Category Archives: Banking industry

Another Nightmare, “Zombie Title” Shows How Servicer Refusal to Foreclose Hurts Stressed Homeowners and Communities

One of the popular conservative memes is to fulminate that lots of Americans have been living “rent free” in homes slotted for foreclosure, taking advantage of the fact that court dockets are crowded. An important Reuters piece documents the flip side of this picture: what happens when the servicer starts foreclosure but keeps the property in limbo-land, and the homeowner has decamped, on the mistaken assumption that foreclosure was imminent? The Reuters tag phrase for this syndrome, “zombie title” doesn’t begin to do justice to the horrorshow that borrowers experience.

Schadenfreude Alert: With or Without AIG’s Help, Hank Greenberg Plans to Torture Treasury and Geithner

Never underestimate the greed of a billionaire. But I have to say separately that I will thoroughly enjoy the pigfight between former AIG chief Hank Greenberg’s C.V. Starr (now the biggest shareholder in AIG) versus the Federal government over the rescue of AIG. Any cost and embarrassment that the Administration suffers will be the direct result of the Bush-Obama policies of being concerned only about saving financial players rather than meting out any punishments, and for being incompetent negotiators.

$8.5 Billion Foreclosure Fraud Settlement: Yet Another Loss for Homeowners Touted as a Victory

It’s bad enough to see long suffering homeowners take it once again in the chin, thanks to the way the bank regulators prostrate themselves before their supposed charges. It adds insult to injury to see this type of ritualized sellout yet again presented as a boon for consumers.

The latest case study is the $8.5 billion foreclosure fraud settlement announced today.

Ian Fraser: Corruption allegations, major fraud inquiries, links to pornographic magazines … and a luxury yacht. Welcome to the world of banking

Police are (still) poised to press charges against several HBOS bankers and consultants after a two-year investigation into large-scale fraud, money laundering and corruption involving the Edinburgh-based bank.

US Suit Forces Closure of Swiss Bank, or More Accurately, What Little Was Left of It

Now it is narrowly true that the filing of a criminal suit by US prosecutors did force the closure of a bank. But as one might suspect, there is vastly less here than meets the eye. And that isn’t simply because the institution in question was a Swiss bank I am pretty certain you never heard of.

IMF Admits More Mistakes

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

I’ve commented numerous times over the the last 3 years that I considered the IMF’s position on Europe dangerously misguided as I felt it was based more on ideology than evidential analysis (see more here). The results have been so bad that the IMF is being forced to admit to the errors of its ways.

OCC Foreclosure Reviewer: “Independent” Reviews Were Controlled by Banks, Which Suppressed Any Findings of Harm to Foreclosed Homeowners

You simply must read this post if you care at all about the rule of law or can stand to see the gory mechanisms by which “regulation” has now become a fig leaf for criminal corporate conduct.

Latvia’s Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?

By Jeffrey Sommers and Michael Hudson. Michael Hudson was Professor of Economics and Director of Research at the Riga Graduate School of Law. He is a research professor of Economics at University of Missouri, Kansas City. His latest book is Finance Capitalism and Its Discontents. Jeffrey Sommers is visiting faculty at the Stockholm School of Economics in Riga. He is an Associate Professor of Political Economy & Public Policy at the University of Wisconsin – Milwaukee. The authors have advised Latvian politicians and government officials up to the Prime Minister level. Both have published extensively in the Latvian press.

A generation ago the Chicago Boys and their financial supporters applauded General Pinochet’s anti-labor Chile as a success story, thanks mainly to its transformation of their Social Security into Employee Stock Ownership Plans (ESOPs) that almost universally were looted by the employer grupos by the end of the 1970s.

Today’s most highly celebrated anti-labor success story is Latvia. Latvia is portrayed as the country where labor did not fight back, but simply emigrated politely and quietly. Can this really be a model for the United States or Europe’s remaining social democracies? Or is it simply a cruel experiment that cannot readily be emulated in larger countries un-traumatized by Soviet era memories of occupation?

Pending Foreclosure Fraud Settlement Achieves New Level of Abject Regulatory Failure

After too many years to count of regulatory failure and limp-wristed reforms, it’s hard to be surprised. Nevertheless, I hope to convince you that a yet another mortgage settlement, leaked on New Year’s Eve when hopefully no one would notice, achieves the difficult task of reaching a new level of dereliction of duty.

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part III– Why Today’s Fiscal Squeeze Imposes Needless Austerity

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”

The financial sector promises that privatizing roads and ports, water and sewer systems, bus and railroad lines (on credit, of course) is more efficient and will lower the prices charged for their services. The reality is that the new buyers put up rent-extracting tollbooths on the infrastructure being sold. Their break-even costs include the high salaries and bonuses they pay themselves, as well as interest and dividends to their creditors and backers, spending on stock buy-backs and political lobbying.

Public borrowing creates a dependency that shifts economic planning to Wall Street and other financial centers. When voters resist, it is time to replace democracy with oligarchy.

Administration Planning to Use Fannie and Freddie to Provide More Stealth Stimulus

The Obama Administration is planning to launch yet another mortgage refi program, this one targeting subprime borrowers who are current on their loans but underwater, extending the government support of the mortgage market to yet another borrower group.

Richard Alford: The Fed’s Orwellian Claims About its Transparency

By Richard Alford, a former New York Fed economist. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side.

The US mainstream media (MSM) found a lot to like when the FOMC announced that its current highly accommodative monetary policy stance will continue unless certain “threshold levels” for unemployment and inflation are reached. While the MSM was not uniform in its praise, it applauded what it saw as the increased transparency in the design and execution of monetary policy. In comparison, the response of the market and the foreign press was muted, and comments by financial and economic bloggers were mixed. Juxtaposing a Binyamin Appelbaum article in the New York Times (serving as a stand in for MSM), the transcript of the Bernanke press conference, and a working history of monetary policy, it is clear that the enthusiasm of many in the MSM for increased clarity is misplaced. This in turn has less than flattering implications for the MSM, the Fed and its communication strategy.

Wolf Richter: The EU Bailout Oligarchy Issues A Report About Itself

By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.

On Friday before Christmas when nobody was paying attention, when people were elbowing their way through department stores or heading out for vacation, the European Commission issued its report on bank bailouts in the European Union—a dry document with mind-boggling numbers that left out the most important fact.