Yearly Archives: 2010

Links 12/22/10

African elephant is two species, researchers say BBC (hat tip reader John M)

Ding-Ding-Ding! Electric Cars Likely To Be Made Noisier By Law GreenCarReports

On the Gutting of Financial Services Reform

Bloomberg has a well done but disheartening account of the watering-down-to-meaninglessness of financial services industry reform, with the case example being Basel III. Basel III is the latest iteration of capital standards for banks, which is hoped to be implemented more or less true to form by various national bank regulators. Richard Smith has been ably covering the substance of this beat (see here and here for earlier posts) and the details are indeed more that a bit convoluted.

However, Basel III has been touted in the US as the fix for the shortcomings in bank reforms such as Dodd Frank. As Treasury argues, if banks have more than enough capital, you have a lot of room for error on other fronts. But Basel III preserves too many bad ideas of its predecessor, Basel II, such as risk-weightings for various types of assets that lend themselves to gaming; along with risk weighting, a preservation of the problematic role of unreformed rating agencies; allowing big banks to use their own idiosyncratic and often widely varying risk metrics; an obsession with the asset side of the balance sheet, and not enough to the way that liabilities can also blow out when asset prices are under stress.

Bank Break Ins Leading to Litigation

Even though banks piously insist that every one of their foreclosure actions is fully justified, evidence in the court system continues to prove that claim to be false. We pointed out this sorry development in October, that of banks entering and changing the locks on homes they had not foreclosed upon. This sorry trend continues, and some wronged homeowners are suing.

Please Visit StopServicerScams.com to Stop Servicer Fraud

To further the effort to curb servicer abuses, please visit the website, StopServicerScams, and sign the petition.

Guest Post: Assange Confirms that Bank of America Is the Target of Bank Leak

→ Washington’s Blog There has been widespread speculation that WikiLeaks would target Bank of America. This has now been confirmed. Specifically, Agence Press France is reporting: Assange also confirmed that WikiLeaks was holding a vast amount of material about Bank of America which it intends to release early next year.

Fed Extends Currency Swap Lines Over Eurobank Dollar Funding Concerns

The party line is everything is fine in bank land….even Eurobank land. But some recent developments suggest otherwise.

The business news on Europe has pretty much daily updates on the unfolding and linked sovereign debt/ bank solvency crisis. The officialdom insists this looming problem can be resolved but most observers think it can’t be in the absence of a fiscal union, which is a political bridge too far right now.

In a not-widely-noticed replay of pre-crisis conditions, the cost of swapping euros into dollars to the same high level observed last May, when sovereign crisis fears were at a peak.

Another nasty surprise from Ireland’s Anglo and AIB, via the EC

Tucked away in the EC’s press release on aid for Irish banks, we find this little gem: Anglo Irish Bank will furthermore receive a guarantee covering certain off-balance sheet liabilities (derivatives, clearing transactions and transactional arrangements) that will ensure that Anglo Irish Bank can continue its daily activities as a going concern. There’s nothing here […]

Links 12/21/10

Hardships of a Nation Push Horses Out to Die New York Times The Doctor’s Dog Will See You Now Wall Street Journal Microchips now used in everything from toilets to tombstones SiliconValley Cold Burn George Monbiot Why it’s natural for girls to play with dolls and boys to love guns Daily Mail (hat tip reader […]

Open Letter to Bank Regulators on Mortgage Securitization and Servicing Practices

Today, a letter urging fundamental changes in the mortgage securitization markets, signed by 50 individuals with expertise in this arena, was sent to the Chairmen of the FDIC, the Fed, and the SEC, and the Secretary of the Treasury and the Comptroller of the Currency.

Despite widespread evidence of failings, abuses, and outright fraud in the securitization process, reform measures have been halting at best.

Major Servicers Face Possible Suspension of Foreclosures in New Jersey Over Robo Signing

We had questioned the cheery assumption of the major banks regarding their robo signing abuses, namely, that they could simply resubmit their improper court documents and proceed as if nothing had happened.

Improper affidavits are a fraud on the court, and robo signing is the mass, deliberate production of fraudulent submissions. Some jurisdictions, like New York and Florida, are requiring that attorneys certify the accuracy of documents presented in foreclosure. New Jersey is going one step further by having a Supreme Court justice demand an appearance by six major servicers to explain why their foreclosure operations should not be suspended. I suspect the sort of sanctimonious explanations we’ve seen in Congressional hearings, “We act to correct mistakes as soon as they come to our attention,” would not go over well.

Fannie Increases Restrictions on Lender Processing Services, Other Technology Middlemen; LPS Document Shows Degree of Influence Over Law Firms

We’ve discussed Lender Processing Services, which serves as an outsourcer to the mortgage servicing industry, primarily via a software platform, as well as other companies with similar business models.

One of LPS’s major activities is acting as a middleman in the foreclosure process, reportedly hiring and firing foreclosure mills in the name of servicers. LPS is under fire in two national class action lawsuits for alleged impermissible fee splitting with foreclosure firms. A recent story in Reuters confirmed details we supplied in late October as to how LPS works with foreclosure mills, in particular, the very tight control it exercises over them.

Fannie Mae issued a directive today which effectively eliminates the payment of certain types of fees to firms like LPS.

Links 12/20/10

Fat New Zealanders failing to fit coffins Telegraph (hat tip reader Martin W) Space laser spies for woodpeckers BBC Mutant worms defy aging theory CBC News Three Billion-Year-Old Genomic Fossils Deciphered ScienceDaily (hat tip reader John M) US Army smartphone war draws closer Mobile.Blorge (hat tip reader Sugar Hush) Blaschko’s Lines ScienceBlogs (hat tip Richard […]

Is the Ireland Bailout About to Become Bear Redux?

Not being an expert in either the Lisbon Treaty or the rules governing the ECB, I’m restricted in my ability to interpret an article in the Financial Times and the underlying position paper at the ECB on the legality of the Irish bailout. The Irish finance minister asked for a reading on the “draft law”, which is the Credit Institutions (Stabilisation) Bill 2010. There is a certain amount of grumpy harrumphing in the ECB response, namely, that it should have been consulted earlier and its preliminary reading has been made in more haste than it would like.

Regardless, it does not take a lot of expertise to get the drift of this gist:

Joseph Mason on the Myth of Good Servicers

By Thomas Adams, an attorney and former monoline executive, and Yves Smith Joseph Mason, the Hermann Moyse, Jr./Louisiana Bankers Association Professor of Finance, Louisiana State University, has a post up at Housing Wire that not only struck both of us as more than a tad off beam, but even elicited critical e-mails from real estate […]