08/12/2013 archive

As we have documented here at Stars Hollow, the task force that was created to pursue mortgage fraud and hold the banks accountable was, and is, a sham game to protect the banks from real relief for defrauded homeowners.

Your mortgage documents are fake!

by David Dayen, Salon

Prepare to be outraged. Newly obtained filings from this Florida woman’s lawsuit uncover a horrifying scheme

A newly unsealed lawsuit, which banks settled in 2012 for $1 billion, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.

This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama Administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us. [..]

Most of official Washington, including President Obama, wants to wind down mortgage giants Fannie Mae and Freddie Mac, and return to a system where private lenders create securitization trusts, packaging pools of loans and selling them to investors. Government would provide a limited guarantee to investors against catastrophic losses, but the private banks would make the securities, to generate more capital for home loans and expand homeownership.

That’s despite the evidence we now have that, the last time banks tried this, they ignored the law, failed to convey the mortgages and notes to the trusts, and ripped off investors trying to cover their tracks, to say nothing of how they violated the due process rights of homeowners and stole their homes with fake documents.

The very same banks that created this criminal enterprise and legal quagmire would be in control again. Why should we view this in any way as a sound public policy, instead of a ticking time bomb that could once again throw the private property system, a bulwark of capitalism and indeed civilization itself, into utter disarray? As Lynn Szymoniak puts it, “The President’s calling for private equity to return. Why would we return to this?”

White-collar fraud expert proves ‘mortgage-backed securities’ neither mortgage-backed nor secure

by Scott Kaufmann, The Raw Story

The forged documents were endorsed by employees of companies long bankrupt, executives who signed their name eight different ways, or “people” named “Bogus Assignee for Intervening Assignments” so that the banks could establish standing to foreclose in courts. The end result, according to white-collar fraud expert Lynn Szymoniak, is that over $1.4 trillion in mortgage-backed securities are still, to this day, based on fraudulent mortgage assignments.

The lawsuit against Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank was settled in early 2012 for $1 billion, but now that the evidence is unsealed, Szymoniak and her legal team are free to pursue the other named defendants, including HSBC, the Bank of New York Mellon, and US Bank. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.

Eric Holder Owes the American People an Apology

Jonathan Weil, Bloomberg News

The Justice Department made a long-overdue disclosure late Friday: Last year when U.S. Attorney General Eric Holder boasted about the successes that a high-profile task force racked up pursuing mortgage fraud, the numbers he trumpeted were grossly overstated. [..]

In an updated press release Friday, which corrected its initial release of last October, the Justice Department said a review of the cases found that the inflated figures included defendants who had been sentenced or convicted in fiscal year 2012 — not just people who had been criminally charged, as originally reported. Its original, lofty tally also included cases in which the victims weren’t distressed homeowners. [..]

What a charade. No wonder the government found it so difficult to bring a meaningful number of accounting-fraud cases against bank executives after the financial crisis. Its own books were cooked. [..]

This was the second time, mind you, that Holder’s Justice Department had pulled a stunt like this. In December 2010, Holder held a press conference to tout a supposed sweep by the president’s Financial Fraud Enforcement Task Force called “Operation Broken Trust.” (The mortgage-fraud program was part of the same task force.) As with the mortgage-fraud initiative, Broken Trust wasn’t actually a sweep. All the Justice Department did was lump together a bunch of small-fry, penny-ante fraud cases that had nothing to do with one another. Then it held a press gathering.

Between this sham that protects the banks and the egregious violations of the press and privacy of all Americans with abusive use of FISA, Eric Holder owes us more than an apology, he owes us his resignation as Attorney General.

“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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Paul Krugman: Milton Friedman, Unperson

Recently Senator Rand Paul, potential presidential candidate and self-proclaimed expert on monetary issues, sat down for an interview with Bloomberg Businessweek. It didn’t go too well. For example, Mr. Paul talked about America running “a trillion-dollar deficit every year”; actually, the deficit is projected to be only $642 billion in 2013, and it’s falling fast.

But the most interesting moment may have been when Mr. Paul was asked whom he would choose, ideally, to head the Federal Reserve and he suggested Milton Friedman – “he’s not an Austrian, but he would be better than what we have.” The interviewer then gently informed him that Friedman – who would have been 101 years old if he were still alive – is, in fact, dead. O.K., said Mr. Paul, “Let’s just go with dead, because then you probably really wouldn’t have much of a functioning Federal Reserve.”

Which suggests an interesting question: What ever happened to Friedman’s role as a free-market icon? The answer to that question says a lot about what has happened to modern conservatism.

Sen. Bernie Sanders and Sen. Elizabeth Warren: Four Questions for Fed Chair Candidates

The decisions made by the next chair of the Federal Reserve will have a powerful impact on the economic well-being of every person in America.

While the largest financial institutions and corporations in this country have been bailed out and are now back to making enormous profits and rewarding their executives with outsized compensation packages, recovery hasn’t gone so well for the rest of America. Middle class families have continued to lose ground economically, the number of Americans living in poverty is near an all-time high, and the gap between the very rich and everyone else is growing wider.

The next Fed chair will have enormous power and influence over our entire financial system and the direction of the economy. The Fed is responsible not only for our country’s monetary policy, but it is also a key regulator of financial institutions. In our view, the president’s nominee for Fed chair must be committed to improving the lives of working Americans who are still struggling through the worst economic crisis since the Great Depression.

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.

Click on image to enlarge

August 12 is the 224th day of the year (225th in leap years) in the Gregorian calendar. There are 141 days remaining until the end of the year.

It is the peak of the Perseid meteor shower. It is also known as the “Glorious Twelfth” in the UK, as it marks the traditional start of the grouse shooting season.

On this day in 1990, fossil hunter Susan Hendrickson discovers three huge bones jutting out of a cliff near Faith, South Dakota. They turn out to be part of the largest-ever Tyrannosaurus rex skeleton ever discovered, a 65 million-year-old specimen dubbed Sue, after its discoverer.

Amazingly, Sue’s skeleton was over 90 percent complete, and the bones were extremely well-preserved. Hendrickson’s employer, the Black Hills Institute of Geological Research, paid $5,000 to the land owner, Maurice Williams, for the right to excavate the dinosaur skeleton, which was cleaned and transported to the company headquarters in Hill City. The institute’s president, Peter Larson, announced plans to build a non-profit museum to display Sue along with other fossils of the Cretaceous period.

Preparation and display

The Field Museum hired a specialized moving company, with experience in transporting delicate items, to move the bones to Chicago. The truck arrived at the museum in October 1997. Two new research laboratories funded by McDonalds were created and staffed by Field Museum preparators whose job was to slowly and carefully remove all the rock, or “matrix” from the bones. One preparation lab was at Field Museum itself, the other was at the newly opened Animal Kingdom in Disney World in Orlando. Millions of visitors observed the preparation of Sue’s bones through glass windows in both labs. Footage of the work was also put on the museum’s website. Several of the fossil’s bones had never been discovered, so preparators produced models of the missing bones from plastic to complete the exhibit. The modeled bones were colored in a reddish hue so that visitors could observe which bones were real and which bones were plastic. The preparators also poured molds of each bone. All the molds were sent to a company outside Toronto to be cast in hollow plastic. Field Museum kept one set of disarticulated casts in its research collection. The other sets were incorporated into mounted cast skeletons. One set of the casts was sent to Disney’s Animal Kingdom in Florida to be presented for public display. Two other mounted casts were placed into a traveling tour that was sponsored by the McDonald’s Corporation.

Once the preparators finished removing the matrix from each bone, it was sent to the museum’s photographer who made high-quality photographs. From there, the museum’s paleontologists began the study of the skeleton. In addition to photographing and studying each bone, the research staff also arranged for CT scanning of select bones. The skull was too large to fit into a medical CT scanner, so Boeing’s Rocketdyne laboratory in California agreed to let the museum use their CT scanner that was normally used to inspect space shuttle parts.

Bone damage

Close examination of the bones revealed that Sue was 28 years old when she died, making her the oldest T. rex known. During her life this carnivore received several injuries and suffered from numerous pathologies. An injury to the right shoulder region of Sue resulted in a damaged shoulder blade, a torn tendon in the right arm, and three broken ribs. This damage subsequently healed (though one rib healed into two separate pieces), indicating Sue survived the incident. The left fibula is twice the diameter of the right one, likely a result of infection. Original reports of this bone being broken were contradicted by the CT scans which showed no fracture. Multiple holes in the front of the skull were originally thought to be bite marks by some, but subsequent study found these to be areas of infection instead, possibly from an infestation of an ancestral form of Trichomonas gallinae, a protozoan parasite that infests birds. Damage to the back end of the skull was interpreted early on as a fatal bite wound. Subsequent study by Field Museum paleontologists found no bite marks. The distortion and breakage seen in some of the bones in the back of the skull was likely caused by post-mortem trampling. Some of the tail vertebra are fused in a pattern typical of arthritis due to injury. The animal is also believed to have suffered from gout. In addition, there is extra bone in some of the tail vertebrae likely caused by the stresses brought on by Sue’s great size. Sue did not die as a result of any of these injuries; her cause of death is not known.

Display

After the bones were prepared, photographed and studied, they were sent to New Jersey where work began on making the mount. This work consists of bending steel to support each bone safely and to display the entire skeleton articulated as it was in life. The real skull was not incorporated into the mount as subsequent study would be difficult with the head 13 feet off the ground. Parts of the skull had been crushed and broken, and thus appeared distorted. The museum made a cast of the skull, and altered this cast to remove the distortions, thus approximating what the original undistorted skull may have looked like. The cast skull was also lighter, allowing it to be displayed on the mount without the use of a steel upright under the head. The original skull is exhibited in a case that can be opened to allow researchers access for study. When the whole skeleton was assembled, it was forty feet (twelve meters) long from nose to tail, and twelve feet (four meters) tall at the hips.

cross-posted from the Sunday Train origin station Voices on the Square

In Baseload power is a myth: even intermittent renewables will work, Mark Diesendorf, Asst. Professor and Deputy Director of the Institute of Environmental Studies at the University of New South Wales (Australia), writes:

The old myth was based on the incorrect assumption that base-load demand can only be supplied by base-load power stations; for example, coal in Australia and nuclear in France. However, the mix of renewable energy technologies in our computer model, which has no base-load power stations, easily supplies base-load demand. Our optimal mix comprises wind 50-60%; solar PV 15-20%; concentrated solar thermal with 15 hours of thermal storage 15-20%; and the small remainder supplied by existing hydro and gas turbines burning renewable gases or liquids. (Contrary to some claims, concentrated solar with thermal storage does not behave as base-load in winter; however, that doesn’t matter.)

Anyone who engages in online discussion on issues involving renewable energy for any length of time will encounter the myth that renewable energy is unreliable in supplying base-load demand. This myth is pushed into the discussion with substantial financial investment, directly and indirectly, by vested interests in continued reliance on the Global Suicide Pact power sources of coal, petroleum, and natural gas. Writing from Australia, Mark Diesendorf flags the use of the Murdoch press empire in propagating this myth. Here in the United States, the myth is promoted by both Big Coal and Big Oil funded propaganda mills ~ including those libertarian “think tanks” that argue against the government getting involved in defending our economy from the prospect of collapse in the face of climate chaos …

… because the “free market”, together with billions of dollars of government subsidies for fossil fuel industry and tens or hundreds of billions of unfunded third party costs of fossil fuel consumption, will surely choose best.