The Cynical Economist

In fact the things are getting worst…

Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move

Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the nation’s credit markets seized up and required unprecedented bailouts by the government.

Five banks – JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc., Wells Fargo & Co. (WFC), and Goldman Sachs Group Inc. — held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the Federal Reserve.

That specter is eroding faith in Obama’s pledge that taxpayer-funded bailouts are a thing of the past. It is also exposing him to criticism from Federal Reserve officials, Republicans and Occupy Wall Street supporters, who see the concentration of bank power as a threat to economic stability.

As weaker firms collapsed or were acquired, a handful of financial giants emerged from the crisis. Since then, JPMorgan, Goldman Sachs and Wells Fargo have continued to grow internally and through acquisitions from European banks, reeling from government austerity measures related to the rising cost of public debt in Greece, Spain, Portugal, Ireland and Italy.

The industry’s evolution defies the president’s January 2010 call to “prevent the further consolidation of our financial system.” Embracing new limits on banks’ trading operations, Obama said then that taxpayers wouldn’t be well “served by a financial system that comprises just a few massive firms.”

But, but, but, wait a minute! ….Didn’t they pass the Dodd- Frank Wall Street Reform and Consumer Protection Act to deal with the too big to fail banks? 

Oh- yeah they did. 

So, what did the government incompetent bureaucratic achieved? 

Here you go…

Committee: Dodd-Frank compliance to cost private sector 24 million man-hours per year

Regulators have written only 185 of the expected 400 rules. But those 185 rules are expected to cost the private sector more than 24 million man-hours each year to comply.

The tracker has also found that those 185 rules take up more than 5,300 pages.

….let’s just get it down to the community banker — the person that loans money to most of the small businesses in our country,” Neugebauer said in a phone interview. “We’ve had a few community bankers come in here and say, ‘you know, they’re hiring a lot more compliance officer than they are loan officers.’ That is increasing the cost of banking and, ultimately, they have to charge higher interest rates and higher fees.”

The ordinary people got f@cked again…

Be sure to watch to the end. Explains in part why we are in such a mess now.

The crooks and liars got legit one way or another…The rest of the American people… well sucks to be us.

It seems, that the majority of our society is already dumbed down way too much to figure out how to stop their reign over us.

Yep, we let all the politicians, crony capitalists, banksters, the “exceptional intellectuals”, and corrupted bureaucrats to control and screw our and our kids lives.

BTW after watching the video just think of who is going to pay for the “mistake” of underestimating the cost of Obamacare with almost a TRILLION DOLLARS.

And who is going to be held accountable for such a HUGE number? For sure not the a$$#@!*s who passed that thing into law…

And since when a project that the government handles cost as much as it was planned?

NEVER!

The CBO would have done a better estimation by multiplying everything by factor of at least  X5

Who had interest of passing that law? The common man? Um hum…

Or are they the same people who had interest of installing the naked scanners at the airports, or got the bank bailouts because they were sure they knew what they were doing BETTING billions of dollars, or start green businesses so they were to get millions in grants, or the politicians that deliberately made us debt slaves by giving to their friends our money?

Or all of the above?

Step by step the elite and their puppets are legitimizing their crimes against the rest of us.

Ehhhhhhhhhh, what do they care….. After them …the deluge…

Obama’s Top Campaign Bundlers Among State Dinner Guests (after the jump there is a list with names and companies)

The list include Hollywood producer Harvey Weinstein, Vogue editor-in-chief Anna Wintour, media mogul Fred Eychaner, Pfizer executive Sally Susman, Stoneyfield Farms president and CEO Gary Hirschberg,  and Microsoft executives Suzi Levine and John Frank.  Several have each raised more than half a million dollars for 2012, according to estimates provided by Obama’s campaign.

China ratings house says US defaulting – Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China….Heh-heh-heh…. Suckers!

Dow closes below 12 0000 – Investors were dour after U.S. May import prices showed a surprise rise of 0.2%, hinting at an inflation push coming into the U.S. from abroad. Surprised, eh?

JPMorgan Forecasts Another Drop in Home Prices – JPMorgan Chase is forecasting another 4 to 5 percent drop in home values over the next 12 months. The forecast number  is low, if you ask me.

Home prices may drop another 25%, Shiller predicts – Home prices may drop as much as 25 percent, after inflation, over the next five years, economist Robert Shiller, co-founder of the Standard & Poor’s/Case-Shiller home price index, said Thursday

Many of us won’t be able to retire until our 80s – You’ll probably have to work much longer than you anticipated. That is, if there will be jobs out there…

30% Of People With A 401(k) Have Taken Out A Loan Against It – One-in-seven people took out such loans last year — up by double digits from 2009, according to the consulting group AON Hewitt. More people not retiring and working into their 80s.

Ohio restaurant name-checked by Obama to close – The owners of an Ohio restaurant touted last week by President Barack Obama as an indirect beneficiary of the government’s Chrysler bailout said Thursday that tough times are putting them out of business. Obama is toxic any way you look at it.

States considering online lottery sales - Republican New York Assemblyman Clifford Crouch is sponsoring a bill that would allow online sales of Quick Draw and other games, with a goal of expanding the market. Legalising sin to boost revenue…soon to pass – lowering the drinking age to 14 and legalizing drugs and prostitution (I am not saying it is good or bad thing)

Americans’ equity in their homes near a record low – Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago. And some realtors continue to say that the homes are supposed to be our pigi-banks to help our retirement?

US Is Nearing Even Worse Financial Crisis: Jim Rogers – In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt. ”When the problems arise  next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around.” Why not?, Why not?

Job Plan With A Page From Marx – Presumably, if enough community college students can be trained for traditionally unionized manufacturers, employers will have no choice but to hire them. That’s a win-win-win-win for educational bureaucrats, unions, jobs and Obama’s political prospects. Below is a different prospective with which I agree more.We can have manufacturing here – high tech innovative manufacturing. Still do not agree with the part where the government gets to decide who is the winner and who is the looser in funding private businesses with grants

Federal data shows troubling unemployment, underemployment trends –

Less than half of African-American men now have full-time jobs, and less than half of all white men will have full-time jobs in 2018, according to post-2000 trends hidden in federal population and workforce data.

There are roughly 14 million people formally labeled as unemployed, but “there’s probably 22 million to 23 million people who are unemployed, mal-employed or underemployed,” said Andrew Sum, an economics professor at Northeastern University in Boston.

O-mama….”Less than half of African-American men now have full-time jobs, and less than half of all white men will have full-time jobs in 2018″

And see the above story should have been first page news everywhere….But what passes for news today are the distraction of the real problems – releasing 24 000 of Palin’s emails while she was governor (who cares?), that Weiner guy is probably going to keep his seat as our employee and we will continue to pay him to twitter his weine (I personally do not care about his private life, but boy if he lie so bluntly, can you trust him to represent you?), Obama to play golf with few other political hacks….probably discussing how to run America down the drain faster…

The Hidden Cost of Ethanol Subsidies – By mandating 40% of our corn crop be dedicated to ethanol, we’ve created domestic shortages that may turn the U.S. into a net importer of corn and destroy our dominance in one more area of the world economy. And as usual the bad news doesn’t come alone…It seems we will pay higher prices for the corn…and the ethanol

Tightening stockpiles drive up corn prices – Corn jumped to the highest price in almost three years after the U.S. Department of Agriculture forecast tighter supplies, as adverse weather hurt crops

What’s up with the youth today in America….Oh, yeah – undereducated and out of work, no body is hiring right now so….-…so, they kill for joy….

Dozens Brawl Outside Downtown San Jose McDonald’s; 2 Stabbed – Witnesses told CBS5 that the brawl was so big it looked like a riot. That kind of behavior isn’t surprising to some. One man, who only identified himself as “Julio,” said the area looks like a “war zone” late at night with groups of youngsters looking for trouble.

Police warn of teen girls committing strong arm robberies - Police have issued a community alert on the Southwest Side warning residents of strong arm robberies committed by two 16-year-old girls.

Heartbreak as ‘innocent bystander’ teen killed and four others wounded in boardwalk shooting at New York beach - ’It’s a bad combination of guns, heat, beer and angry young men,’

NM teens tied up, smothered foster mom – Arrest documents say two 15-year-old girls accused of killing their foster mom in New Mexico put her in a chokehold, tied her hands and feet and then smothered her with a pillow.

Wash. residents warned of ‘bloodthirsty’ dog pack – You know what kind of countries usually have problem with bloodthirsty dog packs? Third world countries. In times of financial hardship some owners let the dogs go out to take care of themselves and feed with the garbage on the srteets. Few eventually will get together and start acting as their brothers the wolf in searching to kill a pray. Now the animal control cannot take care of the problem because the states and county budgets are in red, so they cannot care for them in the animal shelters because of lack of food and neither have enough people to hunt down the dogs. So what we did in my ex-third world country – the residents hunted them down themselves with poison meat and shotguns. May sound cruel, but I bet you do not want to see kids and old people eaten by dogs.

Official: Mexican cartels use money, sex to bribe U.S. border agents – Mexican drug cartels have used cash and sexual favors as tools to corrupt U.S. border and customs agents, an inspector general investigation has found.

Barofsky: S&P estimates that the next crisis will cost $5 Trillion dollars upfront – Video – You should be scared!

It’s Obama’s Economy, Stupid – No president “runs” the U.S. economy, but this president talks like he does

Obama’s Egghead Economic Saboteurs - Official motto of the White House economic team: Those who can, do. Those who can’t, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.

Professor disaster – Rats, say goodbye to the ship of state: Gone are Christina Romer, Larry Summers, Peter Orszag. Headed out is Goolsbee, who abruptly announced his resignation Monday to return to teaching at the University of Chicago. With the water lapping over the gunwales, the lone holdout is Treasury Secretary Tim Geithner, the former tax cheat, who sails grimly on. Heckuva job, guys.

O’Donnell: Most Voters “Don’t Really Know Anything About The Economy” – MSNBC’s LAWRENCE O’DONNELL: But a recent poll shows that a majority of voters–a majority of whom don’t really know anything about the economy–don’t believe that the economy is recovering and blame President Obama for the struggling economy

Illinois Tax Firesale – Illinois is proving what bookshelves full of studies have found: Handing out special favors one business at a time is politically corrupting and an ineffective economic development strategy. A sounder way to create jobs is to provide a welcome tax and regulatory climate for all businesses. Some states, such as Arizona, constitutionally prohibit politicians from granting special favors to a business or citizen.

New Jersey and New York Ranked as Worst States for “Individual Freedoms” -Freer states are attracting citizens from other states while less-free states are losing citizens — and their tax dollars. The study results also showed that a 0.25 unit increase in economic freedom increases the average annual growth rate in personal income by about 0.25 percentage points.

Fed survey: Economy falters in several US regions – Economy falters because of slower manufacturing and weaker consumer spending. Gee, how do you make consumers spend or manufactures produce if some of them believe we are heading to a depression….

CNN: 48% believe a Great Depression is coming within a year – I guess we can count Barack Obama among the 51% who aren’t worried about it….And I guess this guy is only worried about his golf games

Banksters will never quit to find newer ways to rip you off.

I suggest you move your money to a community bank or to a credit union

From Money News

The new choices will have four tiers:

• The most basic account, called Bank of America Essentials, offers a single checking account with a debit card. This account has no minimum deposit required, and will come with a monthly fee attached. Currently, Bank of America’s most basic checking account typically has an $8.95 fee, but that is waived if the customer uses direct deposits or maintains a $1,500 account balance.

• The bank’s eBanking account, introduced earlier this year, has a single checking account with a debit card, but gives customers a choice to avoid the monthly fee by avoiding tellers and getting e-mailed statements. Currently, the fee for paper statements or using a teller is $8.95 per month. Celent’s Narter said this is notable. “What they’re trying to do is reducing a customer’s cost to serve and sharing in that cost reduction,” he said. “That is revolutionary.”

• Bank of America Enhanced has a monthly fee if the customer doesn’t maintain a $2,000 balance in a linked account or a combined $5,000 balance across accounts. It will offer links with up to four accounts — two checking and two savings or money market accounts.

In addition, Enhanced customers are able to avoid a fee by using a linked credit card at least once a month. That’s also unusual, Narter said. Banks typically issue credit cards through a separate division from their retail banking operations and it’s hard to combine the businesses.

• The top tier is called Premium, and requires a minimum balance of $20,000 in linked accounts or certain Merrill Lynch investment accounts, or a Bank of America mortgage to avoid monthly fees. Customers may link up to four interest-bearing checking accounts and four savings or money market accounts. Certain banking services, like money orders, cashier’s checks and check printing are free.

• For customers with combined balances of $50,000 or more and a checking or Merrill account, the bank is creating “Platinum Privileges,” a rewards program that provides specialized customer service, special rates on mortgages, certificates of deposit and money market accounts and a designated Privileges credit card with high-end perks like concierge service.

Read more: Bank of America Tests Wider Account Fee Choices

From The Telegraph
by Joseph Stiglitz

Rewritten bankruptcy provisions reduce indebted homeowners to servitude. What has become of the rule of law in the US?

The mortgage debacle in the United States has raised deep questions about “the rule of law”, the universally accepted hallmark of an advanced, civilised society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America, in the wake of the subprime mortgage crisis, it has done neither.

Part of the rule of law is security of property rights – if you owe money on your house, for example, the bank can’t simply take it away without following the prescribed legal process. But in recent weeks and months, Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts.

To some banks, this is just collateral damage: millions of Americans – in addition to the estimated 4 million in 2008 and 2009 – still have to be thrown out of their homes. Indeed, the pace of foreclosures would be set to increase – were it not for government intervention. The procedural shortcuts, incomplete documentation and rampant fraud that accompanied banks’ rush to generate millions of bad loans during the housing bubble has, however, complicated the process of cleaning up the ensuing mess.

To many bankers, these are just details to be overlooked. Most people evicted from their homes have not been paying their mortgages, and, in most cases, those who are throwing them out have rightful claims. But Americans are not supposed to believe in justice on average. We don’t say that most people imprisoned for life committed a crime worthy of that sentence. The US justice system demands more, and we have imposed procedural safeguards to meet these demands.

read the rest here

FRom Bloomberg
By Caroline Salas and Alex Tanzi

The Federal Reserve will probably begin a new round of unconventional monetary easing this week by announcing a plan to buy at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News.

Policy makers meeting tomorrow and Nov. 3 will restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed last week. Twenty-nine estimated the Fed will pledge to buy $500 billion or more, while another seven predicted $50 billion to $100 billion in monthly purchases without a specified total. The remainder said the Fed would buy up to $500 billion or didn’t quantify their forecast.

The varied responses reflect differences among Fed officials over the total amount of purchases needed to bolster the recovery. Policy makers, pursuing unprecedented stimulus, have cut the benchmark rate almost to zero and bought $1.7 trillion in securities without generating growth fast enough to bring down unemployment from near a 26-year high.

“There’s no silver bullet right now,” and central bankers have “very few options left in terms of lowering interest rates,” saidJohn Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. He predicted $500 billion of Treasury and mortgage-backed securities purchases over the next six months.

Read the rest of this entry »

From Yahoo Finance
by Michelle Conlin,
AP Real Estate Writer, On Tuesday October 12, 2010, 8:12 pm

In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.

“This was an industrywide scheme designed to defraud homeowners,” Ticktin said.

The depositions paint a surreal picture of foreclosure experts who didn’t understand even the most elementary aspects of the mortgage or foreclosure process — even though they were entrusted as the records custodians of homeowners’ loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn’t define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff’s assignor or defendant. She testified that she didn’t know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. “I don’t know the ins and outs of the loan, I just sign documents,” she said at one point.

Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Judges are unlikely to look favorably on a bank that claims paperwork flaws don’t matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book “Foreclosures.”

“There has to be a cornerstone of integrity to the process,” Coffey said.

Bank of America responded to Tiktin’s depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. “This review will ensure we have a full understanding of any potential issues and quickly address them,” Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank’s foreclosure customers have not made a payment in more than 18 months.

JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.

Litton Loan Servicing did not respond to a request for comment.

Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.

For a housing recovery to occur, all the foreclosed properties — which could account for 40 percent of all residential sales by 2012 — need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.

“This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?” says Cris deRitis, director of credit analytics at Moody’s Analytics. “We need to fix these issues before the economy can recover.”

Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you’ve reviewed documents you’ve never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.

So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.

But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of “foreclosure king” David Stern, now under investigation by the Florida attorney general’s office. “Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the bank said in an e-mailed statement.

Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern’s firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.

Stern’s lawyer, Jeffrey Tew, did not respond to a request for comment.

Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.

The Earls and their attorney now allege that they were victims of fraudulent paperwork.

Curt Anderson contributed from Miami.