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August 30th, 2014

8/30/2014

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As the article stated yesterday---costs for PIP are not going up----there is simply more fraud and corruption lifting the costs as with Medicare and Medicaid.  We are reforming Medicare and Medicaid because the health industry fraud sucked the Trusts dry.  That is what is happening with PIP.  The insurance and health industries are inflation costs by fraud with soaring profits and then claiming PIP needs to be dismantled because it is too costly.....same as Medicare.  So, rather than having the costs of your health care covered with this auto insurance that is required by law---you are now going to be pushed into Medicaid which now mostly covers only preventative health care.  This eliminates yet another outlet for health coverage for the working and middle-class while insurance and health industry profits soar.

Notice the Maryland Assembly is about to end PIP and push Maryland citizens into the most private and profit-driven health system in the nation---Medicaid and preventative care.
  The No Fault auto premiums are no small payment---as many times as people use it the total premium amounts paid often covered costs.

Think that at the same time, your rates go higher and higher for simply being in an accident no matter it wasn't your fault.  That is what deregulating the insurance industry looks like.  It gives them the ability to charge anything they want as laws are on the books requiring you to have some kind of insurance.  Deregulating while making insurance mandatory----watch that disposable income disappear with rate hikes.

Tort-based auto insurance means the ambulance-personal injury lawyers that you see on TV will be the only recourse for paying medical bills and we all know these lawyers pocket most of the money won in the lawsuit with the plaintiff often receiving pennies on the dollar.  So, this will cost health care more and that money will go to lawyers and it will come from taxpayer Medicaid.
So, now the insurance, the health care, and lawyers are getting a cut money that always went to actual care for the patient who will be bankrupt and/or left with little access to care.

THESE ARE NEO-LIBERAL AND NEO-CON POLICIES MOVING ALL MONEY TO CORPORATE PROFIT ON THE BACKS OF THE AMERICAN PEOPLE.


All Maryland pols are neo-liberal and neo-cons doing all of the above.

'Rates did go down initially'---before the fraud and corruption sent them soaring.

PIP and No-Fault Auto Insurance Reform


More and more states are abandoning the PIP/No-Fault form of auto insurance in favor of a tort-based set of laws. PIP/No Fault originated in the 1930s as an alternative to the often slow and expensive process of litigating claims. The intent was to speed up the process by shifting the dispute resolution from the courts to the insurance companies. In theory, this was supposed to reduce insurance rates—and rates did go down initially.

By the mid-70s, almost 20 states had some form of no-fault insurance laws. However, over time, rates again rose until "No-Fault" states had higher rates than tort-based states. Beginning in 1980, states started repealing their no-fault laws, and now only nine states (Florida, Hawaii, Kansas, Massachusetts, Missouri, Minnesota, New York, North Dakota and Utah) have mandatory no-fault laws. Eleven states plus the District of Columbia have hybrid laws (Arkansas, Delaware, Kentucky, Maryland, New Jersey, Oregon, South Carolina, South Dakota, Texas and Virginia), which are a combination of no-fault and tort systems.

The pendulum seems to be swinging back to tort-based auto insurance. What does this mean for you as a policyholder?

The Good News

Tort-based systems, in theory, give you more choices for medical payments and could save you substantial amounts of money. As an example, depending on the insurance company and coverages selected, those with Colorado car insurance (the most recent state to revert to a tort-based system) could see savings of 10 percent to 30 percent, according to several recent Denver Post articles.

The Choices

PIP, or Personal Injury Protection, is still available (in most cases), should you wish (or need) to pay for it. If you choose to drop this coverage, or if you are already under a tort-based system and don't have this coverage, you can still purchase it with most policies to cover medical expenses. However, coverage will be limited, with a general ceiling of $50,000. This additional coverage, if purchased, will pay expenses incurred by you and your immediate family for injuries resulting from an at-fault auto accident.

Since many drivers are uninsured or underinsured, it is essential that you understand the ramifications of this and make an informed decision about the "Uninsured/Underinsured Motorists" coverage option.

What if?

What happens if you are at fault? Your auto policy should pay the other person's claims. Companies normally negotiate this with each other. If you have insufficient coverage, you may have to go to court—thus displaying the tort aspect of the law. Either you or your health insurance company will pay medical expenses for you and your family once those expenses exceed your auto policy coverages.

What if you are injured by another driver who is at fault? Generally, the two auto insurance companies will work together to determine fault and pay benefits accordingly. This resolves the problem in most cases. If not, or if the amounts paid are insufficient, it may be necessary to resort back to the court system to recover damages.

What if the other driver is at-fault and has no (or inadequate) insurance? Your insurance company normally covers your medical expenses. This protection is provided under the uninsured/underinsured motorist coverage. If you do not have this coverage, your health insurance usually pays the bills, or you can sue the other party.

Consider the "Deductible Gap"

Generally, under a tort system, medical payments from your own policy are limited. However, in most cases you can choose "additional medical payments" and "Uninsured/Underinsured Motorists" coverage as part of your auto insurance policy.

After years of rising rates, many people may choose to forgo any additional coverages. Adding these coverages creates financial strain if you have high-deductible health insurance, or no health insurance at all. However, there is a potentially huge gap between the amount paid under a tort-based policy and your health insurance deductible. If you have no insurance, the out-of-pocket costs could be staggering. If you are not at fault in the accident, the tort-based system allows you to go to court to receive compensation for these costs, as well as for pain and suffering. But you must do so within a specified time period, and a lot of out-of-pocket expenses may be involved.

What does this mean for health insurance?

As more costs are shifted to the health insurance system, your insurance costs are likely to rise. This also means more people will be without health insurance.

So, what is next?

This is a good time to look at your health insurance to make sure you will have adequate coverage if you drop your PIP/No-Fault coverage. Don't wait until you're in an unpleasant situation to find out if you need more insurance. Be prepared!

_______________________________________________

This is when PIP was working in the interest of citizens and government coffers.  Insurance corporations were earning profits in the millions while the Uninsured auto insurance pool was bursting at the seams with revenue. 

NOW, HOW CAN WE DIVERT THE MONEY PAID INTO THIS FUND FOR HEALTH CARE INTO PROJECTS THAT BENEFIT DEVELOPMENT CORPORATIONS.

This is when a good program was targeted for fraud and corruption just as with the other Federal programs Medicare and Federal Housing Authority.  Working well for citizens, leaving government coffers flush to handle future events, allowing millions in profits to be earned---BUT THAT WAS NOT ENOUGH.  You see the article below was written in 1993----HERE COMES NEO-LIBERAL CLINTON TO DEREGULATE ALL THAT HE CAN SEE......this is the deregulation that sent all of this surplus in the Maryland Automobile Insurance Fund to development corporations like Johns Hopkins in Baltimore.  There's Donald Schaefer funneling money from Transporation Trusts and now MAIF to balance the budget with the public's designated money.  Baltimore Development paraded all kinds of working class and poor out to praise Schaefer who was behind creating Baltimore Development Corporations to funnel all the city's revenue from where it was to go----to where they wanted to send it.

You see the insurance corporations were able to move more and more people into MAIF clearing its rolls of all but the best of drivers.  It went from helping low-income people to subsidizing the costs of these auto insurance corporations.  It was gutted of its funds for
pet projects.  I know Ravens fans love their stadium----but most of the fans are the ones no longer affording auto insurance because of the subsidy.  Note that the Uninsured Motorist insurance had high premiums and should have paid all health care costs when needed.

Remember, this was done through fraud and corruption because this money was not to be fungible.  It needs to come back to this government coffer.



I KNOW---LET'S SEND THIS PIP MONEY TO BUILD THE NEW FOOTBALL FIELD.----M AND T STADIUM AND BALANCE THE BUDGET WITH IT.


MAIF's embarrassment of riches

March 04, 1993|
By Frank A. DeFilippo  Baltimore Sun

THE Maryland Automobile Insurance Fund has a big-time problem. It's rich. So rich, in fact, that other state agencies are itching to get their hot little hands on MAIF's $118 million surplus.

MAIF's been approached about financing a new football stadium in Baltimore. Sen. George W. Della Jr. of Baltimore has sponsored a bill that would shift $50 million of MAIF's money to the general fund. And the Schaefer administration is pilfering $5.4 million from MAIF to help balance the budget.

MAIF is Maryland's state-run insurer of last resort. Any Maryland motorist who's turned down by at least two commercial insurers is automatically MAIFed.

MAIF's rates aren't cheap.
Depending on how bad a motorist's record is, the driver's age and ZIP code, bare-bones coverage can range from $2,559 to a stick-it-to-'em high of $8,677 a year.

That MAIF should be suffering such an embarrassment of riches during a time of budget cuts and deficits is an embarrassment itself. MAIF's $118 million surplus is larger than the $100 million budget shortfall that's being plugged with keno proceeds and other money.

In theory, at least, MAIF is supposed to be non-profit. It was created in 1973 as an antidote to the no-fault insurance craze at the time, kind of an everybody's-fault approach. It's run by a board of trustees and receives no state funds, nor are its assets part of the state treasury. To settle claims, MAIF has the power to attach salaries and seize property.

Over the years, the commercial insurance companies in Maryland have pumped $137 million into MAIF. In effect, good drivers subsidize the insurance of bad drivers. In 1980, MAIF had 30,000 policies. Today it has 135,000.

Much of MAIF's excess is due to changes in the way it does business as well as some shrewd investments. At the same time MAIF has reduced rates over the past three years, it's also lowered awards. MAIF is also now doing all of its work in-house instead of farming it out to free-lance adjusters and collectors.

So it should come as no surprise that the Schaefer administration's pie-slicers approached MAIF about lending the Maryland Stadium Authority $100 million to help finance a new football stadium if Baltimore wins one of two NFL expansion franchises.

There are serious legal questions about whether the Stadium Authority has a funding mechanism for another stadium if the city is awarded a team. Because of a change in the tax code, the use of tax-free bonds to finance stadiums expired at the end of 1990.


The authority argues, though, that it's confident that it can float tax-free bonds because there have been a number of test cases around the country that might allow it.

Moreover, the authority has a bonding limit of $220 million, of which it has already used $170 million to build the new baseball stadium. The authority will pocket another $30 million over three years from lottery proceeds -- on top of the $50 million in bond money left over from the ballyard -- a total of $74 million. But a new topless football stadium will cost about $130 million. Put a lid on it, and it'll cost millions more.

So here's the catch: If the authority can't float tax-free bonds, it will have to go to market with bonds at a much higher interest rate. But before it can go to market with bonds, the authority will need the General Assembly's approval to increase its bonding capacity. This could hoist the total bond package over the spending affordability limit. Allowing this is action the legislature is reluctant to take.

It's for this reason that Gov. William Donald Schaefer is bypassing the spending affordability limit and proposing the use of transportation bonds to finance improvements to Baltimore's Convention Center. Now he's trying to scoot around the spending limit again just in case there's a football team in the city's future.

So drive carefully. Get MAIFed, and the premiums you pay could wind up helping to finance some government geegaw.

Frank A. DeFilippo writes every other Thursday on Maryland politics.

_______________________________________

Here we are just a handful of years later and what the first article stated was in fact true in Maryland----it was the hybrid model Maryland adopted that sent auto insurance money to lawyers and doctors.

Now, they are working to end hybrid and make it all tort. 
People not being able to afford strong health coverage will be preyed upon -----80% of the American people.

Again, another public program that worked fine for the people gutted and dismantled by neo-liberals and neo-cons.  Profit over people every time

Again, we are at the height of Reagan/Clinton's deregulation frenzy.
I wonder if those voters wanting small government wanted to be pushed out of driving because they can no longer afford car insurance? 

Your Public Trusts are being gutted by small government and deregulation.


Why car insurance is so high Law suits: System encourages excessive litigation, raises premiums $130 to $150 a year

.
December 23, 1996  Baltimore Sun

WANT TO LOWER your car-insurance premiums? It could happen -- if legislators in Annapolis stop catering to powerful special interests. More than 60 percent of your premium covers liability. Of that amount, 19 percent could be saved if excessive litigation and fraudulent claims were eliminated.Sadly, state legislators yawned at the problem when a gubernatorial commission sought reforms this year. Too many of them want to please trial lawyers and doctors who vigorously fight for the status quo. These special interests know that lower insurance premiums would come out of their pockets.



_________________________________________



I have talked about AIG spinoff HighStar and its connection with the Ivy League schools like Johns Hopkins.  The subprime mortgage fraudulent loans were insured here with the idea that HighStar would break from AIG with the equity and leave taxpayers to pay 100% on the dollar for the fraudulent Credit Default Swaps.   This article does a good job doing this.  Geithner was the NY FED chief that watched as trillions of dollars of fraud ran through the mortgage industry and did nothing about it----he aided and abetted the massive fraud.  What many people may  not know AIG was more a Life Insurance agency with this HighStar hedge fund sucking all its profits into their bank accounts.  Indeed, the taxpayer bailout of AIG saved the shareholders and those insured by CDS-----but it left an AIG still in business and limping along saying it is healthy when indeed it is not.  AIG Life Insurance advertises on Free TV---you know , where you get life insurance with no checkup.  Like you get a house without having a job. 

SAME THING.  THIS IS THE SUBPRIMING OF LIFE INSURANCE.


They are simply selling as many policies as they can and gaining those monthly payments knowing the coming economic collapse will bankrupt them again.

You are guaranteed to get back what you put into this Life Insurance plan-----OH REALLY????  They will spin that Life Insurance money off as they did with HighStar----probably to HighStar just as the economy is ready to crash.  THEN WE WILL HEAR----WE CAN'T PAY YOUR PREMIUMS BACK!


They will keep doing this with every business sector until you and I get rid of the neo-liberals and neo-cons that have allowed this corporate system to be deregulated with no oversight and accountability.

AIG's Collapse: The Part Nobody Likes to Talk About


Hester Peirce JUN 16, 2014 12:00pm ET

  Earlier this month, American International Group announced the departure of Robert Benmosche, the CEO who led the company through most of its recovery from the financial crisis. Now that the company’s postcrisis chapter is underway, it is worth taking a fresh look at AIG’s downfall and rescue and the implications for reform.

The standard AIG story lays all the blame for the company’s problems on AIG Financial Products—an allegedly unregulated, irresponsible, derivatives dealer hiding within an otherwise solid insurance company.

Former Treasury Secretary Timothy Geithner repeats this traditional line in his recent book, where he recounts how an aggressive “hedge fund-like subsidiary called AIG Financial Products” brought the otherwise healthy insurance company to its knees and ultimately drove it into the Fed’s welcoming arms. Former Federal Reserve chairman Ben Bernanke made a similar claim when he told Congress how angry he was about AIG’s Financial Products unit—“a hedge fund attached [to] a large and stable insurance company.” And former Commodity Futures Trading Commission Chairman Gary Gensler, with typical dramatic flair, explained that AIG’s “subsidiary, AIG Financial Products, operating out of London, brought down the company and nearly toppled the U.S. economy.”

This widely repeated narrative ignores or downplays a critical aspect of AIG’s downfall--the insurer’s securities lending program run for the benefit of its regulated life insurance subsidiaries.

An endnote in Geithner’s tome explains that securities lending was one of “AIG’s major liquidity needs” at the time of its rescue. As I describe in a recent working paper, the company got itself into hot water by lending securities from its life insurance companies’ portfolios. AIG took the cash collateral it received for these short-term loans and—in a departure from insurance industry practice—invested much of it in longer term, illiquid residential mortgage-backed securities.

The securities lending program grew from about $10 billion at the end of 2001 to over $80 billion by the end of 2007. When borrowers stopped renewing the loans, returned their securities, and asking for their cash back, AIG was in a bind—the borrowers’ cash was tied up in reinvestments. 

To meet borrowers’ demands, AIG lent more securities and used the cash collateral from new borrowers to return to existing borrowers. This solution only aggravated the problem. When CEO Robert Willumstad took the reins of AIG in June 2008, the cash drain from securities lending worried him more than AIG Financial Products’ liquidity needs.

Losses from the securities lending program threatened the viability of a number of AIG’s regulated life insurance subsidiaries. To save them from falling below minimum capital requirements, AIG pumped billions of dollars into these units.

Government rescue money was critical to this recapitalization effort. Taxpayer funds were also critical in meeting securities borrowers’ demands for cash. Securities lending counterparties received $43.8 billion in the last quarter of 2008, comparable to $49.6 billion in collateral postings and payments to AIG’s derivatives counterparties.

As consequential as it was to AIG in a time of crisis, nobody likes to tell the securities lending part of the story. First, it doesn’t feed as nicely into the vilification of derivatives that laced crisis narratives and fueled calls for an intense derivatives regulatory regime. Second, the fact that heavily regulated insurance companies got into trouble does not support the call for greater reliance on government regulators. Finally, the rescue of a deeply troubled company is less defensible than the rescue of a healthy insurance company with a troubled derivatives subsidiary.

The Fed’s contention that its loan was adequately secured rested on the supposition that apart from the derivatives unit, AIG was sound. The banks that went in to AIG in September 2008 to assess whether it was worth rescuing concluded that it was not.

As one of the private bankers subsequently explained, “The value of the company in its entirety was not necessarily sufficient to cover the liquidity need that the company had.”


Geithner recounts in his book that—looking for confirmation that a loan to AIG would comply with the legal requirement that “the Fed can only lend against reasonably solid collateral”—he asked Warren Buffett “what he thought about the earning power of AIG’s traditional insurance subsidiaries.” Buffett “was pretty positive about their underlying value, which made [Geithner] more confident that [the Fed] could meet the legal test of being secured to [its] satisfaction.” Buffett’s words of assurance to Geithner weren’t matched by a willingness to put his own money on the line; he refused AIG’s overtures to invest during 2008.

AIG was on the verge of filing for bankruptcy when the Fed stepped in with a better deal for shareholders and creditors. The government subsequently re-rescued the company by devoting additional taxpayer funds to it and softening the lending terms.
 At any of these re-rescue points, the government could instead have let the company go through bankruptcy.

By continuing to prop up AIG, the government shielded the company from the toughest regulator of all—the markets. AIG’s problems were not confined to one unregulated corner; problems also arose in full view of insurance regulators. Rather than assuming the Fed will be better than AIG’s other regulators, we ought to allow the truly superior regulator—the market—to do its job.







_____________________________________________

I spoke yesterday about Life Insurance corporations being the most leveraged and ready to collapse of the insurance industry but guess what is the next in line of threatened insurance corporations-----

THAT'S RIGHT----WORKMAN'S COMP.

They have been allowed to create the same over-leveraged financial status that will have them bankrupt with this coming economic collapse.  No more worker's compensation----

THAT'S HOW YOU GET RID OF THE NEW DEAL SAY NEO-LIBERALS AND NEO-CONS!  BLOW THEM UP AS WE DID THE HOUSING MARKET WITH FRAUD AND CORRUPTION!


Coming after more public wealth and no public justice in place to protect or give us recourse....that is what neo-liberals and neo-cons have been building these few decades-----Clinton and Obama taking the people's party and handing it to Wall Street.  Run and vote for labor and justice in all Democratic Primaries!  WE CAN REVERSE THIS!


Rapidly writing new contracts for worker's comp that they could not afford----sound familiar?


IMPLODING ALL OF THE NEW DEAL PROGRAMS TO PROTECT THE AMERICAN PEOPLE DURING HARD TIMES.


After Tower Group collapse, lingering concerns about industry’s reserve adequacy

By Adam Cancryn and Saurabh Nair, SNL Financial Posted: May 6, 2014

...................................................

Most of the concern centers on long-tailed commercial lines, particularly workers’ compensation. Claims behavior takes longer to develop than in other sectors, making it more difficult to tell how much money should be set aside even years after a policy is written. Misjudging those reserving needs can be disastrous. SeaBright Holdings Inc. sold in 2013 after reserve charges pressured its operations, and Meadowbrook’s stock dropped nearly 35% from 2012 through 2013 amid several quarters of reserve charges. Tower Group served as the highest-profile example of reserving gone wrong, with its shares losing more than 80% in the six months before it hastily agreed to a sale.

Those companies ran into problems with business written during a softer market between 2007 and 2011, when they grew their books rapidly just as the rates being charged for coverage were at their most inadequate. When claim costs far outstripped the rates they originally charged, the insurers had to quickly build up their loss reserves. Analysts now consider the 2010 accident year one of the worst performers of the cycle, attributing the troubles to low prices and more expensive claims driven by high unemployment.

“The troubles they have now is on stuff they wrote years ago,” Keefe Bruyette & Woods analyst Robert Farnam told SNL.


The 10 workers’ comp insurers with the greatest adverse development in 2013 reported an aggregate $702.6 million in charges. SeaBright and Meadowbrook did not make that list. Tower Group was also absent, as it has not yet submitted all of its filings, but it said in February that its U.S.-taxed subsidiaries recorded $269.2 million of 2013 reserve charges.

Despite the issues, the sector continues to steadily release reserves.
Companies argue that Meadowbrook and Tower Group in particular are isolated situations, driven just as much by reckless growth as the broader industry conditions.
The rest of the industry, they contend, was more prudent in writing business during the soft market, leaving it with less risk and the ability to make up for a few unfavorable accident years with better results from other parts of their books of business. The insurers themselves are also working with much more detailed data than analysts and outside actuaries, they say, allowing them to most accurately evaluate their reserves.

“We look at it on a much more granular basis, and we think we have certainly better information,” W. R. Berkley Corp. Vice President of External Financial Communications Karen Horvath told SNL. Analysts have singled out W.R. Berkley’s reserving position as one of the more concerning in the industry, predicting that its quarterly releases would soon slow. But the company in the first quarter released about $25 million, extending a string of favorable reserve development that dates back to 2007.

Even so, skeptics are not quite willing to accept insurers’ assurances as fact. They worry that companies are already drawing down their reserves for the 2012 and 2013 accident years to supplement earnings or balance out problems in earlier years, without enough data to be sure about how those most recent years will ultimately perform.


“There is just no way a company would know or have the type of certainty under which they would be able to release reserves from some of the most recent business,” said Standard & Poor’s credit analyst Siddhartha Ghosh, who warned that the workers’ comp sector will eventually have to strengthen reserves significantly. “We don’t think that’s a prudent way of addressing reserves.”

He pointed to the previous market cycle, when workers’ comp companies released $12.4 billion of reserves between 1994 and 2000 and then had to scramble to add back $10.6 billion from 2001 to 2005 to make up for their overconfidence.

The sector’s fortunes over the next several years will depend heavily on whether insurers can keep raising prices, analysts said.
The workers’ comp business is still not reliably profitable despite recent pricing actions, and low interest rates continue to pressure investment income. If companies can continue to move their prices considerably and consistently higher over the next couple years, the new premium should be enough to cover costs. If the rate hikes falter and claims from recent policies start piling up, though, the reserving actions that insurers used to buoy earnings for so long could stick them with a deficit that will take years to fill.

“It’s a simple equation,” Ghosh said. “The premium coming in has to be higher than the losses going out.”


________________________________________________
This is a pretty good analysis of the coming bond market crash.  Notice it states that the insurance market will be taken out----Life Insurance the first to go.  See why you are seeing all those Life Insurance ads requiring no medical checkup or anything-----

THEY ARE SIMPLY GOING TO POCKET THOSE MONTHLY PREMIUMS.


This was written in 2013 acting as if the crash would come in 2014 but Bernanke allowed the QE bond bubble machine to continue another year and Yellen is now having to address it as the FED is leveraged out.  The crash will come soon......the FED is simply manipulating the inevitable.

'The most vulnerable are those who can least afford to suffer losses: Seniors who are approaching or in retirement, who have shifted large amounts of their money into fixed income investments.

Your tax-free municipal bonds could tank.

Your annuities and other insurance policies could turn to dust.

Your money invested in bank and insurance company stocks could vanish right before your very eyes'.


All of this is pretty important----yet, we do not hear a thing about it from media, labor or justice, our pols---and all of these national leaders know it is coming.  Their policies created this mess and labor and justice leaders are constantly backing neo-liberals.
  It is important to have Governors and Mayors that will work through this in the people's interest and not corporate interest.

This article is not
hyperbole---it will happen.
I did edit out his marketing ---

The Next Great Bubble about to Collapse

Martin D. Weiss, Ph.D. | Saturday, January 19, 2013 at 7:30 am

130 Senator Orrin Hatch warns that the bubble has the power to “destroy the retirement savings of millions of Americans.”

Famed economist Leonard E. Burman of Syracuse University is warning the U.S. Senate of “disastrous consequences for ourselves and the rest of the world.”

Goldman Sachs … Bank of America … Morgan Stanley … Royal Bank of Scotland … JPMorgan … and Oppenheimer Funds are all warning that it could bankrupt millions of investors.

Congressman Ron Paul says, simply, “this country will be ruined.”

These and many other authorities are talking about the greatest financial bubble in human history:

A bubble that is now more than EIGHT times larger than all the stock exchanges in the United States combined.

A bubble so massive, it is four times larger than the dot-com bubble of the 1990s and the housing bubble of the 2000s combined.

Now that bubble has begun to burst.

As it implodes, it will launch interest rates into the stratosphere … crush the feeble U.S. economy … destroy major U.S. banks and insurance companies … drive your cost of living through the roof, threaten your standard of living and financial security … and push the U.S. government to the very brink of financial collapse.

But the best defense is a strong offense -- and this crisis will also create windfall profit opportunities for a select group of investors who make the right moves now.

Just a few days ago, Weiss Research analyst Tom Essaye hosted a special online summit meeting to explain exactly how, and I’ll give you a transcript of the meeting in a moment.

In our online summit, he was joined by Safe Money editor Mike Larson and Real Wealth editor Larry Edelson. Here’s the transcript…

The Next Great Bubble about to Collapse
with Tom Essaye, Mike Larson and Larry Edelson — abridged transcript

Tom Essaye: If there’s anyone who knows how to capitalize on bursting bubbles, it’s our firm, Weiss Research.



For nearly a year now, I’ve been sounding the alarm again; NOT for the bursting of a bubble in the tech sector or housing sector … but in a market that is many times larger than all the stock exchanges in the United States COMBINED.


Debt is created in the bond market. That’s where the government goes to borrow money. So do states and local governments. Companies, too.

Borrowers sell bonds — or notes and bills — that guarantee investors a certain rate of interest or “yield” over time.

Since the turn of the century, the U.S. bond market has simply exploded in size — adding $20.7 trillion in new debt.


But now, despite massive new initiatives by the U.S. Federal Reserve, the meteoric rise in prices that characterized the debt market since the turn of the century has sputtered, stalled and is now dead in its tracks.

Millions of investors all over the world — including many of the world’s richest central banks — have started to stampede for the bond market’s exit.

And now, we’re beginning to see the first cracks appearing in this massive bubble.


This chart of the PIMCO Total Return Bond Fund is a perfect picture of the bubble in the bond market — and also the beginning of the crash.

On the left side of the chart, you can see the bubble in the bond market being inflated.

On the right-hand side, you can see how prices just plunged well below their support levels.

And just look at this chart of the iShares Municipal Bond ETF: It just fell off the proverbial cliff, giving back every penny it gained since last July!

But this crash has barely begun. The last few Treasury auctions showed that bidding from foreign central banks is plunging to the lowest level in years.

In addition, U.S. investors are starting to turn bearish on Treasuries. A recent report from a top industry watchdog showed that nearly 20% of all Treasury investors have started to cut back their holdings.

Even Fitch — the normally conservative ratings firm — is warning that a massive bubble has been created in the bond market.

This is huge. Bubbles are like an enormous Ponzi scheme: They collapse when the money stops flowing in.

The moment that happens, it’s over. And it’s beginning to happen right now!

As this bubble — the greatest bubble mankind has ever seen — implodes, the consequences will be devastating for millions of unprepared investors, just like the tech bubble was and just like the housing bubble was.


The most vulnerable are those who can least afford to suffer losses: Seniors who are approaching or in retirement, who have shifted large amounts of their money into fixed income investments.

Your tax-free municipal bonds could tank.

Your annuities and other insurance policies could turn to dust.

Your money invested in bank and insurance company stocks could vanish right before your very eyes.






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August 14th, 2014

8/14/2014

0 Comments

 
WE CAN REVERSE ALL OF THESE POLICIES EASY PEASY BY SIMPLY VOTING FOR POLS THAT SHOUT OUT AGAINST GLOBAL CORPORATIONS DRIVING MARYLAND'S ECONOMY AND FOR REBUILDING RULE OF LAW


I have been speaking with and handing my research to Baltimore police officers for a few months now making sure they understand that Johns Hopkins has told City Hall and the Chief of Police Batts to move towards privatization of Baltimore police and fire departments.  Since the economic collapse Baltimore has seen an explosion of fraud and corruption that is taking a billion dollars a year from city coffers and we cannot afford to support public sector employees as middle-class when all the money is being sent to corporate fraud and subsidy.  The public union-busting by neo-liberals and neo-cons in Baltimore and Maryland-----those neo-liberals O'Malley/Brown and the Maryland Assembly with the neo-cons Rawlings-Blake and the Baltimore City Hall are now getting rid of our public police and fire.  Remember, Clinton, Bush, Obama have almost finished privatizing the US military.....the manufactured sequestration cuts for the military were all about getting rid of public military and their benefits so now these global corporate pols are doing the same at the state and local level.  When you are bringing a formerly first world nation to third world status you must have all security working for corporations and not loyal to the public as public sector employees say Johns Hopkins.


Baltimore Chief of Police Batts was brought to Baltimore to do just that.  The Hopkins-owed SAIC surveillance and security systems Batts installed in Oakland, California are now being installed in Baltimore.  Batts is paid a salary that looks like the corporate executive he is.  The Baltimore Police have been battered with wage and benefit cuts and changes in shifts and hours that have Baltimore police one of the worst work environments and pay in the state and that doesn't even include the crime and violence and chronic intra-departmental problems.  If one didn't know better it almost seems like they are trying to get Baltimore police officers with tenure and pensions to leave the city!  Talking with officers that is indeed what is happening.  Police officers with ten years invested in pensions are leaving because of the hostile environment brought by Hopkins and their pols at City Hall.  The more stress on the police the more stress on the job.  Baltimore City is a tinderbox as citizens are tired of crime and violence and the police ignoring civil rights and liberties in the communities.  All of this is caused by the public policy written at Johns Hopkins and played out in City Hall.  Deliberately high unemployment and a stagnant economy is impoverishing people and the police department is headed by a chief known for abuse inside and outside of the department.  Remember, injustice necessitates chaos and that is what neo-liberals and neo-cons are allowing to happen under the guise of budget cuts and small government.

The Baltimore Police Department has sent representatives to Europe to contract with an International Security Corporation to send private security workers to Baltimore to replace existing public forces.  The fire department will go next.  The citizens already have trouble with police acting outside of the Constitution and when International security forces come----they will be working under Trans Pacific Trade Pact-----which replaces the US Constitution say the neo-liberals and neo-cons. 

ONLY THE TRANS PACIFIC TRADE PACT IS ILLEGAL AND A COUP AGAINST THE US CONSTITUTION SO ANY ATTEMPTS TO INSTALL TPP CAN BE REVERSED AS ILLEGAL.



What does life under International Security forces look like?  Well-----third world.


State Police, or Police State? --Nathan

Eleven facts about police militarization:
1. It harms, and sometimes kills, innocent people.
2. Children are impacted.
3. The use of SWAT teams is often unnecessary.
4. The “war on terror” is fueling militarization.
5. It’s a boon to contractor profits.
6. Border militarization and police militarization go hand in hand.
7. Police are cracking down on dissent.
8. Asset forfeitures are funding police militarization.
9. Dubious informants are used for raids.
10. There’s been little debate or oversight.
11. Communities of color bear the brunt.

http://billmoyers.com/2014/08/13/not-just-ferguson-11-eye-opening-facts-about-americas-militarized-police-forces/


_____________________________________________

A police representative going to Europe to talk International Security contracting for the Baltimore City Police force would no doubt find an organization like the one below.  This is a US global corporation that does much of its work overseas but we see these operations moving into Western nations under the guise of 'terrorism'.  The threat of 'terrorism' falls squarely with dissent and protest---crime and violence by American citizens.  As 70% of Americans fall into poverty from the massive corporate frauds and the deliberate global corporate stagnation of our domestic economy-----and with that 70% growing to 80% and more----this third world society will see people WAKING UP and this is the structure O'Malley and the Maryland Assembly and Rawlings-Blake and Baltimore City Hall are building.  It is of course coming to your neck of the woods as well!

As important as a militarized government structure is we need to think as well how much taxpayer money is being spent on all of this Stalin-like security buildup.  The article below states that so much taxpayer money was funneled
to SAIC to create this Hopkins corporation that much of what all taxpayers paid in taxes for years went into building this surveillance structure unrolling in cities like Oakland, Calif, NYC, and Baltimore, Maryland.


You can see the job categories to see this organization will take over all public security duties as a global corporation.  Our Bank of America in Charles Village Baltimore already has contracted International Security outside their bank branch.

ISIO - INTERNATIONAL SECURITY INDUSTRY ORGANIZATION
Security Case S
tudies and
Applications


Belong to the most formidable International NETWORK for Security Professionals

ISIO Demographics

Reach
increases world-wide. Security Directors, Managers, General Managers, Trainers, Staff in all sectors, namely, Military and Defence, Buildings, Mall and Security, Law Enforcement, Prisons, Investigators, Assessors, Consultants and Advisors for Ports and Cargo, Hotel and Casino Security landside and on ships. Location (289071)United States, (89152)United Kingdom, (38194)India (34709)Canada, (31546)South Africa


The Focused Security Professional, is able to identify companies that have experience in providing security solutions for [Their] region of interest.

* Bank Security

* Border Security

* Building Security

* Business and Commercial Security

* Cargo Security

* City Security

* Control Station Security

* Event Security

* Homeland Security

* Hospital Security

* Hotel, Casino & Landmark Security

* Military and Defense Security

* Industrial Security

* Law Enforcement Security

* Oil and Refinery Security

* Port Security

* Prison Security

* Rail/Tunnel and Subway Security

* Retail and Store Security

* School Security


PROVIDING INTERNATIONAL SOLUTIONS FOR INTERNATIONAL PROBLEMS AND OPPORTUNITIES. ISIO Global is a boutique, international solutions provider headquartered in the U.S. with operations in North and South America, Africa and Asia. The ISIO Global team of Principals and associates is comprised of a unique and diverse set of professionals with backgrounds in government security, intelligence, logistics, political strategy, energy, finance, international trade, risk management, and the military.

ISIO Global provides comprehensive custom-tailored solutions to meet our clients’ needs. Our client list includes countries, presidents and other high ranking officials from both the private sector and the military, high net worth individuals, and Fortune 100 companies. Through our vast international experience and contacts, ISIO Global is uniquely positioned to quickly and efficiently design and implement comprehensive solutions for the most pressing problems and exciting opportunities around the globe.

______________________________________________
You can see how neo-con SAIC and Hopkins is with this connection to Bush/Cheney and Halliburton----the biggest fraudsters in the world.  The reason I speak now about what most people who study this knows is that this is what will be brought to Baltimore -----and has been in the works for a while-----and it is completely ineffective, corrupt, and will work with no transparency or with any regard to Rule of Law.  If you think Baltimore Police Department is lacking transparency or attention to Constitutional policing wait until this ISIO/SAIC consortium comes our way.

THAT'S A NEO-LIBERAL AND NEO-CON FOR YOU----THIRD WORLD SOCIETY
. 

STOP VOTING FOR THEM.  REMEMBER, IN MARYLAND WE HAVE LABOR AND JUSTICE LEADERS BACKING THESE NEO-LIBERALS EVERY ELECTION.  VOTE FOR BROWN OR GANSLER SAY BALTIMORE MINISTERS AND MARYLAND LABOR UNION LEADERS----WELL, THIS IS WHAT THEY ARE PUSHING ON THE CITIZENS OF MARYLAND.



This is an attempt to make a blog in which I comment on scientific issues.

Thursday, February 15, 2007

Who or what is SAIC? Vanity Fair has a quite interesting article about SAIC, a company I had never heard about before.

Washington's $8 Billion Shadow
Mega-contractors such as Halliburton and Bechtel supply the government with brawn. But the biggest, most powerful of the "body shops"—SAIC, which employs 44,000 people and took in $8 billion last year—sells brainpower, including a lot of the "expertise" behind the Iraq war.
The article goes on to describe SAIC, and their less than stellar record. The article also touches on why such companies exist.
It is a simple fact of life these days that, owing to a deliberate decision to downsize government, Washington can operate only by paying private companies to perform a wide range of functions. To get some idea of the scale: contractors absorb the taxes paid by everyone in America with incomes under $100,000. In other words, more than 90 percent of all taxpayers might as well remit everything they owe directly to SAIC or some other contractor rather than to the IRS.
This is hardly a new trend. In his 1980 book, Fat City, Donald Lambro describes much the same going on. It goes without saying that this is not a cost effective way of running things, and that it creates problems with oversight and conflict of interest, as the article also explains.
In Washington these companies go by the generic name "body shops"—they supply flesh-and-blood human beings to do the specialized work that government agencies no longer can. Often they do this work outside the public eye, and with little official oversight—even if it involves the most sensitive matters of national security.

[....]

SAIC's relative anonymity has allowed large numbers of its executives to circulate freely between the company and the dozen or so government agencies it cares about. William B. Black Jr., who retired from the N.S.A. in 1997 after a 38-year career to become a vice president at SAIC, returned to the N.S.A. in 2000. Two years later the agency awarded the Trailblazer contract to SAIC.
I highly recommend the article - go read it, and see what the US taxpayers' money is really used on.


__________________________________________

SAIC is Johns Hopkins and represents billions of taxpayer dollars sent to Hopkins in development funding and as you see below-----it operates world-wide just as Baltimore Board of Estimates operates here in Baltimore.  The corruption in cost overruns and bid-rigging is breath-taking and you see the same ethics permeates all of what these Ivy League Universities are involved. 

SAIC is the spying network behind the NSA that Snowden exposed to the world and it is in the consortium of security and surveillance groups that operate as ISIO above.  ISIO would be an example of what the police privatization in Baltimore would look like.  For decades SAIC and ISIO have operated in developing worlds but they are now moving into Western countries to control dissent of Americans et al to being taken third world.


Barbara Mikulski and Ben Cardin have worked hard to send Federal funds to build these kinds of systems through Hopkins.  HOW TOTALITARIAN OF THEM!


The article states that despite the known corruption in SAIC that Bloomberg of NYC handed a multi-million contract to the same and the reporter wonders why give business to a known criminal element-----WELL, HOPKINS IS BLOOMBERG.

'SO INEFFECTIVE'-----DOESN'T THAT SOUND LIKE GOVERNMENT IN MARYLAND AND BALTIMORE???


Just How Corrupt is SAIC?

Wednesday, December 22, 2010 at 7:23PM
David Callahan The latest revelation in the CityTime corruption case offers yet more evidence that the Science Applications International Corp., or SAIC, may have an unethical organizational culture. SAIC is one of the largest and most well-connected government contracting firms in the country, with 45,000 employees worldwide. It's incompetence in handling the CityTime contract, with hundreds of millions of dollars in cost overruns, appears to be part of a pattern -- with other clients, like the FBI, reporting similar experiences.

But now comes evidence of something darker. According to a files unearthed by New York City Controller John Liu, SAIC tried to exert improper influence over the top city official monitoring its work. Juan Gonzalez, the New York Daily News reporter who has been on top of this story all along describes the new revelations about SAIC:

On Jan. 28, 2002, Richard Valcich, then the director of the Office of Payroll Administration, wrote a one-page note to William Russell, a senior vice president for Virginia-based Science Applications International Corp. (SAIC).

"I appreciated meeting with you to discuss SAIC issues that are pending with the Office of Payroll Administration," Valcich wrote. He then apologized to Russell "if I seemed rude and abruptly shortened your discussion on a future post city-employment position with SAIC."

"[I]t is inappropriate to discuss any post employment with a company that I do business," Valcich warned him.

Valcich went on to say that he was "flattered you would consider me for such a position with SAIC but there are restrictions due to the city's conflicts of interest rules."

Such restrictions include a lifetime ban against working on the same "matter" that a city employee handled while in government. 

Wow. Of course, those familiar with how big contractors and lobbyists corrupt government officials will not find any of this surprising. There is a long history of companies using offers of lucrative jobs to exert improper influence. These deals are simple and often hard to scrutinize: Do our bidding now, companies say, and we'll give you a job paying a million dollars a year (or whatever) down the road. A big focus of ethics reform in recent decades has been to crack down on "revolving door" enticements.

SAIC's tactic in this episode raises questions about its corrupt dealing around other contracts. Stay tuned for more on that topic. 

Gonzalez's latest article on the subject of SAIC includes a kicker near the end: 

Amazingly, despite years of red flags on the CityTime project, the Bloomberg administration confirmed yesterday it recently awarded a new $40 million contract to SAIC.

So what is it about Michael Bloomberg and SAIC?
Why is a mayor so famously focused on efficiency so forgiving to a contractor that is so ineffective? That is a question that deserves closer attention. 

 
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August 13th, 2014

8/13/2014

0 Comments

 
Do you hear your labor and justice leaders shouting out against this?  NO, they are backing the neo-liberals who are embracing Trans Pacific Trade Pact pretending it will create jobs.  Well, you will be working as a third world Chinese sweat shop employee with these neo-liberals.

Below I show the local effect of PERESTROIKA of American citizen's assets by global corporations.  I have spoken before about the goal of privatization of public water.  We see the effect in Detroit, a city gutted with fraud and corruption just as in Baltimore.  The American people have paid loads of taxes over a few decades that would have rebuilt state and city infrastructure if that revenue was not being looted by Baltimore Development Corporation and Hopkins to expand global interests.  Now, they want to raise public water bills over double the amount to pay again for rebuilding infrastructure and guess what----the same Johns Hopkins is there to pocket the profits from this public work as VEOLA ENVIRONMENT.  Remember, these Ivy League universities made their billions in endowment profits from the subprime mortgage fraud and AIG investment firm that was spun to become HighStar.  So, all of that profit was based on fraud.  They used that money made from fraud to by VEOLA ENVIRONMENT from the French global corporation.  These same Ivy League universities like Hopkins are now pushing Baltimore City Hall to privatize public transportation to French Veola and privatize public water and waste to HighStar VEOLA ENVIRONMENT.  So, Harvard, Yale, Princeton, Stanford, Berkeley, et al of the Ivy League are using those endowment funds to privatize public water and waste all over the world.  At the same time they are buying all fertile land and fresh water sources around the world at the same time contaminating US and world aquifers with fracking.....as in Maryland with the Marcellus Aquifer.


I am writing today after coming from the center of fraud and corruption----Baltimore City Hall and the Board of Estimates meeting.  I attended today because they are handing contracts to private corporations for public water service that everyone knows is only steps towards water privatization.  There is Jack Young and Mr. Black for Rawlings-Blake and Comptroller Pratt ready to vote for privatization of Baltimore city public water and waste.  All working for the most neo-conservative institution in the world----Johns Hopkins while running as Democrats.

PRIVATIZING PUBLIC WATER----HOW NEO-CONSERVATIVE OF THEM!!!!!


Jack Young as head of the Board of Estimates has worked hard to make sure public interruptions do not occur during meetings by placing a police officer to escort citizens out if they try to speak.  You know, the public is not allowed to speak about public policy in public in Maryland and especially in Baltimore.  So, instead of speaking during the Board of Estimates meetings on camera for all to see, people like Cindy Walsh must speak to the room before the meeting starts.  Only today, when I explained to all in the room what the goal of this privatization is and how Johns Hopkins is involved-----Jack Young called the police to drag me out BEFORE THE MEETING EVEN STARTED.  He works so hard to make sure no one knows what is happening that he was prepared to throw me out for just speaking in the City Hall room.  I of course reminded him that the meeting had not started and he could not throw me out of the room -----he immediately called the meeting to order.

YOU KNOW WHO LEADS IN PRIVATIZATION OF ALL THAT IS PUBLIC?  O'MALLEY/ANTHONY BROWN.  YOU KNOW WHO BACKED BROWN DURING THE ELECTION FOR GOVERNOR?  LABOR UNION LEADERS.  KNOW WHO WAS THERE TO PROTEST PRIVATIZED WATER----LABOR UNIONS.  ASK FRED MASON OF MARYLAND AFL-CIO WHY HE BACKS NEO-LIBERALS DOING ALL THIS DAMAGE?

We need labor union leaders working for their membership's interests when they support candidates.  You cannot support the neo-liberals installing these policies and then pretend to fight against them.  Union members and labor and justice need to see how VERY, VERY, VERY, VERY BAD THESE PRIVATIZATION POLICIES ARE FOR EVERYONE!

IT TAKES A SOCIOPATH TO PLAN THESE KINDS OF CORPORATE POLICIES AND THE POLS HIRED TO PUSH THESE GOALS INTO PLACE ARE NEO-LIBERALS AND NEO-CONS.
ALL OF MARYLAND POLS ARE NEO-LIBERALS AND NEO-CONS.


Don't privatize Baltimore water
[Letter]June 23, 2014

The presence of the private water industry at this week's United States Conference of Mayors meeting threatens public health and democracy in Baltimore.

Time and time again, experiences in other cities that have privatized their water systems have demonstrated that privatization fails to provide secure and equitable water access to residents. The industry's strategy of placing profits over the human right to water is reprehensible and undermines the democratic system.

As a voter and someone who calls Baltimore my home, I strongly urge Mayor Stephanie Rawlings-Blake to take a stand at the USCM and keep the private water industry out of our city.

Jacob Fishman, Baltimore


_________________________________________


Did you know that it is Johns Hopkins who is a major shareholder in Veola Environment through HighStar Investment firm that is pushing the privatization of public water and waste?  Did you know that Veola Environment and HighStar have Ivy League endowments in the other cities pushing the privatization of public water----like Harvard, Yale, Princeton, Stanford, and Berkeley.  Privatization of public assets to maximize profits for these endowments.

Did you know the goal is to privatize water, end public subsidy of water as water rates rise, use SMART METERS to ration water to what the every growing impoverished public can afford all to maximize profits for Johns Hopkins endowment? 

You must be listening or reading Maryland media -----they make sure you do not know----especially Marc Steiner.

VEOLA ENVIRONMENT is a global corporation bought from the French global corporation VEOLA of transportation fame.  The one known for slave conditions for their workforce all over the world.  VEOLA ENVIRONMENT is working all over the world to privatize the world's public water and waste and in nations having the pleasure of a few decades of their presence water rationing with SMART METERS has been in what followed.  Now, Wall Street and Ivy League endowments want to bring it to America since they are taking the US to third world levels.  That Trans Pacific Trade Pact may not be in place in the US but Maryland and neo-liberals in Congress are preparing for it.



I wonder if an interview with Hopkins staff will let people know what the goal is and who is behind it?


Water Privatization in Baltimore

08/12/14 Marc Steiner
August 11, 2014 –

Segment 3 We turn to the topic of the possibility of water privatization in Baltimore, with: Lauren DeRusha, National Campaign Organizer of Corporate Accountability International; and Dr. Lester Spence, Center for Emerging Media Scholar-in-Residence and Associate Professor of Political Science and Africana Studies at Johns Hopkins University.




The Dangerous Return of Water Privatization

Community waters systems have sustainably provided safe drinking water for generations but corporations are now using local fiscal crises to push for water privatization. By Maude Barlow and Wenonah Hauter, from Sojourners
January/February 2014
  Utne


It’s time for an integrated, holistic national water policy, including the establishment of a federal water trust fund. Instead we face the cannibalization of our public utilities by private corporations.

The United States has one of the best public water supply systems in the world. More than 250 million people count on local governments to provide safe drinking water. Over the last 40 years, federal, state, and municipal governments have worked together to improve and protect water resources. The Clean Water Act, the Safe Drinking Water Act, and the Endangered Species Act have kept the U.S. on target for preserving rivers, lakes, watersheds, wetlands, natural aquifers, and other sources of fresh water.

Great strides have been made in managing waste water and storm water. More than 90 percent of community water systems in 2012 met all federal health standards. Public water utilities have been a tremendously successful model for the U.S. and continue to keep drinking water safe, accessible, and affordable for all Americans.

It hasn’t always been this way.

During the 1800s, private companies controlled the water systems of several large U.S. cities—to dire effect. Because the companies were more interested in making a profit than providing good service, many poor residents lacked access to water. As a result, cholera outbreaks were common in poor neighborhoods; water pressure was sometimes too low to stop fires, which destroyed both homes and businesses.


By the turn of the 20th century, city governments, including Baltimore, Boston, New Orleans, and New York City, had taken over drinking water provision from private companies. The goal of government was to improve service, reduce waterborne diseases, and increase water pressure to better fight fires. New York City, for example, assumed control of its drinking water services from the bank and holding company called the Manhattan Company, the predecessor of JPMorgan Chase, after an outbreak of cholera killed 3,500 people and a devastating fire caused extensive property damage.

These cities learned the hard way just how important public water provision is for human and environmental health. The shift to a public utility system, responsive to community needs, allowed local public control of water and sewer services. Public utilities helped local governments manage water resources, growth, and development, and ensured that safe and reliable services were available to all.

Now, just past the turn of the 21st century, our national water framework needs rethinking with climate change and sustainability in mind. It’s time for an integrated, holistic national water policy, including the establishment of a federal water trust fund. Instead we face the cannibalization of our public utilities by private corporations.

Despite our success over the last 100 years, public water utilities face daunting challenges in the days ahead:

1. Water systems nationwide are aging and wearing out. Last summer more than 150,000 residents in the greater Washington, D.C. region faced the specter of being without water for days because of a stuck valve on a major water main. Delayed maintenance on the valve due to funding cuts led to the crisis.

________________________________________________

Ivy League university endowments were heavily invested in the subprime mortgage loans knowing they were fraudulent and would bring down the economy.  They took the profit made from those fraudulent loans and started buying land overseas with the intent of cornering the next market----privatized public works like transportation and water and waste.  They starved governments with massive frauds and corruptions just to pretend we now have to hand all that is public over to the same institutions creating and profiting from the frauds.


I'm picking on Ivy League universities today but there are plenty of other bad guys profiting from these policies.  Look how rich Ben Cardin and Nancy Pelosi are getting from Insider Trading for example!  Those Clinton neo-liberals who voted for global corporations and markets have worked two decades to advance these policies.  IT'S THE REPUBLICANS THEY SAY-----

WELL, MARYLAND IS ONE BIG NEO-LIBERAL STATE SO IT'S BOTH NEO-CONS AND NEO-LIBERALS.




US universities in Africa 'land grab' Institutions including Harvard and Vanderbilt reportedly use hedge funds to buy land in deals that may force farmers out
  • John Vidal and Claire Provost
  • The Guardian, Wednesday 8 June 2011 15.18 EDT


US universities are reportedly using endowment funds to make deals that may force thousands from their land in Africa. Photograph: Boston Globe via Getty Images Harvard and other major American universities are working through British hedge funds and European financial speculators to buy or lease vast areas of African farmland in deals, some of which may force many thousands of people off their land, according to a new study.

Researchers say foreign investors are profiting from "land grabs" that often fail to deliver the promised benefits of jobs and economic development, and can lead to environmental and social problems in the poorest countries in the world.


The new report on land acquisitions in seven African countries suggests that Harvard, Vanderbilt and many other US colleges with large endowment funds have invested heavily in African land in the past few years. Much of the money is said to be channelled through London-based Emergent asset management, which runs one of Africa's largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers.

Researchers at the California-based Oakland Institute think that Emergent's clients in the US may have invested up to $500m in some of the most fertile land in the expectation of making 25% returns.

Emergent said the deals were handled responsibly. "Yes, university endowment funds and pension funds are long-term investors," a spokesman said. "We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way … The amounts are large. They can be hundreds of millions of dollars. This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive."

Chinese and Middle Eastern firms have previously been identified as "grabbing" large tracts of land in developing countries to grow cheap food for home populations, but western funds are behind many of the biggest deals, says the Oakland institute, an advocacy research group.

The company that manages Harvard's investment funds declined to comment. "It is Harvard management company policy not to discuss investments or investment strategy and therefore I cannot confirm the report," said a spokesman. Vanderbilt also declined to comment.

Oakland said investors overstated the benefits of the deals for the communities involved. "Companies have been able to create complex layers of companies and subsidiaries to avert the gaze of weak regulatory authorities. Analysis of the contracts reveal that many of the deals will provide few jobs and will force many thousands of people off the land," said Anuradha Mittal, Oakland's director.

In Tanzania, the memorandum of understanding between the local government and US-based farm development corporation AgriSol Energy, which is working with Iowa University, stipulates that the two main locations – Katumba and Mishamo – for their project are refugee settlements holding as many as 162,000 people that will have to be closed before the $700m project can start.
The refugees have been farming this land for 40 years.

In Ethiopia, a process of "villagisation" by the government is moving tens of thousands of people from traditional lands into new centres while big land deals are being struck with international companies.

The largest land deal in South Sudan, where as much as 9% of the land is said by Norwegian analysts to have been bought in the last few years, was negotiated between a Texas-based firm, Nile Trading and Development and a local co-operative run by absent chiefs. The 49-year lease of 400,000 hectares of central Equatoria for around $25,000 (£15,000) allows the company to exploit all natural resources including oil and timber. The company, headed by former US Ambassador Howard Eugene Douglas, says it intends to apply for UN-backed carbon credits that could provide it with millions of pounds a year in revenues.

In Mozambique, where up to 7m hectares of land is potentially available for investors, western hedge funds are said in the report to be working with South Africans businesses to buy vast tracts of forest and farmland for investors in Europe and the US. The contracts show the government will waive taxes for up to 25 years, but few jobs will be created.

"No one should believe that these investors are there to feed starving Africans, create jobs or improve food security," said Obang Metho of Solidarity Movement for New Ethiopia. "These agreements – many of which could be in place for 99 years – do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors."

"The scale of the land deals being struck is shocking", said Mittal. "The conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.

Research by the World Bank and others suggests that nearly 60m hectares – an area the size of France – has been bought or leased by foreign companies in Africa in the past three years.

"Most of these deals are characterised by a lack of transparency, despite the profound implications posed by the consolidation of control over global food markets and agricultural resources by financial firms," says the report.


"We have seen cases of speculators taking over agricultural land while small farmers, viewed as squatters, are forcibly removed with no compensation," said Frederic Mousseau, policy director at Oakland, said: "This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. More than one billion people around the world are living with hunger. The majority of the world's poor still depend on small farms for their livelihoods, and speculators are taking these away while promising progress that never happens."

______________________________________________



Why is Harper Selling Canada's Fresh Water Supply to French Companies?


Posted: 10/18/2013 12:35 pm EDT Updated: 01/23/2014 6:58 pm EST   Huffington Post


Prime Minister Harper has just signed the Canada-EU Comprehensive Economic and Trade Agreement (CETA), and Canadians who care about our freshwater heritage should be deeply concerned for three reasons.

First, the massive increase in beef and pork exports that have been negotiated will put a terrible strain on our water supplies. Beef producers can now export close to 70,000 tonnes of beef to Europe and an undisclosed but higher amount of pork. Meat production is highly water intensive. It takes over 15 million litres of water to produce one tonne of beef, for example.

Already Alberta's dwindling water supplies are over-taxed by a beef industry that is rapidly expanding and expected to double its water footprint by 2025, according to an assessment done before this deal was signed. Intensive hog operations in Manitoba are killing Lake Winnipeg, their waste creating nutrient overload that covers over half the lake in blue green algae. To protect our precious watersheds, what we need is more sustainable and local food production, not massive new trade deals that will strain our water sources beyond their capacity.

Second, this deal will give French companies Suez and Veolia, the two biggest private water operations in the world, access to run our water services for profit. Under a recent edict, the Harper government has tied federal funding of municipal water infrastructure construction or upgrading to privatization of water services. Cash-strapped municipalities can only access federal funds if they adopt a public-private partnership model, and several cities have recently put their water or wastewater services contracts up for private bids. If Suez or Veolia are successful in bidding for these contracts (and under the new deal, local governments cannot favour local bidders) and a future city council decides it wants to move back to a public system, as municipalities are doing all over the world, these corporations will be able to sue for huge compensation. Private water operators charge far higher rates than public operators and cut corners when it comes to source protection. Privatization of water services violates the essential principle that Canada's water is a public trust.

The same "investor-state" clause contained in the Canada-EU deal poses the third threat to Canada's water. The rules essentially say that if a government introduces new environmental, health or safety rules that were not in place when the foreign corporation made its investment, it has the right to compensation, which a domestic corporation does not have. For instance, an American energy company is suing Canada for $250 million in damages using a similar NAFTA rule because Quebec decided to protect its water by placing a moratorium on fracking. Moreover, transnational corporations are now claiming ownership of the actual water they require in their operations. Another American company successfully sued Ottawa for $130 million for the "water rights"; it left behind when it abandoned its pulp and paper operations in Newfoundland, leaving workers without jobs or pensions. The new deal with Europe will give large European corporations similar rights, further eroding the ability of governments to protect our fragile watersheds and ecosystems.

The Harper government has gutted every regulation and law we had in place to protect our freshwater supplies. Now this deregulation is locked in as corporations from Europe as well as the U.S. can soon claim to have invested in an environment without water protection rules and sue any future government that tries to undo the damage.

On a planet running out of clean accessible water, this is a really stupid way to treat our water.




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The same investment firms pushing to privatize public water and waste are behind these fracking industry expansions.  Exporting natural gas places fracking in the US and around Maryland on steroids as profits rise and that means more and more fresh water sources will disappear.  NO WORRIES.  VEOLA ENVIRONMENT will sell you water from overseas and if you cannot afford the price----they will use SMART METERS to ration what you can pay.

THAT JOHNS HOPKINS----LYING, CHEATING, AND STEALING THEIR WAY TO PROFITS AND THEN USING THEM FOR EVIL-----



Fracking Spreads Worldwide

By Nidaa Bakhsh and Brian Swint November 14, 2013


Bloomberg Financial

The hydraulic fracturing of shale in search of oil and gas has hardly started outside the U.S., but that’s changing. A record 400 shale wells may be drilled beyond U.S. borders in 2014, with most of the activity in China and Russia, according to energy consultants Wood Mackenzie. (In contrast, thousands of shale wells will be drilled in the U.S. next year.) The number of rigs used onshore in Europe and the Asia-Pacific region has increased 10 percent over the past year, data compiled by oil services company Baker Hughes (BHI) show. Most of those rigs are meant for shale. “It’s likely there will be a revolution,” says Maria van der Hoeven, executive director at the Paris-based International Energy Agency. “But not everywhere at the same time. And you just can’t copy the U.S. experience.”

Fracking in the U.K. will start next year, after the government lifted an 18-month moratorium imposed when a fracking company found it had accidentally caused earthquakes. Two utilities—Centrica (CNA:LN) of Britain and GDF Suez (GSZ:FP) of France—have bought stakes in British drilling licenses to help bankroll the drillers and win a cut of any profit.



The shale boom has moved the U.S. closer to energy independence, added jobs, helped revive manufacturing, and lowered gas bills. Yet the conditions that fostered the U.S.’s success don’t exist elsewhere. In some countries, landowners don’t own the oil and gas in the ground: The state retains all mineral rights. Or a country may levy much heavier taxes on oil and gas profits.

Story: U.S. Shale-Oil Boom May Not Last as Fracking Wells Lack Staying Power Once they start drilling and fracking, though, countries such as China, Argentina, and Russia could experience new oil and gas booms. China has the largest shale gas reserves, estimated to be the equivalent of 212 billion barrels of oil. In shale oil, Russia tops the list with about 75 billion barrels, the U.S. Energy Information Administration says. Australia, Poland, and Algeria all have big reserves.

Fracking activity outside the U.S. is likely to be good for the big oil players. Royal Dutch Shell (RDS/A) teamed up with China National Petroleum Corp. this year to explore in Sichuan, the province that accounts for 40 percent of China’s shale reserves. Hess (HES) is exploring with CNPC in the western Xinjiang region. YPF (YPF), the Argentine oil company, has joined with Chevron (CVX) to tap deposits in Argentina’s vast Vaca Muerta formation. Says Edward Morse, head of commodities research at Citigroup (C): “Within three to five years, there should be exponential growth in drilling as there was in the U.S.”


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As I stated with health care and the deliberate building of a perfect storm for antibiotic resistance and world health epidemics we see the same characters------Wall Street, Ivy League universities like Hopkins, and their neo-liberal and neo-con pols working to break our public health and environmental protections to profit from selling what will become a scarce resource.  Not to mention how large populations unable to obtain fresh water are easily managed when made desperate.

This is what Maryland Assembly and O'Malley/Brown and in Baltimore, Baltimore City Council and Maryland Rawlings-Blake are working toward.  They are neo-liberals and neo-cons who do not care about anything but maximizing corporate profits.


SIMPLY REVERSE ALL OF THIS BY VOTING THESE POLS OUT OF OFFICE AND REBUILD RULE OF LAW AND PUBLIC JUSTICE------AND REBUILD A DOMESTIC ECONOMY WITH SMALL AND REGIONAL BUSINESS WHILE KEEPING GLOBAL CORPORATIONS AT BAY IN MARYLAND.

Contaminated freshwater systems caused by ‘fracking’

Friday, April 4, 2014 13:52

Fracking fluids from oil and gas extraction is contaminating our freshwater systems. http://www.blissful-wisdom.com/contaminated-freshwater-systems-caused-by-fracking.html

A local resident recently wrote about the monetary significance of hydrocarbon extraction and exportation.  What many advocates of the oil-dependence industry seem to ignore completely is the short-sighted and toxic process with which ‘unconventional oil and gas sources’ are being extracted. This process is known as ‘induced hydraulic fracturing’, or ‘fracking’ (for short).

There is growing peer-reviewed scientific evidence of the harmful effects of shale gas development.  ‘Pro-fracking’ opinions focus on the big bucks and ignore the detrimental effects on our limited, freshwater systems.


There are a million well sites in North America which have used fracking.  A horizontal well in a shale formation can use between 7.5 million to 19 million litres of water.  That water used for extraction in gas shale ‘plays’ becomes toxic by the addition of: water‐based fracturing fluids mixed with friction‐reducing additives; biocides to prevent microorganism growth and to reduce biofouling of the fractures; oxygen scavengers and other stabilizers to prevent corrosion of metal pipes; and acids that are used to remove drilling mud.   80 % of this fracking fluid comes back to the surface and 20 % stays in the shale excavation ‘play’. This fracking fluid is highly toxic and contaminates local well-water, rivers, and underground water systems. 

This is the part which outweighs the financial benefits of present ‘fracking’ and non-conventional oil extraction methods. Our North American water reserves are limited.  Toxifying our limited water resources is insanity to say the least.  No amount of remuneration can justify contaminating underground water beds and surface-water courses for coming generations.

As of 2012, 2.5 million hydraulic fracturing jobs have been performed on oil and gas wells worldwide!

Do an internet search on the topic of ‘fracking’ and why it is so controversial. Be wary of industry-backed politicians who would smooth over the environmental collateral damage left from ‘fracking’ practices.

  Water well testing must take place both prior to and after seismic testing operations
If a well-owner does not test and show healthy conditions were present prior to nearby  ‘fracking’, then there is no possibility of claiming damages when contamination does eventually occur.

For the last hundred years, water rights belong to the owner of the land.  Tough luck for  those landowners and city-dwellers downstream, since liability favors industry not local taxpayers.  High cancer rates and damaging side-effects to human and animal life occur where tailing ponds and fracking fluid has escaped into underground and above-ground waterways. 

How can we not seriously demand alternatives to oil/gas addiction and its collateral damage?  There is money to be made and jobs to be had, but it requires focusing on developing those alternatives.  Industry is not going to encourage that shift.  Politicians serve industry and corporate interests, not the long-term health of the nation.  And once again…fresh, drinkable water is becoming threatened by ‘fracking’ practices.


0 Comments

July 18th, 2014

7/18/2014

0 Comments

 
from subprime mortgage fraud to municipal bond fraudFRO
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

Eric Blair
Activist Post

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.

ShadowStats.com
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.

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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 novationteam@cifg.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.)

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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!


Mission
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.







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July 17th, 2014

7/17/2014

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THESE ARE SOME OF THE THINGS TO WATCH FOR AND THINK ABOUT THESE NEXT MONTHS AS THE BOND MARKET PREPARES TO COLLAPSE.  I WANT PEOPLE TO KNOW THAT AS WITH THE SUBPRIME MORTGAGE LOAN COLLAPSE YOUR POLS NOT ONLY KNOW IT IS GOING TO HAPPEN----THEY ARE CREATING THE CONDITIONS FOR THE CRASH.  THAT IS BECAUSE THEY WORK FOR GLOBAL CORPORATIONS AND PROFIT.  GET RID OF THEM!



Keep in mind the entire financial system of frauds is based on tricking people, or allowing others to trick people into taking on more debt than they can handle knowing the end result will be a collapse in market that leaves people/government unable to pay the debt. With the subprime mortgage fraud the banks targeted low-income homeowners not only to gain control of real estate in urban areas but to target the Federal Housing Authority and its taxpayer payments of fees and loans.  This coming municipal/sovereign debt fraud collapse targets again government coffers and taxpayers as corrupt neo-liberal politicians load the states and cities with debt knowing this crash in 2015 is a sure thing.  Public officials take an oath to serve and protect the Constitution and citizens and none of this meets this oath.  They are aiding and abetting a crime by knowingly placing the public in harms way.  Remember, we can build Baltimore schools by simply ending the billion in fraud and corruption each year so there is plenty of taxpayer money for these infrastructure projects.  It is the leverage needed to implode the state and city economy.

AGAIN, WE CAN REVERSE THIS----WE SIMPLY NEED TO ELECT POLS THAT REBUILD RULE OF LAW AND OVERSIGHT AND ACCOUNTABILITY.  EASY PEASY.


I want to make sure people understand that all of this was known years ago---below you see in 2011 financial analysts were advising to prepare for the collapse.  During that time think how many credit bond and leveraging deals have been made in Maryland and Baltimore---including the big $1 billion deal to rebuild public schools.  I was shouting and writing to show the public knew this was malfeasance so we are under no obligation when the crash comes to hand everything to investment firms as they plan.  We must have Rule of Law to provide that protection.  This is why these elections are critical these next few election cycles and it is why Maryland was willing to allow systemic election violations for Governor to make sure the right person was in place to protect the fraud when this collapse comes.


Keep in mind the FED controls when this crash occurs to the extend of ending QE and allowing the manufactured  inflation be replaced by real inflation numbers . This will create the environment for mass exodus from the bond market and she has no way to stop this as it has maxed and is now unable to be contained.  She may delay it, but it will come and it appears likely 2015 will be the longest she can delay.  Inflation which is now thought to be 5% or so will jump to some of the highest levels in US history and it is all because of FED policy and Congress and Obama passing laws that made municipal bond markets artificially attractive.  They sold our bond market to the world just as they sold toxic subprime mortgage loans to the world.  They earned trillions and the American people lost everything as will happen this time around.


This article refers to the last time the FED considered ending QE in 2011.... as we know Bernanke decided to extend the death sentence and allow Yellen to handle the collapsing economy.
 

SHE WILL HAVE NO CHOICE AS THE FED IS MAXED IN DEBT AND INFLATION IS NOT CONTAINABLE. IT'S ONE BIG PONZI SCHEME.

O'Malley and the Maryland Assembly sold citizens out statewide and Rawlings-Blake and Baltimore City Hall sold citizens out locally as they did during the subprime mortgage loan fraud.

The Coming Bond Market Crash: The Three Moves Every Investor Must Make
  • By Martin Hutchinson, Global Investing Specialist, Money Morning  ·   July 1, 2011 



Since last November, the U.S. Federal Reserve has been buying U.S. Treasury bonds at a rate of about $75 billion a month. That's part of Fed Chairman Ben S. Bernanke's "QE2" program, under which the central bank was to buy $600 billion of the government bonds.

But QE2 ended yesterday (Thursday), meaning the Fed will no longer be a big buyer of Treasury bonds.

So starting today (Friday), the U.S. Treasury needs to sell twice as many Treasury bonds to end investors as it had been.

But the problem is, who's going to buy them?

Not China, which is diversifying its trillions in assets to get as far away from the U.S. dollar as fast as it can.

Not Japan, which is trying to rebound from its March 11 earthquake, tsunami and nuclear disaster - and is focusing all its spending on reconstruction.

And - as we've seen -neither is the Bernanke-led Fed.

I'm telling you right now: We are headed for an epic bond market crash. If you don't know about it, or don't care, you could get clobbered.


But if you do know, and are willing to take steps now, you can easily protect yourself - and even turn a nice profit in the process.

Let me explain ...

A Timetable for the Coming Crash I'm an old bond-market hand myself - my experience dates back to my days at the British merchant bank Hill Samuel in the 1970s - so I see all the signs of what's to come.

Having the two biggest external customers of U.S. debt largely out of the market is a huge problem. Unfortunately, those aren't the only challenges the market faces. The challenges just get bigger from there - which is why I'm predicting a bond market crash.

Latest Comment^ It is 2013, QE3 is out so maybe his timing is off but with all the printed mon…

Steadily rising inflation is one of the challenges. Inflation is a huge threat to the bond markets, and is almost certain to create a whipping turbulence that will ultimately infect the stocks markets, too.

Many pundits will tell you that if investor demand for bonds declines, and investor fear of inflation increases, bond-market yields could increase in an orderly fashion.

But I can tell you that the bond markets don't work like that. Price declines affect existing bonds as well as new ones, so the value of every investor's bond holdings declines. And with many of those investors heavily leveraged - especially at the major international banks - the sight of year-end bonuses disappearing down the Swanee River as bonds are "marked to market" will cause a panic. That's especially true when end-of-quarter or end-of-year reporting periods loom.

That's why we can expect a bond market crash at some point. If you ask me to make a prediction, I'd say that September or December were the most likely months for such a crash.

A Boxed-In Bernanke One sad - even scary - fact about what I'm predicting is that Fed Chairman Bernanke won't be able to do much about it ... though he'll certain try.

Consumer price inflation is now running at 3.6% year-on-year while producer price inflation is running at 7.2%. In that kind of environment, a 10-year Treasury bond yielding 3% is no longer economically attractive. Since monetary conditions worldwide remain very loose, inflation in the U.S. and worldwide will trend up, not down.

The bottom line: At some point, the "value proposition" offered to Treasury bond investors will become impossibly unattractive. When that happens, expect a rush to the exits.

If Bernanke attempts "QE3" - a third round of "quantitative easing" - he will have a problem. If other investors head for the exits, Bernanke may find that the U.S. central bank is as jammed up as the European Central Bank (ECB) currently is with Greek debt: Both will end up as the suckers that are taking all the rubbish off of everyone else's books.

There's a limit to how much Treasury paper even Bernanke thinks he can buy. And if everyone else is selling, that "limit" won't be high enough to save the bond market.


With Bernanke buying at a rapid rate, the inflationary forces will be even stronger,
so every Bureau of Labor Statistics report on monthly price indices will be marked by a massive swoon in the Treasury bond market.

Eventually, there has to be a new head of the Fed - a Paul A. Volcker 2.0 who is truly committed to conquering inflation. Alas, it won't be Volcker himself since, at 84, he is probably too old.

But it might be John B. Taylor, who invented the "Taylor Rule" for Fed policy. The Taylor Rule is actually a pretty soggy guide on running a monetary system. But it has been flashing bright red signals about the current Fed's monetary policy since 2008.

However, since a Fed chairman who is actually serious about fighting inflation would be a huge burden for current U.S. President Barack Obama to bear - and could badly hamper his chances for re-election, any such appointment is unlikely before November 2012.

How to Profit From the Bond Market Crash


Given that reality, it's likely that Bernanke will attack any bond market crash that occurs ahead of the presidential election just by printing more money; there won't be any serious attempt to rectify the fundamental problem, meaning inflation will continue to accelerate.

For you as an investor, this insight leads to two conclusions that you can put to work to your advantage. The scenario I've outlined for you will be:

Very good for gold and other hard assets. Challenging for Treasury bonds; prices will remain weak no matter how vigorously Bernanke attempts to support them.

So what should you do with this knowledge? I have three recommendations.

First and foremost, if Bernanke were not around, I would expect gold prices to fall following a bond market crash. But since he's still at the helm at the Fed, I expect him to do "QE3" in the event of a crash. And that means gold - not Treasury bonds - would become an investor "safe haven."

You can expect gold prices to zoom up, peaking at a much higher level around the time Bernanke is finally replaced. Silver will also follow this trend. So make sure you have substantial holdings of either physical gold and silver or the exchange-traded funds (ETFs) SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV).

Second, if you want to profit more directly from the collapse in Treasury bond prices, you could buy a "put" option on Treasury bond futures (TLT) on the Chicago Board Options Exchange (CBOE). The futures were recently trading around 94, and the January 2013 80 put (CBOE: TLT1319M80-E) was priced around $4.50, which seems an attractive combination of low price and high leverage.

Finally, if you don't already own a house, you should buy one - and do so with a fixed-rate mortgage. A U.S. Treasury bond market crash will send mortgage rates through the roof, so today's rates of about 4.8% will represent very cheap money, indeed. Even if house prices decline by 10%, a 2% rise in mortgage rates would increase the monthly payment (even accounting for a 10% smaller mortgage), by a net 11.8% (the payment on a $100,000 mortgage at 4.8% is $524.67; that on a $90,000 mortgage at 6.8% is $586.73).

Needless to say, the same benefits apply to rental properties financed by fixed-rate mortgages: With lower home ownership and rising inflation, rents are tending to rise significantly.

There's a storm coming in the Treasury bond market. But by recognizing its approach, we can turn the bond market crash to our advantage.


_________________________________________________

HMMMMMM.....reduce reserve funds and raise public debt.....all to augment the billions of dollars lost to the Maryland economy to fraud each year.

The debt takes the form of state leverage for projects and services----they have even leveraged the public pension funds all with no indication that 2015 will bring a major recession/depression.  DIDN'T SEE THAT COMING YOUR NEO-LIBERALS AND NEO-CONS WILL SAY!


All that leverage supposedly balanced the state budget and O'Malley pretended to be saving public sector jobs and pensions all while knowing this economic crash will lead to huge layoffs and end public sector pensions.
  Labor union leaders know this dynamic and still go with the neo-liberals doing it!
  As we all know each year since this 2010 article the public debt and leverage has increased.  Again, Republicans in other states are doing the same thing so do not listen to Maryland Republicans playing this card---they would do the same.

Maryland Governor’s Budget Cuts Reserve Payments, Boosts Debt

by Patrick Temple-West JAN 20, 2010 8:44pm ET Bond Buyer


WASHINGTON — Maryland Gov. Martin O’Malley yesterday released a proposal for the state’s fiscal 2011 budget that would reduce reserve fund contributions and increase public debt by 7.1% over fiscal 2010.




Below you see what is only the tip of the iceberg with tax credits that commit a level of tax forgiveness for decades that starves our government coffers.  O'Malley cut higher education aid and public transportation funding to pay for just a few of these corporate subsidies all in the name of jobs.  Well, when the bond market crash comes and the jobs are gone because of the recession global corporations will still be receiving tax breaks as they do business/make profits overseas. 

WHO CARES ABOUT LEVERAGE AND STATE DEBT WHEN THE IDEA IS TO MAXIMIZE PROFITS FOR GLOBAL CORPORATIONS.

We'll just cut more services, programs, sell public assets, and let global corporations handle the business of government that now has no revenue.

I'm not going to format since one can just look down very quickly to see all of the development is done with tax credits. They all are supposed to create jobs and help low-income people all of which will be killed by the coming economic crash from the credit leverage in these very policies.  Attracting global corporations to Maryland is the answer to jobs and a strong economy say neo-liberals-----only it does the opposite.  Most of these tax breaks will go to large corporations.

$2 million in tax credits for creating 10 poverty jobs......hmmmmmm.

Maryland Department of Business & Economic Development

economic development and the creation of jobs. MVF targets emerging technology-based businesses including biotechnology, information technology, telecommunications, software development and advanced materials.• Challenge Investment Program – $650,000 to ten start-up firms.• Enterprise Investment Fund – $2.2 million – three new firms and follow-on funding to five companies.Federal IncentivesCommunity Development Block Grant Program – Economic DevelopmentThis program assists local governments in implementing commercial and industrial economic development projects. Approved program funds are disbursed to eligible local jurisdictions as conditional grants and used for public improvements for business start-up or expansion or business loans. Projects must create jobs with the majority targeted to individuals from low to moderate income or eliminate blight conditions that impede commercial and industrial development. Fund uses include acquiring fixed assets, infrastructure and feasibility studies. • CDBG-ED funds of $2.2 million supported seven closed projects to create or retain 185 full-time jobs. Three projects worth $1.3 million were approved, representing 129 new or retained jobs.Maryland Economic Adjustment FundMEAF assists small businesses with upgrading manufacturing operations, developing commercial applications for technology, or entering new economic markets. Eligible businesses include manufacturers, wholesalers, service companies and skilled trades. Funds can be used for working capital, machinery and equipment, building renovations, real estate acquisition and site improvements. •Four Maryland Economic Adjustment Fund projects totaling $703,000 were approved and five transactions totaling $726,500 were closed.Tax Credit ProgramsOne Maryland Tax Credit Program Businesses can qualify for up to $5.5 million in income tax credits under the program when they invest in an economic development project in a “qualified distressed county.” Qualified Distressed Counties currently include: Baltimore City, Allegany, Dorchester, Garrett, Caroline, Somerset and Worcester. The business must create at least 25 new full-time positions at the project within 24 months of the date the project is placed in service. The business must be engaged in an eligible activity and incur eligible project or start-up costs. • FY2009 – 3 final certificates of eligibility issued for businesses that created 219 new jobs.Job Creation Tax CreditEncourages businesses to relocate to or expand in a Maryland Priority Funding Area by providing income tax credits based on new jobs created. Subject to various restrictions and conditions including location, wage levels and number of jobs created the credit may be for 2.5% up to $1,000 per job or 5% of annual wage up to $1,500 per job. • FY2009 – 7 final certificates of eligibility issued for businesses that created 307 new jobs.Enterprise Zone ProgramBusinesses located in a maryland enterprise Zone may receive income and real property tax credits in return for creating jobs. Local governments apply to the Department to designate Enterprise Zones. The ten-year real property tax credit reduces taxes on property improvements for ten years. The income tax credit for creating new jobs is$1,000 per new worker; for hiring economically disadvantage employees, up to $6,000 per new employee (over three years).• As of June 2009, there were 29 Enterprise Zones and two focus areas. • FY2010– 753 businesses will receive property tax credits totaling $26.3 million.– State share to reimburse localities will be $13.1 million, assuming the State’s full obligation is met.– Credits are based on real property investments totaling $1.945 billion.AGENCY MISSION & ACTIVITIES (contintued)

_____________________________________________

Here you see for whom neo-liberals and neo-cons in Maryland work---as they say we do not need to bring money home to pay taxes and  build infrastructure---we have plenty of business overseas thanks to O'Malley's 8 years of sending all of Maryland's revenue to building global structures for development.  We are exporting education and health care businesses none of which grows jobs in Maryland.

This is why neo-liberals are not concerned about the coming economic crash----it will not hurt these global corporations and it will provide excuses to hand more public operations/assets to these global corporations
.  Dulaney and neo-liberals are trying as hard as they can to repatriate global tax requirements in schemes to build infrastructure.  Remember, if they paid taxes we would have the money for infrastructure.  Domestic businesses pay taxes so the answer is GET RID OF GLOBAL CORPORATE CONTROL OF YOUR ECONOMY!  Dulaney is a Clinton investment banker who knows banks owe tens of trillions of dollars in fraud but does not seem to want to offer that solution.  Buying Treasury bonds when the bond market is preparing to collapse?  REALLY MR DULANEY?

Raise your hand if you know the answer is to get rid of global corporations from the Maryland economy rather than pretending to need to beg them for their taxes!!!!!  EVERYONE.  Raise your hand if you understand that tax breaks in exchange for bond purchases just when the bond market is ready to collapse will simply allow corporations to enter a bond market at the bottom for tremendous profits just as happened in 2008 with the stock market crash.  THAT'S WHAT THESE POLICIES ARE ALL ABOUT!


Everyone knows as well that the main avenue for recovering those tens of trillions of dollars in corporate fraud is HIGHER CORPORATE TAXES but as this article shows neo-liberals and neo-cons only intend to lower corporate taxes....you know, its all about job creation.


Md. Companies Have Billions in Assets Overseas Business Top News — 28 March 2014 By Fola Akinnibi
Capital News Service

6 WASHINGTON – The president’s budget, released in early March, called for the creation of a national fund to finance repair of the nation’s crumbling roads, bridges and other infrastructure — an idea also proposed by a freshman Maryland congressman.

Rep. John Delaney, D-Potomac, wants to fund infrastructure repair by bringing home billions of dollars in foreign earnings from U.S.-based corporations.  The congressman said he has been long concerned about decaying infrastructure.

Delaney’s Partnership to Build America Act would create a new way to pay for these repairs. Corporations would provide the money by buying bonds in The American Infrastructure Fund.


In exchange, they would be allowed to bring back money locked up overseas without paying the full 35 percent corporate tax rate.

Delaney’s bill could come as a relief to corporations with large foreign operations that have deferred paying U.S. corporate taxes on their overseas earnings indefinitely. For example, 10 Maryland-based multinational corporations, including Columbia-based MICROS Systems Inc. and Baltimore-based Under Armour Inc., are holding a combined $3.5 billion overseas, according to filings with the Securities and Exchange Commission.

While it would mean a major tax savings, none of the 10 publicly held Maryland companies contacted would comment on the proposed legislation.


One expert said there’s little incentive to bring the funds back with so much business opportunity overseas. Instead, it makes sense for U.S. companies to let the overseas funds stay put and postpone a U.S. tax bill.

“It’s better to defer,” said Michael Faulkender, a finance professor at the University of Maryland’s Smith School of Business.

Further, the Delaney proposal is out of sync with many plans to overhaul the U.S. tax code, he said. “Every proposal on the table is for the corporate tax rate to go down, not up.”

Rich Badmington, W.R. Grace & Co.’s vice president of global communications, said most of the Columbia chemical company’s revenue comes from international operations. The company plans to continue investing in those operations.

“We are able to do that without bringing cash back to the U.S. because we are continuing to invest,” Badmington said. “(Research and development) is a function that requires continuing investment and we have quite a lot of that outside the U.S.”

President Barack Obama’s latest budget plan called for the creation of a government-owned entity to finance infrastructure projects. Delaney said the president’s support for something similar to his bill was “great,” and said it shows how much momentum the bill has.

“We’re very optimistic about it, we have strong bipartisan support,” Delaney said.

The bill has 57 co-sponsors in the House and 12 in the Senate, including Sens. Lindsey Graham, R-S.C., and Michael Bennet, D-Colo., head of the Senate Finance Committee’s Taxation and IRS Oversight subcommittee. Hearings have not been scheduled for the bill.


Under the tax code, corporations can avoid paying taxes on foreign earnings as long as the money is being permanently reinvested overseas. When the corporations decide to bring these funds back home, a process called “repatriation,” the money then is subject to U.S. taxes.

Originally, the tax exemption was meant to help U.S. corporations compete overseas, said Mitchell Kane, a tax professor at New York University’s School of Law. Companies claimed paying taxes in two countries would put them at a disadvantage and the government responded with the exemption, he said.

The plan was to have the companies pay foreign taxes, which in many cases are lower than the U.S. tax rate, and then pay U.S. taxes when the money was repatriated. After this process, the company would receive a credit for any foreign taxes paid, Kane said.

Allowing such an exemption has created an incentive for companies to keep their money overseas and defer the U.S. corporate tax, said Jane Gravelle, an economist with the Congressional Research Service. But parking money offshore isn’t a long-term solution for companies, she added.

“They may think they can hold their breath forever and borrow money,” Gravelle said. “How long are they going to be able to do that? Shareholders eventually want dividends.”


This exemption could result in $265.7 billion in lost revenue for the federal government through 2017, according to a 2013 report by Congress’ Joint Committee on Taxation.

For now, however, companies aren’t likely to repatriate without a major tax discount.

W.R. Grace has more than $1.1 billion held overseas and would have to pay $149.7 million in taxes if it was repatriated, according to SEC filings. That money will remain overseas, except in instances where repatriation would result in minimal or no U.S. taxes, the company said in its most recent SEC filing.

MICROS Systems, a Maryland-based computer hardware and software producer,
has about 61 percent of its cash and cash equivalents, $385.8 million, held internationally with no plans to repatriate, according to the company’s most recent filings with the SEC.

Maryland-based apparel company Under Armour has $95.2 million, or 27 percent, of its cash and cash equivalents held overseas with no plans to bring it back.

Spokespersons from MICROS and Under Armour could not be reached for comment.

Other companies have begun to repatriate their foreign funds, which Kane said could help cover corporate expenses. McCormick & Company, a spice, herbs and flavoring manufacturer, repatriated $70 million in 2012, according to the company’s most recent SEC filings. Even still, most of the company’s cash is held in foreign subsidiaries, the filings said.

A spokesperson for McCormick and Co. could not be reached for comment.

Some of the largest U.S. corporations make about half of their money internationally, Delaney said. The bill is just a way to get some of it back.

“It creates a way for some of that money to come back, which is good for our economy,” Delaney said. “And it creates this large-scale infrastructure fund, which is good for our country.”


Instead of government funding, the American Infrastructure Fund would raise cash through a $50 billion bond offering.
Companies would buy the bonds at a 1 percent fixed interest rate and a 50-year term, in exchange for a chance to repatriate a certain portion of overseas earnings tax-free for every dollar spent on bonds.

A bond to repatriation ratio would be determined by an auction and could result in companies paying an effective 12 percent tax rate, Delaney said. Money raised in the bond sale could then be leveraged and loaned to state and local governments for projects.

The auction process will benefit both the infrastructure fund and the corporations, which will be able to find a price that is right for them, Delaney said.

“We’ve talked to them and they’re very supportive of it,” he said.

The American Business Conference, Associated Equipment Distributors and Terex Corporation are among those supporting the bill.

Tech giants and pharmaceutical corporations have lobbied for a repatriation holiday since the 2004 American Jobs Creation Act allowed them to repatriate at a discounted rate. Because of the intellectually-based capital that these companies thrive on, it is sometimes easier for them to keep assets overseas.

For example, Apple has $124.4 billion held overseas, according to the company’s most recent SEC filing.

The 2004 bill reduced repatriation taxes to 5.25 percent if corporations promised to invest the money at home. The one-year holiday is widely regarded as a failure because it spurred an increase in repatriation, but not an increase in jobs or investments, according to a report by the Congressional Research Service.

“The argument was that it would be a stimulus” to the U.S. economy, Gravelle said. “Most people who studied this found out it was being used to repurchase shares.”

Share repurchases are a common way to boost stock prices.

Corporations used the money to pay stockholders dividends and pay off debts, which doesn’t make for a good stimulus, she continued.  Instead, the holiday created a “moral hazard” and companies have parked money overseas, waiting for the next holiday, Gravelle said.

Delaney’s bill has short-term benefits but doesn’t address the larger problems with the tax code, Faulkender said. Corporations will want to move more and more operations overseas if they can find discounts on U.S. taxes, he added.

“If you signal that firms are going to realize a lower tax rate, even after repatriation, on their foreign operations than on their domestic operations, you’re going to incentivize even more offshoring,” he said.

“I don’t think that’s good for the U.S. economy.”


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July 16th, 2014

7/16/2014

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THE NEXT FEW DAYS I WANT TO TALK ABOUT THE COMING ECONOMIC COLLAPSE IN 2015.  I WILL START BY REMINDING PEOPLE WANT CAUSED THE 2008 CRASH AND SHOW HOW THE TWO ARE TIED TO TRANSFERRING ALL WEALTH TO THE TOP AND USING THE EXCUSE OF GOVERNMENT DEBT TO DISMANTLE OUR DEMOCRATIC STRUCTURES.  NEO-LIBERALS AND NEO-CONS WILL TAKE IT ALL!


I want to encourage people to pay attention to a subject that bores everyone but is the source of the looting of US government coffers and individual's pockets.  The Federal Reserve and Wall Street frauds. We need to know all of this CAN be reversed.  The economy is closer to collapse yet again by the same people playing the same games and all of it illegal.  So, let's review what caused the crash of 2008 to see how it relates to what will bring the economy down in 2015.
Remember, these economic policies started when Reagan/Clinton took the Republican and Democratic Parties to neo-liberalism.  The goal back then was to dismantle all of the public structures built for strong 1st world country to create the wealth inequity that goes with empire-building. The same was happening in Europe and the UK.  This is why Maryland has no public justice or oversight and accountability today----all of this boom and bust is no accident----it is all about wealth redistribution to the top.

Clinton deregulated and broke the Glass Steagall to set the stage for this explosive growth of US corporations with no overight and Bush simply allowed for an 'anything goes' environment.  Reagan/Clinton/Bush working with Alan Greenspan and Wall Street.
  Greenspan/Geithner allowed open fraud and corruption in the financial markets and Bush made sure the US Justice Department and financial agencies aided and abetted these crime.  The goal was transferring real estate from citizens to the banks through foreclosure so to control development especially in urban centers like Baltimore as well as sending trillions of dollars in government funding for these subprime loans to the banks.  

 
'We didn't see that coming' said Greenspan. Meanwhile, neo-liberals at the state and local levels were allowing the subprime mortgage fraud go wild. This same thing happened in Europe as subprime mortgage loans filled their economy as well.  It was Obama's job to make sure the money stayed with those committing the fraud.


The constant portrayal of this Visigoth looting as creating homeownership for low-income people -----knowing a collapse would send people into foreclosure-----shows the social pathology driving Wall Street and neo-liberals and neo-cons.

IT IS NOT LEGAL FOR ANYONE TO ALLOW OPEN FRAUD AND CORRUPTION AND GREENSPAN WAS ALLOWED TO JUST FADE AWAY FOR ONE OF THE GREATEST CRIMES IN HISTORY.

This was no maestro---he simply used people's faith in government and Rule of Law and sold people in investing in a system he knew would blow up making most people losers.  Think what is happening today---media is telling you the market is strong, politicians are throwing pensions into it and we all know it is getting ready to crash....and in 2015 we will hear O'Malley and Rawlings Blake who are loading the state with debt just as they oversaw the subprime mortgage fraud----'I didn't see that coming'!
WELL, WE SEE IT COMING AND IT IS INFUSED WITH PUBLIC MALFEASANCE AND FRAUD.

Alan Greenspan: Public Enemy Number One


By Stephen Lendman Global Research, October 27, 2008

With so many good choices, it’s hard just picking one. But given the gravity of today’s financial crisis, one name stands out above others. The “maestro,” as Bob Woodward called him in his book by that title. The  “Temple of Boom” chairman, according to a New York Times book review. Standing “bestride the Fed like a colossus.” Now defrocked as the “maestro” of misery. Alan Greenspan. From August 11, 1987 to January 31, 2006, as head of the private banking cartel euphemistically called the Federal Reserve. That Ron Paul explains isn’t Federal and has no reserves.

It represents bankers who own it. Big and powerful ones. Not the state or public interest. It prints money. Controls its supply and price. Loans it out for profit and charges the government interest it wouldn’t have to pay if Treasury instead of Federal Reserve notes were issued. People, as a result, pay more in taxes for debt service. The nation is more crisis-prone. Over time they increase in severity. The current one the most serious since the Great Depression. Potentially the greatest ever. The result of Greenspan’s 18 year irresponsible legacy.

He championed deregulation and presided over an earlier version of today’s crisis. The Reagan-era savings and loan fraud. It bankrupted 2200 banks. Cost taxpayers around $200 billion and for many people their savings in S & Ls they thought safe.

In the 1990s, he engineered the largest ever stock market bubble and bust in history through incompetence, subservience to Wall Street, and dereliction of duty. In January 2000, weeks short of the market peak, he claimed that “the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever….Lofty stock prices have reduced the cost of capital. The result has been a veritable explosion of spending on high-tech equipment….And I see nothing to suggest that these opportunities will peter out anytime soon….Indeed many argue that the pace of innovation will continue to quicken….to exploit the still largely untapped potential for e-commerce, especially the business-to-business arena.”

A week later, the Nasdaq peaked at 5048. Lost 78% of its value by October 2002. The S&P 500 49% from its March 2000 high to its October 2002 bottom. Individual investors were left high and dry as a result. For Mr. Greenspan, it was back to engineering multiple bubbles with 1% interest rates and a tsunami of easy money.

He advocated less regulation, not more. Voluntary oversight. The idea that markets work best so let them. Government intervention as the problem, not the solution. In the mid-1990s, he told a congressional committee:

“Risks in financial markets, including derivative markets, are being regulated by private parties. There is nothing involved in federal regulation per se which makes it superior to market regulation.”

On October 23 before the House Government Oversight and Reform committee, he refused to accept blame for the current crisis, but softened his tone and admitted a “flaw” in his ideology. Confessed his faith in deregulation was shaken. Said he was in a “state of shocked disbelief.” Unclear on what went wrong. Not sure “how significant or permanent it is,” and added:

– “We are in the midst of a once-in-a century credit tsunami (requiring) unprecedented measures;”

– “This crisis has turned out to be much broader than anything I could have imagined;”

– “fears of insolvency are now paramount;”

– significant layoffs and unemployment are ahead;

– a “marked retrenchment of consumer spending” as well;

– containing the crisis is conditional on stabilizing home prices;

– at best, it’s “still many months in the future;”

What went wrong with policies that “worked so effectively for nearly four decades,” he asked? Securitizing home mortgages. “Excess demand” for them, and failure to properly price them he answered. Unmentioned was unbridled greed. The greatest ever fraud. No oversight, and a predictable crisis only surprising in its magnitude and how it grew to unmanageable severity.

Greenspan is now softening on regulation but barely enough to matter. Too little, too late by any standard, and only to restore stability after which chastened investors “will be exceptionally cautious.” In the end, in his view, “This crisis will pass, and America will reemerge with a far sounder financial system.” Until another Fed chairman repeats his mistakes. Creates a crisis too big to contain. Destroys unfettered capitalism as we know it. Changes the world irrevocably as a consequence. Unless this time is the big one and does it sooner.

In March 1999, Greenspan was optimistic at the end of a robust decade (that James Petras calls “the golden age of pillage”) with no worries about new millennium meltdowns. He addressed the Futures Industry Association and said it would be “a major mistake” to increase rules on how banks assess risks when they use derivatives. He added: “By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.” By a compounded 20% rate throughout the decade. Around 30% alone by banks in 1998. And, according to Greenspan, “The reason that (derivatives) growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risk….the value added of derivatives themselves derives from their ability to enhance the process of wealth creation (and) one counterparty’s market loss is the (other’s) gain.”

Overall, they’ve increased the standard of living of people globally, he claimed. In fact, they contributed to global crises in the 1990s. Hot money in, and meltdowns when it exited. The problem is derivatives work well in bull markets, but are disastrous when they’re down. Going up they do nothing for ordinary people, but during downturns receding tides sink all boats and all in them and aren’t the zero sum game Greenspan suggested.

Worst of all are so-called credit default swaps (CDSs). The most widely traded credit derivative. In the tens of trillions of dollars. A $43 trillion market, according to PIMCO’s Bill Gross. The International Swaps and Derivatives Association (ISDA) estimates it at $54.6 trillion. Down from $62 trillion at yearend 2007. Others place it higher, but key is what they are and how they’re used. They resemble insurance (on risky mortgages), but, in fact, are for little more than casino-type gambling. Unregulated with no transparency in the shadow banking system that dwarfs the traditional one in size and risk.

Gross describes it this way. It “craftily dodges the reserve requirements of traditional institutions and promotes a chain letter, pyramid scheme of leverage, based in many cases on no reserve cushion whatsoever.” CDSs are at the center of shadow banking, and Gross and others warn about possible financial Armageddon if things begin collapsing.

A “Cheerleader for Imprudence”

That, according to James Grant, editor of Grant’s Interest Rate Observer. Greenspan’s “biggest mistake was inciting people to do imprudent things.” He called him “marble-mouthed” for his “Greenspeak” and not simply admitting he “was as blind as those (he) pretended to lead. This sense of security that people invested in the idea of perfect control by an all-knowing brain at the top, that idea’s been shattered.”

In July, Grant was outspoken in a Wall Street Journal op-ed titled “Why No Outrage?” He quoted Mary Elizabeth Lease from the Populist era haranguing farmers to “raise less corn and more hell.” He asked why today’s financial victims aren’t protesting Fed policy “of showering dollars on the (monied) people who would seem to (least) need them.” Where are the “uncounted improvident?” Have they “not suffered (enough) at the hands of what used to be called The Interests? Have the stewards of other people’s money not made a hash of high finance? Where is the people’s wrath?” In the wake of the “greatest (ever) failure of ratings and risk management.”

Greenspan’s Fed cut interest rates to 1%. “House prices levitated as mortgage underwriting standards collapsed.” He claimed earlier that property appreciation was a sign of prosperity and a strong economy and “while home prices do on occasion decline, large declines are rare.” Most homeowners experience “a modest but persistent rise in home values that is perceived to be largely permanent.”

Especially, according to Grant, at a time that “credit markets went into speculative orbit, and an idea took hold. Risk….was yesterday’s problem.” It led to “one of the wildest chapters in the history of lending and borrowing.” As a consequence, an $8 trillion home valuation wealth bubble and an unprecedented oversupply of unsold properties. Now in even more  oversupply as owners default. Are foreclosed on or simply walk away from unaffordable underwater assets. They sit empty with no one to buy them except for those able in distressed sales.

The whole episode criminal and avoidable had the Fed used its authority under the 1994 Home Ownership and Equity Protection Act. It authorized the central bank to monitor abuses and intervene, if necessary, to prevent abusive lender practices. It failed to do it.

The result was predictable. People and the economy in crisis. Greenspan orchestrated it. His successor Bernanke did nothing to curb it. Wall Street was on a roll until it crashed. Huey Long once compared JD Rockefeller to “the fat guy who ruins a good barbecue by taking too much.” Wall Street thrives on it. Fed largesse enables it. The problem is their indigestion affects everyone. A stomachache spreading round the world. How bad it’ll get and where it stops nobody knows. Blame it on Greenspan. Our “former clairvoyant,” according to Grant.
___________________________________________


Below you hear the same talk as we did in 2006-2007 as the subprime mortgage market began to implode and again it was the FED policy and the Obama Administration/Congress that fueled this crash just as it was Greenspan and Bush with the subprime mortgage loans.

Where last fraud centered on redistributing real estate to the few----this fraud centers on using credit bond and municipal debt to create the excuse to privatize all that is public and end public sector pensions and benefits.  The 2015 crash will be so deep with no help from the Federal government still holding $17 trillion in debt from the last massive corporate fraud that the US economy will look like Greece and Spain.  It will place the US in the same double-disaster as Europe---subprime loan fraud/sovereign debt fraud.

As the article below states-----hold on to your hats as the market sees a mass exodus from the bond market!!!


Where this article makes it sound that Yellen is being a 'dove'....she has no options....the FED under Bernanke did what the FED under Greenspan did......fed the bond market bubble until there was no return.  Remember, Wall Street wants people back in the stock market and blowing up the once safest place to invest, the bond market, will do that.  Soon, everyone will be fleeing the bond market as it collapses right back to the stock market.  They are making trapped rats of our pension system and giving us no opportunity for a stable economy.


THAT'S A NEO-LIBERAL/NEO-CON FOR YOU!!!!!  GET RID OF THEM!!!


Fed Officials Trying to Warn Bond Markets
July 15th, 2014
in contributors

by EconMatters, EconMatters.com

The Purpose of Complacency Talk

The Fed officials have been coming out in speeches the last couple of weeks with rhetoric about 'complacency' and other such code words for chasing risk ahead of what the Federal Reserve knows is going to be an abrupt change in monetary policy over the next six months.


Follow up:

The Fed is concerned because they know they want an orderly transition in markets and not causing major dislocations in markets by massive selloffs. However, the getting is so good with interest free money that participants are going to push this edge they have in markets right up until the last possible exit minute.

So despite the fact that QE ends in October with no more bond buying by the Fed, the 10-Year is still sitting at 2.50% with participants making money hand over fist with the borrow at 15-25 basis points and investing in yield instruments with massive leverage trades that has been so popular and irresistible by investors looking for 'free money arbitrage' opportunities.



An Orderly Unwind

The problem that the Fed has rightly identified is that they are not going to get an orderly exit at this pace, the unwind is going to be massive, jarring, and definitely not 'orderly'! The Bond markets, take the 10-year yield could literally have a 25 or 35 basis point move over a 24 hour period that would wreak a lot of havoc on fund flows, asset classes and financial markets.

This turmoil in the bond market could really be disastrous because the Fed participants realize the bond market isn't being priced currently where the Fed is moving to in terms of monetary policy. The Fed should be alarmed because the unwind is setting up for a possible 100 basis point move in two months' time frame type of fund dislocation and reallocation of capital, and that is going to be problematic for markets!



But the Fed only has themselves to blame for this predicament as in this case you cannot have your cake and eat it too! Janet Yellen cannot be so dovish at Fed news conferences given her reputation as a dove among doves, and get any respect from market participants; the trade is going to be all-in and one-sided without the slightest regard for the risks associated with being so aggressive.

In short, Janet Yellen has encouraged the one thing that Fed governors should always avoid being so 'transparent' that market participants go full boar on a trade, one-sided, highly levered, unhedged, and nothing could possibly happen with this dovish a Fed Chairperson at the helm trade! In a nutshell they have become too 'complacent' or they have taken her dovishness for granted.

Pigs at the Bond Trough

The pattern has been quite clear in Bond Markets wait until after the 200k plus Employment Report blows the 10-Year up to 2.70%, and come in and buy bonds like there is not tomorrow with huge leverage, until they have to get out of the way of the next CPI, GDP or Employment Report - as this process has repeated itself over the last four months of financial markets. The Levered Yield Trade has been the trade of the year so far in 2014 - the strategy of investing in anything with yield from over-valued utilities, pricey bonds and even stodgy low growth Big Caps with some semblance of a dividend yield!

Janet Yellen cannot have her Dovish Cake, and eat it too in the form of an "Orderly Unwind"!

So the Fed has to realize that sending out the mignons of the Fed isn't going to counteract Janet Yellen's dovishness. If they want markets to start unwinding trades ahead of policy adjustments that are coming and not wait until the last possible minute, then Janet Yellen herself is going to have to send a shot across the monetary bow so to speak!

She is going to have to come out with a hawkish tone to garner some healthy respect for normalization of fed policy by markets. She is dovish we get that, but the Fed is about to change monetary policy, and much sooner than is currently priced into many asset classes, and it is going to take some considerable time if participants started repositioning today to unwind many of these massive positions in markets, any sense or orderliness necessitates a little at a time versus all at once!

Janet Yellen has got to start talking hawkish to get this process started otherwise her worst fear is going to materialize in spades as market participants are all going to wait until the last minute trying to make that last dollar on the yield trade, and cause huge market turbulence when they all try to get out at once!



The Data Indicate 1st QTR 2015 Rate Hike at the Latest!

The Employment numbers, the inflation numbers, and the risky valuations in financial markets all point to the Fed needing to start raising rates sometime in the first quarter of next year. This is much sooner than Janet Yellen's Dovish talk has markets pricing in with their forecast for late in 2015 for the first rate hike.

Market participants are far too levered up, all on the same side, and well behind the monetary normalization curve of when the first rate hike is actually going to occur. This is a recipe for disaster, and that seminal light bulb moment in financial markets when everybody realizes, that moment in Margin Call where the analyst drops the ear-buds out saying internally holy shit, that they need to liquidate everything right now. In other words, the entire market all hits the sell button at the same time!


_______________
Wall Street and the FED thinks the steps towards stabilizing the economy have been a success and they are ready for the coming crash.  What's not to like---the American people lose all their wealth as the richest wealth soars.

Below you see an article that shows the progression of the plan.  Goldman Sachs was key to the financial frauds in the US but were key in bringing down the European social society.  They targeted especially Greece and Spain with fraudulent financial instruments loading these nations with huge sovereign debt having the goal of imploding the economies forcing the dismantling of social society.  Why this is important to Americans today? It is these same tactics are now coming to the US.  We experienced the subprime mortgage fraud in the US as they did in Europe but Europe was brought down harder because a second fraud----sovereign/municipal debt fraud ----completely emptied their government coffers.  This is why Europe is in deeper distress than the US.  Well, the time is now for the sovereign debt fraud in the US and it looks like levered municipal bond debt, mortgaged tax debt, and state and local money tied to development that cannot be afforded. 

THIS MASSIVE DEBT BUILDUP ON THE BACKS OF OUR GOVERNMENT IS WHAT CREATED IN EUROPE THE DEEPEST OF RECESSIONS.

This happened in Europe between 2001 and 2007 and now it is being done here in the US between 2008 and 2015.  The subprime mortgage fraud was about taking the American people's wealth-----this coming municipal bond leverage fraud is about taking the government wealth as happened in Europe.

Goldman Sachs and DeutscheBank both created fraudulent financial instruments that allowed government officials to hide their national debt so more debt could be taken.  None of this is legal and Goldman Sachs knew it was breaking the law.  So Greece and Spain were made to look like the government budgets were balanced when they were ever deeper in debt.  Making these governments look like they were AAA mirrored making subprime mortgage loans look AAA.  These government officials in Greece and Spain took more and more credit and distributed money to friends and off-shored it until these economies imploded from debt.  Europe's TROIKA then came in to make the Greek and Spanish people pay for the fraud just as is happening in the US with the subprime mortgage and other financial frauds.
  You see Europe's Draghi and his connection to Goldman Sachs overseeing the crisis just as Tim Geithner did in the US.

THE KEY WORDS HERE ARE HIDING SOVEREIGN DEBT TO LOAD MORE DEBT TO MAKE THE IMPLOSION SO DEEP AS TO FORCE THE DISMANTLING OF GOVERNMENT ASSETS.

That is what happened in Europe.  Subprime mortgage fraud and sovereign debt fraud.  Today, the US economy is ready to implode from sovereign/municipal bond debt.
  Maryland is ground zero for this.  O'Malley and Maryland Assembly and Baltimore City Hall has loaded the state and city with so much leverage in credit bonds and tax deals that when the crash comes in 2015 the public will be stuck with debt so large----just as Greece and Spain---that the recession will be deep and the debt too large, forcing the privatization of all that is public. 

THIS IS A PLAN---NOT SIMPLY GREED OR BAD POLICY.
  'MARYLAND HAS A 'AAA' RATING FROM MOODY'S YOU SAY'-----you mean the same Moody's that gave subprime mortgage loans the same AAA? 

Maryland's economy is one great big shell game.
  This is not a Democrat vs Republican issue because Republicans are doing the same in their states.  It is a complete breakdown of Rule of Law and a rush to take what you can.  The article below is long but please glance through to see how Goldman Sachs worked to implode Greece's economy and think about what is happening in Maryland!
Another long article but please glance through.

EU Ignores Falsification of Greek Public Finance Data
Posted on 18 December 2011 by
admin by Guest Author ECB Watch

This is a companion to another article to be published Draghi Nomination Based on Deception.  Here, we address the broader issue of the falsification of Greece’s public finance data.   We will look into Eurostat audits (Walter Radermacher), the ECB’s willful hindrance against the release of records (Jean Claude Trichet), Goldman Sachs’ communication (Gerald Corrigan), and the actions of the European parliament (Sharon Bowles), the Commission (Olli Rehn) and the European Securities and Markets Authority (Verena Ross). Click on cartoon for larger image.


Summary

Eurostat ran a series of audits of Greece’s public finances from 2009 to 2010, including for the swap transactions contracted with Goldman Sachs in 2001. These were used to misrepresent, by a few % relative to GDP, the extent of debt and deficits. Eurostat says it only became aware of it in early 2010: this calls for an explanation because news of the contentious transactions broke in 2003. According to the final audit, in 2010, the window dressing scheme initiated in 2001 was significantly restructured in August 2005. Soon after, Goldman Sachs sold its position for cash to the National Bank of Greece. This 2005 modification of the 2001 contract resulted in a 81% increase in the amount of concealed debt, in the accounts of 2006, relative to the initial amount. According to the same audit, Greece willfully misled Eurostat in 2008, when the contracts were still in effect (in fact, they will be until 2037). The national accounts of Greece were regularized by Eurostat in November 2010.

Spokesman for the bank Gerald Corrigan testified before the British parliament in February 2010. He personally vouched that the letter of the law was obeyed in the 2001 deal, suggesting that it was EU’s fault for allowing a loophole in its regulations. To minimize the perception of wrongdoing he reminded the audience that similar practices were age-old and common in the industry. Yet he stonewalled the questions of whether specific countries, Portugal and the UK, respectively, were clients that fell under this category. His leaving out the 2005 restructuring in his testimonial is an odd oversight.

He [Gerald Corrigan] personally vouched that the letter of the law was obeyed in the 2001 deal, suggesting that it was EU’s fault for allowing a loophole in its regulations. In April 2010, former prime minister of Belgium Guy Verhofstadt spearheaded a hearing, Greece : the moment of truth. It was held by the Economic and Monetary Affairs Committee of the EU Parliament under Sharon Bowles’ chairmanship. There appears to be a disconnect between the objective and what Sharon Bowles delivered, as we argue further down in relation to ESMA, but another indication of it is that the deposition of the spokesman for Goldman Sachs, Gerald Corrigan, bears no relation to the stated topic (the word Greece is not to be found).  This is perhaps an indication of a disconnect between the objective and what Sharon Bowles delivered. We will argue it further below in relation to ESMA. In November 2010, Jean Claude Trichet obstructed the release, requested by Bloomberg, of ECB documents detailing the swap transactions. In May 2011, he went as far as vetoing a legal claim, made by Bloomberg, to reopen these archives. Was his justification, preventing acute market risks, satisfactory?

In August 2011, the Commissioner for Economic and Monetary Affairs, Olli Rehn, to appease the concern of an MEP about the possible connection of Mario Draghi to the falsification of Greek public finance data, misrepresented the evidence contained in a November 2010 Eurostat audit report as to this connection. Recall that Mario Draghi’s hearing in June, just before a vote by the European parliament on his nomination, was, and remains to this day, controversial due to discrepancies between his defense on this issue and verified facts.

The legislative branch, in the U.S., has gone to great length to learn from the mistakes of the financial crisis.  In addition it came with evidence based recommendations to pursue criminal investigations that were or have been carried out by federal agencies and the department of justice.  In fairness, this process has been stymied by powerful interest groups.  Even so, Europe’s response, in comparison, for the case studied here, which is a significant chapter of the Greek debt crisis, looks unfavorable. The hearing Greece : the hour of truth may well have been a pretense, as hinted at. We now argue it further. The Commission and the European parliament would have had the authority to commission ESMA to investigate the matter.  Neither Olli Rehn nor Sharon Bowles, it seems, has taken this step.  Had it been the case, ESMA would have had the authority, if the conclusion of the investigation called for it, to bring a legal case against any alleged perpetrator of fraud, or delegate that task to national authorities.  Instead, ESMA’s stated priorities, under the leadership of its new Executive Director, Verena Ross, are the single rule book, production and analysis of data, and supervising credit rating agencies…

Note : we now use the EU institutions’ convention that ECON stands for Economic and Monetary Affairs.

Eurostat audits

Eurostat is the statistical office the EU Commission, whose current Director General is Walter Radermacher. In Eurostat parlance, a methodological visit is an audit that is undertaken in cases where the Eurostat identifies substantial risks or potential problems with the quality of the data.   There were a series of methodological visits to Greece. They began in 2009 and continued through 2010. Three major reports were produced, one on 29 October 2009, the second on 8 January 2010 and the third in November 2010.  According to the last one, a series of failings in the institutional arrangements and practical compilation of Greek public finance data. We skimmed through the January report and read the November 2010 report.  Only the latter addresses the contentious Greek swaps transaction.  It concluded as follows: Taking into account the work carried out [i.e. corrections to misreported data], as described in this report, the latest debt and deficit data for Greece now gives, in Eurostat’s view, an essentially reliable picture, [including for] fiscal data for the years 2006-2009. It is, therefore, an important report as it represents Eurostat’s final opinion on the issue of the Greek swaps contracted with Goldman Sachs.

Greece patently misled it in 2008, claiming that it neither engaged in FOREX swaps, nor in off market swaps. Eurostat’s summary of its dealings with Greece as pertaining to these swaps would be hard to reconcile, prima facie, with the blithely reported claim that the transactions were legal.  First, Eurostat says that At the beginning of the year 2010, it became known that Greece had entered in 2001 into currency off-market swap agreements with Goldman Sachs, using an exchange rate different from the spot prevailing one. This is strange, however, because the scheme was reported in 2003 by Risk.net.  Perhaps not coincidentally, notes the article, Greece’s credit rating by one of the three major credit rating agencies was raised, that year, from A to A+.  Second, Eurostat says that Greece patently misled it in 2008, claiming that it neither engaged in FOREX swaps, nor in off market swaps. These are exactly the type of transactions agreed between Greece and Goldman Sachs in 2001 and, as we see next, were actively managed thereafter. Eurostat’s audit says that in August 2005 a significant restructuring of the swap contract took place. The maturity of the swap was extended from 2019 to 2037.   This, together with other modifications, resulted in an increase in the amount of undisclosed Greek debt data, for the portion that is imputable to the deal, from 2.830 bn euros in 2001 [1] to 5.125 bn euros in 2006. It’s a 81% increase. Eurostat adds that [a]lmost at the same time, GS sold its rights and obligations to the National Bank of Greece (NBG, a bank completely privatised in November 2004). As a side note, Mario Draghi was appointed head of Bank Italy in 2006, ending his employment at Goldman Sachs. The latter had begun in 2002, when Goldman Sachs was reportedly the lead manager of Greece’s debt underwriting. His denial of any connection to the deal in a hearing before the ECON Committee in June 2001 remains controversial to this day.

There is no question that the 81% increase in the debt hiding scheme, in 2006, is imputable to the August 2005 modification: the restructuring operations implemented in 2005 and 2008 were in fact the explicit recognition of an increase of the liability (principal amount of the loan) to be recorded as debt of Greece. To complete our coverage of the swap transactions, let us quote Eurostat: [t]he swap was marginally restructured again in late 2008 [and was] securitised in February 2009 via a Special Purpose Vehicle (Titlos) that paid EUR 5.5 billion to the NBG. There is no question that the 81% increase in the debt hiding scheme, in 2006, is imputable to the August 2005 modification : the restructuring operations implemented in 2005 and 2008 were in fact the explicit recognition of an increase of the liability (principal amount of the loan) to be recorded as debt of Greece. The corresponding amount, 5.125 bn euros, persisted until 2007. The 2008 modification pushed it to 5.4 bn euros, and 2009 saw a decrease to 5.281 bn euros. We think the decrease is the result of an amortization scheme kicking in after a grace period of two years mentioned in the report. In 2010, Eurostat assigned these amounts as additions to government debt for the years 2006—2009. Goldman Sachs’ communication

Goldman Sachs Managing Director Gerald Corrigan testified before the House of Commons on February 22, 2010. This came to our attention in an article by Finfacts Ireland, and the transcript is contained in the document Too important too fail, too important to ignore (March 2010).  In question 295, for short Q295, he is asked [H]ave banks like Goldman’s not accentuated sovereign risk in countries like Greece by arranging loans for securitisation against future revenue streams that do not appear on the books or currency swaps that have not been calculated at normal exchange rates? To which, Corrigan personally vouches that the transactions were legal : [It] is very clear to me, based on the investigation that I have done over the past few days, that those transactions were very much consistent and comparable with the standards of behaviour and measurement used by the European Community.  There was nothing inappropriate. They were in conformity with existing rules and procedures when they were entered into. To back it up, he cites a consultation with Eurostat: When those transactions were entered into personnel from Goldman Sachs consulted with the appropriate authorities at Eurostat, as did, as I understand it, the Government of Greece and, again, there was no indication whatsoever that those transactions were not in line with existing practices, policies and guidelines.

Goldman Sachs identified a flaw in EU rules, in 2001, and exploited it—opportunity.  He [Corrigan] has not explicitly answered the question i.e. whether it increased sovereign risk —harm— but, absent his denial, it was implicitly conceded. Finally, he shifts blame on the EU not having stringent enough rules:  I should also say that those guidelines and standards were modified in 2007 which suggests that perhaps they were more liberal than they should have been back in 2001. In other words, Goldman Sachs identified a flaw in EU rules, in 2001, and exploited it—opportunity.  He has not explicitly answered the question i.e. whether it increased sovereign risk —harm— but, absent his denial, it was implicitly conceded.  The rest of his answer is laced with the mitigating factors that these practices have been around for decades, if not centuries and not limited to Goldman Sachs and Greece—rationalization.   However, when asked to confirm whether a similar deal was contracted with Portugal (Q296) and Great Britain (Q297), he dodged and could not confirm, respectively, reiterating the above rationalization in each case. The white elephant in the room, in this hearing, is the August 2005 significant restructuring of the swap contract.”  That’s keeping in mind that Greece is alleged by Eurostat to have misled it in 2008 about the existence of such transactions.  Although Goldman Sachs was no longer the counter party in 2008, it suggests that this modification has gone under the radar from August 2005 until Eurostat looked into the matter in 2010.

Let’s review some traits in Corrigan’s answers. He hinted at what we labeled an opportunity and had recourse to the same rationalization multiple times. These are two of the three factors that fall under the definition of the Fraud Triangle.   This is merely superficial but, unfortunately, there is a significant legal precedent attesting of unethical business practices at this company:   Goldman Sachs paid half a billion dollars to settle SEC charges that it misled investors in a subprime mortgage product (ABACUS) just as the U.S. housing market was starting to collapse.  The third factor is a motive.  The transaction generated hundreds of millions of dollars for the firm according to a press release by Bloomberg, EU seeks Greek swaps disclosure after ministry probe.  The ratio of the upper estimate of the fees (200 millions euros) to the amount of Greek debt masked under the 2001 deal (2.830 bn euros) is 7.1%. The key deal maker, Antigone Loudiadis, made a substantial fortune from the deal in just one year, reported the Wall Street Journal in 2010, and enjoyed a career boost thereafter.  Incidentally, she made controversial headlines again, reported Bloomberg in May 2011, as CEO of Rothesay Life, as regards to death derivatives.

He [Corrigan] hinted at what we labeled an opportunity and had recourse to the same rationalization multiple times.  These are two of the three factors that fall under the definition of the Fraud Triangle. Zero Hedge reported that, on the same day as Corrigan’s testimonial, the bank issued a communique. It essentially summarizes his arguments, with a few more figures but, again, makes no mention of the 2005 restructuring. Finally, Gerald Corrigan’s written statement does not address any of the above. Obstruction by Jean Claude Trichet

First, Bloomberg filed a request with the ECB in November 2010 to have access to ECB internal documents detailing the contentious transactions.  It was denied.   Second, Bloomberg contested the decision at the EU’s General Court in Luxembourg in December 2010.   Third, the ECB asked the General Court to dismiss the lawsuit, in May 2011, just one month before Mario Draghi’s nomination, apparently using a veto prerogative.  That’s one month before the nomination of the next ECB President whose possible role in the falsification of Greek debt as Goldman Sachs VP from 2002 to 2005 was raised by Simon Johnson as early as February 2010. Fourth, Bloomberg reacted in June 2011 with these words : The European Central Bank allowed itself to be deceived by a default in the making and now refuses to share with the taxpaying citizens it represents the details of the deception.  Secret and opaque financing got Europe into a mess that can only be resolved by the transparency of full disclosure.


The European parliament

As a member of the UK’s Liberal Democratic Party, Sharon Bowles is also affiliated with the Alliance of Liberals and Democrats of Europe, in short ALDE.   In March 2010, the former prime minister of Belgium and group leader of ALDE, Guy Verhofstadt, made a proposal to to promptly convene a public hearing of all those implicated in the falsification of Greek public accounts. He followed up with a declaration on 14 April 2010, reported in a press release known as Greece: the moment of truth, for Sharon Bowles to ask Director General of Eurostat to explain how accounts could have been legally modified and what measures were taken in the aftermath to prevent such actions. This was supposed to be discussed in a hearing, the same day, titled The fiscal crisis in the European Union – lessons from Greece.  According to the ECON Committee’s final draft programme, its participants were Sharon Bowles (moderator), Olli Rehn, Walter Radermacher, Gerald Corrigan, and a representative from a financial derivatives organization (ISDA), Richard Metcalfe.  We did not find the transcript of the hearing at EU Parliament’s portal, which is unfortunate, but we did find the deposition of Gerald Corrigan.  It contains insights on two subjects and nothing more.  The first is perspective on government debt management, such as the benefits of issuing debt through primary dealers.  The second is facilitating derivatives market surveillance, which recounts the initiatives of the financial industry policy group chaired by Corrigan, the Counterparty Risk Managment Policy Group (CRMPG).  This hardly addresses Guy Verhofstadt’s injunction, quoted in the press release Greece: the moment of truth : The chairman of Goldman Sachs in the US in particular should justify his bank’s speculation against Greek sovereign debt and the motivation of the investment bank which did not seem to be entirely based on economic considerations.

“widespread misreporting of deficit and debt data by the Greek authorities during in November 2004, [...] and on five occasions between 2005 and 2009.“  Eurostat audit January 2010 The topic reemerged in a parliamentary debate about Quality of statistical data in the Union and enhanced auditing powers by the Commission, on 15 June 2010. To frame it, we suppose, Sharon Bowles posted on 4 June 2010 the question of “whether any [Member States] have submitted falsifications or false data or statistics either intentionally or by neglect?”  The January 2010 audit had already answered that question for Greece: widespread misreporting of deficit and debt data by the Greek authorities during in November 2004, [...] and on five occasions between 2005 and 2009.” “In short, there is circumstantial evidence that the chair of the ECON Committee, Sharon Bowles, around 2010, was lagging behind Eurostat’s methodological visits to Greece. To conclude this section, former PM of Belgium Guy Verhofstadt’s high hopes, Greece : the moment of truth, in April 2010, may have fallen flat; that is, the EU parliament failed to deliver an account of who did what?


The Commission

In ECON Commissioner Olli Rehn‘s words spoken during the aforementioned 15 June 2010 debate, the closest match to Sharon Bowles’ question was As is well known, the Commission has undertaken in-depth work on Greek statistics over several years. The amended regulation should, in future, better mitigate the risk of fraud or manipulation of statistics, or of any other kind of irregularity.  Yesterday, there was a new development concerning Greece.  You will know that Moody’s decided to downgrade Greek bonds yesterday. On 21 July 2011, a parliamentary question was addressed to him, on the subject of Appointment of Mario Draghi as President of the European Central Bank.  This question was : Does the Commission have information on Mario Draghi’s involvement, whilst he was Goldman Sachs’ European vice-chair, in the dealings between the bank and the Greek Government over the concealment of accountancy fiddles? Olli Rehn’s answer, on 22 August 2011, was that transactions in derivatives between the Greek debt agency and Goldman Sachs dated back to 2001, implying that the President of the ECB had no connection to them. This is one of the two arguments presented by Mario Draghi before the ECON Committee in June, just before the vote on his nomination, that were found to be unsatisfactory.  Olli Rehn backs up his claim by citing the November 2010 Eurostat audit.  This is perplexing because the audit reveals that the terms of the contract between Goldman Sachs and the Greek Ministry of Finance were modified in August 2005.   This modification resulted in an 81% increase in the amount of debt concealed through this type of scheme.  Presumably, Mario Draghi still worked at Goldman Sachs at the time, since his term of office at the Central Bank of Italy started in January 2006.

In short, in August 2011, the Commissioner for ECON either misled the MEP (Willy Meyer) having some concern about Mario Draghi’s past at Goldman Sachs, or had superficial knowledge of the Eurostat audit he cited as evidence in defense of Mario Draghi’s reputation.

Has justice run its normal course?

Let’s try to understand by looking at a comparable case, the United States, where the financial lobby is nonetheless powerful. The above mentioned settlement with the SEC in July 2011 marked the end of a civil lawsuit that had begun in April 2010.  On 30 April 2011, Reuters reported that federal prosecutors in New York had begun a criminal investigation into other transactions, upon referral by the SEC.  In parallel, the Senate Permanent Subcommittee on Investigations, for short PSI, was investigating the financial crisis. It’s outcome, a bipartisan report, known as the Levin-Coburn report, was released in April 2011.  According to the Wall Street Journal, it asked for bank regulators to examine mortgage-related securities to identify any possible legal violations and use Goldman Sachs as a case study in implementing conflict prohibitions. October 2011, the aforementioned federal investigation, in New York, reportedly materialized with $1bn lawsuit against the bank, using evidence of investment bank abuses from the Levin-Coburn Report: Timberwolf was cited in a scathing U.S. Senate panel report in April that faulted Goldman, Deutsche Bank AG and others for hawking debt they expected to perform poorly..

Is the system of government fundamentally different in Europe, in this respect?  Of course not.  The equivalent of the SEC, in the EU, is the European Securities Markets Authority, for short ESMA, formerly the CESR.   It has only recently been granted enforcement authority known as level 4 of its governing procedure. Yet, it can issue a recommendation to a national authority[to carry out legal action].  To do so, ESMA must first carry out an investigation.  According to the same provision (level 4), the European parliament (Sharon Bowles), or the Commission (Olli Rehn) can request ESMA to get it under way.

The falsification of Greek debt, based on what was said thus far, and the fact that Goldman Sachs did not disclose it (See February 2010 Bloomberg article),  presumably constitutes a fairly obvious breach of their fiduciary duty as a primary dealer—a privileged position in the market.  Is anyone aware of Sharon Bowles or Olli Rehn launching an investigation into this scheme?  Let’s try to find out.

But in view of what precedes, there is reason to suspect that authorities have turned a blind eye to the problem. [referring to the falsification of Greek debt] In October 2011, a new Executive Director of ESMA, Verena Ross, was nominated, with the ECON Committee’s approval.  She gave a keynote speech to that effect in October 2011, in which she laid out her vision of the future focus of the work [of ESMA]. A lot has to do with harmonizing rules and processes across member states [2].  None of it addresses the glaring priority of bringing to justice the suspected perpetrators of financial crime.  If Verena Ross’ speech is to be taken at its word, the future focus of ESMA has a negative connotation:  turn the page and pretend that financial crime never happened.  In fairness, there were reports of a possible probe into this bank’s activities by the UK’s FSA and Bafin in Germany in the first half of 2010, but nothing specific about the falsification of Greek debt that we are aware of.  There was, however, a specific reference to that effect, in the US, by Fed Chairman Bernanke in the same period.   We can’t be certain that these investigations have stalled, or were put to rest.  But in view of what precedes, there is reason to suspect that authorities have turned a blind eye to the problem. Some financial experts allege a broader cynical scheme undertaken by the bank, that is reminiscent of its practices in the subprime crisis.  Essentially, these are hedging and speculative bets using insider knowledge of Greek public finances.   Let’s briefly review the literature.  In February 2010, two authors, Marshal Auerback and L. Randall Wray alleged that From 2001 through November 2009 [...] not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece’s debt—making income on bets that Greece would default.  No doubt they also took positions as the financial conditions deteriorated—betting on default and driving up CDS spreads. Corroborating evidence and analysis can be found in the following articles, listed in in chronological order : What about Greece and Goldman Sachs (Diplomatic World, Spring 2010), Clearing the air: Goldman Sachs and Greece (Hellenesonline, January 2011) and Goldman bet against entire European nations —who were clients— the same way it bet against its subprime mortgage clients (Washington’s blog, July 2011).



Notes

[1] The masking scheme is the combination of two sets of swaps. In the first set, a currency swap neutralizes Greece’s currency risk resulting from preexisting foreign denominated debt:  In 2001 a series of off-market cross-currency swaps were effectively linked to underlying debt instruments issued on foreign markets. This would have been standard practice, except for this clause:  the contracts were not based on the prevailing spot market rates of exchange [such that] the Greek government debt was de facto [immediately] reduced by EUR 2.4 billion by the conversion process. The second contains off-market interest swaps that are equivalent to a promise by Greece to make a stream of payments to Goldman Sachs.  This second set was designed to offset the gain for Greece resulting from the first set, such that its impact on debt and deficit, we must assume, would be gradual and slow.

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January 10th, 2014

1/10/2014

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AS NEO-LIBERAL ECONOMISTS LIKE REICH AND KRUGMAN SHOUT OUT AGAINST THE WEALTH INEQUITY OF TODAY WITHOUT EVER ACKNOWLEDGING THAT IT ISN'T INEQUITY-----IT WAS A VISIGOTH LOOTING OF THE AMERICAN SOCIETY BY MASSIVE CORPORATE FRAUD------WE SAY, A GOVERNMENT THAT SUSPENDS RULE OF LAW SUSPENDS STATUTES OF LIMITATION!

I see in Baltimore all these middle-class homeowners that were able to keep their homes in hard times and I am shouting----financial analysts are warning to get rid of houses as this coming economic crash will bring a depression so you may be next!  Gentrification will go up the income scale!



I spoke last time about how Obama and neo-liberals played this entire crisis like a playbook written by Wall Street.  We saw how these main street bailouts were deliberately written so that only the affluent homeowners would access help and the FHA, a vital agency with a long service to families was targeted to be shut out.  Neo-liberals are working just as hard as republicans to end all War on Poverty and New Deal programs and fair housing goes!!!!  So, the middle-class  holding on to jobs and their homes now had better buckle-up because financial analysts are calling for people owning homes to get rid of them as the next, more powerful economic collapse comes soon......

THIS IS OBAMA'S LEGACY AND ALL OF MARYLAND'S DEMOCRATS ARE NEO-LIBERALS AND ALL EQUALLY RESPONSIBLE. 


SHAME AND DISGRACE FOR MARYLAND NEO-LIBERALS WATCHING SILENTLY AS THIS UNFOLDED.

What could we do, they say?  When 50 states attorney general shout out in 2005 that the mortgage industry is systemically criminal--------

YOU SHOUT OUT TO MARYLAND CITIZENS NOT TO GET INVOLVED IN THESE LOANS.  THEN, YOU SHOUT OUT OVER AND OVER THAT JUSTICE HAS NOT OCCURRED!

That is what a democrat would do!


Below you see the housing program that Obama and neo-liberals pretended was the bailout of main street and help in curbing foreclosures.  It was a ruse of course as they fumbled the roll-out long enough for most people that could have gotten help went under trying to get it!  Mind you....some people were helped.  The percentage I see over and again is 10% of foreclosures were saved.

 I sit and watch the same banks and mortgage corporations that created the massive subprime mortgage fraud now connected with HARP, earning more money from fees attached to yet another mortgage refinance.  From Quickens Loans to  Wells Fargo and Bank of America.....they are earning billions on HARP.

HARP Program Requirements In order to participate in HARP you need to meet the following requirements:

  • Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
  • You must be current on your mortgage, and cannot have made a payment more than 30 days late in the past year.
  • You must have negative home equity (you owe more on your mortgage than your home is worth), but your mortgage cannot exceed 125% of the value of your home.
  • Refinancing must help the affordability or stability of your mortgage.
  • You must have the ability to continue making payments
  • Mortgage owned or guaranteed by the FHA, VA, or USDA are not eligible for HARP.
  • Your property must be 1-4 units.
  • Your property must also be your primary residence. 2nd homes are not eligible for refinancing under HARP.
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As you see, HARP deliberately excludes FHA and the other government mortgages from this 'stimulus' and these loans are for those needing the help the most.  See why tens of millions of people went into foreclosure?  They were the ones most affected by the massive frauds and simple Rule of Law would have kept those homes with those families.

The reason Obama and neo-liberals in Congress chose Freddie and Fannie for this stimulus is that these loans were private mortgages and they wanted bank mortgages to be stabilized with the higher end prices and they are trying to end FHA and low-income homeownership. Neo-liberals work with republicans to end all War on Poverty and New Deal programs!

Obama and neo-liberals called these homeowners 'responsible' because they were able to weather years of recession.


Remember, they wanted everyone out of property ownership and into rentals because Pottersville landlords can keep people poor with high rents and control where they live!  Neo-liberals are socially engineering this return to Medieval society with the serfs outside the castle gates....into what is suburbia.  What about equal housing and access?  THE BILL OF RIGHTS GOES WITH TPP YOU KNOW!  In Maryland, the ACLU is actually helping with this even as it is unconstitutional.


The FHA was a successful program for decades causing very little cost for taxpayers.  So, the only reason to get rid of it is that it took away profit for banks wanting the mortgage business. 





Fannie Mae and Freddie Mac purchase mortgages from financial institutions, providing a way for those financial institutions to have more cash to continue to lend money for additional mortgages. Congress enacted a statutory mission for these GSEs to bring "liquidity, stability and affordability to the U.S. housing and mortgage markets."


FHA mortgages were created by the United States government to give borrowers with low credit scores and down payments who could not qualify for a Freddie Mac mortgage the opportunity to buy a home.


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When Obama chose to suspend Rule of Law and allow all this mortgage fraud go without justice it was the old, women, and children who were hit the hardest.  Seniors taking home equity loans thinking they would be able to address them over time did not know massive corporate fraud was being allowed to go unabated.  These were the 'irresponsible' homeowners Obama and neo-liberals allowed to be taken under.

Now, Wall Street wanted all real estate back into the hands of the banks so if you watch TV you are familiar with the REVERSE MORTGAGE DEALS THAT HAND HOMES TO THE BANKS AFTER SENIORS DIE.  This is handy for families with seniors struggling to survive, but it was yet another device to move homeownership away from average people as these families who would normally have inherited these homes now had no inheritance.  Meanwhile, the estate taxes are being eliminated slowly but surely for the wealthy.


THE FIRST THING A DEMOCRATIC SOCIETY DOES IS PROTECT THE OLD AND YOUNG....NOT NEO-LIBERALS!

THIS WAS MASSIVE FRAUD AND THE ECONOMY WAS DAMAGED BY THIS FRAUD.  ALL OF THE AID BY CONGRESS SHOULD HAVE COME TO MAIN STREET.  RULE OF LAW DEMANDS IT SO------WHEN GOVERNMENT SUSPENDS RULE OF LAW THEY SUSPEND STATUTES OF LIMITATIONS!

Senior Citizens Worst Hit By Foreclosures in America
Filed Under Repo Homes

It is the senior citizens that have been worst hit by the foreclosure crisis in America. About 28% of those boiling in the foreclosure cauldron are aged above 50. A recent study by AARP has questioned the validity of the hitherto popular surmise that the seniors have escaped the crisis because of they had built up sufficient equity on their houses.

The research done by AARP show that 684,000 persons aged 50 are in foreclosure during the last six months of 2007. Those who were above 50 comprised of 28% of all those who were in the foreclosure soup. Of these 684,000 senior borrowers, 50,000 were in foreclosures and lost their houses.

At the close of 2007 the rate among senior citizens of America who were in foreclosure was 0.24%. This was half of those who were aged less than 50 and have less equity than their elders.

Susan Reinhard of Public Policy Institute said that the seniors of America are dependent on their houses both as a shelter and an asset when retirement knocks. She said, “Losing a home jeopardizes long-term financial security with limited time to recover.”

The report also highlights the effects of the sub-prime mortgage crisis on those who were aged 50 and above. This group was 17 times more likely to be caught by foreclosure than those with prime mortgages. The states with high repo home rates among the seniors are California, Nevada, Colorado and Michigan.

Older Americans had made use of the equity on their houses for making repairs to their property and financing the higher education of their children. But seniors with fixed income are facing problems making mortgage payments. The sluggish economy with inflation is making the going even tougher for those with advancing age. Fall in the real estate market has affected all age groups.

Daniel Alpert of Westwood Capital that both young and old who had siphoned off the equity on their houses are now rocking on the same boat of foreclosure Many seniors like the juniors contracted teaser loans thanks to the aggressive peddling of the same by agents. The mortgage forms were also difficult to comprehend. The call of the hour is simplified mortgages. So it was a question of sales talk and trust that were misused for disastrous consequences for all – the lender, the borrower and the community together with the hapless individual whether young or old.




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Below you see an article from Fall 2011 talking about how very few on main street were able to access HARP from the time it rolled out with the bank bailout.  This was supposedly main street's bailout but between the long-term unemployment creating the environment of missed payments and the banks constantly 'losing paperwork' that basically caused most people applying to fail to be considered. 

ALL OF THIS WAS DELIBERATE AS THIS ENTIRE MORTGAGE FRAUD WAS ABOUT GETTING MAIN STREET OUT OF THEIR HOMES SO THE GOAL WAS TO GET AS MANY HOMEOWNERS AS POSSIBLE INTO FORECLOSURE. 

Here in Maryland advocates for people heading to foreclosure shouted even into 2012 that  the money intended to augment people heading to foreclosure from the $25 billion mortgage fraud settlement was not getting to people.  So, just think, people who we all know were struggling from the economic downturn were left from 2009-2012 mostly unable to get the help they needed with this HARP policy. 

Flash forward to 2013 and we see Obama shouting that those funds set aside for HARP be used.  By now, most people of average means have lost their homes to foreclosure.


The Home Affordable Refinance Program (HARP): What you need to know

By Hayley Tsukayama, Published: October 24, 2011

On Monday, the federal government announced that it would revise the Home Affordable Refinance Program (HARP), implementing changes that The Washington Post’s Zachary A. Goldfarb reported would “allow many more struggling borrowers to refinance their mortgages at today’s ultra-low rates, reducing monthly payments for some homeowners and potentially providing a modest boost to the economy.”

The HARP program, which was rolled out in 2009, is designed to help. Those who are “underwater” on their homes and owe more than the homes are worth. So far, The Post reported, it has reached less than one-tenth of the 5 million borrowers it was designed to help. Here’s a quick breakdown of what you need to know about the changes.

Video

Oct. 24 (Bloomberg) -- Edward J. DeMarco, acting director of the Federal Housing Finance Agency, talks about the regulator's mortgage relief program that will expand to allow homeowners to refinance regardless of how much their houses have dropped in value.

Gallery

  Flashback: Last year, some mortgage lenders and government officials took action after discovering that many mortgage documents were mishandled.


What was announced? The enhancements will allow some homeowners who are not currently eligible to refinance to do so under HARP. The changes cut fees for borrowers who want to refinance into short-term mortgages and some other borrowers. They also eliminate a cap that prevented “underwater” borrowers who owe more than 125 percent of what their property is worth from accessing the program.

Am I eligible? To be eligible, you must have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac, sold to those agencies on or before May 31, 2009. The current loan-to-value ratio on the mortgage must be greater than 80 percent. Having a mortgage that was previously refinanced under the program disqualifies you from the program. Borrowers cannot not have missed any mortgage payments in the past six months and cannot have had more than one missed payment in the past 12 months.

How do I take advantage of HARP? According to the Federal Housing Finance Agency, the first step borrowers should take is to see whether their mortgages are owned by Fannie Mae or Freddie Mac. If so, borrowers should contact lenders that offer HARP refinances.

When do the changes go into effect? The FHFA is expected to publish final changes in November. According to a fact sheet on the program, the timing will vary by lender.



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I speak quite often about the targeted families in urban centers because of what is happening in Baltimore.  The black middle-class was hit hardest as their wealth was often tied to these urban areas hit with mortgage fraud and as we know the US Justice Department has failed to give any justice to people of color in these urban centers.  City Hall is not only allowing the subprime loan fraud go without justice......I have spoken about how City Hall is actually preying on these citizens with home seizures from faulty utility bills or small amounts of back taxes.

THIS IS NOT A DONE DEAL AS ALL OF THIS HAS YET TO SEE JUSTICE AND RULE OF LAW WILL HAVE LOW-INCOME HOUSING FOR VICTIMS OF FRAUD IN THE CITY CENTER!


The Great Eviction: Black America and the Toll of the Foreclosure Crisis From predatory loans to evictions at gunpoint, neighborhoods are hosting bitter conflicts between activists and market forces—By Laura Gottesdiener

| Thu Aug. 1, 2013 1:04 PM


We cautiously ascend the staircase, the pitch black of the boarded-up house pierced only by my companion's tiny circle of light. At the top of the landing, the flashlight beam dances in a corner as Quafin, who offered only her first name, points out the furnace. She is giddy; this house—unlike most of the other bank-owned buildings on the block—isn't completely uninhabitable.

It had been vacated, sealed, and winterized in June 2010, according to a notice on the wall posted by BAC Field Services Corporation, a division of Bank of America. It warned: "entry by unauthorized persons is strictly prohibited." But Bank of America has clearly forgotten about the house and its requirement to provide the "maintenance and security" that would ensure the property could soon be reoccupied. The basement door is ajar, the plumbing has been torn out of the walls, and the carpet is stained with water. The last family to live here bought the home for $175,000 in 2002; eight years later, the bank claimed an improbable $286,100 in past-due balances and repossessed it.

It's May 2012 and we're in Woodlawn, a largely African American neighborhood on the South Side of Chicago. The crew Quafin is a part of dubbed themselves the HIT Squad, short for Housing Identification and Target. Their goal is to map blighted, bank-owned homes with overdue property taxes and neighbors angry enough about the destruction of their neighborhood to consider supporting a plan to repossess on the repossessors.

"Anything I can do," one woman tells the group after being briefed on its plan to rehab bank-owned homes and move in families without houses. She points across the street to a sagging, boarded-up place adorned with a worn banner—"Grandma's House Child Care: Register Now!"—and a disconnected number. There are 20 banked-owned homes like it in a five-block radius. Records showed that at least five of them were years past due on their property taxes.

Where exterior walls once were, some houses sport charred holes from fires lit by people trying to stay warm. In 2011, two Chicago firefighters died trying to extinguish such a fire at a vacant foreclosed building. Now, houses across the South Side are pockmarked with red Xs, indicating places the fire department believes to be structurally unsound. In other states--Wisconsin, Minnesota, and New York, to name recent examples—foreclosed houses have taken to exploding after bank contractors forgot to turn off the gas.

Most of the occupied homes in the neighborhood we're visiting display small signs: "Don't shoot," they read in lettering superimposed on a child's face, "I want to grow up." On the bank-owned houses, such signs have been replaced by heavy-duty steel window guards. ("We work with all types of servicers, receivers, property management, and bank asset managers, enabling you to quickly and easily secure your building so you can move on," boasts Door and Window Guard Systems, a leading company in the burgeoning "building security industry.")

The dangerous houses are the ones left unsecured, littered with trash and empty Cobra vodka bottles. We approach one that reeks of rancid tuna fish and attempt to push open the basement door, held closed only by a flimsy wire. The next-door neighbor, returning home, asks: "Did you know they killed someone in that backyard just this morning?"

The Equivalent of the Population of Michigan Foreclosed
Since 2007, the foreclosure crisis has displaced at least 10 million people from more than four million homes across the country. Families have been evicted from colonials and bungalows, A-frames and two-family brownstones, trailers and ranches, apartment buildings and the prefabricated cookie-cutters that sprang up after World War II. The displaced are young and old, rich and poor, and of every race, ethnicity, and religion. They add up to approximately the entire population of Michigan.

However, African American neighborhoods were targeted more aggressively than others for the sort of predatory loans that led to mass evictions after the economic meltdown of 2007-2008. At the height of the rapacious lending boom, nearly 50% of all loans given to African American families were deemed "subprime." The New York Times described these contracts as "a financial time-bomb."

Over the last year and a half, I traveled through many of these neighborhoods, reporting on the grassroots movements of resistance to foreclosure and displacement that have been springing up in the wake of the explosion. These community efforts have proven creative, inspiring, and often effective—but in too many cities and towns, the landscape that forms the backdrop to such a movement of hope is one of almost overwhelming destruction. Lots filled with "Cheap Bank-Owned!" trailers line highways. Cities hire contractors dubbed "Blackwater Bailiffs" to keep pace with the dizzying eviction rate.

In recent years, the foreclosure crisis has been turning many African American communities into conflict zones, torn between a market hell-bent on commodifying life itself and communities organizing to protect their neighborhoods. The more I ventured into such areas, the more I came to realize that the clash of values going on isn't just theoretical or metaphorical.

"Internal displacement causes conflict," explained J.R. Fleming, the chairman of the Chicago Anti-Eviction Campaign. "And there's no other country in the world that would force so much internal displacement and pretend that it's something else."

Evictions at Gunpoint
It was three in the morning when at least a dozen police cruisers pulled up to the single-story, green-shuttered house in the African American Atlanta suburb where Christine Frazer and her family lived. The precise number of sheriffs and deputies who arrived is disputed; the local radio station reported 25, while Frazer recalled seeing between 40 and 50.

A locksmith drilled off the home's locks and dozens of officers burst into the house with flashlights and handguns.

"Who's in the house?" they shouted. Aside from Frazer, a widow with a vocal devotion to the Man Above, there were three other residents: her 85-year-old mother, her adult daughter, and her four-year-old grandson. Things began to happen fast. Animal control rounded up the pets. Officers told the women to get dressed. Could she take a shower? Frazer asked. Imagine there's a fire in your house, the officer replied.

"They came to my home like I was a drug dealer," she told reporters later. Over the next seven hours, the officers hauled out the entire contents of her home and cordoned off the street to prevent friends from helping her retrieve her things.

"I have no idea where some of my jewelry is, stuff I bought when I was 30 years old," said Frazer. "I am sixty-three. They just threw everything everywhere, helter-skelter on the front lawn in the dark."

The eviction-turned-raid sparked controversy across Atlanta when it occurred in the spring of 2012, in part because Frazer had a motion pending in federal court that should have stayed the eviction, and in part because she was an active participant of Occupy Homes Atlanta. But this type of militarized reaction is often the outcome when communities—especially those of color—organize to resist eviction.

When Nicole Shelton attempted to move back into her repossessed home in a picket-fence subdivision in North Carolina, the Raleigh police department sent in more than a dozen police officers and an eight-person SWAT team. Officers were equipped with M5 submachine guns. A helicopter roared overhead. In Boston, one organizer with the community group City Life/Vida Urbana remembers the police acting so aggressively at an eviction blockade in a Haitian neighborhood that the grandmother of the family had a heart attack right in the driveway.

And sometimes it doesn't require resistance at all. On the South Side of Chicago, explained Toussaint Losier, a community organizer completing his Ph.D. at the University of Chicago, "They bust in the door, and it's at the point of a gun that you get evicted."

Exiles in America
There have been widespread foreclosures—and some organized resistance—in predominately white communities, too. Kevin Kirkman, captain of the civil division of the Lee County sheriff's office, explained, "I get so many [eviction] papers in here, it's unbelievable."

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More than 75% of the residents in North Carolina's Lee County are whites. But Kirkman still sees the ripple effects of mass foreclosure here. "You're talking about a mudslide where a lot of things are affected. You're talking about taxes, about retail sales if people move, about food services, about gasoline. You see what I'm talking about? When you lose a family in the community? Some people leave the community. I have seen people leave the state of North Carolina."

He added, "I'm going be honest with you, my feeling is that I would not do these evictions."


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I wanted to end with this main stream shout out that the subprime mortgage loan fraud is recognized by all and the amount of these frauds are in the trillions of dollars and as of now we have gotten maybe a trillion in subprime loan settlement and most of that has been sent right back to banks as developers......WE ALL KNOW THIS!

Op-Ed Columnist The Mortgage Fraud Fraud

By JOE NOCERA Published: June 1, 2012 

I got an e-mail the other day from Richard Engle telling me that his son Charlie would be getting out of prison this month. I was happy to hear it.

Charlie’s ordeal isn’t over yet, of course. When he leaves prison on June 20, Charlie, 49, will move temporarily to a halfway house, after which he will be on probation for another five years. And unless he can get the verdict overturned, he will have to spend the rest of his life with a felony on his record.

Perhaps you remember Charlie Engle. I wrote about him not long after he entered a minimum-security facility in Beaver, W.Va., 16 months ago. He’s the poor guy who went to jail for lying on a liar loan during the housing bubble.

There were two things about Charlie’s prosecution that really bothered me. First, he’d clearly been targeted by an agent of the Internal Revenue Service who seemed offended that Charlie was an ultramarathoner without a steady day job. The I.R.S. conducted “Dumpster dives” into his garbage and put a wire on a female undercover agent hoping to find some dirt on him. Unable to unearth any wrongdoing on his tax returns, the I.R.S. discovered he had taken out several subprime mortgages that didn’t require income verification. His income on one of them was wildly inflated. They don’t call them liar loans for nothing.

Charlie has always insisted that he never filled out the loan document — his mortgage broker did it, and he was actually a victim of mortgage fraud. (The broker later pleaded guilty to another mortgage fraud.) Indeed, according to a recent court filing by Charlie’s lawyer, the government failed to turn over exculpatory evidence that could have helped Charlie prove his innocence. For whatever inexplicable reason, prosecutors really wanted to nail Charlie Engle. And they did.

Second, though, it seemed incredible to me that with all the fraud that took place during the housing bubble, the Justice Department was focusing not on the banks that had issued the fraudulent loans, but rather on those who had taken out the loans, which invariably went sour when housing prices fell.

As I would later learn, Charlie Engle was no aberration. The current meme — argued most recently by Charles Ferguson, in his new book “Predator Nation” — is that not a single top executive at any of the firms that nearly brought down the financial system has spent so much as a day in jail. And that is true enough.

But what is also true, and which is every bit as corrosive to our belief in the rule of law, is that the Justice Department has instead taken after the smallest of small fry — and then trumpeted those prosecutions as proof of how tough it is on mortgage fraud. It is a shameful way for the government to act.

“These people thought they were pursuing the American dream,” says Mark Pennington, a lawyer in Des Moines who regularly defends home buyers being prosecuted by the local United States attorney. “Right here in Des Moines,” he said, “there was a big subprime outfit, Wells Fargo Financial. No one there has been prosecuted. They are only going after people who lost their homes after the bubble burst. It’s a scandal.”

The Justice Department has had a tough run recently. Last week, Eric Schneiderman, the New York attorney general — who was recently given a role by President Obama to investigate the mortgage-backed securities issued during the bubble — complained publicly that he wasn’t getting the resources he needed from the Justice Department. And, of course, on Thursday, a federal judge declared a mistrial on five charges of campaign finance fraud and conspiracy in the trial of the former presidential candidate John Edwards.

In the Edwards case, the Justice Department spent tens of millions of dollars, and trotted out novel legal theories, to prosecute a man who was essentially trying to keep people from discovering that he had had a mistress and an out-of-wedlock child. Salacious though it was, the case has zero public import. Yet this same Justice Department isn’t willing to use similar resources — and perhaps even trot out some novel legal theories — to go after the pervasive corporate wrongdoing that gave us the financial crisis and the Great Recession. (I should note that the Justice Department claims that it “will not hesitate” to prosecute any “institution where there is evidence of a crime.”)

Think back to the last time the federal government went after corporate crooks. It was after the Internet bubble. Jeffrey Skilling and Kenneth Lay of Enron were prosecuted and found guilty. Bernard Ebbers, the former chief executive of WorldCom, went to jail. Dennis Kozlowski of Tyco was prosecuted and given a lengthy prison sentence. Now recall which Justice Department prosecuted those men.

Amazing, isn’t it? George W. Bush has turned out to be tougher on corporate crooks than Barack Obama.






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January 08th, 2014

1/8/2014

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AS WITH THE AFFORDABLE CARE ACT AND RACE TO THE TOP......THESE NEW MORTGAGE RULES SUPPOSEDLY 'CONSUMER' FRIENDLY ARE ACTUALLY CREATING BOUNDARIES FOR HOME-OWNERSHIP FOR THE PEOPLE THE FHA WAS MEANT TO SERVE.  ALSO, LOOK AT WHY SOME RULES, LIKE JUMBO LOANS, CAME AND WENT.  IT WAS ALL ORCHESTRATED AROUND THOSE TRILLIONS IN PROFIT FROM FRAUD AND REFINANCING OVER AND OVER AND OVER.  TAXPAYERS PAID MUCH OF THAT REFINANCING WITH $700,000 LOAN LIMITS!



About Housing

The Office of Housing provides vital public services through its nationally administered programs. It oversees the Federal Housing Administration (FHA), the largest mortgage insurer in the world, as well as regulates housing industry business.

Legislation in the 1960s expressed the social concerns of providing decent and sanitary housing and ensuring that such housing is made available to all. In that sprit, Executive Order 11063, Equal Opportunity in Housing, was issued in 1962 and represented the first major effort by the federal government to combine civil rights with housing. Title VI of the Civil Rights Act of 1964 assured nondiscrimination on federally assisted programs. Equality in housing opportunity was legislated by Title VII of the Civil Rights Act of 1968, the Fair Housing Act, which prohibited discrimination in the sale, financing, or leading of housing. The full protection of the law was expanded by the Fair Housing Amendments of 1988, further prohibiting discrimination based on familial status or handicap.

In 1965, the Housing and Urban Development Act created HUD to succeed the HHFA as a cabinet-level agency.

The 1960s brought a new method of developing low-income housing. The Housing and Urban Development Act of 1965 initiated a new leased housing program to make privately owned housing available to low-income families. The Housing and Community Development Act of 1974 (1974 Act) replaced Section 23 with the Section 8 Leased Housing Assistance Payment Program (Section 8). Title I of the 1974 Act created a new community development block grant (CDBG) program.



The Present

The mission of HUD, to “promote adequate and affordable housing, economic opportunity, and a suitable living environment free from discrimination” continues to focus the department’s initiatives.




'The new rules will help protect consumers and reduce the risk that the economy will crash again because of shoddy lending, Senator Elizabeth Warren, a Democrat of Massachussetts, said yesterday'.

Let's take a look at the new rules from Elizabeth Warren's Consumer Financial Protection Bureau (CFPB) regarding mortgages handled by federally insured Fannie and Freddie.  Now, keep in mind that neo-liberals and neo-cons are working to dismantle these two agencies and end the Federal government's involvement in the mortgage industry.  That was one of the goals of imploding these agencies with fraud after all!  So, new rules for mortgages by the CFPB seem to come just as they will no longer be needed.  This is why the article shows how Wells Fargo.....a leader in private mortgage business and SUBPRIME MORTGAGE LOAN FRAUD EXTRAORDINAIRE......is building a structure for handling loans outside these new rules by the CFPB.  Keep in mind that Warren is being sold as a darling of the progressives when in fact she is a global corporate and free market supporter.....none of that is progressive.

IT IS A HOAX TO KEEP THE CURRENT FHA FROM DOING THE JOB OF SECURING LOANS FOR LOW-INCOME PEOPLE WHILE TRANSITIONING/CLOSING THIS PUBLIC AGENCY.


Remember, the Federal Housing Agency was started to provide low-cost housing loans to low-income people and worked successfully for the few decades it was independent.  No drama, no improper and fraudulent loan activity....simply a well-run Federal agency that helped people become homeowners.  THIS IS A GOOD THING WE WANT TO KEEP.  It was when it was made into a public private partnership as Freddie and Fannie that it became profit-driven and fraudulent and this was the plan.....to blow up a strong public sector service and send it back to Wall Street.  This is what these mortgage reforms are all about!  This is not consumer friendly.....it protects the banks.

Wells Fargo Creates Swat Team to Keep Loans In-House: Mortgages

By Dakin Campbell and John Gittelsohn Jan 8, 2014 8:08 AM ET

  Wells Fargo Wells Fargo & Co. (WFC), the largest U.S. home lender, has assigned about 400 underwriters to originate mortgages for the bank to hold, with as many as 40 percent of the loans likely to fall outside government guidelines taking effect this week.

The bank is training the group as a way to increase lending without losing control of quality, according to Brad Blackwell, head of portfolio lending for the San Francisco-based lender. The group will review loans including those with terms that prevent them from qualifying for protections provided by the Consumer Financial Protection Bureau, or CFPB, under new rules, he said.

Wells Fargo, responsible for about one in five U.S. mortgages last year, is pushing the initiative to compete for clients seeking non-conventional loans such as those with interest-only payments. That segment will be increasingly sought-after at a time when rising interest rates are curbing borrowing demand and banks are facing the biggest regulatory overhaul since the Great Depression.

“As rates continue to rise and refinancing volume continues to contract, lenders are going to be looking for a way to keep their staffs busy,” said Erin Lantz, director of mortgages at Zillow Inc.

Congress directed the CFPB, formed as part of the 2010 Dodd-Frank Act, to create the qualified mortgage rule after banks were blamed for helping spark the 2008 credit crisis by giving mortgages to people who couldn’t afford them. The regulations provide a measure of legal protection to banks that meet guidelines and expose them to legal liabilities if the loans charge high fees or require total debt payments exceeding 43 percent of the borrower’s income.

‘Sweeping Re-Regulation’ “What you see happening on Jan. 10 is the most sweeping re-regulation of mortgage finance that I’ve seen,” said Pete Mills, senior vice president of residential policy at the Mortgage Bankers Association, whose home loan career started in 1983.

Unlike the loose lending practices of the last decade, most lenders now approve borrowers only after fully documenting their incomes and assets. At a time when government-backed loans account for 90 percent of the market, non-qualified mortgages can’t be insured by the Federal Housing Administration or sold to Fannie Mae or Freddie Mac, the government-controlled enterprises that package home loans into bonds.

Changing Structure Wells Fargo wants to give its clients more loans that can’t be sold to the government-backed firms. The bank is confident the new underwriting group, which will make both qualified and non-qualified mortgages, will allow it to originate debt that doesn’t meet the CFPB’s safe harbor, said Blackwell. Non-qualified mortgages could be about 5 percent of the bank’s total mortgage production, he said.

The approach represents a change for the bank, which long made loans with the intention of selling them all.

“In the early days of our history, we were a mortgage bank: our primary responsibility was to originate and sell,” Blackwell said. “Today we are originating for our portfolio. These are loans that we will hold for their lifetime.”

Wells Fargo added $14.5 billion in nonconforming mortgages in the six months ended September, bringing the total held by the bank to $72.4 billion, according to a bank presentation.

Bank of the West, a subsidiary of BNP Paribas SA (BNP), also plans to offer non-qualified mortgages to its clients regardless of amount, according to Stew Larsen, executive vice president of the mortgage banking division based in Omaha, Nebraska. The rules are an opportunity for banks that have capacity to hold loans on their balance sheets to take market share from mortgage companies that lack that capability, he said.

Potential Expansion Non-qualified mortgages have the potential to be a $400 billion a year market, starting with the most creditworthy borrowers and broadening as home values and the wider economy improve, according to Raj Date, who stepped down as deputy director of the CFPB a year ago to found Fenway Summer LLC, which plans to offer non-conforming loans in 2014.

Lenders are responding to mortgage volumes that are forecast to plunge 33 percent this year to $1.17 trillion from 2013, according to the Mortgage Bankers Association. Rates on 30-year mortgages averaged 4.53 percent last week, up from 3.35 percent in early May, according to Freddie Mac.

The rate increased when the Federal Reserve signaled plans to reduce $85 billion in monthly bond purchases and already has diminished the refinancing that accounted for two-thirds all home loans in the last two years.

Refinancing Declines Declines in refinancing have led the largest lenders to start cutting jobs. JPMorgan (JPM) Chase & Co. said it may dismiss 15,000 employees, Wells Fargo cut more than 6,200 positions and Bank of America Corp. (BAC) eliminated at least 3,400 mortgage-related workers. Citigroup Inc. (C) also said it’s looking to trim staff.

Banks are being cautious about testing the limits of the new rules as they continue settling disputes arising from the last decade’s lending spree.

JPMorgan, which agreed to pay $5.1 billion in October to resolve claims by Fannie Mae and Freddie Mac about debt sold to the financing companies, has no plans to expand or discontinue products after Jan. 10, including non-qualified mortgages for borrowers with a high-net worth, according to Amy Bonitatibus, a spokeswoman for the New York-based bank.

Bank of America will continue providing interest-only loans to “preferred customers in a very conservative manner,” according to bank spokesman Terry Francisco.

Citigroup Offering Citigroup will offer some loans such as adjustable-rate mortgages and those too large to qualify for agency guidelines, according to Mark Rodgers, a bank spokesman. The loans will only be made when they are “appropriate and suitable” for borrowers, he said.

The new rules will help protect consumers and reduce the risk that the economy will crash again because of shoddy lending, Senator Elizabeth Warren, a Democrat of Massachussetts, said yesterday.

“The rules will reshape the mortgage market for the better,” Warren, who first proposed creating the CFPB, said during a floor speech. “They will give people a better chance to buy homes and a better chance to keep those homes, and they will force mortgage lenders and servicers to compete by offering better rates and customer service, not by tricking and trapping people. ”

Initial Reluctance While lenders initially will be reluctant to extend non-qualified mortgages to borrowers with lower incomes, limited assets or low credit scores, they will probably stretch the rules as they seek to expand business, just as they began offering loans to subprime borrowers in the last decade, according to Richard Eckert, an MLV & Co. analyst who worked as a risk management analyst at the Federal Home Loan Bank of San Francisco in the 1990s.

“Just like back in the early 2000s, to keep the party rolling they slipped into subprime,” he said. “People that were high and mighty and were going to take the high road a year ago when quarterly loan originations were $400 billion and now seeing those dry up to as little as $150 billion, I think they are taking a real hard look at what they may have passed up.”

Even as it cuts mortgage jobs, Wells Fargo has selected between 300 and 400 underwriters who will execute different policies and report to separate bosses than peers who check over loans the bank sells to investors, Blackwell said in a telephone interview.

Separate Groups “We have separated the underwriting group into a separate team that only underwrites loans” for the bank’s own balance sheet, he said. “We found it impossible to achieve our objectives” with the two groups together, he said.

The underwriters will be located in six locations around the country and the training of the group and policy writing will be completed by the end of the year, Blackwell said.

This may lead to faster closing times and fewer mistakes, according to Joseph Morford, an RBC Capital Markets analyst based in San Francisco. That should build trust with the company’s financial advisers and private bankers, who are expected to refer wealthy customers, he wrote in a Dec. 23 note to clients.

“The brokers should feel more comfortable that their customers will be handled appropriately, which over time should lead to more mortgage referrals,” Morford wrote after meeting with David Carroll, head of Wells Fargo’s wealth and retirement unit.

Already, the new policy has “allowed us to do more volume with better service and better quality,” Blackwell said.


_____________________________________________
MIND YOU, SOME OF THESE RULES ARE FINE.  WE NEVER BELIEVED A LAW WAS NEEDED TO REQUIRE A BANK TO CHECK PERSONAL QUALIFICATIONS LIKE INCOME AND EMPLOYMENT.....THAT WAS FRAUD.  THE 45% OF MONTHLY INCOME WOULD NOT BE BAD IF PRICES FOR HOMES WERE NOT SO HIGH FOR EXAMPLE IN CITIES.

Keep in mind the mortgage crisis was created by Wall Street and it is these same requirements in this bill placed on homeowners that was needed on banks to stop the next crisis......20% capital on hand in the banks has never happened and they are now leveraged with derivative debt beyond the $600 trillion of last economic crash.  So, Wall Street and the Consumer Financial Protection Bureau is placing the requirements needed for banks in these mortgage rules for consumers.


Let's look at jumbo mortgage loans for example.

The first thing our neo-liberal Obama and Congress did when they were elected in 2008 was to extend Federal protection FHA for loans to a whopping $700, 000.  Keep in mind the FHA is a low-income agency. 

They did this so affluent homeowners could qualify for all the mortgage write-downs and low-interest refinancing that was supposedly helping main street keep their homes.  Most of the money spent in this Federal program went to these $700,000 homeowners while main street went into foreclosure by the tens of millions.  So, we now have a Federal agency insuring home loans for hundreds of thousands of dollars-----JUMBO MORTGAGES.  Why end that now?  Because these five years of Obama's term has moved those tens of millions of foreclosed homes and refinanced those high-end mortgages all that is needed and now they are ready to handle the mortgage market in a way most profitable. 




How will new mortgage rules affect you?

By Polyana da Costa • Bankrate.com Highlights
  • The mortgage rules are designed to ensure that borrowers can repay.
  • Jumbo loans will be harder to qualify for; interest-onlies will be rare.
  • Homeowners will get renewed protections when they fall behind on payments.


The home loan industry will soon have to adapt to new mortgage rules that will offer borrowers much needed protection against lender abuses and reckless lending standards. But the changes may not please all borrowers.

Some of the new mortgage rules the Consumer Financial Protection Bureau has issued this year will influence qualification requirements and the types of mortgages that borrowers get. The new standards go into effect next year -- but expect lenders to start adjusting to the new policies in coming months.

The gist of one of the main rules is simple: Lenders will be required to ensure that borrowers have the ability to repay their mortgages. In return, lenders will be protected from borrower lawsuits so long as they issue "safe" mortgages that follow guidelines.

These safe mortgages are what the CFPB calls "qualified mortgages." As defined by the CFPB, only 12.8 percent of new mortgages in 2012 didn't meet the "qualified mortgage" standard, according to real estate data provider CoreLogic.

The new mortgage rules won't affect the majority of people seeking to buy a home or refinance their home loans, because lenders have already tightened their lending standards since the financial crisis.

But certain groups of borrowers will notice a difference, analysts say. This is especially true for borrowers seeking larger mortgages. Self-employed borrowers also may need to jump through additional hoops to get a home loan.

"There are all sorts of ways to prove income, but what's no longer at the table is just asserting that you make X dollars per year," says Julia Gordon, director of housing finance and policy for the Center for American Progress and former manager of single-family policy at the Federal Housing Finance Agency.


What will change for jumbo loans?Mortgage professionals in high-cost areas say they worry that the new rules may create obstacles for some borrowers seeking large loans to buy or refinance a home. That's partly because a mortgage that falls outside of the conforming and Federal Housing Administration loan limits (which vary between $417,000 and $729,750) will not be considered a qualified mortgage if the borrower's debt payments exceed 43 percent of monthly income.

About 9 percent of jumbo loans issued in 2012 went to borrowers with debt-to-income ratios higher than 43 percent, CoreLogic data show.

"A 45 percent debt ratio seems to be slightly more common than a 43 percent ratio these days, so lenders will most likely reduce their max ratios for nonagency loans," says Matt Hackett, operations manager for Equity Now in New York City.

Interest-only loans will be harder to findBorrowers who rely on interest-only loans will see changes, because loans that don't require borrowers to pay principal during an initial period are not considered a qualified mortgage under the CFPB's rules.

These loans were widely available during the housing boom and contributed to the crisis, as many homeowners couldn't handle the larger payments once the initial interest-only period expired. Most lenders have stopped offering interest-only loans, but they are still popular for jumbo mortgages and in high-cost areas.



___________________________________________


Bank of America Loan Modification Plan Requirements Explained Posted by admin On April - 27 - 2011

What does it take to get approved for a Bank of America loan modification?  What are the requirements for approval that homeowners need to meet in order to get a lower mortgage payment?  These are questions that most borrowers need answers to – and it is important to know the answers before you send in your application.  Here is some helpful information on the specific requirements used for the loan modification plan.

Bank of America Loan Modification Requirements:

The government has mandated that every homeowner who asks to be reviewed for this program must be given the chance and during the review process their home cannot be foreclosed.

  1. for owner occupied homes only – so it will not HAMP Loan Mod Program work for rental property or second homes.  Bank of America may have an in house plan that can be used on those types of loans.

  2. You must be facing a financial hardship situation – this means that due to circumstances out of your control your current mortgage payment is not affordable and you are at risk of default.  Loss of home value alone is not a valid reason for a loan modification – some good reasons are loss or reduction in income, increased expenses, medical bills, divorce, military, lack of reserves, high debt
  3. The  plan is only for loans with a balance less than $729,750 and those that were taken out before January 1, 2009.  Jumbo loans will not qualify, but you can request a Bank of America in house loan mod if your loan balance is too high.
  4. Your current mortgage payment must equal more than 31% of your household gross monthly income – this calculation is called debt ratio and it is a big part of the approval requirements.
  5. Your monthly income, monthly expenses and current bank balances must fit within a standard approval formula that Bank of America uses.  This is called the Waterfall Method of Modification-if your income is too high or too low you will not qualify.  You may want to Sample Budget-Automatically!

    run your own monthly budget through the loan modification software calculator in order to be sure that your figures are acceptable before submitting it for review.

Below you see that the mortgage loans above $417,000 are the jumbo loans.  As the article below this shows.......refinancing of jumbo loans in CA, NJ, NY, and FL over what was then this $417,000 limit sky-rocketed and Obama and neo-liberals in Congress raised that to $700,000 to cover that difference.....

IT WAS A DELIBERATE MOVE TO COVER WHAT WERE ILLEGAL REFINANCING ABOVE AMOUNTS SET BY THE FHA CREATING HUNDREDS OF BILLIONS OF DOLLARS IN PROFIT.  SEE WHY THIS NEW MORTGAGE RULE NOW FORBIDS THIS!  THE DEAL IS DONE!


So, we hear in the press that Jumbo Mortgages will not be included in Obama's bailout and then we see that indeed, jumbo loans are what was intended for bailout.  Think about the states committing these crimes all for billions in bank profits and the fact that most of them are neo-liberal. 


Three Options for Refinancing a Jumbo Home Loan With Reduced Income [Aug 5, 2009.]

For homeowners with home loan amounts of $417,000 or less, the Obama Administration's Home Affordable Refinance Program can help get that tough refinance done. This so-called "conforming loan limit" is acting as a sort of dividing line between those who are eligible for government mortgage refinance assistance and those who aren't.

It's not really a surprise, then, that many holders of jumbo home loans (loans above $417,000) are feeling a sense of hopelessness about refinancing their home loan. This hopelessness can set in especially hard for borrowers suffering from reduced income due to unemployment or cut hours.

But before giving up, consider these three options for refinancing a jumbo home loan:

1. Jumbo Loans May Qualify for the Home Affordable Modification Program

 Although it's true that the Home Affordable Refinance Program does not apply to jumbo loans, the Obama Administration's Home Affordable Modification Program does contain eligibility for certain jumbo mortgages. Check out the details of the program here.

Borrowers who are paying more than 31 percent of their income to housing expense (mortgage, taxes, insurance) may qualify for this modification program--even for jumbo home loans.

2. Get a Co-Signer

Not the most appealing option in the universe, sure, but tough times call for tough measures. If Mom and Dad are sitting on a paid off house, have ample retirement savings, and don't want to see their children (or grandchildren) suffer the impact of a foreclosure, co-signing may be the best option available.

Especially in the case of reduced income, Mom and Dad's income can make a difficult refi possible.

3. Contact (Harass) the Bank Repeatedly

Not to put it bluntly, but borrowers whose debt-to-income ratios have been skewed for the worse by reduced income have to work a lot harder for a jumbo loan refinance than the rest of America. Part of this hard work entails contacting a lender directly and trying to work out a plan that respects borrower circumstances.

But don't just base such arguments on an emotional appeal. If good credit history is there, if unemployment is the reason why a refi is temporarily impossible, if job leads are coming down the pike, mention all that and more. Develop a personal relationship with the lender if at all possible.

And use numbers to make it clear that a foreclosure is in no one's best interests. Here are some foreclosure cost figures that help make the point that refinancing is the best option for both the borrower and the bank.

_______________________________________________

FHA loan limit back up to $729,750


Tuesday November 22, 2011 11:30 AM By Ellen Yan


Home loan borrowers will once again be able to get federally guaranteed loans of up to $729,750 on Long Island -- but only from the Federal Housing Administration.

The new law that funds five federal departments, including the Department of Housing and Urban Development, did not extend the higher limit, which had expired Oct. 1, to loans guaranteed by mortgage finance giants Fannie Mae and Freddie Mac.

President Barack Obama on Friday signed the measure after the final congressional vote on Thursday. The Federal Housing Administration extension expires Dec. 31, 2013.

Republicans in the House had stripped the extension for Fannie and Freddie, which are overseen by the Federal Housing Finance Agency.

The report from House and Senate negotiators on the bill cited the two agencies' "questionable business practices" and "extravagant management bonuses."

The finance agency's acting director, Edward J. DeMarco, had defended millions of dollars in pay for Fannie and Freddie executives, saying "competent executives" were needed during these challenging times.

But congressional negotiators said they allowed the extension for FHA loans because it is subject to "greater congressional scrutiny."

The federally guaranteed loan limit was raised from $625,500 in 2008 as a temporary measure to give the housing market a boost. Federally guaranteed loans are less risky for investors, and when lenders sell these loans on Wall Street, this frees up capital for the lenders to lend again.

But as the loan limit was due to expire Oct. 1, supporters called for another extension because the housing market was still weak, while opponents saw it as a subsidy for the rich to buy expensive homes. Anything over the limit is considered a "jumbo loan," which usually carries higher interest rates and down payments.

Rep. Gary Ackerman (D-Roslyn Heights), who helped lead the charge to extend the limits, fired back at Republicans in a Friday statement: "By not fully restoring the loan limits, they have deprived a large portion of the housing market of its main source of liquidity in the middle of the most catastrophic housing crisis since the Great Depression."

He said he would push legislation to give Fannie and Freddie the higher loan limits.



_______________________________________________
Requiring 20% down for a FHA loan?????  REALLY????

SHOUT OUT TO THE FEDERAL AGENCIES BELOW THAT WE DO NOT WANT THESE DOWN-PAYMENT REQUIREMENTS!


What caused so many people with low-income loans to default was the fact that when families sign these loans they expect to have 30 years to pay them.  So, they know they will have to grow in income to meet these loans.  What they did not know was that Wall Street was blowing up the market and a crash would bring the conditions of long-term unemployment, lost retirements/savings from fraud that we have yet to have justice!  So, where some people were playing the loose lending and flipping houses.....most people were simply ordinary people feeling sure that in 30 years they could pay for those houses.  STATISTICS SHOW THAT WITH FHA LOANS IN THE PAST....THIS IS TRUE.

So, requiring this high of a down-payment is not necessary, it is simply to keep most people out of the home-ownership arena.  Keep in mind that 80% of Americans are now at poverty line.


FHA down payment - Wikipedia

A borrower's down payment may come from a number of sources. The 3.5% requirement can be satisfied with the borrower using their own cash or receiving a gift from a family member, their employer, labor union, or government entity.


Below you see that historically a 31% of income has been recommended, not required.  This new rule now requires a 45% of income and that is a huge jump for an agency created to help low-income people.

FHA Qualifying Ratio Explained

Also known as debt to income ratio, the FHA permissible qualifying ratio is simply expressed as the fraction of your gross monthly income that goes toward your monthly recurring expenses. The FHA permissible qualifying ratio is divided into two main categories:

  1. Mortgage Payment Expense to Effective Income Ratio: This ratio focuses only on your mortgage payment expense in relation to your gross income. The FHA guidelines recommend a qualifying ratio of 31 percent for your total mortgage payment expense to effective income. The FHA sets a higher ratio of 33 percent if your home qualifies under the Energy Efficient Homes (EEH) program.





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    Cindy Walsh is a lifelong political activist and academic living in Baltimore, Maryland.

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