Geithner does not see global inflation as a concern

by Tyler Durden
Originally posted Jan 28, 2011

Further confirming that America deserves each of its elected officials, in this case a Treasury Secretary whose intellect is increasingly put into question with every single utterance out of his mouth, was Tim Geithner’s statement from Davos earlier that inflation on a global level is “not high on the list of concerns” although probably while looking at pictures of tear gas being fired at protesters in Tunisia, Algeria, Yemen, Morocco and now Egypt he added “emerging markets across the world are certainly ‘feeling some pressure’.”

IF BY PRESSURE, HE MEANS REVOLUTIONS, THEN HE IS CERTAINLY SPOT-ON. As for Egypt’s soon to be deposed leaders, Timmy has four words of advice: please kill the dollar. “Geithner told the World Economic Forum that emerging markets could manage their inflation problems better if they loosened their currencies’ links to the dollar, a measure that economists say would lead in most cases to an appreciation against the greenback.”

And there you have it: America continues keeping the world hostage courtesy of the dollar’s reserve status, able to export inflation at will knowing that the US consumer is irreplaceable, and the only recommendation we have to the world is to continue devaluing the dollar (yes, a weaker dollar means stronger opposing non-dilutable currencies), an act for which we are sure the US middle class thanks him.

 

More on the inane banality emanating from the vocal orifice of the tax cheat:

As for the U.S.’s own fiscal problems, Geithner admitted that the current position is “unsustainable in the long run” and needs to lay out a credible, multi-year path to sustainability. He bemoaned the fact that the U.S. political system lacks any mechanism to enforce this.

Geithner expressed confidence that the recovery has taken root in the U.S., pointing to clear increases in private investment and job creation over the last 12 months. Without explicitly endorsing them, he referenced consensus forecasts of between 3.5% and 4% annualized growth for the U.S. for the near term, and a “tighter consensus” that the jobless rate will fall to below 8% by the end of next year, from around 9.6% at present. He noted, though that the U.S. was “consigned to a tragically moderate” recovery and an accordingly slow decline in joblessness. Speaking Thursday, HSBC Holdings PLC chief economist Stephen King had noted that although an annualized growth rate of 3.5%-4% appears healthy enough, it’s below the 5%-7% that the U.S. has seen at a comparable stages of previous recoveries.

The fraud started at the very top: with government leaders

by George Washington
Originally posted November 2, 2010

http://georgewashington.blogspot.com

The government’s entire strategy now – as during the S&L crisis – is to cover up how bad things are. But it is not only a matter of covering up fraud that has already happened. The government also created an environment which greatly encouraged fraud. Here are just a few of many potential examples:

• The government-sponsored rating agencies committed massive fraud (and see this)

• The Treasury department allowed banks to “cook their books”

• Business Week wrote on May 23, 2006:

“President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.”

• Regulators knew of and allowed the use of debt-hiding accounting tricks by the big banks

• Tim Geithner was complicit in Lehman’s accounting fraud, (and see this), and pushed to pay AIG’s CDS counterparties at full value, and then to keep the deal secret. And as Robert Reich notes, Geithner was “very much in the center of the action” regarding the secret bail out of Bear Stearns without Congressional approval. William Black points out: “Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth”

• The former chief accountant for the SEC says that Bernanke and Paulson broke the law and should be prosecuted

• Freddie and Fannie helped to create the epidemic of mortgage fraud

• The government knew about mortgage fraud a long time ago. For example, the FBI warned of an “epidemic” of mortgage fraud in 2004. However, the FBI, DOJ and other government agencies then stood down and did nothing. See this and this. For example, the Federal Reserve turned its cheek and allowed massive fraud, and the SEC has repeatedly ignored accounting fraud. Indeed, Alan Greenspan took the position that fraud could never happen

• Bernanke might have broken the law by letting unemployment rise in order to keep inflation low

• Paulson and Bernanke falsely stated that the big banks receiving Tarp money were healthy, when they were not

• Arguably, both the Bush and Obama administrations broke the law by refusing to close insolvent banks

• Congress may have covered up illegal tax breaks for the big banks

Economist James K. Galbraith wrote in the introduction to his father, John Kenneth Galbraith’s, definitive study of the Great Depression, The Great Crash, 1929:

The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of “an epidemic of mortgage fraud.” But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ….

This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor. The government that permits this to happen is complicit in a vast crime. In other words, the fraud started at the very top with Greenspan, Bush, Paulson, Negraponte, Bernanke, Geithner, Rubin, Summers and all of the rest of the boys.

As William Black told me today: In criminology jargon: they created an intensely criminogenic environment. I have no knowledge whether the national security aspects played any role, but the anti-regulatory dogma was devastating.

Foreclosuregate and Obama’s “pocket veto”

by Ellen Hodgson Brown
at Web of Debt
posted originally on Oct 10, 2010

Ellen Brown is the author of Web of Debt: the Shocking Truth About Our Money System and How We Can Break Free. She can be reached through her website.

AMID A SNOWBALLING FORECLOSUREFRAUD CRISIS, PRESIDENT OBAMA YESTERDAY BLOCKED LEGISLATION that critics say could have made it more difficult for homeowners to challenge foreclosure proceedings against them. The bill, titled The Interstate Recognition of Notarizations Act of 2009, passed the Senate with unanimous consent and with no scrutiny by the DC media. In a maneuver known as a “pocket veto,” President Obama indirectly vetoed the legislation by declining to sign the bill passed by Congress while legislators are on recess. The swift passage and the President’s subsequent veto of this bill come on the heels of an announcement that Wall Street banks are voluntarily suspending foreclosure proceedings in 23 states.

By most reports, it would appear that the voluntary suspension of foreclosures is underway to review simple, careless procedural errors. Errors which the conscientious banks are hastening to correct. Even Gretchen Morgenson in the New York Times characterizes the problem as “flawed paperwork.” But those errors go far deeper than mere sloppiness. They are concealing a massive fraud. They cannot  be corrected with legitimate paperwork, and that was the reason the servicers had to hire “foreclosure mills” to fabricate the documents.These errors involve perjury and forgery – fabricating documents that never existed and swearing to the accuracy of facts not known.

Karl Denninger at MarketTicker is calling it “Foreclosuregate.” Diana Ollick of CNBC calls it “the RoboSigning Scandal.” On Monday, Ollick reported rumors that the government is planning a 90-day foreclosure moratorium to deal with the problem. Three large mortgage issuers – JPMorgan Chase, Bank of America and GMAC – have voluntarily suspended thousands of foreclosures, and a number of calls have been made for investigations.

Ohio Attorney General Richard Cordray announced on Wednesday that he is filing suit against Ally Financial and GMAC for civil penalties up to $25,000 per violation for fraud in hundreds of foreclosure suits.These problems cannot be swept under the rug as mere technicalities.  They go to the heart of the securitization process itself. The snowball has just started to roll.

You can’t recover what doesn’t exist
Yves Smith of Naked Capitalism has uncovered a price list from a company called DocX that specializes in “document recovery solutions.” DocX is the technology platform used by Lender Processing Services to manage a national network of foreclosure mills. The price list includes such things as “Create Missing Intervening Assignment,” $35; “Cure Defective Assignment,” $12.95; “Recreate Entire Collateral File,” $95. Notes Smith:

Creating… means fabricating documents out of whole cloth, and look at the extent of the offerings. The collateral file is ALL the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage backed security holder. This means most importantly the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.