Too Big to Fail Bankstas and the Financial Collapse: Bethany McLean, author of ‘All the Devil’s are Here” CSPAN Interview

cannot wait to read this book

Courtesy of CSPAN


For more on the imminent collapse and why, see Naked Capitalism, Yves Smith today- ‘Why MERS needs to be taken out and shot’

the idea of passing a Federal statue to solve MERS’ growing state-level problems is a huge stretch. As the latest report of the Congressional Oversight Panel noted,

In the absence of more guidance from state courts, it is difficult to ascertain the impact of the use of MERS on the foreclosure process. The uncertainty is compounded by the fact that the issue is rooted in state law and lies in the hands of 50 states judges and legislatures.

We’ve been told that Constitutional scholars have said that repeated Supreme Court decisions have found real estate transactions to be beyond the reach of Commerce clause, and hence not subject to Federal intervention. So the idea that MERS can be legitimated by Congress appears far-fetched.

But what are the problems with MERS? The focus so far has been on its questionable legal standing, but its operational failings are every bit as serious.

Although critics have provided a number of arguments against MERS, the most fundamental relate to MERS’ claim that it acts as mortgagee of record….

And see NC again for Tom Adams on why failure to transfer notes is a serious problem for the TBTF:

(…) Based on my review, Countrywide failed to comply with the terms of the agreement for the delivery of the mortgage notes. In addition, importantly, the trustee also failed to comply with the terms – it was required to certify it had the mortgage notes at closing and then certified annually that it had safeguarded the mortgage loan documents as required by the PSA.As a result, if Countrywide actually failed to deliver all of the mortgage notes to the trustee, as the judge describes in the Kemp case, then

(1) This is a problem for the trustee proving it has standing for foreclosures or bankruptcies, as in the Kemp case,

(2) It seems like investors in the certificates issued by CWABS 2006-8 would have a good case to pursue claims against both Countrywide and the Bank of New York, as trustee, for failing to perform as required under the agreement,

(3) By stating that the notes had been delivered and certifying all of the notes had been received, Countrywide and the trustee seem to have misrepresented the transaction to investors, by creating the impression that the trust had secured the collateral, and

(4) The trustee’s annual certification under Reg AB that the mortgage loan documents were safeguarded and secured may open the parties up to additional liability for misrepresentation to investors, despite the fact that three-year statute of limitations may have expired for misrepresentations made in the offering statement for the transaction.

I tracked down the pooling and servicing agreement in the Kemp case from CWABS 2006-8 to make sure it did not have any unique exceptions to delivery. It did not. Section 2.01 of the PSA requires the Depositor (CWABS) delivery of the note to the trustee with all intervening endorsements as follows:…read it all!

November 22, 2010. Tags: , , , , , , , , , , , , , , , , . Economy, Education, Finance, Foreclosures, Housing, journalism, media, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Mind bending dissolution of housing/foreclosure law as we have known it continues apace: Will Obama destroy property rights and rule of law for TooBigToFail ZombieBanks constantly threatening TEOTWAWKI? Elizabeth Warren on the Fraud – ‘This is a Very Big Problem’; Citibank Report ‘Foreclosures Gone Wild’

Citibank Report ‘Foreclosures Gone Wild’ and the ramifications to MBS REMICs and more happy, happy, joy joy courtesy of Market Ticker who summarizes thusly:

…In the best-case scenario, the banks are lying (again) and it will take a year to sort out (during which time they will bleed like a stuck pig on their servicing costs and obligations.)  In the medium scenario they get sued to Mars and, which he didn’t say but I will, all wind up eating the bad paper which forces them into resolution – shareholders are wiped out and bondholders take a nice chop-chop. And in the worse-case scenario the title companies say “fuggit” and it all blows up instantly.

There’s no scenario under which “it’s all ok” folks.


October 12, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Financial collapse and housing: WaMu execs testify before Senate

Update: CSPAN3 livestreaming the hearing here

The Senate seems to have quite a bit of evidence suggesting the WaMu team deliberately securitized bad bad bad loans as ‘great!’ loans..

WSJ live blogging it here

“The worst managed business I had seen in my career.” That is how Washington Mutual’s former president described his company’s home loan division.

The mortgage lending practices at the Seattle thrift take center stage at a Senate hearing this morning.
The Senate Permanent Subcommittee on Investigations says WaMu did little to stop the loan fraud and generally risky and highly defective securitization practices in its mortgage business

WaMu’s defense? Former CEO Kerry Killinger says he reigned in his company’s mortgage business and blames his thrift’s collapse on unfair and biased regulators who were willing to save Wall Street firms, but not his own

  • Levin: Killinger made $11 million to $20 million a year, from 2003 to 2007. He was paid $25 million when he stepped down in 2008, as his thrift was going down the tubes.  Killinger may have complained about not being part of the Wall Street club (see earlier Deal Journal post). But he sure was paid like one of club.

  • (more…)
  • April 13, 2010. Tags: , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Wall St. Comments off.

    AIG and Treasury, a codependant relationship…

    AIG (despite a sternly worded letter from Timmeh) via it’s govt approved CEO Ed Liddy tells Geithner they HAVE TO pay over 165 million in employee bonuses MOST TO THE VERY UNIT THAT WROTE ALL THE  CRAPPY CDS’ THAT TANKED THE GLOBAL ECONOMY.. Arrrrgggle!. Disclaimer for those who don’t know MiM members worked at AIG we are  biased on this topic..

    So anywho as we have discussed here before, AIG has a  G-D gun to our taxpaying heads, the counterparties to all the CDS are the biggest banks in Europe and around the world…thus we aren’t letting them fail, we are funneling our cash to European banks..

    Yeah it is definitely a bad bad codependant relationship at this point and the Treasury is enabling this abusive behavior m’kay?

    Do you become very upset when your partner does not follow your plan?

    Do you feel you give and give and get little or no return?

    Do you freeze up when in conflict with your partner?

    Do you often find yourself saying, “It’s not that bad”?

    Do you place your partners needs ahead of yours?

    Do you feel that your relationship would fall apart without your constant efforts?

    Do you feel that you are “stuck” in this relationship?

    AND TIMMEH COULDN’T WORK WITH THAT TO GET THE G20 TO DEAL ON STIMULUS SPENDING, WTH, HE HAS A GREAT HAND!! I would’ve done it, cough up demand in your countries or we let AIG go down..WTH we have nothing left to lose WEAK….Try to LOOK like you have a spine…

    Bernanke also expressed quite a bit of anger at AIG in his testimony before Congress this month…


    President Barack Obama’s top advisers and Democratic and Republican congressional leaders voiced outrage on Sunday that insurerAmerican International Group, recipient of a $173 billion taxpayer bailout, is paying $165 million in employee bonuses. But they agreed it was unclear what, if anything, the government can do to recover the bonus money from the insurance giant or cut the bonuses since the contracts seem legally binding.

    Lawmakers said, however, that plenty of questions need to be answered and some AIG officials may need to be ousted. They also said legislation may be needed to avoid a repeat of such action and retain public confidence in federal bailouts.

    “We will absolutely do everything possible to make sure that the money we put in there is spent in a way that we think is appropriate,” Christina Romer, chair of the White House Council of Economic Advisers, told NBC’s “Meet the Press.” Romer and another top Obama adviser, National Economic Council Director Lawrence Summers, said contracts must be honored but the matter at AIG would be examined.


    And this is after Summers flipped on the bad bad banks routine to GREED IS GOOD in his best Gecko impression, BWAAAHAAAAAA!!! You know all that bad bad bankers with our bad bad airplanes and now they are waltzing away with millions makes Team Obama  look WEAK baby WEAK….

    “We are a country of law. There are contracts. The government cannot just abrogate contracts,” Summers told ABC’s “This Week.” Regardless, he said: “Every legal step possible to limit those bonuses is being taken by (Treasury) Secretary Geithner and by the Federal Reserve System.”

    It gets BETTER! The GOP is saying, even though there are contracts, well we should look them over anyway, you know in case they KNEW it was bad, well isn’t that what the DEMS are saying about subprime loans? that the lenders knew they were bad? Yep, the flip flopping and side switching is FRAKKIN OFF THE RAILS NOW..

    Senate Republican Leader Mitch McConnell said of the bonuses, “This is an outrage,” and that the Obama administration needs to do more.

    “We all know that contracts are valid … but they need to be looked at,” McConnell told ABC “This Week.”

    “Did they (AIG) enter into these contracts knowing full well that … the taxpayers of the United States were going to be reimbursing their employees? Particularly employees who got them into this mess,” McConnell said.

    March 16, 2009. Tags: , , , , , , , , , , , , , , , , , . Cabinet, Economy, FDIC, Finance, Obama Administration, Politics, TARP, Taxes, Uncategorized, Wall St. 2 comments.

    Market Movers Monday: Bernanke on 60 Minutes and Treasury moves up Toxic Assets Plan

    Bernanke on 60 Minutes Sunday night, this period before a FED meeting is traditionally a blackout for fear the markets will move the FED decision process or vice versa.

    No g’news is good g’news on this interview. Apparently Americans are supposed to feel reassured by his doctorial demeanor and go shopping. I am warming up to Ben rapidly with the Apple Dumpling Gang we have running things now for comparison…

    The other big news is that Treasury is moving up the rollout of TARP THREE. The latest AIG fiasco is so so bad for Team Obama, the timing, because they chose to push through the bloated stimulus and budget packages before they did the most important thing IMO,  funding the toxic asset program

    Taxpayers are rightfully and righteously pixxed. This will be all over the news and then Timmeh will come back from G20 EMPTYHANDED Continental Europe is not interested in any stimulus to boost demand and they told him that…POTUS will go in April and hear the same thing about more NATO troops no doubt….

    So WOTS is they were hoping things would magically get better without having to inject more capital anytime soon, but the AIG news means they cant come to us later for money, they need to move before the backlash builds  we are awash in tea :0) So the big rush is on to roll out TARP Three, Revenge of the Taxpayer, sounds nice huh?

    CNBC (you know the new EVIL ONES) Steve Liesman:

    The Obama administration’s plan to purchase toxic assets from the banks in a public/private partnership could be made public as soon as this week, according to senior administration officials. Officials said President Obama has largely signed off on the plan in discussions with Treasury Secretary Tim Geithner and the president’s economic team. A meeting was scheduled today at the White House to discuss the plan. But some details of the so-called Public Private Investment Fund, or PPIF, had yet to be worked out and officials cautioned that could delay the announcement to the following week

    Still, officials say the broad outlines of the plan have been decided. Several competing funds will be established with capital from both public and private sources.

    MiM here anyone wanna bet PIMCO is in there LOL Bill Gross likely wrote the damn plan HA!!

    The hope is to have these funds bid on the assets weighing down the balance sheets of the nation’s banks and create a market price through the competition.

    The administration plans to begin the program, to be overseen by the Treasury, the Federal Deposit Insurance Corporation and the Federal Reserve, with purchases of up to $500 billion in assets. It could be expanded to $1 trillion.

    The bidders will be offered low-cost government financing to buy the assets and some form of insurance to protect them against downside risk..

    If this sounds familiar to you it is because it is the plan Paulson sold Congress as TARP One, yep, go back Jack do it again…..

    March 15, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , , . Cabinet, Economy, FDIC, Film, Finance, Obama Administration, Politics, Popular Culture, TARP, Taxes, Uncategorized, Wall St. 1 comment.

    Memo to Team Obama: The Smartest Guys in the Room Model Does Not Work…

    From Charles Krauthammer:

    The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

    And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

    We need to get in a team of regular Americans on these ’round table, summit,cocktail party, bs sessions on the Hill. Whenever the Geniuses get together it is a frakkin clusterfxxk

    Ideally we should send follow the Nextel commercial model for governance, firefighters, roadies and UPS folks do our representing :0) We were supposed to get that with the House, but clearly it ain’t happenin, look at Pelosi vineyards and the Top 10 wealthiest Critters, their seats are good as the gold they can spend to keep them…

    try to make it to a Tea Party or call your Critters when they roll out these goofy proposals that clearly are unworkable to markets and Main St, but the critters think are swell…

    March 6, 2009. Tags: , , , , , , , , , , , , , , , , , , , . Economy, Obama Administration, Politics, TARP, Taxes, Uncategorized, Wall St. 2 comments.

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