financialization, neoliberal policies worldwide, new forms of imperial war and the political turn to the anti-liberal right. The process has gone through several phases since, in ways that would have been very hard for Marx to foresee, but with the bottom line that the rich are ever richer and ever fewer and all others are being pushed into prole precarity - also as "predicted by Marx."


Hey, JR. seems you misunderestimate the FED.

FRIDAY, OCTOBER 15, 2010

Bernanke: I'm Going Nuclear
Wow!

Federal Reserve Chairman Ben Bernanke, at his speech this morning before the Boston Federal Reserve, made it extremely clear that the Fed is about to embark on a major money printing scheme. His justification is the current high unemployment:

Although output growth should be somewhat stronger in 2011 than it has been recently, growth next year seems unlikely to be much above its longer-term trend. If so, then net job creation may not exceed by much the increase in the size of the labor force, implying that the unemployment rate will decline only slowly. That prospect is of central concern to economic policymakers, because high rates of unemployment--especially longer-term unemployment--impose a very heavy burden on the unemployed and their families. More broadly, prolonged high unemployment would pose a risk to consumer spending and hence to the sustainability of the recovery...
...we see little evidence that the reallocation of workers across industries and regions is particularly pronounced relative to other periods of recession, suggesting that the pace of structural change is not greater than normal. Moreover, previous post-World-War-II recessions do not seem to have resulted in higher structural unemployment, which many economists attribute to the relative flexibility of the U.S. labor market. Overall, my assessment is that the bulk of the increase in unemployment since the recession began is attributable to the sharp contraction in economic activity that occurred in the wake of the financial crisis and the continuing shortfall of aggregate demand since then, rather than to structural factors


Bernanke showed no concern for the inflationary consequences of Fed money printing. Indeed, he chose to completely ignore the current soaring commodity prices and falling dollar. He took the stance that a little inflation is a good thing:

Let me turn now to the outlook for inflation. Generally speaking, measures of underlying inflation have been trending downward. For example, so-called core PCE price inflation (which is based on the broad-based price index for personal consumption expenditures and excludes the volatile food and energy components of the overall index) has declined from approximately 2.5 percent at an annual rate in the early stages of the recession to an annual rate of about 1.1 percent over the first eight months of this year. The overall PCE price inflation rate, which includes food and energy prices, has been highly volatile in the past few years, in large part because of sharp fluctuations in oil prices. However, so far this year the overall inflation rate has been about the same as the core inflation rate...the FOMC has found it useful to frame our dual mandate in terms of the longer-run sustainable rate of unemployment and the mandate-consistent inflation rate.... the mandate-consistent inflation rate--the inflation rate that best promotes our dual objectives in the long run--is not necessarily zero; indeed, Committee participants have generally judged that a modestly positive inflation rate over the longer run is most consistent with the dual mandate.

This is the most stunning speech that I am aware of that a central banker has ever given.

He is blaming the current high employment rate almost entirely on the Keynesian notion of a lack of aggregate demand. Which, by the way, ignores the conclusion of the recent Nobel winners, who in a convoluted manner, reached the obvious conclusion that the more you pay people not to work, the longer they don't work. Further, he ignores completely the Robert Higgs observation that regime uncertainty plays a role in high unemployment, i.e., firms don't hire when they don't understand the regulatory and tax structure ahead.

On the inflation front, he is ignoring the best indication of inflation, real prices. He is ignoring record high prices for gold, corn. cotton. etc.. etc. Instead, he is looking at questionable indexes assembled by employees of the regime.

It is, of course, important to monitor how much actual printing is going to be done, but all indications are that Bernanke is going all in. He is going nuclear.

The longest-serving chairman of the Federal Reserve Board, William McChesney Martin, famously said that the function of the Fed is to “take away the punch bowl” when the party gets too exuberant. Bernanke is doing the opposite, he is calling ahead to the party and announcing his car is loaded up with gin, vodka, whiskey and tequila. This in itself is bizarre, since by so loudly broadcasting QE2 in advance, he is building in huge anticipation of QE2. To keep the momentum of this mad program, he will have to print more than the expectations that he has built to high heaven, otherwise QE2 will crash out of the gate. Given Bernanke's speech today, it is clear that Bernanke is fully ready to exceed expectations.

What does all this mean, if Bernanke does indeed follow through on his money printing scheme? A very quick turn upward, in a manipulated way, for the economy. Inflation will explode at a rate far in excess of what most expect. Remember, we are for the most part in a period where the desire to hold cash balances is still very high. This will reverse itself at the same time as Bernanke's money printing. Bernanke wants an increase in "aggregate demand", he is going to get it in the form of huge inflation.

Borrowers should lock in long term rates now. Although, Bernanke may start buying long term bonds, and temporarily push down rates, eventually inflation concerns will overtake Bernanke's bond buying.

We are truly headed into uncharted territory. If Bernanke follows through on the statements in his speech today, I fully expect inflation in the United States greater than what was experienced in the 1970's. It will be devastating to any one on a fixed income and it will destroy savers. It will benefit debtors at all levels, including, not coincidentally, federal, state and local governments that are in hawk across the board.

I repeat: It appears we are heading into a period of major inflation. All assets (aside from bonds) will soar in price, especially gold and silver. The billionaire hedge fund manager David Tepper had it right when he said a few weeks ago, "Buy assets, any assets."

[ http://www.economicpolicyjournal.com/20 ... clear.html ]


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Re: "End of Wall Street Boom" - Must-read history

Postby Peachtree Pam » Thu Oct 21, 2010 4:39 am

More layers of the fraud explained by mortgage expert. This is from Washington's Blog.



http://georgewashington2.blogspot.com/

Wednesday, October 20, 2010

Foreclosure Expert Confirms Mortgages Pledged Multiple Times, Not Actually Securitized, Document Problem Is Really a System of "Push-Button Fraud"


Yesterday, I showed that mortgages were fraudulently pledged to multiple buyers at the same time.

Today, foreclosure expert Neil Garfield (former investment banker, trial lawyer and board member of several financial institutions) confirms this, explains that the loans were not actually securitized, and the whole "sloppy paperwork" excuse is really an attempt to explain away a system of push-button fraud:

The game was to move money under a scheme of deceit and fraud. First sell the bonds and collect the money into a pool. Second take your fees, third take what’s left and get it committed into “loans” (which were in actuality securities) sold to homeowners under the same false pretenses as the bonds were sold to investors. By controlling the flow of funds and documentation, the middlemen were able to sell, pledge and otherwise trade off the flow of receivables several times over — a necessary complexity not only for the profit it generated, but to make it far more difficult for anyone to track the footprints in the sand.

If the loans had actually been securitized, the issue would not arise. They were not securitized. This was a mass illusion or hallucination induced by Wall Street spiking the punch bowl. The gap (second tier yield spread premium) created between the amount of money funded by investors and the amount of money actually deployed into “loans” was so large that it could not be justified as fees. It was profit on sale from the aggregator to the “trust” (special purpose vehicle). It was undisclosed, deceitful and fraudulent.

Thus the “credit enhancement” scenario with tranches, credit default swaps and insurance had to be created so that it appeared that the gap was covered. But that could only work if the parties to those contracts claimed to have the loans. And since multiple parties were making the same claim in these side contracts and guarantees, counter-party agreements etc. the actual documents could not be allowed to appear nor even be created unless and until it was the end of the road in an evidential hearing in court. They used when necessary “copies” that were in fact fabricated (counterfeited) as needed to suit the occasion. You end up with lawyers arriving in court with the “original” note signed in blue (for the desired effect on the Judge) when it was signed in black — but the lawyer didn’t know that. The actual original is either destroyed (see Katherine Porter’s 2007 study) or “lost.” In this case “lost” doesn’t mean really lost. It means that if they really must come up with something they will call an original they will do so.

So the reason why the paperwork is all out of order is that there was no paperwork. There only entries on databases and spreadsheets. The loans were not in actuality assigned to any one particular trust or any one particular bond or any one particular individual or group of investors. They were “allocated” as receivables multiple times to multiple parties usually to an extent in excess of the nominal receivable itself. This is why the servicers keep paying on loans that are being declared in default. The essential component of every loan that was never revealed to either the lenders (investors) nor the borrowers (homeowner/investors) was the addition of co-obligors and terms that neither the investor nor the borrower knew anything about. The “insurance” and other enhancements were actually cover for the intermediaries who had no money at risk in the loans, but for the potential liability for defrauding the lenders and borrowers.

The result, as anyone can plainly see, is that the typical Ponzi outcome — heads I win, tails you lose.

***

So the paperwork was carefully created and crafted to cover the tracks of theft. Most of the securitization paperwork remains buried such that it takes search services to reach any of them. The documents that were needed to record title and encumbrances was finessed so that they could keep their options open when someone made demand for actual proof. The documents were not messed up and neither was the processing. They were just keeping their options open, so like the salad oil scandal, they could fill the tank that someone wanted to look into.
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Sat Oct 23, 2010 8:48 pm



Michael Hudson, Debt Jubilee interview (Max Kaiser).

"Wipe out mortgage debts."

"… We're seeing an oligarchy, and in fact a cleptocracy, emerge here."

"… [Obama] has brought back the same people who brought us the Russian crisis. And if you want to se what their plans are for the US look at what Obama's team did when they had a free hand in Russia in the 90's. They brought the biggest inequality and cleptocracy in modern times."

"… The financial sector, and the real-estate and insurance sector are not part of the real economy of production and consumption. The asset and wealth sector is different from the production sector. Think of the financial sector as being wrapped around the real economy. Almost like a parasite. And that's why it's been called parasitical for so long… Now the key thing about parasites is that it's not simply that they extract nourishment from the host – the parasite takes over the host's brain to make it thinks it's part of the economy".



edit: typos.
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Re: "End of Wall Street Boom" - Must-read history

Postby vanlose kid » Sat Oct 23, 2010 9:04 pm



Contrast and comparison. Mcalvany ICA presentation on the dying dollar, October 2007. Covering the dollar, euro, gold, war, MBS junk etc.

The new news is old news.

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Re: "End of Wall Street Boom" - Must-read history

Postby Peachtree Pam » Sun Oct 24, 2010 6:54 am

From Washington's blog:

http://georgewashington2.blogspot.com/

Saturday, October 23, 2010

Lawsuit Alleges that MERS Owes California a Potential $60 Billion to $120 Billion in Unpaid Land-Recording Fees


Former hedge fund manager Shah Gilani notes:

In creating MERS, these institutions actually changed the land-title system that this country - for much of its history - has relied upon to determine legal ownership status of land titleholders.

Not only did the lenders sidestep (read that to mean avoid) paying billions of dollars in fees to local governments, they paid themselves from the fees that MERS collected.

MERS is facing class-action lawsuits and civil racketeering suits around the country and their members are being individually named in all these suits. One suit alleges that MERS owes California a potential $60 billion to $120 billion in unpaid land-recording fees.

If suits against MERS and all its members are successful, unpaid recording fees and fines (that can be as much as $10,000 per incident) would make every one of them insolvent.

That potential liability is in addition to various other types of liability the big banks may face, including:

(1) Liability to investors in mortgage backed securities for misrepresenting the health of the underlying mortgages and the ability to foreclose on the properties

(2) Liability to Freddie and Fannie

(3) Liability for fraud and racketeering in forging documents

and

(4) Other types of liability.
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