Nevada AG trying to restore trust and faith in government single handedly.

 Here is a portion of an article posted today on Naked Capitalism detailing the steps Nevada AG Catherine Cortez Masto has taken to try and hold the major banks accountable for their rampant practice of fraud and their explicit role in the housing crisis.  It is amazing that only one AG has figured out a way to bring fraud charges against anyone of the banks or their major players.  It is as if Masto is the only AG that is not in the bank pocket so to speak and who is not willing to let the banks get away with raping and pillaging the public.  Everyone one else from the White House to the entire Congress have been willing to turn a blind eye to the facts and to fail to protect the interests of the American people.  Masto should be commended for her courage and dedication to seeking the truth when all others were bought off.  The other politicians have acted in their own self interest with little regard for what has truly gone on in financing industry. 

Masto is showing true courage as a leader by taking on the establishment of old money and crony capitalism.  We can only hope that other AGs will find the fortitude to stand up and do what is right rather act so cheaply. 

Masto has been by far the most aggressive AG on the civil side, suing Bank of America for multiple violations of a consent order on mortgage servicing, and even making the dreaded nuclear chain of title claim on foreclosures. It’s no surprise she’s taking the lead on criminal matters. Given that her office basically has no native resources or sector expertise in mortgage backed securities, it does make me wonder just what every other AG in the country and DOJ official is doing now that she’s proved bringing charges for fraud is not in fact impossible.
At this point, Masto has gone further than any other official in terms of restoring some sort of social contract. And that’s saying something. Leadership can come from anywhere, especially when the corruption seems to be everywhere. And with California AG Kamala Harris putting immense pressure on Fannie/Freddie on foreclosures, it suggests the tide is turning on this issue somewhat.
Our essential economic problem is that our economy allocates resources through a mediating system of banks that are broken and/or corrupt. If you look at a chart of the recession, and then the recovery, you’ll notice that business investment perked up, but residential investment did not. The Fed lowered rates, bought Treasury bonds, and bought mortgage backed securities to lower rates for homeowners. But it’s not really working, because the monetary channel is corrupt. This indictment gets to that problem, it alleges tens of thousands of forged documents (or as a friend told me sarcastically, an afternoon’s worth of work for LPS). These documents represent foreclosures, economic loss, and clouded title. The indictments handed down, and the ones to come, show that corrupting our property laws and the basis of our economy is a crime.

READ the rest here

Bank of America hit hard

Here is a story from MSN money that talks about today's market collapse and some reasons why Bank of America went down so hard. 

Why Bank of America tankedBank of America was the biggest loser among Dow and S&P 500 stocks, down 20.3% to $6.51. Investors worried the banking giant won't be able to handle all the problems created by its mortgage business. The selling accelerated after a big hedge-fund manager sold out his stake.

It's not clear if the collapse today of Bank of America's stock price means the government may be forced to extend assistance again. Most of its problems are mortgage-related and directly the result of its disastrous 2008 acquisition of Countrywide Financial.

It was hit with two bits of bad news today: American International Group (AIG) sued the company for more than $10 billion over what it called a "massive fraud" on mortgage debt, deepening the litigation morass facing the largest U.S. bank.

AIG said it expects to pursue other litigation to recover losses from counterparties that "sought to profit at our expense." Taxpayers still own 77% of AIG, which received $182.3 billion of government bailouts.

The other was that hedge-fund manager David Tepper, who won big in 2009 betting on battered bank shares, now is bailing out on some battered bank shares.


CNBC said Tepper’s Appaloosa Management sold its position in the banking company.











Make big money in penny stocks today

NYT: Banks poised for dividends after 3-year gap - Business - The New York Times - msnbc.com

Banks on a role. Amazing what trillions of dollars in bailout money will do to get you through a recession. Our government and citizens do not have the will to hold the banks accountable for their law breaking activity, regardless of the damage they have inflicted on the country.

New York Times Story paying dividends again. 
NYT: Banks poised for dividends after 3-year gap - Business - The New York Times - msnbc.com:
 "Investors in bank stocks are about to get a big cut of the profits again. Financial analysts say the nation’s largest banks are ready to begin restoring their dividends in the first half of the year, after a three-year pause to repair their damaged balance sheets. The reversal could put billions of dollars in the pockets of pension funds and retirees who had viewed bank shares as dependable sources of income. Clues to how big a payout is in store could come as early as Friday, when JPMorgan Chase announces its 2010 financial performance, the first of many earnings reports to come over the next week from the likes of Bank of America, Citigroup, Goldman Sachs and Wells Fargo."

So those who have depleted savings on a mortgage for 3 years should suffer now because the government won't stand up to the banks?

Article from way back in 2008 addresses problems with foreclosures and defaults leading to downward spiral of housing prices. 

It is clear that many economists were aware of the problems with housing but there was only the uninformed leading the push to castigate anyone who was behind on a mortgage.  It was little but senseless dither by people who felt it was fair to give the banks billions of dollars for bringing the economy to its knees.  They were the same people waving the banner of trickle down recovery.  All the talk of how giving money to the banks would save the world just turned out to be complete fabrication in order to fleece the public. 

It seems like many people still think people should have endless amounts of money set aside for a rainy day, or in this case a rainy four years of unprecedented unemployment.  I am sick of hearing from people who say this was caused by irresponsible borrowers who bought homes they couldn't afford.  It is likely they could afford it if they were employed, or if banks were willing to work with people in distress.  The talk of foreclosing to turn the market around is just complete nonsense and any one who has any reasonable intelligence and understanding of real estate would understand the problem. 

We are in trouble because Wall Street and Banks wanted to be able to leverage the consistent payments of homeowners.  The interest wasn't enough for them so they wanted to create more liquid derivatives that would bring returns up to 10 fold.  We have not fixed the problem and when we do recovery they system will be in tact and it will happen again. 


"The recently enacted financial rescue plan does nothing to stop this spiral. Credit will not flow and liquidity will not return to the banking system until financial institutions have confidence in the solvency and liquidity of
of other banks. 
Problem is dowwnard spiral in housing prices



Because of the 20% fall in the price of homes since the bursting of the house-price bubble, there are now some 10 million homes with mortgages that exceed the value of the house. Residential mortgages are generally "no recourse" loans, meaning that if the homeowner stops making payments, the creditor can take the property but cannot take other assets or attach income. Individuals with loan-to-value ratios greater than 100% therefore have an incentive to default even if they can afford their monthly payments, and to rent an apartment or other house until house prices stop declining. When individuals default and creditors foreclose, the property is added to the stock of unsold homes. That depresses prices further, increasing the number and magnitude of negative equity houses.



The prospect of a downward spiral of house prices depresses the value of mortgage-backed securities and therefore the capital and liquidity of financial institutions. Experts say that an additional 10% to 15% decline in house prices is needed to get back to the prebubble level. That decline would double the number of homes with negative equity, raising the total to 40% of all homes with mortgages. The mortgages of five million homeowners would then exceed the value of their homes by 30% or more, which could prompt millions of defaults.



The process of default and foreclosure leading to price declines and further defaults could take house prices far below the long-term sustainable level. But even when prices seem low, prospective buyers will delay buying as long as they expect prices will continue to fall.
The financial rescue plan would bring back the confidence needed to revive the financial system only if the Treasury's asset purchases could eliminate the current impaired securities now held by the financial institutions, and if the remaining securities could be counted on to remain healthy. The legislation will do neither"

Barney Frank doesn't remember his own lies about housing industry

Liberalism is a Mental Disorder: Savage Solutions

I heard a great piece on the radio yesterday that had Barney Frank talking out of both sides of his mouth.  I know hearing him talk out of both sides of his mouth  will come as no surprise but it did reveal a monumental flip flop. 
It was on the Michel Savage Show. http://www.michaelsavage.wnd.com/
They  played his comments during the housing boom and then played some of his more recent comments regarding who was at fault for the current collapse of housing. 

It was just like clock work with him first saying that there was little risk of major losses in real estate and that he would continue to push for more and more home ownership through programs and policy.  He was really a major player in the attempt to push home ownership in the United States over 70%.  For years he would push his agenda and what he thought that it was best for the government to insure more loans on more and more borrowers with less and less resources with less strict rules on qualification standards.

Now he is say that he never thought promoting home ownership was a good idea.  He went on to say that he was totally against any home affordability programs and that the government should have been involved in creating affordable rental property for lower income citizens. 

I was a complete 180 degree turn around from what his original position was a few years ago.  If he would have said after seeing what happened recently I have changed my position I could accept his flip flop.  However, trying to lie about it, or having that bad of a memory that you can remember what your own policies are then I think you should not be in congress decided the fate of millions of Americans.

The Enemy Within: Saving America from the Liberal Assault on Our Churches, Schools, and Military

why is he reading bios?

Why is the president elect on television reading bios of his advisers and economic recovery team.? He is obviously not well versed in speaking about the economy or government policy on economics. I wonder if the media with dog him as much for is slips of the tongues and non-elegant delivery as they have other presidents. I doubt it. He is a great speaker when he has to talk about change without substance but when he is trying to deliver a podium press conference he has difficulty not unlike president Bush. He says we need a "big" stimulus package to "jolt" the economy back into shape. Please let him take the next 8 weeks to enroll in a crash course on economics at the University of Chicago so he can at least give a press conference where he doesn't look like a deer in the headlights. He doesn't get it and this is the second time he has given a press conference regarding the economy and he has not instilled any confidence in me. He has the standard answer that he is not going to discuss numbers right now and it sounds like he is totally clueless. I feel uncomfortable just listening to him try and find the words to answer questions. The press will led it slide though, just as they let him slide into the presidency with out having any idea of what his "plan for change" actually entailed. It is obvious we are living in an era where the media has become so filled with agenda pushing reporters claiming to be journalists (which they are nothing of the sort) can actually influence public policy and influence our national elections. It is disgusting to see how people have gone from being investigative and truth seeking to promoters for candidates. However, it is not surprising to me to see citizens just go along with the media's agenda because it is easier for them to not think about what they are being fed. Americans today would much rather have a general idea that tells them help and hope are coming soon, don't ask questions, just trust us because we know what is best for you.

Trust an Analyst? Think twice, check the date on this one!!!

You can not trust analyst getting the most face time. I think going on TV must do something to someones brain or the networks like to choose people who have issues with their intelligence before they go on TV. Eventually Bove will be right if he keeps calling for the Bottom and to buy banks. He has been spouting off about how great the deals are for banks since 2007. This article was printed in March 2008. Evidently, he didn't see the meltdown of July and October on the horizon. Shut up people!!!! Hubris and need for attention loses money for everyone. Bove says financial crisis over, buy banks Bear Stearns collapse was trigger for U.S. authorities to take drastic action By Alistair Barr & Riley McDermid, MarketWatch Last update: 1:37 p.m. EDT March 20, 2008 SAN FRANCISCO (MarketWatch) -- The financial crisis is over, giving investors a rare chance to buy bank stocks at attractive valuations, Punk Ziegel & Co. analyst Dick Bove said Thursday. During crises, problems reach a crescendo when even the most optimistic market participants become fearful. That usually prompts government and business to join forces on a big solution that may either work or fail, Bove said. Sponsored by: . "The actions taken by the Federal Reserve were innovative, dramatic and, in my view, brilliant because they went right to the problem," Bove wrote in a note to clients. "The actions being taken by the Federal Reserve are being mirrored by the Treasury, which now has finally grasped the scope of the problem." Interest rate reductions and steps to inject more cash directly into the banking system will help banks generate more profit. While most market participants are still worrying about write-downs and falling home prices, investors can now buy bank stocks at their cheapest levels in almost two decades, Bove said. "The last time an opportunity of this nature existed to buy bank stocks this cheap was in 1990," the analyst wrote. "The next time will be in 20 years. This is a once in a generation opportunity." Bove's advice stands in contrast to that of strategists at Citigroup Inc. (C: Citigroup, Inc C 17.66, -0.96, -5.2%) , who advised clients Wednesday to avoid leveraged financial-services company stocks because the "Great Unwind" has begun. See full story. Barclays Capital sounded more hopeful Thursday, echoing some of Bove's thoughts. Liquidity -- the ability to sell assets quickly for a solid price -- and confidence that trading counterparties have enough cash to pay up are crucial to keep financial markets functioning properly, said Larry Kantor, head of research at Barclays Capital. Recent actions by the Fed and others in the U.S. have made it clear that authorities are trying to make sure the supply of both these market ingredients is maintained, he said. "Successful efforts by authorities to restore liquidity and the orderly functioning of financial markets, along with the massive amount of policy stimulus that has already been applied ... are expected to lead to a modest recovery in the U.S. economy in the second half of the year," Kantor said. Still, he was more cautious than Bove on the outlook for banks and brokerage firms in the U.S. "While the measures that policymakers are taking to address the problems of liquidity and counterparty risk will restore some degree of order to financial markets, they are not likely to alleviate ongoing concerns about the size of losses at banks and brokers," Kantor warned. "Losses in securitized subprime mortgages may now be fully recognized, if not accounted for, but credit quality in the remainder of the non-agency mortgage market is still deteriorating," he added. "The quality of credit outside of mortgages -- including leveraged loans and securities backed by commercial real estate -- is just beginning to be tested under less favorable economic conditions and with reduced credit availability."

Bove and Cramer sipping cheap scotch

How many times have you heard Dick Bove saying the banks were not in trouble and the banks are doing well? Everyday maybe for the past 3 months. Hopefully he won't turn out to be another Cramer now that Bank of American has ruined his thesis. If he does a Cramer he will come out and say "oh I meant to say the depositors were OK and their money was safe, not shareholders" Cross you fingers. The world does not need another Jim Cramer. Holy buckets batman never thought anyone could every be as bad as Cramer "one of the greatest minds" (in his own mind of course) on wall street. Looks like all the face time Bove is getting for figuring out the financial system was a mess (oh yeh shocker there) is making him a little dizzy.

The demand is there because home owners are being fleeced...who wants mortgages for .25 cents on dollar

They are are being valued by the larger banks because they have already made money off the mortgage boom and wall street made their money by creating securities with our mortgages and in turn undercutting our assets. They are writing things down 75% but the banks will then be expected to collect 100% on these assets while the people on main street get shafted because the underlying value has been cut in half even though they have not profited like wall street or the banks. The banks and wall street peeps seem to think it is OK to make 3, 4 or 10 times profit from on the backs of American home owners while they get screwed into the ground because of banking greed and government failure to protect home owners from being hurt by the leveraged cdo's. We are all being used as profit centers and they have made money from the the loans on origination, then more profit selling mortgages as securities and now the fire sale buyers will get to make 300 and 400% profits on homeowners again because home owners have to pay the full value of their mortgage regardless of what caused the drop in prices. It is a load of crap and if one other person says people that bought things they couldn't afford are the cause of this problem I will jump through the TV and smack the crap out of them.