BofA Joins Attack on Wikileaks

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

EDITOR’S NOTE: The effort to choke off payments to WikiLeaks is being defended by some as an act of patriotism, protecting the state secrets of our government. BOA wold no doubt say that it is merely cooperating with the government. But my guess is that the information coming out about BOA and the other megabanks has nothing to do with state secrets. My guess is that it will show government complicity in the continuing fraud created, enabled and promoted by the megabanks against homeowners, taxpayers and investors.

The sale of the bogus mortgage bonds was fraudulent because there was nothing to back them up and even if there were actual loans in the pool they did not conform to the conditions promised to the investors.

The servicing of the the alleged mortgages or stream of receivables was performed with the sole intent to grab as much of the money from the stream of payments from homeowners and third party insurers and guarantors without accounting to either the investors or the homeowners. The servicers faked events, fees, and costs to do it and they are succeeding even as this article is being written.

The modification and settlement schemes were sham operations creating the appearance of an attempt to help homeowners and right the wrongs committed by Wall Street and the securitization co-venturers. The “negotiations” were conducted by servicers lacking any authority or economic interest int eh loan, the property or the mortgage bond. Their only interest was to take all the money from payments, take all the money from sales of property and keep it.

The original obligations were in most cases fraudulently created with misrepresentations about the nature of the transaction, the value of the property and the viability of the the complex mortgage transaction they thought they were getting. In fact, it was more like an unregistered security whose purchase would produced promised passive returns arising from a continually rising housing market that “never goes down.”

The original notes signed by the homeowners were fatally defective because they neither identified the creditor nor disclosed the true nature of the transaction.

The original mortgages or deeds of trust were fatally defective because they were used a security for a fatally defective promissory note and did not secure the obligation, which was between the investors and the homeowners.

The foreclosure proceedings were fraudulent based upon fabricated, false and forged documents.

The auction sales were all fraudulent because non-creditors were allowed to “bid” on property without putting up one dime. Instead they submitted “credit bids” which were accepted illegally and wrongfully by the auctioneers, resulting in the issuance of title that corrupted the entire title system throughout the the country.

How much of this will be disclosed by WikiLeaks? I don’t know. But my guess is that at least some of the disclosures will show full knowledge by the government and complicity in the acts described above all done in the name of saving the finance system. It seems that nobody was minding the store when it came to considering saving our society. There is more than one way to right a wrong. Yes lying more will get you down the road a bit, but telling the truth will move you toward a fair and just resolution.


Bank of America Suspends Payments to WikiLeaks


In a sign of the increasing tensions between WikiLeaks and the corporate world, Bank of America has said it will no longer help process payments for the organization, which released a huge cache of secret State Department cables in late November and has threatened to “take down” a major United States bank with another data dump.

“Bank of America joins in the actions previously announced by MasterCard, PayPal, Visa Europe and others and will not process transactions of any type that we have reason to believe are intended for WikiLeaks,” the bank said in a statement issued on Friday. “This decision is based upon our reasonable belief that WikiLeaks may be engaged in activities that are, among other things, inconsistent with our internal policies for processing payments.”

In a Twitter post put up soon after Bank of America’s announcement, WikiLeaks called on supporters to boycott the bank, urging that “all people who love freedom close out their accounts at Bank of America.”

After MasterCard and PayPal, which is owned by eBay, announced they would no longer handle payments for WikiLeaks, the companies were attacked by online hackers who supported WikiLeaks.

Investors have worried that the founder of WikiLeaks, Julian Assange, was referring to Bank of America when he said in an interview with Forbes last month that he possessed a large cache of potentially embarrassing documents from a large American bank. In an interview with Computerworld in 2009, Mr. Assange said WikiLeaks held five gigabytes worth of information from the hard drive of a Bank of America executive.

Mr. Assange is free on bail in Britain in connection with accusations of sexual offenses he faces in Sweden. Swedish authorities are now seeking to extradite Mr. Assange, a request Mr. Assange has vowed to fight.

Mr. Assange has called the accusations of sexual misconduct a ”smear campaign.”

Wall Street “Virtual Nation” Exceeds Federal Reserve, U.S. Gov.

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

Editor’s Note: Before we deregulated our financial system, private issuance of currency was a dream. Then came sweeping deregulation and an actual article from Alan Greenspan in 1996 stating the benefits of allowing private companies to issue their own currency.

He said in that article that there was no evidence to suggest that the system was any better or worse for having banks issue their own bank notes and the “free” market would determine the relative value of such currencies. It was a good thing, he said. At that point in time private currency was rising rapidly, having already gone into the trillions, but the real gaffe would not be obvious until some years after when we all woke up to find out that the banks had issued more currency than all the real money in the world by a factor of 12. $600 trillion issued by private companies versus $50 trillion issued by ALL the governments in the world.

The simple reality is that private banks control far more in world finance than any government does, can or ever will. Conventional means of controlling interest rates and inflation, economic growth and unemployment are impotent in the face of a giant elephant in the living room. See the article below. The Federal Reserve, once arguably the most powerful financial institution in the world, now has zero effect on interest rates. It is disregarded, along with increasing lack of confidence in the dollar itself, leading us to the inescapable conclusion that whether we have rampant inflation, an economic collapse or a recovery is not in the hands of the government anymore — it is in the hands of private bankers who have no allegiance to any nation but their own virtual nation.

The ultimate control that COULD be exercised by government with the support of most of the populace, is not happening and never will. because governmental IS banking, controlled directly and indirectly by relationships and money that cannot be undone except by extreme measure — something both the congress and this disappointing Obama administration is unwilling or unable to do.

The current war in Cyberspace regarding Wiki-leaks is just the start of a trajectory of world relations and local governments of undetermined length, with unknown consequences and a total lack of controls. Guerrilla warfare eventually wins out but we don;t when that will be. The revelations in those leaked documents and messages would have a profound effect on the American people who already have little slack left that they are willing to give to our government. I don’t know how damaging those leaks might be. But like most people I strongly suspect that with things going to hell in a hand basket anyway, it is difficult to see how the revelation that the governments around the world are corrupt, deceiving each other, plotting against each other and getting ready for various kinds of war will be greeted by anything other than a collective yawn.

I don’t know if the government efforts to suppress disclosure will succeed in whole or in part, but I strongly suspect that those leaks are already viral on the internet and will be forthcoming whether we want them or not. We can argue about the free speech, but the information is going to come out one way or the other whether it is right or wrong. I call that reality. And putting ourselves in front of a bus that is going to run over our government and make it look even weaker and stupider, does not seem like good policy, good thinking or even good intentions. Unless the government has a fool proof way of winning this battle, they will perceived as a loser. I don’t like that. I like to be on the winning side.

It is likely that these disclosures will reveal high crimes and misdemeanors at every level of government and private enterprise. I fear we will be distracted by the crimes and we’ll forget about the victims. 40% of our gross domestic product is being held hostage by the financial system. That is ridiculous and unsustainable. It means that instead of actually doing something — making products or delivering services — we are trading paper back and forth about maybe doing something that is only conceptual like the “new economy.” 40% of our economy thus does not really exist. You wouldn’t know it from stock prices but a close look at bond prices will tell you how the smart money is betting — higher interest rates, higher inflation, and shrinking influence of the once mighty U.S. dollar.


Bond Yields Continue Their Climb


Investors sold Treasuries for a second consecutive day on Wednesday, sending interest rates higher in response to the tentative deal to extend Bush-era tax cuts even as the Federal Reserve was trying aggressively to keep borrowing costs low.

The frenzy on the bond market was set off on Tuesday after President Obama announced his tax-cut agreement with Republican lawmakers. Financial markets interpreted the development as likely to hasten the economic recovery but also increase the budget deficit.

The deal on taxes, which would be paired with new cuts to payroll taxes and business taxes, effectively opened up a new channel to stimulate the economy with fiscal policy. At the same time, it appeared to run headlong into the Federal Reserve’s program, begun last month, to buy $600 billion in Treasury bonds in an effort to keep borrowing costs low and encourage spending by consumers and businesses.

Yields on the benchmark 10-year bond have been steadily rising since Oct. 7, when they were 2.39 percent.

On Tuesday, after President Obama’s announcement, yields shot up, and by Wednesday afternoon they were up 19 basis points from the day before, to 3.318 percent.

They retreated to 3.259 percent on Wednesday after the Treasury Department reported positive results from its $21 billion auction of new 10-year notes.

The yield on the 10-year note ended at 3.27 percent, the highest level since mid-June. The price tumbled again Wednesday, falling 1 5/32, to 94 17/32.

That tax deal “is having the opposite effect to what the Fed wants to do on yields,” said Jonathan H. Wright, a former Federal Reserve economist who is now a professor at Johns Hopkins University. “But the end objective is being supported. The Fed objective was to provide stimulus to the economy through bonds.”

The government’s auction attracted almost three times as many buyers than bonds sold, a ratio characterized as fairly typical. The Treasury plans a $13 billion auction of 30-year notes on Thursday.

Ajay Rajadhyaksha, head of fixed-income strategy at Barclays Capital, said that the tax deal had altered the conditions under which the Fed had devised its bond purchasing program, a move known as quantitative easing.

“Those purchases were meant to push real rates down and inflation expectations up,” he said. “Instead the reverse has happened. Real rates are rising and inflation expectations have not risen much since October. I think the Federal Reserve will be a little concerned.”

Bernard Baumohl, chief global economist for the Economic Outlook Group, said the economy can still function with Treasuries at 4 percent, but if they rise to 5 percent the recovery could stall.

“What this means is that the Federal Reserve is facing a dilemma,” he said in a research note. An increase in quantitative easing, rather than lowering yields and holding down the cost of capital, could have the opposite effect, Mr. Baumohl wrote, as bond investors increasingly worry about the prospect of higher inflation.

In an interview broadcast last weekend, the Fed chairman, Ben S. Bernanke, left open the possibility of expanding the central bank’s bond purchases. He defended the purchases as a way to stimulate a sluggish recovery and said the fear that they would cause inflation was “way overstated.”

For consumers, the increase in bond yields could mean higher rates for home mortgages, which have already been rising in recent weeks.

“Watch mortgage rates soar and housing activity and prices dive even more in the aftermath of this bond market action,” said David Rosenberg, the chief economist for Gluskin Sheff.

The fiscal expansion announced by Mr. Obama appeared to have caught the Fed by surprise, though supporters of the Fed’s purchasing program argued that bond yields would be even higher had the Fed not been buying up debt.

Mr. Wright said that one consequence of the tax cut deal could be a curtailing of the Fed’s program that was originally planned to last into next summer.

“Fiscal policy is presumably going to have some stimulative effect on the economy, and it lessens the need for further quantitative easing,” he said.

But if quantitative easing is, indeed, cut short, the risk premiums on long-term bonds will probably rise even further, because once the Fed is sidelined as a major purchaser, investors will need stronger inducements to hold the securities.

“The cleanest interpretation here is investors are going to demand a higher return on Treasuries in order to compensate them for the greater supply,” Mr. Wright said.

European bond yields also rose on Wednesday as their prices dropped. The sale of bonds by the German government received a weak response. European officials exchanged pointed comments about the need to create euro bonds as a way to pay for more bailouts of struggling countries on the Continent.

While global markets have been unsettled by the financial troubles in the euro zone in recent weeks, some deficit hawks are now turning their attention to the United States.

“This is more worry for the bond market,” said Laura LaRosa, the director of fixed income at Glenmede. “The deficit problem needs to be addressed. It makes yields go higher because we are adding to the deficit and fears of inflation, and the creditworthiness of the United States comes into question.”

Some analysts said fixed-income investors were taking profits in a Treasury market that had become overpriced in reaction to the Fed’s quantitative easing program, which started as they priced in the program before the Nov. 3 announcement, and were possibly rebalancing portfolios.

“The market was overextended,” said Robert S. Gay, the managing partner for Fenwick Advisers and a former Fed economist. “It is evidence that the market was overbought.”

In the equity markets, stocks wavered within a narrow range. The Dow Jones industrial average rose 13.32 points, or 0.12 percent, to end regular trading at 11,372.48. The broader Standard & Poor’s 500-stock index gained 4.53 points, or 0.37 percent, to 1,228.28, while the Nasdaq composite index increased 10.67 points, or 0.41 percent, to 2,609.16.

The FTSE 100 in Britain was down 13.92 points, or 0.24 percent. In Frankfurt, the DAX lost 26.04 points, or 0.37 percent, while the CAC 40 in Paris was up 21.48 points, or 0.56 percent.

The dollar firmed against a range of currencies.

Graham Bowley and Sewell Chan contributed reporting.

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