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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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POPSBarney Frank: Predatory Lender Why is Barney Frank still in charge of the Financial Services Committee? Last years FNMA, FHA (GSE) loans are this years foreclosures. How is that working out for taxpayers. And in addition, lets keep non-paying borrowers in homes for 2 - 3 years without paying. How much is that costing taxpayers. Maybe cheaper to give those borrowers a big Cash for Keys check rather than continue to have a non-paying asset and cost of continuous litigation for a barrage of new federal mandates and state legislation that fuels plaintiff attorneys.
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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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POPSthe giant hole What this argument leaves out is Fannie and Freddie. The evil and greedy bankers (curiously intent on making loans that could not be repaid) were able to sell these loans to Fannie and Freddie. If there had not been these quasi-governmental corporations backing them they would not have been making loans and they would never have been capitalized. It may be true that there was a "giant hole" in the safety net, but the truck that drove through it was financed by the government's own creatures.
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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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POPSNew FHA Foreclosures Jump As FHA continues to offer loans with little money down, and as home prices continued to decline from last year, its no surprise that delinquencies and foreclosures from newly originated FHA loans (last 12 months) are increasing.
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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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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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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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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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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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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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POPSSummer of Rage Ironies this is a very unfair crisis. The epicentre is the United States, but the rest of the world, and particularly America's trading partners, will get hit harder than the U.S.
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POPSThis is not your father's country anymore The baby boomers are starting to retire and will consume an ever larger share of these entitlement programs. Social Security is a Ponzi scheme. Paying into it paid off current recipients. When it is our turn to retire there won't be enough money to cover us all, meaning we were funding a promise that could not be paid back. At the end of the day, we are going to have to settle for less. Less money, smaller houses, smaller cars and smaller dreams.
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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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