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POPSGoldman Sucks’ new role: Taking Your Homes The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman’s then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003. Unable to identify a lender, the couple could neither capitalize on a mortgage hardship provision that would allow them to defer some payments, nor on a state law enabling them to offset their debt against separate, investment-related claims against Goldman. In July, the Beckers won a David-and-Goliath struggle when Goldman subsidiary MTGLQ Investors dropped its bid to seize their house. By then, the college-educated couple had been reduced to shopping for canned goods at flea markets and selling used ceramic glass. Theirs is an infrequent happy ending among the hundreds of cases...
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POPSACORN foresaw the foreclosure crisis in 2001
More: Moreover, Oakland's law would have gone much farther than requiring that borrowers could afford loans. In 2001, ACORN officials already recognized that the driving force behind the subprime lending was the ability of brokers to chop up risky mortgages, repackage them with good loans as "securities," and sell them to other banks on a largely unregulated market. When homeowners who couldn't afford their loans later defaulted on them, these securities became widely known as "toxic assets" and were the primary cause of the world financial crisis… But if Oakland's law had been widely adopted, the bailout likely would have been unnecessary and the worst economic downturn since the Great Depression probably averted. Why? Because the city's ordinance not only would have held mortgage brokers liable for making bad loans, but also every other bank that later bought pieces of those bad loans after they were securitized. In short, the market for subprime loans would have dried up.
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POPSBreaking: ACORN Bombshell #4 Due From BigGovernment Tomorrow 
ACORN and Obama at the Heart of the Mortgage Meltdown Starting in the nineties, a young attorney named Barack Obama began working with ACORN to promote mortgages for those who could not afford them. At the time, ACORN consisted of community agitators, who falsely accused banks of "redlining" (failing to offer mortgages to the urban poor). These groups would pack bank lobbies and harass customers in order to intimidate the institutions and force the government to lower underwriting standards. A former community agitator and ACORN attorney named Barack Obama sued Citibank in 1994, just one of hundreds of nuisance lawsuits filed by ACORN and its affiliates to loosen mortgage underwriting standards. The inevitable result is still unfolding. But this much is clear: ACORN, its attorneys and its sycophants in Congress unleashed a catastrophic meltdown on America. It used government power to to force financial institutions to underwrite completely unqualified applicants . .
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POPSThe destruction of the black middle class More: Yet in the depths of this African American depression, some commentators, black as well as white, are still obsessing about the supposed cultural deficiencies of the black community. In a December op-ed in the Washington Post, Kay Hymowitz blamed black economic woes on the fact that 70 percent of black children are born to single mothers, not noticing that the white two-parent family has actually declined at a faster rate than the black two-parent family. The share of black children living in a single parent home increased by 155 percent between 1960 to 2006, while the share of white children living in single parent homes increased by a staggering 229 percent. Just last month on NPR, commentator Juan Williams dismissed the NAACP…The fact that there is an ongoing recession disproportionately affecting the African American middle class – and brought on by Wall Street greed rather than "ghetto" values – seems to have eluded him.
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POPS12 Steps to Economic Meltdown - Nouriel Roubini
Seventh, the banks losses on their portfolio of leveraged loans are already large and growing. The ability of financial institutions to syndicate and securitize their leveraged loans - a good chunk of which were issued to finance very risky and reckless LBOs - is now at serious risk. Eighth, once a severe recession is underway a massive wave of corporate defaults will take place. Ninth, the "shadow banking system" or more precisely the "shadow financial system" (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that - like banks - borrow short and in liquid forms and lend or invest long in more illiquid assets. Tenth, stock markets in the US and abroad will start pricing a severe US recession Eleventh, the worsening credit crunch will lead to a dry-up of liquidity in a variety of financial markets, including otherwise very liquid derivatives markets.
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POPSWhat will cause the next US financial crisis! Repos and not subprime mortgages caused the present financial crisis. The top three banks in the world by market capitalization are now; 1) Industrial and Commercial Bank of China 2) China Construction Bank 3) Bank of China Citibank and Bank of America are not even on the list of the top twenty.
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POPSMadoff’s conviction is no example of American justice More. Bernie should really become is a pin up criminal for incompetence, who was allowed to escape for decades by incompetent regulation: both of the traditional black letter legal type and self-regulation. Bernie fooled all the checks and balances and became head of NADAQ. His auditing firm was a small one and a half person operation in suburban New York: the auditing groups and other regulators let that one go
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POPS25 People to Blame for the Financial Crisis
Rebubbacans and Ayn Rand disciples abound. Kathleen Corbet Corbet ran the largest agency, Standard & Poor's, during much of this decade, though the other two major players, Moody's and Fitch, played by similar rules. By slapping AAA seals of approval on large portions of even the riskiest pools of loans, rating agencies helped lure investors into loading on collateralized debt obligations (CDOs) that are now unsellable. Dick Fuld steered Lehman deep into the business of subprime mortgages Lehman even made its own subprime loans. The firm took all those loans, whipped them into bonds and passed on to investors billions of dollars of what is now toxic debt. Marion and Herb Sandler In the early 1980s, became the first to sell a tricky home loan called the option ARM. And they pushed the mortgage, which offered several ways to back-load your loan and thereby reduce your early payments, over the next two decades. pocketed $2.3 billion when they sold their bank to Wac
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POPSBubble, Bubble, Toil and Trouble Warns "Friends of The Earth" A cap-and-trade plan would create a huge new market in emissions permits at a time when Wall Street and Washington have their hands full figuring out how to police existing markets. One key element in all the climate proposals floated so far is the use of “offsets,” or the ability to purchase emissions reductions made somewhere else. As Friends of the Earth says in a new report, “Subprime Carbon”: Given the lack of proven mechanisms to govern commodities, it is imprudent to so hastily create the largest derivatives market in the world and foist it upon a new and untested regulatory regime. One possible side effect of the financial-market fallout and concerns about more toxic assets? Growing support for a straight carbon tax, rather than a complicated cap-and-trade plan.
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POPSOcto-Mom and Personal Responsibility We have latched on to Suleman, I think, because it is easier and more comforting to criticize her for a feat of careless hubris than it is to deal directly with our own feats of the same.
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POPSThe Dirty Dozen Meet the bankers and brokers responsible for the financial crisis - and the official
The Maestro HENRY PAULSON WAS CEO of Goldman Sachs (1999-2006); Treasury secretary (2006-2009) WHAT HE DID Pushed for end to debt restrictions for banks like Goldman, then arranged big bailout for Goldman. WORST MOVE TARP proposal just three pages long; made his decisions "non-reviewable." NOW SAYS "I don't think we've made mistakes on the major decisions." The Big Loser DICK FULD WAS CEO of Lehman Brothers (1993-2008) WHAT HE DID Piloted Lehman to largest bankruptcy in U.S. history; earned $22 million the year firm went bust. WORST MOVE Tried to avoid lawsuits by selling his $13 million Florida home to his wife for $100. NOW SAYS Feels "horrible" about Lehman, but insists his management was "prudent and appropriate." Mr. Too Big KEN LEWIS IS CEO of Bank of America (2001-present) WHAT HE DID Created ultimate too-big-to-fail company, buying up Fleet, MBNA, Countrywide and Merrill Lynch. WORST MOVE Failed to catch a $15 billion loss at Merrill before buying the
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POPSWhy you don't want AIG to fail Short answer: It might bankrupt your state treasury. It might bankrupt your local bank. It might put your local industries out of business. If the gov't acts quickly, it can break up and sell off the profitable parts of AIG, recovering the cash it has lent to cover AIG's unregulated Financial Products Division's inability to pay "insurance" benefits that it had sold to cover the risk inherent in mortgage-backed securities.
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POPSTell me again how the Stimulus is going to work? And please, tell me again how sending more of our debt fueled "spending" to Chinese electronic manufacturers is going to save us? Can ANYONE see reality anymore? Or are we just going to keep playing out the tired old party lines as our once great nation falls? GLOBALIZATION did this to us. NOT subprime mortgages.
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POPS Econ 101 ~ ~ ~ ~ Economic Mess for Dummies ~ ~ ~ ~ ~ What is a CDO or CDS? Imagine taking paper debt like mortgages, subprime mortgages, car loans, credit cards loans, and pretty much anything you can imagine. Now combine and mix the paper in a blender, spiking it with worthless rhetorical hyperbole that derivatives are the new paradigm of investments. Then pour the mixture in a pyramid of champagne glasses, to represent the varying levels of return (and risk), with the higher the glass, the lower the risk return and risk. That represents the CDOs. Now as you sell the mess, insure against the risk of the CDOs decreasing in value with CDSs. Presto, $1 trillion of bad loans is transmuted into $62 trillion in faux wealth. An alchemist would be proud. http://nobullbert.blogspot.com/2009/02/economic-mess-for-dummies.html
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POPS Bailout Is Not The Right Answer This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle. Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets. The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government. The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airline
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POPSChina grows while the West continues it's descent Over the past ten years, under the radar and the "global economy" BS, they sent their suppliers jobs to China. Now, there customers are there. Which will work fine until the day the Chinese slam shut their borders-keeping our technology, investments and products. Wake up people. This mess is not "subprime mortgages". It is lack of family supporting JOBS. And I'm not talking about the whineass UAW workers jobs. Continue allowing the government to shove high tech and globalization down your throats. Harsh poverty is coming. This is going to make the "Great Depression" seem like a walk in the park.
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POPSA Brewing Fraud Scandal at the Treasury Department? The federal government took over IndyMac in July, after the bank's stock price plummeted to just pennies a share when it was revealed the bank had financial troubles due to defaulted mortgages and subprime loans, costing taxpayers over $9 billion.
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POPS Ego And Mouth by Thomas Sowell . . . by those who have accomplished something, and give it to whomever he chooses in the name of "spreading the wealth," is the kind of casual arrogance that has led to many economic catastrophes in many countries. The equally casual ease with which Barack Obama has talked about appointing judges on the basis of their empathies with various segments of the population makes a mockery of the very concept of law. After this man has wrecked the economy and destroyed constitutional law with his judicial appointments, what can he do for an encore? He can cripple the military and gamble America's future on his ability to sit down with enemy nations and talk them out of causing trouble. Add to Obama and Biden House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, and you have all the ingredients for a historic meltdown. Let us not forget that the Roman Empire did decline and fall, blighting the lives of millions for centuries.
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POPS Joe The Plumber Can "Spread The Wealth Around" Just Fine Kennedy understood all this, either consciously or intuitively. But he was the last Democrat to so understand. Lyndon Johnson, who moved into the Oval Office after Dallas, never did get it. Instead, he instituted a guns-and-butter policy (escalating the Vietnam War at the same time he announced the Great Society, a welfare-based attack on America at a cost of billions), and the results were devastating. His only lasting contribution to the public good was the successful passage of historic Civil Rights legislation. That wouldn't have been possible without the support of Republicans in Congress. Ronald Reagan did, and lowered taxes because of his understanding. And so did George W. Bush, leading to the boom which ended only because liberals in Congress - Barney Frank and Chris Dodd most significantly - colluded with Fannie Mae and Freddie Mac to push for subprime mortgages, and we all know what happened when the recipients of such largesse couldn't afford the payments.
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