The great interest rate rip off part 1

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Breaking news

 

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• UPS, Union Pacific see slow economic growth ahead - Reuters
  
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• Bank levy to raise £2.5bn a year but biggest firms could still gain
   
  Chancellor slaps annnual £2.5bn tariff on banks but planned cuts in corporation tax will offset imposition of levy on bank balance sheets
  262 comments
  
  • The minister's statement in full (pdf)
    
  • Banks cheer Osborne's bid to keep firms from moving abroad
    
  • Business lending positive for first time in six months
    
  • Bank levy: what the experts say
    
  • Cuts will hit poorest harder, says IFS
    
  • Poll: has the government let the banks off too lightly?
    

  [*] Retail sales fall unexpectedly in September

   

  Retail sales in Britain unexpectedly fell for a second month, suggesting that consumers started tightening their belts ahead of the government's austerity measures

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  • Retail sales: what the economists say
    
  • Argos blames lingering effects of recession
    
  • Nils Pratley: Is Argos a busted flush?
    

  [*] China's economy slows in Q3

   

  Chinese economic growth slows in third quarter but long-term outlook points to more sustainable progress

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  • China rate rise: Q&A
    
  • Chinese interest rate rise: what the analysts say
    

  [*] Tui Travel finance chief to quit after accounts glitch

   

  Chief finance officer Paul Bowtell to leave travel operator at the end of the year as company is forced to restate 2009 accounts

 

 

• Spending review: Osborne gambles with the economy
   
  Chancellor has bet that he can cut red tape, reduce the deficit without stifling growth and rely on the Bank of England to pump in cash
   
  
  • IFS warns that public services will deteriorate
    
  • Hundreds of jobs at the Treasury are at risk
    
  • Spending review: experts respond
    
  • Video: Larry Elliott on the CSR
    
  • Nils Pratley: A nasty cocktail
    
  • Bank's MPC split three ways on recovery
    
  • Will spending cuts lead to recession?
    
  • UK public finances post record deficit
    

  [*] Takover Panel to tighten rules for hostile bidders in the wake of Cadbury

   

  Panel has just published its proposals to tighten up its rules in the wake of the furore over Kraft's £12bn bid for Cadbury

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  [*] Morgan Stanley slides to quarterly loss

   

  Wall Street bank tumbles to $91m loss against comparable profit of $498m last year – at a time when Goldman Sachs reports profits of $1.9bn

   

  • Goldman Sachs cuts bankers' payouts
    

  [*] More business news

  [*] Inchape axes car dealers and 500 staff

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  [*] BHP locks horns with Canada over tax

  [*] EMI: Hands under fire as he takes witness stand

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http://news.bbc.co.uk/1/hi/8214272.stm

2007-2010

Deficits as % of GDP

 

http://1.bp.blogspot.com/_Et4TQ-a0gGU/SbQBS5MXXPI/AAAAAAAABis/_2TSN7u3Be0/s1600-h/page_25_chart.png

http://www.newsneconomics.com/2009/03/imf-outlook-on-global-fiscal-budgets.html

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http://seekingalpha.com/article/212173-g20-meeting-s-deficit-goals-are-meaningless

 

The G-20 met this weekend and set a goal that member countries should cut their deficits in half by 2013. The agreement also calls for G-20 countries to start reducing their deficit to GDP ratio by 2016. Even with such easy to reach targets, success is by no means guaranteed.

 

For some reason the G-20 recently woke up and realized countries can't continue to forever spend a lot more than their income from tax receipts. Some of them have been doing just this for many decades at this point. The statement released from the meeting said: "Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges of aging populations, and avoid leaving future generations with a legacy of deficits and debt." So at least ten years after the horse has left the corral, the G-20 now wants to close the gate... but not all the way.

 

The original proposal for cutting deficits in half was changed from would to should because Japan, the U.S. and India objected. No one actually seems to think that Japan will be able to accomplish this goal. Japan is the most indebted major country on earth with a debt to GDP ratio reaching over 200% this year. Interestingly, the long-term budget projections of the Obama administration are for a deficit of $778 billion for 2013, which would be less than half of the $1.6 trillion projected budget deficit for 2010. The 2013 figure is still almost double the biggest deficit prior to the Credit Crisis however. It also assumes robust GDP growth and minimal inflation during the next few years. Another recession or rising inflation could easily move the U.S. deficit numbers back to well above a trillion dollars.

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Cuts 'will hit the poorest harder' new

 

Coalition claims that the spending review was fair were dealt a heavy blow today when a leading economics think-tank insisted the cuts would hit the poorest harder than most of the better off.

 

• Government plans to raise £2.5bn with bank levy
  
• Johann Hari: A colder, crueller country – for no gain
  
• Steve Richards: Osborne passed test – for now. His opposite number failed
  

 

Interest-rate and stimulus decision split MPC vote

 

 

The Bank of England's Monetary Policy Committee (MPC) was split three ways over whether to raise interest rates or to begin a second round of economic stimulus, minutes published yesterday revealed.

 

• Government plans to raise £2.5bn with bank levy
  
• Record borrowing casts doubt on Osborne's plan
  
• Debenhams brings back dividend new
  
• Proposed changes to make hostile takeovers more difficult new
  
• Car production increases 5.8%
  
• Retail sales 'weaker than expected'
  
• Uniq way of dealing with a pension-scheme crisis
  

 

David Prosser: Equitable victims take their share of pain

 

 

Outlook One small part of the spending review that the shadow Chancellor, Alan Johnson, chose not to address in his response was Mr Osborne's announcement of a £1.5bn compensation settlement for victims of the Equitable Life injustice. No wonder: the Chancellor was quite right to accuse his Labour predecessors in Government of "dithering" in their response to a series of reports from the Parliamentary Ombudsman, calling for redress for those who lost out as a result of the failure to properly regulate Equitable. Moreover, on the face of it, the offer made to Equitable victims looks to be a decent one.

 

• David Prosser: More pain all round but the banks survive to fight another day
  
• David Prosser: How will we rebalance the economy?
  
• David Prosser: A picture of gloom that damaged Britain even before the cuts began
  
• David Prosser: Why the Bank of England must protect us from ourselves
  
• Stephen King: As currency wars wind up, will quick thrills call the shots?
  

 

So, are we really all in this together?

 

 

Are we in this together?

 

 

• The Business On: Ray Ozzie, Chief software architect, Microsoft
  
• New wonder of the high street counts on family values
  
• Slugging it out over spending cuts
  
• The Business on John Varley, Chief executive, Barclays Bank
  
• Passing the postal parcel
  

[interestrateripoff]

Bank's Posen says inflation expectations stable

 

LONDON (Reuters) - Inflation expectations in financial markets and among the general public are stable, Bank of England Monetary Policy Committee member Adam Posen said in a newspaper interview published on Thursday.

FTSE closes at 6-month high on earnings boost

 

LONDON (Reuters) - Leading shares surged to a six-month closing high on Thursday, led by miners, as investors were buoyed by strong earnings in the U.S. and Europe, but TUI Travel fell after reporting accounting errors. | Video

Continue Reading

 

 

 

Canada province formally rejects BHP's Potash bid

 

REGINA, Saskatchewan (Reuters) - The Canadian province that is home to Potash Corp said on Thursday it was opposed to a $39 billion (25 billion pound) bid by BHP Billiton to buy the world's largest fertilizer supplier.

Market Analysis 8:19pm BST

 

Bank's Posen says inflation expectations stable

 

LONDON (Reuters) - Inflation expectations in financial markets and among the general public are stable, Bank of England Monetary Policy Committee member Adam Posen said in a newspaper interview published on Thursday.

6:01pm BST

 

Sanofi and Merck begin vet drugs sale - sources

 

LONDON (Reuters) - Merck & Co Inc and Sanofi-Aventis SA have begun selling parts of the businesses they are combining to form the world's largest animal-health operation, people familiar with the matter said.

7:15pm BST

 

Glaxo and Lilly sales weak but Novartis bucks trend

 

NEW YORK (Reuters) - Drugmakers GlaxoSmithKline Plc and Eli Lilly and Co posted weaker-than-expected quarterly revenue, continuing a industry theme and underscoring challenges from price cuts and a lack of new products.

3:57pm BST

 

TUI Travel restates 2009 accounts

 

LONDON/FRANKFURT (Reuters) - TUI Travel's finance chief has quit as the company corrected its 2009 accounts for overstating customer bookings by 117 million pounds as a result of a post-merger technical glitch.

4:31pm BST

 

Government to raise £2.5 billion with bank levy

 

LONDON (Reuters) - The government expects to raise about 2.5 billion pounds a year by 2012-13 from a permanent tax on British and overseas banks' balance sheets, the government said on Thursday. | Video

6:39pm BST

 

BHP wary of any iron ore cooperation with Rio

 

LONDON (Reuters) - Miners BHP Billiton and Rio Tinto may not be able to pursue even limited cooperation in iron ore after regulators lowered the threshold for anti-trust violations, BHP's CEO said on Thursday.

4:34pm BST

 

M&A watchdog to curb "virtual bids"

 

LONDON (Reuters) - Britain's takeover watchdog has unveiled proposals to make hostile bids harder but stopped short of endorsing the most radical ideas floated following the controversial takeover of Cadbury by Kraft Foods .

5:20pm BST

 

Nokia to cut 1,800 jobs after strong Q3

 

HELSINKI (Reuters) - Nokia reported stronger-than-expected profits for the third quarter, boosted by solid demand for its cheap smartphones, and said on Thursday it would cut up to 1,800 jobs under its new chief executive.

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http://uk.reuters.com/article/idUKTRE69K3Y920101021

 

Inflation expectations in financial markets and among the general public are stable, Bank of England Monetary Policy Committee member Adam Posen said in a newspaper interview published on Thursday.

 

"Markets and people in Britain understand clearly that we will bring the inflation rate back to its goal of 2 percent," Posen said in an interview published in German on the website of the Austrian newspaper Der Standard.

 

Inflation is currently 3.1 percent, and MPC member Andrew Sentance has worried that this is putting upward pressure on inflation expectations.

 

"In reality inflation expectations are stable," said Posen, who voted for more quantitative easing at this month's MPC meeting.

 

He cited index-linked government bonds and sterling futures as evidence of the stability of inflation expectations.

 

By contrast, he said that some people had been misled into buying gold because of misplaced concerns about price stability.

 

Posen had addressed an Austrian central bank conference in Vienna earlier on Thursday.

 

Stable at 3.1%?

 

Or stable on the upward trend line?

 

I clearly understand you'll bring inflation back on target, what's the MPC success rate over the past 50 months 9 out of 50?

 

Yep clearly we've got the right people in charge.

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"We must not let our rulers load us with perpetual debt" Thomas Jefferson.

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G20 finance ministers plan to head off currency war

 

Top finance chiefs hope to curb protectionist behaviour this weekend by agreeing not to "competitively undervalue" their currencies.

Geithner says dollar 'in alignment' with euro and yen

 

 

 

Surprise fall in retail sales

 

UK retail sales fell for second month in September in a further sign that consumers are cutting spending in anticipation of the fiscal squeeze.

 

Fury over £1bn green stealth tax in spending review

 

Businesses have condemned an "appalling" £1bn a year green stealth tax that will add 11pc to the energy bills of British companies.

 

FTSE 100 rises to a six-month high on strong earnings

 

 

 

 

GlaxoSmithKline braced for drug price cuts in EU

 

 

 

 

TUI Travel writes off £88m, finance chief to go

 

 

 

 

Anglo Irish offers bondholders 20 cents in debt swap

 

 

 

 

China growth slows to 9.6pc as Beijing applies brakes

 

 

 

 

Toyota hit by fresh global recall

 

 

• Is the spending review unfair on the poor?
  

 

• George Osborne mishandles the 'Plan B' question
  

 

 

• Swansea won't go gentle into Coalition night
  

 

There is no 'Plan B' for the economy, says Osborne

 

 

 

Nobody expected this French revolution

 

 

 

 

Geithner says dollar 'in alignment' with euro and yen

 

 

 

 

Interest rates to stay at record low, divided BoE signals

 

 

 

 

What the economists say

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Oil Sands Effort Turns on a Fight Over a Road

 

By TOM ZELLER Jr. 17 minutes ago

 

 

To get massive equipment to Canadian fields, a road through the American Northwest is crucial, and local residents object.

 

 

 

Rajah Bose for The New York Times

 

Lin Laughy and Borg Hendrickson have sued to stop shipments by of heavy drilling machinery, arguing that the loads would threaten Idaho’s historic roads.

 

 

 

 

 

 

Fannie and Freddie May Need Infusion

 

By BINYAMIN APPELBAUM 2:00 PM ET

 

Taxpayers could be on the hook for tens of billions in further support, depending on how the housing market fares, regulators say.

 

DealBook

 

Goldman Proprietary Trading Desk to Join K.K.R.

 

By PETER LATTMAN

 

The move of the famed trading desk comes as the investment bank winds down the operation to comply with new federal regulations for Wall Street.

 

China Faces Concern Over Inflation

 

By DAVID BARBOZA 1:44 PM ET

 

As growth returns to a normal, sustainable level, soaring food and property prices remain a challenge.

 

Wall Street Gives Up Early Gains

 

By CHRISTINE HAUSER 2:45 PM ET

 

Analysts attributed some of the decline to profit-taking after an earlier high, or because of a rise in the dollar.

 

• U.S. Jobless Claims Fell Last Week
  

 

Toyota Recalling 1.5 Million Cars for 2 Problems

 

By HIROKO TABUCHI 52 minutes ago

 

Problems with brakes and fuel pumps led to the latest recall, as Toyota said it was trying to be more proactive.

 

Nokia to Cut Jobs as It Tries to Catch Up to Rivals

 

By KEVIN J. O'BRIEN 2:30 PM ET

 

Even as profits improved, the world's largest cellphone maker said it plans to eliminate 1,800 jobs as it tries to speed up delivery of new software and better Web services for its smartphones.

 

East Timor Forges Ahead on Deep Oil Drilling

 

By AUBREY BELFORD

 

While much of the world is rethinking the benefits of drilling at ever-greater depths for oil and gas, East Timor is moving forward with such plans.

 

DealBook

 

Britain to Toughen Rules for Hostile Bids

 

By CHRIS V. NICHOLSON 10:40 AM ET

 

The last act of Kraft’s takeover of Cadbury is playing out, with the British Takeover Panel announcing Thursday that it plans to modify the code governing hostile takeovers.

 

French Leader Vows to Punish Violent Protesters

 

By STEVEN ERLANGER and ALAN COWELL 9:42 AM ET

 

President Nicolas Sarkozy warned on Thursday that “troublemakers” using violence to protest a pension plan would be “tracked down and punished.”

 

• Video: Youth Protest Pension Reform
  
• Post a Comment | Read (110)
  

 

 

 

• Oligarch Loses Bid to Take Control of Nickel Mine 2:40 PM ET
  
• Credit Suisse Posts Sharp Drop in Earnings 2:35 PM ET
  
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http://www.nytimes.com/2010/10/22/business/22fannie.html?_r=1&ref=business

 

The federal bailout of Fannie Mae and Freddie Mac could cost taxpayers another $124 billion over the next three years if housing prices continue to fall sharply, according to new government projections.

 

On the other hand, if the economy continues to recover, the troubled mortgage companies could require as little as $6 billion in additional aid, the Federal Housing Finance Administration said Thursday.

 

The Treasury Department has pumped $148 billion into the two companies since they were seized by the government in 2008, to cover their losses on soured mortgage loans. The government is propping up the companies to make sure that money remains available for new home mortgage loans. In return, the companies have paid dividends to the federal government totaling $13 billion, making the net cost to the Treasury $135 billion so far.

 

The new projections suggest that the companies will not need much more money, so long as the economy does not falter. The housing finance administration, which oversees Fannie and Freddie, said that it was publishing the numbers to inform public debate about the future of the two companies. The Obama administration plans to propose changes to the government’s role in housing finance early next year.

 

“These projections are intended to give policy makers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac,” said Edward J. DeMarco, the agency’s director.

 

The projections offer three situations. In the most dire, the economy starts shrinking again, driving down prices and increasing defaults. The companies could then require another $215 billion from Treasury. But in this situation they would return $104 billion to Treasury in the form of dividend payments in return for the aid, including the $13 billion already paid to the government. The total cost to taxpayers: $259 billion, including the $148 billion given to the companies since 2008.

 

In its most optimistic assumption, the agency projected that housing prices would merely stay flat over the next three years. The companies would then require $73 billion in additional aid, and return $67 billion in new dividend payments in addition to the $13 billion already paid. The total cost to taxpayers: $141 billion.

 

So even in happy clappy land these companies will still need more cash.

 

Excellent.

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http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/8079404/Taxpayers-face-22bn-bill-if-BT-goes-bust.html

 

The High Court yesterday ruled that the Government must guarantee to provide the pensions of almost all the 340,000 members of BT’s indebted pension scheme .

 

The landmark “crown guarantee” ruling means BT would have to make good any deficit in its pension plan if the company ever went bust. The £54bn pension scheme, the UK’s largest, was £22.8bn in the red at its latest triennial valuation in December 2008.

 

Experts said the ruling was a “victory” for BT, and its pensioners, because the guarantee was only expected to apply to people who worked for BT before it was privatised in 1984.

 

However, Mr Justice Mann ruled that the “guarantee is not limited to those who were members of the scheme at the time of the transfer” and that all staff who joined the company after privatisation, but before the scheme closed to new members in 2001, are “capable of being included”.

 

John Ralfe, an independent pensions expert, said the ruling means the guarantee has a “much wider application than anyone thought” and applies to post-privatisation employees “which was not intended by the Conservative government” when it privatised the former telecoms monopoly.

 

He said taxpayers could question why they have been made responsible for the pensions of employees who joined BT after it was privatised. The Chancellor confirmed this week that the pension age will rise to 66 in 2020, from the current 60 for women and 65 for men.

 

Mr Ralfe, who has been hired by BT’s rivals to analyse the company’s pension scheme, said the taxpayer would be “on the hook” for £7.3bn rather than £22.8bn if the guarantee was applied to only pre-privatisation members.

 

Paul Howard, an analyst at JP Morgan Cazenove, said: “We believe this is the best possible result for BT’s pension scheme members and will provide the scheme’s trustees with a huge degree of comfort.”

 

Another little bonus for the taxpayer, if BT fails we get another giant turd to contend with.

 

So I assume with this BT was only viable for privatisation if the pension scheme was removed from shareholder responsibility? Excellent.

 

I would also assume that this liability will be off balance sheet for the govt and will only suddenly appear if BT have crap management who bankrupt the company?

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http://www.telegraph.co.uk/finance/comment/jeffrandall/8078864/Spending-Review-2010-Lets-remind-Ed-Miliband-where-the-deficit-came-from.html

 

When Labour's new leader addressed the party's conference last month, he turned on his tormentors for the puerility of their personal attacks on him. "Red Ed? Come off it," he said. "Let's have a grown-up debate about the future of this country."

 

.........

 

For many ordinary voters, however, it's a case of mistaking a decade of excessive consumption and irresponsible state spending for normal behaviour. Having been told that boom and bust were things of the past, Britain looked forward to a future of unlimited overdrafts. Thanks to Gordon Brown's recalibration of economics, government outlays would expand forever. Then, in the form of the credit crunch, an alarm clock went off and we awoke from a dream of something for nothing to a nightmare of bills that had to be paid.

 

How on earth did we allow this to happen? At what point did a nation of shopkeepers start to believe that permanent tick was sound business practice?

 

Between 2000 and 2010, had government's annual expenditure just kept pace with inflation, the budget would have risen from £343 billion to about £450 billion. In the event, Alistair Darling spent £669 last year and Mr Osborne will spend £697 billion this year. In real terms, over the past decade, there has been a 50 per cent increase in the state's outgoings.

 

The effect has been the fiscal equivalent of you or me adding a few pounds of weight every year for 10 years. At first we barely notice the bulges; then we kid ourselves that the scales are wrong. Finally we are burdened with rolls of dangerous flab, but struggle to slim down, because after gorging for too long even a modest diet feels like starvation.

 

For those who insist that Mr Osborne is about to slash spending to the bone, forcing us to survive on gruel and stale crackers, here are some inconvenient facts. If he delivers all his planned savings, £81 billion over the next four years (by no means certain, given the scope for interest groups to resist change), spending on public services in 2014-15 will still be higher in real terms than in 2006-07. Yes, higher. You doubt me? Have a look at page 17 of the Treasury's Spending Review 2010. It's all there.

 

........

 

Never mind that Labour added about 800,000 workers (by no means all essential or British) to the public-sector payroll, forget that interest charges on our near-£1 trillion of debt will soon be costing the Exchequer £1 billion a week – distorting reality is so much more satisfying that facing up to one's own responsibilities.

 

"Proponents and opponents alike have presented the coming spending cuts as draconian and savage," writes Dr Morgan. "But in reality the downpour turns out to be a shower, not a hurricane."

 

If he's right, and we are not about to be blown back into an economic stone age, it's Labour's doomsayers who will need a Plan B. In the absence of a double-dip recession, Ed Balls's claim to forecasting competence will be threadbare.

 

I keep reading that Big Ed is the real brain box on the Opposition benches, the only deep thinker with a thorough understanding of economics. Were that to be true, the country's finances would, surely, not be in such a mess?

 

Mr Balls was, after all, Mr Brown's closest confidant at the Treasury, as he clocked up more than £160 billion of debt during the illusory boom years, 2003-07. No wonder Little Ed swerved round him when picking a shadow chancellor. If Labour is to oppose the cuts with integrity and credibility, it cannot do so on the basis of deceit and ill-founded intellectual arrogance.

 

Many of these points have already been discussed on here.

 

However for the pseudo-Keynesians we appear to have a problem the boom that we had from 2003 onwards where the BoE decided to cut base rates to support the economy the govt started deficit spending to support the boom. So when the inevitable bust came the cupboard was bare meaning the only way the govt could continue spending was by increasing borrowing to plug the funding gap.

 

It's clear from the economic sense we should have swallowed the recession pill in 2003 and got it over with, instead our economic elite decided to create an even bigger boom which means a even bigger bust when everyone realises there is no money.

 

Keynes argued you saved the surplus during the boom and Labour went and created a bigger boom by deficit spending in the boom to support the boom. This is pure economic suicide because at some point the bill becomes due.

 

Interest spending is going to end up being one of the biggest expenditure of govt soon, meaning billions of taxpayer pounds will be spent on providing no service at all.

 

Excellent.

 

The UK appears to be in a very structurally weak position, still I'm sure the recovery will help get the finances back in order.

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Breaking news

 

• 
  
• Asian demand boosts profit at U.S. manufacturers - Reuters
  
• Dollar snaps five-week losing streak - Reuters
  
• OMV takes over Petrol Ofisi for 1 bln euros - Reuters
  
• Data shows Canada recovery intact, inflation muted - Reuters
  
• AIG raises $17.9 billion, prices AIA IPO at top - Reuters
  
• AIG CEO Greenberg liable in part of Cuomo suit - Reuters
  
• Delays seen this year for SEC plan to revamp market - Reuters
  
• Delays seen this year for SEC plan to revamp market - Reuters
  

 

 

 

• US Treasury secretary intensifies trade row with China
   
  Timothy Geithner calls for cap on trade surpluses before G20 meeting in thinly veiled attack on Beijing
  
• Spending cuts will not derail recovery, says Andrew Sentance
   
  Bank of England policymaker argues private sector will drive growth
  24 comments
  
  • Paul Krugman condemns coalition's spending review austerity as a 'fad'
    
  • CBI chief confident cuts won't start a double dip
    
  • Green 'stealth tax' attacked by business groups
    
  • IFS: Cuts will hit poor hardest, says IFS
    
  • Osborne gambles with the economy
    
  • Video: Larry Elliott on the CSR
    
  • Bank's MPC split three ways on recovery
    
  • Will spending cuts lead to recession?
    
  • UK public finances post record deficit
    

  [*] BSkyB spends £2m on News Corp bid

   

  UK satellite TV group reveals outlay on 'advisory fees', as it beats forecasts for number of new subscribers

  20 comments

  • Murdoch applauds coalition's 'tough' spending cuts
    
  • Rupert Murdoch hits back at opponents of News Corp bid
    

  [*] Divided G20 poses threat to banking reform, Osborne warned

   

  Marcus Agius, chairman of British Bankers' Association, tells chancellor reforms are at risk if they are introduced at different speeds by G20 nations

   

  • Chancellor accused of 'going soft' on banks
    
  • Levy to raise £2.5bn a year but biggest may gain
    
  • Nils Pratley: The banks have won after all
    
  • The minister's statement in full (pdf)
    
  • Banks cheer Osborne's bid to keep banks in UK
    
  • Business lending positive for first time in six months
    
  • Bank levy: what the experts say
    
  • Poll: has the government let the banks off too lightly?
    

 

 

• Clouds over the housing market create a perfect storm for first-time buyers
   
  Low levels of lending amid fears of a double-dip recession leave young people unable to buy
  
• Former boss of City firm PWS admits paying bribes for contracts
   
  Julian Messent, former CEO of Lord Pearson's PWS insurance, pleaded guilty to funnelling payments of £1.2m to officials in Costa Rica
  2 comments
  
• Betfair buoyant on float success
   
  Shares in the internet betting exchange were priced at £13 each and in conditional dealings these have soared to £15.24, a 17% premium to the offer price
  Post your comment
  
• Oil could hit $100 a barrel soon, JP Morgan predicts
   
  Chinese demand, restocking of French oil inventories and weaker dollar will all push up the price of crude, bank analysts suggest
   
  
  • China's economy slows in Q3
    
  • China rate rise: Q&A
    
  • Chinese interest rate rise: what the analysts say
    

  [*] More business news

  [*] Vodafone hit by £1.6bn back-tax bill

  [*] Reckitt finance boss to leave after adding to non-executive interests

  [*] Ferrovial puts 10% of BAA up for sale

  [*] Can Hilary Devey drive a truck? Interview with Pall-Ex founder

[interestrateripoff]

FTSE weak as miners retreat

 

LONDON (Reuters) - Weakness in heavyweight miners pulled leading shares lower on Friday, with trading choppy and volumes light, as investors awaited news from a Group of 20 nations meeting in South Korea. | Video

Continue Reading

 

 

 

BSkyB nears customer goal, ups pressure on Murdoch

 

LONDON (Reuters) - Dominant pay-TV group BSkyB attracted more customers than expected and sold a record number of services in the first quarter, boosting profits and raising the pressure on News Corp to up its bid.

UK 4:21pm BST

 

Ferrovial looks for BAA debt relief

 

MADRID (Reuters) - Ferrovial plans to sell a 10 percent stake in BAA, the country's largest airport operator, in a move that would let the Spanish infrastructure group slash its net debt by more than half.

4:29pm BST

 

U.S. plan for trade targets hits G20 headwinds

 

GYEONGJU, South Korea (Reuters) - The United States struggled on Friday to win backing for a proposal to set limits on external imbalances as a way of pressing countries with surpluses such as China to let their exchange rates rise. | Video

G20 4:56pm BST

 

Genzyme makes case for demanding higher Sanofi bid

 

NEW YORK (Reuters) - Genzyme Corp made its case for why it is worth more than the $18.5 billion (11.8 billion pounds) offered by France's Sanofi-Aventis, forecasting 2011 profit well above Wall Street estimates and annual sales of nearly $3 billion for its experimental multiple sclerosis drug.

6:48pm BST

 

Caterpillar buys 3i's engine maker MWM for $810 million

 

LONDON (Reuters) - Caterpillar Inc agreed to buy MWM Holding GmbH, the German maker of gas and diesel engines, from British private equity firm 3i Group Plc for about 580 million euros (517 million pounds) in cash.

7:18pm BST

 

Nestle keeps strong pace of growth with price hikes

 

ZURICH (Reuters) - Nestle , the world's biggest food group, beat forecasts with a 5.7 percent rise in nine-month underlying sales thanks to strong demand in emerging markets, price rises and a thriving Nespresso coffee business. | Video

7:11pm BST

 

Canada promises "own analysis" on BHP-Potash bid

 

TORONTO (Reuters) - Canada will decide whether it will allow BHP Billiton's $39 billion (25 billion pound) takeover bid for Potash Corp to proceed based on its own analysis, the industry minister said on Friday, a day after the province of Saskatchewan demanded that Ottawa scupper the deal.

7:55pm BST

 

AIG raises $17.9 billion and prices AIA IPO at top

 

HONG KONG (Reuters) - AIA, the Asian life insurance arm of AIG , sold $17.9 billion (11.4 billion pounds) of shares in its Hong Kong IPO as investors clamoured for a company seen as a good way to buy into the world's hottest financial market.

7:33pm BST

 

Owners cash in as Betfair shares soar on IPO

 

LONDON (Reuters) - The owners of Betfair will bank at least 211 million pounds ($333 million) from an initial public offering (IPO) that valued the world's largest internet betting exchange at 1.39 billion pounds on Friday.

[interestrateripoff]

http://www.guardian.co.uk/business/2010/oct/22/housing-market-firsttime-buyers-double-dip

 

Not for the first time, storm clouds appear to be gathering over the stubbornly robust UK housing market. The usual autumn bounce in new home sales has not materialised, say the Home Builders Federation. The latest surveys from the Halifax and Nationwide point to price falls gathering pace – with the Halifax figures described in the City as "a shocker". Gross mortgage lending continues to slow, according to figures from the Council of Mortgage Lenders.

 

Also this week, a quarterly update from the Ernst & Young Item Club pronounced: "The housing market clearly looks as if it is heading for a double dip." One City analyst, who preferred not to be named, put it even more succinctly: "The housing market is about to puke."

Top economists from the International Monetary Fund have muttered darkly on the sustainability of UK house prices, describing the situation as "worrisome". The Bank of England this week pointed to an "unexpected" fall in mortgage demand in recent months, suggesting: "weaker potential purchaser confidence – both in the macroeconomic outlook and the likely path of house prices – had started to weigh on demand."

 

Not everyone shares the gloom: few believe house prices are likely to climb meaningfully in the near future, but there are plenty of respected analysts and seasoned industry insiders who insist talk of a dramatic slump is overblown. They point to the encouragingly low repossession rates, which have undershot all forecasts. Banks taking keys from homeowners is front page news almost daily in the US, but has yet to emerge in the UK.

 

"I think the repossession figures are going to continue to be low," said Ray Boulger at mortgage broker John Charcol. "I think all the indications are that the number is going to be below 40,000 this year. When you look at where we are in terms of the recession that's a good number to be at – though clearly any number is too high. If you compare it with what happened in the early 90s, repossessions are comfortingly low."

 

Repossessions have been kept down – with numbers falling in each of the last three quarters – in part by very low interest rates relieving the pressure of mortgage bills. The expansion of government subsidies for out of work and low income homeowners through the Support for Mortgage Interest (SMI) scheme has also helped, though this assistance was pared back this month.

 

Speculation that house prices could be reaching a tipping point was triggered by a shock Halifax survey showing a 3.6% decline in house prices for September, the steepest monthly drop recorded by the lender since 1983. A flurry of reports told homeowners that prices were falling at £200 a day, with Howard Archer, chief economist at IHS Global Insight, describing it as "an absolute shocker ... [that will] undoubtedly rase fears of a housing market crash".

 

Behind these claims, however, many experts, including Archer, took the Halifax figure with a pinch of salt. David Hollingworth, of mortgage brokers London & Country, is far from upbeat about the prospects for a further housing bounce, but he does not believe it is time to panic. "The market's not going to drop off a cliff. Just because Halifax says it's down 3.6% doesn't mean it is going to stay that low. If you look at different indices they tell you different things. If you look at Nationwide and Halifax they tend to have reasonable variation from one month to the next."

 

The housing market is about to puke???

 

Time will tell, but everywhere else there has been a bubble there has also been a correction. So far in the UK there has been no major correction.

[interestrateripoff]

22 October 2010 Last updated at 20:10

 

Vodafone in $2.5bn India tax bill

 

The Indian tax authorities give Vodafone 30 days to pay a $2.5bn tax bill, despite an ongoing court case.

 

• Vodafone makes $6.5bn China sale
  
• Vodafone reports rising revenues
  
• Reliance deal with auction winner
  

 

BA to reinstate some crew perks

 

British Airways says that it will restore basic travel concessions to cabin crew who went on strike earlier this year.

 

• BA crew face ballot on new deal
  

 

 

G20 ministers resist US pressure

 

US proposals to set targets to reduce trade imbalances look to be running into opposition at the meeting of G20 finance ministers.

 

 

 

• Portsmouth 'likely to close down'
   
  Portsmouth say they are likely to fold as they are unable to continue trading after negotiations with key creditor Sacha Gaydamak break down. Sport
  
• Clegg on the offensive over cuts
   
  Deputy Prime Minister Nick Clegg launches a direct attack on a leading think tank over its claims spending cuts will hit the poor hardest.
  
• Cuba details self-employed taxes
   
  The Cuban government outlines the taxes that will have to be paid by the country's growing number of self-employed workers.
  
• Ferrovial to sell 10% BAA stake
  
• BSkyB sees rapid customer pick-up
  
• Reclaim phone money, Ofcom says
  
• L&G rushes out data after blunder
  
• French Senate passes pension bill New
  
• Union fury at 'get on bus' remark
  
• Betfair prices up share flotation
  
• AIG to raise $18bn from AIA stock
  
• Potash finds new ally against BHP
  
• China's Baidu sees profits double
  
• The outsiders
   
  Why the Murdochs are furious about the BBC settlement
  
• The sack: Lessons for government
  
• Tax and benefits
   
  The Institute for Fiscal Studies' analysis of the Spending Review
  

[interestrateripoff]

BSkyB close on 10m customers target

 

 

Satellite broadcaster BSkyB moved closer to its target of 10 million customers today as it added 96,000 subscribers in the first three months of its financial year.

 

• Google under fire for using tax loopholes to save $3bn
  
• Pound slumps further against euro amid talk of 'QE2'
  
• Shops fear for Christmas trade as sales slip again
  
• Welcome to the town that business forgot sector forgot
  
• How the internet giant saves its billions
  
• TUI finance director stands down after £117m accounting mistake
  
• Takeover Panel plans to make hostile bids more difficult
  

 

David Prosser: The message from consumers: the Bankmust bail us out

 

 

Outlook The second successive fall in monthly retail sales cannot be directly attributed to the measures unveiled in Wednesday's spending review, since the data is for September. Still, the precipitous fall-off in consumer confidence we have seen since the Chancellor's emergency Budget in June provides the biggest clue as to why spending is falling: people are spooked by the prospect of the austerity ahead (not to mention the million job losses expected as a result of the spending review).

 

• Hamish McRae: Steady your nerves, for this painful economic recovery could take years
  
• David Prosser: Undermining the case for green taxes
  
• David Prosser: Plenty more headroom on taxing the banks
  
• David Prosser: More pain all round but the banks survive to fight another day
  
• David Prosser: How will we rebalance the economy?
  

 

So, are we really all in this together?

 

 

Are we in this together?

 

 

• The Business On: Ray Ozzie, Chief software architect, Microsoft
  
• New wonder of the high street counts on family values
  
• Slugging it out over spending cuts
  
• The Business on John Varley, Chief executive, Barclays Bank
  
• Passing the postal parcel
  

[interestrateripoff]

U.S. Proposes Benchmark for Limiting Trade Imbalances

 

By SEWELL CHAN 3 minutes ago

 

 

Under the plan, major economies would commit to keeping their surpluses or deficits under 4 percent of G.D.P., a figure that Germany and China both now exceed.

 

• W.T.O. Rejects Chinese Claims on Duties 2:40 PM ET
  

 

 

 

Pool photo by Chung Sung-Jun

 

Ben S. Bernanke, the Federal Reserve chairman, and Treasury Secretary Timothy F. Geithner, right, at a G-20 meeting in Gyeongju, South Korea, on Friday.

 

 

 

 

 

 

U.S. Prosecutors Dismiss UBS Criminal Tax Case

 

By THE ASSOCIATED PRESS 11:04 AM ET

 

The dismissal effectively takes the Swiss bank off probation after it paid a huge fine and agreed to turn over names of thousands of suspected tax cheats.

 

W.T.O. Rejects Chinese Claims in Dispute Over Duties

 

By REUTERS 15 minutes ago

 

The ruling supports an importer’s right to set duties on goods from non-market economies, where the state sets or influences prices.

 

A World Upside Down for Greeks

 

By NIKI KITSANTONIS 11:00 AM ET

 

Small businesses are closing one after another as Greek measures to combat the financial crisis have sliced profit margins and damped consumer demand.

 

Verizon’s Profit Drops 25% in Quarter

 

By JENNA WORTHAM 52 minutes ago

 

The company cited pension settlements resulting from layoffs and voluntary separations for the drop.

 

Ericsson Cautious on Recovery Despite Profit

 

By KEVIN J. O'BRIEN 11:00 AM ET

 

The Swedish maker of telecom networking equipment said on Friday that its profit had more than quadrupled in the third quarter after a year of cost-cutting.

 

Media Decoder Blog

 

F.C.C. Weighs In on Cable Dispute

 

By BRIAN STELTER

 

The Federal Communications Commission tells Cablevision and News Corporation that they have an obligation to negotiate in "good faith."

 

Stocks Trade in Narrow Range as Currency Concerns Hang Over Market

 

By CHRISTINE HAUSER 1:34 PM ET

 

Stocks were mixed on Wall Street as international financial tensions offset positive earnings reports.

 

A.I.G. Raises $17.8 Billion in Unit’s Stock Sale

 

By BETTINA WASSENER

 

American International Group sold shares in its Asian life insurance unit — considered one of A.I.G.’s crown jewels.

 

Credit Cards Soon to Get a Makeover

 

By TARA SIEGEL BERNARD

 

Cards will soon have lights and buttons that allow users to choose to pay for items with reward points or credit.

 

Fannie and Freddie May Need Infusion

 

By BINYAMIN APPELBAUM

 

Taxpayers could be on the hook for tens of billions in further support, depending on how the housing market fares, regulators say.

 

Two Takes at NPR and Fox on Juan Williams

 

By BRIAN STELTER

 

In firing Juan Williams, NPR said he wasn’t impartial, and by renewing his contract, Fox showed its preference for opinion.

 

• Post a Comment
  

 

 

 

• DealBook: In Clearing Bayou, Quagmire for Goldman
  
• New Way to Help Chickens Cross to Other Side
  
• Oil Sands Effort Turns on a Fight Over a Road
  

[interestrateripoff]

[/url]

 

G20 battles to find common ground on currency war

 

Finance ministers struggle to agree on how to prevent a currency war, with US switching tack to focus on rebalancing global trade.

FTSE 100 shares hit by profit-taking on G20 anxieties

 

 

The G20 is a complete waste of space

 

 

 

Vodafone must pay £1.6bn tax bill within 30 days

 

Indian tax authorities order global mobile phone giant to pay contested 112bn rupee bill within 30 days.

 

Taxpayers face £22bn bill if BT goes bust

 

The taxpayer could be forced to pay out up to £22.8bn to BT pensioners should the telecoms group go bust.

 

Ferrovial puts 10pc of UK airport owner BAA up for sale

 

 

 

 

Red faces at L&G after accidental release of Q3 results

 

 

 

 

Pru-shunned AIA raises $17.9bn in Hong Kong IPO

 

 

 

 

IFS accuses George Osborne of muddling welfare reform

 

 

 

 

Bank levy raises worries over 'double taxation'

 

 

 

• Why government bonds have become the latest mad, bad asset bubble
  

 

 

• Let's remind Ed where the deficit came from
  

 

 

• Love, pre-nups and the financial risk of divorce
  

 

 

Shock fall in UK retail sales as shoppers rein in spending

 

 

 

Which is creepier: Osborne's lack of conviction or Cameron's passion?

 

 

 

 

Banks increase lending to UK business

 

 

 

 

Gilt yields fall to record low, pound slips on QE signals

 

 

 

 

G20 finance ministers plan to head off currency war

[interestrateripoff]

Now We're Talking: BREAK 'EM ALL UP!

From Huffington Post:

Note the language: "mistakes", "errors", "processes" (following the initial use of "paperwork").

No mention of "fraud", "felony", "criminal investigations", or "prosecutions" for the tens of thousands of felonies that representatives of the entities foreclosing on homes have admitted that they committed.

Note that Donovan does not even demand that the felons remedy the harm caused by their past fraudulent foreclosures. Donovan wants them to "fix" "processes" -- not repair the harm their frauds caused to their victims.

The fraudulent CEOs looted with impunity, were left in power, and were granted their fondest wish when Congress, at the behest of the Chamber of Commerce, Chairman Bernanke, and the bankers' trade associations, successfully extorted the professional Financial Accounting Standards Board (FASB) to turn the accounting rules into a farce.

The FASB's new rules allowed the banks (and the Fed, which has taken over a trillion dollars in toxic mortgages as wholly inadequate collateral) to refuse to recognize hundreds of billions of dollars of losses. This accounting [problem] produces enormous fictional "income" and "capital" at the banks. The fictional income produces real bonuses to the CEOs that make them even wealthier.

The fictional bank capital allows the regulators to evade their statutory duties under the Prompt Corrective Action (PCA) law to close the insolvent and failing banks.

The inflated asset values allow the Fed and the administration to ignore the Fed's massive loss exposure and allow Treasury to spread propaganda claiming that TARP resolved all the problems -- at virtually no cost. Donovan claims that we have held the elite frauds accountable -- but we have done the opposite. We have made the CEOs of the largest financial firms -- typically already among the 500 wealthiest Americans -- even wealthier. We have rewarded fraud, incompetence, and venality by our most powerful elites.

If the government does not hold the fraudulent CEOs responsible, who is supposed to stop the epidemic of elite financial fraud? The Obama administration's answer is the fraudulent CEOs themselves, at a time of their choosing. You can't make this stuff up.

Read the rest.

He gets it.

Nothing short of removing all senior officers who directed, committed, or acquiesced in fraud can be effective against control fraud. We repeat: Foreclosure fraud is the necessary outcome of the epidemic of mortgage fraud that began early this decade. The banks that are foreclosing on fraudulently originated mortgages frequently cannot produce legitimate documents and have committed "fraud in the inducement." Now, only fraud will let them take the homes. Many of the required documents do not exist, and those that do exist would provide proof of the fraud that was involved in loan origination, securitization, and marketing. This in turn would allow investors to force the banks to buy-back the fraudulent securities. In other words, to keep the investors at bay the foreclosing banks must manufacture fake documents. If the original documents do not exist the securities might be ruled no good. If the original docs do exist they will demonstrate that proper underwriting was not done -- so the securities might be no good. Foreclosure fraud is the only thing standing between the banks and Armageddon.

Spot on.

And if the government won't do it?

Then shove it up their ass through the Bankruptcy courts.

 

The games are beginning.

[interestrateripoff]

Reggie Middleton And Tickerguy - Blogtalk w/Graphics

Good stuff.... the original link is here....

See links for details.

[interestrateripoff]

And Then.... It's Gone... (Secured Interest, That Is)

Now this is an interesting situation.

Remember, MERS has protested repeatedly that it has standing. Well, maybe not. This is the Fieldstone Bankruptcy Decision, which I will highlight portions of, and embed the full document for those who want to read the wonkish legal stuff.

First, what led to the ruling...

On October 16, 2008, the subject motion for relief from stay was filed. See Doc. No. 21 (the “Motion”). It was filed by “Mortgage Electronic Registration Systems, Inc. as nominee HSBC Bank USA, National Association, as Indenture Trustee of the Fieldstone Mortgage Investment Trust Series 2006-3.” Id. at 1 (the “Movant”).6 The Movant characterized itself as a “secured creditor and Claimant.” Id. The Motion further alleges that Debtors were indebted at filing “to Movant” and that the debt arose out of a promissory note and a deed of trust dated September 20, 2006 “naming Movant as beneficiary.” Id.

We've seen this one before, right? MERS asserts (when it feels like it) that it has standing to file foreclosures or, in this case, it claims standing in a Bankruptcy. As we shall see, that argument gets demolished....

While the term “party in interest” is not defined by the Code, this Court has held that such a party must have a “pecuniary interest” in the outcome of the dispute before the Court.

Yep. No interest or harm, no standing. End of discussion. (This is pretty-basic stuff.)

Jacobson notes that its moving party, who claimed to be a servicer for the holder of the note, “neither asserts beneficial interest in the note, nor that it could enforce the note in its own right.” 2009 WL 567188 at *4. It concluded that Fed. R. Civ. P. 17 applied, requiring the stay relief motion to be brought in the name of the real party in interest.

....

That entity is the real party in interest. It must bring the motion or, if the motion is filed by a servicer or nominee or other agent with claimed authority to bring the motion, the motion must identify and be prosecuted in the name of the real party in interest.11

Now we get to the meat of it. That is, The Trust must bring the action, either through an agent or by itself. But as soon as it does, it is then burdened with showing that it actually has the note, and thus has received conveyance.

Remember that little issue of conveyance I've been talking about? Yeah, that one. Well gee, who would have thought that a Judge would actually expect people to show up with proof that they have standing so they can perfect their security interest?

The Motion was filed by MERS “as nominee [for] HSBC Bank USA, National Association, as Indenture Trustee of the Fieldstone Mortgage Investment Trust Series 2006-3.” Even assuming that MERS as a “nominee” had sufficient rights and ability as an agent to advance its principal’s stay relief request, there remains an insuperable problem.

The Motion provides no explanation, much less documentation or other evidence, to show that the Fieldstone Mortgage Investment Trust Series 2006-3 (as an entity) or HSBC Bank USA (as that entity’s “indenture trustee”) has any interest in the subject Note or the subject Deed of Trust.13

Ding ding ding ding ding!

You must provide strict proof that you own a thing when you assert it in court. That is subject to the rules of evidence and challenge by the other side. You cannot simply say "Joe owes me $150,000" and then demand that a court perfect that security interest! To permit that would be to permit raw acts of theft and subversion of the entire legal system.

This District’s Local Bankruptcy Rule 4001.2 requires copies of “all documents evidencing the obligation and the basis of perfection of any lien or security interest.” The sole documentation provided with the Motion here evidences the interests in the Note and Deed of Trust held by Fieldstone Mortgage Company, a Maryland corporation.

This submission does not answer the key question — Who was the holder of the Note at the time of the Motion?

Several movants for stay relief have argued that the holder of a note secured by a deed of trust obtains the benefit of the deed of trust even in the absence of an assignment of the deed of trust, on the theory that the security for the debt follows the debt. Under this theory, it would appear that when bankruptcy intervenes, and somewhat like a game of Musical Chairs, the then-current holder of the note is the only creditor with a pecuniary interest and standing sufficient to pursue payment and relief from stay.15

The Motion here certainly suggests that the Fieldstone Mortgage Investment Trust Series 2006-3 (or perhaps HSBC Bank USA in its capacity as indenture trustee for that trust) was the holder of the note on the June 24, 2008, petition date.

But at the time of the final § 362(e) evidentiary hearing herein, the parties discussed and Movant ultimately conceded that (I) the Note contained nothing indicating its transfer by Fieldstone Mortgage Company, (ii) the Motion was devoid of allegations regarding the details of any such transfer, and (iii) the record lacked any other documents related to the issue.

Oh, you shredded or burned the security instrument and can't show a chain of assignment? That sucks my friend, because you have to show your work!

In this case the Court has a problem - there's nothing in the record that shows a chain of assignments proving that Fieldstone or HSBC holds the paper!

Subsequent to the closing of the hearing and after the Court took the dispute under advisement, Movant filed a “supplemental affidavit” of its counsel. See Doc. No. 28 (filed January 2, 2009). This affidavit alleges that Movant’s counsel obtained on such date the “original” Note and that the same contains an indorsement. Counsel states that his “affidavit is presented to supplement the record herein and for the Court’s consideration in the pending motion[.]” Id. at 2.

The filing and consideration of this supplemental affidavit are improper for several reasons.

First, the record was closed, and the Court did not authorize the reopening of that record, nor did it indicate any post-hearing submissions would be accepted.

Yeah, it's called trying to prove up a case without giving the other side the benefit of challenging your so-called "evidence." Only in a banana republic is this sort of crap allowed.

Second, Trustee did not have the opportunity to address this “newly obtained” document at hearing, and nothing shows his consent to the post hoc supplementation of the evidentiary record.

That's because....

Third, disputed factual issues in contested matters may not be resolved through testimony in “affidavits” but rather require testimony in open court. See Fed. R. Bankr. P. 9014(d). Under the circumstances, the identity of the holder of the Note certainly appears to be a fact in dispute falling within the ambit of this rule.

Gee, the court says "We're not a banana republic. Due process of law, jackass!"

Fourth, the affidavit is insufficient to establish that counsel, as affiant, has the ability to testify regarding or lay the foundation required to admit the document. See Esposito v. Noyes (In re Lake Country Invs., LLC), 255 B.R. 588, 594-95 (Bankr. D. Idaho 2000).16

The assertion that the newly possessed note is the “original” appears to be based not on the affiant’s (counsel’s) personal knowledge but on the assertions of someone else.

Robo, meet Judge.

Fifth, the proffer of this “new” note as the “original” note

directly contradicts Movant’s prior representations that the Note attached to the Motion was “true and correct” and the operative document in this matter.

See Doc. No. 21 at 1.

You mean someone committed perjury? That's a polite way of saying it - they realized they had blown it and tried to cover up the fact that they lied originally. Oops.

Sixth, even were it considered, the “new” Note’s asserted indorsement states: “Pay To The Order Of [blank] Without Recourse” and then purports to be signed by Fieldstone Mortgage Company through a named assistant vice president.

There is no date nor indication of who was or is the transferee. Fieldstone Mortgage Company may have indorsed the Note in blank, but this document does not alone establish that either HSBC Bank USA or Fieldstone Mortgage Investment Trust is the Note’s holder.17

Ding ding ding ding ding!

Maybe they are and maybe they aren't, and maybe - just maybe - they weren't at the time they were supposed to be, and are trying to cover up the fact that they violated the IRS REMIC rules by taking the transfer after the closing date of the trust.

See the games these jackasses play?

The judge did.

Dismissed.

[interestrateripoff]

More Documentation on Bogus Loans

Oh my..... more herpes!

Richard M. Bowen, former chief underwriter for Citigroup’s consumer-lending group, said he warned his superiors of concerns that some types of loans in securities didn’t conform with representations and warranties in 2006 and 2007.

“In mid-2006, I discovered that over 60 percent of these mortgages purchased and sold were defective,” Bowen testified on April 7 before the Financial Crisis Inquiry Commission created by Congress. “

Defective mortgages increased during 2007 to over 80 percent of production

.”

EIGHTY PERCENT?

Oh my..... let's see, that was over $1 trillion in production, so if that's a reasonable number for the entire thing, that's $800 billion with a loss severity of about 50.....

Uh, people thinking that this is a $200 billion might be a bit light; I come up with $400 billion or so for just one year, and we all know this wasn't a one-year problem...

The market thinks this is a

I continue to maintain it most-certainly is not, and while the banks will fight to the death on this, they're doing it because it quite-literally IS their death if they lose.

[interestrateripoff]

The Sharks, They Be A-Swimmin'

Huffpo published yesterday afternoon a reasonably-accurate exposition on the Foreclosuregate losses that could accrue to the banking system, and outlines the primary risk I've been harping on since 2007 - misrepresentation (or worse) in the loans in the pools:

But this is just exposure to Fannie and Freddie.

The private sector is angry about all kinds of things--from wronged borrowers to deceived investors. Investors are already organizing against both mortgage servicers -- for improperly handling troubled loans -- and against investment banks -- for selling them garbage.

They aren't just angry about fraudulent foreclosures -- evidence is mounting that mortgage servicers can't even handle the

profits

from mortgages correctly, and aren't sending investors reliable, verifiable payments.

Yep. Or worse, selling them nothing.

Bill Frey, who runs the hedge fund Greenwich Capital,

has organized a massive clearinghouse of mortgage investors for the express purpose of bringing lawsuits against big banks that issued bogus mortgage-backed securities

. He told me this afternoon that he's about to move: In the next couple of weeks Greenwich and other investors will bring big lawsuits against major banks.

Will these combined troubles be enough to sink any big banks?

If investors can win a couple of lawsuits, easily.

The bar is high on these suits, but most of the hurdle is procedural. You need 25% of the MBS pool to have standing - that's blocked most of these up until now, and the banks (cleverly) structured most of the notes so that getting to the 25% is tough. That is, the "Senior" portions of the offering typically encompass about 80% of the total, just enough so that until and unless those people take losses they have a strong DISincentive to participate in a suit.

But if they feel the heat of risk, this all changes immediately, and instead of having 80% of the investors on your side the flip to the other side of the equation becomes equally dramatic and immediate.

That's all it will take - for the overcollateralization offered by the junior tranches to be exhausted, and the senior portions to start getting whacked on with unrecoverable losses - not "mark-to-market" losses, but permanent impairments due to parts of the pool being found to be contaminated beyond that which overcollateralization can protect against.

With loss severities running around 50%, that won't be tough to do if 1/3rd or more of the pools are junk - and the testimony from Clayton at the FCIC hearing strongly suggests that to be the case.

The banks appear to have relied on the premise that they could get away with this by structuring securities such that all of the junior tranches could get wiped out and yet it would not produce enough angry noteholders to meet standing requirements. That's nice of them, isn't it?

But greed ultimately will nail these guys, because it also appears they didn't stop short of the line where the senior holders were "safe." That line, once crossed, will immediately lead to essentially all of the noteholders being both willing and able to sue.

What's worse is that if the holder is a pension fund it has no choice but to sue once value is impaired, because the pension fund manager has no discretion - he is a fiduciary for the pension beneficiaries and can potentially be held personally liable if he does not discharge that duty.

The premise among the market participants that has produced a big shrug in stock prices thus far is that since robbery and fraud has become Wall Street's "greatest and most profitable product" in the last ten years that they will be able to continue, with help from Washington DC, and avoid the liability for their actions.

I don't think so - not when the biggest constituency that is getting hosed here are pension funds, including union pension funds. Those folks not only want to sue once they can establish standing and have an unjust loss they have to sue.

I predict some truly ugly surprises in the offing, and soon.

 

The lawyers are coming they can smell the money.

[interestrateripoff]

http://www.youtube.com/watch?v=kunB4SnAh4g&feature=grec_index

 

The Housing Collapse of 2010 Will Be Worse Than 2008

 

Still I'm sure it's all contained.