Crossposted from The Stars Hollow Gazette

Your trillions in free money at work-

Missouri Becomes Second State To Divert Foreclosure Funds Away From Homeowners To Balance Its Budget

By Travis Waldron posted from ThinkProgress Economy

Feb 13, 2012 at 9:26 am

Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.

Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget…

60 pieces of silver.

California’s size lands state big share of foreclosure settlement

By Alejandro Lazo, Los Angeles Times

February 11, 2012

California walked away with the biggest chunk of this week’s landmark foreclosure settlement partly because of the state’s size but also because of Bank of America’s desire to escape the legacy of its Countrywide problems.

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California’s large share came even though there have been few complaints among state homeowners about the kind of improper robo-signing practices that launched the talks, which quickly morphed into settlement negotiations about errors that occurred throughout the foreclosure process. More than a year ago, evidence began emerging about robo-signing, in which foreclosure documents were signed without being read or with phony names and titles.

“The robo-signing was the hook for the investigation, that was the most outrageous thing that got the whole thing started. But the robo-signing does not amount to the worst things that servicers have done. What caused the ball to pick up steam was all of the other abuses,” said Kurt Eggert, a professor at Chapman University’s law school. “The servicers really needed California in this deal.”

By signing on, California waived a litany of claims it could have brought against the banks, including unfair or deceptive business practices and general consumer protection statutes that applied to wrongdoing in the loan modification and foreclosure process…

…

“They are by far the most important mortgage lending state in the country, and as a result are the most important foreclosure state,” said Guy Cecala, publisher of Inside Mortgage Finance. “It is crucial to have them as part of a settlement.

“These banks badly need to get back in the business of processing foreclosures,” Cecala said, “and it is a huge deal if you don’t have the California attorney general breathing down your throat.”

…

Wells Fargo spokesman Tom Goyada said the settlement “is not a one-issue agreement. It covers a range of issues and we are happy to have those set aside and put behind us.” Chase declined to comment. Ally and Citibank did not respond to requests for comment.

…

If the banks don’t fulfill the $12-billion guarantee, they will have to make cash payments of up to $800 million directly to the state, a provision that is enforceable in California court, instead of federal court in Washington, where the rest of the deal is covered.

The big banks win again

Foreclosure victims get little help in a mortgage-settlement plan that only benefits the banks’ bottom line

By Matt Stoller, Salon

Friday, Feb 10, 2012 10:00 AM Eastern Standard Time

Rather than settling anything, this agreement is simply a continuation of the policy framework of both the Bush and the Obama administrations. So what, exactly, is that framework? It is, as Damon Silvers of the Congressional Oversight Panel, which monitored the bailouts, once put it, to preserve the capital structures of the largest banks. “We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks,” said Silvers in October, 2010. “We can’t do both.” Writing down debt that cannot be paid back – the approach Franklin Roosevelt took – is off the table, as it would jeopardize the equity keeping those banks afloat.

This policy framework isn’t obvious, because it isn’t admissible in polite company. Nonetheless, it occasionally gets out.  Back in August 2010, at an “on background” briefing of financial bloggers, Treasury officials admitted that the point of its housing programs were to space out foreclosures so that banks could absorb smaller shocks to their balance sheets.  This is consistent with the president’s own words a few months later.

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At the time, the President was referring to HAMP, the $75 billion program announced in March 2009 as the administration’s signature program to address problems in the housing market. HAMP had been created because Sen. Jeff Merkley of Oregon demanded some remaining bailout money be used to help homeowners, or he would withhold a critical vote on unlocking the authority for the administration to get more TARP money. Larry Summers sent a letter to Merkley offering both a debt write-down plan (“cramdown”) and the dedication of up to $75 billion of money to help homeowners, in return for his vote.  In fact, administration officials had already decided that they would not pursue a debt write-down.

The settlement announced yesterday, whether you believe the $25 billion number (of which only $5 billion is actual cash), is one-third the size of HAMP. As Obama noted nearly two years ago, that’s just not very much gravel.

A more realistic solution to the problem was actually debated within the administration during the transition, in debates revealed by economist Laura Tyson at the Financial Times’ View from the Top Conference in 2011.  She noted that top officials had to decide whether to engage in mass write-downs of debt similar to FDR’s programs in the 1930s by using tools such as judicial modification, or whether to allow millions of foreclosures to go forward. They chose the latter. The current foreclosure epidemic, in other words, is partially a policy choice.

Everything done subsequent to that decision has been designed to mask this essential policy choice. This settlement is simply the latest example. While the headline number on the settlement is $26 billion, the actual cost to the banks and benefit to homeowners could be far lower, depending on how this complicated system of “credits” will be allocated. The banks will in all likelihood be able to charge off activities they had already planned, such as not pursuing deficiency judgments, refinancing and loan modifications. Some of the money may wind up being be paid not by banks, but by investors, such as pension funds.

Moreover, when the banks have reached settlements with law enforcement officials, they generally don’t hold to them.  The Nevada attorney general recently sued Bank of America for violating an agreements the state had made with Countrywide (once the largest mortgage originator in the country, now owned by BOA)  to end various predatory practices. When you issue parking tickets instead of handcuffs for multibillion-dollar crimes, the crime spree continues unabated. And obviously, HAMP, which was originally budgeted at three times the size of this settlement, has been a complete catastrophe.

Crossposted from The Stars Hollow Gazette

As Greece stares into the abyss, Europe must choose

Maria Margaronis, The Guardian

Sunday 12 February 2012 14.10 EST

When you ask people on the street if they would rather Greece went bankrupt than submit to further measures, many now point out that it is already bankrupt, that public sector workers have gone unpaid for months, that hospitals have no supplies, that the poor are being wrung dry in order to pay the banks. “Let’s get it over with,” a woman who works for the education ministry said to me. “Then we’d know we only had €250 a month and we could start again. This is not the people’s Europe we dreamed of.” The fact that Poul Thomsen of the IMF, the eurozone’s poster boy Mario Monti, the markets and countless economists agree that more austerity will deepen Greece’s depression without making the debt sustainable adds weight to her argument. The icy reception given last week to the Greek delegation in Brussels confirms the sense that its lenders are ready to end the relationship.

Why, then, have large sections of the Greek elite clung so hard to the fantasy that a new loan deal can “save” the country? The obvious answer is that default is a black hole and an enormous risk. No one can predict what suffering a default might bring. Another is that the current crop of politicians built their careers in the system that is now unravelling, based on oligarchies, clientelism and corruption; they’ve proved unwilling to make the reforms that might, in a different global climate, have revived both Greece’s economy and its democracy.

The deeper reasons, though, may be cultural and political. The crisis has intensified old splits in Greek society. You can see it in the polls, which show support ebbing from the centre to the edges of the political spectrum, and especially to the fragmented left. You can see it, too, in the historical parallels people reach for in a vain attempt to name this unprecedented nightmare. Protesters chant slogans from the dictatorship of 1967 to 1974, comparing the deal’s Greek enforcers with the CIA-backed junta. Both left and right talk about a new German occupation – an understandable reference given that Germany is calling the shots and that Greeks last queued at soup kitchens in the 1940s, but one that can edge into racism or crude exaggeration, as in a recent headline that read simply “Dachau”. Both those tropes call up the silent ghosts of the Greek civil war, which launched the cold war in Europe and outlawed the Greek left for the next 30 years. In this story, the west plays the part of the repressive imperial interloper.

For the liberal centre, this is populist anathema. To them Europe is still Greece’s heartland and its hope, the only guarantor of liberal capitalism, human rights and democracy. A few weeks ago a distinguished law professor compared the prospect of default to the Asia Minor disaster of 1922, which brought a million-and-a-half refugees into Greece and convulsed the state, and went so far as to suggest that leaving the eurozone would end the 200-year cycle of the Greek Enlightenment.

Next Steps for Greeks after the Austerity Bill (AKA: Hope for Greece, at last)

by Ian Welsh

2012 February 12

Ok, another austerity package just passed.  That’s the bad news, but amidst the bad news there is some good news.  More than 40 MPs were expelled from the PASOK and ND parties, two from LAOS-those MPs need to form a new, explicitly anti-austerity, pro-default government.  Odds are good they will win the next election, and can form the new government.

No deals made by a sovereign are unrevocable.  Whatever this government is doing, has done and will do, can be undone by a new government.

…

Greece can be fixed, if the Greeks are willing to do what it takes, both in terms of electing a new government and that government doing the right things.  Those things will be unorthodox and painful, but no more painful than austerity, and unlike austerity, they will lead to a better economy, and based on experience elsewhere, probably within two or three years of doing the right thing, with some relief being felt within 6 months.

What passes for smart on the Greek Debt Crisis

by Ian Welsh

2011 November 4

It didn’t take years for Argentina when they defaulted.  When Iceland told Europeans to go take a long flying leap of a short pier, it didn’t take them years.  In fact, my best guess is it would take a year, maybe less.  There is too much money chasing far too few returns.  Contrary to the idea that there isn’t enough money in the world, the problem is that there is too much, and it is chasing diminishing returns.

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No, no they don’t have to bail out the banks.  Not for the full value of the default (if Greece just said “we won’t pay”, as opposed to “we’ll pay at some point”.)  The banks have shareholders and bondholders.  Those institutions and people take the losses.  Some of them are public (pension funds, etc…) but many of them aren’t.  Let them eat their losses.  The banks go under, you refloat them, but the cost of doing so is far less than paying off all the bad loans, because the private actors have taken their losses and any excess losses, well, they’re just written off.  Same as when you realize cousin Fred ain’t ever paying you back than $100.  It’s gone.  Done.  Over with.

The only reason “all the debts” must be paid off is because the rich demand it.  They don’t want to take their losses. This is what should have been done in the US.  It is what should be done in Europe.  It is what our lords and masters refuse to do at all costs, because the people who own them, or they themselves, or their friends, or their lovers, are the ones who will take the bath.

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According to the IMF, hardly an organization that wants countries to default, the effect on the economy of defaulting is one year of sharp pain, followed (perhaps) by a few years of lesser growth than otherwise.  In other words, not that bad, and no worse than Greece has already suffered.

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(C)ountries could simply slap on currency controls, which experience shows (most recently and clearly in the Asian currency crisis of the 90s), works.  And permanent austerity, which is what France and Germany want to impose on Italy, Greece and Spain (with the apparent cooperation of their political classes, I might add) will erode the value of the bank holdings in time anyway.

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There are economic tools for dealing with these issues.  Capital and currency controls are one of them, the distinction between default (we’ll pay you eventually, as opposed to we’ll never pay you) is another.  The question of who is being bailed out (private investors, in large part) is another.  And bailing out those investors is a political act, their money is their political power.  The current political class, who is complicit with the current monied class, of course wants to bail them out.

All of this is before we even get to the horribly anti-democratic nature of all of this: the repeated refusal of the political class to allow referendums, the complicity of all major political parties in the process (notice there is no party to vote for if you want to default), and so on.

There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system.   Calls can run up to 1000:1 against TARP and it will pass.  Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters.  There are no parties to vote for if you are against the current system.

…

Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts.  They control government for the benefit of the rich.

And the rich pay all the way down the line.  They control the media, right down to the bottom, to make sure that what is discussed is what they want discussed, in the terms they want it discussed.  That default isn’t that bad: forbidden.  That currency controls mitigate damage in these circumstances: forbidden.  That lenders will lend to defaulting countries almost immediately: forbidden.

Our regular featured content-

• On This Day In History February 13 by TheMomCat
• Punting the Pundits by TheMomCat

These featured articles-

• Greece Is Burning by: TheMomCat
• Greece Fire by: ek hornbeck
• The Big Bribe by: ek hornbeck
• Remembering Whitney by: BruceMcF

We’ll also be live blogging the 136th Westminster Kennel Club Dog Show- Day 1 starting at 7:30.  BruceMcF will go up at 8 pm.  DocuDharma will have it’s own dog oriented feature by pfiore8 at 8.  Everyone welcome.

Write more and often.

This is an Open Thread

Crossposted from The Stars Hollow Gazette

I won’t defend them, this is what they say they want.  I do feel kind of bad for their neighbors and the rest of us.

First of all, what do we know about Fukushima that we didn’t know a month ago?

New Containment Flaw Identified in the BWR Mark 1

Arnie Gundersen, Fairewinds Associates

Feb. 6, 2012

(W)e know that right before the explosion, the containment vent was working. Now the Japanese are saying that the containment vent was working, but the pipes were somehow or other leaking hydrogen into the plant as well and that is what caused the explosion.

To my way of thinking, the data does not support the interpretation of the nuclear industry and the Japanese. What the data does support is the Brunswick test from 40 years ago. It seems to me that for 8 hours or more, the containment at Fukushima was basically ruptured, that the top had popped up, and gasses were sliding out, so that it could not go over 100 pounds per square inch.

And hydrogen gasses were leaking out of the containment and into the reactor building for a long period of time. After that, it only took a spark to blow the reactor building up. This is a really important distinction. The nuclear industry, the Nuclear Regulatory Commission and the Japanese are saying that we can make the vent stronger so that this accident cannot happen. But if the nuclear head is lifting up, the vent is irrelevant. The containment on the Mark I design has a design flaw that the containment vent cannot solve.

Cancer Risk To Young Children Near Fukushima Daiichi Underestimated

Arnie Gundersen, Fairewinds Associates

January 17, 2012

(Y)oung girls in the Fukushima Prefecture are going to get 5 times the exposure they would get from 2 rem. That means that about one in 100 young girls is going to get cancer as a result of the exposure in Fukushima Prefecture. And that is for every year they are in that radiation zone. If you are in there for 5 years, it is 5 out of 100 young girls will get cancer.

Oh, and there’s a serious possibility that Daiichi #2 could go re-critical-

Tepco Injects Boric Acid Into Reactor as Temperatures Rise

By Tsuyoshi Inajima, Bloomberg News

Feb 6, 2012 10:18 PM ET

The temperature of the No. 2 reactor was 70.1 degrees Celsius (158 degrees Fahrenheit) as of 6 a.m. today, according to preliminary data, Akitsuka Kobayashi, a spokesman for the utility, said by phone. The reading fell from 72.2 degrees at 5 a.m. this morning, and is below the 93 degrees that’s used to define a cold shutdown, or safe state, of the reactor.

Since Feb. 1, temperatures at the bottom of the No. 2 reactor vessel have risen by more than 20 degrees Celsius, according to the company’s data. Tepco, as the utility is known, and the government announced that the Fukushima plant reached a cold shutdown on Dec. 16, nine months after the Tohoku earthquake and tsunami wrecked the nuclear station, and caused three reactors to meltdown and release radiation.

…

About 95,000 cubic meters, which is enough to fill 38 Olympic-sized swimming pools, of highly radioactive water may still be in the basements, even after the company has processed more than 220,000 cubic meters of contaminated water, according to Tepco’s latest estimate on Feb. 1.

That would be 93 Celcius in case you’re as confused as I was.  What’s the big deal about re-criticality?  Well, it’s not an atomic bomb per se but from this Time Magazine report from March 30, 2011–

To nuclear workers, there are few events more fearful than a criticality accident. In such a scenario, the fissile material in a reactor core-be it enriched uranium or plutonium-undergoes a spontaneous chain reaction, releasing a flash of aurora-blue light and a surge of neutron radiation; the gamma rays, neutrons and radioactive fission products emitted during criticality are highly dangerous to humans. Criticality occurs so rapidly-within a few fractions of a second-and so unpredictably that it can suddenly kill workers without warning.

I’m sure some of you learned in history class just as I did of Harry K. Daghlian and Louis Slotin.

More information and links in an excellent piece by Harvey Wasserman aka solartopia at Firedog Lake.

Gregg Levine (a name you may recognize better) has some interesting pieces up too-

Nuclear Regulatory Commission Ignores Fukushima, Green-Lights First New Reactors in 34 Years

By: Gregg Levine, Firedog Lake

Thursday February 9, 2012 4:59 pm

The NTTF (Fukushima Near-Term Task Force) recommendations, geared toward improving safety and preventing another disaster like the one still evolving at Japan’s Fukushima Daiichi nuclear power facility, have still not become official government rules-some are projected to take up to five years to draft and implement-and so, for now, the new reactor construction will get to pretend the Tohoku quake and tsunami, and the resulting core meltdowns and widespread radioactive contamination, never happened.

The Vogtle reactors are of a new (or, let’s call it “new-ish”) design. The AP1000 reactor was just approved by the NRC in December, over the objections of numerous scientists and engineers, who saw claims of innovation insufficient to counter the dangers native to any Pressurized Water Reactor (PWR) design. Upon examination, many of the "improvements" to the AP1000 look more like ways to cut construction costs. Even so, a single new AP1000 is expected to cost anywhere from $8 billion to $14 billion dollars-and, it should be noted, no US nuclear facility has ever come in anywhere close to on time or on budget. The US government has already pledged over $8 billion in federal loan guarantees to cover construction of the Georgia reactors, since without the government backstop, no private financial institutions will invest in such a high-cost, high-risk project. Southern Co. has already spent $4 billion preparing the Vogtle site for the anticipated new construction.

“I cannot support this licensing as if Fukushima never happened,” said Gregory Jaczko after the Thursday vote-but thanks to the four other commissioners of his captured agency, licensing as if Fukushima never happened is exactly what the NRC did.

NRC Vogtle Reactor Approval Should Blow Lid Off Nuclear Finance Scam

By: Gregg Levine, Firedog Lake

Friday February 10, 2012 9:30 am

Coming almost exactly two years after the Obama administration granted the project $8.33 billion in federal loan guarantees, the NRC’s OK for the project did not signal a groundbreaking at Vogtle. Thanks to a redefinition of what constitutes construction, drafted under a former NRC commissioner who now works for the nuclear industry, Southern started building on the site long before the AP1000 reactor design was finally approved by the NRC last December. And foundations were poured into the Georgia earth before environmental impact surveys were even required to be filed. So, Thursday’s move did not actually start construction, but it did start the roulette wheel turning on a massive financial gamble where Southern Company is pretty much assured of winning, and US taxpayers and Georgia utility customers are guaranteed to lose.

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As this month marks two years since the government agreed to the loan guarantees, it will mark almost as long a time since the Southern Alliance for Clean Energy (SACE) filed a Freedom of Information Act (FOIA) request for the details of the deal the DOE struck with Southern Co., and thus it also marks almost two years of stonewalling by the Obama administration and the energy consortium.

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These, of course, are just the costs incurred if everything goes more or less right. And these, of course, are just the costs of building the reactors-it has nothing to do with the fueling, the maintenance, the waste removal and clean up should anything get, you know, “unusual.” But since the taxpayers and ratepayers pretty much built the new reactors for them, those costs should come out of Southern Co/Georgia Power’s profits once they start charging for the actual power, right?

Uh. . . wrong. As George W. Bush was headed out the door, he made sure that the Department of Energy would be liable for all costs from any high-level radioactive waste generated at the new Vogtle units. And, of course, as is true for all facilities in the US, the Price-Anderson Act indemnifies the industry against claims arising nuclear accidents.

And the Nuclear Regulatory Commission’s approval-coming when it does-does nothing to make those accidents less likely. The NRC voted for Vogtle’s COLA over the objections of its chairman, Greg Jaczko, who thought safety rules that should come from the post-Fukushima recommendations should have been stipulated as essential to any new license. And the AP1000’s design, which Toshiba-Westinghouse likes to tout as safer than its close cousin, the pressurized water reactor, is suspected to be anything but.

Meanwhile, trouble at nuclear reactors worldwide continues apace. At Japan’s Fukushima Daiichi, unit two, which was said to have been brought to a “cold shutdown” in December, has experienced what is called a “re-criticality”-in other words, the temperature inside the ruptured containment vessel has begun to rise again, up more than 20 degrees Celsius since February 1. Officials from Japanese power company TEPCO have done a poor job of explaining why this might be happening or what it might mean for the future, but they do admit to the necessity of increasing the amount of water and boric acid pumped into the damaged reactor to counteract the warming. And, since there are holes and cracks in the reactor vessel, that means more radioactive waste water pouring out of the building and into the basements and surrounding plant grounds-more water on top of the 95,000 cubic meters already believed to be there, and on top of the 220,000 cubic meters that TEPCO has claimed they “processed” (and then dumped back into the environment).

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Back in the USA, the San Onofre plant remains completely shutdown after one reactor was found to be leaking tritium on January 31. Meanwhile, the other reactor, offline for refueling and repairs since January 9, was discovered to have alarmingly excessive wear inside its almost new turbine tubes.

And at Prairie Island, a nuclear facility in southeastern Minnesota, Xcel Energy has copped to two separate toxic chemical and radiological spills. One happened last November, but Xcel did not alert residents of the Prairie Island Indian Community-a whopping 600 yards from the power plant-till last week. The second happened just last Friday, February 3, but Xcel waited to give notice till Monday because the leak happened “‘after business hours’ just before the weekend.”

This is but a small sample-less than a week’s worth-of the nuclear world the NRC has now voted to expand. With each of these items should come a list of questions and a cavalcade of caution, but the NRC’s rulings on the AP1000 have defied the facts on the ground. Meanwhile, the entire federal government seems hell-bent on ignoring the fiscal realities, instead choosing to guarantee that money flow from the pockets of taxpayers into the coffers of nuclear energy corporations, whether or not those corporations ever provide a kilowatt of power to those taxpayers.

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Many who are outraged by the bailouts of the banks should see each of these nuclear facilities as a little version of the same “socialize the risk, privatize the profit” model. A nuclear facility might only lose billions of dollars instead of trillions, but as Everett Dirksen observed in a cheaper era, “A billion here, a billion there, pretty soon you’re talking real money.”

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And for those that think this week’s $25 billion settlement with the five big financial institutions guilty of mortgage fraud is somehow a grand amount-just remember that you can’t get two new nuclear power stations for that. . . and after typical delays and cost overruns, $25 billion likely won’t even get you one.

So, take a good look at what is happening in Georgia-even if the Obama administration and the Nuclear Regulatory Commission won’t. . . even if the Obama administration and the NRC don’t want you to. The nuclear industry, its acolytes, its lackeys, its supplicants and subordinates want to make the Vogtle reactors the first of many, the first of an irresistible nuclear renaissance, the start of a hard-charging, government-subsidized pushback-against activists and environmentalists, sure, but in reality, against the truth.

The truth, of course, is that without the lobbyists and the grease they spread, without the captured regulators and the purchased elected officials, the nuclear industry would be relegated to the past, right alongside its antiquated technology. The truth is that nuclear power is not clean, nor safe, nor too cheap to meter-it is dirty, dangerous, and a financial sinkhole of epic proportions. Banks and investment houses know it, ratepayers in Georgia and Florida know it, many of the residents of Japan know it, and even the government of Germany knows it-and now you know it, too. Now is the time to make sure your representatives in government-your president, your members of Congress, your state and local officials-know that you know it. Now is the time to stop this boondoggle and bailout, and then get to the business of safely uncoiling the nuclear serpent’s grip on our leaders and our imaginations. The AP1000 is not a first glimpse of the future, it is the last gasp of the past-and the sooner we stop subsidizing the old ideas, the sooner we can start investing in some new ones.

This weekend’s episodes orginally aired March 18, 2005.

Crossposted from The Stars Hollow Gazette

Too little, too late.

Why the Foreclosure Deal May Not Be So Hot After All

Matt Taibbi, Rolling Stone

POSTED: February 9, 12:58 PM ET

A few weeks back, I was optimistic about it – I had been worried that it was going to contain broad liability waivers for all sorts of activities, and I was pleasantly surprised when I heard that its scope had essentially been narrowed to robosigning offenses.

However, now that the settlement is finalized, and I’ve had time to think about it and talk to people who know far more than I do about this, I’m feeling pretty queasy.

…

So they settled the case in a way that reads in headlines like it’s a bite out of the banks, but in fact is barely even that. There will be little in the way of real compensation for stuggling homeowners, and there are serious issues in the area of the deal’s enforceability. In fact, about the only part of the deal we can be absolutely sure will be honored in full is the liability waiver for the robosigning offenses.

With the rest of it — collecting on the settlement, enforcement of the decrees, all the stuff put in there to balance the deal in the consumer’s direction — there will be an uphill battle from this point forward to get the banks to comply. The banks meanwhile have no such uphill battle. They will get the full benefit of the deal (a release from costly litigation) from the moment the ink is dry.

Really this looks like America’s public prosecutors just wilted before the prospect of a long, drawn-out conflict with an army of highly-paid, determined white-shoe banker lawyers. The message this sends is that if you commit crimes on a large enough scale, and have enough high-priced legal talent sitting at the negotiating table after you get caught, the government will ultimately back down, conceding the inferiority of its resources.

…

My mistake in looking at this deal a few weeks ago, when details of it first leaked out, was in focusing on how much worse it could have been, instead of thinking about how bad it still is. The only acceptable foreclosure deal had to bring about a complete end to robosigning and the other similar corrupt practices that grew up around it (like for instance gutter service, the practice of process servers simply signing affidavits saying they delivered summonses, instead of really doing it).

But this deal not only doesn’t end robosigning, it officially makes getting caught for it inexpensive. Shame on me for ever thinking that might be a good thing.

Crossposted from The Stars Hollow Gazette

Alexander Hamilton

Obama’s Guiding Principle: Leave No One Accountable

By: Scarecrow, Firedog Lake

Thursday February 9, 2012 8:35 am

(W)hatever you thought or feared was going on in America, and whoever you believed had caused the collapse of America’s economy, caused millions to lose their jobs, their homes and their retirements and continued to loot the country, it’s time to look forward. Because everyone who matters – and that’s not you – now agrees, they say, to function in the public interest, even though it’s a bald face lie, since nothing has changed and the looters and their complicit overseers are still in charge.

Obama’s people have performed this function for America’s looters over and over again. They did it for Wall Street, the banks, the rich tax evaders, the insurance companies, the oil companies, the gas companies, the coal companies, the CIA, the DoD, and numerous torturers and their legal/policy enablers and associated war criminals in the previous administration.

Consistent with this strategy, Obama’s team must silence, neutralize or punish anyone who protests or blows the whistle on the massive criminality and corruption involved.  It must also emasculate the left and what’s left of the liberal wing of the Dem Party, using the argument that the Administration is not nearly as awful as the other Party’s people, who openly glorify looting and killing and vilifying the victims.

But of course, when we were ruled by the latter, everyone with any humanity was repulsed by the open looting and killing and indifference and was willing to say so.  When the Administration sanctions it, however, we are supposed to bite out tongues, because it could be worse.

Well, it’s worse, and it’s more insidious and corrupting of our souls than where we were four years ago.  It is evil.

Crossposted from The Stars Hollow Gazette

You’ll have to forgive me if I’m not over excited by Matt Taibbi’s latest which I think entirely misses the point.

After all, this is a man who celebrated Schniederman’s appointment as a  victory instead of just another sell out which we are seeing right now in Obama’s cave on birth control is the only mode this administration knows.

Sophisticated snark?  Never bought that for an instant Matt.

He does make several points that I’ll repeat to save you the agony of plowing through the source–

Goldman’s numbers, to me, offer a hilarious counterpoint to Sherman’s piece. The bank’s earnings in total for last year were $4.4 billion, down some 65% off of last year’s numbers. Its revenues for the year were down 26%. Despite these bummerific numbers, Goldman reduced bonuses and compensation by only 21%, down to $12.2 billion, certainly a number to weep over. If the era of outsized bonuses is over, how come the biggest banks aren’t even cutting them to match revenues, much less profits? One could even interpret Goldman’s numbers as a major increase in the size of the bonus pool, relative to earnings.

But what about other banks? Well, Citigroup also saw a drop in revenues for the year (although its net income actually went up, from $10.6 billion to $11.3 billion). But what was most concerning was the bank’s crappy fourth quarter, when it suffered an 11% drop in earnings.

…

(N)ow Wall Street is being threatened with a return to those “quaint” days of loaning money and supervising bond issues and such.

…

Look, the financial services industry should be boring. It should be quaint. Let’s take the municipal debt business. For ages, it was a simple, dull, low-margin sort of industry, in which banks arranged municipal bond issues and made small but dependable profits as cities and towns financed improvements and construction projects.

That system worked seamlessly for decades, until people like Sherman’s interview subjects suddenly decided to make the business exciting. You know what happens when you make municipal debt exciting? Jefferson County Alabama happens. Or, on a macro level, Greece happens.

When making a few points on mere bond issues stops being enough, and you have to cook up crazy swap schemes and indices to bet against those schemes, ingenious scams allowing politicians to borrow billions of dollars that they will never in a million years be able to pay back, you might end up getting a few parks, schools, and subways in New York.

But what you get everywhere else is a giant clusterfuck that costs the rest of us years and even more billions of tax dollars to remedy.

This is what the protests are all about – it’s anger that Wall Street has been profiting from an imaginary economy that leaves bankers overpaid, but creates damage everywhere else. Sherman doesn’t get this.

Matt doesn’t seem to get it either.

Why are we supporting Republican policies again?  You’ll have to speak a little louder, I’m a mite deaf in that ear.