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Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets"
In the following interview with the WaPo's Ezra Klein, Janet Tavakoli shares some more information on why every bank is about to shut down all foreclosures, in what she calls the "biggest fraud in the history of capital markets." Not very surprisingly, we are, so far, spot on in our 29th September projected timeline at this point: "We predict that within a week, all banks will halt every foreclosure currently in process. Within a month, all foreclosures executed within the past 2-3 years will be retried, and millions of existing home sales will be put in jeopardy."
Ezra Klein: What’s happening here? Why are we suddenly faced with a crisis that wasn’t apparent two weeks ago?
Janet Tavakoli: This is the biggest fraud in the history of the
capital markets. And it’s not something that happened last week. It
happened when these loans were originated, in some cases years ago.
Loans have representations and warranties that have to be met. In the
past, you had a certain period of time, 60 to 90 days, where you sort
through these loans and, if they’re bad, you kick them back. If the
documentation wasn’t correct, you’d kick it back. If you found the
incomes of the buyers had been overstated, or the houses had been
appraised at twice their worth, you’d kick it back. But that didn’t
happen here. And it turned out there were loan files that were missing
required documentation. Part of putting the deal together is that the
securitization professional, and in this case that’s banks like Goldman
Sachs and JP Morgan, has to watch for this stuff. It’s called perfecting
the security interest, and it’s not optional.
EK: And how much danger are the banks themselves in?
JT: When we had the financial crisis, the first thing the banks did
was run to Congress and ask for accounting relief. They asked to be able
to avoid pricing this stuff at the price where people would buy them.
So no one can tell you the size of the hole in these balance sheets.
We’ve thrown a lot of money at it. TARP was just the tip of the iceberg.
We’ve given them guarantees on debts, low-cost funding from the Fed.
But a lot of these mortgages just cannot be saved. Had we acknowledged
this problem in 2005, we could’ve cleaned it up for a few hundred
billion dollars. But we didn’t. Banks were lying and committing fraud,
and our regulators were covering them and so a bad problem has become a
hellacious one.
EK: My understanding is that this now pits the banks against
the investors they sold these products too. The investors are going to
court to argue that the products were flawed and the banks need to take
them back.
JT: Many investors now are waking up to the fact that they were
defrauded. Even sophisticated investors. If you did your due diligence
but material information was withheld, you can recover. It’ll be a
case-by-by-case basis.
EK: Given that our financial system is still fragile, isn’t that a disaster for the economy? Will credit freeze again?
JT: I disagree. In order to make the financial system healthy, we
need to recognize the extent of our losses and begin facing the fraud.
Then the market will be trustworthy again and people will start to
participate.
EK: It sounds almost like you’re saying we still need to go through the end of our financial crisis.
JT: Yes, but I wouldn’t say crisis. This can be done with a
resolution trust corporation, the way we cleaned up the S&Ls. The
system got back on its feet faster because we grappled with the
problems. The shareholders would be wiped out and the debt holders would
have to take a discount on their debt and they’d get a debt-for-equity
swap. Instead we poured TARP money into a pit and meanwhile the banks
are paying huge bonuses to some people who should be made accountable
for fraud. The financial crisis was a product of our irrational
reaction, which protected crony capitalism rather than capitalism. In
capitalism, the shareholders who took the risk would be wiped out and
the debt holders would take a discount but banking would go on.
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I love how in all these news stories and analysis of this foreclosure debacle, they never get around to tying it back to the enablers: Freddie, Fannie, & FHA via Barney "lets roll the dice" Frank and Chris "A cheap mortgage for me! you shouldn't have" Dodd. Seriously, they're trying to make Freddie and Fannie sound like the victim.
Oh, I and guess the use of "sub-prime" has gone out of fashion.
+1000
Barney Frank (Congressman) 2003: "I want to roll the dice a little bit more in this situation toward subsidized housing."
Barney Frank 2008: "I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under."
Maxine Waters (Congresswoman) 2003: "If it ain't broke, why do you want to fix it? Have the GSEs (Freddie and Fannie) ever missed their housing goals?"
Chris Dodd (Senator) 2004: "This [Government Sponsored Housing] is one of the great success stories of all time..."
Paul Krugman (Economist) 2002: "The basic point is that the recession of 2001
wasn't a typical postwar slump... To fight this recession the Fed needs more
than a snapback... Alan Greenspan needs to create a Housing bubble to replace
the Nasdaq bubble."
When Politicians tinker with the tax code to favor the sorts of investments
they think people should make (i.e., Housing), we should NOT be surprised
if market distortions result!
By their words and deeds shall ye know them!
As a practical matter, it won't happen like she predicts, although I have tremendous respect/admirations for her.
I suspect the following will occur:
1) The banks will be forced to retry mortages only where people "object" to the outcome or contest the process.
2) At these re-trials, whether they are judicial or administrative, the buyers will be warned that any fraud the buyers committed in the original application process can be reviewed and referred for legal action.
3) At these re-trials, the banks will be warned that if the judge/panel finds that the buyer could have qualified for a better loan, the bank will face legal charges for fraud.
This will speed everything up and reduce the paperwork. Of course, this assumes the fricking Titles can be found in the first damn place.............
I don't know, I'm stumped on this one. There is no 'easy' way to resolve this, regardless of which direction you want to run with it - crooked, fair, opaque, transparent, the size of the mess is daunting. And it won't take too many people getting publicly shafted hard to whip up trouble with the public.
It won't take many shafted people at all. Look at all the hay that has been made on that 911 call by the "terrified" woman in her bathroom. Many are now gathering data on every screwed over homeowner incident and it will be "On The News." The tide is turning, both in the MSM and the public consciousness.
There will be trouble. If mass foreclosures proceed, there will be many a self-styled "Waco" incident.
http://en.wikipedia.org/wiki/Waco_Siege
I'm not cheerleading it, just being realistic--I know a little about my fellow man.
We all know how many guns and how much ammo is now in circulation.
There's gonna be a lot of small aircraft heading for Govt buildings (in a city near you!)
RE: Buyers fraudulent statements...
If the mortgage/titles are lost in paper limbo,
why not also the original loan applications?
I'd bet that the entire paper trail has been scattered by the
big wind.
Exactly. While a significant number of "liar loans" were perpetrated by the customers, the agents usually knew they were lying and often, from what I've heard, did the lying for them. Even without the customer's knowledge. The fees were rich.
Those agents (many now out of business) surely didn't leave alot of evidence lying around.
I recall a mess where for 20-30 years, a company was offering a certain type of mortgage where the borrower would make payments to a middleman, who took out a mortgage that was a good bit more than the value of the home... the idea being, the borrower would get a break on their interest/payments while the middleman went and did something else with the extra funds. The middleman would keep making payments on the "real" mortgage for a few years after the borrower stopped paying him.
Unfortunately, the original business model was flawed and it took nearly 30 years to figure that out. The businessman tried to hide the problem, hoping to bull his way through it, but eventually failed, ran out of money, and stopped payments to the "real" lender. About 3 months later lot of people who thought they'd paid their home off, and in fact had paid off their obligation on paper to the middleman, suddenly found themselves being foreclosed on by the "real" lender. They never had any warning.
There was a huge local outcry, but if I recall correctly nothing was ultimately done to help the homeowners. Retirees on fixed incomes suddenly found themselves hit with 5 figure bills and then tossed into the street. The really foolish ones paid thousands of extra dollars in vain only to be foreclosed on anyways.
Gasp! You mean to imply that GREEDY BANKSTERS would NOT pay to warehouse the correct paperwork? The horror, the HORROR! </sarcasm>
You're looking at the wrong side of this. The bigger story is the buyers of the notes, which can claim the deals were never structured properly. If the borrowers committed fraud, this only strengthens the case against the originator/ sponsor/ trustee to show breach of contract. Therefore these investors have a claim for either compensation or to terminate and unwind the contracts. It's not the borrowers that matter, it's sophisticated investors who will be charging into this one.
I think the time has long passed for Resolution Trust Corps....we may need one but not the one as described....lawsuits are going to fly.......TARP made a gaping wound get incredibly infected - with an infection that is resistant to antibiotics...How is anyone going to trust this system again unless every CEO/Director is fired and wiped out and all new put in place with zero relation to the old?
Time to SHRED all those Corporate veils and put Responsibility, Accountability and Discipline back into the business world. Financial rape should be treated just like personal rape WRT penalties!
You can't "put back" what has never been there.
Captain Willard made a good point about application fraud; let us not forget the "innocent" peasants who purchased their palaces with a promise in their hearts and a few grains of wheat in their pockets.
The banks will take their haircuts at the expense of the taxpayer; and some homeowners will keep their discounted castles at the expense of same said taxpayer. This is a Win-Win situation for irresponsibility.
Normally, shorts would play a role here and put pressure on the Bank Stocks, like in 2008. However, with the Fed backstopping the market, no sane investor/speculator can take the risk of shorting what should be shorted. The shorts would be sending a signal to the marketplace that something is terribly wrong. This is a further rigging of the market in an attempt to build "confidence".
I hear ya! The Fed AND the Stock market(s) will reap the whirlwind for driving out the short-sellers!
I think the (pathetic, obvious) insider flight makes a good proxy for shorts.
If Ben can only take the indices higher, why would they leave (huge) money on the table?
Everyone get a life. This shit is a set up and a complete stage act. The US government / Fed are going to bail the banks on this - count on it. This is all foreplay for the event. The elite are corrupt, but not dumb. They know an in-your-face theft like in 2008 will not hunt this time around - even by the public school NEA indoctrinated American dumb ass public (the average guy - not the people that read ZH). They need this one to look like it was a legitimate action to save the American economy from certain destruction, not the monied elite who have caused all this shit to happen in the 1st place.
The bailout will be painted as necessary to keep working Americans in their homes.
While I despise Paulson for the theft, you got to admire his acting savvy.
"We need, uh, ahem, $700 Billion to prevent Systemic Failure."
The guy did it with a straight face. A Conman of the highest order, now safely tucked away by his Masters.
most conmen don't have Goldman and Congress in their toolbag
Unfortunately, he's probably right.
I agree in all likelihood this is a non-event. Too complex and goes against what the govt wants. The only thing that can stop the charade is Oil going over $125 per barrel (and gas at the pump over $4) or international buyers to stop buying and sell their Treasuries. Otherwise, Fed game on for now.
oil going (and staying) over 125 is going to stop a lot of charades
as if you'd poured it directly onto your green shoots.
Once the international holders of CDOs start getting stiffed, it will be game over!
At what point to people say that's enough and "REALLY" fight back?
Or are 99% of the citizens out buying CostCo sized buckets of 'Lube' ?
There's enough ambiguity in your quoted adverb to drive a truck through.
Who are you going to 'fight'? The cops? The elderly? Lloyd, Jamie, and Vikram?
I guess the CHiPs star fraud is not the biggest?
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/10/07/financial/f1...
Federal regulators have accused the actor who played a California highway officer in the 1970s TV series "CHiPs" of securities fraud.
The scheme involving actor Larry Wilcox was one of several kickback operations run by more than a dozen small-company stock promoters, the Securities and Exchange Commission said Thursday. The SEC charged Wilcox and the others in lawsuits filed in Miami federal court. The 63-year-old Wilcox, of West Hills, Calif., played Officer Jonathan "Jon" Baker on "CHiPs."
The SEC says the promoters were caught in an FBI undercover sting operation offering to pay kickbacks to pension-fund managers or stockbrokers for using their clients' funds to buy penny stocks.
God, it's great to know that our regulators and law enforcement personnel are really on this fraud thing.
So many on this baord do not "get it", which is suprising for the ZH Board.
IT IS ABOUT THE DAMN MBS and the so called "securities" that were made out of these fradulant mortgages. Now the banks need money or assets for their EOY balance reconsiliation and NOW THEY DO NOT KNOW IF THEY OWN IT OR NOT.
WHY??? IT has been sliced and diced in the MBS seciiritization process. NOBOSY know who owns what without a proper "chain of ownership".
Go to Karl Dennigetr's site and get the goods at market ticker org. This is the reason, the "equities" produced and the DEFRAUDED INVESTORS!!!
It is NOT about the original mortgages and whether people paid them or not.
If outside law firms were involved in drafting the securities, well - it is called malpractice. If they were not, then remember the ruling on the "sophisticated investor".....But some were not so sophistecated that they had to expect outright direct above board fraud. What about forgeign v. domestic purchase of same? Wow - that moves losses directly to a politic arena - again but with game changing and finger pointing.
This is now a mess of epic proportions. Frankly, how do you unravel? Once a plan is decided upon? How is to be implemented? And after teh TARP thing? Secretary Paulson better go into hiding. Even though that will not help. His press conferences with W are no officially hilarious and sickeningly hilarious.
Oh lord the world just super-changed and realized out interconnected everything has become. Can you imagine describing this to someone 40 years from now?
Doesn't make a difference. When they decided to "securitize" these into MBS they had a "duty" to "perfect" the security under laws of makeing investing securities.
This goes back to AIG, GS and the rest of the ilk that dreamed up these MBS investment vehicles.
THEY are now on the hook for the securities they created because by making these vehicles and not verify what is in the security is FRAUD.
Everyman
Got the message, BUT I don't think the Criminals give a damn. Knowing all the sewage yet to come down the pipe, these guys have Bonused themselves all the money the Fed could give them and you can be sure most of it is in real gold in off-shore vaults.
Everyman,
You forgot to mention FASB. In addition to the "collectivization" of risk (no one owns the titles b/c everyone owns the titles), some of these foreclosures are because the homeowners are underwater. But they are underwater at market prices! The banks, hedge funds, etc. are counting the MBS and CDOs as M2Myth.
Can a bank who is using M2Myth, force the homeowner to M2Market in order to foreclose on the same property?
YES!! Yes yes yes yes yes. This is what I have been saying. No one knows in many of these cases who is the holder in due course, or even a nonholder in possession with rights to enforce. And it cannot be undone retroactively. It is not merely "house for free." Homeowners who are about to be foreclosed will sue to stop the sale. Homeowners who have been foreclosed will sue to reverse the sale. The investor (Hell hath no fury like CalPERS scorned) will sue to get their money back. The state and federal tax authorities will sue to get their back taxes because the trusts were never actually tax exempt. The sellers of CDS will sue for fraud committed in the form of the representations made to induce them to issue the CDS. The targets: the banks who originated the loans, the banks who pooled the loans and created the securities, and the lawyers who represented both of them and MERS. Absolute freakin' free for all in the judicial system, which will last decades and involve a trillion dollars before it's done.
I think it's amazing that the banks have the balls to continue doing their dirty work in the nonjudicial foreclosure states, where the courts are not actively looking over their collective shoulders. They are literally thumbing their nose at the homeowners and saying, "Go ahead. Stop us." Knowing that most won't (EXACTLY the same approach used by insurance companies when their universal reaction to almost any claim is to say no).
And the criminals will continue to be funded by Benny and the Inkjets until the music stops.
For once in my life, I am cheering for the lawyers! The non judicial states are falling right in line too halting foreclosures...Texas, California, can Florida and Nevada be far behind? No politician worth is salt is going to want to be left out of this instant deification.
Everybody hates lawyers--until they need one.
Word.
Absolute freakin' free for all in the judicial system, which will last decades and involve a trillion dollars before it's done.
I think you're missing at least one zero in the amount involved.
Most folks are just waiting for the sheriff to come. Its hard to fight the Man when you can't find and pay for a qualified attorney with NO JOB. There are a ton of "real estate attorneys" who will counsel you in lieu of you paying your mortgage. $3,500 for a mortgage modification that goes nowhere. The banks are 100% in any deficiency loss in most cases - they have FNMA and FHLMC backstopping the loss. The real action are the OREO departments separating out the good properties from the crap and the bank insiders are buying these for nothing, while the GSE write a check for the difference. Talk to any Las Vegas broker. With most loans backstopped by Fannie and the taxpayer, the banks don't really worry about any loss to them. As such, what is the penalty for doing a few thousand bogus foreclosures? There are too many properties in the pipeline - they need a rest and most moral people will just slink away in shame.
I've read "The Big Short" and I DO understand what you're driving at:
MBS <= CDO <= CDO^2 <= CDO^3....
Just what do you give the Bankster that's stolen everything?
Somehow, Chrome bracelets and matching leg-irons seem so inadequate!!
Any room in Guantanamo?
Everyman is right about the MBS process. But:
I'm assuming that the securitizers will have to pay the MBS holders, after much legal wrangling. But I'm further assuming that the securitizers will utlimately look back to the collateral - the original mortgage. This is where the rubber will meet the road, right?
Bank Stress Tests will be revisited. TARP 2 & QE2 will be a combined effort to keep this walking zombie trudging forward.
I disagree, this is a crisis, or will be named one. In my conspiracy opinion, this an orchestrated assault on individual property rights. The little guy loses, the government takes more, all in the name of protecting the little guy. Bend over and breathe deeply.
Tyler has already supplied the moniker: "Massive Mortgage Mess" (M^3)
Just about everything is up today, The markets say no problem, Why? www.4closurefraud.org may of stumbled on something iffy,
No worries print several $trn job done and oil will be $500 a barrel with wages declining thats the price of this fraud, I am very F offed
Hot damn I'm enjoying these threads! I'm gonna go home tonight and watch The Matrix again. This time I'm gonna put some Parm cheese on the popcorn.
Is this a camouflaged QE 2.0 in the making?
Tiny Timmay:
Pack your limp little appendage and go home...
Tavakoli... There's my post road warrior Treasury Secretary...
Okay, theoretical question then: would you trust her as Fed chair?
Why on Earth would you want to keep the Fed?
Why, Why, Why on earth would you want to keep the Fed??
BTW - KD wants to keep the Fed as far as I can tell. Makes KD suspect IMO.
I'm allergic to bank panics; don't throw out the baby with the bathwater. You can have a Fed which is limited by congress and audited that serves its monetary function as a central bank without becoming a bastion of moral hazard and market interventionism...that was kind of the point of my semi-rhetorical question.
The Fed does nothing to prevent bank panics. The Fed is "leaky" for special friends and always will be. The Fed has already destroyed the value of our money. The concept is corrupt and unnecessary. A bankster scam upon the people.
"The Fed is limited by Congress" ... and Congress is limited by the people ... right, right, right. Sheesh!!
Can't you see the tiny [gaping] flaw in your plan?
Don't you socialist statists ever learn from your mistakes?
This cunt and the lawyers are trying to force a GOV BAILOUT, due to lax title paperwork. Most of these losers haven't paid for 18 months, this is nothing more than fueling retail spending by SQUATTERS before the holidays and an election. I reiterate THEY CAN'T PAY. They will default no matter what. They chased the tulips and lost! What a load of crap this country is.
why are you defending the fraudster bankster while wearing that avatar, doofus?
When I saw the user name I instantly intuited that he would be a "plant," i.e., bankster tool. Not so bright, either. Somebody should get a refund.
It's hard to get good help when you've mind fucked your retarded followers to obliviousness.
This looks like the beginning of a major crisis that will break before the election. Within two or three days, IMO, we’re going to see the reason why this happened. It’s just now exploding; I think it is going to be a huge, huge scandal, with the banks at the center. The most important thing now is not to pay any attention to what the politicians say or do; they are the most untrustworthy people on the planet right now and the banks already are proven criminals.
This is a new round of scandal coming on top of the sub-prime scandal that we just went through—with a new wrinkle; the perpetrators can’t prove what’s in the garbage. The government and the banks have used all these new "instruments" moving this stuff out by the trillions, with Freddie and Fannie and HUD and Goldman Sachs and Chase working overtime in the process.
There should be thousands of people who end up in prison, because at the end of this, there is only one place that pays for this—the taxpayers. The banks don’t pay; the people who couldn’t afford the houses aren’t going to pay. They’re going to try to push it off on the taxpayers. Which I know is worrying you, no doubt, because you’re a taxpayer.
But, there isn’t the money to pay for it. If their plan is to tax the people to pay for this, then they have another think coming. Which, I believe, is what you are saying.
As Graham Summers of Phoenix Capital Research said today: ”We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years.”
Continued Graham, “Bear in mind, I’m completely ignoring the debt we took on with the nationalization of Fannie and Freddie, AIG, and the slew of other garbage we nationalized or shifted onto the Fed’s balance sheet. And yet we’re STILL talking about every US family making $31,000 in debt payments per year for 75 years to pay off our national debt.
“Obviously that ain’t going to happen.”
This will definitely break before the election. It is over-simplistic to say the MSM is completely controlled by corporate interests. Journalists have big ego's with major imaginations and ambitions (not all corrupt, either.)
There will be a race to be the first to get the story out. It will be a guaranteed Pulitzer Prize. Watergate was just a leaky faucet in comparison.
Shit will really hit fan.
This should be interesting.
Bob
The days of Watergate are gone.
The media is tightly controlled.
Ask Rick Sanchez how his masters liked him speaking off-script.
I understand your cynicism, but this story will break. Whether it's somebody on MSNBC, Rolling Stone, Playboy or a foreign media outlet, somebody's gonna do it. I'm thinking the race is on to be first . . . and that will happen before the election.
But that's just my opinion. We've all got 'em.
It is over-simplistic to say the MSM is completely controlled by corporate interests.
You've got this completely wrong - Bob.
Perhaps I'm overly inclusive in my definition of MSM--I see it including such things as Rolling Stone, Vanity Fair, Der Spiegle, etc.
Bob - You got a ways to go. Follow the money. Matt Tiabi aside, they all belong to the corporatocracy. Germans I know laugh all the time about Der Spiegle. Add book publishing to the list as well. Sometimes, there is a good piece here or there because, you have to sprinkle a little dog food in with the saw dust or the hounds will stop coming.
I'm with you on this -- if the Govt "thinks" that the US tax payer is gonna foot the bill this time, they'd better think again. Insist and it's TAX STRIKE TIME!
There are NOT enough IRS, FBI, BATF, DEA, etc, agents in the country to deal with this.
They were 'lax' in their legal obligations of securitization to strategic-defaulters and people who've made every payment alike, fucktard.
Nothing says "deep-seated insecurity" like the use of the word "cunt"!
I don't know what planet she's from. crony crapitalism will be protected even if they have to kill every one of us. saying what should be done is like pissing in your pants when you have to go real bad. It feels good at first but you still have a problem.
That's the point of wars, I'd guess. Demonize some far-away population of peoples and send joe six pack to fight 'em. A hundred dead Joes, or a million, it's nothing of concern to the people pulling the strings.
Nationalism, patriotism, the illusion of rights--these are the coping mechanisms of modern serfs. And you're right, they will see everyone of us dead before they'd acquiesce to any demand for equality. As George Carlin said, they own us.
And the nerve of us to criticize them? Expect them to conjure up more boogey-men for us to fight and die against. And if that's not enough, they know they can get us to turn on one another by playing on certain fears.
Looks like they've had it all along, and despite any resistance, they will herd the cattle in any direction they see fit.
That is often the point of war, but not always.
It's something so simple that a child understands it, yet people with a lot of letters after their names fail to grasp it. Sometimes war is nothing more than a mugging or a murder -- and for the same reasons, writ large.
Those who get too wrapped up in one motive for war are likely to get blindsided by the other while they're busy crowing about their understanding of the big picture.
http://www.youtube.com/watch?v=NoVavpbhBfM&feature=related
Are 'they' blameless?
No, 'they' propagandize and distort at every turn; we're nationalists because we're bred to sit up and recite fascist pledges of loyalty and sing anthems reminiscing getting our ass kicked not-quite-so-badly-as-we-first-thought.
But we can't complain if we're not holding up our end of the bargain either; don't blame 'they' for 'our' failings.
How many of us are eligible to vote? How many actually do?
How many of us didn't take out a shitty ARM, resisting the siren songs of 'they'?
You're a serf, if and only if you want to be a serf.
http://www.youtube.com/watch?v=MWLTA7F9QzU
http://www.youtube.com/watch?v=RWdP8B4BHss
Wow, I don't know which was more of an epiphany; When I found out for the first time that the actual currency was debt based and interchangeable with/the same as credit, and created out of thin air/based on productive output (which is not necessarily a bad thing), or just now when I realized that over half of zerohedge readers still don't get it. I always figured you guys were a lot smarter than me. Well, I guess that explains the remaining gold bugs. I am of the opinion that you cannot be a gold bug AND understand the system at the same time. There were reasons for the creation of this type of system, and those reasons haven't changed. The problem is that it has been captured and abused.
I agree. Anyone that buys into Gold is actually buying into the Debt for Money agenda.
I'm intrigued...could you elaborate?
I'm a gold bug. But that doesn't mean I believe we will end up with that system. It's just a means to break the one we have now. I firmly believe we will eventually settle into a pure script system. With no chance of internet banking or credit or amazon.com. Pure cash society. Only the cash might be plastic with anti counterfeit holograms on it.
That's dependant on if the jackholes in the ghost region figure out we will dump their ass off in hell and leave them or if they wise up and finally stop cutting off chakra mechanics that allow them to be the sociopaths and psychopaths that they are.
god bless janet t!!!!!!!!
"Banks were lying and committing fraud, and our regulators were covering them and so a bad problem has become a hellacious one."
EK: Given that our financial system is still fragile, isn’t that a disaster for the economy? Will credit freeze again?
JT: I disagree. In order to make the financial system healthy, we need to recognize the extent of our losses and begin facing the fraud. Then the market will be trustworthy again and people will start to participate.
how excellent....on the other hand a resolution trust solution is not the answer....pure unfettered fertilizer plant processing is the way to go....
I want them to build a giant fucking prison farm in the middle of Louisiana and stick everyone of these fucking bankers in it and make them hoe fields.
Not one of these mf'ers have seen a jail cell. I wanna see the Nuremberg trials ala the mortgagetown-fraudtown trials. I wanna see every greasy politician like Dodd and Frank that enabled this shit to swing.
When that's over I want the FED disembowled and swept from the annals of conscious thought. Bastards.
Other than that, things are good. Gonna leave now, grab some gumdrops see the Disney movie, Secretariat.
LOL!
considered a career in public speaking? We need your attitude
We halready have "rules" about lost or stolen issues:
http://livinglies.wordpress.com/2008/12/25/sec-rule-17f-1-requirements-f...
Here is the rule requiring the requsite recordkeeping if you are going to have or make a security or "contrivance".
http://taft.law.uc.edu/CCL/34ActRls/reg19B.html
I've got news. If you think this fraud is something, there is something bigger.
When they did away with paper stock certificates and went to book entry, it was not for convenience.
When there's no certificate, the book entry numbers can easily get "jumblled" and presto you don't really own your stock position free and clear, because the stock you own has been hypothicated, re-hypothicated, loaned-out for fees, and is not in safe-keeping like you may think.
Think, the paperwork just got fraudulent in the mortage markets??? Get real. It's most likely across the board.
The stock and other markets have been around a lot longer, this in not a one-asset-class problem.
Shit! Now that would figure, wouldn't it?
I mentioned many months ago that the DTCC is their Black Box. I think Cede and Co own rather a lot of shares in US Inc.
Oh yeah, that's right. And we talk about whether GLD is just paper . . .
How deep does the rabbit's shithole go?
You're right Customersman
Toxic FTDs. Failure to Deliver = Naked shorts that are never covered = counterfeit shares.
Excellent presentation http://www.businessjive.com/
Uh-OH! HOw about those MBS both R and CRE that were sold to outside the country investors, or those that securitized THOSE assest???
Sets the scene!
These thieving-banksters have been stealing money from us in the securities markets for soooooo long they thought they had the right to do it with mortgages too.
But the banksters were not as good at stealing as the brokerage firms,....and got caught.
What do you think all those massive NAKED SHORT POSITIONS were about?
Market manipulation on a grand scale, and in your face thievery.
Again when they stopped stock certificates, the NAKED SHORT POSITIONS went through the roof, made the trickery so much easier when no-one has a certificate that might screw up your plans.
Naked as jaybirds. Naked power and abuse.
Hi everyone first post!
I recently read an article from an economist at the Fed whom concisely and eloquently presented the moral hazard in today's mortgage market.
"Third, now that HAMP, which is based on interest reductions, has given the servicers cover to reduce interest instead of principal, they can be counted on to do the former and eschew the latter. Cutting the principal by half, for example, immediately reduces the servicer’s fee by half (since the fee is computed as a percentage of principal), while cutting interest does not. Moreover, cutting principal increases the likelihood that the homeowner will sell or refinance, which would cause the servicer to lose his fee entirely."
http://www.ny.frb.org/research/epr/10v16n1/1008gean.pdf
That is a good read, but it fails to address the problem we have with the foreclosure nightmare:
namelsy "Who owns the note and property at this moment?"
Is it the MBS holder? Servicer? Lending bank originator?
Ownership and lien perfection will be papered over. There is no alternative for TPTB. Think about it...if the truth about $10 trillion in mortgages is admitted (almost no banks service the mortgages they originate) not only will all banks fail, but monetary systems will crash as well. The only alternative will be to hit the reset button and start over again on a gold standard. What are the chances that will happen?
The only alternative will be to hit the reset button and start over again on a gold standard. What are the chances that will happen?
100%. Events are about to take a life of their own.
Welcome. Remember the first rule of Fight Club.
And the Eighth Rule:
If this is your first night at Fight Club . . . you have to fight.
Loose the tie, fella.
And Rule 13.1- if you don't get a few junks, then ya got nuthin to say.
Lead, Follow, or get out of the way.
Disaster yes, I would say so.
Until now I hadn't thought about the lawsuits from investor in the banks who were fudging and not disclosing. QE II is "gonna need a bigger boat"
Guys if you wanna get down to brass tacs here, nothing is real. Not even your kids or your cars or your granite countertops. None of it is real. We are all in an illusory quantum wave function setup/scam that is literally a giant "phantom limb syndrome" simulation. Do the research for yourself. Wake up. It's all "fraud" at one level or another. Yawn.
Hope I catch you before one of us phases back into an adjacent universe or the indeterminate quantum fog, I
Or maybe you've got it all backwards. The limb is real and it's holding up a "phantom body".
Yes trg
Philosophy 101- great for trolling for wide-eyed college girls.
If God is almighty can God create a weight so heavy that God cannot lift it ?
I think I will take my unreal self and move along now....
William Black for chief prosecutor.
Janet Tavakoli as deputy chief prosecutor.
Ron Paul, Dennis Kucinich, and Alan Grayson as the oversight committee.
If they get convictions on Dimon and Blankfein, the republic stands a chance. If they don't, you can kiss it good-bye. (Notice I said, "stands a chance." I know fiat money and the Fed are in charge, and it's a sham. But shouldn't we give them a shot?)
P.S. Is ZH 30% gold bugs, 30% anarchists, 30% idiots, 5% trolls, and 5% frickin' geniuses?
First of all, like most popular blogs, the average posting:lurking ratio is around 1:75-100. So if this thread has had 225 posts, it most likely has had around 16,500-22,500 page views. ZH may trend slightly towards the higher mark given the technical nature of the discussion material and the hesitance of those less familiar with the details to post an opinion (or question for that matter).
That's not to say that readers who refrain from posting aren't as 'intelligent'. In fact, there are lots of professionals like doctors, lawyers and accountants who are just beginning to get up to speed on the various underlying subject(s). They not only have to catch up (after finally shedding the denial - CogDis knows this first-hand from his client base), but they have to rid themselves of the internal rage directed at those who lied & artfully (mis)directed them to waste their lives while they ran off with the stolen cheese.
As to the breakdown of those who do post, the geniuses are the anarchists and vice versa.
At the time of this post, this article has had 17,479 reads. As a contributor, I see a "reads" number next to every article.
I do not believe that number represents "unique" reads, just total reads.
Ask Sacrilege, he should know.
Is that an unusually large number of reads for a high-posted article?
17,000 is a good number for an article that is highlighted by Tyler at the top. But there have been much higher numbers.
Nearly two days later, Sunday morning at 10:47 AM + on 10-10-2010, the number is now 45,837. This indicates to me that the article has been picked up and placed on other web sites and blogs and has gone viral to some extent or another.
This is now an excellent number.
The other article doing well is the Gonzalo Lira one about the coming middle class anarchy. It has had 27,756 reads and I know this has also been picked up on other blogs and e-mail lists because I've seen them. In fact, two lists I get on a daily basis included this article and one list contained the "Biggest Fraud..." article.
http://www.zerohedge.com/article/gonzalo-lira-coming-middle-class-anarchy
Do you know if that excludes postbacks from the server after commenting? Is this "read" #45,839?
Each ZH'r, by regulation must contain:
27% Gold buggery or Bugger Gold
23% Anarchy or Complacency
21% Raving Idiocy or Genius- depending on point of view
The rest of the recipe is Secret.
(pssst: What about the clothes and burial money?)
I thought the Republic became a Corporation many years ago.
[We predict that within a week, all banks will halt every foreclosure currently in process.]
That was a great call, Tyler.
Gee....I guess the only solution by the Marxist, crony capitalists in control of the federal Government will be to NATIONALIZE the entire banking system...
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." John Adams 1826
"And I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property -- until their children wake-up homeless on the continent their fathers conquered... The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." -- Thomas Jefferson wrote on May 28, 1816
I just love that red herring of socialism. Put me with the guys above . . . and Nationalization.
[If the American people ever allow private banks to control the issue of their currency...]
These are terrific quotes, Bob.
Jefferson must be watching us from heaven, scratching his head, "I don't know how we could have been more clear."
Gee....I guess the only solution by the Marxist, crony capitalists in control of the federal Government will be to NATIONALIZE the entire banking system...
"There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt." John Adams 1826
"And I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property -- until their children wake-up homeless on the continent their fathers conquered... The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." -- Thomas Jefferson wrote on May 28, 1816
I just love that red herring of socialism. Put me with the guys above . . . and Nationalization.
While the argument is made that the money is owed but the lien was not perfected, it may not be that simple. It has been many years since I was in private practice and there were mandatory disclosures that may vary from state to state. I wonder how musch of this paperwork may not be able to be located (assuming it exists) in order to prevent the debtor from avoiding the debt.
Fannie & Freddie need to go BK for starters.
No more bail-out-money-laundering bullshit. Then the 'assets' can be sold off. The first right to buy the mortgages should go to the people who owe the money, say 30% of face. That would benefit the US tax payor directly and immediately as well as the home owner, create new mortgages, retire the bad paper, return some capital to the treasury and re-boot the system.
It'll do wonders for price discovery when all these pension funds and other institutional investors sue the banks to take the securities back.
They securitized my credit card debt as well. So, if I am paying B of A for my Visa, do they really own the debt? How do I know the real owners of the debt are are being paid? Someone needs to look into that, we might all be debt free and not know it.
Sounds like you might need to look into it! I wonder what user DavidSmith would have to say about this question.
A friend just told me that Bob Brinker said the S&P is going to 1300. Everything is just peachy and there will be no double dip. Yee Haw! I'm Maxing my credit card tonight!
TO THE MOON Benny - a few trillion more in QE will take care of this.
Ezra Klein: What’s happening here? Why are we suddenly faced with a crisis that wasn’t apparent two weeks ago?
ROFLMAO
Stupid fuck calls himself a reporter? This is the result of the MSM connivance at covering up all kinds of heinous crimes by TPTB and he's asking "Why, why!" Stupid fuck.
Off with their heads!
Go ahead. You might want to reprioritize your Action Item list, however.
Not so fast to throw punches at Klein. I like the guy - he's good at under-asking a question to urge a more in-depth response from the one being interviewed. Much preferred to a reporter who asks and answers his/her own questions.
Yeah, whatever, you really made me believe he's "under-asking" to prompt a response; you can almost hear the plaintive cry in his question. You're also probably a joo who thinks she's clever at manipualting; keep your juden fetzen!
http://www.youtube.com/watch?v=USGSOViaulc&feature=related
http://www.ustream.tv/recorded/10034228#utm_campaigne=synclickback&sourc...
christopher whalen 1:07 inTrust Rasputin when he tells you that this little McMortgageGate
issue...
Rasputin
- Fri, Oct 8, 2010 - 11:49 AM
...will be cleared up in a heap-big hurry.
No matter what it takes, Uncle Thug will do it.
Because Uncle himself is on the hook for nearly:
SEVEN TRILLION FIATSCOS
...of McMortgages, due to his "proud ownership" of Fannie, Freddie,
the FHLBs, and FHA/Ginnie.
Not to mention the Federal Reserve itself sitting on over ONE
TRILLION fiatscos of Fannie/Freddie MBS and debt.
So, even if it takes an emergency "Executive Order" or "National
Security" declaration (all done AFTER the November elections, of
course!), you can bet your last fiatsco that Uncle and the Pigmen AIN'T
gonnna let a bunch of smart-alec homedebtors and punk lawyers weasel out
of their McMansion debts.
Obamatron: "Let's see...Do I throw out all underwater mortgages and piss off those that are doing the right thing, or do I throw the underwater mortgagees under the bus and piss them off? Decisions, decisions..."
.
Its not just residential. Various "entities" were acting as "conduits" on commercial loans. There are stories there -
As the clouds grow darker and the storm gets closer, I am changed in my opinion about the public being well informed. I feel fortunate to have ZH as an inside source, but worry about the general public really understanding the true extent (not that we really know yet) of the criminal destruction of our economy and way of life. It may wise to feed the useful fools/unwashed masses/Merican citizens more spun mush.
I wonder, perhaps we need a post dedicated to the topic of Friends and Relatives Who Look At You Like You Have a Dick Growing Out Of Your Forehead.
Because that is generally what happens. The shit we're in is just so far out of people's experience that they reject it without even trying to think of it.
This is like trying to tell people not to be oblivious to the world around them, but no matter what kind of fucked up stories you can tell them from work on the night shift, they'll never believe it can happen to them. Heads in the sand.
Gave up on the relatives long ago. They were all clubbed over the head with information, but no one could wake up. I tried. No blood on my hands. Hard to crack through Stockholm Syndrome.
Or worse. They look at you and give you a condescending little nod and a pitifull smile like you are not quite right in the head.
I am curious, what you guys think about when comex will be going burst? this Dec? Too early?
Silver first. Depends on demand. They are close to going under.
Once the holders of the CDOs check their wallets, Gold and Silver will NOT waste much time going ballistic!
She's right, but I can't see this happening the same way as the S&L crisis even if they wanted too. For one much of this credit and mortgage debt was sold to not only pensions in this country but pensions and central banks and banks in other countries. Many of those nations and their financial institutions bought tens if not hundred's of billions of dollars in credit debt. And on top of them buying this, they levereged it also so many times just like our financial institutions via derivatives and such. So if your 2 or 3 German banks who bough 100 billion in MDO's or CDO's etc., and find out that you get a haircut of 20% then those 2 or 3 banks are out 20 billion dollars. So you the Chancellor of Germany have 2 or 3 of your banks out 20 billion dollars, what this does to your banks are to make them essentially insolvent unless they can come up with this pit fall. So the German govt. has to find this money from somewhere and they make cuts or go into more debt etc. etc.. And thats if they are able to do that in the first place.
America would have told the bond holders that yea you bought out toxic wast and it was fraud, but we aren't going to allow ourselves severe austerity to pay you back. You investors have to take it and like it. This can lead to trade war and investors not only stopping the purchasing of our credit bonds but also muni's and treasuries too. Investors don't like being screwed and have long memories. I wouldn't be surprised that if they do try to penalize the bond holders because of fraud by our own banks and issuers of the debt, they wouldn't retaliate by freezing american companies assets and banks and such in order to get their money. Sounds silly, but it can happen.
Yes and all those countries are getting lawwuits together to go after the idiots that put together these CDOs and MBSs. The American CONgress may make a law to protect and buy out the banks, but the other countries have their own jurisdiction and can prosecute their own violators of the defrauding companies.
THAT my friend is the big one.
Isn't it disgusting that we are waiting for other countries' "due process" to get the bad guys
An interesting problem/opportunity needs to be seen resulting from this mess. I happened to be sitting in a oak lined conference room in Seattle, that morning where the Dow first start free falling 2007?2008 - the day WAMU first was going down. I was sitting talking to a Two Tax Lawyers. As the news filetered in, and they were receiving frantic calls from clients trying to het assets out of WAMU, one turned to the other and said, you know, this mess is going to tie up the courts for years - they simply won't be able to focus on tax fraud cases - this is to our advantage. I immediately saw their logic. Now, as the legal messes accumulate to almost unimaginable dimensions - and State Budgets are rapidly diminished - you have to ask yourself, what Large Beast is going to Slouch off Towards Bethlehem? What laws are ever more skirt able, when there are rapidly decreasing ability to investigate/prosecute laws? By any stretch of the imagination, we are approaching a Dodge City environment. What are five or six ways that a person with a steady income, could use this situation to their advantage?