Russia space chief calls satellite crash "heavy loss"

SEVERODVINSK, Russia (Reuters) – Satellite infrastructure for Russia’s challenge to the U.S. global positioning system (GPS) will be ready by March despite the “heavy loss” of a failed launch, the country’s space agency chief said on Monday.

Sweden bomber ‘headed for crowds’

A man who blew himself up in Stockholm was carrying three explosive devices towards crowded areas and intended to kill as many people as possible, prosecutors say.

Regal Beloit to pay $875 million for A.O. Smith’s motor biz

(Reuters) – U.S. industrial major Regal Beloit Corp said it agreed to acquire the electric motor business of rival A.O. Smith Corp in a cash-and-stock deal worth about $875 million.

Reverend Billy: The Earth-Buster Sale

On Black Friday/Buy Nothing Day — we enjoyed our annual turn on national television, cutting into the heavy-breathing shopping reports with our alternative Christmas. A comment like “But if we stopped shopping — what about jobs? — what about the economy?” would ring in the air again and again.

Then we try to describe a quiet revolution that is already more extensive than anyone knows, a transition many of us are making to the realities of peak oil and climate change. Our solution is such a Norman Rockwell painting of a small town, or a Langston Hughes poem of a city neighborhood, with farmer’s markets, old shops and everyone knowing the first name of the person they are talking to… that the “revolution” we’re describing seems simply the good way to do things. Then the choir belts out “What Would Jesus Buy?” and we sing and shout until the producer gives us the slit-throat signal.

We do this every year and it’s not a bad life. But this year I do feel like singing “If You Don’t Know Me By Now.” Because there is — you noticed? — a dispiriting return to the corporate Christmas by many consumers. The myth of the single oil-based economy still glories in its unstoppable ads. On the international level there wasn’t a leader who explained during the recession that there was an alternative to it. Obama sure didn’t.

We are finally suffering from the consequences of the mind-bath of marketing. The psychic environment, the thousands of gushing products that we walk through, has altered are basic perceptions. Our “pattern consciousness” is shattered. We have come to believe the basic con-job of Consumerism, which is: “This product on the shelf has no past, no labor or natural resources history. The reality of this shiny package begins with buying it.”

Thus the emotional report of the shopping grosses on Black Friday — that it increased by 5 percent and that this is a stand alone American triumph. The fetish for the retail grosses… what a weird horse race! The Wall Street expectations are met, disappointed or surpassed and we are taught to obey the applause signs. But if our pattern consciousness hadn’t broken down, we wouldn’t act like we are outside of time. We would sense a history in these products.

We would see through the hypnotizing horse race to the real impact of consumerism in the world. We would connect this kind of shopping to sweatshops, to the dying oceans, to wars for oil, to the silencing waves of extinction.

We would look down at our hand, hovering there over the counter with money in the fingers. How much power is in this gesture? Consumerism keeps this economy going, which is destroying life. This Christmas is selling everything.

And how deeply felt would be our recognition — that living sustainably isn’t just a political position. Will our children live?

Read more: Market, Holidays, Children, Old Shops, War, Christmas, Farmer’s Markets, Obama, Peace, Buy Nothing Day, Reverend Billy and the Church of Stop Life After Shopping, Consumerism, Reverend Billy Talen, What Would Jesus Buy?, Free-Market, Revolution, Oil, Black Friday, Wall Street, Global Warming, Sweatshops, Impact News

Georges Ugeux: The Euro will Neither Collapse nor Disappear


The abyss of knowledge of the European situation is as impressive as the pontification of gurus about the end of the Euro. In two previous blogs I suggested not to shorten the Euro (you would have lost 20%) and that the problem is the one Americans refuse to see: the deplorable state of their currency, further weakened by the recent QE2 initiative of one of the worst President that the Federal Reserve had recently.

But let’s look at the arguments.

The first is that Germany might “drop” the Euro and go back to the Deutsche Mark. This idea ignores two factors. The first one is that there is no way the members of the Eurozone can “drop” the Euro under the prevailing treaties. There is no exit mechanism and any such mechanism would have to be agreed unanimously by the 16 Members of the Eurozone: that is totally unlikely, if not impossible.
But there is a reality that few observers understand: before the Euro, most weak European countries -who, by the way, are the same as today- were resorting to competitive devaluation. In other words the disparities of discipline and performance were resolves by devaluing the currencies of the weak countries, and the Italian Lira, the Spanish Peseta and the French Franc were always part of it. That was making German companies less competitive.

Now, there are no more competitive devaluations, and Germany is the best performing European country and the most solid financially. The fact that the Eurozone participants agree in difficulty was totally predictable. So predictable that the Stability Pact attached to the Maastricht Treaty provides for sanctions against those who derail. Instead, Europe derailed and did not impose those sanctions as a result of its weak political governance and the fact that the problem was entirely in the hands of politicians and no institution or mechanism was provided to prepare those decisions. It is that negligence that led to the current crisis.

However, it also has a secondary advantage: those economies that diverged economically and socially are forced to act now and correct the mechanism. A common currency means that investors will differentiate the countries through interest rates, and they do so. That forces eventually the countries with high interest rates to take drastic and decisive measure not to go bankrupt.

In a sense, the current crisis should strengthen further the Euro, and since the dollar is on a sliding slope, its value should improve seriously in the coming months. The key to that is the ability of the weak countries to take the drastic measures they need. It creates social turmoil. It will be politically difficult. Provided that the financial support of the European Stability Fund is assorted with strict conditions, there is a chance that the Euro comes out reinforced and stronger.

It requires political decisiveness: the need for convergence is urgent. Without it, further crisis will continue to make investors doubt. Those doubts, however, should not include any scenario of break up or disappearance of the Eurozone.

Read more: European Debt Crisis, Qe2, Federal Reserve, Eurozone, Germany, European Commission, Euro, Maastricht Treaty, Stability Pact, Business News

L. Randall Wray: Anatomy of Mortgage Fraud, Part II: The Mother of All Frauds

In part one of this series I showed that MERS recommended that mortgage servicers retain the “wet ink” notes that borrowers signed. These notes are required in 45 states to foreclose on a home. Not only does the foreclosing party need to physically hold the note, but the note must be properly endorsed and transferred every time a mortgage is sold. A clear chain of title must be demonstrated to make the note valid. This is to protect borrowers from fraud — no one can manufacture a note, claim to be a creditor, and then take a homeowner’s property. And this is especially important when mortgages are securitized and bought and sold a dozen times — if there is no clear chain of title, the borrower can never be sure who is really the creditor.

But, in fact, the notes were never transferred, there is no clear chain of paperwork, and in many cases the notes have “disappeared” so that when the servicers or MERS tries to foreclose, they must file “lost note affidavits” claiming rightful ownership even though they do not have evidence. They have also been caught using “robo-signers” to forge documents — and sometimes they have foreclosed on the wrong properties and even seized homes on which there was no mortgage. That is precisely why the law requires proper transfers of the note. Without that, the mortgage is a fraud and foreclosure is fraudulent.

By itself, all of this is a horrific scandal, involving up to 65 million mortgages — the number of mortgages registered at MERS, most of which presumably were subjected to MERS’s guidelines and extremely sloppy record-keeping. But like Shrek’s onion, it is much more complicated than that — with layer after layer of fraud piled on fraud. There are many angles to be explored, most of them too complex and arcane to be pursued in a short column. Here, in part two, I will discuss the implications for the securities that bundled the fraudulent mortgages registered at MERS. Not only did MERS defraud the counties out of their recording fees and the homeowners out of their homes, but it also helped to perpetrate securities fraud and federal tax fraud. Fortunately for the investors in these securities, the securitization process was fatally flawed, meaning that they can return to the issuing banks and demand their money back. But that implies, of course, that the banksters are hopelessly insolvent — on the hook for hundreds of billions of dollars.

Inevitably, they will turn to Uncle Sam for more handouts. Get ready for more backroom deals made by the Fed and Treasury to rescue firms like Bank of America. If you loved the first three rounds of this financial crisis, you will love the next six rounds as markets pummel Wall Street banks, with Uncle Sam as referee applying the smelling salts to revive it for yet another round (whilst its CEOs skim more billions off the top in compensation). Ultimately, it will not work. Wall Street will go down for the count — but probably not until it drags Main Street through a great depression that your great grandkids will study in the history books. And, by the way, they will laugh at the misguided efforts of the thoroughly compromised one-term Obama administration that focused its efforts at budget-balancing in the face of the worst headwinds America had ever seen.

MERS and Securitization

Recall from part one that mortgage lenders and servicers are members of MERS, with one employee of each deputized by MERS. This allowed the fiction that resales of mortgages are merely in-house transfers and hence there is no need to pay a recording fee to the county where the property is situated. MERS claims to be the mortgagee of record, holding the mortgages for its members. At the same time, it recommends that servicers retain the notes, but since these are members of MERS, and since MERS has an employee in each, MERS claims it has the legal standing to foreclose on delinquent borrowers.

Mortgages were typically securitized and pooled in a Real Estate Mortgage Investment Conduit (REMIC) that would hold them in trust. Done properly this allowed them to take advantage of an IRS tax exemption. However, to avoid the county recording fees, MERS claimed to hold the mortgages and notes (technically, the mortgage and the note are separate, and it is the note that is required to foreclose — without the note, the mortgage has been ruled by courts to be a “nullity” — see Floyd Norris) so that they could be traded without paying the fees and filing the paperwork. In fact, the servicers held the notes. But if the servicers were holding them, how could they be in the REMIC trust? The IRS code is very strict — the paperwork must be conveyed to the REMIC and there must be a clear paper chain of title through the securitization and sales. Without the paperwork, the securitizations may not be legal, and could subject investors to back taxes and penalties. (See Adam Levitin)

But, as always with the Wall Street onion, things are worse when we dig deeper. Almost all of the residential mortgage backed securitizations were done under New York state law — which is even stricter than the REMIC requirements. That law wanted to make the securities as safe as possible, “bankruptcy remote” so that if the issuing banks failed, bank creditors could not come after the securitized mortgages — to seize the notes and recover losses. This is why it was essential that the notes and mortgages be physically conveyed to the trustees. Remember that the major banks are also owners of the servicers — so if the servicers retain the notes and the bank fails, the bank’s creditors might be able to claim the notes and mortgages. So according to NY state law it is the “Pooling and Servicing Agreement” that governs the securizations. These require that the notes and mortgages are held by the REMIC trustee. Indeed, they require that the trustee check to make sure all notes are conveyed; if there are any mortgages included in the “pool” without proper paperwork, then they must be replaced by mortgages with notes. All of this is supposed to be certified by the trustee as completed — usually within about six months. (For an excellent explanation of the details, see Yves Smith)

We now know beyond question that the notes were not typically transferred — both MERS’s own document as well as court testimony by top management of servicers make it clear that the “customary” practice was for the servicers to retain the notes. We also know that almost all securitizations were done in NY. And we know that the PSAs required transfer of the notes to the trustees — who were required to certify that this was done. From this we can conclude that a) the trustees either did not perform the certification, or they lied, and b) the securities are no good. Probably most of them; maybe all of them. Fraudulent.

Lo and behold, the mortgages went spectacularly bad. That would mean the securities holders are stuck with losses. But only if the securitizations were legal. They were not. They failed on two accounts: the underlying mortgages did not correspond to the “representations” made to securities holders, and the notes were never endorsed and sent to the trusts. That means the holders of the trillions of dollars of securities can present them to the originating banks, demanding their money back.

The servicers are now “misplacing” all the documents, including the notes, associated with the mortgages on which they are foreclosing. The hope is that MERS and the mortgage servicing banks can get the properties, dispose of them in firesales, and pay pennies on the dollar to securities holders before they discover they’ve been scammed from here to Pluto. Hence it would seem the notes were not really lost, but rather are being destroyed to cover the fraud. And if this is true, MERS and the big banks are conspiring to commit foreclosure fraud as they destroy documents and create new counterfeit paper trails. The reader who pointed me to the MERS document put it this way:

When we get into the “work product” of the ‘robo-signers’ as seen in the sheer volume of Lost Note Affidavits, it is evident that these exist not simply because notes were “lost” but as a cover-up because the trustee and/or servicers realized early on that the notes were never properly endorsed and transferred or delivered to the trust so they “disappeared” the physical piece of paper and any allonges thereby eliminating any evidence contrary to the trust’s ownership of the notes. As you wrote ‘Those pesky little documents might come back to haunt them should someone later file a lawsuit.’

Yep, that is why they are shredding them and hiring Burger King kids to manufacture new ones. More fraud to cover previous fraud. Yes, this is go-to-jail fraud, but what the heck — if you are already facing time behind bars you might as well go for broke.

I share this reader’s outrage:

Reading through “MERS Recommended Foreclosure Procedures – State by State“, it becomes obvious that MERS was set up to be one big steamrolling foreclosure machine. I simply cannot get over the fact that this document was created in 1999. How nicely MERS accommodates predatory servicers inflicting servicing fraud on homeowners in order that deal makers, proprietary traders and certain hedge funds could profit many times over with their rigged credit default swap bets shorting subprime. This was a very clever, interlocking scheme of complicity on the part of many involved perpetrators.

You don’t have to be a conspiracy theorist to smell something rotten in Denmark about all of this. Maybe there was never any overarching plan. Maybe MERS was set up merely to defraud counties out of their mortgage registration fees. Perhaps MERS never realized that failure to transfer the notes to the trustees invalidated all the securities, while contributing to tax fraud.

If all that is true, then the destruction of documents and the creation of falsified documents by “Burger King” robo-signers was not planned back in 1999. But it is still go-to-jail fraud. And the big banks are still on the hook for hundreds of billions — maybe trillions — of dollars. In other words, it is still a big problem.

Where Do We Go From Here?

To recap, MERS’s own documents demonstrate beyond question:

  1. The notes were never transferred, as required by Federal and NY state law, to the trustees of the REMICs;
  2. At best, the notes were retained by the mortgage servicers as directed by MERS (many never left the mortgage brokers, many of whom are now bankrupt);
  3. MERS claims to own the notes and therefore the mortgages to speed foreclosure;
  4. Actually, MERS does not hold the notes, which are held by servicers, but MERS instead “deputizes” employees of the servicers so that it can claim notes are transferred “in house” to avoid paying recording fees as well as avoiding maintenance of clear chains of title;
  5. On foreclosure, the documents are “disappeared” because they demonstrate the notes were never endorsed and transferred as required by law, with MERS and the servicers filing “lost note affidavits” to dupe the judges into allowing illegal foreclosures to proceed and to dupe securities holders so that they do not demand restitution;
  6. Servicers ensure homeowners default, as they “lose” mortgage payments, credit them to the wrong accounts, or helpfully recommend to homeowners that they stop making payments–all of this is to speed foreclosure to ensure securities holders do not realize they have been duped as they are paid pennies on the dollar for toxic securities;
  7. This also ensures that the investment banks that originated the toxic securities win their credit default swap bets they placed against the homeowners, with favored hedge fund managers like Paulson also winning CDO bets on failures;
  8. The faster the foreclosures can be processed through manufacture of fraudulent documents by Robo-signers, the lower the chance that MERS and all of its clients will be brought to justice.

There is a community of interests that can bring together the securities holders (including PIMCO and the NYFed) and the defrauded homeowners to stop the illegal foreclosures. The best thing for the investors is to demonstrate that the securities are fraudulent because the underlying mortgages did not meet the representations and because the notes were not legally transferred. The best thing for the homeowners is to demonstrate that because the notes were not legally transferred, no one has standing to foreclose. While they might still owe money on their mortgages, no one can take their homes away from them. That provides the proper incentive to force banks to modify the mortgages.

Further, and somewhat ironically, leaving homeowners in their homes is best for the banksters at the level of the economy as a whole. Since the securities investors will be able to force the banksters to take back the securities, the loss minimizing solution for banks is to stop the foreclosures that are depressing real estate prices. That can then buy time to modify the mortgages to ensure homeowners can stay in the homes and service their debt. Instead, the banks are pushing for Congress to retroactively legalize the frauds they perpetrated against counties, borrowers, and investors. As always, Wall Street wants someone else to pay for its crimes — and is willing to destroy the property rights that are fundamental to a system based on private property in order to protect CEO compensation on Wall Street.

Here is the alternative solution President Obama needs to consider.

  • An immediate moratorium on foreclosures of any mortgages that are, or ever were, registered at MERS;
  • Declare all outstanding fraudulent securities null and void, require securitizing banks to make restitution to investors, and sue the banks for restitution of the back taxes owed by REMICs;
  • If this makes the banks insolvent, begin to resolve them, shutting them down;
  • Prohibit Fannie and Freddie and any chartered bank from dealing with MERS, which is an organization formed to perpetrate fraud;
  • Investigate MERS for fraudulent activity, require restitution of all county recording fees that were evaded, and punish the guilty;
  • Formulate a policy to help homeowners who have been victims of lender fraud, with a goal of reducing mortgage payments to something they can afford; and
  • Let Congress know he will veto any legislation that legalizes the fraud perpetrated by MERS, by mortgage servicers, and by originating and securitizing banks.

These actions will help to restore the rule of law, while punishing the guilty. And stopping (illegal) foreclosures will reduce the pressure on real estate prices. By itself this will not put the US on the road to recovery, but it is certainly a step in the right direction.

In the final part of this series I will conclude with an assessment of the role that self-supervision by Wall Street played — and continues to play — in propagating this crisis, with MERS as the prime example of the folly of the delusion that the interests of banksters coincide in any manner with the public interest.

Read more: Foreclosures, Fraud, Foreclosure Crisis, Wall Street, Bank of America, Mortgage Crisis, Mortgage Fraud, Mers, Foreclosure, Business News

Economists Now A Lot More Cheery About 2011

Economists have grown more optimistic about the outlook for U.S. growth next year, predicting the expansion will accelerate as 2011 progresses, according to the latest Wall Street Journal forecasting survey.

The 55 respondents, not all of whom answer every question, raised their growth projections for gross domestic product for nearly every period, including the current quarter. On average, the economists now predict GDP will grow 2.6% in the current quarter at a seasonally adjusted annual rate, up from the 2.4% growth they projected in last month’s survey. The economy grew 2.5% in the third quarter.

Read more: Gdp Growth, Wall Street Journal Forecasting Survey, Business News, Economic Growth, Economy, Economic Crisis, Business News

Toyota tops in U.S. car buyer consideration: KBB

DETROIT (Reuters) – Toyota Motor Corp has regained the top spot among U.S. consumers who are considering buying a new car, followed closely by Ford and Honda, Kelley Blue Book said on Monday.