Tuesday, May 31, 2011

Quelle Surprise! Consumer Confidence Falls on Oil Prices, Housing, Job Outlook « naked capitalism

cyberswim: we love curvesQuelle Surprise! Consumer Confidence Falls on Oil Prices, Housing, Job Outlook « naked capitalism Big Surprise today as consumer confidence falls along with housing prices. But wait haven't we heard all the economist, commentators, anyone in the government and all the bankers saying we are on our way to recovery? What is wrong with these people!!!

Actually, nothing is wrong with those people because it is the rest of us that seem to like the bull shit they are feeding everyone. It is as if the American public has chosen to bury its head in the sand and let take over government. The specific duties of the federal government is now set by the major banks and their lobbyist's.

The middle class of American has been screwed royally by our current "free market" system that is only a free market if the banks are making billions of dollars and funneling billions more to buy off congress. Once the banks stop making profits again, as they have been since the government bailout, and the washing out of smaller entities, the record low interest rates that allow for money to be made on nearly anything, start to fade, it will be more urgent that the economy and along with it the middle class, be brought back to life. The so called free market system is set up now to serve the banks and the government and to have everyone else follow along as if they were rats behind the Pied Piper. Of course all the followers are being lead to the financial cliff of doom.

The Middle Class are being treated as second class citizens by the government and their banking dictators. Why are people putting up with such anti-American, anti-freedom and anti-middle class sentiment as we are witnessing?

Did we see any major bank CEO's or bank presidents suffering from these tragedy that has vaporized trillions of retirement money of the middle class? I can answer that easily by saying NO! Do you think any of those in power have lost their home, or been treated like they don't exist when they tried to get a mortgage modification? I doubt it. Do you think any of them had to displace their families, remove their children from their favorite school, or losing their health insurance?

We have seen just the contrary starting with friends of Mozillo to recent stories of how family members of government officials and the officials themselves have received special treatment and extraordinary consideration that showed extreme favoritism regarding home loans and modifications. We the people have lost control of our government and now we have lost control of the financial system that has been corrupted by the politicians, lobbyists and bankers.

The recent story in the may 26, 2011 issue of Rolling Stone revealing just how Goldman Sachs has turned into a criminal institution without a hint that they will be prosecuted for their egregious crimes is typical example the weakness of government. The corruption on Wall Street has turned the Federal Government into its own ATM.

We have heard so much about home owners using their home as an ATM and how terrible and short sighted it was but why aren't we hearing about how Goldman Sachs and the other Wall Street Players (by players I mean criminals) have used the American tax payer to bail them out of every problem they have had in the past 50 years. Complete BS.

I am not sure how politicians and the president can get up in front of people with a straight face and claim any different. Oh Wait! Of course they can because they are politicians. Their first interest is self preservation and once elected their main concern is re-election. They know how good they have it with million dollar expense accounts, paid apartments and stipends for travel and food. Also we can't forget to mention the best health care available to man at no cost to them.


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Case-Shiller Index Expected to Show New Low in House Prices - NYTimes.com

Case-Shiller Index Expected to Show New Low in House Prices - NY Times.com Nearly halfway through 2011 and Case-Shiller index is expected to show new lows in housing prices and the bottom looks to be a ways off as of yet. This is an interesting article and it says that people are a bit gun shy about buying a house after the real estate crash. It is no surprise that people are holding back from purchasing. There will be a long hangover from what has occurred the past several years. The public trust has been severely damaged. Since the banks have not been held accountable for any of their part in creating this crisis it seems logical that people will likely never feel the same about the economy again. Many people had worked for years to build for retirement but the government is giving off the impression that crime does pay as they let Wall Street and the big banks get away with wiping out middle America. If the preview to the Case-Schiller index is correct, it will reveal that the housing market is still severely damaged. Clearly the homeowners are the ones left to be dumped upon who have no lobby working hard in their favor like the banks and Wall Street Brokerage houses .

Saturday, May 28, 2011

Housing recovery still not happening

Funny how long it has been since the talking heads on Bloomberg and MSNBC, CNBC have been touting that the housing bottom had already happened.  A 12% drop in sales this spring according to data from NAR (national association of realtors) would prove otherwise. 

Evidently people don't realize just how screwed up the banking systems and housing markets have become in recent years.  There is no recovery in jobs or in the economy if they housing market stays in it's current state.  How can all of the housing related jobs, (IE construction, real estate, mortgage banking, insurance, inspections, Title, gardening, etc etc,) ever be replaced without a housing recovery?  They obviously can't be replaced. 
The latest fraud and scam by the government is that an over inflated and manipulated stock market is a leading indicator of a recovery.  This couldn't be farther from the truth.  Profits being had by companies are not due to any growth in employment or from real revenue.  They are from cutting jobs and cutting cost dramatically during the recession.  There is no "NEW NORMAL" unless you want to accept that 90 % employment is the way of the future.  When I hear people say unemployment isn't so bad because 91% of the population that wants to be employed is employed and that is enough to sustain the economy I want to throw something at my television. 

Here is a better way to look at the current situation.  The Best analogy is created if we think of anyone running a business or the financial success of a company. 
If  a business does 90% of sales this year compared to last year they will be in deep financial trouble most likely.  If a small business owner does not earn 10% of their expected revenue they could be running at a loss.  Just as we work several months a year to get in the green with our tax situation, businesses often have to do a large percentage of business over the course of a year before they have earned enough to finally see some profit.  The profit might be the last 10% that they are not producing. 

The stock market success is based on the large companies squeezing expenses more and more.  Many companies will exploit employees or sales people as much as possible by baiting them into believing false profit potential.  You often see this in franchise opportunities or private business sales, and even in general sales jobs. 

If the current owners or managers have moved up through the ranks they often fail to move into reality of the times.  They will continually compare the profit margins and expenses 20 years ago while estimating profits in today's economy.  Typical but idiot none the less.  The stock market is reflecting the squeeze on everyone except the large corporations.  The fantasy that yesterdays profit margin all you need in today's world to get ahead ignorant.  Most often managers who were sales people at one time, are the most ignorant and arrogant of the lot. 
Their ego gets in the way of their ability to see the impossibility for a business to thrive on the same profit margin from 20 years ago.  Blindly calling for everyone to do as they did, much like the pied piper leading the rats to their death, many managers will look for those followers willing to do everything for a ridiculously low income, while following the manager to the cliff.  Of course the manager will step aside and milk every last penny from your pocket (if you let them, of course) before a business fails. 

The arrogance and ignorance of the previous sales star turned manager is apparent to many but there are always more rats to take advantage of in order to keep the manager in the fantasy land.  After driving most off the cliff, the manager will continue their delusional thinking and blame the current sales person or franchisee by saying that they couldn't cut it or that they were making a mistake for not taking more business  at what amounts to zero profit. 

The other great manager is the engineer who becomes manger.  Another usual bust in the managerial department but not until they have pillaged many underlings.  The cloud of arrogance permeates most companies that allow individuals to move up the rants internally.  It is rare that an internally promoted employee will look to new or existing employees for insight or to be promoted to higher level positions. 

All of these things are especially true when the economy is not expanding.  It all causes a drag on the economy, the middle class to be milked to the max and for them to have live on less while corporate America enjoys a wind fall. 

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Wednesday, May 25, 2011

Mark Provost: Why the Rich Love Unemployment « naked capitalism

Mark Provost: Why the Rich Love Unemployment « naked capitalism

As readers may know, we’ve been engaged in a long-running argument with a persistent Administration defender on the subject of Dodd Frank resolution, which is the one of the big arguments used for not doing much to make the TBTF banks less TBTF (see here for the latest in the series). The argument goes that since they will be allowed to fail, and they can be resolved non-catastrophically, the problem is solved. We’ve gone through the FDIC’s example of how they say they could have used the new powers under Article II of Dodd Frank and pointed out numerous (ahem) unrealistic assumptions, as as well as made more general arguments against its viability with anything other than a purely domestic institution. It’s also worth noting that a number of domestic banking and bankruptcy experts, as well as the BIS Cross-border Bank Resolution Group and the Institute for International Finance have also expressed serious doubts about the viability of Article II resolutions.

read the rest at Naked Capitalism

Friday, May 20, 2011

Former LPS Employees Allege 30% to 78% Error Rate in Borrower Mortgage Records, Contradicting Banker/Regulator Cover-Up « naked capitalism

Former LPS Employees Allege 30% to 78% Error Rate in Borrower Mortgage Records, Contradicting Banker/Regulator Cover-Up « naked capitalism

The document goes through a detailed account of firm’s use of robosigners, surrogate signers (aka forgers) and its document fabrication service, DocX. While this may seem to be old hat, some of the details are nevertheless intriguing (management at least bothered to try to select forgers based on their ability to make signatures that resembled the original; anyone who questioned whether this activity was proper was fired within a week). More important, this lawsuit does serious damage to the claims of bank defenders (the latest being Karl Rove in the Wall Street Journal) that foreclosure abuses were merely about cutting corners and everyone who was foreclosed on deserved it. But as we’ll see shortly, the underlying records were often corrupted, thus calling into question whether the foreclosure actions really were correct. Remember, LPS’s reach is wide. 14 of the 15 biggest loan servicers are its clients and every one of the 50 biggest banks use some of its services.

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Tuesday, May 17, 2011

HUD Audits Show Five Biggest Servicers Defrauded Taxpayers « naked capitalism

HUD Audits Show Five Biggest Servicers Defrauded Taxpayers « naked capitalism

From Shahien Nasiripour at Huffington Post:
A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans…

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial…
The audits accuse the five major lenders of violating the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government. The audits were completed between February and March, the sources said. The internal watchdog office at HUD referred its findings to the Department of Justice, which must now decide whether to file charges…

The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
Two of the firms, including Bank of America, refused to cooperate with the investigations, according to the sources. The audit on Bank of America finds that the company — the nation’s largest handler of home loans — failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Back then, the bank said it was resuming foreclosures, having satisfied itself that prior problems had been solved.
Yves here. This demonstrates that the banks have not cleaned up their bad practices despite promises to do so. And notice the “improper documents” issue got national attention, led several major servicers to halt foreclosures in multiple states and were put under the spotlight in a series of Congressional hearings. The banks piously claimed these were mere mistakes and they would fly straight. This exam shows them to have lied, pure and simple.
And Wells Fargo which has repeatedly and annoying claimed to be better than the other banks, is revealed to be worse, that its abuse can’t be pinned on low level employees or lax supervision of foreclosure mills:
….the Wells Fargo investigation concludes that senior managers at the firm, the fourth-largest American bank by assets, broke civil laws. HUD’s inspector general interviewed a pair of South Carolina public notaries who improperly signed off on foreclosure filings for Wells, the sources said.
Read the full article at Naked Capitalism

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Sunday, May 15, 2011

US Trustee Estimates Servicing “Errors” at 10x Level Claimed by Banks (and Parroted by Federal Regulators) « naked capitalism

US Trustee Estimates Servicing “Errors” at 10x Level Claimed by Banks (and Parroted by Federal Regulators) « naked capitalism Massive cover up still underway US Trustee throws a wrench in the works by revealing more realistic numbers related to servicer abuses against home owners. Finally, a realistic view of what really has been going on in the banking industry. The industry and its servicers has been running wild sparing no abuse. The law seems not to apply to the banks and their strong arm servicing units. Make big money in penny stocks today

The New York Fed Working to Bend Real Estate Law to Suit Needs of Banks « naked capitalism

The New York Fed seems to be trying figure out how to let the banks off the hook for their transgressions. 

The New York Fed Working to Bend Real Estate Law to Suit Needs of Banks « naked capitalism
So the real reason that industry is having trouble with foreclosures and servicers are losing money has absolutely nothing to do with the reasons suggested by the Fed. Two of the three are due to the industry running roughshod over the law. MERS was vetted only on a Federal law level; no review was ever undertaken of whether it would work under the laws of all the states. It was brazenly assumed that if MERS was imposed, the states would roll. That proved to be a tad optimistic. The second reason, the abandonment of established procedures, is fraud pure and simple. The packagers and trustees lied in the PSAs and the ongoing certifications.

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Saturday, May 14, 2011

Capitalists Who Make vs. Capitalists Who Take | Dylan Ratigan

This is a seriously good discussion on productivity and GDP and how it relates to the financial and unemployment crisis in the country. It reveals how inaccurate gdp is and how it fails to account for real cost to society during a recession. Read the full story here Capitalists Who Make vs. Capitalists Who Take Dylan Ratigan

Sunday, May 8, 2011

Banks and government continue to play Americans for fools

Yes some people do exhaust their savings and retirement trying to stay in their home and trying to meet obligations. Many of those people did so early on in the recession believing the lies told about the crisis being "contained" in sub prime or lies that banks were not at the bottom of this entire meltdown. So many people were wiped out believing the economy would turn around or that the government would not do things to make the economy get worse for several years.

This being said I agree that the banks signed a contract with you that gave them to the right to accept payment in lieu of collateral. (the house) It is a fair trade if the borrower decides to move and turn the house over to the bank.

The even bigger is misconception is that the contract between borrower and bank is written in stone. This is completely untrue and the banks only want people to believe they have no right go in and re negotiate the contract at any time. And what better time to renegotiate the contract then after the property value drops 50 or 60 percent? Any logical banker would bite the bullet and renegotiate with a borrower in this situation. It makes smart business sense fo the bank.

The biggest problem lies in the reality that the banks are being funded by goverment and they are dictating government policy. The big banks have been bailed out and now they are being given freedom to set policy as politicians cowardly run scared because they all are bought and paid for whether it is their first year or 30 th year in office.

It makes no sense for people to cry and whine about people getting a load modification. The Moral hazzard argument is total bs because everyone negotiates their own loan. Banks are free to give a deal on interest rates and they are free to charge you more than your neighbor.

The banks have used a great mind control campaign over the years to trick people into belieiving they had no power once they sign a loan. The banks are refusing to negotiate with people because they have been paid by the government and they know the government will always pay their bail.

The entire arugment about investors this and investors that, or loans can't be modified because investors have bought into the mortgage is complete crap and more bs from the banks. If banks wanted to settle with people and give them a new loan they could do it within months and keep the borrow in the home and keep them paying payments.

We are being hosed by the banks followed Us government.

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A New Zombie Lumbers On: The Mortgage Settlement Negotiations « naked capitalism

A New Zombie Lumbers On: The Mortgage Settlement Negotiations « naked capitalism

From what we can tell (and others who have tried to get a grip on this question have come to similar conclusions) sudden defaulters have hit a financial wall (job loss, medical emergency, loss of hours) and given that they have no/negative equity in their home, it makes no sense to deplete retirement savings (which lenders cannot seize in the event of bankruptcy) or go to other heroic measures. Better to preserve a smidge of cash so that one can move to a rental rather than wind up living in your car or on the street.

Having said that, there probably are a few strategic defaulters, with second homes the logical candidates. But as we have stressed, the costs of defaulting are high, and the idea that people would do it casually is nonsense.

Here’s an indirect proof that the banks’ assertions that strategic defaulter are the new commies in the woodpile are bunk: the frequency of searches on “strategic default” versus “short sale,” HAMP, and “mortgage modification”:

Read the full story at Naked Capitalism by taking link at top of the page. 

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Marshall Auerback: Obama Needs to Get Serious About Jobs « naked capitalism

How did FDR put people back to work ? An accoplishment that has yet to be matched as we see unemployment rates tick back up. Marshall Auerback: Obama Needs to Get Serious About Jobs « naked capitalism Make big money in penny stocks today

Saturday, May 7, 2011

Washington's Blog

Washington's Blog Check out Washington's Blog. He tells us about the ceos getting paid better this year than in 2007.