The Real Question in the Foreclosure Fraud Crisis Is: Why Do The Banks Need So Many Documents Created.?

The real question in the foreclosure fraud crisis, above all others, and one it seems no one is asking [is] why do the banks need so many documents created? Why are services like Lender Processing Services needed? Period?

The answer to why the banks need so many documents created is surprisingly simple. In the majority of the cases, it would seem at the local level where the borrower signs the note and the promissory note makes its way to the aggregater who destroys the note when making the bonds to be offered to the investors in the REMIC/Trust. It would appear that this is one of the few if not only area of legal behavior of the securitization scam and market crash afterwards.

So basically they need all these documents made so they can replace what they destroyed and know they need to make claim for what they know they have no legal claim to in court.

Mortgage Fraud, Banking Fraud, Servicing Fraud, Foreclosure Fraud & More ‘Oh my’: Or - How many times must we say the word “Fraud” before we believe, it is indeed, fraud.

Mortgage Fraud, Banking Fraud, Servicing Fraud, Foreclosure Fraud & More ‘Oh my’:

Or - How many times must we say the word “Fraud” before we believe, it is indeed, fraud.

I have always been one to see things in a simple but truthful way. Not that anyone is asking, but, for the sake of this article I thought I’d explain myself a bit. My policy has been, rather much as the old expression goes;

-“if it looks like a duck, quacks like a duck and walks like a duck well hells bells then; it must be a duck. What’s the argument?;” -

Of course this assessment is made barring the usual grafting, genetic manipulation, aliens and/or pure fiction etc, available in the world of this age.

I have discovered one must look more closely at things these days, as what you are observing may not be exactly what it appears to be, as many lie, anymore, to everyone around them, including themselves, for their own profit an/or personal agenda…… but….. I am fairly certain, from all accounts and media reports thus far, in this case; with the markets and Wall Street, folks, it’s a duck.

The problem is, as I see it, and there are many who would agree, of course there are those who would disagree in equal measure as well, that [this] problem is nothing more than the ancient discussion of human beings between themselves and their god, or lack thereof, concerning the course on which they must travel to being a moral person.

I’m not speaking of religious morality, although I do swing that way, to borrow an expression from the other side, and would promote it as a wonderful thing for all. No, I am speaking of that which only an openly idiotic fool would try and argue to the contraire. No matter who you are; No matter where you are from; No matter what religion you practice; No matter your color or race:

1.       Stealing is wrong.

2.      Lying is wrong.

3.      Cheating is wrong.

I further contend that any quibbling over or about these three things, as in whether or not there’s merit to a charge of any of the 3 said actions, or combinations thereof, as valid, are simply the behaviors of immoral people, whom, through the courts seek the vindication and the adjudication of an unlawful action or actions as moral and lawful by moral people so as to have something they can point to acquitting them, in theory and legal opinion, at least, of the convictions that lay heaped upon their hearts for their obviously immoral actions.

We are at an impasse in our country; we cannot continue in the direction we are heading in and the people are telling the leaders of this country that they will not take right being called wrong and vice a versa anymore. That they will not allow themselves to be taken to court for quote end quote ‘justice’ only to watch injustice be delivered instead.

We are at the crossroads folks. We must, as a whole, make a decision, as a country, on whether we want to be a lawful or an unlawful nation.

It really is as simple as that. We can continue to adjudicate in favor of the criminals, bankers, mortgage brokers, stock brokers, rating agencies etc… to the detriment of the law and the people, the law, is meant to serve; or, we can make a decision for the good and right thing to be done and tell these criminals to get their affairs in order; as they will be spending a lot of time in jail, being very sorry for their crimes, before anyone thinks of letting them out.

Either side, lawful and moral or immoral and unlawful, has all the right in the world to exist and prosper. I  just suggest we start telling the truth though, because I don’t care where you go; everyone hates a hypocrite.

As things stand now; America is a hypocrite, particularly when it comes to its citizens and the law being applied to all equally. I also state that this lawful immoral lawlessness and corresponding social and political misbehavior is exactly what has preceded every civil war, that has ever occurred in any country.

All I can say is good luck with the hope that all is over and done with. If it takes a civil war then maybe folks can finally see why it is that folks don’t want the government telling them whether or not they may have a weapon or what kind of weapon they may have either.

All I can say is good luck America.

Mortgage Fraud, Bank Fraud, Forclosure Fraud...how many frauds do we have to have to get some orange jumpsuits issued?

This is a series that I saved while not in order, as I collected the pieces by reading this first story that links to all the rest and of course if it is still up you can go to the site personally and read it and all the updates by Janet Tavakoli.

Janet Tavakoli

President, Tavakoli Structured Finance

Third World America 2011: Forget "Fast Tracking To Anarchy" We've Arrived

Posted: 6/8/11 12:42 PM ET

Update below

Last summer I wrote about Arianna Huffington's latest book, Third World America: How Our Politicians are Abandoning the Middle Class and Betraying the American Dream and talked about the Great Recession, the Great Bailout, and the Great Cover-Up of financial crimes.

I also wrote that municipal financial problems spelled a lower quality of life. Downtown Chicago crime escalated, along with attacks on officers in the Chicago Police Department. An officer who spoke up about the low morale of the undermanned and rudderless police force endured official retaliation. ("Third World America: 'Fast Tracking to Anarchy")

This year, all hell has broken loose in downtown Chicago. Years of under-hiring have resulted in a police force that is unprepared for wildings and gang violence. Moreover, concealed carry in Chicago is illegal, unless one follows the Constitution.

Tourists and residents have been attacked by mobs of youths on buses, on beaches, on bicycle paths, near the shops of the Magnificent Mile, and outside their homes. Mobs of shoplifters plagued "Mug Mile" stores. The irony is that these disenfranchised youths are turning to crime -- and if justice is done, prison sentences --against innocent targets. Their focus is misdirected. Participating in a peaceful five million man march -- a true show of force and power -- against elected culprits in Washington would get them better results for lasting change.

The Spring of Anarchy: "A City At War With Itself"

It is still technically spring in Chicago, and wildings have made Chicago and its beaches unsafe. Poorer neighborhoods have long been war zones. The murder rate and gang violence in Chicago has been unacceptable for years.

Yet the police force was gutted, handcuffed, and muzzled. ("In Third World America Expect to be Investigated, as Lt. John Andrews Is Being Investigated, for Speaking Up") Police officers -- some off duty and still in uniform -- have been gunned down in the streets. Their crime-fighting abilities are severely hampered by years of irrational policies and genuflecting to politically power hungry special interest groups.

Of course, we want police officers to follow proper procedures at all times, but we also want them to make fast decisions in violent chaotic circumstances, defend themselves, and get home safely to their families and friends. Local media hounds come out in force against police work. It's time they came out in favor of superior training and hiring.

Mayor Rahm Emanuel, with less than a month in office, has called for the arrest of all the youths involved in last weekend's mob attack that included an attack on a shopper and on two middle-aged doctors -- in separate incidents -- visiting for an oncology convention. Yet there have been ongoing incidents of wildings that didn't make the front page of local papers as did this last attack on tourists.

The woefully undermanned police force plans to recruit and train 300 new officers when some estimates indicated it needed more than 3,000 new officers before the outbreak of the new-pattern crime wave.

Police Superintendent has to Stop Lying to Citizens*

Mainstream media has finally started to report crime in the more fashionable parts of town, but only because it has spun out of control into anarchy. The most reliable source of crime-wave information has been Second City Cop, a blog started by a member of the Chicago police force.

Based on my conversations with friends and neighbors, citizens of Chicago feel lied-to by Police Superintendent Garry McCarthy.* On Memorial Day, North Avenue beach, in one of Chicago's more affluent areas, was closed after gang violence. This is unprecedented. McCarthy repeatedly told the media it was due to people succumbing to the hot weather. Not true. Violence was out of control as beach-goers were harassed by mobs and cyclists were pulled off their bikes and beaten.

Mainstream media now contradicts McCarthy's feeble spin. One police officer told the media that 500 youths exited public transportation for the lakefront and while they were there, citizens were harassed.

CBS reported wilding incidents at this beach earlier in May, and police patrols had already been stepped-up. Two bike riders on the North Avenue Beach path had been mobbed by about 100 teens. They were knocked off their bikes and then thrown into Lake Michigan. Yet Near North District commander Kenneth Angarone said police responding at the scene did not find a "bona fide incident."

Mobs have swarmed local businesses, shoplifted and intimidated shoppers at high-end stores, attacked bus riders, attacked shoppers near Michigan Avenue, attacked tourists and more. Shortly after Mayor Rahm Emanuel said he would round up perpetrators of last week's mob attack, NBC reported that a mob of 15 to 20 youths beat and robbed two people in Chicago's downtown shopping area.

Memorial Day Mobs: Boston, Nashville, Long Island, Miami, Rochester, and Charlotte

Wildings occurred in other cities on Memorial Day weekend in what may have been coordinated flash wildings. Gangs swarmed beaches in Boston, Nashville, Long Island, Miami, Rochester, and Charlotte in what some believe was a social media coordinated effort. (Hat tip: Second City Cop)

And Stop Lying to My Friends

In response to the weekend violence, my network of friends emailed around news articles. Mary McCarthy (no relation to Police Superintendent McCarthy), a friend of a friend, emailed local papers about a mob pulling people from cars and taxis right outside her upscale apartment building. When the police arrived 15 minutes later, the crowd had scattered. Here's an excerpt:

"At about 11pm last Friday night, June 3rd, I heard shouting, screaming, horns blaring and tires screeching from my apartment...When I looked out my window to the street below I saw a crowd of about 20 young people...directly across the street from the entrance to my building. They were leaning on parked cars and clogging the street. They were screaming at people walking and driving by. I watched them stop vehicles, including taxi cabs, and pull people from the vehicles...It was a frightening scene and I was sure someone was going to be hurt."

The Sun-Times wrote of Mary McCarthy's report and Police Near North District commander Kenneth Angarone said that police responded but did not find a "bona fide incident.'' I believe Ms. McCarthy.

It's Not a Race War; It's a Class War

It's much too easy to let politicians divide the nation, make this about race, and ignore the underlying causes. It's true that many of the mobs in downtown Chicago are comprised of African Americans, but Oprah Winfrey isn't into wilding. Mary McCarthy didn't get a close up look at the mob outside her window, but they appeared white -- definitely not African American.

Last year, I never mentioned race in my post about Chicago violence, but a few commenters brought up race and made unwarranted assumptions. Some commenters assumed "wildings" only involve black youths. Chicago is a city with a lot of diversity and gangs of every race. I mentioned a separate incident of an armed intruder being shot and killed by an off duty police officer; the armed intruder was not African American. I also mentioned three police officers were shot and killed within a two month period. Two were African American, one was not.

U.S. Downward Mobility

The destruction of the middle class has accelerated. Housing values have plummeted, and investors earn negative real rates of inflation adjusted returns on "safe" investments like money market funds. Food, fuel, and medical costs have skyrocketed. Essential civil services are underfunded while taxes escalate. The middle class is sinking fast as saved wealth is destroyed and its standard of living erodes.

After being subjected to a national financial crime wave with no meaningful consequences for white collar criminals, the middle class, the core of many cities and communities, is being subjected to a physical crime wave.

The U.S. escalated its debt to fund the ongoing bailout of the banking system. TARP was a small part of it. The Fed now owns over a trillion in suspect assets it bought from banks, and it daily provides them with almost zero cost money so high spreads help them earn their way out of the financial hole in their balance sheets. No one went to jail, and bankers reward themselves with billions in bonuses.

Banks broke their TARP agreement to lend to small and medium sized businesses. They lent to large businesses that outsource a lot of labor. The iPads stolen by Chicago gangs are mostly made in Asia. Banks and their enablers in Washington starved the U.S. of the biggest source of sustainable job growth: capital investment in the United States.

Elected Citizen-on-Taxpayer Financial Crime

Illinois and Chicago are ground zero for the consequences of our local and national fiscal folly. Pension funds are woefully underfunded. Last minute sweetheart deals to crony-connected retirees have contributed to the problem along with bad investment decisions. In general, though, civil servants are blameless. Some are being asked to increase contributions from 8 percent of pay to 12 percent of pay. The State of Illinois is behind on many of its bills. Chicago's city budget is in dire straits.

The suburb of Bellwood provides an example of how graft and corruption have contributed to municipal project debt. A train station project was hijacked by local officials who paid millions above appraisals for properties, and in at least one instance dealt with a mob-linked company. According to the Chicago Tribune, taxpayers of the small suburb have a $40 million hole and investigations revealed "questionable players," with laughable financial analysis.

Chicago's unemployment rate and mortgage delinquency rates are among the highest in the country, and home prices have slumped to 10-year lows. The S&P Case -Shiller index shows that Chicago area housing prices have fallen to April 2001 levels. From the housing bubble's November 2006 peak, prices are off 34 percent.

Illinois state income taxes rose this year from 3 percent to 5 percent, a 66.7 percent increase. That is in addition to sales taxes, utility taxes, phone taxes, various automobile taxes.

Chicago is not alone. Cities throughout the country recently experienced wildings, and it will get worse for them as it did for Chicago. Illinois may have the most severe budget crisis in the country, but states like California, New York, New Jersey and more are troubled.

Ongoing Mugging by Wall Street Banks

After the largest bank bailout in world history, we now have a national epidemic of foreclosure fraud. In March, Judge Moshe Jacobius stayed 1,700 foreclosures due to altered documents in Illinois' Cook County.

A complaint of alleged fraud on the part of Goldman Sachs detailed its close relationships with Countrywide, New Century, and Fremont. The complaint showed Goldman knew of "an accelerating meltdown for subprime lenders such as New Century and Fremont." Despite known serious loan problems, Goldman continued to securitize the loans and sell them in packages of residential mortgage backed securities. Goldman Sachs Alternative Mortgage Products (GSAMP) was "garbage sold at mythical prices."

The complaint alleged that Countrywide employees in a Chicago office inflated incomes on 90 percent of reduced documentation loans, also known as "liars' loans." One of Countrywide's mortgage brokerage arms "routinely doubled the amount of the potential borrower's income ... so that borrowers could qualify for loans they could not afford." The complaint alleged that brokers, not borrowers, engaged in massive fraud to push loans through the system and earn commissions. Illinois Attorney General Lisa Madigan told First Business Morning News: "Countrywide broke the law, homeowners did not."

Arianna Huffington explained that our elected officials allowed banks to thwart usury laws:

"Every day, Americans, faced with layoffs and tough economic times, are forced to use their credit cards to pay for essentials such as food, housing, and medical care -- the costs of which continue to escalate. But, as their debt rises, they find it harder to keep up with their payments. When they don't, banks, trying to offset losses in other areas, turn around, hike interest rates, and impose all manner of fees and penalties." Third World America, P. 77.

Even when banks initiated foreclosure fraud, they refuse to bear the costs of delays and bad deals of their own making. After pumping up appraisals and falsifying borrowers' income on applications, banks are walking away from abandoned homes and sticking taxpayers with the bill to clean up the mess they left behind.

Banks claim that it is mortgage lenders or mortgage servicers who are guilty, but these are bank affiliates and business partners funded by the banks.

Banks supplied the money (via private label phony securitizations) that fueled this problem. Banks engaged in widespread massive mortgage securitization fraud. As underwriters, banks were responsible for doing adequate due diligence on the underlying loans. Banks were responsible for making sure the representations about risk in their financial products were accurate. Instead, the representations were materially misleading.

According to a local study by the Woodstock Institute, the mortgage servicers and trustees most often associated with abandoned properties are Bank of America, Wells Fargo, U.S. Bank, Deutsche Bank, and JPMorgan Chase.

We Need the Mother of All Reforms

Doing nothing ensures a relentless downward slide into financial and social chaos for great swaths of the country. Washington's political corruption and mismanagement has the same roots as Chicago's. As Arianna points out, on a national level, we need "the mother of all reforms:

"That is why the first step toward stopping our relentless transformation into Third World America has to be breaking the choke hold that special interest money has on our politicians." (Third World America, 172)

Money isn't the only way to sway politicians. One can take away the power politicians try to buy with that money. Among voters, a show of numbers is as effective as money. The middle class needs to make its voice heard in the media and in direct contact with their local and national elected officials.

On a national level, we need a Constitutional amendment requiring full public financing for political campaigns (for starters). Too many politicians are owned by special interest groups that buy votes, finance campaigns, employ their relatives, or just buy them off. As Arianna explained: "If someone's going to own the politicians, it might as well be the American people."

Endnote in response to comments: I use "wilding," since that is the term used by our local mainstream media news articles, including articles at NBC and the Sun-Times. This is the definition given by the free online dictionary: "Slang: The act or practice of going about in a group threatening, robbing, or attacking others."

*Update June 8: Garry McCarthy was approved by the full City Council and named Superintendent of the Chicago Police Department on Wednesday, June 8, 2011.

Update June 9: Two days after the new Superintendent said his men on trains and platforms would break up mobs before they formed and said several arrests proved there were enough police officers downtown to prevent attacks before they occur, Jesse Andersen, 35, brother of Billy Corgan, lead singer of Smashing Pumpkins, was attacked by a group of young people while riding the train on his way to work. Andersen was not seriously hurt and was interviewed here. Corgan twittered about it and told the SunTimes: "He was just sitting there on the train, listening to his iPod. They obviously set [my brother] up to rob him ." Even the Wall Street Journal reported this story. Mr. Andersen was much luckier than a victim the previous day, who was robbed of cash and an iPhone and sent to Northwestern Hospital in serious condition.

Janet Tavakoli

President, Tavakoli Structured Finance

Posted: August 25, 2010 07:02 PM

Third World America: 'Fast-Tracking to Anarchy'

Third World America: 'Fast-Tracking to Anarchy'

My last post about Arianna Huffington's new book, Third World America: How Our Politicians are Abandoning the Middle Class and Betraying the American Dream talked about the Great Recession, the Great Bailout, and the Great Cover-Up of financial crimes.

Among the future consequences of not fixing our national problems will likely be an increase in social unrest and an increase in crime. A look at Chicago's problems may serve as a call to action for America's middle class. Chicago's city budget is in dire straits. That's also true of the state of Illinois, California, New York and other areas. In Chicago, the same mismanagement that deepened our fiscal crisis has caused a crisis in essential city services.

The police department provides just one example. Sunday's Chicago Tribune reported that in 31 days, there were 303 shot and 33 dead:

"Crime has been holding steady in Chicago in recent years. Through July, there have been 1,089 shootings in the city, a 2.4 percent decrease over last year."

According to the newspaper, it's a "typical" July. Yet there is nothing typical about it when you look beyond the numbers. The first problem is that the numbers are flat-out unacceptable in any year in any city in the U.S. It is inexplicable that citizens of Chicago have tolerated this situation in poorer neighborhoods for decades. The second problem is a new problem. Years of complacency by Chicago's middle and upper classes have brought the crisis to their doorstep.

In recent years, incompetent and ill-qualified people have been promoted to "leadership" positions. Hiring and exam giving has declined, and the police department is undermanned and demoralized. Even worse is the fragging officers take from politicians, unqualified people in police "administration," and from the local media.

Spiraling Out of Control: Open Season on Cops

The title of this post comes from "A City at War With Itself," a commentary written by Lt. John Andrews, a 25-year veteran of the Chicago Police Department:

Most horrific for Chicago is that in less than 60 days, Chicago has lost 3 of its police officers, killed by gunfire as victims of robberies. It seems no one is safe in our city anymore.

Chicago's homicide rate this year currently stands toe-to-toe with the total number of military forces killed in both Afghanistan and Iraq.

Thugs, gangs and renegade groups run the streets and neighborhoods, intimidating and victimizing the decent citizens of this city. They go mostly unchallenged and unchecked by a totally demoralized police force that is dangerously understaffed and still out-gunned on the
streets.

Lt. Andrews describes in detail a police department demoralized by scandals and corruption. He names those who received promotions based on political pull rather than merit or suitability for responsibility. Moreover, police fear reprisals from political special interest groups when using necessary force:

When asked, most will freely tell you that they do not want to place themselves, their families and livelihoods at risk from a perceived Machiavellian police superintendent or other incompetent "bosses" that could lead them into legal trouble that would risk their liberty and freedom (jail).

Update: Lt. Andrews now faces backlash for bringing these matters to light. See "In Third World America Expect to Be Investigated, as Lt. John Andrews Is Being Investigated, for Speaking Up," Huffington Post, August 28, 2010.

Even during televised speeches at the recent funerals of police officers, public officials speak out of both sides of their mouths. On the one hand, they decry the apparent targeted shootings of police officers -- one of whom, Michael Bailey, was wearing his uniform after just coming off duty from a night of guarding the mayor's house -- and on the other hand, they say that of course, police must follow proper procedures and work within the law (and often pause for effect).

Of course, everyone agrees the police must follow proper procedures, but the subtext of the message delivered at an officer's funeral is repellant. These thinly-disguised campaign speeches suggest the police force needs to be careful not to bring these tragedies upon themselves. Perhaps they think police should round up suspects and put them in Monty Python's comfy chair.

If the goal is to help police officers follow proper procedures at all times, then politicians and the police superintendent have to staff the force with well-qualified recruits (this means creating a reasonable qualification exam), remove corrupt "leaders" by reversing ridiculous promotions, and promote qualified officers based on merit. The police force desperately needs manpower and both physical and leadership back-up. Officers confident that their authority is respected, their judgment is trusted, and their tools are equal to a dangerous and difficult job will produce better results than people who have been left hanging out to dry, while their colleagues are massacred.

Media Strafing

Local media has lost the plot. A couple of days ago, an off-duty police officer shot and killed an armed home invader who had kicked in his door. The officer reportedly lives on a block with five or six other police officers. The intruder allegedly has a history of wrongdoing and invaded a suburban home with another man. He posed as a cable worker and bound and gagged his victims. Yet, some news reports described the intruder as a "victim" and said the off-duty officer was not charged, as if charges should have even been an issue. According to comments posted at Second City Cop, WGN's televised news unwisely showed the police officer's home, identified his neighborhood, and zoomed in on his home address.

Mug Mile

Formerly "safe" and "upscale" neighborhoods have become the targets of "wildings." James Carlini, an editor for Wisconsin Technology News, gave an eyewitness account of his experience of Chicago's "land sharks" at the premier shopping district known as the Magnificent Mile, or Mag Mile:

Coming back to the John Hancock to pick up my car at around 9PM, I noticed several little bands of four to five juveniles walking around sizing up people as they walked down the streets. Luckily we were already in our car, but I could sense that these "gangsta wannabes" were up to no good.

There were some arrests made that night but very suspicious that there was no mention in the mainstream media. There have been incidences like this before but never a mention or a caution. Why? Afraid to report on the truth or were you told not to report on the truth?

One of Carlini's readers noted that Mayor Richard Daley seems to live in a bubble:

I think [Mayor Daley] should go out in the evening without his hit squad protecting him with the firearms he professes to hate so much. That would be six more highly-paid police officers who could patrol the downtown streets that you and I walk down -- unarmed.

Buy Back America

If nothing else good comes out of our crisis, perhaps it will serve as a wake-up call for the entire nation. It's time to put our shoulders to the wheel to solve our problems.

Doing nothing is not an option for America. Much of poor America, especially in our major cities, has been Third World America for decades. Soon the urban middle classes and even upper classes will become better acquainted with that world.

Washington's political corruption and mismanagement has the same roots as Chicago's. As Arianna points out, on a national level, we need "the mother of all reforms:"

"That is why the first step toward stopping our relentless transformation into Third World America has to be breaking the choke hold that special interest money has on our politicians." (Third World America, 172)

On a local level, Chicago will have to fix its own problems by breaking the choke hold of special interest groups. On a national level, it will take a Constitutional amendment requiring full public financing for political campaigns (for starters). Our politicians have shown us how willing they are to be owned by special interest groups that will buy votes, buy a campaign, or just buy them off. As Arianna explains: "If someone's going to own the politicians, it might as well be the American people."

Third World America will be published September 7 and is available here.

Additional Information Added on August 27, 2010 in response to comments:

I chose James Carlini's report, because I thought it might interest city officials to know that tourists are feeling intimidated; it's bad for business. It turns out he lives in Illinois (not Wisconsin) and grew up in Chicago. Contrary to some commenters' assumptions, he is not intimidated by Chicago. I could have chosen from several unprecedented incidents (some occurred on Mag Mile) among my neighbors and friends, but Mr. Carlini is a writer and there was a link to his internet article. Likewise, I didn't have a link to the story about multiple shots fired into WGN's window on Mag Mile, since it was underreported, but the eyesore of a board that replaced it made the Tribune Tower less attractive for tourists and shoppers. (The board was up for several weeks, and the window has since been replaced.)

Incidents on Mag Mile are underreported by the media, unless an incident happens to a reporter. On July 14, Chicago Tribune reporter John Thomas was mugged "on the (not so) Mag Mile." Here's an excerpt of his account:

I was mugged Monday on the Mag Mile. Right in front of the glitzy Coach store. In broad daylight. Surrounded by literally hundreds of people.

Here's what went down: I walked up to the bus stop at the corner of Michigan and Grand to take the 151 to my home in Lakeview. I sat down on the black metal railing that fences off one of the large flower gardens, put down my bag of groceries and pulled out my new iPhone to check my e-mail and send a text message to my wife letting her know I would be home soon.

The sidewalk was packed with tourists and shoppers, but I felt a strange energy when a kid, probably about 14, sat down close to me on my left while the guy he walked up with stood on my right. It just felt wrong.

Then, literally in a flash, the kid on my left grabbed my iPhone and tried to bolt. I had heard all of the warnings about people snatching iPhones and iPods, but because the street was so crowded I never thought it could happen there and then.

But when it did, I instinctively grabbed for the thief and somehow got a firm hold of his shirt. I used the shirt as leverage, flung him into the flower bed and then toppled down on top of him. We struggled, rolling around in the moist dirt, crushing all the newly planted flowers, and I thought I had him subdued.

Click here to read the rest.

I never mentioned race in my post, but a few commenters brought up race and made unwarranted assumptions. Some commenters assumed "wildings" only involve black youths. Chicago is a city with a lot of diversity and gangs of every race. I mentioned a separate incident of an armed intruder being shot and killed by an off duty police officer; the armed intruder was not African American. I also mentioned three police officers were shot and killed within the past 60 days. Two were African American, one was not.

Janet Tavakoli

President, Tavakoli Structured Finance

Posted: August 15, 2010 10:53 AM

How to Thwart the Assassins of the American Dream

How to Thwart the Assassins of the American Dream

Arianna Huffington's new book, Third World America: How Our Politicians are Abandoning the Middle Class and Betraying the American Dream, paints a grim picture of the State of the Union:

"Every day, Americans, faced with layoffs and tough economic times, are forced to use their credit cards to pay for essentials such as food, housing, and medical care -- the costs of which continue to escalate. But, as their debt rises, they find it harder to keep up with their payments. When they don't, banks, trying to offset losses in other areas, turn around, hike interest rates, and impose all manner of fees and penalties..."
Third World America, (P. 77)

Our mediocre grammar school and high school educational system continues its downward slide. The Great Recession is squeezing school budgets. We are failing our children, our most important resource of all.

In 2009, the American Society of Civil Engineers gave the nation's infrastructure a near failing D rating:

"Flip on a light switch, and you are tapping into a seriously overtaxed electrical grid. Go to the sink, and your tap water may be coming to you through pipes built during the Civil War. Take a drive, and pass over pothole-filled roads and cross-if-you-dare bridges. The evidence of decay is all around us." (P. 95)

The over-hyped American Recovery and Reinvestment Act of 2009 earmarked only $72 billion of the $787 billion appropriation of taxpayer dollars to projects to improve the country's infrastructure.

Meanwhile, multi-national corporations avoid taxes, sheltering $700 billion in foreign earnings to end up with a measly $16 billion (2.3%) tax bill. GM is among those companies, yet it took almost a half billion dollars in bailout loans. Boeing and KBR Halliburton are among the defense contractors that avoid taxes, while enjoying government contracts worth tens of billions.

Banks (not Fannie and Freddie) Crippled the Housing Market

Fannie and Freddie do not make loans. They purchase mortgage loans and earn fees for guaranteeing payments on the loans. According to the Mortgage Bankers Association, in 2006, Fannie and Freddie accounted for 33% of total mortgage backed securities issuance. In the first half of 2010, they accounted for around 64% of new issuance. They were forced to pick up the slack and buy more when Wall Street's private label securitization Ponzi scheme blew up.

Fannie and Freddie are Wall Street's dumping ground. They would have had problems on their own, but their problems would not have been close to their current scale, and they did not create the housing bubble.

Congress twisted arms to make Fannie and Freddie buy more than $300 billion of phony "AAA" rated mortgage-backed securities from banks, not counting loans that didn't meet their stated requirements. Today Fannie and Freddie want banks to repurchase tens of billions of these loans, since they fail to meet representations and warranties, and the banks are fighting this obligation.

Top subprime lenders included Wells Fargo; Countrywide, purchased by Bank of America; Washington Mutual, now part of JPMorgan Chase; CitiMortgage, part of Citigroup; First Franklin (now closed), purchased by Merrill Lynch, which was purchased by Bank of America; ChaseHome Finance, JPMorgan Chase; Ownit, partly owned by Merrill Lynch, which was later purchased by Bank of America; and EMC, part of Bear Stearns, which was purchased by JPMorgan Chase. Most of the rest depended on massive loans from Wall Street. Many of these lenders were sued by states for fraud and paid billions in settlements.

According to Inside Mortgage Finance, the top mortgage backed securities underwriters during 2005-2006, only two of the subprime abuse years, included now defunct Lehman Brothers ($106 billion); RBS Greenwich Capital ($99 billion); Countrywide Securities, which is now part of Bank of America ($74 billion); Morgan Stanley ($74 billion);Credit Suisse First Boston ($73 billion); Merrill Lynch ($67 billion); Bear Stearns, which is now part of JPMorgan Chase ($61 billion); and Goldman Sachs ($53 billion).

The above doesn't even include the credit derivatives, collateralized debt obligations (CDOs), and structured investment vehicles (SIVs) that amplified losses. Yet, Arianna notes how America imploded while bankers soared:

"Someone like [Robert] Rubin is able to wreak destruction, collect an ungodly profit, then go along his merry way, pontificating about how 'markets have an inherent and inevitable tendency -- probably rooted in human nature -- to go to excess, both on the upside and the downside.' This from the man who, as Bill Clinton's Treasury secretary, was vociferous in opposing the regulation of derivatives -- a key factor in the current economic crisis -- and who lobbied the Treasury during the Bush years to prevent the downgrading of the credit rating of Enron -- a debtor of Citigroup." (P. 150)

Robert Rubin operated an economic wrecking-ball from prestigious positions of influence including former co-chairman of Goldman Sachs, director of the National Economic Council, former Treasury Secretary under President Bill Clinton, board member and senior "risk wizard" counselor at Citigroup, member of the President's Advisory Committee for Trade Negotiations, member of the SEC's Oversight and Financial Services Advisory Committee, unofficial econmic adviser to President Obama, and co-chairman of the Council on Foreign Relations.

Rubin is just one example of the many bankers, who helped destroy the economy while creating a connected financial oligarchy.

Hide Billions of Losses, Take Bailouts, Collect Billions, Skip Jail

Instead of apologizing for screwing up, the banks demanded the Great Bailout. At the start of the meltdown, the IMF and the U.S. administration estimated losses of $2 to $2.5 trillion. Unemployment and the losses are now shockingly worse. What was merely a recession escalated into the Great Recession.

How big are the actual losses? No one knows.

After destroying the value of major banks, culprits used their enormous political influence -- funded with taxpayer dollars -- to get Congress to force the accounting board to change accounting rules (as of April 2009) so banks don't have to recognize losses until they sell the assets.

According to William K. Black, after the much tinier S&L crisis, there were over 1,000 successful felony prosecutions, several thousand successful enforcement actions, and roughly 1,000 successful civil actions.

This time Congress gave us the Great Cover-up. Bank officers dodged jail time and collected billions in bonuses. As one of my South American friends observes, he's witnessed this third-world corruption before, and this time it's in English.

Banks Stall the Recovery and Prolong the Great Recession

Unemployment marched upward, delinquencies soared, and banks stalled foreclosures. The longer banks delay foreclosures and sales, the longer they can avoid acknowledging losses. Phony accounting and zero cost funding from taxpayers created an illusion of recovery.

Stalling helps banks while they pressure Congress to bail out failed mortgages with taxpayer dollars. Instead of working out mortgages with homeowners, they can wait for a government program to buyout or subsidize their failing loans. The markets aren't recovering, because banks own colossal chunks of mystery-meat assets.

It's a black hole of debt. If banks were forced to price these assets at market values and sell them, the market would clear, and the market would make a faster recovery. When Japan did this (Japan failed to make banks mark assets at market value. - Clarifying note added August 22), it stalled its economy for twenty years, and it still hasn't recovered.

Voters Must Demand the Solution

Voters must demand that Congress uncovers and publicizes facts and prosecutes the financial system's massive multi-year frauds. This will mean thousands of felony prosecutions, enforcement actions, and civil actions.

Congress completely failed in genuine regulation and enforcement. It must start over on financial reform, regulate derivatives, commodities trading, update Glass-Steagall, and more. It will have to break-up the Too Big to Fail financial institutions.

CEOs of our Systemically Dangerous Institutions (SDI's) fail to manage them, because no one is capable of doing it. Like a morbidly obese junk food addict, banks won't even get on a scale. Our banks refuse to properly measure (account for) the problem.

Third World America elegantly summarizes the way forward. Arianna Huffington names the culprits and gives a roadmap for solutions. The rest is up to us. We deserve better than a third world economy divided by ultra-rich on one side and debt-ridden middle class and dirt poor citizens on the other. Citizens must demand a clean-up of corruption and a foundation for healthy growth.

Hum the tune "Living In America" While You Read:

We have finally arrived at the end of the credit boom, lets hide the poverty, highway.
With America being ripped off by the corporations living here and making money from the population either we are truly idiots and lemmings meant for the fodder of the wealthies' wars, or, we are not.

Viewing these pictures one should hum "Living In America" till it hurts.

All-over-the-nation-asphalt-roads-are-being-ground-up-and-replaced-with-gravel-because-it-is-cheaper-to-maintain

Arizona-has-decided-to-stop-paying-for-many-types-of-organ-transplants-for-people-enrolled-in-the-states-medicaid-program  Ever feel that YOU are the unwanted?

arizona-is-so-desperate-for-money-they-have-sold-off-the-state-capitol-building-the-supreme-court-and-the-legislative-chambers

but-everything-you-just-read-is-only-the-beginning

california-gov-jerry-brown-is-requiring-48000-state-workers-to-turn-in-their-government-cell-phones-by-june-1st

camden-nj-the-second-most-dangerous-city-in-america-recently-laid-off-half-of-its-police-force-due-to-a-huge-budget-shortfall

chicagos-budget-is-in-such-dire-straits-officials-are-toying-with-the-idea-of-setting-up-a-city-owned-casino-to-raise-cash  Boy all that moral hazard debate just went out the door didn't it?

detroit-mayor-dave-bing-wants-to-cut-20-percent-of-the-city-off-from-police-and-trash-service.

Seems we have forgotten it is about all of us getting there or in the end none of us will get there.

due-to-budget-cuts-oakland-police-will-stop-responding-to-several-crimes-including-car-wrecks-grand-theft-and-burglary. As many jokes as one could make about this and those calling features in the auto-answer phone systems that apply here it's not funny so I will not.

Illinois-is-such-a-financial-disaster-zone-it-is-difficult-for-even-the-state-comptroller-to-describe.
I wonder how the Governments, state and federal, would feel having to hold a going out of business sale.

Illinois-lawmakers-recently-pushed-through-a-66-increase-in-the-states-personal-income-tax-rate.
Except of course for the wealthy whom as usual get away, well till the crowd surges past their security gates, with paying nothing to enjoy the benefits of the greatest country in the world.

In-connecticut-the-governor-wants-state-legislators-to-pass-the-biggest-tax-increase-the-state-has-seen-in-two-decades.

In-georgia-clayton-county-eliminated-its-public-bus-system-to-save-8-million.

Of the dumbest things that has been done so far, this should come back to bite the wealthy quickly. As soon as the workers; that have been so broken by the system so far, and have no wheels because of it, who were using the bus system to get to their, might as well not be a job for all the bills it pays, job, now, truly have no way to get to work. Think of all the parties that are going to have to be canceled now and with the Holidays coming up and all *tisk* *tisk.*

Major-cuts-to-newarks-police-force-have-led-to-a-substantial-spike-in-the-citys-crime-rate

Mich-gov-rick-snyder-is-desperately-looking-for-ways-to-cut-the-budget-and-says-that-hundreds-of-jurisdictions-in-the-state-could-go-bankrupt-in-the-next-few-years.

New-Jersey-still-faces-a-10-billion-budget-deficit-this-year-even-after-cutting-1-billion-from-the-education-budget-and-laying-off-thousands-of-teachers. "We dun need no ed-ju-ma-cation" Yeah millionaires couldn't hear enough of that refrain....not so funny now huh?

NJ-gov-chris-christie-purposely-skipped-a-scheduled-31-billion-payment-to-the-states-pension-system.

Yeah who gives a F#^^ about them they're old and can't do squat lololol........... Wait....I'm gonna be old one day...hmmmmmmm

NYC-mayor-michael-bloomberg-has-closed-20-fire-departments-at-night-and-is-proposing-layoffs-in-every-single-city-agency. Give it to Mikey he'll try anything...

NY-gov-andrew-cuomo-is-proposing-to-completely-eliminate-20-percent-of-state-agencies

Philly-Baltimore-and-Sacramento-have-started-rolling-brownouts-shutting-down-city-fire-stations-on-a-rotating-basis. I think Areosmiths song "Eat The Rich" is called for now.

State-Parks-and-Historic-Sites-are-deteriorating-due-to-widespread-budget-shortfalls.

Damn stinking Nature doesn't make any money we need to get rid of all nature as too expensive to maintain and for no good purpose to anyone..........

 

See this is a good thing right? I mean if you are too stupid and uneducated, and that was someones plan for you; you can believe that, to see what is coming from the afore mentioned lack of education, then continue on please....at least that way you will remain too stupid to know any better. So there should be no loud carrying on when they lead you into the gas chamber cause they don't like the brand of toothpaste you use.... Or you are not feasible anymore now that you don't earn your share.....

The-financial-manager-of-detroit-public-schools-wants-to-close-half-of-all-city-schools-leading-to-class-sizes-of-up-to-62-students. 

The-town-of-Prichard-Alabama-recently-stopped-sending-pension-checks-to-retirees-in-violation-of-state-law. Did someone forget to add the "and basic decency and socially proper behavior" part of that sentence? Is this how far we have come; that, the only way it counts, and thus the only reason we pay attention or harm is repaired, is if it breaks a law?

Today; people may call me crazy, they may call me mad, they may call me the fringe element, ....History will call me a genius and prescient.