Debating Yield Spread Premiums: RU Talking to ME?

From Gregg Christoff, who apparently doesn’t like what I have to say and thinks I don’t know what I’m talking about —-

Ok, no offense but this Garfield has no clue what he is talking about in this article. Let me tell you how YSP actually work. Typically banks send mortgage originators (lender) rates every day. The lender then chooses which rate he is going to offer the client. Frankly the higher the rate above the raw rate the higher the yield spread premium. (Which translates to higher commission paid to the lender.) Obviously, the lender cannot offer the raw rate to the client because no profit will be reckonized unless the lender can charge for numerous fees. Normally, charging additional fees is challenging due to the competitive nature of mortgage lending. Therefore, most lenders make thier income from YSP.

When it comes to charging YSP frankly it depends on how much time is spent preparing the loan. If it is a quick and easy loan a minimum YSP can be “charged”. Therefore the loan rate should be close to the raw rate for that loan product. On the other hand, some loans can take months even up to a year to close. So obviously the YSP has to be higher to offset the time and overhead needed to prepare that loan.

The bottom line is no one can stay in business without collecting some type of profitibility. Do you know of any business that can survive without any income?

Like any business, there are always ones that act responsible and with integrity and those that don’t. There are a number of cases where people abused the mortgage industry as it was originally intended. These people have created a black eye for the industry.

But to say that YSP is used to lie to clients claimed by Garfield is utterly ridiculous. If it wasn’t for YSP, how was a mortgage company to stay in business?? Answer that Garfield………..[OK see below]

ANSWER: NO OFFENSE TAKEN, BUT I ALWAYS KNOW WHEN SOMEONE SAYS “NO OFFENSE” WHAT THEY REALLY MEAN IS THAT THEY DON’T WANT TO HEAR AN ANSWER THAT MAKES THEM LOOK FOOLISH.

  • YIELD: The rate received by the lender on a loan adjusted for the effects of amortization, points and other factors. That is why the APR is different than the nominal rate quoted to the borrower. The actual yield is considered to be the percentage return that goes to the lender, taking into consideration the amount of money the lender advanced and measured against the amount of money the lender actually receives on an annual basis.
  • If there was ONE YIELD there would be no YIELD SPREAD. And if there was no YIELD SPREAD there would be no YIELD SPREAD PREMIUM.
  • A Yield SPREAD arises when there are two different possible yields for the same loan. One is better for the borrower and one is better for the lender.
  • If the spread favors the lender, then a PREMIUM is paid to the one responsible for creating it — i.e., the mortgage broker or mortgage originator.
  • YIELD SPREAD PREMIUMS for 2001-2008 ran 3-4 times higher than the figures you quote. In some cases, they were much higher than that because all the premiums and commissions were raised to keep mouths shut who knew that the appraisal would never stand the test of time — even one day worth of time.
  • While it is possible that an argument could have been made for the old yield spread premium of 1-1/2%, it still amounted to a commission that paid for asymmetric information — i.e., the lender/broker knew more than the borrower or the borrower would not have paid it.
  • In order to “earn” a yield spread premium, the broker or originator must convince the borrower to accept a loan which gives the lender a higher yield than the borrower could otherwise pay. If the borrower takes the bait (you come to the table with less money, you reduce the the monthly payments at first anyway, etc.) then the yield spread occurs and the premium is paid.
  • In order to convince the the borrower to take the loan terms that give the lender a higher yield, the broker must downplay the negative aspects of making the switch and play up the apparent advantages of the terms that give more to the lender.
  • To seal the deal, the broker pretends to be acting in the best interests of the borrower when in fact he is acting in the best interests of himself and the “lender.”
  • Pretending means the broker is lying to the customer about who to trust.  And the substance of the lie is that the loan that gives the higher yield to the lender is better for the borrower. This lie can only be accomplished in complex transactions like real estate purchases with one or more loans. Otherwise the borrower would see right through it.
  • Thus I stand by my rendition of yield spread premiums and assert that you are counting the pits in the orange while someone is driving off with the grove — with your help.

36 Responses

  1. @ Gregg,
    I have only one question for you that should answer all of our questions…..did you ever sell any Option Arm loans???

  2. Just to clarify, my comments are from the perspective of a mortgage originator. Scary to read some of those other comments. Frankly, there are some good points made by others, I give them credit. Others are just blowing in the wind, thinking every orginator out there is trying to stick it to them.

    Think what you want, I really could care less. I know that I performed with high integrity and moral conduct.

    No need to say any more.

  3. Finally read your comments from August 18, 2010. Not here to get in a pissing contest, but I said “No offense” out of respect to you. Obviously, you got rather defensive about my earlier comments and added that I looked foolish. I would make an additional comment, but I chose to take the high road.
    First, I can’t speak on how the banks profit from YSP. I can only speak from the perspective of a mortgage orginator. (No I am not a broker.) And guess what?? As a mortgage orginator, I don’t even have to disclose a YSP. Second, I live in a small town, so customers that I work with I see in the bank, grocery store, community events, etc. I am not someone who does your loan and will never be seen again.

    Our profitability is paid to us through YSP. Without them we make no profit. WE do not charge any points unless the CUSTOMER asks to “buy down” the rate.
    Second, we do not charge any other fees except what is required-i.e. appraisal fees (We charge the customer what the appraiser charges us, insurance, taxes, closing costs, (Again that is decided by the closing company, which by the way is decided by the seller), doc. stamps on the deed, survey fee, and intangible tax.

    Garfield, there are individuals that do go in this business and try to be reputable. Not everyone is out to “screw” people. Again, I take offense that collecting YSP makes every mortgage broker or orginator a liar.

  4. Let’s go back to the core issue, that being Yield Spread Premiums. As Neil points out, a YSP provides a source of profit to the broker (and lender, who is probably just a middleman financed by a warehouse loan), which is HIDDEN from the borrower. When “points” are charged, at least it is clear what is being paid for the services rendered, YSP by its nature is a form of hidden tax, and thus is reprehensible.

    The reason that YSP is preferred by the lender crowd is that, properly manipulated (i.e. with two Notes on the house, one at say 6.5% and one at 9.5%) , the YSP is vastly greater than the “points” or typical brokerage commission. This is because the extra interest can be converted into “net present value” and then that amount divvied bu by the players. If you can get a YSP which generates say 50% of the capital value of the loan, why fool around with a $5,000 broker fee? The YSP can generate $400,000.

    Don’t overlook the obvious, folks; YSP’s are the honey attracting the flies, because there is such an astonishing amount of the borrower’s capital to rip off.

  5. The A Man: “…AND HAVING HIS CHILDREN AND WIFE DISOWN HIM BECAUSE HE CANT MAKE A LIVING.”
    Well if this trick works against people like Christoff, guess what…

    We have to thank you for explaining the trick as to WHY THERE IS A GLOBAL DEPRESSION:

    Folks with YOUR thought process (and most likely, no wife and children) obviously ensured targeted sabotage. Victims first lose their pension, then become under-employed, then unemployed and then finally unemployable (credit score assassins) for the purpose of CREATING the lucrative wave of bankruptcies and foreclosures.

    The group or clique which has assumed such perverse powers of sabotage is really responsible – and you seem to know about it. Thanks for educating us about how it works.
    FCTS (Financial Cleansing Through Sabotage)

  6. I live in Leesburg, and have been fighting the crooks for over two years. It has been tough, but we have been successful so far.

    Lawyers in our METRO area have been very weak, inconsistent and crooked in some cases.

    I just wonder if the BAR exams are really that tough?

    It seems my ten year old daughter can do better and has more common sense.

    These people have proven to be useless for he most part. But I still try to push them further into the light. Not easy but, I am very stubborn.

    pelucheven@hotmail.com

  7. Had my first day in court. Now, I’m thinking more like BSE! I think I may even court owning a hand gun (aka small assault rifle.) Just joshing.

    But, seriously, have been drinking hard tonight. Am about as discouraged as one could be. I thought I was all cocky because I had researched my attorneys. Barnes was absent and local counsel was about as clueless as they come. Jesus Christ. I knew more in my little finger than she knew about foreclosure.

    So, I’m back thinking that the world is out to get me. I feel like a cog in the wheel of a mechanism that is bound to chew me up.

    Help! Drowning in wine here…..
    Karen

  8. Jose Fighter
    Where in Virginia do you live. I am also in Virginia Broadlands

  9. A List of Goldman Sachs People in the Obama Government: Names Attached to the Giant Squid’s Tentacles
    By: fflambeau Tuesday April 27, 2010 1:03 am

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    At a time when Congressional hearings are set to call testimony from some Goldman Sachs employees, it is vital to understand how widespread that institution’s ties are to the Obama administration. This diary shows the pervasive influence of Goldman Sachs and Goldman created institutions (like the Hamilton Project embedded in the Brookings Institution), employees and influence peddlers in the Obama administration.

    While many of the people listed below formerly worked for Goldman Sachs or its offshoots (like the Hamilton Project, including all three of that project’s first Directors) influence can be exerted not only through people but through money, awards, sponsored scholarship, and creation of an agenda favorable to Goldman Sachs (which is where Brookings and the Hamilton Project come in and have proved especially useful to Goldman Sachs).

    It is further of note that although Goldman Sachs has been the center of attention especially since Matt Taibbi’s insightful investigative journalism, that I have not been able to find a comprehensive list of the influence of Goldman Sachs in this administration. Recently in the New York Post, for instance, Michelle Malkin wrote a good article called “All the President’s Goldman Men” but she only listed the usual suspects like Larry Summers, Timothy Geithner, Rahm Emanuel, Gary Gensler and Mark Patterson.

    But that’s just the tip of the Goldman Sachs iceberg. Here you will find, I believe, the most comprehensive list of people-groups yet available to show how Obama’s administration has really become the Goldman Sachs administration. But I need your help. I suspect there are far more people out there with such ties that I have missed even though I have spent lots of time researching this issue. If you know of other people who should be on this list, please help out and give the details in a comment to this diary.

    One further caveat. The Obama administration is not the first administration that Goldman has infiltrated, although it is perhaps the one that has been most completely co-opted from top to bottom. Recall that former Secretary of the Treasury Paulson in the George W. Bush era came from–Goldman Sachs where he was its chief. Recall too that the brilliant, late economist John K. Galbreath has written an entire chapter of a book devoted to the Great Depression and the economic collapse of Wall St. that accompanied it to the role of Goldman Sachs.

    Law professor William Black, who participated in actions against individuals in the Savings and Loan collapses decades ago, recently told Bill Moyers recently that:

    “The highest return on assets is always a political contribution.”

    In this spirit we name the first two links between Goldman entities and the Obama administration: they are out of alphabetical order for obvious reasons. All the others are in alphabetical order.

    Let’s look at the Goldman Sachs government that we have in place now, that is masked by Barack Obama. Fittingly, we begin with Obama:

    OBAMA, BARACK.

    Although to my knowledge he has never directly worked for Goldman, he has taken boatloads of their money (an investment repaid many times) and he calls Robert Rubin, the former head of Goldman Sachs “my friend Bob”. (See the video clip of then Senator Barack Obama’s address to the Goldman-Rubin funded Hamilton Project in a link below where he uses these words and calls for cuts in entitlements and more NAFTA-type agreements).

    Jesse Unruh, the late California politician and political thinker, once called “money the mother’s milk of politics.” Certainly, Obama sucked at the teats of Goldman Sachs more than any other politician in recent times. It began for him as little-known Senator from Illinois with a razor- thin resume whose ambitions outshine his accomplishments. Obama’s eloquent, heavily prepped address to the Democratic National Convention caught not only the eyes of the Democratic top brass, but that of the big bankers. As early as the Spring of 2006, Senator Barack Obama was intimately involved with Bob Rubin and Goldman Sachs through his involvement with the Hamilton Project.

    Fittingly, Senator Obama was chosen by Rubin and the Hamilton Project to give the inaugural address of the Hamilton Project in April, 2006. An excellent, seminal discussion of the Hamilton Project by Dr. Kirk James Murphy, M.D., can be found here. A video clip of then Senator Barack Obama speaking at the inauguration of the Hamilton Project in April, 2006 can be found here and here (with an excellent discussion) and here. Here Obama heaps lavish praise on Robert Rubin (“my friend Bob”) and on the Hamilton Project while setting out its (and his subsequent administration’s agenda) of cuts in entitlements, the need for more NAFTA-type free trade pacts and a pro-big corporation government. In 2006 then, Obama was a Goldie and articulating its desires and policies.

    Little wonder then, that Goldman and Rubin heavily funded Obama as a Senator (his biggest campaign contributor) and as a presidential candidate. Goldman Sachs employees (and they were not the floor cleaners) contributed $994,795 to Obama’s presidential bid, almost four times the amount they gave to his Republican opponent, according to OpenSecrets. Over Obama’s entire career, Goldman has been his second biggest contributor, according to OpenSecrets, giving him more than $1,051,000. Goldman not only wanted Obama to win, they paid lots of money to insure that their man would occupy the White House. Again, as William Black noted:

    “The highest return on assets is always a political contribution.”

    Goldman’s 30 pieces of silver investment in Obama reaped them billions of dollars in returns as the TARP bailouts and the subsequent news about Goldman Sachs has shown. So although Obama may never have “worked for” Goldman in the traditional sense, he’s one of Robert Rubin’s boys and on Goldman’s books.

    University of Minnesota political scientist Prof. Lawrence Jacobs, described the giant squid’s attachment to the Obama administration:

    almost everything that the White House has done has been haunted by the personnel and the money of Goldman . . . as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.

    BIDEN, JOE.

    Is it any wonder that between his service as “Senator Credit Card”, his efforts to limit busing for desegregation, and his five draft deferments at the height of the Vietnam War that Joe Biden is attached to one of Goldman’s tentacles? Goldman has been a major campaign contributor to Biden and according to OpenSecrets, Biden in 2007 alone took almost $25,000 from the Robert Rubin related Citigroup (Rubin was its head as well as being a former head of Goldman).

    And guess who was the keynote speaker at the Hamilton Project 2010 kickoff event a few days ago (April 20th, 2010) Tuesday morning at the Renaissance Mayflower Hotel? That’s right: Vice President Joe Biden spoke at Goldman Sachs/Robert Rubin’s Rosemary’s Baby. You can see some pics of Biden at the Hamilton Project event along with who else–Robert Rubin–here.

    As described by the Huffington Post:

    Biden was speaking at the relaunch of the Hamilton Project, a think tank founded by ultimate Wall Street Democrat Robert Rubin to publicly despair about the deficit and other things bankers worry about the most.

    Note too that in his address Biden paid tribute to Obama’s bipartisan deficit commission, something that the Hamilton Project and Robert Rubin (and Goldman) have been pushing for years because it really means cuts in entitlements (again, have a look at Sen. Obama’s 2006 speech at the Hamilton Project where he calls for entitlement cuts).

    ALTMAN, ROGER.

    Interestingly, the man who introduced Joe Biden at the Hamilton Project’s relaunch (described above) was none other than Roger Altman, who is connected to the Hamilton Project.

    Altman may not hold down a desk job in the Obama administration–he’s too big a fish for that just as is Robert Rubin–but he is one of those power brokers with all encompassing contacts within the Democratic Party. Altman is a Hamilton Project member, according to Dan Frumkin’s excellent article in the Huffington Post, as well as having served as Assistant Secretary of the Treasury under none other than Mr. Goldman Sachs, Robert Rubin. He is now now Chairman of Evercore Partners, which the Hamilton Project program described as “the most active investment banking boutique in the world.” (and the Obama administration is trying to sell itself as one that is getting tough on big banks and Goldman?).

    Like so many of the Goldman people, Altman has a touch of scandal/criminality about him. According to Wikipedia, Altman was forced from his position as Assistant Treasury Secretary because of a records keeping scandal.

    Altman is a co-author, along with Robert Rubin, of the Hamilton Project’s “From Recession to Recovery to Renewal: An Economic Strategy to Achieve Broadly Shared Growth.” Some of Altman’s ties to the Goldman-Rubin funded Hamilton Project can be seen here.

    BRAINARD, LAEL.

    Brainard is the United States Under Secretary of the Treasury for International Affairs in the administration of President Barack Obama. She is an associate and protege of Mr. Goldman Sachs, Robert Rubin. She has written numerous articles and bookson the joys of outsourcing work overseas.

    Brainard also worked at Brookings which has embedded within in Goldman Sachs and Robert Rubin’s Hamilton Project. Goldman was clever in doing this because they hid a conservative thinking, pro business group like a Trojan Horse in what is generally perceived as a liberal think tank.

    Like Timothy Geithner, who is her boss, Brainard is a brainy person who had trouble with income tax rules and regulations, thus joining quite a lengthy list of Goldies who ape the law. The Washington Post reported that:

    Brainard’s nomination was held up by Republican concerns over allegations that she failed to pay property taxes on time. (What is it with Treasury and tax problems?)

    BUFFETT, WARREN.

    Speaking of big fish, Warren doesn’t need to work for the US government or for Goldman. But he’s invested billions in Goldman expecting even greater returns. Obama has also admitted in the debates to “pal’in around” with the Sage of Omaha and Buffett is one of Obama’s fundraisers and economic advisers.

    For more on Buffett see this written by Michael Winship at Truthout:

    On Friday, Susan Pulliam reported on the front page of The Wall Street Journal that, “A Goldman Sachs Group Inc. director tipped off a hedge-fund billionaire about a $5 billion investment in Goldman by Warren Buffett’s Berkshire Hathaway Inc. before a public announcement of the deal at the height of the 2008 financial crisis, a person close to the situation says.”

    As the Journal notes, the Buffet deal came at a key point in the Wall Street collapse, restoring confidence in the markets and lifting Goldman’s stock from a 40 percent slide to a 45 percent surge. The hedge-fund billionaire in question is Raj Rajaratnam, whose Galleon Group currently is embroiled in one of the biggest insider trading scandals in history: 21, including Rajaratnam, have been charged; 11 already have pled guilty.

    (emphasis added)

    CLINTON, HILLARY.

    Although Barack Obama was the overwhelming favorite of Goldman Sachs to be president in 2008, for he could serve as their Trojan Horse, they were smart enough to hedge their bets, so to speak and back Hillary too. According to the Washington Examiner, Goldman Sachs in 2008 alone gave:

    ($415,595.63 inflation adjusted), which was itself almost three times as much as Bush received as well.

    And of course, it was Hillary’s hubby Bill Clinton who chose ex-Goldman chief Robert Rubin to serve in his White House. Bill, Hillary and Bob Rubin are Washington, D.C. kissing cousins.

    CRAIG, GREGORY.

    Another example of the revolving door between Goldman Sachs and Obama’s administration. Craig served as Obama’s White House Counsel and after resigning, has taken on a position as Goldman Sach’s chief lawyer in defending against its SEC suit. A former Goldie, Robert Hormats, sits at the top of SEC’s enforcement group too. What a hoot!

    Note that Craig is a lawyer and lawyer’s rules of professional responsibility prohibit not only direct conflicts of interest but anything that hints at a conflict of interest.

    Here is doubtlessly why Goldman wanted Craig as its top lawyer in the SEC complaint:

    Greg Craig, Obama’s first White House counsel, has joined Goldman, we learned this week. He may not have too much pull in the West Wing, which drove him out for hewing too close to Obama’s campaign promises, but as a former insider he will provide valuable intelligence to the world’s largest investment bank.

    Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Is-Goldman-Obamas-Enron-No-its-worse-91613449.html#ixzz0mHKfS3hl

    DONILON, THOMAS.

    Thomas Donilon is Deputy National Security Adviser to Barack Obama (despite having a career that is mostly involved with domestic politics). Donilon was a lawyer at O’Melveny and Myers and made almost $4 million representing meltdown clients including Penny Pritzker (of Chicago) and Goldman. This from Michelle Malkin’s article RealClearPolitics. More information is available on Donilon over at Whorunsgov.com.

    DUDLEY, BILL.

    Joined Goldman in 1986; partner and managing director until 2007. Federal Reserve Bank of New York President since January 2009 (replacing none other than Timothy Geithner, his Goldman compadre). This all from the Wall Street Journal.

    ELMENDORF, DOUGLAS.

    Elmendorf became Obama’s Director of the Congressional Budget Office in January 2009. Elmendorf previously was the Director of the Hamilton Project; it’s third.

    Note too that the first 3 Directors of the Hamilton Project ALL serve in the Obama administration. While other journalists/writers have explored the links between Goldman Sachs and Obama, few have looked at the connection between the Hamilton Project and the Obama administration. Note again that the Hamilton Project was funded by Robert Rubin and Goldman Sachs. Note too that the current director of the Hamilton Project, its 4th since its founding in 2006, is Michael Greenstone. How long will it be before Greenstone goes to the Obama administration, making it a perfect 4 for 4 for Directors of the Goldman funded Hamilton Project? To show that there is a revolving door between the Obama Administration and Goldman/Rubin/Hamilton Project, Greenstone served as of Obama’s chief economic advisers.

    EMANUEL, RAHM.

    Rahm, of course, is Obama’s Chief of Staff, the very first person Obama selected to be in his administration. Rahm has lengthy and fruitful ties to Goldman, and vice versa. Rahm took in about $75,000 from Goldman Sachs as a Congressman and was on a $3,000 a month retainer from Goldman while he worked as Bill Clinton’s chief fund raiser.

    Timothy Carney has explored some of the links between Emanuel and Goldman Sachs:

    …one of Barack Obama’s top sources of funds in this past election, Goldman has always had some particularly strong allies within government. Emanuel is one such ally.

    An interesting early chapter in the Goldman-Emanuel relationship took place in the setting of Bill Clinton’s campaign for the White House in 1992. Clinton hired Emanuel as his chief fundraiser.

    At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time. This is certainly a noteworthy relationship, but it’s one that has almost entirely escaped scrutiny.

    Corporations and partnerships are and were at the time prohibited by law from contributing to federal candidates out of the corporate coffers. So, while Rahm tapped Goldman employees personally for six figures in gifts to Clinton’s candidacy—more than any other firm—Goldman, as a company, was helping keep Clinton’s top fundraiser well-fed.

    In his four terms in Congress, Emanuel has raised $74,750 from Goldman, making the firm his number four source of funds. Goldman has helped Emanuel. How has Emanuel helped Goldman?

    The most obvious answer, as mentioned in this column two weeks ago, is in Emanuel’s lead role in shepherding the “$700 billion” bailout—first proposed by former a Goldman CEO, Bush Treasury Secretary Henry Paulson—through the skeptical House.

    Of course, back in the Clinton days, Goldman benefited from NAFTA and the bailout of the Mexican currency, with Emanuel pushing NAFTA through Congress, and Rubin hammering out the peso bailout.

    McClatchey newspaper’s Greg Gordon, in his article entitled, “Goldman’s White House Connections Raise Eyebrows” also noted how Rahm and Goldman worked together to make money:

    One White House insider who knows something about how Wall Street does business is chief of staff Emanuel, who earned millions of dollars in investment banking after he left the Clinton White House. His work for the Chicago-based financial services firm Wasserstein Perella & Co. intersected with Goldman in at least one deal.

    In 1999, Emanuel was a key player representing Unicom Corp., the parent of Commonwealth Edison, in forging its merger with Peco Energy Co. to create utility giant Exelon Corp. Goldman was also advising Unicom.

    The White House declined immediate comment on that connection.

    So how real is the Obama/Democratic party’s supposed new toughness on big banks when the administration’s point guard was on the Goldman payroll and become a multi-millionaire through big banks and Wall St. deals?

    FARRELL, DIANA.

    Diana Farrell is Deputy Director of the National Economic Council (since January, 2009) in the administration of President Barack Obama. She formerly worked for two years at Goldman Sachs in New York according to Whorunsgov.com.

    In 2003, Farrell was the author of a paper, “Perspective on Outsourcing” in which she argued that sending American jobs overseas might be “as beneficial to the U.S. as to the destination country, probably more so.” In a book titled “The Economists’ Voice: Top Economists Take on Today’s Problems,” Farrell wrote a chapter titled “U.S. Offshoring: Small Steps to make it Win-Win.” Her chapter, published in 2008, centered on offshoring.

    In the Obama administration, Farrell works with a coven of Goldies including Timothy Geithner and Larry Summers, who is her boss.

    FRIEDMAN, STEPHEN.

    Chairman of Obama’s Foreign Intelligence Advisory Board.

    According to Wikipedia, Friedman worked for much of his career with Goldman Sachs, holding numerous executive roles. He served as the company’s co-chief operating officer from 1987 to 1990, was the company’s co-chairman from 1990 to 1992, and the sole chairman from 1992 to 1994; he still serves on the company board.

    Friedman was another Goldie involved in controversy, as many of the Goldies have been in government service, involving his former employer. His actions, like other affiliated with Goldman, show scant respect for rules, regulations or laws.

    Wikipedia notes:

    Wikipedia notes:

    On May 7, 2009 Friedman resigned as Chairman of the Federal Reserve Bank of New York in response to criticism of his December 2008 purchase of $3 million of stock in Goldman Sachs. Friedman, who remains a member of Goldman Sachs’ board, came into violation of Federal Reserve policy when Goldman was converted to a bank holding company in September 2008, thereby placing it under the regulatory authority of the New York Fed. Friedman requested a waiver from this violation when the conversion occurred, which was granted roughly two and a half months later.

    FROHMAN, MICHAEL.

    Robert Rubin’s Chief of Staff while Rubin served as Secretary of the Treasury and an Obama “head hunter” according to “Rubin Proteges Change Their Tune as They Join Obama’s Team” in the New York Times.

    FURMAN, JASON.

    Furman served as the second Director of the Hamilton Project after Peter Orszag’s departure for the Obama administration and he in turn left the Hamilton Project in June 2008 to direct economic policy for the Obama Presidential Campaign.

    FUDGE, ANNE.

    Obama just appointed Fudge to his budget deficit reduction committee. Fudge has been the pr craftsman for some of America’s largest corporations. She sits, according to the Washington Post, as a Trustee of the Brookings Institution within which the Hamilton Project is embedded.

    GALLOGLY, MARK.

    Gallogly sits on the Hamilton Project’s advisory council. He is also, according to Wikipedia, currently a member of President Barack Obama’s President’s Economic Recovery Advisory Board.

    GEITHNER, TIMOTHY.

    He’s one of the most documented of all people within the Obama administration while serving as Obama’s Secretary of the Treasury. He was named head of the New York Fed by none other George W. Bush, again perhaps underscoring Gore Vidal’s observation that American is run by one corporate party and it has two wings: Republican and Democratic.

    While at the head of the New York Fed, Geithner prior to the crisis not only failed to see storm clouds on the horizon, he also in 2008 ordered the bailed out AIG not to disclose its sweetheart payments to big banks including, you guessed it, Goldman Sachs. Geithner also worked with W’s Treasury Secretary Paulson to fashion the TARP agreements whereby billions were handed out to Wall St.

    Geithner is a protoge of both Robert Rubin and Larry Summers.

    Like other Goldies, Geithner has had trouble with rules, tax regulations and various. Recall that he had trouble at his confirmation hearings over his tax returns. Whorunsgov sums them up:

    At the end of the Clinton administration, Geithner moved to the International Monetary Fund, where he was director of policy development. That period led to a blot on his personal record. The IMF, unlike most employers, does not pay the employer match on Social Security and Medicare taxes. Geithner was responsible for paying those taxes himself. He did not to do so until he was audited in 2005, and even then only paid the back taxes for 2003 and 2004. He did not pay the back taxes for 2001 and 2002 until after Obama tapped him to be Treasury secretary at the end of 2008.

    Many of Geithner’s actions profited Goldman Sachs directly or indirectly, such as Geithner’s decision to deny Goldman’s competitor the same treatment he gave Goldman. As Time magazine noted:

    [Geithner]Would not grant Lehman Brothers the right to become a bank-holding company — a status given to both Morgan Stanley and Goldman Sachs just days after Lehman filed for bankruptcy

    Lehman Brothers collapsed, leaving Goldman Sachs with fewer competitors and a greater market share.

    GENSLER, GARY.

    Gensler was a Goldman Sachs partner who is Obama’s Commodity Futures Trading Commission head. Gensler is the guy who as a former Treasury official exempted the $58 trillion credit default market from oversight. Those financial instrumentals played a key role in the global economic downturn and led to billions of dollars in profits for banks like Goldman Sachs.

    GREENSTONE, MICHAEL.

    Greenstone is the 4th Director of the Hamilton Project. Just as attorney Craig went from advising Obama to defending Goldman Sachs against the SEC complaint, Greenstone has used the revolving door to go from went an economic adviser position to Obama to one of the Goldman Sachs outlets, in this case its think tank embedded in the Brookings Institution and funded by Goldman and Robert Rubin. All 3 previous Directors of the Hamilton Project work in the Obama administration.

    HAMILTON PROJECT, THE.

    The pro-corporatist think group funded by Goldman Sachs and Robert Rubin and cleverly hidden in the Brookings Institution as their Rosemary’s Baby/Trojan Horse. Espouses cutbacks in entitlements, strict budgetary thinking applied to all social programs (but not the defense department); outsourcing of American jobs overseas; more NAFTA-type agreements. Three of the first 4 Directors of the Hamilton Project serve in the Obama Administration. The fourth went from an economic adviser to Obama to the Hamilton Project.

    It might also help to recall that the name “Hamilton Project” is significant. Recall that Alexander Hamilton, after whom the institute was named, had as his most famous dictum that “the people are a great beast.” Hamilton espoused a powerful state bank and centralized government and presidency.

    Note too that Sen. Barack Obama was the inaugural speaker at the Hamilton Project and lavished praise on “my friend Bob [Rubin]” and called for cuts in entitlements (Social Security) and more NAFTA agreements. This is the same guy who lied to the electorate, then, in union states like Ohio and Pennsylvania during the Democratic primaries when he said “NAFTA needs rethinking.” He is firmly and totally behind NAFTA and has done no “rethinking” of it while President and with his party in firm control of Congress.

    For more information, see the reading listed below on this subject and the Project’s web site.

    HORMATS, ROBERT.

    The top economics official at Obama’s State Department, Hormats spent the prior 27 years at Goldman Sachs, including as the Vice Chairman of Goldman’s international arm.

    Hormat’s appointment to the Obama administration led Glenn Greenwald to this observation:

    A Goldman executive as COO of the SEC’s enforcement division. This is all consistent with the observation of Desmond Lachman — previously chief emerging market strategist at Salomon Smith Barney and IMF deputy director — regarding “Goldman Sachs’s seeming lock on high-level U.S. Treasury jobs,” which he cited as but one of the many “parallels between U.S. policymaking and what we see in emerging markets.”

    Imagine how this will play out. The SEC has lodged a complaint against Goldman Sachs. Goldman’s former Vice President in charge of Business Intelligence sits in the SEC’s enforcement division while Obama’s former top lawyer, White House Counsel Gregory Craig, has gone to defend Goldman Sachs!

    KASHKARI, NEEL.

    Former Vice President of Goldman Sachs in San Francisco where he where he led Goldman’s Information Technology Security Investment Banking practice. Kashkari served under Treasury Secretary Paulson and was kept on by Obama after his inauguration for a limited period to work on TARP oversight.

    KORNBLUH, KAREN.

    Sometimes called “Obama’s brain”, she serves as Obama’s Ambassador to the OECD. Kornbluh was Deputy Chief of Staff to Mr. Goldman Sachs, Robert Rubin.

    LEW, JACOB (AKA “JACK”) J.

    Lew is the United States Deputy Secretary of State for Management and Resources. According to Wikipedia, Lew sits on the Brookings-Rubin funded Hamilton Project Advisory Board. He also served with Robert Rubin in Bill Clinton’s cabinet as Director of OMB.

    Like many affiliates of the Hamilton Project, along with Barack Obama, Lew believes that fiscal discipline needs to be applied to Social Security (not much talk about runaway costs in the military budget). According to the New York Times, Lew has testified that:

    “Fiscal discipline is essential to protect Social Security and strengthen Medicare, so that both will be there in the years ahead. Reducing the accumulated federal debt will help us to protect these important programs.” (Congressional testimony in March 2000.)

    Also like Robert Rubin, Lew has worked with Citicorp. The New York Times reported (same link as above) that:

    As executive vice president of New York University, he tangled with a union representing graduate students who help teach courses.

    LIPTON, DAVID A.

    According to Paul Krugman, Lipton is at now at Obama’s National Economic Council and the National Security Council. Lipton worked with Larry Summers and Timothy Geithner, again according to Krugman, on the US response to the Asian financial crisis of the 1990’s. MergeFoundations reports that Lipton worked closely with Robert Rubin:

    [he] advised and assisted Secretary Rubin on many key aspects of international economic policy.

    MINDICH, ERIC.

    Eric Mindich, while not officially serving in the Obama administration, is a strong Obama supporter with extensive ties to the President, according to a Ben Smith/Politico article. Mindich is a hedge fund manager and sits on the Advisory Council of the Hamilton Project and has worked at Goldman Sachs. In fact, he was the youngest ever partner with Goldman Sachs at the age of 27.

    According to Wikipedia:

    Prior to forming Eton Park in 2004, Mindich spent 15 years at Goldman Sachs in two main roles: leading the firm’s equities risk arbitrage business and managing the firm’s equities division. He joined the firm in 1988 in the equities arbitrage department and ran that department from 1992 until 2000.[1] In 1994, at age 27, he became the youngest partner ever in the history of Goldman Sachs.[1] In 2000, he became co-chief operating officer of the equities division and in 2002 became co-head of the equities division and a member of the Goldman Sachs Management Committee. In 2003, Mindich joined the Executive Office as senior strategy officer and chair of the Firmwide Strategy Committee.

    Another website, Operational Due Diligence at Checkfundmanager, indicates the following about Mindich:

    In March of 2009, Eton Park’s [hedge fund founded by him] assets under management were estimated to be around $13 billion.

    An article from April of 2009 lists Mr. Mindich among the “inner circle” of economic advisors to Lawrence H. Summers, who is the current chief economic adviser to President Barack Obama. Mr. Mindich is also listed in another article as being a top level Democrat fundraiser.

    …Eric Mindich, founder of Eton Park fund, reportedly supports Barack Obama’s presidential candidacy (2007).

    …A February 2005 article rattles off a number of impressive credentials for Eric Mindich, including launching the largest hedge fund in history, graduating summa cum laude from Harvard, becoming the youngest ever partner at Goldman Sachs, and being endorsed by former Secretary of the Treasury Robert Rubin.

    ORSZAG, PETER.

    Obama’s Budget Director was the founding director of the Hamilton Project, funded by Goldman Sachs and Robert Rubin. Furthermore, Wikipedia indicates that Robert Rubin, Goldman’s ex-head, was one of Orszag’s mentors.

    A BBC article notes Orsag’s commitment to Hamilton Project ideals like cutting the budget (mostly by cutting entitlements) and his ties to Goldman Sachs:

    Mr Obama has signalled his determination to keep the budget deficit in check by appointing Peter Orszag, the head of the Congressional Budget Office (CBO), to head the Office of Management and Budget (OMB).

    It is the OMB, rather than the Treasury, that allocates government spending and estimates the size of future budget deficits.

    His appointment could help ease the new president’s relations with Congress.

    Peter Orszag is well-known as a fiscal conservative, who is concerned to keep spending and tax cuts in check.

    He was one of the first directors of the Hamilton Project, a Brookings think tank initiative backed by Robert Rubin…

    The BBC failed to point out that Goldman Sachs also contributed to funding the Hamilton Project, and he was not “one of the first directors of the Hamilton Project” he was its first Director.

    PATTERSON, MARK.

    former lobbyist for Goldman Sachs who serves under Timothy Geithner as his top deputy and overseer of TARP bailout funds, $10 billion of which went to Goldman.

    RATTNER, STEVE.
    Ratner is the shady billionaire financier who Obama appointed as his “car czar” and who resigned after it was revealed that his company, the Quadrangle Group, was apparently involved in “pay to play” for a billion dollars or so of New York State pension funds, and was under possible indictment by the New York AG and the SEC, also sits on the Advisory Council of the Goldman funded Hamilton Project.

    Rattner is yet another Goldie-Hamilton Project person in trouble with the law. He was the main financial supporter of Harold Ford’s aborted New York Senate run and speculation was that Rattner wanted a Senator to help protect him.

    REISCHAUER, ROBERT D.

    He was a member of the Medicare Payment Advisory Commission from 2000-2009 and was its vice chair from 2001-2008. He too sits on the Hamilton Project’s advisory board.

    From this excellent discussion at “Meet Robert Rubin” here’s more information on Reischauer and his extensive links to Robert Rubin:

    Robert Reischauer, another policy insider who penned a memo in 2009 with fellow Brookings Institution elites calling for Obama to take “action to stem the growth of Social Security and Medicare,” were recently nominated by Obama to be Social Security Trustees. (The Blahous pick he apparently owed to Senator Mitch McConnell.)

    Reischauer has close ties to economic wrecking ball Robert Rubin—the Goldman Sachs chairman who became Clinton Treasury Secretary and pushed through radical deregulatory banking laws, then went to Citigroup to score $120 million for driving his company into the ground. Rubin and Reischauer knew each other at both the Harvard Corporation and the Clinton White House, where Reischauer was director of CBO. Reischauer is on the advisory board of Rubin’s Hamilton Project, and the two most recent CBO directors have come straight from Hamilton.

    NOTE: since writing this, it appears the above (and the quote below on Alice Rivkin) comes word for word from an Alternet article by Matthew Skomarovsky found here.

    RIVLIN, ALICE.

    Obama just named in March Alice Rivlin to his so called deficit reduction commission. Have a look at her background and you’ll see why and that Obama has stacked that commission with people who want cuts in entitlements.

    Again, an excellent summary of her Goldman-Brookings (read Hamilton Project) Obama connections:

    One of Reischauer’s co-signers of the Brookings memo, Alice Rivlin, is another fox Obama has put in charge of the Social Security henhouse. Former Vice Chair of the Federal Reserve under Greenspan at the peak of the tech bubble, and also a Hamilton Project board member, Rivlin will likely make another great Wall Street ally on the commission. In 2004 Rivlin co-authored (with Obama’s current Office of Management and Budget Director Peter Orszag, among others) a 138-page Brookings report titled “Restoring Fiscal Sanity” advocating $47 billion in entitlement cuts, including an “increase in the retirement age under Social Security” and “more accurate inflation adjustments to Social Security benefits.”

    Wikipedia also says of her:

    She is currently on the board of directors of the New York Stock Exchange.

    Wikipedia also notes that she has extensive Brookings Institution connections (within which the Hamilton Project is now embedded) including from 1957–66, 1969–75, 1983–93, and 1999 to the present.

    Rivlin is a frequent speaker at the Hamilton Project as shown by this page at the Hamilton Project’s web site; you can see videos of her talks and the subjects of her papers here.

    RUBIN, JAMES.

    Son of Robert Rubin (see next entry). Served as a headhunter for Obama per the New York Times article, “Rubin Proteges Change Their Tune as They Join Obama’s Team”.

    RUBIN, ROBERT.

    Mr. Goldman Sachs and co-funder, along with Goldman, of the Hamilton Project. Served as the 70th U.S. Sect. of the Treasury under Bill Clinton and spent 26 years at Goldman Sachs becoming its Co-Chairman from 1990-1992. He also served as Chairman of Citigroup. Along with Goldman Sachs, Rubin funded the Hamilton Project embedded in the Brookings Institution. In other words, he embedded within what is perceived as a liberal think tank a Trojan Horse that espouses cutbacks in entitlements (but not Defense budgets), more NAFTA like agreements, outsourcing of jobs overseas and strict budget consciousness applied to health care. Rubin used the same tactic with Barack Obama: choosing an essentially ambitious yet cautious conservative and turning him into a Trojan Horse for his causes and those of Goldman’s/the Hamilton Project’s. Rubin is the de facto President of the United States and he and the Hamilton Project tell Obama and his administration what to do. Obama gets to ride on Air Force One.

    According to a recent Politico article:

    Behind the scenes, Rubin still wields enormous influence in Barack Obama’s Washington, chatting regularly with a legion of former employees who dominate the ranks of the young administration’s policy team. He speaks regularly to Treasury Secretary Timothy Geithner, who once worked for Rubin at Treasury.

    SPERLING, GENE.

    Prior to advising Timothy Geithner on bailouts, Sperling was paid the paltry sum of $887,727 by Goldman Sachs for one year of consulting work. Sperling, another acolyte of Robert Rubin’s raked in even more that year, according to William Grieder at the Nation:

    [he was paid in addition] $480,051 as a director of the Philadelphia Stock Exchange, plus $250,000 for his quarterly briefings to two hedge funds, plus the speaking gigs [$158,000] (including an appearance before the Stanford Group in Houston subsequently charged with running a Ponzi scheme). Meantime, his day job at the Council on Foreign Relations paid $116,653. A busy, busy wonk.

    STORCH, ADAM.

    Storch worked for Goldman Sachs for 5 years reaching the position of Vice President in the Business Intelligence Group. He is Obama’s Managing Executive of the Security and Exchange Commission’s Division of Enforcement.

    SUMMERS, LARRY.

    It didn’t take Larry Summers long to land a big time job after he crashed and burned as Harvard’s President. He sits at Obama’s right hand as Obama’s chief economic adviser and head of the National Economic Counsel. Summers’s boss at Goldman was non other than Robert Rubin, former co-Chairman of Goldman and also former head of Citicorp.

    Summers has reaped nearly $2.8 million in speaking fees to banks and institutions he is now supposed to be helping to regulate and oversee.

    Goldman Sachs paid him $135,000 for a single speech he gave in April, 2008, a very good investment repaid many times to Goldman.

    >CONCLUSION.

    Although a lot of work and research was put into this list, I am sure I missed many people. But it gives the most comprehensive look ever published at how extensive the Goldman Sachs ties are in the Obama administration and the revolving door between the two (See attorney Craig’s description above).

    It also shines light on a subject that has virtually received no mainstream media attention: the importance of the Hamilton Project (funded by Robert Rubin and Goldman Sachs) as the policy voice for their pro-corporate interests. While Matt Taibbi has dissected Goldman, no journalist has looked at the Hamilton Project (Taibbi misses it too) despite the fact that all three of its first directors serve now in the Obama administration. Its current director, its fourth, worked as an economic adviser to Obama Administration and at MIT. It formulate the pro-big business that Goldman wants and spreads it through academia and the Obama administration.

    Robert Rubin and Goldman Sachs cleverly disguished their Rosemary’s baby, the Hamilton Project, within the essentially liberal Brookings Institution. Lots of journalists (including the BBC) have been misled by this, thinking that if it comes out of Brookings, it must be liberal or even progressive. Discussing Peter Orszag, the BBC made this blunder:

    He was one of the first directors of the Hamilton Project, a Brookings think tank initiative backed by Robert Rubin which aimed to combine fiscal responsibility with progressive politics.

    (emphasis added)

    Not so! The clear message from the Hamilton Project is this:

    1) entitlements must be cut, including Social Security;
    2) more jobs must be outsourced overseas;
    3) more NAFTA-type agreements must be drafted and entered into;
    4) strict budgetary policies must be applied to entitlements and especially health care “reform” (whereas the defense department is skirted).

    One only has to look at the Hamilton Project, at Obama’s speech to that group in April, 2006, and the numerous articles and books that they have peddled to see that their outlook is overwhelmingly corporatist and pro-big business. It is, then, ant-iprogressive not liberal and certainly not progressive.

  10. The Purpose Behind Engineered Economic Collapse
    52 Comments »

    By Giordano Bruno

    Neithercorp Press – 08/17/2010

    “From now on, depressions will be scientifically created.” — Congressman Charles A. Lindbergh Sr. , 1913

    Everyone loves money. Even people like myself who abhor the abuse of money and commerce, who understand the fraudulent nature of the system we live in, still work hard and save so that we might attain a sense of stability within that system. Many people see money as a focal point to their existence. But is it really money that they are after, or is it something else entirely? In truth, money represents ‘security’ in the minds of the masses. Money affords us the ability to survive, and the more of it we have, the safer we all feel. Because we subconsciously associate the extension of our very life with the variable health of the economic structure in which we live, we tend to become unwitting devotees to its continued existence, even if it is corrupt and condemned to failure. We gullibly deny the system or the currency that supports it is doomed to the contrary of all evidence because, even though it has beaten us bloody, we have never known anything else.

    In light of this entrenched way of perceiving things, especially in the U.S., it is difficult enough to convince some people that the economy is in fact not providing the security they desire, but is actually destroying their future completely. To explain to them that this is deliberate, that the economy is designed to self-destruct, that is another prospect altogether.

    Many people hit a proverbial wall on this issue because they simply cannot fathom that certain groups of men (globalists and central bankers) view money and economy in completely different terms than they do. The average American lives within a tiny box when it comes to the mechanics and motivations of finance. They think that their monetary desires and drives are exactly the same as a globalist’s. But, what they don’t realize is that the box they think in was BUILT by globalists. This is why the actions of big banks and the decisions of our mostly corporate establishment run government seem so insane in the face of common sense. We try to rationalize their behavior as “idiocy”, but the reality is that their goals are highly deliberate and so far outside what we have been taught to expect that some of us lack a point of reference. If you cannot see the endgame, you will not understand the steps taken to reach it until it is too late.

    In the past we have covered numerous instances in which global bankers have admitted to fraud on a massive scale, fraud which is now crushing our already fragile economy. We have covered the private Federal Reserve and how it knowingly facilitated the creation of the housing bubble, as well as how it is now inflating a Treasury bubble which is soon to implode. We have covered Goldman Sachs and its efforts to promote and sell toxic derivatives all over the world while at the same time betting against those derivatives on the open market. We have covered the manipulation of gold and silver markets by companies like JP Morgan, which have recently been exposed by whistleblowers and GATA investigations. And, most importantly, we have executed in-depth analysis on the growing weakness of the U.S. dollar in preparation for severe currency devaluation. These revelations raise questions, which is natural, but they also illicit misconceptions and reckless knee-jerk reactions, especially when broaching the fact that the illegal strategies of international banks are part of a greater agenda.

    Below, we will examine some of the most common narrow minded responses to the issue of engineered economic collapse, as well as why people think the way they do when the “semi-sacred” subject of money is involved…

    1. The economy is too complex to be controlled by just a handful of people…

    This response often comes from people who make presumptions on economics, rather than actually educating themselves on how the system works. From the outside looking in, the world of finance appears chaotic; a mixture of mathematical and legal standards swirling in a void of mass psychology. Many Americans are either frightened off by the seemingly complicated field of study, or they find it rather boring and not worth their time. This, however, does not stop them from assuming that they know how money works.

    The problem is that just because a person participates in his economy daily, it does not mean he has any understanding of how it operates. Many watch television on a daily basis, but few have any idea how the picture actually gets onto the screen, or how to fix a television once it is broken. Sadly, our egocentric culture has led a substantial portion of the public to imagine that they are experts on EVERYTHING, and thus, true researchers in the fields of economics and globalism get reactions like the one above constantly.

    At bottom, once all the quasi-technical biz-babble used by mainstream talking heads is removed from the equation, economics is rather simple. Supply and Demand will always be at the center of any and every economy, regardless of the political atmosphere it exists in. These two fundamental factors can be manipulated to a point, by the creation of artificial supply, or the conjuring of false demand. This is achieved in many ways by global bankers, but primarily through domination of the issuance of currency, the ability to change interest rates at will, as well as the ability to inject or remove incredible sums of money from any market.

    A perfect example is the suppression of silver prices by JP Morgan:

    http://www.zerohedge.com/article/whistleblower-exposes-jp-morgans-silver-manipulation-scheme

    Gold and silver represent competing currencies to the fiat dollars created by the Federal Reserve, and suppressing the value of these commodities helps to ensure that the public will never see them as a viable alternative to paper assets. JP Morgan, who along with other international banks has the ability to throw around massive quantities of capital wherever they please, suppresses the value of physical silver by issuing paper securities for silver that doesn’t actually exist (creating an artificially high supply), and naked short selling silver markets to drive them lower (creating the false impression of low demand).

    Another good example of economic manipulation is the private Federal Reserve’s strategy during the 90’s under Alan Greenspan to artificially lower interest rates, allowing banks to issue credit at historical levels for over a decade. Linked below is an article from Ron Paul’s ‘Texas Straight Talk’ dated March, 2007, before the housing market even began its full swan-dive. In it, he discusses the Federal Reserve’s direct role in the creation of the housing bubble:

    http://www.house.gov/paul/tst/tst2007/tst031907.htm

    Men like Ron Paul, Peter Schiff, Gerald Celente, Jim Rogers, and many others were able to predict long before hand that the Federal Reserve’s actions were creating an explosive mortgage and credit bubble, yet, we are supposed to believe that the Federal Reserve had “no idea” that their actions would result in a debt implosion?

    Catherine Austin Fitts, former Assistant Secretary of Housing and Commissioner of the U.S. Department of Housing and Urban Development under the first Bush Administration stated conversely that the mortgage bubble was absolutely not an accident, and that she had witnessed outright and deliberate fraud on the part of the U.S. government and the Federal Reserve Bank in creating the bubble. The fact that disturbed her most, however, was her discovery that only a small handful of international banks were responsible for the perpetuation of toxic mortgage debt, not just in America, but around the world:

    http://solari.com/blog/?p=2058

    Goldman Sachs (one of the primary globalist banks involved in the igniting of the debt crisis) was caught red-handed selling toxic derivatives to investors and governments all over the planet while at the same time betting against those derivatives on the market. Goldman even bet against mortgage securities the bank itself created!

    http://www.businessweek.com/news/2010-04-26/goldman-sachs-bet-against-its-own-deals-senate-s-levin-says.html

    This is sort of similar to a car maker selling vehicles without brake lines, then placing bets that their clients will crash and burn. Essentially, it is blatant and sociopathic fraud! Goldman’s actions directly contributed to credit collapses in numerous countries, including Greece, and here in the U.S.

    The idea that global banks can turn the economy on and off like a light switch may be a stretch, but the vast majority of evidence shows that they do have the ability to shift the direction of markets to a point, as well as the ability to spur the growth of bubbles that eventually lead to recessions, depressions, and beyond. In fact, if one examines the U.S. economy from the inception of the Federal Reserve in 1913, they would find that the past century has been nothing but a series of engineered equity bubbles designed to slowly hobble, but not completely cripple, our financial system and our currency, at least, until recently. Like a steam locomotive on a collision course with a bottomless canyon, globalist banks can slow or speed up the pace of our descent, but the final destination never changes.

    Now that we have established that market collapses can be created by a small handful of bankers and done knowingly, lets move on to the next most common sheeple-like talking point.

    2. Yes, international banks triggered the meltdown, but the “greed of Capitalism” is truly to blame (i.e. Its all the Republican Party’s fault)…

    First off, if you’re parroting the fiscal debate points of two dimensional socialist gatekeepers like Michael Moore, then you’re already hopelessly lost in the mind warping hedge maze of the false left/right paradigm. You should stay as far away as possible from adult conversions on economics, especially if you plan on associating the “greed” of capitalism and corporatism with the Republican Party alone.

    News Flash! Barack Obama received far more in corporate campaign donations (including donations from BP and Exxon) than McCain did. Both Bush Jr. and Obama increased government spending to record levels meaning Neo-Conservatives are in no way “conservative” (as a true Republican is supposed to be). Obama has consistently surrounded himself with banksters and corporate lobbyists, including various hobgoblins from the bowels of Goldman Sachs. BOTH major parties are owned and operated by global banks. This is a cold hard undeniable truth of our political system. There is no way around it. Learn it, accept it as reality, and stop trying to blame one side or the other for problems that both sides created! If you cannot do this, your view of our cultural state of affairs will always be horribly skewed and your insights on our social problems will be utterly worthless.

    While wannabe socialists desperately clamor to point fingers at the free market ideology as the cause of all our ills, the fact is that none of us have ever lived in a truly free market system. Since the inception of the Federal Reserve in 1913, all markets and even our own currency have become more and more vulnerable to manipulation by the banking elite. We have lived our entire lives in a rigged market, not a free market. To blame the very concept of Capitalism for our current dire circumstances is not only naïve, it is dangerous. Globalists would like nothing better than to promote the illusion that “too much freedom” led us to this disaster, and that severe controls must be put into place to ensure that it “never happens again”.

    3. Global banks would never engineer the collapse of the U.S. economy or the Dollar. It makes them too much money…

    This often heard song and dance ties in with the number two comment above. Again, the assumption is that the globalists only do what they do out of an “uncontrollable greed for money”. This perpetuates a couple fallacies. First, it encourages the false belief that the end concern for the Elite is the accumulation of riches. Central bankers have the ability to PRINT all the money they want from thin air! Remember, the Federal Reserve has never been subjected to a full audit, meaning they could easily create billions if not trillions without any oversight whatsoever. Greed for money, to them, is surely an absurd notion. What they do want, more than anything else, is social power. They want control over every living human being without question. All other concerns are secondary.

    The next fallacy underlying the above argument is the conjecture that the U.S. economy is somehow indispensable to global banks. This is simply not so. Where we see the economy as an extension of our culture and ourselves, the Elites see financial systems as mere tools in the pursuit of a greater goal: World Government. Imagine you are building a house. Once your saw has fulfilled its intended role of cutting the wood, do you cling to it, or do you throw it aside and pick up a hammer? This is how globalists look at financial systems. They are perfectly willing to cast off the U.S. economy like a snake shedding skin if it brings them closer to attaining their ultimate aim.

    The same goes for the Dollar. The Greenback may be the premier world reserve currency now, but that can and likely will change very quickly over the next couple years. The Dollar is a device that has outlived its usefulness as far as global bankers are concerned. The IMF has on several occasions made it clear that they eventually intend for the SDR (Special Drawing Rights) to replace the Dollar as the world reserve currency, and they have openly admitted that it will one day be established as a global currency. IMF press releases make this development sound far off and away, but SDR accumulations by countries around the world have risen dramatically in the past year. This along with other factors we will cover (namely China’s preparations to dump their U.S. T-bond holdings) show that IMF actions indicate they are preparing for a collapse of the Dollar now!

    4. China would never dump U.S. Treasuries because it would hurt them as much as it hurts us…

    The theory that China is somehow fused to the U.S. in a kind of symbiotic seesaw relationship that can never be broken is so ingrained among mainstream American financial analysts it simply will not die, regardless of how much contradictory evidence you show them. It really is like a mental disease which causes MSM pundits to go into involuntary Tourettic convulsions every time you mention the words “Treasury bond dump”. America and China are not conjoined twins, and one can survive without the other. We have covered the China issue over and over again, and I will not rehash all that evidence here. To lay it out simply: China has re-engineered its economy towards consumption and importation rather than relying on exports. The IMF has talked about this on many occasions with apparent excitement:

    http://www.imf.org/external/np/tr/2010/tr072910c.htm

    China has also finalized the ASEAN trading bloc which has combined export markets at least equal to that of the U.S. Meaning, China already has another place to send its exports besides America.

    Most importantly, China must increase their currency’s value if their new consumer based system is to survive. Allowing the Yuan to rise sharply in value will revitalize the buying power of the Chinese populace making greater consumption possible. Indeed, China MUST dump their Treasury holdings and pump up the Yuan if they are to hold their economy together. And, the Federal Reserve has given China every reason to turn its back on Treasuries through never ending liquidity injections. This is not to say that a U.S. collapse will not affect them, it would negatively affect the entire world. However, China has positioned itself to survive, and perhaps even thrive with their economic expansions into Africa, and their new financial agreements with Germany.

    Finally, the Chinese have been very forthcoming over the past week about plans to drop Treasuries. China has dumped over 7.7% of their U.S. T-Bond holdings since January, including the biggest T-bond dump on record this month. They have openly admitted to a plan to diversify away from the Dollar:

    http://www.bloomberg.com/news/2010-08-17/china-cuts-long-term-treasury-holdings-by-most-ever-as-u-s-yields-decline.html

    I’m always fascinated by those economists who vehemently deny China will ever turn away from the U.S. Dollar while they are doing so right in plain view. Are MSM analysts simply crazy? I don’t know, but it would explain a lot…

    5. Sure, bankers took advantage, but it’s really the American people’s fault for getting suckered…

    Yes, a sizable portion of the American public can be gut wrenchingly stupid. It hurts my head and my feelings to see people act so idiotic, it really does. The problem with this argument though is that when it is taken too far it becomes an attempt to divert blame away from the criminals and place it on the victims. If you knowingly leave your front door unlocked in a bad neighborhood and you find your home ransacked the next day, then you are partly responsible. But, we cannot forget that the neighborhood is “bad” in the first place because of the criminals, not the people who don’t lock their doors.

    Just because global banks can sucker the public doesn’t mean they should, or that they cannot be judged for it. The crime ultimately rests on those men who made the conscious effort to destroy this country, and the blame rests with them as well. I see the attempt to parlay the economic collapse into the lap of the American people very often lately, especially from bankers who now claim that it’s the American public’s fault entirely. Why? Because they will not spend more, they will not take on more debt, they will not take on more risk, and they will not believe hard enough in the recovery that never was. Imagine a serial rapist behind a podium admonishing women for carrying pepper spray. It’s eerily similar…

    6. Ok, maybe the banks are causing a collapse, but to say the government is helping them is just crazy conspiracy theory…

    Why is it that the Federal Reserve has never been fully audited? Why is it that when Ron Paul tried to pass HR 1207 Federal Reserve Transparency Bill, it was muddled in committees and then eventually derailed? Why is it that banks like Goldman Sachs have been caught, yes caught, setting the stage for an economic implosion in this country, yet no government indictments have been formed to criminally prosecute them? Why are these men still roaming free like locusts to continue pillaging at will? Are we supposed to feel lucky that we get table scraps like Bernie Madoff behind bars while the Federal Reserve commits Ponzi fraud on a scale that dwarfs his?

    Our government, both major parties, is owned lock stock and barrel. This is why there are no satisfactory answers for the questions posed above. Elements of the U.S. Government including almost every president since 1912 have not only turned a blind eye to Globalist activities, they have offered their full support to the bankers.

    Nixon removed the Dollar from the gold standard in 1971 giving the Fed free reign to print as much fiat as they wished without limitations. In 1980 the Depository Institutions Deregulation and Monetary Control Act was passed placing all banks essentially under the rules of the Federal Reserve. The Glass-Steagall Act which kept investment banks and depository banks separate was repealed under a Republican majority in the Senate, and then finalized by Democratic President Bill Clinton in 1999. 30 years ago, banks that held your home mortgage were for the most part required to keep that mortgage until it was finally paid. But, a series of government decisions spanning that period and influenced by global banks allowed for the “securitization” of mortgages, leading to the creation of “derivatives”, which were then used by corporate mobsters like Goldman Sachs to destroy our financial system. Last, but certainly not least, both the Bush and Obama Administrations pressured Congress into passing highly unpopular bailout legislation which basically rewarded the same banks that created the credit crisis with trillions in taxpayer dollars (yes, the bailouts are now actually in the trillions, not billions). This led to the coining of the term “too big to fail” (or “too big to jail”). Our Government has been nothing but complicit in the banker takeover of this country. To debate otherwise is to invite embarrassment.

    I haven’t even scratched the surface of government involvement in the collapse of our economy. Cases like the Savings and Loan crisis of the 1980’s led to serious prosecutions and jail time for more than 1100 criminal bankers, but this only caused the government to respond by changing investigation rules to make it even more difficult to catch the high level fraudsters in the act! Linked below is an interview between Max Keiser and bank regulator Prof. William K Black who outlines our government’s complicity in the breakdown of the country it is mandated to protect:

    http://www.youtube.com/watch?v=5Bf5Frx1lZk

    Elites destroy cultures to make way for new philosophies; their philosophies. Its not so much “conspiracy theory” as it is a widely admitted methodology. Corporate globalists believe in global government on their terms and they barely try to hide it. If someone thinks this sounds “fantastical” then they haven’t been paying the slightest attention. When one understands how Elites view economy, and realizes their primary motivations, the fact that they purposely triggered a collapse is perfectly logical. Nothing besides all out war inspires more fear and desperation in a society than a financial upheaval. Such elements on a mass scale allow changes in our collective psychology that were never possible before. Most people tend to falter under such an overwhelming threat and turn towards any authority (or fake authority) to save them from harm. Some people scoff at this idea, but it is likely they have never actually been in the wake of a real national catastrophe before. Men, especially those who know little of themselves, can change quickly in the face of calamity. The Elites recognize this, engineer tragedy, then waltz into the aftermath to merrily lord over the rubble.

    Will their plan work? I think not, but I’m an optimist (no, really). The pursuit of total control and total power seems rather infantile to me, be it on an impressively psychotic level. Although, if we are made to forget who the real enemy is, then I think they do have a chance at success. That is how they have remained successful to this point. Only now does the average man have such immense knowledge at his fingertips, the knowledge to bring down a line despots and tyrants that have reigned for centuries. If only the average man was not so easily deterred by WMD’s (Weapons of Mass Distraction). The Elites will likely ignite some wars, tempt us into in-fighting, and fabricate enemies like Al Qaeda out of the ether. As the slogan goes, “Order Out Of Chaos”. Whatever happens, our eyes must remain fixed on the root of the problem; the bankers, and nothing else.

    Globalists are not invincible, they are not untouchable, they are not even all that brilliant. They are human, and they have made many mistakes. The engineering of an economic meltdown really changes nothing. Hired thugs, useful idiots, corrupt officials, even hyperinflation, all tiny obstacles when considering the world we could have if the Elites were finally made to face the reckoning they deserve. Americans once took on the greatest empire on Earth. We once took a feared king to task. Are a bunch of frothing corporate bankers really so daunting? All that is needed is a principled movement with the will to see justice done, and I believe we have that already.

    You can contact Giordano Bruno at: giordano@neithercorp.us

  11. THE A MAN

    Have always liked BSE!!

  12. HELLO EVERY ONE,

    CAN WE GET ORGANIZED?
    CAN WE GO TO OUR CITY AND COUNTY COUNCILS AND DEMAND TO BE HEARD?
    CAN WE ALL AGREE TO START MAKING THE MOVES NECESSARY TO START THE BALL ROLLING?

    LET US GET THE POLITICIANS THAT DIRECTLY DEPEND ON OUR VOTES TO HEAR US OUT AND START UNDERSTANDING WHAT WE HAVE GONE THROUGH AND HOW OUR LOCAL COMMUNITIES HAVE BEEN ROBBED OF LARGE AMOUNT OF FEES AND TAXES.

    YES, I AGREE WE NEED TO SUE THE PANTS OFF THE CROOKS, BUT THAT IS A ONE PRONG STRATEGY, WE WE LOSE THE AT BAT, WE ARE OUT. WE NEED TO START FIGHTING ON DIFFERENT FRONTS. IT DOES NOT COST US ANYTHING TO VOTE, IT IS OUR RIGHT AND OUR DUTY. IT DOES NOT COST US ANYTHING TO RAISE THE ISSUE AT THE COUNTY LEVEL, AT THE RECORDING OFFICE AT THE COURT HOUSE, TO WRITE TO OUR LOCAL NEWSPAPER, TO NEWS LETTERS, IT DOES NOT COST US ANYTHING THE START MOVING FORWARD. i FEEL THE EARTH MOVING BECAUSE ALL OF US ARE FIGHTING FROM OUR INDIVIDUAL CORNERS, WE NEED TO START MOVING FORWARD. WE NEED TO START PUSHING BACK. LET US DO IT AT THE LOCAL, STATE AND FEDERAL LEVEL.

    LET US START AT THE COURT HOUSE, AT THE AUCTION EVENTS.

    99% OF THE PEOPLE OUT THERE HAVE NO IDEA OF WHAT REALLY HAPPENED, WE NEED TO DO LIKE THE TWELVE STEP PROCESS.

    STEP ONE GET YOUR PAPER WORK ORGANIZED

    STEP TWO SEND YOUR QWR’S AND DEBT VALIDATION LETTERS.

    STEP THREE GET YOUR TITLE, AND SECURITIZATION REPORT AND (THIS IS NOT LEGAL ADVICE) LOOK INTO STARTING YOUR LEGAL BATTLE (MAKE SURE YOUR LAWYER IS REPUTABLE. MAKE SURE YOU CALL THE BAR TO ASK IF THERE HAVE BEEN ANY COMPLAINTS OR GRIEVANCES RAISED AGAINST THEM, ASK THEM FOR THEIR CASE PROFILE, ASK THEM ABOUT THEIR EXPERIENCE AND SUCCESSES AS A CONSUMER LAWYER, ASK THEM ABOUT THE TRUTH IN LENDING ACT, RESPA, AND OTHER RELEVANT LAWS AND REGULATION, LOOK THEM STRAIGHT IN THE EYE AND ASK TOUGH QUESTIONS. DO NOT LET THEM OF THE HOOK, STAY ON YOUR CASE AND ON THEIR CASE, REMEMBER IT IS YOUR HOME AND FUTURE IN THEIR HANDS.

    STEP FOUR START LOOKING FOR OTHER PEOPLE WITH THE SAME SITUATION ANS SHARE EXPERIENCES AND KNOWLEDGE.

    STEP FIVE START SENDING LETTERS TO YOUR LOCAL AND STATE OFFICIALS AND WELL AS REGULATORY AGENCIES

    STEP SIX START ATTENDING LOCAL GOVERNMENT MEETINGS AND START ASKING FOR YOUR RIGHT TO TELL YOUR STORY AND HOW THE COUNTY, THE SCHOOLS, THE FIRE DEPARTMENT, THE POLICE DEPARTMENT AND THE CITIZENS OVER ALL HAVE BEEN DEPRIVED OF THE SHARE OF TAX AND FEES REVENUES FROM ALL THE CROOKS AND THE FRAUD. SHOW THEM HOW THEY CAN CLOSE THE GAP FOR THEIR BUDGET DEFICITS ONCE THEY REALIZE THEY HAVE BEEN VICTIMS OF A MASSIVE FRAUD SCHEME

    STEP SEVEN MAKE SURE YOU SET UP A FACE TO FACE INTERVIEW WITH YOUR SENATOR AND CONGRESS PERSON IN YOUR STATE. SET UP YOUR LOCAL, STATE AND NATIONAL P.A.C.’S (POLITICAL ACTION COMMITTEES)

    STEP EIGHT START CONVERGING ON M MASSIVE SCALE ON THE LOCAL MEDIA. BY ACTING IN GROUP IT CREATES MOMENTUM AND RAISES THE CONSCIOUSNESS OF THE ISSUE

    STEP NINE PROTESTS IN FRONT OF BANKS, COURT HOUSES, FORECLOSURE MILLS AND BY THE WAY CALL THE MEDIA SO THEY CAN BE THERE TO COVER THE STORY. THE MEDIA DUE TO THE RATINGS RATIONALE ARE ALWAYS LOOKING FOR SCANDAL AND TRAGEDY, REMEMBER WE ARE ALL VICTIMS!!!!!!!!!!!!!!!!!!

    STEP TEN INTRODUCE GRIEVANCES IN A MASSIVE SCALE AGAINST ALL FORECLOSURE MILLS DUE TO THEIR LACK OF ETHICS.

    STEP ELEVEN FIGHT RELENTLESSLY FOR YOUR CAUSE, REMEMBER AS A GROUP WERE ARE MORE EFFECTIVE

    STEP TWELVE, CONTINUE LEARNING, EDUCATING YOURSELF AND YOUR LAWYERS, REGROUP, SHARE EXPERIENCES, DO NOT DESPAIR, THE PROCESS IS LONG AND ARDUOUS. BUT REMEMBER YOU ARE ON THE RIGHT SIDE. BE FLEXIBLE, ADAPT, BE ABLE TO ADJUST STRATEGIES AND TO DIG EVEN DEEPER. DO NOT REST ON THE EFFORT, THE ENEMIES HAVE ARMIES OF CROOKED LAWYERS LOOKING FOR THEIR SILVER BULLET, IT IS GENERALLY BASED ON FRAUD AND BY GETTING AROUND YOUR DEFENSES.

    THIS IS A REBELLION FOR JUSTICE, FOR WHAT IS RIGHTFULLY YOURS.

    THIS IS JUST AN EXAMPLE, IT SHALL NOT BE CONSIDERED LEGAL ADVICE OR TO BE THE ONLY PATH OR WAY, THIS IS JUST A THOUGHT AND NOT A SERMON. AND IF YOU LIKE IT AND WANT TO MODIFY IT YOUR WAY BE FREE TO DO SO. IT MAY END UP BEING TOTALLY DIFFERENT. I JUST WANTED TO PUT IT OUT THERE FOR ALL TO DIGEST.

    I LIVE IN VIRGINIA A VERY PRO BUSINESS STATE, WITH COURTS AT EVERY LEVEL THAT THINK THAT YOU ARE A DEAD BEAT, HOWEVER, IF YOU ARE WILLING TO FIGHT, IT DOES NOT MATTER HOW HARD IT IS.

    EMAIL ME YOUR COMMENTS AT

    pelucheven@hotmail.com

  13. Homeowners’ Rebellion – Could 62 Million
    Homes Be Foreclosure-Proof?
    A committed movement to tear off the predatory mask called
    MERS could yet turn the tide for struggling homeowners
    By Ellen Brown
    From Yes! Magazine
    8-18-10

    Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

    Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles-and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”-an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

    That means hordes of victims of predatory lending could end up owning their homes free and clear-while the financial industry could end up skewered on its own sword.

    California Precedent

    The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E-11. The court held thatMERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

    Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another.Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

    In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

    Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

    The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

    This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

    While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

    What Could This Mean for Homeowners?

    Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

    An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

    In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

    Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

    Criminal Charges?

    Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”

    Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

    By Their Own Sword: MERS’ Role in the Financial Crisis

    MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”

    MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

    Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept….

    After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible …. The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

    Axing the Bankers’ Money Tree

    If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chroniclearticle by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

    The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

    . . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .

    Nationalization of these giant banks might be the next logical step-a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

    The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.

    With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

    Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and “the money trust” have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

    http://www.commondreams.org/headline/2010/08/18-8

  14. Yes, ask about YSP – and also ask if your (refinance) loan was a “modification” of the prior loan. Thus, no right to even access a YSP.

    All geared for insurance maneuvers??? Get your “Letter of Transmittal.” Big black box..

  15. My mortgage broker told me and the construction loan bank that she had two banks waiting to give me a fixed rate conventional loan at the end of construction. She even signed documents stating same.

    So I bust my butt building a house in the winter in MN. If you’ve never tried that….believe me when I die I’m going to heaven, ’cause I’ve been to hell.

    She had llied, and only had high % ARMs for me. So I had to find another broker. Instead of a conventional fixed rate, I was told by everyone I met with that I could only get an arm, with a $75K 2nd HELOC to make up the balance at credit card rates, varying between 9 and 12%. Do you have any idea how hard it is to pay down an interest only loan at those rates? !00% failure rate for the above situation.

    I had no choice. I had built this houes, needed financing, and of course I was told I could always refi at a later date. When I showed up at the closing, the folks across from the table from me unfolded a huge set of documents, which I started reviewing. Right off the bat, I saw a problem. The loan was for 2 points higher than I had been told pre-closing. Do the math. It’s astronomical how much extra money is involved with a 2% hike. I pushed the chair back and walked out without saying a word.

    I ended up with a very bad loan after all was said and done. Unsustainable, as probably 95% of the loans out there were during this time period.

    Folks, it’s only when we come to terms with the fact that our entire system is not only broken, it is a total lie and a sham. Geithner, Paulson, Bernanke, Obama, none of them will ever push for anything meaningful, because the entire deal is totally a scam.

    Why should anyone have to pay $600,000 in interest and fees on a $300,000 house to anyone? That’s why the middle and lower classes of the world have fallen into chaos and disarray. Both parents have to work nonstop, to afford this usury. The kids suffer. Everyone suffers.

    Just a small example of how this is affecting good folks. I have two very successful friends, husband and wife architects. Nice folks. Two teenaged kids. Community minded, would help anyone out at a moment’s notice.

    They both lost their jobs 2 1/2 years ago, and have been on unemployment since. Not knowing any better, they’ve continued to make their ludicrous, inflated mortgage payment at all cost, so fearing losing their ability to have a roof over their heads, especially considering that their two boys will be graduating from high school over the next few years, and wanting them to have the familiar setting to achieve that. Not too much to ask. But now they’ve gone through their life’s savings.

    While the wife has continued looking for work religiously, the husband has given up hope, and sunk deep into the bottle. He drinks every waking moment now. He never had a drinking problem before now. He’s gone from a responsible, caring citizen and member of the community, to being a drunk on the sofa, in just a couple of years.

    Folks, don’t automatically think it couldn’t happen to you, as this kind of stress can eat at the very core of someone who’s always been a grounded individual, but suddenly wakes up each and every night wondering if he’ll be able to take care of his families basic needs.

    It looks like she may have found a job on the west coast, and is considering leaving him, not just as a stopgap until he and the boys can join her, but leaving him for good, because they’ve grown apart from all of the stress and disturbance in their lives. What a tragedy to see good, loving people ripped apart.

    The reason I bring this up is to paint a micro-picture of what is happening all around America right now. This country is being torn to shreds, because of the greed of the top 5%. Because THEY control the money supply, we are simply pawns in their game.

    Until the people of this nation realize that the banks are getting this money at 0% interest, and then loaning it out to us at usurious rates, nothing will change. Why? Because they can. How? Because we let them, by continuing to support a system that is so flawed, so corrupt in favor of the upper 5%, that we will never be able to shift it out of their hands unless we stand and fight.

    Accuse Geithner, Bernanke, Greenspan, Paulson, Dimon, Blankfien, and all of their croanies of the crimes to which they are obviously perpetraiting on all of us, on a daily basis.

    Stop paying your mortgage, regardless of the consequences. Stop paying your credit cards, regardless of the consequences. Stop all usurious commerce until we shift the balance of power from the corruption that is rampant back to where people can live their lives without struggling from daybreak till midnight.

    Write your legislators and don’t ask them to please take a look at this or that. Threaten them that if they don’t do the right thing, you will lead a grass roots campaign to get them ousted, then follow through with those threats.

    This crap has gone on long enough, and I for one would rather have had the entire banking system slide into the hole that Geithner claims he looked into a couple of years ago. Let them all slide down into the reaches of hell for all I care. We’ll rebuild a system anew that cares for everyone equally, some way or another.

    Then maybe we can help each other again. Then the stress of daily living will be reduced so that we can play with our kids again, sober. If we don’t succeed it’ll just be more of the same until the next crash, which if you haven’t notice, Wall street is busy working on as we speak. It’s now or never. Screw the elite.

  16. Mr Gregg Christoff,
    Niel is 100%. right.
    Please go back and ask them about YSP Tier -I and Tier II and educate yourself. If you do not know then it is better to keep quite. Always try to seek knowledge.Mr. Gregg Christoff, I will challenge you that what Neil is saying is correct. If still you are not satisfied we can discuss this on a TV show and I will prove you wrong.

    BARNEY IS NO LONGER ON THE AIR

  17. Mr Gregg Christoff,
    Niel is 100%. right.
    Please go back and ask them about YSP Tier -I and Tier II and educate yourself. If you do not know then it is better to keep quite. Always try to seek knowledge.Mr. Gregg Christoff, I will challenge you that what Neil is saying is correct. If still you are not satisfied we can discuss this on a TV show and I will prove you wrong.

  18. Jose Fighter,
    I know nothing and if I think I know something, I know nothing. I do not give legal advice because I do not know legal things.
    Welcome to my world. Sounds familiar.

    “A servicer that came out of no where, who refuses to send copies of anything.”

    In my world, the copies came two weeks before the foreclosure was filed (not recorded, filed, so the document will be destroyed by the court house in the future). It was copies, not proving anything, even distorted dates, indicating they were paid by me from the beginning of the year, as if they took over someone’s database of accounts or something, and the copies came with a cover letter that said, “From now own speak to our attorney” in so many words.

    Yep, and if you actually watch what they can do to you, it will ‘really’ open your eyes to the world we live in.

    The US govt can eavesdrop on a phone call and tell the entire country of millions about 6 people in an apartment planning some ‘major’ attack on the US. But we are supposed to believe; they can’t see a few big banks, and some servicers and some attorneys, orchestrating a takeover of the land. Or better yet, it’s part of the bankruptcy of the US and they don’t want us to know they overspent and have to pay the piper off our backs and with our property.
    One super Trustee, watching all these other Trustees, clean house by taking homes, and they could care less about the home on it, it’s the description of the land, the title that they want.
    And if you think you can stop them, it will cost you.
    They have a license, and that license allows them to do illegal and unlawful things, and until charges are brought an you can’t bring them because there is no case if no authority will make one; then they are licensed to steal.

    You will have to give up something, whether it’s attorney fees, time from family trying to gather all the info on what they are doing and why it’s illegal and wrong, or time trying to write your own defense, and stand in front of a judge, (who will judge you), and tell the judge this is wrong, it’s your property, and you should not be there.

    Just look in their eyes, judges and attorneys, as they all snicker because you are not bonded and you didn’t present the ‘best story’.

    If any of this can make you more careful or more prepared, then I’ve done something for someone.

    I’ve got font row seats to the hell and damnation party.
    The more people affected, the more we are connected. We are One. The Meek wins always…The meek does not every battle, but the meek wins the war, and that’s what really matters.
    The Tortoise and the Hare taught us that, among many other stories and fables.You may be clever, but wisdom wins. You may be fast, but slow and steady wins the race. Fiat wealth is not backed by anything, spirit wealth is backed by the basic laws of the Universe.
    Jose Fighter, I wish you luck in your current adventure.

    Light and Love,
    Trespass Unwanted, sui juris in propria persona

  19. Mr. Cristoff was simply giving the text book answer . He should only be berated for being out of touch with actual practice.

  20. what about a case I just reviewed in VA,

    a 1.7 million dollar home, with a 2.5% YSP, 1% origination point and 1% discount point plus $,000 in junk fees.

    This is fraud!!!

    how can you charge a discount fee on a loan yielding a spread of 2,5%. the lender originator a local VA mortgage Broker no longer in business thank god!,
    the middle man was Green Point and , the puppet master Lehman Brothers, now the party foreclosing is a servicer that came out of nowhere and refuses to send copies of anything. Check the name an put it in your radar screen KONDOUR FINNCIAL, they specialize in what they call DENTED LOANS!!!!!!!!!

  21. Yes, while it is reasonable, and expected, that the mortgage industry should profit from transactions, it should be within reason and should not damage the borrower.

  22. Dear Mr. Gregg Christoff,

    I appreciate very much the fact that you at least had the interest in putting your thoughts together. That alone is commendable. However, I do believe that you may be a mortgage broker or loan officer, since your whole perspective comes from the bottom step of the financing process. I would agree that for any enterprise to stay afloat needs an income, loyal and “happy” clients. But that is as much as I am able to be in agreement with you.

    As a former Real Estate Principal Broker, a former owner on a large Mortgage Broker and a Title Company that operated in MD, DC, VA and FL, I can tell you that I have seen pretty much every thing. In the market place and as the rules are set up, they whole system is rigged against the consumer. The YSP and the under the table kick backs that are paid or were paid to mortgage brokers were astonishing. Point in fact, INDYMAC. Indymac set up agreements with their mortgage brokers all over the USA in which they agreed to pay additional yields to the Owners of the brokerage companies for having their loan officers steer business their way. It was a tiered system which included the interest rates sold to consumers, the size of the loan and the amount of loans.

    Let me be more specific as the Indymac Account reps put it to the brokers.

    1.- Sell a higher interest rate since there will be a additional one time commission generated off the additional future earnings for the lender and other in the upline. On top of the yield that was placed on the HUD1 which only brokers were required to list on the HUD1. BOA, CITY, COUNTRYWIDE CROOKS, WELLS FARGO and other major lenders were exempt from this requirement, so the biggest crooks were in fact protected and could lie at will to their clients (VICTIMS). The consumer for the most part was told that that was the best interest rate he or she could get and that in addition he or she would have to paid either origination, discount points and onerous junk fees.

    2.- Assist the future home owner or refi VICTIM to over leverage themselves by selling ARM loans that were based on ill conceived disclosure documents and most of the time by settlement agents and loan officers that were motivated to have you sign on the dotted line and to cover up any information that would keep you from doing so. The Real Estate business and the Real Estate finance business is riddled with conflicts of interest. That conflict is highly profitable and as we can now be a witness of, very damaging to the fabric of america. The higher the loan amount the higher the commissions,the higher the YSP’s.

    3.-And by having reduced the qualifying requirements and due diligence to ZERO, and by having the account reps coordinate the underwriting of the loans and even faking whatever documentation was needed to close the deal, was enough to generate a volume of production that to sustain itself, it was necessary to only ask if someone breathed and they had a body temperature to qualify. They went to the extent of not even asking for reserves and down payment.

    Dear Mr. Christoff, do not take it personal, but the truth of the matter is that there are over twenty million families in trouble and less than a million Loan Officers in the business and only a few thousand banks, the common denominator is the cash that can be earned. The victims had only to be manufactured through very exotic processes and the end result is our total financial meltdown.

    The biggest problem in the industry is the lack of proper educational requirements and the whole industry works under the NEED TO KNOW basis.

    Once you start looking into how money is made, how it is transferred and how deep it goes, you start realizing that as a Loan Officer, not only you were a very important tool in their scheme, but by having you being fully ignorant of how it all works. It was better for the people in the middle.

    I hope you do educate yourself and start seeing things as they really were. I would assume for your benefit that you NEVER lied to any of your clients.

  23. I am starting to really like BSE

  24. Gregg Christoff should be striped of all his bank accounts, his home and his family kicked to the streets. He should then be tar and feathered, put on a boat to Nigeria with nothing to eat but bread an water for at least one year. This will give him enough time to think about the damage he caused to the multitude of US homeowners who were fleeced and now live in deflated ghettos. Gregg Christoff needs to get a clue.

    HE MAKES ME WANT TO CHANGE MY NAME…..

  25. BSE RELAX WITH THE TARING AND FEATHERING. HOW ABOUT TAKING AWAY HIS LIVING AND CAUSING HIM TO BECOME A CRACK OR METH HEAD OR ALCOHOLIC. AND HAVING HIS CHILDREN AND WIFE DISOWN HIM BECAUSE HE CANT MAKE A LIVING

    That would be too good for him, just send him to HELL

  26. BSE RELAX WITH THE TARING AND FEATHERING. HOW ABOUT TAKING AWAY HIS LIVING AND CAUSING HIM TO BECOME A CRACK OR METH HEAD OR ALCOHOLIC. AND HAVING HIS CHILDREN AND WIFE DISOWN HIM BECAUSE HE CANT MAKE A LIVING.

  27. Gregg Christoff should be striped of all his bank accounts, his home and his family kicked to the streets. He should then be tar and feathered, put on a boat to Nigeria with nothing to eat but bread an water for at least one year. This will give him enough time to think about the damage he caused to the multitude of US homeowners who were fleeced and now live in deflated ghettos. Gregg Christoff needs to get a clue.

  28. Hey, Charles, I resemble that remark!

  29. Neil,
    Very well said and right on target.Great work.

  30. Since 2006 I have refused to be a Loan Originator because I cannot justify giving borrowers bad loan. I support NACA. Everyone no matter what their FICO is should have a PAR Loan and Low Yeild Spread. Save the American Dream……….

  31. Mr.Cox could be discribing the other side here as well , “staff” @ Mortgage Servicer’s & Forclousure Mill’s!

    “Mr. Christoff exhibits much that resulted in the mortgage melt-down and about those involved in the mortgage brokerage arena; the predatory, clueless, do-anything-to-make-as-much-as-you-can-as-quickly-and-as-easily-as-you-can attitude and utilizing the “used car salesman” gene pool to take advantage of borrowers to make a profit for the brokerage and mortgage banking firms.”

  32. Well said Neil,

    I was involved as a mortgage broker for a number of years and state my opinion here from first hand knowledge.

    Mr. Christoff exhibits a number of traits that were wrong with the mentality of most that were involved in this field. He doesn’t express the simplest understanding of even what a “bank” or “lender” is, to wit: the originator was NOT always (in fact rarely) the “lender”; and real “banks” were NOT always (and rarely) involved. While one may argue the commonality of the terms, how expressed in Christoff’s comments shows a general misunderstanding of even the basics, let alone the real parties involved.

    YSPs were paid to a number of perpetrators in the lending scheme but I will only address the mortgage broker level, as that is what I was directly involved in, reserving specific comment about the mortgage banker level or others.

    For a mortgage broker to make a “profit” they needed to either be paid as “points” (fee) or a YSP (“rate”)…or both. A points/fees/conditions matrix was avialable for mortgage brokers from which to choose what rate or fee was going to be applicable to the loan given certain conditions (i.e. LTV, FICO, program, etc.). Most mortgage brokers during the time I was involved were making approximately 1.5-2.5% (more commonly 2.5%) on each loan either in points or fees.

    The Matrix usually was not linear and if the borrower paid more than 1 point in fees to lower the rate (buy down) broker’s profit aside, the buy down usually didn’t result in enough of a savings to the borrower to justify the buy down. It appeared that the actuaries who developed the matrixes/matrices, targeted the more “reasonable” rate v. fees at 0 points. So, if the broker could get 1-2.5 points from the borrower, they would end up with little to 0 YSP at the broker level (at par). That’s not to say there wasn’t a YSP, it’s just that at par, the trade off was usually better for the borrower due to the non-linear nature (evidently related to risk for the “lender” whover that was…the term “investor” was generally not in the general vocabulary of the typical mortgage broker).

    To digress from writing far too much, I’ll just conclude by saying, with all due respepct, Mr. Christoff exhibits much that resulted in the mortgage melt-down and about those involved in the mortgage brokerage arena; the predatory, clueless, do-anything-to-make-as-much-as-you-can-as-quickly-and-as-easily-as-you-can attitude and utilizing the “used car salesman” gene pool to take advantage of borrowers to make a profit for the brokerage and mortgage banking firms.

    When I did my first loan brokerage transaction and the firm broker took great pains to show me where in the HUD to put the brokerage fee and how to disguise it naming it something other than a brokerage fee so the client didn’t object, I knew this was a recipe for disaster…you can’t continue to screw everyone all the time expecting to get away with it forever…based in ignorance or not (this was a volume based business not necessarily a profit margin based business…an increase in 25 basis points (one quarter of one percent) could result in HUGE profits if offered to promote additional volume. Additional bonuses were offered for reaching certain levels of volume which resulted in the reduction in standards in origination and underwriting).

  33. Really Gregg?????

    You write “…Obviously, the lender cannot offer the raw rate to the client because no profit will be reckonized unless the lender can charge for numerous fees. Normally, charging additional fees is challenging due to the competitive nature of mortgage lending. Therefore, most lenders make thier income from YSP.”

    Meaning simply that since you don’t want to compete farily on what you charge for services you want to hide information from your client so you don’t have to compete. Sort of like buying gas where no price is posted at the pump and the guy behind the counter decides what to charge you, lies, and keeps you in the dark so he does not have to compete with the station across the street.

    Frankly, and I don’t agree with much the Feds have done, but they are right to attempt to remove folks like you from the lending chain.

  34. If Gregg Christoff had done his home work he would find there is lawsuit filed regarding the Yield Spread.

    Neil knows exactly what he is talking about.

    It is ignorance that allows the challenge to the ones that know.

  35. As a realtor and Loan Originator I say that Garfiel is correct. No Broker/Lender or Loan Originator would give a borrower a loan at PAR unless it was for a family member. PAR means like in Golf “He’s PAR for that Hole” It is a 3 Par hole and he made it in 3 hits. When you are 3 over PAR you have a worse game. When your Yeild Spread is HIGH YOU HAVE A BAD LOAN. Alot of borrowers deserved a PAR LOAN but were given loans 3 over PAR or higher Yeild spreads.

  36. Nicely put Neal! My girlfriend was charged a 1% YSP on a $600k loan, she put down 20% on 5-yr ARM. She was told she wasn’t paying it and it wasn’t coming out of the loan. Where did it get paid from?

    After reading your securitization commentary I now know. It came out of the extra $153k for the second YSP that wall street investors paid for plus the extra $280k for the hyper-inflated appraisal. Chase now values the property at $400k and we’ve made 100k in payments the last 5-hrs and we still owe what the original note was for.

    So let’s see, we’re in it $232k plus we’ve lost $260k in equity and they say we’re trying to get a house for free. LMAO

    Oh yea, forgot about the $100k in additions when first bought!

    No wonder everyone wanted to be a RE agent or a mortgage broker. They were all making commissions off of fraudulent home prices.

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