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 BillionTaibbi does a pretty thorough job with his post, above. I strongly recommend a full read of it.
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…
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.
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 LikelyKeep clapping! And, don’t forget the popcorn!
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…
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 BlowTaibbi 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.”
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…
…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.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.“
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.
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…