“Quantitative easing” (QE) is a fancy, bullshit banker term for “We’re going to give free money to banks and it’s going to come out of your pocket.” Of course, as we all know by now, the money that was and is created as a part of QE (as well as all money in general) is created out of nothing; that is to say, one second the money didn’t exist, then a computer’s “Enter” key is pressed the next second, and suddenly the money exists in the next second! Like magic!
In other words, it’s fake, it’s a ruse. In fact, no less a source than The Economist magazine explains that QE is accomplished with “electronic cash that did not exist before.”
The money isn’t real, but the banks get to buy stuff with it. Mostly they just pay themselves bonuses with it.
So keep that in mind as you read this Zero Hedge article, because the $3.2 trillion could be created at any time to accomplish any of the things on this list–because all money is fake. But no,the $3.2 trillion was created simply to enrich the banks. Even though it could be done, $3.2 trillion will never be created to do the things on the list in this article:
“The Federal Reserve has spent over $3.2 trillion in the post-Crisis era. The bulk of this money printing has gone towards buying garbage mortgage securities or US Treasuries from Wall Street. Because we’ve reached a point in time at which $1 trillion no longer sounds like a lot of money, we thought we’d go through the exercise of assessing just what the Fed could have done with this money besides give it to Wall Street.
With $3.2 trillion, the Fed could have:
1) Mailed a check for $10,223 to every man, woman, and child in the US.
2) Bought back all of the US debt owned by China, Japan, Belgium as well as the debt acquired via investors through the Caribbean islands.
3) Bought all of France’s economy for a year (or the UK or Brazil depending on its preference) and still had $600 billion or more left over.
4) Performed leveraged buyouts of California and Texas.
5) Funded NASA for the next 188 years.
6) Treated every person on the planet to $200 five star dinners at one of New York’s top restaurants, along with a night’s stay in the Big Apple.
7) Bought every human being on earth a PlayStation 4 gaming console… and still had enough money left over to buy all of Peru and Ireland’s economies for a year.”
But that’s how this works–the rich get richer, and you…don’t. In other words, the banks get free money, and you get jack-ola–the big goose egg, zip, zero, zilch, nada, nothing…
NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Bank of America Corporation (NYSE: BAC).
On April 28, 2014, Bank of America announced a $4 billion downward revision of the Company’s previously disclosed regulatory capital due to an accounting error related to the Company’s 2009 acquisition of Merrill Lynch & Co. The Company further announced that the Federal Reserve Board has required the Company to resubmit its data templates and requested capital actions and directed that the Company suspend its plan to buy back more shares and raise its dividend. The Federal Reserve Board stated that, “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”
KSF’s investigation is focusing on whether Bank of America and/or its officers and directors violated state or federal securities laws.
NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Bank of America Corporation (NYSE: BAC).
On April 28, 2014, Bank of America announced a $4 billion downward revision of the Company’s previously disclosed regulatory capital due to an accounting error related to the Company’s 2009 acquisition of Merrill Lynch & Co. The Company further announced that the Federal Reserve Board has required the Company to resubmit its data templates and requested capital actions and directed that the Company suspend its plan to buy back more shares and raise its dividend. The Federal Reserve Board stated that, “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”
KSF’s investigation is focusing on whether Bank of America and/or its officers and directors violated state or federal securities laws.“
I can save Mr. Foti and company some time on that last point: yes, they have violated securities laws, particularly in regard to “mortgage-backed” securities. For example:
“Bank of America has agreed to pay $9.5 billion to the Federal Housing Finance Agency (FHFA) to resolve all residential mortgage-backed securities (RMBS) issues. It’s the largest settlement to a single regulator over misleading mortgage sales.
Under the terms of the settlement, Bank of America will make cash payments of about $6.3 billion to Fannie Mae and Freddie Mac. In addition, the bank will repurchase soured RMBS at fair market value, which is approximately $3.2 billion, says a bank statement.
The FHFA settlement resolves four lawsuits filed in September 2011 against Bank of America and its subsidiaries Countrywide and Merrill Lynch. The suits revolved around the false representation of mortgage loans and the underlying standards.”
Happy hunting, Mr. Foti! Hope you bag some big game…
NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Bank of America Corporation (NYSE: BAC).
On April 28, 2014, Bank of America announced a $4 billion downward revision of the Company’s previously disclosed regulatory capital due to an accounting error related to the Company’s 2009 acquisition of Merrill Lynch & Co. The Company further announced that the Federal Reserve Board has required the Company to resubmit its data templates and requested capital actions and directed that the Company suspend its plan to buy back more shares and raise its dividend. The Federal Reserve Board stated that, “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”
KSF’s investigation is focusing on whether Bank of America and/or its officers and directors violated state or federal securities laws.
NEW ORLEANS–(BUSINESS WIRE)–Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Bank of America Corporation (NYSE: BAC).
On April 28, 2014, Bank of America announced a $4 billion downward revision of the Company’s previously disclosed regulatory capital due to an accounting error related to the Company’s 2009 acquisition of Merrill Lynch & Co. The Company further announced that the Federal Reserve Board has required the Company to resubmit its data templates and requested capital actions and directed that the Company suspend its plan to buy back more shares and raise its dividend. The Federal Reserve Board stated that, “Bank of America must address the quantitative errors in its regulatory capital calculations as part of the resubmission and must undertake a review of its regulatory capital reporting to help ensure there are no further errors.”
KSF’s investigation is focusing on whether Bank of America and/or its officers and directors violated state or federal securities laws.
“Wages for millions of American workers, particularly those without college degrees, have flat-lined.Census figures show the median household income in 2012 was no higher than it was 25 years ago. Men’s median wages were lower than in the early 1970s.
Meanwhile, many of the expenses associated with a middle-class life have increased beyond inflation. This includes college tuition, whose skyrocketing cost has laid siege to a bedrock principle of the American Dream: that your children will do better than you did.”
Did you get that part about median household income? It is no higher than it was 25 years ago, back in 1987. That was when mullets ran free, “Happy Days” the TV show had ended just three years earlier, Ronald Reagan was still in office, and the Nixon Shock of 1971 was just 16 years old but already the financialization it caused was wreaking havoc on us in the form of Black Monday and the ongoing (at that time) S&L crisis.
So median household income hasn’t risen in 25 years, but debt has soared. As Charles Hugh Smith of “Of Two Minds” points out about wages versus debt since 1983:
“Wages also rose—but household debt rose at a much higher rate than wages.“
See the link for a chart showing this; Smith goes on to point out that “wages tripled but household debt rose sevenfold.”
So what’s the solution? Financialization has to be undone. Crony capitalism–a more pleasant term for fascism–must be dismantled. Or we could try the most egalitarian, radically equalizing solution of them all–self-issued currency. The first reaction to such an idea might be to recoil in horror and protest that such a thing would be unworkable, but as an article at The Air Standard points out:
” …keep in mind that all money is fictional. In fact, all money is already self-issued, as will be shown below. Money must be created by someone, somewhere, because money does not exist in nature–except to the extent that a natural item like gold or salt might be assigned the properties of money.”
How is money currently self-issued? The article explains:
“The Federal Reserve itself tells us that “banks actually create money when they lend it.” The emphasis in that little nugget is on the role of the bank in the money-creation process, but that emphasis is completely misplaced. That’s because what is implied in that statement is that for a bank to “create money,” someone first has to come to the bank and ask to be lent money. In other words, a bank is powerless to “create money” unless a “borrower” comes along.
Now, how does the all-important “borrower” get money from the bank? The borrower writes a check for the amount requested, signs his name, and presents it to the bank. This check (which is one form of a “note”) is called a “promissory note” in modern parlance (and, to be sure, in less-than-modern parlance), but in reality, the “borrower” is self-issuing the currency he needs, yet he is being forced by law to treat his self-issued currency as though it were issued by the bank (and then having to “pay back” the bank with interest)! In fact, when you think about it, the ramifications of this completely typical scenario are absolutely insane: the bank doesn’t have the money to lend the borrower until the borrower–who also “doesn’t have the money”–writes the check (i.e., the “promissory note”) to the bank to create the money, which is then called a “loan” from the bank to the borrower.”
This is not crazy talk, either. All of this was recently confirmed by a press release from the Bank of England, which described the way banking works not just in England but also in the United States:
“When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.”
As David Graeber (author of the seminal “Debt: The First 5,000 Years) pointed out in an article about the Bank of England press release:
“There’s really no limit on how much banks could create, provided they can find someone willing to borrow it.”
It’s an idea whose time has come: cut out the middleman who creates fake money and let each individual create his/her own fake money. No more financialization=no more inequality. Simple as that.
Oh, and happy Cinco de Mayo! Don’t let your margarita consumption make you forget that we have to end financialization ASAP!
So Mary McCulley is posting on Facebook again! Well, not actually Mary, but a friend of hers, who posted this:
“Truth is no longer the soul of justice because justice no longer has a soul.” — Mary McCulley, May 1, 2014 Great Falls, MT
Very apt quote. If truth had anything to do with justice anymore, here’s 7 asshats that should be in jail (you or I most certainly would be if we had done these things) instead of Mary McCulley:
5. US Bank’s Richard K. Davis: His bank is the reason Mary is in jail to begin with.
6. Bank of America’s Brian T. Moynihan: Again, hard to pick just one reason. OK, not that hard:
“Bank of America has agreed to pay $9.5 billion to the Federal Housing Finance Agency (FHFA) to resolve all residential mortgage-backed securities (RMBS) issues. It’s the largest settlement to a single regulator over misleading mortgage sales.
Under the terms of the settlement, Bank of America will make cash payments of about $6.3 billion to Fannie Mae and Freddie Mac. In addition, the bank will repurchase soured RMBS at fair market value, which is approximately $3.2 billion, says a bank statement.
The FHFA settlement resolves four lawsuits filed in September 2011 against Bank of America and its subsidiaries Countrywide and Merrill Lynch. The suits revolved around the false representation of mortgage loans and the underlying standards.“
7. MF Global’s John Corzine: Simply put, he stole over a billion dollars from his own customers. Taibbi sums it up:
“Nobody disputes the fact that MF Global officials dipped into customer accounts and took over $1.6 billion of customer money. We not only know that company officials reached into customer accounts, we know they brazenly lied to bondholders, ratings agencies and investors about the firm’s financial condition (“MF Global’s capital and liquidity has never been stronger,” wrote the CFO of MF Global’s holding company, on the same day Moody’s downgraded it to junk status).”
So none of these people go to jail, but Mary McCulley does. Did Mary steal a billion dollars? No. Did she lie to investors and rig markets, essentially stealing money? No. All she’s in jail for is trying to get information out of some title company hack. Only one solution, one way to make it right: #FreeMaryMcCulley.
So it’s International Worker’s Day…to paraphrase D. Boon from the video above, I’ll put it in simple words why working men (and women) are (or should be) pissed…
1. Banks got bailed out by workers while banks continue to prey upon workers. This predation takes a number of forms, with one of the most egregious being the rampant foreclosure fraud.
2. Banks get free money while workers have to actually perform labor for theirs. This works in a number of ways, with two of the most galling being: a) the fact that banks can create money out of thin air–without having to perform any labor or take any risk at all and b) quantitative easing (QE), which is a gift of money (i.e., bailout) from the central bank to commercial banks. Of course this money is also created out of thin air with no labor involved and no risk being taken, and that lays the groundwork for the ultimate form of moral hazard. Don’t believe that this is money created from nothing? If you won’t believe me, you might believe The Economist magazine, which explains QE thusly:
“To carry out QE central banks create money by buying securities, such as government bonds, from banks, with electronic cash that did not exist before. The new money swells the size of bank reserves in the economy by the quantity of assets purchased—hence “quantitative” easing.”
3. Wages are stagnating while inflation continues to explode. Here’s how the Washington Post put it:
“Wages for millions of American workers, particularly those without college degrees, have flat-lined. Census figures show the median household income in 2012 was no higher than it was 25 years ago. Men’s median wages were lower than in the early 1970s.
Meanwhile, many of the expenses associated with a middle-class life have increased beyond inflation. This includes college tuition, whose skyrocketing cost has laid siege to a bedrock principle of the American Dream: that your children will do better than you did.”
“Twenty-six of the most powerful American corporations – such as Boeing, General Electric, and Verizon – paid no federal income tax from 2008 to 2012, according to a new report detailing how Fortune 500 companies exploit tax breaks and loopholes.”
5. Having a job does not mean you can afford to live. This is referred to as being “working poor.” Salon sums up the situation pretty well here:
So I wrote a new song inspired by current events. My wife says it sounds like The Monkees–OK, I can live with that. I was going for a Clash-meets-Archies type sound (check the tambourine and oohs and ahs), for what that’s worth. Anyway, I thought it might be fun to provide some links to the things mentioned in the lyrics, so away we go…
1st VERSE
“They won’t let you live in your house”
This line is of course inspired by the foreclosure fraud that has run rampant across the country for the last several years, reaching more than 7 million foreclosures since 2006. If you assume that families of four occupy all these homes, that’s 28 million people directly affected by the situation. That’s approximately 10% of the entire population of the U.S. (give or take 314 million as of 2012).
However, as we have covered here (i.e., “Who Owns What: Banks And The New Feudalism“) and has been covered very well in other outlets, the foreclosing entities don’t own these properties even though they claim in court that they do (i.e., “Conspiracy Fact, Not Theory: Wells Fargo’s Manual“) In other words, homeowners are being thrown out of their own houses on the strength of forged documents, hence “They won’t let you live in your house.”
“For months now, Mr. Smith has feared he might lose his current home, which is stationed on a street near a quiet Palo Alto park. An ordinance passed by Palo Alto last year would punish people cited for living in a vehicle with as much as a $1,000 fine or six months in jail. ”
“A ban on homeless people sleeping on the streets has overwhelmed Phoenix social-service agencies, forcing up to 250 people a night to bed down in a makeshift camp in a parking lot next to the downtown Human Services Campus.”
“City Supervisor Scott Wiener has proposed legislation to close down San Francisco’s parks and plazas between the hours of midnight and 5am. If passed, the law would primarily impact the city’s 6,436 homeless people, many of whom find respite in the parks at night.
Sleeping in parks is already prohibited, but that regulation is not strictly enforced. If Wiener’s proposal is ultimately enacted, it could refocus efforts on sweeping homeless people out of parks and give police another tool to crack down on their presence.”
For the millions who have lost their homes to foreclosure, or are still losing their homes to the “too big to fail” banks, Mary McCulley is a hero. In February she stood up to those who caused the fraud which led to her foreclosure–and won. She obtained a $6 million award–including punitive damages—against US Bank.
Yet on April 25, 2014, Mary was forcibly hauled off to federal prison for accusations by former American Title Land Company’s Tom Cahill. Based solely on Cahill’s word, Mary was sentenced to one year in Federal Prison, plus another year of very harsh probation. She was immediately taken away by Federal Marshalls, and reported severe bruising after being roughed up. Mary is 56 years old.
On February 7, 2014, US Bank was found guilty in a jury trial of fraudulently foreclosing on Mary’s home. The jury found proof U.S. Bank swapped her loan using forged and altered loan documents.
When Mary learned her loan was swapped and her deed was forged, she reported it to the local police. When they did nothing, she reported it to the FBI. When they failed to act, she sued.
After months and months of having her case thrown out and getting nowhere, Mary was left to investigate her own fraud. Cahill was deposed by Mary in her civil lawsuit.
After that—and shortly before her trial against US Bank—Cahill suddenly contacted the FBI and accused Mary of “impersonating an FBI agent”—though she denies she ever did.
To many fighting the banks, this is an example of the kind of abuse they must endure. These charges against Mary should have been thrown out. Instead, while those responsible for forging Mary’s loan and almost causing her to successfully commit suicide go free—Mary sits in Federal Prison.
Before Mary gets transferred to a Federal Prison, her attorney will go before the judge one last time on April 28th to request another review of Mary’s case. Mary has a SHOT at getting out of prison to be with her mom, who has Alzheimer’s.
Mary McCulley was sent to jail yesterday because supposedly she is a “public risk” and doesn’t “respect the law”:
“BUTTE – A federal judge chose to give a Kentucky woman a longer prison sentence than recommended after concluding that her impersonation of a federal officer and threatening behavior showed her to be a public risk.
U.S. District Judge Sam. E. Haddon sentenced Mary Ann McCulley, 54, to one year in federal prison and one year of probation for impersonating a federal officer.”
Meanwhile, great respecters of the law like Jamie Dimon, Lloyd Blankfein, Brian T. Moynihan, and Richard K. Davis walk free.
That last name in the list of bank CEOs–Richard K. Davis–is the CEO of US Bank, against whom McCulley recently was awarded $6 million dollars in punitive and actual damages. The judge in her case recently denied US Bank’s motion to reduce the damages.
“…[McCulley] had her loan changed by U.S. Bank without her knowledge, from a $300,000 30-year loan to a $200,000 loan due in 18 months, and in documents submitted to the court, U.S. Bank included four separate loan applications with different terms.”
This led McCulley into a years-long legal battle with US Bank, during which she basically lost everything and even attempted suicide. She attempted to get the FBI and other government agencies to help her, but they wouldn’t.
So it is absurd for the judge to now accuse her of “taking the law into her own hands”–what choice did she have? If she didn’t do what she did, she would’ve lost her case and US Bank’s criminal behavior wouldn’t have been revealed. Which of course is the point of this witch hunt against McCulley–they don’t want their crimes brought into the light.
Banks, not the people, are the real threat to society
Ultimately, this sentence is not about McCulley, even though she surely is the one who will have to do the time. This sentence is about sending a warning to all of us: don’t challenge the banks, because they are terrified that we will beat them like McCulley did. And that is what they don’t want. They don’t want their fraud system challenged. They want you to just lay down and accept it.
Mary McCulley didn’t, and she is now paying the price. But they can’t put us all in jail. Which is where they want us, because it is the banks who are the real threat to society and to public safety. It is the banks, not the Mary McCulleys of the world, who brought the world into financial ruin and have driven millions into homelessness, poverty, bankruptcy, and suicide.
It’s completely backward: the non-threat to society is put in jail while the actual threat to society goes free. Timothy Racicot, the Assistant U.S. Attorney said she needs to “respect the law.” Oh, like US Bank “respects the law?” This is madness…
Indeed, these will be hearings (if and when they happen) on financial faux pas, not financial terrorism–and the second kind is the kind we need…
Having new hearings on the Independent Foreclosure Review–which was abruptly ended by a settlement in January 2013–sounds like a good idea. That’s the story making the rounds today, that Elijah Cummings is asking Darrell Issa (who was my congressman until re-districting) to have hearings on why the IFR was abruptly ended:
“Rep. Elijah Cummings (D-Md.) sent a letter Thursday to committee chairman Darrell Issa (R-Calif.) requesting a hearing on “widespread foreclosure abuses” documented in records his staff recently received from the Office of the Comptroller of the Currency (OCC).“
That last part is what is most disingenuous. That is, we are to believe that Cummings and his cohort were not aware of “widespread foreclosure abuses” until the OCC coughed up some records recently? Come on–spare me the dog and pony show.
Hearings will be a whitewash–as per usual
Any new hearings will essentially be a whitewash. What can we possibly learn from these hearings that we don’t already know about “widespread foreclosure abuses?” The hearings will be a great platform for grandstanding by Elizabeth Warren, who certainly knows how to give the bankers hell:
“Sen. Warren: All right, so let me ask it from the other point of view. You now have evidence in your files of illegal activity, I take it, for some of these banks. I get that from the evidence you’ve released about the charts, who’s going to get paid what, so if someone believes that they have been illegally foreclosed against, will they still have a right under this settlement to bring a lawsuit against the bank?
Mr. Stipano, OCC: Yes.
Sen. Warren: All right. Now, if a family wants to bring a lawsuit, you’re both lawyers, would it be helpful, if you’re going against one of these big banks, would it be helpful for these families to have the information about their case that’s in your files. Mr. Ashton?
Mr. Ashton, Fed: It would be helpful, obviously, to have information related to the injury, yes it would.
Sen. Warren: Okay. So, do you plan to give the families this information? That is, those families that have been victims of illegal foreclosures, will you be giving them the information that’s in your possession about how the banks illegally foreclosed against them? Mr. Ashton?
Mr. Ashton, Fed: I think that’s a decision that we’re still considering. We haven’t made a final decision yet.
Sen. Warren: So you have made a decision to protect the banks, but not a decision to tell the families who were illegally foreclosed against?
Mr. Ashton, Fed: We haven’t made a decision about what information we would provide to individuals, that’s true, yes.
Sen. Warren: Mr. Stipano?
Mr. Stipano, OCC: Same position.
Sen. Warren: So, I just want to make sure I get this straight. Families get pennies on the dollar in this settlement for having been the victims of illegal activities or mistakes in the bank’s activities. You let the banks – and you now know individual cases where the banks violated the law, and you’re not going to tell the homeowners, or at least it’s not clear yet whether or not you’re going to do that?”
Remember that great exchange? That was over a year ago–April 11, 2013. So did the Fed and OCC give info to foreclosed families as a direct or indirect result of this hearing? I haven’t gotten any such info, nor has anyone I know.
For some time, Cummings and Warren have wanted the records that have now apparently been delivered to Cummings–over a year after the request, which was made on January 31, 2013:
“U.S. Senator Elizabeth Warren and Representative Elijah Cummings want bank regulators to produce documents to show what led them to reach settlements this month with 13 mortgage servicers for faulty foreclosures.
‘It is critical that the OCC and the Federal Reserve disclose additional information about the scope of the harms found to establish confidence in the sufficiency and integrity of the settlement,’ the lawmakers, both Democrats, wrote in a letter dated today to Fed Chairman Ben S. Bernanke and Thomas Curry, head of the Office of the Comptroller of the Currency.”
This is great and everything, but put the bankers in jail already
I don’t want to sound too cynical, but while this is nice and all, it’s taking too long. Dragging this out doesn’t help homeowners or the country. It only helps bankers. It sounds like the records that Cummings received were unaceeptable, but again, nothing we (and he) didn’t already know:
“Cummings said the records the committee reviewed brings those concerns into focus. OCC records showed that the consultants hired to review foreclosure files identified high rates of banks charging excessive fees, failing to process requests for lower mortgage payments and illegally kicking homeowners in bankruptcy out on the street, according to Cummings, who would not provide the confidential documents for review.
In one example, Promontory Financial found errors in 60 percent of the loan modifications conducted by Bank of America. The consulting firm also uncovered similar problems in 21 percent of the cases it initially reviewed for PNC Bank, according to Cummings.
‘It is unclear why the regulators believed it was in the best interests of borrowers to end the IFR when high error rates were identified during preliminary reviews, and more detailed reviews had been prepared to identify the full extent of harm,’ Cummings wrote in his letter to Issa.”
So yeah, that stuff is not good, but it’s namby-pamby compared to the massive, wealth-transferring fraud that went on and continues to this day. It doesn’t come close to touching or even pretend to come close to touching the unmitigated and outright fraud perpetrated against someone like say, Mary McCulley, who as David Dayen notes:
“…had her loan changed by U.S. Bank without her knowledge, from a $300,000 30-year loan to a $200,000 loan due in 18 months, and in documents submitted to the court, U.S. Bank included four separate loan applications with different terms.”
You see what I’m saying? Mary McCulley-level fraud is the type of thing you have a hearing about, not excessive fines of a few hundred dollars. That trivializes the seriousness of the foreclosure fraud issue. So yeah, Cummings wants to have hearings about excessive fines, but the McCulley-level stuff will never be discussed. They run–fast–from that shit. Because discussion of McCulley-level stuff would necessitate a re-evaluation of the entire system, and they don’t want that. Indeed, these will be hearings (if and when they happen) on financial faux pas, not financial terrorism–and the second kind is the kind we need…
If the hearing Cummings is requested is held, the reporting that will come out of it will be along these lines: “Well, charging excessive fines is not good, but that doesn’t mean bankers should go to jail or anything–that’s kind of extreme and people that don’t like the banks are therefore extremist.” It writes another chapter in the anti-homeowner book of conventional wisdom entitled “How Homeowners Caused The Foreclosure and Financial Crisis”: this chapter will be one about how excessive fees are bad, sure, but not as bad as buying too much house and that ultimately if the banks are at fault for anything, it’s trying to do too much to help homeowners and the excessive fees were just a way to make sure they didn’t lose too much money.
Having said that, I hope I’m wrong about all this…
In a new Salon article, David Dayen eloquently sums up root cause of the new feudalism, which is being helped along by the federal government and federal courts:
“Many focus on how the failure to prosecute financial crimes, by Attorney General Eric Holder and colleagues, create a lack of deterrent for the perpetrators, who will surely sin again. But there’s something else that happens when these crimes go unpunished; the root problem, the legacy of fraud, never gets fixed. In this instance, the underlying ownership on potentially millions of loans has been permanently confused, and the resulting disarray will cause chaos for decades into the future, harming homeowners, investors and the broader economy. Holder’s corrupt bargain, to let Wall Street walk, comes at the cost of permanent damage to the largest market in the world, the U.S. residential housing market.
By now we know the details: During the run-up to the housing bubble, banks bought up millions of mortgages, packaged them into securities and sold them around the world. Amid the frenzy, lenders failed to follow basic property laws, which ensure legitimate transfers of mortgages from one legal owner to another. When mass foreclosures resulted from the bubble’s collapse, banks who could not demonstrate they owned the loans got caught trying to cover up the irregularities with false documents. Federal authorities made the offenders pay fines, much of which banks paid with other people’s money. But the settlements put a Band-Aid over the misconduct. Nobody went in, loan by loan, to try to equitably confirm who owns what.“
Who owns what–that’s the question, right? Well, that’s the thing, you see. That’s where all of this has been going for some time. They have let us have our fun–“they” being the banks, the financiers, the 1%, whatever you want to call them.
They let us have our little “Constitution” and our “property rights” and the rest of it. Or so we thought. While we weren’t looking, though, they enslaved us in that “freedom.” There aren’t any debtor’s prisons in America anymore? Think again–the entire country is a debtor’s prison.
And so the question of “who owns what” is now being decided–in favor of the banks. They’re going to own it all–through fraud like MERS and horrible court decisions–and we’re going to be the serfs. Hell, we already are the serfs. And “who owns what?” The lords own everything. The velvet glove is coming off the iron fist.
It’s feudalism. Everything old is new again. Meet the new boss, same as the old boss. And the “government?” The banks are the government. Dick Durbin confirmed that in no uncertain terms:
You hear that? Durbin says, “[the banks] frankly own the place.” And that’s the name of the game, isn’t it–ownership? As we’re seeing, that’s how ownership is being resolved in the courts: the banks own everything, the people own nothing, despite the litany of well-known fraud and wrongdoing that Dayen points out above.
The question of who owns what is being decided, right now, and the decision is almost unanimously in favor of the banks, not the people. And that’s not an accident. It’s the new feudalism, and it based on nothing more than paper, as Dayen points out in his conclusion:
“If you or I pick the lock on a house and try to steal everything in it, we’d probably go to jail. But if I were a bank, and I wrote down on a piece of paper that I simply owned that house, I’d get away with it. That’s the sad legacy of trying to cover up massive fraud instead of dealing with it.”
LIBERTY ROAD MEDIA 