Yearly Archives: 2012

Mortgage Settlement Wrangling Continues, Banks Balking at Schneiderman MERS Suit

The Administration, through the nominal head of the bank settlement negotiations, Iowa attorney general Tom Miller, has moved its final deadline for a deal yet again, this time to Thursday.

One event of the day was a non-event. New York AG Eric Schneiderman has scheduled a conference call to the media on the settlement for 6 PM, then postponed it indefinitely 10 minutes before the scheduled time. One can presume that whatever he had intended to say was rendered moot by events…but what events? The only thing one can infer is that he is presumably still negotiating. Per Reuters (hat tip Lambert):

Marshall Auerback: The Elephant in the Room is Spain, Not Italy

By Marshall Auerback, a portfolio strategist and hedge fund manager. Cross posted from New Economic Perspectives

Another day andthe markets remain fixated on whether Greece comes to a “voluntary” arrangement with its creditors. The key word is“voluntary” because the myth of “voluntary compliance has to be sustained so that those deadly credit default swaps avoid being triggered.

But let’s face it: Greece is a pimple. If the rest of the euro zone could cut itlose with a minimum of systemic risk, Athens would have long gone the way of Troy. The real issue is whether the credit default swaps trigger such a huge mess with the counterparties that it creates renewed systemic stress which more than offsets the benefits to the holders of the CDSs.

The more interesting question is: suppose Greece finally does get a deal?

Philip Pilkington: What Has Bill Gross Been Reading?

By Philip Pilkington, a writer and journalist based in Dublin, Ireland

Question: what on earth has Bill Gross been reading? Gross has long been an acolyte of Hyman Minsky, or so he says. But his recent piece in the Financial Times entitled ‘Zero-Based Money Risks Trapping Recovery’ has a lot of people scratching their noodles.

Links 2/7/12

Guest Post: Independent Report Contradicts Western Portrait of Syria

Arab League Report Shows that Syria Has Been Mischaracterized

Mirabile Dictu! Missouri Attorney General Files Criminal Lawsuit on Robosigning

“Linda Greene” has become a household word to those on the foreclosure fraud beat. And it turns out, for once, that the work of diligent investigators such as the foreclosure attorneys around Max Gardner, and investigators like Lynn Szymoniak and Lisa Epstein led to press coverage which in turn spurred prosecutors to act.

What is striking about the indictment by a Missouri grand jury is that the Missouri AG Chris Koster has decided to challenge the banks’ party line that robosigning and related abuses were mere “paperwork problems.” He’s called robosiging what it is: forgery.

Is the Mortgage Settlement Deal Starting to Unravel? (Updated)

The Administration had thrown its weight behind getting the mortgage settlement deal done shortly after the State of the Union address. Eric Schneiderman joining a Federal task force that seemed unlikely to accomplish much, given its staffing and the history of Federal investigations, seemed to secure it getting done, as Schneiderman, the de facto leader of the opposition, moved first into a neutral stance and then rejoined the talks over the weekend.

The deadline had been first set as February 6, then moved to the 3rd, then late last week moved back to its original date. There was no announcement of a pact today, which in and of itself would not necessarily mean that things might be going pear-shaped. After all, the participants could be wrangling over fine points.

A fresh Reuters report indicates that the Administration messaging and cheerleading (witness the Shaun Donovan interview reported by Dave Dayen and Shahien Nasiripour) may have been ahead of events.

Daniel Alpert: Tinkerbell Economics – The Confidence Fairy, Pixie Dust and a Sleeping Dragon

By Daniel Alpert, the founding Managing Partner of Westwood Capital. Cross posted from EconoMonitor

While we may be hours away from a partial (and certainly a stopgap) agreement in the talks among the Greek government, the troika and private sector creditors, it is doubtful that a deal will emerge in a fully constructed fashion that will survive its application in the real economy.

It is likely that the only common view amongst participants in the various talks is a desire to try to avoid a disorderly default. Beyond that there is a severe disconnect fostered by parallel realities that seem unable to intersect. Accordingly, a deal that can hold up both in the streets of Greece and in the markets is both illusive and unlikely. Here’s why I think so.

Recently I have had opportunities to meet with and question senior members of the economics establishment within the German government and the broader German intelligentsia. Our meetings were held under Chatham House rules so I can’t name names, but – after several meetings with policy delegations from Germany over the past 60 days – I am prepared to sum up what appears to be the pretty-universally-held German policy position as follows (my apologies if the below evidences some degree of frustration – but these encounters leave me quite chagrined):

Links 2/6/12

More on the Role of Second Liens and the Mortgage Settlement as Stealth Bank Bailout

Readers who missed the post over the weekend entitled “Schneiderman MERS Suit and HUD’s Donovan Remarks Confirm That Mortgage “Settlement” is a Stealth Bank Bailout” are advised to read it first, since it provides important background and context for this piece, which clarifies some issues I skipped over.

Philip Pilkington: Facebook – The Second Birth of a Mighty Titan or the Withering of a Weary Giant?

By Philip Pilkington, a writer and journalist based in Dublin, Ireland

Over the past few days Facebook has once again been getting an awful lot of attention. The Facebook company, of course, loves the attention. After all, Facebook’s business model is almost entirely built upon the amount of attention they can garner for themselves.

Quelle Surprise! New York and California Attorneys General Look Ready to Sign on to Mortgage Settlement

The New York Times reports that two attorneys general of states regarded as important for the Obama Administration to declare the mortgage settlement a success have rejoined the negotiations, which says they are likely to sign the pact.

Kamala Harris, the California AG, was widely seen as “political” and therefore was not seen as a solid holdout. I remain disappointed by the conduct of our attorney general Eric Schneiderman, who is also now participating in the talks. His decision to join a Federal task force undermined the opposition to the settlement and looks to have cleared the way for the Administration to craft a win on this deal (note it is still possible it will not get done, but the odds were low as of last week and appear to be sinking further).