dimelab dimelab: shrinking the gap between talk and action.

bought Topic in The Credit Debacle Catalog

architect bought huge amounts (1); bought Abacus 2007 AC-1 (1); bought swaps (1); Fed bought (2); Federal Reserve bought (2); issued debt bought (1); least bought (1); ostensibly bought (1); POLITICAL CONTRIBUTIONS BOUGHT WALL STREET FREEDOM (1).

Fri 2010-10-08 21:45 EDT

NO. THERE'S NO LIFE AT MERS

...MERS was founded by the mortgage industry. MERS tracks ``changes'' in the ownership of the beneficial and servicing interests of mortgage loans as they are bought and sold among MERS members or others. Simultaneously, MERS acts as the ``mortgagee'' of record in a ``nominee'' capacity (a form of agency) for the beneficial owners of these loans...More than 60 percent of all newly-originated mortgages are registered in MERS. Its mission is to register every mortgage loan in the United States on the MERS System. Since 1997, more than 65 million home mortgages have been assigned a Mortgage Identification Number (MIN) and have been registered on the MERS System...Since MERS is a privately owned data system and not public, all mortgages and assignments must be recorded in order to perfect a lien. Since they failed to record assignments when these loans often traded ownership several times before any assignment was created, the legal issue is apparent. MERS may have destroyed the public land records by breaking the chain of title to millions of homes...

Life; MER; s.

The Baseline Scenario Wed 2010-09-08 10:36 EDT

Irish Worries For The Global Economy

...Ireland's difficulties arose because of a massive property boom financed by cheap credit from Irish banks. Ireland's three main banks built up loans and investments by 2008 that were three times the size of the national economy; these big banks (relative to the economy) pushed the frontier in terms of reckless lending. The banks got the upside, and then came the global crash...Today roughly one-third of the loans on the balance sheets of major banks are nonperforming...The government responded to this with what are currently regarded as ``standard'' policies in Europe and America. It guaranteed all the liabilities of banks and began injecting government funds to keep these financial institutions afloat. It bought the most worthless assets from banks, paying them government bonds in return. Ministers have promised to recapitalize banks that need more capital. Despite or perhaps because of this therapy, financial markets are beginning to see Ireland as Europe's next Greece...Until very recently, Ireland was seen as Europe's poster child of prudent reforms...The ultimate result of Ireland's bank bailout exercise is obvious: one way or another, the government will have converted the liabilities of private banks into debts of the sovereign (that is, Irish taxpayers), yet the nation probably cannot afford these debts...The idea that Ireland, Greece or Portugal can cut spending and grow out of overvalued exchange rates with still large budget deficits, while servicing all their debts and building more debt, is proving -- not surprisingly -- wrong...

Baseline Scenario; global economy; Irish worries.

Money Game Wed 2010-09-01 10:53 EDT

Why Ben Bernanke's Next Round Of Quantitative Easing Will Be Another Huge Flop

There is perhaps, no greater misunderstanding in the investment world today than the topic of quantitative easing [QE]. After all, it sounds so fancy, strange and complex. But in reality, it is quite a simple operation...The Fed simply electronically swaps an asset with the private sector. In most cases it swaps deposits with an interest bearing asset...The theory behind QE is that the Fed can reduce interest rates via asset purchases (which supposedly creates demand for debt) while also strengthening the bank balance sheet (which entices them to lend). Unfortunately, we've lived thru this scenario before and history shows us that neither is actually true. Banks are never reserve constrained and a private sector that is deeply indebted will not likely be enticed to borrow regardless of the rate of interest...The most glaring example of failed QE is in Japan in 2001. Richard Koo refers to this event as the ``greatest monetary non-event''...Since Ben Bernanke initiated his great monetarist gaffe in 2008 there has been almost no sign of a sustainable private sector recovery. Mr. Bernanke's new form of trickle down economics has surely fixed the banking sector (or at least bought some time), but the recovery ended there. ..The hyperventilating hyperinflationists and those investors calling for inevitable US default are now clinging to this QE story as their inflation or default thesis crumbles before their very eyes...With the government merely swapping assets they are not actually ``printing'' any new money. In fact, the government is now essentially stealing interest bearing assets from the private sector and replacing them with deposits...now that the banks are flush with excess reserves this policy response would in fact be deflationary - not inflationary...

Ben Bernanke's; Huge Flop; Money game; Quantitative Easing.

zero hedge - on a long enough timeline, the survival rate for everyone drops to zero Fri 2010-07-16 14:41 EDT

Guest Post: Why Goldman Could Pull It Off

The weaknesses in the S.E.C.'s case against Goldman were always obvious. At the end of the day, an investor who bought Abacus 2007 AC-1 was buying a static portfolio of risks....If you were a sophisticated investor who had done his due diligence, you didn't need to be told that the deal was designed to fail...If you actually reviewed the performance of mortgage backed securities held by the CDO, and understood how cash flow waterfalls and delinquency triggers worked, then you could see that subordinate tranches being insured for the benefit of Goldman were already worthless when the CDO closed. You could also figure out that the rating agencies had deliberately delayed announcing downgrades of the RMBS within the CDO, in order to keep the markets and the deal flow moving...The risk to Goldman was that more of its dirty laundry would be exposed...[but] the S.E.C. shows little appetite for digging deeper, especially since its new COO of the Enforcement Division is a 30-year-old kid from Goldman.

dropped; Goldman; Guest Post; long; pull; survival rate; Timeline; zero; Zero Hedge.

Sat 2010-05-22 20:00 EDT

"Drop Dead Economics": The Financial Crisis in Greece and the European Union

Financial lobbyists are using the Greek crisis as an object lesson to warn about the need to cut back public spending on Social Security and Medicare. This is the opposite of what the Greek demonstrators are demanding: to reverse the global tax shift off property and finance onto labor, and to give labor's financial claims for retirement pensions priority over claims by the banks to get fully paid on hundreds of billions of dollars of recklessly bad loans recently reduced to junk status. The Greek bailout should be thought of as a TARP for German and other European bankers and global currency speculators. Almost $1 trillion is being provided by governments (mainly Germany, at the cost of its own domestic spending) into a kind of escrow account for the Greek government to pay foreign bondholders who bought up these securities at plunging prices over the past few weeks. They will make a killing, as will buyers of hundreds of billions of dollars of credit-default swaps on the Greek government bonds, speculators in euro-swaps and other casino-capitalist gamblers. (Parties on the losing side of these swaps now will need to be bailed out as well, and so on ad infinitum.) This windfall is to be paid by taxpayers -- ultimately those of Greece (in effect labor, because the wealthy have been untaxed) -- to reimburse Euro-governments, the IMF and even the U.S. Treasury for its commitment to predatory finance. The ³sanctity of debt -- sacrificing the economy to pay bondholders -- is to be used as an excuse to slash Greek public services, pensions and other government spending...

Drop Dead Economics; European Union; Financial Crisis; Greece.

Sat 2010-05-22 14:06 EDT

A Japanese Rx for the West: Keep Spending - Interview with Richard Koo - Barrons.com

America seems to be suffering from the same affliction that has hobbled Japan for so long -- a balance-sheet recession. And no matter how hard the Federal Reserve tries, it won't end until businesses shake their heavy loads....the private-sector companies are no longer maximizing profits; they are minimizing debt. They are minimizing debt because all the assets they bought with borrowed money collapsed in value, but the debt is still on their books, so their balance sheets are all under water. If your balance sheet is under water, you have to repair it. So everybody is in balance-sheet-repair mode...It took us [in Japan] a decade to figure out. People said, "Ah, just run the printing presses, ah, structural reform, ah, just privatize the post office, this and that, and everything will be fine." Nothing worked. This is pneumonia, not the common cold. When people are minimizing debt because of their balance-sheet problems, monetary policy is largely useless. If your balance sheet is under water, in negative equity, you are not going to borrow money at any interest rate, and no one will lend you money, either...

Barrons; com; interview; Japanese Rx; keep spending; Richard Koo; West.

zero hedge Wed 2010-05-19 11:37 EDT

Guest Post: Goldman's CDOs Had Nothing to Do With the Real Estate Bubble

If Goldman Sachs wanted to reduce its exposure to subprime mortgage investments, why didn't it simply sell the assets it owned? Two reasons: First, those large sales would have sent a signal that something was terribly, terribly wrong, and thereby pushed prices down further. That's how supply and demand normally works. Second, Goldman professed to be market maker, which uses its trading book to instill confidence. It ostensibly bought, sold and inventoried mortgage securities to provide stability and liquidity to the marketplace. Of course, we now know that such market confidence was entirely misplaced. To sidestep these issues, Goldman and other major banks found a solution that subverted the laws of supply and demand, and escaped the price discovery of a transparent marketplace. They fabricated synthetic CDOs, such as Abacus 2007 AC-1. These toxic assets, invented out of thin air, made the meltdown worse than it otherwise would have been...

Goldman's CDOs; Guest Post; real estate bubble; Zero Hedge.

Thu 2010-05-13 13:39 EDT

The People v. the Bankers

Financial lobbyists here in the U.S. are using the Greek crisis as an object lesson to warn about the need to cut back public spending on Social Security and Medicare. This is the opposite of what the Greek demonstrators are demanding: to reverse the global tax shift off property and finance onto labor, and to give labor's financial claims for retirement pensions priority over claims by the banks to get fully paid on hundreds of billions of dollars of recklessly bad loans recently reduced to junk status. Let's call the ``Greek bailout'' what it is: a TARP for German and other European bankers and global currency speculators. The money is being provided by other governments (mainly the German Treasury, cutting back its domestic spending) into a kind of escrow account for the Greek government to pay foreign bondholders who bought up these securities at plunging prices over the past few weeks...This windfall is to be paid by taxpayers -- ultimately those of Greece (in effect labor, because the wealthy have been untaxed) -- to reimburse Euro-governments, the IMF and even the U.S. Treasury for its commitment to predatory finance. The payment to bondholders is to be used as an excuse to slash Greek public services, pensions and other government spending. It will be a model for other countries to impose similar economic austerity...

bankers; people.

Jesse's Café Américain Mon 2010-04-19 15:19 EDT

A Modern Tale of Financial Loss

A developer (Goldman) built houses that looking good, but were firetraps, using plans provided by an architect (Paulson). They were sold as being to code with certain characteristics represented and endorsed by the building inspectors (Ratings Agencies).After the sale, the developer and the architect bought huge amounts of fire insurance on the homes from a friendly insurance agent (AIG London)...

Financial Losses; Jesse's Café Américain; modern tales.

naked capitalism Wed 2010-04-07 19:38 EDT

Have Bloggers ``Won''? And Is That a Bad Thing?

...[MSM difficulties] Richard Kline: ...Most of the MSM is owned by large corporations which abhor any serious questioning of the status quo. Most of the MSM decided a generation ago to pitch their product at the soft middle of the demographic curve; that's `dumb down' to those ow you who need a scorecard. Most of the MSM went to recent journalism school and bought into the idea of false `balancing' which has castrated their editorial opinion in favor of whoever is driving debate by telling the latest Big Lie. Then there is the problem of self-interested 'sources,' hardly new, and manageable when journalists were allowed to have an opinion themselves, but deleterious when they are supposed to be `neutral,' i.e. readily maniplulatible. Then there is the issue that too many journalists have decided to become propagandists for the status quo of the moment, making their reportage the worst kind of bandwagon swillage. Then too, MSM has responded, or rather _not_ responded to the emergence of new kinds of media spreading current information reportage: just when the MSM needs established `quality brand' to fall back on they find that they gutted the brand to fellate large shareholders and the interests of the same.

bad things; bloggers; naked capitalism; won.

Fri 2010-03-12 08:45 EST

AlterNet: The Richest 1% Have Captured America's Wealth -- What's It Going to Take to Get It Back?

...while US workers are now working more hours and have become dramatically more productive and profitable, our pay is actually declining and all the dramatic increases in wealth are going straight into the pockets of the Economic Elite...the average US citizen is forced to give up approximately 30% of our income in taxes. This tax system is now strategically designed to flow straight into the hands of the Economic Elite. A huge percentage of our tax dollars ultimately end up in their pockets. The past decade proves that -- whether it's the Republicans or the Democrats running the government -- our tax money is not going into our community, it is going into the pockets of the billionaires who have bought off both parties...most every serious economist knows that due to so much theft and debt created in the tax system, the only way to fix things, other than stopping the theft and seizing the trillions that have been stolen, will be for the government to cut important social funding and drastically raise our taxes...Trillions more in our spending on food and fuel has been stolen due to fraudulent stock transactions and overcharging...we have the most expensive health care system in the world and we are forced to pay twice as much as other countries, and the overall care we get in return ranks 37th in the world...The American worker is screwed over every step of the way, and it all starts with the explosion in the cost of a college education. This is one of the Economic Elite's most devastating weapons...The American dream has turned into a nightmare. The economic system is a sophisticated prison cell; the indentured servant is now an indebted wage slave; whips and chains have evolved into debts...

AlterNet; Captured America's Wealth; Go; richest 1; s; take.

Fri 2010-03-12 08:38 EST

AlterNet: The Economic Elite Have Engineered an Extraordinary Coup, Threatening the Very Existence of the Middle Class

It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99 percent of the U.S. population no longer has political representation. The U.S. economy, government and tax system is now blatantly rigged against us...

AlterNet; Economic elite; engineering; exists; Extraordinary Coup; middle class; threatens.

Fri 2010-02-12 21:32 EST

Priceless: How The Federal Reserve Bought The Economics Profession

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found. This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too...

economics profession; Federal Reserve bought; priceless.

Jesse's Café Américain Mon 2009-12-28 21:07 EST

Who Is Buying All These US Treasuries (And Can They Keep It Up in 2010)?

...according to the government, US households are absolutely piling into US sovereign and corporate debt at record levels, and at record low interest rates. And almost no one but the Fed is buying Agency Debt...this is why I think we might see quite a bloodbath in the bonds in 2010, as mom and pop get skinned by the Street for weighing in so heavily on this one sided trade in US sovereign debt. The US household sector is a slow moving convoy, presenting a traditional and tempting target for the Wall Street wolf packs...Sprott Asset Management says: "Our concern now is that this is all starting to resemble one giant Ponzi scheme. We all know that the Fed has been active in the market for T-bills...under the auspices of Quantitative Easing, they bought almost 50% of the new Treasury issues in Q2 and almost 30% in Q3...We are now in a situation, however, where the Fed is printing dollars to buy Treasuries as a means of faking the Treasury's ability to attract outside capital. If our research proves anything, it's that the regular buyers of US debt are no longer buying, and it amazes us that the US can successfully issue a record number Treasuries in this environment without the slightest hiccup in the market."

2010; buy; Jesse's Café Américain; keeping; Treasury.

Thu 2009-11-19 10:26 EST

Goldman left foreign investors holding the subprime bag | McClatchy

Goldman sold more than $57 billion in risky mortgage-backed securities during a 14-month period in 2006 and 2007, including nearly $39 billion issued from mortgages it purchased. Meanwhile, the firm peddled billions of dollars in complex deals, many of them tied to subprime mortgages, in the Caymans and other offshore locations...Goldman's traders also made huge bets that those securities would lose value by buying insurance-like contracts, called credit-default swaps, with private parties. Beginning early in 2007, they bought swaps on a London-based exchange.

Goldman left foreign investors holding; McClatchy; subprime bag.

zero hedge Mon 2009-09-21 14:35 EDT

Atlanta Fed On Federal Reserve Monetization Activities; $1.1 Trillion In USTs And Agency MBS Purchased To Date

The Fed now has $15 billion in purchasing power left under the Treasury component of QE. Of the $1,250 billion in MBS projected to be bought by the end of the year, the Fed was already purchased $840 billion, leaving $410 billion in budgeted purchases over the next three and a half months: about $125 billion per month. On September 15, the Fed purchased $2.05 billion in Treasuries, roughly in the 10-17 year sector; on September 16, it purchased $1.799 billion in the one-to-two year sector. It has purchased a total of $285.2 billion of Treasury securities through September 16.The Fed plans to purchase $300 billion by the end of October, or about six weeks from now, which makes for a pace of about $2.5 billion in purchases per week.

1; 1 Trillion; Agency MBS Purchases; Atlanta Fed; date; Federal Reserve Monetization Activities; ust; Zero Hedge.

The Economic Populist - Speak Your Mind 2 Cents at a Time Mon 2009-09-21 14:33 EDT

Fed accounts for 50% of treasury purchases

There once was a time when the Federal Reserve abhorred the idea of monetizing debt. That day is long over. In the second quarter, the most recent for which data is available, the Fed bought $164 billion out of the $339 billion in net new Treasurys sold. In the mortgage-backed debt markets, the Fed has been buying upward of 80% of the bonds issued by agencies such as Freddie Mac and Fannie Mae. ZeroHedge helps to put this number into perspective: the Fed was a greater factor in UST demand than all three traditional players combined: Foreigners, Households and Primary Dealers, which amounted to a $158 billion in net Q2 purchases.

50; economic populist; Fed Accountable; Mind 2 Cents; speaking; Time; Treasury purchases.

The Full Feed from HuffingtonPost.com Thu 2009-09-17 10:06 EDT

Priceless: How The Federal Reserve Bought The Economics Profession

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found. This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists.

com; economics profession; Federal Reserve bought; full Feeds; HuffingtonPost; priceless.

Bruce Krasting Fri 2009-09-04 19:39 EDT

On Fed Intervention and the Blogs

A week ago a great debate was stirred in the financial blog world. As is often the case Zero Hedge was in the middle of the fracas. Mr. Durden penned a piece that suggested that the Fed was manipulating the auctions in such a way as to benefit the primary dealers. It got to be a very sophisticated discussion that brought in some thinking from Yves Smith at Naked Capitalism and John Jansen at Across the Curve. The debate is over is far as I am concerned. The Treasury had another successful auction today of the 30 year. But in order to make it a success the Fed bought $27 billion of 15-30 year mortgage paper. The curve is the curve...This is timed intervention. That is a polite way to say manipulation. Federal Reserve manipulating Treasury auctions; quantitative easing.

Blog; Bruce Krasting; Fed intervention.

Bruce Krasting Fri 2009-09-04 19:21 EDT

Fannie's Trading Derivatives Hard, and Losing

It has been my contention that the Agencies were a factor in the bond market volatility in the past three months. Fannies 10Q has the following information regarding their derivative activity in the first six months of the year. As of June 30 FNM had a balance sheet of $900 billion. Against that position they bought and sold over the counter derivative contracts totaling $1.2 Trillion. On average $100 billion per day. There can be little doubt but that FNM has been adding to the volatility in the credit market. As luck would have it, the end result of all of this was a loss of $2.2billion.

Bruce Krasting; Fannie's Trading Derivatives Hard; Lose.

Wed 2009-04-01 00:00 EDT

Wall Street Watch

$5 BILLION IN POLITICAL CONTRIBUTIONS BOUGHT WALL STREET FREEDOM FROM REGULATION, RESTRAINT, REPORT FINDS; Robert Weissman

Wall Street watching.

Thu 2007-12-20 00:00 EST

Bear In Mind > Fannie Mae: Systemic time bomb

Bear In Mind > Fannie Mae: Systemic time bomb; half of issued debt bought by non-US investors; risky mortgage exposure 10x capital base; falling home prices drive foreclosures, huge Fannie Mae losses

Bear; Fannie Mae; mind; Systemic time bomb.