Tag Archives: JPMorgan

How To Steal Trillions: A Game Plan

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Here’s the  step-by-step game plan the Wall Street Bankers followed to steal money, homes and hope from the American middle class.

  1. 2B2F Banks assures Local Banks they will purchase any and every mortgage they can originate
  2. Local Banks make loans to people who clearly cannot pay
  3. Local Banks sell all mortgages to 2B2F Banks, make easy money on fees and take zero risk
  4. 2B2F Banks package all those loans up into pools (Mortgage Backed Securities) for sale to Pension Funds and commercial investors
  5. 2B2F Banks pay Rating Companies, (Fitch, S&P, Moody’s), to rate these MBS as AAA – in other words – every bit as secure as US Treasury Bonds
  6. Rating Companies intentionally avoid performing due diligence on MBS packages so that they can rate them AAA and thus get paid by the 2B2F Banks
  7. 2B2F Banks sell MBS  to Pension Funds which – by charter – can only buy AAA-rated debt
  8. 2B2F Banks buy CDS’s on MBSs from Insurance Companies (AIG).
  9. When mortgages in MBS became overdue, 2B2F Banks ran to Uncle Sam, threatened the end of the world, and got Congress to buy the mortgages using taxpayer money
  10. 2B2F Banks foreclose on homes they don’t own. They don’t own the homes because they destroyed the original documents because those documents would prove the loans were fraudulent, the MBS were fraudulent and the CDS’s were essentially a guaranteed sure-fire bet.

My question for you, dear readers, is this: Now that you know that Banks intentionally, willfully and deliberately set about defrauding you, and now that you know that the Federal Goverment was their willing accomplices, what are YOU going to do about it? Are you gonna bend over and take it, or are you going to resist?

As for me, my strategy is to starve them out.

KEY:

2B2F = Too Big To Fail – these are the banks, insurance companies and car companies that the government decided were too big to fail and thus “deserved” to be have their debts paid by the American middle class. Note that the bankers who are employed by these banks have taken somewhere in the neighborhood of $200 billion in bonuses since they got their bailout money. These include, but are not limited to: Fannie Mae, Freddie Mac, Goldman Sachs, JPMorgan-Chase, Morgan-Stanley, Wells Fargo, Bank of America, Citibank, GMAC Finance, GE Financial, Deutsche Bank, UBS, RBS, etcetera, etcetera.

MBS = Mortgage Backed Security – A commercial bond that is backed by a pool of mortgages. Compare this to a municipal bond that is backed by the citizens of a city, or a treasury bond that is backed by the government.

CDS = Credit Default Swap – An insurance policy on a financial instrument, in this case, Mortgage Backed Securities. If the MBS fails, then the holder of the CDS is paid off.

The reason AIG was considered 2B2F is because they had sold trillions of dollars worth of CDS’s to the 2B2Fs. When Lehman Brothers went bankrupt, they were obligated to pay the holders of CDS’s written against Lehman Brothers. Note that the 2B2Fs knew that the mortgages in the MBS were junk. They made money when they sold the MBS to the pension funds, they made money on the mortgages, they made money when the mortgages in the MBS went bad because of the CDS’s they bought, they got money for free from the government because they were 2B2F, they made money by foreclosing properties they did not own and then selling them, and they will likely make more money in other devious ways which are not yet public.

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Big Banks – Big Frauds

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Last week, we reported that JPMorgan was found to have committed fraud in foreclosure proceedings in Florida. Early this week, Ally Bank, (which is the name GMAC Finance adopted to try to escape the stink of the name “GMAC”), suspended foreclosure operations in 23 states when it was disclosed that the bank forged affadavits in its foreclosure activities. Today, WaPo reports that Bank of America has also suspended foreclosure operations in 23 states because – as the article says – it is examining “whether it rushed the foreclosure process for thousands of homeowners without reading the documents.”

So let’s tally this up: in the last week, JPMorgan and its Washington Mutual subsidiary were proven to have committed fraud, GMAC finance was proven to have forged affadavits and BofA, (which swallowed both CountryWide Financial and Merrill Lynch), is pretty damn sure they did the same thing. Anyone want to take bets on whether or not Goldman Sachs, Morgan Stanley, Wells Fargo, Citibank, Fannie Mae, Freddie Mac and a host of other “Too Big To Fails” also committed fraud? No? Didn’t think so.

The big banks and their accomplices in the Congress, the Treasury and the Federal Reserve have raped and pillaged this country and they will continue to rape and pillage because that is what they do. The government will not stop them because the government is Wall Street’s whore. The regulators will not stop them for the same reason. The Federal Reserve will not stop them because the Fed’s charter is to preserve the banks. There is only one way to stop them and that is to starve them. If you want to know what to do, then it is time to resist.

Stop paying your mortgage if it is serviced by any of these bastards. Stop paying credit card bills. Keep that money. Refuse to vote for any congressman that voted for bailouts. The only way to take them down is to starve them out. It is time for the middle class of America to lay siege to the bastards on Wall Street and in Washington – both Democrat and Republican – and starve them out. Don’t give them your money, your labor, your time or your vote.

You can no longer keep your freedom and your credit rating. It’s one or the other folks. I don’t care if you can afford to pay off those bills. You are collaborating with the enemy if you pay off bills to any of the Too Big To Fails.

Starve them out.

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Is Your Bank Attempting to Foreclose Your Mortgage?

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A judge in Florida recently dismissed a foreclosure proceeding by JPMorgan/WaMu because he found that the company committed fraud on the court by attempting to foreclose on property they didn’t actually own. (The link is a six page legal finding, but is actually a very easy read.) Here’s some tasty excerpts:

It is now undisputed that the plaintiff (JPM/WaMu) is not nor ever has been, the owner and holder of the defendants note that is the subject matter of this case.

The court finds by clear and convincing evidence that…

…WaMu (and others) committed fraud on this court.

…these acts committed by WaMu amount to a “knowing deception intended to prevent the defendants from discovery essential to defending the claim” and are therefore fraud.

The gist of the story hinges on the fact that WaMu never owned the mortgage; it was just the mortgage servicer.

The Washington Post online brings us this story about how such a thing could happen:

Some of the nation’s largest mortgage companies used a single document processor who said he signed off on foreclosures without having read the paperwork – an admission that may open the door for homeowners across the country to challenge foreclosure proceedings.

In other words, banks are foreclosing on thousands of mortgages they don’t actually own.

If that is happening to you, find out if the bank bringing the foreclosure actually has any legal standing to do so. You can search the Fannie Mae web site to see if FNMA owns your mortgage. (They own 60 million mortgages, so its likely yours is one of them.)

If the bank cannot prove ownership of your mortgage, they cannot legally foreclose on you. Find out.

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Sincere Ignorance and Conscientious Stupidity

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Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity.  -Martin Luther King Jr.

Nobody wants to believe that there are a handful of Wall Street bankers so intractably evil that they would rather destroy the entire world economy than give up their vacation home in the Hamptons.  Nobody wants to believe that there are a handful of Washington politicians so intractably evil that they would steal the life savings of millions of people just to preserve their government perks and pensions. Nobody wanted to believe that the Weimar Republic could devolve into National Socialism in only four years – but it did.

I understand why some would think I’m a conspiracy nut. Had I not seen it with my own eyes, heard it with my own ears, touched it with my own hands and lived it every day for the last 25+ months, I would think I was kooky, too. But the facts are right out in the open for anyone who cares to read a balance sheet.

The financial establishment, (which funds Washington through political donations and funds the mainstream financial media through advertising), love to say “nobody saw this coming” but they are either liars or idiots. Lots of people have been warning that the world is heading for a credit crisis for at least the last 3 years. I can name several right off the top of my head: Karl Denninger, Mish Shedlock, Bill Fleckenstein, Reggie Middleton, Peter Schiff, Nouriel Roubini, Gary North and Marc Faber have all written extensively about it for years.  Their record is both long and public.

These guys deal in hard facts. Not conjecture, not theories, not “interpretations” – mathematics. And the mathematics were there in the publicly posted balance sheets of every major bank on Wall Street for all to see. The mathematics were there in the balance sheets of Fannie Mae and Freddie Mac, there in the balance sheets of AIG. The balance sheets said these organizations were all doomed when the loans they made to people who couldn’t pay all went bad.

The loans went bad. The money dried up. The banks are technically insolvent. The only reason they haven’t been shuttered is because they own the regulators, they own the Congress, they own the executive branch and they own the Federal Reserve.

Their “profits” are illusions, but the debts are real. There are only two ways to deal with debt: pay it off or default. The banks won’t default, and they can’t pay it off, so here’s what they have done – they stole the money from the US Taxpayer.

How did they do it? Let’s look:

The S&P 500, which is a proxy for the entire market, has been trading at over 140 times earnings since last summer. What that means for you non-financial types is that the price of the stock market is 140 times the value of the profit the combined companies made. (I would post a link to this statistic, but Standard & Poors removed the link from their website in October.) For comparison, the long term, (80+ year) historical average of the S&P 500 is 15 times earnings. In other words, in an economy with “official” unemployment hovering at 10%, “official” underemployment over 20%, a housing market that has crashed, major banks, insurance companies and auto makers that would be bankrupt if not for the injection of literally trillions of dollars in taxpayer money, plummeting tax receipts, states struggling with historic budget deficits and the largest financial bubble in history – the stock market is trading ten times higher than it’s historical average. Is this economy ten times better than average?

How is that possible?

Follow the money:

March 16 2008 – The Fed & Treasury give JPMorgan a $29B gift if they agree to buy Bear Stearns for $2/share. (When the stock closed on Friday, March 14, it was trading at $22/share. The final purchase price was later negotiated to $10/share.)

July 2008 – Congress gives Fannie Mae & Freddie Mac $800B to keep them from bankruptcy.

Early September 2008 – Lehman goes bankrupt. This event triggers the payment of credit default swaps AIG has sold to various banks around the world. They don’t have the money to pay. Congress authorized an $85b payment to AIG, (later increased to $145b), to keep AIG from BKing. Most of the money that goes in the front door of AIG went right out the back door into the pockets of banks such as Goldman, Morgan-Stanley, Deutsche Bank, UBS, Citibank – the usual suspects.

Late September 2008 - The Big Banks are in fact insolvent, so Hank Paulson, (ex-CEO of Goldman Sachs and current SecTreas), goes to Congress and threatens global apocalypse if Congress doesn’t cough up the dough to bail them out. Congress caves. Hundreds of billions are funneled to the banks through the Federal Reserve. Blomberg files a FOIA request with the Fed to see where the money went. The Fed ignores it. Bloomberg takes ‘em to court. The judge rules in Bloomberg’s favor. The Fed ignores them. To date, the Fed still hasn’t turned over the information.

February 2009 – Obama demands another $800b to help goose the economy. Most of it goes to banks.

March 2009 – the S&P500 hits an intraday low of 666, almost a thousand points below the all time high it hit in October 2007.

Since then, unemployment continues to rise, housing defaults rise, commercial real-estate tanks, sovereign debt crises spread around the globe. Where did ALL THAT MONEY we gave to the banks go?

Look at the stock market. We are currently trading right at 1200 on the S&P, a rise of a little less than 100% in a year. Only one sector of the market has profits consistent with a 100% rise in just over 12 months: Financials. One sector of the market has shown the biggest increase in price in the last year: Financials. One sector of the market makes more donations to Washington than any other: Financials. One sector of the market got hundreds of billions in taxpayer dollars: Financials.

Conclusion: The Wall Street banks took the money that they were supposed to be loaning out to Main Street, and used it to drive up the price of their shares.

How’d they do that?

Front-running, co-located servers and high-frequency trading.

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