Daily Archive: 04/19/2012

Apr 19 2012

The “C” Word

Not what you think.

Sequoia Fund Manager Campaigns Against Goldman Board Member, Former Fannie CEO Jim Johnson

Yves Smith, Naked Capitalism

Thursday, April 19, 2012

I had a colleague tell me today that I shouldn’t use the “c” word, meaning corruption, since it would alienate potential allies. The logic is similar to arguments against being shrill. He claimed that even if a lot of people in positions of authority engage in corrupt looking behavior, that doesn’t mean they understand it to be corrupt, so calling the corrupt will merely get them worked up to no useful end. They could well think they are doing the right thing and just be victims of cognitive capture.

I deeply oppose this line of argument. First, it assumes that decision-makers don’t recognize when they are taking ethically problematic actions. The people I know who have yielded to institutional pressures to do the wrong thing say they knew they were doing so and found a way to rationalize it. And I suspect even sociopaths know where the lines are. They have to do a better job of covering their tracks when their conduct is dubious.

Second, it assumes that it isn’t worth taking a firm position on ethics because it will turn off powerful people who have engaged in questionable behavior. Better to be less accusatory in order to have a dialogue with them. I don’t buy that because being indulging their justifications of their conduct helps preserve a bad status quo.

One aspect of American exceptionalism is many still believe the US is cleaner and more above board than most other advanced economies. But if you go overseas, you will find that a lot of businessmen see the US as not particularly ethical. One British colleague who has worked with major US firms described the US as becoming more and more a scam-based economy (in fairness, he was really talking about the financial services industry). An American who works a great deal with foreign investors said his clients saw the US at best as on a par with other big countries, at worst, with Russia.

One of the big reasons for the erosion in US behavior is the notion that elite crimes shouldn’t be prosecuted because it would harm the system. Glenn Greenwald describes the pardon of Richard Nixon as a critical embodiment of this principle.



So it is important to define norms and not shy away from words like “fraud” and “corruption” when they fit. While it would be nice if more people in power were capable of feeling guilt, shame will do. Thus naming and shaming are legitimate strategies for letting the elites know that the broader public is not fooled.

(h/t Lambert Strether @ Corrente)

Apr 19 2012

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”.

David A. Schultz: Guantánamo Trials Should Be Open

LAST week I stood before a military judge at Guantánamo Bay to argue that the press and public had a constitutional right to observe the proceedings of military commissions. It is an argument I’ve made scores of times on behalf of news organizations objecting to closed proceedings in criminal and civil trials, but this was the first time that a military commission – part of a system of tribunals created in 2006 to try terrorism suspects – agreed to hear such arguments from the press.

Whether this marks a new openness, or is another in a long line of false starts, remains to be seen. But the government has a real opportunity to show its commitment to the rule of law by acknowledging that the public’s First Amendment rights apply at Guantánamo. The values served by open criminal proceedings – public acceptance of the verdict, accountability for lawyers and judges, and democratic oversight of our government institutions – apply there with particular urgency.

George Zornick: Obama Announces Empty Crackdown on Oil Speculation

In the Rose Garden this morning, President Obama spoke strongly about the need to crack down on the Wall Street speculation that leads to higher consumer gas prices. “We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher-only to flip the oil for a quick profit,” he said. “We can’t afford a situation where some speculators can reap millions, while millions of American families get the short end of the stick. That’s not the way the market should work. And for anyone who thinks this cannot happen, just think back to how Enron traders manipulated the price of electricity to reap huge profits at everybody else’s expense.”

The White House outlined five steps today to address the problem [..]

These are all noble ideas, and ones that should be enacted. There’s just one small problem: all but one rely on Congressional action. And there is absolutely no chance Republicans will help Obama lower gas prices before a presidential election.

Mark Weisbrot: Argentina’s Critics are Wrong Again about Renationalizing Oil

In taking back oil and gas company YPF, Argentina’s state is reversing past mistakes. Europe is in no position to be outraged

The Argentinian government’s decision to renationalize the oil and gas company YPF has been greeted with howls of outrage, threats, forecasts of rage and ruin, and a rude bit of name-calling in the international press. We have heard all this before.

When the government defaulted on its debt at the end of 2001 and then devalued its currency a few weeks later, it was all doom-mongering in the media. The devaluation would cause inflation to spin out of control, the country would face balance of payments crises from not being able to borrow, the economy would spiral downward into deeper recession. Then, between 2002 and 2011, Argentina’s real GDP grew by about 90%, the fastest in the hemisphere. Employment is now at record levels, and both poverty and extreme poverty have been reduced by two-thirds. Social spending, adjusted for inflation, has nearly tripled – which is probably why Cristina Kirchner was re-elected last October in a landslide victory.

Of course this success story is rarely told, mostly because it involved reversing many of the failed neoliberal policies – that were backed by Washington and its International Monetary Fund – that brought the country to ruin in its worst recession of 1998-2002. Now the government is reversing another failed neoliberal policy of the 1990s: the privatisation of its oil and gas industry, which should never have happened in the first place.

Dilip Hiro; Taking Uncle Sam for a Ride

The following ingredients should go a long way to produce a political thriller. Mr. M, a jihadist in an Asian state, has emerged as the mastermind of a terrorist attack in a neighboring country, which killed six Americans. After sifting through a vast cache of intelligence and obtaining a legal clearance, the State Department announces a $10 million bounty for information leading to his arrest and conviction.  Mr. M promptly appears at a press conference and says, “I am here. America should give that reward money to me.”

A State Department spokesperson explains lamely that the reward is meant for incriminating evidence against Mr. M that would stand up in court. The prime minister of M’s home state condemns foreign interference in his country’s internal affairs. In the midst of this imbroglio, the United States decides to release $1.18 billion in aid to the cash-strapped government of the defiant prime minister to persuade him to reopen supply lines for U.S. and NATO forces bogged down in the hapless neighboring Islamic Republic of Afghanistan.

Alarmingly, this is anything but fiction or a plot for an upcoming international sitcom. It is a brief summary of the latest development in the fraught relations between the United States and Pakistan, two countries locked into an uneasy embrace since September 12, 2001.

Ellen Brown: How the Goldman Vampire Squid Captured Europe

The Goldman Sachs coup that failed in America has nearly succeeded in Europe-a permanent, irrevocable, unchallengeable bailout for the banks underwritten by the taxpayers.

In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress.  But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair.  Paulson’s plea for a permanent bailout fund-the Troubled Asset Relief Program or TARP-was opposed by Congress and ultimately rejected.

By December 2011, European Central Bank president Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion Euro bailout for European banks without asking anyone’s permission.  And in January 2012, a permanent rescue funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press.  The ESM imposes an open-ended debt on EU member governments, putting taxpayers on the hook for whatever the ESM’s Eurocrat overseers demand. [..]

Today the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies.  This right needs to be returned to sovereign governments.  Credit should be a public utility, dispensed and managed for the benefit of the people.

Jim Hightower; The Citizens United Gang Executes a Corporate Coup D’etat

The Lone Ranger was a masked man who was out to bring bad guys to justice. Ed Conard is a masked man who is out to bring bad guys to power.

A multimillionaire financier who was a top henchman in Bain Capital, Mitt Romney’s old outfit of corporate plunderers, Conard is currently riding with the small but fearsome Citizens United Gang, which has taken over presidential politics in our country.

Unlike the James Gang, the Dalton Boys and other robbers of yore who stole from banks and railroads, these thieves are bankers and high-rolling railroaders. Thanks to the Supreme Court’s edict in the infamous Citizens United case, they are now able to use unlimited amounts of their corporate wealth to create Super PACs, which are proving to be devastating weapons against democracy.

Diane Ravitch: I Don’t Understand Michelle Rhee

I am trying to understand Michelle Rhee. She has allied herself with the most right-wing governors in the nation, yet she claims to be a Democrat. She has worked with Republican Rick Scott in Florida, Republican John Kasich in Ohio, Republican Chris Christie in New Jersey, Republican Rick Snyder in Michigan, among others. Any governor who wants to cut teachers’ rights and benefits can call on her to stand with him. Wherever there is a governor eager to dismantle and privatize public education, she is there at his side. [..]

I try to see the good in other people. I have my failings. But, honestly, I don’t know how Michelle Rhee can take satisfaction in fomenting so much antagonism toward teachers. Does she really think that students will learn more if their teachers live in fear? How can she feel good about leading a campaign to turn public education into a for-profit enterprise and reduce teaching to a job, not a profession. I don’t see the good in any of this. And I don’t understand why she does.

Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[..]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

In fact, the new Residential Mortgage Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.

According to a Reuter’s report, the office space has been located:

   The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.

   While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.

   The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.

   About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.

   The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.

Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:

Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.

Meanwhile as reported by Think Progress,

A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.

Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

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Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

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Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[..]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

In fact, the new Residential Mortgage Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.

According to a Reuter’s report, the office space has been located:

   The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.

   While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.

   The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.

   About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.

   The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.

Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:

Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.

Meanwhile as reported by Think Progress,

A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.

Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[..]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.

According to a Reuter’s report, the office space has been located:

   The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.

   While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.

   The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.

   About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.

   The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.

Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:

Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.

Meanwhile as reported by Think Progress,

A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.

Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[.. ]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.

According to a Reuter’s report, the office space has been located:

   The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.

   While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.

   The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.

   About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.

   The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.

Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:

Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.

Meanwhile as reported by Think Progress,

A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.

Apr 19 2012

Mortgage Fraud: Task Force Still An Empty Promise

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage-Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[.. ]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009. The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman. In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.

We are led to conclude that Donovan was right. The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks. The media hailed the resolution for a few days and then turned their attention to other topics and controversies.

But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.

Schneiderman, who has acted boldly and honorably, should distance himself from this cynical arrangement. He should resign and go back to working effectively with fellow attorneys general in Delaware, Massachusetts and Nevada.

They are much more likely to create the kind of culture of accountability in the financial community that will protect U.S. families from the next real estate scam.

According to a Reuter’s report, the office space has been located:

   The task force includes the Justice Department, the SEC, the FBI and the Department of Housing and Urban Development, among others. It is charged with investigating the pooling and sale of home loans that contributed to the financial crisis.

   While the group faced some skepticism, considering the crisis began nearly five years ago, there are signs it is serious about bringing cases.

   The co-chairs meet formally every week and talk almost every day to coordinate on “a range of investigations,” a Justice Department official said, on condition of anonymity.

   About 50 staff members are working on the effort, and the task force has identified separate office space in Washington and will move some personnel there, the official said.

   The Justice Department last month posted a one-year position of full-time coordinator for the working group who could help manage discovery and coordinate investigations, according to the job posting.

Yves Smith at naked capitalism agrees that Schneiderman has been had by the Obama administration:

It was pretty obvious Schneiderman had been had. Obama tellingly did not mention his name in the SOTU. Schneiderman was only a co-chairman of the effort and would still stay on in his day job as state AG, begging the question of how much time he would be able to spend on the task force. His co-chairman is Lanny Breuer from the missing-in-action Department of Justice. And most important, no one on the committee was head of an agency, again demonstrating that this wasn’t a top Administration priority.

However, she disagrees with the Daily News assessment of Schniederman acting “boldly and honorably” and that he can go back to working with the other attorneys general:

Schneiderman’s actions were neither bold nor honorable. Not surprisingly, his effort at a star turn in the national media has not led to favorable poll results for him in New York. And the Daily News offers a fantasy as an alternative. There is no “going back.” The attorneys general gave up their best legal theories, and with it, their ability to protect the integrity of title, for grossly inadequate compensation and a photo opportunity.

It would be better if we were proven wrong, but Schneiderman entered into an obvious Faustian pact. He’s not getting his soul or his reputation back.

Meanwhile as reported by Think Progress,

A recent report showed that mortgage foreclosure scams have spiked 60 percent in 2012, while the nation’s biggest banks continue to sit upon a slew of fraudulent mortgage documents. A recent investigation of foreclosures in San Francisco found that nearly all of them had legal problems or suspicious documents, prompting the city council to suggest a foreclosure moratorium.

Apr 19 2012

Mortgage Fraud:

85 days and counting since President Obama announced in his State of the Union speech the formation of the Residential Mortgage-Backed Securities Working Group (RMBS) co-chaired by NY State Attorney General Eric Schneiderman and it is still a toothless entity that has so office space, phones and has yet to be staffed. The New york Daily News noticed, suggesting that Schneiderman should quit this fraud:

[.. ]calls to the Justice Department’s switchboard requesting to be connected with the working group produced the answer, “I really don’t know where to send you.” After being transferred to the attorney general’s office and asking for a phone number for the working group, the answer was, “I’m not aware of one.”

The promises of the President have led to little or no concrete action.

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