STOCK MARKET WATCH, Wednesday September 23

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday September 23, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 6

AT THE CLOSING BELL ON September 22, 2009

Dow... 9,829.87 +51.01 (+0.52%)
Nasdaq... 2,146.30 +8.26 (+0.39%)
S&P 500... 1,071.66 +7.00 (+0.66%)
Gold future... 1,016 +10.60 (+1.06%)
10-Yr Bond... 3.44 -0.04 (-1.01%)
30-Year Bond 4.20 -0.04 (-0.87%)

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

The Return of Trouble
Did it ever leave?
BY FRANK BARBERA

Get ready -- the world is about to start spinning upside-down again. Not sure, believe it. Below the surface economic data is still heading down, the recovery, and exit from recession is a pleasant myth, and instead a double-dip contraction lies ahead for 2010. Things are actually going from ‘bad’ to ‘worse’ as some of the leading indicators needed to sustain a recovery are simply not turning around. Take Bank Credit, for example. If the Banks are so convinced that a strong recovery is dead ahead, then how come they continue to hoard cash, resulting in the latest data for Bank Loans hitting nearly 40 year lows. Or what about Consumer Credit -- if the economy is about to reverse higher, then why isn’t consumer credit moving up and reversing it’s major down turn as consumers loosen up on the proverbial wallet? Answer: Unemployment is still surging and is nearly double the stated headline rate on both a national level and in the great state of California, which is usually a pretty good directional gauge for the U.S. economy as a whole.

Consumers are trying to de-lever and save up, and as a result credit card delinquencies are still surging, mortgage foreclosures remain at record levels and Real Estate continues to move down (especially on the high end with Prime Mortgages) as unreported inventories remain robust and are acting as dead weight. Where the Rate of Change for Consumer Credit is concerned, we are talking about an accelerating down trend and fresh multi decade lows. On the trade front, Port activity remains moribund as do the statistics for exports/imports with China. None of this suggests the beginning of a recovery with any lasting traction. Instead what we have is the ‘Foam Latte’ recovery, some foamy fluff at the top of the brew coming from a few transfer programs and statistical magic, wherein with one good sip it simply all disappears. It is an anemic inventory re-building cycle, a typical counter trend bounce for the economy that unfortunately is very likely in its final month or two. To that end, no one should be surprised to see the inventory build in the months ahead following Cash for Clunkers lending Q3 GDP a statistical bounce into the black. Will we get a few more positive headlines? Absolutely, but remember, below the surface the core data is not turning the corner, and that means a nasty reconciliation period likely lies ahead starting in the next few months.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Reports

10:30 Crude Inventories 09/18
Briefing.com NA
Consensus NA
Prior -4.73M

14:15 FOMC Rate Decision Sep
Briefing.com 0.25%
Consensus 0.25%
Prior 0.25%

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[ozymandius]

3. Oil hovers above $71 amid weak demand, US dollar

SINGAPORE – Oil prices hovered above $71 a barrel Wednesday in Asia as signs of weak crude demand were offset by a slumping U.S. dollar.

Benchmark crude for November delivery was down 6 cents at $71.70 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $1.83 a barrel to settle at $71.76 on Tuesday.

.....

U.S. oil inventories rose unexpectedly last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 276,000 barrels while analysts had expected a drop of 2.25 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

http://news.yahoo.com/s/ap/oil_prices

[Demeter]

4. Only the Second Rec? And I Stayed Up All Night for This?

Morning, Ozy. It's hot, humid and dark out there.

[ozymandius]

6. Good morning, Demeter.

:donut: :donut: :donut:

Likewise, the conditions in rain soaked Atlanta are much the same. Now that the rains have abated and the interstate is no longer underwater, life is getting back to normal. Mosquitos have extended their presence this year. Normally, we would be seeing fewer of them at this time. The rain and temperatures in the 80s have changed that.

Up all night? That's rough. How's the kid doing?

[Demeter]

8. Pretty Good

Her pain pill wears off about 4 AM, so I have to talk her into going back to sleep after dosing her. Staples come out next week. 6 weeks of no lifting.

I've never seen an incision before--it's awful. My baby is scarred for life.
On the other hand, she is alive.

[ozymandius]

10. Ugh.

What trauma - physically and mentally. My sympathies. :hug:

[Roland99]

17. Oh my!

I apparently missed some news but I hope all goes well with her recovery...and quickly.

[FBaggins]

22. Oh Demeter

I'm so sorry to hear about that! I hope that she's better soon.

How old is she?

[Demeter]

26. 26

She had a perforated gall bladder, surgery last week.

[FBaggins]

29. Oops :)

I guess I misinterpreted "my baby".

Still hope she recovers soon!

[Po_d Mainiac]

37. At least the mark is on her gut

I punched out a windshield 40 years ago with my face.

The upside: I saved a ton of money on hair loss products. Somehow it just wasn't a big deal to be balding. :evilgrin:

[Warpy]

45. They heal

and, depending on what they used to close it, it can look like a pale line or a pale zipper.

Alive is good.

[tclambert]

71. On guys, scars are cool.

"This one is from a Thresher shark. And that one's from a 50 Cent concert. Sat too close to the stage and got caught in the crossfire."

[Ghost Dog]

95. Tell me about it.

(Surprise burst appendix; Peritonitis; Open abdomen emergency surgery; Adhesions; four months inside at age 13. Adult ward. Pethadin. Hallucinations).

No bill, of course: British National Health Service ca. 1965. (Though, my father, me less so, contributed plenty of money each month to the system, as we all must, over the years since the end of the war).

Mr. Brown, the surgeon's name. I remember him clearly to this day. And Nurse Kelly. She made all the difference.

Young boys and girls both are usually very impressed by the knife-cut scars (and their imaginations)... even without going into any detail.

I was certainly, briefly, dead. Did I care?

(Be strong, Demeter).

PS. I almost always try to read the entire thread. I'm much quieter, usually, these days though.

Don't let me stop y'all watching, thinking, speaking up. :hi:

[DemReadingDU]

104. My spouse also had

the burst appendix, adhesions, etc. It's quite the identifying scar. He was 16, before I knew him. Said he thought he was having hunger pains.

I have a few myself...couple Caesareans, and a really interesting scar on right ear where it was stitched together from an auto accident.

Also had our share of taking our young kids to emergency for some stitches. We've all made it, and still alive to talk about them.

[FBaggins]

21. Careful

Atlanta has days of more rain in the forecast and it has few places to go (except apparently my IL's basement).

[ozymandius]

5. Bank of America, JPMorgan overhaul overdraft fees

NEW YORK – As lawmakers prepare to implement sweeping credit card reforms, Bank of America Corp. and JPMorgan Chase & Co. are moving to overhaul overdraft fees and practices that have been criticized industrywide as excessive and harmful to consumers.

Bank of America Corp. said Tuesday it will cap the fees it charges customers for overdrawing their accounts, backpedaling on the hikes the company imposed just this year. Starting Oct. 19, Bank of America no longer will charge overdraft fees when a customer's account is overdrawn by less than $10 in one day.

.....

JPMorgan Chase & Co. also will be overhauling its overdraft fees, a spokeswoman said late Tuesday. Starting in the first quarter of 2010, the bank will make overdraft protection opt-in for all customers, post transactions to accounts as they occur, and eliminate fees when accounts are overdrawn by $5 or less. It will also reduce the maximum number of fees per day to three from six.

.....

The credit card law doesn't address debit cards, however, and banks can still automatically enroll cardholders into overdraft programs. Three-quarters of large banks have automated overdraft programs, according to a 2006 study by the Federal Deposit Insurance Corp.

http://news.yahoo.com/s/ap/20090923/ap_on_bi_ge/us_overdraft_fees

[FBaggins]

30. Love seeing that... but I still think my idea was better

Just limit overdraft fees to the amount of the item that overdrew the account and don't charge a fee on any overdraft that results from fees charged in the last X days.

The "overdrafts less than $10" makes sense too.

This shouldn't make THAT big a dent in their fee income (and leaves the disincentive on those who truly can't manage their money), but takes care of most of the incidents that cause bad taste in the mouth.

[Tansy_Gold]

42. I like to see a study on the reasons for overdrafts

Back in the days of paper checks, you could "float" a crucial payment for a couple of days until payday. So if the electric bill was due on the 14th and you didn't get paid 'til the 15th, you could write 'em a check on the afternoon of the 14th and avoid their late fees, but they couldn't deposit the check until the 15th, when you got paid. The check you wrote for the light bill wouldn't hit your account for two or three days, at least, so you had time to get your check on the 15th and deposit it on the 16th -- and the electric bill would safely hit on the 17th.

Ditto for groceries or any other necessity. You had some wiggle room.

Electronics have changed that. A lot of places simply don't take paper checks, or if they do, they run them through a process that turns them into, essentially, a temporary debit card. They process it and then hand you back your check!

Maybe the banks should introduce a 24- or even 48-hour grace period on overdrafts. I wonder how many of the overdrafts would disappear then.



Tansy Gold

[FBaggins]

44. Other than bank errors, there' s really only one reason:

People spend more money than they have in the account.

Your example of using the float is an accurate description of how things used to be... with one problem: You weren't supposed to do it.

You weren't supposed to write a check against uncollected funds. It was almost certainly part of your contract with them (not that anyone reads those things... I could tell you stories). It used to be how we were all taught to handle an account.

Transactions like those you described "worked" because of how the process operated, but you were spending money that you didn't have.

Add just one layer to the transaction (and make it for some significant sum) and you're "kiting". I remember that we used to have people who didn't even realize that it was illegal. They made a deposit from an account at another bank to cover a check they wrote two days ago and there wasn't any money at the other bank... but that was ok because they were getting paid later in the week and would deposit the paycheck over there.

Electronic transactions have made this much less plausible for most people... things just post too quickly. But I'm sorry... adding a "grace period" to restore the ability to spend money you don't have doesn't seem like the solution. :)

[zogofzorkon]

46. Of course the bank holding

your payroll check for 5 days is just fine with you isn't it. The funds are in the banks possession for days before they are in yours. Charging fees for cashing checks drawn on a bank where you don't have an account I'm sure is reasonable and proper. So you work for the money and then either wait for your bank to clear the funds or go to the issuing bank and pay a check cashing fee or are coerced into opening an account. Yup I love those warm fuzzy bankers.

[FBaggins]

47. Of course not

your payroll check for 5 days is just fine with you isn't it.

Not unless you have a problem account AND your employer's check check is drawn on a bank on the other side of the country OR has previously bounced.

The funds are in the banks possession for days before they are in yours

Yes and no. In most cases that is true and there should be no hold.

In the vast majority of cases (you have an account in good standing and have been depositing that check in similar ammounts for some time), those funds won't be "held" at all (meaning the funds are available the next day when the fed credit's the reserve account). The bank will just take the chance that if the check is bounced it will be made good.

The challenge is that the Fed may move funds from one banks reserve account and moved it to the other bank's, but the check hasn't been processed. You don't know that it's good.

The bank doesn't really "possess the money for days" before letting you have it because:

1)they had a provisional credit that they don't know will be good until the check is actually processed.
2) They have their OWN checks clearing to OTHER banks where money has been debited from THEIR fed account and given to the other bank but they haven't been able to debit their client's accounts because they don't have the check. It pretty much all works out in the wash... they don't have the sum of cash they can put to work.

Either way... most customers never see five day holds after the account is established unless it's an unusual transaction. That sort of hold should only happen on a paycheck if you have a problem account. Assuming that you DON'T, you need to find a better bank (but don't be surprised at the hold while they get to know you). Best of luck! :-)

Charging fees for cashing checks drawn on a bank where you don't have an account I'm sure is reasonable and proper.

At your own bank? No... that's wouldn't be "proper". If you mean a fee that a bank charges to cash a check for a NON customer (when the check is drawn on THAT bank)... I find the practive unsavory, but not illegal. I would not perform such transactions... I would cash the check where I had an account and/or asked my employer for direct deposit of my payroll.

[zogofzorkon]

50. Never met a banking practice

that I couldn't learn to love. Deposit your check on Thursday at 3.01 PM. Friday is a holiday. Check is entered as a Monday deposit. You get your funds on Wednesday. That's 5 or 6 days depending on how one thinks.

Unsavory is a word that applies to banking in general. The only reason such things aren't illegal is because the laws are made by money.

[FBaggins]

54. The situation you described works both ways

Deposit your check after the end of the business day and it goes in on the next business day. Why is that a shock?

It isn't "entered as a Monday deposit", it IS a Monday deposit. And no... you should get your funds available with that day's deposits (Monday night) unless a hold is placed. Again... if you're seeing holds as a regular course of business and you aren't poorly handling your account... find a new bank. Even the biggest banks generally provide next-business-day availability (BEFORE they get the money) on the vast majority of checks deposited.

OTOH, if you write a check that same evening and someone else deposits it... it comes OUT as a monday check as well. If you have a check clear before that deposit is posted on Monday... it's because you wrote the check BEFORE you made the deposit.

The exception can occur when you're getting cash (or some other transaction that is pulled out live). But that makes sense since cash and a check really aren't equivalent. If a bank does that then they need to have some way to account for CASH deposits prior to posting.

The only reason such things aren't illegal is because the laws are made by money.

I normally appreciate healthy cynicism... but that's taking it a bit far. :)

[tclambert]

73. Oh, boy, I hate that hold they put on deposits.

I can remember when they didn't useta do that. When they started, I thought I figured out a clever way to beat them. I cashed my check at one bank and deposited the cash at another. And the bastards still put a hold on it! I yelled at them, "But it's CASH! You don't have to wait for cash to clear!"

They said, "Sorry, it's bank policy."

That's when I decided banks were nuts and went over to credit unions. They still put a hold on deposits, but they have fewer fees and an automatic overdraft loan provision that covers up to about $500. Of course, I never use it. I'm a good boy and make sure I have enough to cover my checks.

[FBaggins]

77. Oh give me a break... a hold on CASH?

There is no such thing.

You must have availability by the next business day unless you deposit it at an ATM and then they might have one more day.

[Hugin]

81. I have never had a hold issue with...

Credit Unions.

What you describe is exactly why I've never dealt with Banks... and why my Depression Era Parents never set foot in a Bank until they were middle aged... (and then, it was only to get a deposit box. Which they soon closed after the fees became ridiculous and Credit Unions began offering the service)

But, then punitive fee income isn't part of a Credit Union's business model. ;)

^5.

[Hugin]

60. I just had a Cashier's Check held for 10 DAYS!

For crying out loud... A CASHIER'S CHECK!

Tell me they aren't gaming for an overdraft in this situation?

[FBaggins]

62. No offense, but I doubt it

It isn't legal to put a ten day hold on a Cashier's Check.

If they did, you don't just need a new bank... you need a lawyer.

The first $5,000 must be made available on the next business day and the remainder can only be held as long as you said on an exception basis... which requires them to document (on the form they give you) a valid reason to believe that the check WON'T be paid (and it would have to be a bank pretty far away). There really is no such reason on a Cashier's check absent outrageous circumstances.

So can you tell us what exception reason they gave you? It sounds like you have a good claim against them. Reg CC violations are a big deal. The penalties will cost them far more than whatever they're "gaming" for.

[Hugin]

66. Well, doubt me then... But, I have the reciept from BoW to prove it.

They claim... They put a hold on ANY check. Cashier's check... ANY check.

And... Unlike yourself, apparently... I can't afford to run and get a lawyer every time things don't go my way.

[FBaggins]

68. Then answer the question.

They are required by law to give you the REASON for the exception hold (the check has been altered, the drawee bank has reported checks stolen, etc). So what was the reason?

It won't cost you anything to sue. It sounds like an open and shut case that any lawyer would take on a contingency basis.

They claim... They put a hold on ANY check. Cashier's check... ANY check.

They lie. That's illegal.

Maybe you should dress up as a pimp and record the transaction. :-)

More importantly... don't pretend that that's the norm for any other bank. Noncompliance with Reg CC is expensive

[Hugin]

79. You're obviously in a totally different class than I am... I have news, too. I'm the normal.

They were totally non-compliant and the only excuse or reason I received is... THEY.DO.IT.FOR.ALL.CHECKS. (Did you get it this time?)

But, I can't afford to sue and neither can most people.. So, the predation continues, un-checked. They know this and that's exactly why they do it. I must say, you're very naive to think the system is other than what it is.

Exactly, the same foolishness will happen, if and when, they pass this joke of a "Health Care Reform"... The games WILL continue on those who can least afford to play and pay.

[FBaggins]

82. Insult all you like. I've posted the regulation

If you've got a bank that's so clearly violating the law then you need to get a new bank.

I'm not kidding about video taping (though you don't need to dress up in grandma's fur jacket and say you're a pimp). If you're walking in with a local cashiers check and they're telling you "ten days on everything that's our policy" then someone will run with it. The banks aren't too popular, it'll make entertaining watching.

Regarldess of all of that... since I've shown that they're clearly in violation of the law (assuming your story is accurate. I've been shocked at how many people couldn't tell a Cashier's check from a hole in the ground)... why advocate passing more laws?

Not to sound fundie... but the situation you describe just needs enforcement of existing laws.

I'll say it again... if they put exception holds on all checks... they're violating the law. And I know for a FACT that that's not what "most banks" do.

[Hugin]

83. What I'm saying is that Banks are not following the regulations... They have no reason to...

It's cheaper not to. Rake in Billions and pay a few hundred thousand here and there in Fines and Settlements. You do the math.

I also note that none of these Fines and Settlements goes to the real victims of the crimes... The Consumers who are trapped in this screwed up system.

Either that... or the Banks have used their Lawyers (which they CAN afford) or Lawmakers (which they rent by the term) to create a web-work of loopholes and EXCEPTIONS to those few regulations which they haven't managed to get DE-REGULATED.

I agree. The laws and regulations are there... But, by an action by Bush,Inc. via an OCC ruling, States are prevented from Class Action litigation against the Banks. In addition, due to a corrupt DOJ at the Federal level... Nothing is done. Bill Moyers did a whole episode about it... Sorry, you missed it.

Look it up... It's on the books and that is why everything has gotten so out of hand.

Okay, if that's not what 'most banks' do... Then name one large Bank that doesn't. Prove that they don't. You probably look as good on film as I do.

[TheWatcher]

92. You know it for a fact. Your facts are a bit off.

ALL the Major Big Banks do this, my friend. ALL of them.

Mr. Baggins, with ALL due respect please don't saunter in here with your soothing justification rhetoric and regulatory "knowledge" and treat us like we're twelve, naive, and have never been kissed or been to the prom.

You're in over your head with that approach.

Most people here are very well read, know their stuff, and know what really goes on out there, and have the first hand knowledge that comes with hands on, real life experience to guide them.

You might try General Discussion if you want to impress the sheep. I'm sure the the Economic Cheerleaders there will take you in and deify you right away.

We're not such an easy sell here.

[DemReadingDU]

105. I've had banks hold bank checks too

Small checks, big checks. Sometimes the entire check was held for 10 days, sometimes half the check was held. These were hard checks from the banks.

ACH transactions, moving money from one institution to another, there is immediate access.

[TheWatcher]

72. Um, I don't know where you get your information from, but you are dead wrong about this.

Bank Of America has a policy like this, and they can and DO hold cashier's checks for UP TO ten BUSINESS days. They have done it to me before, and I have several friends that had the same thing happen to them with their PAYROLL Checks until they got Direct Deposit, and then that problem disappeared.

Washington Mutual, now Chase, does the same thing.

You can call their Customer Service Phone Numbers and easily get this information

Their policy is to make the first $100.00 available and then they hold the rest for a period ranging from 2 to Ten Business Days, and if it is an amount over $2500, they usually hold it for the full 10 Business days.

They may have recently changed the amount that will get your check held that long, but I know for a FACT that these two big banks do it, because it has happened to me, my partner, and several of my friends.

And not everyone can just go get a lawyer every time this happens, because they do it all the time.

The Big Banks can do whatever they want, and even if it can be litigated, they know most of the public can't/won't do it.

[FBaggins]

76. You may not know where I get it from... but I do. And no.. I'm not wrong.

I "get it" from Regulation CC and I've dealt with it for well over 20 years. I cite the Fed summary page on the reg

http://www.federalreserve.gov/Pubs/regcc/regcc.htm

They cannot legally place any hold on the first $5,000 of a Cashiers check made out to you absent some rare circumstanced (as I outlined)... and they cannot place a ten day hold AT ALL outside of defined exception criteria which they must disclose to you.

The situation you cite with your friends and their "PAYROLL CHECKS" is not the same thing because that isn't a Cashier's check.

Even then, ten day holds require an exception basis that must be disclosed. It must be a justifiable reason to believe that the check will not be paid (post dates, stale dated, altered, previously bounced, new customer, etc).

Their policy is to make the first $100.00 available and then they hold the rest for a period ranging from 2 to Ten Business Days, and if it is an amount over $2500, they usually hold it for the full 10 Business days.

That's strange. Their depositor agreement says "Our general policy is to make funds from your deposits available to you no later than the first business day after the day of your deposit." and then warns that this may mean that you have access to the money before they get it and you are still responsible for the deposit if it comes back.

Any bank that regularly holds ALL deposits for good customers isn't going to have those customers for long.

And they absolutely can NOT "usually hold" a check for ten days. A ten day hold (as stated) has to be a documented exception and must be from outside of that area of the country.

And no... I neither work for nor approve of BofA.

[tclambert]

86. Thanks for that link. I bookmarked it.

Here's an interesting quote from it ( http://www.federalreserve.gov/Pubs/regcc/regcc.htm )

"Many institutions—in fact, 11 percent of those examined in 1998—have been cited for one or more violations of the regulation. Here are the four requirements that caused the most compliance problems that year:

* Providing exception notices about funds availability; including all required information
* Making funds from certain checks, including local and nonlocal checks, available for withdrawal within the times prescribed by the regulation
* Providing next-day availability on $100 of deposits not otherwise subject to next-day availability
* Following special procedures for large deposits."


That was 1998, a few years Before Bush. Does anybody expect regulatory compliance increased during the 8 laissez faire years just recently ended?

Hugin may have run into one of the 11% in violation. My case with a hold put on cash was from the 1980s. Don't know if it was a violation or if the regulations were different so, so many years ago.

Is there an easy place to report such violations? You know, phone number, web site, police station? Hiring a lawyer and filing a law suit seems like a lot of trouble over a tiny amount of money. I say tiny amount because any check over $5,000 qualifies for an exception hold, and while many of us may not consider $5,000 tiny, I guarantee any lawyer will.

[TheWatcher]

89. Look, you can post all the "Official Links" you Want

And tell us we're all wet, and post all of the justification rhetoric you can muster, but the fact remains that these two Big Banks do this, it is Policy, and they can do it on ANY check they choose to do so on. I have seen it, experienced it, and know enough people that work with BOTH banks to back it up.

And I don't care how "Strange" you think it is, but if it is a larger Cashiers check $2500 or over, they certainly CAN and DO hold it for ten business days, because they have done it to me, my partner, my friends, and several business associates, and they can do it anytime they want. Although the exception you speak of exists, it does not matter. They can do it for any check in state or out, and they usually do. Everything I told you is true. I could care less whether you believe it or not.

The first thing my partner did when she got her new job three years ago was get Direct Deposit as soon as possible, because they do this to PAYROLL Checks as well, and they were DOING IT TO HER, and we cannot afford to have holds put on things like that. I don't know what kind of a fantasy world you live in Mr. Baggins (Maybe things work differently in Hobbiton's Banking System), but most people when they get paid, because they are living paycheck to paycheck in this country with bills to pay, CANNOT afford a hold of ANY kind on their funds. That is just ridiculous to even TRY to justify.

I go with what I SEE with my own eyes, and HEAR with my own ears and witness first hand. I can tell you are someone who likes to find the justification and reason with everything these criminals do, but the fact is, like I said, they do what they want.

We bailed their asses out, and they have gone RIGHT BACK to doing the same things that caused the crisis to begin with, and the rest of us get to pay for it and eat cake.




"Any bank that regularly holds ALL deposits for good customers isn't going to have those customers for long."

You'd think that wouldn't you? You'd be a bit wiser never to underestimate what the American Consumer is willing to put up with.

After all, most of them think The Recession is Over, the Crisis has past, and the Economy is growing.

[tclambert]

87. Hugin, you are obviously a suspicious character. You frequently post to websites

questioning the motives of your overlords. Is it any wonder the overlords would put you on their "special watch, hold all checks" list?

[Hugin]

91. Praise the Overlords!

:hide:

[Hugin]

57. When the entire Financial Sector is 'kiting'.. I have a hard time vilifying an individual for...

doing it.

Wait! Is this one of those "When one man kills someone, it's murder. But, when nations kill, it's war." kind of paradox things?

[FBaggins]

61. Not a bad point. :)

But I'll repeat what I just posted. We've just about gotten past a crisis caused by too-loose funds availability on the part of some lenders and lack of financial responsibility on the part of some consumers. Do we need to repeat the mistake?

The most egregious examples can be fixed - few people should get a $35 fee for a POS transaction on a three dollar cup of coffee or a $200 check than overdraws the account by five bucks. Yes, most banks have services that keep that from happening, but not all customers can qualify for it (and the ones that can't can least afford these fees).

[tclambert]

74. Well, they loaned out 30 times the assets they actually had.

If YOU try loaning out money you don't have, it's a felony.

[Hugin]

55. When Banks' whole business model is hinged on people making errors.

Something is truly screwed up.

They already make money off of both ends of a sales transaction and they want MORE?

I have no sympathy... They need to pass a law to eliminate this whole aspect of gaming people for an additional buck.

[FBaggins]

59. Of course...but

is that really how you see their business models?

What I WOULD say is that when some banks' whole business model is based on people making payments on loans that they couldn't afford in the first place (and the banks' reason for existance is to evaluate credit risk and price for it) then something IS screwed up.

And, of course, we've learned that this is true.

I would also say that we have a problem with people not being responsible for their own money. Our grandparents knew not to spend money until they knew they had it. Do we really want to enact laws that make it easier for people to be irresponsible and give them an excuse to blame others? I used to have old ladies come in for help when their checkbook didn't match our balance records by even pennies (one such old lady once helped a big bank catch a multi-million dollar fraud - back in the day when a million was real money :) ).

"I think I should be able to spend until the bank tells me I don't have any more money" smacks too much of "I can't be broke, I still have checks left!"

Just (hopefully) coming out of a crisis caused by banks making funds too available and consumers failure to restrain their own spending as long as the bank would let them have the money... I'm not anxious to repeat the mistake.

[Hugin]

65. Well, I also see a $35 fee (equivalent to 3 hrs average wages) for each preventable error as being..

an excessive charge for each infraction. (Without Due-process... I might add.)

Preventable, due to the fact the Bank knows in advance that there are not enough funds in the account for the transaction.

[FBaggins]

67. It certainly CAN be.

That's why I made my proposal. (Though I don't know what you mean by "due process" - this isn't a court case. If the error was the banks then they had to fix it).

As for your "preventable" point... that isn't always the case, but let's assume it is. The fee is for checks (etc) being presented against unavailable funds. If they "prevent" the transaction (i.e. bounce your check), they're still going to charge you the fee.

"Preventable" also makes it sound like it's the bank's job to "stop me before I spend again!" - the person with the GREATEST ability to prevent the error has already failed.

[Joe Chi Minh]

88. You really have some confused priorities. It may surprise you to now that most poorer folk

have better things to do than tally their last red cent, when the bank can easily bounce a cheque or refuse a bank transfer.

My bank (in the UK) knew that I was always prone to miscalculating the balance on my arranged overdraft, due in no small part to following my account in virtual time online. Most of the time, although it didn't yet show on my account, they would show expenditures on transfers in my Balance Available. However, with increasing frequency, they would suddenly fail to do that for me, always just before the weekend. My pension arrives on a Monday, but they insisted on debiting me for being overdrawn as the first transaction or transactions of the day, i.e. before my pension arrived in the account.

In recent months, there has been a total turn round, and they have been very helpful to me. It has no longer been treated as the first transaction of the day, but quite the contrary. Where before I would have to pay £65 for being a few shillings overdrawn (two fines, can't remember what the second was for), they have just enacted a new rule that the fine should be just £5 - with a limit to how many times that could be charged per day. From being an utterly villainous bank, it seems to actually provide a public service, as well as making profits. Not a lot from me, it has to be said.

I had a business account at another bank I hadn't used for years, predating my retirement even. Being a most bloody-minded soul, I chose to make my multiple transfers, which were free at the other bank, from this business account for which I had to pay for each transactin. But it was the principle. With this bank, if there wasn't enough money in the account, the transaction would simply be declined and I wasn't charged.

As I'm sure you know, it costs diddly squat for the banks to bounce cheques, charge fines for exceeding your overdraft, etc, and our courts are looking into the question of the banks having to pay back billions of pounds in excessive charges to their customers. Needless to say, the original legislation stipulating that the charges should reflect the costs to the banks came from the European parliament, not from our Nulab(c) government slavishly following the good, old, American neoliberal model into economic ruin.

".... the person with the GREATEST ability to prevent the error has already failed."

What sort of (choose an expletive) is that! It is the dedicated work of bank staff to be dealing with such matters. Joe Public has a million other things on his mind. Wake up! Your tenderness towards the banks and total lack of understanding of the distracting vicissitudes of ordinary folks' lives is utterly, utterly appalling.

[TheWatcher]

90. He sounds just like any apologist/shill I see on a daily basis.

Always trying to sound reasonable, there is always justification for everything.

Nothing to see here, you know nothing, I am the expert.

And then just calmly pats you on the head and chuckles as if you were a twelve year old asking about the birds and the bees.

It's always amusing to see someone who can use so many words to basically say and tell you nothing.

Nothing important, anyway.

[Ghost Dog]

96. I've been observing those who like to say "We will never know"

the Truth.

:)

Edit: Or, should that read "We shall never know"?

[Joe Chi Minh]

97. He sounds the quintessential functionary.

[Ghost Dog]

99. Par for the course,

Joe.

[zogofzorkon]

106. I vote for borg

No point in replying to them. The program is hard wired.

[FBaggins]

107. Lol!

I quote the straight facts based on 20+ years of experience AND the Regulation controlling these transactions and not I'm a "borg".

You've got people on the thread claiming that they get ten day holds on CASH deposits... but anyone correcting that nonsense must be a plant.

I was just trying to help guys.

[Name removed]

110. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Tansy_Gold]

109. Well, I'm not twelve years old.

And since it's late and no one will likely read this, I'm gonna write at least part of what I wrote and then deleted this morning, minus the long and boring anecdotes.

When I asked about wondering what a study of reasons for overdrafts would show, I thought it might be interesting to find out how often people overdrew their accounts for what we might call necessities and how often for frivolous things.

Because there's a difference between an overdraft and running up a credit card. A psychological difference.

The simplistic response of well, people overdraft their accounts because they're spending money that isn't there is like a well duh moment.

But just as there are different kinds of expenditures that put the account over -- an emergency doctor visit, a prescription that costs more than what's in the account, the water bill before they shut it off, whipped cream on the latte, that first edition on eBay that just kind of had to go on the library shelf -- maybe there are reasons why people don't know how much they have in their accounts.

Back in those days of paper checks and a two or three day "float," we also had to keep track of our own money. You had to write those checks in the check book by hand (or at least tote up the carbonless copies) and subtract them from the balance as well as any fees. There was direct active input into figuring out that balance. I screamed for almost 20 years at my husband -- futilely, of course -- because he would never either write his ATM withdrawals in the checkbook or at least let me know what they were. *I* was responsible for knowing what the balance was. *I* had to pay the bills.

Today, more and more of it is out of our hands, literally. We don't write the debit transactions in the checkbook any more. Instead, we just call up the balance online. We can do it in the car on the iPhone right after we made the purchase. It's all real time.

But for those of us who DON'T keep minute to minute track of that balance, even small things can upset it.

I'm going out for the evening. I have a paycheck coming in two days -- my "employer" has no direct deposit -- so I check my balance online to make sure I can cover the evening's expenses. I have $155 in the bank, and I know nothing is outstanding that will clear in the next two days. Dinner tab comes to $56.32. I calculate a nice round figure of $13.68 tip to make the total $70. The cashier reads it as $18.68. Mentally I calculate I have $85 left, but I really only have $80. Movie tickets are $15, and I splurge on popcorn for another $15. $55 left in the account, by my accounting. On the way home I remember that I need to get dog food and fill the car with gas. The dog food comes to $25. So I've got $30 left in the account (but it's really only $25 because of the error the clerk at the restaurant made.) So I stop at the gas station and decide I'll put just $25 worth in, just in case. I don't want to overdraw the account. But it's a bit late and I'm not as quick on the gas nozzle was I'd like to be, so I pumpt $26.12 before I catch myself and shut it off.

Still, I think I have that margin for error.

I don't. And the next day I'm overdrawn by $1.12, and I'm hit with a fat overdraft fee.

The whole electronic banking system "knows" enough to reject a debit card that's trying to get money out of an empty account. Someone ought to be able to figure out a way that the consumer gets a warning BEFORE the account is overdrawn. So the gas pump wouldn't have let me pump that extra $1.12. I might have wondered what the hell was the problem and I'd probably have lost a lot of sleep trying to figure out what the problem was, but I'd have been saved the overdraft fee.

The reason this hasn't happened is because the banks like those fees.

People are, surprisingly, human. We make mistakes. We add 9 and 4 and get 23. When all of us were on the same system -- paper checks, a couple days' "float," the hand-written check register -- we had a handle on the system. We felt as if we were partners with the banks. If you overdrew your account, they bounced your check. You got hit with a fee from the bank and you got hit with another fee from the merchant, and your local reputation took a hit.

We're still human and we still make mistakes, but now the banks are no longer our partners. They encourage us to make mistakes, and they profit off it. And those who don't have the latest technology are at a distinct disadvantage. I have an elderly friend who, since the death of her husband a year ago, has finally agreed to start using a debit card. But she doesn't have a computer and is terrified that some mistake will be made and she won't know about until she gets her monthly paper statement. I help her as much as I can, and her daughter does too, but she knows she's more at the mercy of the banks than she used to be.

So whenever I hear that "personal responsibility" bullshit -- whether it's spoken explicitly or just implied -- my socialist hackles rise up. This shouldn't be a dog-eat-dog, competition-is-everything-and-the-loser-takes-nothing society. We should by now have evolved beyond that primitive stage. We should see that what benefits all benefits each and every one.

Instead of being penalized for being merely human, we should be treated like human beings. ("oops, I screwed up somewhere along the line. $20 less in the account than I thought, so I'll put the wine and those filets back, and pick 'em next time. BF will have to be happy with pizza and a big salad, and I'm happy knowing I didn't get a fat overdraft fee.")

We were encouraged to be lazy as well as spendthrift. Those who enabled our irresponsible behavior could -- if they were either so inclined or so pressured -- encourage us to be more responsible. And along the way they might become more responsible, too.


Tansy Gold, who ends up being responsible for EVERYTHING. . . . .

[DemReadingDU]

111. I guess I'm anal-retentive with my checkbook

Not only do I still write Everything in my checkbook, including all those debit transactions, but I compare the paper checkbook to the transactions in the account 'online' to insure nothing is missed, and vice versa.

Plus I keep an Excel spreadsheet to detail all those transactions so I know how much is spent for such categories as groceries, home supplies, restaurants, printer cartridges, the monthly bills, donations, etc. It's a real eye-opener what gets spent where.

Besides, when I die, it quickly shows someone the necessary expenses, because I'm a rare frugal person who doesn't normally fritter away my money.

In some ways, I'm glad I am the person who takes care of the bills at our house. Spouse is horrible at frittering away money. Every fill-up at gas station, also must have candy bar. Stops at McDonalds for a daily latte, and sometimes fries with that, lol. He has no idea the amounts of any bills, but if he ever questions anything, I can quickly find it on my spreadsheet.


Here's something else I read that Karl Denninger posted a couple months ago. Basically. a person is charged multiple overdraft fees because the bank held smaller earlier transactions and processed the largest amount first, even though it was dated the last transaction. This resulted in multiple overdraft charges, instead of one charge.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4023812&mesg_id=4024068

[Tansy_Gold]

112. That's exactly how I used to be, and why it drove me up the wall

that my husband was so cavalier about it. And we lived on the paycheck-to-paycheck model most of the time, with the occasional need to "float" a grocery check for a day or two. He never understood that. Never.

Currently, BF and I do not mingle monies at all. Not gonna happen.

Most people aren't like us, however. And it seems as if the banking industry (?) wants it to stay that way.

It's a game all rigged in their favor.




TG

[Joe Chi Minh]

114. For the "functionary" in charge of your account, you must be a real heart-breaker.

Like those people who always pay off their credit-card liability each month.

What tickles me is the way these kind of cartel-type corporations, such as banks and utilities, will often write to you saying you really ought to take advantage of a special "green" scheme or some spurious scheme giving you the impression you'll be much better off for it. But, since they are at liberty to raise their charges to you at will, (the energy companies in the UK haven't passed on any of the 50% excess profit they made in the past year), they will do so, as and when they like, and your "fantastic saving" will go up in smoke like a little twig of tinder.

[Joe Chi Minh]

113. Kind of wry, touching, and the part of it about thinking you'd left some

leeway, all too familiar.

[truedelphi]

102. Good idea. n/t

[FBaggins]

108. Thanks... but...

...not you're an evil borg bankster too.

Sorry to taint you by association. :)

[truedelphi]

116. Hey -- I don't know you that well. You very well COULD be

An evil borg bankster, or a blood sucking vampire.

But still and all your idea on this was a good one.

PS I could be a blood sucking vampire as well, ya know. That red stuff around my mouth could be something other than strawberry jam.

[Hugin]

53. There is a glaring error in this article...

"The banks' turnaround comes as credit card reforms passed earlier this year will soon limit banks' ability to raise fees and interest rates and require greater disclosure about costs."

The Law passed, SPECIFICALLY does not cap or affect a Bank's ability to raise Interest Rates... The AP needs to get their head-out-of-their-ass and do some fact checking... Or they run the risk of being thrown in the Propaganda Bin along with Faux News-like.

[FBaggins]

64. That isn't an error.

The law does limit the bank's ability to raise the rate on your credit card to certain circumstances:

* - End of a promotional period
* - A defined adjustable rate basis adjusts.
* - You make a late payment (now THERE is a can of worms, but it at least ends the practive of raising your rate based on late payments to OTHERS and requires you to be at least 60 days late... so none of this late-posting BS)
* - After one year with at least 45 days notice.

These go in to effect early next year.

[ozymandius]

7. House bill adds to jobless benefits in 27 states

WASHINGTON – With no end in sight to the country's job market woes, the House has agreed to give the jobless in a majority of states another 13 weeks of unemployment insurance benefits.

The bill, which passed the House 331-83 , approves the extra three months of benefits for those jobless living in 27 states, plus the District of Columbia and Puerto Rico, with unemployment rates topping 8.5 percent. Similar legislation is pending in the Senate. The longtime unemployed in states with lower levels of joblessness would not get the extension.

.....

About 5 million of those unemployed, about one-third of the total, have been out of work for six months, another figure that far outpaces recent recessions. There are about six people looking for every job available.

.....

McDermott said his bill would cost $1.4 billion but does not add to the deficit because it raises money from extension for a year of a federal unemployment tax, costing about $14 an employee per year. That tax, which brings in about $7.2 billion in a year, has been on the books for 30 years, with the money going into the federal unemployment insurance trust fund. The bill would also require better reporting on new employees to reduce unemployment insurance overpayments.

http://news.yahoo.com/s/ap/20090923/ap_on_go_co/us_unemployment_benefits

[ozymandius]

9. Whoops: Anti-ACORN Bill Ropes In Defense Contractors, Others Charged With Fraud

Going after ACORN may be like shooting fish in a barrel lately -- but jumpy lawmakers used a bazooka to do it last week and may have blown up some of their longtime allies in the process.

The congressional legislation intended to defund ACORN, passed with broad bipartisan support, is written so broadly that it applies to "any organization" that has been charged with breaking federal or state election laws, lobbying disclosure laws, campaign finance laws or filing fraudulent paperwork with any federal or state agency. It also applies to any of the employees, contractors or other folks affiliated with a group charged with any of those things.

In other words, the bill could plausibly defund the entire military-industrial complex. Whoops.

.....

Lockheed Martin and Northrop Gumman both popped up quickly, with 20 fraud cases between them, and the longer list is a Who's Who of weapons manufacturers and defense contractors.

Read more at: http://www.huffingtonpost.com/2009/09/22/whoops-anti-acorn-bill-ro_n_294949.html

---

Edit to mention: Who knew that ACORN and Republicans would work together on the largest deficit reduction package in history?

[Demeter]

13. It's Like Nixon Era All Over Again

I seem to recall Congress laid a few eggs in his time, before Watergate emptied out the coop.

[tclambert]

32. I believe I heard this bill passed the House, but the Senate hasn't voted on it yet.

The GOP got it added as an amendment to a student loan bill.

Filing fraudulent paperwork? Lordy, they're going after typos! Spellcheck everything! (Spellcheck just highlighted spellcheck! My spellchecker doesn't recognize spellcheck. Now this is really weird. It accepted spellchecker. Hey, spellcheck, can you spell i-r-o-n-y?)

[ozymandius]

11. Fed likely to leave economic supports in place

WASHINGTON – Nurturing a nascent recovery, Federal Reserve policymakers are sure to leave a key interest rate at a record low and probably will keep other economic supports in place.

Fed Chairman Ben Bernanke and his colleagues are slated to wrap up a two-day meeting Wednesday afternoon, when they are expected to announce that the recession is likely over and that the nation's economic and financial climate is improving. But they'll also warn that rising unemployment, and still hard-to-get-credit for many people and companies, will make for a plodding rebound.

.....

Of great interest is whether the Fed will make any changes to a program intended to lower rates on home mortgages and support the housing market.

Not wanting to pull the plug too soon and risk short-circuiting progress, the Fed could opt at Wednesday's meeting — or perhaps later this year — to extend the program, some analysts said. The Fed's current goal is to buy $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae and Freddie Mac by year-end. Roughly $775 billion has been bought so far.

The Fed also could gradually reduce the size of its purchases.

http://news.yahoo.com/s/ap/20090923/ap_on_bi_ge/us_fed_interest_rates

[Demeter]

12. Reform or Bust By PAUL KRUGMAN

http://www.nytimes.com/2009/09/21/opinion/21krugman.html?_r=1&hp



In the grim period that followed Lehman’s failure, it seemed inconceivable that bankers would, just a few months later, be going right back to the practices that brought the world’s financial system to the edge of collapse. At the very least, one might have thought, they would show some restraint for fear of creating a public backlash.

But now that we’ve stepped back a few paces from the brink — thanks, let’s not forget, to immense, taxpayer-financed rescue packages — the financial sector is rapidly returning to business as usual. Even as the rest of the nation continues to suffer from rising unemployment and severe hardship, Wall Street paychecks are heading back to pre-crisis levels. And the industry is deploying its political clout to block even the most minimal reforms.

The good news is that senior officials in the Obama administration and at the Federal Reserve seem to be losing patience with the industry’s selfishness. The bad news is that it’s not clear whether President Obama himself is ready, even now, to take on the bankers.

Credit where credit is due: I was delighted when Lawrence Summers, the administration’s ranking economist, lashed out at the campaign the U.S. Chamber of Commerce, in cooperation with financial-industry lobbyists, is running against the proposed creation of an agency to protect consumers against financial abuses, such as loans whose terms they don’t understand. The chamber’s ads, declared Mr. Summers, are “the financial-regulatory equivalent of the death-panel ads that are being run with respect to health care.”

Yet protecting consumers from financial abuse should be only the beginning of reform. If we really want to stop Wall Street from creating another bubble, followed by another bust, we need to change the industry’s incentives — which means, in particular, changing the way bankers are paid.

What’s wrong with financial-industry compensation? In a nutshell, bank executives are lavishly rewarded if they deliver big short-term profits — but aren’t correspondingly punished if they later suffer even bigger losses. This encourages excessive risk-taking: some of the men most responsible for the current crisis walked away immensely rich from the bonuses they earned in the good years, even though the high-risk strategies that led to those bonuses eventually decimated their companies, taking down a large part of the financial system in the process.

The Federal Reserve, now awakened from its Greenspan-era slumber, understands this problem — and proposes doing something about it. According to recent reports, the Fed’s board is considering imposing new rules on financial-firm compensation, requiring that banks “claw back” bonuses in the face of losses and link pay to long-term rather than short-term performance. The Fed argues that it has the authority to do this as part of its general mandate to oversee banks’ soundness.

But the industry — supported by nearly all Republicans and some Democrats — will fight bitterly against these changes. And while the administration will support some kind of compensation reform, it’s not clear whether it will fully support the Fed’s efforts.

I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”

That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that.

All I can think is that this was another example of something we’ve seen before: Mr. Obama’s visceral reluctance to engage in anything that resembles populist rhetoric. And that’s something he needs to get over.

It’s not just that taking a populist stance on bankers’ pay is good politics — although it is: the administration has suffered more than it seems to realize from the perception that it’s giving taxpayers’ hard-earned money away to Wall Street, and it should welcome the chance to portray the G.O.P. as the party of obscene bonuses.

Equally important, in this case populism is good economics. Indeed, you can make the case that reforming bankers’ compensation is the single best thing we can do to prevent another financial crisis a few years down the road.

It’s time for the president to realize that sometimes populism, especially populism that makes bankers angry, is exactly what the economy needs.

[ozymandius]

14. The last sentence -

It’s time for the president to realize that sometimes populism, especially populism that makes bankers angry, is exactly what the economy needs.

Hear! Hear!

[Joe Chi Minh]

33. It's a shame it needed to be articulated at all. There is a worrying

inconsistency in Obama's reasoning in the face of the opposition of very strong vested interests. Taking the flak from the public immediately, and then doing what they want in his own time, rather than taking on the big battallions head-on, evidently works well in many cases, but sometimes occasions arise when he needs to simply "lower the boom".

The golden rule should be: Is what they are doing/ have done outrageous beyond belief? If so "lower the boom" hard and fast without any compunction whatsoever, or you may be a party to more criminal activities on their part. I believe I read a headline that suggested that some progress had been made in unravelling some of the massive fraud involved in the subprime fiasco.

[Demeter]

39. The Financial Times on Subprime Fraud

From Naked Capitalism on August 9, 2007

http://www.nakedcapitalism.com/2007/08/financial-times-on-subprime-fraud.html




The Financial Times has a thorough story today, “US seeks culprits for subprime,” on who is to blame for the subprime mess. Short answer: just about everybody involved. It isn’t until the fourth paragraph that the authors invoke the word “fraud” but that’s what it’s all about The piece recounts the sorry tale of the numerous deceptions used, yet because it takes some time for the loans to go a cropper, it is doubtful that many of the perps (save egregious cases, like Beazer Homes, where the sales agents reportedly inflated borrower incomes and net worth without their knowledge) can be prosecuted successfully.

From the FT:

At the height of the US subprime lending boom, taking out a mortgage could not have been easier. Low credit score and history of bankruptcy? No problem. Income too low to qualify for a mortgage? Inflate what you earn on a “stated income” loan. Nervous that your lender might check up on your “stated income”? Visit www.verifyemployment.net.

For a $55 fee, the operators of this small California company will help you get a loan by employing you as an “independent contractor”. They provide payslips as “proof” of income and, for an additional $25, they also man the telephones to give you a glowing reference should your lender need it.

But perhaps the most absurd aspect of the US subprime mortgage market in recent years is that lenders became so generous with credit provision for out-of-pocket borrowers that very few checks were ever made.

That left the system extraordinarily vulnerable to widespread fraud, a possibility that federal and state prosecutors across the US have begun to look into. With the subprime crisis expected to cost investors between $50bn (£24bn, €36bn) and $100bn, according to the US Federal Reserve, these investigations could transform it from a market correction to a full-blown national scandal.

At the root of the subprime problem was easy credit: lenders and their brokers were often rewarded for generating new mortgages on the basis of volume, without being directly exposed to the consequences of borrowers defaulting. During several years of strong capital markets and strong investor appetite for high-yielding securities, lenders became accustomed to easily selling the risky home loans they made to Wall Street banks. The banks in turn packaged them into securities and sold them to investors around the globe.

Such ease of mortgage funding allowed thousands of borrowers to get away with fraudulently mis-stating their incomes, often with the encouragement of their brokers. More ambitious fraudsters appear to have taken out multiple mortgages and walked away with the cash.

Karen Gelernt, a partner at law firm Cadwalader, Wickersham & Taft, says: “The difficulty is getting a handle on the size of the problem, because there is no real mechanism for reporting fraud for most originators in this market. In fact, they had every incentive not to report.”

Fraud has been detected up and down the financing chain: just as borrowers have lied to get better rates and larger loans, mortgage brokers and loan officers have lied to borrowers about the terms of their loans and may also have lied to the banks about the qualifications of the borrowers. Appraisers, likewise, have lied about the value of the properties involved.

“The recent rapid expansion of the subprime market was clearly accompanied by deterioration in underwriting standards and, in some cases, by abusive lending practices and outright fraud,” Ben Bernanke, Fed chairman, recently told lawmakers. With mortgage rates rising and house prices falling, subprime borrowers have been defaulting at record rates.

The fallout is working its way up from the retail level – forcing people out of their homes and lenders into bankruptcy. Investment banks have lost revenue as investors back away from mortgage securities and a handful of high-profile hedge funds have collapsed – most notably two highly leveraged funds managed by Bear Stearns. The crisis has contributed to turmoil in financial markets in recent weeks and could threaten the health of the US economy as lenders tighten access to credit, putting a drag on consumer spending.

For some, this rapid and dramatic unravelling of the subprime lending industry has echoes of the costly savings and loans crisis of the early 1980s – a meltdown that also had its origins in financial market innovation and inadequate oversight, and which many cite as a contributing factor in the 1990-91 economic recession. That crisis ended with a federal bail-out of $150bn and a handful of high-profile convictions for fraud.

This time around, the major losers have been hedge funds, which in theory are limited to wealthy investors. But some analysts believe the pain could spread – many pension funds and college endowments have turned to hedge funds to heat up their returns and some, including Harvard University, are starting to get their fingers burned. Harvard is estimated to have lost $350m of the $550m it invested in a hedge fund run by Jeffrey Larson, a former Harvard money manager, that collapsed recently as a result of positions related to the subprime market.

If the losses trickle down and end up hurting small investors, pressure may grow for a public bail-out. Rumours swept the market earlier this week that Fannie Mae and Freddie Mac, the government-backed mortgage agencies, might get the authority to make sweeping purchases of underpriced mortgage securities.

“The US mortgage landscape has become a top-of-mind political talking point, and we would not be surprised to see the usual ‘flow like mud’ legislative process fast-tracked with respect to items offering relief to the troubled mortgage market,” says Louise Purtle, strategist at CreditSights, a research firm.

Most fraud in subprime lending appears to have been so-called “fraud for purchase” – lying about income so as to win a mortgage approval. In reviewing a sample of “no doc” loans that relied on borrowers’ statements, the Mortgage Asset Research Institute recently found that almost all would-be home owners had exaggerated their income, with almost 60 per cent inflating it by more than 50 per cent.

These fraudulent borrowers are often difficult to uncover, says Ms Gelernt, because they often stretch to meet their minimum payments for some time before they eventually default. The time lag between initial fraud and default also makes a conviction hard to obtain, she adds, while mortgage investors also have little chance of recovering their losses from individual borrowers in these circumstances.

Many of the originators to blame for poor quality control standards may not be held to account either – with several such lenders already in bankruptcy. “There’s a real problem in finding fraud after the fact because the money is already out the door and you won’t get the recovery,” says Ms Gelernt.

Loose lending standards also facilitated fraud for profit. US prosecutors around the country have broken up at least a dozen mortgage fraud rings and more cases are expected.

In one New York case, the FBI charged 26 people who used stolen identities, invented purchasers and inflated appraisals to obtain subprime loans on more than $200m of property. In an Ohio case, 49 per cent of the mortgages processed by a single broker never made even a first payment.

The fate of a series of North Carolina neighbourhoods built by Beazer Homes may offer a foretaste of the looming problem. Low income home-buyers around Charlotte have sued the builder alleging that its lending arm steered them into mortgages they could not afford, leading to widespread foreclosures.

The homeowners allege that sales agents misrepresented their personal data, including assets and income, to help them qualify for government-insured mortgages starting in 2002. By the beginning of this year, 10 Beazer subdivisions in Charlotte had foreclosure rates of 20 per cent or higher, compared with 3 per cent state-wide, according to a local newspaper analysis.

The FBI is probing Beazer for possible fraud and the US Housing and Urban Development is examining whether its sales practices violated government-insured mortgage rules. Beazer has defended its sales practices and says it has a “commitment to managing and conducting business in an honest, ethical and lawful manner”. In June it announced that it had fired its chief accounting officer for allegedly attempting to destroy documents. The company’s shares have lost 75 per cent of their value since the probes began.

Several state attorneys-general are also on the trail. Andrew Cuomo of New York state made headlines this spring with a series of subpoenas to property appraisal companies and has said publicly that he is probing the entire industry. Sources familiar with the office’s work say the investigation is still at a relatively early stage.

Marc Dann, the Ohio attorney- general, is looking further up the funding chain. He has been outspoken in his criticism of the role the financial services industry may have played in the large numbers of foreclosures in his state. “There’s a whole series of people that knew or should have known that there was fraud in the acquisition of these mortgages,” Mr Dann told the Financial Times. “We’re looking at ways to hold everybody who aided and abetted that fraud.”

Mr Dann’s office is looking at brokers, appraisers, rating agencies and securitisers and plans to use several legal methods to hold bad actors accountable. The Ohio attorney-general not only has criminal enforcement powers, but also represents the third-largest set of public pensions in the country and can thus file civil lawsuits on behalf of investors.

“But for the mechanism of packaging these loans, the fraud never would have existed,” Mr Dann says. “We’re following this trail from homeowner to bondholder.” He says his investigation could take six months to a year to bear fruit.

The Securities and Exchange Commission, for its part, is investigating whether Bear Stearns and other hedge fund managers were forthright about disclosing the rapidly declining value of their holdings.

Many of the mortgage-related securities bought by the hedge funds are rarely traded and difficult to value accurately. They are often valued in portfolios according to complex mathematical models because real market prices are not available, making it possible to disguise underperformance if models are not updated.

The SEC has not brought a case in the area so far, but current and former regulators note that it has previously won settlements from several mutual funds and banks that failed to revise the prices of illiquid assets during a falling market.

Private securities lawyers are also starting to file securities fraud lawsuits on behalf of investors who have lost out because of the subprime meltdown.

Jake Zamansky, a lawyer who negotiated an early settlement from Merrill Lynch in the scandal over skewed investment bank research, has filed an arbitration claim against Bear Stearns alleging the firm misled investors about its exposure to the mortgage-backed securities market.

The class action law firm of Bernstein Litowitz is also preparing a claim against Bear Stearns, alleging the firm made material mis-statements in the offering documents for its now defunct hedge funds.

“This was simply about a hedge fund strategy that failed,” said a Bear Stearns spokesman. “We plan on defending ourselves vigorously against the allegations in these complaints.”

Other hedge funds may also come under political or legal pressure over their role in the loan crisis.

Richard Carnell, a professor at Fordham law school, says it may be possible to hold the investment banks that securitised the mortgages at least partially responsible in the case of a major collapse of the market. “There are two things you can object to in the securitisers’ conduct: failing to disclose material facts about the credit quality of the mortgages; and you can also criticise them for acting as an enabler for someone they know is a bad actor,” he says.

But putting together a case will not be easy because the hedge funds and other investors who bought such securities are presumed to be sophisticated about financial matters. This means it will be harder for them to prove they were not properly warned about the risks involved.

In the case of the Bear Stearns funds, investors may face new hurdles to recovering any money through US lawsuits. Though the funds operated mostly in New York, they were incorporated in the Cayman Islands and that is where they have filed for bankruptcy. In what could be a test case for international bankruptcy laws, the liquidators have applied to the US courts asking them to block US lawsuits during the liquidation process.

Bear Stearns said in a statement: “Because the two funds are incorporated in the Cayman Islands, the funds’ boards filed for liquidation there . . . The return to creditors and investors will be based on the underlying assets and liabilities of the funds not on the location of the filing.”

Even if the US lawsuits do go forward, a case pending before the Supreme Court could also prove crucial to investors who hope to make a case that hedge funds and rating agencies enabled widespread fraud.

In Stoneridge Investment Partners v Scientific Atlanta, the court is considering whether investors can recover from firms – including accountants, lawyers and bankers – that help a public company commit fraud by participating in a “scheme to defraud”. If the high court rules against “scheme liability”, investors who lost money in the subprime market will have very few places to turn to try to get some of it back.

William Poole of the Federal Reserve Bank of St. Louis thinks that this may be what investors who lose money on subprime mortgage-linked securities deserve for not looking at them closely enough.

Criticising Wall Street underwriting standards recently, he said: “The punishment has been meted out to those who have done misdeeds and made bad judgments. We are getting good evidence that the companies and hedge funds that are being hit are the ones who deserve it.’’

[Joe Chi Minh]

70. Thanks for this. When it comes to chasing up and punishing fraud your country has always

been way ahead of most, I think. Perhaps, every other country. Certainly the UK.

But the repeal of the pre-emptive legislation, Glass-Stegall, etc, with its effects seems to have led to such a fiasco. In fact, I read somewhere on here that the subprime disaster was relatively minor, when compared with those toxic thinggies. I spotted this just now:

http://blogs.reuters.com/felix-salmon/2009/04/30/when-will-larry-summers-apologize/

[tclambert]

75. On another thread, Pharaoh suggested we need a Maximum Wage.

He proposed $2 million/year. He figures if you can't make it on two mil, then "tough." http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8665239#8666191

My wife suggested a further refinement that I really, really liked: Link the maximum wage to the minimum wage. For instance, set Maximum Wage = 100 times the Minimum Wage. If full time minimum wage yields $20,000 a year (who can live on that?), then you can have a $2 million per year maximum wage. And when the top earners want to raise the maximum (ya think that might happen?), then they have to, have to accept raising the minimum wage.

Thoughts? Discussion?

(Edited to add link to original thread.)

[Joe Chi Minh]

78. McArthur introduced that in Japan after WWII, and a very restrictive multiple

it was, too, for the CEOs. I think it was double figures. I expect it was intended to punish the warlords but Japan certainly seemed to thrive under that regime. The multiple of the CEO's compensation in relatin ot that of the entry-level employee and has risen enormously since WWII. In the UK, too, though not I think as much.

At the moment, though, I think you've got mine and Buckley's chance of introducing such a measure in the US, however timid. Roosevelt might have, but he'd have gone through the whole thing like a dose of salts. On the other hand, if the other foot has yet to drop in this saga, patience may well be the best policy.

[Demeter]

100. a Ten to One Differential Is More Than Plenty

I believe Europe works with even less....

Bonuses, royalties, and the like can make a big reward for duty above and beyond the call (and only if it's legal!)

[Joe Chi Minh]

115. This is what I found on the Economic Times of India website, when I googled

the question:

"NEW DELHI: The million-dollar pay packets of top executives is exaggerating the difference between salaries paid at the top and bottom rung of
India Inc. The ratio between the pay packet of top management and entry level white-collared employees is averaging around 19 times, which is much higher than the global level and is infact the highest in the world.

The corresponding multiple for most developed countries which figure in the bracket of 9-15 times, according to a Hewitt Associates study. Whats more the average salary multiple for China, another emerging market, is also much lower at around 8-10 times.

If anything, the data for India understates the salary differential. For instance, several CEOs are being paid in the Rs 5 crore range, which would mean that the differential multiple would be nearer 100."

Is the author talking about the same thing, when he refers to the "ratio" of 19 times and and a "differential mutiple closer to 100", Demeter?

I get the impression there are evidently two, associated kinds of figures, and in my post re Japan and McArthur, I confused them. But I certainly feel confused now, because figures I had read about in relation to the US, Europe and UK were in the high hundreds and a thousand plus plenty. I can't think now how they would have related to this issue, even if they referred to the very lowest-paid worker not on the staff and the CEO.

[ozymandius]

15. Asian Markets Dip Lower Ahead of G-20

HONG KONG -- Chinese markets ended down Wednesday as investors, spurred by a weakening dollar, favored commodities and awaited news from the G-20 conference and the U.S.'s Federal Reserve.

Hong Kong's benchmark Hang Seng index closed down 0.5% at 21,595.52 points while the Shanghai Composite Index lost nearly 1.9% to finish at 2,842.72.

.....

India's benchmark Sensex 30 traded 0.5% lower at 16,794.54 on Wednesday afternoon. Several India companies, including construction and engineering firm Jaiprakash Associates and drug maker Cipla Ltd, raised a total of $530 million in share sales on Wednesday. Meanwhile, Ford disclosed Wednesday that it would produce a low-cost compact car called "Figo" in India from early next year. Ford is planning to double its production capacity at its Chennai factory to 200,000 vehicles a year.

.....

A red dust storm that grounded planes and obscured landmarks from sight descended upon Sydney Wednesday after it blanketed the nation's capital, Canberra, the previous day. The S&P/ASX 200, the benchmark index for Sydney's stock exchange, ended the day at 4,734,10, up 1.51%.

http://www.forbes.com/2009/09/23/asia-briefing-close-markets-equity-china-commodities.html

[Festivito]

16. Debt: 09/21/2009 11,811,086,447,487.95 (UP 3,419,329,190.28) (Down a bit, and up a bit.)

(Debt down nearly one-third billion, FICA rises nearly three-and-three-quarters billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,504,401,248,855.73 + 4,306,685,198,632.22
DOWN 319,092,626.95 + UP 3,738,421,817.23

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 308-Million person America.
If every American, man, woman and child puts in $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.76, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,504,821 people in America.
http://www.census.gov/population/www/popclockus.html ON 08/24/2009 13:24 -> 307,261,605
Currently, each of these Americans owe $38,409.44.
A family of three owes $115,228.31. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 31 days.
The average for the last 20 reports is 4,591,412,747.45.
The average for the last 30 days would be 3,060,941,831.63.
The average for the last 31 days would be 2,962,201,772.55.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 167 reports in 244 days of Obama's part of FY2009 averaging 7.05B$ per report, 4.85B$/day so far.
There were 242 reports in 356 days of FY2009 averaging 7.38B$ per report, 5.02B$/day.

PROJECTION:
There are 1,217 days remaining in this Obama 1st term.
By that time the debt could be between 13.5 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
09/21/2009 11,811,086,447,487.95 BHO (UP 1,184,209,398,574.87 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,786,361,550,575.50 so far this fiscal year, broken down below:
Borrowed in FY2009: 0,602,152,152,000.59 in part from time during Bush reign.
Borrowed in FY2009: 1,184,209,398,574.87 in part since Obama takes over.


LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/28/2009 +000,123,059,531.85 ------------********
09/01/2009 +087,210,147,628.98 ------------********** Tue
09/02/2009 +000,313,556,741.81 ------------********
09/03/2009 -005,471,580,596.27 --
09/04/2009 +000,000,664,126.38 ------------*****
09/08/2009 -000,191,031,319.46 --- Tue
09/09/2009 +000,137,837,081.44 ------------********
09/10/2009 +012,326,876,265.82 ------------**********
09/11/2009 +000,017,033,887.43 ------------*******
09/14/2009 -000,193,915,837.32 --- Mon
09/15/2009 +034,695,222,864.03 ------------**********
09/16/2009 +000,121,771,969.62 ------------********
09/17/2009 -017,941,949,432.55 -
09/18/2009 -000,312,998,363.37 ---
09/21/2009 -000,319,092,626.95 --- Mon

110,515,601,921.44 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4071184&mesg_id=4071224

[Demeter]

18. There’s No Flu Shot for the Thrift Bug by Bill bonner

http://dailyreckoning.com/theres-no-flu-shot-for-the-thrift-bug/

What's a consumer economy need in order to keep growing?

Uh...it's needs consumer spending.

What do consumers need in order to boost spending?

Uh...they need more money!

Oh, there's where it all starts to come apart, doesn't it? Where do they get more money? They either earn it...or they borrow it. And right now, they can't earn it - not with 12% unemployment in California! Workers have no bargaining power. And they can't borrow it either. The banks won't lend - not with the value of their collateral still falling.

Word comes this morning that mortgage delinquencies have hit a new record. And here's a headline warning of worse to come:

"$30 billion home loan time bomb set for 2010."

Even solvent homeowners who aren't forced into foreclosure still find it beneficial to walk away from their houses. "Strategic defaults,' says The Los Angeles Times, are becoming a problem for mortgage lenders.

We didn't read the article. Instead, we began to think. What if we owned a house worth $200,000 with a $300,000 mortgage? What would be the smart thing to do? Easy...walk away from it. Then, buy it back at auction!

Desperate consumers do what they have to do. Canny consumers do what's smart. And now it's smart to walk away from any debt that you don't actually have to pay.

As for adding more debt, you can gage yourself from the comments above, consumers are not eager to borrow. They've seen what happens when they go too far into debt. They're older and wiser than they were in the bubble years. It's been 10 years since the tech bubble exploded. Since then, stock market investors have made nothing - zero. And now houses are falling too.

So, if a fellow needs money for his retirement, where is he going to get it? Not from his house. Not from a pay raise. And not from his stocks either. He needs savings. He needs real money.

Americans aren't so stupid after all. When they need to stop spending, they stop spending. When they need to save, they save. Too bad about the economy.

Yes, what is good for individuals seems to be bad for the economy. When people save instead of spend, the consumer economy stalls. And then economists think there is something wrong. They think an economy needs to expand constantly. And so, they try to find 'solutions' to the 'problem.'

Actually, there is no problem at all. It's just the way capitalism works. There are booms. And there are busts. Periods of growth...and periods when the mistakes made during the boom are corrected. There's a time for every purpose under heaven. That's the way it works. The economy breathes in and it breathes out.

And there's always some dumb economist trying to smother it with a pillow!

No matter what the government does, this 'recovery' is nothing but a fraud - and you are losing money because of it. The government is robbing you blind - dipping into your savings and retirement accounts...and the average American is none the wiser.

........................................................................

So far, the feds have put at risk about $13 trillion in order to counteract the downturn. This is about equal to the amount that Americans had lost in the crash. But while the crash wiped out $13 trillion in housing and stock market wealth, the feds have no obvious way to put the money back. Banks were easy to reflate. Bankers and federales are tight with each other; they're happy to share out the taxpayers' money. But getting money to the consumer is a different matter. The banks don't lend and the consumers don't borrow.

Of the $13 trillion the feds have put at risk...very little has actually made its way to the consumer economy. Result: no new boom in consumer spending...no new boom in hiring...no new boom in production or profits.

[Demeter]

20. 5 Minute Forecast

"Yesterday we reported, with a little unease, one of the biggest gold sales in history. The IMF is looking to get rid of an eighth of its reserves - over 400 metric tons worth $13 billion. They'd been publicly mulling it for a long time, but still...can't be a positive for gold prices.

"Today, some better news and a sign of the times, wrapped into one: China is rumored to be a buyer of the IMFs stash for sale - maybe the only buyer.

"'China will consider buying if the price is right and the return is relatively high,' a mystery Chinese central banker told Reuters. No telling just how much they'd pick up, but given their $800 billion in US treasury reserves, we're pretty sure they could afford as much as they want.

"(For some perspective, go grab one of your one ounce gold coins. If you had 32,149 more, you'd own one metric ton. If China completes this purchase - all 400 tons - that'll be enough gold to fill a 8'x10' office to the ceiling.)

"'China holds just over 1,000 tons of gold in its official state reserves,' notes Byron King, who always has a finger on the gold beat. 'Probably more, if you consider 'stealth' holdings categorized as industrial stockpiles. If China buys up to 400 tonnes of gold from the IMF, it'll increase China's reserves by 40% in one fell swoop. (And stick the IMF with a bunch of depreciating dollar-assets.)

"'Will an IMF gold sale to China affect prices? If done correctly, no - or not much, in the short term. Because if done correctly, it'll happen quietly... there won't be any announcements beforehand, and we'll only find out about it when the IMF and China next report their gold holdings. It's not like any Chinese trucks will be showing up at the mines and refineries, taking 'current' production. That's exactly the way that the Chinese want this to happen.

"'Still, it'll dramatically increase China's gold holdings, strengthening their long term monetary hand. China does NOT want to see the world go to a non-dollar 'gold-like' standard... not yet.

"'Because China does not have enough gold in its vaults... not yet!'



China vs. Global Gold Reserves

"'On that point, they're working on it. It'll take time. It's a long- term play, a long-term strategy. That's why investors have to keep an eye on the long term, and buy gold and mining shares now...for the future of inflation, and as the wheel of history turns towards China.'"

[ozymandius]

19. A Coming Flood of Bank Owned Homes

“There’s going to be a flood of bank-owned homes listed for sale at some point.”

-John Burns, a real-estate consultant based in Irvine, Calif.

Yes, there certainly will be. Burns estimates there will be a “large numbers of foreclosures” that will drive home prices down 6% next year. Analyst Ivy Zelman pegs the number of coming foreclosures at three million to four million homes over the next few years.

All of the voluntary foreclosure moratoriums have slowed “the flow of properties headed toward foreclosure sales” regardless of deep in distress borrowers are. These delays only work to prolong the mortgage crisis and prevent prices from falling to more natural levels.

Thus, it creates a “growing ’shadow’ inventory of pent-up supply that will eventually hit the market.”

more...

http://www.ritholtz.com/blog/2009/09/a-coming-flood-of-bank-owned-homes/

[ozymandius]

23. WSJ: Delayed Foreclosures and "Shadow" Inventory

From Ruth Simon and James Hagerty at the WSJ: Delayed Foreclosures Stalk Market:

... Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. ... some analysts believe the delays are ... creating a growing "shadow" inventory of pent-up supply that will eventually hit the market.
...
Ivy Zelman ... believes three million to four million foreclosed homes will be put up for sale in the next few years. The question is whether the flow of these homes onto the market will resemble "a fire hose or a garden hose or a drip," she says.

A bit more to read at Calculated Risk...

[Demeter]

27. Landmark Decision Promises Massive Relief For Homeowners And Trouble For Banks By Ellen Brown

http://www.informationclearinghouse.info/article23557.htm

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.

Eliminating the “Straw Man” Shielding Lenders and Investors from Liability

The development of “electronic” mortgages managed by MERS went hand in hand with the “securitization” of mortgage loans – chopping them into pieces and selling them off to investors. In the heyday of mortgage securitizations, before investors got wise to their risks, lenders would slice up loans, bundle them into “financial products” called “collateralized debt obligations” (CDOs), ostensibly insure them against default by wrapping them in derivatives called “credit default swaps,” and sell them to pension funds, municipal funds, foreign investment funds, and so forth. There were many secured parties, and the pieces kept changing hands; but MERS supposedly kept track of all these changes electronically. MERS would register and record mortgage loans in its name, and it would bring foreclosure actions in its name. MERS not only facilitated the rapid turnover of mortgages and mortgage-backed securities, but it has served as a sort of “corporate shield” that protects investors from claims by borrowers concerning predatory lending practices. California attorney Timothy McCandless describes the problem like this:

“ has reduced transparency in the mortgage market in two ways. First, consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name – even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers’ discovery requests with respect to predatory lending claims and defenses. In effect, the securitization conduit attempts to use a faceless and seemingly innocent proxy with no knowledge of predatory origination or servicing behavior to do the dirty work of seizing the consumer’s home. . . . So imposing is this opaque corporate wall, that in a “vast” number of foreclosures, MERS actually succeeds in foreclosing without producing the original note – the legal sine qua non of foreclosure – much less documentation that could support predatory lending defenses.”

The real parties in interest concealed behind MERS have been made so faceless, however, that there is now no party with standing to foreclose. The Kansas Supreme Court stated that MERS’ relationship “is more akin to that of a straw man than to a party possessing all the rights given a buyer.” The court opined:

“By statute, assignment of the mortgage carries with it the assignment of the debt. . . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.”

MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a “security.” The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game; but they have no standing to foreclose, because they were not signatories to the original agreement. They cannot satisfy the basic requirement of contract law that a plaintiff suing on a written contract must produce a signed contract proving he is entitled to relief.
The Potential Impact of 60 Million Fatally Flawed Mortgages

The banks arranging these mortgage-backed securities have typically served as trustees for the investors. When the trustees could not present timely written proof of ownership entitling them to foreclose, they would in the past file “lost-note affidavits” with the court; and judges usually let these foreclosures proceed without objection. But in October 2007, an intrepid federal judge in Cleveland put a halt to the practice. U.S. District Court Judge Christopher Boyko ruled that Deutsche Bank had not filed the proper paperwork to establish its right to foreclose on fourteen homes it was suing to repossess as trustee. Judges in many other states then came out with similar rulings.

Following the Boyko decision, in December 2007 attorney Sean Olender suggested in an article in The San Francisco Chronicle that the real reason for the bailout schemes being proposed by then-Treasury Secretary Henry Paulson was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. Olender wrote:

“The sole goal of the is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

“. . . The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC . . . .

“What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back.”

Needless to say, however, the banks did not buy back their toxic waste, and no bank officials went to jail. As Olender predicted, in the fall of 2008, massive taxpayer-funded bailouts of Fannie and Freddie were pushed through by Henry Paulson, whose former firm Goldman Sachs was an active player in creating CDOs when he was at its helm as CEO. Paulson also hastily engineered the $85 billion bailout of insurer American International Group (AIG), a major counterparty to Goldmans’ massive holdings of CDOs. The insolvency of AIG was a huge crisis for Goldman, a principal beneficiary of the AIG bailout.

In a December 2007 New York Times article titled “The Long and Short of It at Goldman Sachs,” Ben Stein wrote:

“For decades now, . . . I have been receiving letters me about the dangers of a secret government running the world . . . . he closest I have recently seen to such a world-running body would have to be a certain large investment bank, whose alums are routinely Treasury secretaries, high advisers to presidents, and occasionally a governor or United States senator.”

The pirates seem to have captured the ship, and until now there has been no one to stop them. But 60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress – serious enough perhaps even to pry the legislature loose from the powerful banking lobbies that now hold it in thrall.

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com .

[DemReadingDU]

31. Karl Denninger: Some Background

9/22/09 Per Karl Denninger
A bit of background is in order.

A mortgage is a combination of a promissory note (that is, a promise to pay) and a security instrument. That is, there's a deed of trust and a debt (the promissory note.)

State law governs foreclosure and most states require as a matter of statute that these two items remain intact. Further, most states require as a matter of statute (that is, law!) that to foreclose you must present proof that you actually have an enforceable interest. In many cases this requires what is known as a "wet signature" - that is, the actual original signed document from the debtor confirming agreement to be bound to the terms. In addition you must establish ownership of that document - that is, you must show an unbroken chain of assignments from the originating bank to your hand.

This is where the problem comes in - the originating lender has no standing to foreclose once he sells off the mortgage. He was paid in full and thus has no standing to appear in court.


MERS' web page says this:

MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.


They may as well have said "we have decided that we can abrogate state law with impunity." Oh wait - they did, didn't they?

Sorry folks, life doesn't work that way.

If state law requires an unbroken chain of recorded assignments in order to document ownership of a mortgage and thus standing to foreclose, MERS cannot override this state law by fiat.

more...
http://market-ticker.org/archives/1454-Has-A-MERShole-Opened-Up.html

[Po_d Mainiac]

36. If this catches on in other states

There will not be a massive "right down" or "mark-to-market" re-assessment. Can you say "write off"...I knew u could.

How much of this crap is on the Feds balance sheet? :scared:

[Hugin]

51. Good and interesting piece, Demeter.

At least for now, it would seem the Courts at least are skewed toward protecting the Demand-side.

[Hugin]

48. The local right-wing fish-wrap had THREE PAGES of foreclosure court-house-steps auction...

announcements for this week alone! Three pages! For anyone unaware, usually the announcement of a sale is posted in the classified section of a newspaper in the tiniest font imaginable. It had to number in the hundreds.

Job opening announcements, you ask? Three... and two of them were perpetual ads for constantly open telemarketing positions.

[Demeter]

24. Beijing begins petrol supplies to Iran

http://www.ft.com/cms/s/0/b858ace8-a7a4-11de-b0ee-00144feabdc0.html

Chinese state companies this month began supplying petrol to Iran and now provide up to one-third of its imports in a development that threatens to undermine US-led efforts to shut off the supply of fuel on which its economy depends...

[Demeter]

25. BNP to start paying back state funds early

http://www.ft.com/cms/s/0/6e1aa874-a7af-11de-b0ee-00144feabdc0.html

BNP Paribas, France’s biggest bank, is set to launch an early repayment of government bail-out money within months...

[bread_and_roses]

28. I think the window of opportunity is gone

Right after the innauguration Obama had the wind at his back. We could have restructured and re-regulated the banks, created a jobs program, probably enacted sweeping and substantive health care reform - at least a robust public option, if not single-payer.

It's gone. His waffling, his timidity, his futile search for "bi-partisan" support from his and our out and out enemies, his reliance on Neo-Liberal, "Third-Way" free-marketeer policies, his supine acceptance of the status quo in the big three that matter - money, militarism, and climate - have lost the battle before it was even begun.

You know, I'm an ignoramous when it comes to market mechanics. I scan this and WE without the faintest understanding - or I admit interest - in the nuts and bolts. I watch the market spike and drop, drop and spike, and simply wonder - idly, because it doesn't really matter - which profiteer manipulated what to creat a profit for who. All that really matters is that it's not I, not you, who benefits, as we drift deeper into some la-la land where a "jobless recovery" is touted and the screamingly obvious inability of the "free-market" to contribute to a sustainable econ-ology is never questioned.

One might say the asylum is being run by the inmates, but I think the inmates could do a better job.

[Loge23]

34. Hate to pile on, but

The WSJ has a story today about traders that "paid their bills all summer" by trading AIG stocks on speculation.
Ignoramous? I think not.

[Joe Chi Minh]

35. Why are France and Germany out of recession?

[Demeter]

40. Well, First of All, It's Early Days Yet

they think they are out, they claim they are out, but let's wait a bit before we conclude they are out.

Secondly, both France and Germany make things and have a cozy market in the EU with real protections. None of this NAFTA CAFTA crap for them.

Third, they actually made their banks take severe haircuts. This makes a big difference. We are still waiting for our banks to take their medicine.

Fourth, they have real safety nets, and unions. So they aren't totally in the thrall of Greed-Driven Capitalists or Banksters.

There are a lot of reasons to envy our European brethren. They are much farther ahead of us than you'll ever see admitted in this country.

[Joe Chi Minh]

43. Or in the UK. Also, I agree, albeit as Noddy, that its early days yet. Has

the problem of the multi-trillion dollars worth of toxic debt, the size of the 12 times or more of world's GDP, been solved - or, presumably, temporarily successfully hidden yet? Or has only a relatively small part of it been hidden. Or will the people shortly be able to see a new less feral world order many would look forward to with keen anticipatin emerge within and between the nations?

And what of consumer confidence in Anglo-America and the rest of the world bar France, Germany and perhaps parts of Scandinavia? Surely France and Germany don't constitute an economic Atlas figure bearing the wrold on ther shoulders, as the US used to.

[Ghost Dog]

98. Let me put (recent commercial young Southern Spanish) music to that:

:)

http://www.youtube.com/watch?v=w5gU7VcNuWM&feature=channel

[UpInArms]

38. dollar watch

http://quotes.ino.com/chart/?acs=NYBOT_DX&v=i

Last trade 76.093 Change +0.005 (+0.01%)

US Dollar Tumbles to 2009 Lows on S&P 500 Strength, FOMC Looms Large

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Tumbles_to_2009_1253651061587.html

The US Dollar fell sharply against major forex counterparts on similarly dramatic rallies in global equity indices. Bullish developments in Asia-Pacific markets set off a chain reaction in subsequent European session trading, and speculators showed little hesitation in sending the safe-haven US Dollar Index near its lowest levels in 12 months. The combination of dollar losses and improvements in risk appetite likewise sent commodity prices through the roof—leading oil prices higher for the first day in three and gold prices just short of record highs. It seems that investors show little interest in holding US Dollars and in fact increased bets on USD weakness. According to FX Options markets, traders are willing to pay a considerable premium for USD puts against all majors except the British Pound. Tomorrow’s FOMC Interest Rate Announcement report looms large on the horizon, but previous Fed rate decisions have produced fairly mixed results in the US currency.

It remains especially difficult to handicap reactions to FOMC event risk, but we suspect that the US Dollar could remain relatively unchanged absent a substantive shift in interest rate or Quantitative Easing bias. Many expected the Federal Reserve to delineate an ‘exit plan’ for its $1.75 Trillion Quantitative Easing program through its August meeting. Despite a gradual improvement in economic data, however, the Fed showed little indication it would pull back its massive monetary stimulus through the foreseeable future. Officials instead announced they would “gradually slow” their debt purchases and extend their $300B program into October. We see relatively little reason for a sharp shift in officials’ stance on policy, but traders should as always look out for the unexpected on what may be a volatile afternoon of trading.

...more...

EUR/USD: Trading the FOMC Interest Rate Decision

http://www.dailyfx.com/story/topheadline/EUR_USD__Trading_the_FOMC_Interest_1253642932870.html

The U.S. Federal Reserve is widely expected to hold borrowing costs at the record-low in September and is anticipated to maintain its $1.75T asset purchase program to encourage a sustainable recovery, and long-term expectations for higher interest rates may drive demands for the dollar as market participants speculate the central bank to tighten policy in 2010.

Trading the News: FOMC Interest Rate Decision

What’s Expected

Time of release:        09/23/2009 18:15 GMT, 14:15 EST
Primary Pair Impact :    EURUSD
Expected:             0.25%
Previous:             0.25%

Effect the FOMC rate decision has had over EURUSD for the past 2 meetings



August 2009 FOMC Interest Rate Decision



The FOMC held the key interest rate at 0.25% in August and announced it will continue its asset purchases at a slower pace after extending the $300B program to October. The committee decided to “gradually slow” its purchases as the board aims to utilize the full amount by the end of October, and the MPC went onto say that the recent developments “suggests that economic activity is leveling out” as the government takes unprecedented steps to stimulate the ailing economy. In addition, the Fed said borrowing cost will stay “exceptionally low” for an “extended period” of time in order to foster a sustainable recovery however, the board continued to hold a caution tone as consumer spending “remains constrained by ongoing job losses, sluggish income, lower housing wealth and tight credit.” As the board sees “gradual resumption of sustainable growth,’ the MPC is likely to hold a neutral policy stance as economic activity improves.

...more...

[Demeter]

41. From the Horse's Mouth

http://www.imf.org/external/np/sec/pr/2009/pr09310.htm

IMF Executive Board Approves Limited Sales of Gold to Finance the Fund’s New Income Model and to Boost Concessional Lending Capacity
Press Release No. 09/310
September 18, 2009

The Executive Board of the International Monetary Fund (IMF) today approved gold sales in a volume strictly limited to 403.3 metric tons, with these sales to be conducted under modalities that safeguard against disruption of the gold market. This decision is a central element of the new income model for the IMF that was endorsed by the Executive Board in April 2008 and will also increase the Fund’s resources for lending to low-income countries under a strategy endorsed by the Board in July 2009 (see Press Releases No. 08/74 and No. 09/268). The new income model builds on the January 2007 recommendations of the Committee of Eminent Persons to Study the Sustainable Long-Term Financing of the IMF that was chaired by Andrew Crockett (see Press Release No. 07/18).

“I am delighted that the Executive Board has given its overwhelming backing to a strictly limited sale of Fund gold to put the financing of the IMF on a sound long-term footing, and enable us to step up much-needed concessional lending to the poorest countries,” Managing Director Mr. Dominique Strauss-Kahn stated. “These sales will be conducted in a responsible and transparent manner that avoids disruption of the gold market. Most importantly, the sales are strictly limited to 403.3 metric tons, which is one-eighth of the Fund’s total holdings, so the IMF will continue to hold a relatively large amount of its assets in gold.”

The new income model is designed to provide the Fund with more diverse income sources that are better aligned with the variety of functions performed by the Fund, with a central component being the funding of an endowment with the profits from these limited gold sales. Resources linked to the gold sales will also be used indirectly to increase the Fund’s capacity to provide concessional loans to low-income countries (see Press Release No. 09/268).

In accordance with the priority of avoiding disruption of the gold market, the Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established (see Factsheet on Gold in the IMF and Gold Sales—Frequently Asked Questions). First, the Fund would stand ready to sell gold directly to central banks or other official sector holders if there were to be interest from such holders. Such transactions would redistribute official gold holdings without changing total official holdings. Under the Fund’s Articles of Agreement, all gold sales must be conducted at market prices, including direct sales to official holders.

Second, the gold sales could be conducted on-market in a phased manner over time, following the approach adopted successfully by the central banks participating in the Central Bank Gold Agreement. Participants in the recently renewed agreement announced ceilings on sales of 400 tons annually, and 2,000 tons in total during the five years starting on 27 September 2009, and noted that the Fund’s sales can be accommodated under these ceilings. Hence, on-market gold sales by the Fund will not add to the announced volume of official sales.

As one of the elements of transparency, the Fund will inform markets before any on-market sales commence. In addition, the Fund will report regularly to the public on the progress with the gold sales.

[Hugin]

49. Neigh!

:kick:

[Old Hob]

52. "These sales will be conducted in a...manner that avoids disruption of the gold markets "

I doubt that very seriously. Gold threatens fiat dominance. Recent metal prices are making fiat powers nervous. Gold must be beaten down to preserve confidence in the status quo. This won't accomplish that in the long run though. The inherent flaws of fiat currency are becoming more and more obvious to all and the problems associated with unfunded paper currency and fractional reserve banking are spreading throughout global financial markets like a metastatic cancer predictably driving up demand for gold and metals. They may manage to knock the price back to $950-975/oz for a while but the new $1,000/oz prices represent the new gold price plateau IMHO.

[Hugin]

56. Sadly, I agree.

I've read it posited, elsewhere, that this is the whole point behind the current G20 meeting... The jig is up for fiat currencies. By the almost total consolidation of wealth in a few hands they've inadvertently rendered their currencies worthless to the masses. Who have less and less access to the Monopoly Munny, but, still have access to barter things of real value. (To them) That's definitely one of the real weaknesses of a Fiat system. The unit of exchange has no intrinsic value... Like, say, labor... food... shelter... energy... and other commodities do.

[Old Hob]

63. here's a short interesting video about the dollar carry trade and its relationship to gold

and the aforementioned systemic flaws inherent to fiat based capitalism.
http://www.monex.com/

[Dr.Phool]

58. The Fudd is now a movie star!

Details at 6:00.

[ozymandius]

94. What fun.

Details? A new Rin-Tin-Tin on our hands? Any plans to keep him humble?

This is quite a departure from the dust-up I read up thread.

[Dr.Phool]

103. He didn't make the news this evening.

Maybe tomorrow.

A dust up? What happened while I've been MIA?

[burf]

69. Here may be a solution to the

"Too Big To Fail" banks.

Wednesday, September 23, 2009
William K. Black's Proposal for “Systemically Dangerous Institutions”




William K. Black, Associate Professor of Economics and Law at the University of Missouri – Kansas City, and the former head S&L regulator, has written the following fantastic new proposal concerning the giant, insolvent banks. Posted/reprinted with Professor Black's permission.

William K. Black
Associate Professor of Economics and Law
University of Missouri – Kansas City

[e-mail]

September 10, 2009


The Obama administration is continuing the Bush administration policy of refusing to comply with the Prompt Corrective Action (PCA) law. Both administrations twisted a deeply flawed doctrine – “too big to fail” – into a policy enshrining crony capitalism.

Historically, “too big to fail” was a misnomer – large, insolvent banks and S&Ls were placed in receivership and their “risk capital” (shareholders and subordinated debtholders) received nothing. That treatment is fair, minimizes the costs to the taxpayers, and minimizes “moral hazard.” “Too big to fail” meant only that they were not placed in liquidating receiverships (akin to a Chapter 7 “liquidating” bankruptcy). In this crisis, however, regulators have twisted the term into immunity. Massive insolvent banks are not placed in receivership, their senior managers are left in place, and the taxpayers secretly subsidize their risk capital. This policy is indefensible. It is also unlawful. It violates the Prompt Corrective Action law. If it is continued it will cause future crises and recurrent scandals.


Comes from Denninger's site: http://market-ticker.denninger.net/

Good day to all!

[tclambert]

80. Ford shares gain 7% on upbeat CEO presentation

By Shawn Langlois

SAN FRANCISCO (MarketWatch) -- Ford Motor Co. (F 7.47, +0.46, +6.56%) shares rallied almost 7% to $7.48 on Wednesday after CEO Alan Mulally delivered an upbeat presentation as he lifted the curtain on the Figo, a new compact car to be launched in India next year. He said that various stimulus programs and a recovery in the U.S. economy are expected to boost car sales in the next two years. Ford is looking to return to profitability in 2011.

http://www.marketwatch.com/story/ford-shares-gain-7-on-upbeat-ceo-presentation-2009-09-23?siteid=yhoof2
________________________

That is 7% up TODAY. It pains me to have missed the boat on this one. Ford traded at $1.58 back on February 20th. $7.50 per share now is almost five times higher (OK, only 4.7). Boomerbust predicted Ford would do well on this very thread late last year. I personally missed it because I had fixated on what was happening with GM. I have friends and relatives who work for GM, so I hear more about them. Plus, I saw Ford CEO Mulally sitting at the same table in front of a Congressional committee begging for auto company bailouts, and I lumped them all together. For months I didn't grok that Ford was not in the same desperate situation as GM and Chrysler.

That's it. I'm calling the game. Ford won this recession.

[tclambert]

84. Ooh, the Dow crossed 9900 today

for all of about 10 minutes.

I don't know why that entertains me. It doesn't make me any money.

. . . and then it plunged to 9750. Closed down almost 1%. Looks like 10,000 won't happen this week.

[question everything]

85. Really strange. Within an hour went from +60 to -80

after the Feds decided not to raise interest rate?

[TheWatcher]

93. Manipulation works Both Ways.

[Ghost Dog]

101. Question everything,

question everything.