CONFLICT OF INTEREST — GOV. AND FINANCE SECTOR

Editor’s Comment: The obvious enmeshment between government and Wall Street caused by the bailout and other “deals” that were supposedly necessary to maintain our finance structure and avoid 15% unemployment leads to moral hazard in the thinking of the leaders who are in office to protect us. Like the NY Times editorial said this morning, even if it could be argued that this was once necessary, it now smells. It reminds me of the tobacco litigation and settlements. The settlements are paid from tobacco sales. SO now instead of the people being addicted to tobacco, it is the government treasurers.

As long as this incestuous financial relationship continues, the reality of the plight of our our citizens, our local and state governments and our national deficit will be ignored. And if the control of congress goes the way it looks, Republicans and Democrats are going to drive us into a ditch worse than the one they visited just a few years ago. Wall Street money is running the show. And the obvious consensus amongst bond traders is that the economy is going to tank with high inflation. They are actually paying the U.S. government for the privilege of lending it money — on the promise that the interest and principal will be paid back with dollars adjusted for inflation. Nobody would accept a negative return on an income investment unless they thought something really bad was about to happen.

by Anonymous

DyingTruth

You make a good point. The Public Private Investment Program is a joint venture between the Treasury/Federal Reserve and Distressed Debt Buyers – to remove toxic assets from financial institution balance sheets and sell to distressed debt buyers – who hope to generate a profit.

The PPIP distressed debt Fund Managers are all debt buyers.
Alliance Bernstein
Angelo Gordon
BlackRock
Invesco (WL Ross and American Home Mortgage)
Marathon Asset
Oaktree Capital
RLJ Western Asse
The TCW Group
Wellington Management Company

The program is generating profit – and IT IS NOT by making loan modifications. Clearly, the path of the toxic assets is gone from the original trust – and in the form of mezzanine and default tranches and credit swaps – now under the Legacy portfolio.

And, we will get an honest investigation by Mr. Ben Bernanke???? DO NOT THINK SO. Appears he may have condoned the foreclosure fraud practice.

Dying Truth – Really IMPORTANT POINT – if that is what you mean by “Conflict of Interest.” More need to be said about this – right now – while this in the spotlight.

Thanks.

8 Responses

  1. ANONYMOUS,
    The FED is a private corporation (NOT a government entity), while it may have no constitutional authority it is also UNDER NO OBLIGATIONS. Congress was delegated (from the People) the SOLE power to coin money not the FED. Everyone says “oh it’s the Fed it’s the Fed ohhhhh”. No it’s not, it’s all the de facto “israeli” citizens who hijacked and currently occupy all 3 legitimate branches of our government (while their disease spreads creating phony agencies to cause confusion) purporting to serve in the Peoples best interest all the while enabling the crooks to get away with their crimes by not doing anything to help and obstructing any REAL Justice by their continued “unlawful” occupation of our sovereign branches of authority refusing to step down so Americans can step up and take care of America’s problems, while they can go somewhere else and be useless there, but continuing to do it where they are right now they have become a serious THREAT to the safety and well-being of ALL AMERICANS their PERMANENT removal (all of them, every branch) from office is an absolute necessary condition that we as Americans must meat BY ANY MEANS NECESSARY. If not than we WILL lose everything and any chance at ever saving our country’s and our childrens’ and their childrens’ etc… future and will share the same dark fate as the Palestinians (whom right now literally face actual extinction)

  2. DyingTruth

    Yes – but allowing the Fed Res to investigate its own program – is also a conflict.

    Fed is even refusing to turn over TARP documents in Bloomberg lawsuit against them.

    Fed has to cover for the decisions they made at the onset of crisis. And, those decision included no help for homeowners.

    Fed has much incentive to keep things as is – and added to this, you are correct, is judicial self-interest.

  3. I’ll try to simplify again. Based upon recent developments, many people are coming to the logical conclusion that securitizers and those who originated the loans cut corners and skipped some of the most basic but very important procedures like PERFECTING THE SECURITY INTERESTS and properly transfering them into the trusts. They skipped these things so to avoid costs and any possible tax consequences and just used money from the investors to pay the loans off almost immediately (ponzi scheme hello) and made loan pools that had nothing in them but had the appearance that they did. Now down the road as things develope after pension funds bought into all of this facts like these start to surface and all these Public Pensions realize that their investments aren’t secured by anything. Now if Judges hadn’t invested their pensions in mortgage back securities and it came out in court that the banks were unsecured and would have to incur the loses, judges would be more inclined to say “well that’s the banks stupidity, too bad for them they don’t have the right to foreclose” because in reality that’s what it boils down to acording to the law. But the fact is judges and sheriffs did invest and they do have a financial stake(undisclosed mind you) in the outcome of every foreclosure case which they have had foreknowledge of to be illegitimate, unlawful and illegal. Which they know are unsecured(which is why they get soooo mad at the idea of FREE HOUSES because they know that they’re PAID FOR IN FULL) and they have in fact signed agreements indemnifying the partnerships which they hire to carry out these fraudulent foreclosures and evictions all the while playing the part of impartial public servants. This is where the Conflict of Interest lies, where the government employees who are in the position of power to make these decisions has the choice of letting people stay in their houses which nothing is owed on or hire corporate crooks(partnerships) to go and unlawfully seize all those houses so that they can be sold to recoup some of their “investment”. Which one do you think they would choose? See the Conflict?

  4. Fraud is Fraud and this government lives up to it’s expectations which is only to continue to cover up the fraud with any means necessary.

  5. Deb Wynn

    Thanks for the comment. Here is the fear I have – that the “one month” investigations by the Federal Reserve and FDIC – will conclude that all foreclosure documents are “in order.” Even though – no investigations of this magnitude can be concluded in one one month. Are we being “set-up” for false conclusions of law by the Fed or FDIC – that states the foreclosures are in order?

    It is the Fed that orchestrated the ‘PROGRAM” to remove toxic assets from the banks to distressed debt buyers. The Fed has always stated – the foreclosures must go through – and there should be no principal reductions – due to “moral hazard”. Will they go against their own program??

    Tim Ryan – CEO and President of SIMFA (Securities Industry and Financial Markets Association) – stated TODAY – that the foreclosure MUST go through. He states that “these people” are very delinquent – and there is no choice. He almost implied that foreclosures -are a herd of cattle – to be removed – and as quickly as possible.

    If Federal Reserve and FDIC come out of investigation claiming foreclosures are “in order” – we are in big trouble.
    Yet, no one but you responded to this post.

  6. Can anyone tell me if this FDIC final rule adopted Oct 8, 2010 regarding Securitizations affects the current slew of foreclosure legal issues and will give the lenders a “get of jail free” card to do what they want? see:
    http://www.mondaq.com/unitedstates/article.asp?articleid=112372&tw=0

  7. Makes AL Capone look like a choir boy

  8. Let’s not forget that Blackrock is one of the two largest backers of Pennymac, which was founded by the former executives of COUNTRYWIDE, and is the proud of owner of mountains of trash. I cannot conceive of how Blackrock was selected to advise our government on their “investments”. How can that NOT be conflict of interest???

Contribute to the discussion!

%d bloggers like this: