Tuesday, October 26, 2010

The Monster: : How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America--and Spawned a Global Crisis

Great read - I plan on buying this book but here is an excerpt (long). I like that this writer is putting some human faces on the whole financial meltdown.

by Michael W. Hudson, The Center for Public Integrity

Bait and Switch

A few weeks after he started working at Ameriquest Mortgage, Mark Glover looked up from his cubicle and saw a coworker do something odd. The guy stood at his desk on the twenty-third floor of downtown Los Angeles’s Union Bank Building. He placed two sheets of paper against the window. Then he used the light streaming through the window to trace something from one piece of paper to another. Somebody’s signature.

Glover was new to the mortgage business. He was twenty-nine and hadn’t held a steady job in years. But he wasn’t stupid. He knew about financial sleight of hand—at that time, he had a check-fraud charge hanging over his head in the L.A. courthouse a few blocks away. Watching his coworker, Glover’s first thought was: How can I get away with that?

Read the rest of the excerpt here...

Monday, October 25, 2010

Mortgage Gate 101

As a few know, I do follow the markets and most recently, one of the primary causes of 2007-2008 crisis is once again peeking out from under the rug. Peeking may not be the right word - it is gathering momentum - more like a tsunami. And it is important because it could bring down a few big banks and therefore the market. And like it or not, the U.S. is still the dominant player in the global economy so what happens there will affect you regardless of where you live.

The mortgage mess (that had been swept under the rug in 2008) is unravelling on several different fronts. I saw an article today alluding to two fronts but I think they are at least three.

First, the front that has gotten the most ink from the Main Stream Media (MSM) has been that individual home owners may have been improperly foreclosed upon because banks have forged documents such as affidavits and in some cases even signatures. Bigger than that is that the banks didn't follow the law which requires them to transfer the original paper (more on why they couldn't do that later). Some commentators have tried to pass this off as sloppy paperwork but it is fraud. There should not be two different standards - one for individuals and one for corporations.

The second front relates more to the origination of these loans and may be the most damaging. Banks sliced and diced these mortgages and stuck them into these complex financial products - mortgage backed securties (MBS). Luckily I found a great vid that cuts to the chase and explains what the banks did at a high level:

Why is this big - these loans were sold to mutual funds, pension funds and foreign institutions under false pretenses. A few of these third parties have already started lawsuits and I'm sure more are to come. For some reason the word fraud once again comes to mind.

The third front relates to local and state taxes. The fact that these banks didn't legally transfer all the paper work means they may have been skipping out on paying local taxes and fees.

A tsunami is the correct word - I'm not making any predictions except I think we are in for stormy weather for the next few months.

Wednesday, October 20, 2010

You will take my healthcare from my cold dead hands ...

You will take my healthcare from my cold dead hands ...

I haven't written for a while and was going to do an update on the global economic situation including some explanation of the whole fraudclosure issue - fun!

But then I noticed that MarketWatch was running a special report on Canadian healthcare. Headlines include

Canada at the crossroads
Limited opportunities
The long wait

Reading the content of these articles and some of the comments pissed me off. Typical Canadian health care bashing (yes we are all commies!)  I finally had to register to post a comment (yes I was a little angry):

As a Canadian who has lived in the US,, experienced the hell of an HMO and soon after decided to pay the extra fees for a PPO (because I could afford it as a single person) and also saw many, many not covered at all - not going to happen in Canada.

As you noted - your initial article said that the majority of Canadians, regardless of complaints about wait times, etc, would not give up our current system - so please move along and figure out what you are going to do about your bankrupt banks. I knew I should have shorted BAC!

I thought for sure I would be trashed - actually pretty sure my comment will be - but .... I was heartened by the first response to my comment:

couldn't have said it better. I don't give a rats behind what the US thinks of the Canadian system. If you don't like socialized medicine keep using your system, it seems to work really well (!) 

Regardles of what the republican media says EVERY comprehensive health care study done since the 70's has shown that Canada's system ranks near the top in quality (usually just behind Sweden, Norway) and almost always ranked higher than the US. Read the last 10 years worth of OECD reports on health care if you want non-biased numbers based facts. 

It works well, the majority people like it, and it is cost effective.

Why is Marketwatch running this story now? I would like to know why the Canadian Health Care system and all its woes is being featured on Marketwatch when there are so many more interesting domesstic stories to look at.

Monday, October 11, 2010

Catching Up

I haven't posted for a while for a number of reasons - mostly work-related. Now, that it is fall, I'm looking forward to catching up. And there are tons of things I want to write about. I am going to start posting at least twice a week but for now ....

Will catch up soon -:)