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Thread: Feds sue banks

  1. #1
    I'd rather be lampshading Array jonny danger's Avatar
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    Feds sue banks

    It's about time.


    NEW YORK (AP) -- The government has sued the nation's largest banks, along with a handful of other financial institutions and executives, for violating federal and state laws in the sale of home mortgage-backed securities.

    Among the 17 institutions targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.

    Home mortgage-backed securities were risky investments whose collapse after the real-estate bust helped fuel the financial crisis that erupted in late 2008.

    The lawsuits were filed Friday by the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac.

    Feds sue biggest US banks over risky mortgages - Yahoo! Finance

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    Interesting thread (well, to my anyway Jonny):

    I'm reading some criticism of this lawsuit also, in the sense that Fannie and Freddie were apart of these CDOs also (I'll of course have to get the info). Since Fannie and Freddie cost taxpayer over $100 billion dollars, the gov is suing these banks that were allowed free reign basically, to cover Fannie and Feddie's losses? Because Fannie and Freddie are state enterprises? I've read about for former CEO of Faniie when I've read about these corrupt banks.

    Here is a snipped (wiki) on former CEO of Fannie, James Johnson:-
    ------
    Fannie Mae In 1990, Johnson became vice chairman of Fannie Mae, or the Federal National Mortgage Association, a quasi-public organization that guarantees mortgages for millions of American homeowners.[3] In 1991, he was appointed chairman and chief executive officer of Fannie Mae,[3] a position he held until 1998.

    An Office of Federal Housing Enterprise Oversight (OFHEO) report[4] from September 2004 found that, during Johnson's tenure as CEO, Fannie Mae had improperly deferred $200 million in expenses. This enabled top executives, including Johnson and his successor, Franklin Raines, to receive substantial bonuses in 1998.[5] A 2006 OFHEO report[6] found that Fannie Mae had substantially under-reported Johnson's compensation. Originally reported as $67 million, Johnson actually received approximately $21 million.


    In the 2011 book Reckless Endangerment: How Outsized Ambition, Greed and Corruption Led to Economic Armageddon, authors Gretchen Morgenson and Joshua Rosner wrote that Johnson was "corporate America's founding father of regulation manipulation", and one of the key figures responsible for the late-2000s financial crisis.[7]

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    Not to mention the Federal Treasury doling out the money without ever conducting any oversight.

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    That world-wide payout was a big secret. The missing $2 Trillion dollars that was only made publice after the Dodd (and someone else act).

    McDonald's (which has been doing great business for the last few years!) got money, Harley Davidson, Korean and European banks and other foreign banks.

    BTW, on a different yet related note, Treasury yields for long term are basically 0. Like a horizontal letter "J." Longer your Treasury note the less yield (no yield).

    Expect another move by the Fed to do something, whatever it may be. "Operation Twist?"

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    ^ Dude, can you try that again, in English this time? Don't rely on Babelfish to translate from your native Urdu, ok?

    Seriously, a lot of your sentence structure makes no sense and seriously obfuscates any possible meaning you might have been trying to convey... unless that's by design, in which case you succeeded....

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    Quote Originally Posted by Cthulhu View Post
    ^ Dude, can you try that again, in English this time? Don't rely on Babelfish to translate from your native Urdu, ok?

    Seriously, a lot of your sentence structure makes no sense and seriously obfuscates any possible meaning you might have been trying to convey... unless that's by design, in which case you succeeded....
    What part don't you understand? (Yes, I can re-write.) I just realized the Inverted "J" curve is an old political science I learned 20+ years ago. - I mean to say "Inverted YIELD Curve."

    1. the $2 Trillion?

    or,

    2. the long term treasury, inverted yield curve?

    ---Update---

    1.
    Inverted Yield Curve


    What Does Inverted Yield Curve Mean?
    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession.



    Read more: Inverted Yield Curve Definition

    2. The $2 Trillion secret dole out was in response to the above post (I responded to) about the Fed giving out money without Congressional oversight. One of many companies to receive this money was McD's, Harley-Davidson, and Korean, European banks, and others. (Note* this is not about the TARP bailout that was $800+ billion in 2008.)

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    "Longer your Treasury note the less yield (no yield)."

    There's something missing in your sentence there, I think.

    ---Update---

    Why is no one investigating the treasure for passing out money without oversight, or accountability?

    This isn't the first time the Treasury did that (you note the TARP bailout), so what is being done to prevent this from happening in the future?

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    Quote Originally Posted by Cthulhu View Post
    "Longer your Treasury note the less yield (no yield)."
    You mean the first word should be, the? or, "the lesser the yield?" Anyway, semantics. I think you get it.

    There's something missing in your sentence there, I think.
    ---Update---
    Why is no one investigating the treasure for passing out money without oversight, or accountability?
    The Fed gave out the money, but of course the Treasury "printed it" or authorized the "creation" of it. The money doled out was given away by clicking a button on a computer. "click: here is your money."

    The Dodd-Frank act was the "investigation" of "oversight" to at least find out which companies and banks got the $2 Trillion, and also the $15-20 Trillion that was doled out all over the world.

    But accountability? With the Fed? No way. Never was accountable, never will be. And the Federal Reserve is a private bank. It's as Federal as FedEx. It's devalued the US dollar by about 90% since it's secret inception in 1913 (see: The Creature from Jekyll Island, the youtube presentation by auther Griffin is just as informative as the book.) In fact, I am quite sure you can do a search for it in the Soap Box and find it.

    As for the Inverted Yield, it often (but not always means):

    Historically, inversions of the yield curve have preceded many of the U.S. recessions.
    Due to this historical correlation, the yield curve is often seen as an accurate forecast of the turning points of the business cycle. A recent example is when the U.S. Treasury yield curve inverted in 2000 just before the U.S. equity markets collapsed. An inverse yield curve predicts lower interest rates in the future as longer-term bonds are being demanded, sending the yields down.

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    I'm sure talking heads will claim that this is just part of the govt's "controlled inflation" to devalue their foreign debt - which, of course, is just more smoke and mirrors.

  10. #10
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    Quote Originally Posted by Cthulhu View Post
    I'm sure talking heads will claim that this is just part of the govt's "controlled inflation" to devalue their foreign debt - which, of course, is just more smoke and mirrors.
    Well, the US has intentionally devalued the Greenback in the past (Plaza Accord 1985) and other actions over time.

    Not sure if the US gov would want to devalue the currency enough to devalue the foreign debt enough because of the negative ramifications at home in the US. (But yes, in the past nations with overwhelming debt deflated their currency in order to deal with it.)

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    They have been discussing "controlled inflation" over the past several weeks, precisely for that reason.

    I feel that in the current environment, and with the current morons "controlling" things, it would quickly spin out of control.

    Hence, I laugh at those steadfastly assuring me that we are at the very bottom and "the only way we can go from here, is up".

    I feel real estate has easily another 20% left to drop, if not more, in the next 24 months.

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    Quote Originally Posted by Cthulhu View Post
    They have been discussing "controlled inflation" over the past several weeks, precisely for that reason.

    I feel that in the current environment, and with the current morons "controlling" things, it would quickly spin out of control.
    I don't know what the projected inflation rate is by the gov (the lying stats) and I don't know what the real inflation rate is at the moment (I'll check shadow stats tomorrow and other sources tomorrow).

    That said, people I talk with - and I ask them here in the Seattle area - "are prices going up for you?" They answer yes, and I ask "on what?" and the say a list at the top of the heads. Lot of it is food, but also clothes, and gas/petrol prices (for Americans) is considered high, and gas I consider a part of inflation because Americans have to buy it, and they drive a lot of miles per day, and their disposable income spent on gas means they don't spend it elsewhere in a consumption driven economy that is dependent on people buying sh*t.

    ---Update---

    Quote Originally Posted by Cthulhu View Post
    Hence, I laugh at those steadfastly assuring me that we are at the very bottom and "the only way we can go from here, is up".
    I agree.

    If there is a bottom, the US is no where near hitting it. I just finished a book by Paul Craig Roberts called "How the Economy was Lost." I highly recommend it. He claims for the next 2 decades the outsourcing, off-shoring and insourcing, trade deficit, National Debt and declining US Dollar will make the US a nation of "non-tradable domestic service job" country: a nation where adults work as bartenders, waitresses, cab drivers, hospital orderlies, and hotel-room cleaners. Low wages, no benefits, and a low standard of living.

    How about them apples?

    I feel real estate has easily another 20% left to drop, if not more, in the next 24 months.
    Real Estate is still declining (except in a couple rare cases) and yeah, Shiller says a further decline of 20% if quite possible - well, he predicts it.

    The stats I posted in the "US housing bust has begun thread" that I started 5 years ago last month (thank you) has some recent data that I posted. Check it out.

    Later, dude.

  13. #13
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    So, depression era depression, coming up.

  14. #14
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    Quote Originally Posted by Cthulhu View Post
    So, depression era depression, coming up.
    Some think so, some think so-so, some think not.

    To parrot an article I read last week, it could be called:

    The Great Contraction

    Very low GDP grow: 0-1% Maybe 2%. For many, many, years. Like a lost decade. Like the decade Japan experienced in the 1990s.

    Decades of over-borrowing (over-leveraging) now is inwinding.

    There was another Great Contraction. But it's known by another name: "The Great Depression."

    But the world is a much difference place technologically and economically today. More interconnected. More people have mortgage loans, higher debt of all kinds.

    The world today is more connected.

    This is why the European news that you WILL hear about in less than 4 months will hurt the other economies.

    Europe - well, it's banks - will be in the news within 4 months/16 weeks.

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