Daily Archive: 08/31/2011

Aug 31 2011

FDIC Objects to BoA Bailout & Files Suit

Well, well, this is getting juicy. The FDIC has filed a lawsuit objecting to the $8.5 billion bail out of the Bank of America:

The FDIC, the receiver for failed banks, owns securities covered by the settlement and said it doesn’t have enough information to evaluate the accord, according to a filing yesterday in federal court in Manhattan.

Under the agreement, Bank of America would pay $8.5 billion to resolve claims from investors in Countrywide Financial Corp. mortgage bonds. The settlement was negotiated with a group of institutional investors, including BlackRock Inc. (BLK) and Pacific Investment Management Co. LLC, and would apply to investors outside that group.

Bank of New York Mellon Corp. (BK), the trustee for the mortgage-securitization trusts covered by the agreement, has asked a New York state judge to approve the settlement in November. An investor group is trying to move the case to federal court, which Bank of New York opposes.

Investors that would be bound by the settlement, including American International Group Inc., have criticized the deal and Bank of New York’s role representing investors in the mortgage bonds. New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden have sought to intervene in the case and asked the court to reject it.

The Nevada Attorney General Catherine Cortez Masto has further upped the ante:

The attorney general of Nevada is accusing Bank of America of repeatedly violating a broad loan modification agreement it struck with state officials in October 2008 and is seeking to rip up the deal so that the state can proceed with a suit against the bank over allegations of deceptive lending, marketing and loan servicing practices.

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated an agreement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, to settle lawsuits that accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

I’ll bet you this has Obama and the remaining AG’s panties in a twist, since, according to rumors they were looking to settle this by Labor Day.

Here’s the link to the FDIC’s brief:

FDIC Objection to Bank of America Mortgage Settlement

Aug 31 2011

Punting the Pundits

“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”.

Paul Krugman: Europe’s Crisis of Currencies

John Plender, a columnist at The Financial Times, seems mystified by something that has become obvious lately: Bond vigilantes are only going after countries that no longer have their own currencies.

In a column published on Aug. 16 he writes: “The underlying logic is that no country defaults on its domestic bonds if it retains the right to set the printing presses in motion. Yet it seems counterintuitive that bond markets, with their traditional fear of inflation, should punish a country for not being able to debase its currency.”

Oddly, he seems unaware of the pretty good explanation offered by Paul DeGrauwe, an economist and researcher at the Center for European Policy Studies, which I’ve sketched out a bit further.

New York Times Editorial: The New Resentment of the Poor

In a decade of frenzied tax-cutting for the rich, the Republican Party just happened to lower tax rates for the poor, as well. Now several of the party’s most prominent presidential candidates and lawmakers want to correct that oversight and raise taxes on the poor and the working class, while protecting the rich, of course.

These Republican leaders, who think nothing of widening tax loopholes for corporations and multimillion-dollar estates, are offended by the idea that people making less than $40,000 might benefit from the progressive tax code. They are infuriated by the earned income tax credit (the pride of Ronald Reagan), which has become the biggest and most effective antipoverty program by giving working families thousands of dollars a year in tax refunds. They scoff at continuing President Obama’s payroll tax cut, which is tilted toward low- and middle-income workers and expires in December.

Amy Goodman: Cheney, Rumsfeld and the Dark Art of Propaganda

“When one lies, one should lie big, and stick to it,” wrote Joseph Goebbels, Germany’s Reich minister of propaganda, in 1941. Former Vice President Dick Cheney seems to have taken the famous Nazi’s advice in his new book, “In My Time.” Cheney remains staunch in his convictions on issues from the invasion of Iraq to the use of torture. Telling NBC News in an interview that “there are gonna be heads exploding all over Washington” as a result of the revelations in the book, Cheney’s memoir follows one by his colleague and friend Donald Rumsfeld. As each promotes his own version of history, there are people challenging and confronting them.

Maureen Dowd: What Price Life?

So the big, bad storm huffed and puffed and didn’t blow all the houses in.

Reversing Katrina, on the sixth anniversary of that shameful episode in American history, the response to Irene was more powerful than Irene.

And that made some solipsistic Gothamites who missed their subways and restaurants grouchy. There is no greater abuse to New Yorkers than inconvenience.

Once the storm became “Apocalypse Not,” as The New York Post called it, there were those who accused Mayor Michael Bloomberg and Gov. Chris Christie of New Jersey of overreacting to make up for their infamous underreactions to last year’s Christmas blizzard, when Hizzoner was baking in Bermuda and the Guv was playing at Disney World in Florida with his family.

Eugene Robinson: Jobs: Go Big or Go Home

President Obama’s promised jobs plan needs to be unrealistic and unreasonable, at the very least. If he can crank it all the way up to unimaginable, that would be even better.

This is a moment for the president to suppress his reflex for pre-emptive compromise. The unemployment crisis is so deep and self-perpetuating that only a big, surprising, over-the-top jobs initiative could have real impact. Boldness will serve the nation well-and, coincidentally, boost Obama’s re-election prospects.

The political calculus is pretty simple. If voters base their decision on the state of the economy on Election Day, Obama is in trouble. Even the most optimistic scenarios predict that unemployment will still be above 8 percent next fall. These rosy projections envision month after month of painfully slow growth, the kind that is barely discernible. Pessimists see another dip into recession.

Richard Eskow: Eight Reasons Why Raising the Medicare Age Is the Worst Presidential “Bargain” Since 1854

When it comes to the “Grand Bargain” they’re pushing in Washington, the movie posters for The Fly said it best: Be afraid. Be very afraid.

Other people are using our lives as bargaining chips. Whether it’s the so-called Congressional “Super Committee” or the President’s push for that grandé-sized deal, they want to look “grand” while we get stuck with the “bargain.”

The Capital’s misplaced focus on austerity has led to plenty of bad ideas, but one of the worst is raising the Medicare retirement age to 67. It may be the most destructive deal to come out of Washington since the Kansas-Nebraska Act of 1854. It’s unfair, short-sighted, and will actually cost the economy more money than we’re spending today.

No Democratic President would accept an idea like that, right? Right?

Be afraid. Be very afraid.

Aug 31 2011

“Why is it so hard to see that train a comin’?”

Barry Ritholtz is a contributor to Seeking Alpha and is notable for his insights on the housing market and his book Bailout Nation.

Now this video is quite long, 24 minutes, but it has a lot of insight and if (like me) your cable is still out and you’re desperate for anything slightly resembling TV you might find it interesting.

lambert at Corrente (the blog that everybody hates and nobody reads) was taken by the fashion statement.  I only hope orange becomes the ‘in color’.

Barry Ritholtz: The Effect Of Corruption On The Markets – Aug. 27

I must admit on my system it’s pretty cranky and I had to goose it past the second break.  Try moving the slider forward if you get lost in buffer land, don’t forget to restart the video.

Title quote @ aboot 4:09.  lambert’s fave @ 4:46ish.  Folsom Prison Blues below.

Aug 31 2011

On This Day In History August 31

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

Find the past “On This Day in History” here.

August 31 is the 243rd day of the year (244th in leap years) in the Gregorian calendar. There are 122 days remaining until the end of the year.

I am very hesitant to make the death of Princess Diana the prominent story of the day but her death was a tragedy on so many levels that it is not surprising that the world nearly stood still for 6 days until her funeral. There are many things that we remember exactly where we were and what we were doing when they happened, like 9/11 and, for those of us old enough, JFK’s assassination.

I was living in Paris then not far from the site of the accident. I had been out to dinner that evening with my then ex-husband, Dr. TMC, when we heard the crash, it was that loud, and shortly after the sirens of emergency vehicles. Not unusual in Paris, so, we continued on to our destinations. It wasn’t until very early that I heard that the Princess had died and where. Paris was stunned. The site became a instant memorial.

We all sat glued to the TV for days waiting for the Queen to say something. The Queen badly underestimated the admiration that was held her former daughter-in-law.  The day of her funeral Paris froze, the only time I have ever seen the city this quiet was on 9/11.

After being criticized for failing to satisfactorily match the grief of the British people, the royal family arranged for a state funeral to be held for Diana at Westminster Abbey on September 6. Diana’s coffin was taken from Kensington Palace to the Abbey on a horse-drawn gun carriage, and an estimated one million mourners lined the route. Diana’s sons, William, 15, and Harry, 12, joined their father, Prince Charles; grandfather Prince Philip; and uncle Charles, the Earl of Spencer, to walk the final stretch of the procession with the casket. The only sound was the clatter of the horses’ hooves and the peal of a church bell.

The service, watched by an estimated two billion people worldwide, sacrificed royal pomp for a more human touch. Workers associated with Diana’s various charities represented 500 of the 2,000 people invited to attend the funeral. Elton John, a friend of Diana, lent a popular touch to the ceremony when he sang “Candle in the Wind,” accompanying himself on piano. After the service, Diana’s body was taken by hearse to her family’s ancestral estate near Althorp, north of London. In a private ceremony, she was laid to rest on a tree-shaded island in a small lake, securely beyond the reach of the camera lens.

Since the death of Princess Diana, Althorp, which has been in the Spencer family for over 500 years, is now a popular tourist attraction that offers tours to the general public.

I still light a candle in her memory on this day.

Blessed Be.

Aug 31 2011

Evening Edition

Evening Edition is an Open Thread

From Yahoo News Top Stories

1 China jails more Tibetan monks, US concerned

AFP

2 hrs 40 mins ago

A Chinese court Tuesday sentenced two more Tibetan monks to jail time over a self-immolation protest at their monastery, as the United States voiced concern and urged Beijing to address grievances.

A monk at the flashpoint Kirti monastery in a mainly Tibetan area of Sichuan province named Phuntsog set himself on fire on March 16, the third anniversary of protests in Lhasa and neighboring areas against Chinese rule.

His death triggered a fresh clampdown by authorities nervous about renewed anti-government unrest.

Aug 31 2011

Countdown with Keith Olbermann: Worst Persons 8.29.11

Worst Persons: Obama’s Roberto Arango and Eric Cantor

Find out why the Obama administration is WORSE; Roberto Arango, former leader of the governing PNP in the Puerto Rican Senate, is WORSER; and House Majority Leader Eric Cantor is the WORST PERSON IN THE WORLD for Aug. 29, 2011.

Aug 31 2011

More Bank Fraud

http://www.nytimes.com/2011/08…

http://www.nytimes.com/2011/08…

http://www.workinglife.org/blo…

http://www.workinglife.org/blo…

http://www.nakedcapitalism.com…

http://news.firedoglake.com/20…