Securitization – The Undead Heart of The Shadow Banking Machine


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Editor’s Comment: 

The article below was written by David Malone of the Golem XIV: Author of the Debt Generation, website, and was submitted to this blog by ELLEN BROWN

Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are and  She is also chairman of the Public Banking Institute.

Securitization – The Undead Heart of The Shadow Banking Machine

At the centre of all debates about the Banking crisis, the shadow Banking system and the bank bail-outs is Debt. For a long time I have been arguing that what this debt is, is in fact a new, bank created, bank issued and ultimately bank debased debt-backed currency. And the collapse in value of this unregulated currency IS the crisis. Its cause and its logic.

In order to explain why I think this and why I do not think ‘fixing’ the banking system back to any semblance of how it was, just prior to the crash, will be anything other than a disaster, I have to explain how debt is turned into money. And how, clever as this process is, it also contains within it the seeds of its own undoing.

To do so I have to take you into the undead heart of the machine – securitization. Securitization is what animates the global financial and shadow banking system in whose shadow we now live. It is how modern finance turns debt into money. It is the impious alchemical dream of turning lead to gold, water into wine.

When Securitization was invented it soon wrested control of the money supply away from nations and gave it to the banks. Nations still printed and controlled their currency. But securitization gave banks the ability to print their own currency. And this new securitized currency, based on debt, was theirs to print, control, spend, and ultimately to debase. In short, it gave banks a power to rival nations. It is worth, therefore, understanding its outlines at least. Please don’t panic. Like most financial stuff its not nearly as difficult as the priesthood would have you believe.

So here we go into the hocus-pocus world of debt finance.

The Banker’s problem.

We start with a debt. It could be a loan extended to a corporation or a mortgage. We’ll go with a mortgage. A mortgage is a debt and a promise to pay that debt. This was the bedrock of traditional banking. The bank lent out cash in return for a greater amount to be paid back, but in installments over 25-30 years. Of course over the years there were risks of inflation and default if the debtor lost their job or died. These are ‘credit risks’ that were the stuff of traditional banking.

Traditional ‘credit risk’ banking was a slow business – and that was the problem.

All debts were ‘held to maturity’ (to the end of the mortgage) by the bank. All the debts/mortgages were therefore dead end deals. In that they generally did not, could not, lead to anything else. Money went out. A debt was held in its place and the money slowly came back. The bank’s profit came from what was and is called, ‘the spread’ between the rate of interest the bank charges on the money it has lent out and the interest the bank pays on the money it borrows. The main places the banks ‘borrowed’ was from central banks, from investors – either share holders or bond holders and most importantly from their own depositors. You can see that the scope for banks to grow in size wealth and power, was constrained by the rate of flow of real money in to the bank and the turn over of loans.

For banking to really grow the amount of money to borrow and the turn-over of loans had to be increased. Securitization did both these things. It cut the umbilical to an older gentler age.

The last hold-out of the barter system.

In a funny way banking was the very last hold out of the barter system. The bank gave you money – very modern – but in return you gave the bank a lien/a claim on your property. You bartered your house and a promise to give a steady stream from your income as collateral for cash. You got cash from the deal which you could spend – and used it to buy the property. But the bank did not get cash. In fact it got something it could not spend. It got an agreement to pay. And you if the debt defaulted then the bank got a house. Now that is barter.

The genius of securitization finally did away with the barter element of banking. It did so by turning mortgages (debt agreement) into money. Nothing short of modern alchemy.

This is how it works.

The key difference between debt and money is that you can spend money. So what do you have to do to debt to be able to spend it?

Three things: Standardize it and Guarantee it and when you have done these two, the third, Liquefy it, will follow of its own accord.

So first –

Standardize it

Think of a pocket full of coins. What makes them work is that they are all the same. Same metal, same designs, same issuer, same bank behind them, same value. Everyone knows what they are getting when they accept a standard coin. So everyone is happy to accept them knowing that the next person will also be happy.

Now think of a mortgage. Now imagine you have a pocket full of these. Which banks do. Each one is unique. Unique amount, unique collateral (the house) and unique credit risks of the particular person paying back the loan. The skill of the banker was to assess all these variables. The short-coming was that the end product was a pocket full of different and unique debt agreements. Like having a pocket full of different coins in different currencies. Very difficult to get people to accept random coins as payment.

Step one in securitization is to deal with that problem. Basically by melting the mortgages down to their base metal and recasting them.

And recasting them does one other critical job.  The problem with mortgages its that sometimes the borrower defaults and the bank loses some of the money it lent out. To put it in terms of our coin analogy, in every pocket-full there will be one which turns out to be a tin plug. But which one?

Securitization solves this problem.

The failure rate of mortgages, any loan in fact, is a matter of probability. Melting down and recasting the mortgages spreads the loss evenly. If you expect one mortgage in every hundred to default that would mean anyone buying a mortgage from you would have a one in a hundred chance of getting the one that will deafult and end up with a worthless piece of paper. But in securitization all hunderd mortgages are sliced in to an hundred peices and each securitiy gets one piece each from each mortgage. Now when that one in a hundred defaults the loss is evenly spread.

Suddenly there is no unknown. There is a mathematically expressible probability that the whole pool will lose one hundredth of its value. That is easy to calculate into the value/worth/price of the bundle. And one hundredth of that loss will turn up in each of the recast slices. Mortgages go in. Securities come out. Each made from the melted and recast value of all the mortgages in the pot. Each is stamped into the same form with the same worth. You have convert unique debt agreements into a standard coinage of known value. Suddenly you have a pocket full of money.

Standardizing is the first step towards inventing a new form of money. You have ceased bartering your cash in return for a dead end debt, and instead converted the debt back into money. And rather fabulously this money YOU control. The central bank doesn’t control how much gets printed. You do. All you have to do is print up debt agreements and securitize them. And you can potentially print as much as you like whenever you like. It really is a license to print money.

That is a security in its simplest possible form. But if you would like to be able to spend this money you have to now guarantee it. Step two.

Guarantee it

All money that isn’t actually made of gold or silver is actually a promissory note or debt. It is debt issued by the central bank and backed by the CB’s and the Nation’s promise to honour that note. Weird isn’t it. Here we are talking about how to turn debt to money. When all along it’s actually how to turn one kind of debt into another one. The difference between the two debts is how spend-able it is. How spend-able it is, is sometimes called its fungability or liquidity. I only mention this so you know what is really meant when bankers use these terms.

Anyway back to the chase. Money is money because it is guaranteed by the central bank and the state, to be always, 100% of the time, worth what the coin or note says it is worth and therefore will always be accepted as payment. The question here, is how exactly does this promise work? What is it the CB is promising to do.

We often hear CB’s referred to as the lender of last resort. In many ways it is better to think of them as a buyer of last resort. In the final analysis the CB promise and guarantee ultimately means the CB will itself accept those coins from you. So YOU will never be left holding a worthless piece of paper or scrap of metal. You need never fear being left with worthless coins because the CB which issues the stuff guarantees to accept them, buy them back from you. As long as everyone knows this then no one is afraid to accept and hold the stuff. And this is the Liquidity of realm money.

What the CB will give you in return for the money you eventually tender back to them, is another knotty problem. At the least we, the CB would say, will accept our notes and coins as payment for any debts you have. (Now I know this doesn’t make the problem go away. But don’t blame me for the short-comings of money. They were problems before I came along!)

So for the purposes of our discussion here, when you tender a coin for payment, no one is going to say to you, “Oh, no thanks. I don’t trust those things. Haven’t you got something else?”

Except, of course, when the credibility of that CB guarantee itself is called into question – sovereign default. When that happens the spend-able value of those notes and coins evaporates like a kiss on the wind. Which is exactly the risk the Bank bail-outs are forcing on us all. Just ask the Greeks, Latvians and Icelanders.

This problem of a guarantee is a serious problem for securitization and for the shadow banking system. Because the shadow banking system and the system of securitization does not have access to the Central Banks and their ultimate promise ‘to accept as payment’. For the simple reason that the CB did not issue the securitized debt/money. So why should they promise? They do, of course, accept some of the securities as collateral for getting a loan of ‘real’ money. But the promise-to-buy is not without conditions and can be withdrawn. Securitized debt-money does not benefit from the guarantee that the CB will be the purchaser of last resort for their currency. Thus securities are NOT guaranteed the way the CB’s own money is.

So the question is, what promise or guarantee could the bankers come up with to take the place of the CB promise? Who or what could be the buyer of last resort to stand behind their securitized money?

The answer is ingenious and/or foolish depending on your temperament and the situation. In ‘good’ times the answer works. The problem is in bad times it doesn’t. AT ALL.

But in good times, the answer is that the ‘market’ promises to be the buyer of last resort. Now of course the market is also the issuer as well. Which makes it rather circular. But as long as everyone in the market – the banks, money market funds, pension funds, rating agencies will accept the securitized debt as money then there is your promise. There is no promise by one single all powerful God who will redeem all promises. In place there is a promise that in a vast market there will always be enough buyers to buy and redeem whatever the market needs to move. Redemption without God. Good trick.

You standardize the debts, you guarantee someone will always accept them as payment and you automatically get the last ingredient for free – liquidity. And with liquidity the whole thing runs like a mighty river.

The point is that unlike the original debt we now have a tradable asset that is a kind of currency. The more readily it can be sold the more ‘liquid’ it is as an asset and the more it is like money/cash. Which is a good trick. Because debt is a dead end. Whereas cash is the open road.

So in place of a single God-like promise, there is a market of groomed and powdered god-lets who collectively have pretensions to being a god – and this ‘market god’ ‘guarantees’ that there will always be some god-let who wants to buy securitized debt. Now you can see where all the talk of ‘frozen credit markets’ comes from. What they are really saying is that the ‘market’s’, the god-let’s, promise, turned out to be good only as long as it wasn’t really needed, when times were good, but was worthless as soon as it was needed. That detail was presumably somewhere in the very small print.

And indeed down in the small print you find out that the undeclared complication running through all is RISK. It was there when I said ‘one in a hundred mortgages will default’. Seemed so reasonable when I said it, didn’t it? That was where the devil crept in. Who says it is always one in a hundred?

This is where we get to all the AAA rating stuff. This is where the dark side of securitization lurks.


66 Responses

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  4. Spire Law Grop lawsuit? Yah right! This lawsuit was potentially masterminded by a potential known scam artist that has been raided by the California Attorney Gerneal and arrested by the feds! It did not pass the bullshit test at

    Piggybankblog story:

    My name is John Wright AND I AM FIGHTING BACK!

    John Wright

  5. Lock and load is what cube2 may have done and where did that get him? And two innocent people doing what the frauds told them to do. If the man in Medesto kept working with the law, he may have gotten his house back eventually. A customer of mine was walked out by the Sheriff almost two years ago, and has been back in his house within 6t weeks due to the letters he sent them on unlawful foreclosure and unlawful sale at auction and equity loss. A $22,000.00 a month mortgage on an over three million dollar home. It was just recently put back in his name and the property taxes also. There is always hope,unless you are dead.
    Here are two cases to read well. They can not be both the creditor and the debt collector.

    Read carefully through both cases. They can not be both, the debt collector and the creditor. The letters come to all of us that they are the debt collector attempting to collect a debt. Not the creditor.


  6. @ Enraged

    “Isn’t that the definition of stupidity? Doing the same thing over and over and expecting each time a different result?”

    No, that’s not the definition of “stupidity”. That’s the definition of a “FOOL”.

    To be STUP ID, according to Freud, means that the “id” part of your mind is “numb”. The “id” is what drives your greed. It pushes you to get up, go out and to acquire. Like, getting up going to work every day.
    The opposite is when it gets out of control and subverts your “ego” and “super ego”. Then you hunger for power over others to KEEP your greed satisfied. Remember the cartoon series “Pinky & The Brain”? – “RULE THE WORLD!”. That’s the “id” out of control.

    There’s ONLY ONE WAY to protect yourself from people or groups of people who are controlled by their “id” – and this one way was granted to all American citizens by our forefathers in our Constitution – the right to bear arms to protect ourselves from an over reaching government – LOCK & LOAD!

  7. Does the lawlessness in this video sounds similar to our attempts to have our due process for our mortgages?

  8. Eric Sneiderman pushing the banks are at fault and not the homeowners and we deserve more help than we are getting! AMEN!Never give up there is always hope. I know personally of people whom have gotten their house back after foreclosure. My sons foreclosure was just withdrawn and so was one of my customers, whom has been in his house for a year and a half or more, after being walked out by the sheriff back then. Dont give up! Join Neils firms lawsuit and win this battle against this crime.

  9. When the judges sit on the bench, it is the same as the judges sit on the bank. Perhaps this is the confusion. They are judging for the bank/bench and not the U.S. Constitution.
    Elite: From the Latin elire, meaning “to choose … Bank: The term is derived from banco, the Italian word for bench …
    Definition of Bench – BrainyQuote – Famous Quotes at BrainyQuote mean, to be able to sit on the bench so patiently, for whatever part, and to be able to get … bench in German is Labortisch, Sitzbank, Bank, Richter, Bank bench in Latin …
    Origin Of The Word “Bank” – Read Books ……/Origin-Of-The-Word-Bank.htmlThe word bank is commonly regarded as derived from the Italian word banco, a bench – the Jews in … with the Italian monte (Latin mons, metritis), a mound, heap, or bank …
    bench legal definition of bench. bench synonyms by the Free … Latin Bancus, used for tribunal. In England there are two courts to which this … Banc or bank bar bar of justice bench warrant board Breese, Sidney Bryant, William …
    rupt-, -rupting, -ruption – Word Information, in Latin, means “to break, to burst … The Latin word for such a bench, banca, is in fact the source for the English word bank.
    We need to change their bench/bank to a clear stool with a copy of the bible & the U.S. Constitution enclosed in the stool.

    This article claims 42 presidents are related to the Rothchild family.

  11. ANONYMOUS- was then the difference between GSE debt sold, and that ‘held for investment’ only superficial? I understand that the GSEs were holding the higher-yielding debt (more predatory, more poorly underwritten) for their own porfolio. And the debt they bundled and sold was more compliant. Am I in error here? Please explain the difference, if there was one. And if there wasn’t a difference, explain that also.

  12. The “pool” was composed of already classified default/non-compliant/non-qualifying debt. Security investors invested in cash flows to default debt. Layers of tranches was supposed to increase the ratings— that was the intent.

    Trigger event caused total collapse of the entire set-up. No further issues. Securitization of default debt (subprime) is over. Back to qualifying mortgages only. Problem is — subprime borrowers though they got a valid mortgage.


  14. May 1st will, indeed, be a day to remember worldwide. Demonstrations, strikes, prpotests are planned in the entire world, including Russia, China, most of Europe and… here. Do your part: spread the word and take action.

    Activists Breathe New Life Into May Day
    Peter Dreier April 27, 2012 Share |
    Unlike the rest of the world’s democracies, the United States doesn’t use the metric system, doesn’t require employers to provide workers with paid vacations, hasn’t abolished the death penalty, and doesn’t celebrate May Day as an official national holiday.

    About the Author
    Peter Dreier
    Peter Dreier teaches at Occidental College and is author of the forthcoming The 100 Greatest Americans of the 20th…
    Also by the Author
    Help Stop Pomona College’s Outrageous Anti-Immigrant Actions (Activism)
    The National Labor Relations Board has leveled charges against the College for violating federal labor law.

    Peter DreierIs the Perfect Factory Possible? (Sweatshops, Wages and Hours, Working Conditions)
    Anti-sweatshop activists are embracing Alta Gracia, a company that is going head-to-head with brands like Nike to sell socially responsible clothing on college campuses.

    Peter Dreier 4 comments Related Topics
    America Company Labor Issues Major May Day Social Issues War Outside the U.S., May 1 is international workers day, observed with speeches, rallies, and demonstrations. Ironically, this celebration of working class solidarity originated in the US labor movement in the United States and soon spread around the world, but it never earned official recognition in this country. Since 2006, however, American unions and immigrant rights activists have resurrected May 1 as a day of protest. And this year, in the wake of Occupy Wall Street and the rebirth of a national movement for social justice, a wide spectrum of activist groups will be out in the streets to give voice to the growing crusade for democracy and equality.

    The original May Day was born of the movement for an 8-hour workday. After the Civil War, unregulated capitalism ran rampant in America. It was the Gilded Age, a time of merger mania, increasing concentration of wealth, and growing political influence by corporate power brokers known as Robber Barons. New technologies made possible new industries, which generated great riches for the fortunate few, but at the expense of workers, many of them immigrants, who worked long hours, under dangerous conditions, for little pay.

    As the gap between the rich and other Americans widened dramatically, workers began to resist in a variety of ways. The first major wave of labor unions pushed employers to limit the workday to ten, then eight, hours. The 1877 strike by tens of thousands of railroad, factory, and mine workers – which shut down the nation’s major industries and was brutally suppressed by the corporations and their friends in government – was the first of many mass actions to demand living wages and humane working conditions. By 1884, the campaign had gained enough momentum that the predecessor to the American Federation of Labor adopted a resolution at its annual meeting, “that eight hours shall constitute legal day’s labor from and after May 1, 1886.”

    On the appointed date, unions and radical groups orchestrated strikes and large-scale demonstrations in cities across the country. More than 500,000 workers went on strike or marched in solidarity and many more people protested in the streets. In Chicago, a labor stronghold, at least 30,000 workers struck. Rallies and parades across the city more than doubled that number, and the May 1 demonstrations continued for several days. The protests were mostly nonviolent but they included skirmishes with strikebreakers, company-hired thugs, and police. On May 3, at a rally outside the McCormick Harvesting Machine Company factory, police fired on the crowd, killing at least two workers. The next day, at a rally at Haymarket Square to protest the shootings, police moved in to clear the crowd. Someone threw a bomb at the police, killing at least one officer. Another seven policemen were killed during the ensuing riot, and police gunfire killed at least four protestors and injured many others. After a controversial investigation, seven anarchists were sentenced to death for murder, while another was sentenced to fifteen years in prison. The anarchists won global notoriety, being seen as martyrs by many radicals and reformers, who viewed the trial and executions as politically motivated.

    Within a few years, unions and radical groups around the world had established May Day as an international holiday to commemorate the Haymarket martyrs and continue the struggle for the 8-hour day, workers’ rights and social justice.

    In the US, however, the burgeoning Knights of Labor, uneasy with May Day’s connection to anarchists and other radicals, adopted another day to celebrate workers rights. In 1887, Oregon was the first state to make Labor Day an official holiday, celebrated in September. Other states soon followed. Unions sponsored parades to celebrate Labor Day, but such one-day festivities didn’t make corporations any more willing to grant workers decent conditions. To make their voices heard, workers had to resort to massive strikes, typically put down with brutal violence by government troops.

    In 1894, the American Railway Union, led by Eugene Debs, went on strike against the Pullman Palace Car Company to demand lower rents (Pullman was a company town that owned its employees’ homes) and higher pay following huge layoffs and wage cuts. In solidarity with the Pullman workers, railroad workers across the country boycotted the trains with Pullman cars, paralyzing the nation’s economy as well as its mail service. President Grover Cleveland declared the strike a federal crime and called out 12,000 soldiers to break the strike. They crushed the walkout and killed at least two protestors. Six days later, Cleveland – facing worker protests for his repression of the Pullman strikers – signed a bill creating Labor Day as an official national holiday in September. He hoped that giving the working class a day off to celebrate one Monday a year might pacify them.

    For most of the 20th century, Labor Day was reserved for festive parades, picnics, and speeches sponsored by unions in major cities. But contrary to what President Cleveland had hoped, American workers, their families and allies, found other occasions to mobilize for better working conditions and a more humane society. America witnessed massive strike waves throughout the century, including militant general strikes and occupations in 1919 (including a general strike in Seattle), during the Depression (the 1934 San Francisco general strike, led by the longshoremen’s union; a strike of about 400,000 textile workers that same year; and militant sit-down strikes among autoworkers in Flint, Michigan, women workers at Woolworth’s department stores in New York, aviation workers in Los Angeles, and elsewhere in 1937), and 1946 (which witnessed the largest strike wave in US history triggered by pent-up demands following World War Two). The feminist, civil rights, environmental, and gay rights movements drew important lessons from these labor tactics.

    Meanwhile, May 1 faded away as a day of protest. From the 1920s through the 1950s, radical groups, including the Communist Party, sought to keep the tradition alive with parades and other events, but the mainstream labor movement and most liberal organizations kept their distance, making May Day an increasingly marginal affair. In 1958, in the midst of the Cold War, President Dwight Eisenhower proclaimed May 1 as Loyalty Day. Each subsequent president has issues a similar proclamation, although few Americans know about or celebrate the day.

    In 2001, unions and immigrant rights groups in Los Angeles resurrected May Day as an occasion for protest. The first few years saw rallies with several hundred participants, but in 2006 the numbers skyrocketed. That year, millions of people in over 100 cities – including more than a million in Los Angeles, 200,000 in New York, and 300,000 in Chicago — participated in May Day demonstrations. The huge turnout was catalyzed by a bill, sponsored by Rep. James Sensenbrenner, Jr., (R-Wisconsin), that had passed the US of Representatives the previous December, that would have classified as a felon anyone who helped undocumented immigrants enter or remain in the U.S. In many cities, the protest, which organizers termed the “Great American Boycott,” triggered walkouts by high school students and shut down businesses that depended on immigrant workers. Since then, immigrant workers and their allies have adopted May Day as an occasion for protest.

    America is now in the midst of a new Gilded Age with a new group of corporate Robber Barons, many of them operating on a global scale. The top of the income scale has the biggest concentration of income and wealth since 1928. Several decades of corporate-backed assaults on unions have left only seven percent of private sector employees with union cards. More than half of America’s 15 million union members now work for government (representing 37 percent of all government employees), so business groups and conservative politicians have targeted public sector unions for destruction. The past year’s attacks on teachers, cops, firefighters, human service workers, and others public sector workers in Wisconsin, Ohio, and elsewhere – the most ferocious anti-union crusade in decades – have catalyzed a tremendous sense of urgency among union workers and millions of other Americans who’ve seen their standard of living plummet while the richest Americans and big business plunder the economy.

    The Occupy Wall Street movement’s success can be measured in part by how public opinion has changed about such issues as corporate profits, widening inequality and excessive executive compensation. By last December, two months after the first occupations at Zuccotti Park, 77 percent of Americans—and 53 percent of Republicans—agreed that “there is too much power in the hands of a few rich people and corporations,” according to a Pew Research Center survey. The Pew study also found that 61 percent of Americans believe that “the economic system in this country unfairly favors the wealthy” and that 57 percent think that wealthy people don’t pay their fair share of taxes. Most of these people won’t be found protesting in the streets, but the nation’s changing mood clearly influences what candidates for office and elected officials think they need to do to satisfy public opinion.

    This year, in the wake of Occupy Wall Street, and in the midst of a presidential election contest, activists from around the country are ramping up the May Day festivities.

    Feeling a new wave of anger and activism among their rank-and-file, unions will be taking to the streets this May Day. In Los Angeles, for example, the County Federation of Labor will augment the downtown immigrant rights rally with a series of protest actions led by different unions and their allies. The Teamsters will sponsor a demonstration at a waste sorting facility owned by American Reclamation, which is infamous for treating its immigrant workers like garbage. The action is part of the Teamsters campaign, in partnership with environmental and community groups, to not only organize workers in recycling plants but also to push the city government to regulate waste collection and recycling. UNITE HERE will bring thousands of hotel workers to Long Beach, where they are organizing several nonunion hotels, to rally and collect signatures for a “living wage” ballot measure. Supported by SEIU, LA’s 8,000 unionized janitors, who will be out in force to demand a better contract from the mega-corporations that own the area’s office buildings, may announce a county-wide strike on May Day. SEIU’s airport workers affiliate will be spending May Day engaged in protest and civil disobedience at Los Angeles International Airport to challenge efforts by major airlines to jeopardize employees health and safety.

    In April, a coalition of unions, environmental groups, community organizing networks — including National People’s Action, PICO, the Alliance of Californians for Community Empowerment, Jobs with Justice, National Domestic Workers Alliance, Rainforest Action Network, SEIU, United Food and Commercial Workers, AFL-CIO, Communication Workers of America, MoveOn, Unite Here, Common Cause, the Steelworkers union Public Campaign, Public Citizen, Health Care for America Now, the United States Students Association, and others – began a series of protest actions major banks and corporations, and trained close to 100,000 new recruits in civil disobedience tactics.

    In April they showed up (and some got arrested) at Cigna, General Electric and Wells Fargo shareholder meetings. In the next month, they plan to make their voices heard at Verizon, Bank of America, Hyatt, Tesoro, Sallie Mae, Wal-Mart and other corporate annual meetings. They will commemorate May Day with actions at several corporate headquarters and stockholder meetings as part of this ongoing “99% Spring/99% Power” campaign that will continue throughout the summer and into the election season with demands that corporations pay their fair share of taxes, big banks end the epidemic of foreclosures and reduce “underwater” mortgages to their fair market values, and that banks and Congress unleash college students from unprecedented debt from student loans. By keeping the heat on, and gaining visibility, they hope to inject these issues into the upcoming election season.

    The Occupy movement will relaunch its protest actions with May Day actions. Occupy affiliates in some cities have called for a May Day “general strike” to demand jobs for all, immigrant rights, a moratorium on foreclosures, and recognition of housing, education and health care as human rights. Although talk of a nationwide general strike is certainly premature, many Occupy activists will join with unions and community groups this spring and summer as part of broad mobilizations to take advantage of the nation’s growing “99% vs. 1%” mood.

    “It was mostly immigrants who led the first May Day movement for the 8 hour day. Now a new generation of immigrant workers have revitalized and brought May Day back to life,” observed María Elena Durazo, the feisty head of the Los Angeles County Federation of Labor who enthusiastically embraced the Occupy movement in her city. “Progressives around the country, working on all kinds of issues, have embraced the new May Day movement. It isn’t just about immigrant rights. It isn’t just about workers rights on the job or even about raising the standard of living for all workers. It’s about what kind of country we want to be.”

  15. Saturday, 28 April 2012
    May 2012 – a good month for rising up

    MAY 2012 looks set to be another big month for the global uprising against neoliberalism.

    May 1 itself is, of course, a traditional day of protest, with demonstrations and strikes expected all across the world.

    More specifically, Occupy Wall Street have called for May 1 blockades of New York bridges, tunnels and ferries.

    Said a statement: “We are announcing these blockades now as a fair warning to the rest of the working people of New York and New Jersey who are considering joining the strikes and mobilizations of the day: the city will be shut down, so enjoy the day without the 99%!”

    In the UK the Bristol First of May Group says: “This is a national call-out for a week of anti-capitalist action, events and celebration throughout the UK in the first week of May 2012 to show resistance to capitalism and remember all those workers who lost their lives for a better life for us all.

    “Beneath the road, the banks, the shopping malls and prisons lies the Beach, Behind the politicians, the bureaucrats, the cops AND the robbers lies Freedom, Outside wage and debt slavery, false democracy, capitalism and state control lies our Future.”

    Spanish indignados are calling for people across the world to take to the streets on May 12 and May 15.

    And this call has also been echoed in the UK with this statement: “Occupy London is set to strike back this May as people around the world take to the streets to mark one year since the indignados reclaimed their squares in Spain and Greece, and six months since the Occupy movement went global.

    “The next wave is about to begin. Put May Day, 12 May and 15 May in your diary.”

    The rebellious season got off to an early start in Brighton, UK, where anti-fascists took to the streets on April 22 to oppose an extreme right march in the city and successfully delayed it and diverted its route, building barricades to block streets.

  16. Oh! And by all means, do fight your foreclosure. The right way. If you do, you have a crack at winning and it’s all good.

    Humanity is a 25th-hour kinda species. We’re faced with a lot. Takes us a while to handle it all.

    Just don’t declare over and over again that you don’t have a prayer. That’s called a premonition. Just the thing losses are made of.

  17. Securitization? A real picnic. Fight your foreclosure and you’ll be alright. Because whether you do or don’t makes no difference: the real battle is on going. Do we go with or without nuclear?

    My kind of news.

    Imagine a Nuclear-Free California (It’s Already Here)
    By: Gregg Levine Friday April 27, 2012 6:17 am

    We welcome our salp overlords. (photo: Lars Plougman via Wikipedia)
    California has two nuclear power plants. San Onofre, between Los Angeles and San Diego, has been offline for months as everyone tries to find an excuse for the alarmingly rapid wear on new reactor tubing. (Being shut down, however, did not prevent a fire from breaking out this week when a pipe ruptured and released radioactive steam.)

    But as of Thursday, Diablo Canyon, the nuclear plant to the north, is also offline–thanks to. . . uh, salp?

    Yes, salp–those loveable, gelatinous, jellyfish-like, plankton-eating sea creatures that multiply like, well, salp–have swarmed Diablo Canyon’s water intake system. D-Can draws in tens of thousands of gallons of seawater every day to cool its reactors, and with all that salp clogging the intake pipes, the plant could no longer operate safely.

    That may sound like a freak event, but it isn’t. San Onofre had to shut down in 2005 to clear out 11,000 pounds of anchovies that had the bad luck of swimming too close to that plant’s intake filters. . . and in 2004, it shut down, too, but that time it was due to 14,000 pounds of sardines.

    And just last year, actual jellyfish (sorry, salps) brought down Florida Power & Light’s St. Lucie nuclear power station. Jellyfish have also previously crippled nuclear facilities in the UK, Israel and Japan.

    But back to California, where without nuclear power, the state is heading for a disaster of biblical proportions–we’re talking human sacrifice, dogs and cats living together, mass hysteria!

    Actually, no. What will happen is that Pacific Gas & Electric, the owner of Diablo Canyon, and Southern California Edison, San Onofre’s operator, will have to buy electricity (or continue to buy electricity) in order to deliver what they are obligated to deliver. That’s no fun for the big utilities, and maybe it looks biblical to the bean counters, but it is not an energy apocalypse.

    Of course, instead of throwing millions after billions to buy surplus electricity elsewhere while also paying to staff, examine and repair its dormant, ancient nuclear facilities, power companies could try to invest more in 21st century renewable alternatives.

    And maybe that would happen if the market were actually, you know, a market. But with tax breaks, loan guarantees, and liability caps, the industry has little motivation to make sound financial or environmental decisions.

    But there’s no time like the present to start. And right now, in California, that present is nuclear-free.

    A little bit pregnant?

    On Thursday, NPR’s Richard Harris delivered a report that regurgitated the nuclear industry’s latest message morph–once “clean, safe, and too cheap to meter,” the 21st Century PR spin has nuclear as the climate-friendly energy option.

    The radio piece is ostensibly about how the world’s industrialized nations are failing to meet their climate goals–and this is true (and this is a problem). But Harris does the world and the climate cause no favors when he lazily posits: “Nuclear power produces very little carbon dioxide. . . .”

    What does Harris mean by “nuclear power produces very little carbon dioxide?” Is that supposed to be a hedge? If you are isolating the atomic pile generating heat to boil water inside a closed system, then you might as well say “no CO2,” but if you are honest and take into account the whole lifecycle of nuclear fuel–from mining and refining through transportation and storage–then nuclear power produces a prodigious amount of greenhouse gases. Which is it Richard?

    Probably just an oversight

    The Washington Post published self-serving letter to the editor supporting a recent pro-nuclear editorial, but neglected to include that the letter was written by the current vice president and president elect and sitting member of the board of directors of the unabashedly pro-nuclear American Nuclear Society.

    If only Nixon had apologized!

    Fukushima Governor Yuhei Sato apologized Wednesday for prefectural officials who deleted records on the spread of radioactive fallout immediately following the start of the Daiichi nuclear crisis in March of 2011. The data from the country’s System for Prediction of Environmental Emergency Dose Information (SPEEDI) could have better informed citizens on when and where to evacuate during the first days after the Tohoku quake and tsunami destroyed safety systems at the Fukushima Daiichi nuclear power plant, and could have also given those trying to piece together what happened inside the reactors important forensic evidence.

    At a news conference, Sato said, “A big problem lies in the fact that we failed to fully share the information soon after the nuclear disaster broke out.”

    Well, yeah, that–and that you erased it.

    Not to worry though, the government “reprimanded” its supervising officials and also “issued strong warnings” to the two government employees that actually did the deleting. So, citizens of Northern Japan, we’re good?

    “Let’s Eat Cesium Beef”

    That is (as translated EXSKF) the name of an event in Iwate, Japan designed to encourage people to eat local beef known to be contaminated with radioactive cesium from Fukushima’s fallout.

    No, this did not appear in a Japanese version of The Onion (Tamanegi?), this a real event as reported by Kyodo News in a series called “New Happiness in Japan.” Apparently, happiness is knowing you’re only poisoning your children a little bit. . . because there were kids at this thing.

    The event was, uh, cooked up by the head of a meat-packing company to show a group of his regular customers–including young couples with kids–that beef containing radioactive cesium, but at levels lower than the provisional safety limits, still tasted OK.

    According to the source of the translation, this story has people all over Japan shaking their heads wondering what this meat packer could have been thinking, but there have been several stories over the past year documenting even more official Japanese government efforts to get citizens to consume agricultural products from Fukushima and surrounding regions.

    Imagine a nuclear-free Japan

    Soon, you won’t have to imagine that, either. The last of Japan’s 50 commercial reactors still online will soon shut down.

    Wait? Fifty? Wasn’t it 54? Well, earlier this month, Japan removed the four damaged reactors at Fukushima Daiichi from their official list of the country’s commercial reactors.

    Probably wise.

    Oh, and, notice, also no mass hysteria. The radiation that has contaminated air, water, and land might have many Japanese very worried, but the country has managed to handle the reduced electrical generating capacity remarkably well. They did this thing called “conservation.” Been doing it for over a year now. Think of all the dogs and cats that have been spared. . . not to mention the salp.

  18. It is nice to be comforted that the trustworthy banks will give honest reports to the stock holders. However I am not that trusting and have an email into Richard Galanti the vice president of Costco that should raise his hair.

  19. Well the government is getting closer to the onethousand fbi investigators in the 1980″s, for a tenth of the crime, they have now gone from approx 100 to 110 WEEEEEE we are on our way! [NOT] Things are looking up and still pretty stupid!

  20. People believe the lies, they are underwater more than they know. They dont even legally own the houses. The whole thing is a crime. I second the NO SHIT SHERLOCK COMMENT.

  21. I definately support the 99% and the tea party. I believe they are pretty much merging together. I sure would like to see Ron Paul in office. I dont beleive the vote matters, it is all corrupt. However I do vote and encourage everyone to vote, My vote will not be for Mit nor Obama. They are the problem not the solution. I am praying with all my heart this does not become a blood bath. And people that are in high positions are investigating and stopping this crime. There are people being arrested.

  22. @Shelley,

    What is scary is not the taking of property: we were born without it and we’ll die without it. And dying, we will: comes with being born. No escaping it. Property is a loaner while we’re here. What is scary is humanity’s curse of repeating over and over the same thing and not learning one bit from it. Isn’t that the definition of stupidity? Doing the same thing over and over and expecting each time a different result?

    OWS and Tea Party are joining forces. Unlikely union a year ago. Now it’s a reality. Let’s concentrate on that and giving them support, shall we? One thing I have learned: we can be part of the problem or part of the solution.

    Right now, the solution appears to be there. It’s not with Obama, it’s definitely not with Romney (can’t trust anyone who won’t take a stand. in that respect, Obama is still the lesser of two evils) it’s not with the Feds, it’s not with our court system (I don’t think anyone of us has time to wait for the court system to realize what is going on…). So, if the solution isn’t with them, it’s got to be with us, right?

    Joined the 99 yet?

  23. DyingTruth,

    I won’t try to pick a fight but… the Versailles Treaty (referred to as “Diktat”) imposing huge sanctions and reparations to the German people after WWI, coupled with the parachutting of tons of German money by the English and the… American pilots are what caused the Weimar Republik to crumbled under the enormous weight of inflation and complete economic collapse. That, in turn, caused the people to lose everything, including any trust in government and led to Hindenburg’s electoral defeat to Hitler and we know the rest.

    That being said, whether it is dumped on the people by planes or printed by the billions by the Feds, when money is no longer backed by any economic reality (production, purchases and sales), those who have truck loads of it live well while those who don’t struggle until they revolt. I believe this is where we currently are. History repeating itself.

    I don’t think we have to look to Zionism for our problems and denying the existence of concentration camps is counterinformation. Labor camps were camps where Europeans were sent: there was some humanity and the Germans did the minimum required to keep prisoners alive. It’s not the case for concentrations camps where Russians, Poles, gipsies and Jews alike were simply decimated. True: more Russians died there than any other ethnic group. True too that England and America were incredibly misguided to re-create artificially a country that had been lost fair and square in one-too-many of its never-ending wars (read the Old Testament: all Israel ever did was fight!!!), especially with the opposition of all other members of the UN.

    More than that, assuming that Zionism had anything to do with it, go back to how the Jewish people was treated for over 1,500 years all over Europe, starting with the Catholic church excommunication of them (for having “killed Christ”) and forbade them the right to own any land (hence to produce their own food and provide for their families) and what followed in Central Europe (no one can deny that pogroms were routine) and you have the making of a vengeful people. Can’t blame them for acting out their anger. Look at what America did with the natives.

    Time is not to finger-pointing but to finding solutions, revolting, forcing change and moving on. Otherwise, we’ll all be condemned to reliving over and over the same horror stories. I’m not interested. Is this what you want?

    Have you joined the 99?

  24. Dying truth, I forgot to answer YES! I know this is what happened to Christians and Jews in Russia and Germany. The taking of their property and belongings is parallel to what is happening right now. Scarey stuff. Frightening ! Especially with 800 American Concentration camps empty waiting for us..

  25. Dying Truth, It seems that all the big banking families were a part of this. I was just commenting on Deutsche bank, JP Mogan Chase is linked and so is the Bush family, the Rothchilds, and many more families and corportations, like G.E. and many more. Bush Sr Sr, the great grandfather of the last Bush, was in the middle of it all and went to work as a CEO for BOA when he fled Germany. Seems that most of the Cabal is related and intertwined with a good share of the presidents of the United states. Look on Wikepedia, Obama is a fifth cousin to Bush. Licoln is related to the illumiati royal family, and they are all related to the queen of England. At least there is a lot of articles stating so. I just spent a couple of days watching the fifth and seventh and nineth cousin relationship to all the royal family. Including princess Diane was a cousin to Prince Charels.

  26. Shelley A. Erickson,
    You touched on a subject which needs to be illuminated (Germany). I’ll start with the end of your comment. Did you know, that the German People had all their property taken from them the same way it’s happening to us and that it’s more or less being taken by the same people using the same methods (Usury etc.)? Next, ‘Gas’, you must be referring to the delousing chambers where zyklon-b was used as a pesticide to sanitize the clothing and linen that the jewish inhabitants wore and used so they would not get infected by any tyhus (a rampant and deadly plague at the time) carrying fleas or ticks while they worked there in the LABOR CAMPS.

    After Allied forces defeated Germany and the International Red Cross was able to conduct an investigation into how so many jews had died in the LABOR CAMPS, which concluded with and I quote “THERE WAS NO EVIDENCE OF GENOCIDE” by the Germans (Russians however not so innocent). They found that the leading cause of Death was the TYPHUS EPIDEMIC.

    So the bank funded Hitler? Who ran the bank? You know who else funded Hitler? The Rothschild family, the very same family which was responsible for creating Israel. Here’s another shocker 4 u, Did you know that Hitler and the ‘Nazis’ were Jewish (there’s even DNA Proof for Hitler)? Do you know where the name ‘Nazi’ comes from? AshkeNazi which is used to to categorically describe the Jewish population which was native to Germany.

    And do you know who officially started that war? Google ‘Judea Declares War On Germany’. Did you know that the Zionists’ plot was a boycott campaign on all German exports (which Germany depended on heavilly to provide food for its people) with the intention on STARVING THE ENTIRE GERMAN POPULATION. You should be able to recognize (if u paid attention to world affairs) this is a modern weapon utilized by Israel, they do it to the Palestinians and to Iran and Syria (via Sanctions using us as their proxy) and soon enough they will be doing it to us as they guide us down the same or similar paths that Russia and Germany were led down and commit atrocities accross the globe in our name but for their benefit via the stanglehold that AIPAC holds on every aspect of our political proccess.

    One of the main goals of all of this by the Zionists, is to create such a hostile environment for Jewish People living in America (I’m part Jewish by the way), that they’ll likely see moving to Israel as the only viable option. Thus, helping Israel increase and expand its rapidly growing undeclared borders for a ‘Greater Israel’ that streaches from the Nile to the Euphrates.

    PS In all factual honesty, Jews were victims of a Holocaust (literal translation: Burnt Offering) in Germany. Only it happened a full 300 years (during the Black Death) befor Hitler’s rise to power and over 200 years before Germany was even a country (what’s interesting is that they never bring it up, even though it is way more documented). What is known as the (original) St. Valentines Day Massacre was a violent reaction by the masses all over Europe which started in Strasbourg in response to one Jew’s confession and implication of other Jews who also confessed to having intentionally poisoned the public drinking wells that everyone but them drank from. As a result, Jews all over Europe were rounded up, beginning in Strausbourg on February 14, 1349 and were burned to death in the public squares of major towns where children were baptized and spared being burnt alive.

  27. Anon you are incorrect … there is a loan well documented between Trustee(Underwriter)/Investor Wells Fargo Bank NA and BUYER/SELLER.

    You promised servicer you’d advance cash for 30 years at x% monthly – mortgage servicing rights are commodities notes not loans

    When you default sale of the new mortgage servicing rights creates new commodity …

    and the beat goes on… and on …. and on ……

  28. Shelly why do you use ‘clouded titles’ ?

    Term is encumbrance, which is endorsement

    If COSTCO is investor, they will receive the prive credit reports created especially for trustees and/or investors buyer/seller

  29. Investopedia explains ‘Shadow Banking System’
    Definition of ‘Shadow Banking System’

    The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight.

    The shadow banking system also refers to unregulated activities by regulated institutions.

    Examples of intermediaries not subject to regulation include hedge funds, unlisted derivatives and other unlisted instruments.

    Examples of unregulated activities by regulated institutions include credit default swaps.

    The shadow banking system has escaped regulation primarily because it did not accept traditional bank deposits.

    As a result, many of the institutions and instruments were able to employ higher market, credit and liquidity risks, and did not have capital requirements commensurate with those risks.

    Subsequent to the subprime meltdown in 2008, the activities of the shadow banking system came under increasing scrutiny and regulations.

  30. I wasnt hoping they would get involved with messy mortgages, just the savings and check accounts part of banking business.

  31. I am pretty worried for Costco stock holders and the people running Costco to be involved with mortgages now. Some of my family members help run Costco and they all have Costco Stock incuding my cousins and uncles. I am sure Costco is totally oblivious to the mortgage mess and the crime behind it, or they would not be getting into mortgages with clouded titles. This could be a real downfall for Costco. I have wished and even exspressed to my family members that I wish Costco would get into the banking business, to give opportunity of honest banking to their members. This could be catastrophic to Costco.

    You can also look up Duetsch Bank linked to the Auschwitz death camps. This bank funded Hilter, the death camps, arms on both sides, and the gas & stole the property from the people.

  33. The way of life we enjoyed in the U.S. prior to the capture can’t possibly be restored until the criminals are rounded up, tried, prosecuted, and given prison terms, along with the stripping of their wealth and holdings, onshore and off. The obvious obstacle to this is that the criminals in question reside in the highest positions of both government and what used to be respectable institutions.

    The major antagonists here, the financial institutions, are still enjoying the mindless patronage by the masses, which are blissfully unaware that they’re feeding the beast that’s gnawing at the body of the nation. It will have to get a whole lot worse before it can get even a little bit better. How else could you explain to the average citizen that the president of the United States and each and every advisor around him should be tried for crimes against humanity? What will it take for that social epiphany to occur, total collapse? I’m afraid so.

    Whether or not it was cubed2k, there’s still a major story there. The fact that someone who was a productive member of society who played by the rules as taught him from childhood, who was still trying to scrounge out a living to care for, or at a minimum, protect his family speaks volumes about how far we as a nation have slid into the abyss.

    Should any institution that reaps vast rewards off of the misery of lack, given today’s circumstances, be allowed to profit even by a penny? Should the very same institutions that caused people like cube2k’s inability to pay for the basic necessities of life such as spiraling food and gas costs, while losing the other most basic necessity, that of housing, be allowed to earn any profits whatsoever on the miseries that they’ve created? Payday loans? FICO? Give me a fucking break! This situation could not possibly be more unbalanced and inhumane.

    Does anyone really believe that the administration and congress can be so cut-off from the realities on the ground outside of the beltway that they can continue to feign ignorance so long after the warning sirens first went off years ago? I call bullshit on each and every one of them. They are not unaware of the problems….they are the Great Enablers. To seek answers or help from those in power is the very definition of Stockholm Syndrome. They should be asking us for mercy, not the other way around.

  34. Enraged,
    Wanting to faithfully believe in our Gov. and NEEDING to realize that, when push came to shove and EVIL made its move the one thing that would ensure victory, that (allegedly) GOOD men (ie the dipsh*ts in power et al.) do nothing is exactly what occured, and any or all other choices in between, that people will make, is what will seperate those who are confused and those who are focused on survival.

    Still no Cubed2k huh? I wish and I’m sure everyone else here wishes that he’s just taking a breather and that wasn’t him in that unfortunate accident. But you and I both know, that it was him. Because even though I hadn’t read LL in a while (well I mostly read everyones comments and hardly ever the articles, unless they’re somewhat constructive) and something drew me right to your comment. Which u made because of a gut feeling, right? Well, I picked up on it and my instinct told me u were right and in an attempt to disprove our fears (4 the sake of reasonable doubt) by finding unmatchable facts from Cubed2k’s comments and that of Ferrario’s situation, I failed. (But, like I said, I had a feeling)

    Now, once you come to grips with this, u should learn to embrace your instincts and STOP BELIEVING IN FAIRY TALES. The only reason why banks are a problem for us, is the gov is at the plate and insted of swinging at pitches and helping us beat the banks it’s flirting with the catcher.


    To All the BloodSucking Bureaucrats Running PeeWee’s PlayHouse:

  35. Great points, Nora and If…

    I too was a little dismayed by the Ellen Brown piece. She makes some really great points, like pointing out that our “money” is backed by debt. That statement seems farcical, and it should, because when you think about it, how can money be debt? The two concepts are antithetical to each other. But we have given the banks the divine right of money creation, just like we used to give the divine right of governing to kings. The divine right of money creation should go in the dustbin of history just like the divine right of kings did.

  36. stealing homes?

  37. Did Ellen actually say the banks loaned “money” ? She can’t be serious. They never loaned any money. They create the “money” from thin air and key strokes on a terminal. Debt creates the “money” and debt also creates excess money through fractional reserve lending. The fact is, the Note you signed and your credit application were worth a lot of “money” to the bank. They monitized your Note by selling it for real money of exchange. You couldn’t take your Note and go buy groceries with it, but the bank can convert it to “money” and they do, at the Federal Reserve Window. A debt based “money” system is unsustainable, and will eventually fail because the debt grows exponentially until there is nothing left but debt. The barter system will then be re introduced, then the Treasury will step up and do it’s job, the evil greedy bankers will have caused their own demise. We the people have learned the hard lesson, never to be forgotten: Never allow a central bank to be established again. Reform banking once and for all, and enforce 100% reserves for all loans. We put all the parasitic elites in those private prisons they like so much for crimes against humanity and let them suffer until they die. They will seek death, but not find it.

  38. “Free house, naw we can’t do that. . ”

    All of you commenting my previous post miss the point by a country mile.

    If you go to someone for a loan, they go steal some property that you already own, then bring back the proceeds to you AS IF (i.e. form) you were being “loaned” the lender’s money, then who ACTUALLY funded the “loan?”

    What you also miss is that there are TWO so-called “obligations.”

    1. The purported loan the Borrower believes themselves to be entering; and

    2. The ACTUAL loan the Lender is getting by pledging the Borrower’s written instruments, that the Lender then pretends comes from its coffers.

    The transaction between Lender and Investor is a MIRROR IMAGE of what the Borrower is supposedly doing.

    You are not taking into account ACCOUNTING. If a loan is made, the Lender’s balance should go DOWN, i.e. decrease, not increase.

    So, under a securitizatio transaction, the only party getting something “for FREE” is the securitization participants.

    Let me make it even simpler, its TRANSACTIONAL FUNDING. The lender makes money/credit by using OTHER PEOPLE’S money/credit.

    Under consumer law (at least in Calif.), it is illegal to misrepresent the source of goods or services, in this case, financial services.


    4. “Bank credit . . . involves a promise or ASSUMPTION OF LIABILITY by a bank, given IN EXCHANGE FOR A PROMISE made to the bank. Thus, a BANK ACCEPTS the promissory note of a customer AND IN EXCHANGE PROMISES TO PAY the customer a corresponding amount, which, pending his order, is carried on its books as a deposit in his favor.” The Board of Governors of the Federal System, The Federal Reserve System: It’s Purposes and Functions (1939) p. 84

    5. “When a bank makes a loan, it essentially monetizes a debt—that is, it accepts as an asset the debt obligation of the borrower and creates a liability on its books in the form of a demand deposit balance in the loan amount.” Freidman H., David, Deposit Operations (3d edition 1992) p. 192

    There is NO OBLIGATION AGAINST THE CONSUMER. The obligation was extinguished at the sale of its property. The OBLIGATION being enforce is the obligation that’s governed under the laws of the State of New York.

    Starting to see the big picture?

    This is a CREDIT SYSTEM, not monetary system. Under a credit system, its all Pen and Ink money

    Google Senator Patman’s Primer on Money. And it will all become painfully clear.

    Here’s an excerpt:

    “The cash, in truth, does not exist and never has existed. What are called cash reserves are simply bookkeeping credits entered into the ledgers of the Federal Reserve banks. These credits are first created by the Federal Reserve banks. These credits are first created by the Federal Reserve and then pass along through the banking system.

    “The cash making up the banks’ ‘cash reserves’ with the Federal Reserve bank is just a myth. p. 38

    “All money used in this country and in most countries of the world is of two types. One is ‘printing press money’ which is money printed by the Government. The other type of money in use is ‘pen-and-ink money.’ Pen-and-ink money is created by the private commercial banks each time a bank makes a loan, buys a U.S. Government security, or buys any other asset.

    “Pen-and-ink money is created by a private banker simply by making ink marks on the books of the bank. p. 51

    Notwithstanding the pen-and-ink (checkbook) money, taking an instrument as an asset, then using it to obtain the funds (credit instruments) to give to the purported borrower in the FORM of a loan, is NOT getting something FOR FREE as it relates to the purported borrower.

    Again, the obligation being enforced is NOT the consumer borrower’s. It’s the Depositor’s obligation to the investors.Think MIRROR IMAGE.

    The pretender-lender (& participants) are the ones getting something for free, and then some.

    If you’re not getting it. Read, then re-read. A few things come to mind in defense of any claims: Conversion of Written Instruments, Unjust Enrichment, Novation without consideration.

    04/26/2012 | 09:43am

    Global Survey Shows Long Term Relationship between Banks and Their Customers at a Crossroads

    Paris – April 26, 2012 – Today, Capgemini and Efma released the ninth annual World Retail Banking Report which found that while bank customers citing a “positive customer experience” increased modestly by seven percent globally from last year, customer retention is in flux. According to the Report’s Customer Experience Index (CEI), which surveyed over 18,000 bank customers across 35 countries, nine percent of customers are likely to leave their banks in the next six months while 40 percent are unsure they’ll stay long term. The report shows banks have a significant opportunity to close the customer sentiment gap and address the factors that matter most to them to increase loyalty. Quality of service (53 percent), fees, (50 percent), ease of use (49 percent) and interest rates (49 percent) represent the biggest impact areas to keep customers from leaving. The report also reveals that mobile banking services have yet to be fully leveraged.

    The Globe Boasts a Mix of Customer Satisfaction
    Banks are gradually closing the customer sentiment gap and improving their business and offerings to attain higher levels of customer satisfaction, however, the survey noted that some regions are slightly ahead of others. North American customers are most satisfied with their banks (80 percent), followed by Central Europe (71 percent), Latin America (69 percent), Western Europe (66 percent), and Asia Pacific at (53 percent).

    The rest of the article can be found at

    I call your attention to the following: “North American customers are most satisfied with their banks (80 percent)…”

    So long as we are “most satisfied”, I don’t see how change will take place. Granted, North America does include Canada but still… 80% is pretty damn high! Anyone has any explanation to offer?

  40. Does it occur to anyone that, maybe, just maybe, investigations are, indeed, being conducted into the massive corruption of the past 15 years? I, personally, want to believe it.

    April 25, 2012, 8:16 pm Investment Banking | Legal/Regulatory
    Ex-Morgan Stanley Executive Pleads Guilty to Violating Anticorruption Laws

    Carolyn Kaster/Associated Press
    Lanny A. Breuer, assistant attorney general of the Justice Department’s criminal unit.One of Morgan Stanley’s former real estate executives in China pleaded guilty on Wednesday in Federal District Court in Brooklyn to violating federal anticorruption laws, as the American government continues to crack down on citizens who commit fraud and bribery abroad.

    The executive, Garth R. Peterson, who once ran the Shanghai office of Morgan Stanley’s global real estate business, was charged with secretly acquiring millions of dollars’ worth of property investments for himself and a Chinese government official. The official, in turn, steered business to Morgan Stanley’s funds, the government said.

    Mr. Peterson on Wednesday also settled a civil action brought by the Securities and Exchange Commission on the same matter.

    Mr. Peterson, 42, an American citizen living in Singapore, faces a maximum of five years in prison and a fine of up to $250,000 over the criminal charge, which was brought by the United States attorney for the Eastern District of New York.

    As part of his settlement with the S.E.C., Mr. Peterson agreed to be barred from the securities industry, pay more than $250,000 in disgorgement and give up his interest in Shanghai real estate — currently valued at about $3.4 million.

    His sentencing is set for July 17.

    Frank Wohl, a lawyer for Mr. Peterson, did not immediately return a request for comment.

    “Mr. Peterson admitted today that he actively sought to evade Morgan Stanley’s internal controls in an effort to enrich himself and a Chinese government official,” said Lanny A. Breuer, the head of Justice Department’s criminal division. “Because of his corrupt conduct, he now faces the prospect of prison time.”

    The case is the latest in a flurry of activity surrounding the Foreign Corrupt Practices Act, a 35-year-old federal law that prohibits American companies and executives from bribing government officials in foreign countries to win business.

    Both the Justice Department and the Securities and Exchange Commission, which brought a parallel case against Mr. Peterson, have redoubled their efforts to crack down on international bribery.

    The New York Times reported on Wednesday that the S.E.C. had begun an inquiry into whether Hollywood movie studios had illegally made payments to Chinese officials to ease the way for expanding into the huge potential market there. And on Sunday, The Times reported on allegations of widespread bribery at Wal-Mart’s Mexican subsidiary. In response to the reports, Wal-Mart said it had enhanced its internal controls to ensure that it was complying with the Foreign Corrupt Practices Act.

    The case filed against Mr. Peterson, the former Morgan Stanley executive, dates back to the 2008 financial crisis. It was a time in which the real estate boom in China had gone bust, saddling Morgan Stanley with large losses in its Chinese real estate portfolio. Mr. Peterson was fired in 2008.

    In February 2009, the bank disclosed in an S.E.C. filing that it had fired an employee in China after uncovering potential violations of the act. That employee was Mr. Peterson, the bank’s highest-ranking real estate executive in the country. Morgan Stanley said that it had provided both American and Chinese officials with evidence that Mr. Peterson had secured deals by bribing Chinese officials.

    Federal authorities laid out the specifics of Mr. Peterson’s misconduct on Wednesday. Mr. Peterson, who speaks fluent Chinese, helped establish Morgan Stanley as one of the most prominent property investors in China. Through its real estate vehicles, known as MSREF, the bank put hundreds of millions of dollars into Chinese real estate. Mr. Peterson was involved in at least 28 deals in China, according to the S.E.C. complaint.

    Mr. Peterson also had a secret business relationship with the former chairman of the Yongye Enterprise Company, a state-owned entity that exerted substantial control over real estate investing in Shanghai. In one instance, Mr. Peterson defrauded Morgan Stanley by transferring a multimillion-dollar ownership stake in a Shanghai office building to himself and Yongye’s former chairman, according to court documents.

    The government said that Mr. Peterson and his co-conspirators, including an unnamed Canadian lawyer, later made a profit of more than $2.5 million on the illegal deal.

    The government, which places a premium on corporate cooperation in Foreign Corrupt Practices Act cases, said that Morgan Stanley voluntarily disclosed Mr. Peterson’s conduct and cooperated throughout the investigation. It added that the bank had an adequate system of internal controls in place to guard against the illegal bribing of foreign government officials.

    Mark Lake, a spokesman for Morgan Stanley, said the firm was pleased that the matter was resolved.

    Robert S. Khuzami, the director of enforcement at the S.E.C., said: “Peterson crossed the line not once, but twice. He secretly bribed a government official to illegally win business for his employer and enriched himself in violation of his fiduciary duty to Morgan Stanley’s clients.”

    David Barboza contributed reporting.

  41. You can be a debt slave up to three times as a matter of fact. why would you want to be? Why would they allow this? So they can make more money on the slaves? I dont recommend this for taking out credit of any kind. You need to free yourself of debt.

    It is my belief the entire stock market is a ponzie scheme. And a debt maker. Money out of thin air, increasing the debt.

  42. Very interesting article about the CEO of Portugal’s largest bank resigning. The resignation isn’t what I caught but rather that the the board meetings missed by the CEO were those… where a merger of the bank with… Yep! Deutsche Boerse! was being discussed.

    What Germany didn’t accomplish through WWII, it seems intent on accomplishing through bank mergers that seem more to me to be take overs. Am I reading too much into it?

    Thankfully, Sarkozy (biggest ally of the Germans so far but also very concerned that he will be a one-term president) is also feeling his constituents’ pain and has promised to organize a referendum on German austerity measures devised for each country of the European Union. And Hollande has already assured the French that he will NOT comply with those measures: as a socialist, he cannot allow money to come before people. Simple as that. Add to the pot the emergence of the extreme right wing (kept in check for 50 years without any major problem) and a nice little 11% of votes for the communist party and we are looking at mucho trouble for Germany. Those permanently rebellious French crack me up!
    Never happy. Always nasty.

    Why is this important? The banks, my friends. The banks.

    April 26, 2012, 1:25 pmInvestment Banking
    Banco Espirito Chief to Tender Resignation From NYSE Board

    Mario Proenca/Bloomberg News
    Ricardo Salgado, chief of Banco Espirito Santo, Portugal’s biggest bank.Ricardo Salgado, the chief executive of Banco Espirito Santo, Portugal’s biggest bank, is expected to offer his resignation as a director of NYSE Euronext after failing to garner a majority of shareholder votes.

    The presumed letter of resignation follows a preliminary tally of shareholder votes on director elections at the exchange operator’s annual meeting on Thursday. Final results are expected as soon as Friday.

    Mr. Salgado failed to attend 75 percent of NYSE Euronext board meetings last year, as he was called on to steer his own firm through the European financial crisis.

    Yet it is unclear whether Mr. Salgado’s resignation will be accepted. Shareholder votes on NYSE Euronext directors are advisory, and any formal decision will be made by the board. A spokesman for the company said the board would review his resignation in a timely fashion.

    NYSE Euronext’s board held about two dozen meetings last year, largely driven by the firm’s now-aborted effort to merge with Deutsche Börse of Germany. Jan-Michiel Hessels, NYSE Euronext’s chairman, said at the company’s annual meeting that many of those were often called with little advance notice, and Mr. Salgado attended all but one of the regularly scheduled meetings.

    What consumed Mr. Salgado’s time, according to Mr. Hessels, was “a number of joint meetings of the European Commission, the European Central Bank and the International Monetary Fund, as well as meetings of the Bank of Portugal and the Portuguese Banking Association, to implement the new requirements imposed on Portugal and its banking sector.”

    Mr. Hessels added that Mr. Salgado has promised to attend at least 75 percent of all future board meetings as long as he is a director, except in cases of illness or family emergency. Should he fail to do so, Mr. Salgado has said that he will not stand for re-election at the meeting next year.

  43. Sorry sent two of one. Here is the other! They have your number from birth.

  44. You are a number: see this! Bought and sold into slavery. All of us.


  46. Geithner:

    “Hmm…”free” house because of all this fraud…naw…we can’t do that…that would be moral hazard…even though there really is no debt associated with the house…how about—we just create some paperwork that says they owe the money to this guy over here—and then we can just keep them paying to SOMEBODY…I mean, we can’t just tell them all the truth…we HAVE to have them pay SOMEbody—ANYbody…and—even though the debt collector that we have created out of thin air isn’t entitled to get the house (because obviously it’s unsecured debt now), we’ll just let them have it anyway…otherwise the whole truth will be revealed…and I’ll go to jail for sure…”

  47. davies910; Way to go!

  48. @ usedkarguy, that’s good news for sure. We need that and the press that should follow a story like that.

    I thought you had either slammed the bank and signed a non-disclosure, or been slammed yourself and crawled off to a cave. You still in the fight?

  49. RE: 2. Borrower: One who receives funds in the FORM of a loan with the obligation of repaying the loan in full with interests. (emphasis in CAPS mine.) Mortgage Banking Terms (8th edition), p. 19

    Yes an obligation is an obligation. Being forced to pay a fraud is unethical and a crime. Paying the true lender is an obligation. The ablilty to find the real lender has been concealed, and or shredded . in the State of Washington if you pay the wrong party and the right party comes with the note. you still by law have to pay the right party. If I were in a car wreck and the party that was suppose to get the money from the car wreck never shows up for the money, am I then obligated to pay anyone that shows up for the money because I owe it to someone? You are obligated to pay the party that lent the money and no one else. These frauds have unlawfully collected on the mortgages over and over and over and the real party has never been paid, or is paid by insurance default money., which if that is the case is not owed the money anymore. Not due to the homeowners fault, however due to the massive con games going on in the stock market with the securities pools. Due to the con games by the very people trying to steal the house. That is paid if full over and over and over because we signed a contract or excuse me we submitted an application. Before we even signed the contract. Banking and betting the contract would default before we even signed the contract. Something seriously wrong with that.

  50. Securitation will drain you of your inner being just staying afloat to fight it, even worse when you are own your own even though you hire someone. Just as one party stops another takes up, all secutization cases should be dismissed with prejudice. There is never an end.


    I filed this with the 9th Circuit and Deutsche Bank pulled their 3rd Motion for Relief from Stay.

  52. April 23, 2012, 12:01 a.m. EDT
    Home Owners Across the Nation Sue All Bank Servicers and Their Offshore Havens; Spire Law Officially Announces Filing of Landmark Lawsuit
    Largest International Money Laundering Network in History Formed During Obama Administration; U.S. Banks’ Theft of Home Owners’ Money Laundered Through Cayman Islands, Isle of Man and Numerous Offshore-Based Affiliates

    NEW YORK, NY, Apr 23, 2012 (MARKETWIRE via COMTEX) — In a lawsuit alleged to involve the largest money laundering network in United States history, Spire Law Group, LLP — on behalf of home owners across the Country — has filed a mass tort action in the Supreme Court of New York, County of Kings. Home owners across the country have sued every major bank servicer and their subsidiaries — formed in countries known as havens for money laundering such as the Cayman Islands, the Isle of Man, Luxembourg and Malaysia — alleging that while the Obama Administration was publicly encouraging loan modifications for home owners, it was privately ratifying the formation of these shell companies in violation of the United States Patriot Act, and State and Federal law. The case further alleges that through these obscure foreign companies, Bank of America, J.P. Morgan, Wells Fargo Bank, Citibank, Citigroup, One West Bank, and numerous other federally chartered banks stole hundreds of millions of dollars of home owners’ money during the last decade and then laundered it through offshore companies. The complaint, Index No. 500827, was filed by Spire Law Group, LLP, and several of the Firm’s affiliates and partners across the United States.

    Far from being ambiguous, this is a complaint that “names names.” Indeed, the lawsuit identifies specific companies and the offshore countries used in this enormous money laundering scheme. Federally Chartered Banks’ theft of money and their utilization of offshore tax haven subsidiaries represent potential FDIC violations, violations of New York law, and countless other legal wrongdoings under state and federal law.

    “The laundering of trillions of dollars of U.S. taxpayer money — and the wrongful taking of the homes of those taxpayers — was known by the Administration and expressly supported by it. Evidence uncovered by the plaintiffs revealed that the Administration ignored its own agencies’ reports — and reports from the Department of Homeland Security — about this situation, dating as far back as 2010. Worse, the Administration purported to endorse a ‘national bank settlement’ without disclosing or having any public discourse whatsoever about the thousands of foreign tax havens now wholly owned by our nation’s banks. Fortunately, no home owner is bound to enter into this fraudulent bank settlement,” stated Eric J. Wittenberg of Columbus, Ohio — a noted trial lawyer, author and student of US history — on behalf of plaintiffs in the case.

    The suing home owners reveal how deeply they were defrauded by bank and governmental corruption — and are suing for conversion, larceny, fraud, and for violations of other provisions of New York state law committed by these financial institutions and their offshore counterparts.

    This lawsuit explains why loans were, in general, rarely modified after 2009. It explains why the entire bank crisis worsened, crippling the economy of the United States and stripping countless home owners of their piece of the American dream. It is indeed a fact that the Administration has spent far more money stopping bank investigations, than they have investigating them. When the Administration’s agencies (like the FDIC) blew the whistle, their reports were ignored.

    Read the rest at and kudos to them for reporting the story.

  53. If_You_Don’t_Follow_The_Law_You_Can’t_Judge_Me, on April 26, 2012 at 11:29 am said:

    2. Borrower: One who receives funds in the FORM of a loan with the obligation of repaying the loan in full with interests. (emphasis in CAPS mine.) Mortgage Banking Terms (8th edition), p. 19

    ANON said:

    “…There was never any valid sale of loans — and the loans were never actually loans—they were collection rights only…Since the “loan” refinances (subprime/alt-a), and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction…”

  54. OFF TOPIC .. FYI

    Prices crashing hard in Atlanta ,, prices continue falling moderately across country .. high maintenance cost properties (read Condo’s) crashing HARD as HOA fees can now exceed mortgage payments ,, even on a 10 year note.

  55. You’re both wrong (in context).

    Under this “credit” system, because this is no longer a monetary system.

    There is no debt, when all that circulates are “credit” instruments. We have a purported “borrower” making a promise to pay, and the lender making promise to “lend.”

    The purported “lender’s” loan is manifested by it’s deposit into the purported “borrower’s” demand account. Which it promises to honor any orders to pay of the “borrower.”

    The so-called debt isn’t incurred until the “lender” honors its promise.

    This never happens.

    It’s axiomatic that a promise to pay is NOT payment. Yet this is all that’s in circulation. “credit instruments.” I.e. Dollar “BILLS.” Operative word being BILLS.

    In the scope of a securitization scheme. The purported borrower never is in debt, because the originator, is not an actual lender, and provides no consideration (apart from the credit plus credit equals cancellation). Because the originator “SELLS” the purported borrower’s written instruments and returns the proceeds in the FORM of a loan. (In law there is both form and substance.)

    In the totality of the scheme, a second obligation is created. To put it simply:

    Borrower goes to lender for a loan; lender seeks investors to raise capital to lend to the borrower. the lender (in concert) BORROWS by way of the prospectus to obtain these funds, by mortgaging the purported borrower’s written instruments. The proceeds from mortgage of the purported lender is then given to the borrower as if it were a loan. (FYI, funds is distinguished from money)

    The purported lender then makes the borrower surety of its own debt, making the borrower assume the lender’s liability.


    1. Originator: A person who solicits builders, brokers, and others to obtain applications for mortgage loans. Often called a loan officer. Mortgage Banking Terms (8th edition), p. 106

    2. Borrower: One who receives funds in the FORM of a loan with the obligation of repaying the loan in full with interests. (emphasis in CAPS mine.) Mortgage Banking Terms (8th edition), p. 19

    3. Issuer: “Broadly speaking, an issuer, defined in 8-201, is the person responsible for the performance of the obligations represented by a security—usually, the enterprise that places its name on the security certificate as an indication that the security certificate represents debt or equity of that enterprise.” Bjerre, Rocks, ABC’s of the UCC, Article 8: Investment Securities (2d edition, 2004), ch. 2, p. 10.

    4. “Bank credit . . . involves a promise or assumption of liability by a bank, given in exchange for a promise made to the bank. Thus, a bank accepts the promissory note of a customer and in exchange promises to pay the customer a corresponding amount, which, pending his order, is carried on its books as a deposit in his favor.” The Board of Governors of the Federal System, The Federal Reserve System: It’s Purposes and Functions (1939) p. 84

    5. “When a bank makes a loan, it essentially monetizes a debt—that is, it accepts as an asset the debt obligation of the borrower and creates a liability on its books in the form of a demand deposit balance in the loan amount.” Freidman H., David, Deposit Operations (3d edition 1992) p. 192

    6. Street Name: A term used to refer to securities held in the name of brokers, or their nominees, instead of in the customers name. Woelfel, Charles J. The Encyclopedia of Banking and Finance (10th edition, 1994), page 1096

  56. ANONYMOUS—can you comment on this article? Thanks.

  57. I hope part two is more factual than part 1. Your analogy of the pool is wrong and your credit guarantee is wrong, for agency pools and GSE certs.

    The debt is not created when the loans are pooled, the “computer leverage” is already in place. The debt is created when the homeowner executers the Note / mortgage / security instrument.

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