Tag: banks

Greece will be fine. A little bureaucratic red tape is no hindrance to business. The Greek economy is merely a little light on liquidity, otherwise it would be growing like gangbusters.

As e-commerce continues to gain ground apace abroad, and even Greeks seem to be warming to the idea of Internet shopping, opening an online store based in Greece is no job for the fainthearted. “An online store is more complicated than a regular store basically because of the way payments are carried out,” explained Fotis Antonopoulos, one of the co-founders of www.oliveshop.com, which sells olive oil-based products such as cosmetics, mostly to foreign markets.

Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.

Once they climbed the crazy mountain of Greek bureaucracy and reached the summit, they faced the quagmire of the bank, where the issue of how to confirm the credit card details of customers ended in the bank demanding that the entire website be in Greek only, including the names of the products.

I wish everyone who still believes that government can provide the solution to anything, including the very small number of tasks that the U.S. government is Constitutionally responsible for carrying out, was forced to open an online store in Greece before being permitted to vote.

By the time the Germans have finished looting Greece, it will probably be necessary for Greeks to have their stool samples manually extracted by American TSA agents contracted out to the IMF before they are provided with their licenses to collect a daily subsistence ration.

Another pass at a banking whitewash:

A multistate settlement with five large U.S. banks over foreclosure practices would include as much as $17 billion in mortgage debt forgiveness and loan modifications and take three years to complete, according to a letter describing the deal. The draft letter to stakeholders from state attorneys general outlines an agreement among large mortgage servicers, states and the Department of Justice, which are continuing talks to finalize the proposal.

Servicers, including Bank of America Corp., JPMorgan Chase & Co. (JPM), and Wells Fargo & Co., would also have to provide as much as $3 billion in refinancings, enabling borrowers to secure new loans “at today’s historically low rates,” according to the letter. Another $1.5 billion would be distributed to about 750,000 borrowers who have lost their homes to foreclosure, according to the letter.

States that sign on to the agreement would get “immediate payments” to fund consumer protection and foreclosure prevention efforts.

All 50 states announced almost 16 months ago they were investigating bank foreclosure practices following disclosures that faulty documents were being used to seize homes. Officials from a group of state attorneys general offices and federal agencies, including the Justice Department, have since negotiated terms of a proposed settlement with the nation’s largest mortgage servicers.
‘Robo-signing’

The agreement holds banks accountable for “wrongdoing on robo-signing and mortgage servicing.” It allows state and federal prosecutors to continue to pursue securities cases and other claims. Individuals would not be barred from filing their own lawsuits, and the settlement includes “absolutely no criminal immunity for any individual who violated the law.”

In other words, a slap on the wrist, a few new loans, and the attorneys general will magically make all the title fraud go away. This costs the banks nothing, as most of the “mortgage debt forgiveness” consists of bad loans the banks were going to have to write off anyhow. The net result is rather like telling a bank robber that he has to repay a few dollars each time he holds up a bank… except the behavior of the banks is far more criminal than that of the average bank robber.

The real point of the loan modifications and the new loans is to generate new paperwork and ensure that the banks have proper title to the properties to replace the titles they destroyed in utilizing the MERS system to avoid local taxes. If you figure an average county transfer fee of around $750, that means the local taxes successfully evaded by the banks were around $562,500,000 for the foreclosed properties alone.

One State attorney general has fired a legal broadside:

Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation’s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process. The lawsuit asserts that employees and agents of Bank of America, J.P. Morgan Chase, and Wells Fargo, acting as “MERS certifying officers,” have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have. The lawsuit names JPMorgan Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., as well as Virginia-based MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman.

Not a bad start. Now it’s time for the other 49 States to stop playing the White House’s attempt to retroactively whitewash the giant system of fraud, drop the “settlement talks”, and pin these criminal bastards to the wall for their attempt to destroy the private property system. MERS was always completely illegal and it is absolutely ridiculous that it wasn’t shut down in the beginning.

However, so long as these cases remain civil, not criminal, it’s very unlikely that any true justice will be served.

Obama is still trying to let the big banks get away with the massive quantities of criminal activity in which they engaged during the housing boom and bust:

The Associated Press reports that a proposed deal could be announced within weeks. Five banks—Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC)—would pay the federal government $25 billion. About $17 billion would be used to reduce the principal that some struggling homeowners owe, $5 billion more would be used for future federal and state programs and $3 billion would be used to help homeowners refinance at 5.25 percent. Civil immunity would be granted to the banks for any role in foreclosure fraud, and there would be no investigations.

Once more, we see that there is absolutely no law whatsoever in the USA. There is barely even the pretense of it here. And looking at it from a political perspective, one would think the Republicans could easily ride this issue of tremendous bank-related corruption and abuse of the home-owning public to victory in November except for one small problem: both Romney and Gingrich are as wholly-owned by the banks as is Obama.

If only there was a candidate who wasn’t a banker’s puppet. Surely he would be the ideal presidential nominee under these circumstances!

The pretense of Greek solvency continues:

Talks between Greece and its creditor banks to slash the country’s towering debt pile broke down on Friday, with the Greeks warning of “catastrophic” results if a deal to swap bonds is not reached soon. The sides remain divided over the interest rate Greece will end up paying, which determines how much of a hit banks take….

The stumbling block in the negotiations was the low coupon, or interest payment, offered on the new bonds, one source familiar with the matter and one banking source said.

“The main problem was the (European Union and International Monetary Fund’s) insistence on a coupon lower than 4 percent on the new bonds,” the banking source said. It could mean an accounting loss of more than 70 percent for banks on their books, far more than the actual 50 percent cut in the original value of the old bonds laid down in the original deal.

The reason for the charade is that the banks are desperately attempting to avoid the Greek default triggering all the credit default swaps they have made with each other. In order to avoid a complete meltdown, it is necessary to pretend a 50% – or 70% – loss on a failure to repay a loan is somehow not a default.

To grasp how absurd this is, keep in mind that homeowners are in default when they fail to make a single mortgage paymentfall 120 days behind on their mortgage payments, never mind when they openly admit that they can’t make interest payments without taking out a loan to do so or repay more than half the principal of the original loan.

Tyler Durden explains why the latest Eurorescue deal is not only smaller than it looks, but even more ludicrous too:

On the day of the 3 Year European LTRO, in a whim of fancy we wondered if contrary to all expectations, the European banks would not instead of using the money for any real releveraging (carry Trade) or deleveraging (switching out of expensive into cheaper debt) purposes, just park it with the ECB’s deposit facility, an outcome which would be the worst possible case as it simply recycles ECB cash from on pocket into another without any incremental velocity. As it turns out, we were only half kidding: as of yesterday, the day after the LTRO, European banks parked almost half of the free €210 billion (recall that while gross LTRO proceeds were €489 billion, only €210 billion was net), or €82 billion, with the ECB’s deposit facility…. And that is what monetary policy failure is all about.

In other words, the ECB loaned $640 billion to 532 banks, but $365 billion simply went to roll over existing debt. Of the remaining $275 billion, $110 billion was simply deposited… in the ECB. That means that the much-publicized $640 billion in “new loans” meant to stimulize the global economy was actually $165 billion.

This behavior is in sync with that predicted by the debt-deflationist position. The money for loans is available, but there simply isn’t anyone who wants to borrow the money, even at interest rates that are effectively zero. In an inflationary environment, people are inclined to borrow as much as they can.