Saturday, November 19, 2011
MF Global, like other brokers, can use customer cash if it puts up sufficient collateral. But the firm did not provide enough backing in late October, essentially taking free loans, said the people briefed on the investigation, who spoke on the condition of anonymity because the inquiry was continuing.
As customers rushed to withdraw money while the firm was teetering on the brink of bankruptcy, that questionable borrowing worsened a liquidity crisis at the firm.
That seems to be why $600 million is missing. You can call this a free loan if you like, but it looks a lot more like stealing to me. If I take a bag of apples out the door of Target and get caught, nobody will buy it if I say, "I intended to replace them with an equivalent number of apples at a later date." People say there was a time when the term "business ethics" wasn't a laughable oxymoron.
Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.
The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, while the top five at Freddie Mac received $28.1 million. And each company has set pay targets of as much as $17 million for its top managers for 2011.
This "overpay the executives" nonsense goes back to when they privatized Fannie and Freddie and put them on the stock exchange, and it created the incentive to compete with the banking industry wolves. Now they are in federal government conservatorship, and supposedly headed for some sort of extinction down the road, but I will be believe that when I see it.
Bill Sugarman, the president of Benchmark Property Management, which represents the association, said he received complaints.
The rules say there can only be one flag per home.
"The only flag that is allowed is an American flag. The problem is he is flying two flags, and until someone changes that there is a problem," Sugarman said.
Wentz refuses to take it down.
"I will not take that flag down. That flag will remain up. I don't care how many fines they want to give me, how many notices they want to give me, I refuse to take that down," Wentz said.
The American Civil Liberties Union weighed in, saying that although homeowners associations are constitution-free zones, it has asked the state to limit what associations can do.
HOA Flag Flap No. 1,386,592. The ACLU is getting involved. Film at 11.
At planned Sunny Isles Beach condo, cars and drivers ride elevator home - Business - MiamiHerald.com
At planned Sunny Isles Beach condo, cars and drivers ride elevator home - Business - MiamiHerald.com
Pull over into the designated space. Turn off the engine. And enjoy the oceanfront view as you escalate in a glass elevator that takes you, while you are sitting in your car, to the front door of your apartment.
No, this is not the latest Disney ride.
The $560 million Jetsonesque tower will rise in Sunny Isles Beach as part of a collaboration between Germany-based Porsche Design Group and a local developer, Gil Dezer. It likely will be the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.
Read more: http://www.miamiherald.com/2011/11/17/2507333/at-planned-miami-beach-condo-cars.html#ixzz1eAJGJqYt
Here's the best part: "Residents will be able to see their cars from their living rooms. “So people with fancy cars and antiques, they will actually have a really nice view of them,’’ Dezer said. Units will range from 3,800 to 9,500 square feet and could cost up to $9 million.
I can see my car, too. All I have to do is look out the living room window. But I don't spend much time watching it because it just sits there looking blue. I gather the market for these units would be limited to people like Charles Montgomery Burns from The Simpsons
Before 2008, the zeitgeist was deregulation, and Wall Street succeeded in getting deregulation. Frank Partnoy calculated for me that in 1980, 98 percent of financial assets traded in our economy were traded subject to the normal rules of transparency, anti-fraud requirements, basic exchange-based rules of the New Deal. By 2008, 90 percent of the assets traded were traded invisibly because they were not subject to any of these basic requirements of transparency and anti-fraud exchange-based obligations.
But the really astonishing thing is that after 2008, after we suffered the biggest collapse since the Depression, after every independent analyst had said there was a link between the structure of deregulation and the collapse, after the dean of deregulation—Alan Greenspan—confessed he made a mistake in assuming that the self-interest of the banks would lead them to behave virtuously rather than behave in a way that would drive to their maximum profit, after all of that, even then, Wall Street was able to blackmail the Democrats and the Republicans into handing them essentially a “Get Out of Jail Free” card and effect no fundamental change in the architecture of our financial system. That is, frankly, terrifying.
Well put, Professor Lessig.
Friday, November 18, 2011
David Mooney, chief executive officer of Alliant Credit Union in Chicago, one of the nation's larger credit unions, used to work at one of Wall Street's top banks, JPMorgan Chase. There's a vast cultural gap between Wall Street and his new world, he says: Old friends from the Street, he says, now jokingly refer to him as a "socialist." A credit union is supposed to be run in the interests of all members, he says, while commercial bankers tend to see consumers as customers who can be "exploited" by layering on more fees.
Says Mooney: "I don't say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization."
Thanks for the honesty.
The key Righthaven case, in which the details of the strategic agreement between Righthaven and Stephens Media were finally released, was Righthaven's lawsuit against the Democratic Underground. DU, with help from lawyers at the EFF and Fenwick and West, countersued Stephens Media, arguing that it, not Righthaven, was really behind the lawsuits. That resulted in the release of the agreement between the two companies, and the court dismissed Righthaven from the proceedings... while keeping Stephens Media in the case. The Democratic Underground filed a motion for summary judgment... and in its response, Stephens Media has almost totally capitulated -- admitting that the Democratic Underground's use was "fair use"
You can read the court documents yourself.
Privatization is a murky option because city councils can be pressured to sign deals that prove detrimental in the long run, says Evan McKenzie, a political scientist at the University of Illinois at Chicago.
“Inevitably the details are buried, and the details are everything,” Professor McKenzie says.
He points to the deal former Chicago Mayor Richard M. Daley made with Morgan Stanley to sell off the city’s 36,000 parking meters. The city council was given little time to review the contract, which promised the city an immediate payment of $1.15 billion in exchange for owning and operating the parking meters until 2083.
It was only in the deal’s wake that the public learned the meters were grossly undervalued. Today, the city does not benefit from or control the continued rate hikes imposed by Morgan Stanley, and the situation is considered one of the greatest blunders of Mr. Daley’s legacy.
McKenzie warns that Detroit should learn the lesson from Chicago and “not grasp at straws.” “The history of these short-term fixes is very dismal,” he says. “If you privatize a previous public function, people no longer have political control over it. Then you have a monopoly.”
The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties. The attorney general's office is also seeking details of Fannie and Freddie's mortgage-servicing and home-repossession practices, according to a person familiar with the matter.
In addition, investigators want to learn more about the companies' purchases and sponsorship of securities holding "toxic mortgages" in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity.
Must be nice having an attorney general (Kamala Harris) who dares to take on these behemoths. She is resisting Obama administration pressure to sign off on the ridiculous multi-state slap on the wrist settlement with the big banks that have committed millions of cases of mortgage fraud and perjury from coast to coast.
Copper thieves shut down street lights across North Highlands in recent weeks, and residents who have been living in darkened neighborhoods for nearly two months are losing patience with city officials.
Two North Highlands residents, Dorothy McEachern and Dauna Garton said their street has remained without lighting for seven weeks, and the fear that the darkened neighborhood could attract criminals is building.
Chicago and its old inner-ring suburbs have thousands of homes with solid copper gutters and downspouts, and I have heard of people stealing them. Seems like a hard crime to get away with, though.
We have been living in a society where debts, rather than rights, have been the major means for accessing basic social goods like housing, education, and health care. That social model was built around the assumption that while real incomes stagnated and the state did not directly provide many basic goods through universal entitlements, cheap credit would do the trick instead.
And in the case of housing, I think many more people will opt for being permanent renters rather than borrow hundreds of thousands of dollars to purchase an asset that doesn't appreciate and is very costly to maintain--whether you do it individually or collectively, with CID housing.
Thursday, November 17, 2011
The Nevada attorney general has indicted two midlevel staffers at a mortgage document company, Lender Processing Services, on a whopping 606 counts of felony and gross misdemeanor for directing employees to forge signatures and falsely notarize documents used to illegally foreclose on Nevada homeowners.
Nevada's is the first criminal indictment since last year's discovery of the nationwide "robo-signing" scandal, in which mortgage servicing companies and banks were processing foreclosures en masse at lightning speed by signing documents they neglected to review and falsifying information.
This has been going on all over the nation, thousands of times per day, and this is the first time anybody has been charged with a crime. Absolutely unbelievable. I know somebody is going to comment that the defrauding of HOA/condo residents is infinitely worse, but it isn't. You have to get some sense of proportion here. The scope of mortgage foreclosure fraud is on a different order of magnitude. Millions of people--not hundreds, or thousands--millions of people have been tossed out on the street over the last three few years, and the evidence shows that an enormous percentage of these cases involved perjured affidavits, nonexistent original notes, and kangaroo "rocket docket" courts. There are millions more foreclosures waiting to be filed.
And this comes after the subprime mortgage racket that produced all the toxic mortgage backed securities that wrecked the financial sector, crashed the economy, and tanked housing prices for a decade. And then there is the mortgage rescue fraud racket, run by some of the same crooks who used to run the subprime racket.
HERCULES, Calif. -- There are 918 names on 'the list.'
People from every walk of life are on it, with one thing in common: They all wanted the chance to take advantage of affordable housing offers in the small city of Hercules.
Many have been waiting more than five years for a call that would have given them entrée to sparkling new digs in Sycamore North, a $70 million mixed-use housing development in this struggling community of 24,000 residents northeast of San Francisco.
They're still on hold, waiting for a project that looms over a mostly barren downtown, its only occupant a security guard living in a small trailer.
Hercules has been teetering on the brink of bankruptcy for a year or so.
U.S. banks increased sales of insurance against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the first half of 2011, boosting the risk of payouts in the event of defaults.
Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show.
This is amazing. US banks are going long on European debt by writing $500 billion in credit default swaps on it. The "too big to fail" US banks, having been told by Dodd-Frank that there is no more "too big to fail," are setting themselves up to demand another bailout if they have to pay gazillions to holders of European debt. This redefines the word "arrogance."
Wednesday, November 16, 2011
The central Minnesota town of Foley tried having its own police department and contracting with the county sheriff's department for law enforcement.
Now, in an effort to save money, the town with a population of 2600 is making a controversial move: it plans to employ a private security company to patrol its streets.
Nationwide, other cities have supplemented traditional police with contracted officers, said John Firman, director of research for the International Association of Chiefs of Police.
Read more: http://www.theage.com.au/world/hard-times-forcing-desperate-measures-20111115-1nh3o.html#ixzz1dvPbytSS
What I find amusing about all these "effort to save money" schemes is that they have a peculiar way of costing a whole lot of money down the road. Ask Jefferson County, Alabama, where they tried to pay for the most expensive sewer system in the galaxy through some neat money-saving tricks recommended to them by JP Morgan Chase. The county just filed for bankruptcy.
Newt Gingrich Freddie Mac Fees: Former House Speaker Reportedly Received At Least $1.6 Million From Housing Giant
In recent months, GOP presidential candidate Newt Gingrich has strongly criticized Freddie Mac and sister company Fannie Mae, as well as Democrats in Congress that he claims played a key role in the collapse of the housing market. And yet two former Freddie Mac officials recently told Bloomberg that Gingrich made between $1.6 million and $1.8 million in consulting fees from the mortgage company.
Does that make the Pillsbury Doughboy a hypocrite? Actually that horse ran out of the barn back in the 1990s, when he was cheating on his wife while persecuting Bill Clinton for cheating on his wife.
The Clare at Water Tower, a high-rise that opened in 2008 at 55 E. Pearson, filed for bankruptcy Monday. Its owner, the nonprofit Franciscan Sisters of Chicago Service Corp., defaulted on about $216 million in debt because only about a third of its 248 independent living condos are occupied. A spokeswoman said the sisters hope to keep control of the project. The bankruptcy filing said the sisters have secured about $12 million in financing for interim operations. Judy Amiano, president of the corporation, said “resident and health care services will continue uninterrupted” during the bankruptcy.
I am compiling a list of all the condo projects and HOAs in the US that have filed for bankruptcy. If any of you out there in cyberspace have the names and locations of any such associations, please send them to me at email@example.com or send them in a comment.
Tuesday, November 15, 2011
Georgia Judge Dennis Blackmon is fed up with bailed-out banks refusing to help strapped homeowners.
"Sometimes, only the courts of law stand to protect the taxpayer. Somewhere, someone has to stand up," Blackmon wrote in a five-page Nov. 2 order in Carroll County Superior Court. "Well, sometimes is now, and the place is the Great State of Georgia. The defendant's motion to dismiss is hereby denied."
Blackmon's order shot down U.S. Bank's request to throw out a complaint from Georgia homeowner Otis Wayne Phillips, who had tried to get a mortgage modification from the bank. Phillips could not be reached for this story.
Here and there you can see signs that some judges are just fed up with the perjury, fraud, and arrogance of the mortgage foreclosure firms.
Monday, November 14, 2011
Shares in the store, priced at $100 each, were marketed to local residents as a way to “take control of our future and help our community,” said Melinda Little, a Saranac Lake resident who has been involved in the effort from the start. “The idea was, this is an investment in the community as well as the store.”
It took nearly five years — the recession added to the challenge — but the organizers reached their $500,000 goal last spring. By then, some 600 people had chipped in an average of $800 each. And so, on Oct. 29, as an early winter storm threatened the region, the Saranac Lake Community Store opened its doors to the public for the first time. By 9:30 in the morning, the store, in a former restaurant space on Main Street opposite the Hotel Saranac, was packed with shoppers, well-wishers and the curious.
This is what "voluntary" looks like. Real people make a real decision to commit $100 per share to start their own real community department store. It is essentially the 180 degree opposite of the corporate paternalism that brings so-called "community associations" into existence. Without the paternalism, we would have a much smaller number of common interest housing developments, but they would be real.
Sunday, November 13, 2011
Occupy Homes: New Coalition Links Homeowners, Activists in Direct Action to Halt Foreclosures | Truthout
A loose-knit coalition of activists known as "Occupy Homes" is working to stave off pending evictions by occupying homes at risk of foreclosure when tenants enlist its support.
This could get interesting.
Companies that process mortgages said they were so overwhelmed with paperwork that they cut corners.But now, as county officials review years' worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures -- either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork -- on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found."Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C.In Guilford County, where Greensboro is located, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures.
Isn't this special? Turns out perjury and falsification of evidence were standard operating procedure long before the subprime explosion.
Here in Merced, a city in the heart of the San Joaquin Valley and one of the country’s hardest hit by home foreclosures, the downturn in the real estate market has presented an unusual housing opportunity for thousands of college students. Facing a shortage of dorm space, they are moving into hundreds of luxurious homes in overbuilt planned communities.
This is better than having drug dealers grow pot in them (see below)...although with college students living in these units, that is probably going on as well.
Empty houses -- those either awaiting foreclosure or where the owners have moved out for other reasons -- might as well have a "kick me" sign on them. Actually, make that "vandalize me" sign. They are frequently the targets of squatters who move in illegally, scammers who claim they own them and rent them out to unsuspecting tenants, or just plain old garden variety thieves who break in and steal the valuables right down to the copper plumbing and refrigerator.
The foreclosure tsunami has caused many neighborhoods to collapse socially, taking down many a condo association or HOA with it. These neighborhoods are now disaster areas.
Dramatic uptick in Sarasota foreclosure filings | November 7, 2011 | Michael Braga | Inside Real Estate
Top lenders in Sarasota county filed 102 more early stage or lis pendens filings in October than filed the month before – a whopping 46 percent increase and clear sign that lenders are putting their robo-signing problems behind them.
This came from foreclosure defense attorney April Charney by way of Shu Bartholomew. It appears that the foreclosure mill is about to crank itself back into high gear. If it is happening in Florida, it will soon be happening everywhere else.
Las Vegas has a pot home problem. And like many of the region's maladies, it's tied to the housing slump.
Last year, authorities took down 153 indoor grow sites in Nevada and seized more than 13,000 plants, compared with 18 sites and 1,000 plants in 2005, the U.S. Drug Enforcement Administration said. (By comparison, California busted 791 indoor sites last year.)
"You can't have crime without opportunity," said William Sousa, a criminologist at the University of Nevada, Las Vegas. "And all those empty homes present an opportunity for criminal activity."
You have to admire that American entrepreneurial spirit. When life gives you lemons, make lemonade. When the subprime mortgage crash gives you thousands of empty foreclosed homes, turn them into marijuana greenhouses.