Masters of the Universe category archive

They get a “Get Out of Jail” card.

A fund manager for Smith Barney is getting off without felony charges after he allegedly ran over a cyclist with his Mercedes and fled the scene in Eagle, Colorado, because, the DA says, felony charges would be bad for the fund manager’s business.

Martin Joel Erzinger will not be charged with a felony because “Felony convictions have some pretty serious job implications for someone in Mr. Erzinger’s profession,” according to District Attorney Mark Hurlbert.

Afterthought: A hit-and-run can have some pretty serious job implications too.

Via the Wage Slave.

I think it’s called “diversification”:

Grocery store owners William and Esperanza Casco were making enough money to stay current on their mortgage, but when JPMorgan Chase & Co. offered a plan that reduced their payments, they figured they could use the extra cash and signed up.

The Cacsos say they never missed a subsequent payment, so they were horrified when the bank decided the smaller payments weren’t enough and foreclosed on their modest Long Beach home.

Via Atrios.

Speaking of the diligence and integrity of American business (see “Dustbiters,” below), Ann Woolner comments at Bloomberg:

Take, for example, the line between legal conduct and crime. Halliburton may have crossed that border if it negligently sold faulty cement used in the construction of the Macondo well, which spewed 4.9 million barrels of crude into the Gulf of Mexico after an April 20 rig explosion that killed 11 workers.

Last week a commission investigating the disaster reported that the Houston-based company had reason to suspect from its own work that the kind of cement similar to that which it used at the well wouldn’t hold. The material had failed three out of four stability tests, and Halliburton didn’t test the final formula used.

If it had, it might have found what experts at Chevron discovered when testing that formula at the request of investigators. Nine times they tested the formula used, and nine times the stuff was unstable.

While I was fine-tuning the Debian load on my file server (Slackware 13.1 didn’t seem to like the box for some fool reason; also, the mouse seemed to be having intermittent attacks of the vapors causing weird screen lockups so I swapped out the rat), the FDIC was busy recognizing the diligence and integrity of the business community by closing more banks:

First Vietnamese American Bank, Westminster, California

Pierce Commercial Bank, Tacoma, Washington

Western Commercial Bank, Woodland Hills, California

K Bank, Randallstown, Maryland

That’s over 300 FDIC citations for diligence and integrity since George W. Bush took office.

Try this with a few banksters (emphasis added):

Frustrated that even billion-dollar fines seem to have little effect on pharmaceutical firms, the Food and Drug Administration has increasingly signaled its intent to use a legal doctrine spawned by those long-gone rodents to bring criminal charges against top executives, even those who might have been unaware of company misdeeds.

Earlier this month, Eric Blumberg, FDA litigation chief, told an industry audience that his agency was looking for cases to use what is known as the Park Doctrine as a tool to “change the corporate culture” of firms that have thus far shrugged off other penalties.

(snip)

In an interview Thursday, Blumberg was pointed.

“They need to take this seriously and find out what is going on in the marketing and sales divisions of their companies,” he said of pharmaceutical executives. “In my view, one thing that will get executives’ attention is a few cases in which we have convicted two-legged defendants.”

Via Shaun.

At MarketWatch, David Weidner argues that Wall Street needs Mr. Bubble to be anything more than a dull place of business earning reasonable returns from good business practices (emphasis added).

Dull and restrained, some might take the most recent quarter as a reflection of missed opportunity or an anomaly of market forces acting against the banks.

That assessment would be wrong, however. The financial industry did what it could. Hey, if Goldman can’t turn in a big quarter with all of its influence, real or imagined, something must be amiss.

Something’s amiss. Without a bubble, Wall Street is a lackluster industry. Profitable? Yes. But its ability to turn in the kind of performance it regularly turned out in the 2000s, without hollow capital being created out of dead-on-arrival Internet start-ups or straight-to-default mortgages, is questionable at best.

Oh, horrors. They might have to work for those country club memberships.

Tom Levenson digs into the implications. A nugget:

But for all the justified outrage at the simple disdain for the concept of property rights and the rule of law* there’s something else being missed here, something that astute observers have commented on, but that seems to be a bit obscured as we all, understandably, rubberneck in horror at the trainwreck that the major banks have made of the foreclosure process.

And that is that the entire foreclosure endeavor is in fact a huge imposed cost on American homeowners and our economy; it almost certainly runs against the long-term interests of the financial system as whole, whatever the incentives may be for individual companies (and it may well be a long term fail for many of the short-term beneficiaries as well). Foreclosure as it is being practiced now is likely to be a net negative for homeowners now, to the point that subsidizing in some way those who got into trouble is economically rational, even if it might be galling to those who’ve paid up and gone about their business.

The entire post is worth the five minutes it takes to read.

You can longer bank on these. They ain’t no more.

First Arizona Savings, A FSB, Scottsdale, Arizona

Hillcrest Bank, Overland Park, Kansas

First Suburban National Bank, Maywood, Illinois

The First National Bank of Barnesville, Barnesville, Georgia

The Gordon Bank, Gordon, Georgia

Progress Bank of Florida, Tampa, Florida

First Bank of Jacksonville, Jacksonville, Florida

The FDIC was hungry.

Yesterday, I listened to a Diane Rehm show on “The Foreclosure Crisis.” Guests included

• Tom Deutsch, deputy executive director, American Securitization Forum.
• Greg Ip, U.S. economics editor, The Economist, and author of “The Little Book of Economics: How the Economy Works in the Real World.”
• Kathleen Day, spokeswoman, Center for Responsible Lending; ethics teacher at Georgetown University’s graduate program in real estate studies.

Mr. Deutsch demonstrated, in his attempts to defend the banksters, an ability to teach tap dancing to Sammy Davis, Jr., and a superlative skill at dodgeball.

Follow the link to listen to the show.

If you listen to nothing else, fast forward to the 27:21 mark and consider Mr. Deutsch’s attempts to justify the treatment the caller received from the holder of her mortgage.

Hanlon channels Yakov:

In Capitalist America, bank robs you!

Richard Peisser, a professor of real estate (whatever that means) at Harvard, argues against a moratorium on foreclosures.

Short version: Expecting the banks to follow the rules now would inconvenience them and slow down legal foreclosures.

I’m not saying I favor a moratorium–as if my opinion matters all that much, but I have a website and I’m going to use it–but this seems to me like arguing against traffic cops because they might slow down the speeders.

Addendum:

Someone realizes that there’s more riding on this than the bonus for some bankster who already has two or three houses. From Bloomberg (emphasis added):

New York state courts will require lawyers in residential foreclosure actions to certify they have taken “reasonable” steps to verify the accuracy of documents submitted to the court.

The new rule, released in a statement by the New York state Unified Court System, is effective immediately.

(snip)

“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis,” (Chief Judge Jonathan–ed.) Lippman said in the statement.

What happens when someone turns over the shells in the old shell game and finds that the pea is missing?

We may be about to find out where that pea went, or whether it was ever there.

On Monday, the group (which includes the New York Fed–ed.) wrote to Countrywide Home Loan Servicing and Bank of New York Mellon Corp. (BK 25.99, -0.63, -2.37%) , the trustee of the mortgage securities, saying they haven’t been serving the loans backing the securities properly.

The investors asked Bank of New York to demand the repurchase of loans that were originated “in violation of underwriting guidelines,” according to a statement Monday by Kathy Patrick of law firm Gibbs & Bruns, which is representing the group.

The seller of any “ineligible or predatory” mortgages should also pay the cost of modifying them for homeowners, or buy those loans back from the pools of collateral backing the securities, she added.

This should get interesting.

Facing South compiles some stats. A nugget:

Number of states where attorneys general are investigating the mortgage-servicing industry following allegations that questionable documents and procedures were used to support home foreclosures: 50

Read the whole thing. The raw numbers paint a more disgusting picture of fiduciary malfeasance than do all the polemics one can muster.

I was busy yesterday evening updating the OS on my netbook, so forgot to check what the good folks at the FDIC did last night:

Throw away your pre-printed deposit slips for these outfits. You can’t use them any more.

Premier Bank, Jefferson City, Missouri

WestBridge Bank and Trust Company, Chesterfield, Missouri

Security Savings Bank, F.S.B., Olathe, Kansas

Rortybomb has done an excellent series of posts with that title.

Here’s post number five; it links to the first four.

Afterthought: To the masters of the universe, the concept of fiduciary responsibility is as a tinkling cymbal, signifying nothing.

By piecing together different stories from the news, we can start to see the Big Picture.

Sales create mortgages on which to foreclose:

In 2005, the couple tried to refinance by getting a fixed- rate mortgage to replace an adjustable-rate one. According to West, Option One said it was willing to provide a fixed-rate loan. When the couple went to sign the paperwork, West alleged that Option One, which is now part of American Home Mortgage, changed the terms of the loan to an interest-only mortgage for five years. West claimed she was subsequently threatened with a lawsuit by an unidentified title insurance company employee if she didn’t accept that deal.

Foreclosures create jobs:

In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.

The increases trickle through the economy:

Four employees of Lender Processing Services signed assignments transferring West’s mortgage, according to an affidavit submitted on her behalf by Lynn Szymoniak, a West Palm Beach attorney. They signed the documents as officers of American Home Mortgage Servicing Inc. and Option One Mortgage Corp. even though they were actually employed by Lender Processing Services, according to Szymoniak’s affidavit.

Leading to a better life for somebody or other:

“Apparently now we have a foreclosure-based economy.”

Thoreau comments:

Now, I hate people who borrow more money than they can pay back. I do. I live in an apartment, so don’t expect me to cry a river for somebody who took out too big of a mortgage. OTOH, I have even more hatred for rich people who can’t balance their books. So if some financiers got too clever for their own good, took on some bad risks, got in trouble, and now they can’t kick out the borrower and sell to recoup some losses, well, sucks to be them. If the price of irresponsible rich people losing money is that irresponsible non-rich people can’t be kicked out of homes that they can’t pay for, well, it’s a rare treat to see shit roll uphill for once.

Now, I do realize that there might be economic repercussions if bankers are unable to recover some of their losses. Fortunately, I have a solution: They can sell their own organs to raise cash. I have a bit of damage on my cornea, my brother has a less-than-perfect cardiovascular system, and most of Ireland could use a new liver. So there’s clearly a customer base.

Video via TPM.

Addendum, Later That Same Day:

Stewart thought he was being facetious with the crack about a “foreclosure-based economy.”

In a report that at attorneys-general of at least 40 states are preparing to investigate the fiduciary and legal irresponsibility of the banksters, Bloomberg includes this tidbit:

Lenders took possession of a record 95,364 homes in August and issued foreclosure filings to 338,836 homeowners, or one of every 381 U.S. households, according to RealtyTrac Inc., an Irvine, California-based data vendor.

“If you have a national moratorium on foreclosures, that’s a problem,” Paul Miller, an analyst for FBR Capital Markets Corp. in Arlington, Virginia, said in a phone interview. “The longer you drag out foreclosures the longer it takes to get through” the housing slump, he said.

Of course, he is wrong, as any student of Kepner-Tregoe could tell you.

A moratorium would be a symptom.

Incompetence and fraud are the problems.