That’s All I Can Stand, I Can’t Stands No More…

Hello, good morning Mr. Obama, this your wake up call

Popeye, one of my favorite cartoon characters growing up as a a kid, was one of the good guys, but he had his breaking point. The quote at the top seems to pop up in my mind each time I hear stories like  those that follow:  

We got a call in our office today from a gentleman who wanted to know if his Workshop Handbook order had been processed and sent yet. He was concerned that his credit card was declined because his credit card company had contacted him to inform him that his credit line with a balance of $5,342 and credit limit of $11,500 had been cut all the way down to $5,400(nice round number) leaving him a whopping $58 left on his credit line. Not because he had defaulted on his mortgage and was in foreclosure, he’s not. Not because he missed a payment or had been late, he hasn’t been late on anything in 10 years. The explanation was “because of the bad economy.”

Lisa had a home equity line of credit for $320,000 that she had not tapped into at all, it was there as a cushion just in case she ever needed it. Her brother was taken seriously ill and Lisa’s blood was a perfect match for medical procedures that were required. She took time away from work and began traveling to Houston using advances on the home equity line for expenses and to pay some of the bills and after a few months had run the balance up to about $58k…all of a sudden the bank informed her that they were cutting the line of credit from $320k all the way down to $60k.

The Griswolds lease was up on their “family truckster, ” they had paid U.S. Bank for 60 months, as agreed, always on time thanks to the convenience of the payment being automatically deducted from their checking account. The residual value/buyout on the lease was about $15,500, the wholesale book value was about $15,000 or they could just turn it back in and go get something new. Clark offered U.S. Bank $11,000 to buy the truckster thinking they would laugh at him…in 60 seconds they accepted his offer. His payment on an $11k loan would be half what he had been paying U.S. Bank for the last 5 years, no brainer right? After two weeks of back and forth, tax returns, etc., etc….declined. The Branch Manager says, “I’ve been doing this for over 20 years and never seen it like this, they (U.S. Bank) have taken all the lending authority out of the branches and centralized the decision making, I can’t get a loan approved for people even if they’re gold plated.”

Meanwhile, we have artificially low rates which is allowing the banks to borrow from the fed at 0% and buy treasuries(that would be gov’t debt) and make 300 + basis point spread? OK, I get that part of the plan to help banks recapitalize, but Joe Lunchbucket on Main Street is dying.  Merideth Whitney ,who was very early in her call on the mortgage meltdown and financial crisis when no one was listening 2-3 years ago said she “has 100% conviction that the consumer is not getting better.”

The bill of goods we were sold in the Trillion plus bailout program in the fall of 2008 (yes trillion, $700 billion is just the “headline” number, kind of like 10% unemployment is a “headline” number) was that we needed to “unseize the credit markets and keep credit flowing.” The TRUTH, to date credit lines on just credit cards alone have been cut by $1.5 trillion. Once again reality just doesn’t square with the facts. No jobs, no credit means no consumer spending which means no economic recovery… it really is that simple despite what the TV says.

What about Small Business

These are just individual consumers, with good credit, at least for now. What about small businesses that are experiencing the same thing… almost 50% of the jobs in America can be attributed to companies with less than 50 employees. In fact, only 17% of jobs involve companies with 500 or more employees.

Washington and Wall Street want Americans to “take a pill” with more government plans that are poorly thought out, address only symptons, and fail because of miserable execution. Let’s say we take $50 billion(that’s billion with a B) of taxpayer money and poor it down a “black hole” called General Motors, GM employs just slightly more than 100,000 people in North America(last I checked that includes Canada & Mexico too). The first thing we do is get rid of CEO Rick and replace him with CEO Fritz and then 8-9 months later we get rid of Fritz and bring in _________(fill in the blank as if it matters). Simple math in my head puts that at about $500,000 of your money PER EMPLOYEE of GM in the name of “job preservation” at an American icon. Good idea? Good business decision? NO…Its insanity, but hey there are 535 people in Washington that we voted into office running this circus.

If you look at the various “deals” Paulson, Geithner, Washington et al cut with various firms/industrys and asked would a real business person, say a private equity firm have ever agreed to something like this? In almost all cases the answer is resounding No. I know of at least one company in upstate NY, solid product line, starving for working capital, that with an extra $500,000 would immediately create a dozen new jobs in a community still reeling from an Air Force base closing.  Lynn Tilton, CEO of Patriarch Partners ,  has a mission and a plan to help American overcome its “plague of joblessness.” American needs an injection not a pill. That injection needs to be capital and credit with a laser-like focus on small and medium sized businesses. She is not a government wonk or “think tank” schill. She “gets it.” She has been trying to get Geithner’s attention for months, but apparently he doesn’t want to hear about real world solutions. After all part of the problem is we don’t make anything here in the U.S. anymore. We need people who understand how a business is run and/or have run one before, we need a strategy focused on small and medium sized businesses, that is where the needed jobs will come from, they must. If more people in Washington, thought like Tilton and understood what she understands, the economic reaction or recovery may not quite rise like Popeye’s strength after downing that can of spinach, but we’d have a fighting chance.

People are waking up, sentiment is changing, in the foreclosure courts judges are asking questions they never asked in the past sua sponte.  On Main Street, people are paying more attention to what is going on in Washington even if they are not in foreclosure, in some cases because they are “underwater” in their house through not fault of their own. People are spending their money at the locally owned businesses rather than the big corporate chain. They are closing their bank account at Bank of America or U.S. Bank and opening one at the local community bank or credit union, who didn’t play in the mortgage meltdown, but now are being asked to foot the bill through higher FDIC fees to replenish a fund decimated by the “big banks.”  

I would often take the kids to a local family owned diner after church on Sunday. A while back, down the street a Bob Evans Restaurant(read:big corporate chain for those of you not in the midwest) opened up right in front of the new Wal-Mart and one Sunday my younger daughter Kassidy said, “Dad, lets go to Bob Evans, let’s go to Bob Evans.” To which my older daughter Kendall replied, ” Kass, we can’t go to Bob Evans, that would be like going to the Ohio State game and rooting for Michigan.” God love’em even my kids are rooting for small business…guess the apple doesn’t fall far from the tree afterall.

20 Responses

  1. Almost all loans were securitized, you will have a difficult time finding your loan in the SEC search if you dont have the PSA. However, you can still fight, ask for good discovery documents, interrogatories and Admissions. Take time learning your local Rules of Civil Procedure, and less time worrying and speaking negatively. Use this site and the case law discussed…..its up to you to find the similarities in your own case and then persuade the Court. Its a game of cat and mouse for a while, but these lenders are the liars, they will make a big mistake and when they do you must pounce on it and Counterclaim or move for Sanctions. Don’t give up! This year things will be different.

  2. I’m sick of it all. I can’t tell you the number of SEC filings I’ve scanned trying to find evidence that my loan was securitized.

    Everyone says it the right thing to do but no one tells you how.

    This may as well be a course in theoretical physics.

  3. […] SEC JUST NOW SEEKING KEY INFORMATION ON MELTDOWN Posted on December 18, 2009 by livinglies THANK YOU ALLAN AGAIN!!! Submitted on 2009/12/17 at 2:00am […]

  4. Hello everyone,well it has been a year since countrywide sold there house back to themselves. I and my husband have stayed 2 sheriff evictions and unlawful detainer,foreclosure scam company not the trustee but the other worms that took advantage of what was left from the brokers the bankers and the fraudulent candle stick makers.We are in this cesspool of no fault of our own,we can’t seem to find the right people. I am however happy to say that I no longer believe in this nation and I have no faith in our legal system.What will it take to to get our day in court? we have all this evidence and of course we have nothing left of the years of building the American dream. so I have a lawyer that I am 90% sure was fishing to get modification’s, and they will kill this case if i don’t find some real attys. I realized they were not good when they tried to force a Modification and we have no loan1 remember countrywide sold the house to them selves. So I am begging Please help us. We are in California

  5. @Abby,
    He seems to have time to attend and party and show his face on television every second- including meaningless PR stuff like the Leno show and …well you get the idea… maybe he should make time to read Neil’s blog. The world would be a better place and he and his crew can cause less trouble for the main street business owners and hard workers.

  6. Wall Street, the banks and lenders, our government officials all = the “sons of darkness”.

    Steve
    99Libra@gmail.com

  7. Citigroup to suspend foreclosures for 30 days

    Bank is working on ‘long-term fundamental alternatives’ to foreclosure

    X_http://www.msnbc.msn.com/id/34460803/ns/business-real_estate/

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  8. Americans, if we want to achieve triumphs, victories, and results we have never achieved, we must go to places we have never been and take actions we have never taken, this is the time that our beautiful country and it’s decent people needs us the most, this is the time we must take action for ourselves and others!!!!! Fear will be our worse enemy now, we must unite and fight a strong, intelligent and peaceful battle, we are fighting for our lives, our homes, our children’s future!!!! we must defeat the evilest of all evil enemies, we will win, if we fight from our hearts, with our hearts, for our hearts!!!
    To victory America!!!!

  9. Neil==I hope you sent your post in a letter to the White House. I don’t think the President has time to read this blog.

  10. I’d recommend this book ‘Web of Debt’ by Ellen Hodgson Brown, JD.

    She has solutions in her book.

    She has done an amazing amount of research and has written a book that explains it to us all in understandable terms—it almost reads like a thriller—but it is real life.

    I am just a reader of the book and have no financial stake in its promotion.

  11. Business
    SEC JUST NOW SEEKING KEY INFORMATION ON MELTDOWN

    by Jake Bernstein and Jesse Eisinger, ProPublica
    – December 16, 2009 3:30 pm EST

    This story is part of an ongoing investigation with NPR’s Planet Money [1].

    Former SEC chairman Christopher Cox, right. (Chip Somodevilla/Getty Images)
    Former SEC chairman Christopher Cox, right. (Chip Somodevilla/Getty Images)

    Almost three years since banks started taking losses that led to the worst financial crisis since the Great Depression, the Securities and Exchange Commission is still asking basic questions about what happened.

    Were you there?

    If you were involved in the CDO business during the end days of the boom, please contact us. (917) 512-0258 cdos@propublica.org [2]

    The SEC is conducting an information-gathering sweep of the key players in the market for collateralized debt obligations, the bundles of mortgage securities whose sudden collapse in price was at the center of the meltdown of the global banking system.

    In a letter dated Oct. 22, the SEC sent what amounts to a questionnaire to a number of collateral managers, the middlemen between the investment banks that created the complex financial products and the investors who bought them.

    Collateralized debt obligations are made up of dozens if not hundreds of securities, which in turn are backed by underlying loans, such as mortgages. Investment banks underwrite the structures and recruit their investors. Collateral managers, brought in by the investment banks but paid by fees from the assets, select the securities and manage the structures on behalf of the investors. CDO managers have a fiduciary duty to manage the investments fairly for investors.

    Since 2005, $1.3 trillion worth of CDOs have been issued, with a record $521 billion in 2006, according to the securities industry lobbying group SIFMA. The collapse in value of mortgage CDOs triggered the 2008 financial collapse.

    ProPublica and NPR have confirmed that the SEC letter was sent to several managers, although the distribution list was likely industrywide. At the height of the boom in 2006, only 28 managers controlled about half of all CDOs, according to Standard and Poor’s.

    Banks began disclosing the first big losses on CDOs in early 2007. The infamous Bear Stearns hedge funds ran into problems [3] beginning that summer. By that August, the credit markets began seizing up. Merrill Lynch and Citigroup were among the hardest hit by losses on bad investments in mortgage-based securities and CDOs.

    The SEC’s letter focuses on information regarding “trading, allocation and valuations and advisers’ disclosure,” though it also asks for other details on how the managers ran their businesses. The letter requests information on CDOs issued since Jan. 1, 2006.

    The letter asks collateral managers for information about what investments they made on their own behalf and how they valued these investments. Securities experts say the letter indicates that the agency is still gathering basic information about the CDO market, despite its centrality to the banking crisis.

    “One wonders why this letter, especially given the general nature of it, is just now being sent. And why wasn’t it sent several years ago, as the CDO market was exploding?” says Lynn Turner, who was the SEC’s chief accountant in the late 1990s. “It makes it look like the SEC is several years behind the markets.”

    Even Wall Street executives and securities lawyers who were involved in the CDO business at its height have privately expressed surprise that the SEC was only now contacting them for such rudimentary information.

    The SEC declined to comment on the letter. As a policy, a spokesman said, the agency doesn’t comment on its regulatory actions. The SEC has jurisdiction over CDO managers,and enforces rules against securities manipulation, among other violations. The letter does not use the words “inquiry” or “investigation.”

    Interviews with market participants and former regulators point to several areas that the SEC might be investigating. Some managers had their own in-house investment funds and may have taken positions that were in conflict with those of the investors in the structures that they managed. In some cases, their hedge funds may have bet against the very slices of the securities they were managing on behalf of the investors in the structure.

    Underwriting investment banks often had influence over the investment choices some CDO managers made, giving rise to another possible conflict of interest. The agency may be looking at whether that influence was proper or not.

    “The possibility for conflicts and self-dealing is huge,” says Turner, the former SEC chief accountant.

    To date, the agency has little to show for its probes into the causes of the crisis that engulfed global financial markets just over a year ago. In June 2007, Christopher Cox, then the SEC chairman, testified before Congress that the agency had “about 12 investigations” [4] under way concerning CDOs and collateralized loan obligations and similar products. A little more than a year later, Cox told Congress that the number of investigations into the financial industry, including the subprime mortgage origination business, had ballooned to over 50 separate inquiries. [5]

    There could be multiple reasons why investigations are proceeding slowly. Such cases are complex and require enormous resources and expertise. Regulators also face the hurdle of proving intent to defraud.

    Under Cox’s stewardship, the SEC fell into disarray [6], and it was harshly criticized by Congress and its own inspector general, particularly for its failure to catch [7] the Ponzi scheme of Bernie Madoff. The turnover of the new administration, which ushered in new leadership at the much-criticized agency, has also likely slowed efforts. In recent months, under new Chairman Mary Schapiro, the SEC has made insider-trading inquiries a high priority.

    So far, there have been few indictments or civil complaints. In a sign of how long these cases can take, the mortgage company New Century Financial Corporation disclosed in March 2007 that it was the subject of an SEC investigation [8] into possible insider stock sales and accounting irregularities. It wasn’t until last week — Dec. 7 — that the SEC filed a formal complaint against former executives of the company. The government’s highest-profile prosecution involving the financial collapse – the case against two managers of the Bear Stearns hedge fund for alleged securities and wire fraud – failed to gain a conviction when a jury decided [9] that the men were simply bad businessmen rather than criminals.

    Were you involved in the CDO business in the latter stages of the boom? We want to talk to you. E-mail us at CDOS@propublica.org [10] or call us at (917) 512-0258.

    Write to Jesse Eisinger at Jesse.Eisinger@propublica.org [11].

    Write to Jake Bernstein at Jake.Bernstein@propublica.org [12].

    Want to know more? Follow ProPublica on Facebook [13] and Twitter [14], and get ProPublica headlines delivered by e-mail every day [15].

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    FINALLY somebody’s paying George Santayana heed. “Those who cannot learn from history are doomed to repeat it.” My bet’s on repeating it, given how our political system works like a pendulum. How many bubbles did we experience in the last 10 years? What happens to regulation and resolve when there is a political changeover?

    ALLAN
    B e M o v e d @ A O L . c o m

  12. I wonder if there would be legal action available to people whose credit lines have been decreased like the people mentioned in Neil’s article above.

    I would think there would be, for the following reason:

    A credit card agreement is like a promissory note. Hell, it IS a promissory note in everything but name. When a borrower signs a credit card agreement, it is deposited into an account of the bank that issued that credit card. That credit card agreement mentions a credit limit, which is the amount that is deposited; that is, if a credit card agreement mentions a $1,000 limit, then when the agreement is deposited, the bank credits itself with $1,000, as though the credit card agreement were a check for $1,000 written by the borrower to the bank.

    In the example above, then, the bank now has an extra $1,000 and it then packages the $1000 agreement/note together with other agreements/notes and securitizes them just like mortgages. This is where I think the legal challenge could take place: since the borrower gave the bank $1000 (as in the example) but then told the borrower his/her credit limit was being reduced–by half, let’s say– hasn’t the bank effectively stolen $500 from the borrower?

    In other words, the bank got $1000 from the borrower and has an agreement/note to that effect which it can sell for that amount (since the agreement/note is a negotiable instrument). But when the bank reduced the “credit limit” of the borrower by half, it damaged the borrower and his/her financial position while the bank itself was not hurt at all.

    That is to say, the “borrower” is actually the creditor in that the agreement/note was the only thing that allowed the bank to “create” the $1000 it got to use in full while choking off the borrower’s ability to use that full amount. We know that it is only the borrower’s agreement/note that allowed the bank to “create” the $1000 because, as the Federal Reserve tells us, “Banks actually create money when they lend it.” Therefore, if the borrower hadn’t come to the bank for a “loan” (via credit card in this case), the bank wouldn’t have been able to “create” the $1000 credit limit in the first place.

    Thoughts?

  13. OK folks here goes.

    Neil and the group have done one of the post patriotic things ever done in American history–they have stood and told the truth about what is undoubtedly the biggest scam ever perpetrated on the American people. My wife and I are ever so grateful to them.

    We had perfect credit for 25 years and then I became ill with major issues–four in five years. Of course, we had to find a way to pay for hospitals and operations and so we tapped into our credit cards and our home equity just at the wrong time. I tell you this so you know that we’re right in there with you. Neil is trying to help us all by exposing the real truth.

    Now someone has asked what we do as a group. I will tell that we must unite. United We Will Stand is going to be a site about Foreclosures and Housing; gold and silver and how to trade them when applicable, and food. Yes food because the next major crisis to hit America will be a lack of food.

    Please visit our website at http://www.seacoast-consulting.com and sign our opt in list. We need to unite and not along political lines but as Americans. And we need to carefully evaluate each member of Congress. We are not being represented. United We Will Stand!

  14. i AM CURIOUS HOW DO WE START “THE 2ND BANK OF AMERICA THAT DOES NOT BEND YOU OVER? I AM NOT GOING TO APOLOGIZE 4 MY SENTIMENT, HOWEVER LETS LOOK AT CREATING OUR “WE THE PEOPLE 2ND BANK OF THE AMERICANS?

  15. OK,
    It is time now to boycott the whole banking and wall street
    system, and I hope you grasp this. If you don’t it will be fatly the end of things as you know them.

    As described above is what the system has done to my small business and I have been shut down, shut off from the cash flow and know they want 2 know why I can not pay my bill’s. It is tragic enough 2 have one or 2 lines of credit to run a business, know the BANKSTERS WANT YOU TO PAY BUT THEY ARE HOGGING ALL THE O% CASH AND FUC…G US. OUR
    SOLUTION IS TO LET THE BANKS KEEP THE STINKY, SMELLY, ROTTEN, MONEY AND WE SHOULD START THE STOP OF CASH FLOW TO THE AS. HOLES WHO ARE F…ING EVERY ONE. THIS IS WAY BEYOND PERSONNEL. MORE TOMORROW.

  16. I have been in business here in St Pete Fl since 1975. At the same address with the same Phone #, so I know a little.
    This will be the 7Th recession since then, and I have to say it’s the worst.
    They “Banksters/The FED” play our economy like a violin. It has been documented and info is available on the web.
    After screwing up a situation they demand more control with promises, that it will never happen again.

    They LIE. But that’s OK. Whens the last time you heard of someone going to jail for lying, even big lies? Even perjury.
    Why didn’t the heads of the organizations who allowed the fraud and corruption under there watch, receive anything but promotions?.

    Yea, ask questions, of your bought off representatives, just don’t expect answers. They speak to the people only at election time, through sound bites and commercials.

    But truly, what to do?

  17. And to think I did not vote for this imbecile…

  18. that number 545 is an interesing number

    http://www.barefootsworld.net/545people.html

  19. The days when the American people will wake up one day, look around, scratch their heads and realize the magnitude of “our” problem are here, they are real, they are our everyday, they are so real that it really hurts. read this story, a real story in which one of my friends is the victim: we’ll call him Tom; So Tom owns a small construction business and has had his General Contractor’s license for the past 19 years, he always paid his bills on time, he always renewed his contractor’s license on time, and he always paid his “Bond” on time, this bond is a requirement for ALL contractors to have, without it one can not get or keep an active license, his premium for TWO years of coverage was $169.97. So Tom starts having problems making his home payments, falls behind and his credit goes to hell, he then gets a letter from his bonding company telling him that his bond premium has changed because his credit is shot, now remember construction is how Tom makes a living, so they tell him that now he HAS TO pay $1,224.00 for a ONE year coverage because his credit went wrong. Isn’t this a great country? how in the hell so they expect him to keep his business running with the bond expense going up 15 times over??? so now he can not keep on working because he can not afford his bond and guess what? now he can not even make payments on his home at all, so not only has he lost his business but now he is about to loose his home also, isn’t this country awesome, only in America.

    We the American people need to/have to wake up right away and start demanding immediate change in the way this “business” , I can’t call it a country anymore because it is not, this is the banker’s business, and you and I are their “little” workers that bust our asses working hard so that they can come over whenever they want and take our money, our homes, our pride, our whatever they feel like taking. Tumultuous times are heading our way very rapidly, i truly believe that the “thieves and rapists” sincerely think that we all are nothing but a bunch of idiots, willing to take it any way they want; we have been abused for so long in so many ways that i don’t blaming for thinking that way, we let them think that by seating on our ass and doing nothing about the abuse, we need to unite our sentiment for this FIASCO these incompetent “representatives” who only represent themselves and not us, the people that put them there to “protect” us, enough shit it’s flowed already through our country, enough victims have fallen in already, this needs to stop and it needs to stop NOW!!!!! America, the land of the free??? really? but i mean really? are we???
    let’s outsmart the “evil machine” let’s unplug it once and for all, let’s drain it’s oil and bring it to a screeching halt, let’s piss on it!!!!! let’s dismantle it and send the pieces to hell!!! because evil, belong in hell!!!! To victory America!!!!!!!

  20. Mr. Garfield, kudos on your excellent post. I bought a home in August of 08 and in July 09 was notified my payment would increase by $941 a month because Quicken Loans shorted my escrow account and it wouldn’t clear taxes. Chase (the new servicer) decided the account needed a higher “pad” thus the higher payment. Calls & letters to Chase were ignored along with the initial QWR (got an acknowledgement on the 2nd one to Chase, nothing from Quicken. Meantime my business (self-employed) has nosedived by 70%; no way to make a much higher payment. Meantime my health insurer (Kaiser) has already warned my plan deductible will increase from $2,700 to $4,500 in 2010 (bet the premium will go up another 30% too). Am I mad as hell? You bet. The only way we have a voice is to take action beyond the ballot box, because they’re not hearing us and don’t give a damn. If we all stopped paying the Banksters and Health gangsters, maybe we’ll get their attention.

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