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From Naked Capitalism:
The story did not outline terms, but previous leaks have indicated that the bulk of the supposed settlement would come not in actual monies paid by the banks (the cash portion has been rumored at under $5 billion) but in credits given for mortgage modifications for principal modifications. There are numerous reasons why that stinks. The biggest is that servicers will be able to count modifying first mortgages that were securitized toward the total. Since one of the cardinal rules of finance is to use other people’s money rather than your own, this provision virtually guarantees that investor-owned mortgages will be the ones to be restructured. Why is this a bad idea? The banks are NOT required to write down the second mortgages that they have on their books. This reverses the contractual hierarchy that junior lienholders take losses before senior lenders. So this deal amounts to a transfer from pension funds and other fixed income investors to the banks, at the Administration’s instigation.
Another reason the modification provision is poorly structured is that the banks are given a dollar target to hit. That means they will focus on modifying the biggest mortgages. So help will go to a comparatively small number of grossly overhoused borrowers, no doubt reinforcing the “profligate borrower” meme.
The Codepink "Pink Panther Ladies Investment Club" met with Goldman Sachs in their posh San Francisco offices
By Dave Lindorff
On my Yahoo home page today, there was a picture of the globe, and an instant poll asking me to check one of two choices: Yes or No, Do you believe global warming is a real threat?
I don’t usually waste my time on these things, but there was that tantalizing link to “See the results,” and you had to vote to see them, so I voted.
NEW Podcast & Organizer Resources Page
Student Debt Jubilee & Why Higher Education Ought to be Free Podcast
We are excited to share with you the podcast of our recent interview Student Debt Jubilee & Why Higher Education Ought to be Free. On this podcast, the 84th in our Conversations with the Cabinet series, we learned from expert organizers about effectively challenging the unjust phenomenon of student loan debt, as well as why free higher education for all at our two- and four-year public universities is a common-sense, fair and affordable alternative.
Quality public higher education is a right and yet this basic right has been violated for 36 million Americans who have student loan debt. In 2010, average student debt upon college graduation was $24,000 (see Huffington Post article). This year, unpaid college student loans exceeded $1 trillion for the first time, and student loan debt is now higher than credit card debt. (see USA Today article). Thus, our country is creating an entire generation of indentured servants, while offering unprecedented wealth to predatory and unregulated private lenders such as Sallie Mae (related Mother Jones and Counterpunch articles).
We were joined by Alan Collinge of Student Loan Justice StudentLoanJustice.org and author of book Student Loan Scam. We also heard from Serge Bakalian, of Default, the Student Loan Documentary, as well as Kyle McCarthy, Default distributor and co founder of Occupy Student Debt and www.Studentdebt.me.
The second half of our Conversation featured Bob Samuels, President of the University Council, AFT in California, author of Why All Higher Public Education Should Be Free and blogger at Changing Universities , as well as Samir Sonti, graduate student in government, free higher education expert, and member of the Campaign for the Future of Higher Education.
Listen to the podcast, then check out our resource list to see how you can help end student debt and bring about free higher education for all in 2012!
Co-Producer and Host
Conversations with the Cabinet
Grim 2012 Economic Outlook - by Stephen Lendman
Yearend isn't just about holiday season binge shopping, parties, and over-indulgence. It's also when economic predictions surface.
The Wall Street Journal publishes consensus views. On December 23, it headlined, "Risks Cloud Outlook for Economy in 2012," saying:
By Dave Lindorff
It’s fascinating to watch the long knives coming out for Texas Republican Rep. Ron Paul, now that according to some mainstream polls he has become the front-running candidate in the Jan. 3 GOP caucus race in Iowa, and perhaps also in the first primary campaign in New Hampshire.
I stopped by a corporate chain bookstore this week and checked out the "Current Affairs" section. I was a little surprised to discover that according to a dozen or more books dominating the display we are all under a vicious life-and-death assault from a raving, drooling mob of communist devils led by that well-known pinko guerrilla Barack Obama.
Deepening Global Financial Trouble - by Stephen Lendman
Desperate times call for desperate measures, especially for troubled Eurozone economies.
Trapped under euro straightjacket rules, everything tried so far failed, despite hooplas announcing each new plan.
From The New Bottom Line and the Public Accountability Initiative
According to a "mini-report" released today by the The New Bottom Line and the Public Accountability Initiative, Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, US Bank, and Wells Fargo are set to award themselves $156 billion in compensation (including salaries, benefits and bonuses) to executives in 2011, a 3.7 percent increase over 2010. (Although, they do not release data on compensation until next year, it is possible to estimate the size of the compensation pool based on the first three quarters of 2011.)
- To download the mini-report: click here.
- To see our blog post about the report (including info on bank bonus actions in Chicago and Minneapolis last week), click here
- To read the full press release, click here
- To see some infographics we cooked up (comparing BofA, Wells Fargo, Chase CEO compensation to that of hourly, daily, annual pay to average worker) click here
We recently called on the CEOs of Bank of America, Wells Fargo and JPMorgan Chase to forego holiday bonuses for their executives and use the money to write down mortgage principal for families facing foreclosure or who owe more than their homes are worth, make loans to small businesses, and pay their fair share of taxes. In Chicago and Minneapolis last week, National People's Action groups delivered more than 5,000 signatures from that online call to action. On Thursday, families in Chicago pledged to move $218,000 from Bank of America and JPMorgan Chase to community banks and credit unions that share their values (Move Our Money campaign in action!!). On Friday, in Minneapolis, about 50 people protested in front of Wells Fargo and urged the bank to create jobs and help people stay in their homes instead of dispersing huge bonuses. In January, when information about the banks’ compensation packages becomes more available, there will be more protests to come.
Global Economic Tremors - by Stephen Lendman
On December 17, Gerald Celente told On the Edge host Max Keiser:
"The entire financial system is collapsing. Look what's going on in China. All of the empty buildings. Look at the home sales and real estate market. They're in steep decline now."
By Dave Lindorff
Word that the Los Angeles Police, who sent in 1200 officers in riot gear to violently rout a few hundred Occupy Movement demonstrators from their LA encampment last week, had earlier sent 12 undercover young officers into the peaceful occupation camp to spy on the activists should come as no surprise.
America's Weak Jobs Report - by Stephen Lendman
ABC News quoted an unnamed White House spokesperson, saying the November jobs report provides "further evidence that the economy is continuing to heal."
Obama's Chairman of the Council of Economic Advisers Alan Krueger hyped the 0.4% unemployment rate drop to 8.6%, "the lowest (figure) since March 2009." He didn't explain why. More on that below, including the real unreported employment rate.
Bailouts, Bondage and Political Bankruptcy - by Stephen Lendman
Europe and America perhaps face their gravest ever economic crisis. Growing millions are impoverished, unemployed, and out of luck.
Hunger and homelessness are increasing. So is unaddressed anger over handouts to bankers, not people facing crushing hardships.
Last week, I had a conversation with a man who runs his own trading firm. In the process of fuming about competition from Goldman Sachs, he said with resignation and exasperation: “The fact that they were bailed out and can borrow for free — it’s pretty sickening.”
Though the sentiment is commonplace these days, I later found myself thinking about his outrage. Here is someone who is in the thick of the business, trading every day, and he is being sickened by the inequities and corruption on Wall Street and utterly persuaded that nothing has changed in the years since the financial crisis of 2008.
A few weeks ago, we got a real kick out of the fact that Occupy Oakland deposited a $20,000 donation it received into Wells Fargo -- one of the many big banks the movement has been actively protesting since September. Say what you want about Occupy SF camp (it's dirty and filled with homeless people) -- at least protesters there are practicing what they preach.
Members of Occupy SF announced their ambitious plans to turn protesters into bankers by creating the People's Reserve Credit Union. According to Occupy SF's Facebook page:
The goal of this project is to encourage San Francisco residents, businesses, as well as nonprofit and city agencies to keep their money out of the big banks and to redistribute that money locally. Initial services will include micro-loans for the working poor and homeless, and subsidized student loans at low interest rates.
The credit union is being created with the help of San Francisco's Glide Community Church and Supervisors John Avalos and Eric Mar. The group filed its paperwork and has already crafted a thoughtful mission statement: The credit union will serve as a replicable model for other financial institutions to reinvest wealth in their local communities. They will support microenterprise, provide educational loans, and foster community improvement projects.
Jason Macarthur, a protester with Occupy SF, listed the goals that the organization plans to achieve within the first year. That includes starting with 500 members with plans to grow to 2,000 members before the end of next year.
Other plans include:
Massachusetts Files Major Foreclosure-Abuse Lawsuit
he Massachusetts attorney general has filed a lawsuit against five large U.S. banks accusing them of deceptive foreclosure practices, a signal of ebbing confidence that a multi-state agreement can be worked out.
Attorney General Martha Coakley said on Thursday she filed the lawsuit partly because it has been taking too long to hammer out a nationwide settlement.
Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.
State is key to deal on mortgages
California's attorney general has a crucial role in national talks with lenders.
NEW YORK AND LOS ANGELES — California Atty. Gen. Kamala Harris has emerged as a key player in pursuing a nationwide settlement with major U.S. banks accused of wrongful foreclosures and is facing increased pressure from consumer groups seeking help for homeowners devastated by the mortgage crisis.
By Lori Spencer
This is Part II of a series of reports from our traveling correspondent in the American heartland. Part Icovered the arrest of 10 Occupy OKC protesters as they “mic checked” a local Walmart on Black Friday. Part II takes them through 13 hours in an Oklahoma jail. Part III will culminate in the occupiers' final standoff against police as they face a forceful eviction from Poet's Park.
Central Bank Intervention: Much Ado About Nothing - by Stephen Lendman
On November 30, the Fed, ECB, Bank of England, Bank of Japan, Bank of Canada and Swiss National Bank acted together to cut the rate on dollar liquidity swap arrangements by 50 basis points. Markets surged. Irrationally trumped reason.
What, in fact, was accomplished? Swap lines were always available. From 2007 - 2009, they were initiated or expanded globally four times.
By Linn Washington Jr.
London -- Standing on a picket line in front of her work place at a world renowned heart-lung hospital in London wasn’t Jeanette Anderson’s first choice for how to spend her day.
At Risk Eurozone Sovereign Credit Ratings - by Stephen Lendman
Moody's says Eurozone crisis conditions place all member state credit ratings at risk.
It warned 87 European banks to expect downgrades. Moreover, Fitch revised America's debt outlook to negative. Nonetheless, its AAA rating is unchanged. For how long is another issue.
By Lori Spencer
Oklahoma City – In the early morning hours of Black Friday, 10 members of Occupy OKC discovered that chanting “Buy local!” in a crowded Walmart is an arrestable offense in the United States of America.
By Jess Guh
The mainstream media likes to claim that Occupy Movement is comprised of aimless activists without concrete goals. They should go ask Martha and Lorena Reyes, two recently fired Hyatt housekeepers who know exactly why the 1% who run everything need to be occupied and what the 99% is demanding.
Until recently, the two sisters worked for the Hyatt Regency in Santa Clara, CA. On October 14th, after 30 years of combined service, they were abruptly fired.
But THESE campers are not nonviolent. Some have even learned the acceptability of pepper spraying people.
Coming: Big Austerity Cuts - by Stephen Lendman
The congressional August Budget Control Act of 2011 established the Joint Select Committee on Deficit Reduction - aka Supercommittee.
Doing so was extralegal. The Constitution's Article 1, Section 8 explains congressional powers. None of them include supercommittee authority to resolve America's debt crisis.