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Selection from the net

Selection from Naked Capitalism

This is a selection of posts from the blog Naked Capitalism. I have no special selection criteria, I just found them interesting. Naked Capitalism often has a descriptive name for their posts so that's what I use for the links.
The posts are sorted by year, month and name.

Fraud is not fraud because it is not bribery or theft?

Health insurers refusing valid claims, business as usual is in fact fraud. - US considerably higher health care administrative costs than other OECD countries, no better outcome. - Law concept "good faith and fair dealing"; US courts rely heavily on the contract.

Non-profit doing better than for-profit.

OCC, FDIC, the Fed can't get CDO documentation because they are not qualified investors.

FHA to take over bad loans. 10% 2006 adjustable rate subprime loans in serious trouble within 10 months.

lower bonus? maybe temporarily.

Regulators don't understand finance as well as the bankers, action often hidden from regulators.

Many conditions to make market efficient, some regulation good and some bad. - Conditions for efficiency. - Market inefficiencies create profit opportunities. - Industry applying for regulation to avoid litigation and to keep (unfair?) competition away.

Banks won't give realistic valuations. - Making small transactions at high price to raise value of assets. - Rating rules unclear.

FHA lending featured almost everything that subprimes lacked.

Early payment default 30-70% fraud, some borrower, some loaner, some combined - mortgage originator stating wrong income - Banks encouraging false income declaration.

Judges act against improper fees - $1m claimed, real claim $60,000.

Greenspan: It's not my fault - "shocker because no one expected it" - "less than 50-50" chance of a U.S. recession

40% did not present proof of ownership.

Aiming at shareholder value counterproductive. Many examples. (Selection?)

big Morgan Stanley losses, chairman John Mack will not take a bonus

It's OK to profit knowingly from fraud as long as you aren't its main architect. Defense lawyers in shareholders' suits often complain that defendants can be forced to settle claims with little merit rather than risk prolonged and costly litigation. - In a 1994 case the Supreme Court ruled that laws governing securities did not provide for any liability for "aiding and abetting." SEC may sue but not individuals.

30-70% of defaulting subprime loans borrower(/lender?) fraud (/just sign, we'll fill it out) - SEC permitting illegal mortgage modification.

Socialism for the rich - FHA to refinance delinquent borrowers? - FHA requested borrower screening, lost market - Norway: Share capital was written down to zero before committing public funds. - SEC permitting illegal mods

Massachusetts wanted low risk, Merrill sold high risk - Merrill paid back, still sued.

OCC: Forbidding predatory lending is denying access to credit for consumers.

Companies requested to classify assets as Level 1 (mark to market), 2 or 3 (make believe) - SEC: You don't have to. - Mark to market bad, others worse.

Countrywide abusing bankruptcy process, larding up the amount owed by homeowners in bankruptcy by failing to apply payments, adding fees (all fees are supposed to be approved by the judge) and making false claims.

Countrywide "a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards"

Not-for-profit no fiduciary duty; promise fixed rate mortgage, give ARM or option-ARM. - Countrywide sued for selling defective loans. - Vast majority of the loans had inflated income, almost all without the borrower's knowledge. - 70% to 80% of subprime mortgages involved fraud by the mortgage broker, including inflating income?

Merrill misleads Massachusetts about securities.

shareholders should bear costs, managers ought to be replaced - Bear shareholders were expropriated. - mortgage-backed securities parked off-balance-sheet to avoid regulation.

Massachusetts suing Merrill Lynch over auction-rate securities, telephone recordings destroyed

The New Economy was the greatest of Ponzi schemes. - The banks believed in their products? - SEC forced bankster to disgorge bonuses early 1990s.

Suing JPMorgan for questionable swaption affair.

Renegotiating better and better conditions for AIG.

Retention bonus is not cash compensation

Feds won't tell about crappy securities for $1.5t loans.

JPMorgan modifies loans to avoid borrower's foreclosure. Only their own loans, not those they serve.

Keeping the managers is necessary to maintain credit ratings.

Bankruptcy for profit with government guarantees. - Dick Fuld wondering why no bailout. - Salaries money to gamble, pittance compared to bonuses - In 2006 Goldman Sachs paid $20m apiece to more than 50 people. - In Commonwealth countries, if a company is "trading insolvent," its directors are personally liable. - Playing with other people's money, the firms quickly became aggressive.

Unheard of to revise an initial deal to be more company friendly.

Bankruptcy for profit - The threat to quit is empty - Managers demonstrate substantial number of markers for psychopathy. - Good CEOs were the opposite of the investment banking "type", self-effacing, taking blame for failure sharing credit for success, still tenacious and driven. - The administration decided not to fight the provision, afraid of Congress.

AIG pays Goldman taxpayer money, Sachs $12.9b, Merrill Lynch b$6.8b, Bank of America $5.2b, Citigroup $2.3b, Wachovia $1.5b, Societe Generale $11.9b, Deutsche Bank $11.8b, Barclays $8.5b, UBS $5b. - Hundreds of $m bonuses ($170m?). There is no "Sanctity of Contract", contracts often renegotiated. - Insurance companies have to keep money to cover normal reimbursements. CDSs not insurance, need no backup? - AIG executives designing and selling credit default swaps grossly negligent (if not willful) failing to perform due diligence. Pocketed hundreds of millions bonuses, no provisions for funds for paying potential claims. Gross negligence or willful misconduct, criminal negligence or fraud? - Possible remedies.

Possible saving of $4.8m bonus. Wikipedia: total bonus for financial unit $450m, total for AIG $1.2b.

Bernanke good inventions: credit cards, securitization, subprime loans. - Rigorous proof of the existence of a multimarket equilibrium in a decentralized economy?

Banks want taxpayers to take over toxic loans, administration agreeable.

Goldman turns profit, really tax payer money. - $13b taxpayer money from AIG - TARP buys crap for $10b, permitted banks to buy back for $1.1b?

Contracts renegotiated all the time.

AIG begs for fed bailout, then tells fed they are stupid to bailout.

Sceptics jealous or don't understand. Enron, Madoff?

SEC threatened with cuts if persisting - BoA and Merrill conspired to lie to shareholders? - BoA blames the lawyers.

Merrill paid $3.6b bonus before sold to BofA. - Why no fines? - Why low settlement ($33m versus $3.6b)? - Lied to shareholders. - "This is Wall Street" defense - Congress threatens SEC with cut budget if it does not look away. - Merrill had accrued $12b for bonus through Q3, had been lost without bailout. - $3.6b not much money. - payments were warranted.

Treasury made money on TARP? - Profits fully repaid. - Except for leaving Treasury with a lot of overpriced warrants (? don't understand) - Other costs, AIG, FDIC guaranties

Hank Paulson, connection Goldman - Treasury

AIG pays only $19m of $45m pledged repayments. - Derivatives staff blamed for near-collapse of AIG. - Keep staff unwinding the derivatives. - AIG try to reduce the pending payments by "at least" 30%

AIG could not pay CDS obligations, negotiated for 40% cut. NY Fed with Geithner, Treasury and Bernanke's Federal Reserve intervenes, guarantees 100% with taxpayer money.

lenders did not hold clear title - "Yeah, we really do own this stuff".

Selling securities in a trust when the trust does not have clear title to assets in the trust is fraud.

Lots of corruption.

Debt rubbed out when loaners had no documents.

Blankfein: bankers are doing "God's work" - Banks primary function not to provide profit to shareholders, but to earn profit by providing services to the public. Banks should be forbidden to engage in secondary market.

A top executive losing $100m out of $200m should not be pitied, he is still doing very well. Much of shares were sold before crisis. In the olden days, top brass suffered when firms suffered - Lehman top five executives totaling $1b between 2000 and 2008, Bear top five got more than $1.4b. Both required wait several years before selling stock. Both paid heavily in stock. Still well paid. Before 1970 partners were personally liable.

Abacus CDO buyer Caveat Emptor? Defective cars turning into fireballs? Poisoned pet food? - short-sellers pushing synthetic CDOs - tried to asses CDOs but gave up, too much work - Banks trying to offload CDOs

CDO necessary for subprime, CDS only for AAA. CDOs the way to sell subprimes that otherwise would remain unsold.

Next to impossible to get new competition to TBTF banks

Not letting state pay is socialism?

Big investors protest against fees. At last.

Whistleblower fired. - Sarbanes-Oxley: Financial statements not presented in a "full, fair accurate and timely manner" - Tens of billions of dollars of unsubstantiated balances.

Valuation next to impossible, products complicated and incompetent personal.

refusal to investigate - Lehman as of late 2007 was routinely using repo transactions - Lehman gave full and complete financial information to Government agencies, Government never raised significant objections.

SEC cannot bring criminal cases without cooperation of the DoJ.

Institution after institution was bled dry. Yet economists and central bankers applauded the wondrous innovations, seeing increased liquidity and more efficient loan intermediation, ignoring the unhealthy condition of the industry.

DoJ unwilling to implement Sarbanes-Oxley - SEC cannot bring criminal cases on its own, has to secure cooperation of DoJ. - SEC loath to prosecute because no criminal cases have yet been brought under Sarbox. What good is new laws if enforcers unwilling to use them?

Missing or unclear jurisdiction.

Congress cringing to big business because if they don't do as they are told, big business will destroy economics even more than they already have?

Geithner's New York Fed allowed Lehman Brothers to use an accounting gimmick to hide debt - New York Fed arranged for AIG to pay one hundred cents on the dollar on bad debts. - Three to tango: seller, buyer, accounting firm. - NYFed supported Lehman's efforts to conceal problems. NY Fed going over Lehman's books daily. - Examiner found "materially misleading" accounting and "actionable balance sheet manipulation." Ernst & Young found no problem with Lehman. - Banks fail stress tests, devise own stress tests which they pass. - A MUST READ

Not suing will hurt more?

JPMorgan pays Goldman not to compete. Blatant violation of anti-trust laws?

Goldman misrepresenting assets. - H. Paulson at Goldman buying CDOs with liar's loans. As Treasury Secretary he warred against regulation; clear that Goldman sold worst CDOs, representing them as best.

Municipal adviser paid by banks to give community bad terms.

Greenspan: It is possible to lose control of a process that only we fully understand.

It wasn't me, it was PricewaterhouseCoopers. - No secondary liability. PwC auditor to Goldman and AIG, signing off valuations of SAME instruments at DIFFERENT prices at each firm.

Rating agencies arguing First Amendment exemption (freedom of speech?). - Did the banks misrepresent the assets rated?

From +$26b to -$130b.

It's all in the header

Compensation in the financial services is a classic example of market failure. - Credit default swaps allowed hedge risk with undercapitalized counterparties like AIG and the monolines. If banks had accounted risks properly, they would have had to carry higher capital levels. - Pay to retain "talent" was dubious. Profits for doing nothing when interest rates fall and risk spreads narrow and assets values rise. Profits turned to losses, no one was forced to disgorge undeserved compensation. - Banks would not have deep enough pockets to foot this bill. - Lehman's Dick Fuld reputedly lost over $500 million dollars in stock value, and a few of Bear Stearns execs lost close to a $ 1 billion dollars each in asset value.

Financial intermediation is tax on commerce. - Firms subject to licensing requirements. - Everyone would benefit from "innovation". - opacity, leverage, and moral hazard are direct intent of innovations. - High frequency trading example of non-productive innovation

Bonus > $16m, fined $100k for lying about losses.

Pays for one "mistake", several investigations finished

Bank delays action, then says it is too late.

Rating agency fees correlated to willingness to look the other way. CDOs top, ABS next, regular corporates cheaper. Loans with the same loss profile will get a higher rating in an ABS than if they sit on their balance.

In 2003, the US Chamber of Commerce spent at least $100 million to electing judges sympathetic to its agenda. Case moved to a sympathetic appeal court judge.

Money "repaid" largely accounting tricks sanctioned by Congress and the White House. Banks in perpetual backdoor bailouts via Fannie and Freddie. - After 2004 Fannie and Freddie were directed to cater to control frauds like Countrywide. Congress adopted unprincipled accounting principles that permit banks to lie about asset values

Judge not going to consider any evidence that the foreclosure is in error. - Newly discovered allonges are fakes. - An allonge used ONLY when all space for endorsement has been used up, firmly attached to the original.

GMAC officer signed 10,000 documents a month.

Strong business incentives to supply ever-increasing amounts of expensive technical care.

Two components: the note, which is the borrower IOU, and the mortgage which is the lien on the property. The note to be endorsed in wet ink. Procedures were not observed on a widespread basis. Physical document deliberately eliminated. Note must be endorsed in wet ink, showing chain of title, minimum originator => sponsor => depositor => trust. - A MUST READ.

The pervasive use of limited liability structures for virtually all financial services activities creates "heads I win, tails you lose" dynamics.

Admitted he signed thousands affidavits each month with no knowledge of the contents.

government exchanging preferred for common.

The notes are still in originator warehouses. That means the trust does not have them, therefore it is not in a position to foreclose. - Phony allonges have become the preferred fix. Allonges that show up are inherently in violation of UCC. - A MUST READ.

Emphasis NOT doing things correctly but fast. - Comment on deadbeat borrower

Banks lengthen foreclosure to keep borrower liable for real estate taxes. - Big failing of securitization industry was not to convey borrower IOU correctly to the securitization trust. - Lie that MERS holds legal title to a mortgage as an agent for the owner of the loan. Banks ADMITTED affidavits were fraudulent, prepared by people with no direct knowledge. - The owner of loan is always a trust. Mortgage note is never transferred to MERS.

Freezing foreclosures for all banks in all states, whether we have reason to believe them to be in error or not, is not the prudent step to take.

Legally impossibility to foreclose someone without a mortgage, to foreclose the wrong house, for the wrong bank to sue for foreclosure. All of those things have occurred.

Prosecutors target low level criminals hoping they will turn evidence on the kingpins.

Borrowers complaints: Servicing errors. Origination fraud. Chapter 13 bankruptcies not honored. In mod program. - No incentives to help borrowers. Principal and interest to the trust. Incentives to foreclose where borrowers might be viable with a restructured loan. Banks diverting principal repayments to pay themselves back? Go to court for: servicing errors, fraud, Ch. 13 bankruptcy, told they will get HAMP modification but bankruptcy proceeds - the parties foreclosing have no incentives to produce the best outcome for the creditors. - foreclosures: bottom tranches take first losses, mods: allotted across all tranches

Affidavit substitute live witness testimony. All testimony requires the witness swears to tell the truth, is competent and has personal knowledge of the facts. Attorneys have an affirmative duty to report known perjury.

Mexico, Croatia and the Dominican Republic treat their poor and disenfranchised better than US when it comes to civil justice. - People took out mortgages they can't pay back. The government is making something that is just a clerical error into something that would be nefarious or whatever?

Government won't stop foreclosures, in error or not. - Big banks are insolvent, not only facing liquidity problems. - Record high bonuses, $144b. - Administration buys that the foreclosure problems are "sloppy paperwork", not a case of rampant, systemic fraud. - Likely supervisors will find several trillions of dollars bad assets are claims big financial institutions have on one another.

Congress passing bill requiring states to accept the weakest state-authorized electronic notarizations. - Banks threaten to wreck economy even more if not accommodated.

Robo-signed foreclosures routinely filed while loss mitigation departments consider requests for modification and short sales. - It is just a paperwork issue? Lack of investigation, denial, and confidence building talk.

Illegal fees should go to debtors.

Changing the locks on and entering homes they don't own.

Illegal fee splitting. - In bankruptcy attorney has to disclose every disbursement. Fee payment to LPS never disclosed since LPS requires confidentiality.

Examining whether financial firms broke federal laws when filing fraudulent court documents to seize people's homes. - ACLU of Florida filed public records requests to determine whether home-owners have their constitutional rights violated.

Obama administration: "We have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed."

Improper robo signed affidavits are fraud. Replace with correct not enough.

Approximately 450,000 foreclosures in Ohio since 2005, potentially all robo-signing. Fines could add up to $11.25b.

Banks reimbursed by funds in the trust for all costs related to litigation and extra processing of foreclosures - Banks invoking "sanctity of contract" ignoring own contracts.

Treasury claims on AIG are a whooper. - banks keeping borrowers far longer in trial mods, with penalties and late fees. - Geithner hinted banker gaming was disturbing but Treasury didn't have much power. - If they never missed a payment, they may still face back payments, penalties, and even late fees that suddenly become due on their "modified" mortgages resulting in the loss of their homes. - A MUST READ.

Banks foreclosing homes before owning them. Banks pursue foreclosures after delinquent homeowners sold the houses and paid off the mortgages.

If mortgages were not properly transferred in the securitization process, mortgage-backed securities would not be backed by any mortgages whatsoever. The trust has standing to foreclose if, and only if, it is the mortgagee. - Ms. DeMartini testified.

Foreclosure process reviews found "widespread, and in our judgement, inexcusable breakdown in basic controls in the foreclosure process". - A high percentage of foreclosures (estimates run at over 50%) are the result of bank errors and illegal application of payments.

Seeing a GMAC employee and an attorney for the local foreclosure mill perjure themselves. - GMAC Mortgage is initiating an "independent" review of foreclosures.

The system is designed to actually encourage that kind of thing, even with the fines [paid tens of millions of dollars in fines, earned hundreds of millions.]. - Behave badly, and the government might take 5% or 10% of what you got in your ill-gotten gains. - "We didn't get things quite right. But our understanding of the issues is pretty sound." - Law changed to let banks squeeze more.

Greenspan: "I don't think there is any need for a law against fraud" but changed his mind.

One JPMorgan Chase employee found errors in 5000 of 23,000 delinquent accounts the bank was in the process of selling. When her manager ignored the information she provided, she alerted the general counsel. She was fired within days, apparently in retaliation.

Problems are mistakes and "sloppiness". - reviewed 102,000 cases, nothing was amiss. Or could exceed 5%.

Mortgage originators and sponsors simply quit conveying mortgage notes. - No one in the industry transferred the notes. It means that residential mortgage backed securities are not secured by real estate.

Why not? Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. - President Obama didn't see. Or maybe he didn't want to see. - Assigned economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. - Management stayed in place. Prosecuted no one. The Fed cut the cost of funds to zero. The goal of policy was "to get credit flowing again." The banks threw a party.

Victims told by the bank not to pay so as to qualify for a mod. - Two types of wrong foreclosure: 1) Victims not behind or charged junk fees. 2) Correct procedure not followed for late borrowers. - Lost documents, no bank response, inappropriate fees. - "No Harm, No Foul". "for the most part" the borrowers are in default. - lost documents, inability to get a bank response to an application, inappropriate requests for modification fees. - Jamie Dimon on deadbeat borrower: for the most part we're not evicting people who deserve to stay in their house. - A MUST READ

A significant number of the clients facing foreclosure has made every single mortgage payment. - Maybe they really were late once. Banks have been found to delay posting checks to incur late fees. - A MUST READ.

Most borrowers don't fight foreclosure. - Foreclosure moving apace, bank saying otherwise. - Charging unwarranted fees. - Filed for Chapter 13 bankruptcy, the bank is improperly trying to take house. - The longer a loan stays in a trust and is not liquidated, the longer the bank can tack on miscellaneous fees. - These expenses are paid by investors. - Foreclosure costs should not be more than 3-5%, if losses higher probably appraisal fraud or losses bank has tacked on

Sometime in the early 2000s, it appears that the industry simply quit observing the requirements of its own contracts, called pooling and servicing agreements.

Attorney made not a single payment in over 18 months, no foreclosure notice.

Nevada focuses alleged deceptive practices in mortgage servicing. Arizona seeks restitution to eligible consumers and civil penalties, attorney fees, and costs of investigation to the State. - Fines for violation of the 2009 consent decree and violation of the Arizona Consumer Fraud Act. - Wrongs: Borrowers told they had to default. Told no foreclosure. Promising to act on mod within set time. Telling consumers they would get permanent mods. Wrongly telling credit bureaus about default. Bait and switch on mod terms.

"banks entering and changing the locks on homes they had not foreclosed upon" - Making false and misleading statements to investors.

Feds above the law?

Taking impermissible legal fees. - DocX, the LPS subsidiary engaged in robo signing and filing of other questionable documents. - Not limited to DocX.

Lehman accountants Ernst & Young specifically approved of Lehman's use of Repo 105.

It's all in the header

Pushed into foreclosure while negotiating modification - difficult to get records for payments and fees

When banks kept mortgages, modification was standard. - Banks win on foreclosure, investors lose. - Borrowers don't trust banks, next to impossible to correct errors. - Some banks answered < 2% of applications.

Partners of GMM have admitted under oath that no attorney ever read the filings. The partners made clear that the practice has gone on for the past several years.

"Fraud" is pretty difficult to prove. The hurdle is proving intent. - Bear sold toxic mortgage securities to investors and then sold back the bad loans to the banks that originated them at a discount. The traders would pocket the refund.

Chase's records about its customers' debts were often false. - Using robo-signed documents to file a lawsuit, then deliberately fail to tell the "debtor" that the lawsuit is pending, then getting a default judgement when the debtor fails to show up in court.

Banks exonerated from responsibility. A fee-maximizing "sweatbox" strategy, save the costs of property maintenance and real estate taxes. - The foreclosing party either has to have the note or prove that it bought it from someone who actually has the note. - In 50% to 70% of the cases, the borrower got in serious arrears as a result of servicing errors and compounding fees. - The borrower had been wrongly evicted, and everything in her apartment was dumped on the curb.

Inquiry doomed from beginning, too little time, personal, money. Top suspect protected.

Banks did horrible job in protecting and documenting their ownership interest. - Whether the plaintiffs were legally entitled to foreclose.

U.S. Bancorp sold property to Bevilacqua. U.S. Bancorp conducted an invalid foreclosure because it didn't properly own the mortgage at the time.

Some defaults "honest" (losing job etc.) - Losses from bad loans, CDSs - For every $1 in BBB subprime bonds, ten times the amount was created in CDS, typically on synthetic CDOs - auction rate securities fell when monolines downgraded

At minimum serious omissions and misrepresentations to investors. - Cassano's "get out of jail free" card was that he told his accountants what he was up to. - Richard Fuld for Sarbanes-Oxley and SEC violations should be clear case.

It is not clear why the parties most directly harmed, the investors, are doing nothing, at least so far. Fixed income investors don't have any incentives to rattle the cage. Still claiming only technical errors. - RMBS not mortgage backed securities?

Banksters are getting record pay for 2010, after having gotten record pay for 2009 after having wrecked the global economy. - Banking profits are heavily dependent on government subsidies: super low interest rates, regulatory forbearance, and its kissing cousin, dubious accounting.

Attorneys must report foreclosure fraud to judges. Good idea, will it hold?

Bank is judge, jury and executioner about charges, abuse common. Detailed payment records difficult to get, difficult to read. - 50% of foreclosures service driven. - Ugly example.

No barring from working in industry after fraud settlement. - $20b sounds ridiculously little. Covering what? - No imposing new servicing standards.

FBI heavily involved in S&L, not now. - Advertising good loans, selling bad. - Congressmen getting cheap Countrywide loans - For every BBB subprime $1, $10 in CDO/CDS, mostly synthetic - Like Enron, executives in cahoots both creating questionable products and presenting a misleading picture. - First go for the foot soldiers.

Easier to get conviction on small crimes. - Enforcement staff undermanned. - Our system has become deeply corrupt.

Many SEC regulators went to work for the very same firms they used to police. - I also want to thank SEC for the amazing things they done to the country, to the financial community, and a lot of your law practices. - SEC and Wall Street makes agreement on fine, Justice Department approves, WS pays SEC, WS is free. - A MUST READ.

Sarbanes Oxley law mandates CEO and CFO to check internal controls and to report findings. - Sarbanes Oxley Sections 302, 404, and 906 require CEOs and CFOs to keep systems of internal control. They must regularly test controls and report findings to shareholders and independent accountants. "Knowing"/"willful" violators face fines up to $1m/$5m and jail up to 10/20 years. - must disclose significant deficiencies in internal controls and fraud involving all employees with significant role in internal controls. - Lehman derivatives books utter disaster at time of collapse: other banks' books also disasters? - A MUST READ.

"review" finding no unjustified foreclosures - Homeowners are told to intentionally default by banks. - Illegal foreclosures only on soldiers? They have been targeting soldiers? - Homes with no mortgages or where the mortgage had been paid off, where borrowers had been given letters that they had been approved for permanent HAMP mods being foreclosed upon

Foreclosure mills trying to break bankruptcy stay. - Tricked to sign agreement to bypass bankruptcy procedure. - Credit card customers must agree to mandatory business friendly arbitration.

Passwords widely spread on LPS, permitting unauthorized modifications of documents.

OCC forbids national banks from providing loss mitigation data to the states. - Homeowner asking for help gets higher bill.

SEC undermanned, Congress threatens to cut budget if SEC sues. - Violations: securities fraud, insider trading AND violations by the CEO and CFO of Sarbanes Oxley, SOX dropped. - Accounting liability is with Ernst & Young, for professional malpractice. Executives can use complicit accounting and law firms as liability shields. - Fined $67.5m without admitting or denying

Bad faith - Addressing and cleaning up this rot would lead to a financial crisis? - Leaving a banking system full of overvalued dud assets ultimately costs more than the painful exercise of write-downs and renegotiation. - Missed one payment, encouraged to enroll in HAMP for mod. After 9 months mod is denied and billed $12000, almost $8000 in extra fees. - payments be applied first to principal and interest - pyramiding charges without telling the borrower - also investors got improper fees and charges - A MUST READ.

Mortgage handling streamlined, correct handling would need much more personnel - settlement should be based on damage done, not on costs for banks

Server let $4000 insurance lapse, replaced it with $33,000 insurance

Law requesting correct documents killed - Bill required that banks disclose chain of title, required the foreclosing party reimburse legal fees when plaintiff failed to prove ownership. House committee did not like bill, would not give it a hearing. Representative enlisted but was late to session. Rep. earlier denied loan mod, now principal reduction from $190k to $88k.

Banks suggesting cosmetic controls

Prosecuting criminal CEOs will destroy free enterprise? (Free enterprise is inherently criminal?)

Banksters compromise: accept their illegal actions. - Banks want to be trusted. Current practices to fall within settlement.

1999 bank reform: Bank subsidiaries out of reach of OCC, mortgages moved to subsidiaries. - Fed keeping OCC examiners from looking at non-bank subsidiaries, banks moved operations into non-bank subsidiaries.

Borrower awarded house for slipshod baking counsel

General Electric was bailed out by taxpayers and stored so much profit abroad it paid no taxes for two years.

Acting comptroller of the currency insists banks can't be asked to pay anything remotely resembling the damage they've done. - forged documents and false affidavits as "mishandling"? All foreclosures are warranted. People being foreclosed upon who had no mortgage, impermissible application of fees, using suspense accounts to increase fees, holding payments to make them late, using force placed insurance, padding or double dipping (charging the same fee to both investors and the borrower), and applying fees so as to produce fee pyramiding. Banks aren't modifying mortgages. - Make money foreclosing, automated so it's profitable; they need the proceeds from foreclosures to reimburse themselves for money they've advanced to investors. - You could appropriate all the big banks and it wouldn't even begin to pay for the damage done. - A MUST READ.

Wachovia launders $378.4b, pays $110m in forfeiture, fined $50m.

End of partnership shifted interest to short-time, risque endeavors. - Trading has high barriers to entry (major player in Treasuries, major corporate issues, and interest rate swaps in all major time zones, which implied not just tech but other infrastructure: offices, salesmen, communications) - Morgan Stanley salesmen encouraged to "rip customers faces off". Bankers Trust, whose staff was caught on tape discussing with relish the many ways they screwed over customers, did not survive. - SEC was feared in the 1970s and early 1980s.

Criminalization of productive social and economic conduct? Attempt to regulate finance is witch hunt?

Won't consider evidence that foreclosure is in error

Passwords to bank records widely shared. Easy to change records. - Missing payments, wrong-directed payments. - Limited time for control. - OCC failed to do any verification. - Illegal sharing of legal fees, unauthorized practice of law. Reward for speed, application of mortgage payments to incorrect accounts.

Banks cheated taxpayers by presenting Federal Housing Administration with false claims - Two firms refused to cooperate with the investigations. Audit on BoA: company failed to correct faulty foreclosure practices even after imposing a moratorium. - Wells Fargo senior managers broke civil laws.

AIG loans against law, collateral should be high-quality. Fed NOT authorized to lend against a dead dog. The assets were already pledged.

Judge says he doesn't care if the creditor is owed the money.

The Case of the Mysteriously Appearing Allonge.

Banks get cheap fed money, leverages at least 10 times, lends to fed for much higher rate.

Filing spurious motions for sanction - Securities are not mortgage backed. Systematic frauds on courts (robo-sigining..) no state bar associations sanction the attorneys involved.

BoA employee: Countrywide did not endorse notes. Lawyer denies. 104 of 104 not endorsed. Perjury? - Failed to adhere to securitization procedures, as transferring original promissory note to the trusts that had purchased the loans, as required under the pooling and servicing agreement. Calls into question the securitization of these loans, as well as Bank of New York's right, as trustee, to foreclose on them.

An amazing story of murder and cover-up

BoA using investor money to get out of scrap, although necessary support is missing

The failure to go after bad actors puts the good guys at a competitive disadvantage. - Deputy attorney general: is business hurt by criminal investigations? Yes it is. - Example Beazer Homes: Lower mortgage rate for fee, then not giving lower rate. Offering down payment help, not disclosing house price rise by same amount. Justice Department interferes, forces bad deal.

Threatens to lower US rating. - Attacking health care and pensions. Not wars, Bush tax cuts, private health care. - US can create money at will, no risk of default, risk of inflation. - Report recommending keeping CRAs responsible for knowingly or recklessly not conducting a reasonable security investigation. Two days later, S&P changed rating to negative (risk for downgrading). House Financial Services Committee removes Dodd-Frank provisions subjecting CRAs to expert liability.

Adam Smith: Bank regulation was as necessary as fire codes on urban buildings; ban on high-risk, high-interest lending, 18th-century version of subprime.

Banks don't maintain houses, investors are losers. - Bank offered $1.1m for house with mortgage $1.3m, refused, foreclosed, sold for $200k. Investors lost.

Tom Miller, Iowa AG leading 50 state AG negotiations on mortgage abuse, recants "jail the baddies", promises not to put people in jail. - DoJ reportedly pressing state AGs to release the banks from liability for a host of alleged violations, settlement looks like cash for a broad release.

At least 5 of 14 banks are not complying with signed consent decrees. - In searchable online databases, Reuters found more than 1,000 mortgage assignments that for multiple reasons appear questionable. 11 Federal agencies looked at 2800 loan files, only roughly 100 were foreclosures; pretty much no foreclosure was found unwarranted.

Borrowers got $7000 or $7000 + other compensation? - Steered prime borrowers to higher cost subprime loans, doctored documents so subprime borrowers got loans they weren't qualified for. - Wells Fargo sales staff falsified or changed borrower's incomes. - Investors suffer. Administrator shall provide an additional amount up to $7,000 in appropriate remedial compensation to reimburse the borrower for any expenses attributable to the foreclosure or short sale; additional to what?

Negative correlation between CEO pay and performance

Team Obama pro-bank pressure.

Borrowers made every mortgage payment on time. House burned, told not to make the next payment. Insurer paid, Chase put money in different account. Foreclosured.

Georgia passed strong anti-fraud laws; CRAs refused to rate Georgia loans. - Threatens to downgrade US and other countries that don't support banks.

Settlement making things worse. - BoA sued to buy back mortgages lacking documents and not confirming to standards.

Countrywide and BoA have flagrantly disregarded consent decree. Borrowers mis-sold, investors misled, abusive servicing, promises violated, filing of fraudulent paperwork. - Interest rate reductions promised, modifications often gave HIGHER rates. - foreclosures fraudulent, investors would not have an enforceable or secured interest in the mortgages. - foreclosure defense attorneys say 50% to 70% are bank-driven. - Catherine Cortez Masto only AG to investigate if BoA kept their promises. They didn't.

BoNY engaged in fraud? - BoNY didn't tell investors loans were defaulting as requested. BoNY made false certifications regarding holding collateral as stipulated. - a 92% chain of title failure rate in Chapter 13 filings. - The banks have to continue looting, the story goes, or they'll stop creating jobs in Manhattan.

S&P publishing higher ratings than analysts recommended.

For two decades SEC has been systematically destroying records.

Mortgage insurer paying a fee to laying off some of the risk to the banks. Instead fees were paid but deals structured so no risk to the banks. Substantial evidence banks had defrauded taxpayers; no action. - Firms allegedly required reinsurance partnerships violating Real Estate Settlement Procedures Act. - HUD's attorneys formally referred its case to prosecutors, believing in settlement in the hundreds of millions of dollars. More than year and half no settlement, doubt whether case remains active.

Banks know AGs are carrying gun loaded with blanks. - Sue small fry over mortgage-related frauds.

$25b in real life $3.5b - $5b. - $1,500 to borrower lost home to foreclosure. Windfall for OK foreclosures, pathetic for wrong. Sum $1.5b or 1 million foreclosures? - Saved costs no relationship to banks' legal liability.

Hire soi-disant independent parties. Pretty much everybody with a brand name either have a relationship with the big banks or is keen to develop one. The reviews won't be made public. - Even top grade legal talent can't determine there was no financial harm, they simply lack the information to do so.

PricewaterhouseCoopers, Promontory Financial Group and Treliant Risk Advisors are all directly serving mortgage banks.

In July investigations found that past robosigners were still cranking out signatures. Six robosigners at five different banks identified.

President Obama: the banks did nothing illegally.

Bank routinely forecloses on wrong home, on home with no mortgage, refuses talk about short sale, sends borrower into HAMP-created hall of mirrors and forecloses Anyhow. JPMorgan no legal relationship to Jacobini at time of break ins. Judge refuses to dismiss case against bank.

Everybody's breaking the rules, blah blah blah - Bernie Madoff stole from rich people, which made him a prime target. - Sarbanes Oxley requires executives to establish and maintain.

It is impossible for bank to foreclose in name of a trust legally, since mortgages were not transferred in the manner necessary.

Citigroup stuffed fund with crappy CDO and went short against them. - Earning about $160m, investors lost $700m. - The agency claimed 19 companies had broken fraud laws they previously had agreed never to breach.

Wall Street CEOs signing SEC documents knowing they contained material misstatements. - Big news convictions for petty insider trading. - Highly automated software was programmed to apply payments contrary to terms.

Felony indictments from Nevada AG's office are first signs law enforcement take financial crimes seriously.

Notarization pages and assignments prepared separately?

Supervising the filing of tens of thousands of fraudulent documents.

Banks lied during the crisis. - Regulators lied to Congress. - Regulators continue to lie.

IG half rights, should leave to DoJ. DoJ won't take half cases. DoJ not interested in mortgages.

If they are not permitted to break the law, the will leave the state.

List of crimes.

Banks asking for more.

Any aid to a present bad Bank is the surest mode of preventing the establishment of a future good Bank. - In 2007, 7 percent of Goldman's revenues came from potentially productive investments like equity and debt underwriting. 84 percent came from trading and principal investments and from asset management and securities services, activities with little bearing on raising money for real companies.

Violating Sarbanes-Oxley

Filing for bankruptcy puts stay on claims. - JPMorgan fabricating proof of claim

Early warnings

People who are in government are uninterested in and incapable of holding financial interests accountable for their behavior.

Widespread, serious, repeated data discrepancies.

Payoff amount inflated by $18,000 due to bogus late charges and force placed insurance, sued and lost (1990s)

BoA inflated borrower appraisal and income, insurers object, BoA blames Fannie

Country official finds abuses, feds find nothing.

Robo-signing is forgery

Breaking bankruptcy stay - Banks: robo-signing just paperwork, all foreclosures deserved. Deed changed by Photoshop, deed not checked against original but assumed correct. 30% of deeds used for MFRS fraudulent.

After almost four years, small fry is sued. - Nick Leeson and Jerome Kerviel fast trial.

Small investigations find big problems. - Errors quantified. - 75% of assignments of mortgage are invalid, 27% of invalid assignments are fraudulent. Current owners of mortgages could be determined for 287 out of 473 (60%). - In 45 percent of foreclosures, properties were sold to entities improperly claiming to be the beneficiary of the deeds of trust. - San Francisco accomplished in few months what Federal government and state AG weren't able to do in nearly a year and a half with far greater resources at their disposal.

It is easy to sue if you want to. JPMorgan Chase forgiven because "a strong record of compliance with securities laws". BoA and Merrill Lynch settled 15 fraud cases and received at least 39 waivers. Citigroup is one of rare Wall Street giants to lose significant privileges recently. - SEC has defense for doing next to nothing: Congress cut off funding when it tried to be tough.

Banks keep charging fees for mortgages that have been satisfied and thus do not exist any longer. - Property sold, still reported as asset. More non-existing assets. - Investors pay.

Banks can credit HAMP (taxpayer) money to settlement (preliminary).

Over 13,000 foreclosures in MERS name where MERS "often" lacked standing to foreclose. - MERS members have saved over $2b in recording fees.

statue of limitations run out on securities filings more than five years old - 1998: tobacco agreement worth nearly $250 billion over the first 25 years - $26b agreement means $5b to pay for the banks, rest from investors and taxpayers - first layer of supervision is the banks reporting on themselves - bank driven foreclosures and looting of investors' funds via impermissible and inflated charges

Mortgage satisfied, lender keeps note. Big problem for borrower who still can be sued for more money.

Stealing from home-owners, investors, taxpayers is their business. - Trust the bank, there are no systematic issues - Small deviations permitted, can have big repercussions - reasonable assurance that affiants have personal knowledge

Banks allowed certain level of reportable errors. - Number of permitted errors 5% - The bank can report you paid $50 less than you did and take extra fees - 1% wrongful foreclosures acceptable

Going tough on banks gives short dip and powerful rebound. - 10 biggest banks hold 61% of industry assets. 20 years ago, it was 26%.

Example of changed documents - All the documents pertaining to a specific mortgage (the note, the mortgage, which is the lien on the property, title insurance, etc.) go in a single file called a collateral file. It is supposed to be with the trustee or a custodian hired by the trustee, unless it has been sent out for a specific purpose. The documents in a collateral file are put in in a particular order (generally chronological) and are supposed to remain in that order. - The allonge served in December 2009 is different from the allonge in the court file.

Larger banks got an implicit subsidy of between $6B and $300B a year from the widespread belief that the government will not let their bondholders lose money.

Not only borrowers suffer, also investors like pension funds and communities - Investors were promised 15% cap on investor-owned loans. No cap in signed document.

It's all in the header

4.3 million eligible borrowers - Direct mailing, several tracing methods, 5.6 percent could not be delivered. National print, online advertising in both English and Spanish.

BoA illegally using investor assets to pay settlement? - Settlement expected. Hud secretary claims investor approval for mortgage modifications for settlement, investors protest.

Banks allowed certain level of reportable errors. - Number of permitted errors 5% - The bank can report you paid $50 less than you did and take extra fees - 1% wrongful foreclosures acceptable

Institutionalize bank theft and foreclosure fraud, hiding fraud. - The metrics let the banks systematically steal from you and defraud the courts without risk of consequence. - One judge wrung more out of Wells for stealing from a single homeowner, $3+ million in punitive damages, than Wells faces for a whole quarter of similarly stealing from many of its borrowers.

Tens of thousands of California widows victims when Keating gave them junk bonds for their life savings. - DECONCINI: You believe they'd prostitute themselves for a client? PATRIARCA: Absolutely. It happens all the time. (Greshams dynamics)

Mortgage settlement signed by 49 states allows rampant foreclosure fraud to continue unabated. - Twisting law. - Fraud is rampant, self-evident, easy to prosecute. - Wells Fargo testified that every home mortgage loan was administered by its proprietary computer software. - Every time Wells makes a "mistake," Wells makes money.

Jones v. Wells Fargo - Wells Fargo admits actions part of normal course of conduct - Fined but continuing - Refusing to voluntarily correct errors. - Two people told iWatch News that Wells Fargo's audit turned up accounting errors in nearly every loan file reviewed.

Required to register mortgages, doesn't, avoiding $b fees.

"it would be irrational for savings and loans [CEOs] not to loot"

It's all in the header.

Deregulation did not begin with Reagan, it was Carter or earlier, Clinton was also in on it.

the growth of income inequality under Obama is worse than that under Bush

Don't fight banks if you want a career.

Business as usual.

You can use Sarbanes-Oxley

Breaking the law is not illegal?

Court questions fabricated allonges.

Fined $2.8m for overbilling customers by $32.2m over 8 years.

Big firm foreclosure costs taken by investors. Many examples of foreclosure abuse.

Bank again and again taking actions that increase losses to investors.

The CEO "I'm in charge and I know nothing" defense is alive and well. No Sarbanes Oxley.

Incapable of capturing document forgeries, loss or deliberate late application of payments, the application of "junk fees" and impermissible fee pyramiding, notes held at the originator rather than the trust, lack of cross checking.

Before, you could refinance, now swaps locked with ginormous termination fees.

OK to break contracts with individuals over their pension funds, but not with financial firms.

Negative correlation between CEO pay and performance

Citigroup stuffed the fund full of crappy CDO tranches and went short against them, and got investors to buy it by telling them the assets were selected by an independent party. - Citigroup profit $160m, customer loss $700m.

Banks can make mistakes. Should they correct them or be permitted to execute faulty action? - Reportable error has to happen 5% of the time to matter. - A new right for borrowers to sue banks?

TARP meant to "foam the runway" - Barofsky found Republicans more honest than Democrats

Credit card companies mass produce documents, falsified credit card statements produced years after borrowers supposedly fell behind on their bills.

Witness found mysteriously dead.

Freed in spite of good evidence

Mankiw: Consider an owner of a savings and loan who is taking excessive risks, hoping that they pay off and make him rich. It is only prudent for him to loot as much as he can, because he knows that his gambles might not pay off. - Mankiw: Problem is overregulation.

End ban on widespread solicitation and advertising; in the 1990s led to an immediate upsurge in fraud.

Rampant fraud is carelessness? - Citigroup stuffed the fund full of crappy CDO tranches and went short against them, and got investors to buy it by telling them the assets were selected by an independent party. Citi was a typically inefficient looter, earning about $160m while investors lost $700m.

Court questions MERS claim

Claiming credits for uncollectable debts, even debts already erased in bankruptcy. - Look only at bank records. No effort to validate whether those records are correct.

Foreclosing and breaking in wrong house. Twice.

If enough of them take an aggressive position, the IRS is kind of estopped from arguing with them because so much would blow up. - Intending to do things was good enough. - Real Estate Mortgage Conduits, aka REMICs, allow mortgage securitizations to be pass-through entities, which means their income would not be subject to double taxation. REMIC needed to adhere to strict requirements. One was it would acquire assets within 90 days of start-up date. Often not adhered to.

Monsanto seeds make crop fail - Monsanto's seeds can sterilize wild crops. - Monsanto sues farmers cultivating Monsanto seeds through seeds from neighboring farms blowing onto their property. - Monsanto's Roundup causing glandular insufficiencies and tumours in rats.

It does not matter if they break the law and take your home, as long as they don't do it too often. The rampant foreclosure fraud currently choking courts allowed to continue unabated. - Monitors hired by banks. - Regulators decided banks can screw up 1% of the time, poor wronged homeowner will have to fight that uphill battle all on his own. 33,000 wrongful foreclosures since 2008 is perfectly acceptable.

Incredible story. Incredible that nothing happens. - A MUST READ.

How Clinton tried to go against Wall Street fraud and failed.

Why should HFT be tax exempt?

Saying just follow the law and you won't have a problem is complete and utter non-sense? - But you'd think the banks, if not various regulators, would cringe when their lawyers argue they needn't follow the law lest it lower profitability.

Health insurance companies often find ways not to pay for treatments that should have bee covered.

LPS got away with $2m fines and sacrificing one small fry.

Reviews expected to cost $4 for every $1 paid to homeowners. - GMAC paid PwC $10,000 per loan review? F&F paid total 1,250 for one judicial foreclosure.

Banks agreed to forgive billions of dollar loans in exchange for waivers from potential liability. - "Many of us expected a settlement to hold banks responsible for their misconduct; not a bank bailout settling with other people's money," the Association of Mortgage Investors said. - FHA loans, despite low down payment rates, historically had low default rates. That was before the crisis.

HSBC fined some weeks earnings. - Government offering blanket waiver from criminal accountability. - HSBC's: it should not be criminally charged because it would destabilize the financial system. - Solution: break up largest banks.

OCC got a new director, better functioning?

Promontary analysis finds $14m out of compliance transactions, Lawsky finds $250b. Feds protest. - Geithner Doctrine: "nothing must be done that will destabilize the banking system." - New York's Benjamin Lawsky filed order against Standard Chartered for money laundering with Iranian banks. Federal regulators went on the warpath against Lawsky.

BoA ser 2 - Examples of abuse, e.g. suspense account abuses

OCC deliberately devised process banks could exploit to claim that nothing bad had taken place. - Banks bitch about costs, reviews aborted. - $8.5b settlement: $3.3 billion for faulty foreclosures, $5.2b assistance for modifications etc. - $2,000 to $8,500 instead of $15,000 and rescinded foreclosure $125,000 plus accrued equity.

Delay in foreclosure is due to banks gaming. - Bank starts foreclosure but keeps the property in limbo-land.

BoA ser 3A - "Independent" consultant Promontary delegating to BoA, records often incomplete and unreliable.

BoA ser 4A - BoA borrower serious harm 10% - 80% (different tests). - Suppressing findings of harm. - Reviewers pressured to change opinions. - Reviewers' "harm notes" uploaded into CaseTracker, then to BoA "Quality Assurance" department. - Person got modification, then got a HAMP trial mod, protested he did not want HAMP, he already had a mod, both mods were revoked. - $20,000 payment just disappeared - diggers dismissed - impermissible charges and zombie titles excluded from reviews - borrower told he'd get permanent mod if he pays trial mod for 6 months, paid more, foreclosed, investigation stopped. - Data wiped out by bank, found in court filings, Promontory told but did not react. - Missing documents suddenly appears.

BoA ser 1 - Excuses for abolishing reviews: 1) Expensive 2) few borrowers hurt - Personal strings Promontory / OCC - Reviewer (serious) harm % estimates: (90) 30_40, (multiple) 30, (>10) 67, (30_40) 95, (80) 100 - Five months before MF Global Bank's failure, Promontory found $14m out of compliance; Bank later admitted $250b (difference >10,000 times)

BoA ser 3B - Data not reliable - Notes in shorthand difficult to decipher - Possible to add notes, deliberately or by mistake

Greenspan: "I don't think there is any need for a law against fraud" - Akerlof, Romer: Why abuse the system to pursue a gamble that might pay off when you can exploit a sure thing with little risk of prosecution? - Mankiw: "it would be irrational for savings and loans [CEOs] not to loot" - FCIC: the government permitted financial firms to pick their preferred regulators. - A MUST READ

JPMorgan ordered to correct errors, no fine for not complying.

One reviewer found bogus fees in every file, one found 30-40% of files contained mistakes violating state statues. - Bank put payment in wrong account, borrower defaulted for late payment. - Pittance payment if any.

Many examples of banks harming borrowers and suppressing evidence in reviews.

OCC more forgiving than Doj and HUD. - Review forms set up so no harm could be found.

BoA systematic abuse, Promontory letting most work to BoA, suppress evidence of damage, conflicts of interest. - Paying up to December, then told she was foreclosed in September; there was no harm. More bad cases.

BoA ser 5A - Promontory background

BoA ser 5B - Promontory had no meaningful knowledge of mortgage securitization or servicing.

Government multi-billion subsidies making banks profitable. "The only time we had a long period of stability in the banking system in the US was when banks were strictly regulated".

Yglesias: "if saving the banks was the right thing to do, then curtailing prosecutions was the only way to execute the strategy". Why? No reason given.

$3.3b on 500,000 is $6,600 a person. Not nothing, but an insult if you lost your home.

Only 4.2% harmed by banks when home sized? - Investigator told to "quit digging so deep" - Complaint discarded if not dated - Compound questions with answer "no" to second part when first part should have been be answered "yes" - Consultant fees for a bit over a year's work $2b across 14 banks

you CAN sue. But not the big shots.

Bank of America, rather than Promontory, was performing substantial parts of the review

Too often the Feds have proven to be great draftsmen but lousy prosecutors.

BoA didn't fully buy back troubled mortgages after lowering the payments and principal, violation of agreements with investors. - banks get fees on foreclose, mods lot of hassle but no extra money from investors.

OCC cooked the books in claim only 4.2% of the files examined showed harm - Banks lied to Congress, grossly understated amount of service members abused. - Error rate claimed by JPMorgan 0.6%, small sample examined by the HUD inspector general found a 97.2%.

36 affidavits for foreclosures reviewed to determine whether the amounts of borrowers' indebtedness were supported. Chase was unable to provide documentation for all except four. When further reviewed, three of four were inaccurate.

Mismarketing was instigated by management in the CIO and known and sanctioned at the top levels of the bank. - On July 13, 2012, the bank restated its first quarter earnings.

Failing to prosecute criminal fraud has been destabilizing the economy

Description of Mortgage Doctoring Operations. - Two different notes presented to court as originals.

It's all in the header

Zombie titles really hurt borrowers - A MUST READ.

Bank shifts risks to others

The regulators screwed up royally.

Robo-signing is sloppiness, nothing really wrong. - Bad practices are bank policies, that is they are deliberate and hence fraudulent. - Documents relating to widespread legal violations are "trade secrets" - If fraud is trade secrets, then it must be known (no "I didn't know")

Only whistleblowers, the press, short-sellers reported fraud, not regulators, law enforcement, auditors. - management prepares financial statement, not accountants, not the auditors. Auditors simply review. "we rely on the statements of management" - Belief in Efficient Market and no fraud. - S&P top 500: 55% CFOs asked by superior to falsify financial statements and did not agreed, 12% asked and agreed, 33% not asked. - Fraud is intent to decieve, making bad decisions is not a crime (that's why we need regulation. Nick Leeson, Jerome Kerviel) - Enron's Jeff Skilling never saw any emails, senior executives cut out intentionally - Justice Department in the past month put into their calculus the systemic effect of prosecuting. - Revolving doors big problem. - after Bear Stearns collapse, banks asked for and got liberalized accounting rules and short-selling bans. - People don't want to invest because they don't trust the market - Volcker Rule common sense, taxpayers shouldn't take trading activities risk. - Free marked had wiped out banks. - Duty to commit fraud if not punished. - A MUST READ.

Closing reviews without knowing harm.

Rust sold to Citigroup subsidiary, conflict of interest. - Sending bad checks, refusing to update addresses - Unclear what happens with money if recipient does not get it, maybe returned to the banks.

Uncovered settlement checks. - Payment sent to wrong address - "The payment amount is final. There is no process to appeal the payment". - When the independent reviews were stopped, the decision was made not to find harm. A particular borrower was in a particular category, not because he was actually harmed but because of the stage of the process. - $500,000 credit for deducting $1000, big mortgages preferred.

Breach of fiduciary duty - drained liquidity - auditors were idiots, genuinely or conveniently.

Rust won't change erroneous address in spite of many attempts, several cases - Correct address changed to erroneous

Getting banks to rectify errors is pretty much impossible. - bulk of people get $500 or $800 after losing their houses? - 510,000 foreclosed or under foreclosure borrowers submitted letters to be reviewed by "independent" consultants. Promontory argued that a borrower had not been harmed when his payment checks were sent back by the bank: "the bank was sending back payments because the borrower was not making any." - houses foreclosed when purchased with cash - payments systematically misapplied - insurance force-placed when adequate insurance existed - borrower-submitted documentation constantly lost - routinely misinformed about status of modification and foreclosure proceedings - Wells Fargo systematically overcharges borrowers in bankruptcy, pays punitive damages rather than fix accounting. - A MUST READ

Promontory hiring OCC chief

Not on bank fraud but still interesting

more on Jones v. Wells.

Republicans kill good parts and kill bad parts of bill. - Description of the S&L scandal.

"We did not verify a single one"

subprime borrowers better treated in political leader's districts

The Libor scandal. The victim's fault they believed the banks were competing.

So far, JPMorgan paid $8.5b fines, more to come. - Dimon certified that all was well with internal controls - Warren Buffett recommending Dimon for Treasury chairman.

Rust sent rubber checks - Rust sent too small checks to some borrowers. - Rust won't update address.

banks don't want to pay for counterpart's lawyers when losing. - Dual tracking still going strong. - "It is difficult to get a man to understand something when his salary depends on his not understanding it."

refusal to update addresses and other abuses

mortgage banks only have system for trivial mortgage handling - $26.1b settlement, little compared to total housing market. $5.8b cash, rest loan mods, junk credit, things they would do anyhow. Also investor loan mods; it's not even their money they use to pay. - high error rates permitted, typically 5% - Breach (foreclosure warning) letter not sent or incomplete - "blitzes" to throw borrower documents out - BoA systematically lied to home-owners - easier to do three mod declines than one approval. - A MUST READ.

It's just business - Greenspan supporting S&L fraudsters - Trying to indict regulators instead of fraudsters - Respected professional economists called upon to support fraudulent activities - Greenspan crushes effort to regulate CDSs - Greenspan: "I don't think there is any need for a law against fraud", "Why does it matter if the banks are allowed to fudge their numbers a little bit?" - Schwarzenegger met secretly with Enron's leadership. - In July 2008, liar's loans were forbidden, quoting evidence from 2006; evidence that had been available since 2001 had Greenspan asked. - A MUST READ.

Jefferson County Breakdown.

what goes out must be in?

municipalities tricked by advisers with opaque schemes. - Singapore combines a tough legal code with high pay for regulators, and gets less corruption and better regulation in return.

Reviews closed for lack of independence and for high costs. - Promontory fees for three clients $927m

When requested to follow the law, banks just refuse. - One legitimate reason it's been hard to sue financial firms for all the toxic CDOs they created was they were not registered securities but private offerings, so not subject to the high disclosure standards of public offerings. SEC making it easy to hawk risky investments, making it hard to sue if they are misled, having important information withheld.

Corruption types. Direct payments to officials and awarding public resources. Revolving door, erosion of property rights.

On Financial Transaction Tax (FTT).

Business (fraud) as usual, no SEC action.

SEC won against ex-Goldman Fabrice Tourre - Hiring hookers - Bust foot soldiers and press them to turn state's evidence - SEC/DoJ tried to sue and failed, don't want to do it again - Some institutions (e.g. governmental) forbidden to do business with indicted firms. - Folks stupid and get what they deserve. - DoJ unwilling to prosecute.

Not as many charged as reported.

Is it for real? A case against BoA! BoA charged with fraud for failing to perform any due diligence on the loans, misleading statistics, employees tried to get diligence performed but two unnamed execs overruled them.

Got 90% foreclosure action, rises posting charges 500%. - Suit gives $95m fine in two states. - Signed by 8 different Linda Green - The last thing the mortgage-industrial complex wanted to admit was that it had sold investors non-mortgage-backed securities. - Many documents forged. - Florida Supreme Court finds no wrong.

Not only the customers are conned, colleges and even firms are victims.

Lehman used Repo 105 to hide debt, had to go to London to get approval. Cannelos of SEC touted as hero by New York Times for refusing to hold Lehman's looters accountable, Lehman touted as victim. Not a single elite banker who became immensely wealthy by leading a control fraud has even had to personally pay a non-trivial portion of his fraud proceeds to the SEC.

Demoted for seeing, promoted for not seeing - Failed Continental Illinois Bank shareholders zeroed out, senior management sacked, the bank operated with FDIC employees and outside consultants, lobbyists and publicists immediately fired

States raiding pension kitty, putting money in expensive, non-performing hedge funds with secrecy clauses; ridiculously out-performed by S&P 500 index fund.

Bank arrogance

BoA found liable of having "sold defective mortgages" (civil case). - One of BoA's former officers, Rebecca Mairone, "accountable" for the frauds. - "They" are not defrauding "themselves". - DOJ has allowed the normal statute of limitations to expire without prosecuting a single elite Wall Street officer.

Many economists still do not understand that a combination of circumstances made it very easy to loot a bank with little risk of prosecution - lenders were pressuring appraisers to place artificially high prices on properties.

JPMorgan wants FDIC to pay WaMu (bought from FDIC) debts - JPM paying with other people's money, credits for routine actions and waiving deficiencies - settlement global, meaning including things not mentioned? - Many other settlements, including banks to F&F

dual tracking is not dual tracking if foreclosure is not finished (zombie titles) - 5% acceptable errors.

> 80 percent advisers non-fiduciary - for median income, 2 person household almost 2/3 of retirement fees goes to financial advisers - channeled into underperforming funds - financial adviser self-interest important for under-performance

With new rules for banks dealing in physical commodities, things changed. Goldman increased delivery time for aluminum from 6 weeks to 16 months. Instead of moving to customers, metal is moved between speculators (should it not be enough to move it electronically?). Price rises and Goldman can act like they have cornered the market.

Bank prefers big loss foreclosure to small loss modification. - Houseowner bought for $160,000, bank wouldn't modify to $100,000, bank sold for $40,000, houseowner bought comparable for $50,000.

Converting high tax income to low lax income

BoA (Countrywide) guilty of $131m fraud, probably small fine.

Paying 1/20 of damage caused is too much. - Looting, paying themselves so much they bankrupt the business - World cost for crisis between $60t and $200t. One crisis every 20 years would mean at least $1.5t per year.

"Efficient Financial Markets" is bunk. "Optimal Pricing Theory" is bunk.

NYFed bows to Goldman - Examiner fired for not changing recommendations and not destroying documents concerning conflict of interest.

No or negative correlation between CEO pay and result - Strong correlation with how many people they fire - all CEOs should be over median.

Shareholders come last, not first; implicitly don't bankrupt is first. Board pressured to overvalue stock.

Not a case of banks defrauding themselves, a case of bank CEOs defrauding the banks where they were working.

Remarkable consistency across banks with respect to the poor quality of the underwriting on the securities passed to Fannie and Freddie.

New scheme: WS buying small rental houses

JPMorgan backing repos, big risk if buyer can't buy back. JPM not as much into direct subprime as some others; maybe did not need direct bailout, got a lot indirectly through subsidized buy of Bear Stearns. - London Whale, JPM trusted traders for financial reports. JPM: it was criminal rough traders that mismarked the books. Management responsible for controls, in May 2012 Dimon certified that all was well with internal controls (regulation). JPM admits gross inadequacy of oversight. - Many more abuses: business with drug cartels, sanction violations, involved in Vatican Bank scandal, Libor scandal, many more. - "I'm the CEO and I know nothing" defense?

If the SEC prosecutes a bank, it often reaches a settlement; often the settlement is $0.

Not hard to pin fraud on top executives. - "willful blindness" well-established basis to infer intent. - No institution would perish if an executive were prosecuted. - Indicting a company instead of individuals is punishing innocent employees and shareholders instead of those guilty.

With secret TPP, ridiculously easy for corporations to sue government.

HFT trader orders bypassing earlier

Violations of securities laws, lots of evidence

About medical greed

JPMorgan pay $20b for various transgressions, e.g. Madoff knowledge; took money from Madoff funds just before arrest. - Paying with money they would have to pay anyhow. Investor money used to pay. Want FDIC to pay for WaMu losses. - Restitution settlements tax deductible, not penalties or fines. - OCC settlement: modify $500,000 loan by $15,000, deduct $500,000 from settlement.

Many houses not yet foreclosed are falling apart

Trusting that banks will work for all is like trusting the king and nobility will work for all. - Dominant CEOs select sycophants to his board, help each other to raise compensation. - Claim they are victims of the government. - Exorbitant compensation "punishing" Dimon? - Dimon deserves huge compensation because JPMorgan's fraud was profitable. - "plausible deniability"

Theory of deregulation: In the 1970s, politicians got tired of fighting for this or that group and turned decisions to the market; they said "blame the market". - In 1980, NYSE skips unlimited liability - Financing profits important to manufacturing firms like Ford and GM.

Greg Mankiw: Rich people needed to create jobs. Greater risk requires greater reward. - Plot income 1913-2013 for high and low incomes. - Investment in bad housing - Negative correlation between CEO pay and result - Paying more for a house makes it a better house?

Wall Street CEOs badly treated!? - Financial industries contribute negative value to society.

Sales reported 2 to 8 months too late, charging fees during that time - Increasing cash flow by modifying second liens ahead of first mortgages, increasing the cash flow to the second liens - Banks tell investors they have sold property 2 to 8 months after sale, permitting banks to collect fees they have no right to.

One million home-owners promised relief, real number less than 100,000

Rich convinced they deserve their wealth. Ingenuity, 'human capital', risks (own or parents), work ethic, acumen, application, even good luck. Undeserved riches cannot survive because of pressures of competition.

Banks help rich people to avoid tax

Corporate CEOs demand tip off when whistleblowers report their crimes

Feudalism: nobility far more rights than peasants - binding arbitration - "protect the company from all accountability"

Medical "innovations" give marginal effects while price is going skywards.

All private equity LP investors must achieve above-average results? Pension funds collectively cannot do better than average. After paying active management fees, actively managed public equity portfolios typically perform worse than market average.

Goldman sacrifices one middle/low executive to get away with major infringements

Costs rising for individual medical practices, getting absorbed into larger groups owned by hospital systems? - Doctors pressured to use prescribed treatments. - Hospital care often more expensive than private. - Comment: FDA forbids much import of proven drugs, Canadian drugs priced 20 percent of American

no banker is "too big to jail." go for individuals, not banks - Valid fraud prosecutions do not cause a business to fail, fraud causes them to fail. - use receivership. - From 2000 appraisal organizations charged that lenders were pressuring appraisers to place artificially high prices on properties 'blacklisting honest appraisers'. - Banks have a duty to make criminal referrals when they find "suspicious activities" indicative of likely fraud. JPMorgan did not report Madoff. DOJ reportedly refused to enforce subpoena to get information

Barofsky on Geithner

Hundreds OCC and fed examiners in the huge banks. - Much of crisis caused by claim examiners could rely on "private sector experts." - evasions of the Prompt Corrective Action law have greatly increased losses. - Current crisis 10 million jobs, $21 trillion loss.

More than 50 percent of private equity firms audited have engaged in serious infractions of securities laws.

Whistleblower wins case, appeal court dismisses all evidence, whistleblower has to pay

Out of thin air?

Several reasons why people don't work.

Before crisis, 40-60% of mortgages were securitized, now next to none. - Dual tracking forbidden but continues. - Abuse example: Borrower paid in time, bank claims he is $4900 back. Check of payment story shows bank misapplying payments and interest. Bank tried to foreclose but was denied for not being able to prove claims. Bank still charges extra $25,000 in penalty rates, force-places $250,000 insurance.

Sallie Mae illegally blocked payments from accruing to loans with the highest interest rates, prevented borrowers from learning about cheaper repayment options, overcharged active-duty members of the military, violated discriminatory lending practices, pushed debtors into plans that increase their overall burden.

Former CalPers CEO Frank Buenrostro cuts plea bargin. Former board member takes $48 million from private-equity firm for help securing investments from state pensions.

Forced arbitration unfair

CDOs "innovation" to hide RBMS value - In 1950, financial services accounted for 2.8% of GDP, in 2006 the figure was 8.3%.

$250 billion of verboten transactions, $340 million in fines (a stunning number for a state regulator then), insisting that the bank force out officers directly involved in money laundering, including its chief operating officer - Standard Chartered still has a serious attitude problem. Banks are not "policing anti-money laundering."

Supposedly tough settlements continue to be screaming bargains. - Taxpayers still on hook for megabank blowups.

Early 1980s, asset management industry was found to give negative value. "Never have so many been paid so much for doing so little". - Seven pension funds in Canada doing private equity directly, skipping expensive middlemen, beating industry averages after fees.

Bank-friendly judge lost election

Many billions fraudulent loans from Countrywide (bought by BoA) sold fraudulently to Fannie and Freddie. - BoA/Countrywide executive Rebecca Mairone fined for fraud.

Teaching ethics not very efficient. - Fined a mere $125,000 for keeping $40 billion of CDOs off the balance sheet. - Comment: never attribute to malice that which can be explained by incompetence.

Clawback clauses not working.

Iceland: Bankers convicted, unemployment down. Not necessarily connected but suggestive. - Iceland shows that busting the top bankers will not undermine confidence in the system. Iceland let banks go bankrupt. Still, there is a lot to do before all is clear.

For-profit colleges master predators. In 30 years, price for year of college has increased more than 1,200%. Loan debt quadrupling between 2003 and 2013. For-profit graduates fare little better than job seekers with high school degrees; their diplomas offer essentially same grim job prospects as if they had never gone to college, plus a lifetime debt sentence. Boom began in the 1990s, followed quickly by deregulation of the sector. For-profit schools enrol around 10% of America's college students, take more than a quarter of all federal financial aid, about $33b a year. By some estimates less than half that amount could fund free higher education at all currently existing two- and four-year public colleges. Three young women enrolled in a nursing program on the promise of $25-$35 an hour jobs on graduation. Course work was visits to the Museum of Scientology and visits to a daycare centre. They each paid nearly $30,000 for a 12-month program, only to find themselves unemployable because they had been taught nearly nothing about their chosen field. In 2010, an investigation tested 15 for-profit colleges and found that every one of them "made deceptive or otherwise questionable statements" to undercover applicants.

Top 10% strongly up, bottom 90% strongly down since 1949

Taking funds they weren't entitled to amounts to theft. Over half private equity firms examined by SEC implicated, including top players. - Private equity general partners paid themselves for services never rendered. Only small dollar enforcement action against private equity firm no one heard of. - Some voluntary payback without disclosing why, no meaningful admissions.

Difficult to prove intent, DoJ says banks too smart.

Strongest support for the banks is in poor southern states. - Rich people think they deserve their income. - Market based health care system less efficient than Obama-care. - GOP governor support to charterschools with no accountability, giving no better results.

In 1970s, top 1% families earned less than 10% of total, more than 20% in 2012. - top 0.1% families wealth share 7% in 1978 (bottom value), 22% in 2013. Bottom 90% families wealth share 37% in 1987 (top value), 22% in 2012.

Buying back shares increase price and executive bonus. Repurchase better than investment because investment can give future profit but temporary loss and temporary lower bonus. Central Bank Quantitative Easing, support to commercial banks.

Fiduciaries giving up on fiduciary duty, pension funds in danger.

Jamie Dimon wants to bypass bribe rules.

Banks not lending for industrial investment. Living on the corpse of the economy that was left in 2008. 91 percent of S&P 500 earnings spent on stock buybacks and dividends. "Okay, I'm paid according to how much I can increase the price of the stock. I'm not going to use my corporate earnings to build more plant. Instead, I'm going to use it to push up the stock so I'm going to get more out of my stock option."

IRS losing $450b a year in revenue to tax evasion, Congress mandated a whistleblower office to pay whistleblowers 15%-30% of amounts recovered. Top IRS opposed.

US waste corporation asked to clean up before expanding, awarded $16 million. - Oil company breaks law, forfeits investments, is awarded $2.3 billion compensation.

Lots of indictments of top executives were(/are?) possible; they don't even try. Afraid that if the banks are not permitted to ruin the economy, they will ruin the economy?

Banks so dependent on criminal and near-criminal conduct, regulators dare not deprive them of that out of fear of weakening their financial performance.

"Cheap" financing expensive

Private equity firms assert limited partnership agreements, contracts with investors, should be treated entirety as trade secrets, therefore not subject to disclosure.

Supreme Court declares gifts OK if not quid pro quo. - In 1810, SC says sanctity of contract more important than bribery. - Today lobbying is free speech.

Private equity charging undisclosed fees, getting away with embezzlement

In Canada, own handling of private equity pays better than leaving it to firms. In US, people are too conservative.

JPMorgan sells toxic securities, whistle-blower ignored - Appraisal fraud endemic

How the banks work to defraud their victims and how the government takes the side of the banks against the whistle-blowers.

Some rich people do suffer. Some more, some less.

Much Apple technology, GPS, touch-screen, from government (taxpayer) founded research. -

Corinthian Colleges presenting false job placement data to prospective students, altering student grades and attendance records, questionable recruitment and student loan advisory practices. - Administration helps Corinthian at expense of students.

Supreme Court decision in 1994 makes it almost impossible for individuals to sue fraud advisers like accountants and lawyers. Attorneys general, regulators and state bar associations can intervene but very seldom do. - Man signed 8,000 - 10,000 documents a month for foreclosure prosecutions, admits not knowing what he signed, notary signed without demanding oath. When investigated, responsible lawyer got a warning, ethics partner got a complete dismissal; supervising lawyer sanctioned but exonerated

more "I'm the CEO and I know nothing"

stopping future bonuses not break of contract, reclaiming undue bonus payment not break of contract

The bigger the economical sector, the less the producing sector

Bush jr administrators destroyed criminal referral process, Obama administrators refused to restore effective criminal referral process; the sole means for FBI and DOJ to succeed in prosecuting the elite fraud is through whistleblowers. - In June 1990 President Bush sr stated, 'We will not rest until the cheats and the chiselers and the charlatans [responsible for the S&L disaster] spend a large chunk of their lives behind the bars of a federal prison.' - 1,000 FBI agents assigned to the S&L investigations. Vastly larger and more destructive recent crisis got roughly 250 FBI agents.

Whistleblower telling about Citi's massive fraudulent sales of fraudulently originated mortgages, primarily to Fannie and Freddie. Treasury lost billions of dollars and Citi's senior officers were made wealthy by the "sure thing" of the accounting control fraud "recipe." In spite of criminal case, DoJ refuses to prosecute. - Loan brokers have an incentive to match bad credits with gullible lenders and to walk away with the initial fees. It can take years before detection because even a bad creditor can set aside some initial proceeds to make coupon payments. - Jamie Dimon: "In mortgage underwriting, somehow we just missed, you know, that home prices don't go up forever and that it's not sufficient to have stated income" (2011) "Low-quality revenue is easy to produce, particularly in financial services. Poorly underwritten loans represent income today and losses tomorrow." (2012) - A MUST READ

SEC compliance chief Andrew Bowden does not believe in holding frauds and abusers accountable through criminal prosecutions and enforcement actions. "I'm helping people, I'm doing OK myself."

Investing in future growth often reduces profits short term. Bolder initiatives like developing new products can have considerable costs. Companies increasingly prefer exorbitant bonuses, special dividends to shareholders, financial speculation. No exploit of profitable opportunities to expand his activities. - No legal obligation to maximize shareholder value.

Banks threatens to withhold donations to Democratic party. Just a warning, only $15,000 per bank.

Bowden: SEC uncovering widespread lawbreaking in its first examinations of private equity firms. Changes his mind. - "nothing that terrible can be happening if the results look so good" - industry's "adding value" and "helping people" - problems with private equity, extracts from creditors, taxpayers, pension funds and employees. Considerable academic evidence private equity does not deliver returns to cover for risks.

Secret negotiations. Loss of sovereignty. Paying for future lost profits. Foreign maker of toxic gasoline additive could sue if the additive is banned in the US. - 50 ISDS cases against the US, all won by the US. - Vitiating enforcement is vitiating regulation.

HSBC launders terrorist money, gets pathetic deal. Won't fulfil deal, frauds galore. Commended for continuing "to act in good faith to meet the requirements of the D.P.A.".

HSBC gets sweet deal, refuses to comply. - DoJ fails holding HSBC employees accountable for drug money washing and bypassing anti-terror regulation bypassing. - No prosecution because HSBC TBTF. - No prosecution guarantees massive crimes. - DoJ proud that HSBC clawed back small sums from small fry, senior management keeps theirs.

Easy to make money in education

Bill Black on TPP and on Mankiw: "it would be irrational for savings and loans [CEOs] not to loot"

Private equity firms impose "money for nothing" and secrecy clauses.

Silicon Valley going from innovation to graft

taking of impermissible charges - public pension funds not been reporting fees accurately are out of compliance with government reporting requirements - claimes management fee is reduced when it is shifted to other source - too high fees? solution: pay more fees

Canada province to develop own public auto insurance program to counter skyrocketing auto insurance premiums. Insurers threaten with foreign investor

New bubble? How was it before?

Gresham dynamics spreading crime. Lies in liar's loans mostly put there by by the lenders.

Schools profiting on predatory student loans. - High administrative costs without contributing to teaching. - Suggesting schools also take some risk. - Requesting schools to use minimum to teaching, not to exploding numbers of administrators or elaborate college marketing departments.

Top CEO compensation grows far faster than other top 0.1% compensation, pulls compensation for supporting executives. - Compensation raising with market, not with performance. - All want a compensation above average, those below get extra to get above.

Until mid 1980s, bank trainees learned to lend to business; then changed to securitization. Prefer building to innovations. - Bank take little risk by selling unsafe assets.

TiSA worse than TPP and TTIP

Pension Funds, Universities and Endowments Pay for Private Equity Private Jets

Touting fee concessions extracted by CalPERS. In reality, small concessions on a product still grossly overpriced and riddled with hidden fees. Nonetheless, by granting small concessions, many public pension officials turned into industry advocates. - Those working for a "sophisticated investor" do not have the same interest. After all, it is not their money.

Fiduciary duty would hurt blacks because the banks can't screw them any longer.

Letting the taxpayers pay monstrously for schooling locals.

Foreclosure fraud alive and well

Index funds outperform high fee funds by 1.62% per year. - most public pension funds complying with government accounting standards, not reporting at least half of total costs.

Lot of industrial production supported by government

To get better statistics, charter schools eject underperforming pupils.

Major financial firms fighting tooth an nail over every point in stories on banks, even inconsequential ones, with the Justice Department appointing itself their guardian. Protecting the only true belief, the belief that the banks are innocent victims of scheming borrowers like hairdressers and small-time property developers.

The parable of the doctor and the patient who died. - Pressure from investors: "You're the expert in this area, find a way to make money in it - everyone else is."

From January 2001 through September 2015, Pfizer buybacks and dividends were $182.6 billion or 117 % of net income. Income tax was < 20 % of gross income.

In Canada, lower corporate tax leads to slower growth. Hoarding instead of investing. Could lead to more private investing? Investing in production or speculation?

Many large private equity firms regularly require banks to use a specific law firm. - "They agreed to be marks"

Big lender ordered staff never to verify borrower's income on liar's loans

A study comparing companies, with complex and aspirational goal versus ones "maximize shareholder value", found in every case that the company with richer and loftier objectives performed better than its counterpart. - For 15 years, well over 80% of FDA "new drug applications" are for extensions or minor reformulations of existing drugs.

"free house" unjust? Consistent with longstanding principles, provides a necessary market-correcting incentive to promote greater responsibility, alleviates tremendous costs of successive foreclosure proceedings. Judge should issue verdict "with prejudice", with no chance to reopen. Easy to satisfy demands for evidence.

More on looting.

Corporations pay tax abroad, keep profits in US. - $2 trillions in cash, most kept in banks.

Purchasing helicopter gears worth $500 each for $8,000 each.

On wealth dispersion

Buying patents cheaper than own R&D especially drug patents very profitable. - (Manufacturing profit rates falling since 70's?) - Martin Shrekli raised price for patentless antiparasitic drug Daraprim from below $15 to $750 per tablet.

Duty to invest in tobacco? Fiduciary conflict.

Arbitrators incentived to side with big institutions. - Clause prohibits class action. - Consumer Financial Protection Bureau to bar mandatory arbitration clauses?

People save instead of invest. If the superrich don't invest, what's their raison d'etre?

TTIP lets finance override law (TiSA, TPP?).

Against the law but SEC and IRS don't care. An equity firm buying a company often includes terms about the company paying the equity firm a fee for undisclosed services; this means that for years the equity firm can get money for nothing. -

$634.5 million fine on $31 billion revenue drug. - Drug marginally modified when patent was about to expire. - Recommends more of the drug when effect insufficient. Result addiction and deaths.

Biggest families leaving big equity firms, doing better on their own.

Impossible to audit the Department of Defence

Mortgage Document Fabrication is Alive and Well...

Brittish megabank HSBC was protected by Attorney General Eric Holder (and by Bill Clinton?). Had to pay pittance for laundering drug money. - Suing banks won't bring down economy.

US 4.6% of world population, 80% of world's opioids. Opioid deaths increased 1500 % since 2000. - Purdue Pharma targeting doctors generous with prescriptions. Thanks to OxyContin, from the start in 1996 to 2010 Purdue had increased its share of opioid sales to 30 percent of the total.

Monsanto trying to hide gene modification data

Commersial real estate loans far more dangerous than subprime auto loans, risk for bubble. - With associated obligations, losses can be bigger than 100 percent.

Most arbitration clauses disallow class arbitration. - CFPF wants change, business opposes.

Calpers misleading about return - 0.6% instead of targeted 7.5%

Strong, direct link between what the major political parties spend and the percentage of votes they win.

Patients pressured, even forced to take expensive medical care - USA much more expensive than other rich countries, with shorter life expectancy

TPP and TTIP protect patents, especially drugs, let corporations decide litigation cases.

TPP protective, not freeing. Doctors protected, not workers.

Many reasons why ordinary citizens can't use the courts.

In spite of protestations, SEC still doing next to nothing

Politicians almost 60% more willing to support TARP if they profit personally.

US health care highest cost, worst performance of 11 industrial countries. Doctors rewarded for overtreatment. Last 15 years, +85% of drug applications minor modifications of old drugs. More for marketing than for R&D. Lots of bureaucracy, doctors have to fight insurance companies to get paid. Obamacare barred from drug reimportation from Canada.

DT complains over government riches going to the rich, appoints richest cabinet ever. Complains over Clinton-Goldman ties, appoints six Goldman men.

medical coding abuse. medical bills 80 % error rate?

corporate saving glut - rise of corporate saving significantly predates Global Crisis

Interrelated real estate company leases property back to the charter school at a greatly inflated rate

School costs risig steeply

opportunity to make profits from charter-school real estate transactions. - "Many charter schools spend around 14% of their public funding on building rent. By contrast, charter schools run by Imagine Schools spend up to an excessive 40% of their public funding on rent"

It's all in the headline

Selection, not from Naked Capitalism

Examples of interesting sites and posts, not necessarily on the banking crisis.

Cuba does have problems.

Question / Answer site

the US has the most bureaucratic health care system in the world

statistics on how people are employed. Branch, sex, ethnicity.

Question / Answer site

Hillary Threatens Banksters: "Blankfein and Dimon must go." CBS News Colombia. Good joke. Who's behind?

Mankiw: Consider an owner of a savings and loan who is taking excessive risks, hoping that they pay off and make him rich. It is only prudent for him to loot as much as he can, because he knows that his gambles might not pay off.

Could the US Learn something from Cuba? Not to take over without changes but maybe some less regulation, with less need for medicals to cover their asses.

Statistics on productivity and earnings

Federal government paying $10-billion-and-counting to caregivers for adopting electronic medical records. Many risks and mistakes.

liberal economics

Casino Jack and the United States of money. Making money on Indian reservations and the Northern Mariana Islands

Revolving door: Federal decisions on Monsanto made by Former Monsanto employees

Six former employees of Bank of America's loan-modification department testified in court that since 2009, they had been instructed to lie to struggling home owners, hide their financial documents, and push them into foreclosure. Class action case dismissed.

when it comes to life expectancy - an excellent proxy for the standard of living in general and health of the populace in particular - dictatorships can't hold a candle to democracies. Neither can the US?

SEC and others, examples of ignoring whistle-blowers

Canada 70% public, 30% private with extra services. - In 2013, US bypass operation was $75,345 with Australia second most expensive in selection at $42,130.

Problem with infrastructure

How real is this?

Poor nutrition causes nearly half (45%) of deaths in children under five - 3.1 million children each year.

Al Capone made donations to various charities and was viewed by many to be a modern-day Robin Hood.

Scandal with lobbyists and high politicians

Tobacco companies increasing cancer risk for profit

The SEC has a three-part mission: to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC does not have criminal authority, but may refer matters to state and federal prosecutors.

US Army-funded researchers at MIT believe an optical equivalent of a "sonic boom" created using graphene could make chips a million times faster than they are today.

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