Bill Black: The U.S. Attorney Who Prosecutes JP Morgan Will Be Its First Witness
The lead investigator in the Federal prosecution against JP Morgan has said he doesn’t think it makes sense for banks to have made bad loans.
Read more...Category Archives: Real estate
Markets Enter Blowoff
You know something is going wrong when the heads of the largest fund manager in the world and the largest bond management firm simultanously scream ”bubble”.
Read more...We Discuss the JP Morgan “Settlement” on Democracy Now
I was glad to get the chance to discuss the misnamed JP Morgan settlement on Democracy Now yesterday. It’s misnamed because it’s not a single settlement, but a series of settlements, mainly if not entirely FHFA and state actions, bundled together, plus fines. Plus as you will see soon that’s far from the only way it’s been misreported!
Read more...Gretchen Morgenson on Bill Moyers: Ignore Those Crocodile Tears for JP Morgan
Yves here. Gretchen Morgenson gives an accessible presentation of why no one should feel sorry for the fact that JP Morgan is set to pay a roughly $13 billion settlement of a raft of mortgage-related liability. And she also dispatches the myth that the Department of Justice took a tough stance.
Read more...Bill Black: The New York Times Publishes the Most Ironic Sentence of the Crisis
Yves here. I enjoyed this piece by Bill Black because 1. Anyone who tries to pretend the Administration is serious about prosecuting bank-related fraud needs to be named and shamed and 2. I like the device of using a single sentence as the basis for a post.
Read more...Mirabile Dictu! Bank of America Found Guilty of Fraud for “Hustle” Mortgage Lending Program
Don’t get too excited.
Read more...The Ridiculous “Jamie Dimon as Victim” Meme on the Pending JP Morgan Mortgage Settlement
Nothing like having a credulous, leak-dependent media to carry your messages.
Read more...Bill Black: Arnold Kling’s Cunning Hairdresser Theory of the Financial Crisis
Yves here. I have to confess that I love this title. It serves as a reminder that the meme that lenders in the crisis were somehow victimized by borrowers is a lame defense of rank incompetence or worse. The basic rule of lending is that all you have is downside from a credit perspective. The borrower is never going to perform better than the terms of the agreement, and he may well do worse. Any competent lender knows that borrowers can be overly optimistic, naive, unlucky, or downright crooked. Lenders therefore need to take prudent measures to protect themselves from these well-known borrower foibles, the most important being not lending to obvious bad risks, and adding enough margin to your cost of borrowing to cover debtor bad luck and your own miscalculation. So to have a huge explosion of borrower defaults, including a meaningful swathe of subprime borrowers defaulting in the first 90 days, is proof not of massive borrower chicanery, but massive lender incompetence or corruption (as in presuming they could dump the dodgy loan on the next fool in the securitization pipeline).
Read more...Ilargi: Gordon Gecko Moved To London To Finish Where He Left Off
Last week I saw a headline in the Daily Telegraph that got me thinking. It encapsulates a lot of what poses as philosophy in our world today, as a valid way of thinking and a relevant approach to all the crises we live through simultaneously at the moment. One which, when you look longer and closer, appears at least at first glance to lack all philosophical value – since it doesn’t actually weigh any pros and cons -, and turns out to be a rehash of a hodge-podge of the very failed old theories that have led us into our crises.
Read more...How the Foreclosure Crisis Made the Rich Even Richer
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It’s a welcome departure to see Adam Davidson’s weekly column in the New York Times, which usually puts a happy face on how the 1% are winning the class war in America, have a guest writer look at the other side of the story.
Read more...David Dayen: Mortgage Settlement Monitor Lets Servicers Steal From Customers for Two Years Before Stepping In With Toothless Metrics
By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen Joseph Smith, the National Mortgage Settlement Oversight Monitor, created four additional servicing metrics on Wednesday, in what has to be seen as an admission of what we’ve known for a good while – that the […]
Read more...Why the US Mortgage Market Will Remain Heavily Dependent on Government Support (Updated)
In Senate Banking Committee testimony today, Georgetown law professor Adam Levitin explains why the private label (non-government guaranteed) mortgage market is a textbook case of what Nobel prize winning economist George Akerloff called a “market for lemons”.
Read more...So Why is Dimon Getting to Plead His Case for JP Morgan (and Maybe Himself) Directly with Holder?
I got this e-mail from a law school professor this evening:
Read more...wtf is with Eric Holder personally meeting with Jaimie Dimon? Since when do other targets of investigations get such access and solicitude?
Senator Diane Feinstein’s Husband Selling Post Offices to Cronies on the Cheap
To quote famed short seller David Einhorn: “No matter how bad you think it is, it’s worse.” On the “corruption among what passes for our elites” front, this story about self-dealing in the privatization of the Postal Service gives an indication of how bad things really are.
Read more...When Too Much Housing is Bad for Our Health
Yves here. It’s intriguing that “our economic model is based too much on the housing market” is becoming a meme a mere six years after housing bubbles in most advanced economics were a major driver of the global financial crisis.
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