Quotation for the Day 2-10-2013

If I see a fraud, and don’t shout, “Fraud!” then I am a fraud.

–Nassim Taleb, philosopher and mathematician

Modern Investigative Reporting Aids Those in Foreclosure

Warning: Off-topic subject, although it illustrates the value of old-fashioned investigative reporting.

After this post was written and scheduled, I came upon a news story that sets the context for the story. I will paste it here, in italics.

It’s easy to judge someone who spends more money than he makes and gets into financial trouble. It’s irresponsible. At first, that is the way I felt about all people who bought too much house, then lost their homes to foreclosure.

The more I read the background news stories, the more I came to believe many were lured into a snare designed by certain financial organizations to be a massive money-making machine. Select lenders and investment banking institutions purposely behaved irresponsibly because they had a plan. They figured out how to make money using “mismanagement”  and avoid consequences. (The perfect legal defense: “Your Honor, I used poor judgement and made some bad management decisions.”) Stupidity isn’t a crime, unless it can be proved to be a smoke screen for outright fraud. Once these banks were en masse in insolvency (they all did the same inane, irresponsible acts), then step two of the devious plan kicked in: suck massive amounts of free money out of the general populace through tax-supported bailouts. With no paybacks. Forever. (Where can I get me one of them? I’d like $40 million dollars a month indefinitely for being criminal stupid.)

Lend– bad loan, good loan, it doesn’t matter. Make money. Package and sell the bad mortgages to investors, teachers’ retirement funds, firemen’s retirement funds, policemen’s retirement funds, your retirement funds, foreign governments. Make money. Pass off the consequences to unsuspecting others. Mortgages defaults. Pension funds lose the money they need to pay out retirement benefits. Get government to tax citizens and give the $$$ to lenders–no strings attached, no pay back required. Bail out. Make money. Foreclosure.  Real Estate is sold. Make money. The cycle begins again. Make Money.

Sadly, citizens do pay consequences for bad behavior. That’s where the news story comes in. The institutions which figured out how to profit from fraud haven’t paid consequences–yet. That’s where the original post comes in. Someone clever has figured out a way to turn the game back on the banksters in certain circumstances.

But first the newly added news clipping from Reuters:

Spain promises to spare needy from eviction after suicides

Spanish Economy Minister Luis de Guindos promised on Monday that no needy family will go homeless over mortgage arrears, responding to public fury at a homeowner’s suicide as she was being evicted.

Facing accusations that politicians and banks are complicit in de facto “murder”, Spain’s banking association said its members would suspend eviction orders for two years for those borrowers worst hit by economic crisis and record unemployment.

Banks have repossessed close to 400,000 homes in Spain since a property bubble burst in 2008 and the nation subsequently sank into recession, throwing millions out of work and unable to keep up mortgage payments to the banks.

Last Friday’s suicide of 53-year-old Amaia Egana has inflamed a public already angered by what they see as a lack of compassion among Spanish banks, many of which have benefited from taxpayer-funded bailouts organized by the political elite.

Now to the originally scheduled post:

An investigative reporter discovered that a segment of the mortgage banking/ investment banking community purposely defrauded investors and homeowners. His investigative findings are now compiled in a book called Clouded Titles.

The subject bankers defrauded pension funds and other investors by selling worthless mortgage backed securities. The same bankers also unscrupulously by-passed laws governing title and mortgage records so that millions of homeowners with a mortgage may not be able to sell their homes. Why? Because the homeowner will not be able to provide clear chain of title, solely due to lender fraud and mismanagement. Further, the banks skipped out paying millions in taxes and fees to local governments when they short-cut the law through robo-signing and other techniques. So the mortgage-handling entities cheated investors; they swindled homeowners; they skipped out like a dead-beat parent on paying their fees and taxes to local, state and federal governments.

Currently, a multi-BILLION dollar lawsuit has been filed by the U. S. federal government seeking damages. There is a successful movement growing among injured mortgagees who are suing  in court to prevent eviction and foreclosure. Some have seen the courts stop the banks from foreclosing or even from collecting mortgage payments.

For anyone who has received repeated letters about a change in who owns your mortgage or a change to where you send your house payment, you may eventually learn your title is clouded and you may be paying someone who doesn’t legally own your mortgage, and therefore, your home.

For those persons, I am providing the following information about the author and his  book Clouded Titles.

Dave Krieger is a former major market radio news reporter and news director and television news reporter/anchorman and investigative journalist, who won national and state news awards from Associated Press Broadcasters. Dave was a former member of Radio and Television News Directors Association. Dave began studying law in early 1990; specializing in real estate, tort, consumer credit and collection issues.

His first self-published work, The Credit Restoration Primer, a 263-page, self-help, credit repair book, was first released in 1995 and is now entering its 4th Edition.

Dave currently serves as a paralegal and legal research analyst for Wade Kricken, an attorney in Dallas, Texas, who specializes in consumer and real estate law and foreclosure defense. He has lectured at the Texas County Clerk’s school hosted by the V.G. Young Institute and Texas A&M AgriLife Extension and currently conducts audits of county land records and instructs attorneys on the subject of Chain of Title Assessments & Quiet Title Actions in continuing legal education courses around the country.

The newest version of his book, Clouded Titles, is 396 pages of updated information about the aspects of foreclosure defense, strategic default, quiet title actions and county land record functions; coupled with a detailed Index and Table of Case Citations and comes highly regarded by attorneys.

Additional commentary from MSNBC on a related subject– listen to the end to hear the “banking corruption” remark. Ignore the politics. This is your chance to look behind the curtain in OZ. It’s your life. You are the one behind the eight ball. You and your kids and your grandkids. Know who is using the system and putting the screws to you.

http://www.youtube.com/watch?v=9TZ0LqnaeuA&feature=share&list=PL2WWM-Cq2nuJ59drKmEEfsSkwZ9C2n5Gm

Justice: Part 3, The Finale

Justice: Part 3

by Fay Moore (c) 2012

“Good god, man,” says the Chief. A pause, then, “Call me later with the rest of the findings.”

The Chief of Police is silent. Six pairs of eyes focus on him, trained to read the faces of men to reveal what is in the heart.  At the moment, the face of the Chief is tabula rasa. Under the circumstances, the eyes stay riveted to the chief’s face, mining data from each subtle nostril flare, each bat of an eyelid, each pupil dilation.

Standing, the Chief hands off the cell phone to an assistant, straightens his uniform coat, then locks eyes with his audience.

“There’s been a fire at the GS Global Investments building. All the senior executive offices burned. Once the blaze was controlled, firemen made a cursory search through the suite, to be sure all flames were extinguished. In the executive bathroom, they found a pair of severed hands on a plate, covered in blood, under a glass dome. The coroner said the hands appear to have been removed from a cadaver. You know, one of the pickled bodies used for training in medical schools. Thank God for that. I was afraid the hands belonged to another investment banker.”

One of the detectives in the room chuckled. “Blood on your hands.”

“What?” asked the Chief.

“Blood on your hands. The perpetrator is sending a message. The investment banking community has blood on their hands.”

“If you count the kills in Asia, Europe and here, we have eleven dead bankers in forty-eight hours. I’d say you’re right that whoever is behind these hits is sending a message, a very lethal message.”

“Did they find anything else?”

“Yes. Under the glass plate holding the hands, there was a copy of an article from a San Francisco newspaper, written by a Bill, Phil, or Will somebody and called “Unrepentant and Unreformed Bankers.”

Another voice responds, “I saw that article on the Internet. It has gone viral on the free video channels. That crowd sees our perpetrator–or perpetrators–as a kind of Robin Hood. You know, delivering justice where the regulators and courts won’t.”

The Chief growls in reply, “Let me remind you that we deliver justice, not some vigilante. You can’t have people taking the law into their own hands. Remember that! Now show me the article. You said it’s on-line?”

The detective uses the Chief’s computer to find it. The search returns several references to the article, as it has been printed not only in the San Francisco newspaper, but also in the Huffington Post and on various Internet web sites.

The Chief scans the article as the detectives peer over his shoulder.

“Money laundering. Price Fixing. Bid rigging. Securities fraud. Talking about the mob? No, unfortunately. Wall Street,” a detective reads aloud. There’s a laugh around the room. “Old Phil Angelides knows how to start an article off with a bang. You know, Chief, he’s got a point.”

A glare from the Chief silences the speaker. “We have crimes to solve. Now get to work.”

It takes weeks of coordinating investigative efforts with global law enforcement and intelligence organizations to turn up bumpkus. The police entities can’t identify who is behind the mayhem. The killings have stopped: the spree is short-lived and focused. Nowhere is there sympathy for the victims.

Over and over, excerpts from the Angelides article appear on television. In coffee shops, barbershops, taxicabs and airports, the buzz is the same: the banks and their leaders have faced no real political, economic or legal consequences for their wrongdoing. The banks are cozy with the regulators and with legislators. Wall Street is solipsism, a world of utter madness that, till now, others could not affect.

——-

Somewhere in Hong Kong, an octogenarian is on his deathbed. He is thinking about the Year of the Dragon; it is a year of bravery, of passion, a time to eliminate negative chi from the past. He considers his life. He has been favored in business and industry. His personal fortune exceeds the total economy of many individual countries. Before he dies, he wishes to leave a gift to his children and grandchildren. He believes he has done it. He believes he has made their world better.

How does he know?

He is watching the news. The broadcaster describes a global reordering of the financial world. In the aftermath of the multiple murders, fear seizes those who ran the old order, and they flee to hide in their hidden bunkers. Systems that have been in place for decades are being disassembled. The central banking system breaks up into small localized units. Fiat currencies are replaced with asset-backed money. Sovereign debts are forgiven. Taxpayers are off the hook. Governments cut size and balance budgets. International banking criminals are arrested and prosecuted vigorously.

Optimism and hope are in the air. Economies will be rebuilt. He can die in peace.

Justice, Part Two

Asklotta requested I write Part 2 to 8/23/2012’s short story “Justice.” Your wish, Asklotta, is my command.

I went hunting for inspiration and found it on www.zerohedge.com in Tyler Durden’s 8/23/2012 post titled “JPM’s London Whale May Face Jail Time for Mismarking Billions in CDS.” I hope you enjoy another installment of “Justice.”

Justice: Part Two

by Fay Moore © 2012

 On the 20^th floor, night’s blackness is arriving without a sound. Reds, purples and oranges chase the sun out of sight beyond J.R.’s office window.

Late nights are de rigueur at the Wall Street firm, so an analyst knows where to find J. R. when the after-hours news comes across the wire. J. R. is in his office, as expected. Unexpectedly, J. R. is in front of his desk when the subordinate knocks on the jamb of the open office door. The boss is striding back and forth atop a broad gilded stripe on the carpet, as if the line is a runway and his feet, the plane flown by a pilot practicing incessant touch-and-go landings.

The underling centers himself inside the door frame, lowers his eyes and waits politely. J. R. makes two more passes in front of the desk before acknowledging the interruption.

“Can’t you see I’m busy?”

“You asked me to let you know if anything hit the alternative news wires. Something is up on ZeroHedge.”

The boss swears under his breath and heads for his desk. He grabs the arm of the executive desk chair forcefully, rolling it backwards, and jumps into the leather seat, driving the rolling chair forward. The ricochet reminds the subordinate of the lethal motion of a pistol slide.

The Internet article says J. R., as chief executive officer, and his firm are in trouble: in addition to the uncomfortable news of the firm’s suffering massive losses for the quarter, now comes an accusation that players in the firm engage in criminal mismarking of credit default swaps to boost reported profits with the intent to defraud shareholders and investors.

J. R. knows that regulators are three years behind in following up allegations of wrong-doing. A bigger threat, in the form of bad press, comes from self-appointed enforcers outside the establishment. Envious or angry insiders leak damaging information into the alternative news channels. Internet-based sleuths are busy lifting carpet corners, shining light on hidden filth missed by lazy, stupid or blind regulators. Going from trickles to torrents,  the news leaks push J. R. to make admissions about the bad behavior of the London-based trading office, and name names of guilty parties. To cover his own ass, he denies foreknowledge of the crimes. Then there’s the LIBOR scandal, to which J. R.’s firm is a party–if not directly, then by association.

J. R. belongs to the You-scratch-my-back-and-I’ll-scratch-yours Boy’s Club where men help each other evade the law, at least, and commit horrific crimes, at most.

The executive admits to himself that the media snowball is rolling downhill and growing out of control. The bad news, that came in monthly dribs and drabs of disjointed factoids in the beginning,  is coming faster and faster now; from monthly leaks to weekly to daily to hourly ones.  At first, J. R.’s smooth spin paints the Internet newsmongers as “nutters” chasing phantoms. J. R. is a master at disconnecting the dots. His executive board loves him for that quality. But now the fouling of the firm is overwhelming. The big question at the top is who is going down?

J. R. is waiting for a call from his criminal defense lawyer. That’s why he was pacing when the associate showed up in his office doorway. He needs the legal firm’s resources to manufacture an escape route that will keep him alive and functioning. He is trying to keep his neck out of the noose.

The television mounted on his office wall—the one that is always on and tuned to the financial news network with the prettiest broadcasters–sounds a bell. For some odd reason, J. R. mistakes the sound for the peal of the early warning system. He looks up at the screen. The announcer speaks. The news rattles him. The former head of a competing firm is dead, shot today by an unidentified gunman while he and his wife are vacationing in the south of France.

In the middle of a sentence, the broadcaster stops speaking, pressing his finger against the device in his ear.

After a pause, the reporter says, “We have breaking news. The shooting appears to be an assassination. A source inside French law enforcement says the shooting has all the hallmarks of a professional hit. We’ll bring you the details as soon as we know more.”

“A professional hit? By whom?” the underling asks his boss.

“I don’t know,” he answers, his voice quieter than normal. “Look, I have a call to make. Thanks for telling me about the ZeroHedge thing. That’s all for now.” J. R. walks the man toward the door, shutting the door behind him.

He calls his lawyer again and gets the receptionist.

He identifies himself to her, then says, “This is urgent. I need my attorney now.”

The barrister’s paralegal comes on the line. He recognizes the investment banker’s voice. J. R. gets to the point.

“I don’t know if you’ve heard the latest. I fear someone is targeting investment bankers.”

“Yes, I heard the French news.”

“Then you understand. I need protection, and I need it tonight. I don’t know who is behind the threat, but. . . .”

A bullet breaks through the office window glass, striking J. R. in the back of the head and blowing a gaping hole in his frontal lobe as the projectile exits the skull. As J. R. falls, a tinny voice calls through the small speaker of the phone.

“Hello? Hello?”

In a moment, the line goes dead.

Sudden Fiction: Justice

The concept of justice is the theme of the song prompt “Beer for my Horses.” The songwriter romanticizes the style of justice made famous in the Old West–the noose. My story explores another form: vigilante justice. I decided to set the story in the context of this week’s news to give it a contemporary flavor. I found the perfect villain that everyone loves to hate. His own bad behavior and cavalier attitude toward his victims makes him perfect for the villain character in the  story. The old man character takes matters into his own hands to set things right.

This little shortie is less than 400 words. The names have been changed to protect the guilty, and to cover my ass.

JUSTICE

by Fay Moore (c) 2012

The old man shuts the top on his notebook computer. He removes his glasses and sets them on the lamp table next to his easy chair. The glasses rest atop a pile of account statements and letters. He leans his head against the chair back and closes his eyes. The words he  just read are re-playing in his head.

Internet columnist Ben Protess reports, “After 10 months of stitching together evidence on the demise of MF Global, investigators conclude that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear.”

The octogenarian pinches the bridge at the top of his nose, eyes still shut.

More words echo:

“A criminal investigation into the collapse of the brokerage firm MF Global regarding the disappearance of $1.6 billion in customer money is entering the final stages. No charges are expected to be filed against any top executives.”

The paper statements on the lamp stand show the accounting of deposits made by the old man into an MF Global investment account. The letters mixed in with the statements describe the loss of the man’s money because his brokerage firm gambled on Greek debt instruments with customers’ money. The firm’s actions wiped out the old man’s account. Another letter promises to repay a portion of the loss at pennies on the dollar. However, repayment is contingent on court approval. The case is tied up in bankruptcy court and may be for months or years to come.

But worse to the old man than his loss, worse than Johann Corsini and his cronies skating on criminal charges, are the last words the man reads before taking off his glasses. The words say to the old man that there will be more victims. A leopard can’t change his spots.

“Mr. Corsini, in a bid to rebuild his image and engage his passion for trading, is weighing whether to start a hedge fund, according to people with knowledge of his plans.”

These are the words that prompt the man to place a call. He listens to the ringing before someone picks up on the other end.

“Hello.”

“Do it,” says the old man.

“When?”

“Now. I want to see it on tonight’s news.”

He ends the call and leans back in his chair again, eyes closed. He is imagining the news broadcaster’s announcement:

“Johann Corsini is dead, shot today by an unidentified gunman while he and his wife were vacationing in France.”

JPMorgan, Goldman Sachs and the Limerick

One can find creative writing in the oddest places. This morning, I am sharing with you samples of the limerick. I found these examples on www.zerohedge.com, a financial news website. The author is identified only as The Limerick King. To help the reader, the “whale” is JPMorgan  and the “squid” is Goldman Sachs. The Captain refers to Jamie Dimon of JPMorgan.

As the world-wide economy slows

The risk inside banks no one knows

They fill us with lies

Then to our surprise

The Captain shouts out “Thar She Blows”

The Limerick King

A battle of squid versus whale
Which one of these giants will fail?
The loser is moot
It’s taxpayer loot
That’s taken to finance the bail

The Limerick King

The Limerick is a folksy style of poetry that has often been used for political or social commentary. Although the target of these two limericks is investment banks, the overall content is in keeping with the historic use of the form.

Wikipedia offers the following description about the form:

A limerick is a kind of a witty, humorous, or nonsense poem,^[1] especially one in five-line anapestic or amphibrachic meter with a strict rhyme scheme (AABBA), which is sometimes obscene with humorous intent. The form can be found in England as of the early years of the 18th century.^[2] It was popularized by Edward Lear in the 19th century,^[3] although he did not use the term.

The following limerick is of unknown origin:

The limerick packs laughs anatomical

In space that is quite economical.

But the good ones I’ve seen

So seldom are clean

And the clean ones so seldom are comical.^[

 

P.S. The comments section of the original zerohedge.com post is eye-opening to ADULTS (as in Rated R) who have an interest in Wall Street fodder.

http://www.zerohedge.com/contributed/2012-07-12/squids-and-whales