Unusual & Exigent Missing Links

I'm Against It & I Always Get My Man
Grouch Marx in "Horsefeathers" ~ 1932

OCTOBER 1:

Leaders and economists from Western Europe to East Asia Tuesday urged the United States to go beyond reviving a failed domestic bailout and start working on a new global financial system. Associated Press Traders at MICEX, the Moscow Interbank Currency Exchange, watch and wait during a tense session in Moscow on Tuesday when stock indexes sank despite a two-hour trading halt.

"The Americans don't have a choice — they must absolutely have a global plan," Christian Noyer, head of the French central bank, said in Paris.

David Smick, a global strategist and author of "The World Is Curved: Hidden Dangers of the Global Economy," said the next U.S. president should immediately call for a second "Bretton Woods" conference to devise a new doctrine of international finance.

Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.

Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF). These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.

All your pie are belong to them

TODAY: Bush calls International Emergency Finance Summit

Towards a new economic world order

We will look back on the banking crisis of September 2008 as a defining moment for economic globalization

Peter Mandelson, European Union Commissioner for Trade, wrote the above linked article. Here are some edfying recent quotes of his:

We are seeing a huge reordering of the global economy and politics. Rising powers are reshaping the post war world and existing institutions like the WTO, like multilateral negotiations have to adapt to these new realities. We must all adapt

It would be better while operating on a country by country basis, we did so in a coordinated way and we brought a collective European view. We are all interlocked. We are in this together

And it's an international system in which not just the G7 or G8 and the OECD will be reaching out and inviting the so-called emerging economies in for a cup of tea

China is keeping a level head as a trusted partner

[globalisation] is the biggest eliminator of poverty and creator of opportunity the world has ever seen

We have nothing to gain by shutting down financial globalisation. But the networks that make up globalisation will keep transmitting the shocks along with the benefits unless we take a tougher line with excessive risk and strengthen the multilateral instruments that govern the global financial system

China has always acted in an objective and responsible way through the use of its sovereign wealth

The globalization demands a new regulatory paradigm

In this difficult economic and political climate, it is transparency, openness, and cooperation that will help us weather the storm. The EU and China need to resist protectionism and forge a positive trade and investment agenda

Note: The picture at left comes from the World Bank site

UNESCO regional meeting opens in Isfahan

WTF is "World Evolutionary Humanism" & Why Should You Care?

Council of Europe and Alliance of Civilizations agree on future co-operation

Goldman Sachs Made More Than $100 Million on Fewer Days in Quarter

Goldman Sachs raises $10.5 billion for new fund

Neel Kashkari, the $700 Billion Man

Goldman Sachs Leads $12 Million Investment in Nimsoft

Nimsoft is a "network monitoring"company.....

Giant bank Goldman Sachs invests in ATS red-light camera operator

OK. I want you to stop a moment and ponder why GS obviously considers these things safe, good money making investments....

Goldman Sachs Downgrades Major Solar Stocks To "Sell"

Dick Fuld’s Vendetta Against Short-Sellers and Goldman Sachs

US financial bailout: It is rocket science

PUTIN: DUMP THE DOLLAR, TRADE IN RUBLES

Obama interviewed by Brokaw at private Goldman Sachs dinner last year

Obama's Brand of socialism was clearly telegraphed in that "debate"

The center of his economic universe is the budget of the federal government

Obama received endorsement of Marxist coalition

Naturally!

FATAH milks Iran and USA simultaneously

In a message to the State Department, President Bush declared, "I hereby certify that it is important to the national security interests of the United States to waive" the restrictions

Der Beatles ~ Komm Gib Mir Deine Hand

GRAMMY CRACKER: OBITUARY FOR A REPUBLIC

Believe It Or Else!

Believe It Or Else
Merrie Melodies ~ 1939

WFRL: Let's face the music and dance

Nat King Cole's version of
Let's Face the Music & Dance (Irving Berlin)

Featuring:
Rita Hayworth Fred Astaire Gene Kelly Cyd Charisse
Ava Gardner Sophia Loren Deborah Kerr Cary Grant
Ginger Rogers Katharine Hepburn Jimmy Stewart

There may be trouble ahead
But while there's moonlight and music
And love and romance
Let's face the music and dance
Before the fiddlers have fled
Before they ask us to pay the bill
And while we still
Have the chance
Let's face the music and dance
Soon We'll be without the moon
Humming a different tune
And then
There may be teardrops to shed
So while there's moonlight and music
And love and romance
Let's face the music and dance
Dance
Let's face the music and dance

Unusual & Exigent Circumstances

The Doors ~ Strange Days

TODAY:
Fed to Buy Massive Short Term Debt

The Federal Reserve on Tuesday announced it would buy up massive amounts of short term debt in another attempt to free up a credit logjam that is endangering the economy. Invoking Depression-era powers, the Fed said it would buy "commercial paper," a short-term financing mechanism that many companies rely on to finance day-to-day operations. It is a $99.4 billion daily market that has all but dried up. The credit market generally relies on investors, not banks.

The Fed said it was invoking power under "unusual and exigent circumstances."

MARCH 14, 2008:

MINUTES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

[snip]

Given the unusual and exigent circumstances, the Board authorized the Federal Reserve Bank of New York (New York Reserve Bank) to extend credit to JPMorgan Chase Bank, National Association (JPMC Bank), Columbus, Ohio, on a nonrecourse basis to provide financing to Bear Stearns, and, if the Reserve Bank in consultation with
Chairman Bernanke determined it was appropriate, to other primary securities dealers, when the Reserve Bank finds that adequate credit accommodations are not available to the borrower from other banking institutions. The credit should be secured to the satisfaction of the New York Reserve Bank and should not exceed a period of 28 days

[snip]

As required by the Federal Reserve Act when fewer than five Board members were available to approve an extension of credit to any individual, partnership, or corporation under section 13(3) of the Federal Reserve Act, all available Board members then in office unanimously determined, in connection with the authorization of
the extension of credit, that (1) unusual and exigent circumstances existed; (2) Bear Stearns, and possibly other primary securities dealers, were unable to secure adequate credit accommodations elsewhere; (3) this action was necessary to prevent, correct, or mitigate serious harm to the economy or financial stability; (4) the other Board member
in office could not participate in the Board's action by any reasonable means at the time Board action was required (Governor Mishkin was unavailable because he was in transit from Helsinki, Finland, from 6:20 a.m. EDT to 5 p.m. EDT); (5) this action was required before the other Board member could return and/or participate by any available
means; and (6) any credit extended will be payable on demand

[snip]

MARCH 17, 2008:
We live in “unusual and exigent circumstances.”
by Blogger "eric"

In reply to drip’s question, I commented on the specific legality of the Fed’s actions over the past few days. I thought it worth consolidating into a post. Keep in mind IANAL, but:

A 1932 provision of the Federal Reserve Act allows the Fed to lend to non-banks if at least five of its seven governors approve. That provision was last regularly used during the Great Depression. It is meant to underscore that the central bank should lend to nonbanks only in extreme circumstances.

The law in question is at 47 Stat. 715, which includes the following:

In unusual and exigent circumstances, the Federal Reserve Board, by the affirmative vote of not less than five members, may authorize any Federal reserve bank, during such periods as the said board may determine, at rates established in accordance with provisions of section 14, subdivision (d), of this Act, to discount for any individual, partnership, or corporation, notes, drafts, and bills of exchange of the kinds and maturities made eligible for discount for member banks under other provisions of this Act when such notes, drafts, and bills of exchange are indorsed and otherwise secured to the satisfaction of the Federal reserve bank: Provided, That before discounting any such note, draft, or bill of exchange for an individual or a partnership or corporation the Federal reserve bank shall obtain evidence that such individual, partnership, or corporation is unable to secure adequate credit accommodations from other banking institutions.

(See also.)

Now you might think a president would, if we were invoking a law that required “unusual and exigent circumstances,” go on the teevee and/or radio and tell the American people what was going on and what we were doing about it and why.

MARCH 17, 2008:
The case of the missing Federal Reserve Board members

The Board of Governors is supposed to have seven members. It currently has only five. The Senate has been sitting on two nominations, of Elizabeth Duke and Larry Klane.

On Thursday February 7, 2008 President Bush complained about the failure of the Senate to proceed with the confirmation of three nominees - the two still waiting for Godot and Randall Kroszner, who has since been confirmed (Kroszner first took office on March 1, 2006, to fill an unexpired term ending January 31, 2008.). The nominations of Duke and Klane were sent to the Senate on 16 May 2007. It is a scandal that the Senate has not been able or willing to find the time to hold confirmation hearings for these two new Board members. The main guilty parties are the US Senate Committee on Banking, Housing, and Urban Affairs and its Democratic Chairman, Christopher Dodd.

It is quite irresponsible to let these two positions remain vacant for this long. We are not talking about a couple of dog catchers in Willimantic, Connecticut, but about two out of seven members of the Board of Governors and two out of twelve voting members of the FOMC, the policy making body of the most important central bank in the world. Is Dodd playing silly politics? Does he hope to drag the nomination process out for another year, so a Democratic President can make different nominations? Duke has a banking background and Klane is a senior executive at Capital One Financial Corp. Both nominees therefore have experience and knowledge that would actually be useful in the current crisis. Even Dodd must have noticed by now that there is a financial crisis on.

[snip]

Far as I can tell as of today there are still only five, Larry Klane did not make it

Ben S. Bernanke, Chairman

Donald L. Kohn, Vice Chairman

Kevin M. Warsh

Randall S. Kroszner

Elizabeth A. Duke

In unusual and exigent circumstances, the Board of Governors of the Federal Reserve System, by the affirmative vote of not less than five members

JULY 30 2008: Fed Announces Extension Of Emergency Lending Amid “Unusual And Exigent” Conditions

Emergency lending facilities will be extended beyond the New Year, the Federal Reserve announced Wednesday. The move was part of a concerted effort by the Fed, the European Central Bank, and the Swiss National Bank, to lend stability to as of yet shaky markets.

Federal Reserve chairman Ben Bernanke suggested that the emergency loan facilities could be extended in early July. At an FDIC conference on July 8, Bernanke announced that he was considering extending the duration of emergency loan facilities past their scheduled termination at the end of the year.

“We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end, should the current unusual and exigent circumstances continue to prevail in dealer funding markets,” Bernanke said at the conference.

The news that both the Term Securities Lending and Primary Dealer Credit Facilities have been extended through January 30, 2009 are an indication that these “unusual and exigent” circumstances still exist in some financial markets.

“In light of continued fragile circumstances in financial markets, the Board has extended the PDCF through January 30, 2009, and the Board and the Federal Open Market Committee have extended the TSLF through that same date,” the announcement read. “These facilities would be withdrawn should the Board determine that conditions in financial markets are no longer unusual and exigent.”

[snip]

SEPTEMBER 16, 2008:
Fed Invokes ‘Unusual and Exigent’ Clause — Again

In lending up to $85 billion at a hefty interest rate –- LIBOR plus 8.5 percentage points –- to insurer AIG, the Federal Reserve once again relied on its rarely used legal authority under Section 13(3) of the Federal Reserve Act to lend to “any individual, partnership or corporation” in “unusual and exigent circumstance” provided the borrower “is unable to secure adequate credit accommodations from other banking institutions.”

Until its loan to then-ailing investment bank Bear Stearns in March, the Fed hadn’t used that lending authority since the Great Depression, lending exclusively to commercial banks and other deposit-taking institutions. The relied on a different section of the Federal Reserve Act to offer loans – which weren’t actually made – to government-sponsored mortgage giants Fannie Mae and Freddie Mac.

Where did that extraordinary clause come from? The Minneapolis Fed’s “Region” magazine offers a thumbnail history (”The History of a Powerful Paragraph”) at and points to a longer version of the story that it published in 2002:
“This isn’t simply a story about extraordinary measures taken long ago that have no meaning for today. Rather, it’s a story about the long-standing debate about the nature and purpose of Federal Reserve banks,” it says.

In a Tuesday night statement, the Fed said, “The (Federal Reserve) Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance.” –David Wessel

An exigent circumstance,

in the American law of criminal procedure, allows law enforcement to enter a structure without a warrant, or if they have a "knock and announce" warrant, without knocking and waiting for refusal under certain circumstances. It must be a situation where people are in imminent danger, evidence faces imminent destruction, or a suspect will escape.

Generally, an emergency, a pressing necessity, or a set of circumstances requiring immediate attention or swift action. In the criminal procedure context, exigent circumstances means:

An emergency situation requiring swift action to prevent imminent danger to life or serious damage to property, or to forestall the imminent escape of a suspect, or destruction of evidence. There is no ready litmus test for determining whether such circumstances exist, and in each case the extraordinary situation must be measured by the facts known by officials.

People v. Ramey, 545 P.2d 1333,1341 (Cal. 1976).

THE FEDERAL RESERVE ACT

3. Discounts for Individuals, Partnerships, and Corporations

In unusual and exigent circumstances, the Board of Governors of the Federal Reserve System, by the affirmative vote of not less than five members, may authorize any Federal reserve bank, during such periods as the said board may determine, at rates established in accordance with the provisions of section 14, subdivision (d), of this Act, to discount for any individual, partnership, or corporation, notes, drafts, and bills of exchange when such notes, drafts, and bills of exchange are indorsed or otherwise secured to the satisfaction of the Federal Reserve bank: Provided, That before discounting any such note, draft, or bill of exchange for an individual, partnership, or corporation the Federal reserve bank shall obtain evidence that such individual, partnership, or corporation is unable to secure adequate credit accommodations from other banking institutions. All such discounts for individuals, partnerships, or corporations shall be subject to such limitations, restrictions, and regulations as the Board of Governors of the Federal Reserve System may prescribe.

[12 USC 343. As added by act of July 21, 1932 (47 Stat. 715); and amended by acts of Aug. 23, 1935 (49 Stat. 714) and Dec. 19, 1991 (105 Stat. 2386.]

RUSH ~ Circumstances

WFRL: It's in your face, but you can't grab it

Faith No More ~ Epic

Czar Paulson's DNA

Squirrel Nut Zippers ~ Hell

WRITTEN OCTOBER 1, 2007:

Hank Paulson's DNA
by Robert D. Novak

WASHINGTON -- Eyebrows at the Treasury were raised last Tuesday when Secretary Henry M. Paulson Jr. named a major Democratic fundraiser to an important advisory role. On the next day, eyebrows were still elevated when Under Secretary Robert K. Steel participated in an event spearheaded by Bill Clinton's two Treasury secretaries.

A longtime Republican office holder now in the Bush administration noted these developments and e-mailed a fellow Republican outside the government: "This leads some to wonder whether this Treasury has become the pre-placed Hillary Clinton team." If she is elected president, it is presumed Sen. Clinton will want her own Treasury team. But she cannot be too unhappy with George W. Bush's current lineup there.

For a president who in 2001 brought faithful fellow Texans with him to Washington and named Republican activists to key posts, Bush's lame-duck Cabinet has virtual non-partisans heading three important departments. Defense Secretary Robert Gates is an intelligence professional and career bureaucrat. Attorney General-designate Michael Mukasey spent his career as a prosecutor and judge. But while Gates and Mukasey look like non-partisan civil servants, Paulson comes over as politically androgynous.

In his third try, Bush found the heavyweight Treasury secretary he desired in multi-millionaire investment banker Paulson. The tradeoff is that the former Goldman Sachs CEO does not act or sound much like a conservative Republican to the GOP remnant at the Treasury. "It's not in Hank Paulson's DNA," one official told me.

Is he loyal to Bush? "Hank is for Hank," he replied.

Paulson marched to his own drummer last Tuesday by naming Eric Mindich, chairman of Eton Park Capital Management, to head the Asset Managers' Committee of the President's Working Group on Financial Markets. A former Goldman Sachs colleague of Paulson's, Mindich is a top-level Democratic fundraiser. He was in Sen. John Kerry's inner circle for the 2004 presidential campaign and backs Sen. Barack Obama for 2008.

Republicans in the administration were amazed that the White House acquiesced in appointing a Democratic activist to lead a group "to develop best practices" for asset managers. These critics wonder why President Bush did not ask Paulson why he could not name a Republican financier for this position. I posed the question last week, and a Treasury spokesman replied that "we were looking for somebody who is well respected in the industry" to fill what is "not really a political position." By that measure, no Treasury job can be considered political.

That includes Bob Steel, under secretary for domestic finance. Last Wednesday, Steel participated in a round-table discussion on "recent financial market disruptions" at the liberal Brookings Institution. Former Secretary Robert Rubin headed the panel that included two of his Clinton administration associates: his successor as secretary, Lawrence Summers, and former Deputy Secretary Roger Altman.

Steel surely did not feel out of place as a Republican stranger in the Democratic paradise at Brookings, for he is no Republican. Brought to the Treasury by Paulson a year ago, Steel is a retired Goldman Sachs vice chairman who worked there with Rubin and Paulson. Federal Election Commission records show no political contributions by Steel since the 2002 cycle, when he gave exclusively to Democrats (including Sen. Charles Schumer of New York). Steel, who is Board of Trustees chairman of Duke University in Durham, N.C., contributed to the North Carolina Democratic Party and its Senate candidates, Dan Blue and Erskine Bowles.

Although Paulson was a generous Republican contributor and prodigious Bush fundraiser (over $100,000) in the 2004 cycle, his earlier political giving was more varied. He contributed to Bill Clinton in 1992, Democrat Bill Bradley's 2000 presidential campaign, the feminist Emily's List and Wall Street's favorite Democrat, Chuck Schumer. Most of the Paulson family's Democratic contributions come from the secretary's wife, Wendy, who has supported Hillary Clinton.

All this was known to Bush in May 2006 when he tapped Paulson as a Treasury chief who would command respect on Wall Street. It should be no surprise then that he is regarded in his own administration as less a true Republican secretary than a transition to the next Democratic Treasury -- a trademark of a lame-duck regime.

Government site to access info about the bilge out bill
AKA "THE EMERGENCY ECONOMIC STABILIZATION ACT OF 2008"

Good Job Czar Paulson! Stable!

PDF: Section by section analysis

PDF of entire thing

SPLEEN SEARCH: PAULSON

WFRL: See the Glory of the Royal Scam

WFRL Dedicates this spin to Czar Paulson
Welcome to the People's Republic of Goldman Sachs, Proles!

RADIO FREE GOSHEN AKBAR!

3 Wood: The Real Deal

WAR ~ Slippin' Into Darkness

The damage to the economy from the out of control lending practices plus the headless morons in Congress endlessly dithering resulted in a genuine market melt down today.

Stocks fall sharply as global crisis persists

"NEW YORK (MarketWatch) -- The Dow Jones Industrial Average fell as much as 800 points to trade below the 10,000 mark Monday as nervousness over the credit crisis spread after the U.S. government's $700 billion bailout and interventions in Europe only seemed to add to investor anxiety.

But hopes of a coordinated intervention to stop the bleeding in global markets helped the Dowrecoup half of its losses, to close down 369 points, or 3.6%, to 9,955."

The problem we have is that the financial markets suffered early for the 10 days or so before Congress finally got around to taking action late last week. Every day of their dithering cost hundreds of billions in lost capital in the global market. The results of that were seen today. Only the vague hope of some intervention overseas kept the day from being a total bloodbath.

However, I think the respite is only temporary. I predict that you will see several more 500 to 600 point sell offs before the market bottoms out. We lost 10 years of market growth in the last few weeks and stand to lose more before this is over. If the bail out had not happened, I am convinced the damage would have been much more severe. As it is, I expect several hundred banks to close. Without the bailout it would have been thousands.

Look for significant lay offs and a strong recession for the next year, maybe longer. I expect to see unemployment of around 10% (we are at 6.1% now). Do not take on any debt if you can avoid it, try to keep your income level up, and look to cut household expenses.

We are in the soup now folks. This is the real deal.
~ 3 Wood

Wild Ride on Fear Street

Derek & the Dominoes
Nobody Knows You When You're Down & Out

Hare-Um Scare-Um

Hare-Um Scare-Um
Merrie Melodies ~ 1939

"I'll get my own meat!"

Missing Links: Beware the Laika Fire!

The lake of fire is the second death.

If anyone's name was not found written in the book of life,
they were cast into the lake of fire.
~ Yochanan, from Patmos, way back in the day

Laika & The Cosmonauts
Surfs Ya Right

Just call me Laika: Now I wanna be your Soviet Space Dog

Even the administrator of NASA, Michael Griffin, has called the situation "unseemly in the extreme"

70 years on....

Wall Street Ends Comradilito Juan "Maverick" McCain’s Lucky Streak

meantime,

Obamanable Snowjobman is a racist, marxist, elitist blowhard piece of shit, everyone knows it, but it just doesn't matter, does it?

Report: Syria reaches out to Obama

Israeli generals say Obama camp duped them


Fly me, I'm Randy:
Dutch prostitutes offering "whore miles"

SHOCKA!
Czar Paulson to name a former colleague at Goldman Sachs, Neel Kashkari, to oversee the Big BilgeOut

Neel Kashkari? I'm working on it. More to come later. We might as well rename the country The Peoples Republic Of Goldman Sachs right now.

Bailout Funding Promises To Pressure Treasury Prices

Death spiral in EU credit system

European, Asian Markets Plunge on Crisis Fears

Turkey's Simsek to attend IMF-World Bank meetings


UK: PM Gordon Brown announced more changes to his government Sunday, completing a shake-up intended to strengthen the government as it faces the global economic crisis

Britain's first Muslim minister, Shahid Malik, has been promoted to the department of justice as part of Gordon Brown's cabinet reshuffle


Should America Bail Out ‘Sharia’ Finance?

AIG's Sharia (may piss be upon it)


AIG plans to sell UK operation


FLASHBACK~ September 30, 1999:
Fannie Mae Eases Credit To Aid Mortgage Lending

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

Lebanon: Israel stole our falafel!

A Shahid Grows in Brooklyn

Likely they will watch me instead of Achmed Al Kilya in Brooklyn

More on these "expanded powers"....

‘Our nuclear activities are legal’

Iran: Take your Infidel Think Tank and shove it


Ahmadinejad: 2,000 Jews Control the World

And God, I know, I'm one! ULULULULULULU!

Livni: Time running out on Israel-Palestinian deal

Again with the rushing, just like with the BilgeOut - gotta do it FAST! BWAK! Disaster looming! Ya do it ALL fast you archassholes so no one gets a chance to THINK about WTF is really happening here.

Qurei: No agreement without Jerusalem

Palestinian leader, Islamist chief discuss Temple Mount takeover

Go Rabbi Shafran!

Clinton's real legacy in Israel

Dig the language in this piece. Really pay attention

Sharia spoof banned from Youtube

NO POTATO FOR YOU, YOU RACIST POS
Homo Stultus WILL Reeducate you

UK teachers union official: consensual sex with students ok

6.8 Hits Xinjiang

Earthquake rattles Afghanistan

Severe earthquake tremors in Islamabad, Rawalpindi, Gujar Khan, Jhelum

Powerful Earthquake in Kyrgyzstan

Earthquake Cluster Closes in on New Zealand

Ritchie Blackmore's Rainbow
Lady of the Lake

WFRL: Komrade Kalinka

Red Russian Army Choir & Leningrad Cowboys
Kalinka

So, Sioux Me

Sioux Me
Merrie Melodies ~ 1939

3 Wood: The House of Rising Fraud

Muse ~ House of the Rising Sun

3 Wood Sez: Now that the debate over the Bail Out Plan is over, focus shifts to cleaning up the mess. Indictments for fraud should become hot and heavy:

Mother and son plead guilty in NY mortgage fraud

"NEW YORK (Reuters) - The mother and son operators of a New York mortgage brokerage firm and one of their employees pleaded guilty on Friday to taking part in a multimillion dollar subprime mortgage scheme. Twenty-seven people were charged in U.S. District Court in Manhattan with involvement in the scheme to defraud subprime banks and lending institutions from 2004 through January 2007 by the firm, AGA Capital NY Inc.

The indictments were unsealed last year before the full impact was known of the easy credit and "no document" loans at the heart of the U.S. mortgage crisis. Thousands of Americans with weak credit who obtained so-called subprime mortgages have defaulted on their loans and lost their homes.

"The defendants committed the fraud by submitting loan applications and supporting documents, which contained false information and omissions, to subprime lenders in order to induce the lenders to make loans that otherwise would not have been funded," according to the indictment."

Essentially, these people admit that they made up numbers out of the blue to get the loan application into an acceptable condition. I think you will see a lot of this coming to the surface now.

~ 3 WOOD

June 2008: Mortgage Fraud

The Spleen Sez:

There's TONS of it. It's endless.

Dig - " Mortgage Fraud Blog":

Connecticut Man Sentenced For Misreps

Mass Woman Charged In Mortgage Fraud Scheme

OK: Man Sentenced To 13 Years For Fraudulent Mortgage Rebate-Coupon Conspiracy

Defendants Sentenced In Louisiana Mortgage Fraud Case

2 Indicted In Arizona Mortgage Fraud Scheme

Maryland: Settlement Officer Pleads Guilty To Diverting Funds

etc etc infinitude

Mortgage Fraud Blog #2:

Oregon loan officer pleads guilty in fraud involving 70+ properties

Title company owner, his son and a loan officer indicted in St Louis area fraud

5 sentenced in Louisiana mortgage fraud

PA man admits to supplying false documents for mortgage applications

etc etc ad naseum

June 2008: Las Vegas called 'mortgage fraud ground zero'

August 2008: Mortgage fraud jumps 42% in the first quarter

FBI: 2006 Mortgage Fraud Report:

Analysis of available law enforcement and industry resources indicates that the top ten mortgage fraud areas are California, Florida, Georgia, Illinois, Indiana, Michigan, New York, Ohio, Texas, and Utah. Other areas significantly affected by mortgage fraud include Arizona, Colorado, Maryland, Minnesota, Missouri, Nevada, North Carolina, Tennessee, and Virginia. There is a strong correlation between mortgage fraud and loans which result in default and foreclosure.

Oy. Friggin' investigative GENUISES, those FBI are, I tells ya.....

Mortgage Fraud Resource Center

2006: The Bonnie and Clyde of mortgage fraud

October 2008 ~ Fannie Freddie Fraud

Adding to their woes, mortgage finance giants Fannie Mae and Freddie Mac are facing a federal grand jury investigation into their accounting practices.

The mortgage finance companies said Monday that a federal grand jury in New York is investigating accounting, disclosure and corporate governance issues at Washington-based Fannie and McLean, Va.-based Freddie.

Fannie and Freddie said they received subpoenas Friday from the U.S. Attorney's office in Manhattan as well as requests from the Securities and Exchange Commission that they preserve documents. Fannie Mae and Freddie Mac were taken over by the government earlier this month as their mounting defaults and foreclosures threatened the entire mortgage market.

The government investigation focuses on activities starting in 2007, Freddie Mac said in a statement.

Critics have long questioned the companies' bookkeeping. Last November, for example, a Fortune magazine story said new accounting procedures at Fannie Mae masked potential losses on bad loans.

And several years ago, both Fannie and Freddie were forced to restate billions in earnings after federal regulators discovered accounting irregularities at both companies.

The scandals led to the replacement of the companies' top executives. Freddie Mac's former CEO, Gregory Parseghian was ousted in December 2003. Fannie CEO Franklin Raines and chief financial officer Timothy Howard were swept out of office a year later.

Both companies said Monday they would cooperate fully in the investigations, but their spokesmen declined to comment. Representatives of the SEC and Justice Department also declined to comment.

Three weeks ago, the government seized control Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies, with a rescue plan that could require the Treasury Department to inject as much as $100 billion into each to keep them afloat.

A spokeswoman for the Federal Housing Finance Agency, which controls the companies said the housing agency, "will work with the companies to assure a smooth and efficient process and will work with the government agencies as they undertake their inquiries."

Law enforcement officials said last week the FBI is looking at potential fraud by Fannie, Freddie, and insurer American International Group Inc. Additionally, a senior law enforcement official told said failed investment bank Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official told the Associated Press last week.

Officials said the new inquiries bring to 26 the number of companies connected to the mortgage crisis under investigation over the past year.

Over the past year as the housing market cratered, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors. FBI Director Robert Mueller has said the FBI's hunt for culprits in the U.S. mortgage crisis focused on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments.

Additionally, the FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud. Countrywide Financial Corp., formerly the largest U.S. mortgage lender and now owned by Bank of America Corp., is also under scrutiny.

WSJ: How Government Stoked the Mania

Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.

From the article: 42% of their mortgage financing had to go to borrowers with income below the median in their area.

From above links: Mortgage fraud jumps 42% in the first quarter

Funny how that number matches EXACTLY.

Robert Preston ~ Trouble in River City

Missing Links: Hot to Trotsky

Red Russian Army Choir & The Leningrad Cowboys
Ociy Cernye (Dark Eyes)

The Israeli cabinet has voted to transfer ownership of Sergei's Courtyard in downtown Jerusalem to the Russian government

Israel will be closely monitoring the International Atomic Energy Agency in Vienna on whether the UN nuclear monitoring agency will allow Syria to join its Board of Governors

UN nuclear meeting criticizes Israel

a Muslim-led push Saturday linking the Jewish state to nuclear proliferation in the Mideast has been defeated. Iran spearheaded the verbal attack at the 145-nation International Atomic Energy Agency general conference.

Israel slams North Korea at UN nuclear meeting

France urges Israel not to attack Iran

Olmert, who flies to Moscow tomorrow, to ask Russia to halt Iran missile sale

Abbas: Palestinians determined to reach two-state solution with Israel

Karzai's brother linked to heroin trade

Meet Noah, one of Lebanon's drug barons

French, Russian, and American officials were quoted by the Beirut press on Thursday as rejecting any form of Syrian military intervention in Lebanon

Lebanese security officials said the perpetrators of a series of bombings and attacks in northern Lebanon linked to Sunni militants have taken refuge in a nearby Palestinian refugee camp

US still considering diplomatic presence in Iran

Democrats want review of exports to Iran
Sales are up twentyfold, and receipts include guns, which officials call a typo....
WASHINGTON — Two House Democrats are asking congressional investigators to examine U.S. exports to Iran to see whether approval procedures are being abused in light of a dramatic increase in the dollar value of shipments there over President Bush's first seven years in office.

Iran: Oil price below US$100 "unsuitable"

US and Indian diplomats laud nuclear deal

Buffett stacks his nuclear deals

Egypt: Court gives Christian boys to Muslim father

Gazprom and Italys Eni have no plans to involve a third partner in Black Sea pipeline project to pump natural gas to Europe

Russia blames Georgia for S.Ossetia blast

Georgia blames Russia in blast

Georgia asks Sweden to broker talks with Russia


Banks seize Deripaska's 20 million Magna shares

Russian billionaire Oleg Deripaska has been forced to hand over his stake in Magna International Inc. to his banks, after taking a margin call on his $1.54-billion (U.S.) investment in the Canadian auto parts maker. In a stunning turn of events, Paris-based bank BNP Paribas SA seized the Russian oligarch's 20 million shares in Magna, unwinding a deal that closed 13 months ago and making one of the world's richest men the latest casualty of the global credit crisis. The move hands full control of the auto parts giant back to its founder, Frank Stronach.

Kremlin: Ukraine and Georgia in NATO could lead to deployment of tactical nuclear weapons on their territory and trigger a new arms race

Russia's President Predicted an Imminent American Calamity & Now He Wishes to Cash In On the Enormous Opportunity

UK's most senior military commander in Afghanistan: We can't win. Be prepared for a deal with the Taliban

Council of Ex-Muslims of Britain to meet 10/10

New World Mordor: World Government proposed by Shevardnaze

Former Georgian President Eduard Shevardnadze proposes to establish a World Government, which could be called "International Parliament". Shevardnadze wrote about it in a letter addressed to UN Secretary-General Ban Ki-moon, to UN member countries and all international governmental and non-governmental organizations, reports Echo of Moscow. The International Parliament, according to Shevarnadze, should focus on global issues like local armed conflicts, economic globalization, uncontrolled population and global warming.

We have it already, Tovarich Eddie, you addressed your letter to it.

Eduard Shevardnadze lived many lives - as a KGB and Communist Party official, as Soviet foreign minister, but his final role - as president of his native Georgia - ended in ignominy

Keep a close eye on that scary bald guy

With the political battle over the Bush administration's $700 billion financial rescue package at an end and the real work of rescuing the financial markets just beginning, all eyes are turning to Treasury Secretary Henry M. Paulson Jr.

The bill gave him unprecedented powers to shore up the ailing financial system. With few constraints, Paulson will make all the key decisions on who to hire, when to launch the program and perhaps most importantly how much the government will pay for troubled assets from ailing Wall Street firms. A misstep could mean hundreds of billions in losses for taxpayers or a cascade of failures for banks.

Speculation was rampant on Wall Street yesterday about who Treasury would hire to manage the assets that the government plans to buy. Industry sources say the department has asked leading Wall Street firms for feedback and that Legg Mason, Pimco, BlackRock and MKP Capital Management were recommended to Treasury.

These firms rose to the top of the list because of their expertise in mortgage-related assets. But hiring them as asset managers for the government would raise the potential for conflicts of interest, particularly because they would be managing the assets while also selling their own troubled securities to the government.

Legg Mason Shariah

Government by Goldman Sachs

Goldman Sachs illustrates corporate ‘capturing’

Front Street Private Bank launched the Front Street Sharia Resource Fund on August 1st 2008 with $10 million. It is a global resources fund, managed in accordance with Sharia principles and advised by Front Street's Canadian investment advisor in Ontario

Sharia financials - a way to beat the credit crunch?

Credit Suisse Sharia

Pastor Hagee recovering from open heart surgery
He'd better go easy on the biscuits & gravy from now on

Tom Waits ~ Russian Dance