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There’s a hell of a lot more to this breaking story than meets the eye, as I’m sure many finance and economic pundits will elaborate upon those historical,  greater truths over coming weeks and months. IMHO, three or four years too late, and long after Main Street went more than seven trillion dollars short, due to a collapse in the mortgage-backed securities and related derivatives trading markets on Wall Street and, more specifically, due to far too many under-regulated, sociopathic con men fraudulently driving the U.S. housing market into the ground, it is now being reported that President Obama is naming one of Main Street’s staunchest housing/mortgage/finance advocates – at least one of the few still remaining in D.C.--North Carolina Democratic Congressman Mel Watt (NC-12), to run the Federal Housing Finance Agency (FHFA), the federal organization that oversees virtually all government-sponsored enterprises (GSE’s) responsible for backstopping almost all (these days) of our nation’s housing finance sector.

(A White House press event and announcement of Congressman Watt’s appointment occurred as I was writing this post.)

As recently as just the past few weeks, the taxpaying public has been brutally reminded—again and again, since September 2008—that it is they who end up socializing Wall Street ‘s gambling losses as our nation’s financial sector continues to privatize their obscene profits, all under the watchful eye of a captured regulatory class whose even more obscene behavior overrides any sense of sanity in America’s latest demonstration of just how “bipartisanly”-captured our government is.

What else may one say as the public remains complacent while they observe a captured government sanctioning Wall Street “compensation” of miillions of Americans that lost their homes due to the financial sector’s deliberate, well-documented and highly-successful efforts to circumvent our country’s basic rule of law? How else may one describe it when Main Street’s strip-mined to the tune of over $7 trillion, and the “punishment” meted out to Wall Street is an insulting settlement of  $300 to $800 for almost every U.S. family that lost virtually everything they (once, at least partially) owned?

Adding insult to grave injury, we’re now learning that our country’s corporatocratic tax code may create a bottom line tab for Wall Street’s government-sanctioned destruction of our society that’s going to “penalize” our Masters of the Universe to the tune of—not $25 billion…not $8.6 billion…but – as little as $12 million!  (Here’s a link regarding the sentiments of Oregon Senator Jeff Merkley on this downright “fictitious accounting” scam.) It’s now what some are referencing as an event “that’s bigger than the robo-signing scandal.” Hell, I’ll bet Goldman Sachs spends more than that on toilet paper in a typical 12-month period; and that’s for an institution that serves up more toxic shit to society in a typical year than British Petroleum!

Here’s Taibbi, from this past Friday…

While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion

Matt Taibbi
Rolling Stone Blog
April 26, 3:53 PM ET

The obscene greed-and-arrogance stories emanating from Wall Street are piling up so fast, it's getting hard to keep up. This one is from last week, but I missed it – it's about the foreclosure/robo-signing settlement that was concluded earlier this year.

The upshot of this story is that in advance of that notorious settlement, the government ordered banks to hire "independent" consultants to examine their loan files to see just exactly how corrupt they were.

Now it comes out that not only were these consultants not so independent, not only did they very likely skew the numbers seriously in favor of the banks, and not only were these few consultants paid over $2 billion (over 20 percent of the entire settlement amount) while the average homeowner only received $300 in the deal – in addition to all of that, it appears that federal regulators will not turn over the evidence of impropriety they discovered during these reviews to homeowners who may want to sue the banks.

In other words, the government not only ordered the banks to hire consultants who may have gamed the foreclosure settlement in favor of the banks, but the regulators themselves are hiding the information from the public in order to shield the banks from further lawsuits…

Taibbi does a pretty thorough job with his post, above. I strongly recommend a full read of it.

But, we’re talking about corruption that is receiving pushback from the entire world right now! Whom do you think those folks in Greece, Spain, Portugal, Ireland, and Cyprus are righteously blaming for this travesty? This situation is so far gone, even those neoliberal economists that have a social conscience are telling it like it is. Per my comments in selected Kossacks' posts over the past 10 days, and courtesy of fellow Kossack aquadito’s efforts over at YouTube, over the past 72 hours, I hope you’ll take the time to listen and watch the first 15 minutes of Columbia University economics professor Jeff Sachs’ speech to the Philadelphia Federal Reserve, on April 23rd. It is an eye opener and a good dose of context for the four years’ day late and seven trillion dollar(s) short travesty that the 99% are still suffering through, as coverage of an unprecedented episode in the state-sponsored ransacking of our society by its elites continues to rock our nation, as it picks up speed and hubris with every passing day.

Dr. Jeffrey Sachs speaks candidly on monetary reform before the Philadelphia Federal Reserve (April 23rd, 2013)

Yes, Wall Street grabs their egregious tithes coming and going. And, as I’ve reported extensively in years past, and as Jeffrey Sachs much further reinforces that truth from what he’s heard from scores of ambassadors around the globe, it’s pouring a lot of fuel on the fires of intense resentment of our country much more than our MSM would ever acknowledge.

Our investor-led “housing recovery” masks a still-struggling market (which many are referencing as, potentially,  another housing bubble) which is being fueled as much by propaganda as anything else. The greater truth is that first-time buyers cannot afford to buy a home in this market. Why?  Because they’re finding mostly crappy jobs out in the marketplace—if they’re lucky enough to even get those—and they’re starting out their careers in student debt-servitude. So, the cash buyers are out in force, literally morphing the American dream of home ownership into the nightmare that is now more accurately described as a “rentier” society.

Just in the nick of time (for the fraudsters to take advantage of the statute of limitations with regard to their past cons) for a new bubble; and, guaranteed to make for great Capitol Hill kabuki in coming weeks, I present to you a story about the nomination of a congressman to head-up our nation’s housing finance sector. It's about three or four years too late to do anything about the strip-mining of America; but, just in time to support an inflated real estate market to feed profits back into Wall Street speculators’ pockets and our nation’s too-big-to-fail banks! Hell, even Senator Elizabeth Warren tells us this is great! As for those that received a $300 check for the rampant lawlessness that was publicly sanctioned by our federal government, I don't think there will be any issues with regard to curbing their enthusiasm...

White House to Nominate Rep. Watt to Housing Agency, GOP Opposition Likely
By Kate Ackley and Ben Weyl
Roll Call Staff
May 1, 2013, 10:54 a.m.

The White House plans to name Rep. Melvin Watt to lead the Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac, but the initial response from lawmakers and industry representatives suggest a sharp political fight over his confirmation.

A White House official confirmed to CQ Roll Call that the North Carolina Democrat on Wednesday will be announced as the choice to take over the agency that is on the frontlines of federal housing policy. He would replace Edward J. DeMarco, who has been at odds with the Obama administration on major housing finance issues since becoming acting director in 2009.

Sen. Bob Corker, a Tennessee Republican who sits on the Banking committee, blasted the administration’s pick, signaling Watt’s confirmation in the Senate will face strong opposition.

“I could not be more disappointed in this nomination,” Corker said in a written statement…

Keep clapping! And, don’t forget the popcorn!

I know. I know. It’s a Wall Street rerun. Rinse. Repeat. (Hey, it’s either this or American Idol, tonight.)

Am I (a lifelong Democrat) skeptical? You betcha’! As some of our leading Democrats on The Hill keep reminding us with their actions, as opposed to their meaningless words: “The banks run the place!


I think it’s more about paraphrasing one of the many profound quotes of baseball great Satchel Paige, “Don’t look back. Our corporatocracy might be gaining on you.”

#            #            #

ACTION ITEM: Tell your senators and congresscritters to support the “Terminating Bailouts for Taxpayer Fairness Act of 2013," a/k/a the "Brown-Vitter TBTF Act"

Here’s more from Taibbi, just earlier today, on the Brown-Vitter TBTF Act…

Too-Big-to-Fail Takes Another Body Blow

Matt Taibbi
Rolling Stone Blog
MAY 1, 9:06 AM ET

Minds are changing on Too Big to Fail. A month ago, it was just something in the air. Now, it looks like we're headed for a real legislative confrontation. And man, is the finance sector freaking…

Taibbi tells us how Senators Brown and Vitter introduced this legislation just last week, and it’s “…a gun aimed directly at the head of the Too-Big-To-Fail beast.”
…During the Dodd-Frank negotiations a few years ago, Brown teamed up with Delaware Democrat Ted Kaufman to introduce an amendment that would have physically capped the size of the biggest banks. The amendment was bold and righteous but was slaughtered on the floor by a 61-33 margin, undermined by leaders of both parties – 27 Democrats voted against it.

Brown-Vitter offers a different and, in a way, more elegant solution to the problem than Brown-Kaufman. Rather than impose size limits, it simply insists that banks with over $500 billion in assets maintain higher capital reserves than are currently required. Companies like J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup and Bank of America will have to keep capital reserves of about 15 percent, about twice the current amount.

The bill only has such tough requirements for just those few megabanks, which sounds unfair, except that the aim of the bill, precisely, is to level the playing field. Right now, the biggest U.S. banks enjoy a massive inherent market advantage in that they're able to borrow money far more cheaply than other banks, because everybody on earth knows the government will never let them fail and will always bail them out in a pinch, making their debt essentially U.S.-government guaranteed. Studies have shown that these banks borrow money at about 0.8 percent more cheaply than other banks, and that this implicit government subsidy is worth about $83 billion a year just to the top 10 banks in America. This bill would essentially wipe out that hidden subsidy and make the banks bailout-proof.

Taibbi tells us that immediately after Brown-Vitter was introduced. “The Independent Community Bankers of America, or ICBA, issued a press release boosting the bill.“
This was a big thing. It was the first time since the crisis that a prominent financial industry group opposed the will of the TBTF banks…
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Comment Preferences

  •  well... (21+ / 0-)

    I'm not saying our country is falling apart, but all the king's horses and all the king's men are on stand by.

    •  It's nice to see you back! IMHO... (7+ / 0-)

      ...the episode was a little Lenny-Bruce-ish...folks that don't know your shtick...easy to understand how some here could take it out of context. Important to be sensitive to the audience (I say that sincerely)...but, I think your humor is among some of the best I've read, ANYWHERE, in a long time. (I'm pretty sure I've told you that, too!)

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Wed May 01, 2013 at 04:56:27 PM PDT

      [ Parent ]

  •  Uh, what? (2+ / 0-)
    Recommended by:
    duhban, Willinois

    Did this diary have a point? Why is the nominee bad, exactly?

    You never trust a millionaire/Quoting the sermon on the mount/I used to think I was not like them/But I'm beginning to have my doubts -- The Arcade Fire

    by tomjones on Wed May 01, 2013 at 04:58:19 PM PDT

  •  It gets tougher and tougher to read (2+ / 0-)
    Recommended by:
    bobswern, Angie in WA State

    all of this. Especially when we are just doing damn all about it.

    American Television is a vast sea of stupid. -xxdr zombiexx

    by glitterscale on Wed May 01, 2013 at 05:46:06 PM PDT

  •  so basically (1+ / 0-)
    Recommended by:

    Obama did a good thing but it's 'late' (according to you) so now it's a bad thing?

    Is that  preztel logic or yoga logic?

    In the time that I have been given,
    I am what I am

    by duhban on Wed May 01, 2013 at 06:43:26 PM PDT

    •  I think you should read the linked pieces... (4+ / 0-) this article. Maybe even watch/listen to what Jeff Sachs is saying. After that, when you're done dousing your hair--which, apparently, will be on fire--get back to me.

      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Wed May 01, 2013 at 06:52:12 PM PDT

      [ Parent ]

      •  I can't watch video right now (1+ / 0-)
        Recommended by:

        and if you had an argument to make you shouldn't be relaying on links to do it.

        Links are for further reading and/or evidence they are not to make your case for you

        Funny you should talk about hair on fire though, ironic even.

        In the time that I have been given,
        I am what I am

        by duhban on Wed May 01, 2013 at 07:40:35 PM PDT

        [ Parent ]

  •  I always learn something from you, Bob (2+ / 0-)
    Recommended by:
    lostinamerica, bobswern


    Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

    by Gustogirl on Wed May 01, 2013 at 07:46:23 PM PDT

  •  Wall Street HATES Watts (1+ / 0-)
    Recommended by:

    Rick Santelli was all but ranting again about Watts after verbally fellating DeMarco.  DeMarco was atrocious.  I'm glad that fuckers is gone.

    Oh and you are right about one thing Bob, the Housing market is beginning to inflate again.  It's still too early to say as prices aren't going up like they did 8 years ago but the speculators are jumping back in and sales volume is increasing.  Housing starts are going up too.  It's starting to feel like 2003-2004 all over again when the market was starting to get a bit crazy.  

    This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

    by DisNoir36 on Wed May 01, 2013 at 08:43:35 PM PDT

    •  Sadly...I think we're closer to a peak... (3+ / 0-)

      ...and a levelling off for a year or two in housing. (It makes sense...banks sell off over the next year or two, give or take, lack of real demand--not from investors--means  Can't remember what/whom I was reading the other day, but that was their sentiment(s), too. Kinda creepy in fact...stock market spiking to new highs, housing moving up again...but, the difference(s) this time: highest income inequality since stats were reliable, long-term high unemployment...pretty much the worst recovery on record. And, no matter what anyone else says, I've been echoing Krugman and Stiglitz...we cannot call this a "recovery" when well over half the population is either living in or near poverty, or at best, paycheck-to-paycheck. And, it's truly a Depression for the majority of the country, IMHO.


      "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

      by bobswern on Wed May 01, 2013 at 09:20:39 PM PDT

      [ Parent ]

      •  You're not far off (1+ / 0-)
        Recommended by:

        the recovery in Housing in CT is ENTIRELY based on Wall Street.  You can draw a circle of a 1 mile radius around the Metro North train stations which are within 1 hour of Grand Central in NYC and that's where all the growth is.  It's uncanny.  You go down the line from Greenwich downtown, Cos Cob, Riverside, Old Greenwich, Noroton Heights, Darien, Rowayton, SoNo, Saugatuck, Westport and Southport oh and New Canaan downtown and ALL those areas are booming with $2 million plus houses and condos.  Spec building is going on there too with teardowns at levels not seen since 2005.  You go 15-30 minutes north of those train stations and the market is ailing.  Beyond 30 minutes and it's DEAD with the exception of the low end bargain stuff or distressed properties.  There are a lot of sales in other towns in SW CT but it's almost exclusively at the low end and it's the bargains.  So while volume is up, median sale $ are not.  But along that Metro North corridor it's booming and it's ALL related to NYC and Wall Street.  

        This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

        by DisNoir36 on Thu May 02, 2013 at 05:26:59 AM PDT

        [ Parent ]

        •  LOL! (0+ / 0-)

          I live 10-11 minutes from the New Canaan, CT train station, but in NY State. (Just over the state line.) Live in Greenwich (in an apt. when I was in my 20's) for about 7 years before moving to Westchester. Actually worked with a couple of residential real estate firms, among many other large corp's and businesses, in Fairfield Cty. Actually did a fairly significant amount of professional, political media consulting (always for Dems) there, as well! (LOL! I joke about this with friends: I have the distinction of being the person that created/produced the media for Ned Lamont's first election as a Selectman in Greenwich. Total budget < $20,000. BTW, it's the only elected office he's actually ever held.)

          "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

          by bobswern on Thu May 02, 2013 at 07:07:37 AM PDT

          [ Parent ]

          •  It's an incredibly "poetic" message in Stamford... (0+ / 0-)

            ...skyline now, as you drive South along I-95...2 buildings, just a few hundred yards apart: the signage atop the first tall building is "UBS"; it's followed by the message atop the second tall building which is "RBS." I'm all waiting for a new building to be built just south of the Royal Bank of Scotland building with the signage: "It's ALL BS!"

            This would make a GREAT poster, with a third building added into the shot!

            "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

            by bobswern on Thu May 02, 2013 at 07:12:46 AM PDT

            [ Parent ]

            •  I wonder how many 10's of thousands of people... (0+ / 0-)

              ...have thought about that! LOL!

              "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

              by bobswern on Thu May 02, 2013 at 07:14:08 AM PDT

              [ Parent ]

              •  Haha. Time for some freeway blogging (0+ / 0-)

                I know exactly where you're talking about.  Maybe someone can hang a giant banner on the Marriott saying that.  Stamford is quickly becoming the Hedge Fund capital of the world and now Blackwater Capital is moving to Stamford as well, right on the waterfront into a huge new office they're building.  

                I currently live in Danbury but most of my work lately has been in Greenwich, New Canaan, Westport, and so on.  

                This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

                by DisNoir36 on Fri May 03, 2013 at 10:50:54 AM PDT

                [ Parent ]

      •  I agree (0+ / 0-)

        I see one major positive.  Household balance sheets really have recovered quite a bit:

        But, I think the stock market is also peaking.  And both equities and housing are being propped up by aggressive monetary policy.  Equities have also been propped up by share buybacks.  

        So why aren't individual households yet borrowing, buying, and investing more then?  Well for one, the jobs situation is still relatively weak, and austerity policies mean it's not likely to get any help from government soon.  But on top of that, households rightly at this point also have little trust in the bankers who are urging them to borrow, or the Wall Street folks who are urging them to invest.  

        In other words, our problems are  institutional.  Some of the fundamentals are finally falling into place for a stronger recovery, but people are afraid of being screwed again.  

        And, while I'm not exactly buying ECRI's recession call from mid-2012, they are right that real GDI is growing very slowly (what they call "stall speed").  It wouldn't take much to tip us into a mild recession by the second half of 2013.  

        If that does happen though, I could possibly be truly optimistic by 2014, for the first time in a long time.  And I think the political situation is maybe changing for the better as well, as austerity being so thoroughly discredited could help some.

  •  Unfortunately, no oversight of Wall Street (1+ / 0-)
    Recommended by:

    Yes, they'll make a big show of objecting to the Watt nomination.  But the truth is, the FHFA is only overseeing other government agencies.  It's not like they are giving anyone serious (Elizabeth Warren for example) enough power to really oversee Wall Street's role here.  

    And the right wingers are going to blame the GSEs anytime anything goes wrong, anyway.  I'm afraid having a genuine progressive in charge of overseeing them just gives them another scapegoat.  

    Of course it's still not a bad thing on balance to have Watt there, but these are still baby steps towards the level of reform that is really needed.  

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