Fri 2010-10-08 21:34 EDT

Improper GMAC Affidavits Leading to Charges of Document Fabrication to Change Title >> naked capitalism

Yves Smith

...the web emanating from the GMAC affidavit improprieties extend much further than most may realize. Although GMAC continues to maintain that having its ``robot signor'' officers like Jeffrey Stephan provide affidavits on matters they know nothing about is a mere technical problem that they can remedy. In fact, an affidavit is a statement of someone with personal knowledge of a matter. Stephan signed as many as 10,000 documents a month and clearly could not have personal knowledge of the underlying situations. Deliberately preparing and submitting inaccurate documents in a legal proceeding is a fraud on the court...So as much as GMAC and its fellow servicers no doubt hope there little document mess will fade from public view, attorneys are using it as a new weapon to fight questionable foreclosures or force servicers to negotiate principal mods...

CHANGING TITLES; charges; Document Fabrication; Improper GMAC Affidavits Leading; naked capitalism.

Fri 2010-10-08 21:27 EDT

Bank of America Suspends Foreclosures in All States >> naked capitalism

Yves Smith

...The robo signing of affidavits was clearly done across all sorts of court actions. As we indicated, the bogus affidavits are used in all foreclosures in judicial states; they aver various things about the plaintiff's indebtedness, including the plaintiff's ownership of the debt that are integral to the process. Providing an improper affidavit is considered to be a fraud on the court...affidavit abuses are mere symptoms of much deeper problems with the mortgage securitizations. Why, pray tell, are law firms and servicers engaging in false representations and widespread document forgeries? It is because, as we have stressed, they made a botch of getting the notes (the borrower IOU) into the trusts, and simple fixes don't work, hence the need to create a phony document trail. The Bank of America suspension of foreclosures in all states appears to be a tacit admission that the problems are as pervasive as we have suggested...

America suspends foreclosures; bank; naked capitalism; state.

Fri 2010-10-08 21:11 EDT

4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet >> naked capitalism

Yves Smith

...document fabrication is widespread in foreclosures. The reason is that the note, which is the borrower IOU, is the critical instrument to establishing the right to foreclose in 45 states (in those states, the mortgage, which is the lien on the property, is a mere ``accessory'' to the note). The pooling and servicing agreement, which governs the creation of mortgage backed securities, called for the note to be endorsed (wet ink signatures) through the full chain of title...Evidence is mounting that for cost reasons, starting in the 2004-2005 time frame, originators like Countrywide simply quit conveying the note. We are told this practice was widespread, probably endemic. The notes are apparently are still in originator warehouses. That means the trust does not have them (the legalese is it is not the real party of interest), therefore it is not in a position to foreclose on behalf of the RMBS investors. So various ruses have been used to finesse this rather large problem...We finally have concrete proof of how widespread document fabrication was...This revelation touches every major servicer and RMBS trustee in the US...The story that banks have been trying to sell has been that document problems like improper affidavits are mere technicalities. We've said from the get go that they were the tip of the iceberg of widespread document forgeries and fraud...

4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet; naked capitalism.

Sat 2010-08-07 20:57 EDT

Medicare Trustees: Fund Now Viable till 2029 >> naked capitalism

Yves Smith

Don't expect this updated assessment, that Medicare now is expected to be viable till 2029, to stem the expected push to gut Social Security and Medicare...the stresses on Medicare are due...almost solely [to] the rising health care cost projections...the US has grotesquely costly health care which produces no better results than that of other advanced economies. And the differences, in terms of rationing and queuing, are exaggerated. What are insurer denials of coverage for costly treatments if not rationing?...Obama, as with the banking industry, blew his opportunity to have a real impact on the underlying problems of health care that lead to high costs, including its fee for service model and perverse incentives.

2029; funds; Medicare trustees; naked capitalism; viable.

Wed 2010-08-04 20:58 EDT

Knives Out for Elizabeth Warren >> naked capitalism

Yves Smith

It should come as no surprise that a financial services industry powerful enough to water down meaningful reform in the US and internationally (Basel III rules were weakened to allow, for instance, that mortgage servicing rights be included in regulatory capital calculations) would probably have its way in blocking the nomination of Elizabeth Warren as head of the new consumer finance protection agency. Let's face it: the plan to deep six the consumer watchdog was set when it was changed from being an independent body as originally proposed and instead moved into the Fed, the most bank friendly and arguably the least industry expert of the US bank regulators. It might have had a hope of being effective had it been housed at the FDIC, which does not like cleaning up bank messes and therefore is less prone to swallow industry BS than the other Federal bank overseers, but it is now clearly meant to be a mere election time talking point...

Elizabeth Warren; knives; naked capitalism.

naked capitalism Mon 2010-07-19 17:07 EDT

Is the SEC Settlement Really a Win for Goldman?

Tom Adams and Yves Smith

...Conventional wisdom in the financial media is that the settlement announced by the SEC over its lawsuit on a Goldman 2007 Abacus CDO is a home run for Goldman. But a closer reading suggests that Goldman's victory is qualified, and the enthusiastic press response is in large measure due to the firm's skillful manipulation of perceptions...it is hard to see how anything in the settlement, if affirmed, would be negative for private parties considering lawsuits against sellers of CDOs...we imagine potential CDO investors will be mightily encouraged that Goldman ended up returning the full amount of investment to the one true third party investor in the deal -- IKB...An investor considering bringing an action against a bank that sold them a CDO that failed (meaning virtually all 2006 and 2007 ``mezzanine'' CDOs) would probably be encouraged that a bank was required to pay such a large amount for making inaccurate statements about the true nature of the CDO...Plaintiffs who sue CDO sellers have good reason to be optimistic...The settlement thus tarnishes the popular myth that the subprime shorts were insightful outsiders who executed ``the greatest trade ever''...the SEC has demonstrated that investors in such a CDO can win a recovery as a result of such inaccurate statements.

Goldman; naked capitalism; SEC Settlement Really; Wins.

Fri 2010-07-16 18:30 EDT

On Pelosi's Duplicity and Apparent Sandbagging of Elizabeth Warren <<; naked capitalism

Yves Smith

Despite her longevity as a California pol, house speaker Nancy Pelosi is looking like every bit as much of a dyed-in-the-wool financial services industry backer as the Congressmen on the New York-Boston corridor...So why are we pointing a finger at Pelosi in particular? The next chapter is her appointment of one Richard Nieman to the Congressional Oversight Panel...Nieman is the New York Superintendant of Banks. He helped Goldman set up its bank holding company...Nieman fell out with the other Democrats and wrote a joint opinion with John Sununu...to anyone with a passing acquaintance with the facts, the dissenting views are absurd...I can't imagine that Nieman would have fallen in with the Republicans without at least as a courtesy informing Pelosi in advance...So Pelosi is at a minimum sitting this one out (which I deem unlikely) or on board with the program to undermine Warren. And let us not kid ourselves, the knives are coming out...[2009-04-26]

Apparent Sandbagging; Elizabeth Warren; naked capitalism; Pelosi's Duplicity.

Fri 2010-03-19 20:28 EDT

The Empire Continues to Strike Back: Team Obama Propaganda Campaign Reaches Fever Pitch >> naked capitalism

Yves Smith

I've seldom seen so much rubbish written by people who ought to know better in a single day...The campaign to defend Geithner and Emanuel, both architects of the administration's finance friendly policies has gone beyond what most people would see as spin into such an aggressive effort to manipulate popular perceptions that it is not a stretch to call it propaganda. This strategy, of relying on propaganda to mask their true intent, has become inevitable, given the strategic corner the Obama Adminstration has painted itself in. And this campaign has become increasingly desperate as the inconsistency between the Adminsitration's ``product positioning'' and observable reality become increasingly evident...

Empire Continues; naked capitalism; striking; Team Obama Propaganda Campaign Reaches Fever Pitch.

naked capitalism Fri 2010-03-19 16:02 EDT

Calibrating differences between China and Japan's bubble blow-off top

Edward Harrison

...Is China experiencing a massive bubble or not? If so, will the bubble's inevitable pop spill over into the real economy in a nasty way as it has done in the U.S. and elsewhere?...My own point of reference has been the 1920s and the 1930s more than the 1980s and 1990s. In the 1920s, Great Britain played the role now played by the United States: military power, declining economic power, anchor global currency, and largest debtor nation. The United States played the role now played by China: rising economic and military power and `alpha creditor,' a phrase our Yves Smith coined. (The key difference is that the U.S. was more advanced relative to Great Britain than China relative to the U.S.)...China is effectively doing what France did by accumulating reserves despite fears of currency depreciation. I think this reserve policy is significant because this is what is behind all of the talk of protectionism and currency pegging. The Chinese are afraid that the U.S. are actively looking to devalue the currency while the U.S. are fed up with the peg and the resultant imbalances...

Calibrating differences; China; Japan's bubble blow; naked capitalism; Top.

Fri 2009-11-20 10:30 EST

Curious Meeting at Treasury Department >> naked capitalism

Yves Smith

The Treasury invited a small group of bloggers for a ``discussion'' with senior officials on Monday...we bloggers and the government officials kept talking past each other, in that one of us would ask a question, the reply would leave the questioner or someone in the audience unsatisfied, there might be a follow up question (either same person or someone interested), get another responsive-sounding but not really answer, and then another person would get the floor...the people we met are very cognitively captured, assuming one can take their remarks at face value. Although they kept stressing all the things that had changed or they were planning to change, the polite pushback from pretty all the attendees was that what Treasury thought of as major progress was insufficient...It was also striking to see that the Treasury officials did not articulate vision for a banking system for the 21st century that was materially different that the one we have now...

Curious Meeting; naked capitalism; Treasury Department.

naked capitalism Thu 2009-11-19 10:33 EST

Guest Post: Herding the Sheep

George Washington of Washington&apos;s Blog

Financial insider and commentator Yves Smith wrote an essay last week entitled ``MSM Reporting as Propaganda'' arguing that the government has been using propaganda to make people think that things are getting better, no one is angry, and -- therefore -- no one should get upset...Is Smith right? And even if she is, isn't ``propaganda'' too strong a word?...Even if true, propaganda is too strong a word for attempts to convince people that important issues are boring, that no one else is angry about them, and that everything is normal. Perhaps ``herding the wayward sheep'' would be better . . .

Guest Post; Herd; naked capitalism; sheep.

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

On Fed Intervention and the Blogs

Bruce Krasting

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.

naked capitalism Thu 2009-08-27 10:50 EDT

Quelle Surprise! Fed Uses Scare Tactics to Try to Forestall Loan Disclosures

Yves Smith

In a show of how much our government thinks that serving the financial oligarchy, rather than the citizenry, is its prime duty, the Fed is fighting to stop the court-ordered disclosure of who borrowed money under the Fed's various lending facilities. The reason I lump the Fed in with "the government" is that the central bank has been serving as an off-balance sheet entity of the Treasury for quite some time. And not only are the Fed and Treasury acting in near lockstep, but there has been no meaningful change in the government stance towards the banksters. Yes, Team Obama makes more of a show of trying to rein them in, but push comes to shove, it's merely Paulson version 2.0: same content, better packaging. Paulson's success in muscling...

Fed Uses Scare Tactics; Forestall Loan Disclosures; naked capitalism; Quelle Surprise; trying.

Wed 2009-04-01 00:00 EDT

Mike Whitney: Is Free Market Capitalism Possible Without Accountability?

Naked Capitalism blogger Yves Smith interviewed

accounted; Free Market Capitalism Possible; MIKE WHITNEY.

Thu 2009-01-15 00:00 EST

Jesse's Café Américain: Too Big to Fail, Too Well-Connected to Jail: The Economic Underworld of Bankruptcy for Profit

Jesse's Café Américain: Too Big to Fail, Too Well-Connected to Jail: The Economic Underworld of Bankruptcy for Profit; ``Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.'' Akerlof and Romer; Yves Smith

bankruptcy; big; Economic Underworld; fail; jailed; Jesse's Café Américain; profits; well connections.

Thu 2009-01-08 00:00 EST

Inside the influential new world of econobloggers - The Boston Globe

Inside the influential new world of econobloggers, Stephen Mihm, The Boston Globe; Tanta; Naked Capitalism; Yves Smith: ``The real leverage of blogs is that journalists read them''; Calculated Risk

Boston Globe; Econobloggers; influential new world.