draconian cuts ? really ? care to list some of those cuts ? Spending has increased over 30% over the last 2 years ... are you saying if spending where to fall back to 2008 levels the economy would collapse ? really ?
the "Bush" tax cuts amount to less than 50 billion per year ... explain how they are casuing 1 trillion plus annual defecits ...
on the upper right corner. Thank you, no kidding I should be paid, this one was a bitch. The Census website is truly an exercise in "Where's Waldo" and I thought the BLS data layout was horrific, pales in comparison to finding data from the Census resources.
Simply great work. not just this post but all the hard work you put in here is as good and mostly far better than anything I used to see while in the fold of the IB world. People should be paying you for this stuff. Keep up the good work.
I just checked the MSM and first, this is NOT a 3 year high. We had this number of job openings in September 2011. We then had a dip but this is why we love graphs, you can do a reality check and it's a huge improvement, but not this headline buzz "3 year high".
Next up in terms of lies, people do not have to quit their jobs to improve the labor market. Quits are a by-product of a health job market, but claiming people need to quit to improve things is false, we need lots of better jobs so people feel "safe" to quit their jobs. Another cart before horse headline buzz.
Then, there is no skills mismatch going on, as we see from the Beveridge curve. True a lot of jobs in professional, business but the unemployment rates in these categories are double what they should be and were before this recession. Have a lot of people left to employ before there's any problem.
Folks, help us out, consider sharing a link to this post in comments on these MSM sites. How hard is it to get these data reports right by the press? I guess very tough!
You can tell the difference if you're logged in. First, your comment will be immediately posted, you won't go into a moderation queue, then all sorts of little rating boxes will pop up. Don't see those, you're not logged in.
Well, please log in and leave some links on raw CDS holdings if you have any updated. I'm waiting for some "announcement' that actually says something on Greece at which point I can try to dig out the details of U.S. bank holdings.
I know people look for our U-6 job openings chart. I had to make sure I was using the right data series, historical, for number crunching this time and some other things. Thanks for your patience.
Bottom line, we have more than one indicator our labor market is "rising from the dead". I'd say it's still a Zombie, but some of the flesh one corpse is starting to come alive, not completely rotten at this point. (yea!)
Thank you for your, as per usual, informative and detailed response. You type at 75 wpm and think at light speed. It turns out that I am registered and forgot login info.
If I may, just to emphasize and summarize my key point:
It may be that we the American taxpayers are as much at risk as the Greek people. If there is a default and American banks are large holders of CDS and they can’t ‘cover’ the obligations they are contracted for, then we may be in the same situation we were in when the sub-prime bubble popped – big banks can’t cover, therefore TARP and recession.
Even if there is a ‘haircut’, the question arises, do CDS cover partial defaults. If I hold a thousand dollar bond and purchased a CDS and the value of the bond is reduced to 700 dollars, does the seller of the CDS have to provide me with 300 dollars. Again, if American banks that issued the CDS can’t cover even a partial loss, then what are implications for the American taxpayers?
These are rhetorical questions in that I don’t think anyone knows the answer – outside of Wall Street boardrooms. But I do think we should be thinking about them. The media and eco-blogs largely seem oblivious to the risk that American’s are at by portraying the Greek issue as a European problem.
We (American working class) may be in the same boat as the Greeks. The internationalization of economies entails the internationalization of working class issues.
Consider registering, so that way you get all sorts of features enabled like the ability to link, quote, embed videos, charts and such. We've gone back and forth with comments and trying to keep the spammers off of the site automatically so to really use the site one needs to register.
The Merkel proposal for Greece to cede budget sovereignty to a European commissioner has finally been trashed. In its place is a Spaghetti-O loop proposal to give Greece money only if Greece earmarks the funds to immediately pay back bondholders.
So, the deal is Greece gets a bail out but if and only iff they pay the one's currently holding their debt first. That's ridiculous, those sovereign debt holders need a big fat haircut.
It should be only if the debt defaults will the CDS then be triggered for a payout.
Can you BELIEVE CDSes are in play after 2008? I was screaming hopping mad when the swiss cheese crap of "financial reform" passed AND the globe did nothing about these derivative time bombs of death.
So, what Mish is saying is the bail out doesn't go directly to Greece, to do with as they please. They are putting the bail out in escrow, saying Greece can only access the bail out funds if they behave and do what the European commission wants them to. But the idea of creating a bail out to simply pay off 100% of the Greek debt holders is positively disgusting. That's European citizens money!
The bail out is €130bn. and the proposal is coming from France and Germany, who I believe are the largest holders of Greek debt, but I also believe French banks have the largest exposure (don't quote me here).
In addition to more bail-out funds in the short term, the IMF also calculates the October programme will not reduce Greek debt levels to 120 per cent of gross domestic product in the long term.
The private debt restructuring will shave about €100bn off Greece’s €350bn debt load. Some eurozone officials believe the ECB could give up the profits on its €40bn Greek debt holdings and contribute that towards Greek debt reduction instead; although the ECB bought its bonds for €40bn, they are believed to have a face value of about €55bn, meaning the ECB could cut €15bn off of Greece’s debt level without technically taking any losses.
So, on surface, I'd say Mish is right, it's all about the banks issuing CDSes on Greek debt plus the Greek bond holders and this is yet another proposal it appears to hold Greece by the short hairs...
does nothing to solve the problem and these stinking CDS time bombs are just unbelievable, they magnify a default causing contagion and further crisis 1000x. Beyond stupid and the damn things aren't even mathematically valid!
Finally, you can register at the financial times and they let you view a few articles for free, but you have to login.
This is a proposal, no agreement. There are so many press releases and claims and proposals, I cannot keep up, my fingers only can type 75wpm. ;) But when something is concrete you can get we'll be blasting it all to hell on this site. ;)
Today Mish’s headline seems ‘spot-on’ but he does not follow though in the article.
Headline;” New Merkowz Proposal...Scam to Prevent CDS Triggers”
CDS Triggers are ( I think) when a defalt is declared and the sellers of the CDS have to pay holders of CDS the face value of the defaulted bond.
Mish does not go into to this and the article he cites is in the subscribers only Financial Times so I can’t get more info.
The important point I believe is: if US Banks are large sellers of Credit Default Swaps (i.e. insureing the bondholders against deficet), then today’s Merkozy Proposal has more to do with protecting US Banks who don’t have enough money to cover such a large default, than with Greece and the EU.
Again, the risk to US economy is if US banks will again have to be determined “to big to fail” and the government has to go TARPing again. If someone knows how much exposure the US banks have in the form of CDS for Greek bonds, that would be very interesting. Main stream financial news is mute on the subject leaving the impression that the Greek bond issue is an EU problem not US. That may be the case. but we can't know unless we know how much exposure US banks have to the Greek bonds in the form of CDS
No kidding! Thank you for the compliment also. I don't get why the BLS doesn't apply some sort of smoothing filter or algorithm to redistribute the yearly adjustments backwards, monthly proportionate.
It makes no sense to me considering we have benchmarks, SA and birth/death to not go ahead and do this also.
Although if they did I might have less to write about. ;)
The financial news media represents the Greek Bond issue as purely a European event and keep saying ‘something like the Greek bond events can’t happen in US – i.e. US defaulting on its debt. However, US can’t default is not the issue. It MAY BE the case that the US banking system will suffer consequences from Greek default and in turn the US economy (as sub-prime mortgage issue cause bank issues which cause economic issues)
Specifically, if the Greek bonds are ‘insured’ (so to speak) by Credit Default Swaps – i.e. if Greece defaults, the seller of the ‘swap’ (insurer so to speak) will have to pay the face value of the bond to the buyer of the swap i.e. holder of the bonds (As I understand it).
The question is who are the ‘insurers’ (i.e. who sold the swap). I have read (can’t remember were) that the five largest US banks are the largest ‘insurers’ (sellers of CDS) and will have to cover Greek bondholder loses if Greece defaults.
In short, if the losses are greater than the bank equity then the Banks will either bankrupt or get bailed out – i.e. “too big to fail”.
Again, if the above is correct then the US economy may suffer if Greece defaults.
But, I’m just guessing. Because MSM is not dealing with the CDS aspect of the Greek bond issue.
For those who do econometric modeling, we have to have time series. So when I was at Global Insight (WEFA) we had to create our own labor force numbers to smooth out the spikes and put the numbers as best we could into the years they belong. WISH the BLS would do this for us...
thanks Robert, a good round up. I've got my hands full with the benchmark and NAICS changes http://www.bls.gov/ces/cesbmart.pdf so having your write up on CPS issues is a big help. Will have to add your blog to my daily walk-thru.
They still are not saying where the money went but the timing of these trades was just revealed, it's absolutely incredible and MF Global was clearing trade with investor's accounts.
MF Global (MFGLQ) Inc.’s $1.2 billion in missing customer funds began to filter out on Oct. 26 as the company’s computers and employees couldn’t keep up with margin calls and increased demands for collateral, according to a trustee who has traced where most of $105 billion in cash went during the company’s final days.
James Giddens, the trustee overseeing the liquidation of the failed brokerage, said today that the company didn’t record all cash movements amid the “unprecedented volume” of transactions in final days before it collapsed. After tracing 84 transactions worth $327 billion, the trustee is still analyzing where some of the money “ended up,” he said today in a statement.
The company moved $105 billion in cash in the last week before its parent filed for bankruptcy and made $100 billion in securities trades, according to the statement. The trades included liquidating customer securities and the firm’s own positions.
Here is the entire internal investigation by Fannie Counsel: })();
OCJ Case No. 5595, whistleblower EXECUTIVE SUMMARY The Office of Corporate Justice has retained Baker & Hostetler LLP to conduct an independent investigation of concerns expressed by Mr. Nye Lavalle, a Fannie Mae shareholder, about several Fannie Mae business practices in connection with single-family mortgages.
1 Mr. Lavalle accuses Fannie Mae of “aiding, abetting and sanctioning predatory lending and servicing schemes,” as well as committing accounting and securities fraud, and racketeering violations. He views Fannie Mae as responsible for damage inflicted on single-family borrowers by unscrupulous lenders and servicers because Fannie Mae approves lenders and servicers, maintains servicer profiles and ratings, approves mortgage document terms and servicing requirements, and benefits from the income stream created by wrongdoing. He fears Fannie Mae’s alleged failures could result in both civil and criminal liability that would affect shareholder value. Through a series of communications to members of the Board of Directors and others starting in December 2003, Mr. Lavalle called for an independent investigation of his allegations
2 The Board of Directors decided to conduct an internal review of these concerns. On September 12,2005, the Office of Corporate Justice retained Baker & Hostetler LLP. Mr. Lavalle began investigating the mortgage industry after his parents, Anthony and Matilde L. Pew, had a dispute with mortgage servicer EMC Mortgage Corporation (“EMC”), a subsidiary of Bear Stearns Companies (“Bear Stearns,,).
3 EMC ultimately foreclosed on the Pews’ property, even though, according to Mr. Lavalle, his family is wealthy and made repeated efforts to repay the loan.
4 The dispute motivated Mr. Lavalle to investigate and publicize his allegations that EMC engaged in predatory servicing practices, which has resulted in several lawsuits between Bear Stearns and Mr. Lavalle.
5 Mr. Lavalle then broadened his focus to include the single-family mortgage industry as a whole. Mr. Lavalle considers himself a gadfly of the mortgage industry. He claims to I have been investigating, analyzing and exposing mortgage fraud, predatory lending and servicing, and securitization schemes since 1993.
6 He has a website that details his complaints, and has posted information on several other sites.
7 He claims to have spent more than 20,000 hours and nearly $500,000 investigating predatory lending and servicing. 8 He reports that he is a consultant to plaintiff lawyers who sue lenders and servicers and to homeowners. Mr. Lavalle’s view is that since Fannie Mae is such an important force in the mortgage industry, it has both the responsibility and means to end abusive lending and servicing practices.
Mr. Lavalle’s view is that Fannie Mae directs the conduct of servicers from afar. In an e-mail ofFebruary21.2006.Mr. Lavalle expresses his frustration, saying: I hate to keep using the analogies that you don’t like but it really is like a Mafia operation. The Godfather [Fannie Mae] says we got a problem, “take care of it” and the lieutenant ["the servicer"] orders the hit [foreclosure] and hires the hitman [the USFN or other lawyer to foreclose]. The hit man and lieutenant don’t want the Godfather implicated so they create layers of deniability [a typical CIA, white house, legal and political maneuver] to conceal who the real parties in interest are and who had knowledge of and ordered the hit.
While Mr. Lavalle is partial to extreme analogies that undermine his credibility, he has become knowledgeable about the mortgage industry. He has identified significant issues but, in our view, does not always analyze them correctly. In proposing solutions, he generally undervalues the benefits to homeowners of efficient mortgage markets operated at low costs and overstates the needs of borrowers to have information about the status of their loans in the secondary markets for mortgages.
Fannie Mae has already identified and is addressing many of the same issues. This report details several areas where Fannie Mae faces legal and business issues that remain to be addressed. Mr. Lavalle also claims that as a result of this work, he and his family have been harassed. He expresses considerable anger when he attributes these attacks to Fannie Mae. An investigation of his personal retaliation claim is in progress; to date Mr. Lavalle has identified no direct conduct by Fannie Mae that he considers harassing.
We have reviewed more than 1,500 pages of documents provided by Mr. Lavalle to Fannie Mae or us directly and had 17 conversations with him. We have identified six general areas of his concerns:
(1) foreclosure policies and procedures,
(2) transparency,
(3) protection of promissory notes,
(4) predatory servicing,
(5) fraud detection and reporting, and
(6) accounting and securities issues.
Within each area, Mr. Lavalle identifies multiple issues that are detailed in this report. In investigating these concerns, we have collected documents from Mr. Lavalle Fannie Mae and public sources, reviewed extensively eFannie.com, and interviewed at least 30 Fannie Mae employees. The company has fully cooperated in our investigation. In reviewing Mr. Lavalle’s concerns as a shareholder, we have told Mr. Lavalle that the proper scope of our investigation is to determine whether he has identified wrongdoing hy Fannie Mae officials or financial risks of sufficient magnitude to affect materially Fannie Mae’s financial statements.
We cannot resolve every case of an alleged mishandled mortgage.
1. Foreclosure Policies and Procedures Mr. Lavalle asserts that Fannie Mae’s mortgage servicers and the Mortgage Electronic Registry System, Inc. (“MERS”) routinely make misrepresentations in foreclosure proceedings. He has identified two categories of alleged misrepresentations: that MERS or the servicers are the holders and owners of the defaulted promissory notes, and that promissory notes are lost, stolen or destroyed.9 He also questions whether foreclosures in the name of MERS or servicers satisfy state laws on standing to sue. Since Fannie Mae authorizes foreclosures, Mr. Lavalle argues that Fannie Mae could be liable for these misrepresentations, including for racketeering violations under federal and state laws, and could risk having foreclosure sales unwound by the courts. 10 We have found evidence that false statements by foreclosure attorneys are being routinely made in at least two counties in Florida and appear to be occurring elsewhere. Apparently due to Mr. Lavalle’s ex parte communications, two Florida judges ordered hearings to examine MERS’s role in foreclosures. During consolidated hearings that resulted in the judges dismissing 24 foreclosure actions, three judges (including one who took the time to observe and comment) criticized MERS for routinely filing “sham” pleadings and “false” affidavits regarding its interest in promissory notes and supposed lost promissory notes. II One judge questioned whether large numbers of foreclosures would have to be reversed due to fraud on the court. [...]
Disclaimer: Legal information is NOT legal advice. The material and historical information herein should NOT be taken as legal advice and is NOT a substitute for the assistance of a licensed advisor. I AM NOT AN ATTORNEY.
When ever you see a quote in a post with a link referring to it above, that is the reference link. In other words the New York Times article is the one quoted in this post.
What would Woody Guthrie have done with Robo-Signing Frauduent foreclosures?
"As through this world you travel,
you'll meet some funny men
Some will rob you with a six-gun,
and some with a fountain pen."
-Last lines of Ballad of Pretty Boy Floyd
The computer is the weapon of the robbers.mot the fountain pen.
Have the fundamentsal economics of banking changed? What should bother all
remaining decent folks is that every small time punk and wiseguy
can never hope to compete with the sheer scale of robbery that
the banks now do.
There is this link which is pretty good and has references to the original Fannie Fraudsters. Basically it tells how Lavalle fought back, sued them, lost, then exposed the bastards. It's axiomatic that Newt is toast. The story has some fascinating references to a 'Bane' Company - like someone having fun with Bain as the Bane of Capitalism in the company name. Lavalle is one more cassandra in the Mortgage Swindle.This is much bigger than it looks at first glance.
Hmmmm, Europe is America's second largest trade deficit. See the trade report overview. I'll have to make up a pie chart on U.S. exports by region I guess because I don't have it, but glancing over the BEA trade report it looks like Europe is the third largest export market for the U.S. with a not seasonally adjusted $26 billion for November, which exports had declined significantly pushing Europe to the second largest trade deficit by region/country.
That said, I don't have an updated number for exposure to European banks or sovereign credit default swaps. We saw the Fed make it damn easy to swap out Euros, but this appears to be for Central banks (other Central banks).
Last time we looked into this the European sovereign debt exposure as well as European banking exposure was pretty damn high.
Please stop back if you see some updated data on this. I'm kind of waiting for a "real event" to look into another article on Europe. To me the story is never ending press releases and stories about how "negotiations are proceeding" and "discussions are ongoing" and "Germany wants Greece to give up control of their budget" and so on, without real concrete anything.
Superficially, it does seem like the CDS and Bank exposure is being dismissed.
draconian cuts ? really ? care to list some of those cuts ? Spending has increased over 30% over the last 2 years ... are you saying if spending where to fall back to 2008 levels the economy would collapse ? really ?
the "Bush" tax cuts amount to less than 50 billion per year ... explain how they are casuing 1 trillion plus annual defecits ...
on the upper right corner. Thank you, no kidding I should be paid, this one was a bitch. The Census website is truly an exercise in "Where's Waldo" and I thought the BLS data layout was horrific, pales in comparison to finding data from the Census resources.
Robert
Simply great work. not just this post but all the hard work you put in here is as good and mostly far better than anything I used to see while in the fold of the IB world. People should be paying you for this stuff. Keep up the good work.
Chris
I just checked the MSM and first, this is NOT a 3 year high. We had this number of job openings in September 2011. We then had a dip but this is why we love graphs, you can do a reality check and it's a huge improvement, but not this headline buzz "3 year high".
Next up in terms of lies, people do not have to quit their jobs to improve the labor market. Quits are a by-product of a health job market, but claiming people need to quit to improve things is false, we need lots of better jobs so people feel "safe" to quit their jobs. Another cart before horse headline buzz.
Then, there is no skills mismatch going on, as we see from the Beveridge curve. True a lot of jobs in professional, business but the unemployment rates in these categories are double what they should be and were before this recession. Have a lot of people left to employ before there's any problem.
Folks, help us out, consider sharing a link to this post in comments on these MSM sites. How hard is it to get these data reports right by the press? I guess very tough!
You can tell the difference if you're logged in. First, your comment will be immediately posted, you won't go into a moderation queue, then all sorts of little rating boxes will pop up. Don't see those, you're not logged in.
Well, please log in and leave some links on raw CDS holdings if you have any updated. I'm waiting for some "announcement' that actually says something on Greece at which point I can try to dig out the details of U.S. bank holdings.
I know people look for our U-6 job openings chart. I had to make sure I was using the right data series, historical, for number crunching this time and some other things. Thanks for your patience.
Bottom line, we have more than one indicator our labor market is "rising from the dead". I'd say it's still a Zombie, but some of the flesh one corpse is starting to come alive, not completely rotten at this point. (yea!)
Thank you for your, as per usual, informative and detailed response. You type at 75 wpm and think at light speed. It turns out that I am registered and forgot login info.
If I may, just to emphasize and summarize my key point:
It may be that we the American taxpayers are as much at risk as the Greek people. If there is a default and American banks are large holders of CDS and they can’t ‘cover’ the obligations they are contracted for, then we may be in the same situation we were in when the sub-prime bubble popped – big banks can’t cover, therefore TARP and recession.
Even if there is a ‘haircut’, the question arises, do CDS cover partial defaults. If I hold a thousand dollar bond and purchased a CDS and the value of the bond is reduced to 700 dollars, does the seller of the CDS have to provide me with 300 dollars. Again, if American banks that issued the CDS can’t cover even a partial loss, then what are implications for the American taxpayers?
These are rhetorical questions in that I don’t think anyone knows the answer – outside of Wall Street boardrooms. But I do think we should be thinking about them. The media and eco-blogs largely seem oblivious to the risk that American’s are at by portraying the Greek issue as a European problem.
We (American working class) may be in the same boat as the Greeks. The internationalization of economies entails the internationalization of working class issues.
Thanks again – its been real!
Consider registering, so that way you get all sorts of features enabled like the ability to link, quote, embed videos, charts and such. We've gone back and forth with comments and trying to keep the spammers off of the site automatically so to really use the site one needs to register.
Ok, here is Mish's post:
So, the deal is Greece gets a bail out but if and only iff they pay the one's currently holding their debt first. That's ridiculous, those sovereign debt holders need a big fat haircut.
It should be only if the debt defaults will the CDS then be triggered for a payout.
Can you BELIEVE CDSes are in play after 2008? I was screaming hopping mad when the swiss cheese crap of "financial reform" passed AND the globe did nothing about these derivative time bombs of death.
So, what Mish is saying is the bail out doesn't go directly to Greece, to do with as they please. They are putting the bail out in escrow, saying Greece can only access the bail out funds if they behave and do what the European commission wants them to. But the idea of creating a bail out to simply pay off 100% of the Greek debt holders is positively disgusting. That's European citizens money!
The bail out is €130bn. and the proposal is coming from France and Germany, who I believe are the largest holders of Greek debt, but I also believe French banks have the largest exposure (don't quote me here).
Financial Times:
So, on surface, I'd say Mish is right, it's all about the banks issuing CDSes on Greek debt plus the Greek bond holders and this is yet another proposal it appears to hold Greece by the short hairs...
does nothing to solve the problem and these stinking CDS time bombs are just unbelievable, they magnify a default causing contagion and further crisis 1000x. Beyond stupid and the damn things aren't even mathematically valid!
Finally, you can register at the financial times and they let you view a few articles for free, but you have to login.
This is a proposal, no agreement. There are so many press releases and claims and proposals, I cannot keep up, my fingers only can type 75wpm. ;) But when something is concrete you can get we'll be blasting it all to hell on this site. ;)
Today Mish’s headline seems ‘spot-on’ but he does not follow though in the article.
Headline;” New Merkowz Proposal...Scam to Prevent CDS Triggers”
CDS Triggers are ( I think) when a defalt is declared and the sellers of the CDS have to pay holders of CDS the face value of the defaulted bond.
Mish does not go into to this and the article he cites is in the subscribers only Financial Times so I can’t get more info.
The important point I believe is: if US Banks are large sellers of Credit Default Swaps (i.e. insureing the bondholders against deficet), then today’s Merkozy Proposal has more to do with protecting US Banks who don’t have enough money to cover such a large default, than with Greece and the EU.
Again, the risk to US economy is if US banks will again have to be determined “to big to fail” and the government has to go TARPing again. If someone knows how much exposure the US banks have in the form of CDS for Greek bonds, that would be very interesting. Main stream financial news is mute on the subject leaving the impression that the Greek bond issue is an EU problem not US. That may be the case. but we can't know unless we know how much exposure US banks have to the Greek bonds in the form of CDS
No kidding! Thank you for the compliment also. I don't get why the BLS doesn't apply some sort of smoothing filter or algorithm to redistribute the yearly adjustments backwards, monthly proportionate.
It makes no sense to me considering we have benchmarks, SA and birth/death to not go ahead and do this also.
Although if they did I might have less to write about. ;)
CD swaps Greece US Banks and Economy??
The financial news media represents the Greek Bond issue as purely a European event and keep saying ‘something like the Greek bond events can’t happen in US – i.e. US defaulting on its debt. However, US can’t default is not the issue. It MAY BE the case that the US banking system will suffer consequences from Greek default and in turn the US economy (as sub-prime mortgage issue cause bank issues which cause economic issues)
Specifically, if the Greek bonds are ‘insured’ (so to speak) by Credit Default Swaps – i.e. if Greece defaults, the seller of the ‘swap’ (insurer so to speak) will have to pay the face value of the bond to the buyer of the swap i.e. holder of the bonds (As I understand it).
The question is who are the ‘insurers’ (i.e. who sold the swap). I have read (can’t remember were) that the five largest US banks are the largest ‘insurers’ (sellers of CDS) and will have to cover Greek bondholder loses if Greece defaults.
In short, if the losses are greater than the bank equity then the Banks will either bankrupt or get bailed out – i.e. “too big to fail”.
Again, if the above is correct then the US economy may suffer if Greece defaults.
But, I’m just guessing. Because MSM is not dealing with the CDS aspect of the Greek bond issue.
For those who do econometric modeling, we have to have time series. So when I was at Global Insight (WEFA) we had to create our own labor force numbers to smooth out the spikes and put the numbers as best we could into the years they belong. WISH the BLS would do this for us...
thanks Robert, a good round up. I've got my hands full with the benchmark and NAICS changes http://www.bls.gov/ces/cesbmart.pdf so having your write up on CPS issues is a big help. Will have to add your blog to my daily walk-thru.
They still are not saying where the money went but the timing of these trades was just revealed, it's absolutely incredible and MF Global was clearing trade with investor's accounts.
Here is the entire internal investigation by Fannie Counsel: })();
OCJ Case No. 5595, whistleblower EXECUTIVE SUMMARY The Office of Corporate Justice has retained Baker & Hostetler LLP to conduct an independent investigation of concerns expressed by Mr. Nye Lavalle, a Fannie Mae shareholder, about several Fannie Mae business practices in connection with single-family mortgages.
1 Mr. Lavalle accuses Fannie Mae of “aiding, abetting and sanctioning predatory lending and servicing schemes,” as well as committing accounting and securities fraud, and racketeering violations. He views Fannie Mae as responsible for damage inflicted on single-family borrowers by unscrupulous lenders and servicers because Fannie Mae approves lenders and servicers, maintains servicer profiles and ratings, approves mortgage document terms and servicing requirements, and benefits from the income stream created by wrongdoing. He fears Fannie Mae’s alleged failures could result in both civil and criminal liability that would affect shareholder value. Through a series of communications to members of the Board of Directors and others starting in December 2003, Mr. Lavalle called for an independent investigation of his allegations
2 The Board of Directors decided to conduct an internal review of these concerns. On September 12,2005, the Office of Corporate Justice retained Baker & Hostetler LLP. Mr. Lavalle began investigating the mortgage industry after his parents, Anthony and Matilde L. Pew, had a dispute with mortgage servicer EMC Mortgage Corporation (“EMC”), a subsidiary of Bear Stearns Companies (“Bear Stearns,,).
3 EMC ultimately foreclosed on the Pews’ property, even though, according to Mr. Lavalle, his family is wealthy and made repeated efforts to repay the loan.
4 The dispute motivated Mr. Lavalle to investigate and publicize his allegations that EMC engaged in predatory servicing practices, which has resulted in several lawsuits between Bear Stearns and Mr. Lavalle.
5 Mr. Lavalle then broadened his focus to include the single-family mortgage industry as a whole. Mr. Lavalle considers himself a gadfly of the mortgage industry. He claims to I have been investigating, analyzing and exposing mortgage fraud, predatory lending and servicing, and securitization schemes since 1993.
6 He has a website that details his complaints, and has posted information on several other sites.
7 He claims to have spent more than 20,000 hours and nearly $500,000 investigating predatory lending and servicing. 8 He reports that he is a consultant to plaintiff lawyers who sue lenders and servicers and to homeowners. Mr. Lavalle’s view is that since Fannie Mae is such an important force in the mortgage industry, it has both the responsibility and means to end abusive lending and servicing practices.
Mr. Lavalle’s view is that Fannie Mae directs the conduct of servicers from afar. In an e-mail ofFebruary21.2006.Mr. Lavalle expresses his frustration, saying: I hate to keep using the analogies that you don’t like but it really is like a Mafia operation. The Godfather [Fannie Mae] says we got a problem, “take care of it” and the lieutenant ["the servicer"] orders the hit [foreclosure] and hires the hitman [the USFN or other lawyer to foreclose]. The hit man and lieutenant don’t want the Godfather implicated so they create layers of deniability [a typical CIA, white house, legal and political maneuver] to conceal who the real parties in interest are and who had knowledge of and ordered the hit.
While Mr. Lavalle is partial to extreme analogies that undermine his credibility, he has become knowledgeable about the mortgage industry. He has identified significant issues but, in our view, does not always analyze them correctly. In proposing solutions, he generally undervalues the benefits to homeowners of efficient mortgage markets operated at low costs and overstates the needs of borrowers to have information about the status of their loans in the secondary markets for mortgages.
Fannie Mae has already identified and is addressing many of the same issues. This report details several areas where Fannie Mae faces legal and business issues that remain to be addressed. Mr. Lavalle also claims that as a result of this work, he and his family have been harassed. He expresses considerable anger when he attributes these attacks to Fannie Mae. An investigation of his personal retaliation claim is in progress; to date Mr. Lavalle has identified no direct conduct by Fannie Mae that he considers harassing.
We have reviewed more than 1,500 pages of documents provided by Mr. Lavalle to Fannie Mae or us directly and had 17 conversations with him. We have identified six general areas of his concerns:
(1) foreclosure policies and procedures,
(2) transparency,
(3) protection of promissory notes,
(4) predatory servicing,
(5) fraud detection and reporting, and
(6) accounting and securities issues.
Within each area, Mr. Lavalle identifies multiple issues that are detailed in this report. In investigating these concerns, we have collected documents from Mr. Lavalle Fannie Mae and public sources, reviewed extensively eFannie.com, and interviewed at least 30 Fannie Mae employees. The company has fully cooperated in our investigation. In reviewing Mr. Lavalle’s concerns as a shareholder, we have told Mr. Lavalle that the proper scope of our investigation is to determine whether he has identified wrongdoing hy Fannie Mae officials or financial risks of sufficient magnitude to affect materially Fannie Mae’s financial statements.
We cannot resolve every case of an alleged mishandled mortgage.
1. Foreclosure Policies and Procedures Mr. Lavalle asserts that Fannie Mae’s mortgage servicers and the Mortgage Electronic Registry System, Inc. (“MERS”) routinely make misrepresentations in foreclosure proceedings. He has identified two categories of alleged misrepresentations: that MERS or the servicers are the holders and owners of the defaulted promissory notes, and that promissory notes are lost, stolen or destroyed.9 He also questions whether foreclosures in the name of MERS or servicers satisfy state laws on standing to sue. Since Fannie Mae authorizes foreclosures, Mr. Lavalle argues that Fannie Mae could be liable for these misrepresentations, including for racketeering violations under federal and state laws, and could risk having foreclosure sales unwound by the courts. 10 We have found evidence that false statements by foreclosure attorneys are being routinely made in at least two counties in Florida and appear to be occurring elsewhere. Apparently due to Mr. Lavalle’s ex parte communications, two Florida judges ordered hearings to examine MERS’s role in foreclosures. During consolidated hearings that resulted in the judges dismissing 24 foreclosure actions, three judges (including one who took the time to observe and comment) criticized MERS for routinely filing “sham” pleadings and “false” affidavits regarding its interest in promissory notes and supposed lost promissory notes. II One judge questioned whether large numbers of foreclosures would have to be reversed due to fraud on the court. [...]
Disclaimer: Legal information is NOT legal advice. The material and historical information herein should NOT be taken as legal advice and is NOT a substitute for the assistance of a licensed advisor. I AM NOT AN ATTORNEY.
When ever you see a quote in a post with a link referring to it above, that is the reference link. In other words the New York Times article is the one quoted in this post.
What would Woody Guthrie have done with Robo-Signing Frauduent foreclosures?
"As through this world you travel,
you'll meet some funny men
Some will rob you with a six-gun,
and some with a fountain pen."
-Last lines of Ballad of Pretty Boy Floyd
The computer is the weapon of the robbers.mot the fountain pen.
Have the fundamentsal economics of banking changed? What should bother all
remaining decent folks is that every small time punk and wiseguy
can never hope to compete with the sheer scale of robbery that
the banks now do.
-
There is this link which is pretty good and has references to the original Fannie Fraudsters. Basically it tells how Lavalle fought back, sued them, lost, then exposed the bastards. It's axiomatic that Newt is toast. The story has some fascinating references to a 'Bane' Company - like someone having fun with Bain as the Bane of Capitalism in the company name. Lavalle is one more cassandra in the Mortgage Swindle.This is much bigger than it looks at first glance.
http://www.nytimes.com/2012/02/05/business/mortgage-tornado-warning-unhe...
Hmmmm, Europe is America's second largest trade deficit. See the trade report overview. I'll have to make up a pie chart on U.S. exports by region I guess because I don't have it, but glancing over the BEA trade report it looks like Europe is the third largest export market for the U.S. with a not seasonally adjusted $26 billion for November, which exports had declined significantly pushing Europe to the second largest trade deficit by region/country.
That said, I don't have an updated number for exposure to European banks or sovereign credit default swaps. We saw the Fed make it damn easy to swap out Euros, but this appears to be for Central banks (other Central banks).
Last time we looked into this the European sovereign debt exposure as well as European banking exposure was pretty damn high.
Please stop back if you see some updated data on this. I'm kind of waiting for a "real event" to look into another article on Europe. To me the story is never ending press releases and stories about how "negotiations are proceeding" and "discussions are ongoing" and "Germany wants Greece to give up control of their budget" and so on, without real concrete anything.
Superficially, it does seem like the CDS and Bank exposure is being dismissed.
Nice work. Thank you for your time and effort.
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