Grayson

Alan Grayson On Mortgage Fraud (Lack Of) Accountability: "President Obama... Let These Crooks Off The Hook"

Now that Alan Grayson is no longer in Congress, Fed hearings have certainly lost that certain dose of panache which only a man, wearing a dollar sign tie, and cross examining the Fed's General Counsel which grinning like a diabolical Tasmanian Devil, would bring to the table. We managed to catch up with Grayson during today's session of Radio Free Dylan, in which the traditionally opinionated Fed critic had some very choice words about the President. In essence, the former Florida Democrat said that it is none other than the President, who is the reason there have been no prosecutions on banks: " I am not only blaming the Obama administration, if the Bush
administration had its head on straight they would have prevented a lot
of these things from happening to start with. But the President Obama administration said at the beginning, we are
going to look forward and not back and therefore in the process of
making that decision basically let these crooks off the hook." But that's ok - see the SEC, which incidentally has to give a person by person org chart and job description of its 3,500 porn addicts before it receive one additional penny of funding, is about to catch one or two criminal masterminds who bought some NYX calls after the information of today's merger, which was so badly leaked that virtually everyone knew about the deal ahead of the announcement, are about to spend some time in prison. In the meantime, all those who knowingly and willfully committed crimes in the great housing pump and dump (up to and including misrepresenting underwriting documents), are about to get away scott-free. Thank you Mr. President. That's some might fine change you got there.

Meet America's 25 Richest Politicians

Per the just released OpenSecrets list of top 25 wealthiest politicians in America, there are 12 republicans and 12 democrats (and Hillary, whatever she is). While we applaud the diversity among the country's richest "representatives", we can't help but wonder if these people actually "represent" the common man, or the man (such as themselves) having a minimal average net worth of $28 million...

Reader Threatens To Sue Fed After Losses Incurred By Going Long Inverse Leveraged ETFs

Remember when double and even triple inverse leveraged ETFs were all the rage? That all occurred in the brief period of time before it became clear that Bernanke would first take down the global financial system before he let Citi get back to $1/share again. Apparently one reader recalls it all too well: "In 2008 at the bottom of the market I sold positions I owned in physical gold and banks stocks such as Bank of America (BAC), Citigroup (C) and also non financial companies such as Ford (F). I used these proceeds to purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short) and NYSE:SRS (Proshares Real Estate 2x Short). Since making these purchases, these ETF’s have suffered significant drops in value as reflected in their price. In fact NYSE: FAZ has plummeted from $1100 per share to $11 per share and SRS has reduced in price from $1000 per share to $19.50 per share. It is now apparent that the Fed spent trillions of dollars to raise the price of bank stocks and to inversely suppress the price of these inverse ETFs." Yet is this nothing but a case of fippers' remorse? Is there legal precedent for an actual claim? Was the Fed in breach of duty "by allowing investors to make investments into funds such as FAZ and SRS and other inverse ETF’s, while the Fed was performing transactions that the Fed knew or should have known would severely harm the investors in these publicly traded fund." Will Bernanke cave and make whole everyone who dared to put money into the market, even if it meant betting on a broad market decline? After all the whole purposes of the latest propaganda campaign is to get people to put money in the market with no fear of loss whatsoever: whether one is bullish or bearish (and as the lack of participation shows, most are certainly still bearish). Which is where it gets interesting: "Therefore, I appeal to your office to make due and just compensation in treble damages amounting to $__ million dollars for a full and good faith settlement of this matter. If this is agreeable, I am prepared to enter into a confidential good faith settlement." In our ridiculous bizarro world, in which nothing makes sense following each recurring Fed intervention, perhaps the Fed making whole those who lose money regardless of their bias, is just what is needed to break the 33 weeks of outflows...

A Guest's Contrarian Take On Dennis Kucinich's Recent Attempt To "End The Fed"

Dennis wants the power of the Federal Reserve in Congress. His ambitions are actually quite disturbing because he is also pursuing the flawed concept of full employment, but now he has added even grander ambitions - the one thing that the horrible Federal Reserve prevented Congress from doing - creating money for the purpose of spending it. Granted with QE2 in full swing it becomes difficult to make that argument, because buying US debt so that the US Government can continue functioning is essentially the same thing, but at least our total debt grows and Americans are still aware of the cost. With Kucinich's bill this aspect disappears as money will appear whenever Congress wishes it to be so and the value imbued in this money will come through Congress alone - a Chartalist dream come true. - Arkady Kamenetsky

Ron Paul Comments On QE2, Says Fed Will Self Destruct, Shocked That Krugman Has "Any Credibility Whatsoever"

There were few surprises in today's commentary by Ron Paul on QE2: the only man in Congress (with Grayson now gone) who is sufficiently intelligent to realize that the primary culprit behind the US economy's boom-bust cycle is the Federal Reserve, continues to press for the termination of Ben Bernanke's public "service" which has resulted in a collapse in American purchasing power in the 100 years since the first Jekyll Island meeting. Yet Paul takes a 'John Lennon' approach to the problem, believing that active intervention may not even be needed, as the Fed ends up cannibalizing itself: "I think the Fed will self-destruct. People will desert the dollar. I think the Chinese are hinting that already. They are not wanting our dollars as much as raw materials. This is a deeply flawed monetary system. Here we have a small group of people who can create $600 billion with the stroke of a pen... I don't know where people are coming from to think that this can work. What really astounds me me is how tolerant the people are, the people in Congress and the financial market, where did this authority come from? Now somebody outside of the government can spend trillions of dollars and not think anything about it. It doesn't work, it's a failure. And next year it will be more. Bernanke is very clear on what he is going to do - he is going to create money until he gets economic growth and there is no evidence to show that just creating money causes economic growth." All logical and expected. Which is why nobody will endorse the Paul stance, it as it means an end to the trillion dollar wealth transfer system from the middle class to the kleptocracy.

Ron Paul To Chair Monetary Policy Subcommittee

Here is why an open-ended QE2 may be a very moot point: Slate reports that Ron Paul, Ben Bernanke's greatest nemesis, will chair the all important monetary policy subcommittee. In other words, Bernanke v Paul theater will soon be a weekly feature. Too bad Alan Grayson will be no longer present.

And now back to the popcorn.

S&P Estimate Of Dodd-Frank Costs On TBTF: Up To $22 Billion

S&P has released its first official estimate of what it believes the cost of Donk will be on the Too Vampiric To Fail. In a nutshell, the range of various costs could be as high as $22 billion, due to a drop in debit fees, lower derivative income, FDIC DIF replenishment, prop trading, and new compliance expenses. Additionally S&P expects another $85 billion in additional required Tier 1 Capital (which is a joke compared to its Tangible Common cousin). One thing is certain: just as Grayson yesterday said that nobody has any idea about what the charges associated with foreclosure and MERS-gate, and all are merely guessing, the same thing can be said of S&P. It is without doubt that the final outcome of Donk will either cost nothing or infinitely more. Yet for some reason this report made the headlines, so we present it for those 3 readers who actually care what S&P has to say.

Alan Grayson Demands Capital Buffer At TBTFs To Absorb Title Insurance Liabilities, Asks For New Stress Test

When two weeks ago we highlighted the news that key title insurers such as Fidelity National are demanding indemnity and warranty from banks, we asked "what happens if the bank is once again caught to be, gulp, lying?
Who foots the bill then? Why the buyer of course. All this does is to
remove the liability from companies like Fidelity National and puts it
back to BofA, which is already so much underwater it has no chance of
really getting out without TARP, contrarian Goldman propaganda
notwithstanding." And while our speculation provided amusement to some of the more (vastly so) polemic elements in the blogosphere, it appears that Alan Grayson took this development seriously, and sent a letter to Geithner demand that a special capital buffer be established at the TBTFs, to absorb any and all losses that will arise from foreclosuregate (especially since earlier today it was made clear that certain banks such as First Horizon don't have any provision for putbacks). In Grayson's words: "Recently, Bank of America struck a deal with Fidelity National Title Insurance to indemnify the title insurer should legal problems with foreclosures create unanticipated title liability.  Title insurers are clearly worried that they may face higher legal and policy costs if foreclosures are reversed, or should legal ambiguity cloud titles they already have insured...Since title insurers have in some cases just refused to insure this market, someone must pay for the liability these insurers have refused to incur. Both banks and regulators are claiming that the problems are simply process-oriented document errors that aren't really causing harm to the public at large.  I suspect that no one really knows the extent of the problem, or the potential liability.With that in mind, it would seem prudent to require additional capital buffers for systemically significant institutions until the extent of the foreclosure fraud crisis is understood." We wholeheartedly agree with Grayson.

ilene's picture

Looming losses from the mortgage scandal dubbed “foreclosuregate” may qualify as the sort of systemic risk that, under the new financial reform bill, warrants the breakup of the too-big-to-fail banks. The Kanjorski amendment allows federal regulators to pre-emptively break up large financial institutions that—for any reason—pose a threat to U.S. financial or economic stability.

Grayson Calling For Prosecution Of Banks Engaging In Criminal Foreclosure Activities

Taz is once again back on the scene, sending the following letter to the US Attorney in the middle district of Florida, and to FBI Director Mueller, "asking for prosection of banks engaging in illegal activities." The particular catalyst to this action was the much discussed last week mistaken breaking in of Nancy Jacobini's home by a JPM contractor. Grayson will release the attached letter at a press conference today in front of the home of Jacobini. In the letter Tax is up to his usual verbal fireworks: "If perpetrators of perjured affidavits and other systematic criminal activity can get off simply with civil liability -or even less, an insincere bureaucratic apology- the freedom that Americans enjoy will erode quickly in the face of lawless seizure of property... Without clear property rights, and a legal system that insists on clear proof of those rights before transferring ownership by force, the economy will fall apart."

Grayson Sends Letter To Geithner, Bernanke Demanding Foreclosure Freeze, Warns Of Systemic Bank Failure Risk

Alan Grayson is back on the scene, having sent a letter to Financial Stability Oversight Council which includes pretty much all of Wall Street's pawns, including Bernanke, Geithner, Bair, Gensler, Walsh, and DeMarco, in which he asks the FSOC to "suspend foreclosures until this problem is understood and its ramifications dealt with." And the ramifications, per Grayson, Zero Hedge and everyone else, will be dire for the banking sector: "So far, banks are claiming that the many forged documents uncovered by courts and attorneys represent a simple 'technical problem' with foreclosure processes.  This is not true.  What is happening is fraud to cover up fraud... The banks didn't keep good records, and there is good reason to believe in many if not virtually all cases during this period, failed to transfer the notes, which is the borrower IOUs in accordance with the requirements of their own pooling and servicing agreements. As a result, the notes may be put out of eligibility for the trust under New York law, which governs these securitizations. Potential cures for the note may, according to certain legal experts, be contrary to IRS rules governing REMICs. As a result, loan servicers and trusts simply lack standing to foreclose. The remedy has been foreclosure fraud, including the widespread fabrication of documents.  There are now trillions of dollars of securitizations of these loans in the hands of investors. The trusts holding these loans are in a legal gray area, as the mortgage titles were never officially transferred to the trusts... The liability here for the major banks is potentially enormous, and can lead to a systemic risk."