Florida

As we pointed out last week, a certain judge in Florida set quite a precedent when he found that JPM, as servicer for a Fannie mortgage, had committed court fraud by foreclosing while not in possession of the actual mortgage. We then concluded that "The implications for the REO and foreclosures track for banks could be
dire as a result of this ruling, as this could severely impact the
ongoing attempt by banks to hide as much excess inventory in their books
in the quietest way possible." Not a week has passed since, and we are already proven right. Today, Bloomberg discloses that GMAC Mortgage, a unit of the affectionately renamed Ally Bank, has halted all foreclosures in 23 states, including Florida, Connecticut and New York. Who would have thought that being caught with your pants down, doing something so blatantly illegal as collecting on something you do not own, would actually have adverse consequences. And GMAC is just the beginning - we expect many more mortgage servicers to scurry now that the light has been shone on their shell game. The silver lining - the permabull pundits will cheer this development now that foreclosures will plunge off a cliff as mortgage holders and servicers scramble to reconcile who owns what, and just on whose balance sheet the mortgage flows should show up.

Media coverage of the oil spill’s effect on the Gulf focusing on tourist income lost by the waterfront towns – with footage of empty beaches, restaurants and T-shirt shops – dominates the news. Interviews with devastated business owners are heart rending. But they always end with references to somehow hanging on until “things get back to normal.” Trouble is, things are not going to “normalize.” Not for the Panhandle of Florida, and probably not for the rest of the state, either. Projections suggest that Florida can expect oil all along its west coast, and possibly throughout the Keys and up the east coast as well. Yet even before BP’s well began spewing crude, pressures within the state’s economy were building. It was an explosive situation awaiting a match. Oily beaches and dying wildlife are likely that match.

Chasing bigger investment returns, the agency that manages Florida's $113.8 billion public pension fund wants to make far riskier investment bets.

Some bad news for our Tampa Bay/Mons Venus-based (yes, they do have WiFi) readers: globalresearch.ca notes that Florida "faces severe fresh water shortages and power blackouts if the thick crude oil from the Deepwater Horizon disaster clogs sea water intakes at the largest seawater desalinisation plant in the United States -- the Tampa Bay Seawater Desalinisation Plant at Apollo Beach in Tampa, Florida." And some even worse news for America's purported democratic/free speech regime: "The Obama administration has taken a page from the government of Soviet leader Mikhail Gorbachev and Chernobyl in censoring the bad news from the Gulf oil mega-disaster. The Chernobyl cover-up largely resulted in the hastening of glasnost and the ultimate collapse of the Soviet Union."

Florida AG Bill McCollum has officially escalated the BP fiasco to the next level. In a post on his website today, McCollum announces that  he has "sent a letter to BP asking the company to deposit no less than $2.5 billion into an interest-earning escrow account so Florida can be assured of its availability to the state and its citizens and businesses over the long-term recovery period." And now that BP is perceived as the surrogate replacement of the "all free lunch all you can eat" US government, McCollum concludes: “Based on recent estimates from an economist, Florida could ultimately see losses as great as $2.2 billion, as well as a sharp decline in employment in the industries directly impacted by the Deepwater Horizon oil spill. As Florida braces for what will likely be a staggering blow to its economy with significant impacts to our state’s workforce and the revenues of the state and local governments, it is essential that BP establish immediately a dedicated escrow account solely for the purpose of paying claims and damages to Florida and its citizens.” In other news, the Florida economy is strong and vibrant according to the Beige book.

Ruh-roh ...

Stuy Town, which as Zero Hedge wrote about several days ago is in dire straits and a few months away from default, has claimed its first casualty in the face of the Florida pension fund, aka State Board Administration which has disclosed a full loss on its $250 million investment. Next question: is Blackrock still carrying Stuy Town at 100 cents on the dollar for its own LP appeasement purposes (PEs heart FASB looseness)? This piece of information will likely get as much coverage on GE's propaganda central subsidiary as Chrysler missing August sales estimates by almost 20%.

Has to be seen to be believed

The biggest financial institution in Florida, $14 billion BankUnited of Coral Gables, was told by its regulator, the Office of Thrift Supervision, to find a buyer who would raise its depleted capital to acceptable levels or risk a government takeover.