Category: Financial Crisis

Advice to Hillary

The latest Silly Season is weighing on me. I had the following dream last night

  Clinton has won the Primary and the General Elections. Between November and her inauguration, she has embarked on a a cross-country trek of ‘town hall’ meetings, ostensibly to thank the voters. For some reason, I am attending one of these meetings (What can I say? I’m a glutton for punishment). Hillary picks me out of the crowd (my Abe Lincoln appearance, probably) and invites me to share the stage and talk with her, tell her what I think she needs to do, where I think the country needs to go. Mentally licking my political chops, I agree.

  You will make history as the first Woman President. That is largely due the change in the way Americans treat gender nowadays and is vindication of the efforts of a lot of women – and a few men – over the decades. It’s not you.

  You should understand that you won the election not so much on your own merits or positions on the issues. You won because enough voters realized that Donald Trump is a 4-door, brass-plated, air-conditioned, turbo-charged, 12-cylinder, 5-speed asshole. They were scared shitless at the thought of what he might do as President. Many – on both sides of the aisle – are also worried about what you will do as President.

  Much has been made of the fact that Trump’s campaign fed on and fed racism, bigotry and xenophobia. But the bottom line on his support and the support for Bernie Sanders should tell you that a great many Americans realize and resent that they have seen their income, privacy, freedom, security and future worsened or destroyed by the policies and practices of the Money Elite, many of whom contribute heavily to your financial undertakings and campaigns – and we both know they expect the favor to be returned. Screw the bastards.. They richly deserve it.

  A woman President was inevitable. It happened to be you. If you want to be a great President, you need to address the real problems of people, both here and abroad. Some of the solutions are not under your direct control but will require action by Congress and the Courts, but even there your leadership could wield influence, as a ‘bully pulpit’ and through appointments in various departments, particularly Justice and Defense.

  Get big money out of politics. Finance elections from tax money and limit spending to some reasonable amount. Ban lobbying. Entirely.. Proposals for government action should never come from corporations with a financial stake in that action. It’s bad enough that when the government puts out an RFP, those who respond will naturally toot their own horn, but we don’t need retired generals/admirals or bankers bullshitting the selection process via the Old Boy Network. Stop it.

  Implement Single Payer Healthcare by simply expanding Medicare to everyone. The procedural and IT infrastructure is already in place and functioning pretty well. At most, it might require an upscale of computer hardware. Healthcare, like education, clean water & waste disposal should be the right of every citizen – and on a not-for-profit basis.

  Stop trying to control the entire world. We are no longer the envy of the world we once were. Instead we are much of the world’s worst nightmare. Our wars, our financing and support for any petty dictator that we approve of, our CIA-led coups in various countries for decades should stop. It is true hypocrisy to criticize and even hate refugees who are are fleeing the hell we created or support. When we destroy Iraq, Syria, Libya, we can’t complain about the consequences. Stop it.

  Stop supporting privatization of things which are inherently public. Prisons and schools and water systems are not being privatized to improve efficiency but to enrich those with friends in power. Stop.

  End the ineffective (though profitable) war on drugs. Just stop it. Legalize and regulate (reasonably) all drugs.Empty and issue a blanket pardon for the thousands of people in prison for posseesing pot. If that’s their only rap sheet, wipe the record clean. And always help them reintegrate into society.

  Instead of prosecuting whistle blowers, prosecute the high-level, wealthy and well-connected criminals. The financiers responsible for the economic meltdown (and who have continued to profit). Politicians for war crimes, torture, the lies that put us in Iraq, the indiscriminate use of drones. Stop it.

  End the militarization of non-Federal law enforcement. All it does is enrich crony capitalists and facilitate an authoritarian mindset among officers who are supposed to be public servants and are increasingly acting as public masters. Stop it.

  End the NSA’s and DOD’s over-the-top spying on innocent people. Put all wiretaps and snooping back to requiring a traditional search warrant – person(s); item to be searched for; reasonable cause – before a judge. And if that overwhelms the judges, it might just indicate too much snooping. You think maybe?

  Note that most of the items involve stopping what we’d doing. It’s enough to make one contemplate the virtues of a government too small to make the mistakes we have inflicted on our people and the world. Unfortunately, the modern world does require Big Government. Stopping the misuse of government power would meet stiff resistance from those who profit from the status quo. But perhaps if we stop wasting time, money and effort on the wrong things, we would be able to spend our time, money and effort on things like improving peoples lives (at home and abroad) and limiting or even reversing Global Warming – for the sake of your new grandchild and and my great-grandchildren.

  You will make history as the first woman President.
  You could make history as a great President.
  Or not.
  It’s up to you.

How economists rode maths to become our era’s astrologers

Alan Levinovitz, Aeon essays,

Since the 2008 financial crisis, colleges and universities have faced increased pressure to identify essential disciplines, and cut the rest. In 2009, Washington State University announced it would eliminate the department of theatre and dance, the department of community and rural sociology, and the German major – the same year that the University of Louisiana at Lafayette ended its philosophy major. In 2012, Emory University in Atlanta did away with the visual arts department and its journalism programme. The cutbacks aren’t restricted to the humanities: in 2011, the state of Texas announced it would eliminate nearly half of its public undergraduate physics programmes. Even when there’s no downsizing, faculty salaries have been frozen and departmental budgets have shrunk. More

So the Greeks are holding a vote tomorrow. Paul Craig Roberts thinks it’s a big deal.

Sunday’s Vote Will Determine Liberty Or Serfdom — Paul Craig Roberts

According to history books, democracy originated in Greece. Of course, historians could be mistaken, but this is the prevailing view among Western populations with enough awareness to be interested to know.

What we are witnessing today, July 2, 2015, is that after 2,500 years in the Western World only the current Greek government is interested in democracy. The Greek government, to the surprise and consternation of every other European government, has called a referendum for the Greek people to decide the fate of Greece. For resorting to democracy, the Greek government has been universally denounced in the Western World.

So much for Western democracy.

The greatest and most successful propaganda scam in history is the one that convinces the world that they are nobody if they are not part of The West, the indispensable peoples, the exceptional peoples. If you are not part of The West you are nobody, nonexistent, a nothing.

This prevailing propaganda might prevail in Greece on Sunday, in which case a fearful and intimidated Greek population might vote against the only government that, instead of accepting a payoff from Greece’s enemies, fought for the welfare of the Greek people.

If the Greeks vote for their oppressors and against their own government, democracy in the EU will cease to exist.

2,500 years ago Greeks saved their independence from the Persian Empire. Sunday’s vote will tell us whether Greeks have again served liberty or whether they have succumbed to Washington’s Empire.

The fate of all Europeans and of Americans themselves will be settled on Sunday.

Zero Hedge: Greeks Split On Greferendum As Credit Suisse Says “No” Vote Defies “Rationality”
Zero Hedge: Massive “No” Demonstration Floods Athens’ Syntagma Square As Tsipras Speaks – Live Webcast
The Automatic Earth: The Troika Turns Europe Into A Warzone
Ian Welsh: How to Create a Viable Ideology

Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’

New York Times, By Michael Corkery & Mary Williams Walsh, June 28

Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial repercussions.

The governor, Alejandro García Padilla, and senior members of his staff said in an interview last week that they would probably seek significant concessions from as many as all of the island’s creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment.

“The debt is not payable,” Mr. García Padilla said. “There is no other option. I would love to have an easier option. This is not politics, this is math.”

It is a startling admission from the governor of an island of 3.6 million people, which has piled on more municipal bond debt per capita than any American state.

Greece debt crisis: ECB ‘to end’ bank emergency lending

The European Central Bank is expected to end emergency lending to Greece’s banks on Sunday, the BBC understands.

BBC, June 28

Well-placed sources told BBC economics editor Robert Peston a decision to end the Emergency Liquidity Assistance (ELA) would be made by the ECB’s governing council later on Sunday.

Greek banks depend on ELA funds daily.

Greek Finance Minister Yanis Varoufakis said his government would consider overnight what measures to take “to minimise the burden on our people”.

Cutting the ECB lifeline could push Greece out of the euro.

Such an ECB cut would mean “Europe has failed”, Mr Varoufakis told the BBC’s World this Weekend.

Via Naked Capitalism: BBC: ECB to Stop Emergency Support of Greek Banks on Monday; Bank Holiday Likely

The Guardian: Greek crisis: Banks shut for a week as capital controls imposed – live updates

Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running



EU issues final warning to Greece as last-ditch talks achieve nothing

The Greek interior ministry has ordered governors and mayors to transfer all cash reserves to the central bank as bankruptcy closes in.

The Telegraph, By Ambrose Evans-Pritchard, June 11

The European Union has warned Greece in the clearest language to date that its patience is exhausted and the country will be abandoned to its fate unless it accepts creditor demands in short order.

Donald Tusk, the EU’s president, said the radical-Left Syriza government must stop spinning out the negotiations and face hard choices before Greece spirals irrevocably into default.

“There is no more time for gambling. The day is coming, I’m afraid, that someone says that the game is over,” he said.

The blunt language came as the International Monetary Fund pulled its officials out of the talks, citing a failure to break the deadlock after four months of wrangling. “There are major differences between us in most key areas. There has been no progress in narrowing these differences,” it said.

Why Syriza failed; Why Europe may fail with it

Hullabaloo / Down With Tyranny, By Gaius Publius, May 15

I haven’t written much about Greece lately, but there’s quite a story going on. It’s not that difficult to follow, but you have to be careful whom you read. Conventional wisdom (backed by corporate, pro-austerity media outlets here and abroad) says it’s a morality tale — bad Greeks who went into too much debt and now they can’t pay up. Good German bankers want their money and are reluctant to forgive bad deeds because it might encourage other debt-owing entities to seek debt relief as well. They’re calling that “moral hazard,” fear that a bailout might encourage more bad behavior. There must be consequences, or so they think.

The bottom line of those who tell this tale — Greece provides a place for lovers of austerity (like cuts to social programs) to point and sneer. Their refrain, which I’m sure you’ve heard, is “We don’t want to end up like Greece, do we?”

The reality of the Greek situation is different — not hard to understand, just different.
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Double Standard Test Scores

Cited here is a commentary by Bill Black on the recent conviction of Georgia school teachers and principals for fraud in reporting student test scores. Professor Black makes a very interesting comparison between this situation, the media coverage and reaction to it, versus the unprosecuted crimes of Wall Street bankers and banks.

http://www.nakedcapitalism.com/2015/04/bill-black-send-teachers-prison-rigging-numbers-not-bankers.html
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US sets deadline over financial crisis charges

FT, By Gina Chon, February 17

Washington – US prosecutors have been given a 90-day deadline to assess whether they have enough evidence to bring cases against individuals linked to the 2008 financial crisis, as attorney-general Eric Holder fine-tunes his legacy before he steps down later this year.

Mr Holder, the top law enforcement official in the US, disclosed the deadline on Tuesday and said that prosecutors had been asked to evaluate whether they can bring criminal or civil cases against individuals.

JPMorgan Chase, Bank of America, Citigroup and other companies have agreed to pay billions of dollars in fines for mis-selling mortgage securities linked to the crisis. But some lawmakers and consumer groups have criticised the Department of Justice for not holding high-level individuals accountable.

“To the extent that individuals haven’t been prosecuted, people should understand it’s not for lack of trying,” Mr Holder said on Tuesday at the National Press Club in answer to a question about the DoJ’s response to the crisis.

whooohhh, doggie…

Huge Madrid march in support of anti-austerity party

Tens of thousands fill Spanish capital in support of Podemos, as anti-austerity message surges in polls.

Al Jazeera, January 31

Tens of thousands of people have marched in Madrid on Saturday in support of the anti-austerity party Podemos, whose surging popularity and policies have drawn comparisons with Syriza, Greece’s new leaders.

Protesters chanted “Yes we can!” as they made their way from Madrid city hall to the central Puerta del Sol square. Podemos and its anti-austerity message have been surging in polls ahead of local, regional and national elections this year. Podemos (“We Can”) was formed just a year ago but gained international attention after winning five seats in elections for the European Parliament last May.

Antonia Fernandez, a 69-year-old pensioner from Madrid, came to the demonstration with her family. Fernandez, who lives with her husband on a combined pension worth about $790 a month, said she used to vote for Spain’s Socialist party but had lost faith in it because of its handling of the economic crisis and its austerity policies. “People are fed up with the political class,” Fernandez said. “If we want to have a future, we need jobs,” she said.

Like Syriza, Podemos has found popular support by targeting corruption and rejecting a European austerity program aimed at lifting struggling economies out of a deep crisis. After his Syriza party swept to victory in a snap election on Jan. 25, Alexis Tsipras promised that five years of austerity, “humiliation and suffering” imposed on Greece by international creditors were over.

LEAKED: Secret Negotiations to Let Big Brother Go Global

The ugly ramifications of the Trade in Services Act (TiSA)

Wolf Street, By Don Quijones, December 25

Much has been written, at least in the alternative media, about the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), two multilateral trade treaties being negotiated between the representatives of dozens of national governments and armies of corporate lawyers and lobbyists (on which you can read more here, here and here). However, much less is known about the decidedly more secretive Trade in Services Act (TiSA), which involves more countries than either of the other two.

At least until now, that is. Thanks to a leaked document jointly published by the Associated Whistleblowing Press and Filtrala, the potential ramifications of the treaty being hashed out behind hermetically sealed doors in Geneva are finally seeping out into the public arena.
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US Federal Reserve Initiates Investigation of New York Federal Reserve

Value Walk, By Mark Melin, November 21

After press reports reveal more than a cozy relationship, but sharing of confidential documents, investigation called for on eve of Senate testimony on the issue

After a withering expose in The New York Times that showed bank regulators at the New York Federal Reserve sharing confidential information with Goldman Sachs and earlier disclosure from secret tapes inside the New York Fed showed regulators providing the large Wall Street bank kid glove treatment, comes a two-pronged investigation and a call for structural changes.

In a letter to the Inspector General for the Federal Reserve System and the Consumer Financial Protection Bureau Thursday, Scott Alvarez, general counsel at the Federal Reserve Board of Governors, and Michael Gibson, director of banking supervision, both with primary offices in Washington DC, are requesting an investigation into the operations at the New York Federal Reserve and other locations.

“After consultation with the Chair and other Board members, we respectfully request that the Office of the Inspector General conduct a review of… the manner in which the Federal Reserve System conducts examinations of large banking organizations (with over $50 billion in total assets),” the letter requested. The vast majority of such banks are located in New York City.

The Washington DC-based inspector-general is being asked to examine if there are “adequate methods for decision makers to obtain all the necessary information to make supervisory assessments” and if there are channels, both within and outside the immediate chain of command, for decision-makers to be aware of divergent views about material issues regarding large banking organizations addressed by the members of the dedicated examination team?

New York Times: New Scrutiny of Goldman’s Ties to the New York Fed After a Leak
ProPublica: Federal Reserve Announces Sweeping Review of Its Big Bank Oversight

MERS Loses Major Case in Pennsylvania

Naked Capitalism, By Yves Smith, July 7

The mortgage beat has been quiet of late, but I must confess to being remiss in writing up two recent losses suffered by MERS. One of the big reasons that MERS has taken comparatively few losses in court is that it has often settled cases where it looked like it might lose.

Today, we’ll deal with the higher-profile one, that of a filing by the Montgomery County recorder in Pennsylvania, Nancy Becker, for herself and on behalf of all county recorders, against MERS, in Federal court. The basis of the suit was that MERS had violated a state law that required that conveyances of real property be recorded in county recorder of deeds’ offices. Becker argues, in effect, that the mortgage (the lien against the property) and the note (the borrower IOU) were inseparable, and that trying to treat the note as separate and exempt from the recording requirement was a “willful and negligent” violation of statute. She sought, among other things, that MERS be required to record mortgage transfers and that it be found to have engaged in unjust enrichment.

MERS has won suits filed by recorders in other states, but the flip side is that MERS suffered a major loss in Oregon, which has a state recording statute. more

Gretchen Morgenson’s 2102 background piece: Mortgage Registry Muddles Foreclosures

The nagging fear that QE itself may be causing deflation

The Telegraph, By Ambrose Evans-Pritchard, June 4

The way we are going, the whole world will end up with zero interest rates or some variant of quantitative easing before long. Such is the overwhelming power of deflation in countries with burst credit bubbles. Such too is the implication of a global savings rate that has spiralled to an all-time high of 25pc of GDP, starving the world of demand.
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U.S. mortgage collectors gag homeowners in loan deals

(Reuters)- Joseph and Neidin Henard thought they had finally fixed the mortgage that was crushing them.

In January, the couple reached a settlement with every company that had a stake in the mortgage on their house in Santa Cruz, California, a deal that would have slashed their monthly payment by almost 40 percent to $3,337. It was the end of a process that started with their defaulting in 2009.

But when they saw the final paperwork for their settlement, they found that Ocwen Financial Corp, the company that collected and processed their mortgage payments, had added an extra clause: they could not say or print or post anything negative about Ocwen, ever.