More on RoboSigning (WARNING: Language)

Here's an interesting case I picked up on at MacNN - some serious conflicts of interest questioned by a judge.

The "who does this person work for?" question is a good one.

More on ForeclosureGate

Interesting article/blog here with a good explanation of the difficulty in keeping a "chain of title" together.

Meanwhile, a nice link from the "Comments" of this piece: Robespierre on the justification of terror as a tactic. What?

Sheila Bair (FDIC Chief) on ForeclosureGate

More commentary when I can, but I just saw this and had to post before it disappeared into the noise.

Yep, this could turn out to be a big deal.

One point. She says that

"We know from experience that reducing the monthly payment through modification raises the chance that the borrower will make good on the loan."

We also know from experience that a large number of workouts (72% at BofA in 09) result in another workout.

Which is it?

Mark Pittman's Legacy: Treasury hides Citigroup Guarantee, Shows Bureaucracy in Action

The late Bloomberg reporter Mark Pittman will be remembered as the guy who sued the Fed and won. Eventually.

He's also the guy that found out about the $300 B in Citi securities that were guaranteed by the US Treasury. And he asked for more info about that.

This article's account of the back-and-forth after Pittman's death is priceless. It reads like a script to "Gilligan's Island" or for you Millennial types "Wizards of Waverly Place." Meh. When you read this, are you nervous about anything that the government might "certify" or "prosecute"? What a vacuum!

Finally, after hemming and hawing all this time, we're seeing Freedom of Information Act (FOIA) disclosures with huge gaps and deletions in them, useless for their original purpose: disclosure.

I'm not sure I agree that it's just an Obama Administration thing, but I'd bet that the White House could fix this with a couple of phone calls.

Barney Frank Knows Where the Money Is, Willie

Willie Sutton, the famous bank robber, didn't really say that he robbed banks because "that's where the money is..." Some reporter made that up.

However, ranking member and chair of the banking committee in the US House, Barney Frank, knows exactly where the money is (the bailout money) because he put it there. And he's been getting it back, too. Boston Herald reports today that he's gotten upward of $40k from big bank execs over the past year or so.

That shouldn't surprise you, but it might be worth your time to think about.

A Free Speech Moment: Juan Williams found out the hard way

And now a moment for politics & the value of free speech:

I grew up on NPR, listening almost every day throughout the turbulent 80s when Central America was exploding and we were fighting a secret war down there. I thought talk radio was the greatest, but then I started to realize that their view of the world was nothing like what I knew to be true. And they seemed to be quite intolerant to other views of things.

I mean, I didn't know anything about violence against nuns in Nicaragua, but I was pretty sure that there were other things going on in the world. Yet, day after day, all we heard about was the poor and downtrodden of the world, how evil Ronald Reagan was, and how important it was for all things to the Left of the political spectrum, etc.

I loved the local programming, and I volunteered and manned the phones at pledge time, but I came to find out that NPR is referred to as "People's Radio" for a reason. The entertainment is just that, but the news... well, that seemed too much like propaganda for me. So I quit getting my news from them some time in the early 90s. Too much politics for me. It just couldn't be that every cause was a liberal one.

Juan Williams found out that his opinion only counts as long as he sings the same verse of Kumbayah as the other folks around the NPR campfire. He's a bright guy, he should have known it was coming.

Mara Liasson is probably next.

The best part: the political hacks at mediamatters.org and NPR have shown themselves to be partisan morons. Again and again. Maybe the funding will dry up. After all, why do we need NPR shilling for The Left of Center when we have CNN, Time, MSNBC, etc.?

Take Control of Your Bankers

CFO Magazine for October has a cover story about dealing with relationships and bankers. Might be worthwhile reading - talks about the politics of lending, too.

What the Tea Parties are all about, WSJ

A good explanation of the "tea party" movement. Regardless, some folks will never get it, and will continue to characterize it as a fringe thing.

Women CEOs also have families. Who guessed? From WSJ

A new book reports that many women CEOs also have families, which kind of goes against common knowledge or expectation. Gives us all hope, doesn't it?

The Foreclosure Mess, from WSJ

We should probably stay on top of stuff like this, but it's really hard to do that with everything else going on.

As I mentioned in class the other night, the foreclosure mess is going to throw things into disarray with mortgage-backed securities AND homeowners who want home equity loans AND with people buying foreclosures. It isn't just a simple thing.

So now we can't trust any of our documentation -- anything can be challenged in court.

And believe me, it will be.

The Loss of Trust and the Great Unraveling to Come

Great article at Business Insider that echoes what I've said in class over the past two or three years.

The financial system runs on trust: trust that everyone has a fair deal, and that government regulates everyone the same way, and that we can trust other parties in a deal.

The latest financial scandal has undermined all of that. We cannot trust the rating agencies (first), we cannot trust regulators to step in when AIG creates too many Credit Default Swaps, or to regulate these at all, we cannot trust Congress with our middle-class housing, 401(k) or health care investments (or even Social Security, and we cannot trust the Oval Office to ask for legislation that people actually want. Ad Infinitum. You name it, the trust issues abound, as the psych types would say.

In any case, give this article a read when you can. Lots of insight there.

More Class - Stephen J. Cannell

The story arc limited series: Wiseguy. Stephen J. Cannell created the prototype for the cable drama with this series, and without persistence it wouldn't have happened.

He passed away on 9/29, but this article (with interview snippets) tells us why he should be remembered.

Hell, he should be remembered for Jim Rockford's answering machine messages, if nothing else.

Just classy

If you want to see what a lifetime of hard work, dedication, and good core values looks like, here's a piece at USA Today that gives it to you.

Condoleeza Rice is an amazing person. Just classy. Check it out.

Her favorite Led Zep song:

Black Dog.

Wow.

Just in case that got your blood going, here's some more Getting the Led Out for ya:

When the Levee Breaks

And from back in the UNC-Charlotte bar band days, a crowd favorite (our drummer, Ruffin Reynolds, had learned everything from playing along with Led Zep albums, so we played a lot of Zep - it was a no brainer with a good guitarist (Jon Koch) and drummer. We were always lucky that way).

The Ocean.

Give a man a fish vs. teach a man to fish

Patrick J. Buchanan, controversial commentator, has a piece at WorldNet Daily arguing that we've created a permanent underclass with Food Stamps. His numbers are hard to argue with - more money means more people on food stamps.

In fact, state and local governments have been going out of their way, the past two years, to find more and more eligible people. I've talked with friends of mine who've been approached, as have others in their communities. Working families who still qualify are signing up left and right.

Buchanan's piece comes at the end of a week where Mayor Bloomberg has suggested we keep food stamps from buying sugar drinks, and THAT'S been controversial. As an aside, I used to see that all the time in SC - shopping at Kroger, doing the weekly thing - I'd see folks in there using WIC cards to buy full carts full of pre-mixed fruit juice drinks, the kind that come in milk jugs. And the little kinds, and Hi-C, you name it. I remember that specifically because the clerk once told me how common that was, and I'd seen it before myself plenty of times. Always at the end of the month, it seemed. Also, it struck me because when I was growing up we had some of that, but never seemed to have enough.

Anyhow, check out Buchanan's latest screed. He may have a point, he certainly has numbers.

It WAS about Greed, now it's about Fear

Herr Doktor Greenspan (Crazy Al according to Don Imus) is back in the news today, in the Financial Times of the UK, with a piece about how FEAR is holding the economy back.

Ya think?

Remember, this is the guy who gave us "irrational exhuberance" a few years ago, and the market plummeted.

He also, most recently, pointed out how the financial crisis was caused by the failure of "counterparty surveillance." So much for market discipline, huh?

Intriguing alternative, and something new about Fannie and Freddie and Option Value

I hadn't thought about this before, but it makes sense. What if folks who did a short sale couldn't buy a house again for 2-5 years? Makes sense, because a short sale is essentially walking away from one's debt. Wouldn't that hurt the market, though?

What follows is a compelling argument because it includes an appreciation component, or an equity "kicker" as we term it in the finance bidness. Trouble is, banks can't own equity, so we'd have to find a third party for this part probably. Give it a read, though, it's neat.

In an email, Michael Lissack sent

The issue: Housing is killing the Economy

The Insight: Short Sales are Artificially Increasing Supply (lowers prices) with no offsetting increase in demand (further lowering prices)

Why? Most short sellers DO NOT want to sell their home they want to stay (if the payments were affordable) thus they are not looking for a new home absent being forced to sell short. Under Fannie and Freddie rules when they do sell short they are FORBIDDEN from BUYING for 2-5 years. Thus in Florida alone perhaps 500,000 to 1 million homes are artificially on the market and that same 500,000 to 1 million buyers are NOT in the market

The solution: Fannie and Freddie fund the transaction costs of converting short sales into debt-for-equity swaps (please see http://fixhousing.blogspot.com which explains how).

What happens: The existing loan is converted to three pieces: a loan for 80% of current value (which will be current since the homeowner will pay) on the same terms as the original loan, a zero-interest loan for 20% of current value (essentially the current equity above the 80% loan), a PARTICIPATION interest in future appreciation

Liquidity: the participations can be pooled and sold as securities, the zero interest loans can be pooled and sold as securities, once the 80% loans have been current for 12 months they too can be pooled and sold as securities

Immediate benefits: perhaps 2,000,000 homes exit the marketplace, and on those homes the mortgages will become liquid and performing in 13 months which helps the banks which wrote the loans

This is a BUSINESS solution to a business problem which has been corrupted by politics.

Consumer Bankruptcies up

Looks like some more chickens are coming home to roost. We'd have to know the demographics to be able to generalize, but a lot of resets on existing ARM teaser rates happened during spring and summer.

I wonder, too, how many of those are due to the drilling moratorium in the Gulf?

Graduate employability in UK

Interesting note in the ECCH blog today about characteristics that businesses in the UK look for in new hires and recent graduates. Check it out if you get time. The report is from Times Online, the blog itself is linked in the title here.

As always, the comments at the Times article are more fascinating than the piece itself. Just remember that anyone can write a comment, and they often do.