And banks are keeping losses off the books as they ignore the people that are not paying their mortgages:
JUAN GONZALEZ: And William Black, where is the outrage? It seems to me, at this stage, with the—as the foreclosures continue to escalate in numbers, and yet we’re seeing these enormous profits less than a year after the financial crisis. There doesn’t seem to be the kind of outrage, even in Congress, that there was six months or eight months ago.Here we are neck deep in debt to pay off the gambling debts of the bankers and now they are completely ignoring their very real losses that are piling up at a record rate simply so they can keep the bonus money flowing into their own pockets:
WILLIAM BLACK: There’s no palpable outrage, certainly not in Congress. The reform efforts on derivatives, for example, are a scandal. They exempt virtually all of the problem derivatives, and they’re designed to exempt it. And that’s the bill that’s introduced, and of course it’s likely to get worse with additional lobbying from the special interests.
Link the things that you’ve just been talking about. You talked about foreclosures reaching record highs. But in fact, foreclosures, relative to delinquencies, are quite low compared to historical ratios. In other words, banks have tons of folks who are not paying their mortgages on time, and they’re not foreclosing. And the reason they’re not foreclosing is, once you foreclose, you have to recognize losses under the accounting rules. And the banks gimmicked the accounting rules. They put pressure on Congress, and Congress put pressure on the accounting profession to gimmick the accounting rules now about a year ago. Now, these bonuses, of course, are paid compared to alleged profits. What happens if you understate your losses dramatically? You report much higher profits and much higher bonuses. So this is a web of fraud, in which they are getting as much as they can before the place goes to hell in a handbasket again.
The Dow is Up but Your House is GoneAnd what are these bankers with their Enron style accounting doing to help the homeowners that are on the verge of losing their homes? You can be certain that they are still out there offering ARMs to unsuspecting victims of their financial rape of the world.
So here we have another bankster scam being waged on the consuming public. The scam is to create another "too big to fail" scenario as they make record profits and pay out record bonuses by rigging their books.
But the good news is the Dow is up.
So you or someone you care about is likely without a job or looking for more work. But the elite are rigging the system again, and you are going to fix things next time by voting for a Republican.
And as for you? You get nothing but shafted:
It's time to recognize what it means to be part of the billionaire-bailout nation. Citizenship comes in three distinct flavors.If you are among the Nouveaux Welfare Riche of the world?
If you are wealthy, it's fantastic to take part in the resurgent Wall Street boom. You are thrilled to see the trillions in taxpayer dollars successfully prop up the financial sector. After all it's not really your money -- your tax shelters take care of that. You love the rise in the markets. You are now reaping the rewards of investing in a sector that rests firmly upon government welfare, and in which the largest institutions are guaranteed from failure. It feels good to see double-digit returns again, which you feel you truly deserve.
The gap between your wealth and the average American's is utterly fantastic. Life is good.
If you have a job, you are feeling better than a year ago. Your 401k is coming back from the dead. The stimulus program seems to be helping with your employment. You may even get some relief from health care reform. But you are not seeing your wages increase. (Overall the average production workers real wages are down more than 18 percent since the mid-1970s.) It's not easy to maintain a middle-class existence or get anywhere near one if you're not already there. Layoffs might be slowing down but you are still petrified that your job will soon disappear. You are unsure you can provide for your children's education and your own retirement. The future seems much less secure than it did for your parents' and grandparents' generations.
If you don't have a job you're in deep trouble. You are a "lagging indicator."
Then your life is still good. The rest of us will never have a chance unless they fix the real problems.
These rich bastards know the government will hand out more of our future tax money over to them so they can continue to profit no matter how outrageously insane and fraudulant their business practices. Heck... Congress doesn't even want to take a real honest look at one of the major problems in of all of this:
As chairman of the House Committee on Oversight and Government Reform, Representative Edolphus Towns has not been shy about criticizing the excesses of the financial services industry, from executive bonuses to Wall Street profits, as well as the spotty track record of some bond-rating agencies.Now, I don't really care about the faux smears of some Democrats that underlie the overall schemes of the opposition party. The real problem here is that if they start looking at the symptoms of this Great Recession? The Bank of America owned Coutrywide mortgage mills?
But his refusal to subpoena records involving Countrywide Financial, a company blamed for lending practices that contributed to the subprime mortgage crisis, has made Mr. Towns himself the target of criticism.
It might lead them to the real fiancial disease.
The banks and shadow banks that got us all stuck where we are and are continuing with more fraud and will continue to take us around this depressing loop and they will find new ways to flush the nations' economy down the toilet as the old ways are still being brought to light:
Apparently, when you say something long enough and loud enough, people start to believe it, even when it defies reality. Here, for instance, is the normally skeptical Barney Frank on the subject: “What happened was an explosion of loans being made outside of the regular banking system. It was largely the unregulated sector of the lending industry and the underregulated and the lightly regulated that did that.”
To which I can now triumphantly reply: Oh, really???
Last weekend, after the column was published, an angry mortgage broker — someone who felt she and her ilk were being unfairly scapegoated by the banking industry — sent me a series of rather eye-opening documents. They were a series of fliers and advertisements that had been sent to her office (and mortgage brokers all over the country) from JPMorgan Chase, advertising their latest wares. They were dated 2005, which was before the subprime mortgage boom got completely out of control. They’re still pretty sobering.
“The Top 10 Reasons to Choose Chase for All Your Subprime Needs,” screams the headline on the first one. Another was titled, “Chase No Doc,” and described the criteria for a borrower to receive a so-called no-document loan. “Got Bank Statements?” asked a third flier. “Get Approved!” In a number of the fliers, Chase makes it clear to the mortgage brokers that the bank doesn’t need income or job verification — it just needs to look at a handful of old bank statements.
Right now people are being tried because they knew that this bust economy was coming but were still pushing their junk products on investors:
On Wednesday prosecutors painted a different story, claiming that the men knew their success as managers of mortgage-related funds was coming to an end in the spring of 2007, so they began a campaign of lies to keep investors from withdrawing their funds in the hopes of turning things around. The funds collapsed in July of that year, costing investors about $1.6 billion.Since we know that they haven't stopped selling junk mortgages even as they are purposely ignoring the billions and billions in mortgages that should be putting them into the major losses category so they can continue to get their great bonuses, and they are still gambling with credit derivatives and credit default swaps at the same unregulated pace that brought the economy of the world down...
Messrs. Cioffi, 53 years old, and Tannin, 48, potentially face a maximum of 20 years in prison for each of the several fraud counts of which they were charged in 2008, after a year-long investigation.
Defense lawyers have stressed that most of the investors were banks, insurance companies and investment funds, who knew the risks of investing in the Bear Stearns funds.
It's "human nature" to "use hindsight bias" against people after "things don't turn out well," but "that's not fair to Matt," Ms. Brune said about her client. "This is a case about trying to do your best," she said.
It will be impossible for them to claim the "hindsight bias" defense the next time this comes down the pike.
You don't have to be a financial genius to know it is all coming again because none of the problems, the real causes like Derivatives and CDS and myriad practices of these Wall Street financial fraudsters, nor the symptoms like the mortgage mills offering up ARMs and other economic disasters waiting to happen, have been stopped:
I have posted this warning of Bank of America's (BAC) naked swap writing to my subscribers a few weeks ago. Since BAC is reporting this week, I have decided to make my suspicions public. I have found evidence that this bank has $32 billion of naked (as in apparently unhedged) swaps on its books - just like AIG. The difference is this bank is bigger, probably has more exposure, and has already been bailed out - several times. Oh, did I mention the insured collateral is nearly half BBB rated or lower? How about extreme management issues at the top, and I mean all the way to the top (the CEO may actually bring down the ex-treasury secretary and maybe even the Fed Chairman). A trunk full of junk, surrounded by drama. It should be an interesting conference call today when they report, that is if anybody decides to ask the right questions.
As many of my subscribers and readers know, I have caught many companies on the short side as they imploded. One company that I did not get was American International Group. The reason it escaped me? I was too close to it. I have met Frank Tizzio (then president), Maurice Greenburg (then CEO and Chairman), and a several of their upper management to collaborate on deals, and was impressed with the way they ran their shop. Because of this, I didn't apply the same critical, skeptical eye that I used with the other prospects. Alas, because of such, I overlooked the inevitable, and in retrospect, the blatantly obvious.Every step of the way the banks have been trying to stick us with more and more losses as they find new ways to profit off of the government troughs.
What's The Goal?
Others have made this point in various ways, but if the goal is to bail out the banksters and keep the existing too big to fail financial order in place with the same cast of characters in charge, then all of this sounds like a cunning plan.
If the goal was really to get banks lending again they'd be funneling large sums of money to healthy (mostly smaller) financial institutions who actually made sensible choices over the last few years.Meanwhile a fire sale is going on:
Lenders have become so overwhelmed by the foreclosure crisis that they are starting to unload properties in bulk to investor groups at steep discounts.
Investors then flip the properties for a profit without necessarily improving the home.
For example, a unit of Citigroup, the troubled financial giant, sold a foreclosure in Temecula to an Arizona investment firm for $139,000 when comparable homes in the area were selling for $240,000 to $260,000.
The firm listed the home for $249,000, received multiple offers and the property has entered escrow, said Amber Schlieder, the real estate agent who handled the listing.Citigroup left a 100 grand on the table. This looks like a great way to abuse the taxpayer even more.
I want to know who they are all selling in bulk to.
Remember who else was buying up the mortgages in bulk?
So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.
Stanford L. Kurland, Countrywide's former president, and his team have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.
"It has been very successful - very strong," John Lawrence, the company's head of loan servicing, told Mr. Kurland one recent morning in a glass-walled boardroom here at PennyMac's spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.The Treasury has shown a willingness to recklessly toss all of our futures away to keep these "Too Big Failures" operating in their self-entitled comfort zone.
What incentive do the banks have to sell these properties for as much as they can when they can sell them in bulk at a loss to their buddies' companies (or even their own companies) so they can turn a profit on them and doing this knowing the failure bankers can ship off all of the bills for the losses to us? Think about it.
If Geithner were handing these trillions to the smaller more responsible bankers some of us little people would be able to buy these cheap houses...
But this way the elite get to keep all of the assets in their greedy hands and have us pay for their gambling addiction failures too. And then they will turn a profit on selling us these properties AGAIN.
“While some critics are distressed that Mr. Kurland and his team are back in business, the executives say that PennyMac’s operations serve as a model for how the government, working with banks, can help stabilize the housing market and lead the nation out of the recession. “It is very important to the entire team here to be part of a solution,” Mr. Kurland saidImportant for Whom? You, maybe, but not me.
I am thinking predatory lenders should already be in jail and that this is a model for more financial disaster for taxpayers. I smell smoke and all I see is a fire and a bunch of greedy arsonists standing around with their gasoline soaked hands in our pockets..
And, so far, the elite are achieving their goal of bailing out themselves with our money.
At this very moment Banks are making up books telling Wall Street how profitable they are but it is all a massive illusion as what they are really doing is hiding losses and managing to turn it into their own personal profits for their insider friends and even themselves. They are doing all of this using our tax dollars to create some kind of warped Capitalist Welfare Elitist society. And it is not like the some people in the financial world haven't noticed:From buhdydharma at dKos, some extra food for thought:
Hard Not To Call It EvilRead on...
According to people who should know, The Ruling Class is using our money....draining our money, the money we use to survive and feed our children and to actual produce things, to rescue the very structure...that allows them to BE The Ruling Class. The structures that enable them to Rule us by controlling credit, capital, and our pensions and IRA's and 401k's.
And our regulatory agencies and politicians. And so by extension our military. Which is then used in the service and interests of The Ruling Class and their Party of Business, the GOP.
These people, the Ruling Class, are the ones who got us into this financial armageddon. These are the same Ruling Class that took us to war in Iraq, after ignoring the warnings that an attack was coming.
They are the same people who made America into a nation that tortures people they KNOW to be innocent. They are the same people...if they even deserve the name...who are stopping any serious efforts to mitigate a Climate Crisis of incomprehensible scope.
They are the same people that so unprecedentedly had the Supreme Court decide Bush vs. Gore, so they could have Bush cut their taxes and deregulate the very same structures that we are now being called to give OUR money to prop up. Yes, the very same people who are directly responsible for everything that has gone wrong in our world, are the people who are now telling us....not asking us....telling us, that we have to bail them out. While as always, not telling us the whole story, not telling us what they are doing behind the scenes and behind our backs.
Is it time to say that this is truly economic warfare on the people of the world and start calling it the financial terrorism that it all really is?
Because until some of the real problems that lead to all of the other problems that everyone knows still exist are fixed... This is exactly what it is.
And fegining ignorance of it? Not gonna cut it when people called it what it was long before this current meltdown:
The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy and most shares are still "too expensive", legendary investor Warren Buffett has warned.
The world's second-richest man made the comments in his famous and plain-spoken "annual letter to shareholders", excerpts of which have been published by Fortune magazine.
The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk.
But Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system.
There are so many ways that financial tools have been developed to terrorize the people...
And this is all the rest of the people, the one's that are not the Noveaux Welfare Riche, have to show for it:
Something tells me we ain't seen nothing yet from these financial terrorists... Because we have all seen these Bushvilles growing more and more as things have gotten worse and worse and nobody has done a God-damned thing about them, either.
"They are tagging us because we are homeless," she said, staring at her orange wristband. "It feels like a concentration camp."We need to set out to document these atrocities in as much detail as we can. Are there any places like this near you:
Bushville, Ontario, California:
"Is a campground the solution to the problem of homelessness? The California City of Ontario thinks so."Bushville, Los Angeles, California:
"Tent cities have sprung up outside Los Angeles as people lose their homes in the mortgage crisis."
"Large, often confused, crowds formed ragged lines behind police barricades where officers handed out color-coded wristbands. Blue meant they were from Ontario and could remain. Orange indicated they had to provide more proof to avoid ejection, and white meant they had a week to leave.
Pattie Barnes, 47, who had her motor home towed away last week, shook with anger.
"They are tagging us because we are homeless," she said, staring at her orange wristband. "It feels like a concentration camp.""
Welcome to free market America:
"It feels like a concentration camp."
Bushville, Sacremento, California:
"Some 300 people call a tent city in Sacramento home, including Tracy Vaughan, who moved to the city with her husband six months ago.
Via the AP, No Job - No Home:
As many as 1200 homeless?
"Some nearby homeowners have reportedly complained about the tent cities, but Sacramento's new mayor, former NBA star Kevin Johnson, has suggested that the tent cities might provide a temporary solution to the lack of shelter. As many as 1,200 people may be living in these tent cities, according to the local ABC 7 News."
Bushville, Reno, Nevada:
"A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.
Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.
Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a "tent city" — an encampment of people who had nowhere else to go.
From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation."
Bushville, Santa Barbara, California:
"The relatively tony city of Santa Barbara has given over a parking lot to people who sleep in cars and vans."
Bushville, Fresno, California:
"authorities in Fresno are trying to manage several proliferating tent cities, including an encampment where people have made shelters out of scrap wood."
America the Beautiful:
3rd world shantytowns.
Bushville, Athens, Georgia:
"Wayne Hill packed up his meager belongings last week and moved his home deeper into the woods.Can you just imagine the horror of having to actually see the homeless?
Hill's red tent and neighboring homes had inched too close to the nearby highway, and police told him to move.
"We've asked them to move back off the road a little bit," Athens-Clarke police Maj. Carter Greene said. "It seemed they were encroaching on Lexington Road."
But Tent City limits slowly crept downhill, so now people look up from Lexington Road and a perimeter off-ramp to see campsites and junk piles."
Bushville, Seattle, Washington:
(Note: there are several - 5 or 6 - of them in Seattle)
"Activists point to the annual One Night Count as evidence that not enough shelter beds exist. During the count of the homeless in Seattle and other parts of King County on Jan. 25, volunteers counted 2,631 people sleeping in cars and trucks, doorways and parks and under highways, or walking around or riding buses to stay warm in freezing temperatures. When comparing similar areas counted a year ago, the number of homeless increased 15 percent.
An additional 2,515 people spent the night in emergency shelters, with 3,293 more in transitional housing, for a total of 8,439 homeless people."
Bushville, Nashville, Tennessee:
"To its credit, Nashville recognizes that there is a problem with the "system" and, as the community slowly works towards correcting these problems, understands that there is at least a temporary need for the existence of homeless encampments.
To its discredit, Nashville is currently engaged in dismantling Tent City, the largest (the population fluctuates wildly at times, but is consistently around 50) and oldest (in existence since the mid 1980s) homeless camp in the area, which is slated to close June 1, 2009; sooner if outreach workers are able to find housing for the remaining residents."
Bushville, Chatanooga, Tennessee:
"The demolition of Tent City left many of Chattanooga's homeless without a place to live.
But not so for one lucky man.
For the first time in six years Richard Waldrep has a home to call his own.
Waldrep has spent the last several years on the streets, for the last few months he called "Tent City" home.
But, now that home has been destroyed.
Due to safety concerns and liability issues Norfolk Southern Railroad bulldozed the property leaving Waldrep and almost 30 others to find another place to live. "
Bushville, St. Petersburg, Florida:
"Police officers with box cutters showed up where St. Pete's tent city residents had moved and set up. The cops slashed their tents to the ground as residents watched in shock. Now one homeless group is moving to label St. Petersburg as the 'meanest city in the nation.' Video by Tina May."
The police destroying the few meager belongings left to these homeless people. Is that what the mandate of police officers is supposed to include today? What happened to serve and protect?
Do you know of any of these tent cities or Bushvilles near you that the media has yet to disclose of? If you do... Links, photos, and videos need to be added to our own archives in order to document the widespread disaster that is a very result of this failed Bush economy and the free-market run amok.
Arthur Delaney at the HuffPo is attempting to document these stories. We should all be doing our part to identify these places:
There are reports of tent cities popping up across the country as unemployment rises in a worsening economy. The biggest and highest-profile shantytown is in Sacramento, where hundreds of newly-homeless tent residents are cooking soup in old coffee cans.
We want to know where else this is happening.
HuffPost readers: Is there a tent city near you? Have you noticed a newly-formed community of people living together in improvised housing in a public space? Email us! Send any information you've got (or pictures) to firstname.lastname@example.org.
Sacramento's KCRA reported this week that city officials plan to shut the tent city down:
While this is a good idea - documenting where they exist is really only Step 2 because it is an idea without a real humane purpose.
Rather than just documenting these stories, perhaps we should try to solve the problems? In some of these Bushvilles there are already people working to help fix the problems as both short term and long term solutions are needed.
In Portland, Oregon, many in the community are providing the elbow grease to make their tent city, Dignity Village, more livable for the short term and more effective at helping the people get back to work:
Many more community's across the country, have looked to us for answers to help the homeless population that is growing bigger each year. When People come out to visit us , they are amazed at what we have set up and how we help the 50 to 60 homeless people that live here at any given time, a stepping stone effect that gives each person living here a chance to help themselves regain a new start to gain main stream living again.
All of this comes from donations from viewers and visitors that help to support our goals.
Dignity Village has been working this way since 2001 and long before Bushvilles started popping up. I imagine that they are probably experiencing a huge surge in people needing their help as the economy has collapsed over the last few months.
The right did not solve the problem of Hoovervilles, but the left did with the bold and visionary leadership of FDR. Many on the right would like nothing more than to ignore Bushvilles because it exposes the reality of their political ideology taken to extremes.
We can and will solve the problem of Bushvilles.
I am no community organizer, but I imagine that we need to take these steps first:
1. Identify the major problem - done
2. Identify where it exists - ?
3. Identify problems that are more local to each area - ?
4. Get to work solving the short term problems on a local area needs basis - ?
5. Get to work solving the long term problems on a local area needs basis - ?
Are any of you up to a real challenge?
Are any of you interested in beginning Step 2 and starting to document as many of these tent cities and Bushvilles as we can? Searching for links, getting out in the streets and photographing and videoing these places AND, more importantly, documenting the problems they face so we can try to find real solutions would be no small undertaking.
Not fixing the problems, and not fixing what caused them all.