Monday, 18 October 2010

Greenspan’s Legacy.

Baltic Dry Index. 2762 -07
LIR Gold Target by 2019: $3,000.

In 2009, the Florida Bankers Association wrote a letter to the Florida Supreme Court objecting to some proposed rule changes for foreclosure cases. The full text of the letter is here. The critical section:

The reason “many firms file lost note counts as a standard alternative pleading in the complaint” is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file. See State Street Bank and Trust Company v. Lord, 851 So. 2d 790 (Fla. 4th DCA 2003). Electronic storage is almost universally acknowledged as safer, more efficient and less expensive than maintaining the originals in hard copy, which bears the concomitant costs of physical indexing, archiving and maintaining security. It is a standard in the industry and becoming the benchmark of modern efficiency across the spectrum of commerce—including the court system.

Bye, bye Bank of America? The next Lehman perhaps, when the mortgage put-backs start early next year. A nuclear bomb of fraud and deliberate flouting of US real estate laws has gone off, and many trillions of mortgage backed securities are now in doubt, to say nothing of some 65 million of residential real estate titles being clouded. There is simply no way that any of this ends well.

"Title companies would be crazy to ensure title on anything remotely associated with a foreclosed property because we don't know how this is going to resolve itself," said Mark Hanson, an independent housing analyst in Menlo Park, Calif.

Here's That Devastating Report On Bank Of America That Everyone Is Talking About Today

Earlier, we wrote about Felix Salmon's contention that there's a new mortgage fraud scandal that has the potential to dwarf Goldman's ABACUS dealings. In this fraud scenario, banks took advantage of their information advantage and sold CDOs with mortgages they knew to be bad without clear representation to investors.

In August, Manal Mehta and Branch Hill Capital put together a presentation targeting Bank of America's potential exposure to this mortgage fraud, as well as other problems in the mortgage market.

The presentation comes to a pretty damning conclusion: Bank of America's exposure could nearly halve its share price.

It's all about what capital Bank of America has in reserve for the scenario of mortgages having to come back on its balance sheet.

The breakdown does not detail what exposures Merrill Lynch may add to Bank of America's problem.

Read more:

While the UK’s voters await Her Majesty’s novelty coalition government’s austerity cuts later this week, back across the English Channel on the continent made for tanks, a none too civil war has broken out within the European Central Bank. The Frenchman who holds the title of ECB president since forcing out Dutchman Wim Duisenberg, is now feeling the same heat from probable successor Axel Weber of Germany. Tired of paying for Euroland but getting very little back by way of respect, Germany’s ECB contingent think that they who pay the piper should get to call the tunes. As usual the French think otherwise, and that Germany should pay for the Greek’s way of life, along with Spain and Portugal’s. While the ECB’s big two slug it out, Euroland is undergoing a wave of strikes. Today it’s the turn of Belgian railway workers. Shortly to be transferred back across the channel to the UK, it seems to me. Stay long precious metals, a period of turmoil seems to be our early Christmas present. With higher taxes and food price inflation coming early next year, we can only hope that the Polish scientists are right about the coldest winter for a thousand years, as a way of holding down social disorder.

A great country worthy of the name does not have any friends.

General Charles De Gaulle.

ECB’s Trichet Rejects Weber’s Call to End Bond Purchase Program

Oct. 18 (Bloomberg) -- European Central Bank President Jean-Claude Trichet rejected Bundesbank President Axel Weber’s call to end the bond purchase program that has provided a lifeline for European governments and banks trying to shore up their finances.

“This is not the position of the Governing Council, with an overwhelming majority,” Trichet said when asked to respond to Weber’s Oct. 13 call for an end to the program, according to a transcript of an interview published yesterday in Italian newspaper La Stampa.

Weber, who also sits on the ECB’s 22-member decision-making council, said the risk of “exiting too late” from the emergency measures was greater than pulling out too soon. The remarks, the strongest from any ECB official advocating a removal of stimulus, came as governments and banks in Ireland, Portugal and Greece struggle to convince investors they can control their finances in the aftermath of this year’s sovereign debt crisis.

“Trichet is sending a clear signal to Weber,” said Carsten Brzeski, an economist at ING Group NV in Brussels. “The majority seems to favor a safety belt option for the moment and isn’t comfortable with sending conflicting signals to the markets.”

Extending Backstop

Trichet also backed the possibility of extending in some form the European Union’s temporary financial backstop for financially stressed nations. The EU set up the European Financial Stability Facility in June after Greece’s near default led to soaring borrowing costs for other high-deficit nations. The 440 billion-euro ($614 billion) emergency fund is set to be shut down in June 2013 if no loans are made by then.

Extending the aid mechanism “could be imagined in the future,” he said at a press conference yesterday in Rimini, Italy. “We would then have to respect a number of criteria.” Any aid program should not encourage “moral hazard and it should be based on a very, very strong conditionality.”

----Trichet also said that as ECB president he is the only one who speaks on behalf of the Governing Council. Weber, who opposed the bond purchases since their inception in May, is regarded by economists as a frontrunner to succeed Trichet when his non-renewable eight-year term expires in just over a year.

“There is only one single currency; there is one Governing Council, only one monetary policy decision, and one president, who is also the porte-parole of the Governing Council,” he told La Stampa.

Meanwhile back in Africa, China’s public relations have hit a new low. China now seems to be making enemies rather than friends.

OCTOBER 18, 2010

Zambians Riot After Miners Are Shot

Two Chinese Supervisors in Coal-Mining Company Are Arrested After Demonstration Ends With 11 Wounded, Police Say

Zambian locals rioted and blocked a road leading to Chinese-owned Collum Coal Mine Ltd. on Saturday to protest the shooting of at least 11 miners, allegedly by Chinese supervisors during a protest over low wages, police officials said Sunday.

On Friday, miners at Collum Coal Mine, in the Sinazongwe District of southern Zambia, demonstrated against low pay and poor working conditions. Gunshots followed, allegedly fired by two Chinese supervisors, wounding 11 miners, two of them critically, according to Zambian police and government officials. They were taken to a hospital.

Zambian police arrested the two Chinese supervisors allegedly involved. No charges have been filed. They are expected to appear in court the coming week.

Oliver Pelete, the district commissioner, said he met with officials from the Chinese embassy on Sunday to discuss the incident and conditions at the mine. He said the officials had apologized for the incident.

An embassy representative couldn't be reached on Sunday to confirm the apology or offer any details of the shooting.

"We will sit down to look at the conditions for the miners [together]…to ensure that all conditions are according to the laws of the country so we won't have any more conflicts," Mr. Pelete said.

Reached by phone Sunday, Danny Law, a marketing manager at the mine, called the incident "an accident," and said only that two Chinese supervisors were attacked.

"The miners attacked the employees," he said. "They had no other choice but to shoot in the air. Several people were wounded, but it's not serious." He said the company would pay for their hospital bills.

We end for today with the Philippines getting hit with super typhoon Megi. After the Philippines Megi heads on towards northern Vietnam and southern China. Apart from the human disruption and distress angle for the many hundreds of thousands who live in its path, our interest also lies in what if any damage it does to crops, especially the rice crop. At this point we can only await damage reports later in the week.

Super typhoon Megi slams the Philippines

AP Monday, 18 October 2010

Super Typhoon Megi slammed ashore along the Philippines' north-eastern coast today with ferocious winds of 140mph - the strongest cyclone to hit the country in years.

Thousands sought shelter while authorities warned millions of residents and rice farmers along the typhoon's path to look out for damage to crops, homes and power lines.

Weather forecaster Robert Sawi said the eye of the typhoon made landfall at midday local time at Palanan Bay in Isabela province.

As it crossed the main northern island of Luzon, Mr Sawi warned of possible floods and landslides, particularly in the Cordillera mountains.

Flood-ravaged areas of China and Vietnam also were bracing for more rains from the powerful storm.

Megi was expected to move on towards southern China, which has already evacuated more than 100,000 people from villages because of earlier flooding, according to the China Meteorological Administration.

With its ferocious wind and heavy rainfall, Megi has become the most powerful typhoon to hit the Philippines in four years, government forecasters say. A 2006 howler with 155mph winds set off mudslides that buried entire villages, killing about 1,000 people.

How can anyone govern a nation that has two hundred and forty-six different kinds of cheese?

General Charles de Gaulle.

At the Comex silver depositories Friday, final figures were: Registered 52.19 Moz, Eligible 60.10 Moz, Total 112.29 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today the story that’s finally gone mainstream media. A nuclear bomb has finally detonated in Greenspan’s last great bubble that was supposed to cover up all the ills from his serial bubbles and manipulations since the old fraud lost his nerve in the stock market crash of 1987. Now thanks to his great American real estate bubble, and the great vampire squids who sliced and diced the mortgages into pools of phony mortgage backed securities, and then knowing that one day the whole mess would eventually blow up, wrote Credit Default Swaps on each other to try to profit from the wreckage when the nuclear bomb went off, America has some 65 million real estate titles under a cloud, and a foreclosure process riddled with rampant fraud, false attestations, false notarizations, with many if not ALL of the bogus securities about to be put back to the originators. The US residential real estate market is now just one more shock away from total gridlock, and a heartbeat away from throwing up “the next Lehman”. Stay long precious metals. There is no consensus or plan for how to undo the decade of rampant thievery on Wall Street. Who knew what and when, and who looked the other way when they should have been blowing the whistle on the fraud. Where is America’s Diogenes of Sinope when we need to find an honest man on Wall Street? Is there an honest man on Wall Street anymore, or did Greenspan-Bernanke run them out of town for their crony banksters?


FK/A a concept “Whole Loan Book Entry” -1989

----MERS – Mortgage Electronic Registration Inc. – holds approximately 60 million American mortgages and is a Delaware corporation whose sole shareholder is Mers Corp. MersCorp and its specified members have agreed to include the MERS corporate name on any mortgage that was executed in conjunction with any mortgage loan made by any member of MersCorp. (UPDATE 9/1/2010: 65 MILLION American Mortgages)

Thus in place of the original lender being named as the mortgagee on the mortgage that is supposed to secure their loan, MERS is named as the “nominee” for the lender who actually loaned the money to the borrower. In other words MERS is really nothing more than a name that is used on the mortgage instrument in place of the actual lender. MERS’ primary function, therefore, is to act as a document custodian.

MERS was created solely to simplify the process of transferring mortgages by avoiding the need to re-record liens – and pay county recorder filing fees – each time a loan is assigned. Instead, servicer’s record loans only once and MERS’ electronic system monitors transfers and facilitates the trading of notes. It has very conservatively estimated that as of February, 2010, over half of all new residential mortgage loans in the United States are registered with MERS and recorded in county recording offices in MERS’ name

MersCorp was created in the early 1990’s by the former C.E.O.’s of Fannie Mae, Freddie Mac, Indy Mac, Countrywide, Stewart Title Insurance and the American Land Title Association. The executives of these companies lined their pockets with billions of dollars of unearned bonuses and free stock by creating so-called mortgage backed securities using bogus mortgage loans to unqualified borrowers thereby creating a huge false demand for residential homes and thereby falsely inflating the value of those homes. MERS marketing claims that its “paperless systems fit within the legal framework of the laws of all fifty states” are now being vetted by courts and legal commentators throughout the country.

The MERS paperless system is the type of crooked rip-off scheme that is has been seen for generations past in the crooked financial world. In this present case, MERS was created in the boardrooms of the most powerful and controlling members of the American financial institutions. This gigantic scheme completely ignored long standing law of commerce relating to mortgage lending and did so for its own personal gain……..

The Nature of MERS’ Business

  • MERS does not take applications for, underwrite or negotiate mortgage loans.
  • MERS does not make or originate mortgage loans to consumers.
  • MERS does not extend any credit to consumers.
  • MERS has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as “nominee”.
  • MERS does not service mortgage loans.
  • MERS does not sell mortgage loans.
  • MERS is not an investor who acquires mortgage loans on the secondary market.
  • MERS does not ever receive or process mortgage applications.
  • MERS simply holds mortgage liens in a nominee capacity and through its electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
  • MERS© System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
  • MERS is not named as a beneficiary of the alleged promissory note.


It is patently incorrect to say that the “foreclosure gate” issue is about “robo-signers”. A dozen top banks or servicers voluntarily halted foreclosure across much of the country because title insurers were no longer comfortable working on their foreclosure sales, borrowers were having increasing success challenging the foreclosures, their sub-contractors (such as Lender Processing Services and various foreclosure mill law firms) were being investigated for fraud and perjury, and news was starting to get out that the problems were much more widespread than had been previously reported.

The entire legal structure of foreclosure was coming undone. Robo-signers were just a manifestation of a much larger issue that was already becoming a problem.

The monthly Coppock Indicators finished September:

DJIA: +227 Down. NASDAQ: +321 Down. SP500: +221 Down.

The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators. September is the fourth down month in a row.

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