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How to erase a debt that isn't there - (www.nytimes.com) “We are canceling the
remaining amount you owe Chase!” says a letter that JPMorgan Chase sent recently to
thousands of home loan borrowers.
“You are approved for a full principal forgiveness of your Home Equity
Account,” says another, from Bank of America. Jackie Esposito, of
Guilford, Conn., got a letter like that. But she wasn’t elated — because she
doesn’t owe the money anymore. She and her husband filed for bankruptcy three
years ago. The roughly $64,000 they owed Chase has been legally wiped out. What’s
going on? Cast your mind back to February. Five of the nation’s big banks,
including Chase and Bank of America, agreed
to pay $25 billion to settle state and federal claims over
questionable mortgage practices
and promised to work harder to help borrowers who were in trouble. To prod the
banks, the government said it would give them credits against the amounts they
agreed to pay.So, to the ire of customers who couldn’t get banks to work with
them before, banks are now forgiving debts that no longer exist.
Widening JPMorgan CIO Loss Could Be Next ‘Shock’ Event - (www.silverdoctors.com) The market seems to
have completely forgotten the fact that JPM’s massive CIO positions have yet to
be closed. Unfortunately for Mr. Dimon, at least $90 billion in potential
losses remain, and the strategy of slowing unwinding the positions will blow up
in The Morgue’s face and exponentially exacerbate JPM’s losses with any further
downturn in the economy. The JP Morgan (JPM) trading blunder could
result in a $100 billion loss, a contagion of its massive portfolio, and even
the wipeout of its entire asset base. Even worse, these
extremely risky and potentially-illegal actions on behalf of the CIO office and
the “London Whale” could be the unexpected “shock” that breaks the market, derails the Fed’s
huge monetary stimulus, and sends us back into a global recession. There is one event
that may ultimately solve the mystery of the global economy. This event would
not only plunge the economy back into a deep recession and lose investors
hundreds of billions of dollars, but it could bring about the collapse of some
of the world’s largest financial institutions and even render central bank
stimulus and QE completely ineffective and futile. This event is by no means a
guarantee; its probability is even likely under 5 percent. But this event has
all the necessary ingredients to culminate into a major panic. Together with
slowing global economies and an extremely unstable financial system, this could
be the next Lehman Brothers.
Financial
Guru Max Keiser Calls Actor John Cusack A Financial Terrorist - (www.mfi-miami.com) - If you didn’t catch today’s Keiser Report on RT,
Max Keiser and Stacy Herbert talk about my article last week about how John Cusack’s buddies over
at Mortgage Resolution Partners (MRP) want to use eminent domain to seize
performing mortgage contracts. Max and Stacy also showed the clip
from the interview Max did with the Lois Lane of finance journalism, Teri Buhl back
in July after her trip to San Bernadino to investigate MRP’s
push to get San Bernadino to go along with this. (Max and Stacy talk about
MFI-Miami at 9:05). Max Keiser basically agrees with me, Teri Buhl and
Felix Salmon that their eminent domain plan is an elaborate scam. MRP is using
people like actor John Cusack and Arianna Huffington into misleading cities and
foreclosure activists about MRP’s plan. What MRP wants to do is not seize
abandoned homes and homes already in foreclosure like they claim but to seize
performing mortgage contracts where the homeowner only faces a negative equity
position so MRP can sell the mortgage loans to FHA. Although the
homeowners are upside down, their loans are still contributing to the positive
cash flow of the mortgage backed securities Trust that holds the note.
October Stock Plunge, Gold & The Fear Index - (www.kingworldnews.com) Richard Russell continues: “We're now dealing
with October, which historically is both a down month and a bottoming month. As
for my position, I continue to believe that the primary trend of the market
turned bearish in 2007, and that it is still bearish (although the bear trend
has been suspended for awhile due to the Fed's actions). The VIX, often called
the ‘fear index,’ is a forward looking metric (it's actually a measure of the
implied volatility of the S&P index over the coming 30 days). The VIX
in recent months has been fluctuating in a very low area below 20 (see chart
below). Back in June the VIX jumped up to 26.66, then settled back to its
low range. In past history, extended periods of very low volatility have been
followed by major upward thrusts in the VIX. The cycles in the VIX tend
to be repetitive. Following the recent bouts of extremely low volatility,
a period of super-high volatility may be anticipated.
IMF: recovery will take 'at least' a decade - (www.telegraph.co.uk) In an interview published
today, Olivier Blanchard told Hungarian website Portfolio.hu:
It's not yet a lost decade... But it will surely take at least a decade from
the beginning of the crisis for the world economy to get back to decent shape. He
also said that Germany would have to get over its fear of inflation
if it is to help weaker eurozone countries recover. A somewhat higher inflation
rate in Germany should simply be seen as a necessary and desirable, relative
price adjustment (desirable even from the narrow point of view of Germany, as
this real appreciation increases the real income of the German people). Given
overall demand conditions and the ECB’s strong mandate to ensure price
stability, this is not the beginning of hyperinflation...
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