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Rousseau SC

Rousseau SC
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  • What Bernanke Couldn't Quite Say [View article]
    The problem is not the amount of money in the economy. There is plenty of money out there. The problem is not the velocity of money, but the direction of the money flow. The money goes from the taxpayers to the government to banks and big business. It is the opposite of Robin Hood and it is destroying the remainder of the private-sector middle class..
    Sep 4, 2012. 08:44 AM | Likes Like |Link to Comment
  • No QE3: What To Do Now With Gold, Silver, Stocks, Bonds, Forex And Commodities [View article]
    2%? Have you c hecked groceries or power (utility) bills? or gasoline. Seems more like 70%
    Apr 7, 2012. 05:58 PM | 1 Like Like |Link to Comment
  • No QE3: What To Do Now With Gold, Silver, Stocks, Bonds, Forex And Commodities [View article]
    I think what will happen this summer is that Obama will pressure the banks to loosen credit, particularly mortgage loan credit standards. If they dropped the FHA required credit score from 640, where it is now, to 560, where it was pre-recession,the economy would rebound until post-election when credit is tightened again.
    Apr 6, 2012. 10:29 AM | 1 Like Like |Link to Comment
  • The Significance Of Greece's Bond Default [View article]
    It was a default, technically and practically.

    If a citizen pays only a portion of a debt due to a creditor on its due date, that creditor and the courts declare such failure to pay the amount due on the payment due date constittues a default. Will Greece be able to borrow money this summer from the private sector? Next year? Next decade?

    Will Greece actually deal with austerity because there will be no willing lenders to Greece in the private sector or will they become a perpetual charge for the ECB to support?

    What lesson will Portugal, Ireland, Spain, Italy, etc. learn from how Greece is treated? Will Greece be allowed to continue spending more than it can afford? The others are watching.
    Mar 13, 2012. 01:39 PM | 1 Like Like |Link to Comment
  • FDIC Statistics: Larger Banks Doing Better Than Others [View article]
    It appears that Uncle Sam wants the TBTF banks to grow and their competition to falter. More and more concentration of power in fewer and fewer hands.
    Feb 29, 2012. 10:11 AM | Likes Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    Thank you for your kind words. Remember, Freddie and Fannie are for profit GSE's. They are quasi-governmental entities, supposedly under Congressional oversight, but they have paid their execs extremely well. They have never been regulators. Their "fraud investigators" are actually employed by them to find fault with others, preferably not the banks who sold them the paper, not to find internal fraud and corruption.
    Feb 14, 2012. 05:58 PM | 2 Likes Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    Some of what you say is right. I remember watching an interview of Grennspan, in which he said the big banks knew that it would all colapse, but they thought they were smart enough to get out (sell to sucker) first. His answer as to why he did not warn the country was, that he spoke about "irrational exuberance" but as to a clearer warning, "The mood of the country at that time was such that it would not have been well-received." I found that to be very telling in regard to his loyalties to old Goldman Sachs and compatriots..

    However, I am pretty sure you are mistaken when you say that the GSE's got in late in the game. Almost exactly ten years ago,my offices closed 8 mortgage loans for a couple who bought rental real estate. The underwritners did a horrible job and the crooked borrowers never intended to pay back the loans apparently and never made any payments on any of these loans. They were sold to Freddie Mac and I had to deal with Freddie's incompetent investigators, whose only concern was to CYA and to clear the names of the two huge banks who had fraudluelntly sold them the loans. It took me four years in our wonderful judicail system to prove the banks and Freddie Mac were the negligent parties. Dealing with Freddie Mac showed me that they were only concerned with protecting their sources of income, and did not give a rat's a___ about the taxpayer or the public. If they had cared, they would have bought the mortages with recourse. Now, they cannot recover without:

    (a) parties which are still extant and against which redcovery can be had (one of the biggest, ABN-Amro, for example cannot be found, and their assets have mysteriously disappeared)
    (b) the desire to prosecute an action in fraud against their former complicitors in crime and
    (c ) proof, not only of the lenders' fraud, but of their own clean hands

    Since the loans weree purchased without recourse and no more than one of these three essentail elements are normally present, the taxpayers have been left holding the bag.
    Feb 6, 2012. 01:50 PM | 2 Likes Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    Yesterday I posted that MERS was created to hide the ownership of mortgages.

    Today, the NY Atty Gen. brought a case against 5 TBTF banks alleging that they created MERS to hide the true owenrship of mortgage loans and had fraudulently submitted thousands of documents in foreclosures commenced by institutions which had no right to commence the foreclosures as they did not own the mortgage loans.
    Feb 3, 2012. 12:09 PM | 3 Likes Like |Link to Comment
  • Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
    Eric,

    I really like your article and your posts. Readable, thoughtful and courteous even to those of us with less understanding.
    Feb 3, 2012. 09:30 AM | 1 Like Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    Exactly. If you could breathe from @ 1993-@2002 (or whenever Conti-Mortgage, a subsidiary of Continental Grain, got stuck holding $ 500 Million of "D" paper they could not sell, ending the"D" paper market) you could get a cash out refi. It was almost as loose until Thanksgiving of 2005, but "C" and "D" paper had to go to hard money loans. The reason any breathing two-legged creature could borrow money was that they knew the GSE's would not only buy it, but would pay the lender a yield spread premium if they could con the borrower into paying a higher interst rate than they would qualify for at par.

    . When Freddie's accounting scandal broke, the SEC gave them a nominal fine but heads did not roll. They continued to appear to make oodles of money. The result? FNMA's CEO owned a $50 million house. He was offerred a choice, resign and take $ 600,000 or be fired. Freddie's CEO was given a similar offer, but I forget the exact payment he received.

    They were given these choices because they had dirt on the politicians they had bought, including the Senators who received the greatest amount of contributions, in order, Senator Obama (who was also the Wall Street darling in terms of contributions in his 2008 campaign and again this year) Sen. Chris Doods (then Chairman of the Senate Banking Committee and later recipient of a sweetheart deal from Countrywide under their "Friends of Angelo" program; and their spokesman, Barney Frank (who held up reform and claimed they were "fiscally sound"). On the other side of the aisle, they made lesser contributions, but spread it around so they were off-limits in terms of real oversight and apparently hired gingrich to protect them, much as Corzine hired clinton to protect MF Global.

    The game is rigged for govt to serve the financiers who put them in offce and keep them there and take care of them during and after office. Remember Hillary's incredible luck with a one or two day gain of $ 200k on an investment she did not know about?
    Feb 3, 2012. 09:22 AM | 4 Likes Like |Link to Comment
  • Stock Outlook: The Final Straw That Breaks The Market's Back [View article]
    I love your consideration of a factor I had not considered. I have mulled this around and now ask, in the event of a euro breakdown, how long you think it might take for the gold bull market on gold to turn bear.
    Would there be an extended time for recognition of the demise of its value or would it move immediately inversely with the value of the dollar or some other scenario? In other words, how would you recognize the signs that your prediction was beginning to come to fruition?
    Feb 2, 2012. 01:24 PM | Likes Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    I am not saying that all borrowers were without blame. Some knew what they were doing. Some were financially inept and relied upon the lender to advise them as to what they "qualified for". Some were in desperate shape and hoped their finances would trun around. All were knowingly used by the mortgage industry and by the GSEs and by govt to exploit taxpayers. the greatest blame is with the GSEs, then with the industry then either with the citzenry or with govt officials.
    Feb 2, 2012. 01:17 PM | 1 Like Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    I forgot to mention that when I discovered a major bank intentionally misrepresented ownershipof a ten acre tract of land to the FHA, I went to the FTC website to report lender fraud. It prominently displayed how to report borrower fraud, but I could not find so much as a telephone number or address, much less an icon, indicating how to report lender fraud. The Congressional (statutory) mandate for the FTC includes regulation of businesses to protect consumers and competing businesses from unfair and decptive trade practices. It does not include investigation and regulation of consumers in order to protect dishonest business practices. Draw your own conclusions.
    Feb 2, 2012. 08:36 AM | 2 Likes Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    Augustus. Where did that "crazy idea" come from?

    What I said was that [many] borrowers did not have a chance to read the application, not the mortgage. The alleged borrower dishonesty was on the loan applications. The mortgage loan documents did not contain certifications by borrower's concerning their personal debt and/or income.

    I got that idea from personally closing over 10,000 mortgage loans andmy firm closing over 50,000 mortgage loans over 25 years. Lenders would take telephone applications, then run credit reports, then add the info on the credit reports and delete accounts that did not show on credit reports, then send applications to underwriting, then adjust applications according to underwriting requirements, then send in the final applications with the closing packages, which for Freddie Mac loans averaged @ 100 pages long. Borrowers would oftern come in during lunch breaks, or have no reason to suspect their applications did not match the facts and not read them or, perhaps, skim them. I have been shown applications which were signed initially for the mortgage loan broker and then altered by the major bank lender. I have had lenders ask me to produce "dummy second mortgages" to justify their first mortgage loans, and had them make all kinds of other requests they would not put in writing and I had to refuse. I have had one major lender ask one of our junior attorneys to commit blatant HUD fraud, which I instructed my junior attorney to refuse. Lender fraud started accelerating in the early 1990's and probably peaked in 2004-2005 if my observations are typical of national trends and I suspect they are since most of the lenders I had to deal with were national.
    Feb 2, 2012. 08:07 AM | 1 Like Like |Link to Comment
  • Freddie Mac Gets Paid To Obstruct Refinancings [View article]
    I forgot to mention that when the problems hit the fan, the first reaction of Freddie was to blame "dishonest borrowers" What a crock. Borrowers were asked to sign mortgage applications without the chance to read them. The statements thereon were the loan officers stements, coached by the broker liasons on how to pass through underwriting. Some underwriters were paid on commission as well. Who cared if it got paid back? Taxpayers and MIP cos. and PMI will stand behind it.
    Feb 1, 2012. 04:02 PM | 2 Likes Like |Link to Comment
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