10/03/2012 archive

There will be no perp walks, or got that matter even arrests, in the civil suit against JP Morgan Chase for flawed mortgage-backed securities issued by Bear Stearns that was filed late Sunday night by Eric Schneiderman, New York State’s Attorney General. It’s the first lawsuit filed by  Residential Mortgage-Backed Securities Working Group that was formed in January following President Barack Obama’s State of the Union address.

The complaint contends that Bear Stearns and its lending unit, EMC Mortgage, defrauded investors who purchased mortgage securities packaged by the companies from 2005 through 2007.

The firms made material misrepresentations about the quality of the loans in the securities, the lawsuit said, and ignored evidence of broad defects among the loans that they pooled and sold to investors.

Moreover, when Bear Stearns identified problematic loans that it had agreed to purchase from a lender, it was required to make the originator buy them back. But Bear Stearns demanded cash payments from the lenders and kept the money, rather than passing it on to investors, the suit contends.

Unlike many of the other mortgage crisis cases brought by regulators such as the Securities and Exchange Commission, the task force’s action does not focus on a particular deal that harmed investors or an individual who was central to a specific transaction. Rather, the suit contends that the improper practices were institutionwide and affected numerous deals during the period.

The lawsuit, however, is not Federal and relies on NY state banking law:

The decision to pursue civil charges under New York’s Martin Act means that the state’s attorney general will not have to prove fraudulent intent, only that the firm was negligent in making any false or misleading disclosures. While easier to prove, that also indicates that the evidence to prove fraud was not strong enough to bring more serious charges.

Like so many cases related to the financial crisis, no individuals are named in the complaint. Nor does it appear that any criminal charges will emerge this long after Bear Stearns was pushed into the arms of JPMorgan by the federal government in a transaction routinely described as a fire sale.

Yves Smith is skeptical about any large fines:

It looks like Eric Schneiderman is living up to his track record as an “all hat, no cattle” prosecutor. Readers may recall that he filed a lawsuit against the mortgage registry MERS just on the heels of Obama’s announcement that he was forming a mortgage fraud task force. Schneiderman’s joining forces with the Administration killed the attorney general opposition to the settlement, allowing the Administration to put that heinous deal over the finish line. The MERS filing was a useful balm for Schneiderman’s reputation, since it preserved his “tough guy” image, at least for the moment, and allowed his backers to contend that he had outplayed the Administration. [..]

Schneiderman has churned out another lawsuit that the Obama boosters and those unfamiliar with this beat might mistakenly see as impressive. It’s a civil, not criminal suit against JP Morgan he conduct of Bear Stearns in originating and misrepresenting $87 billion of mortgage backed securities (the link takes you to the court filing). And also notice no individuals are being sued. Being a banker apparently means never having to be responsible for your actions.

This suit appears just in time for an “October Surprise” and right before the first debate that will focus on domestic policies. This looks like more campaign PR.

“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”.

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Katrina vanden Heuvel: A new ‘Year of the Woman’?

A little more than 20 years ago, Anita Hill sat before a panel of 14 U.S. senators, all male, who aggressively questioned her claim that she had been sexually harassed by then-Supreme Court nominee Clarence Thomas. As the nation watched the hearings, riveted and repulsed, one Washington state senator couldn’t help but ask herself: “Who’s saying what I would say if I was there?”

The answer? No one – there were only two women in the Senate at the time and neither was on the Judiciary Committee. And so, in 1992, Patty Murray, the self-proclaimed “mom in tennis shoes,” laced up and ran for U.S. Senate. The Anita Hill effect spawned the “Year of the Woman,” when 19 women won seats in the House, and four women, including Murray, won in the Senate.

Two decades later, a slew of Republican attacks on women, women’s health and women’s economic futures might just turn 2012 into another “Year of the Woman.” To understand why, it’s worth recapping this year’s parade of anti-women horrors.

Mattea Kramer: Tough Talk for America: A Guide to the Presidential Debates You Won’t Hear

Five big things will decide what this country looks like next year and in the 20 years to follow, but here’s a guarantee for you: you’re not going to hear about them in the upcoming presidential debates. Yes, there will be questions and answers focused on deficits, taxes, Medicare, the Pentagon, and education, to which you already more or less know the responses each candidate will offer.  What you won’t get from either Mitt Romney or Barack Obama is a little genuine tough talk about the actual state of reality in these United States of ours.  And yet, on those five subjects, a little reality would go a long way, while too little reality (as in the debates to come) is a surefire recipe for American decline.

So here’s a brief guide to what you won’t hear this Wednesday or in the other presidential and vice-presidential debates later in the month.  Think of these as five hard truths that will determine the future of this country. [..]

Ironically, those in Washington arguing for urgent deficit reduction claim that we’ve got to do it “for the kids,” that we must stop saddling our grandchildren with mountains of federal debt. But if your child turns 18 and finds her government running a balanced budget in an America that’s hollowed out, an America where she has no chance of paying for a college education, will she celebrate? You don’t need an economist to answer that one.

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.

October 3 is the 276th day of the year (277th in leap years) in the Gregorian calendar. There are 89 days remaining until the end of the year.

On this day in 1967, Woody Guthrie, godfather of the 1950s folk revival movement, dies.

In 1963, Bob Dylan was asked by the authors of a forthcoming book on Woody Guthrie to contribute a 25-word comment summarizing his thoughts on the man who had probably been his greatest formative influence. Dylan responded instead with a 194-line poem called “Thoughts on Woody Guthrie,” which took as its theme the eternal human search for hope. “And where do you look for this hope that yer seekin’?” Dylan asks in the poem, before proceeding to a kind of answer:

You can either go to the church of your choice

Or you can go to Brooklyn State Hospital

You’ll find God in the church of your choice

You’ll find Woody Guthrie in Brooklyn State Hospital

Woodrow Wilson “Woody” Guthrie (July 14, 1912 – October 3, 1967) is best known as an American singer-songwriter and folk musician, whose musical legacy includes hundreds of political, traditional and children’s songs, ballads and improvised works. He frequently performed with the slogan This Machine Kills Fascists displayed on his guitar. His best-known song is “This Land Is Your Land”, which is regularly sung in American schools. Many of his recorded songs are archived in the Library of Congress. Such songwriters as Bob Dylan, Phil Ochs and Tom Paxton have acknowledged their debt to Guthrie as an influence.

Guthrie traveled with migrant workers from Oklahoma to California and learned traditional folk and blues songs. Many of his songs are about his experiences in the Dust Bowl era during the Great Depression, earning him the nickname the “Dust Bowl Troubadour”. Throughout his life Guthrie was associated with United States communist groups, though he was never an actual member of any.

Guthrie was married three times and fathered eight children, including American folk musician Arlo Guthrie. He is the grandfather of musician Sarah Lee Guthrie. Guthrie died from complications of Huntington’s disease, a progressive genetic neurological disorder. During his later years, in spite of his illness, Guthrie served as a figurehead in the folk movement, providing inspiration to a generation of new folk musicians, including mentor relationships with Ramblin’ Jack Elliott and Bob Dylan.

Folk revival and Guthrie’s death

In the late 1950s and early 1960s, a new generation of young people were inspired by folk singers including Guthrie. These “folk revivalists” became more politically aware in their music than those of the previous generation. The American Folk Revival was beginning to take place, focused on the issues of the day, such as the civil rights movement and free speech movement. Pockets of folk singers were forming around the country in places such as Cambridge, Massachusetts and the Greenwich Village neighborhood of New York City. One of Guthrie’s visitors at Greystone Park was the 19-year-old Bob Dylan, who idolized Guthrie. Dylan wrote of Guthrie’s repertoire: “The songs themselves were really beyond category. They had the infinite sweep of humanity in them.” After learning of Guthrie’s whereabouts, Bob Dylan regularly visited him. Guthrie died of complications of Huntington’s disease on October 3, 1967. By the time of his death, his work had been discovered by a new audience, introduced to them in part through Bob Dylan, Pete Seeger, Ramblin’ Jack Elliott, his ex-wife Marjorie and other new members of the folk revival, and his son Arlo.

Huntington’s Disease Society of America

Crossposted from DocuDharma

Questions

Jay Ackroyd, Eschaton

Saturday, September 29, 2012

What would it take to get you to bail on the pres. line on your ballot?  What could Team Dem line up on that would lead you to say “Fuck, no!”? I’d say something like reproductive rights, but the Senate Majority Leader is anti-choice.

I can’t say anything related to “national security” because “Yay! Dead bin Laden” and the only people  the drones kill are terrorists, and no, we’re not gonna tell you who we killed because the fact we killed them is doubledownsecret, so STFU and get in line.

All we got is the New Deal social insurance systems, Social Security, Medicare, Medicaid (which is the backstop when they cash out your house to pay for the nursing home) and Unemployment Insurance. So maybe a good question to ask your elected officials running for office is whether reduction in these programs is off the table–despite Bowles-Simpson, and Dancin’ Dave slavering after “pain.”

The Village Fix in in on Cutting Medicare

thereisnospoon, Hullabaloo

9/29/2012 07:30:00 AM

Do most voters really “understand” that we’re going to be cutting Medicare? Or has the Village decided that we’re going to cut Medicare, and that it’s going to happen no matter what the American people actually want?

…

To continue funding corporate welfare, wasteful wars and tax cuts for the obscenely wealthy while telling voters that Grandma should eat cat food is insane and immoral.

But second, Fineman is disastrously wrong on the politics. For a Democrat to cut Medicare would be politically disastrous.

If the Congress and the President take up Simpson-Bowles during the lame duck session or the new year and enact minor tip money tax increases for the wealthy in exchange for cuts to the most vulnerable, a majority of Republicans will oppose the deal. Democrats will be left holding the bag, insisting on being the “bipartisan adults in the room.”

Voters will hate the deal. Republicans will run successfully against Democrats for the next twenty years, accusing us of cutting Medicare and raising taxes. And when Republicans easily win that argument and gain Executive and Legislative power, President Christie and Speaker Ryan will voucherize Medicare, restore the funding for current seniors, and act as the cavalry riding to America’s and Medicare’s rescue.

The Village Consensus is awful, immoral policy. It’s also suicidal politics. And Howard Fineman and friends appear to be walking into it with open eyes and open arms.

But I’m still voting for the lesser evil!  What choice do I have?

As long as you think that way, none at all.

Electoral victory my ass.

That’s what I’m talking about.