Bill Black On Foreclosuregate
by ilene - October 25th, 2010 10:00 pm
Bill Black On Foreclosuregate: Calls For The Immediate Termination Of Bernanke, Geithner And Holder
Courtesy of Tyler Durden
Bill Black, who will soon, together with Neil Barofsky, be a guaranteed shoe-in for the POTUS/VP position (both as independents, of course), was on the Ratigan show today, following on his op-ed from last week (here and here) calling for the long-overdue nationalization of Bank of America, and discussing the rampant fraud at the heart of mortgage gate. And contrary to ongoing lowball estimates from the like of JPM and Goldman, Black provides numbers about the bank liability that are simply stunning: "Credit Suisse says that by 2006 49% of all mortgage originations were liars loans. When independent folks study fraud, it is in the 80-90% fraud range. That means there were millions of acts of fraud. Those loan frauds occurred because the banks created incentive structure for the loan brokers to bring them the absolute worst of the worst loans, and to lie on the application forms… These frauds came from the banks, and they propagated through the system through a series of echo epidemics…This fraud spread through the system and that’s why we have a crisis in foreclosures. This stems from the underlying fraud by the lenders in mortgage loans to the tune of well over a million cases a year by 2005."
Furthermore, Black points out the glaringly obvious, that the Fed should not be in charge of any investigation into mortgage fraud, due to its "massive" conflict of interest, to the tune of $1.5 trillion in MBS/agencies held on the Fed’s books, which would be immediately null and voided if rampant MBS fraud is indeed uncovered. Which is precisely why the entitlement of the Fed as supreme regulator (as inspired by the financial generosity of the Wall Street lobby) as part of Frank-Dodd was the one single most destructive decision ever made, and equivalent in many ways with electing America’s very own tyrannical despot, whose only interest is making the multi billionaires, into trillionaires, and leaving everyone else in the cold through the eliminating of the savings class and the destruction of the reserve currency.
And it goes much further… to the very top of the US ruling oligarchy in fact. Which is why, as we have claimed from day one, nothing less than a complete reset of the entire kleptocratic system…
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Geithner and the NY Fed Accused of Willfully Ignoring Fraud and Covering Up Lehman’s Bad Assets
by ilene - April 21st, 2010 12:32 pm
Important (i.e. share it) article by Mish on William Black’s account of how Tim Geithner and the NY Fed covered up Lehman’s inflated asset values and lack of liquidity, long before the financial meltdown in 2008. – Ilene
Geithner and the NY Fed Accused of Willfully Ignoring Fraud and Covering Up Lehman’s Bad Assets, by Senior Regulator During the S&L Crisis
Courtesy of Mish
Inquiring minds are digging into a 27 page statement made by William Black before the Financial Services committee. Black is an Associate Professor of Economics and Law, at the University of Missouri.
Professor Black’s statements regarding the collapse of Lehman and the role the Fed played in that collapse are refreshingly candid.
Please consider "Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner". Emphasis, highlighting, and subtitles are mine.
I begin with a short description of my background that is relevant to your questions. My primary appointment is in economics. I have a joint appointment in law. I am a white-collar criminologist. My research specialization is financial fraud by elites and financial regulation. I was a senior regulator during the S&L debacle (and had the honor of testifying many times before this Committee).
Valukas Report Documents Three Major Deficiencies In Lehman Governance
The [Valukas] Report documents at least three major deficiencies in Lehman’s corporate governance that need to be addressed globally. First, it points out that Lehman, and many other Delaware corporations, have eliminated the fiduciary duty of “care.”
… Alan Greenspan has admitted that he had a similar view and that events have falsified this naïve account. It is insane to withdraw accountability for negligence. Doing so encourages negligence. Congress should mandate that corporate officers and directors be subject to the fiduciary duties of care and loyalty. They will still, of course, have the very substantial protection of the business judgment rule.
Second, the same individual should not serve as the CEO and Chair of the Board of Directors of a large corporation. The imperial CEO is a consistent problem in this and prior crises.
Third, Lehman ignored its stated risk “limits” and simply increased its limits retroactively to accommodate its violations of its risk limits. In plain English, that means it had no meaningful limits. ….
I have a different view than Mr. Valukas about the overall state of Lehman’s
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site