Denninger: See, HAMP Really Was a Scam

This is a re-post from Karl Denninger’s site, which appears to be having technical difficulties. Hope Karl doesn’t mind.

You have to give these banksters credit – they’ll lie and lie and lie some more….

More than 650,994 loan revisions had been started through the Obama administration’s Home Affordable Modification Program as of last month, from about 487,081 as of September, according to the Treasury. None of the trial modifications through October had been converted to permanent repayment plans, the Treasury data showed. That failure is getting the administration’s attention.

None?  Out of 651,000 “trial” modifications none have turned into a permanent repayment plan?

That’s all the borrower’s fault, right?  There’s no collusion here, yes?  No intent to screw the taxpayer, having taken their money?  Nothing wrong here at all… it just calls for the administration’s “attention.”

Yeah, right.

“We are taking additional steps to enhance servicer transparency and accountability as part of a broader focus on maximizing conversion rates to permanent modifications,” Treasury spokeswoman Meg Reilly said in an e-mail yesterday. The Obama administration plans to announce additional steps tomorrow, including new private-public partnerships and resources for borrowers.


What’s worse, Bank of America has only 14% of their “eligible” loans in a trial modification.  Citibank has 40% under trial, and JP Morgan/Chase 32%.

All in all, only 20% of those “eligible” have been offered, accepted, and are in a trial but zero percent – zero – have actually turned into a permanent loan modification that the homeowner can count on.

The administration program requires banks that received federal aid from the Treasury’s Troubled Asset Relief Program, or TARP, as well as mortgage-finance companies Fannie Mae and Freddie Mac to lower monthly payments for borrowers at “imminent risk” of default.

That’s some “requirement” eh?  Zero percent completion from June to October?  That’s five months, and the “trial” period is supposedly 90 days, so this means that either (1) nobody did anything for the first two months, or (2) not one borrower successfully completed a trial between June and now.

If the Obama Administration and Treasury was serious about this “help” they would be seeking indictments.

Oh wait – they can’t – there was no “or else” put into the law enabling HAMP, was there?  Just looked again – nope – no criminal or civil sanction in there for banks who are allegedly “required” to do these things.

I repeat: A law without a punishment for failure to comply is no law at all – it is nothing other than a scam and a fraud perpetrated by the government to make you “feel good” while in fact doing exactly NOTHING.

Wake me up when our government stops allowing the banks and regulators to both write laws without punishment clauses in them and violate black-letter laws with wild abandon without one person or firm in the bankster community ever going to prison, having their bonus clawed back, or having their corporate charter revoked.

Our so-called “President For Change”, President Obama, in fact has changed nothing, is permitting and encouraging the banksters to rob America blind, and forgot to tell you that the “change” you’re going to get (or keep) is the couple of worn pennies wrapped up in lint at the bottom of your pocket.

Fall of the Republic

Some will watch this film and be turned off by the over-the-top presentation. Fall of The Republic has a conspiratorial tone, which may limit its reach somewhat. But it has already racked up 500,000+ views on YouTube.

The movie conveys hard truths about American politics and economics. At times it veers into questionable territory, but the overall message is of critical importance — both parties in the U.S. are hopelessly corrupt. America is being pillaged.

After a cinematic intro on the New World Order, the film into some extremely relevant stuff. It’s over two hours long, so get a beverage. It features interviews with Bill Black, Max Keiser, Gerald Celente, Jesse Ventura, and Wayne Madsen.

The film’s official website is here, where you can order the DVD.

Dubai’s Spruce Goose Island Ventures

Dubai’s man-made islands are stunning technological achievements. But they may end up as the poster-children for this era’s reckless real estate ventures. These projects are playing a big role in the ongoing debt crisis in Dubai.

Here’s “The World” island project:


And here’s one of the three palm tree islands, where you can see construction underway:


I remember being struck by the scale of the project while watching a Discovery Channel documentary. What a cool concept. Unfortunately, it looks like reality is catching up to this pipe dream.

Recent revelations show that the islands’ parent company, Nakheel PJSC, is in trouble. Their attempt to delay debt payments sparked a global selloff on 11/27. Fears of a debt crisis in Dubai spreading to other emerging markets (EM) roiled stocks.

Investors collectively paused the day after Thanksgiving, “Wait a sec… I thought emerging markets were going to be the engine driving us out of this mess… Now their bubbles are popping? Uhhh-Ohhh.”

Bloomberg provides a detailed example of island building gone-wrong:

Samsung C&T Corp., builder of the world’s tallest tower in Dubai, said it stopped work on a $350 million bridge in the city after a unit of Dubai World halted payments.

Construction of the half-finished bridge, to the man-made Palm Jebel Ali island, was suspended earlier this month after Nakheel PJSC made no payments for about two months, Cho Keun Ho, a spokesman for the Seoul-based builder, said today. Calls to Nakheel’s spokeswoman Anna McGovern went unanswered.

Not all emerging markets have the same debt issues Dubai does, of course. But there are tons of risky investments lurking out there, and they’re not just in EM (hint – many are hidden off US bank’s balance sheets).

Some are speculating that Dubai’s debt problems will be a catalyst, sparking major selloffs worldwide, particularly in EM. If so, I would think those countries with stronger balance sheets, like China, will fare better than those with high debt loads. That said, I am considering reducing my personal EM holdings, but haven’t done so yet.

Rest in peace, Mark Pittman

Mark Pittman, the Bloomberg reporter who sued the Federal Reserve, has died. Without a doubt, he was one of the good guys. The epitome of pro-transparency anti-corruption journalism.

According to Bloomberg (his employer), Mark signed off emails with a link to this image of Woody Guthrie:


From Bloomberg:

Mark Pittman, the award-winning investigative reporter whose fight to open the Federal Reserve to more scrutiny led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52.

Pittman suffered from heart-related illnesses. The precise cause of his death wasn’t known, said his friend William Karesh, vice president of the Global Health Program at the Bronx, New York-based Wildlife Conservation Society.

A former police-beat reporter who joined Bloomberg News in 1997, Pittman wrote stories in 2007 predicting the collapse of the banking system. That year, he won the Gerald Loeb Award from the UCLA Anderson School of Management, the highest accolade in financial journalism, for “Wall Street’s Faustian Bargain,” a series of articles on the breakdown of the U.S. mortgage industry.

“He was one of the great financial journalists of our time” said Joseph Stiglitz, a professor at Columbia University in New York and the winner of the 2001 Nobel Prize for economics. “His death is shocking.”

Pittman’s fight to make the Fed more accountable resulted in an Aug. 24 victory in Manhattan Federal Court affirming the public’s right to know about the central bank’s more than $2 trillion in loans to financial firms. He drew the attention of filmmakers Andrew and Leslie Cockburn, who gave him a prominent role in their documentary about subprime mortgages, “American Casino,” which was shown at New York City’s Tribeca Film Festival in May.

‘One Reporter’

“Who sues the Fed? One reporter on the planet,” said Emma Moody, a Wall Street Journal editor who worked with Pittman at Bloomberg. “The more complex the issue, the more he wanted to dig into it. Years ago, he forced us to learn what a credit- default swap was. He dragged us kicking and screaming.”

James Mark Pittman was born Oct. 25, 1957, in Kansas City, Kansas, where he played linebacker on the high school football team. He took engineering classes at the University of Kansas in Lawrence before graduating with a degree in journalism in 1981. He was married soon after and had a daughter, Maggie, in 1983. The marriage ended in divorce.

Pittman’s first reporting job, covering the police department for the Coffeyville Journal in southern Kansas, paid so little he took a part-time job as a ranch hand across the Oklahoma border in Lenapah, according to an interview he gave to Ryan Chittum for the Columbia Journalism Review’s The Audit, a watchdog for the business press.

‘Huge Personality’

“What a funny guy — huge personality,” Chittum said in an e-mail message. “Mark was my favorite reporter working. In a time when too much journalism is timid or co-opted, Mark personified the whole ‘afflict the comfortable’ tenet of the business. Mark’s passing is a huge loss for journalism at a time when we can least afford it.”

Pittman spent a year in Rochester, New York, with the Democrat & Chronicle newspaper and 12 years at the Times Herald- Record in Middletown, New York, where he met his second wife, Laura Fahrenthold-Pittman in 1995.

“All I know is we fell in love the moment we met,” Fahrenthold-Pittman said in an interview Friday. “We moved in together a week later. He was as serious about his family life as he was about work. Mark did nothing in a small way.”

Pittman joined Bloomberg News in 1997. In 2007, he was writing about the securitization of home loans when subprime borrowers, who have bad or limited credit histories, began missing payments on their mortgages at a faster pace.

S&P, Moody’s

His June 29, 2007, article, headlined “S&P, Moody’s Hide Rising Risk on $200 Billion of Mortgage Bonds,” was excoriated at the time by for “trying to play ‘gotcha’ with the ratings agencies.”

“And that really isn’t helpful,” said the unsigned posting.

Pittman’s story proved prescient. So did his reports on U.S. banks exporting toxic mortgages overseas, on Treasury Secretary Henry M. Paulson’s role in creating those troubled assets while he was chief executive officer of Goldman Sachs Group Inc. and on the U.S. bailout of American International Group Inc.

“He’s been on this crisis since before the crisis,” said Gretchen Morgenson, the Pulitzer Prize-winning financial columnist for the New York Times. “He was the best at burrowing into the most complex securities Wall Street could come up with and explaining the implications of them to readers of all levels of sophistication. His investigative work during the crisis set the standard for other reporters everywhere. He was a giant.”

‘Fearless, Trusted’

In the “Faustian Bargain” series, Pittman explained how 5 percent of U.S. mortgage borrowers missing monthly payments could lead to a freeze in lending throughout the world.

“Mark Pittman proved to be the most fearless, most trusted reporter on the most important beat during the 12 years he wrote about credit markets, corporate finance and the Federal Reserve at Bloomberg News,” said Bloomberg Editor-in-Chief Matthew Winkler. “His colleagues will miss his laughter and generous sense of mission. Bloomberg readers were rewarded by his many achievements culminating with a federal court ruling validating his search for records of taxpayer-financed policies withheld from the public and the Gerald Loeb Award.”

Public policy would be more effective if reporters, lawmakers and citizens understood how the financial system worked and why the crisis happened, Pittman said in the Feb. 27, 2009, interview with Chittum.

“Hopefully, we will be able to inform the people enough to know how badly we’re getting screwed,” he said with a laugh. “We need to know how to prevent it from happening again, and we need to know who did it.”

There’s more at Bloomberg.

A hopeful note

Apparently Zero Hedge met with Mr. Pittman just days before he died.  He was working on a major financial exposè. It looks like his last story will live on. Tyler posted this encouraging note, “We would be humbled to pick up the torch and bring his last opus to closure.”

I am confident that ZH and others will do his legacy justice.

My condolences to his friends and family. He deserves scholarships and foundations in his name, and I bet he gets them.

Update: The Columbia Journalism Review just updated their interview with Mark about Federal Reserve transparency. They also included links to some of his best articles and their coverage of his work.


Page 1 of 512345