FROM SUBPRIME MORTGAGE FRAUD TO MUNICIPAL BOND FRAUD-----NEO-LIBERALS AND NEO-CONS ARE ALL ABOUT MOVING MONEY TO THE TOP ANY WAY POSSIBLE
Let's compare again the 2008 subprime mortgage crash and the coming bond market crash to see it is neo-liberals working with neo-cons deliberately manufacturing these crashes with the goal of moving ever more public assets to the top. Clinton's administrative team with Robert Rubin at Citigroup created the subprime mortgage plan with Greenspan and Tim Geithner and the Federal Reserve's Bernanke with Obama created this bond market crash. Both required the neo-liberals in Congress to pass the laws allowing the conditions.
As we know the foreclosures on homes are still going strong and Maryland leads the pack. Remember, almost none of the parking ticket of a settlement for subprime loan fraud made it to the victims of fraud---it is being sent back to the banks paying the settlement in the form of development subsidy. So the transfer of homeownership has never stopped since we elected a super-majority of neo-liberals. A ridiculous attempt at refinancing with a program called HARP delayed dispensing money for years and is now advertizing to help through the same mortgage lenders having committed the frauds. Most people have of course lost their homes through yet again a fraudulent foreclosure process. Can you imagine handing HARP to the same institutions defrauding trillions from the FHA?
THESE CORPORATE POLS COULD CARE LESS WHAT YOU AND I THINK----THEY THINK THEY HAVE ELECTIONS CAPTURED AND WE CANNOT MAKE CHANGE! THEY ARE WRONG!
'So, have QE and the ballooning debt been a fantastic success or a Questionably Effective policy designed to recapitalize banks and the financial elite at the expense of most others, including pension funds, retirement accounts, savers, and bond funds'?
QE is simply a policy to allow the FED to leverage debt to buy the toxic subprime loans from Wall Streets accounts making them look as though they have recapitalized. Those trillions that the FED bought are the most toxic of subprime mortgage loans. The second goal was lowering the interest rate for selling homes because after all Wall Street had tens of millions of foreclosed homes coming to them and they needed to sell them as cheaply as possible to maximize bank profits. So while neo-liberals in Congress bailed out the banks---they left Main Street in mass foreclosure all designed to move these homes to Wall Street where they were bundled and resold to the same investment firms creating the mortgage frauds. QE lowered interest rates to zero and the only ones benefitting were those banks peddling foreclosure bundles and the foreigners laundering their looted wealth from their country to US real estate. That was the rising sales you heard on TV news. We see it in Baltimore as developers are buying huge tracts of communities for next to nothing ----these communities being the ones devastated by the subprime loan fraud and foreclosures. Consolidated ownership of property is good for no one.
The FED has a mission of economic stability and low unemployment and it is fraud and malfeasance when the policies they push do the opposite. They pretended unemployment went down when it is now at 36%----they pretended they were keeping inflation low when it is at 5% ---and they certainly will not be able to claim economic stability when the market crashes in 2015 from the bond implosion.
ALL INSTITUTIONS ASSOCIATED WITH GOVERNMENT ARE OPENLY WORKING AGAINST THE MISSION OF PROTECTING THE AMERICAN PEOPLE AND ONLY A FEW ARE BEING MADE RICH FROM THIS MALFEASANCE.
For those thinking their pensions have made gains to replace losses from 2008-----those gains are about to disappear and then some.
QE: Quantitative Easing or Questionably Effective
-- Posted Tuesday, 8 July 2014
By GE Christenson
We all know the S&P 500 Index has been on a 5+ year rally to all-time highs – thanks to ultra-low interest rates and the levitating wonder of “printing money” via QE – Quantitative Easing. Examine the following chart of the S&P for the past 20 years.
If you were a member of the top 5 – 10% and had a large investment in the stock market, you increased your nominal net worth. However, if you were in the bottom 90%, then the wonders of QE did not “trickle down” to you and your family, except as higher prices.
Pension and retirement funds benefitted to the extent of their stock investments but they were hurt by generational low interest rates in their bond portfolios. Simply put, the stock market rally benefitted a narrow band of society – mostly the political and financial elite and upper middle class.
But how does the massive rally in the S&P look when priced in barrels of crude oil? Examine the following chart of weekly S&P divided by weekly Crude Oil prices – both smoothed with a 52 week moving average.
That rally in the S&P, when priced in barrels of crude oil, does not look nearly as impressive. Remember – a small percentage of people benefit from higher stock prices, but everyone pays when oil prices rise. The price of crude oil affects food prices, gasoline prices, shipping costs, home heating costs, mining and manufacturing costs, and so many more.
When we look at the S&P in terms of crude oil, we see:
1) The ratio is DOWN over 75% from its peak.
2) The ratio has been essentially unchanged since 2006.
3) The price of crude has risen for the last 14 years - much more rapidly than the S&P, along with a massive increase in debt and the money supply.
4) A few people benefitted from the nominal rise in the S&P and most people were hurt by the rising costs of energy, gasoline, manufacturing, food, and so on.
5) The overall US economy seems to be sputtering, unless you believe what financial television is “selling.”
So, have QE and the ballooning debt been a fantastic success or a Questionably Effective policy designed to recapitalize banks and the financial elite at the expense of most others, including pension funds, retirement accounts, savers, and bond funds?
QE looks like it produced a toxic cloud of dangerous mal-investment, debt and currency bubbles, higher consumer prices, and a weakened economy.
The FED was busy taking trillions of subprime mortage loans off banks accounts leaving the FED leveraged to the max right before this coming bond crash. What happened when the insurance corporation AIG was tethered to this same fraud? Taxpayers paid the debt and indeed the FED's debt will be handed to taxpayers with this coming bond crash.
The other stash for toxic loans was Freddie and Fannie and rather than making banks write off those fraudulent loans to clear the debt on these public/private entities-----Obama and neo-liberals are embracing the debt as public debt and taxpayers are paying off yet another trillion in fraudulent loans there.
Friday, September 14, 2012
QE Infinity: Fed Buying More Toxic Assets From Banks Will NOT Help Main Street Dees Illustration
Ben Bernanke and the Federal Reserve announced an open-ended bailout for the banks yesterday by a new mechanism called QE Infinity where they plan to purchase $40 billion of toxic mortgage-backed securities per month "until further notice".
Shrouded in confusing language like "unlimited stimulus" or "quantitative easing", this unprecedented move and rule change by the Fed was said to be warranted because employment remains weak even though they still maintain the false notion that "economic activity has continued to expand at a moderate pace in recent months."
As stated in the FMOC press release:
If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. Of course this move "to foster maximum employment and price stability" does nothing to directly help job creation, and will continue to hurt main street by inflating the price of everything purchased by dollars. Yet it will clearly reward the investor class who already own most of the dollar-based assets.
The theory is that by removing toxic assets from the bank's books they have more liquidity to offer more credit, or to purchase more government debt. Somehow this is supposed to trickle down and help improve unemployment, which real numbers show to be in the 20% range when all factors are considered.
After a combined $2.3 trillion from QE1 ($1.7T) and QE2 ($600B), plus over $16 trillion is secret bailouts to recapitalize banks with absolutely no measurable improvement in the economy, how could any thinking person believe this policy will be beneficial?
Since mortgage-based assets total a conservative $600 TRILLION, QE Infinity is nothing more than an endless giveaway to the criminal banks at the expense of struggling taxpayers. Wall Street will obviously celebrate the move and stock prices will go up, along with food and energy prices.
It is so blatantly a policy that will steal from the poor to give to the rich. It also makes one wonder how can the government cry poor when it comes to paying for food stamps, healthcare, education, and other benefits for the needy when they have endless trillions to prop up the banksters?
Significantly, this announcement comes on the heels of a census report that shows median incomes have fallen to levels of the late 1960s and early '70s. Of course, the mainstream version is they've only fallen to 1989 levels, which is hardly any better.
The census report showed that the middle class is struggling with a median family income of $50,054. In 2010, Michael Snyder decisively proved that it is flat impossible for a family of four to survive on this income in America, and prices for essentials have only increased over the last two years primarily because of the Fed's reckless money printing.
This policy is an absolute disgrace and represents the final looting of the American people. There will simply be nothing left to the value of the dollar, and all of the important assets will be funneled straight up to the elite banksters.
You think you are slaves now? Just wait.
JUST WAIT says the article above. Below you see how Obama and neo-liberals in Congress passed the laws creating the conditions for this bond bubble knowing a crash would hit Federal, state, and local governments the hardest. As I question Maryland politicians about these bond leverage deals that place the taxpayer in charge of debt for decades and telling them the bond market is getting ready to crash----they tell me----OH, THAT WON'T EFFECT A PLAIN VANILLA BOND DEAL LIKE THIS! Plain vanilla bond deal? When Obama and Congress created terms for bonds that made the world want to buy them the bond bubble soared. Then, the FED QE made them soar. Remember, when the subprime loan crash came we found all of Wall Street investors in these loans had Credit Default Swaps-----insurance against losses ----with AIG being the corporation served up in sacrifice for the fraud. These toxic policies were insured for 100% on the dollar and Obama and Geithner made sure that 100% was paid by taxpayer bailout.
Below you see the same thing happening. The boom market now in insurance is Bond Insurance. We see this corporations looking to be the AIG of this bond fraud as it insures bond deals against losses at 100%. We all know the crash is coming so why are these insurance deals happening? Taxpayers will come in to bailout this insurance corporation when the bond crash occurs.
As you see Moody's and the other rating corporations are still in the game rating these bonds and the insurance no doubt AAA as it does Maryland and its financial picture.
THIS ENTIRE BUSINESS DEVELOPED IN RESPONSE TO THE POLICIES IMPLEMENTED BY OBAMA, CONGRESS, AND THE FED. IT IS THERE SIMPLY TO ALLOW THESE BANKS TO CREATE BOOM AND BUST WITH NO LOSSES FOR THE PEOPLE DOING IT.
Answers to Questions about the Novation of CIFG Assurance North America, Inc. Municipal Bond Insurance Policies to Assured Guaranty Corp.
December 12, 2011
In January 2009, CIFG Assurance North America, Inc. (CIFG) and Assured Guaranty Corp. (AGC) entered into a reinsurance transaction whereby AGC provides reinsurance to CIFG with respect to certain U.S. public finance and infrastructure bond insurance policies (the "covered policies"). CIFG and AGC also agreed that they would use commercially reasonable efforts to novate the covered policies to AGC. CIFG has begun sending requests to the issuers of insured obligations (or to the applicable trustee of the bondholders) seeking consents for the novation of the covered policies.
The novation is being implemented in two phases. In the first phase, consents are being solicited for bonds insured in the primary market. Bonds insured in CIFG’s secondary market custodial receipt program will be solicited in the second phase. To the extent regulatory filings or approvals are required in connection with the novation of any policy, requests for consent will only be sent after any applicable waiting periods have elapsed or any required approvals have been obtained.
What are the benefits of novation?
Novation gives bondholders the direct protection of AGC’s claims-paying resources. Once a municipal bond insurance policy has been novated, AGC will request, and expects to obtain, an AGC insured rating from S&P, Moody’s or both depending on which originally provided a CIFG insured rating for the related bonds. Although AGC already provides 100% reinsurance for the covered policies and administers the policies on behalf of CIFG, CIFG remains the insurer until the policies are novated, and the bondholder remains subject to credit risk of CIFG.
As a bondholder, do I need to take any action for the bond insurance policies to be novated?
In general, bondholders are not being asked to take any action at this time. If there is a trustee for an issue insured by CIFG at origination, the trustee has been asked to execute a consent to the novation. If there is no trustee (as is true for many municipal general obligations that utilize a paying agent), then the issuer has been asked to execute such consent. If an insurance policy was written by CIFG after the bonds began trading in the secondary market, the custodian bank holding the custodial receipt that associates the policy with the insured bonds will be asked to execute the consent. Bondholders may be contacted directly by the applicable trustee, issuer VIEW LIST OF COVERED POLICIESor custodian bank as part of the consent process.
The offer to novate a particular municipal bond insurance policy will be open through the date specified in the offer unless such date is extended or the solicitation is earlier terminated at the sole discretion of CIFG and AGC. Bondholders should contact the trustee, issuer or custodian to inquire about the status of the request and whether any action has been taken. Bondholders are also encouraged to send their contact information, together with the name of the issuer, CUSIP number, original par, series and other identifying information concerning the insured bonds, to CIFG at email@example.com in order to facilitate the novation process.
How will I know if the insurance policy has been novated?
Novated policies will be identified in a list of covered policies maintained on this page of the Assured Guaranty website, which may be reached at www.assuredguaranty.com/novation. Additionally, once S&P and Moody’s have issued new insured ratings for a given issue, those ratings should be reflected on data services such as Bloomberg.
VIEW LIST OF COVERED POLICIES
What happens to the insurance policy when novation takes place?
All of the terms and conditions of the policy will remain unchanged, except that AGC will be the insurer in full substitution for CIFG and, because of that substitution, AGC will have all of the rights and obligations of CIFG under the policy and related documents and CIFG will be fully released of its obligations under the terms of the policy. The consent form signed by AGC and the issuer, trustee or custodian, as the case may be, and a notice of effective date issued by AGC following receipt of the signed consent form will become part of the policy.
Will all the municipal bond insurance policies be novated at the same time?
No. Except as described below, the effective date for each policy’s novation is the date on which CIFG receives an executed consent form for that policy.
If CIFG issued a debt service reserve fund surety bond or a swap insurance policy in connection with my CIFG-insured bonds, will that be novated, too?
Separate consent requests are being sent to issuers, trustees or swap counterparties, as appropriate, for each debt service reserve fund surety bond and swap insurance policy. In cases where a debt service reserve fund surety bond or a swap insurance policy was issued in connection with a bond insurance policy or policies, CIFG must receive the executed consent forms for each bond insurance policy, debt service reserve fund surety bond and swap insurance policy, as applicable, before the novation of such policies and surety bond shall become effective. (Where there is no debt service reserve fund surety bond or swap insurance policy, multiple bond insurance policies issued in connection with a single bond transaction may be novated independently.)
Do you see anything below that leads you to believe the FED is acting in the public interest? It is Obama and Congress that appoints these FED chairs. DO YOU HEAR YOUR POLS SHOUTING THE FED IS ACTING CRIMINALLY?
If you do not hear your pols shouting about this rogue FED policy they are neo-liberals working for wealth and profit ----NOT DEMOCRATS FOR GOODNESS SAKE. GET RID OF THEM!
The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded. Today, the Federal Reserve's duties fall into four general areas:
- conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
- supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
- maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
- providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
Is the Federal Reserve accountable to anyone?
The Federal Reserve is accountable to the public and the U.S. Congress. The Fed has long viewed transparency as a fundamental principle of central banking that supports accountability. In the area of monetary policy, the Federal Reserve reports twice annually on its plans for monetary policy. In addition, the Chairman and other Federal Reserve officials often testify before the Congress. To further foster transparency and accountability in monetary policy, the Federal Open Market Committee publishes a statement immediately following every FOMC meeting that describes the Committee's views regarding the economic outlook, and provides a rationale for its policy decision. Full minutes for each meeting are published three weeks after each FOMC meeting. Full verbatim transcripts of the FOMC meetings are made available with a five-year lag. Further, the Federal Reserve Chairman holds press conferences after selected FOMC meetings to discuss the monetary policy outlook.
The Federal Reserve is transparent and accountable in its other functions as well. The Board of Governors prepares an Annual Report summarizing activities of the Board and all Reserve Banks; the annual report is delivered to the Congress. To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, frequently audit many Federal Reserve activities. Weekly, the Board of Governors publishes the Federal Reserve's balance sheet. During the recent financial crisis, the Federal Reserve provided information about its lending programs on its public website and in a special monthly report to Congress.