If only it were [just] a movie. . .

McDepression 08 !

OT... good news tho'

Don Siegelman is going home... http://www.truthout.org/docs_2006/032808K.shtml

More proof of institutionalized fraud by the Banks in the subprime disaster emerging...

Chase mortgage memo pushes 'Cheats & Tricks'
The bank says it never backed the strategies, which detail how to get an iffy loan approved
Thursday, March 27, 2008
JEFF MANNING
The Oregonian Staff

A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

The document, a copy of which was obtained by The Oregonian, bears a Chase corporate logo. But it's unclear how widely it was circulated or used within Chase.

Bank spokesman Tom Kelly confirmed that the "Cheats & Tricks" memo was e-mailed from Chase but added that it does not reflect Chase corporate policy.

"This is not how we do things," he said. "We continue to investigate" the memo, Kelly said. "That kind of document would neither be condoned or tolerated."

The March e-mail was sent by Tammy Lish, a former Chase account representative in Portland. Chase fired her days after discovering she had sent it.

"I did not write it," Lish said. "It was sent to me by another (Chase) rep in another office along with some other documents that were more step-by-step customer training documents."

Even if the memo was penned by a single employee, it illustrates an attitude prevalent in certain corners of the mortgage industry during the boom years. In the face of sustained and significant home price increases, much of the industry veered away from traditional notions of safe and sound lending. Loan volume became as important as loan quality, particularly for the rank and file typically paid on commission.

During the boom, it was common for lenders and brokers to get paid more for risky subprime loans than for 30-year fixed-rate loans because the higher-interest loans fetched a higher price on Wall Street.

Chase, the nation's second-largest bank, originates mortgage loans itself but also operates a wholesale arm that underwrites and funds loans brought to them by a network of mortgage brokers. The "Cheats & Tricks" memo was instructing those brokers how to get difficult loans approved by Zippy.

"Never fear," the memo states. "Zippy can be adjusted (just ever so slightly.)"

The Chase memo deals specifically with so-called stated-income asset loans, one of the most dangerous of the mortgage industry's innovations of recent years. Known as "liar loans" in some circles because lenders made little effort to verify information in the borrowers' loan application, they have defaulted in large number since the housing bust began in 2007.

Chase no longer makes any stated-income loans, part of the bank's efforts to tighten its loan underwriting, Kelly said. It wrote down $1.3 billion in nonperforming mortgages at the end of 2007.

Lish said she sent out the document inadvertently. "The document was irrelevant by the time I sent it out because the company had ceased offering stated-income loans."

The document recommends three "handy steps" to loan approval:

Do not break out a borrower's compensation by income, commissions, bonus and tips, as is typically done in a loan application. Instead, lump all compensation as the applicant's base income.

If your borrower is getting some or all of a down payment from someone else, don't disclose anything about it. "Remove any mention of gift funds," the document states, even though most mortgage applications specifically require borrowers to disclose such gifts.

If all else fails, the document states, simply inflate the applicant's income. "Inch it up $500 to see if you can get the findings you want," the document says. "Do the same for assets."

Chase's Kelly said the bank has never encouraged any of the suggestions in the memo.

"If somebody is putting inaccurate information in their loan application, they're lying and committing fraud," he said.

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/12...

from the BBC News

US Federal Reserve to hand out another $100 billion to US banks in April, on top of the $260 billion already given to their buddies.

Theres a major downward slope to the DOW currently, plus a seven week boom bust cycle, the next bust is scheduled for late April, the Fed is trying to minimize the permanent damage the next downturn could cause.

Dow 10 year ($INDU)

Dow 1900-2010 ($INDU)

Dow 1923-1933 ($INDU)

pissed off patricia @ 10:

My husband compared the way the govt. is handling the banks now to playing a game of Monopoly. If you are playing the game and you run out of money, you don't loose or stop. Instead you go to your copy machine and print out more Monopoly money.  The game continues but the object of the game is lost.

The same approach applies to "fixing" the Social Security problem.
Good thing inflation isn't increasing as the money gets printed!

Dow 1998 - 2008 year

Dow 1900 - 2010

Dow 1923 - 1933

time to be worried methinks, history (and stupidity & greed) does repeat itself.

For those who don't the meaning of a recession or believes we aren't in a recession, to put in poetically, the shit done hit the fan.

When will this recession be called a recession? Not a "possible recession" or "looming recession" or "headed for a recession", but a RECESSION? Sweet Mother Mary, everyone in the world knows we're in recession. I just got back from Amsterdam a week ago. I had a sandwich, a drink and a pasta salad. Price? 12 Euros or $18.

For a friggin sandwich.

In there little mortgage game, there are winners and losers. Who is getting the loot? Money just doesn't disappear.?.

The definition of a recession is 2 consecutive quarters of negative growth.
By this definition, you can't "know" it was/is a recession until the end of the six month period.
We'll all be homeless and jobless by the time they acknowledge that it is officially a recession.

this will get worse because that sucking sound will be wealth from the rest of the world flooding in to replace the wealth lost in this country.

there will be a fire sale on america.

we already have it in real estate.

some states are selling their infrastructure since there is no return flow from the fed and because the rich also get local tax breakes to go along with their boosch tax cuts.

stay tuned.

From what horror film did you borrow that perfect music?

bu$hCo. in 1:43 minutes. All I need to know.

tHeGaMeHusseinOfLiFe @ 21:

In there little mortgage game, there are winners and losers. Who is getting the loot? Money just doesn't disappear.?.

It does disappear when it wasn't there in the first place. It also can appear, for example the stock market in the early part of 2000, and the real estate market from 2000 - 2005. If its all on the books then it can appear and disappear based on the whims of the market.

If a tree will be worth x% more in the future and no one is around to buy it, will it still fall down in the forest? Uh ... or something to that effect :)

PS overspending (not low interest) drove the savings rate into the NEGATIVE.

Great Britain owes more than the whole place is worth; if I saw that correctly. The USA might be the same.

Stop using the "R" word. This is going to be the 2nd REPUBLICAN GREAT DEPRESSION!

Statistically, this is the 1920's-30's again, not the 1970's. Call it what it is, so the dumb-fucks can associate it with all it's causes: republicans, conservatives, insane unfair tax policy, lack of corporate oversight, deregulation, and allowing the crony-capitalist free-marketeers to loot the public treasury. Also include the loss of union's and the NAFTA type free-trade agreements, which are nothing but a way to create an international "ruling-elite" crime-syndicate.

Make sure the GOP becomes a 29% minority party for another 60 year cycle. If republican's can repeat lies for decades and stay on task, we should be able to echo the truth for a couple of years; or until the people grab their crotches and spit in disgust when they hear the words republican or conservative. That also works for me.

[FIFY. Next time you use all caps you should read all of those BIG WORDS to see if they're spelled correctly. ;D Site Monitor]

I am still shocked that they have been able to cover it up so long.
I knew the minute the supremes installed this bunch of cowardly, greedy bastards that America was fucked. I had no idea that the Iraqi's would get the worst of it.
What has happened to the republican party? Has it always been full of ignorant greedy bastards that have no compassion, are child molesters, biggots, liars , warmongers, and torturers?

In addition to all mentioned here, the thing that pisses me off is that this recession was "a choice" and was the result of another example of just plain bad management...

http://money.cnn.com/2008/03/20/news/economy/recession_forecast/index.ht...

http://kirklindstrom.blogspot.com/

another 100 billion of Fed (taxpayer) monies to the banks in April.

ferrofluid @ 41:

another 100 billion of Fed (taxpayer) monies to the banks in April.

That raises the question... How did $200 Billion dollars in mortgage defaults turn into a $700 Billion dollar bailout? (and it isn't done yet... there are 14 more brokerages like Bear Stearns in line for their handouts)

Very good video.

But there must be a more direct way to communicate about an issue than these
Hollywoodish ads.

All the candidates are spending money on this, and now the issues people are too.

It really is infantile.

Tim @ 44,

Sorry to hear about your difficulties. I know exactly what you are going through because of what I have seen happen in my immdiate family. My wife has 8 brother's and sister's, and I have 2 bro's and 1 sister.

Since Bush the corporate-facscist took over, four have lost their jobs, 2 other's - very successful small business owners since the early 80's - are now trying to sell before they go under, three others are just waiting for the day they get "outsourced," one retired before he could be axed, and one has even lost their home.

They are all hard working (most have college degrees also) successful people from 33-49 years of age. Many of them worked 60-80 hours a week (for years) to become successful in their fields. These are highly motivated and well educated professsional workers, and their lives are being destroyed by these greedy evil bastards (GOP, Bush/Cheney corporate-elite).

And the majority of the rest of us, are living paycheck to paycheck. Same goes for all of our friends too.

NoGWBpolicyleftinplace @ 47:

Tim @ 44,

Sorry to hear about your difficulties. I know exactly what you are going through because of what I have seen happen in my immdiate family. My wife has 8 brother's and sister's, and I have 2 bro's and 1 sister.

Since Bush the corporate-facscist took over, four have lost their jobs, 2 other's - very successful small business owners since the early 80's - are now trying to sell before they go under, three others are just waiting for the day they get "outsourced," one retired before he could be axed, and one has even lost their home.

They are all hard working (most have college degrees also) successful people from 33-49 years of age. Many of them worked 60-80 hours a week (for years) to become successful in their fields. These are highly motivated and well educated professsional workers, and their lives are being destroyed by these greedy evil bastards (GOP, Bush/Cheney corporate-elite).

And the majority of the rest of us, are living paycheck to paycheck. Same goes for all of our friends too.

Sadly, you and Tim are not alone and in the next three months over one million families will be put out onto the streets as their homes go into the final phase of foreclosure.

1 IN 10 OHIOANS
Food stamps double since '01
But price of food means they don't go as far now

THE COLUMBUS DISPATCH
Saturday, March 22, 2008 3:20 AM
By Catherine Candisky

Nearly one in 10 Ohioans now receives food stamps, the highest number in the state's history.

Caseloads have almost doubled just since 2001, with 1.1 million residents now collecting benefits, according to the Ohio Department of Job and Family Services.

Low wages, unemployment and the rising cost of groceries, gasoline and other necessities are to blame for financial hardships facing many Ohio families.

Caseloads have been rising steadily in the past seven years, said Brian Harter, spokesman for the state agency which oversees the food-stamp program.

"Look at unemployment during this time," he said.

Ohio's jobless rate is 5.3 percent, up from 4.4 percent in 2001.

"The economy and loss of manufacturing jobs are at the root of what's going on. But lately (it's) the rising cost of transportation and food -- people who were barely getting by, are not getting by," said Jack Frech, director of the Athens County Department of Job and Family Services.

http://www.dispatch.com/live/content/local_news/stories/2008/03/22/foods...

These tent cities are springing up all over America!

BBC Report: Tent cities spring up in LA
http://www.youtube.com/watch?v=CnnOOo6tRs8

Well here is your bad tasteless joke of the day... In fact a series of them.

Bush's Secretary of the Treasury laments deregulation for what it's done to the economy
by: Susan H
Fri Mar 14, 2008 at 07:01:41 AM EDT

If it wasn't so serious it would be funny - all these good acolytes of Milton Friedman - nearly the entire Republican Party, with some Democrats a la the DLC thrown in - looking on in horror with the rest of us as the dollar sinks, industries pack up shop and leave, and debt, huge yawning debt settles in ushering in effects that touches all except the so few among the 300 million of us that even the current Republican Treasury Secretary can do naught but face reality and lament deregulation.

Paulson spared no one in his criticism Thursday of the excesses of deregulation that has now created the worst global financial crisis in a generation, threatening the health of the U.S. economy, the savings of millions of Americans, and the survival of some of the biggest financial institutions in the world. See full story.

Wall Street and Washington both failed big time, he said. Wall Street invented new ways to make money by selling securities so complicated that no one could really follow which shell the pea was under. Fortunes were made on the paper Wall Street sold.

At the same time, Washington's watchdogs were dozing, tranquilized by the false assurance that Wall Street would police its own.

http://www.soapblox.net/belowboston/showDiary.do?diaryId=1575

Reuters
Paulson: Time to toughen rules on mortgage brokers
Thursday March 13, 12:11 pm ET
By Glenn Somerville

WASHINGTON (Reuters) - Financial regulators pledged on Thursday to toughen rules for mortgage brokers, lenders and credit agencies in a bid to ease a credit crunch and to try to restore investor confidence in markets.

Treasury Secretary Henry Paulson, unveiling a 20-page set of recommendations from the top-level President's Working Group, blamed a "dramatic weakening" of underwriting standards for lower-quality home loans for helping trigger turmoil in credit markets that raged on unabated as he spoke.

Stock prices tumbled on rising fears of U.S. recession, gold prices soared and the dollar's value plumbed fresh record lows as investors shunned it in favor of the euro and other stronger currencies.

Paulson, a Wall Street veteran before taking over the Treasury in mid-2006, said "financial innovation" -- like the practice of slicing up so-called subprime mortgages and using them as collateral for securities sold around the world -- had made the situation worse by introducing a baffling level of complexity.

In a speech at the National Press Club, Paulson appealed to banks and other lenders not to stop issuing loans and implied they should cut back on dividends paid to shareholders if necessary to raise capital.

"We are encouraging financial institutions to continue to strengthen balance sheets by raising capital and revisiting dividend policies; we need those institutions to continue to lend and facilitate economic growth," he said.

Among recommendations from a top-level Presidential Working Group that he heads, Paulson said he wanted "strong nationwide licensing standards" for mortgage brokers as part of an effort to ward off future housing crises and reassure investors.

Paulson said the focus of the Presidential Working Group's work since the current bout of market turmoil began last summer was to reduce the chance of repeating past mistakes.

"Regulation needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it," Paulson said.

http://biz.yahoo.com/rb/080313/paulson.html

Bush seeks financial regulation overhaul

WASHINGTON - The Bush administration is proposing a sweeping overhaul of the way the nation's financial industry is regulated.

In an effort to deal with the problems highlighted by the current severe credit crisis, the new plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained Friday by The Associated Press.

The proposal would designate the Fed as the primary regulator of market stability, greatly expanding the central bank's ability to examine not just commercial banks but all segments of the financial services industry.

The administration proposal, which is to be formally unveiled in a speech Monday by Treasury Secretary Henry Paulson, also proposes consolidating the current scheme of bank regulation.

The plan would shut down the Office of Thrift Supervision, which supervises thrift institutions, and transfer its functions to the Office of the Comptroller of the Currency, which regulates banks. The plan would eliminate the distinction between banks and thrift institutions.

The role the Federal Reserve has been playing in efforts to stabilize the financial system after a credit crisis hit last August would be formalized.

The Fed would become the government's "market stability regulator," given sweeping powers to gather information on a wide range of institutions so that Fed Chairman Ben Bernanke and his colleagues could better detect where threats to the system might be hiding.

http://news.yahoo.com/s/ap/20080329/ap_on_go_pr_wh/fed_overhaul

You just knew that when the wheels fall off the wagon and Bush "Friedman worshiper" that he is calls for more regulation... it is going to be the opposite of what he says and will follow the GOP "Friedman Free Market" agenda.

Magnifico at D-Kos gets a closer look at what MBA Bush is really hockin'

White House Seeks New Power to Keep Markets Stable

Excerpt:

Their goal seems not to help the American economy, but to make it even easier to pillage the remaining healthy parts of the U.S. economy. Some of the changes Paulson is proposing in the Bush administration's "blueprint" are more deregulation:

The S.E.C. should take a lighter approach to its oversight, such as allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets.

"New products" and less regulation is precisely the ways Wall Street got into their current mess that U.S. taxpayers are being forced to bail them out. Now, Paulson is seeks to consolidate and "steamline" regulatory bodies to remove the little oversight that remains. For example, the administration wants to reduce the power of the Securities and Exchange Commission and merge that body with the Commodity Futures Trading Commission."

Fortunately, we have a Democratic Congress in to protect American interests.

"Almost every element of the proposal would have to be approved by Congress, where Democratic leaders are already drafting bills to impose tougher supervision over investment banks, hedge funds and the fast-growing market in derivatives like credit-default swaps."

However, we saw what kind of review the Democrats in Congress gave to legislation proposed by the Bush administration when the country was reeling from the shock of the terrorist attacks of September 11th, 2001. This sort of shock got us the PATRIOT Act. Now this self-inflicted economic wound is causing similar panic. This is precisely the time this untrustworthy administration will use advance their radical economic agenda.

Like what happened in 2001, there may not be much Democratic opposition this time either. According to the NY Times, some of the proposals being advocated by the Bush administration are cleverly cloaked in "reforms" championed by Democrats such as Barney Frank (D-MA), House chairman of the Financial Services Committee. Both Treasury Secretary Henry Paulson and Frank "favor a stronger Fed role", but the administration is only disguising what they're really after.

Mr. Paulson’s proposal, however, would fall short of the kind of regulation that Democrats have been proposing. Mr. Frank and other senior Democrats have argued that investment banks and other lightly regulated institutions now compete directly with commercial banks and should be subject to the same kind of regulation — including examiners who regularly pore over their books and quietly demand changes in their practices.

http://www.dailykos.com/story/2008/3/28/205053/045/710/486435

[Rasputin, if you can't shorten your posts, we'll have to. It's not something I like to do-I think the poster has a better handle on the important bits. This is just too much text. Thanks-Sitemonitor]

Yes.

hey, what GM plant are those pictures from? I live in Lansing, MI and we have A LOT of those abandoned plants. It's also interesting to see the abandoned parking lots overgrown with weeds and busted concrete.
In 1990, GM had listed 25000 people employed in Lansing. Today, they have 3000. And then another 3000 work in a brand new plant that sits just outside the Lansing tax zones.

Thanks NAFTA!!!

P.S. While visiting Lansing, please stop by Flint and see what a wasteland that has become.

The role the Federal Reserve has been playing in efforts to stabilize the financial system after a credit crisis hit last August would be formalized.

----------------

The credit crisis hit long before last August. The credit crisis hit when the bubble began to be blown.

The financial system cannot stablize until the credit bubble is deflated.
Creating a bubble destablized the system. The FED is doing nothing more than trying to preven the bubble from deflating. The nature of bubbles dooms that to failure.

This one is different because Greenspan manipulated interest rates in an attempt to prevent recessions after Long-Term Capital collapsed and the Asian currency crisis in 1998, after the dot-com bust and 9/11, right through the housing crisis.

This one could be a really bad one. Low interest rates drove the savings rate to zero, and now millions of people are losing the home equity that partly compensated for this, and the Treasury risks a mass world selloff of the US dollar if they drive interest rates too low.

Thank Bush and Greenspan for your turning a run-of-the-mill recession into a potential catastrophe.

-------------------

1998 through the housing crisis. That would be the Clinton and Bush era.

A credit bubble was created in the 1920's and one was created between 1995 to 2005, resulting in stock and housing bubbles, though this time in inverse order.

A boom creates the bust. People hate the bust but love the boom which created it. Ironic, because one cannot exist without the other.

Fun, officially forwarded to all the C&L known inept.

What other president gave us 2 recessions ?

Not that ordinary people ever felt a recovery from the first Bush recession.