Thursday March 19 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Scenes from Argentina's Collapse - (www.informationclearinghouse.info) Good video/documentary on the events that led to the economic collapse of Argentina in 2001 which wiped out the middle class and raised the level of poverty to 57.5%. Central to the collapse was the implementation of neo-liberal policies which enabled the swindle of billions of dollars by foreign banks and corporations. Many of Argentina's assets and resources were shamefully plundered. Its financial system was even used for money laundering by Citibank, Credit Suisse, and JP Morgan. The net result was massive wealth transfers and the impoverishment of society which culminated in many deaths due to oppression and malnutrition.

Financiers Used "Hotline" to SEC Examiners – (www.truthout.org) Former SEC Commissioner Christopher Cox stood beside former Secretary of Treasury Henry Paulson as Bush delivered a speech on the economy in the White House Rose Garden, September 2008. (Photo: UPI / Yuri Gripas) Washington, DC - In a hearing which exposed failures by the government's financial police, Congressman Stephen Lynch (D-Massachusetts) highlighted the existence of a "hotline," which he said could be used by Wall Street firms to call off government inspectors. The existence of a "hotline" has been confirmed by the Securities and Exchange Commission (SEC), though its purpose has been disputed. The SEC - the federal agency tasked with policing the financial industry - has come under heavy criticism for incompetence and negligence in its role as the regulator of the giant Wall Street firms, the collapse of which has already cost taxpayers billions of dollars and continues to threaten the world economy. The most prominent example of SEC failure is the decades-long $50 billion Ponzi scheme - likely the largest financial fraud in history - orchestrated by Bernard Madoff. The fraud was identified by money manager and private investigator Harry Markopolos, the star witness at the February 4 hearing before the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

FDIC double-speak: Yes, the FDIC are a bunch of insiders whose job entails lying to the public to maintain public confident in the banking system:
· Bill Seeks $500 Billion for FDIC Fund – (online.wsj.com) Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department. ... The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted. ...The FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009.
· FDIC May Need $150 Billion Bailout as Local Bank Failures Mount – (www.bloomberg.com) It was just last September that the FDIC disputed a story by David Evans at Bloomberg: Bloomberg reporter David Evans' piece ("FDIC May Need $150 Billion Bailout as Local Bank Failures Mount," Sept. 25) does a serious disservice to your organization and your readers by painting a skewed picture of the FDIC insurance fund. Let me be clear: The insurance fund is in a strong financial position to weather a significant upsurge in bank failures. The FDIC has all the tools and resources necessary to meet our commitment to insured depositors, which we view as sacred. I do not foresee – as Mr. Evans suggests – that taxpayers may have to foot the bill for a "bailout." I guess the proposed $500 billion is just a loan and not a bailout.

Fresh pessimism sweeps over credit sector - (www.ft.com) Debt concerns hit bond yields. Credit market indicators – barometers of stress since the financial crisis began 18 months ago – are once more flashing red. Heightened concern over the fate of US carmakers and worries about escalating losses at banks and financial institutions and at General Electric, the largest debt issuer in capital markets, are creating a grim mood. “There has been a strong repricing of credit risk as there is a panic almost about the financial sector,” Brian Yelvington, strategist at Creditsights, says. “So far, most of the pain of the problems at financial institutions is being taken by shareholders and taxpayers, but there are real concerns that the problems will be so large that the pain will shift to holders of bonds and other securities.” Debt from financial institutions – including some of the biggest banks such as Citigroup and Bank of America – is widely held by investors ranging from pension funds to insurance companies. Concerns about the value of these holdings have pushed risk premiums higher across the board. “We are in another round of the credit crunch where the intensity is spreading,” Mary Miller, director of fixed income at T. Rowe Price, says.

Europe rejects extra stimulus appeal - (www.ft.com) US snubbed on call for radical action. European ministers said on Monday they had no plans to add to recent fiscal stimulus packages despite calls from the US for radical expansions in government action to boost ailing economies. Meeting in Brussels, finance ministers from the countries in the eurozone said they wanted first to see the effect of stimulus packages that had been passed. Peer Steinbrück, the German finance minister, said: “We are not debating any additional measures.” He said that Germany had recently passed a second stimulus package worth €50bn ($63bn, £46bn) and was also counting on the automatic fiscal stabilisers that increase government spending in a downturn. Jean-Claude Juncker, chair of the “eurogroup” of ministers, said: “The 16 finance ministers agreed that recent American appeals insisting Europeans make an added budgetary effort were not to our liking.” Lawrence Summers, senior economic adviser to Barack Obama, US president, told the Financial Times recently that the Group of 20 countries should agree to boost government demand. On Monday Christina Romer, chair of the White House Council of Economic Advisers, said: “The more that countries throughout the world can move toward monetary and fiscal expansion, the better off we will all be.” But European ministers are concerned that building up more government debt would threaten the stability of the eurozone and say that they want to assess the effects of spending boosts that have already been passed before considering more. The US Treasury declined to comment on their remarks on Monday.

How the Rules Were Rigged – (www.talkingpointsmemo.com) …it turns out that one of the features of the 2005 Bankruptcy bill was to put derivative counter parties at the front of the line ahead of other creditors in bankruptcy proceedings. Actually, from what I can tell, they don't just go to the head of the line. They got to skip the line entirely. As the Financial Times noted last fall, "the 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company's assets until a court decides how to apportion them among creditors." As the article notes, ironically, this provision which Wall Street pushed for and got to protect investment banks actually ended up hastening the collapse of Lehman and Bear Stearns last year. Down in the article there are also the mentions of the entertainingly named "International Swaps and Derivatives Association", one of the lobbies that helped get the change in place.

The student who exposed America's cash for kids scandal - Judges deny kickbacks for imprisoning youths - (www.guardian.co.uk) US politicians and judges proving they are just as corrupt as the banks and investment companies. Less than a minute into the hearing the gavel came down. "Adjudicated delinquent!" the judge proclaimed, and sentenced her to three months in a juvenile detention centre. Hillary, who hadn't even presented her side of the story, was handcuffed and led away. But her mother, Laurene, protested to the local law centre, setting in train a process that would uncover one of the most egregious violations of children's rights in US legal history. Last month the judge involved, Mark Ciavarella, and the presiding judge of the juvenile court, Michael Conahan, pleaded guilty to having accepted $2.6m (£1.8m) from the co-owner and builder of a private detention centre where children aged from 10 to 17 were locked up. The cases of up to 2,000 children put into custody by Ciavarella over the past seven years - including that of Transue - are now being reviewed in a billowing scandal dubbed "kids for cash". The alleged racket has raised questions about the cosy ties between the courts and private contractors, and about the harsh treatment meted out to adolescents.




OTHER STORIES:

More Fascism: GE Capital Planning Sale of US Government Guaranteed Bonds! - (www.nytimes.com) Marketwatch: CNBC was an Easy Target for Jon Stewart - (www.marketwatch.com) Jim Rogers Excellent Extended Interview (28min): "US economic policy is ludicrous and insane" - (www.dailypaul.com) Former Madoff Investors Sell Posessions at Garage Sales - (www.palmbeachdailynews.com) Foreign Scavangers Descend on Detroit - (www.saratogian.com) Tent City: Sacramento - (www.sfgate.com) Rising Dollar Helps the US; Contributes to Crisis Overseas - (www.nytimes.com) Japanese Welfare Roles Hit Record High – (finance.yahoo.com) Symptoms Increasingly Point to Depression - (www.bloomberg.com) Obama's Economic Trainwreck Gathers Momentum - (www.safehaven.com) US Public Transit Usage Hits Five Year High in 2008 - (www.nytimes.com)
Jon Stewart Eviscerates CNBC and Rick Santelli - (www.youtube.com) Bill Maher calls bullshit on CNBC - (www.gawker.com)
Sacramento owners walk away - (www.sacbee.com)
Vast Job Losses Warn Of Upheaval - (www.theday.com)
Bill Seeks to Let FDIC Borrow up to $500 Billion - (online.wsj.com)
Fed Refuses to Release Bank Data, Insists on Secrecy - (www.bloomberg.com)
Backdoor Bailouts for Goldman Sachs - (www.ritholtz.com)
AIG, Where Taxpayers' Dollars Go to Die - (www.nytimes.com)
Investors Gain by Letting Your Mortgage or Company Fail - (www.newgeography.com)
What Contract? - (www.nytimes.com)
Are Federal Regulators To Blame For The Crash? - (www.cbsnews.com)
Freddie Mac, Fannie Mae fee dispute brewing - (www.reuters.com)
The Next Hit: Quick FHA Defaults - (www.washingtonpost.com)
Taxpayers asked to subsidize grotesquely inflated house prices - (www.ponderlicious.com)
The Economy's Blue Screen Of Death - (www.writingshop.ws)
Old style Liberals got things done - (www.newamerica.net)
Franklin D. Roosevelt: Fireside Chat on Banking - (www.presidency.ucsb.edu)
Speculative Debt Leads To Depressions: Obvious in 1902! - (www.loc.gov)
How to Get Through a Depression and Enjoy Life - (Charles Hugh Smith at www.oftwominds.com)