Yearly Archives: 2011

Matt Stoller: Nevada Attorney General Catherine Cortez Masto Cracks Open the Financial Crisis

By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller.

Learn the name Catherine Cortez Masto, because she just took a big leap in front of every public servant in the country in terms of restoring faith in government. As Nevada AG, she actually indicted someone for blowing up our housing system. Specifically, she handed down 606 counts of felony or gross misdemeanor indictments on robo-signing against two employees of big bank subcontractor Lender Processing Services.

It’s pretty clear from the indictment that these are mid-level employees, one level up supervisors of fraud rather than top CEOs. And yet, even if this were as far as it goes, it would still be a big deal. These would be the only charges served involving the housing crisis and its link with the structurally corrupt securitization chain so far. By itself, these indictments signify that the fraudulent foreclosure game is over for the big mortgage servicers in Nevada, which is the center of the foreclosure epidemic. It says the rule of law matters, in at least one corner of the country.

Links 11/17/11

Michael Olenick: Don’t Buy Mortgage Industry Hype on Mortgage Modifications

By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha)

The Mortgage Bankers Association (MBA) boasts that its members have modified over five million mortgages over the past few years. As a data analyst focused on patterns of foreclosure fraud, I’ve analyzed tens of millions of pieces of information. I was willing to take the MBA’s claims at face value but, years ago, came to the conclusion that the MBA and their members have a severe credibility gap.

Remember, the reason for advocating mods is that, properly structured, they are a win-win: investors take a lower loss than they would in a foreclosure, the borrower stays in his house, and another real-estate-price-depressing sale is averted.

But this “everyone comes out ahead” is not what I’ve seen. I’ve been able to check modifications, since they are recorded in public records. It quickly became apparent that while theses modifications are, at best, worthless, and more often than not border on an extension of the same predatory practices that resulted in the original mortgages.

These modifications are to mortgages as vultures are to predators, another opportunity to take one last bite out of people trying to keep their homes. Banks are “modifying” lots of loans, but to terms even more favorable to banks.

Mark Ames: Austerity & Fascism In Greece – The Real 1% Doctrine

By Mark Ames, the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine. Cross posted from The eXiled

See the guy in the photo there, dangling an ax from his left hand? That’s Greece’s new “Minister of Infrastructure, Transport and Networks” Makis Voridis captured back in the 1980s, when he led a fascist student group called “Student Alternative” at the University of Athens law school. It’s 1985, and Minister Voridis, dressed like some Kajagoogoo Nazi, is caught on camera patrolling the campus with his fellow fascists, hunting for suspected leftist students to bash. Voridis was booted out of law school that year, and sued by Greece’s National Association of Students for taking part in violent attacks on non-fascist law students.

Nevada Attorney General Masto Files 606 Count Criminal Indictment Against Two Title Officers (Updated: Lender Processing Services Employees)

The Nevada attorney general Catherine Cortez Masto has just filed a 606 count indictment against two title officers in a single county, Clark County, for supervising the filing of tens of thousands of fraudulent documents in a robo-signing scheme.

On the one hand, this indictment is not as gratifying, say, as busting Angelo Mozilo. On the other hand, if low level supervisors in bank frauds face the risk of serving time, you are going to find a ton fewer people willing to take that job. Those higher up on the food chain might also have to be a lot more careful and pay the people involved more money, which in turn undermines the basic logic of these abuses, which is cost savings.

Italian default scenarios

Cross-posted from Credit Writedowns The most important debate of our lifetimes is now ongoing. For many, the answer will be existential. First, the question: Should the ECB “write the check’ for the euro area national governments? In thinking about the answer to this all-important question, I prefer to shift the focus by changing the verb […]

Links 11/16/11

Philip Pilkington: Debunking Economics – An Interview with Steve Keen – Part 1

Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. The second expanded edition of his popular book Debunking Economics is available now.

Interview conducted by Philip Pilkington, a journalist and writer based in Dublin, Ireland.

Philip Pilkington: One cannot help but be struck by the reaction of the economics profession to the recent financial crisis. In the first edition of your book, Debunking Economics, you warned that a crash was probably coming – and in this you weren’t the only one. And yet now, post-crash, neoclassical economists have simply buried their heads in the sand and pretended that rational criticism of their theories simply doesn’t exist. The crash discredits almost all these theories and yet they continue to insist that they remain valid.

They remind me of Christian fundamentalists rabidly arguing against evolution in face of what appears to be insurmountable evidence against their assertions. Could you talk a little about this? How can these people be so deluded? Why won’t they listen to reason?

Satyajit Das: In the Matter of Lehman Brothers – Part 2: Well Structured Messes

By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)

In this two part paper, the issues regarding settlement of complex derivatives arrangement revealed by the failure of Lehman Brothers is outlined. Many of the failures affect new regulatory proposals such as the rapid resolution regimes under consideration. The First Part dealt with terminating and settling derivative contracts. The Second Part deals with effects of the bankruptcy on structured products and collateral.

Ex Libris: About those 5,554 books in the #OWS library

By lambert strether of Corrente.

UPDATE Greg Mitchell (via):

11:20 Shocking, or not so shocking, Bloomberg lies: You’ll recall yesterday his office refuted reports that 5000 books from People’s Library at Zuccotti trashed. They said taken uptown to garage and even posted photo of some books. Today librarians went up to claim and….surprise? Find only small number of books, and most of them destroyed. Also found promised laptops–also wrecked. See report and many photos here.

Yes, there were 5,554; here’s the catalog. The eclectic, donated collection, originally cared for by Brooklyn librarian Betsy Fagin, was housed in a tent donated by singer/writer Patti Smith. I say “there were 5,554″ because this morning New York Mayor Michael Bloomberg had the library bulldozed and the books hauled away in trash trucks, as part of his bungled invasion of Zuccotti Park. What’s Bloomberg’s problem with books, anyhow? Does he think trashing a library is going to help him buy his way to a third-party presidential run?* Is “destroying things never felt so good” really the platform America’s Mayor of the 1% wants to run on? Wait, don’t answer that.

Bill Black: Best Satire of Faux Austrian Economics Ever

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

Someone has created a fabulous, richly detailed parody of Austrian economics. They call it The Daily Bell and claim that its perspective reflects Austrian economics. In reality, it satirizes faux Austrian economics’ sycophancy toward elite white-collar criminals.

I was delighted to learn that they used my recent column: The Virgin Crisis: Systematically Ignoring Fraud as a Systemic Risk as the vehicle for their send-up.