12/10/2010 archive

The Obama Administration’s Financial-Fraud Stunt Backfires

The press shows the feds’ numbers are phony and asks where the whales are.

By Ryan Chittum, The Columbia Journalism Review

December 9, 2010 10:20 AM

Boy, the Obama administration’s slapdash PR effort to show it’s cracking down on financial fraud sure looks to be failing-and getting some serious blowback.

Jesse Eisinger has a column in today’s New York Times noting that the feds’ insider-trading investigation, while important, misses the bigger issue: prosecuting those who caused the crisis.

The New York Times’s Andrew Ross Sorkin called out Eric Holder’s Justice Department on Monday, noting that the 343 criminal defendants it said it’s prosecuting in a sweep it lamely calls Operation Broken Trust are small fry. No executive from the major corporations (like, oh, AIG, Lehman Brothers, Washington Mutual, Countrywide, Ameriquest, etc.) has yet been charged.

…

I suppose if there’s one good thing that comes out of this headslapper, it’s that maybe the Obama administration’s laughable attempt to show it’s tough on financial fraud will cause enough of a backlash in the press that it forces them to actually do something about the people who took down the financial system in order to make tens or hundreds of millions of dollars.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

E. J. Dionne: Who Is Sanctimonious?

Washington – What does President Obama think of those who fought and bled to pass his bills in Congress (in some cases losing in this year’s election for their pains) while also defending him against wild charges from the right wing? Are they among the liberals he described as “sanctimonious” who long for the “satisfaction of having a purist position and no victories for the American people”?

Obama’s comments make you wonder: Who does he think he can count on when conservatives try to repeal the health care law, force cuts in programs he supports, investigate his administration down to the last pencil, and continue to denounce him as an un-American socialist?

A senior Obama lieutenant insisted that the president wasn’t attacking liberals. He was responding only to those condemning him as a “sellout” for a tax deal that achieves many progressive goals, at the cost of extending tax cuts for the wealthy and egregiously conceding billions to very rich people who inherit large estates.

Yet simultaneously, the White House was also sending out signals that it was consciously casting the president as a centrist problem-solver in a new iteration of Bill Clinton’s old “triangulation” strategy.

John Nichols: It’s the Estate Tax Exemption, Stupid

House Speaker Nancy Pelosi has been given a charge from the chamber’s Democratic caucus to negotiate a better tax deal than President Obama got from Senate Republicans.

And Pelosi says she will do just that.

But what’s her “ask”? What’s her credible — and doable — demand?

Pelosi should pull no punches. But, If we assume she cannot get the Republicans or Obama to abandon the absurdly uneven trade-off that defines the deal — a two-year extension of tax cuts for billionaires in return for a one-year extension of basic benefits for the unemployed — then she has to look elsewhere.

For plenty of practical and political reasons, Pelosi can and should start the pushback by focusing on the side deal to renew the estate tax with broad exemptions for millionaires — up to $5 milion for individuals, up to $10 million for couples — and a top rate of 35 percent for the coming two years.

Pelosi has already pointed to the estate-tax agreement as a bone of contention for House Democrats.

“We believe the estate tax in the bill is a bridge too far,” the Speaker has said.

Beverly Bell and Tory Field: “Miami Rice”: The Business of Disaster in Haiti

“We were already in a black misery after the earthquake of January 12. But the rice they’re dumping on us, it’s competing with ours and soon we’re going to fall in a deep hole,” said Jonas Deronzil, who has farmed rice and corn in Haiti’s fertile Artibonite Valley since 1974. “When they don’t give it to us anymore, are we all going to die?”

Deronzil explained this in April inside a cinder-block warehouse, where small farmers’ entire spring rice harvest had sat in burlap sacks since March, unsold, because of USAID’s dumping of U.S. agribusiness-produced, taxpayer-subsidized rice. The U.S. government and agricultural corporations, which have been undermining Haitian peasant agriculture for three decades, today threaten higher levels of unemployment for farmers and an aggravated food crisis among the hemisphere’s hungriest population.

Assange may be released

Peter Wilson, Europe correspondent

The Australian,  December 09, 2010 12:00AM

JULIAN Assange has received a glimmer of hope in his battle against sexual abuse allegations.

A British judge says the WikiLeaks founder may be released from jail next week unless Swedish prosecutors produce evidence in London to back up their allegations.

Senior district judge Howard Riddle said Swedish authorities would need to show some convincing evidence if they wanted to oppose bail for the 39-year-old Australian when he appears in court next Tuesday to oppose extradition to Sweden.

Mr Assange was yesterday refused bail and sent to Wandsworth prison when he appeared before Judge Riddle to answer a Swedish extradition application.

The internet activist’s lawyers say if he stays in jail, it will be much harder for them to organise his defence against the Swedish sex charges and to stave off what they believe is a US government plan to charge him with espionage-related crimes over the publication of thousands of secret American cables.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

December 10 is the 344th day of the year (345th in leap years) in the Gregorian calendar. There are 21 days remaining until the end of the year.

On this day in 1901, the first Nobel Prizes are awarded in Stockholm, Sweden, in the fields of physics, chemistry, medicine, literature, and peace. The ceremony came on the fifth anniversary of the death of Alfred Nobel, the Swedish inventor of dynamite and other high explosives. In his will, Nobel directed that the bulk of his vast fortune be placed in a fund in which the interest would be “annually distributed in the form of prizes to those who, during the preceding year, shall have conferred the greatest benefit on mankind.” Although Nobel offered no public reason for his creation of the prizes, it is widely believed that he did so out of moral regret over the increasingly lethal uses of his inventions in war.

History

Alfred Nobel was born on 21 October 1833 in Stockholm, Sweden, into a family of engineers. He was a chemist, engineer, and inventor. In 1895 Nobel purchased the Bofors iron and steel mill, which he converted into a major armaments manufacturer. Nobel also invented ballistite, a precursor to many smokeless military explosives, especially cordite, the main British smokeless powder. Nobel was even involved in a patent infringement lawsuit over cordite. Nobel amassed a fortune during his lifetime, most of it from his 355 inventions, of which dynamite is the most famous. In 1888, Alfred had the unpleasant surprise of reading his own obituary, titled ‘The merchant of death is dead’, in a French newspaper. As it was Alfred’s brother Ludvig who had died, the obituary was eight years premature. Alfred was disappointed with what he read and concerned with how he would be remembered. This inspired him to change his will. On 10 December 1896 Alfred Nobel died in his villa in San Remo, Italy, at the age of 63 from a cerebral haemorrhage.

To the wide-spread surprise, Nobel’s last will requested that his fortune be used to create a series of prizes for those who confer the “greatest benefit on mankind” in physics, chemistry, peace, physiology or medicine, and literature. Nobel wrote several wills during his lifetime. The last was written over a year before he died, signed at the Swedish-Norwegian Club in Paris on 27 November 1895. Nobel bequeathed 94% of his total assets, 31 million SEK (c. US$186 million in 2008), to establish the five Nobel Prizes. Because of the level of scepticism surrounding the will, it was not until 26 April 1897 that it was approved by the Storting in Norway. The executors of Nobel’s will, Ragnar Sohlman and Rudolf Lilljequist, formed the Nobel Foundation to take care of Nobel’s fortune and organise the prizes.

Nobel’s instructions named a Norwegian Nobel Committee to award the Peace Prize, the members of whom were appointed shortly after the will was approved in April 1897. Soon thereafter, the other prize-awarding organisations were established: the Karolinska Institutet on 7 June, the Swedish Academy on 9 June, and the Royal Swedish Academy of Sciences on 11 June. The Nobel Foundation reached an agreement on guidelines for how the prizes should be awarded, and in 1900, the Nobel Foundation’s newly-created statutes were promulgated by King Oscar II. In 1905, the Union between Sweden and Norway was dissolved. Thereafter Norway’s Nobel Committee remained responsible for awarding the Nobel Peace Prize and the Swedish institutions retained responsibility for the other prizes.

Goldman has an unexpected ally in court: federal prosecutors

The banking giant, which has been under relentless scrutiny for its role in the financial crisis, relies on the U.S. government to protect its trade secrets in a trial of a former worker accused of stealing valuable computer code.

By Nathaniel Popper, Los Angeles Times

Reporting from New York – Goldman Sachs, the most powerful firm on Wall Street, makes an unlikely victim.

That, however, is the role that the bank has played over the last two weeks in a Manhattan courtroom, where prosecutors have argued that Sergei Aleynikov, a skinny, bespectacled former computer programmer at Goldman, stole valuable computer code from the bank before moving to a start-up firm that was trying to build its own trading operations.

Although the code in question was a mere 32 megabytes – less than a 10th of what fits on a data CD – Goldman executives have said it was a central cog in their high-frequency trading operations, a lucrative division at one of the most profitable companies in the world.

From Firedog Lake of course since they’re the ones giving the best coverage.

• No New NAFTA: Tell Congress to Stop NAFTA-Style Korea Free Trade
  
  By: Michael Whitney Tuesday December 7, 2010 11:30 am

• Baucus Balks at Korea Trade Deal; Claim of Job Growth Questioned
  
  By: David Dayen Wednesday December 8, 2010 12:45 pm

• BREAKING: AFL-CIO Head Richard Trumka Releases Statement Opposing Obama’s NAFTA-Style Korea Free Trade Deal
  
  By: Jane Hamsher Thursday December 9, 2010 9:41 am

• United Steelworkers Oppose Passage of Obama’s NAFTA-Style Free Trade Agreement
  
  By: Jane Hamsher Thursday December 9, 2010 10:11 am

• Statement of Communication Workers Opposing Obama’s NAFTA-Style Free Trade Agreement
  
  By: Jane Hamsher Thursday December 9, 2010 10:15 am

• UAW Backed NAFTA-Style Korea Free Trade to "Reward the Administration for Good Behavior"
  
  By: Michael Whitney Thursday December 9, 2010 12:51 pm

• Unions Out in Force Against NAFTA-Style Korea Free Trade
  
  By: Michael Whitney Thursday December 9, 2010 1:36 pm

You could look it up.

I spotted this when I was feeling much more charitable than I am at the moment so calibrate your ourage meter.

Krugman: White House Blowing the Stimulus, Again

By: Scarecrow, Thursday December 9, 2010 8:08 am

The White House is moving heaven and earth, and enlisting everyone from Vice President Biden to the Mayor of Gullible (remember this next time the White House says they can’t get something the public actually supports, because they can’t get the votes) to convince Congressional Democrats the nation’s economic survival depends on passing the Obama-McConnell Tax Gifts for the Rich Act of 2010.

(And if you don’t think this is a massive gift to the rich, check out this graphic from David Dayen. Those big black dots will be Obama’s record.)

But instead of focusing on what the bill actually is, a massive give away to the wealthiest people in America combined with an openly admitted threat to Social Security funding, the White House has pulled out its biggest economic guns to convince skeptics that it’s the economic stimulus from the various measures that are absolutely essential. If so, then the question becomes, will the stimulus measures do what the White House claims?

…

Yesterday, Obama’s chief economic adviser, Larry Summers reversed a year of White House assurances to tell us the economy was at risk of a double-dip recession which would become more likely if Congress failed to pass this package. This is the first time the White House has said this, and since the Republicans are likely to increase the risks with their promised punitive spending cuts, we need to take this seriously.

It behooves the White House to do more than hand Congress a take-it-or-leave it package that’s poorly designed and misguided, based again on a flawed analysis of where we are and what’s needed. For once, this White House should be talking to people who got it right instead of continually listening to those who failed. And until they do, no Democrat has any business voting for this mess.

Just for reference, US Median Household Income is $44,389.  Median means 50% make more than that, and 50% make less.

Who Loses Under Obama’s GOP Tax Compromise? The Working Poor

By CHARLES WALLACE, AOL Daily Finance

Posted 6:30 AM 12/09/10

“Single working people with earnings below $20,000 and married couples with earnings below $40,000 are worse off under the payroll tax cut proposals in the compromise between the president and the Republicans,” explains Bob Williams, a senior fellow at the Washington, D.C.-based Tax Policy Center.

Here’s why: The Obama proposal substitutes a Social Security payroll tax cut for the Making Work Pay credit, which was targeted to do the most good for low-income families. Under current rules, the working poor receive $400 when they earn at least $6,452 a year through the Making Work Pay credit. Married couples with earnings above $12,900 get $800 under the program.

The compromise cuts the Social Security payroll tax from 6.2% to 4.2%, so a couple wold have to earn $40,000 to get the same $800 tax benefit. Every working-class couple earning less than that will get less than $800, meaning they lose money under the Obama proposal.

…

The rich, however, do really well. A worker earning $106,800, the maximum amount of income subject to Social Security tax, stands to save $2,136 in payroll taxes. A married couple with both spouses making over $100,000 will actually save $4,272.

Obama had been saying for months that he wanted to increase the tax burden on the wealthy while keeping it the same for the middle class. But the new plan actually increases the tax burden on the lowest-income working families. “If you are worried about who needs the money and are trying to help people, targeting the cuts to the wealthy who don’t need it seems the wrong way to go,” Williams says.

So Barack Hussein Obama’s “Tax Compromise” is actually a TAX HIKE for almost 50% of Americans.

Way to sell-out a campaign promise Mr. “I’ll never raise taxes on those earning less that $250,000”.

And just to benefit the richest 2%.

What a disgusting liar.

But I certainly did not miss this

I’ll cut right to the chase.  What this means is that if you have financed or re-financed a home since 1999, you no longer have clear title to your property and nobody else does either.

If you own a Mortgage Backed Security it’s a worthless scrap of paper.

Municipal, County, and State Governments have been defrauded of $10s of Billions of legally obligated filing fees by the banksters.

Anatomy of Mortgage Fraud: MERS’s Smoking Gun, Part I

L. Randall Wray, The Huffingtom Post

December 9, 2010 06:04 PM

I think we have finally found the smoking gun. An interested reader alerted me to MERS’s instruction manual, “MERS Recommended Foreclosure Procedures — State by State”, originally written in 1999, updated in 2002 and available on MERS’s website (accessed by clicking on: Recommended Foreclosure Procedures).

The first thing to note is the date. Folks, this strategy was formulated in 1999. The second thing to note is these documents demonstrate that failure to properly endorse the notes and transfer them to the REMIC trustee was not an occasional mistake, but rather was MERS’s business model. As we will see, MERS planned from the get-go to defraud the counties, and the IRS, and the homeowners, and the buyers of the mortgage-backed securities.
…
The foreclosure manual establishes three key points that we have long suspected:

1. Mortgage notes were not typically transferred to the trusts, as required by law. Further, there is no clear “chain of title” for these notes–which are actually presented for endorsement only on foreclosure (if then).
2. MERS recommended that mortgage servicers retain the notes.
3. MERS “deputized” employees of the servicers, pretending that these became MERS employees. This allowed the fiction that MERS had the notes so that it could foreclose.

…
In the document, MERS claims that its recommended procedures are “customary”. In fact, there are several hundred years of “custom” that requires endorsement of notes at the time of transfer, with a clear chain of title to ensure that anyone who claims to be a creditor, and who tries to seize someone’s home, has clear documentary proof of entitlement. What MERS proposes in this document is to break the chain of title, to eliminate the protection that debtors need to prevent mortgage servicers and MERS from illegally stealing their property through the use of robo-signers and the manufacture of fake documents. In other words, both law and custom were formulated to prevent the sort of foreclosure fraud that has become normal business practice — what the MERS document calls “customary”.

(I)f the servicers hold the notes, why on earth can’t they find them–why do they need to file “lost note affidavits”? In a word, fraud. If they now produce the notes, it will be clear that they were not properly endorsed each time the mortgages were transferred. And they were never held by the REMIC trusts. As I will explain, that means mortgage backed securities are fraudulent and the banks are on the hook for hundreds of billions of dollars. And that the banks holding the mortgages cannot legally foreclose. That is why they are destroying the documents, and hiring robo-signers to forge new ones.

Smoking Gun?  More like a Smoking Cannon.  Every one of the Too Big To Fail Banks is insolvent.