Seeking Alpha

Rousseau SC

Rousseau SC
Send Message
View as an RSS Feed
View Rousseau SC's Comments BY TICKER:
Latest  |  Highest rated
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    We are stuck with it. But this too will pass.
    Mar 15 10:14 PM | 1 Like Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    The 10th Amendment, inspired by Locke's contract theory of govt, added, "and to the people." as the contract we call govt by consent does not delegate to govt, state or federal, all political rights.

    John Locke authoried the first SC Copnstitution, some of which in moderrn English, survives in the present SC Constitution. Read Article 1, Sec 1, which he authored. Very illuminating. It states that all political power belongs to the people, who have the right to change their form of government at any time.
    Mar 15 03:50 PM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary,

    I do not understand the dynamics of our international banking system well enough to know all the consequences of rehypothecation of collateral. I will take your word for it.

    I see an over-reaching sovereign as no better than over-reaching supersovereigns.

    The issue I have with big govt goes beyond the economy and into civil liberties, including, without limitation, rights proptected under our Constitution to privacy, fair trial, freedom of speech and religion, even the right to bear arms (to defend one's life and liberty from enemies domestic or foreign, whether tyrants or burglars; not to hunt or target practice, which the framers would not have worried about and could not possibly be the concern of the 2nd Amendment).
    Mar 15 03:31 PM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary,

    I appreciate the time you spent with me to illuminate some issues.

    At the risk of seeming inane, let me indulge a fantasy for a moment.

    I suppose that the only way to decrease the unjustifiable power of the "supersovereigns" is to decrease the size and scope of their henchmen, the sovereign govts. In the USA, that would mean that we would respect the constitutional limits on the power of the centrailzed govt return to being a nation with a centralized govt. of enumerated powers, as per the 10th amendment and the original intent of the framers.

    If such were to happen without additonal measures to curtail the power of the supersovereigns, that would merely cause them to use more flagrantly the resources of the muti-national and other large coropriatons and conglomerates to serve the purposes that govt would no longer serve or or would serve less effectively for them.

    The opposition's (the public's) strategy would require that the corporation be "re-invented" to dismantle conglomerates, perhaps by forbidding corporations from owning interests in other corporations combined with forbidding their "controlling persons' or groups of controlling persons to achieve the same end.

    Very complicated and very unlikely and subject to all calls for special exemptions, (e.g., the tax code) as the public could probably not be unified to to work for such ends without the assistance of mass media, itself controlled by conglomerates and solutions would be proposed by lobbyists and politicians.that the public could be conned into believing would work.
    Mar 15 10:16 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary,

    I like what I see in your new article. You obviously have more insight than I originally thought. Your reference to the TBTF banks threatening to end 30 year mortgages unless they were all guaranteed by Uncle Sam reminds me of a personal story, wherein I was advised by counsel for a certain state agency that the second mortgage industry threatened to refuse to make second mortgages to the citizens of SC if the State fo South Carolina enforced Sec. 37-10-102(a) of the SC Code so the agency backed down. This was not even a threat from TBTF banks, but included many of their finance company subsidiaries. I also had one manager of American General tell me they were big enough so that if people sued them for violation of that same law, they would have the law changed. A few years later, class actions were commenced against several lenders for violation of this statute and the lenders had the laws changed to prohibit class actions and limit damages.

    Now, as to your questions. As to the chart, concerning the numbers of mortgage loans sold to the GSE's and the "shadow banks" First, I do not see where the chart distinguishes between solid loans and subprime loans. My suspicion is that the most desirable loans were kept in-house and the less desirable ones were sold to whoever would pay the most for them, including GSE's. Additionally, what do you call a "shadow bank"? When Deutsche Bank buys a loan and has BOA or Green Tree Loan Servicing service it, is Deutsche Bank a "shadow bank?

    Finally, I see the source of the information was the Federal Reserve. You may as well comment that the banks determined what information to supply and what information to publish and how the numbers were calculated.

    When ABN-Amro (read RBS, probably as much information RE: ABN has mysteriously disappeared) approved mortgage loan brokers working on commission and gave them status as "correspondent lenders", and gave them the software to review and approve loans in-house and gave them the software to print ABN-Amro packages naming the correspondent lender as the payee onj the note and as mortgagee and including mortgage assignments to ABN-Amro with closing instructions to ship the package directly to ABN-Amro, (with the loan being net-funded by ABN) prior to or simultaneously with disbursement of loan proceeds, is that correspondent lender a "shadow bank"?

    As to your comparison of Japan and the USA, stating that the two are like each other in that neither will run out of money, I do not pretend to understand the dynamics of either economy well enough to comment on whether this is acurate or not. I can say that the cultures are incredibly different. It seems the Japanese citizenry are much more inclined to save than their American counterparts. It appears that the American citizenry is much more inclined to file for disability or for Sec 8 and/or for other govt assistance than the Japanese. I suspect that the Japanese aging population is accountable for most of the govt assistance in Japan, whereas, I am not so sure about how many Americans are actually in need of their entitlements. I am not as educated as you in these matters. What I know about economics has been learned primarily from my own observations and my own experiences, colored by the commentary of others that I have read and heard and not by formal training.

    What I do know is that we, as a people, are losing or have lost our govt to big business and are losing our individual liberties to the twin incestuous alters of big govt and big busn., and, most particularly, big banking. Citzens United is proof of that fact.

    If the American people knew and aprpeciated the extent to which the TBTF banks control their govt and control their lives and destroy their competiton and their opponents with deceit and rob the American people, things might change for the better. I don't pretend to know.
    Mar 14 09:59 AM | 1 Like Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    I would not object to the existence of the GSE's if they operated with some degree of honesty. However, I have compelling evidence that Freddie Mac has engaged in cover-up for at least two ("huge" in the words of one Freddie Mac fraud investigator) institutions. That sort of behavior should not be allowed and certainly should not be subsidized by tax dollars.

    I
    Mar 13 10:35 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary A,

    I just checked in for my emails. I have an appointment in a few minutes, but I will look at those and respond later but it may be late tonight or even tomorrow as today is hectic. I will get to it. I promise.
    Mar 13 10:23 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Thanks Gary,

    I am not sure we really disagree so much. I am convinced that the GSE-TBTF alliance has had disastrous consequences and remains a potentially even more sertious threat in the future to our society as I am not convinced the GSE's or (some other mechanism for reaping ill-gotten gain) will eventually vanish into obscurity. I oppose the misguided alliance between big govt and big finance at every opportunity to speak out. I hope I don't irritate people with my agenda.
    Mar 12 10:20 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary,

    I apologize for not looking at the chart. I was hurried in my response and I simply was replying to the idea that I was "brainwashed", which implies that I came to my ideas through sources other than my own experiences. I have personally closed a minimum of 10,000 residential mortgage loans over the last 30 yrs. and been a 50% partner in a firm (and responsible for supervising) which closed multiple times that number.

    In short, I thought your comments intolerant of oppposing views and responded to that perception.

    My opinions come from personal experience. I have dealt personally in regard to loan originations with homeowners, loan officers, (only occassionally and normally indirectly with) underwriters, mortgage loan brokers, appraisers, tile insurance counsel, etc. Adiititonally, I have represented mostly homeowners in foreclosure litigation.

    My point is that my expereince includes dealing with many subprime loans made by subsidiaries and correspondent lenders and mortgage loan brokers for TBTF banks, and international corps such as Ford Motor Company (which owned Associates Finance, Ford Motor Credit, TranSouth, Kentucky Finance, etc.) and Continental Grain (Conti-Mortgage, where the crisis began when they could not sell % 500 Mil of "D" paper) or Household Finance, none of which sold to Freddie to my knowledge, but all of which made subprime mortgages their bread and butter. I have closed one or more loans for all of these mentioned.

    I have closed loans for every company I mentioned, except perhaps Sherson-Lehman, but I did close loans sold to and/or securitzed by Lehman Bros.

    My point simply was that my opinions are founded upon my own personal experiences, not data I read or an a commentaotr's slanted agenda. I am from South Carolina and I am not "brainwashed", at least on this subject.

    After I get some work done today, I hope to have time to look at the chart and respond, but I wanted to make this point.

    First hand knowledge counts and the broader the sampling of experience involved, the more reliable the results.

    Charts often have a "point to prove"; i.e.; an agenda.
    Mar 11 10:28 AM | 1 Like Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary A,

    1 -Cantor is not from SC.

    2 - "You SC guys"? "Brainwashed"? Such regionalistic stereotypes are not appropirate, especially in this conversation. Also, you apparently did read and comprehend well. I speak from personal experience; not from exposure to propaganda..
    Mar 10 10:50 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Gary A,

    Maybe not the beginning. We must remember the mandate of the GSE's was to promote home-ownership and that they took advantage of that to the point that the CEO's of Fannie and Freddie were paid quite well to resign.

    "Most subprime and all toxic and jumbo loans were made by shadow banks"?

    No sir, Countrywide, First Union Home Equity, BOA and Wells Fargo , individually and through subsidiaries, all made huge numbers of these.

    (I will not address the subprime market that did not sell to the GSE's like American General, Fleet Fiinance, Ford Motor Credit, TranSouth, Kentucky Finance, Commercial Credit, CitFinancial, ad nauseum, as they made more money on the outrageous rates on poor credit customers and churning delinquent customers.)

    If I recall correctly, Sherson-Lehman did not make these loans to my knowledge directly in SC, but continued to approve some toxic loans after the others left the realm. They did not do so ignorantly, but probably over-estimated the willingness of the GSE's to continue to buy them after the secondary market crumbled. Just to specualte, maybe that's why they did not get bailed out.

    These lenders and J P Morgage Chase, also set up mortgage loan brokers who worked on comiission (known as mortgage loan borker fees and yield spread premiums) as correspondent lenders. A correspondent lender was able to approve the loan itself, make the documents in its own name, sell it to the big bank and never fund a dime. The loans were funded by the "purchasing" bank. The correspondent lender was simply an originator and a front for the purchasing bank. An assignment ot the mortgage to the purchasing bank was filed immediately on the courthouse records and the homeowner never made any payments to the correspondent lender. Then the bank would sell it, oftern to a GSE for a profit. If they thought the borrower would actually stay current awhile, they could "season" it and get a better price for it.

    Remember the press about the $ 50mil home of FNMA's former CEO? Govt and taxpayer (and TBTF fraud) subsidized just as the outrageous compensation to Freddie's management was so subsidized. It could not have happened without the GSE's open invitation to fraud.

    Perhaps you would agree with me if you went to the FNMA website and looked up the underwriting guidelines for a year in the early 2000's, say 2002, and read them, especially if you compared them to lender undewriting guidelines. (Freddie simply adopted the Fannie guidelines, rather than drafting their own). The guidelines essentially say, easily reading between the lines, that if you deem this a good loan, we don't have independent standards, we will buy it from you.

    I had one client, a mortgage broker, whose loan officers worked on commission, the loan officer normally making 3-5% commission for each loan closed, where they had two Freddie Mac underwriters in their office, eating lunch regularly with them, etc.
    They knew how to get the loan sold to Freddie and were coached on what they needed to do.

    Mortgage loan brokers who did not have "in-house" coaching had "broker liasons" employed by the big lenders assigned to help them when they had problems getting loans approved.

    (Lenders created what the media called "plausible deniability" when the media spoke of the Iran-Contra scandal).

    The lendrs were not stupid. They knew what was going on and they created a system that encouraged loan fraud becuase they profited from loan fraud.
    Mar 9 10:27 AM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    Blueline,

    I differ.

    As a closing attorney, I made a lot of money closing loans which should not have been made. I rationalized that at least I was closing the loans and would tell the client the truth, unlike much of my competition who considered the lenders as their clients.

    I have seen many loans that sould not have been approved, but desperate borrowers take desperate actions. I remember one refinance for an elderly woman whose loan application signed at closing showed her only income was a SS check under $ 700/mo and the P&I on the loan was @ $ 350/mo. If you figure utitlites, homeowners insurance, and maintenace, she would not be able to pay the mortgage and eat or buy medications, etc. without help from her family. I had to respect my clients' decisions, but I did not have to feel good about it. The underwriters who approved such loans should be incarcerated if you ask me and the GSE's should be similarly punished because they were the reason those loans were approved.

    The beginning, middle and end of the previous housing bubble was the TBTF banks' alliance with the GSE's wherein and whereby the GSE's and the TBTF banks would "earn" undeserved profits by making loans to anyone who could breathe, based upon inflated property values, phony loan applications, almost non-existent loan approval standards, etc., and then sell them to the GSE's who would buy anything from them.

    I would be curious to know how many loan packages were proffered to the GSE's, especially Freddie, and actually rejected. Who publishes that info?
    Mar 8 12:02 PM | 1 Like Like |Link to Comment
  • "The current bull market might be one of the strongest of our careers, says Richard Bernstein, believing the next 4 years may rival the 4 beginning in 1982. Concerns of the current cycle are not unique, he says, saying now as then investors are concerned with the Fed, Iran, slow-growth, and the last decade's poor returns. "Many investors still do not even believe that a bull market is underway." [View news story]
    The "investors" that don't know we are in a bull market don't have the will or resources to invest enough money to influence the market.
    Mar 7 03:20 PM | 5 Likes Like |Link to Comment
  • Comex gold scores its biggest one-day gain of the year, jumping $28.90 (+1.8%) to settle at $1,615.50, as Bernanke’s comments were "music” to the ears of precious metals bulls, Real Assets' Jan Skoyles says, "and strong economic data is just not enough anymore to convince markets that all is well." Silver +0.9% to $29.32. [View news story]
    Makes sense now. Thanks Denny. I suppose that "sluttish" money, would be a politically incorrect nickname for easy money, but it might be a more accurate descrription.
    Feb 27 08:40 AM | Likes Like |Link to Comment
  • Comex gold scores its biggest one-day gain of the year, jumping $28.90 (+1.8%) to settle at $1,615.50, as Bernanke’s comments were "music” to the ears of precious metals bulls, Real Assets' Jan Skoyles says, "and strong economic data is just not enough anymore to convince markets that all is well." Silver +0.9% to $29.32. [View news story]
    Why is a policy of fiat money-printing called dovish? Just wondering.
    Feb 26 03:07 PM | Likes Like |Link to Comment
COMMENTS STATS
284 Comments
404 Likes