Jul 28

Syria’s al-Nusra Front Officially “Splits” From al-Qaeda:

Earlier today, the leader of the Jabhat al-Nusra front, Abu Mohamed al-Golani confirmed that his group has formally split from al-Qaeda and has renamed itself Jabhat Fath al-Sham or the Levantine Conquest Front. “The creation of this new front aims to close the gap between the jihadi factions in the Levant,” Golani said in his first televised appearance. “We thank the leaders of al-Qaeda for understanding the need to break links.

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Jun 14

subprime-housing-crisis

The subprime mortgage is back: it’s 2008 all over again:

Apparently the biggest banks in the US didn’t learn their lesson the first time around…

Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again!

I’m sure you remember how this all blew up back in 2008. Continue reading »

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Feb 21

Watch the video here:

Meet Iran’s first woman vice president (CNBC, Feb 19, 2015)

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Dec 30

H/t reader M.G.:

“Looking at the destruction Morgan Stanley wrought on the mortgage market, and the crooked judges are looking for a “settlement” early next year. No word about the millions who suffered as a result of their policies, not just those who bought the homes, but all of us who suffered from radical drop in property values as a result of mass foreclosures around us.”


Morgan-Stanley

Court Filing Illuminates Morgan Stanley Role in Lending (CNBC/New York Times, Dec 30, 2014):

Since the financial crisis, Wall Street firms have argued that they were victims, just like everybody else, of the bad mortgages that were churned out by subprime lenders like Countrywide and New Century.

Now, though, a trove of emails and confidential documents, filed in court, reveal the extent to which one of Wall Street’s leading banks, Morgan Stanley, actively influenced New Century’s push into riskier and more onerous mortgages, and brushed aside questions about the ability of homeowners to make the payments. Continue reading »

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Aug 21

Bank of America agrees to $17bn fine over mortgage fraud – report (RT, Aug 20, 2014):

America’s second largest lender has reached a $17 billion settlement with US federal authorities over selling bad mortgages, according to sources close to the negotiations.

The bank will pay out $10 billion in cash and $7 billion for consumer relief – such as modified home loans and refinanced mortgages, AP reports, citing officials close to the negotiations. The final verdict is due on Thursday.

The fine will be the largest single compensation settlement, beating out JPMorgan Chase & Co’s $13 billion penalty paid in November 2013. Citigroup, another major US bank, had to pay $7 billion in July. Continue reading »

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Apr 21

muppets-kermit-dead

Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again (Liberty Blitzkrieg, April 21, 2014):

In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.

The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where to normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable. Continue reading »

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Feb 07

ALL IS WELL!!! (The Burning Platform, Feb 6, 2013)

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Dec 14

Marc Faber: “Paul Krugman Should Go And Live In North Korea” (ZeroHedge, Dec 13, 2012):

If there is one thing better than Marc Faber providing a free, must-watch (and listen) 50 minute lecture on virtually everything that has transpired in the end days of modern capitalism, starting with who caused it, adjustable rate mortgages, leverage, why did the Fed let Lehman fail, why was AIG bailed out, quantitative easing, Operation Twist, where the interest on the debt is going, which bubbles he is most concerned about, a discussion of gold and silver, and culminating with his views on a world reserve currency, is him saying the following: “The views of the Keynesians like Mr. Krugman is that the fiscal deficits are far too small. One of the problems of the crisis is that it was caused by government intervention with fiscal and monetary measures. Now they tells us we didn’t intervene enough. If they really believe that they should go and live in North Korea where you have a communist system. There the government intervenes into every aspect of the economy. And look at the economic performance of North Korea.” Priceless.

50 minutes of Faberian bliss:


YouTube

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Oct 24


YouTube Added: 02.08.2012

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Oct 05

The Last Housing Crash Is Not Even Over But Bernanke Is Already Setting The Stage For The Next One (Activist Post, Oct 3, 2012):

Federal Reserve Chairman Ben Bernanke is determined to push mortgage rates to record low levels and he is encouraging the banks that the Fed regulates to make home loans more freely. Wait a second – isn’t that exactly what caused the last housing bubble?

After 9/11, the Federal Reserve slashed interest rates and this caused mortgage rates to steadily fall. Financial institutions were urged to help “expand home ownership” in America, and many of them started making home loans to people who never, ever should have gotten home loans. When mortgage rates started to go back up, millions of families with adjustable rate mortgages discovered that they could not make their monthly payments. Mortgage delinquencies absolutely soared and large numbers of mortgage-backed securities suddenly turned into garbage.

Continue reading »

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Aug 17

The Truth About How The Fed Has Destroyed The Housing Market (ZeroHedge, Aug 16, 2012):

When observing the trends in the housing market, one has two choices: i) listen to the bulls who keep repeating that “housing has bottomed”, a false mantra which has been repeated every single year for the past four, or ii) look at the facts. We touched briefly on the facts earlier today when we presented the latest housing starts data:construction of single family residences remains 46 percent below the long-term trend; the more volatile multifamily houses is 15 percent below trend and demand for new homes 47 percent below. This is indicative of reluctance by households to make long-term investments due to fear of another downturn in housing prices. Bloomberg summarizes this succinctly: “This historically weak demand for new homes is inhibiting the recovery of demand for construction workers as well, about 2.3 million of whom remain without work.” But the best visual representation of the housing “non-bottom” comes courtesy of the following chart of homes in negative or near-negative equity, which via Bloomberg Brief, is soared in Q4, and is now back to Q1 2010 level at over 13.5 million. What this means is that the foreclosure backlog and the shadow inventory of houses on the market could be as large as 13.5 million in the future, which translates into one simple word: supply.

Here is Bloomberg’s Joseph Brusuelas on this topic:

Approximately 13.5 million households hold negative or near-negative equity positions on their mortgages. Many of them will likely lose  those homes to foreclosures, which are again on the rise. At best, an increase in foreclosures will constrain a recovery in prices; at worst, a flood of inventory to market will put further downward pressure on prices.

In other words it is Bloomberg, not us, coming up with the perfectly logical idea that a number as large as the total number of underwater mortgages may and will end up on the market as foreclosures, which in turn will clog up the market clearance piping for years, if not decades to come.

Continue reading »

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Aug 01


YouTube Added: 31.07.2012

Description:

In this episode, Max Keiser and Stacy Herbert discuss the virtual virtual economy getting hit by a dustbowl and there are no gully washers or toad stranglers on the horizon to bring reliefe; meanwhile out in the virtual real economy it’s all the bath-salts and beer you can drink and scalps for sale in California as eminent domain falls into the hands of private bankers. In the second half, Max interviews Teri Buhl about the possibility of San Bernardino county using eminent domain to seize mortgages from one set of rich private investors to give them to another set of rich private investors.

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Jul 27


YouTube Added: 13.06.2012

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Jul 10

Eminent-Domain ‘Transfer Of Wealth’-Program Challenges Remain (ZeroHedge, July 10, 2012)

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Jul 07

California Cities Considering (Legal?) Theft of Private Property (ZeroHedge, July 7, 2012):

All Americans should be very, very alarmed. Today’s Wall Street Journal ran a front page story on a proposal put forth by Mortgage Resolution Partners LLC as a ‘solution’ to the problem of underwater mortgages. When you read their PowerPoint presentation for comprehension it is clearly threatening to all commonly perceived rights of private property and free will.

Here is their summary slide describing the program… Continue reading »

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Apr 21

“Your EBT Card Has Been Denied”: 700,000 Are About To Lose Their Extended Jobless Claims Benefits (ZeroHedge, April 20, 2012):

While virtually everyone has opined on the topic of the massive fiscal “cliff” set to take place on January 1, 2013, which could crush US GDP unless American politicians manage to find a way to end their acrimonious ways, most forget that a far more tangible cliff is set to take place much sooner, specifically over the next several months, as those currently collecting handouts from the government in the form of extended unemployment benefits (i.e., those who have been out of a job for a year) are about to get as angry as Germants pre-funding TARGET3, once the free money stops. Goldman explains why: “First, more than 150,000 workers per month exhaust their allowed benefits. Second, recently legislated thresholds will reduce benefit eligibility in many states with below-average unemployment rates beginning in June. Third, apart from legislative changes, labor market improvement in some states has taken the state-level unemployment rate below eligibility thresholds, with many states looking at likely expiration of one or more tiers of benefits around mid-year.” In other words, unlike the bulk of other transfer payment programs (read government subsides) which could be extended with the flick of a switch at the end of the year following the now traditional 1+ month congressional theatrical impasse, extended claims can not. The net result: by June some 700,000 people who are currently collecting benefits will lose everything. It seems that the old faithful EBT card is about to be denied- and while one can assume that extended benefits are not a core source of marginal aspirational product (read AAPL) sales, we all know the truth. Is the time finally coming to short the one company that is and has always been the primary beneficiary of government transfer payment largesse? Because if AAPL’s recent shakiness has been, by some, attributed to the expiration of EBTs, what will happen when Americans are again forced to pay their mortgages? Continue reading »

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Apr 09

Next train ‘Ausschwitz’:

No.1 Trend Forecaster Gerald Celente: The Entire Financial System Is Collapsing! – This Is FASCISM! (Video, March 26, 2012 )

Flashback:

– Former governor  Jesse Ventura Conspiracy Theory: Police State (And FEMA Concentration Camps) – Full Length Video

The videos down below are a MUST-SEE!


America: A Government Out Of Control (ZeroHedge, April 8, 2012):

“A government big enough to give you everything you want, is strong enough to take everything you have”
– Thomas Jefferson

Something odd and not quite as planned happened as America grew from its “City on a Hill” origins, on its way to becoming the world’s superpower: government grew. A lot. In fact, the government, which by definition does not create any wealth but merely reallocates it based on the whims of a select few, has transformed from a virtually invisible bystander in the economy, to the largest single employer, and a spending behemoth whose annual cash needs alone are nearly $4 trillion a year, and where tax revenues no longer cover even half the outflows. One can debate why this happened until one is blue in the face: the allures of encroaching central planning, the law of large numbers, and the corollary of corruption, inefficiency and greed, cheap credit, the transition to a welfare nanny state as America’s population grew older, sicker and lazier, you name it. The reality is that the reasons for government’s growth do not matter as much as realizing where we are, and deciding what has to be done: will America’s central planners be afforded ever more power to decide the fates of not only America’s population, but that of the world, or will the people reclaim the ideals that the founders of this once great country had when they set off on an experiment, which is now failing with every passing year?

As the following video created by New America Now, using content by Brandon Smith whose work has been featured extensively on the pages of Zero Hedge, notes, “we tend to view government as an inevitability of life, but the fact is government is not a force of nature. It is an imperfect creation of man and it can be dismantled by man just as easily as it can be established.” Unfortunately, the realization that absolute power corrupts absolutely, and absolute central planning leads to epic catastrophes without fail, seems a long way away: most seem content with their lot in life, with lies that their welfare money is safe, even as the future is plundered with greater fury and aggression every passing year, until one day the ability to transfer wealth (benefiting primarily the uber rich, to the detriment of the middle class which is pillaged on an hourly basis), from the future to the present is gone, manifesting in either a failed bond auction or hyperinflation. The timing or shape of the transition itself is irrelevant, what is certain is that America is now on collision course with certain collapse unless something changes. And one of the things that has to change for hope in the great American dream to be restored, is the role, composition and motivations of government, all of which have mutated to far beyond what anyone envisioned back in 1776. Because America is now saddled with a Government Out Of Control.

Watch the two clips below to understand just how and why we have gotten to where we are. Also watch it to, as rhetorically asked by the narrator, prompt us to question whether the government we now have is still useful to us and what kind of powers it should be allowed to wield.


YouTube


YouTube

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Mar 06

Couple Lives In $1.3 Million, 4,900 Square Foot Home For Five Years Without Making A Single Mortgage Payment (ZeroHedge, Mar 6, 2012):

Wonder how Americans can afford to buy millions of iGadgets, a second LCD TV for the shoe closet, and eat at restaurants more than almost any time in the past despite sliding personal income? Simple – increasingly fewer pay the biggest staple bill in a US household: their mortgage. The following story of Keith And Janet Ritter, who have lived in their Fort Washington, MD $1.29MM, 4,900 square foot McMansion for 5 years (which they purchase with no money down) without ever making a single mortgage payment, and who are not even close to being evicted, may explain much about the way US society currently operates, and why other perfectly responsible and hard-working taxpayers (who do have to pay for their mortgage) continue to fund tens of billions in Fannie and Freddie losses who are first on the hook to absorb the implicit losses by allowing families such as the Ritters to live in perpetuity without paying, and the banks to keep said mortgage on the books at par without any impairments.

The Washington Post has more on this absolute horror story of a case study of just how busted the USSA has become:

The eviction from their million-dollar home could come at any moment. Keith and Janet Ritter have been bracing for it — and battling against it — almost from the moment they moved into the five-bedroom, 4,900-square-foot manse along the Potomac River in Fort Washington.

In five years, they have never made a mortgage payment, a fact that amazes even the most seasoned veterans of the foreclosure crisis.

Continue reading »

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Feb 24

Inside Job, Narrated by Matt Damon (Full Length HD) from jwrock on Vimeo.

Description:

‘Inside Job’ provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. It was made on location in the United States, Iceland, England, France, Singapore, and China.

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Feb 02

As A Reminder, The President’s Mortgage Plan Is “Dead On Arrival” (ZeroHedge, Feb. 1, 2012):

Obama’s latest attempt to stimulate the housing sector and inflate home prices “before waiting for them to hit bottom” (which they never will as long as central planning tries to define what clearing prices are) is a noble reincarnation of now an annual, and completely ineffectual, theatrical gambit. There is, unfortunately, one major snag. It is Dead on Arrival (just like every single iteration of the Greek bailout), for the simple reason that it has to get congressional approval. Which it won’t. And that’s not just the view of biased political pundits. Wall Street agrees.

Courtesy of the WSJ, which summarizes the prevailing views on this topic:

Edward Mills, analyst, FBR Capital Markets: “We believe that this program would be dead on arrival in Congress, as congressional Republicans are opposed to additional intervention in the mortgage market and are philosophically opposed to a bank tax. This should be confirmation that the administration realizes that a mass-refinance program can only be achieved by legislation and not by regulatory fiat.” Continue reading »

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Jan 31

Freddie Mac Betting Against Struggling Homeowners (NPR, Jan. 30, 2012):

Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.

But Freddie Mac has invested billions of dollars betting that U.S. homeowners won’t be able to refinance their mortgages at today’s lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.

Continue reading »

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Nov 19

The article below is from Oct. 21. This is from CNN Money, Nov. 15:

Fannie & Freddie Executives Score $100 Million Payday (Which Is Essentially Taxpayers Money – Fannie Mae Asked For Another $7.8 BILLION Of Taxpayers Money To Cover Its Losses In Third Quarter)


Fannie, Freddie Need More Money (FOX Business/Reuters, Oct. 21, 2011):

Fannie Mae and Freddie Mac may need as much as $215 billion in additional capital from the Treasury through 2013 to offset losses and maintain a positive net worth, their federal regulator said on Thursday.

Fannie Mae and Freddie Mac, whose programs fund the lion’s share of all new home loans, are at the center of debate as Congress sets to overhaul a U.S. mortgage finance system that contributed to the worst housing crisis since the 1930s.

The cumulative capital needs of the two housing finance giants, which were seized by the government in late 2008, will likely fall between $221 billion and $363 billion through 2013, the Federal Housing Finance Agency estimated.

Continue reading »

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Nov 16

See also:

Black Hole Fannie Mae Asks Taxpayers For Another $7.8 BILLION To Cover Its Losses In Third Quarter:

WASHINGTON (AP) — Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter.


Fannie, Freddie execs score $100 million payday (CNN Money, Nov. 15, 2011):

NEW YORK — Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.

The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, while the top five at Freddie Mac received $28.1 million. And each company has set pay targets of as much as $17 million for its top managers for 2011.

That’s a total of $95.4 million, which will essentially be coming from taxpayers, who have been keeping the mortgage finance giants alive with regular quarterly cash infusions since the Federal Home Finance Agency (FHFA) took control of the companies in September 2008.

Fannie CEO Michael Williams and Freddie CEO Charles Halderman, each received about $5.5 million in pay for last year, and they could receive more when their final deferred compensation for 2010 is set. All the executives receive a significant portion of their pay in the year or years after they earn it.

Continue reading »

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Nov 14

For your information.

The elitists vs. the people.



YouTube Added: 13.11.2011

For more information: Thrive

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Nov 11


YouTube Added: 09.11.2011

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Nov 10

Consider this:

Fannie Mae Knew About Toxic Mortgages in 2003!

Former Assistant Secretary OF Housing Catherine Austin Fitts: ‘It’s Time to Bring Our Mortgages Home’

97 Percent Of All US Mortgages Are Backed By The Government

Fannie Mae And Freddie Mac Worst Case Scenario Is $1 Trillion!

Tickerguy On Dylan Ratigan Show – Massive Fraud At The Highest Levels!

Report: Fannie Mae, Freddie Mac Bailouts Could Hit $363 Billion

Bank of America: Thrilled to Pay $3 Billion Penalty – Freddie Mac Putbacks Resolved for 1¢ on $

US Taxpayers on Hook for $5 Trillion of Fannie, Freddie Debt … No Matter What Barney Frank Says

Obama Administration Using Accounting Gimmicks That Would Make Enron ‘Blush,’ Says Republican Lawmaker


Fannie Mae loss widens, asks taxpayers for $7.8B (AP, Nov 8, 2011):

WASHINGTON (AP) — Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter.

The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed.

The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions.

Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments.

Continue reading »

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Oct 28

Flashback.



YouTube Added: 08.06.2011

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Oct 08

Could they have stopped the credit crunch? Fannie Mae knew about dodgy mortgages in 2003, says report (Daily Mail, Oct. 4, 2011):

Mortgage giant Fannie Mae knew about allegations of improper foreclosure practices by law firms as early as 2003 but did not act to stop them, a government watchdog has said.

But it wasn’t until mid-2010 before the company’s overseer began to scrutinise the conduct of some of the law firms when news reports emerged of dubious practices, a report revealed today.

An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general of the Federal Housing Finance Agency (FHFA) said in the report.

Fannie Mae responded by hiring a law firm to investigate the claims in 2005, which reported it had found foreclosure attorneys in Florida ‘routinely filing false pleadings and affidavits’ the following year.

Continue reading »

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Oct 03

Flashback:

‘Welcome to the Recovery’: Why Another 11 Million Mortgages Will Go Bad

Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)


If it doesn’t do something about its underwater mortgages, America could sink without trace (Guardian, Oct. 2 2011):

Stimulating the economy is all very well in the short term. But the national legacy of unpayable property debt will weigh the US down for years

It’s now more than six years since Alan Greenspan, in the days when he was still known as the “maestro” of the world economy, conceded that there might be a little “froth”, perhaps even a few “local bubbles”, in the American housing market.

Continue reading »

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Sep 05

Recommended ‘extensive roundup’ here:

Full-Blown Civil War Erupts On Wall Street: As Reality Finally Hits The Financial Elite, They Start Turning On Each Other (AmpedStatus, Sep 3, 2011):

Finally, after trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. As the Eurozone is coming apart at the seams and as the US economy grinds to a halt, the financial elite are starting to turn on each other. The lawsuits are piling up fast. Here’s an extensive roundup:

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Aug 30

It’s Time to Bring Our Mortgages Home – Your Municipality and Community Venture Fund is the Ideal Investor for Fannie, Freddie & FHA Defaulted Mortgages (Solari, August 29, 2011):

By Catherine Austin Fitts (in the first person) and Carolyn Betts

The Administration is now proposing the transfer of significant defaulted mortgages and foreclosed properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration (“FHA”) to large national institutional investors.

A Huge Housing Bargain — but Not for You
The Street (18 Aug 11)

White House Seeks Ideas to Shrink Foreclosure Glut
Catherine, News & Commentary (11 Aug 11)

Enterprise/FHA REO Asset Disposition (PDF)
RFIFinal (10 Aug 11)

Such a transfer is not economic — other than for the large investors and to serve a wider agenda of social control and engineering, including gentrification of numerous areas whose former residents were fraudulently induced and evicted with the use of these mortgages.

I served as FHA Commissioner (See: Austin Fitts Better be Good With Hammer and Nails) during the first Bush Administration and then, several years later, my company, Hamilton Securities Group, served as the lead financial advisor to FHA, providing portfolio strategy advice with respect to $400 billion of financial liabilities and assets, including over 50,000 of foreclosed properties held by the government as the result of mortgage insurance claims for defaulted FHA-insured mortgages.

Continue reading »

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Aug 26


Obama bin Bush: Mission accomplished!

Obama Goes All Out For Dirty Banker Deal (Matt Taibbi, Rolling Stone, August 24, 2011):

A power play is underway in the foreclosure arena, according to the New York Times.

On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.

On the other side is the Obama administration, the banks, and all the other state attorneys general.

This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.

Continue reading »

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Jul 26

Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)


Laurie Goodman On Why Another 11 Million Mortgages Will Go Bad (Business Insider, July 26, 2011):

A major bear on the housing market, Amherst Securities’ Laurie Goodman has predicted since 2009 another housing crash as banks are forced to liquidate tons of bad loans.

Up to 11 million mortgages are likely to default, according to Goodman. This is a frightening figure, seeing as only several million have been liquidated since the crisis began. When it happens the market will be flooded with supply.

Goodman reached 11 million by projecting default rates for non-performing loans, re-performing loans, and underwater loans. Here’s a slide from a recent presentation (via The Atlantic):

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Jun 18


Added: 17.06.2011

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Jun 07

66% Of Las Vegas Mortgages Are Underwater, 27.7% Of Total US Housing Debt Has Negative And Near-Negative Equity (ZeroHedge, June 7, 2011):

Following yesterday’s news out of Zillow of a 0.77% drop in April home values compared to March, today we get an update from CoreLogic which in turn looks at the latest trends on “underwater” (or negative equity) mortgages in the US. In summary: “10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2011, down slightly from 11.1 million, or 23.1 percent, in the fourth quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the first quarter. Together, negative equity and near-negative equity mortgages accounted for 27.7 percent of all residential properties with a mortgage nationwide. In the fourth quarter, these two categories stood at 27.9 percent.The most impacted state is Nevada, which has 62.6% of all mortgages underwater (with another 4.8% in near-negative), followed by Arizona, Florida and Michigan. California is fifth with 30.9% of all homes underwater. We doubt these millions of “homeowners” are benefiting much from the wealth effect.

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Mar 10

See also:

97 Percent Of All US Mortgages Are Backed By The Government



The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.)

WASHINGTON — The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.

About 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter, according to report released Tuesday by housing data firm CoreLogic. That’s up from 22.5 percent, or 10.8 million households, in the July-September quarter.

The number of underwater mortgages had fallen in the previous three quarters. But that was mostly because more homes had fallen into foreclosure.

Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.

Roughly two-thirds of homeowners in Nevada with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with up to 50 percent of homeowners with mortgages in those states underwater.

Oklahoma had the smallest percentage of underwater homeowners in the October-December quarter, at 5.8 percent. Only nine states recorded percentages less than 10 percent.

In addition to the more than 11 million households that are underwater, another 2.4 million homeowners are nearing that point.

When a mortgage is underwater, the homeowner often can’t qualify for mortgage refinancing and has little recourse but to continue making payments in hopes the property eventually regains its value.

The slide in home prices began stabilizing last year. But prices are expected to continue falling in many markets due to still-high levels of foreclosure and unemployment.

That means homes purchased at the height of the real estate boom are unlikely to recover lost value for years.

Underwater mortgages also dampen home sales. Homeowners who might otherwise sell their home refuse to take a loss or can’t get the bank to agree to a short sale — when a lender lets a borrower sell their property for less than the amount owed on the mortgage.

Home sales have been weaker in areas where there are a large number of homeowners with negative equity.

Many banks are also requiring homebuyers to put as much as 20 percent of a home’s value as down payment and the Obama administration is pushing for a 10 percent down payment requirement on all conventional loans guaranteed by the ailing mortgage giants Fannie Mae and Freddie Mac.

Few homeowners in states hit hard by foreclosures, including Colorado, Georgia and Nevada, have 20 percent or more equity in their homes. Higher down payments make it increasingly difficult for those people to sell their homes.

The total amount of negative equity increased to $751 billion nationwide, up from $744 billion in the previous quarter.

Published: Tuesday, March 08, 2011, 11:05 AM Updated: Tuesday, March 08, 2011, 1:46 PM

Source: AP

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Mar 08

Washington’s Blog strives to provide real-time, well-researched and actionable information.  George – the head writer at Washington’s Blog – is a busy professional and a former adjunct professor.



I heard a recent talk by Richard Wolff – Professor of Economics Emeritus at the University of Massachusetts in Amherst (PhD in Economics from Yale) – where Wolff said that 97% of all U.S. mortgages are either written or guaranteed by the government.

As Bloomberg explained last August:

Fannie Mae and Freddie Mac, the government-controlled companies that issued and guaranteed more than 71 percent of mortgage-backed bonds last year. Between those companies and Ginnie Mae, which guarantees loans insured by the Federal Housing Administration, the government backed nearly 97 percent of U.S. mortgages in 2009.

There are supposedly plans in Washington to wind down Fannie and Freddie. Critics say that would destroy the “recovery” in housing.

If continuing to throw money at Fannie and Freddie would stabilize the economy, I might be for it – even though it is not free market capitalism. I am not wed to either liberal or conservative ideologies, and am instead simply motivated to do whatever will work to stabilize the economy and help the most people.

But as I noted in January:

Most independent experts say that the government’s housing programs have been a failure. That’s too bad, given that the housing slump is now – according to Zillow’s – worse than during the Great Depression.

Indeed, PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.

Many also accuse Obama’s foreclosure relief programs as being backdoor bailouts for the banks. (See this, this, this and this). Continue reading »

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Mar 04

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

paul-craig-roberts

This essay is about three recent books that explain how we lost our economy, the Constitution and our civil liberties, and how peace lost out to war.

Matt Taibbi is the best–certainly the most entertaining–financial/political reporter in the country. There is no better book than Griftopia (2010) to which to turn to understand how stupidity, greed, and criminality, spread evenly among policymakers and Wall Street, created the financial crisis that has left Americans overburdened with both private and public debt. Taibbi walks the reader through the fraudulent financial instruments that littered the American, British, and European financial communities with toxic waste. He has figured it all out, and what in other hands might be an arcane account for MBAs is in Taibbi’s hands a highly readable and entertaining story.


Amazon.com: Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America

Amazon.de: Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America

For the first 65 pages Taibbi entertains the reader with the inability of the public and politicians to focus on any reality. The financial story begins on page 65 with Fed chairman Alan Greenspan undermining the Glass-Steagall Act leading to its repeal by three political stooges, Gramm-Leach-Bliley. This set the stage for the banksters to leverage debt upon debt until the house of cards collapsed. When Brooksley Born, head of the Commodity Futures Trading Commission, attempted to do her regulatory job and regulate derivatives, the Federal Reserve, Treasury, and Securities and Exchange Commission got her bounced out of office. To make certain that no other regulator could protect the financial system and its participants from what was coming, Congress deregulated the derivatives markets by passing the Commodity Futures Modernization Act.

Continue reading »

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Feb 03

This is as I’ve said many, many times ‘The Greatest Depression’.


We are officially in the middle of the worst housing collapse in U.S. history – and unfortunately it is going to get even worse.

Already, U.S. housing prices have fallen further during this economic downturn (26 percent), then they did during the Great Depression (25.9 percent).

Approximately 11 percent of all homes in the United States are currently standing empty.  In fact, there are many new housing developments across the U.S. that resemble little more than ghost towns because foreclosures have wiped them out.

Mortgage delinquencies and foreclosures reached new highs in 2010, and it is being projected that banks and financial institutions will repossess at least a million more U.S. homes during 2011.

Meanwhile, unemployment is absolutely rampant and wage levels are going down at a time when mortgage lending standards have been significantly tightened.

That means that there are very few qualified buyers running around out there and that is going to continue to be the case for quite some time to come.

When you add all of those factors up, it leads to one inescapable conclusion.  The “housing Armageddon” that we have been experiencing since 2007 is going to get even worse in 2011.

Continue reading »

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Jan 29


Added: 28. January 2011

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