So much for Obama’s new housing refinance plan

mike whitney writing in counterpunch via information clearing house...

The truth is the banks want to offload their garbage mortgages onto Uncle Sam to avoid hundreds of billions of dollars in losses. That’s what this refi-ruse is really all about.

The administration estimates that 3.5 million people with private label mortgages will be eligible to refinance into loans backed by the Federal Housing Administration (FHA) Many of these are high risk mortgages that will eventually go into foreclosure which is why the banks want to get them off their books. Regrettably, Obama is only too happy to help them achieve that goal.

[...]

To be eligible for Obama’s refi-program, borrowers will need a credit score (FICO) above 580,(which is extremely low), they’ll have to be employed, and they’ll have to be current on their mortgage payments. (for the last 6 months) In other words, lending standards are being eased so the banks can dump as many high-risk mortgages on the FHA as possible. Obama breezily refers to these abysmal lending standards as “cutting through the red tape.”

Applicants will also be able to refinance under the Obama’s program with loan balances up to (get this) 140 percent of the value of their home. So, even if you owe $560,000 on a home that is currently worth $400,000–and you don’t have a dime’s worth of equity in the house–have no fear–you can still get money from Uncle Sugar. This isn’t a good way to keep people in their homes. It just turns them into debt slaves.

well, we figured out some time back that obama is owned by the banks, lock, stock and barrel, so none of this should come as a big surprise...

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We're suckers for the lesser evil and choose to forget just how much Bill Clinton is responsible for our current mess

robert scheer delivers a teach-in at occupy la...



scheer doesn't shy away from putting a good share of the blame where it belongs, right at the feet of bill clinton...

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Goldman Sachs takes a 3d Quarter loss but that doesn't impact the bonus pool

THIS is precisely why ows is garnering such a response in the u.s. and worldwide...

Today’s Goldman Sachs earning reports provides a valuable lesson on how things really work inside Wall Street’s largest investment houses. Goldmhttp://www.blogger.com/img/blank.gifan Sachs had an awful three months, losing $428 million in the third quarter of 2011, and yet it continued to shovel billions into the bonus pool it will share with its employees at year’s end.

Through the first nine months of 2011, Goldman set aside $10 billion in its compensation fund. If Goldman’s 30,000 employees split that bounty evenly, that would work out to $333,000 per person—plus the billions more Goldman will no doubt set aside in the last few months of the year.

[...]

But that’s the beauty of working at a major investment bank. Performance doesn’t matter nearly as much as just showing up. Goldman booked $13 billion in pre-tax profits in 2010—a steep drop from the $20 billion the bank booked in 2009. Despite a precipitous drop in profits between 2009 and 2010 and a stock stuck in neutral throughout the year, the Goldman board of directors raised Blankfein’s base salary to $2 million, up from $600,000, and showered an extra $13 million in stock grants on Blankfein and his executive team.

Not bad for the executives of a bank forced to pay a $550 million fine after being accused by the SEC of duping its clients by selling them shares of a morhttp://www.blogger.com/img/blank.giftgage-backed security they allowed a hedge firm to secretly hand-pick. Still, this is hardly like the fat and happy subprime mortgage days, when Goldman was buying toxic subprime mortgages and selling them to unsuspecting clients. In 2007, the year before the economic collapse, Blankfein made $68 million in stock and bonus money.

Is it any wonder the Occupy Wall Street crowd might think there’s something rotten about the system?

meanwhile, lloyd blankfein, goldman crook-in-chief, is crying all the way to the bank to deposit his haul...


Lloyd Blankfein, CEO, Goldman Sachs

"Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter,” said Lloyd Blankfein, the chairman and chief executive, in a statement.

yes, is it any wonder...?

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JPMorgan Chief Jamie Dimon should be in jail, not whining about Basel

yeah, why should u.s. banks, the very ones at the forefront of the rape and pillage of the global economy for years, have to face any rules or regulations...? i mean, after all, banksters are a special breed, right...?

JPMorgan chief says bank rules ‘anti-US’

New international bank capital rules are “anti-American” and the US should consider pulling out of the Basel group of global regulators, Jamie Dimon, chief executive of JPMorgan Chase, has said.

In an interview with the Financial Times, Mr Dimon said he was supportive of forcing banks to have more capital but argued that moves to impose an additional charge on the largest global banks went too far, particularly for American banks.

The Basel III capital rules are designed to make the financial system safer by making banks build up risk-absorbent “core tier one” capital to at least 7 per cent of risk-weighted assets. The biggest, including JPMorgan, have to reach 9.5 per cent.

“I’m very close to thinking the United States shouldn’t be in Basel any more. I would not have agreed to rules that are blatantly anti-American,” he said. “Our regulators should go there and say: ‘If it’s not in the interests of the United States, we’re not doing it’.”

Mr Dimon also criticised global liquidity rules, arguing that regulations that viewed covered bonds – a European market feature – as highly liquid but discounted government-backed mortgage-backed securities in the US were unfair and that other details hit investment banking activity core to US banks hardest.

god forbid that "government-backed mortgage-backed securities" ("government-backed" = bailout; "mortgage-backed" = fraudulent) should EVER have to be backed up by real cash... oh, no-o-o-oooooo...

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Celebrating and profiting from the tragedy of common folks, a tragedy they helped create, is just business as usual for the banksters

if you read this wapo article carefully, it sounds like goldman was only "seeking to protect itself if prices collapsed," "a routine part of its business"... in other words, goldman was just doing what any good business would do, developing and executing a prudent business strategy...

As the U.S. housing market began its epic fall nearly three years ago, top executives at Wall Street powerhouse Goldman Sachs cheered the large financial gains the firm stood to make on certain bets it had placed, according to newly released documents.

The documents show that the firm's executives were celebrating earlier investments calculated to benefit if housing prices fell, a Senate investigative committee found. In an e-mail sent in the fall of 2007, for example, Goldman executive Donald Mullen predicted a windfall because credit-rating companies had downgraded mortgage-related investments, which caused losses for investors.

"Sounds like we will make some serious money," Mullen wrote.

Lawmakers said the internal e-mails, released Saturday by the Senate Permanent Subcommittee on Investigations, contradict what they said are Goldman's assertions that the bank was not trying to profit from the decline of the housing market in 2007 and was merely seeking to protect itself if prices collapsed.

Goldman admits it had reduced its exposure to the overheated U.S. property market and had sought to limit possible losses through a strategy that would make money if home prices fell. It says such "hedging" is a routine part of its business and is intended to moderate risk to the firm, an especially vital function when markets shift violently, as they did in 2008.

at least zachary goldfarb, the by-lined reporter, had the graciousness to "suggest" the following...

The findings of the Senate panel also come as Goldman is facing a fraud suit, filed earlier this month by the Securities and Exchange Commission, alleging that the bank misled its clients by selling them a mortgage investment that was secretly designed to fail. Senate investigators this weekend were interviewing Goldman Vice President Fabrice Tourre, who is implicated in the fraud suit and will testify Tuesday.

The Senate panel's findings do not touch directly on the fraud suit but suggest that Goldman's alleged behavior in that case was indicative of a larger pattern of duplicitous conduct on the eve of the economy's collapse.

"Investment banks such as Goldman Sachs . . . were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis," said Carl M. Levin (D-Mich.), chairman of the Senate panel. "They bundled toxic mortgages into complex financial instruments, got the credit rating agencies to label them as AAA securities and sold them to investors, magnifying and spreading risk throughout the financial system and all too often betting against the instruments they sold and profiting at the expense of their clients."

the real story, the one that desperately needs to be carefully researched and put before the american people, is how our super-rich elites and their wholly-owned servants, the banksters, have shamelessly manipulated the american and global economies for many, many years to serve their own greed... when are we going to get THAT story...?

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Pardon me if I really can't muster much in the way of credibility for Goldman's defense

Goldman Sachs chief executive Lloyd Blankfein is
to testify before a Senate subcommittee Tuesday.
(Daniel Acker/bloomberg)

i don't believe 'em... i don't trust 'em... basically, i don't give a shit what they have to say... yeah, i know, it's unamerican to call somebody guilty until proven innocent but goldman has one HELL of a long way to go to earn any kind of trust from me... so far, in fact, that it won't happen in my lifetime...

Goldman Sachs is preparing its most detailed defense yet to allegations that it misled clients in its mortgage securities business, arguing that the firm was unsure whether housing prices would rise or fall and did not take any action at odds with the interests of its clients.

An internal Goldman document, prepared for senior executives and obtained by The Washington Post, addresses the criticism that the bank invested its own money betting against the housing market while simultaneously urging its clients to invest in securities that would increase in value only if the housing market did.

[...]

Goldman prepared the 11-page document to serve as the basis for testimony that chief executive Lloyd Blankfein is scheduled to deliver Tuesday before the Senate Permanent Subcommittee on Investigations.

The Goldman paper describes debates among top executives in 2006 and 2007 over whether the firm should make investment decisions based on the belief that the mortgage market would continue to prosper. The document details meetings and e-mails that ultimately resulted in a decision to reduce the company's exposure to the mortgage market, especially subprime loans, by making new investments that would pay off if housing prices fell.

goldman is exclusively the preserve of the super-rich elites who do only what serves their interests and has absolutely no connection with anything that faintly resembles what you or i would call the common good...

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Fannie and Freddie now belong to US and WE will "provide as much capital as they need"

hold on to your wallets... here it comes... oh, and btw, check out where the new ceo of freddie hails from - the carlyle group... ain't THAT an interestin' coincidence...?!?!

The Treasury Department seized control of Fannie Mae and Freddie Mac, the nation’s giant quasi-public mortgage finance companies, and announced a four-part rescue plan that includes an open-ended guarantee from the Treasury Department to provide as much capital as they need to stave off insolvency.

At a news conference on Sunday morning, Treasury Secretary Henry M. Paulson Jr. also announced that he had dismissed the chief executives of both companies and replaced them with two long-time financial executives. Herbert M. Allison, currently chairman of TIAA-CREF, the huge pension fund for teachers, will take over Fannie Mae and replace the chief executive, Daniel Mudd. David M. Moffett, currently a senior adviser at the Carlyle Group, one of the country’s biggest private equity firms, will replace Richard Syron as chief executive of Freddie Mac.

“Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe,” Mr. Paulson said. “This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement. A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance. And a failure would be harmful to economic growth and job creation.”

Mr. Paulson refused to say how much capital the government might eventually have to provide, or what the ultimate cost to taxpayers might be.

The companies are likely to need tens of billions of dollars over the next year, but the utlimate cost to taxpayers will largely depend on how and how fast the housing and mortgage markets recover from their current crisis.

of COURSE paulson refused to say how much the ultimate cost to the taxpayers might be... if he even hazarded an extremely conservative, low-end guess, american citizens would be out marching in the streets (which is what we SHOULD have been doing for the past two years)...

oh, yeah, and as of 10:30 a.m. pacific time this morning, fannie's website was still touting all the good stuff being worked on by the now-axed dan mudd...

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$100B USD = £50.4480B GBP

uh... i'm confoozed... here's a story from today about a £50B BofE bail-out...

Bank details £50bn lending boost

The Bank of England has announced details of a plan to help prevent the credit crisis causing more damage to the UK banking system and economy.

Banks will be able to swap potentially risky mortgage debts for £50bn of secure government bonds to enable them to operate during the credit squeeze.

The Bank's governor, Mervyn King, said the scheme aimed to improve liquidity in the banking system.

It should also increase confidence in financial markets, he added.

Under the scheme, banks will be allowed to swap their "high quality" mortgage debts for government securities.

The swap will be for a period of one year and may be renewed for a total of three years.

and here's a story i posted on saturday about a $100B BofE bank bailout...

The Bank of England is planning to provide around $100 billion of support to British banks and lending institutions.

The cash package is designed to help banks cope with the after effects of the subprime mortgage crisis in the United States.

Britain's banks have for years raised vital finance by selling tens of billions of pounds of mortgages to international investors.

But last August the market closed down which is why mortgages and other loans have become harder and more expensive to obtain.

The Bank of England plans to fill the breach, and next week it will announce a proposal to pump new money into the banking system for up to three years.

It will offcer to swap government bonds with a maturity of up to a year for the bank's unsellable mortgage assets.

i'm assuming it's the same story, only one is expressed in u.s. dollars and the other in british pounds... here's the conversion based on today's dollar/pound exchange rate...

from xe.com...

$100B USD = £50.4480B GBP

United States Dollars United Kingdom Pounds
$1 USD = £0.504480 GBP £1 GBP = $1.98224 USD

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Un-frigging-believable! Bank of England bails out banks to the tune of $100 BILLION

words fail me...

The Bank of England is planning to provide around $100 billion of support to British banks and lending institutions.

The cash package is designed to help banks cope with the after effects of the subprime mortgage crisis in the United States.

Britain's banks have for years raised vital finance by selling tens of billions of pounds of mortgages to international investors.

But last August the market closed down which is why mortgages and other loans have become harder and more expensive to obtain.

The Bank of England plans to fill the breach, and next week it will announce a proposal to pump new money into the banking system for up to three years.

It will offcer to swap government bonds with a maturity of up to a year for the bank's unsellable mortgage assets.

can't we, pretty please, just go about letting the whole goddam house of cards collapse so we can get on with setting up something better...? use the hundred billion to provide a cushion for ordinary folks who would get hurt the most in a crash of the financial markets but who will absolutely get hurt if the money goes to the banks... cuz, let's face it, the banks don't give a teeny fraction of a tiny shit for ordinary folks...

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Euro hits $1.59, Merril Lynch continues its free fall, oil climbs past $115 a barrel, and rice is now 3x higher than 2007

please note... ALL of these stories are interconnected in very fundamental ways, all of which point to the continuing collapse of the global financial markets... hitting bottom, imho, is a long way off...

is it even possible to comprehend $30B worth of losses in one company in only three quarters...?

Merrill Lynch announces job cuts after $2 billion loss

Merrill Lynch, the investment bank, posted a loss Thursday and announced that it would lay off about 2,900 additional workers. Including about 1,000 jobs already eliminated this year, the company's work force is to shrink by 10 percent, or about 4,000 jobs, over the course of 2008.

The bank reported worst-than-expected earnings for the first quarter, including $6.5 billion in write-downs and adjustments to assets in its mortgage, leveraged finance and other divisions. The write-downs bring the total taken by Merrill Lynch in the last three quarters to more than $30 billion.

i'm working with a gentleman here who lives in france but is an employee of the u.s. company that runs the project... he is paid in dollars which he converts to euros... he has lost nearly HALF the value of his salary over the past year...

The euro retreated from a record high against the dollar in choppy trade Thursday after a top euro zone official called recent euro appreciation "undesirable."

[...]

That sparked concern that G7 officials may be considering coordinated currency intervention to stem the dollar's decline.

it wasn't very long ago, only a matter of six months, that oil over $100 a barrel seemed unimaginable...

Oil prices hit all-time highs above $115 a barrel Thursday as the dollar continued to weaken and on reports that oil and gasoline stocks in the United States were lower than expected.

and look at rice, a food staple for more than 2/3 of the world's population...

The sense of crisis in the rice market showed no signs of easing as prices continued their record climb and a tender from the Philippines, the world's top importer, attracted offers to sell only about two-thirds of the half-a-million tons it had sought, Reuters reported from Bangkok.

In Bangkok, Thai 100 percent B-grade white rice, considered the world's benchmark, hit $950 per ton, three times its price at the start of 2007.

i don't know how anyone can look at the above four items and not sense impending doom...

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Oferchrissake...MORE tax breaks for big business...? Pardon me, but SCREW big business...!

when joe and julia, jose and juanita, and hamid and fatima take a financial dive, who the hell jumps in to bail them out...? there's an easy, one-word answer to that question... nobody... but you can be goddam sure that if a business controlled by the powerful, already super-rich elites loses even the slightest bit of altitude, there will be dozens of congressmen and senators lining up to give 'em a hand...

The Senate proclaimed a fierce bipartisan resolve two weeks ago to help American homeowners in danger of foreclosure. But while a bill that senators approved last week would take modest steps toward that goal, it would also provide billions of dollars in tax breaks — for automakers, airlines, alternative energy producers and other struggling industries, as well as home builders.

The tax provisions of the Foreclosure Prevention Act, which consumer groups and labor leaders say amount to government handouts to big business, show how the credit crisis, while rattling the housing and financial markets, has created beneficiaries in the power corridors of Washington.

It also shows how legislation with a populist imperative offers a chance for lobbyists to press their clients’ interests.

i don't often lapse into unbridled crudity, but i say fuck 'em... it's about time that the poor, hard-working slobs who do the REAL grunt work of our country - and, for that matter, of every goddam country around the globe - get their share, and that our so-called public servants remember just who the hell it is that they're supposed to be there to serve...

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$15B, £7.6B, €35B, -20% - dumping the increasingly disastrous financial news over the weekend

yep... keep leakin' it out, folks, in time-tested, bush administration fashion, over the weekend, when people aren't paying attention... (pssssst... people ain't really payin' any attention anyway...)

CITIGROUP and Merrill Lynch will heap further pain on Wall Street this week as they reveal additional sub-prime write-downs totalling $15 billion (£7.6 billion) or more.

In another sign of the intense pressure on leading banks, Deutsche Bank is attempting to offload some of its €35 billion (£28 billion) of toxic debt to a consortium of private-equity firms.

Huge exposure to American mortgages is expected to result in Citi taking a $10 billion hit to its accounts, dragging the bank to a first-quarter loss of almost $3 billion. Some analysts believe Citi’s write-downs could stretch to as much as $12 billion.

Merrill will suffer $5 billion of write-downs, analysts say, which would push the bank $2.7 billion into the red.

It is expected to knock a further 20% from the value of its sub-prime holdings, in spite of the fact that it announced $18 billion of write-downs only three months ago.

The new rash of Wall Street losses and write-downs come in addition to the billions that have already been recorded.

does ANYBODY, ANYWHERE have ANY IDEA of just how bad this is...? talk about whistling past the graveyard...!

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Q1 UBS loss at $12B - the global financial meltdown chugs merrily along

actually, "chugs merrily along" is an understatement... it's really on an accelerating downhill luge run...

Swiss bank UBS AG says it expects to post first quarter net losses of $12 billion and to seek $15 billion in new capital.

Switzerland's largest bank also said in a statement Tuesday that it sees losses and writedowns of approximately $19 billion on U.S. real estate and related credit positions. Its chairman Marcel Ospel will step down, to be succeeded by Peter Kurer.

aw, c'mon... fercryinoutloud, let's stop this slo-mo collapse... let's speed it up and get it the hell over with, and let the chips fall where they may... "where they may" will undoubtedly include the fall of a number of criminal governments, and that of the united states is at the top of the list...

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Another high level, totally corrupt Bush administration official resigns

another loser calls it quits...

Housing and Urban Development Secretary Alphonso Jackson is expected to announce his resignation Monday, according to people familiar with the matter, a decision that will deal a blow to the Bush administration's efforts to tackle the housing and mortgage mess.

The exact reasons for Mr. Jackson's decision couldn't be learned. The secretary has been beset recently by allegations of cronyism and favoritism.

ferchrissake, why doesn't GEORGE resign and just make it one hell of a lot easier on everybody...?

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More on the shamelessly UNcovered Spitzer backstory [UPDATE and BUMPED]

[BUMPED]



from youtube and brasscheck tv...

Mortaging America's future
for a quick buck

It's one of the most amazing displays of journalistic incompetence and malpractice in recent memory.

The US news media failed to draw the obvious connection between the bizarre federal law enforcement investigation and leak campaign about the private life of New York Governor Spitzer and Spitzer's all out attack on the Bush administration for its collusion with predatory lenders.

While the international credit system grinds to a halt because of a superabundance of bad mortgage loans made in the US, the news media failed to cover the details of Spitzer's public charges against the White House.

Yet when salacious details were leaked about alleged details of Spitzer's private life, they took that information and made it the front page news for days.

To the 9/11 fiasco, the Iraq War, the travesty of the federal response to Hurricane Katrina, and the shredding of the US Constitution, we can now add a deliberate and reckless undermining of the credit and banking system of the US to its list of "accomplishments."

our collective screwing is part and parcel of a coordinated, comprehensive, and thoroughly strategized plan on the part of the powerful, super-rich elites to continue to accrue ever more power and money... why would we expect anything less...?

[UPDATE]

here's what brought spitzer down...

Predatory Lenders' Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer
Thursday, February 14, 2008; Page A25

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

wow... amazing, ain't it, that this editorial was largely uncovered during the extended hoo-ha over spitzer's downfall... i didn't even know it existed until today...

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Lest we forget, the economic collapse is affecting REAL PEOPLE

i've read a number of blog posts and commenters' remarks talking about how people stupid enough to drive up their debt to the point where they can no longer keep up, who signed on to mortgages that, no matter how attractive the initial terms, were beyond their means, shouldn't expect a bailout... what this perspective conveniently ignores is that the entire system has been wired for people to easily fall prey to such schemes... our entire society has been structured around a "get while the gettin's good," "i'll take mine and the devil can have the rest" mentality... when all that's ever dangled before our faces are the obscenely rich getting obscenely richer and the american dream portrayed as "whoever has the most toys, wins," what are people supposed to do...? the answer is clear - pull out those credit cards, buy that new car, sign that mortgage, and keep on buyin'... now that the bottom is falling out, it's the poor slobs who believed that bullshit propaganda who are getting hurt, not those who perpetrated it for their own benefit...

ah, america...! what a great country...!



and, naturally, it takes the foreign media (the bbc) to show us our own dark side...

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Now, it's Goldman Sachs - still MORE evidence the financial markets are collapsing

yep... it's a train wreck in slo-mo, for sure...

Investment bank Goldman Sachs will announce asset writedowns of $3 billion when it posts earnings on Tuesday, Britain's Sunday Telegraph newspaper reported, without naming sources.

The company will report a fall of about 50 percent in first-quarter earnings, the newspaper said.

Goldman Sachs was not immediately available for comment.

Goldman will take a hit of around $1.6 billion in its leveraged loan business, $1.1 billion in connection with assets owned by its private equity arm and will have to writedown the value of its stake in Industrial & Commercial Bank of China, the story said.

Shares in ICBC have fallen around 14 percent in the last two months.

Goldman will point out that its exposure to the sub-prime mortgage market remains minimal, the paper said, according to unnamed people close to the bank.

goldman pointing out that it ISN'T the sub-prime mortgage market that's causing a $3 BILLION writedown is somehow supposed to be COMFORTING...? all THAT tells me is that the financial and investment markets are going directly to hell...

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Greg Palast fills in the blanks to the Bernanke-Spitzer backstory

and what a story it is...

While New York Governor Eliot Spitzer was paying an ‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there’s a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using ours.

This week, Bernanke’s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks’ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers’ bordello: Eliot Spitzer.

Who are they kidding? Spitzer’s lynching and the bankers’ enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Street’s line that millions of US families are about to lose their homes because they bought homes they couldn’t afford or took loans too big for their wallets. Ba-LON-ey. That’s blaming the victim.

Here’s what happened. Since the Bush regime came to power, a new species of loan became the norm, the ‘sub-prime’ mortgage and its variants including loans with teeny “introductory” interest rates. From out of nowhere, a company called ‘Countrywide’ became America’s top mortgage lender, accounting for one in five home loans, a large chunk of these ‘sub-prime.’

Here’s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain’t worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. The Grinnings move into their Toyota.

Now, what kind of American is ‘sub-prime.’ Guess. No peeking. Here’s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren’t stupid – they had no choice. They were ‘steered’ as it’s called in the mortgage sharking business.

‘Steering,’ sub-prime loans with usurious kickers, fake inducements to over-borrow, called ‘fraudulent conveyance’ or ‘predatory lending’ under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy – it was OK now to steer’m, fake’m, charge’m and take’m.

But there was this annoying party-pooper. The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

Instead of regulating the banks that had run amok, Bush’s regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of “federal pre-emption,” Bush-bots ordered the states to NOT enforce their consumer protection laws.

Indeed, the feds actually filed a lawsuit to block Spitzer’s investigation of ugly racial mortgage steering. Bush’s banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.

Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called “securitization.”

What that means is that they took a bunch of junk mortgages, like the Grinning’s, loans about to go down the toilet and re-packaged them into “tranches” of bonds which were stamped “AAA” - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).

When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will ‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars – he pulled in from 1998 through 2007.

But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure – and got to keep the Grinning’s house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of public bailout. Not one family was saved – but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided – what a coinkydink! – the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.

yeah, it's a little more than "fair use," but, hey... it deserves wide exposure...

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"The U.S. banking sector is headed for a credit downturn that will be 'the worst in generations'"

all it's going to take is the failure of one major bank and all hell is going to break loose...

The U.S. banking sector is headed for a credit downturn that will be "the worst in generations," featuring widespread defaults on a range of debts and a national housing price slide not seen since the Great Depression, one of the most influential analysts on Wall Street says.

The banks face massive loan losses -- "far more dramatic" than most bank executives and ratings agencies have forecast -- as the next chapter in financial-sector turmoil unfolds, said Meredith Whitney, an analyst with Oppenheimer &Co. Inc.

"We believe loss rates will exceed the highest levels since 1990 by a significant margin," she said in a note Monday.

"Bank losses will be the highest in the past 20-plus years as a result of greater numbers of individual defaulting on mortgages and/or other loans and from [loan balances that] are far higher than they were in the last housing cycle."

Whitney -- who is also a panelist for Fox News and the No. 2-ranked analyst on a Forbes list of top stock pickers for 2007 -- shot to global infamy last year after her gloomy, but accurate, predictions about the scale of subprime problems facing Citigroup Inc. led to a worldwide sell-off of banking stocks.

In Monday's note, the Oppenheimer analyst slashed her already-depressed forecasts of what large U.S. banks will earn in 2008 by 29 per cent and by 13 per cent for 2009, citing concerns about mortgages, credit-card balances and other loans.

bring it on... let's get this collapse underway and stop kidding ourselves that everything is going to turn out just peachy-keen...

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Holy crap! The UK is nationalising the Northern Rock bank!

for the UK to be making a move like this, things have GOT to be EVER SO MUCH WORSE than advertised...

The Treasury today announced that the beleaguered bank Northern Rock will be nationalised.

In a statement, the chancellor, Alistair Darling, said that "under the current market conditions" neither of the two last-minute bids - submitted by Richard Branson's Virgin consortium and the Northern Rock management team - delivered "sufficient value for money to the taxpayer".

It marks the failure of the government to reach a deal with the private sector over the future of the bank. Emergency legislation will now be rushed through parliament.

Mr Darling said the move met "our objective of protecting taxpayers' interests".

every time i hear a phrase like "protecting taxpayers' interests," my hand immediately grabs for my wallet...

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