Tag: ek Politics

Sometimes it seems to me that all I write about is Economics, but I do have other interests.  Alas, pitchers and catchers don’t report until February 13th and no Formula One until March 11th.

But there are other things happening that we shouldn’t forget, indeed that’s one of the things the Versailles Villagers count on is our having a short attention span.  Fortunately the Tubz are here to remind us of the dim distant past, say April 20th, 2010.

Taint Part 1.

Panel challenges Gulf seafood safety all-clear

‘It is unethical to experiment with the health of the U.S. population or military members,’ toxicologist says

By Kari Huus, MSNBC

12/27/2010 6:04:49 AM ET

Citing what the law firm calls a state-of-the-art laboratory analysis, toxicologists, chemists and marine biologists retained by the firm of environmental attorney Stuart Smith contend that the government seafood testing program, which has focused on ensuring the seafood was free of the cancer-causing components of crude oil, has overlooked other harmful elements. And they say that their own testing – examining fewer samples but more comprehensively – shows high levels of hydrocarbons from the BP spill that are associated with liver damage.

…

“What we have found is that FDA simply overlooked an important aspect of safety in their protocol,” contends William Sawyer, a Florida-based toxicologist on Smith’s team. “We now have a sufficient number of samples to provide FDA with probable cause to include such testing, really. They need to go back and test some of their archived samples as well.”

…

Their approach draws on the work of scientists from industry, government and academia who banded together in the 1990s to develop guidelines for public health officials and environmental engineers faced with petroleum-related exposure and contamination. The work of the U.S.-funded Total Petroleum Hydrocarbon Criteria Working Group was part of a flurry of research that occurred in the wake of the Exxon Valdez spill in Alaska.

…

“What gives us confidence that we are finding oil in these samples is that we are using multiple lines of evidence,” he said. “We are finding – even in metabolized samples – a lot of matches to BP oil.”

Sawyer and Kaltofen began finding high levels of TPH in seawater and sediment in June. Many scientists had previously expressed concerns that the heavy use of chemical dispersants by BP to break up giant oil slicks would lock the contaminants in the water column, making them more available to marine life.

“From there you can reasonably predict that there are going to be more and more findings in the food chain,” said Susan Shaw, a marine toxicologist at the Marine Environmental Research Institute. Shaw, who is not a member of Smith’s scientific team, is one of 14 scientists tapped for the independent DOI Strategic Sciences Working Group to dissect the oil spill consequences and make policy recommendations to the agencies. She has been a vocal opponent of the heavy use of dispersants throughout the response.

“What we’re seeing now is plausible evidence from independent labs that – just as we thought – there’s oil in the food web, and here’s where we’re finding it,” said Shaw.

…

“We are taking this situation seriously,” said Roy Crabtree, assistant NOAA administrator for NOAA’s Fisheries Service southeast region. “Our primary concerns are public safety and ensuring the integrity of the gulf’s seafood supply.”

Bullshit.

The New York Times recently published a lengthy piece on the final hours of the BP Deepwater Blowout Disaster, which the whiney Galtian Gatekeepers at Associated Press claim is not a scoop though they don’t dispute it’s original reporting.

Who cares you crybabies?

Deepwater Horizon’s Final Hours

By DAVID BARSTOW, DAVID ROHDE and STEPHANIE SAUL, The New York Times

Published: December 25, 2010

It has been eight months since the Macondo well erupted below the Deepwater Horizon, creating one of the worst environmental catastrophes in United States history. With government inquiries under way and billions of dollars in environmental fines at stake, most of the attention has focused on what caused the blowout. Investigators have dissected BP’s well design and Halliburton’s cementing work, uncovering problem after problem.

…

What emerges is a stark and singular fact: crew members died and suffered terrible injuries because every one of the Horizon’s defenses failed on April 20. Some were deployed but did not work. Some were activated too late, after they had almost certainly been damaged by fire or explosions. Some were never deployed at all.

…

The paralysis had two main sources, the examination by The Times shows. The first was a failure to train for the worst. The Horizon was like a Gulf Coast town that regularly rehearsed for Category 1 hurricanes but never contemplated the hundred-year storm. The crew members, though expert in responding to the usual range of well problems, were unprepared for a major blowout followed by explosions, fires and a total loss of power.

They were also frozen by the sheer complexity of the Horizon’s defenses, and by the policies that explained when they were to be deployed.

Finally, I mentioned earlier that Shareholder Democracy is a joke.  The only way to assert your Contract Rights as a Shareholder is to sue-

New York, Ohio Pensions to Lead Plaintiffs in BP Investor Case Over Spill

By Laurel Brubaker Calkins and Margaret Cronin Fisk, Bloomberg News

Dec 29, 2010 12:01 AM ET

U.S. District Judge Keith P. Ellison in Houston named New York State Comptroller Thomas DiNapoli and Ohio State Attorney General Richard Cordray, who head their states’ public employee pension funds, as lead plaintiffs for investors who bought either BP common stock or American depositary receipts from June 2005 to June 2010.

Ellison also named four individual investors as lead plaintiffs for a smaller class of investors who bought common shares of London-based BP or ADRs from March 2009 to April 20 of this year, the date the Deepwater Horizon rig exploded, sparking the worst offshore oil spill in U.S. history.

While the sub-class of investors claim that BP’s leadership made misleading statements about drilling safety in the Gulf of Mexico in the months before the rig explosion, the state pension funds “argue more generally that BP made fraudulent statements between 2005 and 2010 about its safety precautions in the Gulf of Mexico and elsewhere,” Ellison said in yesterday’s order.

The New York and Ohio funds also claim substantial losses from BP ADRs purchased several weeks after the Deepwater Horizon explosion, a timeframe not covered by the complaint of the smaller group of investors, Ellison said. For six weeks after the blast, the funds claim “BP intentionally understated the oil flow rate in an attempt” to diminish harm to the company, lawyers for one of the institutional funds said in court papers.

Good, because you’re arrogant, greedy, narcissistic, assholes who broke the law and should be in jail.  Grow up you crybaby Galts.

Obama & Wall St.: Still Venus & Mars

By: Ben White, Politico

December 28, 2010 04:33 AM EST

(P)olls suggest most Americans believe Obama has handled the titans of Wall Street with an exceedingly light touch. He supported the deeply unpopular $700-billion bank bailout, pushed a financial reform package that stopped short of breaking up the biggest behemoths and, just this month, signed off on tax cuts for the wealthiest and continued low rates on capital gains and dividends.

And, of course, big-time bonuses at bailed-out banks are back, even as average Americans continue to get tossed out of their homes, corporate America has turned in its most profitable quarter in history and the stock market is at a two-year high.

…

Their complaints fell along similar lines: Obama and the White House don’t understand how capital markets work, don’t like people who make a lot of money and relish using Wall Street as a whipping boy to score points with the left.

…

“You would really have to go back to 1934 to find a time when Wall Street was this angry at an administration following a crisis that was largely of Wall Street’s own making,” said Charles Geisst, a financial historian and professor at Manhattan College. “Back then, Wall Street basically went on strike and would not issue bonds for corporations. They stomped their feet like little kids. The same thing is happening now.”

But, as Geisst noted, this is not 1934. Not even close. Big banks are not getting broken up. Nothing Obama has done equates to having created the Securities and Exchange Commission.

…

(W)hat about the fact that “community organizer” Obama, a Harvard Law School graduate, rammed through an extension of all the Bush tax cuts over howls from the left and is just as much a card-carrying member of the bohemian bourgeoisie as any Wall Street banker?

…

But Geisst also suggested the shock and disdain is something of a pose, a feint to fight off greater re-regulation.

“Their best defense here has been incredulity,” he said. “Wall Street just pretends they don’t understand what all the fuss is about and can’t believe how they are being talked about and hope that their incredulity will translate into softer treatment, which is exactly what happened here.”

Out of Lehman’s Ashes Wall Street Gets Most of What It Wants

By Christine Harper, Bloomberg News

Dec 28, 2010 12:01 AM ET

The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives. Higher capital and liquidity requirements agreed to by regulators worldwide have been delayed for years to aid economic recovery.

“We continue to listen to the same people whose errors in judgment were central to the problem,” said John Reed, 71, a former co-chief executive officer of Citigroup Inc., who estimated only 25 percent of needed changes have been enacted. “I’m astounded because we basically dropped the world’s biggest economy because of an error in bank management.”

…

U.S. President Barack Obama was elected in 2008, weeks after Lehman Brothers Holdings Inc. collapsed in the largest bankruptcy and the Federal Reserve and government provided unprecedented support to insurance company American International Group Inc. as well as nine of the largest banks. Obama, who raised $15 million on Wall Street, promised that his administration would “crack down on the culture of greed and scheming” that he said led to the financial crisis.

While Obama vowed to change the system, he filled his economic team with people who helped create it.

….

Even when changes were advocated by people who couldn’t be characterized as radical populists, their ideas were dismissed as unrealistic, misinformed, advancing ulterior motives or damaging to U.S. competitiveness.

Such tactics helped bat back suggestions from billionaire hedge fund manager George Soros and Berkshire Hathaway Inc. Vice Chairman Charles Munger that regulators ban purchases of so-called naked credit-default swaps — contracts that allow speculators to profit if a debt issuer defaults.

…

A suggestion that banks deemed too big to fail should be broken up or made small enough to fail — an idea backed by former Federal Reserve Chairman Alan Greenspan, Bank of England Governor Mervyn King and hedge-fund manager David Einhorn — also failed to win support from U.S. policy makers, as bank executives argued that size alone didn’t make a company risky and that it could be essential for banks to compete.

…

Even before Obama took office in January 2009, former Federal Reserve Chairman Paul A. Volcker, an economic adviser to the president-elect, was calling for clear distinctions between banks that take deposits and make loans and those that engage in riskier capital markets businesses. The recommendation, a modern version of Glass-Steagall, was put forward in a report by the Group of 30, an organization of current and former central bankers, financial ministers, economists and financiers whose board Volcker chairs.

…

(I)n areas that weren’t technical, such as bonuses, the financial industry was able to resist tough regulation.

With polls showing strong popular support for limits on pay, former British Prime Minister Gordon Brown pressed for a tax on banker bonuses and one on financial transactions to deter speculative trading.

Obama didn’t go that far. Instead, the administration appointed Washington lawyer Kenneth Feinberg to review pay for the 100 top executives at firms receiving “exceptional assistance” from the Troubled Asset Relief Program. Feinberg ordered cuts at Bank of America, Citigroup and AIG, as well as at two bankrupt car companies and their finance divisions.

…

In a Bloomberg News National Poll conducted Dec. 4 through Dec. 7, 71 percent of Americans said big bonuses should be banned this year at Wall Street firms that took taxpayer bailouts, and 17 percent said bonuses above $400,000 should be subject to a one-time 50 percent tax. Only 7 percent of the respondents said they consider bonuses a reflection of Wall Street’s return to health and an appropriate incentive.

…

Reed, the former Citigroup executive, said he didn’t understand why lawmakers gave so much credit to arguments made by financial-industry participants whose job it is to put the interests of their shareholders above any concern for the safety of the financial system.

“I’m surprised that the people in Washington think that the stockholders are the people that they should protect,” Reed said. “It would seem to me that the people who should be protected are the overall banking system and the many, many, many companies that depend on it.”

And the fact of the matter is that their fraudulent criminal practices DON’T benefit the shareholders whose concerns are routinely ignored and overidden by Boards of Directors composed entirely of cronies of Management.  Shareholder Democracy is a joke.

These thieves don’t care about anyone but themselves.

Bill Black-

Black: the dominance of unethical banking

Posted by: Jay Kernis – Senior Producer, Parker/Spitzer

December 20th, 2010, 06:17 PM ET

A credit ratings firm couldn’t give a “AAA” rating (the highest possible – the rating that virtually all these toxic derivatives were given) if it looked at a sample of the loans – so they religiously did not kick the tires on the liar’s loans. So we had the farce of “credit rating” agencies whose expertise was supposedly in reviewing credit quality never looking at that credit quality so that they could make enormous fees by giving toxic waste pristine “AAA” ratings.

The investment banks couldn’t sell the financial derivatives loans to others if the investment bankers (whose supposed expertise was evaluating credit risk) were to actually look at credit quality of the underlying liar’s loans. If they looked, they’d document that the loans were overwhelmingly fraudulent. They’d then have three options.

A. They could sell the CDOs to others by calling them wonderful “AAA” investments – while having files proving that they knew this was a lie. This option is the prosecutor’s dream.

B. They could have sued the lenders that sold them the fraudulent liar’s loans. The investment banks typically had a clear contractual right to force the fraudulent loans to buy back the liar’s loans. But there were fatal problems with that option. The lenders that made liar’s loans typically had minimal capital (net worth). If the investment banks had demanded that they repurchase the loans they would have been unable to do so – and the demand would have exposed the investment banks’ bright shining lie that by pooling liar’s loans they could create “AAA” CDOs. Every CDO purchaser from the investment banks would then demand that the investment banks repurchased their CDOs – which would have caused virtually every large U.S. investment bank to fail.

C. They could have gone to the Justice Department and expose the massive fraud that was destroying the American economy and help the FBI investigate the lenders specializing in making liar’s loans, the corrupt appraisers, and the credit rating agencies. But that would have caused the CDO bubble to burst and the investment banks to fail.

That’s why the industry went with the fourth option – “don’t ask; don’t tell.” It’s like the famous fable of the emperor and the fraudulent designer. The designer tells everyone that he has created clothes for the emperor of such beauty that only the most sophisticated people can even see the clothes. The emperor and his cronies all agree that the clothes are glorious. The fraud only collapses when a boy blurts out: “the emperor is naked.” As long as no one engaged in the frauds pointed out that you can’t make a “AAA” rating out of a pool of massively overvalued fraudulent loans the housing bubble could hyper-inflate and the officers of the investment banks and credit rating agencies could become wealthy beyond their dreams.

…

The federal government has permitted banks to inflate their reported incomes and “net worth” for the purpose of evading the mandatory statutory duty under the Prompt Corrective Action (PCA) law to close deeply insolvent banks. Congress, at the behest of the Chamber of Commerce, the banking trade associations, and Chairman Bernanke, successfully extorted the Financial Accounting Standards Board (FASB) to scam the accounting rules so that the banks could fail to recognize on their accounting reports over a trillion dollars in losses.

When banks understate their losses massively they, by definition, overstate their net worth massively. The PCA’s provisions kick in when net worth falls, so the accounting lies have gutted the PCA. The accounting lies also allow the banks to (once again) report high fictional income when they are experiencing large, real losses. This accounting scam allows the bank executives to collect hundreds of billions of dollars in bonuses. We should end the accounting scam and enforce the PCA.

Congress Threatens to Sow the Seeds of Our Next Banking Crisis

William K. Black, Huffington Post

December 20, 2010 09:29 AM

Representative Paul’s claims epitomize the triumph of ideology over fact: “The market is a great regulator, and we’ve lost understanding and confidence that the market is probably a much stricter regulator.” No, the “market” is not a “great regulator” and the ongoing crisis is only the latest example of that point. Efficient, non-fraudulent markets would be a very good thing. Inefficient, markets with fraudulent participants can be a catastrophically bad thing.

The “market” also does not deal effectively with externalities (and they can be lethal) and with market power. The neoclassical claim that cartels cannot persist and that potential entry solves prevents all serious ills proved false in the real world. Here, however, I will discuss only why control fraud turns “markets” perverse. Accounting control frauds are guaranteed to report high profits in the early years. This is why Akerlof & Romer (1993) agreed with white-collar criminologists that such frauds were a “sure thing.” I’ve explained why the four-part recipe for optimizing fictional accounting income maximizes executive bonuses — and real losses. In the interest of brevity I will merely mention four ways in which accounting control frauds make markets, and “private market discipline” perverse.

1. The fictional profits fool creditors and shareholders — they are eager to lend to and invest in firms reporting record profits. Rather than discipline accounting control frauds, creditors and shareholders fund their massive growth.
2. The fictional profits and the large bonuses they drive create a “Gresham’s” dynamic in which bad ethics tends to drive good ethics out of the marketplace. The CFO that fails to emulate the fraud recipe will report far lower profits in the near term and will fear losing his job. More junior executives whose compensation is based on the firm’s reported income have perverse incentives to engage in accounting fraud to ensure that the firm “hits the number” and have reduced incentives to blow the whistle on frauds.
3. Lenders engaged in accounting control fraud create “echo” epidemics of fraud. They use their powers to hire and fire and create compensation systems to create perverse incentives in other fields: among their employees, “independent” professionals, and agents (e.g., loan brokers).
4. When several large lenders follow similar fraud strategies they can hyper-inflate financial bubbles.

Anti-consumer control frauds can also turn markets perverse by creating Gresham’s dynamics. Chinese infant formula provides a good example. Dishonest firms drove honest firms from the market — maiming hundreds of thousands of infants’ health.

I told you we would be revisiting L. Randall Wray’s third piece on Title Fraud, well he’s written a new piece for Bezinga that kind of concisely summarizes the problem-

Time to Audit the Remic Trusts

By L. Randall Wray, Benzinga Columnist

December 23, 2010 12:43 PM

We now know that the “mortgage backed” securities were not backed by mortgages. In reality they are unsecured debt. The “pooling and servicing agreements” (PSAs) that govern securitization require that the mortgage documents (including the wet ink notes as well as a clean chain of title) are transferred in a timely manner to the trustees. This was rarely and perhaps never done, because it was counter to the recommendation made by MERS (Mortgage Electronic Registry System). Instead, notes were either destroyed or held by the servicers to speed the foreclosures that were always envisioned as the end result of the mortgage origination process. Not only does this practice render the securities fraudulent but it also violates the federal tax laws that govern the REMICs-meaning back taxes are due.

But worse than all that, by breaking the chain of title and by destruction of documents, MERS and the servicers have jeopardized the entire system of property rights. Most, perhaps all, foreclosures have been fraudulent, which means that resales of the homes are also frauds. It goes without saying that the original mortgages were frauds from the very beginning-to complete the transformation to the ownership society it was necessary to ensure that by construction, default was inevitable. Either the homeowner would be unable to pay, or the servicer would “lose” the payments. By obscuring the chain of title, it would be impossible for the debtors or the courts to sort things out. Separating home owners from their property was necessary to ensure that we can create Bush’s ownership society. It is the modern form of the feudal foreclosures and seizures of peasant lands that concentrated ownership in the hands of agricultural capitalists-creating the first ownership society.

The scale of the problem is huge. Some estimate that as many as $6.4 trillion worth of home mortgages (33 million of them) are frauds, with destroyed or doctored documents. Probably all of the $1.4 trillion worth of private label residential mortgage “backed” securities violate the PSAs-so are actually unsecured debt. Three state supreme courts have already ruled that MERS cannot be the owner of mortgages, hence, has no standing in foreclosures. MERS contaminated 65 million mortgages-decoupling the mortgages from the notes and destroying the chain of title. A consortium of investors (including PIMCO, Black Rock, and Fannie and Freddie) that owns $600 billion of the private label securities are suing the banks to take them back. One investor action alone against Bank of America concerns $47 billion in fraudulent mortgages-enough to put a serious dent in its purported net worth of $230 billion (which is probably a vast overstatement resulting from cooking the books). A suit in California seeks $60-$120 billion in lost recording fees alone. All 50 states are investigating the servicers for fraud. The top five servicers (Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, GMAC-Ally) have 60% of the business and include the top four banks that account for 40% of the banking business.

REMICs–

Real Estate Mortgage Investment Conduits, or “REMICs,” (sometimes also called Collateralized mortgage obligations) are a type of special purpose vehicle used for the pooling of mortgage loans and issuance of mortgage-backed securities. They were introduced in 1987 and are defined under the United States Internal Revenue Code (Tax Reform Act of 1986), and are the typical vehicle of choice for the securitization of residential mortgages in the US.

More Wray-

Anatomy of Mortgage Fraud, Part III: MERS’S Role in Facilitating the Mother of All Frauds

L. Randall Wray, Huffington Post

Posted: December 16, 2010 09:29 AM

Enter MERS — another link in the food chain — created by the banks in 1997 in preparation for the boom and bust. MERS was set up to be a foreclosure mill. It would break the centuries-old custom that protected property rights by requiring every sale of property to be publicly recorded, and requiring that any creditor claiming a right to foreclose to demonstrate clear title, with an endorsed note in the creditor’s name and a record at the county office showing transfer of the property.

The banksters did not want to go through all that paperwork, and needed to subvert the transparency that would shine light on their crimes. Hence, they set up a fraudulent shell corporation that claimed to be the mortgagee; while the original sale would be recorded at the county office, subsequent sales and purchases of the mortgage would be recorded only by an “electronic handshake” between two “members” of MERS. Even that record was considered by the banksters to be purely voluntary — MERS did not require members to actually record transactions. If they found it more convenient to conceal the transfers, that was permitted.

…

MERS deliberately undermined the legality of the loans and the records. Homeowners could no longer search the public records to find out who actually held their mortgage — the record would show MERS as owner, but MERS was a shell corporation with no real employees. It was not a servicer, so the homeowner could not make mortgage payments to the purported owner. As a result, checks were sent to the wrong servicers; servicers credited the wrong accounts; servicers claimed delinquencies on homeowners who never missed a payment, and piled late fees and delinquencies on the wrong borrowers; sheriffs were sent to break down the doors of the wrong houses, and threw belongings out on the street in front of homes on which there was no mortgage at all. MERS purposely created the mess, at the behest of banksters who do not want mere legal technicalities to get in the way of stealing homes. The undermining of the public records was not a mistake — it was MERS’s business model, created by the member banks.

And MERS helped banksters to defraud securities holders. Banks not only separated the mortgages from the notes, but they even destroyed the notes as they entered the mortgages into MERS’s electronic data base. MERS told servicers that it is “customary” practice to retain notes, not to endorse them over to REMIC trustees as required both by federal tax law and by the PSAs that govern the trusts. This made the securities a “nullity” — as the Supreme Court ruled over a hundred years ago — because a mortgage without a note is unenforceable in foreclosure. At best, the securities are unsecured debt, with no real property behind them.

In any case, the mortgages put into the trusts did not meet the representations made to investors — so even if the notes had been properly endorsed over to the trusts, the securities could be turned back to the banks. By creating a completely fraudulent electronic registry system — in which data would be entered only if banks found it convenient to do so, and in which data could be modified at any time by any member of MERS — MERS made it easy to conceal the securities frauds. Destruction or forgery of the paperwork was absolutely necessary to cover the trail of fraud from origination of the mortgage to securitization and finally to the inevitable foreclosure. Again, destruction of documents was not a mistake. It was the business model.

L. Randall Wray-

• Anatomy of Mortgage Fraud, Part I: MERS’s Smoking Gun 12/9/10
• Anatomy of Mortgage Fraud, Part II: The Mother of All Frauds 12/13/10
• Anatomy of Mortgage Fraud, Part III: MERS’S Role in Facilitating the Mother of All Frauds 12/16/10

In the 3rd and final part of his series on The Title Fraud Smoking Gun (my treatments of Part 1 and Part 2), L. Randall Wray offers a partial explanation of the deterioration of the US Economy that does not, I think, go quite far enough.

The problem is money.

Specifically that the Tax Policy of this country is not sufficiently redistributive to put it in the hands of people (and Governments) who will use it to buy goods and services instead of people who buy fraudulent fictional financial instruments.

Many people think only the Federal Reserve can coin money, but that’s not true.  By using Leverage a pile of money can get magically multipled by limits set only by the credulousness of the market.  Literally ‘What it will bear’.  Recently as much as 30 to 1 has been customary, but there is no theoretical limit actually.

High (some would call them ‘progressive’) Marginal Tax Rates on Businesses and Individuals reduces the perverse incentive to draw out as much cash as you can, wave your magic multiplier wand, and find some kind of Ponzi Pyramid Scheme to get out in front of.

As always, it is DEMAND that is driving Supply and not the other way round.

Anatomy of Mortgage Fraud, Part III: MERS’S Role in Facilitating the Mother of All Frauds

L. Randall Wray, Huffington Post

Posted: December 16, 2010 09:29 AM

In this piece, let us step back and examine the big picture to answer the question: Why did Wall Street create this crisis? For the answer, we have got to go back several decades. I do not want to give a long-winded history lesson, but it is necessary to understand the transformation that has taken place since the 1960s. Back then, the financial system was small, simple, regulated and relatively unimportant. Banks made commercial loans; thrifts made home loans; and Wall Street handled investment finance. Households had jobs and rising wages so they didn’t need to go into debt to finance rising consumption. With robust economic growth, each generation could expect to have roughly twice the living standard of the previous generation.

Things began to change in the 1970s, and especially in the 1980s as growth slowed, as median real wages stopped rising, and as financial institutions were unleashed to expand activities into new areas. At first households coped with stagnant incomes by putting more family members to work (especially women), but gradually they began to rely on debt. Banks created new kinds of credit and gradually expanded their views as to who is creditworthy. I can still remember one conference I attended at which someone from the financial sector proudly announced that the banks had discovered an untapped market for credit cards — the “mentally retarded”. The argument was that this group would be just as safe as college students, since parents would bail them out in order to avoid having their kids’ credit ratings suffer. This was not a joke — it was a business model.

…

Banks became giant one-stop casinos that facilitated every kind of crazy bet. They would make a loan to you, but then simultaneously securitize it to sell-on to an investor plus place a bet that you would default on your loan so that the security would go bad. For a fee, they’d let a hedge fund manager choose the riskiest loans to bundle into a sure-to-fail financial product that they would then sell to their own customers. And then they’d join the hedge fund in betting against their customers. The more loans they made, the more fees they collected; the more bad loans they made, the more bets they would win. The more debt they piled on households, the greater their profits; riskier debt meant even higher fees and more defaults and thus greater wins from gambling. Prospective death was a booming good business for our undertakers.

America became “Bubbleonia” — with a “bubblicious” economy that moved from one bubble and crash to another: A commercial real estate bubble and crash in the 1980s that killed the thrifts; a series of developing country debt bubbles and crashes in the 1980s and 1990s fueled in part by American banks; a US stock market bubble and crash in 1987; the dot-com bubble and crash at the end of the 1990s; and then the US real estate and global commodities markets bubbles and crashes this decade.

Increasingly, the bubbles were managed cooperatively by Wall Street and Washington. Chairman Greenspan and President Clinton made a pact with Robert Rubin’s Wall Street to pump up “new economy” internet stocks through “irrational exuberance”. When that failed, Greenspan extolled the benefits of adjustable rate mortgages, while President Bush hawked the “ownership society”. Wall Street turned America’s residential real estate sector into the world’s biggest casino — $20 trillion worth of property that could serve as the basis for many tens of trillions of dollars of bets. Bernanke promoted the bubble by assuring markets that America was enjoying the “great moderation” — a new era in which stability dominates — and that in any case, the Fed would protect markets in the case of any hiccups.

Title Fraud is just a symptom of the underlying problem with the Economy which is concentration of wealth.

You know, I’m not one of those bloggers who makes my fame out of bashing Republicans.

Don’t get me wrong.  The modern Republican Party is composed of Fascist, Racist, Theocratic Morons and Wall Street Greedheads (also Morons), but it’s so obvious that it’s hardly worth pointing out except in the context of how much the Versailles Village and the Institutional Democratic Party support and cover for them instead of crushing them like these 26% on the amoral idiot end of the Bell Curve deserve.

Today’s context is the unfortunate exposure of the Southern Racism of Haley Barbour (not that he isn’t also a Theocratic Fascist Greedhead)-

The Barbour Of Yazoo City

by Conor Friedersdorf, The Atlantic

21 Dec 2010 01:24 pm

I’ve got an observation about race, the conservative movement, and its political fortunes: the strange place we find ourselves is that being accused of racism can actually help a Republican candidate these days. Jonathan Chait gets it: “His past is not racist enough to disqualify him, but it is murky enough to spur the liberal media to raise questions. And thus Barbour will be in the position of being the white conservative attacked by liberals for his alleged racism… it will surely make Republicans rally to Barbour.”

…

Over the years, social norms in America have shifted such that being labaled a racist is tremensoulsy damaging to one’s social standing and career prospects. On the whole, that’s a good thing. We ought to abhor racists. But an unintended consequence is that false accusations of racism can be used to cynically accrue power. Compared to actual instances of racism, this sort of thing doesn’t occur very often.

…

Lots of white people fear that they’re going to be wrongly labeled racist, and it provokes the same anxiety experienced when people fear, without particular reason to do so, that they’re going to be attacked by a shark or have their identity stolen or that they’re suffering from the deadly disease they came across on Web M.D.

Umm… what lambert likes to call a ‘Category Error’.

These people ARE RACISTS!

Barbour Mistakes Black for White

by Cynic, The Atlantic

Dec 21 2010, 1:10 PM ET

In 1954, the NAACP determined to bring five test cases to force integration in the Mississippi public schools. Yazoo County exhibited some of the worst disparities in the state, spending $245.55 on every white child, but only $2.92 per black pupil. So the NAACP gathered fifty-three signatures of leading black citizens of Yazoo City, the county seat, on a petition calling for integration.

Their courage was met with outrage. Sixteen of the town’s most prominent men called for a public meeting, to form a White Citizens’ Council and respond to the petition. Several hundred turned out on a hot June night, including journalist Willie Morris, who watched in mute disbelief as the best men of the town outlined their response:

Those petitioners who rented houses would immediately be evicted by their landlords. White grocers would refuse to sell food to any of them. Negro grocers who had signed would no longer get any groceries from the wholesale stores. “Let’s just stomp ’em!” someone shouted from the back, but the chairman said, no, violence would be deplored; this was much the more effective method. Public opinion needed to be mobilized behind the plan right away.

…

The craftsmen could not find work. Those with jobs were fired. So were their spouses. Merchants refused to sell them groceries or supplies. The three black merchants who had signed were cut off by their wholesalers. The grocer had his account closed by the bank. One by one, they took their names off the petition. It did no good. Soon enough, 51 names were deleted from the petition. The other two had fled town before withdrawing.

…

If Barbour wants to praise the good people of Yazoo City for their extraordinary restraint in not employing violence as they hounded from their community those black parents brave enough to demand a decent education for their children; to laud their public disavowal of the local Klan even as they turned a blind eye to its activities; or to extol their grudging cession of the inevitability of court-ordered integration after fifteen years of stalling, for its absence of lynchings or riots, that’s his prerogative. For the rest of us, though, Yazoo City should serve as a poignant reminder that the civil rights struggle really was “that bad.”

Update: And about the Versailles Villagers, no better expression of it than this-

Haley Barbour: How he hurt himself (and how he can come back)

By Chris Cillizza, The Washington Post

Posted at 1:27 PM ET, 12/21/2010

While all candidates — including Barbour — will dismiss the importance of “buzz” among the Washington insider crowd, it does matter. The presidential race is like a glacier — most of it moves under the surface, away from the eyes of the average voter. Unless Barbour can get out from under the race storyline, he might not ever make it to the point where voters have a chance to assess him or, if he does make it, he could be badly damaged enough that voters will dismiss his candidacy out of hand.

(A sidebar: Barbour’s good relationships with the press have always been chalked up as a positive for a potential presidential bid. But, Barbour’s ease with the press also creates situations like the one in the Weekly Standard piece — a breeziness about a serious issue that plays far less well in print than it might in casual conversation. Barbour has to realize that his relations with the press will change fundamentally now that he is a potential presidential candidate and adjust accordingly.)

The New York Times was, typically, wrong.

FROM SOUTH CAROLINA.; PUBLIC FEELING IN CHARLESTON

THE LEADING MEN IN THE SECESSION MOVEMENT

MISGIVINGS ABOUT THE ISSUE.

Published: December 15, 1860

Emphasis in the original.

I think what’s important to remember as we celebrate the sesquicentennial is the root cause of the Rebellion.

A group of wealthy men thought it was ok to work, breed, and sell human beings like animals based on the color of their skin.

More than that, they were upset that certain Northern States were insufficiently zealous about finding their property for them when it got ‘lost’, causing significant impact to the bottom line.

And also their honor was offended that anyone could think this behavior morally wrong.  It hurt their sensitive feelings.

Alexander H. Stephens

Cornerstone Address, March 21, 1861

Our new Government is founded upon exactly the opposite ideas; its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and moral condition. This, our new Government, is the first, in the history of the world, based upon this great physical, philosophical, and moral truth.

This truth has been slow in the process of its development, like all other truths in the various departments of science. It is so even amongst us. Many who hear me, perhaps, can recollect well that this truth was not generally admitted, even within their day. The errors of the past generation still clung to many as late as twenty years ago. Those at the North who still cling to these errors with a zeal above knowledge, we justly denominate fanatics. All fanaticism springs from an aberration of the mind; from a defect in reasoning. It is a species of insanity.

One of the most striking characteristics of insanity, in many instances, is, forming correct conclusions from fancied or erroneous premises; so with the anti-slavery fanatics: their conclusions are right if their premises are. They assume that the negro is equal, and hence conclude that he is entitled to equal privileges and rights, with the white man…. I recollect once of having heard a gentleman from one of the Northern States, of great power and ability, announce in the House of Representatives, with imposing effect, that we of the South would be compelled, ultimately, to yield upon this subject of slavery; that it was as impossible to war successfully against a principle in politics, as it was in physics or mechanics. That the principle would ultimately prevail. That we, in maintaining slavery as it exists with us, were warring against a principle-a principle founded in nature, the principle of the equality of man.

The reply I made to him was, that upon his own grounds we should succeed, and that he and his associates in their crusade against our institutions would ultimately fail. The truth announced, that it was as impossible to war successfully against a principle in politics as well as in physics and mechanics, I admitted, but told him it was he and those acting with him who were warring against a principle. They were attempting to make things equal which the Creator had made unequal.

• How the South rationalizes secession
  
  150 years later, a campaign to deny that the South’s exodus from the union was a revolution is in full force
  
  By Glenn W. LaFantasie, Salon.com
  
  Sunday, Dec 19, 2010 11:01 ET

Is an interesting and lengthy read.  He put me on the track of Stephens’ racist sentiments and makes a Unionist case for treason, which was the official causus belli of the North.

Gone With the Myths

By EDWARD BALL, The New York Times

Published: December 18, 2010

ON Dec. 20, 1860, 169 men – politicians and people of property – met in the ballroom of St. Andrew’s Hall in Charleston, S.C. After hours of debate, they issued the 158-word “Ordinance of Secession,” which repealed the consent of South Carolina to the Constitution and declared the state to be an independent country. Four days later, the same group drafted a seven-page “Declaration of the Immediate Causes (.pdf),” explaining why they had decided to split the Union.

…

(A) look through the declaration of causes written by South Carolina and four of the 10 states that followed it out of the Union – which, taken together, paint a kind of self-portrait of the Confederacy – reveals a different story. From Georgia to Texas, each state said the reason it was getting out was that the awful Northern states were threatening to do away with slavery.

The ordinance is nothing special, Tenther nonsense of the type LaFantasie debunks.  The Declaration on the other hand is quite interesting-

We assert that fourteen of the States have deliberately refused, for years past, to fulfill their constitutional obligations, and we refer to their own Statutes for the proof.

The Constitution of the United States, in its fourth Article, provides as follows: “No person held to service or labor in one State, under the laws thereof, escaping into another, shall, in consequence of any law or regulation therein, be discharged from such service or labor, but shall be delivered up, on claim of the party to whom such service or labor may be due.”

This stipulation was so material to the compact, that without it that compact would not have been made. The greater number of the contracting parties held slaves, and they had previously evinced their estimate of the value of such a stipulation by making it a condition in the Ordinance for the government of the territory ceded by Virginia, which now composes the States north of the Ohio River.

The same article of the Constitution stipulates also for rendition by the several States of fugitives from justice from the other States.

The General Government, as the common agent, passed laws to carry into effect these stipulations of the States. For many years these laws were executed. But an increasing hostility on the part of the non-slaveholding States to the institution of slavery, has led to a disregard of their obligations, and the laws of the General Government have ceased to effect the objects of the Constitution. The States of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Pennsylvania, Illinois, Indiana, Michigan, Wisconsin and Iowa, have enacted laws which either nullify the Acts of Congress or render useless any attempt to execute them. In many of these States the fugitive is discharged from service or labor claimed, and in none of them has the State Government complied with the stipulation made in the Constitution. The State of New Jersey, at an early day, passed a law in conformity with her constitutional obligation; but the current of anti-slavery feeling has led her more recently to enact laws which render inoperative the remedies provided by her own law and by the laws of Congress. In the State of New York even the right of transit for a slave has been denied by her tribunals; and the States of Ohio and Iowa have refused to surrender to justice fugitives charged with murder, and with inciting servile insurrection in the State of Virginia. Thus the constituted compact has been deliberately broken and disregarded by the non-slaveholding States, and the consequence follows that South Carolina is released from her obligation.

The ends for which the Constitution was framed are declared by itself to be “to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”

These ends it endeavored to accomplish by a Federal Government, in which each State was recognized as an equal, and had separate control over its own institutions. The right of property in slaves was recognized by giving to free persons distinct political rights, by giving them the right to represent, and burthening them with direct taxes for three-fifths of their slaves; by authorizing the importation of slaves for twenty years; and by stipulating for the rendition of fugitives from labor.

We affirm that these ends for which this Government was instituted have been defeated, and the Government itself has been made destructive of them by the action of the non-slaveholding States. Those States have assume the right of deciding upon the propriety of our domestic institutions; and have denied the rights of property established in fifteen of the States and recognized by the Constitution; they have denounced as sinful the institution of slavery; they have permitted open establishment among them of societies, whose avowed object is to disturb the peace and to eloign the property of the citizens of other States. They have encouraged and assisted thousands of our slaves to leave their homes; and those who remain, have been incited by emissaries, books and pictures to servile insurrection.

For twenty-five years this agitation has been steadily increasing, until it has now secured to its aid the power of the common Government. Observing the forms of the Constitution, a sectional party has found within that Article establishing the Executive Department, the means of subverting the Constitution itself. A geographical line has been drawn across the Union, and all the States north of that line have united in the election of a man to the high office of President of the United States, whose opinions and purposes are hostile to slavery. He is to be entrusted with the administration of the common Government, because he has declared that that “Government cannot endure permanently half slave, half free,” and that the public mind must rest in the belief that slavery is in the course of ultimate extinction.

This sectional combination for the submersion of the Constitution, has been aided in some of the States by elevating to citizenship, persons who, by the supreme law of the land, are incapable of becoming citizens; and their votes have been used to inaugurate a new policy, hostile to the South, and destructive of its beliefs and safety.

From The (South Carolina) State editorial page-

Secessionists were clear about their cause: slavery

Thursday, Dec. 16, 2010

What we found most striking in rereading the Declaration was the complete absence of any other causes. After laying out the argument that the states retained a right to secede if the Union did not fulfill its constitutional and contractual obligations, the document cited the one failing of the United States: its refusal to enforce the constitutional provision requiring states to return escaped slaves to their owners. “This stipulation was so material to the compact,” the document declares, “that without it that compact would not have been made.”

Bipartisanship vs. Democracy: The President and the Third Way Fallacy

Richard (RJ) Eskow, Huffington Post

Posted: December 15, 2010 11:49 AM

Today the country’s real center — the commonly-held set of goals and aspirations shared by Democrats, Republicans, and independents alike — has never been farther from the narrow right-leaning viewpoint that’s still being peddled as a “centrism.” If the White House and other Democrats buy into that illusion, as they seem to be doing, they’ll lose the country.

…

I feel safe in predicting that “No Labels” will revolutionize American politics every bit as much as Unity08 did. That is, it’s going to be announced with great fanfare — fanfare that’s generated by the highly-paid efforts of Washington publicists. It will then be received enthusiastically by the David Broder crowd, and nobody else. Within six months it will have been forgotten by the few people who had ever even heard of it in the first place.

“No Labels” is the latest reflection of a deep-seated yearning among Washington insiders: the yearning to fuse the leadership of both parties into a unitary political order, one that can dispense with bothersome chores like justifying your actions to the public. Washington “centrists” are the One Worlders of American politics, dreaming of a Utopia governed by a Council of Elders.

…

There’s a real bipartisan consensus in the nation — to protect Social Security, tax the wealthy, preserve Medicare, improve banking regulations, and ban big bonuses at banks which were rescued by the taxpayers. The ersatz ‘centrism’ being peddled in Washington is on the wrong side of every single issue. It would turn the leadership of the country over to people on the red, rightmost side of the chart, restricting the debate to the best way of implementing these unpopular positions.

No wonder 70% of people surveyed are “somewhat” or “deeply dissatisfied” with the way Washington works. The political consensus doesn’t represent them, and these “solutions” would merely institutionalize that lack of representiation.

…

We saw the electoral fruits of the Third Way fallacy in November’s election. Democrats who embraced it were seen as representing nothing in particular, so they were judged by the status quo — a status quo that was made worse by “centrist” policies. Now we’re seeing an ever-widening gap between the public’s wishes and a Republican/Democratic/media elite that refuses to accept or acknowledge them. That’s a recipe for bad policy, and politically it’s a one way ticket for the Democratic Party to receive the Mother of All Shellackin’s in 2012.

There are a lot of sad things in this piece, but also some fundamental misconceptions one of which is that while this austerity asshole City Manager is allowed to cry poverty in order to break the police and fire unions.

Michigan has offered Hamtramck a variety of loans to keep it solvent, but Cooper has said he doesn’t want the city to take on more debt. It’s already paying $600,000 a year on bonds issued during another financial crisis a decade ago.

But with pressure building, City Hall was awash in speculation this week that Cooper would finally bend and accept a loan from the state. Still, even that would only postpone a day of reckoning, the city manager asserted.

…

For now, the well-meaning citizens of Hamtramck — police officers, firefighters, tree trimmers and trash collectors — are effectively draining the city’s finances, with nothing short of a potential collapse in sight.

You see, you’re just bloodsucking ticks on the tit of capitalism.

Well, it’s been longer coming than I expected but we finally have Part 2 of L. Randall Wray’s ‘Smoking Gun’ on Title Fraud available.  My treatment of the first part is here.

This one discusses the fatal flaws in the Securitization procedures for Mortgage Backed Securities and the multi-Trillion dollar exposure of the To Big To Fail Banks to defrauded holders of those worthless scraps of paper.

Worthless except for the fact that they are legally binding contracts which the Banks have agreed (legally) to buy back if there are flaws or fraud in the Banks’ representations of value.

The 2 things that give me some hope in this process is that the players holding the short end of the stick (the ones defrauded by the Banks) are financial heavy hitters who are just about as large as the Banks- PIMCO, Blackrock, The Federal Reserve Bank of New York; AND that the bulk of the action will take place in New York State Court instead of at the federal level where everyone in Washington seems to have been issued kneepads for Bankster Butt-licking.

Anatomy of Mortgage Fraud, Part II: The Mother of All Frauds

L. Randall Wray, Huffington Post

Posted: December 13, 2010 10:58 AM

By itself, all of this is a horrific scandal, involving up to 65 million mortgages — the number of mortgages registered at MERS, most of which presumably were subjected to MERS’s guidelines and extremely sloppy record-keeping. But like Shrek’s onion, it is much more complicated than that — with layer after layer of fraud piled on fraud. There are many angles to be explored, most of them too complex and arcane to be pursued in a short column. Here, in part two, I will discuss the implications for the securities that bundled the fraudulent mortgages registered at MERS. Not only did MERS defraud the counties out of their recording fees and the homeowners out of their homes, but it also helped to perpetrate securities fraud and federal tax fraud. Fortunately for the investors in these securities, the securitization process was fatally flawed, meaning that they can return to the issuing banks and demand their money back. But that implies, of course, that the banksters are hopelessly insolvent — on the hook for hundreds of billions of dollars.

Inevitably, they will turn to Uncle Sam for more handouts. Get ready for more backroom deals made by the Fed and Treasury to rescue firms like Bank of America. If you loved the first three rounds of this financial crisis, you will love the next six rounds as markets pummel Wall Street banks, with Uncle Sam as referee applying the smelling salts to revive it for yet another round (whilst its CEOs skim more billions off the top in compensation). Ultimately, it will not work. Wall Street will go down for the count — but probably not until it drags Main Street through a great depression that your great grandkids will study in the history books. And, by the way, they will laugh at the misguided efforts of the thoroughly compromised one-term Obama administration that focused its efforts at budget-balancing in the face of the worst headwinds America had ever seen.

…

But, as always with the Wall Street onion, things are worse when we dig deeper. Almost all of the residential mortgage backed securitizations were done under New York state law — which is even stricter than the REMIC requirements. That law wanted to make the securities as safe as possible, “bankruptcy remote” so that if the issuing banks failed, bank creditors could not come after the securitized mortgages — to seize the notes and recover losses. This is why it was essential that the notes and mortgages be physically conveyed to the trustees. Remember that the major banks are also owners of the servicers — so if the servicers retain the notes and the bank fails, the bank’s creditors might be able to claim the notes and mortgages. So according to NY state law it is the “Pooling and Servicing Agreement” that governs the securizations. These require that the notes and mortgages are held by the REMIC trustee. Indeed, they require that the trustee check to make sure all notes are conveyed; if there are any mortgages included in the “pool” without proper paperwork, then they must be replaced by mortgages with notes. All of this is supposed to be certified by the trustee as completed — usually within about six months. (For an excellent explanation of the details, see Yves Smith)

We now know beyond question that the notes were not typically transferred — both MERS’s own document as well as court testimony by top management of servicers make it clear that the “customary” practice was for the servicers to retain the notes. We also know that almost all securitizations were done in NY. And we know that the PSAs required transfer of the notes to the trustees — who were required to certify that this was done. From this we can conclude that a) the trustees either did not perform the certification, or they lied, and b) the securities are no good. Probably most of them; maybe all of them. Fraudulent.

…

The servicers are now "misplacing" all the documents, including the notes, associated with the mortgages on which they are foreclosing. The hope is that MERS and the mortgage servicing banks can get the properties, dispose of them in firesales, and pay pennies on the dollar to securities holders before they discover they’ve been scammed from here to Pluto. Hence it would seem the notes were not really lost, but rather are being destroyed to cover the fraud. And if this is true, MERS and the big banks are conspiring to commit foreclosure fraud as they destroy documents and create new counterfeit paper trails.

…

To recap, MERS’s own documents demonstrate beyond question:

1. The notes were never transferred, as required by Federal and NY state law, to the trustees of the REMICs;
2. At best, the notes were retained by the mortgage servicers as directed by MERS (many never left the mortgage brokers, many of whom are now bankrupt);
3. MERS claims to own the notes and therefore the mortgages to speed foreclosure;
4. Actually, MERS does not hold the notes, which are held by servicers, but MERS instead “deputizes” employees of the servicers so that it can claim notes are transferred “in house” to avoid paying recording fees as well as avoiding maintenance of clear chains of title;
5. On foreclosure, the documents are “disappeared” because they demonstrate the notes were never endorsed and transferred as required by law, with MERS and the servicers filing “lost note affidavits” to dupe the judges into allowing illegal foreclosures to proceed and to dupe securities holders so that they do not demand restitution;
6. Servicers ensure homeowners default, as they “lose” mortgage payments, credit them to the wrong accounts, or helpfully recommend to homeowners that they stop making payments–all of this is to speed foreclosure to ensure securities holders do not realize they have been duped as they are paid pennies on the dollar for toxic securities;
7. This also ensures that the investment banks that originated the toxic securities win their credit default swap bets they placed against the homeowners, with favored hedge fund managers like Paulson also winning CDO bets on failures;
8. The faster the foreclosures can be processed through manufacture of fraudulent documents by Robo-signers, the lower the chance that MERS and all of its clients will be brought to justice.

There is a community of interests that can bring together the securities holders (including PIMCO and the NYFed) and the defrauded homeowners to stop the illegal foreclosures. The best thing for the investors is to demonstrate that the securities are fraudulent because the underlying mortgages did not meet the representations and because the notes were not legally transferred.

…

Since the securities investors will be able to force the banksters to take back the securities, the loss minimizing solution for banks is to stop the foreclosures that are depressing real estate prices. That can then buy time to modify the mortgages to ensure homeowners can stay in the homes and service their debt. Instead, the banks are pushing for Congress to retroactively legalize the frauds they perpetrated against counties, borrowers, and investors. As always, Wall Street wants someone else to pay for its crimes — and is willing to destroy the property rights that are fundamental to a system based on private property in order to protect CEO compensation on Wall Street.

Here is the alternative solution President Obama needs to consider.

• An immediate moratorium on foreclosures of any mortgages that are, or ever were, registered at MERS;
• Declare all outstanding fraudulent securities null and void, require securitizing banks to make restitution to investors, and sue the banks for restitution of the back taxes owed by REMICs;
• If this makes the banks insolvent, begin to resolve them, shutting them down;
• Prohibit Fannie and Freddie and any chartered bank from dealing with MERS, which is an organization formed to perpetrate fraud;
• Investigate MERS for fraudulent activity, require restitution of all county recording fees that were evaded, and punish the guilty;
• Formulate a policy to help homeowners who have been victims of lender fraud, with a goal of reducing mortgage payments to something they can afford; and
• Let Congress know he will veto any legislation that legalizes the fraud perpetrated by MERS, by mortgage servicers, and by originating and securitizing banks.

These actions will help to restore the rule of law, while punishing the guilty. And stopping (illegal) foreclosures will reduce the pressure on real estate prices. By itself this will not put the US on the road to recovery, but it is certainly a step in the right direction.

Wray promises a Part 3.