Tag: banks

The mortgage banks are doing their best to escape liability for their large-scale mortgage fraud:

They’ve trotted out Kathryn Wylde, the President of the Partnership for New York City, to attack Eric Schneiderman for his intervention in the Bank of America settlement with investors over mortgage backed securities. Wylde is going to bat for BofA as well as the Bank of New York Mellon, the trustee for the MBS in the settlement. And she is actually arguing that Schneiderman, by defending the rights of investors and seeking the truth on out and out securitization fraud, is threatening the existence of the financial sector in New York City. No, really.

Tanks in the streets and cats living with dogs if the state governments don’t look the other way when the banks commit fraud. That’s certainly a new one. Interesting to see that they’re having to pull it out on a regular basis, isn’t it?

I guess this officially makes it a global depression:

A South Korean stock broker jumped to his death from a high-rise office amid worldwide market turmoil. The 48-year-old broker, identified only as “Seo,” sent text messages to colleagues expressing regret over severe losses, just minutes before leaping to his death Wednesday in the city of Daegu, according to Chief investigator Lee Kang-ho.

Of course, given the total lack of shame and remorse demonstrated by Wall Street in 2008 when the banks looted the American taxpayer to make up for their gambling losses, one tends to suppose they’ll probably need a little help. But we can always offer them encouragement.

Still, it’s only Greece… for now:

Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults. The boxes are so popular that the bank has doubled the rent on them in the past year – and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: “I’ve been working in a bank for 31 years, and I’ve never seen a panic like this.”

Official figures back him up. In May alone, almost €5bn (£4.4bn) was pulled out of Greek deposits, as part of what analysts describe as a “silent bank run”.

Considering the size of the Greek economy, that’s a sizable amount.  Sarah Palin’s comments about the U.S.A. turning into Greece aside, I haven’t seen many signs of imminent U.S. bank runs, but then, it’s never a bad idea to keep an amount of ready cash and coin available. Especially of Ron Paul’s bill somehow manages to pass the House.

Rep. Ron Paul on Monday introduced legislation that would lower the federal government’s debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.

And why not go ahead and cancel it? If the total amount of debt doesn’t matter because one person’s asset is another’s liability, then obviously canceling those debts can’t possibly matter any more than amassing them did. Since we are assured that the government’s growing debt to itself is not inflationary, then surely canceling that debt could not be deflationary.

This is, of course, shocking news given that the banks had promised – cross their heart – that they would stop doing what they originally claimed wasn’t happening:

Mortgage industry employees are still signing documents they haven’t read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures. County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as “robo-signing,” remain widespread in the industry.

The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks. One name, “Linda Green,” was signed almost two dozen different ways. Lenders say they are working with regulators to fix the problem but cannot explain why it has persisted….

In Guilford County, N.C., the office that records deeds says it received 456 documents with suspect signatures from Oct. 1, 2010, through June 30. The documents, mortgage assignments and certificates of satisfaction, transfer loans from one bank to another or certify a loan has been paid off.

It’s a mystery, to be sure. In other news, car thieves announced that they are working with insurance companies to fix the problem of automotive theft, but cannot explain why it has persisted.

The Allied Irish Bank has been determined to have officiallyeffectively defaulted:

The International Swaps and Derivatives Association (ISDA) yesterday said that a “credit event” had occurred on Allied debt, meaning the bank has effectively defaulted on its debt, a situation the Irish government has gone to extreme lengths to avoid. Credit default swaps (CDS) sold on Allied subordinated bonds and, crucially, its senior debt, have been activated by the decision of the ISDA determinations committee that decides whether a borrower has defaulted.

We should not be surprised that just as the rules about accounting for failed assets have been bent, the rules for being in default are also being actively danced around. But those interested in collecting on their derivative bets are not going to be inclined to permit a zombie bank to continue the charade enabled by the government regulators.

In tangentially related news, it appears that Bernanke finally blinked. There will be no QE3, at least not for the time being. There will, however be QE Lite, which is totally different because it will not be called quantitative easing and will be done on a smaller scale. For the moment.

It’s certainly a daring prediction from Jim Rogers. I very much like how he points out that the Federal Reserve is the THIRD central bank in the United States. Central banks are neither omnipotent nor eternal, they are merely financial parasites on the nation, and like any other parasite, they have a finite lifespan. One merely hopes that like the previous two, the current central bank will not outlive its host.

I particularly enjoyed this exchange:

“Bernanke seems to be out of ideas recently.”

“Mr. Bernanke’s been out of ideas since he went to Washington. What’s wrong with you? He’s just an Ivy League professor. Are you kidding? Why do people think he knows anything? For God’s sake, I went to an Ivy League school. They didn’t know anything.”

Unlike most Fed observers, I have actually read Mr. Bernanke’s Essays on the Great Depression. The primary thing I took away from it was that he places too much stock in government statistics and far too much faith in monetary policy. He’s less an economist than an econometricist.

Item: The unofficial Problem Bank List is now in excess of 1,000 institutions, 1,002 to be precise, with $417.4 billion in claimed assets. Based on the FDIC reports, I estimate that only $255 billion of those assets actually exist.

Item: One of the Dread Ilk writes of his recent experience with his bank. “I went in to my local [bank] yesterday to withdraw 5k. The fellow behind the counter looks at the number on my withdrawal slip… then whispers to the lady at the next teller station, who rolls her eyes and shakes her head, as if withdrawing that much was a horrible trial.

“I only have $1400!” I hear him say.

They both then departed for the back and came back a minute later with some bills.

“I’m sorry,” my intrepid teller says, “We can only manage $4000.”

He then has me re-write my withdrawal slip… and gives me $4000, of which just over half is hundreds. The rest was scraped together from 50s and 20s.

I said “Huh. You guys are in bank-run territory now, aren’t you?”

He looks up, “Uh… I guess.”

Action Item: If you are living in the USA, you may wish to consider keeping a bit more cash on hand than usual.

I’m not sure which is more unsettling. The fact that these bankers think they’re irresistible or the fact that they find nondescript Manhattan hotel maids to be so utterly alluring:

Another international moneyman has been busted for sexually assaulting a maid at a luxury Manhattan hotel, cops said last night. Mahmoud Abdel-Salam Omar — the 74-year-old former chairman of Egypt’s Bank of Alexandria — allegedly groped and “gyrated” against the maid in Room 1027 at The Pierre hotel on Fifth Avenue, a law-enforcement source told The Post. He was wearing a bathrobe at the time, but it was not clear what, if anything, he had on under it.

I suppose this is one way to bring the ongoing financial madness to an end. Just keep arresting bankers, one grope at a time.