Wed 2010-10-13 09:01 EDT

Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System

Christopher Peterson

...Mortgage Electronic Registration Systems, Inc., commonly referred to as ``MERS,'' is the recorded owner of over half of the nation's residential mortgages. MERS operates a computer database designed to track servicing and ownership rights of mortgage loans anywhere in the United States. But, it also acts as a proxy for the real parties in interest in county land title records. Most importantly, MERS is also filing foreclosure lawsuits on behalf of financiers against hundreds of thousands of American families. This Article explores the legal and public policy foundations of this odd, but extremely powerful, company that is so attached to America's financial destiny...The article culminates in a discussion of MERS' culpability in fostering the mortgage foreclosure crisis and what the long term effects of privatized land title records will have on our public information infrastructure. The Article concludes by considers whether the mortgage banking industry, in creating and embracing MERS, has subverted the democratic governance of the nation's real property recording system.

foreclosures; mortgage Electronic Registration System; subprime mortgage lending.

Fri 2010-10-08 21:02 EDT

Kudlow Gets Into Foreclosuregate in [Market-Ticker]

...The REMICs - the foundational conduits for all this paper - are to a large degree defective. I bet some of Fannie and Freddie's are too. Many notes were not conveyed, and in the states where recordation is necessary, most of them weren't recorded either. Many of these original notes are known to be sitting with the originator, never endorsed over and in some cases shipped overseas or deliberately destroyed. For all intents and purposes they're gone, because once the MBS closes they can't be put in later on...

Foreclosuregate; Kudlow; Market Ticker.

naked capitalism Mon 2010-09-20 09:24 EDT

Theoclassical Law and Economics Makes the Law an Ass

William Black

...The Supreme Court's Citizens United decision allows businesses to make unlimited political contributions to judges and politicians. When judges are elected, the need for these contributions inherently turns judges into politicians. Sympathetic judges are corrupt businesses' most valuable allies. Corporations and their senior officials can commit civil or criminal wrongs with impunity if their case is assigned to a friendly judge...Yves noted that the Chamber of Commerce was leading the effort to elect CEO-friendly judges...The Chamber distributed a plan for a hostile takeover of university departments of economics and finance (and the courts and the media) proposed by Lewis Powell (the soon to be Supreme Court Justice). Extremely conservative ``law and economics'' proved to be central to this effort. The law and economics movement began as a non-ideological approach to explaining and aiding judicial decision-making. The scholars leading the movement had diverse views. The Olin Foundation transformed law and economics into an ultra ideological field dominated almost exclusively by passionate opponents of government ``interference'' in ``free enterprise.'' Olin specialized in creating well-funded positions in academia for scholars that had an ``Austrian'' approach to economics...Law and economics has, for over two decades, been dominated by theoclassical economic dogmas that have proved false...There are now tens of thousands of law and economics graduates that have taken a class in theoclassical law and economics. They were taught that theoclassical economic assertions (often falsified decades ago) were objective facts devoid of ideological content. They have been taught that economics has proven that regulation is unnecessary, hopeless, and harmful...

ass; economics make; Law; naked capitalism; Theoclassical Law.

New Deal 2.0 Thu 2010-07-22 15:54 EDT

The Summer(s) of Our Discontent

Marshall Auerback

Virtually every profile on Larry Summers tells us that he is one of the most brilliant economists of his generation...Only Robert Rubin and Alan Greenspan played a more important role than Summers in promoting the deregulation and lax oversight that laid the foundations for the current crisis...the latest FT defense reflects Summers's fundamental lack of understanding of modern money. Contrary to his view, the late 90s surpluses was not the reason for that period's prosperity. The surpluses are what ended the prosperity. And until the public understands this, we should expect no fundamental improvement in economic policymaking from the Obama Administration...he violates one of Abba Lerner's key laws of functional finance: a government's spending and borrowing should be conducted ``with an eye only to the results of these actions on the economy, and not to any established traditional doctrine about what is sound and what is unsound.'' In other words, Lerner believed that the very idea of what good fiscal policy means boils down to what results you can get -- not some arbitrary notion of ``fiscal sustainability''...The government budget surplus meant by identity that the private sector was running a deficit. Households and firms were going ever farther into debt, and they were losing their net wealth of government bonds. Growth was a product of a private debt bubble, which in turn fuelled a stock market and real estate bubble, the collapse of which has created the foundations for today's troubles...

0; discontent; new dealing 2; s; summer.

Thu 2010-06-03 17:42 EDT

World Order, Failed States and Terrorism, Part 3: The Business of Private Security

Henry C K Liu

...Social order is the main component of domestic security. Social security is the foundation of social order. Henry J Aaron of the Brookings Institution calls the US Social Security system "the great monument of 20th-century liberalism". Privatization of social security is not a solution; it is an oxymoron. It merely turns social security into private security. Neo-liberal economics theory promotes as scientific truth an ideology that is irrationally hostile to government responsibility for social programs. Based on that ideology, neo-liberal economists then construct a mechanical system of rationalization to dismantle government and its social programs in the name of efficiency through privatization. Privatization of social security is a road to government abdication, the cause of failed statehood...In the era of financial globalization, nations are faced with the problem of protecting their economies from financial threats. The recurring financial crises around the world in recent decades clearly demonstrated that most governments have failed in this critical state responsibility. The economic benefits associated with the unregulated transfer of financial assets, such as cash, stocks and bonds, across national borders are frequently not worth the risks, as has been amply demonstrated in many countries whose economies have been ravaged by external financial forces. Cross-border capital flows have become an increasingly significant part of the globalized economy over recent decades. The US depends on it to finance its huge and growing trade deficit. More than $2.5 trillion of capital flowed around the world in 2004, with more than $1 trillion flowing into just the US. Different types of capital flows, such as foreign direct investment, portfolio investment, and bank lending, are driven by different investor motivations and country characteristics, but one objective stands out more than any other: capital seeks highest return through lowest wages. The United States is not only losing jobs to lower-wage economies, the inflow of capital also forces stagnant US wages to fall in relation to rising asset values.

business; failed state; Part 3; private security; terror; World ordering.

Credit Writedowns Sat 2010-05-22 20:38 EDT

Out of control US deficit spending [MMT introduction]

Regular readers know that, while I have a little of what Marshall Auerback calls deficit terrorism in my DNA, I fully support fiscal stimulus as a means to arrest a deep downturn...the US economy will not be able to sustain recovery for long without stimulus. The likely result of withdrawing stimulus is a recession that is deeper than the last one aka a major depression...a lot of talking heads are trying to bamboozle people with tales of woe about hyperinflation and sovereign bankruptcy in the US to support specific claims about what deficit spending can and can't do. Deficit hawks, in particular, are on the warpath...I am throwing in the towel on policy makers because it's clear that Obama has been captured by the deficit hawks and we are headed for a painful recession within the next two years...The policy debates aren't working because the actual mechanics of a fiat monetary system are being obscured by ideological political debates. So, what I want to do is lay the foundations of modern money with you so we can strip away the politics and ideology from the economics...

control; credit writedowns; deficit-spending; MMT introduction.

Electric Politics Mon 2010-03-22 14:06 EDT

False Consciousness

Werther

...Barry Lynn of the New America Foundation has written an interesting refutation of...an almost universal popular assumption in the United States that this country is much more entrepreneurial and individualistic than the purportedly lazy, pension-sponging socialists of Old Europe. Yet U.S. small business development is at the bottom of the heap of the OECD countries. Once again, our flattering self image is so wildly at variance with reality it verges on schizophrenia...Lynn argues that a key inflection point in government policy towards small business came in 1981, when the Reagan administration essentially stopped enforcing anti-monopoly and small business-protection statutes....

Electric Politics; false consciousness.

Thu 2010-01-07 20:04 EST

Hard times at the Washington Post

Dean Baker

The Washington Post is a newspaper with a proud legacy. It has done much important reporting over the years, most famously its coverage of the Watergate scandal that resulted in the resignation of Richard Nixon. Unfortunately, it seems to have abandoned its journalistic standards. In its last issue of the decade, it published as a news piece an article by the Peter Peterson Foundation-funded Fiscal Times. This compromised the Post's journalistic integrity to the extent that readers can no longer take it seriously.

hard times; Washington Post.

Debtor's prison Sun 2010-01-03 10:37 EST

Would a Single World Currency be GOOD for the world?

MAAA

...One Single World Currency (SWC) is a topic that we have discussed many times from the very early days of this blog. For months, our discussions have focused on the causes behind the eventual collapse of the current USD-backed financial system, the apparent INEVITABILITY of this collapse and the very high LIKELIHOOD that the proposed solution to this will be a global monetary system backed by a single currency unit -- perhaps a modified version of an IMF SDR as Jesse suggests, or something new altogether. While most of our energy has been spent demonstrating the high likelihood (in our opinion, inevitability) of a SWC, we have been cowards when it comes to taking a stance on a SWC either way. Our apparent neutrality thus far has been largely motivated by a desire to remain unbiased while we explored some of the Numbers/definitions first. Having set these foundations and thought about the matter for some time, the gloves finally come off and we declare ourselves to be VEHEMENTLY OPPOSED to a SWC, both technically and in principle and spirit...we argue that the significantly increased trade granularity of the past few decades diminishes the need for a SWC, and in fact, creates ideal situations for the establishment of more localized currencies, which would be infinitely more stable than a SWC...increased trade granularity (which is a fact) increases the pheasibility and stability of local, floating currencies, to the point that they might be a preferable alternative to a SWC.

Debtor s Prison; good; Single World Currency; world.

naked capitalism Wed 2009-12-16 15:18 EST

Hosptial Cleaners Are Worth More Than Bankers (and Quelle Surprise, Bankers Destroy Value!)

A provocative report by the New Economics Foundation has made an effort to put a price tag on the broader costs and benefits of various types of work. As quoted in the Financial Times...The authors assume the financial crisis and recession would not have happened without City bankers engaging in risky, opaque and complex transactions. Applying a guess about the cost of the recession on the rest of society, they estimate top City bankers des-troy £7 of value for every £1 they are paid privately.

bankers; Bankers Destroy Value; Hosptial Cleaners; naked capitalism; Quelle Surprise.

Jesse's Café Américain Tue 2009-11-03 20:12 EST

Nine More Banks Fail with CIT on Deck for a Packaged Bankruptcy While Gold Shines

Jesse

...The current state of economics is most remarkable for its arrogant complacency in the face of two failed bubbles, a near systemic failure, a pseudo-scientific perversion of mathematics exposed, and an incredible capacity for spin and self-delusion. The people wish to believe, and Wall Street and the government economists are all too willing to tell them whatever they wish to hear, for a variety of motives. And there is an army of salesmen and lobbyists and econo-whores touting this fraud around the clock...There are good reasons for this failure of American "monetary capitalism," and it has to do with an oversized financial sector and a surplus of white collar crime that both distort and drain the productive economy. The current approach is to pump money into a failed system without attempting to reform it, to fix its fundamental flaws, to make an honest accounting of the results. The result are serial bubbles and the foundation for long duration zombie economy with a grinding stagflation that may morph into a currency crisis and the fall and reissuance of the dollar, as we saw with the Russian rouble. It will stretch the political fabric of the US to the breaking point. This is how oligarchies and their empires fall.

banks failed; CIT; deck; gold shines; Jesse's Café Américain; packaged bankruptcies.

The Economic Populist - Speak Your Mind 2 Cents at a Time Sat 2009-10-10 13:19 EDT

Friday Movie Night - Michael Lind Presents

New America Foundation, Policy Director of the Economic Growth Program, Michael Lind is on a roll. He's pulling in a host of economists and policy formulators who really are speaking truth, interviewing them an' putting 'em on the Internets. You're going to love these interviews with Thomas Palley, Ralph Gomory, Pat Choate and Peter Morici.

economic populist; Friday Movie Night; Michael Lind Presents; Mind 2 Cents; speaking; Time.

Sun 2009-09-20 14:12 EDT

America's Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and Great Recession | The New America Foundation

Thomas Palley

This report traces the roots of the current financial crisis to a faulty U.S. macroeconomic paradigm. One flaw in this paradigm was the neo-liberal growth model adopted after 1980 that relied on debt and asset price inflation to drive demand. A second flaw was the model of U.S. engagement with the global economy that created a triple economic hemorrhage of spending on imports, manufacturing job losses, and off-shoring of investment. Deregulation and financial excess are important parts of the story, but they are not the ultimate cause of the crisis. Instead, they facilitated the housing bubble and are actually part of the neo-liberal model, their function being to fuel demand growth based on debt and asset price inflation. The old post-World War II growth model based on rising middle-class incomes has been dismantled, while the new neo-liberal growth model has imploded. The United States needs a new economic paradigm and a new growth model, but as yet this challenge has received little attention from policymakers or economists.

America's Exhausted Paradigm; Financial Crisis; Great Recession; Macroeconomic Causes; New America Foundation.

Fri 2008-11-07 00:00 EST

naked capitalism: Willem Buiter: "We are laying the foundations of the next systemic crisis"

Buiter lambasts Paulson

Foundation; lays; naked capitalism; system crisis; Willem Buiter.

Fri 2008-11-07 00:00 EST

The Tax Foundation - Transit Agencies in Bind Due to SILO Deals and AIG Collapse

by Joseph Henchman; Federal Officials Encouraged Leasebacks, Then Made Them Worthless for Creditors

AIG Collapse; bindings; SILOs deals; Tax Foundation; transit agency.

Tue 2008-09-02 00:00 EDT

The Newer Deal: The Path to a Democratic Supermajority | The New America Foundation

The Newer Deal: The Path to a Democratic Supermajority, by Michael Lind (Salon, 2008-08-15) | The New America Foundation; ``Social conservatives, having lost the culture war, should be offered not only a truce but also an opportunity to join a broad economic campaign for a middle-class America, as many of them did between 1932 and 1968. When pro-choicers and pro-lifers unite in cheering the public investment and living wage planks at the convention of the neo-Roosevelt party, we will know that the political era that began in 1968 is truly and finally over.''

Democratic supermajority; New America Foundation; Newer Deal; path.

Wed 2007-05-09 00:00 EDT

The Foundation For Taxpayer & Consumer Rights (FTCR)

The Foundation For Taxpayer & Consumer Rights (FTCR): New Gasoline Study Shows Profits, Not Crude Oil Prices Or Ethanol, Are Driving Pump Price Spike

consumer rights; Foundation; FTCR; Taxpayers.

Fri 2005-10-21 00:00 EDT

NEW AMERICA FOUNDATION

Lawrence Wilkerson transcript, New America Foundation: Weighing the uniqueness of the Bush administration's national security decision-making process

New America Foundation.