Petition [EN] Pétition [FR] Petición [ES] Petiţie [RO] Ψήφισμα [EL] Petice[CZ] Petition [DE] Petizione [IT] Petycja [PL] Petitie [NL] Petíció [HU] Petição [PT] Namninsamling [SV] Underskriftindsamling [DA] Petícia [SK] Achainí [GA] Peticija [LT] Петиция [RU] Eskaera [EU] Petskribo [EO] Petició [CA] Athchuinge [GD]
... Jake Terhune's $985,000 home (I previously overstated the value --MT) just outside of Geyserville, in the heart of California's Sonoma County wine region. Terhune, 28, a self-employed cabinetmaker with tattoo-covered arms and a ginger goatee, put down $100,000 and agreed to pay about $6,900 a month for 30 years to buy the three-bedroom house in 2006. [...] By purchasing loans for as little as 50 cents on the dollar and then collecting the payments and handling the paperwork, Dellacamera can cut costs enough to offer easier terms and still make a profit, he says. Once borrowers have re-established themselves, the loans can be resold in the secondary market at a 15-20 percent gain.
More intellectually disturbing are a couple of stories this week, written to indemnify the Fed's torrential exposure to market risk through the TAF "innovation." While alluding to Northern Rock receivership in the UK, they call it "covert nationalization" US banking: minyanville.com and interfluidity.com. Quoting from the latter
The Fed announced that it would auction off $100B in loans this month rather than the previously announced $60B via its TAF facility. In the same press release, the FRB announced plans to offer $100B worth of 28 day loans via repurchase agreements against "any of the types of securities -- Treasury, agency debt, or agency mortgage-backed securities -- that are eligible as collateral in conventional open market operations". [...] The distinction between debt and equity is much murkier than many people like to believe. Arguably, debt whose timely repayment cannot be enforced should be viewed as equity. (Financial statement analysts perform this sort of reclassification all the time in order to try to tease the true condition of firms out of accounting statements.) If you think, as I do, that the Fed would not force repayment as long as doing so would create hardship for important borrowers, then perhaps these "term loans" are best viewed not as debt, but as very cheap preferred equity.
Given the number of new jumbo conforming loans insured or originated by Fannie Mae and Freddie Mac will be securitizing (MBS), the author goes on to trivialize the Fed prerogative to write-down its own "equity" in the event of serial defaults.
If this rationalization of capitalism gains currency, "the left" will be thoroughly discredited as well in the US, in the UK, and across the world, because no good will come of it. Diversity is the key to economic and political evolution.
A more disturbing association, to my mind, is how the author internalizes death, death of capital formation and investment, represented by this home "owner" is "carion" to the "vulture." Doubtless the reporter is conversant with the fashion and financial mechanics of private equity agents extorting IMF and World Bank clients. For example
Debt Advisory International (DAI) On Thursday 15 February a high court judge in London will rule whether a vulture fund can extract more than $40m from Zambia for a debt which it bought for less than $4m. :: Kensington International Critics say Kensington International, a subsidiary of Elliott Associates, is a "vulture fund," an investment group that buys up Third World debt at discounted prices and then sues for the full amount or more in court. :: disambiguation MUMBAI: Can the vulture nurture as well? Perhaps, it can. Distress asset funds (pejoratively called vulture funds) and distress asset arms of global hedge funds operating in India are increasingly beginning to focus on small and medium enterprises [SMEs], a segment which is the preserve of commercial banks.
By choosing such a term, the author glibly acknowledges that finance professionals are at long last consuming the dead, domestically. How long before wage-slave US consumers participating in 401(k) and pension plans discover their annuities derive from such equity- and asset-stripping activities in their own communities?
When pigs fly. "America" revels in its ignorance.
What frustrates and saddens me most is not only the socially acceptably, normative, psychopathy demonstrated by "financial cannibalism" in the US but the conspicuous absence of alternative remedies to depredations of so-called free enterprise. Before current even registering legislation to correct US Code regulating the industry is the abject failure to prosecute what are obvious fraudulent "business" practices. For example, the judicious opinion delivered by Hon. Jeffrey Bohm of Countrywide Financial Capital's institutional "incompetence." (How useful and ubiquitous that ascription has become!) Link to his 75pp "excuse" and choice quotes:
The problems at Barrett Burke and McCalla Raymer are not limited to training lawyers; there are other aspects of these firms' culture that is disconcerting. What kind of culture condones a firm signing an engagement letter which prevents its attorneys from communicating with its client? What kind of culture condones its lawyers preparing, signing, and filing motions to lift stay without having the client review the final version for accuracy? What kind of culture condones its attorneys signing proofs of claims without even contacting the client to review and confirm the debt figures? What kind of culture condones attorneys testifying to basic facts and then, at the next hearing, recanting the testimony on the grounds that the attorney had not sufficiently prepared to testify? And above all else, what kind of culture condones its lawyers lying to the court and then retreating to the office hoping that the Court will forget about the whole matter?
Mind you, the FBI is investigating CFC and WaMu among others pursuant to a separate suit of racketeering charges initiated by NY State AG, Andrew Cuomo, concerning property appraisal. Mr Cuomo, you will recall, was recently the object of racially-charged controversy concerning his use of the phrase "shuck and jive" to describe politicians' relationship to the press.
That's America for you. Watch out. Diversity is the key to economic and political evolution.
