Sunday, January 30, 2011

The foxes attempting to guard the FCICing chicken house

William Black has a guest post on Barry Ritholz' Big Picture blog, which joins the throng examining the entrails and intrigue of the Financial Crisis Inquiry Commission (FCIC) report. His contribution here is to provide background on the team of party hacks "investigators" who wrote the report.

How can the Architects of the Crisis Investigate it?
The Commissioners were chosen along partisan lines.

Each of the Republicans commissioners was a proponent of financial deregulation and was appointed to the Commission by the Republican Congressional leadership to champion that view. Three of the Republican commissioners were architects of financial deregulation. For example, the Republican congressional leadership appointed Wallison to the commission because they knew that he was the originator and leading proponent of the claim that Fannie and Freddie were the Great Satans that had caused the current crisis. The fourth member, Representative Thomas, voted for the key deregulatory legislation when he was in Congress and was a strong proponent of deregulation.

The Republican commissioners’ desire to ban the use of the word “deregulation” in the Commission’s report is understandable. There was no chance that they would support a report that explained the decisive role that deregulation and desupervison played in making the crisis possible. Wallison was a major architect of three successful anti-regulatory pogroms (primarily, but not exclusively, led by Republicans) that created the criminogenic environments that led to our three most recent fraud epidemics and financial crises (the S&L debacle, the Enron era frauds, and the current crisis). The Republican congressional leadership appointed Wallison to the Commission in order to place the nation’s leading apologist for deregulation in a position where he could defend it. President Bush appointed Harvey Pitt to be SEC Chairman because he was the leading opponent in America of the SEC Chairman Levitt’s efforts to make the SEC a more effective regulator. In each case, “mission accomplished.”

Each of the Republican commissioners was in the impossible position of having to investigate and judge their own culpability for the crisis. The Republican politicians who selected them for appointment to the Commission knew that they were placing them in an impossible position and ensuring that the Commission would either give deregulation a pass or split along partisan lines and lose some of its credibility. The proverbial bottom line is that the Commission would fail to identify the real causes of the crisis and the control frauds that drove it would continue to be able to loot with impunity.

In contrast, only one of the six Democratic commissioners was involved in financial institution regulation or deregulation. None of the Democrats was known as a strong proponent of any particular view about the causes of the crisis prior to their appointment. Brooksley Born was head of the Commodities Futures Trading Commission (CFTC) under President Clinton. She famously warned of the systemic risks that credit default swaps (CDS) posed.

Her efforts to protect the nation were squashed by the Commodities Futures Modernization Act of 2000, which deliberately created regulatory “black holes” by removing the CFTC’s authority to regulate many trades in financial derivatives. Enron exploited one of these black holes to create the California energy crisis of 2001. The largest banks and AIG exploited the black hole to trade CDS.

While the squashing of Brooksley Born was a bipartisan effort (Senator Gramm and Alan Greenspan were the most prominent Republicans in the effort), it was led by the Clinton administration – Messrs. Rubin and Summers at their arrogant, anti-regulatory worst.

By appointing Born to the Commission, the Democrats were admitting their error and ensuring that one of the Democratic Party’s great embarrassments – passage of the Commodities Futures Modernization Act – would be exposed. The Democrats were fostering rather than seeking to forbid discussion of their dirty laundry by appointing someone with a proven track record of taking on her own party.

We are witnessing in the multiple Republican apologias for their anti-regulatory policies an example of why we fail to learn the correct lessons from the crises. The groups most in the thrall of the dogma appoint true believers in theoclassical economics to the body that is supposed to find the truth.

As Jonathan Weil wrote in Bloomberg a few days ago (again, HT to Barry),
To examine the causes of the financial crisis, Congress created a bipartisan panel of 10 political appointees led by Democrat Phil Angelides, a former California state treasurer. What was needed was a nonpartisan investigation directed by seasoned prosecutors (like Pecora was) who know how to cross-examine witnesses and get answers.

Ferdinand Pecora, the chief counsel who led the Senate Banking Committee’s landmark hearings on the 1929 stock market crash, wrote a memoir years later called “Wall Street Under Oath.” A good title for this week’s report would be Wall Street on the Couch.” It remains to be seen whether the commission will make public all the investigative materials it accumulated, as the Pecora Commission did in 1934.

Whereas Pecora had no fixed deadline, Congress gave the crisis commission until December 2010 to complete its inquiry. Witnesses who didn’t want to cooperate fully could simply milk the clock. The panel got a budget of less than $10 million to investigate all the causes of the financial crisis. Lehman’s bankruptcy examiner got $42 million to produce a 2,200-page report on the failure of a single company.

Barry Ritholz, who has been writing about many of the faults found in the FCIC for years, culminating in his Bailout Nation book (one of few books Guambat is reading recently), has been keeping close tabs on the FCIC fallout.

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Iran's New Year's Resolution: To just hang in there

Opinion: Meanwhile, Iran is hanging one person every eight hours
Iran is quietly and efficiently hanging people at an alarming rate. The tempo has increased since the New Year, with 66 victims as of today and counting.


Saturday, January 22, 2011

"Australian" is a race?

Australia is, to Guambat's knowledge, the only country in the world to basically close for a horse race. That's the extent of their racist character, as far as Guambat is concerned. (Struth, there's rednecks, ockers and various others, many of particular ethnic persuasion, with intolerant ethnic predilections, but let's no go there here.)

But a bloke in the UK is claiming he's being "racially" harassed because of his Australian origins. Guambat reckons that's a bit of a long bow.

Aussie suing for race abuse after workmates call out 'G'day, sport'
They regularly greet him by saying ‘G’day, sport’ and ‘Is your girlfriend called Sheila?’.

Other phrases include ‘throw another shrimp on the barbie’ and jokes about kangaroos.

He has been off sick since August with depression and is attending counselling sessions.

Aw, right. Taking a sickie. Fair dinkum, that is Aussie, Mate.


Republican bankrupt State aid plan

Before getting into this, just know that in bankruptcy, owners of capital lent to the debtor are usually protected by security agreements, at least to some extent. Owners of labor, however, have no security over the debts due them for their efforts, and generally get nothing.

This story is another in the classic struggle between capital and labor. And when that economic struggle turns political, it's battle to the death between Republicans (capital) and Democrats (labor). Not that either party has ever died, but it certainly feels like a death to most of us on Main Street who suffer the wars above and around us.

Now that Wall Street and Big Business has been thoroughly bailed out by the US Treasury and Federal Reserve, which started with the TARP and other massive helicopter droppings of money under the Bush Administration and landed in the lap of luxury of the Obama Administration, the Republicans want to pull the plug on "bailing out" Main Street.

Bailing out capital is one thing that must be allowed come what may, but bailing out labor? Nah.

State bankruptcy bill imminent, Gingrich says
For months he has championed letting states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market.

"We're faced with the danger that the states are going to try to show up and say to Washington: You have to give us money," Gingrich said. "And I think we have to have an alternative that allows us to say no."

Because states are sovereign, they cannot declare bankruptcy as cities can, and most have provisions in their constitutions that make defaulting on debt next to impossible.

And California -- a state which Gingrich said would likely turn to Congress for financial help along with New York and Illinois -- said on Friday it has no interest in using bankruptcy to solve its fiscal problems.

"Just the availability of a bankruptcy option and the potential bond default could severely damage state credit ratings and destroy the trust of bondholders," said New York State Comptroller Thomas P. DiNapoli.

"The very fact of the bill existing... allows governors to sit down with unions and say: 'Look you, negotiate with us or I'm taking the state into bankruptcy,'" Gingrich said.
Gingrich's pals in the Bush administration (and his presumed enemies in Obama's) could have done the same thing with Big Banks and other big business like GM and AIG, forcing them into bankruptcy rather than buying in and "loaning" more money, at zero-ish interest rates. But that just cuts too close to their home.

Guambat supposes it is not very near their home to force pension funds into bankruptcy, by contrast. Guambat's pension, like most of us on Main Street, is Social Security. He reckons once Newt and his boys get done with the pensions, they're off to bust up Social Security too, like they've just done with Medicare. It's just another unfair income redistribution mechanism to them.

U.S. State Bankruptcy Weighed by Republicans Blocking Aid
U.S. House Republicans, emboldened by the majority they won in November elections, want to send a message to U.S. states grappling with soaring pension liabilities: Don’t come to us for a handout.

Fewer than half of state retirement systems had assets to pay for 80 percent of promised benefits in their 2009 fiscal years, according to data compiled by Bloomberg. They now face the end to federal stimulus payments granted two years ago to help them cope with the deepest recession in 80 years.

“We are not interested in a bailout,” Representative Paul Ryan, a Wisconsin Republican and chairman of the House Budget Committee, said at a Jan. 6 forum in Washington.

“Should taxpayers in Indiana, who have paid their bills on time, who have done their job fiscally, be bailing out Californians, who haven’t,” he said. “No, that’s a moral hazard we are not interested in creating.”
[Guambat would extend that rhetoric to ask, should taxpayers in Indiana, who have paid their debts on time, who have done their job fiscally, be bailing out Wall Street and the Big Banks, who haven't? No, that's a moral hazard that they created very purposefully and Guambat is not interested in perpetuating.]
Utah Representative Jason Chaffetz said “My bill really sends a warning shot across the bows of the states to get their fiscal houses in order,” he said. “It’s intended to wake up the states, wake up the public, to let them know they can’t just run to the federal government to bail them out.”

Talk of allowing states to declare bankruptcy may affect investors’ faith in the general-obligation debt they issue, said Gary Pollack, head of bond trading at Deutsche Bank AG’s private wealth management unit in New York.

“One of the reasons we point to them and say that they’re great is that they can’t declare bankruptcy,” Pollack said of general-obligation debt, which is backed by the taxing power of states. “It’s just another piece of negative news that muni market doesn’t need right now.”

Republican calls in November for less federal spending resonated with voters angry over the billions of taxpayer dollars spent on financial institutions blamed for causing the financial crisis. Republicans will apply the same argument as they move to prevent states from leaning on the federal government.
Guambat hopes that Main Street sees through the subterfuge. Bailing out the banks and bailing out the guy next door are not in pari passu, pal.

Here's were all the fuss has taken root, in the following non-contextual excerpts from parts of a speech by Newt Gingrich last November (worth reading in whole):
I also hope the House Republicans are going to move a bill in the first month or so of their tenure to create a venue for state bankruptcy, so that states like California and New York and Illinois that think they’re going to come to Washington for money can be told, you know, you need to sit down with all your government employee unions and look at their health plans and their pension plans and frankly if they don’t want to change, our recommendation is you go into bankruptcy court and let the bankruptcy judge change it, and I would make the federal bankruptcy law prohibit tax increases as part of the solution, so no bankruptcy judge could impose a tax increase on the people of the states (applause).

I think reclaiming liberty is a very, very important concept.

What I want to focus on tonight is the concept of replacement. I think we have to move from a rejection model of conservatism to a replacement model of conservatism and these two words are enormously important.

Think of the Declaration of Independence as an act of rejection. However, that didn’t make us independent. But it was the replacement of British military power with American military power which made the difference.

A few years later, the wisest and most sophisticated Americans had come to the conclusion that the Articles of Confederation were too weak for the country to survive. And they met for 55 days in Philadelphia and they wrote the Constitution of the United States which was an act of replacement.

The American people repudiated the left in 1972. The left didn’t notice it because the power of the left isn’t in popular elections. The power of the left is in tenured academics. The power of the left is the news media. The power of the left is the bureaucracy. The power of the left is union leadership. The power of the left is inside the judgeships. The power of the left is in fact in the Hollywood literati.

The fact is rejection is an inadequate, long-term strategy if you are serious about saving America, because rejection doesn’t fix a center left coalition.

And that requires us to adopt, I believe, a fundamentally new strategy: a strategy of replacement. We have to look at every level of American society, and every level of American government, and we have to decide that we are going to replace the left.
When I describe replacement, I think there are five goals for replacement. I will describe them very briefly and then take a minute on each one. The first goal has to be to reassert and reestablish the American Exceptionalism.

This is the most important argument of the next twenty years. And it’s very simple. American exceptionalism is a specific reference to a fact, yhat the founding document of the United States of America, a political document, The Declaration of Independence, says, “We hold these truths”, not this ideology, not these principles, not this theory, “We hold these truths to be self-evident, that all men are created equal” and “that they are endowed by their Creator with certain unalienable rights among which are life, liberty, and the pursuit of happiness.”

it poses for the National Education Association, the simple clear question, “How do you explain Creator?” “How do you explain unalienable rights?” Founding Fathers are clear about this. The Founding Fathers believed, this is why it’s American exceptionalism, it’s the only country in history that says, “Power comes from God, to each one of you, personally. You are personally sovereign”

There’s no provision in the Declaration of Independence for an entitlement to happiness. There’s no provision for a Department of Happiness (laughter). There’s not provision for happiness stamps, so that the under-happy can be compensated (laughter). There’s no provision for the right to sue if you’re unhappy (laughter). And there’s no provision for a politician to walk in and say, “I am taking from the overly happy to redistribute to the underly happy (applause and laughter), and that’s why Obama-ism is a fundamental, radical break from all of American history and represents some weird combination of academic theory and European secular-socialism. But then that leads us to core values. Because American exceptionalism means the work ethic, which is why I believe we should replace all unemployment compensation with a training program.

all you have to do is reform seven areas: litigation, regulation, taxation, education, health, energy, and infrastructure. You reform those seven, piece of cake, we got it done, that’s a fact. (laughter and applause).

The second goal has to be to commit ourselves to benchmarking China and India, and undertaking the reforms necessary to be the most productive, most creative, and most prosperous country in the world, because that is the base to have a national security system that enables us to be the safest, and freest country.

The third goal has to be to recognize that government has been the fourth bubble after information technology in 1999, housing in 2007, and Wall Street in 2008. The government has to become dramatically smaller, dramatically less expensive, much more decentralized out of Washington, and that every major interest group, starting with the government employee unions, will fight bitterly against that kind of change.

The fourth is we have to have the courage to tell the truth about radical Islamists, and we have to have the courage to act on that truth.

And the fifth example is that we have to be prepared to say, with the deepest of meaning, that we truly believe that every American is endowed by their Creator with certain unalienable rights, among which are life, liberty, and the pursuit of happiness. And that we are determined to go into the poorest communities, of every part of America, whether it is in the valley, the inner city, poor rural areas, you name it. And we are going to change the culture, we are going to change the bureaucracy, we are going to change the tax code.

We can offer their children and grandchildren a vastly better future than the bureaucratic welfare state of dependency, coercion, and ineffectiveness (applause).

Anyway…so let me start with a key organizing principle of the next ten years. Job killing policies kill jobs. It’s only five words. I think it sort of captures it.

So a party, which has policies which kill jobs, creates income redistribution.

If we can arouse the community of faith, the community of belief, a community of patriotism, then the job Callista and I will have to do is very easy. And if we can’t, then our job’s hopeless.

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Monday, January 17, 2011

Truth in Advertising

Toxic Waste Bars Have Hazardous Levels Of Lead, Recalled
The recall refers to all flavors of "Toxic Waste® brand Nuclear Sludge® Chew Bars", net weight 0.7oz (20g) package.

These candy products are made in Pakistan.

According to the California Department of Public Health (CDPH), lot number 8288A (cherry flavor) had levels of lead which have the potential to cause health problems, especially among small children, infants and pregnant mothers.

The company says it is recalling all lots and flavors distributed since 2007 "out of an abundance of caution".

The following products are included in this recall:

* Toxic Waste® Nuclear Sludge® Cherry Chew Bar - UPC 0 89894 81430 6
* Toxic Waste® Nuclear Sludge® Sour Apple Chew Bar - UPC 0 10684 81410 7
* Toxic Waste® Nuclear Sludge® Blue Raspberry Chew Bar - UPC 0 89894 81420 7.

Guambat did not make this up.

Couldn't possibly.

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Wednesday, January 12, 2011

Birdbrains of a feather Glock together

Glock Pistol Sales Surge in Aftermath of Arizona Shootings
Instead of hurting sales, the massacre had the $499 semi-automatic pistols -- popular with police, sport shooters and gangsters -- flying out the doors

a deadly demonstration of the weapon’s effectiveness has also fired up sales of handguns in Arizona and other states

One-day sales of handguns in Arizona jumped 60 percent to 263 on Jan. 10

Handgun sales rose 65 percent to 395 in Ohio; 16 percent to 672 in California; 38 percent to 348 in Illinois; and 33 percent to 206 in New York, the FBI data show.

“Whenever there is a huge event, especially when it’s close to home, people do tend to run out and buy something to protect their family,” said Don Gallardo, a manager at Arizona Shooter’s World in Phoenix, who said that the number of people signing up for the store’s concealed weapons class doubled over the weekend.

Light and easy to use, a Glock 9 mm was also wielded by the Virginia Tech killer, Seung-Hui Cho, in a spree that left 32 people dead. The gun is among the most popular sidearms for U.S. police departments. A negative for law enforcement is that the rifling of the barrel makes it almost impossible to match a bullet to an individual weapon with ballistic tests

Arizona law allows anyone to carry a gun in public if it’s in full view, making it what’s known as an open-carry state. Until recently, gun store owners say, it was common to see people carrying weapons in grocery stores or coffee shops. That’s less true today, because last year that state passed a law allowing individuals to carry a concealed weapon without a permit.


Chinese accounting standards? Better beer me first

Tsingtao hopes to ditch foreign auditors
Tsingtao Brewery, China’s biggest beer company, is seeking shareholder approval to dismiss its foreign auditors and rely solely on mainland Chinese auditors and accounting standards to prepare its financial statements.

In the past, Hong Kong-listed companies were only permitted to use Hong Kong auditors and to prepare their statements using International Financial Reporting Standards or the virtually identical Hong Kong Financial Reporting Standards.

The brewery said the proposed dismissal of its overseas auditor, PwC, would “improve the efficiency and reduce the costs of disclosure”.

Reducing costs of disclosure?? For whom???

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Saturday, January 08, 2011

Freedom of speach and association does not mean freedom from Big Brother

Yes, you can talk the talk and walk the walk, but not anonymously. We must all be accountable, if not judgmentally, for what we say and do.

Chilling effects do not extend to Iceland. So says the US Dept. of Justice.

US tells Twitter to hand over WikiLeaks supporter's messages
A member of parliament in Iceland who is also a former WikiLeaks volunteer says the US justice department has ordered Twitter to hand over her private messages.

Birgitta Jonsdottir, an MP for the Movement in Iceland, said last night on Twitter that the "USA government wants to know about all my tweets and more since november 1st 2009. Do they realize I am a member of parliament in Iceland?"

She said she was starting a legal fight to stop the US getting hold of her messages, after being told by Twitter that a subpoena had been issued. She wrote: "department of justice are requesting twitter to provide the info – I got 10 days to stop it via legal process before twitter hands it over."

She said the justice department was "just sending a message and of course they are asking for a lot more than just my tweets."

In Iceland she has championed the Icelandic Modern Media Initiative which is aimed at creating legislation to make Iceland a legal haven for journalists and media outlets.

She is not the first WikiLeaks associate to be targeted by US officials. Last July Jacob Appelbaum, one of Assange's closest colleagues, was interrogated for three hours and had his phones confiscated upon entering the country at Newark airport. Customs officials photocopied receipts and searched his laptop.

The justice department did not returns calls seeking comment last night.

Twitter would not comment on the case. In a statement, the company said: "We're not going to comment on specific requests, but, to help users protect their rights, it's our policy to notify users about law enforcement and governmental requests for their information, unless we are prevented by law from doing so."

Most of Twitter's messages are public, but users can also send private messages on the service.

Guambat is not a fan of nor participant in all this "social network" stuff. He sees "the cloud" as a toxic plume. If you do not dare to share your most intimate thoughts with anyone, why in the world would you display yourself to the public at large in this medium?

You have no right to demand privacy if you divulge all you know voluntarily. You live in the age of a Big Brother that is bigger and more pervasive than the Big Brother was ever envisioned in 1984.

At your peril.


Eating out of house and home

As if we weren't troubled enough by banks trying to force us out of our houses and homes (see prior post), now comes the news from Peter Boockvar over at the Big Picture, that we're about to eat ourselves out of house and home:
The CRB foodstuffs sub index last night rose to exactly match its record high reached in July ’08. The index dates back to 1981 and includes butter, cocoa, corn, hogs, lard, soybean oil, steers, sugar and wheat. Also, the Journal of Commerce index today is rising to a record high

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Massachusetts Supreme Ct upholds law, banks quiver

Guambat has been one of the smallest of very many voices discussting the securitization of real estate mortgages.

Banks very merrily and purposefully just disregarded the law of real property, setting up their own rules which they determined were above the law. They're feeling a bit insecure about their security just about now.

Indeed, Fox News would seem to have you believe that the nasty courts were just being unsportsman like to the banks:

Court Deals Blow to Banks in Foreclosure Case
Banks were dealt a big blow on Friday after a Massachusetts top court ruled Wells Fargo didn't have the right to foreclose on a pair of homes because they securitized and repackaged the mortgages.

The ruling could impact the broader financial industry because virtually all banks slice mortgages up and sell them back to investors.

First, understand what's happened. The courts are not saying that peoples' debts are invalid. This is not about the debt. The courts are saying banks cannot just take peoples' properties from them to recover the debt.

This is about property law, not creditor rights. And the banks simply ignored the property law. In a land of laws, that's a risky thing for anyone to do. Of course, banks have had it all so one sided for so long they seem to have overlooked the notion.

A more level-headed Fox scribe at the WSJ put it this way:
In the ruling, the court said, "We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure. As a result, they did not demonstrate that the foreclosure sales were valid to convey title to the subject properties, and their requests for a declaration of clear title were properly denied."

A blog post in the Washington Post has done a very useful service in providing a link to the Massachusetts Court's Decision, and in discussing it:
After examining the paperwork filed by the banks, a lower court judge, the Massachusetts Land Court's Keith C. Long, said he had determined that the mortgage "note" that proves who the owner is had not been properly transferred when the banks auctioned off houses.

Long's decision hits on one of the most sensitive issues related to how mortgages were securitized: something called "endorsements in blank." In the rush to aggregate and sell and then resell mortgages, many of the mortgages documents were transferred without explicitly naming who the note was being sold to.

The financial services industry has argued that this practice is legally valid but Long ruled, "These blank mortgage assignments were never recorded and they were not legally recordable."

The banks had appealed Long's decision, arguing that they had clear title to the properties. But on Friday, Massachusetts Supreme Court Justice Ralph D. Gants wrote that the court agreed that the banks "failed to make the required showing that they were the holders of the mortgages at the time of foreclosure."

The link that was provided is here.

The Decision noted that this was hardly a trifling technical error. It was a massive error committed in a situation where the banks were given powers of significant proportion over other people's property without any judicial oversight. The conflicts of interest are obvious, and in need of obvious integrity, which the banks lack. In the more solemn words of the Court, the Justice said,
"Recognizing the substantial power that the statutory scheme affords to a mortgage holder to foreclose without immediate judicial oversight, we adhere to the familiar rule that "one who sells under a power [of sale] must follow strictly its terms. If he fails to do so there is no valid execution of the power, and the sale is wholly void."

One of the terms of the power of sale that must be strictly adhered to is the restriction on who is entitled to foreclose.

Any effort to foreclose by a party lacking "jurisdiction and authority" to carry out a foreclosure under these statutes is void.

For the plaintiffs to obtain the judicial declaration of clear title that they seek, they had to prove their authority to foreclose under the power of sale and show their compliance with the requirements on which this authority rests.

Like a sale of land itself, the assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor.

Where, as here, mortgage loans are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone's home or farm and must be treated as such.

Where a plaintiff files a complaint asking for a declaration of clear title after a mortgage foreclosure, a judge is entitled to ask for proof that the foreclosing entity was the mortgage holder at the time of the notice of sale and foreclosure, or was one of the parties authorized to foreclose under G.L. c. 183, § 21, and G.L. c. 244, § 14. A plaintiff that cannot make this modest showing cannot justly proclaim that it was unfairly denied a declaration of clear title.

We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment.

the plaintiffs contend that, because they held the mortgage note, they had a sufficient financial interest in the mortgage to allow them to foreclose. In Massachusetts, where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage.

the plaintiffs initially argued that postsale assignments were sufficient to establish their authority to foreclose, and now argue that these assignments are sufficient when taken in conjunction with the evidence of a presale assignment. They argue that the use of postsale assignments was customary in the industry

To the extent that the plaintiffs rely on this title standard for the proposition that an entity that does not hold a mortgage may foreclose on a property, and then cure the cloud on title by a later assignment of a mortgage, their reliance is misplaced because this proposition is contrary to G.L. c. 183, § 21, and G.L. c. 244, § 14.

If the plaintiffs did not have their assignments to the Ibanez and LaRace mortgages at the time of the publication of the notices and the sales, they lacked authority to foreclose under G.L. c. 183, § 21, and G.L. c. 244, § 14, and their published claims to be the present holders of the mortgages were false.

Because an assignment of a mortgage is a transfer of legal title, it becomes effective with respect to the power of sale only on the transfer; it cannot become effective before the transfer.

A valid assignment of a mortgage gives the holder of that mortgage the statutory power to sell after a default regardless whether the assignment has been recorded. Where the earlier assignment is not in recordable form or bears some defect, a written assignment executed after foreclosure that confirms the earlier assignment may be properly recorded. A confirmatory assignment, however, cannot confirm an assignment that was not validly made earlier or backdate an assignment being made for the first time.

In this case, based on the record before the judge, the plaintiffs failed to prove that they obtained valid written assignments of the Ibanez and LaRace mortgages before their foreclosures, so the postforeclosure assignments were not confirmatory of earlier valid assignments.

Finally, we reject the plaintiffs' request that our ruling be prospective in its application. A prospective ruling is only appropriate, in limited circumstances, when we make a significant change in the common law. We have not done so here.

The legal principles and requirements we set forth are well established in our case law and our statutes. All that has changed is the plaintiffs' apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities.

The banks have tried to make the claim that the deficiencies were merely "technical", but they did a very heavy make-over on some very fundamental property law principles when they tried to pull this little caper. These cases were about taking title to land, not about suing on a debt.

The banks are great ones when it comes to making so many technical conditions to entrap others or baffle regulators or sneak through purposefully designed holes in legislation. When they trip up themselves in their own technical contrivances, they should bear the risk they created.

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Wednesday, January 05, 2011

Teeter totter

England swings like a pendulum do,
Bobbies on bicycles, two by two,
Westminster Abbey the tower of Big Ben,
The rosy red cheeks of the little children.

-- Roger Miller

The rise and fall of nations is an old tale. And if history is any guide to the future, will continue to be the pendulum by which England, China, Russia, France, Spain, Japan, Greece, Persia, India and the USA also swing. And others yet to come.

The pendulum, as does a teeter-totter, passes through an equilibrium before careening on to a point of return. Sort of like the economic/business cycle.

Guambat has been wondering of late if the USA is approaching its point of equilibrium after having reached a high point of return?

At the risk of being tarred and feathered as Malthusian, he bases this worry on demographics. Is it any coincidence that the longest/strongest bull run in USA history coincides with the maturing of the baby boomers? Is the great bull run simply an unprecedented healthy and wealthy population bulge that turbo charged the consumer-driven economy? If not, then might the pendulum swing the other way with the aging of them? Think Japan (see, Getting a bit long in the ha), a population hit by the ray gun in "Honey, I Shrunk the Kids".

Adding to this worry are two stories in the Financial Times this weekend:

In the grip of a great convergence By Martin Wolf
Convergent incomes and divergent growth – that is the economic story of our times. We are witnessing the reversal of the 19th and early 20th century era of divergent incomes. In that epoch, the peoples of western Europe and their most successful former colonies achieved a huge economic advantage over the rest of humanity. Now it is being reversed more quickly than it emerged.

What is unprecedented this time is not convergence, but the scale. Suppose China were to follow Japan’s path during the 1950s and 1960s. Then it would still have 20 years of very fast growth in front of it, reaching some 70 per cent of US output per head by 2030. At that point, its economy would be a little less than three times as large as that of the US, at PPP, and larger than that of the US and western Europe combined.

China is today where Japan was in 1950, relative to US levels at that time. But its output per head is far higher in absolute terms, since US levels have themselves risen threefold. Today, China’s real GDP per head is roughly where Japan’s was in the mid-1960s and South Korea’s in the mid-1980s. India’s are where Japan was in the early 1950s and South Korea in the early 1970s.

In short, today’s divergent rates of growth between successful emerging economies and the high-income economies reflects the speed of the convergence of incomes between them. This divergence in growth is staggering.

The great convergence is a world-transforming event. Today, the west – defined to include western Europe and its “colonial offshoots” (the US, Canada, Australia and New Zealand) – contains 11 per cent of the world’s population. But China and India contain 37 per cent. The present position of the former group of countries will not be sustained. It is a product of the great divergence. It will end with the great convergence.
Asia: the rise of the middle class By David Pilling, Kathrin Hille and Amy Kazmin
Until recently, many economists were openly sceptical about the idea that China, or any other emerging Asian economy, could spirit a sizeable consuming class from the mass of poverty at the base of the social pyramid. But that scepticism is beginning to fade.

This year could be the one when talk of Asia’s export-led development begins to give way to a realisation that much of the region’s future growth will be self-generated. That could even begin to address the global imbalances resulting from Asia’s export-led model that have been at the heart of the global financial crisis.

Not only in China but in countries including India, the world’s second most populous; Indonesia, a fast-growing nation of 240m; and Vietnam, 85m-strong and following in China’s developmental footsteps, the consuming class is beginning to grow. Even in less obviously successful economies such as the Philippines, which has a population of nearly 95m, years of steady if sub-optimal growth are creating pockets of broader affluence.

The emergence of a middle class in Asia beyond the prosperity that already exists in Japan, South Korea, Taiwan, Singapore and Hong Kong will have far-reaching consequences. With growth likely to be anaemic in Europe and possibly America for many years to come, businesses from food to insurance are desperate for new consumers with money to spend. Many may find the opportunity they need in Asia.

In truth, it is not so much a worry as a wonder. A wonder of what that world will look like. A wonder of what its consequence might be for Mrs and Mr Guambat, and their kids and generations. A wonder more filled with a yearning to participate than a fear of loss, but not devoid of the latter, either.


Blackbird dying in the dead of night

Blackbird singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise

Blackbird fly, Blackbird fly
Into the light of the dark black night.

-- The Beatles, Blackbird

This story is just too good to pass up, so Guambat will join the merry throng finding much to puzzle over in this one, and be amused by all the hysteria.

It all started late in December with this fishy story that caught Guambat's eye. Guambat's parents live in Arkansas, so he pays some attention to the goings on there.

Officials Investigate Dead Fish in Logan Co.
The Arkansas Department of Health is advising people fishing near the Roseville Community Boat Ramp in Logan County off Highway 30 not to eat any of the dead fish floating in the water.

Several thousand fish, primarily Drum, have been killed. The Arkansas Game and Fish Commission and the Arkansas Department of Environmental Quality are investigating how the fish died.
Department Of Health Warns About Fish Kill
The fish line a stretch of the bank about a mile long.

Arkansas Department of Environmental Quality investigator Travis Harmon said inspectors have considered a toxic dump and low oxygen levels but have nearly ruled out both.

"It's a single species kill. We don't know the cause. We don't think that's the case here. You would have other species effected not just drum," Harmon said.
Guambat's mother is a bit of a rebel-rouser, with major, well-earned gripes with the gas mining that's re-gerrymandering the countryside there. See, for instance here and here and here and here, and here, and here, etc.

So Guambat figured, at first glance, that this might have something to do with it, respectfully prejudicial son that he is. But maybe not, as far as that story revealed, anyway.

Then along comes the bird story, although Guambat is not sure which actually came first in time. Thousands of them. Surely that is related to the mining? Well, maybe yes, maybe no.

First Birds Fall, Now 100,000 Fish Dead in Arkansas
Thousands of dead fish have turned up in an Arkansas river just days after 3,000 birds mysteriously dropped dead from the sky, but authorities say the deaths are not related.

An estimated 100,000 dead drum fish are floating along a 20-mile stretch of the Arkansas River and washing up on the river's banks near the town of Ozark in the northwestern part of the state.

The dead fish were discovered just after 3,000 red-wing blackbirds fell from the sky in the town of Beebe, more than 100 miles from the site of the dead fish. Officials, who tripled the early estimates of the number of dead birds, said the bird deaths may have been caused by lightning or by stress from fireworks and said they were unrelated to the fish kill.

Andrew Goodwin, the associate director of the University of Arkansas' Aquaculture and Fisheries Center, said he didn't believe the deaths were caused by pollutants. "It's unlikely to be a toxin," Goodwin told AOL News by phone today.

Goodwin said the area of the Arkansas River where the dead fish were found is not known to be particularly contaminated. He said it would take a few weeks for researchers to determine exactly what killed the fish.

Instead, Goodwin said he suspected that the drum fish may have experienced a population boom this summer that created more competition for food and sapped the weaker ones of their ability to fight off disease.

"It's your classic boom and bust," he said. "A group of fish will go into a population boom, and then they're competing for food, so they may not be in really good condition. Then during a cold snap the environment changes with the temperature, and their immune systems are compromised and can't always fight infection."
And then, like a Hitchcock tale, the woe began to spread.

Massive Fish Kill in the Chesapeake Bay; Is American Wildlife Cursed?

dead fish in Maryland, Brazil and New Zealand

Louisiana has mass bird deaths just days after Arkansas
In Louisiana, the birds died sometime late Sunday or early Monday in the rural Pointe Coupee Parish community of Labarre, about 30 miles northwest of Baton Rouge. The birds — a mixed flock of red-winged blackbirds, brown-headed cowbirds, grackles and starlings — may have hit a power line or vehicles in the dark, LaCour said. Two dozen of them had head, neck, beak or back injuries.

About 50 dead birds were near a power line 30 or 40 feet from Louisiana Highway 1. About a quarter-mile away, a second group of 400 or more stretched from the power line and across the highway, he said.
It was about here that Guambat, despite the tragedy to his fellow critters, started to become amused by it all. Others were amused, too, so it seems:

When Will The Birdpocolypse Hit New York?
Let's not wait until 100,000 pigeons fall dead on some precious Williamsburg rooftop garden—it's time to build a bubble over the city
Guambat is amused because, in the first place, human-kind has not been real good, but is improving, in ferreting out causation from startlingly and apparently unique events. For instance, from a story cited above are these hypotheses:
Mass bird deaths aren't uncommon. The U.S. Geological Service's website listed about 90 mass deaths of birds and other wildlife from June through Dec. 12. There were five deaths of at least 1,000 birds, with the largest near Houston, Minn., where parasite infestations killed about 4,000 water birds between Sept. 6 and Nov. 26.

In 1999, several thousand grackles fell from the sky and staggered about before dying in north Louisiana. It took five months to get the diagnosis: an E. coli infection of the air sacs in their skulls.

Dan Cristol, a biology professor and co-founder of the Institute for Integrative Bird Behavior Studies at the College of William & Mary, said the Louisiana birds may have been ill or startled from their roost, then hit the power line. "They don't hit a power line for no reason," he said.

Cristol was skeptical of the fireworks theory, unless "somebody blew something into the roost, literally blowing the birds into the sky."

Some speculated that bad weather was to blame.

Others said one confused bird could have led the group in a fatal plunge.

A few spooked schoolkids guessed the birds committed mass suicide.

Officials acknowledged, though, they may never know exactly what caused the large number of deaths.
Another story provides these clues:
Officials were still collecting bodies in Louisiana but have already examined those from the incident in Arkansas. They concluded that the birds had suffered internal trauma. That could have happened if a single flock had suddenly got caught in a violent and unusual storm.

Or, it has been speculated, a local fireworks display could have startled the birds so badly that they were unable to prevent themselves from flying into trees, pylons and houses.

"Mass bird die-offs can be caused by starvation, storms, disease, pesticide, collision with man-made structures or human disturbance ... Initial findings indicate that these are isolated incidents that were probably caused by disturbance and disorientation," Greg Butcher, director of bird conservation at the Audubon Society, said.
But, it seems the path of least resistance in human "reasoning" leans to conspiracy theories, as in the following story:
There is speculation in some corners that perhaps some sort of government testing might be responsible for the sudden deaths of 2,000 to 3,000 red-winged blackbirds in a small Arkansas town on New Year’s Eve.

The knowledge that electromagnetic scalar weapons can manipulate the environment and cause such catastrophic events is leading some to speculate that perhaps the government or a terrorist group could actually be behind the strange phenomenon.

Defense Secretary William Cohen stated in 1997 that the government was aware of eco-type terrorism involving the ability to alter the climate through means such as electromagnetic waves.
While human-kind's track record in finding causation is improving, it is still muddled by coincidence and, as noted, paranoia. Indeed, most genesis tales from around the world are grounded in anecdote, fear and coincidence. Most superstition and other religion stems from it, too. That's the part that has made the story more merry than amusing to Guambat.

Here's a taste of how this story has gone off the deep end, sometimes tongue in cheek, sometimes foot in mouth.

Solar eclipse 2011 and dead birds and fish in Arkansas not good omen

Dead birds and fish: Bible prophecy Web searches explode
The incidents have prompted Christian sects to look to the Bible and, most importantly, to the sky, for more alleged signs of apocalyptic happenings.

While no one person, not even self-proclaimed prophets, know if God of the Christian Bible is now ushering mankind into the End Times, many believe this week’s dead birds and fish are a sign the Great Tribulation talked about in the book of Revelation and Daniel is fast approaching.

As soon as reports of the 4,000 dead birds in Arkansas hit the Web, Saturday, forums were littered with prophecy comments.

The discussion is now on for those stating that the Seventh Seal has been opened and others who are predicting widespread pestilence in coming weeks.

As of Tuesday afternoon, Jan. 4, forum moderators and preachers have been busy answering questions about whether God has finally revealed that the return of Jesus Christ will be sooner that many believers think.
Bible Prophecy? Arkansas' dead birds and dead fish prompt massive Internet search for confirmation of apocalypse and the end times
Today, news of Arkansas' dead red-wing blackbirds and dead fish prompted an Internet firestorm of people doing massive searches relating the dead birds and dead fish to the apocalypse and/or the end times. The article on GodDiscussion received more than 15, 817 views in 18 hours on this topic, with search terms including "dead birds Bible," "dead birds dead fish revelation," among other similar apocalyptic search terms, and the apocalyptic search terms for this article is still going strong at this hour.

There were many comments about "biblical prophecy" coming true with dead birds falling from the sky, the dead birds being related to the seventh seal of Revelation (one suggested the sixth seal), and upon looking, neither the sixth or seventh seals mention anything about dead birds or dead fish. In fact, upon consulting Strong's Exhaustive Concordance of the Bible, research using "birds" "fish," "dead birds," and "dead fish" turned up zero Biblical references. Hosea 4:3 was the closest the research turned up, and was brought up by one commenter. However, this verse talks about the whoring of Israel and the unfaithfulness of the priests of Israel and the people of Israel. It is not talking about end times, or anything having to do with the apocalypse.

Today's massive reaction to the dead birds and dead fish article reminds us of the Pew Research Forum study where 41% of Americans believe that Jesus Christ will return by the year 2050....
Guambat, ever the obedient son, reckons it must be the gas mining. Or the gas vapors.


Swedish birds 'scared to death': veterinarian
A county veterinarian has speculated that the birds that fell from the sky in central Sweden on Tuesday may have been frightened by fireworks, then run over by a car after landing on the road in the dark.

Shortly before midnight on Tuesday, residents found 50 to 100 jackdaws on a street in Falköping southeast of Skövde. The incident echoed a number of unexplained incidents earlier this week across the southern US.

County veterinarian Robert ter Horst believes that the birds may have been literally scared to death by fireworks set off on Tuesday night.

"We have received information from local residents last night. Our main theory is that the birds were scared away because of the fireworks and landed on the road, but couldn't fly away from the stress and were hit by a car," he explained to The Local on Wednesday.

ter Horst noted that he has also received some reports about pigeons, but the incident has happened too quickly to assume that it is related to the untimely demise of the jackdaws.

Dead Birds and Nostradamus predictions: dead birds found in three states
Nostradamus writes:

“A great stench will come from Lausanne, but they will not know its origin, they will put out all people from distant places, fire seen in the sky, a foreign nation defeated.”

This is from the website Occult view, who makes the case that the dead birds and dead fish would cause a stench, the fire in the sky could be the solar eclipse that happened today. He also points out that Lausanne was what the area of Arkansas and Louisiana before it was part of the US. In the mid 1600’s a French explorer, Rene-Robert Cavelier named this territory Lausanne, in honor of King Louis XIV of France.

Another writing of Nostradamus:

"The Antichrist will be the infernal prince again for the third and last time….so many evils shall be committed by the means of Satan, the infernal Prince, that almost the entire world shall be found undone and desolate. Before these events happen, many rare birds will cry in the air, “Now! Now”! and sometime later will vanish."

This is discussed on the website Hogue Prophecy. Hogue discussed this after the same type of dead bird phenomenon occurred in Coxley Somerset, England. The same thing happened with starlings that just fell from the sky and had all kinds of injury because of this. Broken beaks, wings and bloodied bodies is what was found with this mass of dead birds in England. The authorities never found out how they died, just that they may have been scared.

Hogue also says that the Romans looked to the birds as messages from the Gods.

Occult View also “finds it curious” that the day of the solar eclipse visible over Europe on January 4th, a 7.0 earthquake on January 1st in Chile, a 7.1 earthquake in Argentina on January 2nd, with dead birds falling from the sky in between all this could be an odd coincidence.

5,000 Dead Birds Fall From the Sky: Let’s Go With the Simplest Explanation
But the mystery of the events is still alluring to us, and I think that’s because when something unsettling or strange happens, our brains start to make connections where there are none, and look for evidence to support our more far-fetched, less reality-based conclusions — ignoring the simple, straightforward explanations.

That’s why another 500 dead birds in Louisiana might tomorrow be followed up with a finding of 300 dead butterflies, or a squirrel plague striking somewhere else in the south. Now that our red flags are up, we’re on the look out for other strangeness to occur — strangeness that would have otherwise flown under our radar.

And unless a nature expert really gives me reason to think otherwise, I’ll stick to the conclusion that the events of the last few days are astoundingly coincidental, rare, sad, and completely unconnected.


Indigestion, Magnetic North swing, and Nine Incidents Beginning to Sound Like the Partridge In A Pear Tree Litany:
turtle doves falling dead in Italy with strange blue stain on their beaks

Thousands of dead turtle doves that rained down on roofs and cars in an Italian town were victims of their on greed, an expert claimed today.

Residents in Faenza described the birds falling to the ground like 'little Christmas balls' with strange blue stains on their beaks.

The birds have been found by residents in the village for the last three days and they alerted authorities after hearing reports of the incident at Faenza.

Initial tests on up to 1,000 of the doves from Faezna indicated that the blue stain could have been caused by poisoning or hypoxia.

Hypoxia, a lack of oxygen, is known to cause confusion and illness in animals. It is also a common precursor to altitude sickness.

Official results on the Italian birds are due tomorrow, but Rodolfo Ridolfi, a director at the regional zoological institute, said:'We are fairly confident the birds died as a result of massive indigestion brought on by over-eating.

The incident is the latest mass animal death to hit the headlines in the last two weeks.

These include:

* 450 red-winged blackbirds, brown-headed cowbirds, grackles and starlings found littering a highway in Baton Rouge, Louisiana
* 3,000 blackbirds on roofs and roads in the small town of Beebe, Arkansas
* Thousands of 'devil crabs' washed up along the Kent coast near Thanet
* Thousands of drum fish washed along a 20-mile stretch of the Arkansas River
* Two million small fish in Chesapeake Bay, Maryland
* Thousands of dead fish found floating in warm Florida creek
* Hundreds of snapper fish found dead in New Zealand
* Scores of American Coots found dead on Texas highway bridge

Another theory is that the rapid movement of the Magnetic North Pole towards Russia may have affected the birds' innate navigation systems.

Scientists have said the Magnetic North Pole is shifting at an average of around 25 miles a year.

With birds and fish relying on it to travel to breeding grounds and warmed climes, there are fears that the shifting pole could be confusing the animals which means they do not migrate in time to avoid cold weather.