Revolt of the Rich:Our financial elites are the new secessionists.

This article is a MUST read

It was 1993, during congressional debate over the North American Free Trade Agreement. I was having lunch with a staffer for one of the rare Republican congressmen who opposed the policy of so-called free trade. To this day, I remember something my colleague said: “The rich elites of this country have far more in common with their counterparts in London, Paris, and Tokyo than with their fellow American citizens.”

That was only the beginning of the period when the realities of outsourced manufacturing, financialization of the economy, and growing income disparity started to seep into the public consciousness, so at the time it seemed like a striking and novel statement.

At the end of the Cold War many writers predicted

Charles Schwab and the Federal Home Loan Bank of Chicago sue Citigroup

http://finance.yahoo.com/news/Banks-Brace-for-Costly-Fights-nytimes-2170039967.html?x=0&sec=topStories&pos=7&asset=&ccode=

Yeah the INVESTORS know that the banks have committed FRAUD and embezzled money from them,
But somehow NO ONE in the Government can see any crime that has been committed.
WHY?
Because they are complicit in the banks actions up to their eyeballs.
They can't even smell the aroma of the crap anymore because their noses are to far buried up the banking industries ass, with the private banking entity called the FED, being the ultimate ass Master that they will continue to allow the country to be stimulated by.


Updated Even as investors put aside their worries on Friday about the effect of the foreclosure mess on bank stocks, new signs emerged of what is likely to be a long and expensive legal battle for the financial services industry over mortgages gone bad.

Citigroup disclosed in a regulatory filing that it was being sued by several investors, including Charles Schwab and the Federal Home Loan Bank of Chicago, in an effort to force Citigroup to buy back soured mortgages that the investors contended did not conform to proper underwriting standards.

Meanwhile, Wells Fargo said in a filing that it "cannot estimate the possible loss or range of loss" from these cases, and Bank of America said in a filing that investors holding $375 billion worth of mortgage securities had filed similar suits.

In a separate announcement, however, Bank of America said a lawsuit brought by

Citigroup being sued by Schwab and the Federal Home Loan Bank of Chicago,

http://finance.yahoo.com/news/Banks-Brace-for-Costly-Fights-nytimes-2170039967.html?x=0&sec=topStories&pos=7&asset=&ccode=

Yeah the INVESTORS know that the banks have committed FRAUD and embezzled money from them,
But somehow NO ONE in the Government can see any crime that has been committed.
WHY?
Because they are complicit in the banks actions up to their eyeballs.
They can't even smell the aroma of the crap anymore because their noses are to far buried up the banking industries ass, with the private banking entity called the FED, being the ultimate ass Master that they will continue to allow the country to be stimulated by.


Updated Even as investors put aside their worries on Friday about the effect of the foreclosure mess on bank stocks, new signs emerged of what is likely to be a long and expensive legal battle for the financial services industry over mortgages gone bad.

Citigroup disclosed in a regulatory filing that it was being sued by several investors, including Charles Schwab and the Federal Home Loan Bank of Chicago, in an effort to force Citigroup to buy back soured mortgages that the investors contended did not conform to proper underwriting standards.

Meanwhile, Wells Fargo said in a filing that it "cannot estimate the possible loss or range of loss" from these cases, and Bank of America said in a filing that investors holding $375 billion worth of mortgage securities had filed similar suits.

In a separate announcement, however, Bank of America said a lawsuit brought by

Banks Brace for Costly Fights Over Mortgage Mess

http://finance.yahoo.com/news/Banks-Brace-for-Costly-Fights-nytimes-2170039967.html?x=0&sec=topStories&pos=7&asset=&ccode=

Yeah the INVESTORS know that the banks have committed FRAUD and embezzled money from them,
But somehow NO ONE in the Government can see any crime that has been committed.
WHY?
Because they are complicit in the banks actions up to their eyeballs.
They can't even smell the aroma of the crap anymore because their noses are to far buried up the banking industries ass, with the private banking entity called the FED, being the ultimate ass Master that they will continue to allow the country to be stimulated by.


Updated Even as investors put aside their worries on Friday about the effect of the foreclosure mess on bank stocks, new signs emerged of what is likely to be a long and expensive legal battle for the financial services industry over mortgages gone bad.

Citigroup disclosed in a regulatory filing that it was being sued by several investors, including Charles Schwab and the Federal Home Loan Bank of Chicago, in an effort to force Citigroup to buy back soured mortgages that the investors contended did not conform to proper underwriting standards.

Meanwhile, Wells Fargo said in a filing that it "cannot estimate the possible loss or range of loss" from these cases, and Bank of America said in a filing that investors holding $375 billion worth of mortgage securities had filed similar suits.

In a separate announcement, however, Bank of America said a lawsuit brought by

Citigroup Call On Implications On Foreclosure Crisis: "Just The Tip Of The Iceberg"

http://www.zerohedge.com/article/citigroup-call-implications-foreclosure-crisis-just-tip-iceberg

Looks like Citigroup is actually addressing the real issues with it's shareholders about the devastation they're facing.
All of them need to start doing it
Now I want to see crime prosecution.
No hand slap fines, it's time to demand jail time.
These people knew what they were doing.
And just like I said only newly built homes will be a safe bet.
They will record that title at the county court house like they were supposed to have been doing, rather than to have used MERS

Yesterday, Citigroup's homebuilding team hosted a call with investors in which the guest speaker was Adam Levitin, an associate professor of law at Georgetown University. Far from providing the "all green" call participants had desired, Levitin said that what we have recently seen and heard in the news is “just the tip of the iceberg” and that the foreclosure halt may well cause a "systemic problem", as was suggested on Zero Hedge when the news of the Florida's court involvement was first made public (here and here) a month ago. And since by now everyone knows what the key tension points in this potentially massive development are, we will cut straight to Levitin's somewhat unpleasant conclusions:

"Our speaker predicted that more and more lenders are likely to stop their foreclosure processes in both judicial and non-judicial states. He also expects more states’ attorney generals to get involved. At the federal level, it is possible than banking regulators might step in as there is legal and reputational risk for the banks involved. Ultimately, if these issues do in fact escalate, the Administration may try to broker some sort of settlement. If such deal brokering does take place, Levitin believes that “some payment” will be exacted from the lenders and servicers. As for Citi's official take on Fraudclosure here are the key issues:

Issues Concerning Affidavits
Issues Concerning Tax and Trust Laws
Issues Concerning Title Insurers
Issues Concerning MERS

MERS (Mortgage Electronic Registration Systems) functions as a centralized electronic registry of mortgages and tracks ownership of mortgages. MERS allows mortgage ownership to change hands efficiently and relatively quickly since it is electronic and allows all parties to forgo making a filing in local land records. Indeed, MERS was designed to function as a substitute for local land records.

Although MERS was designed to enhance efficiency in the mortgage assignment process, Levitin argued it may not conform with the law. “Slowly but surely” courts are issuing decisions which “cast validity on the MERS process.” Although ~60% of mortgages list MERS as the “nominee” which owns the mortgage, a handful of recent court cases have ruled that MERS has no standing in foreclosure actions either because (1) physical paperwork must be transferred when a mortgage is assigned by one party to another or (2) MERS has no true economic interest in the mortgage in question since it collects no payments from the borrowers.

Citigroup, Ally Sued for Racketeering Over Database

http://www.bloomberg.com/news/2010-10-04/citigroup-ally-sued-by-homeowners-alleging-racketeering-over-mortgages.html

Racketeering, interesting choice of words.
Have you ever heard that word used when it wasn't being referred to the Mafia?

Citigroup Inc. and Ally Financial Inc. units were sued by homeowners in Kentucky for allegedly conspiring with Mortgage Electronic Registration Systems Inc. to falsely foreclose on loans.

The lawsuit, filed as a civil-racketeering class action on behalf of all Kentucky homeowners facing foreclosure, also names as a defendant Reston, Virginia-based MERS, the company that handles mortgage transfers among member banks. The suit claims that through MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.

“Defendants have filed foreclosures throughout the state of Kentucky and the United States of America knowing that they were not the ‘owners’ or beneficiaries of the loan they filed foreclosure upon,” the homeowners wrote in their complaint filed Sept. 28 in federal court in Louisville, Kentucky

Judge balks at SEC's settlement with Citigroup

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/16/AR2010081604807.html




A federal judge refused on Monday to accept a $75 million settlement between the Securities and Exchange Commission and Citigroup, marking the second time this year that a judge has questioned whether the agency had exacted the proper sanction from a major bank.

During a hearing on the settlement, Judge Ellen S. Huvelle of the U.S. District Court for the District of Columbia raised questions about the SEC's investigation into Citigroup, and how it decided on the size of the penalty and on the individual executives who also face sanctions, according to lawyers who were present. She asked why company shareholders must ultimately bear the price of the sanction, and why the agency charged only two executives with wrongdoing when more senior executives were involved.

Huvelle demanded additional information from the SEC and Citigroup, ordering the parties to file briefs and scheduling a hearing for late September.

Bank Profits Depend on Debt-Writedown ‘Abomination’ in Forecast

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a3Eg4vzAbneA

First Repo 105, now Statement 159
What part of the banks are actually real?
The part that "WE" bailed out?


Statement 159

In the first quarter, the four biggest U.S. lenders -- Bank of America, JPMorgan Chase & Co., Citigroup and Wells Fargo & Co. -- produced combined profit of $13.5 billion, the most since the second quarter of 2007. That figure probably fell by 28 percent in the second quarter, based on a Bloomberg survey of analysts’ estimates. The banks are scheduled to announce results over the next two weeks, led by JPMorgan on July 15.

The second-quarter results may include gains taken under a U.S. accounting rule known as Statement 159, adopted by the Financial Accounting Standards Board in 2007, which allows banks to book profits when the value of their bonds falls from par. The rule expanded the daily marking of banks’ trading assets to their liabilities, under the theory that a profit would be realized if the debt were bought back at a discount.

Accounting ‘Abomination’

In practice, it’s an accounting “abomination” because fluctuations in the value of the debt don’t change the amount the banks owe, said Chris Kotowski, an analyst at Oppenheimer & Co. in New York.

“Just because Morgan’s credit spreads widened out this quarter doesn’t mean that their ultimate interest and principal payments changed one iota,” Kotowski said. “The market will back it out, both on the upside and the downside.”

Wall Street Probe Widens

http://online.wsj.com/article/SB10001424052748704247904575240783937399958.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop#articleTabs%3Dcomments

This has become one serious case of head lice. The banks and the rating agencies are actually only the nits, and if you treated them and got rid of them the problem would still continue on, because you have killed the lice that lays the nits.
Those lice can be found running through the hair of our government.
People like Barney Frank and Chris Dodd, they're the ones that catered to the banks, serving up everything and anything that the banks lobbied them for.
Lobbying paid for the removal of Glass Steagall. Glass Steagall was the safety belt that insured that the financial monstrosity that we face now could never have happened.
But the "big bucks" and political party greed overrode the common sense of the safety belt and we are now crippled from a crash that never should have occurred

Federal prosecutors, working with securities regulators, are conducting a preliminary criminal probe into whether several major Wall Street banks misled investors about their roles in mortgage-bond deals, according to a person familiar with the matter.

The banks under early-stage criminal scrutiny—J.P. Morgan Chase & Co., Citigroup Inc., Deutsche Bank AG and UBS AG—have also received civil subpoenas from the Securities and Exchange Commission as part of a sweeping investigation of banks' selling and trading of mortgage-related deals, the person says. Under similar preliminary criminal scrutiny are Goldman Sachs Group Inc. and Morgan Stanley, as previously reported by The Wall Street

4 Big Banks Score Perfect 61-Day Run

http://www.nytimes.com/2010/05/12/business/12bank.html?src=mv

Wow what are the odds of this happening to 1 bank let alone 4.
Lol, glad you asked because Karl has done a little of that odd figuring for us.
And his findings are rather odd to say the least, and throw an enormous spotlight
on what it takes to beat those odds.

http://market-ticker.denninger.net/archives/2305-More-On-Goldmans-Perfect-Record.html

It is the Wall Street equivalent of a perfect game of baseball — 27 up, 27 down, the final score measured in millions of dollars a day.

Despite the running unease in world markets, four giants of American finance managed to make money from trading every single day during the first three months of the year.

Their remarkable 61-day streak is one for the record books. Perfect trading quarters on Wall Street are about as rare as perfect games in Major League Baseball. On Sunday, Dallas Braden of the Oakland Athletics pitched what was only the 19th perfect game in baseball history.

But Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase & Company produced the equivalent of four perfect games during the first quarter. Each one finished the period without losing money for even one day.

But I didn't know .....really

http://finance.yahoo.com/news/Rubin-says-he-learned-late-of-apf-521735539.html?x=0&sec=topStories&pos=6&asset=&ccode=



Robert Rubin, a senior adviser to Citigroup Inc. at the time of its deep losses from subprime mortgages, says he learned belatedly that Citi had $43 billion in high-risk securities on its books.

Rubin says, "I do not recall knowing before September 2007" that the bank had held onto the investments composed of repackaged mortgage bonds. In November 2007, Citigroup publicly estimated it would lose $8 billion to $11 billion in the fourth quarter that year from those securities.

Fed Reviews Find Errors in Oversight of Citigroup

http://dealbook.blogs.nytimes.com/2010/04/08/fed-reviews-find-errors-in-oversight-of-citigroup/?partner=yahoofinance

Even after the FED took over monitering Citigroup they failed to recognize just how serious the situation was, and they want us to give them more power WHY?
It seem to me that they (The FED) wouldn't know what to do with it if they had it anyway.


Citigroup ran into trouble under the noses of federal regulators. But even after taxpayers rescued the financial giant, regulators failed to monitor the company adequately, according to reviews by the Federal Reserve, Sewell Chan and Eric Dash report for The New York Times.

Excerpts of two Fed reviews were released on Wednesday as the committee examining the causes of the financial crisis began three days of hearings on the problems at Citigroup, Fannie Mae and the subprime mortgage market.
The panel heard a strong defense of the Fed from its former chairman, Alan Greenspan, who fended off a barrage of questions about the Fed’s failure to crack down on subprime mortgages and other abusive lending practices during his tenure.

But the excerpts, culled from thousands of documents turned over to the bipartisan Financial Crisis Inquiry Commission, painted a troubling picture of the Fed’s oversight of Citigroup both before and after Mr. Greenspan left the Fed — and again after Citigroup received three taxpayer-financed bailouts.

The most recent documents from 2009 portray bank examiners from the Federal Reserve Bank of New York, then headed by Timothy F. Geithner, now the Treasury secretary, as overly optimistic about Citigroup’s prospects, according to a person briefed on their contents.

Fannie, Freddie Ask Banks to Eat Soured Mortgages

http://www.businessweek.com/news/2010-03-05/fannie-freddie-may-ask-banks-to-eat-21-billion-of-sour-loans.html

There's more than one way to skin a fat cat

Banks that sell mortgages to Fannie Mae and Freddie Mac have to provide “representations and warranties” assuring that the loans conformed to the agencies’ standards. With more loans going bad, the agencies are demanding that banks turn over loan files, so they can scour the records for missing documentation, inaccurate data and fraud.

Providing Proof

The most common include inflated appraisals or falsely stated incomes in the loan applications, said Larry Platt, a Washington-based partner at law firm K&L Gates LLP who specializes in mortgage-purchase agreements. The government agencies hire their own reviewers who go back and compare the appraisals with prices from historical home sales, he said.

“They may do a drive-by for a visual inspection,” he said

Citi to suspend foreclosures for 30 days

http://finance.yahoo.com/news/Citi-to-suspend-foreclosures-apf-548845306.html?x=0&sec=topStories&pos=1&asset=&ccode=

That's real white of them isn't it?

Citigroup Inc. will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season.

The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck.

"We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.

http://market-ticker.denninger.net/archives/1747-Citibank-Dissembling-Again-Foreclosures.html

Citigroup said the suspension will affect about 2,000 borrowers scheduled for foreclosure and another 2,000 that were to receive foreclosure notifications in the next 30 days.

"We hope that with this suspension we can make the holidays a little less stressful for our customers who are going through a very difficult time We are doing this so as to avoid having to recognize the loss on properties that are deeply underwater, thereby cooking our books until the quarter is reported so we don't have to declare insolvency," said Sanjiv Das, president and CEO of Citigroup's mortgage division, in a statement.

There - fixed it for 'ya.

U.S. gave up billions in tax money in deal for Citigroup's bailout repayment

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534.html

And this helps the American public how?


"They are rolling the dice big time," said Christopher Whalen, a financial analyst with Institutional Risk Analytics. "My fear is that the banks will definitely have to raise a lot more capital next year. The question is from whom and on what terms."

The Citigroup repayment deal required significant sacrifices by both sides, underscoring the mutual determination to get it done. Citigroup was required to replace its federal aid with an equal amount of money from private investors, more than any other bank. The government concluded that Citigroup needed the IRS ruling because a reduction in the value of its tax breaks would have eroded its capital, forcing the company to raise more money, officials said.

Federal tax law lets companies reduce taxable income in a good year by the amount of losses in bad years. But the law limits the transfer of those benefits to new ownership as a way of preventing profitable companies from buying losers to avoid taxes. Under the law, the government's sale of its 34 percent stake in Citigroup, combined with the company's recent sales of stock to raise money, qualified as a change in ownership.

The IRS notice issued Friday saves Citigroup from the consequences by stipulating that the government's share sale does not count toward the definition of an ownership change. The company, which pushed for the ruling, did not return calls for comment

Geithner aides made millions on Wall Street

http://www.ft.com/cms/s/0/f012c4b2-b8f6-11de-98ee-00144feab49a.html

Obama administration officials now working on fixing and regulating the financial system were beneficiaries of several million dollars in pay from Wall Street and private equity companies, it has been revealed.

Financial disclosure forms show that prior to joining the government, Gene Sperling, a senior Treasury adviser, was paid $887,727 by Goldman Sachs and $158,000 for speeches to companies that included Stanford Group, the company run by Sir Allen Stanford, who has since been charged with fraud.

Mr Sperling’s compensation from Goldman was for work on a philanthropic project. His overall pay, including for his main job at the Council on Foreign Relations, totalled $2.2m in the 13 months to January.

The forms, which were first obtained by Bloomberg, showed that Matthew Kabaker, another adviser in the Treasury, earned $5.8m at Blackstone, the private equity firm, in the two years before joining the administration to work on plans to support banks and spur lending. Much of the compensation was in stock.

Lewis Alexander, another adviser, was chief economist to Citigroup before joining the administration; he was paid $2.4m in the last two years.

Even though some of the officials whose previous salaries were disclosed are senior, many were appointed as “counselors”, meaning they escaped Senate confirmation hearings which could have highlighted their past remuneration and employment at a time of heightened animosity towards the financial industry.

Earlier this month the release of the telephone call logs of Tim Geithner, Treasury secretary, showed he had numerous conversations with a number of Wall Street executives, sparking allegations that the administration was too close to the industry