- AIG, in the infinite wisdom of its Marketing aka Branding Department (because history suggests that one shouldn't credit the Board of Directors with that much sense), has elected not to join Starr International's derivative takings lawsuit against the feds, stating publicly that it will also use its standing under the securities laws to disclaim any claim that Starr contends it is pursuing for the benefit of the company. This commonsense decision came after nearly a week where, in a display of infinitely-rare political unity, armchair pundits (otherwise known as regular old American people) wearing both types of political striping took AIG to the rhetorical woodshed for even thinking about the idea of complaining about the government's saving AIG from imminent bankruptcy. This rhetorical asswhuppin' was doled out over social and traditional media, no less:
Former Obama administration adviser Austan Goolsbee said "GO SCREW YOURSELVES" in a multi-tweet tirade. Comedian Andy Borowitz drafted a mock letter from the company to taxpayers, asking for more bailout money to pay for the cost of the lawsuit. Dozens of obscene comments made descriptive references to the anatomy of Chief Executive Robert Benmosche.When even the
And those were the gentler barbs. The New York Daily News ran an editorial cartoon in which a lifeguard saves a drowning man with "AIG" on his belly. When the lifeguard asks the man how he feels, the victim says, "Like suing you."
usually right-wing crazyNew York Daily News has a go, we know that the public has not yet forgotten that AIG was one of the worst offenders in the events leading up to the Great Recession aka Second Great Depression if not the worst and the recipient of the largest bailout of a private company by the federal government in US history even while it was still paying hefty bonuses to the failures aka AIG corporate executives that were in charge of it all and sending them on corporate retreats. AIG's "Thank You, America!" campaign has now been replaced by its "We're Dumb but We're not That Dumb!" media blitz. The new PR push will highlight screenshots of the interoffice memorandum that was no-doubt written by AIG's Chief Marketing Officer the day news broke publicly that AIG's Board would consider joining the suit juxtaposed across a check for $22BN, representing the "profit" the Treasury made on its "investment" in AIG. That profit being the most important thing because, lest you may forget, profiteering with the public fisc was the much-trumpeted justification the American people were given in 2008 and 2009 for taxpayer funds being used to bail out AIG and other publicly-traded corporate-citizens-from-Hell in their time of woe.
- In this week's "it's better the public doesn't know how bad it really was—trust me" news category, the Office of the Comptroller of the Currency has shut down its foreclosure file review process following the latest chump change payout (aka government settlement with lenders in the "best interests of taxpayers") of $8.5BN by the 10 largest banks to 3.8 million homeowner borrowers. Consultants hired by the OCC to do the file reviews that led to the settlement were paid more than $1B (one minimum wage out-of-work mortgage reviewer at a time, apparently) to review mortgage files for these lenders. Yet to this day nobody STILL knows how many homeowners actually were, or were not, harmed by improper/illegal transfer/lien/foreclosure practices (and forget about knowing how many of the nearly 500,000 mortgages under review were written in violation of the law to begin with; we're not worthy.) And we never will, thanks to the settlements. Of particular note: this latest B of A/Countrywide settlement has been structured so that everyone will get a little something, whether or not they actually lost anything, even if it means that those who lost something end up with less than they deserve. The words "moral hazard" are nowhere to be found, perhaps because unlike helping a homeowner get out from underwater, this money is being paid to get the government off the back of some Very Important Lenders so they can go back to making mo' money without having to look over their shoulders. It all makes perfect sense.
- Public Citizen and Senator Bob Menendez (NJ) have raised objections to Bank of America's settling a $1.4T Countrywide mortgage pool dispute with Fannie Mae. The central feature of the settlement: Bank of America making a $3.6B cash payment to, and agreeing to a $6.75B mortgage buy-back from, the agency to resolve all present and future demands for repurchase of the pool, which will remain the problem of Fannie Mae post-settlement. This represents a payment of just around $0.07 on every dollar of B of A's exposure. Public Citizen and Mendenez have objected on the grounds that the settlement amount is just a little too little. But it's not clear what the point of their challenge is: Everyone knows that it is in the best interests of taxpayers, shareholders and the public for large financial institutions facing trillion-dollar liability to make restitution to the government at a rate of under ten cents on the dollar. The Federal Housing Finance Agency says so. Just a few months ago, BofA paid just $2.43BN to settle a $50BN securities class-action litigation over its 2008 acquisition of Merrill Lynch (in comparison to paying $1.6BN in legal fees for its defense), effectively killing not only that lawsuit, but also in practical terms NY Attorney General Eric Schneiderman's abililty to pursue New York's separate fight with the bank over the disclosures it made (or actually didn't make) to shareholders in connection with the Merrill acquisition at the same time. Viewing the current $0.07 on the dollar settlement with Fannie Mae in conjunction with its earlier one that yielded a restitution to alleged loss ratio of just under $0.05 on the dollar, the system is clearly "working as intended" for Bank of America.
- It's flu season with a capital F, again. A major city declared a public health emergency, reports abound of folks laid up for more than a week combined with increasing reports of hospitals being overrun and deaths (20 kids so far) thanks to the H3N2 and H1N1 strains running around together this year make the news that Tamiflu is available post-initial symptoms good news, even if it's a small piece of good news compared to being laid up for a week or two (I know someone that could not function for 17 days). Want to do a mitzvah for progressives in early 2013? Please stay home if you are sick. Don't go to school, don't go to work, definitely don't fly or take the subway (close quarters) and don't go anywhere until you are 100% well. Your friends, neighbors, colleagues at work and fiercest political enemies will really appreciate it. Because flu is fugly generally, really fugly this year, and even the public health folks are saying vaccinations may not be as effective as normally hoped this year's cycle.
- This week, SCOTUS set the dates for its hearings on the same-sex marriage cases it has agreed to hear this term. The Proposition 8 matter, Hollingsworth v. Perry, will be argued on March 26, 2013. The second case, United States v. Windsor involves DOMA's prohibition on the payment of benefit to same-sex spouses where their marriage was solemnized legally in their state of domicile, will be heard the next day. This is smack dab in the middle of Holy Week, the most solemn, sorrowful and joyful week in the Christian calendar to celebrate the Passion of Christ, the week during which Jesus arrived at Jerusalem, held the Last Supper, was tried, convicted, and crucified (or alleged to have been, if you are not a believer in such things.) Coincidence? With the 6 out of the 9 SCOTUS justices being Roman Catholic, 4 of them devoutly so, one has to ask.
- This year sees not one, but two, critical anniversaries in the history of African-Americans: Jubilee Day, honoring the issuance of the Emancipation Proclamation by President Abraham Lincoln on January 1, 1863 freeing slaves in most (but not all) of the Confederate south (regardless of whether or not he was actually trying to do something good for Black people, which remains a fierce topic of historical debate) and, later this year on August 28, the 50th Anniversary of the March for Jobs and Freedom (known to most as the March on Washington and that's not a historical accident) at which the Dr. Rev. Martin Luther King, Jr. catapulted into the world's consciousness by not just telling us about his Dream (which are we are all taught today at the knee even though it was only 25% of what he preached that day and arguably not the most important 25%), but refusing to believe that the American "bank of justice is bankrupt" and exhorting us to the "fierce urgency of now." One has to ask what either President Lincoln or Dr. King would think about what they did and said, in light of the still-deteriorating collective condition of America's Black citizenry today (where the majority of Black students still learn in largely segregated classrooms, our already-high unemployment rate is going UP (again) and is actually worse today than it was 50 years ago; residential segregation is getting worse; it's practically open season again on our young men; and all the while the country can't even talk about Black people anymore without mentioning some other group as if the two are joined at the hip (unless, of course, it's about laziness, crime or out-of-wedlock births) and when it does it's largely to crickets. In light of these historic moments of promise in Black folks' collective American journey, one really does have to wonder if it's true that we're becoming not just invisible, but irrelevant, to the country our slave labor arguably built.
- The Consumer Finance Protection Bureau released its long-awaited "ability to repay" mortgage rule this week, causing sighs of relief in some circles (mostly lenders) and sighs of frustration about the government's priorities in addressing the underlying causes of the mortgage loan debacle (mostly consumer advocates) in others. Lost in most of the online discussion? The fact that this much-awaited new rule includes only a few of the of the lender reforms that were the promise of Dodd Frank and the raison d'etre of the CFPB. And not even the most important ones, from the perspective of consumers. What happened to those really-needed and promised rules, like those requiring clearer and unified cost disclosures to borrowers otherwise required by the Truth and Lending Act (TILA) and Real Estate Settlement Practices Act (RESPA); rules establishing stricter mortgage servicing requirements to avoid abuse; restricting broker compensation and yield-spread premium practices which drive up the cost of loans to consumers, often without the consumer knowing; and especially the rule implementing the significantly-enhanced mortgage lending disclosures required by Dodd-Frank? Those rules were "deferred"; with CFPB's stated reason being that the lending community felt it would be too onerous to implement all this changy thingie all at once. CFPB has promised that the missing rules are coming "Soon."
Why the CFPB's decision to prioritize a rule whose existence is arguably unnecessary since it has ALWAYS been the law that a lender is required to responsibly underwrite, and deprioritize rules that make it more difficult for lenders to take advantage of borrowers? Might be this little Fun Fact: Under the new rule, starting in January 2014 if a lender can prove that they properly "vetted" a borrower's income when making a mortgage loan, rendering the mortgage "qualified", they have no legal liability if the loan was otherwise unfair by its terms. The new regulation therefore creates a safe harbor that was absent in Dodd-Frank for lenders, all in the name of "protecting consumers." It seems obvious why this was so important: we all know (because we've been propagandized relentlessly with this shibboleth since late 2008) that "homeowners buying more home than they can afford" and "lender's exposure to liability" were the two most critical reasons for the foreclosure and mortgage crisis. The Fed failing to recognize and address in time the abusive and predatory lending and servicing practices driven by the ruthless profit motive of the securities markets? Those had absolutely nothing to do with any of it.
- In other rulemaking news, the FDA has finally issued its (proposed) regulations attempting to implement the Food Safety Modernization Act. The Act, passed in 2011, significantly improves safety practices in the US once fully implemented (Only took 70 years.) Just one small problem. Implementation of the new requirements, which will cost an estimated $1.4B, isn't fully funded. So, even if the new rules gain Congressional approval, the almighty dollar is A Problem. The even bigger problem? "We need additional resources to fully fund” the law," [Michael R. Taylor, FDA deputy commissioner] said when asked how the agency would pay for the new rules. “We’re hopeful we can work with Congress to get those resources.” Well, OK, then.
- In the "you couldn't script this better if you were making an anti-gun PSA" category of news, Vice President Biden's press conference on gun regulation was interrupted by another school shooting—this time by a student who claims he was bullied by his targets that was stopped by an (unarmed) teacher who used the deadliest weapon of all, discussion and persuasion, to talk him down from the psychic bell tower. " Coming just days after news broke nationally that one of the Internet's fiercest "Fuck with me if you want to; I got a gun (including at the movies), bitches!" pro-gun talking heads (Keith Ratliff) was murdered at his job in Georgia (surrounded by guns) by someone with. . . a gun, it's really hard to understand why we don't just pass a law requiring folks to be armed before starting Kindergarten in the same way we require them to be vaccinated, and call it a day.
- The mother and brother of DREAM activist Erika Andriola were released from ICE custody after a massive public relations campaign developed following the seizure being made public. The incident once again highlighted the complete disconnect between what the government's removal policy for non-criminal undocumented is on paper and what it is in real life, where last year more than 400,000 undocumented were removed. No matter where you fall on the question of removal/deportation of the undocumented (particularly when they have been legally removed before and returned to the US again undocumented, as is alleged to be the case for Ms. Andriola's mother in 2008), the idea that an activist's family was, apparently, targeted should send chills down everyone's spine.
[Note: Sorry was away when this posted. I have corrected the reference to the New York Daily News since so many were upset about it. I read the News growing up and frankly my recollection was that it weren't any better in terms of liberal news to me compared to the Post (which is why I preferred The Voice and the Amsterdam News), but since I don't live in New York anymore and in the interests of folks focusing on the news rather than the adjective, I've deleted the right wing reference. Mea Culpa.]