This week we will talk the US FED and Wall Street financial policy and the real estate/housing market policies all of which fall right into the PLOT OF THE FORGED COUPON
Good for Book Groups, Great Books, Novels
Leo Tolstoy’s Last Novel: The Last Coupon
July 17, 2009 ninams
Leo Tolstoy’s last novel, The Forged Coupon, is the story of the multiplying and layering effects that one single action can have, and how those effects can in turn be answered by and turned around through other actions. Destiny is not set, fate is always being determined by our own acts and through our own responsibility. In the novel, it is the instance of a father’s harsh and judgmental words to his son that sets off a reaction of increasingly negative actions, beginning with a forgery and continuing with cheating, lies, perjury, thievery, vengeance, oppression, and culminating in revolt, hangings, and murders. Only when the evil swilling forth from the myriad of affected persons (peasants, overseers, religious representatives, land owners, shop owners, and professional men) is faced head on with absolute goodness in the form of Mariya Semenovna, does it begin to dissipate, losing power and force. The goodness of the murdered women survives her death and causes the conversion of her murderer from bad to good, and then we see the multiple and layering impacts of goodness passing through the people. One by one, those who sought only to oppress or steal or live falsely, turn away from their evil ways and begin to care for others, give to others, and forgive others, an example held up in the life of Mariya, and in the life of Jesus Christ, as reported in the gospels.
The novel’s characters display the virtuosity of Tolstoy in creating very genuine characters from every walk of life, and infusing them, both in personality and in action, as examples of universal goodness and evil. His characters are both unique individuals and deeply familiar types: as new and fresh as they are, they are yet recognizable and understood in their ordinariness, their ability to commit bad acts, and their ability to reform, change, and become better people. Tolstoy is asserting that within each person there is capacity for good and evil, and that the choice to be one or the other is a choice freely carried: you are responsible for your actions and fate, no matter if born in a hut or in a palace (the Tsar makes an appearance in this novel as well).
Tolstoy is not making a simplistic argument that one bad action leads to a chain reaction of evil, growing stronger and more evil as the reaction spreads. Instead, what he demonstrates through this novel of wonderfully interwoven events and lives that evil actions do not necessarily lead to more evil. Tolstoy rejects the vision of ripple effect of the bad stone thrown in the pond of life, with circles of evil inevitably spreading out, but instead he offers up two powerful ideas: first, that evil can be stopped, the ripples diverted, by being met by a larger stone and stronger ripples, of goodness. Secondly, that evil is not the stronger of the forces at battle within ourselves: even good intent is enough to repel the evil, to redirect lives towards positive connections with other lives. This is because our inherent human nature rejects negative connections of destruction, oppression, and misunderstanding; we thrive on cooperation, understanding, and production.
Tolstoy also demonstrates in this novel that institutions that seek to control our human nature, including most prominently over-arching and controlling government (including justice systems) and religion, stunt the goodness inherent in human nature, and lead to corruption and oppression, begetting evil.
Nothing I have ever read by Tolstoy is less than great: his short stories, Anna Karenina, and his shorter novels, like The Kreutzer Sonata (I have yet to tackle War and Peace). The Forged Coupon, his last novel, completes his works of engaging writing that moves beyond just great story telling into the realm of telling readers how to live and what to live for. Tolstoy’s novels, as I argue all great novels, demonstrate the need for connection between humans. Connection is necessary not only for survival but to make life worth living, enjoyable, challenging, exciting and fulfilling.
In my own life, I know that is the connections I make that keep me on keel and moving forward. I am someone who loves to be alone, to have time to myself, but underlying my ability and need to be alone, are all the connections, the live wires of existence, that I have with other people. As unique as each individual is, and as little as I can know the inner workings of another human being (their challenges, dreams, struggles), I do know that if I meet a person with kindness and acceptance (which is a form of forgiveness), I can forge a sustaining connection. That connection can be sustaining to me and to the other person, it can last a lifetime or just a limited period of time, but it will be real, and it will be unique. Regardless of religious, political, gender, or class associations, the connection can be made, a bridge between me and others, a bridge that allows my safer, happier, and richer passage through life.
Here we have a Johns Hopkins economics professor telling us a rate hike is a DONE DEAL-----and he is right----the US Treasury and state municipal bond debt as well as the toxic subprime mortgage buyback debt the US FED was allowed to accumulate has reached its limit----THEY COULD NOT TAKE ANY MORE DEBT ON IF THEY WANTED TO. Baltimore led the nation in comparative debt saturation from bond debt and Johns Hopkins in Maryland and Baltimore is the one who pushes it. Why go to a Johns Hopkins economist for an opinion? IT IS BLOOMBERG FINANCIAL FOR GOODNESS SAKE----Hopkins is Bloomberg University and is far-right global Wall Street. It matters from where we get our financial news----the 99% should read broadly but look for left economic research and data.
We have known this economic crash was coming since 2013 actually from 2010 if one follows the policies installed by a Clinton/Obama super-majority with Obama in 2009. The only thing holding the crash from coming was when the US FED would raise interest rates and inflation. It could have happened in 2013 but global Wall Street wanted this time between 2013 ----2016 to be SUBPRIMING OR JUNK BONDING OUR US TREASURY AND STATE MUNICIPAL BOND MARKET. Remember, the subpriming of mortgage loans during Bush had financial and legal professionals knowing that crash was coming in 2005---it was again the US FED under Greenspan that allowed those next few years 2006-2008 TO SUBPRIME AND JUNK BOND that mortgage loan market. Bernanke created the same conditions as Greenspan---only he did it far worse---he junk bonded our GOVERNMENT WEALTH.
“A rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist'.
Johns Hopkins and/or a Bloomberg Financial never tells us all these goals---they simply tell us we have no voice in this---the US FED will do what it wants when it wants when in fact the US FED HAS BEEN OPERATING ILLEGALLY AND UNCONSTITUTIONALLY these few decades of ROBBER BARON FRAUDS. This is why both right wing voters and left wing voters have shouted against the US FED and global Wall Street pols ====and financial 'experts' as below.
Yellen Says Interest Rate Hike Could Come ‘Relatively Soon’
November 17, 2016, 8:00 AM EST November 17, 2016, 9:23 AM EST
- Fed chief reiterates that rate increases will be ‘gradual’
- She makes no mention of impact of potential Trump policies
Yellen Appears to Keep Fed on Track for Rate Hike
Federal Reserve Chair Janet Yellen signaled the U.S. central bank is close to lifting interest rates as the economy continues to create jobs at a healthy clip and inflation inches higher.
A rate hike “could well become appropriate relatively soon if incoming data provide some further evidence of continued progress toward the committee’s objectives,” Yellen said in the text of testimony she is scheduled to deliver Thursday in Washington before Congress’s Joint Economic Committee.
Yellen, who made no mention of the prospective policies of the incoming administration of President-elect Donald Trump, reiterated the expectation of Fed officials that future rate increases will be “gradual.” Bond prices have fallen and stocks have risen as investors anticipate that Trump’s proposals to cut taxes and boost infrastructure and defense spending will lead to faster inflation and stronger growth.
“Yellen’s testimony ignored the very real possibility of substantial fiscal stimulus next year,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd., said in a note. She “does not want the Fed to become even more of a political punch bag than it is already.”
Yellen’s remarks will serve to cement expectations, barring a significant negative shock, for an increase in interest rates when the Federal Open Market Committee gathers in Washington Dec. 13-14. Pricing in federal funds futures contracts already imply a greater than 95 percent chance of a quarter-point hike.
“Were the FOMC to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the committee’s longer-run policy goals,” she said. “Moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and ultimately undermine financial stability.”
She suggested the danger of that happening soon was low because current policy is only “moderately accommodative.”
“The risk of falling behind the curve in the near future appears limited,” she said.
At their most recent meeting earlier this month, Fed officials left the target range for the benchmark federal funds rate at 0.25 percent to 0.5 percent -- where it’s been since December -- and said the case for raising rates had “continued to strengthen.”
“A rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets,” said Jonathan Wright, an economics professor at Johns Hopkins University in Baltimore and a former Fed economist. “But the pace of firming is likely to continue to be glacial because the funds rate will then be within about a percentage point of the FOMC’s estimate of neutral,” he said, referring to the level of rates that neither spurs nor slows the economy.
Yellen said the decision not to raise rates earlier this month didn’t reflect a lack of confidence on the economy.
“I expect economic growth to continue at a moderate pace sufficient to generate some further strengthening in labor market conditions and a return of inflation to the committee’s 2 percent objective over the next couple of years,” she said. “In addition, global economic growth should firm, supported by accommodative monetary policies abroad.”
While the recent pace of jobs gains “cannot continue indefinitely,” Yellen said she still saw room for further strengthening of the labor market.
At 4.9 percent, the U.S. unemployment rate is still slightly above most Fed officials’ estimate for the lowest sustainable level of joblessness, she said. Involuntary part-time employment, she noted, remains elevated.
Yellen saw some signs that a tightening labor market was beginning to produce higher wage gains. Stepped up pay rises should eventually help boost inflation to the Fed’s goal just as temporary forces holding it down -- lower prices for imports and oil -- continue to fade, she said.
Yellen is scheduled to answer questions from lawmakers after delivering her prepared testimony at about 10 a.m.
Here we see in 2013 when Bernanke started talking of the need to raise FED rates but did not----this is the subpriming---junk-bonding spike in bonds that mirrors the mortgage loan subpriming of 2006-2008-----toxic mortgage loans soared when it was clear Greenspan was going to allow open mortgage fraud-----same occurred with Bernanke as he basically said----go for the junk-bonding in 2013. Meanwhile our states used this window with yields of 2.46% as the excuse to junk bond our state bond systems. It was all manipulated and illegal bond activity because everyone knew the bond market was ready to crash------it's like driving a car heading towards a cliff-----and rather than slowing and stopping the car----you hit the gas. This is PREMEDITATED ECONOMIC HOMICIDE =====If COLUMBO was on the case he would wrap up that fraud EASY PEASY.
We are not going to talk this time about FAKE UNEMPLOYMENT STATS---most Americans understand these figures are juked. Our US unemployment went from around 10% when Obama took office----2009 to today's 35% and higher. There has been NO GDP growth ----all GDP growth shown was tied to these bond market frauds----those high-end Wall Street bundling and sales of foreclosed houses. THAT IS IT. This is why only the 1% made financial gains these several years of Obama.
'At 4.9 percent, the U.S. unemployment rate is still slightly above most Fed officials’ estimate for the lowest sustainable level of joblessness, she said. Involuntary part-time employment, she noted, remains elevated'
Yellen saw some signs that a tightening labor market was beginning to produce higher wage gains. Stepped up pay rises should eventually help boost inflation to the Fed’s goal just as temporary forces holding it down'
Remember after 2008 crash when Wall Street and community banks would not lend to the 99% -----we could not protect businesses----start businesses----grow businesses while global corporations were getting trillions of dollars from global Wall Street and Congress to do all of the above---global Wall Street pols yet again deliberately killed our ability to grow local, small business economies after so many people lost jobs. That is what is now happening with Yellen -----staging conditions for Wall Street banks to say ---SORRY NO LENDING TO 99% -----
Bond yields spike to 2-year highs
by Hibah Yousuf @CNNMoneyInvest June 20, 2013: 12:07 PM ET
Click the chart for more bond market data.
Investors continued to rush out of bonds Thursday, a day after Federal Reserve chairman Ben Bernanke said the central bank is preparing to scale back its bond buying program if the economic recovery remains on track.
The heavy sell-off pushed the 10-year Treasury yield as high as 2.46%, a level it hadn't previously touched since August 2011. Yields on several other government bonds also spiked to their highest levels in nearly two years.
Investors have been bailing out of bonds and sending yields higher during the past month amid speculation that the Fed will soon begin to taper its monthly bond purchases, known as quantitative easing. The Fed currently buys $85 billion a month in mortgage-backed securities and Treasuries.
On Wednesday, Bernanke did his best to give a timeline of how the tapering could work. The Fed chief said if the economy continues to improve in line with the Fed's outlook, it would be "appropriate to moderate the monthly pace of purchases later this year," and end the program by the time the unemployment rate comes down to 7%, which the Fed expects will be around mid-2014.
Bernanke also made it clear that a hike in the Fed's key short-term interest rate, which stands near zero, is "still far in the future."
But that didn't stop nervous bond investors from selling more Thursday.
"Most investors have been expecting the Fed to begin tapering back bond purchases for quite some time, so that's not a surprise," said Rob Fross, co-founder and adviser at Fross & Fross Wealth Management. "But since we've had rates held artificially low for an extended period of time, there's going to be a springboard bounce in rates."
Fross doesn't think interest rates will continue to rise as rapidly as they have been. He thinks the 10-year Treasury yield should steady around 2.5% by the end of the year.
The big spike in bond rates may be an unwelcome shock for investors, particularly retirees, who had been rushing into Treasuries because they though these were relatively safe assets to own.
Although Fross has been preparing his clients for a rise in interest rates during the past several months, he has been getting calls from clients who noticed the recent losses in their bond investments.
"When they open their statements and see a loss in what they think is the conservative side of their portfolio, that causes concerns," said Fross.
The past month has been particularly rough, with big moves down in bond prices and stocks. Fross said he tries to help his clients understand that the Fed's upcoming policy changes are causing short-term volatility, but he also asks them to consider whether they are traders or investors.
"I tell them that over the long term, the movement of the Fed will have little impact on their portfolio," said Fross. "If you're preparing for 20 years down the line, you don't need to worry about what the Fed is going to do tomorrow."
Still, Fross advises investors who can tolerate a bit more risk to shift their portfolio more towards stocks than bonds.
And to minimize the losses in their bond investments, Fross keeps the duration of bonds typically below two years and uses inverse ETFs, such as the ProShares Short 20+ Year Treasury ETF (TBF), as a hedge. The ETF, which is designed to do well when bond rates are surging, is up 5% in the past month.
Just remembering what global Wall Street was allowed to do under Bush allows us to see what global Wall Street was allowed to do under Obama with Clinton neo-liberals in charge of Congress in 2009 when all policies were passed to ALLOW WALL STREET AND THE FED to do this fraudulent bubble and crash.
WE THE PEOPLE must look closely at credit card advertising------those Freddie and Fannie FHA toxic mortgage loans are being advertised by the same global Wall Street 'labor and justice' organizations like HOT CAKES. I watched yesterday as FOX NEWS morning had its media personality hawking what they all know are toxic subprime mortgage loans-----this is why cities like Baltimore get soak in foreclosures and frauds-----our local main stream media outlets ABC, NBC, CBS, FOX are all openly selling these global Wall Street fraud schemes.
So, today we are at a peak of subpriming our mortgage loan market AND our US TREASURY AND STATE MUNICIPAL BOND MARKET. All this is tied to YELLEN and the US FED because------as the 99%/government coffers is pushed into these products the conditions for the highest interest rates------tied to higher inflation rates will make those local city and state bond repayment amounts grow and grow---our credit cards payments grow----our ability to access any credit will disappear.
We have known since 2013 there would be a huge loss of employment by US citizens. What we know is a TRILLION DOLLAR infrastructure project by Trump will be completely global labor pool so very little job creation will occur for black, white, and brown US citizens. Yellen says------Trump's infrastructure bill will create jobs so FED rate increases will be needed to COOL DOWN THE ECONOMY. OH, REALLY???????
As global corporate campus building starts this coming decade we will hear a YELLEN and FED saying the economy is humming and employment growing while the entire economy is global-----global corporations are getting the money ----global labor pool is getting the jobs---and the US FED will continue to raise interest rates bringing extreme hardship to the 99% of Americans.
The Banksters Are Now Setting Up the Crash of 2016
Monday, December 02, 2013 By The Daily Take Team, The Thom Hartmann Program | Op-Ed
As the great Yogi Berra once said, "it's déjà vu all over again."
Right now, millions of Americans are still struggling to recover from the 2008 financial collapse.
That collapse was fueled by the housing crisis, when Wall Street banksters were running around betting on risky mortgage-backed securities that they could sell to investors and make billions from.
They were able to do that because the Graham-Leach-Bliley Act and the Commodities Futures Modernization Act had blown up rational banking regulations, and, as a result, we saw things like the so-called mortgage "liar loans".
Banksters were able to turn billions of dollars in risky mortgages into trillions of dollars in derivatives.
And then everything went to hell.
Fast forward to today, and because of Dodd-Frank there are no more "liar loans."
Banksters can't run the same scam as they did during the housing crisis.
So, they've found a new way to come up with real-estate-backed securities that can be turned into derivatives, worth billions in profits.
How? They've become landlords.
As Marilyn Volan points out over at TomDispatch, in the past year and a half, banksters in Wall Street hedge funds, big banks and private equity firms have purchased hundreds of thousands of mostly-foreclosed houses across the country.
Among the firms and big banks buying up America's real estate is the Blackstone Group, the largest private equity firm in the world. The Blackstone Group alone has bought nearly 40,000 houses across America, spending $7.5 billion in the process.
Blackstone, for example, bought 1,400 homes in Atlanta in one day, and owns nearly 2,000 houses in the Charlotte, North Carolina metro area.
So why are Blackstone and other Wall Street firms buying up foreclosed homes all across the country?
By renting these homes back to Americans, and securitizing America's home-rental market, they can bundle up rental payments the same way they used to bundle mortgage payments, and sell them to investors.
Sounds awfully familiar, doesn't it?
Blackstone alone has partnered with several of America's largest banks, to bundle the rental payments of over 3,000 homes. And they're just getting started.
Last month, Blackstone released the first -ever rated bond completely backed by securitized rental payments, and, sure enough, investors rushed to get in on the action.
When this latest get-rich-quick scheme by Wall Street blows up, the big banks and financial institutions will be just fine, like they were in the aftermath of 2008. Because they leverage these things so much, they have very little skin in the game.
Instead, you and I will again face the consequences of their actions.
Thousands of Americans will again find themselves on the streets, looking for a place to call home, and our economy will be shattered.
We could see a housing and financial collapse that makes the Great Recession look mild.
This is something I talk about in my new book, "The Crash of 2016."
The basic premise of my book is that conservative lawmakers overreacted to the progressive changes in America that took place in the 1960s and 70s.
That overreaction, which included massive deregulation and tax cuts, opened the door for predators – particularly predatory banksters – to step in and wreak havoc on our economy.
And, as we see with Wall Street's new efforts to turn rental homes into cash-cows, that door hasn't been closed.
The predators are again up to their old tricks. Nothing has changed.
Elizabeth Warren was right when she said that the system is rigged.
And if we don't unrig the system quickly, we're going to see another disaster very, very soon.
As this article states-----everything is set to make global Wall Street huge profits just as occurred in early Obama----
Remember Bank of America was that Wall Street bank that should have been bankrupt and downsized and it is back positioned to soak Federal, state, and local coffers and people's pockets with interest on everything including our US TREASURY AND MUNICIPAL BOND DEBT.
When our Baltimore City Hall and Maryland Assembly pols with our Governors O'Malley/Hogan-----and Rawlings-Blake/PUGH sit and watch as our state and city are loaded to the gills with bond debt---they are deliberately handing hundreds of millions of taxpayer dollars to global Wall Street---it will be billions of dollars over these several years of HOGAN.
The goal is to move all revenue resources from Federal, state, and local government to global corporate campus development with global Wall Street using all that bond fraud to finance only that Foreign Economic Zone development----not needing to throw a few bones to local citizens anymore----this is the end of the Robber Baron frauds-----once a Mayor like PUGH sends the city into bankruptcy or into the hands of global banking-----that global 1% and their 2% have complete control of our local, state, and national economies.
'Bank of America Corp. boosted its forecast for interest income, the money it gets from making loans and holding debt securities, predicting it’ll jump by about $600 million in the first quarter'.
This was why the Democratic primary fraud was so important---we knew a Hillary would do the same as a Trump in this coming economic crash. The issue is still---getting rid of global Wall Street players and remembering all these policies can be reversed because it is all being done illegally and unconstitutionally.
All people buying cars-----homes------building up that credit card history----they are selling the 99% on charging things to rebuild credit history destroyed during the 2008 frauds----and now it is happening again----
Jan 14, 2017 @ 10:14 AM 1,905 views The Little Black Book of Billionaire Secrets
Bank Earnings Will Rise With Interest Rates - But that's Yellen And The Fed, Not Donald Trump
I have opinions about economics, finance and public policy.
Opinions expressed by Forbes Contributors are their own.
It’s entirely true that bank earnings are likely to rise substantially in the next few years. Some are describing this as a result of Donald Trump’s coming ascendancy to the presidency but it’s not really that at all. Instead it’s the turning of the business cycle and the coming rises in interest rates that will do it and that’s much more to do with Janet Yellen and colleagues at the Federal Reserve than it is to do with whoever is President. There might still be a small effect from spending plans but even those are really in the hands of Congress, not the executive. The important point here being that bank profitability is about the difference in interest rates, between what they pay and what they charge. And this near decade past has seen a deliberate squeeze on those margins–as the level of rates rises we will expect to see a widening of their interest rate margin.
So this is true:
Investors betting U.S. banks will reap huge profits as interest rates rise under Donald Trump were surprised Friday by just how optimistic the nation’s biggest lenders are about the year ahead.
Bank of America Corp. boosted its forecast for interest income, the money it gets from making loans and holding debt securities, predicting it’ll jump by about $600 million in the first quarter. Brian Kleinhanzl, an analyst at Keefe, Bruyette and Woods, told clients that’s more than he expected and will help the shares outperform. JPMorgan Chase & Co. also sounded a note of confidence, and financial stocks rose more than other sectors.
The effect is going to be there, definitely, it’s the cause ascribed there which I think is at variance with the evidence.
As interest rates creep higher and the president-elect promises fewer regulations, the outlook for U.S. banks appears bright.
Optimism for financiers’ rosier future was abundantly reflected in quarterly earnings released by some of the nation’s largest banks Friday as Bank of America and JPMorgan Chase beat analysts’ earnings estimates.
As my colleague Antoine Gara points out, JP Morgan’s results were good:
Expense cuts combined with an adrenaline shot of growth fueled by rising interest rates is proving to be a potent combination for American banks.
However, as I say, this has not a lot to do with President-elect Donald Trump. This is about rising interest rates, little else.
Recommended by Forbes
A bank lives by the difference in interest rates, the margin. It has to pay some amount to attract money into the bank, those deposits, and then it charges some amount, the interest on loans going out the door. A bank is doing maturity transformation too–they borrow short and lend long. That’s really their economic function in fact. And short term money is near always cheaper than long term money. Thus, as they transform that short term set of deposits into those long term loans they create a margin for themselves. Excellent–but the size of that margin is hugely influenced by the level of interest rates. The higher nominal interest rates are the larger the margin the bank will be able to make.
And of course economic policy over this past decade has been all about pushing down nominal interest rates to near nothing, hasn’t it? And what we’re seeing now, as the Fed raises rates however so gradually, is an unwinding of that artificially low margin that the banks have been able to charge.
Thus it is entirely true that the banks are likely in for a good time in the future. But it’s not so much about Trump as it is really just about that turn in the business cycle and thus monetary policy.
Here is one of the major instruments by global Wall Street Baltimore Development in promoting what is continuous undermining home mortgage policies------from high-end million dollars home sales in Fells Point to flipping houses----here is the same subpriming mortgage loan pipeline at a time when all realtors are know this massive bond market crash will devastate homeowners and businesses.
I was coming home by bus from work yesterday there is a young couple talking about being unable to get hot water regularly and an elevator that was broken ---is it fixed and/or safe? Many landlords are slum landlords in Baltimore because there is no enforcement of laws protecting citizens----it is very, very hard to win against a landlord----another two passengers were talking about having rented from a HOUSE FLIPPER----they said that was happening big-time in Baltimore and tenets were running once they found out because these same conditions existing from Bush era are now going strong today. Continually allowing home markets to be corrupt and fraudulent kills any ability of communities to stabilize----that is the goal. The other major goal of these current round of home mortgage subpriming has to do with WHO IS GOING TO PAY ALL THOSE TAXES FOR DEFAULTED, INFLATED, HIGH INTEREST BONDS? THESE NEW HOMEOWNERS.
You can see this article is tied to HEALTHY NEIGHBORHOODS as is the global Wall STreet Baltimore Development 'housing justice' organizations selling these loans. The folks being tied to today's real estate in Baltimore will be those having to make it through this coming economic crash and likely city bankruptcy. Now, realtors are in the business of selling--they are not GOODWILL AMBASSADORS----but when one is tied to Baltimore Development who uses fraud and corruption in how it moves real estate---with no Baltimore City Attorney---no Maryland State Attorney providing PROACTIVE PROTECTION we do not have policy creating HEALTHY NEIGHBORHOODS.
Make no mistake---it is our US city Wall Street Development Corporations---or Greater Baltimore Development which have driven these few decades of HOUSING AND HOME MORTGAGE FRAUDS-----
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First Time Home Buyer Grants & Programs in Maryland
By Mike Davis posted 05-17-2016 11:16
As a first time buyer, purchasing your first home can be a daunting task. Luckily, there are many helpful programs and resources in the state of Maryland to aid you in the process. By taking a few minutes to familiarize yourself with the many different options offered, you can make your steps to buying your first home much easier and save money along the way.
First Time Home Buyer Grants & Programs in Maryland Image
Maryland Mortgage Program
The Maryland Department of Housing and Community Development (DHCD) offers the Maryland Mortgage Program (MMP), which aids those meeting certain eligibility requirements with first time home mortgage assistance. The Maryland Mortgage Program provides first time buyers with a 30-year, fixed-rate loan, as well as down payment assistance. Buyers are able to work with any approved MMP lender to apply for these funds.
The requirements for the MMP assistance is income based, depending on household size.
It ranges from an income of $88,400 for a 1-2 person household up to a maximum of $128,760 for larger households. All applicants must complete a HUD approved home buying course to qualify for this first time homebuyer’s program.
Maryland Mortgage Program- You’ve Earned It Initiative & Homefront
Another grant offered by the MMP for those seeking help with first time mortgage assistance, is the You’ve Earned It Initiative. This initiative is in place for first time buyers who live in certain sustainable communities and have at least $25,000 in student debt. If you meet the eligibility requirements, a 0.25% discount is offered on the standard MMP mortgage rate.
First time homebuyers who are active duty military or veterans are also offered a 0.25% discount on a 30-year fixed rate mortgage loan known as Homefront
Maryland Mortgage Program- Maryland Home Credit
In addition to these great programs, the HUD approved lender of your choice can assist in with the Maryland Home Credit, which provides annual federal tax savings. These savings are free of standard DHCD fees.
Baltimore County Closing Cost & Down Payment Programs
If you are looking for a home in Baltimore County, there are two income eligible programs offered by the Baltimore County Department of Planning to specified areas. Moderate to low income new homebuyers can take advantage of the Settlement Expense Loan Program (SELP). SELP can help buyers by assisting them with closing costs. This offers the homebuyer a way to purchase a home without having the full out of pocket expense.
The second is the Mortgage Assistance Loan Program (MALP) which aids with down payment costs. SELP and MALP give the buyer a deferred loan. This type of loan can be forgiven if the buyer meets the HOME Investment Partnership act’s requirements. The requirements ask that buyers must occupy the home for a minimum of 15 years in order to reach the period of affordability (time required for the grant to be forgiven.)
Buying Into Baltimore & City Living Starts Here
For those who prefer city living, there are also some great programs to take advantage of for new homebuyers. Every year, Live Baltimore hosts two events, which provide incentives for the first 30 buyers. Buying Into Baltimore gives a $5,000 incentive towards the purchase of your new home. City Living Starts Here hosts 4 events for neighborhoods in the city, providing ten incentives at each neighborhood focused event. A homeowner education course is one of the requirements for these programs. If you would like to benefit from either of these, you can visit Live Baltimore to check on your program eligibility.
Baltimore City Employee Home Ownership Program
If you are an employee of the city of Baltimore, you may be eligible for a $5,000 grant when purchasing your first home. There are no income eligibility requirements and this grant can be used to purchase houses up to $417,000.
In addition, Firefighters, police officers, and teachers can purchase HUD homes through the Good Neighbors program. If these programs may apply to you, you can contact Marva Allette at 410-396-3124 or by email at Marva.Allette@baltimorecity.gov for more information.
Live Near Your Work
The Live Near Your Work grant is for first time buyers who are purchasing a home in the same area their employer. Baltimore city encourages home ownership in the vicinity of your workplace by matching the amount of assistance given by your employer. For example, if your employer donates $3,000, the city of Baltimore will match their donation by granting $3,000 towards the purchase of your new home. The amount of assistance can range from $2,000-$36,000.
Healthy Neighborhood Loan Program
Homeowners who plan to rehab or refinance a home in certain neighborhoods in the city of Baltimore may benefit from the Healthy Neighborhood Loan Program. This fixed interest loan, which is always 1%-6% below the standard 60 day Fannie Mae rate, can be used on targeted blocks or designated areas. Visit www.healthyneighborhoods.org to learn more about the Healthy Neighborhood Program.
As you can see, there are so many great options to aid first time buyers in the purchase of their new homes. By taking advantage of city and county sponsored grants and programs, buyers are able to save money and achieve the American dream of homeownership. Please be sure to visit the included links for application forms and additional information, then contact your local REALTOR® to assist in the home buying process. Good luck on your journey!
We will take this week to look more closely at what is the mirror of Bush era FHA - global Wall Street house-flipping that will leave yet again our communities being filled with foreclosures over the next decade-----
Eye On Housing
National Association of Home Builders Discusses Economics and Housing Policy
Mortgage Debt Continues to Grow
By Michael Neal on August 24, 2016 • (0)
According to the Household Debt and Credit Report released by the Federal Reserve Bank of New York (FRB NY), the outstanding amount of housing-related debt, both home mortgages and home equity lines of credit (HELOCs), totaled $8.8 trillion in the second quarter of 2016, 2.6% ($225 billion) greater than the level from one year ago.
However, the outstanding amount of home equity lines of credit declined by 4.2%, $21 billion, over the year to $478 billion. This is the 26th consecutive quarter of annual declines. Over this period, HELOCs have shrunk by 32.3%. In contrast, home mortgage debt rose over the year by 3.0%, $246 billion. The second quarter of 2016 marks the 11th consecutive quarter of annual growth. Over this period home mortgage debt has risen by 5.9%, but remains 10.0% below its pre-recession peak level.
The FRB NY’s measure of mortgage debt outstanding, which is comparable to home mortgage debt in the Flow of Funds, continues to rise. Additionally, a previous post documented the growth in multifamily residential debt outstanding. In sum, residential mortgage debt outstanding is growing.
On bank balance sheets, residential mortgage debt has different risk weights. The various risk weights were recently enacted by the Basel III regulations and they require banks to maintain a capital buffer to safely overcome downturns. The capital required is directly related to the level of risk a residential mortgage is presumed to present. The Basel III regulations went into effect on January 1, 2015 and banks were required to provide information through the Call Reports, on their residential mortgage exposures, 1-4 family and multifamily, beginning with the first quarter of 2015*.
Figure 1 above shows the total and distribution of residential mortgage exposure, both the amount held for sale and the amount of loans and leases, for banks with only domestic offices. According to the chart there was an adjusted total of $879 billion in residential mortgage exposure in the first quarter of 2015. The amount of residential mortgage exposure rose in the second quarter before dipping over the next two quarters. However, in the first quarter of 2016, the amount of residential mortgage exposure reached $906 billion.
In the first quarter of 2015, the majority of the residential mortgage exposure, 79%, had a 50% risk weight while 18% had a risk weight of 100% and 4% had a risk weight of 20%**. Over the past year for banks with domestic offices only, the share of residential mortgage exposure requiring a risk weight of 50% has widened at the expense of residential mortgages requiring either a 100% risk weight or a 20% risk weight.
Figure 2 presents the total amount and the distribution of residential mortgage exposure for banks with both domestic and foreign offices across the entire consolidated bank and not just at domestic offices. According to the graph above there was an adjusted total of $1.56 trillion in residential mortgage exposure in the first quarter of 2015. The amount of residential mortgage exposure climbed steadily over the next 3 quarters before a modest decline in the first quarter of 2016.
In the first quarter of 2015, the majority of the residential mortgage exposure, 65%, had a risk weight of 50%. However, the proportion of residential mortgages overall with a risk weight of 50% at banks with both domestic and international offices was less than the share at banks with only domestic offices. Conversely, a greater percentage of residential mortgage exposure had a risk weight of either 100% or 20%. Nevertheless, the trend has been the same, the portion of residential mortgages with a 50% risk weighting has grown through the first quarter of 2016, while those with a 20% or 100% risk weighting have shrunk.
* According to the FDIC, residential mortgage exposures include the value of loans held for sale that meet the definition of a residential mortgage exposure or a statutory multifamily mortgage in the regulatory capital rules. This includes loans held for sale that are secured by first or subsequent liens on 1-4 family residential properties, except those qualifying as securitization exposures, as well as loans held for sale that are secured by first or subsequent liens on multifamily residential properties with an original and outstanding amount of $1 million or less, excluding those that qualify as securitization exposures. Excluded are loans held for sale that are secured by multifamily residential properties that do not meet the definition of residential mortgage exposure or statutory multifamily mortgage and are not securitized.
Residential mortgage exposures also include value of loans, net of unearned income that also meet the definition of a residential mortgage exposure or a statutory multifamily mortgage. These include loans secured by first or subsequent liens on 1-4 family residential properties, excluding those that qualify as securitization exposures, and loans secured by first or subsequent liens on multifamily residential properties with an original and outstanding amount of $1 million or less, also excluding those that qualify as securitization exposures. Excluded from this item are loans secured by multifamily residential properties that do not meet the definition of a residential mortgage exposure or a statutory multifamily mortgage and are not securitization exposures, and 1-4 family residential construction loans.
** 0% risk weight – the portion of any exposure that meets the definition of residential mortgage exposure or statutory multifamily mortgage and is secured by collateral or has a guarantee that qualifies for the zero percent risk weight. This would include loans collateralized by deposits at the reporting institution.
20% risk weight – the value of the guaranteed portion of FHA and VA mortgage loans and the portion of any loan which meets the definition of residential mortgage exposure or statutory multifamily mortgage and is secured by collateral or has a guarantee that qualifies for the 20 percent risk weight. This includes loans covered by an FDIC loss-sharing agreement.
50% risk weight – the value of loans secured by 1-4 family residential properties (only include qualifying first mortgage loans); qualifying loans that meet the definition of a residential mortgage exposure and qualify for 50 percent risk weight. The loans must be prudently underwritten, be fully secured by first liens on 1-4 family or multifamily residential properties, not 90 days or more past due or in nonaccrual status, and have not been restructured or modified unless modified or restructured solely pursuant to the U.S. Treasury’s Home Affordable Mortgage Program (HAMP). Also includes loans that meet the definition of statutory multifamily mortgage loans which meet the definition of residential mortgage exposure that is secured by collateral or has a guarantee that qualifies for the 50 percent.
100% risk weight – The value of loans related to residential mortgage exposures that are not included in the previous buckets. These include loans that are junior lien residential mortgage exposures if the bank does not hold the first lien on the property, except if the portion of any junior lien residential mortgage exposure that is secured by collateral or has a guarantee that qualifies for the zero percent, 20 percent, or 50 percent risk weight. Also includes loans that are residential mortgage exposures that have been restructured or modified, except those loans restructured or modified solely pursuant to the U.S. Treasury’s HAMP, and the portion of any restructured or modified residential mortgage exposure that is secured by collateral or has a guarantee that qualifies for the zero percent, 20 percent, or 50 percent risk weight.
Other Risk-Weighting Approaches – The portion of any loan that meets the definition of residential mortgage exposure or statutory multifamily mortgage and is secured by qualifying financial collateral that meets the definition of a securitization exposure.
We want to remind 99% of American citizens that Trans Pacific Trade Pact under Bush long ago added that global banking could not be regulated----since TPP is illegal and unconstitutional we can simply VOID that----but there was never any intent to create new regulations----Obama and Clinton continued overseas to make sure all nations tied to TPP would agree to free market banking---ergo no regulations.
The few banking regulations that were installed mostly harmed our community banks and credit unions in cases of economic crash -----
'Banks and other financial institutions would be able to use provisions in the proposed Trans-Pacific Partnership to block new regulations that cut into their profits, according to the text of the trade pact released this week'.
TPP Trade Pact Would Give Wall Street a Trump Card to Block Regulations
November 6 2015, 3:40 p.m.
Banks and other financial institutions would be able to use provisions in the proposed Trans-Pacific Partnership to block new regulations that cut into their profits, according to the text of the trade pact released this week.
In what may be the biggest gift to banks in a deal full of giveaways to Hollywood, the drug industry and technology firms, financial institutions would be able to appeal any national rules they didn’t like to independent, international tribunals staffed by friendly corporate lawyers.
That could nullify a proposal by Hillary Clinton to impose a “risk fee” on financial firms — or the Elizabeth Warren/Bernie Sanders plan to reinstate the firewall between investment and commercial banks.
Financial firms could demand compensation for these measures that would make them too expensive to manage.
The TPP, a 12-nation pact with countries in Asia and the Americas that requires congressional approval, includes an investor-state dispute settlement (ISDS) system. This allows foreign companies operating in TPP member countries to enforce the agreement without using that country’s court system. Instead, corporations can sue for monetary damages in independent tribunals before corporate lawyers who can rotate between advocating for investors and judging the cases themselves.
The lawyers have an inherent incentive to encourage more challenges with favorable rulings, so they can be paid to arbitrate them. Labor unions who allege violations of the trade deal cannot use ISDS directly; only international investors, i.e. large corporations, can.
Hundreds of past trade deals have included ISDS, usually as a special insurance policy for countries operating in emerging markets. But language in the TPP could be directed to target American financial laws and regulations.
In prior deals, financial services providers were limited to making ISDS challenges based on discrimination — where foreign companies were subject to more stringent rules than their domestic counterparts — or an illegal “taking” of their investments. These types of challenges have been largely unsuccessful in ISDS tribunals.
But now, for the first time, financial institutions could make an ISDS claim based on not receiving a “minimum standard of treatment.” This is the most flexible type of claim. “Over time, tribunals have interpreted this to mean that the company gets compensation if the change in policy disappoints their expectations of future profits,” said Lori Wallach of Public Citizen’s Global Trade Watch.
Article 11.2 of the agreement confirms that financial services providers are covered under the minimum standard of treatment obligation. This means that almost any change in financial regulations affecting future profits could be challenged in an extra-judicial tribunal, even if they equally applied to foreign and domestic firms and even if they were enacted in response to a crisis.
The change to ISDS had been rumored in recent weeks but has now been confirmed by the language in the agreement.
The U.S. Trade Representative’s office claims in a fact sheet that they improved the ISDS process to ensure that countries have the right to “regulate in the public interest,” including in the financial sector. And they point to this language in the investment chapter: “The mere fact that a Party takes or fails to take an action that may be inconsistent with an investor’s expectations does not constitute a breach” of minimum standard of treatment, “even if there is loss or damage to the covered investment as a result.”
But according to Wallach, “The language the Administration has pointed to as the fix is identical to what has been in trade agreements since CAFTA,” referring to a free trade deal with Central America. “Tribunals have systematically ignored it and continue to make broad interpretations.”
Public Citizen estimates that ISDS rulings carried out under U.S. free trade agreements and bilateral treaties have ordered over $3.6 billion in compensation to investors. To use one example, Exxon-Mobil won $17.3 million from Canada this year in an ISDS tribunal, after claiming that a law forcing offshore oil drillers to spend a percentage of revenues on local economic development violated the North American Free Trade Agreement. With the far larger amounts at stake in U.S. financial regulations, the compensation awards could be much higher.
Importantly, there is no ability to appeal an ISDS ruling, so even if countries believe it has been interpreted poorly, they cannot change the outcome and would owe potentially billions in compensation.
“We don’t see that this ISDS is watered-down at all,” said Celeste Drake, trade and globalization policy specialist for the AFL-CIO. “It actually doubles down by providing more access to challenge laws, especially financial services.”
The text is frustratingly circular about a country’s right to regulate. For example, there’s this sentence in the financial services chapter: “For greater certainty, nothing in this Chapter shall be construed to prevent a Party from adopting or enforcing measures necessary to secure compliance with laws or regulations that are not inconsistent with this Chapter.”
In other words, the TPP member country can adopt or enforce any law or regulation it wants — but only as long as it’s consistent with the agreement. This logic offers no additional protection beyond the agreement itself, and does not obviate the minimum standard of treatment obligation.
Excessive awards for violations would be likely to lead governments to repeal laws and regulations, as the U.S. is in the midst of doing with country-of-origin labeling for meat and poultry. In that case, the World Trade Organization ruled that the U.S. would face $2 billion in retaliatory tariffs unless it repeals the law. While the tariffs aren’t the same as the direct compensation to corporations under ISDS, the resulting financial pressure would similarly lead lawmakers to move to repeal.
Extending minimum standard of treatment in this fashion protects all of Wall Street, not just foreign firms, as domestic mega-banks would benefit from any repeal as much as their foreign colleagues.
The big takeaway is this: Former Citigroup executive Michael Froman, the U.S. trade representative, negotiated an agreement that will give Citi and all other banks a shot to undermine every future financial reform enacted.
“Expanding the financial chapter is an enormous expansion of the scope of the investor-state dispute system,” Lori Wallach concluded. “It opens up a Pandora’s box for financial services regulation.”
Public Citizen also estimates that over 1,000 new corporations from TPP member countries, representing over 9,200 subsidiaries in the United States, would now be able to launch ISDS cases. This nearly doubles the companies eligible for the ISDS process. It comes as ISDS cases have surged, with as many claims launched in the last four years as in the previous three decades.
The TPP, in fact, essentially acknowledges the dangerous threat ISDS represents to domestic laws by carving out tobacco companies from using the process to attack public health regulations. Other industries that spew carcinogens into the atmosphere, or harm citizens through other means, are not similarly restricted. “Tobacco is not the only dangerous thing in the world,” said John Sifton, Asia advocacy director for Human Rights Watch. “You could get a tobacco company to make the same point and they would be right.”
Remember the ROOSEVELT INSTITUTE is not a left social Democratic FDR----but a right wing global Wall Street United Nations ONE WORLD institution----and here we have one of their fellows telling us something good happened from Dodd Frank. They say ----well, those global Wall Street banks did at least have to RE-CAPITALIZE what was so low of an amount everyone knew it was not really re-capitalization that would protect against this next BAILOUT. What we need to know regarding this week's discussion of the US FED---the economic crash---the housing market is this----
ALL OF THAT GLOBAL WALL STREET BANK RE-CAPITALIZATION MONEY CAME FROM THE US FED BUYING BACK ALL TOXIC SUBPRIME MORTGAGE LOANS ON THE BOOKS OF WALL STREET BANKS.
Right now the US FED has $4-5 trillion in mortgage buyback BONDS -----that represents almost all of these Wall Street bank re-capitalizations. Who will end up paying that US FED $4-5 trillion in debt? Global Wall Street players stated back in 2012 all that debt would simply be transferred to the US Treasury-----that is TAXPAYERS.
'“Dodd-Frank was supposed to curb certain kinds of risky behavior on Wall Street,” Mike Konczal, a fellow at the Roosevelt Institute who studies financial reform and inequality, told me. “And by that standard it’s gone very well.” Big banks now have to carry almost twice as much capital as they did before the crisis, and new Fed rules will require them to set aside another two hundred billion dollars on top of that. Those capital requirements should be even higher, but the current ones have already made the system safer'.
Do you hear that new Consumer Financial Protection agency shouting against this coming massive bond market fraud? No! But it will after the fact pretend to be clawing back some of that fraud and get almost nothing----as in 2009.
The Financial Page May 16, 2016 Issue Banking’s New Normal
By James Surowiecki New Yorker
If you listened only to speeches from the Presidential campaign trail, you’d come away with the strong impression that, eight years after the financial crisis, Wall Street reform has been a bust. Every Republican candidate called Dodd-Frank, the centerpiece of the Obama Administration’s reform effort, a dismal failure. Donald Trump called it “terrible”; Ted Cruz said that it had only helped “the big banks get bigger and bigger and bigger.” Hillary Clinton has been tepid in her defense of Dodd-Frank, and Bernie Sanders called it “a very modest piece of legislation” that changed little about the way the Street does business.
Tell that to the bankers. Banks performed dismally last year, and their 2016 first-quarter-earnings reports show that this one is off to an even worse start. Returns on equity have fallen. Bonuses and salaries are being slashed; in the past quarter, Goldman Sachs cut the amount it set aside for compensation by forty per cent. Payroll is down, too: banks have eliminated tens of thousands of jobs in the past couple of years and are now embarking on a new round of severe job cuts. Some of these struggles can be attributed to short-term factors, such as low interest rates and unusually volatile markets. But there’s no avoiding the deeper conclusion: regulations have simply made banking less profitable than it once was. Before the financial crisis, financial companies (not including the Federal Reserve banks) accounted for nearly thirty per cent of U.S. corporate profits. By 2015, that number had fallen to just seventeen per cent.
“Dodd-Frank was supposed to curb certain kinds of risky behavior on Wall Street,” Mike Konczal, a fellow at the Roosevelt Institute who studies financial reform and inequality, told me. “And by that standard it’s gone very well.” Big banks now have to carry almost twice as much capital as they did before the crisis, and new Fed rules will require them to set aside another two hundred billion dollars on top of that. Those capital requirements should be even higher, but the current ones have already made the system safer. And, since the bigger the bank, the bigger the capital requirements, there has been a welcome move toward downsizing. Citigroup has shed seven hundred billion dollars in assets over the past seven years, while Goldman and Morgan Stanley have shed a quarter of their assets. JPMorgan cut assets last year to avoid a capital surcharge. And G.E. effectively got out of the financial business altogether by selling off most of G.E. Capital.
Profit-making opportunities for banks have also shrunk. Thanks in part to the new capital requirements and to new rules curbing banks’ proprietary trading, fixed-income trading has dried up, costing banks billions of dollars in revenue. Dodd-Frank has also reduced the middleman fees that banks collect—for instance, by moving much of the trading of derivatives onto the open market. More than half of credit-default swaps and seventy per cent of currency swaps now trade through a public clearinghouse. (Before the crisis, only a small percentage did.) Until recently, big banks were able to borrow money much more cheaply than small ones, because investors assumed they’d be bailed out in a crisis. But recent studies suggest that that funding advantage has nearly disappeared.
Dodd-Frank’s success is important in its own right. But it also teaches us an important lesson about regulation more generally. For decades, the debate over regulation in the U.S. has been dominated by those who believe that, in the words of the Chicago School economist Eugene Fama, “even the best-constructed regulation is bound to fail.” As Fama put it a couple of years ago, “Eventually, the regulators get captured by the people they regulate.” Regulatory capture is always a danger. But the history of financial reform after the crisis shows that it’s not inevitable: if you have well-designed rules, and if regulators have the resources and the public support to enforce them, industry does not always win. Before Dodd-Frank became law, Wall Street lobbied furiously to emasculate it, but the attempt failed. Likewise, the banks’ efforts at softening the bill’s provisions during its implementation have often been unsuccessful. A paper by the political scientists John T. Woolley and J. Nicholas Ziegler looks in detail at the fight over derivatives-trading regulations. “Most of the industry was violently opposed to the new rules,” Ziegler told me. “But a combination of small but very engaged advocacy groups and gutsy regulators made sure they got through.”
Of course, there’s much about Wall Street that Dodd-Frank has not changed. Bankers still make absurd amounts of money. Hedge-fund and private-equity managers still benefit from the carried-interest tax loophole. The big banks, though smaller, are still too big. “If you wanted financial reform to radically downsize the financial sector, or thought it was going to make a major dent in income inequality, you’re bound to be disappointed,” Konczal says. And Dodd-Frank’s work is still unfinished: many of the rules it authorized have yet to be written, and the banks are lobbying to have them written in their favor. As Ziegler told me, “The progress that’s been made is precarious. It can be unravelled.” But precarious progress is progress. Regulation involves a constant struggle to keep rules in place and to enforce the ones that are there. Dodd-Frank shows that that struggle is not necessarily a futile one: sometimes government really does regulate business, and not the other way around. ♦
The only thing any financial analyst says positively about Dodd Frank and the installation of ANY of the banking regulations is that the CONSUMER PROTECTION AGENCY was created showing some billions of dollars of consumer protection over several years. What this article makes clear is that nothing necessary was every installed and it won't be----they will not install any new banking regulations that harm profits which is everything.
As Obama and Clinton neo-liberal pols and players pretend that it was a Trump who dismantled Dodd Frank-----let them know we know none of the regulations needed for consumer protections were ever installed-----
REACH BEHIND THAT PERSON, GRAB HIS/HER PANTS IN BACK AND GIVE THEM A GREAT BIG WEDGIE.
'But five years after Dodd-Frank was enacted, roughly 40 percent of the nearly 400 proposed rules required under the 850-page law have yet to be finalized. A fifth of them haven't even been proposed, according to Davis Polk & Wardwell, a law firm that has tracked the Dodd-Frank rule-making progress since the law was enacted'.
Do you hear that new Consumer Financial Protection agency shouting against this coming massive bond market fraud? No! But it will after the fact pretend to be clawing back some of that fraud and get almost nothing----as in 2009.
5 Numbers To Know As Dodd-Frank Wall Street Reform Celebrates Its 5th Birthday
In 2008, the American economy entered its darkest period since the Great Depression after 30 years of steady deregulation of the financial sector, lax enforcement of rules that remained, and misconduct by nearly every sub-sector of the banking and lending industries. Two years after the crash, Congress finally passed a massive package of Wall Street reforms named after its two principal authors, then-Sen. Chris Dodd (D-CT) and then-Rep. Barney Frank (D-MA).
Tuesday marks the five-year anniversary of the Dodd-Frank overhaul of America’s money business. The law is officially old enough to start kindergarten, but its report card is spotty at best.
Dodd-Frank put a new cop on the beat for consumers, and that agency’s independence and aggressiveness has produced more than $10 billion in direct benefits to Americans wronged by their financial services companies. But the law has been under siege throughout its life, with industry lobbyists outnumbering reform advocates by about 20-to-1 on Capitol Hill in 2012 alone and attending 14 times as many meetings with regulators in the law’s first three years. Five years after Dodd-Frank passed and seven since the recession-inducing crisis peaked, the banking industry doesn’t look all that different.
Five years after Dodd-Frank, with the world’s largest economy still climbing out of the ditch the last Wall Street crisis caused, here are five numbers to celebrate the overhaul’s birthday.
$10.3 billionThe Consumer Financial Protection Bureau created by Dodd-Frank has recovered over $10.3 billion for Americans harmed by financial companies’ illegal or illegitimate practices.
Amid all of Dodd-Frank’s other foibles, the CFPB is an unqualified win for critics of financial industry rapaciousness. The infant agency didn’t launch until a full year after Dodd-Frank’s passage, yet in just four years it has recouped well over $10 billion for consumers. $2.6 billion of that total is restitution paid by firms to individuals they wronged. The agency’s supervisory work — monitoring of business practices that doesn’t end up going to court because companies do not fight the agency’s findings — has produced another quarter-billion dollars in consumer relief. But the agency’s real coup is winning $7.5 billion in debt cancellation, principal reduction, or other modifications to what customers owe banks and lenders. These restructurings of consumer obligations generally do much more to benefit the overall, long-term financial health of households than any given piece of punitive restitution. The penalties firms pay can be large, but once they get spread out amongst all the affected customers, individual benefits tend to be much smaller.
83There are 83 separate financial rules mandated by Dodd-Frank that haven’t been written yet.
Lawmakers left much of the muscle of the 2010 reform package to regulatory agencies, instructing various bodies to create a total of 390 separate federal rules. But in five years, just 247 of those — less than two-thirds — have actually been finalized, according to Davis Polk & Wardwel LLP. Another 60 rules have been proposed but not completed, and 83 haven’t even seen formal proposed rulemaking.
Combined, the agencies charged with Dodd-Frank rulemaking have published over 22,000 pages of regulatory content pertaining to Wall Street reform since the law went into effect — equivalent to 34 copies of Moby Dick — but still haven’t quite made it to third base. With so many details left unwritten in the original legislation, the Dodd-Frank fight didn’t end when President Obama signed the bill. Infighting and lobbying at the various specialized executive agencies charged with writing the actual rules has threatened to hamstring the law ever since.
There are important rules that remain unfinished, like one mandating disclosure of CEO-to-worker pay ratios at public companies, and vital ones that are complete but dissatisfy consumer advocates, like the “Volcker Rule” that is supposed to put a firewall between banks’ main consumer business and their riskier trading activities. Years of highly technical legal skirmishes went into crafting that firewall, and the final form of the Volcker Rule was derided as “the worst of both worlds” by no less a critic than white collar crime expert Bill Black.
139Congress has tried 139 separate times to amend or repeal Wall Street reform in its first five years, according to Davis Polk & Wardwel LLP.
Even though Dodd-Frank isn’t even fully in place yet, lawmakers have been working doggedly to alter the package. While just five of the 139 pieces of legislation to repeal or modify the law have passed and been signed by President Obama, all of them have taken up congressional resources — and many have created forums for the very industry the law polices to come in and weaken key provisions.
The best example involves something called the “swaps pushout rule,” a regulation that sharply restricted how banks that rely on taxpayer-backed insurance could use complex, risky financial instruments known as swaps. The pushout rule was an example of how Dodd-Frank rulewriting could be used to give the law more teeth, rather than leaving it with nothing but gums. Reform proponents like Sen. Elizabeth Warren (D-MA) and Bush-era banking regulator Sheila Bair praised the rule for its toughness and simplicity. But then Citigroup lobbyists drafted legislation repealing it, Republican lawmakers got the bank-written repeal bill tacked onto an appropriations bill without even a recorded vote, and Democratic leaders ended up signing off on repeal of the rule because they weren’t willing to scuttle the so-called “cromnibus” spending compromise in December just to preserve the regulation. That win appears to have taught Republican lawmakers that they can chisel away at even the holiest, most broadly supported Wall Street reforms if they use must-pass budget legislation to do it.
$3.25 billionFinancial players have spent three-and-a-quarter billion dollars to influence the government since Dodd-Frank was passed.
The industry gave candidates and campaign groups $497 million to go out and win elections in the 2013–2014 midterm cycle, according to Americans for Financial Reform. In the 2011–2012 presidential cycle, industry campaign giving topped $669 million. That’s $1.166 billion in two cycles, with the giving skewed heavily in favor of the conservative candidates who lined up to assail the 2010 law.
And that’s only the first billion that finance, insurance, and real estate (FIRE) industry actors have shelled out to influence lawmakers since Dodd-Frank was born. FIRE companies have reported roughly $2.08 billion in lobbying expenditures from 2011 through the first half of 2015 according to Center for Responsive Politics data. That sum doesn’t even count Dodd-Frank lobbying by the U.S. Chamber of Commerce, which is categorized outside the financial industry in campaign finance data.
If financial industry spending since Dodd-Frank were a country, it would be the 158th largest economy in the world — bigger than Djibouti, Liberia, Samoa, and 27 other small developing nations.
5The five biggest banks control 44 percent of all U.S. banking assets — more than before Dodd-Frank was enacted.
In 1990, while the long, gradual tear-down of market protections that had helped prevent major financial collapses for decades was still in its infancy, the American banking industry was very diverse. No one institution was big enough to crash the whole party, and the five largest banks combined to hold about 9.7 percent of the banking sector’s total assets. By the time the crisis hit, the industry had consolidated so dramatically that the biggest five firms held well over a third of all banking assets. Their market share has continued to increase since Dodd-Frank became law. Today, they hold $4 out of every $9 in the entire industry. Decades of mergers and acquisitions allowed the financial sector to become dominated by a small number of firms, at the same time that deregulation of firms’ behavior allowed each of these mega-banks to place ever-larger, ever-riskier bets on everything from aluminum futures to interest rates to home loans. That creates the preconditions for a catastrophe — and the ongoing increase in market concentration since Dodd-Frank’s passage has led some to call for reinstating the old-fashioned divisions between commercial and investment banking that had forced banks to stay smaller in the past.