When most of us look in the mirror what we see is the reverse image of our self, but sometimes we even miss that reality.
And this is exactly the problem that Bernanke and the FED are experiencing, the illusion, that he can save the economy by taking the country further into debt. The more money the FED creates becomes a larger burden on us, the US taxpayers.
How much can we undertake while the economy languished on the edge of total collapse?
Psychiatrists agree that our government is actually insane, why? Because the very definition of insanity is to do the same thing over and over and to expect a different outcome, surely Ben Bernanke and the FED meet this standard.
Through the first quarter of this year, Bernanke printed $1.5 trillion of paper currency and promptly bought $1.5 trillion in mortgage bonds, government agency bonds, and Treasury bonds. Now these bonds are an obligation imposed on the US taxpayers, who by the way are mainly economically indisposed.
But even as the entire effort was a failure, Bernanke is at it again.
If Fed Chairman Ben Bernanke honestly believes what he said at Jackson Hole on Friday — that he can save the economy by printing more money and buying more bonds — he needs to see a psychiatrists, the indication of this attempt to bolster the economy by acquiring more of the banks products, hasn’t stimulated the economy one bit. In fact the opposite has actually occurred, and hiding the true numbers of America’s unemployed is like an ostrich burying its head in the sand. Unemployment doesn’t go away simply because of wishful thinking.
America needs jobs, real jobs to jump start the economy, and the illusion that jobs are being created won’t make the economy stronger. But where will these jobs come from?
One approach is to make it more expensive for companies that are outsourcing American jobs, through higher taxation, this is a real solution! Inflating the economy will have a dire consequence, higher prices and a deeper prolonged depression, that’s right depression!
Lessons were learned from the 1930’s but it takes an intellect to read what the government did to stimulate the economy, and after all what it took in the end hasn’t worked today, it took a world war… today our war efforts haven’t been able to stimulate the economy even though we have become a nation perpetually at war, why, because even our weapons and weaponry are outsourced, it appears even our own government has a greater interest in the world economy, lacking a real insight or concern for its own people!
Bernanke is a man that sees a different image in the mirror, and that image speaks a different language.
It will take a different administration to solve the problems facing America, doing the same thing over and over always results in the same outcome and Obama has yet to understand economics 101, but then, neither has our economist Bernanke.
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Monday, August 30, 2010
Monday, June 14, 2010
“The New Trend: Default On Your Mortgage And Stay In Your House”
I read Reuters Blogger Felix Salmon’s article entitled “The New Trend: Default On Your Mortgage And Stay In Your House” my comments follow!
I was truly amazed at the comments from his readers who simply don’t get it, and it is frightening to say the least about the level of unawareness that prevails among our culture.
As I stated in a similar article: “Living rent free and loving it”
“The Obama administration was more intent to save the banks, and did so against the very interest of the American family. Why do I say this, the government came to the rescue of the very culprit that caused the problem, (the Banks) with an astonishing $787 bn., and the insurance carrier that was allowing the foreclosures to continue, AIG with an additional $180bn.
“AIG was the guarantor of the Derivatives that paid the banks when a borrower defaulted. By providing AIG some 180 Billion dollars, the government not only allowed the banks to continue foreclosing on American borrowers, but promoted it, because when a default was reported to AIG, they paid the full amount of the loss, thanks to Timothy Geithner. If AIG would have been allowed to collapse, or paid to Wall Street insiders 25 cents on the dollar there would have been NO incentive to foreclose in the volume the banks pursued.
“Now another scenario presents itself in retrospect, the main problem facing borrowers today is the high interest rates, and over valuations of their property. In short most borrowers are under water, in some areas, like Nevada, this state of mortgage reality is as much as 80%. If the administration and indeed congress gave a rats hair about America rather that their beneficiaries, they would have made the money available to borrowers to pay to the banks for a loan modification and principal reduction. If they had Washington Mutual would still be around, as would Indymac. What congress in their ignorance have done, is to guarantee that the too big to fail got even larger.
“But they didn’t have the American public’s interest on their mind did they? And bank failures and consolidation is ongoing. If they had both the Banks and the public interest on their compass they would have been bailed out simultaneously, and then there would have been no depression. A much lower level of foreclosures, and sanity would have prevailed.
“As it now stands, millions of homes have already been foreclosed and millions more are waiting in the wings, the unemployment level is a real 63million representing 40% of the workforce. The economy is trudging along on one foot as those who have stopped making mortgage payments are actually, bless them, spending their money buying things they had put off to make instead their overpriced mortgage, and 30,000 good people are filing bankruptcy each and every week.
Now something to think about: what value did America have invested in Wall Street? And what advantage did America receive from Wall Street being bailed out for a second time?
And everyone knows it will happen again!”
Anyone who really believes that the public was wrong and the banks were the good guys, should read all the information that has been developed about the Banks and the FRAUD they perpetuated on an “unsuspecting” Public, the banks knew these loans would never be repaid, and they didn’t care as they sold these loans as securities and took out default insurance, think “CDS” consumers basically uneducated to the intricate mortgage loan documents relied on their bank or mortgage company, and a lot of seniors also did. And they were conned!
Countrywide and several other banks have already been sued by the Attorneys General of several states over “Fraudulent intent” and they are making modifications with principal reductions under court orders.
The Banks failed to explain the ramifications on such loans as option arms where the borrower only qualified for a payment less than his interest and the difference was added back increasing the principal of the loan. The Banks didn’t care as they planned this bubble to continue indefinitely and were looking already to a refinance where they made additional points.
For those who still side with the banks, try studying the history of banking, it has always been laden with unscrupulous individuals; perhaps it will enlighten you, or perhaps not!
I was truly amazed at the comments from his readers who simply don’t get it, and it is frightening to say the least about the level of unawareness that prevails among our culture.
As I stated in a similar article: “Living rent free and loving it”
“The Obama administration was more intent to save the banks, and did so against the very interest of the American family. Why do I say this, the government came to the rescue of the very culprit that caused the problem, (the Banks) with an astonishing $787 bn., and the insurance carrier that was allowing the foreclosures to continue, AIG with an additional $180bn.
“AIG was the guarantor of the Derivatives that paid the banks when a borrower defaulted. By providing AIG some 180 Billion dollars, the government not only allowed the banks to continue foreclosing on American borrowers, but promoted it, because when a default was reported to AIG, they paid the full amount of the loss, thanks to Timothy Geithner. If AIG would have been allowed to collapse, or paid to Wall Street insiders 25 cents on the dollar there would have been NO incentive to foreclose in the volume the banks pursued.
“Now another scenario presents itself in retrospect, the main problem facing borrowers today is the high interest rates, and over valuations of their property. In short most borrowers are under water, in some areas, like Nevada, this state of mortgage reality is as much as 80%. If the administration and indeed congress gave a rats hair about America rather that their beneficiaries, they would have made the money available to borrowers to pay to the banks for a loan modification and principal reduction. If they had Washington Mutual would still be around, as would Indymac. What congress in their ignorance have done, is to guarantee that the too big to fail got even larger.
“But they didn’t have the American public’s interest on their mind did they? And bank failures and consolidation is ongoing. If they had both the Banks and the public interest on their compass they would have been bailed out simultaneously, and then there would have been no depression. A much lower level of foreclosures, and sanity would have prevailed.
“As it now stands, millions of homes have already been foreclosed and millions more are waiting in the wings, the unemployment level is a real 63million representing 40% of the workforce. The economy is trudging along on one foot as those who have stopped making mortgage payments are actually, bless them, spending their money buying things they had put off to make instead their overpriced mortgage, and 30,000 good people are filing bankruptcy each and every week.
Now something to think about: what value did America have invested in Wall Street? And what advantage did America receive from Wall Street being bailed out for a second time?
And everyone knows it will happen again!”
Anyone who really believes that the public was wrong and the banks were the good guys, should read all the information that has been developed about the Banks and the FRAUD they perpetuated on an “unsuspecting” Public, the banks knew these loans would never be repaid, and they didn’t care as they sold these loans as securities and took out default insurance, think “CDS” consumers basically uneducated to the intricate mortgage loan documents relied on their bank or mortgage company, and a lot of seniors also did. And they were conned!
Countrywide and several other banks have already been sued by the Attorneys General of several states over “Fraudulent intent” and they are making modifications with principal reductions under court orders.
The Banks failed to explain the ramifications on such loans as option arms where the borrower only qualified for a payment less than his interest and the difference was added back increasing the principal of the loan. The Banks didn’t care as they planned this bubble to continue indefinitely and were looking already to a refinance where they made additional points.
For those who still side with the banks, try studying the history of banking, it has always been laden with unscrupulous individuals; perhaps it will enlighten you, or perhaps not!
Friday, June 4, 2010
The Difference between Bribery and Lobbying; a conundrum
While shades of Jack Abramoff still cover the windows of congress what they fail to illustrate is just how far lobbyists can go. What remain still unaddressed are the ramifications of the money Wall Street pumps into the coffers of our legislators. A congressman or woman can enter Washington Politics with mediocre means and leave a multi millionaire.
But, Power, money, and politics always have the potential to mix into a toxic brew, and for those looking to gain the legislative edge; the rules leave enough loopholes to do so within the bounds of the law, a law designed specifically for that purpose.
Lobbying is a broad based concept, so broad, and ambiguous that lobbyists actually have the edge, including the ability to have their own attorneys draft legislation that becomes law.
And the rewards for our politically privileged are ominous, for example:
The American Bankers Association invested $1.8 million lobbying the federal government in the first quarter to prevent several key issues of sweeping legislation to overhaul financial institutions from being passed by the House and Senate.
The banking industry's biggest trade group lobbied Congress and federal agencies on the financial overhaul legislation as well as accounting rules, new requirements for credit card issuers, small business lending, bankruptcy legislation, insurance, retirement savings and taxes. In addition to the House and Senate, the bankers' group also had lobbying contacts with the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, and the White House, according to a disclosure form filed April 20 with the Senate's public records office.
Among the group's members are Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and U.S. Bancorp. The association represents major financial institutions as well as regional, community and small banks.
Paying someone for their vote even though it is considered lobbying is just another way to say Bribery even if no money is exchanged at the moment, but only a promise for future support.
Lobbyists are like insects, they multiply and there is no clear method to exterminate them.
But, Power, money, and politics always have the potential to mix into a toxic brew, and for those looking to gain the legislative edge; the rules leave enough loopholes to do so within the bounds of the law, a law designed specifically for that purpose.
Lobbying is a broad based concept, so broad, and ambiguous that lobbyists actually have the edge, including the ability to have their own attorneys draft legislation that becomes law.
And the rewards for our politically privileged are ominous, for example:
The American Bankers Association invested $1.8 million lobbying the federal government in the first quarter to prevent several key issues of sweeping legislation to overhaul financial institutions from being passed by the House and Senate.
The banking industry's biggest trade group lobbied Congress and federal agencies on the financial overhaul legislation as well as accounting rules, new requirements for credit card issuers, small business lending, bankruptcy legislation, insurance, retirement savings and taxes. In addition to the House and Senate, the bankers' group also had lobbying contacts with the Treasury Department, the Federal Reserve, the Securities and Exchange Commission, and the White House, according to a disclosure form filed April 20 with the Senate's public records office.
Among the group's members are Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and U.S. Bancorp. The association represents major financial institutions as well as regional, community and small banks.
Paying someone for their vote even though it is considered lobbying is just another way to say Bribery even if no money is exchanged at the moment, but only a promise for future support.
Lobbyists are like insects, they multiply and there is no clear method to exterminate them.
Can the Strategic Defaulters save the US Economy?
The private sector remains in a catatonic state, searching for a bottom line to justify the reemployment of American workers. Yet even as the economy is temporarily jarred by strategic defaulters, the concern of economists has been, will they be enough to sustain the economy long term?
And as serious as this question is, it boils down once again to Wall Street. Whether these strategic defaulters can save the economy long term will depend on the banks, the longer they take to foreclose and evict the more than 8 million homeowners now in default, and those who come after them, the longer the temporary surge in retail sales will be sustained, although it has been flat for the past 3 months, it is sustaining some semblance of an economic recovery even without job growth.
The Banks are so over whelmed with the volume of defaults that the time to foreclose has been extended, now exceeding 14 and approaching 20 months. But as more homeowners make that decision to join in the movement and stop making their mortgage payments the time to foreclose will only be extended until Wall Street finally concedes.
And amid the volume of defaults banks like BoA have begun to rethink what they have done to us, and in an effort to make peach with their borrowers and avert a real back lash they are attempting to initiate a real loan modification program. They are reducing not only the interest rate, and the monthly payment but the principal to a more realistic valuation. If their program is successful, which every consideration says it should be BoA could be the first bank to actually help put America back to work.
Defaulting loans are placing a financial strain on all banks, and perhaps this is really sending a message to Wall Street. Meanwhile those who make that determination to simply stop making their mortgage payments have become the new American Heroes.
We need time, and the strategic defaulters may have just bought it for us.
And as serious as this question is, it boils down once again to Wall Street. Whether these strategic defaulters can save the economy long term will depend on the banks, the longer they take to foreclose and evict the more than 8 million homeowners now in default, and those who come after them, the longer the temporary surge in retail sales will be sustained, although it has been flat for the past 3 months, it is sustaining some semblance of an economic recovery even without job growth.
The Banks are so over whelmed with the volume of defaults that the time to foreclose has been extended, now exceeding 14 and approaching 20 months. But as more homeowners make that decision to join in the movement and stop making their mortgage payments the time to foreclose will only be extended until Wall Street finally concedes.
And amid the volume of defaults banks like BoA have begun to rethink what they have done to us, and in an effort to make peach with their borrowers and avert a real back lash they are attempting to initiate a real loan modification program. They are reducing not only the interest rate, and the monthly payment but the principal to a more realistic valuation. If their program is successful, which every consideration says it should be BoA could be the first bank to actually help put America back to work.
Defaulting loans are placing a financial strain on all banks, and perhaps this is really sending a message to Wall Street. Meanwhile those who make that determination to simply stop making their mortgage payments have become the new American Heroes.
We need time, and the strategic defaulters may have just bought it for us.
Monday, May 24, 2010
Wall Street Reforms Congress
The legislation intended to reform the financial system and as it passed the Senate and House have so many loopholes place in it by congresses Wall Street handlers, that this legislation is a complete sham.
Not only will it not prevent other crises and more taxpayer bailouts in the future, but it guarantees it.
The legislation is full of gaps, and loopholes, but more importantly many provisions of the Law depend on the “effectiveness” of regulatory agencies, who failed to over see the financial sector and mishandled the blooming bubble that took Wall Street and America to the brink of collapse.
A big reason for the bill's limitations is that Wall Street banks and industry groups lobbied against rules they felt would reduce Wall Streets profit-making ability, such things as derivatives, those same instruments that collapsed the mortgage security network. The financial sector's influence in Washington reflects its massive donations and lobbying efforts, what you and I ceremoniously call Bribes.
Over the past two decades, the Banks and their lobbyists have given more than $2.3 billion to federal candidates; one more time, $2.3 Billion dollars to bribe Federal Candidates.
Since 1998, this group has invested $3.8 billion in “gifts” in the form of Bribes to Washington ’s most elite,
Is there any wonder, when Congress finds itself dealing with Insurance companies, Big Pharma, Wall Street, or the Military Industrial Complex, America looses.
America needs a lobby in Washington , but not the kind we see controlling congress with lavish bribes. America needs a lobby that will intimidate the insiders, by giving money to their opposition Office seekers seem to understand one thing, ”Money” because to Washington Money brings power.
Not only will it not prevent other crises and more taxpayer bailouts in the future, but it guarantees it.
The legislation is full of gaps, and loopholes, but more importantly many provisions of the Law depend on the “effectiveness” of regulatory agencies, who failed to over see the financial sector and mishandled the blooming bubble that took Wall Street and America to the brink of collapse.
A big reason for the bill's limitations is that Wall Street banks and industry groups lobbied against rules they felt would reduce Wall Streets profit-making ability, such things as derivatives, those same instruments that collapsed the mortgage security network. The financial sector's influence in Washington reflects its massive donations and lobbying efforts, what you and I ceremoniously call Bribes.
Over the past two decades, the Banks and their lobbyists have given more than $2.3 billion to federal candidates; one more time, $2.3 Billion dollars to bribe Federal Candidates.
Since 1998, this group has invested $3.8 billion in “gifts” in the form of Bribes to Washington ’s most elite,
Is there any wonder, when Congress finds itself dealing with Insurance companies, Big Pharma, Wall Street, or the Military Industrial Complex, America looses.
America needs a lobby in Washington , but not the kind we see controlling congress with lavish bribes. America needs a lobby that will intimidate the insiders, by giving money to their opposition Office seekers seem to understand one thing, ”Money” because to Washington Money brings power.
Sunday, May 9, 2010
Bank control of congress and the White House, pays off big time for Wall Street
The US Senate has more interest in the big pools of money the banks funnel for campaigns through their lobbyists, than for the people who elect them to office.
This was exemplified last night (May 7) when the Senate rejected the single most important element of Wall Street reform, being able to break up the “too big to fail banks” the Senate rejected this provision by a vote of 33 to 61; 27 Democrats joined all but three Republicans to vote against breaking up the banks.
The 61 votes against the measure are votes in favor of Wall Street's continuing stranglehold over our economy. But more importantly it allows business as usual on Wall Street, and without fear of government reprisal. It also guarantees future bail outs when they become necessary. (And they will)
At the same time, the Senate also voted down a $50 billion Wall Street tax that would have been used to fund the cost of shutting down a major failing bank, assuring future taxpayer funding when a “too big to fail” bank again finds itself in trouble.
By rejecting both the break-up bill and the bank tax, Wall Street has emerged as a clear winner and shown what clout and control they have over the US political system and particularly over congress, and the president.
President Obama who strongly opposed both the tax and the break-up measures, hosted J.P. Morgan Chase CEO Jamie Dimon for dinner at the White House on Monday. J.P. Morgan is the largest U.S. bank, and spent more money on lobbying in 2009 than any other bank. House Minority Leader John Boehner (R-OH) has aggressively courted Dimon for campaign cash, as has Obama
It seems that money is more important to congress and the president, that the interests of the nation!
The failure of congress to address the banking problems in the US and to protect the interest of the American people over their benefactors, have assured further reckless behavior from these mega financial institutions.
By allowing the megabanks to remain super-sized, Congress has insulated them from the fallout associated with the Fed disclosures, and given them a tool to fight other reforms. Our giant financial institutions are not only too-big-to-fail they are now too-big-to-regulate!
No matter what else Congress may “ultimately” enact, in the name of Bank reform, Congress has decided that it will not confront the single greatest problem and threat to the U.S. economy: the “Too Big To Fail banks”.
If any meaningful legislation is passed it will be a total surprise.
Perhaps the issue of “too big to fail” will ultimately be address by a different forum, the American People themselves who after all have the last word.
Following is a list of Senators, who voted to protect the banks against the interest of the American people, its time to retire each and ever one of them.
Akaka (D-HI);
Alexander (R-TN);
Barrasso (R-WY)
Baucus (D-MT);
Bayh (D-IN);
Bennet (D-CO);
Bond (R-MO);
Brown (R-MA);
Brownback (R-KS);
Burr (R-NC);
Carper (D-DE);
Chambliss (R-GA);
Cochran (R-MS);
Collins (R-ME);
Conrad (D-ND);
Corker (R-TN)
Cornyn (R-TX);
Crapo (R-ID);
Dodd (D-CT);
Enzi (R-WY);
Feinstein (D-CA);
Gillibrand (D-NY);
Graham (R-SC);
Grassley (R-IA);
Gregg (R-NH);
Hagan (D-NC)
Hatch (R-UT);
Hutchison (R-TX);
Inhofe (R-OK);
Inouye (D-HI);
Isakson (R-GA);
Johanns (R-NE)
Johnson (D-SD);
Kerry (D-MA);
Klobuchar (D-MN)
Kohl (D-WI);
Kyl (R-AZ);
Landrieu (D-LA)
Lautenberg (D-NJ);
LeMieux (R-FL);
Lieberman (ID-CT);
McCain (R-AZ);
McCaskill (D-MO);
McConnell (R-KY);
Menendez (D-NJ);
Murkowski (R-AK)
Nelson (D-FL);
Nelson (D-NE);
Reed (D-RI);
Risch (R-ID);
Roberts (R-KS);
Schumer (D-NY);
Sessions (R-AL);
Shaheen (D-NH);
Snowe (R-ME);
Tester (D-MT);
Thune (R-SD);
Udall (D-CO);
Voinovich (R-OH)
Warner (D-VA);
Wicker (R-MS)
But equally important remember that Obama as well is financially beholden to the mega bank interests.
This was exemplified last night (May 7) when the Senate rejected the single most important element of Wall Street reform, being able to break up the “too big to fail banks” the Senate rejected this provision by a vote of 33 to 61; 27 Democrats joined all but three Republicans to vote against breaking up the banks.
The 61 votes against the measure are votes in favor of Wall Street's continuing stranglehold over our economy. But more importantly it allows business as usual on Wall Street, and without fear of government reprisal. It also guarantees future bail outs when they become necessary. (And they will)
At the same time, the Senate also voted down a $50 billion Wall Street tax that would have been used to fund the cost of shutting down a major failing bank, assuring future taxpayer funding when a “too big to fail” bank again finds itself in trouble.
By rejecting both the break-up bill and the bank tax, Wall Street has emerged as a clear winner and shown what clout and control they have over the US political system and particularly over congress, and the president.
President Obama who strongly opposed both the tax and the break-up measures, hosted J.P. Morgan Chase CEO Jamie Dimon for dinner at the White House on Monday. J.P. Morgan is the largest U.S. bank, and spent more money on lobbying in 2009 than any other bank. House Minority Leader John Boehner (R-OH) has aggressively courted Dimon for campaign cash, as has Obama
It seems that money is more important to congress and the president, that the interests of the nation!
The failure of congress to address the banking problems in the US and to protect the interest of the American people over their benefactors, have assured further reckless behavior from these mega financial institutions.
By allowing the megabanks to remain super-sized, Congress has insulated them from the fallout associated with the Fed disclosures, and given them a tool to fight other reforms. Our giant financial institutions are not only too-big-to-fail they are now too-big-to-regulate!
No matter what else Congress may “ultimately” enact, in the name of Bank reform, Congress has decided that it will not confront the single greatest problem and threat to the U.S. economy: the “Too Big To Fail banks”.
If any meaningful legislation is passed it will be a total surprise.
Perhaps the issue of “too big to fail” will ultimately be address by a different forum, the American People themselves who after all have the last word.
Following is a list of Senators, who voted to protect the banks against the interest of the American people, its time to retire each and ever one of them.
Akaka (D-HI);
Alexander (R-TN);
Barrasso (R-WY)
Baucus (D-MT);
Bayh (D-IN);
Bennet (D-CO);
Bond (R-MO);
Brown (R-MA);
Brownback (R-KS);
Burr (R-NC);
Carper (D-DE);
Chambliss (R-GA);
Cochran (R-MS);
Collins (R-ME);
Conrad (D-ND);
Corker (R-TN)
Cornyn (R-TX);
Crapo (R-ID);
Dodd (D-CT);
Enzi (R-WY);
Feinstein (D-CA);
Gillibrand (D-NY);
Graham (R-SC);
Grassley (R-IA);
Gregg (R-NH);
Hagan (D-NC)
Hatch (R-UT);
Hutchison (R-TX);
Inhofe (R-OK);
Inouye (D-HI);
Isakson (R-GA);
Johanns (R-NE)
Johnson (D-SD);
Kerry (D-MA);
Klobuchar (D-MN)
Kohl (D-WI);
Kyl (R-AZ);
Landrieu (D-LA)
Lautenberg (D-NJ);
LeMieux (R-FL);
Lieberman (ID-CT);
McCain (R-AZ);
McCaskill (D-MO);
McConnell (R-KY);
Menendez (D-NJ);
Murkowski (R-AK)
Nelson (D-FL);
Nelson (D-NE);
Reed (D-RI);
Risch (R-ID);
Roberts (R-KS);
Schumer (D-NY);
Sessions (R-AL);
Shaheen (D-NH);
Snowe (R-ME);
Tester (D-MT);
Thune (R-SD);
Udall (D-CO);
Voinovich (R-OH)
Warner (D-VA);
Wicker (R-MS)
But equally important remember that Obama as well is financially beholden to the mega bank interests.
Friday, May 7, 2010
Another major fiasco by the Obama Administration coming soon to a bank near you
The Obama administration now proposes a new bailout for small and medium sized banks. This new bank bailout is in the form of a $30bn support program aimed at helping small business.
First and foremost $30bn will barely cover lunch! And certainly it won’t cover the executive bonus pools.
However setting that aside if this were really a plan to help small business, the appropriate source to provide these funds to would be the SBA, Small Business Administration. Or, The Small Business Investment Companies, (SBIC’s).
By providing the funds to small and medium sized banks, with the idea that they will loan the money to businesses, is like betting against the odds in Las Vegas, “it ain’t gonna happen” and either President Obama is a slow learner, as we just tried this concept with the Wall Street Banks, (and they have been using the money to play the Market) or there is an intent here to bail out these small and medium sized banks and possibly to prevent the remainder of the 700 still primed and ready to fail, from actually failing.
In remarks to reporters at the White House, President Obama said that the program had been expanded to include a new state “small business credit” that would support efforts by state governments to provide loans to small businesses. But where that money will come from is anybody’s guess. The states are still struggling just to stay afloat. So far President Obama has designed one failed program after another, and we are left to pick up the pieces.
In any event with Washington Politics, things are never as they seem.
First and foremost $30bn will barely cover lunch! And certainly it won’t cover the executive bonus pools.
However setting that aside if this were really a plan to help small business, the appropriate source to provide these funds to would be the SBA, Small Business Administration. Or, The Small Business Investment Companies, (SBIC’s).
By providing the funds to small and medium sized banks, with the idea that they will loan the money to businesses, is like betting against the odds in Las Vegas, “it ain’t gonna happen” and either President Obama is a slow learner, as we just tried this concept with the Wall Street Banks, (and they have been using the money to play the Market) or there is an intent here to bail out these small and medium sized banks and possibly to prevent the remainder of the 700 still primed and ready to fail, from actually failing.
In remarks to reporters at the White House, President Obama said that the program had been expanded to include a new state “small business credit” that would support efforts by state governments to provide loans to small businesses. But where that money will come from is anybody’s guess. The states are still struggling just to stay afloat. So far President Obama has designed one failed program after another, and we are left to pick up the pieces.
In any event with Washington Politics, things are never as they seem.
Friday, April 30, 2010
Financial Reform
Hundreds of lobbyists for banks and Wall Street, working with Republicans, have been working to block the reform bill currently winding its way through congress.
If ever bank reform is needed it’s now!
But Wall Street has not come to grips with the possibility that if a bill could pass in its current form, Wall Street will be restrained form gambling with our money! So far the banks that were provided Taxpayer assistance to prevent their filing bankruptcy have accumulatively invested more than $9 million to “bribe” congress to fight this bill.
A recent Fox report says, "About 25 Wall Street executives, many of them hedge fund managers, sat down for a private meeting with two of the most powerful Republican lawmakers in Congress: Senate minority leader Mitch McConnell of Kentucky, and John Cornyn, the senior senator from Texas who runs the National Republican Senatorial Committee, one of the primary fundraising arms of the Republican Party." (View the broadcast) http://www.foxbusiness.com/story/markets/industries/government/street-execs-pols-earful-financial-reform/
The Banks and their lobbyists are aligning themselves with the republican constituent in congress. Believing they are their best hope of watering down a bill that seeks to place them under control.
Under attack appears to be several important areas of concern that the Republicans, under the Banks influence will fight to their death. Those areas are (i) a 50 Billion dollar fund to break up “too big to fail banks” (ii) visibility for the lucrative derivatives market, and (iii) on how to protect consumers and (iv) how to set limits on previously unregulated exotic instruments such as derivatives.
Lobbying spending to block the bill by some of the biggest firms:
JP Morgan Chase & Co.; First quarter, 2010: $1,510,000 First quarter, 2009: $1,310,000 Citigroup: First quarter, 2010: $1,310,000, First quarter, 2009: $1,250,000;
Credit Suisse. First quarter, 2010: $1,190,000, First quarter, 2009: $470,000;
Goldman Sachs First quarter, 2010: $1,150,000, First quarter, 2009: $670,000
Wells Fargo; First quarter, 2010: $1,020,000, First quarter, 2009: $700,000;
Bank of America, First quarter, 2010: $940,000, First quarter, 2009: $820,000,
Morgan Stanley, First quarter, 2010: $810,000, First quarter, 2009: $540,000;
State Street First quarter, 2010: $380,000, First quarter, 2009: $210,000
CNN during a recent panel discussion described the lobbying process on Capitol Hill as the "Blob." Congressional staffers and lobbyists are the ones hashing out the final details of the financial reform bill. These same Congressional staffers and their bosses are indebted to the lobbyists, having accepted tens of millions in campaign contributions. There is absolutely no adversarial relationship on capital hill - everybody is on the same side of the page - and rarely is anybody at the table even an elected official.
Think about this, if the banks and those beholden to them in congress don’t want this bill passed, we do!!!
If ever bank reform is needed it’s now!
But Wall Street has not come to grips with the possibility that if a bill could pass in its current form, Wall Street will be restrained form gambling with our money! So far the banks that were provided Taxpayer assistance to prevent their filing bankruptcy have accumulatively invested more than $9 million to “bribe” congress to fight this bill.
A recent Fox report says, "About 25 Wall Street executives, many of them hedge fund managers, sat down for a private meeting with two of the most powerful Republican lawmakers in Congress: Senate minority leader Mitch McConnell of Kentucky, and John Cornyn, the senior senator from Texas who runs the National Republican Senatorial Committee, one of the primary fundraising arms of the Republican Party." (View the broadcast) http://www.foxbusiness.com/story/markets/industries/government/street-execs-pols-earful-financial-reform/
The Banks and their lobbyists are aligning themselves with the republican constituent in congress. Believing they are their best hope of watering down a bill that seeks to place them under control.
Under attack appears to be several important areas of concern that the Republicans, under the Banks influence will fight to their death. Those areas are (i) a 50 Billion dollar fund to break up “too big to fail banks” (ii) visibility for the lucrative derivatives market, and (iii) on how to protect consumers and (iv) how to set limits on previously unregulated exotic instruments such as derivatives.
Lobbying spending to block the bill by some of the biggest firms:
JP Morgan Chase & Co.; First quarter, 2010: $1,510,000 First quarter, 2009: $1,310,000 Citigroup: First quarter, 2010: $1,310,000, First quarter, 2009: $1,250,000;
Credit Suisse. First quarter, 2010: $1,190,000, First quarter, 2009: $470,000;
Goldman Sachs First quarter, 2010: $1,150,000, First quarter, 2009: $670,000
Wells Fargo; First quarter, 2010: $1,020,000, First quarter, 2009: $700,000;
Bank of America, First quarter, 2010: $940,000, First quarter, 2009: $820,000,
Morgan Stanley, First quarter, 2010: $810,000, First quarter, 2009: $540,000;
State Street First quarter, 2010: $380,000, First quarter, 2009: $210,000
CNN during a recent panel discussion described the lobbying process on Capitol Hill as the "Blob." Congressional staffers and lobbyists are the ones hashing out the final details of the financial reform bill. These same Congressional staffers and their bosses are indebted to the lobbyists, having accepted tens of millions in campaign contributions. There is absolutely no adversarial relationship on capital hill - everybody is on the same side of the page - and rarely is anybody at the table even an elected official.
Think about this, if the banks and those beholden to them in congress don’t want this bill passed, we do!!!
Legal chicanery and pitch darkness are the banker's stoutest allies.
Its show time again on Capital Hill, but this second round of show and tell won’t cut the muster! It will end as it always has, back to business as usual. Wall Street has gained to large a footprint in congress to be chastised in any meaningful manner. And there is no Ferdinand Pecora to take on the banks.
The hearings, like their counter part in the UK were and are for appearances, to placate rather than prosecute.
This show lacks the credibility of its famous counter part Ferdinand Pecora, and “sadly” there appears to be no real intent to prosecute anyone for anything, and there are a lot of good reasons to bring criminal charges.
What we are witnessing on Capital Hill is a fusillade to give the uneducated observer the appearance that something is going to be done about the banks and their reprehensible behavior. But don’t be misled! It will be back to business as usual as it has since the founding of the banking system. Banks tend to be corrupt, it is in their nature.
This is not the first time the Banks have produced chaos within our economy, and it will no doubt not be the last!
The bankers are involved in every aspect of their business even the agencies that oversee and control them, and from political office and its revolving door. Its always been the fox guarding the chickens, and over seeing other foxes. One has only to look back to the last fiasco the banks engineered to see where we are today.
Pecora launched a real investigation and interviewed such high-profile luminaries as Wall Street personalities Richard Whitney, president of the New York Stock Exchange, his brother, George Whitney (a partner in J.P. Morgan & Co.) and investment bankers Thomas W. Lamont, Otto H. Kahn, Albert H. Wiggin of Chase National Bank, and Charles E. Mitchell of National City Bank (now Citibank).
Even then Congress was on the payroll of the Morgan interests. But public outrage brought congress to its knees and meaningful regulation was passed. Glass Steagall held the banks in check until Greenspan watered it down on behalf of his real bosses, JP Morgan, and Morgan Guaranty Trust Co. another JP Morgan Company.
In his role at the FED, his primary function was to water down and rescind the Glass Steagall act, which he successfully accomplished.
Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, (sound familiar?) including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States) participated in stock offerings at steeply discounted rates.
Pecora also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, (as Goldman Sachs now stands accused) that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had helped themselves to $2.4 million in interest-free loans from the bank’s coffers.
Pecora's investigations highlighted the contrast between the lives of millions of Americans living in abject poverty and the high-rolling lives of such financiers as J.P. Morgan, Jr.
Under Pecora's insistent questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932;
And there were bombshells! New York Mayor Fiorello La Guardia’s revelations that a corporate publicist had over a ten-year period stuffed nearly $300,000 in the pocket of various journalists to ensure flattering coverage of certain companies. Today it’s members of Congress that accept money from the powerful Banking contingent.
Ferdinand Pecora, meticulously exposed Wall Street’s role in the crash. His famous inquisition of J.P. ‘Jack’ Morgan Jr., son of the financial titan, revealed the House of Morgan’s control over other financial institutions. There is no difference today, just different faces but the same mindset, and the same exertion of control by the same players. It will never end, until the American people stand up in numbers and say STOP.
The hearings, like their counter part in the UK were and are for appearances, to placate rather than prosecute.
This show lacks the credibility of its famous counter part Ferdinand Pecora, and “sadly” there appears to be no real intent to prosecute anyone for anything, and there are a lot of good reasons to bring criminal charges.
What we are witnessing on Capital Hill is a fusillade to give the uneducated observer the appearance that something is going to be done about the banks and their reprehensible behavior. But don’t be misled! It will be back to business as usual as it has since the founding of the banking system. Banks tend to be corrupt, it is in their nature.
This is not the first time the Banks have produced chaos within our economy, and it will no doubt not be the last!
The bankers are involved in every aspect of their business even the agencies that oversee and control them, and from political office and its revolving door. Its always been the fox guarding the chickens, and over seeing other foxes. One has only to look back to the last fiasco the banks engineered to see where we are today.
Pecora launched a real investigation and interviewed such high-profile luminaries as Wall Street personalities Richard Whitney, president of the New York Stock Exchange, his brother, George Whitney (a partner in J.P. Morgan & Co.) and investment bankers Thomas W. Lamont, Otto H. Kahn, Albert H. Wiggin of Chase National Bank, and Charles E. Mitchell of National City Bank (now Citibank).
Even then Congress was on the payroll of the Morgan interests. But public outrage brought congress to its knees and meaningful regulation was passed. Glass Steagall held the banks in check until Greenspan watered it down on behalf of his real bosses, JP Morgan, and Morgan Guaranty Trust Co. another JP Morgan Company.
In his role at the FED, his primary function was to water down and rescind the Glass Steagall act, which he successfully accomplished.
Pecora's investigation unearthed evidence of irregular practices in the financial markets that benefited the rich at the expense of ordinary investors, (sound familiar?) including exposure of Morgan’s “preferred list” by which the bank’s influential friends (including Calvin Coolidge, the former president, and Owen J. Roberts, a justice of Supreme Court of the United States) participated in stock offerings at steeply discounted rates.
Pecora also revealed that National City sold off bad loans to Latin American countries by packing them into securities and selling them to unsuspecting investors, (as Goldman Sachs now stands accused) that Wiggin had shorted Chase shares during the crash, profiting from falling prices, and that Mitchell and top officers at National City had helped themselves to $2.4 million in interest-free loans from the bank’s coffers.
Pecora's investigations highlighted the contrast between the lives of millions of Americans living in abject poverty and the high-rolling lives of such financiers as J.P. Morgan, Jr.
Under Pecora's insistent questioning, Morgan and many of his partners admitted that they had paid no income tax in 1931 and 1932;
And there were bombshells! New York Mayor Fiorello La Guardia’s revelations that a corporate publicist had over a ten-year period stuffed nearly $300,000 in the pocket of various journalists to ensure flattering coverage of certain companies. Today it’s members of Congress that accept money from the powerful Banking contingent.
Ferdinand Pecora, meticulously exposed Wall Street’s role in the crash. His famous inquisition of J.P. ‘Jack’ Morgan Jr., son of the financial titan, revealed the House of Morgan’s control over other financial institutions. There is no difference today, just different faces but the same mindset, and the same exertion of control by the same players. It will never end, until the American people stand up in numbers and say STOP.
Saturday, April 24, 2010
Wall Street’s culture of Deception (Part 1)
The unwary investor is made to believe - by a press owned by the very people who are part of the Wall Street scam that they can make a killing in the stock market if they get lucky. Over the years’ “outsiders”, small-time investors have lost billions of dollars to the “insiders” who control and manipulate the stock market.
The small time investor believes that the stock market goes up and down according to what he or she reads in the Wall Street Journal or hears about on their evening NEWS program: interest rates, inflation rates, wholesale prices, gross national product, public fears about foreign and domestic events, and the ranting of the head of the "Federal" Reserve Board.
This is all a game, a con to make the hapless investor believe that the rise and fall in stock prices is not being manipulated by the specialists. The fact is that specialists, working at the largest firms and hedge funds are creating the ups and downs of the market to bring them profits at the expense of the rest of us. In reality it’s the bankers and investment houses against the working class of America, and Congress and the While House allow this SCAM to continue.
This is how the Stock SCAM works
The insider buys stocks at the lowest possible price, using one of the magic tricks of the market called short selling (selling stocks you don't yet own in the hopes that the price will drop, so that you can purchase it back at a lower price; the difference between what you sold it for and what you purchased it back at is your profit): This parable was made famous by John D Rockefeller
That $20 million has to come from somewhere – and it does, it comes from the small investors who didn't have a clue about what was going on.
As an example, the Panamanian-registered Pilgrim Investment Trust, controlled by the Bush family, in April 2000 was about 78% long. By the end of 2000, they were 78% short, and, by the end of 2001, that trust was 98% short. In essentially the same short position was the Houston Energy Trust, another deep offshore Republican trust whose investors include Henry Kissinger, Paul Bremer, James Baker, and George Schultz.
Get the picture.
The small time investor believes that the stock market goes up and down according to what he or she reads in the Wall Street Journal or hears about on their evening NEWS program: interest rates, inflation rates, wholesale prices, gross national product, public fears about foreign and domestic events, and the ranting of the head of the "Federal" Reserve Board.
This is all a game, a con to make the hapless investor believe that the rise and fall in stock prices is not being manipulated by the specialists. The fact is that specialists, working at the largest firms and hedge funds are creating the ups and downs of the market to bring them profits at the expense of the rest of us. In reality it’s the bankers and investment houses against the working class of America, and Congress and the While House allow this SCAM to continue.
This is how the Stock SCAM works
The insider buys stocks at the lowest possible price, using one of the magic tricks of the market called short selling (selling stocks you don't yet own in the hopes that the price will drop, so that you can purchase it back at a lower price; the difference between what you sold it for and what you purchased it back at is your profit): This parable was made famous by John D Rockefeller
- Since they control the stock prices, they simply begin lowering the prices
- They "borrow" the stock from their or another brokerage firm's pool, with the understanding that at a later date they will return the shares
- The Wall Street Con Game News will announce that stock prices dropped sharply on light trading, which is a cover for the insiders' actual manipulation of the decrease in stock prices. The Insiders don't want heavy trading and straight-line lowering of stock prices, else they might have to buy a lot of stock at a higher price than desired. So they usually lower prices through a series of ups and downs of the market, dealing with small investors' shares as they go.
- The SEC rules prohibit NYSE members from "demoralizing the market by effecting short sales at or below a price lower than that of the last sale." But insiders have an “insider loophole” allowing them to sell short on downticks (drops in stock prices) without having to report these transactions as short sales. Those same SEC rules force the unsuspecting, small-time investor to sell short only on upticks - when stock prices are higher than the last preceding price. This is a very neat scam, and small time investors aren’t even aware that they have been had.
- They will wait until the stock prices reach a top price where they can realize windfall profits - let's say the stock reaches the price of $40 a share.
- At this point the insiders sell their million shares at $40 a share and receive $40,000,000. A profit of $20 million is easy if the con game is fixed in your favor.
That $20 million has to come from somewhere – and it does, it comes from the small investors who didn't have a clue about what was going on.
As an example, the Panamanian-registered Pilgrim Investment Trust, controlled by the Bush family, in April 2000 was about 78% long. By the end of 2000, they were 78% short, and, by the end of 2001, that trust was 98% short. In essentially the same short position was the Houston Energy Trust, another deep offshore Republican trust whose investors include Henry Kissinger, Paul Bremer, James Baker, and George Schultz.
Get the picture.
Wall Street’s culture of Deception (Part 2)
Bank Stock Value Manipulation:
We are now aware of Lehman Bros SCAM, where they would hide billions of dollars of bad debts by selling them prior to a required reporting period and buy them back directly after the report was filed. This is known now as end-of-quarter balance sheet manipulation, the purpose was to trick investors into thinking the Bank or investment house was less leveraged than it was.
This was a form of stock value manipulation, which is illegal! It also constitutes FRAUD on the investors, who would have sold their stock had they known the truth. It is concealing the true nature and value of the company and of its stock value.
Now as it turns out, almost of all of Wall Street is based on this same phony perception, having been caught using this same Ploy, Bank of America now claims there is nothing wrong with concealing in this manner its bad assets. We respectfully disagree!
Comparing Bank of America's "average quarterly assets" and "end of quarter assets" found that, in each quarter, billions of dollars of assets conveniently disappeared briefly at the end of the quarter, only to return again at the start of the next one.
Like Lehman, Bank of America found some legal loophole in some country somewhere that allowed them to momentarily hide tens of billions of dollars of assets somewhere where Wall Street wouldn't see them. And, naturally, Bank of America thinks it's perfectly acceptable: We believe this has been a common practice on Wall Street for sometime
For those that don’t know Repo 105, Lehman Bros asset disappearance program, it was a sale and repurchase agreement by which Lehman parked about 50 billion in assets (presumably assets they did not want to discuss) overnight via a repo transaction so they would not appear on the balance sheet. Who the counter party was has still not been disclosed.
But unfortunately the Lehman executives do have one point. Repo 105 type balance sheet faking was “an old trick” and well known to anyone who cared to read balance sheets (very) carefully.
With BoA they did the very same thing, the end period assets were always lower than the average assets. Moreover it was not obvious unless you really looked because the quarterly earnings releases did not include average assets (but you could work it out because they stated return on average assets.
Bank of America was parking its assets off balance sheet at the end of every quarter for some time and had been obscuring the fact.
There must be a Counterparty
If Bank of America wanted to shove the assets off balance sheet someone (credit worthy) needed to be found to house the assets overnight. There are not that many parties credit worthy for $50 billion or more of overnight repos.
Well BoA found such a willing participant the counterparty was MUFJ. If you look you can see – the same way that MUFJ had end period assets higher than average assets and that the differences and timing roughly match. Someone had to assist BofA in its financial manipulation and that was MUFJ. MUFJ stands for (Mitsubishi UFJ Financial Group)
About MUFJ
Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, they are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Co., Ltd. (MUS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS), and other subsidiaries.
Through its subsidiaries and affiliated companies, MUFG engages in a range of financial operations, including commercial banking, investment banking, trust banking and asset management services, securities businesses, and credit card businesses, and provides related services to individual and corporate customers. In July 2008, BTMU acquired 49.375% interest in JALCARD, Inc., a wholly owned subsidiary of Japan Airlines International Co., Ltd. In November 2008, BTMU completed the acquisition of all the interest in UnionBanCal Corporation (UNBC), and as a result, UNBC became a wholly owned indirect subsidiary of MUFG.
The Company manages the underwriting of debt and equity instruments for large corporations. It also provides arrangement services relating to private placements primarily for medium-sized enterprise issuers and institutional investors. The Company advises on financing methods to meet various financing needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities, securitization programs and syndicated loans. It also offers a range of products to meet fund management needs, such as deposits with derivatives, government bonds, debenture notes and investment funds. It also offers swaps, options and other risk-hedge programs to customers.
Well this is just the second Scam uncovered in the series, stay tuned.
We are now aware of Lehman Bros SCAM, where they would hide billions of dollars of bad debts by selling them prior to a required reporting period and buy them back directly after the report was filed. This is known now as end-of-quarter balance sheet manipulation, the purpose was to trick investors into thinking the Bank or investment house was less leveraged than it was.
This was a form of stock value manipulation, which is illegal! It also constitutes FRAUD on the investors, who would have sold their stock had they known the truth. It is concealing the true nature and value of the company and of its stock value.
Now as it turns out, almost of all of Wall Street is based on this same phony perception, having been caught using this same Ploy, Bank of America now claims there is nothing wrong with concealing in this manner its bad assets. We respectfully disagree!
Comparing Bank of America's "average quarterly assets" and "end of quarter assets" found that, in each quarter, billions of dollars of assets conveniently disappeared briefly at the end of the quarter, only to return again at the start of the next one.
Like Lehman, Bank of America found some legal loophole in some country somewhere that allowed them to momentarily hide tens of billions of dollars of assets somewhere where Wall Street wouldn't see them. And, naturally, Bank of America thinks it's perfectly acceptable: We believe this has been a common practice on Wall Street for sometime
For those that don’t know Repo 105, Lehman Bros asset disappearance program, it was a sale and repurchase agreement by which Lehman parked about 50 billion in assets (presumably assets they did not want to discuss) overnight via a repo transaction so they would not appear on the balance sheet. Who the counter party was has still not been disclosed.
But unfortunately the Lehman executives do have one point. Repo 105 type balance sheet faking was “an old trick” and well known to anyone who cared to read balance sheets (very) carefully.
With BoA they did the very same thing, the end period assets were always lower than the average assets. Moreover it was not obvious unless you really looked because the quarterly earnings releases did not include average assets (but you could work it out because they stated return on average assets.
Bank of America was parking its assets off balance sheet at the end of every quarter for some time and had been obscuring the fact.
There must be a Counterparty
If Bank of America wanted to shove the assets off balance sheet someone (credit worthy) needed to be found to house the assets overnight. There are not that many parties credit worthy for $50 billion or more of overnight repos.
Well BoA found such a willing participant the counterparty was MUFJ. If you look you can see – the same way that MUFJ had end period assets higher than average assets and that the differences and timing roughly match. Someone had to assist BofA in its financial manipulation and that was MUFJ. MUFJ stands for (Mitsubishi UFJ Financial Group)
About MUFJ
Mitsubishi UFJ Financial Group, Inc. (MUFJ), incorporated on April 2, 2001, they are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Co., Ltd. (MUS), Mitsubishi UFJ NICOS Co., Ltd. (Mitsubishi UFJ NICOS), and other subsidiaries.
Through its subsidiaries and affiliated companies, MUFG engages in a range of financial operations, including commercial banking, investment banking, trust banking and asset management services, securities businesses, and credit card businesses, and provides related services to individual and corporate customers. In July 2008, BTMU acquired 49.375% interest in JALCARD, Inc., a wholly owned subsidiary of Japan Airlines International Co., Ltd. In November 2008, BTMU completed the acquisition of all the interest in UnionBanCal Corporation (UNBC), and as a result, UNBC became a wholly owned indirect subsidiary of MUFG.
The Company manages the underwriting of debt and equity instruments for large corporations. It also provides arrangement services relating to private placements primarily for medium-sized enterprise issuers and institutional investors. The Company advises on financing methods to meet various financing needs, including loans with derivatives, corporate bonds, commercial paper, asset-backed securities, securitization programs and syndicated loans. It also offers a range of products to meet fund management needs, such as deposits with derivatives, government bonds, debenture notes and investment funds. It also offers swaps, options and other risk-hedge programs to customers.
Well this is just the second Scam uncovered in the series, stay tuned.
Thursday, April 15, 2010
Time out for common sense
The Fed and their economists and the media are reporting that we are in a recovery mode, merchants are selling products and consumers are spending money, and overall we are up 1%. Based on this information a stock market bubble has expanded, potentially ruining thousands of investors when this new bubble deflates abruptly.
And it will!
Common sense dictates that while we are given positive information, and especially where the government is concerned, there is always a flip side to analyze. That is unless you enjoy being led once again to the slaughter.
The Flip Side
The FED also reports that the job market hasn’t improved and remains at 9.7 percent, which equates to more than 17.3 million people still looking for a job. Yes we hear about the 162 thousands jobs created, such hyperbole has not gone unchallenged, the flip side was that another 430,000 new filings for unemployment also occurred at the same time.
Additionally the government acknowledges that there are 8.9 million borrowers currently in default, and facing foreclosure.
Economist further estimate that a percent of these 8.9 million homeowners that are in default are spending money in aid of the economy because they aren’t making their mortgage payments, and the figure, they believe represents 1% increase in consumer spending, coincidence?
Ok, time to use common sense, that sound judgment we were all born with.
Given the real facts, it is obvious there is NO recovery, but the illusion of a recovery which is based of a false assumption. When we see real jobs being created, and that number MUST exceed 300,000 net jobs a month then we can say a real recovery has begun.
And it will!
Common sense dictates that while we are given positive information, and especially where the government is concerned, there is always a flip side to analyze. That is unless you enjoy being led once again to the slaughter.
The Flip Side
The FED also reports that the job market hasn’t improved and remains at 9.7 percent, which equates to more than 17.3 million people still looking for a job. Yes we hear about the 162 thousands jobs created, such hyperbole has not gone unchallenged, the flip side was that another 430,000 new filings for unemployment also occurred at the same time.
Additionally the government acknowledges that there are 8.9 million borrowers currently in default, and facing foreclosure.
Economist further estimate that a percent of these 8.9 million homeowners that are in default are spending money in aid of the economy because they aren’t making their mortgage payments, and the figure, they believe represents 1% increase in consumer spending, coincidence?
Ok, time to use common sense, that sound judgment we were all born with.
Given the real facts, it is obvious there is NO recovery, but the illusion of a recovery which is based of a false assumption. When we see real jobs being created, and that number MUST exceed 300,000 net jobs a month then we can say a real recovery has begun.
FDIC accused of seizing Washington Mutual to enhance JP Morgan
Washing Mutual former executive Kerry Killinger has accuses the FDIC of seizing the company to enhance JP Morgan, and not because the savings and loan was insolvent.
Killinger appearing before a congressional committee investigating the financial crisis (the Senate Permanent Subcommittee on Investigations) charged regulators unfairly seized the thrift in September 2008.
Killinger stated that, while the company had suffered from rising loan losses, Wamu was working its way through the financial crisis, even as Morgan and many other banks were doing.
On September 25, 2008, JPMorgan Chase & Co bought WaMu's banking operations from regulators for $1.9 billion. Everyone has prompted that the sale was grossly undervalued in Morgan’s favor, even as Washington Mutual was solvent.
If this is true, JP Morgan Chase got the "steal" of a lifetime while WaMu shareholders and bondholders were wiped out.
Reports that have surfaced after the seizure and sale provoke an image of FDIC collusion in the seizure of WaMu.. The largest S and L has since been proven to have been solvent at the time of its seizure, and had plenty of cash on hand, even more than the FDIC requires.
An interesting side note:
Just six business days after the seizure of WaMu, the government initiated a $700 billion Troubled Asset Relief Program, (TARP) and an increase in bank deposit insurance limits to $250,000 from $100,000, a move that helped stop panic withdrawals at all banks.
The government also refused, despite pleas from WaMu executives, to put WaMu on a list of banks in which short-selling of stock was prohibited. That decision contributed to a downward spiral of the stock price, which mirrored dwindling confidence in the bank. Other banks were placed on the list, why not the largest?
It appears that the seizure and sale of WaMu to Morgan, was a gift or payoff or? We just don’t know what for, yet! Stay tuned for the next episode!
Killinger appearing before a congressional committee investigating the financial crisis (the Senate Permanent Subcommittee on Investigations) charged regulators unfairly seized the thrift in September 2008.
Killinger stated that, while the company had suffered from rising loan losses, Wamu was working its way through the financial crisis, even as Morgan and many other banks were doing.
On September 25, 2008, JPMorgan Chase & Co bought WaMu's banking operations from regulators for $1.9 billion. Everyone has prompted that the sale was grossly undervalued in Morgan’s favor, even as Washington Mutual was solvent.
If this is true, JP Morgan Chase got the "steal" of a lifetime while WaMu shareholders and bondholders were wiped out.
Reports that have surfaced after the seizure and sale provoke an image of FDIC collusion in the seizure of WaMu.. The largest S and L has since been proven to have been solvent at the time of its seizure, and had plenty of cash on hand, even more than the FDIC requires.
An interesting side note:
Just six business days after the seizure of WaMu, the government initiated a $700 billion Troubled Asset Relief Program, (TARP) and an increase in bank deposit insurance limits to $250,000 from $100,000, a move that helped stop panic withdrawals at all banks.
The government also refused, despite pleas from WaMu executives, to put WaMu on a list of banks in which short-selling of stock was prohibited. That decision contributed to a downward spiral of the stock price, which mirrored dwindling confidence in the bank. Other banks were placed on the list, why not the largest?
It appears that the seizure and sale of WaMu to Morgan, was a gift or payoff or? We just don’t know what for, yet! Stay tuned for the next episode!
Monday, April 12, 2010
7.9 Million Americans have stopped making Mortgage payments!
In the wake of this unprecedented epidemic, the government has no concept how to help the homeowner, instead the Obama administration comes up with one empty program after another, and none have worked!
Why? Because they were not intended to!
This administration has gone out of its way to help the banks foreclose on America. Providing a bailout for the financial sector, without the taxpayers or the borrowers in mind, as such we have already witnessed over 7 million properties taken over by bankers, and now we see the possibility that another 7.9 million are about to go, and right behind them is anticipated to be another 15 million homes.
The rate of foreclosure is currently accelerating faster than lenders are capable of going through the process to take them back. It currently takes well over a year, in some cases nearly two years, to go from missing a payment to being foreclosed and evicted.
As this article is written, 7.9 almost 8 million borrowers have stopped making payments to their lender, instead they are spending what they perceive to otherwise be dead money, paying in essence for what many believe to be a dead horse.
In most areas of the country borrowers are figuratively speaking, under water with their loans, in Las Vegas alone, the most severely damaged city in America more than 81% of borrowers are upside down. On any given street there are between 2 and 4 homes already foreclosed, and “vacant”
This 2 year period gives the borrower ample time to purchase items that their mortgage payments had otherwise prevented. Accordingly we are witnessing a new thinking process as borrowers are retiring other forms of debt, and acquire things they otherwise could not afford.
On the bright side, this could help to generate a sort of financial recovery on the back of the banks who created the problem -- they may inadvertently be helping to solve it.
Why? Because they were not intended to!
This administration has gone out of its way to help the banks foreclose on America. Providing a bailout for the financial sector, without the taxpayers or the borrowers in mind, as such we have already witnessed over 7 million properties taken over by bankers, and now we see the possibility that another 7.9 million are about to go, and right behind them is anticipated to be another 15 million homes.
The rate of foreclosure is currently accelerating faster than lenders are capable of going through the process to take them back. It currently takes well over a year, in some cases nearly two years, to go from missing a payment to being foreclosed and evicted.
As this article is written, 7.9 almost 8 million borrowers have stopped making payments to their lender, instead they are spending what they perceive to otherwise be dead money, paying in essence for what many believe to be a dead horse.
In most areas of the country borrowers are figuratively speaking, under water with their loans, in Las Vegas alone, the most severely damaged city in America more than 81% of borrowers are upside down. On any given street there are between 2 and 4 homes already foreclosed, and “vacant”
This 2 year period gives the borrower ample time to purchase items that their mortgage payments had otherwise prevented. Accordingly we are witnessing a new thinking process as borrowers are retiring other forms of debt, and acquire things they otherwise could not afford.
On the bright side, this could help to generate a sort of financial recovery on the back of the banks who created the problem -- they may inadvertently be helping to solve it.
Tuesday, April 6, 2010
How do we get America moving again?
17.3 million Americans need jobs.
Vacant storefronts abandoned and often shuttered homes and schools tell the story of the economy in real life 3rd dimension.
Wherever we go from one coast to another, this is the reality for many towns and cities across America , a nation no longer reminiscent of its better days, a nation of shrinking tax rolls and migration.
For many and for generations yet to come, there will be a different face peering out from the murky windows, staring as in a translucent state of amnesia
We as a nation have been in a decline since the 1980’s but is was so gradual a decline that we didn’t notice until the fan turned brown from our splattered remnants.
And now that we see the picture that has so assiduously unfolded, how do we as a people get out from under this elegantly conceived effrontery to not only us, but to a lifestyle that made us a great people?
Yes America was forced to transition, to pick up roots planted while the nation appeared to be on a forward momentum, but that roll wasn’t a boom and prosper roll, at least not for us.
We were used, we had become, somehow in the darkness and shadows, the mere pawns of those who consider themselves the elite of our society, and we as a people now at the hands of a government that has joined in league with them, have found ourselves without recourse to recover the government we had believed was ours.
Instead we find ourselves at the mercy of a street in New York , where the enterprises of capitalism have abandoned American principles and churned from democracies ashes a new form of governance, and it is not one with our assent.
However, there is something that remains more pressing to our society; can we yet emerge from this creative captivity unscathed?
In common parlance, what America needs is jobs, and there is one concept that may work, a return to a form of isolationism, but in trade only.
It is suggested that for America to recover, drastic measures are required, and are offered for consideration in this article:
First; no imports would be allowed unless we as a society require them, as such oil would be allowed, while all manufactured items would not. Whether it would be autos or clothing or appliances, they would be disallowed.
Second; our large corporations will be required to open plants in America and to hire Americans or their products would be denied sales in the US .
Third; these multinational corporations would be taxed 90 percent on all goods manufactured and sold abroad, giving them incentive to reverse the trend begun under the Reagan/Bush administration which promoted the exit of jobs and businesses in America in favor of a service oriented society.
And finally: there will be no additional bailouts for the financial sector, if they lose our money again they will like any other criminal be dealt with in a similar fashion.
Vacant storefronts abandoned and often shuttered homes and schools tell the story of the economy in real life 3rd dimension.
Wherever we go from one coast to another, this is the reality for many towns and cities across America , a nation no longer reminiscent of its better days, a nation of shrinking tax rolls and migration.
For many and for generations yet to come, there will be a different face peering out from the murky windows, staring as in a translucent state of amnesia
We as a nation have been in a decline since the 1980’s but is was so gradual a decline that we didn’t notice until the fan turned brown from our splattered remnants.
And now that we see the picture that has so assiduously unfolded, how do we as a people get out from under this elegantly conceived effrontery to not only us, but to a lifestyle that made us a great people?
Yes America was forced to transition, to pick up roots planted while the nation appeared to be on a forward momentum, but that roll wasn’t a boom and prosper roll, at least not for us.
We were used, we had become, somehow in the darkness and shadows, the mere pawns of those who consider themselves the elite of our society, and we as a people now at the hands of a government that has joined in league with them, have found ourselves without recourse to recover the government we had believed was ours.
Instead we find ourselves at the mercy of a street in New York , where the enterprises of capitalism have abandoned American principles and churned from democracies ashes a new form of governance, and it is not one with our assent.
However, there is something that remains more pressing to our society; can we yet emerge from this creative captivity unscathed?
In common parlance, what America needs is jobs, and there is one concept that may work, a return to a form of isolationism, but in trade only.
It is suggested that for America to recover, drastic measures are required, and are offered for consideration in this article:
First; no imports would be allowed unless we as a society require them, as such oil would be allowed, while all manufactured items would not. Whether it would be autos or clothing or appliances, they would be disallowed.
Second; our large corporations will be required to open plants in America and to hire Americans or their products would be denied sales in the US .
Third; these multinational corporations would be taxed 90 percent on all goods manufactured and sold abroad, giving them incentive to reverse the trend begun under the Reagan/Bush administration which promoted the exit of jobs and businesses in America in favor of a service oriented society.
And finally: there will be no additional bailouts for the financial sector, if they lose our money again they will like any other criminal be dealt with in a similar fashion.
Thursday, April 1, 2010
Obama and the Titanic
The current administration has hit an ice berg and placed Middle Class America in the steerage section of the Titanic
For most of America it feels like April 15, 1912, that’s the date the Titanic hit an ice berg in the Atlantic and within hours went down taking 1,517 people with it. But this time an entire nation could go down and when America sinks it will take practically the entire world with it. The question is no longer if, but when.
Regardless of the lucidity of the administration’s propaganda, we as a nation have been struck by an ice berg and we are sinking, audibly drowning in an abyss of debt.
While the Obama administration helped the large banks step into the life boats, our citizens were relegated to the lower lever steerage where lifeboats were not available.
Yes the banks have rebounded, and yes they will continue financing their cluster of relationships, rewarding those who have allowed the impenitent greed that surrounds Wall Street to go on, even while Middle Class America struggles to hold onto the remnants of a broken ship’s bowl.
We are told that everything is rosy and America is moving ahead, yet the unemployment figures (11 million unemployed) don’t reflect those sentiments. Neither does the current bankruptcy filings (6,000 a day).
The current US Debt is a staggering 12 .6 trillion and growing, at the rate of $4.02 billion per day
Inflation and depreciation of our currency is an inevitable as the looming debt crisis, even as the stock market is overvalued and an adjustment is also eminent.
It’s time to put on the life jacket!
For most of America it feels like April 15, 1912, that’s the date the Titanic hit an ice berg in the Atlantic and within hours went down taking 1,517 people with it. But this time an entire nation could go down and when America sinks it will take practically the entire world with it. The question is no longer if, but when.
Regardless of the lucidity of the administration’s propaganda, we as a nation have been struck by an ice berg and we are sinking, audibly drowning in an abyss of debt.
While the Obama administration helped the large banks step into the life boats, our citizens were relegated to the lower lever steerage where lifeboats were not available.
Yes the banks have rebounded, and yes they will continue financing their cluster of relationships, rewarding those who have allowed the impenitent greed that surrounds Wall Street to go on, even while Middle Class America struggles to hold onto the remnants of a broken ship’s bowl.
We are told that everything is rosy and America is moving ahead, yet the unemployment figures (11 million unemployed) don’t reflect those sentiments. Neither does the current bankruptcy filings (6,000 a day).
The current US Debt is a staggering 12 .6 trillion and growing, at the rate of $4.02 billion per day
Inflation and depreciation of our currency is an inevitable as the looming debt crisis, even as the stock market is overvalued and an adjustment is also eminent.
It’s time to put on the life jacket!
Saturday, March 13, 2010
Obama says it’s time to say Good-by and Move on
The foreclosure crisis has been a challenge for this president, who has invested more than $787bn in Wall Street in hopes they would help keep Americans in their homes, now this administration has thrown in the towel, the new direction, help the banks to liquidate American homeowners. Obama’s new approach paying homeowners to leave quietly.
Taking effect on April 5, the new program hopes to encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program, (which simply hasn’t worked), to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
However, this program like all the others is dependent on co-operation from the Banks and servicers of the loans, who so far have refused to participate in these types of government programs unless there is money in it for them. Short sales have been unsuccessfully tried for the past two years and very few have actually been accepted by the banks without the borrower agreeing to repay the short part of the mortgage, this plan is not expected to fare any better.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."
However the servicer earns much more than $1000, by maintaining the borrower in a default status, and through the foreclosure.
This program is more like a slap in the face of the defaulting borrower! $1,500.00 won’t pay even a portion of the moving costs.
Taking effect on April 5, the new program hopes to encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program, (which simply hasn’t worked), to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
However, this program like all the others is dependent on co-operation from the Banks and servicers of the loans, who so far have refused to participate in these types of government programs unless there is money in it for them. Short sales have been unsuccessfully tried for the past two years and very few have actually been accepted by the banks without the borrower agreeing to repay the short part of the mortgage, this plan is not expected to fare any better.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."
However the servicer earns much more than $1000, by maintaining the borrower in a default status, and through the foreclosure.
This program is more like a slap in the face of the defaulting borrower! $1,500.00 won’t pay even a portion of the moving costs.
We are a disposable people and a disposable workforce!
We built a great nation only to watch it collapse under the weight of corporate greed:
There was a joke that was told many years ago about the Lone Ranger and his sidekick Tonto, Tonto was an Indian, or now more correctly stated “a Native American” the story went like this: Both the Lone Ranger and Tonto were surrounded by hundreds of Indians and as the Lone Ranger ran out of ammunition he turned to Tonto and said, ” looks like we’re done Tonto”, Tonto turned back to the Lone Ranger and replied “what do you mean “we” white man”
And so it goes with Wall Street
Yes there is a recovery going on, but it’s not for middle class America, it’s for the big boys whom the government favors. Like our big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments and in bonds and stocks, they are clearly doing better.
But take a drive down main street or look at any commercial center in any of the 50 states and we see empty stores that once contained mom and pop businesses, even franchises are folding. If there is as the government says a recovery, then why are businesses still closing?
Because Americans are not spending as the government claims, in fact Americans generally don’t have the money to spend. Indeed they don’t have the means to even pay their current debts. In fact since the first business day of January 2010, Americans are filing bankruptcies at the rate of 6,000 per day. That’s an annual filing rate of just over 1.5 million
The reason the Government puts out exaggerated figures is their belief the economy runs on optimism and that if the average consumer believes the economy is getting better, they'll spend more readily and- the economy will get better.
Only a pseudo intellect in today’s sad state of affairs could muster this reasoning
The government fails to understand that regardless of how people feel, they won't spend if they don't have the money, and Main Street doesn’t have the money! The 9 million unemployed along with 30 million underemployed and the growing number of College Graduates entering the workforce has crippled the economy and it is felt most by small business, the neighborhood business. Each unemployed and underemployed individual affects 5 others in the economy. This 39 million people who are earning less are spending less and they are affecting nearly 200,000,000 people. It is axiomatic that the economy will not improve for the average American until we begin to employ our own, and to regenerate and reinvigorate American Small business.
The government tells us that the US economy grew at a 5.9 percent annual rate in the fourth quarter of 2009. That sounds good at first blush, until you realize GDP figures are badly distorted by structural changes in the economy. For example, part of the increase is due to rising health care costs, when WellPoint ratchets up premiums it enlarges the GDP. A separate part of the perceived growth in GDP is due to rising government expenditures, and the costs or gas at the pump.
Who is really doing better in America?
The people and private-sector institutions at the top!
Many of America's biggest companies are sitting on huge amounts of cash, but that says nothing about the health of the U.S. economy. Companies in the Standard & Poor 500 stock index had sales of $2.18 trillion in the fourth quarter, up from $2.02 trillion last year, and their earnings tripled. Why? Because they're global and selling into fast-growing markets in places like India, China, and Brazil!
America's biggest companies are also showing fat profits and productivity gains because they continue to slash payrolls and cut expenditures. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. Sounds terrific until you realize how it did it. By cutting 28,000 jobs - 32 percent of its workforce - and slashed capital expenditures 43 percent. Who suffered, middle class America, while those who owned Alcoa Stock benefited and so did Alcoa’s executives.
We have become a use then throw away work force!
Yes firms in S&P 500 are holding $932 billion in cash and short-term investments. And they can borrow money cheaply, corporate bond sales, that is buying into Corporate debt, so far in 2010, has topped $195.2 billion, excluding government-guaranteed bonds.
Does this spell a recovery? No, why? Because they're doing two things that don't help at all!
First, they're buying other companies. Walgreen last month spent $618 million for New York drugstore chain Duane Reade; Bank of New York Mellon, $2.3 billion for PNC Financial Services; Monster, $225 million for jobs.com; Diamond Foods, $615 million for Kettle Foods.
This buying doesn't create new jobs. In fact it creates a net loss of duplicate ones. One of the first things companies do when they buy other companies is fire people who are considered "redundant."
The second thing large companies are doing with all their cash is buying back their own stock, in order to boost their share prices. There were 62 such share buy-backs in February, valued at $40.1 billion. We're witnessing the biggest share buyback spree since Sept 2008. The major beneficiaries are current shareholders, including top executives, whose pay is linked to share prices. The buy-backs do absolutely nothing for most Americans.
The picture on Main Street is quite different. Small businesses aren't selling much because they have to rely on American consumers - rather than foreign consumers. And Americans still aren't buying much because they don’t have the financial resources.
Small businesses are also finding it difficult to get credit. Most of the 8000 American banks don’t have money to loan because of the large number of bad debts on their books. And some 700 banks are set to fail this year. Since small businesses are where the jobs are created in any recovery and we are losing small businesses, this recession will continue for a decade or longer. We won’t see a recovery until we have an administration with the foresight to care about us rather than Wall Street.
The traditional mom and pop business is closing at the rate of 40% (2 out of 5) during this recession if this continues we may lose most of our 28,000,000 small businesses that we had in 2007 during its peak.
Don’t believe the Government reports
The Federal Reserve recently reported that American consumers are shedding their debts. Total US household debt, the FED claims, “including mortgages and credit card balances, fell 1.7 percent last year”. Supposedly this was the first drop since the government began recording consumer debt in 1945.
What is the truth?
Much of the debt-shedding has been through default - consumers are simply not repaying their debts and walking away from homes and big-ticket purchases, cars and credit card balances.
End of story!
Rupert Murdoch’s Wall Street Journal has its own take on the defaults: "the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitation of the economy”
Let’s get real: American consumers account for 70 percent of the total demand for goods and services if they don’t have the financial resources or the jobs, or are concerned about their retirement, who if not them will sustain the economy?
Let’s face the facts: This American economy was in trouble since the end of 2000, it took the real estate balloon (developing Bubble) to stimulate the economy, but there were NO real job growth even then, consumers were borrowing the equity from their homes merely to make the payments. The Banks knew it, the FED knew it, and they knew the bubble had to burst! That was one of the reasons the Credit Default Swaps were created, guaranteeing Mortgage loans that the Banks knew were worthless!
The daunting question must be considered? The US Economy has been imperiled through incompetent administrations, who have favored outsourcing American jobs, and it started with Ronald Reagan and George HW Bush. Now how will Main Street come back? How will we create jobs? Certainly not from big businesses that are outsourcing! Certainly not from Wall Street who considers itself above main street and has no concerned for what they consider a disposable work force. And certainly not from government who is so tied to the apron strings of Wall Street they appear to be tied at the hip!
Until there's an answer, an economic "recovery" for anyone other than big corporations, Wall Street, and the wealthy is an illusion, and more Americans will yet find themselves falling into dismay
There was a joke that was told many years ago about the Lone Ranger and his sidekick Tonto, Tonto was an Indian, or now more correctly stated “a Native American” the story went like this: Both the Lone Ranger and Tonto were surrounded by hundreds of Indians and as the Lone Ranger ran out of ammunition he turned to Tonto and said, ” looks like we’re done Tonto”, Tonto turned back to the Lone Ranger and replied “what do you mean “we” white man”
And so it goes with Wall Street
Yes there is a recovery going on, but it’s not for middle class America, it’s for the big boys whom the government favors. Like our big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments and in bonds and stocks, they are clearly doing better.
But take a drive down main street or look at any commercial center in any of the 50 states and we see empty stores that once contained mom and pop businesses, even franchises are folding. If there is as the government says a recovery, then why are businesses still closing?
Because Americans are not spending as the government claims, in fact Americans generally don’t have the money to spend. Indeed they don’t have the means to even pay their current debts. In fact since the first business day of January 2010, Americans are filing bankruptcies at the rate of 6,000 per day. That’s an annual filing rate of just over 1.5 million
The reason the Government puts out exaggerated figures is their belief the economy runs on optimism and that if the average consumer believes the economy is getting better, they'll spend more readily and- the economy will get better.
Only a pseudo intellect in today’s sad state of affairs could muster this reasoning
The government fails to understand that regardless of how people feel, they won't spend if they don't have the money, and Main Street doesn’t have the money! The 9 million unemployed along with 30 million underemployed and the growing number of College Graduates entering the workforce has crippled the economy and it is felt most by small business, the neighborhood business. Each unemployed and underemployed individual affects 5 others in the economy. This 39 million people who are earning less are spending less and they are affecting nearly 200,000,000 people. It is axiomatic that the economy will not improve for the average American until we begin to employ our own, and to regenerate and reinvigorate American Small business.
The government tells us that the US economy grew at a 5.9 percent annual rate in the fourth quarter of 2009. That sounds good at first blush, until you realize GDP figures are badly distorted by structural changes in the economy. For example, part of the increase is due to rising health care costs, when WellPoint ratchets up premiums it enlarges the GDP. A separate part of the perceived growth in GDP is due to rising government expenditures, and the costs or gas at the pump.
Who is really doing better in America?
The people and private-sector institutions at the top!
Many of America's biggest companies are sitting on huge amounts of cash, but that says nothing about the health of the U.S. economy. Companies in the Standard & Poor 500 stock index had sales of $2.18 trillion in the fourth quarter, up from $2.02 trillion last year, and their earnings tripled. Why? Because they're global and selling into fast-growing markets in places like India, China, and Brazil!
America's biggest companies are also showing fat profits and productivity gains because they continue to slash payrolls and cut expenditures. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. Sounds terrific until you realize how it did it. By cutting 28,000 jobs - 32 percent of its workforce - and slashed capital expenditures 43 percent. Who suffered, middle class America, while those who owned Alcoa Stock benefited and so did Alcoa’s executives.
We have become a use then throw away work force!
Yes firms in S&P 500 are holding $932 billion in cash and short-term investments. And they can borrow money cheaply, corporate bond sales, that is buying into Corporate debt, so far in 2010, has topped $195.2 billion, excluding government-guaranteed bonds.
Does this spell a recovery? No, why? Because they're doing two things that don't help at all!
First, they're buying other companies. Walgreen last month spent $618 million for New York drugstore chain Duane Reade; Bank of New York Mellon, $2.3 billion for PNC Financial Services; Monster, $225 million for jobs.com; Diamond Foods, $615 million for Kettle Foods.
This buying doesn't create new jobs. In fact it creates a net loss of duplicate ones. One of the first things companies do when they buy other companies is fire people who are considered "redundant."
The second thing large companies are doing with all their cash is buying back their own stock, in order to boost their share prices. There were 62 such share buy-backs in February, valued at $40.1 billion. We're witnessing the biggest share buyback spree since Sept 2008. The major beneficiaries are current shareholders, including top executives, whose pay is linked to share prices. The buy-backs do absolutely nothing for most Americans.
The picture on Main Street is quite different. Small businesses aren't selling much because they have to rely on American consumers - rather than foreign consumers. And Americans still aren't buying much because they don’t have the financial resources.
Small businesses are also finding it difficult to get credit. Most of the 8000 American banks don’t have money to loan because of the large number of bad debts on their books. And some 700 banks are set to fail this year. Since small businesses are where the jobs are created in any recovery and we are losing small businesses, this recession will continue for a decade or longer. We won’t see a recovery until we have an administration with the foresight to care about us rather than Wall Street.
The traditional mom and pop business is closing at the rate of 40% (2 out of 5) during this recession if this continues we may lose most of our 28,000,000 small businesses that we had in 2007 during its peak.
Don’t believe the Government reports
The Federal Reserve recently reported that American consumers are shedding their debts. Total US household debt, the FED claims, “including mortgages and credit card balances, fell 1.7 percent last year”. Supposedly this was the first drop since the government began recording consumer debt in 1945.
What is the truth?
Much of the debt-shedding has been through default - consumers are simply not repaying their debts and walking away from homes and big-ticket purchases, cars and credit card balances.
End of story!
Rupert Murdoch’s Wall Street Journal has its own take on the defaults: "the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitation of the economy”
Let’s get real: American consumers account for 70 percent of the total demand for goods and services if they don’t have the financial resources or the jobs, or are concerned about their retirement, who if not them will sustain the economy?
Let’s face the facts: This American economy was in trouble since the end of 2000, it took the real estate balloon (developing Bubble) to stimulate the economy, but there were NO real job growth even then, consumers were borrowing the equity from their homes merely to make the payments. The Banks knew it, the FED knew it, and they knew the bubble had to burst! That was one of the reasons the Credit Default Swaps were created, guaranteeing Mortgage loans that the Banks knew were worthless!
The daunting question must be considered? The US Economy has been imperiled through incompetent administrations, who have favored outsourcing American jobs, and it started with Ronald Reagan and George HW Bush. Now how will Main Street come back? How will we create jobs? Certainly not from big businesses that are outsourcing! Certainly not from Wall Street who considers itself above main street and has no concerned for what they consider a disposable work force. And certainly not from government who is so tied to the apron strings of Wall Street they appear to be tied at the hip!
Until there's an answer, an economic "recovery" for anyone other than big corporations, Wall Street, and the wealthy is an illusion, and more Americans will yet find themselves falling into dismay
Thursday, March 4, 2010
Home Bargains Fraught with Bank Caginess!
Although banks are estimated to have some 7 million (foreclosed) homes in their inventory they are releasing only a few at a time running the cost to purchase these homes upward. To add insult to an already deep injury, investors are coming in with all cash offers which make buying a home for someone who wants to live there next to impossible.
Yet foreclosures are primed to rise as more than 5 million homeowners are currently facing foreclosure and the government programs aimed at keeping borrowers in their homes has failed miserable. Why? Because loan servicers make money while a property owner is in default, and the small amount the government offers these servicers doesn’t sway their interest.
Loan servicers have NO incentive to modify a loan for a borrower, accordingly only approximately 66,000 of the 750,000 homeowners who are allegedly otherwise qualified for a modified loan have actually received one.
The majority of borrowers seeking a loan modification are played with through a trial modified loan for periods of three months at a time, after completing this trial period, the loan modification may be denied and another trial period initiated. Meanwhile the servicer receives the benefit of these payments!
Borrowers acting in good faith often become frustrated and ultimately just give up, which appears to be just what the banks want!
Why do we say this?
The $787bn bank bailout was “allegedly” to stimulate the banks to make loans, now that the banks are rich with cash, Bernanke has instructed the banks NOT to make loans because as he said, ”loaning money into circulation will create inflation” instead Bernanke has devised a plan where the Banks will place blocks of cash totaling billions, with the FED keeping the funds out of the market place yet the FED will pay the banks interest on this money!
Let’s be real!
The reason for the all cash borrower being favored by the banks is that now this money is also taken out of circulation, and guess what- When the Banks place billions of dollars with the Fed and they draw interest, who do you think will pay that interest?
Yup, we’ve been had again!
Yet foreclosures are primed to rise as more than 5 million homeowners are currently facing foreclosure and the government programs aimed at keeping borrowers in their homes has failed miserable. Why? Because loan servicers make money while a property owner is in default, and the small amount the government offers these servicers doesn’t sway their interest.
Loan servicers have NO incentive to modify a loan for a borrower, accordingly only approximately 66,000 of the 750,000 homeowners who are allegedly otherwise qualified for a modified loan have actually received one.
The majority of borrowers seeking a loan modification are played with through a trial modified loan for periods of three months at a time, after completing this trial period, the loan modification may be denied and another trial period initiated. Meanwhile the servicer receives the benefit of these payments!
Borrowers acting in good faith often become frustrated and ultimately just give up, which appears to be just what the banks want!
Why do we say this?
The $787bn bank bailout was “allegedly” to stimulate the banks to make loans, now that the banks are rich with cash, Bernanke has instructed the banks NOT to make loans because as he said, ”loaning money into circulation will create inflation” instead Bernanke has devised a plan where the Banks will place blocks of cash totaling billions, with the FED keeping the funds out of the market place yet the FED will pay the banks interest on this money!
Let’s be real!
The reason for the all cash borrower being favored by the banks is that now this money is also taken out of circulation, and guess what- When the Banks place billions of dollars with the Fed and they draw interest, who do you think will pay that interest?
Yup, we’ve been had again!
Saturday, January 9, 2010
The Banks and their New SCAM - an industry laden with crooks!
With Foreclosures topping 5 million and another 7 million in the wings, the banks now have a new SCAM. They foreclosed on our homes, taking the home at the bottom of the market. Collected the insurance on the difference between the Note (They didn’t Own) and the market value they created by the volume, velocity and volatility of their foreclosures. Initially dumping the home cheap to bring down the market even further, in order to acquire the properties at an even lower price, they now are holding several million homes off the market, to force the value of these properties back up in order to make an additional windfall.
Real Estate Brokers across America have stopped submitting offers to Banks relating to their REO’s because they have found that the banks are playing games with the potential buyers, the Banks have no interest in selling their foreclosed properties until the market returns, and they (the Banks) are the ones who can make it return.
Meanwhile the Banks have been made whole, and in some cases have not only collected the insurance, but sued the former homeowner for a deficiency, that difference between what the home was foreclosed for and the mortgaged amount.
We are in an inflationary market, and the Banks realize that they were the cause of the market collapse, by placing a volume of homes on the market they caused the value of the homes to fall, now by restricting the homes they place on the market the values are expected to rise, it’s the old game of supply and demand, a lot of money chasing a few homes will cause the value of the homes to rise, by releasing a few thousand homes at a time, the market will stabilize in the banks favor.
Initially, the Banks, because of this SCAM and their insatiable greed blocked the borrowers attempt to sell their home instead of it being foreclosed. They accomplished this by the shear volume of the foreclosure frenzy. Now the Banks are primed to reap the windfall of a market they created at the peril of the borrower.
There is a lot of money that has been created over the past 8 years. The market has inflated for almost every other commodity but Real Estate, now we can expect to see this market inflate again.
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