January 2012 archive

Title Law goes back over 5000 years and is literally the foundation of Law and the concept of Property and Ownership itself.  It’s highly ironic that Banksters and their excuse making apologists are so willing to dispense with it, otherwise how do you assert any privilege over those Communist Occupier types?

I mean, if anyone can forge a scrap of paper and foreclose on you…

Robosigning = Smoking Gun

By: Cynthia Kouril, Firedog Lake

Tuesday January 31, 2012 9:53 am

There are a few voices emerging suggesting that the current iteration of the %) AG settlement is somehow wonderful, or at least OK, because it only immunizes robosigning. “Only”, as if robosigning was some benign peccadillo, instead of a massive conspiracy to commit forgery and perjury that is systematically driving our population into homelessness AND continuing to drive down the value of our homes.

Peter Henning writing for NYTimes Dealbook thinks… that most of the bad guys will get off for lack of evidence.

…

(T)here certainly is a smoking gun, thousands of them, actually. They are the robo signed documents forged after the fact to try to create the false impression that the mortgages and notes were transferred to MERS and into REMICs in a timely fashion. Add to that the formation documents for MERS and the Pooling and Servicing agreements for the REMICs and you have a case that is VERY easy for a judge and jury to understand.

Even the normally laser visioned Matt Taibbi doesn’t get it. He thinks that robosigning immunization will only hurt the homeowners trying to stave off foreclosure from an entity that has no standing to foreclose, as if that wasn’t enough all by itself.

…

What both Henning and Taibbi are missing is that the easiest way for the pension funds and the hedge funds to win in court is to have a narrative that the jury can understand. Critical to that narrative is that the robosigned documents are of no legal effect; just like a forged dollar bill is of no legal effect and has no value once you realize that it’s counterfeit.

If this horrendous settlement is allowed to go through and sprinkle magic pixie dust on these forgeries and perjuries and by some alchemy that eludes me turn them into documents that can be used to “prove” what’s contained in them (thereby turning everything I ever knew about the rules of evidence inside out) then the pension funds and other purchasers of MBS will not be able to prove the truth, namely, that the REMICs they bought were empty or largely empty and that they are entitle to rescind that purchase.

If robosigning is immunized you screw millions of homeowners, but you also screw the very banks and hedge funds and pension plans that the 1% are so interested in protecting.

The deal sabotages everything because the robosigning is the smoking gun. No one resorts to creating fabricated documents unless they are desperate and know they have no other hope of winning. It’s the legal strategy equivalent of a Hail Mary Pass. Had the robosigning never been exposed, they might have gotten away with winning through perjury, but now that it is exposed, the idea of immunizing it is preposterous.

Each and every robo signed document is a crime.  A FORGERY!  There is no need to investigate, the document is right there in front of you.

Any Sort of Robo Signing Immunity Is a National Tragedy

By: Cynthia Kouril, Firedog Lake

Tuesday January 31, 2012 3:21 am

I am a HUGE fan of Matt Taibbi’s. HUGE. So it pains me to write this:

WTF is he calling giving a pass to massive -and easy to prove- fraud like robosiging a/k/a FORGERY, a “Victory” for the public? I think the man has lost his mind.

Look, the securitization frauds are important, no doubt about it. However, the entities harmed by the securitizations, other banks, big pension funds, etc. all have armies of very competent lawyers to protect them in civil suits. In contrast, homeowners trying to stop a bank that doesn’t even have the paper work to show it has a right to throw them out of their houses have very few resources with which to fight.  They also often face state court judges who are disinclined to believe the homeowners. Without both civil AND CRIMINAL cases proving the robo signing, they will continue to be swindled out of their homes.

It’s not like robo signing is a thing of the past, it’s still going on. I’ve seen examples of robo signing executed within the last few months. The document mills have not closed down; what do you think all those people do all day long?

If Schneiderman signs on to this then the question of who rolled whom with this second mortgage task force is answered and all Americans will know that the last roadblock to banksters getting away with the biggest heist in history has been removed. We will also know that foreclosures will take off at breakneck speed and more homeowners than you can imagine, and their children, will be homeless.

That’s not my idea of a victory for anyone, except the 1%. No, Matt, immunity for robosigning will be a Tragedy For The Public.

Not even for the 1% Cynthia.  That’s my Rolex motherfucker.  Hand it over.

“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”.

Maira Sutton and Parker Higgins: We Have Every Right to Be Furious About ACTA

If there’s one thing that encapsulates what’s wrong with the way government functions today, ACTA is it. You wouldn’t know it from the name, but the Anti-Counterfeiting Trade Agreement is a plurilateral agreement designed to broaden and extend existing intellectual property (IP) enforcement laws to the Internet. While it was only negotiated between a few countries,1 it has global consequences. First because it will create new rules for the Internet, and second, because its standards will be applied to other countries through the U.S.’s annual Special 301 process. Negotiated in secret, ACTA bypassed checks and balances of existing international IP norm-setting bodies, without any meaningful input from national parliaments, policymakers, or their citizens. Worse still, the agreement creates a new global institution, an “ACTA Committee” to oversee its implementation and interpretation that will be made up of unelected members with no legal obligation to be transparent in their proceedings. Both in substance and in process, ACTA embodies an outdated top-down, arbitrary approach to government that is out of step with modern notions of participatory democracy.

The EU and 22 of its 27 member states signed ACTA yesterday in Tokyo. This news is neither momentous nor surprising. This is but the latest step in more than three years of non-transparent negotiations. In December, the Council of the European Union-one of the European Union’s two legislative bodies, composed of executives from the 27 EU member states-adopted ACTA during a completely unrelated meeting on agriculture and fisheries. Of course, this is not the end of the story in the EU. For ACTA to be adopted as EU law, the European Parliament has to vote on whether to accept or reject it.

Jim Hightower: Buying Our Future

Sheldon Adelson, a Las Vegas-based global casino baron who has long been a major funder of far-right-wing causes, is Newt Gingrich’s very special political pal.

Already, four of the top GOP presidential contenders have dropped out. Michele Bachmann went first, because she was too wacky, followed by Jon Huntsman, because he was too sane. Herman Cain gave up because he was too exposed, and Rick Perry because he was too dim-witted.

But the greatest surprise is the sudden surge of the Adelson campaign. Little-known until now, Adelson was the big winner in South Carolina, has made his mark in Florida, and looks to have the political kick needed to go the distance.

Never heard of the Adelson campaign? It’s the married duo of Sheldon and Miriam, neither of whom is actually on the ballot. Rather, they are running on the cash ticket.

As Wikipedia noted on its website after SOPA and PIPA were taken off the table, “we’re not done yet”. Guess what, they were right, we aren’t done yet and it’s even worse. While we turned our backs on this transparent president was busy working on a “trade” agreement that is even worse than both those bill. It has been in the works since before 2008 and is designed to bypass the constitutional requirement of Senate ratification by calling it an “executive agreement.” Negotiations were held in secret and kept form the public and congress under the guise of “national security.”

What is this “agreement”?

It is called ACTA, Anti-Counterfeiting Trade Agreement is a multi-country trade agreement that, according to Wikipedia:

{} is for the purpose of establishing international standards for intellectual property rights enforcement. The agreement aims to establish an international legal framework for targeting counterfeit goods, generic medicines and copyright infringement on the Internet, and would create a new governing body outside existing forums, such as the World Trade Organization, the World Intellectual Property Organization, or the United Nations.

The agreement was signed on 1 October 2011 by Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea and the United States. In January 2012, the European Union and 22 of its member states signed as well, bringing the total number of signatories to 31. After ratification by 6 states, the convention will come into force.

Supporting and negotiating countries have heralded the agreement as a response to “the increase in global trade of counterfeit goods and pirated copyright protected works”, while opponents have lambasted it for its potentially adverse effects on fundamental civil and digital rights, including freedom of expression and communication privacy. Others, such as the Electronic Frontier Foundation, have derided the exclusion of civil society groups, developing countries and the general public from the agreement’s negotiation process and have described it as policy laundering. The signature of the EU and many of its member states resulted in the resignation in protest of the European Parliament’s appointed rapporteur, as well as widespread protests across Poland.

The negotiations for the ACTA treaty were conducted behind closed doors until a series of leaked documents relating to the negotiations emerged.

On 22 May 2008, a discussion paper about the proposed agreement was uploaded to Wikileaks. According to the discussion paper a clause in the draft agreement would allow governments to shut down websites associated with non-commercial copyright infringement, which was termed “the Pirate Bay killer” in the media. According to the leaked discussion paper the draft agreement would also set up an international agency that could force Internet Service Providers (ISPs) to provide information about subscribers suspected of copyright infringers without a warrant.

(emphasis mine)

The United States already signed ACTA on October 1 in 2011, just before SOPA and PIPA started to get attention. On January 26, 2012, the European Union and 22 of its member states signed as well. After ratification by six member states, the convention will come into force.

As reported by TechDirt, the Obama’s “US Trade Representative (USTR) has made it clear that it has no intention of allowing Congress to ratify ACTA, but instead believes it can sign it unilaterally”

Sen. Ron Wyden (D-OR), for a long time the sole opponent of PIPA, sent a letter to President Obama in October expressing his objections:

Although the USTR insists that current U.S. law, and its application, conform to these standards, there are concerns that the agreement may work to restrain the U.S. from changing such rules and practices. As you know, the executive branch lacks constitutional authority to enter binding international agreements on matters under Congress’s plenary powers, including the Article I powers to regulate foreign commerce and protect intellectual property. Yet, through ACTA and without your clarification, the USTR looks to be claiming the authority to do just that. [..]

The statement by the USTR confuses the issue by conflating two separate stages of the process required for binding the U.S. to international agreements: entry and implementation. It may be possible for the U.S. to implement ACTA or any other trade agreement, once validly entered, without legislation if the agreement requires no change in U.S. law. But, regardless of whether the agreement requires changes in U.S. law, a point that is contested with respect to ACTA, the executive branch lacks constitutional authority to enter a binding international agreement covering issues delegated by the Constitution to Congress’ authority, absent congressional approval.

At the conclusion of the letter, Sen. Wyden requested that the President formerly declare that ACTA is not binding on the US. Somehow, that may not happen.

On the bright side, apparently, President Obama has found an issue where there is bipartisan agreement as Republican Congressman Darrell Issa (CA) called ACTA even more dangerous than SOPA:

As a member of Congress, it’s more dangerous than SOPA. It’s not coming to me for a vote. It purports that it does not change existing laws. But once implemented, it creates a whole new enforcement system and will virtually tie the hands of Congress to undo it.

This video from Inf0rmNati0n expalins how ACTA will effect us as individuals.

So what can we do to stop this? Get out your keyboards and man your cell phones. Call and email the White House and your elected representatives and tell them “Don’t Mess With The Internet.”

Here are two petitions to sign

Please Submit ACTA to the Senate for Ratification as Required by the Constitution for Trade Agreements

End ACTA and Protect our right to privacy on the Internet

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

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

January 31 is the 31st day of the year in the Gregorian calendar. There are 334 days remaining until the end of the year (335 in leap years).

On this day in 1865, The United States Congress passes the Thirteenth Amendment to the Constitution of the United States, abolishing slavery, submitting it to the states for ratification.

The Thirteenth Amendment to the United States Constitution officially abolished and continues to prohibit slavery and involuntary servitude, except as punishment for a crime. It was passed by the Senate on April 8, 1864, passed by the House on January 31, 1865, and adopted on December 6, 1865. On December 18, Secretary of State William H. Seward, in a proclamation, declared it to have been adopted. It was the first of the Reconstruction Amendments.

President Lincoln was concerned that the Emancipation Proclamation, which outlawed slavery in the ten Confederate states still in rebellion in 1863, would be seen as a temporary war measure, since it was based on his war powers and did not abolish slavery in the border states.

Text

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2. Congress shall have power to enforce this article by appropriate legislation

History

The first twelve amendments were adopted within fifteen years of the Constitution’s adoption. The first ten (the Bill of Rights) were adopted in 1791, the Eleventh Amendment in 1795 and the Twelfth Amendment in 1804. When the Thirteenth Amendment was proposed there had been no new amendments adopted in more than sixty years.

During the secession crisis, but prior to the outbreak of the Civil War, the majority of slavery-related bills had protected slavery. The United States had ceased slave importation and intervened militarily against the Atlantic slave trade, but had made few proposals to abolish domestic slavery, and only a small number to abolish the domestic slave trade. Representative John Quincy Adams had made a proposal in 1839, but there were no new proposals until December 14, 1863, when a bill to support an amendment to abolish slavery throughout the entire United States was introduced by Representative James Mitchell Ashley (Republican, Ohio). This was soon followed by a similar proposal made by Representative James F. Wilson(Republican, Iowa).

Eventually the Congress and the public began to take notice and a number of additional legislative proposals were brought forward. On January 11, 1864, Senator John B. Henderson of Missouri submitted a joint resolution for a constitutional amendment abolishing slavery. The abolition of slavery had historically been associated with Republicans, but Henderson was one of the War Democrats. The Senate Judiciary Committee, chaired by Lyman Trumbull (Republican, Illinois), became involved in merging different proposals for an amendment. On February 8 of that year, another Republican, Senator Charles Sumner (Radical Republican, Massachusetts), submitted a constitutional amendment to abolish slavery as well as guarantee equality. As the number of proposals and the extent of their scope began to grow, the Senate Judiciary Committee presented the Senate with an amendment proposal combining the drafts of Ashley, Wilson and Henderson.

Originally the amendment was co-authored and sponsored by Representatives James Mitchell Ashley (Republican, Ohio) and James F. Wilson (Republican, Iowa) and Senator John B. Henderson (Democrat, Missouri).

While the Senate did pass the amendment on April 8, 1864, by a vote of 38 to 6, the House declined to do so. After it was reintroduced by Representative James Mitchell Ashley, President Lincoln took an active role in working for its passage through the House by ensuring the amendment was added to the Republican Party platform for the upcoming Presidential elections. His efforts came to fruition when the House passed the bill on January 31, 1865, by a vote of 119 to 56. The Thirteenth Amendment’s archival copy bears an apparent Presidential signature, under the usual ones of the Speaker of the House and the President of the Senate, after the words “Approved February 1, 1865”.

The Thirteenth Amendment completed the abolition of slavery, which had begun with the Emancipation Proclamation issued by President Abraham Lincoln in 1863.

Shortly after the amendment’s adoption, selective enforcement of certain laws, such as laws against vagrancy, allowed blacks to continue to be subjected to involuntary servitude in some cases. See also Black Codes.

The Thirteenth Amendment was followed by the Fourteenth Amendment (civil rights in the states), in 1868, and the Fifteenth Amendment (which bans racial voting restrictions), in 1870.

Heh.  National Occupy Leaders?

There aren’t any.

Quan says she’ll call national Occupy leaders

Will Kane,Henry K. Lee, Chronicle Staff Writers, San Francisco Chronicle

January 30, 2012 01:55 PM

Oakland Mayor Jean Quan said today that she is going to call national leaders of the Occupy Wall Street movement and implore them to disown Oakland’s protest movement.

“I plan to call some of the national leadership of Occupy this week to say that the Oakland group is not nonviolent and has not agreed to be nonviolent,” Quan said in an interview on KCBS. “The national Occupy movement has said they are nonviolent.”

…

Rachel Lederman, a civil rights lawyer based in San Francisco who is working with the Occupy movement, said police have overreacted and have used excessive force, creating “an increasing level of confrontation with Occupy Oakland over the past several months” and that officers on Saturday had boxed in peaceful protesters.

She said some protesters had carried shields with them because “these young people have felt the need to protect themselves when they’re likely to be shot with so-called less-than-lethal projectiles.”

…

“What they are doing against the city economically is not nonviolent either,” she (Quan) continued on KCBS. “Every Saturday they are doing demonstrations and in my city that is my night of highest police need. They are taking away resources from my city and creating a situation that is making it more difficult for me to keep the city safer.”

…

“Well you guys used tear gas and batons too,” Quan said, referring to San Francisco. “I think it is a different time, I think it is how the media plays it. There is also probably a little misogyny and a little racism, when I looked at what happened in terms of how the national media portrayed it, and how Occupy’s internal media portrayed it.”

"Mortgage Fraud is a Top Priority for This Administration"

By Matt Stoller, Naked Capitalism

Friday, January 27, 2012

Department of Justice official Tony West, July 2009

Mortgage fraud is a top priority for this Administration, especially when public dollars are at stake.

US Attorney Lawrence Brown, Oct, 2009

The vigorous pursuit of real estate professionals who perpetrated mortgage fraud is a top priority for federal authorities in this region.

Department of Justice official Tony West, Jan 2010

Mortgage fraud is a top priority for this administration. We will aggressively pursue both individuals and corporations who defraud federal mortgage insurance programs, which are so important to this economy.

US Attorney Dennis Burke, March, 2010

Mortgage fraud is a top priority for the U.S. Justice Department in the District ofArizona, where it has destroyed property values, lending institutions, and entire neighborhoods in our community. No question, complex fraud schemes – a prime example, here – played a role in crashing our real estate market. Culprits like these defendants will be tracked down, prosecuted and convicted. I congratulate the FBI for their thorough investigation that led to this significant sentence.

U.S. Attorney David Gaouette April, 2010

The prosecution of those who commit mortgage fraud is a top priority of the Department of Justice and this U.S. Attorney’s Office. Those who commit such crimes seriously erode the confidence of financial institutions to lend money which is a key element of the future strength of our economy.

US Attorney Wilfredo Ferrer, Southern District of Florida, May, 2010

There is rampant fraud in South Florida. I think that’s unfortunate. It is embarrassing that we are known in some circles as the fraud capital of the country. I don’t like that title.

US Attorney John Walsh, Jan 2011

The investigation and prosecution of mortgage fraud is a top priority of the Justice Department and this office. Prosecuting these cases helps protect the integrity of the housing market.

Promises Made, and Remade, by Firms in S.E.C. Fraud Cases

By EDWARD WYATT, The New York Times

Published: November 7, 2011

Nearly all of the biggest financial companies, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America among them, have settled fraud cases by promising the S.E.C. that they would never again violate an antifraud law, only to do it again in another case a few years later.

A New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.

…

S.E.C. officials say they allow these kinds of settlements because it is far less costly than taking deep-pocketed Wall Street firms to court and risking losing the case. By law, the commission can bring only civil cases. It has to turn to the Justice Department for criminal prosecutions.

FCIC Referred Criminal Securities Fraud Violations to Justice Deparment a Year Ago

By: David Dayen, Firedog Lake

Monday January 30, 2012 11:39 am

I remember confirming with the Justice Department that they received those referrals of potential violations of law from the FCIC. As it turns out, that happened a year ago Saturday. And we’ve heard nothing arising out of those criminal referrals from the existing Financial Fraud Task Force.

In addition, we knew at the time that those criminal referrals related to violations of secruties law, in other words precisely what the new RMBS working group would want to investigate.

…

The Justice Department has had this information, contained in depositions and official testimony, for a little over a year. They’ve done nothing. The Securities and Commodities Fraud working group would have been the natural arm of the Financial Fraud Task Force to which to refer those FCIC findings. The co-chairs of that group included Lanny Breuer and Robert Khuzami, who are also co-chairs of the RMBS working group that Schneiderman co-chairs.

Even those excited about this working group would have to admit that the same people at the federal level had the same access to the same violations of law and sat on their hands for the entire tenure of the Obama Administration. That’s why some people are skeptical that this new working group will lead to anything real. I recognize the claims that the dynamic around financial fraud and making Wall Street pay has changed generally, and that the Administration’s political people know they have a problem with coziness toward Wall Street, and so they may let the rope out a little bit. Plus there are prosecutors in DoJ at a lower level who may be dying to get their hands on some of this material and work with the new mandate to make some real noise. I understand that perspective. Time will tell if that will resolve in any different manner than the FCIC criminal referrals did.

Angelides closes by saying that “I look forward to President Obama’s newly appointed task force righting the financial wrongs that were committed, including the matters identified by the FCIC and referred to the Department of Justice.” So do I.

Over the weekend Occupy Oakland attempted to occupy an abandoned building into into a community center to provide education, medical, and housing services for the 99%. Police responded with tear gas, rubber bullets, beanbag rounds and mass arrests. From Occupy Oakland Media

January 29, 2011 – Oakland, CA – Yesterday, the Oakland Police deployed hundreds of officers in riot gear so as to prevent Occupy Oakland from putting a building, vacant for 6 years with no plans for use, from being occupied and “re-purposed” as a community center. The Occupy Oakland GA passed a proposal calling for the space to be turned into a social center, convergence center and headquarters of the Occupy Oakland movement.

The police actions tonight cost the city of Oakland hundreds of thousands of dollars, and they repeatedly violated their own crowd control guidelines and protesters civil rights.

With all the problems in our city, should preventing activists from putting a vacant building to better use be their highest priority? Was it worth the hundreds of thousands of dollars they spent?

The OPD is facing receivership based on actions by police in the past, and they have apparently learned nothing since October. On October 25, Occupiers rushed to the aid of Scott Olsen who was shot in the head by police, and the good Samaritans who rushed to his had had a grenade thrown at them by police. At 3:30pm this afternoon, OO medics yet again ran to the aid of injured protesters lying on the ground. Other occupiers ran forward and used shields to protect the medic and injured man. The police then repeatedly fired less lethal rounds at these people trying to protect and help an injured man.

No one condones throwing objects at police, violence or vandalism but it does not justify the overreaction by the Oakland police department use of military type weapons to stop unarmed protesters.

From Kevin Gosztola who describes the videos below in his reporting on the Occupy movement at FDL:

Recorded video footage from the scene shows officers did not give a dispersal order. They pushed protesters toward the YMCA and would not let them leave the scene as they ordered them to “submit” to the arrest. The protesters then did what anyone would do as a battalion of riot police closed in on them: they found the nearest escape route, which happened to be through an entrance to the building. [*See the 30-min mark of the video below.]

I will not condone the throwing of objects at police, but the video captured by Mills, who was also at the scene when percussion grenades, tear gas and other weapons were being fired by police, calls into question the [statements by the city  that protesters were “charging” police. Yes, they were advancing on the riot police, slowly. A handful, like any protest, were egging on the riot police. But, if you watch the video the moment the riot police move on the protesters they immediately fall back. They do not let the police charge into them, which raises doubts about whether it was ever necessary to fire off any chemical weapons at protesters to force the crowd to disperse.

Sunday night in solidarity with Oakland Occupiers took to the streets in cities across the country:

#SolidaritySunday with Oakland Marches in NYC and Across the US; Bank of Ideas Being Evicted in London

As of 8pm EST, actions are currently happening or planned in response to extreme police violence used against Occupy Oakland yesterday in New York City, Boston, Toronto, Vancouver, Melbourne, Oslo, Philadelphia, DC, Chicago, Los Angeles, Dallas, Portland, Tampa, Indianapolis, New Haven, Orlando, Jackson, Des Moines, Hollywood, Baltimore, Portland ME, Tulsa, Denver, St. Louis, Eugene, Nashville, and Detroit. We have also received word that the Bank of Ideas in London is being raided!

At noon today, Occupy DC faces a ban on camping in the parks but will remain in McPherson Square.

We stand with the Occupy Wall Street movement and the right to peaceful assembly.

“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”.

The opinion by Kuttner is an absolute must read.

Robert Kuttner: Eric Schneiderman: Hero or Goat?

The activation of the administration’s long dormant task force on criminal misconduct in the financial collapse, with New York’s progressive attorney general Eric Schneiderman as co-chair, could be the most fateful political and economic development of the election year. There are still immense pitfalls ahead, as Wall Street allies inside the administration and on Wall Street itself try to reduce Schneiderman’s role to that of symbolic fig leaf.

But President Obama has done something potentially momentous for which he deserves our praise, even if he himself does not fully grasp the implications. The significance of the shift is still in play, of course, and will be made clearer as events unfold over the next several weeks.

Some skeptics in the progressive community have raised questions both about the upside for Schneiderman and his motives. Given the administration’s feeble record on prosecutions to date, the critics are right to flag the likelihood that people like Attorney General Eric Holder and SEC enforcement chief Robert Khazumi will try to sandbag Schneiderman. But my reporting suggests that they underestimate both the man and the dynamics that have been set loose.

Paul Krugman: The Austerity Debacle

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure – changes in real G.D.P. since the recession began – Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

Nor is Britain unique. Italy is also doing worse than it did in the 1930s – and with Spain clearly headed for a double-dip recession, that makes three of Europe’s big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.

And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

The surprise announcement by President Barack Obama that he was appointing New York State’s Attorney General Eric Schneiderman to head a new group, the Residential Mortgage-Backed Securities Working Group, that would be investigating securities fraud from the housing bubble and financial crisis. The announcement elicited some interesting reactions from the President’s supporters and critics expressing both praise and doubt about the new committee and just how much force it would really have considering the other appointees to the panel. Public opinion seems to be that few if any of the real perpetrators of the housing bubble and financial crisis have been held accountable.

On Friday, the group held its first press conference. US Attorney General Eic Holder, along with Mr. Schneiderman and Housing Secretary Scott Donovan, explained the purpose of the group, on what it would be focusing some of its powers and announced it had already issued 11 subpoenas:

“We are wasting no time in aggressively pursuing any and all leads,” Mr. Holder said. “In sending out those subpoenas, we consulted with the S.E.C. in making a determination as to where they should go.” Officials would not say which companies received the subpoenas.

“We are not going to be looking at the same things they are examining,” he added. “We’re going to be working with them but looking at a separate group of institutions.”

Schneiderman added that by working together with the SEC, IRS and Justice Department state Attorneys Generals would give them more information with which to bring prosecutions and civil suits at the state level:

In addition, the New York State Martin Act, which gives the attorney general broad powers to elicit information during investigations, “is more flexible than federal securities laws,” Mr. Schneiderman said. The New York and Delaware attorneys general also have jurisdiction over the trusts that hold the mortgages that underlie the mortgage-backed securities, making them “the bricks and mortar of this entire structure.”

By coordinating their efforts, group members might be able to share documents and information that usually would be in individual agency silos, Mr. Holder said.

Friday evening, Schneiderman sat down for an interview with MSNB’s Rachel Maddow, where he further discussed the committee’s focus, the agencies that would be involved and the roll of the states. Dayen, who still has strong reservations about the RMBS working group, thinks that the group lacks serious substance mostly because the use of wording like “resolving allegations”, not “crimes” and the lack of supporting staff and the appearance of disinterest by Assistant Attorney General for the Criminal Division Lanny Breuer who was absent at the press conference. However, he does see some promise. In the past, the IRS was reluctant to get involved, but as David Dayen at FDL News Desk indicated there could be huge tax fraud implications:

But I want to pull out the sentence I highlighted previously in Schneiderman’s interview which shows that at least he is thinking creatively about this. He said that “We have the Internal Revenue Service in because there are huge tax fraud implications to some of the stuff that went on.” I suppose he could be talking about a few different things (like the tax evasion from the banks using MERS instead of recording mortgage transfers at public records offices and paying a fee), but my guess is he’s talking about REMIC claims.

REMICs are an acronym for Real Estate Mortgage Investment Conduits. When you’re talking about mortgage pools used in securitization, you’re talking about REMICs. And REMICs have special tax treatment; they are exempt from federal taxes provided they only invest in “qualified mortgages” and other permitted investments. Here’s the important part: under the 1986 Tax Reform Act, the REMIC must receive all of its assets in the trust within 90 days and the assets have to be performing (not in default). Any REMIC violations make the vehicle subject to a penalty tax of 100%, with additional penalties as they apply.

Well, the strong suspicion is that, during the bubble years, the trustees did not properly convey the mortgages to the REMICs. Which makes the whole investment vehicle a massive tax fraud. That’s a huge level of exposure. You’re talking about $3 trillion in REMICs.

This obviously goes much deeper than fraud.

I became Attorney General about a year ago and started digging into this, and realized that New York and Delaware, which is why my collaboration with Beau Biden was so important, we had a unique place. Because all of the mortgage-backed securities were actually pools of mortgages deposited into New York trusts or Delaware trusts. We started looking at what she’s talking about, did they actually get all the paperwork done, things like that. And we realized that there’s a lot of work to do but a lot of potential for proving liability. [..]

To get this done Rachel, you need resources, you need jurisdiction, and you need will. And when I stood there today with Eric Holder and my other colleagues in government and other prosecutors, I really felt that we had that level of commitment […] what we realized as we started to go back and forth over the last few months is that we all need to work together. There are situations that, New York’s securities law is a stronger law in some ways than the federal laws. Some of our statutes of limitations, though, are shorter. So we can’t go as far back. The federal statute is longer. We need everyone together. And the folks that we have in on this… the Consumer Financial Protection Bureau, Rich Cordray just, a whole array of new powers just came into existence with his appointment, which the President just got done very recently. That’s a huge addition. We have the Internal Revenue Service in, because there are huge tax fraud implications to some of the stuff that went on. All of the people who are in this, all of the agencies who are designated, working together, can achieve so much more than any one of us on our own.

h/t David Dayen for the transcript.

There is still a lot of doubt about this commission and it’s purpose and goals. Matt Stoller at naked capitalism is curious to know if this panel will indict Vikram Pandit, the CEO of Citibank, for possible violations of Sarbanes-Oxley. He sees two problems with this task force. The first is the Obama administration’s policy “to protect the banking system’s basic architecture, which means the compensation structure and the existing personnel who run these large institutions.” And secondly:

Obama personally believes in the legitimacy of the existing banking institutional framework and he strongly suspects that no crimes were committed.  He has hired a raft of people – including Jack Lew, Tim Geithner, Eric Holder, Larry Summers, and so on and so forth – who agree, and has implemented policies such as Dodd-Frank that assume as much. [..]

These people aren’t stupid, they aren’t without principles, and they aren’t electorally driven.  They are ideologues.  They really believe in a neoliberal political economy, where government throws money at the economy through private channels and private channels do with it whatever they think best.

That’s quite a conflict of ideologies. Stoller concludes with more questions and doubts:

There are many details of the task force that are as of yet not public, so it is not clear to me that doing a case like this is possible.  But it’s quite obvious that mega-bank officials and regulators lying about the perilous state of various financial institutions to the public was a key part of the crisis, and that accountability on this front is probably critical to restoring faith in the system.  It would certainly be a big statement upfront if this is what this task force attempted to take on.  Will it?  That’s a very good question, and one I hope we get answers to, soon.

Here’s hoping that this isn’t just an election year sham and Eric Schneiderman has the will to stand up to the Obama neoliberals.  

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

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

January 30 is the 30th day of the year in the Gregorian calendar. There are 335 days remaining until the end of the year (336 in leap years).

On this day in 1969, The Beatles’ last public performance, on the roof of Apple Records in London. The impromptu concert is broken up by the police.

A din erupted in the sky above London’s staid garment district. Gray-suited businessmen, their expressions ranging from amused curiosity to disgust, gathered alongside miniskirted teenagers to stare up at the roof of the Georgian building at 3 Savile Row. As camera crews swirled around, whispered conjecture solidified into confirmed fact: The Beatles, who hadn’t performed live since August 1966, were playing an unannounced concert on their office roof. Crowds gathered on scaffolding, behind windows, and on neighboring rooftops to watch the four men who had revolutionized pop culture play again. But what only the pessimistic among them could have guessed-what the Beatles themselves could not yet even decide for sure-was that this was to be their last public performance ever. . . . . .

When the world beyond London’s garment district finally got to see the Beatles’ last concert, it was with the knowledge, unshared by the original, live audience, that it was the band’s swan song. On Abbey Road Paul had sung grandly about “the end,” but it was John’s closing words on the roof that made the more fitting epitaph for the group that had struggled out of working-class Liverpool to rewrite pop history: “I’d like to say thank you on behalf of the group and ourselves, and I hope we passed the audition.”