Yes, folks the hits just keep coming as the god awful truth is slowly but surely being dug out of the 'media blackout graveyard' about how the Federal Reserve, was not only complicit in the 'endless trip to Vegas' that Wall Street and the Banks went on during the sub-prime meltdown, but in fact the Fed completely shunned it's responsibilities and sat on it's hands as far back a 1999.
In 1999, no less than three times a year, a several of Chicago community groups met with the Federal Reserve and other banking regulators to warn about the growing prevalence of abusive mortgage lending.
The groups begged and pleaded with the FED for regulators to act. The FED put it's blinders on, refusing, completely refusing to do the job it was charged with in protecting Americans from predatory lending, so their pals on Wall Street and the Banks could make a killing. Only that 'killing' ended up crashing our entire economy. You only get one chance to drive the car off the cliff, and the Federal Reserve was driving that car, no matter how they try to rewrite history.
They began to present research in 1999 showing that large banking companies including Wells Fargo and Citigroup had created subprime businesses wholly focused on making loans at high interest rates, largely in the black and Hispanic neighborhoods to the south and west of downtown Chicago. The evidence eventually led Illinois to file suit against Wells Fargo in July for discrimination and other abuses.
But during the years of the housing boom, the pleas failed to move the Fed, the sole federal regulator with authority over the businesses. Under a policy quietly formalized in 1998, the Fed refused to police lenders' compliance with federal laws protecting borrowers, despite repeated urging by consumer advocates across the country and even by other government agencies. The hands-off policy, which the Fed reversed earlier this month, created a double standard. Banks and their subprime affiliates made loans under the same laws, but only the banks faced regular federal scrutiny. Under the policy, the Fed did not even investigate consumer complaints against the affiliates.
"In the prime market, where we need supervision less, we have lots of it. In the subprime market, where we badly need supervision, a majority of loans are made with very little supervision," former Fed Governor Edward M. Gramlich, a critic of the hands-off policy, wrote in 2007. "It is like a city with a murder law, but no cops on the beat."
http://www.washingtonpost.com/...
Exactly right Governor Gramlich: As a matter of fact, the entire country was a country with a 'murder law - but there were no cops (the FED) on the beat. It's called controlled fraud and economic terrorism.
But it is all starting to 'unravel and catch up' for some of these crooks and liars and Matt Tabbi is working on a new story for Rolling Stone to show the backlash that in now happening in local courts, because the judges are getting sick to death of what is happening to many millions of Americans due to these 'liar loans'....:
Waking up to discover the mortgage market was a giant criminal enterprise
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.
via Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks.
This is a potentially gigantic story. It seems that a court has ruled that about half of the mortgage market has been run as a criminal enterprise for years, which would invalidate any potential forelosure proceedings for about, oh, 60 million mortgages. The court ruled that the electronic transfer system used by the private company MERS — a clearing system for mortgages, similar to a depository, that is used for about half the mortgage market — is fundamentally unreliable, and any mortgage sold and/or transferred through MERS can’t be foreclosed upon, at least not in Kansas.
Coincidentally I’d been working on something related to this all day yesterday. All over the country, lawyers are contesting foreclosures because of similar chain-of-custody issues. I have some material about this coming out in my next Rolling Stone story, so I can’t get into this too much, but suffice to say the lenders and the banks were extremely sloppy about their paperwork (at best — there is a fraud angle as well) and jammed up the system with missing and/or mismarked mortgage notes. Since a sale isn’t legal unless there’s full transfer of the physical note, a lot of the sales of mortgage-backed securities were not entirely legal, since the actual notes were often not transferred.
http://trueslant.com/...
This is a 'step' in the right direction: the fact that the courts are at least recognizing the fact that the electronic transfer system used by the private company MERS is fundamentally unreliable.
Which brings me back to the fact that the Federal Reserve was 'fundamentally unreliable' and in fact enabled the Banks and Wall Street to plunder and rape, without equivocation, without up-holding any of the Regulations that they were responsible for in protecting Americans from predatory lenders because they simply sat on their hands and let the mayhem continue despite repeated warnings.
The Federal Reserve is best known as an economic shepherd, responsible for adjusting interest rates to keep prices steady and unemployment low. But since its creation, the Fed has held a second job as a banking regulator, one of four federal agencies responsible for keeping banks healthy and protecting their customers. Congress also authorized the Fed to write consumer protection rules enforced by all the agencies.
During the boom, however, the Fed left those powers largely unused. It imposed few new constraints on mortgage lending and pulled back from enforcing rules that did exist.
The Fed's performance was undercut by several factors, according to documents and more than two dozen interviews with current and former Fed governors and employees, government officials, industry executives and consumer advocates. It was crippled by the doubts of senior officials about the value of regulation, by a tendency to discount anecdotal evidence of problems and by its affinity for the financial industry.
http://www.washingtonpost.com/...
That last sentence is just a bunch of bullshit. 'It wasn't crippled by the doubts of senior officials about the value of regulation.'
It was warned repeatedly as far back as 1999 about what was going on, and it still 'ignored' what was going on. The FED was in direct dereliction of it's mandate, it's responsibilities, it's duty to protect the American people - because of one reason and one reason on: To make money for the Banks and Wall Street.
And we can thank Alan Greenspan from actually having the fucking temerity to state that he 'didn't realize that the Banks/Wall Street' would not regulate themselves.
Right Alan, that was your fucking job and you drove the car right off the cliff:
Much of the blame has been aimed at Greenspan: "Because the Federal Reserve under Alan Greenspan pushed interest rates too low and kept them low for too long, and because regulation of financial intermediaries had over the years dwindled and became especially lax during the Bush Administration, the bankers were allowed, and competition forced them, to take risks that could have and have had disastrous results," wrote Richard A. Posner, Seventh Circuit Court of Appeals Judge.
Nobel Laureate Joseph Stiglitz adds other culprits as crucial to the making of the current economic crisis. Among them:
- the April 1998, decision of President Clinton's Working Group on Financial Markets to quash a proposal by Brooksley E. Born, head of the Commodity Futures Trading Commission, to regulate derivatives;
- enactment of Gramm-Leach-Bliley Act on November 12, 1999 allowing consolidation of commercial and investment banks;
- passage of the Commodity Futures Modernization Act of 2000 removing derivatives from federal oversight;
- the Bush tax cuts of 2001 and 2003;
5) the failure of the Federal Reserve to take responsibility for regulating derivatives; and
- the Securities and Exchange Commission decision in April, 2004, to allow large investment banks to increase their debt-to-capital ratio from 12 to 1 to 30 to 1, or higher.
What each of these actions (and inactions) has in common is that Greenspan either initiated or endorsed them.
This is what your little car crash off the cliff looks like Alan:
Now, three years after he left the Fed, Greenspan confronts a catastrophic legacy. All around him is the evidence of an extraordinary "trail of casualties" left in his wake -- men and women losing their jobs at a rate of half a million-a-month; foreclosures forcing Americans out of their homes; and the Dow plunged by 46.7 percent from its high of 14,164.53 on October 9, 2007.
The gross domestic product began to fall at an annual rate of 0.5 percent in the third quarter of 2008 and then accelerated to a 3.8 percent rate of decline in the fourth quarter; corporate profits fell by $160 billion from $1.67 trillion in the third quarter of 2007 to $1.51 trillion in the fourth quarter of 2008. The unemployment rate has risen from 4.7 percent in January 2006, when Greenspan retired, to 7.6 percent last month.
The Dow Jones Industrial Average, which reached a high of 14164.53 on October 9, 2007, has collapsed to 7,555.63 at the close of business Wednesday - a drop of nearly 47 percent.
Which of course led us to the greatest financial 'Heist' in the history of our nation - Hank Paulson - Ben Bernanke - Tim Geithner trying to unring that bell that has been rung - that has 'rung' the neck of our entire and world economic system by 'stealing money' from the taxpayers to make up for their lack of 'oversight' and by holding the Federal Reserve accountable for what should have been taking place as far back as 1999 when local Chicago businessmen came begging, time and time again for the Federal Reserve to 'simply do their job' and stop the liar loans that were already reeking havoc in their communities.
Of course, now that the car has been driven off the cliff, and we have Ben Bernanke doling out 17 trillion or so, give or take a dollar to god knows who - he has decided in as his 'Holiness of the Money Keeper' to step up to the plate and supposedly do the job that he and Alan weren't doing in the first place:
Finally, as the housing market, then the financial system, then economy came crashing down, the reluctance to regulate started to fade away.
Bernanke asked the Fed's lawyers to revisit their concerns and, in July 2007, the Fed announced a pilot program to examine a few subprime affiliates. This summer, pronouncing itself satisfied with the results, the Fed announced it would launch regular consumer compliance examinations.
"In looking at our responsibility to enforce these consumer laws we believe a somewhat more proactive stance is justified," Bernanke told Congress.The Fed also said it will begin to investigate consumer complaints.
The 'Consumer' laws were always there Ben, from the get go. You and Allan just ignored them all for the 'Greedy Addicted Vegas Money Hungry' pals of yours on Wall Street/Banks. Only now, we, the taxpayers are picking up the bill for the 'hang over' from the party that turned into the great deluge of the century, ruining millions of Americans lives.
Who the fuck to they think they are fooling? Not Rep. Alan Grayson, that's for sure. I ran this video in another diary, but I can't help run it again, because at least one decent hard assed Congressman is not buying all the bullshit coming out of the Federal Reserve. The last time I saw someone question a person like this was when Bobby Kennedy went after Jimmy Hoffa. If I could replace the entire Congress with clones of Alan Grayson, I'd do it in a heart beat:
Alan Grayson: I would like to know whether it is within the Federal Reserve's legal authority to try to manipulate the stock market or the futures market.
Federal Reserve GC Scott Alvarez: I don't believe the Federal Reserve tries to manipulate the stock market...(Yoda: Do or do not, there is no try.)
Alan Grayson: Does the Federal Reserve actually possess all the gold that's listed on their balance sheet.
Scott Alvarez, doing a classic poker body language tell, and taking his time: Yes...
Alan Grayson: Who actually executes the trades for the Federal Reserve in the markets?
Scott Alvarez: The Federal Reserve Bank of New York, which executes trades through Primary Dealers.
Alan Grayson: Can you name one Primary Dealer?
Scott Alvarez: JP Morgan Chase
Alan Grayson: Do you mind if we have a GAO audit to see if there has been front-running or insider trading by them? Do you mind? Is that ok with you?
Scott Alvarez: I am not sure if I have that authority...
http://www.zerohedge.com/...
The truth is dripping out, drop by drop, and as the old saying goes: The FED can run, but they can't hide, and soon or later, I hope to hell we catch up with these crooks and liars who brought us all down, leaving our country scorched and burned to the ground with their unbridled greed and epic fraud.
The Banks/Wall Street are gearing up to do what ever they can to hold on to the same 'credit default swaps' that brought our country to it's knees, they are paying off who ever they can in Congress to make certain that the Consumer Protection Agency will be gutted and meaningless, and the very idea that President Obama would give the Federal Reserve any more power for regulating than they already have is 'insane'.
The FED, Wall Street and the Banks are all one in the same, and anyone that doesn't 'get that' by now is living in Banana Land. All three of these entities worked in collusion to bring our country to it's knees, and if you think they won't do it again, then you're delusional.
Thanks.