The great interest rate rip off part 1

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http://market-ticker.org/akcs-www?post=168273

 

Here's history and fact:

Ten Year Treasury. As soon as the QE buying began, interest rates did not go down, they went up.

The dollar. As soon as QE began the dollar collapsed. When the threats began, it once again started a second process of collapse - a process that continues today, and is now headed to historical lows.

The fact is that Japan has spent 20 years playing the QE game, and has failed to lift their economy out of recession. Growth has not returned and their economy has failed to find its footing and truly recover. The Nikkei is trading at 25% of its historical high - 25 years into this mess.

There is no solution found except through normalization of the interest-rate premium to borrow and forcing the fraudulently-issued credit into the open.

Japan has spent that 25 years trying to prevent that from happening. They have buried all the bad credit - the fraudulent credit, and their banks - rather than allowing it to come to the surface and default.

We're doing the same thing.

The fact is that the bubble blown in housing was no accident. The foundational securities - the REMICs and MBS - that the bubble was predicated on were fraudulent. Huge percentages of the loans did not meet the representations and warranties when they were sold to investors. These lies were inherently necessary as nobody would have bought these securities otherwise.

On top of that artifice was then built more fraudulent artifices. CDOs, CDO^2s, all sorts of complex gimmicks. All bogus. Every one of them.

But the grand-daddy was not just paying off AIG's bets with taxpayer money.

No, the purpose of that act was concealing the fraudulent underpinning behind all these loans.

Ask this question folks: why do you need "robosigners" and bogus affidavits if you have the actual paper that documents the debt?

You don't. You file with real affidavits and real paperwork.

So why doesn't that paper exist?

This was not about being "go go" during the bubble years. It's not hard to put in place the systems and structures to properly comply with state law and IRS regulations on these instruments.

But if the actual paper - the loan files along with the notes - passes to the Trust as is required, and is really endorsed, it can then be audited.

Then, when there are losses, the fact that the trust was sold a bill of goods is exposed and the entity that did the selling is in trouble. A lot of trouble.

 

Charts and more at the link.

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Janet: You're So Close....

As Janet Tavakoli notes over at Huffington Post:

Landesbank Baden-Wuerttemberg, a German state-owned bank, is suing Goldman Sachs over a $37 million loss on its investment in its share (a tranche) of a CDO called Davis Square VI. TCW, the manager for all of Goldman Sach's Davis Square deals, is also being sued:

"Goldman knew at the highest levels of its organization that its representations to LBBW Luxemburg that the notes merited triple-A ratings and were high grade were blatantly false," the Stuttgart-based bank said. "Goldman committed fraud and, or, was negligent in marketing and selling the notes to LBBW Luxemburg."

Right.

Now, who knew that the REMICs and MBS being put together (which were the foundation for all these CDOs, CDO^2s and other hinky crap) were not "high grade" and did not merit "AAA" ratings?

How many notes were actually not conveyed but rather are sitting in an originator's warehouse, were shredded, or were shipped overseas? This, incidentally, is why we have a mess with foreclosures right now - the servicers don't have the notes (properly endorsed) with which to file their forelosures, despite the pooling and servicing agreements saying they will and do, or they'd just file the actual "wet signature" notes bearing those endorsements.

Why would the originators fail to properly convey all this stuff?

Was it pure laziness in the "go-go" years or something more?

Well, consider this one Janet (and everyone else).....

You can't audit what you don't have, can you?

PS: This is not intended to be "snarky", dismissive or anything of the sort; yes, I'm aware you've been hollering on this in various professional venues. But until it makes the mainstream press in a cogent form such that the essence of how this happened and is STILL being covered up is laid out in a form that the common man can understand, and why he should care - such as what's now happening where people's homes are literally being stolen, we cannot hope to have anything done about it. The problem isn't yours Janet - it's that the common man on the street reads at a 7th grade level on a good day and he just doesn't understand it.

 

Lovely, still at least no one has been jailed.

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http://uk.finance.ya...570433.html?x=0

 

Banks' $4 trillion debts are 'Achilles heel of the economic recovery', warns IMF

 

Philip "Balders" Aldrick, 14:49, Tuesday 5 October 2010

More taxpayer support is needed to ensure global financial stability despite the billions already pledged, the International Monetary Fund has warned, as banks remain the achilles heel of the economic recovery.

 

Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report . Governments will have to inject fresh equity into banks particularly in Spain, Germany and the US as well as prop up their funding structures by extending emergency support.

 

Progress toward global financial stability has experienced a setback since April ... [due to] the recent turmoil in sovereign debt markets, the IMF said. The global financial system is still in a period of significant uncertainty and remains the Achilles heel of the economic recovery..../

 

The IMF estimates in its baseline scenario that Britains debts will reach 86.4pc of GDP in 2015. But should the austerity measures result in growth of 1pc less than the baseline, debts will rise to 99.2pc of GDP in the same period.

 

http://www.telegraph.co.uk/finance/economics/8043800/Banks-4-trillion-debts-are-Achilles-heel-of-the-economic-recovery-warns-IMF.html

 

........

 

Although the IMF does not mention individual countries, it is clear it has concerns about the UK. According to the Bank of England, British banks need to refinance £750bn-£800bn of funding by the end of 2012, £285bn of which is emergency support that expires in the same period.

 

.........

 

Even US banks may need an extra $13bn of capital if “real estate prices fell significantly”. The research shows that the UK has been relatively prudent on bad debts and capital, having wirtten off all but $50bn of the bad debts identified by the IMF – just 10pc of the total.

 

.........

 

The IMF estimates in its “baseline” scenario that Britain’s debts will reach 86.4pc of GDP in 2015. But should the austerity measures result in “growth of 1pc less than the baseline”, debts will rise to 99.2pc of GDP in the same period.

 

http://www.imf.org/external/pubs/ft/gfsr/2010/02/index.htm

 

Excutive Summary PDF

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Bernanke says Lawmakers Should Consider Rules on Fiscal Limits; Expect Hissy Fit from Krugman; Bernanke ****es in the Wind

 

 

 

Proving that he far more of a Monetarist clown than a Keynesian clown, Bernanke Calls on Lawmakers to Consider Rules on Fiscal Limits

Federal Reserve Chairman Ben S. Bernanke called on U.S. lawmakers to consider rules limiting federal spending, annual deficits or accumulated debt to curtail the risk of a fiscal crisis.

 

“Well-designed rules can help promote improved fiscal performance,” Bernanke said today in a speech in Providence, Rhode Island. A rule “could provide an important signal to the public that the Congress is serious about achieving long-term fiscal sustainability, which itself would be good for confidence,” he said.

 

Bernanke provided one of his most detailed prescriptions yet for reducing the record federal budget deficit. He said in congressional testimony in June that unless the U.S. makes a “strong commitment to fiscal responsibility,” the country in the long run will have neither economic growth nor fiscal stability.

 

“It is crucially important that we put U.S. fiscal policy on a sustainable path,” Bernanke said at the Rhode Island Public Expenditure Council’s annual dinner, where he was invited to speak by Senator Jack Reed, a Democrat from Rhode Island and member of the banking committee.

 

“The only real question” is whether adjustments to taxes and spending will come from a “careful and deliberative process” or from a “rapid and painful response to a looming or actual fiscal crisis,” Bernanke said.

 

Bernanke cited Switzerland, Sweden, Finland, the Netherlands, Canada and Chile as countries that improved their budgetary performance by using fiscal rules. He didn’t elaborate on what kinds of spending, deficit or debt limits would be best.

 

“I do think that the additional purchases -- although we don’t have precise numbers for how big the effects are -- I do think they have the ability to ease financial conditions,” Bernanke told the students.

Fiscal Sustainability and Fiscal Rules

 

The above excerpts are from a speech Bernanke gave at the Annual Meeting of the Rhode Island Public Expenditure Council, Providence, Rhode Island.

 

The speech was on Fiscal Sustainability and Fiscal Rules

 

Expect Hissy Fit From Krugman

 

Paul Krugman, flag bearer for the Keynesian clowns, is without a doubt having a hissy fit at the thought of any step, no matter how small, regarding Bernanke's statement “It is crucially important that we put U.S. fiscal policy on a sustainable path.”

 

Krugman might object to that characterization, by claiming he is all in favor of fiscal prudence, but only after Keynesian stimulus leads to a full recovery.

 

The reality is Keynesian clowns in Congress and Monetarist clowns at the Fed have both wrecked the economy to a point that severe pain is not avoidable. Indeed, the unemployment rate and bank lending both say the economy is following a path of severe pain.

 

Monetarist Nonsense

 

Bernanke claims Quantitative Easing will "ease financial conditions.” Forgive me for asking the obvious, but what the hell needs easing?

 

Mortgage rates are at all time lows in spite of the fact that housing itself is in the gutter and risk of default is high, junk bonds are back to par, and the ability for corporations to get financing for total garbage is at or near historic highs.

 

If anything, Bernanke has ignited a bubble in junk bonds. The one thing Bernanke has not done is ignite bank lending.

 

More at the link.

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Japanese Politicians fed up with Deflation, Challenge BOJ Independence

 

 

 

Things are simmering once again in Japan. The Yen is approaching all-time highs and Japanese politicians have had enough of deflation. Another round of quantitative easing is now on the front burner.

 

MarketWatch reports Bank of Japan may buy asset-backed paper

Japan's central bank may announce plans to buy asset-backed securities when it issues its policy decision later Tuesday, the Nikkei business daily reported. The newspaper had reported earlier in the week that the Bank of Japan may expand its low-interest loans to financial institutions. But in the report Tuesday, the Nikkei said "a growing number of board members argue that the bank should go further" and begin buying securities backed by loans to small and medium-sized enterprises. The report, which didn't cite sources, said such a move would be aimed at making more funds available to the private sector.

BOJ Independence Under Attack

 

Bloomberg reports BOJ Independence Challenged as Deflation Continues

Increasing risks to Japan’s recovery prompted what may become the biggest threat yet to the Bank of Japan’s independence as politicians seek to redress its failure to end the deflation entrenched in the economy since 1998.

 

Your Party, an opposition group, plans to submit a bill in the Diet session running through December that would give the government a greater role in BOJ policymaking. Ichiro Ozawa, a former challenger to Prime Minister Naoto Kan whose calls for currency intervention and enlarged fiscal stimulus have been adopted by Kan, made a similar proposal last month.

 

The debate comes after BOJ Governor Masaaki Shirakawa refused to expand purchases of government bonds this year even as deflation persisted. The bank may today instead widen a 30 trillion yen ($358 billion) program providing loans to banks, according to 14 of 17 economists surveyed by Bloomberg News. The effort has so far failed to stanch a contraction in lending.

 

Shirakawa’s intransigence has incurred the ire of politicians pressing the bank to boost efforts to end deflation, which erodes corporate profits, makes debt harder to pay back, and enhances the yen’s lure by lifting its purchasing power. The GDP deflator, a gauge of prices across the economy, has fallen 14 percent since 1997, according to data compiled by Bloomberg.

 

“Japan is the only industrialized country which has had consumer price changes of minus or zero over the past decade,” Keiichiro Asao, head of policy research at Your Party, said in an Oct. 1 interview in Tokyo. “If the central bank is a guardian of stable prices, it shouldn’t allow price declines.”

 

The BOJ, which has kept its benchmark interest rate at 0.1 percent since December 2008, currently purchases 1.8 trillion a month of government bonds. At the current pace of buying, the bank’s self-imposed ceiling for bond holdings will be reached in 2014, according to Barclays Capital estimates.

 

The Federal Reserve, by contrast, has eschewed any such ceiling and indicated last month it’s prepared to add to its holdings of U.S. Treasuries. At the same time, the Fed’s balance sheet, at $2.3 trillion, is smaller than Japan’s relative to the size of the economy, at about 16 percent, according to data compiled by Bloomberg. The BOJ holds about $1.5 trillion, or about 26 percent of Japan’s GDP.

Bank Balance Sheets Compared

 

ZeroHedge Asks Is The BOJ Preparing An Imminent Announcement Of Its Own Latest (And Certainly Not Greatest) QE?

The BOJ's balance sheet, which has been relatively flat when compared to peer central banks, especially since FX interventions will likely be sterilized, is about to explode and the JPY will plunge once the carry traders reorient themselves to shorting the original carry currency of choice.

 

As a reminder, here is how Japan has demonstrated remarkable restraint (at least recently) as everyone else has been printing.

 

 

In other words, the BOJ will continue to use FX intervention as an acute weapon every time the USDJPY drops below 83, and gradually implement asset-backed purchases as the chronic intervention against endless deflation.

 

Because this time it will be different. And, because, as the G-7 people promised, and everyone believed them, there will be no competitive devalution. Ever.

Politicians Know This Time is Different!

 

It's hard not to laugh out loud at the sarcasm in the last paragraph above.

 

Not only did QE fail to do what the Bank of Japan wanted (raise prices), QE has also failed to stimulate bank lending as Bernanke wants. Moreover, Japan's currency intervention efforts have not accomplished anything, ever.

 

But yeah... this time is different, because .... politicians know better!

 

By the way, this exercise in stupidity by all the central banks in question, shows just how hard it is to destroy a currency, even when you try (except against gold of course).

 

Everyone is racing to devalue their currency, this is likely to end in implosion.

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http://www.zerohedge...f-destruct-2012

 

Taleb is merciless when it comes to politicians like President Obama, Congress and The Fed chairman: You can’t trust any of them. Earlier Bernanke’s reappointment “stunned” Taleb: He “doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical,” wrote Taleb in HuffPost. But it’s “the Senators appointing him who are totally irresponsible ... The world has never, never been as fragile,” and we’re stuck with an economist running The Fed whose methods make “homeopath and alternative healers look empirical and scientific.”

 

Obama’s reappointment of Bernanke left Taleb so distraught he “withdrawing into the Platonic tranquility of my library, to work on my next book, find solace in science and philosophy, and … structure trades betting on the next mistake by Bernanke, Summers and Geithner.”

 

Taleb’s “metric” essentially warns Americans to trust no one, certainly not Washington and Wall Street insiders. The vast majority fail his simple metric, “Did someone predict the last crisis before it happened? ... If the answer is no, I don’t want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say’.”

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8045133/IMF-chief-fears-risk-of-currency-war-after-Japans-zero-interest-rate-move.html

 

The Bank of Japan’s surprise move to reinstate zero interest rates has led to a warning of the danger of a currency war from the head of the International Monetary Fund.

 

Dominique Strauss-Kahn warned that moves by central banks across the world to cut interest rates and carry out billions of pounds worth of quantitative easing could upset the global economy recovery as currencies chased each other ever lower.

 

In an interview with the Financial Times, he said: “There is clearly the idea beginning to circulate that currencies can be used as a policy weapon. Translated into action, such an idea would represent a very serious risk to the global recovery ... Any such approach would have a negative and very damaging longer-run impact.”

 

Japan surprised markets by adopting a zero interest rate policy and announcing plans for quantitative easing (QE) in an attempt to inject fresh stimulus into the economy.

 

The move led to an immediate fall in the value of the yen against the dollar.

 

The Japanese central bank has pledged to buy assets worth five trillion yen (£38bn) and cut its overnight rate to between zero and 0.1pc,from 0.1pc, reinstating the so-called “zero interest policy” that the Bank only ended in July 2006.

 

It will keep its benchmark rate effectively at zero until establishing price stability, adopting a similar loose policy commitment to the US Federal Reserve.

 

The size of the QE programme roughly matches the extra stimulus package desired by the Japanese government. Japan is running out of options as it seeks to reinvigorate its economy in the face of national debt running at twice the national output – the largest of the advanced economies.

 

It is also trying to counter the yen’s strength, which has been one cause of the country dipping in and out of deflation over the past 15 years. Lingering concerns about the global economy pushed the gold price up 1.8pc to another record high, of $1,340.20 an ounce.

 

Later Strauss-Kahn admitted that the Pope was Catholic and bears use the woods for a toilet.

 

Shocking the IMF is fearing a currency war, totally unexpected. I mean who could have foreseen this outcome?

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http://www.telegraph.co.uk/finance/economics/8044422/Institute-of-Directors-urges-Bank-of-England-to-inject-extra-50bn-into-UK-economy.html

 

The organisation wants a further £50bn in quantitative easing (QE), on top of the £200bn already injected into the economy to boost the money supply.

 

"Monetary policy needs to help ensure a sustainable recovery is in place before the public sector recession begins," said Graeme Leach, IoD chief economist

 

"Yes, inflation is above target now, but a double-dip recession would raise the spectre of deflation. The growth threat is more of a danger than inflation."

 

Despite better than expected services sector data yesterday, industry surveys have been pointing to a slowdown in the UK recovery.

 

Adam Posen, a member of the Bank's Monetary Policy Committee (MPC), last week argued publicly for more QE to stave off the threat of a lost decade akin to 1990s Japan, a call backed by the British Chambers of Commerce.

More calls for free money as this has always worked in the past.

 

Wow so we need a sustainable recovery before the public sector recession begins, genius. I can see why he's in this post.

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http://www.nytimes.com/2010/10/06/business/economy/06tarp.html?_r=1&ref=business

 

The Treasury Department expects to lose $29 billion on the federal bailouts stemming from the financial crisis, with most of the losses in its housing finance program and the auto rescue.

 

In a report released on Tuesday, the administration said it expected a $17 billion loss from its investments in General Motors, Chrysler and the auto finance companies, as well as a $46 billion loss from housing programs like the mortgage modification program known as the Home Affordable Modification Program.

 

The new figures, which include profits that offset some of the losses, come just as the Obama administration tries to wind down the bailout program known as the Troubled Asset Relief Program, or TARP. Last week, the government announced a plan to exit its investment in the insurer the American International Group.

 

Treasury officials have declared the bailout a success, emphasizing that much of the program’s money has been returned and that losses are now likely to be less than once expected. The cost, the report says, is far below the $350 billion the Congressional Budget Office once estimated.

 

“Because of the success of the program, TARP will likely cost a fraction of this amount,” the report said.

 

Recently, the Congressional Budget Office put the cost at $66 billion. And, after the bailout, the government will still be left with its investments in Fannie Mae and Freddie Mac, the government-backed housing finance companies. The report said Fannie and Freddie were expected to cause “substantial losses,” but it noted that they were financed using other funds, not the troubled asset funds.

 

The Treasury arrived at its figure by adding in profits that it expects to receive on shares of A.I.G. stock. Those shares were given to the Treasury by the Federal Reserve Bank of New York, and the Treasury expects they will yield a $22 billion profit. Without those shares, the Treasury would have reported a $51 billion loss, rather than a $29 billion loss, the report said.

 

In total, the Treasury has received back about $204 billion of the bailout funds, or just over half of the money it doled out. The report segregated the money given out under the Bush administration — $294 billion — from the $94 billion awarded under the current administration. All of the large bank bailouts were made under the prior administration, and since then, the money was invested in small banks, automakers, housing programs and A.I.G., the report said.

 

How nice especially as Freddie/Fannie are using other funds so those losses don't really count.....

 

Still I'm sure it's all contained and the recovery can progress full pace ahead.

[interestrateripoff]

Breaking news

 

• Marathon to sell Minnesota downstream assets - Reuters
  
• GE buying again, signs energy,finance deals - Reuters
  
• Reuters Summit-UPDATE 1-Sun Capital sees more turnaround deals - Reuters
  
• US STOCKS-Wall St slips after semis' downgrade hits tech - Reuters
  
• Motorola sues Apple for patent infringement - Reuters
  
• Blackstone says bid for Dynegy 'full and fair' - Reuters
  
• IMF's Vinals praises Greece for fiscal cuts - TV - Reuters
  
• Markets must be allowed to drive currencies - U.S. - Reuters
  
• Conoco says COO Carrig, CFO Cornelius retiring - Reuters
  

 

 

 

• Britain's housing market is set for a fall, the IMF has warned
   
  The IMF has raised the prospect of a double dip in Britain's property market, saying house prices are too high and vulnerable to a fall
  152 comments
  
• IMF: Global recovery still fragile
   
  Global economy remains weak and unbalanced with high unemployment risking social upheaval, the IMF warns in its half-yearly report
   
  
  • Ireland suffers credit rating downgrade
    
  • Larry Elliott: A sombre mood - and justifiably so
    
  • US prospects 'fairly bad' or 'very bad' – Goldman
    
  • Nils Pratley: US braces for a currency war
    

  [*] China warns against rapid rise in yuan

   

  Chinese premier Wen Jiabao tells EU to stop pressuring Beijing to revalue the yuan, or risk unleashing serious social unrest

  42 comments

  • Q&A: International currency wars
    
  • Should we use exchange rates as a 'policy weapon'?
    
  • Currency wars: what the experts say
    

  [*] EasyJet given summer boost as Britons holiday abroad

   

  Airline's shares rise after it reports better-than-expected results for three months to 30 September

  Post your comment

  • BA/Iberia/AA tie-up heralds new transatlantic era
    

 

 

• Sainsbury's 'fastest growing of big four supermarkets'
   
  Like-for-like sales up from 1.1% in the first quarter to 2.9% as retailer aggressively expands non-food sales
  Post your comment
  
  • UK retailers in talks to join government's 'green deal'
    
  • Tesco profits up, but UK disappoints
    

  [*] Autonomy shares plunge on US fears

   

  Stock falls 16% as growth forecasts slashed but software firm dismisses takeover rumours

   

  • Nils Pratley: Autonomy from the economy
    

  [*] 'Twitter effect' is damaging pensions, says leading investor

   

  Top fund manager condemns social pressure for instant gratification and short-term City culture for making long-term investing harder

  [*] More business news

  [*] Wellstream rejects General Electric takeover bid

  Post your comment

  [*] Liberal Democrats call for draconian tax on bank bonuses

[interestrateripoff]

Kazakhmys strengthens Astana government ties

 

Alistair Dawber: FTSE 100 company's chairman sells stake to Kazakh administration.

 

• Sainsbury's steps up sales growth
  
• Greggs on track despite sales pressure
  
• New car sales down
  
• €4.9bn fine for man who (almost) broke the bank
  
• US business will make money in three years, Tesco predicts
  
• Cuts threaten to knock recovery as jobs 'flatline'
  
• Cisco executive is Skyped as competition heats up
  

 

James Moore: Step forward Jerome Kerviel, court jester of casino capitalism

 

Outlook Jérôme Kerviel seems to have become a sort of white-collar Raoul Moat. Like the latter, the French rogue trader has been all but lionised for a series of frankly contemptible acts. Now it's true that unlike the execrable Moat, Kerviel didn't kill anyone. No, he just burnt his way through a staggering €5bn of other people's money, almost bringing down Société Générale and everyone who sailed within her.

 

• James Moore: A little story of betting and benefit cuts
  
• Joblessness, the crucial factor in the welfare equation Osborne has ignored
  
• Stephen King: Will Europe's debt crisis lead to closer political union?
  
• Hamish McRae: Good, the old Treasury discipline is back – but there may still be bad calls on cuts
  
• Margareta Pagano: City has its own good reasons for backing 'Red' Ed
  

 

The little tweets that could mean big money

 

It has hundreds of millions of users and a new chief executive, but can Twitter ever become a profitable high-flyer?

 

• Britain finds an export star at last
  
• The Business on: Nick Anstee, Lord Mayor of London
  
• Ireland takes a gamble on cutting its deficit
  
• The flat-pack giant's secrets unpicked
  
• The business on...Alison Cooper, Chief executive, Imperial Tobacco
  

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China tells EU to stop pressing on currency

 

BRUSSELS (Reuters) - Chinese Premier Wen Jiabao told the European Union on Wednesday to stop piling pressure on Beijing to revalue its currency, saying a rapid shift could unleash disastrous social turmoil.

Continue Reading

 

 

 

FTSE up on boosted commodities

 

LONDON (Reuters) - The top share index closed higher, at a fresh five month peak on Wednesday, led by miners and energy issues as commodities rose on optimism governments will act to stimulate economies around the world.

5:14pm BST

 

Fitch cuts Ireland as morale plummets amid loan fears

 

DUBLIN (Reuters) - Fitch cut Ireland's credit rating on Wednesday and consumer morale slumped as the cost of cleaning up its banks hit home and the financial regulator warned of more bad news as the country's property market continues to unravel.

6:24pm BST

 

Anti-counterfeit pact text shows deal is near - source

 

GENEVA/WASHINGTON (Reuters) - Countries negotiating a treaty to fight global trade in pirated goods released the text of a 99-percent complete draft of the pact on Wednesday.

6:09pm BST

 

Wellstream rejects $1.2 billion approach from GE

 

LONDON (Reuters) - U.S. conglomerate General Electric said Wellstream had rejected a 755 million pound ($1.2 billion) takeover approach, fuelling speculation the oil services company was talking to other suitors.

9:52am BST

 

Rio Tinto seen poised to quit iron ore BHP joint venture

 

SYDNEY (Reuters) - Global miner Rio Tinto looked set to abandon its $116 billion (73 billion pound) iron-ore joint venture with rival BHP Billiton , a deal unpopular with customers, regulators and many of Rio Tinto's own investors. | Video

9:06am BST

 

Sainsbury's sales at top end of expectations

 

LONDON (Reuters) - J Sainsbury , the nation's No.3 grocer, posted quarterly sales at the top end of forecasts on Wednesday as new stores, online shopping and demand for premium and non-food products helped it grow market share.

10:47am BST

 

Euro zone growth strong in Q2 but seen flagging

 

BRUSSELS (Reuters) - Euro zone growth rates jumped in the second quarter but consumer demand contributed less than expected to the rebound, data showed on Wednesday, fuelling concerns the region's recovery is about to run out of steam.

11:09am BST

 

Greggs sales get bacon roll boost

 

LONDON (Reuters) - Britons' love of bacon rolls helped baker Greggs post a small rise in third-quarter sales and the company said it was well placed to cope if consumer spending was constrained by government cuts.

10:33am BST

 

Marston's helped by food sales

 

LONDON (Reuters) - Pubs and brewing group Marston's said earnings for the year to October 2 were in line with its expectations, as increasing food sales boosted revenues at its managed pubs division.

Emerging markets prop up sluggish recovery - IMF

 

WASHINGTON (Reuters) - Emerging economies are set to grow nearly three times faster than rich nations next year as the fragile global recovery loses a step, the International Monetary Fund said on Wednesday.

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6 October 2010 Last updated at 20:41

 

GDP growth 'slower than thought'

 

The global economy will grow slightly more slowly than previously expected next year, the International Monetary Fund (IMF) has said.

 

Red Sox owners to buy Liverpool

 

Crisis-hit Liverpool will be sold to the owners of the Boston Red Sox baseball team if a legal row with the club's US owners can be resolved. Sport

 

 

 

• Liverpool owners dismay chairman
   
  Liverpool chairman Martin Broughton says club owners George Gillett and Tom Hicks have a chance to be 'good guys' and sell the club.
  
• Kerviel spared full SocGen fine
   
  French bank Societe Generale says it will not make rogue trader Jerome Kerviel pay back the 4.9bn euros ($7bn; £4bn) he lost.
  
• UK car sales fall for third month
   
  UK car sales fell for the third consecutive month in September, although the rate of decline was less severe than in August.
  
• Fitch in Irish rating downgrade
  
• Easyjet increases profit forecast
  
• Jobs market growth 'slows again'
  
• Sainsbury's reports rise in sales
  
• Breakfast sales help lift Greggs
  
• Food sales give Marston's a boost
  
• Prius hit as Japan subsidy ends
  
• BHP-Rio Australia deal 'at risk'
  
• Over-50s apprenticeships double
  
• Card fraud at lowest for 10 years
  
• US service sector picks up speed
  

 

 

• Liverpool deal
   
  Broughton: 'I have the power to sell Liverpool'
  
• Liverpool's takeover becomes a soap opera
  

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[/url]

 

Bank of England 'must inject extra £50bn into economy'

 

The "time has now come" for the Bank of England to pump more money into the UK economy, according to the Institute of Directors.

 

Ireland must honour its debts, says business boss

 

Irish business federation head Danny McCoy warns a default on the junior debt of Anglo Irish Bank and other lenders would be a breach of faith.

Irish debt rating downgraded by Fitch

 

 

 

IMF warns deep UK cuts must stop if growth slows

 

Funds says Coalition would have to revisit plans for spending cuts if growth disappoints and warns it expects further falls in house prices.

IMF chief fears currency war after Japan cuts rates to zero

 

 

Banks' $4 trillion debts are 'Achilles’ heel of the recovery'

 

 

 

Miners buoyed by bullish outlook, lift FTSE 100

 

 

 

 

New car registrations fell 8.9pc in September

 

 

 

 

Buffett: Wall St chiefs should go broke - and their wives

 

 

 

 

Wiggle thanks 'middle aged man in lycra' for record profits

 

 

 

 

Sainsbury's sales rise despite 'difficult conditions'

 

 

• David Cameron can't just cut his way to growth
  

 

• Child benefit cuts could affect many more than 1.2m forecast
  

 

 

• Investors love it now, but can SuperGroup stay in fashion?
  

 

Irish debt rating downgraded by Fitch

 

 

 

Britain needs 'wholesale reform' of its public finances

 

 

 

 

David Cameron: we must back doers and grafters

 

 

 

 

UK services show surprise growth as new business slows

 

 

 

 

UK wheat harvest grows 5pc

[interestrateripoff]

Canceling Dubai Property Deals Is Nearly Impossible

 

By LIZ ALDERMAN 12:05 PM ET

 

 

Scores of buildings around Dubai are well past their delivery date, or have yet to be started. For investors, there is little hope of getting their money back.

 

 

 

Lee Hoagland for the International Herald Tribune

 

As real estate values in Dubai plunge, developers who bought in are finding it tough to get out. Commercial real estate vacancies in particular are still rising.

 

 

 

 

 

 

F.T.C. Proposes Tighter Rules for Green Claims

 

By TANZINA VEGA 1 minute ago

 

The commission’s revised guidelines warn against using labels that make claims that cannot be substantiated.

 

Geithner Calls for Global Cooperation on Currency

 

By SEWELL CHAN 1:23 PM ET

 

The administration is looking to the I.M.F. to help bring about greater flexibility by China on exchange rates.

 

• Europe Presses China to Alter Trade Practices
  

 

Monsanto Income Drops by Nearly Half

 

By ANDREW POLLACK 1:44 PM ET

 

Executives, seeking to reassure investors, predicted earnings per share would grow 13 to 17 percent in the next fiscal year.

 

U.S. Indexes Find Little Reason to Rally

 

By CHRISTINE HAUSER and DAVID JOLLY 9 minutes ago

 

Wall Street wavered after the payroll company ADP reported that private employers shed 39,000 jobs in September, the first loss in several months.

 

• Private Sector Report Shows Loss of 39,000 Jobs Last Month
  

 

Prescriptions Blog

 

Chinese Company Pleads Guilty in Growth-Hormone Case

 

By DUFF WILSON 12:06 PM ET

 

GeneScience, a Chinese drug maker, and its founder, are expected to enter guilty pleas to illegal distribution of a human growth hormone that had not been approved by the F.D.A.

 

DealBook

 

G.E. to Buy Dresser for $3 Billion

 

By DEALBOOK 11:14 AM ET

 

The deal for Dresser, a privately held energy infrastructure and services company, is the latest energy deal by G.E. over the last week.

 

DealBook

 

J.&J. Reaches $2.4 Billion Deal for Crucell

 

By DEALBOOK 1:03 PM ET

 

Johnson & Johnson said Crucell had agreed to the U.S. drugmaker’s takeover bid for the Dutch vaccine manufacturer.

 

DealBook

 

Citigroup Sells Credit Card Portfolio

 

By ERIC DASH 12:45 PM ET

 

The company agreed to sell about $1.6 billion of private-label credit card loans to GE Capital.

 

DealBook

 

Owners of Red Sox to Buy Liverpool Soccer Club

 

By CHRIS V. NICHOLSON 2:48 PM ET

 

Liverpool have agreed to the sale of the club to New England Sports Ventures, which owns the Boston Red Sox, Liverpool said.

 

• From Liverpool to Boston, Two Legacies, One Big ‘If’ 8:39 AM ET
  

 

At Flagging Tribune, Tales of a Bankrupt Culture

 

By DAVID CARR

 

Under Sam Zell, the Tribune Company was bankrupted by debt, and employees describe a profane and alienating workplace.

 

• Post a Comment | Read (286)
  

 

Foreclosure Furor Rises; Many Call for a Freeze

 

By DAVID STREITFELD and GRETCHEN MORGENSON

 

Lawmakers in Washington requested a federal investigation into mortgage lenders’ practices, and Texas’s attorney general and others called for freezes on all foreclosures.

 

 

 

• Dim Outlook for Holiday Jobs
  
• For Those Near, the Miserable Hum of Clean Energy
  
• Bailout Loss Estimated at $29 Billion
  

[interestrateripoff]

Bear Porn: Collapse Of Large Banks In 2011

If you want someone with more "panache" that is singing from the same hymnal that I've been for the last three years, here you have it....

Selected quotes....

Mounting cash flow stress on all lenders is reaching crisis levels. Non-payment by borrowers and mounting foreclosure backlogs are creating the conditions for the collapse of some of the largest U.S. banks in 2011.

The largest U.S. banks remain insolvent and must continue to shrink.

Failure by the Obama Administration to restructure the largest banks during 2007-09 period only means that this process is going to occur over next three to five years whether we like it or not. The issue is recognizing existing losses not if a loss occurred.

Impending operational collapse of some of the largest U.S. banks will serve as the catalyst for re-creation of RFC-type liquidation vehicle(s) to handle the operational task of finally deflating the subprime bubble. End of the liquidation cycle of the deflating bubble will arrive in another four to five years.

"Subprime is (still) contained."

No it's not.

Ignore Institutional Risk Analytics at your own (considerable) risk. Just remember, before listening to the banking "wonks", Dick Fuld said he was gonna "burn the shorts", and it was his shorts that caught on fire.

 

Nothing is contained....

[interestrateripoff]

Geithner: Douche Extraordinaire

This tops his TurboTax excuse.....

Treasury Secretary

Timothy "****-You" Geithner

said a “damaging dynamic” of large economies keeping their currencies undervalued can cause quicker inflation and asset bubbles, and restrict growth.

“More and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies,” Geithner said in remarks prepared for a speech at the Brookings Institution in Washington today. “The collective impact of this behavior risks either causing inflation and asset bubbles in emerging economies, or else depressing consumption growth and intensifying short-term distortions in favor of exports.”

Oh, and you were holding a mirror in front of your face while pontificating on this?

What the hell do you call this Timmy?

That's a 13% intentional devaluation of the dollar, with half of it in the last month.

So let me see if I get this.

We bitch about China intentionally maintaining a peg to our currency which we devalue on purpose, and by doing so, they devalue theirs as well.

But who's doing the devaluing Timmy, and why aren't you taking your potshots at Ben "I'm gonna make gas $5/gallon" Bernanke?

I mean, look - Japan is clearly tampering with their exchange rates, and so are other nations. But then again, so are we, and we're doing it just as intentionally and with malice aforethought as everyone else. Indeed, we even have folks in The Fed who admit they're tampering with the dollar's value as an express tool to support asset valuations - that is, doing exactly what you claim other nations are doing (creating asset bubbles)!

What's worse is that we started it - in 2007 and even before, going back to 2002.

So cut the **** you lying piece of crap. You seem to think that you can bitch and whine about other people following your lead, when you're the one setting the standard.

If you want other nations to take you seriously then you have to do what you say is right.

Otherwise, you're just a and what's worse, Bernanke and Paulson tried the same crap in 2007/08, and it didn't work to "support asset prices" then either. Instead it added to an already unstable situation and was one of the proximate causes of the stock market collapse.

The difference is that when (not if) the same thing happens this time the policy measures available to try to arrest that have already been spent.

 

Still at least it isn't a race to the bottom with everyone trying to revalue....

[interestrateripoff]

Breaking news

 

• Pfizer says recalled 191,000 Lipitor bottles - Reuters
  
• Euro rally stalls, dollar tumbles vs yen - Reuters
  
• BrightSource wins final OK for major solar plant - Reuters
  
• Brazil's Embratel buys 143.8 mln Net Servicos shares - Reuters
  
• Fed is banking on phony wealth effect: James Saft - Reuters
  
• France's Sarkozy faces budget rebels from own party - Reuters
  
• Late back-to-school lifts U.S. retail sales - Reuters
  
• US STOCKS-Wall St sags on angst over Fed's plan, dollar's rise - Reuters
  
• Rio diamond expansions to slowly boost output - Reuters
  

 

 

 

• Spending cuts 'to cost 60,000 green jobs'
   
  Plans for offshore wind turbine factories will not go ahead as government withdraws £60m fund earmarked for necessary work on nearby ports
  
• House prices fall record 3.6%
   
  Halifax reveals biggest monthly drop in 27 years as number of houses for sale increases, dampening demand
  402 comments
  
  • Larry Elliott: Lenders alone can't hold back a dip
    
  • IMF: UK housing set for a fall
    
  • IMF: Global recovery still fragile
    

  [*] Bank of England holds interest rates

   

  MPC leaves rates unchanged at 0.5% for 19th consecutive month and resists calls for further round of quantitative easing

  26 comments

  [*] BT ordered to share fibre-optic network with rivals

   

  Ofcom move will aid ISPs such as providers such as TalkTalk and BSkyB, speeding up rollout of superfast broadband

  33 comments

 

 

• Brown's Beast bids for Newsweek – and a showdown with the Huffington Post
   
  Last updated three minutes ago
  British publisher plans to strengthen her web magazine - and challenge rival Arianna Huffington – by a merger with the ailing weekly
  1 comment
  
• M&S enjoys 'return to quality'
   
  Clothing, homewares and food all put in strong performances over the second quarter as M&S grabbed more market share
  6 comments
  
  • Marks & Spencer bestsellers
    
  • M&S: what the analysts say
    
  • Are you trading back up?
    
  • Sainsbury's 'fastest growing of big four supermarkets'
    
  • UK retailers in talks to join government's 'green deal'
    
  • Tesco profits up, but UK disappoints
    

  [*] More business news

  [*] Eurostar buys 10 Siemens trains in £700m upgrade

  [*] White House put spin on BP oil spill warnings

  42 comments

  [*] Autonomy shares plunge on US fears

[interestrateripoff]

M&S remains cautious despite sales surge

 

Marks & Spencer hailed the success of its celebrity-laden advertising campaign today as it braced itself for a tougher time on the high street.

 

• Interest rates held at 0.5% again
  
• IMF warns of double dip in housing market
  
• Jobs boost for pier blaze town
  
• Co-op wins welfare award for free-range egg usage
  
• Sainsbury's sales streak ahead of rival big grocers
  
• The Business On... Martin Broughton, Chairman, Liverpool FC
  
• Cairn ready to invest $1.2bn in 12 Greenland oilfields
  

 

David Prosser: Football fans may hate them but leveragedbuyouts are here to stay

 

Outlook Assuming the deal goes through, Liverpool fans will no doubt be delighted that the purchase of their club by New England Sports Ventures is not another leveraged buyout.

 

• Sean O'Grady: Where is Gordon Brown, just when we need him again?
  
• David Prosser: IMF reform must be high on the agenda
  
• David Prosser: Ireland can't wake from its nightmare
  
• James Moore: Step forward Jerome Kerviel, court jester of casino capitalism
  
• James Moore: A little story of betting and benefit cuts
  

 

Peter Hambro: Banker, trader, magnate: a man with the Midas touch

 

Alistair Dawber: The old-school businessman shares the secrets of his success.

 

• The little tweets that could mean big money
  
• Britain finds an export star at last
  
• The Business on: Nick Anstee, Lord Mayor of London
  
• Ireland takes a gamble on cutting its deficit
  
• The flat-pack giant's secrets unpicked
  

[interestrateripoff]

Bank of England keeps policy steady as forecast

 

LONDON (Reuters) - The Bank of England held monetary policy steady as expected on Thursday, in a decision which may well conceal a more vigorous debate and a three-way split over how to respond to a highly uncertain economic outlook.

Continue Reading

 

 

 

UK economy grew 0.5 percent in third quarter

 

LONDON (Reuters) - Economic growth in Britain is likely to have slowed to 0.5 percent in the third quarter of this year from 0.6 percent in the three months to August, a leading think tank said on Thursday.

3:06pm BST

 

IMF, World Bank call for cooler heads on currencies

 

WASHINGTON (Reuters) - World leaders must defuse currency tensions before they worsen to avoid repeating the mistakes of the Great Depression, the head of the World Bank said on Thursday.

G20 7:48pm BST

 

Miners' retreat dents FTSE

 

LONDON (Reuters) - The FTSE closed lower on Thursday, as weaker metals prices hurt mining stocks, while Marks & Spencer rose as investors warmed to a trading update from the retailer. | Video

5:37pm BST

 

EU executive lays out 25 billion euro bank tax idea

 

BRUSSELS/LONDON (Reuters) - A European Union tax on bank profits and remuneration could raise as much as 25 billion euros (21.92 billion pounds) annually for cash-strapped governments to repair their economies, the bloc's executive said on Thursday.

G20 5:34pm BST

 

Cairn shareholders approve Indian stake sale

 

LONDON (Reuters) - Vedanta Resources cleared some hurdles to its $10 billion plan to take a sizeable stake in Cairn India on Thursday but concerns of potential delays to the deal weighed on Cairn Energy shares.

5:51pm BST

 

Castel rules out SABMiller African beer deal

 

LONDON/PARIS (Reuters) - French drinks group Castel denied on Thursday that it was in talks to sell its African beer business to SABMiller, the world's second-biggest brewer.

12:49pm BST

 

Factory output rise fastest since 1994

 

LONDON (Reuters) - Manufacturing output rose for a sixth consecutive month in August and by its fastest annual rate in over 15 years, data showed on Thursday, easing fears the economy is on the verge of a sharp downturn.

UK 10:41am BST

 

Fed orders HSBC to improve risk management

 

WASHINGTON (Reuters) - The Federal Reserve said on Thursday that it issued an order against HSBC North American Holdings Inc requiring the bank to improve company-wide risk management, including practices to prevent money laundering.

5:05pm BST

 

House prices book record monthly fall in September

 

LONDON (Reuters) - House prices plunged a record 3.6 percent on the month in September, mortgage lender Halifax said on Thursday, in a further sign the housing market is rapidly losing steam after a pick-up last year.

[interestrateripoff]

[/url]

 

IMF chief: Global economic co-operation is falling apart

 

Dominique Strauss-Kahn warns a break down in global economic co-operation threatens 'fragile' recovery.

IMF warns deep UK cuts must stop if growth slows

 

 

Global imbalances threaten new economic meltdown

 

 

 

House prices fell by record 3.6pc in September

 

Shock for UK housing market as figures from the Halifax show the average price of a property dropped more than £6,000 last month.

 

Wave of placings signals FTSE 100 near peak

 

FTSE 100 turns negative in face of a swathe of placings and block trades - a sign some think the recent rise in shares is set to end.

 

UK manufacturers see growth despite concern over future

 

 

 

 

Learning recession lessons from history

 

 

 

 

Man Group shares climb on talk of BNY Mellon bid

 

 

 

 

'Return to quality' helps boost sales at Marks & Spencer

 

 

 

 

BA, AA, Iberia launch tie-up with new routes, cheaper fares

 

 

 

 

Dollar set for sharp decline, Goldman forecasts

 

 

• Could Brown be in with a shot for top IMF job?
  

 

• Public sector pensions: are we all in this together?
  

 

 

• We’ve become a country of fiscal nimbys
  

 

 

Keynes and the currency crisis

 

 

 

'Horror at Coalition's economic illiteracy'

 

 

 

 

John Maynard Keynes: Shocked by Banks

 

 

 

 

Skidelsky: Keynes' and investment

 

 

 

 

Bank of England holds rates at 0.5pc, maintains QE

[interestrateripoff]

September Sales Topped Forecasts for U.S. Retailers

 

By CHRISTINE HAUSER 2:31 PM ET

 

 

Last month’s results offered some optimism about the holiday season, although the economy remains uncertain.

 

 

 

Stuart Isett for The New York Times

 

Shoppers at a Macy’s store in Bellevue, Wash., last month. Macy’s was among several retailers that reported better-than-expected sales.

 

 

 

 

 

 

Obama Expected to Veto Foreclosure Bill

 

By REUTERS 7 minutes ago

 

A White House official said the president would send the bill back to the House for further discussion of how it would affect the foreclosure crisis.

 

European Central Banks Hold Rates Steady

 

By MATTHEW SALTMARSH and JULIA WERDIGIER 3:00 PM ET

 

The E.C.B. and Bank of England did not to change their interest rates, despite proposals that they might increase their efforts to stimulate the economy.

 

Siemens Wins Battle of Fast Trains

 

By DAVID JOLLY 3:00 PM ET

 

Eurostar said it had chosen Siemens over Alstom as the winner of a contract to upgrade its aging fleet of high-speed trains.

 

Media Decoder Blog

 

Johnson to Leave ‘Page Six’

 

By TIM ARANGO

 

Richard Johnson, the Page Six editor whose own scandals over the years became gossip themselves, will "work on new digital ventures" for News Corporation.

 

Cost of E.U. Rises, Even as Countries Make Cuts

 

By STEPHEN CASTLE 3:05 PM ET

 

Amid an austerity drive unparalleled in modern Europe, the bureaucracy that runs the bloc is haggling over how much to increase next year's budget.

 

• Video Feature: The Austerity Zone
  

 

Hevesi Pleads Guilty to Felony in State Pensions Case

 

By WILLIAM K. RASHBAUM and DANNY HAKIM 1:00 PM ET

 

Former State Comptroller Alan G. Hevesi’s guilty plea makes him the highest-ranking state official convicted in the case.

 

Indexes Slip as Traders Look Ahead to Jobs Report

 

By THE ASSOCIATED PRESS 5 minutes ago

 

Many traders were holding back ahead of the release Friday of the government’s closely watched monthly employment report.

 

• An Unexpected Decrease in Filings for Jobless Benefits
  

 

Waivers Aim at Talk of Dropping Health Coverage

 

By REED ABELSON

 

The administration wants to defuse resistance to the new law by granting waivers to maintain minimal coverage.

 

F.T.C. Accuses Tax Relief Company of Empty Promises

 

By EDWARD WYATT

 

The agency said that American Tax Relief, which claimed it could help taxpayers settle tax bills for pennies on the dollar, did no such thing.

 

Clean Living in the Henhouse

 

By WILLIAM NEUMAN

 

At an Indiana farm, precautions are taken to keep hens and eggs free of salmonella.

 

• Slide Show: Egg Farms Fight Contamination
  
• Times Topics: Egg Recall
  

 

Facebook Lets Users Interact in Small Groups

 

By MIGUEL HELFT

 

Facebook users can determine what groups of friends see what information.

 

 

 

• DealBook: Galleon Wiretap Application Under Scrutiny
  
• I.M.F. Chief Tries to Calm Tension Over Currency 10:05 AM ET
  
• MSNBC.com May Change Its Name
  
• Real Estate Collapse Spells Havoc in Dubai
  
• Agency Seeks to Tighten Rules for ‘Green’ Labeling
  
• West Virginia Sues U.S. Over Mining Restrictions
  
• Drug Maker From China Pleads Guilty
  
• Father and Son Found Guilty of Tax Evasion
  

[interestrateripoff]

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100607227_pf.html

 

Millions of U.S. mortgages have been shuttled around the global financial system - sold and resold by firms - without the documents that traditionally prove who legally owns the loans.

 

Now, as many of these loans have fallen into default and banks have sought to seize homes, judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.

 

These fundamental concerns over ownership extend beyond those that surfaced over the past two weeks amid reports of fraudulent loan documents and corporate "robo-signers."

 

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the country, raising urgent challenges for both the real estate market and the wider financial system.

 

For struggling homeowners trying to avoid foreclosure, it could mean an opportunity to challenge the banks they argue have been unhelpful at best and deceptive at worst. But it also threatens to leave them in prolonged limbo, stuck in homes they still can't afford and waiting for the foreclosure process to begin anew.

 

For big banks, "there's a possible nightmare scenario here that no foreclosure is valid," said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities - an expensive and potentially crippling proposition.

 

For the fragile housing market, already clogged with foreclosure cases, it could mean gridlock and confusion for years. And there is concern in Washington that if the real estate market and financial institutions suffer harm, it could force the government to step in again. Attorney General Eric H. Holder Jr. said Wednesday he is looking into the allegations of improper foreclosures, and Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate banking committee, said he plans to hold hearings on the issue.

 

At the core of the fights over the legal standing of banks in foreclosure cases is Mortgage Electronic Registration Systems, based in Reston.

 

The company, known as MERS, was created more than a decade ago by the mortgage industry, including mortgage giants Fannie Mae and Freddie Mac, GMAC, and the Mortgage Bankers Association.

 

MERS allowed big financial firms to trade mortgages at lightning speed while largely bypassing local property laws throughout the country that required new forms and filing fees each time a loan changed hands, lawyers say.

 

The idea behind it was to build a centralized registry to track loans electronically as they were traded by big financial firms. Without this system, the business of creating massive securities made of thousands of mortgages would likely have never taken off. The company's role caused few objections until millions of homes began to fall into foreclosure.

 

:lol: :lol:

 

O dear, I'm sure we'll all feel sorry for Wall Street bankers if this happens, really it couldn't have happened to nicer people.

 

http://market-ticker.org/akcs-www?post=168499

 

Now we're cooking...

 

For big banks, "there's a possible nightmare scenario here that no foreclosure is valid," said Nancy Bush, a banking analyst from NAB Research. If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities - an expensive and potentially crippling proposition.

 

Yep.

 

And this wasn't hurried - it was intentional.

 

MERS allowed big financial firms to trade mortgages at lightning speed while largely bypassing local property laws throughout the country that required new forms and filing fees each time a loan changed hands, lawyers say.

 

You mean ignore the law, not "bypass" the law. Oh wait - bypass does mean ignore, doesn't it?

 

Kentucky lawyer Heather Boone McKeever has filed a state class-action suit and a federal civil racketeering class-action suit on behalf of homeowners facing foreclosure, alleging that MERS and financial firms that did business with it have tried to foreclose on homes without holding proper titles.

 

"They have no legal standing and no right to foreclose," McKeever said. "If you or I did this one time, we'd be in jail."

 

Indeed, just as if I showed up, busted in your house and changed the locks I'd be in jail too.

 

But heh, when they do that in Florida, the Sheriff refuses to arrest the perpetrator.

 

Janet Tavakoli, founder and president of Tavakoli Structured Finance, a Chicago-based consulting firm, said that for much of the past decade, when banks were creating mortgage-backed securities as fast as possible, there was little time to check all the documents and make sure the paperwork was in order.

 

But now, when judges, lawyers and elected officials are demanding proper paperwork before foreclosures can proceed, the banks' paperwork problems have been laid bare, she said.

 

The result: "Banks are vulnerable to lawsuits from investors in the [securitization] trusts," Tavakoli said.

 

Darn tootin' they are.

 

Gee, if the so-called Trust never took delivery of what it claims it did when it sold those MBS to investors then the investors are holding an empty box, and they're likely to get a bit ****ed when they figure it out.

 

TIME TO GET ****ED FOLKS - THERE ARE MORE THAN SIX TRILLION DOLLARS WORTH OF THESE POTENTIALLY-EMPTY BOXES OUT THERE!

 

There are a few people - Janet included - who have been on this for a long time. Indeed, when the light came on in this regard in early 2007 it is what prompted me to start writing The Ticker in the first place!

 

"Joe on the Street" largely doesn't understand what happened here. He thinks, and the mainstream media sells to him incessantly, that his was all just "unbridled speculation" or "mistakes."

 

It was not.

 

Janet, myself and a few others - including Bill Black - have said that the essence of what happened here was fraud and deception, not "speculative froth" or "mistakes."

 

Until the common man on the street comes to understand that he didn't get screwed because of bad luck, but rather he was intentionally assaulted, he will not rise and demand that these screwjobs be unwound and the people involved held to account.

 

Dennigers take on it.

 

It would be great to see this all end up in court and see the bankers squirm.

[interestrateripoff]

Proof Of My Thesis On Those Who Are Not Rich

This is why Bernanke's attempts are doomed to fail in dramatic fashion, and ultimately, if he is not stopped, will destroy the nation:

Notice what's going on here.

The lowest quintile - the poorest Americans - are spending 23% more on food, 8% more on housing, and 9% more on health insurance.

What's worse, they're not spending less on food away from home.

This is the key. They're not shifting spending (as you can see in the above table) they are being forced to spend more even as their income decreases.

That's the lowest 20% of incomes in America folks, and it is going to destroy the people who are not wealthy.

There is nothing that redistribution can do to fix this. It is happening as a direct result of the following:

 

• Intentional debasement of the currency, leading to commodity price ramps. This immediately shows up in the price of things you have to buy. When you're strapped to begin with, you can't shift around these requirements - you need the basic necessities. That is, you can't swap down to hamburger from steak - you're already eating hamburger, rice and beans. When they shoot the moon in price you're screwed as there is no "trade down in quality" available to you.
  
• Intentional distortion and propping up of housing prices. Instead of forcing banks to take their medicine and losses, thereby allowing home prices to collapse (if that's what is to come), we are instead trying to prevent that supply from coming onto the market at dramatically lower prices. This in turn means that rents for the lower-income people go up because of supply constraints. And those people don't have the ability to afford it.
  
• Health insurance costs are soaring. Obama claimed it wouldn't happen. He lied. It not only was going to happen as I pointed out, we now have proof it did. And guess what - again, the lower class can't afford it.
  

Bernanke is directly responsible for this, as is Obama for refusing to put his boot up Bernanke's ass and eject him when he came up for re-nomination. I have been writing about this for more than three years, and sent a letter to all 535 members of Congress in the fall of 2007 over this exact issue.

They didn't give a damn, because none of them are poor. But those who are aren't just losing ground, they're being destroyed, with their cost-adjusted standard of living falling by more than 10% in two years.

Everyone else can in some fashion or form adjust to some degree, and as incomes fall so do brackets, to a point. But in the lowest quintile there's no bracket to drop down to, and no way to take advantage of more deductions, because when it comes to income tax you already pay zero (or close to it.)

To be blunt, this sucks, and if we don't stop it the creep up into the next bracket, the lower-middle class, will occur.

Once it hits there we will be in a position that there will be no clean way to recover from what's occurring.

Bluntly put, we must remove "The Bezzle" and force those who have bad debt to eat it. System liquidity must be normalized and the bad debt forced into the open where it defaults. Housing prices must fall precipitously - to where the free and open market clears them, without government and banking system distortion. And The Dollar must stop being attacked by our very own government and Federal Reserve - it will, if that ceases, rise back into balance, driving down commodities and thus input costs.

This will promote profits by domestic industry (for those who sell domestically) which will in turn promote employment. A normalized interest system will promote capital formation. And a collapse in housing prices will mean that homes will be able to be bought inexpensively by people who want to live in them, and treated as shelter, instead of being a speculative tool that ultimately screws the people on the bottom of the economic ladder.

Unfortunately, this article just puts in stark relief exactly what I predicted back in 2007, and as such I must do it again:

 

The rich are screwing the poor.

 

In fact the poor are paying for the bailout of the rich bankers. What a great system we have.

[interestrateripoff]

Gallup Survey Shows Unemployment Jumps From 9.4% to 10.1%

 

 

 

As economists up their forecasts for tomorrow's jobs report, I am lowering mine.

 

First, the recent ADP report suggests private nonfarm employment dropped by 39,000 with expectations of a gain. Second, Gallup Finds U.S. Unemployment at 10.1% in September

 

Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday.

 

 

The increase in the unemployment rate component of Gallup's underemployment measure is partially offset by fewer part-time workers, 8.7%, now wanting full-time work, down from 9.3% in August and 9.5% at the end of July.

 

 

Friday's Unemployment Rate Report Likely to Understate

 

The government's final unemployment report before the midterm elections is based on job market conditions around mid-September. Gallup's modeling of the unemployment rate is consistent with Tuesday's ADP report of a decline of 39,000 private-sector jobs, and indicates that the government's national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup's mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

 

However, Gallup's monitoring of job market conditions suggests that there was a sharp increase in the unemployment rate during the last couple of weeks of September. It could be that the anticipated slowdown of the overall economy has potential employers even more cautious about hiring. Some of the increase could also be seasonal or temporary.

 

Further, Gallup's underemployment measure suggests that the percentage of workers employed part time but looking for full-time work is declining as the unemployment rate increases. To some degree, this may reflect a reduced company demand for new part-time employees. For example, employers may be converting some existing part-time workers to full time when they are needed as replacements, but may not in turn be hiring replacement part-time workers. Another explanation may relate to the shrinkage of the workforce, as some employees who have taken part-time work in hopes of getting full-time jobs get discouraged and drop out of the workforce completely -- going back to school to enhance their education, for example, instead of doing part-time work.

It is even possible that some workers may find unemployment insurance a better alternative than part-time work with little prospect of going full time.

 

Regardless, the sharp increase in the unemployment rate during late September does not bode well for the economy during the fourth quarter, or for holiday sales. In this regard, it is essential that the Federal Reserve and other policymakers not be misled by Friday's jobs numbers. The jobs picture could be deteriorating more rapidly than the government's job release suggests.

Crapshoot

 

Gaming the monthly job report estimates is something akin to a crapshoot. Nonetheless, I sense a degree of optimism that is both high and unwarranted.

 

Did the Fed manage to up expectations with its Quantitative Easing shenanigans? It seems that way to me.

 

However, if the Gallup survey is to be believed, the sharp increase in the unemployment rate will not occur until the October data (next month's report). Tomorrow we find out.

 

Interesting post from Mish.