NightBlogger

The sexual favors, whistleblower intimidation, and routine fraud behind the fiasco that has triggered the global financial crisis.

Photo: Woodley

It may seem like ancient history now, but not long ago the mortgage industry was turning ordinary people into millionaires. One of them was Sharmen Lane, a high school dropout who, like many other young women during the boom, found her way into an obscure banking job with the clunky title “mortgage wholesaler.” Her experience—and the experiences of other wholesalers like her—offers a glimpse into the recklessness and indulgence that drove the industry to ruin.

Dozens of former brokers and wholesalers say the trading of sexual favors was so common that it came to be expected. Lane recalls one visit to a mortgage brokerage near San Jose (Calif.) in which the manager lewdly propositioned her in his office. She says she declined the advance, and he didn’t sell her any applications. But other female wholesalers didn’t have the same qualms about crossing the line. “Women who had sex for loans were known very quickly,” says Lane, who left New Century before it failed in 2007 and now works as a $200-an-hour life coach and motivational speaker in New York. “I didn’t want to be a mortgage slut.” More

Mr. Mortgage
The Wall St Journal ran a very thorough yet backward looking story on the state of CA real estate. They focus on Los Banos, a small farming community about 80 miles South of Silicon valley, which is another ’subprime central’. One important thing they leave out is the fact this is beginning to happen everywhere not just Los Banos and the Subprime epicenters. In all areas Notices-of-Default, the first stage to foreclosure are surging. This will lead to similar foreclosure epidemics in higher priced areas.

Values in the state have plummeted everywhere and you can use the ‘Subprime Implosion’ road map as a guide to what will happen to higher paper grades such as Pay Option ARMs, broader Alt-A, Jumbo Prime and finally Prime conventional sue to the negative equity effect and/or the exotic nature of said loans. Remember, what happened to Subprime borrowers with respect to payment adjustments is not unique to Subprime. Its just that Subprime ARM were mostly structured with 2-year teaser rate periods. The higher paper grades were structured longer such as 5-years.

As a matter of fact the most popular Alt-A, Jumbo Prime and Prime loan program type in CA from 2003 through 2005 was the 5/1 interest only that allows an interest only period for 5-years then adjusts to a fully amortized loan in most cases according to LIBOR, CMT or 1-yr Treasury yield plus a margin. Do the math…2003 to 2005 + 5-years = heavy adjustments coming from 2008 - 2010. Even though the payments won’t double on these loans like on Subprime, any payment increase when the value of your home is down 50%, you are underwater 30% and paying 60% of your gross income on debt is rubbing salt on the wound and grounds for many to walk.

Another very popular 5-year program was the now infamous Pay Option ARM, which has destroyed nearly every bank holding them. Below is their adjustment time. We can still get ahead of the major Pay Option implosion with proactive loan modifications but the banks just don’t want to play that way yet. They rather wait until the borrower defaults and then deal with it. The title of the Journal’s story is also misleading, sales are not improving they are getting worse. Below are my Sept existing and new home sales reports. More

Source: Yahoo News
Bailout Nation: More Govt. Control of JPMorgan, Citi, BofA Coming
Rather than resolving the crisis, the government’s plan to inject capital into big banks is “merely the appetizer and soup course” in what will ultimate be a multi-course meal, says Christopher Whalen, managing director at Institutional Risk Analytics.

So what does Whalen see as the main course? Greater government control, if not outright ownership, of the nation’s biggest banks, including:

* Citigroup, which Whalen says is the “riskiest” of the group because of its exposure to consumer loans.

* Bank of America, which faces more Countrywide-related litigation and keeps more of its loans in house, meaning it has “whole loan” risk.

* JPMorgan, which is heavily exposed to potential defaults by businesses and is what Whalen calls an “over-the-counter derivatives exchange with a bank attached.”

Whalen, lauded for forecasting the banking crisis when most others were sanguine, believes the U.S. banking system is going to face $250 billion to $300 billion in additional loan losses in the coming 6 to 9 months. In anticipation of such heavy losses, banks are now diverting capital into loan loss reserves rather than seeking to make new loans. So when policymakers and politicians say the taxpayer monies injected into the banks is going to be used to make loans, “they are lying to us,” Whalen says, using the kind of candor others are afraid of or can’t afford.

Dr. Ken Matto
The Truth Will Set You Free
Former Congressional Candidate, 6th District N.J.

“I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt.”

-Thomas Jefferson

Did You Ever Wonder Why The National Debt Keeps Going Up and Up?

One of the most ungodly and fraudulent institutions ever perpetrated on the American people and the world, is the Federal Reserve System which through deceit became the central bank of the United States in 1913. The idea came about on a meeting in Jekyl Island off the coast of Georgia in 1910. The bankers in this country, especially J.P. Morgan, created a currency panic in 1907 in order to get the American people to accept the idea of a central bank.

A central bank already existed in England from as far back as 1694. The Rothschilds completely dominate the banking system. It is estimated their wealth goes into the trillions.

Baron Nathan Mayer Rothschild boasted:

• “I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain’s money supply controls the British Empire, and I control the British money supply.”

The idea of a central bank is to so enslave the people of the country to a debt money system that you continue to collect taxes continuously which just covers the interest. The duped people of the United States are paying about $300 billion dollars per year to the IRS which is the collection agency for the Federal Reserve. By the way, the Federal Reserve is a privately owned bank with 10 private members. The Chase Manhattan Bank is a member which is owned by the Rockefellers who are Rothschild Agents. I will list the ten member banks at the end of this article..

At this point the citizens of the United States falsely owe these lemmings about 9 trillion dollars. Have you ever asked the following question?

WHO HAS THAT MUCH MONEY TO LOAN TO THE UNITED STATES?

History of Lies
During the time of the Babylonian captivity of Judah, a man named Jacob Egibi became the founding father of modern banking. While Judah was in captivity, Jacob began a business of loaning out money for a rate of interest. During the Reign of King Kandalanu of Babylon (circa 648-625 B.C.) a new phenomenon appeared on the scene which Jacob Egibi played a major part, and that was the invention of private banking. There were 2 prominent families at this time, they were the Egibi family and the Iranu families. These 2 families are not a figment of imagination as their names have appeared in many cuneiform tablets discovered by Archaeologists. It is believed that the Egibi family was taken with the first captivity into Assyria and then later migrated to Babylon. At the time of the 70 year captivity, Jacob Egibi already had an ongoing private banking business in which he collected large sums of interest. Now we have secular insight as to why many of the Jews did not want to return with Nehemiah to rebuild the temple at Jerusalem.

By the time of the end of the captivity, many of the others who were in captivity with the Egibi families learned this evil business practice and began to set up shop. A good example of this are the moneychangers which the Lord Jesus Christ threw out of the temple. As a friend of mine said to me many times, “Christ drove the moneychangers from the temple and was crucified 4 days later.”

During the time of the Persian period, loan sharking became a business where interest rates of anywhere from 30-50% were charged. As time went on, the writings of the Roman historian Tacitus, tells us that during the reigns of Caesar Augustus (27 BC - 14 AD) and Tiberius (14-32 AD) records of the Roman empire reveal deposits, withdrawals, brokers fees and loans. When the western Roman Empire fell, banking continued to thrive in Egypt, Byzantium, and the Arab nations of the Red Sea.

When the Christian era began to take hold and the church became a powerful entity, she returned to the Old Testament Edict of not charging usury and this idea continued up until the time of the Renaissance when banks began appearing across Europe. To show you how some kings despised usury, I offer 2 quotations:

…if any man is found taking usury, his lands will be confiscated, and he will be banished from England…

Alfred the Great, King of England; 849-901 A.D.

…If a man is found taking usury, his lands will be confiscated. It is like taking a man’s life, and it must not be tolerated…

James 1, King of England; 1566-1625 A.D. More

The Market Ticker

“The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in imports, an acceleration in exports, an acceleration in PCE, a smaller decrease in residential fixed investment, and an upturn in state and local government spending that were partly offset by a larger decrease in inventory investment.”

If only this was the truth.

Let’s dig in.

Buried in that release is the real outrage:

“Domestic profits of financial corporations increased $24.7 billion in the second quarter, compared with an increase of $37.3 billion in the first. Domestic profits of non-financial corporations decreased $46.9 billion in the second quarter, compared with a decrease of $32.1 billion in the first.”

Excuse me?

Do you actually expect me to believe that profits of financial corporations increased by $24.7 billion (or that they did so in the first quarter either)?

Am I smoking something or did not the financial sector report decreasing profits in the second quarter, and in fact, many reported absolutely stunning losses?

An increase on-balance? You expect me to believe that?

You must be joking.

Oh, they told the truth on the decrease in earnings from the rest of the business world in America:

Domestic profits of non-financial corporations decreased $46.9 billion in the second quarter, compared with a decrease of $32.1 billion in the first.

So we have a totally bogus “financial service profits” number which of course pumps reported GDP substantially.

If you’re interested in how Americans are doing, try this:

“Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 0.2 percent in the second quarter, compared with an increase of 0.1 percent in the first.”

Right. Including $160 billion in stimulus checks, which incidentally, is about 1% of GDP. So how much would it have fallen without spending $160 billion that we don’t have?

I’ll answer that, since the same page gives me a metric to use. 1.4 GDP points (percent) is $39.7 billion (so the BEA says); that is a 5.6% annualized “run rate” on GDP.

So GDP actually fell (using the cooked numbers) by 1.4% on an annualized basis in the second quarter, since taking $160 billion out of one hand and placing it into another didn’t actually change a thing (the government doesn’t have any money; they get it from you, so the “stimulus” should in fact be subtracted back out from any claimed “GDP” - but isn’t), and this assumes you believe the BEA’s “deflater” (inflation) number which is vastly different than the CPI reported elsewhere and that financial firms increased their profits in the second quarter! More

Moe Bedard
Fan & Fred: The Lies, the Cover Ups
Fannie Mae isn’t an ordinary company and this isn’t a run-of-the-mill accounting scandal. The U.S. government had no financial stake in the failure of Enron or WorldCom. But because of Fannie’s implicit subsidy from the federal government, taxpayers are on the hook if its capital cushion is insufficient to absorb big losses. Private profit, public risk. That’s quite a confidence game — and it’s time to call it.

Moe- Fannie Mae and Freddie Mac have failed and you, the tax payer, ARE bailing them out. I just wanted to make that loud and clear.

Were there warning signs that Wall Street and our government knew more than they led us to believe? This October 4, 2004 article in the Wall Street Journal did a great job of pulling the covers off Fannie Mae’s questionable accounting practices and Enron style way of doing business. It also verifies that there were more than enough warning signs of the impending implosion 4 years later.

WSJ 10/4/2004: Fannie Mae Enron?

For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility. Now, thanks to Fannie’s regulator, we know the answer.

The company was cooking the books. Big time.

We’ve looked closely at the 211-page report issued by the Office of Federal Housing Enterprise Oversight (Ofheo), and the details are more troubling than even the recent headlines. The magnitude of Fannie’s machinations is stunning, and in two key areas in particular they deserve to be better understood. By improperly delaying the recognition of income, it created a cookie jar of reserves. And by improperly classifying certain derivatives, it was able to spread out losses over many years instead of recognizing them immediately.

The facts are that Kenneth Lay and Enron were amateurs when compared to Fannie Mae and Freddie Mac. Enron was just politically connected. They weren’t pros like Fannie and Freddie who get a government implied “guarantee” to bail them out in case those cooked books FRY!

So, how did this all happen? How did we go 4 years with the writing clearly on the walls that these mortgage giants were BS’ing their shareholders, our government and the media? That’s easy to answer. MONEY! Fannie and Freddie have spent a combined total of $170 million in lobbying Washington since 1998 and 19.3 million in campaign contributions to well known Republicans and Democrats according to Politico. More

Silver prices are dropping like a rock, down to $12.50/oz., and yet, none of my trusted, major, regular dealers have any silver to sell. Tulving is sold out of all forms of silver. I’ve never seen that before. My guy in Rocklin is out. Amark is out. Mish in Menlo Park is out. Klaus in Denver is out. All those guys cannot find silver to buy from any other major dealer, and they are all very well connected in the industry. APMEX.com is sold out of most forms of silver….

CNI is out of 100 oz. bars and Eagles, but has other forms of silver. David Bond notes that when silver hit $21/oz. about 5 months ago, the excuse was that the dealers were out because silver hit new highs, and the public was buying, not selling. Now, since silver has hit new lows, the public is still buying and not selling.

For 5 months now, nobody has had 100 ounce silver bars in quantity, over 100 of them, available for immediate delivery. Well, that’s not true, there have been reports here and there of one such lot, on occasion. A mere 10,000 oz. has popped up from time to time. Once at tulving, once at CNI. They are both out now.

But for the most part, for most of the last 5 months, if you wanted 100 oz. silver bars, the wait would be 8-10 weeks from Johnson Matthey or NWT Mint, the only two places that make them anymore. During the last 5 months, Silver Eagles have been rationed by the U.S. Mint, who makes the excuse that they cannot find or source silver blanks fast enough, even though they are making twice as many this year than last year.

So, why are prices crashing when no silver is available? Manipulation. Lies. Paper games. I’ve covered this many times before in the last few years. More

Paul Craig Roberts
OpEdNews
The success of the Bush Regime’s propaganda, lies, and deception with gullible and inattentive Americans since 9/11 has made it difficult for intelligent, aware people to be optimistic about the future of the United States. For almost 8 years the US media has served as Ministry of Propaganda for a war criminal regime. Americans incapable of thinking for themselves, reading between the lines, or accessing foreign media on the Internet have been brainwashed.

As the Nazi propagandist, Joseph Goebbels, said, it is easy to deceive a people. You just tell them they have been attacked and wave the flag.

It certainly worked with Americans.

The gullibility and unconcern of the American people has had many victims. There are 1.25 million dead Iraqis. There are 4 million displaced Iraqis. No one knows how many are maimed and orphaned.

Iraq is in ruins, its infrastructure destroyed by American bombs, missiles, and helicopter gunships.

We do not know the death toll in Afghanistan, but even the American puppet regime protests the repeated killings of women and children by US and NATO troops.

We don’t know what the death toll would be in Iran if Darth Cheney and the neocons succeed in their plot with Israel to bomb Iran, perhaps with nuclear weapons.

What we do know is that all this murder and destruction has no justification and is evil. It is the work of evil men who have no qualms about lying and deceiving in order to kill innocent people to achieve their undeclared agenda.

That such evil people have control over the United States government and media damns the American public for eternity.

America will never recover from the shame and dishonor heaped upon her by the neoconned Bush Regime.

The success of the neocon propaganda has been so great that the opposition party has not lifted a finger to rein in the Bush Regime’s criminal actions. Even Obama, who promises “change” is too intimidated by the neocon’s success in brainwashing the American population to do what his supporters hoped he would do and lead us out of the shame in which the neoconned Bush Regime has imprisoned us.

This about sums up the pessimistic state in which I existed prior to the go-ahead given by the Bush Regime to its puppet in Georgia to ethnically cleanse South Ossetia of Russians in order to defuse the separatist movement. The American media, aka, the Ministry of Lies and Deceit, again accommodated the criminal Bush Regime and proclaimed “Russian invasion” to cover up the ethnic cleansing of Russians in South Ossetia by the Georgian military assault.

Only this time, the rest of the world didn’t buy it. The many years of lies–9/11, Iraqi weapons of mass destruction, al Qaeda connections, yellowcake, anthrax attack, Iranian nukes, “the United States doesn’t torture,” the bombings of weddings, funerals, and children’s soccer games, Abu Ghraib, renditions, Guantanamo, various fabricated “terrorist plots,” the determined assault on civil liberties–have taken their toll on American credibility. No one outside America any longer believes the US media or the US government.

The rest of the world reported the facts–an assault on Russian civilians by American and Israeli trained and equipped Georgian troops.

The Bush Regime, overcome by hubris, expected Russia to accept this act of American hegemony. But the Russians did not, and the Georgian military was sent fleeing for its life.

The neoconned Republican response to the Russian failure to follow the script and to be intimidated by the “unipower” was so imbecilic that it shattered the brainwashing to which Americans had succumbed.

McCain declared: “In the 21st century nations don’t invade other nations.” Imagine the laughs Jon Stewart will get out of this on the Daily Show. In the early years of the 21st century the United States has already invaded two countries and has been beating the drums for attacking a third. President Bush, the chief invader of the 21st century, echoed McCain’s claim that nations don’t invade other nations. http://news.bbc.co.uk/2/hi/europe/7556857.stm

This dissonant claim shocked even brainwashed Americans, as readers’ emails reveal. If in the 21st century countries don’t invade other countries, what is Bush doing in Iraq and Afghanistan, and what are the naval armadas and propaganda arrayed against Iran about?

Have two of the worst warmongers of modern times–Bush and McCain–called off the US/Israeli attack on Iran? If McCain is elected president, is he going to pull US troops out of Iraq and Afghanistan as “nations don’t invade other nations,” or is President Bush going to beat him to it?

We all know the answer.

The two stooges are astonished that the Americans have taught hegemony to Russians, who were previously operating, naively perhaps, on the basis of good will.

Suddenly the Western Europeans have realized that being allied with the United States is like holding a tiger by the tail. No European country wants to be hurled into war with Russia. Germany, France, and Italy must be thanking God they blocked Georgia’s membership in NATO.

The Ukraine, where a sick nationalism has taken hold funded by the neocon National Endowment for Democracy, will be the next conflict between American pretensions and Russia. Russia is being taught by the neocons that freeing the constituent parts of its empire has not resulted in their independence but in their absorption into the American Empire.

Unless enough Americans can overcome their brainwashed state and the rigged Diebold voting machines, turn out the imbecilic Republicans and hold the neoconservatives accountable for their crimes against humanity, a crazed neocon US government will provoke nuclear war with Russia.

The neoconservatives represent the greatest danger ever faced by the United States and the world. Humanity has no greater enemy.

This video is well worth watching.

The senate report is out and the proof is there. The Bush Administration LIED the USA into war in Iraq. McCain went right along with them.

liberaloasis.com
The NY Times today quotes a McCain campaign adviser defending the campaign’s performance because even though “the Republican Party brand is very, very badly damaged, … Senator McCain is running even or ahead of Senator Obama in most national polls.”

That is a false statement, which the Times did not correct.

I recently penned an op-ed for last Friday’s Omaha World-Herald about why the attacks on Obama have failed to derail his path to the nomination, and failed to deny him a clear lead against Sen. John McCain (Full op-ed below).

I led with the observation, “He beats Sen. John McCain in seven of eight major polls taken this month, with margins mostly between 5 and 7 points, and the most recent survey showing a 10-point lead.”

That assertion was based on leads reported in the following polls taken in May: More

Photo courtesy of azrainman
Pepe Escobar

Hillary won in Pennsylvania propped up essentially by old (second only to Florida) Catholic (40% of the vote) women (almost 60% of the vote). Blue-collar white men - “bitter” or not - also helped. Pennsylvania - even more rural than Ohio - is a state where the majority of voters (55%) have not even finished high school. What the throng outside Hillary’s victory rally made clear is what’s being confirmed by most polls. At least one in four Hillary voters are that stubborn; they will never vote for Obama if he clinches the nomination. Not only happy to use all the tricks in the Karl Rove slash and burn political playbook, thus committing a potential disaster inside the Democratic Party, Hillary had to extend her slash and burn approach to the Middle East.
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